Transcript
Stephen K. Bannon (0:17)
This is the primal scream of a dying regime. Pray for our enemies because we're going medieval on these people. I got a free shot. All these networks lying about the people. The people have had a belly full of it. I know you don't like hearing that. I know you try to do everything in the world to stop that, but you're not going to stop it. It's going to happen.
Dave Brat (0:38)
And where do people like that go.
Natalie Winters (0:40)
To share the big lie?
Rod Martin (0:42)
MAGA MEDIA I wish in my soul, I wish that any of these people had a conscience.
Stephen K. Bannon (0:49)
Ask yourself, what is my task and what is my purpose? If that answer is to save my country, this country will be saved.
Rod Martin (0:59)
War ROOM here's your host, Stephen K. Banner.
Stephen K. Bannon (1:03)
FOREIGN.
Rod Martin (1:09)
Good evening, everyone. Dave Brat sitting in with a great Stephen K. Bannon. I've been watching the shows all day. Natalie Winters just teed it up. We've got a great show for you. We're going to hit gold. We're going to hit the Judeo Christian West. We're going to hit immigration hard. I'm going to start off and try to frame the economics. STEPHEN K. Bannon there's no one better at doing the geopolitics and the economics. But I'm going to run through some charts that I think connect all the dots, right? A lot of people are taking cheap shots at tariffs and this kind of thing, but they can't connect the whole story. So I'm going to try to give you one whole story for the first part of this segment with the data from way back, connecting everything from productivity to trade to tariffs to human capital to growth theory to the debt and money, gold, everything. And so get out your number two pencil and here we go. DENVER if you want to pull up the first chart, let's start off with a real long run. All of human history made a thousand dollars and all these charts are going to be at Bratt Economics on Getter and Brat Economics on X. So share them with your young people and have them follow these charts along with the video presentation. We're going over right now because it's key that everybody knows this. This is 1981. The two giant red balls are population weighted. So that's obviously China and India. They're only making about $1,000 a year. Back 40 years ago, the US and all those yellow dots to the right are Western European countries, also called the Judeo Christian West. That Judeo Christian west brought you a lot of nice things like science, freedom, human rights, democracy, only out of the Judeo Christian West. So it's very important. War room. The folks who think about religion, religion is not about saying you're the, you know, holier than thou or whatever. In fact, it's saying the other. It's saying we're all fallen, we all need help and we're going to structure government a certain way. So I'm not going to get into all that, but I just want to forward watch those two red balls as we go from 1980 all the way up to today. 2023, Denver. Next slide. There you go. China and India went from a thousand up to about 15, 16,000 to 25,000. For China, they are growing very fast. So this is the context that you'll never hear on any other program, right? This is why President Trump is doing what he's doing. I'm going to go over how China got there, what the US Is doing that's slowing us down. I think you all know, you all watch this show, you're all highly educated. But again, the probability of all those yellow balls according to Bradford DeLong of Berkeley, so I doubt he's a Presbyterian, right? So I'm giving you real data here over the long run Western trajectory. The probability of those yellow balls randomly being the richest countries in the world is 1 in 10,000 according to Berkeley. And this is everybody I'm giving you is the Nobel laureate winning economic growth folks for the whole show. All right, so now let's go into the more standard economics of today. Denver. The next chart here, I'm just covering this in two seconds, but here's the money supply. Fred, when you see Fred up there, that's Federal Reserve data. So you see anything that looks a little peculiar on that graph? There's M1 or M2 over the last 30 years. And all of a sudden there's a catastrophic blow up, right? All from the 0708 bailouts. The Fed takes an activist role. It prints money. Anytime the federal government wants to spend money, it validates and justifies all the government budget deficits. Two trillion a year. And there you see M1 and M2 just blowing up at the end of that chart. That's the Federal Reserve. They have not been audited yet by Doge. I hope Doge takes a good look at all the research economists who have goofed us all up, especially the middle class. Next chart, Denver. All right, there's the debt bomb, right? We're up to 36 trillion. We have more debt now than we did in World War II. Without World War II, of course, we have never ending wars. And Steve covers that brilliantly every day. But that's in the we've covered that pretty sufficiently. So I want to get to the tariff story coming up next. Chart, Denver. Here's the the untold story on the mainstream media and here's what President Trump is trying to correct. And I'm all with him on this. The graph on the left is the US Trade deficit, goods only. And of course, it's blowing up over time. It's getting bigger and bigger and bigger. As you look at that chart, right? That's the size of the deficit, right? So we are not producing and exporting. We're importing consumer goods and spending on consumer goods. The rest of the world is making stuff. And traditionally in economics, you say, okay, that's fine, you know, we're consuming stuff and that makes us happy. But it turns out that innovation and research and development and capital equipment and all of those things necessary for a successful economy are very correlated with manufacturing. And when you have deficits of that size ongoing, and that's where Lighthizer is very good. Make sure you go watch the Tucker interview with Robert Lighthizer. He is brilliant, does a great job. I think just a few days ago. Go see that. Now look at that on the same chart there. Look on the right chart and you'll see something very peculiar. When Trump comes in on the right side, the pink side, you have huge deficits continuing. You can't turn it around in a year. But then the trade deficit goes down, down, down, right? As you see those black bars getting smaller and smaller and smaller, Trump is making real inroads on the trade deficit and he is today as well, right? Capital equipment is coming screaming into this country and Stephen Bannon covers that every day. You know, 100 billion from Taiwanese chips, etc. And so next chart. And again, let's see anybody else tie all of these charts together, give a comprehensive story of how this all fits together. So now you hear stories on Mexico and Canada and China. Why is the US Doing this? Well, on the far left graph, there's the Mexican trade deficit of the United States, that Mexico's trade surplus. It says on that graph, same thing, their surpluses are deficit and it's growing, growing, growing. So as Lighthizer says, it's not just having a deficit in the year, it's sustained deficits over time. The middle graph is Canada's trade balance with the US Blowing up lately, the deficit with Canada on the far right, I don't know if you can read all those, but blow that up with you can up at the top, US Runs trade deficits with most countries. Again, lighthizer, that's the problem we're having here, right? It's, it's not a deficit with one country or another. We have trade deficits with everybody. And as I told you, all those nice properties go along, research and development, productivity, manufacturing, they're all tied together. And so we cannot continue down this path. And I'm glossing over, you know, we've gutted our manufacturing system in the United States. I think you all know that we've gutted the wage rate for American workers because they're not working with capital anymore. And we'll get to that story coming up. Here's a few more charts. Denver, next slide here. Okay, on the far left, you may not know trade is not a huge part of the US economy. That little purple sliver is US imports. It's 14% of our economy. Now that's going to be in stark comparison with some of the other countries you're looking at. If you look at the middle graph there, we're comparing trade openness, trade as a percentage of gdp. The US Is relatively small, as I just showed with that little purple bar. But then going down, Mexico is much bigger percentage trade. European Unions down in the middle, China's bigger than the US And Canada's down there at the bottom. Trade makes up 60% of their economy GDP. And so what's that related to in the news lately? Well, if you're Canada, you know, they're saber rattling and their politicians are talking a big game. They're beating their chests. I don't think that's really a smart idea on their part. Right. When trade 60% of your economy and only 14% of our economy, and we're a massive world power, if you're just using common sense, that makes no sense whatsoever. I think this is part of President Trump's problem with some of the attitude adjustments around the world. We've been paying for the post World War II liberal world order, protecting the seaways, providing trade, providing military protection for everybody. And all we're saying now is we want reciprocal tariffs, right? We just want an even playing field. And Lighthizer, by the way, goes through three options there and they're very sophisticated. He covers them, just very common sense. But he says in order to deal with the tariff and non tariff barriers, which I'll cover in a sec, you're probably better off just using tariffs until we get this story straightened out. And most of these charts are showing you what that means. The far Right graph is Canada. Canadian exports to the U.S. up there on the top is a percentage of GDP up at 19%. Right. Canadian exports, the stuff they send us, 19% of their economy. Down at the bottom you can't even see, it's a little blue line. That's our export percentage to Canada. So if we get into a trade dispute, we kind of, again, they're not whoever's advising their trade folks to be yelling and blustering at us. Not too good of advice. At the bottom, we're down there at 1.7%. That's 1.7% of a huge number. But I'm just trying to show the leverage that Canada has on us. It's not good. The next chart is probably one of the most important in this tariff debate in addition to the deficit story. And you'll see arguments out there, pros and cons. But I'm trying to lay out the charts that make sense of this thing. Here's free trade for the G20 countries. So these are the rich 20 countries and these are the tariffs in the dark blue. And then the non tariff barriers, the way they exclude US goods from coming into their countries. Down at the bottom, the lowest tariff rates and the lowest non tariff barriers. So the most free trade country is the United States of America. Right. So we're the good guy, we've been helping everybody and we're just not here in the right tone coming back from the rest of the world. And so as you keep going up, there's Mexico, Japan, Indonesia, Canada is quite a ways up. If you look at Canada, they're two to three times tariff barriers against U.S. tariff and non tariff barriers. Most all those countries are at least 200% or 300% higher tariff and non tariff barriers against us. So when President Trump says we're going to do reciprocal tariffs, he's spot on. And you know, just interestingly, you know, all these countries have much higher tariffs. And so when the left is going apoplectic and getting hyper about, well, this is going to destroy our economy. Well, look at China up there. They have three to four times the tariff barriers, tariffs way higher tariffs, way higher non tariff barriers against us and they were growing at 10%. So dear far left economists, Financial Times, Wall Street Journal, could you please get your economist to explain this to us? America first types, because we're dying to hear it. Next one. Now, how does all this trade story apply to our lives? On the far left there you see the service industries kicking up. We do have high value added, high wage, high salary Services, lawyers and doctors and dentists and etc. The IT fields software, engineers, etc. Right. But as we've shown on the show numerous times, the distribution of income is stark. And so a huge part of the decline of the middle class is that black line industry manufacturing. It's going up until guess when, about 1960. And then down and then on the Far right again, U.S. manufacturing jobs, you can see a massive decline starting at about 2000. It started before that, right. With opening up to China on the world trade front. But the US Manufacturing jobs on the far right dropping precipitously. In the darker blue chart, you can just see them going down, down, down. Next chart, Denver. Sorry, I'm going fast through this, but I hope you will all get at this and train in the next generation. Share these charts with the folks you know and share the war room because this stuff is just crazy crucial. I'm going to skim over a little of this. But our manufacturing data also in investment data, this has been lost in translation. But the national accounts, the bureaucratic state has been adding everything in the way they calculate what counts as investment. This will not shock the war room, but it may shock your neighbors when they buy in. The average business person I don't think knows some of this stuff. But the green energy stuff, the green stuff Biden was proposing that all government spending, all government jobs, they count that as investment. Now is capital investment. And it's not free market driven, it's not return on investment driven. It was all politically driven through friends. And you're seeing that the DOGE is showing that corruption. And so I just wanted to put that up there. But at the bottom you see the value of manufacturing China is that if you look down at that number four and a bunch of numbers after that's four and a half trillion dollars manufacturing output in 2023. The US is only at two and a half trillion dollars in manufacturing output in 2021. I think the last year they had data on that in that setup. And so China's clobbering us in manufacturing and that goes along with capital investment and research and development that I said earlier has all those nice properties. And I'm going to cover that in a minute. Next chart, Denver. We've gone over this. I'm going to go over this one pretty quick. The jobs reports, you know, have the jobs data have just been grossly overestimated during the Biden years. So they said 200,000, 250,000 every month. If that was the case up at the top you can read this and cover this later if you want. That would approximate 12 million new jobs we should have had during the Biden years. Right? If all those job reports were accurate, they had an 850,000 job revision, oops at the Labor Department, et cetera. And so the full time jobs, it turns out, is only one and a half million over four and a half years. One and a half million jobs, new jobs over four and a half years, not 12 million. If you would have followed the data and the bottom chart there shows you that 41% of those new jobs were government. The next charts I have said are the most important charts. I've gone over these a thousand times on the War room with all of you. This is Bob Gordon, Northwestern University. Again, I don't know his politics, but I doubt he's a war room America firster. This has been his Life's work for 50 years. He's well respected in the macro profession by everybody. So these data, and these data are also Brookings. So this is not right wing.com data for you lefties watching the show. Here's productivity down for the last 70 years, right? If you start in the top left and just go down, you used to have 5, 6, 7 in the middle you had 2, 3, 4. Now you have 2% productivity and it's up a little bit the last few quarters. I hope there's something good going on, but the researchers at the Fed say there's not enough evidence. You have to say there's a long term change in trend. So US Productivity, the amount of stuff you make per hour going down for 70 years in a row, what's that get you? Next chart, Denver. I'm going to go through these real quick. I've gone over these 100 times. At the far right, overall productivity from 2022 to 2052, way out. What is the. I think this from CBO, Congressional Budget Office. Yep, that's what it says. Up at the top, 1.7% productivity growth is what you should expect. And so that would also suggest GDP growth probably at about 1.7 or 2%. Next chart, Denver Federal Reserve two weeks ago comes out and says, oh, we got to downgrade the growth report. We're down to what number was I just saying? 2%, 1.7%. And the Fed comes out two weeks ago and says down to 1.7%. So the long term trend in manufacturing tariffs, China, the US Everything results in the same story. That's what I'm trying to show here. Everything's the same story. Next chart, Denver. Here's just confirmation. CBO, real GDP growth at 2% for the next 30 years. I think I'm going to gloss over the next one. Denver. Go forward one. So there's the distribution of income. The rich own everything. You know that. Next chart. I think I'll just close on this one because I want to bring in our next guest who I think is ready to roll this. How do you solve it? Okay, Dave, you keep giving us the Eeyore story. The sky's falling. Top graph. That's China. That's China's growth in their capital stock. Not financial capital, but capital stock. They're at $100 trillion in capital in their hands. It's going straight up like a rocket ship. Right, right. Exponential growth. The graph underneath that is the United States of America. We're slowing down. We only have 70 trillion worth of capital to work with. Guess who's solving that problem. Guess who's bringing capital back to the United States of America? President Trump. And so I think I'm going to end it there. I had a few more charts, but I got a superstar I want to get on with us right now. And his name is Rod Martin. Rod, are you with us?