EP 138: Derek Thompson (Writer, The Atlantic) and Zach Weinberg (Co-founder & CEO, Curie.Bio) Discuss the Tariff Withdrawal and America’s Future

In this episode, Derek Thompson (Writer, The Atlantic) delves into the tumultuous nature of Trump’s trade policies, especially regarding tariffs, and how they impact American manufacturing and global markets. They discuss the constant changes in policy, the resulting uncertainty for industries like automotive and aerospace, and the mismatch between Trump’s ‘madman strategy’ and effective industrial policy. The conversation also explores the broader economic consequences, including stock market volatility, housing affordability issues, and the role of government in promoting economic growth and innovation. (00:00) Intro (00:20) Trump's Trade Policy and Its Implications (01:30) The Uncertainty of Tariff Policies (02:12) Impact on American Manufacturing (05:15) Stock Market Reactions (07:00) Debating the Effectiveness of Tariffs (10:02) Wall Street vs. Main Street (18:44) Housing and Healthcare Challenges (34:53) Historical Context of Housing Regulations (41:48) The Reality of Construction Jobs (42:35) The American Dream and Housing Costs (42:57) The 30-Year Mortgage and Its Impact (43:48) Comparing Home Ownership to Stock Market Investments (45:14) Political Reception of the Book 'Abundance' (46:17) Pro-Business Democrats and Government's Role (48:38) The Need for Aggressive Democratic Leaders (51:18) The Importance of Economic Growth (01:01:26) Debating Government's Role in Industrial Policy (01:03:34) Challenges in the Semiconductor Industry (01:13:19) The Housing Problem in New York City (01:15:26) Conclusion and Final Thoughts Executive Producer: Rashad Assir Producer: Leah Clapper Mixing and editing: Justin Hrabovsky Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA 🎙 Listen to the show Apple Podcasts: https://podcasts.apple.com/us/podcast/the-logan-bartlett-show/id1606770839 Spotify: https://open.spotify.com/show/5WqBqDb4br3LlyVrdqOYYb?si=3076e6c1b5c94d63&nd=1 https://open.spotify.com/show/5WqBqDb4br3LlyVrdqOYYb?si=3076e6c1b5c94d63&nd=1 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 🐦 Twitter - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode, Logan goes behind the scenes with world-class entrepreneurs and investors. If you're interested in the real inside baseball of tech, entrepreneurship, and start-up investing, tune in every Friday for new episodes.

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

• 0:00Logan Bartlett?

  Derek, thanks for doing this.

• 0:01Speaker 01

  Hey, great to be here, guys.

• 0:02Logan Bartlett?

  So we're recording, this is Thursday, April 10th. We're, I guess, this is the day after Unliberation Day, or I don't know if we have a term for what actually just happened. I'm curious, though, I mean, I think all of us at different points were pontificating about what was going on in the different markets. I'm curious, Derek, what was your reaction or your kind of meta takeaway from the six days that were all this chaos of tariffs and protectionism and all that stuff?

• 0:34Speaker 01

  Yeah, I mean, I remember like one, two weeks into Trump's administration, I was talking to someone and I said, like, "The hard thing for journalists in a Trump administration is to remember that as many things happen, even more unhappens." Right? Like, every time I tried to record a podcast or write an essay about some aspect of Trump's trade policy, it changes between the time I write the first sentence and the time that I send it to the editor.

• 1:01Logan Bartlett?

  That's the art of the deal.

• 1:03Speaker 01

  This is the right, well, here's the thing. It's the art of the deal, it is. I mean, Trump is confounding in some ways and fantastically simple in other ways, right? Like, this is someone who told us the 1980s. "I began with audacious statements to lure counterparts to the table. I use leverage to squeeze something out of them. I get some wind from my ego and wallet, and then I repeat, repeat, repeat." And he was just like buying skyscrapers in New York City. Like, God bless him, fine. If it works for you, let it happen. The problem is that, like, this idea that Trump's uncertainty, his madman strategy, is useful for bringing counterparts to the table that are like other countries. The flip side of that uncertainty is that nobody knows what the fuck the tariff policy is going to be in the US.

• 1:47Speaker 01

  And so if you're a factory, if you're a car company, and you're Boeing, and you're like, "I might have to reshore my entire supply chain because this part of the wing is built in Sweden, and this part of the wing is built in Germany, and this part of the wing is built in Singapore or something. I have to reshore that entire thing." How do you know what the tariff policy is going to be in one year? Much less One month, which much less one day. So one of the frustrations that I've had with a lot of people who are still defending this policy is that sometimes they'll represent Trump's uncertainty, which served him well as a real estate mogul, as something that will successfully reshore investment in American manufacturing.

• 2:29Speaker 01

  And it's not just people like me editorializing, saying that doesn't make any sense as sort of like a first principle. If you read the Dallas Fed survey of manufacturers, or you read about the chaos happening to steel manufacturers in the Rust Belt, or you read all these updates from supply, from auto and airline suppliers in the US, they're all pausing investments or even laying people off. So the strategy to use maximal chaos in order to reshore manufacturing, I don't think makes sense at all. And it's one of the reasons I'm just most pessimistic about this plan working out, you know, even if the pause on Liberation Day does go on for 90 days.

• 3:07Speaker 02

  I mean, even if you could operationally reshore, which you probably can't even do that for, it's going to take like a few years for very complex manufactured goods. Boeing is probably a great example of that, but you know, nothing is simple. You have to do the build out.

• 3:21Logan Bartlett?

  I was even talking to someone that makes razor blade yesterday, and they were like, I don't think we can make that in the US. And I'm like, really? You can't make razor blades? And they're like, no, no, no, it's just like too complicated, the little fine inputs that we've been able to productize with the warehouse internationally. I was like, oh, interesting. So not even the super complicated ones.

• 3:39Speaker 02

  And even if you could, and the reason you're doing it is because of, you know, a Trump administration tariff policy, which by the way, you're not going to do, but let's just say, argument's sake, you could. He's not in the White House in four years, in three and a half years. And so you're going to do billions of dollars in CapEx on like a temporary tariff that by the way, at like a swing of a pen, Congress can take away from him, right? Like Congress controls the purse here, Congress is supposed to approve tariffs, not currently doing that. So just like the logic is flawed in so many different places, but.

• 4:17Speaker 02

  At least he seems to be moving. Derek, I'm curious if you agree, but like, he seems to be moving to a world where it's like, oh, no, no, no, no. Actually, the tariffs are just to get more free trade agreements done with every nation except for China.

• 4:32Speaker 01

  Who knows? I have no idea. I mean, go back to the beginning of the administration. It's hard to keep track, but if I recall correctly, tariffs on Canada and Mexico were announced, and then unannounced, and then re-announced, and then re-clarified, and then we had Liberation Day, and then we had Unliberation Day. Trump hasn't been president for three months. This pace of updating our geopolitical strategy is absolutely conducive to keeping Trump on the front page of the New York Times. It's not conducive to getting the suppliers of Boeing, or Ford, or GM to relocate their manufacturing in the US. How would you even begin to do it?

• 5:15Speaker 01

  I mean, it's incredible to look, for example, at the stock market. Just look at a graph of the S and P 500 over the last two weeks, where it just goes off a cliff, and then it swings back, and then it goes back down. It's like, nothing actually happened in the world. There was no global event that caused this. There's just a guy in the Oval Office who's deciding, day by day, what the tariff rate on Lesotho, and Venezuela, and Vietnam should be, over, and over, and over again, and changing his mind. It is, of course, possible that this turns out well. I mean, there's a universe, there's Earth 116, where Trump's actions lead us to a world where manufacturing is reshored, or something else happens that

• 5:58Speaker 01

  gets a bunch of US allies together to create a sort of supply chain network that can take on China. There's a world in which this turns out well. It's just very, very difficult to imagine how you're going to see any kind of significant re-industrialization in a world where Trump keeps changing his mind every four days, hours. And the only thing that I would add to this is to say, like, you know, even listen to some of the defenders of Trump's tariff policy, like Orrin Cass at American Compass, who's, you know, talked to Ross Douthat today, he's talked to the Washington Post, he's talking to a lot of different people. You know, he'll talk about how it makes a lot of sense to subsidize particular industries, like, say, the semiconductor industry, in order to reshore the manufacturing

• 6:40Speaker 01

  of a good, advanced computer chips that is essential for America's national security. Someone was already doing that. Joe Biden already had the Chips and Science Act and Trump has threatened to throw out the entire thing at the same time this tariff policy is going from 10% to 70% back to 10%.

• 6:59Speaker 02

  I would say, I would say a step further where the logic breaks down, which is if the argument is other countries, and let's even just use China for a second, have unfair trade practices because they have in-house industrial policy. Basically, the government subsidizes certain industries there by pumping a bunch of non-private money into the industry, solar panels, whatever, cars in theory with BYD, at least when they were getting started. And that is unfair. And as a result, we need to tariff them to bring their prices to what a normal rational free trade agreement would be.

• 7:41Speaker 02

  And then we go, what we should do is industrial policy in the United States to unfairly subsidize our own. We're doing the thing that we just said China should not be doing because it's unfair. And because we, like, which one is it? Is, are there unfair trade practices or fair trade practices? But you can't have both. You can't say like, they're doing this unfairly, but also we need to subsidize our own industries. Those are the same things. We call one industrial policy, we call the other tariff. It's the same. It is government subsidization of private industry and central planning. And so I just, I disagree with the Biden Chips Act for what it's for, for the exact

• 8:21Speaker 02

  same reasons, which is this government-controlled choice of which industry we're handing money out to. We're taking your money and my money and Logan's money and some bureaucrat is saying this one's important as opposed to the market. Now, you can argue whether you agree with that or not, but by doing that kind of subsidization in the United States and then complaining that other countries do it, we are lying to the world. And smart people understand this. Maybe the average, you know, American voter doesn't get it yet. They will. But it's the same. It's the same, and I think they get it wrong.

• 8:52Logan Bartlett?

  Well, and that's the thing that I found most interesting about this whole discourse is there's so many people that 10 years ago, 15 years ago, would have been patently against this policy that are now within the Republican Party. And because there was no consistent stated strategy, you had the end of it, which is these tariffs are in place, here's what they are. And then you had every talking head trying to back into the strategy of what it was. And so people didn't know exactly what the line was to go with. No, it's reindustrialization within the economy. No, this is just for strategic goods. No, it's the art of the deal. No, this will create jobs.

• 9:34Logan Bartlett?

  There was all these different things, and it was disappointing to me to see how many people I actually respect that were trying to back into the logic behind it all because they knew they had to be on the team of Trump, and they couldn't poke any bears in that way. And so then trying to back solve for what the logic was just led to all these logical inconsistencies.

• 9:56Speaker 02

  Derek, what's your take? Because I'm curious, you've done a lot of this, talking to Dems about this type of policy. What's your view on this idea that like, there's Wall Street and Main Street, which we're starting to see some of the rhetoric, and like, because stocks go down, don't worry, that's just Wall Street stocks. And yet, included in the Wall Street stocks are like, home builders and Walmart and, you know, essentially like, people who employ the vast majority of America. Like, when you talk to Democratic senators and Republicans, like, how do they respond to that? Because I get there's some populism that is like, it feels good to be like, fuck Wall

• 10:41Speaker 02

  Street, Main Street, but in reality, like, these people work for Wall Street companies. I'm curious your take.

• 10:47Logan Bartlett?

  But these were Democratic policies, or like, ideas. That was one of the things people trying to own liberals with, like, oh, Nancy Pelosi said this in 1996, you're not supporting it now? So it was funny, so I'm curious. Yeah, what's the horseshoe theory and all this stuff?

• 11:01Speaker 01

  Yeah, I haven't had conversations with Democratic senators and congresspeople about the Main Street, Wall Street dichotomy that you're describing, right? The conversations that I've been having with electeds over the last few weeks have been almost exclusively about the ideas in the book, which I want to talk about, but frankly, I think this is like much more interesting right now. And I've had infinity conversations about abundance and the tariff stuff is very fresh. So I want to, I want to hang on.

• 11:23Speaker 02

  And I think they tie together, by the way, which I want to do because there's, there's this growth kernel that bring them both together. So we'll, we'll segue there.

• 11:31Speaker 01

  Here's how I feel about this sort of Wall Street, Main Street dichotomy. I, I think in, in many cases, it's a false distinction. Like the stock market is not just a measure of other people's wealth, right? First off, more than 60% of Americans are invested in the stock market, which means that when the stock market pukes by 11% or 15% or whatever it's down year to date, that almost certainly implies that the majority of Americans have lost wealth. That's bad for them and it's also bad for their future spending because of the wealth effect. People are less likely to say, you know, go on vacation or like do an addition to their house if they feel like they're poorer. So there are economic outcomes of stock market declines that I think are macroeconomically

• 12:13Speaker 01

  sound, but also, I think you agree with this, the stock market is not just a scoreboard of wealth. It is a signal of what investors willing to have skin in the game think is going to happen to the economy.

• 12:26Speaker 02

  And it's also, it's also the companies who employ millions of Americans. I mean, even if you don't own the stock market, you may work for Walmart, you may work for a home builder, you may work for a miner, like it's these companies, it's not just, like people are like, oh, the stock market, that's Google. No, no, like massive employers of, of people outside of blue liberal cities are traded in the stock market. They're public, they're big.

• 12:52Speaker 01

  I'm going to explain why, you know, Michael Sembalist, who's this great financial analyst at JP Morgan, he produced this graph in a, in a letter to some folks this week that showed how every single time, he, all, all the times the stock market's declined by 10%. And what's happened last few weeks is truly extraordinary because it's just one guy making a bunch of decisions, making the stock market yo-yo. It's not some Political event like say, you know, the the housing crash 2007. But if you go back over the last 70 years and you look at every single time the stock market declined by 10% or more. That stock market decline anticipated a recession almost every time in the early 1990s, in 2007, in 2020.

• 13:31Speaker 01

  Equity prices tend to bottom before every other in indicator bottoms as well. And as a result, these kind of stock market declines tend to be very predictive of what's going on in the rest of the macro economy. And so this is one of those things where, you know, I've talked to Joe Weisenthal a bit about our frustration that sometimes people who somebody who sometimes share my politics will say, you know, the stock market is not the economy. The stock market is not the economy and it's like, nothing is the economy. Like the like the jobs report isn't the economy. The retail report isn't the economy. Like the number of jobs created in the state of California over the last few months isn't the economy. The economy is 10,000 different things and the stock market is a part of it.

• 14:16Speaker 01

  And in fact, the stock market is often one of the best real time gauges of what's going on in the economy. Because it's millions of people all over the world making expensive bets on what they think is going to happen to the future of America's publicly traded corporations.

• 14:30Speaker 02

  I would, I would make the argument. I would make the argument is actually one of, if not the single best view of the future of the US economy at a national level. The stock market is phenomenally good at reacting to like future expectations, whether they're rates or planet. The only thing it doesn't do well is it's not localized. It's not going to tell you how people in Pittsburgh are going to do, or like the suburbs of wherever and it kind of, you know, it's it's peanut butter, it spreads it out across. And so when people are like, oh, it's not the economy, it's like, well, sure, it's not your local economy. But it does represent America in the aggregate pretty damn well. I would actually argue it represents America better than GDP.

• 15:12Logan Bartlett?

  Well, and by the way, we have now new mechanisms with prediction markets that also have similar dynamics to the stock market. And you know what, like the prediction on recession this year, it peaked at 66%. I think the day before Unliberation Day or whatever we're calling it, then a couple hours after it announced, it bottomed out at like 49%. And you know where it is back right now? It's at 60%. So it's like, hey, all this stuff, there's a bunch of different mechanisms for the leading indicators of it, but they tend to track pretty closely with one another, be it prediction markets, be it the stock market. Like, all this stuff is a leading indicator in some way.

• 15:51Speaker 01

  And I think maybe there's a conflation that's being made among some people that I want to be very clear about. When people say the stock market's not the economy, I think what they're trying to say sometimes is that the stock market is not the single most important measure of how the economy is doing. And there are some times when I might agree with that, right? If you ask me for like my favorite statistic, like you said GDP, and I think that's defensible, my favorite statistic would probably be something like median real income growth, right? But just be the median real income growth also is not the economy. You can have rising median real income growth and have one demographic,

• 16:33Speaker 01

  let's say, white men who didn't go to college, living in the Rust Belt, having depressed real wages. So there is no one indicator that's going to tell you everything. I think the stock market tells us quite a bit, but ultimately, to care about the economy is to care about a panoply of things and not to hang the question of how is the economy doing on any one indicator or another. I think most people who cover the economy, most people who study the economy, really do know that. And they're trying to suck in as much as they can from a bunch of different statistics. The stock market is just one way to, as you said, average out those statistics in one kind of measure of the health of publicly traded companies.

• 17:12Logan Bartlett?

  I think this kind of ties into an abundance point, but the real median income, I think, has trended up pretty consistently over the course of the last, call it, You know, thirty, forty years. I just did a quick search and it said nineteen eighty-four, it was fifty-nine thousand, adjusted for inflation, twenty twenty-three estimates, twenty twenty-four, it's like eighty thousand. So we've consistently gone up. But there's this perception that is stated in the Make America Great Again thing. And also, I saw it over the course of the last couple of days that there's this, back to your point on the economy, the stock market is in the economy. There's clearly this perception that things aren't

• 17:53Logan Bartlett?

  fair, that things aren't going well. And I kept arguing with people in different ways about like, well, what do you actually mean? Like, what's not going well? Is it unemployment? Is it median wage growth? Is it, you know, and it seems like it's some kernel that backs into income inequality in some ways. But also, I think there's housing, there's education, there's healthcare, there's a bunch of other things that are a little orthogonal. I think the media obviously plays a big part, too, in this perception that things aren't fair and it's not going well. And so, Eric, as you, as you wrote this book on abundance, I'm curious, like, as you distilled down or maybe internalized what that sentiment is, was there anything that you kind of came away being like, hey, here's the one or two things when people are saying

• 18:35Logan Bartlett?

  it's not fair or things aren't going well or Make America Great Again, was there one or two things that you kind of thought of, this is what they're really saying?

• 18:44Speaker 01

  I think housing and healthcare are the best things to focus on, right? You can have a situation where Americans are getting richer, but the most important spending items in their life are getting expensive faster than they're getting richer. And that's what's happened to housing in a lot of markets, is that if you look at housing as a share of local median income, whereas a lot of Americans used to be able to buy a house that was, say, two X more expensive than their median income, now it's like six, eight, ten times more expensive. So housing prices are rising in many markets faster than incomes are rising. And that's how you can have a situation where, Logan, you're simultaneously right.

• 19:26Speaker 01

  That Americans are getting richer, but also the Americans who are frustrated are right that some things that they want feel like they're slipping out of the typical Americans' grasp. That's one place. And I think that housing, in many cases, is a relatively straightforward supply problem. We know houses. We know how they're built. Lumber is easy to get, at least before there was a 39% tariff on Canadian lumber. Drywall was relatively easy to get before there was a tariff on Mexican drywall, but we know how to build houses, more or less. Healthcare is much more complicated, right? Healthcare involves a third-party payer. Healthcare is really complex because when someone's sick, it's not like just building a house that you know how to build. Diagnosing can

• 20:07Speaker 01

  take a long time. Expensive medication can be expensive, depending on the patent schedule. Sometimes when people are at the end of their life, doctors are trying a bunch of different things on them, and it's not entirely clear what's going to save their life. And as a result, end-of-life health spending is typically extremely expensive. And so, you know, I don't want to put housing and healthcare in the same bucket, so as to say, these are both simple supply-side solutions. I think housing is often a straightforward supply-side problem. Zach knows more about the world of healthcare than I do, so maybe he can pick up the baton when it comes to healthcare. But I would say, as just a matter of summary here, why are Americans frustrated? Even if they're getting richer, the answer is that the things that

• 20:49Speaker 01

  they often want most in the world, housing, healthcare, even sometimes a college education, are getting expensive faster than Americans feel they can pay for them.

• 20:57Speaker 02

  It's like economic porn for me, listening to you talk about that, because it's just like, it's just right. Like, it's perfect. And it's funny, you're gonna hear, at some point, I did this stupid interview with Pomp yesterday, and I said the exact same thing which you said, which is like, I think you can chalk up everybody's emotional feelings about how rich they are, really, to housing. And I think healthcare is a little secondary. But I think, you know, if I were trying to educate Dems in some way, shape, or form, I would view it as your housing policies got you trapped. Like, I think they're linked. I think they're inherently linked. People feel poorer because their

• 21:40Speaker 02

  housing is more expensive. Now, noted that their expectations of housing have also gone up. The home sizes are materially bigger than they used to be. We have air conditioning. We have heating. So it's not exactly the same as it used to be in terms of, like, you're getting a better good, but they are also rising, you know, as a percentage of your disposable income. That is really bad. And it is shocking to me that this idea of like, housing abundance is not yet a core democratic principle, although thanks to you guys, I think we're moving in that direction. You know, you're seeing it a little bit in New York with Adams and others. People are finally getting it. You're seeing a little bit of changes in major democratic cities, but it's not fast enough. And until they fix it, I don't think you're going to see people feel

• 22:25Speaker 02

  wealthier. Healthcare is weird. And I'll just talk about like, maybe three dynamics, I think, of healthcare that make it more, way more complicated than, than housing. One, you tend to not realize how much your income is like, deprecated because of healthcare costs, because you don't pay for it directly. Unless you're, if you're 65 and older, it's Medicare. We're going to leave that out for one second. But the vast majority of Americans under 65 get their health insurance through their employer. And there isn't a line on your pay stub. That's like, oh, by the way, we also paid our, you know, health insurer $3,000 this month, or $2,000

• 23:07Speaker 02

  this month. So you don't appreciate the fact that you are getting a benefit. Like, your income, if you will, is actually more than you realize. Or your compensation. Your compensation. Yes, not your take home income. Fair. Good point. Yes. Like, your compensation. And you're getting more value over time, because you are getting healthcare behind the scenes. And even as incomes are rising, you're still getting the healthcare benefit, right? Like, there's, there's some hidden benefits and people I just don't really... Think, understand. And by the way, I'm pretty sure, and you can correct me if I'm wrong, when we do real median income statistics, I don't believe it takes into account the healthcare benefit that you get.

• 23:48Speaker 01

  There's actually, I want you to keep rolling here because I like where you're going. But there's work from, I believe, the Center on Budget and Policy Priorities and a couple of other liberal think tanks that have over time looked at the share of overall compensation that has been quote unquote eaten up by growing healthcare premiums. There was a whole news cycle, I remember in like 2008, 9, 10, right as the Affordable Care Act is really like the front page news for policy wonks like me, where a lot of people are pointing out, if you feel like you're not getting a raise, the reason is that healthcare inflation is eating your raise. So in a way, it's just what you said. Your compensation might be growing, and so your employer feels like they're paying you more, but you don't feel like you're being paid more because a lot of that payment isn't

• 24:33Speaker 01

  going to you. It's the employer side premium that is allocated for you that is actually going to the healthcare insurer. And so that's a way in which healthcare inflation can sometimes, in almost a literal way, seem to steal a raise from the American consumer.

• 24:50Speaker 02

  Beyond that, too, it's regressive by nature because whether you're rich or poor, your healthcare premium is the same. And so as an employer, right, you know, my last company, we employed 1,000 people, we have 100 people now in the new one, like, our average healthcare expense as the employer, so sitting on top of your salary, I think is somewhere in like the 20,000 to 30,000 range. But that number doesn't change whether you make 40 grand, 60 grand, or 7 million. It's the same number. And so when you think about the healthcare benefit as a percentage of your income, the less you make, the higher that number is. So as a percentage, like, your income is getting eaten up by extremely expensive employer healthcare costs. And it's unfortunate because people don't realize

• 25:34Speaker 02

  that. I actually think one of the best things we could do is just stick a line item in your pay stub. That tells you how much money your employer is also contributing to your healthcare benefit. Just so people understand it, right? Like at a base level, I'm not defending if it's a good or bad system, but just there's a complete lack of understanding of the amount of money that's actually being spent on healthcare behind the scenes.

• 25:56Speaker 01

  What would probably, what might happen there is Zach, is that if people could see the employer sponsored health subsidy on their pay stub every week, it might create so much anger in a period of rising healthcare inflation that you're going to build a lot more agitation for single payer.

• 26:13Speaker 02

  Which by the way, I think.

• 26:15Speaker 01

  The unintended or intended side effect of this policy.

• 26:18Speaker 02

  I think it's where you should go and I have a very unique single payer view. But yes, I think it will, I think people will get angry. I think they'll say, what the fuck? Like, how are, how is $20,000 of my money going to healthcare costs? This is insane. Where can I get healthcare costs cheaper? And everyone's going to go, well, Medicare is cheaper because it is. And like, wouldn't it be interesting if as an employer, I could opt my population into Medicare? Not forcing you into Medicare. And I think this is where the Dems get it wrong. It shouldn't be single payer. It should be Medicare option for all.

• 26:53Speaker 01

  Yeah.

• 26:54Speaker 02

  Just let, let the employer, and you have to do it on employer by employer basis. They can decide, I'm going to take my entire employee base. I'm going to opt into Medicare because the rates are lower, it's going to cost them less. And then if I want to give supplemental benefits because Medicare has some limitations, then fine, add it on, right? Feel free to do some like premium benefit on top and pay for it. If you're Google, you make a lot of money, you can do that. But I do think the agitation will come. One other, which is part of why I like it. I think people will start to realize, you know, like what's going on with all my money? The other thing about healthcare, which is not like housing, and this is where some of these analogies break down, which is that as you get better at housing, theoretically, right?

• 27:36Speaker 02

  Building housing, the prices should come down because you're starting to do things at scale. You get operational efficiencies, right? You're buying more look, like it theoretically, at least they shouldn't grow at the rate that they're growing today because that's just a supply constraint. Healthcare is different because the better we get at keeping you alive, you actually see rising costs because now we are keeping people who previously, this is a little morbid, may have died or just didn't have the meds that we now have available to them. And actually, as the science of healthcare and really biotechnology, but it's also things like diagnostics and procedures that we get better at.

• 28:20Speaker 02

  It costs more because you use more of it. It's really simple. You have one house, you build one house, you live in that house. You're not using more of your house as that house gets better. Healthcare is not like that and we actually end up paying more because we're better at it. And this is where people are gonna hate me for saying this. I actually view healthcare as a luxury good.

• 28:41Logan Bartlett?

  No, it is. I mean, the behavior follows the same as education and travel, where the richer the country is, you spend more on it. And because it's a service-based thing, then it's kind of the wages rise and therefore it ends up being a higher percentage of GDP. And I mean, we can talk about the life expectancy thing, which I know is a favorite of yours, Zach, as well. But the cost thing is a little bit of a misrepresentation.

• 29:09Speaker 02

  There's some really interesting papers coming out. I just saw one yesterday that talk about the rise of chronic disease in the United States, which clearly we have in particular in cardiology and autoimmune. Basically, you know, people have longer-term chronic issues they have to deal with. It means they're on meds for longer, they see their doctor more often, their healthcare costs go up.

• 29:28Logan Bartlett?

  I assume they say it's the dyes than our food?

• 29:30Speaker 02

  Right, exactly, it's food dyes. I mean, don't get me wrong, there's American culture, in particular around food and exercise, that do cause this stuff. Like, I'm not saying that doesn't cause many of these things. But one of the reasons why we have more chronic disease is because we can keep most people alive longer. And like if the longer you live, the more chronic disease you naturally get through aging. And so some of the things that we're seeing now in terms of people living with chronic disease, it's actually because we're just pretty good at keeping you alive with said chronic disease, because we've gotten better at treating it, whereas before you may have died. And those little nuances, I think, are really difficult for people to understand,

• 30:14Speaker 02

  because healthcare feels like a right. But it's not like free speech, where like the more free speech you get, it costs the same, right? Like here, the more you get, it does cost more. And this is where you have to have a booming, growing economy to be able to afford all the healthcare stuff, because it is going to get more expensive over time as we get better at keeping people alive and treating disease. And these drugs are not cheap and expensive, or sorry, they're not cheap. Eventually they do go generic, the docs don't go generic. I don't, have you ever met a generic doctor? Right? So like, there's some real, there's a real cost in here. Anyway, I agree with your like macro thesis, healthcare, housing.

• 30:57Speaker 02

  They're different beasts, and each one has to be tamed differently.

• 31:00Logan Bartlett?

  Well, and Zach, I think we should, the life expectancy thing as well. I mean, we've talked about this in the past, but you need to net out opioids, guns, and cars.

• 31:10Speaker 02

  Yes, that life statistic, and everyone quotes, it's fake. It's not right.

• 31:14Logan Bartlett?

  And if you take out rough fat, by the way, if you take fat out as well, which we could talk about diet and all that, it's like, you know, our life expectancy is far, far better than other countries. And so that's the one thing, I didn't want anyone to say, well, yeah, why are we spending so much and getting less, more worse outcomes? It's like, you have to tie that out. So it's kind of two complicated factors together, but.

• 31:34Speaker 02

  Well, one thing just on that stat, to really be specific about it, because everyone's seen that little chart, right, like US expectancies. We definitely have a country of haves and have nots, right? If you take that chart and you break it out by state, it looks very different. And you know, it's exactly what you think, right?

• 31:49Logan Bartlett?

  Like Mississippi versus California.

• 31:51Speaker 02

  Yeah, I mean, there's, they're, in our poorer states, they die earlier. And in our richer states, they don't. And there's a variety of reasons why, different drivers of this. Some of it is diet and culture, some of it is wealth, right? There's also a few other things going on here, that statistic. One of the things that I think is really important is the United States is a very different country than the rest of the world. And we have a few things that are very different. One, we drive a lot. And we have way more auto accidents than every other country, which causes people to die early. And when you die early, when you're doing average, average it, it pulls that number down, right? Like, early deaths pull that number down. So we, we drive a lot. We do more drugs.

• 32:35Speaker 02

  So we have early deaths from opioids. We have early deaths from drug overdoses. And we have guns. And we kill each other. And we tend to kill each other at younger ages. And all of these things pull those stats down. And it's just like a bad statistic. It's not that it's wrong. It's that it doesn't actually represent healthcare in America. It represents life expectancy, but it also represents it at the aggregate level. And you need to break that down by like state and culture. So I hate it because people use it to represent like how terrible our healthcare system is. And it's just simply flat out wrong. Especially when you go and talk to people who have had to experience healthcare in Canada and Europe. Not on a cost perspective.

• 33:18Speaker 02

  I'm not going to say our cost system, but from a quality perspective. Intelligent people who understand the healthcare system, if they get sick, the United States is a better place to go. It, it, it just, we are a better system when you get it right. That doesn't make it a good system. But that whole idea that our system is, is, is not as effective in terms of keeping people alive is just flat out wrong. It's a cultural issue. It drives, we have other drivers of early death. And early death really pulls that number down. So I hate people repeat it. It's that whole stat of like, nobody has more than like a few hundred bucks in savings. It's also wrong. Which was basically like a, a, a YouGov survey of, of a few people. It's not actually based on financial data.

• 33:57Speaker 02

  And Bernie Sanders' moron team keep repeating it over and over and over again, even though they know it's wrong, which to me makes him even worse than Trump. Cause he's, he's just lying to his own constituents and his staff knows that.

• 34:10Speaker 01

  He's lying to his own constituents once or twice.

• 34:12Logan Bartlett?

  Derek, I guess a question on the housing thing. One of the points that maybe I missed it in the book, but there was a lot of discussion about the impact of housing and all the things that had occurred from a regulatory standpoint over the course of the last 50 years or whatever. If you were to distill down the cause, like, how did we get in the morass of not building NIMBY-ism regulations? I'm sure it probably started well intentioned at a small scale and then sort of spread out, but like, is there a moment in time that you feel we sort of transitioned to this mindset of we need to control all these things?

• 34:52Speaker 01

  Yes, there's a moment in time. No, it's not an easy story. I think the moment in time is the 1960s, 1970s, but the reason why our housing paradigm shifted in those decades is really at least threefold. So, number one, zoning laws have existed in the US for more than 100 years. The first zoning laws are from California, California cities essentially after the Gold Rush, trying to zone Chinese launderers to faraway parts of the city so that they couldn't live near the rich white people. So that was the origin of zoning. It was literally just like carving out cities like little pizza pies and saying like, you know, the Chinese have to live here, black people have to live here.

• 35:35Speaker 01

  Zoning changed around the 1960s, 1970s, where it became less about saying what kinds of industry or what kinds of people could live here and here, and more about creating entire rules for entire cities that said exclusionary zoning, you can only build single-family houses in this entire area. You cannot build apartments in this entire area. We have historic preservation rules that mean that you can't tear down whatever, this church or this strip mall if it has some historical resonance to the neighbors. So, part one is that zoning really changed in character in this decade.

• 36:09Logan Bartlett?

  And was there a pause? I mean, like, what actually caused that? Was there a Chicago Fire something event?

• 36:15Speaker 01

  The theory that I put the most stock into, so Yoni Applebaum wrote a book called Stuck, my colleague at The Atlantic, which is really good. A theory that I put a lot of stock into is William Fischel, who's an economist who's studied this period. Why did the 1970s change zoning laws so much? And his theory is basically it had a lot to do with inflation. During the stagflation crisis, the 1970s, real estate became a much higher share of the typical family's budget. And as a result, residents began to agitate for zoning laws that constrained housing built around them. And this happened at the same time that I would say, you know, track number two happened. So like, number one is zoning. Number two is that in the 1960s, 1970s, Ralph Nader, and I don't want to blame everything on Ralph Nader, only most things

• 36:57Speaker 01

  in Ralph Nader, Ralph Nader created this sort of new paradigm in progressive legalism, which said that the way to express your bona fides as a progressive was to sue the state and to sue companies to stop them from building things. And you really saw this explosion of what is sometimes called adversarial legalism, which made it easier for individuals to sue cities and states to stop them from building any kind of thing, right? A nuclear power plant, a new apartment building, a new, you know, solar farm, you know, behind their, behind their property. And so there was a legal revolution that came up alongside this, this environmental, sorry, this zoning revolution. And then part three is that there were real changes in environmental law. Like, we stated very clearly in the book, America in the 1940s, 1950s was

• 37:40Speaker 01

  absolutely frigging disgusting. And you needed a Clean Air Act, and you needed a Clean Water Act. And we also passed things like the National Environmental Policy Act, NIPA. What we didn't realize we were doing was that we were creating a process by which individuals could use environmental review to slow the construction of anything in the physical world. And so when you put all of this together, changes in zoning, giving neighbors more legal power to stop the construction of stuff around them, and new environmental laws that really outfitted these individuals and outfitted lawyers with the ability to stop construction around them. And you just have this explosion of zoning and permitting and environmental review, and you put it all together, and it just makes it harder to build things in the physical world. So the legal paradigm that we live in, in the

• 38:25Speaker 01

  2020s, there's no resemblance to the legal paradigm that existed in the 1950s when America was building like crazy. Some of our reaction to sort of the growth machine of the 1950s was totally appropriate. But some of it is that like, we accidentally solved the problem of the 1950s and created the problem of the 2020s, right? Like, we built an anti-growth machine that has now taken over our cities, taken over this country, and made it harder to build, as Ezra and I say. The stuff that liberals themselves say they want more of, houses, clean energy, infrastructure, bridges. And so that's really the tragedy here. And in many ways, it's a tragedy of good intentions.

• 39:05Speaker 02

  Do you think you can convince, not you, but we can convince the Trump administration? The three of us, right here, right now. That the manufacturing boom that, you know, we're all hoping for. I mean, everybody would love more good jobs, right? Like, whether they're your jobs or not, is actually just home construction in the United States. Like, that's it. You want to have a boom, let's just like build everything domestically here. You have construction workers, plumbers, electricians, drywall. But, you know, like, why do we have to make t-shirts when we can make homes for Americans?

• 39:37Speaker 01

  I love that line. Make homes, not t-shirts. Do I think we can convince them? No. I think that Trump... Look, when you say like convince Republicans, right? Let's just take stock of and be realistic about what we're dealing with with the executive branch, right? Trump has not only disinvited all the people like E. Mnuchin's and H. R. McMaster's, who in the previous administration orbited around the president and stole from his desk the white papers and memos that were truly effing crazy. He's kicked them all out of the administration. And the administration right now is organized around creating as little friction as possible for Trump

• 40:22Speaker 01

  so that his proclivities on an hour-to-hour basis can essentially govern the entire state, right? Republicans in the Senate are scared of saying no. Republicans in the House are scared of saying no. You certainly don't have like the Department of Energy standing up against Trump when... He does something they don't like. You know, no one from like the Department of the Interior, like the Department of Labor is going to tell Trump not to do what he wants to do. The entire government has essentially been organized to allow this man's proclivity to just run wild and govern the entire country. That said, what I like about this idea of make houses, not T-shirts is it seems to me like there is a part of this administration's agenda. That's all about like, make America manly again, right? Like, what's so great about manufacturing?

• 41:03Speaker 01

  Well, it was highly unionized, we were making stuff, but also just kind of represented like, you know, like sweaty guys working on a line making steering wheels in Flint, Michigan. And I like this idea of like funneling that energy toward housing. I mean, construction in some cases like pays just as well, if not better than manufacturing. And, you know, it might be more unionized if that's something the Department of Labor cares about. So in many ways, I like this idea of like asking the administration to care a lot less about reshoring textile factories. And to care more about like, Trump, you were elected because of an unaffordability election. Actually make housing more affordable, stop like raising the tariff on Canadian lumber by 39%.

• 41:48Speaker 02

  By the way, we have this weird picture in our head of like construction being like a bunch of guys, you know, nailing wood panels together. And there are pieces of that, but construction also has trades. These are high paying jobs, plumbers, electricians. You have people have to do like the engineering design, architects, like this isn't just day labor wages. I mean, there's some of that for some of the, you know, lower skill work, if you will, but it's good jobs for, for high paying jobs for many people. That would be my push because I think they can get behind the construction thing. I'll give you one other driver of, of housing costs in America and really more about like exclusionary zoning.

• 42:30Speaker 02

  Which I agree has to do with like people's perception that their wealth is in their home. We did one really weird thing in America and it's done in other countries as well, which is we said the American dream is owning your own home. And we told people that owning your own home is one of the most important wealth creation things that you can do. And it's your independence and all of these things. So we culturally said that matters as opposed to renting. And then two, we created the fixed 30 year mortgage.

• 43:02Speaker 02

  Which is not a global thing. Like there are, most countries do not have a fixed rate 30 year mortgage. And part of the reason why the United States has that, and you can think of that as a subsidy of demand, right? We said, you need to own your own home. And oh, by the way, we're going to make it really cheap or cheap enough for you to do this because we're going to lock rates for 30 years. We did that by basically creating a federal guarantee on those loans with Fannie and Freddie. So we created culture to do this, and we created basically a giant insurance company through taxpayer money to say, we're going to lend any American at whatever, 3% for 30 years. I mean, the mortgage, I like, I don't know, like two and a quarter for 30 years on this apartment, which is insane that I could ever get that rate. And we did all of those things without unleashing the

• 43:47Speaker 02

  supply side of this. And so we told people this is important. By the way, the actual performance, if you look at owning your home versus owning the S and P 500, if you go all the way back, that is a bad economic choice. Like, it blows people's minds. They're like, yeah, but my home is worth so much more. And you're like, yeah, have you seen the NASDAQ for the last 20 years? You would be way richer, way richer, if you took that money, rented and invested it in the American stock market over the last 20 to 30 years. And nobody realizes that. And so we didn't only just create this massive weird demand crisis where prices are kind of coming up. We also told Americans the wrong advice on how to build wealth. And we did it all at the same time. And this all started in like

• 44:32Speaker 02

  the 70s and the 80s. And here we are.

• 44:34Logan Bartlett?

  Hey, Derek, what, I mean, on the, the, the Trump thing's interesting, but I guess I'm curious on the Democratic side. Like, there's, there's this, this inputs versus outputs. And I think Democrats in general kind of get caught up in some of the process related things. And we can talk forever about that. But I'm curious, do you think there's like a lane for pro-growth Democrats going forward? Obviously, that's a message you guys have in this, in this book. But like, how has it been received? Is there a willingness to deregulate a lot of the zoning and, you know, the governance mechanisms that exist with housing today?

• 45:14Speaker 01

  I mean, look, the book has received a lot of criticism, and I don't want to deny that. But from an elected's perspective, I think the reception's been way better than I could have possibly dreamed. I mean, not just senators like Cory Booker calling out Abundance during his 17,000-hour address. Kathy Hochul told her entire staff to read Abundance. Richie Torres, in response to Astead Herndon of the New York Times saying, "Where's the Democrats' Project 2029?", just tweeted the cover of Abundance. Like, we're talking to senators and congresspeople who are asking their entire staff to read this book. And it's an awesome honor, and at least suggests that the book is detonating in an interesting way. You know, ultimately, two other observations.

• 45:59Speaker 01

  Like, one, there's only two, you know, only a handful of Democrats that have been elected president in the last, what, 30, 40 years? You've got Bill Clinton, Barack Obama, Joe Biden. All these guys have been, like, fairly to rather pro-business, right? Like, this idea of a pro-business Democrat, or at least, I should say, a Democrat who acknowledges that if America is going to do great things, and is going to build great things, it's probably businesses that are going to build them, right? This is not 1932. We're not about to hire 5 million people from the Works Progress Administration to, like, build all of America's houses.

• 46:44Speaker 01

  So, like, we don't have that kind of money. You've got a deficit, and this is a free-market economy. A lot of the things that we want to happen, building houses, building clean energy, building ships, it's gonna be done by companies. I think that there's a record of, you know, center-left Democrats who acknowledge that business is going to have to be a partner of government to build the things that progressives find most important. I would say that's true as well. And then finally, you know, it's, no one ultimately, you know, sometimes people will say, like, you know, "How is this, how is this book going to play in, like, the, whatever, the midterms or 2028?" No one votes for a book. Like, very few people even vote for ideas. Like, this ultimately redounds to the question of who's gonna pick up this idea and figure

• 47:29Speaker 01

  out, like, the right mixture of identity and charisma and message and policy priorities that captures people's attention. And that's impossible for someone in my position to, like, predict or prescribe, right? In kind of the same way that, like, in the 1970s, like, or like, in 1980, like, people weren't voting for Milton Friedman. They were voting for Ronald Reagan. Ronald Reagan just happened to have read Milton Friedman and had a lot of, like, Friedman-y ideas, right? Same way, 1932, were Americans voting for John Maynard Keynes? No, they were voting for Franklin D. Roosevelt, a guy who happened to agree with Keynesian economics and therefore implemented a lot of those ideas and policies.

• 48:10Speaker 01

  So, you know, ultimately, people vote for people, not for books, but I've seen a lot of really promising folks pick up, pick up these ideas and run with them.

• 48:19Speaker 02

  Hopefully, we get a slightly manlier Josh Shapiro. Like, he's got it. He's got the opportunity. I think Democratic candidates just need, like, a little dose of testosterone.

• 48:29Speaker 01

  With, like, with, like, LASIK? Is it, like, you think the glasses are...

• 48:31Speaker 02

  Yeah, I don't know. Do you want to, like, send them some... He's too nice.

• 48:34Speaker 01

  Interesting.

• 48:35Speaker 02

  No, he's too nice. They're all too nice. They use fancy language. They're not angry enough. Like, they need to be aggressive. They need to shout down bad ideas. They need to call people names when they say bad, like, and they're just, it's like, we, like, took a bunch of Democrats for the last 20 years and we said, "Could you be a little quieter? Could you just, like, not yell as much?" And then they all did it. They all did it. And it's, it's sad. Like, we need somebody who actually speaks their mind and is aggressive about saying, "This is bullshit. This doesn't work for us." And, like, we just don't have that. It's hard to be angry and moderate.

• 49:13Speaker 01

  Yeah, I think that's true. I was gonna say, you know, what you're describing here narrowly is Bernie Sanders, right? I know that his politics aren't your politics, but you know, you cannot take this away from Bernie. The man knows how he feels about capitalism. He knows how he feels about the oligarchy. He knows how he feels about income inequality, and he is willing to shout about it to whoever is willing to listen.

• 49:35Speaker 02

  Because it's really, it's really easy to yell and say, "Everything's broken." And that's part of why they do it. And but it's like, it's hard to yell to say, "Hey, this system is actually pretty good. We just have to reform it in a few ways." That is not, you can't say that out loud.

• 49:49Speaker 01

  I think, hopefully, one job that this book does, and this is like my interpretation, and maybe others disagree, but like my interpretation of one way that this book works is that we've offered a, and I'm gonna use fancy language here, but I'm not fucking running for president, so who cares, we give center-left Democrats a permission structure to run against the Democratic Party.

• 50:13Speaker 02

  Yes.

• 50:14Speaker 01

  The hardest thing for the center-left to do is to run against the party. How did Donald Trump take over the Republican Party? By running against it. Why is Bernie Sanders so popular on the left? Because he does nothing except run against the party that he caucuses with. But moderate Democrats can't do that. We think of ourselves as like, the keepers of the institution, the guardians of the establishment, the defenders of the status quo. Americans fucking hate the status quo. They hate institutions. They hate the establishment.

• 50:42Speaker 02

  Can I critique?

• 50:44Speaker 01

  ... a structure to say, "I'm a Democrat, but sometimes being a good Democrat means pointing out where Democrats fail. Here's how Democrats fail, and here's how we can getting back, get back to building stuff in America and not just adopting this politics of moralizing language and blocking projects that would help Americans."

• 51:01Speaker 02

  I'm gonna critique your book for one second. I do love it, by the way, and I think it's great, and I'm so happy it came out at the right time, because it is the right direction. And I think you guys, maybe it's your next book. But I think you missed one concept that you could have nailed a little better, and it's related to abundance, and it's there, to be very clear, it's just not as clear, which is, if you think of the US economy as a pie that can grow.

• 51:26Speaker 02

  I'm not the grow the pie guy here. So your next book hopefully can be called

• 51:29Speaker 01

  Ezra hates, Ezra hates pie metaphors.

• 51:34Speaker 02

  I get it, but it works for people.

• 51:36Logan Bartlett?

  You referenced it in the book of like how a pie metaphor is a shitty metaphor.

• 51:39Speaker 02

  Okay, find a better one, but the general idea of if the pie is bigger, we have more money to redistribute. I just think that concept is so important because it's like we as Democrats can get behind taxing and moving money around within the pie. Like I'm happy to pay slightly higher taxes to help people afford SNAP benefits and Medicaid, totally. But if you think of it as like we have a hundred dollars to move around and we only will ever have a hundred dollars to move around, you lost me. And if you want this to be more effective, you want Medicaid budget to be bigger, if you want SNAP benefits to be bigger, if you want the ability to help bring people up who are poor today, a $200 pie is a lot better than a $100 pie.

• 52:24Speaker 02

  And if we just go back to like growth helps people in need because it gives us more money to redistribute, I actually think you can play to the progressive part of the party, which is really about inequality. At the end of the day, they think it's bullshit that there are really rich people and there are poor people and we should move from one to the other. And that's fine. Like I'm okay with that, but can we at least say lots of really rich people give us more money to move around? And like that little piece of it, I think is missing. They view rich people as bad as opposed to like a source of wealth to move back. That's the key.

• 52:59Speaker 01

  I had to stand up for Ezra here and try to push back against pie metaphors, but I like the general idea. And so the way I would reframe it is a rich welfare state is better than a poor welfare state. Right? Like that's, that's the message. And progressives, the left should, should root for a richer welfare state because the welfare state will grow commensurate to the wealth. And so I don't see, you know, sometimes there's a, there's a tension or, or a fight sometimes in the left over like what to focus on, like should you focus on oligarchy or focus on housing regulation or focus on the? Sometimes I get frustrated, maybe because I'm just an agreeable person who doesn't like

• 53:42Speaker 01

  to fight people that much, because I so see the politics of redistribution and the politics of growth as being two flavors that go well together.

• 53:50Speaker 02

  Yes.

• 53:50Speaker 01

  And two flavors that go so well together that I can't even believe that folks are arguing that chocolate and peanut butter are somehow enemies. It's like, we know they work together. We know that when the economy grows, even with a stable average tax rate, you are inevitably growing the amount of money that is created by income taxes that can be redistributed to people who are lower income. And by the way, when economies grow, low incomes tend to grow as well.

• 54:18Speaker 02

  Please just don't call it a welfare state. Just don't do it. You're gonna lose like 60% of the country with the word welfare. Like, it just can't be in the term. Like, throw that word out. It doesn't exist. Like, maybe he doesn't like pie. He's wrong about that. We should talk to Ezra. Bring him on. He's wrong about the pie metaphor. And the reason the pie metaphor is good is because my seven-year-old can understand it. And like, I'm not calling all Americans seven-year-olds, but there's a lot of us who aren't necessarily like paying attention and they're not always the brightest. Like, if you teach people things that in simple terms, they won't get it. And my seven-year-old knows that the large pie is better than the small pie. And like, welfare redistribution feels like a little bit of a third rail. Maybe it's not a pizza pie.

• 55:01Speaker 01

  I'm just, I'm just, I'm just talking to friends on a podcast.

• 55:04Speaker 02

  Yeah, yeah. This is, he's not running for office.

• 55:06Speaker 01

  You can read that to him later, you know, I.

• 55:08Speaker 02

  Well, let Stephen A. Smith internalize how to communicate this stuff. I was just gonna say, I mean, one, one thing, we were talking about Bernie Sanders, Zach, and I think one of the things that, the amount of people that supported both Bernie and Donald Trump, I think proves how vibe-based a lot of people are on this, where it's an authentic person that wants to blow up the status quo in some ways. And it's actually like, it was interesting, I was listening to Jon Favreau and Sam Harris talking about, you know, the state, sort of postmortem on the election and where we are and all this. And it was interesting, I didn't realize that news consumption and how closely you follow things.

• 55:49Logan Bartlett?

  Actually correlated, the more you watch, the more likely you were to be the Harris voter, the less you watch, the more likely you were to be a Trump voter. And I think there was something so visceral that both Trump and Bernie capture, which is just like the vibe and the sentiment and there's an authenticity to them and they are who they are. And so in some ways, we talk about all these policies and I agree, but it's almost like we need the cult of personality that is just gonna galvanize behind it. Because there's so many things that Trump is doing now that are so antithetical to the, to the previous generation of the Republican Party. But he's captured it and he's, he's made people back into the logic that supports, okay, well, this is what he's doing. And so therefore he's the, he's the person that knows all.

• 56:34Logan Bartlett?

  And so let's figure out what the inputs are that led to that. And so that's the one thing is I feel like similar to Barack Obama, the Democratic Party has this thing of like whose turn it is and the fairness. And no, no, no, it's Hillary's turn. Well, now it's Joe Biden's turn and now it's Kamala's, Kamala's turn. And I think that we just need that cult of personality that's gonna capture people. And whatever the message is, I think they should be able to articulate it rather than, you know, the welfare state or any of those things. They're gonna intuitively nervous.

• 57:01Speaker 01

  They're angry.

• 57:03Logan Bartlett?

  So who's the angrier politician?

• 57:05Speaker 01

  That's the problem. We don't have one. The anger is, anger is a part of it. I also think, and maybe this is a controversial view, like Donald Trump is a bullshitter extraordinaire. But there's something very sincere about his hatred of Democratic liberal elites, right? You, you get this sense that for 40 years, this is the guy from Queens who always felt like he was being held at an arms distance from the Manhattan elite. And he just could not wait to get one over them on the national stage. And it just, it just, it communicates so cleanly to people who themselves feel, whether they live in California, Kentucky, Mississippi, like they also hate the liberal elite and feel like they've gotten one over them for the last few decades.

• 57:49Speaker 01

  And so just as Bernie Sanders is incredibly sincere and incredibly clear about what he finds so distasteful about

• 57:59Speaker 01

  American economics, Donald Trump also underneath all of the bullshit, I think, has this like kernel of sincerity. And for me, like, when I think, not to over extrapolate my own experience, but like, when I think, when I get like really angry, I'm not, I'm pretty stoic anger. But like, for example, like when I had like an absolute aneurysm on CNBC a few days ago, like, that was partly because it was so fucking obvious to me that to root for the stock market to go down, to root for recession, to root for a housing crash, was so freaking stupid that I couldn't believe I was hearing it. And so like, the anger flowed from a clarity of opinion. And what I think someone on the Democratic side needs, if they were going to have like, you know, a moderate running this message and really take it all the way, is that they need to be a true believer, right? This can't be

• 58:44Speaker 01

  someone that we like persuade to change all of their views that they've, you know, communicated the other side of for the last 20 years. And they're like, oh, abundance seems to have some momentum. I guess I'll pretend to be an abundance liberal for a while. No, the voters will smell that. They will smell it on you. And also, by the way, the opposition will be able to drag up a bunch of quotes that are the exact opposite of what you're claiming. We need people who

• 59:05Speaker 02

  They need to

• 59:06Speaker 01

  permanently and automatically, in their bones and in their genes, upset about the fact that Americans know how to build houses and just don't do it. And that we have an unaffordability crisis and Donald Trump's doing the exact opposite of what we need to do. Like, the anger needs to like pour out of them, the indignation, and just has to come naturally. I think it can, because like, a lot of this stuff just does suck.

• 59:25Speaker 02

  I'll tell you where it falls down and why we don't have anyone like this yet. I agree with everything you're saying. We don't have a Democrat that hates the government. We need somebody that fundamentally hates government and believes that like, less government is better. It's not no government, but it's the right amount of government for the right problems, and then get the fuck out of the way, because the best growth engine of the United States is private business. And if you want that pie to be bigger, sorry about the pie analogy, and you want the redistribution that you're going to get, like, the government is primarily the problem in many of these areas. We talked about it in housing. There's so many examples I can give you in healthcare. And people who run in the Democratic primaries and want to be

• 1:00:07Speaker 02

  Democratic leaders love government. And I think that's where you get that tension. Like, it's so easy for me to hate Bernie Sanders, because I fundamentally know he's wrong. But he believes it. He thinks the system is corrupt and fail. All Bernie Sanders wants are fewer jobs and higher prices. He doesn't realize that. And but like, these are the kind of things I think I agree, they have to believe it, but they can't believe that the government creates abundance. And that's my critique of this thing, which is like, the government is the thing that prevents abundance. And it needs to figure out how to get the fuck out of the way. Because central planning, central, this stuff doesn't work. This is the same thing we critique China about. Right? Central planning, same thing we used to critique Russia about and communism, central planning, same idea.

• 1:00:52Speaker 02

  Until we get somebody who's like, oh, man, more government, more rules, more like. I don't think they're going to genuinely believe the kind of things you are saying, because if you read your book, it is, again, it's awesome. And you trace a lot of the source of the problems that you articulate very well. They come back to government. They come back to rules. They come back to regulations. And this is government in a nutshell. And there's. I think that's the gap. And I have not seen somebody in the party, maybe Shapiro at the, you know, at the high end here. Who is really willing to be like, we got to get out of the way.

• 1:01:26Speaker 01

  I think it's less about get the government out of the way. And more empower the government to get shit done. Where is the government's job to get shit done? Right? So I see, for example, in in healthcare, there is an enormous role for government to run not only Medicare and Medicaid, but also maybe play a larger role in offering a public option. When it comes to something like municipal infrastructure. Like, I don't think that the private sector should be exclusively in charge of building roads and bridges and local transit. Like, this is a public good. And the benefit of building good local infrastructure isn't captured by the number of tickets that you're selling on a train. It's captured by the overall municipal domestic growth that happens when you have good transportation that gets people from their houses to work.

• 1:02:11Speaker 01

  So that's another public good. I think energy in many cases can also be a public good. And so I want to empower government to help America get richer. And sometimes that means knowing when to take a step back. And sometimes it means stepping up. Like, we might disagree on the CHIPS and SCIENCE ACT. I think it's worthwhile for the government to subsidize the reshoring of the manufacturing of one of the most important goods in the world that currently is so concentrated in an island just off the coast of our geopolitical nemesis that it doesn't make any sense to just allow the free market to continue to play a role in concentrating high-end semiconductor manufacturing in Taiwan.

• 1:02:51Speaker 02

  But here's the problem with these policies.

• 1:02:54Speaker 01

  The government should sit. But ultimately, what I do agree is that sometimes government needs to understand that if we want energy to be built, or if we want houses to be built, most of those developers are going to be private and most of those energy companies are going to be private. And so we need to write rules that allow the private sector to efficiently produce outcomes that we consider, you know, that I consider liberal and beneficial to the country.

• 1:03:19Speaker 02

  This is where I just like, yes, the government needs to be involved in the military. There are certain places where the government is useful, as like a large insurance company as it relates to Medicare. And it should enable large infrastructure products, projects, in particular, multi-state projects, sure. But then you get into industrial policy like this CHIPS Act, which is, this is the problem with government. You give it tools, it uses tools. And to your own point about the tools we gave the government in the 1970s around regulatory issues in environment, they were not meant to do this. And then someone goes, hey, we've got this tool because government likes to do stuff. And those tools get used and abused and you create crises. And the more tools we give government, the more they will be used.

• 1:03:59Speaker 02

  And so I agree, conceptually, efficient government sounds great, but that's like saying flying pigs sound awesome. It's not a real thing. And I think what you're going to find is any new rules we add in 20 years or in 10 years, they will be abused. And the CHIPS Act is such a perfect example of like the idiocracy of central planning, which is we've decided as a United States government that chip manufacturing, not design, not design, where all the IP really lives, making the chips, the actual like labor jobs on the bottom of the totem pole are the most important thing in semiconductor supply chain. And it is flat out wrong.

• 1:04:39Speaker 02

  Like, you do not get growth in America by putting the chip together at the end, which is what the TSMC facilities that they're building in Arizona are focused on. All of the important chip manufacturing work is in the design. It is in the engineering. It is the stuff that happens in, here's how we design these fabricators. Here's how we quality control them. It sits in Taiwan. Whether they're building it here or not with higher cost labor does not make America more resilient. It doesn't. Plus, you have a supply chain of materials that are global in nature. So who fucking cares about putting it together in Arizona? Even if the world goes to shit, you don't even have the materials to build that chip in Arizona. Why? It's the wrong part of the supply chain.

• 1:05:22Speaker 02

  And the reason this thing doesn't make any sense is because the government decided this. Of course, they got it wrong. They don't understand how any of it, they just want to hand money out. And, and, and it's not that I, this is where the nuance comes in. Do I, would I love the idea of like American dominance, dominance in semiconductors? Absolutely. But we picked the wrong thing to dominate because the government is an inefficient decision-making machine. It makes the wrong decisions consistently over and over. The other thing I would tell you is like, America already dominates in designing chips, right? We have Apple designing chips. We have Google designing chips. We have, Facebook is designing chips right now. You have a small, like, we're really, really good at this. Why did we decide that the last mile labor is the thing that matters?

• 1:06:06Speaker 02

  And it's, it's because you're handing free money out from central planning. That's why I don't like government. I don't like giving them too many tools. Not because I think government is bad, but I think the tools get abused and the decision-making falters. And you have to remember, we put stupid people in charge all the time. We did it. And there's a guy in there right now who's really stupid. And he have a bunch of people around him who are also really stupid. Why do we want to give these people more power? We want to take that power away from them. And this is where I hate, like, United States industrial policy is misguided. It is a waste of money. And it's also the same thing we are complaining about the Chinese doing.

• 1:06:46Speaker 02

  I just like, why is it good when we do it and bad when they do it?

• 1:06:50Speaker 01

  It's a good debate. My preference for industrial policy is on a handful of goods. Semiconductors are absolutely one of them. My, my brief reply would be, I think markets are very good at seeing what part of the supply chain has the most value, right? You mentioned that the value that we want to have in the U.S. is the design of the chips, not their manufacturing. What I think markets are not as good at seeing are low probability geopolitical risks. And the risk of China invading or enacting an embargo around Taiwan and blocking off the U.S. or the world from the manufacturing or supply of the most high-tech chips in the world is a risk so high, but also of such fudgy probability.

• 1:07:34Speaker 02

  But they already make, they already make the chips outside of Taiwan. They already do this.

• 1:07:39Speaker 01

  What's 80, what, what percent of, what percent of the world's highest tech?

• 1:07:43Speaker 02

  But they're, they're putting, they're putting factories, they're putting factories in Europe, they're putting factories in other Asian countries, they are putting factories in the United States. If they invade Taiwan and they take TSMC as a company, your little factory in Arizona doesn't know how to build another factory. The Taiwanese people know how to build the factories. We don't actually have the knowledge. We're like, oh, isn't it amazing? We can do this last mile thing?

• 1:08:05Speaker 01

  Isn't that why, isn't that why we would want to?

• 1:08:07Speaker 02

  No, if you really want to resort, you have to move.

• 1:08:10Speaker 01

  There's an embargo?

• 1:08:11Speaker 02

  No, you have to move all of TSMC. You have to move the design work, know-how, you have to recreate TSMC corporate, right? Like, it's not the labor, it's not the labor. We keep getting this wrong. Like, that's not the hard part. I mean, it's hard, but it's how to use the labor in the first place. It's the architecture of the stuff. And that is not what we are moving to the United States. I agree that it is a giant threat if China comes in and takes Taiwan, which they very well may do. And they basically say, hey, you want to call TSMC and figure out how to like debug this problem in Arizona? And they're like, guess what? TSMC is now the Chinese TSMC. I'm like, they're not fucking answering the phone? That's going to be the problem. And I, I just like.

• 1:08:56Speaker 02

  It's a classic democratic problem. You guys, I say you guys, not really you. They get the problem right, they get the solution wrong. So over and over.

• 1:09:05Speaker 01

  So what's the libertarian market-based solution to distributing TSMC knowledge in such a way that China doesn't hold a choke point in the possible embargo of invasion of Taiwan? What's the market?

• 1:09:19Speaker 02

  Let's give every single Taiwanese person a US passport tomorrow. Every single one of them. If you live in Taiwan, you can move to the United States. Let's, let's brain drain the shit out of them. Right? Let's bring the actual people who know what they're doing to America and one of them will start a competitor. I mean, this is how we got Nvidia, right? We got Jensen to America and he's like, oh, maybe I should start a, you know.

• 1:09:42Speaker 01

  Especially like you want to import the knowledge of TSMC.

• 1:09:46Speaker 02

  The knowledge.

• 1:09:47Speaker 01

  You don't want to, but like, I, I feel like that's part of the goal of the Chips in Science Act is to import the knowledge of TSMC.

• 1:09:53Speaker 02

  No, it's not. The Chips in Science Act is the construction act. It's a, it's a, it's a giant subsidized construction act. And it's just like, again, right problem, wrong solution. By the way, it's going to hand a whole bunch of money to Intel. Intel is not the solution. Like, what we really want to do is if you want to like have new chip design here, get the people who know how to start these companies and get them to America, give them access to talent, give them access to cheap real estate for that talent, give them good healthcare. Like, we are a knowledge economy. And the manufacturing part of this is important, but it's the last mile. If you don't do the knowledge part, the last mile doesn't matter. And we keep focusing on the, the, the last piece of this and not the hard part. You want more chip design companies here?

• 1:10:38Speaker 02

  Get the people who know how to do it. Give them, give them safety and security.

• 1:10:40Speaker 01

  Well, we, we agree about this. There, there is a combination of explicit and tacit knowledge embedded in the work of designing and manufacturing the most high-tech chips in the world. And the US, I think, should have a strategy to de-risk ourselves by moving some of that to the US or to other friendly neighbors.

• 1:11:04Speaker 02

  I agree, but the sum of that is not a physical, it's not a physical thing. We're not moving a physical thing. It's people. It's people, the knowledge of how to design that facility in Arizona. And they did a really good job, by the way, like they actually built it. It's producing chips. Like it blew my mind. I didn't think that TSMC would be able to pull this off, but like, man, Taiwan and the people in Taiwan are absolutely incredible people because they're constantly under threat of war. And so they're really fucking creative and wise. It's like Israelis, you know, it's like when everybody around you hates you, like you, you show up, right? Like these, these economies are very similar in that way, which is like they're tiny, small nations constantly under threat. And that's why they innovate. And if you want to have the actual knowledge of how to build that facility, it's not the people in the facility. It's the people who

• 1:11:49Speaker 02

  designed it and they're not here.

• 1:11:51Speaker 01

  We agree that we agree that the status quo is too high risk and that we need a policy intervention. We disagree about how exactly that policy intervention works, whether it's sort of fiscal subsidies, or whether it's just a bunch of, you know, gold cards to get.

• 1:12:03Speaker 02

  Well, the other thing we disagree about is that the CHIPS Act is good because there's like diversity requirements in the hiring of the people to build, like, come on.

• 1:12:10Speaker 01

  We explicitly, we explicitly say that, that the implementation of the CHIPS and Science Act had a bunch of problems in, in abundance.

• 1:12:15Speaker 02

  Wait, you're telling me that government implementation is bad? So surprising.

• 1:12:20Speaker 01

  I, I'm the person telling you the government does, is important for certain purposes, but often achieves those purposes through bad ends. Yes.

• 1:12:28Speaker 02

  Yes, yes, that's my problem.

• 1:12:30Logan Bartlett?

  I know, I know you ran long with us here. I feel like we could go for another two hours, maybe, maybe another time we will do that. But yeah, thanks for, thanks.

• 1:12:39Speaker 01

  I was, I was worried in the first five minutes that you were going to agree about everything. So it was, it was, it was fun to be able to spar.

• 1:12:43Speaker 02

  Yeah. Well, I think, I think one thing you guys nailed. As a Democrat, you know, actually he's a libertarian. No, I think, I think the thing that's most important that you guys nailed, and I do, I do really like it, is like, we have to think about more stuff. And we got away from this, like the Democratic Party was like, how do we move the stuff around? And as opposed to creating more stuff. And that is a really important point in, in the book. I think it's, I think it's really, really good. And like, that plus the identification of like mostly housing is the only thing.

• 1:13:18Speaker 02

  I fundamentally agree with that. By the way, one of the biggest problems we have, here's like a real example, I know you have to jump. New York City, where I live, so we have a, you know, I run a biotech fund, it's a billion dollar biotech fund. All of our people are in Boston. Are in Boston. And everybody's like, why aren't there more biotechs in New York? And I can tell you exactly why. Because if you want to be an incredible scientist, in particular a chemist or a biologist, is what you need for drug discovery. You don't make a dollar until you're like 34. Because you have to go to school, you have to go to your PhD, you have to go to your postdoc, and you have to write a postdoc, you're in your 30s. And through that entire time, you make like $25,000. Where the fuck in New York City are you gonna live on 25? It doesn't work.

• 1:14:02Speaker 02

  And so actually, my honest argument, because I've been asked by like people who work for the city of New York of like, how do we get more biotech in here? And I'm like, cheap housing. Because they can't live here. And then if you live in Queens, or you live in Westchester, New York, the commute is such a bad commute, you're like an hour away from the city. In Boston, I don't know if you've spent any time in Boston, you can be 40 minutes outside of Boston and rent a pretty nice apartment for like a thousand bucks a month. And you can commute in, and so like, Boston has just done a decent job of like, making being a postdoc a decent lifestyle, and so then they all accumulate there. And it's really, really difficult to get people from Boston to New York because of the money. Because of the cost. We have plenty of smart people, we have a much cooler.

• 1:14:46Speaker 02

  If you've ever been to Boston, it's the most boring city in the world. So boring. Oh my God. Everything shuts down at 11, the food sucks. Like, but they live there. They live there. So I view it as a housing problem at its core. It's not like we don't have good ideas and universities here. We have a lot of universities. We just, we just, it's so, I mean, I paid like $400,000 a year to live in my own apartment. That I own, that I own.

• 1:15:13Logan Bartlett?

  We'll bleep that amount out here.

• 1:15:15Speaker 02

  No, I don't care. Feel free to share that with the world. I mean, it's not 400, but it's like, it's like 250 or something. And that is the taxes on the thing I already own.

• 1:15:24Logan Bartlett?

  Right, yeah. All right. Well, Derek, thanks for doing this. I'm gonna press stop here.