Latest / The Chuck ToddCast / Full Episode - Trump Goes Hat In Hand To China + Trump’s Policies Have Been Disastrous For The American Economy

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Full Episode - Trump Goes Hat In Hand To China + Trump’s Policies Have Been Disastrous For The American Economy · The Chuck ToddCast

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  Speaker 1: podcast at check out. This is a sponsor I absolutely embrace,
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  Speaker 1: so use that code. Hello there and happy Thursday, and
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  Speaker 1: welcome to another episode of the check podcast today. It
• 1:45
  Speaker 1: is a crucial interview that I encourage all of you
• 1:48
  Speaker 1: to listen all the way through. I've got chief economist
• 1:50
  Speaker 1: market Zany on the podcast today, and look it is.
• 1:55
  Speaker 1: We go through it all. We go through the current
• 1:58
  Speaker 1: state of the economy. We go through the current state
• 2:02
  Speaker 1: of employment, the news of the debt overtaking total GDP,
• 2:11
  Speaker 1: Various ideas to try to help people lower costs? What
• 2:16
  Speaker 1: could work? What ideas sound good but might actually be
• 2:21
  Speaker 1: self defeating. I'd like to think any question you might
• 2:26
  Speaker 1: have of an economist at the moment, especially one that
• 2:29
  Speaker 1: I trust wholeheartedly, and Mark Sandy really is. He is
• 2:33
  Speaker 1: somebody who has at times advised politicians from both sides
• 2:38
  Speaker 1: of the aisle. People try to, you know, when they
• 2:41
  Speaker 1: don't like what he has to say, claim he's secretly
• 2:44
  Speaker 1: helping the other party. And the thing is is that
• 2:47
  Speaker 1: it's happened to him on both sides of the isle,
• 2:48
  Speaker 1: which tells me he's a straight shooter, and most people
• 2:52
  Speaker 1: I think views Xandy is the straightest of straight shooters
• 2:55
  Speaker 1: in this space. Look, he's also not somebody that is
• 3:00
  Speaker 1: chicken little person either. He just is very data driven
• 3:04
  Speaker 1: and it's a it's a sobering picture that he paints
• 3:07
  Speaker 1: and a few things that I just want to signpost,
• 3:11
  Speaker 1: and I got a few other things before we get
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  Speaker 1: to the interview that I want to get to here
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  Speaker 1: a little bit. But you know, we've basically been in
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  Speaker 1: a sustained you know, inflation has been on a trajectory
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  Speaker 1: upward ever since the President took office. If the president
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  Speaker 1: we're setting out a long term plan to shrink the
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  Speaker 1: American economy, the policies he's been implementing are exactly what
• 3:39
  Speaker 1: you would do now, nobody has said. Marc Zany didn't
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  Speaker 1: say this I'm telling you, this is my interpretation of it.
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  Speaker 1: I but my word right, every single policy decision he
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  Speaker 1: has made has made the American economy more vulnerable in
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  Speaker 1: its place in the world economy. Right when you dec
• 4:00
  Speaker 1: hupple from the world and you were the world's reserve
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  Speaker 1: currency and you were the most I mean the risk
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  Speaker 1: we are putting that his policies have put on this country,
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  Speaker 1: the risks of making you know, the reason we can
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  Speaker 1: finance such a large amount of debt is because of
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  Speaker 1: how central the United States is to the world economy.
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  Speaker 1: But the more he tries to decouple the economy from
• 4:27
  Speaker 1: the world, the easier it is for the world to say,
• 4:31
  Speaker 1: maybe I'm not interested in buying US treasuries translation, maybe
• 4:35
  Speaker 1: I'm not interested in helping America finance its debt. So
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  Speaker 1: the point is is that all these little things tariffs
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  Speaker 1: have increased the cost of goods. His war with Iran
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  Speaker 1: has increased the cost of energy. That's done it. The
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  Speaker 1: little bit of stimulus that people got from the big
• 4:55
  Speaker 1: beautiful bill and the tax cuts. Remember that's that's in
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  Speaker 1: the economy right now, right now. So all of those
• 5:06
  Speaker 1: tax refunds have been gobbled up by inflation by a
• 5:11
  Speaker 1: higher cost of energy, the higher cost of food already
• 5:14
  Speaker 1: gobbled up. So the point is this economy. This is
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  Speaker 1: now this election your economy. But November it is not
• 5:25
  Speaker 1: going to be what the economy is today, and the
• 5:27
  Speaker 1: economy isn't going to be better in November. It's likely
• 5:29
  Speaker 1: to feel worse to people. We still have this twenty
• 5:34
  Speaker 1: percent of the country it's sort of immune from all this.
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  Speaker 1: Eighty percent of the country not immune at all, right,
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  Speaker 1: and it is the eighty percent. The twenty percent maybe
• 5:43
  Speaker 1: financing the election, and the eighty percent is the one
• 5:46
  Speaker 1: feeling the impact, and they're the ones that are going
• 5:48
  Speaker 1: to likely vote with their pocketbook on this one. So
• 5:53
  Speaker 1: when you sort of put the whole big picture together,
• 5:57
  Speaker 1: the only piece of good news out of this is
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  Speaker 1: that the next president or this one, if he chooses
• 6:04
  Speaker 1: to realize every assumption he's ever made is wrong, and
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  Speaker 1: that if he wants to fix the economy, the first
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  Speaker 1: thing you do would get rid of these tariffs. The
• 6:13
  Speaker 1: second thing you do would be to bring back immigrants.
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  Speaker 1: Nobody's saying three million a year, but get it back
• 6:20
  Speaker 1: to a million a year. So everything he has done
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  Speaker 1: in his policies whether it's on immigration, tariffs, the war
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  Speaker 1: with Iran collectively have weakened the American economy and it's
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  Speaker 1: costing you money. It's raising the cost of living, and
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  Speaker 1: we've seen this surgeon inflation and there's really no evidence
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  Speaker 1: that's going to go away unless somehow miraculously this war
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  Speaker 1: with Iran ends over the weekend, and that's unlikely. So
• 6:53
  Speaker 1: the point being is we now know what the election,
• 6:55
  Speaker 1: your economy is going to be, and it's likely to
• 6:58
  Speaker 1: get worse. Few other things do pay attention. I asked him,
• 7:02
  Speaker 1: you know, let's break the country down regionally. You know
• 7:04
  Speaker 1: who's doing well, who's not doing well. Let's just say
• 7:10
  Speaker 1: go buy some Josh Shapiro stock. That's one little hint
• 7:15
  Speaker 1: I'm going to give you on that, all right, before
• 7:17
  Speaker 1: we get to the full interview with Mark. And again
• 7:19
  Speaker 1: it is like I said, it always is very helpful
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  Speaker 1: to me to understanding the economy. I think he does
• 7:25
  Speaker 1: a great job of speaking English, not economist. But it's
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  Speaker 1: a sobering picture. And if you're a Republican in Congress,
• 7:34
  Speaker 1: you're a Republican on the ballot, you should be furious
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  Speaker 1: at the president. I mean, he has put you in
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  Speaker 1: the worst. I mean, he is absolutely. I mean Donald
• 7:43
  Speaker 1: Trump has put the Republican Party because he's broken the
• 7:45
  Speaker 1: two biggest promises and then the one promise he kepp
• 7:49
  Speaker 1: is also damaged the economy his deportation agenda, so no
• 7:55
  Speaker 1: more wars. He opened a war, screwing up the economy.
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  Speaker 1: He's going to bring down costs. All that has happened
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  Speaker 1: since he's been president is costs have only gone up,
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  Speaker 1: only in one direction, and it's only going to get worse.
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  Speaker 1: And you guys have to defend this. He's not going
• 8:13
  Speaker 1: to ever have to defend his policies again. You're going
• 8:15
  Speaker 1: to have to defend it. You guys got to Republicans
• 8:22
  Speaker 1: if they want to survive this election cycle there and
• 8:26
  Speaker 1: maybe these Indiana primaries scare the Jesus out of Republicans
• 8:29
  Speaker 1: from breaking with Trump, but it would be the I
• 8:34
  Speaker 1: think the only Republicans that survive in any swing areas
• 8:39
  Speaker 1: are going to be the ones that figure out how
• 8:41
  Speaker 1: to distance themselves from these Trump policies because there's really
• 8:45
  Speaker 1: not a single policy outside of encouraging AI investment that
• 8:50
  Speaker 1: has been a net positive of the economy, and it's
• 8:52
  Speaker 1: really only helped the top twenty percent and those with
• 8:56
  Speaker 1: money in the stock market. Right, that has really been
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  Speaker 1: like the one policy that has been helpful is his
• 9:04
  Speaker 1: sort of you know, acceleration of AI investment, and even
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  Speaker 1: that is not having the desired effect on eighty percent
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  Speaker 1: of the of the country, just at best the top
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  Speaker 1: twenty percent, those with money in the stock market. The
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  Speaker 1: President is in China now and this is a trip
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  Speaker 1: that you know it it should be a reminder and
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  Speaker 1: I don't know. And the thing is is, you know,
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  Speaker 1: about two or three years ago, bashing China used to
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  Speaker 1: be one of the one things that was a bipartisan
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  Speaker 1: you know, and getting tough on China was a bipartisan position.
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  Speaker 1: And there's been a and you've sort of seen it
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  Speaker 1: on both sides of the isle. There's sort of now
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  Speaker 1: this new resignation that, look, you can get tough on
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  Speaker 1: China all you want. You can't. You can't get into
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  Speaker 1: a trade war with them. You're not going to win
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  Speaker 1: a trade war with them. They're willing, you know, they've
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  Speaker 1: they've got more ability to withstand a trade war and
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  Speaker 1: they're willing to do it than we do. That's that's
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  Speaker 1: one big lesson. You're starting to see a softening I
• 10:22
  Speaker 1: think in both parties, but particularly with this president, right,
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  Speaker 1: the guy who wanted to get tough on China, Joe Biden,
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  Speaker 1: wanted to get tough on China. And now you're starting
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  Speaker 1: to see because of all and this goes to everything
• 10:34
  Speaker 1: we're talking about the current state of the economy and
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  Speaker 1: his and his essentially misunderstanding of the global economy and
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  Speaker 1: the inability for his tariffs to have the desired effect
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  Speaker 1: on China that he hoped he would. That's not to
• 10:49
  Speaker 1: say that we shouldn't be making every effort in the
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  Speaker 1: world to try to keep China from dumping cheap goods
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  Speaker 1: that sort of put third party manufacturers out of business
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  Speaker 1: and third third party trees or even in are You
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  Speaker 1: know that this will have terrible long term effects and
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  Speaker 1: it could allow China to have such a manufacturing monopoly,
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  Speaker 1: right if they were able to dump cheap goods and
• 11:13
  Speaker 1: essentially push out any competitors around the world that were
• 11:17
  Speaker 1: you know, but hey, it's too bad we didn't have
• 11:23
  Speaker 1: a trade agreement like the Transpecific Partnership that would have
• 11:27
  Speaker 1: had a better opportunity. I mean, you know, it really
• 11:29
  Speaker 1: is amazing, right, The two signature things that Donald Trump
• 11:33
  Speaker 1: was against when he ran for the first term. One
• 11:36
  Speaker 1: was this this idea of a transpecific partnership, which has
• 11:40
  Speaker 1: turned out to be one of the you know it was.
• 11:44
  Speaker 1: It was a brilliant idea. It was coming to fruition,
• 11:47
  Speaker 1: and then the far left and the far right collectively
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  Speaker 1: got it killed. Boy, does everybody wish we had this
• 11:56
  Speaker 1: back now? And the second was killing the Iran nucleard
• 12:02
  Speaker 1: And you know, he's he never wants to admit that
• 12:05
  Speaker 1: what he did was a colossal mistake, but it is
• 12:08
  Speaker 1: now obvious it was a colossal mistake for all the
• 12:11
  Speaker 1: flaws of that are in nuclear do It created some limitations,
• 12:15
  Speaker 1: It created some space to do some business. You know,
• 12:21
  Speaker 1: he went about this war in the worst possible way. Yes,
• 12:24
  Speaker 1: I've read the Robert Kagan piece in The Atlantic, and frankly,
• 12:28
  Speaker 1: if you've been listening to this podcast, everything you read
• 12:31
  Speaker 1: in there wasn't going to be that news to you,
• 12:33
  Speaker 1: new to you if you heard my conversation with Kevin Williamson, right.
• 12:36
  Speaker 1: I mean, what Kagan concluded is what has looked like
• 12:41
  Speaker 1: to a lot of us, which is he's somehow losing
• 12:44
  Speaker 1: this war. He has somehow strengthened to Ron's position with
• 12:48
  Speaker 1: the straight of horror moves. He is somehow called into
• 12:51
  Speaker 1: quite you know, strengthened China with all of this. And
• 12:54
  Speaker 1: again it's one of those things where if you wanted
• 12:57
  Speaker 1: to somehow give me a circumstantial case, Donald Trump was
• 13:00
  Speaker 1: the mentarian candidate who was designed to do nothing but
• 13:03
  Speaker 1: strengthen Russia and China with his presidency, all of these
• 13:07
  Speaker 1: policies that he's done, all of these choices that he's made,
• 13:10
  Speaker 1: has done exactly that China is looking more stable as
• 13:14
  Speaker 1: a trading partner than the United States. And you know,
• 13:18
  Speaker 1: it's a small thing, but if you had noticed this
• 13:21
  Speaker 1: movie out of Australia, that it's a new Australia film
• 13:26
  Speaker 1: that basically the premise of the movie is the United
• 13:29
  Speaker 1: States essentially attacks Australia. The point is that the world
• 13:33
  Speaker 1: is now making the United States the boogeyman, not the Russians,
• 13:37
  Speaker 1: not the Chinese, which has been sort of in culture
• 13:40
  Speaker 1: and art and Western civilization for the last for the
• 13:43
  Speaker 1: last sort of thirty years, right forty years, fifty years,
• 13:48
  Speaker 1: and now Australia, which is very much you know, I
• 13:51
  Speaker 1: would have said, is sort of culturally as close to
• 13:54
  Speaker 1: America as any you know on Canada, UK, Australia. Right,
• 14:00
  Speaker 1: and they've got a blockbuster movie that whether premise is
• 14:04
  Speaker 1: the United States is the boogeyman, the United States is
• 14:06
  Speaker 1: the bad guy, the United States is the aggressor. Point is,
• 14:11
  Speaker 1: our global reputation is in tatters, just in tatters right now.
• 14:15
  Speaker 1: Our economic situation is terrible. I mean the collective picture here,
• 14:21
  Speaker 1: and I think we don't do this enough sometimes, but
• 14:23
  Speaker 1: the collective picture here, it's been a very damaging presidency
• 14:27
  Speaker 1: long term to the United States. You know, is there
• 14:31
  Speaker 1: a few things that he did that people need to
• 14:33
  Speaker 1: not just throw out, you know, throw everything out when
• 14:37
  Speaker 1: they come in. Yes, all right, there is there is
• 14:40
  Speaker 1: you know, there is border security. You could do it
• 14:44
  Speaker 1: a bit more humanely than his team does it, but
• 14:47
  Speaker 1: you know, strengthening border security is certainly an important part
• 14:51
  Speaker 1: in national security, and the AI investments are necessary. There's
• 14:57
  Speaker 1: a you know, a handful of things he's done that
• 14:59
  Speaker 1: you you know, like, okay, these are things that any
• 15:01
  Speaker 1: American president should be doing for the United States. But
• 15:09
  Speaker 1: my word, the next president, regardless of party, has a
• 15:13
  Speaker 1: lot of work to do. I mean, it is that
• 15:16
  Speaker 1: we keep digging a deeper hole. Now this China meeting,
• 15:21
  Speaker 1: is he gonna give a bunch of stuff away? Taiwan
• 15:24
  Speaker 1: is very nervous. One thing I would say, you know,
• 15:28
  Speaker 1: if the Chinese are going to pressure right Trump, The
• 15:31
  Speaker 1: problem with this meeting with China right now and the
• 15:33
  Speaker 1: timing of it, is that we're going into this summit
• 15:36
  Speaker 1: and I say, we as the United States where we
• 15:38
  Speaker 1: need more from China than China needs from us. China
• 15:40
  Speaker 1: needs some stuff from us, Don't get me wrong. They can't,
• 15:43
  Speaker 1: you know, they need to. They prefer to dump their
• 15:45
  Speaker 1: goods in the United States than elsewhere, so they certainly
• 15:49
  Speaker 1: want access to our markets. But we need a lot
• 15:52
  Speaker 1: more from them. Right He's going to begging him to
• 15:55
  Speaker 1: buy soybeans. He's gonna begging him to buy some beef.
• 15:57
  Speaker 1: He's going to be begging, you know, in order to
• 16:00
  Speaker 1: would have tried to get right with his with the
• 16:02
  Speaker 1: egg community a little bit. And he really needs China
• 16:06
  Speaker 1: to lean on Iran to come to the table. And
• 16:09
  Speaker 1: China might be the only country, might have the only
• 16:12
  Speaker 1: ability to put the pressure on Iran, not just not Russia,
• 16:17
  Speaker 1: but China. And that's a precarious position, right here's this
• 16:22
  Speaker 1: president who got elected by saying we weren't tough enough
• 16:24
  Speaker 1: on China, and now he's literally going there to beg
• 16:28
  Speaker 1: and the Chinese are playing him like a fiddle, giving
• 16:31
  Speaker 1: him the big you know. You know, Trump is easily
• 16:35
  Speaker 1: impressed with the big, with the pageantry, and so there's
• 16:40
  Speaker 1: a lot of fear among those that are want to
• 16:42
  Speaker 1: protect Taiwan independence that he is going to say whatever
• 16:47
  Speaker 1: she wants him to say in Taiwan. And he might,
• 16:50
  Speaker 1: and it doesn't mean American policy has changed on Taiwan.
• 16:53
  Speaker 1: That's the only thing I would say the president could
• 16:55
  Speaker 1: give do rhetorical damage to Taiwan. Not gonna, you know,
• 16:59
  Speaker 1: is in the world community if he if he sort
• 17:02
  Speaker 1: of gives gives in at all, you know, sort of
• 17:06
  Speaker 1: becomes ambiguous in the in the wrong direction there. But
• 17:10
  Speaker 1: I think we all have to remember Trump's will. He'll
• 17:12
  Speaker 1: say anything at any moment and not mean it and
• 17:14
  Speaker 1: then change his mind after he leaves. So what I
• 17:17
  Speaker 1: would say is is that while I know a lot
• 17:20
  Speaker 1: of people who care about Taiwan independence are worried about this,
• 17:26
  Speaker 1: even if he's even if he capitulates on on on
• 17:32
  Speaker 1: language in order to get something from she on soybeans
• 17:35
  Speaker 1: or something like that. He'll probably reverse it in himself
• 17:42
  Speaker 1: in some form or another, or go the other way.
• 17:48
  Speaker 1: But all she wants him is to to prove he
• 17:50
  Speaker 1: can bend him to his will. And that's, you know,
• 17:53
  Speaker 1: that's the concern. Let's see how it goes. Maybe he'll
• 17:55
  Speaker 1: be tougher than I think, but this is a real
• 18:00
  Speaker 1: This is an American president who is desperate, desperate for
• 18:07
  Speaker 1: she to do some things on his behalf, and the
• 18:10
  Speaker 1: biggest one getting them out of his own mess that
• 18:12
  Speaker 1: he made with Iran. So we shall see. But look,
• 18:17
  Speaker 1: he made his own bed there there is nothing. And
• 18:22
  Speaker 1: it's likely that in ten years the criticism of Trump
• 18:26
  Speaker 1: isn't going to be that he started this. It'll the
• 18:30
  Speaker 1: criticism may be that he didn't finish it. If you
• 18:34
  Speaker 1: weren't willing to finish it, you should have never started it.
• 18:38
  Speaker 1: Now that you've started it, the worst outcome is to
• 18:41
  Speaker 1: then essentially, I mean the fact that our new goal
• 18:48
  Speaker 1: now is to just get things back to where they
• 18:50
  Speaker 1: were before we started this war. How many more ways
• 18:56
  Speaker 1: should this administration confirm what Kagan said, which is we've
• 18:59
  Speaker 1: lost we're if we're not willing and at this point
• 19:04
  Speaker 1: Trump's words are meaningless. You know, every day it's like
• 19:07
  Speaker 1: oh or else. It is pretty clear the Iranians every
• 19:12
  Speaker 1: time he says or else, they laugh. All right, I
• 19:17
  Speaker 1: want to keep this intro short because I think the
• 19:19
  Speaker 1: markxany interview is that important and I want you guys
• 19:22
  Speaker 1: to spend as much time listening to that as you
• 19:25
  Speaker 1: normally do to me. So with that, we'll sneak in
• 19:27
  Speaker 1: a break when we come back, Mark Sandy. This episode
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  Speaker 1: am a customer. Well for our regular return engagement. I've
• 21:14
  Speaker 1: got the chief economist for Moody's with me today, Mark
• 21:18
  Speaker 1: Sandy and Mark. We are taping. It is Wednesday in
• 21:22
  Speaker 1: the am East Coast time. I always like to timestamp this.
• 21:26
  Speaker 1: The President of the United States about to land in China,
• 21:29
  Speaker 1: about to start a three day visit in China, would
• 21:32
  Speaker 1: be a huge impact on the economy. But look, I
• 21:35
  Speaker 1: invited you on before the big inflation report, and then
• 21:38
  Speaker 1: I'm like, wow, thank god, I invited Mark Sandy on
• 21:40
  Speaker 1: this week after this big inflation report. So let's start there. Yeah,
• 21:46
  Speaker 1: any sugarcoating.
• 21:47
  Speaker 2: This, No, you're you're talking about the Producer Price indexit. Yeah,
• 21:51
  Speaker 2: we went to API yesterday which was pretty ugly. This
• 21:54
  Speaker 2: was this PPI is hosting.
• 21:57
  Speaker 1: Which is which matters more to you?
• 22:00
  Speaker 2: Well, I'm an economists.
• 22:01
  Speaker 1: That all matters to right, all of it's in a
• 22:03
  Speaker 1: data point.
• 22:04
  Speaker 2: But I think you know, most people are focused on
• 22:06
  Speaker 2: the CPI, the consumer Price Index, because that's what reflex
• 22:11
  Speaker 2: prices for goods and services that they're paying for out
• 22:13
  Speaker 2: of pocket, you know, so that that's what they feel.
• 22:16
  Speaker 2: PPI is one step, big step back. That's what businesses
• 22:19
  Speaker 2: are charging each other effectively that ultimately get passed through
• 22:22
  Speaker 2: to consumers in the CPI. But people feel the CPI
• 22:27
  Speaker 2: more than the PPI. But the CPI yesterday that was ugly.
• 22:32
  Speaker 2: The PPI is uglier. I mean it was just really bad.
• 22:36
  Speaker 2: I mean we knew it was going to be up
• 22:37
  Speaker 2: a lot because of you know, the energy prices, the
• 22:40
  Speaker 2: war and everything else, tariffs, but it was out more
• 22:45
  Speaker 2: than double when I what I thought the increase would be.
• 22:47
  Speaker 1: And everything I've read says that this stuff's lagging.
• 22:52
  Speaker 2: Indicator lagging in what sense, meaning that it's.
• 22:56
  Speaker 1: Only getting it's you know that this is if you're
• 22:59
  Speaker 1: looking backwards, things are probably still still headed in the
• 23:03
  Speaker 1: wrong direct.
• 23:03
  Speaker 2: Oh oh yeah, absolutely. The trend lines here look well
• 23:06
  Speaker 2: it's ugly and the trend lines look really ugly. Yeah,
• 23:08
  Speaker 2: go work forward. Yeah, I mean we've got a lot
• 23:12
  Speaker 2: of pass through that's still to happen related to the
• 23:15
  Speaker 2: energy price effects. You know, so far, all we've observed
• 23:18
  Speaker 2: or seen or felt is kind of the direct effects
• 23:21
  Speaker 2: of the higher oil prices. You know that we're paying
• 23:23
  Speaker 2: more at the gas pump, we're paying starting to pay
• 23:26
  Speaker 2: more for airfares. But now it's flowing through and you
• 23:30
  Speaker 2: can start you're starting to feel it in grocery prices
• 23:33
  Speaker 2: right simply because it costs a big part of food
• 23:36
  Speaker 2: costs is transporting the product from the far diesel or yeah, diesel,
• 23:42
  Speaker 2: and then you're seeing it in transportation costs, and so yeah,
• 23:46
  Speaker 2: the pastor here is going to continue. Even if we're
• 23:49
  Speaker 2: ended today and oil prices started to come in, We're
• 23:51
  Speaker 2: going to be feeling this for quite some time, at
• 23:53
  Speaker 2: least of the summer months into the rest of the year.
• 23:56
  Speaker 1: At one point, on Tuesday before the President left, he
• 23:59
  Speaker 1: claimed before the war started, that the inflation rate had
• 24:01
  Speaker 1: gone down below two I heard that, Yeah, had it?
• 24:06
  Speaker 1: I mean, did I miss something? I don't think. I mean,
• 24:09
  Speaker 1: we had been pushing it down, and then tariffs sort
• 24:12
  Speaker 1: of instead of me saying it, you tell me since
• 24:16
  Speaker 1: he took office, what's the inflation rate been doing accelerating?
• 24:22
  Speaker 2: I mean, when we came into his presidency a little
• 24:26
  Speaker 2: over a year ago, inflation was still on the high side.
• 24:30
  Speaker 2: It was above the Federal reserves two percent target, but
• 24:34
  Speaker 2: it was in the right It was in the low two's,
• 24:37
  Speaker 2: and it was clearly headed to the Fed target of
• 24:39
  Speaker 2: two percent. We were on track to be there by
• 24:42
  Speaker 2: spring summer of twenty twenty five. First Liberation Day was
• 24:47
  Speaker 2: That's the the when the President announced the big terrrifis
• 24:51
  Speaker 2: recip reciprocal tariffs. Since then, inflation has more or less accelerated. Uh.
• 24:57
  Speaker 2: And then you throw into the mix the war in Iran,
• 25:00
  Speaker 2: which began, you know a little over a couple of
• 25:02
  Speaker 2: months ago and almost three months ago. Now that's just
• 25:04
  Speaker 2: adding more juice to inflation. And now instead of being
• 25:09
  Speaker 2: at two percent, we're well over three and you know,
• 25:13
  Speaker 2: probably closer to four. You know, by some measures of inflation.
• 25:15
  Speaker 1: What was the peak in the COVID supply chain choke?
• 25:21
  Speaker 1: After that, I started much higher peak.
• 25:23
  Speaker 2: You know, Yeah, it was eight if I'm speaking for memory,
• 25:26
  Speaker 2: so I don't have a quote, Yeah, we're probably double
• 25:29
  Speaker 2: what it is now. We're three and a half to
• 25:31
  Speaker 2: four percent now in the CPI, it was like eight
• 25:33
  Speaker 2: percent at the worst of it in the summer of
• 25:35
  Speaker 2: twenty twenty two. Of course that was more than COVID.
• 25:39
  Speaker 2: That was the thing that really juiced up inflation during
• 25:41
  Speaker 2: that period was the Russian War. Remember that's when oil
• 25:45
  Speaker 2: prices got oil spiked, they were even prices were even
• 25:47
  Speaker 2: higher then than they are now, you know, for a
• 25:49
  Speaker 2: brief period, and we got you know, we're paying five
• 25:52
  Speaker 2: bucks or a gallon of regular unleted back in June
• 25:54
  Speaker 2: of twenty twenty two. We're now paying four bucks fifty.
• 25:56
  Speaker 2: So we're not quite there yet.
• 25:58
  Speaker 1: Has it been since the teens that we've had inflation
• 26:03
  Speaker 1: the inflation rate at two or less.
• 26:07
  Speaker 2: Well, we were in the middle of the pandemic, you know,
• 26:09
  Speaker 2: when the pandemic hit, of course people were cutting prices. Sure,
• 26:12
  Speaker 2: so acting from that, Yeah, you have to go back
• 26:14
  Speaker 2: before the pandemic. I mean, you know, between the global
• 26:18
  Speaker 2: financial crisis, which was you know, two thousand and eight,
• 26:21
  Speaker 2: two thousand and nine, up until the pandemic a decade
• 26:23
  Speaker 2: later or longer, a decade later, inflation was consistently below
• 26:28
  Speaker 2: two percent defence target. And in fact, the FED all
• 26:31
  Speaker 2: the hand ringing was about inflation's too low. You know,
• 26:34
  Speaker 2: why can't you get inflation up back up to target.
• 26:37
  Speaker 2: This was a period of so called secular stagnation when
• 26:39
  Speaker 2: the economy was kind of struggling in the banking.
• 26:43
  Speaker 1: We weren't growing, we were not shrinking. It was right, staggering, Yeah,
• 26:47
  Speaker 1: it was.
• 26:47
  Speaker 2: It was. It just felt uncomfortable, right, uncomfortable. We were growing,
• 26:52
  Speaker 2: but it was an uncomfortable growth. That was the budget battles.
• 26:56
  Speaker 2: Remember Obama was fighting with the Republican Congress about, hey,
• 27:01
  Speaker 2: we need a little bit more fiscal stimulus here pretty
• 27:03
  Speaker 2: quaint when you think about the amount of dollars we
• 27:05
  Speaker 2: were talking about back then, But that never happened. You know,
• 27:08
  Speaker 2: we had government shut downs, we had bringmanship over debt limits,
• 27:11
  Speaker 2: and that just weighed on the economy and we could
• 27:14
  Speaker 2: never really kick into gear. And so inflation in that
• 27:17
  Speaker 2: period was below two percent consistently.
• 27:21
  Speaker 1: I know that you when you're when you're getting your
• 27:24
  Speaker 1: credentials to be an economist, especially of a certain generation,
• 27:28
  Speaker 1: you're you study the sixties and seventies very carefully, and
• 27:35
  Speaker 1: it took years to get out of this inflationary spiral
• 27:40
  Speaker 1: that we were in in the seventies. And suddenly now
• 27:42
  Speaker 1: it feels like we're in year five of this. Now.
• 27:46
  Speaker 1: I know some of this is artificial, right, because it's
• 27:49
  Speaker 1: literally the Trump's policies have have have have done this.
• 27:55
  Speaker 1: This is sort of man made, not sort of done
• 27:58
  Speaker 1: from the outside, right, But is there any lessons to
• 28:03
  Speaker 1: take away from the seventies that you're looking to to
• 28:08
  Speaker 1: sort of understand the trajectory of this and when we
• 28:11
  Speaker 1: get to a stable pricing environment.
• 28:15
  Speaker 2: Well, this period feels really bad, but the seventies feels
• 28:21
  Speaker 2: was much much worse, Right, I mean that was a
• 28:23
  Speaker 2: period of inflation that was almost double digits at points,
• 28:28
  Speaker 2: and we had unemployment double digits. And the difference between
• 28:32
  Speaker 2: now and then, at least so far, is then the
• 28:37
  Speaker 2: third Reserve, whose responsibilities to keep inflation low really wasn't
• 28:44
  Speaker 2: focused on the right things. You know, inflation expectations. You know,
• 28:47
  Speaker 2: people think inflation is going to be is really important,
• 28:49
  Speaker 2: and that had taken off during that period, and you
• 28:52
  Speaker 2: got into this kind of self reinforcing wage price so
• 28:55
  Speaker 2: called wage price borrow, where prices rose. Workers said hey,
• 28:59
  Speaker 2: you got to pay me more, mister employer. Mister employer said, final,
• 29:03
  Speaker 2: I'll do it, because they knew they could pass along
• 29:04
  Speaker 2: the higher price increases, and he got into this kind
• 29:06
  Speaker 2: of self reinforcement cycle. And that goes back to a
• 29:10
  Speaker 2: lot of different things, some misunderstanding about the dynamics of
• 29:14
  Speaker 2: inflation expectations, how to measure them, what are they? But
• 29:17
  Speaker 2: also it goes to Fed independence. You remember the Nixon
• 29:20
  Speaker 2: tapes show that because Innection had captured the FED when
• 29:24
  Speaker 2: Arthur Burns's foot buddy was the chair of the FED
• 29:26
  Speaker 2: and they based monetary policy on politics. You know, I
• 29:30
  Speaker 2: got to win the election as opposed to what's the
• 29:32
  Speaker 2: right policy. So inflation expectations took off, and that's how
• 29:36
  Speaker 2: inflation became more entrenched and metastasized more broadly, and the
• 29:41
  Speaker 2: only way out of that was a very severe recession.
• 29:43
  Speaker 2: That's when Paul Volker came in in the late seventies
• 29:46
  Speaker 2: early eighties and he said, you know, we got to
• 29:49
  Speaker 2: squash this, and I'm going to tolerate as much economic
• 29:52
  Speaker 2: pain as high as and employment as go. We'll take it.
• 29:54
  Speaker 2: We have to get rid of this inflation. And we benefited.
• 29:57
  Speaker 2: You know, I was painful double DISSI unemployment, but we
• 30:00
  Speaker 2: got through it, and we've benefited through through for that
• 30:04
  Speaker 2: up till this point in time. Now here we are.
• 30:07
  Speaker 2: And the lesson is, don't do what we did back
• 30:09
  Speaker 2: in the nineteen seventies. That's the lesson. Focus on inflation
• 30:13
  Speaker 2: expectations and don't let the FED be politicized and maintain
• 30:17
  Speaker 2: FED independence.
• 30:18
  Speaker 1: Well, we're about to have a new FED chair. In fact,
• 30:21
  Speaker 1: by the time some people listen to this, we may
• 30:23
  Speaker 1: already have a new FED chair. It's the vote may
• 30:26
  Speaker 1: be Wednesday to.
• 30:27
  Speaker 2: Be through, that's right, Yeah, in May fifteenth.
• 30:29
  Speaker 1: Yeah, So Kevin Worsh's is going to be and he was.
• 30:34
  Speaker 1: He was nominated to do one thing as far as
• 30:36
  Speaker 1: President Trump was concerned, And he couldn't be in a
• 30:39
  Speaker 1: worse situation if you just look at his at his
• 30:44
  Speaker 1: what his chief employer, as far as he's concerned. Right,
• 30:47
  Speaker 1: the only reason he got this job was because the
• 30:51
  Speaker 1: President was frustrated that Japow wouldn't lower interest rates. How
• 30:55
  Speaker 1: catastrophic would lowering interest rates be if he does it
• 30:58
  Speaker 1: in the next you know, if somehow this spad now,
• 31:01
  Speaker 1: don't it certainly looks to me this is a very
• 31:03
  Speaker 1: invited fed and it's not probably not going to happen. Yeah,
• 31:05
  Speaker 1: let's say he strong armed it through. Yeah, what are
• 31:09
  Speaker 1: the risks of that? What are the risks to the
• 31:11
  Speaker 1: economy and inflation on that?
• 31:12
  Speaker 2: Well, then you're risking what happened in the seventies, right,
• 31:15
  Speaker 2: because I mean, here we are, inflation is raging. Inflation expectations.
• 31:20
  Speaker 2: We've got a pretty good grip on how to measure
• 31:22
  Speaker 2: that now. And that's saying, you know, yellow flares are
• 31:27
  Speaker 2: going off, it's not red. But the inflation expectations are
• 31:30
  Speaker 2: on the high side of where we've been comfortable in
• 31:33
  Speaker 2: the past. So if that starts of migrating any higher,
• 31:37
  Speaker 2: then we got a problem. So policy would say, you
• 31:41
  Speaker 2: know what's best for the economy clearly would say sit
• 31:47
  Speaker 2: on your hands, do nothing, start thinking about what would
• 31:50
  Speaker 2: happen if inflation expectations come untethered, then you have to
• 31:52
  Speaker 2: start raising instratees, but certainly not cut interest rates. That
• 31:55
  Speaker 2: would be you know, I don't catastrophic is too strong
• 31:58
  Speaker 2: a word, because you can maybe you'd assume these guys
• 32:01
  Speaker 2: would figure that out and pull back. But if they
• 32:03
  Speaker 2: pursued that policy of just low rates at any cost, yeah,
• 32:06
  Speaker 2: that would be ultimately catastrophical. We get in back and
• 32:09
  Speaker 2: we learned nothing from the nineteen seventies and we're back,
• 32:11
  Speaker 2: you know, back into that kind of environment. So that
• 32:14
  Speaker 2: would be a huge error. But as you point out,
• 32:16
  Speaker 2: I don't, that doesn't that's not going to happen, right,
• 32:19
  Speaker 2: because monetary policies set by committee. Each person on the
• 32:22
  Speaker 2: committee has a vote, The chair has a vote. He's
• 32:26
  Speaker 2: more he or she is going to be more influential
• 32:28
  Speaker 2: because they go out and explain to the world, you know,
• 32:31
  Speaker 2: the thinking behind you know, the rate decision. So they
• 32:33
  Speaker 2: have influence, of course, but They're just one vote, and
• 32:38
  Speaker 2: nobody has enough votes to cut interest rates at this point.
• 32:40
  Speaker 2: That's it's not going to happen in the current environment.
• 32:43
  Speaker 1: One thing about a political calendar and an economic calendar
• 32:46
  Speaker 1: is they don't always uh, they don't always align as
• 32:50
  Speaker 1: far as certain political parties are concerned. If you are
• 32:53
  Speaker 1: a Republican incomebent, is there any time for this economy
• 32:59
  Speaker 1: to recover by November at this point? Or is this
• 33:03
  Speaker 1: are you looking at like at best the best you
• 33:05
  Speaker 1: can hope for if you're an incumbent Republican is the
• 33:09
  Speaker 1: economy we're experiencing right now?
• 33:12
  Speaker 2: Yeah, it's going to be tough to turn this around
• 33:14
  Speaker 2: by early November. And I guess you know better than I,
• 33:17
  Speaker 2: But I think the electric electorate makes up their mind
• 33:19
  Speaker 2: about you know who they're going to vote.
• 33:21
  Speaker 1: It usually right about now, I mean Memorial Day June.
• 33:24
  Speaker 1: You know that's been tradition. Now, I do think I've
• 33:28
  Speaker 1: I'm always careful to presume how it has worked versus
• 33:31
  Speaker 1: because I think people get information faster, and I do think,
• 33:34
  Speaker 1: you know, there's always been this running debate among a
• 33:38
  Speaker 1: few of us. And I even just had this conversation
• 33:42
  Speaker 1: the other day with somebody who worked in the Clinton
• 33:44
  Speaker 1: white House who was giving a bunch of credit to
• 33:46
  Speaker 1: the nineteen ninety Bush tax Bush tax Height deal with
• 33:50
  Speaker 1: George Mitchell, which allowed Clinton to do his deficit reduction
• 33:54
  Speaker 1: thing and really did sort of it was And this
• 33:58
  Speaker 1: person admitted, you know, it's possible if people at the
• 34:02
  Speaker 1: public followed the economy then as closely as the general
• 34:07
  Speaker 1: public does follow it now, right, there just is more
• 34:12
  Speaker 1: more people would have known the economy was recovering before
• 34:15
  Speaker 1: election day. I did.
• 34:16
  Speaker 2: Yeah, I remember that that narrative. Yeah, yeah, I remember
• 34:18
  Speaker 2: that Bush got reen because didn't the economy wasn't proving.
• 34:23
  Speaker 2: You could see it, at least in hindsight, but.
• 34:26
  Speaker 1: They weren't recovering, right, like CNBC was not. Sort of
• 34:29
  Speaker 1: it existed, but none of us, I mean just the
• 34:32
  Speaker 1: political media world, right, you know, the economy was always
• 34:37
  Speaker 1: over here, right, the business section, you know, the business
• 34:40
  Speaker 1: section of the political sections usually didn't align to that.
• 34:44
  Speaker 2: Well, also don't have the same spin, right, I mean,
• 34:46
  Speaker 2: now you've got a whole infrastructure on all sides spinning
• 34:51
  Speaker 2: the numbers and getting it out there for people to digest.
• 34:53
  Speaker 1: Right. But so even assuming you can, you know that
• 34:57
  Speaker 1: maybe recovery beginning in September or October would penetrate the electorate.
• 35:02
  Speaker 1: I mean, you tell me, I mean what it doesn't.
• 35:05
  Speaker 1: It doesn't look like it. You know. Let's let's assume
• 35:09
  Speaker 1: something that's not going to happen. The Iran and the
• 35:11
  Speaker 1: United States, you know, reach a reach a framework agreement,
• 35:15
  Speaker 1: the strait is opened up. By May twenty fifth, everything
• 35:20
  Speaker 1: is flowing. We're still three months before energy the energy
• 35:26
  Speaker 1: markets get right sized.
• 35:27
  Speaker 2: Yeah. Yeah, and we're not going back to where we
• 35:30
  Speaker 2: were prior to the word, you know, in the foreseeable future,
• 35:33
  Speaker 2: not this year, probably not next year. So we're not
• 35:36
  Speaker 2: going back to three dollars a gallon. Let's say, you know, we're.
• 35:39
  Speaker 1: We're looking at a twenty twenty seven recovery from this surgeon,
• 35:43
  Speaker 1: and I.
• 35:43
  Speaker 2: Say, at best that's optimistic. Then that's optimistic.
• 35:47
  Speaker 1: Yeah.
• 35:48
  Speaker 2: Here's the other thing, chuck, you know, I think that's
• 35:50
  Speaker 2: not well recognized, but, uh, the economy in the last
• 35:55
  Speaker 2: couple three months has been really juiced up by the
• 35:58
  Speaker 2: tax cuts, the deficit financed tax cuts that were.
• 36:03
  Speaker 1: A little artificial hot air into a boon with holes
• 36:06
  Speaker 1: in it.
• 36:07
  Speaker 2: Yeah, I mean, because the you know, you can that's
• 36:09
  Speaker 2: manifested most obviously with big refund checks. Right, people, the
• 36:12
  Speaker 2: average American taxpayer got a refund checked this year that
• 36:15
  Speaker 2: was three hundred and fifty dollars more than last year. Now,
• 36:18
  Speaker 2: I don't know, that doesn't sound like a lot to
• 36:19
  Speaker 2: a lot of people, but for lower millenco Americans that's
• 36:22
  Speaker 2: a that's a big deal.
• 36:23
  Speaker 1: How about time is that by like one hundred million? Right?
• 36:25
  Speaker 1: I mean that's a lot of people. I probably got that. Ye.
• 36:27
  Speaker 2: Yeah, So that's fading, right because they're on the other
• 36:31
  Speaker 2: side of that, you know, the April fifteenth tax filing deadline,
• 36:34
  Speaker 2: So that benefit is fading well. At the same time,
• 36:37
  Speaker 2: we're still paying four buck fifty for a gallon rigoed
• 36:39
  Speaker 2: and let it and the pass through to other prices
• 36:42
  Speaker 2: that are staples, groceries, apparel, you know, things that we
• 36:46
  Speaker 2: need and have to buy continue to rise. So the
• 36:50
  Speaker 2: you know, and actually kind of just look at something
• 36:53
  Speaker 2: called real disposable income. So I take you all the
• 36:56
  Speaker 2: income out there that people are earning, do it, you know,
• 36:59
  Speaker 2: cut health taxes because you know, you have to pay
• 37:02
  Speaker 2: your taxes and then count for inflation. That's the real part.
• 37:05
  Speaker 2: So real after tax or disposable income today is no
• 37:10
  Speaker 2: higher than it was on April of twenty twenty five.
• 37:13
  Speaker 2: It has gone nowhere. And that's the average for the
• 37:17
  Speaker 2: average American. That means that there's a big chunk of
• 37:19
  Speaker 2: Americans where that's actually falling. It's actually falling.
• 37:22
  Speaker 1: Hey, look what is the stat and I want to
• 37:25
  Speaker 1: get it right? Is it? Twenty percent of Americans account
• 37:29
  Speaker 1: for over fifty percent.
• 37:30
  Speaker 2: Of spending, sixty percent of spending, sixty.
• 37:33
  Speaker 1: Percent of spending of out lace. How hard is it
• 37:38
  Speaker 1: for you to extract out the twenty percent that is
• 37:40
  Speaker 1: accounting for the sixty percent of spending and looking at
• 37:44
  Speaker 1: this other eighty percent of the population and isolating that, Like,
• 37:48
  Speaker 1: if you looked at that other eighty percent of the population,
• 37:51
  Speaker 1: what would this economic environment look like to them?
• 37:55
  Speaker 2: Yeah, I think that eighty percent of a cut in half.
• 37:57
  Speaker 2: The bottom forty percent, it's a real struggle. I mean
• 38:02
  Speaker 2: they're living paycheck, literally, paycheck to paycheck, and if your
• 38:05
  Speaker 2: gas bill is going up, you got to make a
• 38:07
  Speaker 2: tough choice. I mean, you got something's not going to happen.
• 38:10
  Speaker 2: You know, you're not going to buy groceries. You're going
• 38:13
  Speaker 2: to delay, you know, purchases of clothing, household furnishings. You
• 38:16
  Speaker 2: might not make your rent payment, you might not make
• 38:19
  Speaker 2: your credit card payment. You know, delay things. So you
• 38:22
  Speaker 2: got a tough, very very difficult choice to make.
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• 40:21
  Speaker 1: How are you measuring that? Are you looking at? Are
• 40:24
  Speaker 1: we starting to see a spike in car Loan defaults? Right?
• 40:28
  Speaker 1: Is that the first thing you would look at for
• 40:31
  Speaker 1: that group of Americans?
• 40:33
  Speaker 2: Yeah, that's where you see. So for example, if I
• 40:35
  Speaker 2: look at the delinquency rate on FACHA mortgages, and FACHA
• 40:40
  Speaker 2: mortgage is made by the government of very first time
• 40:44
  Speaker 2: home buyers, or little down payment levels.
• 40:47
  Speaker 1: Right, yeah, you have could be within a certain range.
• 40:49
  Speaker 2: They're not the lowest. You know, if you've got to
• 40:51
  Speaker 2: buy a home, you're not in the buying forty percent.
• 40:53
  Speaker 2: You're in the middle forty percent. But if you look
• 40:56
  Speaker 2: at the delinquency rates there, they're on the rise and
• 40:59
  Speaker 2: you know, signally stress. So if you and if you
• 41:01
  Speaker 2: look at the delinquency rate, and I base this on
• 41:04
  Speaker 2: I get all the credit file data in the country
• 41:06
  Speaker 2: every single month from credit bureau effect, so I have
• 41:08
  Speaker 2: a census of exactly. It's not anonymous, so I don't
• 41:11
  Speaker 2: I don't know you chuck what your credit score is,
• 41:13
  Speaker 2: but you're in my data set. Got so I see
• 41:16
  Speaker 2: this data and I see it roll time. And if
• 41:18
  Speaker 2: you look at folks with credit scores that are below
• 41:22
  Speaker 2: six sixties, just the number, but six sixty is kind
• 41:24
  Speaker 2: of the threshold for so called subprime borrower. Okay, their
• 41:28
  Speaker 2: delinquency rates are. Now when I say delinquency, what percent
• 41:33
  Speaker 2: of the people with that with the subprime credit score
• 41:37
  Speaker 2: are delinquent or not paying on their on their debt.
• 41:40
  Speaker 2: It's now over ten percent. And that's the highest it's
• 41:43
  Speaker 2: been since coming out of the Global financial crisis, you know,
• 41:46
  Speaker 2: back in you know, twenty eleven, twenty twelve, something like that,
• 41:49
  Speaker 2: and it's on the rise. So that's, in my mind
• 41:53
  Speaker 2: a clear tell that they're stressed. And all the all
• 41:56
  Speaker 2: this is this is now with the refund checks, right,
• 41:59
  Speaker 2: because because they took those refund checks, people got real and.
• 42:03
  Speaker 1: They probably paid off some Yeah, they probably did bills.
• 42:05
  Speaker 1: They weren't doing luxury at them.
• 42:06
  Speaker 2: Yeah yeah. Yeah. So now here we are and the
• 42:08
  Speaker 2: refund checks are gone and they're still paying higher guests.
• 42:13
  Speaker 2: So I would expect, and this is the point I
• 42:15
  Speaker 2: was going to make to you leading up to the election,
• 42:17
  Speaker 2: that things are actually going to feel softer. They're not
• 42:19
  Speaker 2: getting better, They're going to feel softer in the economy there.
• 42:22
  Speaker 1: You know, it's because you've lost whatever stimulus that was there.
• 42:25
  Speaker 1: The only others, the only other stimulus that's sitting in
• 42:28
  Speaker 1: the economy is stimulus that benefits people like you and me, right,
• 42:31
  Speaker 1: which is the amount of AI. I mean, do you
• 42:37
  Speaker 1: believe we would already be in a recession if I
• 42:40
  Speaker 1: mean there was that earnings report where Microsoft, Google and
• 42:45
  Speaker 1: I think it was Meta combined reported seven hundred billion
• 42:51
  Speaker 1: dollars and AI is sort of infrastructure spending. And I thought,
• 42:56
  Speaker 1: and you put that number together, right, and you say, well,
• 43:00
  Speaker 1: if Congress were doing I remember all those stimulus when
• 43:04
  Speaker 1: we were trying to juice the economy, well eight it
• 43:07
  Speaker 1: usually would start somewhere between five hundred billion and eight
• 43:10
  Speaker 1: hundred billion, right, So seven hundred billion is a is
• 43:13
  Speaker 1: a pretty good cushion. But it's in, it's in a
• 43:17
  Speaker 1: certain part of the economy. It's it's certainly I think
• 43:24
  Speaker 1: insulated Wall Street from the energy shocks. So far. We'll
• 43:27
  Speaker 1: see if that that continues to hold. And it has
• 43:32
  Speaker 1: served as some stimula. Like so, without that AI spend
• 43:36
  Speaker 1: this capital expenditures that a lot of big cap companies
• 43:39
  Speaker 1: are spending, is it likely we'd already be in a
• 43:45
  Speaker 1: a as far as economists are probably be in a recession.
• 43:48
  Speaker 2: It would have been very close. I mean, just to
• 43:50
  Speaker 2: give you a number, the economy grew and this is GDP,
• 43:55
  Speaker 2: the value of all the things we produced. Real GDP
• 43:58
  Speaker 2: grew two percent last year in twenty twenty five. AI,
• 44:02
  Speaker 2: by my calculation, in all the different ways that AI
• 44:05
  Speaker 2: has helped lift the economy, has added about a half
• 44:07
  Speaker 2: a point to growth last year. So we would have
• 44:09
  Speaker 2: grown one and a half. When you're growing one and
• 44:11
  Speaker 2: a half, that you're not creating enough. We were creating
• 44:16
  Speaker 2: any jobs anyway, too, we would be losing jobs. Layouts
• 44:18
  Speaker 2: were probably kicked in. And if that had happened, yes,
• 44:21
  Speaker 2: the answer is, there would have been a very high
• 44:23
  Speaker 2: probability that the economy would have suffered a recession in
• 44:27
  Speaker 2: twenty twenty five. So we effectively got bailed out by AI.
• 44:31
  Speaker 2: Now we knew AI was coming, you know, that was
• 44:34
  Speaker 2: well understood coming into twenty twenty five, but the degree
• 44:39
  Speaker 2: to which it added to growth was very surprising, at
• 44:42
  Speaker 2: at least to me and I think to most economics.
• 44:43
  Speaker 2: We did not expect the investment that seven hundred billion.
• 44:46
  Speaker 2: You were mentioning that that was a surprise. You know
• 44:49
  Speaker 2: that it went from nothing to seven hundred billion. By
• 44:52
  Speaker 2: the way, seven hundred billion. I don't know if this
• 44:54
  Speaker 2: is just some historical quinkie dink, but that's the amount
• 44:57
  Speaker 2: of TARP that was cost of tarp back to get out.
• 45:00
  Speaker 1: I know. It's probably why the number is so sticky
• 45:03
  Speaker 1: to me, like just three companies, and I'm sure if
• 45:06
  Speaker 1: you threw in a few other companies, you probably have
• 45:08
  Speaker 1: over a billion in cap X.
• 45:10
  Speaker 2: Oh, it's funny. Nancy Pelosi tells this really great story
• 45:14
  Speaker 2: about settling on that seven hundred billion dollar number, and
• 45:18
  Speaker 2: you know, they were just sitting around the table, all
• 45:20
  Speaker 2: the players were sitting around that. You may have heard
• 45:22
  Speaker 2: the story too, because I think she enjoys the story.
• 45:25
  Speaker 2: And the seven hundred billion is They were asking Bernankey
• 45:31
  Speaker 2: how much money this was going to cost to bail
• 45:33
  Speaker 2: out and you know the banks and the economy, and
• 45:36
  Speaker 2: you go, was it three hundred billion? And Bernanki says,
• 45:39
  Speaker 2: no more, is it four hundred billion? No, it's more.
• 45:42
  Speaker 2: He got the seven hundred billion. That's the right number.
• 45:44
  Speaker 2: And but no one knows how he got the seven
• 45:46
  Speaker 2: hundred billion, but it was seven hundred billion. And now
• 45:49
  Speaker 2: that's what these five tech companies are investing. That gives
• 45:52
  Speaker 2: you sense of magnitude.
• 45:53
  Speaker 1: Yeah, these last two job reports were better than expected.
• 45:57
  Speaker 1: What'd you learn from them?
• 46:00
  Speaker 2: I think this goes back to the stimulus. The stimulus
• 46:03
  Speaker 2: has really helped stabilize the labor market. So the lay market.
• 46:07
  Speaker 1: When do you say the stimulus, the AI stimulus?
• 46:09
  Speaker 2: No, no, no, well that too, but I was thinking
• 46:11
  Speaker 2: more of the fiscal stimulus because the tax thats were
• 46:15
  Speaker 2: not only for individuals, they're also for businesses, right, and
• 46:19
  Speaker 2: that goes to investment because it was the biggest tax
• 46:22
  Speaker 2: break for business was expensing of investment, which is a
• 46:26
  Speaker 2: big tax break, and so that really has you know,
• 46:30
  Speaker 2: supported growth here in the spring, and I think that's
• 46:34
  Speaker 2: reflected in more stable job numbers. I think the job
• 46:38
  Speaker 2: market's still very weak. I think, you know, stricting from
• 46:40
  Speaker 2: the ups and downs in all rounds, and the data
• 46:42
  Speaker 2: underlying job growth monthly job growth is probably twenty five
• 46:45
  Speaker 2: to fifty thousand, So that's that's really very very weak
• 46:48
  Speaker 2: and still not enough to absorb the people coming into
• 46:52
  Speaker 2: the workforce. So you know, unemployment is still drifting higher
• 46:55
  Speaker 2: and participation rate for drifting lower. But I think it's
• 46:58
  Speaker 2: it kind of stabilized the last couple of months, and
• 47:00
  Speaker 2: I think it goes right back to that stimulus, which
• 47:03
  Speaker 2: highlights the point that if that's once that stimulus goes away,
• 47:06
  Speaker 2: which it will, then you know, we're left with a
• 47:08
  Speaker 2: weaker economy in a weaker job market.
• 47:12
  Speaker 1: Do you have enough data to measure how much the
• 47:15
  Speaker 1: deportation the deportation agenda has shrunk our GDP?
• 47:26
  Speaker 2: Yes, in a sense that you know, if you have
• 47:29
  Speaker 2: typical immigrant and that immigration not the three four million
• 47:34
  Speaker 2: we're coming across the southern border that was atypical.
• 47:37
  Speaker 1: But we're not like below our normal levels.
• 47:40
  Speaker 2: Well, we're actually you know, you see the data that
• 47:42
  Speaker 2: we have suggest that we're actually not losing. We're not
• 47:45
  Speaker 2: losing at this point. So, but typical is a million
• 47:48
  Speaker 2: per annum, so you get about a million immigrants every
• 47:51
  Speaker 2: year before. You know, President Trump could go back in
• 47:55
  Speaker 2: previous decades to get about a million per aum. Let's
• 47:57
  Speaker 2: say that's our baseline, that's what you would expect. We're
• 47:59
  Speaker 2: now zero below zero. That shaves about half a point
• 48:04
  Speaker 2: six tens of a percent of point off of the
• 48:06
  Speaker 2: economy's potential. So you know, if we had normal immigration,
• 48:10
  Speaker 2: we could be growing half a point to six seven
• 48:14
  Speaker 2: tens of percent more than we are now without generating
• 48:17
  Speaker 2: inflationary of inflationary pressures.
• 48:21
  Speaker 1: And do we have enough evidence to you know, there's
• 48:23
  Speaker 1: been this debate we're immigrants taking jobs that Americans would
• 48:27
  Speaker 1: do or not? No, And now it's pretty isn't it now?
• 48:31
  Speaker 1: I Mean I saw that Kevin Hassett was trying to
• 48:34
  Speaker 1: spin why there was fewer jobs, and he says well,
• 48:38
  Speaker 1: you know, basically the spin always was, well, you know,
• 48:42
  Speaker 1: they there'll be jobs that Americans will take, and it
• 48:45
  Speaker 1: turns out that's not the case.
• 48:47
  Speaker 2: No, you don't see it. I mean you can.
• 48:49
  Speaker 1: You can.
• 48:49
  Speaker 2: There's the data. You can see the employment in the
• 48:53
  Speaker 2: labor force of the foreign born worker and the native born.
• 48:56
  Speaker 2: You see the collapse in the born born, you know,
• 49:01
  Speaker 2: as the deportations have increased, but you have not seen
• 49:04
  Speaker 2: a pick up in the the native born. So it
• 49:08
  Speaker 2: hasn't They have not come in and stepped in and
• 49:09
  Speaker 2: filled the void. And that means that's why labor force
• 49:12
  Speaker 2: growth has come to a virtual standstill, and that's why
• 49:15
  Speaker 2: we're losing that half point six ten seven ten percent
• 49:18
  Speaker 2: every param because that that that has not attracted workers
• 49:21
  Speaker 2: into the workforce.
• 49:22
  Speaker 1: Will that show up in our Social Security Trust fund?
• 49:26
  Speaker 2: For sure? Because those folks, you know, they pay taxes, right,
• 49:29
  Speaker 2: I mean that, and they're young, typically immigrants are young,
• 49:33
  Speaker 2: so uh, and they don't get the same kind of
• 49:35
  Speaker 2: social services, and so they are a net benefit to our.
• 49:39
  Speaker 1: Contributor, more to our social safety net really than they
• 49:42
  Speaker 1: do for themselves.
• 49:43
  Speaker 2: Right now, you know, there's one nuance there. It just
• 49:45
  Speaker 2: put more pressure on state and local governments, right, because
• 49:48
  Speaker 2: they don't have the It doesn't the federal government actually
• 49:51
  Speaker 2: benefits the state and local governments. Actually, at least early on,
• 49:54
  Speaker 2: there's more of a cost. But for the for the
• 49:58
  Speaker 2: for the Social Security Trust Fund or or the fiscal situation. Generally,
• 50:02
  Speaker 2: we need immigrants otherwise we have a harder time, you know,
• 50:05
  Speaker 2: writing that ship.
• 50:06
  Speaker 1: Are you are where? What sector are you seeing in
• 50:09
  Speaker 1: the jobs report? That you could tell is that it's
• 50:12
  Speaker 1: an industries are really hurting from this deportation agenda.
• 50:18
  Speaker 2: You could see. It's it's kind of broad based.
• 50:21
  Speaker 1: You know.
• 50:21
  Speaker 2: The industries that rely very heavily on immigrant workers would
• 50:25
  Speaker 2: be agriculture, of course, agricultures getting nailed by on all sides, right, terrifs.
• 50:31
  Speaker 1: Yeah, the fertilizer I mean, my god, like yeah, to
• 50:34
  Speaker 1: be to be a farmer right now. And I know
• 50:37
  Speaker 1: it's all big most you know, farmings obviously even big
• 50:40
  Speaker 1: corporate front doesn't matter. They're just getting head everywhere, right,
• 50:43
  Speaker 1: the costs of transportation, fertilizer tariffs.
• 50:48
  Speaker 2: Yeah, yeah, I mean they're really under a lot of pressure.
• 50:51
  Speaker 2: Construction trades, you know, particularly in the South and the West,
• 50:54
  Speaker 2: because about a third of the workforce and the construction
• 50:57
  Speaker 2: trades are immigrant workers, both legal and undocumented. You can
• 51:02
  Speaker 2: kind of see it in uh, you know, leisure hospitality,
• 51:05
  Speaker 2: you know, hotels. You can see it in a bit
• 51:08
  Speaker 2: in retailing, some services like childcare, elder care, you know,
• 51:13
  Speaker 2: personal services, you know, getting your nails done, that kind
• 51:17
  Speaker 2: of thing. I know you don't get your nails done, Chuck.
• 51:19
  Speaker 1: But you know my daughters and so they're just there's
• 51:23
  Speaker 1: a I take it a lot of vacancies, that's what
• 51:27
  Speaker 1: you're saying.
• 51:28
  Speaker 2: Yeah, I mean I think a lot of those employers
• 51:30
  Speaker 2: would you know, be able to do more business if
• 51:33
  Speaker 2: they had the workers to help them do the business.
• 51:36
  Speaker 2: And it's not like, you know, again the native born
• 51:38
  Speaker 2: broker coming in and filling the wood.
• 51:40
  Speaker 1: That's just not happening here this summer. You know this,
• 51:43
  Speaker 1: this tough economy is going to change vacation plans. So,
• 51:47
  Speaker 1: you know, how do you watch this as an economist
• 51:50
  Speaker 1: to see, you know, where you're just sort of following spending.
• 51:54
  Speaker 1: I assume air travel is going to collapse because of
• 51:57
  Speaker 1: the cost of air travel, but not like road trips
• 52:00
  Speaker 1: are that much cheaper. They'll be cheaper than air travel
• 52:03
  Speaker 1: because it does feel like that search charges even bigger
• 52:06
  Speaker 1: than road trips. But what do you what do you
• 52:09
  Speaker 1: what what do you expect to see this summer that
• 52:12
  Speaker 1: could sort of just have a cascading effect on the
• 52:16
  Speaker 1: negative sentiment and the economy.
• 52:18
  Speaker 2: Yeah, I mean, so far you haven't seen it in
• 52:20
  Speaker 2: air travel. Again, I think it goes back to the stimulus,
• 52:23
  Speaker 2: you know that's helped to support things, and it's still
• 52:25
  Speaker 2: new in people's you know, they booked air travel well
• 52:28
  Speaker 2: in advance.
• 52:30
  Speaker 1: June July.
• 52:31
  Speaker 2: Yeah, you'll probably see it there, you know, then we'll
• 52:34
  Speaker 2: probably you haven't seen it at the theme parks yet,
• 52:37
  Speaker 2: but I would expect to start seeing it there. Just
• 52:40
  Speaker 2: general travel. I mean, people have got to, you know,
• 52:43
  Speaker 2: drive less because the cost of driving is just so
• 52:46
  Speaker 2: much higher, So people are going to take less trips.
• 52:48
  Speaker 2: The tendons at you know, national parks. How many people
• 52:51
  Speaker 2: are coming to the national parks that kind of thing. Uh,
• 52:55
  Speaker 2: you know, it's a little tricky because the high end
• 52:58
  Speaker 2: consumers they're fine right there. They can look through this
• 53:01
  Speaker 2: and they can keep on spending and they're spending more
• 53:03
  Speaker 2: of their dollars on experiences, going to Broadway, going to
• 53:07
  Speaker 2: baseball games, that kind of thing, so it may not
• 53:10
  Speaker 2: show up. There would be you know more you know
• 53:13
  Speaker 2: things like the national parks, that kind of thing where
• 53:16
  Speaker 2: people might might not go. But that's where I would
• 53:20
  Speaker 2: expect to see it. In those kinds of things.
• 53:23
  Speaker 1: Politicians are going to want to respond with some short
• 53:26
  Speaker 1: term fixes, and one idea that has some bipartisan support
• 53:31
  Speaker 1: is capping credit card interest rates at ten percent. That's
• 53:36
  Speaker 1: something I think it was Josh Holly and Bernie Sanders
• 53:39
  Speaker 1: were open to or thinking about. I think Bernie's more
• 53:42
  Speaker 1: of a bigger advocate of it, but Holly was sort
• 53:45
  Speaker 1: of interested in it as well. And obviously credit card
• 53:49
  Speaker 1: balances are going up, and so what are the hidden
• 53:57
  Speaker 1: I'm skeptical that something like that works, but what are
• 54:01
  Speaker 1: the hidden costs to that? Is that a help to people?
• 54:05
  Speaker 1: Is it something you that short term would help people
• 54:10
  Speaker 1: or is this not the not the antidote that people
• 54:15
  Speaker 1: think it is.
• 54:16
  Speaker 2: Yeah, I don't think it's gonna help. I mean, what
• 54:18
  Speaker 2: does it really hurts? Lower midle incum households that are
• 54:22
  Speaker 2: have lower credit scorers, that are greater credit risks, Because
• 54:25
  Speaker 2: if you cap the interest rate that the credit card
• 54:28
  Speaker 2: company can charge, that's lowering the return that they can achieve,
• 54:33
  Speaker 2: and they're therefore going to do less lending to risk.
• 54:36
  Speaker 2: Your bars are more likely to default and not pay
• 54:38
  Speaker 2: them back. So you're going to hurt the very people
• 54:41
  Speaker 2: you want to help. You're just not going to be
• 54:43
  Speaker 2: able to get a credit card, or if you get
• 54:44
  Speaker 2: a credit card, the credit line is going to be
• 54:46
  Speaker 2: a lot smaller, or you know, they're going to charge
• 54:51
  Speaker 2: higher fees, you know, depending on how the legislation is
• 54:54
  Speaker 2: is written. So I don't see this that that is
• 54:58
  Speaker 2: an answer. I just don't think that work. And you're
• 55:00
  Speaker 2: really mucking with a lot of potential unintended consequences when
• 55:04
  Speaker 2: you go down that path. I don't I don't think
• 55:06
  Speaker 2: that's going to help. It might help ironically, you know,
• 55:09
  Speaker 2: higher income households, you know, but because they're still going
• 55:12
  Speaker 2: to get the card, but you know, lower income households,
• 55:14
  Speaker 2: I think they get cut out altogether. So I I
• 55:16
  Speaker 2: really think that's a pretty bad idea.
• 55:20
  Speaker 1: The President was going to lower tariffs on beef and
• 55:22
  Speaker 1: then decided not to, and there's been this back and forth.
• 55:26
  Speaker 1: I mean, what are ways to it temporarily provides some
• 55:29
  Speaker 1: relief to work with people?
• 55:31
  Speaker 2: Oh, come on, just cut the to tariffs.
• 55:32
  Speaker 1: I mean, come on, I mean, that's the number one
• 55:34
  Speaker 1: pretty obvious.
• 55:35
  Speaker 2: I mean, terriffs. Just put them back down.
• 55:39
  Speaker 1: Basically the president perhaps I'm I don't want to put
• 55:42
  Speaker 1: words in your mouths, but the president's stubbornness on his
• 55:45
  Speaker 1: and his chief you know, and his chief belief okay
• 55:48
  Speaker 1: about the economy and how something works, is standing in
• 55:53
  Speaker 1: the way of people having a lower cost of living.
• 55:57
  Speaker 2: Look, it's it's pretty obvious. I mean, just do a
• 55:59
  Speaker 2: chart of employment, go back twenty early started twenty four
• 56:02
  Speaker 2: to give you a little bit of historical context. Coming
• 56:04
  Speaker 2: into twenty five and up to the current period. You
• 56:06
  Speaker 2: see this nice increasing line of employment right till guess
• 56:11
  Speaker 2: what month, April twenty twenty five, it was completely sideways.
• 56:17
  Speaker 2: And you go, okay, there's a lot of stuff going on,
• 56:19
  Speaker 2: you know, so it's not just terrorists. I mean, you
• 56:21
  Speaker 2: have doge cuts, You've got a lot of other stuff
• 56:22
  Speaker 2: going on. But you know, you can connect with us
• 56:25
  Speaker 2: pretty then go take a look at a chart of
• 56:27
  Speaker 2: inflation consumer expenditure deflator. You know, got to look through
• 56:32
  Speaker 2: some of the volatility, and there's easy ways to do that,
• 56:34
  Speaker 2: and you can see inflation was coming in nicely as
• 56:37
  Speaker 2: we were talking. You get April twenty twenty five and
• 56:40
  Speaker 2: it takes off. So, I mean, it's pretty obvious that
• 56:43
  Speaker 2: you know that the broad based tariffs are hurting the economy,
• 56:47
  Speaker 2: both in terms of jobs and income and in terms
• 56:49
  Speaker 2: of inflation.
• 57:00
  Speaker 1: In some ways, the next president has, in theory, the
• 57:03
  Speaker 1: easiest tool in the toolbox to provide some relief.
• 57:07
  Speaker 2: Yeah, but here's the thing, Chuck. You know, once you
• 57:10
  Speaker 2: uh uh uh you you put terrifs in, then you
• 57:14
  Speaker 2: get all these constituencies that benefit from the terriffs. Right,
• 57:18
  Speaker 2: They're relying on the tarriffs and they're going to fight
• 57:20
  Speaker 2: for those terroriffs. So politically, it's going to be very
• 57:24
  Speaker 2: very It's gonna be ground warfare to get.
• 57:27
  Speaker 1: I mean, I know something benefit, but who's who's a
• 57:30
  Speaker 1: big enough constituency group that's benefited that would fight the hardest.
• 57:35
  Speaker 2: I think I may have this wrong, but take take
• 57:38
  Speaker 2: the beef to terriffs.
• 57:39
  Speaker 1: On the beef. People have been all over the map
• 57:41
  Speaker 1: on this.
• 57:42
  Speaker 2: Well. I mean you got people saying I don't want
• 57:44
  Speaker 2: to don't I need protection, lead you know, leave the
• 57:46
  Speaker 2: terriffs and leaves in the terrif in place. Steel and iron.
• 57:50
  Speaker 2: Those were the first terriffs. I mean, that hurts everybody
• 57:52
  Speaker 2: but the steel and iron guys. But they they're going
• 57:55
  Speaker 2: to fight tooth and nail for that. So I'm just
• 57:57
  Speaker 2: saying it's yes, you're right, and I just but once
• 58:01
  Speaker 2: the politics get involved, it's very, very difficult to reverse that. Now.
• 58:05
  Speaker 2: I suspect if you got into a real recession, unemployments rising,
• 58:09
  Speaker 2: and you're a president of the United States, you'd say, oh,
• 58:11
  Speaker 2: and these are still in place because of executive order.
• 58:14
  Speaker 2: I say, okay, maybe I can't go from the current
• 58:17
  Speaker 2: effective tariffrate of eight ten percent back down to two
• 58:20
  Speaker 2: where we were for all this back and cut it
• 58:21
  Speaker 2: in half and really provide a stimulus to the economy.
• 58:24
  Speaker 2: So I think if you're saying, what should we do
• 58:27
  Speaker 2: to help the help things out immediately, that would be it.
• 58:30
  Speaker 2: Now there's there's also a discussion on the gas tax,
• 58:32
  Speaker 2: right suspending that?
• 58:33
  Speaker 1: What would that do? I mean, it feels like every
• 58:35
  Speaker 1: time you know, that always feels like campaign. It's just
• 58:40
  Speaker 1: sort of a campaign talking point. But you know, what
• 58:44
  Speaker 1: is it nineteen cents right now?
• 58:47
  Speaker 2: It's eighteen point four sense? Yeah, I mean, and if
• 58:51
  Speaker 2: you cut it, you know, of course, not all that
• 58:53
  Speaker 2: will get passed through to consumers, right because everyone, all
• 58:55
  Speaker 2: the retailers and distributes are going to take a cut
• 58:58
  Speaker 2: of that, and so maybe you get ten to fifteen
• 59:01
  Speaker 2: cents lower gas prices ultimately, but just for context, we're
• 59:05
  Speaker 2: up a buck fifty from where we were, So you know,
• 59:07
  Speaker 2: we go from we're below three on a gallon regular,
• 59:11
  Speaker 2: we're at four fifty. Maybe that lowers is the four
• 59:13
  Speaker 2: forty four thirty five, So you're right, I mean, does
• 59:16
  Speaker 2: that really you know, move the dial. And then the
• 59:19
  Speaker 2: other thing you're doing is that generates revenue for the
• 59:21
  Speaker 2: Highway Trust Fund, which we you know, I think everyone
• 59:24
  Speaker 2: who drives would really like to have roads that we
• 59:28
  Speaker 2: can travel on, you know, without having to go through potholes.
• 59:31
  Speaker 2: And you know, I don't know how many tires I've
• 59:33
  Speaker 2: destroyed over the years going through a pothole. So and they,
• 59:37
  Speaker 2: with the policymakers, replenish the trust fund, I'm not sure
• 59:40
  Speaker 2: so I do.
• 59:41
  Speaker 1: Ever, whenever we've we've done this a couple of times, I.
• 59:44
  Speaker 2: Don't think we ever have though, Actually I don't think
• 59:46
  Speaker 2: they've ever.
• 59:46
  Speaker 1: Just only talked about it.
• 59:48
  Speaker 2: We've talked about it every single time, but I think they.
• 59:50
  Speaker 1: Just do it like Georgia did it quickly.
• 59:53
  Speaker 2: Indiana did it. Yeah, yeah, but the Feds, the Feds.
• 59:56
  Speaker 2: I don't think. I might have the history wrong, but.
• 59:58
  Speaker 1: I think interesting. One of those things you hear. I
• 1:00:01
  Speaker 1: remember was a during the two thousand and eight primaries
• 1:00:08
  Speaker 1: and we had hit A, we had hit a, and
• 1:00:11
  Speaker 1: John McCain and Hillary Clinton both jumped on the yeah,
• 1:00:13
  Speaker 1: let's do a federal gas tax holiday, and Obama said no,
• 1:00:17
  Speaker 1: and everybody thought Obama was making a mistake, and it
• 1:00:20
  Speaker 1: was sort of this first this sort of first time. Anyway,
• 1:00:25
  Speaker 1: it was a reminder that maybe the public does grasp nuance.
• 1:00:31
  Speaker 2: Yeah, it was just an.
• 1:00:32
  Speaker 1: Interesting moment because it did seem like the nineties era
• 1:00:38
  Speaker 1: Obama would have made a mistake, but sort of in
• 1:00:40
  Speaker 1: the way people consumed information, even at starting in eight more.
• 1:00:45
  Speaker 2: Well, you know, here's the other trigure I think about
• 1:00:46
  Speaker 2: cutting it from a political perspective, I think is it's
• 1:00:49
  Speaker 2: hard to connect the dods, right, because there's so many
• 1:00:51
  Speaker 2: factors that are influencing gas prices. So if you cut
• 1:00:53
  Speaker 2: the gas tax, you know, all else equal, Yeah, it
• 1:00:56
  Speaker 2: will go down, but not all those equals. I mean,
• 1:00:59
  Speaker 2: you could the conflict and realist could rub up and
• 1:01:02
  Speaker 2: you'd lose fifteen cents in a day. And then the
• 1:01:05
  Speaker 2: politicians have just cut this in. They won't get any
• 1:01:08
  Speaker 2: political capital as a result because they can't connect the
• 1:01:13
  Speaker 2: dots back to lower prices. So I know it's pretty
• 1:01:15
  Speaker 2: vexed policy.
• 1:01:16
  Speaker 1: I think. I'm I always like to look at the
• 1:01:21
  Speaker 1: political map in first sort of with regional economies, in
• 1:01:27
  Speaker 1: geographic ways, what part of the country is hurting the
• 1:01:33
  Speaker 1: most right now? And I'm just because I'm and I'm
• 1:01:38
  Speaker 1: not asking you to politically handicap, but when you see
• 1:01:41
  Speaker 1: it's like, what part of the I have a feeling
• 1:01:44
  Speaker 1: there are some red states that are suffering and more
• 1:01:48
  Speaker 1: so than some blue states. And it's one of those
• 1:01:51
  Speaker 1: things where if we're missing something as political handicappers, it's
• 1:01:56
  Speaker 1: going to be some headwinds in some of these red
• 1:01:58
  Speaker 1: states where we just don't believe there's political competition anyway.
• 1:02:02
  Speaker 2: You know, you make you make a great point.
• 1:02:04
  Speaker 1: Yeah, where do you see Yeah, where do you see
• 1:02:07
  Speaker 1: the economy? You know, which which region or states are
• 1:02:10
  Speaker 1: really hurting right now, regardless of their of their political leanings.
• 1:02:14
  Speaker 2: You know, most of the weakness is really in the South. Uh,
• 1:02:18
  Speaker 2: in parts of the West and uh, you know in
• 1:02:22
  Speaker 2: the South, it goes to we just talked about immigration, right,
• 1:02:25
  Speaker 2: the South and the West.
• 1:02:26
  Speaker 1: I was just going to say both the South and
• 1:02:27
  Speaker 1: the West. That's the first thing I thought of, Well,
• 1:02:29
  Speaker 1: who got who? Who was benefiting the most from immigration
• 1:02:32
  Speaker 1: and now is hurting the most? Okay?
• 1:02:34
  Speaker 2: Right? And the other thing is the housing markets in
• 1:02:37
  Speaker 2: you know, places like Florida and Texas, the Louisiana, the
• 1:02:41
  Speaker 2: Gulf Coast, parts of western US are getting hit hard
• 1:02:45
  Speaker 2: by a higher homeowner insurance costs because of climate change,
• 1:02:49
  Speaker 2: you know, all the all the storms, and that's calls
• 1:02:53
  Speaker 2: house prices to start declining in many of those areas.
• 1:02:56
  Speaker 2: Ye so uh, and they've been more or less declining
• 1:02:59
  Speaker 2: now as the interest rates rose back a couple three
• 1:03:02
  Speaker 2: years ago. So you got a lot of household that
• 1:03:03
  Speaker 2: goes back to the FHA mortgage delinquencies. A lot of
• 1:03:06
  Speaker 2: those homeowners that got homes in twenty two, twenty three,
• 1:03:09
  Speaker 2: twenty four, twenty five don't have any equity or maybe
• 1:03:13
  Speaker 2: even negative equity. The value the home is less than
• 1:03:15
  Speaker 2: their mortgage amount, and that's putting a lot of pressure.
• 1:03:18
  Speaker 2: The other thing is you know, during the pandemic, you
• 1:03:20
  Speaker 2: saw these great outflows of people from the big cities
• 1:03:23
  Speaker 2: in the northeast, Chicago and the west coast into the
• 1:03:27
  Speaker 2: Mountain West, into the South, and that used to costs.
• 1:03:30
  Speaker 2: So cost of living is now a lot higher cost
• 1:03:33
  Speaker 2: of doing You.
• 1:03:33
  Speaker 1: Don't have to tell me, I pay. I helped subsidize
• 1:03:36
  Speaker 1: some rent down in Miami. And let me tell you. Yeah, Miami,
• 1:03:40
  Speaker 1: I mean one of the worst place and it was
• 1:03:41
  Speaker 1: all because so much money came in. You know, so
• 1:03:44
  Speaker 1: many people were coming in and so much cash was
• 1:03:46
  Speaker 1: coming into the market.
• 1:03:47
  Speaker 2: And so now the South and West isn't nearly as attractive,
• 1:03:51
  Speaker 2: you know, as a place to move to. And so
• 1:03:53
  Speaker 2: that that's helping the Northeast and you know, Chicago. Here's
• 1:03:57
  Speaker 2: the other thing you may appreciate this. Are you you
• 1:03:59
  Speaker 2: having links to Philadelphia? No, you do not, Okay, Yeah,
• 1:04:03
  Speaker 2: So if you look at the this is just an
• 1:04:05
  Speaker 2: interesting fact.
• 1:04:06
  Speaker 1: How Jake Tapper he's a Philly Oh yeah, that's right.
• 1:04:08
  Speaker 2: Yeah, that's right guy. Yeah, yeah, he's a Philly guy.
• 1:04:11
  Speaker 2: So if you look at the metropolitan areas across the
• 1:04:14
  Speaker 2: country with over three million in population, that's there's about
• 1:04:18
  Speaker 2: twenty five of them out there. Philly is one of them.
• 1:04:20
  Speaker 2: You know. Then you have Dallas and New York and
• 1:04:22
  Speaker 2: so and so on Philly. Of all those metropolitanes, Philadelphia
• 1:04:27
  Speaker 2: experiencing the strongest job growth of any of the areas,
• 1:04:30
  Speaker 2: you know, ar year through the most recent data. And
• 1:04:33
  Speaker 2: the reason why healthcare. Billy is a healthcare center, and
• 1:04:37
  Speaker 2: that's the only sector of the economy that's adding to growth.
• 1:04:41
  Speaker 2: It's funny. I was on a cross country air trip
• 1:04:45
  Speaker 2: last week. We've had a conference in San Diego, and
• 1:04:48
  Speaker 2: I'm sitting in the in the plane and I'm looking
• 1:04:51
  Speaker 2: at around me and everyone in the plane except me
• 1:04:54
  Speaker 2: look like a physician they had, you know, he's or
• 1:04:58
  Speaker 2: you know, in the farming industry or biotech industry. It
• 1:05:01
  Speaker 2: was really good, you know.
• 1:05:02
  Speaker 1: I mean, so to extrapolate that out, I mean, let's see,
• 1:05:05
  Speaker 1: Nashville's got a big healthcare uh economy, right, are yeah
• 1:05:09
  Speaker 1: they doing Are they doing pretty well?
• 1:05:11
  Speaker 2: Nashville is still okay, yeah, I mean is doing well.
• 1:05:16
  Speaker 2: New York, New York is doing relatively well there. You
• 1:05:18
  Speaker 2: also see a lot of tech, you know, a lot
• 1:05:20
  Speaker 2: of tech, uh, big tech uh in New York, Chicago, Uh,
• 1:05:26
  Speaker 2: you know, the West coast. So the one fortunate thing
• 1:05:30
  Speaker 2: about about the healthcare is that it's in every community
• 1:05:32
  Speaker 2: across the country. So every country, every part of the
• 1:05:34
  Speaker 2: country is benefiting. But those areas that have a higher
• 1:05:37
  Speaker 2: share of their economy in healthcare, they're benefiting more. And
• 1:05:39
  Speaker 2: that's that's Philadelphia. So we're going faster than Dallas, you know,
• 1:05:43
  Speaker 2: so I can point out and it's.
• 1:05:45
  Speaker 1: It's funny, you're right, you know, Philadelphia feels like it's
• 1:05:48
  Speaker 1: not fair to them. But right, we never talk about
• 1:05:51
  Speaker 1: growth in the Northeast anymore. No growth is always oh
• 1:05:53
  Speaker 1: it's the South. It's a sunbelt. So just to hear
• 1:05:56
  Speaker 1: that Billy's growing, you're like, really, you know.
• 1:05:59
  Speaker 2: There another one politically, think about this for a second. Pennsylvania,
• 1:06:03
  Speaker 2: the state of Pennsylvania. It's going a lot faster than
• 1:06:06
  Speaker 2: the state of Florida or the state of Texas.
• 1:06:09
  Speaker 1: Yeah, just think about the death that's an interesting I
• 1:06:11
  Speaker 1: don't know, there's some governors there thinking about the president.
• 1:06:14
  Speaker 2: I mean you're just saying, yeah, yeah, I think that there.
• 1:06:19
  Speaker 1: Maybe I had to put Joshapai a little bit higher
• 1:06:21
  Speaker 1: on my list. Let me let me let me close
• 1:06:26
  Speaker 1: with the news of the America's debt surpassing our collective GDP.
• 1:06:36
  Speaker 1: What does that mean to you? And you know, look,
• 1:06:43
  Speaker 1: I feel like the debt, the fear of the of
• 1:06:45
  Speaker 1: a debt crisis is clearly the chicken little of American politics.
• 1:06:48
  Speaker 1: I mean, I've been in I've you know, my first
• 1:06:51
  Speaker 1: year was nineteen ninety two covering politics. So and that
• 1:06:54
  Speaker 1: was Ross Burow, you know, talking about the debt back
• 1:06:57
  Speaker 1: then when it was probably a you know, a quarter
• 1:06:59
  Speaker 1: of what it is now. And this fear of the debt,
• 1:07:02
  Speaker 1: fear of the debt, fear of the debt, it hasn't happened,
• 1:07:07
  Speaker 1: And I think we're all numb to it, right And
• 1:07:09
  Speaker 1: I think that headline, Eh, what say you? How concerned
• 1:07:15
  Speaker 1: are you the economist about this? Chuck?
• 1:07:19
  Speaker 2: I'm concerned. I mean, I think the reason why Ross
• 1:07:22
  Speaker 2: Pros sounds like a chicken little is because we actually
• 1:07:24
  Speaker 2: listened to him and we made some pretty substance of
• 1:07:27
  Speaker 2: changes in the nineteen nineties that turned things around. I mean,
• 1:07:30
  Speaker 2: in the early nineties, you know, deficits and debt and
• 1:07:33
  Speaker 2: interest payments were a real issue. And then then that
• 1:07:37
  Speaker 2: generated and that's the ear of the bond, mark of
• 1:07:39
  Speaker 2: vigilantes interest rates would rise every time it looked like
• 1:07:42
  Speaker 2: the deficit was rising. And that's when Clinton Rubin, the
• 1:07:47
  Speaker 2: Secretary of Treasury under President of Clinton, and Gangrich came
• 1:07:51
  Speaker 2: together and they actually made some substance of changes and
• 1:07:55
  Speaker 2: led to the last surplus we had as a nation
• 1:07:57
  Speaker 2: was in the year two thousands. A lot of other
• 1:07:59
  Speaker 2: things going on worse that helped out. That was a
• 1:08:01
  Speaker 2: big deal. We had a piece dividend. We weren't increasing
• 1:08:04
  Speaker 2: defense spending, We're reducing defense spending, so forth and so on.
• 1:08:07
  Speaker 2: But you know, I've been you're nineteen ninety two. I
• 1:08:10
  Speaker 2: in nineteen ninety I started a company back in nineteen
• 1:08:12
  Speaker 2: ninety that I sold in Moodies, you know, fifteen years later.
• 1:08:15
  Speaker 2: So I've been a professional commerce for thirty six years.
• 1:08:18
  Speaker 2: And I watched three measures of the fiscal situation. I've
• 1:08:20
  Speaker 2: been doing it for thirty six years. One is the
• 1:08:22
  Speaker 2: one you mentioned, how much debt is there. They're out
• 1:08:24
  Speaker 2: there as a share of GDP. The second is the
• 1:08:27
  Speaker 2: deficit to GDP, and I also look at the primary deficit,
• 1:08:31
  Speaker 2: that's exclusive interest payments on the debt. And then I
• 1:08:34
  Speaker 2: look at interest payments as a share of GDP. You know,
• 1:08:36
  Speaker 2: how much are we shelling out as a nation to
• 1:08:38
  Speaker 2: service our debt that we've already accumulated. And I've in
• 1:08:42
  Speaker 2: that thirty six years, I've never had a time when
• 1:08:43
  Speaker 2: all three of those measures screaming loudly we got a problem,
• 1:08:49
  Speaker 2: a massive problem. I mean, our debt, debt is rising rapidly.
• 1:08:52
  Speaker 2: Take a look at the CBO Congression Budget Office projections
• 1:08:55
  Speaker 2: and they're pretty benign assumptions they're making there. They're exciting
• 1:08:59
  Speaker 2: a lot of terror revenue, which I don't think government
• 1:09:01
  Speaker 2: but does just go with it. You know, that looks
• 1:09:03
  Speaker 2: very discouraged. Our deficit is six percent of GDP, Our
• 1:09:08
  Speaker 2: primary deficit is three percent of GDP. That's we're at
• 1:09:11
  Speaker 2: full employment. We should be at zero, we should be
• 1:09:13
  Speaker 2: in surplus on the primary level. And our interest payments
• 1:09:16
  Speaker 2: are now higher than they've ever been as a share
• 1:09:18
  Speaker 2: of GDP. So everything is screaming we got a problem.
• 1:09:21
  Speaker 2: And now you know, I you know, the way the.
• 1:09:23
  Speaker 1: Bond market isn't isn't reacting the way it did in
• 1:09:28
  Speaker 1: the nineties, isn't.
• 1:09:29
  Speaker 2: Well, you know, yes, but you can see cracks developing,
• 1:09:33
  Speaker 2: you know underneath you know, if you look in the
• 1:09:36
  Speaker 2: plumbing of the bond market. It does feel like their
• 1:09:40
  Speaker 2: bond investags are saying, hey, you know, this doesn't feel
• 1:09:43
  Speaker 2: quite right to me. You're gonna have to start paying. Well,
• 1:09:45
  Speaker 2: I'll give you one example. The uh the interest rate
• 1:09:49
  Speaker 2: on ten year debt issued by the European Investment Bank
• 1:09:53
  Speaker 2: EIB was only three four basis points above the tenure
• 1:09:57
  Speaker 2: treasure you'l that that's saying that that is weird. You know,
• 1:10:01
  Speaker 2: that's saying is the tenure treasury yield the safe haven
• 1:10:04
  Speaker 2: that it has been historically? And the answer is probably not.
• 1:10:07
  Speaker 2: So it's those kinds of things. It's kind of you know,
• 1:10:10
  Speaker 2: a little smoke over here over there that make me nervous.
• 1:10:12
  Speaker 2: And here's the thing about the bond market, like the
• 1:10:13
  Speaker 2: stock market, like any market, it's okay until it's not.
• 1:10:17
  Speaker 2: You know, you know some there and you don't know
• 1:10:19
  Speaker 2: what the trigger is going to be. You don't know
• 1:10:20
  Speaker 2: exactly what it's going to be. But I'd say all
• 1:10:22
  Speaker 2: the fodder for a problem, you know, for a self
• 1:10:25
  Speaker 2: in the bond market or in place. So we have
• 1:10:27
  Speaker 2: to be very careful. We have to be very very
• 1:10:29
  Speaker 2: careful here. But I'll end on a positive note because
• 1:10:33
  Speaker 2: you said if you want to end here.
• 1:10:35
  Speaker 1: Yeah, yeah, Like the.
• 1:10:37
  Speaker 2: Positive note is that, you know, I think we almost
• 1:10:42
  Speaker 2: have to have a crisis in the bond market to
• 1:10:44
  Speaker 2: degenerate the political will necessary to make the changes.
• 1:10:48
  Speaker 1: It's obvious that it's going to take a crisis. It's
• 1:10:50
  Speaker 1: going to take it. We have to be we have
• 1:10:52
  Speaker 1: to be at the brink. It's the only you know.
• 1:10:55
  Speaker 1: I mean, shoot, it's what Churchill said about Americans. You know,
• 1:10:57
  Speaker 1: they eventually do the right thing every other path. I mean,
• 1:11:02
  Speaker 1: but I guess what you're saying is the crisis doesn't
• 1:11:05
  Speaker 1: get triggered until the bond market. It's so basically, and
• 1:11:08
  Speaker 1: what that means, I want to put this in English.
• 1:11:11
  Speaker 1: This means because I was at a conference Chathamhouse Rules,
• 1:11:14
  Speaker 1: so I don't want to name names, but I was
• 1:11:17
  Speaker 1: at a conference this week where there is where there
• 1:11:22
  Speaker 1: is a lot of advice going, hey, diversify, you know,
• 1:11:27
  Speaker 1: diversify out of the dollar right essentially, and then you know,
• 1:11:31
  Speaker 1: hedging with other currencies, whether it's gold, whether it's other
• 1:11:35
  Speaker 1: foreign currencies, you know, even crypto. But that this you're
• 1:11:39
  Speaker 1: seeing more and more investment advice going down that road,
• 1:11:45
  Speaker 1: which seems that that's only going to eventually put pressure
• 1:11:48
  Speaker 1: on our bond market.
• 1:11:49
  Speaker 2: Right, Well, I haven't gotten to the reason why I
• 1:11:52
  Speaker 2: was going to the hind note, because you're right. I
• 1:11:55
  Speaker 2: took you down just to reinforce your point. You know,
• 1:11:59
  Speaker 2: when you deglobalize your economy, and that's what we're doing,
• 1:12:03
  Speaker 2: right We're pulling away from the rest of the world. Tariffs, immigration, visas,
• 1:12:08
  Speaker 2: export restrictions, investment controls, you know, on every dimension. You
• 1:12:12
  Speaker 2: know what we're doing with foreign policy. I mean, we're
• 1:12:14
  Speaker 2: pulling away. It's pretty obvious. And now the rest of
• 1:12:16
  Speaker 2: the world's pulling away from us. So one of the
• 1:12:18
  Speaker 2: consequences obvious consequences of that is our financial system is
• 1:12:22
  Speaker 2: less central to the world. It just matters less because
• 1:12:25
  Speaker 2: the rest of the world's going to start moving around us. Therefore,
• 1:12:28
  Speaker 2: the dollar is worth less, and therefore the risk that
• 1:12:31
  Speaker 2: investors are going to demand a higher interest rate to
• 1:12:33
  Speaker 2: compensate for any kind of risk to buy a US
• 1:12:35
  Speaker 2: Treasury bond is going to rise. But here's the optimism,
• 1:12:38
  Speaker 2: and this goes to the guy the spirit of the
• 1:12:40
  Speaker 2: Winston Churchill. You know, sentiment is that we will have
• 1:12:43
  Speaker 2: a crisis. But I do think we do act when
• 1:12:46
  Speaker 2: crisis occur, you know, that's when we can connect the
• 1:12:49
  Speaker 2: dots and we all we're all thinking about, you know,
• 1:12:51
  Speaker 2: how we should do this.
• 1:12:53
  Speaker 1: I was just gonna I've heard like one idea that
• 1:12:55
  Speaker 1: was that one person talked about it is I think
• 1:12:58
  Speaker 1: pretty influential, and let's leave it at that is basically, look,
• 1:13:02
  Speaker 1: this person said, we probably need three percent of more revenue,
• 1:13:06
  Speaker 1: which means three percent hike in taxes, three percent cut
• 1:13:09
  Speaker 1: and spending like that. That the responsible way to do
• 1:13:12
  Speaker 1: this if you feel the crisis coming, is that exactly,
• 1:13:16
  Speaker 1: that it will be essentially three and three and it's
• 1:13:18
  Speaker 1: a dollar for dollar, and that this could get us
• 1:13:21
  Speaker 1: and that right now three percent you know, spending cut
• 1:13:26
  Speaker 1: and tax hike. You can't do one or the other.
• 1:13:28
  Speaker 1: You have to do both could stabilize us. Now, I
• 1:13:31
  Speaker 1: don't know if you'd have the political will for that.
• 1:13:33
  Speaker 2: Yeah. The only the other thing I say is even
• 1:13:35
  Speaker 2: more hopeful. I'd like to meet whoever said that, because
• 1:13:38
  Speaker 2: I'm totally agree. More hopeful is that if we had
• 1:13:41
  Speaker 2: rational immigration policy, it wouldn't have to be six percent
• 1:13:45
  Speaker 2: we have to close. It would be something more like
• 1:13:46
  Speaker 2: three or four percent.
• 1:13:47
  Speaker 1: Well, I mean, and this is what drives me crazy.
• 1:13:50
  Speaker 1: I mean, I guess the good news is we don't
• 1:13:52
  Speaker 1: have to We don't have to invent ideas. They're all
• 1:13:54
  Speaker 1: sitting on the shelf.
• 1:13:55
  Speaker 2: Yes, that's right, Yeah, exactly right, Like if.
• 1:13:58
  Speaker 1: You lower some tariffs, let's bring in some immigrants, let's
• 1:14:01
  Speaker 1: do this, you know, dollar for dollars, spending cut for
• 1:14:04
  Speaker 1: tax height type of thing, you know, and we could
• 1:14:07
  Speaker 1: sort of bring some bring some sanity to our fiscal situation,
• 1:14:11
  Speaker 1: right exactly.
• 1:14:13
  Speaker 2: I do want to say that one thing with kind
• 1:14:14
  Speaker 2: of refreshing that you didn't bring up AI at all,
• 1:14:17
  Speaker 2: maybe a little bit right with the investment, Yeah, the investment, right, yeah,
• 1:14:22
  Speaker 2: Well we're.
• 1:14:22
  Speaker 1: A little bit. I feel like we're still a little
• 1:14:25
  Speaker 1: bit ways away from getting to the productivity.
• 1:14:27
  Speaker 2: I agree with you, right, I mean.
• 1:14:29
  Speaker 1: I still see I'm let me, let me, let me
• 1:14:34
  Speaker 1: tell me if I'm wrong on this. Be my sort
• 1:14:36
  Speaker 1: of the economic advisor to the political side of things.
• 1:14:40
  Speaker 1: I think the fear of AI job displacement is still
• 1:14:44
  Speaker 1: a bigger cloud than the reality of AI job displacement.
• 1:14:49
  Speaker 1: Is that and that? I mean, look, I expect the
• 1:14:52
  Speaker 1: twenty eight campaign to be that this is a central issue,
• 1:14:56
  Speaker 1: you know, not maybe not be the central issue, but
• 1:14:58
  Speaker 1: a central issue will be this fear, and it's like,
• 1:15:01
  Speaker 1: how do we prepare what are the ideas to help people,
• 1:15:05
  Speaker 1: you know, get through this is going to be you know,
• 1:15:09
  Speaker 1: like I don't think you can run for president and
• 1:15:11
  Speaker 1: not have a not have some plan, yeah or some answer.
• 1:15:15
  Speaker 2: Yeah, I totally agree. I don't you know, you don't
• 1:15:17
  Speaker 2: see the big bump to productivity growth, at least not yet.
• 1:15:20
  Speaker 2: You can see circumstantial evidence of some effect. Maybe the
• 1:15:24
  Speaker 2: hiring rates, these participation rates by older workers is down.
• 1:15:27
  Speaker 2: They partly doday.
• 1:15:29
  Speaker 1: I you know, is this something that's going to feel
• 1:15:31
  Speaker 1: like a hockey stick when it hits though, Like, well
• 1:15:34
  Speaker 1: that's the we're going to see it, and then all
• 1:15:35
  Speaker 1: of a sudden you're going to like, oh my god,
• 1:15:38
  Speaker 1: we're going to have no job growth for a year,
• 1:15:40
  Speaker 1: and productivity is through the roof, right, like.
• 1:15:42
  Speaker 2: Something, you're not creating any jobs as it is, right right,
• 1:15:45
  Speaker 2: So then you're right, exactly right. We need to be
• 1:15:47
  Speaker 2: thinking about if that's the scenario that actually comes to pass,
• 1:15:49
  Speaker 2: what do we do, you know, how do we address that?
• 1:15:51
  Speaker 2: And I think that's that's an important discussion debate.
• 1:15:55
  Speaker 1: Now it's not in your data.
• 1:15:57
  Speaker 2: Right, No, no, not my data.
• 1:15:59
  Speaker 1: Yeah, Mark, Sandy, great to talk with you. As always,
• 1:16:03
  Speaker 1: I learned a ton all right, I appreciate it. Okay,
• 1:16:18
  Speaker 1: if you need to take a break to go get
• 1:16:20
  Speaker 1: a stiff drink, I understand as the only reason I
• 1:16:26
  Speaker 1: didn't start drinking after this Andy interview is because we
• 1:16:29
  Speaker 1: wrapped up the interview at ten o'clock in the morning.
• 1:16:31
  Speaker 1: I think that's a slightly too early to drink on
• 1:16:33
  Speaker 1: a on a weekday morning, But depending on when you're
• 1:16:38
  Speaker 1: listening to that, it is what it is. But that's
• 1:16:42
  Speaker 1: the point. We've got to see reality, all right. I'm
• 1:16:46
  Speaker 1: gonna do a bunch of questions here and then we'll
• 1:16:51
  Speaker 1: call it a weekend. As Chuck, this one comes from
• 1:16:57
  Speaker 1: Everett from Seattle. He goes it's his third time writing,
• 1:17:00
  Speaker 1: might be his first time on the air, and then
• 1:17:02
  Speaker 1: he says, APDG Everett, APDG. Effort, I don't know what
• 1:17:08
  Speaker 1: that means. Somebody else may know what that means. And
• 1:17:10
  Speaker 1: he goes, Hey, I've been following your discussion about expanding
• 1:17:12
  Speaker 1: the house and was curious about your take on rhine
• 1:17:16
  Speaker 1: to compare take up Pair's idea that legislatures tend to
• 1:17:19
  Speaker 1: scale to the cube root of a country's population, which
• 1:17:22
  Speaker 1: would put the US House around seven hundred members. It's
• 1:17:25
  Speaker 1: less than nine hundred you've suggested, but still a significant
• 1:17:28
  Speaker 1: increase from four to thirty five and maybe more achievable
• 1:17:30
  Speaker 1: in the near term. Do you see something like that
• 1:17:31
  Speaker 1: as a realistic step forward? Cheers Effort from Seattle Again
• 1:17:36
  Speaker 1: apdg effort. My apologies for not knowing what those initials are. Yeah, look,
• 1:17:43
  Speaker 1: I you know, my whole thing is is if you
• 1:17:46
  Speaker 1: go to the ratio we were in nineteen thirty, you
• 1:17:49
  Speaker 1: would be at nine hundred. I'm I'm realistic that you're
• 1:17:55
  Speaker 1: not going to you know, if you finally get these
• 1:17:57
  Speaker 1: guys to agree that the House needs to expand, it's
• 1:17:59
  Speaker 1: probably not going to double that. You'd probably look more
• 1:18:03
  Speaker 1: what you know, you know, go into seven hundred would
• 1:18:06
  Speaker 1: put us at essentially two hundred, two hundred and sixty
• 1:18:10
  Speaker 1: five more. Right, So it's uh, you know, what is
• 1:18:14
  Speaker 1: that nearly a not you know, not quite a fifty
• 1:18:18
  Speaker 1: percent increase, but close and that I think I think
• 1:18:21
  Speaker 1: that is You're the point is that's probably slightly more
• 1:18:24
  Speaker 1: achievable in the first round, and you know you get there. Look,
• 1:18:27
  Speaker 1: I ultimately I'd love to see a constitutional amendment sort
• 1:18:32
  Speaker 1: of agree agreeing on a percentage, what percentage of the
• 1:18:35
  Speaker 1: overall population should each congressionally? You know, I you want
• 1:18:40
  Speaker 1: to make a point oh five instead of point oh
• 1:18:42
  Speaker 1: three percent right, point oh three would put us at
• 1:18:44
  Speaker 1: one point one per about four hundred thousand. You know,
• 1:18:49
  Speaker 1: you could raise it to one one per five hundred thousand,
• 1:18:51
  Speaker 1: which would probably get you into that seven hundred range.
• 1:18:54
  Speaker 1: So the point is is that the answer is yes,
• 1:18:56
  Speaker 1: I think any increases in that positive And I really, look,
• 1:19:02
  Speaker 1: I I'm gonna I'll use your question to talk about
• 1:19:07
  Speaker 1: the irrational when I think is you know, there's some
• 1:19:11
  Speaker 1: news where CNN is reporting that are Keem Jeffreys and
• 1:19:14
  Speaker 1: his allies are gonna put a lot of pressure on
• 1:19:17
  Speaker 1: blue states to remap and redistrict going into twenty twenty eight,
• 1:19:22
  Speaker 1: and that if Democrats hesitate that they're going to publicly
• 1:19:24
  Speaker 1: shame them and say they're not real Democrats. And I
• 1:19:28
  Speaker 1: just you know, look, I understand the mindset. I understand
• 1:19:33
  Speaker 1: the if you think this is this is the war
• 1:19:36
  Speaker 1: to fight, then this if this is where you're supposed
• 1:19:39
  Speaker 1: to fight the war, then this is what you would do.
• 1:19:41
  Speaker 1: I just think it's the wrong strategy, right, if you
• 1:19:45
  Speaker 1: don't like what's happening here, you know this is asymmetric warfare,
• 1:19:50
  Speaker 1: and the asymmetric warfare would be be the party of
• 1:19:53
  Speaker 1: democracy again, don't be the party of gerrymandering. Become the
• 1:20:00
  Speaker 1: party that says, hey, Congress isn't representative enough of conservatives
• 1:20:05
  Speaker 1: in Massachusetts or liberals in Tennessee, right, why don't you
• 1:20:09
  Speaker 1: be that party? And then you're going to shame other
• 1:20:13
  Speaker 1: Democrats who think, hey, this is a bad idea, that
• 1:20:16
  Speaker 1: maybe they're a Democrat because they were pro fairness anyway,
• 1:20:20
  Speaker 1: it is. It is a lot of blow hard, anonymous
• 1:20:25
  Speaker 1: language in this CNN article, But if you really cared
• 1:20:29
  Speaker 1: about representation in certain communities, you'd fight to expand the
• 1:20:33
  Speaker 1: size of the House. You wouldn't just fight to do jerrymandery.
• 1:20:37
  Speaker 1: And I'm really sorry that there is such blindness right
• 1:20:40
  Speaker 1: now in House leadership. I'm just you know, I get it.
• 1:20:43
  Speaker 1: You wasted seventy million dollars of somebody else's money, and
• 1:20:46
  Speaker 1: donors are pissed, and you've got to give donors something.
• 1:20:49
  Speaker 1: But I have to tell you, I think resistance on this.
• 1:20:54
  Speaker 1: Stuff's going to grow and this isn't you know, We're
• 1:20:57
  Speaker 1: finding out there are rational people in both parties on
• 1:21:00
  Speaker 1: this who are uncomfortable with how this goes. You saw
• 1:21:02
  Speaker 1: it again in South Carolina. We saw it in Indiana,
• 1:21:06
  Speaker 1: You've seen it in Maryland. I think you may see
• 1:21:10
  Speaker 1: it in a few of these blue states. Who will
• 1:21:12
  Speaker 1: be like, are we really going to take our orders
• 1:21:14
  Speaker 1: from the national party, a national party whose brand is
• 1:21:18
  Speaker 1: in the toilet anyway. It's why there aren't more folks
• 1:21:25
  Speaker 1: who care about representation in Congress and care about diversity
• 1:21:29
  Speaker 1: in Congress who are just not jumping on this. It's
• 1:21:33
  Speaker 1: just I think it's it's it is. It's it tells
• 1:21:40
  Speaker 1: me they aren't serious about their issues, all right. Jay
• 1:21:44
  Speaker 1: new York writes comment in a question, comment, you talked
• 1:21:47
  Speaker 1: about the irrational den anger against Fetterman, but I think
• 1:21:49
  Speaker 1: the anger is less about his votes the left is
• 1:21:51
  Speaker 1: used to being annoyed by centrist Dems, and more about
• 1:21:54
  Speaker 1: how regular he attacks them on Fox and Twitter. By
• 1:21:56
  Speaker 1: the way, I agree with that fair point. It just
• 1:21:59
  Speaker 1: seems weirdly antagonistic and counterproductive. Question. Do you think there
• 1:22:02
  Speaker 1: will be any impact from Susan Collins's disclosure of her
• 1:22:06
  Speaker 1: essential tremors. On the one hand, it's not terribly surprising
• 1:22:08
  Speaker 1: for those who have observed her over the years. On
• 1:22:10
  Speaker 1: the other hand, age, health and fitness are under a
• 1:22:12
  Speaker 1: microscope more than ever, and she's running against a robust
• 1:22:15
  Speaker 1: challenger in grain Platin or Jane in New York. Look,
• 1:22:17
  Speaker 1: I think it's the antagonism. I think you're right. I
• 1:22:20
  Speaker 1: think it's it's the sticking the finger in the eye
• 1:22:23
  Speaker 1: aspect of it. But all I would say is by
• 1:22:30
  Speaker 1: getting upset about it, it only sort of feeds him more. Right.
• 1:22:35
  Speaker 1: I think it's one of those if you starve, I
• 1:22:38
  Speaker 1: my first instinct is to always starve a controversy of fuel, right,
• 1:22:44
  Speaker 1: you know, you know, be Muhammad Ali, right, do let them,
• 1:22:51
  Speaker 1: let them punch themselves out, and then when they're exhausted,
• 1:22:54
  Speaker 1: come in for the kill. All right. I just you know,
• 1:22:58
  Speaker 1: sometimes I would I would be thinking more asymmetrically on that.
• 1:23:02
  Speaker 1: But I think you're right that it's the It's clear
• 1:23:08
  Speaker 1: he just picks these certain things, and it's almost like
• 1:23:12
  Speaker 1: he enjoys annoying the left on these certain cultural things,
• 1:23:16
  Speaker 1: and then he votes with the Dems pretty much on
• 1:23:19
  Speaker 1: economic policy and on social policy, etc. But it's a
• 1:23:26
  Speaker 1: fair point. I think you're right. It's the state, you know.
• 1:23:28
  Speaker 1: But that's where I would say, is you know, getting
• 1:23:34
  Speaker 1: mad at him is? I think only only motivates it more.
• 1:23:39
  Speaker 1: That's my theory. On your other question, I think it's
• 1:23:42
  Speaker 1: a huge issue. You know. Look, I think it's a
• 1:23:46
  Speaker 1: bigger issue that he's new and she's old. Forget health.
• 1:23:50
  Speaker 1: And when I mean by old, I don't mean my age,
• 1:23:52
  Speaker 1: meaning she's you know, she was first elected in the
• 1:23:55
  Speaker 1: twentieth century. It's twenty twenty six, right, she was selected in
• 1:24:03
  Speaker 1: nineteen ninety six. You know, I first started. She was
• 1:24:09
  Speaker 1: first on my radar when she ran for governor and
• 1:24:11
  Speaker 1: lost in nineteen ninety four. By the way, one of
• 1:24:14
  Speaker 1: those fun trivia questions. I believe now, I believe this
• 1:24:21
  Speaker 1: is now correct. That the and I'm like quickly going
• 1:24:26
  Speaker 1: through But Maine, as I believe, the only Senate delegation
• 1:24:31
  Speaker 1: left where the two senators ran in a campaign against
• 1:24:36
  Speaker 1: each other. When a gets king ram for governor, I
• 1:24:39
  Speaker 1: think Susan Collins ran for governor. I think I think
• 1:24:42
  Speaker 1: I have that right. Anyway. I know I could check
• 1:24:47
  Speaker 1: right now, but I want to get through these questions
• 1:24:49
  Speaker 1: for you. So yeah, I just think that it's all
• 1:24:56
  Speaker 1: part of it, right, And the health issues only remind
• 1:24:59
  Speaker 1: people how long she's been there, And I just think
• 1:25:02
  Speaker 1: how long she's been here it is the biggest problem.
• 1:25:07
  Speaker 1: Well put it this way, no, hell, And this is
• 1:25:12
  Speaker 1: why I think Platner is the favorite. And I keep
• 1:25:15
  Speaker 1: going back again. Tell me how this isn't twenty sixteen
• 1:25:20
  Speaker 1: in reverse, where you have Democrats rationalizing their support for
• 1:25:24
  Speaker 1: somebody who had a Nazi tattoo. No, no, no, I paid
• 1:25:26
  Speaker 1: no attention to that. You know, it looks like we
• 1:25:28
  Speaker 1: did with Trump, right, It's this is Trump Clinton in reverse.
• 1:25:35
  Speaker 1: Brian Flaherty in Boston writes, thank you for your interview
• 1:25:37
  Speaker 1: of weeks back with the attorneys of the lawsuit against
• 1:25:39
  Speaker 1: Meta and YouTube. I deleted the Facebook app from my
• 1:25:41
  Speaker 1: phone as soon as I got home that day, and
• 1:25:43
  Speaker 1: I now only check it a couple of times a
• 1:25:45
  Speaker 1: day on my laptop. I'm reading more, and the screen
• 1:25:48
  Speaker 1: time of my phone has plummeted by fifty percent. I
• 1:25:50
  Speaker 1: don't have a question. I just want to say thank
• 1:25:52
  Speaker 1: you for giving me that push to finally take more
• 1:25:53
  Speaker 1: control of my time. Well, how about that. You know,
• 1:25:58
  Speaker 1: it's funny my screen time's gone up, not on my phone,
• 1:26:02
  Speaker 1: but on my so as my screen time has gone
• 1:26:06
  Speaker 1: down on my phone, it's gone up on my iPad.
• 1:26:09
  Speaker 1: But I use my iPad more like a laptop. So
• 1:26:11
  Speaker 1: I haven't decided whether it's good or bad. But I
• 1:26:15
  Speaker 1: do appreciate that Apple does that, and it does make
• 1:26:19
  Speaker 1: me think on that stuff. But I think I'm down
• 1:26:23
  Speaker 1: to a collective seven hours with phone and iPad. I
• 1:26:28
  Speaker 1: think I want to get it down to five. But
• 1:26:31
  Speaker 1: when you use it as a laptop, it's tough. But
• 1:26:35
  Speaker 1: glad to hear that, you know, I think we all
• 1:26:38
  Speaker 1: know all of this stuff would be fine in moderation.
• 1:26:44
  Speaker 1: Next question comes from heny Be in New Orleans. He
• 1:26:46
  Speaker 1: goes Hey and Georgia commentary and the Brown decision and
• 1:26:48
  Speaker 1: it's impact on how Americans via the Supreme Court. That said,
• 1:26:50
  Speaker 1: couldn't you argue the Court's controversial role is already established
• 1:26:53
  Speaker 1: earlier when it struck down key New Deal legislation. In
• 1:26:56
  Speaker 1: some ways, those decisions may have even been more striking,
• 1:26:58
  Speaker 1: since they overturned actions of the elected legislative branch. Curious
• 1:27:01
  Speaker 1: how you see that earlier period shaping today's perception of
• 1:27:04
  Speaker 1: the court regards Henry B. It's a fair point, and
• 1:27:08
  Speaker 1: I think the and then you throw in the right
• 1:27:11
  Speaker 1: what you know, when when when he'd lose these fights
• 1:27:14
  Speaker 1: in the court then and then he got to the
• 1:27:15
  Speaker 1: court packing, he got frustrated, and it certainly, I mean it,
• 1:27:24
  Speaker 1: certainly you could say it certainly shaped the picks that
• 1:27:27
  Speaker 1: FDR andre you know, and Democrats would make going forward
• 1:27:32
  Speaker 1: on that. But I guess I was, look, I probably
• 1:27:38
  Speaker 1: should have framed this more from the right. Right, impeach
• 1:27:41
  Speaker 1: Arl Warren became a thing in the fifties. There were billboards,
• 1:27:45
  Speaker 1: you would see them, and so it certainly was the
• 1:27:50
  Speaker 1: beginning of the conservative campaign against the courts, right, it
• 1:27:54
  Speaker 1: was before you know, Roe v. Wade was not the
• 1:27:57
  Speaker 1: beginning of this. It was sort of I think you
• 1:27:59
  Speaker 1: could argue is Brown v. Board and the Warren Court
• 1:28:01
  Speaker 1: in general that did it. But it's a fair that
• 1:28:04
  Speaker 1: the it's certainly how I think the fairer thing to
• 1:28:09
  Speaker 1: say is that the fights between the Court and FDR
• 1:28:14
  Speaker 1: were the first, you know, was sort of the beginning
• 1:28:17
  Speaker 1: of the modern you know, sort of presidential fights with
• 1:28:22
  Speaker 1: the courts right going forward. But when I look at
• 1:28:26
  Speaker 1: it through the ideological battle lines that were drawn and
• 1:28:30
  Speaker 1: sort of what has been arguably the rights campaign to
• 1:28:34
  Speaker 1: reshape the court. It really began, Uh, it really started.
• 1:28:42
  Speaker 1: The grassroots efforts started with the with the with the
• 1:28:45
  Speaker 1: pushback against the Warren Court. But anyway, fair point on
• 1:28:48
  Speaker 1: that next question. Long time listener here, really value the
• 1:28:53
  Speaker 1: thoughtfulness of your podcast. Thank you for saying that. I
• 1:28:55
  Speaker 1: wanted to push back a bit on your framing of
• 1:28:57
  Speaker 1: democratic redistricting as purely hypocritical as some see it, more
• 1:29:01
  Speaker 1: as a strategic response to actions they views undermining democratic norms,
• 1:29:04
  Speaker 1: and that context is mirroring those tactics less about hypocrisy
• 1:29:07
  Speaker 1: and more about deterrence, even if it's an imperfect choice.
• 1:29:09
  Speaker 1: Curious how you weigh that perspective. Look, I think I
• 1:29:14
  Speaker 1: will say this. I've thought that the the key difference
• 1:29:18
  Speaker 1: between what Republicans did and what Democrats attempted to do
• 1:29:21
  Speaker 1: and did do in California is that at least Democrats
• 1:29:23
  Speaker 1: got voter permission. Right, Republicans never got voter permission. But
• 1:29:31
  Speaker 1: I do think it underminds undermines the larger identity of
• 1:29:36
  Speaker 1: the Democrats being a party of fairness and a Party
• 1:29:38
  Speaker 1: of Reform, and this is it's this is all a setback.
• 1:29:44
  Speaker 1: And you know, once you start to slip into reactionary
• 1:29:50
  Speaker 1: political strategy, which is what this is, it's just a spiral, right,
• 1:29:54
  Speaker 1: It's just going to you know, this isn't this is
• 1:29:57
  Speaker 1: this is only going to get worse, not better, until
• 1:30:00
  Speaker 1: there's somebody that says, Jesus, this has got to stop. Right.
• 1:30:11
  Speaker 1: You know, at first you could sit here and rationalize it, well,
• 1:30:14
  Speaker 1: it's the red states the blue states, you know, then
• 1:30:18
  Speaker 1: it becomes the light blue states and the light red
• 1:30:21
  Speaker 1: states and all this. I will just say this, I
• 1:30:25
  Speaker 1: do think some of this stuff is going to sort
• 1:30:27
  Speaker 1: of dummy mander and implode on themselves, right. I mean,
• 1:30:33
  Speaker 1: I go back. I think the South Carolina that these
• 1:30:35
  Speaker 1: state senators that that stopped to redraw the map saved
• 1:30:40
  Speaker 1: Republican House seats. I absolutely believe it would have cost them.
• 1:30:45
  Speaker 1: It would have cost them in the long run, and
• 1:30:48
  Speaker 1: it still may. I think what these so what these
• 1:30:50
  Speaker 1: guys have done in the South. I think in ten
• 1:30:54
  Speaker 1: years you're going to see them suddenly go back to
• 1:30:56
  Speaker 1: going you know, packing Democrats and one majority minority district
• 1:31:02
  Speaker 1: wasn't a bad idea. But some of that depends on that.
• 1:31:06
  Speaker 1: You know, there's two ways you can respond, right, you
• 1:31:08
  Speaker 1: can respond symmetrically, or you can respond asymmetrically. Find you
• 1:31:14
  Speaker 1: want to change the maps, We're going to flood with
• 1:31:16
  Speaker 1: more candidates. We're going to flood with this. So is
• 1:31:24
  Speaker 1: strategic deterrence, I get it. I think Virginia was the
• 1:31:31
  Speaker 1: wrong state to experiment with that because it's not a
• 1:31:33
  Speaker 1: partisan state, right you could, you know, if you were
• 1:31:36
  Speaker 1: to tell me this was only going to be limited
• 1:31:37
  Speaker 1: to the all reds and the all blues, and then
• 1:31:41
  Speaker 1: it would you know, but you know, it's not going
• 1:31:43
  Speaker 1: to touch your Pennsylvania's, your Michigans, your Minnesota, you know
• 1:31:45
  Speaker 1: your you're sort of your swingish faith. I guess you
• 1:31:48
  Speaker 1: could rationalize it that way, but I'm first of all,
• 1:31:53
  Speaker 1: it hasn't hasn't done that, and it's this, it's only
• 1:31:59
  Speaker 1: you know it. I don't think it creates deterrence. It
• 1:32:03
  Speaker 1: only motivates to keep going. Now, there's only there's going
• 1:32:08
  Speaker 1: to be a limit, right because at some point there's
• 1:32:09
  Speaker 1: just you're just not going to have any any place
• 1:32:12
  Speaker 1: to sort of to sort of wall off voters, and
• 1:32:19
  Speaker 1: some of them are going to go back to the
• 1:32:20
  Speaker 1: packing mindset. So yeah, I'm a I hear you, and
• 1:32:29
  Speaker 1: again I go back, and I understand those that think, well,
• 1:32:34
  Speaker 1: what other choice did the Democrats have? You know, there
• 1:32:39
  Speaker 1: are other choices, but this is the one they're making
• 1:32:43
  Speaker 1: and it's not going as well as they thought. And
• 1:32:46
  Speaker 1: by the way, stop focusing on maps and start focusing
• 1:32:49
  Speaker 1: on messaging. The messaging has never been easier. So go
• 1:32:53
  Speaker 1: take the fight to every corner of the country because
• 1:32:56
  Speaker 1: guess what, this is a really terrible economy for every
• 1:32:59
  Speaker 1: state in the Union. All right, Next question comes from
• 1:33:09
  Speaker 1: Adam B. My Man in Davy, Florida, six or seven
• 1:33:13
  Speaker 1: time or at this point, he goes, Hey, I'm curious
• 1:33:15
  Speaker 1: about your thoughts on a hypothetical Supreme Court vacancy if
• 1:33:18
  Speaker 1: Chief Justice John Roberts were to step down here you
• 1:33:20
  Speaker 1: think Trump would choose as a successor how much influence
• 1:33:23
  Speaker 1: would the Senate have in that process? And what might
• 1:33:25
  Speaker 1: be the implications for the Court if the next Chief
• 1:33:27
  Speaker 1: Justice were seen as more openly partisan. Thanks again, Adam B. Davey, Florida.
• 1:33:31
  Speaker 1: And then he says, ps, yes, Chuck, Davy is the
• 1:33:33
  Speaker 1: most southern town in South Florida, bigger questrian culture, miles
• 1:33:36
  Speaker 1: of horse trails, and probably the region's largest country western
• 1:33:38
  Speaker 1: bar round up. Yehah, yeah, so right, Davy is where
• 1:33:43
  Speaker 1: the I believe Davy is where all the gun ranges
• 1:33:48
  Speaker 1: or where the best gun ranges are as well. That's
• 1:33:50
  Speaker 1: why I've always thought Davy of the sort of the truth,
• 1:33:53
  Speaker 1: the only arguably the only southern town in Broward County,
• 1:33:58
  Speaker 1: southern little town in Broad County. Well, that's an interesting hypothetical. Look,
• 1:34:04
  Speaker 1: I don't think Roberts is going anywhere, and I think
• 1:34:06
  Speaker 1: Roberts is one of those that would you know, is
• 1:34:11
  Speaker 1: I'd like to think he would not want to hand
• 1:34:13
  Speaker 1: Trump that vacancy, so I don't think he would do it.
• 1:34:22
  Speaker 1: I would have said he you know, he might have
• 1:34:25
  Speaker 1: elevated either Gorsuch or Kavanaugh. I don't think that now.
• 1:34:28
  Speaker 1: I think he's mad at both of them for different reasons.
• 1:34:31
  Speaker 1: Maybe he would elevate Kavanaugh or maybe he would just
• 1:34:36
  Speaker 1: go and find some My guess is he would go
• 1:34:38
  Speaker 1: with somebody new.
• 1:34:40
  Speaker 2: Uh.
• 1:34:42
  Speaker 1: You know, it was interesting I saw a stat that
• 1:34:44
  Speaker 1: I saw a statistic that said the most partisan chief
• 1:34:48
  Speaker 1: Justice was actually ren Quest over the last three years
• 1:34:52
  Speaker 1: but he was just the most partisan of the of
• 1:34:55
  Speaker 1: the justices, regardless of whether it was chief or not.
• 1:34:58
  Speaker 1: That Rehnquest was even more more so than I think
• 1:35:01
  Speaker 1: Thomas or Alito. I think I saw a stat that
• 1:35:03
  Speaker 1: said that so, and you know, you could argue Renquest
• 1:35:06
  Speaker 1: was certainly nobody saw him as anything other than a
• 1:35:10
  Speaker 1: you know, pretty a Nixon conservative on that front. But
• 1:35:15
  Speaker 1: you know, and then bushby Gore sort of cemented the
• 1:35:20
  Speaker 1: partisanship of of the Renquest Court, fairly or unfairly right.
• 1:35:25
  Speaker 1: It just right because it's split right along idea, right
• 1:35:28
  Speaker 1: along the partisan lines, the ideological lines of that court.
• 1:35:31
  Speaker 1: It's hard not to look at it through that prism
• 1:35:33
  Speaker 1: for many Americans. But it's interesting if for some reason,
• 1:35:38
  Speaker 1: and obviously you know, there's you know, there's there's anything
• 1:35:42
  Speaker 1: can happen with you know, it's Supreme Court. Vacancies sometimes
• 1:35:47
  Speaker 1: are unplanned, as we know. But my gut is he
• 1:35:52
  Speaker 1: would elevate somebody new to Chief Justice rather than promote
• 1:35:57
  Speaker 1: somebody from within, because I think Trump, in his own mind,
• 1:36:01
  Speaker 1: thinks that that Roberts is sort of poisoned. I think
• 1:36:04
  Speaker 1: he thinks that Roberts is sort of poisoned. Kavanaugh, poison Barrett,
• 1:36:08
  Speaker 1: you know, poison Gore. Such only Alito and Thomas have
• 1:36:12
  Speaker 1: been able to quote not been not been persuaded by
• 1:36:17
  Speaker 1: the by the by Roberts. So I suspect he would
• 1:36:23
  Speaker 1: try to find his own person to be the chief
• 1:36:28
  Speaker 1: on this. I still think they want a Supreme Court opening,
• 1:36:34
  Speaker 1: and that they're gonna that Republicans in the Senate are
• 1:36:37
  Speaker 1: going to be pretty convinced that it's it's sort of
• 1:36:40
  Speaker 1: the only Hail Mary they have left to save the Senate,
• 1:36:43
  Speaker 1: because hey, you know, the news in Nebraska couldn't have
• 1:36:46
  Speaker 1: gone better if you're on the Democratic side of the isle,
• 1:36:50
  Speaker 1: and it couldn't gone worse if you're on the Republican
• 1:36:52
  Speaker 1: side of the isle. Dan Osborne is going to get
• 1:36:54
  Speaker 1: a clean shot without a Democratic candidate because the nominee
• 1:36:58
  Speaker 1: there was two Democrats in the race, one essentially an
• 1:37:02
  Speaker 1: Osbourne supporter and one that was there to be an
• 1:37:04
  Speaker 1: Osborne spoiler. And the Osborne supporter won the primary, and
• 1:37:08
  Speaker 1: so she's going to withdraw and he's not going to
• 1:37:10
  Speaker 1: have a There won't be a Democrat on the ballot.
• 1:37:12
  Speaker 1: That's a big deal to Osborne. So I think the
• 1:37:17
  Speaker 1: Republicans I think if you're John Thune, you're gonna think, well,
• 1:37:21
  Speaker 1: all right, give me a Spreme Court opening. Maybe that'll
• 1:37:24
  Speaker 1: rally the base, and maybe that can save Roger Marshall
• 1:37:26
  Speaker 1: in Kansas. Maybe that saves Ashley Henson in Iowa. Right like,
• 1:37:30
  Speaker 1: I think that's going to be the mindset. So I
• 1:37:32
  Speaker 1: do think we're going to have a spring Court opening.
• 1:37:34
  Speaker 1: You know that. I assume it's a leado that gets
• 1:37:37
  Speaker 1: pushed out. But we'll see. All right. Last question, hey, check,
• 1:37:44
  Speaker 1: not a question, but some appreciative thoughts. I am the
• 1:37:46
  Speaker 1: guy who told you about Stetson's location. Unfortunately, since February,
• 1:37:49
  Speaker 1: I've been on dialysis three times a week. I'm sorry
• 1:37:52
  Speaker 1: to hear that. That is rough. My father was on dialysis,
• 1:37:55
  Speaker 1: you know, so you have to sit in this uncomfortable
• 1:37:59
  Speaker 1: chair four hours a day. He goes your long form shows, though,
• 1:38:02
  Speaker 1: make the time go by faster. You speak on topics.
• 1:38:04
  Speaker 1: I'm interested in entertaining with great guests. I've bought some
• 1:38:07
  Speaker 1: of their books. One thing I felt when you were
• 1:38:09
  Speaker 1: on Meet the Press is that you never had the
• 1:38:11
  Speaker 1: time to ask all the questions you wanted to. I
• 1:38:12
  Speaker 1: always yelled at the TV, Hey, what about this, keep
• 1:38:15
  Speaker 1: it up appreciated, George and Newport Richie, Florida. George, appreciate that.
• 1:38:18
  Speaker 1: I'm if I can help in the smallest of ways
• 1:38:22
  Speaker 1: while you while you fight. Uh, then I'm then I've
• 1:38:27
  Speaker 1: I've done, I've done something that's positive. So thank you
• 1:38:30
  Speaker 1: for saying that. Thank you for supporting the guests that
• 1:38:35
  Speaker 1: I've had who have written books, who who I think
• 1:38:38
  Speaker 1: are worthy of your support. So look, and uh, I
• 1:38:46
  Speaker 1: really hope uh you get through this and you know,
• 1:38:50
  Speaker 1: keep us up to date, let us know when you
• 1:38:52
  Speaker 1: when you continue to get more good health news. Uh,
• 1:38:55
  Speaker 1: keep fighting, We're with you. Uh. And I appreciate, appreciate
• 1:38:59
  Speaker 1: the nice words and the kind words. Uh. And hey man,
• 1:39:02
  Speaker 1: we're going to keep churning out nice long form podcasts.
• 1:39:06
  Speaker 1: Dynastic it's coming up. Got a fun interview with a
• 1:39:12
  Speaker 1: former Steeler coming up that will be promoting soon. So
• 1:39:16
  Speaker 1: all right with that, enjoy the weekend. Boy. The NBA
• 1:39:20
  Speaker 1: has gotten. I love I've I've been I'm a I
• 1:39:24
  Speaker 1: love every minute of Spurs Timberwolves. It has been the
• 1:39:31
  Speaker 1: most entertaining series. Really that the only one we've had,
• 1:39:35
  Speaker 1: none of the other I am struggling to care about
• 1:39:38
  Speaker 1: the Cavs Pistons. At least it's competitive, but I am
• 1:39:41
  Speaker 1: struggling to care about it because none of it, it
• 1:39:44
  Speaker 1: all just sort of feels, you know, it just feels
• 1:39:50
  Speaker 1: like it's it doesn't matter, right, you just know, well,
• 1:39:53
  Speaker 1: it doesn't matter. The Winter is going to lose the
• 1:39:54
  Speaker 1: next or even if they beat the next, the winner
• 1:39:56
  Speaker 1: that's going to lose to either the Spurs or the
• 1:39:59
  Speaker 1: or the Thunder. But man, Wemby versus Edwards has just
• 1:40:04
  Speaker 1: been a treat. It's been terrific basketball. It's been you know,
• 1:40:10
  Speaker 1: and I'm sorry that I think I have a feeling
• 1:40:12
  Speaker 1: it's going to be over my next my next week.
• 1:40:15
  Speaker 1: So hopefully Spurs Thunder delivers because the rest of this
• 1:40:19
  Speaker 1: NBA Playoffs doesn't look very good. Uh, you know, Brunson
• 1:40:25
  Speaker 1: versus Cad could be a lot of fun. Not gonna lie.
• 1:40:28
  Speaker 1: Brunson Cad could be could be something. And I know,
• 1:40:31
  Speaker 1: and look, getting the Knicks in the finals will be
• 1:40:33
  Speaker 1: a nice shot in the arm to the East Coast
• 1:40:36
  Speaker 1: NBA fans. You know, the Knicks are just the most
• 1:40:39
  Speaker 1: you know, talk about a franchise that constantly punches below
• 1:40:43
  Speaker 1: its weight, right, they have always underperformed, over promised, and
• 1:40:47
  Speaker 1: under delivered, and there I you know, I enjoy the
• 1:40:53
  Speaker 1: toughness of Jalen Brunson, and I'm always shocked at the
• 1:40:57
  Speaker 1: ability he has to get to the hoop in this
• 1:41:01
  Speaker 1: in this game of Biggs, and watching Wenby versus Brunson
• 1:41:04
  Speaker 1: would be something else, that's for sure. But some of
• 1:41:09
  Speaker 1: these series, I mean, you know, it's a some of
• 1:41:11
  Speaker 1: these other franchises have a lot of work to do
• 1:41:13
  Speaker 1: to keep up, a lot of work to do to
• 1:41:16
  Speaker 1: keep up. And we'll see. I don't know if I've shared.
• 1:41:20
  Speaker 1: I mean, the big excitement we've got here in Washington is,
• 1:41:24
  Speaker 1: you know, here's all I'm please, Washington, do not trade
• 1:41:29
  Speaker 1: the first pick, you know, and if you do, you
• 1:41:33
  Speaker 1: better get you better get so much back that it
• 1:41:37
  Speaker 1: makes a ton of sense. I know you could you
• 1:41:41
  Speaker 1: could claim all right, I think de Bonsa you risk.
• 1:41:46
  Speaker 1: I think he's that good. I what I saw, what
• 1:41:50
  Speaker 1: I watched, the work ethic. I don't know. You just
• 1:41:54
  Speaker 1: feel like some guys seem like it right, that they've
• 1:41:57
  Speaker 1: just a little bit Kate Cunningham and that look. And
• 1:42:00
  Speaker 1: it took us a couple of years to see it.
• 1:42:02
  Speaker 1: And now everybody sees it right, and now you're like, yeah,
• 1:42:04
  Speaker 1: he plays like a number one overall pick, and there
• 1:42:06
  Speaker 1: just is a difference, and there's something about him. There's
• 1:42:10
  Speaker 1: something about Demanza over about everybody else. Look, I think
• 1:42:14
  Speaker 1: that Caleb Wilson, the kid out of North Carolina, there's
• 1:42:16
  Speaker 1: no doubt he could end up being and he may
• 1:42:19
  Speaker 1: end up being the one of the best players out
• 1:42:22
  Speaker 1: of this draft. But he's going to be a little
• 1:42:24
  Speaker 1: bit of a project. And I'm not sure how crazy
• 1:42:28
  Speaker 1: I am about the Wizards doing more projects. Let's start
• 1:42:33
  Speaker 1: to actually put a competitive team on the court. You
• 1:42:37
  Speaker 1: know who Charlotte actually did this this year. Once you try,
• 1:42:40
  Speaker 1: let's you know if we can have if the Wizards
• 1:42:42
  Speaker 1: can have the Charlotte Hornets season, that would be a
• 1:42:46
  Speaker 1: step in the right direction. Don't trade this pick. Please,
• 1:42:50
  Speaker 1: don't trade this pick. I know Utah is going to
• 1:42:52
  Speaker 1: throw a lot of ideas at you. Don't trade this pick.
• 1:42:55
  Speaker 1: Look at how hard it took to tang for this
• 1:42:57
  Speaker 1: number one pick. You control the board. Be careful, guys,
• 1:43:04
  Speaker 1: All right with that, enjoy your weekend and I will
• 1:43:09
  Speaker 1: see you in seventy two hours.