B (14:52)

The question is whether the United States is actually going to do this. So the United States has now put out a national security strategy via the White House, and there's a lot to recommend. The national security strategy. Hard to tell kind of whose fingerprints are on the national security strategy from the White House. Obviously, the vice president, J.D. vance, had some hand in it. I'm sure the Secretary of State, Marco Rubio had some hand in it. Probably Elbridge Colby, the undersecretary of defense, had some hands in it. Michael Anton, who's sort of a national security advisor, reportedly had some hands in it. It's a lot of hands in it. But what that means is that the final result has some good stuff and it has some incoherent stuff. But the overall sort of takeaway from the national security strategy is an incoherence that I think China and Russia and Iran and other parties are going to try to take advantage of. So to use China as sort of the chief example, there's been a lot of talk in the defense establishment about the shift from, for example, the Middle east to focus on China, something with which I totally agree. The Middle east is not nearly as important geostrategically to the United States as it once was because we are now energy independent. The Middle east is still quite important because obviously when you are Talking about the price of global oil, for example, and the Middle east provides a heavy share of that. Whatever happens in the Middle east has other ramifications, but it's not nearly as vital as it was in, say, the 1970s or when the vast bulk of oil was coming via opec. That's no longer the case. And so shifting resources from the Middle east over to the Far east makes a fair bit of sense. In order to achieve that, you wouldn't want to, as the National Security Strategy suggests, achieve, quote, unquote, regional balance. That's a very Obama idea. So the National Security strategy at one point suggests that there ought to be regional balances of power. Quote, we will work with allies and partners to maintain global and regional balances of power to prevent the emergence of dominant adversaries. I do not know why we should pursue regional balances of power rather than strengthening our allies. I don't want Ukraine to have a balance of power with Russia. I would like for Russia to be weaker. I do not want Turkey to have a balance of power with Israel and Saudi Arabia. I want Turkey to be weaker. I don't want Iran to have a balance of power. That's not something I'm interested in. Right, because balance of power suggests that if, for example, Saudi gets too strong, you then have to turn around and strengthen Iran, which makes zero sense at all. So again, there's a bit of incoherence here, but with regard to China, the National Security Strategy released by the White House says a few things. It says President Trump single handedly reversed more than three decades of mistaken American assumptions about China. Namely that by opening our markets to China, encouraging American business to invest in China and outsourcing our manufacturing to China, we would facilitate China's entry into the so called rules based international order. This did not happen. Okay, this part is absolutely true. Donald Trump did in fact reverse the bipartisan consensus that was false, a total lie. That US integrating China into the world economy would somehow benefit us but not benefit China because benefit because eventually China would be sort of undermined politically by economic growth. China did not make the mistake that Mikhail Gorbachev made in the ussr. If you believe that the USSR should have been upheld, then what you would say to Gorbachev is you don't want a sort of political loosening along with economic loosening. China allowed some economic loosening but maintained strict political control. The National Security Strategy says China adapted to the shift in U.S. tariff policy that began in 2017, in part by strengthening its hold on supply chains, especially in the world's low and middle income countries. Among the greatest economic battlegrounds of the coming decades. China's exports to low income countries doubled between 2020 and 2024. The United States imports Chinese goods indirectly from middlemen and Chinese built factories in a dozen countries, including Mexico. China's exports to low income countries are today nearly four times its exports to the United States. Going forward, we will rebalance America's economic relationship with China, prioritizing reciprocity and fairness to restore American economic independence. Trade with China should be balanced and focused on non sensitive factors. Now, again, that's fine. Rebalancing trade with China, boxing China, it would be a good thing. However, it's the next part of the national security strategy that starts to get dicey. Hey, quote the United States must work with our treaty allies and partners who together add another $35 trillion in economic power to our own $30 trillion national economy to counteract predatory economic practices and use our combined economic power to help safeguard our prime position in the world economy and ensure that allied economies do not become subordinate to any competing power. America first diplomacy seeks to rebalance global trade relationships. We have made clear to our allies America's current account deficit is unsustainable. We must encourage Europe, Japan, Korea, Australia, Canada, Mexico and other prominent nations to adopt trade policies that help rebalance China's economy toward household consumption because Southeast Asia, Latin America and the Middle east alone cannot absorb China's enormous excess capacity. Okay, so this is talk about trade deficits. And the basic idea here is that the United States has to rebalance our trade relationships with Japan and Europe. Now, as we've talked about on the show, trade is mutually beneficial as an economic matter. Put aside national security for a second. If you and I trade, both of us benefit. It's a voluntary exchange of goods, a voluntary exchange of money for goods or services. Both of us benefit or we wouldn't be doing it. The idea that the fact that we run, for example, a trade deficit with Ethiopia is inherently economically problematic for the United States is ridiculous. The GDP per capita in Ethiopia is like a thousand bucks a year. And they're exporting US coffee. US Buying good coffee from Ethiopia does not beggar the United States. That's silly. And this is where the America first tariff policy toward the rest of the world actually ends up achieving the reverse of what it wants to. With regard to China, as I said at the top, if you want to box China in, we need a better trade relationships with Japan, Australia, Europe, Canada, Mexico. Otherwise, you know what they're going to do. They're going to trade more with China and less with us. This is the problem. The national security strategy laid out by the White House simultaneously argues, quote, we should form coalitions that use our comparative advantages in finance and technology to build export markets with cooperating countries. America's economic partners should no longer expect to earn income from the United States through over capacity and structural imbalances, but instead pursue growth through managed cooperation tied to strategic alignment and by receiving long term US Investment. Hold up a second. Now. What you're talking about here is we should form coalitions using our comparative advantage in finance and tech, but we should also prevent other countries from building their manufacturing capacity to make T shirts and such. Okay, none of this is going to result in the thing you want it to result in. And the proof is in the pudding. All right, coming up, we'll get to the President's decision to allow Nvidia to sell certain types of sophisticated microchips to the Chinese. Why is that happening? First, you know, most children's vitamins out there are loaded with teaspoons of sugar and artificial ingredients kids don't really need. Well, that's where our sponsor Haya comes in. They've created this amazing chewable vitamin that kids actually love. The best part? 0 sugar but still totally delicious. Even the pickiest eaters would approve. They've packed in 12 organic fruits and veggies, plus 15 essential vitamins and minerals. 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That's helixsleep.com Ben for 27% off site wide make sure you enter our show name into the post purchase survey so they know we sent you helixsleep.com Ben According to the Wall Street Journal, President Trump retook the White House almost a year ago, promising a manufacturing boom. He got one in China. Chinese industrial production broke records this year as his factories churned out more cars, machinery and chemicals than ever before. Despite the disruptions of tariffs, the country's trade surplus in goods has set a record as growing shipments to Asia, Europe, Latin America and Africa offset the hit from Trump's levies on direct sales to the United States. Chinese companies that built their business around low trade barriers to sell into the US have, have adapted and in some cases are bouncing back. In May, Chinese owned e commerce giant Temu's business model of serving up affordable household goods, beauty products and Clothes to American consumers looked all but finish. Today, Temu is once again among the most downloaded apps in the United States and business is booming. Why? Well, because if you're worried about affordability, I know there are a lot of people on the right who rip against the American desire for cheap products. We used to just call that affordability. Americans do like products better and cheaper. That's a reality. If you can't compete, you lose. China has reported a goods trade surplus of more than $1 trillion for the year through November. Manufacturing output in the first 10 months of the year was up 7% compared with the same period in 2024. China's on track this year to post a surplus in manufactured goods of around $2 trillion.

B (25:31)

Now, again, some of this is China subsidizing its manufacturing capacity at the cost of massive debt. But part of this is because the United States decided that we were going to go to tariff war, not just with China, but with everybody. And it turns out everybody else still wants cheap goods. It turns out everybody else is happy to shop in China if they want to.

B (25:53)

Not only that, if we're looking at ways to box in China, I have to say I do not understand for the life of me why we are allowing Nvidia to export the H200 chip to China. President Trump says the United states will receive a 25 cut of whatever China buys. But the whole point is that once China has widespread access to those chips, they will buy some and then they will steal the IP and make others.

B (26:18)

Not only that, China's way out of the box. We've talked about their problems with debt. We've talked about China's problems with he human lack. Right? They don't have enough human capital because they killed half their population through the one child policy. They have an aging population, a hugely aging demographic. What's their way out of the box? One way out of the box is winning the AI race. What does AI do? AI means you need fewer people. AI means that you can actually increase your productivity numbers without as many employees that the computers and the robots do all the work. The chief beneficiaries of that are places like China which actually are lacking human capital, lacking human beings, and have heavy debt problems. So why are you allowing them the possibility of winning an AI race that not only has consequences economically, but also has consequences in terms of military power. All the next wars in in human history are going to be AI powered wars. Drone on drone, AI assessment against AI assessment. Whoever has the best tech is going to win. That is going to be the next step in human warfare because it will be robot warfare, essentially. So Nvidia is doing really well. It helps the Nvidia stock valuation, but this is one area where America first really should kick in. It shouldn't kick in with regard to tariffs on Japan. It should kick in with regard to why are we selling H200s to the Chinese, even if it delays them by six months? That is a national security consideration. The H200 has higher performance, according to the Wall street journal, than the H20 for that Nvidia was previously allowed to sell. It's not as powerful as the company's top Blackwell products released this year or the Rubin generation of chips coming next year.

B (27:57)

With that said, some of what's going on here is pure bulk. Now, yes, more sophisticated chips mean greater efficiency, but if you're China, you could brute force this thing. Theoretically, if you have enough of these chips that you can string together. According to the Wall Street Journal, the exports could also help Chinese tech giants that have struggled to get top chips to train their models. Jensen Huang, who's the head of Nvidia, has argued that the company should be allowed to compete in the Chinese market because China has many of the world's top AI researchers and the US should want them using American technology. But why? Why? I mean, the idea is that China will then go and they'll build their own. If we don't allow them access to this one, fine, we should outcompete them. We should outcompete them.

B (28:39)

Right? The, the attempt. And Nvidia was trying to sell a slimmed down Blackwell chip to China. So if Trump's initial critique of the sort of globalist trade regime is.

B (28:50)

Rootless corporations attempting to make money at the expense of American security, I mean, this one is like top of the list. This doesn't make any sense to me. If you want to box in China, you have to stop them from winning the AI race. As Stu Wu at the Wall Street Journal writes, with one unorthodox yield, President Trump instantly reshaped the U. S. China technological cold war. The fear among his critics. He just helped Beijing catch up. He handed China's AI industry what it couldn't build itself. The high end semiconductors needed to rival America.

B (29:22)

And again, one of the problems here is that the reason this happened is because of the trade wars. President Trump may have made concessions in these wars on the chips because the Chinese have so much control over rare earth minerals where we didn't game out. Again, I said we have to build alternative supply lines and Then box China. And if you don't build out those alternative supply lines, China has a pressure point which it used. Also, China has manufacturing advantages in places like pharmaceutical. Jamie Dimon of JPMorgan Chase, he pointed out that we currently rely on China for 90% of our pharmaceutical ingredients.

C (29:59)

It's not just about China, but we rely on single parties for things we need for F30 fives and nuclear submarines. So the Brazilian we rely on China for or something like 90% of the ingredients go into our pharmaceuticals and 90% of our penicillin.

B (30:17)

Again, if we are going to go to conflict with China, which we should, then we should be smart about it. Phil Graham and Donald Boudreau, both economists, they are writing in the Wall Street Journal today about world trade and the fact that world trade is growing in the absence of the United States.

B (30:34)

They point out current trade diversion began when Mr. Trump's first term tariffs led China to shift its exports to other countries. Under Mr. Trump's second term tariffs, Chinese exports to the United states fell by 69% from February through September. But Chinese exports to other regions rose over these same months. Chinese exports to association of Southeast Asian nations, that's Asian member states, were up by 61% to Japan and Korea by 41% to Africa by 35% to the EU by 28% to India and Latin America, each by more than 10%.

B (31:04)

As trade is diverted around the United States, other countries will continue to specialize in producing goods and services for which they have comparative advantage. This specialization and the trade that sustains it will enhance efficiency and fuel economic growth in those trading nations. America's economy will become increasingly isolated to our own detriment. Before tariffs, well over half of US Imports were inputs used by American producers. Keeping tariffs high will deny these producers access to many of the world's lowest COD inputs. Instead, US Producers will become less efficient and less competitive on the world market.

B (31:37)

And by the way, as we simultaneously cut ourselves off from world trade, which is a mistake, we are going to have to scale up our military. And there's very little in the actual national security strategy with regard to what it looks like to scale up our military. In fact, again, there's this sort of peculiar isolationist streak that runs through a national security strategy that seems to ping pong between a Reagan esque peace through strength policy that President Trump historically has supported and a bizarre sort of isolationism that suggests that America needs to move away from its attempts to provide a muscular supporting presence to allies around the world. We may be falling behind. China in terms of military capacity. According to the New York Times today.

B (32:24)

The Trump administration wants to increase defense spending in 2026 to more than a trillion dollars. Much of that money will be squandered on capabilities that do more to magnify our weaknesses than to sharpen our strengths. What do they mean? Well, they point out that China's ability to strike US forces has radically expanded. They now have 500 intermediate range missiles, 1300 medium range missiles, and 900 short range missiles. The short range missiles from China are capable of striking South Korea, Japan and Taiwan. Of course.

B (32:53)

The United States continues to direct its money toward gigantic aircraft carriers that take decades to build. The USS Gerald Ford cost $13 billion. Drone war can make it obsolete. There's a point being made by people over at Palantir, for example. Meanwhile, to pretend that China does not have an overall strategy is, of course, silly. China is very strategic in its overall game plan. China has been using for years its Belt and Road initiative in order to make inroads in Africa and in South America. You know, when the national security strategy focuses heavily on the Western Hemisphere. What, What? We should recognize that the threat to the United States is not chiefly Venezuela, it is chiefly China. And China is working with places like Venezuela and Cuba. I'm not worried about the Cuban government. I'm worried about the Chinese using the Cuban government.

B (33:42)

And China is working with Russia, of course. So the national security strategy goes out of its way to wrap the Europeans on the knuckles. That is totally fine with me. The Europeans deserve to have their knuckle, their knuckles wrapped. The Europeans have. Have lived high on the hog by not paying their own defense bills for decades. And, and they simultaneously have imported an enormous number of people from areas of the world that seek to undermine European civilization. That critique from J.D. vance, that critique from the administration, totally correct. However. However, if you wish to instill in the Europeans a new backbone, if you wish to do a spinal injection on the Europeans, you need to point out who their enemies are. And yes, of course, they have internal problems, real internal problems, serious internal problems. But to pretend that the United States ought to take a sort of neutral position between the Europeans and the Russians is not. So. That is wrong. The Russians have overtly made clear their strategy for decades under Vladimir Putin, and that is to expand their sphere of influence to play at being a great power, despite the fact that the Russian economy is smaller than the economy of the state of Florida or Italy. And they want to do so at the expense of the Europeans. Because what the Russians do not lack is Stones. They lack a functioning economy, they lack a functioning democracy. But they have nuclear weapons and they have gall. And so what does that require? It requires that the Europeans in the United States actually work together to stop Russian predations. And yet, if you look at the national security strategy, Russia barely earns a mention. Quote should present trends continues about Europe, the continent will be unrecognizable in 20 years or less. As such, it is far from obvious whether certain European countries will have economies and militaries strong enough to remain reliable allies. Many of these nations are currently doubling down on their present path. We want Europe to remain European, to regain its civilizational self confidence and to abandon its failed focus on regulatory suffocation. Yes, agree with all of that. But the strategy continues. This lack of self confidence is most evident in Europe's relationship with Russia. European allies enjoy a significant hard power advantage over Russia by almost every measure save nuclear weapons. As a result of Russia's war in Ukraine, European relations with Russia are now deeply attenuated and many Europeans regard Russia as an existential threat. Managing European relations with Russia will require significant U. S Diplomatic engagement both to re establish conditions of strategic stability across the Eurasian landmass and to mitigate the risk of conflict between Russia and European states. Okay, let's be clear here. The United States should not pretend to be a neutral broker between Russia and Ukraine. We have a very strong, yes, there's massive corruption in Ukraine. Also there's massive corruption in Qatar, in Saudi Arabia, in a wide variety of nations that the Trump administration has quite warm relations with.

B (36:30)

The idea that we ought to play a neutral role with regard to the Russians or that the Russians are about to flip and suddenly become a pro American power. That is foolishness. It is absurd. It is not true. The Russians are adversarial to what they call Atlanticist interests, which is predominantly the United States. So when the national security strategy says it is a core interest of the United States to negotiate an expeditious cessation of hostilities in Ukraine in order to stabilize European economies, prevent unintended escalation or expansion of the war, and re establish strategic stability with Russia, what does strategic stability looks like when when Russia is an aggressive power? The Trump administration is quite properly called the Europeans on the fact that they have continued to purchase Russian gas. What we should be doing is providing them American lng. We should be strengthening our relations with them in the face of Russia's increasing predations. Because of course, Russia and China are working in tandem according to the new national security strategy. Quote, the Trump administration finds itself at odds with European officials who hold unrealistic expectations for the war, perched in unstable minority governments, many of which trample on basic principles of democracy to suppress opposition. Okay, yes. There are problems in places like France with suppressing the Right. There are problems in places like Romania with suppressant. We've talked about this on the show. To somehow call the Europeans on the quote, unquote, suppression of minority political rights while making room for the Russians where there are no minority political rights. You find yourself flying off a fourth story balcony if you oppose Vladimir Putin in Russia is kind of absurd. A large European majority says the national security strategy wants peace. Yet that desire is not translated into policy in large measure the because of those governments subversion of democratic processes.

B (38:19)

Okay, this is.

B (38:22)

This is the reverse of what the actual situation is. Yes, the Europeans, there are many Europeans on the right who would like to cut a separate piece with Russia. No, that would not be good for the United States if Russia somehow earns itself a gigantic chunk of Ukraine and another invasion of Ukraine in the next five, 10 years.

B (38:43)

The notion that we ought to be chiding the Europeans on their democracy, but not chiding, we should try to everybody but chiding the Europeans and not chiding the Russians and pretending neutrality. I mean, I can see why the Russians are trying to expand their foothold in Ukraine.

B (38:59)

I mean what, what guarantee could a United States that puts out that in the national security strategy give to the Ukrainians to get them to, to stop fighting? Like what security guarantee would be trustable under those circumstances? You can see why Vladimir Zelensky, again, none of this excuses the corruption inside the Zelensky regime in Ukraine. None of it. I asked Zelensky directly about corruption in Ukraine when I visited with him in Kiev. You can watch the interview. But you can see why Zelensky is refusing to cede land to Russia. Why? Because he doesn't have any security guarantees from a country that is attempting to equate Russia's predation with European multi party democracy, which is not even remotely on the same scale as what's happening in Russia. Donald Trump Jr. In Qatar of all places, which, yes, is a terror supporting slave state. Okay, let's just be clear. Qatar can be a strategic ally of the United States in certain respects, including Al Udait airbase. And also they can in fact be a terror supporting slave state, which is what they are.

B (39:58)

Human slavery is alive and well in Doha. Who do you think is building all of their beautiful buildings? They have a population, a citizenry in, in Qatar of something like 300,000 people. But that ain't the population in Qatar already coming up. We'll get to Qatar. What people are saying there about Russia, it's a little weird. First, this Christmas season, you could actually help change a life. Actually two lives. Picture a young woman who just found out she's pregnant and wasn't expecting it. She's scared. Maybe she doesn't have much support. She's not sure what her options are. Well, that's exactly who our sponsor Preborn Ministries is there for. They offer free ultrasounds and counseling to women facing these tough decisions. Sometimes just seeing that ultrasound and talking to somebody who cares makes all the difference. If you're looking for a meaningful way to give this year, this might be worth considering. Steve Jobs, Celine Dion, Steph Curry, these were all unplanned pregnancies. Maybe you were too. Maybe somebody you love was. Life has a way of working out differently than we expect. When a woman is facing that difficult decision. Preborn is there to help. When a woman sees her baby's ultrasound at preborn, everything can change. That moment often gives her the courage to choose life. This Christmas, just 28 bucks can sponsor an ultrasound. And right now your gift is doubled through a matching Grant. To donate D£250 and say baby or visit preborn.comBen that's £250 keyword baby or preborn.com Ben, you're not going to do anything more important this year? Go help out our friends over at Preborn right now by dialing pound250 and saying baby or visit preborn.com Ben I asked our sponsors over a comedy project of perplexity. What is the population of Qatar and how many citizens are there? Qatar's total population is 3.1 million people. That's the total population. How many citizens are there? Somewhere between 330,000 and 360,000. 90% of the people living in Qatar are not citizens. They cannot vote. They have no actual serious legal rights there. Not only that, when you ask Comet how many of these expatriates are either slaves or indentured foreign laborers? The Global Slavery index estimates about 20,000 people in Qatar are living in modern slavery. That would be forced labor or forced marriage around 2020, 2021. But not just that. Human rights organizations report migrant workers make up over 90% of Qatar's population and 95% of its labor force. And many low paid workers experience serious abuses under or linked to the Kalafa, the Kafala sponsorship system. Documented problems including include passport confiscation that is where a foreign worker shows up and their boss takes their passport so they can't leave. So now they're stuck there and they can't get out. Restrictions on changing jobs are leaving the country unpaid or delayed wages, debt bondage through recruitment fees, which can amount to conditions resembling de facto slavery or indentured servitude for some workers.

B (42:31)

And Qatar uses that money in order to apparently pay pretty much everybody to head on over to Qatar. And Qatar uses that money to pay for a gigantic propaganda operation in the west, to pay for its sponsorship of soccer teams in London and ownership of of half of the assets in, in the UK and also to pay people to come over to Qatar and talk warmly about how magical Qatar is. Donald Trump Jr. In Qatar, which again plays a, shall we say, middle role between the United States and adversaries of the United States, including places like Russia. He suggested in Qatar that the United States may walk away from Ukraine.

D (43:12)

Because of the war and because he's one of the great marketers of all time. Zelensky became a borderline deity, especially to the left, where he could do no wrong. He was beyond reproach. Years of corruption, years of graft and theft on a world stage that everyone in this room knew was happening was totally absolved.

B (43:30)

And it's ridiculous.

D (43:31)

We're not dealing in reality.

B (43:33)

But is your hunch that President Trump is going to walk away?

D (43:38)

I think he may. What's good about my father and what's unique about my father is you don't know what he's going to do. The fact that he's not predictable, he's not following the playbook of every clown who's again been a bureaucrat for decades. You don't know.

B (43:55)

Now, again, I believe that President Trump will do the right thing with regard to Ukraine because there's one thing he doesn't want, which is the perception of American weakness, including, for example, Russian troops strolling through Kiev because of a cut and run strategy in Ukraine. I will say that the disproportionate focus put on Ukrainian corruption sitting in Qatar, one of the most corrupt states on planet Earth, it is legitimately a dictatorial monarchy, is pretty astonishing. It's pretty. And if you think that America's enemies don't take. No, they absolutely do. They absolutely do. And that has some consequences. Now, again, some of what's going on with regards to China has political considerations attached. In the United States. One of those political considerations has been Chinese restrictions on soybean exports from the United States to China. Just another reason why a free trade system promoted by the United States. Yes. Using tariffs to ratchet down tariffs that other countries have put on us would be superior to throwing up tariffs on the entire world and then having to cut deals with the Chinese. So America's farmers, particularly soybean farmers, have been harmed by the trade war between the United States and China. President Trump says that soybeans are now being exported to China. Here's what he had to say.

C (45:06)

Since my successful meeting in South Korea with President Xi, purchases have been made, and soybeans are being exported out of the United States to China as we speak. And I say that our soybeans. I about talked this to President Xi. Our soybeans are more nutritious than competitors. Somebody said, is that a Trump statement or is that real? In fact, you know who asked me that question? President Xi asked me that question. He said, really? I had never heard of it. And he was a food purchaser for a long time.

B (45:38)

Yeah, I mean, that's all fine, okay. But the reality is that if we have to cut deals on Nvidia chips so we can open up their markets on soybeans, that seems like a bad deal to me. It also means that because of all of the tariff conditions, and again, it's just not just us tariffing other countries, it's also just the roiling economy that's. That's forcing a bunch of other countries to try and now make common cause with other countries as trade shifts away from the United States. In other words, as that happens, we have to keep bailing out farmers. So yesterday, President Trump announced a farm bailout.

C (46:10)

What we're doing is we're taking a relatively small portion of that, and we're going to be giving and providing it to the farmers in economic assistance. And we love our farmers. And as you know, the farmers like me, because, you know, based on. Based on voting trends. You could call it voting trends or anything else, but they're great people. They're the backbone of our country. So we're going to use that money to provide $12 billion in economic assistance to American farmers.

B (46:43)

Okay? So, again, those are some of the consequences that happen when, in fact, you have mercantilistic policy on all sides, is that you require payoffs. Now, what does all this mean for affordability? Are things getting more affordable? Well, the inflation rates have obviously come down. They've come down because. Well, I've been very critical of the trade policy of the administration. We've had great deregulatory policy under this administration, and Excellent tax policy under this administration. And President Trump is right when he says the Democrats caused the affordability problem. Here was the president yesterday.

C (47:14)

We inherited a mess.

C (47:17)

Affordability, but you can call it affordability or anything you want, but the Democrats caused the affordability problem and we're the ones that are fixing it. So it's a very simple statement. They caused it, we're fixing it.

B (47:33)

Okay? He's not wrong about that. At the same time, the only way that people are going to feel the dynamism of the American economy is if we actually allow for the dynamism of the American economy, broad scale. That doesn't mean picking and choosing winners and losers. It doesn't mean taking stakes in private companies. It means allowing the economy to roar. President Trump knows how to do that, and that's what he should do. And by the way, liquidity is not going to be the problem because apparently the expectations for the rate cut are really, really, really high from the Federal Reserve. According to Axios, the likely outcome of a two day Federal Reserve policy meeting that concludes Wednesday would be one more rate cut that will probably be last for a while. The final signals from hawks, doves and Fed leadership all point to an accord of sorts that the Federal Open Market Committee probably will cut its interest rate target by a quarter point on Wednesday, while signaling a high bar for when it may do so again, which again makes sense. I mean, I'm not sure that I'm even in favor of the rate cut at this point. It seems to me that there's plenty of liquidity in the economy. With that said, liquidity is not going to be the problem. The problem is going to be how do we outcompete everybody else? That is the thing that matters. Other things the GOP could do right now, obviously cracking down on welfare fraud would be a big one. The President has focused a lot on illegal immigration. But the actual bigger story with regard to Minnesota is the the gigantic presence of huge bags of government cash inevitably leads to fraud. These programs are not efficient. They do not achieve the goals that they seek. Generally speaking, a fascinating story from the Wall Street Journal today talking about the sort of welfare fraud that is actually far more common than what we saw in the Somali community in Minnesota, and that is people just lying about their conditions in order to achieve welfare. According to the Wall Street Journal, diagnosis rates of autism among children have more than tripled over the past 15 years. One reason which Minnesota's welfare scandal lays bare with shocking details is Medicaid fraud and abuse. Is Alicia Finley writing Medicaid pays healthcare providers big bucks to diagnose and treat children with autism, sometimes tens of thousands of dollars a month for a single child. Yet states rarely verify that kids who are diagnosed actually meet the medical criteria for the disorder or that they get appropriate treatment from qualified specialists. The result? Children covered by Medicaid or the government run Children's Health Insurance Program are two and a half times as likely as those with private coverage to be diagnosed with autism. Many lower income kids are labeled autistic merely because they have behavioral or developmental problems. So if you want to look at the tremendous number of increased autism diagnoses, one of the reasons for that, of course, is because if you pay people more based on their diagnosis of autism, you're going to get more autism diagnoses. In Minnesota, the number of autism providers soared 700%. Payments to them increased 3,000% between 2018 and 2023.

B (50:22)

All of this underlines broader problems with America's social welfare industrial complex. Liberals measure success by how much money is spent rather than outcomes, and they accept waste and fraud and abuse. This is particularly true in our disability system. The number of people claiming disability in the United States. And you think disability. You think some dude racked up his back and legitimately can't work anymore? Somebody lost a leg in a coal mining incident. Disability now applies to tens of millions of people, most of whom are not in any real sense disabled. But they can claim disability with very little evidence. And now they're on the government dole.

B (50:56)

Giant sacks of cash at home, bankrupt. The economy. They are a drag on the economy. Of course.

B (51:03)

You know, the the generalized fact is that if you want to increase the dynamism of the American economy, you need to jettison the ballast. There is too much ballast, and there are ways around some of the ballast. For example, if you let the market work. So one sort of green shoot in terms of letting the market work. According to Peter Loftus reporting for the Journal, drug makers are moving to sell their medicines directly to patients, abandoning the middlemen they've long relied on. The shift is a huge departure from how pharmaceutical companies including Eli Lilly, Novo Nordisk and Pfizer have sold drugs for decades and threatens the multi billion dollar business of firms that have traditionally filled prescriptions. It's saving some patients hundreds of dollars off the cost of prescriptions because companies have been lowering the prices for drugs sold directly. In the meantime, drug makers who've been rolling out the services in recent months see a big opportunity to boost sales, though they risk losing revenue if they don't offset lower prices by selling to more patients.

B (51:58)

According to Pratab Kedkar, the chief executive of pharmaceutical consulting firm zs, for the first time, pharma is looking to end. Sorry, for the first time, pharma is actually looking end to end at the full patient journey. So you can see it in the weight loss market where people are actually selling directly to consumers.

B (52:17)

Now that is actually a good thing because if you move through an insurance system then very often you are paying way too much or the insurance company is giving you a fake bill. They then negotiate it down and they pay it. They'll tell you that it cost them a thousand bucks for a dose and then they're not going to pay a thousand bucks. They go and they negotiate it with the provider and then they are reporting that they're getting a certain level of discount. So for example, one person gets his health insurance through a Medicare plan that doesn't cover the the weight loss drug Zepp Bound. He said, quote, it was 1,050 bucks at Costco when I started and the vials weren't available. As soon as it was offered at 550 bucks in the vial, I switched. And then he used the savings to help his daughter in law pay for her prescription for the drug.

B (53:03)

Again. Let the markets work, the price goes down. Don't let the markets work, the price goes up. This also applies to things like H1B visas. I know this is very controversial stuff now because we're supposed to believe that Illegal immigration and H1B visas are perfectly coincident. It's the same policy question. It is absolutely not the same policy question. For the 1000th time, there are fixes we can make to the H1B system. If you want the educational level to be higher for people coming in, fine. If you want to make people pay a fee depending on the company that's applying. Open, open question. But to pretend that raising the cost to bring in additional labor doesn't impact the price on the other end is obviously untrue. And so one of the factors in health care costs, particularly in rural areas, is that many of the health care providers in rural areas of the United States, places where many Americans who have graduated medical school don't want to move, are being filled by people who are actually on H1B visas. According to the Washington Post, after President Trump signed an executive order restricting H1BS in September, soaring costs are roiling rural healthcare facilities that have long struggled to find staff. The fee increased for visa applicants, coupled with broader crackdowns on legal pathways for foreign born workers threatens a growing industry and jeopardizes patients who need timely care, according to some labor experts and immigration lawyers. Again, these are open questions. But pretending that economics are not a matter of trade offs, that is what economics literally are. They are a matter of trade offs.

B (54:31)

Now, I know that it's become unpopular to talk policy. I get it. I know that when we talk policy some people's eyes glaze over because it's more fun to talk about the rock em sock em robots of politics. But the reality is that once you are in power governing things better get better and more solid. That is going to be the question for Republicans in 2028. It is much easier to campaign when you're out of power than it is to campaign when you are in power. That is just the reality of the situation. And so if the Republicans wish to be victorious in 2026 and 2028, they're going to need to deliver. They've already delivered on many fronts. They're going to need to deliver an even broader fashion on economic affordability, which means really economic robustness and a national security strategy that strengthens our allies at the expense of our enemies already. Coming up, we'll talk about Jasmine Crockett. The crazed Democrat from Texas now wants to run for the Senate. We'll see how it goes for her. Cotton It's a bold strategy. Remember, in order to watch, you have to be a member. If you're not a member, become a member. Use code Shapiro. Check out for two months free on all annual plans. Click that link in the description and join us.

C (55:40)

Sat.