The Bulwark Podcast - Zerlina Maxwell and Josh Barro: We Are in a Bad Place

Episode Date: August 6, 2025

Gerrymandering has always been partisan, but what's happening in Texas is straight-up racial politics. Republicans are targeting and trying to disenfranchise black voters while betting that Latino voters will stick with them. And because Trump hasn't had a lot of luck making the furor over Epstein and Ghislaine go away, JD is stepping in to host a totally 100% aboveboard damage control session at his house—with the top officials at the DOJ. Plus, the U.S. had almost zero job growth in May and June, the economy is slowing, and prices are ticking up. Josh Barro and Zerlina Maxwell join Tim Miller. show notes: Tim, Sam, and Will Sommer on the MAGA girl meltdown Zerlina's book, "The End of White Politics" Go to https://zbiotics.com/THEBULWARK and use THEBULWARK at checkout for 15% off any first time orders of ZBiotics probiotics.

Hello and welcome to the Bullwark podcast. I'm your host, Tim Miller. I got something of a quadruple header for you today. I'm off a vacation. So, you know, buckle in. Over on the Bullwark takes feed, I'd employ you to check that out because with Will Summer, I discuss an insane MAGA influencer girl feud. that includes accusations of public fingering at a TPUSA event.

So if you just need a little dessert today, I would check that out. Sam Stein is on T&L. JVL's out. So me, Sam and Sarah, are doing politics talk. You can check that out on the next level feed. And right here on the board podcast, it's a double header. In segment two, we got Josh Barrow talking all things, the economy, that jobs report, questions at the Fed. But first, she's a political analyst and host of Mornings with Zerlina on Sirius XM.

Her substack is the Inner Work Dispatch at Zerlina Maxwell. What's up, girl? What's up? How are you? I haven't seen you in a long time. Yeah, it's been too long. I'm doing pretty good, all things considered. I went to Universal with two seven-year-olds yesterday.

That's so fun. So, you know, I'm alive, right? No, that's really fun, though. Was it yesterday or was it Monday? It was two days ago. It feels like yesterday. Actually, I flew all day with the child yesterday. Lean into the inner child.

We were embracing that. That's true. Some whimsy. Yeah. Finding some whimsy. I found a little whimsy on the Jurassic Park ride, I will admit. So we're doing good. Have you caught any of the of the Maga Girl feud?

I have not. That was my first time hearing about it. You're in for a treat if you check out that video. You're in for a treat. I got to tell you. People are coming out of the woodwork. Anyway, it's something else. All right, let's do some real business, though.

I want to first talk to you about the Texas redistricting stuff. There continues to be, I guess, new developments on that front. Greg Abbott yesterday, I began acting to remove Texas Democrat Gene Wu from office. He's, I guess, the ringleader of the group of Texas Democrats that have left for Illinois to deny the Republicans a quorum to redraw the districts. There are a couple of different kind of elements of this. I want to talk to you about, but just first on like the straight anti-democratic element of it and how that has really kind of infected like the Republican Party, you know,

stern to stem here. I've been thinking so much about how to talk about the Texas. is redistricting in a way that breaks through some of the media narratives around what's happening. Because every single story I'm reading in the mainstream press is about how this is partisan gerrymandering or that this is hyper-partisanship. And one of the things that I keep going back to is the reason why this is happening now, right? There's partisan gerrymandering. That's the thing that happens in blue states and red states. And that's something that we've tried to deal with for many, many years.

But it's happening now and in this administration for two reasons. Number one, the Republicans do not want to have to answer to the voters based on the policies that they have passed, right? They don't want to have to face the voters and explain why they kicked off millions of people from Medicaid and taken away food stamps and are trying to make the lives of the American public harder instead of more affordable, which is what they ran on in 2024. for. That's the first point. So that's why it's happening now. Yeah, one theory that they could have done is, you know, tried to pass popular things. Imagine that. That the people liked and then maybe they

wouldn't have found any issues in the midterms. Politics was supposed to be, right? But the second reason is something that really is getting lost in this conversation and it's something that I've been thinking about for a long time because I wrote a book in 2020 about the demographic shifts in the United States. And Texas, it's no coincidence that this is happening in Texas because Texas is one of the states where the first, one of the first states in the country where the demographic shifts are shifting towards a minority white electorate. And that's why this is happening now, right? It's no coincidence that it's the Trump Republican Party that's doing this. But basically, they're trying to consolidate their power and dilute the power of the demographics, the non-white

electorate that is growing in numbers, that don't like their policies, but also that they are antagonistic towards the other policies. And so if you dilute the power of Latino voters and black voters and AAPI voters, then you don't have to worry about being racist or discriminatory or aggressive in terms of your ICE tactics. And so I think that there's two reasons why this is happening now. And it's not just hyper-partisanship. That's something that's always existed. Partisanship is a thing. It's not partisan gerrymandering. In my opinion, it's racist gerrymandering. Yeah.

I just pulled up your book because I forgot what it was called, The End of White Politics, How to Heal Our Liberal Divide. The subhead, you know, I don't know, the healing is still coming. The healing didn't happen. The healing didn't happen. It's a lot worse than I predicted, so much worse than I predicted. That's the only regret I have about the book is that it has gotten so much worse than I thought it could get. I hear that.

I mean, I wrote a book about trying to analyze why people went along with Trump. before Trump came back. So, you know, sometimes things don't age. You know, aspirational healing our liberal divide is important, though. Here's the thing about this redistrict for me is for a long time, even really aggressive, partisan Republicans that did not care about the rules, like felt like they had to put up a patina of a rationale for something or responsibility, right? And that's actually a good thing.

It's kind of like how I'm always on the side of virtue signaling people, Virtue signaling gets a bad rap. And I'm like, if people feel like they have to virtue signal, that's better than the alternative, right? Ideally, we'd like for people to have actual virtue. Absolutely. The virtue signaling would be the next best, right? Kind of like in this case, it's like having fair districts would be the best.

I mean, if you have to like at least kind of come up with a rationale that makes it seem fair, it would be the next best, right? And then this now, like, and Trump, too, they're all just basically like, look, we don't have to even care about any of this. sweet it's just f you it's power politics all the way down the racial side of it so i'm glad you brought up because we even talked about on the on the pod is interesting because it's actually a little different with black and latino voters right like with black voters in particular they're like fuck you essentially like we're going to draw these districts and do not care at all right and with

latinos we talked this little yesterday they're like making a bet that their gains among latinos are going to stay right and so they're like we can gerrymander this a little bit more you know, and put more Latinos in a district than we would have before because we didn't think they liked us. And I don't know, that might be part of it that backfires. Sometimes, like, identity, we've seen on the left, identity politics backfire. Like some, that might be the part that backfares a little bit on them. But I don't know. What do you make about the fact that they're particularly targeting and disenfranchising black voters while kind of making this bet that Latino voters are going to continue the trend towards them? I think it's a bad bet. I mean,

I honestly think it's a bad bet. I think that one of the things that, one of the things that, they're missing. And I feel like in the conversation around ICE and immigration, what they don't realize is that, okay, you say, and your argument was, we're going after the worst of the worst, we're going after the criminals. And then you see people being arrested at their court hearings. And you're like, wait, maybe they aren't going after criminals. Maybe they're going after your neighbor or somebody that most of the Latino voters are connected to or no. Right. Like at the end of the day, by the time the 2026 midterms comes around, pretty much every single Latino person in Texas is going to know somebody directly impacted by ICE and immigration, particularly after the big ugly bill infused millions of dollars into enforcement. And so I feel like when you see people who look like you who aren't doing anything wrong, and I mean, I would sort of broaden this out.

I hope that the white people in Texas also feel empathetic towards people who are getting snatched away from their family. and their communities and then put into detention facilities or shipped off to another place, I think that people are going to start to get to the point where they know somebody who's directly impacted. I think the bet that Latinos are going to continue to support them is the wrong bet. Now, I've been wrong in my life.

I don't pretend to predict the future. I can't. But I do think that when you have a family member or a friend or somebody in your community who has been ripped away from their family, that hits you in a particular way. if that person looks like you or if you've changed your behavior, right? Because one of the things that I think most white Americans don't realize is that black and brown people have been having real conversations around what identification we need to have when we walk around or passport cards are now like a popular thing that people are trying to get their hands on so that they can walk around with that as opposed to the full passport book because that at least proves their American citizenship, even if they are American citizens, just because they know that if they look a certain way, they could be stopped and detained and then maybe they'll figure it out later, but they're still detained for hours or days or weeks

and separated from their families, not being able to go to work and support all the people that they care about. I mean, that's real, right? That's the kind of thing that I think the GOP implementing everything Trump wants and Stephen Miller wants, they're sort of missing that this is directly impacting people's lives right now in a very negative way. People are very afraid. There are lots of kids who don't want to go to school in some of these communities.

There are people that don't want to go to work in some of these communities. parents are not dropping their kids off at school in some of these communities. So the direct impact and the negative impact on on Latino voters and black voters and people, not even voters, because you know, we always say voters as if like these aren't just humans. It matters if they're not voters. Right. Like even though they don't vote, like it's fine, right, right. And so I think that I think it's a bad bet. I think it's a little bit short-sighted. But also, I'm not naive enough to believe that they don't understand that what they're trying to do by diluting the power voters of color is basically because they are harming these communities and they know that

there will be an impact. Now, they might be misreading the math in terms of how many Latino voters are keeping in some of these districts, but I do think that they understand it. I just wish Democrats would understand it as well as the Republicans do. What does that mean? Like, what would they be doing differently? Talking about it a lot more. defending communities in a much bolder way. I think one of the mistakes the Democrats make after every election loss is thinking that part of the reason why they lost is because, and yes, part of the reason why they lost is they have lost some inroads with white working class voters, but they don't take the

message that, well, maybe if we defended and stood up for communities of color, more of them would participate. More of them would turn out to vote. More of them would register to vote. More of them would be aligned with the Democratic Party, not just in theory, but in voting behavior. You have to do both. And one of the lessons they take away every time is let's go on a rural bus tour as opposed

to let's go, you know what I mean? Like instead of let's go in, you can do the rural bus tour, but that can't be the only thing you're doing. You're not going to win in the demography of the future, the president in the future. the present in the future, with winning back Reagan Democrats. That's not the electorate of the future and in some states in the present. Yeah. You have to do both.

The Democratic Party's political challenges are pretty significant. And I think that like the midterms we'll see, knock on wood, you know, we'll see how, you know, the shenanigans, the Republicans attempt affect that, et cetera. But I think the most likely scenario, let's put it that way, is that it kind of mass. the Democrats' political problems because people are unhappy with the Trump administration and they're going to turn out to vote to express that unhappiness more than to express like an affirmational support for what the Democrats are doing. If you look at the Democrats' numbers, they're just kind of astonishingly bad as far as their popularity and confidence in them on issues.

So I'm curious what you think about that broadly, but particularly, like that's true among black and brown voters too, right? Like it's not just white voters. The numbers are down. They're not down as much, right? It's just relationally, before how they were before, you know, they've lost ground. And, like, there are a lot of different thoughts about how to kind of reverse that. And, you know, maybe it's kind of what you're seem to be talking more about, like,

communication, showing up, like demonstrating you care. Some people say it's more issue-based. Some of the left, it'll say it's more, like, kind of what Zoran was doing. Like, let's talk more, let's do more economic populist stuff. You'll hear people say those aren't actually as socially liberal as, like, white elite progressives, right? And so maybe you could tack back a little bit on social issues. Just on that whole, you know, kind of conversation, like, what would your advice be to Democrats on trying to regain some ground in that demo? Well, I mean, I think all of the things that you said

are true, right? I think that you do economic populism. I think that you do identity-based and social issues, but you have to make people feel like they're seen. And I feel like there is a disconnect between regular working people of all backgrounds and what the Democratic Party is talking about often. And I think that the reason why is they're coming with their 10-point plans and their statistics and their charts and instead of really talking to people in a human way, right? They sometimes sound too academic.

I think that that's part of the disconnect. So while I don't like the rhetoric of Donald Trump, obviously, and the ways in which he talks about things, I think you sometimes do have to simplify things. And then also tell the truth, right? Like, the system is messed up, right? And if you're a Democrat working within the system and you're not acknowledging that the system is messed up,

the way folks like Bernie Sanders and AOC talk about all the time, then people are not going to listen to you because you're not talking about what they're feeling every day. They know something is wrong. They know money in politics is making it impossible. for us to elect a new generation of leaders that actually look like the demographics of the country, right? And I think that that's a piece of it too. I mean, part of it is Democrats, and this is a question that comes up all the time, who is like the new leader, who is going to

lead? And it's not one person. It's never going to be one person. It's going to be people in community, people in elected office, people who are organizers, people who are activists. It's the intersection of all of these different issues and the leaders in those different issue-based areas that are going to have to come together collectively to help save the democracy. Because that's actually the bigger piece of it is the frustration with Democrats

isn't just with Democrats, it's with the system overall. And a lot of the folks who would normally support Democrats and, you know, say I support them in a poll, those people are scared about the future of the whole thing. And the Democrats, in my opinion, often look like they're playing by a rulebook from 1992, and instead of 2025 or in 20305, and they're like, you know, sending sternly-worded

letters when, you're right, like, I send a sternly worded letter about why the Republicans can't do the thing that they've already done and they don't care about your letter or the fact that you're saying in front of a microphone at a press conference that they cannot do. the thing, that is not meeting the moment. And I think people are feeling that because they're scared about what's happening. They're scared about the future, right? I mean, I think what the base of the party wants to see is bold leadership. That's why, you know, Cory Booker's marathon speech resonated. That's why Zoran is resonating. They want bold new leadership. And if that is not what the Democratic leadership is willing to do in this moment, then they need to make a way for

the next generation of people that are going to, you know, speak more like Jasmine Crockett than traditional Democrats of the past. Hey, everybody. Sometimes you're hanging out on a school night with the other parents and, you know, you want to get into something that'll make the evening a little more chill and enjoyable without having to worry about, you know,

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Go to getSole.com and use code the bulwark. That's getsole.com promo code the bulwark for 30% off. I want to talk about some other news stuff. We're obligated by contract to discuss Jeffrey Epstein on this podcast every day until we figure out who killed him. The news today is White House Chief Susie Wiles, J.D. Vance, A.G. Pam Bondi, FBI Director Cash Patel, and Deputy A.G. Todd Blanche are expected to meet this evening, advances residents to discuss

the Trump administration's strategy relating to the Epstein case. I remember when Fox News did wall-to-wall coverage about Loretta Lynch and Bill Clinton, like, meeting on the tarmac when Hillary was being investigated. Yeah. Coincidentally. Anyway, they're starting, again, back to having no pretense. There's no pretense of judicial independence. It's just like the vice president, the chief of staff, and the attorney general of the FBI, or like, we're just going to have a strategy sesh on what to do. But the fact that the president is at some level implicated, you know, in these files related to a child sex predator.

So I'm wondering what you think about Trump's political threat. You hear from callers about this and stuff on the morning show. You know, is this just, I won't prejudice you. What do you think about the salience of the story? Well, it's funny to me that we don't talk more about the fact that the Department of Justice has just completely been co-opted by the executive branch in terms of, political moves, right? And also the director of national intelligence.

Like, he has completely taken these agencies that need to be separated from the political leanings of the executive branch. And he's just, they're just partisan. They're just operating in doing whatever he wants them to do, which is something that Democrats said that he would do before the 2024 election. And people were like, oh, you're overstating things. That's not really the case. And now, I mean, think about, like, what Pam Bondi is doing compared to Bill Barr, right?

And he was also, you know, doing things that, you know, there were folk legal experts questioning. He kind of on the Mueller report. He sort of like, yeah, put out a summary of it. But that seems like child's play compared to the meeting with the vice president. The other piece of it is that, and this is something I keep going back to on my show, if Donald Trump is allegedly in these files, right? And they release these files. And I don't think that they're going to release anything that make him look bad. This administration is not going to release anything that makes Donald Trump look bad.

Like, I'm not naive enough to believe that. even if he was, I don't think the people that like him are going to stop. He already admitted to sexually assaulting women on audio. Like what is in here that could be the worse than that? I feel like we want so badly in the press for, you know, this to be the thing that they don't care. They won't care. They will explain it away.

They want the Democratic names in the report or in the files. That's what they want. They want the Democratic names. If Donald Trump is in the files, allegedly, they will be like, well, he was. there as the inside man to help out the Democrats. He was being a double agent or something. Like, they will explain it in a way. They don't care. They won't stop supporting him. And I think with two dozen or so allegations of sexual misconduct, a civil judgment against you for sexual misconduct, the access Hollywood tape, eyes and ears, paying attention for the past 10 years.

And if that didn't, you know, make you in your soul and your core being, stop supporting Donald Trump, you're not going to stop. So I think that that conversation is almost like more annoying to me than even the conversation about like in speculation about what happened to Jeffrey Epstein or, you know, is there a conspiracy here and what could be done about it? At the end of the day, all that matters to me personally is accountability for the people who have suffered, the accountability for the victim. and survivors who have gone through these horrible ordeals and then watch the people who allegedly harmed them get away with it. And that, at the end of the day, should be in the best case scenario in the world that we don't live in, that would be the point of the meeting. But that's not. Do you think that's the point of the meeting? You think that's what J.D. and Susie are talking about? Justice for the victims? Yeah. No. I mean, I was on truth social this

morning. That's somewhere I spend a lot of time. It's a couple of thoughts. Number one. What do you mean? You don't have push notifications for every Donald Trump posts on your social? Okay. I use their search function for the first time, I think, or at least first time in a while. It is a nightmare. It's horrible. I mean, it is like just functionally true social is awful. And the valuation of true social is a total scam. One of the many Trump scams we don't talk about is figured I'd mention that. Anyway, it took me a minute that I found because Trump bleeds over there a lot, like more than I think people realize. It took me a minute. define this one but I hadn't have a chance to talk about on the pond yet and uh since since he's

kind of like a I guess would you consider charlemagne a competitor of yours I guess you're both in the morning talk space I guess he's kind of a competitor and I mean I suppose technically speaking but I don't think I'm in the same I mean as four million listeners daily like I mean I don't I don't know what my number is but all right well we're not asking for your numbers Trump wrote this I guess he's watching the stories he's an old man who watches the stories on tv against mad his daughter-in-law has a show on Fox now. And he writes this, the wonderful and talented Lara Trump, whose show is a big rating success. Put racist sleesbag, Charlemagne, the God. Why is he allowed to use the word God when describing himself? Can anyone imagine the uproar there would be if I use that nickname?

He's a low IQ individual, has no idea what words are coming out of his mouth and knows nothing. This dope would vote for Sleepy Joe or Kamala. This is the president of United States. Just a reminder. remember one year ago our country is dead now it's the hottest country in the world maga i also noticed when i was searching for the charlemagne tweet he took a shot of gail king he's going after all the morning hosts this morning gail king's career is over she should have stayed with her belief in trump all caps she never had the courage to do so no talent no ratings no strength noticing any trends yeah he calls black people low IQ every time he's always saying that like and again like we just skip over that we're like

we don't talk about the fact that it's blatantly racist. I mean, he's always saying that black people are low IQ. Not that he has never said that about somebody who's not black, but he always says it about black people. And I think it's funny, right? And then we don't ever question his intelligence when, I don't know, if you've been paying attention to him I have for the past 10 years, he never makes any sense to me.

He hardly makes any sense. And we never talk about, I mean, we just assume he's intelligent. because he is a billionaire. We're like, oh, he must be really smart because he went to good schools and he's a billionaire, so he must be really intelligent. And I don't know,

why don't we ever question his level of intelligence? Your boy, Bacari, he posted the other day. How will we know if he's in cognitive decline if this is the baseline and then links to a different lead he sent about Sidney's Sweeney, just that has like misspellings and is crazy. And it is, it really is, I mean, I don't know. And I guess here's the part of him that is,

smart, I will say. He's not intelligent. He's savvy. The Charlemagne attack is like it's not an accident. He knows what he's doing on the divide and conquer side of things. And it works

because the white folks that are watching the little readout on Fox get titillated that Charlott gets brought down to Peg and then the handful of conservative like the folks who were talking about earlier working class like black and brown people who also don't like Charlemagne or like, you know what I mean?

Like, right? Like, that's what he's doing, right? I think that's what he's doing. But one of the things that I say on my show all the time, and this is something that I realized as a little kid, racism itself is actually stupid, right? The idea that you are better or smarter or more intelligent than someone else because you have less melanin in your skin than someone else when I don't know about you, Tim, but I didn't get to choose. Like, I'm here and here we are.

No, I don't either. You might call it a low. IQ opinion. Yeah, like, here we are, you know. And, and so, like, to live your life with the worldview that people who have more melanin are inferior to people who have less is stupid. Like, racism itself is stupid. And we've set up the entire world this way. We also add on top that women are inferior. And both of those things are stupid. Both of them, right? And we, like, like we live every day of our lives and we act like this is not really dumb. And I think like as a seven-year-old, I was like, why is the kid next to me getting treated

like he's smarter than me? And it was something that I realized as like a seven-year-old. I was like, the way that we set things up doesn't make any sense to me. This is really stupid. So again, it's like I think that savvy is the right word to use with regards to how Trump plays on our stupidity and uses white supremacy. to divide and conquer. But at the end of the day, I think the demographic shifts in the country are happening.

That's why they're trying to deport all these people and rig the elections in a state like Texas. They're doing that now because they understand that the majority of the electorate by 2045 are going to be people of color, which is not like majority minority. It just means that there will be fewer white voters than voters of. color. That's what it means, right? White voters will be a minority. And we've never said that in the country's history. And so there is a collective freak out about that. Donald Trump is playing into that fear. Donald Trump has that fear. He shares that fear. And right now, they're trying to consolidate all the power that they can before that happens. Right. Last topic. You fled. Have you permanently fled?

Are you a quasi-expat or a ex-pat? Permanent. Permanent is strong. I mean, I don't know. I am going going to be here for the foreseeable future here in Sicily. Sicily. I live in Sicily. I have to say, most people are like, oh, you live in Italy. I'm like, I live in Sicily. I have to be very, very specific about that. And it was the best decision I think I've ever made in my entire life.

And the reason is because I think there's something deeply wrong and broken in the United States. And there is a level of clarity that I am able to access in my brain here because there's a level of peace that I've never felt in my entire life. I still wake up every day and read about the news and I'm doing my job covering American politics, but I also have a level of clarity because I have a little bit of a distance, and I'm talking to Europeans from all over the world all the time, watching America turn into a dumpster fire. So there's a level of clarity that comes with the distance.

But I also think a lot about the legacy of James Baldwin, who wrote most of his seminal works in Europe. And the reason why is because you have a level of psychological safety as a black person in Europe that you do not have in the United States. It doesn't mean that there is no racism, other places. Sure, there is. But as an American black person, there's a level of freedom and psychological security and safety that I have here that I've never felt in my entire life. It's interesting.

As I was with my bestie, it was a white girl. She happened to be in California at the same time we were, so we were hanging out. And she's also, we talked about this last time, I think she also, she moved to Arpena. So people want to visit Arpena. Just let me know. I can hook you up. It's interesting. like there is that simultaneous like there's a clarity of seeing all this from abroad and like a kind of a relief a little bit that it's not on your shoulders right and obviously doesn't carry the same weight as what you're talking about but but the concept is still the same and at the same time though i don't know i wonder if it's that or like if you'd feel that the same way if you'd been from there right you know what i mean like it's just sort of like you also don't have to care about european concerns and i was listening to thomas chatterton williams on a different podcast or

he was talking about this. He lives in France. And he's like, I kind of just don't have to care about the parochial concerns here. And so do you think it's that, like, that you're an expat, that, you know, that you're sort of stateless? Or is it something particular about being there, you know, that you think gives you that different perspective? Well, number one, I mean, they call us expats, but I always like to chime and I'm like, I'm an immigrant. Because I don't, the term expat, I feel like separates us from immigrants who are working. in these communities, right? I live in a super diversity here in Palermo.

And so I always like to chime in and be like, I am an immigrant. You know, I go to the immigration office, just like all of the other immigrants here that, you know, need to get the proper documentation to be able to work. So that's first. That's first. Also, I do care about what's happening here in Europe, and I do care about European politics.

I think that it allows me to just get the psychological safety of not feeling that tension in the back. of my neck and always the pressure on my chest because racism in America is extremely heavy. It's heavy to carry. You have to carry your entire life. It's hard to explain to somebody who doesn't have to experience it every single day. But here, I, not that racism is not a thing here. There's some racist in Italy. Right. Like it's, I'm not naive. I'm not under any, but I don't have the same type of experiences on a basically daily basis like I did in the U.S., right? Like, I don't have those experiences here. Yes, I think I do have a certain amount

of privilege because I'm an American. People see that I'm an American, especially if they start talking to me. But I think that what it affords me is the ability to have psychological safety while I look at America, knowing the history of the country, and I'm able to say, oh, it's a lot worse than it may look from the inside. And when I talk to folks in Europe and I talk to even older people who maybe they live through authoritarian regimes from other parts of Europe or they more intimately know about the history, specifically here even, they look at me like, whoa, do you guys know how bad it is? Do you guys understand how bad it is? Do you know how far down the path towards dictatorship you actually are? And I think that that's always really important for

me to talk to, because I have friends here who are Sicilian, I have friends here who are from all different places throughout Europe. And I think that it's that diversity of lived experience and perspective that I didn't necessarily get in the United States because I'm mostly talking to maybe, yes, immigrants, but Americans who they think that the democracy will persist and everything will be fine. This is just regular partisanship and the next election will, you know, change things. And I think that the perspective I get here is that, are you sure? Are you sure? I'm not sure. Well, that's a very bulwarky place to leave it. Are you sure? I don't know. We're working it out. Zerlina Maxwell, it's good to hang with you. Maybe Palermo should be on my next summer list.

I did my European vacation this year. It's very fun here. So I'm interested in that. Let's hang out again soon. I appreciate you very much. Thank you. And up next, my man, Josh Barrow, with little econ talk. Stick around. All right, one of the long-time pod sponsors, your favorite Z-biotics, let's face it, after a night with drinks, none of us bounced back quite like we used to, except for the college kids listening to this pod. And let me tell you, it's coming for you someday, too, young and there's a surefire way to have a great next day after a great night out on the town. It's with pre-alcohol. Zibiotics, pre-alcohol, probiotic drink is a world's

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I kind of believe that I might have a drink with Beto or some of the other people that showed up to that event. So the only way to, you know, ensure that I'm able to go out and have a couple cocktails and still perform the next day like you guys expect is with Zviotics pre-alcohol. Go to zebiotics.com slash the bulwark to learn more and get 15% off your first order when you use the bulwark at checkout Zibiotics is back with 100% money-back guarantee.

So if you're unsatisfied for any reason, they'll refund your money no questions asked remember to head to zbiotics.com slash the bulwark and use the code the bulwark at checkout for 15% off he writes a very serious newsletter on substack and co-host the legal podcast serious trouble with popat otherwise known as ken white it's josh barrow what's going on man hey tim how are you i'm doing pretty good all things considered you know me too um life is okay uh i was i'm back here in new orleans we've got the red dress run this weekend. What is that?

If you ever put on, you, you go down and drink in a red dress. Are you a dress drinker? Is that something that sounds appealing to you? Or is you too butch for that? That is not something that I've ever done before. Okay. I guess like New Orleans in August, do you want something pretty lightweight? Yeah.

If you're running around drinking. You want something floy. Something flouncy. Something to think about. Yeah. Yeah. All right. Well, maybe next summer.

We'll invite you down. You know, August 9th is maybe not the best time to visit New Orleans. So it's mostly a local thing. But we'll be doing well. Yeah, I don't think so. I want to grant. I want to grab you to discuss all things, economy. You had a substack post there two ago and said, well, this jobs report clarifies some things.

And it did. So I'm curious just on your kind of macro view on what's happening with the economy and, you know, also I guess on the meta, like the conversation that was happening in econ world for like the weeks leading up to this where people are like, why, something's off about this. And I think now we have a pretty clear picture of how things look. Yeah, I mean, it had been this sort of surprising thing because, I mean, remember, back in early April, the president announced the, you know, quote unquote liberation day. He announced these massive tariffs on virtually every country in the world. And there was hugely negative market reaction to that. And it really looked like the concern was this is going to push us into a recession. Not only are these tariffs very high and disruptive. They're also uncertain. People can't do their business investment planning when they don't know what tax policy is going to face them based on whether they put factory here or there and so it causes you don't want to build a factory nowhere. And there was really a lot of deep concern about that. And then the White House partially dialed back that stuff. They especially dialed back the China tariffs a lot. And the markets basically just, you know, completely recovered, started hitting new records again. And the economic data continued to look

largely pretty good. I mean, maybe indicating a little bit of slowdown, but, you know, fairly strong jobs reports. You know, inflation is ticking up a little bit, but not a ton. And it sort of looked like the tariffs basically didn't matter very much. And then similarly, you know, you've had this huge immigration crackdown that has led to a cratering in the flow of immigrants into the United States. You also have these disruptions at workplaces that are making it difficult for people who are not authorized to work in the U.S. but have been doing so regardless to go and work. And so you should expect some economic disruption from that regardless of whether or not you think it's good policy. And that hadn't really been showing up very much

in the data. And it was a little bit confusing. And so then we got this jobs report, Friday, that not only showed a fairly weak, 73,000 new jobs created in July, but there were huge downward revisions of job creation in May and June, basically to close to zero in each month. And so it was a huge change in what the data says. It basically says, you know, in the second quarter of the year, we had almost no job growth. And that makes a little bit more sense, you know, with tariffs weighing on businesses and making it difficult for them to expand and hire, and with the immigration policies making it difficult for businesses to maintain their existing workforces. So now the data is a little bit more in line

with what we would expect it to be. I note, you know, this doesn't show the economy going into recession. The bottom is not falling out of the labor market. But it does show that things are really slowing down. And then similarly, we're seeing, you know, some upward pressure in the inflation data, which again is what you might expect when you impose a bunch of these new taxes on, you know, all sorts of kinds of goods, which is what tariffs are. So, you know, there had been this talk of were the economists sold wrong, you know, was the tariff policy actually a good thing or at least an unimportant thing? Jason Furman, who was a top economic advisor in the Obama administration, had a piece in the Wall Street Journal shortly before this job's report came out, saying, well,

actually, you know, the job growth has weakened somewhat, and price levels have gone up somewhat. We've missed growth forecasts a little bit. So again, it's not a recession, but it shows, you know, we're doing worse than we might otherwise have been. And then this data just added on to that to show again that, you know, things are are weakening even if they're not falling apart. Yeah, tough break for Bill Maher. You know, comes back from vacation. The first episode does a big thing about how we were wrong about the tariffs. Now, the tariffs seem to be, everything seems to be going good.

It's a cautionary tale for those of us that are not really econ people that are kind of freelancing from time to time. So taking that cautionary tale into perspective, though, you know, you have more expertise than I do and, you know, went to Harvard. What's your crystal ball on this? I mean, like, where are the trends taking us and, you know, across any of those, you know, elements? It's looking like what the economists said the tariffs would be, which is they are drag on the economy, but actually, you know, back in April, some of the voices that were being a little more sanguine about this and, you know, were reluctant to say the word recession were some of the economists analyzing this, basically saying, you know, the tariffs are bad and are going to cause a drag on the economy, but most of the economy is services rather than goods. And so you can really screw up, you know, fashion and, you know, certain other industries that are extremely exposed to, you know, international trade. But there's small slices of the economy, and it doesn't really matter that much for, you know, if you're Microsoft or meta or something like that. It doesn't matter if you're one of these AI-focused tech companies. It doesn't matter if you're in health care.

Big data centers, doing financial services. Right. And so Jason Furman's line actually with this is tariff derangement syndrome, which is that, you know, economists hate tariffs and they have good reasons for hating tariffs, but they sometimes forget that they, you know, they don't drive the whole economy, and you can have a really dumb policy that hits only a slice of the economy. me, and that's not important enough to push you into recession, even though it's hurting you. The irony of this, though, is that, you know, if you're an investor in the U.S., and you don't know where you can put a factory because you don't know what the tariff policy is going to be like in a year, what it pushes you toward is investments in non-trade-affected industries.

So basically, you know, the whole idea with Trump is that we want tariffs to reindustrialize the United States and to get people to build factories. And in fact, what it ends up doing is saying, well, God, I can't get into business. manufacturing, I better put my money into financial services or into health care or one of these service sectors that they're in theory trying to steer us away from. So the policy's not doing what it's supposed to do, but it's also not leaving investors without options in other areas. Yeah, it's interesting to point out because we're already seeing some of that, right? Like manufacturing numbers are down. One of the other affected areas, obviously is like cost

of building and goods, right, whether it be, you know, a steel, et cetera. Curious just if you have any more kind of on the manufacturing and kind of housing costs side of things. But it also, to me, ties to the immigration impact, what you mentioned. I think it was in your substack. You wrote that, like, you know, on the one hand, having fewer immigrants means, like, fewer jobs are going to be needed to keep, like, the unemployment rate low, right? Because immigrants aren't taking any jobs. Right.

On the other hand, there are, like, other unintended consequences, right? Like, a potentially weak of growth for the economy, inflation, maybe not broad, but, again, costs, right? Like, if the cost of goods for building, whatever it is, like a house or factory or a business are higher or, you know, a machine in your business, your cause your goods are higher because steel is being tariffed. And if you had immigrant labor and you're unable to hire them or have to pay, you're right? Like, if the costs are going up across the board, like that also, I think, could have some impact,

no? Yeah, sure. So the, because of the absolute cratering of in migration to the United States under Donald Trump, The number of jobs that need to be created each month in order to keep the unemployment rate stable has fallen by about half. You only have to create about 80,000 jobs a month to keep pace with the growing population and avoid a rise in unemployment. So I think, you know, first of all, it's important to keep in mind in terms of how are voters likely to feel about the job market. You know, a lot of the jobs that were being created in the Biden administration

were going to the very quickly increasing number of non-citizens living in the United States who don't vote. And so, you know, you needed a pretty robust. job growth number in order to keep people happy with the labor market. And I note, you know, unemployment was low then. It remains low now. So it's not like we were having a bad job market. But to some extent, the, you know, the hitting 200,000 jobs created every month, it wasn't as impressive as it might sound because a lot of those jobs were going to the very prodigious number of immigrants entering the country. The flip side here is you don't need to create that many jobs to keep the job market healthy for people who are looking for work. So I think that's, you know,

the, if the president is mad about what these reports say, one thing that he should keep in mind is that he doesn't need to hit his high in number as Joe Biden was hitting. But to your point there, he likes big number though. Big number good for Donald Trump. So that's, that's tough for him to get into his head. If he let in millions of immigrants, he could get a really big job growth number. You know, the life is tradeoffs, right? Yeah, I know. Big boy doesn't like tradeoffs. Big boy like big numbers. So I think that's all this. But the flip side, as you note there, is that, you know, the, the, These immigrants who have been working in the United States, you know, some with authorization and some without authorization, they play a real role in the economy, and it's noticeable when they go away. And it's much more noticeable in some industries than others. If you run a bank, you know, ice raids don't really matter directly for your business. But if you are in construction or agriculture or certain industries, you're very exposed to this. And you get a combination of higher cost and lower capacity in these industries. And we've got several things, particularly hitting construction at once. You have these labor effects. You also have materials costs. that are being driven up by those tariff policies, and we have these persistently elevated interest rates, at least elevated compared to where they've generally been over the last 15 years. You know, the president would really like lower interest rates, but the problem is that the Fed can't really give him lower long-term interest rates. They can cut short-term interest rates, but long-term interest rates are, you know, driven by the financial markets, and there are all sorts of factors that drive them, including the federal budget deficit. The government is going

out and borrowing tremendous amounts of money. Republicans have passed this budget bill that causes it to need to borrow way more money. And that drives up interest rates because the government is competing with companies and individuals who are also trying to borrow money. The more people who are trying to obtain something in the market, the more expensive it gets. In this case, the thing that's getting more expensive is capital. And so that's another thing that makes it difficult to go out and build homes, build factories. So those are all a drag on investment in the economy. But, you know, again, I would say a drag that means we're getting less growth than we otherwise would have, not yet at a point where it's actually causing growth to be negative.

Yeah, I do wonder, like, impact on how people are experiencing the economy, though, you know, because I just, just listen to you talk about that, right? It's like, you get into kind of a nerdy econ debate about, like, what is inflation? Like, you know, if prices are just going up because of tariffs, like, that's not really the same as, you know, inflation that's driven by monetary supply, et cetera. But, but, you know, a regular person that's just living their life doesn't really care about that debate that much. And looking at the industries you're talking about, agriculture, housing, right? Like, it's all the stuff that people are stressed about already is the stuff that has upward pressure on it with the combination of the tariff and immigration

issues. I mean, as a political matter, I would say that the key countervailing factor there is that gasoline prices are down. Okay. And that's in significant part due to policy choices that the administration has made and, you know, they've successfully leaned on the Saudis to, you know, the, to open up the taps. The funny thing about that is that they really think they're going to drive a boom in domestic oil production, and the low price of oil is making it, you know, along with those high interest rates, is making it difficult to invest in new oil and gas production in the U.S., so they're not producing what they thought they would there, but gasoline prices have

moderated. And so I think for some people- Except in California. I was looking at the, I was like in Los Angeles, like, what the hell is going on? The gas prices are still five bucks in L.A.? Yeah, California has the, there's some special formulations. requirements for the gasoline in California, which means then it ends up having to come out of only certain refineries. So there's like a, there's almost like a separate gasoline market for California

and for the rest of the country. But here where I am in New York, it sucks to be you, kind of. I landed California, not you personally, so you California. I was like, what is that? There's also, there's like one particular gas station at the corner of Las Sienega and Holloway in West Hollywood that's always a buck 50 more than all the other gas stations. So I don't know where you're hanging out in L.A. That's what the Today Show uses for their images when gas prices go up. But so, you know, I think as a political matter, I think there are definitely goods that are getting more expensive because of the tariffs. I think to a significant extent, the fact that gasoline prices have moderated is reducing the level of rage that they're otherwise might be about that. The debate about, you know, how you should think about tariffs as a component of inflation isn't that like price increases don't count if they're driven by tariffs.

They do. The questions are one, like, is that going to drive persistently higher inflation? or is it a one-time increase in the price level? Because if it's just a one-time increase in the price level, then the Fed doesn't necessarily need to keep rates high because they're concerned about what prices are going to do in the future. And so if it's, you know, prices just went up one time, this is the argument that members of the Federal Reserve Board are having. They're saying, well, this is a one-time temporary effect and it shouldn't stop us from cutting rates to support the weakening labor market. The other thing is that, you know, again, most of the economy is

services rather than goods. And tariffs, you know, they do raise the prices of specific good, but they're also a tax increase. And generally, tax increases are disinflationary. They take money out of people's pockets and cause them to be unable to spend as much money as they otherwise would, and that actually creates negative pressure on prices. And so in theory, tariffs should cause the price of the specifically tariff goods to go up, but the price of everything else to go down by a little bit. Now, again, it goes down by a little bit because people are poorer and they can't afford to buy as much stuff. So it's not a great talking point for the administration, but that is what monetary policy officials are thinking about. It's basically the president is taking a little bit

of gas out of the economy by imposing these tariffs, and that actually should make a lot of stuff in the economy very slightly cheaper. And so that's another reason to, you know, because the Fed is probably going to cut rates in September. The president wants rate cuts. It's not crazy the idea that you would cut rates by a certain amount, especially given the weakness that we're seeing in the labor market in this jobs report. It's like, congrats, Mr. Trump. The economy's so bad, you're going to get the rate cut you want it. Well, exactly.

I mean, there's two Trump appointees on the Federal Reserve Board, Michelle Bowman and Christopher Waller, who wanted a rate cut in July. And they both issued statements explaining why they wanted a rate cut. And they're both very concerned that the bottom is about to fall out of the labor market. And so they're saying, we need to cut rates because the economy might be about to do a lot worse than it's doing right now, which is not the way the administration want to characterize it.

But that is sort of the good argument there about why you would cut rate. You say, well, the stuff that's driving the recent somewhat elevated inflation is temporary, and there's these concerning signs we're getting from the labor market. We don't want interest rates that are inappropriately high, causing businesses to cut jobs more than they otherwise would. That's, you know, that's the actually good argument for the policy the president is out there arguing for. His weird argument is the economy's great, so great, so great, for some reason we need rate cuts anyway. A little more Fed stuff. So we had Adriana Coogler. She resigned. She's one of the seven board governors.

Some discussion that this, this is an early resignation. I mean, Trump could pick somebody that then to signal who would replace Powell next year if he was to wait rather than firing Powell early as he's T several times. I enjoyed this little bit from political morning money this morning. I wanted to read to you. If the president wants to make an out-of-left field selection, James Fishback, CEO of investment firm Azoria, is mounting an insurgent campaign. He spoke to Trump about the nomination.

the president has no shortage of highly qualified candidates, Fischbeck told Politico. Fishback is backed by some vocal MAGA accounts like Benny Johnson. It's just like a deadpan sentence in the medical political money money this morning. It's like, you might have to consider this insurgent candidates that you've never heard of because Benny Johnson is for it. Yeah.

I mean, I don't know what the president is. You ever seen Benny Johnson on a cruise or have you guys ever discussed any economic matters? You never met him? I don't know him personally, no. I just thought you might have encountered each other along the way. So, I mean, there's seven seats on the Federal Reserve Board. The chair needs to be one of the seven members. Kugler's term was up a few months from now.

So this is an early resignation, but it's not a super early resignation. This gives Trump a seat that he can fill. The thought is basically I'll put someone in this seat, and that's the person that he will want to name his chair a few months from now when Jay Powell's term his chair is up. Because the thing is, Jay Powell will cease being chair in a few. months, but he remains a member of the Federal Reserve Board until 2028, if he wants to be. And there's been some discussion. You know, often the Fed chair resigns when the chairmanship ends, but Powell hasn't committed to doing that. And so if Powell didn't leave the board, then there would be no seat for the president to put someone in to possibly be chair,

but now this coogler seat is available and he can put someone in that seat. He could pick someone really out of left field. I would note, though, that the president has complained a lot about the Fed. He's complained a lot about Jay Powell. He's talked about the idea that, you know, maybe he has the power to fire Jay Powell if he wants to, but he hasn't. And he's, you know, he's really shied away from doing that at a time when he's been happy to fire members of other multi-member boards and commissions in the federal government. This has been a whole legal controversy before the Supreme Court, National Labor Relations Board, the Consumer Product Safety Commission. The president has been firing Democratic appointees from a lot of these boards.

He's chosen not to do that at the Fed. And I think the reason he's chosen, not to do it, is I think that someone, probably Scott Besant, has convinced him that it won't actually produce the results that he wants. Because again, the Fed doesn't control long-term interest rates. It only controls short-term interest rates. And furthermore, rates are controlled by the Federal Open Market Committee, which is the seven members of the Federal Reserve Board and five presidents of regional federal reserve banks. So even if you impose some lackey of yours as the Fed share, that person can't set rates by himself or herself. They have to get consensus from this very establishment-oriented set of people who are not going to be inclined to go along with

that. In some sense, the best thing for the president politically is to complain a lot about the Fed and say it's Jay Powell's fault that interest rates are high and not fire him because if you fired him, then you would show that long rates didn't actually fall after you fired him and it would be your fault instead of Jay Powell's fault. So that leads me to suspect that the president will not do something as out of the box as people are expecting here. There's a obvious hybrid solution, which is Kevin Hassett, who's become a total hack but has been around long enough that maybe, you know,

it doesn't seem like as outlandish of a pick, even though... Well, Kevin Hassett's going to need to run the Bureau of Labor Statistics, probably, so I don't know if how many hats he can... Marka Rubio is going to do that. But, you know, I mean, Christopher Waller, who's a member

of the Federal Reserve Board, like that would be sort of the most in-the-box pick the president could make. There's been some talk that he might do that. I think it's, you know, the likelier that he'll pick. someone like Hassett or maybe Kevin Warsh, who's an ex-Fed official, who has, you know, become, you know, closer in with the president's team over the years. But the thing is, for Trump's interests, if he hopes to, you know, shade monetary policy in a slightly looser direction, there is value for him in having someone who might actually have credibility with the other voting members of the Federal Open Market Committee.

And so you have Christopher Waller right now on the Fed board making plausible arguments about why the Fed should cut interest. rates and who has the respect of the other policymakers there. I think that would be the smarter choice for him to make. And it's in a weird way parallel to the choice that he had to make eight years ago when he put Jay Powell in his chair in the first place. Because Jay Powell was originally an Obama appointee to the Federal Reserve Board, even though Powell is a Republican. And there were other sort of like more ideologically Republican choices that he had available to him. But the problem is that, you know, typical Republican orthodox policymakers for the Fed are going to have a, you know, a more tight money perspective. They are very concerned about inflation and they don't

want to hand out a lot of loose money. And so to pick someone who, you know, was basically in the, you know, the same vein of thinking as Janet Yellen and Ben Bernanke got President Trump a looser monetary policy than he probably would have gotten otherwise. That's the challenge for him there is that, you know, to pick a, you know, a typical partisan Republican wouldn't get him the result that he wants. And to pick a total hack won't get him the credibility with the other voting members of the committee that he wants. If I were him, I would pick Waller. But I'm not sure that he's, he's that wise right now. I think it's probably not going to be whoever Benny Johnson wants. Okay. Sorry, Benny.

One of the things you and I were aligned on just from an argumentation stand, and I think we both believe this before the election was just like no matter what you think about some of the particular issues between Trump and Harris or Trump Biden to imagine 2020 like the tail risk of Trump was just too great like there's just this this potential that he does something really fucking crazy and disastrous is just not worth it let's just do a little tail risk talk in this context and we have the firing of the commissioner of labor statistics now like you said he hasn't done anything crazy with Powell yet maybe he's being savvy about this but who knows maybe he makes up it a bad mood one day? Like, what do you think the extent of the tail risk is just like institutionally

about the U.S., you know, and kind of our credibility in the global financial system right now? Yeah, well, I mean, I guess to start with the Bureau of Labor Statistics itself, I mean, you know, we have this long tradition of these nonpartisan data collecting agencies. They have a very difficult job to do. When we get the jobs numbers and they get, they come out, you know, say this is what the job growth was last month, and then they revise it. more data comes in. These are based on just really big polls, basically. They call up individuals for the household survey to calculate the unemployment rate. And then they call up businesses for the establishment survey and say, how many people do you employ? How many people did you hire?

How many people did you fire this month? Every once in a while, you're going to get an Anne Seltzer. Right. Yeah. I mean, it's the same problems that you have with political polling, which is that response rates are declining. It's getting more difficult to collect the data that you used to collect in the past, and some of it, more of it gets collected in arrears. And so there has been, you know, there have been larger revisions in recent years in significant part because of the, you know, the increasing inherent difficulty of collecting data like this. And then the administration has also been seeking to do big budget cuts at these data agencies, making their jobs even harder. And this stuff is a real public good. It's important for the financial markets to know what

the economy is doing. It helps, you know, investors make decisions about, you know, what to invest in and where to put their money, and it gives us a fundamentally more efficient economy, it's an important thing for the government to do that produces a lot more value than what it costs to do. And so it's not good for them to interfere with that. Now, in terms of how this is actually going to affect what the Bureau of Labor Statistics is doing, I think that remains to be seen. I mean, first of all, we have to see who he puts in as a replacement. I think it's challenging to come up with a strategy to cook the books at the Bureau of Labor Statistics. I mean, you know, That's, if you're China, you could just, like, you know, make up whatever number you want and put it in a press release.

The press corps in Washington will learn very quickly if that's what's happening. You're going to have a lot of disgruntled people who are going to talk to the press about what's being done differently at these data agencies. There's also a sort of more technical thing, which is that I can come up with ways to change how you do these reports that would change the level of employment that they find. But what the president's really after is not the level. It's the change from month to month. So it's not only that you'd need to like find a way to adjust the survey to say that more people have jobs. You'd have to every month step that up and say, oh, we created more jobs this month. The survey has to get rosier and rosier month by month.

You have to keep changing the methodology. So I just question of finding like a Rasmussen to do the polling for you. Right, exactly. Yeah. So I think it's hard to cook the books in the way they want and then it would be hard to convince people that what the books say is real because there's a lot of money to be made being right about this data. market participants out there, you know, if they can figure out better than the government what the economy is actually doing, they're going to go make money making smarter investments. And so you already have private data that is collected that people use along with the government data. I mean, for example, there's a payroll survey that comes from automatic data processing, one of the largest payroll processing companies in the country. The data is not as good as the government data, but it comes out earlier. And it's something that the markets look at. And so if this data is becoming less reliable and starting to skew in a particular direction, one thing is people will see is, well, the ADP survey is still there. And there will be efforts to develop, you know, other, you know, alternative data collection measures that, you know, again,

there's a lot of money to be made on Wall Street being right about this stuff. So there's, you know, that information will tend to find its way out because the, you know, the government can lie about crime statistics, for example, and there's no, you know, private crime data collection thing where someone goes out and makes a lot of money by being right about how much crime there is. Arnold Foundation's working on this. I forget what it's called, but, uh, yeah, I'll send a deals, but yeah. But here, you know, it's not just like political signaling how people look at this data. There's a lot of money to be made by being right about it. And so that's going to limit the president's ability to full people. So you're less concerned about the tale in this area

of like Argentina hyperinflation. People start to stop believing the information the government's putting out and like, you know, we get into a death spiral. Well, I mean, the thing about Argentina style hyperinflation is that countries get into that mess because they have, you know, big government, you know, welfare and subsidy programs that they cannot finance by going out and borrowing in the markets. So they print money. And people hate inflation, but they don't maybe hate it as much as they would hate the really draconian spending cuts that they would have to do otherwise. That's how you get into that cycle. Here in the U.S., the government can borrow that money. And so if you do policies that create a lot of inflation, you just make people really angry.

I mean, we saw that in the Biden administration. And so that, I think, is part of why we haven't seen the president do the most damaging stupid things he could possibly do with the Fed, because a lot of those things that he could do would cause a lot of inflation would make him very unpopular. It's, you know, the reason you have central bank independence is trying to, you know, protect us against making decisions for short-term gain that cause long-term problems. But a lot of the things the president could do with the Fed would just cause a lot of short-term problems. And so that, I think, is the main, you know, bulwark, if I may, so to speak. That's protecting us against the worst things that the president might do at the

fed. So I don't, you know, I don't think he's likely to push us in a hyperinflationary direction. But the thing is that if the government data gets, gets less accurate, you know, there will be these efforts to, you know, privately replicate the data and correct it. But they won't be as good as, you know, a BLS that does a really good job in the first place. And that's, you know, it's sort of like the tariffs. It's going to be a mild, long run drag on growth. But again, it's, you know, it's the sort of thing that's probably small enough that you're not going to be able to pinpoint it and say, you know, this pushed the economy into a recession. Do you have a theory of the case on why the market's so good?

I'm not complaining. My things are looking good in my Schwab account, but it doesn't really make sense to me. I'm a little baffled by it. I mean, I think, you know, one thing is that there's really, really a lot of enthusiasm about AI. Yeah. And I'm not an expert. A bubble like enthusiasm? Maybe, but maybe not.

I don't, you know, I try not to assume that I'm smarter than the market because if I was smarter than the market, I would be on my yacht instead of your podcast. Okay. Well, you might be on my podcast on your yacht, because you might be on my podcast. you do like to hear yourself talk. Yes, that's true. And same, by the way. Not an attack.

But so, I mean, that's part of it, that there's this idea that, you know, whatever else is going wrong, the AI advancements are so improving the, you know, the future profit prospects of corporations that that outweighs it. I think there's also something psychological where the, you know, the president announces something damaging and the market swoons and then he withdraws the damaging announcement and the market bounces back up. you know, people lose a lot of money by betting against the market when Trump says he's going to do something to destroy the economy and then changes his mind. And so I think that has taken some of the willingness of market participants to go out there and, you know, bet that this stuff is going to really be bad. I think it's made them a little more reticent around that. So that's another component. And then I, you know, I think the third possibility is that, you know, some of the deregulatory stuff that this administration is doing, including around energy production, probably does have a positive sign on And so that, you know, is to some extent countervailing the negative sign that comes from the tariffs and other policy mistakes that they're making. So I think it's that combination. Then again, just reminding myself that even though the tariffs are a damaging stupid policy, most of the economy's services, and so you can do things that are a real problem for a certain set of sectors without causing, you know, the economy overall to go into a recession without causing the stock market to decline. Do you have a barrow recession percentage? Over what period in the next year? Yeah, sure.

I don't know, 25, 30%. 25%, 30%, okay. So are you below Goldman? I forget where Goldman was. Or they moved down, or they've readjusted. I forget where they are. I don't know.

For a minute there, they're like 45 or 50. Yeah. But it might have come, I think that might have been around liberation. That was in April, right? Yeah, that was in April. I assume it's come back down. You know, the tariffs that he's put on the EU,

and then there's weird stuff like Switzerland, we've put a really high tariff on. which matters for certain specific goods like, you know, ski lift equipment, for example. The deals that he struck with the EU and with, you know, so far with Canada and Mexico are at a level where they're not, you know, going to completely obliterate trade with those places. And the China tariffs he proposed that really were going to be effectively an embargo if there was 145 percent tariffs on China, that really important part of his trade policy does appear to have durably backed off from. And so that means that a recession is significantly less likely than it looked in April when it looked like the tariffs were going to be a lot bigger. Speaking of percentages, we have one other piece of countervail in good news, which is the decrease in prescription drug costs. I would like to listen to the president and talk about that a little bit.

And I think we're going to be very successful fairly soon. We'll have drug prices coming down by 500, 600, 800, even 1,200 percent. You're a math man. Do you have any thoughts on that? on that? Well, as I understand it, that means they're going to pay you to take the drugs. Which I would be into it. If the price used to be $100, now it's negative $600

and so you take the drugs and you get cash along with them. That sounds pretty inflationary, frankly. A little inflationary, but also I mean, good for all the people that are on Ozempic. I think about that. Yeah, they're going to be thin and rich. Thin and rich. In Trump's dreams. All right, final

topic. How are you feeling about all the straits and the mustaches now? Are you thinking that you have to change your look because I was at a concert that was frequented by 20 something straights and it was like they all have fucking

mustaches now. So they're coming for you like they're coming for your look and I think maybe it's time for the gays to consider a different maybe goatees come back or big long sideburns or something. Oh God. Well so I mean I think that the first important thing to remember is that we stole this

from straight people before they stole it from us. Like this was like Bert Reynolds. it from us before we sold it and then we stole it from them. Who was, who was first? Who did Bert Reynolds get it from? Yeah, I guess Bert was first and then the gays, yeah, and then Freddie Mercury, Bert was before Freddie. Like this was, you know, the, you know, with the whole like 70s leather man type, like this was supposed to be like a performance of hyper masculinity. Okay, yeah, that's right. And so in some sense, that's supposed to come from like, you know, ideas of what a straight man is like, even though a straight man wouldn't wear head to toe leather,

probably but so like the the mustache originally came from the idea that this was like that this was a hypermasculine thing and then we took it from bert reynolds and from the straight people and now they're coming and they're they're reclaiming it okay and so you know it's like i i need a land acknowledgement for my face or something like that you know the straight people were here first a bert reynolds land acknowledgement yes thank you to bert reynolds thank you per reynolds every time you walk into the club yeah but i also feel like you know like even though mustaches were originally straight. I feel like they are now permanently gay, even if straight people are doing them. I think partly they envy us and they see us having fun and they would like to be like us.

And so, you know, that's completely understandable to be. But I'm not, I'm not giving up the mustache. It's a great place to leave it. Macho man, Josh Barrow. Thank you for educating us, as always. We'll be talking to you soon. Yeah, talk to you soon. Thanks. All right. Thanks so much, Zerlina Maxwell. And the mustachio, Josh Barrow, I should say my husband wanted a mustache a while ago. And I told him it would be like, I don't know if I can, can I say this, it would be like putting something very disgusting on his face. I guess I'm not going to really gross y'all out on the outro today. So let's just say no mustache is in our household, but we appreciate Josh's in science as well as early as we'll be back tomorrow with another edition

of the bulwark podcast. See all then. She gets the Adamalty too She gets to open in the nude Mustairs, Montairs, They're afraid of witch Between the nose and open it Whoo Nah, ma-ma-ma-ma-ma-mustace, moustache, moustache, moustache, moustache, moustache, moshatchatch, moustache, moustache, moustache, moustache.

One hundred-hairs make a mile I try to handle my design My flu-man too is real fine My Ronald Corby made a blink My poncho will be a main thing But when I trimmed it real small My Jewish friends would never call Woo-hoo

Ah, my, my mustache, mustache, mustache, mustache, mustache, mustache, moustache, moustache, moustache, moustache, moustache, moustache, moustache, moustache, moustache, moustache. Mustache, mustache, mustache 100 heads, make a man 100 half make a land One hundred half make a laugh The Board Podcast is produced by Katie Cooper with audio engineering and editing by Jason Brow.