3544 - Americans Are Paying For Trump's Trade War w/ Justin Wolfers

Summary

Podcast Summary: The Majority Report with Sam Seder
Episode 3544 - Americans Are Paying For Trump's Trade War w/ Justin Wolfers
Release Date: July 23, 2025

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Introduction

In Episode 3544 of The Majority Report with Sam Seder, host Sam Seder engages in a comprehensive discussion with Justin Wolfers, a Professor of Economics and Public Policy at the University of Michigan. The episode delves into the intricacies of former President Donald Trump's trade policies, focusing particularly on the ongoing trade war and its ramifications for American consumers and the broader economy.

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Trump's Trade Deals and Tariff Policies

Overview of Recent Trade Deals

The episode begins with Sam Seder highlighting Trump's recent trade agreements with major economies such as Japan, the Philippines, and other Western nations. Despite Trump's proclamations of securing "huge" and "earth-shattering" deals, Justin Wolfers provides a critical analysis of these agreements:

Justin Wolfers [20:50]: "The President has just announced a deal, but it's more of a unilateral decision to impose a 15% tax on Japanese products rather than a negotiated trade agreement."

Misrepresentation of Tariffs as Trade Barriers

Wolfers argues that Trump's characterization of tariffs as trade barriers is misleading. He explains that many of the imported goods, particularly American cars in Japan, were never subject to high tariffs in the first place. Instead, the limited presence of American cars in Japan is attributed to market preferences and non-tariff barriers such as safety regulations.

Justin Wolfers [24:25]: "Japan charges zero percent tariffs on imported consumer cars, yet American cars are scarce due to non-tariff barriers like safety standards and market preferences."

Economic Implications of Trump's Tariff Strategy

Wolfers critiques the coherence of Trump's tariff strategy, noting that the administration's shifting rationales—from preventing fentanyl imports to re-industrializing American manufacturing—have led to inconsistent and counterproductive policies. He emphasizes that the imposition of tariffs without clear and consistent objectives undermines their effectiveness and strains international relations.

Justin Wolfers [28:01]: "The tariffs lack a coherent rationale, shifting from fentanyl prevention to national security, which makes the overall policy incoherent and economically damaging."

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Impact on American Consumers and the Economy

Current Effects on Inflation

Sam Seder and Wolfers discuss the immediate and projected effects of tariffs on inflation. While initial tariff implementations have yet to significantly impact consumer prices, partly due to pre-existing inventory buildups, Wolfers warns of rising inflation as tariffs continue to take effect.

Justin Wolfers [49:35]: "We are on the verge of seeing increasing inflation in the coming months as the tariffs fully permeate the market."

Burden on American Businesses

Wolfers highlights that American businesses, like Best Buy, are bearing the brunt of increased costs due to tariffs, which are indirectly affecting consumers by reducing corporate profitability and potentially leading to higher prices in the future.

Justin Wolfers [52:45]: "Businesses like Best Buy are bearing the costs of tariffs now, which may translate to reduced profits and eventually higher prices for consumers."

Long-Term Economic Consequences

The discussion extends to the broader economic repercussions, including potential trade imbalances and the weakening of the U.S.'s position in the global economy. Wolfers underscores that the unpredictable nature of Trump's policies complicates international trade relationships and erodes trust among trading partners.

Justin Wolfers [43:53]: "This trade war makes the U.S. less central to the world economy, eroding trust and making international cooperation more difficult."

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Federal Reserve Independence and Monetary Policy

Concerns Over Federal Reserve Independence

A significant portion of the episode is dedicated to the topic of Federal Reserve independence. Wolfers explains the risks associated with political interference in monetary policy, drawing parallels with Turkey's experience under Erdogan, where meddling led to hyperinflation and economic instability.

Justin Wolfers [58:25]: "If political leaders interfere with the Federal Reserve, we risk destabilizing the economy, much like what happened in Turkey with Erdogan's interference leading to 86% inflation."

Potential for Political Appointments

The conversation touches on the potential for Trump to appoint Fed officials who may not prioritize economic stability, though Wolfers remains cautiously optimistic that the structure of the Federal Open Market Committee (FOMC) provides some safeguards against unilateral decisions.

Justin Wolfers [59:39]: "Even if Trump appoints individuals disinclined to maintain Fed independence, the FOMC's collective decision-making helps mitigate unilateral risks."

Impact on Inflation and Interest Rates

Wolfers emphasizes that without an independent Federal Reserve, the likelihood of rising inflation due to sustained tariffs increases, necessitating higher interest rates to curb economic overheating.

Justin Wolfers [52:45]: "If tariffs continue to fuel inflation, the Fed may need to raise interest rates, which could stifle economic growth."

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Cryptocurrency Legislation and Financial Stability

Crypto as a Systemic Risk

Towards the end of the episode, Wolfers addresses the burgeoning cryptocurrency market and its potential risks to financial stability. He expresses skepticism about the utility of cryptocurrencies beyond facilitating illicit activities and warns of a possible financial crisis akin to the 2008 meltdown if crypto markets collapse without adequate regulatory oversight.

Justin Wolfers [62:39]: "Cryptocurrencies lack practical use cases outside of crime prevention and present significant systemic risks. Americans should avoid investing in them to prevent broader financial instability."

Government Response to Crypto Failures

Wolfers advocates for a hands-off approach, suggesting that the government should allow crypto enterprises to fail without bailing them out to avoid systemic risks associated with their collapse.

Justin Wolfers [64:28]: "The government should let crypto firms fail naturally to prevent systemic risks, rather than intervening like with mutual funds in 2008."

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Concluding Insights and Future Outlook

Market Confidence and Policy Coherence

Wolfers concludes by reiterating the importance of coherent and consistent economic policies. He criticizes the Trump administration's unpredictable tariff strategies and warns that such policies undermine market confidence and economic stability.

Justin Wolfers [75:12]: "The incoherence of tariff policies erodes trust and hampers economic growth, making it imperative for policies to be clear and consistent."

Fed’s Role in Mitigating Inflation

He also emphasizes the critical role of the Federal Reserve in managing inflation and stabilizing the economy, urging policymakers to preserve its independence to safeguard economic health.

Justin Wolfers [58:25]: "Maintaining Federal Reserve independence is crucial for controlling inflation and ensuring economic stability."

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Notable Quotes with Timestamps

• Justin Wolfers [20:50]: "The President has just announced a deal, but it's more of a unilateral decision to impose a 15% tax on Japanese products rather than a negotiated trade agreement."

• Justin Wolfers [24:25]: "Japan charges zero percent tariffs on imported consumer cars, yet American cars are scarce due to non-tariff barriers like safety standards and market preferences."

• Justin Wolfers [28:01]: "The tariffs lack a coherent rationale, shifting from fentanyl prevention to national security, which makes the overall policy incoherent and economically damaging."

• Justin Wolfers [49:35]: "We are on the verge of seeing increasing inflation in the coming months as the tariffs fully permeate the market."

• Justin Wolfers [58:25]: "If political leaders interfere with the Federal Reserve, we risk destabilizing the economy, much like what happened in Turkey with Erdogan's interference leading to 86% inflation."

• Justin Wolfers [62:39]: "Cryptocurrencies lack practical use cases outside of crime prevention and present significant systemic risks. Americans should avoid investing in them to prevent broader financial instability."

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Conclusion

Episode 3544 provides a critical examination of Trump's trade policies, highlighting their inefficacy and potential economic pitfalls. Justin Wolfers offers insightful analysis on how these policies contribute to inflationary pressures, strain international relations, and threaten the independence of key economic institutions like the Federal Reserve. The episode serves as a cautionary tale about the dangers of inconsistent and politically driven economic strategies and underscores the need for coherent policy-making to ensure long-term economic stability.

Transcript

[Sam Cedar]

The Majority Report with Sam Cedar. It is Wednesday, July 23rd, 2025. My name is Sam Ceder. This is the five time award winning Majority Report. We are broadcasting live steps from the industrially ravaged Gowanus Canal in the heartland of America, downtown Brooklyn, usa. On the program today, Justin Wolfers, University of Michigan professor of economics and professor of Public policy on Trump's trade deals, tariff deadlines and on the potential lack of independence of the Federal Reserve, also on the program. And meanwhile, Trump strikes an inflation inducing trade deal with Japan. Canada and Europe, however, prep for their own retaliatory tariffs. Republicans on the Hill call off summer work in Congress to give Trump time to strike a deal with Ghislaine Maxwell and defuse the Epstein scandal. EPA has drafted a plan to stop itself from addressing climate change. Columbia University punishes 70 students for protesting in a grant funding SOP to Donald Trump. Mike Lawler toes the Trump line. He will run for re election in the House rather than governor of New York. Amid protests, Zelensky approves a bill weakening anti corruption bodies in Ukraine. And bowing to a Trump executive order, the US Olympic officials will bar trans women from Olympic competition. The FEMA search and rescue Chief resigns over DHS's failures in responding to the Texas floods. Trump regime looking to criminalize aiding ice protests. And as doctors in Gaza become too malnourished to treat patients. Israel is going to fund a tour for 16 under 30 maga influencers to remind everyone that America first is Israel first too. All this and more on today's Majority Report. Welcome, ladies and gentlemen. Thanks so much for joining us.

[Emma Vigland]

It is hump day.

[Sam Cedar]

Hump day says Emma Vigland, of course repeating her phrase that she coined cutting several years ago. Now everybody's using it.

[Emma Vigland]

I know, I know. Maybe you'll have to cut costs by having I say the catchphrase.

[Sam Cedar]

We're going to work on that. In the meantime, there there's this fascinating dynamic with the Epstein revelations. The Trump administration is completely beleaguered by this because it's the first time they have not been able to in a long time to control the media narrative. And polling suggests this is a story that is getting through to low information voters, which of course is the bedrock of the Trump victory in 2024. And Donald Trump is desperately looking for ways to, to get out from under what? I mean, maybe he's just doing this because he feels that the country needs to move on and there are important policy things that need to be done. Turn the page, turn the page, turn the page.

[Emma Vigland]

While I accuse Obama of treason, which is a crime that could result in execution.

[Sam Cedar]

I said, you can go backwards. I said. Also, he said, turn the page, not all the pages.

[Justin Wolfers]

Turn the page back to the election that actually won, where I'm going to accuse Obama of cheating.

[Emma Vigland]

Right.

[Sam Cedar]

They're obviously nervous about this. They shut down Congress, literally. They're going on a six week vacation.

[Justin Wolfers]

Take my ball and go home.

[Sam Cedar]

Now, I should say everybody in the office tried to do the same thing.

[Justin Wolfers]

If they don't release, and I don't know why we have to come in.

[Sam Cedar]

And it didn't work. But Congress taking a six week vacation so that they don't do any due diligence on the Epstein files, they're going to plan to subpoena Ghislaine Maxwell, but only after the Department of Justice meets with Ghislaine Maxwell to cut some type of deal. Now, I know that sounds suspicious, but remember, the Department of Justice is completely independent from the presidency, including the representative they're sending from the doj, who just his last job just happened to have been Donald Trump's defense attorney. Now, come on, a lot of people are going to make a lot of like, that doesn't sound suspicious to anybody.

[Justin Wolfers]

Everyone has a resume.

[Sam Cedar]

Exactly. And it's a total coincidence. But Donald Trump is basically out there now overtly telling people how to make people not pay attention to the Epstein thing. And of course, like he's run out of. He tried the commanders that didn't go anywhere. He thought, like, if I could talk about the Native Americans, what, what's wrong with my guys and sometimes my gals? It used to be all I needed to do was say, look, brown person, and everyone would pay attention.

[Justin Wolfers]

Pocahontas.

[Sam Cedar]

But instead he found a darker than brown person to talk about. But he had to go deep. Here he is. Remember this? Obama cheated on the election and we have it cold. Who hard blue. And it's getting even more so because the stuff that's coming in is not even believable. So. And you should mention that every time they give you a question that's not appropriate, just say, oh, by the way, Obama cheated on the election. You'll, you'll watch the camera turn off instantly. But I want to thank. He's literally. What, what question do you think is inappropriate these days? You know what, what question? No, let's do number 10. We're going to do number 10 here.

[Emma Vigland]

Yeah.

[Sam Cedar]

The question that he's talking about, of course, is if anybody asked you about Epstein, say that Obama was involved in The Russia hoax. And this is the amazing thing. I mean, like, they are being so. I don't know what to say. Basic on this. Like, this is not. You don't have to read into this for like 6 hours to understand what they're doing here. They're claiming that the Russia hoax was based upon Russia's ability to change the outcome of the election by going into voting machines. Voting machines, yeah. And it was in their citing the Obama administration's findings that Russia did not have the ability to do that. And then they're conflating that with the argument that Russia was trying to. And, you know, your mileage may vary as to whether they were the, you know, the determining factor of whether Russia's influence campaign online through the election to Trump. But that was the findings when Obama left office in 2016. It was reiterated four years later by a bipartisan Senate Intelligence Committee. And they should try and find the person who chaired that committee.

[Emma Vigland]

He must be out there somewhere.

[Sam Cedar]

It's going to be hard to get him to testify because he is now the Secretary of State in the Trump administration. But here is Tulsi Gabbard on Newsmax, and I've got news for you. No pun intended. When Newsmax is skeptical about your conspiracy theory, you know you have a problem.

[Unknown]

Just read this to you really quick because this is relatively new here. This is from Obama's office. They say they out of respect for the office of the presidency, they don't usually dignify what comes out of the White House with a response, but says that this is so outrageous that they have to respond. It says nothing in the document issued last week undercuts the widely accepted conclusion that Russia worked to influence the 2016 presidential election, but did not successfully manipulate any votes. These findings were affirmed in a 2020 report by the bipartisan Senate Intel Committee led by then chairman Marco Rubio. Any response to that?

We will be releasing further documents tomorrow that will refute that statement. And I would go back and point to. And we will be pulling a whole host of statements that were made by the Obama administration, by Hillary Clinton, by senior Democrat officials, by their friends in the media that state over and over again after this January 2017 manufactured intelligence document was created that repeat the narrative. And I'm looking at my notes here. New York Times says Russian hackers acted to aid Trump in the election. CIA's Obama's CIA Director John Brennan says there is strong consensus among us to support the CIA claim Russian hackers aided Donald Trump's election. Hillary Clinton said, I would be president if not for the Russian hackers supporting Donald Trump. So there is a vast body of evidence that.

[Sam Cedar]

Hillary Clinton sang shit two years after the election.

[Justin Wolfers]

Don't put that on me.

[Sam Cedar]

I mean, Brennan, who's out of office saying this shit, two years later, she's lying in this interview. Yeah. Like.

[Justin Wolfers]

Well, I mean, just follow the logic there. Like, we're gonna. We will be releasing further things because we can't. With what we've already released, we can't refute that. And also, the net's gonna be widening, not just from Obama, but to everyone around in the media.

[Emma Vigland]

Yeah. Including statements by the New York Times. I mean, how is that related to some sort of.

[Sam Cedar]

They're just going to keep going down the line. Do they get to say, like, people here is, you know, here's the. The pod, Save America.

[Emma Vigland]

Obviously an arm of the Obama administration.

[Sam Cedar]

Like, this is just. And the thing is, if that's what it takes to shut her down on Newsmax, this is like, they are. They have lost the step. Honestly, they have completely lost the step. And part of the problem, I think is, is. Well, it's not. It's. It's. They've lost their cooks. Because in this instance, the people who usually develop these fake conspiracy theories are the media guys who are bumping up against the conspiracies they had about Epstein. And now there's no room for them to sort of maneuver here. So Tulsi Gabbard's there trying to make, you know, essentially throw together. Throw together a meal. And she's like, all I have is flour. I don't have anything else.

[Emma Vigland]

And it's because the guy that's ordering the dinner or ordering the. The. The meal basically is somebody who's doing it at the 11th hour and not providing her with the ingredients that she needs.

[Sam Cedar]

Room service.

[Emma Vigland]

Right. Because he's asking for something that, like, physically can't be created because there isn't the information that they need. Like, the reason that this administration looks like it's making things up on the fly is because they have to make things up on the fly, because he's constructed an entire, like, administration around him that just will respond to his every need and desire. That's what, like, the Trump Cabinet prerequisites were.

[Sam Cedar]

This is the one thing to keep an eye out as they send Donald Trump's former defense attorney from the DOJ to go meet with Ghislaine Maxwell and her attorney. And we'll dig into this a little bit more. But the one thing to keep an eye on is there's really basically two things that the. The DOJ can do at this point. Well, two things that the administration could do. One is they could pardon her, which, of course, would look a little bit bad. Yeah, I might look a little bad. We decided to look into this, and you know what? There was absolutely nothing there, and we're going to pardon her. The other one is that they could file what is known. The DOJ could. A Rule 35 motion, which is basically a request to a federal judge to lower a prison sentence based upon, you know, whatever conduct by the defendant or I guess the convict at that point has been. Maybe they've done some community service or. Or maybe they have cooperated with the government in some way. Now, the problem is the judge has to sign off on this, and apparently this request will go to U.S. district Judge Paul Engelmeier, who's an Obama appointee, and Engelmeier is the one who blocked the Department of Doge from accessing the Treasury Department payment system. So it's going to be interesting to watch what they do there. But we'll talk more about this later in a moment. We're going to be talking to Justin Wolfers. He's a professor of economics and public policy at Michigan University of Michigan. First, a couple word from our sponsor. As people know, we sold a ton of max left trucker hats.

[Emma Vigland]

Thank you, Hassan.

[Sam Cedar]

In part because Hassan put it on his head. And then there may have been other incentives, but. And then we easily, we, you know, somebody said, I think it was the guys in the vanguard. He was like, you got to get a dad hat.

[Emma Vigland]

Yeah.

[Sam Cedar]

Or a baseball cap.

[Emma Vigland]

Baseball cap.

[Unknown]

Right.

[Sam Cedar]

And we got it up in a minute. Literally a minute. And why were we able to do that? Because Shopify, when we started our merch thing, I was resistant for years because I'm like, it'll be too much of a pain, won't be able to keep records. It's gonna be. It's like having another job. And I'll be honest with you, you know, we don't. We make some money on the merch, but we don't make that much money. And. But Shopify made it super easy for us to.

[Unknown]

Wow.

[Sam Cedar]

Yeah. Shopify is the commerce platform behind millions of businesses around the world. Things like Magic Spoon, which we actually have advertised in the past to brands that are just getting started. Shopify has hundreds of ready to use templates to help you build an online store to match your brand. Sometimes that can be beautiful, sometimes that can be edgy. Sometimes it can be a little garage band or like, you know, our whole branding is we haven't touched it in 12 years.

[Emma Vigland]

Yeah.

[Sam Cedar]

And our what it was easy to create that in Shopify. Shopify is also packed with AI tools to help you put together product descriptions, page headlines, even enhance your product. Photography. Photography. Best yet, Shopify helps you manage inventory, international shipping and processing returns and beyond. If you sell at your live show or, you know, you have a shop, you know, you go to farmers markets or whatever it is, it's so easy to integrate your inventory and your sales between both those platforms. And it's also easy to integrate it with social media, Instagram, whatever, all of it. If you're ready to sell, you're ready for Shopify. Turn your big business idea into a cha ching with Shopify on your side. Sign up for your $1 per month trial and start selling today. Shopify.com Majority Go to shopify.com Majority shopify.com Majority we'll put more of that info in the podcast in the YouTube description. Quick break. When we come back, Justin Wolfers, professor of economics and Public policy at the University of Michigan. We'll be right back.

[Justin Wolfers]

Foreign.

[Sam Cedar]

We are back. Sam Cedar, Emma Vigland on the Majority Report. It is a pleasure to welcome to the program. Justin Wolfers, professor, Professor, Economics and Public policy at the University of Michigan. Thanks so much for joining us.

[Unknown]

Is that Mikey? G'. Day.

[Sam Cedar]

Hey, how are you?

[Emma Vigland]

We have to get your full title in.

[Sam Cedar]

Exactly.

[Emma Vigland]

Let everyone know you're fancy.

[Sam Cedar]

So this morning it was announced that Trump had struck a, I don't know what the adjective that he used, but I'm sure it was something like huge, big earth shattering deal with Japan and also I think the Philippines as well. In the wake of Bongbong Marcos visiting the White House, I, when I found out his first name was Bong Bong, I haven't hesitated to say it, but give us your assessment of that before we sort of move on to sort of the implications of the tariffs thus far and ostensibly the semi firm deadline of August 1st according to Trump.

[Unknown]

Sam, can't we just all start by getting our own nickname like Bong Bong? What would you be in the bong Bong genre?

[Sam Cedar]

I would have chosen Bong Bong.

[Unknown]

What about you, Emma?

[Emma Vigland]

Eminem. Yeah, I think nailed it for me. Yeah.

[Unknown]

Wow. Wow. Okay. Tariffs. Okay, look, the most important thing is it's really, really hard to keep track of this because the way it's going to be reported is tariffs on Japan have gone from 25 to 15 and then people might think that sounded like an accomplishment, but that's upside down and back to front and exactly wrong. So what I want to do is take you back to December of 2024. December of 2024, almost every industrialized country around the world charged extraordinarily low tariffs, 1 or 2%, an extreme might be 3%. So there basically were no tariffs. So then the President comes to town and says, what I'm going to do is I'm going to negotiate deals. Now what you know right there in January of 2025 is there's not much to be gained, which is we already have access to most foreign markets with in most cases zero tariffs and in a few cases small tariffs. The whole enterprise of the trade war was there's not much to gain. There would be access to foreign markets which we already have. And there's a whole heck of a lot to lose, which is starting a global trade war. That is also the right baseline for thinking about any of these so called deals. So what's happened is the President has just announced a deal and I don't want you to focus on the 15% for the moment because the 15% is how much the President of the United States is taxing Americans for buying stuff from Japan. Now I got advice from you don't need to talk to the Prime Minister of Japan to decide how much you want to tax Americans. You could do that from the privacy of your own home. That's not a deal, that's a decision. Right. And it turns out there's a specific form of tax that this particular President likes. So what did he get for us? Well, what he gets for us is do we get more access to the Japanese market? That's where you should be focusing. Now the first thing to realize is again, remember that basically we had complete access to Japan at the start of this. I said should say almost complete access to Japan at the start of this. One of the other thing is, I can't give you a lot of detail because of course we only have a truth social post to go on because of course that's how we do international diplomacy these days. But one of the things the President talked about was we'll be able to sell American cars in Japan. Now this actually has a lot of people on the right riled up. They say, have you ever seen an American car in Japan? The answer is you don't see any. Do you want to know why? It has nothing to do with tariffs. Do you know what the actual tariff rate is that Japan charges On imported, domestic, imported consumer cars. Zero percent, zero, none, nada, not a penny. So the Japanese weren't buying American cars, but had to do with tariffs. Now it had something to do with the fact that if you've ever been to Japan, you'll notice everyone drives really small cars. And I'm from the Midwest and I can tell you what American cars look like. They're really big. You can't even park them in Japan. They drive on the other side of the road in Japan. They want more fuel efficient vehicles in Japan. And in the future they're going to want electric vehicles. And this administration has been moving us away from electric vehicles. So this ax, you want to know how hard it is, you can't buy a Ford in Japan, not because they're, not because they're banned, but because Ford doesn't have any dealerships. So there were a few things that are called non tariff barriers, like Japan has some safety requirements that the American cars don't meet. And so that I think is the crux of what the President has got us.

[Sam Cedar]

And can I just to add or have you expand on this? When Donald Trump held up that graphic of all of the supposed trade barriers to the United States, that was not as presented as if they were imposing a tariff on us. It was the differentials within trade which were a function of they're not interested in US Cars in Japan for other reasons besides tariffs. So. But he took that deficit and sort of extrapolated it in some fashion or morphed it into as if it was a trade barrier as opposed to just a, we're not making products that are useful to them. It's like, I don't know, like.

[Unknown]

I.

[Sam Cedar]

Selling kangaroos to Australia, I mean, I don't know what, like there's no, they had no interest in our cars.

[Unknown]

Essentially, they had no interest in that. Because actually, Sam, you've just brought up one of my favorites. So, no, Trump is not trying to sell kangaroos to Australia, but actually he has a similar beef. Wait for that beef. Get it with Australia. And it's actually over beef. The American farmers complain that Australians won't buy American beef. Let me give you in my Australian accent a couple of facts here. First of all, Australia grows more beef than it can eat. Why would you want to buy American beef when we already have too much Australian beef? Second of all, I have to say this. I'm duty bound. Australian beef is better. Let's put that aside. Third, in fact, we do allow American beef into Australia. You're allowed to send beef from the US To Australia, but you have to certify it's not Canadian beef and it's not Mexican beef because they have certain diseases that Australia doesn't have. And the Americans who've wanted to try and send beef to Australia haven't wanted to certify that it was not Mexican or Canadian beef. So the Australians told them to piss off. In any case, you could go and beat the Australians up to get access to the Australian beef market and we have our own cows. Like we're just going to, it doesn't matter. So, Sam, I got hung up on that partly because I'm Australian, partly because I'm hung up on beef, but partly to show you the broader pattern of dishonesty about what's going on here. There are real trading barriers in some domains. Some of them exist for very good reasons. For instance, Australia is an island. It doesn't want to get diseases from the rest of the world. It's a wonderful thing that Australia doesn't have to live with foreign diseases. Some of them are when politically powerful groups lobby to get protection Here you can think about Canadian dairy farmers, but some of them are also very big on paper, but don't really matter actually at all in practice. That, by the way, is the story of Canadian dairy farmers. The global consensus in December of 2024 was basically every country's got its tariffs down as low as it can and they're all trying to get their, what they call non tariff barriers, that's what we're referring to, down as far as they can. And they all try in good faith. But every country has politically important issues. And so there's always just a small amount of things. We say, I can't get my guys to sign off on this. And then the other PM says I can't get my guys to sign off on this. And so then you just sort of say, well, let's keep tariffs close to zero, if not exactly zero. That's where the world was. And Trump hasn't yet gotten anyone to give up on the really politically important stuff.

[Emma Vigland]

Well, let's also just hilariously incompetent about the whole thing is, is right now the Trump administration is basically gutting safety standards across a variety of sectors that would affect the products that they're demanding that these other countries import from the United States based on this misguided notion of a trade deficit cooked up by Ron Vara or whatever Peter Navarro's pseudonym was. But like that's part of the problem, right, is is that the United States is lagging technologically, and we can bring it back to cars. And how China is so far ahead the United States right now with electric vehicles. But this is an attempt to impose almost US Economic hegemony by force without adjusting the economy to, like, futurize or to progress our economy into the future. That, like, would create products that people would want to buy. Outside of our oil and our aircraft parts, which is mostly what the US.

[Unknown]

Is selling, There's so much there, Emma, I don't know where to start. So, first of all, I want to go back. We sell a lot more than oil and parts. We are actually a global technological leader. We actually sell some incredibly valuable and useful stuff. As you think about which countries should. The way we teach this in Economics 101. Let me take a step back from international trade and just say the underlying economic theory here comes down to a simple thing. There's a whole bunch of tasks in the world around my house. One task is sweeping the floors, and another is washing the dishes. And around the world, another task is designing new iPhones, and yet another task is screwing in the little screws. And what we want to do is assign those tasks so that they can each. Every task can be done by the person who has what we call a comparative advantage, but the person who can do it at the lowest opportunity cost, then that would lead you to say, well, what are the tasks Americans are good at? It turns out that the United States has the most educated workforce in the world, and particularly when it comes to science, this is where we go off to the PhDs and so on. Those folks are just doing amazing things. They're inventing AI, they're inventing Google, they're inventing whatever you think of Facebook. But also, we're doing the same in pharmaceuticals as well. We are the world's great inventor, but this is an extraordinary allocation of tasks. We get to sit around and nerd out and invent things. And in return, China will make the iPhone. And that means my kids will get to sit in a laboratory or in front of a computer or in front of a big whiteboard and dream big dreams. And kids in other countries will grow up and work at a factory. This is an allocation of tasks that serves the United States extraordinarily well. Emma, I do think you're on something. You used a word I don't normally use. American hegemony, which is Trump. Trump doesn't like the fact he doesn't run the world. And every country is independent, and they all have their own legislatures, and they all pass their own health and safety laws and their own occupational safety laws and so on. And trade is what makes that complicated. Because if they will not take our, you know, our software, maybe we shouldn't take their T shirts. It is an issue, though, that, you know, some of these things literally are reasonable safety standards from other countries that we should respect. And some of them are unreasonable laws put in place by politically powerful lobby groups. And I don't see a better way than going case by case.

[Sam Cedar]

The overall, it seems to me there are two purposes of tariffs. I mean, or there, I should put it this way. The administration has stated that the tariffs have two purposes which are it seemingly completely at odds with each other, aside from the fact that we could also call tariffs just import taxes. And it makes it more clear. Yeah, it makes it more clear that it's, it's simply a tax. And we could talk about, I mean, I've heard you talk, you know, in various areas. And we will go over why we aren't seeing the implications of those taxes in the way that we thought we might by now, but that we're, we're likely to soon. But it's either a tax. We're, you know, they were bragging we're going to make $600 billion a year, or it is part of a larger program to develop an industry within this country. For whatever reason, we have decided we want it. Maybe it's a national security. We need to have shorter supply lines. Maybe we need more steel, maybe we need more whatever it is. But if you're generating the revenue on one hand, it means that you're not building the industry here because people are still buying the things that they're being taxed on. Right. Like, could you just walk us through that dynamic?

[Unknown]

Seb, I think you've almost given the administration too much credit, which I know is something you often do. So I actually keep a list of the rationales we've been offered. So let's go through the list. So when Trump first came to power, he put taxes, tariffs, import taxes, you're right to call them that, on Mexico and Canada in order to keep fentanyl out of the United States. So the reason I want to talk about the shifting rationales is different rationales lead to different policies. And the problem is we have a policy but no rationale, which means our policy is a mess, which is your point. So if you want to keep fentanyl out of the US Then you should definitely put pressure on Mexico. But why Canada, which is the source of less than 1% of our fentanyl. Then he said what he wanted to do was prevent illegal legal immigration to the US From Canada and Mexico. That was the reason for those tariffs. Of course, forgetting the fact that the way that most illegal immigrants arrive in the United States is they take a plane and then they're enjoying themselves and they just decide not to fly back and they're inside the United States. There's nothing Canada or Mexico can do about that. The next thing that was said was that what we were going to do is we were going to re industrialize, we're going to save manufacturing. And if we put high tariffs, then Americans would be forced to buy from American factories instead of foreign factories. Fair enough. But if that's the case, why do we have tariffs on bananas and coffee, which are two things that Americans could never grow? I agree that there is in fact a coffee industry in Hawaii before you tell me otherwise, but not enough to service the entire US market. Then we were told it was going to be all about national security and that's why we needed steel and aluminium. But if what you want is to protect American national security, I would imagine the next generation of warfare is about artificial intelligence and drones and not about steel and aluminum. Moreover, at the moment we have tariffs on horse saddles and I'm pretty sure we're not going to war riding horses then. And this was your point, Sam, they said what we want is we want to impose tariffs attacks in order to raise revenue. And if we raise that revenue, we're going to get rid of the income tax. So if that's the case, the tariffs actually have to be in place and people have to be paying them. But if that's the case, you might have noticed in fact that they didn't eliminate the income tax. In fact, all that they've done is offered tax breaks for the rich, whereas the tariffs are going to be predominantly paid for by working and middle class families. So then he put up, then that led us to April 2, where he said this was Liberation day. The specific tariff each country got was a function of. He called them reciprocal tariffs because he was worried that they're being unfair to us. So therefore we have to hit back. But then why would he put a tariff of 10% on Australia, which has a free trade agreement with Australia? Why would he put a tariff on Israel where Israel was offering zero tariffs on everything? Why is there a tariff on South Korea where Korea had zero tariffs on everything? Moreover, the idea that you should tie tariffs to bilateral trade deficits, this is the issue you were just describing is utter nonsense. Then he said, no, no, no. Remember, he announced those tariffs. The world blew up, stocks tanked. Everyone said a recession is just around the corner. And he saw his mates from Wall street, called him and said, don't do this. So then he said, no, no, no, just kidding. I didn't actually want tariffs. This, again, is your point, Sam. What I wanted was tariffs for leverage to make deals against other countries. Let me make a simple point. If you want leverage against someone, you don't have to tax the American people to have leverage with Japan. You simply need to say to Japan, I could tax the American people. Actually taxing the American people doesn't give you any extra leverage. Right? So then, in any case, he says he wants leverage for trade deals. We're going to get 90 in 90 days. We got essentially zero in 90 days. So it seems like he couldn't be serious about leverage. Then he said what he was going to do is tax any country that imposed tariffs on any country that stopped using the US Dollar as a reserve currency. So now this is a completely different use of tariffs. Then he said to Canada he was going to cut off trade talks with Canada unless they got rid of their digital services tax. This is a whole new issue. So now we're going to use American tariff policy to set Canadian tax policy. This might be seeming weird for you, but don't worry. He then went to NATO and learned that Spain wasn't willing to spend as much money as he was. So he said he was going to impose a special tariff on Spain, forgetting, of course, that Spain is a member of the European Union and it is literally impossible to impose a tariff on Spain. And then most recently, he learned that his good mate Bolsonaro, his fellow insurrectionist, was going to go to jail in Brazil. So said the most America first policy that we could have is to impose taxes on Americans who buy goods from Brazil in order to prevent Brazil from putting insurrectionists in jail. That was a long list, Sam. I just wanted to make the case it's more incoherent than you think.

[Sam Cedar]

And I mean, it's. It's obviously like the one thing he feels like he can do unilaterally. All right, well, let's. I want to get to Japan, and then I want to get to August 1st, because I'm curious as to how. How nervous you think Wall street is or might be, but in terms of Japan. So in this specific deal, it's a 15% tax on working Americans on all Japanese products, which is a great way to finance tax cuts for the wealthy. If you don't want to let people know that's what you're doing, you call it tariffs. Supposedly Japan is to buy 100 Boeing planes. I'd be a little nervous myself, particularly with Boeing is going. Japan is going to boost rice purchases by 75% if there's very little rice purchases. A boosting of 75%, you know, 75% of. Of zero is still zero, I would imagine. But they're going to buy other agricultural products and then they're supposedly. I mean, again, it's so hard to know because, you know, this is just Trump, you know, maybe in an ambient haze tweeting this stuff out, but they're going to invest $550 billion according to Trump in the US and the US is going to get 90% of the profits. I'm not even sure I know what that means, but do you have an idea of what that means or what that could mean or isn't it. Doesn't it create some type of imbalance if we. In terms of dollar denominator, like the strength of the dollar? If these investments come in from outside the country, it's going to skew the value of the dollar such that it's going to expand our trade deficit?

[Unknown]

It sounds like. Yes. So I've been on this through. What's the expression written in this rodeo before? Yeah, I ride in a lot of rodeos. So I've seen this play before, which is he announces a lot of stuff on truth social. And at this point, often there's never actually an agreement. The deal with Britain looked very similar. They had a big poster and impressive numbers. But you actually read what the framework agreement said. It said over time, Britain will work to open up its markets and change its biosecurity laws so that Americans get access to British markets. That remains simply a talking point. That's all that was the deal. And then what you can do is you can say, how big are those markets? And it's billions of dollars. And it seems very impressive, but they actually did nothing. And so I think the idea that we should do serious economic analysis by reading a tweet is a little bit beneath all of us.

[Sam Cedar]

That's all I needed to hear, frankly. I mean there's. I have no doubt that.

[Unknown]

Let me teach the audience something that is important because Trump falls for this all the time. So first of all, the Boeing's, they were probably already going to buy and they just create an announceable. And by the way, the Japanese government doesn't Buy Boeings, Japanese airlines choose to, and they do so based on profitability. The other part of this is when you say things like we're going to sell this much soybeans, when you're talking about commodities, commodities are literally that commodities. So they're going to buy it from the US Instead of buying it from a different neighbor. And then everyone who would have bought from the US Will buy from that neighbor instead. And all you've done is changed which ships are going to which ports, but you're not changing anything. And that's because this is not a specific good made by the US So if they said they were going to buy a lot more of a specific American made medication, that would be an increase in demand. This is just going to be a reallocation of demand around the globe and does nothing for American farmers.

[Sam Cedar]

So the total export of, let's say, if it's rice from the US Is not going to change. It's just going to. We're going to be sending it to Japan as opposed to Britain or South America or wherever. Okay, so in terms of this August 1 deadline, he said it's sort of firm. Not totally firm, but firm. And like, at what point, I mean, as this is going on, I would imagine that Canada, European countries, Asian countries are saying, you know, this is all well and good for him, but for us, we need to be able to have something that we can plan on. And we're just going to find alternate markets both in terms of what we want to buy and what we want to sell. And every day that we have to make those plans puts the United States in a weaker position. And where are we going to be at the beginning of August? And how nervous do you think the financial markets, the Wall Street, I mean, the various constituencies that would be impacted by this are of any of this stuff coming to fruition.

[Unknown]

Right. A lot of questions here, so I'll pick some up and you'll come back to the ones that I miss. Okay, so first of all, how scared is Wall Street? The answer turns out to be surprisingly little. So one fact is true. There's an unbroken streak every time Trump trusts his instincts. Increases tariffs, for instance, or threatens to fire Fed Chair Jay Powell every time he leans into his instincts, markets fault. The only thing that's changed over time is by how much. So at the start of the Trump administration, and this was Liberation Day, he would say something outrageous like announce the Liberation Day, tariffs and markets would tank and then that would lead him to revise what he wanted to do and what's happened is you've all heard this word taco. Trump always chickens out that people have understood that the outrageous first claim is not anything he means. And so, as a result, when he speaks now, markets don't believe him. So markets are now falling when he moves into tariffs, but only by a very small amount, so small that the President doesn't get the feedback he needs that this is a very, very bad idea. Markets are confident that he's going to chicken out. I am not. And I am not. Because there are other policy domains, for instance, immigration, where he's taken really very, very extreme views and charged ahead irrespective of external advice and what external groups want. And there's no reason to think that he wouldn't do that again. So to characterize this, this is a debate between is he tariff man, the guy who actually loves tariffs, and there's good evidence that maybe that's who he is, versus is this taco man, the guy who always chickens out? If he is tariff man? This is a very, very high set of tariffs. Actually, it's now, currently, we may be on track for the August 1st tariffs to be higher than the Liberation Day tariffs. It depends what day of the week you look at. And so if you're worried on Liberation Day, you should be worried today, is my view on this.

[Sam Cedar]

What, what do you have? What's your sense of. Of how other countries are sort of moving away? I mean, there's a real, also broad sense. I mean, you mentioned, you know, us, we have PhDs and this and that. There's a brain drain there. I mean, and it's sort of the same dynamic, right? Like, it's just people are turning away from the United States.

[Unknown]

Look, you know, we've all been to middle school, and you're sitting in the middle school cafeteria, and there's the kid who insists on farting at the lunch table. We're that kid. You know, we. We are the kid who fights at the lot at the lunch table. And that makes us a less attractive friend. And what happens is people get up and they make other friends. And so that is, at a very literal level, what's happening right now. So the European Union is talking to the group of Asia Pacific nations formed what was once called the Trans Pacific Partnership until the United States dropped out of it. But more generally, people want friends who are friendly, and they want friends who are reliable. What may not be clear to an American audience is this trade war has been the front page of news in almost every country around the world. More Days than not, this is just such a central issue and people understand how they're being treated. And so if you thought about this through a foreign policy lens, and I want to emphasize, I'm not a foreign policy guy, but we have made the United States less central to the world economy. And it's not just tariffs, of course, there's immigration. Whenever immigrants come over here and have a good life, they become more connected. Their families back home, we understand each other and so on, but also international students. They're terrified of coming over here. International conferences are no longer being held here because you can't do that in case people won't get in across the border. And while the US Will host the next Olympics, if these are our border policies, we'll never host the Olympics again. All of this means, yes, we're a big country and yes, we're a rich country, but increasingly we will become disconnected. If you're President Trump, that was the goal. If you're the rest of us, you understand the richness that comes from being integrated with the rest of the world. The richness is. I sat down and I looked at my dinner plate last night and the salmon came from Norway and the dill came from Israel, and the rice might have come from the US but it might have come from China. And on and on it goes. It's the confluence of ideas and the people that all come together in this extraordinary melting pot. And we are not going to be that. And lest that sound alarmist, let me remind your viewers that prior to Hitler, the US Was the center of learning in the world. That's where the world's professors and scientists went to profess and science together. Hitler basically kicked out the Jewish scientists. They all left Germany and they ended up in the US and the next 80 years of economic history is that Germany floundered. The US has created millions of incredibly high quality jobs as we have created the technologies of the future. If we are unreliable, that will not be our future.

[Sam Cedar]

Let's talk just a little bit about inflation. I mean, I've heard you explain that we are starting to see some inflation as a function of the tariffs. But because people saw this coming, there was inventories that were built up, there was a big expenditure, and that takes while to work its way through the system. Almost like, I guess, you know, a snake eating a rat, as it were. But once that passes, which we are sort of on the verge of that, we're going to start to see increasing inflation in the coming months. And that's regardless of what happens on August 1st.

[Unknown]

Yes. So let me just try and create a little bit of structure for the audience so that I know not everyone wants to think like they're in an Econ 101 class, but that's how I teach. So when import taxes go up, one of three things has to happen. Actually, one of four things. Either the foreign countries reduce the price, they send stuff to the United States. That's what Trump bet would happen. And to be absolutely clear about that, that has not happened. Import prices are literally unchanged. We've had roughly a 10% tariff in place since April. If Trump were right, import prices would have fallen 10%. If you look at import prices excluding oil, because oil is not tariffs, they're exactly flat. So foreign countries are wearing none of it. That then means the only two other places the tax goes. And it has to be paid by someone. They're going to be paid by, let's say Best Buy imports a washing machine from Korea. So you're going to be paid by Best Buy or it's going to be. Or Best Buy is going to jack up their prices, in which case it's paid by you. At this point, we're not seeing a lot of movement in consumer prices. We're seeing a little bit, but not a lot. What that tells us is that Best Buy is bearing it. Now, just to be crystal clear about that, Best Buy is an American company, so the costs are being borne by Americans. They're being paid for by yours and my 401k rather than at the grocery store at the checkout. Now, why is it that that's happening? That's a fairly standard short run thing, which is whenever your costs go up and down a lot, businesses try and keep their prices pretty stable. And so it's only when they're confident that prices are up and they're going to stay high that they'll go ahead and pass on the price rises. One that says don't expect Best Buy to continue to be happy about lower profits. We saw earnings reports from General Motors and other big companies saying their profitability is down. But the other part of this is actually what you said, which is the Trump tariffs went on in April and everyone's like, well, why aren't we seeing it in prices yet? Well, they didn't apply to the goods that were already on boats. It takes a month for a new good to get on the boat and get to the United States. That brings us to May. Then it has to get off the boat and through customs. That's a couple of weeks. And Then it has to get on the truck and into the storeroom. That's another couple of weeks. Then once those goods get to the storeroom, it turns out the storeroom is pretty crowded right now because a lot of companies knew tariffs were coming, so they stocked up. These goods are only just getting to the shelves now, but the most recent price data we have is from last month. And so that's the very simple logic of why no one should ever have expected an effect on prices right now. The other part of this is people will say, hey, for instance, they'll say to me, justin, you've been screaming tariffs are inflationary this whole time. But we haven't seen an inflationary breakout. And part of the answer is Trump hasn't imposed most of the tariffs. Most of them are off until August 1st. It's no surprise that in June and July, we're not seeing the effects of August 1st tariffs yet. And so if he does go this next step, for sure and for certain, this will continue to raise prices. And then you'll ask me the question when? And the answer is by the end of the year, but not straight away.

[Emma Vigland]

So what happens when prices go up? And we've been talking about around the holidays, it's going to be a really major problem with, like, some of the trade wars with China and cheaper toys and things like that. That's where things could be felt. What happens if prices go up and Jerome Powell remains firm at the Fed with not lowering interest rates in response to that? You know, some of the, the turbulence you're seeing in the market that you've described has been when he's been, like, openly flirting with firing Jerome Powell, but he's largely been prevented from doing that. But in 2026, he'll be able to replace him legally. So, like, how does the Fed play into all of this right now?

[Unknown]

There's just so much to talk about. I apologize. And then I keep rambling in my responses. So, Emma, I'm going to say the same thing I said to Sam a moment ago. Let me pick up some important parts. And the parts you want me to hit on bring me back to. Okay, let's talk about Powell, Trump, and the Fed. Because to many audiences, Federal Reserve independence sounds like an obscure concept and maybe something we don't even like. Here's the very simple logic of it. We could either have presidents make decisions about monetary policy, raising and lowering interest rates, or have independent nerds do it. I think a standard democratic theory view would say, well, presidents are elected and nerds aren't so maybe we should let presidents do it. The problem is presidents can't be trusted. Presidents make choices in president's own political interests. And so Trump has already said very clearly what he wants to do is take an economy and run it into overdrive, which, at one level would be good, we'd make more stuff. But another level would spark inflation almost straight away. This is the same logic that says, when I go to a party with a six pack in my hand, I hand someone else my car keys because I know I'm going to get drunk enough, I'm going to make a really bad decision. What I want is someone else to make the decision for me. That's what central bank independence is. It's politicians understanding that politicians can't be trusted. For the past 50 years, politicians have understood that, and as a result, we've had reasonably low inflation. Now, if there were ever a politician who should not be handed the car keys right now, it's probably the guy in the White House who's already said that what he wants to do is reduce interest rates to a degree that simply makes no sense whatsoever. That's the underlying story. Let me come back and actually tell you what I think this looks like in real life, because we've actually seen this movie before. In Turkey, a populist strongman, Erdogan, came to power. That populist strongman, like our populist strongman, really loves low interest rates. Ours, because he's a real estate developer, Erdogan, because he doesn't understand economics. Arguably, they both have that in common. Erdogan got frustrated with the Turkish Central bank, and ultimately what he did was it was somewhat independent before he appointed one of his loyalists, a yes man. That yes man said, all right, boss, you want low interest rates, even though inflation is not only high, but rising. And he kept interest rates low and inflation went up, up, up, up, up. And it kept interest rates low and they kept rising until inflation hit 86%. Now, you and I don't even know what it feels like to live in a world of 86%, but basically it causes 86% inflation, but basically, it causes enormous dysfunction throughout society, let alone financial markets throughout society. You're running home to spend your money while it's still worth something. Financial markets cause a much broader meltdown. We know what happens when a populist, strong man who loves low interest rates appoints a loyalist. Things turn out very badly. You might say, well, Justin, we're not Turkey. And the thing is, Turkey used to think Turkey wasn't Turkey. So I think this is in fact an utterly genuine risk.

[Sam Cedar]

That risk is going to come to the fore in May. I mean, it looks like he's not going to fire Powell now. Powell, my understanding is, is basically waiting. And then the Fed has a dual mandate of low unemployment at least over the course of 20, 30 years. I mean, 20 years ago they were saying you could not have unemployment this low. It was physically impossible for the country to have unemployment this low. And inflation is around where their, their benchmark wants it to be. He's holding off on cutting rates because he's afraid of this tariff stuff is all in play, right? Trump wants him to, but he, Trump is going to install, I mean, it could be his son for all we know at this point, to be or nominate the chair of the Fed. And I would imagine we're going to see following May, regardless of what the situation is. Multiple rate cuts is there. Can the Fed, the body of the Fed itself, inhibit the chairman from doing this? Do you see indications that they would do that? Because I would imagine it's in Trump's interest to cut rate, to have rates cut as much as possible in June, July of 2026, so that the overheating of the economy is basically in place for the, for the midterm elections. And then who knows what he's thinking after that. But how does, what are the mechanics of that?

[Unknown]

Great, great question. So look, when I talk to non economists, I often think people aren't scared enough. So I try and light a fire under them. If we lose the independence of the central bank, we lose a very, very valuable economic institution and much of our economic future. I may have succeeded a little too much with you, Sam, because you seem terrified.

[Sam Cedar]

It's a lot of things, to be honest with you.

[Unknown]

Let me tell you the good news. First of all, it's not obvious Trump will appoint a charlatan. It's still possible. Let me give you a couple of thoughts there. First of all, whoever he appoints has to be Senate confirmed. And that's actually been a reasonable barrier in the past. Secondly, the first half of the first Trump administration, he actually appointed very reasonable people to the Fed. They're not the people you would appoint, but they're people I would be willing to vouch for their credentials and their way of thinking, if not their values. They're people who are technically sound and unwilling to take crazy political choices just because the boss says so. That was the first half of the Trump administration. The second half of the first Trump administration, he actually then Tried to make two appointments that were genuine lunatics. Stephen Moore of the Heritage Foundation.

[Sam Cedar]

Is he at Heritage?

[Unknown]

I forget where he is.

[Sam Cedar]

He was. I haven't seen much of him as of late, but he was a longtime Heritage foundation guy and sort of a Arthur Laffer acolyte, I guess you could say.

[Unknown]

And not only an intellectual lightweight, but intellectually dishonest. And it turns out he also doesn't pay his Alamo. That's actually what did him in. And then Judy Shelton, who was a gold bug. And gold bugs are a whole different kind of dangerous and so far outside the mainstream of thinking that her views on the economy simply, most economists would say, don't make sense. So, yes, it's capable of charlatans as well. Although in both cases, ultimately, Senate confirmation turned out to be the problem. Let me also tell you why I'm less worried about the next two years. Interest rate decisions are actually made by a committee. The committee's called the Federal Open Market Committee, and there are 12 members on it. And over the next leading up to the midterms, I think Trump gets to make two appointments, one of which would be chair if the chair is a lunatic. The other 11. I am very confident, I know many of these people personally will just not be led by a lunatic. And you cannot just raise and lower interest rates as the Fed chair without the committee's say so. If he appoints two lunatics, they're still going to be out on their own. The more worrying things would be he could appoint someone who's not a lunatic, but actually quite smart and committed to similar goals that he had. And the chairman is basically the boss of the staff. And the staff are a really big part of these decisions because they're technical and difficult. The other thing you could do is you could launch on a pathway to take over the Fed with lunatics. That's not going to play out in the next two years. But it turns out the Federal Open Market Committee, that important committee, is the people appointed directly by Trump, plus the presidents of the regional Federal Reserve banks, which are a very bizarre. I could talk for a month about them, very bizarre institution. But you can only be appointed the president of a regional Fed if the Federal Reserve in Washington says yes. So if he takes over the five board of governors in Washington, then he would open the doorway to appointing more lunatics in the future. That's a much slower timeline that's going to play out over, you know, you'd start to see first steps in a few years and start to really be worried A few years after that.

[Sam Cedar]

That's encouraging. I mean, is since you're in a mood to assuage me the genius act. Like how as we start to see this whole package of, of the supposed stable coins and the crypto legislation that the Republicans are teeing up and it seems the Democrats, or at least a sufficient number of them, are bought and paid for by the crypto industry that they're okay with this. Maybe this is too broad of a question, but how many years until we hit the crypto version of 2008?

[Unknown]

For the first time in our discussion today, I'm going to be brief. I have not seen a single use case for cryptocurrency. Apart from avoiding crime. I don't see how our society is better with it. Equally, I don't see how our society suffers when it goes away. But it is. The fact that they've moved from trying to get libertarians to invest to getting working class moms and dads to be the ones holding the can when the whole thing blows up worries me enormously. For any of your audience who are listening, my very strong advice is stay out. You might miss the up, but I promise you, you'll miss the down as well. And look, I might be wrong, but this is an industry that, as far as I can tell, does nothing.

[Sam Cedar]

I couldn't agree more. But what I'm concerned about is when the treasury starts to support the stablecoins and when vanilla banking starts to get involved in this. Like how much systemic risk. What's the, what's the over. Under. On how long it takes for this to become a systemic risk where, you know, I may not buy any Bitcoin or, you know, Trump Coin or whatever it is, but if all of these institutions of our financial industry is, is, Is, you know, sort of, and we're responsible for saving it, how exposed are we? And we'll let you go in a moment. I know you got. You got other things to do.

[Unknown]

I gotta let you laugh at me. That was my phone. It was my therapist sending you late. Maybe this is a different kind of therapy.

[Sam Cedar]

We're all going to need it. We're all going to need it after this.

[Unknown]

Yes. The key issue is when people lose money. If something teeters in crypto land, does the government stand behind? Turns out, by the way, you just went so nerdy. I feel good about my level of nerdiness, but that was what happened in 2008, which is we made mutual funds whole. If we're not willing to let crypto pirates lose money, then we're the ones who end up burying it. And then that's systemic. If we are. I don't mind letting a few of them go bust. I don't mind letting all of them go bust. They went to the casino. They knew it was a casino. But we have to make sure that the administration responds that way.

[Sam Cedar]

Well, I guess we're gonna see how much backing we provide in the coming months. Justin Wolfers, professor, economics and Public Policy, University of Michigan, and late for therapy. Thank you so much for joining us. Really appreciate it.

[Emma Vigland]

Thanks so much.

[Unknown]

Take care.

[Sam Cedar]

Bye.

[Unknown]

Bye.

[Sam Cedar]

All right, folks, we're all going to head to our relative therapy sessions shortly.

[Emma Vigland]

Also known as the fun half.

[Sam Cedar]

In the fun half, Fun half. Today we'll be featuring oh, so much fun.

[Emma Vigland]

I mean, that is the one. Good.

[Sam Cedar]

Well, I feel better about the Fed stuff.

[Emma Vigland]

Yeah.

[Sam Cedar]

For the time being, hopefully he's correct and that just Trump is just too constrained in this way. But we'll see. I mean, we'll see. I mean, by then, hopefully, you know, we'll see Obama will be arrested and we'll be on the show trials. We'll start in May of next year according to Trump. All right, well, folks, we're going to head into the fun half. Just a reminder, your support is what makes this show possible. You can become a member by going to jointhemajorityreport.com when you do, you not only get the free show free of commercials, but you also get to I am the fun half. And also you get the feeling of walking around going like, I'm supporting a show I like to listen to multiple times a week.

[Emma Vigland]

Right.

[Sam Cedar]

Or even once a week. If we were starting the show today, we would probably do this once or twice a week and you'd be like, oh, this week they had, you know, Justin Wolfers on. That was great. But instead, what we, what we've done, I don't even remember who the guest we had. I can't remember anything anymore.

[Emma Vigland]

Brittany.

[Sam Cedar]

Yeah, we had folks on about the Wagner group and we had folks on about what's happening with the Education Department. And we're not even halfway through. We're officially at halfway through the week right now.

[Emma Vigland]

Yep, yep.

[Sam Cedar]

We got Maddie Hassan coming on Friday to talk about Jubilee and, and not just those debates, but broadly speaking, of course, we'll also probably cover the. The week news tomorrow. You got.

[Emma Vigland]

Well, well, we'll con. What. But we'll wait and make sure we're confirmed a politician may be coming on tomorrow.

[Unknown]

We do have Gene Guerrero confirmed.

[Emma Vigland]

Yes, yes, Gene Guerrero, who you.

[Sam Cedar]

Oh, she's great.

[Emma Vigland]

You had on before, before I joined, like, right before I joined the show. But I wanted to have her back on because she wrote, literally wrote the.

[Sam Cedar]

Book on Stephen Miller.

[Emma Vigland]

It's in my backpack. But yes, it's. I want to talk to her about Stephen Miller because he's like, we don't know enough about this guy who's basically the shadow president.

[Sam Cedar]

The last time I spoke to Jean Guerrero, Steven Miller was still spraying on his hair.

[Emma Vigland]

Right, right, right. Good thing he's abandoned that now and he's just gone with the mole rat.

[Sam Cedar]

Went with the whole shave the head thing.

[Justin Wolfers]

But I thought the surprise guest might have been.

[Sam Cedar]

And I am in it to win it.

[Emma Vigland]

Yes. Well, I do want to feature somebody who is both gay, Muslim, Jewish, black, and all of that on our show in the name of diversity.

[Sam Cedar]

Yeah, the dei. He's the DEI candidate.

[Unknown]

Captain Planet.

[Sam Cedar]

Yeah. Incidentally, want to say open invitation?

[Emma Vigland]

Oh, yeah.

[Sam Cedar]

Evander Cuomo wants to come on. Please just send us an email. Majorityreportersmail.com we will do that.

[Unknown]

You know what?

[Sam Cedar]

I'll reach out to him.

[Emma Vigland]

Yes. If he wants to shore up his left flank.

[Sam Cedar]

As long as he's. He's probably house shopping in Florida right now. But if he's not, it would be great to have him on, on the program.

[Justin Wolfers]

Same goes for global.

[Unknown]

Global infra.infat intifada. And.

[Sam Cedar]

You got to appreciate Eric Adams, that he can be joyful when he's smearing people.

[Emma Vigland]

Right.

[Sam Cedar]

That's one of his best attributes.

[Unknown]

We'd have to pre tape him, though, because according to his Instagram, he's not at work until like 12:1.

[Sam Cedar]

Oh, is that right?

[Emma Vigland]

Why did he tweet something about see you at school?

[Justin Wolfers]

Oh, I didn't see that. I thought I saw the thing where it's like his. His morning routine. And it's like, this is when I get up at 7am to like, you know, make an omelet or whatever. And you can see the clock in the background says 11:00am yeah, right.

[Emma Vigland]

I love that. Yesterday he tweeted, it's going down, period. Meet me after school tomorrow. He's just doing the clown engagement gimmick.

[Justin Wolfers]

Thing that they gave the socials to the young kids and they're trying to get attention.

[Sam Cedar]

To be fair, my dad, when I was a kid, literally set his clock like an hour and 45 minutes ahead so that, like, it was a way that he.

[Emma Vigland]

An hour and 45. Not like the tip. I've heard. Five minutes.

[Justin Wolfers]

I did the five on the oven.

[Sam Cedar]

Clock at home, it would just grow and grow. It was completely insane. I never really understood it.

[Justin Wolfers]

But it was also like a handicap for time.

[Sam Cedar]

I think from his perspective it was like I just gained an extra hour and 45 minutes in the day. I thought it was daylight. I thought it was. I thought it was. I thought it was, you know, 9am but it's actually 7:15.

[Emma Vigland]

But like how this I got all.

[Sam Cedar]

This extra time in the day.

[Emma Vigland]

I don't ever understand how people can trick themselves like that. Because you are always going to know that you're the one that set the clock.

[Justin Wolfers]

Like well, that's when you make it an hour and 50 minutes.

[Emma Vigland]

Remains.

[Sam Cedar]

Or what you do is, I mean, you know, clocks are different these days, but you could just press the button, let the minutes go forward, keep your eyes closed and turn away.

[Emma Vigland]

Right.

[Sam Cedar]

And then just wherever it lands, you have no idea.

[Justin Wolfers]

Or just have it be show you random numbers.

[Sam Cedar]

Yeah. Folks, again, join the majorityreport.com jointhemajoreport.com your support keeps this show surviving and thriving. Also just coffee co op, fair trade coffee. Use the coupon code majority. You get 10% off. You can buy all sorts of great blends or single origin coffees there. Check out our merch. We got those max left hats and also check out the am quickie am quickie.com and we have over 15000 people in our discord [e-mail] it is a huge community. Check it out. Matt. Left reckoning.

[Justin Wolfers]

Yeah, left recording. Last night, seven o' clock we had Alex Salmon of Salon talking about the Roosevelt Hotel, how it was briefly became an Ellis island though it got demonized by the right wing and Eric Adams enclosed it. Also we talked about the AOC stuff in Omar Fateh winning in Minneapolis and Jacob Fry doing a stop the steal style tantrum after he tried to do some shenanigans to undercut the quorum and ended up just losing the entire endorsement despite being in an incumbent. So a big L for the centrist. Big win for the DSA candidate. Check it out tomorrow or tonight or last night. Patreon.com left reckoning.

[Sam Cedar]

Something like that happened at my softball game last night.

[Justin Wolfers]

You lost the quorum?

[Sam Cedar]

No, there was a the. Sometimes we play with pitchers from the same team that's batting. So you got to trust them for fielding right. Because they're playing the field. And there was two outs, man, I'm first. And obviously the ball gets hit back to the pitcher. Pitcher goes to throw it to second base. The shortstop thought. Our shortstop thought he was going to go to first, which is really sort of the play that you do, but nevertheless cover the base. And we have. We have. We have a wide array of characters play in this. And he got very, very angry at the pitcher and just literally walked off the field and got on his bicycle and rode off.

[Justin Wolfers]

We have audio.

[Sam Cedar]

First of all, how dare you? It was a little more dramatic than that, actually. But it reminds me of Jacob Fry doing the same thing.

[Justin Wolfers]

He rode his bike home, too.

[Sam Cedar]

Yeah, exactly. I'm taking my ball and I'm leaving.

[Justin Wolfers]

You're gonna do that?

[Sam Cedar]

See you in the fun half. Three months from now, six months from now, nine months from now. And I don't think it's gonna be the same as it looks like in six months from now. And I don't know if it's necessarily gonna be better six months from now than it is three months from now, but I think around 18 months out, we're gonna look back and go like, wow. What? What is that going on? It's nuts.

[Unknown]

Wait a second.

[Sam Cedar]

Hold on. Hold on for a second. Emma, welcome to the program.

[Unknown]

Fun half.

[Sam Cedar]

Matt blue.

[Unknown]

Fun half.

[Sam Cedar]

What is up, everyone? Fun hack. No. Mickey, you did it. Fun hack.

[Emma Vigland]

Let's go, Brandon.

[Unknown]

Let's go, Brandon. Fun hack.

[Sam Cedar]

Brandon, you want to say hello?

[Justin Wolfers]

Sorry to disappoint everyone. I'm just a random guy.

[Unknown]

It's all the boys today.

[Emma Vigland]

Fundamentally false. No. I'm sorry. Women.

[Sam Cedar]

Stop talking for a second and let me finish.

[Emma Vigland]

Where is this coming from? Dude?

[Sam Cedar]

But. Dude, you want to smoke this? 7A. Yes. Hi. Me. Yes. Is this me?

[Unknown]

Is it me?

[Sam Cedar]

It is you?

[Unknown]

Is this me? Hello, this me?

[Sam Cedar]

I think it is you. Who is you? No sound. Every single freaking day. What's on your mind? Sports.

[Unknown]

We can discuss free markets and we can discuss capitalism.

[Sam Cedar]

I'm gonna go Skyline Libertarians.

[Justin Wolfers]

They're so stupid, though.

[Sam Cedar]

Common sense says, of course.

[Emma Vigland]

Gobbledy cook.

[Sam Cedar]

We nailed him.

[Emma Vigland]

So what's 79 plus 21 challenge?

[Sam Cedar]

Man, I'm positively quivering. I believe 96. I want to say 857-210-855-011. 3 8.

[Justin Wolfers]

911. For instance.

[Emma Vigland]

$3,400. 1900.

[Unknown]

54.

[Sam Cedar]

$3 trillion. Sold. It's a zero sum game.

[Unknown]

Actually.

[Emma Vigland]

You're making me think less.

[Sam Cedar]

But let me say this.

[Unknown]

Poopy. You call it satire?

[Sam Cedar]

Sam Goes to satire on top of it all. My favorite part about you is just like every day, all day, like everything you do without a doubt. Hey, buddy. We see you. All right, folks, folks, folks.

[Emma Vigland]

It's just the week being weeded out, obviously.

[Sam Cedar]

Yeah. Sun's out, guns out. I, I, I don't know.

[Emma Vigland]

But you should know.

[Sam Cedar]

People just don't.

[Justin Wolfers]

Like to entertain ideas anymore.

[Sam Cedar]

I have a question. Who cares?

[Justin Wolfers]

Our chat is enabled, folks.

[Sam Cedar]

I love it.

[Emma Vigland]

I do love that.

[Sam Cedar]

Gotta jump.

[Unknown]

Gotta be quick.

[Sam Cedar]

I gotta jump. I'm losing it. Bro. Two clock. We're all already late and the guy's being a dick. So screw him. Sent to a gulag.

[Emma Vigland]

Outrageous.

[Sam Cedar]

Like, what is wrong with you? Love you.

[Unknown]

Bye.

[Sam Cedar]

Love you.

[Unknown]

Bye.

[Sam Cedar]

Bye.