Trump Says Strait Is Open, Wants to Cut Iran a $20B Check | Receipts LIVE

Summary

Podcast Summary: Bulwark Takes – Trump Says Strait Is Open, Wants to Cut Iran a $20B Check | Receipts LIVE

Date: April 17, 2026
Host: JVL (The Bulwark)
Guest: Catherine Rampell (Author of the Receipts newsletter)

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Episode Overview

This episode delves into the ongoing diplomatic and economic aftermath of the Trump administration's dealings with Iran, particularly focusing on the reopening of the strategically vital "Strait of Hormuz" (or "Strait of Iran," as Trump dubbed it), the proposed $20 billion transaction to Iran, and the broader repercussions for financial markets, global supply chains, and U.S. domestic economic policy. JVL and Catherine Rampell bring a critical, conversational lens—infused with sarcasm and skepticism—examining not only the surface-level moves but also the deeper contradictions and lasting impacts of the administration’s actions.

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Key Discussion Points & Insights

1. The "Strait of Iran" and Transactional Diplomacy

• Trump's Claims: Trump declared the strategic waterway fully open for business, rebranding it as the “Strait of Iran” before reverting to the more conventional “Strait of Hormuz” to "keep them off balance." (JVL, 01:10)
• Negotiating as Transaction: The hosts note the transactional framing of ending a war, with JVL quipping, "Is it strange to talk about the negotiation for the end of a war that you start as a transaction?" (01:51)
• Hollow Rhetoric: Early promises about freedom for the Iranian people have faded, with members of the Iranian diaspora—once supportive—now disillusioned. (Scott Bessant, 03:33)
• Disillusion Among Allies: Parallels drawn to other groups who believed Trump would deliver, only to be disappointed when objectives shifted or vanished.

2. Market Reactions & Over-Optimism

• Markets Responding to News: Despite ongoing uncertainty, financial markets displayed “euphoric” highs, with the S&P 500 hitting all-time records and oil prices dipping, even amid the strait’s closure. (JVL & Catherine Rampell, 04:28–05:22)
• Speculation & "FOMO": Market participants seem conditioned to “buy the dip,” fueling irrational optimism, detached from fundamental developments. CAPE ratios (cyclically adjusted price-to-earnings) are at dot-com bubble levels. (Scott, 06:00)
• Madman Theory in Markets: JVL floats the idea that Trump's chaos becomes background noise, muting negative news and causing outsized positive reactions to signs of normalcy. (07:45)

Memorable Quote:
"What if having a guy who creates chaos constantly... means if there's risk everywhere, all the time, then there isn't actually any risk?"
—JVL (07:46)

3. Lasting Supply Chain & Security Fallout

• Ceasefire Uncertainty: Even if the ceasefire holds, the world has now seen the Strait can be closed, introducing a “permanent new risk” to global logistics. Alternative routes (pipelines) may develop but will come at a cost. (Scott, 09:40–10:53)
• Allied Trust Erosion: Damage extends beyond economics—relationships with European and Gulf allies are strained, with tangible worries like Europe’s limited jet fuel reserves. (Scott, 11:41)

4. The $20 Billion Deal, Nuclear Issues & Toothless Agreements

• Asset Unfreezing and Uranium: Trump administration reportedly considering releasing $20 billion in frozen Iranian assets and buying 400kg of enriched uranium—a move reminiscent of deals he once condemned. (JVL, 13:21–14:02)
• Duration of Restrictions: U.S. seeks a 20-year Iranian enrichment pause; Iran offers only five. Both hosts agree: “Any part of this settlement which is about agreements... is meaningless” without verification and enforcement. (JVL, 14:07)
• Enforcement Doubts: Trump’s “make a deal and walk away” posture means few expect real follow-through or enforcement, raising regional doubts and U.S. credibility questions.

Memorable Quote:
"If you don't test, there are no cases. If you don't enforce, then they're not doing any enrichment."
—JVL (17:11)

5. Hypocrisy in Economic Populism & “Trumpian Socialism”

• Trump’s Shift to Price Controls: Trump’s rhetoric now mirrors the “socialist” interventions once mocked by Republicans—jawboning on fertilizer and fuel prices, government “watchdogs” ensuring prices stay in check. (JVL & Catherine, 21:00)
• Policy Inconsistency: Democrats, though previously pilloried for similar suggestions, are now muted in their critique—both sides have used antitrust as a political cudgel. (Scott, 27:11–31:49)
• Public Discourse and Accountability: Frustration at the lack of consistent principle around market interventions, with JVL remarking on the absurdity of politicians railing against “monopolists” while undermining antitrust in practice.

6. Consumer Sentiment vs. Economic Reality

• Revealed vs. Stated Preferences: The American consumer’s actions (booming discretionary purchases, e.g., boats and luxury Halloween decor) do not match survey answers expressing economic doom. Partisanship heavily mediates perceptions. (JVL, 36:21; Catherine, 36:44)
• Vibes vs. Reality in Politics: Voters’ feelings—rather than lived experience—dominate voting behavior, a phenomenon exemplified by the “Boat Index” anecdote. (JVL, 39:25–41:21)
• Money Illusion: Inflation’s impact is felt even when wage growth matches price hikes; perception lags reality, influenced by partisan narratives and the psychological effects of prolonged economic stressors. (Catherine, 43:09)

Memorable Quote:
"Everybody’s above average. In a broad Lake Wobegon."
—JVL (43:05)

7. Fundamental Economic Insecurity

• No Slack in the System: JVL highlights how relentless pursuit of efficiency has left Americans—across incomes—feeling one disaster away from ruin, a systemic condition that predates any recent administration. (JVL, 45:21)
• Media & Political Framing: Both the media and politicians contribute to a perpetual crisis narrative, shaping consumer expectations and eroding trust. (Scott, 47:30)

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Notable Quotes & Memorable Moments

• On Trump’s transactional worldview:
  “This is art of the deal. He calls it the Strait of Iran first, and then he calls it the Strait of Hormuz to keep them off balance. That’s...negotiation.” —JVL (01:29)
• On the irrelevance of agreements:
  “Any part of this settlement which is about agreements that one side or the other makes is meaningless because agreements are meaningless.” —JVL (14:07)
• On market irrationality:
  “It’s not like I have TDS or whatever...if you look at long term patterns...stocks seem overvalued.” —Catherine Rampell (06:27)
• On hypocrisy in economic policy:
  “God forbid if [leftists] open community-run grocery stores, that’s socialism. But now Trump wants to decide who can charge what for gas and fertilizer.” —JVL (21:27)
• On consumer contradictions:
  “They're living in Mad Max world...while sitting on a big boat, telling you their kids are doing better than they are.” —JVL (40:01–41:21)
• On relentless crisis framing:
  “Everybody’s always like, things are terrible. This is, you know, we’re going backwards...Everything is always bad.” —JVL (45:21)

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Important Segment Timestamps

• Strait of Iran/Hormuz and Transactional Negotiations – 01:10 to 04:28
• Euphoric Markets vs. Reality, FOMO, and CAPE Ratios – 05:06 to 07:32
• Madman Theory and Market Psychology – 07:45 to 08:54
• Ceasefire Longevity and Supply Chain Risk – 09:40 to 12:54
• Uranium Deal Details and Enforcement Doubts – 13:21 to 17:11
• Debate: Trumpian Price Controls & Antitrust Hypocrisy – 21:00 to 32:30
• Consumer Sentiment Disconnect & The Boat Index – 36:21 to 41:21
• Systemic Economic Insecurity & Framing – 45:21 to 47:30

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Tone & Style

The discussion is acerbic, skeptical, and often darkly humorous. Both hosts deploy sarcasm, with frequent callbacks to past hypocrisies and a willingness to critique both the Trump administration and the structural failings of American political economy. The dialogue is brisk, with layered references and quick pivots between policy, anecdote, and big-picture analysis.

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For Listeners Who Missed the Episode

If you want an unvarnished look at how the Trump administration’s foreign policy moves collide with economic management, public perception, and political hypocrisy—in a turmoil-rich, punchy style—this episode delivers. Whether you care about global supply chain vulnerabilities, the performativity of “dealmaking,” or just want to understand why economic “vibes” so often contradict reality (and shape elections anyway), this is a revealing and sharply funny listen.

Transcript

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[JVL]

Hello, everyone. This is JVL, future Webby Award winner with my. My dear friend Catherine Rampel, author of the Receipts newsletter. And we're going to talk about economics and the things that are happening in the world of money. Because as we, as we've discovered every Friday, there's always good stuff happening, Catherine, and today good stuff.

[Scott Bessant]

Is that an embarrassment of riches? Yes.

[JVL]

Strait of Iran is open. It is the Strait of Iran, which is what. What he said right there. You see it right there. He calls it the Strait of Iran. It's like the Gulf of America. Maybe that's part of they get out of the deal, we're going to rename it for them.

[Scott Bessant]

I hadn't considered that. That's a good theory.

[JVL]

It is fully open, ready for business. We then had confirmation in a follow up tweet from the president about 20 minutes after that. See, this is art of the deal. He calls it the Strait of Iran first, and then he calls it the straight of the Hormuz to keep them off balance. Catherine, that's. It's called negotiation.

[Scott Bessant]

The art of the deal right there.

[JVL]

The naval blockade is still in full force, though, until such time as our transaction with Iran is 100% complete. Is it strange to talk about the negotiation for the end of a war that you start as a transaction?

[Scott Bessant]

You don't think this is part of the just war doctrine?

[JVL]

I don't believe that's how typically Catholic theologians have talked about just war theory.

[Scott Bessant]

I mean, Trump knows more than the Pope, so I would defer to his judgment here. Yeah, it does seem quite Odd. Particularly since, once again, we don't really know what the objective of this war has been, is, or will be, but we just know it is a transaction of some kind. And transaction, of course, implies, if not something monetary, although there is some monetary transaction that is being discussed here, certainly something a little bit crasser than national security or the freedom of the Iranian people or anything else. But look, this is. Trump's a deal maker. You know, it's a deal, it's a transaction, it's a negotiation. It's not about world peace or civil liberties or anything else.

[JVL]

Do you remember all that talk about the freedom for the Iranian people that was in the first like 24 hours of this thing? And I do, as far as I can tell, is gone.

[Scott Bessant]

Yeah, Yeah. I mean, it's been interesting. I don't know if you've been following any of the chatter from like, the Iranian diaspora.

[JVL]

I have not. I'm curious.

[Scott Bessant]

Yeah. But I mean, I'm far from an expert on this, but I have read some, I've talked with some, you know, friends who are, who are part of that, who may or may not be representative. But there's also been news coverage about it, about how there were a lot of members of the Iranian diaspora who were very hawkish advocating for war, thought that Donald Trump would help their people, and are now disillusioned, understandably, because that objective, if it ever was one, fell by the wayside long ago.

[JVL]

Perhaps like the people who have been struggling for freedom in Venezuela.

[Scott Bessant]

Yes. Or the people who wanted prices to go down here. I mean, there are a lot of people who thought they had. Thought that they had something nice coming to them because Donald Trump said as much and now we've moved on.

[JVL]

So let's talk about the money. It's all about the money. What will this mean? And partly I ask because it seems to me like financial markets had already priced in, the straight being reopened and the war being over. Because for the last week we've had a series of like all time highs in the S&P 500 and we even had oil futures go backwards a little bit while the straight was closed. And so I. Is that the market's just pricing in already? The. The idea of this or.

[Scott Bessant]

Honestly, I am genuinely perplexed by what is happening in markets in that it seems much more euphoric, certainly than reality thus far. Pardon?

[JVL]

Than more euphoric than rational.

[Scott Bessant]

Well, I mean, markets, there's this idea of like animal spirits in the, in the stock market and irrational behavior and things like that. This is not entirely new, but it, it does seem particularly untethered to real developments on the ground. It. And I've seen other people who are, you know, like full time market reporters kind of try to puzzle through this as well. And the general pattern seems to be that when there's bad news, there's a relatively muted reaction to the downside. And then when there is maybe good news or the prospect of good news, at the very least there's a huge upside overreaction. And it's a little bit, I think somebody, I forget who it was. Somebody at Bloomberg wrote something to the effect of it's fomo. It's like market participants have been conditioned to buy the dip and that they don't want to be the ones missing out on the rally. And so that seems to be feeding some. Not super rational is the wrong. You know, I feel weird calling it rat, you know, rational or irrational, but it seems to be feeding some more over optimistic behavior at the very least. And it's not just me that is saying that because, you know, I have TDS or whatever. If you look at long term patterns, if you look at Bob Shiller who was a Nobel Economic Prize winner, he has this long running measure called cape. It's the cyclically adjusted price to earnings ratio. And it's basically a way of looking at do stocks seem overvalued or undervalued relative to how much the underlying companies are making. And right now they seem way overvalued. Like the level of the stock market relative to how much the companies in the stock market are actually earning looks way out of whack. Like it hasn't been this high since the 2000.com bubble. Yeah, yeah.

[JVL]

And so I have that chart in my newsletter today actually.

[Scott Bessant]

Oh, did you? I'm sorry.

[JVL]

Just as we know. It's okay. It was published, right?

[Scott Bessant]

I haven't seen it yet. I'm sorry.

[JVL]

That's okay. Because I actually, I mean, I didn't mean for us to talk about this, but I actually have my own theory to What's.

[Scott Bessant]

Oh, what's your theory? Tell me, tell me. I'll stop.

[JVL]

It is madman theory and it is the in, in the way that Trump supporters said. Actually it's good that he's such a crazy person in foreign relations because this makes. It keeps everybody else off balance. That turned out not to be true as we've discovered with Iran. But what if that was true for financial markets and what if having a guy who creates chaos constantly, right? What is chaos? Chaos is risk and if there's risk everywhere, all the time, then there isn't actually any risk. Right. And so, you know, if, if everything is risk, then when he does something crazy and things look bad, you would get a muted reaction, right? I mean, the markets would be like, it's not great, but also there's always stuff like that. And then when you had your moments of, of non chaos, your moments of normalcy, you'd expect the markets to, to go gangbusters. So this is. Anyway, I've explicated at some greater length in the triad. Anybody who is, who is watching this might want to go.

[Scott Bessant]

Who's a better colleague to. JBL will read it. Yes, I will read it immediately after this. I'm sorry.

[JVL]

That's okay. No, literally, it came out as we were hopping on.

[Scott Bessant]

Okay, I want to talk to me

[JVL]

about where do you think this optimism holds and do we think that this version of the ceasefire holds? I kind of do. I have assumed that we were at the end game and that Trump just had to basically drag out the negotiations because the initial reactions were so like, holy shit, Trump. Trump caved and he had to make it look like. No, I didn't actually cave. Don't worry. Do you, do you have any thoughts on that?

[Scott Bessant]

I don't know. I've kind of given up making predictions about this. I feel like we've been hearing for a couple of weeks that certainly the administration and Trump himself will say this thing is almost over. Generally these statements are made when markets are having at least their muted reaction to the downside or oil markets are spiking or whatever. So I feel like we've kind of heard this before. I don't really have a good enough sense of the players involved to know if it's credible this time. I think the real question going forward is that even if this ceasefire does not expire, I forget the exact date, but sometime next week, and that it persists and that there is some kind of indefinite detente. What does that mean for global supply chains going forward? Because now that we have seen that the strait can be closed, it is a known risk that it can be closed again, if that makes sense. Yeah, you can't exactly. You can't unsee it. And so what does that mean for insurers who may be worried about their ships, about backing ships that are going through? What does it mean for other parts of the supply chain? I think there'll be some adaptations, like more pipelines coming out of the Gulf, as opposed to relying on a strait that can again be closed. Maybe the pipelines are harder to blow up or whatever, harder to disrupt. So I think there'll be some adaptation that maybe is fine. It'll be costly in the near term, but maybe it'll be fine. But I think that I do wonder, even if this is the end, it's not really the end. And how much damage have we done in the meantime? So it's like, it's almost. Not that it's a moot question about whether this is it, but I think there is no way for this to ever be it because we have now permanently disrupted supply chains in that region. We have once again tarnished our relationships with allies around the world, not just those in Gulf states that have sustained attacks, mostly from Iran through all of this and from Israel, of course, but also like our allies in Europe. There was a story in, what was it, CNBC yesterday about how the IEA warned that. Yeah, exactly. Europe may have just six weeks left of jet fuel. Like, that's insane that they might run out of jet fuel, which is obviously a critical component for jets for, for any kind of commercial air travel. And again, maybe the strait reopens and maybe that, that disruption goes away, at least temporarily. But, like, how much damage have we done in the meantime? So I, I hope the war, I hope the bombing stops, I hope people stop dying, all of those things. That would be obviously the first order priority. But, like, I don't, I don't. I have a pretty bleak view of what. Yeah, okay, sorry.

[JVL]

Well, I have to correct myself because I said something that wasn't true. I said that you can't unsee this. And it turns out that that actually is not the case. Matt, if you could show us. So Donald Trump says that Iran has agreed to never close it again. And so, guys, we don't have to worry. Problem solved. They've agreed not to do it.

[Scott Bessant]

Yeah, I'm sure all of the insurers are totally going to take Trump's word for that. Right?

[JVL]

Or the Iranians word for that. Right. Like, this is the funny, you know. So one of the sticking points on the deal seems to be about Iran's stock of enriched uranium. They have like 400 or so kilograms of 60% or more enriched uranium, it seems from reporting that America might be willing to purchase that from them to the tune of $20 billion, which would be something that Donald Trump criticized the Obama administration for doing. It's okay, but at a much greater scale.

[Scott Bessant]

You're so persnickety, jvl.

[JVL]

But. But it seems to be the, the, the fight is over. I'm sorry, the negotiation, the transaction is over. How long then Iran would agree to not enrich uranium? And so it seems as though the United States from reporting, wants them to agree to not do it for five years. And the Iranians, I'm sorry, for 20 years. And the Iranians want to agree to not do it for five years. As I have said from the beginning, any part of this that is about any part of this settlement which is about agreements that one side or the other makes is meaningless because agreements are meaningless. Like, you know, Iran could say 10 years, we won't do it. That doesn't mean they actually won't do it. Right. I mean, they're, they're, you have to decide, are we going to have a verifications regime? Are we going to agree to abandon snapback sanctions in case there are violations? Could the Russians enrich uranium for them and then ship it to them? Right. Which is a thing which has been talked about. But the, the point of this is that the rationale that this was all about forever removing the possibility of nuclear weapons sort of collapses too. Because even, even if what we're talking about, even if you take everybody at their word and Trump gets exactly what, it's what he wants, we're only kicking the can down the road for 20 years.

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[Scott Bessant]

Yeah, I mean, Trump can barely think past the next 30 seconds. He's kind of like a goldfish, so 20 years may seem indefinite to him. I think the bigger issue is exactly what you pointed out, which is how do you enforce something like this, particularly when we have been proven under this administration to not be able to stick to our word. And, and a Gentleman's agreement, a handshake agreement, a piece of paper, whatever this looks like, it won't be worth anything if there is not some sort of enforcement mechanism. I'm curious, do you think that is there an enforcement mechanism that you would trust or that you think should be on the table?

[JVL]

What's funny here is that the Iranians must understand that Trump doesn't want to enforce any agreement. Right. Trump wants to make the agreement and walk away and never think about this again. And he does not want to wind up in a position where he finds violations and then has to do something about it. Like, for Trump, the, The binary. If Iran wound up getting a nuclear weapon, like if they test, you know, a nuclear device and prove that they have one, he could live with that politically. Like, just like, you know, that wouldn't hurt. What he can't live with politically is having to go in and do this again after the pain, he just, you know, absorbed and after having seen what Iran can do. So from, I could very easily see a situation in which we get a deal. The Iranians promise we will not do anything for X years, and the. There will be some sort of superficial enforcement mechanism. But again, Trump is incentivized. It's like Covid, if you don't test, there are no cases. Right. If you don't enforce, then they're not doing any enrichment.

[Scott Bessant]

Yeah.

[JVL]

So, yeah, that's.

[Scott Bessant]

I hadn't thought about it that way. Yeah. But then the question becomes again, how does everybody else perceive the risk in all of this? I guess I think you were probably right on Trump's motivations. But then what about market participants? What about people like Lindsey Graham, you know, the people who are agitating for this? What does Netanyahu think about all of this? To the extent that he continues to have influence over Trump? And I imagine that there's. That that may be somewhat less effective these days post invasion. I don't know. But, yeah, the question is, what is.

[JVL]

Like, what do the Saudis think?

[Scott Bessant]

Yeah. Another great.

[JVL]

Would the Saudis be okay with that? Because they have to live with this shit, right? Like, this is. This is across the street for them.

[Scott Bessant]

Yeah, yeah. They're like the enthusiasts like Lindsey Graham, and then there are the people who might actually bear the consequences of not enforcing this agreement. And I. I don't know. I don't. Yeah, that's an interesting analysis. They may.

[JVL]

They may discover. It's possible. They may discover that Donald Trump doesn't really care what they think and that he only wants to take care of his own problems. Weird.

[Scott Bessant]

That's improbable.

[JVL]

Weird. I'm just looking at the. For the CNN report on this is that the administration is considering unfreezing $20 billion of Iranian assets. And this is after Trump went crazy because the J J Pack.

[Scott Bessant]

How do you, how do you JPOA.

[JVL]

The JPOA was I think we unfroze 1.2 billion so you know, only 20x.

[Scott Bessant]

Yeah, great. Whatever. I mean there's been some inflation since then.

[JVL]

So it's a call it cost of living. You know when you, when you cost of living increase.

[Scott Bessant]

Exactly. For the payoff to Iran, do it in real dollars. I mean you're right. You're obviously right on some level. The hypocrisy, lack of consistency, it's all caring about it almost feels quaint. I wish that were not the case. But I just take it for granted

[JVL]

that yeah, it is where we are.

[Scott Bessant]

There's a double standard. Yes, exactly.

[JVL]

It is where we are. So I, I would like to talk with you about your truly wonderful newsletter yesterday again, if you are not receiving Katherine Rampel's receipts newsletter, go sign up, go to. I'm sure we have a link down in the YouTube description or go to the bulwark.com and sign up. It was about the very funny sort of socialist stuff that is coming out of this super duper free market administration where you have the president and the Secretary of Treasury saying that they are really keeping an eye on people selling gas and people selling fertilizers to make sure that they only sell those goods at price prices that the government approves of.

[Scott Bessant]

Yes, yes.

[JVL]

God bid. If Zolan Mumdani opens up five community run grocery stores, that's socialism.

[Scott Bessant]

Yeah. Again, it's like, I realize, I realize it's like almost a little bit quaint to fixate on the hypocrisy here, but I am old enough to remember that when Kamala Harris proposed as part of her economic policy launch a version of what certainly seemed like price controls and when Joe Biden jawboned oil companies or really retail gas stations to try to get them to lower their gas prices, anything that's smacked of not understanding supply and demand, of intervening in markets, in suggesting that the government should exert pressure or even control over how markets price things was mocked. I mean I mocked some of it because I thought it was economically illiterate and basically early sloppy list. And certainly that was the case with a lot of the greedflation stuff that we saw even prior to that, not just from Biden and Kamala Harris, but kind of led by people like Elizabeth Warren, that it was much easier to scapegoat corporate greed than to give. Well, certainly the more technical analysis of, like, why prices are rising because supply and demand are out of whack, but also that might implicate some of the policies that Democrats had adopted that on the margin, I think, worsened that mismatch between supply and demand and therefore worsened inflation, which was already going to happen anyway. In any event, there was a lot of criticism of that line of rhetoric from economic commentators like me, but also from Republicans because they, I know, surprise, because this was supposed to be a sign of socialism, of the, you know, economic illiteracy of Democrats, et cetera, et cetera. And lo and behold, Donald Trump is suggesting pretty much the exact same policies. I mean, in some cases, it's. I almost have deja vu because it's like almost the exact same complaints and rants and jawboning from. From Trump, from Scott Besant, from other people in this administration that I heard from Biden, that I remember arguing with people in the Biden administration about rockets and feathers, which is this concept about gas prices shoot up quickly on the way up, and then they fall down slowly on the way down. And this is a known phenomenon, and we can get into why it happens, but it's a known phenomenon that always drives presidents crazy. And they just yell at the gas stations, and that's not gonna do anything. And lo and behold, Scott Besant said basically the same thing that Donald Trump is gonna yell at the bad actors who don't cut their prices quickly enough. So it's exactly the same stuff. And Republicans, of course, are nowhere to be found in their critiques of this alongside, you know, any critiques of other, whatever you want to call it, Trumpian socialism or command and control style instincts for the economy that Donald Trump has adopted. This is certainly not the first of those that. That he has done or that they have remained silent on, but they are nowhere to be found. And Democrats are in this kind of odd situation where there should be a layup for them, right? They should be able to say, God, Donald Trump is responsible for raising prices in a way that is much truer today than was ever true of Democrats a few years ago, even if, as I said, Democrats were not completely blameless. Much easier to pin the blame on Donald Trump today for raising prices across the board. And. And yet he's trying to scapegoat corporate greed as this. You know, sort of. It's an. It's an easy out for him. Right. Because he doesn't. He wants to deflect from what he's actually done. But Democrats can't say that because they do the same thing and they're in this tricky situation. And I just hope that there is, like, some enlightenment about all of this.

[JVL]

Not only because it's, like, on enlightenment.

[Scott Bessant]

No, I know.

[JVL]

If. If the bet is enlightenment or not enlightenment, I will always take the under.

[Scott Bessant]

Yeah, that's fair. And my. I guess the more serious point I should make is that this is not just about silly rhetoric. I think the real problem is when you have policymakers who get kind of high on their own supply and then they actually do try to impose price controls or similar measures. It's one thing if they say a bunch of silly stuff and they launch a bunch of performative antitrust investigations, which, by the way, both Trump and Biden did have done. Prior presidents have as well. Every time there's, like, an increase in gas prices, prior administrations or other politicians have sicked the FTC to do a meaningless antitrust investigation. That's wasteful and it won't do anything. But. But it's much less harmful than actually imposing some form of price controls in these kinds of, you know, these commodity markets. So that's what I'm more concerned about. And again, maybe enlightenment is too much to hope for, but at the very least, greater caution against taking their own bullshit so seriously.

[JVL]

A better response might be government investment, renewables or something like that.

[Scott Bessant]

Right.

[JVL]

That is like, if you want a policy response to, ooh, energy now, it doesn't help in the near term because these are. This is a long tail.

[Scott Bessant]

Yeah.

[JVL]

But the problem with that is you can do that the way the Biden administration does, and then the next administration comes in, as Trump has done, and just takes it all away.

[Scott Bessant]

Right.

[JVL]

And so I do think, just as a matter of politics, there's a pretty obvious answer for Democrats, which is we are in favor of using the power of the government to make life easier for consumers. When there are exogenous shocks.

[Scott Bessant]

Yeah.

[JVL]

Not when there are shocks that the president causes. Right. This is, you know, like this shock is because he decided you want to fix prices, stop the war. Right. Don't. Don't. So I. I mean, that's a reasonable.

[Scott Bessant]

I mean, there are other things that. I was gonna say there are other things that Democrats could do on the price front that are not related to the war, but are related to stuff that Donald Trump has done. So I'm thinking things like Trump and the Republicans allowing the enhanced premium tax credits for people who are on marketplace insurance plans to lapse. And that's not a market that I think it resembles anything like a free market. I don't want to suggest that like all of these markets, if left to their own devices, would be, you know, would be perfectly competitive or anything. Health care is totally screwed up. But this is a case where you could do a lot of good. This is a core competency and strength of the Democratic Party. You could hone in on things like that and not actually, in my view, do much damage. Do any damage, really.

[JVL]

Are you going to say last, last thing from your. You had a Trump bleat from earlier this week. I am watching fertilizer prices closely during our fight for freedom in Iran. The United States will not accept price gouging from the fertilizer monopoly American farmers. We have your back. I do. Is it freedom we're fighting for in Iran again? Is that. It's also confusing.

[Scott Bessant]

It is very hard to keep track. I don't know what we are fighting for. But price gouging is bad. We have decided that. And I know I'm going to get a bunch of angry comments because people are like, price gouging is bad and yeah, it sucks when prices go up. But nobody can ever define what price gouging is. Price gouging is just like prices that are higher than feels right right now. And again, this is like an easy scapegoat. And the other thing I will point out about some of this is that Trump is actually not wrong that the fertilizer market in the US Is pretty concentrated. This has been like a known issue for a while. So it's not like I think more antitrust enforcement is bad. Antitrust enforcement is. I'm generally in favor of it, certainly much more than this administration has been to date. It's just that antitrust is sort of like diet and exercise. It's like, you know, it's generally helpful to you in the long run, but it will not solve an acute problem like acute crisis like the one we are dealing with right now, where we have supply chains completely severed in the fertilizer industry. So it's, you know, better competition policy, better competition enforcement, pro competition enforcement. A good thing. It's not going to solve. I mean, not only will it not solve this problem, it also has like very little to do with some of the other things we're talking about. Like retail gas stations are incredibly diffuse. This is not a concentrated industry. There are like 150,000 or some odd retail gasoline Stations in the country, most of them are owned by single owner operators, you know, independent owner operators there. A lot of them are like losing money on the gas that they sell. Or at least it's very, very low margin. It's really just about getting people in the door to buy the beef jerky and the, you know, slushies and stuff like that. So it's. I don't even understand the logic behind like, oh, if only we had more competition in the retail gasoline industry, which is notoriously cutthroat, we would have lower prices. No, it's just, it's a supply shock and you gotta accept that.

[JVL]

I feel like a crazy person just baying at the moon, but it drives me both insane that the president, who is gutting antitrust, then when he has a problem says, I mean, these monopolists over here.

[Scott Bessant]

I know. Well, also when he has.

[JVL]

It just drives me crazy. Let's do antitrust.

[Scott Bessant]

Yeah. Or for that matter, a political enemy that he wants to exact revenge on. He's also weaponized antitrust authorities against. For example, when Time Warner was merging way back in the day with AT&T and CNN was involved. He was mad about that. You know, there's some question about if Netflix had successfully bought Warner Brothers this time around. There were, you know, at least the suggestion of threats that the administration would try to block it, even though they don't seem so interested in blocking the other merger that does seem to be going through with, with Warner Brothers. So, yeah, no, there's, there's no principle here.

[JVL]

It's all corruption all the way down. All right. A little, little something, little pallet cleanser. Your friend and mine, Scott Bessant, who I think is in the running for the most just sort of superficially detestable person in the administration. It's between him and J.D. vance. I would say if, like the question being the person you would least like to have to sit next to for an hour, like at a dinner or like, or be seated next to on an airplane. Right.

[Scott Bessant]

He's certainly the person most likely to threaten to punch you in the face. There have been a bunch of stories about that.

[JVL]

Yes, I've heard that about him.

[Scott Bessant]

Yeah.

[JVL]

And boy, but, but he had. Matt, we could throw that up now. Something sort of.

[Scott Bessant]

Aren't we seeing the sentiment? Why? Are people feeling better?

[Economic Expert]

Well, I, you know, I, when I was in the investment business, there are consumer surveys, but I used to look at what are the people really doing. So at treasury, we have loads of CEOs come through, whether they're in retail, credit card, the bank. Banks and the consumer, while they may be sounding grim, is actually quite buoyant. So we are seeing spending has been very solid across most categories.

[Scott Bessant]

They might not feel good, but, well,

[Economic Expert]

look in their heart of hearts, they feel good. I'm not sure what they're telling the survey.

[JVL]

God help me, Catherine.

[Scott Bessant]

I think kind of with him. Yeah, that's what I was gonna say. I was like, I know we're, we're in a dunking on Scott Bessant.

[JVL]

That's why I set that all up. This is the, that onion meme with like the worst person. You know, just made a good point. So I, I went crazy during the Biden years when the consumer sentiment was the lowest it had been since the great recession. And yet boat sales for at an all time high never had more Americans bought boats than during like the period from 2021 through early 2023. Another marker that was was the appearance of the four hundred dollar Home Depot Halloween skeleton. The long skeleton. I don't know if you remember this, but there everybody was buying Jack Skellington maybe or I forget the name of this. The Home Depot people had a cutesy name for it. And you know, you just drive around in every fucking house, every third house had one of these things on their lawns. $400 for a stupid thing that you put on your lawn for one week a year. And I was just like, I am sorry, but this country does not act like they believe things are terrible.

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[JVL]

And so I listen to Scott Besanteer and I'm like, yes, people's. What they're actually doing with their lives does seem different than what they're saying in sir, in the surveys. And you and I have talked about this before, like the consumer sentiment surveys, things are not great in the economy, but the consumer and sentiment responses are like it's the middle of the 1930s or something.

[Scott Bessant]

Yeah. Economists refer to this as revealed preferences. The idea that stated preferences and revealed preferences are different and generally we would maybe place more weight on revealed preferences and the consumer sentiment numbers in particular, lots of polling actually really has gotten less reliable in the sense that it is more likely to be mediated through a partisan filter. And so when, when people are answering us a questions about how good they think the economy is in various aspects of the economy, if they are Democrats and there's a Republican in office, they are more likely to say that the economy sucks than a Republican is if there's a Republican in office. And so you do kind of have to take things with a grain of salt and maybe pay more attention at least to what the independent voters are saying. But yeah, there's been this disconnect. It's partly about partisanship and I think it's also partly about just kind of like this hangover effect almost from the great inflation that we saw a few years ago. So like the things. So I think it's not like it's completely made up or that it's completely about partisanship. I do think it is true that many of the economic indicators that we look at, things like inflation don't necessarily capture the ways that people think think about their financial status. So just as an example, inflation is usually calculated like month over month or year over year. But it's not as if people have completely forgotten what prices used to look like two years ago or three years ago. That's not what economists pay attention to. But consumers have longer memories and so they're still mad about the fact that things were so much cheaper a few years ago than they are today, even if they have stopped getting even more expensive. So I think it's, it's partly about, you know, there just is a difference in perspective in how consumers think about

[JVL]

selective memories, though I'm not sure. Definitely longer or shorter. Right. Because. Because consumer memories become incredibly long on some things and like stupidly short on others. And yeah, it becomes harder. And here's the, what I was trying to get at that the disconnect I worry about is the political Disconnect between politics and economics. Right. So in economics we can still say, well, you have stated preferences, but we can see your revealed preferences and your behavior is based on that. In voting, people have basically just gone to voting their stated preferences. Right. Like they vote their feelings and their vibes.

[Scott Bessant]

Yeah.

[JVL]

And it doesn't matter what their actual real life experience is. Like, you know, like they, they can have their brand new boat and their giant Home Depot skeleton and still they're gonna vote because like, oh, it's terrible here. And yeah, there's, I'm forever linking to this. The, the. Ellie Reeves did a piece on cnn, I don't know, two years ago, maybe three years ago in which she went to a Trump boat parade and she was talking to all these Trump people

[Scott Bessant]

and so she's like really so into the boats.

[JVL]

You're basically, It's a very important indicator, no, very important economic indicator, the boat index. And, and so she's talking to this, this big dude in a toga and he is just going on and on about how the country is going to hell and nobody can afford anything and it's awful and nobody can make a living. And Ellie and her, they were like very non threatening way says, no, I hear that. I really, I hear that. Although a lot of people are really worried about that. It does seem like you have a really big boat here though. And so he pivots to, well, I'm doing great. Yeah, like, you know, I'm doing great. And the reason I'm doing great is because I worked hard and I did everything the right way and I deserve it and blah blah, blah, blah, blah. And so Ellie says to him, totally understand. So it's really more worried about the future and for your children. And he goes, oh no, my children are doing awesome. My children are actually better off than I am. They're making even more money than I make. And you know, but, but that's because I raised them the right way and showed them. And so she's like desperately trying to figure out, wait, wait, you know, some way she earnestly, she's looking for, but where's the hardship in your life after he's going on and on about how he's living in Mad Max world, you know, and that's the disconnect.

[Scott Bessant]

Yeah.

[JVL]

Whose lived experience is one thing, but who's just preferences and vibes are another.

[Scott Bessant]

Yeah. And to be fair, this, this phenomenon, I forget what it's called. Somebody who's watching will remember, but there's like a specific name for this phenomenon in Political science. When people like love their own congressmen but hate Congress. They love their local school, but they hate school. You know, they think schools in general are bad. And there is a version of this for finances that people are much. I don't know if this is still the case, but at least a couple of years ago when I had last looked at this, people rated their own financial circumstances much more positively. Yeah, yeah. Than that of the overall country. But I do actually think. Well, I'd have to look at the data. I don't want to, you know, make this up, but I do think it is possible that people. Well, yeah, actually if you, if you look at the numbers from like the University of Michigan Consumer Sentiment Index, there are much more people who are saying today that their finances are worse off, their own finances. So not just like general impression of your overall economy. And I think that's partly, I think that's actually not in tension with the example that you gave. Because one reason why people really hate inflation is that even when their wages rise, which is often happening, like you may have this, what's called a wage price spiral that like wages rise in response to high prices and then prices rise further, etc. People think that their wage increases, their raises are because of their own hard work and they deserved them and inflation is something that happened to them. They are actually in a.

[JVL]

Everybody's above average. Catherine In a broad Lake Wobegon.

[Scott Bessant]

Exactly. In a broad sense these things are linked wage growth and price increases. And maybe people are more likely to get able to move to a better paying job or get a promotion or whatever when the economy is so hot that you do have rapid price increases. But that's not how people interpret what's happening to them. So like boat guy, um, I'd be interested in re interviewing him. Does he feel like maybe he's doing, you know, he thinks like he's bringing, he's raking in money. So much so that he was able to get this boat, but the boat cost more than it should have or other daily things that he purchases cost a lot more than they should have and it is robbing him of his well deserved higher living standards that he thinks he has earned. And you know, there, there that it's not wrong that people who are making more money or who got into a promotion like may have done a lot of things to earn that. But when you have rising prices across the board, that's also a factor. It's just not how people think of things. There's a term for this called the money illusion, which is about how people think about inflation, nominal prices versus real prices and things like that. And so I, I know you always want to crap on the voter for, for all of these things. And they're imagining problems and I am. And I'm just. I'm sorry, I'm sorry. Okay. I'm overstating the case. I do think on, I, I think you have a point in this disconnect and about partisanship and everything else, but I don't think people are like totally making up the fact that they feel strapped or that they feel like life is becoming unaffordable. I don't think they're making it up. And I also don't think it's particularly productive to argue with them about how they're feeling. So the question is, like, how do you, if you're a policymaker, whether an elected official or otherwise, how do you respond to it in a way that does help people's lives materially and helps them feel better about it too?

[JVL]

So my response to that would be absolutely. I understand people feeling stressed. And the reason they feel stressed is because the entire American economic system is set up to have very little slack in it. We have been chasing efficiency in America at a fantastic rate since at least the early 1970s. This is what the entire idea of just in time delivery is. We're going to wring all the slack possible out of the system. This was the move from the one income household to the two income income household. And another word for slack is safety. And as societies and economies become more efficient, you get greater returns. Right. And so like standard living. But also it means that people are working without a net. And this is true for most people in America. Like even very high up on the wage scale, you can be in the 85th percentile and still be one medical disaster, one, one job loss away from like real trouble. So that is not made up. It's real. Yeah, but the thing is that that has been real every week of every month of every year for decades. And it drives me a little crazy when people are like, I mean, just think about this. When's the last election where the people running were like, things are really good and we gotta, we gotta make sure that we protect our gains and we don't have too much uncertainty in the markets. We want to make sure that we're staying on even keel because things are good right now. No, it's, Everybody's always like, things are terrible. This is, you know, we're going backwards. It's. Everything is always Bad. And the same way that nobody ever says, you know what, gas prices are really cheap right now. Nobody ever says this. Everyone's like, even when it's 250, like, you know, you might stop caring about gas. But nobody ever says, looks around, says, yeah, you know what? Actually housing prices are actually quite reasonable right now relative to the cost of rent. You know.

[Scott Bessant]

Yeah. I mean, who does that? Yeah.

[JVL]

These are bigger systemic problems with the American economy. And the way that we've chosen to order ourselves or the way our oligarchs have decided to order it for us, depending on how pink you are.

[Scott Bessant]

Yeah. I think this could be a much longer conversation. I think the media, media coverage is not blameless in any of this either. Politicians certainly. Yes, exactly. Politicians certainly benefit if they're out of office, in particular from the change election type model. Everything is crappy now. I can deliver something better. But there's also a bias in the news media to cover things that way too, even when they're great. So. But anyway, that's, that's a rabbit hole.

[JVL]

We can fall down another time, some other time. Hey, friends. Tickets for the Bulwark live shows in Los Angeles and San Diego next month are on sale right now. They just went on sale right before we came on here. Go to the bulwark.com events. Don't sleep on these things. They sell out faster than they should for any reasonable. I understand. I don't know why people are so determined to go see Sarah and Tim, but they are. And everywhere Sarah and Tim go, they get mobbed. And so you should, you should go to. These shows are fun. They're a lot of fun. Catherine, thank you for sitting down. I look forward to doing this again next Friday when I'm sure we'll have more good news. Maybe we'll be in a partnership with Iran to collect tolls paid in World Liberty Financial. Stablecoin on the the Strait of Iran. I mean it just seems like there are so many possibilities here.

[Scott Bessant]

There, there are. The future has infinite possibilities. That is always the case. Thanks jvl. It's always fun to. Always fun to chat with you.

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