The David Knight Show - Navigating Economic Seas with David Bahnsen: Insights on Policy, Markets, and the Future

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Starting point is 00:00:29 Again, joining us now is David Bonson. He's founder of the Bonson Group. They have over $6 billion of assets under management. He is one of America's top-ranked financial advisors, according to Barron's, Forbes, and Financial Times. And I want to get David on to talk about what he sees on the horizon because we're looking at massive sea changes, especially financially. So welcome, David. A pleasure to have you back on again. Well, it's wonderful to be back with you.

Starting point is 00:00:57 Thank you so much. Thank you. Let's start with, well, I don't know where you want to start. We can start with Doge. And, of course, I've seen this and you've seen it as well. We've had commission after commission talking about how they're going to eliminate waste. What do you think is going to happen with Doge? Well, so there's kind of a glass half full and half empty deal. I mean, you're right. We've seen a lot of attempts at things before, not necessarily a lot come out of it. You know,

Starting point is 00:01:21 I think back to Reagan's commission on Social Security in the early 80s, and a lot of really good things came out of that. But it was empowered, it was authorized, there were hard recommendations made that were implemented. And it saved, you know, 40 years of the system and so forth. The question I have about Doge is not the concept of looking for greater government efficiency. I mean, everybody has to know that there is a need for streamlining things in government, saving money, limiting fraud, waste and corruption. The question will just simply be when it isn't created by Congress, when it doesn't have a budget, when the people aren't really appointed, are they going to just be a PR outfit that makes

Starting point is 00:02:06 announcements of things? Or is it going to get some teeth to it whereby the things they uncover incentivize Congress to take action or incentivize federal agencies to take action? So I'm modestly optimistic that some good things will come, but I have to say it's one of those things where it's not the long game. They need to have some hard-hitting good things happen in the first six months because it's going to start to lose a lot of its teeth after that. Oh, yeah, I agree. You know, when we look at this, there's so much that is under the label of entitlement programs. They've created legislation to say, well, if you meet these different aspects, well, you get the money, that type of thing.

Starting point is 00:02:49 And so we look at that as generally the welfare state. If you look at the welfare state, you look at the warfare state, there's not a whole lot of money that's left out of that. I know that they're doing some things in terms of trying to get people out, making requirements that you've got to actually come to work. I think the best one they've done is he just put out a statement saying that we'll buy you out. If you agree to leave, what is it, by February 1st or something like that, we'll pay you until September, and then we're done.

Starting point is 00:03:22 You know, trying to get people to voluntarily leave. So that would be good, but still, if you eliminate uh so many of these people that's not going to get us two trillion dollars worth of stuff i just don't see them the dollars there that they could get that and i don't see the will in congress to change anything about the welfare of the warfare state either well and i got to be very candid it's also the president himself said he didn't want to touch entitlements. Yeah. And so that's almost 70% of federal spending is transfer programs, Social Security, Medicare, Medicaid, Obamacare, and food stamps. And so if those things are all off limits for at least modifications and improvements and fine tuning. Now, by the way, they're not going to be off-limits forever.

Starting point is 00:04:06 If something can't continue, it won't, and that can't continue. But there's something in our budget that's codified into law that distinguishes between mandatory spending and discretionary spending. And mandatory spending is up to 70% of federal outlays. So if you say, we want to go find some things to cut, you're now looking within a universe of 30%. And that assumes people think we should be spending less on national defense, not more. That assumes people believe that there's a whole lot of discretionary things that can be cut. Entitlements are the largest element.

Starting point is 00:04:45 That's what has to be addressed. That's not going to come out of Doge. But to the point you made, I would agree. If all they did was say you can't work for the federal government, collect a massive pension, health benefits, and a salary, if you're not going to come to work, well, that's a pretty good place to start. Yeah. I've said many times, many of these these government agencies i'd be willing to pay them to stay home and do absolutely nothing if i'd get them off of our back because regulation is strangling our economy as well but have you

Starting point is 00:05:15 seen if they're going to do anything you know i know that he said social security and entitlement programs are off the off of the uh not touch. What about welfare for foreign citizens? I've talked for the longest time. One of the simplest things that they could do, and it would help efficiency as well, is to stop paying people who come here illegally, letting them collect from the welfare state. Is there anything at all that you've seen about that? Well, the bulk of the money that does go into people here illegally in our country is coming from states, not the federal government. So there's a limited thing that the feds can do there.

Starting point is 00:05:49 And then the dollars themselves, again, just as a matter of principle, I fully agree they should address it as a matter of dollars and percentages. It isn't a huge amount. When you're talking about federal welfare benefits, there's a lot of other elements that do go in, and even their efforts at deporting those who have committed crimes and other things like that, that has hidden implications. There's hidden costs from the illegal immigration that they can help sort through. But again, when somebody like Elon Musk says, we're going to try to save $2 trillion a year, you can't quantify that.

Starting point is 00:06:26 There isn't $2 trillion to save. He's walked that back to say, okay, well, maybe a trillion. He's already thrown half of that out, but I still don't see a trillion there. No, there's not. But that's the thing is, in his business career, he's mostly under-promised and over-delivered. And that would have been my preference here because if they if they cut 300 billion of inefficiencies I will consider that a big victory and I know is a percentage of a 5.9 trillion dollar federal budget 300 billion doesn't seem like a lot but it is a

Starting point is 00:07:01 significant amount and symbolically it shows that there are things that we can get done if we have the will to do it. So we're going to see how this plays out. I will tell you that they have taken office space in D.C. now that we're on the other side of the inauguration, and they do not need Senate approval, congressional approval, and they can be classified as federal workers with some access unpaid, but only up to six months. So that's why I throw the six-month window, because some of the heavyweights that Musk has brought in from his Rolodex, these are high-gravitas people, but they have six months to get some things done.

Starting point is 00:07:43 Wow. Yeah, it'd be interesting. And, you know, as you point out, just showing that we can do something, that's maybe one of the best things that has come out of the Trump thing so far. You know, I don't like government by executive order. I think that's a very dangerous precedent. But still, just after we've looked at, I would kind of compare Biden to Jimmy Carter. Both of them were seen as totally ineffective and impotent in what they're doing.

Starting point is 00:08:10 But, you know, there is a question as to what the right thing to do is should always be on the books. And so let's talk a little bit about the tax reform stuff. And let's talk a little bit about that because he's focused heavily on tariffs. And we have the newly confirmed Treasury Secretary saying, well, we're going to do the tariffs gradually. We'll do it 2.5% a month until we get up to whatever our final target is, even supporting going up to 20% across the board. This is something, a complete reversal of Besant from his previous statements as a hedge fund manager. So what do you think about the tariffs? How is that going to affect our society, inflation, other things like that? Is it a good idea in your view or not?

Starting point is 00:08:53 Well, there's two different things we're talking about. One is actually doing tariffs, and one is threatening to do tariffs to get other things done. And Besant has been extremely clear that he is playing along with the president's strategy of using tariffs as a negotiating tactic. The president signed 45 executive orders his first week in office. He repealed another 70 Biden era orders. He took something in the range of 130 actions last week, and not a single one of them were about tariffs. We haven't put a dollar of tariffs on, and I don't know that they're going to. Right now, the notion of saying you either take the migrants into Colombia or we're going to put tariffs. And then the Colombian president saying an hour later,

Starting point is 00:09:45 we're going to take the migrants in. You know, even in the period of time between the election and the inauguration, the president never talked about tariffs with Mexico or Canada around protectionism. He didn't talk about, oh, we need to do it to make trade more fair. He talked about it because he wants their support at the border. He wants their support stopping illegal immigration, stopping fentanyl, stopping, you know, criminals. It's national security oriented. And then clearly with China, it's a separate subject from the rest. So my long answer, which a lot of people

Starting point is 00:10:26 these days might disagree with me on, but I'm in the traditional market conservative view that tariffs are a cost that enter into trade and transactions, that I prefer free actors be able to negotiate. An unfair trade deal should never happen in a free society because if I believe a deal is unfair, I won't do it. But what I don't need is Washington, D.C. deciding what's fair and unfair. So I'm against the use of tariffs, at least without acknowledging that they're a cost. However, using tariffs as a negotiating tactic to get other policy objectives done, I think, is very different. And so far, I want to give the president space to go about doing that and see how it plays out.

Starting point is 00:11:11 So rather than walking softly and carrying a big stick, you've got Trump who's talking loudly and carrying a big tariff to get what he wants. So I understand that. And other things, too. With China, I think it will not merely be tariffs that'll be a big issue but but what is really interesting that i've studied immensely versus when he came in in 2017 and the trade deals that he worked on throughout 2018 china's economy is significantly worse than it was then worse than it was then. And one of the policy objectives he wants now out of a U.S.-China relationship

Starting point is 00:11:48 is China's assistance in bringing an end to the Russian war against Ukraine. That wasn't on the table then. So can he use the threat of tariffs? Before they talked about the trade deficit, I disagree with the president on that issue but they all they would talk about intellectual property theft they talk about the currency that's where scott besant comes in who's written on this immensely can they get a

Starting point is 00:12:16 better agreement around the u.s the dollar one exchange rate china's help with Russia and broader U.S.-China relations, basically them agreeing to buy more agricultural and energy commodities from us. If he gets a big deal like that, I think the president's going to have a big victory lap to take. You mentioned China and how their economy is worse. I've seen some, and it's hard to gauge that, and it's not something that I look at carefully, but I have seen several videos put out by influencers, social influencers there, showing how empty the trains are, how empty Beijing's streets and shopping malls and businesses are. Tell us a little bit about what's going on in China in terms of their economy as

Starting point is 00:13:02 you see it. Well, there's no question they're in a deflationary period brought about by an overinvestment in their real estate property sector. The United States knows all about this very well. We did the same thing. Japan knows about it all very well. They did it in spades back in the 1980s. China, though, has been a much more responsible actor in how they've dealt with it on the monetary side. We brought our interest rates to zero and then did quantitative easing for years and years. It's the exact same thing Japan did. Japan actually brought their rates negative. China hasn't done that because their big need is global respect with trading

Starting point is 00:13:44 partners. So they have to respect their bond market and they have to respect their currency or they lose everything they've been working for for 25 years. But they're still going to do all the fiscal stimulus, the Keynesian things that the U.S. would do and that Japan has done. But what you can't do is deny that it's happening. And their data is very clear that it is hurting teen and, excuse me, young adult employment significantly. And the construction sector, which is a massive part of their economy, far bigger than it is for us in the United States, is hurting immensely. So China has not really ever diversified. As they've grown into an economic powerhouse, they have never diversified into being an economy that has strong domestic

Starting point is 00:14:35 activity. They still largely require exporting goods to Europe, other Asian countries in the United States. And so therefore, the president has a lot Asian countries in the United States. And so, therefore, the president has a lot more leverage in the way he deals with them now. Yeah, it is truly amazing to see not just the pictures of how empty Beijing is, but also to see the pictures of these massive developments where they put up huge mansions that are totally empty and overgrown. I mean, you talk about, you know, Potemkin Village. They've built it over and over again in many different places. Malinvestment because of central planning. Before we get away from the tax stuff, you said you think that the tariffs are mainly used as a negotiating tactic.

Starting point is 00:15:21 And what about the income tax because as trump has been what he said about tariffs domestically is to imply that well maybe somewhere down the road we're going to get rid of the income tax i don't see that happening at all do you no exactly i mean he's talking about making the the the tax cuts permanent he's talking about what he's going to do the corporations i i just don't see that on the horizon. He hasn't specifically said it. He just kind of muses, you know, it'd be kind of nice if we had a system

Starting point is 00:15:50 that was all tariffs and no income taxes, but nothing has been done along those lines, has it? There's a figure of speech a lot of people use who have tried over the years to better understand President Trump because he's obviously a very unique political actor in American history. And they talk about taking him

Starting point is 00:16:06 seriously but not literally one thing i've learned both in the time i've spent with him and in the time i've spent with his uh policy advisors some of which are some of my best friends is when he's serious about something you know it and when he's not serious about something, you know it. And when he's not serious about something, you know it. And so a comment here and a tweet there is very different than repeating something on the campaign trail 650 times. I don't think President Trump has any opinions about the income tax versus a fair tax. I think he has strong opinions about this no tax on tips thing that he led with on the campaign. So I do believe that they will be making a big mistake to not view the tax promises made as a very imminent need in the 2025 agenda. The belief that let's go get some immigration victories and some border victories and maybe some trade victories first and we'll get to taxes later. I understand wanting to get victories first, but you can't put the tax thing off to the end of the year and lose your leverage because you not only may end up wanting some Democrat votes here, but there's different competing interests within the Republican caucus, too.

Starting point is 00:17:24 There's you need every Republican vote that's the problem when you only have four vote lead in the house and Republicans in New York and California have a different agenda out of the tax bill then some in certain red states or Midwestern states and so they have they need the time to negotiate this deal and do it right. And I really hope they prioritize it from now through April so that we can get a tax deal done by July. Because if you get to near the end of the year, it is not going to be as good of a deal. I'm positive about that. And so what is really a part of this? He's mentioned many times reducing the corporate tax level to 15 from 21 he's talked

Starting point is 00:18:06 about uh locking in the 2017 tax cut but then uh taking off the cap on state and local taxes of ten thousand dollars is there anything else that is and not taxing tips um and i think you also had thrown out not taxing anything Anything they're doing because they can't get 60 votes in the Senate. So they have to do it through the budget reconciliation process, the so-called Byrd rule. Then they only need 50 votes. But then that means you have to set a budget and the reconciliation of what you do with the tax bill has to match to that budget. So let's say you tell your budget you're going to have a trillion and a half dollar deficit, which is what we already have anyways, then it can't move the deficit. Now if you say we're going to have a three trillion dollar deficit, you can do a lot,

Starting point is 00:18:54 but nobody's going to vote for agreeing to a three trillion dollar deficit. So they're going to have to set a deficit level, which is going to be messy, but then they have to go about doing what they're going to do tax-wise within that reconciliation window. And there's no possible way they can get rid of the SALT deduction because that would be over a trillion dollars right there. Now, I think they're going to increase the cap. They're talking about $20,000 and adding an inflation kicker to it year by year. Some are pushing for 30,000. So that's a very big backdoor middle class tax cut. It's not going to help people like me. My state and local taxes in New York and California are way more than $10,000. So it doesn't matter much. But for middle class folks that got the lower tax rates from 2017 and now get some of that deduction back, that's a big deal. No tax on tips has to happen. It's the one of his campaign

Starting point is 00:19:54 promises that he needs to be able to see through because of how important it was rhetorically on the campaign trail. The one thing he's not talking about a lot that a lot of us are pushing for behind the scenes is 100% business expensing. He wants economic growth. He wants productivity. And when businesses know they can deduct what they're going to go do with capital goods investment right away, R&D, these types of things, it's very stimulative to the economy. And it's not stimulative with government spending. It's very stimulative to the economy and it's not stimulative with government spending. It's stimulative with the private sector investing into growth opportunity. So I think that there's a few things like that that'll be there. And then as you say,

Starting point is 00:20:36 you have to make the 2017 tax cuts permanent. The good news is, by the way, that's going to happen. Even if they can't get anything else done, they would just vote to extend that for a year because nobody wants it on their record that they let these tax increases come yeah but they need to do more than just that so you say that uh you know they're not going to get anything done unless they make it part of the budget reconciliation so what kind of a you know where we could get it to you know just a simple majority of over 50, and they've got 53 people with the Republicans. So what kind of a time frame does that put us into? It depends if they end up deciding to do one reconciliation bill, which is the idea of Speaker Johnson

Starting point is 00:21:18 and what President Trump has said lately he's kind of prone to, or if they need two different bills to get it done, which some other Republicans have advocated. It doesn't reveal a rift between Republicans. It's just a difference in strategy. Stephen Miller, who is a senior advisor about policy president, he wants two bills because his priority is immigration and the border. And he knows that they're going to have the votes for that. People are deathly afraid of voting against the president on immigration and border. So he wants to go get one bill done first, get the victory and then tackle the tax stuff later. But the problem with that, where I disagree with Mr. Miller, is once you've gotten

Starting point is 00:22:03 the first one done, you lose a lot of political leverage with some of your needed votes for the second one. So by what Speaker Johnson's point is, is by attaching them all together, you're going to need more, more people are going to need to vote for it. And yet it's a little messier. It takes more time. There's more horse trading and negotiating. So you can imagine i don't say this by the way is derogatory about president trump it's just descriptive i can be the same way sometimes in my own business he doesn't really like all these details he wants other people just to go figure it out you know get it done but unfortunately this is one of those things in government where

Starting point is 00:22:41 how the sausage is made kind of matters. Yeah, it could be the sinking of the Bismarck right there, right? One of the things that you didn't mention, you mentioned tax on tips, and of course, that was something that he really hammered over and over again. He's mentioned it a few times, but not like he has removing the tax on tips. Social Security, overtime taxes, is that something that is still in view, or is that something that may make it or not? What do you think? The overtime issue I that is still in view or is that something that may make it or not what do you think the overtime issue i hear is still in view i happen to be totally against it i think it's a very bad precedent and is going to open itself up to a lot of manipulation and a lot

Starting point is 00:23:18 of uh cheating and people moving how they classify salary versus hourly and trying to game the system. So I never really liked things in the tax code that incentivize people to alter behavior. The social security thing has no chance of happening. No chance. Not with reconciliation. It's just a multi-trillion dollar expense and they're not going to have room for it in reconciliation. I don't think the president's brought that up in months, by the way. I think even he knows that one's a goner. Yeah. Eliminating the income tax on the social security benefits that you get the jury. I do support it, by the way. Yeah, I know. I know. Yeah. Yeah, it is.

Starting point is 00:23:57 Double tax. That money was already taxed. It is. And when we talk about corporate taxes, just like tariffs, all the corporate taxes are something that I would imagine you would agree with. Consumers are eventually going to have to pay for that. The corporations aren't going to absorb that, right? Right. The only thing I'd clarify is he didn't say he wanted to bring the 21% rate down to 15 broad-based across all companies, which I would support. He said, I want to bring it from 21. So remember, it was at 35. And he brought it to 21. To me, it's maybe the best thing he did in his first term, one of the biggest. Joe Biden lived off of some of the economic growth that Trump created from

Starting point is 00:24:38 doing that. It incentivized tons of American global companies to bring certain things back on shore, and most importantly, to bring dollars back on shore. $1.6 trillion came back on shore after they repatriated after that passed. However, 21 to 15, I think is still a great move, but he's saying he wants to do it if they're doing all their manufacturing in the United States. And I know people have strong opinions about this issue, but I just disagree with one tax rate for one company and another tax rate for another. The unattended consequences that come from this hurt American either consumers or producers. So I wouldn't, if people want more manufacturing in the United States, then have a lower tax rate for everyone have less regulation, you mentioned deregulation earlier,

Starting point is 00:25:32 get rid of all this DEI stuff. There's a lot you can do to make people want to manufacture United States. But there are some things where it may be cheaper elsewhere. And when you penalize a business for that it ends up then coming on to consumers and having a trickle-down effect that is very negative in the economy let's talk a little bit about um something has been uh one of my pet peeves and that is a paris climate accord and um as i've had steve malloy on in the past uh who who follows that very closely and he worked with a lot of people in the in the first trump administration as he pointed out and and he was calling for it at the very end you remember that um trump said i'm going to get out of it but i gotta wait four years according

Starting point is 00:26:14 to the terms of the paris climate accord and so he got out of it like right after the election but um steve malloy came on we're talking about he says he's got to contact uh mitch mcconnell as uh you know head of the senate there he needs to call a vote on this this is a treaty and the senate has to ratify treaty and we were never in my opinion and in his opinion i i'd like to know what your opinion is we were were never legitimately in the Paris Climate Accord. We had John Kerry say, I self-ratified it. And Obama, why are we pretending that we're in it? Now, he said he's going to get out of it again.

Starting point is 00:26:53 But he said, well, but now this time, instead of waiting for four years, I've got to wait for one year. Why do we have to wait to get out of something that we were never in? What is your take on that and on the impact of all these mandates and the subsidies and the fees that we have to pay? There's an economic aspect to this. Well, we're not paying fees. We're not paying any fees. We're not paying them. Now, so there's a technicality that you're highlighting, and you're exactly right. There's no reason to have to wait a year, but we're talking about officially waiting a year. We're unofficially, we're not doing any of it anyways.

Starting point is 00:27:25 But this is the problem you highlighted earlier in our conversation about executive orders. We went into the Paris Accord on an executive order from Obama. We came out of it on an executive order from Trump. We went back in it on an executive order from Biden, and we're now leaving it again on a second executive order from Trump. Somebody needs to start doing the law. Yeah. Ratifying treaties. Four presidents in a row,

Starting point is 00:27:52 you know, four presidential administrations in a row are using executive orders, and it's giving Congress a pass from doing its job. Either ratify a treaty or don't. And it's amazing to me that we don't have any Republicans. I mean, not to say, I understand Mitch McConnell would be on board with all this

Starting point is 00:28:08 stuff, but where's, there's, you know, where are the rest of the Republicans? Everybody's afraid to stand. The problem is that President Trump wants to lead with executive orders and people are afraid to stand up to him about that. And especially when a lot of his executive orders are popular. You know, my view is I get that sometimes we're going to do the right thing in the wrong way, but we kind of need to stand up for doing it the right way, and Congress doesn't want to do its job. Yeah, they should have stood up to it when it was done by Obama. At least, even if you're not in the majority, you can say, excuse me, don't we have a

Starting point is 00:28:40 Constitution anymore, and do something about that. Well, we do. Our version of standing up to things these days this is a comment i have about society at large not just republicans in the senator house is we say well the way we're going to stand up to bad things the other side does is we're going to do the same bad things yes yes that's not the way you do it that's a great yeah that's a race to the bottom it absolutely is uh well while we're talking about um energy issues uh we had uh trump give a speech to davos remotely and in it he was talking about how bad our infrastructure is and the grid you know it's really old he said and it's very vulnerable so now the move is going to be to

Starting point is 00:29:19 have a private energy system for these people that are very wealthy, for the AI centers, as well as perhaps, as you talked about, manufacturing plants. Everybody have their own power center, and I guess that leaves the rest of us out. What is your take on that? And while we're on the energy issue, the people that are friends of Trump that have been around him have been very heavily into carbon taxes as well as carbon sequestration and the carbon pipeline, CO2 pipeline going across the country. Is that something that's going to be pushed in with the people that are around him like Doug Burgum and Elon Musk who pushed for respectively sequestration and carbon taxes, the two of them? What do you think is going to happen with this burden on the economy, the green nonsense? I think that where the president's stated opinions and policies have been very solid,

Starting point is 00:30:15 and I do not believe that these carbon tax things are even remotely on the table. Musk has said quite a bit about it in the past. He said less about it more recently. You know, we need to remember, Musk built Tesla off of, you know, publicizing the threat of carbon and traditional car engines. And I think that Musk has moved a lot in his own Overton window of politics and policy. Burgum's version of carbon sequestration is very different than what we hear about a carbon tax. He's a much more nuanced

Starting point is 00:30:49 and intelligent actor here. And then our new energy secretary is brilliant. And I think that what President Trump said at Davos was spot on. The orders he has signed are right. The one thing I would say is a lot of people saying,

Starting point is 00:31:04 oh, finally, we're going to start drilling for oil again because Biden stopped us from doing that. And that's not really true. Biden hurt us a lot for long-term capacity. But we are, the day Biden left office, we were producing more oil than we've ever produced in our country's history. But we weren't producing as much as we could.

Starting point is 00:31:24 And he killed pipelines that make it impossible for us to move oil and gas around. But the worst thing he did, President Trump already undid, was say, I'm going to put a moratorium on approving any new terminals that can be built to export liquefied natural gas. This, to me, is an area of growth for the U.S. economy and of geopolitical supremacy, that we can take bad Middle Eastern actors out and Russia out when Europe and other parts of Asia don't need to buy their natural gas from them.

Starting point is 00:31:59 And why Biden did it is beyond me, but we have a huge ability to extract more natural gas and natural gas liquids from our own wells in the U.S. from fracking and then ship it to other customers around the world. And Trump is going to be, I think, setting us up to do that for 5, 10, 15 years. So a lot of people are focused on right now, we're producing a million and a half barrels a day. If you started doing more drilling on federal land, if you got

Starting point is 00:32:32 rid of some of the regulation, you're going to make it more profitable. But I don't think you're going to go to 1.8 million, you know, at $70 oil, the supply demand numbers aren't there so we need market solutions right oh we're not opec saudi saudi has the the same people setting policy as are the ones producing the oil because it's a state-run business we have private actors in the permian basin all we need to do is what trump is going to do get get the government out of the way. I agree. And when you're talking about efficiency, constitutional issues, other things like that, and especially with the environment, is there any talk that you have seen? I haven't seen him mention it. He's talked about getting rid of the Department of Education. I don't know if he's

Starting point is 00:33:22 going to do that or not. We've heard that from every Republican president since Reagan when it was created, when he was running for president. But he never got rid of it in eight years, and nobody has ever done that. But is there any talk about even restraining, if certainly I would idealistically like to see EPA and Department of Energy gone, but is there any talk of even clipping their wings on some of the things that these agencies have done to ban cars, to ban appliances, and so forth? Is there any talk at all about reining in those massive bureaucracies? There's three words I'll share with you. Personnel is policy, and he has appointed the personnel that are very much in agreement with you and me on this stuff. So if Lee Zeldin gets in at EPA and some of the other agencies and bureaus that are not department, that are under the executive branch, not legislative. I think that the

Starting point is 00:34:21 Department of Energy is not going to be going away, but he has the right people there, with Bergman Interior and Chris at Energy. Again, I don't like him creating this National Energy Council, because then one day it's going to be run by others, and they won't be as good a people, but at least the people

Starting point is 00:34:39 running it so far are good guys. But absolutely. And it's, by the way, one of the things I'd love to do, I agree by the Department of Education could go tomorrow and I don't think it would matter. Some of them need to be down ticked over time. And putting people to run agencies that they don't believe should exist is a great way to do it, to allow them the time to, from the inside, what did you say, clip the wings uh i'm pretty optimistic some of that will happen but but they're not going to wholesale get rid of these

Starting point is 00:35:11 things it's going to take longer than that when you take 40 years to build a bureaucracy it's hard to kill it in 40 days yeah yeah and you know we go back to legislative uh initiatives that gave the epa the ability to regulate emissions and gave the Department of Energy the ability to regulate efficiencies. And so those are now being weaponized. That was done by Congress. And I guess, you know, just like we were talking about the Paris Climate Accord, there's no interest in Congress when you're talking about the House or the Senate in terms of doing anything. I mean, they just shove everything off to these bureaucracies, let them do it, and they don't ever really rein to these bureaucracies let them do it and they

Starting point is 00:35:45 don't ever really rein in these bureaucracies the national energy council that you mentioned there that bergham has been put in place of uh in charge of um what is the stated purpose of that and what do you think is going to happen with it well i i suspect that it was done basically to coordinate efforts that he he couldn't put you, the same person at three different places. And he had someone he wanted for EPA, had someone he wanted for energy, had someone he wanted for interior. And it was a way to bring a lot of the best talent into one body together to coordinate and collaborate. So I have a lot of confidence in some of these folks that are on that commission. I'd like to see them

Starting point is 00:36:25 do it get things done for six to twelve months and then kill the commission doesn't happen very much in federal government no no yeah once you as reagan said it's the closest thing to eternal life that we have on this earth it's a federal bureaucracy so um talk a little bit about the stock market that we've seen royal Royal, the last couple of days. And, you know, what's going on with that? The market's kind of fed off of just a few tech companies and especially off of AI and NVIDIA. They got back just under half of what they lost on Monday. They got back about half of it yesterday.

Starting point is 00:37:03 What do you think is going to happen with that? Has AI been exposed as a massively inefficient and expensive thing that maybe doesn't have a lot of payoff? Is that going to affect the stock market in general? What do you think happens moving on? Well, I don't know that the exact things that happened this week necessarily reveal it, although I think that they add to the things that happened this week necessarily reveal it, although I think that they add to the case that it's a least of fear, a risk, a vulnerability. I do think that there's no question right now that the cost of doing AI is massively more than people can rationalize, and the benefits we get from AI don't seem to be uh in line with what the cost is yet um we are not going to have china as a customer here and we are going to have china as a competitor

Starting point is 00:37:55 so that's all there if nvidia had no bad news at all and i assure you it had some real bad news if it hadn't it was still a massively overpriced stock, trading at a ridiculously high multiple for future earnings. So it was subject to a correction anyways. But would I say that we know the outcome, who the winners and losers are going to be with specific companies or specific countries? No, I think it's all too early.

Starting point is 00:38:25 But to me, the idea that there will end up being a lot of investors hurt badly by the hype and the bubble of the moment is inevitable. Yeah. What do you think is going to happen in terms of the crypto market and Bitcoin? I mean, there was some talk at one point in time about a Bitcoin reserve. How do you see that fitting into all this interplay with the dollar, gold, Bitcoin, all of that? What is your view of this?

Starting point is 00:38:56 Well, I hate even talking about it because it is something that always makes people mad. And you have to wonder, why does it make someone mad if they have so much confidence in their opinion why would they care what somebody else says though I've found that people have there's a direct relationship between how much conviction one has in their own opinions and how angry they get when somebody disagrees yeah the idea of a Bitcoin Reserve is one of the dumbest things i've ever heard expressed in american

Starting point is 00:39:25 public life a country running 36 trillion dollars of national debt adding to it another one to two trillion a year and people saying we need crypto because the dollar in government spending is irresponsible and then we're going to fund a bitcoin reserve with deficit spending it's the it's insane um bitcoin has gone down 70 percent three different times since it existed now it's up huge but it went up 56 percent in the first month and a half after trump was elected and we think that's a good thing that speaks to a stable responsible medium of exchange i i'm i'm sorry i i if people want to buy it if they want to speculate on it i'm all for it trump deregulating a lot of the heavy rules that the prior sec had around it that's all fine too if people are willing to

Starting point is 00:40:19 take the losses let them take the gains i don't think it needs a bunch of regulation it's not systemic in our banking system but do i think it's about to disintermediate the dollar no no i do not never yeah and i agree what do you think about um the people around trump though he's now got a lot of people as he made his turn he was against uh cryptocurrency i thought it was a bad idea now he's all for it uh he's been involved in meme coins and of course we've got um uh lutnik who is there as commerce secretary has been heavily involved with tether uh so-called stable coin and you know he's been involved with a lot of meme coin stuff as well and so so there's a lot of people, as you point out before, personnel as policy. Where do you think these people are trying to push this? I mean, we're going to wind up with some kind of a hybrid, you know, tether or stable coin thing.

Starting point is 00:41:17 Are we going to wind up getting the functionality of CBDC through a backdoor? Where do you think this is headed? Well, no, I don't think we're going to a central bank digital currency through this. And I do agree with you that there's a lot of people that are influencing in President Trump's ear about this, but that's never been different. He's always had different advisors barking things in his ear with their own agenda. Sometimes it's just ideological. You know know when guys like kudlow and and steve moore and steve forbes and art laffer who are all my good friends when they're in his year

Starting point is 00:41:51 it's because they believe in supply side tax cuts some of these um silicon valley guys may have a different agenda and and president trump will i think he likes the attention and I think he likes very rich and powerful people that need him and want him, whether it's Wall Street or Silicon Valley. But he'll make his own decision in the end. This meme coin thing, you can probably tell I mostly agree with a lot of President Trump's policies. I don't agree with all of them. But this meme coin thing, I can't possibly justify. If a Democrat did it, we would be beside ourselves. It is rank grift. The optics are horrible. And I just cannot even comprehend why it would happen other than because he can. Yeah. Yeah. Well, you know, it might have the, I don't know if Lutnik was involved in this. He's

Starting point is 00:42:44 done a lot of those placements and things like that. And, you know, it might have the I don't know if Lutnik was involved in this. He's done a lot of those placements and things like that. And, you know, even the people who are Bitcoin and crypto advocates are said this is going to give crypto a bad name. People who support Trump's is obvious grift, as you point out. It's such a strange thing to see that happening there. But I guess my concern was there's there's ways and and of course everybody's on to cbdc and the the five eyes the five intelligence agencies of the us uk uh canada new zealand australia they they've all said we're not going to do cbdc i think they have read uh public opinion on this and understand that's that's going to be a hard sell that they're

Starting point is 00:43:24 not going to get through so they're all saying they're not going to do that my concern is is it going to happen in a de facto way is it going to happen by gradual consolidation of you know you know combination of getting people accustomed to crypto and other things and the stable coins and gradually kind of bring in the functionality of it, the surveillance, the invasion of privacy, and the control that can happen with that. Because we've got a lot of stuff about debanking that has happened. They're focusing on it and they're talking about it. But this is something that I've struggled with.

Starting point is 00:44:02 I got debanked by PayPal and Vimo about four years ago. And at the time, it was a real rough thing, but I've worked around it now. But, you know, at first they denied that there's any debanking going on. And now they're even a Biden administration official came out and said, yeah, the banks really wanted this even more than we did. And we're pushing back against the regulations that we're putting out there. So I know that he took on Bank of America executive and criticized him for debanking conservatives. But when we look at the bigger picture of the CBDC, if we get people accustomed to this,

Starting point is 00:44:34 if we have that kind of visibility and loss of privacy, and we have things like debanking brought in with that, I mean, we wind up with the functionality of CBDC, even if we don't have it. Where do you see this happening? I mean, do you think we're going to move towards prohibiting some of these activities? What do you think will happen with that? Yeah, I'll go quickly just because unfortunately I'm out of time here, but it's a topic that's

Starting point is 00:44:59 near and dear to my heart. First of all, you do not have to worry about people getting used to it because anyone who tries it hates it um it it they they bragged and bragged and bragged oh look we're going to be doing this was it in uh chile or peru or some of these south american countries and they're putting crypto atm machines everywhere and then they said please stop we don't we don't like it the miami mayor wanted it to be this bitcoin capital and and it was a big flop um they're not going to get the american public uh desensitized to digital currency um there is too much grift too much corruption too much technological error it just simply isn't what it has been advertised to be. And then to your point of trying to blend a desensitization around the technology of blockchain with government control

Starting point is 00:45:52 over it, there are so many people that would be fighting against it. I have a lot of confidence that those people will prevail. The Federal Reserve has a very difficult time blocking and tackling adding a digital currency adding a silicon valley component to their portfolio you know they were talking a few years ago the central bank needs to factor in climate change he said we we can't even do interest rates what you want me to guess the weather so that's what it is it is a guess about the weather and they've been guessing wrong for decades, haven't they? You can't. They will not be able to pull this off.

Starting point is 00:46:31 And I will just quickly say we're making great progress in the private sector with the things like debanking. JP Morgan had a couple incidents that did happen. They were real they were not coming from up top they were middle managers that were being woke and being discriminatory and then they lied about it and I brought it I spoke at the shareholder meeting we met with upper management for two years that the same things you dealt with the PayPal They had bought a payment processor called Waco that they had these provisions in. They took them all away and basically went out on a limb over and over saying,

Starting point is 00:47:17 never ever going to happen under our watch. If we hear of any debanking going on because of one's politics or religion, it'll be the end of their time at J.P. Morgan. That's the largest bank in the world. There's still rogue things that can happen at some of the big banks. By the way, I run a private wealth management firm. And if someone comes into my office and says, I work for a pornography company and I want you to be my financial advisor, I want the freedom to say no. Yeah, yeah.

Starting point is 00:47:45 So we want to maintain First Amendment rights, but we also need these banks to be honest about what they're doing and not doing. And we've made a lot of progress in the last few years. So I want listeners to be encouraged about that. Sure, yeah. And of course, you know, we've seen in the past when they would say, well, it's the social media companies. That's their prerogative.

Starting point is 00:48:04 They can kill whoever they want. We find out that it was actually collusion going on with the government. They were just being a beard for them. So that's the other real issue. It's not necessarily a clear cut with that. And you've got to go real shortly, but I want to talk about, just mention briefly your latest book, and that is Full-Time Work and the Meaning of Life.

Starting point is 00:48:24 We're talking a lot about universal basic income. We just had Andreessen say, yeah, the whole purpose of this AI is to crush human wages. Talk a little bit about that. Well, I think that people need to understand that work is something that was instituted by God because it's what he made us to do, to be productive, to be creative, to be innovative. Human self-worth, human ingenuity, human dignity is all connected to the fact that we're able to think and build and do. And this movement to say mankind's going to do less is just awful so I have no concerns in the world that those who have a kind of transhumanist vision for society are going to prevail they're not going to

Starting point is 00:49:15 prevail there are unique things to the human person that cannot be disintermediated and yet at the same time those who believe a 32-hour work week universal basic income are good for humanity, they have to be resisted every step of the way. Mankind is unhappy when they are not working. And some people don't know it, but it's still true. I agree. I agree. And the subtitle, the description of your book is Exploring the Intersection of Work, of Purpose, and of Conservative Values. The title is Full Time, that is Work and Meaning of Life. Full Time, and the subtitle is Work and the Meaning of Life.

Starting point is 00:49:54 Thank you so much for joining us, sir. And it's always a pleasure to talk to you. It's been very interesting talking to you. And again, people can find you, the Bonson Group. Do you have a website? i don't see that on here uh yeah so uh thebonsongroup.com another easy way would just be dividendcafe.com that will get you to the same place that's where all my investment writings are and it links right it's right there at our bonson group website so dividendcafe.com thank you very much it's

Starting point is 00:50:24 always a pleasure to have you on thank you have a good day

The David Knight Show - Navigating Economic Seas with David Bahnsen: Insights on Policy, Markets, and the Future

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