Bulwark Takes - Canada’s Break With Trump Just Got MUCH Bigger | Receipts Live

Episode Date: September 18, 2026

A note for podcast listeners: Receipts with Catherine Rampell now has its own podcast feed! This is the final episode that will appear in the Bulwark Takes feed, so search for “Receipts with Catherine Rampell” and follow or subscribe on Apple Podcasts, Spotify, or wherever you get your podcasts to make sure you don’t miss the next episode.Catherine and JVL take on Canada’s accelerating break with the United States, Trump’s self-inflicted inflation problem, and the dangerous game unfolding between the White House and the Federal Reserve. Plus, DOGE somehow managed to spend $9.5 billion paying federal workers not to work, while government data that could expose tax cheating is quietly disappearing.

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Hey, everyone. This is Catherine Rampel Economics Editor at the Bullwork. I just wanted to give a quick note for everyone who is listening to the Bullwork Takes podcast. Receipts is now its own stand-alone podcast. That means this episode that you are watching or listening to is the last episode of receipts that you'll hear within the Bullwork Takes podcast feed. And to get more from me and JVL and the rest of our buddies in the future, you will need to subscribe to receipts with Catherine Rampel on Apple Podcasts, Spotify, or wherever you get your podcasts.

And until then, thanks so much for listening and enjoy the show. Hey, everyone. I'm Catherine Rampel, economics editor here at the Bullwork, joined, as always on Fridays by my colleague and pal JVL, who is once again modeling our excellent merch that we offer here at the Bullwark, please. I love the shirt so much. Yes. Honestly, a friend of mine, unprompted yesterday,

told me that she was going to buy the capitalist wing of Antifa shirts as well, which maybe next week, I'll model that for you all. You should. That is a shirt designed for you. I think it is. It definitely is. We are going to chat about all sorts of other things that were designed for me, including the economic policy platform of the Canadian government.

So we're going to chat a little bit about Canada and how Canada feels about the United States, how Canada feels about Mark Carney. Yeah, exactly. They're deepening relationship. Canadian's deepening relationship with the EU. What all of that means for both of our economies, all three of our economies, really. We're going to talk about the Fed and how Donald Trump is hot dog manning himself because he's wondering why the Fed was forced to raise rates.

Who's responsible for this? And we're going to talk about some other fun stuff, including some government data that's being kept from you. Well, we have theories about why. and maybe if we're lucky, we'll talk a little bit about our old pal Elon Musk. So JVL, as I said, I want. I take it from your topic rundown that all the things we're going to talk about are great positive developments. They're very cheerful. They're all very, very cheerful.

I mean, at the very least, it's cheerful for some people. So Mark Carney, who is our neighbor to the north, just got the highest appropriated. approval ratings in Canadian history, 70%. So shout out to Mark Carney. And this is interesting for a number of reasons, including that Mark Carney is like the Catherine Rampel fever dream of what an economic leader should be. He's like, he was previously the governor of the Bank of England. He's a trained economist.

He had also worked as an investment banker. That's neither here nor there. But generally, not the kind of thing on a. TV that you would expect to propel someone toward popularity. And of course, he... It's in a lab for the two of us. Exactly. Exactly.

And apparently for the Canadian populace, because he is implementing a pretty darn strict neoliberal agenda, lots of things that we were told the people, the populists worldwide no longer wanted, you know, privatizing airports and streamlining government and things like that. And he's still very, very popular. popular. Now, to be fair, he's probably not popular because of those things. He's popular because he stood up to Donald Trump. And the world, including the world of Canada, is hungry for heroes.

So I'm curious to hear your thoughts, JVL, on, on, you know, how you think this works out for Carney and for what we are learning about, which is the potential for Canada to become an associate member of the European Union. I mean, how much time do you have? Because I got a lot of thoughts on this. Oh, please, please. And I think we have a lot of viewers in Canada who want to hear your thoughts. I think you have to start by understanding that Mark Carney is a wartime president.

And Canada sees itself totally reasonably as facing an existential conflict against a now hostile superpower to it south with which it shares a border. And I want to, I want to dial us back here one second by giving an unrelated anecdote, which has been driving me to distraction all week. Three days ago, the president of the United States sent out a tweet on truth social, the social network he owns, in which he baldly and specifically accused to the Democratic Party of participating in a plot to assassinate him in the summer of 2024. And he said that the Democratic Party was behind this assassination plot. In a normal, sane world, this would have been the most explosive news in American history.

It would have been banner headlines on every single newspaper in the country. It would have kicked off crazed reporting and investigations. would have led the evening news because we would have been in a position where one of two things was going to happen. Either it was going to turn out that this was true and the Democratic Party did participate in a plot to assassinate a presidential candidate, in which case a whole lot of people were going to go to jail and there was going to have to be like mass reorganization and purging of the Democratic Party from the fascist violent elements within it, or it was going to turn out that the president

the United States is either insane or a liar. And should be... Those things are not mutually exclusive. But yes. Not mutually exclusive. But instead, what happened in America was everybody looked away and just pretended it didn't happen. And so, like, as a thought experiment, I want you to begin by thinking, what would have

happened in America if everybody just took the words of the president of the United States seriously, right? And we could see, like, it would have set off this large chain of events. because in America, we live in an insane asylum and we've become acclimated to this and we no longer treat things as having meaning. We just, again, looked away because it would have taken us to uncomfortable conclusion. Nobody wants to have big investigations. Nobody wants to say out loud that the president is a psychopath, right? Because that's really indelicate and, you know, you look like one of those never-Trump crazy people.

The rest of the world, however, has faced a version of that for the last two years. the president of the United States said that he wanted to annex Canada and turn Canada into a member of the United States and that he was opened. He wouldn't totally rule out. He didn't think using force would be necessary, but he didn't completely rule it out. And he said that it was vital to America's national security. And it was vital to America's national security that we annexed Greenland, which was part of Denmark. and the rest of the world acted like these words had meaning and like they had to react accordingly. And that is what Mark Carney and Canada have done. And the reaction has been a very, very serious one.

I mean, first of all, they swerved and elected Carney, which nobody thought they would. And that was entirely because of what Trump did. And secondly, Carney has absolutely moved. to realign Canada from a north-south alignment to an east-west alignment. And he has made overtures to the European Union. He has made overtures towards China. He became the first Canadian Prime Minister to visit China in like 20 years. And what you've seen also is a total unity of purpose.

So earlier this week, Canada held a big investment summit in Toronto. They brought in foreign investors, people from sovereign wealth funds. CEOs, they're looking to attract about a trillion dollars in investment. And the most notable thing is this was organized by the current government. And the closing speaker was Stephen Harper, who is the most popular conservative party prime minister in Canadian history. And Harper and Carney are totally aligned. This would be like having Barack Obama and George W. Bush holding hands in 2010.

And that's why he's at 70% approval. It's because everybody in Canada just treated the words of the American president as if they mattered. Yeah. Well, they, I mean, they should, presumably. They should. Right. No, this is, again, I'm saying because they are not living in a sane asylum. We are.

Right. They're not desensitized. Yeah, they're not desensitized. And they shouldn't be. Because when you're talking about your sovereignty as a nation, like when it's a nation, you don't have that luxury. You're like, we're decadent. And so we, or foolish or whatever, we can have a big debate about that. But it is very important to understand.

So he leaves this summit. He goes straight over to Europe. They float the idea in a speech about becoming an associate member of the EU, which is not a thing that exists. They're looking at the EU is considering making this happen. He has already begun shifting Canadian defense spending away from America, which is also something that Europeans are doing. this is a, you know, again, these are people just preparing for the breakup of NATO. And when you talk to people in defense who were bullish on the idea that NATO could last past Trump, and they would always say, well, it's about interoperability.

You know, they're all so reliant on American military systems that they really don't have any choice but to stick with us. And that's all shifting. You've seen huge, huge growth in the European defense sector over the last two years. The Canadians are going to throw in with them. they are no longer going to be interoperable with America in 10 years. And all of their spending is pointed in that direction. And at the same time, reaching across to forge better ties and better relationships with China.

And Canada is in a really unique position by dint of its geography and resources to be able to be a counterweight to America in a multipolar world order. It's a world order where it's not just an American hegemon. It's not just the duopoly two superpowers, China and the U.S., but it's truly multipolar, right, where the EU has decided to be, you know, come together and act as a true global force. Their economic throw weight is about the same as America's, frankly, to put them all together. And to have Canada right there on northern border working on both sides of that as, you know, close to the EU but also. able to draw closer to China when necessary could cause us no end of headaches. And, you know, we are going to wind up isolated and alone. And we deserve it because that's what America, the American people chose. Yeah. And I think that's one of the concerning things.

We got a 10 minute monologue. I should stop. But it was a good one. Hey, friends, Americans living abroad can legally vote in the U.S. election. Register or get tailored support at vote from abroad.org. Look, state deadlines are super close. so don't waste another second. Go to vote from abroad.org now and click request my ballot. Ask to receive it by email. All you got to do is fill it out and send it back in. Don't miss this chance to shape the future.

Don't delay. Vote from abroad.org. And I think that's partly what's concerning about all of this is that this is not just this momentary disruption in our relationship between the United States and Canada. This will be enduring. And, you know, this is largely anecdotal on my part, but it is backed up in polling data that Canadians are mad not just at Donald Trump. They are mad at the American people. And they think that as they should be, as they should be, they think that the fact that we elected him not once, but twice, you know, once maybe a fluke, right?

He lost the popular vote then. He lost the popular vote. People didn't realize they were just taken a chance. The 2024 election is so important. Right? Because that is the, no, no, America saw, and they didn't like, this is the other thing about 2024. I'm sorry, I'm interrupting you because I'm just like on a, I'm just fueled by hate fire.

The thing about 2024 isn't even that America got through a first Trump administration and they sort of lucked into being unscathed. We had a global pandemic in which a million people died and then he attempted a coup. Mm-hmm. I mean, we got the worst case scenario. And still, and they got the worst case scenario. Then they got a totally fine Democratic administration, which did not force trans surgeries on everybody's kids and did not go into a global depression or anything like that. They got a pretty okay, very normal baseline, median Democratic administration in the intervening four years.

And the Americans then said, by increasing his vote share. Yeah, we want Trump again. The rest of the one can't ignore that. Yeah. And I think we have some data actually from some recent polling showing that Canadians are more likely to say that they share more in common with Europe than America. The blue bar here is the sheriff saying that they have more in common with Europeans. The red bar is the United States. They're right.

I don't know if Matt, if you have the other charts. but like we also have some data on, yeah, half of Canadians support joining the European Union. And then that Canadians, at the very least, overwhelmingly support closer integration with the European Union. That's the key. Because they don't really want to be part of the European Union. They want to be tightly.

And that's why actually I think the associate member is such an interesting and strategically deft move. Because it's undefined, right? We can define it any way we want to, if you're Canada and the European Union. And you can define it in such a way that both sides get the best of all worlds. Right?

If it's joining the European Union, that is so freighted, you know, there's going to be a lot to, well, you like these conditions, but you don't like those conditions. Again, Carney has been an incredibly smart strategic thinker. Yeah. And he's been fantastic on this.

Yeah. And he's a wartime president and good for him. Good for Canada. Yeah. Can I ask you a question? Yeah, sure. Go for it. So on the next level, like a month ago, I was rhapsodizing about how much I love Mark Carney. And I said, boy, I wish America was the kind of place where somebody like Mark Carney could be elected president. And Sarah said, absolutely somebody like Mark Carney could be elected president in America.

And I just laughed at her. No. Who's right? Only in West Wing. only in the West Wing where Ed Bartlett. Jed Bartlett was a Nobel Prize winning economist.

This is the fantasy of all fantasies. Someone like that could only get elected in Canada, not of the United States. I'm sorry to say. So I think it's very unlikely. I think all of those parts of his biography that I ticked off, including the fact that he's an economist

and a central banker and an investment banker, I think all of those things would be just like such a net negative in the United States right now. Unless maybe like there were some other bully bullying us, I don't know who that would be at this point. And then we would have our wartime president and maybe someone with that background could get elevated.

Could prove their metal, but I think it's unlikely. So Carney, I think, is a good deal more liberal, just for being his own instinct than you and I are. but he is pursuing neoliberalism in this moment. And he has the political freedom to do that precisely because his opposition to America is like the base populist fact. Right. I mean, that is, at the most basic level, Canadians want him to protect Canada. And that frees him to pursue these technocratic neolib policies that people like you and I like.

Yeah. Yeah. He wraps himself on the flag. He's going to be in the comments. It's like, Jay Powell for. president. Yeah, baby. Well, you know, it is interesting. I forget who pointed this out. I think it was Nero Tandon pointed out that like the three strongest political bulwarks we have fighting Donald Trump are all the former investment bankers. So Jay Powell, also a former investment banker, Mark Carney,

and McCrone, all former investment bankers. So this is my face melting. I know, I know. Who would have guessed. Those of us who were around who have covered the 2007 financial crisis never would have guessed as much. But it will be the I bankers who save us. The I bankers who save democracy against all of the odds. Yeah, I don't think we could elect someone like that here. But you mentioned JBL that the American people put Donald Trump back in the White House, despite all of the baggage, I think is a euphemism for everything that had happened in Trump one. The thing is they are not so hot on this guy right now. They put him in place. They reelected him because of inflation, right? That was the thing that people were so mad about during the Biden era, despite all of the regular normie stuff that we were just discussing.

They were really, really fixated, I think understandably, on high prices. I think we have a little clip from Harry Enten at CNN talking about how Donald Trump is faring in terms of favorability on that issue right now. How do you get this low? How are you breaking records that no other president possibly was able to achieve? Well, the way you do it is by being negative across all of your partisan groups. Trump's not approved around inflation among Democrats, 95 points underwear. That's uniformity, basically.

Independence, 74. I mean, come on, what are we talking about here? And among Republicans, even Republicans have turned against the President. United States on inflation minus four points. Negative, negative, negative. Yeah, so Donald Trump. I'm just trying to do the math in my head as to what the actual split is to be negative 95. I mean, that's 98 to 2 or 97.5 to 2. Yeah, that was the net, right? So yeah, it could be. The net is not. It's pretty striking. And actually earlier in that segment, Harry mentions that Donald Trump now has the lowest rating on inflation of any president ever,

including Jimmy Carter. Wow. This is really striking. Donald Trump, again, one office, or at least one office again, largely on a promise that he would deal with inflation. He would reverse inflation against the odds. And instead now has the worst approval rating on record as a president for how he. he has handled inflation.

And that is deserved, to be clear, because inflation had been decelerating when Donald Trump got into office. It was still too high, but it had been coming down and had been cooling. And it re-accelerated around Liberation Day last year, April 2025, because he put in place the tariffs. And then, of course, in addition to the tariffs, we have the war, which has raised the cost of energy. Right before we started this, I think I saw that energy or oil prices were, had

dipped below $100 a barrel. I don't know exactly where they are right now. But they're around that level. And of course, that feeds into all sorts of other prices for things that businesses and consumers buy. So Donald Trump is single-handedly responsible for re-inflating our price growth. And, you know, he's getting his just desserts, I think is what it comes down to. Hi, friends and fellow students.

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Like it was in what is our inflation right now? 3.9. 3.4%? 3.4% right? Year over year, yeah. It is apples and oranges. The difference is that Jimmy Carter didn't choose inflation. Yeah.

Right? I mean, we had an oil shock. There were all sorts of exogenous events happening around the world. world. You can say that the Carter administration should have dealt with it in some better way. I'm not a student of the economics of the 1970s. But this is a case where Trump had a couple buttons in front of them, which had like glass over top, you know, will cause inflation. And he's just like pushing them and pushing on and pushing them. And so it is absolutely deserved because everybody knows how to stop the inflation, and he doesn't want to.

Yeah. Okay. Well, he especially doesn't want to, as evidenced by his reaction this week to actions by the Fed. So the Federal Reserve, as our viewers and listeners probably know, met this week they decided to raise interest rates, which is a thing that the Fed does when they are worried about inflation. And Donald Trump, of course, was apoplectic at even the... prospect of raising interest rates. He thinks rates should be lower. And he's real mad. He thinks that,

well, actually, why don't we play what his interpretation of events this week is? Talk to Kevin. And I said, you might as well vote with the board because it's not going to matter. The board is very hostile. They're very political. They're doing the wrong thing. They're a bunch of politicians or people put on by politicians. And it's a shame because it's too high an interest rate. Despite that, the country barrels through everything because we're doing so well. But the interest rates are too high. We should be paying the lowest interest rate anywhere in the world because we have the strongest credit.

If we wanted to get rid of deficits, which we could do with a swipe of a pen with every country, we'd make a trillion and a half dollars a year. We'd pay off our debt. We'd do all sorts of things. But we haven't chosen to do that. But at some point we will. Interest rates are two. The board is very hot.

Can you explain what he means there? By the, with the swipe of a pen. I assume. I don't know. I don't know that he knows what he means. So he is mad that interest rates are high and are rising. This is how I would unpack what he said. He's mad about that.

That part is not surprising. The thing that I have been wondering about is how Kevin Warsh, whom Donald Trump just appointed to be Fed Chair, was going to navigate this very difficult position. that he was in, which is doing what he needs to do to get inflation down and that he is, like, constitutionally biased to do, which is having tighter monetary policy. He's known, he's been known for basically his whole career as an inflation hawk, someone who looks at one given set of data and is like more prone than others to say, let's raise rates, let's, let's tighten monetary

policy because I'm really worried about inflation. How he's going to do all of that and not get Trump furious at him. And by furious, I don't just mean like Trump throws a catcher bottle against the wall or whatever. I mean, Trump deploys the full arsenal of government weaponry that he deployed against Jay Powell, Kevin Warsh's predecessor whom Donald Trump had also originally appointed to that position. And if folks may remember, Donald Trump bullied, threatened, harassed, said he was going to fire Jay Powell, launched a criminal investigation, a bogus criminal investigation into J. Powell. And so my question from the get-go has been the way that Powell responded to that kind of pressure, that kind of lawfare was really admirable. And I think

most people don't have that in them to say, yep, you're going to threaten me with all these things. You're going to try to investigate me and maybe indict me, who knows? And I'm going to keep doing my job. Most people, I don't think have that strong of a backbone. So I've been wondering, like, how is Kevin Warsh going to handle this? Because he's going to find him. in exactly the same position. And I think what we've learned is that Kevin Warsh, well, from public reporting and those comments from Donald Trump amongst others, Warsh's approach has been to talk to Donald Trump all the time, which is like very, very unusual for the Fed Share to be talking all the time to the president, the Fed Shire supposed to be independent. Is that good? Do you think

that's good, Catherine? No, it is. Well, I don't know. I mean, maybe that's the best strategy he has available, I think in normal times that would not be good, but he seems to think that this is how he can handle the president. He can do his job, Warsh can do his job and handle the president by like managing expectations or whatever. The thing that I'm worried about is not just that they're talking, it's that Donald Trump's takeaway, whatever Warsh is saying, Donald Trump's takeaway is that Kevin Warsh wants to cut rates and the rest of the board won't let him. That is what Donald Trump said in that clip we just played, that's what he said in the past. He says, Warsh is a good man. Note that Donald Trump used very similar language when he had first appointed J. Powell, when Powell

wasn't adopting Trump's preferred policy decisions. He said Powell's a good man. I think Powell got like a seven or eight month, you know, sort of honeymoon period where he was doing things that Trump didn't like, but Trump wasn't lashing out at him quite yet. So, you know, it sounds like Donald Trump's takeaway is, okay, Warsh wants to do what I want him to do, which is to cut rates, but he can't because the rest of the board is hostile and political. So what does that tell you Donald Trump will do when he perceives someone as hostile and political? We know that he has already repeatedly tried to fire Lisa Cook, who was one of the governors of the Fed. The Supreme Court stopped him last time around. He's trying it again. And I have been hearing concerns for months from people

sort of close to the Fed that Donald Trump may also try to go after some of the other members. So Jay Powell, in a break from norms, has decided to stick around as a governor, even though he's no longer the boss, he's no longer the chair. He's still on the board. We, you know, so he gets a vote. Presumably Donald Trump has not forgotten his grudge for him. And then there's Michael Barr, who is another Fed governor who used to be vice chair for supervision. Today, a report was released, or at least teased, from another Trump appointee on the Fed board, Michelle Bowman, about what happened with Silicon Valley Bank failing. I think we have some of that.

So this new report blames bank supervision. And look, that may be true. I haven't read the report yet. I don't know whether it makes a compelling case. My concern is that this will be used as pretext to fire Michael Barr, another Fed board member, that basically the Trump administration has been sniffing around for ways to oust people that it considers hostile and political to Donald Trump's agenda. And this is going to be ammunition, whether or not the facts of the report or the analysis in the report are correct. So that's,

That's really where I'm worried things are going. You know, whether Warsh is deliberately throwing people under the bus, I don't know. But certainly, and I don't want to suggest that he is, but certainly Donald Trump's takeaway from his conversation. Trump thinks he is. Yes. Trump thinks that the real problem is not, at least for now, the real problem is not Kevin Warsh. Kevin Warsh is like being bullied or something into voting for rate hikes, even though it was

a unanimous decision. to raise interest rates. So that's where I'm really worried about what's going to happen in the next few months. So this is, so you and I have been speculating for months now, like how this would work, and what Warsh's plan was. And I think now we see it. His plan was to raise rates, but blame the rate hikes on everybody else and to represent to Trump, boy, boss, man, I wish that we could cut the rates.

you know, we really should be cutting the rates. But, I mean, have you seen these people? They're horrible. They're all DEIs and Libtar Democrats. And I mean, if I didn't have them, then, you know, then maybe. Well, maybe you could do something about that boss. And then simultaneously, he hopes that the Supreme Court upholds the federal society's most sincere belief, which is that Republican presidents can do whatever they want,

but they can't fuck with the money. And so he will hope that the Supreme Court prevents Trump from doing the things that he is signaling to Trump that he would like the president to do, which will then leave him free to kind of conduct monetary policy in a normal-ish way. That seems like an incredibly complicated and dangerous game. How does the replacement schedule for Fed governor's work? Are they all undefined terms? Like the chair is a 10-year term. Is that right? The chair is a four-year term.

Four-year term. I forget how long the governor positions are. They're like 16 years or something, but people usually, but they're like the 16-year increments are fixed. And so if you come in in year 15, you have to get reappointed at your 16. I don't know. I may be, somebody correct me if I'm wrong about how many years they are. We're sorry, 14 years. Thank you.

14 years, 14 year terms. And the terms for the governors are separate from the terms for the chair and the vice chair. So that's why Jay Powell is able to stay. His term as chair is over, but his term as governor is not. And normally, like, who wants to stick around after you've been demoted? That's why I was saying, like, if you're unusual. Somebody else would come in, if Powell had left, the person were appointed to, him would have been entering on his year of that term and then needed to be reabiding. Gotcha.

Okay. Got it. Look at this. Learning things from receipts with Catherine Rampel. Yeah. So look, to be fair, I don't know what Kevin Warsh is saying to Donald Trump. None of us do. I think Kevin Warsh owes the American people more information about what he's saying to the president.

you may recall that when Donald Trump summoned, again, Ward's predecessor Jay Powell to the White House, the Fed was so concerned about even the perception of politicization of that job that it released a statement saying, yes, Jay Powell went to meet with Donald Trump. This is in Trump's first term at Trump's request. And they had like a good discussion or whatever. and it concluded with some language that was like, and Powell and the chair said,

like, the Fed will continue to conduct monetary policy as it sees fit in apolitical ways. I just remember there was some reference to, like, them being apolitical or non-political or something like that. Like, the Fed really wanted to make sure that there was transparency here, that there were no rumors flying around,

that they were, like, secretly in cahoots and that the president was in charge of the money supply. And the reason why that matters is not that, like, it's just about propriety or whatever. If the head of state, if politicians are in charge of the money supply, that's how you get much worse inflationary outcomes. And this is not a theoretical thing. We've seen this in Turkey, in Venezuela, in pre-Euro Greece, in Argentina, even arguably

in the United States during the 70s, when presidents leaned on Arthur Burns, for example, to print more money, to have looser monetary policy. So the perception that the supply of money, that the central bank is independent, is just as important as its actual literal independence. So they were really freaked out about that. This time around, Kevin Warsh is apparently talking to his buddy, Donald Trump all the time. I think Trump is called, based on the reporting I've seen Warsh, excuse me, Trump is calling Warsh rather than the reverse. I don't know if that's always true, but I will take it at its word. And Warsh was asked about when did he last talk to Trump during the recent press conference?

He would not answer. Trump, of course, said during that pool spray that he had talked with Warsh. And this is when he said, like, Warsh wanted to cut rates but couldn't because the board is political and hostile and whatever. And I told him to go ahead and do it. Go ahead and raise rates because, like, you can't fight them. So I do worry about the perception here, the actual political influence. and what Warsh's out is. Because one thing I haven't mentioned

is that they raised rates this week, but a majority of the committee members who set rates predicted that they would have at least one more rate hike by the end of the year. So it's not like this is one and done. Warsh is going to have to go through this again, probably maybe next month, maybe in December, and I don't know how he's going to handle it.

Let me ask you an uncomfortable question. Hi, friends and fellow students. Americans living abroad can legally vote in the U.S. election. Register or get tailored support at votefromabroad.org. Look, state deadlines are super close, so don't waste another second. Go to vote fromabroad.org now and click request my ballot and ask to receive it by email. All you got to do is fill it out and send it back in. Don't miss this chance to shape the future.

Don't delay. Votefromabroad.org. what if what is what if warsh is doing actually the wisest thing like it's morally compromised but what if this is actually the best way to truly insulate the Fed and the Fed's power from Trump and it's to pretend to be with Trump to throw the blame on the other people and trust that the Supreme Court will protect those other people. Because I get a sense that we are so far out in the undiscovered country at this point, that financial markets is viewing this are likely to take away from it. The lesson not that like, oh, it's bad that Warsh is communicating constantly with the president,

but actually maybe be reassured that Warsh seems to be managing the president. and so is able to raise rights still. And so much of this is, like, you know, like four years ago, this would have been red-like crisis because of the message markets received from it. But now having seen exactly how authoritarian Trump is, this gets perceived by markets in a very different way. I think it is.

I think exactly what you are describing is the case that markets don't seem particularly concerned. It's terrible, by the way. Yeah. Like it's a sign of deep decay. Yes. And I do think Warsh has no good options here. Because, again, Donald Trump has basically forced him and the Fed into raising rates.

As I wrote about in my newsletter this week, that Donald Trump is to blame for the fact that they had to raise rates because Donald Trump has juiced inflation. And Warsh has a bunch of bad options. I don't know. I don't know what I would do if I were in his shoes. if he just doesn't take Trump's calls and sort of acts a little bit more like Powell. And I don't think Powell rebuffed the president, but the president took it as an insult, it seems. That maybe that'll inflame things further and maybe the best way to deal with it. I think he thinks. I don't know.

But I think what he thinks is basically what you describe, that the best way to deal with it, the best way to safeguard the Fed's independence is to sort of like manage Trump and then do the job. Except there are a lot of people in the past who tried to manage Trump, right? Basically, that was the story of Trump's whole first term was all of these adults in the room who thought that they could manage Trump. And sometimes they actually did. They, you know, there were stories about Gary Cohn swiping papers from Donald Trump's desk that would have, like, you know, torn up a trade agreement or whatever. There are other things that they did to undermine him. But in the end, he still tried to foment an insurrection.

So this is where it's honestly, it's just like the Canada stuff, right? It is you, it can be comfortable to live in a house of lies where you're constantly like, and you can talk yourself in and you can see it. Like, we just did it. You can talk yourself into saying, look, we have to be realists here. The man is president. Elections have consequences. We want to insulate the Fed.

It would be bad if Trump really did go in and put Kevin Hassett in charge of that or something like that. So we've got to we got to live in the world as it is because this stuff is deeply important. and a lot of people's lives will get hurt if the Fed loses independence. And so we have to lie and pretend and make believe and accommodate. On the other, you know, and so you can make a reasonable case with it. On the other hand, like, you're also trusting in a bunch of other institutions backstopping you, like the Supreme Court. And you do see that eventually there are bills to be paid for this, right?

And this is, you know, Gary Cohn stopped Trump from doing a bunch of, of crazy things that would have heard America and that was good, it also resulted in Donald Trump being reelected. Yeah. Yeah, I don't know. Very hard. Very hard. All right.

Let's talk about some other thing. We need a moral philosopher. We need Chey Diannege to help us figure out what the right course of action is here. Is it a moral philosophy? I mean, I don't know if it's about philosophy or if it's just about like gaming out the strategy. Is it about game theory, you know, like, or probably. which...

I mean, we get two very different answers depending on which academic we brought in to talk to this about this. Yeah, like in the case that you talked about, the proposal that you gave for Kevin Warsh, like maybe he can manage him to protect the Fed's independence. Maybe, and maybe that's...

Warsh thinks that's his best shot. It's also very dangerous because it could backfire if Donald Trump thinks that what's standing between him and, you know, money printer go Burr is the fact that the other members of the Fed, just don't deserve to be there and they should be fired.

And then who is Warsh going, if that is what's he doing, you know, who is Warsh going to scapegoat at that point? So I don't know. I don't know. I do not envy any of these people, their jobs. Well, the good news is they campaigned for those jobs. It isn't the fact that Kevin Warsh has been put upon by the universe and that this landed in his lap. Yes, he has been, he has been cultivating his life.

They asked for it. Yes, for a decade at this point, he was in the running for FedShare in Trump 1.0 and gave some interviews where he said that he did not say the things that Trump wanted to hear and he stuck by his principles. And that's why he didn't get the job, essentially. There's a book by Simon Bowman. I don't know if it's out yet where he interviews lots of people who met with presidents and vice presidents. And so there's an interview with Kevin Warsh from a couple of years ago where he says something to effect of I stuck by my principles, didn't tell the president that I was going to cut interest rates

and I didn't get the job. And now you can infer what has changed between then and now. All right. Let's talk about a couple of other things before we go. One is one of my favorite subjects, which is about the government keeping data from you. The New York Times had this great story about how every year the IRS releases a report saying how big the tax gap is. That's how many taxes were owed that weren't paid. It's an estimate, right? We don't, sort of by definition, if people didn't pay their taxes, you don't necessarily know that,

or you don't know how much they shortchanged Uncle Sam. Every year they put this report out, and this year they're not. They don't want people to know how big the tax gap is, how much people might be cheating on their taxes or making mistakes on their taxes, to be fair. They don't want the public to know. And they have some technocratic reasons or excuses for why they're not doing that. They want to, you know, change the methodology or whatnot. But I find this extremely suspicious.

And by the way, this report would be, I believe, for 2024 data. So not even how much tax compliance has gone down under Trump. But it does mean that it's much harder to have a baseline for how much tax compliance has likely gone down, how much more cheating has gone up, or other kinds of fraud have gone up under Trump. And, you know, this is one of these things that I get it. Like, there are all of these gothic horrors happening under the Trump administration, people being kidnapped off the streets. Who cares if some little IRS report doesn't go out? But this is, again, emblematic of like a much deeper rot that is happening within the government to make it harder for the public

to hold the government accountable and to make sure that our government is enforcing the laws against the public and against the people who are supposed to be serving the public. So anyway, this is, again, one of my hobby horses is about how these kinds of numbers are just disappearing and nobody knows. It's bad.

It's bad. Okay. That's their contribution. It's bad. It's bad. It is not unlike people getting, disappeared off the street, right? Which is, which is largely about government acting with impunity and avoiding future accountability. And that's what this is too, right? It is, what was the,

I mean, you know, I've already forgotten the, they stopped collecting data based on some reform law and then they went and deleted the database so that the data wouldn't even, do you remember this? It's like six weeks ago. I mean, there are like hundreds of examples like this. Oh, you're talking about the FinCEN data. Yeah, the FinCEN, right. Yeah, this is the data showing who owns these shell companies, I think, right. This is just attempting to make sure there can't be any accountability in the future. Yeah, and I wonder who might stand to benefit from our being less good at... Impossible to say.

Less good at assessing who's cheating on their taxes. I mean, I imagine Donald Trump doesn't even care about that anymore anyway because he has immunity from the IRS in perpetuity according to whatever. that settlement agreement was with Todd Blanche. All right. The other thing that came up as I was looking into what happened with the IRS here is like, to what extent is this about? They don't want to know the answer. To what extent is this about?

They just don't have the resources to calculate numbers like this anymore because they've lost tons and tons of personnel, civil servants. And there was also some great reporting that came out this week on that, that federal employees were paid $9.5 billion not to work in 2025 under Doge. And so from this, I'll read a couple of things from this story. The Department of Government Efficiency's program to shrink the federal workforce through deferred resignations increase the use of paid administrative leave by 435% during the first year of President Trump's second term.

One go up. Yeah, so exactly. This is from a GA. report actually that came out. And the administration has claimed that its efforts led to $200 billion in savings, but no one seems able to verify where that number came from or how it was calculated. But again, this is a government efficiency at work here, paying people not to show up to work, people who would like to work and contribute their skills to the government, to science, to or national security to all of the other things that our government is there to to work on. And instead,

you know, we get this bill. I do wonder, I meant to actually calculate this before we jumped on the live show, which is like what else could have been paid for with that $9.5 billion. I mean, how many ballrooms? How many? Maybe. We could have put triumphal arches in 15 American cities. That's the right unit of measurement. I agree. I agree. How many arches? I was, I mean, there is one tiny silver lining to this, which is that it is further evidence that you can just do things with power.

If you get power, you can just do things. You don't have to say, oh, well, that's not right. You can simply start drafting articles of impeachment against a series of cabinet secretary. You can, if you are the president, simply bring a couple excavators to demolition excavators to the ballroom and just start tearing it down. You can just do these things. Yeah. Yeah. Well.

Democrats. Maybe sometimes a girl will stop you with the Kennedy Center. Will them? So Sarah and I just talked about this. I am pro carrying down the Kennedy Center. Why? Just accelerationism. I want him to do it.

Like, go ahead. Oh, oh. It's not that you have, you like, they are animus toward the Kennedy Center. It's that you want, you want to see the world burn. I want to see the world burn.

Yes. How about you? I don't know. Now, you're an institutionalist, right? Yeah. You want to minimize the damage. Yeah. Yeah.

I want to have accountability, but I don't want to have needless destruction if at all possible. But different strokes for different strokes for different folks. All right. I think that is it for us today. But before you all go,

I do want to mention one specific thing, a note for our audio listeners. Today is the official launch of our new separate feed for receipts. It will no longer be appearing in the bulwark takes feed. So that means starting today, we're shifting that this and future episodes from the bulwark takes feed into its very own feed.

Go follow receipts. It's receipts with me, Catherine Rampel, wherever you get your podcasts, whether that's on, you know, Spotify or Apple podcasts or whatever. Look up receipts with Catherine Rampel. You will still be able to catch us here every Friday, 1230 p.m. Eastern, JVL and me talking about the lovely and cheerful economic news of the week. We will also be adding additional episodes earlier in the week, interviews with newsmakers, with politicians, with experts, with other guests. And of course, our other friends in the bulwark universe. And JVL may be joining me other times in the week as well if I can strong arm him. But probably it'll be more often other folks from bulwark land as well as outside guests.

Perhaps Mark Carney. Mark Carney. That's the dream get. If you are listening. The dream yet is Mark Carney. Yes, yes. Mark Carney, please join this show. I really want to talk with you about, you know, fed reaction functions and neoliberalism.

And if you had Mark Carney on and you didn't touch any politics stuff, you did pure nerdery, that would be amazing. You would be a good person to ask about these things. Like the Fed is reevaluating. Come to an interview and we won't talk about any of this stuff. All we'll do is like the most deep dive technocratic nerd stuff. Well, there are very important questions that he could help answer like how should the Fed be changing its communication strategy, which is something Kevin Warsh is interested in.

The Bank of England went through that. I believe all Carney was governor. So yes, PM Carney, if you are listening, please come join the show. We will chat about all sorts of economic nerdery and maybe some of the other stuff too. But in the meantime, thanks to everyone for watching and listening. You can find us right here on YouTube again next week live at 1230 p.m. But first, opt into the receipts. feed wherever you get your podcast to check out other episodes from us and the bulwark.