Sam Stein and Talmon Smith: Brain Drain

Summary

The Bulwark Podcast – "Sam Stein and Talmon Smith: Brain Drain"

Date: August 28, 2025
Host: Tim Miller
Guests: Sam Stein (Managing Editor, The Bulwark), Talmon Smith (Economics Reporter, NYT)

Episode Overview

This episode takes a sobering tour through recent American crises—mass shootings and government dysfunction—before examining the political assaults on key institutions like the CDC and Federal Reserve. Tim Miller brings on Sam Stein to reflect on persistent gun violence, the disturbing trend of expert “purges” from government agencies, foreign policy missteps, and the state of Democratic strategy. The conversation then pivots to Talmon Smith, who unpacks the attempted firing of Federal Reserve Governor Lisa Cook, the implications for economic stability, and the anniversary of Hurricane Katrina as a lens on inequality and resilience.

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Key Discussion Points and Insights

1. The Minneapolis School Shooting and America’s "Groundhog Day" Tragedy

[00:58–11:44]

• Reflections on Tragedy Fatigue:

  • Sam Stein describes mass shootings as having become so customary that their "lack of extraordinaryness is the defining feature" (01:40).
  • Personal impact: Sam now has children doing shooting drills at school, deepening the fear and dread.
  • Critique of cultural response: Both Tim and Sam bemoan how shootings immediately become fodder for partisan blame games, with people hoping the perpetrator aligns with the opposing political side.

    "There seems to be like this natural instinct inside you that immediately goes to, I hope it was the other guys that did this one ... we have to re-deprogram ourselves from all of that." – Tim Miller (04:02)

  • Disgust at efforts to slice statistics: e.g. right-wing attempts to attribute mass violence to trans people or other minorities miss the fundamental issue—America’s easy access to guns.

    "There is one underlying feature through all this. Easy access to guns." – Sam Stein (05:42)

  • The futility of "fortifying schools": Shooters simply bypass security measures; without addressing gun access, solutions are superficial (05:55).

• Failures in Domestic Terror Prevention:

  • Miller questions why law enforcement isn't picking up obvious threats posted openly online, pointing to a broader government deprioritization of domestic terror in favor of immigration crackdowns (07:43–09:23).
  • Stein: Red flag laws work, but the proliferation of easily accessible firearms is the main issue regardless.

• Media & Policy Response:

  • Criticism of politicians (focusing on SSRIs rather than policy), especially the HHS secretary, RFK Jr., who instead targets antidepressants and spouts pseudoscience about "mitochondrial challenges" in children (10:10–11:48; see also [17:38–21:34]).

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2. Government Expert Exodus—CDC, Federal Agencies, and the "Brain Drain"

[13:27–23:39]

• CDC Mass Resignations:

  • Reports of a “purge” at the highest CDC levels as experts resign rather than participate in policies they believe "could hurt people" [quoting a resigning official: "[I would] protect science until they were asked to do something that could hurt people"] (14:40).

    "We're at a place where our trusted public health officials ... believe that our leadership is actively hurting the population. And wrapping your head around that is really hard." – Sam Stein (15:19)

  • Context: The CDC director was told by RFK Jr. (now HHS head) to support anti-vaxx stances, such as restricting COVID boosters, or fire staff who refused. When the director refused, top officials quit in protest.

• Intimidation and Attacks on Institutions:

  • Two weeks prior, a man fired hundreds of rounds at CDC headquarters, motivated by vaccine conspiracy theories, further deterring experts from public service (15:19).

• Who Fills the Void?

  • With top experts leaving, the government becomes less attractive to serious professionals.

    "If you are a scientist with any credibility, like, why the hell would you go into the CDC at this point?" – Sam Stein (17:12)

  • Satirical description of RFK Jr. (Bobby) diagnosing children in airports with "mitochondrial challenges," mocking pseudoscience now shaping public health (17:38–21:34).

• Broader Purges Across the Government:

  • Key firings in a single week: Deputy Treasury Secretary, CDC Director, Defense Intelligence Agency director, Fed Board governor, and others.
  • Intelligence staff losing clearance, FEMA personnel warning of catastrophic understaffing.

    "The failing government's going to fail on a profound level on multiple fronts." – Sam Stein (23:01)

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3. Foreign Policy: Ukraine, Russia, and the Administration's Weakness

[23:39–28:24]

• Escalation in Ukraine:

  • Russian missile/drone attacks kill at least 18 in Kyiv, including four children—seen as a devastating indictment of U.S. strategy (24:35–26:36).

    "Putin is just basically saying fuck you. Haha. He's laughing in his face." – Tim Miller (25:43)

• Negotiations and the "Nobel Peace Prize" Farce:

  • Trump’s approach to Russia characterized as inconsistent and obsequious, with his negotiators seeking accolades rather than results.
  • Sarcastic discussion of Trump deserving the Nobel Peace Prize as children die in Kyiv (26:45–28:24).

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4. Democratic Party Strategy: Israel, China, and "Fight Songs"

[28:24–36:45]

• Israel/Gaza Policy Shift:

  • Reflection on interview with Jake Sullivan (Biden’s National Security Adviser): Notable shift toward conditioning military aid to Israel if its government doesn’t change course—a stance that would have been "unthinkable" just a few years prior (29:34–32:50).

    "For Jake Sullivan ... to say, yeah, we're at a place where you can condition weaponry to Israel ... that would have been unthinkable two or three years ago." – Sam Stein (32:12)

• China and Democratic Messaging:

  • Need for Democrats to go on offense over Trump’s failures with China, both on economic and security grounds (33:10–34:29).

• Democratic Party Tone:

  • Irony and mockery over the DNC’s new, limp "fight song"; calls for the party to focus on essentials: voter registration, fundraising, and attacking Trump, not "making songs" (35:42–36:45).

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5. The Federal Reserve "Purge" and Risks to U.S. Economic Stability

Guest Segment: Talmon Smith

[37:24–59:40]

• Why the Fed Board of Governors Matters:

  • The Board stands at the heart of the FOMC, setting interest rates, regulating the money supply, and aiming for both "stable prices" and "full employment."
  • Appointed for 14-year terms to guard against political interference. The attempted firing of Lisa Cook represents unprecedented encroachment (38:33–40:48).

• Mechanics of the "Purge":

  • Trump’s administration, via the FHFA, is using spurious mortgage allegations to try to remove Cook.
  • Discussion of the risks if Trump replaces Cook (and perhaps others) with loyalists:

    "It is very hard to believe that if Trump said jump, [Fed loyalist Stephen Myron] at this point wouldn't say how high." – Talmon Smith (43:16)

• Consequences if Independence Erodes:

  • If the Fed is seen as compromised and no longer independent:
    • The U.S. dollar could depreciate.
    • Treasury bonds could sell off, raising borrowing costs for government and consumers (mortgages, auto loans, credit cards).
    • U.S. "hard power" predicated on dollar dominance would be at risk.

    "If markets think that Trump has put in a hack ... you could see a drop in the dollar that isn't just an overnight flinch based out of fear, but based on an active decrease in central bank independence." – Talmon Smith (50:55)

  • Political irony: Attempts to lower rates and help the economy could backfire, worsening conditions for Trump’s own supporters by causing inflation or crimping credit access (53:57–55:20).

• Broader Economic State:

  • Current U.S. economy described as "meh": jobs market slowing, resilient stock market, but signs of malaise. Many challenges (inequality, AI, tariffs) would have been present regardless (55:20–59:40).
  • Wealth transfers under Trump 2.0: Policies amounting to tax cuts for the rich and tariffs that harm working- and middle-class Americans.

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6. Katrina Anniversary: Inequality, Memory, and the Value of Communities

[59:42–67:27]

• Talmon Smith reflects on experiencing Hurricane Katrina at age 11, contrasting his family’s privilege with the dire fate of less fortunate peers (60:49–62:40).
• Critique of articles questioning the wisdom of saving "sinking cities" like New Orleans, defending the cultural and human value of vulnerable places.

  "Culture matters and people matter and you can't value them purely [by] their ability to consume or ... be an inventor." – Talmon Smith (65:16)

• Optimism for investing in resilience and a "Green New Deal"-like approach to coastal cities, echoing JFK’s call to tackle big challenges (66:00–67:27).

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Notable Quotes & Memorable Moments

• On Gun Violence:

  "There is one underlying feature through all of this: Easy access to guns." – Sam Stein, 05:42
  "You want to fortify schools? Cool ... if it doesn't take into account easy access to firearms by deranged people, then it's pointless." – Tim Miller, 05:55

• On Political Blame Games:

  "We have to re-deprogram ourselves ... it starts by acknowledging [our instinct to blame the other side]." – Tim Miller, 04:02

• On Public Health Leadership:

  "We're at a place where our trusted public health officials ... believe our leadership is actively hurting the population." – Sam Stein, 15:19

• On Institutional Rot:

  "The failing government's going to fail on a profound level on multiple fronts." – Sam Stein, 23:01

• On Theoretical Fed Catastrophe:

  "If markets think that Trump has put in a hack ... you could see a drop in the dollar that isn't just an overnight flinch based out of fear, but based on an active decrease in central bank independence." – Talmon Smith, 50:55

• On Policy Irony:

  "He could do all of this to get interest rates down and it does actually nothing meaningfully for people that have mortgages ... because of the reaction of the bond market." – Tim Miller, 54:28

• On New Orleans and Value of Place:

  "Culture matters and people matter and you can't value them purely [by] their ability to consume or ... be an inventor." – Talmon Smith, 65:16

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Timestamps of Important Segments

| Timestamp | Topic/Segment | |-------------|--------------------------------------------------------------------------| | 00:58–11:44 | Minneapolis school shooting, Groundhog Day tragedy, cultural response | | 13:27–23:39 | CDC “purge,” public health leadership, broader federal brain drain | | 23:39–28:24 | Russia/Ukraine escalation, US foreign policy shortcomings | | 28:24–36:45 | Dem shifts on Israel, Jake Sullivan interview, China, DNC “fight song” | | 37:24–59:40 | Talmon Smith on the Fed, Lisa Cook, economic and political consequences | | 59:42–67:27 | Katrina’s anniversary, inequality, why communities matter |

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Tone & Style

The conversation alternates between wry humor, exasperation, and alarm. The hosts speak candidly, with gallows humor (“inverse Hannity”), personal reflections, and an unapologetic critique of both political parties—true to The Bulwark’s reputation for irreverent, reality-based analysis.

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Quick Takeaways

• America’s adaptation to mass shootings is a defining cultural tragedy: “Groundhog Day.”
• The exodus of experts from federal agencies, spurred by politicization and intimidation, poses grave risks to public health and economic stability.
• Trump-era moves to politicize the Fed and other agencies represent existential threats to the US’s economic and global power.
• Democrats are finally shifting toward more overt criticism of Israeli government policy and are urged to seize the China debate.
• Katrina’s legacy highlights the persistent fault lines of inequality—and the necessity of valuing communities beyond their economic output.

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End of summary.

Transcript

[A]

Ever wanted to stay on vacation longer? Us too. With VRBO's long stay discounts, you can stay longer and save more on select properties. Gotta love a win win book. The perfect summer getaway today with VRBO Private Vacation rentals. Your future self will thank you later. Hello and welcome to the Bullard Podcast. I'm your host, Tim Miller. We have a doubleheader today at Talman Smith, who's a New Orleanian who writes about economics. On to talk about the purges at the Fed, the attempted purge of Lisa Cook at the Fed. But there's been so much news, so much dark news. I like to bring on this guest for comedic news, but in this case we're going to find his sensitive side. It's the managing editor of the Bulwark City, Sam Stein. How you doing, man?

[B]

I'm good, man. How are you?

[A]

I am well, all things considered. We got a bunch of news we gotta get to. So yesterday a shooter opened fire during morning mass at a Catholic school in Minneapolis. Killed two children, injured 17 others. The shooter is identified as a 23 year old, likely trans or trans identifying person Robin Westman, who killed themselves. They left behind a trail of insane conspiracy theory. Addled videos and writings don't really map on any ideological spectrum. I know you did a video on this yesterday, but just kind of after 24 hours, just wondering what your reactions are or if you have anything new to say about this American Groundhog Day tragedy.

[B]

That's it. It's that it's Groundhog Day. It's so customary in our social fabric at this point that its lack of extraordinaryness is the defining feature for me. I mean, I've been through this so many times journalistically that I remember the first time or one of the first times that you kind of hustle in the newsroom. It's shocking. You get into order and you write on it and then you try to think of how to process it and now it processes itself. I guess the thing that's different for me is my kids are now of age where they are going through the process of preparing for things like this at their own schools. And that obviously takes it to a different personal level.

[A]

Video of that kid saying, we did the shooting, done these drills in the class. We've never done it at church. It's just like so gutting. I don't know, I'm. I'm kind of against the drills.

[B]

That and the way he, the kid talked about it, which was. It was so methodical, so routine, almost like this was not a Big deal. It was almost like he was describing like a basketball shooting drill and you're like, I'm in. This is just, this is just part of their life. The other thing that stood out and I think Andrew Egger did a good job tackling this this morning for morning shots is just. I hate this. I, I really hate how right in the immediate math aftermath of these things, it's so typical. But everyone's just sort of like looking for little chestnuts of news or bio or something from the manifesto that can just allow them to say, oh, this shooter was a Republican or this shooter was a Democrat, or this shooter, like took some, you know, medication that, you know, trans kids take. Or this shooter, you know, read some sort of, you know, anti, you know, Muslim propaganda. It's like the natural instinct to try to use this to further your political agenda. I find it sickening. I find it really grotesque and I can't deal with it.

[A]

I forget which. This tells you all you need to know. I forget which school shooting I wrote about this after. But I think it's like maybe the prime example of kind of the darkening of this, of this human spirit in the country that we all have. And I have it. So this is not a finger pointing thing. There seems to be like this natural instinct inside you that immediately goes to, I hope it was the other guys that did this one, you know, and like we have to re. Deprogram ourselves from all of that. And like it starts by acknowledging it and it doesn't mean that you don't want to look at potentially underlying issues and trends and like that, you know, and if you're a dhs, you know, Elizabeth Newman, who's a friend of mine, this was her job at dhs, like looking at trends and trying to figure out domestic terror and other things, you know, sure, this is not to let people off the hook for their ideological extremism if they have it, but it's just like as a culture, it just is a sign of a broken culture.

[B]

Oh, totally, totally. And I think you had a really good tweet, which means you probably outsourced it to someone else. But it was about how like they were looking into, oh, you know, trends in trans violence and you're like, well, you know, in Japan. So what was it like in Japan?

[A]

In Japan there was one. So this guy, here's what happened. This guy, this was a, this chart was going around and I saw it like three times, I tweeted it, which is like these right wing guys putting up this chart about like it was like an analysis of the. The percentage of a community that had. That had committed a mass shooting, a shooting with more than four deaths or something. And it was like, you know,.07% of trans people have done it, but.05% of Asian men have done it, and.04% of white men or whatever I don't have in front of me. But it's like, what was like. And it was just looking at the last 10 years of data. My point was, like, in Japan, they've had one mass shooting in the last 10 years of data. In Americ in America, we're like, trying to slice and dice the statistics to see if a group that we hate is more complicit in these than another group. And I feel like it kind of is missing the point.

[B]

You think? Yeah. And it's just like, there is one underlying feature through all of this. Easy access to guns. Easy access to guns. And it's just like, I'm at the place now where it's like, you want to fortify schools. Cool.

[A]

This guy shot through the window. Hannity was doing this thing last night about how we need metal detectors at every door. He didn't even go in the fucking door of the chur.

[B]

Go in the door. Didn't go in the door. Dude, you got. You got to. I mean, fortify the. I don't even care. Let them fortify the schools, arm the priests, arm the nuns, whatever you want to do. But if it doesn't take into account easy access to firearms by deranged people, then it's pointless. And go holistic. Do whatever you want, but it has to take that into account. And I don't know. I. I'm so. I'm so burnt out about this stuff, and I find it so depressing.

[C]

And.

[B]

And I honestly do. You know, you try to compartmentalize it, but then you send your kid off to school and you're like, you know, in the back of your mind, you're just sort of like, I don't want to get that call. Don't want to get that call. And it goes away, and you go through the day, but I feel it. I do.

[A]

All right, so maybe this is me not listening to our own advice, because I do have one crazy hot take about this that appealed to me. And so I want you to take me off the chart. I don't want to be an inverse Hannity here. Talk me off the ledge if I need to be talked off the ledge. Fellow YouTuber Destin wrote this crazy that this Guy was literally talking about his plans to shoot up this church for a month on the open Internet. But Cash and Bondi are too busy going after imaginary Ms. Thirteen Home Depot workers. If only they were doing their jobs instead. Now, I want to say I don't like the exact specifics of that claim that Cash and Bondi could have stopped this. I don't want to endorse, but this guy was posting on this thing called Skibidi Farms, which is, I'm not going down Kiwi Farms. You don't want to know about this, Boomer. You don't want to know about this. But it's essentially an updated 4chan. But the point is not wrong at the broad sense.

[B]

Sure.

[A]

That we have a risk here in this country, that we have totally de. Emphasized this government has totally de. Emphasized interest in looking at domestic terror. And the FBI is now, we're reorienting that towards all immigration stuff, immigration only. And we're firing people with expertise. If they said a mean thing about Donald Trump and maybe any individual case can't be blamed on that, but at scale, it feels bad, it feels wrong, and I don't know, shouldn't that be something they have to answer for?

[B]

Yeah, I suppose. I mean, like any law enforcement agency, it's, you know, much of what you do is prioritization of resources and what you think is, you know, the most important threat. And they've obviously torqued it in a direction towards immigration and just like in the Bush era was towards terrorism. Right. And like that being said, and I just, you know, gun violence is so pervasive that even if you were to put all your resources towards preventing it, I'm not sure. I mean, you obviously make progress, but, like, people have to understand. This was the second shooting in as many days in Minneapolis at a Catholic school. There was a shooting the day before outside of Catholic school in Minneapolis.

[A]

But I don't know if you were serious. Let's just play this out, though. If you were serious. Serious about this. I'm serious about law and order and protecting the streets and all this stuff. I don't know. We have fucking AI. We've had. Palantir has access to the entire government now. We have AI tools now. If somebody posts on Skibidi Farms, I'm gonna shoot up a church. Shouldn't they at least get a call from somebody?

[B]

That's what Red flag laws are for. And they have worked, and there's evidence that they do work. And you. You would like to think that we would try to, you know, Extrapolate on that success and adopt it more nationally. And I'm all supportive for that. Ultimately, there's always going to be nut jobs who fall through the cracks. And the real common denominator through all this is not necessarily personality or gender or religion or anything like that. It's easy access to firearms. It's easy access to firearms. It's easy access to firearms. And until we grapple with that, like, you're going to have these instances. But yes, of course, you're right. Like, you should be focusing in our law enforcement. Should be focusing on clearly trouble people who are posting on these forums. Like, that's an obvious place to look.

[A]

I'm sorry, I do have to push back on you, though, because the Secretary of Health and Human Services was on Fox News this morning, and we're not going to play this audio because we have a different audio of him later. And you only. People can only listen to this man's voice. We can only take an audio. This is an audio medium, as I said to you in Slack. And he has the most unappealing voice I've ever heard, I think. And so having to hear it more than once in a podcast is torture. So we won't do it. But essentially what happens is Brian Kilmeade is trying to blame this on trans people.

[B]

Obviously teed it right up for the guy.

[A]

And. All right, so, yes, rfk, if he's going to investigate that. I don't know what RFK's role is really as HHS secretary, but okay, RFK doesn't really address it, but he kind of does by saying, no, actually, what we're really going to look into is SSRIs, antidepressants, things of this nature. And we think that that is the problem here.

[B]

What a quack. I think, like 10% of the country is on SSRIs.

[A]

Are there SSRIs in Japan? I don't know. Can we look into that? They made it. Is anyone in Japan on SSRIs?

[B]

Country has forbidden them. No. This is so ridiculous. The thing was, we're not playing the clip, but it was, you know, Fox News literally just, like, begging him to just go off on trans kids. And he's just like, actually, sorry, that's my Bobby. It just went on for SSRIs, because that's what he cared because he's a lunatic who believes. Believes that antidepressants are causing people to be violent. And I'm sure he has some, like, crazed study that he's going to point to. And Be like, you know, the mitochondrial challenges that our people are facing. And I can't even deal with it.

[A]

Let's not, let's not shoot our load on the mitochondrial challenges before we get to it.

[B]

Sorry, did I, did I get ahead of it? Sorry.

[A]

All right. You got a little, you got a little bit ahead of us. We'll get back. I mean, it's okay. Mitochondrial challenges, let's be fair, are kind of implicit in everything that's happening in our society. Yeah. So you bring it up on any topic. Hey, y', all, I warned you. I warned you. Our Toronto show has sold out. The Canadians love Sam Stein so much that, you know, there are lines around the block to get tickets to it. But the good news is we still have tickets left for our live shows in Washington, D.C. and in New York coming up in early October. So go get those tickets now@the bulwark.com events. I'm missing LSU versus South Carolina for you guys. I'm going to be in New York for that. And so assuming that's an afternoon game, I might have a couple bourbons in me by the time we get on stage on Saturday night. So that one could be a rowdy one. So if you're looking for an excuse to get to the Big Apple, see, you know, go see a show Friday night, come see us Saturday night. Could be a fun little weekend. Go get tickets. Like I said. Theborg.com events theborg.com events. See y' all soon. So the other news that you have been on, you broke a little news on this yesterday. And our colleague Jonathan Cohn has a great summary of this in the Morning Shots newsletter this morning. People should sign up for if they haven't got, if they're not getting [e-mail], but the CDC, I don't know if we're calling this. It's a little bit of a purge and a little bit of a self deportation and it's craziness. But at the top of the center for Disease Control, just total, what, lunacy and san, what would you call it? Chaos.

[B]

I don't even know how to describe it. What would you describe it if, like the top, you know, four or five officials at an agency just were like, you know what? We're done, and then like mass resignation, like that. The good news is that the CDC is not really that big a deal and they don't really matter that much. No, this is a calamity. People who have decades of subject matter, expertise in infectious disease and other critical health Issues just yesterday all were like, we are resigning. And the backstory, as far as we understand it, is that the CDC director, who's only been on the job for a couple of weeks, was essentially told by Kennedy, you need to like, get on board with my anti vax crusade because he's been restricting COVID vaccine, booster vaccines, as well as preparing to, we expect in the month ahead, say that autism is caused by vaccinations. So you gotta get on board or you're gone. And I want you to fire these people anyway. And she said no. And then these people resigned in protest anyway. Now the scariest thing for me came as we were reporting it out, I was talking to a source of mine who knows some of the people who resigned. And this person was like, you know, they had told me that they were going to stick around at the CDC and I'm going to read this to protect science until they were were, quote, asked to do something that could hurt people, end quote. So the implication is that they believed they were asked to do something that would hurt people and at that point they resigned. We're at a place where our trusted public health officials. Just think about this. Our trusted public health officials, people who have worked on these issues more critically and aggressively than anyone else in our country, where they believe that our leadership is actively hurting the population. And wrapping your head around that is really hard, but I think that's where we're at.

[A]

And tying it to the first story, you can't kind of disentangle all this stuff. It's worth mentioning that it was, what, two weeks ago, August 12, maybe August 11, a couple weeks ago, that a man fired hundreds of rounds of ammunition at the CDC headquarters. And he said part of it was over the fact that he expressed distrust of the COVID 19 vaccine. So you have quacks at the top forcing scientists and experts to put out information they know or they think is harmful. And so you have experts leaving the government and then you have quacks outside trying to intimidate, threaten these folks. Who would want to work there? Honestly, why would you want to work there? And it's not like this is a lucrative, you know, position.

[B]

Well, that's what Conan and I were talking about this last night. I was like, well, who's going to take these jobs now? Right? Like, so you have people who are running, like, what are some of the.

[A]

Jobs of the people that.

[B]

So, like, okay, just to go through it, the. The one that I know most was run by a guy named Dmitry Daskalakis. And I'M not going to get his actual title right. But essentially he was the point person for two big issues, Monkeypox and Covid.

[A]

Appreciate his work on Monkeypox. That was important for my community.

[B]

Yeah, look, I don't want to get Monkeypox.

[A]

You weren't really. How many Charlie XCX songs can you name?

[B]

We're gonna move on.

[A]

Less than 3. I don't think you're at any risk of Monkeypox, but continue.

[B]

I appreciate that. Anyway, so that's one. And. And then there was others. There's Dr. Dan Jarrigan, who's been zoonotic infectious disease expert. He's been there for decades. The other person was Jen Laden, I'm unfamiliar with. She was at the Office of Public Health Data. And then there was Deborah, who was the chief medical officer there.

[A]

Seems like an important job.

[B]

Yeah, kind of. Kind of significant. These are big, big positions and they're going to be okay. Like, they'll find work, they'll be fine. They're going to, you know, continue to, you know, operate in this field. I have no doubt about it. But if you are a scientist with any credibility, like, why the hell would you go into the CDC at this point? There's just no real reason to do it. Right. Like you would be forced to, you know, defend quackery.

[A]

I have an idea of why you might go. Let's say you've been walking through the airport and you've been looking at the children and you think. And you see a problem. And I want to play an audio about what that problem might be. And I know what a healthy child is supposed to look like. I'm looking at kids as I walk through the airports today, as I walk down the street and I see these kids that are just overburdened with. With mitochondrial challenges with inflammation. You can tell from their faces, from their body movements and from their lack of social connection. And I know that that's not how our children are supposed to look. What the fuck is this guy talking about? He's in the airport, he sees a child, he's like, you have a lack of social connection. You have too much mitochondrial DNA. Like you have inflammation, but you're not a fucking doctor. What the fuck are you talking about? He doesn't know any. He doesn't know anything. This person, we're sticking with this person at the head of HHS and we're losing the people that were, you know, running the COVID and Monkeypox programs. We're gonna trust the mitochondrial guy who self diagnosed Somebody at o' Hare because he saw a seven year old who was eating some ice cream and he thought he looked like he was socially disconnected and inflamed.

[B]

I just, I have this vision of Bobby sitting there at the Einstein Bagels staring at a like 8 year old kid, being like, he's moving funny. His mitochondrials fell off, you know where. Why is he not talking to another 8 year old?

[A]

You know, like, stop talking about other people's kids too. Just a story where he's in la. What's the path everybody goes walking on in la. Katie's gonna kill me. The producer guy. I can't think of. I can't think of the name. Anyway, whatever that hiking path is, everybody walks on in la and he goes up to the mom with the baby and the Baby Bjorn and he's like, don't vaccinate that child. It's like, stop talking about other people's children. You cannot make any determinations about their health status based on a glance.

[B]

No, it's inherently weird. What is he talking about?

[A]

Runyon Canyon.

[B]

Running Canyon. He also. This is a man who said in a deposition, I believe that he's a brain worm. I just want to remind people of that.

[A]

What does the brainworm do to your mitochondria?

[B]

Yeah, I was going to wonder, is the brainworm help the mitochondria or does it hurt? Can Bobby get on that on a serious note? I mean, this is all very serious, but like, this guy is so dogmatic about his worldview and he's full of it. And he's just now setting the tone for our entire country's health system and it's really scary. Have you come around to my. This is now. I need to make it about you and me. Have you come around to my belief that he's the number one danger cabinet member? Are you still on the fence here?

[A]

Well, I'm on the fence. I think that there are a lot of risks out there. Oh, come on. He's going. What does he have to do? He's going up the chart. Okay. He's definitely going up the list. I under. I underestimated it. I'll give you that. That's a win. I'll give you. But you know, we'll see where things go with the doj.

[B]

Oh, yeah. We just need a couple. We need an outbreak.

[A]

Oh, yeah. You're really, you're really thrilled by the performance of the DoD and Justice Department head so far.

[B]

I want one win here.

[A]

Give me one win. How about Nutlik? Okay, I'm looking here, I googled mitochondrial diseases, like some symptoms and can you.

[B]

See it by just scanning a child's face?

[A]

Well, a couple of things is muscle weakness and low muscle tone. So I just, just, I see Bobby looking at the nine year olds walking through and be like, can we get this guy, can we get this guy down to Golds? Let's, let's get this kid down to Golds. He's gotta do a couple of shoulder presses before his mitochondrial.

[B]

When you look at Bobby's, when you look at Bobby, do you think that's a guy with good mitochondrial. No mitochondrial.

[A]

He's got muscle tone, his shape is weird. Oh my God. Okay, there are other purges happening. A friend of the show, Stan Voiger over at AEI posted this yesterday. I thought this was very insightful. He writes the Deputy Treasury Secretary, the CDC director and the Defense Intelligence Agency director all got fired suddenly this week. And I think only the most committed news consumers noticed. That's a true statement, but it also kind of barely scratches the surface.

[B]

The Fed board governor, the head of.

[A]

The BLS, the chief of staff of the Air Force, like 31 intel officials, including one CIA agent that Tulsi accident accidentally outed by including on the list of fired.

[B]

Well, they lost, they lost their clearance, but yeah, oh yeah, you're right.

[A]

They only lost their clearance. Well that, isn't that not firing? Can you, can you maintain your job? Is it. Can you do intel agencies?

[B]

I think they get a paycheck, but they're not doing their job. And then you had the FEMA officials who wrote the open letter being like we are so severely understaffed that there's gonna. Yeah, it's, it's awful. What do you want me to say?

[A]

Readers of the Morning Shots newsletter noticed it is. I don't really know what to do about that, but it is. And this is kind of one of those things where it's just like it's important sometimes to step back. It's like this would be had Obama put some hack in charge of some, you know, whatever cat and like one of the top people resigned and protest. Like that's like the leading news story of the night, you know, for a couple days until something else happens, right? Till there's a shooting or something. But.

[B]

Well, it's just like the fail government's going to fail on a profound level on multiple fronts. Right? Like, I mean I found it, but it's just a sort of small irony here, but like the National Guard cleaning up Washington D.C. this week and picking up Trash and all the custodial work. They're doing it because the National Park Service has been gutted. Like, there's little ways in which this stuff matters and then there's big ways in which this stuff matters. And God forbid some pandemic happens in the next six months. God forbid, what are we going to do with the CDC that's completely gutted? Like, that's, that's going to be really problematic for obvious reasons.

[A]

I think die is what people are going to do. I do a little kind of foreign policy, kind of Dem party talk here before we get to the Dem stuff. One other news item since I think massive that I think a lot of places are just bored with covering because it's just like another day in Ukraine. But today, I guess in Ukraine during the day, in the afternoon, Russia targeted central Kiev with 32 missiles and about 600 drones. Death toll as we're taping is at least 18 people, including four children. The British consulate is wrecked. This is two weeks after we rolled out the red carpet for Putin in Alaska. This is just a monumental disaster for this administration's strategy towards Russia, which was obvious for anyone who listens to us. But it's worth saying plainly, I mean.

[B]

Just how did it go? I'm trying to remember the sequence of it. He was supposed to, Trump had unveiled that he was going to come down harder on Putin. There's going to be sanctions. And Putin says, you know what, it.

[A]

Was like a 90 days.

[B]

Yeah. Oh, yeah, yeah, let's delay it. Then Putin's like, oh, let's meet. And then he meets and then suddenly the sanctions are off the table. In fact, now it's on Ukraine to come to the table. And like, it's, it was so predictable. It's so predictable. And we're just going to, Are we going to continue the cycle again? Is Trump going to feign discuss with Putin or should we just skip that step? I mean, because that's what's happening, right?

[C]

Yeah.

[A]

In some ways it's even more humiliating for him, I think you would think, for anybody who pays attention and cares about this. Because, like, at some level, what we were worried about when he first came in, we being people who care about Ukraine, was that he was just going to say, take his ball and go home and just be like, this is not our problem. Kind of Homer Simpson into the Bushes on this thing and whatever Europe, you figure it out. And that hasn't really. We continue to sell weapons to Europe, that gives it to Ukraine and stuff. And we're still Kind of doing these negotiations and all that. But to what end? Right. It's like Putin is just basically saying fuck you. Haha. He's laughing in his face. Putin's laughing in his face. We met and you talked about how we're going to skip the ceasefire, move straight to peace deal. There's no plans for even a meeting about a peace deal. And meanwhile Putin's killing children in Kiev.

[B]

Yeah, I mean they were supposed to meet within hours and then days and now weeks and now there's no plans for another meeting. Trilateral meeting. And then we roll out the liter red carpet and then Putin tells him that mail in voting is fraudulent. So we got that. It looks ridiculous, it looks weak. I mean I obviously, I think we're, I'm personally glad that we're not completely abandoning Ukraine, but this current stasis is terrible. Unless Trump does a totally unexpected 180 and decides to actually come down a little bit tougher on Russia for real, I don't see where we go from here. Like, what's the next step? Or are we just going to continue in this limbo?

[A]

I think we might know what the next step is. I want to give the counter view from the administration. Could we please, could we please play Trump's lead negotiator on the Russia Ukraine situation?

[B]

Oh God. And there's only one thing I wish for that that noble committee finally gets its act together and realizes that you are the single finest candidate since the noble peace, this noble award was ever talked about. To receive that reward beyond your success is game changing out in the world today. And I hope everybody one day wakes.

[A]

Up and realizes that.

[B]

Amen.

[A]

Amen. That's Steve Witkoff, the outer borough real estate man who's been negotiating all this. What do you think the four dead children in Kyiv today think about the application for the Nobel? The noble.

[B]

I'm sure they could give two shits. I do. I will note I make Andrew Egger say these things to me about my editing skills. My only, my only wish is that you could get five Pulitzers for the way you've edited this morning show. There's actually. They've taken this, this obsequiousness to a different level. The. I don't know if you saw this. The ambassador nominee for Poland put out some statement the other day where he's like, you know what? He's too good for the Nobel Peace Prize. He's like, he doesn't deserve.

[A]

It's just an ornament. I like that. It's it, it's just an ornament. It's like, have you met Donald Trump? Does anybod ornaments more than Donald Trump?

[B]

Seen the Oval recently? There's gold ornaments everywhere.

[A]

Donald Trump would give all of Ukraine to Russia in a second. If he could have that ornament. One second, you wouldn't even think about it.

[B]

He does have the. He's got a World cup trophy and he's got that gold thing from what's his face. Tim Cook. Yeah, he likes to.

[A]

He'd throw in Lithuania just like give me an ornament and I'll hand it over. Let's talk about the Democrats response. I had Jake Sullivan on yesterday was Biden's national security advisor. I was, I don't know there's really much to say about the Ukraine stuff. I kind of, you know, gave him the neocon business a little bit about maybe we should have done a no fly zone. But I thought his answers on all that were. I disagreed with him a little bit on the Ukraine stuff. They were understandable. I can at least understand the perspective that, you know, we don't want to be in a shooting war with Russia.

[B]

Yeah.

[A]

You know, some of us, some of us 80s children are still a little chomping at the bit for that. But I understand his perspective. I was interested more. A lot of the commenters were interested in our exchange about his old boss's age. We can set that aside. I think the most actually relevant part of the discussion was about Israel and how somebody who was really not the point person, McGurk maybe, or some others, but a point person for the Biden strategy in Israel now, saying that the dynamics have changed enough that he's actively telling Democratic politicians that it is defensible to have a position they should no longer provide weapons to Israel.

[B]

Well, yeah, I mean he was really, I think it's fair to say he was the point person. He's a little late to the party, I would argue, and I think he's getting criticized for that. I think the fact is that the people in the Biden administration increasingly look back at how they handled that conflict and feel, you know, bits of regret, honestly, that they didn't try to leverage US Weaponry in a more effective way. And I think they also really hate Bibby. They really hate Bibby. And I think one of the things that you heard of real anger is either yesterday or two days ago where Bibby was out there and being like, you know, October 7th never would have happened if Donald Trump was president. I mean, that just really, really agitated them because they bent over backwards for the guy. They, you know, they, they really did. They gave him almost everything he wanted, except for nothing.

[A]

Honestly. They gotten kind of a sour spot on it, which is something I brought up.

[B]

Exactly. I think, and I think they're upset about that. But, you know, not to their credit. They should have recognized that this was always where it was going to end up. And, and I find it interesting to see the evolution, but it's also tragic, right? Like, how many deaths could have been prevented if they had recognized that sooner. Who knows?

[A]

I think that his point that the environment is different now than it was when you have Hamas having just committed the worst terrorist attack in decades, and then you have Hezbollah on your other border, you have Iran. They've had success in the campaign against Hezbollah and Iran. And that success should have led them to a place where this could be, where you could have a more humanitarian response in Gaza because you have stability. And that's the opposite said has happened. Right. And I think that, that, that is a defensible point he's making. Mostly I just think that, like his point about forward looking, about how, like, if Israel doesn't change its government, the US should change their, their posture towards them. It's been a really notable sea change among Democrats in a month.

[B]

Oh, my God.

[A]

To me, it's like the writing is on the wall about this, good, bad or otherwise for 2027. But that's where things are going.

[B]

And I think that's, you know, to change focus a tiny bit. But if you're Netanyahu or if you're an Israeli politician, I mean, you have to recognize that you are in. I mean, you have a very short window here, right. Like, if Democrats were ever to retake power, who knows if there's ever going to be elections again?

[A]

There'll be elections, but, you know, who.

[B]

Knows if they're going to be whatever. A future Democratic Party is not going to have similar relations like the Biden administration towards the Israeli government. It just will never happen again.

[A]

Unless it's a different government, which is what Jake said. Unless it's a totally different government.

[B]

Yeah, but Israeli domestic politics are all kinds of up. And I think, I think there's genuine anger, distrust and a sea change is one way to describe it. I mean, it's, it is a monumental shift. And I think for Jake Sullivan, who is just like the ultimate establishment foreign policy type of the Democratic Party to say, yeah, we're at a place where you can condition weaponry to Israel and that, that, that would have been unthinkable unthinkable two or three years ago. That's like, you know, that was a, that was a 10% proposition within Democratic politics. And now you have the Bernie Sanders resolution and it's got like something close to 30 or so co sponsors.

[A]

My other big reaction to Jake, I just wanted to say, and I appreciate him coming on, was he had a very aggressive posture towards China. And I know that we have some Democrats who listen to this. I just think that that's a winner for Democrats. I'm not saying that they should be Cold war Ronald Reagan. What Tim Miller would really want, saber rattling against China. But just how many people do you.

[B]

Want to bomb, Tim?

[A]

I don't want to bomb China. I want to make the point that Trump has strengthened China and make it explicitly. And I don't feel like it gets made that explicitly all that much. And Jake made it, made it very explicitly. And I think that even if people, regular people don't care that much about the details of China policy, they do. The vibes of, is one area where the Democrats could conceivably take back some alpha vibes from, from Trump and be like 100% weak. And Trump has, has, has given all these gifts to China and it's hurting our country. And, and, and, and I think that that's a worthwhile vein to explore.

[B]

Completely agree, Completely agree. And you can just make the, I mean, it's like macro and micro, right? It's like China's eating our lunch. Trump has lost the air race to them. Trump has pushed every other country into China's arms because of his tariffs. I think I saw some graphic about, you know, trade with Africa where it's just like complet exports to Africa are shooting through the roof because of the tariffs. And then you can make it on the micro level, which is, and Will Summer's got his false flag coming up on this, but it's like it's causing a real uproar in the MAGA movement, which is this pledge to give 600,000 student visas to Chinese students. I mean, they're freaking out. Laura Ingram.

[A]

They should be. That's a little crazy, I guess, liberal on immigration as that comes. And it's like 600,000 Chinese student visas. That feels like a lot of.

[B]

And their argument for it is so, it's almost hard to fathom that this is the best they came up with. But like, I think their argument for it is like, well, we need them in the Ivy Leagues because if all the Americans went up to the Ivy Leagues, then The lesser academic institutions would not have enough students to operate. So it's like basically, if you boil down to they're saying we need to bring in these Chinese students to keep the American students at the lesser conference.

[A]

If you need more students in the Ivy leagues, maybe we shouldn't be deporting people over op eds, scaring them about their green cards. That might be a better thing to think about than just giving the Chinese impunity. Well, final topic. I Dems butch up on that a little bit. I liked that and Trump's. I mean, I think it's a big opportunity. There's one final thing about maybe a sign of concern about whether Democrats are going to butch up on that. Sam is your friend of mine. Dave Weigel is covering the DNC meeting. We covered this at length on the next level if people want to listen to that. But I did not get into. We missed one key element.

[B]

Oh God.

[A]

Which is that they released a fight song. I saw this goes D E M S We rise stronger together Blue skies lift your voice we are bold and true. Onward Democrats, we shine blue.

[B]

I looked in their faces when they were writing that and I detected some mitochondrial challenges.

[A]

Yeah, it's not exactly like playing neck in Tiger Stadium. I wouldn't say. All right, wait, wait.

[B]

Just make one quick point.

[A]

Go ahead.

[B]

They have one job or two. Raise money. Build a party. Like stop making songs win elections.

[A]

Stop making raise money register voters are getting your ass kicked. Shit on Donald Trump.

[B]

That's just simplify the mission. Simplify the mission. I don't care about like, you know, land, you know, being usurped. I don't care about fight songs. Just do those three things, like how hard can this be?

[A]

That's Sam Stein. He's our managing editor. Up next, we've got Talman Smith to do some econ and some fed talk. It'll be good. Stick around for that. All right, welcome back. He's an economics reporter in the business section of the New York Times. He's currently on book leave for a forthcoming Clouton Capital, which I'm looking forward to. He's born and raised, I just found out, is hanging out right here at his parents house in New Orleans, Louisiana. It's Talman Smith. Hey, Tal. What's up, man?

[C]

Hey, what's up, Tim? Glad to be here. And yeah, like you were saying, it's a shame we didn't do this in the, in the studio. I think we found out too late that we were in the same place. But next time.

[A]

Well, I'm in my Kingpin T shirt. We can do a beer at Kingpin next weekend and we'll definitely grab a beer and figure it out. And since you're at your folks house, you can let them know. I think you have another distinction. I think this is the first sibling duo to have been on the Bulwark podcast. Oh, that's cool. I didn't know your brother Clinton like a year or two ago about his book of poems. So a big moment for your mother. I'm sure she's very, very proud. I wanted to grab you after the Lisa Cook news earlier this week and just do some Fed talk. What's happening with the economy broadly? Maybe a little Katrina anniversary stuff at the end, just at the top for listener, it's like Econ 101. And on the one hand it's like, obviously it's a big deal if anybody in a significant position is being targeted by the President and his minions based on spurious allocations and getting pushed out extra legally from a job that should be independent. But like, like really don't I get it? Like, why is the Fed Board of Governors important? Like what, what matters about this?

[C]

The Fed Board of Governors is the heart of the Federal Open Market Committee, the fomc, which is the voting body of the Federal Reserve, which controls interest rates, the money supply, helps regulate the banks, and has a mandate from Congress since about the 1970s to explicitly keep inflation stable and to also try to maximize full employment as well as financial market stability. What the Board of Governors is is a firm seven person committee that sits at the heart of the FOMC and therefore has a lot of power over interest rates that banks and that we all experience as households and consumers. The New York Federal Reserve, because New York is special in all things, also has a seat, the president of the New York Fed. And then there's a rotating cast of of the 11, I believe, regional Fed presidents who are dispersed throughout the country at regional Federal Reserve banks. But they're rotating and only four of them at a time sit there. So the Fed Board of Governors is this sort of central firmament in the institution, and that's why they're also appointed for 14 year staggered terms in order to protect them from political volatility. And so Trump and his, you call them minions. I'll call them folks in his administration. Right. So my editors don't get mad at me. They are being really aggressive in an unprecedented way in trying to fire miss Cook for cause. Because regardless of the details, traditionally the.

[A]

Head of the Federalist Housing Finance agency does not have oversight over hiring and firing of the Board of Governors.

[C]

Right. And apparently I didn't know about this. You know, I was talking with some folks that are, that really spend a lot of their life and spend their careers focusing on, you know, good governance and malfeasance. Nobody that I've spoken to really would have expected FHFA being involved in digging into the mortgage documents of powerful people throughout the government. You would have expected, if you were going to weaponize the government in this way, you would expect it to maybe come from the irs. So I mean, it's just, it's weird to use euphemism there in several ways. Yeah.

[A]

So what is, what are like the risks? I guess, like dumb talk to us, right? It's like, okay, well, the Fed Board of Governors losing independence. Trump pushed out people he doesn't like putting in, who knows, maybe potentially hacks. Like, let's talk about a worst case scenario. You don't exactly know he would replace who he'd replace her with, but let's assume it'd be a loyalist, like kind of like he's done in other parts of the government. Like what are the rules, risks associated with that? You know, just specifically on the economic side, like beyond the broader kind of autocracy discussion.

[C]

Yeah, no, I mean you say dumb talk and like I think that that's a, it's a half joking tip to what I think is far too common, which is this idea that econ and the world of, you know, high finance are these things that are just, you know, tieroglyphics that nobody could possibly understand them. But I mean, the way that they function and the way that they find or lose stability is very similar to other institutions in our life and society. And so to hop into it, we can just go into the very recent past where we've seen the upsides of Fed independence, of the Fed Board of Governors being to operate independently. We saw inflation in the very recent past hit the high single digits. And yet when you look at market based measures of inflation expectations, which are everything in financial markets and in public finance, because it essentially determines the price and yield, the interest rates on bonds which then determine borrowing costs for everything.

[A]

Yeah, houses, cars.

[C]

Exactly, houses, cars, the whole shebang. Credit cards. Because inflation expectations through these market measures that people actually vote on with their feet, with their money and their clients money did not really budge and they went up a bit. I think in 2022 it got into the high two. So basically expecting over a certain time period, Whether we're talking five years or 10 years, inflation expectations on an annual basis got up to the high 2%, but then they maybe a bit over 3, but then they pretty quickly came back down. Why? Well, in part because even though there are plenty of people in financial markets around the world and there are plenty of people in financial markets in America that had no love for Joe Biden or his regulatory policies or what Lina Khan was doing or this, that or the other or that thought they overstimulated the economy. The idea was come what may, we have people appointed by both Democrats and Republicans that are insulated from politics at the Fed that are calling balls and strikes and that undeniably is a linchpin of our system. And it is actively under threat by people who are actively loyalists. Stephen Myron, he is a Harvard trained economist who over the past few years has become very Trumpy in a way that has surprised and certainly upset some of the more I don't even want to say moderate, but just like traditionalists in the priesthood of economics and he along with sort of actively helping Trump not tell the truth about certain things like tariff policy, he's also become more powerful and more trusted within Trump's orbit. It and Trump is now trying to get him onto the Fed, onto the board of governors. And so this is not a empty threat, it's an active threat. Because it is very hard to believe that if Trump said jump Myron at this point wouldn't say how high when it comes to interest rate policy and potentially even things like using the Fed balance sheet for that administration's own political goals.

[A]

So let's talk about practical risks here. Let's say this goes through. Obviously, Lisa Cook is challenging this. Her lawsuit was filed a couple hours ago. I'm just scanning it. Targeting Trump. He's able to replace her, maybe fires Powell catastrophizes me a little bit. What are the potential negative impacts that would affect regular people? And we saw on this news the dollar tank initially and then kind of rebounded some. What are some things to be worried about?

[C]

Yeah. So let's start with the muddle through and then we can get to worst case scenario, which is not it's not like a meteor hitting the earth sort of probabilities. I think a worst case scenario is not that far fetched. But let's start with the muddle through, which tends to be what the giant $30 trillion American economy does is muddle through even when annoying things happen, even when there's inequality, even when there's all sorts of things to Complain about, about. So one thing that might happen is that there are other people that have been on in the Federal Reserve System that have had to step down because in their own words, they felt like they became a distraction from the FOMC's work. That usually had more to do with, you know, allegations of insider trading, you know, yada yada. Part of the reason I feel like markets have not freaked out as much as some feared is this idea of, like, well, you know, Trump just seems to not like this woman and has a bone to pick with her. And, well, she does seem to have maybe, again, maybe done something sketchy with her mortgage applications. And it's just one board member, you know, patrons in control, whether they got, you know, there's this very well respected, relatively dovish Fed head, Waller, who may be next in line to be chair after Powell. So there are a lot of people betting on him bringing stability when Powell's term is up in spring of next year. So there's just this like maybe frog and boiling water or maybe accurate idea that, okay, well, like Trump has a bone to pick with somebody else in government. He does something a little outside bounds or outside the usual bounds. But, you know, we keep all chugging and we watch for Nvidia earnings and we track, you know, tariffs for inflation risk. And let's all move along long here, don't pay attention to the Trump show. So there's a possibility that those folks are right. Here's the worst case scenario. The Fed has a meeting in September, mid September, to decide on rate policy. Right now, I think markets are betting slightly in favor of a rate cut because even though inflation is picking up a bit in large part due to tariffs, the labor market's also slowing down quite a bit. So just on the merits, there are, outside of the Trumpiness, you know, extravaganza, there are reasons for uncertainty there.

[A]

Economics slowing the fact that the economy is getting worse is a case for Trump getting what he wants in a kind of a weird way.

[C]

Yeah, yeah. Which is weirdly a replay of like the 2018 situation where Powell was a new Fed chair and Trump was violating norms in that case. And then. But then, like, weirdly enough, the merits actually made sense that the Fed did cut rates on the merits. But it's funny how that might happen again. So let's get back to Cook. So maybe she decides to show up for work work, because like she has said and her lawyers have said, no, you cannot do this. You can't fire me by tweet. And okay, well then let's say Trump sends the US Marshals to remove her. That's not necessarily unimaginable. And then what do the courts do? Because that's so soon, right? It's August 28th, when, when we're talking, is this, is this going to be resolved? Are we going to have a court injunction or a ruling of some sort by mid September? We don't know. And then let's say there is a ruling that were, it's, it's, you know, forgive me, I'm not a lawyer. Maybe the word is it's stayed like, yeah, so she's able to, at least for now, be in the role. But then Trump says, I don't care about that lower court. You know, I have my pals on the Supreme Court. And no, we're still going to either try to remove her from her office or block her from her office or, or even just a truth social that says, hey, Lisa Cook, if you, if you dare come into your office at the Fed at the Eccles Building in Washington, you know, I will try to see to it that you don't get in. That's a real constitutional limbo with also kind of violent adjacent implications. Right.

[A]

There's also like a step down from that. That's like, I'm not sitting in the US Marshals. But it's just like, you showed up to this. Let's say she shows up and they don't lower the rates, you know, because like you said, it's a close call. And he's like, okay, fuck it. No foul's fired too. You know what I mean? Like, that's another.

[C]

Yeah, yeah, we are, we are not very far off from even further escalation. And I would not downplay the stakes.

[A]

Okay, so play game out the bulwark, love. We love catastrophizing here. So game out the word. Unfortunately, it's come to fruition a few too many times. So we got to play it out now. So that happens. Some version of the worst case scenario happens. What do we see as economic impact? Like I mentioned earlier when this happened, the dollar tanked initially, but, but then kind of rebounded. The market's been pretty resilient. The bond market looks a little spooked. Right. Like interest rates are high. What are some real economic impacts that people would feel?

[C]

Let's say that tariff induced inflation is a little bit worse than we thought. Right. When Biden left office, inflation was tilting back down towards the 2% target by some measures that leave out this thing called owner's equivalent rent which neither here nor there, but it has to do with housing costs. By some measures, it was mission accomplished. We had the Fed's target price stability back. The Fed had already cut in, I believe September of last year and was essentially projecting that there would be room for further rate cuts down the road. Again, this is where we get to the then versus now. The idea then was that what's called the long end of the treasury curve curve, the 10 year especially, that's the benchmark. And the idea was, well, because the Fed is working on the merits, the 10 year would flow down along with the front end, which the Fed has a lot of control over. Whereas the 10 year, again, this benchmark interest rate that determines mortgage rates, which people are understandably very upset about because they're quite high. Car loan rates, which same story. As well as credit card rates. Same story. Everybody would like those to be going back down.

[A]

Down.

[C]

The thing is, the cost of money is the biggest way that the Federal Reserve and all central banks, it's the biggest way that they exert downward pressure on the economy. If they're bringing rates down, if they're cheapening the cost of credit on the merits, because, hey, inflation's coming down, we can let the economy flow a little bit more, we can let people borrow more cheaply. Let's let this thing run a bit hot. If you're doing that on the merits, well then markets won't be skeptical and sell off assets that determine the price of longer term borrowing. They'll go along right with the Fed because the Fed is working off of merits. That makes sense. Inflation is going this way, growth is going this way. It's all, all the parts of the system are working as they should. If Stephen Myron and potentially somebody that replaces Powell, who is, let's just be blunt here, seen by markets, which is ultimately what matters, not you or me or political podcast or columnist at any given newspaper. If markets think that Trump has put in a hack and then he already has a loyalist that he's trying to put in, and then suddenly the FOMC starts voting in favor of what Trump would like rather than based on the merits of the economy, well then you could see a drop in the dollar that isn't just an overnight flinch based out of fear, but based on an active decrease in central bank independence, well then you might see the selling off not just of, of U.S. treasury bonds, but also a weakening of the dollar itself. And beyond the fact that that would make mortgages more expensive again, buying a car more expensive again, on and on, then you're also getting to really funky geopolitical questions. Because part of the reason people even listen to the United States and the global political system is because of the strength of the dollar and the strength of our financial markets. It's not because they like us. In fact, I think I haven't checked the international polls, but I don't think we're doing too department right now. If in addition to not being liked. So that's I guess our soft power, we lose what is actually quietly one of the biggest sources of our hard power, which is our currency, which enables us to issue sanctions and to block people from being under our military umbrella or to include them in our military umbrella. All that is backed by dollar dominance. And if that slips, then Trump, who cares so much about strength, actually would end up having this master plan of his completely backfire. And putting Trump aside. I think what matters is the people. It would terribly impact the people who put this guy back in because of rose colored lenses of having an idea that 2019, 2018, for all of its cultural war, was more stable. And so he's actively undermining potentially the exact reason that he got back into office. I don't think people put Trump back into office because they wanted him to take over the Fed.

[A]

Yeah, I mean, look, you're singing from my hymn book, which is the risk to the US global stability and how that trickles down. But I mean, even at just a more micro level, there's some dark irony in the fact that he could do all of this to get interest rates down. And it does actually nothing meaningfully for people that have mortgages or more middle long term rates because of the reaction of the bond market. That seems like a pretty like that does not. That seems like a decently likely kind of outcome, frankly of the situation.

[C]

Yeah, yeah. I mean, like I said, we could easily just muddle through. It's frustrating for people that operate in the take sphere because like in a textbook way, when there are certain bad policies enacted, you would expect there to be consequences. But you know, it's a $30 trillion economy. 70% of it is services, 70% of it is consumption. And a lot of the economy is just people paying their bills on time. And you know, two guys like us, you know, chatting over the phone or on Zoom or whatever and then going to get a beer like, you know, or you're buying your kids shoes because it's the start of school. Like that's what's so odd about these moments is and why I mentioned the idea of a frog boiling like it will. By the time any of this gets to the point where it's disrupting daily life, it could be too late.

[A]

All right, any other broad state of the economy thoughts? And we had 229,000 jobless claims this morning, which was about expectations. Job market is a little tight, but not catastrophic. Stock market's kind of resilient. A lot of other bad signs, kind of in macro of weakening economy decision. Does that sound about right?

[C]

Yeah, it's a very like, meh economy. And one of the things that would help is we actually would have probably been in a similar situation. Let's say to go back to the previous hypothetical, let's say Harris won. Harris administration is probably looking at an economy that after the boom, the booming job market of 2021 through 2023 was slowing down and that probably needs needed lower interest rates in order to keep the business cycle going. Right. And while there would have been disagreements about how she approached housing.

[B]

Right.

[C]

Which has been very hot this year. And this, that of the other, you know, regulations which you have Kepler at a base level. And let's, let's take Harris out of it. A replacement level Republican. That wouldn't have been obsessed with.

[A]

Well, there wouldn't have been tariffs.

[C]

Yeah, yeah. That wouldn't have been obsessed with the global tariff campaign. There are some things happening in our economy right now that are structural, whether it's inequality, which is just God awful. And I know it's not sexy to talk about inequality anymore because that feels like so 2010s, but I mean, it's a real awful problem. And the lack of socioeconomic mobility in this country. There's also the threat of AI and the really scary fact that for a lot of entry level, college educated folks, like some of these models are just as good as them, which. Which is kind of coldless to say. But I mean, like you, you. I spent a good amount of my time talking to employers and they actively are just like, why would I hire an analyst or a research assistant or a.

[A]

Maybe because the model still need. I mean, I guess humans make bad mistakes too. The model still makes some mistakes. You know, I play a song at the end. Yeah, I play a song at the end of every episode. I had Gary Kasparov on last week and I was like, where has he been mentioned in music? Because I wanted to play one of the songs that mentioned Gary and. And chatgpt was like, oh, and LCD sound. Losing my edge. I was like, whoa, you're in my wheelhouse now. I was like, that's not true. It's like, I know every word to that song. So, you know, I mean, maybe that's.

[C]

Why the hallucinations are wild and. Yes. No, I'm not, I'm not. You know, it's. We're not at iRobot, like, for sure, but like there, there are structural things that would have happened regardless. But like, it is really crazy. I know. You know, Joe Weisenthal, he's a pal of mine and like, I was talking with him and some folks recently who are also kind of in like the, the macro and finance world, and we were just talking about how like, you know, it's, it's so insane that like this Trump 2.0 group could have come in and like done all their culture war stuff and probably done like some pretty gross level of xenophobic mass deportation and still had polls going okay for them and just done like nothing otherwise and just let the economy cool down as it was cooling down and then let the Fed do its job.

[B]

Job.

[C]

And then mortgage rates fall and then people are potentially back in that 2019 mood where everybody in MSNBC is tearing their hair out, but the rest of the country is like, ah, well, like, he's kind of an asshole, but the economy's doing okay.

[A]

And doing nothing would obviously better. I know, it's just this combo and all the, I mean, obviously the tariffs causing the light inflation. And then you have the bbb, which we haven't really mentioned, but that, you know, the debt bomb there also is negatively impacting interest rates in the bond market.

[C]

I would disagree.

[A]

And then to your inequality point, it's just like a transfer. Like all he's doing is a big wealth transfer. It's like a tax cut for rich people. And then tariffs are affecting, you know, working class and Right. Middle class people.

[C]

Whereas last time you just cut taxes mostly for the rich and corporations. But he didn't really touch the entitlements this time. You know, he, you know, whacked the bottom and sprayed more gifts at the top and then, you know, did a little bit of, you know, comparatively little on no tax, on tips and. Yeah, no, no tax and overtime, but some gimmicks. Yeah, it's just, I guess I shouldn't be surprised because so much of what seems to be powering this Trump 2.0 administration is not rationality. But it's just like, if I was on that side and I was ever involved in politics, I'd just be like, do nothing.

[B]

Dude.

[A]

Golf. Yeah, golf, bro.

[C]

Literally. Yeah.

[A]

Which is Change the Gulf. Change the name of Gulf of Mexico to Gulf of America. Which takes us to our final topic. I guess maybe you wouldn't have. Do we want America's name on the Gulf? Who knows what kind of torment it might cause going forward. But yeah, had he just done some name changes and I think he would have been better off. Let's do the Katrina thing real quick. So tomorrow's the 20 year anniversary. When I had your brother on like a year and a half ago, he talked about how formative it was for him and I meant to go back and listen to it, but I forgot. I'm kind of going from memory. I think he was a senior in high school or junior. And I guess you're younger, so it was maybe a little less.

[C]

Yeah, he's six years older than me.

[A]

Yeah. So less. So you were pretty young.

[C]

I was 11.

[A]

Yeah. So I'm just wondering what kind of memories you have of that, whether. What sort of the significance you think of it as now two decades on. If you have any other deep thoughts or ruminations.

[C]

Yeah, well, no, I don't have deep thoughts. My brother does. Deep. But I do have thoughts. Yeah. It was awful. It was. Speaking of inequality. It was really. I had a very Disney Channel childhood.

[A]

Sweet life with Cody and Tal.

[C]

Yeah. Except imagine just oak trees in the bayou and just. And like, you know, Vietnamese and white and black friends and we're all frolicking and having pool parties like I like any 11 year old. I didn't think about the deep inequality in my city and in the country that much. I was a fucking kid. And then I just saw how, you know, we had the money and sort of means and social capital to just go over to my uncle's place and basically have vacation. Then There were other 11 year olds that were on their roofs or at the Superdome because either they couldn't afford to evacuate or maybe they could. But the idea of, okay, well then how are we going to get back? And you also have to keep in mind August 29th is the end of the month and the 1st and 15th. If you're a person that is quite dependent on government assistance, once you get to the end of the month, you're running pretty thin. So there are a lot of people that would have left if this happened in, in early, in mid August, but that we're not able to. And so that was. Though I only learned the economic numbers there later on I could just see I was on my uncle's couch in Houston watching on CNN all the awfulness that was happening. Anderson Cooper and all the folks that were reporting it down there, which is I think part of when I look back at it, why I ended up being interested in journalism. But yeah, they're like, oh wow, I'm here and I'm comfortable with my family and there are all these kids just like me that weren't able to escape that. That really haunted me for quite some time. And then I guess thinking about New Orleans now, the doomerism around climate change is sometimes appropriate, but like I really disdain, as we talked about regarding a certain article.

[A]

We'll just say it, we'll say it. You don't have to pick on them. I'll pick on them. There's these articles happen like every other year or so, but this, the latest is the Economy Economist. The headline is, it's very, it's really a really sensitive headline for the 20 year Katrina anniversary. Does it make sense for the US to keep subsidizing a sinking city? You always have all these as if there's like some alternative. Some alternative, I guess maybe mass evacuate everybody to Baton Rouge would be the, would be the plan?

[C]

Well, no. Well, I mean the implicit plan and it's kind of, you know, I've been an editor and I've been a reporter so I know how one structures news stories and so they don't. It gets quite explicit, but it's mostly implicit. The implied message through using the voices of other characters, shall we say, is that, you know, well, it could be worth it to save New Orleans if it had the GDP of Miami which is under threat, or the GDP of New York which is obviously under threat. Anybody that's lived in Brooklyn knows how much the flooding risk of low lying parts of that area and that the subway is always flooding these days. Right. We could go on and on. There's, there's the majority of the population or something like that near. The majority of population lives near coast and a lot of people live in underlying areas. But you know what, that there's also people, you know, at or below sea level in places like Amsterdam. Right. And in places throughout the world, you know what happens? The government values the lives of those people. And unless there is actually a low population area, there are low population areas that are also facing climate risk risk. Okay, yeah, that makes sense to make some of those really bloodless or even cold blooded calculations. But there's a million plus people in the greater New Orleans metro area and to openly say in a always fact checked and usually carefully reported magazine that like, well, you know, the human capital folks down there is pretty low and GDP is low.

[A]

Human capital. Yeah, it's just tourism. It's just tour. Because this stuff doesn't matter. It's just tourism, restaurants, music, food. It's all the. This is low capital.

[C]

Yeah, yeah. I don't, I don't imagine. I know some folks that have, that are at the Economist now or that have worked there before who, who are okay eggs. But yeah, if we're going to. Since they're being mean about my city, we can be a little bit mean to them. I don't know of too many people that likely work at the Economist that would be as fun to get a beer with down here in New Orleans. Compared with you, they're probably not the life of the party. So maybe that's part of why they don't understand why New Orleans is so great. You know, culture matters and people matter and you can't value them purely and you know, their ability to consume or their likelihood of them filing a patent and being an inventor and keeping that human capital in the metro area.

[A]

Like, it's just, we're doing high capital things like market timing.

[C]

Right.

[A]

You know, very critical.

[C]

I love economics. I think it's a really important way of analyzing the world. It's, it's part of why I'm employed is trying to understand it myself and then explain it to people. But there, there is a certain social Darwinism to it if you analyze it without context and without humanism. And ultimately we are humans in a society and I think that matters most. So hopefully we, you know, that's the last of those sorts of articles from the Economist for, for a little while.

[A]

Wow. How do you feel being back just a little bit? I mean, you were young, obviously, so like the differences and stuff.

[C]

Yeah. But weirdly, like, I mean, I definitely don't remember five and under very well, but maybe this is just me. I have like a pretty good memory of 5 211. There are certain things of pre Katrina New Orleans that I'll always miss and that, you know, aren't ever going to quite be the same. But like, there are things that are improving in New Orleans and that I think are, are great. And I think we have the possibility to recognize that with like a proper, dare I say, green New Deal style investment in places like New Orleans, we can fortify our wetlands and learn how to live better with the water, you know, desalinate the water. What I really like about my colleague Ezra Klein's new book with Derek Thompson, Abundance is like, it takes These things that could be. Be really awful seeming and, like, these challenges that are so large and, you know, kind of goes JFK style and says, like, no, because it's hard, because it can sometimes feel overwhelming. Like, let's, like, let's put our brains together and learn how to solve these things. And then hopefully between, you know, technology and democracy and this, that and the other, like, hopefully we have, you know, know, shorter work weeks and healthier coast and. And better water and, like, we all can spend more time, like, reading and acting and dancing and, like, you know, and chatting about politics.

[A]

Right.

[C]

Like, this is, you know, we'll always have things to argue about, but I don't think we need to argue about whether, you know, certain cities should exist or not. So I'm going to go over to some of the memorials because there were lives lost, and I grew up in my family. My mother's side's very Catholic. So even though I'm not really a practicing Catholic anymore, I do still kind of consider myself a spiritual person. So definitely want to pay my respects. And then, you know, I'm sure in New Orleans fashion, there'll be, like, a bunch of really fun celebratory stuff going on this weekend, too. So maybe I'll see you at one.

[A]

Or two of them. You'll see me around, man. It's good to see you. It's good to meet you and appreciate you very much. We'll be seeing you around town.

[C]

All right, see you. Thanks, y'.

[A]

All. Thanks to my buddy Sam Stein for jumping on and going over the breaking news at the top. Also, if you're not a. If you're just a podcast listener, you're not a YouTube viewer, and you're just looking for some laughs this weekend. I do have to say, our fingering trio materials with me and Sam and Will. Summer have been pretty good, and you might want to Google those or avail yourself of those over on YouTube. And obviously, I appreciate Ted a bunch for coming on and giving us some New Orleans memories, talking about the economy. I'll be back tomorrow. I'm. I'm treating myself to something tonight, so we'll see if I'm at 100%. But the good news is we've got a great guest who can carry me if I'm not. So we'll see y' all then. Peace.

[D]

30 miles out in the Gulf stream I can hear them south winds mo the bridges are looking lower Our shrimp boats are hurrying home the old man down in the water slowly turned his head he took another sip from his whiskey bottom and looked at me and he said I was born in the rain by the poncha train Underneath the Louisiana and a moon I don't mind the strain of a hurricane they come around every June I black water a devil's daughter she's hot and she's cold and she's mean My nobody's taught her that it takes a lot of water to wash away New Orleans.

[A]

A man.

[D]

Come down from Chicago gonna sit that Livy right It's gotta be up about 3ft higher won't make it through the end of the night the old man down in Nickwater said don't you listen to that boy the water'll be down by morning sun and we begin back on his way to Illinois Cause I was born in the rain by the Pontchartrain Underneath the Louisiana moon Here I don't find the strain of a hurricane they come around every tune I want to A devil's daughter she's hot and she's cold and she's mean Here are the people finally taught her that it takes a lot of water to wash away in New Orleans.

[A]

The Bulwark Podcast is produced by Katie Cooper with audio engineering and editing by Jason Brown.