Latest / Words & Numbers / Episode 406: Words & Numbers Live: After the Election

Transcript

Episode 406: Words & Numbers Live: After the Election · Words & Numbers

0:01
This is a special two-part episode of Words and Numbers
0:04
that sort of took on a life of its own.
0:07
As our regular listeners know, last January I moved to the
0:11
Washington DC area, switching out my academic career for a
0:15
career in banking. I put out a call to listeners in
0:18
the DC area who might want to get together for coffee.
0:22
Before I knew it, that afternoon coffee had taken on a life of
0:25
its own. 40 listeners ended up descending on DC for the
0:30
weekend, several flying in from as far away as Texas, Florida,
0:35
Arizona and Ohio. Andra Mount, long time listener
0:39
and organizer of all things words and numbers, put together
0:43
a day trip into DC. In the evening, everyone
0:46
gathered for food, drink and conversation.
0:49
Clark Neely, who has appeared on numerous episodes, hosted the
0:53
event at his house. Phil Magnus and Mikhail Rasner,
0:57
each of whom have also appeared on multiple episodes, joined us.
1:00
Also, what you're about to hear is the live recording we made
1:05
that evening, just four days after the 2024 presidential
1:09
election. James and I give special thanks
1:12
to Clark for hosting the event, to Andrew for organizing and
1:16
coordinating, and to the many listeners who put forth the
1:20
effort and expense to join us. Week after week, we send out our
1:24
thoughts, hoping that someone out there is listening.
1:28
The e-mail we received, the generous donations from our
1:31
Patreon sponsors, and the outpouring of support so many of
1:35
you gave just by showing up for this event give us hope that our
1:39
efforts do yield good fruit. Part 1 of this two-part episode
1:44
is our conversation. Part 2 contains questions from
1:48
the people in the room, and we will air these two parts in two
1:52
consecutive weeks. I apologize in advance for the
1:56
sound quality. We had three microphones, one of
2:00
which I had configured incorrectly.
2:03
So while you'll get good quality on James, Phil's and Mchale's
2:07
voices, Clark and I sound like we're yelling into tuna cans.
2:12
But hang in there. The group we assembled this week
2:15
delivered a top notch episode. Hi, I'm James.
2:22
And I'm Anthony and this. Is words and numbers.
2:29
And we're sitting here in. Clark Neely's house with. 30 or
2:32
40 words and numbers listeners if you just say your name so
2:36
that the listeners can recognize your voice.
2:39
So this is Clark. I'm the host, and I want to
2:41
explain the shots because I think it's important.
2:43
This originated with James and I having a bet about who had the
2:46
most humiliating story involving self infliction of pepper spray.
2:52
And he was generous enough in spirit to say that mine was also
2:56
pretty awful. And so the bet was you get to
2:59
pick any gross shot out of my liquor cabinet to inflict on the
3:02
other ones. We've inflicted shots, and then
3:05
all the other ones agree that they would participate.
3:08
So now it's just a melange. I have no idea what shots are in
3:11
front of anybody. They're all clear.
3:13
Let's see, we have absinthe. We have tequila, we have vodka,
3:19
we have gin, and we have something most you've never
3:23
heard of called Batavia, Iraq, which is what they used to give
3:26
to British sailors in the East Indies when they couldn't have
3:29
access to anything else. It's the nastiest distillation
3:32
of rice that you could possibly imagine, if you and.
3:35
That one is for me. Well, I don't know.
3:37
I don't know who's got what. I've got it right in front of.
3:40
Me. Phil, if you could take much
3:42
less time to interview. Yes, I'm Phil Magnus.
3:47
I'm the David J Throat here at the Independent Institute,
3:50
general troublemaker and scourge of the economic left.
3:54
My name is Mikkel Razner. I am notably the supply chain
3:57
guy. Equally as surprised that I'm
3:59
more popular than anyone here. Good company to keep and the
4:03
company I own is called Mere United.
4:05
Hi, I'm James. We've just passed the election
4:09
you want. To talk about it?
4:10
Not especially, no. Let me throw out one thing.
4:14
There we go. I was.
4:16
Looking at map of the counties of the US and how they voted
4:20
Republican, Democrat, of course it's, you know, red and blue on
4:23
left side of the screen. On the right side of the screen
4:26
I put population density of the United States by county, and
4:30
those two things are. Remarkably, the same.
4:33
Shockingly, it matches up perfectly.
4:34
Yeah, this is the exact argument against voting for the president
4:39
by popular vote. Yes.
4:40
Right, because you'd end up with the 10 or so biggest cities in
4:43
the United States deciding the presidency every single time,
4:47
and it would lurch far to the left of where we tend to end up.
4:51
What is it that when you get lots of humans together in a
4:55
small space, they vote Democrat? Well, I'm going to pass this
4:57
microphone off to Phil in just a second.
4:59
But this is a problem, if you want to call it a problem, it's
5:02
a problem that we've had in the United States since the
5:04
founding, where we had the interest of the people who lived
5:08
in cities and the interests of the people who lived in the
5:10
country. And when you read The
5:12
Federalist, read the various essays that support the adoption
5:15
of the US Constitution, what you find is that they're trying to
5:19
split the difference here and make it so everybody's interest
5:22
was pretty well represented. And I think the Electoral
5:25
College did a hell of a good job at that.
5:28
It doesn't exactly do what it was ostensibly designed to do.
5:32
There were a few things it was meant to do that it doesn't
5:34
really do anymore. But this is the one thing that
5:36
it does extraordinarily well. So, Phil, if you've got anything
5:40
to say on that topic, I suspect you do.
5:42
Yeah, it's a derivative of a problem known as Hamiltonians.
5:46
They've been around since the beginning as well.
5:48
That was the interest of the people in the city.
5:50
Yes, yeah, yeah. Very much economically oriented
5:53
toward government taking a more proactive role in everything.
5:57
In essence, we could talk about bankers and farmers.
6:00
Yeah. I mean, that's what it really
6:01
boils down to here. Yes, you've got agricultural
6:04
interests or one of the first major factions of the US
6:08
government when it fails, and then you have industrial
6:10
interests and financial interests.
6:12
The finance and industry tends to be on the Hamiltonian side.
6:16
The Omen farmers are agrarian. They're Jeffersonians and that's
6:20
the original party split. All right.
6:21
So I can see, of course, they're urban versus rural.
6:24
They're going to have different interests and different
6:26
concerns. But how is it that there's this
6:29
commonality that in the high density setting people seem to
6:34
regard government as a complement to society, whereas
6:38
in the rural areas they seem to regard it as a substitute for
6:41
society? I don't know how much this
6:44
necessarily impacts that, but I think one thing that we see a
6:47
lot in these larger cities that have a blue sector where the
6:52
rest of the state is, notably where I'm from, Miami is blue,
6:55
is in fact red. And I think one of the
6:57
phenomenons that's interesting is the aspect of Miami is very
7:00
welcoming. So you have very affluent people
7:03
that make it there that were already affluent.
7:05
You have people that have gotten there and became affluent
7:08
through meeting some of these people.
7:09
And then you have a whole sector of people that are trying to get
7:13
there, some that will, some that won't.
7:15
And I think there's more camaraderie in cities like that.
7:18
And I think camaraderie is an aspect of community, makes
7:22
people not necessarily vote for more government, but tend to
7:25
vote for that person which is going to be more community
7:28
based. And I think generally speaking,
7:31
the Republicans going to be more individual best he's going to
7:33
say liberty for all, individualism, libertarianism,
7:37
etcetera, while the Democrats are going to look more into the
7:40
community side. So cities tend to arise where
7:44
there are surpluses when we think about like when do we see
7:47
the emergence of cities in human history?
7:49
It's when human beings learn to engage in agriculture.
7:52
Where you could store grain, for example.
7:54
If you miss a crop, you might live, right?
7:57
Farmers, you can't count on that.
8:00
And so they're staking everything on being able to
8:02
support themselves in this year. You can't bank on your neighbors
8:07
or anybody else stepping in to save you from bad decisions or
8:10
just the happenstance of a drought or some other disaster.
8:14
And I think this to some extent articulates the divide between
8:18
the agrarian and the city dweller.
8:21
If you live in a city, it's not unreasonable to say, hey, look,
8:25
we're all in this together. And if I made some bad
8:27
decisions, come and help me, bail me out.
8:29
But if you're a farmer on the edge of the frontier where
8:32
everybody's living on a subsistence basis, you can't
8:35
look at your neighbor and say, I made some bad decisions, let me
8:38
have half of your crops so that I don't die.
8:41
And I think this may to some extent shape our attitude
8:44
towards government and what it's reasonable to expect of
8:47
government and what it's not. OK, that is the best
8:49
explanation. I've heard but.
8:52
If you follow that logic outside of a.
8:54
Framework of federalism. You've got a big problem because
8:59
the one side is going to try and impose its view on the other,
9:03
thinking that of course it's right because that's our lived
9:05
experience. But in a federalist system you
9:08
can have both things, the rural people depending on themselves
9:13
and the urban people depending on government.
9:15
But somehow we've ended up in this situation, it seems, where
9:19
either the Reds or the Blues take over and they want to
9:21
impose their view on everybody else.
9:24
You should be very, very careful about asserting that one is
9:28
right and one is wrong. That's one of the reasons why we
9:31
have a bicameral chamber, right, where we've got a Senate that is
9:35
not representative and a House of Representatives.
9:38
That is because it's not clear who you should back in that
9:41
argument. And maybe you should let 1000
9:44
flowers bloom, let the farmers have their say, and let the city
9:47
blowers have their say. But don't let the people who
9:50
happen to live in urban environments swamp the people
9:53
who are out there at the very edge of survival, who are
9:56
staking the most and saying if I make bad decisions I might not
9:59
survive. People in the cities aren't
10:02
risking as much, I think, as the people on the frontiers.
10:05
And Clark, the thing that we tend not to think about when we
10:07
think about bicameralism is that the setup is such that, yes, the
10:11
House is immediately representative.
10:14
Any hot button issue in society can take over the House in its
10:17
entirety right now, but only a third of the Senate is up for
10:21
election in any two year stretch.
10:23
So it's going to take 6 full years, 3 cycles.
10:26
And by the time you get to that third cycle, the framers hoped
10:30
that whatever it was that it ignited, the passions would have
10:33
gone out and it would just die under its own weight.
10:36
And lo and behold, that's about what happens.
10:39
The real danger in America is majority faction, and it's an
10:42
open question as to whether we've ever had one.
10:45
I think we have. I think it's progressivism.
10:47
I think that's the only thing that fits the description that
10:51
you can make a strong case for, and I think a strong case on the
10:54
other side of that too, right? But I think if we've ever had a
10:57
majority faction, that's it. Because those issues lasted
11:01
longer than the election cycle. It took actually 2 full election
11:05
cycles. I want to hear Phil's opinion,
11:07
but before we go there, can you define majority minority
11:10
faction? No, we'll let that.
11:14
I mean, you don't have to. A faction, according to Madison,
11:17
in the definition everybody uses from Federalist 10, is a number
11:21
of people, whether amounting to a majority or a minority.
11:24
So they're both the same except for their number actuated by a
11:28
common impulse that is contrary to the aggregate interests of
11:32
the community. I think that's close.
11:34
You got it. Page 43 of the Liberty Fund
11:37
edition, if you've got that one in front of you.
11:40
So we have minority factions all the time, right?
11:43
And it's one stupid thing after another, and you can think of
11:47
the Klan if you want, or the North American Man Boy Love
11:50
Association, NAMBLA. These are things that are
11:52
destructive in various ways, and they get exercised pretty
11:57
quickly from American politics. Because they're minority.
12:00
And because they're so crazy and everybody knows it.
12:03
It's the things that don't appear so crazy and that not
12:06
everybody knows. That's where you're going to
12:09
find a majority faction. People are going to be blinded
12:11
to it and they're going to think it's a really good thing when in
12:14
the end it's a really destructive thing, you feel.
12:17
Yeah, well, you think about it, you know, typical majoritarian
12:20
democracy. The premise is if you get 50% +
12:23
1, you win. But that's actually not an ideal
12:26
situation for society, because what happens to the other
12:29
49.999%? You're actually in a position
12:33
where that 50% + 1 could impose a lot of harms, a lot of costs
12:37
on a large swath of society that is just out of reach of being
12:41
able to defend itself. The whole premise of our system
12:43
of government is you chop up the different mechanisms of
12:47
attaining majority into multiple pieces, and suddenly, in an
12:52
aggregate, it actually turns out that you need more than a
12:55
majority of 50% + 1 to pass any legislation or to get something
12:59
through Congress and then to the President, and then to sustain
13:03
Supreme Court review. Something that a lot of people
13:06
will find a foreign thought the United States government was
13:08
designed to function poorly. Yeah, it's designed to be
13:13
inefficient. I.
13:14
Love this can. I riff on that real quick.
13:16
The biggest mistake I think people make is to suppose that
13:19
we live in a majoritarian system.
13:20
We don't. We live in a super majoritarian
13:23
system that let me just take off some of the ways in which that
13:25
is true. So the process for a bill
13:28
becoming law enables the president to veto a law that has
13:33
majoritarian support, right? Then it has to go back to the
13:36
Congress to receive 2/3 support, right?
13:38
So every step of the way there are certain bills that can only
13:42
originate in the House, revenue raising bills.
13:45
So there are all these limits on simple majoritarianism.
13:48
In some ways, the most stark and evocative 1 is the government
13:53
can't hurt you unless a unanimous jury of your neighbors
13:58
agrees. That is astonishing. 12 people
14:01
have to come together when the government tries to punish you
14:04
and listen to everything that's happened and say every single
14:08
one of us agrees that you should have to go to prison, right, or
14:12
pay the fine or whatever it is. Now, that's a far cry from where
14:15
we are now because the courts have undercut that basic
14:19
constitutional structure. But the extent which our
14:21
constitution is designed to be not merely majoritarian, but
14:25
super majoritarian, where unless there's an overwhelming
14:28
consensus that you shouldn't be doing that thing, the government
14:31
has no effective power to stop you from doing that thing.
14:34
It leaps off the page of the constitution.
14:37
And if we were more like that society, where unless you were a
14:41
direct and present threat to the peaceful existence of your
14:44
neighbors, they couldn't touch you, there will be so much less
14:48
than there is. It gets a little deeper than
14:50
that, too, right, Because you left out the Supreme Court.
14:53
And how do you get on the Supreme Court?
14:54
The president nominates you and the Senate confirms you.
14:57
No democratically elected official has anything to say
15:00
about it, right? Because remember, the president
15:03
was elected by the Electoral College.
15:04
The Senate was elected by the state legislature under the
15:07
original design of the Constitution.
15:10
And that's how you get on the court.
15:11
And once you're on the court, you could do damn well whatever
15:14
you want. James what's the single best
15:16
thing a Supreme Court Justice can say to the other branches of
15:19
government? To stop, and that's the only way
15:22
the other branches are forced to listen.
15:24
Absolutely. And give us a clear, rational
15:28
and persuasive explanation of why you get to do this thing.
15:32
That's right. Or stop.
15:33
That's exactly. Right.
15:34
And you mentioned something really interesting, which is
15:37
that our government's not meant to run efficiently, which I've
15:41
used in several explanations to people both in my world and
15:45
otherwise. And I'd actually love for you to
15:47
talk about that, really. Well, I mean, Clark kind of lays
15:49
it all out when he starts talking about how a bill becomes
15:51
a law. And you know, this is
15:53
Schoolhouse Rock stuff. We all know it.
15:56
But we if only point taken. But we don't think about it very
16:04
often, right? Because it's just structural
16:06
nonsense. But it's not nonsense.
16:08
It's structural, but it's not nonsense.
16:11
And it's not even checks and balances.
16:13
That's the phrase that everybody learns when they're young.
16:15
But if you go to Federalist 9, the actual phrase is partial
16:19
agency. And what you find is that each
16:22
branch has the ability to mess about with the authorities of
16:25
the other branches. And they do when they can.
16:30
But when can they? And isn't that interesting,
16:32
right? You get all kinds of answers
16:34
here. And when you throw it into the
16:36
Stew, if left to their own devices, people in government
16:40
can't accomplish much of anything.
16:42
Thank God. What can they accomplish?
16:46
Well, things that really need to be done tend to get done.
16:49
And apart from that, we're always playing from behind.
16:52
And, you know, American politics is a constant game of catch up.
16:56
Why didn't we solve this problem 20 years ago, is what everybody
16:59
says? Well, we didn't because we
17:01
couldn't because of the system that's designed for us.
17:03
And when somebody like Ross Perot, who is a good
17:06
businessman, near as I can tell, Phil's probably already shaking
17:09
his head. Not the worst when Ross Perot
17:12
shows up and says I'm going to run a miracle like a business
17:14
his. Father that's literally sounding
17:19
like he can't. He's not designed to do that.
17:23
It's just literally impossible. So every time you hear a man
17:26
saying he's going to run our government like a business, he's
17:28
lying because anybody who's gotten to that place where he
17:32
can say that knows it's incorrect.
17:34
He might. Not be lying, he might just.
17:35
Be stupid. He knows it's incorrect, he just
17:37
thinks the people want to hear it.
17:39
Yeah. Conversation about that, about
17:42
Bernie Sanders there and somebody was saying he's all
17:45
good, he's all measured. I go, I'd love to believe that.
17:48
I'd love to believe that he is just naive.
17:50
Maybe is a poor word for it, but you get what I mean.
17:53
I think nobody gets the position that Bernie's in without having
17:56
a very deep understanding of how some of this works and knowing
18:00
that what you're saying is just playing to your audience.
18:03
Well, that's what makes me think someone like Sanders is
18:05
malicious. They actually does know how to
18:07
game the system. There's something here in the
18:09
rhetoric of democracy. We hear this term thrown out.
18:12
We heard it in the election the other day.
18:13
If the outcome doesn't come out the way that my party or my
18:16
candidate wins, it's a threat to democracy.
18:18
It's all over, which I think is utter nonsense.
18:21
But they use the term democracy as stuff I like, and everything
18:26
I dislike is is undemocratic. And you see both parties doing
18:30
this, it's right. Yeah.
18:31
So you're talking about Sanders, but we've seen both parties do
18:34
it. And the the clearest evidence is
18:36
four years ago it was the Democrats say, well, look, this
18:40
is the result of democracy. And the Republicans say, no, we
18:44
were gypped and now it's the other way, right?
18:46
The funniest thing in the world is watching Democrats become
18:48
election deniers. Yes.
18:51
It happens every 4 to 8 years, you know.
18:53
How the hell did we get here? They've been scolding us for
18:56
four years on the evils of election tonight.
18:58
But this is interesting in that if you are convinced that you
19:02
are right, be you Republican, Democrat, or anything in
19:06
between, any Democratic outcome that flies in the face of what
19:11
you believe is correct must in your world be a flawed outcome
19:16
that there's something wrong with the muffler.
19:18
But there's not an anointed few who get to know what's correct,
19:21
thank God in heaven. Think about where we'd be if we
19:25
just acquiesced to those somehow super powered few who know best
19:32
what we should do. You're talking about
19:34
totalitarianism. When it comes right down to it,
19:36
we've cast our lines against that sort of thinking.
19:40
The price of doing that is that you don't get certitude, you
19:45
don't get an answer that we can all rally behind.
19:48
I happen to see that as a strength, not a weakness, a
19:51
feature, not a bug, right? It's best that we can't do that
19:55
sort of thing, because everywhere we see that
19:57
happening, it turns out to be a disaster in the end.
20:00
Literally everywhere. One of the hardest questions I
20:02
think of living in what we'll just call generically democracy,
20:06
right? Which is to say a country where
20:08
no one person or self appointed cabal of people get to say we
20:13
know what's best for everybody, we're going to impose it on,
20:15
right? It's a really hard question of
20:18
how much say to give to ordinary people, right?
20:22
Because HL Mencken has famously said that democracy is the
20:26
theory that the common man knows what he wants and deserves to
20:28
get it. Good and hard.
20:31
So what we've chosen instead is a representative form of
20:34
government, right? Vote for legislative
20:37
representatives. We have an Electoral College, so
20:39
we don't elect a president by. Pure, but we don't use it.
20:43
Well, yes and no. What do you mean?
20:45
To my mind, the way the Electoral College should work,
20:48
and James will correct me when I say this is what was attended,
20:50
but is that it should work like the legislature works, like
20:54
Congress works, that we elect people and their job is to go
20:58
figure out who the president is. Well, close.
21:02
Their job is to save us from any utter stupidity we might engage
21:06
in. Sure.
21:07
And. You and I argued this back when
21:10
Hillary was running against Trump.
21:13
The Electoral College should do its job because it was clear
21:15
that the majority of Americans didn't want either one.
21:17
Let the Electoral College do its job and elect neither.
21:20
Pick somebody else, please. But the Electoral College has
21:22
come to do something more. It goes back to your opening
21:26
comment, right? When you take a look at the
21:28
county map in the United States, and it's all red except for
21:32
these little blue outposts. Well, come to find out, the
21:35
Electoral College represents both people and places.
21:39
And that's really important because places make things like
21:42
food, which is what Clark was talking about earlier.
21:45
And if you just dismissed their interests out of hand, you don't
21:48
get any food, and that's going to be a real problem.
21:51
So what does the Electoral College do?
21:53
It takes the number of representatives in a state,
21:56
which means population matters, and then it adds 2 because you
22:00
get 2 senators and that has the net effect of boosting the
22:04
influence of very small states. So Wyoming that has a half a
22:07
million people still gets 3 electoral votes.
22:10
And you might think that that's not important, but I can name
22:13
you a couple of elections where it was incredibly.
22:16
And it keeps these places on the view of politicians as they
22:20
campaign for these offices. You have to take Nevada
22:23
seriously. For example, in this last
22:26
election, Iowa was in play it seemed for a while.
22:30
And these are places with very few electoral votes,
22:32
comparatively speaking, And they became incredibly important, my
22:35
state of Arizona, very important.
22:37
I think a big thing that has changed is the importance of the
22:42
proverbial smoke filled rooms. Right, let's go back to them.
22:46
Yeah, that's right. That's right.
22:47
And not just because you like cigars.
22:49
I am full square in favor of doing away with the process we
22:52
now have and going back to the smoke filled rooms of the
22:55
conventions. Drill down on this event.
22:57
I'm sorry. No, no, no, go ahead.
23:01
If you had to choose between two candidates for your party, and I
23:04
think we're stuck for the time being with A2 party system.
23:07
Let's just you know, I don't love that.
23:08
That's not going anywhere. That's right, we are.
23:10
So if you had to choose between somebody who has demonstrated
23:15
that they are incredibly adept at reaching out to people who do
23:20
not automatically agree with them, right?
23:23
Who can get 51 percent of a contentious electorate by
23:27
appealing to the people who already believe what they
23:29
believe, but then reaching out and saying, hey, you know what,
23:31
We may not agree on everything. Here's where we are have a lot
23:34
of common. And then they pull in the 51%
23:37
versus the people who are incredibly adept at stroking the
23:41
political erogenous zones of a smaller 2030%.
23:46
Like, you know what? If I get to be president, we
23:48
will do all the things to the people you don't like and you
23:52
will love it. I will be your avatar.
23:54
I will get even for you that's. Right.
23:56
Yeah, so up until 20 or 30 years ago, maybe not even that
24:00
recently, our system favored the emergence of the person who
24:04
could get through the smoke filled room and convince a bunch
24:07
of politically seasoned people have been through multiple
24:09
elections. I can get 51% of the American
24:13
people on my side. We left that in our awake.
24:16
And now what we do is we elevate to the candidacy of the two
24:20
major parties the person who can most vigorously stroke the
24:23
political Rojinism of 20 to 30% of the population, and they
24:27
become the nominee. And then it becomes a choice
24:30
between two manifestly unfit, objectionable, horrible
24:34
candidates. And we are left with the
24:36
absolute choice that we had to choose between.
24:40
That's right. But I ask you, would you not
24:42
have preferred if the Democratic Party said, you know what, Mayor
24:47
Pete, he's an interesting guy. He's really smart.
24:51
He speaks apparently 7 languages.
24:53
He doesn't seem to offend people when he does speak those
24:56
languages. Wouldn't that be something?
24:58
And the Republican said, huh, Condoleezza Rice, what's she up
25:03
to these days? She seems eminently qualified
25:06
for this office. Let's maybe run her.
25:09
And you could have a choice like that.
25:12
And I would submit that that's a good choice to have.
25:14
Way better than the show we just got, which is a dump no matter
25:19
how you look at it. Can you vote for either one of
25:22
these clowns with any charity in your heart?
25:26
I'm here to tell you I felt very dirty casting my vote.
25:30
Not going to tell you who it was for because what the hell is the
25:33
difference? I thought it for my wife so I
25:35
felt good but. You.
25:36
Know I did the right end route. I thought we assigned
25:40
responsibility for where we've come to because I got an answer
25:45
that will be different, I think, for most of yours.
25:47
What can we go around the table with?
25:49
That what are you asking? Who's most responsible for where
25:53
we find ourselves where instead of the candidate who is the most
25:57
politically appealing to the most vulnerable people in this
25:59
country, we have to choose between two candidates who are
26:03
the most appealing to some marginal, crack tacular minority
26:08
of people in our. I would lay the blame squarely
26:11
on the huge number of centrist voters who don't bother voting.
26:15
I've got a different candidate around the table.
26:18
I'll just say FDR. Not Roger Wilson.
26:25
It's close second. That's interesting.
26:29
I'm glad that somebody else got to go first too because I'm
26:32
sitting here thinking if I had to pick, it would be very off
26:36
topic, I guess, because it seems like the election now may as
26:39
well just be between the two biggest TikTok stars.
26:42
So if I were just to have to pick which, I don't think
26:45
they're squarely to blame, but let's just go with social media.
26:49
You're right, and I know whose fault that is.
26:52
I'm, I'm going back in time to stand next to my friend Phil and
26:56
say not only was it FDR, but it was everybody who thought that
27:00
there should be a New Deal because they thought the old
27:03
Deal was no longer good enough. They rose the stakes of winning.
27:07
That's right. And I laid the blame not at FDR
27:10
specifically, but at the feet of at the feet of him and everybody
27:14
like him during a certain period of our history.
27:16
So. You all have good answers.
27:17
They're all wrong. James will know, almost
27:22
reflexively, who's responsible. When I say James, tell me who's
27:27
a villain in this drama? Oh, the Supreme Court court
27:30
clerks answer to every awful question is the United States
27:34
Supreme Court, and he's not necessarily wrong.
27:37
You may. When I was a kid, I lived in a
27:40
suburb of Boston where you had a couple of acres of.
27:42
Which suburb did you live in? Well.
27:44
Why would you do that? Because I.
27:45
Lincoln, Massachusetts. Wrong side of the tracks.
27:49
Not with a prep. Now I know more about you.
27:52
This is the part that we cut out all.
27:55
Right. One summer, for reasons I don't
27:57
fully understand, we decided to have a couple of goats.
28:00
And the thing about a goat that you need to understand is that
28:03
if it gets into the room where the goat feed is, you will eat
28:06
absolutely every bit of goat food until it stomachs, explodes
28:11
and it dies, which almost happened.
28:13
And that's Congress, right? That's every political branch.
28:17
And so however much power you let them exercise is the amount
28:21
they will exercise. So the Supreme Court turns out
28:23
to be really important, right? And the Supreme Court has
28:27
struggled to articulate a coherent theory of the
28:33
distinction between speech and unprotected political advocacy.
28:40
And I actually don't think there's a bright line
28:42
distinction between those. Right.
28:44
So can you spend money to amplify your political message?
28:48
Of course. Is that speech not exactly
28:51
right? Could the government prohibit
28:53
you from owning a printer so you could get your message out about
28:57
whatever is you care about, like, you know, and the public
29:00
schools or stop the war and wherever?
29:04
No. So what the Supreme Court did
29:06
that let us all down was that in a series of so-called campaign
29:11
finance cases, Supreme Court, it didn't completely abandoned the
29:15
position, but it gave the government too much power to
29:19
prevent people from spending money to articulate a political
29:23
message, spending money to support a particular candidate,
29:26
spending money to convince the public that this path was better
29:30
than the other path. And what it basically did was at
29:32
the end of the day, it burned down the smoke filled rooms.
29:35
So now if you're a candidate, where does most of your money
29:38
come from? It doesn't come from your
29:39
political party. It comes from a bunch of
29:41
jabronis who are sending in ten 20-30 dollars.
29:45
These are the people whose glands are exposed.
29:47
You know, send me an e-mail and I'll send you $30.00, right?
29:49
Well, I mean, look, This is why barriers to entry have become so
29:53
high. People in power make sure that
29:56
people out of power stay where they are because that's part of
29:59
staying in power. And I lay the blame at the
30:02
Supreme Court too, in a very specific way.
30:04
They keep going after these things as if they were free
30:07
speech issues, but they're property rights issues, and they
30:10
just dismiss it out of hand as if it were never the case.
30:14
So. What are the things because?
30:17
Yeah, no, I get it. If I have $1,000,000 and it's
30:20
mine and I got it legitimately and I want to give it to you so
30:26
you can run for political office, I got a problem.
30:29
And so does everybody else with a certain amount of money or
30:32
more, which is why Kamala Harris keeps asking me for five.
30:34
Dollars. Even after the election is over,
30:37
she apparently still needs $5. So can I just make something
30:42
clear? It is so disgusting when Elon
30:45
Musk spends money to get Trump elected, but not at all
30:47
disgusting when George Soros. Spent that, Yeah, exactly so.
30:50
That's righteous money be. Clear about that?
30:52
Right, somehow it's completely different.
30:54
There are people who would hear what I just said and go, yeah,
30:57
obviously that's right, right. So I want to shift gears as time
31:01
goes on here. President Trump has been elected
31:04
one of his. President-elect Trump.
31:06
What baffles me is largely speaking, he's a pro market
31:12
president, at least in relative to the alternative.
31:16
But he's a protectionist. He.
31:17
Absolutely. Is so, Mikhail, this question
31:20
goes to you, the supply chain guy.
31:24
Trump has said that if elected he would impose all sorts of
31:28
tariffs. In fact, he argued at one point
31:30
that he would replace the income and payroll taxes with tariffs,
31:33
which I say mathematically isn't possible.
31:36
But from your perspective on the supply chain side, what does
31:40
this mean for US imports? The way that I've been answering
31:43
this question on social media where I see constantly people
31:46
saying things like, I hope the small business in town that
31:49
voted for Trump goes out of business because of tariffs.
31:52
I don't think they're realizing that these tariffs have been
31:55
here for quite a while. Every Chinese made good that you
31:59
have has had a 25% tariff on it for the past two years. 20. 5
32:03
percent, 25% and one of the conversations I had earlier was
32:07
we're currently importing about $102 million worth of goods.
32:11
The reason why we got the business was because we were
32:13
able to consult effectively on how to mitigate that tariff as
32:16
much as possible because it's all coming out of the good news
32:19
is it would have cost about a billion to develop here, but
32:21
all. Right.
32:22
I got to stop you there. How do you mitigate the tariff?
32:24
There's creative solutions. For example, one thing most
32:29
people get is. Always a loophole.
32:32
Fair, not a loophole. After about a year's worth of
32:35
conversations, I get what's called a packing list and a
32:38
commercial invoice for this project.
32:40
And I look at both and I see both.
32:42
And I say, OK, this is $102 million worth of goods.
32:44
How much did you guys pay for your packaging?
32:46
And immediately an entire boardroom goes, what?
32:49
I go, how much did you pay for the packaging of the crates and
32:52
the metal bars and everything else?
32:54
And then specifically, they wanted this to be in a certain
32:58
term where they're delivering it over to the port.
33:00
How much did you guys pay for all this?
33:02
No one knew. These are high end professional
33:04
finance people. So we go back to the seller.
33:07
I probably shouldn't publicize this ultimately on the podcast,
33:10
but it is what it is. And the seller goes, I don't
33:12
know. And I go, OK, well what are we
33:16
going to do here? She goes, well send me how much
33:19
you want the packaging to cost go no problem at all.
33:21
We need to cost about 40%. And I have a WhatsApp.
33:26
We chat conversation of this happening all the way and I sent
33:29
her the commercial invoice and she emailed me right back with
33:33
her signature and the company letterhead and everything else
33:36
that we need. Now, how much did the packaging
33:39
cost? I mean, legitimately
33:40
questionably about 30 percent, 40%.
33:43
I mean, this is some heavier packaging and that sort of
33:45
thing. But the larger point of this is
33:48
that while this company and this project is relatively small and
33:52
this company's big financially, these larger companies are not
33:55
dumb. They've known this for many,
33:57
many years. And a lot of the cost and a lot
34:02
of the inflationary prices that we see these days are not just
34:04
from the dollars that we printed that now we need to cost us.
34:08
It's from these companies anticipating the tariffs that
34:10
are ultimately going to be coming down.
34:12
Not to mention the fact that Biden, right before he dropped
34:16
out with the full support of Kamala, came out and said all
34:20
this building material is going to be tariffed if I get elected,
34:23
40% on all kinds of steel. Same as Trump's stopped USX from
34:28
selling the Japanese company, which I don't know what's
34:30
happening there now. It's questionable, but it could
34:33
save 20,000 jobs in our fun city of Pittsburgh as part of it.
34:37
There is no results that would have worked out here where we
34:43
would have seen a diminishing in tariff or duty or cost.
34:48
These were coming down the pipeline and an opinion that
34:50
people probably may be a little bit surprised.
34:53
China deserves this one way or the other.
34:56
We can talk about how COVID came about and and whatnot.
34:59
And I know in one of my first episodes, I mentioned that I'm
35:02
not going to go into the conspiracy theory around this,
35:04
but I do believe that there's an opportunist in any government
35:07
out there. And you don't need to
35:09
communicate overly well with another government to make sure
35:11
that you're OK. And I think in some regard, we
35:15
need to put a little bit of pressure on those.
35:18
And in addition, what it ultimately renders is a
35:22
response. And what you're seeing now is a
35:24
lot of these big companies, you know, from your Walgreens that
35:27
are getting procurements from those small companies that are
35:30
out there, they're going to other places.
35:32
And those other places are basically just buying from
35:35
China, importing down. And they have a comparative
35:38
advantage. And try calling Ensenada right
35:41
now. Try calling a factory in
35:42
Ensenada, not speaking Mandarin because they're all there.
35:46
And Mexican imports are not the same tariffs that Chinese
35:50
imports are. So whoever gets elected, these
35:53
companies have already taken proactive steps to both avoid
35:58
and benefit from what's coming up.
36:00
And that's all the time we've got this week on words and
36:02
numbers until. Next time, send us e-mail
36:05
wordsandnumberspodcast@gmail.com. Try to be nice to one person who
36:09
doesn't deserve it till next week.
36:11
Can't take it easy. See you next week, James.