The Ricochet Podcast - Hello, Larry

Episode Date: May 3, 2019

Most Ricochet Podcasts follow a longstanding format: A little chat with the hosts, a couple of guests, some closing thoughts, a tune, and we’re out. But when you’ve got our old friend and current White House chief economic adviser Larry Kudlow on the podcast just hours after some very strong economic news, well, you throw out your format and let Larry drive the bus. We talk to him about the... Source

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As government expands, liberty contracts. It's funny, sometimes American journalists talk about how bad a country is because people are lining up for food. That's a good thing. First of all, I think he missed his time. Please clap. and using the start of the show for the customary fall to roll, we're going to go straight to our guest, Larry Kudlow, Director of the United States National Economic Council, and prior to that, Larry was Associate Director for Economics and Planning at OMB, commentator on CNBC, and might we add a podcaster on Ricochet. Larry, thank you for taking time away from the flood of calls that are no doubt congratulating you on the economy, right?

Right. It's been a very good day. Very good day. And I'm sure that the response from the left is going to be, well, now that we see the effects of deregulation, cutting in taxes and lower interest rates, it's time to raise interest rates, raise taxes, and increase the regulatory regime. That's about all they've got left in their quiver, isn't it? Well, look, one of the important parts of, you know, you've had some blowout numbers in the last fortnight. You had 3.2% GDP.

You got today's number 263,000, an unemployment rate of 3.6%. You also had a big boom in productivity, 2.4%, and a big jump in consumer confidence. Now, with all those growthy items, the other thing I want to mention is there's virtually no inflation. So the inflation rate in the first quarter was 0.9%. So for those Phillips curvers to whom you're referring, you know, who argue that strong growth causes higher inflation and therefore the Fed should raise interest rates, they're wrong and they don't understand the incentive effects of supply side tax cuts

and they don't understand the importance of incentives for business investment and capital formation, what we call capital deepening, and how that plays in not only the stronger growth, but higher wages and jobs, and not only higher wages, but the biggest beneficiaries of this new prosperity cycle are the blue-collar workers, the middle-class people. Their wage rates are rising faster than white-collars. So the whole picture is quite good, and this is reminiscent of the 80s, and to some extent the 90s, dominated by the Reagan-era policies,

under whom I served years ago, and it's working. It's just working, and we should be overjoyed. We should be happy. My favorite Never Trumper, Peter Robinson, should be overjoyed. Peter's not a Never Trumper. Hey, Larry, it's Rob Long. Oh, and you too, Rob. Nice to hear from you.

So what I was going to say, you already answered my question, but I hear my question was a little puckish, right? Hugely positive numbers overall. Do you now have to cherry pick the numbers and figure out which ones seem less rosy so that you can make a case for not raising interest rates? Well, first of all, interest rates are not going up. In fact, the Fed's own target, the independent Fed's own target is probably going to go down because of the absence of inflation sometime this year. And so my question is, why? I don't need to cherry pick.

When all the numbers are this good, who needs to cherry pick? I mean, you know me. I'm not above cherry picking. I like to create stories and messages and yarns and so forth but this one's just so good i just kind of sit back and relax and throw the pages up look at this look at this look at that unemployment rate 3.6 percent the lowest in 50 years lower than people thought it was institutionally could be. Growth about 3.2%.

Are we going to see 4% growth sometime? Might. Very well might. They have the potential to do that. They talked about growth in the 2016. I'm taking my time here because I know you're eating lunch. When they talked about growth in the 2016 election, people talked about, well, if we had 4% growth, X, Y, and Z would happen. All the smart people in the world rolled their eyes.

You're not going to get 4%. That's right. You may still get 3.5%, and then we'll be lighting firecrackers, but you're not going to get 4%. I just have two bigger questions. Where did inflation go? why is it not there um and is four percent growth still kind of should should all those smart people who rolled their eyes be unrolling their eyes and apologizing now oh that's okay. I don't expect any apologies. Nice guy like me. It's not a problem, really. Go ye and sin no more. On the inflation front, let me make two quick points. Number one, this is supply side boom. So we're creating more goods and services, chasing the same amount of money, and that's actually counterinflationary. So if you have four apples and the price of an apple is a dollar and you add, you produce a fifth apple, what happens?

Price goes down. And that's what's going on here. In economic terms, the supply curve is moving out and upward. And that's because of the tax incentives on the capital formation and productivity and so forth. The second point I want to note, which is related, but the dollar has been steady and strong for a couple of years now. The Trump dollar has been very sound and steady. and that is a key point in holding down inflation and interest rates. And again, it's very much like the Reagan 80s and the Clinton 90s when we had much better policy. The Clinton 90s, basically Reagan's

third term. And so we've seen this before. Some folks, folks have forgotten. Other folks may have lesser motives. But the combination of a supply-side boom and a sound dollar is very, very positive. Okay, I got one last one. I know Peter wants to jump in and James too. This year I had a whopping tax bill, giant tax bill, thanks to the reduction of the salt deduction. Me too. Me too. Holy jeezum crow. Yes. Yes. So everybody paid more.

So I guess what I would ask, so this question, two parts. Is that going to hurt people? Will that hurt growth? That's my first question. And the second question is more of kind of a pie in the sky hypothetical, the kind of things that you and I would probably sit together and stare out at sunset and dream of this utopia. But will the elimination of the SALT deduction, state and local tax deduction, will that lead to serious, meaningful tax reform, i.e. tax cutting, in high-tax states? And then finally, Larry, if it does, if it did. What if it did?

I can't remember all this stuff. I got to write. Hang on. I got to write this down. This is a really complicated question. First of all, I wasn't in the government. I wasn't in the government when the tax bill was passed. But I did pass a note along to those that were to make sure that you guys directly had

higher tax. Thank you. I wanted that as a test of your character and your metal. How great would this economy be if the next wave of tax reform was state based? Yeah, well, that's that's really the key point. I mean, look, on the state and local deduction stuff, remember, we abolished most of the AMT. So if you filed a lot of deductions, you wouldn't have gotten them in the first place.

You would have been pushed into the old AMT, and you would have paid whatever, 28 or 30% on it. Now, actually, upper-end earners, who I love, but they will get a deduction of $10,000 because we got rid of the AMT. Now, you want more. Well, okay, the solution to that is your point. You're right that these high-tax states need to lower their taxes. I mean, that's the ultimate tax reform. And maybe they will. I mean, I think it's up for grabs. I've spoken to several governors about this in blue states, and, you know, they may look at it or they may not. You know, New York, by the way, we've had a bunch of good conversations with Governor Andrew Cuomo, who's a friend, and I knew him, his dad. And he cut the corporate tax in his first term, so I've suggested looking at the income tax.

We'll see how that works, but he's capable of doing it. So we'll see. But this should be an incentive, I agree, for the high-tax states to start dropping their income taxes. Larry, Peter here. Just on that note of the different tax rates between states, exchange between then-Mayor Michael Bloomberg and Rupert Murdoch. Bloomberg, Rupert, I've been so good for New York that the life expectancy here in New York has improved since I've been mayor. Rupert Murdoch to Mike Bloomberg.

Mike, that's because all the old people have moved to Florida. Pretty good. That's pretty funny, actually. Hey, Larry, two of these – we've been talking about the good numbers. Was there a question in there? There's a question coming. There's a question coming. There's a question coming.

I have questions about two of the numbers. Milton Friedman, I think it's Milton who first wrote that, but the so-called steady or the long-term unemployment rate, all the economists I know argue that even when the economy is in perfect condition, you should expect an unemployment rate of about 4% because people drop out of jobs. They look for new jobs. And that's roughly what you get in a healthy economy. These numbers are even below that, which means what?

The economy is now going to begin sucking people into the workforce who have dropped out. We can expect wage rates to go up. I mean, what I'm saying is the labor market is almost preternaturally tight. You're thrilled about this? Yes, I am thrilled i don't no one no one knows what the quote right unemployment rate is uh i don't believe any of these old models anyway but look um if you would remove the word sucking i prefer the word attracting you have a strong

jobs market with rising wages and that is is attracting people who heretofore had been outside the labor force and weren't even counted in the unemployed. It's like they're coming out of the woodwork. And they're doing so for a number of reasons. One of them is the fact that their friends and neighbors are going back to work at higher wage rates. That's very important. And secondly, they'd rather work than not work. Most people, in my view, this is a personal opinion, although there's evidence to support this, most people prefer to work. They'd rather not live on the federal or state dole.

And this gives them a constructive way to reenter society and be productive. And it is interesting to me that the corporations, the companies, large and small, are hiring folks who may not have the requisite skills at the time they're hired. They might not even have the education levels, but they are training them. Why? Because they have job openings. You know, there's 7 million plus job openings, six and a half, some odd million unemployed. So you've got to, you know, you got to fill that hole. This is where my friend and colleague Ivanka Trump has been so helpful with her reskilling and job training programs working through the private sector with hundreds of

companies signing up. The theme of re-skilling and retraining is a very powerful theme in this new prosperity cycle. And, you know, a mother is the necessity of invention and that they want to do this because they need help. And by the way, you don't necessarily have to pay $75,000 for a worthless degree from Dartmouth College to apply for this. You can actually – oh, I'm sorry. Did I say – I shouldn't – I think you meant to say Yale, actually. Yeah, but the point I'm making is, you know,

you don't have to have all these credentials. You can learn on the job if there's a willingness and an incentive to do so. And I think that's what's happening now. And it's great fun. And throw out a lot of those old models. Throw it out. We're going to knock them dead. Larry, one more.

Another question about a specific number. As you know, I work here at the Hoover Institution where I'm surrounded by brilliant minds, many of them economists. Our friend John Taylor, for example. Our friend John Cochran. And they have trained me to believe that, yes, yes, yes, GDP numbers are important. It's lovely to have more people employed than not employed. But over the long term, the only number that really matters is productivity growth. And 2.4% is gigantic isn't it that's a really

yes those guys are right explain why that's important and then explain what the heck is why did we get this huge huge number quite suddenly no i i don't know about the suddenly part it's been creeping up from near zero. And gradually, we saw some progress in 2017. We saw some more progress in 2018. And in the first quarter of 2019, we got our number up to 2.4%. Look, productivity is very important. Output per hour. It's a measure of efficiency.

And it's a measure of the economy's potential to grow. So I have long believed, and Kevin Hassett, my friend and colleague here, we argued this for many years, that lower business tax rates for large and small companies would incentivize much more business investment in plants and equipment and technology and whatever, building new buildings and training workers. You know, they have more resources to train workers and give them the best possible equipment. The economic term is kind of a neat term. The economic term is called capital deepening.

Capital deepening, which simply means you're investing more. The companies are investing more in their own operations. We're seeing a lot of that. By the way, we're going to get a lot more. The CapEx numbers are running 5%, 6%, 7%. I believe they're going to pick up a lot as this year goes on and next year. So that makes the whole economy's potential to grow greater. And that makes every single worker in the workforce, about 157 million Americans,

some are better equipped, better trained, and hence more efficient and more productive. So this is a winner. It's, in some sense, the very heart of the story. Larry, I know Rob wants to come in, but just one more question or follow-on. Productivity, doesn't it also, at some level, if this continues in another quarter, another couple quarters, if it continues this year, doesn't it also affect morale? Out here in California, at least, there's this – it's in the atmosphere that China is the future. They're the ones who know how to invest. They're the ones with the terrific airports and the high-speed trains.

And somehow or other, we're left behind. Our capital is second rate. It's aging. And if we get this kind of capital investment, capital deepening and productivity growth, we're the hot ones again. We have nothing to fear. Doesn't it really just, isn't it a tectonic to the entire morale of the nation? No, I like that. I like that characterization a lot. Remember, China is a state-run collectivist economy. We're a market economy, so we're going to be much more efficient. And this great China behemoth, I mean, we're involved in a potential huge U.S.-China trade deal, which would be probably helpful if it's got the right ingredients.

But market-based systems are always better, more efficient than government-run systems. We've learned that historically from the Soviet Union all the way down to Venezuela. And China's lost ground in the last 10 or 15 years because they've given back a lot of their market reforms. Now, we don't have time to go through the Chinese analysis, but they're slumping and we're rising. That's the key point. They're slumping and we're in this huge prosperity wave. So we have improved our incentives. Again, we do have a market-driven economy. And everybody is getting more efficient inside that system. And the key point here is you could do this without inflation. Those old models are wrong.

And furthermore, wages rising are so good. I mean, it just drives me nuts when people say higher wages cause inflation because of the productivity factor about which we're speaking. So let's take just in round numbers. Wages are up 3.2%. So just call 3%. If the productivity rate is 2.4, that basically means any inflation potential is less than 1%, and it means workers are earning their pay increase, which I just love. That's the way our system should work. It's a good thing, not a bad thing, and it doesn't require higher interest rates or any of these old models from outdated Ivy League scholars. From Yale. Larry, back to China for a second.

People who are impressed with China and think it's the future are generally architecture, infrastructure nerds, and people who are Robert Moses on steroids and love their ability to flatten and build and the rest of it, but they are brittle. They do have problems, but they also got tech in a way that we don't in manufacturing. If you look at the rollout of the 5G network, we've opted out of it using Chinese technology, but people in Europe are, which is worrisome if you think that maybe they're planning spyware in every backdoor possible. We can't do it yet, though, because we don't have the manufacturing facilities to produce what China is. Do you see the end result of this? I don't believe any of that stuff. I don't believe any of that stuff.

By the way, we're running 5G so hot right now. I mean, we don't produce the tech. I mean, we have the tech, but we don't produce the equipment. We need manufacturing. We don't run suit. We have the base, but we don't produce the equipment. We need manufacturing. We don't run suit. We have the base, but look, in a free market system, you pick and choose. And we have all these big telecom carriers building out all over the country. I mean, it's just not true, the idea that we're not doing anything. No, no, no.

We're doing it, but we're using it. We're deploying everywhere. We're using equipment we get from them, though. That's what I'm saying. No, not from China. We're using equipment we get from Ericsson and Nokia and Samsung. Huawei, I don't want to break policy, new policy here, but our current law is that Huawei does not participate in our government build-outs. Whether or not they will be permitted to participate in the private sector build-out remains to be seen. Okay, I'm going to leave it there. In Europe, some of the largest

companies like France and Germany have shut Huawei out. And in other parts of the world, they're quite skeptical of the Huawei problem because of the Chinese spying and espionage problem and China law that permits them to call Huawei and say, you got to show us what you got. So we will see how that story plays out. That's all I'll say. But we're in very good shape in terms of our investment and deployment. And we have chosen in the Trump administration, we've chosen a free market approach, which I think, you know, we're auctioning off high, medium and low spectrum bands. And we're letting the private sector do the build out. That's the best way to do it. Andspectrum bands, and we're letting the private sector do the build-out. That's the best way to do it. And it's showing. I mean, we're deploying all over the country,

and that will include the rural areas, by the way. And President Trump and Ajit Pai, our FCC commissioner, just had a newser. I spoke at the 5G conference and laid out administration policy. We're very happy with this approach, very happy with it. Well, we're now going to deploy an ad so we can invest in Ricochet. Ever wonder where your family comes from? You can discover more about them and learn about your story by combining the Ancestry DNA test with billions of historical family records. Ancestry DNA gives you so much more than just the places you're from.

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slash Ricochet for $59. Ancestry.com slash Ricochet. And our thanks to Ancestry.com for sponsoring this The Ricochet Podcast. Rob? Hey, Larry, I got a question. Just let me go back to productivity one minute. What number should we be looking at at what metric and what's coming down the line to show productivity growth has affected wage growth because wage growth is sort of you know i'm

scrolling through the new york times um uh website trying to find the uh the part the paragraph they always put when there's economic good news under republican which is to be sure the or the bad news is and i can't find it but i think it's going to be wage um and the rate of wage increase what what other good news what other good news should we be expecting yeah but you know it's been they've been static for a while and they was blamed on productivity growth what do you um what do you if you were going to forecast the next 12 months, 18 months of wage... Depending on how you measure it with benefits and so forth, wages are rising for the whole workforce somewhere between 3% and 4%. That's a really good number. That's a really good number. That's a really good number. I mean, real wages, I mean, literally you have, I'll call it 1% inflation, but real wages are basically growing nearly 3%.

You're not going to do much better than that. I mean, this has gradually picked up over the past two years. So for a minute, just for like a hot second there, not even a minute, because I don't want to ruin your lunch. Pretend you're sitting in a room at the DNC or with Bernie Sanders or somebody like that. And you're looking at these numbers with the Yale Faculty Club. Yeah. What do you what do you what are you going to point to and say – I mean a friend of mine just tweeted. He said, well, the Democrats are in real trouble because all they've got – they have to run against all this good news, and all they've got is no cows. What are you going to run against?

Your friend is right. I don't know what they're going to run. Look, socialism and pessimism is not going to win this election. All right. Growth, prosperity and optimism is going to win, as it always does. And I'm surprised the Democrats have gone so far left, but you're not going to win on a socialist platform. It's just not going to happen. And they're painting a picture. I mean, I find this interesting. They're painting a picture of a country in distress and using class warfare arguments,

you know, dusting off those old arguments when it's simply not true. So what you see is, it's just not my opinion. Hang on a second. The polls are showing, almost really all the major polls show that President Trump's approval on the economy is running about 58%. 58. Correct. And moreover, when you look at polls about, you know, do you have a better financial future? Do you feel better? Are you more confident?

All that kind of stuff is very high. Take Trump out of the equation. Just people feel better. They're happier. We've talked about this down through the years. I'm into happiness. What generates happiness is more folks working. They love to work.

Right? Working is godly. Working is godly. Working is godly. And when people have more jobs and earning more money, they feel better. They're prouder. Families are strengthened and they are happier. That's happening now. Now, I know it's only a couple of years. I get that. But if this continues,

whatever happens in the election, I happen to think POTUS is going to win easily. But that's just my view. Whatever happens, the country is better off. That's the key point. The country is getting better off. Let's just talk about politics. You when we were talking, we were before we got on the podcast. There was some well, you know, there was some there was a week we could hear cheerful voices in the background, and I'll just leave it at that. But it struck me that you have been in a White House that – I mean say what you like. In many ways, it's untested. What advice are you giving your colleagues now about these good numbers? Well, I think the key point is to stay the course. In other words, from my standpoint,

the president puts a new set of economic policies on the table. Basically, in 2017, he began a massive rollback of regulations. Very, very, very important. And by the end of 2017, we get the tax cuts across the board, but particularly, in my opinion, the most effective were the lower tax rates for large and small businesses and better treatment of overseas capital and expensing of new equipment.

And you add that to the regulatory side. You add that to the energy side. We've reopened the energy sector. We are now the dominant energy player in the world. I mean, it's wonderful. Right. You know, we're going to probably end the waivers on Iranian oil. And Iran's saying, oh, we're going to close the Straits of Hormuz. And traders around the world sell oil.

The futures curve is dropping because we have so much oil in the United States, in the Permian and elsewhere. And then, you know, people criticize president's trade policies, but look, sometimes tariffs can really bring them to the table, something I've learned.

And we may have some very positive, the USMCA is a very big pro-growth thing. So I'm just saying, let us stay the course. Our job, I think, as people who are involved in the rebuilding of the economy and the new prosperity wave, let's just keep these incentives in place. They are working as they've worked in the past. I mean, my book was about Kennedy and Reagan. I want to add Trump to that. And it does not have to be Republican. It could be a Democrat, but the Democrats are going socialist on us. So that's out of here. We just have, let's just keep this thing going, you know, and enhance it. We'll probably have, you know, for the election season,

we'll probably come up with some additional tax reforms and regulatory reforms and immigration reforms are coming and the president's doing a good job to try to get some border security back and so forth. But let's stay the course. I mean, that to me is what you have to do. Larry, Peter here with two final questions for you, because you've got to finish your lunch and then get back to serving the president of the United States. Here's the first question. Ronald Reagan, you and I are both there. We know what Ronald Reagan did. He cut taxes, he supported a sound dollar, he rolled back regulations, and the economy grew with only a couple of very minor recessions for a quarter of a century. And then 2008 came along. We had a financial crisis. And by about 20 – and all of a sudden, it was as though John Maynard Keynes had never died and Ronald Reagan had never been born. And we were listening to get growth out of the – over 2.2 percent again.

And now this. So, Larry, what – why doesn't – what does the economics profession need to learn to catch up? Why does this impulse to talk down the United States, to talk about government control, when, as your book showed, John Kennedy, actually he proposed the tax cut in Johnson and enacted it, the economy grew. Ronald Reagan, the economy grew for 25 years. What's the fundamental insight in supply-side economics,

and why doesn't the profession grasp it? Well, interesting question. Look, I would start with this thought. History is very important. And one of the flaws in my profession is in the last God knows how many decades, econometric models undergirded by some pretty flawed assumptions, have ruled the roost, including the Phillips curve, which says growth and jobs are bad. History. Economic history used to be a really important discipline. I mean, I'm going back a long time here, but we need to study economic history for the very simple reason that we need

to parse through what worked and what didn't work. And you laid out the time horizons about right. I would only say, Peter, that I think we went off course. I think both parties have a lot of blame here. I know it's nice to blame everything on Obama and his economists, but I think that my dear personal friend, love the guy, George W. Bush, I think a lot of mistakes were made. A lot of mistakes were made. We went off course. Got it. We had this dry period of roughly 16 years. So maybe in our next installment, we'll carve that out.

But I would say to the people listening to this, economic history is very, very important. And I think it's frankly much more important than mathematical econometric models. And if we get back to history, and again, it is bipartisan. I want to make that very clear because Democrats have done a lot of good things in the last hundred years. So have Republicans. And so they've both done a lot of bad things. You got to go back a hundred years? Yeah, I like the hundred years. I love the hundred years, actually. I mean, I've been around, you know, for more than that. And I think that people really should have a scorecard, but don't take R and D out. Just look at what worked.

In other words, where were the prosperity cycles? And then where were the, I'll call them recessionary cycles. And usually you can match that with changes in policy approaches or regimes. And I think that's a really fruitful area for the economics profession, which has not done well in terms of its prognostications. Last question, Larry. Not long after you joined the administration, you suffered what, thank goodness, turned out to be, as I understand it, a relatively mild heart attack. Are you enjoying yourself, and how's your health?

I've never felt better. I mean, apart from this interview, I've never felt better. The ticker is ticking. I really am energized and re-energized. And, you know, God was with me, and it was a very mild thing, a couple of stents and I feel great. Uh, listen guys, I love this job for me. It's a grace president has been fabulous. Um, he is so accessible.

I mean, in and out all day and of his office. And, um, it's, it's just a wonderful thing. It's an honor and a grace and it's all I'm doing. I don't have any ambitions. I just love doing this job, and I'm just going to keep on doing it. I'm on now my 14th month. Very exciting. And around here, man, that gives you a lot of seniority.

But I just love it, and I have the energy to do it. And, you know, with God's grace, we'll just keep on doing it. I got to go. The Slovakians are coming and I got to go down. I hope that's not a good idea. Or something. I don't know. I've tried to eat lunch.

I've kept my weight down because of interviews like this would prevent me from eating lunch, which is great. Thank you, fellas. I appreciate it. And Rob Long, you're going to have higher taxes, man. Just whatever the policies are, we're writing you in. I am on a list, and you've made that list. You know what?

I kind of deserve it. I'm not even going to argue with you. No, you don't. You're a good guy. You're all good guys. You have a great program, and thank you very much for letting me on. I appreciate it. Thank you, Larry. Talk to you again. Bye, Mike. Bye. I got to eat my damn lunch.

Did you hear that? No, what was that last part? I got to eat my damn lunch. Right. I was under the impression that he actually, at the beginning, there was eating his food. He's got a couple of mouthfuls. I hope it wasn't hot because sometimes you get something delivered to you and it's just perfect to eat and then it gets cold because you're talking to a bunch of guys. But most of these delivery things take forever, James.

So they just take a long time and nothing gets hot when you get it delivered. Well, I don't interrupt. Larry doesn't have to have food delivered. He's in the nexus of it. I'm sure that there are all kinds of people who bring up things on nice sterling silver trays for him. But for the rest of us who, for example, have a long day at work or something, or just don't feel like cooking or we don't like what we have in the fridge, you know what?

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when you download the DoorDash app and enter the promo code RICOSHET. That's $5 off your first order of $15 or more when you download the DoorDash app and enter the promo code Ricochet. That's $5 off your first order when you download the DoorDash app from the App Store and enter promo code Ricochet. Again, promo code all together now, Ricochet for $5 off your first order from DoorDash. Thanks to DoorDash for sponsoring this, the Ricochet podcast. Give it a try. You'll love the service. Well, it's great to talk to Larry and it's always nice to know that they're sitting there in the White House figuring out ways to leave us alone so that we can prosper and get on with things. But unfortunately, if you're on the other side of the political aisle, of course, we are in a hellscape. There is nothing but chaos,

ruination, lies, and just general fear of the future on the left because of Barr and his lies. You know, it's odd. I've talked to some people on the other side of the future on the left because of Barr and his lies. You know, it's odd. I've talked to some people on the other side of the political equation, and they do not at all seem to be thinking or talking about how this investigation is going to circle around and point back to the previous administration. Gentlemen, do you think that that's actually where we're headed? Are we going to find out about all the spying and the honeypotting and the rest of it? And some very large names will have their reputations permanently besmirched by their participation in this soft coup? In a word, yes.

Yes. Rob Chortley. Why is Rob Chortley? I like this phrase, soft coup. It made me laugh. Well, it makes you think of a bunch of pigeons befalling the fine noble brows of the statues below but hey so i have a question about this bar thing and it's the it's a question about the way the democrats are responding or have responded particularly in the uh in his hearing the other day before the senate

judiciary committee so here's the way it seems to me and it seems obvious to me it seems this is the only way to look at it to me. And that is that Bill Barr provided an accurate four-page sort of headline service to Congress on the main findings of the Mueller report. Then Mueller complained and said, well, you know, that was accurate enough, but the press is getting it wrong. We'd really like you to release the 19-page conclusion. And the attorney general said, no, I don't think so. Let's just wait another 10 days till we get it all redacted and we'll release it all at once. They had a disagreement, but it was an honest disagreement. And then Barr released it all at once. And there is no story there. He didn't lie. He didn't suppress information. The most anyone can possibly claim is that he made Congress

wait 10 days or two weeks longer than they might otherwise for those 19 pages. Now, that seems to me so obvious that I really wonder if I'm missing something when I see Nancy Pelosi accuse him of lying to Congress and saying that there will be consequences, when I see Blumen – in other words, their reaction struck me as – the Democratic reaction struck me as delusional. Either they're seeing things that aren't there or I'm missing things that are there. And you two will now tell me which is which. Well, I think you're right. You're not missing anything. That's a perfectly fine summary. That would be the first page of the Peter Robinson report on this whole mess would be the executive summary and you did it.

The strange thing about it is that how quickly you go from being an independent, firm, well-respected character like Attorney General Barr before he was confirmed to being a shill for the Trump mafia claim. And how quickly that happens. I was driving around LA last week and I was driving around in a rented car. So I was listening to NPR a lot because that's just what you do when you're driving around listening to radio. Not necessarily. Well, I know. But you get a redded car. Well, one does.

That's what it was preset to. Yeah. But one of the things you heard, you heard two interesting things. Because the idea that what most terrifies the other side is that someone may be starting to investigate how this all happened. And there is a very big book or a very big, the chief economic architect of the president of the United States within an hour of great numbers being released. So you can talk about that. That's pretty good. But if you don't – but a long-form series of articles or book explaining how exactly this happened, a TikTok that's not actually political or partisan, just how it happened happened what dates and what happened first and what happened second and what they don't want the other side is for this to happen so they said the first thing that they said was um uh uh camel harris

was uh trying to to interview uh trying to interrogate bar and said has the president or anybody close to him ordered you to investigate this, meaning a secondary investigation? Yes. And Barwood looked at her like she – and a lot of people – this clip is a sign of Kamala Harris' brilliant prosecutorial demeanor. But I kept thinking, she lives on another planet. Everyone in America knows what the president wants. He tweets about it about every 10 minutes. He doesn't have to give an order or an order to bill barr to do

anything or to rose or anybody at doj all they have to do is go to twitter.com he says i want an investigation now he says it but the idea that we have to live in a fantasy where no obstruction of justice would occur only in a shadowy backroom kind of elliptical conversation between trump and his associates and the attorney general is just ludicrous. No, Trump tells you he wants one. If you give it to him – I mean in many ways I think it hurts Trump because now a lot of people don't want to give him one just because he asked for it. But the secondary part of this, the hammer that fell, was that now I start to hear it because I listen to NPR. I know it's a problem, but it's a very interesting – So do I. So do I.

I've heard a lot of people say – Not me. I'm pure. Isn't it time just for us to move on? To move on. Yes, yes, yes. And moving on in response to maybe we should find out how that dossier got compiled. Right. Where it went and to which judge at which FISA court was it presented as if it were evidence. What does that benefit anybody yeah come on so that's how you know when the other side says time to move on you know you know what

stick around a little bit like get comfortable like what was so here's the here's the here's the thinking on that i think from their side it's like all, okay. So the Russia thing didn't happen, didn't pan out the way we said it did. We'll move on because we'll all agree that the Russian thing and Hillary and her emails on the server, I mean, that was nonsense too. So we both had some errors. Let's go. No, because what Hillary did is not an error. The left has factored into the back of their brains the idea that there was nothing on that server of consequence. There was no problem with her having it whatsoever. It's ludicrous to assume that she set it up in order to avoid any of the usual filing and document archiving methods.

And that the idea perhaps that the Clinton Foundation was running something that coordinated with the State Department policy is absurd because she's the most ethical person ever to run for the office. So when you say to them, no, actually, it's quite relevant because what we had here was an FBI that said, we're worried about Russian involvement, so we're not going to go and look at the candidate who actually was involved in transfer of American assets to a Russian company and whose husband met with Putin and got half a million dollars from a Putin-controlled bank for the speaking fee.

That doesn't mean anything. We're going to go after this guy who publicly announced that perhaps they were going to have an apartment tower in Moscow. So – I'm sorry. I have one more question for the two of you, but I don't want to – James is on a roll. Go. No, well, I was. Go on. No, no, no, no.

Truly, go. Go. I reserve time to myself, but you go. It's a very pretty, wrong thing to say. Well, James is on a roll, but – But I just screwed it up. No, roll on, James. Roll on. I'm trying to remember where I was going with that. Well, other than that, it's not a tit-for-tat thing. They are actually quite intimately intertwined, those things you could say, and that the reason that we saw all of this Trump panic and Russian investigation had to do with a desire to obfuscate, shall we say, some of the dealings that the Clintons

had. So that's where I think this one is circling around. And a lot of people are going to roll their eyes because it does have to do with email and servers and the rest of it, which they believe was completely litigated in the public square and it's irrelevant. But it's not. It's really not. And I think we're going to hear about it again.

And the media isn't going to like it because they're going to be forced, I think, to report on things that are contrary to the narrative of the scandal-free, not a whiff, previous administration. That leads exactly to my, by the way, I truly apologize. Sometimes I feel like the trombone player or the drummer behind Louis Armstrong. And you do not want to get in the way of the greatest temporizer history has ever you don't want to get in the way of a solo but sometimes when he takes a breath he's just taking a breath and sometimes when he takes a breath he wants you to come in so

more like more like i can't do a lot of beans for lunch but do go as bad as that okay so here so this is this but this is james as it happens, James set up my question and this is another question for the two of you. I can see a couple of different things that the other side broadly construed might be nervous that Bill Barr would discover. And one is simply the sense of entitlement that the intelligence community – and it turns out they really were a community. Comey and Brennan and Clapper had dinner together all the time. They really were buddies. They were running a small town. And they really felt of themselves as a state within a state.

And their concern that Barr will discover is how thoroughly anti-Trump and how entitled to manipulate the campaign they felt. And that would be bad in and of itself. It would be embarrassing and worse than embarrassing. But I now begin to think there's a possibility, I begin to think, Kim Strassel has said this, Holman Jenkins has said they've written this. There's at least some possibility that that dossier was planted in. It wasn't just that knucklehead steal. The Russians wanted that dossier planted in the middle of the American presidential election, that it was intentional Russian disinformation, and that our brilliant intelligence community fell for it.

They were not only entitled and biased, they were utterly incompetent. That may be the deeper thing that they're frightened. Am I right about that, or am I making too much of the possibility that the dossier was in one way or another beyond Steele all the way to Putin. Well, I think these things get complicated because the best kind of disinformation is disinformation that's 45 percent true or 51 percent true. And then you throw in some extra stuff in there just because it's fun. I suspect that what's going to happen is if they do do this kind of investigation, which I hope they do, they're going to discover an incredibly cozy relationship between the DNC and the Obama DOJ and the media. And it's going to be the kind of thing that no one wants to admit is happening, except it's going to be absolute catnip to Trump and his most ardent supporters.

It's going to be – it will justify for a long time their claims and legitimately so. And I think what we're going to watch is – and I hope that our side trusts that this stuff is there and so takes it easy and slow and methodically and doesn't go crazy about it and builds a real case because the other side is going to turn this – this is going to be the Benghazi of 2020. The other side is going to be saying, oh, you people and your – it's Benghazi, Benghazi, Benghazi. That's what we do. That's what happened in 2016. It turned out to be okay but barely, right? That's what the other side is going to do, but I think our side should be saying, how did this all happen as a goal the kind of process, the journey they used to call it. Just making trouble was enough. Just disrupting the patterns and the systems was enough.

And sometimes they would do it just to see if they could. But I suspect that ultimately the dossier, I mean there's some really lurid stuff in there that may or may not be true but it's going to be true enough that it had that people could be easily duped by it but the way they used it and the way they compiled it and the way they used it

they used a dossier they compiled to prove that they were allowed to compile a dossier because he's corrupt, the way they proved he was corrupt they paid for a dossier that said it. I mean, this entirely circular stuff that they then put into the news, and the they, I think, is not the Russians. I think the they is the DNC,

would be a really good story for all Americans to read. Yes, when you say that, some people say, well, it may not be all true, but there's some truth in the dossier. I think what they mean is they don't believe that there was a golden shower episode with two hookers. They believe there's a golden shower episode with one. But what will be interesting on our side is to watch the people who are virulently anti-Trump, how they react to something that essentially vindicates what a lot of the people they don't like have been saying for an awful long time.

And that's going to be a reputational test, I think, because a lot of this has to do with people saying, look, I didn't vote for the guy, I didn't like the guy, but that's separate from whether or not I believe there was collusion, and that's separate from whether or not I believe what was done to him was fair. You have to be able to do that, and if there are going to be organizations, opinion or otherwise, that stake their credibility on permanently opposing, automatically gainsaying anything that benefits the Trump side,

then they continue further and further to go into irrelevance. Hey, I've got to tell you one thing before we go to our closing remark by Rob. Rob's going to give you a little insider information. Those fat cats don't want you to know. But first, I've got to tell you about Lending Club. Lending Club. What's that, you ask? Well, for decades, you know, your credit card, that thing in your pocket,

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No high-interest credit cards either. Just go to LendingClub.com. Tell them about yourself, how much you want to borrow, pick the terms that are right for you, and if you're approved, your loan is automatically deposited into your bank account in as little as a few days. Lending Club is the number one peer-to-peer lending platform with over $35 billion in loans issued. So go to Lending Club now, LendingClub.com slash Ricochet. Check your rate in minutes, borrow up to $40,000. That's LendingClub.com slash Ricochet. LendingClub.com slash Ricochet. All loans made by WebBank member FDIC, equal housing lender. And thanks to Lending Club for sponsoring this, the Ricochet podcast. Rob, you want to tell everybody about this writer's strike that's going on, whether or not it affects their life?

Is all the TV going to go away? Tell us about this episode. Well, it's very complicated. It's not a strike. The Writers Guild is run by a very, very, very, very aggressive classic union organizing kind of character who came from organizing work for the Garment Workers Union in New York. He has a very aggressive stance, and he thinks that a bunch of contracts that the Writers Guild has and agreements it has with all the players in Hollywood need to be revisited. The one which is really a kind of a standards and practices contract with the agents.

And the agents are – talent agents are a highly regulated group. There's a lot of state and local – a lot of state regulations for what they can do and what they can't do. They often will say to you if you have a show and you're doing – you create a show or you're working on a show, we're going to package – take a packaging fee on that show, meaning we'll take our commission off the top and then you won't pay a commission yourself. We're going to charge your commission essentially to the studio of the network. And the more key elements they have, they represent, the big talent agencies represent, the more lucrative that package fee is. Sometimes they

even get to negotiate back-end points for themselves. In other words, they're getting very, very rich, and writers, because writers identify as labor, resent it. And so the Writers Guild has decided to order all of us, all of our members of the Writers Guild to fire our agents until they change their business model, which is like telling somebody who runs a business, telling a movie theater, you can keep the movie theater open, but you can't show movies. It's an existential dispute that has no solution to my mind except some complicated solution that I suggested myself a year and a half ago and was laughed out of the room for. And I'm not sure where this ends, but where it will end is probably a radically different writer's guild

if the writers are stupid, which they almost traditionally are in a suicidal way. A very different writer's guild, a smaller writer's guild, and maybe a more emboldened and more powerful director's guild because the directors are the grown-ups in the the room the directors are going to have none of this so it means it will have it will affect what you see on television or in the movies precisely zero there'll be zero effect it will affect a lot of people as all of these labor things tend to do uh hurts people in the middle people at the top are going to be fine people just starting out will thank larry for you know, for putting off his lunch.

The general moment in Hollywood where the writers were controlling and powerful and ran things that were happening on television, which is mostly what Hollywood is these days, that those days seem to be imperiled and imperiled in a magnificently ironic way by the writers themselves. Rob, I find no one in that story for whom to feel sorry. Me. Of course, of course, because you paid too much in taxes. But also because I'm against this, and I don't know what – I'm hamstrung in a lot of ways, but there are ways out. As long as it doesn't impinge the production of my favorite news show, Lawyer Hospital, which is where you have lawyer doctors who actually perform operations. They're very delicate touch-and-go operations in a courtroom while they're interrogating the people.

It's fascinating. And then they sue themselves for malpractice. They do. You know their problem? Their problem is they care too much. They do, but there's a streetwise cardiologist who's been through it all and is willing to go to the end for his clients in this case here. He'll throw the rulebook right out the window. As a matter of fact, it's one of the funniest parts of the opening segment is when they open up the window and throw the rulebook out.

It's a wonderful show. Lawyer Hospital. Don't miss it. And we thank Ancestry.com, DoorDash, and LendingClub. Support them. Many support us and vice versa. If you enjoyed the show also, go to iTunes. Wouldn't kill you to leave a review.

Really wouldn't. And, of course, we even went without the member pitch this week because I think it goes without saying Rob wants you to join, right? Yeah, and I think I sort of tried to fit it in there. Incredible, incredibly – They're already gone people have stopped listening the minute i'm still gonna say it incredibly let me just credibly fortuitous moment we have these great relationships with people in government in policy in business and we managed to get one of our old friends larry kudlow who is the architect of what is what what is in fact a booming economy and a very successful presidential administration in economic terms. And he ably defends it and is an enthusiastic cheerleader for growth and capitalism.

And you heard it here, uninterrupted, unfettered. You know more now by listening to it. So if you are on the fence here or if you've decided to join and you've just been putting it off, we really need you to join because we want to bring you more stuff like that. Couldn't have said it better.

And we'll see everybody at Ricochet 4.0. That's right, not 3.0. What's the difference? You got to go and find out. We'll see you there. Next week, guys. By the way, I could have said it better, but then I would have had to fire my agent. Next week, boys.

Once I had a pretty girl. Her name, it doesn't matter. She went away with another guy. Now he won't even look at her Hats off to Larry He broke your heart Just like you broke mine When you said we was part He told you lies

Now it's your turn to cry, cry, cry Now that Larry said goodbye to you lies now it's your turn to cry cry cry now that Larry said goodbye to you I know this may sound strange

I want you back I think you'll change but there's one more thing I gotta

say hats off to Larry it may sound cruel But you laughed at me When you said we were through You told me lies Now it's your turn to cry

Now that Larry said goodbye to you Hats off to Larry It may sound cruel But you laughed at me When you said we were through You told me lies So it's your turn to cry, cry, cry Now that Larry said goodbye to you To you

To you To you Ricochet! Join the conversation.