Podcast

DOGE Updates + Liberation Day Tariff Reactions With Ben Shapiro and Antonio Gracias

All-In with Chamath, Jason, Sacks & Friedberg

Last highlighted April 7, 2025 Source ↗ ← All highlights

Gracias’ DOGE Role
- Antonio Gracias volunteered for the VA but Elon Musk suggested SSA due to its internal problems.
- Gracias investigated fraud, waste, and abuse at SSA, focusing on enumeration. Transcript: Speaker 4 Interesting question, and by the way, it’s great to see you guys, man. Thanks for having me on. I can use your laughs. You’re really making me laugh. We’re really proud of you, man. Thank you. We’re really proud of you. It’s good to see you thank you um suit looks great by the way yeah thank you thank you when do you have to return it the rental is too at the end of the week okay um so yeah you know what happened Was i had actually volunteered to go to the va because that’s kind of as you guys know close to my heart and um el said to me, look, great, you can do that next, but will you go to SSA first and See what’s going on there? Because it’s the biggest internal problem we have and see what you find in fraud, waste, and abuse. And so, of course, I said, sure, I’ll do that. And I ended up out in Woodland, Maryland with the good people at the SSA, the social administration. And that’s where I started. That’s how all this started for me. Speaker 3 And so do you, Antonio, go in there with a Doge engineer as your kind of sidekick, per se? Or you just go there solo and you show up? And what happens day one when you walk into the place? What do you do? Speaker 4 So I brought with me two great professionals, John and Peyton from Valor. One of them, an engineer. The other one, I’d say, a finance ninja. Both these guys are ninjas. And there was already a team there, actually, that was working with some great engineers. And one senior person, Scott Coulter, who’s from, actually worked at Lone Pine, started his own fund, and had come here as a volunteer as well. So they were already doing some work, actually, particularly on the enumeration part of the system. So that is the system that you have numbers, the whole cleaning of the database, the numbers, they had already started that project when I got there. Speaker 2 And what is the mandate as given to you, you know, as part of Doge? Speaker 4 Fraud, waste, and abuse. I mean, exactly what, you know, what Bill Clinton talked about, what Barack Obama talked about, what all presidents, but maybe President Biden talked about, going back in time, it Was go figure out how to save some money, man, this system’s going bankrupt, it’s going to be bankrupt 23 to 7, the country overall, as you guys know, talked about many times, is on its Way toward bankruptcy. You want to do something and go figure out how you can save money and go find the fraud. (Time 0:02:58)
SSA Number Surge
- Social Security numbers issued to non-citizens rose significantly.
- This increase, discovered by engineer Peyton, prompted an investigation into the cause. Transcript: Speaker 2 And that’s what we did. Let’s get to it. You spoke at a rally. I think it was on Sunday. And you pulled up a chart. Here’s that chart. Maybe you could explain to the American people here what this chart shows. Yeah. Speaker 4 So if I want you to step back and say I got it, I think it’s important. We map the way we work. You guys know we’re very operational, Valerie. I’ve worked with all you guys various times. And what we do is we map the entire system from beginning to end. So we map the system from enumeration, so I get your number all the way to the end, went to the offices and saw how the offices operate. And in that process, one of our engineers, Peyton, who I mentioned, he found the data. So we’re looking at all the data enumeration, how it works, what’s going on, the typical stuff you’d look at. And he found this data called enumeration beyond entry, right? So that is the, it had this giant ramp to it. You can see their baseline was kind of, you know, three, 400,000 people, all the way to 2.1 million people. And that just jumped out at us. And we’re like, what’s that? And so we dug into it. And that’s how this started. Speaker 2 And so what that’s showing is social security numbers that were issued to non-American citizens or non-citcitizens am i correct that that’s the number we’re looking at so these are Non-citizens getting security numbers and for people who don’t know just like a little bit of background on the social security system we do this this is not abnormal for us to give social Security numbers this is part of the process uh that the government does the social security number was created in 1936 for citizens to track their earnings. And in the 90s, we started giving them to non-citizens who were authorized to work in the US so that we could collect taxes from them. And so if you’re not a citizen, and you’re a green card holder, which some people in this program, I think have been, you have to have a Social Security number in order to work, and you pay Into social security and Medicare, just like U.S. Citizens, and then eventually, I think you would qualify for those over some period of time. Speaker 3 You can also get a social security number if you’re a legal immigrant into the United States on a visa. So, for example, when I first came to the United States 25 years ago on a TN visa, I was able to get my social security number because I had a valid visa to be in the United States. Okay. Speaker 2 So we have social security numbers being given to non-citizens. That is not controversial, but there’s something controversial about this chart. Antonio, tell us what that is. Speaker 4 So I think if you look at the chart, you’ll see there’s, it starts at like called 300,000 or so. Speaker 2 This is during the COVID period. Yep. Speaker 4 Coming right out of it. So we, the 21 is coming right out of COVID, right? So if you go back even a couple of years, 19, you’ll see that it’s about 400,000. Yeah, exactly right there. So what happened was this program was designed for, so we were talking about, you know, that got visas this is at numeration beyond entry since after you’re in um there are some people In here that have h1b screen cards etc and the way we thought about this was that’s the baseline number that’s the three to four thousand a year you see and that should be happened that’s Like you know there are programs for afghans example the translators that came in after the war right the people who brought in they would be in these kinds of programs and so the baseline, And by the program goes back, this particular program goes back all the way to 17 and had a legitimate use, which was the kind of people you’re talking about. People that we want to let in, like the CARE programming, I’ll make an example, which is the Afghans, they would be in this number. And so what jumped out at us wasn’t that this is here because it has legitimate use. It’s that it’s the growth. Why did it grow this fast? And what happened? That’s what we dug into. (Time 0:04:55)
Source of Number Surge
- The increase in Social Security numbers wasn’t due to COVID-19.
- It stemmed from relaxed asylum and parolee programs, enabling easier legal entry. Transcript: Speaker 2 Have you figured that out yet? Is it because of like a COVID overhang? The one criticism I did see of the chart that I wanted to bring up with you is, hey, people want to see the 10 years, 20 years before this. What would we see if we were to look backwards a little bit? And do you have some theories? Is the covid overhang theory valid or is this just biden opened the border as we saw you know especially like and maybe it was that third year of his term the 2023 year and this is the overhang Speaker 4 Of the 2023 surge what are your theories well the answer is no but category no because the program really started it it started in 2017 so they probably worked on it before that right a Few things a few years put these into place they worked at it by guesses you know, back during the administration. It actually became active in 17. You see a few numbers in 18, and it starts to get a little bigger in 19 and 20, right? So that’s how we get this baseline number of 19 and 20. That’s where we’re using that data here. So there isn’t, I can’t go back 20 years. It doesn’t exist. And then when we dug into it, what we found was the vast majority of the growth was related to asylum programs and parolees. I had people that came in on NTAs, this is noticed to appear into the country, either at the border, at the airports, mostly at the border. And then we dug further into it. Excuse me, we dug further into it. We found that there were, this is about 5.4 million people total. There were about 1.2 million people that the status is marked as unknown, and about 1.2 million people that were marked as general parole. And they should have markings of what the program is they’re under. Because if you claim asylum, you’re supposed to claim a real fear. I’m going to be tortured by my country. Something bad is going to happen to me. It’s why I can’t go home. What we find here is that a legitimate program was, and the word I use, abused. The requirements were super opened so that more people come through. And the example I’ll give you, you know, I have here actually the form. This is the form used to be, going back in time, a four-page form that the officer had to fill out in the field. And the person that was claiming the asylum had to actually prove that they had a really credible fear of being murdered, tortured by their government. That’s what the asylum’s for. It turned into a form, which I can’t give you, but I’m going to show you here if you zoom in on. It has four questions. That’s it. And the four questions are super leading. I’ll just read one of the important ones here, right? So do you have any reason for concern about being returned to your home country or being removed from the United States? I mean, could that be more leading? Right. What they did is they opened, they just opened the aperture on these programs dramatically. So they allowed people that were illegals at the border to come in legally. And as we’ve dug further into it, we found this took us. So you guys know me, man. I’m a very methodical, lean business process mapper. And we went all the way to the border, literally to Brownsville and Laredo to ask what happened. We couldn’t find the data on what these unknown categories were. And it turns out that when the folks at the border who were great, by the way, they really tried hard and they suffered a lot. And this is a bit of, this is a human strategy I’ve talked about. They were giving people at times notices to appear. This is the NTA. And what that allows you to do is come in the country and then you’re scheduled a court date, which is like six years out. So now you’re in the country with some quasi legal status. You’re waiting for your court date. And while you’re waiting for your court date, which could be six years out is the average, by the way, it could be longer than that. You’re waiting for your court date. You could fill out an asylum application. So without even an interview, just an application by filing a form. Once the application’s in, you can file another form, 765, to get a work authorization. Once you get that, you get a 766, which is the authorization, and we automatically send you a social security card in the mail. No interview at all. That is the majority of the growth you see in these numbers. Is there any (Time 0:08:28)
Lack of ID Verification
- There’s minimal ID verification for Social Security numbers.
- The most common birthdate was January 1st, indicating fabricated information. Transcript: Speaker 5 ID verification along the way, Antonio? Like, do we know that there are no duplications happening by validating that one individual is getting one social security number at any point in this process? Speaker 4 So it’s a great question. No, the answer is there’s no real ID verification. So you can, you know, one of the things we found, we looked at this was the people that some people showed IDs, some people didn’t. Speaker 2 And one of the things- These would be IDs, Antonio, from their home country. This would be a Venezuelan driver’s license or something. Speaker 4 Yeah, I mean, it could be a passport, a driver’s license. But here’s what really sort of tipped us off and disturbed us. When we looked at the birth certificate data that was presented at the border, the number one birth date was 1-1. And it was four times more likely to be born on 1-1 than any other day of the year. Now, we all know this isn’t true. Speaker 2 So they just hit enter on that part of the form. Yeah, more than they had nothing. They also could come with nothing. Do we take biometrics of people at the border? Do we take like an iris scan, fingerprints, and all that stuff? Speaker 4 This is one of the issues. I mean, we do have photos of people. We found that 23% of the records looked at did not have fingerprints. And look, the folks at the border were overwhelmed. And we’re not sure why this happened. I will tell you guys, just to understand why I went down there, both Border Patrol and Border Protection told me they had the highest suicide rates of all time during the surge. Okay, over 70 of these agents committed suicide in this period. It’s truly tragic, because they knew what was going on. Speaker 1 Given the fact that all this has happened, is the Trump administration going to try to claim the social security number back, invalidate them? What will be the proper action? Or is it too late? Are they already sort of in the system and now you can’t do anything about it? Speaker 4 So Ben, it’s a great question, right? And the first question was, what are they doing? I mean, you know, like, where are these people? Where are they? How are they? And we’ve gone through a whole process of mapping this. So we mapped it through to the benefit programs. We found in the benefit programs that every benefit program that was being accessed by these people, you know, 1.3 million of them are on Medicaid right now, today. And by the way, it’s just ramping. It’s just starting, just to give you a point. And then out of curiosity, I woke up at night like two in the morning. I couldn’t sleep. My mind was right on this. I sent the injured note saying, hey guys, let’s just look at the public voter rolls who we find in some friendly states. And we looked at voter rolls and we found that thousands of them registered to vote in a handful of states. And then we went even further with those friendly states and found that many of those people had actually voted. It was shocking to us. (Time 0:12:19)
Illegal Voting
- Thousands registered and voted illegally in a few states, a federal crime.
- Further investigation is needed, as this is likely just the beginning. Transcript: Speaker 4 If I hadn’t seen it with my own eyes, I wouldn’t believe it. And so now the question we’re asking ourselves is, what do we do? We refer to some prosecution that’s ongoing right now. We’re thinking through how to do it. And the reality is they have various kinds of status, and it’s a very detailed analysis. Legally, they’re working through right now about how to deal with it. Speaker 2 So thousands of those people registered to vote yes in the election which is a federal crime by the way well yeah i mean the interesting thing is like the heritage foundation has a very Good project you know it’s obviously right-leaning where they’re studying all cases of fraud i looked at it before we’re here there’s only been 24 cases since 2003 of somebody who’s A non-citizen trying to vote now those are people caught so this would be incredibly dramatic if it was even a thousand people oh no jason it’s more than a thousand i’ve seen it um i’ve Speaker 4 Seen the data myself and it’s more than a thousand in just a couple of states i mean it is shockingly bad and this is the tip of the iceberg guys it’s the tip of the iceberg it doesn’t include These 7.8 million people that ICE has that have come in illegally and nowhere here. And all the people that came illegally, we don’t know are here. I mean, this is not a political issue. I want to be really clear about this. Speaker 3 Yeah, Antonio, let’s just take one step back because I just want you to repeat this. So because I think it’s important and we may have just run over it a little too quickly. When you get a social security number, what you’re saying is there’s all of these important downstream consequences. One of the downstream consequences is you could show up, register to vote, and that’s an illegitimate action that’s breaking federal law. That’s one. But the second is that without knowing who this person is, they can start to absorb resources that could have otherwise gone to an American. I guess that’s like a fundamental part of this. Yeah, absolutely. So how do you quantify that? Can you just maybe explain it a little bit more about all of the different ways in which you think now, you know, the United States ends up leaking services to these folks. And also, they could be contributing to right, they could be paying taxes into the system. Speaker 2 So I guess there’s both of those possibilities. And both of those have fingerprints to mop. So yeah, good question. Speaker 4 You know, look, we need to figure this out. This is a very, it’s massively complex, you can see the map I have on the whiteboard in our office. It’s huge. And we’re figuring it out right now. But let me just tell you this. And every benefit program we looked at, and this is just a handful of states, we found people on all the benefit programs. And we found them on unemployment. We found them on Medicaid. So Jason, to your point, the people on Medicaid and unemployment, they’re not contributing. They’re taking out, they’re mooching. There are criminals. I mean, look, we sent this data list to the National Targeting Center. And I don’t want to get too far into the data but i can tell they found hard hits in the target center um of very bad people criminals and people on terrorist watch list that are in this group And so yeah i mean it’s a it’s a problem we got to figure out how to deal with it and the of course there are people that are also you know have jobs and paying in the system. That’s also true. All these things are true. And we’re trying to sort through the data and figure out how to actually deal with it now. Speaker 3 Tonya, one of the things about the data that you triggered, which because the data is so important, frankly, is is a lot of people started to try to find a way to nitpick and say, Antonio, You’re cherry picking, or Antonio, this is not really representative. And you had some pretty big names, right? People that have credibility, Jim Chanos probably being one of the more prolific people, a very well-known hedge fund manager. But I think you tried to articulate why their objections didn’t make any sense. I think it’s important to maybe give you a few moments here to identify what they said, and maybe debunk it. (Time 0:14:45)
Chart Criticism Debunked
- Critics attempted to debunk Gracias’ chart by comparing different datasets.
- Gracias clarified on X, stating their comparison was apples to oranges. Transcript: Speaker 4 So the chart that they’re using, and you can see this, I posted something on X about this. It was apples to oranges. You can see it here. They took a chart that included all enumerations, not the EB program, the enumeration behind entry program, all enumerations and compared to our chart. Speaker 3 So just to be clear, this would have included somebody like me coming in on a TN visa or somebody on an EB1 visa. Speaker 4 Yeah, I mean, so those people would be in our data too, but just enumerated beyond entry. The data on the left of 2020 with the big bars, that includes people in the offices, that includes people that got, they got certificate numbers because they went to a consulate and like You probably did, applied ahead of time before they came in, you know, those kinds of people. Speaker 2 So we need a stacked bar chart, so there’s some fun with numbers going on. Speaker 5 Can you flip back again? So your number for 24 was how much? 2.1 million. Yep. Speaker 4 Yep. And what they did is they took our data. So this was, you know, look, I don’t want to impute negative motives. They just maybe were confused. They took our data and they added the total data, right? This is just subsection. This is EB. And I’m just going to use acronyms Okay, guys, this is EB only. Enumeration beyond entry, which is a program, as I said, started in 2017. And then it kind of ramped up into 19. They took our data and then they added the total data before that, right? That is apples to oranges. That’s why it doesn’t work. And I went through a whole analysis of this on X. And you know, the person, the first person that posted the chart actually deleted it, and sent me a post saying, Hey, I’m deleting it, because I get it, you’re right, and apologized and Asked me some questions. I don’t want to get into it. You guys know, I don’t post a lot on X. I don’t want to get into basic people. It’s not worth it. The data speaks for itself. (Time 0:18:37)
Immigration Reform
- Stop illegal southern border immigration.
- Determine who stays and goes based on their contribution to the US. Transcript: Speaker 2 Like, is there any way out of this? And maybe perhaps what we’re seeing here with somebody like Antonio, who’s a lifelong Democrat, who now is, you know, helping the government. Maybe there’s some way with data and logic we can get through this. Speaker 1 I mean, I think that what Antonio is doing here is so important specifically for that, because it seems to me there’s actually been a fairly wide consensus among the American population For a very long time what to do about immigration, particularly the southern border, which is number one, just stop the illegal immigration at the southern border. After Biden blew that out, a lot of Democrats turned to President Trump specifically because of that issue. And that has been the signal success of the Trump administration among all the other successes. The numbers of the border have just plummeted to almost zero. I mean, the lowest numbers in recorded history. And that is an unmitigated success. And then I think everybody knows that we have to sort of figure out who gets to stay and who gets to go, who’s already in the country. And what Antonio is doing by being able to discern who is here and is a net draw on the resources of the American people versus maybe who is a net taxpayer or who’s actually contributing, Who’s a criminal. There’s always been this bizarre supposition in the political realm that there’s no way on a one-to level to figure out who is who. You have to treat everybody as a class. Either everybody stays, everybody goes. And the reality is that even the way the Trump administration is doing this by first targeting, say, criminal illegal aliens for removal, and then maybe moving on to people who are net-drawn Resources, who came in falsely under claims of asylum and now are receiving Medicaid or disability. I’ve made the argument for, I think, my entire career, actually, on this, that we should be treating immigrants, illegal immigrants who are in the country the same way we would treat People who are trying to get into the country, which is to say, are you going to benefit the United States or are you not going to benefit the United States? And the counter argument was always, well, how exactly are you going to determine who is who? And the answer I always gave was, well, the IRS does it with our tax returns literally every single year. So why should we not be able to do that? And so the kind of work Antonio is doing, showing you actually can do that by tracking the social security numbers of people who came in illegally, because the truth of the number of unknown Getaways is actually really, really compared to this. It’s a small number. Most of the people who are coming across the border, at least during the Biden term, I went down to the border last year and visited a Native American reservation that’s right along the Border where the border patrol basically was not. And they said that what was happening is people were arriving at the border. They were doing exactly what Antonio was talking about. They would literally say, I fear to go back to my home country. They’d be processed. They’d be let into the country with a future date to come back. And that was all happening within 72 hours. So being able to track those people and find out who should be in, who shouldn’t be, that’s huge. And I think that’s the consensus. (Time 0:21:37)
Human Trafficking
- The relaxed immigration policies incentivized human trafficking.
- This is a human rights tragedy, not a political issue. Transcript: Speaker 2 How do we get the country to sort of get back together here and maybe reconcile on this issue? Because it seems like an unnecessary, to Ben’s point, I think the number is 80% of people believe the border should be just shut, period, full stop, and everything should be legal. And I don’t know the other 20 if they’re just don’t know how to take a survey. I’ve never met anybody who said there should be an open border at the southern border. So what are your thoughts on, given your inside knowledge, and I would describe you as a Clinton Democrat, fiscally conservative, socially liberal, correct me if I’m wrong there. What are your thoughts on reconciliation here? Because you really do care about that. Your parents, both immigrants, my besties here, three of the four people who host this program, immigrants, this is an immigrant country built by immigrants for immigrants has always Been. So how do we reconcile this issue and put it behind us? Speaker 4 And Jason, I have asked myself this question, and I think we got to follow the truth. And that’s the point, follow the truth. And the truth is in the data. And as Ben said, the numbers don’t lie, right? And so people are productive. We got to find a way to allow them to be productive and stay. People that are taking the system should not be allowed to stay. And I think I don’t want to get into the policy at all because it’s above my pay grade. I mean, the reality is for me, my remit is, as Ben said, it’s criminals, terrorists, and then people mooching off the system. And then, you know, a political question needs to be answered about what happens to the rest of those people. I don’t know. It’s not my remit. But I will say this. I think that all my friends who are still Democrats that I have explained this data to, they all say the same thing you guys are saying. Man, this is a problem. We’ve got to figure this out. And let me tell you why. The bigger problem, the biggest problem here, it definitely is taking off the system. But you’ve got to realize we gave $13 to $15 billion a year to the human traffickers. That’s what the system did. And the money magnet that attracted these people here. It wasn’t like it was some crisis, you know, environmental crisis. The money magnet attracted these people and many of them died on the way up. I mean, think about what that’s like. Think about the human crisis. So this is a human suffering, a human rights tragedy. Speaker 2 You have people who are getting sold into slavery and being abused at the border. At a minimum, every American should be against that. Speaker 4 Everyone is. Every American is. Look, man, this turned my stomach. When I went to the border and I heard the stories, it turned my stomach, man. We are America, okay? We protect people like this. We don’t give incentives to people to pay traffickers. If you pay $20,000, I heard $20,000 to $500 just across the border, $20,000. I mean, where does someone who’s coming from Central America or Africa get $20,000 to pay the traffickers that are walking them across the border? It’s not free to walk up Mexico. Okay. It’s controlled by the cartels. What happens? I mean, they got to pay that back. How do they pay it back? They’re basically detriture servants. This is terrible. This isn’t what we do in this country, right? This country is about freedom. And we are here to protect it. We protect it around the world, protect it in our home country. And I don’t think any American that I know, none of them, Democrats, Republicans, or anyone, thinks this is good. It’s not good. It’s bad for America and it’s evil behavior. We shouldn’t send it. We shouldn’t give people a reason to do it. We should find legal ways to become the country. And I think that’s how we come together. (Time 0:24:55)
Voter Importation Motive
- Gracias believes there was a motive to import voters.
- Relaxed policies and lack of ID requirements support this claim. Transcript: Speaker 5 Do you believe that there is a Democratic Party motive to increase voter base for the Democrats behind all of this, as has been proclaimed by some? Speaker 4 Look, as I go through the data and I see it’s all about the data. OK, David, and I know you love the data. When you just get a handful of states, man, I’m talking about four states. We looked at the voter rolls. We found these people, thousands of them on the voter rolls. And we found many of those people had voted. Right. In one state in particular, well over a thousand voted. Yeah, I think this was a move to import voters. Speaker 5 Aspect of human rights doing the right thing for people in need that is motivating some of this behavior? Is that a lie? And they actually have a different motive? Or do some in the party think that way, but there are real kind of, kind of call it a small group of highly influential folks at the top of the Democratic Party that recognize that this is Going to grow the voter base. And they’re kind of motivating this. What do you think is the construction of what sounds to some to be a conspiracy? And how much of this is really like widely understood? Look, (Time 0:27:59)
Tariff Plan Rollout
- Trump’s tariff plan rollout was poorly executed with contradictory justifications.
- Clear and well-thought-out arguments are crucial for policy success. Transcript: Speaker 3 Now we can open up the amateur. No more FOIA. Speaker 1 All right. Okay. What do you guys think about what you just saw? Ben, I’ll let you go first as our guest. I wish the entire Trump administration were rolled out as well as Antonio just rolled that out, is what I would say. Totally. You know, I think that that is high levels of competence and expertise and a meticulous message that is data first and difficult for anybody to deny. I think that the success of the Trump administration, the success that they’ve had are taking the 80 side of 80, 20 issues. And I think that the success of President Trump in 2024 was that he oddly became the normie candidate. He was the guy who was a return to normalcy candidacy in the face of Biden and the bizarreness of Harris. And I think that as we see many of Trump’s policies rolled out, the ones that are rolled out the way that Antonio is rolling it out are incredibly well received by the American population Because they’re seeing serious people doing serious work that needs to be done. And the ones that are not rolled out that way, I think are going to be a little more unpopular with the American people. And that’s kind of, I want President Trump to succeed at a lot of these agenda items. And I don’t want his good agenda items getting essentially railroaded and run over by the bad rolled out of other agenda items. So you think thoughtful is good and well thought out, constructed and communicated. Speaker 2 When you talk about this being done right, what do you think is being done wrong? It could be done better, I guess would be a generous way of saying it. Speaker 1 What could they communicate better? I mean, not to jump into the pile of rakes that is the tariff plan, but I think that the way that the tariff plan was rolled out is about as bad a rollout as you could do. The reason I say that is not just because of my disagreements on the actual policy. I’ll either be right or I’ll be wrong on that. But the way that it was rolled out with essentially kind of a surprise announcement, I don’t mind a surprise announcement if what is then rolled out is not replete with sort of contradictory Justifications, statistics that are labeled one thing but really are not that thing. And so it just, it opens itself up to all sorts of critiques from every possible side of the, if you want to make the argument, make the full scale, well-thought argument, and then we can Argue over whether it’s true or not. But there’s four or five different claims that are being simultaneously made about the tariffs. One, they’re going to raise revenue. Two, they’re going to reshore. Three, that you are going to somehow rejigger the world trading system. Some of these are mutually exclusive. If you’re going to reshore, you’re not going to raise as much revenue, for example. Those two things are mutually exclusive, and they’re both being trotted out at the same exact time. If you’re going to put out a giant chart that the president holds up that shows tariff rates plus unspecified variable, then what I’d like to know is what the actual tariff rate is as opposed To what the calculation seems to be, which was the trade deficit with a country divided into the imports to that country. That has nothing to do with the tariff rate. I mean, just technically speaking, it has literally nothing to do with the tariff rate. And so what that means is now you’re boxed in logically if President Trump wants to do a reciprocal tariff reduction, for example. How do you do that? Because he actually has used a statistic for the tariffs that have nothing to do with the tariff rate and are actually just trade deficits. So the only way to actually rectify that statistic is to have Madagascar buy a bunch of American product, for example, in order to get their quote-unquote tariff rate down. That sort of stuff seems badly calibrated, even if you like the policy, for example. Speaker 5 Unless from a poker point of view, they spent many months declaring they’re going to do tariffs. And everyone thought they were bluffing. And so everyone said, there’s no way you’re going to do tariffs. It’s like someone in poker saying, I’m going to play every hand I get, I’m going to be crazy. You don’t believe them. And they actually have to do it in order to get the negotiating leverage that they need to be able to negotiate trade deals, ultimately. And they have to look a little crazy, maybe. I mean, that’s your position, Freiburg, 4D chess, or? I’m trying to rationalize one kind of rational reason for why a lot of smart people would end up putting that board up, that poster board up, where to your point, Ben, they said that these Are kind of the tariffs that are being levied upon our country, when in fact, it is simply the math of imports minus exports divided by imports. That’s what the number was. And it was maxed out at that number or 10%. And that’s what they did. So they did that basically as a way, in my opinion, it looks like, and I’m just trying to take a read on this, that they’re using this as a way to anchor for negotiations going forward to Make the case we are declaratively, crazily, off the friggin ship, going to do whatever the heck we want to do here in this administration. Now everyone takes them seriously. Now everyone shows up to the negotiating table. And now they can actually negotiate and then announce a series of win after win after win and say, we got this set of countries to capitulate today. This is the deal we worked out. It’s a totally unique deal. This set of deals we worked out today, this set of deals we worked out today. And basically getting all the trade representatives to the table by making the case that they’re actually willing to go all the way to the wall on stuff. So that’s the only way I can kind of rationalize this rollout, Ben. That’s what it feels like to me. For months, they’ve been very declarative. We are going to do tariffs. Besant said it to us on our interview. Lutnik said it to us in our interview, and no one took them seriously. I did. I did, (Time 0:38:38)
Trump’s Tariff Consistency
- Trump’s consistent messaging on tariffs signaled his seriousness.
- This predictability led Ben Shapiro to adjust his investment strategy. Transcript: Speaker 1 By the way. I will say that I took them totally seriously so much so that I called my financial advisor after the State of the Union address and told them to rejigger my stock and bond ratio in my portfolio Because I figured that something like this was going to happen. You went heavy treasuries. Yes, I went light stocks, I’ll say that. And the reason for that is because, again, I think that the thing about President Trump is that he may not be serious in every single thing that he says, but he is very clear that when he Says a thing over and over and over, there is no hidden motivation. And this is the part that I always have trouble with, with sort of the 40 chess reads on President Trump. There’s almost never a hidden motivation. He pretty much just says the thing that he thinks, right? It’s one of the things that makes him so popular and authentic is that there isn’t a 40 chess game being played. If he says that he wants a thing to happen, it’s because he actually wants the thing to happen. Now, the thing about President Trump, he’s also a realist. So if a bunch of bad headlines hit him, he may then change his mind and decide that he wants to drive a truck directly through the center of the tariffs because the prices are going up too Much on, for example, semiconductors. So one of the big exemptions from these tariffs is, in fact, in the area of semiconductors. Again, there you see a sort of couple of different justifications that are mutually exclusive that are fighting each other. One of them is the idea we need to reshore semiconductor production because it’s a national security asset. And the other is it’s we need to raise revenue on semiconductors. So he exempted them, which kind of, you know, kind of bollocks is up the logic. And I think that the there are a couple of tells that that isn’t what’s happening. It may listen. I think it may end up being the thing you’re saying. I think the most likely result of these tariffs is that within the next few weeks, the headlines are not good. President Trump starts driving trucks through the center of the tariffs. And then he starts getting wins from various parties outside that allow him to find an off ramp on some of these tariffs. Now, a company in Belgium says they’re going to build a factory in the United States. He has them to the White House. They have a big ceremony. And then he says, and as a result of this, we’re now lowering the tariffs in sort of the same way he did with with Colombia when he said not the university, the country, when he said he was Going to hit them with tariffs unless you accept these these illegal immigrants. And then they did. So that very well might be the offer. I don’t think that’s what’s going on right now. I think what’s going on right now is the strategy that Lutnik has repeatedly expressed, which is that they actually kind of like the tariffs. They actually think that this is good economic policy and that between 1880 and 1910 was an amazing time in American history. And so they do agree. I think that that a bad read on economic history because there are a lot of confounds there that are being ignored. Among those confounds would be the fact that- The Industrial Revolution? Speaker 5 Yes. Speaker 1 So a few, just to name a few. In the Industrial Revolution, extraordinary high levels of immigration, by the way, during that period. So you had an incredibly cheap labor base that was actually coming in into the United States at that time, massive expansion. No income tax. Of the American population, no income tax. So free-flowing capital. A newly discovered continent, right? Like truly, like many, many confounds, right? And by the way, less international trade generally. So tariffs aren’t gonna have the same sort of impact on global supply chains as they would now, where every product that you buy has gone through 10 different countries in 10 different Ways. So, no, I don’t think that that is a comp. But that doesn’t mean that Lutnik doesn’t think that it’s a comp, for example. And I think that when it comes to the rollout, again, a methodical rollout, I totally get the crazy man theory. And I think that sometimes President Trump does that. I’m hoping that that’s what he’s doing. But a good example of an off ramp he could have taken if that’s the thing he’s trying to do. So yesterday, in anticipation of this, Israel, which had very, very low tariffs on United States goods anyway, announced they’d removed all tariffs on American goods. There were no tariffs on American goods anymore. And the administration that afternoon listed their tariff rate at 33% and then hit them with a 17% tariff for a country that is 0% tariff rate. Speaker 2 And just use them as an example of a great partner. Exactly. Speaker 5 Exactly. Didn’t Canada do the same? Didn’t Canada drop tariffs like the morning of or the day before? Speaker 2 They were on CNBC and they said, we’re totally willing to go to zero. And then the anchors correctly on CNBC were like, well, then why haven’t you done that already? To Ben’s point, Israel did do that. And but I think your theory, Ben is like, absolutely correct. If you make this analogy to what he did with overturning Roe v. Wade, it is the same exact thing. He told us over and over again, I’m going to put two, maybe three people on the Supreme Court, I’m going to overturn it. And then afterwards, he kind of wiped his hands through it and was like, listen, it’s up to you guys. I had nothing to do with it. He will tell you what he’s going to do. He told you he was going to do these tariffs. He’s done them. And I do think there’s something embedded in what you said, Ben, which is I think he likes everybody to come to Mar-a or to come to the White House. And he loves doing deals. He’s addicted to it. He wrote a book, The Art of the Deal. He loves people coming to him, hanging out. And Chamath, maybe you could give us your perspective. Crazy man, very crazy grandpa. Or this is a negotiating tactic. Everybody has to come through him. Or Lutnick believes it, as he said, very clearly, I’m going to add a trillion dollars in taxes here. What do you think is going on here? Because if when I went through all the top people on the internet, all our group of friends who are deeply in finance, I can’t find anybody deeply in finance who’s not in the administration Who thinks this is well executed or a good idea. What’s your thought? (Time 0:43:50)
MAGA Over Markets
- Trump’s focus on MAGA, not the stock market, was evident.
- The tariff strategy prioritized long-term goals over short-term market reactions. Transcript: Speaker 3 Start by saying a couple of things. To use the Donald Rumsfeld quote, I do agree with Ben tremendously that this was a known known. We mentioned this last episode. Donald Trump has been speaking about tariffs for 40 plus years. So this is not a new thing. And I think that he tried this in Trump one. But to your guys’s point, it didn’t really go well, because he didn’t have the team around him that had his back. And so it was inevitable that he would have tried it in Trump two, he said it, and he’s been able to do it. So if you weren’t planning for it, whoever was vested in this outcome, you really needed to be focused on this. It was a known known. And so there was a little dereliction of duty if you were caught off guard, I think. That’s one. The second is, and we’ve said this all year since January 1 on this pod, we started it even with that poly market bet that I made, which is the Trump administration does not care about the Stock market. And by the way, the trade actually closed out. So congrats to all these people that won $650,000 on Polymarket. Speaker 2 And let me just explain. Polymarket put a betting market suggested by Chamath Paihapitiya. They are partners of ours. Magnificent Seven shrinks below 30% of S&P 500 in 2025. This was free money. Speaker 3 This was like the stock market giving out free money. Speaker 2 But why did this happen? Speaker 3 This happened because it was very clear to me early on that the rhetoric had shifted to say, we care about MAGA. We care about people that have working class and middle class jobs. None of those folks are deeply invested in the asset economy the way maybe some of us are. And so it was directionally clear. And by the way, Scott Besson, what a cold ass quote yesterday. The equity market sell-off is a MAG7 problem, not a MAGA problem. So there again, putting all of this into the realm of this is a known known. So I think it’s pretty clear. One, Trump has had a 40-year view on tariffs. They’re going to go through with this and they’re going to see it through. I don’t think you’re going to see this grand capitulation. Two, they are okay with the volatility in the equity markets. And then three, which is the other thing that we’ve been talking about a lot is where does this move our practical financing costs? What is this, right? We’ve talked about this. We have $6 trillion we need to finance in the next nine months. So the singular goal, in my opinion, of the White House has been move the tenure as aggressively and as quickly as possible. And look what they’ve done. As of yesterday, it’s unbelievable what’s happened in the tenure. You are kissing 4%. And we talked about this. If it had gone in the other direction, guys, 30 or 40 basis points, and it touched 5%, you’re talking about hundreds of billions of dollars of extra money that would not have been found That would have had to be printed, right? And now this is hundreds of billions of dollars that we will save. Speaker 2 If we cut rates, if the Fed cuts rates, that’s all predicated on them. No, no, no, no, no, this doesn’t matter anymore. Speaker 5 No, this is, this is, the Fed doesn’t control the back end of the curve. On the treasury, the treasury markets, the government sells treasuries. Speaker 3 Governments will now auction 10 years and the auctions will clear at around 4%. It is an enormous, like as an American, what we should all be thinking is irrespective of what you think you know or what you think you like about tariffs, we should all have a moment where We exhale because the long end of the curve is giving us a respite in a storm. And we should be incredibly thankful. Speaker 2 What I’m referring to, Chamath, is you said yesterday, Jerome Powell, you’re on the clock. So maybe you could explain what you meant by that. Okay. So that’s a different part of the curve. I understand it’s a different thing, but I’m just trying to put these two things together because those are the two things we’re saying this action took. Okay. So let’s play the ball where it lies. Okay. The Wall Street (Time 0:49:01)
Tariffs and Competitiveness
- Protectionist tactics like tariffs can stifle competitiveness.
- Free markets are crucial for incentivizing innovation. Transcript: Speaker 5 Well, I think there are three consequences not necessarily related to inflation that are just worth spending time on, one of which I don’t think gets talked about enough. The first is just the challenge of tariffs in general. And I shared this clip with you guys over the group chat yesterday from Ronald Reagan talking. Oh, it’s so funny. I have it chewed up. I actually edited it. Speaker 2 Let’s do that. Let’s play this clip and get your reaction. And today, many economic analysts and historians argue that high tariff legislation passed back in that period called the Smoot-Hawley tariff, greatly deepened the Depression And prevented economic recovery. You see, at first, when someone says, let’s impose tariffs on foreign imports, it looks like they’re doing the patriotic thing by protecting American products and jobs. And sometimes for a short while it works, but only for a short time. What eventually occurs is, first, homegrown industries start relying on government protection in the form of high tariffs. They stop competing and stop making the innovative management and technological changes they need to succeed in world markets. And then, while all this is going on, something even worse occurs. People stop buying. Then the worst happens. Markets shrink and collapse, businesses and industries shut down, and millions of people lose their jobs. The memory of all this occurring back in the 30s made me determined when I came to Washington to spare the American people the protectionist legislation that destroys prosperity. Speaker 5 So let me just say three things that I think are going to be important consequences, one of which doesn’t get talked about much at all. The first is the important point about the decline in competitiveness that arises when you use protectionist tactics like import tariffs. So ultimately, in order to be competitive in the market, you need to have a free market to test how good you are relative to your competitors. And if you use tariffs or other taxes or other government intervening systems to distort the natural forces of markets, meaning there’s a buyer and a seller, there may be multiple sellers, And ultimately the buyer will choose the best seller, then you’re creating a disincentive for American enterprise to be more competitive. We lost manufacturing because we weren’t competitive in manufacturing. Putting a tariff on other manufacturing countries does not make Americans more competitive. It basically gives American businesses a crutch. Give an example, David. So let’s talk about manufacturing. So if I’m using a traditional assembly line with low efficiency systems, I’m going to be more expensive to make a device than a Chinese factory that’s built with a lot of automation, High efficiency systems, etc. And so if I’m saying, well, to buy the Chinese product, you got to pay twice as much because there’s a tariff now, the American company does not have an incentive to invest in automating Or building better technology or adopting new technology to make themselves competitive in the marketplace. So that’s the challenge with tariffs long term, is that they distort economic consequences that arise in a traditional free market system. The second consequence I think is important is under this guise and in the near term, the effect of some of these tariffs is going to be the loss of revenue for a significant chunk of the American businesses. In particular, I’ll use one example. People may not remember this because it wasn’t that big of a thing. But between 2016 and 2020, during the last Trump administration, there was a continued kind of tariff and trade escalation between Trump and China. And during that time, China stopped buying American ag exports, and China’s the biggest buyer of American agricultural products. As a result, the Trump administration had to issue two support payment checks to farmers that totaled $28 billion in 2018 and 2019. Just because of that China stepping out of the buying market, American farmers represent a large amount of the voting bloc for the Republican Party. And so I think that the second consequence is going to be that there is going to need to be financial support, which means increased government spending if we intend to keep the tariffs In place and the global market stops buying American exports. That’s the second consequence. The third consequence, which is the one I am most worried about, which I think about a lot, is China had the state council meeting a couple days ago. And in that state council meeting, they announced a series of measures and a series of steps that they would be willing to take on IP infringement in the case of retaliatory tariff escalation In a trade war. What that means is that China may step up and say, you know what, we are disregarding all of the IP rights held by IP rights holders around the world. And they could steal IP more openly, more brazenly. And because they have a lower cost of manufacturing, they have a larger manufacturing base, a lower cost of power, they could basically take the only thing that much of American enterprise Relies on, which is our IP rights, and say, we’re just going to while people might say, oh, they already do that, they already do that. They do it to an extent. But imagine if China just made copies of Microsoft Word and started selling it around the world for $5. Speaker 2 Yeah, I mean, they did that internally for some period of time. Then they started to respect it internally, but they’ve never done a great point by shipping Disney films overseas. Speaker 5 That’s right. And so now imagine if they started taking all of American manufacturing drawings, blueprints, designs, and they have all this manufacturing capacity, and they sold everything at 10 cents on the dollar to all of the global markets that the U.S. Is now cutting trade ties with because of the tariff escalation. And China says, we don’t care about your IP rights anymore. We don’t care because you’ve cut us off. The rest of the world needs someone that will sell to them. I will also say China, one thing that’s not talked about, which I’ll add in, seems to have developed three nanometer semiconductor manufacturing technology, which is going to go into Production in Q3 of 2025, and will end up being in full production in 2026. This will move the base from Taiwan potentially into China. They are developing lithography systems, they’re developing advanced semiconductor manufacturing systems, and they will effectively have everything from energy, to the minerals, To the manufacturing capacity, to support and service all and the software now all of technology. And so we are in a really disadvantaged position if China does choose in this moment, to disregard the IP rights of (Time 1:01:11)
China’s IP Threat
- China’s potential disregard for IP rights poses a significant threat.
- They could leverage lower costs to dominate global markets. Transcript: Speaker 2 That’s a big, they have the ability to to swing back at us, Chamath, you want to wrap us up here? Yeah. Speaker 3 I’ll take the other side of all of this. Yeah. I’ll start with, again, there’s no point prognosticating when they’re just telling you what they intend to do. Nick, you want to play the clip? Speaker 2 I could see in the next few years that we are going to have to have some kind of a grand global economic reordering. It was something on the equivalent of a new Bretton Woods, or if you want to go back, something back to the Steele agreements or the Treaty of Versailles. Speaker 3 I mean, what is that? Just a kind of like refresher. What are we talking about? We’re talking about commercial relations between, at the time, 44 countries, right? This is a big statement. I don’t think that these kinds of things are said casually at a Manhattan Institute cocktail hour. And I think that people understand if you’re kind of like steeped in the history of it, how important these kinds of statements are. So I think I take this similarly to how I take Trump’s rhetoric on tariffs. And I’m spending some time trying to now understand how are the scenarios that could play out? Because I think David is right if you assume the status quo, meaning what are the risks? But what they’re saying is, we’re going to question this. We’re actually going to go here and just totally rewrite that. If that happens as part of this, all bets are off in my opinion. I don’t think any of us know with any certainty what a new economic framework would look like. And if Scott is basically prepping himself to say, hey, put me in coach, I’m ready. I would take that seriously. Speaker 2 Ben, what should be, let’s talk about onshoring and bringing these jobs, bringing these factories back to America. It seems to me a bit crazy that we’re going to make fast fashion and people’s Coachella wear and their anchor, you know, USB-C cables here. Pharmaceuticals, sure, we need that for strategic purposes. We obviously need the military and chips. But outside of that, is there some rationale here when we have the lowest unemployment of our lifetime and everybody wants to come here, you know, to immigrate to this country to doing These tariffs and trying to create jobs here that we don’t necessarily need. We have too much employment right now in the market and not enough bodies to fill all the open job wrecks. What do you think? Speaker 1 Well, I mean, I think one of the things that’s really fascinating is the kind of difference in messaging that you hear between the Treasury Secretary, Howard Lutnick, and the Commerce Secretary, and the President. I mean, they’re all messaging kind of different things. I think Secretary Besant is making the strongest case for what’s being done with this sort of long-term, what does reordering look like? And even there, I’m still lacking clarity on what a reordered world trade relationship actually, what is the end of the rainbow there? What does that actually look like when all is said and done so that I can kind of grasp exactly what that, what he wants that to look like? Well, I think that, you know, Secretary Lutnik seems to actually just like tariffs and President Trump seems to have a picture in his head when it comes to factories that we’re going To revitalize the steel mills, that we’re going to be, we’re going to be doing the kinds of jobs that we did back in the 1950s. It’s sort of a nostalgia that President Trump has in sort of his own mind about these sorts of jobs that, by the way, nobody in modern life actually wants to work at. If you were to work at a Ford factory in 1953 in a non-air factory riveting for a living, you would actually be quite unhappy. And you should be very happy that actually there are machines that do that now. And you hear this kind of talk sometimes bandied about, not just with regard to offshoring, but with regards to technology and machines. I mean, I’ve talked to, I remember a few years back in 2018, I talked to Tucker Carlson on my program, and he literally said that he would outlaw self-driving cars because it would get Rid of white trucker jobs, you know, blue collar trucker jobs in Ohio and Michigan. And when I said, well, that sounds kind of Luddite, he said, well, the Luddites had a point and, you know, then suggested that on the basis of safety, he would ban it. And I remember asking him, but those self-driving cars will presumably be more safe than humans driving. A magnitude safer, yeah. Yes, and what he actually said was, well, you know, you asked me on what grounds I would ban it, not whether that was true or not. But, you know, I think that that is, I think this is the danger that particularly tech runs when we’re talking about these sorts of things is to believe that the animus for trade relationships Around the world or the anti-competitive nature of many of the activities that are being taken are relegated solely to sort of the foreign sphere. I think that you could easily see that turn on quote unquote job loss that is caused by AI or job loss that is caused by technological gain. And the truth is that if you’re talking about job loss in the manufacturing sector in the United States, the vast majority of job loss in the manufacturing sector is not due to offshoring. It’s due to technological advancements. Manufacturing productivity in the United States has actually dramatically risen since the 1980s. Speaker 3 Okay, so let’s play conspiracy theorist for a second because, okay, you’re right, Ben. Like you want that clarity. I want that clarity. Freeburg wants it. J. Cal, everybody wants it. But if this moment, if it’s a catalyst to your point where everybody is forced into the room and Trump leads a grand bargain across the 50 or 60 most important trading partners in the world, What does that look like? It’s almost like, okay, we’re reestablishing something that’s akin to the United Nations and what the United Nations was meant to be post-World War II, but that institution has totally Failed. So this new thing exists purely on economic lines and cooperation. I don’t know. I struggle actually, to your point, to kind of imagine what are the outcomes, but there’s so many unbelievable outcomes in that scenario if they were able to get the top 50 commercial Mercantile countries together in a room and say, let’s hammer something up. (Time 1:07:21)
New Economic Order
- A new global economic order may be necessary, similar to Bretton Woods.
- This reordering could have unpredictable outcomes. Transcript: Speaker 1 I mean, I totally agree with that. I think one of my questions, however, is if you take a look at some of the examples that Scott is using there when he talks about the Bretton Woods Agreement, or if you’re going to talk about What Nixon did in debasing the dollar. Versailles. If you’re talking, I mean, Versailles at least would be a better example in the sense that you didn’t have a global hegemon at the time. If you’re talking about the Bretton Woods system, literally the rest of the world effectively did not exist in the post-World War II era. So what is everybody going to bet on? They have to bet on the American dollar. There’s no other choice. By the time that Nixon decides to go off the standard, essentially, he has to rely on the organization of the petrodollar in order to make sure that people don’t dissociate from the United States. What is the thing that’s going to draw people to the United States as opposed to looking to a rising competitor like a China? That’s a great question. Speaker 3 So what is that thing? What do you think that’s a great question? Speaker 2 AI comes to mind. Yeah. Speaker 1 I mean, AI is the only possibility, which is why I think the AI regime inside the Trump administration is so deeply important. I also think this is why I’m warning about, you know, the possibility that these sort of anti free market forces that are that are related to tariffs aren’t just related to tariffs in Some quarters. This is where populism can kind of run out of control and start to actually turn against some of its tech masters in some of these cases. And so one of the things that I’m very concerned about is if I was talking with Danielle Smith, who’s the premier of Alberta the other day, and she was talking about the fact that Canada, Like she’s she’s very conservative. Alberta tends to be a more conservative area of Canada. And she was talking about how if Mark Carney were to become prime minister of Canada instead of Pierre Polyev, that he actually is eager for the tariff war because it allows him to reorient Toward China and away from the United States. And there are countries that absolutely would love to do that. I mean, there’s a case to be made that the EU would love an easy off ramp with Russia and China and use this as an excuse as a way of reorienting back toward Russian oil, for example, and then Chinese markets, because that Chinese market is enormous. Speaker 2 These would be lower inputs, right? I mean, you have lower input costs, which means life better for citizens, and citizens like cheap things. They like cheap oil in their cars, and they like cheap cars. Speaker 1 They’ll be bringing BYD cars into Europe. And the thing that I’m worried about is when I look at the, forget about Europe and forget about Canada for a second, the tariffs that kind of shocked me when I looked at that list were all The tariffs on the Southeast Asian countries, right? All of those countries where production has been shifting out of China to places like, for example, Vietnam or Cambodia, the production has been shifting to those places specifically Because companies know that the United States is going after China. Well, now, why exactly would you manufacture in Vietnam when Vietnam is going to be with a 46% tariff rate on the basis that we have a 90… It’s more than that, Ben. It’s like they’ve made those investments over the last five or six years. Speaker 3 And so you have tens and hundreds of millions of dollars, billions of dollars of sunk costs. Now, what do you do in that moment? Speaker 2 These were specifically designed, Ben, to be a diversification strategy. Japan was paying their companies to build factories outside of China. And Apple was doing India, Vietnam to build AirPods and laptops, and even the iPhone being made outside of China. That diversification strategy is wiped out. Speaker 3 Did you watch the presser yesterday? The worst part for me, I only had one moment where I was like, oh gosh, he stopped on Sri Lanka and he goes, Sri Lanka. Good old Sri Lanka. 88%. Amazing Sri Lankan. Speaker 2 But Sri Lanka, very tough on us. I was like, sir, I’m America. Accepting. Go ahead, Ben. You can do yours. You can do your dueling about Sri Lanka. Speaker 1 You do a great Trump. Speaker 2 Okay. And that’s the reason why Ben Shapiro’s podcast, number two to all in now, because of the Ben Shapiro Trump impersonation. Ben Shapiro, great American. Have you been to the White House? I have, actually. Yeah. Have you been invited in this? Or are you still anti-Trump or never-Trumper? Speaker 1 He was a nasty never-Trumper now. He’s pro-Trump. Exactly. I had the same exact trajectory as J.D. Vance, except I didn’t end up vice president of the United States. But, you know, I think that, you know, again, when we talk about the rollout, the fact that, for example, the meme online right now, and I know we all kind of live in the moral, that the meme Is the president and J.D. Vance lecturing a penguin because on that chart is the Herd Islands. Have you even apologized for eating all that mackerel? Speaker 3 No, no, wait, what are you guys talking about? Speaker 5 There’s an island that got a 10% tariff, but there’s nothing on the island except penguins. Yeah. It’s a nation state. This is where I started. Speaker 1 Come on, have you even apologized? You got no cards. There are no cards. This penguin has no cards. Speaker 2 You have no cards to play. You’ve got a great tuxedo. At least you showed up in a tux. Okay. Good stuff. Speaker 5 Oh my God. Speaker 3 By the way, I think that Ben’s framing of this, thank you for that, because that was really helpful to me. You’re right. If we try to reconvene a new Bretton Woods, we have to have an anchor asset. So it’s a really great question. What is that anchor asset? It has to be AI. But then underneath that AI thing, we have these two very complicated problems. One is a meaningful energy problem. I’ve been talking about this now incessantly. We don’t have enough electrons. We just don’t. And then the second is what Friedberg mentioned before, which is that we have a very delicate technological supply chain to make the underlying silicon we need for these things. Neither are trivial. These are not things that can be easily solved. (Time 1:13:15)
American Ambition
- America’s strength lies in ambition and entrepreneurship.
- China’s progress shouldn’t be dismissed; they have shown significant ambition. Transcript: Speaker 5 Honestly don’t know if I can be dismissive of China like J. Cal says they keep stumbling and blah, blah, blah. I think that’s absolutely wrong. There’s a very good interview. What are those guys’ names from the Brookings Institution that do that podcast? Speaker 1 Ben, you might know these guys, the three guys. Is that who you’re talking about or is that a different podcast? Speaker 2 I’m not sure. It’s not in the top 100. I don’t know. Yeah, it’s not in the top. Speaker 5 They talked about China and they talked about actually the rise in China where they 30x GDP per capita and call it 30 years because they allowed entrepreneurs. Are you talking about Goodfellas? Goodfellas sounds right. Yeah. Yeah. That’s the Stanford one. That’s right. The Stanford one. Goodfellas. Goodfellas. Yeah. I think that was it. Pretty good product. They on. A good talk on. No, no, no. It’s Waldorf and Statler. Speaker 3 I think that’s their names. Waldorf and Statler. Those are the Hoover instruments. Goodfellows. H.R. McMaster, Neil Ferguson. Nick, find a picture of Waldorf and Statler for Friedberg to jog his name. They’re so great. They’re so good. Speaker 5 Anyway, they made the point that because China allowed the entrepreneurism of the individuals to let the market run free. And they have this throttle. When they let the people run free, they let entrepreneurism thrive. And then sometimes they pull the throttle back, J. Cal. And we’ve seen this. They just did that and they crashed the whole thing. Now they’ve pushed it forward again. And that’s what drives the growth and the improvement in productivity and this extraordinary abundance in energy, in mining and now in manufacturing. And it’s, I think, going to lead to a great era of prosperity for China. It’s pretty clear with or without the conflict with the US. They’ve dramatically improved the conditions in that country over the last 30 years in a really profound, historic way. So I’m not going to be dismissive and say that they’re stumbling. Let’s give it to Ben, and then I’ll tell you why I’m dismissive. Speaker 1 I mean, so first of all, I think that China does face some serious, real serious structural problems ranging from demographics to that. And I also think that, yeah, and I also think that if you take a look at sort of the history of economic fascism, which is what they’re attempting to do, which is sort of, you know, using Capitalist methodologies in order to prop up a very tyrannical government that will step in. In a centrally planned way, yeah. Exactly. And so for a short period of time, that seems like that will work. And then the problem is you can find yourself in a blind alley fairly quickly. And right now, AI is not a blind alley, but we also don’t know exactly which way AI is going to develop in the most profitable way. I mean, the amount of money that’s been poured into AI has not yet been justified by the amount of net on the return, on the actual investment, obviously. And so if you don’t, this is the benefit of the American market is that you have everybody chasing everything all the time. And one of those things is going to hit. The benefit of the Chinese market is you have everyone chasing one thing all the time. If that’s the thing that actually hits, they’ll do amazing. But it’s possible that they completely miss it. But the problem is, I think, and this is where you get back to the political in the United States and the necessity of avoiding a recession, is that, to me, the scariest thing that is happening Inside the Trump administration is not something that’s bad. When President Trump was inaugurated, there was one picture that spoke of the – that kind of summed up the inauguration. It was President Trump there with Tim Cook and with Zuck and with Elon and with all the billionaires behind him, all the tech bros right behind him. If there is a recession, what comes next is not going to be salutary to innovation, to investment, to technology, to anything remotely like that. And so the idea of short-term pain, it better be really, really short-term. The American people do not have patience for this. And if it goes sideways, then what you’re going to get is a populist revolt on the left and a populist revolt on the right that is going to take down everybody who is even remotely connected With this idea of free market capitalism. And so I think that one of the dangers in sort of attempting to manipulate the economy this way is that we’re saying, OK, we’re going to try these kind of methodologies of government control In which we rejigger the world economy in this way and that way. And then we’ll magic our way out of it with stable coin and AI. Maybe, or maybe the best way to do this would actually be to allow the thing to thrive that has always thrived in America, which is lower the regulations, let people innovate, let people Fail, let people succeed, get the hell out of the way. And yes, actually do the things that you need to do in cutting government debt by doing the hard things. And the only way you’re going to be able to do all those things is through continued success, not paying to get to some long-term gain. It’s got to be entrepreneurship. And there (Time 1:25:15)
Celebrating Success
- Focus on celebrating success and entrepreneurship, not victimhood.
- Empower individuals to take responsibility for their future. Transcript: Speaker 1 Have a suggestion. And it’s actually shockingly easy. President Trump has a visceral connection to blue collar workers in this country. Clearly, he has a visceral connection. He should stop preaching that blue collar workers are getting screwed and start preaching that they’re succeeding because it’s actually true. Tell the truth. Yes. Yes. I mean, I think that the fib that politicians always make bank on is the idea that, for example, the middle class in America is completely dissolved. That is not statistically true. The middle class has turned into the upper middle class. Okay. And actually, all Americans – I say this on my show all the time. People have this, again, this sort of rosy-eyed view of the 1950s, which, again, was a historical outlier because the rest of the world didn’t exist. It had been destroyed. But they also have this bizarre idea that you were better off to be 30 years old in 1980 than you are to be 30 years old in 2025. And all I can say is in 1980, the only dude with his cell phone was Gordon Gekko and he was a shoebox and he was holding it to his head. The reality is that everything in your life is better in 2025 on a material economic level than it was in 1980. And the lie that politicians tell in order to gain power is they say you’re getting screwed. Somebody is screwing you. I can unscrew the screwing. And so there’s there’s this constant sort of race to the bottom in terms of this rhetoric. And what you end up with is in the end, what can I promise you that I can then blame somebody else for not having fulfilled the promise? President Trump, I think, could avoid that because of this unique connection that he has with blue-collar people, where he could say, listen, we’re all on the same side here. What we’re doing here is innovation. I thought the most important line that I heard from President Trump during his victory speech the night that he won was when he said to Elon, and it was kind of a throwaway line, when he Said, we love our geniuses. He said, we love our geniuses. And I thought, yes, that’s the thing we need. Celebrate billionaires, celebrate success, celebrate entrepreneurship. And this could be you. And we’re going to have hiring programs, as Mark Andreessen has talked about. We need to have hiring programs that are specifically designed to find the best people, not just abroad, but also in the United States, who might be underserviced in rural areas of the Country or in blue-collar areas of the country. Find the next JD Vance. Find the next guy who really needs that hand up. Like all those things can be done. A rising tide will lift all ships. But this is the problem with the short term pain plan. Americans have a long memory. And when it comes to politics, I think this happened with the Biden administration. People, their relationship with politicians is sort of like a married couple. And good married couples, you know, they kind of talk through the minor problems that they’re having in their marriage. And then things, you know, continue to maintain and grow and get better. Bad married couples, what happens is that they sort of ignore the kind of minor annoyances for years at a time. And then something bad happens and the bottom just goes right out. And this is the thing that I’m afraid of for the Trump administration. Everybody’s willing to ignore the things that are kind of mildly annoying, like penguins at the White House or whatever, up until the point where there’s a serious recession. At that point, everybody kind of looks around and goes, why are we even doing this? I think that’s exactly what happened with Biden, with the Afghanistan withdrawal, for example. Is why I’m being critical of the tariffs. It’s not because I want Trump to lose. It’s because I want Trump to win, right? I think he’s doing too many important things like the stuff that Antonio is doing. There are too many important things happening to roll the dice on a strategy that isn’t even being articulated. If you’re going to make the case for a long-term gain, I need to know what the long-term gain is so I can make the case to the American public as to why they should endure the short-term pain. You know you’re having surgery because after the surgery, you’re going to feel better. But if I say you’re having surgery, it’s going to be some short-term pain. You say, okay, how am I going to feel after the surgery? You say, well, I don’t know. You know, maybe. Maybe. Who knows? Speaker 2 Then why am I having the surgery? We have so many job openings. We have the lowest unemployment of our lifetime. As you said, consumers today can get and live an incredible lifestyle that the rich didn’t have in 1980. The car you can buy today can drive itself for 20, 30, 40k. You can buy a used Tesla and have this car that’s better than any car made in the last 50 years. So you got to keep a positive. Then think about generation tool belt. You’ve got all these, you know, plumbing jobs, electrician jobs, construction jobs that pay massively hourly wages that are available for people today. We have too many job openings today. And you never hear Trump say that. To your point, it’s always this, like, everything’s a disaster and I’ll save you when, in fact, you don’t need saving. Go ahead, Freebird. Speaker 5 I’ll answer to Moff’s earlier question about what America can anchor to, to attract the rest of the world. And I think it’s what’s been the American story from the beginning which is ambition we pioneered the west we launched the industrial revolution we went to space we landed on the moon We had the Manhattan project we unleashed the information technology revolution with the development of the transistor. The ambition is what’s been kind of consumed by China. In the last 20 years, they’ve built 30,000 miles of high-speed rail. In the next 15 years, they’re going to add more electricity production capacity than the United States times two has today. There’s nothing short of ambition coming out of China. And it’s what we’re lacking. All of our political gambits, all of our debates are all centered around what we’re trying to fix that went wrong in the past, what we did wrong, and what we got to do to make it right. And we don’t talk at all about the ambition of where we can lead the world to next. China’s the only one that’s doing that. And I think that’s where we need to kind of have a bit of an important pivot on the global stage if we want to be able to kind of attract partners and also to have Americans think outside of This week, where are we headed? And I just, I don’t know. I mean, I don’t know if you guys agree, but I just feel like that’s one of the key things that we’ve kind of lost track of. Speaker 3 NERC put out a study, just like this is very tactical, but it’s part and parcel of what you and Jason are talking about. Do you guys know that about 25% of all of our utility workers in America became eligible for retirement between 2017 and 2022? I did not, no. So most of the people, 56% of all utility workers now have less than a decade of experience. You know what that’s resulted in? In 2021, the average US customer of an electric utility experienced seven and a half hours of service interruptions, and it’s just growing. Speaker 2 I think the average plumber’s age is 50-something. We can’t get people to become plumbers. Speaker 3 NERC says that 19 states now in the United States can face rolling blackouts during normal peak conditions if these issues aren’t addressed. And by the way, that’s a human capital problem. But if you multiply that by 10 and 20 and 30 times, there was a different tweet. I don’t know, Nick, if you could find it, that talked about an organization trying to find people to help build nuclear submarines. Did you guys see this quote? Where they needed 100,000 people to build nuclear subs in the United States, and they could barely find like a few hundred? Speaker 2 Yeah, we need to get better at this stuff. I mean, the good… (Time 1:34:50)