Dean Baker (14:58)

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Stacey Abrams (15:31)

Dean Baker, welcome to the show.

Dean Baker (15:34)

Thanks a lot for having me on.

Stacey Abrams (15:37)

Okay, so last week I had Ryan Holiday on as a guest and he reminded us that when we're listening to the news, our very first question should be cui bono? Who benefits? And so to start answering that, I would love to ask you to help us give our listeners some guidance. So I want to give them the ability to process what they're hearing. So I'm going to have you cover a few basics. So first and foremost, what are tariffs and how do they work?

Dean Baker (16:10)

Well, tariffs are taxes on imports. And I harangue a lot of reporters cuz I think people are confused on tariffs. I think possibly our president's confused on tariffs, cuz they're not. They talk about tariffs. We're gonna impose a tariff on China, we're gonna impose a tariff on Canada. And I think President Trump, I won't try and go into his head, but he talks like China's gonna send us a check. Canada's gonna. That's not how it works. It's a tax on our imports from China. It's a tax on our imports from Canada. Now there's an economic debate. How are taxes divided by different parties? You know, if we put a tax on gallon, pay that full tax, well, pretty much all of it, but maybe some of it will be borne by the oil companies. But we know most of us will pay that tax. Tariffs, taxes on imports, we know people in this country will pay those taxes. So tariff, I think complicates it. I think it's helpful just to call tax on imports. Everyone can understand what that is.

Stacey Abrams (17:04)

Okay, so with that understanding, we are trying to figure out who benefits from this. I mean, basically we are watching economic chaos, we're watching this rise in taxes. So who benefits? What's the cui bono answer?

Dean Baker (17:22)

Well, there's three, three parties. One thing is, I'll tell you the Trump administration story and then I'll tell you what we know for absolute certainty. The Trump administration story is we're going to re industrialize America. So we'll impose these big tariffs and then instead of buying things from China or Canada, wherever we're buying them from, we'll be building those things here. Now that really isn't plausible for a large number of reasons. I won't go through all of them. But I'll just say one thing that we could again say with absolute certainty. If that's your goal, then what you want to do is put your tariffs in stone. And what I mean by that is you're going to say, you know, we're going to have a 20% tariff, 30%, and it's going to be there. So count on it. And my reason for saying that is I'm an auto company, I'm a steel company, I'm a textile company, whatever it is, if I make a decision to build a factory in the United States, I want to know that that 20% tariff, that 30% tariff, that's going to be there for five years, 10 years, 15 years, because I'd be an idiot if I build that factory. And then next year the tariff's gone. Now the problem with the Trump administration is they're changing it by the day. So we had Liberation Day, April 2. You know, if people remember that, you know, we're going to produce everything here, then the next week, Trump goes, oh, no, you know, we changed the story. People have to come and talk to me. They have to kiss my ass. That was his term. I'm sorry about the word. That was his term. So that's not a path to reindustrialization. That's very clear. So, again, we could tell a story, and I won't go into great detail. The Biden administration was trying to do that. His tariffs were in stone. They also were going with subsidies. So he's saying, we want to build up our electric car industry, we want to build up our clean energy. And that was the idea, was this is written stone. We had tariffs going along with subsidies, going along with training programs. So that was very concrete. What we're seeing here is chaotic, and it's very hard to see how that could lead to reindustrialization. Now, who benefits? Great question. Two things we could again say for certain. One is, insofar as we have the taxes in place, that's raising revenue. Who does it raise it from? Overwhelmingly working people. So we have an income tax we know that's designed to be progressive so that rich people will pay a higher share of their income than lower income people. The exact opposite with terrorists. And there's two reasons for that. One is that rich people don't spend their whole income. So an Elon Musk, these other very wealthy people, they couldn't spend their whole income even if they wanted to. So you're taxed on what you spend. And in the case of very rich people, that's a relatively small share of their income. Most working people earning 40, 50, 60,000 a year, they're spending pretty much all their income. The other part of that story is they spend it on goods that are subject to the tax. So when you get higher income people, and I don't mean just the very rich, but say someone earning 2, 3, 400,000, what they spend is on services. They're taking vacations, they're going to restaurants, they're going to gym memberships. I mean, nothing wrong with that. But the point is that the tariff doesn't apply to those things. It doesn't hit them anywhere near as much as when we're buying clothes, when we're paying for our shoes, when we're. That's very, very direct. So it's a very regressive tax. That's again, another thing we could say for certain. The other thing is what Trump told us. Kiss my ass. What does that mean? Come and offer me bribes, whatever you want to call it, come and offer me favors. You know, so he wants countries to come and offer him favors. He wants companies, they want Apple to pay him to get a lower tax, which they did on smartphones that are made in China. And that's why most economists, I shouldn't say most economists, almost all economists are very wary of tariffs because it really is a recipe for corruption. Because someone can come and say, we want special treatment. And it happens all the time. And Trump is being as explicit as possible. Come and kiss my ass. I don't know what else you could say that makes it more clear than that.

Stacey Abrams (21:13)

Can you talk about trade deficits and why it is that America has a trade deficit or trade surplus with different countries and how we need to think about that in the context of these tariffs?

Dean Baker (21:27)

Well, there really no particular meaning for a trade deficit with any specific country. So some countries, we have a lot of pretty poor countries in Africa, they export coffee to us. They export cocoa. They're poor countries, so they're not gonna import much from us. Cause they can't afford it. So do we think they've done something wrong for selling us cocoa, selling us coffee? Now, overall, we could say, are we bothered by the trade deficit? I'm not particularly. I mean, it means we're getting goods that we're not paying for, at least in the current year. But if we are, I mean, again, there's other things we might look to do, like build up our industry through industrial policy. But again, there's not any obvious problem. Crisis. I should also point out, I think a lot of people don't recognize this because you'd say our trade deficit's 900 billion this year. It was actually much larger if you go back two decades. So if we go back to 205, our trade deficit as a share of the GDP was about 6%. Currently it's about 3%. So maybe people will still say that's too high, but the point is it's a lot lower than it was two decades ago.

Stacey Abrams (22:31)

So what's the status of the Trump tariffs on Mexico and Canada since they were the first wave of this rollercoaster tariff policy?

Dean Baker (22:40)

Well, as I understand it, there's 25% tariffs, except on the items that are covered by the United States, Mexico, Canada, trade agreement, which, again, that's most of our trade. And one of the bizarre things is Trump has been anxious to denounce this. He even said the trade agreement was negotiated by morons. Well, he negotiated that deal.

Stacey Abrams (23:02)

Yeah, yeah.

Dean Baker (23:03)

So this was a rewrite of nafta, and he's very proud of it. He was boasting about it. You go back when it was 219 or 220. I forget exactly when he signed it, but he was boasting about it. How this trade. Yeah, yeah. So I'm not sure there's some amount of goods that are taxed at 25%. They're also subject to the 25% tax that he's imposed on aluminum, steel, copper. I think there was something else in that category. So it's a real mishmash. And again, this speaks to the problem of his tariffs. I mean, I understand there are people who are more on top of it than I am, but you want the companies to know that, you know, okay, if you're producing steel, here's the tariff that's going to be there. If you're producing copper, here's the tariff. And as it is, these are jumping all over the place. And that's not a way to do economic policy.

Stacey Abrams (23:51)

Since the announcement and the subsequent changes to the tariff policies, we have watched the stock market respond dramatically in multiple directions. But there is a consistent connection between an announcement, a pronouncement, a shift, shift, and the stock market reacting in fairly dramatic fashion. But we also know the stock market can seem like a bit of an abstraction to a lot of people. So I'm gonna ask you to break it down. So, first and foremost, what caused the stock market to plummet when all of this started?

Dean Baker (24:24)

Well, most people, most, I'll say most investors, most people involved in the business world see tariffs as very bad news. Cause we have a thoroughly intertwined international economic system. And this is like throwing a huge monkey wrench into it. So Donald Trump might have this or that vision. I don't think anyone shares that. So, again, I don't know whether he has a vision or he doesn't. I'll just say there are very few people in the world that see his tariffs as good news for their companies. So when you think of a company, certainly an Apple, they produce all their iPhones in China or other developing countries. If you look at our auto manufacturers, all of them are thoroughly integrated in the international economy. They sell overseas, they buy overseas, overseas, so you're throwing a huge monkey wrench in. So when people see these high tariffs, they go, this is bad news for the economy. It's going to be bad news for corporate profits. And that's what the stock market is in principle looking at. What are future corporate profits going to look like? And I would agree with that assessment. If you put those tariffs in place, they're going to be a lot lower than they would have been otherwise.

Stacey Abrams (25:30)

So one of the major concerns related to the stock market for the average person is its potential impact on their retirement accounts. I know that I have to assiduously avoid looking at my 401k and my Roth IRA accounts, because I will weep. And for those who have a decade or more of work left before retirement, it's reasonable to assume that their accounts will rebound. But for those who are retiring eminently, that can be a very different story. So what should listeners who are about to retire or have a loved one who is retiring, what should they know about these vacillations that we're seeing in the stock market?

Dean Baker (26:10)

Well, I wish I could give good advice here. I'll just say a couple of things. One is that they're right to be very worried. So that's clearly true. And the fall we saw to date, it's bad news. I'm not going to tell anyone to be happy about it, but I'll just say if you go back to 2019, my mother, who's well into her 90s now, but she's going, oh, I can't take this big hit. She can, but she has a pension. That's why she could take the big hit. But I point out to her, if we go back to when we had Covid, the stock market is up way more than you had a right to expect. So even after the fall. So again, I don't want anyone to be. No one should be happy to see the stock price down 10% or whatever they are as we speak. But that's a hit. The other thing is that I would encourage people to diversify. The worst thing to do is panic and just sell everything all at once. But, you know, one of the things that many people have encouraged and you know, even small investors, you could do these with mutual funds, is to get international funds. So you can get, you know, a fund that includes European stocks, Japanese stocks, you know, so it protects you. You know, I mean, none of us want to see the US Stock market go through the floor, but you'd at least be somewhat protected. The last point is, even if you're retiring, you shouldn't be in a situation where you have to sell all your stock at once. So it might be a good idea, and for many people, it is to buy an annuity. You know, so the idea is, you know, you have 200,000, whatever might be in your 401k. So you take that and buy annuity. You don't have to do that with your whole fund. You could do that with 100,000, buy annuity with that, see what happens with the other 100,000. Does it go up? Does it go down? I don't have. No one's giving me the future. But you're not in a situation where you have to do that all at once.

Stacey Abrams (27:52)

Well, as you described, one of the issues of diversification is sometimes going into the bond market because that, until recently, was one of the most solid investments that a person could make. As you know, anytime you buy a U.S. bond, you're essentially loaning the government money and you receive interest. And investors all over the world have relied on these bonds because of absolute faith in the US Government and its commitment to standing by its debts. So I was watching with great curiosity as we were watching, that treasury yields were going up even as the stock market was plummeting. Can you talk about why that headline that treasury yields are up is so jarring and why this is unusual?

Dean Baker (28:40)

Yeah, I mean, it was really striking. There are two things I'll say here. One is that the conventional view, and I'm inclined to agree with it, is that the investors in the treasury market are sort of more informed. They're more institutional investors, they're bigger money investors, if you like. These are people that study the fundamentals. They look at the economy closely. So the question is, why are bond prices falling, interest rates rising? Usually when you see the stock market go down, the thinking here was we're at greater risk of recession. Again, a few I'd be inclined to agree with. You'd expect to see interest rates fall. We are seeing the opposite. So the general view is that people were looking, investors were looking at the United States as what do things look like two years out, three years out, five years out? And they were getting very worried in a way that they aren't typically about the US Economy. So we know when you look at developing countries, they're erratic. They do economic policies that sometimes aren't very good. People don't think of the United States that way generally, apparently, they are increasingly thinking the United States that way. So that's a scary prospect. And that's why so many people are looking at the bond market. I'll also mention the currency market. The dollar is falling a lot against the euro and other major currencies. Again, not a vote of confidence in the U.S. economy.

Stacey Abrams (30:01)

Okay, so let's go to China, which is a very complex part of this trade story. And we have watched this escalation in tariffs and retaliatory tariffs and how tariffs are being justified. But we've also seen this pause and then, you know, restarting. We've seen the idea that we're going to put tariffs on our electronics and then we took them off, that there were national security implications for tariffs on semiconductors or the chips that power so many of our consumer electronics. And then there was the possibility that those were going to be imposed or not. We still aren't clear. But what we do know is that as of Sunday, April 13, China responded by blocking access to rare earth minerals and magnets, which are essential for the car, the semiconductor, for aerospace industries, as well as for many of our military contractors. What does it mean for the average person that we are facing a trade war with China?

Dean Baker (31:14)

Well, it could likely mean a lot. I mean, just at the basics, we import about 430 billion a year of goods from China, and we now have, I guess we're 154% tariff. Now, very few things are going to come in at 154% tariff, but what that means is we're going to be looking at the goods we do still import from China with the tariffs costing us like twice as much as what they do currently. So smartphones, again, he exempted those, but if those go back on, we'd be paying twice as much for the next smartphone you buy. We get a lot of clothes from China. We get dishware, furniture. We get all these things from China. We'll be paying twice as much for those. Now, the bigger picture, in terms of the economy China has, I sort of think Trump doesn't know what he's dealing with. China, really. I won't go into measurement issues. It's a larger economy than the US and it certainly exports way more than the US Does. And Trump thinks he holds the cards because we buy stuff from them. They don't have to sell to us. They could sell to their own people. I've joked if Z wants, the president of China wants to, he could Send everyone a $2,000 check and put Donald Trump's name on it. I don't know if he has a sense of humor, but I think that'd be pretty funny. He doesn't need us to buy their stuff. We have longstanding economic relations that benefit both countries. But at the end of the day, Trump really holds very few cards in this story. Now, if he blocks, if Z blocks, well, he has blocked them. If he continues to block the export of rare earths, that's going to be a huge problem for large sectors of the U.S. economy because these are not easily replaced. I mean, over time they can be. I mean, that's the thing with most things. You know, we can build up an internal car industry. Takes years, but we could do that. We could. You could get rare earths. Many places they aren't actually that rare, but it takes time to develop them. They pollute like crazy. So we could do that, but we can't do that tomorrow. So we would see a lot of our industry seriously hampered if this ban on Chinese exports of rare earths stays in place long. So we would feel that.

Stacey Abrams (33:20)

So having walked through all this, what would a better approach be to trade that benefits Americans?

Dean Baker (33:28)

Well, I think particularly with China, we should look to go more route of cooperation. I mean, we could look at China and say, look, a lot of things about China we don't like. Clearly it's not a liberal democracy. They treat the Uyghurs horribly. I mean, it's a long list. No reason to go through that. We agree it's not our ideal country by any means, but we don't have a mechanism to tell them what we think they should do. To my view, we should try and look and cooperate as much as possible, which to some extent we had been doing. But look at something like electric cars. They now make a high quality electric car that's selling for $13,000. Imagine being able to get a new car that's very cheap to fill up. You know, you get your. And now you could do it within six minutes. You could, you know, recharge your battery. It's roughly the same time it takes you to fill the tank of gas, you know, so suppose we said, okay, we're going to let you sell those cars here. They're subject to huge tariffs. This was even under Biden. But we'll let you sell some number of those cars. We had this with Japan, voluntary export restraints. So we'll give you restraints. Let's say 10% of our market, I'm pulling it out of the air. Maybe it should be 5, maybe it should be 20. But you get 10% of our market. And you know, so people will get these cars and see how good they are. And we want you to transfer technology because we want to produce it here. You know, we want our companies to be able to produce it. That's the, that's a quid pro quo. Same with solar panels, same with batteries, same with other things that would help us move to a clean energy transition. So I think that would be a much more realistic strategy that would offer us a lot of benefits very, very quickly rather than pain for really no obvious benefit. I mean, and even Trump is acknowledging, oh yeah, we might have a painful period, but then at the end of it we'll get something. And everyone's going, what are we going to get? So I'd rather see us do a cooperative approach. And that's not saying, it's not endorsing China or anything, it's just acknowledging reality.

Stacey Abrams (35:20)

Sadim, you talked about industrial policy and we saw Biden do this, as you mentioned, with clean energy and we saw the CHIPS act, the science Act. And the argument that's being made by the Trump administration is that what he's trying to do is bring manufacturing back to the US and that the short term pain is worth the long term. Good. How do you think about this and how realistic is it given the advancements that we've seen in manufacturing? So I guess I'm asking two questions. One, the sort of macro question of industrial policy, of bringing manufacturing back to the country, and then a second question which is, is there going to be a moment and is that the right thing to do for our economy, to try to internalize it all and think that that's going to be long term benefit?

Dean Baker (36:13)

Two points here. First off, the Biden administration was incredibly successful and it just, you know, it pains me how little credit they got for that. Factory construction doubled. I mean, just an unprecedented. I'd have to go back, I haven't checked carefully. But I'll tell you, it was not recently, not in, you know, last 40 years that you've seen anything like that. Growth in manufacturing, of factories, production, construction of factories, to put the term correctly. So that doubled. So the CHIPS act, the ira, the Inflation Reduction act, they worked in really, really big way, probably almost better than anyone had a right to expect. So we were doing exactly what Trump said he wants to do. And this is particularly in semiconductors, clean energy, that's what they focused on. So we were doing that. It's a good thing to do in specific industries. You know, again, that's the idea of industrial policy. Now, do we want to do that with everything? Why? Why? And you know, this again, it just, it defies Any common sense, any logic. I did the arithmetic on it. Currently 8% of the US workforce is employed in manufacturing. If we balance trade so, and we did entirely through increased production, manufacturing instead of agricultural output or services, we would go from 8% to 9%. That's not going to transform our economy. The other part of the story is manufacturing jobs are not necessarily good paying jobs. They were half a century ago, but that was because of unions. So the manufacturing sector used to be very heavily unionized. One third of manufacturing workers were in unions back in 1980. Currently it's 8%. It's a little better than the 6% in the rest of the private economy, but it's just not that different. And in fact, the wage premium that manufacturing workers have historically gotten, and I know about those jobs, I went to grad school in Michigan, knew about Detroit, those have dwindled. So the wage premium in manufacturing is basically zero now. So there's no reason to think that a manufacturing job is going to be better than a job in health care job in any other sector. So it really is wrong headed from almost every angle.

Stacey Abrams (38:18)

So as we wrap up, we know that keeping up with the news on economic issues is incredibly challenging. And you and the center do a fantastic job of really researching and helping people understand what this means. But do you have any favorite trusted resources that you would recommend for folks who don't want to go back to school and get a degree in economics but want to understand what the news is telling them every day?

Dean Baker (38:47)

I wish I could say a single source. The Washington Post and New York Times have had good coverage. Again, I'm critical of a lot of what they do, but they have had generally good coverage. Someone I recommend very highly, Paul Krugman, my friend, you know, people know him and used to write for the New York Times. He has a substack that people could get. Adam Tooze also has a substack. So those are two I'd recommend highly. But again, you know, day to day basis, Washington Post, New York Times, they've done, you know, really a lot of very good coverage on things that are hard to do because the Trump administration is threatening them. And you know, let's hope they can continue to do it.

Stacey Abrams (39:20)

Dean Baker, the co founder of the center for Economic Policy and Research and astute economist, thank you so much for joining us here today on Assembly Required.

Dean Baker (39:30)

Thanks a lot for having me. On.

Stacey Abrams (39:33)

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Dean Baker (41:08)

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Beth Benneke (41:15)

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Dean Baker (41:20)

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Stacey Abrams (41:42)

Joining me now is Beth Benneke, a mom, entrepreneur and founder of Busy Baby, as well as Richard Oswald, a lifelong farmer and the vice president of the Missouri Farmers Union. I want to thank you both for joining me.

Beth Benneke (41:56)

Glad to be here.

Richard Oswald (41:57)

Thanks for having us.

Stacey Abrams (41:59)

So I'd like to start by asking each of you, and I'm going to start with you, Beth. Can you tell our listeners a little bit about yourself and how you got into your field?

Richard Oswald (42:08)

Yeah, I mean, like you mentioned, I'm a mom. I was in the army for 10 years out of high school and then 10 years in corporate work before I met my now husband and started a family. And I ended up where I'm at now because after my baby was born, I identified a problem that all new parents have, which is babies dropping and throwing everything within their reach. So I invented a placemat that you can suction down to the table and Attach their toys so everything stays within reach and off the ground. The business I started when my son was born eight years ago and that's what I'm doing today. I run the company with my brother, who's also a veteran, and we've expanded our product line to eight products that keep things within reach and off the ground, at home and on the go.

Stacey Abrams (42:49)

Well, fantastic. I will say I can very much appreciate that. I actually co founded a business with my business partner more than a decade ago called Nourish, which was for busy moms who had to mix a bottle and take it on the go. And you know, realizing that trying to mix a bottle, find clean water, get the formula in there. So we created the first, you know, disposable self serve bottle. But we can talk about the business challenges of doing what we do. So congratulations to you because Busy Baby is just doing extraordinarily well.

Richard Oswald (43:21)

Thank you.

Stacey Abrams (43:23)

And then, Richard, let's talk about you and your family of farmers.

Beth Benneke (43:28)

Okay. Well, I'm 75 years old and been farming all my life right here in the same spot. I have two children that live nearby and both of them are engaged in farming and livestock production. Both have cow herds and my son farms with me. My daughter and her husband have a electrical contracting business and farm on the side, which a lot of people do anymore. And Brandon and I farm together.

Stacey Abrams (43:56)

Fantastic. Well, I cannot say that I have any experience farming. I am, I've been to farms. I actually was the legislative livestock Roundup grand champion. So I know how to set a cow. But other than that, I will just be deeply appreciative of your, your capacities. So, Beth, I want to talk a little bit more about your business. As you mentioned, you have been, you've been solving a problem and in fact you did it so well. You were invited to Shark Tank and you recently brought your products to big box retailers like Target and Walmart and you're thriving. And then came the tariffs. Can you talk to us about how you're thinking about these tariffs and how they're impacting you and your customers?

Richard Oswald (44:41)

Yeah, I mean, I'd say we were thriving. We had a couple actually hard years and this last six months has been nothing short of amazing. Getting contracts with both Walmart and Target. And we felt like we were really coming out of a hard spot and up and up on the rise and really reaching some huge milestones for our business. And in the last week, I feel like my legs have been cut out from underneath me. I have currently product in China that is produced and ready to come to the US that I can no longer afford to bring into the country. So what that means for me is when I run out of the product I currently have in my warehouse, which is maybe two to three months worth of inventory, I no longer have anything to sell, which means no revenue coming into my business, which means I can't pay my employees, I can't pay my loans, I could end up losing my house.

Stacey Abrams (45:29)

I'm so sorry. Can you talk though, for a second? For those who have never been in the product delivery business, there are always questions about, well, why are you sourcing it from China? Why not source it from nextdoor? Can you explain, explain to folks why sourcing from China is the answer for so many small businesses, especially those getting started?

Richard Oswald (45:51)

Yeah, I mean, the answer is simple. We don't have the infrastructure in the U.S. we don't have enough factories in the U.S. and because most of the resources used to do production mine is silicone that comes from outside of the U.S. the factories in the U.S. need to order quantities that are large enough to get bulk pricing, which means the people they service need to be running production runs of enough units to make it worth their time. Because every minute that a production line is not running because you're switching between companies or doing small runs, they're not making money. So for them to stay in business and for their business models, they need to run as long as possible. So as a startup inventing a product that didn't exist before, I was really unsure if people were even gonna buy it. I didn't know if this was something that was even going to be something people would want. I could risk and did not have the money to do a production run of 20,000 units, which was like a minimum order in the U.S. so I had to start in China because that, that's where the expertise lies. That's where factories are willing to take a risk and do small unit runs, hoping that they do a good job and you'll do well and your business will grow and they'll get to grow with you.

Stacey Abrams (47:08)

So, Richard, in many ways you're in the opposite boat from Beth. You, you don't have to depend on importing from China to run your business, but exporting to international markets. So can you walk us through the products that you ship out and how much of your farming operation depends on these exports?

Beth Benneke (47:27)

Well, as I said, I've been farming for a long time now. And when I started out farming, we had livestock, we had chickens, I had a milk cow and row crops were something that were just kind of another small part of our enterprise. But farming in the United States has evolved to the point where a lot of people who started out the way I did now farm mostly only row crops, corn and soybeans primarily. And we do a really good job of producing those things. And we have markets for them here at home. But we always produce more than we can use here. And crops come every year, no matter what. It's another year just like this year. The, you know, the calendar pages are flipping and it's time to plant. We don't have a choice to wait or see if things get better. We just have to do it right now. And we've always relied on China to be a customer for soybeans. That goes back to when Richard Nixon was president and he went to China to try to, you know, involve them in business with the United States and trade. And we built up business with China, we built up business with Mexico exporting corn, because we can grow more corn than they can, simply because we have the soil and the climate to do more of it. And we rely on those export markets to use up that surplus that we always produce to keep the prices profitable for us so that we can feed our families and pay our bills and, and pay our bank loans off. And so when something like this comes up, it makes it very difficult to decide really what the future is. Because a lot of things I'm already committed on, I'm committed on loans that go for another two or three years. I can't just stop borrowing that continues as well. So justifying what I do to the banker becomes more difficult. And the banker's under no obligation to provide financing for me. If he thinks I'm a bad risk, he'll just say, I'm sorry, I can't give you any money.

Richard Oswald (49:26)

I just feel this in so many ways for Richard. My husband's a sixth generation farmer and we're going through the same thing.

Stacey Abrams (49:34)

And what both of you talk about is the uncertainty of it all, that you have to make decisions based on the business realities in front of you. And small businesses have always dealt with uncertainty. And certainly Richard, in farming and Beth, as you know from your husband, uncertainty is just built into the agricultural universe. But so is the absolute need to plant at a certain time and reap at a certain time because the seasons aren't going to change at since we don't know what the trade policy is going to be two hours or two days, let alone two months from now, how are each of you thinking about Your decision making for Beth, for you, the. The future of your business and you, Richard, for the future of your farm. You just talked about your loans becoming due and running out of product. How are you all navigating and thinking about what to do? And Beth, I'll start with you.

Richard Oswald (50:27)

The one thing I know is that there are babies all over the world and maybe I can't sell to babies in America for a while because I can't handle the uncertainty. I cannot hope that this works out. I have three months to figure this out. So for me, I'm going to navigate it by learning how to do international distribution and find people who will distribute my products in Australia and Canada and Europe and sell to babies in other countries.

Stacey Abrams (50:59)

And Richard?

Beth Benneke (51:01)

Well, farming is like a glacier. It moves very slowly, but it never stops moving. And so we have to keep moving. But I've seen this in the past. I've had experience with embargoes. An embargo on a tariff is two different things. But as we're learning now that when tariffs get too high, they are the same as an embargo because your customer chooses not to buy your product. Whereas with an embargo, our government says we won't sell it to you. But it's the same thing. It's surplus building. And it creates a problem with prices for us. Things get cheap, really cheap. And the only way to weather that is on the equity that the farm has on the property that it owns is paid for and whatever money they have in the bank. And you just live off that equity, waiting for things to get better and hope that the government steps up if that's what it takes, and provides support. But that's always up to Congress. And Congress is never a sure thing. It's just, it's very exasperating when things have been going fairly well like they have in my industry here for the last few years. It's very exasperating to just have this unknown just pop up out of nowhere. And another concern that I think we should have also that just happened recently was I think that China said that they would be re examining their export policy on electronics, the same electronics that the President exempted. And they may choose not to sell those earth metals and electronics. And most farm machinery, modern farm machinery today, has those electronics in it just as your, as your car has it. We have the same stuff in our tractors and combines, so repair parts. What if they just decide not to make replacements anymore? Sell replacements? Where's that going to come from?

Stacey Abrams (52:51)

All right. And Richard, I'M gonna stick with you for a second because, I mean, you just raised an extraordinarily important point that people often forget just how modernized farming is. But there's also the responsibility you have as the vice president of the farmers union, and you're talking to constituents of yours who are trying to understand the arguments that are being made by this administration that these policies will bring benefits in the long run and that the pain they're feeling is short term. How are you having these conversations? What are you hearing from those who are in your union?

Beth Benneke (53:25)

Well, as you know, politics are very polarized right now, and it's pretty hard to get back that initial, that initial responses of either I support the president or I hate the president. And that's just sort of the discussion. Now, I think since none of the dire predictions have actually come true for us right at this moment, we still have markets and we're still planting and going, but this is a cumulative effect. And I think as we get farther into the year and into next year, if things don't improve, if we don't have some certainty, come back in and know that we can continue to do what we're doing, then I think there'll be a lot of farmers that will start to question their support of some of these policies as we're seeing them today.

Stacey Abrams (54:13)

And Beth, you mentioned that your husband is a farmer. You're a small business owner. You are running what is a startup that is moving into that early stage phase of success. As I mentioned, I started a small business that did product manufacturing. We did bottled water for babies and toddlers. And one of the challenges we had was that we grew to death. We weren't able to produce our product in because we produced it domestically. We hit this ceiling where we couldn't afford to your point about the product runs, we couldn't afford to move to the automated product runs because we didn't have the money for it. And so we actually had to shut down our business over time. When I think about what you're having conversations about with your, you know, fellow small business owners and at home with your husband, who's thinking about what's happening on the farming side, how do you think about the domestic production intention of this administration? Do you think it's viable given your lived reality of trying to make things happen here?

Richard Oswald (55:17)

You know, I've spent the last week of my life trying to figure out realistically, how can I bring my manufacturing to the US because in the end, President Trump is our commander in chief and he is setting the Rules. And so if that's the goal is to bring manufacturing to the US if that's actually the goal, I'm gonna do what I can to figure that out. So I have 10,000 square feet in my building. I could, I could start my own factory. So I did some digging. There's eight machines I would have to buy. To do that those machines would cost me about $350,000. Except I have to buy those machines from China because that's where the expertise lies. You cannot buy these machines in the usa. So now I wonder, do I have to pay a tariff on those machines to get them here to start my factory? On top of that we don't have the expertise. I have no idea how to operate, run, maintain these machines. And there are no people here for me to hire with this expertise because it does not yet exist here. It's going to take a long time. So then my next thought was okay, let me find a factory in the us now that we've grown a little bit, maybe we can do these bigger production runs. The problem there is it takes four to eight months to get the tools made. And then you take the material which we still have to import cause it's not available in the US and there's tariffs on the, the material that will more than double my price. To do that in the US right now is not physically possible for me to do that. And I don't have four to eight months to try and make that happen. But what I want to add is I thought until yesterday that bringing manufacturing back to the US is what the goal was. But yesterday it was announced that cell phones and computers are no longer going to be tariffs. They are exempt from tariffs. Apple is worth more than $3 trillion. They have $54 billion in cash reserves. Who is more suited to bring manufacturing back to the US than Apple? But now they have zero motivation to do so because they don't have to pay the tariffs.

Stacey Abrams (57:28)

Look, I feel your pain so much. I have a massive mold for a bottled water that is sitting in a storage facility. Because there is no market for selling a tool dyed machine that is only to produce one product. And when I think about what you've gone through, Richard, through the embargoes that happened under the past administrations, through the tariffs that happened in the first administration. Can you talk about just how you're feeling? And I don't want to create political dissension because this isn't about partisanship. It's I think about what it means to feel like being an American in this moment and watching these decisions play out in real time and thinking about how your country is thinking about you.

Beth Benneke (58:18)

Well, I hope that the country supports farmers continually. But this. We're going to launch into this long debate about whether it's right or not to give farmers money, because you got to have money, and wherever it comes from, there's no substitute for money. And if it doesn't come for, from us, for us, from the market, then we got to have money someplace else. Because the only other way to get money is sell the farm, sell the machinery, sell the farm, sell the livestock and go do something else. And when that happens, once a farm goes away, it never comes back. Somebody will operate it, but it'll be somebody who's an industrial farmer these days, rather than just a family farmer, rather than someone who is fifth generation like I am six generation like as my children are and, and have lived agriculture all their lives. We are the living repository for the knowledge of how to grow food, how to grow things that people use. And when we're gone, then it's going to be corporate agronomists and corporate employees and corporate tractors, and you'll have very little say in, in how the food that you want is raised or where it comes from. So I guess I, when you ask me how I'm feeling about it, I'm feeling like, well, here we go again. Because I've lived through this three or four times in my lifetime where the, everything's going along fairly well and then the government decides they're going to fix things. And I got to tell you, the best way to fix things is to let people trade, let people make their choices, and let people have an opportunity to work and make a living and earn a return.

Stacey Abrams (60:08)

And Beth, you serve this country, you believe in this country. You are living the embodiment of one of the narratives of this country, which is creating your own business, being your own boss, and creating opportunities for others. And I see that this is resonating and hitting you hard. How are you thinking about this moment?

Richard Oswald (60:30)

It's really tough right now because there's a lot of people that are leaving hateful comments on my videos and telling me I deserve everything I'm getting right now because I chose to produce in China. And it's okay for them to say that. I feel they're uninformed about what it takes to manufacture. And I fought for our freedoms as Americans, and one of those freedoms is the freedom of speech. I think a lot of people are scared and don't know how to Handle it. And so they respond with hate. One of those freedoms is our democracy. And I've been in the media quite a bit lately with this situation, and I'm wondering, where are the checks and balances? Do you know how many of my state representatives or congressmen have reached out to me? Zero. I don't feel like America's government cares about America's small businesses right now, not counting the Small Business Administration. The Small Business Administration did reach out to me and they are trying to help locate a factory in the US That I could work with. But the fact of the matter is the tariffs on the raw material that would get imported, the cost of labor, the timeline it's going to take to get up and running, that's still not an option for me. But at least they care. They reached out and they're trying to help.

Stacey Abrams (61:54)

Well, I'm going to correct one thing you said. We do live in a nation where people have the right to speech, but no one has the right to that kind of personal invective and vitriol. And you do not deserve the meanness that's being sent your way. As someone who has experienced it on occasion, I can tell you that for as many loud, angry, and as you pointed out, frustrated people who feel that it's valid to attack you, please know that there are so many who are celebrating you and cheering and working and want you to be able to succeed. So please stay outta your cards. Okay?

Richard Oswald (62:35)

Yeah, there are so many people supporting me too. I just want to be clear, you know, serving the country, being in the military, we fight for our freedoms. And that is a freedom, is the freedom of speech. And I'm glad we have it.

Stacey Abrams (62:51)

And I think you articulated it perfectly. I mean, people who have never done this do not realize how hard it is to do this. As I said, I've got a massive machine, a mold that has been sitting in a storage facility for a decade. I keep paying for it because there's literally nowhere else to send it. And it was incredibly expensive. That was a risk I took and the risk didn't pay off. And you took a risk and the risk worked because you tried to use the system as the system exists. And Richard, to your point, you've seen this happen before and your challenges that people, we don't seem to learn our lessons. We keep repeating the same bad behavior or certainly the same misguided behaviors. And so I'm gonna ask you both to do something that is really, really hard. But I'm talking to an entrepreneur and a farmer, so you guys are used to hard. Richard, I'm gonna start with you. I want you to offer a bit of advice for folks who are in a similar position but don't have your fortitude. What do you want them to leave this conversation thinking about?

Beth Benneke (63:56)

Well, you look on the horizon and you see a storm coming, and you do what you can. You close the shed doors and. And try to get the hay in before it gets wet and put the machinery in and make sure the animals are safe. And in the barn, the door shut on that. But at the end, you just have to wait for the storm to pass. And the storms always do pass, and there may be some cleanup when it's over, but if you just wait long enough, the earth always turns and it's a new day and things get better. And I. I understand Beth's problems to a small extent because I am a fella who over the years has tried to think of other things I could do to make money that would be more reliable than farming when farming turned bad. And to be an entrepreneur, entrepreneur like she is, and to actually do something like that and be successful, that's an amazing ability. And I believe that she'll weather this, and I believe that she'll come out on the other side, too.

Stacey Abrams (64:58)

Hear, hear. Beth, you know, your. Your last mission. Tell people what you think they need to know as we weather this storm.

Richard Oswald (65:06)

Well, first of all, I want to say thank you to Richard because I married into this farming life, so I'm kind of on both sides of this right now with the uncertainty. If my husband. I mean, my. My two boys already know. They want to be farmers, too, like their dad, and I hope that they can. But when it. When it comes to people in my position, other small business owners, and it's not just product creators like me who are manufacturing. It's. It's the small boutique shops on Main street that bring in their products. Those prices are going up. Those people are struggling and are worried about going out of business, too. The takeaway right now, you know, along lines with Richard, you know, weather the storm. Let's hang in there, but take care of your mental health. This is going to be a mental health crisis for so many of us. And so I just urge all of my fellow small business owners to reach out to your friends, go for a walk in nature, turn off the news from time to time, breathe, meditate, whatever you need to do to keep your mental health in check. Because right now it feels really, really bad. But like Richard said, storms come, storms go. We can get through it.

Stacey Abrams (66:16)

Well, I want to thank you, Beth. I want to thank you, Richard, not only for taking the time to be here on Assembly Required, but for your perseverance, your candor, and your willingness to weather the storms. So thank you. Thank you. As always on Assembly Required, we like to give our listeners actionable tools for facing the challenges of today. So here's this week's toolkit in which we encourage you to be curious, solve problems, and always do good. At the top of the episode, I mentioned my book, Our Time is Power, Purpose, and the Fight for a Fair America, a book that has been pulled from the US Naval Academy libraries. Book bans and censorship do not just threaten freedom of speech. They limit access to information and can even jeopardize library funding. So here's your task today. Head to your local library, get a library card if you don't have one, and check out a book from the banned books list. Fight back with curiosity. If you want to do more, check out Book Riot or Pen, America's Guides of what you can do to help fight book bans. Next, we're going to solve problems. We've said it before and we'll say it again. Call your representatives and your senators, no matter their party, but don't stop there. Local elected officials have power, too, sometimes more than we realize. Let them know how you feel about the rise in book bans, the effect of tariffs, and how all of the changes happening in this country are affecting your community. And share your full humanity. As we saw with Beth, I want you to include your anger, your fear, your sadness, your frustration. Be polite, be respectful, but be honest. And if you've already called everyone on that list, encourage your friends and family to do the same. We need you to use your voice to speak up and fight back. And always, always, always do good. It's hard to tell what the trade situation will be from one week to the next. And as our guests all pointed out today, that uncertainty itself can be a killer for small businesses. You heard Beth talk about the need to support her small business and their small businesses, just like that where you live. So if you have the means, support small businesses in your area, go to that local farmer's market and buy something. Don't just browse and encourage your friends and family to do the same. Shop local, spend local. That's our job this week. As a reminder, we can be found wherever you get your podcast, including on YouTube. If you want to tell us what you've learned and solved, send us an email@assemblyrequiredricked.com or leave us a voicemail and you and your questions and comments might be featured on the pod. Our number is 212-939509. That wraps up this episode of Assembly Required with Stacey Abrams and I'll meet you here next week. Assembly Required with Stacey Abrams is a Crooked Media production. Our lead show producer is Ilona Minkowski and our associate producer is Paulina Velasco. Kiril Palaviv is our video producer. This episode was recorded and mixed by Charlotte Landis. Our theme song is by Vasilius Fotopoulos. Thank you to Matt De Groat, Kyle Seglin, Tyler Boozer and Samantha Slosberg for production support. Our executive producers are Katie Long, Madeline Herringer and me, Stacey Abrams. Our production staff is proudly unionized with the Writers Guild of America eas.

Dean Baker (70:19)

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