Bannon's War Room – Episode 4719

Date: August 20, 2025
Title: Reforming The Fed; Powell's Job In Jeopardy

Episode Overview

This episode centers on mounting pressures to reform the Federal Reserve, the political vulnerability of Chair Jerome Powell, and controversies surrounding Fed Governor Lisa Cook. Host Stephen K. Bannon delves deeply into current U.S. economic issues, midterm political strategies, ongoing foreign policy costs (notably Ukraine aid), and how populist and establishment forces on both right and left are reacting. Special attention is given to the disconnect between legislators and working-class Americans, the economic anxieties brewing ahead of the 2026 midterms, and whether the current monetary and fiscal policies are sustainable – or dangerous. The episode features guest analyst David Malpass (former World Bank president), and economic strategist Steve Cortez, providing detailed critique and policy recommendations regarding monetary policy, inflation, and the structure of the Fed itself.

Key Discussion Points & Insights

1. Populism’s Spread and Party Realignment [00:00–05:00]

• The “Democratic MAGA Movement” is discussed, with Democrats attempting to adapt Trump-era populist methods (e.g., social media activism, adopting an anti-establishment tone).
• Speaker A highlights that progressive energy (AOC, Bernie Sanders) is galvanizing the party but worries this alienates moderate voters ahead of midterms.
• Redistricting and inflation are forecast as major flashpoints; economic anxieties could upend Republican advantages if inflation spikes impact everyday spending ([01:30–02:45]).
• Quotes issues of fairness:
  "People are always feeling like, is the system rigged, is the system fair? And if somebody's paying a lot more for a car, a lot more for oranges... bitterness rises." – A [06:22]

2. Election Integrity & Mail-in Voting Concerns [02:45–11:00]

• Discussion on attacks against the election system and mail-in voting as groundwork for post-election challenges, likened to a repeat of “Stop the Steal” tactics ([02:53–05:00]).
• Fears that trust in democracy is eroding, reinforced by the selective rhetoric and pardons around the January 6 events ([09:00–10:30]):
  • "Who stands up for American democracy when it doesn't go the way they want? And we have not seen a lot of bravery from pretty much anyone..." – A [10:11]
  • Supreme Court’s refusal to indulge 2020 election challenges cited as a critical backstop, but faith in that happening again is wavering.

3. Rising Partisan Combativeness & 2026 Political Setup [11:00–18:00]

• Bannon characterizes Democrat Gavin Newsom’s approach as a “parody” of Trump’s combative style ([11:41]):
  "He's trying to be Fight Club. Of course, it's a parody. Of course, it's a vaudeville act." – Bannon [11:41]
• Bannon urges GOP maximalism in redistricting, rails against “feckless Republicans” lacking fighting spirit, and points to voter intimidation concerns around mail-in ballots ([12:30–13:30]).
• “No illegal aliens” in the census and correcting census “algorithms” for redistricting become rallying cries.

4. Economic Inequality & Tax Policy [17:00–19:00]

• Cross-partisan agreement highlighted:
  "He believes, like me, that billionaires should not be getting tax cuts right now while working class Americans are struggling more and more every day." – A [16:56]
• National debt explosion cited:
  "America's national debt will go up $20 trillion over the next decade. $20 trillion." – B [17:41]
  • Compares recent debt growth to 220 years of earlier U.S. history.

5. Foreign Policy: Ukraine and NATO Guarantees [19:00–28:00]

• Massive skepticism toward continued U.S. aid to Ukraine:
  • Bannon brands allied support as “happy talk,” derides European contributions, and raises alarm over U.S. soldiers and taxpayer dollars essentially underwriting Ukraine’s government, not just military effort.
  • Points out demographic and morale crises in Ukraine’s military ([25:50–27:30]).
  • "We don't have the luxury of going around the world anymore and looking for places to stick our nose in." – Bannon [27:10]

6. Federal Reserve Under Fire: Independence, Scandal & Reform [30:00–43:47]

• News breaks concerning possible criminal indictment of Fed Governor Lisa Cook over mortgage fraud ([30:13]).
• Bannon and guest David Malpass (former World Bank president) discuss:
  • The opacity of Jackson Hole Fed meetings:
    "The Federal Reserve is not transparent... There are meetings where it’s hard to know who’s on the invite list." – David Malpass [32:24]
  • The argument that high interest rates, set by the Fed, disproportionately benefit Wall Street and the wealthy while stifling small business and job growth.
  • Malpass’s position:
    "The interest rates are too damn high. And the central banking around the world thinks that they know what the right interest rate is for a market economy. That’s not possible..." – Malpass [34:22]
  • Calls for a fundamental overhaul of Fed models, tools, and even its core mission:
    "I think we have to have a full upheaval in the models at the Fed." – Malpass [37:44]
  • The importance of dollar stability and the risk of U.S. currency losing its global reserve status.
• Bannon presses for full auditing of the Fed and questions whether the institution even serves the people anymore.

7. 2026 Midterm Risks & Messaging Problems [45:00–52:00]

• Cortez delivers stark warnings that Republicans are out-of-touch on economic messaging:
  "A scant 23% say that your big, beautiful bill will help them... Independents today, they're far more pessimistic on the economy than they were last November when Trump won." – Cortez [45:01]
• Food and commodity inflation (beef, chicken, bananas, etc.) cited as daily frustration points ([48:35–51:00]).
• Emphasis that a “strong dollar policy” is essential if interest rates are cut, else further currency depreciation looms.
• Division emerges between funding trade focused rebates for the middle class versus reining in deficits by slashing Ukraine aid and the defense budget ([52:01]):
  • "I don't want to hear that Republicans on Capitol Hill are going to suddenly get religion on the deficit after they pass this gargantuan profligacy bill... when we need to deliver tangible benefits to middle class people." – Cortez [52:01]

Notable Quotes & Standout Moments

• On economic populism bridging left and right:
  "If you really get the Steve Bannons of the world on truth serum, they agree a lot with what Bernie Sanders is saying about the dangers of AI, about the rich getting richer, about some of the dangers in that bill going after Medicaid." – A [07:00]

• On race, riots, and the legitimacy of the system:
  "I have worked a lot of riots in my career, but this is the first riot where the rioters thought that they were right. They thought that they were the ones that were in charge." – Paraphrased from an officer’s comment [09:50]

• On the Fed’s role in the “deep state”:
  "If you think about the deep state, it applies to the military complex, the trade complex, the regulatory complex, those spending, government spending and getting bigger. And to central banking, it's the core in many ways of the deep state." – Malpass [32:51]

• On Ukraine and security guarantees:
  "We're still in Germany at the end of the Second World War. We're still in Japan... You're going to be in Ukraine for decades." – Bannon [22:40]

Timestamps for Key Segments

| Timestamp | Segment Description | |:---------:|--------------------| | 00:00–05:00 | Growth of progressive populism in Democratic Party, redistricting, inflation’s political risk | | 11:13–13:30 | Bannon rips GOP for inaction, urges aggressive redistricting | | 17:00–19:00 | Discussion of income inequality, billionaire tax cuts, and historic debt growth | | 19:00–28:00 | Critique of Ukraine aid, NATO security guarantees, and foreign policy “addiction” to intervention | | 30:00–36:50 | Lisa Cook scandal, lack of Fed transparency, Fed’s effect on working class | | 36:50–39:09 | Malpass: Need to “rethink” or even “audit” the Federal Reserve | | 45:01–52:01 | Cortez: GOP is losing the economic messaging war, polling shows voter frustration, food/commodity inflation, dollar slide, and debate over deficit vs. rebates |

Tone & Style

• Assertive, urgent, often combative – Bannon repeatedly calls out perceived lack of willpower among Republicans, employs “primal scream of a dying regime” rhetoric [10:31].
• Deep skepticism of foreign entanglements and elite institutions; calls for realignment with working-class priorities, repeated expectation of imminent economic/financial crisis.
• Frequent citation of polling, practical examples (commodity prices, census, pensions), and appeals for grassroots mobilization.

Summary Takeaways

• Political and economic populism is deepening on both sides; establishment parties are struggling to bridge the gap with everyday Americans.
• The 2026 midterms could pivot on inflation, redistricting, and whether Republicans can win back economic confidence after passing controversial tax reforms.
• The Federal Reserve faces both policy and scandal-driven upheaval, with top leadership potentially in legal jeopardy.
• Foreign policy “forever wars” (esp. Ukraine) are increasingly unpopular among the War Room’s base, viewed as expensive distractions from domestic needs.
• Pressure is building for a wholesale “audit” and reimagining of the Fed, with calls to prioritize middle-class economic gains and a stronger dollar.
• The episode’s overall drumbeat: crisis—and opportunity—build for a fundamental reset of America’s political, economic, and financial systems.