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

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/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  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.

• 0:44Anthony Pompliano?

  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.

• 1:02Speaker 01

  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 strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:25Anthony Pompliano?

  Today's episode is brought to you by Reed Smith. Their practice of law has the power to drive progress, to move businesses forward, and support them in achieving their goals. By seizing opportunities and overcoming obstacles, Reed Smith is focused on outcomes. I personally use them as my law firm and I think that they are fantastic. They know that your time is valuable and that your matters are important. Their deep industry knowledge, longstanding relationships, and collaborative structure make them the go-to partner for complex disputes, transactions, and regulatory matters. Reed Smith delivers purposeful, highly engaged client service that drives progress for your business. Go to reedsmith.com to learn more about the best lawyers in the game. ReedSmith.com. Go check them out today.

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• 4:15Anthony Pompliano?

  All right, Zach, I got my notes. You got your notes. Hopefully we don't have to 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 unless if we agree or disagree. 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 then there's like this other group of people. They call them like the working class. And the economy has failed them. They're falling behind. They're in debt. They don't have assets. The middle class has been hollowed out. You know, all the talking points that you hear them regurgitate over and over. Like, do you buy that? Or do you think that that's like an oversimplification?

• 4:59Speaker 03

  I think it's wrong.

• 5:00Anthony Pompliano?

  Okay.

• 5:00Speaker 03

  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, you know, 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.

• 5:43Speaker 03

  Now, that doesn't mean that people still aren't, aren't struggling. But at the end of the day, this idea that we've hollowed out our middle class is just, 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, to, to costs, right? So if you make a hundred thousand dollars a year, I mean, we have, we have plumbers in America, just to kind of give it some, 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.

• 6:25Speaker 03

  Now, you don't feel rich, I think for two reasons and we can debate why. One, I think it's simply they 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, in their, in their lifestyle. That, that, that's number one. Two, and we don't talk about like the rise of Tik Tok and social media. Uh, cause I hate it, but like, I do think there's a perception of lack of wealth.

• 7:08Speaker 03

  Because you see so much fake shit on the internet, like.

• 7:12Anthony Pompliano?

  If you go on, everyone's on a vacation 24/7, you feel like, holy shit, why can't I do that?

• 7:15Speaker 03

  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, of the Instagram post. And I think it's really unfortunate. I don't have a good answer for, for, for how you solve that.

• 7:31Anthony Pompliano?

  So here's my question on this. Um, do the facts matter or do the feelings matter? And recently, um, Besen 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. 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. 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?

• 7:58Speaker 03

  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 the way you grow pie 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.

• 8:40Anthony Pompliano?

  Careful, you're starting to sound like a Republican right now.

• 8:42Speaker 03

  Well, I, this is what I was gonna go with because like.

• 8:45Anthony Pompliano?

  They swapped.

• 8:46Speaker 03

  We used to have debates. I, because nobody watches this shit anymore. So nobody else, 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?

• 8:58Anthony Pompliano?

  A hundred percent.

• 8:58Speaker 03

  It was fucking amazing. And that was the, 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, 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, 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, in places and very publicly. And there was no loud, moderate voice.

• 9:42Speaker 03

  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 and what Sanders are doing, or Sanders wants to do very similar things. So, um, that definitely turned me off to like the current version of.

• 9:56Anthony Pompliano?

  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, 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.

• 10:28Speaker 03

  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 right's now moved populist. They're both anti-business in these weird ways.

• 11:13Speaker 03

  They're both like anti-growth, or at least have been. So I was a Democrat. I view myself much more as a like, as an independent.

• 11:21Anthony Pompliano?

  Which I think is the trend across demographics is like many, many more people feel, I call it like 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.

• 11:33Speaker 03

  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. But yeah, I don't, I was a Dem and I don't identify necessarily as one today.

• 12:09Anthony Pompliano?

  All right. So let's get back to the best conversation. So the all in guys, they ask him, 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.

• 12:21Speaker 03

  True.

• 12:22Anthony Pompliano?

  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.

• 12:35Speaker 03

  Yeah.

• 12:36Anthony Pompliano?

  And so that was the first thing where he was like, hey, the people are telling us something.

• 12:39Speaker 03

  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.

• 12:48Speaker 03

  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. 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 in growth that they had.

• 13:23Anthony Pompliano?

  Yeah, wages haven't kept up with the inflation.

• 13:25Speaker 03

  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 $4. Like the basics are actually really, really cheap. Housing and healthcare. Like we talk about all goods and all, none of the shit matters. Housing and healthcare. 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 out by housing and healthcare, both indirectly and directly? Cause you pay for your healthcare through lower wages in America, probably 70%. And that number will vary.

• 13:58Anthony Pompliano?

  So both of those sectors are highly regulated, government very involved, which I think that if, again, you listen to Besen, which I, I focus on Besen because I feel like Besen has, in a weird way, he is the, he's the glue here between like the private business, Wall Street, and then the like political views of the White House. He talks a lot about like deleveraging the public market or the public sector and releveraging 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 type business, which if, 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

• 14:43Anthony Pompliano?

  a housing sector and deregulate and push that more into the private hands, that should lead to lower housing. Healthcare, same thing.

• 14:50Speaker 03

  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 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.

• 15:17Anthony Pompliano?

  I say all the time, city councils are one of the most dangerous groups in all of America.

• 15:20Speaker 03

  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 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.

• 15:52Anthony Pompliano?

  So if you had a pinpoint, which sounds like we might agree on this. If you had a 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.

• 16:08Speaker 03

  Remove the 35 different ways local governments block developers from building housing.

• 16:15Anthony Pompliano?

  Yeah. So deregulate.

• 16:16Speaker 03

  Deregulate. Absolutely.

• 16:17Anthony Pompliano?

  All right. You sound like Republican. Keep going.

• 16:18Speaker 03

  I sound like an older Republican. I sound like an older Republican. And like, give me those Republicans. Bring me back, Mitt Romney. Give me the binders full of women. Like, I want that Republican.

• 16:27Anthony Pompliano?

  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 then I started thinking about like all these things that I'm like, wait, it's a moving target. Like it was Democrat, then it's 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 okay.

• 16:57Speaker 03

  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. Yeah, well, I think you're seeing like local democratic leaders, especially in major cities, and 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.

• 17:40Speaker 03

  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, there's, there's less demand on the, 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, 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, in housing. And that's a real problem. Now, I, 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

• 18:23Speaker 03

  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, in, in housing is capitalism is not being allowed to thrive. And, 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 Besen 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. Yeah, I think it's 25%. It's 20. 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,

• 19:03Speaker 03

  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. 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 it to you after. But the federal workforce as a percentage of the total workforce has actually gone down. So, so.

• 19:28Anthony Pompliano?

  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, what is the percentage of Americans getting jobs?

• 19:40Speaker 03

  We have 4% unemployment.

• 19:41Anthony Pompliano?

  Well, I'll say it, but we'll get to the data in a second. 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 their, 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.

• 20:11Speaker 03

  No, no.

• 20:12Anthony Pompliano?

  Well, of course it is.

• 20:13Speaker 03

  I mean, it's like, yes, in the sense that the US government doesn't hire illegal workers, but that is not the problem. Like you still have 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, like 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, great, very good.

• 20:56Speaker 03

  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.

• 21:09Anthony Pompliano?

  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, you know, I did everything I was supposed to do, I followed the law. Why is somebody else just walking across the border?

• 21:22Speaker 03

  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. Like clearly the pie can grow. And so growth of the pie is the single most important thing in America. All right. 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. Your housing costs are up. We can talk about healthcare costs.

• 22:06Speaker 03

  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. I totally agree. And, and so I'm not, 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. It would, for me, it's, 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.

• 22:50Speaker 03

  That was, that was all 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 in terms of statistics. Like there was a Trump administration official. I don't think it was Besen. It was probably Retardo. What do they call him now? Peter Retardo? 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, he's lying to your face and, and, and I think.

• 23:34Speaker 03

  It makes sense to me why people believe this stuff because you wouldn't believe that some official would get the 75% number inverted and he did, he got the wrong number.

• 23:41Anthony Pompliano?

  All right. So let's say, let's just say that

• 23:42Speaker 03

  This happens over and over and over again.

• 23:45Anthony Pompliano?

  Here's Besen in that same interview with the all in guys. This to me was the most shocking. I actually thought that we would have a market sell off because of what he said here. Chamath Palpatia says to Besen, he says, uh,

• 23:58Speaker 03

  Smart.

• 23:59Anthony Pompliano?

  GDP, job growth, inflation, you know, he lists a couple of metrics. He goes, do you believe them? And the first word out of Scott Besen'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

• 24:32Speaker 03

  No, he's not saying we know the data is inaccurate. He's saying, uh, I think maybe, by the way, which data? And why is it inaccurate?

• 24:39Anthony Pompliano?

  So here's how inaccurate.

• 24:42Anthony Pompliano?

  This, here's a good example, the job growth data.

• 24:43Speaker 03

  Sure.

• 24:44Anthony Pompliano?

  Right. There's this big revision and again,

• 24:46Speaker 03

  Well, they revised, by the way, they revised, revising job growth data is how it works.

• 24:51Anthony Pompliano?

  No, of course, but here's my thing.

• 24:52Speaker 03

  Constantly revising.

• 24:53Anthony Pompliano?

  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.

• 25:00Speaker 03

  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 lacks. The data lacks because you hire people, you have to report the data to the 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 healthcare 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.

• 25:25Anthony Pompliano?

  You do it better. Yes, I could probably, I mean,

• 25:28Speaker 03

  Right.

• 25:29Anthony Pompliano?

  But this is the point, but this is the point.

• 25:30Speaker 03

  You know.

• 25:31Anthony Pompliano?

  They never undercount. It's always they over.

• 25:33Speaker 03

  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.

• 25:48Anthony Pompliano?

  But when they, when they, well, we'll get to unemployment in a second, but when they revised it down, I think that, I can't remember the exact number.

• 25:54Speaker 03

  What is it? They revised one month down like?

• 25:55Anthony Pompliano?

  No, no, no, it was like the last year 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 very public about the fact that I think that the trueflation 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 trueflation number was higher than the government number. Two months later, the government number goes up. Now the trueflation number has crashed, you know, 50% in the last three months.

• 26:32Speaker 03

  Well, yeah.

• 26:32Anthony Pompliano?

  And we expect to see the CPI number to come down.

• 26:34Speaker 03

  I mean, rip money out of the economy.

• 26:36Anthony Pompliano?

  Of course.

• 26:36Speaker 03

  Rates went up, but it comes down.

• 26:37Anthony Pompliano?

  But my point is that regardless of what Besen was saying, like, I actually think that saying the data is not accurate is probably an accurate statement.

• 26:45Speaker 03

  It's not though. It's like, it's like saying, I don't have a great analogy for this, but like, 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 of triangulate across all of them. Cause 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. Have you ever watched that like horrible show on FX? Anyway.

• 27:28Speaker 03

  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,

• 27:47Anthony Pompliano?

  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, here's, 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, we know what the discrepancies are, we know what the inaccuracies are, we know it lags. Like, he caught out all the problems, right? But he's like, but we all have agreed that we're going to use this method.

• 28:11Speaker 03

  All right, let's talk about inflation, because, you know, on the one, like, inflation data is complex because it's, you have to, the United States government does chain weighted inflation. And like, we don't have enough.

• 28:23Anthony Pompliano?

  But they made that complex.

• 28:24Speaker 03

  Yes, I agree. I will, you know, you ask economists to do something, they're gonna make it complicated.

• 28:29Speaker 03

  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 $20,000. And now, that, like, let's call it the Honda Accord, was $20,000. And now the Honda Accord is $30,000. And right now, it's actually probably close to like $40,000. And we should talk about why. 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.

• 29:13Anthony Pompliano?

  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 it's fallen to the level where now you can put it in the car?

• 29:30Speaker 03

  Most of those things didn't exist when we made the car 20 years ago.

• 29:33Anthony Pompliano?

  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.

• 29:46Speaker 03

  I mean, if that were true, people would be buying, we would be seeing like rich people buy used cars up the wazoo.

• 29:51Anthony Pompliano?

  Well, they do.

• 29:52Speaker 03

  No, they don't.

• 29:52Anthony Pompliano?

  They, no, they drive, they drive, it's like a, it's a flex to buy a car from the 50s, 60s, 70s.

• 29:58Speaker 03

  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 that doesn't have air conditioning? It's insane. Like, like.

• 30:08Anthony Pompliano?

  Well, if it still runs 50 years later or 70 years later.

• 30:10Speaker 03

  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 in the world. But yeah, yeah, but like that is 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. Quality has gone 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? Cause 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 may be 20 bucks.

• 30:55Speaker 03

  Now an iPhone's like a thousand, but that is not the same phone. So they do this weird thing.

• 30:58Anthony Pompliano?

  But why did Teslas get better and go down in price then?

• 31:02Speaker 03

  Because they got better manufacturing. They got better manufacturing, like they just get, they get better at it.

• 31:06Anthony Pompliano?

  So why, why can't Ford do it?

• 31:08Speaker 03

  Well, I think they can. I absolutely think they can.

• 31:10Anthony Pompliano?

  So why are car prices going up?

• 31:11Speaker 03

  Because we've regulated the fuck out of them. That's why.

• 31:14Anthony Pompliano?

  And Tesla has the same regulation.

• 31:16Speaker 03

  I get it. Tesla prices are expensive. Teslas are expensive cars, like the Model Y entry.

• 31:20Anthony Pompliano?

  No, you, you can lease a car now for like 200 bucks a month.

• 31:22Speaker 03

  No, you can't. Absolutely not. And the, you want me to look it up?

• 31:25Anthony Pompliano?

  Yeah. Model, Model Y, uh, monthly lease, no monthly lease right now.

• 31:29Speaker 03

  Well, that's a financing thing. Let's talk about the actual purchase price of the car. Okay. The entry level price for a 2026 Tesla Model Y is $48,000.

• 31:37Anthony Pompliano?

  That is like a steal for the, a car that drives itself?

• 31:39Speaker 03

  Okay, I'm just saying it's a $48,000 car and it doesn't drive itself well. Like maybe on the highway for 20 minutes. I agree, it's a cool thing to have, but it is not a cheap 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.

• 32:04Anthony Pompliano?

  Well, Tesla is the most efficient.

• 32:05Speaker 03

  It is. Well, it is because it's electric, right?

• 32:07Anthony Pompliano?

  Of course.

• 32:07Speaker 03

  But electric cars are more expensive because the battery is really expensive.

• 32:09Anthony Pompliano?

  What is a Toyota Camry right now? Like you said 40, I actually think it's cheaper than 40, but let's see. Yeah. Just generally.

• 32:17Speaker 03

  Let's see.

• 32:19Speaker 03

  About 29,000 bucks.

• 32:20Anthony Pompliano?

  Okay.

• 32:21Speaker 03

  Which is a Japanese car. But it also doesn't have all the cool electric stuff and it's self-driving and all that. So it's like a DC, you know, that used to be.

• 32:26Anthony Pompliano?

  So call it 30 to 48,000 is the comparison.

• 32:29Speaker 03

  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, 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 on 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 like maybe that 1950s car. Nobody is. So.

• 33:10Speaker 03

  Car prices have gone up. All this going back to, I understand we have inflation. I'm not trying to poo poo it.

• 33:16Anthony Pompliano?

  Do you believe the CPI number?

• 33:18Speaker 03

  Directionally. I couldn't tell is three.

• 33:20Anthony Pompliano?

  But that sounds like, no, no, that's no.

• 33:22Speaker 03

  It depends on what you mean, but like, what's the accuracy we're focused on?

• 33:25Anthony Pompliano?

  Like you see why Besson now is like, I don't believe the data.

• 33:27Speaker 03

  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 pumped a fuck ton of money.

• 33:34Anthony Pompliano?

  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%.

• 33:41Speaker 03

  On CPI.

• 33:41Anthony Pompliano?

  On CPI, right? The government metric. Trueflation showed over three, so it was higher.

• 33:47Speaker 03

  Sure.

• 33:48Anthony Pompliano?

  From December to today, we've seen the trueflation, the alternative number go from over 3% to now under 1.5. So it's crashed 50%.

• 33:56Speaker 03

  Yeah, I mean, we raised rates.

• 33:58Anthony Pompliano?

  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 trueflation number has gone down.

• 34:07Speaker 03

  I don't know what's in this trueflation. I can make a metric up too and tell you it goes up and down. So like, I don't know what's actually in that number.

• 34:12Anthony Pompliano?

  But if I just say, do you think since December inflation went up or down, you probably would say down?

• 34:16Speaker 03

  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.

• 34:56Anthony Pompliano?

  Both parties.

• 34:57Speaker 03

  Both parties, both parties do this. Yeah. And 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 insane.

• 35:11Anthony Pompliano?

  Do both sides lie?

• 35:13Speaker 03

  Oh, of course, of course. I think the, I think the Dems, I think the Dems lie without knowing.

• 35:20Anthony Pompliano?

  No, come on.

• 35:22Speaker 03

  I think they say, I think they believe, I mean, I know a lot of like liberal Dems and like they believe this shit.

• 35:27Anthony Pompliano?

  I know you can't offend your friends, but come on, they, they go on and they mislead, they've mislead on. 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 that like the, during the Biden administration, it's like Peter Doocy would ask something and the woman would say all kinds of crazy shit. People 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 is asking some question and they'll kind of.

• 35:53Speaker 03

  What's the data? Yeah, we should call them all on their bullshit. All right. 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 about, 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, 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. The new podcast is now called The Independence. Yeah, I think it should be called Everybody Sucks. And like, can we put smart people back in

• 36:36Speaker 03

  charge? You know, grow the pie, grow the pie. I have this vision in my head, which I'm never gonna do, 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 like, eventually that works, but I don't know, no one's gonna vote for me. Anywho, just, just, just to inflation, like, 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, you know, this insanity over the last few weeks. So let's just go back to, because I want to talk about tariffs for two seconds, because I just think like. Are they deflationary?

• 37:18Speaker 03

  It depends on how big of a tariff. Okay, all right, there we go. It depends on. Making progress. Yeah, I mean, by the way, deflation is like not, we don't want deflationary things in America. Yeah, we want moderation. We don't want inflation, like high inflation, and we don't want deflation either. You want GDP, you want, it's very simple. It's very simple. You want real GDP growth. 3%. To be 2% to 3%. And for folks who don't necessarily understand, you want GDP growth above inflation. Right? Like, if you can grow GDP faster than 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. We had that for like 20 years, things were growing. We had this little really horrible blip where inflation outpaced

• 38:00Speaker 03

  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.

• 38:22Speaker 03

  We, 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 went 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 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, it was a terrible idea.

• 38:51Anthony Pompliano?

  Okay.

• 38:52Speaker 03

  Why doesn't, why?

• 38:53Anthony Pompliano?

  Hold on, before we get to.

• 38:54Speaker 03

  I have an example I'm gonna bring you.

• 38:56Anthony Pompliano?

  Yeah, I know, trust me, I know you were.

• 38:58Speaker 03

  I like wrote it down.

• 38:58Anthony Pompliano?

  I know, I know you're studying for this because you know that I'm right, but all right. So, uh, do we agree that American consumerism were like the best in the world at doing that? And we are not good at producing things in the sense of shoes, 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 is 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?

• 39:29Speaker 03

  No.

• 39:30Anthony Pompliano?

  No.

• 39:30Speaker 03

  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.

• 39:47Anthony Pompliano?

  But do you think, but here's my.

• 39:48Speaker 03

  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, man, we don't manufacture shit. He's wrong.

• 39:54Anthony Pompliano?

  Oh, we definitely manufacture.

• 39:55Speaker 03

  We manufacture lots of shit. Now we manufacture.

• 39:57Anthony Pompliano?

  Are you gonna pull up my tweet from yesterday where I said what we manufacture?

• 40:00Speaker 03

  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.

• 40:14Anthony Pompliano?

  Yep.

• 40:14Speaker 03

  And what we've decided.

• 40:16Anthony Pompliano?

  Airplanes, weaponry.

• 40:17Speaker 03

  Absolutely.

• 40:18Anthony Pompliano?

  Homes, all that kind of.

• 40:19Speaker 03

  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.

• 40:28Anthony Pompliano?

  Yep.

• 40:28Speaker 03

  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. It's in the fucking label, designed in California, right? Like we do this stuff. What we've done is

• 41:12Speaker 03

  we've just taken the like lower quality, lower paying stuff and we've 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 healthcare, 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 I think the quality of life from a cost perspective has actually declined significantly over the last 15 years.

• 41:55Speaker 03

  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 it's like saying I have this hundred dollars 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 Hold on. What 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 dollars, not $1, obviously, but like the amount of stuff you can get has gone up.

• 42:27Anthony Pompliano?

  In what time period?

• 42:29Speaker 03

  Over the last 30 years because we've done, absolutely.

• 42:31Anthony Pompliano?

  The dollar's been devalued by 26% over the last five years.

• 42:34Speaker 03

  The dollar's the strongest it's ever been and you, we.

• 42:36Anthony Pompliano?

  That's not relative comparison, but that's not against goods.

• 42:39Speaker 03

  You measure currency relative to other currencies.

• 42:41Anthony Pompliano?

  They don't, they don't.

• 42:42Speaker 03

  Okay, yes, like, how in the world am I gonna get a $4 hat 30 years ago? Like, this stuff didn't exist.

• 42:50Anthony Pompliano?

  Of course it did. No, no, hold on 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.

• 42:58Speaker 03

  Okay, $1913.

• 42:59Anthony Pompliano?

  Okay.

• 42:59Speaker 03

  Inflation adjusted is probably, what, $3, $4 bucks now, $5 bucks now? Like, that's not a comparison. It's like apples and oranges.

• 43:05Anthony Pompliano?

  No, you, inflation, you're talking that the purchasing power of the dollar went down.

• 43:09Speaker 03

  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.

• 43:17Anthony Pompliano?

  No, no, hold on a second. Hold on a second. But inflation adjusted is the, is literally the equivalent of losing purchasing power. You're trying, you're trying to normalize it, but if $1, if my purchasing power went up at any point over, let's say, a five-year or 10-year period, at 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.

• 43:36Speaker 03

  Yes, you can. And, and yes, absolutely you can. Now, there are some goods that you can't because those goods are regulated. Housing, education, healthcare, right?

• 43:44Anthony Pompliano?

  Food.

• 43:45Speaker 03

  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 land of like 1970 abundance. It was not true.

• 43:57Anthony Pompliano?

  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.

• 44:03Speaker 03

  I can get a cashmere sweater from Quince, coming from Asia, I don't know if it's Vietnam or whatever, for $60. Okay? $60 for a cashmere sweater. That is an ultra, ultra luxury good in 1970, 1980s, probably hundreds of.

• 44:16Anthony Pompliano?

  But it was less than $60. No way.

• 44:18Speaker 03

  Cashmere, real cashmere, absolutely not.

• 44:20Anthony Pompliano?

  Of course it was less than.

• 44:21Speaker 03

  No, this is the kind of stuff you had to have millions of dollars to buy. Like, this stuff is available. Here's, here's my, my favorite example. Do you know what phone Jeff Bezos has?

• 44:30Speaker 03

  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 wifi and streaming. It's like 150 bucks.

• 44:50Anthony Pompliano?

  No, no, but, but you're, 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.

• 44:57Speaker 03

  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 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, you ever seen the, the, the, 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.

• 45:42Anthony Pompliano?

  I, uh, you got your computer. So now I got my phone. Uh, I asked Croc, 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 two and a half to 3%.

• 46:11Speaker 03

  And the US economy grew faster than that. Like if you took that dollar, 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 US economy. Right. Like even just in, in stocks, let's call it.

• 46:26Anthony Pompliano?

  But that's not purchasing power of the dollar.

• 46:29Speaker 03

  The growth of your dollar from 1980 to today is

• 46:33Anthony Pompliano?

  Went down.

• 46:33Speaker 03

  Obviously, if you just stick a fucking dollar under your bed, you're not going to be able to

• 46:36Anthony Pompliano?

  That's purchasing power.

• 46:38Speaker 03

  Because you take your dollars and you invest them and they grow. This is like people's incomes go up.

• 46:42Anthony Pompliano?

  But in 1980, only like 30% of Americans did that.

• 46:44Speaker 03

  Dude, the pie grows, your income goes up. It's not an individual dollar. You get more dollars.

• 46:49Anthony Pompliano?

  But your wages didn't keep up with the rise of the price of the goods around you.

• 46:53Speaker 03

  They absolutely have. And American wages have grown faster than inflation.

• 46:56Anthony Pompliano?

  But I think everyone agrees, other than maybe you, that your wages keep up with the price of increase of goods.

• 47:01Speaker 03

  American wages.

• 47:02Anthony Pompliano?

  That's why people keep feel like they're falling behind.

• 47:04Speaker 03

  American, well, okay. American wages have grown faster than inflation. Two, part of the problem is in American wages are deflate, they're decreased by rising healthcare 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.

• 47:29Anthony Pompliano?

  But hold on.

• 47:30Speaker 03

  That's the quality of the stuff you're buying.

• 47:32Anthony Pompliano?

  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.

• 47:43Speaker 03

  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, or probably instead of global murders, we're like in New York or the United States murders were near. This was not a nice place to be. Like, the US was not better in 1980. Absolutely not. Like, maybe the glam shots that we see in the magazines 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.

• 48:26Speaker 03

  But that's because we regulate the fuck out of them. We regulate housing, we regulate healthcare, we regulate education.

• 48:31Anthony Pompliano?

  All right, let's talk tariffs.

• 48:32Speaker 03

  Okay. I want to go through my, my, my.

• 48:34Anthony Pompliano?

  Use your example.

• 48:35Speaker 03

  Okay, so.

• 48:37Anthony Pompliano?

  He brought a prop.

• 48:38Speaker 03

  I brought a prop.

• 48:39Anthony Pompliano?

  Is that a, do you not bring a MAGA hat?

• 48:41Speaker 03

  I did, I brought a MAGA hat. I figured like, alright, if anyone can like, think of, you know, like, well, is that what I had?

• 48:47Anthony Pompliano?

  Is it signed?

• 48:47Speaker 03

  It's signed by Dom Trump.

• 48:49Anthony Pompliano?

  Is this your hat?

• 48:50Speaker 03

  Yeah, it's real hat.

• 48:51Anthony Pompliano?

  Where, where did you get this?

• 48:52Speaker 03

  It's a collector's item.

• 48:53Anthony Pompliano?

  Oh, you like bought it?

• 48:54Speaker 03

  My, my old co-founder gave it to me as a joke and I was like, oh, this is a cool thing and uh,

• 48:58Anthony Pompliano?

  Was it like in your office?

• 49:00Speaker 03

  Yeah, I keep it in my closet.

• 49:01Anthony Pompliano?

  Oh, in the closet. So you're like, you don't, you can't keep it out because your friends come over.

• 49:04Speaker 03

  Yeah, no, I just wear it by myself and I look at myself and I get in the mirror.

• 49:07Anthony Pompliano?

  You ever heard of Andrew Schultz's bit about, uh, that's, uh, white people's teardrop tattoo? He's like, he's like, it's the last thing you put on before you go out of your house.

• 49:16Speaker 03

  I pull, 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.

• 49:24Anthony Pompliano?

  So explain your hat.

• 49:25Speaker 03

  Public, public drugs is like, one's like below, you know, wearing a make of a great hat.

• 49:30Anthony Pompliano?

  Now, come on, it is true though. If you see someone walking down the street with it, everyone's just like, damn, that person's really don't give a fuck.

• 49:35Speaker 03

  I, no, 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. 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,

• 49:52Anthony Pompliano?

  With Trump's name on it is probably a little bit more.

• 49:54Speaker 03

  Okay. We can buy this hat online because it's made in like Vietnam or whatever for about,

• 50:00Anthony Pompliano?

  Look at the tag. Is it made in Vietnam or?

• 50:02Speaker 03

  It's a Trump hat. I'm sure he lied about where it's made. I don't care, you know? He'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.

• 50:19Anthony Pompliano?

  Okay.

• 50:20Speaker 03

  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, 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.

• 51:06Speaker 03

  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 from 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 is 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.

• 51:50Speaker 03

  That is 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.

• 52:04Anthony Pompliano?

  But, but I think a key piece to it is why is it $5 if America can only make it for 10? Sometimes.

• 52:12Speaker 03

  Because their labor costs are cheaper.

• 52:13Anthony Pompliano?

  No, that is one potential thing for sure is the labor cost.

• 52:16Speaker 03

  Yes.

• 52:16Anthony Pompliano?

  But in other product scenarios, it is because a foreign government is subsidizing the producer.

• 52:21Speaker 03

  Yes.

• 52:22Anthony Pompliano?

  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 $5. If it's labor, I think that's one example.

• 52:31Speaker 03

  I understand.

• 52:32Anthony Pompliano?

  But if they're subsidizing producers or something, it's a whole different ballgame.

• 52:35Speaker 03

  Totally. And I'm going to, 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 subsidization.

• 53:02Anthony Pompliano?

  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.

• 53:06Speaker 03

  It's really China, but like.

• 53:07Anthony Pompliano?

  It's really China, but like. Canada does this with their lumber and there's a huge reason why the American lumber producers where 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 producer.

• 53:26Speaker 03

  And to be clear, we tax that lumber, right? The Americans tax, no, no, no, we've done this for, 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.

• 53:36Anthony Pompliano?

  And you like that idea?

• 53:37Speaker 03

  If, if we can, 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, they're 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, rare.

• 54:10Anthony Pompliano?

  What number do you think it is?

• 54:11Speaker 03

  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.

• 54:21Anthony Pompliano?

  So I think one big disagreement 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 there's subsidizations, currency manipulations, all that stuff, they'd think the number's way higher than you think it is.

• 54:35Speaker 03

  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. We thought for a while that the earth was flat, like, for hundreds of years.

• 54:49Anthony Pompliano?

  And now people think that only 1% of goods are subsidized.

• 54:52Speaker 03

  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 illegal subsidization of industries should not be allowed.

• 55:08Anthony Pompliano?

  But like You agree with the other thing, the currency manipulations and the other like unfair trade practices that are falling under this whole, uh?

• 55:15Speaker 03

  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, China's doing the other thing right now, which is a whole longer conversation.

• 55:25Anthony Pompliano?

  But in 2018 in response.

• 55:26Speaker 03

  They were for a while and then they flipped.

• 55:28Anthony Pompliano?

  Okay.

• 55:28Speaker 03

  Um, if they're 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.

• 55:45Anthony Pompliano?

  He did that in 2018. He went surgical. Now he's going blanket.

• 55:49Speaker 03

  Yeah, I mean, and even

• 55:50Anthony Pompliano?

  Is that, is that a fair way to describe?

• 55:51Speaker 03

  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 we

• 55:58Anthony Pompliano?

  Washing machine, solar panels.

• 55:59Speaker 03

  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

• 56:18Anthony Pompliano?

  From the consumer's perspective, but from a manufacturing perspective.

• 56:21Speaker 03

  Why do we want to make solar panels? Well, it's like a low paying job. Making solar panels is not like a great business. Tiny margin, massive competition. Like, why do we want to

• 56:29Anthony Pompliano?

  Then why does China, then why does China do it?

• 56:30Speaker 03

  Because they figured if they could make them, they have some industry because everybody else is unemployed. Because they're poor. They're poor.

• 56:36Anthony Pompliano?

  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.

• 56:44Speaker 03

  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 money. 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 than

• 57:06Anthony Pompliano?

  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?

• 57:13Speaker 03

  It's a subsidized market by the Chinese government, which is subsidized by the Chinese people. Okay. Taxes and other, and other revenue

• 57:19Anthony Pompliano?

  So do you, so do you subscribe to the idea that if the tariffs were able to get us back to a no tariff world?

• 57:24Speaker 03

  Yes.

• 57:24Anthony Pompliano?

  With free trade agreements in place that actually are followed?

• 57:27Speaker 03

  100%.

• 57:28Anthony Pompliano?

  You like that?

• 57:28Speaker 03

  Tariffs are not A tool to be kept on tariffs are a tool to get more free trade.

• 57:36Anthony Pompliano?

  Okay.

• 57:36Speaker 03

  If 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.

• 57:41Anthony Pompliano?

  But do you think that I actually think Trump in a weird way agrees with what you just said?

• 57:47Speaker 03

  No, he doesn't. No, he doesn't because he's talking about keeping that he's talking about bringing manufacturing back. And if you're.

• 57:53Anthony Pompliano?

  But that's part, but I think that's part of the free trade.

• 57:55Speaker 03

  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.

• 58:11Anthony Pompliano?

  I think that we could. Here's my general. We can, we can manufacture this hat better than the Vietnam can.

• 58:18Speaker 03

  No way. Maybe, well, better is the problem is the key word there is better, like quality wise.

• 58:23Anthony Pompliano?

  Quality plus price.

• 58:25Speaker 03

  No, because if we could, we would do it. Like.

• 58:28Anthony Pompliano?

  No, no, no, no.

• 58:29Speaker 03

  We would do it. It would happen.

• 58:30Anthony Pompliano?

  If, if, if there was free trade, we would do it.

• 58:34Speaker 03

  What, what are you talking about? The Vietnamese have, they have.

• 58:38Anthony Pompliano?

  Do you think a machine or a person made this?

• 58:40Speaker 03

  A combination of the two. It's absolutely free trade. And by the way.

• 58:44Anthony Pompliano?

  Well, it's not free trade because I think Thailand, I think in Cambodia, the two that I'm more familiar with. Uh, I think that their average tariffs against the US, it's some crazy, it's like 20 or 30%.

• 58:53Speaker 03

  It's like two or three percent, two or three percent. 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. Cause now we're flipping from importing to exporting and that's the problem. We'll go back to exporting. But on the exports, I mean, I'll touch it for one second. The average tariff on US exports of our free trade partners is less than 10%. India is a little bit higher. China is.

• 59:14Anthony Pompliano?

  India is way higher.

• 59:15Speaker 03

  It's 13 and, and there's a bunch of exceptions. Yes, it is. It is. And I pulled, I pulled all the numbers.

• 59:20Anthony Pompliano?

  It's 100% on cars.

• 59:22Speaker 03

  There are certain strategic industries where they are protectionist. Absolutely. And there is a reason why India is really shitty and 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 pouring 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, that is a fact. And the reason that works is because they are a developing nation. Their people do not make as much money.

• 1:00:04Speaker 03

  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

• 1:00:13Anthony Pompliano?

  I don't agree. I don't agree.

• 1:00:14Speaker 03

  Their alternatives would be unemployment. Okay, like the alternative is unemployment. That is not a good thing.

• 1:00:19Anthony Pompliano?

  But I think that, but you can make a very strong argument that actually globalization has hurt people in Vietnam.

• 1:00:26Speaker 03

  Do you remember what Vietnam was 20 years ago, 30 years ago? This is like 60% unemployment and people are living like, it's a farming nation 20, 30 years ago with mass unemployment. It was basically a

• 1:00:38Anthony Pompliano?

  There are some people, some people are definitely winning, but just like our country, globalization has definitely helped some and not helped others. For example,

• 1:00:43Speaker 03

  There is no argument that Vietnam is better 30 years ago than they are today. Absolutely not.

• 1:00:47Anthony Pompliano?

  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,

• 1:00:56Speaker 03

  No, no, just flat out wrong, flat out wrong. Employment is up, incomes are up, GDP is up, they have major

• 1:01:02Anthony Pompliano?

  But my whole point is that all of those numbers don't actually matter for the on the ground truth.

• 1:01:08Speaker 03

  Absolutely they do. That represents the mass of Vietnamese people.

• 1:01:12Anthony Pompliano?

  I'm talking America.

• 1:01:13Speaker 03

  Yeah, I'm talking about Vietnam because I think globalization is really, really good for a 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. $5 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 $5 price point. Because otherwise you don't need a tariff.

• 1:01:52Anthony Pompliano?

  Unless. There is unfair trade practice.

• 1:01:55Speaker 03

  There's not, there's 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.

• 1:02:04Anthony Pompliano?

  So what? 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.

• 1:02:11Speaker 03

  Cool, we get real cheap hats. Like, this is a great thing.

• 1:02:13Anthony Pompliano?

  But that would be by definition unfair trade practice.

• 1:02:15Speaker 03

  Sure, if the Chinese are like throwing a bunch of hidden money into this, like, and you could prove that, and we care, like, absolutely.

• 1:02:21Anthony Pompliano?

  Well, it's well known that they definitely are using Vietnam, Cambodia.

• 1:02:24Speaker 03

  Not for hats, Chinese don't want to make hats.

• 1:02:26Anthony Pompliano?

  I'm not saying specifically, but just like, they definitely are trying to get around. And I, from what I understand, the reason why they tariffed every single country in the world is to prevent them from being able to circumvent those tariffs.

• 1:02:34Speaker 03

  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 have that argument.

• 1:02:40Anthony Pompliano?

  If it puts our manufacturers out of business.

• 1:02:42Speaker 03

  We don't want to make this stuff. And here's, here's, here's, here's like the point.

• 1:02:46Anthony Pompliano?

  Do you think that people in middle of America would make that hat if they could make the numbers work?

• 1:02:50Speaker 03

  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.

• 1:02:57Anthony Pompliano?

  They make those in America.

• 1:02:59Speaker 03

  You, okay, hat. Fuck, I'm like so close. All right, we're 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 has 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, this like sequence is important, goes, oh, interesting, hat prices are 10, they are no longer 5. You know what I'm gonna do? I'm gonna start making hats for 9. It's not gonna make them for 5, because if I could make them for 5, I already would have done it. I'm gonna make them for 9, because there's your spread, right there, that $5, whatever,

• 1:03:44Speaker 03

  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 US company to make $9 hats. Three, even if this works and you get, by the way, it's like

• 1:04:29Speaker 03

  the lead time on this shit's gonna be like four or five years, you have a company making $9 hats and by definition, $9 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 export. You're only selling them to Americans.

• 1:05:12Speaker 03

  You're only, we're a big country, 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 in 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. They're not, this is not market forces and this is why it doesn't work. Plus, everybody pays more.

• 1:05:37Anthony Pompliano?

  But we did switch administrations and they left the tariffs on.

• 1:05:40Speaker 03

  They left some tariffs on strategically.

• 1:05:42Anthony Pompliano?

  And double, and doubled some.

• 1:05:43Speaker 03

  Yeah, like Chinese steel, because they're flooding the market with like cheap steel.

• 1:05:46Anthony Pompliano?

  You sound like a Republican.

• 1:05:48Speaker 03

  Yeah, no, like, I mean, we can go back.

• 1:05:50Anthony Pompliano?

  Solar panels?

• 1:05:51Speaker 03

  Solar panels.

• 1:05:52Anthony Pompliano?

  Steel.

• 1:05:53Speaker 03

  Dude, cheap solar panels are good. That's a good thing. Like, I get that people are 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?

• 1:06:27Anthony Pompliano?

  Well, I think that a huge piece of it is, uh, let's start with, there's 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.

• 1:06:40Speaker 03

  Sure. If you think like, we need to make our own bullets, I agree with you.

• 1:06:42Anthony Pompliano?

  Okay. So bullets, uh, also energy production.

• 1:06:45Speaker 03

  We have domestic energy.

• 1:06:47Anthony Pompliano?

  We have domestic energy, but if we want solar panels, pretty important, then.

• 1:06:52Speaker 03

  You want more expensive solar panels?

• 1:06:53Anthony Pompliano?

  No, not necessarily.

• 1:06:54Speaker 03

  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.

• 1:07:10Anthony Pompliano?

  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.

• 1:07:16Speaker 03

  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, I gotta put this head away. We are talking about.

• 1:07:30Anthony Pompliano?

  You just put it on your head.

• 1:07:31Speaker 03

  It looks really stupid. I'm like uncomfortable. I can hold it, but I can't.

• 1:07:34Anthony Pompliano?

  But like, if you put it on.

• 1:07:37Anthony Pompliano?

  That'll be the headline.

• 1:07:38Speaker 03

  I don't want a photo of this on my head. 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 1% of goods, right? We're talking about the edge case of the edge case. We're not talking about Trump.

• 1:07:58Anthony Pompliano?

  But go ahead.

• 1:07:58Speaker 03

  We're not, we're not talking about anything about Trump is doing. So like, sure, strategic, because they're, you know, subsidizing.

• 1:08:03Anthony Pompliano?

  But here's.

• 1:08:04Speaker 03

  This is not, hold on, hold on. Cheaper solar panels.

• 1:08:08Speaker 03

  Would you rather, as an American, not a rich American like us, but an average American?

• 1:08:13Anthony Pompliano?

  Speak for yourself.

• 1:08:15Speaker 03

  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 space later. 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, say, we get maybe like 20,000, 3,000 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, that is essentially the argument. You're saying we as Americans should pay more for solar panels because we want to make them.

• 1:08:56Anthony Pompliano?

  By reject the premise that we couldn't make it cheaper.

• 1:08:59Speaker 03

  If we could make it cheaper today, we would do it.

• 1:09:01Anthony Pompliano?

  If there was free trade, we probably could.

• 1:09:03Speaker 03

  Because the price would be higher.

• 1:09:05Anthony Pompliano?

  No.

• 1:09:05Speaker 03

  Because the price would be higher. Yes, you're arguing for subsidization by the Chinese government. And what is the outcome of subsidization?

• 1:09:10Anthony Pompliano?

  If there was free, if there was, if there was free trade.

• 1:09:12Speaker 03

  What does that mean?

• 1:09:13Anthony Pompliano?

  If they didn't subsidize, they didn't manipulate the currency, they didn't do anything to give their producers an advantage.

• 1:09:18Speaker 03

  If they didn't subsidize this one by one, if, if the Chinese didn't subsidize solar panels, what would happen to the price of Chinese manufactured solar panels?

• 1:09:27Anthony Pompliano?

  Well, the price of their solar panels would go up.

• 1:09:30Speaker 03

  Correct.

• 1:09:30Anthony Pompliano?

  But then.

• 1:09:31Speaker 03

  Which, which is we import.

• 1:09:33Anthony Pompliano?

  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.

• 1:09:41Speaker 03

  No, we would make night, we would make the more expensive solar panels.

• 1:09:43Anthony Pompliano?

  So then why in 2018, we put tariffs on those three products? All three products went down in price over the next 18 months.

• 1:09:48Speaker 03

  Because we have global economy, Chinese is not the only place that makes steel.

• 1:09:51Anthony Pompliano?

  No, no, but the US began producing more of those three products. I'll give you two examples.

• 1:09:55Speaker 03

  Yes, we pay more.

• 1:09:56Anthony Pompliano?

  Ah, I laid the trap, he walked right into it.

• 1:09:57Speaker 03

  We pay more, sorry.

• 1:09:58Anthony Pompliano?

  No, no, no, no, we didn't pay more, we didn't pay more. Hold on, let me give you a concrete example.

• 1:10:02Speaker 03

  Absolutely, you pay more by definition.

• 1:10:03Anthony Pompliano?

  No, no, let me explain. With steel, in 2018, we put tariffs on steel imported the United States.

• 1:10:10Speaker 03

  From which countries? I believe it was China, and there was a subsidization coming from Canada.

• 1:10:14Anthony Pompliano?

  But no.

• 1:10:15Speaker 03

  Which by the way, makes steel prices from those countries more expensive.

• 1:10:17Anthony Pompliano?

  Okay. And so guess what happened is that certain country or 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%. It'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.

• 1:10:47Speaker 03

  No, because then, because if that were true, if that were true, we would remove the tariffs and export.

• 1:10:52Anthony Pompliano?

  Hold on a second. Just wait till you get to the end.

• 1:10:55Speaker 03

  It's simply not true.

• 1:10:56Anthony Pompliano?

  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 South Korean companies that were the big makers of the washing 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 2,000 American jobs and the price of washing machines fell and by the end of 2019 was cheaper than they were pre tariff. On top of that.

• 1:11:18Speaker 03

  Just know, like, like, I know you're saying it, but 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 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.

• 1:11:47Anthony Pompliano?

  No, but I'm saying that you don't understand how tariffs work.

• 1:11:50Speaker 03

  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.

• 1:11:58Anthony Pompliano?

  So that's the price of solar panels?

• 1:11:59Speaker 03

  Yes, solar panels have gone down drastically because the Chinese have subsidized them.

• 1:12:02Anthony Pompliano?

  No, no, no, no. Even though we tariffed them 50%, they still went down.

• 1:12:05Speaker 03

  That's the global price, first of all. And the Chinese subsidize the shit out of these things. Okay. Right. They, why do you think the price goes down? Because the Chinese subsidize it.

• 1:12:12Anthony Pompliano?

  Do you see this right here? This is washing machines. You see when the tariffs were put in place, it spikes. Agreed, right? There's change of 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.

• 1:12:26Speaker 03

  At higher prices.

• 1:12:27Anthony Pompliano?

  No, the price ended up lower than pre tariff. Hold on. And then here's the steel price. Same thing happened here.

• 1:12:33Speaker 03

  Yes, commodities boom bust, my friend. Commodities boom bust. When the United States economy, when the United States.

• 1:12:39Anthony Pompliano?

  Every single product, every single product that we tariffed in 2018 by the end of 2019 was cheaper than before the tariff.

• 1:12:44Speaker 03

  Oh, my God, no. I, I, how much you want to bet? How much you want to bet? And by the way, just search 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.

• 1:12:54Anthony Pompliano?

  So we agree the data is not right.

• 1:12:55Speaker 03

  Sorry. I'm sure the data you looked at was probably coming from like Newsmax. But like, you know, when, when, when the, when the US economy shrinks, right? Like, first of all, commodity cycles are driven by supply and demand adjustments in the market.

• 1:13:09Anthony Pompliano?

  Agreed.

• 1:13:09Speaker 03

  And commodity cycles boom bust regardless of US manufacturing.

• 1:13:12Anthony Pompliano?

  Agreed.

• 1:13:12Speaker 03

  They, they, they really boom bust based on demand. Supply and obviously like, do we overproduce? So you over, demand goes up, we overproduce.

• 1:13:20Anthony Pompliano?

  But demand, demand for American made steel goes up when you put tariffs at higher prices.

• 1:13:26Speaker 03

  Yes, of course it does at higher prices. You've created an artificial market.

• 1:13:30Anthony Pompliano?

  No.

• 1:13:30Speaker 03

  By making them more expensive.

• 1:13:31Anthony Pompliano?

  Because if you increase, if you increase. If you increase demand, but also the domestic manufacturing goes up.

• 1:13:37Speaker 03

  It does. It goes up at higher prices.

• 1:13:40Anthony Pompliano?

  No, it doesn't.

• 1:13:40Speaker 03

  Yes, it does. Otherwise you don't need the tariff.

• 1:13:42Anthony Pompliano?

  That's not true. That's, this is the point, though, is that you still can have domestic manufacturing go up and do it at a cheaper price than what was previously being done. It's because it's a capacity component. If, if somebody is coming into the market and they're selling subsidized products into your market, right?

• 1:14:01Speaker 03

  We're not talking about subsidized product. I agree if you have subsidization.

• 1:14:04Anthony Pompliano?

  All of these products are subsidized. That's, that's the whole.

• 1:14:06Speaker 03

  Solar panels and yes, by China in a specific case.

• 1:14:09Anthony Pompliano?

  But I think that the argument, and again, I'm, I'm not trying to defend the administration in this, right? I just think, I, 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, it, it, let me actually do this. Here's what I think we should end up at. I think that we should end up with five 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 US market and we don't.

• 1:14:51Speaker 03

  Yeah, I get it. You want Americans to pay more for stuff. I understand that that is what your goal is.

• 1:14:56Anthony Pompliano?

  But they wouldn't pay more.

• 1:14:57Speaker 03

  They absolutely will pay more.

• 1:14:58Anthony Pompliano?

  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?

• 1:15:07Speaker 03

  Well, which Americans? Because if you.

• 1:15:10Anthony Pompliano?

  Anyone making under a hundred fifty thousand dollars a year.

• 1:15:12Speaker 03

  Okay, so.

• 1:15:13Anthony Pompliano?

  If they remove the federal income tax for.

• 1:15:16Speaker 03

  People making under a hundred fifty thousand dollars barely pay taxes anyway. They barely pay taxes. People making under fifty thousand dollars basically don't pay taxes.

• 1:15:22Anthony Pompliano?

  Well, a lot of them pay up to thirty percent.

• 1:15:25Speaker 03

  I mean, when you get in the hundreds, but like the vast majority of Americans make for under fifty grand, they like no tax.

• 1:15:30Anthony Pompliano?

  Forty seven percent is Mitt Romney's number.

• 1:15:33Speaker 03

  Yeah, like.

• 1:15:34Anthony Pompliano?

  That was the number.

• 1:15:35Speaker 03

  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're gonna be worse off because taxes.

• 1:15:43Anthony Pompliano?

  Well, eighty percent of Americans make less than a hundred fifty thousand dollars.

• 1:15:45Speaker 03

  Great. I mean, I'll take the tax cuts, it'll make me richer. But like, for the person who makes eighty 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.

• 1:15:57Anthony Pompliano?

  But on a net basis, let's just, I disagree with that, but let's just say that it is a tariff, is a tax increase. If they also get all federal income tax removed, are they better off?

• 1:16:06Speaker 03

  No, because you're paying more for goods and the tax savings isn't enough. Absolutely not.

• 1:16:10Anthony Pompliano?

  Why would you be paying more for goods?

• 1:16:12Speaker 03

  Because the tariff makes them more expensive by definition. The point of a tariff is to make the product more expensive.

• 1:16:18Anthony Pompliano?

  Is to make the imported product more expensive, but not the domestically made product.

• 1:16:22Speaker 03

  We cannot make this shit.

• 1:16:24Anthony Pompliano?

  I actually, I looked it up. There's a bunch of hat companies that have been around since the eighteen hundreds in America. They're doing just fine.

• 1:16:29Speaker 03

  Absolutely. How much you think those hats cost?

• 1:16:31Anthony Pompliano?

  Well, they make ball caps. What do you think that the end retailer sells the American made hats?

• 1:16:35Speaker 03

  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 you, if we could make it, you wouldn't need the tariff.

• 1:16:47Anthony Pompliano?

  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?

• 1:16:55Speaker 03

  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, don't want to buy it. And some other company will show up and make a hat that's works. This is how economics work. Let the market decide which hat is worth the price.

• 1:17:11Anthony Pompliano?

  But the market isn't deciding right now.

• 1:17:12Speaker 03

  Absolutely. It's

• 1:17:13Anthony Pompliano?

  No, it's because because the currencies are being manipulated, the products are being subsidized. There's tariffs on the other side. How about this?

• 1:17:20Speaker 03

  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

• 1:17:27Anthony Pompliano?

  But the price of the products goes down over time.

• 1:17:29Speaker 03

  Because the globalization allows other countries with lower input costs to make cheaper stuff and make it at

• 1:17:36Anthony Pompliano?

  Who can make it cheaper than China?

• 1:17:39Speaker 03

  Vietnam, India, Philippines. I mean, at this point, by the way, China is not always the low cost manufacturer anymore.

• 1:17:46Anthony Pompliano?

  But this is my point. So if that's how economics works, why aren't they already making it?

• 1:17:49Speaker 03

  What do you mean they're already making it?

• 1:17:50Anthony Pompliano?

  If they can make it cheaper than China can, why don't they make it before the tariffs?

• 1:17:54Speaker 03

  Vietnam does make that.

• 1:17:55Anthony Pompliano?

  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?

• 1:18:05Speaker 03

  They are.

• 1:18:06Anthony Pompliano?

  Okay.

• 1:18:06Speaker 03

  So they just have

• 1:18:08Anthony Pompliano?

  So why is it that another country can make it cheaper than China who has to subsidize their steel industry?

• 1:18:12Speaker 03

  No, they can make it cheaper than the tariff to China.

• 1:18:15Anthony Pompliano?

  Okay, but

• 1:18:16Speaker 03

  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 manufacturing, construction manufacturing. So there's another argument of like, you want cheaper housing, cheaper steel is a good thing. But yes.

• 1:18:28Anthony Pompliano?

  Well, unless the trade off is that you put your own steel manufacturers out of business.

• 1:18:32Speaker 03

  I don't know. Like, do we really think that we have to make steel here?

• 1:18:36Anthony Pompliano?

  I mean, don't you think it's a national security concern?

• 1:18:38Speaker 03

  I don't know. I mean,

• 1:18:40Anthony Pompliano?

  Are we going to build things?

• 1:18:41Speaker 03

  We're going to buy steel from cheaper people and make the stuff cheaper.

• 1:18:44Anthony Pompliano?

  But but

• 1:18:45Speaker 03

  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 are 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 make stuff.

• 1:19:05Anthony Pompliano?

  I know, and they have tariffs now.

• 1:19:06Speaker 03

  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

• 1:19:10Anthony Pompliano?

  Unless the American producers start to produce it.

• 1:19:12Speaker 03

  At higher prices.

• 1:19:13Anthony Pompliano?

  No, at lower prices.

• 1:19:14Speaker 03

  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.

• 1:19:20Anthony Pompliano?

  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 $1, right? And the Chinese subsidize it.

• 1:19:28Speaker 03

  The clearing price of steel, because that price obviously moves.

• 1:19:31Anthony Pompliano?

  Yeah, of course. Yeah, it's just right now, steel, uh, it's $1.

• 1:19:34Speaker 03

  The clearing price, fine. Current clearing price is.

• 1:19:36Anthony Pompliano?

  China subsidizes by 25%, now it's 75 cents.

• 1:19:39Speaker 03

  For the Chinese steel?

• 1:19:39Anthony Pompliano?

  For the Chinese steel.

• 1:19:40Speaker 03

  Correct.

• 1:19:41Anthony Pompliano?

  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 going to put a 25% tariff.

• 1:19:47Speaker 03

  On China.

• 1:19:48Anthony Pompliano?

  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 going to put a 50 cent tariff. Now Chinese steel is a $1.25 and we can make it for a dollar.

• 1:19:57Speaker 03

  The Chinese, they don't make all the steel. They don't make all the steel.

• 1:20:01Anthony Pompliano?

  Well, they make a lot of it.

• 1:20:02Speaker 03

  No, no, they don't. Like, they really don't. And.

• 1:20:05Anthony Pompliano?

  How much steel do they make? Look it up.

• 1:20:07Speaker 03

  I mean, like, okay, Chinese steel manufacturing as a percentage of global steel. How about that?

• 1:20:16Anthony Pompliano?

  Perfect. That's a good question. We should have a referee for the questions.

• 1:20:21Speaker 03

  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. Okay, they make 50% of global crude steel production.

• 1:20:34Anthony Pompliano?

  Okay, that's a big number.

• 1:20:36Speaker 03

  Because they use it domestically to build buildings that nobody lives in.

• 1:20:39Anthony Pompliano?

  No, no, no, but there's a lot of caveats, but you said they don't make that much.

• 1:20:42Speaker 03

  No, I'm just saying there are other steel producers. There are other steel producers. By the way.

• 1:20:45Anthony Pompliano?

  How much does America make?

• 1:20:47Speaker 03

  Not, not a huge percentage because we want cheap steel. Like, why do you want to pay more for steel?

• 1:20:53Anthony Pompliano?

  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?

• 1:21:02Speaker 03

  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?

• 1:21:24Speaker 03

  30,000 steelworkers in, 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 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 going to pay more. But guess what? There's an Instagram post of 30,000 people in Pittsburgh who are making steel be happy for them.

• 1:22:06Speaker 03

  It is a wealth transfer from 350 million Americans to 30,000 steel employees.

• 1:22:12Anthony Pompliano?

  So it is, it is

• 1:22:13Speaker 03

  Why do you say 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.

• 1:22:44Anthony Pompliano?

  Well, we do, but by the way, we do this for pretty much every single industry that we think is important.

• 1:22:48Speaker 03

  The United States government does not pick the industries that the United States thinks are important.

• 1:22:51Anthony Pompliano?

  Of course it does. 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

• 1:22:58Speaker 03

  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?

• 1:23:06Anthony Pompliano?

  Well, here's a good example. So there's a business that I, I know they are, they manufacture highway signs and they put a traffic cones. And they get government contracts. The US government requires that they use American made products.

• 1:23:18Speaker 03

  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 for the federal government is so fucking expensive. Because we make the United States government and all of our subcontractors use American labor. And that Why a bullet train in California costs $800 billion and the Chinese can do it for 1 billion? Because we are shooting ourselves in the dick. Like, yes, we are absolutely requiring the US, 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, 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 US taxpayer money. The United States government does not have money.

• 1:24:04Speaker 03

  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 real 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 as a 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.

• 1:24:49Speaker 03

  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 get a few jobs. Your 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 No, no, he's for, no, 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, it's passed through to 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.

• 1:25:33Speaker 03

  So like, we pay, we pay for the subsidy and we pay for higher prices in all of these things. And like, if the argument is, we should be happy about that.

• 1:25:45Speaker 03

  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 guess, but like, remember we went back, and I think steel is such a fascinating one? Because we go 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 maybe believe differently, but housing prices are insane. What is one of the largest input costs to building a house? Steel.

• 1:26:28Speaker 03

  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.

• 1:26:59Anthony Pompliano?

  Which then go out into their community and spend money, which create more jobs, which create tax revenue, which drives better outcomes.

• 1:27:07Speaker 03

  It's a government job. We just created essentially the government job.

• 1:27:09Anthony Pompliano?

  No, stop.

• 1:27:10Speaker 03

  Yes, we did. We took money from the American people. We threw a tariff.

• 1:27:14Anthony Pompliano?

  You've gone, you've completed the whole circle. Now, like, you've perfected the, like, Twitter troll.

• 1:27:20Speaker 03

  We have taken, we have taken money from the American consumer, because the United States government collects that tariff. The United, so we taxed you. We taxed you, and we handed the money to the steelworkers.

• 1:27:34Anthony Pompliano?

  Unless we took the tariff from the supplier.

• 1:27:36Speaker 03

  Which is passed through to you in higher prices.

• 1:27:38Anthony Pompliano?

  Not necessarily.

• 1:27:39Speaker 03

  Absolutely.

• 1:27:40Anthony Pompliano?

  Walmart has already gone to their suppliers, said that they're not going to increase their prices.

• 1:27:43Speaker 03

  Walmart also just pulled guidance today because they said the economy is so soft, they can't die to growth.

• 1:27:48Anthony Pompliano?

  Okay, but that has nothing to do with what their price strategy is with tariffs?

• 1:27:52Speaker 03

  Absolutely it does because they know they're gonna have to raise prices and so they can't predict demand on the higher prices and that's why they pulled guidance.

• 1:27:58Anthony Pompliano?

  Maybe. Assumption.

• 1:28:00Speaker 03

  Read it in their press release. They are specifically saying, we think consumer demand is gonna come down. We're worried about prices. We can't predict our demand anymore. So we're gonna pull earnings guidance as Walmart. Because they know that they're gonna have to pass through. Maybe it's not 100%, but they're gonna have to pass through these costs to the consumer. It's going to reduce demand and it's gonna hit, it's gonna hit earnings. And so like, we will pay more. 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 this steel coming into America, we say, it's 20% more expensive now. Okay, right? The American government collects that money from you, from you.

• 1:28:42Anthony Pompliano?

  But, but demand shifts to the American producers, but go.

• 1:28:45Speaker 03

  Correct. So the demand at higher prices.

• 1:28:48Anthony Pompliano?

  Not necessarily.

• 1:28:49Speaker 03

  Yes, at higher prices because if you didn't need the tariff, the US production would already be there through market forces.

• 1:28:54Anthony Pompliano?

  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.

• 1:29:07Speaker 03

  The price goes up, demand falls, and we are creating a world where in order for the US to compete, we have to have higher prices. If you didn't have the tariff, the US couldn't compete. You're saying that by definition, you need the tariff.

• 1:29:19Anthony Pompliano?

  What you're saying is they're cheating. What you're saying is they're cheating.

• 1:29:22Speaker 03

  It doesn't matter.

• 1:29:22Anthony Pompliano?

  If it was a free, if it was a free market.

• 1:29:24Speaker 03

  You're still saying, whether, 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?

• 1:29:35Anthony Pompliano?

  Our American manufacturers.

• 1:29:36Speaker 03

  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. No, it's like 20,000 steel working jobs. And by the way, you don't, 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 cost. We gotta go. We gotta go. Where can we send, where can we send people to find you on the internet? Oh, I hope they don't find me. No, no, come on. Where, where should they find you? 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 class, middle class, perfectly middle class. And I remember going to

• 1:30:19Speaker 03

  the stores with my mom and, and she, you know, we're Jewish families. She looks at the price of everything like 18 times. She's like, I don't know, milk's like 195, you know, like I can, we're not gonna buy the book. And like, expensive stuff sucks. It sucks. And it sucks for the average. It doesn't suck for me. I don't care. I have enough money. I don't think about this 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

• 1:31:02Speaker 03

  have decided is that probably less than 100,000 jobs total are worth every American paying more. And I'm gonna give you like one really interesting example, two. And then I know why you're gonna kick me out. Uh, TSMC, because we talk about domestic manufacturing of, 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 they built it. It's nice. It's good. Thank you. Thank you, TSMC. 5,000 jobs. 350 million Americans. 5,000 jobs.

• 1:31:47Speaker 03

  This is what we're... By the way, that is the most strategic industry that anyone can identify, semiconductors. And we created... 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.

• 1:32:32Speaker 03

  Foxconn. Foxconn said they were going to come in and spend like $10 billion 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 going to like give you money to come here, and we're going to take it from the Americans, or we're going to 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.

• 1:33:17Speaker 03

  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 them 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.

• 1:33:47Speaker 03

  Just wait when you have a shrinking US economy and our tax revenue shrinks with it. Right? The pie of America is not fixed. The pie of America grows.

• 1:34:01Anthony Pompliano?

  But you need American domestic manufacturing to grow the pie.

• 1:34:05Speaker 03

  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.

• 1:34:12Anthony Pompliano?

  Tesla, SpaceX, weaponry.

• 1:34:15Speaker 03

  Apple.

• 1:34:16Anthony Pompliano?

  Pharmaceuticals, Apple.

• 1:34:17Speaker 03

  Yeah, like, but Apple assembles, they do the important stuff.

• 1:34:21Anthony Pompliano?

  Yeah, yeah.

• 1:34:21Speaker 03

  They do the important stuff. They do the high paying stuff. We actually are 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 seventies and the sixties and the eighties, they're like, we boycotted stuff because the labor jobs, right? Making sneakers, make like, people are 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?

• 1:34:56Anthony Pompliano?

  No, no, no, no. They're saying bring back machine manufacturing. They're not saying to go and build sweatshops in America.

• 1:35:04Speaker 03

  What do you think? I mean, Foxconn is like iPhone assembly, right?

• 1:35:09Anthony Pompliano?

  And you know how high tech it is?

• 1:35:12Speaker 03

  Have you ever seen a picture of a Foxconn facility?

• 1:35:14Anthony Pompliano?

  Yes.

• 1:35:14Speaker 03

  It's like an assembly line. It's a giant assembly line with a bunch of people. 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.

• 1:35:34Anthony Pompliano?

  Well, to be, to be fair, we automated the production line of Tesla and Tesla created 125,000 jobs.

• 1:35:41Speaker 03

  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.

• 1:35:47Anthony Pompliano?

  Agreed.

• 1:35:47Speaker 03

  They're not manufacturing.

• 1:35:48Anthony Pompliano?

  Where can we send people to find the biotech stuff you're doing? Give them a website so they go check it out.

• 1:35:52Speaker 03

  I'm not sure. I want my biotech world and my angry tariff world to like come together. Cause you know, but.

• 1:36:01Anthony Pompliano?

  Security bio.

• 1:36:02Speaker 03

  Security bio. It's on my shirt. I was like, shit, should I wear this today? Like, I don't, I don't know if I want like this association.

• 1:36:08Anthony Pompliano?

  All right. Thank you.

• 1:36:09Speaker 03

  Anytime.

• 1:36:09Anthony Pompliano?

  Do we agree? Kind of on some things?

• 1:36:12Speaker 03

  I think we agree that.

• 1:36:16Speaker 03

  We have to take a look.

• 1:36:18Anthony Pompliano?

  We agree on the cheating.

• 1:36:19Speaker 03

  There's some cheating.

• 1:36:20Anthony Pompliano?

  Yeah, there's some cheating. We agree that tariffs can be a good, short-term way to cure the cheating. And if the tariffs bring us back more to like a net basis, more free trade at the end, that's a good thing.

• 1:36:33Speaker 03

  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 cheating. And they do cheat. They do cheat. And I can tell you biotech stories of how they cheat, too. It's like, actually kind of crazy. I mean, it's IP theft and like legitimate theft. They are not good people. Well, the people are good. The government culture is not good. I don't want to, you know, bully an entire people. They have like really rough culture about stealing stuff. 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 US, Europe, China. We have millions and millions and millions of other people who will pop up to fill the demand if you, or to fill the supply, rather, if you tax China. So I, here's where I agree with you. I know we have, will actually rap.

• 1:37:15Speaker 03

  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 and protects our businesses because we don't want like pirates stealing shit 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.

• 1:37:45Anthony Pompliano?

  So I got to tell you, breaking news, and then I really got to go. Trump just raised the China tariff to 125%.

• 1:37:54Speaker 03

  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 going to 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. Like, that is a true, I think China may lose worse than us, but I'm not sure. I mean, I'm going to kill for this PC.

• 1:38:14Anthony Pompliano?

  But, but.

• 1:38:15Speaker 03

  Do we really want to be the tallest midget?

• 1:38:16Anthony Pompliano?

  But, but.

• 1:38:17Speaker 03

  Do we really want to be the tallest midget?

• 1:38:18Anthony Pompliano?

  125% on China, 90-day pause, and a substantially lowered reciprocal tariff during the period of 10% also affected.

• 1:38:25Speaker 03

  Awesome. Great. I, I will, look, I'm not, I'm not like a sick of it. 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.

• 1:38:38Anthony Pompliano?

  So, ready for this?

• 1:38:41Anthony Pompliano?

  Did he call the market bottom? When he said now's a good time to buy?

• 1:38:44Speaker 03

  Well, he controls it. He controls it.

• 1:38:47Anthony Pompliano?

  It's like, but you know, he's gonna say that he called the bottom.

• 1:38:49Speaker 03

  You know what? We should go see how much stock he bought before he tweeted that and then took the terrace off. You know, like, uh.

• 1:38:54Anthony Pompliano?

  All right, bye. We gotta go. Thank you, guys.