The Tudor Dixon Podcast: The Fed's Influence on the Economy with Todd Sheets

Summary

Summary of "The Tudor Dixon Podcast: The Fed's Influence on the Economy with Todd Sheets"

Release Date: August 8, 2025

In this insightful episode of The Tudor Dixon Podcast, host Tudor Dixon engages in a comprehensive discussion with economist and author Todd Sheets. The conversation delves deep into the Federal Reserve's influence on the U.S. economy, the ongoing housing crisis, government policies, deficit spending, and the burgeoning role of Artificial Intelligence (AI) in shaping future economic landscapes. The episode provides a nuanced analysis of past economic policies and offers perspectives on navigating current and future economic challenges.

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I. The Federal Reserve's Role in the Economy

Tudor Dixon initiates the conversation by addressing the Federal Reserve's (Fed) control over short-term interest rates and their profound impact on the economy.

Quote:

"The Federal Reserve controls short term interest rates, which gives them unprecedented and extraordinary ability to influence the economy."
— Todd Sheets [02:27]

Sheets elucidates how the Fed’s manipulation of interest rates affects various economic sectors, from Wall Street stock prices to housing markets across the nation. He emphasizes the Fed's role in a "credit-driven economy," highlighting its power to influence borrowing costs and, consequently, economic activity.

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II. Historical Perspective on Interest Rates and Economic Crises

Sheets provides a historical overview of the Fed's policies since the 1990s, linking them to significant economic events.

Quote:

"Starting in the 1990s, we had the Federal Reserve stepping in to push down interest rates... We've become addicted to the idea that the Fed could step in, push interest rates down really low, and that could help us glide through any periods of economic transitions or problems."
— Todd Sheets [02:27]

He connects the Fed's low-interest rate policies to events such as the Mexican debt crisis, Long-Term Capital Management (stemming from the Russian debt crisis), and the tech stock bubble of the late 1990s. Sheets argues that these interventions fostered an overreliance on the Fed's ability to stabilize the economy, inadvertently contributing to the housing bubble that precipitated the 2008 financial crisis.

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III. The Housing Crisis and Government Policies

The discussion shifts to the current housing crisis, exploring its roots and potential solutions.

Quote:

"The Fed went right back to the same playbook that had been running, which played a huge role in the tech stock bubble, was one of the two major causes of the housing bubble."
— Todd Sheets [02:27]

Sheets attributes the housing crisis to government housing policies enacted through Fannie Mae and Freddie Mac. He critiques their expansion in the late 1990s, which significantly inflated housing prices. Sheets advocates for the privatization of these entities and the removal of their government privileges to mitigate housing affordability issues.

Quote:

"One is a very tough way, which is housing prices collapse again and come back down... Another way is prices stay constant while hopefully we can get the economy growing again."
— Todd Sheets [08:27]

He presents two potential pathways to resolve the housing affordability problem: a significant drop in housing prices or stabilizing prices coupled with economic growth and rising incomes.

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IV. Infrastructure Investment and Deficit Spending

Tudor Dixon raises concerns about the effectiveness of government-led infrastructure investments and deficit spending.

Quote:

"The government is not a good allocator of resources. The private sector is a phenomenal allocator of resources."
— Todd Sheets [17:07]

Sheets critiques Keynesian economic principles, citing multiple instances where deficit spending failed to stimulate sustainable growth. He references historical examples, including the Great Depression, the 1960s Great Society programs, the Obama administration's response to the 2008 crisis, and the current Biden administration's policies. Sheets argues that persistent deficit spending leads to stagnant growth and escalating national debt without delivering the promised economic benefits.

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V. The AI Revolution and Economic Growth

The conversation transitions to the transformative potential of AI, likening it to the Industrial Revolution.

Quote:

"AI has the potential to be the next version of the Industrial Revolution."
— Todd Sheets [23:35]

Sheets draws parallels between AI and the Industrial Revolution, emphasizing AI's capacity to drive unprecedented economic and social changes. He highlights the importance of private sector leadership in AI development, stressing that government intervention should minimize rather than hinder innovation.

Quote:

"If we're leading that efficiency curve, then that will make us more competitive with low wage labor markets like China or Vietnam."
— Todd Sheets [29:21]

He posits that AI can enhance worker productivity, leading to higher wages and increased competitiveness against international low-wage markets. Sheets remains optimistic about AI's role in job creation and economic expansion, provided the U.S. maintains its leadership in technology and energy sectors.

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VI. Energy Policy and the AI Race

Energy availability and policy emerge as critical factors influencing AI development and economic growth.

Quote:

"We're going to ensure that energy is here to stay."
— Todd Sheets [34:17]

Sheets underscores the necessity of a stable and robust energy infrastructure to support the AI boom. He criticizes the Biden administration's approach to energy transition, arguing that unreliable energy sources could hamper AI advancements and economic growth. Sheets advocates for continued investment in traditional energy sources to maintain the necessary energy supply for AI technologies.

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VII. Conclusion and Final Thoughts

In wrapping up, Sheets reiterates his confidence in AI's potential to drive economic growth and solve longstanding issues, provided that government policies support rather than obstruct technological advancements.

Quote:

"The best thing for us to do is to kind of follow the model of the Industrial Revolution, which is to let this development and expansion have."
— Todd Sheets [30:11]

He emphasizes the importance of allowing the private sector to lead in AI and energy development, ensuring that the U.S. remains at the forefront of technological innovation and economic prosperity.

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Notable Quotes with Timestamps

1. Todd Sheets [02:27]: "The Federal Reserve controls short term interest rates, which gives them unprecedented and extraordinary ability to influence the economy."

2. Todd Sheets [08:27]: "One is a very tough way, which is housing prices collapse again and come back down... Another way is prices stay constant while hopefully we can get the economy growing again."

3. Todd Sheets [17:07]: "The government is not a good allocator of resources. The private sector is a phenomenal allocator of resources."

4. Todd Sheets [23:35]: "AI has the potential to be the next version of the Industrial Revolution."

5. Todd Sheets [29:21]: "If we're leading that efficiency curve, then that will make us more competitive with low wage labor markets like China or Vietnam."

6. Todd Sheets [34:17]: "We're going to ensure that energy is here to stay."

7. Todd Sheets [30:11]: "The best thing for us to do is to kind of follow the model of the Industrial Revolution, which is to let this development and expansion have."

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Final Thoughts

This episode of The Tudor Dixon Podcast offers a critical examination of the Federal Reserve's longstanding policies and their ramifications on the housing market and overall economic health. Todd Sheets provides a compelling argument for reducing government intervention in favor of private sector-driven growth, particularly in the realms of AI and energy. His insights underscore the delicate balance between governmental policy and market forces in fostering sustainable economic development. Listeners gain a deeper understanding of the complexities surrounding interest rates, housing affordability, deficit spending, and the transformative potential of AI, all through the lens of an experienced economist.

For those interested in exploring these topics further, Todd Sheets recommends his book, "2008: What Really Happened," and his newsletter, On Wealth and Progress, available on Substack.

Transcript

[Tudor Dixon]

This is an iHeart podcast.

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[Tudor Dixon]

Welcome to the Tudor Dixon Podcast. We have someone with us here today that can talk both AI and the Federal Reserve. And that's a hard one to choose right now because everything going on with the Fed, but also everything going on with AI. So we said we're going to start with the Fed and talk about what's going on there because I've got Todd Sheets with me. He is a successful he had a highly successful career in investment banking, but he also wrote the book what really happened in the 2008 crisis. So Todd, thank you so much for joining me today.

[Todd Sheets]

Tudor, thanks for having me. It's delightful to be with you.

[Tudor Dixon]

Absolutely. So we you talked about the housing crisis in 2008. You actually kind of put that back on the Fed. Now we're in this situation where we're not seeing interest rates come down. Can you, for the average American, can you kind of explain what exactly is going on, what you think should be happening?

[Todd Sheets]

Yeah, so the Federal Reserve controls short term interest rates, which gives them unprecedented and extraordinary ability to influence the economy. In a credit driven economy, you're basically controlling the cost of borrowing and finance, at least at the short term end of the spectrum, which basically allows them to influence, as I think a quote I had from the book was everything from stock prices on Wall street to housing prices in Honolulu, you know, everything across the board to auto finance in Alaska, even. So, one of the problems that we've had, and I point this out in the book, and it goes, it's much deeper and goes much longer than this. But Starting in the 1990s, we had the Federal Reserve stepping in to push down interest rates in a number of situations to try and keep globalization from having a negative, too, too negative of an impact in the economy. And as this happened, we started to become addicted to the idea that the Fed could step in, push interest rates down really low, and that that could help us kind of glide through any periods of economic transitions or problems we might be having. So this happened with the Mexican debt crisis. It happened again later in the 1990s with the long term capital management situation, which was effectively the Russian debt crisis. And so we've had a number of these situation contributed to the blow off of the tech stock bubble in the late 90s, which then when that collapsed in 2000, the Fed pushed interest rates down to historic lows, which unwittingly came in the midst of a boom in housing prices that had previously been kicked off by Fannie Mae and Freddie Mac. These are the things I go through in the book. So whatever benefit we might have received from that in the early 2000s was more than obliterated by the consequences of the housing bubble and the collapse that led us into the financial crisis and then the Great Recession. But unfortunately, these things have not been widely recognized. This is one of the important points of the book, or maybe the main point of the book. And so we've become reliant on this because we failed to understand where the real causes were. When we got into the 2010s under the Obama administration, the Fed went right back to the same playbook that had been running, which as I just pointed out, played a huge role in the tech stock bubble, was one of the two major causes of the housing bubble. And then in the 2010s they went back to these super low interest rates. They also started for the first time buying long term debt to try and influence long term interest rates. And these things really didn't kick off the wave of Growth that they had kind of promised or expected from it. You know, it just led us through another decade of stagnation. And one of the consequences this time we've got very high housing prices again, which is now creating an affordability problem. So I should stop here in a sec. I know I'm running on, but my perspective on this is a little different than the administration's on many things. I'm very aligned with the administration, but my perspective is we should not be pushing on the Fed to lower interest rates again because that's going back to a policy, you know, that has had, you know, severely underappreciated consequences multiple times starting in the 1990s and running up here recently. So I haven't been a big fan of Jerome Powell. In my opinion he should not have been decreasing interest rates last year during the election. But I think at this point in time, especially with inflation ticking up a little bit to 2.7% here recently, I think the most important thing is that, is that the Fed remains vigilant and doesn't fall back into this pattern that, that we've seen for almost 30 years now.

[Tudor Dixon]

Well, so what is the solution then? Because obviously we've seen that politicians across the country are talking housing crisis, housing crisis, housing crisis. And I keep hearing people on both sides say, well, we want the government to come in and build housing. That also sounds bad to me.

[Todd Sheets]

Yeah, I couldn't agree more. I mean, you know, we got into these problems because of government housing policies in the first place enacted through Fannie Mae and Freddie Mac. It was their dramatic increase in trying to push their mission of providing financing to low to moderate income home buyers, which kicked housing prices up beginning in 1998, well above historical norms. And that was, you know, the beginning or the liftoff phase. What I call in the book of the housing bubble. Everything coordinates just exactly to when they started increasing their mission. So I think the best thing we could be doing is we could be privatizing Fannie Mae and Freddie Mac, but also taking away the government privileges that they have, which I don't think is what's going to end up happening right now, but that's what I would advocate for. I think, unfortunately, when you go through the significant inflation in housing prices that came over the last four to five years and coincided with cheap money policies from the Fed and the Biden administration spending blowout, you know, that money has to go somewhere. And one of the places that it went was into housing prices, which then elevated them significantly and created this housing affordability problem. There's a couple ways to resolve this that don't involve the government. You know, one is a very tough way, which is housing prices collapse again and come back down. More to historical.

[Tudor Dixon]

So you're talking about like a 2008 all over again.

[Todd Sheets]

I don't think that's necessarily what's going to happen now. I mean, I felt very strongly that it would in 2008, in part because of the lending practices that were going on now. I think what's more likely is that we go through a long period of time where housing prices just don't appreciate at the kind of rates that people, you know, came to expect from housing where it was viewed as this.

[Tudor Dixon]

So then if you buy a house now, you probably in 10 years won't really make a profit on it.

[Todd Sheets]

You're thinking, I think there's a very high probability that that kind of thing will happen. So that's why I was going back. There's kind of two ways these things can get resolved when you get prices that are significantly out of whack with market based fundamentals. And market based fundamentals in housing have to do with two critical things. One, it's the cost of building a new home. And second, it's the incomes that people have, you know, to be able to take on a mortgage and afford home payments and that kind of thing. And when the Fed interjects and plays these monetary games to try and boost economic activity, you get these dislocations that happen and the dislocation we're seeing now, or one of them is these high housing prices which have created an affordability problem. And so one way that can get resolved is prices stay constant while hopefully we can get the economy growing again. And I think the administration through AI for example, is taking exactly the right approach in that area. And if we can get the economy growing and we get people's incomes growing and they start compounding upward and prices stay relatively flat. Let's say then the affordability problem gets taken care of through expanding incomes as opposed through collapsing housing prices, which would probably.

[Tudor Dixon]

We have it, we have this situation here in town or there's a local neighborhood and it was a, one of the high end builders had this neighborhood and they were building these high end kind of single family condos, like, like separated condos, self standing condos. And they were beautiful and they were very, they were, you know, great finishes on the inside, but expensive. I mean they were in the 6 to 700,000 range. And that, that builder I guess left the neighborhood the new Builder got a government grant, they came in and they started building also individual self standing condos. But they, and they're two stories because they have walkout basements. But the front of them is just a garage. No upstairs, no windows, no front door, nothing. So you have these beautiful like tiny homes that have front porches and doors. And then you have government housing that came in in the same neighbor, just a garage. I mean, and I look at this and I go, it's affordable. But the other people in the neighborhood are obviously irate. How did this happen? How did a government grant come in and suddenly our neighborhood is building these, these, it looks like storage units. They don't look like homes. I mean, is that the future? Is that what's going to happen? And if that's the case, what do local people get to say about their communities being changed in that way?

[Todd Sheets]

Well, you know, I think this is a point where, you know, things like zoning laws and that kind of thing are important. And it's also another point where the idea of, you know, government can help fix the problem by one, you know, helping make housing construction more affordable, maybe making permitting easier, you know, doing some of these kinds of things that, you know, fighting against the things that have caused so many problems out in California, which have also happened, maybe to a lesser extent in other markets. But there's still room for local zoning and efforts to make sure that what is getting built within a neighborhood or an area of town is consistent with what's already there so that you don't see property values dropping for reasons like that. But I think, unfortunately, when you go through a period where Fed policies and the Biden administration's policies where there was all of this deficit spending, which again was supposed to ignite growth, that money goes somewhere. And where one of the places it went was into housing and it pushed up housing prices significantly in a four or five year period of time on top of what already was bubbling under the surface because of the Fed's cheap money policies before that. And we just have to let those things unwind and hopefully it won't be through a housing price crash like we went through the last time when it unwound. And maybe it'll be through more stable prices for a longer period while we get the rest of the economy growing and people's incomes grow and they can get up to the point where they can afford these housing prices because their incomes grow so much over the next five to 10 years.

[Tudor Dixon]

Let's take a quick commercial break. We'll continue next on the Tudor Dixon Podcast.

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[Tudor Dixon]

So I want to just extend this discussion a little bit longer because you talked about infrastructure and the money that that the Biden administration was putting into housing. Well that was also supposedly going into Internet infrastructure and roads and bridges. And when you hear the Democrats talk about what's going what the future is, they talk a lot about we're investing in infrastructure, in roads, in railroads and that kind of thing. And, and the Republicans don't want to invest in that. When I hear that, well gosh, it sounds great. You know, high Speed Internet and you're going to have better bridges and you're going to have better roads. Now I will say in the state of Michigan, the high speed Internet was supposed to go into areas where they didn't have Internet at all or they were very, they were struggling to connect. And my neighborhood where I already had high spe Internet got a new form of high speed Internet rather than it going to the up or into areas of Detroit that needed it. So I, I think that it's a little bit of a mystery as to whether or not the money that they say is going into these things is going into the right places or if it's just like, hey, now we have this play money to, to put wherever and we're going to get the best contract that ultimately is kicking back into these campaigns because we've seen that too. So how do we know when they talk about investing in infrastructure that you don't end up with a bunch of storage unit looking houses and high speed Internet in a neighborhood that already has high speed Internet?

[Todd Sheets]

You know, these are great questions. Probably the best thing you can do is you focus on the deficit. And one of the things that has happened is that we have been living in this country for a long time and under an enormous level of miseducation about what really caused the Great Depression. And because of that, we came out of the Great Depression with these so called Keynesian ideas that deficit spending, which is presented as like as you're saying, as the idea that the government will invest in the country and get the economy growing again, the idea that it can help, you know, government spending, deficit spending can stimulate our way out of either a depressed economy like we had in the 30s, or a stagnant economy like we had in the 2000s coming out of the housing bubble collapse. Well, what we've seen now is the massive failure of that thinking. Three different times it failed during the Depression. It failed probably four different times, let's say failed during the Depression. It failed with LBJ during the 1960s, with the so called Great Society programs which led to big deficits. It led to the Federal Reserve monetizing those deficits which meant that they were buying a lot of the debt or pushing down interest rates to try and support the deficit spending that resulted from the Great Society programs that led us into the great inflation of the 1970s, which wasn't resolved until Ronald Reagan finally gave Paul Volcker the political support needed to push interest rates up to the high teens or almost 20% to try and get it under control. And then it happened again with Obama coming out of the great financial crisis where he had the idea that if we push deficit spending up and invest in infrastructure, that will recharge economic growth. And so the Obama administration, they pushed peacetime deficit spending up to an all time record 8.5% of GDP. For the first four years of the Obama administration. What did we get for it? We did not get economic growth. What we got was a near doubling of the level of federal debt. That's what pushed the federal debt up from just below 40% to about 75, 76%. So it didn't again reinvigorate growth. It just created dangerous debts. Biden came along, this is the fourth episode. Biden came along with the same kind of promise. You know, we're going to have the Green New Deal, invest in all these future technologies and this will create so many jobs and all these kinds of things. He spent additional money even though the COVID related downturn had ended the year before Obama, excuse me, before Biden came into the administration and took office, you know, they had a spending blowout that was supposed to rejuvenate the economy even further. None of it worked. For the last 25 years, we have barely grown at more than 2% a year. And so I think to come back to your question, it doesn't work. We've seen this time and again, the government is not a good allocator of resources. The private sector is a phenomenal allocator of resources. And when we get the government trying to allocate too much of the nation's resources, we end up in stagnant growth, rising high deficits and rising debts and that kind of thing.

[Tudor Dixon]

So I agree. I mean, I think that it sounds really good though when you're campaigning. It sounds delightful to say, I mean, look at New York, what we're seeing with Mamdani saying, you know what, we're going to have the government take care of this for you. When you hear that, oh, this is fantastic. We're paying these taxes anyway. The government's going to get our grocery prices down. The government's going to rejuvenate our neighborhoods. We're going to have better housing. It's a human right. All of these, all of this type of language sounds very good. And then the, I think the debt has become a situation where everybody goes, well, there's always debt, you know, so why do we care anymore?

[Todd Sheets]

Yeah, well, so what Heads, you're exactly right. What tends to happen in these situations is, you know, people start talking about, oh, the debt's a problem. Well, this might be when it's 60% of GDP and then it gets to 75% and people are saying, oh, the debt's a problem, but we don't have a collapse. And now it's at almost 100% and it starts to feel like, okay, well, this is like, you know, the little boy crying wolf or whatever. It's, you know, it's not a real problem out there. But these things are significant problems. They can show up in significant collapses. Like we saw with the housing bubble. We heard the same thing for a while with the housing bubble. Oh, this isn't a problem. Housing prices keep going up, you know, until they don't. But we. But it can also show up in other ways. And I do think the electorate has gotten that message this time, which it can show up in substandard rates of growth. You know, when the Reagan administration came in and tried to turn us back towards a free market kind of agenda, which they did in the early 1980s, we went through almost 20 years of accelerated growth again. But all of this started turning around. All of that started turning around in the early 2000s when Bush started pushing deficit spending up, and then Obama started pushing it up even faster and expanding the debt even faster. And so I think instead of a full blown collapse, what we've seen is just this stagnant level of growth, you know, 2% kind of growth instead of 3.5% and those kinds of things. And so it's showing up in that way. I think, I think that's at the core of the electorate frustration. You know, that opened them up to the, to Trump's message the first time and again this last time, I think, you know, I think they have, you know, seen it from that perspective.

[Tudor Dixon]

So looking at the President's policies, how do you see the economy growing out of that? And, and how does AI affect that?

[Todd Sheets]

Yeah, a perfect question. I mean, especially with what's happened here recently, I think AI has the potential to be the next version of the Industrial Revolution. And many of us have been miseducated about the Industrial Revolution. People talk about robber barons and the need of the progressives to step in and protect the little guy and all these things and nothing. It's not to say that some of that didn't happen or wasn't valid, at least in anecdotal cases, but from a big picture perspective, the Industrial Revolution took us through the most extraordinary economic changes and transformation in the history of the world. I mean, at the beginning of this, we were riding in horses and buggies, and we were reading at night by candlelight, and we had no electricity in our homes. And by the end of it in the 1920s, you know, cars had not only been invented, but become like an everyday necessity for a thriving middle class who was going home to electrif homes and reading by light bulbs in the evening. They were on the verge of flying by airplanes. I mean, in terms of transforming the economy, the social structure, everything, nothing like it has ever happened. And that all happened under a very limited government model. Government spending at that time, throughout the 1800s and into the early 1900s during peace times, averaged 3% of GDP. Today it's almost 25%. Good grief, 3%. And we ran budget surpluses, not deficits. Through all of that, government debt was consistently held below 5% of GDP. So that if we got into a tough time like the Civil War or World War I, you know, we had the borrowing capacity so that we could borrow without pushing ourselves into the danger zone. And in spite of all of that conservative finance, maintaining budget surpluses, government not trying to invest in big ways in infrastructure and do all these things, we had the greatest growth over a sustained period we've ever had.

[Tudor Dixon]

Is that because when you talk about the Industrial revolution, that wasn't the government doing that. That was the private sector saying, we're going to create. And suddenly, like you said, we've got light bulbs and indoor plumbing and vehicles. But that wasn' government that created that. And I think that's something that is hard for this generation to look at and say, well, the government needs to invest in AI, but this has always been the private sector that invests in technology.

[Todd Sheets]

Absolutely. You know, you know, we're going back to, you know, the telegraph that was invented by Samuel Morris, Alexander Graham Bell, and the telephone, Thomas Edison and electricity and the light bulb. And so Henry Ford and the, you know, the assembly line, which then took automobiles from being a rich person's toys to being something that was for everybody. And, you know, he drove. And if you kind of go back at the early part of the 1900s when Ford was starting to tinker around with these ideas before he had really implemented the assembly line, automobile, like I said, was a rich person's toy. You know, there were a small number of people working in the industry. If you said, somebody's going to come along and create this way to make this so much more efficient, you know, that a single person, you know, can produce more cars than maybe 50 people could earlier, you'd have thought, oh, this will be a disaster for the auto sector's employment. But what happened was this incredible level of efficiency was also translated through lower prices. So the cost of a Model T over about a seven or eight year period went from over 2,000 down to like $250. And as that happened, demand exploded and auto industry employment actually exploded along with that as demand was created. And so the point of all of this is this is the kind of thing that can happen with artificial intelligence if we take the right approach to it. And I'm extreme. I've been writing about this in my substack pieces here recently. And then the administration just came out with their plan, their AI action plan this week, which is exactly following this model. It's the idea of creating deregulations and giving the industry. We are fortunate to have what I've called the pole position in the AI race. So that, you know, because we've led the world through technology development and through the development of the Internet, we've got the venture capital community and these big tech companies who are leading the world into artificial intelligence. And the approach the Trump administration is taking is we've got to make sure that government doesn't throw up unnecessary roadblocks that in a way that keeps us from winning this race, which is absolutely critical not only for the economy and creating high paying jobs and having them here in the United States, but also so that we can continue to lead the world in this perspective. And from a defense perspective, it's incredibly important. The last thing in the world we want is for these jobs to be in China and for China to be the one that's leading in the defense applications of all these things.

[Tudor Dixon]

I think there's a lot of fear around AI for multiple reasons. I mean, obviously the reason of what can it create, but also, as you said, people are concerned that AI will take over. Well, just as they were concerned that the industrial revolution would take over blue collar jobs. Now AI is going to take over all of the white collar jobs. But as you see, states like my state of Michigan, we're losing jobs all across the board. AI is an opportunity to say, boy, that can be managed from anywhere. There can be these data centers anywhere. But it. But there is an energy cost or an energy supply concern. And that is where I do think that the government needs to make sure that we are an energy dominant country. And that's what Donald Trump is trying to do. How do you see that playing into this AI race?

[Todd Sheets]

Yeah, that's a perfect point. And it's a big part of their new agenda. This AI action plan is not only to, you know, unleash innovation among the companies so that we can continue to lead the race and have those companies and those jobs predominantly happening here in America, but also continuing with the approach of, you know, leading in energy development and realizing our energy potential so that we have the energy that is needed to power this AI boom and it doesn't have to get offshore to get. So yeah, I think that that's a critical, critical part of it. It's a big part of, you know, developing the energy infrastructure, which I think they mean importantly enabling the private sector to develop the energy intersector, you know, not trying to energy sector, not trying to have the government step in and do the private sector's job.

[Tudor Dixon]

Let's take a quick commercial break. We'll continue next on the Tudor Dixon Podcast.

[Ice Cube]

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[Tudor Dixon]

It's been kind of a hindrance for AI in, in the United States because there has been a question for so long, will energy be available with the climate change? And then that was a big part of Biden's administration was, you know, climate change and climate control and control, energy and change, energy over. And then as you're changing energy over to unreliable sources, there are companies who are creating AI and companies who are developing AI and they say, well, what if this is not stable in, in these states that are saying we're getting rid of traditional forms of energy before we have new forms of energy that are reliable. And I think that's been a concern that that's going to drive it overseas. And I, and it seems as though the Trump administration is saying, you know, we're done with all of that. We're going to ensure that energy is here to stay. But there have to be some concerns in the private sector that if Democrats get back into control, they're going to do that same thing and then we're going to have questions about whether or not the energy will be there to support this and if we can continue to lead in this industry.

[Todd Sheets]

Yeah, I think that, you know, those are reasonable concerns. Hopefully what will happen here is that we can free up energy that starts creating these jobs and that allows AI to get started and we can get the kind of growth going again that this country has been waiting for for, you know, almost 30 years now, 25 years. And if that happens, it makes it much more difficult to come back with these other messages which I think lead us down the wrong path as, as we were on for, for such a long period of time there. So the real key is, is to get this growth going. The fears about it are very understandable. You know, any of us, you know, we like to operate with a feeling that, like we've got a sense of how things work and that they work well for us and you know, that things we depend on will be there. But there are these times that we just have to have faith, you know, that the growth of the system, if we unleash it, will take care of things. As I Made a point in one of my pieces. The AI genie is out of the box whether we want it to be or not. It can be developed here, it can be developed in China, but it's out of the bottle. And the best thing for us to do is to kind of follow the model of the Industrial Revolution, which is to let this development and expansion have. And I believe it will create far more jobs than it replaces. And there's already stories out there about how much more efficient it can make people. And if we're leading that efficiency curve, then that will make us more competitive with low wage labor markets like China or Vietnam and those kinds of things. So if we have American manufacturing workers who are benefiting from AI, and I'm already hearing stories about these kinds of things, all of a sudden, if we're on the leading edge of that, they can get paid a higher wage because AI is helping make them so much more efficient than workers who aren't on the leading edge of that. And that helps move those jobs back here as well. So I'm very optimistic about where all this is going and especially given the approach that the Trump administration is taking.

[Tudor Dixon]

Well, this is all very interesting. I know you are. Like you said, you're writing about this. You've got this on your Substack page. Tell people where they can find that, because I think we're all kind of going, okay, what does this mean? This is something new. I'm sure it was the same in the Industrial Revolution. This is all new. What should we expect? So how can people follow you?

[Todd Sheets]

Yeah, so Substack is a place. My newsletter is free there. It's called on wealth and Progress. So if you go to substack.com and search for Todd Sheets on Wealth and Progress, that's one place. I'm also putting out kind of short mini podcasts each week. So, you know, if you go to Spotify or YouTube, you know, there's like a 15 minute little version of the Substack pieces that are there for people that rather listen to it audio on a, in a audio format. And then as you mentioned, my book 2008, what really happened is out there. Also available Amazon or barnesandnoble.com thank you.

[Tudor Dixon]

For coming on today. Todd Sheets. Thanks so much.

[Todd Sheets]

Tutor. Thank you. I appreciate it so much.

[Tudor Dixon]

Absolutely. And thank you all for joining the Tutor Dixon podcast. For this episode and others, go to tutordixonpodcast.com you can subscribe there or the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts and Check out the whole video on Rumble or YouTube @Tutor Dixon and join us next time. Have a Blessed Day.

[Ice Cube]

Ice Cube's Big Three is the surprise hit of the summer this Saturday, 4pm Eastern on CBS with playoff elimination on the line. The most physical, fiercest and competitive basketball in the world. Miami's Michael Beasley and Lance Stevenson must win to make the playoffs and breakout star Dwight Howard of the Ladies Riot will battle Gary Payton's Boston squad in a do or die match for both teams. Six teams are allowed for four spots and all must win. There's no crying in the big three and the no holds barred action starts Saturday at 4pm Eastern, 1pm Pacific. Presented by iHeart.

[Annabe Sofa]

There's nothing like sinking into luxury. At washablesofas.com, you'll find the Annabe sofa which combines ultimate comfort and design at an affordable price. And get this this it's the only sofa that's fully machine washable from top to bottom. Starting at only $699. The stain resistant performance fabric slipcovers and cloud like frame duvet can go straight into your wash. Perfect for anyone with kids, pets or anyone who loves an easy to clean spotless sofa. With a modular design and changeable slipcovers, you can customize your sofa to fit any space and style. Whether you need a stick, single chair, loveseat or a luxuriously large sectional, Annabe has you covered. Visit washablesofas.com to upgrade your home. Right now you can shop up to 60% off store wide with a 30 day money back guarantee. Shop [e-mail] Add a little to your life. Offers are subject to change and certain restrictions may apply.

[Tudor Dixon]

This is an iHeart podcast.