PBD Podcast - Trump's State of the Union + Supreme Court Tariff Troubles | PBD #746

Episode Date: February 25, 2026

Patrick Bet-David, Tom Ellsworth, and Brandon Aceto are joined by economist Kenneth Rogoff as they break down Trump’s State of the Union address, escalating U.S.–China trade war tensions, FedEx’s lawsuit over tariff policy, Xi Jinping’s strategic leverage, the European Union’s rejection of U.S. trade terms, and the broader market and supply chain fallout.-------♟️ SALES LEADERSHIP SUMMIT 2026: https://bit.ly/45Evtj4📕 KENNETH ROGOFF'S BOOK "OUR DOLLAR, YOUR PROBLEM": https://bit.ly/4b9Vg5C

Did you ever think you would make it? I feel I'm supposed to taste sweet bit of three. I know this life meant for me. Adam, what's your point? The future looks bright. My handshake is better than anything I ever signs. Right here. You are a one-of-one?

My son's right there. I think I've ever said this before. All right. So last night, State of Union, a lot of follow-up, a lot of people reacting to it. obviously we know at this point it was a longest one ever and Trump's given the longest speech before but he broke Bill Clinton's longest state of the union speech buck 28 I think he went for 145 maybe 150 I don't know the exact time

and some loved it some some hated it and we'll have some of the reactions even CNN asked Nancy Pelosi afterwards what did you think about the president calling out and mentioning your name and she said we've been trying to do this for a long time but there's a lot of stuff that we can react to. But today's business podcast. So we want to know what's going on with money. We want to know what's going out with, you know, gold, inflation, debt,

China, finances, you know, Anthropic, all of these stories, the Panama Canal. So we brought somebody who got their Ph.D. You know, one of these people that's part of this community where they do things like this, right? They got the, he got his Ph.D. from MIT previously. I think he was the chief economist at,

IMF, International Monetary Fund, Harvard professor, done a lot of work, but probably the most impressive thing when I looked at his profile is he's a chess grandmaster. He was ranked 61, I believe,

in the world in 1980. So my kind of a guy, sequencing all this other stuff, but we're going to see what's going to be happening. It's great to have you here, sir, Kenneth Rogoff. Hey, thanks so much. It's what a pleasure to be here. Yes, yes.

And I don't know who's more excited about being here, us or him, because he escaped the snow in Boston, and he barely made it out. So we're glad he's here with us. But having said that, let's get right into the stories. A lot of companies are suing the government over tariffs. FedEx being one of them, L'Oreal, Prada, a bunch of them. I think it's a total of $150 billion plus and climbing.

So what is that going to look like? EU and some others are saying, we're not going to negotiate with you moving forward because of what happened with your own Supreme Court ruling against you, which we saw last night. Out of the 9th Supreme Court, only 4 was there, which, by the way, I don't know if you guys saw many walk by Amy Coney Barrett. Did you see the handshaking that didn't?

Did you see that part or you haven't seen that yet? A little chilly. Okay, so we'll play that clip to see what happened there. So out of the 9th, 4 showed up. So he's dealing with EU. He's dealing with some of these private companies that are suing UK. warns tariff retaliation is an option if U.S.

renegs on the trade deal. There's just a bunch of stuff that's going on with the tariffs. So we'll talk about that with the folks we have here as well. And then aside from that, I said FedEx already, fuel shortage threatens U.S. nuclear resurgence. Kevin O'Leary blasts California as well taxed as bad management calls on residents to hire new leaders. And, you know, there's a story of Steven Spielberg

also leaving California, but he's not leaving because of well-taxed. He's going to New York because that's where his children and grandchildren are. He's getting closer to them. And so that reasoning is a very different reason. And we have to talk about Panama Canal. Can you imagine the Supreme Court in Panama Canal all of a sudden's like, you know what? Sikki Hutchinson, you don't have any authority over these two ports. You got to be out.

What are he talking about? We were about to sell to Black Rock. We were about to do this. No, we're taking a complete different direction. I don't know what our guests here are going to say about this. We'll go through that as well. in regards to Panama Canal. To me, I think that's a very big thing

because if China's got a control and chokehole in Panama Canal, that could be one of the things that they could do long term that I don't even want that option to be in their arsenal. It makes me more comfortable, knowing China has nothing to do with Panama Canal.

And it seems like somebody back there's also upset about it. But, you know, we'll cover that. Paramount Netflix. It's getting more and more complicated, you know, more and more complicated. At one point, everybody thought it's going to be a Netflix deal it's done with. Now it's opening up, Paramount, Ellison,

who knows what will take place. Their mortgage rates. We were talking this morning with Tom and Brandon and the great Humberto and Rob and others, and Tom was talking about how people are refinancing 3% rates that they got four or five years ago for the current 5.9, 6, 6.1, just to cash out.

you're replacing a 3% interest rate for 6% to get money out because of whatever reasons. But we'll talk about whether that's a good thing, bad thing, good sign, bad sign. Housing market cools as prices. Price growth hits the lowest pace since the great recession. What does that mean? We'll unpack that. Bitcoin drops to 64,000. The folks at micro-strategy, everyday people are wondering if they're going to get a margin call,

if we're going to get one of those stories of, you know, hey, we just lost a few billion dollars. We have to shut it down or another one of those. On one day, Michael Saylor is a genius. On the other side, he's the biggest gambler of all time you've met in your life, right? So who knows which one of them is going to be true? We're eventually going to look at the same. He's going to be one of those two, and he kind of likes that. That's his comfort zone.

AI robots, you ready, folks, some exciting news for you. AI robots may outnumber workers. Isn't that exciting? that one day we could go to a bar and it's not going to be ladies night it's going to be robots nights. Can you imagine like one day robots are taking over? You go into restaurants, you go into places, military.

We have a 600,000 robot unit of which 80,000 can fly and 40,000 can do this. Damn, like we may be going into that era, but it looks like that's what's happening. And we're a few decades as firms ramp up investment. This is a CNBC story. Anthropic accuses Chinese AI labs of distillation attacks on its models. I know Kenneth got some thoughts on Anthropic himself.

Altman calls Musk Space Data Center plans ridiculous for current AI computing needs. And then some of the newer stories that came up on brighter news. Out of all the stories this morning got coming, I'm asking Humberto. Womberto, tell me the biggest story, the most important story in the world. What's above this? He says, Patrick. Nothing is above the new big arch burger that McDonald's just launched. Nothing. So he thinks this is above everything above gold, above Bitcoin, above inflation, above China.

This is what that burger looks like. By the way, the last time I had a Big Mac was September of 1997. And that's when I got out of AIT in a military. I was in a boot camp AIT. Then I went to the McDonald's at Fort Campbell, Kentucky, ate a Big Mac, didn't feel good afterwards, haven't had a Big Mac since. what, 29 years. Maybe I may do a comeback and have a big arch year when it comes out.

Who knows? Who knows? And then we got a few other things that we'll get into in regards to, you know, some of the stories that we're talking about. We'll get into that as well. Having said that, folks, if you're in business, we all know who is king in business. Yesterday I had a conversation with the founder of Palantir was here with us. Joe Lonsdale, worth a few billion dollars. He's made some money.

He hired the first few hundred employees at Palantir. as the co-founder. And we were sitting there talking about the role of sales, the role of recruiting, the role of selling a vision, the role of selling a mission. How do you go from building a company that was barely doing a million, two million, five million, nobody believed it was going to go to places to not being worth $350 billion-dollar-ish. What do you do with that? Sales is king. We do an event once you're called the sales leadership mastermind, and we're doing it at this property. I want you to turn your attentions to this video. Go ahead, Rob.

Different types of sales leaders. I've worked with the last 20 years. One of them are those that are a boss, that are telling you what to do. One of them is the one that wants to be a friend. He wants to say, hey, Johnny, let me help you get to this next level. And then the other one is the leader, the leader that's sitting down with you, accountable, challenge, pushing you. You can do more expectation, business planning. Each one of them has pros and blind spots. Once year I host an event called the Sales Leadership Summit.

This year we're doing it at the beautiful trumped around March 25th through the 27th, where we talk about topics like this, 200 plus pages in a manual, where people from around the world, you have to to do a minimum of a million dollars a year and five salespeople to qualify to attend this. So if you're someone that's watching and saying, I think I'm like a boss. I think I'm like a friend. I think I'm a leader. I want to find my blind spots. Click on a link below, fill out the information. One of our consultants will get a hold of you. Click on a link. I do believe the executive tickets have sold out, but there's two other tier tickets for those I want to find out about it. Go on the link, fill out your information. One of our guys will call you. Okay, with that being said, let's get right into it. Opening discussion, I want to start off with state of the

Kenneth, I'm going to come to you first because we did this last night, and we had a crowd here, and we reacted to it. But from your end, long speech, went through a lot of different things. I think he spent nearly 15 minutes just on recognizing the hockey team. What is your takeaway from last night's state of the union speech? I mean, I think the most striking thing is he's having fun. He enjoyed it. Whether other people did or not, some people love him, some people hate him.

But he's really feeling it. I saw him give another speech in the World Economic Forum recently. Same thing. Why do you think he's having fun? Well, I mean, why is he having fun? Yeah, it's actually a question because there's so many things that are against him, right? Why do you think he's having fun? Well, I think, you know, he certainly has a very optimistic vision of himself.

I mean, that's part of what drives him. I also say, you know, having seen him, you can, you know, love him or hate him, but he has charisma. I mean, there's no question when you see him in person and such. Why is he having fun? I mean, he's, you know, again, there's a negative and a positive spin on this, but he had, you know, had four years to think about what he wanted to do and what went wrong and feels like he's doing it. And I think he, I mean, obviously people say he's enriching himself and all that,

but I think he believes, you know, what he's doing is the right thing by and large. What was your favorite part last night? Oh, I think the part that worked really well was where he was talking about, you know, people who had grief and very difficult things. And, you know, I thought that was very touching. And there was a lot of it and, you know, hard to see how you, you know, couldn't feel good about that. Do you think the part when he says, stand up if you're for the American people, you know, and sit down if you're for illegal immigrants? you think that moment was a missed opportunity for Democrats, or do you think they collectively talked and said, guys,

no matter what he says, we're not standing up? Well, I think the Democrats have not coalesced around a vision yet, and that kind of showed, and he was able to emphasize that in some of the remarks he made. Brandon, where are you at with it? Yeah, I think the most impressive thing is his ability to act totally calm, confident, and portrays if he's having fun when there's an absolute story. going on inside his world, inside his head probably. Like, whether it's, you know, I mean, when he was under all the legal pressure,

that was probably when he looked the most stressed, but he, you know, he's got the tariff thing going on. He's got things going on with China, with Mexico, all over the world, but he's not showing it at all. So, I mean, we were talking about before, like, that skill set being able to act totally composed and make it look like it's, you're having fun and make it look easy when it's obviously incredibly difficult. There's something special and so likable about making some,

them look easy when it's incredibly difficult. Yeah, Tom, your thoughts. I mean, we obviously talked about it last night, but from seeing how to market as reactive, maybe start off with what Wall Street Journal said. Start off with that headline. Well, yeah, Wall Street Journal had a very interesting headline, and it was Trump hails an economic turnaround

many voters don't see. And so the journal was getting credit for the economic turnaround. There's been a lot of things that happen. Consumer price index, inflation. You look at the things that have happened, and there it is, there's the title right there. I think we're seeing on screen, but many voters don't see it.

I believe that he was having fun, and I believe that this headline is correct. There has been an economic turnaround. There has been progress. But I think it's happened in most favored nations on pharmaceutical costs for people that are on Medicare. That is real, and it has happened. And you see what has happened on energy.

Look at the price of a gallon of gas. That's real, and it's happened. But what hasn't happened is inflation drove up the price of groceries and the nominal expenses. So we even know inflation has stopped driving those up radically further, it's still expensive for America. And so they're pointing out, you know, I wondered if beef prices and other large commodities

had come down first and then energy and then pharmaceuticals, would the Americans feel different right now? Because the benefits of them would have happened in a different order. But I think that many voters don't see it because every week you go to the grocery store, you go there. And then you've got, you know, what I call the perpetuation of perception, where you've got the mainstream meeting and the Democrats saying, oh, it sucks, you're being hurt, it sucks you're being hurt, it sucks you're being hurt. And I think that doesn't help.

But I thought he was having fun. I thought there was an economic turnaround. And I think the Wall Street Journal and others were pointing out that the scorecard he went over was statistically real. They picked on some other things, but there is a huge list of things. And yes, driven by tariffs that were used as bargaining chips, that there is an economic turnaround. Remember, this is 13 months. Look at what has happened in 13 months. And I think when people look at the here and now

and they feel bad pat or they feel stress, they forget that what has happened in 13 months? We have a leader that's driving, and that leader was sitting at the podium last night with enthusiasm. Rob, can you turn off your ringtone? Okay, thank you. Yeah. So I'm with that.

I'm with that. And yesterday, CNN did a poll. And I'm not talking about the poll that we showed the plus minus on independence. I'm talking about the poll that they did on who is the leading frontrunner. Rob, did you see this with Harry Anton? Have you seen this yet with Harry Anton? And he was showing who the leading front runner is for Democrats. This is the first time in nearly 40 years that a Democrat is not above 25%.

There's not a lead dog. There's not a person they're looking at. There's not a single person that's above 25%. Yeah, going into midterm year. Going into the midterm year. You know, he says this is something that we haven't seen in a very long time. Rob, I'll send a clip to you here in a minute. I thought I sent it to you, but I didn't send it to you.

I'll send it to you in a minute to show it. But let's go to Nancy Pelosi's clip. Here's Nancy Pelosi being interviewed and being asked about Trump's comments of what to do with insider trading. And here's how she reacted to. Go for it. What was your reaction to what you heard this evening? I thought the speech was lazy. You know, it's one thing to acknowledge patriotism

and people getting well and everything when you have absolutely nothing to do with their courage or the rest. But you spend an hour and a half doing it. Rob, that's not the clip I sent you, Rob. What is the state of the nation? Rob, I didn't send you that clip. Rob, I sent you this clip over here in the morning that says Nancy Pelosi was asked about banning stocks in Congress.

It's in the group text with the group right there. That's the one I want you to play. Thank you. Go for it. A moment, Madam Speaker, where he called you out specifically around, of course, congressional stock trading. What do you say back to him? I say back to him, as that's what member said.

Look at your own self. The inference he wants to draw is there was something wrong with that, which there wasn't. And if there was, people get prosecuted for it. For a long time now that we're trying to pass this. law. It doesn't have, now it has more support than it had before. And I, I, Elizabeth Warren stood up and applauded. Hmm? Elizabeth Warren stood and applauded tonight when the president talked about it. Well, that we all did. I did too. We said, did Nancy stand up. Yeah, I did too. A lot of people stood up. A lot of Democrats stood up. Did she?

I think that will pass, depending on what the bill is. I mean, what we had, we thought we could pass. It was actually a tougher bill than Governor Spanberger had put for us. We thought it could pass, but it was clear that it wasn't going to make it to the House and the Senate. But in any of it, he gives his shout out. I don't pay any attention to him. What I'm concerned about is our democracy, which he is destroying, even in the 250th year anniversary. But we saved the democracy at the kitchen table to talk about how we help working families

with their costs, taking down the cost, not by giving tax breaks to the wealthiest people in the country, by making health care more expensive for them. And then he talks about drugs in America. While he freed Hernandez, a guy who sent 400 tons of cocaine into the United States and said he's very good at changing quickly away from the topic.

But do you think... He freed him. He had been convicted in the U.S. court. You can pause it right there, Rob. What do you think about what she's saying, how she's reacting to it? Nervous. She looks like...

uncomfortable. You think so? Yeah. I mean, it's a clearest day paper trial to see that she, you know, made legislation around things like Nvidia, Google, you name it, and then, you know, directly either her husband invested in it right before it. I mean, it's not an accent that she has a better trading record than Warren Buffett and Ray Dalio. I mean, the way she responded to it was like, yeah, I'm all for it. We should, it almost gave me the vibes of the answer when Hillary Clinton came out and said, we should release the files. We should release to see what's. in the files. You know, that kind of an approach where, yeah, I want this thing to stop. But if you think about there is a Twitter account, Kenneth, I don't know if you've seen

this or not, there's a Twitter account called Pelosi. What is it called Rob Pelosi stock? Well, tracker. Look at that. 1.4 million followers. Have you heard about this? Operated by autopilot. Have you heard about this? I haven't heard about it. But, I mean, she was clearly uncomfortable. And the nature of her answer was, well, there wasn't illegal when I did it, there wasn't any guidelines about it. She's not lying. And I think we should have guidelines so people like, you know, me can't do

this in the future. But she also made the point that, you know, the president sort of, you know, the pot calling the kettle black, because there's a lot of things you could point out with cryptocurrency. There's no question about that as well. Yeah. There's no question about that. But here, Pelosi tracker

and it's by autopilot, joint autopilot, where they allow you to invest exactly the way she's investing in trading. A matter of fact, Tom, real quick, you tested this last July, right? You mind sharing

with the audience how it's done? What Autopilot does is it makes trades for a set amount of money that mirror exactly what's in Pelosi's thing. No, I wish I knew. Watch this. This is so interesting. So I did a test. So I opened a Robin Hood account and I put $50,000 in it.

Autopilot is a separate company. I gave Autopilot permission with that $50,000 to trade and to have an ownership mix exactly the way Nancy Pelosi's ownership is, according to all the forms she has to file. And it then trades out every time there's a trade with Nancy Pelosi. Every time there's a trade, trades out. It was up from just the first quarter that I was doing it, like 17%.

And then it was up 23%. And now it's beating the S&P. And there is one billion that was invested by people like that in individual accounts like a Robin Hood or a Schwab account. And then they give autopilot permission to, well, trade on autopilot. And a billion people, a million dollars with all those people have been there. And those people have made money. And you should see the commentary on it that's like, hey, it was great to make about 10 grand on this. But isn't this kind of ridiculous?

because this is what Nancy Pelosi has been doing, you know, while all the rest of us are just watching our 401Ks go 4% a year during COVID and things like that. But that's autopilot. She's ended up being like Joe Kennedy, where Joe Kennedy, he's the one who did a bunch of insider trading, then became the head of SEC and then outlawed insider trading. So, you know, Congress is going to outlaw the thing that got them rich because they already benefited from it. Yeah, I mean, the fact that a company takes that idea and matches people, people's investments and you can do that and say, hey, if she's doing it, I'm going to match what your

portfolio is. They're using the information that they have, but this is a legal thing that this company is doing because like, wait a minute, if we're doing something illegal, we're just matching her investment. You see it on the 13, which form do you see it on time that, oh, it's, yeah, there's a congressional insider. You can literally see everyone's investments. Correct. You have to fill out these forms and you have to attach your brokerage. accounts to it to show that the blind trust that you're supposed to have is not going outside the lines. Do they even get it day by day? I mean, so like, or you just know what she did last year? Right. No, no, no. You will suddenly see autopilot make trades. This goes out.

She traded out of PayPal weeks before PayPal had the earnings thing. So it protected profits that people had previously had and then recalibrated according to the ownership. She got out of PayPal before PayPal had issues here. So this is Nostradamus Nancy. But leave it to the capitalists and the entrepreneurs to come up with an idea. Let me get to this one here, and then we can get into economy. So again, reacting to last night, while everything is going on, right? You know, Kenneth said something about Democrats figuring themselves out right now as they're going through this next one.

I'm paraphrasing what you said earlier. But here's CNN, talking about who is their leading candidate. And Harry Enton calls it a clown show. Go ahead, Rob. They're all running, and this is just a downright clown car at this point on the Democratic side. I mean, just take a look here. Top choices for the 28 Dempres nominee. You have a leader, but it's not really a clear leader.

It's within the margin area. You have Newsom at 19%. Then you have former Vice President Kamala Harris at 18%. Quite a weak number for her, given that, of course, she was the nominee last time around. Pete Buttigieg, of course, is run before 13%. Alexander Acacio Cortez at 12%. This is just a total clown car. It is a total mess.

There is no clear frontrunner at this particular point on the Democratic side. Who the heck knows who the nominee is going to be in three, two years? It's been a long time since we've had a democratic race like this. Yeah, it has been a long time. This is very unusual

for the Democratic side to not have a clear frontrunner at this point. National early poll leader at at least 25%. Look at this. This year, we get the giant question mark. No one, no one, no one. In 2020 when there was no incumbent, it was Joe Biden who was there, Hillary Clinton in both

08 and 16, and Al Gore in both 2000 and 2004 at this point where at least in 25% of the early post, you have to go all the way back, all the way back from when I wasn't even in elementary school yet, not even in pre-k yet, to 1992. That was the last cycle in which there was no clear front runner at this point. 1990. He said that way. It's like 200 years ago. for his primary.

Back before. Yesterday. So what about news? So what are the prediction mark is saying his odds are? Yeah, okay. So it seems to me that... Yeah, so that's pretty wild when you see that. Does that kind of make sense, though?

Do you think that kind of makes sense? Yeah, I mean, there's a civil war in the Democratic Party. It was going on in the last election between the progressives and the center left. And the progressives have all the energy right now, Mom Dani and New York, AOC. and it's very hard for someone who's more electable to come out in the Democratic Party. I mean, there's a war on in the Republican Party, too, but it's much more one-sided. But in the Democratic Party, I mean, it's sort of, I think the progressives are clearly on top. I think it's going to be a progressive candidate, you know, somebody pretty left-leaning.

But who knows? By the way, that's actually a very good point, Tom, the way Canada is saying, because if you, see right now who are the superstars of the left today two names who are the superstars momdani and aOC and you keep seeing them collaborating even the video they made yesterday about how in spanish illegal immigrants you can get child care free in new york and here's how to get it yeah i don't know if you saw that clip or not gratis but you know what's interesting is young good looking charming charismatic and they at least have ideas they're presenting of course their socialist ideas. Of course there may be bad ideas. Of course history says these ideas don't

work, but they're pitching ideas. There's two different communities. One is sitting there saying, he's evil, he's evil, he's evil, he's evil. The other one is saying, let's raise taxes on the rich and let's give free benefits to illegal immigrants. Believe it or not, these guys are getting more momentum than these guys. Because there is no ideas here. It's just calling them out. And it's interesting if we go then, by the way, here's a crazy question for you guys. You know, Kenneth, you were around back in 1992. I wasn't a young man already in 1992. I was around.

So the way he said it. But for you, when he watched something like this, you know, and you see the momentum that they're creating, nobody thought a, if I told you two years ago or three years ago, a full-on socialist, one step away from a communist, speaks like a communist, He speaks as if he's read the communist manifesto six, seven, eight times. And he's a Muslim and in New York City, in the capital of capitalism,

in the head course of capitalism, right? Financial capital of the world that took over London that a socialist, Muslim, progressive guys going to become the mayor, people would have said you're out of your mind. So if that's the case, do you think it's that crazy to say, maybe you can do that in New York if you can do that in New York City maybe you can do that at the national level

with somebody like an AOC Yeah I mean I've been saying to people all over the world Who are sort of worried about The re-election of a Trump-like figure They're so scared about that I say Wait till you see the election

of a Mamdani-like person You know in the United States What that's going to bring I mean The incredible swing The uncertainty the fact that you could, you know, our country is so far apart and you could swing from one to the other. But yeah, no, Mamdani is absolutely good-looking, charming, knows how to use social media, no question about it.

And I do have my sort of, okay, they're very left-leaning, but, you know, good friends in New York who kind of like him. Because basically they said the last two guys were idiots. And so at least he doesn't seem like an idiot, which, you know, he clearly, you know, he clearly, you know, know, seems thoughtful, even if not literate economically. So, you know, we'll see. But I don't know how he's going to do in New York because it's not doing, that he inherited all this spending, all these fiscal problems. And if he raises taxes on the wealthy like he wants to,

he's just going to chase him out and it's going to lose money. It's going to make him feel good, but it's going to lose money. Who's going to pay the biggest price? You're somebody that you've been in the space of stuff. in what works, what doesn't work. This is your world, right? PhD, MIT in economics, you know, chief economist at IMF. Your world is to study what works, what doesn't work, right? When you look at what's going on with New York and the idea of raising wealth taxes, New York and California, both are thinking about it, how much common sense does one need to realize

they're going to leave? The billionaires are going to leave. How much common sense does it take to realize that? I tell you, I have good friends. They're very smart in New York. I sit down, I have dinner with, and I say that, and they say, I don't know anyone who's leaving, and somebody else at the dinner will say, wait a second, you know, statistics say a lot of people are leaving, and they'll say, well, none of my friends are leaving. I'm not going to leave. I'll pay more taxes. I mean, I don't know, you know, but for sure, you have to look at the spending. These are successful people you're talking about that are saying this. Well, I mean, they're from all walks of life, you know. But yeah, I mean, you've got to look at the spending side in New York and

California, too, but particularly New York, I understand, needs to look at that side of the equation. I mean, he, it's, there's sort of, I don't know, nihilism in the Mondani view that we make everything free, the 1% can pay for everything, and you can make everything free, but it's a choice. You've got to have everybody pay taxes if you want to do that. Yeah, and I don't think that's going to work. And you're starting to see him saying he's going to raise property tax to what did he say, 9 or 10 percent. And the average joke comes out and saying, what are you talking about?

I thought you're going to go after the wealthy. Now you're going after us. You can't do something like this. So now you may. Yeah, so now you may not lose the billionaires. You may lose, you know, not necessarily the upper class in New York, but some of the guys that are family running small businesses making $200,000 a year, taking care of their wife and kids.

You may even lose those guys that are going to sit there and say, I'm going to go look at my options. You're seeing Californians right now going to Nevada, right? Because you go there, no state taxes. Another one of those somewhat pro-friendly. Mark Wahlberg bought a place there. Mark Wahlberg bought a place here, I believe, somewhere in Del Rey. You now heard Palantiers moving their headquarters to Miami.

You saw Griffin. You saw Citadel. You saw what's going out with folks, with companies moving to Palm Beach. Who would have thought people would have moved to Palm Beach? Think about the talent. The average person you're hiring in Palm Beach. beach, depends on east, you know, closer to the water or the other side, what is the age there? But people are saying, no, I'm still going to go to Palm Beach and, you know, build my business

there. So I don't know. I don't know what's going to happen with these two states. I don't know if they're doing it intentionally or not. But the reality of it is, these are policies that's going to push your job creators and investors out, and it ends up hurting middle Americans in those cities. But let's talk about tariffs. Let's talk about tariffs.

So FedEx sues the U.S. government seeking full refund over, Trump's tariffs. Rob, if you got that clip, let's start off with that because the first story we heard was, you know, FedEx, but it didn't end with FedEx. There's many more names that are coming out. Go ahead, Rob. FedEx is suing the Trump administration just days after the Supreme Court ruled most of his tariffs are illegal. The company is asking for a full refund of all the payments had made to the government under its tariff policies. Let's go live to Market Watch Bureau Chief Rob Schroeder. Rob, thank you for your time today. So, What is the procedure here looking, what is it going to look like for companies who are seeking to get a refund?

Do we even know that? Is the rule out for how all of this is going to work? Yeah, hi, Muba. Thanks for having me. So indeed, FedEx, as you mentioned, is one of the first out of the gate here after the Supreme Court's really quite earth-shaking decision last week to deny or to really reject several of President Trump's tariffs that he had used. to collect duties. So what's happening now in the case of FedEx, for example, is they're going to what's called the Court of International Trade against the Trump administration, in hopes, in desires that they get a refund. Now, this promises to be quite a long process,

as the president himself suggested, taking as many as five years. It could take as long as, you know, five years. It could take two years, three years, five years, five years. Kevin O'Leary was talking about the other day, how problematic it is I'll give you guys some numbers here and then, Kenneth, I'll come to you first. You got $175 billion right now is what we're looking at. L'Oreal, Dyson, I think Prada, a couple other companies, Costco, Revlon are also those that filed suits before over a thousand importers, total filed similar refund claims post-ruling,

spanning large corporations and smaller importers for a total about $175 billion. What do you think is going to happen here, Kenneth? Well, first of all, I think it's important that most of them do get their money back that, you know, if this wasn't a legal tariff, then the United States has to pay it back. On the other hand, $175 billion, that's a lot of money,

but not in the context of the U.S. budget. It's kind of like chump change in terms of things. And I'm sure the president is, economic advisors knew this might happen. They knew they might have to pay it back and fill it in other ways and view it as collateral damage for their strategy. I also want to say that, you know, there's all this drama over tariffs. If you had 15% tariffs all over the world, I mean, we economists don't favor that. There'd be a lot of costs. I don't think it would be efficient. It's not the end of the world. I mean, a lot of the dramatic effects of tariffs come from,

we don't know what's going on. When we had Liberation Day, the problem wasn't the tariffs. The problem was, you know, he had this chart that didn't really make sense. And people are thinking, oh, my God, you know, he's got his finger on the trigger. You know, what's he thinking? But, you know, the tariffs themselves are not the issue. It's getting some certainty. And we don't have it now because we don't know what will work.

We don't know what won't work. We had all these deals. And now suddenly, I mean, the UK had 10%. Now it's 15% and they say what gives. And of course, there are many things playing out here. But at the end of the day, this is more about a fight for power than it is specifically about some tax. Tom, where are you at with this? So, you know, people like to say, oh, the tariffs were illegal.

The tariffs themselves were not illegal. And CBS is calling the tariffs illegal. What the Supreme Court said very narrowly, keep me honest here, was the president did not have the authority to put those things in place because he needed to get permission from Congress. These were not like illegal or backdoor extortion. This was normal negotiation the way tariffs have been used for 100 years. And you could debate whether tariffs are good or bad. These tariffs did not create runaway inflation as predicted. The market calmed down because, as you pointed out, and you're correct, the market didn't have, certainty on Liberation Day, and the market, as they say, freaked the F out on April 2nd of last year.

But then the market came back. So these tariffs are not illegal. President didn't have permission from Congress. But if Congress got together tomorrow morning, Pat, and simply stated, we hereby ratify the tariffs as implemented by the president and voted. That simple vote would retroactively tell the whole world, hey, we're all together here. We're behind the president, and you better deal with these, and you've negotiated trade deals with us. So, you know, the guy that's negotiating with you and Whitkoff and Bessent and Rubio and everybody that was involved, hey, we're behind our leadership. Deal with it. That's all they have to do, Pat.

A vote by the U.S. Congress that says, we hereby retroactively ratify that we approve the tariffs as in force as they are today. Here. There you go. Yeah. The question is, will that happen? No, that's not going to happen because it's anything but Trump. Of course. So the problem, to me it's a circle. Like the Constitution protects against a dictator coming in and choosing to do everything they want to do.

That's not Trump. I support what Trump was doing with this and not because it affected us negatively as well. We buy products from many of these countries that we go back and forth from. We're right now in Italy, and we are in the shoe business and the fashion business, so we're dealing with the tariffs that you have to buy, and we eat the costs in many cases.

But for me, it was more about what China was going to do, and you see here, Xi gains leverage before Trump's summit after tariff reversal. Bloomberg writes that article. You don't think Xi knows he got the leverage now? You don't think these countries now sit there. Macron asks Trump to lift sanctions on European officials, right? You know, U.S. tells partners to you, better honor tariff deals as Trump regroups.

Even yesterday he talked about it in a state of the union when he said most of the countries we're speaking to are still willing to go with the agreements we made, meaning even though Supreme Court ruled against us, they're still willing to negotiate with us in that way. So he needs that fear. A leader has three different things that you're dealing with. Respect, likeability and fear. Okay, so likeability. He tends to be likable when he's negotiating his charming, like you talked about earlier, right? Respect, we have some of that respect.

You need a little bit of the fear. Nobody feared Biden. Nobody feared Obama when you're negotiating. You didn't fear these guys. We need a little bit of fear. America hasn't been feared in a long time. We haven't had somebody that comes in. And my biggest concern was China.

So I kind of liked that this was here, but then it was out. And it was so important that yesterday, Rob, if you want to play the clip when the president was coming in and how he walked past Amy Coney Barrett, Rob, if you want to play that clip, this is not the one, it's the other one. I send you to the clips. Yeah, I texted to you a minute ago.

If you look at the clip, I just sent you, Rob, if you just check your text, I text it to you directly to your text. Right there. Watch this, folks. Go ahead. Okay? So one by one. Hi, I'm Jane Wakefield and I host The Human in the Loop in partnership with gravity. That's Gravity with two ease, helping organisations innovate with AI securely. We explore the rise of AI agents, their history, their potential, and the risks organizations must navigate as they scale. Search for Human in the Loop wherever you get your podcasts.

We just saw the president obviously shake the Chief Justice's hand. There is Justice Elena Kagan, Brett Kavanaugh. Amy Coney Barrett. Of course, he chose Amy Coney Barrett for the bench. She was one of the justices who did not vote in his favor and did not shake her hand there. Did interact with the Chief Justice, but then with none of the other justices and John Carl, this was a question for the president today. Obviously, didn't want to go on the record. He didn't offer any answer to us. What do you think about that? But it was clear to us. You can pause the right. What do you think about that? Well, I mean, I think Tom had it right that the Supreme Court ruling was correct, that it wasn't that tariffs are illegal. It was that the procedure was illegal.

And I have a feeling Trump and his people knew this was coming all the time. What taking this ruling has meant has been that he can't use it as capriciously as he's been doing, which he's a good negotiator and sometimes use it effectively. On the other hand, I have friends who run small businesses. it has been brutal on them because not only are the tariffs, and you don't know what's coming, but there are actually a lot of costs, administrative costs, if you're a small business, if you're importing, it's not just that you're paying the 15, 20%,

but there are all these other fees that places like FedEx and others are charging because they have to do all this paperwork that they didn't have to do before. So I think a thing that hasn't been talked about enough is how tough this has been on small. businesses this uncertainty. Maybe it's for the larger good, but you know, it's not been painless. Yeah, there is something to that, and I think maybe an optimal way I do it would be to exempt small businesses under a certain size. But I think that this is outrageous by the Supreme Court. I think

the Supreme Court has acquired too much power since the Constitution was created. And the, you know, they look at this like an economic thing, but I think it's a matter of national security. Like, Rob, if you could pull up the picture I sent you, these things that, you know, whether it's semiconductors, you know, advanced chips, aerospace, rare earth mining, rare earth refining, less than 10% of those things are manufactured in the U.S. So if that's not a matter of national security, I don't know what it is. And the primary goal, if not one of the many goals of the tariffs, is to get those things back to the U.S. to be produced in the U.S. because it's impossible to compete with a country that pays slave wages to produce items because obviously it's going to be

cheaper to, you know, have manufactured in different country and brought over here. So I didn't even think the tariffs were a strong enough measure to enforce that, but they were a step in the right direction. So, you know, how do we solve for that? How do we solve for being undersold by, you know, third world countries or countries like China who could produce something for a fraction of what we could produce it for? And when they're critical to our national security, which is why I think it is a false ruling by the Supreme Court. It is a matter of national security. It's not just an economic matter. I, and I think a lot of people also voted for that, right? The idea was to bring it here.

Let's find a way to bring it here. But I think, Brandon, to go through that, what did he say yesterday, remember the $18.5 trillion number? Under Biden, the investments of foreign investment coming in was less than a trillion dollars and a lot less than a trillion dollars. But why I have gotten the commitment over $18.5 trillion dollars and a lot more than $18 trillion of foreign investment coming in here? Okay.

That's good. The challenge is America is not going to feel that right away. No. That 18 trillion is going to take how long? Yeah, the years, decade. 10 years, 15 years, 20 years. Buy the land, build the factory, hire the people. It takes a minute. So the problem is some of these ideas that are good ideas

and the pain to go through the tariffs of making sure you put China in check, put some of these other countries in check, you can't fix that in 13 months. Yeah. And you said, we don't know if it's going to work or not, right? But it was sort of a war on everyone. I mean, so I'm all for national security and thinking about just things like the drugs that we use.

We found that out in the pandemic. We were importing everything from India and China. We didn't have control over it. So there are things which are national security, but, you know, is wine national security, you know, is everything national security? And I think, you know, if he uses them under these other mechanisms, he can target those things.

But the trouble is, as a negotiator, he just wanted, you know, free form to do whatever he wanted. If he didn't like putting Bolsonaro in jail in Brazil, if he didn't like the free speech law in the UK, you know, he would do something. And I think, I think reining that in was good. You think raining that in was good? Yeah, you know, you focus it on national security. That's fine, but not necessarily every whim that you have. That was, I think, really what, you know, seemed odd about the whole thing. So, when I ask you a crazy question.

This wasn't even on the topic. Tom, this goes to both of you and you're a national security guy. You know, you got your bachelor's and masters of national security. So your thoughts on this as well is. So if the ruling comes back and they say, well, yeah, you never had the authority to put the tariffs on all these countries. Six to three Supreme Court's against you. Really? Yeah.

Even the other two that I appointed, yes, they also rule. against you. What? So I put them there, but they're ruling against me, yes. Got it. All right. But all you have to do is put it through Congress to get it passed. No problem. Well, guess what? If you're sending B-2 or B-52 bombers to go help, you know, blow up the six nuclear side Iran has, some people are saying, you also need to run that through Congress first. Okay? There's also a, hey, you need to get that approval. Hey, the stuff that we're doing with Iran, you also need Congress approval. Doesn't that make everything that before you make a decision like that, you have to go and then how do you become unpredictable to the enemy? An element that the president needs to be

unpredictable. Instead, it's like, no, hey guys, we're about to attack you at 6 p.m. tomorrow night, be ready, we're coming to you. Can that argument be made for that as well with Iran? It's why the immunity was important. It's very important. The, the, executive order is the mechanism for the president to do exactly what you're talking about. However, there are these limits. As a matter of fact, I believe it was Massey and Rokana. Rob, can you look this up? Who are pushing a war powers resolution to force the president to come to Congress to get approval for things like that exactly as you point out. But it was Massey and

Roe Kana a week ago talking about pushing something forward so that the president has to go through Congress yep Section 5 of War Powers right from unauthorized hostilities

and this is Massey supported by Kana so they're doing the same thing they're trying to get this resolution started Pat exactly what you're talking about they're saying hey you needed to come to us from this, so now you need to come for us for this. But what people don't understand, leaders have to be unpredictable, leaders have to take measures. Now, the president as commander

in chief is allowed to do a variety of things militarily. And he has the executive order pen. Those are the things where he can act. Can't they keep coming back to you, though? Can Congress keep coming back and say, like Rand Paul was right. I was with Rand Paul a month ago. And Rand Paul says, hey, February 19th. Yeah, Rand Paul says, hey, you know, you realize if, I said, so do you think Supreme Court's going to rule against them or form him? If they follow the law, they're going to rule against them on the tariffs. He said this a month ago. He ended up being right. So now can the same argument be made against anything he does with Iran? What if they do what they're doing to Iran and something doesn't go right? Can they come back and say, hey, you went against the Constitution? I think you need Decc. This is the War Powers Act. And this is what kind of mass here threatened the force of vote on Iran as prospect of you attack. looms. That's what they're testing. They're testing war powers. Why wouldn't you test it? What I'm saying is if you're against him, you would test it? So does this push it back to

Supreme Court? Does it go back to Congress? I mean, everybody's always fighting for power. So there's, you know, the president wants more power, the Congress wants more power, the Supreme Court wants more power. Everybody's fighting for power. And part of, you know, the democracies and their balance of power is deciding, you know, where it goes. I think on economic stuff, Being unpredictable is not so great. I mean, occasionally in negotiation, but I have a friend who imports wines from Italy and a very small business. And the unpredictability is really hard to deal with.

For most people, you want to invest. You want to know what's going on. Like, can I rely on something in three to five years if I invest? But obviously, for military strategy, it's like the last thing we want is for our enemy, our adversary to know. So, yeah, I mean, these are things that constantly need to be talked about and debated. I think on the economic side, the case for having, you know, more process. That's really what happened on the tariff ruling.

There are all these other mechanisms you can use. They just require a little more process, a little more procedure. And I think the Supreme Court actually very openly was saying, please use these instead. They weren't saying we're going to ban everything. we just, you know, this door, maybe you shouldn't, this approach you shouldn't use. It's too slow, though, for him. And remember, he's a capitalist. He's an operator.

He comes from the private market where if you don't move fast, you get killed. He's a CEO. Right? In politics, everything is super slow. Well, that's fine. But in economic policy, like, you know, would you want to know if your tax rate on your company was going to be 50% or 10% two years or now? you'd kind of like to know that if you're making an investment.

So the unpredictability for ordinary people, for small businesses, is not great. They're cases where it are. I mean, you know, they're different horses for different courses, I guess, as they say. But we have to compete with countries who are able to move at light speed, though. I mean, like, Russia took their interest rates to 22% when we put the sanctions on them and they were able to stabilize their economy. So, I mean, you kind of have to be able to swiftly move if other countries are doing things to you. Well, for sure.

No, but that's a case of if you're in a crisis. Russia was in a huge crisis. I think we're in a crisis with what Trump's trying to combat against. Well, we're in a much more slow-moving crisis than what Russia was doing. And I don't, you know, I think there are crises in America. There are things that are going really well. And you don't want to throw out the baby with the bathwater. I mean, that's the balance.

There's two problems on economics. The first one is that we need to understand that our, Congress is heavily influenced by foreign lobbyists. China and others, we need to understand that. The president has to work against that because otherwise his negotiations on economics will get completely undermined. Your comment about consistency and predictability is correct on one line. Because there was so much unpredictability and so much dirt being thrown into the air by the Democrats, That's what happened on April 1st, the stock market. It didn't understand the tariffs.

It thought there was going to be runaway inflation. Everybody was all full negative, and the market was unpredictable, and the market, what did it do? It shifted equities to bonds in a single day. Boom, and you saw the market come down, and then it came back. Why? Because everything was okay. Nobody got hurt.

No bomb was thrown off. So the president needs to have that unpredictability dealing with other people. I mean, look at the trouble we had with Canada. Canada's 2.1 trillion, I mean, 2.3 trillion GDP, slightly larger than Russia. And we are 31. And this, this gnat was sitting there, creating these hostilities because he was handcuffed. You have to be able, as a leader, to lead in these things. You do want economic consistency. but when you're really trying to break two things, all these entanglements with your own Congress

who are bought and influenced by foreign governments, you have to break that. So he has to have that pen and that power to break through that. Because in a normal circumstance, if we had rational representatives, you grab an economic committee, you say, this is the play we got a call. We need to do this, this and this,

because of steel and China. Are we all in? Okay, we're going to go. Hut, hut, hike. Unfortunately, if you go and tell all those people, they've got lobbyists, they've got people, then everybody knows about it. But let's be careful. We're talking about the long-term balance of power.

Again, we could have a president, Mom Donnie, not him in particular, president in a few years. And do you want them to have all this power without Congress to be a check on it? I have to say one of the things that upset me a lot about what the Democrats wanted before the election was they wanted to get rid of the filibuster. Biden said that. President Obama said that. Nancy Pelosi said that. And it's so short-sighted.

They wanted to get rid of the filibuster because they wanted much more power when they were in power. They didn't want any checks and balances. I think of the filibuster is one of the fundamental things that we have. And to their credit, the Republicans, even when Trump has pushed them,

have not gone along with that. So we're not just talking about today, you like Trump, you like what he's doing, what about the next guy or woman, you know, what about it? So, you know, that's where the problem was. That was the Gorshitz argument. So, yeah, that's where I have the concern. So get rid of the filibuster gets what? It makes the Senate instead of 60 out of 100 to 51?

Yeah, you get a tiny majority and you just do whatever you want. They wanted to make Puerto Rico and Washington, you know, into Senate seats in order to cement things. They could just pass any law. I mean, the filibuster was very, they made a big mistake back, I think it was under Obama, when they took away the filibuster for most court appointments, thinking, you know, not thinking a couple moves ahead, if I can be the chess player, it'd be. And I think we have to be careful also if you are, want President Trump to have more executive power,

that it's not something that's somebody that follows him that inherits. We have the greatest country in the world, 250 years. It's worked really well. And you've got to be really careful about upsetting a balance of power that has worked. And I understand the paralysis. There was this New York Times article four or five years ago that got me very upset that said, we're going to only get to the end of this when one side has all the power, meaning, I think the progressives have all the power. Now the shoe is on the other foot. I don't think that's a good thing. I think we have to figure out how to reestablish this balance. And that's going to take Congress stepping up. Will day? Will day is the question. But look, to me, the more and more we get into this debate and both sides of the argument are given to him,

like what you're saying and then what he's saying about, Mamdani, even though he's not born here, but a mom, don't the type of person like could become president. Let's say AOC, who is born here, could be that. The Supreme Court, to me, gives me confidence about the future the Constitution how it's set up gives me confidence about the future that even a crazy cycle

progressive socialist commie that becomes a president how much can he or she get done are they going to be locked in and how much they can do of course they can sell their ideology confuse the kids and go back to some of those opened a border

and what Biden did opening the border for four years and getting to what 10, 12, 15, 20 million whatever the number is that's a massive crisis but even with that crisis you know Like if you actually think about this, Tom, Kenneth, you know, so they opened a border for four years. Every month we had to hear why it's tough to close it

and how much work it takes. Every month we have to see interviews, a border patrol guys, we're not allowed to do this. We have catch and release. We can't do that. They're not letting us do this. What do mean they're not? Once I'm last some Kamala Harris came here, the borders are,

you can't come. Eventually one time she came and I don't know where she went Guatemala or whatever. but it is that she ended up doing. But where was the Supreme Court against that? Where was the Congress protecting? So that playbook to me, if I'm a Democrat, I'm like, guys, every four years, if we get into the office, open up the borders again.

Open up the borders again. Eventually, within 50 years, we're going to dominate this entire thing. Then Republicans are like, what do you mean you're going to open up the borders? And so, okay, I dare you. Go ahead and get rid of the people that came here illegal. go ahead. What's going to happen if you get rid of people illegally? You're going to get an Alex Freddie. You're going to get a, you know, what's her first name? Rachel?

Rachel Good, right? You're going to get Rachel Good. And then what happens when you get a Rachel Good and Alex Prady? Then the other side uses a, they're killers. Ilan Amar was screaming that yesterday, I believe. They're gunning us down in the street. So to me, on one end, one has to follow the laws, but on the other end, you're allowed to put 12 million people here and nobody was held accountable? What happened there? How does Supreme Court of Congress protect us with that? Is this it, Rob? Play this clip and I want to go to Kenneth. Go ahead, Rob. Sanctuary cities that protect the criminals and enact serious penalties for public officials who block the removal of criminal evidence. You ought to be ashamed to yourself. In many cases,

drug lords, murderers all over our country. They're blocking the removal. of these people out of our country, and you should be ashamed of you. At MedCan, we know that life's greatest moments are built on a foundation of good health, from the big milestones to the quiet winds. That's why our annual health assessment offers a physician-led, full-body checkup

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and stars Rashida Jones, Kate McKinnon, and David Diggs. Stream in the blink of an eye, February 27, only on Hulu on Disney Plus, sign up at Disneyplus.com. And pause it right there. So it's legal for them.

Was anybody held accountable for letting 10, 50 million people in? No. Where's the accountability? Well, the accountability, hopefully, is in our democracy. It was one of the dumbest things they did, not only economically, socially, but politically. I mean,

I think if I were the Republicans, I'd hope the Democrats stick to that position forever. How? Oh, I mean, It was one of the big issues for President Trump and the Republicans in getting elected in 2024. But if you keep doing that in three, five terms, and Americans are not making babies, and you keep pushing LGBTQ, and LGBTQ gets younger kids to transition and like the same sex. And we know science doesn't show that same sex can make babies. So birth rate goes to 1.58, and then you get control of Hollywood and all the movies and cartoons you make to confuse the hell out of the kids.

That's a great combination, strategically long term. keep bringing illegals in, open the floodgates for four years, do that four or five times over 50 years. We own the vote for 50 years. Well, I want to be a little more optimistic about it. I mean, I have to say, I've come from a very liberal university, and different people have different views on this, and there's some balance, and I think the Democrats push too hard in one direction,

and they're paying for it. These are fantastic issues for the Republicans, because I think a lot of people, you know, feel, the Democrats went much further than you see in other countries on a lot of these issues. They have a lot less immigration in Europe, and they're so angry about it. It's the biggest issue there. I believe in legal immigration, by the way. I think that's really important.

We all do. Yeah. Yeah, I mean, I think that's being lost in this debate, that we need more of that. But, yeah, there's not a, I don't have, like, a simple answer to this. You know what I'm saying, right? Because to me, like, I hear you. I love that you're saying the Supreme Court, the long-term balance of power. I love it.

You're right. I'm with that. As much as to me, I was for the tariffs going because I wanted to see where that negotiation was going to lead to. And the moment Besson started saying, even if Supreme Court ruling goes against, that we have other plans. But, okay, Supreme Court, okay, Congress, protect us from the next person, being able to open up the borders and getting 10 or 50 million people.

And when the Republicans come in, what are they going to campaign on? When Trump campaign on, we're going to get rid of the illegal immigrants. You know what I said to myself? I said to myself, how are you going to do without being a, you know, seen as a cruel, horrible human being? What a great marketing story. I don't care what you do. You're going to go politely say to people, hey, Kenneth, you came here illegally with your family of six. You came from Yucho Khan, Halisco.

We need you to go back home. Okay, America, I'm going to go back home legally because you said so. No, that's not how it's going to. So where's accountability? Nothing. Well, I don't know if this is going through their heads when they're looking at it. I really don't. But certainly until recently, the view was if you got in, you were eventually going to be made a citizen.

The U.S. would always have an amnesty every once in a while and you get to be a citizen. And everybody thought that. Dream out. Yeah. Now, you know, you think, well, okay, maybe the Mamdani candidate gets in four years. they open up the border, you know, you've got to think a little bit more because they might not be there in four years and you have to worry. I'm not trying to approve of it or not approve of it,

but, you know, that does lay down a marker, I suppose, in being so tough. Yeah, if we come up with the voter ID, then they can't use the open up the floodgates of a... So when they're like, well, no, voter idea is racist. because you're asking African Americans who, you know, can't go out there and do that. They can't find their passports. And, you know, all these people that have all this job, they're working too.

They don't have time to go to the DMV and get a new voter ID. What are you talking about? No, you don't want a voter ID because we get it. How many states do you not need a picture ID to go vote with? We know the games as well. I believe if they do the voter ID, the opening up the borders won't work anymore

because that playbook doesn't work. This is the scariest. thing for the Democratic Party of voter ID passes? What is the strategy of letting the floodgates open up? It's a very, anyways, we can get passes and go to the economy. I just kind of wanted to get your thoughts on this. Let's talk about Anthropic. Okay, so Anthropic causes Chinese AI labs of distillation attacks on its models.

This is a financial time story, and there's a couple Anthropic story. We can start off with this one. Brian, I'm going to come to you first on this, and then we'll go to the other Anthropic story as well. So, let me see, what page is this on? Anthropic, Rob. It's on 19. Let me go to page 19 with this. Anthropic has accused three leading Chinese AI labs of industrial skill

attacks, raising national security concerns for the industry. The AI startup, which developed a popular coding tool clawed. It said on Monday that Deep Seek, Moonshot, and Minimax. conducted industrial-scale distillation attacks on our models. Distillation refers to the practice of training smaller models on the outputs of more advanced systems, allowing developers to replicate high-level performance without the same computing resources.

It has become increasingly sensitive issue as Chinese AI groups grappled with sweeping U.S. controls that restrict their access to Nvidia's most advanced chips, including its Blackwell series, those curbs have forced companies to adopt alternative strategies such as training models overseas using older or smuggled semiconductors and cutting costs through engineering efficiency. San Francisco-based Anthropics said it had identified 24,000 fraudulent accounts

and generated over 16 million exchanges with Claude, which it alleged the company used to train and improve their own models. Brandon, thoughts on this. Yeah, story as old as time in terms of China trying to take intellectual property from other companies because they're not able to be as sophisticated as in developing things, just because of the way their economy is structured. But even though we've had those restrictions on the Nvidia chips, you know, since I think even Biden put those restrictions in, they still found their way over there.

So I think that we need to be much stronger on China. And I mean, that's why things like the tariffs are important. That's why, I mean, any measures are important in terms of being able to inflict pain on them because they are trying to undercut our companies. And when it comes to something like anthropic that's becoming a, potentially major part of, you know, defense and national security. That's not just an economic matter. It's not just a business matter. It's a matter of, you know, national protection. So I think that's, like, all the more reason to not let China have access to the Blackwell chips like they're lobbying for,

like, because I feel that Trump is contemplating it. I feel that people are in his ear telling him, oh, maybe it wouldn't be so bad because he, like, they're going to try and take alternate routes and, like, develop their own stuff. And it might motivate them to make their own, you know, version of these chips instead of using ours. But no, I think that we could double down on of what we're doing, but I'm not letting them have that. Kenneth, your thoughts? I mean, I once asked someone who's a big investor in Silicon Valley, do you think China's going to get quantum, you know, computing before we do?

And he said, only if they steal it. And I think, you know, when we're developing all this stuff, that just is a constant threat. And with AI, it's just huge. And I think it's one of the challenges of we want to, integrate with China. A lot of the world's problems cannot be solved without the U.S. and China acting together. But on the other hand, you know, how do we protect, how do we stay so open and dynamic? I'm in a university system where we really want to be open without being vulnerable

like this. It's very challenging. Tom. The first moment of every new technology is faced with the second moment, which is the first piracy and the first security threat. Barakuta makes email security. Well, Barakuda didn't exist until there was email, Pat, right? And then when there was email and then there was problems and there was spoofing and everything that happened, then Barakuda gets born because now they know what they're inventing against. What you have here with each new technology, you've got techniques of theft techniques that make it vulnerable for the people that are using it. And they're seeing right now what Anthropic is saying, whoa, wait a minute, wait a minute, wait a minute, They're using 24,000, you know, fake accounts to use prompts and calls into clods so that they are figuring it out and they are taking that distillation.

They are distilling the response of cloth and back engineering. Think of it this way. What they're doing is you have a bottle of Coke. Remember we all talk about the recipe for Coke? We all talk about intellectual property. Do you have it in a vault like the recipe for Coke? It's something that we chat about and we make that joke. in American business and case studies.

Well, what if you had a way to perfectly figure out the breakdown, the formula for Coke, and then perfectly copy it? Well, obviously in the U.S., someone would say, wait a minute, you somehow figured this out, you perfectly copied it, I have a trademark, I'm taking you to court. But what if that other player is China? This is exactly what's happening. They're using distillation, so now they need help, but they also need security. So the birth of any technology leads to inevitable security.

Look at now if you've got McAfee or you have Norton on your, which is Intel, on your computer. You have browser protection. You have email spam protection. You have Wi-Fi protection. You have credit card vault protection. You have malware-adware protection. And all of these things happen because now you need, you know, to be protected. No drug was invented without a disease being there first.

You agree? Yeah, more or less, but I don't know. I think part of it is that we have given too much leeway to China. The same thing happened with Russia, too. Like we give like a dose of assistance to these countries, and we turn them into a monster that actually has the power to take from us. So I think, you know, part of it's a creation of our own. Because, you know, like China's where it is today because of us.

like Russia's where it was in the 80s because of us. Like so we have this history of like sort of creating the monster that we end up fighting against. I don't know if that's on purpose or not. It might be on purpose. It might be more financially beneficial if it's on purpose. For the for us. You do. I don't know if it's for us.

I think it's for whoever the president is at the time. When Nixon built China from number 11 economy to 12 economy, 10 economy to number two, and he opened it up, he did it because he wanted a weekend Soviet Union, right? It was kind of like one of those things where at that time, it's like, that's what we have to do. Right. Never did he realize you built a monster.

You know, you build a monster. Once they realized capitalism, how it works, and he went and met with the Japan prime ministering, they told them you have only five banks. Yeah. You need, you know, this many bankers, you need this many, you know, to be open. They opened up like 5,000 banks.

I don't want the number went to. We used to have 14, 15. thousand banks. I think we're down to four or five thousand banks ourselves today. And it's getting, same things happening here. Even to our military contractors, we used to have 70, 80. Now we only have seven or eight competing for

all the contracts. They have a monopoly. There's no more that competition that we once used to have. They call it the prime. I think those guys, the main military contractors are considered the prime Joe Lonsdale was talking about that. But to me, you know, Anthropic, if you want to continue with this, here's Anthropic, Digs

in heels in dispute with Pentagon. Sources say, Rob, I think this is a Reuter story. You got a video clip on this one here. If you want to bring this one up, go for it, Rob. Nervousness is there in the relationship between the Department of War and Anthropic at the moment. This is a really super fascinating story we were talking about earlier in the show that basically the clod tool, they want safeguards against basically mass surveillance, presumably for American populations, and, of course, having basically kill orders being required to be given by human beings. Absolutely. And these kill orders have been something.

of getting a lot of attention on social media on the X platform, for example. They really ramped up last week actually with some of these conversations. And I think this comes down to, again, the big question, which is who owns the data and who has access to the data? Data in the wrong hands can obviously be used for bad purposes, like with any technology. So I think the question whilst this discussion has led to a delay with the agreement is around who's going to own the tools, who's going to own the data, and who can use what with that data. And, you know, that's a big question for any of these big tech platforms that we have going forward.

How much of the risk is opposed to the company itself? As you say, you know, there are other AI players out there. If it's not them, will it just be invariably somebody else? Or do they have the kind of power to have that leverage at this point? I think at this point there are three or four platforms that had the scale that could be an alternative source. So I think it's not exclusive necessarily. Tom, thoughts. So I think he's, this came up over the last three days.

So in that you've got this fight saying the Department of Defense is getting very upset because they wanted unrestricted use. But the companies were saying, but I don't want you to use it on surveillance on people. I don't want you to create a surveillance state out of it. So I'm not going to let you have access to all features if you're just going to, use it to build surveillance state. And the government is like, hang on, you don't tell me what to do, but they're stepping back saying, but wait a minute, you know, we don't want this. And the first place that's going to hit is Europe, because Europe is hyper concerned about the surveillance state, but the complete irony is they gave it up first, you know, the idiots. So that's what's going on

here. You've got a company showing itself to be altruistic. Oh, don't. Don't use this for this or this. Hey, we hunted down this, we hunted down this guy, El Mancho, because we used Palantir to kind of track down his girlfriend, figure out where she was going, and cell phone, and this other thing. And Palantir helped us find and get him. Oh, that's kind of cool. We got a bad guy?

But then five minutes later, it's like, they're like, wait a minute, wait a minute. You can't use this to create surveillance state on the American people or to create this. you know, if you're going to, if you provide it to the government, the government's going to do whatever they want with it. You give gunpowder to the government. They're just going to use it to make as big and as many and as complex bombs as possible. You can't say, oh, don't use that to make this kind of bomb.

That's not going to happen. The minute you're providing this is a defense contractor, that utility, it's going to get used by all of the three-letter agencies. You don't get to dictate how to, if I paid for it, I'm going to use a software whatever way I want. Exactly. buy product. So it puts in a very weird situation, Kenneth. I want to first pick up on something you said, Patrick, about how the number of contractors

are shrinking. I know a young man who went to a very good university, but decided to go to the Navy for five years. And he's very involved in procurement, and I was talking to him. And he said, you can't believe it, how few bidders we have. It shrunk and trunk and truck and they just charge us whatever they like for everything. When we want to buy a part in the Navy, it costs a fortune because there aren't many people to bid it out to. And it actually, you know, somewhat leads into this that with tech, they're going to be very few. It's network effects, winner takes all. And so these big tech companies will have a lot of negotiating power. Now, I do think safety is a real issue. A lot of very talented young people, or at least a few, are

walking away from massive holdings of equity in these big AI companies because they work on safety or are concerned about safety and they're walking away from it. And I think removing checks and balances on that's been a mistake. The arguments, we got to beat China. But what's wrong with that is China ends up getting everything that we do. So if we accelerate our AI, maybe it keeps us like, you know, a month ahead of them for a while, but it actually speeds up what they're doing. I think safety and AI, thinking about regulation and AI, it's a mistake that we're not doing it. And I'm all for the zeal for deregulate and let's not have bad regulations. But I think, actually, this is the biggest thing that I kind of worry about at night with what we might be doing wrong.

Absolutely. I mean, if you think about what sort of civilization changing, job changing, everything changing, AI is what to be concerned about. And I think slowing it down a bit, there are various ideas. I don't want to endorse any of the crazier ones, but their ideas, it would be moving in the right direction. You might be tempted to let Taco Bell's new Lux Value menu go to your head. Because 10 indulgences for $5 or less makes you feel fancy. Like you might think you need cloth napkins. Well, you don't.

use the ones that come in the bag. Don't let the luxe go to your head. Yes, it's funny that two years ago, or even three years ago now, there was that whole committee of serious people that were, they were the committee to regulate AI. I think Elon Musk was on, a couple of big names were on, and that totally disappeared. But this guy, I don't believe this guy at all. I think that this is a good marketing stunt because it sounds really good to say, but there's a reason the government's never regulated how they use data, you know, so it's a sweet deal for companies to have a relationship with the government where the government's able to use their data. The data is very valuable to the companies too, but you've never heard a peep about

regulating the way the companies use data because they don't want to touch that. But you hear regulation talk about everything. So I don't think it's a coincidence that they haven't mentioned that about data, not once ever. Yeah, yesterday when I was talking to Joe Lonsdale about Palantir, Rob, what did he say? What percentage of their revenue comes from government contract? Did he say 51% or 49%? I thought it would be 90. No, it was some number. like it was around 50% what he said. I'm curious because to me I was like, where's the other 50% coming from? Government contractors, maybe. That could be that they were left. So it's still tied to it anyways, right? Still tied to it anyways. I said, so what role do you guys play? And then who can you not

sell to? Who can you not sell your services to? And he kind of went through something. Yeah, 55% various. Government contracts represent roughly 55% the total revenue in 2025. But are the other one still tied to someone that's using them while competitors like Microsoft? And well, I don't know. I don't know what's going to happen because they're now, they never thought one of the investors, one of the early investors in Palantir was the CIA's investment arm. Incutal. Incutal.

Yeah. And they gave them $2 million. And it was spun off from the Total Information Awareness Committee after 9-11. And so it was like, it was something that was rejected by Congress to do from a government standpoint. That was turned into a company. But you know what he said to me when I asked him? I said, what was the mission? Do you know how, Rob, how quickly did he give the mission?

And by the way, there was no hesitation and shameless. It was, let me see Rob say it. Rob, what did he say the mission was? Protect America. Protect America from who? Terrorists. It specifically is that protect America. Western ideology from Islamic extremists.

He added Islamic extremists. I said, that was really your mission at the beginning? Yeah. Absolutely. I said, the first few hundred people that you hired, would you tell them that in the interview? More or less, we would. So the true concern of where it's going and what that information comes. I mean, they tracked El Mancho's girlfriend who was an only fan's girl.

I don't know if you saw this one or not. Can you imagine they tracked what she would? Did you hear about this or no? I did hear about it. Yeah. So they caught El Mancho. That's El Mentiono. By the way, the first one I saw this, El Mancho,

I thought this guy was the same guy from the movie Carlito's way. What's the guy's name? You know what I'm talking about? What is the actors? He's got a weird last thing. He hates Trump, by the way. John Liguizamo. By the way, tell me he doesn't look like John Liguizamo.

He looks just like him. So apparently the girls is an only fan's girl, and a tractor and through that they got him. So you're making a point, Tom, like there is some good that's going to happen with that, but what other things could you do? with this. This takes me to the next story that I'm curious

what position you guys are going to take with this. And by the way, Rob, with this one, I wouldn't mind running a poll because I'd like to see what the audience says about this as well. There's a story that came out. This is a CNBC story. I'm trying to find this story about robots. What page is that on?

There it is. AI robots may outnumber workers in a few decades as firms ramp up investment. Okay. AI robots? Yes, folks. AI robots. So what is the world going to look like? Okay, so AI robots will exceed the working population within a few decades as more firms adopt AI agents and continue to squeeze costs. Our former city executive warned on Monday, Rob Garlick, City Global Insights, former head of innovation technology and future work told CNBC the following.

Is this him, Rob? Yes, sir. Go forward. We're going to go over the next couple of decades to more moving robots than working population. And then you add on agents, little agents, and it is going to explode. So we will have, go from less than 1% of working population, to more than the working population with non-human workers. And you do this cheaper and cheaper and cheaper.

And just as an example on that, aha moment, if you don't mind. No, of course. When we looked at robots, we had nine different forms of which humanoids are the most difficult and the most sort of far out there. But you can already buy a humanoid today, which gives you a payback period versus, versus, human workers of less than 10 weeks. Humans can compete on this basis.

And so this, and we're only just embarking on this, on this phase. Brandon. Payback, meaning like they, they can work and return, like the money you spent on them. Yeah, it's insane. So, I mean, I've been saying for a long time,

I think whoever creates the first fleet of robots is going to be a threat to national security because it's going to be the most powerful military in the world. You know, if you have 100,000 robots that could run faster than you, that could, you know, jump higher, that could shoot with precision, that could fight, that are almost indestructible.

How's that not the most powerful military in the world? And I mean, it's going to be a private company that creates that first, probably Tesla. So what do we do about that? It's going to come just like the Palantir stuff. It will have its benefits. The economy will be more productive. Things will be cheaper. We'll have deflationary innovation.

But, I mean, there's always the risk of the person who creates them wanting to, you know, take over blocks of land or take over the country or do malicious things with it. So, yeah, it's a bitter. sweet thing. How excited are you about robots? Well, I have to say my wife and I were talking yesterday, it'd be nice to have a robot do our dishes. But I think everything Brendan said is very scary about the military applications. I'm wondering if we'll soon hear that we need a robot's union or something like that. But no, I mean, I don't know how fast it'll happen. There's questions of materials. I think these things tend to get hyperbolic. But in general,

AI and automation on jobs is just huge. There's a big debate in the elite economics community about is it actually ultimately really productivity enhancing, makes us all richer, or is it throwing us out of a lot of jobs? And I worry much more, at least for the next 10 years, about just massive job loss among white-collar workers, very good jobs, middle-income jobs, just disappearing. And I think that's part of why the stock market's going up so much. Companies see they can do more for less. Less of what? Less workers. And I certainly see it with my students, other young people. The number of jobs is thinning out. They're not quick to hire, fire the existing workers, but it's slowing down. So that, but anyway, what Brendan said about the military applications, that is really scary of robots, of

AI, of drones, you know, things that we see as movies right now, you know, Star Wars and things may just be here in our children's lifetime, if not in ours. Wow. How long you've been teaching at Harvard? I've been teaching at Harvard 26 years. 26 years. So 26 years, this is 1900 and, what is it, 191990.

And I'm not a young man. I've been teaching longer than that in other places. So, but how, from teaching in 1990, to today at Harvard, the best of the best, brilliant minds, young kids come in here that are probably the best in their class, whatever high school they want to. What are you noticing concerns, language, patterns of what they want to do next, what they used to say they want to do, that they're no longer wanting to do,

what job, trajectory, career planning? What patterns are you noticing? Well, it's a good question. I mean, one of the things it just took me a long time to learn, every class is different. You think you taught the class just a year ago. You think you know the kids, what their cultural issues are,

what jokes you can make, what you can say, what they'd understand, and it just changes so fast. So it's hard to make like a generalization about it, but actually, I mean, the very young generation coming up is actually rebelling against what you, You would think of the classic college students, they're, you know, very motivated.

They, you know, don't feel, I think, as entitled as maybe a generation did for a long time. So I think it's actually kind of a good sign about young people that I'm seeing. But, you know, it goes in waves. It's hard to make a generalization. But on the whole, they're amazing. I mean, it's an incredible privilege to teach at one of our great universities. Tom, your thoughts on robots. So I think this gentleman was wrong.

He's sitting there saying two decades. It's not two decades. I see what's going to be happening in 36 months, and I also see what's going to be happening in seven years. And the two gaps that I, not gaps, but the reason I carve it that way is because there are, there is a lot of material battery and a lot of things that's needed in these exotic materials. And the demand for these, for the humanoid robots,

is going to be very great, very suddenly. However, don't look at the humanoid robots. Just go and find a video of the robotic attendance that run around Amazon distribution centers. These are robots that can carry 300 pounds, and it looks like just a little square box with wheels on it. But it knows where it is. It knows where it's going.

It goes and pick stuff up, and it runs around. You go, there they are, Amazon distribution. centers. They're moving around there. They're picking things up. This is, this is robotics. And this means, there it is, the little orange guy at the bottom, he can carry like three, 400 pounds. And so he goes and he picks this up and puts it over there, takes this over here. And there's no people in that distribution center doing this part of it. And all those products are ending up in cardboard boxes that say Amazon with a receipt coming to you and me. In some cases, in an hour. And so

this is robotic technology taking warehouse jobs. You go back there, Rob, one. You see all the little blue ones that were running there, all on the floor? Yep, it doesn't, you don't need humanoid doing this. That's what people think of robotics. What you really have is you've got all

of these things and tasks that warehouse workers used to do being replaced by robot. There's a robot arm just doing it. Pickers and everything. Look at that. Wow. Look at that. There they go. There's those little blue ones run around handing things to each other. And so these are warehouse jobs going away, and it's not the green guy with the headlights. What it is is all of the things that warehouse workers used to do being done.

This is robotics at work. So in three years, you're going to have the humanoid demand runs into a problem because they need batteries, they need lithium, they need all this thing, they can't get it. It's the same problem as EVs, need the same kind of. of things and the fence needs the same kind of things. Now seven years, that's where I see the cataclysmic effect on certain white-collar work. And that's where you have AI that makes the robot go, now creating replicants. That's the word for it. You teach skills to a replicant and then the replicant does those things does those things for you analysis financials close the books reconcile the credit card statement all that happens automated so seven years you're going to

see the beginning of a cataclysmic effect as a i has the impact on white color work but in three years you're going to see all these stories about how much more of these raw materials we need to build the robots and it's not all the humanoid robots, but that's going to be part of it. People see the humanoid robots and freak out. I look at the Amazon distribution center and I say, that's today. I mean, and so the union is probably going to push you to go robotic and AI even faster because these machines can run 24-7. They can work out 1 o'clock in the morning, 2 o'clock in a morning, 3 o'clock in a morning, 4 o'clock in the morning, nonstop, 24 hours. Maybe you've got to come and lube it up or, you know, give it something that it needs, but it keeps going, calling in sick.

The mechanic comes in, fixes it, they're back at it again. You don't need to pay them health insurance. You don't need to pay them 401K. They don't want benefits. You simply buy one and they go do the work. That's scary to the average person when they hear that. The UAW has tried to limit assembly line automation. And there are certain things that happen on assembly line for cars as they come down where there's welds.

and the automakers found out that the robotic arm made more accurate welds, and you eliminated certain safety concerns with the humans sitting there doing the welds. And you saw these large arms that would go out and do these things on the assembly line. The UAW freaked out, and they were trying to put clauses in their collective bargaining agreements that said you could not replace more than X assembly line workers a year or per two years or duration of contract. And they were trying to limit it. And meanwhile, the automakers are, well, I could run that line doing the, Rob, you can find these pictures of it, doing the welds of the skeleton of the car.

I could run those 24 hours a day. And I could have all those things set up. And the UAW was trying to limit it, to your point. I mean, the thing a lot of economists have argued is you should at least tax it. Like, people have to pay Social Security. Robots do not have to pay Social Security. How do you balance that out so that when someone's looking at what to invest in, what technology they should go to, they think about that problem?

What do you mean by at least tax it? Well, you can tax profits more. You can tax capital gains more, not necessarily specifically the robot we're saying in the Amazon factory. If it goes this direction, if it goes this direction, and what's national debt right now, Rob? 36 or 37? I thought it was hired in it. But let's just say 36, 37 trillion. and, you know, I saw a number the other day that the national debt could, yeah, I thought it was 39 trillion.

Okay. Oh, wow. So 39 trillion. And 40 by Christmas. You saw the number, you saw the number that said within just type of national debt, 60 trillion could be, it ratio was shown of 100, 203 percent, 108 percent. In 10 years, U.S. government will have 55 to 60 trillion dollars national debt, which will be seven and seven and seven. seven and a half times our revenue, because there will be $25 to $30 trillion of additional borrowing. That amounts to about $425,000 a debt per family.

It's under $120,000 today, $120,000 right now. Well, Tom, this may be something they got to get too quickly because, one, on the companies end, companies are going to do what's going to be more efficient. You're going to do what you're going to do to be more efficient, right? unions are going to push them to work even faster. Profits is going to get them to go. But then if any society with a lot of people with idle time is not a safe society. So you have to be thinking about that as well.

So is that going to be transitioning into a new job? Are people going to be doing new things? Nowadays, when we get people that come in, I got a young guy that came in applying for a job, 23 years old from New York, who everything he does is with AI. And you're looking at it and said, okay, this is very impressive what this guy got going on. I'm talking to Joe yesterday. He's talking about how there's this nerds competition of engineering that this guy won. And so this is where they recruit from, bringing that guy in 18, 19, 20 years old. They're getting signing bonuses of a million, five million bucks to go to a company.

You can choose to take it as cash or as stock because you believe what direction the company is going to. So they still are aggressively recruiting these young guys that are coming in. But what will be replaced? where that, you know, we've had this conversation before on what inventions cost people to go to a different job. But this is not, this is slightly different, though. Yeah. This is slightly different.

This isn't like TV replacing newspaper or internet replacing TV or, you know, this is someone can do your job better than you. As an economist yourself, okay? How much has, does Claude or ChadGBT when you run the reports, how much faster and better can they do their job than you right now? Well, they can all do it better than me now, but that's a different matter. Can you comfortably say that?

I mean, there are things if I look at, you know, write down my test questions and have any of them give me an answer. It's pretty darn good or an essay question. There's no, I think I can do it a little better, but, you know, no, it's amazing where it's going. It's a big debate. So you can find Nobel Prize winning economists who say that it's just going to be terrible. A lot of jobs are getting lost. And others who say that it's Nirvana.

I'm certainly more in the camp of like what Tom is saying, that near term, it isn't going to be a pretty picture. It's going to cost a lot of jobs. And that's another reason to slow it down. We have to, as you say, it's not a stable society where lots of people have lost their jobs, where they don't feel hope, President Trump, in part, got elected by playing on that theme with manufacturing. That's nothing compared to what's going on with other kinds of jobs, which are a much bigger part of the economy that's coming down the pike. And so, you know, finding ways, how are we going to tax these new agents? How are we going to, you know, create balance?

How are we going to give people agency in their life? Big questions, good reason to slow it down. All right, so I'll take a different take. So maybe this is the way that American manufacturing comes back because it's in, it's even with the best tariffs in the world are an aggressive plan, it's impossible to compete with other countries that could pay far less than us with what we would have to pay American workers here. So if America is the first to have factories like this that have AI mass producing products,

then maybe that's a way for our manufacturing to come back in a superpower type of way. But not necessarily jobs. No, but bear with me. So every 100 years, like half the job market gets wiped out by new technology, right? So, you know, it was with agriculture, with factories, with the internet. So we don't know what the jobs are going to be yet, but there probably will be needs and services that we do need that we aren't even thinking of right now that become new jobs. There probably will be a lag effect with how fast day I is going where there's a couple of years

where there isn't enough jobs, but I'm sure the needs will surface because, I mean, it just has every other time, right? But this is really fast, though, compared to the other time. That's the scary part. If this was unfolding slowly over 100 years, I think we would just think it was progress, but it's the speed that scares people. Yeah. Let's go to the next story, Tom. Paramount, newest bid could open door of beating Netflix deal Warner says.

And this is a Wall Street Journal story. Rob, I think you got a clip on this. Is this just an AI reporting it or is it an individual, Tom? It's an individual. Okay, go for it. Warner Brothers' discovery on Tuesday reopened the door to a takeover by Paramount's guidance. That is after Paramount raised its offer for the studio to $31 per share. The intense bidding war for deferred behind Batman and Harry Potter has reached fever pitch,

with the board signaling that Netflix may lose its place as the preferred suitor. In its revised bid, Paramount also raised the termination fee it would pay should the deal fail to gain regulatory approval to $7 billion, up from $5.8 billion. It also agreed to pay Warner shareholders $0.25 per share per quarter for every. quarter beyond September 30th, that the deal does not close. The rival bidder also agreed to contribute more equity should banks raise concerns about paramount's ability to finance a deal when it closes. Warner's board said it has not determined whether the revised proposal is superior to a merger with Netflix, but said directors would give it further consideration. Should a

superior deal emerge, Netflix has four business days to revise its offer. The streaming giant has offered $27.75 per share in cash for the movie and television studios, its catalog, and HBO Max streaming service. None of the firms involved. comments said on reports of the new offer. Yeah, so the 27.75 at 72 billion, and the prior bid by David Ellison was $30 a share at 77.9 billion. Tom, what's going to happen here, Tom? So it's a tale of two cities. Netflix wants to buy the library, and then Warner Brothers Discovery will take the cable nets,

most notably CNN, and put them in a small public stock and throw it out on the stock market where it will languish during the conversion and the deterioration of cable. subscribers. That is my supposition, but many, many, you know, analysts are behind me on that. And that is, okay, all these cable nets go here and Netflix gets the library. Paramount is saying, no, no, we'll take the whole thing, and we'll take the whole thing for 31 a share. You don't have to spin out the cable nets. We'll take the whole thing. People in Hollywood have been behind the scenes. They don't want Paramount to do that because they don't want to have CNN moderated or worse, Eke GAD made slightly conservative, which is what they've

seen happen to CBS. They said, oh, my gosh. Well, there's only one Barry Weiss, but she's at CBS. Eke, what sort of horrible person could he put, you know, on top of CNN? This will be terrible. We would have left, right, and center media. People would have ways to make up their mind. We can't have that.

You know, so Paramount, so that's, I'm not being silly. That literally is the playing field. So Paramount has come back and said, look, we're going to sweeten the offer. We're going to take it to 31. And here is this. And by the way, you said we couldn't get the debt? The number one to number four richest guy in the world, depending on what day it is, you know, is backing it up with the family office fortune.

So he doesn't even have to go to, you know, the banks to go get the money. He doesn't have to go to Wall Street to get the money. He has the money. And so this is what's going on right now. And industry insiders all wanted it to happen. However, it is also a truth. And the Federal Trade Commission feels this way. And it's not a bunch of Trump people that say,

oh, Larry Ellison is the friend of Trump's. No, federal trade commission is saying, now, wait a minute now, what's better for the consumer? Where will the consumer get something of a benefit in prices? because consolidation is bad. You just brought up the defense industry, and you did a story on this podcast over maybe two years or less ago about how there was 15 major defense contractors,

and all of a sudden they'd end up down at Northrop, Grumman, Boeing, and a couple friends, and that's why there's no choice for the procurement officer at the Navy, and you have to pay whatever they'll charge you for a hammer. This is why Federal Trade Commission said, The Netflix library going to Warner, going to WBD, consolidating it is not good. It'd be better if a third party emerges in all of this. So you've got Disney over here, Paramount and Warner Brothers over here and Netflix over here.

We think that's better. And that is what was happening a couple weeks ago. What do you out with this? Well, the consolidation is offering less options for creatives to mark. And I think the bigger picture here that I worry about is that, you know, our soft power, Hollywood has been one of our, you know, big exports. And we're, it's destructing. It's self-destructing to some extent. The strikes were a disaster. Like they said no AI. Well, that means that other countries that use AI are going to crush us with their, with stuff. So my, I mean,

And Tom gave a great summary of what was going on, but my big concern here is where are we in the future of creativity and what we watch and what we see, is it going to just be like a couple of competitors? I mean, already, it's much harder to get sort of middle-price movies produce, say 50 to 75 million. I know that sounds like a lot, but, you know, instead it's the $300 million blockbuster or you make it for $3 million. And that's partly a problem of all this consolidation. So I think there's a real concern about Trump said it of how we keep Hollywood on top and having just a couple places you can sell your stuff to is not helpful. But wait, one add to that. Paramount says that there's less risk for us because we're actually going to try to sustain and keep theaters there.

Whereas Netflix is a pure streamer, they specifically, have decimated the theater business. And Paramount says, we want theatrical releases. We want people to come together in community and see movies. We want it to be profitable, but we want to do that. And Netflix, people say, they're giving lip service to it. It's going to be all streaming. Yeah, I took the kids to go watch Goat this weekend.

I don't know if you've seen Goat, the new cartoon, the movie by Steph Curry. Yeah, right there. it was great experience, no weird things in it, entertaining, laugh, inspirational, motivational. It was fantastic. We went home. And I looked at the theater to see how it was. It's the first time I went to a theater where half the room was full,

which was actually pretty good. I haven't seen that in a long time. And it's part of one of the American things. My son the other day says, what would you say is the most American thing to do? Dylan said, owning a gun. And then he goes, you know what, that's, I would say he's joining in a military. And then I think Sena or Jen said having pizza, right?

You know, you're just kind of going through a list. What other thing is going to the movies, man? Getting your popcorn and your icy and sitting there and, you know, maybe getting a hot dog and enjoying, it used to be three or four commercials. And it's like 72 commercials they play for you with everything that's going on, but still sitting there and enjoying a movie. So I don't know. I think the bigger discreet.

here with all of this stuff that's going on to me, I think the bigger disruption is the independent creators. I think it's the young guys that are coming and creating content. A, Mr. Beas did a video one time. I don't know if you've seen this video. He counted backwards from 100,000. I don't know what it was. He did one crazy video at the beginning of his career.

He said, I'm going to count from 1 to 100,000. It took him like 10 hours, 8 hours, 15 hours, 20 hours. Somebody may say, who has that kind of time, right? Rob, can you find this video when he's counting? Oh, I count it to 100,000. Yeah, right there, don't play it. But I counted to 100,000. Look how many hours it is.

Do you see the hours? 23 hours and 48 minutes. It's insane. How many views does it have? 33 million views. By the way, for each million view, AdSense pays you roughly 5,000 bucks, give or take. So what's $5,000 times 33?

That's $150,000 getting paid to count. to 100,000. Okay. And by the way, his company that he started, smaller the YouTube channel, 2024 did $480 million-ish top line revenue. Last year he did $889 million. And a new CEO of his company is a previous CEO, I believe, of SoftBank and guy who was with, who was the guy, Rob? Who was the company that the CEO was with before? He came to him from, he was previously with SoftBank and one other company. One other company was with very well-known company that he was a CEO of that he left to go down, Rob, so it shows his background, go a little bit lower again.

Go a little bit lower. No, this isn't the guy. It's a different guy that he literally just brought on board. And they're talking about what they're going to be doing. Companies valued right now, anywhere between $5 to $10 billion. So I think no matter what they're talking about, Mr. Beast is going to build something that's probably going to be worth a half a trillion. okay over the next five 10 years so all this stuff that they're talking about disruptions coming from

the independent content creator and how they're going to control them i don't know how you're going to control them i don't know what you're going to do with those guys i think that is coming and it's going to be exciting in the game uh as we enter this next phase let's do one last story before we wrap up i'm trying to see what story to go to before we wrap up let's go to panama canal let's go to panama canal okay Panama canal to occupy courts after court scrapped C.K. Hutchison deal, which, by the way, very interesting that this took place. Rather, if you want to play this clip, go for it. Panama Supreme Court has thrown out a decades on contract that allowed China to control its key ports. The ruling has sparked

retaliations from China Wednesday, adding geopolitical tension around one of the world's most critical shipping routes. Hong Kong-based, C.K. Hutchinson says it attends to dispute the ruling and warns this could have major economic consequences. Sakey Hodgson says it's seeking extensive damages after Panama ended its agreement to operate the Balboa and Cristobal ports. Meanwhile, Panama's authorities have already begun inspections on the ports. They ordered the company to grant full access to property, data, and staff. Chinese officials called their recent ruling absurd.

They warned Panama could face serious political and economic consequences. Panama's president says the country is asserting its sovereign. It's now in talks with Denmark-based APM terminals to keep the ports running while a new public bidding process is set up. The Panama Canal handles roughly 40% of U.S. maritime cargo traffic and about 5% of global trade, making control over nearby ports critical. Analysts warned Chinese control near the canal could threaten U.S. national security, disrupting trade and military access during a conflict. Last year, President Trump said China shouldn't be controlling the canal. adding that the U.S. handed it over to Panama and now wants it back. There you go.

Panama's ruling is a major win for the U.S. My favorite line of the whole thing from the government. So Panama's Supreme Court says, yes, the Panama maritime forces need to take control of the two-sided. Diego is one of them. And so when you hear those words, those are the two exits, the exit to the Caribbean and the exit to the Pacific Ocean. And lovely, I love this, Pat. It says, we will return the property,

including cranes and industrial equipment when the determining reason for the occupation ceases. Well, what is the determining reason for the occupation? And everybody is looking no further than Langley, Virginia, and saying that, look, the American CIA and American interests have told Panama said, listen, here's the deal, man. you know, you can't let the C.K. Hutchinson, you know, sell to anybody outside, but the Chinese government is putting their foot on the neck of C.K. Hutchinson determining who they're going to sell to with control. So, well, we're kind of stuck because of the Chinese and said, all right, well, then we'll do it this way. You take control of it because of some national emergency, which one? I don't know. Just have your Supreme Court say that you're doing it. And that's what they did. just basically said they were doing it. They woke up on one morning, Pat, and did it. So what this

means is that I believe U.S. interests are being served because the U.S. is working with Panama to say, listen, one way or another, we've got to take care of C.K. Hutchinson and move them out of here. They're not allowed to sell on the open market because China stepped in four months ago and put their boot on their neck and didn't want them to do it. So they're doing it the other way. They say, okay, we'll just do it this way. And that's what's happening. The U.S. U.S. interests are being served so that China and Hutch don't have the control of these two key ports, and this comes back. And the U.S. is going to make it look like Panama is in full control, but we will be in full control of it to the benefit of the Panamanians, who the tax dollars and everything,

will go to run their country. And that's what's going on. But I love this. You know, it'll all be returned to Hutch when the determining reason for the occupation ceases. What's a determining reason? I can't tell you. Look, I mean, this is a legitimate exercise of the Monroe Doctrine that says we don't want foreign powers in our hemisphere. And China's finding out something that we found out a long time ago, which is just because you invest in a country and you build stuff, doesn't mean you get to keep it. You have to have military power to do that. China's now concentrating on that. We probably need to also.

For Panama. for everything. I mean, Bill, you know, there's a, a lot of these things can't all be determined. Military power is very important to U.S. dominance, to dollar dominance. You can't just keep running it down and expect to stay on top. Yeah, it's, it's super smart and sophisticated the way that I think, like, I think Trump's behind all of this because he started talking about it at first. At first, he wanted to have BlackRock by the ports from C.K. Hutchinson, but then that gets rejected by China. China says no, C.K. Hutchinson, you can't sell that. And then all this time goes by, everybody forgets about it. And I assume Rubio maybe was talking to the president or the

judge there who did that where Trump was talking to him. And they come out as if it's their own idea to do an investigation into C.K. Hutchinson and deem that there's irregularities. So, yeah, there's no way in the role, in my opinion, that they decide that by themselves. I think that's all the administration. So great move. I mean, you know, the first one didn't work out. So this is a good plan B. Yeah, and again, to me, if you go and look at the history of it, Jimmy Carter could have kept it. Yeah. He was a little bit too casual with what happened with Panama Canal.

He could have taken it. If a president, Trump was president during that time, it would have been a very different story of what would have happened in Panama Canal. But I'm so glad they're doing this. The question here is the following. Do you really think China's going to let this go? No. You really think China is going to sit there and be like, oh, really? Okay, great.

Let's move on to the next issue. there is no way they're going to let that happen. I believe C.K. Hutchinson owns, I don't know how many ports it is that they were trying to sell to BlackRock. I don't know why I think about the number 42 or 45 is you can pull it up. And of the 40-something ports that they were buying, some of it was in Mexico. And the two, the Balboa and the other one that they had were the main ones. But the deal was, how many C.C. Huntson's Ports on it? in the deal, the $21 billion at 43 ports.

Okay, so they were trying to get a proposed $23 billion out or sale of 43 ports that they owned is at risk. The deal includes two ports at Panama Canal. Can you go a little bit inside the article? I think some of it was also at Mexico and other places, not as important, but it was all over the place. And that deal is gone. So Costco had initially indicated an interest in minority stake

of 20 to 30 percent in the non-Panamo ports. The shift is position as raised concern from the buyer. and some people don't trust Costco as well because Costco's ties. Some people don't trust BlackRock. But guess what? I trust both of them more than I trust China-owning Panama Canal. Yeah. Were you going to say something?

No, here, here. Yeah. Yeah, so I trust those two more than China-owning yet. But I do think retaliation is on its way. What retaliation looks like? I don't know. That president of Panama, he wouldn't speak that way. if America didn't give them the nod to say,

we have your back. Exactly. Do you not think a call took place where they said, hey, I'm going to do this and U.S. said, go right ahead. We have your back. You don't think that phone call was made? Yeah.

And right after Venezuela, like as the proof of that boldness? I think that president needed the protection from U.S., and I think they gave it to him, and that's why he acted that bold. Exactly. If Biden was president today, he can't be that bold. No way. I know you don't agree with that, but if Biden was president, he couldn't be that bold.

Because I don't know how involved Biden would have been. His schedule is tight. It's 10 to 2. You got four hours of work time with them. You have to get some rest. I mean, respectfully. I mean, some people need more rest than others. But rest was a very big priority for him.

But if Biden was president, a weaker president, there's no way in the world that guy speaks. Did you see the way he was sitting? You're telling China the second largest, you know, you can go to hell? Yeah. By the way, the moment Trump is out, China's going to come back and say, hey, now that a progressive AOC is president, you want to talk like that to us again? Option one. We want to give those porch bards. You have two choices. What do you want to do? It's funny yesterday I'm talking to, again, I keep going back to the conversation because it was so fascinating. I think the conversation's coming out next week. I said, so how do you think it needs to be handled, the Iran and issue that's taking? place. He says the way Romans did it. I said, tell me more. He says, go in, kill all the first line of leaders. And then say to the second line of leaders, you guys better be checked or else we're

going to kill you as well. I say, you really would do that? He said, that's how the Romans did are back in the days. What a way to go about it, right? At least the guy was being very honest and straight up. But final thoughts, I'm curious what you'll say on this. Kenneth, what do you think's going to happen with Iran? What do you think is going to happen? I mean, you got everything that's over there right now, but what do you think will happen? Boy, I have no idea. It certainly seems like President Trump's lined up and either

get something really serious on nuclear. And after all, if Iran gets the bomb, that is transformative and global peace. There's no question about it. Either he gets something really serious like nothing we've seen, or we're going to have some kind of war. He said that specifically yesterday. where the negotiation was, no nuclear, is this it, Rob?

Or it says no nuclear bomb ever, ever. And they're trying to say three years. Why are they saying three years? Because they want an easier person to negotiate with next. Did Rob, played a clip? Of the roadside, man. Can you fast forward to him speaking about? The last couple of months with the protests,

they've killed at least, it looks like, 32,000 protests. 32,000 protesters in their own country. They shot them and hung them. We stopped them from hanging a lot of them with the threat of serious violence, but this is some terrible people. They've already developed missiles that can threaten Europe and our bases overseas, and they're working to build missiles

that will soon reach the United States of America. After midnight hammer, they were warned to make no future attempts to rebuild their weapons program in a particular nuclear weapons. Yet they continue starting it all over. We wiped it out and they want to start all over again and are at this moment again pursuing their sinister ambitions. We are in negotiations with them.

They want to make a deal, but we haven't heard those secret words. We go. We will never have a nuclear weapon. My preference. Key word was what? Never. They're asking for three years. You can pause it right there.

He says, we want those secret words. We will never, because right now they don't have a missile that reaches here. And the foreign minister from Iran, did you see the interview time with the foreign minister of Iran when he's being asked about? Oh, I'm not going to tell you my plans. I don't need to tell you this. Is it true that, you know, you said there's 40,000 Americans that are around in the Middle East, He says, well, yeah, if you attack us, it's self-defense.

Everything's on the line. We have to retaliate, right? The foreign minister of Iran. So I don't know. I don't know what's going to happen. I do know what they're asking for is never. Yeah. Never.

You sign in a contract, never. How that protects the next president to come in and say, we feel bad for Iran, let's allow you to do it because we want to make sure you feel safe. I don't know. I think regime change before he's out. You what? I think regime change before Trump's out. regime change in Iran before he's out

before Trump's out. Do you agree with that? I mean, I don't know that we're going to get a regime change in the direction we want, but I'd say it's more than 50-50 that we will. You're at 50-50? Well, I need facts. I don't need 50-50s. I'm kidding with you.

Can't have any more economists on your show. Anyways, having said that, sir, great having you on, really enjoy the perspectives. You know, what I'm not. I like about you is you're very fair and you're very honest. You know, you're like, hey, I'm from a liberal school. This is my background. However, here's where I'm at. You know, and I appreciate that because you can sit there and give you a perspective on both sides. And is there a, okay, so you have a book that came out last year, our dollar, your problem, and insiders view of seven turbulent

decades of global finance and the road ahead. What is this book about? It looks at the art. of the rise of the dollar, of course, behind it, the United States economy. And we've had some luck along the way. We've made some good decisions. Our foes, our competitors have made some bad decisions and look at to where we've arrived at today, where I actually think for 10 years before the current president, the dollar had been in decline in its use and its dominance.

Where it goes ahead, I worry about, because I think we briefly brought up data. I don't think anyone thinks they can get elected if they try to do something about it. And I think we're going to have a debt crisis at some point because the American people just aren't prepared to compromise until we do. I think the fact that China really has decided to separate. They probably want to take Taiwan at some point. They know we're going to put on financial sanctions.

And we've weaponized the dollar. It's kept us out of some wars, but it's given them a lot of incentive to do. diversify. Europe today is doing the same thing. I mean, they were stalled a little bit, and now you just say Greenland, and they're moving ahead. But anyway, I tried to write it in an engaging way. You can decide. It is about economic issues. I'm happy to give you a copy. I brought one for I'd love to. I'd love to. I brought one for you. Thank you so much here. So, and hope you enjoy it. I appreciate it. Can you sign it for me as well? Of course I will. Thank you for that.

and we will gladly dismiss you back to the incredible weather you guys have over there in Boston right now. I know you're excited about going back. I don't want to hold you back. You almost look like you want to run out of here, so I want to make sure you get there as soon as possible. Folks, if you enjoy what you have to say, go support. We're going to put the link below. Rob, let's put the link below to the book. I actually enjoyed it more than I thought because I think you are very fair.

I think we need folks like you that are able to take sides and, you know, give credit to both sides and you're able to do that gang um tomorrow rob what podcast goes out tomorrow uh secretary christie noem oh secretary christianome we had a very good hour and a half conversation uh yesterday or two days ago a lot was covered and uh that'll go release tomorrow and then we'll do friday back at home team take everybody god bless bye bye bye bye