Zerlina Maxwell and Josh Barro: We Are in a Bad Place

Summary

The Bulwark Podcast: "Zerlina Maxwell and Josh Barro: We Are in a Bad Place" – Detailed Summary

Release Date: August 6, 2025

In this compelling episode of The Bulwark Podcast, host Tim Miller engages in an in-depth conversation with political analyst Zerlina Maxwell and economic commentator Josh Barro. The discussion navigates the tumultuous landscape of American politics, demographic shifts, and economic challenges, providing listeners with insightful analysis and thoughtful perspectives on the current state of the nation.

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1. Texas Redistricting and Gerrymandering

Timestamp: [03:58] - [06:52]

The episode opens with Miller and Maxwell delving into the contentious issue of Texas redistricting. Maxwell highlights the strategic moves by Republican leadership, particularly Governor Greg Abbott's efforts to remove Democrat Gene Wu from office. This maneuver aims to prevent Democrats from denying a quorum necessary for redrawing legislative districts.

Notable Quote:

Maxwell [06:29]: "It's racist gerrymandering."

Maxwell argues that the redistricting efforts are less about traditional partisanship and more about racially motivated tactics aimed at diluting the influence of minority voters. She emphasizes that demographic shifts in Texas, moving towards a more diverse electorate, are prompting the Republican Party to consolidate power by marginalizing Latino, Black, and AAPI (Asian American and Pacific Islander) communities.

Timestamp: [05:05] - [06:40]

The conversation underscores how Republicans are avoiding accountability for policies that adversely affect voters, such as cuts to Medicaid and food stamps, which contradict their 2024 campaign promises of making lives more affordable.

Notable Quote:

Miller [05:12]: "Politics was supposed to be right. But the second reason is something that really is getting lost in this conversation..."

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2. Impact on Latino and Black Voters

Timestamp: [06:52] - [12:18]

Maxwell elaborates on the negative repercussions of restrictive immigration policies, particularly ICE enforcement actions targeting predominantly Latino communities. She predicts that these policies will erode support among Latino voters as families are disrupted and individuals face detention.

Notable Quote:

Maxwell [10:00]: "I think that when you have a family member or a friend or somebody in your community who has been ripped away from their family, that hits you in a particular way if that person looks like you."

Maxwell criticizes the Republican Party's miscalculation in assuming that Latino voters will remain passive in the face of such aggression. She warns that as more community members are directly impacted, empathy and opposition to these policies will grow, challenging the GOP's influence.

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3. Democratic Party's Challenges and Strategies

Timestamp: [12:18] - [15:00]

The discussion shifts to the Democratic Party's struggles in reconnecting with diverse communities. Maxwell asserts that Democrats need to actively defend and support communities of color to bolster voter turnout and loyalty.

Notable Quote:

Maxwell [12:20]: "Talking about it a lot more. Defending communities in a much bolder way."

She criticizes the party's reliance on rural bus tours and insufficient engagement with minorities, advocating instead for a holistic approach that addresses both economic and social issues to resonate with a broader electorate.

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4. Federal Policies on Immigration and ICE

Timestamp: [20:25] - [23:48]

Miller introduces a heated topic regarding the Jeffrey Epstein case, highlighting a meeting involving high-ranking officials like JD Vance, Pam Bondi, and FBI Director Cash Patel. He questions the political implications and potential threats posed by former President Trump.

Notable Quote:

Maxwell [20:56]: "The Department of Justice has just completely been co-opted by the executive branch in terms of political moves."

Maxwell critiques the lack of judicial independence, suggesting that the administration's handling of the Epstein files is partisan rather than focused on justice for victims. She expresses skepticism about the administration's commitment to accountability, especially concerning Trump.

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5. Economic Analysis with Josh Barro

Timestamp: [37:25] - [72:11]

Josh Barro joins the conversation to analyze recent economic indicators and policies. He begins by discussing the impact of Trump's tariff policies, noting the initial market downturn followed by a surprising recovery, which masked underlying economic weaknesses.

Notable Quote:

Barro [38:34]: "It's looking like what the economists said the tariffs would be, which is their drag on the economy."

Barro explains that while tariffs were expected to slow economic growth, their impact is nuanced due to the predominance of the service sector in the U.S. economy. He highlights that industries like manufacturing and construction have been adversely affected by both tariffs and restrictive immigration policies, leading to increased costs and reduced capacity.

Timestamp: [44:16] - [51:38]

Further, Barro addresses the labor market implications of reduced immigration, stating that lower job creation numbers do not necessarily indicate a weakening economy but reflect the reduced need to absorb non-voting immigrants. He touches on the Federal Reserve's role, predicting potential rate cuts in response to the slowing economy and elevated inflation.

Notable Quote:

Barro [51:34]: "If the government data gets less accurate, there will be these efforts to privately replicate the data and correct it, but they won't be as good as a BLS that does a really good job in the first place."

He expresses concern over the Bureau of Labor Statistics's integrity, especially with recent resignations and potential political interference, which could undermine the reliability of economic data.

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6. Market Performance and AI's Role

Timestamp: [68:27] - [72:03]

Barro speculates on the stock market's resilience, attributing it to factors like AI advancements that fuel optimism and offset negative impacts from tariffs and immigration policies. He notes the psychological effect of presidential announcements, where markets recover after initial negative reactions when policies are adjusted.

Notable Quote:

Barro [68:34]: "There's really, really a lot of enthusiasm about AI and I'm not an expert on bubble like enthusiasm."

He concludes that while the tariffs and immigration restrictions present long-term challenges, the overall economic impact remains manageable without pushing the economy into a recession.

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7. Light-Hearted Discussion: Mustaches and Cultural Shifts

Timestamp: [72:09] - [74:11]

In a brief and humorous segment, Miller and Barro engage in a playful debate about the resurgence of mustaches among different demographics. They touch on themes of cultural appropriation and identity politics, concluding with a light-hearted stance on maintaining personal style choices.

Notable Quote:

Miller [72:00]: "It's a great place to leave it. Macho man Josh Barrow."

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8. Closing Remarks

The episode wraps up with acknowledgments to guests and brief mentions of upcoming segments, maintaining the podcast's signature blend of serious analysis and conversational banter.

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Concluding Insights

This episode of The Bulwark Podcast offers a thorough examination of the political and economic challenges facing the United States. Through Maxwell's incisive analysis of gerrymandering and demographic shifts and Barro's detailed economic insights, listeners gain a nuanced understanding of how current policies are reshaping the nation's landscape. The conversation emphasizes the critical need for strategic political engagement and the importance of maintaining institutional integrity in economic reporting.

Key Takeaways:

• Racial Gerrymandering: Republican strategies in Texas aim to marginalize minority voters amidst significant demographic changes.

• Immigration Policies: Restrictive ICE actions are likely to erode Latino and Black voter support, challenging GOP's long-term influence.

• Democratic Strategies: Democrats must adopt bolder approaches to engage and support diverse communities to rebuild voter trust and participation.

• Economic Policies: Tariffs and immigration restrictions pose complex challenges, with nuanced impacts on different sectors of the economy.

• Institutional Integrity: Concerns over the independence of agencies like the Bureau of Labor Statistics highlight the need for unbiased economic data to inform policy and market decisions.

Overall, the episode underscores a critical juncture in American politics and economics, urging both parties to address underlying issues to ensure a stable and inclusive future.

Transcript

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[Tim Miller]

Hello and welcome to the Bulwark Podcast. I'm your host, Tim Miller. I got something of a quadruple header for you today. I'm off a vacation, so you know, buckle in over on the Bulwark Takes feed. I'd employ you to check that out because with Will Summer I I discuss an insane MAGA influencer girl feud that includes accusations of public fingering at a TPUSA event. So you know, if you just need a little dessert today, check that out. Sam stein is on TNL. JBL's out. So me, Sam and Sarah are doing politics talk. You can check that out on the Next Level feed and right here on the Borg podcast, it's a double header. In segment two, we got Josh Barrow talking all things economy that jobs report questions of the Fed said. But first, she's a political analyst and host of Mornings with Zerlina on Sirius xm. Her substack is the Inner Work Dispatch. Zerlina Maxwell, what's up girl?

[Carrie Champion]

What's up? How are you? I haven't seen you in a Long time.

[Tim Miller]

Yeah, it's been too long. I'm doing pretty good, all things considered. I went to universal with with 27 year olds yesterday.

[Carrie Champion]

That's so fun.

[Tim Miller]

So you know I'm alive, right?

[Carrie Champion]

No, that's really fun.

[Tim Miller]

Was it yesterday or was it Monday? It was two days ago. It feels like yesterday, actually. I flew all day with the child yesterday.

[Carrie Champion]

So lean into the inner child. We're embracing that.

[Tim Miller]

That's true. Some whimsy.

[Carrie Champion]

Yeah.

[Tim Miller]

Finding some whimsy. I found a little whimsy on the Jurassic park ride, I will admit. So we're doing good. Have you caught any of the MAGA Girl feud?

[Carrie Champion]

I have not. That was my first time hearing about it.

[Tim Miller]

You're in for a treat. If you check out that video, you're in for a treat. I got to tell you, people are coming out of the wood anyway. It's something else. All right. Let's do some real business, though. I want to first talk to you about the Texas redistricting stuff. There continues to be, I guess, new developments on that front. Greg Abbott yesterday began acting to remove Texas Democrat Gene Wu from office. He's, I guess, the ringleader of the group, that of the Texas Democrats that have left for Illinois to deny the Republicans a quorum to redraw the districts. There are a couple of different kind of elements of this I want to talk to you about, but just first on, like the straight anti Democratic element of it and how that has really kind of infected, like the Republican Party, you know, stern to stem here.

[Carrie Champion]

I've been thinking so much about how to talk about the Texas redistricting in a way that breaks through some of the media narratives around what's happening. Because every single story I'm reading in the mainstream press is about how this is partisan gerrymandering or that this is hyper partisanship. And one of the things that I keep going back to is, is the reason why this is happening now, right? There's partisan gerrymandering. That's the thing that happens in blue states and red states. And that's something that we've tried to deal with for many, many years. But it's happening now and in this administration for two reasons. Number one, the Republicans do not want to have to answer to the voters based on the policies that they have passed. Right? They don't want to have to face the voters and explain why they kicked millions of people from Medicaid and taking away food stamps and are trying to make the lives of the American public harder instead of more affordable, which is what they ran on in 2024. That's the first point. So that's why it's happening now.

[Tim Miller]

Yeah. One theory that they could have done is, you know, tried to pass popular things, imagine that, that the people liked and then maybe they wouldn't have had any issues in the midterms.

[Carrie Champion]

Politics was supposed to be right. But the second reason is something that really is getting lost in this conversation and something that I've been thinking about for a long time because I wrote a book in 2020 about the demographic shifts in the United States and Texas. It's no coincidence that this is happening in Texas because Texas is one of the states where the first one of the first states in the country where the demographic shifts are shifting towards a minority white electorate. And that's why this is happening now. Right. It's no coincidence that it's a Trump Republican Party that's doing this. But basically they're trying to consolidate their power and dilute the power of the demographics, the non white electorate that is growing in numbers that don't like their policies, but also that they are antagonistic towards via their policies. And so if you dilute the power of Latino voters and black voters and AAPI voters, then you don't have to worry about being racist or discriminatory or aggressive in terms of your ICE tactics. And so I think that there's two reasons why this is happening now. And it's not just hyper partisanship. That's something that's always existed. Partisanship is a thing. It's not partisan gerrymandering. In my opinion, it's racist gerrymandering.

[Tim Miller]

Yeah, I just pulled up your book because I forgot what it was called. The End of White Politics, how to Heal Our Liberal Divide. The subhead, you know, I don't know how the healing is. Healing is still coming.

[Carrie Champion]

The healing didn't happen. The healing didn't happen. It's a lot worse than I predicted. So much worse than I predicted. That's the only regret I have about the book is that it has gotten so much worse than I thought it could get.

[Tim Miller]

I hear that. I mean, I wrote a book about trying to analyze why people went along with Trump before Trump came back. So, you know, sometimes things don't age, you know, aspirationally. Healing our liberal divide is important though. Here's the thing about this redistrict for me is for a long time even really aggressive partisan Republicans that did not care about the rules, like, felt like they had to put up a patina of a rationale for something or responsibility. Right. Like, and. And that's actually a good thing. It's kind of like how I'm always on the side of virtue signaling people. Virtue signaling gets a bad rap. And I'm like, if people feel like they have to virtue signal, that's better than the alternative, right? We, like, ideally, we'd like people to have actual virtue. Absolutely. Virtue signaling would be the next best. Right. In this case, it's like. Right. It's sort of like having fair districts would be the. I mean, I feel like you have to like, at least kind of come up with a rationale that makes it seem fair would be the next best. Right. And then this now and Trump, too. They're all just basically like, look, we don't have to even care about any of this. It's just f you. It's power politics all the way down. The Rachel side of it, which I'm glad you brought up because we haven't talked about on the, on the pod is interesting because it's actually a little different with black and Latino voters, Right? Like, with black voters in particular, they're like, fuck you. Essentially, like, we're going to draw these districts and do not care at all. Right. And with Latinos, we talked about this a little yesterday. They're like, making a bet that their gains among Latinos are going to stay. Right. And so they're like, we can gerrymander this a little bit more, you know, and put more Latinos in a district than we would have before because we didn't think they liked us. And I don't. That might be part of it, that. That backfires sometimes. Like identity. We've seen on the left, identity politics backfire. Like some. That might be the part that backfires a little bit on them. But I don't know what. What do you make about the fact that they're particularly targeting and disenfranchising black voters while kind of making this bet that Latino voters are gonna continue the trend towards them?

[Carrie Champion]

I think it's a bad bet. I mean, I honestly think it's a bad bet. I think that one of the things that they're missing, and I feel like in the conversation around ICE and immigration, what they don't realize is that, okay, you say, and your argument was, we're going after the worst of the worst, we're going after the criminals. And then you see people being arrested at their court hearings, and you're like, wait, maybe they aren't going after criminals. Maybe they're going after your neighbor or somebody that most of the Latino voters are connected to or know. Right. Like, at the. At the end of the day, by the time the 2026 midterms comes around, pretty much every single Latino person in Texas is going to know somebody directly impacted by ICE and immigration, particularly after the Big Ugly bill infused millions of dollars into enforcement. And so I feel like when you see people who look like you who aren't doing anything wrong, and, I mean, I would sort of broaden this out. I hope that the white people in Texas also feel empathetic towards people who are getting snatched away from their families and their communities and then put into detention facilities or shipped off to another place. I think that people are gonna start to get to the point where they know somebody who's directly impacted. I think the bet that Latinos are gonna continue to support them is. Is the wrong bet. Now, I've been wrong. I've been wrong in my life. Like, I don't pretend to predict the future. I can't. But I do think that when you have a family member or a friend or somebody in your community who has been ripped away from their family, that hits you in a particular way if that person looks like you or if you've changed your behavior. Right. Because one of the things that I think most white Americans don't realize is that black and brown people have been having real conversations around what identification we need to have when we walk around. Or passport cards are now like a popular thing that people are trying to get their hands on so that they can walk around with that as opposed to the full passport book, because that at least proves their American citizenship, even if they are American citizens, just because they know that if they look a certain way, they could be stopped and detained and then maybe they'll figure it out later, but they're still detained for hours or days or weeks and separated from their families, not being able to go to work and support all the people that they care about. And I mean, that's real, right? That's the kind of thing that I think the GOP implementing everything Trump wants and Stephen Miller wants, they're sort of missing that this is directly impacting people's lives right now in a very negative way. People are very afraid. There are lots of kids who don't wanna go to school in some of these communities. There are people that don't wanna go to work in some of these communities. Parents are not dropping their kids off at school in some of these communities. So the direct impact and the negative on Latino voters and black voters and people, not even voters. Cause we always say voters as if, like, these aren't just humans.

[Tim Miller]

It matters if they're not voters and.

[Carrie Champion]

Some of them are campaigning even if they don't vote. Right, right, right, right. And so I think that, I think it's a bad bet. I think it's a little bit shortsighted. But also I'm not naive enough to believe that they don't understand that what they're trying to do by diluting the power of voters of color is basically because they are harming these communities and they know that there will be an impact. Now, they might be misreading the math in terms of how many Latino voters are keeping in some of these districts, but I do think that they understand it. I just wish Democrats would understand it as well as the Republicans do.

[Tim Miller]

What does that mean? Like, what would they be doing differently?

[Carrie Champion]

Talking about it a lot more. Defending communities in a much bolder way. I think one of the mistakes the Democrats make after every election loss is thinking that part of the reason why they lost is because. And yes, part of the reason why they lost is they have lost some inroads with white working class voters, but they don't take the message that well. Maybe if we defended and stood up for communities of color, more of them would participate.

[Tim Miller]

Yeah.

[Carrie Champion]

More of them would turn out to vote. More of them would register to vote. More of them would be aligned with the Democratic Party, not just in theory, but in voting behavior. You have to do both. And one of the lessons that they take away every time is let's go on a rural bus tour as opposed to let's go, you know what I mean? Like, and instead of let's go in, you can do the rural bus tour, but that can't be the only thing you're doing. You're not gonna win in the demography of the future, the present and the future with winning back Reagan Democrats. That's not the electorate of the future. And in some states in the present, yeah, you have to do both.

[Tim Miller]

The Democratic Party's political challenges are pretty significant. And I think that the midterms we'll see, knock on wood, we'll see how the shenanigans, the Republicans attempt, affect that, et cetera. But I think the most likely scenario, let's put it that way, is that it kind of masks the Democrats political problems because people are unhappy with the Trump administration and they're going to turn out to vote to express that unhappiness more than to express like an affirmational support for what the Democrats are doing. If you look at the Democrats numbers, they're just kind of astonishingly bad as far as their popularity and confidence in them on issues. So I'm curious what you think about that broadly, but particularly like that's true amongst black and brown voters too. Right. Like it's not just white voters. The numbers are down. They're not down as much. Right. Like it's just relationally before how they were before, you know, they've lost ground and like there are a lot of different thoughts about how to kind of reverse that. And you know, maybe it's kind of what you seem to be talking more about, like communication showing up, like demonstrating you care. Some people say it's more issue based. There'll some on the left that'll say it's more like kind of what Zoran was doing. Like, let's talk more, let's do more economic populist stuff. You hear people say voters of color aren't actually as socially liberal as like white elite progressives. Right. And so maybe you could tack back a little bit on social issues, just on that whole, you know, kind of conversation. Like what would your advice be to Democrats on trying to regain some ground in that demo?

[Carrie Champion]

Well, I mean, I think all of the things that you said are true. Right. I think that you do economic populism, I think that you do identity based and social issues. But you have to make people feel like they're seen. And I feel like there is a disconnect between regular working people of all backgrounds and what the Democratic Party is talking about often. And I think that the reason why is they're coming with their 10 point plans and their statistics and their charts and instead of really talking to people in a human way. Right. They sometimes sound too academic. I think that that's part of the disconnect. So while I don't like the rhetoric of Donald Trump obviously and the ways in which he talks about things, I think you sometimes do have to simplify things and then also tell the truth. Right. Like the system is messed up. Right. And if you're a Democrat working within the system and you're not acknowledging that the system is messed up the way, you know, folks like Bernie Sanders and AOC talk about all the time, then people are not going to listen to you because you're not talking about what they're feeling every day. They know something is wrong. They know money in politics is making it impossible for us to elect a new generation of leaders that actually look like the demographics of the country. Right. And I think that that's a piece of it too. I mean, part of it is Democrats. And this is a question that comes up all the time. Who is like the new leader who's going to lead? And it's not one person. It's never going to be one person. It's going to be people in community, people in elected office, people who are organizers, people who are activists. It's, it's the intersection of all of these different issues and the leaders in those different issue based areas that are going to have to come together collectively to help save the democracy. Because that's actually the bigger piece of it is the frustration with Democrats isn't just with Democrats, it's with the system overall. And a lot of the folks who would normally support Democrats and say I support them in a poll, those people are scared about the future of the whole thing. And the Democrats, in my opinion, often look like they're playing by a rule book from 1992 and instead of 2025 or in 2035, and they're like, you know, sending sternly worded letters when. Right. Like I sent a sternly worded letter about why the Republicans can't do the thing that they've already done. And they don't care about your letter or the fact that you're saying in front of a microphone at a press conference that they cannot do the thing that is not meeting the moment. And I think people are feeling that because they're scared about what's happening. They're scared about the future. Right. I mean, I think what the base of the party wants to see is bold leadership. That's why, you know, Cory Booker's marathon speech resonated. That's why Zoron is resonating that they want bold new leadership. And if that is not what the Democratic leadership is willing to do in this moment, then they need to make way for the next generation of people that are gonna speak more like Jasmine Crockett than traditional Democrats of the past.

[Tim Miller]

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[Carrie Champion]

Yeah.

[Tim Miller]

And then she was still investigated. Anyway, they're starting again back to having no pretense. There's no pretense of judicial independence. It's just like the Vice President, the Chief of Staff and the Attorney General, the FBI Director are like, we're just gonna have a strategy sesh on what to do about the fact that the President is at some level implicated, you know, in these files related to a child sex predator. So I'm wondering what you think about Trump's political threat. You hear from callers about this and stuff on the, on the morning show, you know, is this just. I won't prejudice you. What do you think about the salience of the story?

[Carrie Champion]

Well, it's, it's funny to me that we don't talk more about the fact that the Department of Justice has just completely been co opted by the executive branch in terms of political moves. Right. Like, and also the Director of National Intelligence, like he has completely taken these agencies that need to be separated from the political leanings of the executive branch. And he's just, they're just partisan. They're just, they're just operating on and doing whatever he wants them to do, which is something that Democrats said that he would do before the 2024 election. And people were like, oh, you're overstating things. That's not really the case. And now, I mean, think about like what Pam Bondi is doing compared to Bill Barr. Right. And he was also, you know, doing things that, you know, there are folk.

[Tim Miller]

Legal experts kind of on the Mueller report, he sort of like put out a summary of it, but that seems.

[Carrie Champion]

Like child's play compared to meeting with the vice president. The other piece of it is that, and this is something I keep going back to on my show, if Donald Trump is allegedly in these files, right? And they released these files, and I don't think that they're going to release anything to make him look bad, that this administration is not going to release anything that makes Donald Trump look bad. Like, I'm not naive enough to believe that even if he was, I don't think the people that like him are going to stop.

[Tim Miller]

He already admitted to sexually assaulting women on audio. Like, what, what is in here that could be the worse than that?

[Carrie Champion]

I feel like we want so badly in the, in the press for, you know, this to be the thing that they don't care. They won't care. They will explain it away. They want the Democratic names in the report or in the, in the files. That's what they want. They want the Democratic names. If, if Donald Trump is in the, in the files, allegedly, they will be like, well, he was there as the inside man to help out the Democrats. He was being a double agent or something like, they will explain it away. They don't care. They won't stop supporting him. And I think with two dozen or so allegations of sexual misconduct, a civil judgment against you for sexual misconduct, the Access Hollywood tape, right? Eyes and ears paying attention for the past 10 years. And if that didn't make you and your soul and your core being stop supporting Donald Trump, you're not going to stop. So I think that that conversation is almost more annoying to me than even the conversation about, and speculation about what happened to Jeffrey Epstein or is there a conspiracy here and what could be done about it? At the end of the day, all that matters to me personally is accountability for the people who have suffered, the accountability for the victims and survivors who have gone through these horrible ordeals and then watched the people who allegedly harmed them get away with it. And that at the end of the day should be in the best case scenario in the world that we don't live in. That would be the point of the meeting. But that's not.

[Tim Miller]

Do you think that's the point of the meeting? You think that's what JD and Susie are talking about? Justice for the victims?

[Carrie Champion]

No.

[Tim Miller]

I was on Truth Social this morning. That's somewhere I spend a lot of time. Just a couple of thoughts. Number one, there's.

[Carrie Champion]

What do you mean you don't have push notifications for every Donald Trump post on True Social?

[Tim Miller]

I use their search function for the first time, I think, or at least first time in a while. It is a nightmare. It's horrible. I mean it is just functionally True Social is awful. And the valuation of Truth Social is a total scam. One of the many Trump scams we don't talk about is. Figured I'd mention that. Anyway, it took me a minute, but I found because Trump leads over there a lot, like more than I think people realize. Took me a minute to find this one, but I hadn't had a chance to talk about on the pond yet. And since, since he's kind of like, I guess. Would you consider Charlemagne a competitor of yours? I guess you're both in the morning talk space. I guess he's kind of a competitor.

[Carrie Champion]

I mean, I suppose technically speaking, but I don't think I'm in the same. I mean he has 4 million listeners daily. Like, I mean, I don't know my number is, but.

[Tim Miller]

All right, well we're not asking for your numbers. Trump wrote this. I guess he's watching the stories. He's an old man who watches the stories on TV and gets mad. His daughter in law has a show on Fox now and he writes this. The wonderful and talented Lara Trump, whose show is a big rating success. Put racist Lee's bag. Charlemagne the God. Why is he allowed to use the word God when describing himself? Can anyone imagine the uproar there would be if I use that nickname? He's a low IQ individual, has no idea what words are coming out of his mouth and knows nothing. This dope would vote for Sleepy Joe or Kamala. This is the President United States. Just a reminder. Remember one year ago, our country is dead. Now it's the hottest country in the world. Maga. I also noticed when I was searching for the Charlemagne tweet, he took a shot of Gayle King. He's going after all the morning Hosts this morning, Gayle King's career is over. She should have stayed with her belief in Trump, all caps. She never had the courage to do so. No talent, no ratings, no strength. Noticing any trends.

[Carrie Champion]

Yeah. He calls black people low IQ Every time. He's always saying that. And again, we just skip over that. We're like, we don't talk about the fact that that is blatantly racist. I mean, he's always saying that black people are low iq. Not that he has never said that about somebody who's not black, but he always says it about black people, and I think it's funny. Right? And then we don't ever. We don't ever question his intelligence when I don't know if you've been paying attention to him. I have for the past 10 years. He never makes any sense to me. Yeah, I mean, he hardly makes any sense. And we never talk about. I mean, we just assume he's intelligent because he is a billionaire. We're like, oh, he must be really smart because he went to good schools and he's. He's a billionaire, so he must be really intelligent. And I don't know, why don't we ever question his level of intelligence?

[Tim Miller]

Your boy Bakari, he posted the other day, how will we know if he's in cognitive decline if this is the baseline? And then links to a different bleed he sent about Sydney Sweeney just. That has, like, misspellings and is crazy. And it is. It really is. I mean, I don't know. And I guess here's the part of him that is smart. I will say he's not intelligent. He's savvy. Like, the Charlemagne attack is like, it's not an accident. Right? Like, he knows what he's doing, you know, on the divide and conquer side of things. And it works, right? Because the white folks are watching the little readout on Fox get titillated that Charlamagne gets brought down to peg. And then, you know, the handful of conservative, like, folks we talked about earlier, working class, like, black and brown people who also don't like Charlemagne are like, all right, you know what I mean? That's what he's doing, right?

[Carrie Champion]

I think that's what he's doing. But one of the things that I say on my show all the time, and this is something that I realized as a little kid, racism itself is actually stupid, right? The idea that you are better or smarter or more intelligent than someone else because you have less melanin in your skin than someone else. When I don't know about You, Tim. But I didn't get to choose. I'm here and here we are.

[Tim Miller]

No, I didn't.

[Carrie Champion]

Here we are.

[Tim Miller]

You might call it a low IQ opinion.

[Carrie Champion]

Yeah. Like, here we are, you know, and so like, to live your life with the worldview that people who have more melanin are inferior to people who have less is stupid. Like, racism itself is stupid. And we've set up the entire world this way. We also add on top that women are inferior. And both of those things are stupid. Both of them. Right. And we like, we live every day of our lives and we act like this is not really dumb. And I think, like, as a seven year old, I was like, why is the kid next to me getting treated like he's smarter than me? And it was something that I realized as like a seven year old, I was like, the way that we've said things up doesn't make any sense to me. This is really stupid. So again, it's like, I think that savvy is the right word to use when it. With regards to how Trump plays on our stupidity and uses white supremacy to divide and conquer. But at the end of the day, I think the demographic shifts in the country are happening. That's why they're trying to deport all these people and rig the elections in a state like Texas. They're doing that now because they understand that the majority of the electorate by 2045 are going to be people of color, which is not like majority minority. It just means that there will be fewer white voters than voters of color. That's what it means. Right. White voters will be a minority. And we've never said that in the country's history. And so there is a collective freakout about that. Donald Trump is playing into that fear. Donald Trump has that fear. He shares that fear. And right now they're trying to consolidate all the power that they can before that happens.

[Tim Miller]

All right, last topic. You fled. Have you permanently fled? Are you a quasi expat or permanent?

[Carrie Champion]

Permanent is strong. I mean, I don't know. I am going to be here for the foreseeable future in Sicily. Sicily. I live in Sicily. I have to say, most people are like, oh, you live in Italy. I'm like, I live in Sicily.

[Tim Miller]

Got it.

[Carrie Champion]

I have to be very, very specific about that. And it was the best decision I think I've ever made in my entire life. And the reason is because I think there's something deeply wrong and broken in the United States. And there is a level of clarity that I am able to access in my brain here, because there's a level of peace that I've never felt in my entire life. And I still wake up every day and read about the news, and I'm doing my job covering American politics. But I also have a level of clarity because I have a little bit of a distance, and I'm talking to Europeans from all over the world all the time, watching America turn into a dumpster fire. So there's a level of clarity that comes with the distance and. But I also think a lot about the legacy of James Baldwin, who wrote most of his seminal works in Europe. And the reason why is because you have a level of psychological safety as a black person in Europe that you do not have in the United States. Doesn't mean that there is no racism other places. Sure there is. But as an American black person, there's a level of freedom and psychological security and safety that I have here that I've never felt in my entire life.

[Tim Miller]

It's interesting. I was with my bestie, who's a white girl. She happened to be in California at the same time we were. So we were hanging out and we talked about this last time. I think she also. She moved to Arpinha. So if people want to visit arpa, just let me know. I can hook you up. It's interesting. There is that simultaneous. There's a clarity of seeing all this from abroad and a relief a little bit that it's not on your shoulders. And obviously it doesn't carry the same weight as what you're talking about, but the concept is still the same. And at the same time, though, I don't know, I wonder if it's that or like, if you'd feel that same way if you'd been from there. Right. You know what I mean? It's just sort of like you also don't have to care about European concerns. And I was listening to Thomas Jad and Williamson Williams, actually, on a different podcast where he was talking about this. He lives in France, and he's like, I kind of just don't have to care about the parochial concerns here. And so do you think it's that, like, that you're an expat, that you know, that you're sort of stateless? Or is it something particular about being there, you know, that you think gives you that different perspective?

[Carrie Champion]

Well, number one, I mean, they call us expats, but I always like to chime in. I'm like, I'm an immigrant because I don't the term expat. I feel like, separates us from immigrants who are working in these communities. Right. I live in a super diverse city here in Palermo, and so I always like to chime in and be like, I am an immigrant. You know, I go to the immigration office just like all of the other immigrants here that, you know, need to get the proper documentation to be able to work. So that's first. That's first. Also, I do care about what's happening here in Europe, and I do care about European politics. I think that it allows me to just get the psychological safety of not feeling that tension in the back of my neck and always the pressure on my chest, because racism in America is extremely heavy. It's heavy to carry. You have to carry your entire life. It's hard to explain to somebody who doesn't have to experience it every single day. But here I. Not that racism is not a thing here.

[Tim Miller]

There's some racists in Italy, Right?

[Carrie Champion]

Like, I'm not naive. I'm not under any. But I don't have the same type of experiences on a basically daily basis like I did in the U.S. right. Like, I don't have those experiences here. Yes. I think I do have a certain amount of privilege because I'm an American. People see that I'm American, especially if they start talking to me. But I think that what it affords me is the ability to have psychological safety while I look at America, knowing the history of the country, and I'm able to say, ooh, it's a lot worse than it may look from the inside.

[Tim Miller]

Yeah.

[Carrie Champion]

And when I talk to folks in Europe, and I talk to even older people who maybe they live through authoritarian regimes from other parts of Europe or they more intimately know about the history specifically here even they look at me like, whoa, do you guys know how bad it is? Do you guys understand how bad it is? Do you know how far down the path towards dictatorship you actually are? And I think that that's always really important for me to talk to because I have friends here who are Sicilian. I have friends here who are from all different places throughout Europe. And I think that it's that diversity of lived experience and perspective that I didn't necessarily get in the United States because I'm mostly talking to maybe, yes, immigrants, but Americans who they think that the democracy will persist and everything will be fine. This is just regular partisanship, and the next election will change things. And I think that the perspective I get here is that. Are you sure? Are you sure? I'm not sure.

[Tim Miller]

Well, that's a very bulwarky place to leave it. Are you sure? I don't know. We're working it out. Zerlena Maxwell. It's good to hang with you. Maybe Palermo should be on my next summer list. I did my European vacation this year along with you, so I'm interested in that. Let's hang out again soon. I appreciate you very much.

[Carrie Champion]

Thank you.

[Tim Miller]

And up next, my man Josh Barrow with little econ talk. Stick around. All right. One of the longtime POD sponsors your favorite, Zbiotics. Let's face it, after a night with drinks, none of us bounce back quite like we used to. Except for the college kids listening to this pod. And let me tell you, it's coming for you someday, too, youngin. And there's a surefire way to have a great next day after a great night out on the town. It's with pre alcohol Zebiotics. Pre Alcohol probiotic drink is the world's first genetically engineered probiotic. It was invented by PhD scientists to tackle rough mornings after drinking. Here's how it works. When you drink, alcohol gets converted into a toxic byproduct in the gut. It's a buildup of this byproduct, not dehydration, is to blame for rough days after drinking. Pre alcohol produces an enzyme to break this byproduct down. Just remember to make pre alcohol your first drink of the night. Drink responsibly and you'll be your best tomorrow. Every time I have pre alcohol before drinks, I notice the difference the next day. We keep ending up being a drinking season. I'm, like, doing my best to not drink on podcast nights because I want to be fresh for you. I want to be sharp. But life gets in the way. I had to go to the Scissor Sisters concerts. Get invited to a Scissor Sister concert on a school night. You got to do that. Beto is having an event here in New Orleans tomorrow. On Thursday. I kind of believe that I might have a drink with Beto or some of the other people that showed up to that event. So the only way to ensure that I'm able to go out and have a couple cocktails and still perform the next day like you guys expect. As with Zebiotics Pre alcohol. Go to zebiotics.com thebullwerk to learn more and get 15% off your first order. When you use the bulwark at checkout, Zebionics is back with 100% money back guarantee. So if you're unsatisfied for any reason, they'll refund your money. No questions asked. Remember to head to zebiotics.com thebullwork and use the code thebullwork at checkout for 15% off. He writes a very serious newsletter on Substack and co hosts the legal podcast Serious Trouble with Pope Pat, otherwise known as Ken White. It's Josh Barrow. What's going on, man?

[Josh Barrow]

Hey, Tim, how are you?

[Tim Miller]

I'm doing pretty good, all things considered. You know, Me too. Life is okay. I'm back here in New Orleans. We've got the Red Dress run this weekend. Have you ever put on. You go down and drink in a red dress? Are you a dress drinker? Is that something that sounds appealing to you or is you too butch for that?

[Josh Barrow]

That is not something that I've ever done before.

[Tim Miller]

Okay.

[Josh Barrow]

I guess like New Orleans in August, you want something pretty lightweight. If you're running around drinking, you want.

[Tim Miller]

Something flowy, something flouncy, something to think about. Yeah. Yeah. All right, well, maybe next summer we'll invite you down. August 9th is maybe not the best time to visit New Orleans. So it's mostly a local thing, but we'll be doing well.

[Josh Barrow]

Yeah, I don't think so.

[Tim Miller]

I want to grab you to discuss all things economy. You had a substack post day or two ago, said, well, this jobs report clarifies some things. And it did. So I'm curious just on your kind of macro view on what's happening with the economy and also I guess on the meta, the conversation that was happening in Econ world for the weeks leading up to this, where people are like, wow, something's off about this. And I think now we have a pretty clear picture of how things look.

[Josh Barrow]

Yeah. I mean, it had been this sort of surprising thing because, I mean, remember back in early April, the president announced, quote, unquote, Liberation Day. He announced these massive tariffs on virtually every country in the world. And there was hugely negative market reaction to that. And it really looked like the concern was, this is going to push us into a recession. Not only are these tariffs very high and disruptive, they're also uncertain. People can't do their business investment planning when they don't know what tax policy is going to face them based on whether they put a factory here or there. And it sort of causes you to want to build a factory nowhere. And there was really a lot of deep concern about that. And then the White House partially dialed back that stuff. They especially dialed back the China tariffs, a lot of. And the markets basically just completely recovered, started hitting new records again, and the economic data Continued to look largely pretty good. I mean, maybe indicating a little bit of slowdown, but fairly strong jobs reports. Inflation is ticking up a little bit, but not a ton. And it sort of looked like the tariffs basically didn't matter very much. And then similarly, you've had this huge immigration crackdown that has led to a cratering in the flow of immigrants into the United States. You also have these disruptions at workplaces that are making it difficult for people who are not authorized to work in the US but have been doing so regardless to go and work. And so you should expect some economic disruption from that, regardless of whether or not you think it's good policy. And that hadn't really been showing up very much in the data, and it was a little bit confusing. And so then we got this jobs report last Friday that not only showed a fairly weak 73,000 new jobs created in July, but there were huge downward revisions of job creation in May and June, basically to close to zero in each month. And so it was a huge change in what the data says. It basically says, you know, in the second quarter of the year, we had almost no job growth. And that makes a little bit more sense, you know, with tariffs weighing on businesses and making it difficult for them to expand and hire and with immigrant. With the immigration policies making it difficult for businesses to maintain their existing workforces. So now the data is a little bit more in line with what we would expect it to be. I note, you know, this doesn't show the economy going into recession. The bottom is not falling out of the labor market, but it does show that things are really slowing down. And similarly, we're seeing some upward pressure in the inflation data, which, again, is what you might expect when you impose a bunch of these new taxes on all sorts of kinds of goods, which is what tariffs are. So there'd been this talk of, were the economists all wrong? Was the tariff policy actually a good thing or at least an unimportant thing? Jason Furman, who was a top economic advisor in the Obama administration, had a piece in the Wall Street Journal shortly before this jobs report came out saying, well, actually, the job growth has weakened somewhat and price levels have gone up somewhat. We've missed growth forecasts a little bit. So again, it's not a recession, but it shows, you know, we're doing worse than we might otherwise have been. And then this data just added onto that to show, again, that, you know, things are. Are weakening even if they're not falling apart.

[Tim Miller]

Yeah, tough break for Bill Maher. You know, comes Back from vacation. The first episode is a big thing about how we were wrong about the tariffs. Now the tariffs seem to be, everything seems to be going good. It's a, it's a cautionary tale for those of us that are not really econ people, that are kind of freelancing from time to time. So taking that cautionary tale into perspective though, you know, you have more expertise than I do and went to Harvard. What's your crystal ball on this? I mean, where are the trends taking us across any of those elements?

[Josh Barrow]

It's looking like what the economists said the tariffs would be, which is their drag on the economy. But actually back in April, some of the voices that were being a little more sanguine about this and were reluctant to say the word recession were some of the economists analyzing this basically saying the tariffs are bad and are going to cause a drag on the economy. But most of the economy is services rather than goods. And so you can really screw up fashion and certain other industries that are extremely exposed to international trade, but they're small slices of the economy and it doesn't really matter that much for if you're Microsoft or Meta or something like that. It doesn't matter if you're one of these AI focused tech companies. It doesn't matter if you're in healthcare.

[Tim Miller]

Doing big data centers, doing financial services.

[Josh Barrow]

And so Jason Furman's line actually with this is tariff derangement syndrome, which is that economists hate tariffs and they have good reasons for hating tariffs, but they sell sometimes. Forget that they don't drive the whole economy and you can have a really dumb policy that hits only a slice of the economy and that's not important enough to push you into recession, even though it's hurting you. The irony of this though is that if you're an investor in the US and you don't know where you can put a factory because you don't know what the tariff policy is going to be like in a year. What it pushes you toward is investments in non trade affected industries. So basically the whole idea with Trump is that we want tariffs to re industrialize the United States and to get people to build factories. And in fact what it ends up doing is saying, well, God, I can't get into manufacturing, I better put my money into financial services or into health care or one of these service sectors that they're in theory trying to steer us away from. So the policy is not doing what it's supposed to do, but it's also not leaving investors without options in other areas.

[Tim Miller]

Yeah, it's interesting you point that because we're already seeing some of that. Right. Like manufacturing numbers are down. One of the other affected areas obviously is like cost of building and goods. Right. Whether it be, you know, a steel, et cetera. Curious. Just if you have any more kind of on the manufacturing and kind of housing costs side of things. But it also, to me, ties to the immigration impact which you mentioned. I think it was in your substack you wrote that, like, you know, on the one hand, having fewer immigrants means, like fewer jobs are going to be needed to keep like the unemployment rate low. Right. Because immigrants aren't taking any jobs.

[Josh Barrow]

Right.

[Tim Miller]

On the other hand, there are like other unintended consequences. Right. Like a potentially weaker growth for the economy, inflation, maybe not broad, but again, costs, if your cost of goods for building whatever it is, like a house or factory or business are higher or a machine in your business, because our goods are higher, because steel is being tariffed. And if you had immigrant labor and you're unable to hire them or have to pay, you're right. If the costs are going up across the board, that also I think could have some impact.

[Josh Barrow]

Yeah, sure. So because of the absolute cratering of immigration to the United States under Donald Trump, the number of jobs that need to be created each month in order to keep the unemployment rate stable has fallen by about half. You only have to create about 80,000 jobs a month to keep pace with the growing population and avoid a rise in unemployment. So I think, first of all, it's important to keep in mind in terms of how are voters likely to feel about the job market. You know, a lot of the jobs that were being created in the Biden administration were going to the very quickly increasing number of non citizens living in the United States who don't vote. And so, you know, you needed a pretty robust job growth number in order to keep people happy with the labor market. And I know, you know, unemployment was low then, it remains low now. So it's not like we were having a bad job market. But to some extent, the, you know, the hitting 200,000 jobs created every month, it wasn't as impressive as it might sound because a lot of those jobs were going to the very prodigious number of immigrants entering the country. Country. The flip side here is you don't need to create that many jobs to keep the job market healthy for people who are looking for work. So I think that's, you know, if the president is mad about what these reports say, one thing that he should keep in Mind is that he doesn't need to hit as high a number as Joe Biden was hitting.

[Tim Miller]

But to your point there, he likes big number though. Big number good for Donald Trump. So that's tough for to get into his head.

[Josh Barrow]

If he let in millions of immigrants, he could get a really big job growth number. You know, the life is trade offs, right?

[Tim Miller]

Yeah, I know. Big boy doesn't like trade offs. Big boy like big numbers. So I think that's all it is.

[Josh Barrow]

But the flip side, as you note there, is that, you know, these immigrants who have been working in the United States, you know, some with authorization and some without authorization, they play a real role in the economy and it's noticeable when they go away. And it's much more noticeable in some industries than others. If you run a bank, you know, ICE raids don't really matter directly for your business. But if you are in construction or agriculture or certain industries, you're very exposed to this. And you get a combination of higher cost and lower capacity in these industries. And we've got several things particularly hitting construction at once. You have these labor effects. You also have materials costs that are being driven up by those tariff policies. And we have these persistently elevated interest rates, at least elevated compared to where they've generally been over the last 15 years. The president would really like lower interest rates, but the problem is that the Fed can't really give him lower long term interest rates. They can cut short term interest rates, but long term interest rates are driven by the financial markets. And there are all sorts of factors that drive them, including the federal budget deficit. The government is going out and borrowing tremendous amounts of money. Republicans have passed this budget bill that causes it to need to borrow way more money and that drives up interest rates because the government is competing with companies and individuals who are also trying to borrow money. The more people who are trying to obtain something in the market, the more expensive it gets. In this case, the thing that's getting more expensive is capital. And so that's another thing that makes it difficult to go out and build homes, build factories. So those are all a drag on investment in the economy. But again, I would say a drag that means we're getting less growth than we otherwise would have. Not, not yet at a point where it's actually causing growth to be negative.

[Tim Miller]

Yeah, I do wonder impact on how people are experiencing the economy though, because I just listened to you talk about that. It's like you get into kind of a nerdy econ debate about what is inflation. If prices are Just going up because of tariffs. That's not really the same as inflation. That's driven by monetary supply, et cetera. But a regular person that's just living their life doesn't really care about that debate that much. And looking at the industries you're talking about, agriculture, housing. Right. Like, it's all the stuff that people are stressed about already is the stuff that has upward pressure on it with the combination of the tariff and immigration issues.

[Josh Barrow]

I mean, as a political matter, I would say that the key countervailing factor there is that gasoline prices are down. And that's in significant part due to policy choices that the administration has made. And, you know, they successfully leaned on the Saudis to open up the taps. The funny thing about that is that they really think they're going to drive a boom in domestic oil production. And the low price of oil is making it, along with those high interest rates is making it difficult to invest in new oil and gas production in the US So they're not producing what they thought they would there. But gasoline prices have moderated. And so I think for some reason.

[Tim Miller]

Except in California, I was looking at that, I was like, in Los Angeles, like, what the hell's going on? The gas prices are still five bucks in la. Five, six bucks.

[Josh Barrow]

California has the. There's some special formulation requirements for the gasoline in California, which means then it ends up having to come out of only certain refineries. So there's almost like a separate gasoline market it for California and for the rest of the country. But here, where I am in New.

[Tim Miller]

York, sucks to be you. Kind of. I landed in California, not you personally. So you Californians, I was like, what is that?

[Josh Barrow]

There's also. There's like one particular gas station at the corner of La Cienega and Holloway in West Hollywood. That's always a buck 50 more than all the other gas stations. So I don't know where you're hanging out.

[Tim Miller]

So that's what, that's what the Today show uses. Gas prices go up.

[Josh Barrow]

Yeah, but so, you know, I think as a political matter, I think there are definitely goods that are getting more expensive because of the tariffs. I think to a significant extent, the fact that gasoline prices have moderated is reducing the level of rage that there otherwise might be about that. The debate about how you should think about tariffs as a component of inflation isn't that price increases don't count. If they're driven by tariffs, they do. The questions are, one, is that going to drive persistently higher inflation or is it a one time increase in the price level. Because if it's just a one time increase in the price level, then the Fed doesn't necessarily need to keep rates high because they're concerned about what prices are going to do in the future. And so if it's prices just went up one time, this is the argument that members of the Federal Reserve Board are having. They're saying, well, this is a one time temporary effect and it shouldn't stop us from cutting rates to support the weakening labor market. The other thing is that again, most of the economy is services rather than goods. And tariffs, they do raise the prices of specific goods, but they're also a tax increase. And generally tax increases are disinflationary. They take money out of people's pockets and cause them to be unable to spend as much money as they otherwise would. And that actually creates negative pressure on prices. And so in theory, tariffs should cause the price of the specifically tariff goods to go up, but the price of everything else to go down by a little bit. Now, again, it goes down by a little bit because people are poorer and they can't afford to buy as much stuff. So it's not a great talking point for the administration, but that is what monetary policy officials are thinking about. It's basically the President is taking a little bit of gas out of the economy by imposing these tariffs. And that actually should make a lot of stuff in the economy very slightly cheaper. And so that's another reason to. Because the Fed is probably gonna cut rates in September. The President wants rate cuts. It's not crazy, the idea that you would cut rates by a certain amount, especially given the weakness that we're seeing in the labor market in this jobs report.

[Tim Miller]

It's like, congrats, Mr. Trump, the economy's so bad you're gonna get the rate cut you want.

[Josh Barrow]

Well, exactly. I mean, there's two Trump appointees on the Federal Reserve Board, Michele Bowman and Christopher Waller, who wanted a rate cut in July. And they both issued statements explaining why they wanted a rate cut. And they're both very concerned that the bottom is about to fall out of the labor market. And so they're saying we need to cut rates because the economy might be about to do a lot worse than it's doing right now, which is not the way the administration want to characterize it. But that is sort of the good argument there about why you would cut rates. You say, well, the stuff that's driving the recent somewhat elevated inflation is temporary. And there's these concerning signs we're getting from the labor market. We don't want interest rates that are inappropriately high, causing businesses to cut jobs more than they otherwise would. That's, you know, that's the actually good argument for the policy the president is out there arguing for. His weird argument is the economy's great. So great, so great. For some reason we need rate cuts anyway.

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[Tim Miller]

A little more Fed stuff so we had Adriana Kugler. She resigned. She's one of the seven board governors. Some discussion that this is an early resignation. It means Trump could pick somebody then to signal who would replace Powell next year if he was to wait rather than firing Powell early as he's teased Several times. I enjoyed this little bit from Politico Morning Money this morning. I wanted to read to you if the President wants to make an out of left field selection. James Fischbach, CEO of investment firm Azoria is mounting an insurgent campaign. He spoke to Trump about the nomination and the President has no shortage of highly qualified candidates. Fishback told Politico Fischback is backed by some vocal MAGA accounts like Benny Johnson. It's like a deadpan sentence in the medical political money this morning. It's like you might have to consider this insurgent candidates that you've never heard of because Benny Johnson is for it.

[Josh Barrow]

Yeah, I mean I don't know what the president.

[Tim Miller]

Have you ever seen Benny Johnson on a cruise or have you guys ever discussed any.

[Josh Barrow]

I've never met Benny Johnson.

[Tim Miller]

Any economic matter. You never met him?

[Josh Barrow]

I don't know him personally.

[Tim Miller]

No. I thought you might have encountered each other along the way.

[Josh Barrow]

So I mean there's seven seats on the Federal Reserve Board. The chair needs to be one of the seven members. Coogler's term was up a few months from now. So this is an early resignation, but it's not a super early resignation. This gives Trump a seat that he can fill. The thought is basically he'll put someone in this seat and that's the person that he will want to name as chair a few months from now when Jay Powell's term as chair is up. Because the thing is, Jay Powell will cease being chair in a few months, but he remains a member of the Federal reserve board until 2028 if he wants to be. And there's been some discussion often the Fed chair resigns when the chairmanship ends, but Powell hasn't committed to doing that. And so if Powell didn't leave the board, then there would be no seat for the President to put someone in to possibly be chair. But now this Kugler seat is available and he can put someone in that seat. He could pick someone really out of left field. I would note though that the President has complained a lot about the Fed. He's complained a lot about Jay Powell. He's talked about the idea that you maybe he has the power to fire Jay Powell if he wants to, but he hasn't. And he's really shied away from doing that at a time when he's been happy to fire members of other multi member boards and commissions in the federal government. This has been a whole legal controversy before the Supreme Court, National Labor Relations Board, the Consumer Product Safety Commission. The President has been firing Democratic appointees from a lot of these boards. He's chosen not to do that at the Fed. And I think the reason he's chosen not to do it is I think that someone, probably Scott Besant, has convinced him that it won't actually produce the results that he wants. Because again, the Fed doesn't control long term interest rates, it only controls short term interest rates. And furthermore, rates are controlled by the Federal Open Market Committee, which is the seven members of the Federal Reserve Board and five presidents of regional Federal Reserve banks. So even if you impose some lackey of yours as the Fed chair, that person can't set rates by himself or herself. They have to get consensus from this very establishment oriented set of people who are not going to be inclined to go along with that. In some sense, the best thing for the President politically is to complain a lot about the Fed and say it's Jay Powell's fault that interest rates are high and not fire him, because if you fired him, then you would show that long rates didn't actually fall after you fired him, and it would be your fault instead of Jay Powell's fault. So that leads me to suspect that the President will not do something as out of the box as people are expecting here.

[Tim Miller]

There's a obvious hybrid solution, which is Kevin Hassett, who's become a total hack, but has been around long enough that may, you know, it doesn't seem like as outlandish of a pick, even though.

[Josh Barrow]

Kevin Hassett's gonna need to run the Bureau of Labor Statistics, probably. So I don't know if how many.

[Tim Miller]

Hazards Marco Rubio is gonna do that.

[Josh Barrow]

But, you know, I mean, Christopher Waller, who's a member of the Federal Reserve Board, like that would be sort of the most in the box pick the President could make. There's been some talk that he might do that. I think it's likelier that he'll pick someone like Hassett or maybe Kevin Warsh, who's an ex Fed official who has become closer in with the President's team over the years. But the thing is, for Trump's interests, if he hopes to shade monetary policy in a slightly looser direction, there's value for him in having someone who might actually have credibility with the other voting members of the Federal Open Market Committee. And so you have Christopher Waller right now on the Fed board making plausible arguments about why the Fed should cut interest rates and who has the respect of the other policymakers there. I think that would be the smarter choice for him to make. And it's in a weird way parallel to the choice that he had to make eight years ago when he put Jay Powell in his chair in the first place, because Jay Powell was originally an Obama appointee to the Federal Reserve Board, even though Powell is a Republican and there were other more ideologically Republican choices that he had available to him. But the problem is that typical Republican orthodox policymakers for the Fed are gonna have a more tight money perspective. They are very concerned about inflation and they don't want to hand out a lot of loose money. And so to pick who was basically in the same vein of thinking as Janet Yellen and Ben Bernanke got President Trump a looser monetary policy than he probably would have gotten otherwise. That's the challenge for him there is that to pick a typical partisan Republican wouldn't get him the result that he wants, and to pick a total hack won't get him the credibility with the other voting members of the committee that he wants. If I were him, I would pick Waller, but I'm not sure that he's that wise right now. I think it's probably not going to be whoever Benny Johnson.

[Tim Miller]

Okay, sorry Benny.

[Zerlina Maxwell]

You're great at protecting your own personal information. You probably even use things like two factor authentication, strong passwords and a vpn. But as much as you try to be in control of how your information is protected, there are lots of places that also have it and they might not be as careful as you are. That's why LifeLock monitors millions of data points every second for identity threats. If your identity is stolen, a LifeLock US based restoration specialist will help solve identity theft issues on your behalf, guaranteed or your money back. Plus, all LifeLock plans are backed by the million dollar protection package, meaning LifeLock will reimburse you up to the limits of your plan if you lose money due to identity theft. You might not be able to control how others handle your personal information, but you can help protect it with Lifelock. Save up to 40% your first year. Call 1-800-LIFELOCK and use promo code iheart or go to lifelock.com iheart for 40% off terms apply.

[Annabe]

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[Tim Miller]

One of the things you and I were aligned on, just from an argumentation, and I think we both believe this before the election was just like no matter what you think about some of the particular issues between Trump and Harris or Trump Biden going back to 2020, like the tail risk of Trump was just too great. Like you just like there's just this, this potential that he does something really fucking crazy and disastrous is just not worth it. Let's just do a little tail risk talk in this context. And we have this, the firing of the Commissioner of Labor Statistics. Now, like you said, he hasn't done anything crazy with Powell yet. Maybe he's being savvy about this, but who knows, maybe makes up in a bad mood one day. Like, what do you think the extent of the tail risk is just like institutionally about the U.S. you know, and kind of our credibility in the global financial system right now?

[Josh Barrow]

Yeah, well, I mean, I guess to start with the Bureau of Labor Statistics itself, I mean, you know, the, we have this long tradition of these nonpartisan data collecting agencies. They have a very difficult job to do when we get the jobs numbers and they, they come out, say this is what the job growth was last month. And then they revise it because more data comes in. These are based on just really big polls. Basically they call up individuals for the household survey to calculate the unemployment rate and then they call up businesses for the establishment survey. And say, how many people do you employ? How many people did you hire? How many people did you fire this month?

[Tim Miller]

Every once in a while you're going to get an Ann Seltzer as a result.

[Josh Barrow]

Yeah. And it's the same problems that you have with political polling, which is that response rates are declining. It's getting more difficult to collect the data that you used to collect in the past. And some of it, more of it gets collected in arrears. And so there has been, you know, there have been larger revisions in recent years in significant part because of the, you know, the increasing inherent difficulty of collecting data like this. And then the administration has Also been seeking to do big budget cuts at these data agencies, making their jobs even harder. And this stuff is a real public good. It's important for the financial markets to know what the economy is doing. It helps, you know, investors make decisions about, you know, what to invest in and where to put their money. And it gives us a fundamentally more efficient economy economy. It's an important thing for the government to do that produces a lot more value than what it costs to do. And so it's not good for them to interfere with that. Now, in terms of how this is actually going to affect what the Bureau of Labor Statistics is doing, I think that remains to be seen. I mean, first of all, we have to see who he puts in as a replacement. I think it's challenging to come up with a strategy to cook the books at the Bureau of Labor Statistics. I mean, if you're China, you could just make up whatever number you want and put it in a press release. The press corps in Washington will learn very quickly if that's what's happening. You're going to have a lot of disgruntled people who are going to talk to the press about what's being done differently at these data agencies. There's also a sort of more technical thing, which is that I can come up with ways to change how you do these reports that would change the level of employment that they find. But what the President's really after is not the level, it's the change from month to month. So it's not only that you'd need to find a way to adjust the survey to say that more people have jobs. You'd have to, every month, month, step that up and say, oh, we created more jobs this month. The survey has to get rosier and rosier month by month. You have to keep changing the methodology.

[Tim Miller]

So that's a question of finding like a Rasmussen to do the polling for you, right?

[Josh Barrow]

Exactly. Yeah. So I think it's hard to cook the books in the way they want. And then it would be hard to convince people that what the books say is real, because there's a lot of money to be made being right about this data market participants out there, if they can figure out better than the government what the economy is actually doing, they're going to go make money making smarter investments. And so you already have private data that is collected that people use along with the government data. I mean, for example, there's a payroll survey that comes from Automatic Data Processing, one of the largest payroll processing companies in the country. The Data is not as good as the government data, but it comes out earlier and it's something that the markets look at. And so if this data is becoming less reliable and starting to skew in a particular direction, one thing people will see is, well, the ADP survey is still there and there will be efforts to develop other alternative data collection measures that again, there's a lot of money to be made on Wall street being right about stuff. So there's, you know, that that information will tend to find its way out because the, you know, the government can lie about crime statistics, for example. And there's no, you know, private crime data collection thing where someone goes out and makes a lot of money by being right about how much crime there is.

[Tim Miller]

Arnold Foundation's working on this. I forget what it's called, but I'll send it to you.

[Josh Barrow]

But yeah, but here, you know, it's not just like political signaling how people look at this data. There's a lot of money to be made by being right about it. And so that's going to limit the President's ability to fool people.

[Tim Miller]

So you're less concerned about the tale in this area of Argentina, hyperinflation. People start to stop believing the information the government's putting out and we get into a death spiral.

[Josh Barrow]

Well, I mean, the thing about Argentina style hyperinflation is that countries get into that mess because they have big government welfare and subsidy programs that they cannot finance by going out and borrowing in the markets. So they print money and people hate inflation, but they do, they don't maybe hate it as much as they would hate the really draconian spending cuts they would have to do otherwise. That's how you get into that cycle here in the US the government can borrow that money. And so if you do policies that create a lot of inflation, you just make people really angry. I mean, we saw that in the Biden administration. And so that I think is part of why we haven't seen the President do the most damaging, stupid things he could possibly do at the Fed. Because a lot of those things that he could do would cause a lot of inflation, would make him very unpopular. The reason you have central bank independence is trying to protect us against making decisions for short term gain that cause long term problems. But a lot of the things the President could do with the Fed would just cause a lot of short term problems. And so that I think is the main bulwark, if I may so to speak, that's protecting us against the worst things that the President might do at the Fed. So I don't think he's likely to push us in a hyperinflationary direction. But the thing is that if the government data gets less accurate, there will be these efforts to privately replicate the data and correct it, but they won't be as good as a BLS that does a really good job in the first place. And that's sort of like the tariffs. It's going to be a mild long run drag on growth, but again, it's the sort of thing that's probably small enough that you're not going to be able to pinpoint it and say this pushed the economy into a recession.

[Tim Miller]

Do you have a theory of the case on why the market's so good? I'm not complaining. Things are looking good in my Schwab account, but it doesn't really make sense to me.

[Josh Barrow]

I'm a little baffled by it. One thing is that there's really, really a lot of enthusiasm about AI and I'm not an expert on bubble like enthusiasm. Maybe, maybe, but maybe not. I don't, you know, the I, I, I try not to assume that I'm smarter than the market because if I was smarter than the market, I would be on my yacht instead of your podcast.

[Tim Miller]

Well, you might be on my podcast on your yacht because you do like to hear yourself talk.

[Josh Barrow]

Yes, that's true.

[Tim Miller]

Same, by the way, not an attack.

[Josh Barrow]

But so I mean, and that's part of it that there's this idea that whatever else is going wrong, the AI advancements are so improving the future profit prospects of corporations that that outweighs it. I think there's also something psychological where the president announces something damaging and the market swoons and then he withdraws the damaging announcement and the market bounces back up. People lose a lot of money by betting against the market. When Trump says he's going to do something to destroy the economy and then changes his mind. And so I think that has taken some of the willingness of market participants to go out there and bet that this stuff is going to really be bad. I think it's made them a little more reticent around that. So that's another component. And then I think the third possibility is that some of the deregulatory stuff that this administration is doing, including around energy production, probably does have a positive sign on gdp. And so that is to some extent countervailing the negative sign that comes from the tariffs and other policy mistakes that they're making. So I think it's that combination. Combination. Then again, just reminding myself that even though the tariffs are a damaging, stupid policy, most of the economy services. And so you can do things that are a real problem for a certain set of sectors without causing the economy overall to go into a recession, without causing the stock market to decline.

[Tim Miller]

Do you have a barrow recession percentage.

[Josh Barrow]

Over what period in the next year?

[Tim Miller]

Yeah, sure.

[Josh Barrow]

I don't know, 25, 30%.

[Tim Miller]

25, 30%. Okay. So are you below Goldman? I forget where Goldman was. Or have they moved down or have they readjusted?

[Josh Barrow]

I forget where they are.

[Tim Miller]

I don't know for a minute there, they're like 45 or 50. But it might have come. I think that might have been around.

[Josh Barrow]

That was in April, right?

[Tim Miller]

Yeah, that was in April. I assume it's come back down.

[Josh Barrow]

You know, the tariffs that he's put on the EU and then there's weird stuff like Switzerland we've put a really high tariff on, which matters for certain specific goods, like, you know, ski lift equipment, for example. The deals that he struck with the EU and with so far with Canada and Mexico are at a level where they're not going to completely obliterate trade with those places. And the China tariffs he proposed that really were going to be effectively an embargo if there was 145% tariffs on China, that really important part of his trade policy does appear to have durably backed off from. And so that means that a recession is significantly less likely than it looked in April when it looked like the tariffs were going to be a lot better.

[Tim Miller]

Speaking of percentages, we have one other piece of countervailing good news, which is the decrease in prescription drug costs. I would like to listen to the President talk about that a little bit, and I think we're going to be very successful. Fairly soon, we'll have drug prices coming down by 500, 600, 800, even 1200%. You're a math man. Do you have any thoughts on that? On that?

[Josh Barrow]

Well, as I understand it, that means they're going to pay you to take.

[Tim Miller]

The drugs, which I would be into.

[Josh Barrow]

If the price used to be $100, now it's negative $600. And so you take the drugs and you get cash along with that. Sounds pretty inflationary, frankly.

[Tim Miller]

A little inflationary, but also, I mean, good for all the people that are on Ozempic, I think about that.

[Josh Barrow]

Yeah, they're going to be thin and rich.

[Tim Miller]

Thin and rich in Trump's dreams. All right, final topic. How are you feeling about all the straights and the mustaches now? Are you thinking that you have to change your look. Because I was at a concert that was frequented by 20 something straight traits, and it was like, they all have mustaches now, so they're coming for you. Like they're coming for your look. And I think maybe it's time for the gays to consider a different. Maybe goatees come back or big, long sideburns or something.

[Josh Barrow]

Oh, God. Well, so, I mean, I think the first important thing to remember is that we stole this from straight people before they stole it from us. Like, this was like they steal it.

[Tim Miller]

From us before we sold it and then we stole it from them. Who was, who is first? Burt Reynolds.

[Josh Barrow]

Who did Burt Reynolds get it from?

[Tim Miller]

Yeah, I guess Burt was first and then the gays and then Freddie Mercury. Burt was before Freddie.

[Josh Barrow]

Like this was, you know, the, the, the, you know, with the whole like 70s Leatherman type. Like, this was supposed to be like a performance of hyper masculinity.

[Tim Miller]

Okay. Yeah, that's right.

[Josh Barrow]

And so in some sense that's supposed to come from, like, you know, ideas of what a straight man is like, even though a straight man wouldn't wear head to toe leather, probably. But so like the, the, the mustache originally came from the idea that this was like, that this was a hyper masculine thing. And then we took it from Burt Reynolds and from the straight people, and now they're coming and they're reclaiming it.

[Tim Miller]

Okay.

[Josh Barrow]

And so, you know, it's like I need a land acknowledgement for my face or something like that. You know, the straight people were here first.

[Tim Miller]

A Burt Reynolds land acknowledgement.

[Josh Barrow]

Yes.

[Tim Miller]

Thank you to Burt Reynolds.

[Josh Barrow]

Thank you, Burt Reynolds.

[Tim Miller]

Every time you walk into the club.

[Josh Barrow]

Yeah. But I also feel like, you know, like, even though mustaches were originally straight, I feel like they are now, now permanently gay. Even if straight people are doing them. I think partly they envy us and they see us having fun and they would like to be like us. And so that's completely understandable to me. But I'm not giving up the mustache.

[Tim Miller]

It's a great place to leave it. Macho man Josh Barrow. Thank you for educating us as always. We'll be talking to you soon.

[Josh Barrow]

Yeah, talk to you soon. Thanks.

[Tim Miller]

All right. Thanks so much to Zerlina Maxwell and the mustachioed Josh Barrow, I should say. My husband wanted a mustache a while ago, ago. And I told him it would be like, I don't know if I can. Can I say this? It would be like putting something very disgusting on his face. I guess I'm not going to really gross you all out on the outro today. So let's just say no mustaches in our household. But we we appreciate Josh's insights as well as our Lena's. We'll be back tomorrow with another edition of the Bulwark Podcast. See y' all then.

[Josh Barrow]

Gets a lot of things.

[Tim Miller]

She gets a 20 caring.

[Josh Barrow]

She gets the alimony too. She gets to look good in the.

[Tim Miller]

New upstairs between the nose and up.

[Josh Barrow]

I try to handle by design. My Fanchu is real fine. My run of Coleman made him link my poncho Vietnam thing, but when I.

[Tim Miller]

Trimmed it real swan my Jewish friends would never call. Make the Board podcast is produced by Katie Cooper with audio engineering and editing by Jason Brown.

[Zerlina Maxwell]

You're great at protecting your own personal information. You probably even use things like two factor authentication, strong passwords, and a vpn. But as much as you try to be in control of how your information is protected, there are lots of places that also have it and they might not be as careful as you are. That's why LifeLock monitors millions of data points every second for identity threats. If your identity is stolen, a LifeLock US based restoration specialist will help solve identity theft issues on your behalf, guaranteed or your money back. Plus, all LifeLock plans are backed by the million dollar protection package. Package meaning LifeLock will reimburse you up to the limits of your plan if you lose money due to identity theft. You might not be able to control how others handle your personal information, but you can help protect it with LifeLock. Save up to 40% your first year. Call 1-800-LIFELock and use promo code iHEART or go to lifelock.com iheart for 40%.

[Annabe]

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