← Raging Moderates with Scott Galloway and Jessica Tarlov
Raging Moderates with Scott Galloway and Jessica Tarlov
Trump Sucks Up to Xi, But Doesn’t Care About Americans’ Financial Pain
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- [00:00]
Jessica Tarleth
What's up, y'? All? I'm Skylar Diggins, seven time WNBA all star, Olympic gold medalist and mom. And I'm Cassidy Hubbard, host and reporter for nearly 20 years, covering the biggest names and stories in sports and mom. And this is and Mom, a community for athletes, game changers, and moms of all kinds. Dropping May 14th tap in with us.
- [00:24]
Scott Galloway
Do you ever wonder what's in your lotion?
- [00:26]
Jessica Tarleth
If you look at the back of
- [00:27]
Scott Galloway
the bottle, it could contain more than a dozen ingredients.
- [00:31]
Jessica Tarleth
And they may not all be regulated. The threshold is so high that only 11 cosmetic ingredients have been restricted by the FDA since 1938.
- [00:43]
Scott Galloway
This week on Explain it to Me, the chemicals lurking in your cosmetics. New episodes Sundays wherever you get your podcasts. This week on Unexplainable, the Black Plague didn't happen exactly how you'd think. Like, among other things, it wasn't just about rats.
- [01:03]
Jessica Tarleth
We can look at other kinds of mammals. Camels, it turns out, are pretty good plague transmitters.
- [01:09]
Scott Galloway
Camels, sheep, potentially as well. Follow Unexplainable wherever you get your podcasts. Welcome to Raging Moderates. I'm Scott Galloway.
- [01:27]
Jessica Tarleth
And I'm Jessica Tarleth.
- [01:29]
Scott Galloway
So the easiest way to support the show is to right now, press subscribe on our YouTube page to stay up to date on all the political news. All right, let's light this candle. Trump and Xi are wrapping up the first day of their summit in China after hours of closed door meetings and a lengthy bilateral meeting. It's Trump's first visit to China in nearly a decade, and the two leaders had a massive agenda to work through, from trade and the escalating AI race to, perhaps most importantly, the war in Iran. The summit featured plenty of pageantry and warm rhetoric, but Xi also delivered a blunt warning on Taiwan, saying the issue could push the US And China toward a clash if handled poorly. The White House says the two leaders also discussed keeping the Strait of Hormuz open and agreed that Iran cannot obtain a nuclear weapon. Let's watch a bit of Trump last night striking an optimistic tone. You're a great leader. I say it to everybody. You're a great leader. Sometimes people don't like me saying it, but I say it anyway because it's true. I only say the truth. What do you think, Joss?
- [02:32]
Jessica Tarleth
He does think President Xi is a great leader, and he's jealous of how long Xi can stay in office without those pesky elections for sure. But I do think it's important to note that Xi was also very warm at the banquet last night and talking about the future of US China relations. And he's not quite as devilish as Putin, like, when you listen to him, I guess. But he always has an ulterior motive. He knows exactly what to do. They did the pageantry, they gave Trump the welcome that he wanted. Warm and fuzzy is coming in both directions. The Taiwan question, I think thus far, because there is more to come, is the most important thing for us to be focusing on. Discussion of Taiwan was nowhere in the US Readout. There have been several reporters that have called out to Trump about Taiwan. He's taking the bait. He's not answering anything. If China really was hardline about Taiwan, which I imagine that they were, and we are not intimating that we even said that we are going to maintain our policy of saying the US Quote, does not support Taiwanese independence, I think that's a very big deal. And that would be the kind of concession that would send ripples around the world. Very scary stuff, obviously, for the region and for these bad actors more generally. Right. We've been talking about that in the context of the war in Iran and what's going on with Russia and Ukraine, that if you get the go ahead, that we're not going to stop you from taking over another country and not respecting territorial sovereignty, bad actors are going to act on that. And that's what was really concerning to me from first blush. I have more. But what. What were your initial thoughts?
- [04:17]
Scott Galloway
I agree with you. I think the only substantive comment so far that will be pored over, because clearly it was manicured and constructed word by word, was essentially Xi saying, stay the fuck out of the way of US And Taiwan, because the US hasn't really done anything to provoke a statement around Taiwan other than say they're our ally. And Trump has been quite muted on the topic. So I saw it as we have plans to either slowly or quickly repatriate, is that the right term, invade. Taiwanese would probably take issue with the term repatriate. He wants Taiwan. I think Xi sees that as his legacy and him sort of saying out of the blue, bringing up kind of a hot topic, and then Trump not pushing back. Trump not making the equivalent statement of something along the lines of, as we've seen, a small, motivated, technically sophisticated country, Ukraine can scare off or repel a much larger invading force. Trump said nothing of the like. And more generally, I think what you have here is not so much a summit as I would describe this as theater with mutual hostages. China controls 90% of the Earth's processing of rare earth processing and the US with Taiwan, our ally, controls 90% of advanced chips, even distinctive supporting our allies and democracy, which doesn't seem to be a big concern anymore of the US If China were to get control of Taiwan and their chip making expertise, we're no longer entangled, we're dominated by China. And they basically call the shots, just as we've become used to calling the shots from 1945 and they are becoming less dependent upon us. It used to be, I think about 22% of their exports went to the U.S. it's down to 17. Their largest trading partners are now the association of Southeast Asian Nations. And also they do more trading out with Europe than they do with the US So I thought that was the key moment. And also just more generally, we've gotten so used to watching what feels like a very insecure 8th grader with a new surge of testosterone that doesn't know what to do with it, who gets Ds on all his tests but has a need to stridently strike out. I mean, let's just not forget, when you listen to the guy, he sounds like a fucking idiot. There's no grace, there's no proper English. There's no sentence construction, there's no grammar. I mean, it's just a fucking embarrassment that the President of the United States comes across like a village idiot, minus the charm. Your thoughts?
- [07:11]
Jessica Tarleth
I mean, I'm glad you were the one to say it like that, but yeah, that's generally what I think a normal person hears when you have certainly a leader of the free world with absolutely no decent syntax in any statement that he makes. And you would think that he would be on different behavior from just hanging with a gaggle of reporters outside of the White House versus what he's going to be saying on a state visit with this level of importance. But the guy just is who he is. And that works for some people. It doesn't work for me, and it doesn't work for you. And someone like President Xi and someone like President Putin knows exactly what that means and how you can manipulate someone like that. We've seen that in the Oval Office time and time again, right? Like how Mark Carney is able to play him when he sits down there. Or even Keir Starmer who's, you know, in heaps of trouble but still knows how to operate when you're around Trump and the kind of things that he wants to talk about. You know, if you say, I hear you're building this big, beautiful ballroom, then he's going to be nicer to you about things that are of actual importance and we don't know the figures yet in terms of whatever agreement they've come to in terms of buying things like soybeans, which we desperately need. There's a ton of reporting about how the American heartland is watching this summit very, very closely. We are now at record high levels of US Bankruptcies with our farms. We obviously have a huge fertilizer problem as well. That Strait of Hormuz related. But the Chinese, well, first of all, they got tariffs, but on top of it, they have not shown the same level of interest in going back to do anything near the arrangement that we had before Liberation Day and the ensuing tariffs. And that's been a really big deal for us. I'm also curious about the chips and the technology that we have. So Jensen Huang, who was rumored to not be going on the trip, he got picked up in Alaska right on a refueling stop. And we know that he not only wants to sell higher level chips than we already do, that he's disappointed that China hasn't been buying more of them. So there's huge amounts of pressure from him on the Trump administration to make even more of a deal. And the Chinese know that that's an enormous card that they have at this point. And that versus a President Biden who was adamant that we could not be selling this technology to the Chinese for national security reasons so that we can stay in the AI race, etc. Trump has basically said, like, I'm, I'm here to make a deal with whoever is going to be able to do that with me. And all of these China hawks have kind of had to like skulk back on that front because they were certainly against it before they were for it. Only Reuters thus far is reporting that we are going to sell more chips. We'll see if more of that comes out throughout the course of the rest of the summit. I'm really interested though in the Iran component here because our readout, like I said, very optimistic about China being a helpful partner when it comes to Iran. I don't really believe that.
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Scott Galloway
Why would they, Right.
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Jessica Tarleth
Like they know. And Bessant made a comment, I think he was on CNBC where he said, you know, China needs the Strait of Hormuz open more than we do. I, I don't know. I mean, first of all, there are tankers getting out. There's stuff going on under the COVID of darkness or just rebranding ships that we're just blatantly ignoring. But I don't know if you look at what the oil market looks like, what our home market looks like. You look at gas prices, electricity prices, the state of the economy, the inflation numbers, et cetera, we are feeling pain in a very serious way, not to mention all of our allies, like what's going on in Europe. So I don't know if China is feeling like, oh, we. We really got to jump in and help them out here. So that kind of stuck out to me as a misread on our side of, you know, if China did kind of casually say, yeah, the Strait of Hormuz should be open and they shouldn't be able to charge a toll, like, are they actually going to enforce that for us? They're just selling them arms.
- [11:28]
Scott Galloway
China manufactures many of the components that are used to assemble the Shahid drone, which is the primary weapon of choice. And because of the military, operation, war, whatever you want to call it, the only sort of real weapon in their arsenal right now is, one, all they need to do is survive and they win. But two, these $20,000 drones, which they can manufacture also, I think China plays a bigger role in Russia's war and supporting Russia in terms of their war in Ukraine. I think China could bring Iran to the table much more crisply if they wanted to. If they said, look, we're going to cut off the supply chain and make sure that, you know, and we're also going to participate in this blockade unless you figure this out. Even the irgc, I think, would be motivated to try and figure it out. I think every day this goes on, Trump is distracted, whether it's from forging new economic alliances, thrusting people into the arms of China, taking their eye off the ball in terms of our Indo Pacific submarine fleet feeling as if they couldn't fight, or there'd be no American support for a response to some sort of blockade of Taiwan. If I'm Xi, I just think every day this war goes on, there's a small leakage of power and global currency from the United States to China. So you just have to look at their incentives. And my understanding is, while the free flow of energy has an impact on China, I don't even think they've tapped into their strategic reserves yet. I don't think they see an imminent threat. And also, the difference is, if China gets anywhere close to having an energy shortage, it'll immediately go to brownouts, and 1.5 billion people will put up with it. If we ask consumers in America to turn off their lights at night, they call it fascism. I mean, their tolerance for pain and their Willingness to subject their citizenry to pain is in just a different universe than us. And then in terms of the summit, it didn't escape me that there were 16 CEOs on the trip and there wasn't a single fucking diplomat.
- [13:32]
Jessica Tarleth
But Eric Trump and Lara Trump were there. So please, please.
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Scott Galloway
NUSA's Investor Relations Summit disguised as diplomacy. There's nothing resembling diplomacy here. There was no advance work to try and actually get anything done. And Big Tech isn't observing policy or subject to it. They're now co authoring it. And Jensen Huang is over there because he used to have 90% share of chips when he was selling over there. It's now zero percent. And China doesn't want to buy their chips. I think China sees advantage in having the motivation to try and figure out how to do this on their own. And they are starting to build chips. I actually think. I was speaking to Alice Hahn at China Decode, our sister property, and I said, can you put together a list of chips companies? Because the chip sector has increased 60% in the last 60 days. We've never had a sector as a whole increase in value the way the chip sector has in the last 60 days in America. And I started thinking, well, has that uplift infected or traveled across to China yet? Cause I think it will. And it has been. Not to the same extent. But Jensen Huang is now more important than whether or not we sell advanced operating systems for everything. For their submarines, their aircraft carriers, their ballistic missiles, versus our analysts at the Central Intelligence Agency or our, our generals or our Cyber Command, or whoever it is. They don't have input. This is all about. This is all about a transaction. And you know how, as long as he gets some money, I just wouldn't be surprised if you saw Nvidia make a large donation to the Trump Ballroom or something along those lines. But zero diplomats on this trip and 16 CEOs.
- [15:17]
Jessica Tarleth
Can I ask you of the other CEOs that are on the trip? I know there was this thing floating around that they wanted beans, Beef and Boeing were the three Bs of the trip. So any other CEOs that you're kind of watching what their impact on it could be? And then also on the Iran front, there is this blockbuster scoop from Jonathan Swan and Maggie Haberman that classified military intelligence assessments show that Iran has regained access to most of their missile sites, launchers, and underground facilities, including 30 of 33 of them along the Strait of Hormuz. So taking that together with this idea that they maybe have three to four months left actually before they have to dump all of their oil. And I know some dumping has already begun that Iran actually can last a lot longer than we had that impression. So I guess those are disparate but slightly connected. So any other CEOs that you were interested in?
- [16:20]
Scott Galloway
Well, so some of the CEOs Cargill, Meta, Visa, Cisco, Qualcomm, Coherent, Micron, G aerospace, Illumina and MasterCard. Although some of them just said representatives, not their CEO. The CEOs there are the CEO of BlackRock, the city chairman and CEO, Jane Fraser, Blackstone CEO Stephen Schwarzman and Boeing CEO. Look, America has just become a platform for trying to increase the wealth of the wealthiest. I see 1% and then throw some bread and circuses, cheap calories and cheap Netflix at our populace to keep them somewhat from revolting or a revolution. But these trips are now essentially this would be the perfect trip if our Secretary of Commerce was leading it. This is not the trip a president leads, in my view. This is saying that geopolitical issues, the war in Iran, Taiwan, human rights.
- [17:13]
Jessica Tarleth
Oh yeah, no mention of human rights, no Jimmy Lai, nothing.
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Scott Galloway
Nothing along those lines. This is the US policy is essentially 100% focused on shareholder value and trying to ensure that the largest corporations in the world understand that it's pay to play. And if you're my friend, I'll get you more business in the largest market in the world. And if you're not, I will come for you and your healthcare. Just a quick plug before we move on. The hosts of China Decode are going live on substack tomorrow, May 15th at 10am Eastern. Breaking down the Trump Xi Summit even further and explaining what it means for the US China relationship. Alison James will be joined by Kevin Hsu, founder of Interconnected Capital and one of the sharpest voices on US China tech competition. To watch live, subscribe to profitplusopertgymedia.com Again, that's propagplusroptymedia.com Free and paid subscribers will get access to the conversation, plus the weekly China Decode newsletter. All right, let's take a quick break. Stay with us. Some follow the noise.
- [18:22]
Jessica Tarleth
Bloomberg follows the money.
- [18:24]
Scott Galloway
Whether it's the funds fueling AI or crypto's trillion dollar swings, there's a money side to every story.
- [18:31]
Jessica Tarleth
Get the money side of the story.
- [18:33]
Scott Galloway
Subscribe now@bloomberg.com
- [18:38]
Jessica Tarleth
I'm Mitch, first two time Indigo champion, championship, MVP and forward for the U.S. women's National Team. Before I went pro, I graduated from Harvard with a degree in psychology, which comes in handy more than you think. Any athlete pursuing greatness knows there's a certain mentality you have to have. What people don't know is what that costs. In my podcast, Confessions of an Elite Athlete, I sit down with the best athletes in the world and explore the psychology, mindset and unseen battles on the path to greatness. So take a seat and learn from the Confessions of an elite athlete on YouTube or wherever you get your podcasts. Complex and unprecedented. The Spanish authorities are calling it asymptomatic as passengers who'd been stuck aboard the Hanta, or maybe Hantavirus stricken Dutch cruise ship disembarked in the Canary Islands this weekend, prompting the highest stakes game of where are they now? Since maybe Covid. Some of the evacuees, American and French, have since tested positive for the virus. And yet public health officials seem remarkably calm. We do have one individual who was taken to the biocontainment unit early this morning and we assess that individual, they are doing well, possibly because this is not the one to freak out over today. Explained drops every weekday afternoon.
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Scott Galloway
Welcome back. Obviously, a huge issue with the war in Iran is the impact it's having on both gas prices and overall inflation. Back at home, the consumer price index has registered a 3.8% rise last year year over year in April, the greatest gain in three years since COVID A large part of the gain was due to energy prices, which were up 3.8% from the previous month. But even removing the volatile food and energy prices from the calculation, inflation was still up 2.8% year over year. Trump went on the record, quote, unquote, showing his concern. When you're negotiating with Iran, Mr. President,
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Jessica Tarleth
to what extent are Americans financial situation
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Scott Galloway
motivating you to make a deal? Not even a little bit. The only thing that matters when I'm talking about Iran, they can't have a nuclear weapon. I don't think about America's financial situation. I don't think about anybody. I think about one thing. We cannot let Iran have a nuclear weapon. That's all. That's the only thing that.
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Jessica Tarleth
Do you think Susie Wiles had a heart attack? Well, I mean, I hate to say this about it and I know that she already is not well, so I'm not wishing a heart attack on Susie Wiles, but that could not have gone worse. Right? Like, there are no other ways to conceive of how you could phrase that more poorly. Unless I guess you said like f you all literally, like I just F off Americans. I, I was kind of, I'm not shocked I guess, but like a little bit surprised that he couldn't even muster, like, it's tough right now, we're winning, it's going to be unconditional surrender. Or his old talking points, these new talking points, very, very, very bad.
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Scott Galloway
Well, his strategy is sort of, it's, I would best describe it as improvisation with a microphone. I mean, let's be honest, he didn't read the Iran proposal. He calls the ceasefire on life support. He floats a gas tax holiday mid crisis. It's vibes plus leverage plus constant motion. And while I do agree it was politically tone deaf, the reality is I support that type of complexion for the US leader because I think an adult conversation with the American public would be, look, we believe the IRGC, we have been at war with them for 47, that a vastly diminished military capability of Iran would bring stability to the Middle east and lessen the threat to the Gulf to Europe and us. And that we were at a rare moment in time to substantially diminish their capacity. We also thought there was a chance that we might provide cloud cover for the brave men and women of Iran who want to take their country back. That has not happened. And to be blunt, folks, I'm not going to lie to you like George Bush and say that we can cut taxes and go to war. This might take some pain and we believe as your leadership and the administration, that that pain is worth it. I think that's an adult conversation and I do think that America suffers from. It doesn't matter how big and strong you are. There's a general belief that if anyone lands a single blow on you, no matter how small they are, your populace is going to throw in the towel. And this is not a popular viewpoint. I'm not with Senator Murphy, that we should just, you know, cut and run, so to speak. We should just get out, just say whatever, we're out. I don't think that's a good move for us long term and diminishes our credibility. And if we're going to, or let me put it this way, if we're going to have that complexion globally, then I'm for taking the military budget down to 2 or 300 billion and just ensuring that Canada and Mexico don't invade us. I mean, it's just if we're going to spend $1.4 trillion on the military, we not only have to show that we have big fucking fists, but we're occasionally willing to throw blows. And if someone looks askance at us that we don't pick up and run. So I do believe that it's the right standpoint or the right complexion. His delivery, of course, is stupid, and I don't doubt it's going to cost him politically because Americans, especially his voters, who were never more people, look at this and say, okay, inflation is at 3.8% and rising, and now there's gonna be political pressure. I'm more worried about the new Fed chair and political pressure to cut rates at exactly the wrong time, which could send inflation absolutely spiraling. But I wasn't, if you will, as triggered by that statement. I actually think that's the right statement for a leader when they're in a war and this is a war. But I can understand why people on the Republican side are like, oh, fuck, that's gonna cost us.
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Jessica Tarleth
Sure. I mean, you can't live by what's gonna get cut and put in a midterm ad. And I'm probably a little too partisan somet how I view these things, because I'm just fantasizing about said midterms ads at a time when I'm not feeling, as, you know, Cloud nine about our chances after the Virginia Supreme Court striking down the new map. But while I agree with your articulation of what a president should be saying in this position, it sounds a lot better than Trump, it still is predicated on a bunch of facts that didn't seem to come to fruition. I mean, they came out and said, Iran is a couple weeks away from a nuclear weapon. There's no evidence that that's the case. We know that Bibi Netanyahu has been making this pitch for decades and that the last two presidents were like, get out of here with this. We're not doing it. We know that all of our original goals have fallen by the wayside as we scamper to try to figure out how to reopen the Strait of Hormuz, which was open before we did this. And now, you know, there was testimony yesterday Secretary Wright, the Energy Secretary, paraded out on Capitol Hill talking about, oh, no, no, they were close to getting a nuke. I don't know if he is, you know, perjuring himself or whatever is going on there, but we have not seen the evidence. We also now know that the complete decimation of their facilities, not only from Operation Midnight Hammer, but the last couple of months are not as severe as we thought that they were or what Pete Hegseth would be telling us. So, yes, if we were in a just war, if we were involved in something that there was one ounce of American support for I would say, yes, the president can come out there and he should do it the articulate way. Right. Like he should acknowledge that there is a toll to American life here that we are paying for this, but that the end result will be worthwhile. But when it's not predicated on something that the American public feels was an existential threat, certainly, or something that was even a couple years from now threat like, I don't think you can be talking like that. I really don't. And I will enjoy the midterm ads.
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Scott Galloway
There you go. So moving on, the Senate has confirmed Trump's pick to head the Federal Reserve. Kevin Warsh will begin his term on Friday directly following Jerome Powell's term, concluding. Warsh is presumably someone who will take Trump's side. And Trump has wanted to lower interest rates for a while, but this comes as inflation is up and the war continues to make things worse. How do you think Warsh as Fed chair will play this out in the coming months, Jess?
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Jessica Tarleth
Well, based upon his testimony, I think it's a kind of worst case scenario. I mean, I guess not like there were bigger bootlickers that were in the running to get this job, but you know, people are rightfully spending time thinking about how it was that Joe Biden and Jerome Powell got us a soft landing out of COVID Right. And now you're seeing the spike in inflation, the wholesale prices, etc. And like you were saying, I'm not sure if Marsh is strong enough to stand up to the angry phone calls and probably in person meetings that he's going to be having with Trump about cutting rates. But I want to hear you on Marsh more than I want to hear me.
- [28:25]
Scott Galloway
So I'm sort of curious what the semantics are of rate. So I don't believe he's going to, I don't think he's stupid. I don't think he wants to be the chairman of the Federal Reserve that is known for sending an upward spiral or instigating or catalyzing an upward spiral and inflation and it's a 12 year term and Chairman Powell has, has demonstrated that the president can't bully someone out of the office. So while I thought it was really disappointing that he didn't have, quite frankly, the balls or the fidelity to the Constitution or just general appreciation for the truth to say that Biden was elected, they've all been told to say that they all think it's the easiest way out. But here's the, here's the mechanics of it and this is what People miss He can't unilaterally cut rates. US interest rates are set by the Federal Open Market Committee, not by the chair alone. The chair, Kevin, he only has one formal vote among 12 voting members. The boring stuff. The FOMC voting structure is the following. It's seven fed governors, it's the New York Fed president, and it's four rotating regional Fed presidents. So Warsh would need a majority support from the committee for a rate cut. He cannot simply order one himself or bypass the governors. What the chair does have power around is kind of agenda setting power, influence over staff analysis, major influence on market expectations, an ability to build consensus. That is soft power. In some they have more influence, but they're still one of 12. They're the most important of the 12. They have the bully pulpit, they set the agenda. But I just don't think there's any way with a print at 3.8% he could get seven of these 12 governors to go along with a rate cut right now. So what we probably have is someone who's more inclined to cut rates than someone than maybe one of the other more independent or someone who had demonstrated more independence. But this is why we have government. So the public immediately assumes that, oh, our interest rates are now subject to the whim of one man, the Fed chair. No, he's one of 12 votes. And as always, I always go to Kalshi to look at what the, what the wisdom of the crowd is saying. And right now the Calci market has it at 97% that the Fed maintains the current rate in June. So it seems to me Aswat Demoter and so is said that he said, if you want to know how someone thinks, look at where they're putting their money, what they really think. And it's a 70% likelihood that there are no rate cuts in the remainder of 2026. So people who actually were willing to put their money on this are saying that Wash is not gonna, is not gonna cut rates, or I shouldn't say that the FOMC is not gonna cut rates. I think he would lose a ton of credibility among the 11 other governors if he suggested a rate cut in the face of this print. Any thoughts?
- [31:15]
Jessica Tarleth
I mean, that's a good point. You brought me down to earth. You've taken away my midterm ad and now you brought me down to earth on this. But I think the pressure will ramp up closer to the election again, I'm sure. And I'm curious as to, you know, how Trump will try to persuade also, you know other folks that have a vote or a say how he'll use his, you know, flock of CEOs in pursuit of what he thinks is going to make the US More economically stable.
- [31:45]
Scott Galloway
Let's take one last quick break.
- [31:50]
Jessica Tarleth
Modern motherhood has become an unwinnable game. I'm Rabin Ard sun and I do not believe in treating exhaustion as of a good mother is not a depleted one. An ambitious mother who wants to be someone outside of mom is no less obsessed with her kids. This month on Project Swagger, we are defining motherhood on our own terms in a special series, the Remix in the first episode out now, why balance is a myth and how I started trusting myself over the noise. Listen or watch now at Project Switch Swagger this week on Net Worth and Chill, we're diving into another edition of Am I The Finance Edition. And trust me, these money dilemmas will have you questioning everything. I'm breaking down real stories from real people who are navigating financial situations that range from mildly awkward to absolutely unhinged. And I'm giving you my unfiltered take on who's in the right and who needs a serious reality check. Because let's be real. When it comes to mixing relationships and finances, someone's always asking if they're the learn how to set boundaries, protect your wealth, and avoid becoming the villain in your own financial story. Listen wherever you get your podcasts or watch on YouTube.com YourRichBFF Does Chinese President Xi Jinping see Trump as a partner or an opportunity?
- [33:10]
Scott Galloway
So President Xi comes to this meeting with quite a lot of confidence. They recognize that President Trump is dangerous, potentially, he's unpredictable. But I think they also believe that they can manipulate him.
- [33:23]
Jessica Tarleth
I'm John Finer.
- [33:24]
Scott Galloway
And I'm Jake Sullivan. And we're the hosts of the Long Game, a weekly national security podcast. This week, former U.S. deputy Secretary of State Kurt Campbell joins us to discuss the Trump Xi summit in Beijing. The episode's out now. Search for and follow the Long Game wherever you get your podcasts. Welcome back.
- [33:45]
Jessica Tarleth
How do you think that we can write this ship economically? Because, I mean, the economic indicators are bleak. Consumer Sentiment Index is at historic lows. Over 70% disapproval for the president on the economy. I, you know, already said that I don't think the CNN poll was correct, that the Democratic advantage on the generic ballot is only three points. I also don't think the Atlas intel poll of 15 points is reasonable. But when you look at how poorly Americans feel about their financial situation in particular, and the fact that Democrats have taken the lead on major issues like handling inflation and taxes. Even they were a plus three on crime, which is a big reversal. It's still not translating to well. We think these guys, the Democrats, are going to be markedly better in handling this. A lot of people may just stay home, right? Like that could be a result that comes out of this. So if you were in a position of economic policy power, what would you be telling the President? Or what do you think is the best way forward right now? Looking at the facts on the ground.
- [34:52]
Scott Galloway
So the good news is the incumbents weaponize the illusion of complexity to pretend that we can't solve these problems. There are common sense solutions to all of these problems. In sum, we fucked it up. We can unfuck it. And we've had long periods of historic growth with marginal deficits and fiscal control. We can absolutely get back there again. The bad news is we lack the leadership or the IQ at the White House and in Congress. And more than that, I hate to say it because we always like to think the American public are just saints. The American public lacks the will. Loosely speaking, if you think about our economy, you could trifurcate it into three buckets. There's shareholders, call them the owners. There's labor, call them the earners. And then there's consumers, right? And let's look at the Iran oil crisis. The reality is that this is a transfer of wealth from consumers who are paying more for gas and slightly more for everything else, right? And from some laborers who are probably in companies that are price sensitive to the increase in gas, although we really haven't seen layoffs. It's a transfer of wealth to oil companies and people who make money building refineries or have a vested interest in energy. We are a net oil exporter, which means even if oil goes to $20 a gallon or gas goes to $20 a gallon, we capture most of those incremental revenues. It's just a massive leakage from labor and from consumers to shareholders. And that leakage has been happening steadily for the last 30 or 40 years. If you look at productivity in the US because of technology gains and innovation, it looks like a 45 degree angle. It goes up every year. PCs, the semiconductor, alternative energy, all sorts of productivity AI now, but wages, right? The laborers as a percentage or the earners as a percentage of GDP has been flat. And the Delta, the gap between those two things has been trillions of dollars in shareholder gains. As is the reason why the NASDAQ is up Eightfold and consumer wages are only up have only doubled, right? The quality everywhere in the west you have seen an increase in GDP and a decrease in living standards. And it's because our tax policies and our government policies have, in a concerted way, a deliberate way, put in place policies that transfer capital from earners, labor and consumers to shareholders. And the way to fix it is really boring shit. You would have to raise minimum wage at $25 an hour. You'd have to have single payer health coverage such that healthcare companies who have consolidated the market and gone vertical weren't able to raise their prices 300% in the last 20 years while wages have only gone up 60%. You would have to break up chicken. You'd have to do boring shit like antitrust, break up big tech, big pharma, such that there was more competition and the rents they could extract from consumers went down every year. So it's boring shit like minimum wage, tax policy, 40% alternative minimum tax on anyone making over a million dollars or any corporation. My taxes are 17%, Meta pays 16%. Meanwhile, someone making $80,000 as a high school teacher probably pays closer to 28 or 29%. Tax policy, antitrust, minimum wage, more competition and then some more innovative stuff around healthcare. And then the big one that is really politically unpopular. You have to move up the age on eligibility for Social Security. You have to means test Social Security. If you don't cut Medicare, you need to lower the age of Medicare eligibility by two years. And until, and in 30 years you would have, if you will, universal healthcare coverage. And then more innovative long term stuff which we are not fans of. Give every baby $7,000 when it's born. Infantilize that baby, put it in an S and P account. They can't touch it till they're 65. They get a million dollars and in 30 years you announce we no longer need Social Security. And slowly, but you would see interest rates come down and the second largest line item in our budget, interest on debt would start to come down and we'd have something resembling fiscal sanity in this nation and transfer power back from shareholders to labor earners and consumers. But it's boring shit that is really hard and requires long term thinking and does not make for a good bumper sticker and needs to go longer than any one political election cycle. That was a word salad.
- [39:24]
Jessica Tarleth
No, it was awesome. And 7k for your baby is a bumper sticker.
- [39:30]
Scott Galloway
There you go. 7,000 for the new one. Yeah, yeah, yeah, yeah.
- [39:34]
Jessica Tarleth
I like it.
- [39:35]
Scott Galloway
Anyways, all right, before we go, let's end on A lighter note, Barack Obama popped up in Austin on Tuesday alongside Friend of the Pod and rising Texas Democrat James Talarico. So we thought we'd check in on his campaign. Jess, how is it going for Representative Talarico?
- [39:52]
Jessica Tarleth
Well, I do think it's most important that his titles now start with Friend of the Raging Moderates Pod. That is, that is the most important moniker in James Tallarico's life. It's going really well. I mean, and I think that's especially true when you look at the fighting between Paxton and Cornyn on the Republican side. Donald Trump has still not endorsed. There's still this question swirling around Paxton pushing for the Save America act, which is a non starter in the Senate and also for the American people, would disenfranchise a ton of voters, a lot of them Republicans. There's been some very good polling for Talarico in both matchups against Cornyn and Paxton. And you know, going back to, we had a clip of Obama last week. I like to see him out there. I think this is great. And he's starting earlier than he did certainly in 2024, you know, where it kind of felt like he was swooping in at the last minute. And I know there was big jockeying with, you know, Biden handing it over to Kamala, et cetera. Like, I love that he is going out on the road with young, especially young people that he thinks are gonna be the new standard bearers of the party. And you look at the split right, that he is reading books to kids with mom Donnie, he's getting a taco with James Tallarico and he's gonna be doing this all through the fall. Um, so I think it's a good thing. And I also wanted to note that Carlos Suspina, the young influencers who we had on Raging Moderates, was with them as well. So I was excited and I've been excited or heartened to see that the polling is, I don't want to say like he's going to win this race, but that he is in this race no matter the opponent. What do you think?
- [41:37]
Scott Galloway
Well, my favorite. In a sign of desperation, didn't John Cornyn propose renaming one of the highways in Texas the Trump highway or a Trump Airport or something?
- [41:46]
Jessica Tarleth
I don't know.
- [41:47]
Scott Galloway
I mean, that felt gonna take like
- [41:48]
Jessica Tarleth
Bush off the highway and just like slap Trump on it.
- [41:52]
Scott Galloway
Yeah, no, it's like we're, we're a huge fan of the representative and I mean, we keep getting our hearts broken in Texas, but it feels like this one this. It feels like this might work, Jess. Let's leave it there. And just a quick reminder, Raging Moderates has a new schedule with longer episodes dropping Monday, Tuesday and Thursday afternoons on YouTube and all the podcast apps. Plus we're ad free on substack to get access to those, along with exclusive live streams, ticket priority for live shows and to interact with us, join Profig Plus@ragingmoderates.prhetetmedia.com if you do, you can also get the Raging Moderates newsletter, the Monday Rage in your inbox every week. Sign up now@ragingmoderates.propagmedia.com that's all for this episode. Thank you so much for joining us today. Just have a great rest of the week.
- [42:40]
Jessica Tarleth
You too. See you later.