← Breaking Points with Krystal and Saagar
Breaking Points with Krystal and Saagar
4/7/25: World Panic As Trump Doubles Down, Billionaire Warns 'Economic Nuclear Fallout', Poll Shows Americans Reject Tariffs
01:02:27
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- [00:00]
Adam
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- [00:37]
Amica Insurance
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- [01:07]
Amazon Pharmacy
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- [01:37]
Sagar
Hey, guys, Sager and Krystal here.
- [01:39]
Krystal
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.
- [01:46]
Sagar
This is the only place where you can find honest perspectives from the left and the right that simply does not exist anywhere else.
- [01:52]
Krystal
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.
- [02:03]
Sagar
We need your help to build the future of independent news media and we hope to see you@breaking points.com. good morning, everybody. It is a gloomy day here in Washington. Gloomy fitting the mood of the global economy. Crystal. So what do we have today?
- [02:18]
Krystal
Yes, indeed. Trump is doubling down on his tariffs. No sign of some big negotiation or walk back in sight. And global markets already in free fall this morning. This is before the US Markets fail. So we decided to spend the whole show basically talking about tariffs because this is such monumental news with such massive cascading effects for everyone here and globally. So we're going to start with just the details of where we are, what we know. Jeff Stein is going to join. He's going to weigh in on his latest reporting of how this tariff scheme was developed. And also big fight developing between two Trump supporters. Bill Ackman, who has now come out against the tariffs, and Howard Lutnick, who, of course, is the Commerce Secretary. We also have the very latest polling about how Americans are feeling about all of this, with the caveat being all of this polling really occurred before the massive market movements, before these massive announcements. So getting early indications, though, about how nervous Americans are about this direction. Elon appears to be breaking with Trump over tariffs and specifically getting into a bit of a battle with Peter Navarro. Protests have also broken out nationwide. These are not just about tariffs, but about, you know, overwhelming sort of resistance among the Democratic base to Trump and Elon and everything that's going on. So we wanted to take a look at that as well as the first really big nationwide organized resistance to Trump 2.0. And we're going to have a nice discussion debate between Ro Khanna and Orencass. Should be interesting to get both of their perspectives. Roe is not some neoliberal like free trader. He has a nuanced view on terrorists. I'm interested to hear Orin explaining exactly how he feels about everything that is going on and how this plan is being implemented right now as well.
- [03:59]
Sagar
That's right, Oren. The more serious person that we could find that will actually defend some of at least what is going on here. So we wanted to make sure we did that. Yeah. As Crystal said, though, it's gonna be a tariff special here. Thank you very much to all of our premium subscribers out there. By the way, the best way that everybody could help with our show right now is really just like, subscribe and to share it, especially if you're listening on the podcast, just text it to a friend. Especially I know, tariffs, very sensitive subject. And a lot of people are trying wrap their heads around what's going on. So that's why we wanted to really dedicate this to everybody. And it is, I think, best listened to as a whole. All right, let's go ahead and start with the tariffs, as Krystal said. Let's go put this up there on the screen. Some major movement in the Asian and the European markets. Basically a massive implosion of all of the stock value across the globe since the announcement of the tariffs. For those who are watching, you can see various stock indices across the world that are down. The minimum is in China, down 5%. Although things changed actually just since we made this graphic. The Hong Kong stock exchange having its worst since 1997 in some 15% drop overnight. Germany down almost 10%. Canada down. The UK down. The United States down over 15%. And the Japanese Nikkei index I believe with one of the worst days in the history of that. They even, I think had to flip their circuit breaker to stop trading over in Japan. So you can just see what is occurring globally. No sign from Donald Trump yet that he is backing down. He spent the weekend in Florida golfing. We'll return to that in a little bit. On Air Force One, though, he did take a few questions. Here's what he had to say. Is there pain in the market at some point?
- [05:35]
Krystal
You're unwilling to tolerate this idea of a Trump put. Is there a threshold?
- [05:39]
Donald Trump
I think your question is so stupid. I think it's a. I don't want anything to go down, but sometimes you have to take medicine to fix something. And we have such a horrible. We have been treated so badly by other countries because we had stupid leadership that allowed this to happen. They could have spoken. They look at the fact that we have a billion dollar trade deficit. When you look at the trade deficit that we have with certain countries, way over a billion per country. With China, it's a trillion dollars and we have to solve our trade deficit with China. We have a trillion dollar trade deficit with China, hundreds of billions of dollars a year we lose with China. And unless we solve that problem, I'm not going to make a deal.
- [06:29]
Sagar
Those comments would make sense, Crystal, if there were just tariffs on China. Maybe some of us could get behind that, but that's not really what's going on here. We got a basically it's average of some 30% tariff across the world, including 50% or whatever on Vietnam. Multiple countries. Calling the White House over the weekend might be a bit difficult because the president is down golfing in Mar a Lago. He did win his golf championship though. Congratulations.
- [06:53]
Krystal
Well, some good news. That's great.
- [06:55]
Sagar
That's right. Let's put this up there on the screen. This is his latest from Truth Social. We have massive financial deficits with China, the European Union and many others. The only way this problem can be cured is with tariffs which are now bringing tens of billions into the usa. They are already in effect. And a beautiful thing to behold. The surplus with these countries has grown during the presidency of sleepy Joe Biden. We are going to reverse it and reverse it quickly. Someday people will realize that tariffs for the United States of America are a very beautiful thing. So there is still yet no major movement there by the White House in terms of where we are here in the United States. Things are a bit all over the place. As we said, the Japanese index and the Hong Kong index just absolutely got destroyed overnight. The United States markets, It's roughly like 2.5% as of us recording right now. We can put that on the screen just in terms of where everything is. The NASDAQ was down by about 2.8%. It honestly could extend much, much worse. It was even worse whenever the futures did open this morning. Nobody really quite knows if though that the S and P does fall today more than 4% for a third day in a row. It will be the since the Great Depression. And I think that's one of those where it's always difficult to contextualize history, you know, when it's actually happening. But the truth is, is that we are in one of the five great market crashes in modern American history from the Great Depression. Not just me saying that the data indicates this is the worst crash not only since March of 2020. And then finally, you know, to get to the inevitable retort, they're like, well, why does it matter? And it's like, well, even if you don't own any stocks and that's fine, I think 58% of Americans do. But for the rest of the country and the bottom of the income scale, the market and the liquidity in that market and the decision making being driven by those companies, that will affect 100% of us. You know, you could have owned zero stocks in 2009 and you still would have suffered the consequences because you would not have any access to the company who wants to hire you doesn't have any access to cash. They have no market, they have no liquidity, they have no ability to borrow. They're going bust. You know, these capital markets, for better or for worse, and I think for worse now do absolutely rule our entire lives. And we'll talk about that. I think more in terms of tariff strategy. And what I think the biggest flaw in the overall rollout in the strategy was is that fact is, is that we're basically asking private markets to, you know, act in a way that we believe is beneficial to the state, but with no real incentive, you know, both to the company for the employer to minimize any sort of short term, not even short term, long term economic pain. Now at this point, that's another. Everyone's like, oh well, he could cut a deal and he could, and things could surge. It's like, yeah, they could. But, you know, in the interim, there are a lot of companies even in this week that will pay literally millions of dollars in tariffs. You can't just take millions of dollars off of somebody's bottom line and expect nothing to happen. I mean, it just doesn't really work that way. Yeah, I mean, that's where I continue to fall is even if this is a short term strategy, there's a lot of pain in that short term strategy for millions of people. Not to mention the level of uncertainty in the markets, in the overall pocketbooks. The amount of consumer spending that's gonna shrink as genuinely cannot be overstated.
- [10:04]
Krystal
Yeah, I don't think anyone really knows how massive the fallout is going to be. There is no limit to how bad it could be. And yeah, Trump could walk back from it at any time. I mean, he walked back from the height of the Canada and Mexico tariffs. This man is, he's a madman. He's all over the place. But there's a big debate on Ika, on Twitter at this point of like, we may already be past the point of no return in a certain respect. Because let's say today he comes out and says, you know what, deals with 50 countries, good enough, we're rolling this back to a lower level and we'll revisit it a month from now. Which is kind of the playbook that he's been running. Do you think if you are someone making decisions for a major business, a major manufacturing concern, is this going to give you confidence to want to invest more in the United States of America? Of course not. Of course not. I mean, if you're running any company, including our own, by the way, thinking about how things are going to go, how people are feeling with a potential recession coming and how their premium budget is looking, at this point, you are going to freeze in place at best, and at worst, you're gonna start saying, you know what, these people, this project that we had going that we were hopeful for, for the future, this is just not the environment to do it in. So in some ways, even if at this point Trump were to come out and say, just kidding, guys, late April Fool's joke, Liberation Day is over. Who is going to want to invest in this climate? And I used to get really irritated with all the uncer talk because this was used against any sort of progressive economic policy that would benefit working class people or whatever. But at certain point, you really do, as a business owner, as an investor, as someone who is an executive in a company, you need some Sort of stable policy climate in which to make decisions. And you will not have that with this president, period. You will not have that with this president. And I think given the seesaw nature of American politics, I think there are a lot of countries and a lot of companies here and around the world that are saying, I don't know if we'll ever have that with the US Again, period. A couple things that I just wanted to emphasize from Trump's comments and why they sent the markets into such a free fall last week. Of course, there were significant market losses, but I think we both had the feel of it actually could have been worse.
- [12:31]
Sagar
Oh, but could have been much worse.
- [12:32]
Krystal
And the reason for that is because there was still a hope on Wall street of, like, Trump's gonna come on on Sunday before the futures market opens, and he's gonna announce a bunch of deals and he's gonna step away from this. And instead he makes this comment, sometimes you have to take the medicine, number one. And seems to not care at all about the nuclear bomb that he's dropped on the global economy, which just on, like, a personal level, thinking about this person's psychology, I cannot wr someone who would drop this level of bomb and then just go, I'm gonna go play golf. I'm gonna go host a fundraiser at Mar a Lago. Like insanity. But so he says that no indication of making these deals. And in fact, he told his surrogates, I don't want you to say these are a starting point for negotiations. No, these are in place, and that's that. And then the other thing he said that was so disconcerting is he's holding onto this idea that if you have a trade deficit with any country, no matter what the dynamics are. Like, we talked about Lesotho last week, right? This poor African nation that we buy diamonds for, and they're too poor to afford our products. And in his mind, that means that Lesotho is ripping us off. Okay? Idiotic, stupid. Like, the most kindergarten level of understanding of trade you could possibly imagine. But he reiterates that. And it matters not only for understanding how stupid the policy is, which most people I think already understand, but it also matters because what deal can Lesotho make with us that's gonna fix that problem? There isn't one. So countries that had, in anticipation of Trump, loving tariffs, had rolled back their tariffs rate, trying to get ahead of it, Say Israel is one example of that. Like, look, we don't even charge you any tariffs. They still got hit with tariffs. There is no deal that you can make with virtually any of these countries that's just gonna close the trade deficit overnight. That is not how this works. And so that was the other thing that made a lot of investors go, what the fuck? Because that indicates there are no grand bargains or deals. This is not just a negotiating tactic. He may really be serious about moving forward with this. And it is just as nonsensical as it appears on its face when you're looking at the Penguin Islands and this stupid formula that we're gonna talk more about that they may not even be applying correctly. It really doesn't matter to him what the carnage is, what the fallout is. You know, he has this idea in his head about terrorists, number one. And number two, he likes that. He likes that the whole world is jumping at his moves. He loves that all these countries are having to call and scramble, that all these companies are going to come on bended knee to try to get their car rent, to try to get their exemption. And he loves that he can do all of this, apparently without having to consult a single person. I mean, the power to raise revenue and institute tariffs is supposed to be with Congress. He's using AIPA in a very similar way to how he's using these sort of like national security or national emergency car bounce to claim extraordinary powers for himself. That's what he's doing here. With tariffs, there will be court challenges. I don't know how that will go. I don't think anyone knows really how that will go. But he also likes. What he loves about this, is that it all comes down to him. And he can be the dictator and he doesn't have to ask anyone for anything. And all the chaos around him doesn't bother him one bit.
- [15:59]
Adam
Does this podcast make you happy? Of course it does. That's why you're here. But it only comes out once a week for happiness, every night. You need Adam and Eve. Yes. I'm talking about sex toys. It's cool. It's cool. You have earbuds in, right? Adam and Eve, America's most trusted source for adult products, has been making people very happy for over 50 years with thousands of toys for both men and women. Just go to AdamandEve.com now and enter code IHEART for 50% off. Almost any one item, plus free discreet shipping. That's AdamandEve.com code IHEART for 50% OFF.
- [16:36]
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- [17:06]
Amazon Pharmacy
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- [17:20]
Jeff Stein
Hmm.
- [17:21]
Amazon Pharmacy
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- [17:38]
Sagar
Well, I mean, why would it bother him? As you said, it's very, you know, it's something that feeds his own conception of what's going on, but just simply cannot move away from is that there's genuine massive pain not even being done necessarily to billionaires or companies or any of. That's like real folks who have retirement accounts who are watching these just evaporate. I mean, look, let's also contextualize it correctly. One year of gains in the S&P 500 are erased. That means basically, if you had money over the last year and you were chunking it away into your 401k and you were doing everything that you're supposed to do, that money is gone or it's actually down. And if you look over at the five year period, it was a common talking point. Oh my gosh, The S&P5 is up over 100%. Well now it's down to 82. So now we're already back to 2024 style valuation. Let's wait another week. What are we going to go back to 2023? The backward clock that's ticking here for a lot of people. There's a what sizable percentage of the country which is over 65 and size percentage even more that are over 70. I was telling you this morning, there are a lot of people who are on retirement who have mandatory withdrawals from their IRA accounts. So what if you're literally forced to sell at the bottom? I mean, that's a horrible thing to be inflicting on people. Finally, as you and I just want to really stick on this point with the capital markets, the way that this is being basically rolled is we're implementing this massive tariff. And so if you want to build here, you have to move here. We will not compensate you at all in the interim.
- [19:10]
Krystal
That's right.
- [19:10]
Sagar
We are not giving you a tax break. In fact, Steve Mnuchin, the former Secretary of the treasury, was on CNBC on Friday and I actually thought he gave A great answer. He was like, look, of course we can have tariffs. I mean, you know I'm pro tariff. I know you are in some cases as well. Yeah. You know what, that needs to be paired with a dollar for dollar manufacturing credit and or infusion from capital of Congress. Which would mean what? But for Apple, let's say we want Apple to build an iPhone here in America or build more of it. Okay, let's say 50% of it, something like that here in the United States. Well that's gonna cost X, Y and Z. We will then acknowledge that we can have Apple pony up some of that cash. Congress and then others, the administration will say we will also kick a tax credit or a break to make sure that you don't fire people in the interim and you don't wreak havoc on our overall equities markets, which is what we're currently having. There's none of that. Actually the Congress wants to remove manufacturing tax credits right now so that they can pay for a permanent extension or whatever. Some of these corporate taxes. That's what I want people to understand.
- [20:11]
Krystal
That's right.
- [20:12]
Sagar
So the problem is is that not only do we have a massive tariff regime in place, we are actually currently have a GOP led Congress which wants to reduce the amount of social spending that there is while extending corporate tax cuts and not increasing manufacturing tax credits which would actually benefit all of the stated goal of bringing things over. And that's why I'm just like, this is so. It's not even stupid. Stupid is something that doesn't necessarily bear consequences. This has massive consequences. And you know, that's another thing too where you know, the administration is really banking on like oh well, he said he was gonna do. It's like, well okay, hold on a second. Nobody, nobody. And this is why the markets crashed as they were ever floated a 35 or 40% tariff. Nobody floated. When you say reciprocal tariffs, that's a word. It has a meaning, it has a definitional term. Right. And at best crystal with the actual calculation, from what I can tell of what a reciprocal tariff would mean even with currency market manipulation and all that is maybe 5 to 10% whenever it comes to China. On Japan it would be 5 and actually it might even be 0 if you factor in a few other things. Do you know why he decided not to do that? Because the number was not big enough. So that's where this is 10 times out of step even with allegedly many of the things that he sold on the campaign trail. And that is why you are seeing the level of freakout. And look, very soon, real voters, you're all gonna. You are gonna feel this in a very real way. Screw retirement. I mean, we're talking layoff. We've already seen it. We've already seen Stellantis layoffs, 900 people in Michigan. We've already seen people freeze investment. Just wait, start asking around for people who are like, yep, we had a project and it got pulled. You're gonna see consultants go down. If the pharma tariffs eventually do go into place, oh, my God, just good luck to the entire US Consulting industry, Accenture, and also people. Do I love those industries? No, but there's a lot of people who work there, and they propel a lot of people there as well. If we want to change things, we need tax credits, we need capital infusion. Currently, it's a 4 to $500 billion raise on people. If you take that amount of money out of the economy, you got to put it back in at the same time. But they don't want to do any of that.
- [22:19]
Krystal
Yeah, that's right.
- [22:19]
Sagar
So we're looking at some, you know, an.08 level liquidity crunch. And also this final word here. Our economy is leveraged to the hilt. We Learned nothing from 2008, when you start to drop 15 to 20. We're talking margin calls at the top of Wall Street. We're talking these major Fortune 500. They are levered up to the hilt, maybe not 100 times like they were during 2008, but we've really learned very little about debt crises and all this because there's been 15 years of cheap money. That is all gonna end. And when you pull all that back out of the economy, I can't even begin to describe, like, what the layoffs and the unemployment situation and all that is gonna look like.
- [23:02]
Krystal
Isn't it Warren Buffett who says, when the stock market goes down, you find out who's swimming without.
- [23:06]
Sagar
Yeah, that's right. It's true. I mean, it's empirically true.
- [23:08]
Krystal
Everybody is. I was reading an article about how everybody's making calls around to try to figure out what the equivalent of, like, the Lehman Brothers this time is. Some entity that's really at the center, that's over leveraged at this or that. Or, you know, it could also be some gigantic manufacturing concern that had, you know, move forward with all these investments potentially related to the. The Inflation Reduction act and the CHIPS act, which, by the way, like, they weren't enough. Those things were working to increase significantly. You can look at the chart, we're going to show the chart when we talk to Rohan Oren. Manufacturing infrastructure investment in this country. And not only are they not doing the analogous thing for whatever industries that they want to build up, but CHIPS act is being de facto rolled back because Doge went in and cut half the staff that was implementing this. And again, it had been very, very successful. The ira, because it focuses on things like EV batteries and green energy. Trump doesn't like that. So that's being hacked at as well. So the things that were actually working to increase manufacturing investment in this country are being killed. There are no corresponding tax credits. And by the way, with this level of across the board tariff, even that, like what, you're going to subsidize everything in the entire. You're going to subsidize banana production and coffee bean production and diamond mine production. Like it still would be insanity given the way that they're moving forward. But there's none of that either. In fact, there's an austerity push on the other side. And then even if you think about the advanced manufacturing that we have here, so many of their either raw materials or the parts that they're sourcing come from overseas. So they're being hit with those tariffs when they're trying to import things to assemble a complicated final product. And so, no, I mean, I think this is much more likely to negatively impact, to damage significantly the manufacturing investment, production that we do have than it is to spur any sort of a renaissance. Last thing, and I'll say, I mean, I'm sure I'll have many other comments that I can make today and I will make in the future, etc. But you really do have to look at this as class warfare. And I know that this is being framed as like, oh, this is going to be great for the working class nonsense. Trump has said he wants to get rid of the income tax. And certainly, even if he doesn't achieve that maximalist goal, he's going to extend the Tax Cut and Jobs act, which is a gigantic tax cut for the richest people in the country. And he wants to move towards funding the government through tariffs. Tariffs are a regressive tax. They hit the working class way harder than they hit rich people, because the working class, of course, spends much more as a larger percent of their income on goods. So when prices are going up for groceries and toilet paper and clothes and medicine and everything else that you could think of in the fresh fruits and vegetables, so much of what is consumed here comes from overseas that is incredibly, incredibly Regressive and it is going to hurt working class people, it's going to devastate them. Now, obviously the rich people are getting hurt right now in the market as well. But the impetus here and why he always talks about McKinley, because what was the state of taxation under McKinley? It was all effectively tariffs. There was no income tax in place. And that is the direction that he wants to move things in. So, you know, I think it's really important to talk about the specifics of what the formula is and how it's being implemented and how it doesn't make sense. But I also think we have to keep in mind the bigger picture of what he is actually trying to accomplish. And I think among those things are, again, consolidating power and a power grab. And I also think it is shifting the burden of taxation onto working class people, shifting the burden of funding the government onto working class people. And if he sticks with this plan, it is going to be devastating for so many. And the market matters. I don't want to say that it's like, oh, who cares that the market is crashing. I mean, there is real pain there, as Sager is indicating. But the market is also just the first indicator of how catastrophic this is going to be. Look at how regular people fared in coming out of the housing crisis. Look at how regular people would have fared in the COVID crash had there not been a massive government infusion to support people. Look at how regular people fail fare in any recession, any massive market crash. And there is no indication that there is some major government program coming to help support people through these times. In Trump's words, we just gotta take the medicine.
- [28:02]
Adam
Does this podcast make you happy? Of course it does. That's why you're here. But it only comes out once a week for happiness, every night. You need Adam and Eve. Yes. I'm talking about sex toys. It's cool. It's cool. You have earbuds in right? Adam and Eve, America's most trusted source for adult products, has been making people very happy for over 50 years, with thousands of toys for both men and women. Just go to AdamandEve.com now and enter code IHEART for 50% off almost any one item, plus free discreet shipping. That's AdamandEve.com code IHEART for 50% OFF.
- [28:39]
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- [28:57]
Sagar
It out.
- [29:01]
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- [29:09]
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- [29:14]
Jeff Stein
Do they ever actually clean the ball pit at these kids play gyms? Or is my kid just swimming in a vat of bacteria catching whatever cootie of the day is breeding in there? A cootie that'll probably take down our whole family.
- [29:29]
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- [29:41]
Krystal
I think that's a good place to transition to Jeff and talk with him about his reporting. He's been so good on this issue. Even going back to the campaign, he was one who was saying, listen, guys, he talks about tariffs a lot and you're right that he never laid out this particular scheme, but he did lay out pretty maximalist tariff ideas. I don't think Wall street ever took him seriously. They thought they were getting their tax cuts and that this was just like a negotiating tactic. And it would be something like the level of tariff imposition from his first. And maybe it amped up a little bit, but I don't think they ever took that particularly seriously. And Jeff has also done a fantastic job digging into the behind the scenes and surprising no one. It really was Trump who said, this is the way that I wanna do it. Some of his advisors had been working on some more sophisticated level of tariff plan and he said, no, no, no. And the decision making went up to the hours before he made the announcement there at the White House. So with that being said, let's go ahead and get to economic. Chief economics reporter. Is that his name now? I want to give him his fancy name. He's got a fancy title at the Washington Post now.
- [30:47]
Sagar
Chief economics reporter.
- [30:48]
Krystal
Chief economics reporter Jeff Stein from the Washington Post.
- [30:50]
Sagar
Joining us now is the chief economics reporter for the Washington Post, Jeff Stein, great friend of the show. Good to see you, Jeff. You've been number one to be reading this week as we enter and post.
- [31:00]
Krystal
Liberation this and every week.
- [31:01]
Sagar
Yeah, that's right.
- [31:02]
Jeff Stein
All the reporting skills I learned were here on Breaking Point.
- [31:06]
Sagar
That is absolutely not true. All right, let's go and let's get Jeff's reaction. He's gonna break down not only Donald Trump's behind all of this, he will reveal the truth behind the fake formula. Many of us paid notice to the fact that many of the tariffs were being put into place on some unpopulated islands. The USDA secretary was actually asked about this or sorry, The Secretary of Agriculture was asked about this over the weekend. Let's take a listen. We'll get your reaction.
- [31:33]
Harry Anton
Why are you putting import tariffs on.
- [31:36]
Jeff Stein
Islands that are entirely populated by penguins?
- [31:42]
Krystal
Well, I mean, that. Come on, Jake. Obviously, here's the bottom line. We live under a tariff regime from other countries.
- [31:51]
Adam
We have too long.
- [31:53]
Jeff Stein
The McDonald Islands is not imposing the.
- [31:55]
Krystal
Idea that America goes first. I mean, come on, whatever. Listen, the people that are leading this are serious, intentional, patriotic. The smartest people I've ever worked with. I did not come up with the formulas.
- [32:09]
Sagar
So, Jeff, who came up with this formula? Where did this thing come from? You've got the story. We'll put it up there. But you can talk while we show off your work.
- [32:18]
Jeff Stein
The weird thing about that answer, with all due respect to the Agriculture Secretary, is if I was a Trump cabinet official, I feel like I could have given a somewhat cogent response. The reason that these tiny little islands were hit by the tariffs is in part because there's some concerns that they could be vehicles for trans shipment. Right. Like if you're a foreign country and you're trying to just send something to a country that, you know, the tiny little island, then you reincorporate, say that that good is now from that island, and then send it on. That's what I would have said if I was the Agriculture Secretary. Even though the idea that a substantial proportion of, of trade could be rerouted through an island with like 12 penguins and no people on it is probably overblown. Like, that's what she could have said in response, even. I mean, according to the trade experts I've spoken to, even more kind of shocking about this formula that they use to determine country specific tariffs, which are different than the universal ones that they apply to all countries, which we can talk about sort of the criticisms of and the very strong criticisms of the country specific tariffs hit countries based on essentially their trading deficit with the US and so you have countries like Lesotho, which is a big diamond exporter to the US which is an incredibly poor country. Of course we buy more from Lesotho than they do from us. That has nothing to do with the things that, that the White House and Trump are talking about as being the impetus of this global trade war. Right? Because they're saying, look, which there is some truth to this part, that the US has, you know, is a global purchaser of stuff across the world, that we have a global trade imbalance, which is all true, that it is particularly bad with some countries like China and that they want to do something about it. But Lesotho is not, not net sender of exports to the US because they have nefarious currency arrangement or high tariff barriers on our exports because it's an incredibly poor country. Like, it would make no sense for Lesotho to be buying more stuff from us than we do from them. So that's like the, I think the overarching frame and the question to your question, Sagar, like, why do they do this? We had reporting last week, week about how the Trump administration's sort of top economic minds had for weeks been working on a formula that was narrowly about sort of the thing, the problem that they're ostensibly trying to solve, which you can debate whether it's worth solving. But this issue of us buying more than we sell to the rest of the world. And they had a plan that took into account, they had several plans that took into account all kinds of currency manipulation factors and tariffs and they were coming up with sophisticated measures to deal with that. I cannot prove who wrote the more crude formula that was widely mocked that Trump, as we reported, personally selected. But I do know that it bears striking resemblance to a number of public, state, public formulas previously endorsed by Peter Navarro, who is sort of the most ultra maximalist trade hawk in Trump's orbit. And so I'll just leave that observation there.
- [35:50]
Krystal
Yeah, I want to get from you the reaction from Bill Ackman who is now very unhappy with these tariffs and of course he's been a big Trump supporter. He's also accusing Howard Lutnick of profiting off of the crash of the stock market. If we could put before up on the screen, guys, this is what, but part of what he's famous for, these fricking way too long posts on Twitter. But in any case, this is a portion of what he had to say. He said business is a confidence game. The President's losing the confidence of business leaders around the globe. The consequences for our country and millions of our citizens who have supported the president, in particular low income consumers who are already under a huge amount of economic stress are going to be severely negative. This is not what we voted for. The President has an opportunity on Monday to call a timeout, have the time to execute on fixing an unfair tariff system. Alternatively, we are heading for a self induced economic nuclear winter and we should start hunkering down. May cooler heads prevail. Before I get into the attack then on Howard Lutnick, Commerce Secretary, I just would love to get your reaction to Ackman and his position here and saying, hey, you gotta call A timeout here or else we're headed for this economic nuclear winter. Because you've been pointing out for a long time. Listen guys, he's serious about these tariffs. Now did he float this particular formula on the campaign trail? No, but he was floating some pretty maximalist positions and it certainly seems like people like Bill Ackman and a lot of the other Wall street types who were excited about a Trump administration, they thought they were getting their tax cut. They did not think that they were getting self induced global economic meltdown.
- [37:28]
Jeff Stein
Yeah, I mean, just from a writerly perspective, I think the technical term here is burying the lead. If you're saying we might be headed for economic nuclear winter. Normally you don't put it at the bottom of 600 words of. And after seven paragraphs of expository throat.
- [37:45]
Krystal
Clearing was very New York Times of him.
- [37:49]
Jeff Stein
Yeah, no comment. As a Washington Post reporter, I think exactly as you're saying, it's been really remarkable to see. I don't think anything Trump has done is really that surprising based on his campaign rhetoric, based on the reporting. I mean, I wrote a story in August 2023. You can go look it up. I promise it's real. It says in detail that, that President Trump is seriously considering or plans to, if reelected, launch a global trade war that includes tariff barriers as high as 60% on China, which is pretty close to what they ended up with. That is, would include, include a universal tariff of up to 10 or 20%, which is almost double what they, what he in fact actually proposed in terms of universal tariffs. That includes these sectoral tariffs on entire industries that we haven't even seen yet. Right. So like for all the, all the sort of financial carnage we've seen in markets like, some of the biggest measures that they're considering are not even yet announced. So that's, that's tariffs on all kinds of the same good that come in wherever they're from. And autos we've seen, but pharma, lumber, copper, etc. You know, as I've been putting out on Twitter, it's just, it's hard for me to understand how some of the richest people in the world couldn't afford $150 subscription to the Washington Post. And it makes me wonder why I didn't just start an investment service for these guys and charge like 10 times my current salary. Because there were people who, you know, I have sources who are lobbyists who are paid four, five, six times what I am paid to give Wall street advice on how to invest and how to navigate Washington. And a lot of times our reporting was much closer to what actually happened. So I could ramble on about this for days.
- [39:49]
Sagar
Yeah, I mean, I think it's a good point to be fair though, also, despite you writing it, there were also a lot of people who worked for him telling a lot of those people, just don't worry about it, it's not going to happen. So, you know, it's not like he wasn't also feeding them a lot of what they wanted to hear during the campaign.
- [40:05]
Jeff Stein
I guess that might be true, but like, I definitely take it as a possibility that I'm just like not talking to the right people. But I don't know, I'm not like the best source reporter in America. But, you know, there are people who are like in the Trump circle who talk to me and they have, they have been like, very clear like for a year and a half or two years to me now that like, like you talk to Trump one on one about this stuff, like there is no. Or very little sort of like, yeah, this is a bluff. Yeah. Like this is designed to get people to move. It's like I talked to a senator a couple months ago and he said that he was like begging Trump to like not do the tariffs. And Trump was like, basically just said we need to get back to where McKinley was over and over to this senator. And the senator's like, what are you, what are you talking about? So, I mean, I think there is an element that there are people close to Trump who are saying to Wall street, this isn't serious. But I also think people were just kind of seeing what and hearing things that weren't really even being said, if that makes sense.
- [41:11]
Sagar
That's fair.
- [41:12]
Krystal
Yeah, they were hearing what they want to do. Let's go ahead and get the attack on Lutnan now. He has since walked this back and apologized for it. But I think this is B4B that we can put up on the screen here. So Ackman says, I just figured out why Howard Lutnick, of course, is the commerce secretary and adamant Trump tariff defender on cable news is indifferent to the stock market and the economy crashing. He and Cantor, that's his firm are long on bonds. He profits when our economy implodes. It's a bad idea to pick a secretary of commerce whose firm is levered long fixed income. It's an irreconcilable conflict of interests. Of of course, this administration is rife with conflicts of interest. If you aren't cashing in in this administration I don't know what you're doing, but what did you make of this from Ackman? As I said, he did walk this back and apologize. And I think Lutnick, he must be doing his best in a very difficult position. Whatever. But do you think there's is this fair critique of Lutnick at all? And also bigger picture, what do you make of these two previously very solid Trump supporters? Letnick, I don't think, has weighed in, but Ackman attacking him directly?
- [42:21]
Jeff Stein
Yeah, I don't know much about the internal positions of Cantor Fitzgerald. I do think it doesn't make a ton of sense that this strategy on crashing the market would lead to an uptick in bond sales. I mean, that would mostly affect the issuance, which is a US Government function. So it's hard for me to see that really. I mean, I guess you could see the price of existing outstanding bonds go up, but I don't know. At a very minimum, I just would like to see a lot more or any evidence at all of this before even suggesting there's anything there. I think on the political dynamic, I think it is really interesting that, that we're seeing an increasing number of people in the Trump orbit attack. Not the president, but sort of people around him. Elon Musk over the weekend went after Peter Navarro, who, as I mentioned, this sort of court, this whole strategy, Bill Ackman, they're going after not the president himself, but the commerce Secretary. And there seems to be an element of like. Like, this can't have been the president's fault personally. So we need to find a stand in. You know, it's like the king always could never be wrong. It's his advisors.
- [43:41]
Krystal
That's right.
- [43:42]
Jeff Stein
So I think there is an element of that going on where people are trying to find maybe a fall guy that Trump can then be like, oh, this whole collapse was like, this guy's fault. It's all Trump guys. This is like all being done by the president. Like, you see those clips of him in 1980 being like. Like Japan is ripping us off. It's him. But if that's what they need to do to feel like they can sort of make clear to Trump that this has to change without hitting him directly. I think we're gonna see more of that.
- [44:11]
Krystal
Gives him a way to save face potentially, of like, oh, this guy gave me some terrible advice. Sorry, Howard Lutnick, you're out.
- [44:17]
Sagar
Right. Last question for you then, Jeff. Where do you think things are gonna go for the next week? So the administration's cope is 50 different countries have called us and we're negotiating. What does that mean?
- [44:27]
Jeff Stein
I mean, we reported last week that the Trump White House sent out internal talking points to their people saying, do not characterize this as a negotiation. And Mutnick has, and that's. They've all been saying, like, this is not going to be resolved in days or weeks. Is there a chance that in the back of his head, Donald Trump is still thinking, like, tell everyone in my inner circle that this is not a negotiation so that we have higher leverage with the rest of the world as the economy implodes. Like, it's possible, but I don't really think so. And so far, I've continually taken the, like, the under on the like. Trump is bluffing by a lot, and I think people would be wise to continue to do so.
- [45:14]
Krystal
Yeah, I do have one more for you, Jeff, just on the political temperature from Republicans. There is starting to be an effort for Congress to reclaim what should be its power over levying tariffs. Many Republicans have, first of all, I mean, they're terrified to go against Trump to start with. He has really consolidated control over that party. And second of all, they were comforting themselves with the idea of, like, some of them are even saying, like, he's going to use this as a negotiating tool to take tariffs down to zero. So this is actually free trade. Like, this is totally in line with my Chamber of Commerce orientation here. Increasingly, that position is untenable. So do you think that there could be some significant breakage within his own party, among Senate Republicans in particular, from Trump and this tariff insanity?
- [46:06]
Jeff Stein
Yeah, I think it's common. Especially if we get to Tuesday, Wednesday, Thursday, and we're in a bear market and the recession is hitting there, your need to be loyal to Trump will start to crack. And I think you're seeing some signs of that already with this still somewhat tepid congressional review of tariff policy bill. Moving forward, you're seeing more Republicans than would have been conceivable a few weeks ago sign up for that. But that's not really going to be enough to rein Trump in at all. Just based on the Texas legislation, will more aggressive legislation be proposed if this gets worse? I definitely think so. I mean, it's incredible to think about. You know, Congressional Republicans were furious about President Biden's unilateral $400 billion student loan bailout. And Trump, by the White House's own accounting, is moving forward with a unilateral $6 trillion tax hike, you know, more than 10 times the size of the Student loan, bailout. The legal questions there are certainly different. But, you know, I think a lot of Republicans in their bones are not okay with this. And you're going to hear from them pretty soon.
- [47:14]
Sagar
I agree. All right, man. Thank you for joining us. We appreciate it.
- [47:17]
Krystal
Thanks, Jeff. I know you're super busy. We really appreciate it. Thanks, you, too.
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- [49:01]
Krystal
So you're just talking to Jeff Stein there about how Republicans may react to all of this. And they will likely be watching very closely the public reaction to what is going on in the markets and with Trump's tariff policy. Harry Anton took a look last week at the polling that we do have at this point about how Americans feel about this direction. Let's go ahead and take a listen to that.
- [49:20]
Sagar
The press secretary criticized the people she calls the naysayers. When it comes to these tariffs, who are the naysayers?
- [49:27]
Harry Anton
The naysayers are the majority of the American public. It's the American people who are the naysayers. Oppose new tariffs on other countries, all goods. Look at this. 56% of Americans oppose new tariffs on all goods. How about cars in particular. 56% of Americans, Americans oppose new tariffs on imported cars and parked car parts. Look, the bottom line is the American people. Oppose, oppose, oppose. No, no, no. They do not want new tariffs. I looked at a ton of polling. It's really hard to find any in which you find folks supporting new tariffs. Maybe against China, but against all other countries, especially our allies. No, no, no. Oppose, oppose, oppose.
- [50:09]
Sagar
So Caroline Levitt again told Kate in that discussion that the President is laser focused on reducing prices. What do voters say that they believe the tariffs will do to prices?
- [50:21]
Harry Anton
What do voters believe the tariffs will do to prices? At least in the short term, tariffs will raise prices. Again, what do we get here? 72% of Americans overall say that the prices will go up in the short term. How about among Republicans, the Republican base? This was a shocker to me. 64% of Republicans, Americans believe that tariffs will in fact cause prices to go up in the near term. And get this, just 5%, 5%, 5% of Americans overall believe that tariffs, at least in the short term, will bring down prices. You don't have to be a mathematical genius to know, Mr. Berman, that 72 beats 5.
- [50:56]
Krystal
So a lot of, lot of warnings there for this direction from the President and for his party. And we can put this up on the screen from YouGov. This was a poll taken on April, April 3rd, and they say that among US adults, only 13% on March 9th through 11th and then 19% on April 3rd say that raising tariffs will help the average American. And there's a big partisan divide here where there's a significant number of Republicans who say it will help. But even there it's not a majority. It is plurality at 39%. Among Democrats, it's only 6% think they will help. Among independents, it's only only 14%. So there is next to zero confidence among the American public that this is actually going to be taking the medicine. And on the other side, some grand utopia weight saga.
- [51:49]
Sagar
Yeah, that's right. If you look at it overall, and we still have not yet seen the impact, that's actually probably the most important point to underscore. This is where you start at the market is the leading indicator. The price at Walmart hasn't gone up yet. Right. You have actually even seen the layoffs. We just know though that it's likely coming unless there's some major impact. But in the interim, this is the baseline from which you're beginning with. So that's really not where you wanna be. Let's go and put the next one up there on the screen, though. And this is the word of caution for everybody who's out there who is hoping and praying for some big shift in the Republican base. I'm not so sure. It says, quote, republican skepticism of free trade surfaced when voters were asked whether tariffs help or hurt the economy. Economy. 77% said tariffs help create jobs and are beneficial. 93% of Democrats said they raise prices in our negative force. The survey was taken before the stock market down on Thursday and Friday, but it is still an indicator of where things were beforehand. Trump successfully completely flipped that in terms of the Republican and the Democratic bases, how they thought broadly about tariffs, probably the best idea of negative polarization.
- [52:57]
Krystal
But.
- [52:57]
Sagar
But it does just show us that even with everything that there is right now, you and I all need to remember the level of trust that a lot of these Republican voters have in Donald Trump. They don't trust the media. They don't trust the New York Times or the Wall Street Journal or cnbc. If anything, they like seeing Jim Cramer and these other people panicking. Right? There's a lot of negative polarization. In fact, the best argument I've heard that's pro tariff is everybody who was wrong about this, this, this and this are the people who are upset about tariffs. I sympathize with that. You know, whenever you see yourself as I do, somehow in agreement with people posting Milton Friedman memes, it makes me cringe. I'm like, maybe I'm entirely wrong about this entire thing. I don't think so. But obviously anybody who thinks they're right broadly does. But that is the broader thinking. You have an entire part of the American electorate which is negatively polarized against every institution trying to tell them that this is wrong. It's only going to harden their beliefs, almost certainly at an emotional level. And really, I don't think that there will be any grand flip for them unless there is some serious economic fallout. And you know, as we just said, it's just not there yet. Yes, the stock market and all of that is there, but that's just a prelude. If you think about 09, what was the absolute bottom? And the worst part of it, it's not when the market dropped by 50%. It's when people were fire sailing their houses and, you know, people were showing up to Occupy Wall street some 2010. It takes some 18 months for this stuff to really bleed into the overall economy. Somebody goes to the bank, you know, somebody goes to the bank, their people are not lending. There's a liquidity crunch, there's you know, rate crises and all this stuff. Get fired from my job six months later because cash reserves have fallen down, that's when the stuff really starts to roll. So we're still not there yet and I think people should buckle up.
- [54:44]
Krystal
Yeah, Republicans are very much in trust the plan mode. Yeah, no doubt about it. Like you said, they don't believe anybody but Trump. And so if Trump is like this is going to be great, they're like, all right, well we'll see. Maybe it's going to be great, I don't know. And the question is, and if we could put the last element actually up on the screen here guys, C5. The question is once it gets from quote unquote just a market drop and you start to see even more companies laying off workers and prices are going up and you likely are in a situation of stagflation and the economic disaster in ordinary people's lives. If we get to a place, God forbid, where that becomes undeniable, does that change anything? And the lowest approval ratings. This is a Nate Cohn write up. He says Republicans tariffs pose a risk like no other. Trump's political strength is built on the economy. If it sinks, he could drag his party down with him. He has a whole look at the way that recession have normally worked out for presidents. And this one, if we do end up in recession will be completely self inflicted and there will be no ability like Obama in 2010, 2012 was like, hey, I'm still trying to pull us out of this mess that these last guys left. You know, Biden, same thing with Trump coming out of the COVID crash. Like I'm just trying to get things back together after these people screwed things up. Trump is not going to have that left like he owns this. Yes, 100%. There is no ability to be like, but Joe Biden, no, you are the one who did this and architected this so it lands in your lap. So if there is a recession, it will undeniably be because of the singular person of Donald J. Trump. And Nate writes in this piece he says the tariffs announced Wednesday introduce a political problem of an entirely different magnitude for Trump and his party. No party or politician of recession proof historically, even truly dominant political parties have suffered enormous political defeats during major economic downturns. In none of those cases, not even with the infamous Smoot Hawley tariff, could the president be held responsible for the downturn as self evidently as today. And whatever it may have felt like after the election, the Republican party is not even close to politically dominant. Keep in mind like, and this is part of why Trump is, I think in such complete giving no fucks about anything mode is like he doesn't care about the Republican Party. He doesn't really care if it's a complete bloodbath in midterms. He's doing whatever he wants anyway. And so you also have to keep in mind, as popular as he is with the base, he's not gonna be on the ballot in the midterm elections. And we have seen consistently that his popularity with the Republican base does not translate over to the broader Republican Party. So yeah, they have to be looking at the results in Wisconsin, have to be looking at the leader of their, the undisputed leader of their party intentionally, it appears, crashing the entire economy and go, oh shit. Like if we are in, if I'm in a district that's less than Trump +15, I'm starting to get real nervous looking at what is going on here.
- [57:52]
Sagar
Yeah, I hate to say it, but you know who I see making big bets that I think are gonna pay off? Ted Cruz. And I hate to say it, but I see him out there, he's counter signaling on tariffs, he's talking about tax hikes, he's trying to loop it into some of his old school conservatism. And Ted Cruz is a guy is hard line on immigration, but anti tariff. One of those people who could credibly say, I ran against Donald Trump in 2016 and I'm not just the one calling this. Other people are soon they're like, I think he's gonna challenge J.D. vance for, for the nomination. And if you think about what the future of that might look like, Trump has already said he doesn't wanna endorse anybody. Actually he wants to run for a third term, but let's assume that he's just gonna sit this one out and let people dangle in the wind. Well, you would rather be on the record against that. And again, I hate to say it because I think Ted Cruz is totally wrong. Ted Cruz is an actual unironic free trader who doesn't believe in tariffs at all, who believes in this Tea Party libertarian. But let's be honest, I mean, the bad way that this is all being handled and rolled out, it's going to poison the well of tariff discussion for a generation.
- [58:58]
Krystal
It sucks. Really sucks.
- [58:59]
Sagar
It's horrible. I was thinking about it in terms of 2008 for people like us who really became politically aware at that time. Anytime I hear about leverage or credit defaults, I'm just like, no, it's Baked in. For all of us who lived through all of that. Well, think about if you're me 12 years younger, what are you living through? Man, if you're a college senior right now, holy shit. Can you imagine having to graduate into this economy? I mean, it'd be one of those where, especially with the overall lead times for where we are, what, we're only a month or so away from college graduation. I think.
- [59:37]
Jeff Stein
What are they gonna do?
- [59:38]
Sagar
Yeah, I mean, what are you going to do? And there are a lot of signs just like, oh, not law school applications are double what they were just from last year. That's a terrible sign. It means people are willing to leverage up to 200k in the hopes that things are better 3 years from now. By the way, news flash, it's not gonna be. But as those people found out at that time, I know a lot of those folks, it didn't end up working out so well for them. But all of the signs are there. So you're graduating in a month. Okay. You know, we're looking at Occupy again. That's what happened last time, 18 months or so. And so the polling and the way that the base and all of that will be negatively impacted could genuinely poison the well on tariffs, not just for them, but for the entire country writ large. And it's again, I hate this because politically we are such a yo yo nation. We're just gonna flip back to some sort of Obama esque, you know, argument, which is gonna make a lot of sense to a lot of people who were willing to listen.
- [60:33]
Krystal
I mean, and it's unfortunate because there actually was a new bipartisan consensus, I know, around some level of intelligent trade protectionism, you know, Trump. And Trump could have claimed credit for that. Absolutely. He started that direction with the tariffs he put on China, which I supported. You supported. They didn't actually accomplish that much because they weren't paired with industrial policy, but they did open the door. And then Biden is able with the Inflation Reduction act and the CHIPS act, which again, no one is saying that this is like remade the economy and it was the end all be. But these were significant investments that were paying off. They genuinely were working for critical investments for industries that are going to be important in the future and important for national security. And Trump is blowing that up. And now that consensus about tariffs. There's this Western Pennsylvania Democratic representative, he's like represents an area around Pittsburgh, Representative D'Aluzio, and we're trying to get him on the show. Actually, I think we have him booked for this week. I want to speak with him. But you know, he comes from this like blue collar part of Pennsylvania and very like union heavy, et cetera. And he put out this video that was like, listen, guys, tariffs in certain circumstances, yes. But what Trump is doing is crazy. Like, he's very clear. I oppose this thing that is being done. Democrats were, rip it, liberals ripping him to shreds.
- [61:51]
Sagar
I know.
- [61:51]
Krystal
For daring to say that in some instances tariffs are good. And that's where the Democratic Party is gonna be, unfortunately. And that is where so much of the country is gonna be. Because it's difficult to have this nuance like think tariffs are a tool. Right. They can be used in a good way and they can be used in a very bad way. But it's hard to have that nuanced conversation when they're being used to just intentionally crash the markets and blow up the whole economy.
- [62:16]
Sagar
Totally. I totally agree. I can see it coming from a mile away. Is that this negative polarization and increasing the way already the way that it is, the Democrats are done with tariffs probably for an entire generation. Keep going. The independents will join you there and eventually the non maga part or whatever is left of the Republican Party party, and you'll find yourself at a super majority who supports things like TPP or whatever. And we're gonna be right back to where we started 25 years from now. And so this is where, look, you do need to blame the practitioners where if you're gonna do something which is genuinely extraordinary, you have to do it right now. Nobody's saying Donald J. Trump is Mr. Detail or any of that. But I mean, at a basic level, what people I think voted for is there's this idea that there's a senile old man in the White House. House. We're gonna restore things to normalcy and yes, we'll have our chaos in terms of Trump drumfing about Mika Brzezinski's facelift. But the S and P goes up, the gas price goes down. The people around him seem to generally ish more competent compared to these Jake Sullivan type idiots or Anthony Blinken. So fine, but that's not what you're getting now. And like you said, now you own this thing 100%. Okay? You know, people said like, oh, he's a world historic figure. He's making a huge bet. And it is true. Trump is actually fundamentally a gambler. He believes that he can do this and he can get away with it. Obviously, he's 10 times more successful than I am in politics. So maybe he's right, but it's one of those where you can see all of the building blocks for a crisis. I was thinking about this with Doge as well. At a certain point, it's no longer up to you. Like I said before about that whole airline disaster. Imagine if they had fired air traffic controllers and you had a crash. Even if you're not responsible for that crash, you're getting blamed for that crash. Same thing with what's happening right now with the economic. You know, with these economic. The tariffs and a potential recession. Let's say that something totally out of the norm happens. Remember previous recessions that have sparked actual sell offs like this 9, 11 and the pandemic, who knows? Shit happens. That's one of the rules of running the world. You have no idea. Russia invades Ukraine. Boom. Gas market entirely implodes. Same October 7th. Change the entire route of every shipping container in the entire world. You can't plan for such an event. So let's say he's got this grand plan and then boom, something happens in the world. Now you're in that 40th order. Consequence. But you are gonna bear 100% of the responsibility for that. And people don't forgive. And honestly, they shouldn't forgive you. They shouldn't forgive you. You screw people's lives and if you get laid off as a result of them, well, I don't know what to tell you. That's the number one thing you're not supposed to do.
- [64:54]
Krystal
Yeah, he said some really wild things too. Like he said, there should be no supply chains. They should all be in the us. This is like, it's like the philosophy of North Korea, like unironically is the philosophy of North Korea.
- [65:06]
Sagar
My heart is in my heart. I am an autarkist, which is what you're talking about. That's what the North Korea model is, which is why do we really need all of these other countries? That's where my heart is. That is not where my head and my stock portfolio is. Where the reality of all of the global supply chain. It would be great to get 20% more autarkic. It'd be a nice little goal for us. But look, let's be real. If we want to do that, it's going to take a billion dollars in investment. We're going to need actually not a billion. Many, many, many more.
- [65:35]
Krystal
Way more.
- [65:35]
Sagar
Hundreds and hundreds of things. Probably a trillion dollars. And even net, Maybe we'll get 5, 10%. It's a start. At the very least, it's a philosophy. If anything, I think Trump is negatively polarizing us. And I think 10 years from now, what you're gonna watch is Trump is a lot like FDR in that he showed people what was possible in such a way that people are like, yeah, I'm not so sure about this. Donald Trump will be the very last president to have IEBA authority. I'm 100% confident of that. Donald Trump will be the very last president to be able to. Alien enemies. That's getting some sort of. When the House takes credit, just like they passed the 22nd amendment, they're gonna say and Congress has to approve by 52 votes or whatever. And a lot of the things that he's pushing right now, the legacy of that will actually likely be one of reaction and reassertion, I think by Congress obviously could be totally wrong.
- [66:24]
Krystal
But that's last thought on this. On the sort of broad historical sweep. I mean, in part because of the disaster of the Smoot Hawley terrorists and how they exacerbated the Great Depression, you know, progressives. FDR was a free trade guy. I mean, he, you know, moved very much in the direction.
- [66:41]
Sagar
It's not 100. Like, that's a very free. Friedman monetarist.
- [66:44]
Krystal
But it did make the Great Depression worse. Like, no, at the time, it was terrible economic policy.
- [66:49]
Sagar
I'm still not ready to say it was. Well, okay, the monetarist thing.
- [66:53]
Krystal
It was the only thing. Yes.
- [66:55]
Sagar
For. And I do not think that is accurate, but this. That's a much more nuanced.
- [66:59]
Krystal
But, you know, back to my point, it is widely believed, and was widely believed at the time that Smoot Hawley exacerbated the Great Depression. And FDR's whole push was to roll back trade barriers. And that helps begins an era in which the progressive position on trade was for a long time lowering trade barriers and lowering tariffs. And during McKinley's time also, there was actually pushback. It was somewhat divided depending on the industry and what you were doing, whether you're a farmer, a manufacturer, whatever. But there was a long period in which the progressive position was a free trade position. And that changed over time. That's why I do think there are so many facets to what is being done right now. It just is impossible to wrap your head around. I can't think of another single policy move that has been made by a leader here or around the world. Maybe like our decision to enter World War II, but that was sort of like made for us when we were attacked at Pearl Harbor. But that could have this level of both domestic and global radical fallout. And the other thing that we haven't even touched on here is the rest of the world also is going to get a say. The Europeans are getting ready to announce what their retaliatory tariffs are going to be or what their response is going to be announced. Quite a significant response. You already had a shift in the global power balance. You already had a move away somewhat from the dollar as well. And that too will have a massive global reordering effect with consequences that are hard to comprehend.
- [68:56]
Adam
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- [69:33]
Krystal
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- [70:10]
Sagar
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