2/3/25: Trump Smacks Canada & Mexico With Tariffs, Elon Musk DOGE Gov Takeover

Summary

Breaking Points with Krystal and Saagar – Episode 2/3/25: Trump Smacks Canada & Mexico With Tariffs, Elon Musk DOGE Gov Takeover

Release Date: February 3, 2025 | Host/Creators: Krystal Ball and Saagar Enjeti | Produced by iHeartPodcasts

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Introduction

In this riveting episode of Breaking Points with Krystal and Saagar, hosts Krystal Ball and Saagar Enjeti delve deep into two monumental events shaking the political and economic landscape of the United States: former President Donald Trump's imposition of hefty tariffs on Canada and Mexico, and the unprecedented takeover of federal government systems by Elon Musk and his allies, associated with the DOGE Gov movement. Joined by special guest Jeff Stein from The Washington Post, the episode unpacks the implications of these developments, offering insightful analysis and heated debates.

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Trump's Tariff Assault on Canada and Mexico

Overview of Tariffs

At the outset ([02:12]), Krystal announces that President Trump has officially initiated a trade war by imposing 25% tariffs on both Canada and Mexico, similar to previous tariffs on China. These measures are a direct response to existing trade deficits and are expected to escalate, with additional tariffs slated for implementation on February 23 ([04:15]). The tariffs cover a broad spectrum of goods, with exceptions like Canadian oil being taxed at a lower rate (10%).

Impact on the Economy and Consumers

Krystal emphasizes the widespread impact, noting that Canada, Mexico, and China are the three largest trading partners of the U.S., contributing to approximately 40% of U.S. imports. The tariffs are anticipated to raise the price of cars by about $3,000 and significantly increase costs for produce and building materials, particularly affecting regions like the Midwest that heavily rely on imports from these countries ([07:52]).

Krystal's Critique

Krystal challenges Trump's rationale, questioning how tariffs, which typically lead to increased consumer prices, align with his campaign promise to reduce costs and curb inflation. She argues that without a comprehensive industrial policy to accompany the tariffs, the measures will likely fail to achieve their intended goals and may instead harm the American economy ([05:15] – [16:46]).

Notable Quote:

Krystal Ball [05:43]: "You promised Americans to try to reduce costs... How would you expect to have prices come down?"

George M. Johnson's Defense

Contrasting Krystal's perspective, George M. Johnson defends the tariffs, citing the International Economic Emergency Powers Act (IEEPA) as a legal basis for President Trump's actions. He argues that the tariffs are a strategic move to renegotiate trade agreements like the USMCA more swiftly than the standard three-year renegotiation window ([11:53] – [12:51]).

Notable Quote:

George M. Johnson [11:53]: "We're not going to renegotiate that until 2026. If we stick with the current policy... we can accelerate renegotiation."

Jeff Stein’s Analysis

Guest Jeff Stein from The Washington Post provides a nuanced breakdown, affirming the seriousness of Trump's tariff threat and debunking claims that the tariffs are merely a negotiating tactic. He highlights the substantial economic implications, including potential retaliatory tariffs from Canada, Mexico, and China, and discusses the legal robustness of Trump's authority under IEEPA, suggesting that court challenges may not succeed ([20:42] – [31:13]).

Notable Quote:

Jeff Stein [23:14]: "Trump's economic policy is increasingly untenable."

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Elon Musk's DOGE Gov Takeover: A Constitutional Crisis

Overview of the Takeover

The episode takes a dramatic turn as Krystal and George discuss the alarming developments regarding Elon Musk's infiltration and control over critical federal government systems associated with the Treasury Department. Musk's allies have gained access to systems responsible for disbursing trillions in federal payments, including Social Security and Medicare, without any electoral mandate or Senate confirmation ([31:20] – [33:03]).

Jeff Stein’s Reporting

Jeff Stein elaborates on the gravity of the situation, detailing how Musk's associates coerced senior Treasury officials to grant them access to sensitive payment systems. This control potentially allows Musk to unilaterally decide which federal payments are disbursed, effectively bypassing Congress and undermining the constitutional separation of powers ([31:46] – [33:49]).

Notable Quote:

Jeff Stein [31:46]: "This is a tool of US soft power... it's not up to Elon Musk or Donald Trump to just say, we're done with this."

Constitutional Implications

Krystal vehemently argues that Musk's actions represent a blatant breach of constitutional norms, equating it to a hostile takeover of the government. She underscores the unprecedented nature of an unelected billionaire exerting such control over federal systems, highlighting the lack of institutional pushback and the erosion of democratic safeguards ([33:03] – [62:39]).

Notable Quote:

Krystal Ball [56:25]: "No one voted for Elon Musk. It is brazenly unconstitutional."

George M. Johnson’s Perspective

George acknowledges the constitutional breach but offers a counterpoint, questioning the depth of public outrage and suggesting that a significant portion of the population may be indifferent or even supportive due to deep-seated distrust in governmental institutions. He predicts that unless critical federal programs like Social Security or Medicare are directly impacted, public outcry may remain subdued ([66:25] – [73:37]).

Notable Quote:

George M. Johnson [66:25]: "Absolutely, yes, I do [agree that it's a problem]. But most people are not principled. Most people don't care at all."

Public Reaction and Institutional Trust

The discussion delves into the erosion of institutional trust, with both hosts expressing concern over how such unilateral actions by private individuals can undermine the foundations of democracy. They explore the societal shift towards consumerism and the diminishing importance of democratic processes in everyday life, highlighting how this shift contributes to the populace's apathy towards governmental overreach ([74:00] – [80:00]).

Notable Quote:

Krystal Ball [65:58]: "People do believe that the federal government should be investing in the American people and helping to support people in their time of need."

Conclusion on the Takeover

Krystal and George culminate their discussion by emphasizing the severity of Musk's actions, shading them as beyond a constitutional crisis and bordering on authoritarianism. They stress the irreversible nature of such a takeover, questioning the future of democratic governance and the capability of elected officials to reassert control over the federal systems now under Musk's influence ([82:24] – [86:00]).

Notable Quote:

Krystal Ball [65:59]: "Having somebody who is unelected, billionaire... take control... is brazenly unconstitutional."

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Final Thoughts and Future Implications

As the episode wraps up, both hosts reflect on the intertwined nature of tariffs and Musk’s government takeover, pondering the long-term effects on U.S. economic policies and democratic institutions. They warn listeners of the potential for further destabilization and call for increased awareness and advocacy to safeguard democratic processes against such unprecedented overreaches by private entities.

Notable Quote:

Krystal Ball [66:33]: "No one voted for Elon Musk. That is the issue that is at hand."

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Key Takeaways

1. Economic Turmoil Through Tariffs: Trump's imposition of 25% tariffs on Canada and Mexico is causing significant concern regarding increased consumer prices and potential disruptions in key industries like automotive manufacturing and oil imports.

2. Debate Over Tariffs' Efficacy: Krystal Ball criticizes the tariffs for contradicting promises to reduce costs, while George M. Johnson defends them as strategic moves to renegotiate trade agreements and bolster domestic manufacturing.

3. Constitutional Crisis via DOGE Gov: Elon Musk's unauthorized control over federal payment systems marks an alarming breach of constitutional norms, raising fears of a power grab by an unelected individual with substantial economic influence.

4. Erosion of Institutional Trust: The episode highlights a growing distrust in governmental institutions, exacerbated by unilateral actions from powerful private figures and a consumerist society indifferent to democratic processes.

5. Future of Democracy Under Threat: The hosts express deep concern over the future implications of these events, calling for vigilant protection of democratic institutions and processes to prevent further overreach and ensure the government's accountability to its citizens.

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Notable Quotes with Timestamps

• Krystal Ball [05:43]: "You promised Americans to try to reduce costs... How would you expect to have prices come down?"

• George M. Johnson [11:53]: "We're not going to renegotiate that until 2026. If we stick with the current policy... we can accelerate renegotiation."

• Jeff Stein [23:14]: "Trump's economic policy is increasingly untenable."

• Jeff Stein [31:46]: "This is a tool of US soft power... it's not up to Elon Musk or Donald Trump to just say, we're done with this."

• Krystal Ball [56:25]: "No one voted for Elon Musk. It is brazenly unconstitutional."

• George M. Johnson [66:25]: "Absolutely, yes, I do [agree that it's a problem]. But most people are not principled. Most people don't care at all."

• Krystal Ball [65:59]: "Having somebody who is unelected, billionaire... take control... is brazenly unconstitutional."

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Conclusion

Episode 2/3/25 of Breaking Points with Krystal and Saagar delivers a compelling and urgent analysis of two critical issues: the resurgence of protectionist trade policies under Trump and the alarming emergence of Elon Musk's influence over federal governmental functions. Through insightful discussions and expert guest commentary, the hosts illuminate the profound implications these events hold for the U.S. economy and the very fabric of its democratic institutions. Listeners are left with a pressing need to stay informed and engaged in safeguarding the nation's democratic processes against unprecedented private overreach.

Transcript

[Krystal Ball]

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[Sagar Enjeti]

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[George M. Johnson]

I'm ready to fight. Oh, this is Fighting Words. Okay, I'll put the hammer back. Hi, I'm George M. Johnson, a best selling author with the second most banned book in America. Now more than ever, we need to use our voices to fight back.

[Krystal Ball]

Part of the power of black queer creativity is the fact that we got us.

[George M. Johnson]

You know, we are the greatest culture makers in world history. Listen to fighting words starting February 4th on the iHeartRadio app, Apple Podcasts, or wherever you get your podcast. Hey guys, Sagar and Krystal here.

[Krystal Ball]

Independent media just played a truly massive role in this election and we are so excited about what that means for the future of this show.

[George M. Johnson]

This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else.

[Krystal Ball]

So if that is something that's important to you, Please go to BreakingPoints.com, become a member today and you'll get access to our full shows unedited ad free and all put together for you every morning in your inbox.

[George M. Johnson]

We need your help to build the future of independent news media and we hope to see [e-mail] Good morning, everybody. Happy Monday. Have an amazing show for everybody today. What do we have, Crystal?

[Krystal Ball]

Indeed we do. There are a million things that are happening in this town, including the trade war from Trump has officially started. We've got tariffs in place against China, Mexico, Canada, and some retaliatory tariffs coming our way as well. Jeff Stein from the Washington Post is going to break all of that down for us. Elon Musk has basically seen the government give you all the details there as best we know and what that is going to mean going forward. We've got new info about that horrific plane crash here as another plane, a small plane went down in Philadelphia. Still a lot of questions about what occurred there as well. The Democrats have elected a new leader for the dnc. We'll show you what that guy is all about and what it pretends for the future of that party. Tucker and Ben Shapiro have gone to war, trading blows, accusations, et cetera. And a Haaretz reporter is going to join us to break down a scoop that he he is reporting out in advance of Bibi's trip to Washington. Bibi being the first foreign leader who will come and visit the new Trump administration. So lots to get to.

[George M. Johnson]

Lots of that. Actually passed some of the Israeli delegation yesterday. I was like, what is this large Secret Service convoy coming in? I was like, oh, that's right.

[Krystal Ball]

I wonder if he brought all of his dirty clothes like he normally does. Remember that reporting. He had to bring all of their, like, incredible drive to the laundry, suitcases full of their own laundry to Blair.

[George M. Johnson]

House, which is the president's official guest house, so that the White House, you know, if the taxpayer doesn't pay enough for the Israeli government, we also have to literally wash their dirty laundry. I'm sure you could write a ton of stories about that. But as Crystal said, let's get to the tariffs. This is absolutely the most important story both here in Washington in the global economy. President Trump announcing it on Friday. Let's take a listen.

[Donald Trump]

Cities that we're giving to Canada and to Mexico in the form of deficits. And I'll be putting the tariff of 25% on Canada and separately 25% on Mexico. And we will really have to do that because we have very big deficits with those countries. Those tariffs may or may not rise with time.

[George M. Johnson]

So the details of the tariffs there laid out by Donald Trump, let me just from the top line, it's pretty simple. Basically, 25% tariff on Canada, 25% tariff on Mexico. There is an exception for Canadian oil, but there will be some more tariffs that kick in that on February 23, about 20 days from right now, 10% on China and a removal of something called de minimis. Matt Stoller will be joining us tomorrow to break that down. But effectively what it does is it shuts down the loophole for any package entering the United States that is under the value of $800 that allows huge Amazon China sellers to do business. It's the way that Temu the way that shein many of these other Chinese companies which do direct e commerce to the United States. Arguably, in my opinion, one of the tariffs that was put there. But Trump also was asked here about his pledge to reduce prices and how that may conflict with tariffs. Let's go ahead and take a listen to that.

[Krystal Ball]

You promised Americans to try to reduce costs. And so many of the products that would be tariffed when they come into the country, the outgoing country is not paying the tariff. The buyers in the United States pay that and then that's passed on to consumers in most instances, sometimes. How would you expect to have prices come down? You have such a broad plan for tariffs and what do you say to the voters who want to see you reduce everyday costs?

[Donald Trump]

Well, let me just tell you that I got elected for a lot of reasons. Number one was the border. Number two was inflation because I had almost no inflation and yet I charged hundreds of billions of dollars of tariffs to countries. And think of it, I had almost no inflation and took in $600 billion of money from other countries. And tariffs don't cause inflation, they cause success, cause big success. So we're going to have great success. There could be some temporary short term disruption and people will understand that I had that when I negotiated some of the good deals for the farmers.

[George M. Johnson]

People will understand that Trump is really betting on that. Let's put this up there on the screen. This is from his Truth Social over the weekend. The tariff lobby headed by the globalists, always wrong Wall Street Journal is working hard to justify countries like Canada, Mexico and who continue the decades long rip off of America. He continues there. He says make your product in the USA there are no tariffs. Why should the United States lose trillions of dollars in subsidizing other countries? He talks there and says specifically about the quote unquote pain that may arise. Will there be some pain? Yes, maybe and maybe not. So that is the official word there from Donald Trump. He will be speaking this morning, as I understand it, with Mexico and Canada. These tariffs by the way, are not yet in effect. They go into effect tomorrow. So that's where things stand right now, Crystal. Absolutely dizzying weekend here in Washington. As of right now. You know, the markets are actually having a pretty modest reaction. So we're filming. This is about 7:55am you and I are talking S&P 500 down by about 1.6%. But to be honest, I mean that's really not much. That basically just returns it to the value of where it was just a month ago remains up 15% on the last six months. So it's not like the markets have taken a major reaction. Approximately 30% of all U.S. goods enter from Canada or Mexico, but they are disproportionately more important for the Canadians and the Mexicans. About 75% of goods from Canada come to the United States. About 80% of goods from Mexico come to the United States.

[Krystal Ball]

So Canada, Mexico and China are three largest trading partners. Together, they make up about 40% of US imports, the areas that will be most impacted. And Jeff Stein can break this down for us as well. Auto manufacturing. So the estimate is that this will increase the price of cars by about $3,000. Huge amount of produce coming in particular from Mexico, Canada, we rely on for a lot of building materials. Also, Trump seemingly recognizing the inflationary impacts that these tariffs will have put a lower tariff on oil imports from Canada. And I believe the amount is it's between 60 and 70% of all of our oil imports do come from Canada.

[George M. Johnson]

That's right.

[Krystal Ball]

The expectation is in particular in the Midwest that will spike gas prices. Now, there's a few things to say about what we know from the past and what the impacts were and also about, you know, what it was that American people thought they were voting for. With Donald Trump, as he himself acknowledged there, one of the top reasons they voted for him was because they were concerned about inflation and the cost of living crisis. Almost every economist will tell you these tariffs are going to raise prices. Probably the place where they will be most immediately felt is in the grocery store in terms of produce, you know, things like auto manufacturers, because that's a longer timeline to delivery. It may take a longer time period before you see those price hikes go into effect. But while it is not inevitable that producers pass on the cost to consumers, we know that is in fact what they have largely done in the past with regards to the tariffs put in place both by Trump and Biden in, you know, in Biden's term and in Trump's previous term. We also know that, you know, in terms of bringing manufacturing jobs back to the U.S. trump's tariffs in the first term, which I supported, by the way, were not actually effective at that because they weren't paired with an overarching industrial policy. Biden continued those tariffs and expanded them in certain markets, paired it with somewhat of an industrial policy that did help to reshore some jobs. The other thing that I'll say here is that the justification for these is pretty confused. So Trump has to put a national security justification around this, which is why he talks so much about fentanyl, even though, you know, with regard to Canada, 1% of all fentanyl comes in from the Canadian border. Like, it really is a preposterous excuse in terms of Canada, even in terms of Mexico. Right. A lot of the reason why the business community was very comfortable with Trump this time around, and I think probably even why the stock market isn't reacting even more than it is, is they still see this as effectively like a threat. They've never really taken seriously the rhetoric that he has consistently used saying, I want across the board tariffs. We're going to really rely on tariffs, we're going to get rid of the income tax and replace it with tariffs, et cetera, et cetera. And part what they thought he would do was to use the threat of tariffs to coerce behavior. Well, in fact, he got some wins from Mexico already. Claudia Sheinbaum did some gigantic fentanyl busts. They significantly reduced the amount of fentanyl actually coming across the border in December in anticipation of Trump coming in. I think they see something like £1,000 of fentanyl. Obviously, that's still £1,000 too many. That is the lowest amount that we have seen in quite some time. So unclear what he even wants Canada to do or what the purpose of that really is. Mexico is already doing the things that he wants them to do, and he's still slapping the tariffs on. So the indication of the rest of the world is basically like, there's nothing you can do to appease this guy. You may as well either band together in some sort of an alternative coalition or rush more into the arms of Asia. So obviously, I think that this is incredibly foolish, counterproductive is just going to spike prices, is not going to increase manufacturing wages or bring manufacturing back, because that's not the track record and prove pretty devastating to our economy.

[George M. Johnson]

I totally disagree. I'm very supportive of these tariffs and I'll tell you why, which is that the reason, first of all, look, the fentanyl thing, you're not wrong, which is it's obviously a pretext. So there's this law called ipa, which affect the International Economic Emergency Powers act, which was passed in the 1970s, allows the president to institute immediate tariffs by going around Congress as long as there's a national threat that exists, quote, solely outside of the United States. But, you know, if you look at that tweet that he put or truth, I Apologize where? He was talking about the tariffs. What did he say? He said, we have to make your products in the USA and there are no tariffs. The truth is this is again, 80% of all goods from Mexico come to the United States. Now 75% come from Canada. The integration of our economies for the auto market has devastated manufacturing in the upper Midwest area, which voted for Donald Trump. Now the way to accelerate that is to renegotiate our trade agreement.

[Krystal Ball]

The problem is he do that in his.

[George M. Johnson]

Yes, he did. And it was not as good. We criticized it. I remember talking about it.

[Krystal Ball]

We're operating under the trade agreement that you put into place. Buddy, if there's a problem, it's on you.

[George M. Johnson]

We cannot Renegotiate that until 2026. If we stick with the current policy, however, with the current tariffs, we can accelerate renegotiation. We don't have to wait three years. And then who knows if Congress will even fast track it. It could take until 2027, 2028 to be able to get that through. This is basically the only loophole way to immediately restart negotiations of the usmca, which is effectively the end goal. So everyone keeps saying that. And I do wanna take an opportunity here to dunk on the UAW, who I think is acting incredibly foolishly. A7. Can we please put that up there on the screen? You know, UAW President Shawn Fain put out the statement, the UAW supports aggressive tariff action to protect American manufacturing. First step to undoing decades of anti worker trade policy. We do not support using factory workers as pawns in a fight over immigration or drug policy. I mean, look, I'm an idiot and I can find out very easily that IPA tariffs are not actually just about immigration or drugs.

[Krystal Ball]

I mean, that's how Trump's selling them.

[George M. Johnson]

But you have to do it justification. So second, he goes, if Trump is serious about bringing back blue collar jobs destroyed by nafta, he should do a step further and immediately seek to renegotiate our broken trade deals. Again, literally yesterday they put out a statement saying they want to accelerate renegotiation of USMCA. So it sounds like to me, Mr. Fain and others would like for pretty little words not to include immigration and drug policy. And it's like, look guys, it's not pretty, it's not, you know, it's not all bow tied and it's not all process, but if you actually want to restore a trade imbalance, the only way is to slap tariffs on our largest trading partners to force and compel different behavior. And to reset rules that actually are good for the American economy. Now, I'm not gonna sit here and deny I'm not one of those Biden spending egg pricer people, I don't think I've ever been who accuse this.

[Krystal Ball]

You did an entire monologue about egg prices under Biden.

[George M. Johnson]

But I did not say that it was because of his spending. I said it was bad. And I certainly agree. Now, as I said here, is it.

[Krystal Ball]

Gonna be bad now when produce prices spike in the grocery stores?

[George M. Johnson]

I don't think it's a good thing.

[Krystal Ball]

I don't think it's done.

[George M. Johnson]

We've done price gouging segments in.

[Krystal Ball]

I don't think it's a bad idea to. If you have a strategic industry like the auto industry. Right. And this was the focus of the, you know, some of the Biden administration tariffs in particular protect the domestic EV auto industry. Because the truth of the matter is China's kicking our ass there. And if we didn't have, have tariffs on Chinese cars, we would have no domestic EV auto industry, effectively. I think that makes sense. Putting tariffs on building materials, on oil, on avocados, on tomatoes, like, why?

[George M. Johnson]

Because that's the only way you get them.

[Krystal Ball]

The only thing you do, the only thing you do with that is increase prices for consumers and cause countries around the world to go, like, these people are insane. There's nothing we can do to appease this guy. So, no, I think this makes no sense. I think it is directly counter to what the American people thought that they were voting for. Now you can say, like, yes, he was out there talking about tariffs the whole time, but his tariff policy, when you poll, it actually never been popular, which is surprising to me, to be honest with you. I thought it would be more popular. Has never been more popular. And the number one reason that people said they were voting for Trump was to bring prices down. This is the polar opposite of that. So, listen, I think that this is foolish. I think it will be economically catastrophic. I do not think it will accomplish any of the things that he thinks. I don't even know what he thinks it's going to accomplish. Because again, the rationale for this has been completely confused and all over the map. And the idea that it has anything to do with, like, fentanyl coming out of Canada is utterly preposterous.

[George M. Johnson]

It's a legal pretext. It's the only way that you can institute the tariffs. Look, we have Jeff Stein standing by, who actually broke the news on a lot of this, so we can continue our debate. After we talk to him, why don't we go ahead and bring him in?

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[George M. Johnson]

Joining us now is friend of the show, Jeff Stein from the Washington Post. He's broken a ton of news on this topic, and it's great to talk to him. Good to see you, man.

[Jeff Stein]

Hey, thanks, Kristen. Thanks for having me.

[George M. Johnson]

So, Jeff, there's a lot of discussion now here in Washington. You've been in the camp always that the tariff threat was real. Let's go ahead and put this up there on the screen from Axios A5, please, about the average cost that the US household could get hit with, some $830 as a result of these tariffs. Could you go ahead and break down for us of what we know right now about the institution, whether it'll actually go into effect, some negotiation, other and other things that you're hearing?

[Jeff Stein]

So the executive order that the president signed does order, you know, 25% across the board. Tariffs on Mexico and Canada. No exceptions except for, I guess, one exception of energy, which is at 10%, I believe. And that is moving ahead as far as we can tell. As you said, Sagar, at every point of this process, someone has said this is a bluff. This is a negotiating tactic. This is a way to get X or Y. And every person I've spoken to who has spoken directly to the president says that. He says, no, this is not a negotiating tactic. This is not a ploy. This is like what I believe. And you know, I was listening to your guys, like, debate about sort of the efficacy or the benefits of this, which I think captured sort of like the broader debate very well. The thing that has bothered me throughout this whole discussion is that there's a segment of people, particularly on Wall street, who have been saying like, he doesn't mean this, right? And it's just like, what do you want him to do to Prove that he does. Like, he basically just, like, ripped his shirt off and, like, wrote tariffs, like, on his chest and, like, campaigned on that throughout the country. Like, it was impossible to more seriously embrace this idea than Trump did in the 2024 presidential campaign. I was talking last week to a Republican senator. I'm going to, you know, preserve his anonymity here. And I said, you know, like, what's going to happen with the tariffs? And the senator said to me, like. Like, I have been begging him to not do this. Like, I'm. He's in a state that's, like, very dependent on trade with Canada. I was like, so what? What does that conversation look like? He was like, I spoke to the president for two hours. All he wanted to talk about was how great William McKinley was. That is not, like someone who's, like, using this as a negotiating point. That's someone who's who, like, is thinking about his legacy, thinking about, like, sort of these huge questions about the ordering of the American economy and trying and is determined to go there regardless of the people in his orbit. So I just feel like, like, you can be for the tariffs. You can be not for the tariffs, but, like, pick one.

[George M. Johnson]

Right.

[Jeff Stein]

Like this. This, like. Like the superimposed quantum state of, like, I'm not for the terrorists, but I'm for. Trump's economic policy is, like, increasingly untenable.

[George M. Johnson]

Yeah. That's like the Tea Party current position on the tariffs.

[Krystal Ball]

Well, and so people understand McKinley. When McKinley was in office, first of all, huge amount of federal government was wildly smaller than it is now. Huge amount of revenues came from tariffs. This was before there was even an income tax, which is something else that Trump has floated, maybe not as consistently as a huge tariff regime, but he has floated we're gonna substitute in tariffs for the income tax, which, I mean, what do tariffs right now make up as a percent of federal revenue? It's, like, minuscule. It's a rounding error, effectively. Yeah. So this would be. I mean, it's impossible to imagine that such a thing could happen with the modern country and modern federal government as it exists. What do you make of the market reaction so far this morning, Jeff? Because it seems like there may still be baked in a little bit, like, yeah, sure, okay. He's doing these across the board tariffs, but he's talking to these leaders today like, he's not really going to go forward with this. Right.

[Jeff Stein]

I do think the markets continue to discount the severity of this. And also, Trump has been talking about, you know, he campaigned on universal across the World tariffs. And I see no reason to think that, that Mexico and Canada will be the last countries he slaps tariffs on. I mean, if you follow the economic logic of hitting Mexico and Canada to its conclusion, why not do it to all of Europe and all of China and all of India and all of, et cetera, et cetera, et cetera, et cetera, et cetera. I mean, I think, I don't know, there's a lot of different angles here, obviously that are really important to discuss. I mean, Canada is not the reason that the Midwest has lost its manufacturing base. I mean, the most articulate, strident critics of NAFTA would not identify in Canadian labor practices the source of the long decline in American manufacturing. It was just like nobody would say that. None of the people who won the intellectual grounding for Trump's push on trade. Like, there are people obviously like Michael Pettis and, you know, like Peter Navarro. Peter Navarro. People in that orbit, you know, like they, they have like a very coherent sort of explanation about, like how NAFTA and the opening of China, like sort of, and American trade practices led to the destruction of the American middle class and sort of blue collar job, you know, blue collar jobs in Michigan, etc. But no one would say that Canada was responsible for any of that. It's just not, it's like non responsive to like the issue. So, you know, if they want to go after China or they want to go after particular sets of sectors. But you know, it's like the Democratic response to this is still so confusing and weird because it's like, oh, we like them in some cases, not all. And I think that's a very confusing message to people.

[George M. Johnson]

Yeah, I think it's interesting as well. Whenever we're talking here in the broader context of some of these tariffs, some of the things you've also tracked is the legal response. So as I understand it, this will almost certainly come under, like, under scrutiny from the courts. These IEPA type tariffs have been used sparingly in the past, and consumer groups and others are likely to sue. What do you think? How do you think that will proceed through the federal court system, considering what just happened with the OMB funding?

[Jeff Stein]

I actually think the Supreme Court is quite likely to defer to President Trump's authority here. IPA, as you mentioned, is typically, you know, this 1977 law is typically used as the basis for economic sanctions. And even though the Constitution is quite clear in Article 2 that the Congress has the power to levy taxes, there are huge, there's a huge amount of Deference from the court to the executive branch in matters of national security. And that's what they're citing here with the fentanyl and other things. So typically, I mean even I've reported, as you guys have me on for, about economic sanctions a lot typically the courts have barely interfered with that at all. So I actually think the court challenge is unlikely to be successful.

[Krystal Ball]

Jeff, what can people expect in terms of assuming that this tariff regime goes forward and retaliatory tariffs are levied from Canada, China and Mexico as have been threatened? What do you think that people can expect in terms of impact on their day to day lives?

[Jeff Stein]

I mean, I think the macroeconomics here are a little more complicated than people realize. There is. You know, the Trump people I've been speaking to have been arguing, not unpersuasively, that currency markets will shift such that you'll see, you know, the overall prices that you see at the grocery store may not look dramatically higher. That might happen. I think there's reason to believe that. But there's a potential for the sort of the through line for how this actually gets implemented and actually effectuated in the economy or instead of price appreciation, sort of changes in currency valuation between the peso and us in Canada and that, that might depress our purchasing power but not necessarily lead to sticker shock at the grocery store. So people might get poorer and not see the visible impact that they're sort of accustomed, that they, that they were being primed to see now. Which is I think a bit of a danger for Democrats if they warn price hikes, price hikes, price hikes, price price hikes. And then there's this more nuanced, still very damaging but more nuanced effect. Yeah, I'll just say like imagine a Democrat in office doing this. This is like the biggest tax hike, if you want to call it tariff or tax hike, which I think think most economists would. The biggest tax hike in decades. I mean close to a century more than a trillion dollars worth of stuff is going to be taxed at 25%. I mean imagine Barack Obama being like, we're going to do like $1 trillion on taxes on everyone. It's like, it's an incredible, you know, thing that a Democrat can never touch with a 20 foot pole.

[George M. Johnson]

Well, without getting too crazy, can you just modestly try and explain some of those currency things? Because that's going to be a big, big point of contention. So the peso and the Canadian dollar are in free fall of this morning. The purchasing power of the dollar the dollar is becoming stronger as a result. Just get into a little bit of that so that I don't have to do it and so that we can prime everybody for this conversation in the months ahead.

[Jeff Stein]

You know, I haven't covered this in a couple of weeks, but my understanding basically is that if the purchasing power of the US consumer is basically like depressed by the tariffs. Basically, if the tariffs make things so that there's each import is more expensive, it's possible that the prices of goods for stuff in the US falls. Right. If the purchasing power of a consumer stays constant, but it gets more expensive for the imported goods, then the ability of the US consumer to spend the prices for other things because there's more demand than supply for the outstanding things that are coming into the country or are being produced domestically will go down. So there's going to be some substitution effect for the effect of the tariff overall because the basket of goods is smaller than it would be in a non tariff world. The sort of like the overall economic benefit that each consumer gets will be smaller, but because of the substitution effect, it might be a little hard to detect that. Does that make sense?

[George M. Johnson]

Yes, yes, that's a better, a better explanation than I would have been.

[Jeff Stein]

I was kind of revealing that like midway through that.

[George M. Johnson]

No, no, you did a good job. Otherwise I'm just gonna have to read from Claude or chat. So. Yeah, I'd rather come from.

[Krystal Ball]

You prefer Jeff.

[George M. Johnson]

We, we prefer the job.

[Krystal Ball]

One last thing just before we let you go because this will preview our next segment as well. You also had a big scoop with regard to Elon and his acolytes seizing control of treasury payment system. Can you talk just a little bit top line about that news you were able to break as well?

[Jeff Stein]

Yeah, I mean this is what I've been focused on a lot. You know, the senior most career official at the Treasury Department was told by allies or deputies of Elon Musk to hand over the sort of system responsible for dispersing $6 trillion of payments. Medicare, Social Security, basically everything that the federal government does. And this guy said, you know, you don't have legal authority essentially to access that. And the mosque people effectively pushed him out. He was, he went on leave and resigned on Friday. And now we reported on Saturday that these Musk people now have access to this system. And the Trump administration has been very clear that it intends to massively try to exert unilateral authority to shut down payments approved by Congress. And what the Musk people will do with that information is anyone's guess. Really.

[George M. Johnson]

All right.

[Krystal Ball]

All right, Jeff. Well, thank you so much. I know you gotta run because you got 18 other stories that you need to break this morning. So great to see you. Thank you so much as always, always for your time.

[George M. Johnson]

Good to see you.

[Jeff Stein]

Hang in there guys.

[Krystal Ball]

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[George M. Johnson]

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[Krystal Ball]

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[Krystal Ball]

So as we just previewed with Jeff Stein, who originally broke this story, Elon Musk and his acolytes have effectively seized the Treasury Department and they have control over all of the payments that go out from the federal government along with seizing various other agencies that will get to in a moment. Let's go and put Jeff's reporting here up on the screen from the Washington Post. He says scoop, the highest ranking treasury officials expected to depart soon. And that has now happened after a clash with Elon Musk allies over their demands for access to a sensitive internal government payment system. Musk allies wanted access to that system responsible for dispersing trillions in federal government payments annually as part of Doge Treasury Career staff saw the request, as he puts it, highly unusual. David Lebrick, viewed internally as consummate non political civil servant, expected to exit after joining treasury in 1989. Last week he was acting treasury secretary. And the update there is now Musk has in fact and his apparatchiks, allies, whatever you want to call them, have been given access to that treasury payment system. Now, just to explain to people how this works, all of the money, Social Security payments, Medicare payments, veterans benefits, all of the money that goes out from the federal government is dispersed by this system. Treasury officials have no authority to pick and choose which of these payments go out because as we all know from Constitution 101, Congress has the power of the purpose, they appropriate the funds. And so this system is really just about executing on the payments that have already been congressionally authorized. So that's why, that's one of the reasons why this is such a big deal. The other reason why this is such a big deal is Elon Musk is not president of the United States. No one voted for this guy. He hasn't been confirmed for any sort of a Senate position. And now he and his acolytes have access to to all of this incredibly sensitive information. Also, Elon Musk being the richest man in the world, having his own massive government contracts and conflicts of interest. Since he is not in a Senate confirmed position, he has not mitigated any of those conflicts of interest. And we can put the next piece up on the screen. He at least claims that he is using this access to shut down payments that he does not like. Now this is based on Mike Flynn, former General Mike Flynn, who tweeted out. Oh, the Lutheran faith is using this money. They receive massive amounts of taxpayer dollars with the indication being that they're using it for money laundering and human trafficking. Most of this money actually goes for things like it's like Medicaid block grants. It goes for things like Head Start and Meals on Wheels and domestic violence, addiction services, those sorts of things. But whether or not you think that this organization is good, bad, indifferent, the bottom line is it's not up to Elon Musk or General Mike Flynn to decide whether or not these payments go out. So that's piece number one is the Treasury. Piece number two can put B3 up on the screen here. This is the Office of Personnel Management, basically the HR department for the entire federal government. Here you also have Musk aids locking out career workers from this Office of Personnel Management system. I'll go ahead and read this to you. They say aids to Elon Musk, charged with running the U.S. government Human resources Agency have locked career civil servants out of computer systems that contain the personal data of millions of federal employees. Those systems include a vast database called Enterprise Human Resources Integration which contains dates of birth, Social Security numbers, appraisals, home addresses, pay grades and length of service of government workers. Quote, we have no visibility into what they are doing with the computer data systems. That is creating great concern. There is no oversight. It creates real cybersecurity and hacking implications. Next piece before the General Services Administration. Elon Musk's allies have infiltrated that agency as well. And they're looking for ways that sort of like it's almost like the operations managers of the government looking for ways to use White House credentials to access agency tech, potentially allowing them to remote into laptops, read emails and more sources say. I will pause for a minute before we get into what is the latest with regard to the usaid which Musk has said he's been feeding into a wood chipper gang. However you feel about that agency, that's up to Congress to decide whether or not we're going to eliminate various federal government agencies. Not a man who no one voted for and has no Senate confirmed position or power. So I saw grim and trying to grapple with what all this means. How to describe it. I think it is somewhere beyond a constitutional crisis. I think it is is probably short of a coup given that he doesn't as far as I know have control of the military. But that's the kind of territory we're getting into when you have one guy, richest man on the planet, not elected, no Senate confirmed position who has seized control of the payment system. All of the federal government's sensitive data is deciding willy nilly what payment should go out and what shouldn't, what agencies should exist and shouldn't and has effectively done this and sees this with this handful of 20 year old kids with, as far as I can tell, very little pushback.

[George M. Johnson]

In principle, it's obviously insane and I know that there are a lot of Doge fanboys and others who are out there, but this very much falls in the territory of their unilateralism. And in fact, you also, you know, even my friend Ryan Graduski made a good point. He's like, look, let's say there's a guy who made all of his money based in large part to some federal government policy. He's like, should we really give him reins over the federal government? This is where I really depart with a lot of my Silicon Valley tech right friends. Even though in principle I may not disagree with getting rid of USAID or whatever, if it's gone through at least somewhat of a more democratic process, like it'd be better for me if the Secretary of State were doing it or the President, you know, people who are elected, confirmed by the United States Senate, their theory, as I understand it, is that they're trying to invite a lawsuit under the Impoundment act that we had talked about previously. What they're trying to do is to stretch things as much as possible in terms of control before legal challenges can come and kick in. And under impoundment, trying to basically challenge what we talked about previously, that principle where the federal government is not required to stick with this. In that said, though, there is a decent amount of executive authority that the President can have in disbursement of payment specifically, again, as I understand it is around NGOs, which, because that comes down to like administrative judgment for disbursement of funds so Congress might appropriate X millions of dollars for like you were talking about Meals on Wheels, like paying for the home, then the administrators themselves can decide for whom to disperse the contract. So I was looking into the legal justification for that a bit and that seems to be the ground that they're standing on on top of trying to invite a challenge for impoundment to fast track it to the Supreme Court.

[Krystal Ball]

I mean, it is, as far as I can tell, brazenly illegal for this random dude with no electoral mandate, no congressional mandate, no mandate whatsoever to just go in and be like, I don't like what this, I don't like this appropriation we're not gonna push this one out. I mean, this is, you know, it's clear cut, not just separation of powers, but it'd be one thing if it was the president, if there was any transparency around this whatsoever. I mean, even that, I think, is blatantly unconstitutional. But he has effectively made Congress completely irrelevant. Like right now, it wouldn't matter even if Democrats had won the House and Senate, whatever. Like, Congress is now irrelevant, even if, whatever they pass. If Elon Musk can just come in and be like, no, I don't like that, not doing that, that is as clearly unconstitutional as it could possibly get. And so to me, I think you would say probably Sahara, that I was fairly alarmist in advance of Trump getting elected. I think he's an authoritarian. I think he's fascist. I was deeply concerned about the things that he had announced that he had planned to do. This is beyond what I could have anticipated. And it's really the Musk, Elon Musk factor that I did not weigh in. I did not anticipate that in week two we'd be talking about the richest man on the planet having effectively seized the government with basically no resistance. And so I knew that there were basically no guardrails in place anymore. The Supreme Court has given Trump pretty blanket immunity for anything that's remotely connected to the job. Any sort of Republican opposition has been, by and large, pretty much vanquished any of the sort of career civil servants or the type of, like the general millies, or the type of more establishment folks who are interested in maintaining the institutions like they've all been excised. I knew all of this going in. I did not have the creativity to imagine the richest man on the planet seizing control of the government in week number two. Could not see that one particularly coming. And so the fact that there's been next to no institutional pushback, you have. The media is a mess. The Democratic Party is basically, why do they even exist at this point? Yeah, I don't know where this goes and I don't know how it ends. And even the idea, like, okay, they want to push for this impoundment control, legal fight or whatever. J.D. vance came out and was like, yeah, and if we get a court ruling that we don't like, we'll be like, Andrew Jackson, go ahead and enforce it with your army. So I don't have any confidence that they're gonna abide by any legal rulings that would come down against them. They seem dead set, and Elon seems dead set on doing whatever Elon Musk. Musk wants to do, and the rest of us are irrelevant. We just get to stand by and watch. So, you know, I'm sort of cheering for Trump and Elon to have some sort of falling out and for Trump, who at least is duly elected President of the United States, to reassert some control over the government. So far, the indications in that direction are not great, given that Trump is out tweeting talking points seemingly directly from Elon Musk about South African land appropriation and saying that, you know, he's gonna stop sending aid to South Africa because of this law that they passed in their own country. In addition to all of this, I mentioned the USAID stuff. So let me go through that as well. Let's go ahead and we can just go through an order here. B5. This was the first piece. So CNN reported that senior USAID security officials were put on leave after physically trying to refuse Musk's DOGE access to agency systems. Musk's cronies threatened to call U.S. marshals to be allowed access to USAID. They wanted to gain access to security systems and personnel files, three sources said. Two of those sources also said the DOGE personnel wanted access to classified information which only those with security clearances and a specific need to know are able to access. On Sunday, in response to CNN's report about the incident, Musk said that USAID is a criminal organization. Time for it to die. Their account, their Twitter account has been taken down. Their website has been taken down as well. We can put, let's put B8 up on the screen here because this is the very latest. USAID staffers were told to stay out of Washington headquarters after Musk said that Trump agreed to close it. Now usaid, it's effectively a tool of US Soft power. There are all sorts of things that USAID does that are like democracy meddling, that I in no way support. USAID does also run some really critical programs, life saving programs, things like pepfar, things like, you know, tackling malaria in developing countries. So they do some good as well. It really doesn't matter how you feel about this agency. The truth of the matter is it is not up to Elon Musk or Donald Trump to just say, we're done with this. This also clearly has to go through Congress. You do not, as the richest man on the planet, have a right to just pick and choose which federal government agencies you like and which you don't. Guess what the people's elected representatives get to have a say and input into this. So this is where we are this morning. Effectively a hostile takeover of the US Government by Elon Musk. And incredibly, this would be bad from anyone, right? I promise you I would be saying the same thing if it was Bill Gates or George Soros. And I promise you Republicans would have a big problem with it if it was George Soros who had seized control of the Treasury Department system and was randomly shuttering agencies, US government agencies that he happened to not like for whatever ideological and self interested. So to me this is an incredibly. I don't even know what words to put it. Like I said before, way beyond constitutional crisis. Probably not quite at coup because the military is still under control by Donald Trump, but we're somewhere in that range when the Kids Turn unholy Harrelson's Own Keeps My patients Divine Life can be.

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[Krystal Ball]

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[Eric Zimmer]

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[George M. Johnson]

When I smoke weed, I get lost in the music.

[Krystal Ball]

I like to isolate each instrument. The rhythmic bass, the harmonies on the piano.

[Eric Zimmer]

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[Krystal Ball]

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[George M. Johnson]

Here's what. Okay. On usaid, and this is where, I mean, this is why the constitutional crisis thing is like not technically accur. It's been authorized by Congress, but nobody says that it has to be an existing agency of the government. If you fold it into the State Department, which is what they said that they did, and the programs can still disperse money.

[Krystal Ball]

Elon said he's feeding it into a wood chipper. Yes, but he's not folding it under.

[George M. Johnson]

The umbrella this or that USAID administration.

[Krystal Ball]

Not to show up SecDef and seizing control of the systems. This isn't like, oh, we're gonna do a little reform. It's just we're getting rid of this.

[George M. Johnson]

This is what happened.

[Krystal Ball]

We think it's bad and evil in a criminal organization.

[George M. Johnson]

But this is what I'm getting at is that if you fold it under the State Department, that's actually totally within the executive orderity of the president. Coming back to this, and this is actually what I've been thinking about a lot too here is I don't support Elon or any person being able to do this. But I think the lack of institutional pushback is because I think there was actually a broad support for this type of burn shit down. I'm not just talking about either. No, I see. This is where I totally disagree. People do not push the red button for Trump without some serious shit going wrong.

[Krystal Ball]

When did anyone, when did anyone even mention on the campaign trail, like, we're going to get rid of usaid. Trump has never, Trump has never run as an austerity politician. You know that.

[George M. Johnson]

This is not austerity.

[Krystal Ball]

Of course it is.

[George M. Johnson]

It's 0.7% of the federal budget, like you said, fomenting coups in Africa.

[Krystal Ball]

But soccer. I'm not just talking about usaid. I'm talking about Elon. Whole of government seizure. He is a Javier Millay style anarcho capitalist. He wants to take a massive hatchet to the federal government so that it is completely impotent and weak and can't stand up against him or any other robber baron, corporate titan. That is his goal. That has never been the Trump approach. And I can't believe I'm here, like, cheering for Donald Trump to reassert his ideology, but I actually am in this case because this is not remotely what people voted for. Greenland wasn't mentioned in the.

[George M. Johnson]

No, it hasn't. It was mentioned.

[Krystal Ball]

USAID wasn't mentioned in the campaign. Going to war with Canada wasn't mentioned in the campaign.

[George M. Johnson]

We're not going to war with Canada.

[Krystal Ball]

None of this economic war.

[George M. Johnson]

That was actually.

[Krystal Ball]

None of this. None of this austerity, anarcho capitalist, slash and burn. They didn't campaign on any of this. We certainly didn't campaign on. He certainly didn't campaign on. I'm going to allow Elon Musk total and complete control of the government. That was never part of the campaign pledge. And you see, people don't like it because Elon Musk approval rating has plummeted. Doge's approval rating is like 29%. People are not excited about this direction that they're going in whatsoever. They were upset about gas prices. They were upset about cost of living. They were upset about what they perceived as border chaos. They voted for those things. Yes. Does he have a mandate on those things? Yes. This has nothing to do with any of that. No one was like, yes. I would like the richest man on the earth, an unelected billionaire, to have access to every sensitive government system and control over it. That's insane. No one votes.

[George M. Johnson]

I don't agree with that because first of all, Elon was literally on the campaign trail and he was with him. Doge is one of those things where, if you're asking these podcast guys what they're the most excited about about organically, every single one of them has brought up Doge to me, they're like, I can't wait to see this slash and burn. And I think what it gets to is a deep lack of institutional trust. Now, coming back to it, I don't agree at all that none of these things weren't mentioned. Doge literally was a promise by Trump and Elon on the campaign trail. I don't even support a lot of Doge stuff.

[Krystal Ball]

Thought it was like a make work irrelevant blue ribbon commission.

[George M. Johnson]

Okay. In reality, that's probably what it all will be because in terms of all of this, cutting USA is 0.7% of the federal budget. Like in terms of even quote, seizing control of the payments. If 99% of the payments go through and one NGO gets cut off, I'm not gonna cry about it. So this is what I'm saying.

[Krystal Ball]

What would you say if it was. I mean it's almost unimaginable cuz they would never do this. It was Kamala Harris that got elected and George Soros is now in control of the treasury, the gsa, the OPM cutting agencies. What would you say?

[George M. Johnson]

No, I agree with you on the, on the actual conflict of interest. What I'm trying to reconcile.

[Krystal Ball]

It's not just a conflict of interest. It is blatantly unconstitutional. It is a seizure of the government is rendering the congressional duly elected congressional representatives completely irrelevant by the richest man on the planet. What I am trying to reconcile is.

[George M. Johnson]

What you just said is that there is no institutional pushback. There's not even really. I don't think that there's some major public outcry somewhat. Quinnipiac polled Elon. We'll see. All right, in terms of doge and all of that. And also, did we not just live through an election where polls were complete bullshit? How are we supposed to know whether.

[Krystal Ball]

Or not you like those polls when they say what you like on immigration?

[George M. Johnson]

Well, okay, so I can pair that. When Donald Trump gets elected in the popular vote, then it gets to just a bunch of Hispanic people.

[Krystal Ball]

Grab onto the ones you like.

[George M. Johnson]

We can pair electoral result with a poll and then we can say that there's some relative confidence tracking poll on Elon. Like look, if anything the electoral results show people don't give a shit whether Elon. Is there a support? If you get creamed in the midterms, then yeah, maybe. But I'm very curious to see how this stuff goes.

[Krystal Ball]

What would it even matter at this point if they get creamed in the midterm? Since Congress does not even.

[George M. Johnson]

This is where we're at. We're all exaggerate. Again, like using constitutional. This is why I get upset or annoyed about this whole Nazi fascist. It's like words have meaning. It's not a constitutional crisis whenever at one Meals on Wheels NGO gets a payment delay for not.

[Krystal Ball]

That's not the point. The point is not because there are gradations. There is not. The point is not oh, one NGO is gonna be defunded. The point is that this is not the way our government is set up to work. We don't have a king. We're not supposed to have rule by one Single oligarch. And that is what we have right now. That's why this is a constitutional crisis. And I guarantee you, if it was George Soros, if it was Bill Gates, if it was Mark Zuckerberg working hand in glove with Kamala Harris and locking out everybody from the government and seizing their laptop, getting access to their laptops and seizing control over the entire federal government disbursement system, I guarantee you Republicans would agree that it was a constitutional crisis. Because you're fundamentally talking about not just the separate. That's why I say it's beyond a constitutional crisis. Because this isn't even just about some like executive branch versus legislative branch dispute. This is about someone who is not elected or confirmed to anything taking control of things he has no right to take control of. It is a crime spree. That it is a smash and grab crime spree.

[George M. Johnson]

Well, there's no grab happening. There's smash happening. But this is what I'm trying to get at. And this is where, again, words matter and terms. For example, under the aumf, every president since George W. Bush has violated the Constitution. Correct? Right. Is that a constitutional crisis by bombing countries which Congress has not declared war on? It's bad. Are we gonna call it a constitutional crisis? No, we're not. Because that's been happening for 20 years. Unfortunately, it's become normalized. I fought against it for the entire time. But it falls within a scope of how things are working.

[Krystal Ball]

I would love it does not fall within any. Okay, but again, never had anything revolved like that.

[George M. Johnson]

Is that when we think about. When I come back to why is it that people, and I don't think it's good to have somebody who's unelected, billionaire, whatever, with tons of conflict of interest, who has his own enrichment, who is totally in control of this. Now, again, when we come back to why is it that so many people are totally supportive of this? Or at the very least a lot of the Republican coalition, It comes down to zero institutional trust and a genuine desire to blow shit up. And I don't think that you are understanding how many people. And this is the through line, through maga, everyone's like, how can Tulsi and RFK and Elon and Trump who have all of these conflicting things all come together, they are against the system. The system is broadly what people voted against in the popular vote. We can try and retcon it into inflation, egg prices and all of that. I don't really think so. I think really what it comes down to is a giant Fuck you for all of the way that things are done. Process things. By the way, many democratic socialists and others I've heard say screw the parliamentary.

[Krystal Ball]

No one voted.

[George M. Johnson]

How many of them have advocated for rejecting norms, stacking the Supreme Court? No, I've heard you say to be able to get what people want.

[Krystal Ball]

No one voted for Elon Musk.

[George M. Johnson]

I do.

[Krystal Ball]

No one voted for Elon Musk.

[George M. Johnson]

I wish that were the case. It's not true. I'm telling you.

[Krystal Ball]

Here's the other thing. Here's the other thing. Even if there is, I don't there 100% is the case that there is some constituency that's like go Doge. Destroy the federal government, like go after them, seize control of the treasury. That doesn't mean that it's constitutional, doesn't mean that it's right, doesn't mean it's gonna be good for the country, doesn't mean it's gonna have massive reverberating impacts. So it is a weird thing to watch. It's a strange feeling because there seems to be. It is true. I mean, you're right about, there's like a whimper about it. And it's so much is happening so quickly too that I don't think any normal person could really wrap their head around everything that is going on either. But once you have allowed a single unelected billionaire to take control of the federal government, you don't really go back to just being a normal democracy after that. And so massive, massively consequential, deeply troubling, incredibly disturbing. And I don't think that there's any, like, I don't think there's any reason we should have confidence they'd abide by court decisions. I don't think that we should have any confidence that they'll just like, you know, have normal elections next time around. Like that's where we're at. The level of unilateral seizure that is going on here is. I mean, it is difficult for me to put into words how disturbing, extraordinary, unusual, what is going on with all of this.

[George M. Johnson]

So I looked up that J.D. vance quote that you were claiming and here's what he said as so I think the thing you can do in the Senate is push the legal boundaries as far as the Supreme Court will let you take it to basically make it possible for democratically accountable people in the executive, in the legislature to fire mid level up to high level civil service. Like that to me is the meat of the administrative state. The key word there was as far as the Supreme Court will let you.

[Krystal Ball]

No, no, no.

[George M. Johnson]

This was a fact check based on this Supreme Court decision thing that he apparently said on some podcast in 2021. I didn't realize this was. Has he raised the specter of open disregard for federal court rulings? This is some reason from the. I'll send it if maybe he said something previously, but that's what I was able to find here.

[Krystal Ball]

I will tell you the code.

[George M. Johnson]

Okay, let's.

[Krystal Ball]

When the court stop, you stand before the country like Andrew Jackson did and said the Chief justice has made his ruling.

[George M. Johnson]

Now let him inform him I'm talking from the exact same transcript of where he says as far as the Supreme Court will let you take it. So if we want to cherry pick, you know, parts of this quote, let.

[Krystal Ball]

Him in support it. He says Steve Jessica has made his.

[George M. Johnson]

Ruling notice, we'll let you take it. Now who knows where that will come from. That was from a 2021 podcast that he made where he said this on. Yeah, so first of all, it was like what, four years ago now at this point, somebody should ask him, Margaret Brennan, whoever, if I ever get a chance to interview him, I'll ask him about it. But my point falls back on something pretty simple. This idea that like we're canceling elections or any of this. No, there's no evidence for that. Like you can't extrapolate things beyond. But even again, I'm gonna take it to the bigger, big democratic point. You made an important thing. Yeah, people. Oh so much has happened happening. And you know why people don't care? Because most people only care about results. They don't give a about process. That's something I've heard you say a million times. They don't care about the parliamentarian. Yeah, I've heard you talk about calling for the stack in the Supreme Court. They don't give a. They want the government to blow up.

[Krystal Ball]

Mean that it shouldn't. That it doesn't.

[George M. Johnson]

As long as they get there. As long as they get their Social Security. But then, okay.

[Krystal Ball]

They'Re about to hike prices through massive tariffs and also prices likely to go up through the taxation.

[George M. Johnson]

When you want to support, why does it not matter? Why do norms not matter when you want to stack the Supreme Court? Why do norms not matter whenever you want to disregard the parliamentarian? Because they agree with the end goal. My point is always with the same point you would make then. People don't care about that they want what a result. They want less immigration. Broadly. They want.

[Krystal Ball]

It's not the result that it's the federal government. No one voted for Meals on Wheels to be cut, Sagar.

[George M. Johnson]

But Meals on Wheels on Wheels has.

[Krystal Ball]

Been cut to get cut. No one voted for mass austerity, but.

[George M. Johnson]

It'S people like mass austerity. Even the idea is a definable term of where you massively reduce probably more than 5 to 10%, which is what.

[Krystal Ball]

Federal government's pushing for.

[George M. Johnson]

That's what he's pushing for. But that's not what's happened. We're not in mass austerity yet. And if it does that happen, then I'll call it mass austerity. What you have seen is a disruption of heads. What, not even Head Start, by the way. That didn't even happen. Wheels on Wheels had a question as to whether they were gonna get their funding and then the funding was immediately resumed after a 24 hour period. I'm not gonna cry if I'm paying for somebody's healthcare in Africa and it stops, okay? I don't give a shit about that. And I don't think most people should either.

[Krystal Ball]

Do you think that it is a concerning principle?

[George M. Johnson]

I've said yes.

[Krystal Ball]

That we should have now a billionaire who massively conflicted like huge. One of the largest government contractors who now has access to all of our Social Security numbers to access to the treasury payment system and is just willy nilly deciding who should get paid and who shouldn't. As a matter of principle, in terms of where the country goes from here, do you think that's a problem or no?

[George M. Johnson]

Absolutely, yes, I do. But you know, as again, I have to reconcile this. Most people are not principled. Most people don't care at all.

[Krystal Ball]

But I'm talking about most people.

[George M. Johnson]

Why not?

[Krystal Ball]

People are living their lives.

[George M. Johnson]

They're the voters. They're the ones who decide.

[Krystal Ball]

Your job is to explain to people why these things are troubling and why you should care, even if you are trying to live your life and just go about your business, why these things matter, not just now, but for the future and for the precedent that they set. So to just wave your hand, oh, no one cares. You have an important platform here to help to explain to people why it matters and why they should care and why it would be deeply troubling if it happened. Also if it was a Democrat who was in power at this point.

[George M. Johnson]

Absolutely. Listen again, I can till I'm blue in the face. Having somebody who is unelected make these decisions is bad. But listen, as a guy who holds very unpopular positions on many things, I have basically given up at a certain point of trying to change people's behavior. I have seen too many instances of how many people are just willing to go along with something as long as it conveniently aligns. And so as an analyst now, at this point, I'm just trying to understand democratically, as you said, why is this alarmist position either not taking up? Why are there not protests in the street over Doge? And I'm like, well, it's pretty clear to me that the public is so fed up with this that they are just. They are absolutely willing to go along and to cut the Trump administration a lot of slack until some serious shit goes wrong in their life. Now, on the tariffs or on Doge or any of this other stuff, it's totally possible if they screw up Medicare, Social Security, any of these other programs. But in the interim, I mean, what. Yeah, again, pepfar. Go ahead and pull pepfar. It was massively unpopular at the time under George W. Bush. He actually got hit a ton from the conservative movement for it. Basically, a lot of these global aid programs and all that, they exist. And when you try and reconcile with the fact that we don't even pay for our own citizens, they're ludicrous. They don't make any sense. And, yes, many USAID programs are basically venues in order to establish regime change abroad. They're not good. So, you know, this gets to the question of, are people gonna cry about lack of medication, going to some global health program abroad? No. And I don't think they should. They've always. Foreign aid is always pulled at, like, the absolute bottom.

[Krystal Ball]

That is true. When we talk about Social Security and maybe ask people, like, for example, the PEPFAR thing, I think there was a huge reaction against the PEPFAR funding being frozen. And because there was a public reaction, and this is one of the only things that's encouraging, they actually went back on that and said, no, no, this can be funded. Like, they gave an exemption so that PEPFAR could continue to be funded. So when people hear foreign aid in the abstract, I think you're correct that there's just like, oh, why are we doing that?

[George M. Johnson]

Okay, but in principle, why are we paying for other people's hiv? Do we even pay for our own concentration drugs?

[Krystal Ball]

The reason is because of soft power and imperialism. That's what it really. I mean, it's equivalent to, like. Similar to, like, China's Belt and Road Initiative. They're not doing it out of the goodness of our heart. We're not doing these USAID programs out of the goodness of our hearts. Not at the federal government level, at the population level. You know, to counter your point that people don't care. No, actually, I think people do care. They like to feel like our government is doing good things around the world, whether it's malaria prevention or dealing with HIV and AIDS in the developing world. A program that's been tremendously successful and saved millions and millions of lives. But all of that is really kind of beside the point because, as I said before, how you feel about USAID isn't really the issue here. The issue here is having some dude who happens to be the wealthiest man on the planet saying, I don't like that agency. I'm feeding it into the wood chipping with no congressional input, no input from your elected representatives, with no Senate confirmation, having, no one having voted for him. That is the issue that is at hand. How you feel about USAID is really quite irrelevant to that conversation. And that is truly a place we have never been in before. So you are correct that I think most people are not focused on all of these things that are going on. They don't know what to make of it. They are living their lives. But listen, it's one thing we're about to talk about the plane crash thing. It's one thing to seize control of a private company, Twitter and slash a bunch of jobs and turn it into a cesspool of Nazism and whatever in your own personal propaganda outlet and the consequences be like, oh, my damn, don't work today once again, or whatever. It's another thing when you're talking about, hey, we need people to regulate food safety so we don't have another outbreak of salmonella and people dying, hey, we need air traffic controllers to be present in adequate numbers, which is something we dramatically don't have right now. And they sent out the same email that went to everybody else in the federal government that's like, please leave, please resign. Even to people like air traffic control, some functions of federal government are important. Some of them we really rely on to have a functioning society. Some of them are even life or death. And we've now, we haven't handed over. Elon Musk has now seized control of all of those functions. So even if you're cool with, like, I don't really care about the AIDS funding to kids in Africa or, you know, to malaria, that is really not what this is about. Because the control that he has asserted, that he has seized is vastly broader than that and as I said before, is brazenly unconstitutional. So if that is on the table, then literally anything is effectively on the table at this point.

[George M. Johnson]

Okay. Again, I just think it's a lot matter of gradations. And here's my prediction. If they stick to USAID, cutting funding to NGOs, it'll be massively popular. I think that's the truth. If they don't touch Social Security, it's already been unpopular. And Medicare.

[Krystal Ball]

Nah, they already had to roll back the pepfar thing.

[George M. Johnson]

Okay, the pepfar thing.

[Krystal Ball]

They already had to issue another thing saying, okay, not life saving.

[George M. Johnson]

There were not people taking to the street saying, please restore pepfar. It's because there are a bunch of members of Congress who are very, very pro pepfar. So if anything, there you go. There's a check on the power. I don't think any of this is necessarily a good thing. I think that if they cut usaid or if they reform usaid, whatever the end result of this ends up happening, or start cutting fundings to homeless NGOs or, sorry, unhoused NGOs as they call themselves. Yeah, I think it's gonna be crazy popular. And I think there's a reason for that, is that people are deeply fed up and feel like the government helps all these other people. And they're like, wait, why does this money go over there? And I don't feel like I'm being helped. And so as long as they don't touch the most popular programs, which look, to be fair, you're right. Elon definitely wants to do that. But if Trump. Trump is able to keep him away from that, this is very likely to be a PR coup. Now, there's a lot of issues that could fall in is if they do. I just think fundamentally your view of the federal government is not one that people hold. They may find out now. They may find out. You're right. Under FAA or NOAA or FEMA or any of these other. You might. But something tells me that they're not actually dumb enough.

[Krystal Ball]

There was a huge reaction against when all the payments were frozen last week.

[George M. Johnson]

Well, that was.

[Krystal Ball]

And if you look at. So people in general, they feel that, oh, the debt's too high, the deficit's too high, like we should cut. The government should be more efficient. When you ask people about should the government spend more or less on various programs, the only things they actually say less on are like the military because they feel like, oh my God, we already spent so frickin much on the military. If you ask them about programming to alleviate poverty, they say we should spend more. If you ask them about Programs for education, they say more healthcare, they say we should spend more. So there was a big reaction when payments were frozen because first of all, I mean, the Medicaid thing was just like, obviously people were freaked out about that, but it wasn't just that. It was also Head Start, it was also Meals on Wheels, it was also domestic violence shelters, it was also addiction treatment. People do believe that the federal government should be investing in the American people and helping to support people in their time of need. They do believe in that. So when you ask the broad question, should we cut the, you know, cut spending? Of course, everyone's like, sure, yeah, like cut out the waste. But when you get down to any of these individual programs, there's a big reaction to it. And not just the big ticket ones, obviously, Social Security, Medicare, Medicaid, but truly any of these programs, when you go after them, people. And this is pretty bipartisan and really disagree. So as you said, listen, I think you're right that there isn't a big reaction against this yet because the rubber doesn't hit the road. People don't see it in terms. It wasn't like when the Medicaid portals froze or whatever. I'm just saying that I think the consequences of where we are and what it means for having operating like anything approaching in democracy, where your elected representatives matter at all. Like, I think we're in a really. I think we're in a very dark place.

[George M. Johnson]

I think it could definitely turn into that. Well, let's get to FAA because that's where that is where, look, I'm gonna grant it to you. And this, what have I said? Presidents very often overreach. If I were to predict anything that will be Trump's downfall, it will be tariffs. And I say this as somebody who actually supports tariffs because we live in an ultra consumerist society. Look at the TikTok thing. People wanna buy cheap shit. That's all they care about. Over and over we have proven that people, you know, they may support some tariffs on washing machines and others, but overwhelmingly TEMU is a massively popular business for one reason. People want to buy cheap crap.

[Krystal Ball]

And can I say, shein, all this other junk, it didn't come out of nowhere that just people want to buy cheap crap. This is what we. Low prices are what we've effectively been given in lieu of like, like, yeah, a job. Yeah, a job. High wages, broader social safety net, et cetera. So it's not that I don't also share that critique of society that like, okay, do we really need More like cheap crap filling up our homes that we throw in the landfill and whatever. But you can't really blame people because this is the deal that has been on offer. This has effectively been the social contract is, yeah, we're gonna ship your jobs over overseas. Yeah, we're going to destroy your wages. Yeah, you're going to have a worse social safety net than any other developed world country. But at least you can buy some cheap shit from Amazon. And if you want to tear up that social contract, you have to have those other pieces in place. And in addition, I mean, some of the. We don't have to go back to the tariff debate. I'm sure we're going to have the tariff debate again tomorrow. But in addition, like just to do it blanket across the board, it's like, well, why are we, are we tariffing avocados? That's just gonna raise the prices. Is there really a need to have a domestic like massive avocado growing operation? Is that, you know, that has nothing to do with re. Industrializing, growing California?

[George M. Johnson]

I don't agree with that.

[Krystal Ball]

But you know, that's sort of my broader point with the tariff conversation is you can't just raise prices without also doing these other pieces that will make that social contract make sense.

[George M. Johnson]

I don't disagree. My vision for America is very much exactly what you said. That's still why I support the tariffs though, is that when something happens, like, I'm gonna go for it because again, like, and you know, you may ask, you ask a question about avocados. How do you get somebody to buckle on auto parts and all these other price control increases? Well, you hit them where it hurts, which is 80% of their exports. But beyond that, my prediction, and this is unfortunate, is that America worships at the altar of consumerism. Every action that Americans take is one where they waste their time on TikTok, which is why it's massively popular. Whenever something is cheaper, they go to Temu. Whenever they want cheap clothes, they go to Shein. They don't give a shit if it comes from China. They don't even care necessarily if it costs somebody. Their job here undercuts US E Commerce. They could care less about de minimis or any of these other nerdy terms that I'm gonna throw around. And so my unfortunate prediction is that America is now so addicted to $200 televisions, to Walmart, to Black Friday, to Amazon replacement phone chargers, which are 1/50 of the price, even though they break in two days, that they will revolt Only over that. But that kind of fits with this Doge conversation where America now has this quasi secular libertarian ideology where the government sucks and the only thing that really matters for them is the ability to shop, to buy a new car every five years and load yourself up in debt. And then, you know, it's like, I just. When you see the individual choices, on balance, you're right. We can absolutely blame government policy. But we're here now. It's been 40 years. We live in this world. And this world is not one that rewards, unfortunately, industrial policy. It's not one that is not a country or a population anymore that can be told, hey, we're gonna do tariffs, but we're trying to build more auto manufacturers and other things here. They're like, no, I want a new car. I want it to be cheap. It's like, this is the individual choice that people have now told us over the last 40 years. I don't know if you can deprogram that. I would like to. I don't think it will happen.

[Krystal Ball]

Yeah, again, and we don't have to belabor this because I do want to get to the plane crash thing, but I don't think that you can just. The problem with the Trump policy is that it just raises prices. It doesn't. You know, if you, if you paired it with a national vision of, you know, a shift in the social contract of we're going to lift your wages, we're going to have universal health care, we're going to provide for you in these ways. But, yeah, you're going to pay more at the store for X and Y and Z. Like, you're not gonna have the same level of access to cheap crap from China. Like, we're shifting the values and the priorities in this country. That would be something that, you know, you. Again, you would have to go out and make the case to the American people. And we've had decades and decades of people being treated not as citizens, not as family members, not as community members, but just as consumers. And low prices being the end all, be all that was what was given to us in exchange for, hey, we're gonna decimate the industrial Midwest west, but your prices are going to be cheaper and overall GDP will go up by a percent. All of which flowed into the pockets of people like Elon Musk, by the way. But that's not really what we're talking about now with this particular tariff conversation, which is just on the side of raising prices. But to get back to the crash and the way the rubber can hit the road in terms of whether you know it or not. You know, the federal government, when, when we want it to be there, we really want it to be there, and we want it to be effective and we want it to deliver. And we want it, for example, to make sure that planes don't crash into each other and fall out of the sky.

[George M. Johnson]

That I think everybody could agree on.

[Sagar Enjeti]

You don't need another podcast. You've got too many already. But if you're looking for one that actually changes something, a way to take control of the chaos and find meaning, well, then maybe the one you feed is for you. I'm Eric Zimmer and I bring real conversations with real people to help you feed the best part of yourself. No hype, no fluff, just wisdom. That works. Listen to the one you feed on the iHeartRadio app, Apple Podcasts, or wherever you get your podcast.

[Jeff Stein]

Podcasts.

[George M. Johnson]

I'm ready to fight. Oh, this is Fighting Words. Okay, I'll put the hammer back. Hi, I'm George M. Johnson, a best selling author with the second most banned book in America. Now more than ever, we need to use our voices to fight back.

[Krystal Ball]

Part of the power of black queer creativity is the fact that we got.

[George M. Johnson]

Us, you know, we are the greatest culture makers in world history. Listen. Listen to fighting words starting February 4th on the iHeartRadio app, Apple podcast or wherever you get your podcast.

[Eric Zimmer]

Jon Stewart is back at the Daily show and he's bringing his signature wit and insight straight to your ears with the Daily Show Ears Edition podcast. Dive into John's unique take on the biggest topics in politics, entertainment, sports and more. Joined by the sharp voices of the show, shows, correspondence and contributors. And with extended interviews and exclusive weekly headline roundups, this podcast gives you content you won't find anywhere else. Ready to laugh and stay informed. Listen on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.