Ben Shapiro (34:13)
Again, this is going to be the proper Democratic position, but that is not what they're going to say in the moment. And that is what's amazing. The Democrats always feel the necessity to try to outrace their most extreme supporters. Hillary Clinton is jumping into that, by the way. I don't know why people still think that people want to hear from Hillary Clinton. I don't know why Democrats want to hear from Hillary Clinton. If Hillary Clinton had run a half decent race in 2016, the entire Trump era probably never would have happened. Which is kind of astonishing. Whenever they bring her back up, try to revive her, it's kind of insane. She has an entire piece at the Atlantic entitled maga's War on Empathy. And it's all about how, of course, Republicans don't care enough. And that's what's really the problem, is Republicans don't care enough. And this is such tiresome nonsense. It's tiresome. And the reason it's tiresome is because caring about things does not necessarily mean that you have the solution to the problems. The question in politics is, how do you solve the problems of people? Caring is not enough. Okay? Being empathetic is not enough. And empathy, when misdirected towards specific groups at the expense of other groups, is a real problem, as psychologist Paul Bloom has written about extensively. But according to Hillary Clinton, it's all about the lack of empathy. Again, what she's doing here politically is she's pushing on what is a sore spot for the Trump administration, because the Trump administration sort of makes a virtue out of bravado. And so she's trying to push back against that by being the kinder, softer party. That's what she's doing here. She says the crisis reveals a deeper moral rot at the heart of Trump's MAGA movement. Whatever you think about immigration policy, how can a person of conscience justify the lack of compassion and empathy for the victims in Minnesota and for the families torn apart or hiding in fear, for the children separated from their parents or afraid to go to school? That compassion is weak and cruelty is strong has become an article of MAGA faith. Trump and his allies believe the more inhumane the treatment, the more likely it is to spread fear. And that's the goal of surging heavily armed federal forces into blue states. Other recent presidents and then she names Biden, Obama, Bush and Clinton managed to deport millions of undocumented immigrants without turning American cities into battlegrounds or making a show of keeping children in cages. Okay, this is just, it's just horse, okay? It's just nonsense. It's not true. Barack Obama is the children in cages guy. And the vaunted empathy of Barack Obama led to riots in the streets. The vaunted empathy of Joe Biden led to some of the worst policy failures in the history of the United States. But I guess when Democrats don't have political victory, they have to go for empathy instead. Well, on the political level, it appears that President Trump and Chuck Schumer, the Senate minority Leader, have now reached a deal to stave off a government shutdown. According to Fox News, Senate Democrats and the White House reached a deal to fund the government. Lawmakers aren't out of the woods on averting a partial shutdown. So apparently Schumer and Trump labored over a deal from late night Wednesday until Thursday evening after the top Senate Democrat unleashed several funding demands and the White House accused Schumer of blocking a meeting with rank and file Democrats. Trump said in a post on Truth Social. The only thing that can slow our country down is another long and damaging government shutdown, schumer said. The separation of the five bipartisan bills the Democrats asked for, plus the two week DHS continuing resolution has been agreed to. So they've staved off a government shutdown for a couple of weeks here and a full government shutdown will not happen. Now the question is going to be what happens with dhs? President Trump said. I'm working hard with Congress to ensure that we are able to fully fund the government without delay. Republicans and Democrats in Congress have come together to get the vast majority of the government funded until September, while at the same time providing an extension to dhs. The deal brokered would have the DHS funding bill stripped from the six bill package. Schumer and Democrats have been adamant that if the bill were sidelined, they would vote for the remaining five. So there will be a short term funding extension for dhs. That came after there was a test vote that happened yesterday on the funding package where Senate Democrats and seven other Republicans basically killed that funding bill so that that is the. That is the current status of negotiations. Democrats, for what it's worth, are trying to cripple DHS without defunding dhs. As the Daily Wire's Virginia Cruda and Jenny Terry report, they're attempting a backdoor amnesty by changing the law. One issue that apparently has Democrats coalescing is a requirement we've talked about on the show that federal agents acquire judicial warrants rather than administrative warrants for immigration arrests. And they're really pushing hard on this. One source told the Daily Wire. There would be no more immigration arrests. It's the functional equivalent of getting a warrant before issuing a speeding ticket. It's the entire reason why administrative arrests exist in the first place. If every single illegal alien who is charged with entry without inspection was treated like a criminal arrest, they would have, among other things, right to counsel provided by the United States, and that would be impossible. So the goal, presumably for Democrats would be to kill immigration enforcement. Republicans are not going to go for any of that. So Democrats are going to continue to try to campaign on this. I think Homan is bringing down the temperature. President Trump is trying to bring down the temperature. And it seems to me that Democrats are now engaged in a massive overstep, which I assume is one reason they are focusing in like a laser beam on the Don Lemon arrest, trying to claim that Trump is shutting down the First Amendment for going after Lemon. And we'll see the evidence provided by the DOJ in pursuit of a conviction of Don Lemon in terms of violation of the Face Act. In other big news, the president has now selected a new Fed chair. That person is Kevin Warsh. There is some speculation that might be Kevin Hassett. Warsh is definitely a better pick. According to the Wall Street Journal, President Trump said on Friday that he would nominate Warsh to be the next chairman of the Federal Reserve. He put out a statement saying, I've known Kevin for a long period of time and have no doubt he will go down as one of the great Fed chairman, maybe the best. On top of everything else, he has central casting and he will never let you down. You got to love the fact that President Trump kind of picks his cabinet officials based on how they look on tv. Warsh is quite good on tv, by the way, and his economic philosophy is really interesting. It is growth oriented, for sure. He had served on the Fed's Board of governors from 2006 to 2011. He would succeed, obviously, Jerome Powell in mid May. It is Trump, by the way, who decided that it would be Powell and not Warsh. Originally, he will have to be confirmed by the Senate. Senator Thom Tillis, who sits on the Banking Committee, wrote on social media that Warsh is a qualified nominee with a deep understanding of monetary policy. But he also wants the DOJ probe of the Federal Reserve, and particularly of Jerome Powell to go away before there is any sort of confirmation, because the idea is that that is a pressure tactic on whoever is the Fed chair to lower the interest rates. President Trump wants lower interest rates. Warsh left the Fed 15 years ago. He spent much of the time since cataloging how he thought the institution was was going astray. The Wall Street Journal says that the transition could mark the most significant changing of the guard at the Fed since 1979, when Paul Volcker took over and dramatically reoriented the institution's approach to inflation. Every chair since Greenspan replaced Volcker has emphasized continuity with his or her predecessor. Warsh wants a clear rupture, a wholesale rethinking of the Fed's asset holdings, policy framework, role in the economy, and relationship with the executive branch. So what exactly does he want? Well, the Wall Street Journal editorial board is very much in favor of the Wash pick. As they point out, Warsh has been arguably the leading voice in public life for reforming the Fed. He left the Board of governors in 2011 after chairman Ben Bernanke made vast bond buying a permanent part of Fed policy, rather than an emergency resort. Warsh at the time said that the Fed, in its quantitative easing, that is where the Federal Reserve essentially buys bonds from banks to inject liquidity into the economy. So we have this weird rigamarole in the American government where the Treasury Department issues bonds. The bonds are sold via this special VIP group of banks. A huge chunk of those bonds are then sold to the Federal Reserve, which holds the bonds and puts a bunch of assets like money on the balance sheet of the banks. And then the banks lend that money out. That is one of the ways that you end up with more money in the economy, because the Federal Reserve basically creates a number on paper and it passes that number along to the banks. The banks then lend that money out. That's how you inject liquidity, via quantitative easing. Warsh is an inflation hawk, but he has a plan to both lower the interest rates and keep inflation low. He says that the Federal Reserve has taken on far too broad a role in economic policy, which of course is exactly right. He wrote in April 2025. In my view, forays far afield for all season. All reasons have led to systemic errors in macroeconomic policy. The Fed has acted more as a general purpose agency of government than as a narrow central bank. He says they've wandered into fiscal policy with their bond buying, basically buying up a bunch of assets in order to bolster federal spending. And that's not even including the climate change and financial regulations pushed by the Biden administration. So what exactly is Kevin Warsh's plan? Well, first you sort of have to understand how the Federal Reserve generally injects liquidity into the economy or removes it. There are a lot of vehicles for doing so. The two main ones in the past several decades have been one something called open markets operations. This is where the Federal Reserve buys those bonds from the banks, as we mentioned. They, of course, are getting them from the Treasury Department. This injects money into the bank accounts of the banks and then the banks lend that money out. Right. So that means more liquidity, more availability for loans in the economy. And then there is something called the Federal funds rate, which is the interest rate offered by the Federal Reserve for banks to keep their money there. So if you keep your money in a Federal Reserve bank and you're a bank that has its reserves, there's. The Federal Reserve offers a particular interest rate when that interest rate is low, that encourages banks not to put their money with the Federal Reserve, but instead to lend it out for the prospective gain. If a bank just like you, if you can keep your money in the bank at 2% or invest it at 7%, you're going to invest it at 7%. The same thing is true of banks. So in the past, we have participated in massive open market operations. Right? That's what we're talking about with Ben Bernanke. That's what we're talking about with Alan Greenspan. And that's really what we've been talking about for the past several years, consistent bond buying by the Federal Reserve, injecting liquidity into the economy that way. That's what quantitative easing was kind of broad scale. And also we had a low Federal funds rate, which again encouraged banks to inject more liquidity into the economy. Kevin Marsh believes this is a screwed up way of doing things that encouraged inflation under Joe Biden because you're injecting liquidity both via buying bonds and also by keeping the FFR low, but also stagnation as we move forward. Because, because of the inflation, we're now having to increase the Federal funds rate. Right, that's, that's what we mean. We say we're increasing the, the, the interest rate in order to quash inflation. We're making it so that banks would rather keep their money at the Federal Reserve than actually send it out for investment. So he thinks that essentially we gummed up the works, that the banks sold bonds to the Fed which made money for the banks. And then the banks, instead of spending that money or putting that money out into the world, parked their money at the Fed to earn the 5% interest rate. And so the investment economy, he thinks, is stuck. So his goal is to have the Federal Reserve sell off a gigantic portion of its bonds. This would remove reserves from the banks and also mean the Federal Reserve is no longer subsidizing the least effective parts of the economy. The government driven parts of the economy also simultaneously lower those interest rates, which is what President Trump wants. And this would then encourage banks to invest in Main street and business rather than just parking their money at the Federal Reserve. This would simultaneously reduce the risk of a major bond led implosion when all of those bonds come due and the Federal Reserve has to pay it off and inflate the currency in order to do that. And it would stimulate economic growth. And so his assumption is normally when you end up selling a bunch of bonds back into the market, that means that the bond rates for future bonds have to rise. Because if you can buy a bond really cheap right now, when the market is flooded, then in order to get people to buy new bonds, you have to have a higher facial interest rate. What he's hoping is that that won't happen because instead people will invest in bonds based on the fact that they know that the American economy is growing. So driving more money into the AI investment arena via lower FFR and also getting rid of the bonds at the Federal Reserve level. He's hoping this will ungum the works essentially and you'll get an honest level of inflation in the economy that is very low and also high growth rates. That is, that is what he is looking for. And all of that is predicated on significant long term growth for the United States. This is what he was writing back in November of 2025 or a piece for the Wall Street Journal. What he said was America's real comparative advantage is its workers of all stripes, everywhere from factory floors to drilling rigs, corporate cubicles to garage startups who devise new ways of doing business. The result is a revitalized nation of doers, risk takers and an entrepreneur Mark Andreessen's simple framing builders. He says Wall street and Silicon Valley are booming and US workers are finally getting a step up in their real take home pay. Even so, the benefits of the American juggernaut are yet to be fully realized. Among the chief obstacles is the Fed. What is to be done? Well, first, the Fed should discard its forecast forecast of stagflation in the next couple of years, as if subpar growth and inflation 40% above target is the best that can be done. AI, he says, is going to bring prices down. So that will be disinflationary because if productivity goes up, that means higher supply, that means lower prices. He says that AI will increase productivity and bolster American competitiveness and that should drive significant increases in real take home wages because things are going to be cheaper so they'll be more affordable. Second, he says inflation is a choice. The Fed should re examine its great mistakes that led to the great inflation. It should abandon the dogma that inflation is caused when the economy grows too much and workers get paid too much. Inflation is not caused by that. It's caused when the government spends too much and prints too much. And he says that is largely because the Federal Reserve is making money appear out of thin air to buy the bonds. So stop doing that. That's what creates inflation. Inflation is not when banks lend out money. Inflation is really more when the Federal Reserve is injecting liquidity into the economy that didn't exist before. Third, he says the Fed should take responsibility for regulatory failures, including a deposit run on banks in late 2022 and early 2023. He says the Fed's rules and regulations have systematically disadvantaged small and medium sized banks and that has slowed the flow of credit to the real economy. And fourth, we should stop trying to hold ourselves to the regulatory standards of Europe. All of this seems basically right to me. But the key is this. It's a big bet, a really big bet on the growth of AI. That's really the thing that he's counting on. Now, there are risks to the strategy because there are costs and benefits to every strategy. If because the bonds are being resold to the banks, the reserves of the banks runs low, then theoretically, if there is any sort of squeeze on the banks, then banks would have to increase their own interest rates to the public and mortgage rates and credit card rates and all of it would go up, or it's possible that a decrease in the ffr, the interest rates could cause the economy to heat up a lot and people will start taking out money to speculate wildly and then you get some sort of inflationary result. His point is that that's not real inflation. Real inflation is when the government is full Scale creating money on a computer and it just goes out into the world, which really only happens via open market operations. Or it's possible that the interest rates on bonds could spike as the market is flooded with bonds that are now being injected back into the economy. And if those interest rates have to spike, then our debt becomes significantly more burdensome and the bond market softens and it's harder for us to actually spend on the governmental level. What's the bottom line here? Warsh's strategy is to bet on growth and innovation in the private sector, which is why he's a good pick. He is a good pick. Wash does have a strategy. It is definitely not a risk free strategy, but there's no such thing as a risk free strategy. The biggest thing that he is doing is he is saying that the Federal Reserve should no longer be the chief policy maker when it comes to the economy. Instead, the Federal Reserve should basically be there as a backstop. And that's kind of it. Which is the original concept of the Federal Reserve. It was instituted to prevent runs on banks. And he's saying they should basically go back to that, Set a low overnight rate, keep that Fed's rate low. And that's, that's kind of the main mandate that, that is the thing that he is pushing. And that seems eminently correct to me. Now, Democrats do have a problem moving forward here. The biggest problem they have is the 2030 apportionment forecast. This is a map. The map shows the 2030 apportionment based on 2025 population estimates. This is from Carnegie Mellon University. It shows Texas picking up four seats. Florida picking up four seats. California losing four seats. It shows states like Arizona picking up one. It shows North Carolina picking up one. All of the loss of seats is happening in blue areas. It's happening in Illinois. It's happening in New York. It's happening in a wide variety of of blue areas. Michigan also would lose a seat. Wisconsin would lose a seat. Bottom line is that under that scenario, if this had been the map in 2024, Trump would have won 11 more electoral college votes. So the map is moving pretty strongly against Democrats in terms of the demographics because so many places are picking up population. In red areas. There has been a significant blue to red move. Our company Daily Wire did this. My family did this. The population changes that are occurring are really significant. Nine states have gained more than 60,000 residents from July 2024 to July 2025, according to the American Redistricting Project. Those states are Texas, Florida, North Carolina, Georgia, South Carolina, Washington, Arizona, Tennessee, and Virginia. Of those nine states, seven are pretty solidly red. Five states have lost population in that same period. West Virginia, New Mexico, Vermont, Hawaii, and California. The only one of those that's red is West Virginia. And the population losses would be greater for a lot of those blue states if you don't include foreign immigration. This is a major problem for Democrats. And so Democrats basically have to hope that either Republicans go over their skis here and pursue policies that are wildly unpopular, or they have to moderate. They have to. And it's kind of incredible that Democrats are seeming to radicalize even as the map moves away from them. It's a. It's a hell of a political move. Meanwhile, it does suggest it creates at least the motive for the possibility of problems in the voter rolls. Pramila Jayapal, leader of the Congressional Progressive Caucus, she's out there railing against voter ID still.
