Ep 349 | Trump’s Tariffs Are Really About Executive Power | Guest: Phil Magness

Summary

Kibbe on Liberty Ep 349: "Trump’s Tariffs Are Really About Executive Power"

Host: Matt Kibbe (A), Free the People
Guest: Phil Magness (B), Independent Institute
Date: September 10, 2025

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Episode Overview

Matt Kibbe welcomes economic historian Phil Magness for an incisive discussion on the recent court decision overturning Trump's tariffs. More than a policy quarrel about trade, the episode explores deeper themes of executive power, the cyclical abuse of "emergency powers," and the mounting influence of authoritarian impulses on both the right and left. Magness connects the logic of COVID-19 lockdowns to the justifications for new tariffs, warning that unchecked executive authority—regardless of party—poses a long-term threat to constitutional government and free markets.

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Key Discussion Points & Insights

1. Setting the Stage: Phil Magness’s Work and Libertarian Traditions

• Phil’s New Role: Magness updates listeners on his leadership in research at the Independent Institute ([00:59]).
• Taste Test: Echoing Kibbe’s show's tradition, they share a special Friedrich Hayek edition American rye whiskey, reflecting on how even “pro-America” products rely on international supply chains ([01:44]-[03:05]).

2. Roots of Executive Overreach: COVID, Emergency Powers, and Authoritarian Drift

• COVID Lockdowns as Precedent: Discussion revisits the start of the pandemic, highlighting how emergency powers invoked since 9/11 enabled lockdowns with minimal public debate ([03:05]-[04:38]).
  • "The original enabling acts... were passed after 9/11... Suddenly we got another type of pandemic. Every governor in America was basically handed a power by the president to declare lockdowns." – Phil Magness, [03:42]
• Hayekian Critique: Kibbe frames his skepticism of pandemic central planning through Hayek’s insights on the impossibility of top-down knowledge ([04:43]-[05:05]).
  • "A central pandemic plan is no different than a central economic plan in many regards." – Phil Magness, [05:11]
• Public Choice Perspective: Even if government had the right knowledge, Magness notes, “they would not have the incentives necessarily to act in our interest instead of theirs” ([06:58]-[07:52]).

3. Authoritarianism Across the Spectrum: "New Right" and Post-Liberal Thought

• Curtis Yarvin & the "New Right": Magness exposes the philosophical roots of the new nationalist right—suspicious of democracy, skeptical of markets, and pining for strongman politics ([09:24]-[15:33]).
  • "They actually don't like the American founding. Yarvin rants and raves against that." – Phil Magness, [09:24]
  • Notable Quote:
    "Covid came along and they saw, ah, this is our aha moment. We can shut America off from the rest of the world..." – Phil Magness, [10:05]
• National Conservatism and Protectionism: They trace the ongoing influence of Thomas Carlyle and Henry Clay on this faction, connecting it to contemporary dismissals of libertarian economists.

4. Trade Policy Gone Wild: Trump’s Tariffs and Executive Power Expansion

• The Legal Break: Unlike previous presidents, Trump sidestepped established trade law procedures to use the IEEPA (“International Emergency Economic Powers Act”), which was designed for foreign sanctions, as a tool for sweeping, global tariffs ([19:36]-[22:02]).
  • "No president had ever claimed the power to rewrite the entire US Tariff schedule." – Phil Magness, [19:47]
• Why This Matters: The IEEPA’s broad, vague language allowed tariffs without the usual procedural limits, congressional oversight, or justification. This move, far from targeted, functioned as an executive power grab ([21:29]-[22:02]).
• Legal Challenge: Recent court rulings found this use of IEEPA unconstitutional and an example of illegal delegation, but appeals have delayed a final outcome ([22:47]-[26:25]).
  • "This is an illegal and probably unconstitutional claim of IEEPA's powers by emergency decree." – Phil Magness, [22:47]

5. Economic and Political Fallout: Who Actually Pays For Tariffs?

• Tariffs as a Domestic Tax: Countering Trump adviser claims that tariffs are taxes on foreigners, Magness explains that U.S. importers pay, costs are passed on to U.S. consumers, and revenues offsetting tax cuts are functionally tax increases ([28:14]-[31:04]).
  • "I've got news for them, but you just acquired some scotch whiskey... I now have a $56 tariff bill that Trump has ordered to be collected on mail order packages." – Phil Magness, [30:47]
• Retaliation and Economic Entanglement: U.S. industries are deeply tied to global supply chains. Trade wars backfire—e.g., bourbon cask and rye whiskey trade with Canada and Scotland becomes collateral damage ([33:31]-[35:19]).
  • "It's all intertwined and it's hard to get people to appreciate that American companies can't create American jobs unless they have access to products from other countries." – Matt Kibbe, [35:19]-[36:02]

6. Cranks, Navarro, and the Intellectual Weakness of Trump’s Protectionism

• Peter Navarro’s Influence: Navarro is painted as ideologically suspect (“degrowther,” anti-market, formerly a Democrat), with a penchant for “command and control” industrial policy reminiscent of Perón or Mussolini ([36:58]-[39:34]).
  • "He's a particularly cranky advocate of the kind of industrial policy that you would see in fascist economies." – Matt Kibbe, [37:19]
• Diminishing Role of Market-Oriented Voices: Kibbe mourns the disappearance of pro-market economists from Trump’s inner circle. Instead, marginal or academically suspect advisors shape policy ([41:20]-[43:11]).
  • "Trump in his gut for some reason loves tariffs... But what he has done in the second term is he surrounded himself by the cranks and crackpots..." – Phil Magness, [39:34]

7. Legal Prognosis & Long-Term Implications

• Supreme Court Outlook: Given recent Supreme Court precedent on executive overreach (student loans, EPA), originalist justices should decisively rule against Trump’s approach, but the final outcome is uncertain ([50:25]-[54:00]).
  • "Any conservative judge should look at that and say... this is so far out of skew, out of boundaries of what the US Constitution permits, that why is this even a case?" – Phil Magness, [50:25]
• Danger of Executive Precedent: The gravest concern isn’t tariffs themselves, but the door this opens: if unchecked, future presidents (from either party) could declare any issue (climate, guns, inequality) an "emergency" and wield sweeping powers with little accountability ([54:00]-[57:56]).
  • "If Trump's legacy is an expansion of executive power, what are you going to do when AOC is president?" – Matt Kibbe, [54:41]

8. National Conservative Thought Leaders: Orrin Cass and the Return of Smoot-Hawley

• Orrin Cass and Revisionist History: Cass’s advocacy for high tariffs and protectionism echoes economic rationales discredited since the Great Depression ([58:14]-[63:28]).
  • "This wrecks the entire United States economy... that was considered for the last 90 years to be the death knell of the Henry Clay American system ideology. Well, here we are 90 years later... we need to go back to that." – Phil Magness, [61:30]-[63:28]
• Political Repercussions: Smoot-Hawley destroyed the Republican Party for a generation—an eerie parallel for today’s GOP ([63:28]-[64:08]).

9. A Glimmer of Hope and Lessons from History

• Hope for Free Market Voices: Kibbe and Magness hope that a broad, liberty-oriented coalition will reassert itself if the Supreme Court strikes down the current tariff regime, freeing the GOP to focus on positive deregulation and tax reform ([64:55]-[66:37]).

  • "The greatest gift that the Supreme Court could give to the Trump administration is to cut off the tariff agenda, to stop it in its tracks." – Phil Magness, [65:45]

• A Toast to Resistance: The episode closes with a salute to the Whiskey Rebellion, as a symbol of resistance to government overreach ([66:55]-[67:24]).

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Notable Quotes & Memorable Moments (with Timestamps)

• "A central pandemic plan is no different than a central economic plan in many regards."
  — Phil Magness, [05:11]

• "They actually don't like the American founding. Yarvin rants and raves against that."
  — Phil Magness, [09:24]

• "No president had ever claimed the power to rewrite the entire US Tariff schedule... he says, I'm going to use the IEEPA... to put a tariff on every single country on earth."
  — Phil Magness, [19:47], [20:14]

• "I've got news for them, but you just acquired some scotch whiskey... I now have a $56 tariff bill that Trump has ordered to be collected on mail order packages."
  — Phil Magness, [30:47]

• "Trump in his gut for some reason loves tariffs... but what he has done in the second term is he surrounded himself by the cranks and crackpots..."
  — Phil Magness, [39:34]

• "If Trump's legacy is an expansion of executive power, what are you going to do when AOC is president?"
  — Matt Kibbe, [54:41]

• "The greatest gift that the Supreme Court could give to the Trump administration is to cut off the tariff agenda."
  — Phil Magness, [65:45]

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Timestamps for Key Segments

• [00:59] — Phil Magness’s new role and research focus at the Independent Institute
• [03:05] — COVID lockdowns, emergency powers, and loss of constitutional limits
• [09:24] — Curtis Yarvin, post-liberal new right, and origins of right-authoritarian thought
• [17:01] — Trump’s targeted tariffs versus expansion via IEEPA
• [22:47] — Legal challenges and unconstitutional delegation of Congress’s tariff power
• [28:14] — Tariffs in the “big beautiful bill” and impacts on consumers
• [33:31] — Interdependence of international trade: bourbon, scotch, and whiskey barrels
• [36:58] — Peter Navarro and the intellectual vacuum in protectionist advocacy
• [50:25] — Supreme Court prospects and the constitutional stakes
• [54:00] — The real issue: unchecked executive emergency powers
• [58:14] — Orrin Cass, intellectual roots of protectionism, Smoot-Hawley parallels
• [63:28] — Political consequences of protectionism in U.S. history
• [65:45] — Why ending the tariffs in court could save the administration and economy

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Episode Tone & Final Thoughts

With a blend of humor, skepticism, and economic rigor, Kibbe and Magness champion constitutional limits and economic sanity over populist-authoritarian excess on both the left and right. The episode closes on a sober, if hopeful, note, saluting the American tradition of challenging government overreach—whether it comes disguised as protectionism or pandemic-era emergency measures.

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Useful for the Liberty-Curious & Political Observers

This robust episode provides listeners with a historical, legal, and economic context for today’s trade and governmental power debates, while warning of the dangers in expanding executive powers “even when it’s your guy”—because sooner or later, executive precedent will be wielded by the opposition. A must-listen (or read) for anyone worried about the future of constitutional government, market freedom, and the new ideological currents shaping America’s right.

Transcript

[A]

Welcome to Kibbe on Liberty. I'm talking to my friend Phil Magness about the recent court decision overturning Trump's tariffs. But more fundamentally, what happens with the expansion of executive power when it falls into exactly the wrong hands? Check it out. Welcome to Kibbe on Liberty. Phil, good to see you.

[B]

Yeah, good to be back.

[A]

I think you have a new position since the last time you've been on. So update everybody about what you're doing at the Independent Institute.

[B]

I do. So I joined the Independent Institute about a little over a year and a half ago, where I'm the David J. Thoreau Chair in Political Economy, and it's basically to head up the research side of the operation for listeners. They may know us. We're based out in Oakland, California, but I'm here in the D.C. area because we maintain a pretty active presence in the D.C. political scene.

[A]

Nice. And you've been doing a lot of work on the legality of tariffs.

[B]

Absolutely.

[A]

And you're. You're like a font of research. I can't imagine even trying to keep up with the amount of stuff that you produce. And I want to get into the emergency orders and the court case and all that. But importantly, we have an American whiskey here.

[B]

Indeed.

[A]

And I think one of the motivations of President Trump is that we only drink American things.

[B]

Right.

[A]

And I'm sure this has probably been finished in port barrels or something, so it's probably not truly American. But this particular bott that you brought today was the Friedrich Hayek edition that we produced or at least sourced for the Mont Pelerin meeting in New Hampshire. Was that two years ago?

[B]

Yeah, 2023.

[A]

And you were one of the host organizers.

[B]

Indeed.

[A]

So let's drink while we can before they tax us.

[B]

Exactly.

[A]

And this brings back a celebrated tradition of early Kibion liberties, because this was very meant to be a drinking show, not a not sure. So, cheers. And you found this barrel. This is a beautiful rye whiskey.

[B]

Yep. We did sampling of dozens of barrels to narrow it down to this one. Good zing to it.

[A]

So you're an empiricist. As an economic historian, you're willing to get your hands dirty and get into the data.

[B]

It is to do the actual tasting. I exercised a little bit of authority of steering the others toward the barrel. I wanted.

[A]

So I want to talk about tariffs, but oddly, I think the story in some ways starts with COVID authoritarians going back to at least. Well, I guess we'll start in March of 2020, when everybody was paying attention and I went back and looked. And the first show we ever did together was April 1, 2020, at a time right in the thick of it, at a time when there was like a dozen of us fighting COVID lockdowns. And I don't think any of us had really gotten into the epidemiology at that point, because it just. That wasn't the conversation.

[B]

It was all about the emergency power that just seemed to kind of come out of nowhere. And, you know, the original enabling acts for these were a lot of things that were passed after 9, 11, when everyone was afraid of anthrax and pandemics that way. Suddenly we got another type of pandemic. And every governor in Americ was basically handed a power by the president to declare lockdowns. And I think 42 out of 50 of them did.

[A]

And at the time, you had a Democratic governor in Virginia.

[B]

Yep.

[A]

And you were not allowed to leave your house.

[B]

Exactly.

[A]

Ostensibly, according to what you say in this interview, that you could get thrown in jail for leaving your house for.

[B]

Not being an essential industry. That was the whole thing. And it was bizarre just how arbitrary they drew that line, and yet most.

[A]

Of America experienced it, and yet everybody denies that those sorts of things even happened.

[B]

We didn't lock down hard enough the narrative now, and that's why we didn't defeat Covid.

[A]

And there was. I mean, one of the ways that I was able to get the basics right from day one were the economic filters that I use that come from Friedrich Hayek and his critique of scientism and this assumption that government officials, given the power, would have the knowledge.

[B]

Right, right.

[A]

Would have the knowledge to be able to reorganize things in this particular instance, to keep us safe.

[B]

Yeah. Yeah. A central pandemic plan is no different than a central economic plan in many regards. And that was my own entry into the whole Covid debate was that imperial college model that everyone was citing, including Fauci, as the basis to lock down. And it looked like SimCity on steroids with epidemiology thrown in of a dictator with a central plan on how to fix the entire world and make it disease free. And it took 10 seconds of looking at this thing and saying, this is not based in reality. It's not going to work.

[A]

Yeah. I'm producing a series called the COVID up, very much inspired by that first year of just banging my head against the wall trying to get people to pay attention to this. And we just wrapped up filming for the final episode with Matt Ridley.

[B]

Oh, nice. Yeah. He was another early person that brought some of that alarm in.

[A]

He was an early dissident who happened to be sitting in the House of Lords. I actually learned this story through you and your work.

[B]

Right. When he was questioning Neil Ferguson.

[A]

Yeah, yeah.

[B]

And Ferguson lies to him.

[A]

And now we know. You know this, this is part of what my series has uncovered is you mentioned going all the way back to the special emergency powers created after the 911 attacks. And, and Fauci's power actually comes from Dick Cheney.

[B]

Exactly.

[A]

As, as the guy that's, that's given this extraordinary power. The reason he's the most well paid guy in government is because he's not a public health official at all.

[B]

No, he's a. He's a politician.

[A]

Yeah, he's a. Or he's like the, the guy that's going to do this mad science experiment to protect us from the worst bioterrorist threat out there.

[B]

Yeah. The J. Edgar Hoover of epidemiology overlaid with rampant abuse of emergency powers.

[A]

And there's Fauci. And somehow we ended up creating this or at least transporting this to Wuhan, China. And like, explain to me how this keeps us safe. I don't know. I don't know. But, but the other half of the filter is basic public choice economics. Even if politicians and bureaucrats and elected officials and all these guys that are in charge to keep us safe, even if they had the knowledge, the infinite wisdom, they would not have the incentives necessarily to act in our interest instead of theirs.

[B]

They're operating in the real political world, the political scene that we have, not the one that we imagine we would like to live in. And that's always the case. I mean, you can come up with an ideal epidemiology system or model for a politics free universe, but that universe doesn't exist.

[A]

Yeah. And these are like, for me, core principles when I work in policy. When I look at a radically uncertain situation and I think about what could the government do? What should it do? I ask these two questions. Do they have the knowledge and can they be trusted with the power? And I thought that this was basic conservatism. It's certainly Libertarianism 101.

[B]

And that people would learn that lesson after seeing it abused is the other thing.

[A]

Yeah. And yet here we are, it's Groundhog Day. And this. You just wrote a piece for Reason magazine. I think it came out yesterday. Yesterday? Yeah. About the maga, Right. The New Right influencers. I think that's better than maga because I think.

[B]

Right. There's some overlap, but it's certainly a.

[A]

Sector and there's a lot of pretenders out there who are now all outraged about Fauci and all outraged about Democratic governors locking you into your home. But at the time you exposed this guy that I'd never heard of before, and at the time they were more authoritarian than the Democrats.

[B]

Absolutely.

[A]

Because again, they thought this was a special occasion, this was such a threat to America that we needed to throw away any limits on government power and.

[B]

Trust the experts and make them dictators for the month or the year or whatever they needed to defeat the pandemic.

[A]

Who is this guy?

[B]

Curtis Yarvin and he blogs as Mencius Moldbug. And he's considered like this pop Internet philosopher for this so called new right or the post liberal right. And it's a faction of maga. It's not the whole movement by far. In fact, I argue they're a very small minority that exercises an outsized influence, but their whole thing is. So they're very into nationalism. They're also extremely skeptical of democracy, and not just democracy and the pure whims of the people, democracy in the American constitutional norm sense. So that they actually don't like the American founding. Yarvin rants and raves against that. And on top of it, they have extreme disdain for markets and commercialism. Covid came along and they saw, ah, this is our aha moment. We can shut America off from the rest of the world, we can cancel travel, we'll disrupt trade, we can tighten down and basically get our rule by expertise that we are the anointed ones. And they thought because they were on the right that they'd have access to do this through Trump. So very early on in Covid, through about March or April of 2020, Yarvin and some of these other post liberal anti democratic right types are all in favor of lockdowns even more extreme than what we had. But the problem is they weren't anticipating Fauci being there to compete with them for the same mantle. And Fauci really kind of displaces them and they go through a, a different moment later in the summer and they reinvent themselves as anti lockdowns because if they're not going to be able to control the lockdowns, if Fauci's got that power, they don't, they don't want anything to do with it. And yet here they are today, all of this narrative about the experts failed us. And yes, the experts absolutely did fail us during COVID but they were the experts that these Guys were pushing up and they've taken that and they said, well, we can't trust experts because they failed us during COVID Therefore, all these economists that are telling us that problems will come about because of tariffs, they're experts too, and we should discard them. Even one of these guys that I quoted in the Reason article, he had this lengthy tweet back on Liberation Day with tariffs. Well, all the free traders were lockdowners. And I'm sitting there, wait a minute. I wasn't the lockdowner.

[A]

I was Mike Cernovich.

[B]

Yeah, yeah, exactly, exactly.

[A]

And I thought that that was like almost exactly opposite. And Mike Cernovich, some of my viewers will certainly know who he is. I follow him primarily because he and other MAGA influencers have been spending a lot of time picking on Thomas Massie.

[B]

Oh, yeah.

[A]

Going all the way back to Thomas Massie insisting that there actually be a roll call vote on the $2 trillion bill to.

[B]

Exactly.

[A]

To send people a bunch of checks in exchange for forcing them to give up their jobs and stay home. And, you know, going all the way back to Massie challenging Trump, then fast forwarding to the big beautiful bill and this ongoing thing, and all of these MAGA influencers are picking on Thomas Massie. But Massie was the original anti lockdowner.

[B]

Yeah. The original voice in Congress. Someone who was willing to stand up and say, wait a minute, something wrong?

[A]

What's going on here? Thank you for joining me today on Kibbe on Liberty and for being part of our fiercely independent audience. Every week, my organization, Free the People, partners with Blaze TV to bring you this show. My guests bring smart perspectives on everything from current events to timeless philosophical debates. If you like what you hear, go to freethepeople.org kol and support Kibbe on Liberty so we can continue to produce these honest conversations with interesting people. Now, let's get back to it. So everything's upside down.

[B]

Yeah.

[A]

And, you know, you were describing the reaction. What's this guy's name again? I should have.

[B]

Yarvin.

[A]

Yarvin. His solution to Covid in practice sounds exactly like Nicolas Maduro at the height of the starvation in Venezuela three or four years ago. Now, he had an economic advisor from Spain, some Marxist guy from Spain. I've forgotten his name, but Maduro called him the Jesus Christ of economics.

[B]

Yeah, I remember that whole.

[A]

What that implies. And their entire theory as to why Venezuelans were struggling to get food was outsiders. Yeah, yeah. There was capitalist outsiders that were.

[B]

That are constantly subverting everything.

[A]

So if we Just close the borders and work within. Somehow this magic is supposed to happen. And in a lot of way the national conservatives have the same mindset, right?

[B]

Very much so. And they draw on an older intellectual tradition. So they all go back. They love Thomas Carlyle, who's this 19th century theorist out of Great Britain. He's most famous or infamous today because he's a pro slavery philosopher. But he also had disdain for commercialism of the industrial age. He thought that the culture was being lost by the flood of all these cheap and nasty products that were coming from all over the world. And his solution was basically you shut it all down, you cut it off. And Yarvin and some of these other new so called philosophers today, they've just discovered Carlyle and adapted him to the 21st century. They still have the same disdain for commercialism. They dislike supply chains. They view goods coming from abroad as corrupting the American culture. And it's like this libertarian free market economics have become their boogeyman to blame for everything. It doesn't really matter what the issue is. They'll figure a way to start attacking libertarian economics. There's a school shooting. Oh, those libertarian economists must have caused this. And I said that quite literally. The school shooting that happened a week ago. They were all over the Internet blaming the libertarian economist. And there's no connection.

[A]

There's a gun grabbing streak. There is again, it's a. So it's a top down central planning. I'm your father. I know better than you.

[B]

Shut up and get in the house. As long as they are in charge. And they all think that they're going to be the equivalent of medieval dukes. I joke that the only thing they have in common with the medieval monarchs and hereditary aristocrats is the inbreeding. But that's about the. They have this vision of society as if they are going to be the ones that are always in charge. As long as we enact and enable them with power, they're going to be the ones that are our betters and tell us how to run things.

[A]

There is this naivete that somehow they've looked at the democrats and their rationale for embracing political power is that, well, those guys do it. So we have to. And the assumption is the strategy is we're just going to always win.

[B]

Yeah.

[A]

And there will never be another Democrat.

[B]

There will never be another Democrat. The powers we create are only for ourselves. No one's ever going to challenge us because. And they'll overlay this with conspiracy. They think that every Democrat win. That's occurred in the past 20 or 30 years has been because of voter fraud or because some other thing that they claim that they can control that now we're going to fix and therefore we're never going to lose an election again.

[A]

Which brings us full circle, I think, to the critique of the Trump administration's approach on tariffs, which is certainly chaotic. And whenever I am criticizing an administration, Republican or Democrat, I always try to find a path towards better policy. Sure. And so when Trump originally announced the list of reciprocal tariffs, which itself was sort of a mathematical fiction. Yeah. I'm like, okay, maybe hopefully there's some he's negotiating to the madness. Maybe he wants to negotiate tariffs down in the EU and other places because every country to greater or lesser extent.

[B]

Is some sort of residual protectionism.

[A]

I mean, there's sometimes worse than that. There's exceptions like Iceland is not particularly protectionist because they can't survive without trade. And I was hoping that is true, but it doesn't look to be true.

[B]

That's exactly it. And I think it's helpful. The contrast where Trump was in his first term versus where he is today, he was still a protectionist. I mean, this is like the one political constant of Donald Trump's political philosophy. Going back to the early 1980s, he's believed in tariffs and tariff protectionism. A lot of people on the right free market world are willing to pinch their nose and saying, okay, well, he's also for tax cuts and deregulation. So there's always a trade off. Part of that's the strategic calculation. But in his first term, his tariffs were much more directed and narrow. They did have an ostensible foreign policy objective because he went after China. I can disagree with him on that particular policy, but at least he had a rationale that was rooted in, well, China's engaged in militarism abroad and this is a tool we can sanction them with. And he did that through a route. So US Trade law is really complex, but there are all these provisions that Congress has adopted over the years that they allow the President under certain emergency circumstances that are met. And it could be a national security issue, it could be a specific industry is facing what they call unfair practices from abroad. And the President has all these clauses that he can invoke and say, we're going to put in for 150 days a tariff to counter this emergency or we're going to tariff this one industry to save the United States ability to manufacture steel. And that was always the rationale. Again, I disagree with it. On protectionist grounds. But it was legal when it was permitted under those clauses.

[A]

And by the way, bipartisan tradition, President's, as far back as I can remember.

[B]

Exactly.

[A]

Would invoke these powers. Ronald Reagan famously bailed out Harley Davidson.

[B]

Exactly.

[A]

And other things.

[B]

Yeah. So this is a time honored tradition of presidents and they always do it. It's right around election time. And they'll find an industry that's in Iowa or an industry that's in Pennsylvania or one of these swing states that matters or something that matters for the primary and that's what gets the tariff. But yeah, it was that kind of a tool. No president had ever claimed the power to rewrite the entire US Tariff schedule. So Trump gets to his second administration and most people don't really notice this nuance of it. He says, I'm not going to use any of these previous laws that granted me the power that other presidents have used. I'm going to invent a novel legal theory that says there's something called the International Emergency Economic Powers act, or iepa. He says, I'm going to invent this novel legal theory that says iepa, which is usually the law that's invoked to sanction Iran when it's building a bomb or sanction a foreign power abroad that has done something in the international arena that's militaristic. That was the purpose of it. He's going to say, well, I'm going to declare the trade imbalance of the United States is an international emergency, and I'm going to use iipa, even though it doesn't have a tariff clause in it. It doesn't even use the word tariff. He says, I'm going to use IIPA to put a tariff on every single country on earth. IEEPA does not have the same congressional oversight as these other laws do. It doesn't have the regulatory investigation that's required. It's not narrow around a single industry. It doesn't have a time limit of X number of days that it can be in place. So it's basically he can rule by executive order and rewrite the entire tariff schedule. And that's what he started to do on a liberation day back in April.

[A]

So to be clear, he could have done it the old way.

[B]

Absolutely. And no one would challenge him. I mean, we'd argue the politics, we'd argue, is this good economics or not? But we'd have that debate. There'd be votes in Congress, there'd be hearings, all the usual procedures. But he chose not to do that because it had Too many obstacles and requirements to meet. And it didn't allow the sweeping power where he can rule by, you know, he can decide on Tuesday that the rate's 25%. Thursday, he's mad at the ambassador and the rate jumps to 45%. And it's just a new executive order.

[A]

It's fascinating because I had Senator Rand Paul on my show several months ago. I forget the timing, but he was thinking as someone that is philosophically and economically and America first opposed to tariffs, and there's clear rationale for all those positions. He was like, unfortunately, Congress has ceded the president a lot of power on this stuff. He was thinking of the way Trump did it, and it's honestly quite reckless because the chaos of unwinding Trump's tariff regime for the Trump administration, for the interests that they have, is going to be incredibly chaotic.

[B]

And the longer it stays in place place, the worse it gets. If we go back to. So when Trump started using these powers, of course it gets challenged in court, and it's a very solid case. They filed it originally, and this is the VOS selections case, the one that's now headed to the Supreme Court, but it was filed in this obscure U.S. court of International Trade, which is a nationwide jurisdiction court created by Congress to only hear, basically, tariff disputes. Of course, these are never in the news. And suddenly this national constitutional implications case is in the news. And the lawsuit basically says the statute Trump is using to impose these tariffs does not sanction tariffs. It doesn't even mention the word. And if we were to interpret it the way that the president does, it would be unconstitutional because the tariff power is situated in Article 1 of the Constitution. It's granted to Congress, as Congress has the power to lay duties imposed in excises, as the impost is the tariff power. And this has been the case since 1787. Now, Congress, they grant some of that authority to the president, but it's a discretionary authority on Congress's own parameters. It's not, Mr. President, you get to go rewrite the tariff schedule that we've passed into law. It says, you get, here's the tariff schedule we've passed into law. You have within these parameters the ability to vary it. That's always been the historical approach, going back to the 1920s is when they started creating that power. And the Supreme Court reviewed it back then, and they said, okay, as long as there's an intelligible principle that's put in place around the statute, Congress can grant some of these powers to the presidency, but it's not a blanket license to do everything as Trump has interpreted it. So the court hears this case. It's a very quiet proceeding until they hand down their ruling. It's a 3, 0 ruling against the administration at the end of May that says this is an illegal and probably unconstitutional claim of IEEPA's powers by emergency decree. You've not met the basic constitutional standards. And they use arguments that are fundamentally conservative. They're originalistic. They are principles such as Congress cannot illegally and unconstitutionally delegate its power to an executive branch agency. They are principles that say on questions of major political and economic importance, Congress itself has to set the guidelines. The president can't interpret that. If you remember some of the Supreme Court rulings recently, this is how we struck down Biden's student loan emergency order. It's how we struck down the EPA's plan to phase out power plants that it deemed to contribute to global warming. These are major recent court precedents that said, no, the president cannot take powers that he infers from a statute that it doesn't grant them. And that's what the court ruled on. And they said, okay, this is unconstitutional. We are ordering you to stop. But the administration appeals and they're granted a stay. And that's been months of legal jockeying. But throughout those months, while the case is playing out in the court system, the Trump administration has not only continued to do the same unconstitutional behavior, they've ramped it up. We got Liberation Day 2.0 in August with a whole new set of rates. We've got all these tariff deals that Trump has negotiated again, all using the IEEPA power. So he's in a giant tangled mess today that had they stopped this back in May, we probably wouldn't be having this discussion.

[A]

I don't even understand some of the countries that he's targeting.

[B]

Right.

[A]

There's no sort of rhyme or reason to why.

[B]

Well, right. He often articulates the principle that we should be going after China as a competitor in the geopolitical arena. But then you slap a tariff on Canada, you slap a tariff on Britain, on the European Union, allied countries that are also fighting some of the similar political pressures of China. That doesn't achieve that foreign policy end. Then you start getting other people in the administration that are saying, well, we have a different objective with tariffs. This is to reshore American industries, to bring it home. Well, the economics of that doesn't work out. It turns out that American industries are harmed and penalized by the tariff through pass through effects. It hurts the export market of the United States. And we've seen ever since these went into place, US Exports have started to nosedive. Then he says, well, maybe it's not that we're in it for the tax revenue. And that defeats the entire purpose of the emergency decree. You can't decree an international trade imbalance emergency if you're just doing it to enact a backdoor multitrillion dollar tax hike.

[A]

Yeah, this gets back to Mike Cernovich's attacks on Thomas Massie because they really ramped up. Up. Every Trump loyalist has been going after Massie since Massie opposed the big beautiful bill.

[B]

Exactly.

[A]

And. And Massey and, and Rand Paul in the Senate. I. Yeah, they've been sort of the, the Batman and Robin in this quixotic fight against massive new debt. Yeah, but one of, one of the arguments, even. Even though it's technically not in the big beautiful bill, one of the arguments is we're going to get all this revenue from tariffs. And I'm like, revenue from tariffs? Isn't that just a tax increase?

[B]

That is exactly it.

[A]

So, like you're trashing these guys for opposing a bill that includes with all sorts of other stuff in extension of the existing tax rates.

[B]

Right.

[A]

Which everybody on our side supports. Yeah, but you're really offsetting this with a massive new tax increase.

[B]

Yeah, it's the spending side. And you look at all the White House Council of Economic Advisers projections they released on the one big beautiful bill. They all said, okay, well, we're increasing spending on all these other things, the pork that was thrown in there. And that was really the main conservative objection. We all wanted the income tax cuts renewed and made permanent. But all this other stuff is just to increase federal spending left and right to every pet project. Well, the way they funded that, they built into their budget calculations. They said, we can make this revenue neutral and therefore meet all of the different criteria that allow us to pass it under certain procedures by claiming that we have $2.8 trillion in tariff revenue coming in over the next decade. Now think about this. They've said the tariffs that are enacted through presidential decree, no act of Congress on an emergency power, are also intended to be permanent for the next 10 years and raise at least 2.8, maybe more trillion dollars in tax revenue. That's not a temporary emergency measure. This is a permanent rewriting of US Statute by decree. And there's the constitutional tension that's immediately come out of it.

[A]

If you made it this far into the show, it means I must be doing something right. Key beyond liberty is just one of the amazing products we create at Free the people. We tell emotionally compelling stories and produce educational videos for the Liberty Curious. Our award winning documentaries personalize all things liberty, independence, creativity, hard work, integrity and perseverance. After the show, check out our [e-mail] and if you like what you see, donate to support what we do. That's freethepeople.org now back to the show. And by the way, I'll butcher these numbers but if should the tax cuts had expired. Yeah, that was like 4 trillion, maybe 5 give or take scoring of this is a little bit questionable. So you're kind of offsetting the bulk of the so called tax cut with more taxes.

[B]

Right.

[A]

And by the way, like this, we went through this with Anthony Davies and some people, some of my conservative MAGA friends continue to insist that this is not a tax on us, it's a tax on them. I've got news for them, but you just acquired some scotch whiskey. You don't always drink American.

[B]

Yeah, exactly. I mean I order things from abroad, as do most Americans. You know, there are billions of mail order packages off of the Internet that come in when you do your Etsy order from Europe or your ebay from the uk. Well, I ordered some scotch whiskey just this week and it's going to be shipped to me under the normal procedures. But when UPS drops it off, I now have a $56 tariff bill that Trump has ordered to be collected on mail order packages.

[A]

This was a Trump executive order that repealed some sort of exemption for those types of interactions.

[B]

Yeah. So all the way back to 1938, Congress passed a law that said, you know, if you are doing small mail order packages from abroad, it's just not worth our time to collect the tariff. So they passed an exemption. It's called de minimis and it said anything valued under X amount if it arrives in the mail. So what? We don't care.

[A]

Yeah.

[B]

And that's been the law for we're coming up on 90 years. Most living people have always operated under this de minimis exemption. And then Trump, just out of the blue again using this emergency IEP of power right before Liberation Day 2.0 in August decreed that he was suspending the de minimis exemption as well on all packages coming in from abroad. So this means if you order a $5 item on eBay from Europe, it's going to arrive with a huge tax bill attached to it.

[A]

Yeah. So as, I mean you've seen Terry and I give this talk called Whiskey is Freedom And I've done plenty of empirical research myself on the subject of whiskey. And one of the things you learn about the American whiskey industry, particularly Kentucky bourbon, is that my, one of my favorite Kentucky bourbons is in fact finished by port wine barrels that are imported, probably from Portugal, but from other places as well. So this American producer cannot produce the whiskey that I love. Should trade wars escalate and the cost of importing those barrels be so much. But when you go to Scotland to drink Scotch whiskey, you discover that the vast majority, I'm sure that the numbers are overwhelming, are finished in ex bourbon casks.

[B]

Exactly.

[A]

So what does the American bourbon producing industry do when they can no longer sell their casks, which are no longer useful to them, but quite valuable? They can't sell them abroad to Scotland anymore and they also can't import the port barrels. And this is sort of a microcosm of, I think, the intertwined nature of American industry. Like we want to make cars in America, right? Well, we can't make cars in America without parts, materials.

[B]

Yeah. So Trump does not seem to understand just how thoroughly integrated international exchange is on almost every product of use, even things that are 100% produced internally in America usually have some sort of component from abroad. If it's an automobile, you're getting steel or aluminum or in some cases computer chips, different parts that are just made somewhere else abroad much more cheaply. And that's the reason why we're able to compete. Even you have something like the whiskey industry. And this is why both Scotch is being penalized if I try to implement it. I have a new tax, but American bourbon coming out of Kentucky is being penalized because other countries are retaliating against U.S. tariffs. So for example, one of the first things that Canada did when it was put in the crosshairs of the trade war is they went around to all their liquor stores and their, you know, their state operated liquor stores and they said, pull all the American products off the shelf. We're going to buy Canadian now. So you can get Canadian made rye whiskeys but you can no longer get Kentucky bourbon up there. And it's just pure protectionism, this tit for tat trade war stuff, all instigated by Trump putting tariffs in the first place.

[A]

By the way, one of my favorite Ryes, WhistlePig, an American company based in Vermont, I don't know where they're incorporated, but let's assume Vermont or maybe that's suicidal to incorporate anything in Vermont, but most of their rye whiskey is, is sourced in Canada. So what's going to happen to this beautiful American product like a gangbuster company? So it's all intertwined and it's hard again to get people to appreciate that American companies can't create American jobs unless they have access to certain other products that are, are only affordable in other countries.

[B]

Or if you like scotch, I mean, you cannot make scotch outside of Scotland. Very well.

[A]

Right. Well, I like coffee and Terry just ordered 20 pounds of coffee from Guatemala. Great cafe called El Grand Cafe. The guy that we met that works there is a member of the Mont Pelerin Society. So he's one of us. Best coffee in the world. I learned today when I groked it that apparently California is trying to grow coffee. I don't want to try.

[B]

Good luck to them.

[A]

I don't want to try it. And we're getting a beautiful storm in the middle of all this. So let's talk about some of these cranks that I think are influencing driving Trump because it goes back to this sort of authoritarian impulse. Peter Navarro, like nutty failed Democratic politician who's been running for office his entire life.

[B]

Yep.

[A]

A professor, I think of economics. Right?

[B]

Yeah, he's, he does have a PhD in economics, although, well, I question how he obtained that. So.

[A]

Well, I, I think, unfortunately, I think most PhDs in economics don't understand economics, but that's a subject for different day.

[B]

Well, he's exceptional in that regard, but.

[A]

He'S, he's a particularly cranky advocate of the kind of industrial policy that you would see in fascist economies. Yeah, I hate to use the F word, but you know, if fascism is government control of the means of production, and Peter Navarro has openly said again and again and again that it is the job of the federal government to provide the technology and support and resources.

[B]

So that America thrives, essentially.

[A]

Yeah, yeah, that's not conservative.

[B]

It's not conservative at all. You know, if anything that it resembles in recent memory, it's Peronism out of Argentina, which itself was a derivative of Mussolini style fascism back in the 30s and 40s. But this command and control economy directed by government bureaucrats, by people at the top that are saying, well, this industry is strategic to us, we need to prop it up and we need to ensure employment in it. This industry doesn't matter, so we can let it die. Basically it's just this entire planter's mentality. But he uses it instead of the Soviet price commissar that's coming in and dictating what you produce for the industrial plan. He's saying no, we're going to use tariffs and subsidies and all these other mechanisms in the international arena to do it for us. And we're going to call it conservative because we're claiming the legacy of Alexander Hamilton, who is a protectionist, only one, only major protectionist in the Founders, but they adapt and appropriate him to their modern day agenda. But it's all central planning through tariffs.

[A]

I feel like that's more window dressing because Peter and A Navarro and others and maybe we'll name other names, but I think it's pretty obvious that the Navarro wing of the Trump administration is winning the internal debate and that's unfortunate about tariff policy, the shift from Trump 1 to Trump 2.

[B]

Exactly.

[A]

And these guys are not Republicans, they're not conservatives, they're degrowthers, they're not economically literate and they're ultimately authoritarians. And I don't think a lot of people that are trusting the administration to do the right thing appreciate where these guys are coming from.

[B]

Well, that's exactly it. I mean, you got Navarro ran for office as a Democrat as like an anti growth, let's restrict the housing market in California guy. That was his whole background and he's a weird dude. I mean, this is a guy that's written several books where he made up this fake character by the name of Ron Vera, which is just a rearrangement of his last name and he quotes and cites Ron Vera to support all of his arguments. So he's like having this fictitious conversation with a fake economist that happens to agree with him and give him support for all of the claims he's trying to make. He's a really weird dude, but somehow or another he wormed his way into Trump's corner and he proved himself that he was a loyalist because. Because he was one of the guys that refused the January 6th committee subpoena and was sent to prison for contempt of Congress. And Trump views himself, well, you went to jail for me, therefore you're loyal to me, therefore I'm going to listen to you about tariffs. This is the argument I've made for a while. Trump in his gut for some reason loves tariffs, but it's a very superficial, shallow love he doesn't really you listen to in his speech. He can't really articulate the trade economics. And you know, I don't fault him. He's not an economist. He maybe has some bad ideas, but he's not an economist. He's not supposed to be a specialist in this. But what he has done in the second term is he surrounded himself by the cranks and crackpots of the fringes of the economics profession who take this very superficial pro tariff position and they dress it up in these sophisticated sounding armies arguments. So you got Peter Navarro in there, you got Howard Lutnick, who's the Commerce Secretary. He's a former Hillary Clinton fundraiser. Yeah, it's like this guy's not conservative in any reasonable sense.

[A]

Peter Navarro was endorsed by Hillary Clinton, I think, in 1996 when he ran for Congress.

[B]

Exactly, exactly.

[A]

And so we've, we've imported all these Hillary Clinton advisors. It's crazy.

[B]

Yeah, yeah. And, and they're the ones that are guiding the economic policy. Or he's doing this other thing. He's finding really peripheral marginal figures that somehow or another obtained a PhD in economics, never really made it in academia or the policy world. So the one I point to here, Stephen Myron, who's the Council of Economic Advisors chair, is this Harvard grad. He had a good pedigree in that sense, but never did anything with it. Kind of disappeared for a decade after he finished his PhD and just re emerges out of nowhere writing this white paper that is like a crackpot theory of how international trade works. It's all about trade imbalances. And it's like this audition white paper for a job in the Trump administration. Trump hires them, brings them on board, and he's saying, well, the optimal tariff for the United States should be set at 20% as a baseline. And if we do all these different things, we can manage a certain simultaneous protection of the American economy and a devaluation of the dollar at the same time and liquidate part of the national debt. And it's like all these crazy levers. Any economist that understands this stuff reads the paper. It looks very sophisticated on the surface, but at the core of it, this guy doesn't understand the literature. And several of the authors he cites have come out in the press and said, no, you're misusing our evidence, you are misrepresenting our paper. But it doesn't matter to him because he's dressed up in academically sounding language. And this is what created the Liberation Day reciprocal formulas. This is what creates all these crackpot theories that have entered into the White House. And Trump is just sitting here being served them on a silver platter. He's like, yes, let's do that.

[A]

You know what, it's just like the Imperial College model.

[B]

Exactly.

[A]

The patina of intellectual credibility. You know, it looks all sciencey and there's citations, but it's all contrived. It's all made up.

[B]

Exactly, exactly. And I liken them. You know how the Biden administration, they did not continue the course of Obama. I'll say one nice thing about Obama. He very much on the far left expanded the powers of government, but his economic advisors were mainstream center left Keynesians. The Biden administration didn't do that. They brought in modern monetary theory. All these people that thought inflation's caused by greed or we need price control, it's the Kamala Harris platform. And the mainstream economics profession, even center left people are looking at the modern monetary theory people, Paul Krugman saying, these guys are nuts. Why is Biden listening to them? Well, we've got the same thing in the Trump administration, only instead of modern monetary theory, they're tariff protectionists. They're that no other economists take seriously. People would look at their papers. I mean, these are people that could not get an article published in a third or fourth tier economics journal because they're so far out there in crackpot territory.

[A]

At Kibbe on liberty, Freedom is a lifestyle24.7, something you live and breathe and wear every day. If that describes you, you need the very best liberty swag in the market market today. Just like this shirt I happen to be wearing. Go to freethepeople.org kol and check out our exciting merch. You too can love liberty and look cool. So by the way, for those of you listening to this podcast, we're in a major storm. Yep, in a tin roofed old carriage house. Logan, how is the sound?

[B]

All right, all right.

[A]

I just don't want it. Everybody listening to be mad at my sound guy for further distortion.

[B]

Fair enough.

[A]

Although I like to blame Logan for everything. So I'm told by a bunch of friends that are sympathetic to Trump who have been inside that he likes to surround himself with adversarial views that he likes. He likes people to argue. I don't know if this is true, but I think it's a credible theory. But somehow the traditional pro market guys have been pushed to the sideline this entirely. Are there any sound voices on this subject in the Trump administration?

[B]

Not one that I've been able to find. So originally Kevin Hassett, who is the chair of the National Economics Council, was thought to be the free market guy and he historically has been pro trade. And early on in the Trump administration, he was one of the ones saying, well, we're actually just trying to use this as leverage to negotiate other people's tariffs down. But as it's become clear that that's not the case. Hassett has actually shifted his position to argue in favor of Trump's tariffs and defend it. So you have the crackpots, you have Navarro, you have Lutnick, you have Myron just spouting protectionist nonsense, and then you have the one ostensible free market guy not challenging them. And the result is that Trump has moved entirely into the corner of the crackpots.

[A]

Yeah.

[B]

And then you have JD Vance overlaid on top of this, who loves tariffs and loves protectionism for weird post liberal ideological reasons, not anything to do with economics. Also whispering in Trump's ear, yes, do this. And Trump's like, well, all my advisors are telling me go full speed ahead with tariffs. And that's where you start getting these crazy claims out of the White House that if the courts strike down our tariff agenda, we're going to have Great Depression 2.0 or economic catastrophe, which is actually the exact opposite of what happened.

[A]

Well, it's, you know, going back to the big beautiful bill and the demonization of Thomas Massie and Rand Paul for opposing something that any even marginally fiscally conservative Republican would have traditionally opposed. Like if Biden had offered this or Kamala Harris had offered this, they would have been united saying, this blows up the budget, it blows up the deficit.

[B]

Yeah.

[A]

It expands the entitlement state. You know, you know what the talking points would have been. Yeah, it's still true. And it's fascinating to me that how many of these same conservatives are now proud of the amount of revenue that these tariffs are that they're bringing in.

[B]

Well, this goes to the crackpot idea that the, that Myron and Lutnick and some of these other figures are telling Trump. They claim that tariffs are a tax on foreign powers, on foreign countries. And it's like, oh, we're making China pay the tariff or we're making Europe or Britain or whoever we're putting the tax on, pay the tariff. First off, just from a pure legal sense, that's absolutely not true. Customs collects the tariff from the US Based importer when it crosses the border. Now what does the US Based importer do? They pass it on to US Based customers and higher prices or they pass it on to, if it's raw materials, the company they're selling it to because their price goes up. So there's this pass through effect that's well known, well documented, documented in economics. But Myron had this theory. He said that the US Is such a large market that we have controlling power over other countries. And instead of raising their or Instead of basically settling for the situation that we've imposed protectionism on them, they'll agree to absorb the tariff and lower their prices before they import. There's no evidence to support this. It's actually from a bad misreading of a couple of papers from a guy who doesn't know what he's doing. And I'm sorry to be harsh on that. I'm a trade economist, I'm an economic historian who wrote a dissertation on 19th century tariffs. It's the most obscure issue in the world. Never dreamt in 2025.

[A]

I didn't know that, that this would.

[B]

Be the top issue.

[A]

This is your moment.

[B]

Yeah. It's like, wait a minute, I'm pulling out all my old papers from grad school. And yet here's this guy that thinks he's reinvented trade theory just like the modern monetary theory. People think they've reinvented monetary economics, but it's just like weird conspiracy theories and crackpot interpretations that they've imported in. But at the end of the day, the reality is American consumers are paying the tariffs. And then you actually start to get these things like the de minimis postal orders. I can waive a receipt in of front front of Peter Navarro and Steve Myron and say, this tax that the foreigners were supposed to be paying, why am I getting a bill for $56 from the US Customs and Borders?

[A]

Who do I send this to over there?

[B]

Exactly. Exactly.

[A]

How does this all play out? Because I think whether you support the tariffs or not support the tariffs, you have to acknowledge that it's incredibly disruptive and chaotic right now.

[B]

Absolutely.

[A]

We don't know how this is going to play out. First of all, this. The Trump administration is insisting that the Supreme Court reconsider this decision.

[B]

Right, Right.

[A]

What, what do the, the constitutional lawyers on your side of this, what do they predict will happen?

[B]

Yeah. So from a pure originalist, conservative reading of the Constitution, hands down, the Trump administration should lose. They have intruded upon an explicit power of Congress. They've interpreted a statute to include things that that statute does not even say. They've asserted an emergency authority without even defining the emergency in any coherent way. And they've claimed something that authorizes ostensibly a temporary power to be this permanent tax hike that lasts for the next 10 years and funds trillions of dollars of the federal budget. Any conservative judge should look at that and say, this is so far out of skew, out of boundaries of what the US Constitution permits, that why is this even a case? Why are you Even doing this, you need to stop. And you have other remedies to the Trump administration. Go back to those other statutes that you used in the previous term and the first term that other presidents have used. The courts have approved those. We don't like them on an economic ground, but the courts have allowed those. Trump doesn't want that because they're all constrained. They put more limits on them, whereas IA the statute he's using or interpreting this way says he can do anything. So the attorneys that have made the case against the tariffs have done so on very strict originalist grounds. Read the text of the Constitution. It does not give the president this power. This needs to be stricken down. And that's what the courts have said so far. Both Democrat and Republican judges have been on both decisions that have been handed down. And weirdly, like the dissent that Trump is relying upon from the appellate court to build his case in the Supreme Court, it was written by this far left Obama judge that just loves presidential power.

[A]

Right?

[B]

So it's just a very weird moment. And I think most attorneys that are of this originalist mindset or even just kind of sane center of the road constitutionalists will look at the current Supreme Court and they'll say, wait a minute. This is the Supreme Court that struck down Biden's student loan emergency forgiveness on the fact that it was not authorized by the statute. This is the Supreme Court that struck down Biden EPA from regulating power plants under the grounds that they exceeded their statutory authority. If they just follow their own precedents, they should do the exact same thing with Trump's tariffs. And it should be a clear cut, like either a 9, 0 or a 72 or 63 ruling something in that neighborhood. You know, we're assuming the liberal judges will go against Trump just because that's what they do. But the conservative arena originalists, you know, this is a case that's like tailor made for Clarence Thomas, Samuel Alito, Neil Gorsuch, Amy Coney Barrett, Brett Kavanaugh, people that are of that originalist camp, if they just follow their own constitutional principles, there should be no way that Trump wins. Trump is saying, on the other hand, though, well, maybe I can bluster and threaten a national emergency and assert that if you don't sustain me, what going to have a Great Depression. And he's making all these frankly, wild and insane arguments to the court that if we repeal the tariffs that didn't exist since six months ago, it's not like we're going to go back to six months ago. The status quo is that we're going to be heading into another Great Depression. It just doesn't make any sense. But he's getting that from Peter Navarro and Steve Myron and these economic cranks and crack people that are advising them, of course.

[A]

Would Trump win? The legacy of The Trump administration, 5, 10, 15 years, 20 years, 100 years from now, is not really about tariffs. It's about the expansion of government power, executive power. And that, that's the thing that, you know, to bring it full circle. When you and I were forced to do a remote show because my mayor and your governor and the federal government had locked this down, every conservative was like, this is an abuse of government power.

[B]

Yeah.

[A]

And they don't have the authority to tell me that I can't work. They don't have the authority to tell me I can't leave my house.

[B]

That's exactly.

[A]

They don't have the authority to tell me that I have to take this vaccine. If I decide, for whatever reason, I don't think it's right for me. And I keep, I keep trying to convince my conservative friends. If Trump's legacy is an expansion of executive power, what are you going to do when AOC is president?

[B]

That's the exact problem we're facing. Imagine it's 2029 or 2033. Any future election AOC gets elected, or Gavin Newsom or Elizabeth Warren or any of these characters on the left, they'll come into office on the first day and they say, well, the Supreme Court upheld Trump's IEPA International Emergency Economics Powers act to impose tariffs on stuff he didn't like. We're going to decree that climate change is an international economic emergency, and therefore all oil or all internal combustion engine cars that come in across the border from abroad are now banned. The corporate climate emergency gives us this power, and we define the climate emergency, because if we don't do this, you know, global warming is going to happen and the sea levels are going to rise. You can see exactly where this, this type of thing is going. Or imagine President AOC says, well, there's a gun violence emergency in America. No more Glocks can be imported into the United States. They get their parts and they're, they're, they're manufactured in Austria. They're a foreign gun. We're going to cut, cut off the foreign gun industry using ieepa, and then we're going to regulate the hell out of the American gun industry, and we'll do a backdoor gun grab. It's very plausible to see this. In fact, Some people in the Biden administration urged him in 2023 to consider using IEEPA to declare a climate emergency. Fortunately, cooler heads prevailed and said, no, you're never going to win this in the Supreme Court. But if Trump is handed this power and establishes the precedent on his tariffs, then all rules are off. Presidents can start issuing any emergency economic decree that they want to on anything that crosses the border for any emergency power that they deem fit, no matter how real or fake. This is the other element of the case. Trump has declared a normal condition of international trade for the past 50 years. The fact that we have a goods deficit in traded goods that are coming into the country, there are more coming in than are going out. But this is just like, that hasn't been an emergency until 2025. And he said, well, now suddenly it's an emergency. Well, climate change hasn't been an international economic emergency until 2029. Gavin Newsom says it's an emergency. Gun violence hasn't been a national emergency until 2000. AOC says it's an emergency. That's the slippery slope that we're on. And this is why I greatly fear the expansion of power that the President's arguments are trying to invoke to get this temporary thing in the current moment that ends up being permanent and then just opens the door wide for any future Democrat president on the left to declare an emergency for anything he or she wants to do that they cannot get through Congress just by seizing economic power.

[A]

By the way, I'm certain that the Trump administration has been cloud seeding throughout this.

[B]

There we go.

[A]

This entire episode. And have Marjorie Taylor Greene on to discuss this, this. But let's wrap up by picking on the national conservatives.

[B]

Yeah, yeah.

[A]

And Orncast.

[B]

Yes.

[A]

And I believe. I believe that was his conference that just wrapped up.

[B]

Yeah, exactly. If I'm not confused, they're certainly all there at it.

[A]

Yeah, yeah. So that crowd. And I believe he's very much one of these guys that wants, you know, if politics is a game of thrones and there's a king and everyone else gets slaughtered, we must be the king. That's his ultimate philosophy of things. And we're going to use government power and, and repurpose it to strengthen the family and strengthen America and all that stuff. He's another one of these guys that's just like, where did he come from?

[B]

Yeah. So he's a Harvard educated lawyer, although he calls himself the chief economist of American Compass. I mean, as far as I can tell, the guy's Never taken an econ class other than maybe an undergraduate. And he was a budgeting expert on the Mitt Romney campaign and had floated around Republican policy circles for a couple years.

[A]

See, working for Mitt Romney should be a red flag right away.

[B]

There's the weirdness of it, because it turns out actually Mitt Romney's more free trade than Orrin Kass is. And what Orrin Kass did is sometime in about the mid 2000s, he's another one of these guys that just without any economic background, he just decided that the entire economics profession is wrong, that the true history of the United States. He's one that actually does go to this. It's a weird historical story, but he says it. He says the 19th century was the age of high tariffs, and this is what caused the Industrial Revolution in America. And we should bring that back. We should go Back to William McKinley is like our model. And you hear this in Trump's rhetoric. McKinley was kind of like this mediocre backwater president, and Trump suddenly loves him. But Orrin Kass picked up this, and I dare say it's a conspiracy theory of the 19th century that when the US markets were opening up, it's after 1846, Britain repeals the corn laws. This is like the watershed moment when Adam Smith's ideas start to gain currency in international policy for free trade. So Britain repeals its protectionist corn laws. The United States also repeals its protectionist tariff system and institutes like a free trade partnership that lasts basically till the Civil War. Oren Cass says, well, aha. This is the moment that British free trade ideas entered into the United States and polluted and drove us away from the Alexander Hamilton true purpose of protectionism. But it's not really Hamilton he's about. Even though Hamilton a protectionist Hamilton limited his tariffs to revenue in the Founding era. It's really Henry Clay, who in 1824 stands up on the floor of the Senate and says, we need protective tariffs to insulate American industry from abroad and build their own national economy. This autarky version of it. So really bad economics, you know. Oh, by the way, James Madison and Thomas Jefferson are still alive. When Clay's giving the speech, Madison writes Clay a letter and says, I read your speech. This is crazy. Jefferson reads the speech and writes his representative in the Virginia Houses of Assembly and says, here's a draft resolution. I want you to declare this thing unconstitutional. So you've got the Founding Fathers that are repudiating Henry Clay. And yet Clay offers a system, and Cass has seized onto this as if it's the true American system of the economy because it governed various points in the 19th century. What he doesn't tell you, this was the ideology that undergirded the Smoot hawley tariff of 1930. So protectionists were in power when the Great Depression breaks out in 1929. And what did they do? They said, well, we're going to go back to the books of what Henry Clay said to do. It's to lock down your economy, build up barriers against the world. That's our original depression relief stimulus package. So they passed this horrendous tariff bill, the Smoot Haul me Act of 1930. It raises tariff rates to the second highest in US history and certainly the highest in the modern era. And what it does is it triggers an international collapse in trade that drives the Great Depression even further into the ground. It not only kills off imports into the United States and all the component goods that they're using. So US Companies that are already weathering the storm of the depression suddenly have all their input prices increased. Every other country around the world sees the United States doing this, and they just replicate it and retaliate. So the US Export market is obliterated. All our goods we were shipping abroad, including farm Items, have a 61% drop in the course of about three years. So this wrecks the entire United States economy. And that was considered for the last 90 years. Years to be the death knell of the Henry Clay American system ideology. It's like, we tried this and it was an economic catastrophe. Well, here we are 90 years later, people have forgotten this. And this Orrin Cass guy comes along and purports to have discovered the secret history of tariffs that we abandoned after Smoot Hawley and said, oh, well, we need to go back to that.

[A]

By the way, it destroyed the Republican Party for a generation.

[B]

It obliterated them electorally. I mean, this is an epic backlash. One of the worst, most catastrophic electoral performances in history. And it plays out over two cycles. In 1930, as the first, the tariff bill comes into effect, and they're immediately unpopular, they're immediately hit. But 1932, they're wiped out and they don't attain power again until after World War II. This is the rise of Franklin Roosevelt. He actually campaigns against the Smoot Hawley Tariff. It was one of the only smart economic moves he made, but he knew that was where the electorate was.

[A]

Yeah, yeah, well, so cautionary tale to people that care about politics. If. If you're pursuing two policies, one is one that's economically destructive and one that radically expands the power of the executive branch. You might just get fdr.

[B]

Yeah, exactly, exactly.

[A]

On steroids.

[B]

On steroids. FDR as aoc declaring a climate emergency, declaring a gun emergency, declaring any and every type of inequality emergency. Can you imagine a left wing president saying, well, inequality is out of control, so this is an international economic emergency. So we're going to start putting border controls that penalize the rich or redistribute, or I'm going to declare that I have this power without going through Congress to. To enact a redistributive program.

[A]

Yeah. So this is very depressing. So I want to end on a hopefully positive note. I think that there's plenty of elements within the broad right of center coalition, and I'll call it America first, and I think those elements are more inclined towards freedom and trade and, and individual autonomy. And I'm hoping that that emerges from this because right now, right now, particularly on this. But on, there's, you know, the Trump administration is a mixed bag. There's some good stuff going on.

[B]

Absolutely.

[A]

But right now, this could swamp everything else. And I hope out of that emerges a grassroots coalition that rejects Hamiltonian protection.

[B]

Exactly. Well, you know, I've said since the beginning of these cases being filed, the greatest gift that the Supreme Court could give to the Trump administration is to cut off the tariff agenda, to stop it in its tracks. It means that this is no longer a burden, it's no longer a millstone on the neck of the US Economy. It also cuts off future abuses of this power by taking the toy away from the president because that means he has to reconfigure his economic agenda around other areas where he's stronger. Deregulation, cutting taxes, reining in some of the climate nonsense. On energy.

[A]

Yeah, energy policy is pretty good.

[B]

Yeah, exactly. It's like, focus on that. Forget this weird fetish that Peter Navarro has about tariffs. Throw it out because it's unconstitutional. If the Supreme Court does that, it could salvage his entire presidency.

[A]

Okay, final question. You're an economic historian. You know a lot more about this than I do. But my theory, theory is that we lost the American experiment when Alexander Hamilton convinced George Washington to tax whiskey in Western Pennsylvania. And it's been all downhills ever since.

[B]

It has been. That's one of the first major strikes for the federal government against everyone else. You know, I'm not a fan of Alexander Hamilton. There are many people that came later than him that were much, much worse. You know, I toast Aaron Burr every Hamilton duel day in July. You know, I think that the great regret of that is that the duel didn't happen earlier in the career of both of those men.

[A]

But to the Whiskey Rebellion.

[B]

To the Whiskey Rebellion.

[A]

Yeah. Thank you. Thanks for watching. If you liked the conversation, make sure to like the video, subscribe and also ring the bell for notifications. And if you want to know more about Free the people, go to freethepeople.org.