The Pomp Podcast - #1527 Zach Weinberg | TARIFF DEBATE: Are Tariffs Actually Good For The U.S.?

Episode Date: April 10, 2025

Zach Weinberg is the Founder of Curie.Bio, and we debate everything about tariffs. We discuss the current state of the US economy, why people don’t feel wealthy, production vs consumption, purchasing power of the dollar, what America should manufacture, and what we should ultimately do with tariffs?=======================Reed Smith is a dynamic international law firm dedicated to helping clients move their businesses forward. With an inclusive culture and innovative mindset, Reed Smith delivers smarter, more creative legal services that drive better outcomes for their clients. Their deep industry knowledge, long-standing relationships and collaborative structure make them the go-to partner for complex disputes, transactions, and regulatory matters. Learn more at www.reedsmith.com=======================Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/=======================BitcoinOS is bringing Bitcoin into a new era. For the first time, Bitcoiners can access real DeFi across the entire crypto ecosystem, powered by revolutionary zero-knowledge technology. No more trusting sketchy bridges or giving up security. BitcoinOS reunites all of crypto around the chain where it all began. Follow BitcoinOS on twitter @BTC_OS and Be early to Bitcoin again.=======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's up, guys? We've got a great episode for you today. I sit down with Zach Weinberg, somebody who doesn't really like the tariffs nearly as much as I do. And we debate

all the nuances. And it's actually kind of fun. We find out things where we agree. We find out things that we don't agree. And my guess is that as we go through this debate, you're going to learn a heck of a lot, both of the bull and the bear argument. So enjoy this conversation with Zach Weinberg. He was a fantastic intellectual thinking partner for this conversation. And I learned a lot, so I hope you do as well. Enjoy this conversation. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular

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Follow Bitcoin OS on Twitter at BTC underscore OS. Again, that's at BTC underscore OS and be early to Bitcoin again. All right, Zach, I got my notes. You got your notes. uh hopefully we don't actually have to look at them but we're gonna talk tariffs i think that there's maybe some like ground assumptions that we have to lay out let's see if we agree or disagree uh the first one is do we agree that there are two different experiences in america i feel like that's like a core kind of component of the trump administration and their views on this is like

there's rich people they've been you know killing it for 50 years the economy's worked for them and there's like this other group of people they call them like the working class uh and the economy has failed them they're falling behind they're in debt they don't have assets uh the middle class has been hollowed out you know all the talking points that you hear them regurgitated over and over like do you buy that or do you think that that's like an oversimplification i think it's wrong okay and and i think the data would show you that there's a massive difference between reality and perception and we can talk about why that gap exists but just like a few basic facts and it's not by the way it's not to say that there aren't struggling people in america absolutely they're

struggling people in every country. But at a baseline level, America is the richest nation in the world. We have the highest median income of any major developed nation, right? Essentially probably like number two to Luxembourg. We've been growing faster than every other economy that's developed, right? So we kind of leave out developing nations who will grow faster from a much lower baseline. Incomes are up, savings are up. Like Americans objectively are the richest people in the world. Now, that doesn't mean that people still aren't struggling. But at the end of the day, this idea that we've hollowed out our middle class is just not true. It's not true. We have a thriving middle class. Now, we have some problems, which I would really focus on

related to costs, right? So, if you make $100,000 a year, I mean, we have plumbers in America, just to kind of give it some teeth. We have plumbers in America that make more than doctors in the UK. We have electricians in America that make more than physicians in all of Europe. These are like MD, PhD trained people. And we have blue collar trade workers who make more money than most of these other groups, right? These are exceptionally well-paid people. Now, you don't feel rich, I think for two reasons, and we can debate why. One, I think is simply that you have really, really expensive housing. Like the United States housing supply has not kept up with our wealth and our population growth. And so when you have a ton of people with money chasing a limited

supply of houses, prices go up, housing as a percentage of your income goes up and you feel poorer. And I think housing is probably like the single biggest challenge America has in terms of making people feel comfortable in their lifestyle. That's number one. Two, we don't talk about like the rise of TikTok and social media, because I hate it. But like, I do think there's a perception of lack of wealth because you see so much fake shit on the internet like if you go on everyone's on a vacation 24 7 you feel like holy shit why can't i do that exactly exactly and so like even though the objective data tells you you know americans are richer than everybody else and doing better than everybody else it doesn't feel that way because you don't see the everybody else

you see the like clipped version of the instagram post i think it's really unfortunate i don't have a good answer for for how you solve that so here's my question on this um do the facts matter or do the feelings matter. And recently, um, Besson gave an interview to the all in guys. And there was two parts of the interview that I thought were really fascinating. I hadn't heard anyone in the administration talk about before. Um, and I think it's clear. Uh, I've been pretty clear with people. I'm an independent. I'm not Republican. I'm not Democrat. I have no party allegiance. Uh, frankly, I think both sides are stupid sometimes. I think they both do good things. Do you have like a leaning just so people know, or not really? I would say like, if you

rolled back the democratic party to the party that was in power with bill clinton and even kind of like the early versions of of obama that were kind of like pro-growth uh smaller government pro-business and i think with the dems and i go back to bill clinton i think what the dems got right and i was a democrat for sure at the time was if you grow the pie if you make the pie of america bigger right and and the way you grow up high in any economy is through private business right you make stuff people want to buy that causes people to have jobs there's income that income cycles through you continue to grow like the economy is not a fixed careful you're starting to sound like a republican right now well this is what i was gonna go with because like swapped we

used to have debates i because nobody watches this shit anymore so nobody knows but like you go back and you look at like the clinton bush that era of debates and what these guys were arguing about was like, who's going to grow America faster? It was fucking amazing. And that was, and then the Democrats were really a little bit more about, okay, if the pie is big, we're going to tax you a little bit more and we're going to redistribute that excess tax. So like, yes, I would make a little bit less money, but it's for a good cause. And the underlying economy is strong because it's growing. Plus, I think I agreed very heavily with Democrats on social issues. And then that kind of went off the rails recently, you know, over the last,

whatever, six to 10 years or so, where somehow business and growth and profit and entrepreneurship and all the things that make America exceptional relative to basically every other country in the world were vilified by the Democratic Party, not every person, but in places and very publicly. And there was no loud, moderate voice. I mean, the loudest voice in the Democratic Party is a socialist, right? And Bernie Sanders, who's, by the way, when you view like what Trump is doing what sanders are doing or sanders wants to do very similar things so um that definitely turned me off to like the current version do you think they swapped like is it a fair here's one of my mental frameworks right now is it true statement to say that trump is a democrat which he was for

most of his life that now has taken over the republican party and he basically took a lot of the working class you know policies and anti-war like all the things that the democrats believed in and he somehow has like brought them over to the republican party and then created a split in the Republican party where he's been able to siphon off a ton of attention and support from them. But they're actually like, to your point, you know, Democrat beliefs from 30 years ago. I think he's taken some of the worst parts of the Democratic party and made it his policy position. I think he picked off like 80% of the dumbest things you could possibly do. And it's like, that's what I want because he's not a Democrat and he's not a Republican. He's a

populist. And that is a different beast. It doesn't fit our political framework of left or right because it isn't left or right. It's populist. It's meant to appeal to the working class, whatever they want to feel emotionally, not logically, but emotionally, he's just going to say it even if it's flat out incorrect and he will lie. And that is neither left nor right. And I think both parties have crumbled in a way that is really unfortunate. I think the Dems moved really hard left. The rights now move populist. They're both anti-business in these weird ways they're both like anti-growth or at least have been so i i was a democrat i view myself much more as a like as an independent uh which i think is the trend across uh demographics

is like many many more people feel i call it politically homeless yeah right and so you're like the default is i have to be an independent because i feel like neither party is serving you know the way that i view the world i think that's right i think what you're going to see is moderating the democratic party back because they're going to be forced to if you want to win elections, you need to have popular policies and Dems have not. And so, you know, popular policies around growth and housing costs and all that, I think will pull the Dems back. And we have a few people out there like Josh Shapiro in Pennsylvania, who I think is exceptional. Jared Polis in Colorado. You know, there are a few Pritzker even in Illinois. Like there's a few

Democratic governors who I think are really strong voices. The congressional Democrats are a little bit of a disaster um but yeah i don't i was a damn and i don't identify necessarily as one today all right so let's get back to the best uh conversation so the all-in guys they ask him uh and he said something i'm going to paraphrase but he basically was like all the data was telling us that the economy was great but then people were saying i don't feel great true and i think what he came to the conclusion of was you can't trust the data you got to listen to the people which i thought was coming from the treasury secretary who comes from wall street who's a trader who's very quantitative, like everything about his background would tell you he trusts

the data. Yeah. And so that was the first thing where he was like, Hey, the people are telling us something. Well, I want to be clear. Like, I don't think that's wrong. Like I agree in the sense that there's a giant bolus of Americans and it spans Democrats and Republicans and white and black and you know, who, who, who don't feel like it's working, it's working for them. And I think they just got the reasons why completely wrong they got the absolute wrong reasons and there's let's just talk about a little bit of like why people don't feel wealthy leaving social media aside for one second um one is the underlying cost structure of the shit they have to buy to survive has not declined in price like the prices of the stuff they want to purchase and in particular

housing and the amount of money and income and growth that we just haven't kept up with the inflation and it's really it's it's not even inflation like groceries have gotten cheaper consumer goods have gotten cheaper electronics have gotten cheaper we have netflix we have flat screen tvs for 150 bucks we have amazon that'll deliver you toothpaste for like four dollars like the basics are actually really really cheap housing and health care like we talk about all goods and all none of the shit matters housing and health care if you look at the budget of like a typical person making 65 70 80 000 a year and you go what percentage of their budget is taken up by housing and health care both indirectly and directly because you pay for your health care

through lower wages in America, probably 70%. And that number will vary. So both of those sectors are highly regulated. Highly regulated. Government very involved, which I think that if, again, you listen to Besson, which I focus on Besson because I feel like Besson has, in a weird way, he's the glue here between the private business,

Wall Street, and then the political views of the White House. He talks a lot about deleveraging the public market or the public sector and re-leveraging or driving a lot of that stuff to the private sector. And he's like, basically all the job growth, all these things happen in the public sector. We became very top heavy and kind of bureaucratic.

We need now to deleverage that. And we need to go back more to a private sector, you know, type business, which if they can do it, if is a huge if, because a lot of detail in there, but if they could do that, it sounds like if all of a sudden you could now take a housing sector and deregulate and push that more into the private hands,

that should lead to lower housing. Healthcare, same thing. Well, I think we're confusing a bunch of different things here. So let's start with like housing, right? Because I think that's kind of the easiest one to take a look at. Housing supply has not kept up with housing demand, right?

As Americans get richer and richer, we want newer stuff. We want bigger houses. We want more luxury. And local in particular, local regulations have prevented market forces from keeping up with supply. I say all the time,

city councils are one of the most dangerous groups in all of America. Absolutely. It's the most anti-American thing in the world to basically say you can't build here because all it's doing is taxing poor people. Like, NIMBYism is a tax on poor people. And the irony is NIMBYism has been a very progressive thing. We're very, like, you know, pro-redistribution. And the one major policy they have is, like, kind of, like, screwing over the poorest Americans.

So I think housing is a – it's a regulatory issue. It tends to be a local regulatory issue. But that's the cause of high-priced housing is the fact that we can't build. And there's a bunch of things that go wrong. It's not just red. So if you had to pinpoint, which it sounds like we might agree on this. If you had to pinpoint one thing to change

that could actually bring housing down, it would be deregulate at the local level, the housing zoning stuff so that you could actually go build housing wherever it's needed and let the market kind of figure out where it's needed and what type is needed. Remove the 35 different ways

local governments block developers from building housing. Yeah, so deregulate. Deregulate, absolutely. All right, you sound like a Republican. Keep going. I sound like an old Republican. I sound like an old Republican. And like, give me those Republicans. Bring me back Mick Romney. Give me the binders full of women. Like, I want that Republican. By the way, I'm like half joking. But here, the reason why this is like so funny to me is because I recently, you know, again, I'm an independent. I don't have the allegiance, whatever. And I started thinking about like all these things. And I'm like, wait, it's a moving target. Like it was Democrat, then Republican. And like it's moved back over the last hundred years, whatever.

But like right now, actually, the Republican Party is saying, I think, a lot of the things that people in the business and tech world, they're like, hey, the deregulation is a potential, if not the solution to housing. Right. And so, like, you don't see the Democrat Party saying that. That's OK. They are starting to. I actually do think I mean, you look at New York City, for example, and Mayor Adams. Now he's an independent, but like city of yes, city of yes. And so I do think- And 11.

Yeah, well, I think you're seeing like local democratic leaders, especially in major cities in New York is probably the biggest one that's pushing ahead here, realize that housing costs are screwing over the city. Because if the housing is too expensive, smart young people don't work here because they can't afford it.

And then the economy slows because like most of these great jobs or growth engines, if you will, want to hire smart young workers. And if they're not here, they're not going to grow here. So it's actually a giant drag on the economy. it makes New York or any state poorer by having housing prices so high because it moves smart young people away from the city. It is really stupid. And that is a major issue. I actually think, you know, most intelligent people, left, right, center, when you explain housing supply

being restricted, kind of understand how supply and demand works, right? Like if you add more supply, prices come down, right? You make more stuff, there's less demand on the marginal house. And so the price comes down because there's more supply available. Like this is just econ 101, right? If you produce a billion eggs or you produce a thousand eggs, like guess which eggs are going to be cheaper, right? The billion eggs. And the same thing is true in housing.

And that's a real problem. Now, I think the challenge is that the housing costs are such a large percentage of your budget that you think it's like capitalism that isn't working for you. And actually the things that's not working for you is anti-capitalism isn't working for you, right? Like, housing is not a capitalist market-driven, you know, force anymore because we've regulated it to death where you can't build. And so, really, the issue in housing is capitalism is not being allowed to thrive. And so, I want to put that one to bed because I think, like, housing actually is probably the biggest issue.

Two, there is this common, like, belief out there that Besant is talking about and some of the other Republicans have talked about, which is that all of the growth of jobs in the United States have been government jobs. And it is flat out fake news. I think it's 25%. By the way, it's 25% just in the last few years, because we saw this really weird blip with COVID. If you go all the way back to the beginning of Biden's term, it's 11%. 11%. So nearly 90% of job growth in America has been the private sector. And then if you break that 11% down, it's mostly local government.

Federal workforce has remained essentially flat over the last 20 years. It moves up and down a little bit here and there. And I have some charts. We're not going to be able to show it here, but maybe I'll email them to you after. but the federal workforce as a percentage of the total workforce has actually gone down so so um numbers directionally correct right exact ones we'll probably won't get perfectly but i think one of the things that people look at is they say um what is the percentage of americans getting jobs because we have four percent unemployment one second uh but we'll get to

the data in a second uh i think there's a lot of people who are saying wait a second all of the job growth has been going to non-native born Americans. Now that's legal immigrants and illegal immigrants, right? And so they don't really break out those numbers. So it's very hard to kind of tell what that percentage is. But I think a huge part of the pain that people are feeling is they're saying, hey, wait a second here. The government jobs that Americans are getting are a much higher percentage of the Americans who are getting jobs. No, no. Well, of course it is. I mean, like, yes, in the sense that the u.s government doesn't hire illegal workers but that is not the problem like you still have they probably do 89 of job growth coming from the private sector which is

what you want to see like that is a good thing right private sector job growth is good for america it means the american economy is thriving i understand that people think you've got like illegal immigrants stealing jobs but the reality is most of the stuff that illegal immigrants are stealing if you really want to think about it are extremely low wage you know fruit picking retail. These are not the jobs that everybody thinks the middle class in the United States want. Now, I'm not here to be very clear to defend illegal immigration. I think illegal immigration, bad. Legal immigration, very good. And if you put me in charge, we do not maybe at the egregious level they're doing today, but we would enforce our laws around illegal immigration

and we would reform our legal immigration laws to bring the best and the brightest here. Well, I think one of the things that's not controversial is that most legal immigrants actually have very strong views on illegal immigration. Like I waited in line. I did the work. I did everything I was supposed to do. I followed the law. Why is somebody else just walking across the board? Legal immigration in the United States is one of the single biggest growth opportunities we have because legal immigrants work hard, start businesses, and they grow the pie. It is not a fixed pie. We have lost sight of how economics work. It isn't one slice. It's not a pizza that you break into eight pies, and the minute you make a smaller slice, you have less pizza. It's not how it works. The pie gets bigger. If the pie were fixed, we'd still be living in fucking medieval times, farming for everything and growing potatoes all day. Clearly, the pie can grow.

and so growth of the pie is the single most important thing in america all right that's it i want to go back to like people's beliefs right so they feel poor why do you feel poor you feel poor because people are telling you you're poor which is a whole fox news thing you see it online at your housing costs are up we can talk about health care costs but when you compare this and i know it's it's it's hard for people to to feel poor and then realize that it's way worse everywhere else but i just want to go with it's way worse everywhere else. Yeah, they don't care about that, but it can be true and then not care at the same time. I totally agree. And so I'm not trying to say your feelings are not justified. I think

they're perfectly justified. I think the reasons for feeling poor are simply not what our political parties are focused on. For me, it's all about growth. It's deregulating housing so housing gets cheaper. There's a bunch of healthcare stuff we could talk about. And then it's unleashing the american economy to grow which typically means pro-business policies all right growth policies if you will so that was the that was right that was a little like the baseline facts i actually i don't think we agree on i think people have been lied to uh in terms of statistics like there was a trump administration official i don't think it was best into his probably no retarded i would like all now peter retardo uh probably him who was like on fox news i wish i brought this clip

and he's like 75% of the jobs created in the last four years under the Biden administration were public sector jobs. He's on public television. This is a Trump administration official saying 75%. I'll find the clip. Nothing about that statement is true. It is a flat out lie. He's out there telling you that the sky is blue or the sky is green and it's blue. Like he's lying to your face. And I think it makes sense to me why people believe this stuff because you wouldn't believe that some official would get the 75 percent number inverted and he did he got the wrong number all right so let's say let's just say that this happens over and over and over again here's besan in that same interview with the all-in guys um this to me was the most shocking

i actually thought that we would have a market sell-off because of what he said here uh chamath palpatia says to besan he says uh gdp smart gdp job growth inflation you know he lists a couple metrics. He goes, do you believe them? And the first word out of Scott Besson's mouth is no. And then he very quickly realizes that he's on a recorded podcast and he kind of like cleans it up and, you know, has a more kind of politically appropriate answer. But what he basically says, and then he leads into this idea that like, hey, the numbers were telling us something good. The people were telling us something different. We have to learn to trust the people, blah, blah, whatever. So that was shocking to me because you have the treasury secretary basically saying,

we know the data is inaccurate and so no he's not saying we know the data is accurate he's saying uh i think maybe by the way which data and why is it inaccurate so here's how inaccurate here's a good example the job growth data sure right there's this big revision and again well they revised by the way they revise revising job growth data is how it works no of course but here's my constantly revising it is true that it got revised it is true that it's probably it was definitely over counting but to your point it's not a shocking no like no it's not over counting the job like job tracking data on job growth is a complex process there's a lot of estimation going on and the data lags the data lags because you hire people you have to report

the data to government and take some time to aggregate that stuff and analyze it you also have to tease out what is seasonal workers versus non-seasonal workers because you get like seasonal health care workers you get seasonal retail workers you get seasonal farming workers like it is complicated it's not just like have job not have job and so yes you do it better yes i could probably i mean right like this is the point but this is the point you know they never undercount it's always they oh no they do undercount they do undercount sometimes they get revised up and sometimes they get revised down and i'm not suggesting every single month is perfect because it's not meant to be perfect but you look at it over the course of multiple

years and you're not going to have drastic swings you would see mass unemployment if it was undercounting you see mass unemployment and we don't see that but when they when they well hold We'll get to unemployment in a second. But when they revised it down, I think that I can't remember the exact number. What is it? They revised one month down? No, no, no. It was like the last year.

It erased like all the job growth over the last like year or two. So like all this job growth that we thought we had, we actually didn't have. And I think that goes back to this idea of, so take the inflation number, right? I'm very public about the fact that I think that the true inflation number, which is kind of a real-time alternative inflation metric, that they're looking at what are the price changes on, you know, grocery store websites where, you know, they have all these data feeds that are more real-time. that's more accurate than the cpi number and in december of last year the true inflation number

was higher than the government number two months later the government number goes up now the true inflation number has crashed you know 50 in the last three months well yeah and we expect to see the cpi number to come i mean rip money out of the economy of course rates went up but it comes down but my point is that regardless of what besant was saying like i actually think that saying the data is not accurate is probably an accurate statement. It's not though. It's like, it's like saying, I don't have a great analogy for this, but like, sometimes I feel healthy and sometimes I don't. Like, yes, on a month to month basis, these data points move because they're complicated data points. But when you smooth it out over time, this is like a directionally accurate set of metrics.

And it's not one metric, it's multiple metrics, right? You're looking at unemployment, you're looking at job growth, you're looking at GDP growth, you're looking at incomes, and you kind triangulate across all of them because the data is complicated to work to work across it is very easy to be like the data is wrong you know it's like the easiest statement in the world to dismiss things this is this is unbelievable quote and i think it applies basically to chamath which is you know and i think it's from justified uh have you ever watched that like horrible show on fx anyway the quote is basically something like if during your day you meet one asshole you've met one asshole if during your day everybody you meet is an asshole you're the asshole and i think that

is what's going on here which is like you can't just claim everything is fake and broken because you don't agree with it you're the asshole you're the one making up the data and so like no no but hold on but i think that it is like this is like objectively true where when people go and they look at the data right like here's a good example so i had a central banker he came on and we talked about the inflation number and his point was uh we know what the discrepancies are we know what the inaccuracies are we know it lags like he called out all the problems right yeah but he's like but we all have agreed that we're going to use this method all right let's talk about inflation because you know on the one like inflation data is complex because it's you you

have to the united states government does chain-weighted inflation and like we don't have but they made that complex yes i agree i will you know you ask economists to do something you're to make it complicated uh and there's like chain-weighted inflation measures is a very difficult thing to do well and to do consistently because basically it's trying to account for the increase in the quality of the good this is the part of inflation that is really difficult to measure right because like if you have a car let's use cars as an example and you know 10 years ago it was twenty thousand dollars and now that like let's call it the honda accord was twenty thousand bucks and now the honda accord is thirty thousand dollars and right now it's actually probably

closer like forty thousand dollars and we should talk about why uh that honda accord from a quality perspective is not the same car right like this new car it got better it got better it's got safety features it's got airbags it has driving assist it has a screen it can do bluetooth like it's got a lot of stuff but here but here i think this is like actually like a core disagreement that the working class has with wall street which is all that sounds good except for two things at the same time that you added all those products the cost of those products have been coming down so the led screen like all that stuff and has fallen to the level where now you can put it in the car most of those things didn't exist when we made the car 20 years ago i understand but

the car itself is actually lower quality than it was 10 20 years ago like the car was actually better it had a longer life cycle things lasted longer there was better quality to that you know like all these components i mean if that were true people would be buying we'd be seeing like rich people buy used cars up the wazoo they do no they don't they no they drive they drive they drive it's like a it's a flex to buy a car from the 50s 60s 70s that's not that's different that's that's that's a that's a showmanship move and that's the 50s nobody's telling 50 cars don't even have air conditioning like what fucking car do you want to buy there's no air conditioning it's insane like like well if it still runs 50 years later or 70 years later i mean yeah it's

cool to have some like drop top 1950s convertible like it makes you feel like you got you know all the money yeah yeah but like that's not a better car it's cooler car it's not a better one but like you know the inflation again going back to like measuring inflation that is a very complicated thing because you do have inflation in in the price of cars uh quality has gotten up so what the government does they do this really funky thing called chain-weighted inflation and they try to account for the quality improvement in the good in the same way you've ever seen those like radio shack ads from 15 years ago where they have like the page of all the stuff you could buy and now it's just like one phone, right?

Because you used to have like a radio and a calculator and like a walkie-talkie and a phone and all of it's now in this like tiny little device in your pocket. So like, has the prices gone up or down? Because the phone's clearly more expensive than the old phones, right?

Old phones maybe 20 bucks. Now an iPhone's like a thousand, but that is not the same phone. So they do this weird thing. But why did Teslas get better and go down in price then? Because they got better at manufacturing. Okay.

They got better at manufacturing. Like they just get, they get better at that. So why can't Ford do it? Well, I think they can. I absolutely think they can. so why are car prices going up because we've regulated the fuck out of them that's why and tesla has the same regulation i get it tesla prices are expensive teslas are expensive cars like the model y entry you can lease a car enough like 200 bucks a month no you can't absolutely

not and the you want me to look it up yeah model model y uh monthly lease no monthly lease right now well that's a financing thing let's talk about the actual purchase price okay the entry level price for a 2026 tesla model y is 48 000 that is like a steal for the a car that drives itself? Okay, I'm just saying it's a $48,000 car and it doesn't drive itself well, maybe on the highway for 20 minutes. I agree. It's a cool thing to have, but it is not a cheap car. Car prices are very expensive for a variety of reasons. One of them are Democrats. So like, this is not left right thing, right? What we have done is we have regulated emissions in these cars and we have required the cars to be materially more efficient in their emission standards, right? In terms of

like miles per gallon and, you know. Well, Tesla is the most efficient. It is. Well, it is because it's electric right of course but electric cars are more expensive because the battery is really expensive what is a toyota camry uh right now you said 40 i actually think it's cheaper than 40 but let's see yeah just generally let's see about 29 000 bucks okay which is a japanese car um but it also doesn't have all the cool electric stuff and yes drive and all that so it's like a decent you know that used to call it 30 to 48 000 is the comparison between yes but like why have these prices gone up and it's because we've created rules that have forced the car makers to make more expensive cars right making a a fuel efficient engine is more expensive that's it it's just like

we have fuel emission standards we have safety standards now now these are good things in terms of well depends on what you think about green energy it depends what you think about safety standards and like libertarianism but like car prices are up because we have rules and so like the more rules you have the more expensive it is to make things plus consumer preferences change also right like people were very comfortable in 1980 buying a car without air conditioning nobody is buying unless maybe that 1950s car nobody's so car prices have gone up all this going back to i understand we have inflation i'm not trying to poo-poo it part do you believe the cpi number directionally i couldn't tell is three but that sounds like we're right no no that's no

it depends on what you mean but like what's the accuracy we're focused on like you see why best analysis like i don't believe the data no i'm fine to say like the cpi data might be off by a little bit but like what's causing growth in prices regulations and then we pump the fuck out but it's not just off like here's here's a good example right so in december i think the government metric was like 2.6 or 2.7 percent on cpi right the government metric true flation showed over three so it was higher sure from december to today we've seen the true flation the alternative number go from over three percent to now under 1.5 so it's crushed 50 percent yeah i mean during that same time we raise rates hold on but during that same time the cpi number has gone from 2.6 to 2.8

so actually the government number has gone up but the true inflation number has gone down i don't know what's in this true inflation i can make a metric up too and tell you it goes up and down so like i don't know it's actually in that number but if i just say do you think since december inflation went up or down you probably would say down i would say yes definitely down because rates are up and so you see a slowing in the economy absolutely borrowing gets more expensive people stop purchasing housing prices you know like you slow the economy down which is what the fed's job is to do is to slow the economy down when it's overheated and that is working right like as it's supposed to i mean like this is what this is the job of the fed chairman is to slow the economy

down when you have inflation and one of the tools in the toolbox is to raise rates which we've done and so absolutely inflation should come down which metric you know that that will vary based on what you're trying to look at what good you're looking at but absolutely coming down now like why did we have it in the first place because we pumped a crap ton of covid money into the economy we borrowed a lot and we spent a lot with both parties both parties both parties yeah yeah and that that that is a real problem but like this idea that like the numbers are made up is just flat out incorrect the people making the numbers up are the ones going on on public you know television just literally lying about where job growth comes i mean that is an insane do both

sides lie oh of course of course i think that i think the dems i think the dems lie without knowing No, come on. I think they say things. I think they believe. I mean, I know a lot of like liberal devs and like they believe this shit. I know you can't offend your friends, but come on. If they go on and they mislead, they mislead on purpose.

Here's my test, ready? This is my test. If you go in and the Democrats are in the White House and you listen to the press secretary, there's obvious, like during the Biden administration, like Peter Doocy would ask something and the woman would say all kinds of crazy shit. People are like, that's insane.

And then the same thing happens when you reverse the roles, right? and now all of a sudden you've got the republicans in office and the press secretary's asked some question and they'll kind of twist the data we should call them all on their bullshit all right so as long as we're clear it's just like i think a huge piece of it is like whoever's in power their critics get really loud like ah they're lying they're lying but it's like both sides well the extent of the lying today because lying is not binary it's a spectrum uh is like materially worse than biden biden wasn't good either like i mean it's really did he tell the biggest lie

the thing that's really hard oh my god the thing that's really hard is like it's hard to be like that guy's bad but this guy's worse because the minute you start criticizing them they're like but biden i'm like i know i agree he wasn't great either and so it's hard to be like everybody sucks uh the podcast is not called the independence yeah i think it should be called everybody sucks and like can we put smart people back in charge you know grow the pie grow the pie i have this vision in my head which i'm never going to do uh which is like to start a third political party that is called the grow the pie party and the only thing we have opinions on are ways to grow the pie because that is the single best thing for Americans,

whether they realize it or not. And eventually that works, but I don't know. No one's going to vote for me. Anywho, just to inflation, the natural course of Fed raising rates and the slowdown that higher borrow rates essentially will bring inflation down. And we were well on our way.

We were well on our way to inflation coming down until this insanity over the last few weeks. So let's just go back to it because I want to talk about tariffs for two seconds because I just think like- Are they deflationary? it depends on how big of a tariff okay all right there we go making progress yeah i mean by the deflation is like not we don't want deflationary thing in america yeah we want moderation we don't

want inflation like high inflation and we don't want deflation either you want gd you want it's very simple it's very simple you want real gdp growth three percent to be two to three percent and and for folks who don't necessarily understand you want gdp growth above inflation right like you if you can grow gdp faster inflation you're doing really really well because your pie is net growing people have more money you can tax that base a little bit better and then you can redistribute it like growth over inflation is the winner uh we had that for like 20 years things were growing we had this little really horrible blip where inflation outpaced growth and now we've got this two-pronged like attack we have to work on which is really hard

which is you have to bring inflation down which typically means slower growth because you have higher rates, but you also want to keep growth, right? And the best way to keep growth, as we've talked about, is deregulating the economy. And so, anyway, this is like, we've just done, I think we've identified the proper problems, right? Like growth isn't as fast as it should be, and inflation was high. We were knocking out the inflation one through higher rates, and we looked at this growth thing, and we did all the wrong things. We just picked, we've got the problem right and we got the solutions absolutely wrong and we can talk about why tariffs don't work if you want to go there but like you know the problem isn't that

america growth is exceptional it's it's that the solution the medicine we're giving it is just like kicking it in the nuts and like there's a terrible idea okay why doesn't it hold on before we get to i have an example i'm gonna bring you yeah i know trust me i know you were i know i know you're not here for this uh because you know that i'm right but um all right so uh do we agree that american consumerism we're like the best in the world at doing that and we are not good at producing things in the sense of uh shoes uh t-shirts like all like the disposable you know type stuff is that like a general agreement and then flip side let's go to the other extreme china's really really good at the production side and they're really bad at the

consumption side is that like a framework that you subscribe to or no no no okay because production of goods is not created equal making five dollar t-shirts are not good jobs they're not good jobs nobody wants to work in a sweatshop like we nobody wants to go like sit in in a factory for 18 hours assembling iphones americans don't i should say like that's what i mean by nobody but do you think but here's my we are very to be clear america and i wrote there's another thing i wrote down because i'm like oh he's gonna tell me we don't manufacture shit and he's wrong oh we definitely manufacture we manufacture lots of shit now we manufacture are you gonna pull up my tweet from yesterday where i said what we manufacture ah america america is a manufacturing powerhouse

in design right in the like white collar work which is like the most the hardest stuff to do we are pretty good at manufacturing complex goods yep and what we've decided airplanes weaponry absolutely homes all that absolutely and manufacturing of higher priced goods and more complex goods means those companies are more profitable and therefore they can pay their workers more. You as America do not want to manufacture hats and underwear and t-shirts. Those are not good jobs. And what we realized is it's actually better to like let the people in Vietnam and the Philippines and in China and other places, Mexico, who are developing nations and want those jobs to do the like low margin apparel. Apparel is probably like the best example of this

and let us focus our time on the more complex goods that are more profitable and therefore better for americans in the long run so it's not that we don't manufacture we manufacture plenty we're the second largest manufacturer in the world second largest behind china like we manufacture lots of complicated stuff tesla makes cars here we make rockets here we make apple all of apples is i remember it's in the fucking label designed in california right like we do this stuff what we've done is we've just taken the like lower quality lower paying stuff and we moved it offshore and that is a good thing because it takes the prices of those goods down and it means that americans who are struggling with income can afford better stuff like we are

really good i don't think there's like a thing is like good consumer i think americans have a luxury of having many of their core items except for housing and health care to be pretty cheap like it's pretty cheap to live in america in if you want to buy apparel and you want to buy some groceries like i'm not saying it's free but it is cheaper than it that it used to be and the quality is up. And that's because we've allowed- I think the quality of life from a cost perspective has actually declined significantly over the last 15 years. Purchasing power is up, which is the right way to measure it. But again, why isn't purchasing power up even further? Housing. Housing. It's 50% of your budget. It's 50% of your budget. It's like saying, I have this $100

and that $3 thing is the real problem. No, that's not the problem. It's the thing that's the bulk of what most Americans who aren't rich spend their money on. Housing is the biggest line item in But hold on, when you say purchasing power, you mean like the actual purchasing power of the US dollar in your pocket? The amount of goods you can get for a dollar. The amount of things you can get for your dollar. It's not $1, obviously,

but like the amount of stuff you can get has gone up. In what time period? Over the last 30 years, because we've done, absolutely. The dollar has been devalued by 26% over the last five years. The dollar is the strongest it's ever been. And you- That's a relative comparison, but that's not against goods. You measure currency relative to other currencies.

They don't, they don't. Okay, yes. Like, how in the world am I going to get a $4 hat 30 years ago? This stuff didn't exist. Of course it did. No, no, hold a second. You used to be able to buy 30 chocolate bars in 1913 for $1. Today, you can't even buy one chocolate bar for that same dollar.

Okay, $1913. Inflation adjusted is probably, what, three, four bucks now? Five bucks now? Like, that's not a comparison. It's like apples and oranges. No, no, inflation adjusted. You're talking that the purchasing power of the dollar went down. The average American whose house got bigger, whose diet got bigger.

like we do so much more stuff we buy so much more stuff buys less than in 1913 no no absolutely not hold on a second you but inflation adjusted is the is literally the equivalent of losing purchasing power you're obviously you're trying to normalize it but if one dollar if my purchasing power went up at any point over let's say a five year or ten year period any point in american history if my purchasing power went up i should be able to buy more goods and services for the same dollar you can't do that yes you can and yes absolutely you can now there are some goods that You can't because those goods are regulated. Housing, education, healthcare, right?

Food. Food. Do you know how expensive a fucking avocado was in 1970? You couldn't barely, you could barely get an avocado because we couldn't get them out of Mexico. Like this stuff wasn't available. People go back to this fantasy of like 1970 abundance. It was not true, but it's not true.

But this whole thing is like, you're talking about avocados. I'm talking about just simple everyday basics, a loaf of bread. I can get a cashmere sweater from Quince coming from Asia. I don't know if it's Vietnam or whatever for 60 bucks. Okay. $60 for a cashmere sweater. That is an ultra luxury good in 1970, 1980s, probably hundreds of dollars.

But it was less than $60. No way. Cashmere, real cashmere? Absolutely not. Of course it was less than $60. No, this is the kind of stuff you had to have millions of dollars to buy. Like this stuff is available.

Here's my favorite example. Do you know what phone Jeff Bezos has? Your phone. The billionaires in our economy mostly have the same stuff we have. Like flat screen TVs. Do you remember televisions in the 1970s? They're like four feet deep.

They're black and white. To go up and change the channel, you can buy a like 85-inch flat screen, plug it in. It's got Wi-Fi and streaming. It's like $150. No, no, no. But you're talking about the quality of the good. What I'm saying is the purchasing power of the dollar has absolutely been decimated. I can buy more stuff with my dollar.

Absolutely, I can buy more stuff with my dollar. Prices have come down on most goods. Not every good, but on most goods, on day-to-day goods, they've come down. and they've come down because we've a few things. One is we've moved them, the manufacturing of these things to lower cost centers, right? We've moved them to Vietnam, to Philippines. Sometimes it's China, sometimes it's not. Plus those people got really good at making them and they make them at scale, right? So prices of those goods come down. It's just like, none of these things are true. Like you can buy more stuff. Now, again, it's not every good. You can't look at this stuff

as like, you know, goods. It depends on which good, but you remember seeing the cost of goods, there's that chart that everyone likes to show with like healthcare goes up like this and everything else comes down. Almost all that stuff coming down is because of globalization. You got your computer, so now I got my phone. I asked Kroc,

has the purchasing power of the dollar increased over the last 30 years? No, the purchasing power of the US dollar has not increased over the last 30 years. It has decreased. Inflation has heavily eroded the value, meaning a dollar today buys less than it did in 1995. Based on CPI data from the Bureau of Labor Statistics,

the purchasing power of the dollar has roughly halved. It went down 50% during that period. For example, what cost $1 in 1995 would cost about $2.05 in 2025, reflecting an average annual inflation rate around 2.5% to 3%. And the U.S. economy grew faster than that.

Like, if you took that dollar in 1980, let's say like inflation is like 2%, roughly, let's call it from 1980, and you took that dollar and you invested it in the U.S. economy, right? Like even just in stocks, let's call it. But that's not purchasing power of the dollar. The growth of your dollar from 1980 to today is-

Went down. Obviously, if you just stick a fucking dollar under your bed, you're not going to be able to- But that's purchasing power. Because you take your dollars and you invest them and they grow. This is like people's incomes go up. But in 1980, only like 30% of Americans did that. Dude, the pie grows. Your income goes up. It's not an individual dollar. You get more dollars.

But your wages didn't keep up with the rise of the price of the goods around you. They absolutely have. And American wages have grown faster than inflation. But I think everyone agrees other than maybe you that your wages keep up with the price of increase of goods. American wages- That's why people feel like they're falling behind. american well okay american wages have grown faster than inflation two part of the problem is american wages are deflate they're decreased by rising health care costs you don't see these costs because your employer pays them so you get you know you're kind of like knocked down

plus the price of goods that you are purchasing because we've gotten really good at globalization and manufacturing have come down you are way better off today than you were in 1980 and that is 100 true but hold on that's the quality of the stuff you're buying but this is i actually think this is a really important point. It's why I started the conversation with, I think for some portion of people, 100%, they feel better off than they did in 1980. I think for a very, very large portion of the population, they don't feel better off. Do you remember 1980? Do you remember New York City in 1980? We had a crack epidemic. There were people getting shot on the street. We had 25% of murders in New York. Probably instead of global murders, we're like in New York or United States

murders were near. This was not a nice place to be. The US was not better in 1980. Absolutely not. like maybe the glam shots that we see in the magazine seem good but this was like not america was not amazing it was not amazing stuff was expensive there wasn't like you didn't have abundance of all these goods houses were smaller the quality of the goods was lower like this this this is a fantasy that we tell ourselves that 1980 was awesome and it wasn't it was not and it's gotten better and better and better and yes some goods in terms of the price of those we want them to come down have not come down but that's because we regulate the fuck out of them we regulate housing we regulate health care we regulate education all right let's talk tariffs okay

i want to go through my my use your example okay so he brought a prop i brought a prop is that a you did not bring a maga hat i did i brought a bag of hat i figured like all right this anyone can like think of you know okay well is it signed is it signed it's signed by donald trump is this your hat yeah it's real hat where did you get it's a collector's item oh you like bought it my my old co-founder gave it to me as a joke and i was like oh this is a cool thing and uh Was it like in your office? Yeah, I keep it in my closet. Oh, in the closet.

So you can't keep it out because your friends come over. Yeah, no, I just wear it by myself and I look at myself and I get in the mirror. You ever heard of Andrew Schultz's bit about, that's white people's teardrop tattoo? He's like, it's the last thing you put on before you go out of your house.

I pull it out in public and it's like worse than doing like Coke on the street. Everyone's like, I don't know about this hat. You know, like, uh, you know, just, yeah. So explain your hat. Public, public, public drugs is like, one's like below you know wearing uh make america great hats now come on it is true though if you see someone walking down the street with it everyone's just like damn that person really

don't give a fuck i know i agree with you it's it's a it's a flex of like i don't care and and i'm probably stupid uh so i just i just want to talk about this hat it's a prop fine okay so this hat i i would bet i don't know the actual price right but you know trump's name on his we can buy this hat online because it's made in like vietnam or whatever for about look at the tag is it made in vietnam it's a trump hat i'm sure he lied about where it's made i don't even care you know it's like made in america even though it's clearly not uh this guy is you know he's not he's not telling the truth anyway even if it were like let's just pretend you know because i have no idea but let's pretend like this thing is made in vietnam it's five bucks okay right for

us to buy it. And then we come in, right? As an American entrepreneur, as a manufacturing company, you look at this and you go, okay, there's a market for hats. The current market clearing price for said hats is roughly $5, right? The Vietnamese and others are pretty good at making them for five bucks. Why are they good at making them for five bucks? A variety of reasons. One, they focused on it, but also their labor costs are lower. And so like the input costs on their side are lower. So they're able to make this thing for five bucks. And by the way, that is not just like a United States clearing price. That's a global clearing price because they export and they don't just, well, maybe this hat, they just export to America, but for others, they might

export it to other places. Okay. And then we say, this is what a tariff does. We want to make those hats. It is strategically important, whatever, for the United States to make these hats. And first of all, I just want to start with that thing. The United States government, the same government that you and i just talked about all its failures all the reasons it's incompetent both left and right is now centrally deciding central planning this is communism roughly that hat manufacturing is important step one is government deciding this right there you should walk on tariffs because we've now moved from a market-based economy to a central planned one that is a disaster leaving that aside what actually happens the government says you know

what we have to strategically manufacture these stupid hats but for america to do it we can't have that price be five bucks it's too low that is in by definition what the american government is saying when they apply a tariff to this hat because they're saying in order just to really grow in order for american manufacturing to make this hat it's got to cost 10 but but i think a key piece to it is why is it five dollars if america can only make it for 10 sometimes because their labor costs are no that that is one potential thing for sure is the labor cost yes but in other product scenarios it is because a foreign government is subsidizing the producer yes they are manipulating their currency they could be there's a whole bunch of like a toolbox of things

they could be doing to get the price down to five dollars if it's labor i think that's one example i understand but if they're subsidizing producers or something it's a whole different ball game Totally. And I'm going to leave that one out for a second because that's basically a China argument. And I actually think we'll agree on the China problem, which is China implements tariffs in a different way. Instead of tariffing American goods, which they still do, they subsidize their industry, right, by basically printing money and handing it to the, you know, in particular like cars. But the Vietnamese don't do this. And the Filipinos don't do this. And most of the manufacturers, like this is just not a thing they do. There isn't like government subsidies.

Well, there's a lot of products around the world where they do do this. Maybe not in Vietnam. I'm not familiar with that. It's really China. But like Canada does this with their lumber. And there's a huge reason why the American lumber producers, who could produce plenty of lumber, could almost produce all the lumber we need in America. They can't compete because the Canadian government is subsidizing the producers. And they're able to flood America with cheap lumber and actually put a strain on the American producers.

And to be clear, we tax that lumber, right? The Americans tax. No, no, no. We've done this for 20 years. like we know that the canadian government is subsidizing lumber and a specific type of it and we tax it and you like that idea if if we can just if we can prove that the canadian government or any other government is illegally subsidizing an industry i want to be very crisp about what this means if they are illegally subsidizing an industry basically pumping a bunch of government

money into it absolutely that is unfair practice that is not free market that is not free trade and fuck them right and we should be pretty clear that like if you illegally subsidize an industry but that is a high bar that is essentially printing money to make your local manufacturing cheaper and that is not what 99 of trade is right that is a weird what number what number do you think it is i don't know you have to go good by good one two like and yes it's very specific like you could you could point to like byd in china being subsidized by the chinese government like they do some stuff but i just want to go back to that so i think one big disagreement because by the government that you have with the people who are very supportive of tariffs is that i think

everything you set up at that point they agree if they're subsidizations currency manipulations all that stuff they think the number's way higher than you think it is yes people are stupid i like i understand that like i you know they make of course they do because you've been telling them that it's true even though it's not like yes they believe the shit that people tell them even though it's not accurate uh we thought for a while that the earth was flat like for hundreds of years now people think that only one percent of goods are subsidized people didn't wash their hands before doing surgery like we do a lot of dumb shit as humans and so like it doesn't surprise me people believe things are wrong but they're wrong all right hat right like because we're not remember

like even if even i do think we agree that a legal subsidization of industries should not be allowed but you agree with the other thing the currency manipulations and the other like unfair trade practices that are falling under this whole uh if a government is purposely devaluing its currency relative to what it should be which is really not happening across the board in fact they are chinese doing the other thing right now which is a whole longer but in 2018 in response they were for a while and then they flip okay um if they are devaluing their currency which allows them to basically have cheaper labor costs to subsidize manufacturing and other stuff sure but again like these are edge cases and this is not what trump is doing this is not like an educated view of a

few key places where we think governments are subsidizing this is not what has happened he did that in 2018 he went surgical now he's going blanket yeah i mean and even is that a fair way to describe it was i mean yes in the sense that in 2018 this stuff was really targeted it was like chinese steel and a few other things and washing machine solar panels yeah because solar panels are definitely subsidized by the chinese now we can debate whether that actually makes china better because they're basically selling shit at a loss that we can use to make energy i'm actually not sure that's a bad thing like yeah i'll take the chinese taxpayer money and not have to pay for it and buy cheap solar panels like i'm not sure that's bad but again these are like from the

consumer's perspective but from a manufacturing perspective why do we want to make solar panels well it's like a low-paying job making solar panels not like a great business tiny margin massive competition like why do we want to why just trying to then why just trying to do it because they figured if they could make them they have some industry because everybody else is unemployed because they're poor they're poor that's the exact argument that half the country is making about america is that they don't have jobs that they feel poor that they need manufacturing jobs i get it but you don't want to make solar panels it's the wrong industry those people don't make money those industries don't make monies the government has to subsidize

it just to have the jobs. They're basically taxing their population to employ a bunch of solar panel workers who make like $4 an hour. That is not good. Nobody wants those jobs. You don't want those jobs. You don't want to make solar panels. You don't want to make hats. You don't want to make apparel. Not cool, not fun. Like we want better jobs. But if you know China's doing it and you don't try to level the playing field, aren't you simply allowing for a non-free market to exist? It's a subsidized market by the Chinese government, which is subsidized by the Chinese people okay taxes and other and other revenue do you so do you subscribe to the idea that if the tariffs were able to get us back to a no tariff world with free trade agreements in place that

actually are following 100 you like that tariffs are not a tool to be kept on tariffs are a tool to get more free trade okay that is the case i want to go through why i want to go through why i want to talk about making this hat man but do you think that uh i actually think trump in a weird way agrees with what you just said. No, he doesn't. No, he doesn't. Because he's talking about keeping,

he's talking about bringing manufacturing back. And if you're... But that's part, but I think that's part of the free trade. No, no, absolutely not. Absolutely not.

Free trade would not bring manufacturing of low-cost goods back to America. In fact, it would make the prices of those things cheaper. It would make the prices of those things cheaper. But we're not getting

those jobs back. We already just agreed that the United States can't manufacture this stuff for the prices that clear it in the global market. I think that we could... Here's my general...

Hold on, hold on, hold on. We can manufacture this hat better than the Vietnam can. No way. Maybe, well, better is, the problem is the keyword there is better. Like, quality-wise? Quality plus price. No, because if we could, we would do it.

Like, no, no, no, no, no. We would do it. It would happen. If, if, if there was free trade, we would do it. What are you talking about? The Vietnamese have, they have a domestic trade. Like, do you think a machine or a person made this hat? It's a combination of the two.

It's absolutely free trade. And by the way- Wait, no, no, no, no, hold on a second. Well, it's not free trade because I think Thailand, I think, and Cambodia are the two that I'm more familiar with. I think that their average tariffs against the U.S., it's some crazy – it's like 20% or 30%. It's like 2% or 3%. 2% or 3%. I have all the stats.

I will send them to you. The average global tariff of countries where the United States has free trade agreements, which is most of our exporting. Because now we're flipping from importing to exporting, and that's a problem. We'll go back to exporting. But on the exports – I mean, I'll touch it for one second. The average tariff on U.S. exports of our free trade partners is less than 10%. but India is a little bit higher. China is-

India is way higher. It's 13. And there's a bunch of exceptions. Yes, it is. It is. And I pulled all the numbers. It's 100% on cars. There are certain strategic industries

where they are protectionist. Absolutely. And there is a reason why India is really shitty at making cars globally because of their tariffs. And like, I just want to go through this. Like India will never be a manufacturing powerhouse in cars if they're tariffing people

because their car companies will not be globally competitive. And this is the problem with tariffs. This hat, I just want to go back to this and run this through. It is $5 for the Vietnamese or whomever to make this today. They do not subsidize it, right? It's not like the Vietnamese government is like

piling a bunch of money into this stuff. Free trade allows them to make this thing for five bucks and we want to buy it for $5, right? That is just a, that is a fact. And the reason that works is because they are a developing nation. Their people do not make as much money. And so a $3 job is better than a $2 job, which is better than unemployment.

This is globalization. It brings people up, right? and this is bringing the vietnamese who i don't agree i don't agree their alternatives would be unemployment okay like the alternative is unemployment that is not a good thing so but i think that but i you can make a very strong argument that actually globalization has hurt people in vietnam do you remember what vietnam was 20 years ago 30 years ago this is like 60 unemployment people living like it's a farming nation 20 30 years ago with mass unemployment it was basically a thorough some people some people are definitely winning but

just like our country, globalization has definitely helped some and not helped others. For example, there is no argument that Vietnam is better 30 years ago than they are today. Absolutely. No, no, no, no. You're looking at holistic. You would argue that America is better. But what I'm saying is that there's a increasing percentage of the population is not better off. So in America. No, no, no. Just flat out wrong. Flat out wrong. Employment is up. Incomes are up. GDP is up. They have major. None of those. But my whole point is that all of those numbers don't actually matter for the on the ground truth. Absolutely. They do. That represents the mass of vietnamese people i'm sorry i'm talking america you're talking yeah i'm talking

about vietnam because i i think globalization is really really good for third world developing nations and it's good for americans because we get cheap stuff we get cheap stuff that are not good paying jobs we want anyway and i'm going to walk through why the protectionist stuff doesn't work and bernie is wrong about this too five dollar clearing price we're almost there by definition when we put a tariff on an imported vietnamese good the hat we are saying if the goal of that tariff this is the point if the goal of that tariff is to revitalize american manufacturing which is never going to work what we are effectively saying is american companies cannot compete at that five dollar price point because otherwise you don't need a tariff unless there is

unfair trade practice there's not they're not there's no unfair hat trade practice let me tell you but like and this is the vast majority of industries and again we're not going to talk about the weird edge cases we're going to talk about the majority of the stuff so there's a high percentage chance that the hat manufacturer in vietnam really is via china and they're just using it to evade tariffs cool we get real cheap hats like this is a great but that would be by definition unfair trade practice sure if the chinese are like throwing a bunch of hidden money into this like and you could prove that and we cared like absolutely well it's well known that they definitely are using vietnam cambodia not for hats chinese don't want to make i'm not saying

specific but just like they definitely are trying to get around and i from what i understand the reason why they tariff every single country in the world is to prevent them from being able to circumvent those tariffs i mean like i don't know why we think chinese giving us cheap shit that they subsidize is a bad thing but like we can go out if it puts our manufacturers out of business we don't want to make this stuff and here's the here's here here's here's like the point do you think that people in middle of america would make that hat if they can make the numbers work you can't make the numbers work it's fantasy it's like saying would you like to fly if you could absolutely i would love to have a jet pack on my back but i can't do that it's not reality

they make those in america you okay hat fuck i'm like so close uh all right we are saying this hat cannot be successfully manufactured by the united states for five the government is deciding this is important which is a disaster in the first place and then we say all right for us to manufacture this thing it's got to be 10 right that's essential so we're going to slap 100 tariff on these guys so now we have 10 okay so then the next thing that's supposed to happen if we go like one by one, is now an American company. And I think this like sequence is important. It goes, oh, interesting. Hat prices are 10. They are no longer five. You know what I'm going to do? I'm going to start making hats for nine. It's not going to make them for five

because if I could make them for five, I already would have done it. I'm going to make them for nine because there's your spread right there. That $5, whatever, 100% tariff or something like that, that has created this fake opportunity for this American company. And so the American company decides to raise a bunch of money and invest it to make $9 hats. Now, here is the problem with that. First of all, the government has decided with that tariff that this is important to America. Maybe it is, maybe it isn't, but now we have central planning. Two, hats are $10. We have just raised the price for every single person in America. We have taxed 350 million americans just to get the price up for this weird semi opportunity for a u.s company to make nine

dollar hats three even if this works and you get um whether it's like the lead time on this shit's gonna be like four or five years you have a company making nine dollar hats and by definition nine dollar hats are no longer globally competitive we are not we cannot export we cannot export. We have created a single market, which is a domestic protected market by the American taxpayer. The American taxpayer is paying so that we, hat company, can employ whatever, a few hundred people and make more expensive hats. Everything I just said is true. That is how this stuff works. And then by the way, this is the worst part. Even after that American company comes in and maybe five years from now successfully makes $9 hats, which by the way, you cannot

experts you're only selling them to americans you're only we're big countries so maybe that's not that bad the minute that tariff goes away that company goes bankrupt it is not globally competitive these are shaky jobs these are not good companies you do not want to work here you do not want to start those companies because you switch administrations and all of a sudden they're not protectionist anymore the tariff comes off the company goes away the jobs go away but they're not this is not market forces and this is why it doesn't work plus everybody pays more but we did switch administrations and they left the tariffs on they left some tariffs on strategically and double and doubled some yeah like chinese steel because they're flooding the market with like

cheap steel you sound like a republican yeah no like i mean we can go back solar panels solar panels steel dude cheap solar panels are good that's a good thing like i get that people like uncomfortable that like the chinese are making all the solar panels but like solar panels are not good business like have you seen the price of solar panels over the last 20 years it's cheaper and cheaper and cheaper the margins are coming down and by the way here's what's happening it's not just the chinese anymore other asian countries are figuring out how to manufacture solar panels and so those solar panels are getting cheaper because there's more global supply which is another good thing for america so like why do we want to manufacture solar panels why is that

well i think that a huge piece of it is uh let's start with there's a national security concern solar panels is one piece but there's a ton of these different products pharmaceuticals uh different defense uh products all kinds of stuff sure if you think like we need to make our own bullets i agree with you okay so bullets uh also energy production we have domestic energy we have domestic energy but if we want solar panels pretty important then you want more expensive solar panels not necessarily absolutely necessary you are explicitly saying the united states cannot manufacture solar panels at the market clearing price and that is why you're adding a tariff. By definition, by definition, by saying you need a tariff to manufacture panels

here, you are saying the US cannot do it at the current market clearing price, which means the prices will go up. Because what you're saying is that if there was true free trade, they couldn't make it as cheap as they could make it right now. I get it. Again, in this edge case of government subsidizing a specific industry and solar panels is actually a pretty good one because the Chinese definitely do subsidize it. Like they absolutely do, right? Now we are talking, I want to be really crisp we are talking about i gotta put this hat away we are talking about you should put it on your head it looks really stupid i'm like uncomfortable i can hold it but i can't but like if you put it on that'll be the head i don't want a photo of this

like this is embarrassing it's worse than like a nude photo um like we we are basically saying that we we don't want china to make super cheap solar panels because they're subsidizing them again this is like one percent of goods right we're talking about the edge case of the edge because we're not talking about Trump. It's higher, but go ahead. We're not talking about anything about what Trump is doing. So like, sure, strategic,

because they're, you know, subsidizing. No, but here's- This is not what I'm saying. Hold on, hold on. Cheaper solar panels. Would you rather, as an American, not a rich American like us, but an average American-

Speak for yourself. Dude, you're wearing like a $4,000 suit. Like, you're not poor. And I'm definitely not poor. So let's like, let's go call a spade a spade here. Do you think Americans would prefer that we have 20,000 solar panel manufacturing jobs in the middle of, I don't know where we would make them,

Texas, Idaho, Kansas, wherever, someplace, you know, where we would manufacture things. We get maybe like 20,000, 30,000 jobs. But every American now pays materially more for solar panels, which means they pay more for electricity. Whether you believe in solar panels is a different story. But like, that is essentially the argument.

You're saying we as Americans should pay more for solar panels because we want to make them. But I reject the premise that we couldn't make it cheaper. If we could make it cheaper today, we would do it. If there was free trade,

we probably could. Because the price would be higher. No. Because the price would be higher. Yes. You're arguing for subsidization by the Chinese government. And what is the outcome of subsidization?

No, if there was free trade. What does that mean? If they didn't subsidize, they didn't manipulate the currency, they didn't do anything to give their producers an advantage. If they didn't subsidize, let's do this one by one.

If the Chinese didn't subsidize solar panels, what would happen to the price of Chinese manufactured solar panels? Well, the price of their solar panels would go up. Correct. But then- Which is really important. But then we would have the ability to make them in America

and that competition would drive the price down, which is exactly what happened in steel washing machines and solar panels in 2018. No, we would make the more expensive solar panels. So then why in 2018, we put tariffs on those three products. All three products went down in price over the next 18 months. Because we have global economy.

China's not the only place that makes steel. No, no, but the U.S. began producing more of those three products. I'll give you two examples. Yes, we pay more. See, I laid the trap. He walked right into it. We pay more. Sorry.

No, no, no, no, no. We didn't pay more. We didn't pay more. Hold on. Let me give you a concrete example. Absolutely, you pay more by definition. No, no, no. Let me explain.

With steel, in 2018, we put tariffs on steel imported to the United States. When we did that- Which countries? I believe it was China. China. There was a subsidization coming from Canada. But no. Which, by the way, makes steel prices from those countries more expensive.

Okay. And so guess what happened is that certain companies came to the United States, took over old factories that we had, they began production. But a stated goal of the steel tariffs was that we are under 80% capacity utilization with our steel producers. We want to get to over 80%. That's exactly what happened. Steel production in the United States went to over 80% capacity utilization, and the price of steel for the first three to six months went up, and then it fell. And by the end of 2019, it was lower than the pre-tariff price. No, because then we would, because if that were true, if that were true, we would remove the tariffs and export. Hold on a second. Just wait till you get to the end. It's simply not true. No, it is true.

I'll show you the data. The second thing is washer machines. Same thing. The United States did not make washer machines. There was a South Korean company that were the big makers of the washer machines. We put tariffs on. Guess what the two South Korean manufacturers did? They came to the United States.

They set up plants. They created 2000 American jobs and the price of washer machines fell. And by the end of 2019 was cheaper than they were pre-tariff. on top of that just know like like i i know you're saying it but i'll show you that by definition the price goes up it goes up and then it's protectionist there is no reason to drop that price because you have a market that the government has created like there's just no way i mean i get that maybe we're importing them from other countries now absolutely or if you create additional supply absolutely right but like globally supply but like the the definition

of a tariff is that the united states can't make it cheap enough and so therefore we need to raise the price of it. No, no, but I'm saying that you don't understand how tariffs work. I know exactly how tariffs work. I know exactly how tariffs work. You are literally taxing the good. That is what it is. It is a tax on the good. So that's the price of solar panels. Yes. Solar panels have gone down drastically because the Chinese have subsidized them. No, no, no, no, no. Even though we tariffed them 50%, they still went down. That's the global price, first of all. And the Chinese subsidize the shit out of these things. Okay. Right. Why do you think the price goes down? Because the Chinese subsidize it. Do you see this right here? This is washing machines. You see when

tariffs are put in place, it spikes. Agreed, right? There's a change in price. Look what happened then. Then the price went down. And before the pandemic, it actually was lower than the price before because we increased the domestic manufacturing. At higher prices. No, the price ended up lower than pre-tariff. Hold on. And then here's the steel price. Same thing happened here. Yes, commodities boom bust, my friend. Commodities boom bust. When the United States economy, when the United States economy. Every single product, every single product that we tariffed in 2018 by the end of 2019 was cheaper than before the tariff oh my god no how much you want to bet how much you want to bet and by the way i just showed

you the charts first of all you showed me some chart that i'm sure is made up and has like weird data behind it also like when so when the u.s is not right sorry i'm sure the data you looked at was probably coming from like newsmax but like you know when when the when the u.s economy shrinks right like first of all commodity cycles are driven by supply and demand adjustments in the market right and commodity cycles boom bust regardless of u.s manufacturing agreed they They really boom bust based on demand. Supply and obviously like, do we overproduce? So demand goes up, we overproduce.

But demand for American made steel goes up when you put tariffs at higher prices. Yes, of course it does at higher prices. You've created an artificial market by making them more expensive. Otherwise you would just buy them from China. If you increase demand, but also the domestic manufacturing goes up.

It goes up at higher prices. No, it doesn't. Yes, it does. Otherwise you don't need the tariff. that's not true that's this is the point though is that uh you still can have domestic manufacturing go up and do it at a cheaper price than what was previously being done it's a because it's a capacity component if somebody's coming into the market and they're selling subsidized products into your market right we're not talking about subsidized but i agree if you have subsidization

all of these products are subs that's that's the whole solar panels and yes by china in a specific case. But I think that the argument, and again, I'm not trying to defend the administration in this, right? I just think, I really do think the tariffs are a good policy. I don't agree with the severity at which they're doing. Maybe they're kind of doing some judo negotiating with 100% tariff on China that's going to end up low or whatever. But what I, let me actually do this. Here's what I think we should end up at. I think that we should end up with 5% to 10% blanket tariff on all imports to the United States. And rather than use tariffs as a punitive program. We should then use it as an incentive program and make a list of all the things that

we want for other countries to make for us and then remove or significantly decrease the tariff on those products to incentivize them to come to the United States. So what that in effect would do is say, hey, if you want to access the U.S. market and we don't desperately need your product. You want Americans to pay more for stuff. I understand that that is what your goal is. But they wouldn't pay more. They absolutely will pay more. Because the other flip, hold on, the other flip side of this is, do you agree that Americans would be better off if they got a huge tax cut plus the tariffs? On a net basis,

would they be better off well which americans because if you anyone making under 150 000 a year okay so if they remove the federal income tax for anyone making under 150 000 barely pay taxes anyway they barely pay taxes people making under 50 000 basically don't pay taxes well right a lot of them pay uh up to 30 i mean when you get in the hundreds but like the vast majority of americans before under 50 like no tax 47 is mitt romney's number uh yeah like that that was the number the poorest americans the poorest americans probably rightfully so basically pay no taxes so tax cuts don't fucking help them they don't help them at all right so like you are going to be worse off because tax well 80 of americans make less than 150 000 great i mean i'll take

the tax doesn't make me richer but like for the person who makes 80 grand those tax cuts are not helpful minor plus the tariff is a tax increase the tariff is a tax increase because they're now paying more on a net basis on it let's just i disagree with that but let's just say that it is a tax increase. If they also get all federal income tax removed, are they better off? No, because you're paying

more for goods and the tax savings isn't enough. Absolutely not. Why would you be paying more for goods? Because the tariff makes them more expensive by definition.

The point of a tariff is to make the product more expensive. Is to make the imported product more expensive. Yes. But not the domestically made product. We cannot make this shit here.

I actually, I looked it up. There's a bunch of hat companies that have been around since the 1800s in America. They're doing just fine. Absolutely. How much do you think

those hats cost? Well, they make ball caps. What do you think that the end retailer- But I get it, I get it. Americans can make more expensive luxury goods and there is a market for more expensive luxury goods. And that is absolutely true. But cheap stuff, by definition, we're not making.

So if we could make it, you wouldn't need the tariff. So do you think that the quality of the product actually makes it cheaper? If you have to buy three of the hats over the next three years because they keep wearing out, is that actually a cheaper product? Americans can decide for themselves whether they think something is high quality or low quality.

It's not my job, it's not the government's job. Let the market decide. I don't know. If that hat sucks, no one will buy it. And some other company will show up and make a hat that works. This is how economics work. Let the market decide which hat is worth the price.

But the market isn't deciding right now. Absolutely, it's deciding. No, it's because the currencies are being manipulated. The products are being subsidized. There's tariffs on the other side. How about this? I mean, I appreciate that you think Americans get stuff too cheap and we should pay more for this stuff

so that we can have low paying- But the price of the products goes down over time. because the globalization allows other countries with lower input costs to make cheaper stuff and make it at scale. Who can make it cheaper than China? Vietnam, India, Philippines. I mean, at this point, by the way,

China is not always the low cost manufacturer anymore. But this is my point. So if that's how economics works, why aren't they already making it? What do you mean they're already making it? If they can make it cheaper than China can, why don't they make it before the tariffs? Vietnam does make this.

I don't know, some stuff. But like, if you put a tariff on China and say, hey, you can't bring subsidized steel into America, then why is somebody not making it cheaper than the price of China? They are. Okay. So why is it that another country can make it cheaper

than China who has to subsidize their steel industry? No, they can make it cheaper than the tariff to China. Okay, but- They can make it cheap. Yes, if the Chinese flood low cost steel into the market, which by the way is an input cost to construction manufacturing. So there's another argument of like,

you want cheaper housing? Cheaper steel is a good thing. but yes well unless the trade-off is that you put your own steel manufacturers out of business i don't know like do we really think that we have to make steel here i mean don't you think it's a national security concern i don't know i mean are we gonna build things we're gonna buy steel from cheaper people and make the stuff cheaper but but are you planning to go to war are you planning to go to war with all of our trade partners is the united states plan to go to war with mexico and canada and europe and like southeast asia except for china it's not like

steel is only manufactured in china people like this is the other thing that's going on everyone's like it's china like guys there's more countries out there than china that makes stuff i know they all like tariffs now yes i know and now we're going to pay more for all the stuff that they make i understand that but yes like if unless the american producers start to produce it at higher prices no at lower prices they can't do it at lower prices if they could do it at lower prices they would already do it they would already do it no no no lower price excuse me lower prices meaning that if there's a free market let's just use easy examples let's say steel was one dollar right and the chinese subsidize it the clearing price of steel because that price obviously moves

yeah of course yeah just right now steel uh it's one dollar the clearing price fine current clearing prices china subsidized by 25 now it's 75 cents for the chinese steel for the chinese steel correct in america we say well we can only make it for a dollar there's a 75 cents we can't compete so we go and we say okay we're gonna put a 25 tariff on china on china now it's a dollar do you think the people would make steel in america of course if we go and we say we're actually gonna put a 50 cent tariff now chinese steel is a dollar 25 and we can make it for a dollar the chinese they don't make all the steel they don't make all the steel well they make a lot of it no no they don't like they really don't and like how much steel do they make look it up i mean like okay

chinese steel manufacturing as a percentage of global steel how about that perfect that's a good question we should have a referee for the questions yeah they also import a shit ton of stuff because it's basically like a manufacturing they make like houses professionally they import concrete they import like all copper uh okay they make 50 of global crude steel production okay that's a big number because they use it domestically to build buildings that nobody lives in no no but there's a lot of caveats but you said they don't make that much and it's no i'm just saying there are other steel producers there are other super by the way how much does america make not not a huge percentage because we want cheap steel like

why do you want to pay more for steel no no but this is the trade-off is that is it worth buying the subsidized steel if it is putting your own manufacturing capabilities out of work this is the question do you as a nation of 350 million people who buy houses and cars and consumer electronics and groceries, do you want 350 million Americans to pay more for steel or cars or avocados so that we can employ 30,000 steel workers in an economy in the United States?

By the way, those aren't like particularly great paying jobs. In an economy in the United States that has 4% unemployment, has income rising faster than every single other country in the world. we are taxing 350 million americans because steel is an input to almost everything americans buy right like nobody goes to the store and buy steel they buy a house they buy goods and the steel is an input cost so we are saying we don't like this cheap steel so all 350 million of you

you're gonna pay more but guess what there's an instagram post of 30 000 people in pittsburgh who are making steel be happy for them. It is a wealth transfer from 350 million Americans to 30,000 steel employees. So it is government cronyism at its best. It is the United States government deciding where money in the economy should go. And it is picking winners and losers.

And the losers are the American consumer. And the winners are a few random manufacturing companies of a few random goods that the United States government run by a bunch of idiots have decided are important to us. That is tariffs. It is the United States government deciding that you should pay more because we need $30,000, 30,000 jobs. Well, we do. But by the way, we do this for pretty much every single industry that we think is important. The United States government does not pick the industries that the United States thinks are important. It literally has nationally strategic, important industries. They put a label on it. It's like it's an actual government label

they put on it. This is of national. Sorry, I want to be clear. The success of American companies and American exceptionalism is because the United States government has decided that we're good at it. Well, here's a good example. So there's a business that I know they manufacture highway signs and they put traffic cones and they get government contracts. The US government requires that they use American made products. Yes, I get it. The United States government is an inefficient beast that is going to pay more for those signs and those traffic cones, which is why a manufacturing construction from the federal government is so fucking expensive because we make the united states government and all of our subcontractors use american labor and that is why a bullet train

in california costs 800 billion dollars and the chinese can do it for 1 billion because we are shooting ourselves in the dick like yes we are absolutely requiring the u.s this is this is a biden problem by the way this is what you just described as an app this is the issue with all all the biden stuff which is like it's it's it's american version of subsidizing industries it's the same thing you're bitching about the chinese doing it's the same exact thing we are taking u.s taxpayer money the united states government does not have money we do not have money the united states government takes money from you and from me through taxes we it's not like the government has bank account like every year they collect and they spend okay so when they when the federal

government spends money or any of your local government as well right on on on traffic cones what was the other one they make like fucking metal signs or whatever they are spending your money it's not the government money there is no thing is the government money your money and they have said okay we are only going to buy manufactured goods in america and so we are going to pay more they explicitly are paying more there is articles and books and data up the wazoo about the cost of American infrastructure being so goddamn expensive. And the reason for this, including rules and regulations, one of the major reasons, and it's in this new abundance book, which is great, is we have buy American rules. And we are buying from non-competitive, high-priced domestic

manufacturers. And I get it. They have a few jobs. You're a buddy's company. Congrats for him. He is leeching off the American taxpayer. I mean, by definition, he is leeching off the american taxpayer because we have decided to favor his company over globally competitive prices and if he's for no to be clear he's forced to buy the american-made traffic cones and stuff no i get it and to win the contract to win the contract and then he charges the american government even more it's passed through to the taxpayer absolutely it's not he's not he's not losing money i thought it wouldn't be it wouldn't be in business so like we pay we pay for this subsidy and we pay for higher prices in all of these things and like if the argument is we should be happy about that

okay fine like if that's the argument then let's just be honest with the american people that we think we should tax you in higher prices to subsidize a few industries that donald trump has decided are important because that's what we're doing by definition and like okay i i guess but like remember we went back and i think steel is such a fascinating one because we've been back to the beginning of this which is we said americans feel poor right they feel poor and one of the reasons they feel poor is housing probably the biggest reason in my opinion people are maybe believe differently but housing prices are insane what is one of the largest input costs to building a house steel okay copper right like these are input costs to houses and what we are saying is

all of you are going to pay more for housing now because we don't like cheap steel coming from elsewhere. That is what we are saying by definition. The cheap, it's too cheap. It's too cheap. Like, and so all of you Americans are about to pay more for new construction in America so that a steel mill in Pittsburgh probably can employ probably less than 20,000 people. Which then go out into their community and spend money, which create more jobs, which create tax revenue, which drives better outcomes. It's a government job. We just created essentially the government job. No, stop.

Yes, we did. We took money from the American people through a tariff. You've gone, you've completed the whole circle. Now, like you've perfected the like Twitter troll argument. We have taken money from the American consumer because the United States government collects that tariff. So we taxed you. we taxed you and we handed

the money to the steel workers unless we took the tariff from the supplier which is passed through to you in higher prices

not necessarily absolutely Walmart has already gone to their suppliers so that they're not going to increase their prices Walmart also just

pulled guidance today because they said the economy is so soft they can't die to growth okay but that has nothing to do with what their price

strategy is with the tariffs absolutely it does because they know they're going to have to raise prices and so they can't predict demand on the higher prices

and that's why they pull guidance maybe assumption read it in their press release they are specifically saying we think consumer demand is going to come down we're worried about prices we can't predict our demand anymore so we're going to pull earnings guidance as walmart because they know that they're going to have to pass through maybe it's not a hundred percent but they're going to have to pass through these costs to the consumer it's going to reduce demand and it's going to hit it's going to hit earnings and so like we will pay more and and and it's it's taxing americans for cronyism we are we are we are literally like just think just think of what happens

you take all the steel coming into america we say it's 20 more expensive now okay right the american government collects that money from you from you but but demand shifts to the american producers but correct so the demand at higher prices not necessarily yes at higher prices because if you didn't need the tariff the u.s production would already be there through market forces no if you have a certain amount of production you increase that production but demand stays the same for domestic production then obviously the price would go down but also even if demand increases but your production capacity goes up at a faster rate then you can also drop prices that way the price goes up demand falls and we are creating a world where in order

for the u.s to compete we have to have higher prices if you didn't have the tariff the u.s couldn't compete you're saying that by definition you need the tariff what you're saying is they're cheating what you're saying is they're cheating it doesn't matter if it was a free if it was a free market you're still saying whether you think they're cheating or not because cheating is a weird word sometimes i wonder like is by taking money from chinese people to make lower cost shit for us who are they cheating our american manufacturers yeah but like every other american gets cheap steel like again this is the cronyism this is the cronyism we have decided but you hollow out the middle class and you become oh it's like 20 000 steel working jobs and by the way you don't

how you make the middle class hollow out worse because you have now made housing more expensive in the united states because steel is an input we gotta go we gotta go where can we set where can we send people to find you on the internet oh god i hope they don't find me no no come on i'm like too angry about this stuff uh to twitter uh i i guess um you know building really expensive houses for rich people since those are the only people who are gonna be able to afford it these days uh i don't know i just like i grew up sorry i grew up not rich wasn't lower middle class perfectly middle class and i remember going to the stores with my mom and and you know we're jewish families she looks at the price of everything like 18 times and she's like i don't

know milk's like 195 you know like we're not gonna buy them and like expensive stuff sucks it sucks and it sucks for the average part doesn't suck for me i don't care i have enough money i don't think about the stuff but for the average american expensive shit is not good housing being expensive, groceries being expensive, input costs of things they want to buy being expensive. This is not a good thing. This is not a good thing. And we have gotten really good at getting cheap stuff from other people. We win. We win. We have a surplus of cheap shit that you get to buy. And all we have decided is that probably less than 100,000 jobs total are worth every American paying more. And I'm going to give you like one really interesting example, two, and then I know

you're gonna kick me out uh tsmc because we talk about domestic manufacturing of chips right like a critical supply chain uh we can argue whether it's critical why it's critical i think a lot of it has to do with we're worried about china taking taiwan it's not that we think the taiwanese are subsidizing us but they're worried about supply that facility in arizona which costs like a few billion dollars to make right so thank god yeah they built it it's nice it's good thank you thank Thank you, TSMC. 5,000 jobs. 350 million Americans.

5,000 jobs. This is what we're aiming. By the way, that is the most strategic industry that anyone can identify as semiconductors. And we create, and by the way, many of those jobs are temporary because they're construction. The high paying, really interesting stuff at TSMC

is in Taiwan because it's the design work. It's the engineering work. It's the product management. It's the thinking stuff. We took the lowest paying jobs and not that many of them. And we rode around on like a military parade about how awesome this thing is going to be. And it's like less than 10,000 jobs.

Walmart will hire more people than that tomorrow. Not anymore, but they would have hired more people than that tomorrow. There was an announcement about in 2017, this is even before the tariffs, I believe it was in Michigan or somewhere in the Midwest about what's the name of the manufacturer of all the iPhones? Oh my God. Why can I not remember that? Foxconn.

foxconn said they were going to come in and spend like 10 billion dollars on a manufacturing facility here and it was going to employ like all these americans and they got a tax subsidy for doing that right which is essentially a tariff in a different way right we're gonna like give you money to come here and either we're gonna take it from the americans or we're gonna take it from like the local people in that state but you're handing this company money so it's a tax because that money again the government doesn't have money the government has to get that money from somewhere so it takes it from the people right that facility they announced in 2017 foxconn in america has hired fewer than 2 000 people they shrunk it because it was not competitive they

could not make that stuff in america competitively and so all the stuff coming out of that foxconn facility is too expensive so they're shrinking it down we tried this we tried this already we tried to pre-tariff through tax subsidies it's the same idea it's just on the other side like you're handing a company money either by raising prices for people or by literally handing the money in tax breaks, but it's the exact same thing. And it doesn't work. It doesn't produce enough, nearly enough high paying jobs. And the downfall of all of this is it just makes everything more expensive, which shrinks the economy, shrinks tax revenue. And you think people are worried about the solvency of social security and Medicare and our military now?

Just wait. Just wait when you have a shrinking US economy and our tax revenue shrinks with it. right the the the pie of america is not fixed the pie of america grows and when you need american domestic manufacturing to grow the pie you absolutely don't because we've been growing the pie for 30 years and we by the way we do have american manufacturing we have fuck tons of american manufacturing tesla spacex weaponry apple pharmaceuticals apple yeah like but apple assembles they design they do the important stuff yeah they do the important stuff they do the high we actually are an incredibly good manufacturing group but we just are really smart we're really smart about doing the things that are higher paid and harder and protectable and all of a sudden i

don't understand like in the 70s and the 60s and the 80s they're like we boycotted stuff because the labor jobs right making sneakers make like people like these are terrible jobs nobody wants them like we're boycotting sweatshops and now we're like hey you remember those sweatshops that we like didn't like can we get those jobs can we get the sweatshop jobs back and like no no no they're saying bring back machine uh manufacture they're not saying to go and build sweatshops in america what do you think i mean foxconn is like iphone assembly right and there are you know how high tech it is there have you ever seen a picture of a foxconn facility yes it's like an assembly line it's a giant assembly line with a bunch of technology yeah of course and there's not it's

not like a fucking ikea table yes like yes there's technology obviously with people like putting stuff into the and then if your point if your point is that actually we're going to automate it then we're not creating jobs we're creating computer jobs well so like to be fair we automated the uh production line of tesla and tesla created 125 000 jobs well to be clear we semi-automated the production line they actually walked it back a little bit and most of the tesla jobs are in design and engineering agreed they're not in manufacturing where can we send people to find the uh biotech stuff you're doing give them a website so they go check it i'm not sure i want my biotech world and my angry tariff world to like come together because you know all right

you don't uh but it's a curie bio curie bio it's on my shirt i was like should i wear this today like i don't i don't know if i want like this association uh all right thank you anytime do we agree kind of on some things i think we agree that we have to take a look we agree on the cheating we there's some cheating yeah there's some cheating we agree that tariffs can be a good short-term way to cure the cheating and of the if the tariffs bring us back more to like a net basis more free trade at the end that's a good thing well because even if you even if you stop the cheating in china it's really china it's really china like we say cheating but it's china of cheating and they do cheat they do cheat i can tell you biotech stories of how they cheat too

it's like actually kind of crazy i mean ip theft and like legitimate theft uh they're not good people well the people are good the government culture is not good i don't want to you know bully and entire people they have like really rough culture about stealing stuff um but even if you tear up the chinese stuff like there are other producers that are going to pop up they're not they're not united states right because like it's not it's not just china the world is not u.s europe china we have millions and millions and millions of other people who will pop up to fill demand if you or to fill the supply rather if you tax china so i i here's where i agree with you and then we have will actually rep um if a supply chain is critical for our military

for the us to protect the world which is what we do and that also protects free trade it protects our businesses because we don't want like pirates stealing on the way over and you joke but like that's an actual real issue i am okay saying we should pay more for some strategic military supply chains bullets tanks drones because like we don't want to be in a situation where we're in a war and we can't make our own stuff fine so i got to tell you uh breaking news and then i really got to go trump just raised the china tariff to 125 i mean look the only country i have to say i got i was at dinner i was at dinner last night and they're like but isn't china gonna win. The whole world's pie is going to shrink. Everybody's going to lose. Everybody's going to

lose from this. It's not like one wins and other loses. Everybody loses. China may lose worse than us. That is a true story. I think China may lose worse than us, but I'm not sure. I'm going to kill for this PC. Do we really want to be the tallest midget? Do we really want to be the tallest midget? Is that what we want? 125% on China, 90-day pause, and a substantially lowered reciprocal tariff during the period of 10% also affected. Awesome. Great. Look, I'm not like a sycophant. Like if Trump changes his mind and goes,

actually, we want lower tariffs. The goal of tariffs is lower tariffs and we're just going to deal with China. I will support Trump. So ready for this? Did he call the market bottom when he said now's a good time to buy? Well, he controls it.

He controls it. But you know he's going to say that he called the bottom. You know what? We should go see how much stock he bought before he tweeted that and then took the tariffs off. You know, like...

All right, bye. We got to go. Thank you, guys. We'll see you next time.