0:03

Hello and

0:06

welcome to

0:10

another episode

0:13

of Radio

0:17

Warner. The

0:20

day today is

0:23

April 24th, 2025.

0:25

And this is

0:28

episode 517. I

0:30

am the co-host,

0:33

Mark Ames, out here in

0:35

Western New York. You're listening

0:37

to Radio Warner. Subscribe at

0:40

patreon.com/Radio Warner. And I'm on

0:42

the line with the Warner

0:44

John Dolan, aka Gary Bretcher

0:47

in Merida. John, how you

0:49

doing? I'm doing way better,

0:52

you know, like I'm keeping

0:54

track by the mosquito bites

0:56

and uh... I've only had

0:59

two in the last 24

1:01

hours, so I'm doing really

1:03

well. And plus, thanks to

1:06

everyone who had additional solutions

1:08

to my extremely hot

1:10

water on the skin

1:13

solution. In fact, someone

1:15

suggested heat a fork and

1:17

then let it cool off

1:19

a little. It's not as

1:21

painful as scalding yourself. So

1:24

I'm totally willing to try

1:26

that. Aren't there medicines too?

1:28

I developed an allergy to

1:30

some kind of mosquito that

1:32

would sometimes bite me like

1:34

along the East River in

1:36

Manhattan. They would kind of seem

1:38

to be there, but maybe even in

1:41

Las Vegas. I don't know, there was

1:43

some kind of mosquito that

1:45

was causing my whelts to

1:47

like grow the size of a baseball.

1:49

And so I got some kind of topical

1:52

cream in it and it worked like magic

1:54

like and I could never find what it

1:56

was again. I wish you could because I've

1:58

tried a dozen of them and they do

2:00

nothing. I mean, so I

2:02

quickly wipe them off and say,

2:05

the hell with it, I'm going

2:07

nuclear, can you boil some water

2:09

in the microwave? I mean, you

2:12

do really want to make them

2:14

hurt, like leaches suddenly sound like

2:17

a good option, like that'll teach

2:19

it. Yeah, but anyways, before we

2:21

get to our guest, I just

2:24

want to say a quick word

2:26

about the death of... Dave Thomas,

2:28

the lead singer, front man

2:30

for the great band, Perubu.

2:32

Yeah, he just died. It's

2:34

another bummer. This, you know, one

2:37

of the things about having this

2:39

show over 10 years, we get

2:41

to see people who influenced

2:43

us who we really like dying

2:45

throughout. Perubu was, actually John,

2:48

it was you who first

2:50

got me into them. I'd sort of

2:52

heard of them, I didn't know them

2:54

too well, and... You turned me

2:56

on to Final Solution and

2:58

30 days over Tokyo, Heart

3:00

of Darkness, those early pre,

3:03

you know, before Sex Pistols,

3:05

kind of, it was like

3:07

this weird pre-punk music

3:09

that I swear there would be no

3:11

joy division three years later

3:14

without whatever sound they developed,

3:16

you know. It was, it

3:18

was part of punk, I

3:21

mean, it was a component,

3:23

that is, of punk, but...

3:25

It had none of the

3:27

usually false ferocity of full-on

3:30

punk. Dave Thomas, Peruba,

3:32

they weren't, people would even

3:34

pretend to be able to

3:37

beat you up. They were

3:39

very much victims. And they

3:41

sang that way. I mean,

3:44

his voice was a yelp,

3:46

but it was a very

3:48

smart yelp. Yeah, and he had

3:50

that song that I was always thinking

3:53

of trying to ask per oob, I know

3:55

if we could one time use it

3:57

Non-alignment packed, which I thought would be

3:59

a great sort of theme song

4:01

for Radio Warner. It was.

4:03

Yeah. And just the way

4:06

they sing that in their

4:08

nasal chorus. You better sign

4:10

it. And it's, by the

4:12

way, it's about pining for

4:14

a woman who doesn't. pay

4:16

attention to him it's all

4:18

it's a lot it's a

4:20

love song it's a great

4:22

song we saw a pair of ubu

4:25

in the late 80s they went like

4:27

they went very they went too deep

4:29

in my opinion into avant-garde

4:31

for a while like that real

4:33

kind of avant-garde jazz where it's

4:36

like we're gonna completely deconstruct the

4:38

song so there's no song anymore

4:40

and yeah a fly a fly

4:42

or something out of my right

4:44

I'm sorry Dave Thomas. Yeah, all

4:47

these guys who knew were named

4:49

Thomas. It's like the worst curse

4:51

you can have because it makes

4:53

you invisible somehow. I know. So

4:56

I think somebody pointed out the

4:58

Wendy's guy, the guy who founded

5:00

Wendy's was named Dave Thomas, I

5:02

think or something. And then of

5:04

course, there's the SCTV guy. But yeah,

5:07

we saw him in concert. And by

5:09

then they went back to.

5:11

constructing songs and because

5:13

they're so wild when

5:15

they put together like

5:17

a kind of pop song it

5:19

sounds so new and so like

5:21

I don't know it's just exciting

5:24

and fresh well yeah their

5:26

pop song at that time

5:28

was waiting for Mary yes

5:31

yeah that was a beautiful

5:33

song yeah even though it

5:35

was it was just about waiting

5:37

for somebody who wasn't showing up

5:39

at that a cafe or whatever

5:42

but they were yeah but it

5:44

was the when world's collide tour

5:47

yes i remember yes yeah

5:49

we went together and he was

5:51

great live I mean he had

5:53

so much is this big you

5:55

know big very big very

5:57

overweight fat guy very curious

5:59

like on stage he's just he's

6:02

in his own world and it

6:04

was just so much fun to

6:06

watch and he's such a great

6:09

voice and they were all kind

6:11

of like doing their own thing

6:13

in their own direction but it

6:16

all mashed together really well it

6:18

was great and for once they

6:20

they had a good crowd yes

6:23

they were pretty popular at that

6:25

time yeah so rest in power

6:27

to Dave Thomas I mean he

6:30

didn't look very healthy so no

6:32

making it to 71 yeah in

6:34

newspaper speak kudos or whatever. Yeah,

6:37

yeah, he beat the odds. Okay,

6:39

so today we have with us

6:41

friend of the show, returning back

6:44

to the show, Jeff Stein to

6:46

talk about. The shit show that

6:48

is the global economy and the

6:51

Trump policy Jeff is the White

6:53

House economics reporter for the Washington

6:55

Post He also has a podcast

6:58

American carnage about the history of

7:00

political violence in America his first

7:02

series great series on John Brown.

7:05

We did a an episode with

7:07

Jeff episode 446 on John Brown.

7:09

So So we're really happy to

7:12

have him back on because, I

7:14

mean, what great timing for Jeff

7:16

to move, well, I guess you've

7:19

always done or often have done

7:21

some form of economics reporting, but

7:23

first of all, Jeff, thanks for

7:26

coming back on the show. Hey,

7:28

thanks for having me. The John

7:30

Brown series was the first and

7:33

only one right now, but maybe

7:35

Peraubu could be the second one.

7:37

Yeah, I have a feeling you're

7:40

not going to have a whole

7:42

lot of time for another series

7:44

anytime soon given the B. I

7:47

know. Yeah, I'm not sure what

7:49

the conversation with my editors would

7:51

be like if I was in

7:54

the middle of the biggest trade

7:56

war in 100 years and like

7:58

I actually need to spend four

8:01

months studying some. who's been dead

8:03

for, you know, 180 years or

8:05

whatever it is. A lot of

8:07

books. Yeah. So let's, I mean,

8:10

before we get into the bigger

8:12

issues, I mean, let's do the

8:14

sort of the journalism thing here

8:17

and start with the story that,

8:19

the one you just broke today

8:21

anyway, which is about the impact

8:24

that China's basically, I don't know,

8:26

embargo on rare earths to the

8:28

US or to anybody who might.

8:31

you know, ferry them via them

8:33

to the US. And the concern

8:35

this is causing in the Trump

8:38

administration, which for some reason didn't

8:40

foresee this happening, which is mind

8:42

blowing, but can you fill in

8:45

listeners into what China did, what

8:47

they banned? And you know, what,

8:49

because I have a friend who

8:52

an old friend who's done very

8:54

well at the executive sort of

8:56

level and kind of in the

8:59

tech industry and and he's kind

9:01

of he swings between being an

9:03

American nationalist and I fuck them

9:06

all they all suck and when

9:08

when this news came out and

9:10

I sent it to him he

9:13

said that was smart that's gonna

9:15

hurt I mean when at first

9:17

when smart of the Chinese I

9:20

mean yeah he said yeah that's

9:22

actually smart of them that's actually

9:24

gonna hurt That was the first

9:27

and he usually doesn't like conceding

9:29

those kind of things but he

9:31

was in a very laconic way

9:34

said that so why don't you

9:36

could you tell us about what

9:38

happened and what's going on with

9:41

that. Yeah so as your listeners

9:43

will not be aware there's been

9:45

an escalating trade war between the

9:48

US and China Trump's initial sort

9:50

of. Liberation Day, quote unquote, on

9:52

April 2nd was about hitting every

9:55

country essentially in the world with

9:57

massive tariffs. That was plunging the

9:59

stock market into oblivion and so

10:02

he pivoted. and said, let's, you

10:04

know, let's pull that back. We're

10:06

not going to actually do that.

10:09

But I think in part to

10:11

say face, he said, well, since

10:13

we're not going to hit every

10:16

country in the face, what if

10:18

we just hit China even harder?

10:20

That seemed to be the way

10:23

they were like, oh, it's not

10:25

a pullback. It's us just attacking

10:27

China. Right. It was a three-dimensional

10:30

chess move, right? It was like,

10:32

actually, I meant to do this

10:34

all this all along. you know

10:37

to build the coalition against China

10:39

the first thing we had to

10:41

do was deliberately antagonize every other

10:43

country and so they you know

10:46

say what you will about their

10:48

campaign plans but what they where

10:50

they ended up is nothing close

10:53

to the campaign plans that were

10:55

already viewed as as really dramatic

10:57

so they talked about you know

11:00

60 70% tariffs on China, which

11:02

were astronomical, but where they've ended

11:04

up as they pivoted away and

11:07

try to save face, I think

11:09

it's fair to say from their

11:11

terrifying everyone was over 145% tariffs

11:14

on China. And when you do

11:16

something called stacking, basically like you

11:18

you say that some imports will

11:21

are subject now to multiple iterations

11:23

of the tariffs and because they

11:25

stack on top of each other

11:28

some imports are like 245% which

11:30

is effectively an embargo and so

11:32

China has been you know thinking

11:35

about how to hit the US

11:37

back and earlier this month it's

11:39

been a few weeks imposed Basically

11:42

a blockade on exports of these

11:44

critical minerals called rare earths. And

11:46

it's, I'm not an expert in

11:49

this space. I sort of cover

11:51

more general economic stuff. So there

11:53

are, you know, experts who understand,

11:56

you know. took their chemistry classes

11:58

and didn't skip them in college,

12:00

unlike me. But essentially, these rare

12:03

earths are not rare. They're actually

12:05

in pretty generous supply in much

12:07

of the world, including the US.

12:10

What is in short supply, however,

12:12

is the processing for these rare

12:14

earths, and those materials, once they

12:17

come out of production, are really

12:19

essential to a whole range of

12:21

stuff. The defense sort of military

12:24

complex guys are freaking out because

12:26

they're needed for drones and for

12:28

batteries that they use, but this

12:31

is also really important stuff for

12:33

MRI machines and EVs and other

12:35

sort of consumer electronic and health

12:38

care things. you know, equipment. And

12:40

so China was quite savvy to

12:42

hit that sort of vulnerability for

12:45

the US, which we've known about,

12:47

you know, like for a long

12:49

time. And our story was about

12:52

sort of people in the White

12:54

House looking at each other and

12:56

saying, guys like this. going to

12:59

be pretty bad in a few

13:01

months because we have really only

13:03

a couple months before the stockpiles

13:06

that companies have run out and

13:08

there's you know private sector estimates

13:10

that this is hundreds of billions

13:12

of dollars in damage and most

13:15

importantly you know the Chinese know

13:17

this they know that that this

13:19

is a huge vulnerability that they've

13:22

cut off and you know some

13:24

of the people I've spoken to

13:26

think that it explains why Trump

13:29

has been saying oh we're going

13:31

to reach a great deal any

13:33

day now. Except that he goes

13:36

back and forth, right? The Chinese

13:38

say there's been no talks whatsoever

13:40

so far. And he's, I mean,

13:43

this is the thing about Trump.

13:45

It's so funny that, you know,

13:47

supposedly the markets, the great predictor,

13:50

the rational, you know, priser of

13:52

goods and information means just spikes

13:54

massively. one way or the other

13:57

based on what side of the

13:59

bed Trump woke up on next

14:01

and and like within a day

14:04

he'll say oh I'm not going

14:06

to play hardball with them and

14:08

then but I'm not going to

14:11

change the tariffs it's almost I

14:13

don't know if he's having fun

14:15

with it or if it's just

14:18

just the chaos of like doing

14:20

things on the fly yeah I

14:22

mean I think if you read

14:25

the art of the deal I

14:27

don't know if you guys have

14:29

had a reading group on. No,

14:32

I'm afraid not. We should, but

14:34

you know, that would be too

14:36

much homework. Really, too much homework.

14:39

There aren't a lot of complicated

14:41

senses. That can be much more

14:43

painful. Yes, exactly. That's the problem

14:46

here. His whole worldview is essentially

14:48

like you. You stake maximal claims

14:50

and you let the other person

14:53

think that you're in fact nuts

14:55

Like that's like like the articulated

14:57

worldview of Donald Trump fat goes

15:00

back to Nixon Yeah, I Let

15:02

him let the Vietnamese think I'm

15:04

a lunatic you know and Henry

15:07

will try to be my conciliary

15:09

whose sane and moderate and They'll

15:11

think that if he fails, I'll

15:14

be unleashed against them. I'm not

15:16

sure it really worked against the

15:18

Vietnamese. Yeah, I'm not sure it

15:21

ever worked, but Washington, there is

15:23

a faction of people who study

15:25

international relations or people in Washington,

15:28

because you see their articles in

15:30

like foreign policy magazine all the

15:32

time, he's playing mad dog. You

15:35

know, it's brilliant. And like, yeah,

15:37

I wonder if it ever actually,

15:39

it may work in business. depending

15:42

on who you're putting the squeeze

15:44

on, but I'm not sure it

15:46

works in international relations. And as

15:48

you're saying, Mark, I mean, they

15:51

have these two sort of overriding

15:53

objectives that are just. completely intention.

15:55

One is Trump's desire to make

15:58

everyone think that he's a madman

16:00

and the other to not instantaneously

16:02

vaporize the global economy for no

16:05

reason. So you see these moments

16:07

where, you know, Secretary Scott Bessent

16:09

or Howard Lutnik or some advisor

16:12

that is hearing, you know, their

16:14

buddies on Wall Street screaming bloody

16:16

murder and say, hey, can you

16:19

guys make clear that you're not

16:21

going to vaporize the economy for

16:23

no reason? And then the thing

16:26

is, if they say that, it's

16:28

completely undermining the Trump, you know,

16:30

game plan here. Yeah, the entire

16:33

bluff that's motivating this strategy. And

16:35

so the ping ponging back between

16:37

those two sort of articulations of

16:40

their strategy has created this like

16:42

sort of ceaseless whirligigigig of activity.

16:44

I mean, I think to me,

16:47

you know, there's a lot of

16:49

obviously like economic financial policy to

16:51

discuss here, but at the core

16:54

of this is kind of this

16:56

is kind of a a view

16:58

of human nature that I think

17:01

is really quite profoundly different than

17:03

I think a lot of people

17:05

are taught in school or raised

17:08

by their parents. I mean, Trump

17:10

really has it in his head

17:12

that the way that human affairs

17:15

should be conducted is as the

17:17

zero-sum. negotiation where if you are

17:19

not trying to maximally exert your

17:22

force and your dominance over the

17:24

person or entity you're interacting with,

17:26

you're going to be taking advantage

17:29

of and treated for a sucker

17:31

and whatever else you think about

17:33

sort of his critiques of the

17:36

global financial system, which I do

17:38

think are kind of interesting in

17:40

some ways, the idea that they

17:43

need to be rectified by maximal

17:45

agreement. Russian is a, I don't

17:47

know, it's at least sort of

17:50

a Hobbsian view of how humans

17:52

interact in the state of nature.

17:54

Especially with China. I mean, China

17:57

above all seems to be a

17:59

patient power, a patient player in

18:01

the great game. Did you guys

18:04

see Trump said, you know, we're

18:06

working with the Chinese on working

18:08

on getting a deal and then

18:11

I think it was 12 hours

18:13

later, the Chinese said. We haven't

18:15

had a conversation with them. I

18:17

had a very funny interaction. They

18:20

don't think they want to have

18:22

a conversation under these circumstances as

18:24

far as I can. Yeah, I

18:27

mean, I think they think they

18:29

have all the cards. I think,

18:31

you know, maybe some of that

18:34

is overstated. Like, but you know,

18:36

there's a, it's a, there's no

18:38

elections in China. What are they

18:41

worried about? Yeah, exactly. But they

18:43

also don't want to be like

18:45

they know that. Trump doing Mad

18:48

Dog, it's not like they haven't

18:50

studied Mad Dog theory too. It's

18:52

like the idea that Mad Dog

18:55

works assumes that nobody else in

18:57

the world knows about it. It's

18:59

such an important point because it's

19:02

not just no one else in

19:04

the world, but also, like I

19:06

don't know, maybe my access isn't

19:09

as good as it should be,

19:11

but like the administration officials that

19:13

are still speaking to us or

19:16

themselves, like not sure. Like not

19:18

only do they not know what

19:20

the White House's attitude is. They

19:23

don't know what Trump wants. And

19:25

so it's this like, you know,

19:27

guys know the Spider-Man meme where

19:30

everyone's just kind of pointing at

19:32

each other. It's like. It's like

19:34

all everyone's doing in Washington, like,

19:37

what are you hearing? Well, what

19:39

are you hearing? What are you

19:41

hearing? I had a meeting yesterday.

19:44

Even the administration people are like,

19:46

Jeff, what are you hearing? What's

19:48

the trouble? In my own industry?

19:51

Exactly right. No, they want to

19:53

know what we're hearing from others.

19:55

And I met with the top

19:58

financial official for US trading partner

20:00

yesterday. And I was excited for

20:02

this meeting because I thought they

20:05

might have some insight into what

20:07

they did. Trump administration was seeking

20:09

in these talks and we sit

20:12

down and the first three questions

20:14

are like well so what do

20:16

you think the Trump people want?

20:19

I'm the journalist. Are you telling

20:21

me what's going on and so

20:23

anyway it's just there's power like

20:26

I've known some really charismatic fascinating

20:28

I'm funny as hell total sociopaths

20:30

and I mean, there's just, there

20:33

is power. Now, it works differently

20:35

when you're dealing with global politics

20:37

and finance, but there is power

20:40

in everybody not knowing exactly what

20:42

you're thinking. It's not mad dog

20:44

so much as, but there is

20:47

power, especially if you have power,

20:49

but on the other hand, and

20:51

so like, I don't want to

20:53

just say that Trump is just

20:56

a crazy man. There is a

20:58

there is a logic to it.

21:00

I bet it's worked for him

21:03

in life in a lot of

21:05

ways, but it's also very easy

21:07

to play in some ways in

21:10

that he's above all Remarkably sensitive

21:12

ego maniacs like to that point.

21:14

I mean, sorry to interrupt you

21:17

John I feel like Democrats are

21:19

eager to avoid like a conversation

21:21

about what they stand for in

21:24

part because they like keep thinking

21:26

Trump will just like destroy the

21:28

economy and then we'll be like

21:31

yes that like takes care of

21:33

like all their political Yeah, we

21:35

don't have to reform a god

21:38

damn thing which is just like

21:40

oh just at some level he's

21:42

showing that like He does not

21:45

want to give Democrats like that

21:47

easy of a play and right

21:49

I think people are like looking

21:52

for this and maybe it will

21:54

happen like I'm not saying it's

21:56

impossible but You know, you look

21:59

at the economic forecast and the

22:01

hard data and we can talk

22:03

about this if you guys are.

22:06

but like there's a lot of

22:08

data that suggests that things are

22:10

falling apart but yes sort of

22:13

like the biggest numbers are still

22:15

like they're they're they're old unfortunately

22:17

so they don't give us the

22:20

most up-to-date accounting of what's happening

22:22

but they they suggest that like

22:24

you know there's a chance a

22:27

good chance that he muddles through

22:29

and there's not I mean I

22:31

think people are looking for like

22:34

the 2020 or the 2008 moment

22:36

where like people are jumping out

22:38

of buildings and like the whole

22:41

economy freezing goes to 20 and

22:43

it's like That expectation might not

22:45

come to fruition and and Democrats

22:48

who are pinning their hopes on

22:50

that might be in for a

22:52

rude awakening because there's like You

22:55

know he as we're discussing like

22:57

he is keeping his cards close

22:59

enough to the best that maybe

23:02

he will kind of pull back

23:04

enough to keep things from blowing

23:06

up. Maybe they clearly have rejected

23:09

the other and very obvious option

23:11

which is move left be the

23:13

next FDR, or a collective FDR,

23:16

and tap the rage of the

23:18

American populace. And it goes right

23:20

across party lines. Like when Luigi

23:22

shot that health guy, there was

23:25

so much rage right across the

23:27

spectrum. And they could not wait

23:29

to disavow that and to scold

23:32

everyone for that. So they're very

23:34

frightened about upholding their natural constituency.

23:36

They'll do anything to avoid that.

23:39

So yeah, it's nice having a

23:41

patsy like that as an opposition.

23:43

John, I'm sorry that I won't

23:46

be seeing you around the MSMBC

23:48

Green Room, you know, I'm sure

23:50

that would be a real tragic

23:53

blow for you. Luckily I'm not

23:55

very photogenic either, so I'm just

23:57

qualified on many grounds. Getting

24:00

back to this, so, you

24:02

know, you've written a lot

24:04

about, I mean, it's interesting

24:06

because last year you put

24:08

out this big great series

24:11

on the rise and development

24:13

of this whole economic sanctions

24:15

warfare, or economic sanctions like

24:17

regime, which had its beginnings

24:19

and then, you know, expanded

24:21

massively this century. in the

24:23

21st century. And Trump comes

24:25

in, and you also, so

24:28

you had done that last

24:30

year, and then you were

24:32

also following Trump, I think,

24:34

at least on the economic

24:36

side on the campaign trail.

24:38

And I recall you saying,

24:40

you know, Trump's serious about

24:42

tariffs, and nobody else seemed

24:45

to take it all hugely

24:47

seriously. It was that thing.

24:49

Yeah. And I mean, there

24:51

are guys on Wall Street.

24:53

or on DC both, sort

24:55

of consultants, and like they

24:57

get paid, you know, like

24:59

four or five times my

25:02

salary to be like, what

25:04

is Trump gonna do? And

25:06

they were all like putting

25:08

out reports that were like,

25:10

and I know some of

25:12

these people, they're like, like,

25:14

he's bluffing, like, this is

25:16

a joke, like, don't worry

25:19

about it, like, yeah, there

25:21

might be a little turbulence,

25:23

but like, he's not that

25:25

serious about it and will

25:27

be talked down. You know,

25:29

like, I can't even imagine

25:31

the word tariffs unless I

25:33

imagine a guilt-edged page with

25:36

a giant tea that has

25:38

Victorian lettering. And I just

25:40

think of it as something

25:42

from the late 19th century,

25:44

the tariff, the tariff question.

25:46

And my eyes glaze over.

25:48

And I expect in that

25:50

way maybe I'm a typical

25:53

boomer like. There can't be

25:55

tariffs now. It's not back

25:57

then. Yeah. It's, yeah, I

25:59

mean, all of the things

26:01

that we've heard is that.

26:03

Trump is just obsessed with

26:05

William McKinley and thinks, I

26:07

mean, he said this publicly

26:09

a number of times, that

26:12

he thinks America was, you

26:14

know, relatively at its wealthiest

26:16

in the 1890s. Yeah. And

26:18

that the income tax is

26:20

what is when everything started

26:22

to go to hell. Totally.

26:24

Yeah. But I think sort

26:26

of to try to link

26:29

together what you're saying, Mark,

26:31

is yeah, these these tools,

26:33

tariffs and sanctions are. really

26:35

an expression of economic power

26:37

by the US and you

26:39

know I've gotten in trouble

26:41

for for saying this in

26:43

some other forums but I

26:46

do think it's clear that

26:48

that while the US has

26:50

not ceased military action anywhere

26:52

by any stretch of the

26:54

imagination there has been a

26:56

pullback from Iraq and Afghanistan

26:58

and that was part of

27:00

the thesis of our story

27:03

is that as the disasters

27:05

of Iraq and Afghanistan really

27:07

impressed themselves on American presidents

27:09

that there were huge visible

27:11

both sort of financial and

27:13

political downsides to the sort

27:15

of visible destruction of sending

27:17

American troops abroad there's been

27:20

this pivot towards economic forms

27:22

which has in their sort

27:24

of opacity and their, the

27:26

way in which they sort

27:28

of disguise and hide their

27:30

most visible impact has allowed

27:32

them to expand and expand.

27:34

I have, I just pulled

27:37

up the story we did

27:39

last year. If you guys

27:41

don't, I just want to

27:43

quickly read. This is a

27:45

number, this is a partial,

27:47

partial list of countries the

27:49

US has imposed economic sanctions

27:51

on. Iran, North Korea, Venezuela,

27:54

Syria, Cuba, Yemen, Afghanistan, Russia,

27:56

China, Burma, Burma, Burma, Libya,

27:58

Sudan, Congo. So I mean,

28:00

that's just a partial list

28:02

of how, you know, dramatic

28:04

our sanctions regime is and how

28:06

sort of because sanctions and as

28:08

you were saying, John tariff, they

28:11

can sound so boring and technical

28:13

and so much less interesting than

28:15

war. We just have done so

28:17

much of it because in part

28:19

because of that, but it can

28:21

still be incredibly impactful. Yeah, I

28:24

mean, the blowback from what you

28:26

also wrote about like in your

28:28

series, your entry on. on Venezuela

28:31

is the blowback of these sanctions

28:34

and the blowback there of

28:36

course was yeah Trump and

28:38

Obama made the Venezuelan economy

28:40

scream but it didn't get

28:43

rid of Maduro and instead

28:45

what it did was it

28:47

forced out many millions of

28:49

Venezuelans many of whom made

28:52

their way to the US

28:54

which which then you know

28:56

exacerbated the whole the politics

28:59

of anti-immigration, which

29:01

actually, you know, makes it kind

29:03

of horrible sense then for, I

29:05

know this wasn't Trump's intention,

29:08

but ultimately it worked for,

29:10

it worked, it was like a bomb

29:12

that Trump set off, a delayed fused

29:14

bomb, because that really came to the

29:16

fore more in the early. more in

29:19

the Biden administration, I think, that

29:21

sort of immigration bomb. So it

29:23

helped get Trump reelected, ultimately, weirdly

29:25

enough. Yeah, that's amazing. I mean,

29:27

one of the facts that really

29:29

stuck with me, where you kind

29:31

of like want to see someone

29:33

on the street, you want to

29:36

shake them, like, do you know

29:38

about this? Because most people don't.

29:40

Is that like in Venezuela,

29:42

the economic. collapse was greater than

29:44

any country at peace or at

29:47

war. I mean it was a

29:49

greater economic collapse than

29:51

Iraq in 2003, greater than

29:53

the Great Depression in

29:56

the United States and their

29:58

credible, you know, estimates that

30:01

you know about half of that

30:03

half was due to US sanctions

30:05

according to this one sort of

30:08

very credible Harvard trained economists a

30:10

phrase I know you really like

30:12

Peter Navarro my friend yeah I've

30:14

learned I've learned a lot from

30:17

you guys about sort of what

30:19

happened in Russia yeah no

30:21

that Israel is worse because it's

30:23

70 it fell 71% which is

30:25

a 71 I mean it's the

30:28

destruction of an entire country really

30:30

and at a minimum I mean

30:32

forget putting aside the debates about

30:34

the economic you know what part

30:36

of it was caused by sanctions

30:38

at a minimum they didn't force

30:40

Maduro to leave his grip on

30:42

power appears as as firm as

30:45

I don't know if I told

30:47

you this mark but um There was

30:49

a moment in the story where I was

30:51

talking to a number of Trump officials who

30:54

were, you know, fighting me very aggressively and

30:56

saying, look, you're an idiot if you think

30:58

that the economic collapse in Venezuela was due

31:00

to sanctions. And I was saying, look, we

31:03

were saying part of it, you know, and

31:05

we can debate how much of a part

31:07

of it. And a lot of them were

31:09

fighting that a lot of them were fighting

31:12

that, and a lot of them

31:14

were fighting, like, you guys didn't

31:16

hurt the Venezuelan economy. No, of

31:18

course we heard the best of

31:20

the economy. That was the point

31:22

of the sanctions, which was an

31:24

amazing moment, sort of like of

31:26

him saying yes. Like taking a

31:29

victory lap, I think. Yeah, the

31:31

strange thing, and I admit, I'm

31:33

totally ignorant of economics, but

31:36

I would think that if

31:38

you collapse the Venezuelan economy,

31:41

and it's a typical

31:43

Latin American economy,

31:46

with a lot of money

31:48

being held in the pockets

31:50

of a few families,

31:52

that what you get is a

31:54

mass immigration by maybe

31:57

not the top wealthy, but

31:59

the upper. middle class basically

32:01

and that's if anything it's

32:04

going to change the demographics

32:06

of the country for a good long

32:08

time and make it turn leftward

32:10

as the main right-wing funders

32:12

leave yeah it's such a good point

32:15

because there's a lot of

32:17

academic researchers sorry to cut

32:19

you off mark on this point

32:21

precisely where the intention of

32:23

sanctions is to often alter

32:26

the habits or status or

32:28

political actions or policy of

32:30

a regime and yet they are

32:32

often most effective at crippling

32:35

the private sector in part

32:37

because there's you know just

32:39

a fewer transactions

32:41

but the sanctions often also

32:43

create the pretext for government

32:46

officials to step in and

32:48

acquire take over or shut

32:51

down the private sector actors

32:53

that frequently form the sort

32:55

of most important, you know,

32:57

alternate power base to the

33:00

government. And that's the cycle

33:02

we see over and over

33:04

again. North Korea and Syria

33:06

and Lebanon, the forces that

33:08

were supposed to be propped

33:10

up by the sanctions are

33:13

counterintuitively hurt by them. It's

33:15

a really profound and important

33:17

point, I think. Yeah. as we got

33:19

used to using it more and

33:22

more. And yeah, no, I agree.

33:24

I mean, there is, although of

33:26

course the US has a military

33:28

presence and bases, something like, you

33:30

know, 800 plus bases and 100

33:32

and some odd countries, nevertheless, I

33:34

mean, Seth Harp was a guest

33:36

on her show after he got back

33:39

from Ukraine and, you know, he talked

33:41

about this as well, like they, they

33:43

came. I mean, the kind of

33:45

guiding theory now is small footprint

33:47

stuff. No more of these big

33:49

war, at least for now. No

33:51

more these big war, big outlays,

33:54

sort of wars, because they're

33:56

very unpopular at home.

33:58

You try and do things. much more

34:00

quietly and presumably

34:03

less expensive. Use

34:05

special forces and

34:07

particularly prop up

34:09

other regimes to fight

34:11

your enemies like Ukraine,

34:13

you know, against Russia

34:15

or wherever else. But then

34:17

something happened. And, you know,

34:20

you point out in some of

34:22

your articles that even going

34:24

back, I think it was

34:26

you pointed this out that

34:29

Jack Lou who was the city,

34:31

the city bank guy who was

34:33

the last Treasury Secretary

34:35

for Obama and Bob Rubin,

34:37

the Goldman Sachs guy who

34:40

was Clinton's Treasury Secretary. They

34:42

both sort of warned at

34:45

various times, you know, all this

34:47

sanctioning could come back to bite

34:49

us in terms of, I mean,

34:51

it creates incentives for

34:53

countries with the means to

34:55

find other ways of...

34:57

conducting business in the world

35:00

because they have to, you

35:02

know, because otherwise they're at

35:04

our mercy. And I think

35:06

the Ukraine war was a

35:09

big inflection point in this

35:11

because I remember when, you

35:13

know, after Putin's full scale

35:16

invasion and then Biden announced,

35:18

you know, these what

35:20

they called nuclear sanctions

35:22

and the ruble was going to

35:24

be turned to rubble. and all

35:26

this stuff and I listened to

35:29

you know really smart great guy

35:31

Edward Fishman I'm sure you've interviewed

35:33

as well sanctions expert I think

35:35

he just put out a book

35:37

his book it's really good okay

35:39

and but I heard him like

35:41

a month or two on on

35:43

the West Point podcast a modern

35:45

war institute podcast talking about them

35:47

and he like we didn't know

35:49

then that the sanctions were gonna

35:51

fail it's not that they haven't hurt

35:53

Russia they have they have but they

35:56

did not at all achieve what

35:58

we thought they would achieve. And

36:00

they didn't know that at the

36:02

time, that that was what

36:04

was going to happen. And

36:07

what it did was, I

36:09

mean, because the difference here

36:11

is that unlike Iran or

36:14

Zimbabwe or Venezuela

36:16

or whatever, Russia is

36:18

a massive economy which

36:21

provides, you know, huge array

36:23

of vital resources to

36:25

the global economy.

36:27

It's just a much harder country

36:30

to have sanctions work on. And

36:32

instead, what's been happening is, and

36:34

then China saw this, and so

36:36

other countries saw this, and they

36:39

started to realize it's in their

36:41

interest for the sake of sovereignty,

36:43

for their own sovereignty, to find

36:46

workarounds, and it doesn't necessarily

36:48

mean that the dollar is not

36:50

going to be, you know, the

36:52

global reserve currency tomorrow, but you

36:55

do have to find ways. around

36:57

it and they have found ways

36:59

around it. And so now, and

37:01

so what happened with the Russia

37:03

sanctions is they've actually hurt proportionally

37:06

or in terms of like intention.

37:08

They've hurt Europe a lot more than

37:10

they hurt Russia. Like Russia's been able

37:12

to switch to military Keynesianism,

37:14

grow their economy and conduct

37:17

the war how they've wanted

37:19

to, whereas Germany has been

37:21

destabilized because its economy has

37:23

been hit so hard. And

37:25

you know, now you have

37:27

the AFD as the most popular

37:29

party and so on. So

37:32

now you come to China,

37:34

which is, you know, many,

37:36

many scales, bigger, more important,

37:38

run better economy

37:41

than Russia's. And you have,

37:43

I mean, I guess I'm

37:45

just wondering if this is, if

37:48

we're coming to that point

37:50

in the whole sanctions weaponry

37:53

where I mean so far firing off these

37:55

tariff sanctions what's happening is like what

37:57

happened with Russia sanctions to Germany but

37:59

on another scale. It's actually coming

38:02

back to, this is supposed to

38:04

be a weapon that is a

38:06

painless weapon for us. And it's

38:08

turning out to cause enormous pain.

38:11

So I'm wondering if like we're

38:13

looking at possibly, I don't know,

38:15

the breakdown of this powerful weapon

38:17

or not. Yeah, there's a lot

38:19

there. You know, when I was

38:22

writing the series, I went for

38:24

drinks with a friend who's a

38:26

school teacher, elementary school. I was

38:28

explaining a sort of what you

38:31

were just talking about and he

38:33

said, you know, like, you know,

38:35

for me, when I have, like,

38:37

like kids who are misbehaving, the

38:40

most important thing is if you're

38:42

going to put a group of

38:44

kids in time out, you don't

38:46

put, like, the bad kids together

38:49

in time out. I was like,

38:51

that's actually a very good comparison

38:53

because... If the US continues to

38:55

cut all these entities or all

38:57

these countries that it doesn't like

39:00

out of the global financial system,

39:02

they are going to, you know,

39:04

from the US perspective, just work

39:06

together to create havoc. We've all

39:09

seen Breakfast Club and what happened

39:11

in Germany. thing to forecast, a

39:13

lot of different directions we can

39:15

take this, but you know, the

39:18

Trump administration is making a critique.

39:20

This is Stephen Moran, who's the

39:22

head of the White House Council

39:24

of Economic Advisers, has been sort

39:27

of the most forthright, but the

39:29

Treasury has also been saying this,

39:31

I don't think Trump quite has

39:33

the financial language to say this,

39:35

but he has sort of gestured

39:38

in this direction where you know

39:40

the u.s. and this is what

39:42

really has enabled the sanctions regime

39:44

to be as powerful as it

39:47

is America's dollar is sort of

39:49

unrivaled as the as the world

39:51

sort of safe asset. And, you

39:53

know, what that, what the sort

39:56

of the reason for that is

39:58

that, you know, in the aftermath

40:00

of the collapse of the Soviet

40:02

Union, there really wasn't a country

40:05

that had anywhere near our degree

40:07

of military and economic power. And

40:09

what it meant was that sort

40:11

of like the pound sterling at

40:14

the heyday of the British Empire

40:16

was if you want in anywhere

40:18

in the world. either to conduct

40:20

transactions that can be easily measured

40:22

or you want to, you know,

40:25

if you're a developing country and

40:27

you want to make sure your

40:29

bank is, you know, not just

40:31

dependent on your currency but has

40:34

something very safe, you buy dollars

40:36

and the way in which US

40:38

dollars have become the bedrock of

40:40

the global financial system. over the

40:43

last, you know, really from, from

40:45

the 1980s and 90s onwards, accelerating

40:47

to be sort of, sort of,

40:49

sort of what everyone uses to

40:52

trade and store their safe, you

40:54

know, the rainy day funds the

40:56

world over, that has given the

40:58

US this incredible power because to

41:00

access dollars, you need to. work

41:03

through banks that are subject to

41:05

regulations by the US Treasury Department

41:07

and its sanctions regime. So that

41:09

has given us an incredible sort

41:12

of penopticon like ability to look

41:14

into, you know, and sort of

41:16

dictate terms for banks and people

41:18

and countries all over the world.

41:21

A US sanction, you know, I

41:23

talked to sort of, it was

41:25

the kids of a Serbian, this

41:27

is a long time, I got

41:30

this reporting, so forgive me, but

41:32

a Serbian warlord. the whole family

41:34

had been sanctioned as a result

41:36

of the attempts to prevent him

41:38

from circumventing the sanctions by giving

41:41

his money to his family. And

41:43

so I was talking to this

41:45

woman, her husband's been in jail

41:47

for 20 years and neither she

41:50

nor her kids. can open a

41:52

bank account even in Serbia, which

41:54

is not, you know, it's not

41:56

like a US bank, but the

41:59

Serbian bank is so dependent on

42:01

ties to the Western financial system

42:03

that the US controls, that that

42:05

Serbian bank won't even work with,

42:08

won't even work with this sanctioned

42:10

family, even though the guy's in

42:12

jail. So that gives you sort

42:14

of a granular sense of how

42:16

powerful this tool is because of

42:19

the supremacy of the US dollar.

42:21

and and yet because every bank

42:23

essentially ultimately is going to need

42:25

to do business in dollars and

42:28

so you can't you can't wind

42:30

up on the treasury list correct

42:32

and that that has made i

42:34

mean this is kind of boring

42:37

maybe but no sanctions i mean

42:39

the the fundamental thing about them

42:41

is it's not actually you do

42:43

not need a criminal charge against

42:46

a country or person or an

42:48

entity that's part of why they're

42:50

so easy to impose all you

42:52

need is a designation by treasury

42:54

and the president that they pose

42:57

some degree of threat to the

42:59

US economy or national security and

43:01

there is basically no judicial standard

43:03

there's no you know appeals process

43:06

really within the government you can

43:08

just say I don't like this

43:10

foreigner let's cut them off because

43:12

you're not accusing them of a

43:15

crime you're just saying they shouldn't

43:17

be able to access the dollar-based

43:19

financial system and that is just

43:21

the way the US has set

43:24

it up, unlike some countries and

43:26

unlike the UN, is just incredibly

43:28

easy as a result to impose

43:30

those. And we can talk a

43:32

little bit about that, but the

43:35

sort of flip side in some

43:37

ways of the, if you view

43:39

that dollar sort of power as

43:41

an asset to the US, as

43:44

many like, you know, national security

43:46

types here do, the flip side

43:48

is that by virtue of being

43:50

the world's reserve currency, we have

43:53

a huge imbalance in our trade

43:55

deficit because people across the world

43:57

buy US. capital assets. It makes

43:59

the value of the US dollar

44:02

go up and up and up

44:04

because demand for it is so

44:06

strong across the world. That are

44:08

dollar. I mean, it makes it

44:10

great if you're like, John, and

44:13

you're in New Zealand and wherever

44:15

other countries all the time, the

44:17

dollar gets you a long way.

44:19

But the downside that I think.

44:22

if you give the Trump people

44:24

some credit, they are accurately identifying

44:26

with this system is that it

44:28

is very hard to have a

44:31

manufacturing economy to produce if your

44:33

goods are by virtue of being

44:35

produced with American dollars, much more

44:37

expensive. Like if you're a toy

44:40

manufacturer in the US and you're

44:42

trying to sell to South Africa,

44:44

the fact that that people buy

44:46

so much The fact that people

44:48

buy U.S. assets, U.S. treasuries, U.S.

44:51

bonds, U.S. stocks increases the value

44:53

of the U.S. dollar but makes

44:55

it much harder to sell exports.

44:57

And so that I think is

45:00

part of what's powered the Trump

45:02

move to decouple from the rest

45:04

of the world is that This

45:06

has really led to sort of

45:09

devastating consequences for a lot of

45:11

the Midwest and a lot of

45:13

sort of the former manufacturing base

45:15

of the US. And you've seen

45:18

this. Oh, you know, that makes

45:20

an, okay, you've explained this in

45:22

a way that I can almost

45:24

understand it, for which, thank you

45:26

very much. And, but it raises

45:29

a question about who's running this

45:31

operation. Like I would think. If

45:33

you're part of the federal government

45:35

in a larger sense, you want

45:38

that control of the world economy

45:40

above all. And if you're part

45:42

of the financial elite, you probably

45:44

think that control is a lot

45:47

better to have than a god

45:49

damn toy factory in Waukegan. So

45:51

why would anybody who matters? in

45:53

a cold-blooded way, want to get

45:56

the toy factory running again in

45:58

Waukegan? I think to maybe complicate

46:00

the picture even a little further,

46:02

and I know it's already fairly

46:04

complicated, but the value of having

46:07

a strong dollar is not just

46:09

that it makes it easy for

46:11

the US to intervene in foreign

46:13

countries economies, as though it does

46:16

do that. The strong US dollar

46:18

also just makes our imports really

46:20

cheap, right? The flip side of

46:22

making it harder to export things

46:25

is that it's easy to import.

46:27

And so we've had this 30,

46:29

40 year banana, bonanza of cheap

46:31

consumer goods and TVs and you

46:34

know, all this stuff from China.

46:36

That's to come to an end.

46:38

Right, right. So all the everything

46:40

in Walmart is from China like.

46:43

Yes. So what? I mean. Yeah.

46:45

And the other thing is like,

46:47

the other downside of getting rid

46:49

of the system, as the Trump

46:51

people are trying to do, is

46:54

that we currently have enormous federal

46:56

deficits. Yeah, I was going to

46:58

say, this is how you finance

47:00

the deficit. You finance the debt

47:03

because the dollar is so strong

47:05

that you can, that there's huge

47:07

demand across the world to buy

47:09

the dollar and yet. If that

47:12

tries up, we'll have to do

47:14

very, very aggressive spending cuts or

47:16

tax hikes or both to deal

47:18

with the fact that debt issuance

47:21

is much more expensive. The IMF

47:23

will have to come in and

47:25

do an austerity program for us,

47:27

which I guess goes kind of

47:29

started. I know, it's pretty amazing,

47:32

isn't it? But I mean, I

47:34

guess, I guess I agree that,

47:36

you know, the toy factory, like,

47:38

is a example where it's like,

47:41

why do we want to make

47:43

that here, but... Well, I don't

47:45

like why would the elites want

47:47

to make that here right is

47:50

more John's question But I think

47:52

there are people near in in

47:54

Trump's orbit who define themselves as

47:56

like the enemies of Wall Street

47:59

and and There are some who

48:01

are allies like Bessent and others.

48:03

I mean, although, you know, he's,

48:05

yeah, I mean, that's how he's

48:07

positioned himself. I think it's fair

48:10

to say, but even more Trumpy.

48:12

But, you know, there are people

48:14

in the White House who are

48:16

really of the mind that, that,

48:19

American manufacturing prowess is a real

48:21

crisis. I mean, and it is

48:23

true that the number of jobs

48:25

in America, you know, in America

48:28

doing manufacturing work that provided people

48:30

with steady paychecks and health care

48:32

and union benefits in a way

48:34

that being a greeter at Walmart

48:37

or a sector or a sector

48:39

employee don't, like those are real

48:41

things. I mean, I think to

48:43

argue it again the other way.

48:45

This is just sort of like

48:48

what goes on in my head

48:50

all day just like ping ponging

48:52

back. That's what I think about

48:54

these things like on the other

48:57

side like the the mechanisms that

48:59

they've chosen to deal with this

49:01

financial elite sort of imbalance in

49:03

the global trade system is I

49:06

think not. sort of responsive. It's

49:08

like if you want to increase

49:10

manufacturing capacity, you need to do

49:12

things like industrial investment, you need

49:15

to do things like promote advanced

49:17

manufacturing. The tariffs actually some ways

49:19

make it harder to manufacture in

49:21

the US because manufacturers rely on

49:23

cheap inputs to be able to

49:26

compete with foreign products. So anyway,

49:28

it's a complicated picture. But, um...

49:30

Also, if you want to drive

49:32

the... I guess there's also a

49:35

theory which it seems to be

49:37

part of the thinking that maybe

49:39

they want to drive the dollar

49:41

lower for reasons we've talked about,

49:44

you know, to be able to

49:46

sell export more, but then you

49:48

can't really remain the reserve currency.

49:50

Yes, and this gets back to

49:53

where we started though, because like

49:55

other countries are like, what is

49:57

the, do you, says the US

49:59

want a lower dollar, and then

50:01

it's like. I don't know, like

50:04

Trump keeps saying that he wants

50:06

a strong dollar because like strong

50:08

sounds good. Yeah, exactly. Yeah, I

50:10

really don't know. Bricks, we're gonna,

50:13

you better not do anything. has

50:15

also said, right, that like, so

50:17

this is like right now there's

50:19

like these negotiations about like what

50:22

the US is expecting to get

50:24

from other countries in response for

50:26

us not terrifying them into oblivion.

50:28

And one of the questions has

50:31

been like, will the US want

50:33

countries, let's say like Japan, to

50:35

appreciate their currencies, to value their

50:37

currencies? So US exporters aren't at

50:39

such a disadvantage in the world

50:42

markets compared to them. And the,

50:44

the, problem though is that for

50:46

the Japanese like the obvious way

50:48

for them to effectuate that outcome

50:51

would be to dump to sell

50:53

US treasuries US bonds which would

50:55

lower the value of the US

50:57

dollar but would also exacerbate like

51:00

the reason that Trump pulled back

51:02

from the tariffs which was that

51:04

people were mass selling treasuries. So

51:06

it's like it's all like incoherent

51:09

like it's all like like impossible

51:11

to understand because like if the

51:13

goal is to depreciate the dollar

51:15

the way to do it is

51:17

by doing the thing that Trump

51:20

doesn't want to do yeah which

51:22

is like there's a lot of

51:24

these paradoxes going on right now

51:26

that seem not to have been

51:29

thought through and and again although

51:31

I don't want to just say

51:33

Trump is dumb or whatever you

51:35

know I actually don't don't think

51:38

he is I don't I think

51:40

he's that way out of his

51:42

element but but but I have

51:44

heard from people who worked in

51:47

government who worked including through part

51:49

of the Trump One administration, that

51:51

his whims, it really is a

51:53

lot of times as simple as

51:55

attending to his whims and ego.

51:58

And these are people that were

52:00

not like, well, they learned not

52:02

to like Trump for sure, but

52:04

these were not like, you know,

52:07

I don't know crooked media like

52:09

these were not like yeah partisan

52:11

people you know and so it's

52:13

it's kind of hard to deparse

52:16

that but whether I want to

52:18

say you know in Trump won

52:20

when he He ran more as

52:22

a kind of quasi-populous than, and

52:25

I know McKinley's his new guy,

52:27

but at Trump when he said

52:29

he was going to rip up

52:31

some free trade agreements and they

52:33

were bad for America, and he

52:36

was going to impose some tariffs.

52:38

And I remember when he actually

52:40

started moving in that direction after

52:42

taking office, there was a lot

52:45

of noise. You know there was

52:47

so much of that time and

52:49

screaming that you know he was

52:51

going to basically tank the whole

52:54

global economy Because he announced some

52:56

tariffs on China and this was

52:58

this was going to destroy the

53:00

whole global economy Smoot Holly now

53:03

in retrospect those were very mild

53:05

tariffs, but it was the shock

53:07

of and and he also yeah

53:09

he ripped up some trade agreements,

53:12

but he just renegotiated them I

53:14

don't even know how different they

53:16

turned out to be but it

53:18

was it was it was the

53:20

act of doing that It was

53:23

such a violation that it was

53:25

thought maybe that act alone might

53:27

tank the economy, the global economy

53:29

of the dollar. And that didn't

53:32

happen. It was, I mean, COVID

53:34

tank the economy, but that didn't

53:36

happen under Trump. And then, in

53:38

fact, what happened is Biden comes

53:41

to office and basically agrees with

53:43

a lot of Trump. Yeah, and

53:45

expands on them. And does the

53:47

tariffs, you know, expands the... kind

53:50

of economic blockade against China to

53:52

try to keep you know Maintain

53:54

whatever dominance is left and in

53:56

the tech industry And so, you

53:58

know, I'm wondering if Trump, you

54:01

know, while nursing all of his

54:03

many grievances and about how brilliant

54:05

he was and see even the

54:07

Democrats, even Biden are doing what

54:10

I did. If he's sitting there

54:12

thinking, okay, I was so brilliant,

54:14

everybody else who's an expert said

54:16

things were going to collapse, then

54:19

they turned around and just wound

54:21

up copying me. So what I'm

54:23

going to do is my brilliance

54:25

times a thousand when I come

54:28

back in office. Right, like, yeah,

54:30

I took five bricks out of

54:32

this wall. fall down. Let's take

54:34

500 breaks out of this wall.

54:36

Because that's how brilliant I am.

54:39

I'm torn on this question because

54:41

I think it is clearly true

54:43

that, you know, part of the

54:45

Washington freak out over the Trump

54:48

first term tariffs was not only

54:50

sort of over proved over wrought.

54:52

but was motivated by defense of

54:54

a system that really has not

54:57

worked for much of the country

54:59

for a very long time. Right.

55:01

And I think, I'm sorry, I

55:03

think that that's clear. I also

55:06

think, you know, the Trump first

55:08

term tariffs did lead to a

55:10

manufacturing recession. I mean, that did

55:12

happen. Like, and to your point,

55:14

I mean, these are as your

55:17

knowledge, like these are. anywhere between

55:19

10 and 15 times greater already

55:21

than what Trump did throughout the

55:23

entirety of his first term. Yeah.

55:26

It's also worth pointing out I

55:28

think that, you know, the really,

55:30

really significant measures have not even

55:32

been implemented yet to get in

55:35

the weeds a little bit, right?

55:37

he there's you can think about

55:39

it roughly in sort of three

55:41

separate tracks there's the universal tariff

55:44

which is just everything that comes

55:46

in from anywhere gets hit and

55:48

that's at 10% basically there's no

55:50

exemptions some very very minor you

55:52

know things so that's one tariff

55:55

that is staying on 10% on

55:57

literally everything that comes in then

55:59

there's track two which is country

56:01

specific tariffs That was what he

56:04

announced in April 2nd. We're 40%

56:06

on Lesotho. 20% on the country

56:08

that has no people and only

56:10

penguins. China tariffs. Those have large,

56:13

with the exception of China, which

56:15

are massive, those have largely. come

56:17

off. But then there's a third

56:19

set of tariffs that is bigger

56:22

than the universal tariffs and not

56:24

quite as big as the country-specific

56:26

tariffs were, but enormous and designed

56:28

specifically for industries. And just to

56:30

give you a little bit of

56:33

the backstory, during the first term,

56:35

the Trump people hit China very

56:37

heavily with tariffs. And what they

56:39

felt happened, and there is a

56:42

lot of evidence for this, instead

56:44

of... moving the manufacturing elsewhere or

56:46

raising like prices in China so

56:48

we could compete with them better

56:51

raising their labor standards instead they

56:53

just made the products in China

56:55

or move the Chinese factory to

56:57

Vietnam and then just use that

57:00

non-tariff backdoor to get it to

57:02

us and so because of that

57:04

Trump and his age are very

57:06

determined according to my reporting to

57:08

do large tariffs that are on

57:11

specific sectors that are universal. So

57:13

not just every product at 10%

57:15

but 25 or 30% on every

57:17

auto import wherever it's from so

57:20

you prevent that transshipment problem. So

57:22

you know those tariffs are not

57:24

imposed but they are coming like

57:26

they are beginning right now the

57:29

legal review process to do those

57:31

and they are talking about semiconductors

57:33

and lumber and copper and autos

57:35

and pharmaceuticals and a bunch of

57:38

stuff I'm forgetting and those are

57:40

still coming down the pike and

57:42

As you're saying, I mean, I

57:44

can't get it. Is Wall Street

57:46

not agreeing? Is Wall Street thinking

57:49

it's fake again? Sorry, go ahead.

57:51

No, no, no, no. I mean,

57:53

it's like, I hear you where

57:55

it's like, Trump won twice and

57:58

everyone at every point of the

58:00

last eight years has been like,

58:02

this guy's an idiot who doesn't

58:04

know what he's doing. And he

58:07

became the most powerful person in

58:09

America, like, and the most sought

58:11

after office in the world, twice.

58:13

unreasonable to me that he's like

58:16

I have a good instinct that

58:18

the pointing heads at the Washington

58:20

Post don't know what the hell

58:22

they're talking about. Like I totally

58:24

understand like why you would think

58:27

that. Yeah. But eventually, you know,

58:29

if you trust your instincts, you

58:31

will usually make a big mistake.

58:33

Yes. If you trust them too

58:36

much. Yeah, that's why you're supposed

58:38

to have people around you. Yeah.

58:40

But I don't know, from what

58:42

I hear, people who rise to

58:45

being his aides, it's a... What

58:47

do they say about Lincoln or,

58:49

you know, the cap, the minister,

58:51

the people who kind of can't

58:54

remember, there's that phrase, the Doris

58:56

Keynes phrase? A team of rivals.

58:58

Rivals, yeah, I don't think, Trump

59:00

may have that in terms of

59:03

they fight with each other, but

59:05

they're not going to say anything

59:07

to him that isn't unflattering. No,

59:09

Trump is much more like Jefferson

59:11

Davis. And his appointments. Generally didn't

59:14

turn out well, but the difference

59:16

between Trump and Davis, I will

59:18

say, is that Trump knows when

59:20

to ditch somebody. And Davis, if

59:23

he thought of someone as a

59:25

friend and an ally, like that

59:27

guy I talked about in the

59:29

last episode, Northrop, the commissar of

59:32

supplies, he would just never let

59:34

go of them, even though the

59:36

Confederate armies in the field were

59:38

starving. At least Trump has... a

59:41

willingness to kill off subordinates who

59:43

are... Trump has no sense of

59:45

self-destructive tragedy at all. It's just

59:47

everybody else could be a tragedy

59:49

but not him. Yeah. John you've

59:52

communicated yourself from the MSMBC and

59:54

Fox News news news news. Well

59:56

that's that's the dream. Yes. So

59:58

I don't know I listened to

1:00:01

a little bit I followed Joe

1:00:03

Weisenthal for many many years and

1:00:05

the Bloomberg guy and he had

1:00:07

on this some analysts named David

1:00:10

Wu this morning, who I thought

1:00:12

it was kind of interesting, agree

1:00:14

or not. Actually, this guy was,

1:00:16

I think he was even a

1:00:19

Trump supporter before, to some degree,

1:00:21

but he was on, he was

1:00:23

not a Trump supporter now, that's

1:00:25

for sure. And the way he

1:00:27

described what's going on is not

1:00:30

a trade war, but a war.

1:00:32

a war of attrition I think

1:00:34

is what he called it, that

1:00:36

this is really all about China

1:00:39

ultimately, that there is, and I

1:00:41

think there's definitely truth of this,

1:00:43

there is a general panic in

1:00:45

the US ruling classes, particularly the

1:00:48

governing classes, DC, about China's rise.

1:00:50

I mean we've seen, you know,

1:00:52

there's multiple bits of, you know,

1:00:54

evidence for this everywhere. And like

1:00:57

one thing that he talked about

1:00:59

he raised was I don't know

1:01:01

there was this big report commission

1:01:03

I think by Eric Schmidt the

1:01:05

the Google oligarch and some others

1:01:08

through Harvard to try to basically

1:01:10

rank where the US was versus

1:01:12

China and all these areas of

1:01:14

technology because technology, technological superiority has

1:01:17

been such a key part of

1:01:19

America's kind of. business and I

1:01:21

don't know, imperial dominance, you could

1:01:23

say, since the end of the

1:01:26

Cold War. And what they came

1:01:28

away with is that China's basically

1:01:30

a parody, except an AI. And

1:01:32

so Schmidt, that Schmidt is kind

1:01:35

of this sort of oligarch nationalist

1:01:37

who's been going around trying to,

1:01:39

I don't know, whip up policy

1:01:41

to protect American dominance. And then

1:01:43

you have this that fits into

1:01:46

the history of the history of

1:01:48

the. Thucydides strap. Everybody remembers the

1:01:50

Thucydides strap? Like and it's very

1:01:52

very dangerous it seems to me.

1:01:55

The exact peril. as far as

1:01:57

I can tell, is Britain during

1:01:59

the 19th century, as it saw

1:02:01

the United States developing its potential,

1:02:04

and it was very clear, the

1:02:06

United States had the potential to

1:02:08

dominate Great Britain. And that's why

1:02:10

the United States and England had

1:02:13

to go to war with each

1:02:15

other in the early 20th century.

1:02:17

Yeah, and that's why England had

1:02:19

enough sense not to do that.

1:02:21

I mean, there were many, many

1:02:24

cases where a lot of people

1:02:26

would have been happy to go

1:02:28

to war with the US. First

1:02:30

of all, to intervene during the

1:02:33

Civil War, because that would have

1:02:35

been a classic British move with

1:02:37

anybody else, like, let's make things

1:02:39

worse. But they had the grim

1:02:42

discipline not to do it. Instead,

1:02:44

they developed a bunch of novelists

1:02:46

who made fun of Americans and

1:02:48

a bunch of journalists who made

1:02:51

fun of Americans and a bunch

1:02:53

of journalists who made fun of

1:02:55

Americans and a bunch of journalists

1:02:57

who made fun of Americans and

1:02:59

made fun of Americans. release the

1:03:02

tension in that way, but they

1:03:04

did not try out, well, let's

1:03:06

see as the bigger fleet, let's

1:03:08

just clear the deck here and

1:03:11

have arm wrestling on the table,

1:03:13

because it would have been a

1:03:15

really bad idea. What do you

1:03:17

think about this idea that basically

1:03:20

Trump's team is trying to, I

1:03:22

mean, it coalesces somewhat that the

1:03:24

point here is to try to

1:03:26

wreck. the Chinese economy and that

1:03:29

the deep deep seek you know

1:03:31

that AI the Chinese AI was

1:03:33

like hit like a thunderbolt just

1:03:35

as Trump took office and put

1:03:37

them their panic into overdrive and

1:03:40

so that this is although you

1:03:42

know Trump is doing going about

1:03:44

it in a very self-destructive way

1:03:46

that he called it like a

1:03:49

war of attrition. and they're fumbling

1:03:51

around and failing badly at it.

1:03:53

This is how he was describing

1:03:55

it, but what do you think

1:03:58

of that theory? that

1:04:00

this is all about China? This

1:04:02

is all about China and basically

1:04:04

trying to wreck their economy and

1:04:06

we'll wreck ourselves somewhat, but we're

1:04:09

gonna wreck them so much worse

1:04:11

that when we pull out of

1:04:13

this war, we're gonna be able

1:04:15

to then reestablish ourselves as several

1:04:17

years ahead dominant rather than now

1:04:19

where we're going on towards parody.

1:04:21

I mean, I think there's a

1:04:23

desire by... Trump defenders and honestly

1:04:26

like sometimes the media to to

1:04:28

like rationalize some of the things

1:04:30

that have happened and as a

1:04:32

as you were saying there's like

1:04:34

a big bipartisan elite freak out

1:04:36

about Beijing and to say that

1:04:38

this is all about China helps.

1:04:41

like resolve that feeling of like

1:04:43

we don't really know why they're

1:04:45

doing what they're doing. It is

1:04:47

true that like the tariffs on

1:04:49

China are like a gazillion times

1:04:51

bigger than any other country right

1:04:53

now and like it is also

1:04:55

true that like they keep saying

1:04:58

and like that's where the focus

1:05:00

is now. On the other hand

1:05:02

like I think it's clear that

1:05:04

by their actions and by you

1:05:06

know what they've been what we're

1:05:08

saying for weeks is that Just

1:05:10

Trump loves the word tariffs. He

1:05:12

called it the most beautiful word

1:05:15

in the dictionary. Did he really?

1:05:17

Yeah. Oh yeah. He didn't see

1:05:19

that. And then he said, sometimes

1:05:21

people criticize me because they say

1:05:23

shouldn't it be love? Shouldn't it

1:05:25

be God? So I'll say tariffs

1:05:27

on the third word. Third best

1:05:30

word in the dictionary. You know,

1:05:32

one thing I'll say about Trump

1:05:34

is that he started getting boring

1:05:36

towards the end of his first

1:05:38

term. Pretty funny the last year.

1:05:40

I mean, there are aspects of

1:05:42

Trump that you have to love

1:05:44

unless yeah, it was like some

1:05:47

people criticize me because they said

1:05:49

that I said tariff is the

1:05:51

most beautiful word. So now I

1:05:53

say it's the third most beautiful

1:05:55

word after love and God. I'm

1:05:57

like a god's But I guess

1:05:59

to answer your question, like, why

1:06:01

do we hit the European Union

1:06:04

with like 30 or whatever percent

1:06:06

it was tariffs if it's about

1:06:08

China? Like, what was the point

1:06:10

of that? You know, like, I

1:06:12

think it makes sense that people

1:06:14

want to be like, oh, this

1:06:16

is like a concerted approach to

1:06:19

China. But like, they're doing too

1:06:21

much stuff that doesn't have to

1:06:23

do with China for it to

1:06:25

all be about that. I think

1:06:27

on the question of like. I

1:06:30

have friends, even among friends on

1:06:33

the left, who disagree about this

1:06:35

question, where I just think it's

1:06:37

a hard question to answer, and

1:06:40

I can kind of argue it

1:06:42

both ways, where clearly, as John's

1:06:44

alluding to, like, there's an element

1:06:47

or a very strong element of

1:06:49

sort of chauvinistic nationalism. we need

1:06:51

to be the top dog we're

1:06:54

threatened we need to lash out

1:06:56

we need to make sure that

1:06:59

like we're dominant in places like

1:07:01

why right like there's a irrational

1:07:03

element there i think a lot

1:07:06

of people would say on the

1:07:08

other hand like it does seem

1:07:10

true to me that china has

1:07:13

horrific labor practices it does i

1:07:15

mean whether they're exaggerated by some

1:07:17

commentators like we can debate but

1:07:20

like There are people of all

1:07:22

political persuasions at least and experts

1:07:24

on sort of both the left

1:07:27

the center on the right who

1:07:29

I think would say that China's

1:07:31

I mean there's there's a I

1:07:34

mean you saw I'm sure that

1:07:36

the UAW like one of the

1:07:38

big you know left-wing union has

1:07:41

been very forthright that like Chinese

1:07:43

industrial and labor practices are a

1:07:45

major threat to the American working

1:07:48

class and it's like incumbent on

1:07:50

America's political leadership to like take

1:07:52

that seriously and not think that

1:07:55

it's just about like US insecurity

1:07:57

about no longer being top dog

1:07:59

and so I think both of

1:08:02

those point. There are real things.

1:08:04

There are real issues. I mean,

1:08:06

I've been hearing about China, currency,

1:08:09

basically manipulation and rage about that.

1:08:11

Back when I used to go

1:08:13

on Dylan Radigan's show on MS

1:08:16

NBC before it turned complete Dem

1:08:18

Party kind of outlet and he

1:08:20

was a finance guy and he

1:08:23

had like he knew people in

1:08:25

the steel industry and other industries

1:08:27

were just raging furious that the

1:08:30

US and they blamed it on

1:08:32

Wall Street ultimately or whatever you

1:08:34

know they would let China basically

1:08:37

depreciate their currency and and they

1:08:39

sought as a form of warfare

1:08:41

against industry and you know look

1:08:44

at the numbers about about sort

1:08:46

of net trade surplus countries these

1:08:48

are countries that send overseas more

1:08:51

stuff than they import right we're

1:08:53

the exact opposite we import way

1:08:55

more weird like the biggest trade

1:08:58

deficit country in the world but

1:09:00

it's really striking when you look

1:09:02

at the numbers like China is the

1:09:04

world's biggest trade surplus country by a

1:09:07

lot yeah and that I think you

1:09:09

know it's not just it's bad for

1:09:11

a lot of people in China like

1:09:13

they can't the citizens of China are

1:09:16

extremely, they're producing a lot of stuff,

1:09:18

but they can't really afford imports because

1:09:20

of how devalued the women B is.

1:09:22

So I mean, it's a complicated story,

1:09:25

I think. Right. Okay, I know we've

1:09:27

kept you here for a while, but

1:09:29

you brought this up in the beginning,

1:09:31

and I think everyone is curious about

1:09:33

this anyway. From your vantage point, what

1:09:36

do you think we're looking at because

1:09:38

of the tariffs? I mean, it seems

1:09:40

to me... that no matter what Trump

1:09:42

does at this point and from what

1:09:45

I'm seeing some evidence anyway like in

1:09:47

cargo traffic like we are going to

1:09:49

be probably looking at shortages supply shortages

1:09:51

just because people can't I mean, people

1:09:54

who are in the import export business

1:09:56

can't predict anything right now. Like, what

1:09:58

do you think we are going to

1:10:00

be looking at, even if it's not

1:10:03

Armageddon, in the next three to plus

1:10:05

months? I think, yeah, it's quite likely

1:10:07

that we're heading into a stagflationary environment

1:10:09

where goods become more expensive at the

1:10:11

precise moment when growth slows down. Typically,

1:10:14

you know, the exception of the 70s

1:10:16

when the last time. we had this

1:10:18

kind of supply shock. You want to

1:10:20

see that growth accelerates alongside inflation. So

1:10:23

people are spending more so things are

1:10:25

getting more expensive, but also people have

1:10:27

more income. The really scary outcome here

1:10:29

is that because of the tariffs, we

1:10:32

have the price shocks, but growth is

1:10:34

also stalled because people don't have money

1:10:36

to spend. And I think that... That

1:10:38

is looking like, you know, the genie

1:10:40

and the tooth, the genie is out

1:10:43

of the bottle and, you know, you

1:10:45

can't put the toothpace back, whatever, whatever,

1:10:47

whatever. Like that feels like where we're

1:10:49

heading to me and, you know, 63%

1:10:52

decline in shipping orders from China, the

1:10:54

US economy is 30% roughly trade, 15%

1:10:56

exports, give or take. And so if

1:10:58

you lock that off by five... 10%

1:11:01

I mean that is a massive massive

1:11:03

blow and and if it doesn't push

1:11:05

us into recession could still cost us

1:11:07

a lot of jobs and people a

1:11:10

lot of you know their financial security

1:11:12

so it's a scary time for sure.

1:11:14

We talked with John about the the

1:11:16

bread riots the Richmond bread riots and

1:11:18

I'm not joking. I think there could

1:11:21

be a Nintendo switch to riot coming

1:11:23

in about two months because you can't

1:11:25

even like reserve it, you know, because

1:11:27

of all this and you don't mess

1:11:30

with moms, you know, over this, let

1:11:32

me tell you. But anyway, thank you

1:11:34

so much Jeff. I know you got

1:11:36

you so much. so

1:11:39

I really I it,

1:11:41

guys. enjoyed it, guys. Thanks. And,

1:11:43

I uh, John, I loved hurdle

1:11:45

was on pizza. It was

1:11:48

great. Thank you very

1:11:50

much. Really. I I

1:11:52

loved it. it. So,

1:11:54

guys. guys. Thank you

1:11:56

so much. Jeff Stein from

1:11:59

Post. Thank you so

1:12:01

much. you so to

1:12:03

you again soon. to you

1:12:05

And my pleasure.

1:12:08

Bye. that pleasure. Bye. Bye. Okay, so

1:12:10

let's end the episode

1:12:12

here. That was

1:12:14

a great interview. a

1:12:17

really appreciate Jeff Stein

1:12:19

taking the time

1:12:21

out because I know

1:12:23

he's very busy out

1:12:25

because I know he's very busy

1:12:28

the the chaos in the warfare.

1:12:31

terror for again to So thanks

1:12:33

again to Jeff very much.

1:12:35

Talk to you soon. Yeah,

1:12:37

thanks everybody. Bye. Talk too soon.

1:12:39

Thanks everybody. Bye. Bye.