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This is an iHeart podcast.
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Guaranteed Human. I'm Clayton Eckerd. In 2022, I was the lead of ABC's the Bachelor.
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But here's the thing. Bachelor fans hated him.
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If I could press a button and rewind it all, I would.
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That's when his life took a disturbing turn. A one night stand would end in a courtroom.
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The media is here. This case has gone viral. The dating contract.
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Agree to date me, but I'm also suing you.
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This is unlike anything I've ever seen before.
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I'm Stephanie Young. Listen to Love trapped on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Then she says, have you seen a
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photo of my son? And I'm like, who is this person?
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Welcome to the boys and girls podcast. Arranged marriage is basically a reality show and you're auditioning for your soulmate. And who's judging? Only your entire family. I sacrificed myself to this ancient tradition, hoping to find love the right way. And instead I found chaos, comedy, and a lot of cringe. Listen to boys and Girls on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
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Safeway and Albertsons have made saving easier than ever with great savings on family favorites this week at Safeway and Albertsons. USDA choice beef, boneless, tri tip, whole or flankin style ribs bone in are $6.99 per pound member price at and asparagus are 199 per pound member price plus 16 ounces strawberries. 6 ounces raspberries or blackberries are 197 each. Limit three member price with digital coupon. Hurry in. These deals won't last. Visit Safeway or albertsons.com for more deals and ways to save.
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Cool Zone Media.
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Welcome to Ikarap and here a podcast about tariffs and how to justify them. I am your host Mia Wong and today we are talking about tariffs, the Supreme Court ruling, and how Trump is manufacturing a crisis to justify the next set of tariffs that he has imposed. Oh boy. So, all right, to recap our last tariff segment so people understand what I'm talking about when I talk about the Supreme Court ruling from a few weeks ago. So Trump had been claiming the ability to do tariffs under the International Emergency Economic Powers act, an act that famously never says the word tariff. And the Supreme Court was like, no, actually the International Economic Powers act does not give you the power to levy tariffs. A thing that it does not say that you can do. So Trump got extremely mad about this and he imposed a 10% tariff across the board, using a different law, as he said he was going to do. Now, this 10% across the board tariff was run through section 122 of the Trade act of 1974. We're going to get into that. Okay, so he imposes a 10% tariff using this, like, different authority from section 122. And the next day he goes, I'm going to raise the tariff rate to 15%. And this is the tariff rate on the entire world. But then he just forgot to do it because he got distracted by, I think, invading Iran. So he has never actually, you know, raised the tariff rate to 15%, which he said that he had done. So it's now just at 10% on the entire world instead of, you know, all of the sort of individual country tariffs that have been in place before. And that's sort of the focus of today's episode is about these tariffs, because these tariffs are already being challenged in court. And I think that that challenge has a very, very good chance of winning fairly easily. And the reason that those tariffs have a very good chance of being overturned by the courts is that unlike the IEPA tariffs that he was using, where he was claiming illegally the authority to just do whatever he wanted, this is why you would wake up in the morning and there's like 100% tariff on China, like 700% tariff on Vietnam, blah, blah, blah, blah, blah. Trump was claiming that that act let him do whatever he wanted. It did not. The court found that he did not. But that was how he was using tariffs, and it was the basis of how he was using tariffs for diplomacy. Right. You know, he would put a tariff on someone at random, claiming this power, and then he would, like, enter negotiations with them, and he can't do that anymore. Now what he's done in its place is again, impose these tariffs using section 122 of the Trade Act. Now, this authority is very, very different than the authority Trump was claiming before. I'm just going to read it because it mostly explains itself. Do not worry about the international payment problems or balanced payments deficit that it mentions at the beginning. We're going to go over that in a second. What's important for our purposes here is that in order to put tariffs into effect whenever fundamental international payment problems require special import measures to restrict imports. One, to deal with large and serious United States balance of payments deficits, two, to prevent an imminent and significant depreciation of the dollar in foreign exchange markets, or 3, to cooperate with other countries in correcting an international balance of payments disequilibrium, the President shall proclaim for a period not exceeding 150 days, unless such a period is extended by an act of Congress a temporary surcharge not to exceed 15% ad valorem in the form of duties in addition to those already opposed, if any, on articles imported into the U.S. okay, so let's look at the limits first. Right. Instead of any rate of tariff on any country, which is what Trump had been doing, section 122 only lets you set an up to 15% tariff on every country in the world and only lasts for 150 days unless Congress votes to approve it. This sets up a giant fight in Congress that Trump is not going to win. Now, we may never get to that point because the same right wing legal group who funded the lawsuit that overturned the IEPA stuff is going after section 122. And they're going to win. Now. They're going to win because section 122 has literally never been implemented before. The tariffs specifically never been implemented. And there is a reason for that. And the reason is that to even deploy Section 122 tariffs in the first place, you need fundamental international payment problems. One, to deal with large and serious United States balance of payments deficits, to print dollar depreciation, and cooperation with other countries to correct international balance of payments disequilibrium. So those are very specific conditions. What does that mean? What does it mean for there to be a problem with balance of payments? This requires us to understand what the fuck balance of payments is. And it is here where I am fulfilling my promise from that executive disorder episode where I said I would explain it in the full episode. All right, we're doing it and oh fucking boy, are you in for it because. Jesus Christ. Oh my God. Holy shit. This stuff is annoyingly convoluted, but it is also extremely important to how the global economy functions, how it's changed. And you know, it's not really relevant for the US at all for reasons we will get into, but it is extremely relevant for the economies of a bunch of developing countries. So, okay, let's start off with balance of payments. So what is the balance of payments? I'm just going to start off by quoting the St. Louis Federal Reserve. Balance of payments is a summary of all the transactions involving goods, services and investments between one country and all other countries over a given time. Any transaction that causes money to flow into a country is a credit to balance payment accounts, and any transaction that causes flows out is a debit. So this is a Record of literally every purchase and capital movement that goes in and out of a country, right? So it's goods, services, debt payments and things can either be credits or debits, as the Fed explains. You know, things that are debits, right? Things that like make your account go lower is, you know, debt payments, capital transfer payments, like buying imports. If you were importing stuff from China, that is a debit. And then there are things that are credits that make account go up. So that's other countries paying for exports, capital transfer receipts and you know, financial assets. That's other countries paying for your exports. So this is tracked in like two accounts. There's a capital and finances account. I'm just gonna call it the capital account because that's the most common name for it and it's shorter. So there's the capital account that is all movement of capital in and out of the country. And then there's a current account which is like a trade record of all goods and services. Technically. There's also stuff from like interest from investment goes there, but we don't really care about that for our purposes. The current account is the account that's like trade. And then there's a capital account which is the account that's all of the capital moving in and out. Now importantly, these two accounts, right? These two accounts compose balance of trade, right? This, this record has two accounts in it. Those are the two accounts. If you line up all the credits and debits and then they Cancel out =0, the value of all goods being imported or exported to services and stuff like that too is the same as the amount of capital moving in and out of the country that the two accounts will cancel out. And this is what's really confusing about balance of payments, because why the fuck is that true, right? Why are the capital flows and trade balance. Why can't you have an imbalance? And the answer is that's how the accounting system works. And the reason the accounting system works like that is because of what balance of payments is. Now weirdly, if you want a more detailed explanation, there are a billion detailed explanations that are extremely convoluted and annoying. The Reserve bank of Australia weirdly has like a readable one for people who aren't like engrossed in financial stuff, however, come up. I'm going to try to explain it. So balance of payments is the record of everything that moves in and out of a country, you know, so that's goods, that's services, that's money, it's stocks. When I say it tracks Everything, right? It's a record of everything. That means it's recording both sides of a transaction. So what does that mean? Okay, imagine a receipt, right? It's a receipt for a burger. You have bought one hamburger. On the receipt is the thing you bought the burger and how much it cost, which is the money you pay for it. Balance of payments tracks both the burger and the money you paid for it because it tracks international trade, right? It's tracking international movement of stuff. And because both the burger and the money changed hands across borders, right? It tracks both of them. And that is why when you put all the credits and debits from both accounts together, it adds up to zero, right? Because you know, think, think about like the, the net transfer of funds on that burger, right? On the one hand there is the burger and on the other hand there is, you know, how much money you paid for the burger and those two things are equivalent, right? The value of the burger is how much it's worth. So okay, that means that in the accounting of it, right, the account on the receipt which shows both of these things is balanced because it's tracking both them, right? And this is the same way it works for an investment. You buy shares of a company. So, okay, there's the money for the shares and the shares themselves and they're both being tracked and they both go into the record that balance of payments keeps. So there are some convoluted things about this. And this is the reason why you need to combine both accounts instead of each account being balanced by themselves. Because sometimes the record of the burger goes in one account and the record of the money for that burger goes in a different account. This is convoluted. It's because of like how income is classified. It's a mess. You can go read the Reserve bank of Australia. But that's why you need both accounts together to get the balance of payments, right? Because both the burger and the money for the burger are in the balance of payments somewhere, but they might go in different accounts. So you need to put them together and that's how you get the balance of payments. And see, that's why it's called the balance of payments, right? They balance out. See, now you're getting it. Now you're getting it. This is why it always balances out to zero, because it's the balance of both the money and the object, right? So sharp eared listeners may be going, wait, hold on. So section 122, which is where the tariffs are from, is about a deficit in the balance of payments. How can you have a deficit if it always balances out to zero? And the answer is, technically speaking, you can't. So okay, what the fuck is going on here? Why is Trump using and Trump specifically is claiming that there's a balance of payments deficit and there's a crisis in order to impose these tariffs. So what is going on here? Why does this law exist? You will find out after these ads. Woo Cliffhanger A.
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Shop the Sherwin Williams spring sale and get 35% off paints and stains March 13th through the 23rd. Whether you're refreshing your interior or exterior, we've got the colors to bring your vision to life. And with delivery, getting everything to your door is easier than ever. Shop online to have it delivered or visit your neighborhood Sherwin Williams store. Click the banner to learn more. Retail sales only some exclusions apply. See store for details. Delivery available on qualifying orders.
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I'm Clayton ECKERD and in 2022 I was the lead of ABC's the Bachelor.
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Unfortunately, it didn't go according to plan. He became the first Bachelor to ever have his final rose rejected. The Internet turned on him.
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If I could press a button and rewind it all, I would.
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But what happened to Clayton? After the show made even bigger headlines. It began as a one night stand and ended in a courtroom with Clayton at the center of a very strange paternity scandal.
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The media is here. This case has gone viral. The Dating Contract Agree to date me, but I'm also suing you. Please. Search Warrant this is unlike anything I've ever seen before.
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I'm Stephanie Young. This is Love Trapped. This season, an epic battle of he said, she said and the search for accountability in a sea of lies. I have done nothing except get pregnant by the Bachelor. Listen to Love trapped on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
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So to explain what is going on here, we need to take a detour back in time to when this was written. This act was written in 1974, but we need to go back a little further to 1971. Now, in 1971, Richard Nixon makes probably the most consequential in a macro sense change to like how currency functions on a global scale in probably half a millennia when he pulled the US off the gold standard. So what does this mean? It means that Nixon ended what was called dollar convertibility, or the ability to go to the government and trade your dollar for a certain amount of gold. So this fixes the value of the dollar to the value of gold. So the value of your currency is sort of relatively constant in that, like it's this much gold, right? But it means that your macroeconomic policy is constrained by your gold supply. So why did Nixon take the US off the gold standard? And what does this have to do with balance of payments? Surprisingly everything. So, okay, what I've been describing about balance of payments, I've been describing modern balance of payments. If you go back and read stuff from the Fed from this era, when they talk about balance of payments, they're talking about flows of gold. In this period, every dollar that leaves the country represents an amount of gold. And the more of it that leaves the country, the more pressure that puts on the US gold reserves because, you know, there's less and less of it. This is what they're talking about when they talk about balance of payments right now. What's, what's interesting here, and this is something that's important for our modern purposes, is that the problem that the US was facing in the 50s and 60s that causes Nixon to do this when they're talking about having balance of payments deficits, which they are in this period, right? And this is why this law is written, is because this is a period where this stuff is talked about. The problem isn't a trade deficit, right? And this is very important. Trade deficits and balance of payments deficits, not the same thing at all. In fact, in this whole period, when the US is running these massive balance payments deficits to become a problem, they have a trade surplus, right? They have a trade surplus. So, like, okay, how are they, like losing gold then, right? Like, how are dollars flowing out of the country? Well, it turns out that what's actually making this a balance of account deficit, where, like, dollars are leaving the economy, which means Gold's leaving the US's vaults, is that the US is spending too much on its military. It's always military spending. It is always fucking military spending. Holy shit. It's the reason everything is broken. It's, it's, it's literally just always military spending. We're spending too much gold on the damn military, right? So the deficit, and we're talking about a balanced payments deficit. The actual deficit is that in order to pay for wars and to do military bases, they are spending money in other countries. And this is technically like part of the balance of payments, right? Because it's money leaving the country. And you know, like, technically speaking, the balance of payments as we've been talking about it, right? Like the account is balanced, but we keep spending dollars in order to obtain military bases, and then also in order to bomb Korea and then Vietnam. And the dollars have to come from somewhere. Now, again, the dollar at this point is gold. It represents a fixed amount of gold that the U.S. has. And those dollars are coming from the U.S. government. So that, that's what the actual, quote, unquote, deficit is in this case. Right? You will see this described as like, oh, my God, they're paying for stuff from the current account, from the capital account. No, no, no. Technically, yes, but like, like, what's, what's actually happening here is that the U.S. right, it's gold leaving the country because the U.S. is having to buy shit for military bases, right? And it's not getting enough gold back from trade to replenish the amount of gold that the US is spending on these military bases. Now, in theory, this is fine because it's technically speaking, you're spending dollars, and as long as no one tries to actually convert those dollars into gold, you'll be okay. Enter one Charles de Gaulle, President of France, who begins to, en masse, convert American dollars into gold in order to end the dollar's reign as the world reserve currency. Because he was pissed off at the US Running the world. This is not like Charles de Gaulle. Anti imperialist. De Gaulle does not want, like, the end of imperialism. De Gaulle wants there to be equal footing or more equal footing between the different imperialist powers. Right? He just wants France to be like a major world power, imperialist power as well. Right? The power the US Gets from being the world reserve currency is extremely important. So what is the reserve currency? The reserve currency is the currency that, like, all global trade is done in. And because it's the currency that all global trade is done in, all of the world's central banks have to hold like, a bunch of that currency. Right? And that's why it's called the reserve currency. But I say all of the world's central banks have to hold it, except for the United States, which does not have to hold dollars because it's our fucking currency. And if we want more, we can just hold print more, right? So this is technically called, like, seniorage privilege, but like, the power of this right is enormous. And the dollar status as the reserve currency is actually really important to us in terms of explaining these sort of balance of payments, deficits and crises. So, okay, here's the St. Louis Fed on why countries have to hold world reserve currencies. Quote, governments and or central banks keep, you know, like, reserve currency on hand for several reasons, including exchange management, insurance against sudden Loss of ability to pay for imports caused by a halt. Capital inflows such as foreign direct investment to the domestic market. Foreign purchases of domestic stocks or bonds or domestic borrowing from the rest of the world. Insurance for other economic contingencies such as wars or natural disasters. Now, the second one is what's of concern to us, right? It's insurance against sudden loss of ability to pay for imports. And that's what's commonly known as a balance of payments crisis in the current day, when you run out of dollars to pay for your imports or to pay for your foreign debt, which is a real issue too, right? Usually your money goes to the foreign debt and then you're out of currency and then you can't, you know, like, import more shit. This is a balance of payments crisis. And they're actually pretty common or decently common in a bunch of developing countries. And they are almost always completely catastrophic. It's one of the foremost causes of modern revolutions because when you have one of these balance of payments crises, you can't afford to fucking import things because you don't have enough dollars. You can't import oil or, you know, fertilizer or food because you don't have enough dollars to do it. And your government has gone through all of the dollar reserves, as I talked about in the ed. Sri Lanka is probably the most recent example. The country, you know, just ran out of dollars to purchase shit with. And the ensuing unbelievably hideous shit that everyone had to suffer through caused people to burn down the President's fucking mansion. You will know, and I've said this before, you will know if the US has a balance of payments crisis, because you will see the smoke and flames outside of your window. And it's not just like Sri Lanka, right? Like the revolution in Sudan. Like, the reason that there's a civil war in Sudan right now to some extent, is because of one of these crises that set off a revolution. Even though, you know what usually happens in these cases, right, is that a country has one of these crises and then someone, usually the International Monetary Fund, will give them a loan, and so they will give them dollars in exchange for, you know, like turning the entire economy of that country into a debt servicing machine, which means, you know, like, taking food out of the mouths of babies to pay that debt back. And this also often causes revolutions, right? Like, so like Sudan had a balance of payments crisis in, in like 2018, late 2018, 2019, and they eventually got an IMF bailout deal. But, like, the price of bread increased by 250%. And people drove Omar Al Bashir out of power. However, comma, you will note that I have been saying that these crises are caused because countries run out of dollars. But we can't run out of dollars because those are United States dollars. We can just fucking print them. We literally cannot have this kind of balance of payments crisis because it's all our own money and we can just print shit in our own money. Jesus Christ. This is so silly. Losing my mind. Like, it's not possible. You can't do it. Oh my God. Now, however, why is the law like this, right? Like, why is there a law written talking about the US as if it could have a balance of payments deficit Again, like, right up until 1971 when Nixon took the US off the gold standard, it actually was possible to, you know, make the US Run out of dollars, because you could run out of gold. And this is what like de Gaulle was trying to do, you know, by like making the US convert all of his dollars into gold. But Nixon just said, fuck it, the dollar is a floating currency now. And since its value isn't pegged to a certain amount of anything else, right? And that's the way it's been ever since. We can't have these crises. Now, the countries that have these crises in modern day are ones that peg their currency to like a specific amount of dollars, right? And they tend to run out of their reserves trying to like stabilize the value of their currency by offering conversions of their currency into the dollar at the official rate by like letting people go convert their currency into dollars. But again, we can't have that because it's dollars. We owe shit in dollars. And also in order to have like a full on balance payments crisis where you can't pay for things, right, it requires no one to be like, willing to lend you money. And it's like, okay, like, who is not going to lend the United States of America money? Like, are you kidding me? This is, this is the fakest crisis of all time. This bill, however, was passed again in like 1974, and it was only three years after the US was off the gold standard. And so people were like, okay, we're going to do this thing in case we ever go back to a situation where this stuff is possible. But right now, like, we literally structurally cannot have a balance of payments crisis. Like, we can't have one. You can't have a balance of payments deficits. This is not the same as a trade deficit. Trump is trying to argue that so we have a trade Deficit. Our Currents account, which is like the trade account, is like 4% below balance. But then if you look at the capital account and you put them together, it balances, because that's just how it works. Oh, that means we're in trouble and. Nonsense. Absolutely. Bullshit. He's also claiming that there's like, fundamental international payment problems, which, like. No, there aren't. Because fundamental international payment problems means you can't pay for your imports or like, your debt. And if we weren't able to do that, you would all know. So they're going to lose this lawsuit because this is the fakest crisis that has ever existed. And now you know how fake it is and also what balance of payments is. You know. Okay, I'm going to close on a story about this, which is that there is a scenario in which this knowledge has actually saved countries before. And specifically, like, the country that this saved was Cuba. There's like the Cuban revolution, right? And immediately after the Cuban revolution, the government, it's not, like, clear that they're communist yet. There's this very, very short window where it's like, not quite entirely clear what the fuck is going to be going on with this new, like, Cuban government. And the government sends Che Guevara to the US to negotiate with a bunch of American banks, right? And Che Guevara actually understands this stuff, right? He knows what balance of payments is. He knows. He's able to like, talk to all of the sort of Manhattan bankers who are talking about this stuff on their terms, right? And like, they literally, literally the line they say about him is like, yeah, he talks like a banker, right? He understands balance of payments. He understands all of this stuff. And what he's able to do, and this is critically, like, why the nation of Cuba, like, like why the Cuban revolution succeeded, was that he was able to get the US to give him all of his gold, like, because he was able to convince these bankers because he understood what they were talking about in their language, and he was able to convince the US government to get him all this fucking gold because he understood how this shit works. And that's why, like, Cuba was like, functional as a country after that, because they had managed to get all of their gold reserves which previously had been being held in the U.S. so, you know, you never know when you too might be at the head of a better revolution or you might be the one person in, in, in the new revolutionary coalition who understands what balance of payments is. And you too can get your gold out of the United States before the government realizes that you're communists and like, would have, like, locked it down and frozen it and taken the gold. So this is. But It Could Happen Here, the podcast that helps you take your country's gold reserves. Like Che Guevara. Oh, It Could Happen Here is a
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production of Cool Zone Media.
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For more podcasts from Cool Zone Media, Visit our website coolzonemedia.com or check us out on the iHeartRadio app, Apple Podcasts, or wherever you listen to podcasts. You can now find sources for It Could Happen Here, listed directly in Episode Descriptions. Thanks for listening.
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This is an iHeart podcast.
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Guaranteed Human.