In a recent segment on his YouTube channel, Tucker Carlson hosted former U.S. Trade Representative Robert Lighthizer to discuss the implications of President Trump’s tariff policies on the American middle class. Lighthizer argues that the economic vitality of the nation hinges on its ability to produce goods domestically, warning that a country reliant on imports risks long-term decline. This thought-provoking discussion raises critical questions about trade, manufacturing, and the well-being of American workers. However, the claims presented warrant a thorough examination to separate fact from opinion. In this blog post, we will explore and fact-check the key assertions made by Lighthizer regarding tariffs, their impact on the economy, and their role in revitalizing the middle class.

Find a fact check of this transcript on CheckForFacts

Transcript:

[00:00:00,519]: Thank you for coming on to explain this

[00:00:02,440]: I mean my one frustration I believe in what the White House is doing

[00:00:07,739]: I don’t think enough Americans understand it so I don’t think there’s anyone better at explaining it than you

[00:00:15,739]: I mean you’re the trade representative

[00:00:19,280]: What about our current system needs to be changed

[00:00:21,700]: Why is it important to do this to institute tariffs to rethink trade

[00:00:47,599]: So that’s the fundamental question Tucker and thank you for having me on

[00:00:51,799]: It’s a pleasure to be here

[00:00:53,959]: I’ve been a fan for a long time

[00:00:56,599]: So I think you have to make a proposition

[00:01:00,220]: Has the system failed

[00:01:01,459]: And to me it’s an emphatic yes

[00:01:03,919]: I think of it in sort of two ways

[00:01:08,980]: One if you think of the way trade is supposed to work you’re supposed to export in order to import

[00:01:18,500]: And then you get the benefit of trade

[00:01:19,980]: You get actually you do what you do best I do what I do best or I do what you do less best

[00:01:26,699]: You export we import and we get the benefit

[00:01:29,459]: We both have higher standards of living

[00:01:31,860]: That’s not really what it’s evolved to

[00:01:34,480]: It’s evolved to now where you have a few countries the United States being the biggest that have an open capital system and an open trading system and other countries have an industrial policy that is designed not to increase the standard of living of their citizens but to gain wealth

[00:01:54,220]: So what they’re trying to do is get wealth in order to get assets in the United States in order to get technology in order to get all these kinds of things that make you wealthy

[00:02:04,540]: So I think of the kind of failure points as being one because this system doesn’t work we have this giant transfer of wealth from the United States overseas and that is in the form of trade deficits

[00:02:20,979]: And the way the system is supposed to work no one should have large trade deficits for long periods of time

[00:02:28,580]: Things can happen you can do it you could have trade deficits with one country surplus with another

[00:02:33,380]: But the notion of a country having hundreds of billions of dollars of trade deficits every year is not how it’s supposed to work

[00:02:40,860]: We now are to the point where our trade billion dollars if you did it the way you or I would do in a sensible way you’d probably be at a trillion or a trillion and a quarter dollars

[00:02:55,940]: So that’s a transfer of wealth from Americans overseas in return for current consumption

[00:03:01,940]: And it has nothing to do with economics

[00:03:04,240]: It’s entirely the result of industrial policy of other people and our being defenseless

[00:03:09,619]: So you ask yourself what does that mean over a There’s a data point called the international investment position of a country and that is how much for us all Americans own throughout the entire world versus how much everyone else owns here

[00:03:29,619]: That number is a negative 23 5 trillion

[00:03:35,220]: And if you said what was it 20 years ago it was probably a negative 3 trillion

[00:03:40,360]: So we have transferred about 20 trillion worth of our national wealth and I would say the future income of that wealth overseas in return for current consumption

[00:03:53,600]: Can you explain that measurement one more time

[00:03:56,839]: It’s what we own here versus what others own here

[00:04:00,580]: No

[00:04:01,600]: So it’s how much Americans own overseas all over the world versus how much everybody else in the world owns here

[00:04:12,539]: And it’s a real calculation

[00:04:13,860]: It’s not something I did right

[00:04:15,020]: So it’s a real statistic

[00:04:16,320]: It’s been around forever

[00:04:17,359]: And what would that include that they own here

[00:04:21,359]: Well I mean so they own 23 5 trillion worth of stuff

[00:04:28,079]: But if you said what is it mostly it’s probably mostly debt

[00:04:32,899]: A lot of it’s debt

[00:04:34,519]: A lot of it is equity in our companies real estate

[00:04:38,660]: Those are the principal things that they own

[00:04:40,940]: Those are the big assets

[00:04:45,179]: Debt is a big one but also ownership and equity a lot of it portfolio

[00:04:50,880]: Now some of it is foreign direct investment where a company actually comes in and buys a piece of land and creates jobs

[00:04:57,739]: But most of it isn’t that

[00:04:59,880]: Most of it is just they own U S equities

[00:05:03,619]: If you think about the United States for most of our history particularly since the Second World War we Americans were thought rich because we own more overseas than people owned in America

[00:05:15,179]: That’s what makes you rich

[00:05:17,019]: Now we are poor to the extent of 23 5 trillion

[00:05:22,140]: Now this point is an interesting one

[00:05:26,239]: In 2003 Warren Buffett did an article on this point

[00:05:30,959]: And he was worried about the trade deficit because it was leading to a negative net international investment position of Americans

[00:05:42,339]: And it was basically transferring

[00:05:43,540]: Well the same thing I am

[00:05:44,760]: When he was worried about in 2003 the number was a negative 2 3 trillion

[00:05:53,220]: So since he sort of raised the red flag on this and said we’ve got to get back to balanced trade the situation has gotten geometrically worse

[00:06:01,920]: So that’s the first condemnation of the current system

[00:06:06,260]: And we can talk at great length about that if you like

[00:06:09,320]: The second is this system has really slowed economic growth in the United States

[00:06:14,839]: So let me give you a point here

[00:06:16,980]: If you think from the 1960 to 1980 and then 1980 to 2000 and 2000 to the year 2000 we had 14 years of plus 3 GDP growth all right reasonable GDP growth

[00:06:37,640]: From 1980 to 2000 again we had 14 years of plus GDP growth

[00:06:44,239]: Since 2000 to now we have had three years

[00:06:47,059]: And one of those was COVID which doesn’t really count

[00:06:49,660]: So the last time we had plus 3 GDP growth was 18 or 19 years ago

[00:06:54,799]: And that coincides with this period of Uber some would say hyper globalization hyper free trade that came on largely in the 1990s

[00:07:08,820]: So we’ve seen the transfer of wealth overseas we’re getting poorer

[00:07:13,299]: We have seen America have slower economic growth

[00:07:19,600]: We’ve also seen a deterioration of our technology of our technological lead

[00:07:25,679]: And there’s a number of ways to think about this

[00:07:27,600]: Can I just ask you a question

[00:07:28,600]: We’ve also seen like a lot of the world’s population move here

[00:07:32,420]: Like the country’s completely changed from 2000

[00:07:34,779]: Well yeah but the demographics is an interesting point

[00:07:38,920]: And I agree with what Vice President Mast talked about the other day about how one of the things about immigration is it does get you dependent on low wages

[00:07:49,779]: And when you depend on low wages it tends to stifle innovation

[00:07:53,179]: But I make – so I agree with that

[00:07:55,420]: But I’m making a little different point

[00:07:57,160]: If you think when you lose manufacturing and you lose manufacturing jobs you also – it slows down your innovation

[00:08:04,260]: There was this notion that well we’ll innovate and others will manufacture but it doesn’t work that way

[00:08:09,359]: Most of the innovation is near the point of manufacturing

[00:08:13,140]: So what are my data points to suggest that we are falling behind

[00:08:18,179]: All right first is we invented the personal computer

[00:08:20,839]: Now we make almost none and none without foreign parts

[00:08:23,880]: We invented the semiconductor

[00:08:26,140]: We make now 8 percent of the global amount

[00:08:28,200]: We used to dominate it

[00:08:29,260]: We could say the same thing about rare earths

[00:08:31,559]: We didn’t invent them but we used to dominate that

[00:08:34,179]: Solar panels we could go through all of these various things nuclear energy all of these things where we have lost – not only lost our lead have basically fallen out of the competition

[00:08:43,739]: But very importantly the Australian Strategic Policy Institute which is this wonderful institute that’s supported by the government of Australia but also private sector people they track 64 what they call critical technologies 64

[00:09:00,780]: The United States is behind China in 57 of the 64

[00:09:05,479]: And these are things like AI and robotics and the kind of things you need

[00:09:09,140]: And if you said well where were we 15 years ago

[00:09:12,960]: We were behind in three

[00:09:15,780]: So you’ve seen this deterioration during this period of hyper globalization or hyper free trade or huge trade deficits

[00:09:22,719]: You’ve seen us actually fall behind technologically

[00:09:25,479]: But the fourth and by far most important ramification of this process is we’ve seen a real deterioration in the quality of life of our working class people

[00:09:41,979]: Yes

[00:09:42,479]: So the United States two thirds of American workers have a high school education only two thirds

[00:09:47,640]: So it’s not like we’re talking about some fringe group on the side

[00:09:51,020]: This is the heart of who we are

[00:09:53,900]: We have seen these people lose their jobs

[00:09:56,940]: We’ve seen their wages stagnant for 25 years

[00:10:00,520]: There was a bump in trade in Trump one but we’re basically back where we were

[00:10:04,960]: You’ve seen them actually have shorter lives

[00:10:08,700]: Angus Deaton and Anne Case did a book called Desolate Despair that demonstrated that these people now live on average about eight years shorter lives because of alcohol and drugs and suicide

[00:10:25,020]: Give you an idea when I was young that differential was probably about a year and now it’s eight years

[00:10:31,760]: We’ve seen they are poorer

[00:10:34,219]: We’ve seen despair increase

[00:10:37,619]: We’ve seen devastation

[00:10:38,619]: You don’t have to drive very far in America to see devastated communities

[00:10:41,940]: All of this the result of this failed attempt at globalization this failed attempt at free trade

[00:10:49,739]: Another aspect of it is we have seen not only our workers being treated very badly but the distribution of wealth in America has gone just like this

[00:10:59,900]: One of the great things about America for me particularly growing up but even you when you’re younger was this notion that we’re all middle class

[00:11:08,440]: Now we weren’t always really but we thought of ourselves that way

[00:11:10,979]: We definitely pretended it for sure

[00:11:12,760]: The very very rich they were them and nobody cared about them and then the very very poor but 80 of us thought we’re middle class

[00:11:22,419]: I went to Catholic schools and we had nobody that was really rich because Asheville Ohio but there were people who were relatively well off people who weren’t and there wasn’t any big difference

[00:11:33,020]: But they all ate at Denny’s

[00:11:34,239]: They all ate at Denny’s

[00:11:35,979]: They all went to the same clubs

[00:11:38,820]: They all played Little League together

[00:11:41,140]: They all thought of themselves as having about the same chance of success which is an important point

[00:11:49,539]: Now what we have for the first time in American history the top 1 has more wealth than the middle 60

[00:11:58,219]: It’s never happened before

[00:11:59,979]: We find kind of combining these thoughts and we get this from Angus Deaton

[00:12:06,859]: For the first time starting in 2000 when this explosion took place in hyperglobalization we find that American children can no longer expect to live longer than and be richer than their parents

[00:12:21,239]: That was what we all thought

[00:12:23,159]: We’re going to be better off than our parents and we’re going to live longer

[00:12:25,799]: That is no longer true

[00:12:28,479]: And I could go through one data point after another

[00:12:31,440]: If you look when I was in high school the top 1 had about 30 times as much wealth as the person in the middle

[00:12:40,739]: Now it’s 72 times as much wealth

[00:12:43,380]: So this seems like a recipe for social instability and ultimately for revolution

[00:12:47,260]: There absolutely happens in other countries

[00:12:49,179]: There’s absolutely no question

[00:12:49,599]: We have this sense that we’re immune

[00:12:51,659]: I don’t agree with that

[00:12:53,780]: And these crises that I’ve talked about this transfer of wealth the technology the slow economic growth but mostly the effect on our working people that is why Ron that Reagan was elected the very beginning of this

[00:13:08,179]: And we can talk of history of that

[00:13:09,239]: And it absolutely is why Donald Trump was elected president

[00:13:12,820]: Reagan had these so called Reagan Democrats that we all remember that

[00:13:18,280]: That was the beginning of those people because that was when we sort of reached the peak

[00:13:22,460]: By the time we got to the 2000s these people were a movement this populist movement

[00:13:27,979]: And they are the reason that Donald Trump is where he is

[00:13:32,299]: And to his credit Donald Trump talked about this and worried about this issue since he was 35 years old

[00:13:40,599]: This is not—this is in my opinion the essence of Donald Trump

[00:13:45,739]: Donald Trump’s essence is we’re getting—he says we’re getting ripped off

[00:13:50,280]: Our workers are getting screwed

[00:13:52,960]: It’s not because they’re lazy or stupid

[00:13:55,219]: It’s because we have a bad system that is hurting them and it’s destabilizing the country

[00:14:00,739]: And all of these are data points that kind of make that point

[00:14:04,020]: And once you realize that you realize you have to do something right

[00:14:09,760]: The purpose of the economy first of all obviously is national security

[00:14:13,419]: But after that it’s to distribute resources and wealth so that most Americans live the best lives they can live

[00:14:22,340]: And we have lost that

[00:14:23,479]: We have just plain lost it

[00:14:27,119]: PAUL It hasn’t been an accident

[00:14:28,260]: It doesn’t feel necessarily like we’ve evolved into this

[00:14:32,200]: It feels like we’ve been guided into this that this is a result of calculations and an ideology that still exists most prominently in the pages of The Wall Street Journal which let me just say is a disgusting dishonest newspaper

[00:14:45,000]: But even if you like The Wall Street Journal they have a very kind of clear ideology which they’ve promoted along with almost everybody in Washington that free trade is the path to prosperity

[00:14:56,840]: And then in fact it’s like a moral imperative

[00:14:58,539]: Like if there’s something dirty about abandoning free trade what is that

[00:15:03,580]: Obviously you know a lot about this since you’ve lived in Washington a long time

[00:15:06,859]: WARREN BUFFETT So I would say first of all that I say The Wall Street Journal they have editorialized against me by name more than 30 times

[00:15:18,080]: PAUL I know they hate you

[00:15:19,700]: WARREN BUFFETT Oh me too

[00:15:20,260]: Yeah so well we have that in common too

[00:15:24,239]: I say they have the diversity the editorial page has the diversity of opinion protocol of somewhere between Pravda and The People’s Daily

[00:15:33,140]: PAUL Yeah

[00:15:33,640]: WARREN BUFFETT It is their view and they keep it

[00:15:38,419]: So you know why did we get to this stage

[00:15:43,419]: To some extent it was kind of misguided

[00:15:46,679]: To some extent it was wealthy people pushing it because it was good for them

[00:15:51,880]: I’m not one who subscribes to the view that it was people trying to hurt America

[00:15:56,179]: I think it was they just didn’t care one way or another whether it hurt

[00:16:00,320]: They didn’t care for example who owned America

[00:16:04,719]: They didn’t care what percentage of our global wealth ended up in the hands of our working people

[00:16:10,520]: Those were not metrics

[00:16:11,780]: What they cared about was price optimization and how much we could consume

[00:16:18,099]: And that’s the opposite of what people like you and I believe in

[00:16:21,580]: Conservatives and a lot of labor Democrats believe we have to worry about values and preserving what’s great in America

[00:16:30,359]: We’re not interested in sort of the materialism of maximizing—optimizing prices and maximizing consumption

[00:16:37,659]: And that’s more or less where that’s—there’s a combination of that

[00:16:41,460]: There’s a combination of this financialization of America of taking profit out right away so that a few people get very rich regardless of the effect on others

[00:16:51,239]: If you think of the evolution Tucker it’s—and we could talk you know from the beginning of time about trade and how it evolved

[00:17:00,840]: But for our purposes you would think of it basically as America really from the early 1800s basically became wealthier and wealthier largely behind the American system and Alexander Hamilton kind of an idea of tariffs and subsidies subsidies in the nature of canals and roads and the like

[00:17:26,140]: But tariffs were a key part

[00:17:28,780]: By 1870 we had started to turn surpluses

[00:17:34,180]: By 1890 we’re the richest country in the world all right

[00:17:37,060]: And it kind of progresses like that

[00:17:38,800]: And we can talk about that back and forth

[00:17:41,699]: And those were almost all Republican presidents during that entire period only two Democrats during that entire period between Lincoln and Franklin Roosevelt

[00:17:52,060]: And basically tariffs were a key tool and there were ups and downs in that

[00:17:55,819]: And we can talk about that if people are interested

[00:17:57,599]: But we got to the Second World War and then we had a different challenge

[00:18:03,839]: We had to rebuild Europe

[00:18:04,979]: We wanted to rebuild Japan for stability

[00:18:07,660]: We wanted to fight communism in the Soviet Union

[00:18:10,339]: These were our motivations

[00:18:12,300]: And so at that point we needed a new system and they developed this new trading system

[00:18:18,699]: And the trading system was sort of based on the notion of we’ll all reduce barriers we’ll all do better over a period of time

[00:18:27,660]: I would say that at times it was a successful idea at times it wasn’t a successful idea

[00:18:34,219]: But by the time we got a few several decades into it we started seeing people being more and more industrial policy

[00:18:43,020]: And by the 1970s into the late 1970s we started to see our situation get worse

[00:18:50,260]: We started having trade deficits

[00:18:51,780]: You’ll recall that Nixon in 1971 put tariffs on the whole world in order to decouple from gold and we can talk about that if people are interested

[00:19:00,160]: But there were a lot of things that were sort of signals

[00:19:02,579]: And that was kind of the peak

[00:19:05,219]: By the time we got to Ronald Reagan as I say there was already a loss of a lot of There was an unsettling among our working class people which as I say unlike a lot of places it is us

[00:19:17,140]: It’s 70 65 70 percent of it it is us

[00:19:20,939]: And then you found yourself the Berlin Wall fell

[00:19:25,699]: There was this notion of the end of history that for now on everything is going to be better and we’re all going to be democracies and we’re all going to have open markets and there’s all this greatness

[00:19:35,920]: You can remember

[00:19:37,479]: Frank Fukuyama and other morons

[00:19:40,199]: Yeah yeah they’re right

[00:19:41,479]: So then you found yourself with Clinton in the end of Bush

[00:19:44,920]: It’s not because I don’t want to be totally partisan the end of Bush 41 Herbert Walker Bush and then into Clinton

[00:19:51,420]: And we have what I call the like the trifecta of stupid

[00:19:54,760]: All right we do NAFTA

[00:19:57,420]: And we do the WTO the Uruguay around that

[00:20:02,459]: And then the dumbest of them all we give most favored nation treatment to China

[00:20:08,579]: And those things are done more or less in the times

[00:20:11,800]: So Clinton for the most favored nation status that was something that Clinton set it up but Bush signed it

[00:20:19,339]: Is that correct

[00:20:20,780]: No it passed under Clinton

[00:20:24,160]: So this is an interesting fact

[00:20:27,780]: In like 1997 I did an article for the New York Times

[00:20:32,579]: And you’ll recall during the second Clinton election there was this talk about Indonesian money came into Clinton

[00:20:42,439]: I remember very well

[00:20:44,239]: Well I— Johnny something or other

[00:20:45,500]: Exactly

[00:20:46,260]: Was it at the Commerce Department

[00:20:47,479]: Yeah yeah

[00:20:48,079]: I did an article which the New York Times published

[00:20:51,699]: It sort of said well what’s this about

[00:20:53,760]: This is not Indonesian money

[00:20:55,260]: It’s Chinese money

[00:20:56,880]: What does China want

[00:20:58,300]: They want most favored nation treatment and they want to get into the WTO

[00:21:01,400]: And if they do there won’t be an American job that’s safe

[00:21:03,900]: So this is in 1997

[00:21:06,380]: Fast forward you have this vote

[00:21:09,540]: Clinton is pushing it

[00:21:11,219]: By the way it passes with more Republicans than the Democrats

[00:21:14,060]: Republicans are worse on this at that time

[00:21:17,140]: I believe the Wall Street Journal again

[00:21:17,619]: A lot of them have kind of learned

[00:21:18,520]: Yeah yeah

[00:21:19,900]: And then we have these things pass

[00:21:21,640]: So we have this trifecta of stupid as I call it

[00:21:24,680]: And then we have 5 million manufacturing jobs lost

[00:21:27,839]: You just see jobs lost

[00:21:29,500]: Wages are basically not going up in real term sense then

[00:21:33,300]: You know the rich get richer and the poor get poorer

[00:21:35,099]: And a lot of these very bad outcomes for working people I would say for the country generally you can say came at that time

[00:21:43,099]: Now if you say well was the system deteriorating before then

[00:21:47,040]: For sure it was

[00:21:47,900]: But this was like somebody just putting on steroids and acted like—I mean the only thing that they missed about the evolution of economics was human nature right

[00:21:57,619]: Other thing else they got right

[00:21:59,000]: They just missed human nature

[00:22:00,760]: As always

[00:22:01,280]: Yeah

[00:22:01,900]: So then you saw very bad things happen over a long period of time

[00:22:08,079]: You got to the point where you had—at 2016 you had President Trump as I say at that notion since he was 35 since he was a kid

[00:22:21,859]: And he kind of gets the populist movement he’s elected

[00:22:25,000]: And then we have you know whatever happened in 2020 a COVID thing that ends up affecting our election

[00:22:31,099]: And now we are again because we changed in Trump 1 0 or whatever the computer people say

[00:22:41,000]: We changed the way people think about these things

[00:22:44,359]: And they didn’t really change back much in Biden

[00:22:47,339]: To Biden’s credit I think some of his people were very good

[00:22:50,780]: But overall they didn’t make a lot of decisions to make better what we did

[00:22:55,339]: But they didn’t make it worse

[00:22:56,619]: And now we’re in Trump where we’re in a position to actually make substantial changes

[00:23:03,280]: And I know that’s what you want me on here to talk about

[00:23:05,619]: But the most fundamental thing is the system has failed America

[00:23:11,359]: Generally and it’s failed our working people dramatically

[00:23:16,920]: And that’s been going on in an acute state for at least 25 years

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[00:24:35,599]: When life expectancy in an advanced country goes backward I don’t think there’s any clearer sign of an emergency

[00:24:44,660]: I mean that’s the one thing you can’t fake when people die

[00:24:47,820]: We are the only G7 country that has a life expectancy of under 80 years

[00:24:56,580]: And supposedly we’re the richest country in the world supposedly

[00:25:01,420]: Now there’s a lot of things contributing to that

[00:25:04,000]: Everyone sees it all their own way and there’s a lot of things contributing to it but But it’s an emergency

[00:25:08,800]: It’s an absolute crisis

[00:25:10,080]: And I’m telling you this divergence between this income inequality is another real real emergency

[00:25:20,160]: I couldn’t agree more

[00:25:20,820]: It changes the kind of country we live in

[00:25:23,680]: It’s not the kind of country I don’t care whether you’re well off or not it’s not the kind of country you want your children living in

[00:25:30,480]: It’s not America

[00:25:31,980]: And we have to do something about it

[00:25:34,280]: And this is I believe this is the motivation for Donald Trump

[00:25:38,580]: This is the motivation for the people in his administration who are informed on these issues

[00:25:44,480]: Some of them obviously deal with other kinds of issues

[00:25:47,420]: It’s bad for everybody

[00:25:48,580]: It’s actually bad for the rich as well as the poor when you have a stratified class system like we’re getting which didn’t exist

[00:25:56,220]: And by the way spend three weeks in Australia which is a country with a lot of problems but it’s still a middle class country

[00:26:01,120]: And you can feel it in the way people talk to each other in their attitudes

[00:26:04,480]: We’re all sort of in this together

[00:26:06,160]: You do not get that sense in a pyramid shaped social structure at all

[00:26:11,160]: And that’s the biggest change of my lifetime is the end of the middle class as a majority and the end of the egalitarian spirit that defined America that Anglo egalitarianism which is not a feature of other countries

[00:26:22,980]: No I couldn’t agree more

[00:26:25,020]: It makes me hate the people in charge for ignoring this stuff

[00:26:28,420]: So what do you do about it

[00:26:33,240]: So the first thing you do is you acknowledge you have a problem

[00:26:36,300]: Second thing you do is you put your finger what is the nature of the problem

[00:26:39,120]: The problem is industrial policies of other people

[00:26:43,760]: Now this is a really important point Tucker

[00:26:46,820]: The president and some others will say the tariffs are different

[00:26:51,620]: They’re ripping us off on tariffs

[00:26:54,120]: And for sure that’s true

[00:26:56,000]: But in terms of what is causing the harm to the global economy I would say but particularly to America the most important thing is not tariffs

[00:27:07,340]: Tariffs are the most visual thing the easiest to see but the real problem goes far deeper than that

[00:27:14,920]: So that if you end up with equal tariffs you will still have a catastrophe for America

[00:27:19,800]: It will not resolve the issue at all

[00:27:21,380]: So what are the things in industrial policy that tilt the scale against we would say open markets and free trade and fair competition

[00:27:31,960]: All right they are everything from the banking system

[00:27:35,240]: So in China they have a banking system

[00:27:37,000]: They tell you to put your money in the bank

[00:27:38,380]: They make you have low interest rates

[00:27:40,120]: They take the money

[00:27:41,460]: They can loan it to manufacturing at what we would consider to be a below market rate and that encourages manufacturing

[00:27:48,500]: And they’ve done that

[00:27:49,400]: They’ve increased those loans from 60 billion a few years ago this is according to the New York Times to almost 700 billion in the last year or so for a year

[00:28:03,280]: So it’s the banking it’s the labor system

[00:28:05,560]: If you have a system that keeps labor from getting its fair share of the pie you’re keeping wages down because of the statutory system

[00:28:17,060]: An example of that is this Hukou system in China where you can’t really move around and be part of the system and get wages just kind of stay where you were born

[00:28:27,460]: But there are lots of other ones not allowing unions not allowing organization not I mean there’s a lot in the labor law but it’s subsidies

[00:28:38,680]: It’s denying market access

[00:28:40,820]: It’s fake non scientific standards to get products

[00:28:45,840]: It’s value added tax

[00:28:47,620]: It’s a tax system

[00:28:48,840]: Can you explain that a little more fake standards

[00:28:51,800]: So it’s one of the big things we have

[00:28:54,560]: Fake is see that just shows you that I’m a Trump person right

[00:28:57,720]: So a person a more sensible person than me would say non scientific sort of standards

[00:29:05,120]: So I mean you could take a case and this is like a simple case how long should a tractor have to break before it stops

[00:29:14,140]: And you could say okay fine

[00:29:17,220]: Safety is and these are making these numbers up safety is 40 feet

[00:29:21,880]: And maybe the Europeans would say well it’s gotta be 10 feet

[00:29:24,900]: We have to be very safe

[00:29:26,740]: And the net of that would be to eliminate products coming in that kind of a standard

[00:29:32,080]: So it’s or health and safety

[00:29:34,440]: For example the Europeans saying chickens shouldn’t come in if you chlorinate it

[00:29:39,260]: That is to say when you’re done you put chlorine on it to make sure there’s no micro organisms

[00:29:45,640]: They would say well that’s unsafe

[00:29:46,880]: So it’s sort of non scientific standards like that

[00:29:50,420]: And there’s a lot of them

[00:29:51,200]: And which are in effect trade barriers

[00:29:52,720]: They’re absolutely trade barriers

[00:29:53,580]: Everything I’m talking about either basically shifts national wealth from consumers to manufacturers to give them an edge

[00:30:05,460]: And the tax system currency manipulation there’s all these things

[00:30:10,680]: These things are the point I’m trying to make is are multiples in terms of importance versus tariffs

[00:30:17,300]: If we have equal tariffs with everyone in the world at zero for example we won’t have a middle class we won’t have manufacturing because all these other factors will give them this unfair uneconomic advantage

[00:30:31,320]: And we can go through and the president to his credit in his truth where he laid this out he said it’s not just tariffs

[00:30:38,980]: It’s all these other things

[00:30:42,360]: And the Jamison Greer of the USTR is looking at all these other things

[00:30:47,680]: But when we think of the kind of migration for me let me just say was like okay we need free trade

[00:30:55,660]: And then you said okay we need fair trade

[00:30:57,980]: The reality is you can’t get fair trade because there’s too many ways to twist it

[00:31:04,340]: What we really need I’ve evolved to is balanced trade

[00:31:07,820]: We need a system that enforces kind of trade balance not with countries but globally

[00:31:14,980]: Countries shouldn’t be able to be huge surplus countries year after year like China of course being the worst example but also Germany

[00:31:22,360]: Ireland is evolving to that

[00:31:23,760]: And there’s a bunch of other countries we could talk about

[00:31:27,120]: Countries shouldn’t be able to do that

[00:31:29,300]: And so you say well how do you achieve that

[00:31:32,180]: You really need to put in place I would say some kind of tariffs to offset this fundamental unfairness

[00:31:38,540]: You’re not just offsetting their tariffs

[00:31:40,760]: Europe’s 10 on autos we’re doing half a cent

[00:31:43,380]: If Europe went to zero we still wouldn’t sell very many cars in Europe

[00:31:46,700]: We just wouldn’t

[00:31:48,260]: Our companies basically make small trucks

[00:31:50,280]: They don’t need them there

[00:31:50,900]: I mean it’s just there’s a lot of reasons why that wouldn’t happen

[00:31:53,580]: But what you need you can’t have countries have huge trade surpluses over long periods of time

[00:31:59,960]: You have to enforce and you have to penalize countries that have surpluses all the time and let countries that have deficits all the time get back to balance

[00:32:11,040]: If you do that you then get the benefits of trade

[00:32:13,680]: So how do you get to balanced trade

[00:32:15,940]: There’s basically three ways you can get to balanced trade

[00:32:19,520]: One is the way that Warren Buffett talked about in this article and it’s a wonderful article

[00:32:26,240]: I recommend anyone to read it

[00:32:27,680]: I would just Google Warren Buffett Squanderville because he talked about Squanderville and Thriftville

[00:32:32,480]: And it’s a short article it’s very nice

[00:32:34,200]: 2003

[00:32:35,080]: Yeah it was 2003

[00:32:36,700]: And he says what we should do is have export import certificates

[00:32:42,840]: So in order to import you need an export certificate

[00:32:45,600]: So you want to bring in T shirts you go to a steel mill and say okay fine you export it I’m gonna buy that

[00:32:50,640]: And that would get you to balance

[00:32:52,620]: And I would certainly support that

[00:32:54,960]: Another way you could do it is you could put and this is a little more complicated

[00:32:59,780]: You could put a tax on the money that comes back this 23 and a half trillion dollars this trillion dollars that comes back every year where they buy US assets you could tax that

[00:33:10,080]: So that really wasn’t worth a dollar

[00:33:11,780]: It was only worth 80 cents

[00:33:13,220]: In that case there would be less incentive for people to run up these buses

[00:33:17,360]: That’s called a capital access fee

[00:33:19,140]: And there are people that have proposed that and that also would work

[00:33:22,280]: And then there’s tariffs

[00:33:25,060]: So I prefer tariffs one because people understand them

[00:33:30,520]: Two every country in the world has a system set up to deal with tariffs right now

[00:33:34,220]: They all have the legality they all have the process of how to do it

[00:33:39,520]: Three they’re flexible

[00:33:41,880]: You can move them around based on need to get to your objective of balance

[00:33:47,580]: But any three of those things would work

[00:33:49,940]: And I just think and obviously the president thinks that tariffs are the simplest easiest most understood way to kind of do it

[00:33:59,160]: And the objective has to be to offset all unfairness and to get moved towards over a period of time move towards balance and ultimately have balanced trade

[00:34:09,580]: If you had balanced trade you’d have another trillion dollars worth of domestic GDP right

[00:34:15,140]: I mean it would be a huge boom and most of it would be or a lot of it would be in manufacturing and things spun off by manufacturing

[00:34:21,000]: And that’s what the president is trying to do

[00:34:23,280]: He’s trying to get us to use tariffs to move towards balance to get a better distribution of wealth within our country so that working people end up with a higher percentage of the wealth

[00:34:34,800]: And we have this economic boom that’s gonna come by from reducing that huge perennial trade deficit

[00:34:45,240]: I think a lot of people some people anyway in Washington for sure have given up on the idea that America can be a manufacturing power once again

[00:34:55,620]: So I think that’s fundamentally wrong

[00:34:58,420]: So the first thing they would say is manufacturing doesn’t matter

[00:35:03,620]: People still say that

[00:35:04,460]: Oh there are people yeah we’re Outside of AEI or

[00:35:07,720]: No well you’d have to you’re in a pretty small group of people that have everything in common except sense

[00:35:15,820]: So this is a view we people who think like I do and I believe the president’s in this category really think manufacturing is essential

[00:35:30,800]: One the wages are better the benefits are better people stay in the jobs better for that group of people that are not gonna be brain surgeons and astronauts

[00:35:45,260]: Secondly if you look at manufacturing it employs about 80 of American engineers

[00:35:54,660]: It accounts for about 90 of private sector R D

[00:35:59,980]: It disproportionately accounts for productivity gains

[00:36:06,060]: So if you go right down the kind of things you use to measure your economy more and more manufacturing throws off about eight or nine jobs for every job in manufacturing and these are good jobs

[00:36:19,300]: So and finally you need manufacturing to have innovation

[00:36:25,100]: You need manufacturing to defend your country

[00:36:28,960]: Without manufacturing and that doesn’t just mean on this national security issue doesn’t just mean being able to make bombs and submarines it means being able to make steel and automobiles and batteries and solar panels

[00:36:43,280]: You have to make all those things to have and semiconductor chips to wage war or to deter a war from happening which is probably really our objective

[00:36:54,140]: So these people who think we’re post industrial are just fundamentally wrong

[00:37:00,980]: And once again they don’t really it doesn’t bother them who owns America it doesn’t bother them the distributions in the country and it doesn’t bother them that we’re fumbling behind technologically

[00:37:12,560]: What they’re thinking about is yes but we’re optimizing consumption

[00:37:16,820]: If it doesn’t bother you who owns the country if it doesn’t bother you what’s happening to the people who live in the country then I think it’s fair to assume you have no love for the country

[00:37:26,680]: How did people who have no love for the country end up running the country

[00:37:30,740]: Well that’s a good question one on which I think you and I have a lot of agreement but on which I profess less expertise than I do on other things

[00:37:40,820]: It is I think a lot of these people well some of them just don’t like the country because of our history for various they’ll take up a data point in our history and say that means we’re bad

[00:37:52,980]: A lot of them take it for granted you know

[00:37:57,400]: But once again I’m not an expert on that

[00:38:01,080]: I certainly agree with your conclusion

[00:38:05,540]: It’s troubling to me people who are globalists not only economic globalists but sort of geopolitical globalists

[00:38:15,040]: They don’t realize that there’s a force that wants to take over the world

[00:38:18,580]: Indeed there are lots of them

[00:38:19,960]: And those forces if they succeeded would be very bad for America

[00:38:24,240]: A lot of us who were sort of united in this Cold War particularly in the early years it kind of brought the country together

[00:38:32,800]: We realized we were in a Cold War

[00:38:34,620]: Indeed I think we’re in a Cold War a second Cold War now but I think there’s just more fifth columnists than there used to be

[00:38:42,240]: A lot more a lot more

[00:38:48,060]: How tiny a minority of economists believe what you believe

[00:38:53,440]: Like how out of step are you in Washington right now

[00:38:57,080]: Well I mean so I basically people say why do I think the way I think

[00:39:02,320]: And some people will say it’s because you’re from Asheville Ohio which was one of the places that was decimated

[00:39:06,720]: One of a million

[00:39:08,340]: What did they build there in your hometown

[00:39:10,140]: So Asheville was a great town

[00:39:12,520]: It was a little town between Cleveland and Erie Pennsylvania

[00:39:17,600]: It was a port town

[00:39:20,600]: They had steel

[00:39:22,960]: They didn’t have steel mills but they had steel fabrication

[00:39:26,340]: They made a lot of auto parts

[00:39:28,380]: Indeed at one point the fiberglass body of the Corvette was made in Asheville one of the famous things about us

[00:39:39,300]: They brought in ore from the Great Lakes and then trained it down to Pittsburgh where they made steel

[00:39:46,620]: Obviously there was agriculture a lot of agriculture in the area a lot of machine tools those kinds of things

[00:39:53,460]: It was the sort of stuff that was really really hit first with the Japanese wave that came on and which wave was one of the other motivating things in President Trump’s mind because that was the first thing that we all complained about was Japan and Japanese cars and the like and that it was all Japanese manufacturing

[00:40:19,420]: And once again I just want to say and I love Japan I’m not anti Japanese at all but that had nothing to do with economics either

[00:40:27,240]: It was they kept their currency low they had an industrial policy to subsidize all this and then we sat here and they took our jobs

[00:40:35,800]: And now we’re seeing that on a far greater scale

[00:40:39,780]: What’s your hometown like now

[00:40:42,240]: Oh you know I cover this in the book

[00:40:46,620]: I have to be careful because I love my hometown but the poverty rate’s probably 35 or 40 yeah the college graduation rate’s probably 15 or 20

[00:40:58,540]: And by the way this is not like we’re the bottom of the pit this is across the country

[00:41:09,680]: The whole United States

[00:41:11,060]: It’s everywhere you go you see these kinds of communities

[00:41:14,020]: These were wealthy people

[00:41:16,120]: I mean they weren’t wealthy people they were people who were well off

[00:41:20,060]: A person could have a job own a car pay off their house and support their family

[00:41:26,500]: And now they can’t do that anymore

[00:41:29,720]: And there’s this kind of notion that well other jobs have come back

[00:41:34,800]: And indeed in many cases there have and there was just a study by Gordon Hanson out of Harvard and some other people other jobs did come back but they were jobs at the lowest level of healthcare and the like

[00:41:47,400]: In other words did employment come back

[00:41:50,380]: Yeah but the people went from having the kind of job that I described one that you could support your family and be proud of to one where you really couldn’t

[00:42:00,200]: So one of the first things that prisons do to dehumanize the inmates is take away their privacy

[00:42:04,120]: Their frequent and random cell checks body searches they have their mail and phone calls monitored

[00:42:10,140]: So if you take away someone’s privacy you take away that person’s freedom

[00:42:15,020]: Here’s the thing you don’t have any privacy when you go online probably online most of the day

[00:42:19,660]: And everything you do is being monitored and sold by data brokers recorded

[00:42:25,640]: That’s like a random search behind bars

[00:42:28,820]: All of this is done in an attempt to profit from you but it also has the effect of controlling you what you believe who you vote for

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[00:43:24,100]: And being proud of your job is a huge part of the formula for a healthy strong stable nation

[00:43:31,180]: If there’s a huge difference between making something and being a mortgage broker I’m sorry

[00:43:35,600]: Just look at the dignity of work is what is the key

[00:43:41,080]: But useful work creative work

[00:43:43,440]: Useful productive work useful

[00:43:45,420]: And what I always say Tucker is we need a country where parents are hopeful for their children but where children are proud of their parents

[00:43:55,920]: And we’re losing that

[00:43:57,760]: We need that

[00:43:59,200]: We need families where people work and do productive good work and they’re proud of the work and they feel better about themselves and they project that to their children and to the community to the Little League to all these kinds of things

[00:44:16,780]: These people who worked in these factories in Ashtabula when I was growing up and some of them and some farmers they were proud hardworking people who at the end of the day said my dad is this you know what I mean

[00:44:29,560]: It was a proud healthy thing

[00:44:32,540]: What did your dad do

[00:44:33,680]: Yeah my father was a doctor

[00:44:35,840]: Wow

[00:44:36,280]: Yeah my father’s an interesting story

[00:44:38,540]: The Lighthizers of course there’s a lot of us that aren’t Lighthizers right

[00:44:42,520]: The Lighthizer strain came over to the United States in 1748 and there was a guy named George Lighthizer who came out

[00:44:50,240]: He was an illiterate from what is now Germany

[00:44:53,200]: He fought in the Revolution

[00:44:55,420]: He was two years older than George Washington so he was an old guy

[00:45:00,100]: He fought at Trenton

[00:45:01,320]: He was at Valley Forge this guy

[00:45:04,740]: At Princeton he was on the line with two of his kids who were quite young all three of them on the line together

[00:45:12,960]: He got out after three years

[00:45:15,080]: Of course by this point I don’t know what he would have been maybe 48 which was an old old person

[00:45:19,720]: The kids stayed on and fought all the way through to Yorktown

[00:45:26,400]: So fast forward multiple generations and it’s a whole interesting fewer generations than you think and I’ll tell you I’ll mention that because it’s sort of a quirky thing unrelated to what we’re talking about but sort of interesting

[00:45:38,080]: But you find my father and his brother after that 100 200 and some years up here were the first ones to go to college and both of them went to college and ultimately to medical school

[00:45:52,820]: My father graduated from college at 29 having worked in the steel mills before he went to college and then finally ended up graduating at the University of West Virginia and then NYU Medical School

[00:46:04,480]: So it was like the American dream

[00:46:07,460]: How did he wind up in the town

[00:46:09,780]: How did he in Ashtabula

[00:46:11,160]: Yeah

[00:46:11,500]: You know he was they were from Ohio

[00:46:15,720]: They were from the other side of Ohio

[00:46:17,880]: I think he knew some people in Ashtabula

[00:46:20,120]: This would have been you know in the mid 30s right 1930s

[00:46:27,360]: But in terms of this it’s just a quirky thing

[00:46:31,440]: So my grandfather’s grandfather all right

[00:46:35,780]: No I never knew my grandfather on my father’s side

[00:46:38,660]: My grandfather’s grandfather fought in the Battle of Baltimore

[00:46:43,720]: That’s incredible

[00:46:45,140]: In 1814

[00:46:46,500]: So my grandfather’s if you think of it it’s just like you know what it is a bunch of older guys having kids like one after the other

[00:46:54,600]: But it’s like one of these kind of weird I tell people they’ll think well that can’t possibly be true but it’s in fact true

[00:46:59,700]: My grandfather’s grandfather and that guy who had half brothers who fought at you know in the American Revolution

[00:47:11,140]: It’s just like literally that

[00:47:13,520]: It’s kind of a crazy thought

[00:47:15,080]: Are there any Lighthizers left

[00:47:16,700]: Yeah you know there are

[00:47:17,740]: In the town

[00:47:18,820]: No there are none in the town now

[00:47:21,100]: There’s none in the town

[00:47:22,200]: Did you go to high school there

[00:47:23,420]: No I didn’t

[00:47:24,260]: I went away to school outside of Cleveland

[00:47:27,300]: I went to a Catholic boys school outside of Cleveland called Gilmore Academy High School

[00:47:30,820]: The guys you grew up with are any of them still there in the town

[00:47:33,320]: Yeah there are some

[00:47:34,360]: Not a lot but there are some

[00:47:37,980]: It’s a different world you know

[00:47:40,360]: And as I say if it was just Ashtabula who would care

[00:47:44,480]: But it’s not just Ashtabula

[00:47:45,780]: We’ve got to care about every American

[00:47:46,740]: It’s across the country it’s like this

[00:47:49,100]: You go to Cleveland you can’t go to these major cities

[00:47:52,940]: It’s Chicago it’s you know it’s Omaha

[00:47:55,320]: As you go to these cities and you say it shouldn’t be like this

[00:47:59,080]: And the kind of notion Tucker was that we were sort of taught at a period well it’s you know the people were lazy or they were in unions and that was bad or that the managers were bad

[00:48:11,860]: And none of those were true

[00:48:13,180]: It was the result of an economic policy largely in other countries and a defenseless kind of foolish notion of benign neglect in America

[00:48:26,300]: And all of these bad outcomes are the result of this

[00:48:29,820]: And it’s and other things I don’t want to simplify it too much but it’s a sad thing

[00:48:35,220]: And we now have a chance to turn it around

[00:48:39,200]: And is that going to create disruption

[00:48:41,500]: Of course it’s going to create disruption

[00:48:42,620]: There’s never been great change that didn’t create disruption

[00:48:46,440]: But the price which I don’t think will be great will be dwarfed by the benefit if we have people working class people in the middle class again and hopeful and dignified and staying married and innovating and doing the kinds of things that America needs

[00:49:08,974]: There’s nothing I want more than that for the country

[00:49:12,694]: And you can hear the bitterness of my voice as someone who spent his life in D C but I just want to say once again that all of these changes were defended and explained by a whole field of academic study and the propaganda that it supported coming from Washington the free market think tanks Cato AEI especially basically tried to tell you for 40 years as you watched your country die that this was all good

[00:49:38,954]: And I do think they should be publicly shamed for that if not held accountable and so on and so forth

[00:49:43,614]: In some cases it’s a combination and then I want to get back to this question about economists

[00:49:51,074]: At some point it’s a combination of that and corporations funding it

[00:49:56,934]: Well of course they were just the instruments right

[00:49:59,674]: Who literally benefit from it

[00:50:01,594]: And you’re like holy cow why won’t and then you have to try to chase that through the political system

[00:50:07,714]: And so you end up with the Chamber of Commerce of the United States in favor of these things that are quite harmful to the people that I care about and that the president cares about

[00:50:18,814]: And they’re not against these things because they help those people

[00:50:23,454]: That’s just not a function

[00:50:25,034]: They’re against it because the elites the powers that be that are benefiting from the system object to them

[00:50:33,114]: Now on your question about economists there are a growing number of economists who see this problem

[00:50:43,034]: They don’t necessarily agree with me on the solution right

[00:50:46,354]: But if you see you know Angus Deaton is one who would say we have to reevaluate whether the costs of this thing called free trade were worth the benefits

[00:50:58,974]: And that’s an important first step

[00:51:01,234]: There’s Paul Romer another Nobel laureate has the same thing

[00:51:04,374]: But so you can go through and you can find various ones

[00:51:06,854]: There’s a guy named Michael Pettis who’s a Carnegie guy who’s thought these things through and he wrote a book 10 years ago called Trade Wars or Class Wars with a guy named Matthew Klein

[00:51:21,394]: And it’s sort of you know so there is some movement but I don’t want to suggest that it’s a light at the end of the tunnel

[00:51:29,854]: It’s maybe a prick you know a thousand miles away

[00:51:35,494]: But I’m you know I’m hopeful that economists I’ve had several of them tell me well you’re wrong but you at least realize that you know we at least agree with you that things aren’t good

[00:51:47,894]: You know so there’s the beginning of people starting to see it

[00:51:51,474]: I mean the city had a collective heart attack when you became United States Trade Representative

[00:51:55,774]: I think that’s a fair statement

[00:51:58,394]: The city and the business community

[00:52:01,234]: Yeah the business community

[00:52:05,314]: So you said there were if you take a system that’s been in place for generations which the current one has been even if it doesn’t work well even if it hurts your country changing it is still or changing anything that’s been in place a long time is still a major lift and it has you know turmoil that accompanies it

[00:52:26,194]: So can you just be more specific about what sort of turmoil you anticipate as this administration puts into place this new system

[00:52:33,574]: First of all I have complete confidence that the president will do what he said he’s gonna do right and unlike a lot of politicians he ran on like real substance and big ideas and this is probably the biggest of the ideas that he ran on and I think he’s gonna follow through on his promises because that’s the most important thing

[00:52:57,074]: The worst case would be that he doesn’t

[00:53:00,734]: So what you have to do is put in place tariffs as I say to offset not just tariffs

[00:53:07,294]: That’s a tiny thing

[00:53:08,594]: I just keep going back to this point because it’s so fundamental

[00:53:11,694]: The problem is not just foreign tariffs

[00:53:14,094]: That’s a tiny part of the problem but to offset this unfairness

[00:53:19,934]: So he has to put those tariffs in place

[00:53:21,514]: When you do that I do not believe you’ll have inflation and we should talk about that in a systemic fundamental way but you will have people who have supply chains that are gonna have to make adjustments

[00:53:33,694]: You’ve got some things that may go up in price for some period of time and all these kinds of things will have an impact on people in daily life but I think it’ll be short termed

[00:53:51,674]: I call them disruptions

[00:53:52,774]: I think it’ll be short termed

[00:53:54,054]: I don’t think it’ll lead to systemic inflation and I think that people say well what should a businessman do

[00:54:04,694]: And I say the smarter businessmen and businesswomen are gonna figure it out right

[00:54:10,694]: And they get paid a lot of money to do that and they’re gonna say here are the rules

[00:54:15,734]: Just on that point I’ve had business people really smart business people when I would explain this problem and they would say Bob it’s the government’s responsibility to set up the rules

[00:54:28,154]: I’ll figure out a way to make money in the rules

[00:54:30,494]: That’s my responsibility but I shouldn’t be doing this social stuff

[00:54:33,474]: That’s not my job

[00:54:34,234]: My job is to make whatever widgets and to make them profitable and employ my people and I think that’s kind of an important point

[00:54:42,954]: It’s President Trump’s responsibility now

[00:54:45,254]: He’s the president to set in place a system where these good results for our people will come out and I think he will

[00:54:53,654]: So you’re gonna have to have tariffs to offset this basic unfairness

[00:55:00,134]: That’ll lead to some disruption

[00:55:02,434]: Over a reasonably short period of time I think you’re gonna see this manufacturing renaissance these new jobs

[00:55:10,394]: Wages go up right

[00:55:11,534]: This notion that we’re not productive because our wages are going up

[00:55:15,514]: I’m like I had this conversation with someone in the White House early on and this was in the first term and he was concerned about wage inflation and I said to him I said this is by the way a person We’re paying Americans too much

[00:55:28,694]: Yeah exactly

[00:55:29,594]: This is like a person that had his own plane and I’m sitting I said You can guess who it was

[00:55:34,494]: Yeah I said we haven’t had a raise in the middle class in 15 years and you’re worried about wage inflation

[00:55:42,954]: This is a man with a plane

[00:55:47,134]: I’m praying for wage inflation

[00:55:49,214]: This is what I want

[00:55:51,054]: I want these people to make more money and do better and inspire their children and do all the things you do in a community to make the country great

[00:56:00,034]: So anyway there will be changes

[00:56:04,674]: The whole notion at a micro scale in my opinion it’s to take more resources from the very wealthy and spread them out among the people

[00:56:14,874]: So a liberal will say I diagnosed the problem the way Lighthizer does

[00:56:20,334]: Let’s tax the rich people and give it to the other people

[00:56:23,314]: My idea that’s insanity

[00:56:25,534]: What you need to do is devise a structure where these people have good jobs and make lots of money and that’s the way you transfer resources and make the country great

[00:56:35,654]: You don’t do it by tax policy or things like that

[00:56:39,634]: So what’s the president done so far and what do you anticipate he will do going forward

[00:56:43,754]: So when you think about tariffs you have to kind of think of in two categories

[00:56:51,034]: There are I think like two buckets

[00:56:53,174]: There are national security issues which you have to deal with

[00:57:01,074]: And if the issue is of sufficient importance to really merit national attention you should do everything you can to solve that problem

[00:57:09,094]: If we were in a war people would say of course do whatever you have to right

[00:57:12,414]: Take over whatever

[00:57:14,154]: So he has some things and in this case primarily there’s some others but primarily this fentanyl issue with Canada and Mexico mostly a Mexican issue and that’s a national security issue

[00:57:25,794]: In my opinion it’s not an economic issue and it should be separated from it

[00:57:29,954]: Do you think fentanyl is a sufficiently important crisis to merit doing everything you can to solve it

[00:57:36,554]: I believe it is

[00:57:37,774]: So for me doing something in that space makes sense and the president threatened that and I think we got good results

[00:57:44,594]: That’s national security

[00:57:46,234]: The bigger question is what and you can use that tool in other times and the debate is not whether the tool’s appropriate

[00:57:54,194]: The debate is whether the national security issue is of sufficient importance to pay that price

[00:57:59,694]: So then the other issue is tariffs generally to get us to I would say balance

[00:58:05,074]: Some people would say fairness

[00:58:06,394]: Some people would say reciprocity but basically to get us to balance to offset all this unfair not just tariffs but unfair practices and I think what you’re gonna see on April 2nd is an attempt

[00:58:21,034]: You’re seeing the USTR and the Secretary of Treasury USTR doing the kind of day to day work of Secretary of Treasury and Secretary of Commerce recommending to the president a series of tariff increases and now how the form that takes I don’t think it’s really been determined yet

[00:58:44,774]: I think the direction is the need is but I think you’re gonna have to have a system that says here are the issues that are part of this industrial policy that are creating this unfairness and one of them is as I say taxes and value added taxes and if people are so we can talk about that in a second but and then the notion that the president has is well we’ll tariff people in order to get them back to whatever we think of as enough to offset their unfairness

[00:59:18,134]: At some point and he’s right of course but at some point you’re gonna have to simplify that because you can’t have 4 000 tariff codes in 180 countries and you know what I mean

[00:59:29,374]: You would need a supercomputer to decide what you know so at some point there’s gonna be some synthesizing of it to sort of say okay if you’re in these categories if you have these things you get this rate and that and the important thing for people to understand I tried to explain to people it isn’t like he’s gonna say okay here’s April 2nd

[00:59:52,094]: Now going forward everything is perfect

[00:59:53,814]: You’re gonna have to have adjustments

[00:59:55,214]: We’re always gonna still be here

[00:59:57,354]: There’ll be mistakes in the way it’s made and you’re gonna have to take care of exclusions in individual people and work it out

[01:00:03,934]: We did that and one of the reasons that when we when the president imposed tariffs in such a grand way the last time it never happened before the reason that it didn’t blow up really was that we let the steam out of the balloon

[01:00:22,954]: We had to we did enough so that we took care of urgent problems that might have collateral effects which were not good and so you’re gonna see modification

[01:00:32,954]: You’re gonna see change

[01:00:33,774]: So there are a lot of fine motor skills involved

[01:00:35,474]: It’s not just And you have to recognize that

[01:00:38,194]: You have to recognize it and it’s gonna be mistakes that are gonna be made but the problem is here

[01:00:44,294]: We have to do this remedy and we’ve gotta get there as quickly as we can and another thing to remember is you know in the first administration there weren’t that many people who agreed with us right

[01:00:55,734]: As you say there was the president who people everybody thought was crazy in this area and me who they thought was you know maybe crazier but the Overton window of acceptability has moved and so a lot more people understand the crisis a lot and in fairness the data has helped us make our case that you have to do this

[01:01:17,994]: So I think people are gonna be more accepting of it but you’re gonna have disruption

[01:01:23,174]: You’re gonna have the people who are benefiting now benefiting less and they’re not gonna like it

[01:01:28,674]: I think that’s the best part

[01:01:30,134]: You know yeah it is

[01:01:31,574]: You know there was this thing called concentrated benefits and diffuse payments this guy Buchanan who was the economist and he basically talked about the political system and he said that you know sort of things happen when the person who gets the concentrated benefit he is more motivated to get his way and to push his way through than all the people with diffuse payments and we’ve kind of had that system

[01:01:58,434]: My hope is that we can kind of reverse that and push back on those people who have had the concentrated benefits and give more of the benefits to the people who until now at least have been you know relatively quiet and just accepting of a pretty bad hand dealt to them

[01:02:16,274]: Only three things are absolutely certain in this life and you know two of them

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[01:03:23,534]: So of all the I just wanna go back to the downside for a second short term downside

[01:03:28,714]: Of all the potential effects of changing our system to the one that you described it seems to me that inflation is certainly as a political matter and an immediate matter the scariest

[01:03:41,634]: First of all it’s really easy to measure

[01:03:43,734]: Second it or it’s obvious

[01:03:45,634]: I don’t know if it’s easy to measure

[01:03:46,634]: It’s very obvious to people when the things they buy regularly become more expensive

[01:03:52,354]: So I mean I just wanna linger on this for a second

[01:03:55,474]: To what extent are we going to see increased inflation because of this

[01:03:59,514]: So Tucker I think there’s gonna be disruption and disruption’s gonna have some prices go up but some won’t

[01:04:08,074]: So let’s think about inflation just the way we should think about it

[01:04:13,394]: One inflation is a systemic thing

[01:04:17,114]: It’s not like your shirt costs more

[01:04:19,194]: If your pants cost less that’s not inflation

[01:04:21,334]: That’s just a more expensive shirt

[01:04:23,414]: So the question is whether it’s gonna systemically raise prices

[01:04:27,214]: A lot of people would say including Milton Friedman that that’s really a monetary phenomenon

[01:04:34,074]: It’s basically monetary policy that’s gonna dictate whether everything goes up or everything goes down

[01:04:38,974]: It’s how much money you print

[01:04:39,454]: And this is not gonna change monetary policy necessarily

[01:04:43,674]: Now someone might say oh it’s gonna slow down the economy thus we should lower interest rates

[01:04:49,134]: Someone else will say it’s gonna have inflation thus we should raise interest rates

[01:04:51,894]: So it’s kind of a conundrum for the Fed but set that aside

[01:04:56,394]: The notion is that you will increase production in the United States

[01:05:03,034]: You will maintain consumption at about the same and that will not be inflationary if anything

[01:05:08,374]: It’ll be deflationary

[01:05:09,654]: So that’s our idea

[01:05:12,254]: There’s a model that some economists use called the GTAP model which by the way generally assumes you cannot get economic growth that you’re a full capacity industrial capacity and full employment

[01:05:27,954]: So if you have a model like that then that’s gonna show inflation

[01:05:32,094]: But I would suggest that the model is not predictive

[01:05:34,654]: And indeed the St

[01:05:35,674]: Louis Fed made the statement a few years ago that the predictive quality of this model is 0 0

[01:05:43,414]: So a lot of the economists are using a model that’s unhelpful

[01:05:47,674]: But so the notion is you’re gonna increase production and that will happen and that that is not gonna be inflationary

[01:05:55,734]: The idea is that inflation is systemic not individual prices so you can’t just stack stuff up

[01:06:01,654]: The other thing is in the argument against inflation is that we did it last time in a big way

[01:06:08,874]: All the same people said it would be inflationary and we had no inflation right

[01:06:12,554]: We had 1 3 so we had no inflation

[01:06:14,314]: So they were proven wrong

[01:06:18,354]: And then the final thing I would say if the notion that economists use which is that trade barriers create inflation and that’s the basic notion that you’re talking about on their side why is it that China has deflation and not inflation

[01:06:35,714]: Why is it that the country with the most trade barriers actually has no inflation at all

[01:06:41,414]: And if you look like at Germany they have some inflation but it’s less than a lot of the rest of Europe

[01:06:46,254]: So it would suggest that there is not necessary relationship between tariffs and inflation

[01:06:51,594]: It would suggest it I mean

[01:06:53,114]: And I would add one other thing

[01:06:55,314]: If you look at the president’s program generally all right the program is gonna be tax cuts spending cuts deregulation more energy and tariffs

[01:07:08,534]: Now even all but a hardcore partisan would say the combination of that can’t be inflationary right

[01:07:18,754]: The combination of cutting spending getting rid of regulation increasing energy those things can’t be inflationary

[01:07:25,494]: Now some Well they’re anti inflationary

[01:07:27,694]: They’re all anti inflationary

[01:07:28,374]: We have inflation because we’ve done the opposite

[01:07:30,174]: We made energy more expensive

[01:07:31,254]: That’s precisely right

[01:07:31,934]: We spend too much

[01:07:32,674]: That’s precisely right

[01:07:34,214]: Okay China

[01:07:36,094]: So you mentioned Germany

[01:07:38,574]: Obviously the beating heart of Europe it’s decided to commit suicide

[01:07:42,574]: So who knows where Germany will be

[01:07:44,914]: It’s hard to see Germany as like a real threat to our economy

[01:07:47,914]: I mean I can’t predict it but it seems like it’s really a conversation about China

[01:07:54,514]: So there are kind of two things

[01:07:56,654]: One we have a trade problem and that problem is trade deficits and it’s having all the bad effects that I said on our people and on the wealth of our country generally

[01:08:07,454]: That is a problem that has to be resolved

[01:08:11,574]: Connected but independent of that is the question of the geopolitical competition With China

[01:08:18,894]: So I always start with you’re either on one side or the other

[01:08:25,794]: And I put people in like three categories Tucker

[01:08:28,694]: There are people that study the issue and I’m gonna go through the kind of litany in a minute

[01:08:34,054]: But to set it up there are people that study this issue and say China is an existential threat to America

[01:08:41,974]: They are an adversary and we have to make change

[01:08:44,734]: And I’m in that group

[01:08:46,374]: There’s another group that studies it and says China is an existential threat

[01:08:52,734]: They’re an adversary but we don’t need to do anything because it’ll all kind of be resolved through this or that

[01:08:59,494]: That’s a group that was very popular in the 90s

[01:09:02,694]: It doesn’t really exist anymore

[01:09:03,874]: I call it the unicorn group right

[01:09:05,494]: People who have kind of been proven wrong that it’s just you have to do something

[01:09:09,854]: The third group are people that study it and conclude that there isn’t a problem

[01:09:14,694]: China’s not an adversary and there’s no existential threat

[01:09:16,854]: That group is all invested in China right

[01:09:19,694]: So you can kind of divide the world when you think when you’re talking to someone which of these three groups are you in

[01:09:25,154]: If you’re in the last group then you’re basically a compromised person because no rational person can look at the data look at the facts and conclude that China is not a threat and an adversary

[01:09:36,714]: So let’s look at Wait can I suggest a fourth group

[01:09:39,494]: What’s that

[01:09:40,154]: Might be people who look at the current situation and say yes China’s an adversary

[01:09:45,094]: Yes China’s economy is larger than ours

[01:09:46,814]: Yes the future belongs to China

[01:09:48,994]: We’re not equipped for a confrontation with China either economically or militarily

[01:09:53,374]: And so we have to kind of figure out how to deal with the inevitable

[01:09:57,694]: So yeah this is kind of the defeatist caucus right

[01:10:04,574]: The one that is all over for the world

[01:10:07,154]: I generally find that group has a very large overlap with group three that I articulate

[01:10:13,754]: The people invested in China

[01:10:14,594]: The people invested in China that are already gonna make money

[01:10:17,194]: But for sure there are people but I always say to them you know you can’t say do nothing in the face of a crisis

[01:10:26,954]: If you say do nothing in the face of a crisis then I have not convinced you that we have a crisis because it’s irrational if you accept the fact that it’s a crisis to say do nothing

[01:10:37,674]: That’s not a rational Well it’s kind of lie back and think of England kind of thing like it’s gonna happen so

[01:10:44,054]: While England slept yeah

[01:10:46,934]: Yeah although there were a lot of differences and a lot of other things going on there

[01:10:53,054]: And when you mentioned that I always think of Neville Chamberlain who before he was prime minister was chancellor of the Exchequer

[01:11:01,494]: And he approved the sale in the 30s of 180 or whatever it was Rolls Royce airplane engines to rearming Nazi Germany which was just on his face quite ludicrous

[01:11:16,034]: And his explanation was that trade like religion should know no boundaries

[01:11:21,734]: So while rearming Nazi Germany was a threat it was more important that we sell them things even if they’re gonna use them to bomb us

[01:11:29,434]: I always said I don’t know why but when you mentioned England during that period that’s the first thing Right well it’s the capitals to say the rope Exactly exactly

[01:11:41,154]: So let’s think of why I have this conclusion and none of this is gonna be news I don’t think to anyone who’s listening

[01:11:48,274]: But one China has the biggest army in the world and they’re growing it

[01:11:52,514]: They have the biggest Navy in the world

[01:11:54,374]: They are militarizing the South China Sea in a way we haven’t seen since the Second World War

[01:11:59,314]: They’re claiming shoals building 18 inches of cement and having places that you can militarize and land boats on

[01:12:10,334]: They are asserting territorial claims all around them

[01:12:16,094]: I mean it’s not just Vietnam and Philippines but it’s also Japan and you could just go all around them

[01:12:24,454]: They are engaging in espionage on a scale we haven’t seen that the FBI says

[01:12:29,814]: They start a new Chinese espionage case every few hours and they have thousands of them

[01:12:35,194]: They have suborned perjury from two sailors about last year and a month ago two army officers to not perjury but espionage to sell secrets to them

[01:12:51,914]: They are building nuclear silos all over the place

[01:12:55,674]: They have their diplomatic wolf warriors go around and do whatever they think is gonna be disruptive of the United States

[01:13:01,554]: They’re building military bases around the world

[01:13:05,154]: They have things like this thing that’s on the news now on this shipping company at either end of the shipping facility at either end of the Panama Canal

[01:13:13,574]: So I mean they’re gathering data

[01:13:15,814]: They’re engaging in economic warfare with the United States in terms of stealing technology and technology transfer and all the kinds of other things of which we are aware

[01:13:27,294]: They are funding the war in the Middle East

[01:13:29,514]: They’re funding the war in Europe just without question it’s their money

[01:13:39,474]: They’re selling all the fentanyl at least the precursors of all the fentanyl that comes into the United States

[01:13:45,794]: And it’s not like the people that are selling the precursors for the fentanyl are an odd group

[01:13:51,634]: There are big companies in China that are doing it I would suggest with the approval of the Communist Party because they don’t have the problem at home

[01:13:58,914]: So if you sort of set aside the diplomatic the military the economic you put all these things back to back and then you look at their own words where they talk about change not seen in 100 years and prepare for war and all these kinds of things

[01:14:13,734]: It’s pretty clear that their view is they should be number one in the world

[01:14:19,734]: Their view is the world is better off with totalitarianism politically Marxism and economically communism right

[01:14:29,574]: This is their scheme and that we’re in their way

[01:14:35,034]: This is their objective

[01:14:36,634]: This centrality of China runs through their history for 2 000 years and we are a problem

[01:14:46,526]: So for all of those reasons you have to realize we have a real existential threat and we have to do something about it

[01:14:54,126]: And the first thing you do is you stop transferring hundreds of billions of dollars of wealth to people that they’re using to build technology and military systems to defeat you right

[01:15:07,126]: That’s the first thing you do

[01:15:08,946]: And we are doing that we are transferring we’re transferring hundreds of billions of dollars in trade deficit

[01:15:16,046]: We are transferring hundreds of billions of dollars in stolen technology

[01:15:22,166]: We are transferring money through this fence hole crisis that we have

[01:15:27,986]: If you look at all of these things you have to stop that right

[01:15:31,926]: It is like the first thing you do is you stop digging when you’re in a hole

[01:15:36,106]: So what we need I would propose is not no economic relationship

[01:15:41,446]: I’m not for decoupling but I think we need strategic decoupling

[01:15:44,386]: I think we need balanced trade in areas that benefit America

[01:15:48,066]: I think we need independent technology going forward made with America and with America’s allies

[01:15:53,866]: And then I think we have to regulate in going and out going investments so that it’s in the interest of the country

[01:16:01,186]: So I think we need a heads up kind of a policy

[01:16:04,046]: We can’t keep going on the direction

[01:16:05,646]: They also bribed the last president if I could just say very obviously which is kind of a big deal

[01:16:11,686]: It’s been ignored

[01:16:13,846]: How do we regulate investment in China

[01:16:20,706]: Well so the first question I would say how does China regulate investment in the United States

[01:16:24,786]: They have a state body that says this is in the interest of China therefore you can invest in the United States because you’re gonna get data or technology

[01:16:32,466]: And inbound investment if you try to invest over there they got people who sit there and say is this in the interest of China or them

[01:16:37,746]: And they just do it if it’s in the interest of China

[01:16:39,086]: So we really need in terms of inbound investment we need to take CFIUS this group at the Treasury Department and expand their mandate and fill it through a pot

[01:16:52,486]: So you can’t invest in Iran you can’t invest in Russia you can’t invest in Venezuela right now

[01:16:57,486]: Iran you can only invest in China if they determine it’s in China’s interest

[01:17:00,686]: No but I’m just saying like No exactly

[01:17:02,526]: We do have all kinds of controls where Americans can invest their money but they don’t apply to China

[01:17:08,026]: And you’re saying they should

[01:17:09,146]: Well for sure there’s two sides to it right

[01:17:13,526]: The inbound has to be strengthened so that they’re not buying into things where they can get data which they can use to feed their AI or technology not just military technology I would say any high technology

[01:17:29,106]: And then outgoing it should only be investments that are in the interest of the United States

[01:17:34,906]: Yeah for sure we have to do that

[01:17:37,486]: What’s going on now is you have a group of people on Wall Street who make money by funneling money to China

[01:17:44,986]: And that’s those people don’t I don’t know which of the three groups they’re in but you can guess

[01:17:51,326]: But for sure those people have to be stopped right

[01:17:55,986]: We have to stop that

[01:17:57,006]: And I’m not saying no investment in China but it has to be something that’s in our interest not in China’s interest

[01:18:04,446]: The howling that will occur if you try to restrict the ability of American citizens to get rich in China will be really loud

[01:18:12,706]: So I don’t really think the people who get rich in China are people who take your money and bring it to China right

[01:18:22,646]: In other words the bankers and the like

[01:18:25,446]: Then there are people who manufacture to sell in the United States or in other places in China that group

[01:18:33,046]: That group interesting all has a half life because as soon as China gets their technology they don’t need them anymore

[01:18:41,346]: And then they squeeze them out of the business

[01:18:43,406]: I could give you any number of cases in nuclear

[01:18:47,746]: And there’s a company called Ball Corporation which makes containers

[01:18:52,426]: And they were the biggest in the U S then the biggest in the U S and the biggest in China

[01:18:56,306]: Now they’re the biggest in U S They’re not in China at all

[01:18:58,786]: And the Chinese have competitors

[01:19:00,446]: And I could give a hundred examples of that

[01:19:04,566]: So the people can temporarily make money there while it’s in their interest for you to do it

[01:19:10,726]: But once you get to the point that the Chinese say now why exactly am I giving you a piece of this action

[01:19:17,426]: When you get to that point you’re on the way out

[01:19:22,206]: So I guess I have two things

[01:19:24,106]: One the people who actually are making money are sort of financializers if you will

[01:19:31,806]: Manufacturers will do it for a brief period of time until it falls off

[01:19:35,306]: And then the other thing I would say for sure there’s gonna howl but I always say it’s a little bit like undertakers being against cancer research right

[01:19:42,946]: My view is so much you’re against cancer research right

[01:19:45,526]: It’s bad for business

[01:19:47,386]: You’re absolutely right

[01:19:49,146]: How do the financializers get rich in China

[01:19:51,506]: Well I mean they get a fee for bringing money to China right

[01:19:55,606]: So it’s like they do anywhere else right

[01:19:59,546]: They sell bonds they facilitate investment and they get a piece of the action

[01:20:06,066]: They’re politically powerful

[01:20:07,506]: Yeah there’s no question about it

[01:20:09,286]: There’s no question about it

[01:20:12,726]: If you were to this is obviously just broad strokes here but if you were to radically reduce the amount of manufacturing that American companies outsource to China could you take up that slot

[01:20:25,286]: How long would it take to replace that manufacturing with manufacturing

[01:20:29,226]: That is gonna happen with tariffs

[01:20:32,206]: They are in fact coming back

[01:20:35,706]: That manufacturing is gonna come back

[01:20:37,506]: So it’s gonna have that effect

[01:20:38,846]: And I think it’ll take relatively less now it’s all not coming back right

[01:20:43,066]: So we’ll go to other places

[01:20:44,186]: And my own view is that it going for example from China to Mexico could very well be in the interest of the United States

[01:20:51,686]: And not if it’s a Chinese company doing it but I mean when a US company brings a facility from China and puts it in Mexico and employs Mexicans that’s more in my economic interest as an American

[01:21:03,066]: I think that’s right

[01:21:04,126]: A stable Mexico is in our Yeah exactly

[01:21:06,306]: And I think that sort of thing will happen and is happening

[01:21:09,506]: That’s not to say that we don’t have a crisis down there of Chinese investment and we can talk about that several if we want

[01:21:15,626]: A crisis in Mexico

[01:21:15,626]: In Mexico yeah it’s a huge huge problem

[01:21:17,766]: Will you explain that

[01:21:20,606]: So what has happened is we renegotiated USMCA and tightened it in a bunch of ways and really created the most pro manufacturing pro America trade deal in history right

[01:21:37,386]: For the first time the president it was one of President Trump’s great accomplishments

[01:21:42,946]: First time anybody had ever renegotiated a big agreement they were sort of thought of as eternal like marriage or religion or constitution or something

[01:21:52,346]: We renegotiated it

[01:21:53,986]: At the same time we put tariffs on China right

[01:21:58,246]: Unrelated but we put tariffs on China

[01:22:00,026]: So what China was trying to do is figure out a way to get into the US market without paying the tariffs

[01:22:06,326]: Now a logical way to do that it would be to move stuff to Mexico

[01:22:14,246]: And as part of that process they are infiltrating the Mexican infrastructure there and the numbers are quite large

[01:22:24,166]: It’s you know billions and billions of dollars of investment by China and this Rhodium Group and others who have studied it say the number’s probably six or seven times what the public numbers are

[01:22:36,686]: So it’s hundreds of billions of dollars of investment

[01:22:40,446]: The purpose of this really is to ultimately get to the US market but also to sort of infiltrate the system in Mexico

[01:22:47,826]: And I would suggest it’s very bad for the United States and it’s very bad for Mexico

[01:22:53,086]: And ultimately the president’s gonna have to deal with it

[01:22:55,986]: I think he’s aware of that

[01:22:57,566]: This is a freight train coming down the road

[01:23:02,066]: So if you take Chinese content and just you know substantially transform it just you know paint it or something and then bring it to the United States that’s very bad

[01:23:11,966]: So you’ve seen increases in Chinese exports to Mexico of 50 a year for a number of years

[01:23:20,086]: And a lot of that I think is finally going to the United States and is dislodging other sensible investments

[01:23:26,646]: So Chinese But also giving China some control over Mexico

[01:23:29,206]: Oh that’s no question

[01:23:30,346]: And the president of Mexico seems to understand that at least to the extent you can in their system

[01:23:37,666]: So it’s a big problem

[01:23:39,326]: And a lot of it has not come on stream yet

[01:23:42,626]: So it’s huge auto investments

[01:23:45,326]: It’s a lot of things that they’re doing that haven’t even come on stream yet that are gonna come down like a locomotive down the highway

[01:23:51,946]: And it’s all bad and we have to do something about it

[01:23:55,486]: And the reality is probably that’s gonna be tariffs and it’s gonna be some way that you separate like US companies and neutral countries like companies like the Japanese who are operating down there and abiding by the USMCA and this whole Chinese infiltration that’s coming in

[01:24:18,026]: One of the things I’ve learned from traveling is that a lot of other countries like dealing with China because they’re easier to deal with

[01:24:25,506]: There’s no lecturing about democracy or transgenderism rights for various groups whatever

[01:24:33,186]: They don’t feel as manhandled as they do by their experience with American government officials

[01:24:42,806]: Would it be helpful for the US government to take a less hectoring tone around the world

[01:24:48,866]: Well let me say first of all they also like China do business in China in many cases because they don’t have a Foreign Corrupt Practices Act

[01:24:55,466]: Wait well exactly

[01:24:56,606]: Yeah but I mean to some extent it’s because they can influence you in ways personally

[01:25:01,706]: So there’s a lot of what’s going on in this Belt and Road is going in there influencing local officials who then take on great amounts of debt put in a Chinese infrastructure it goes to hell

[01:25:13,226]: So some of the advantage that China has is just pure old corruption right

[01:25:17,726]: That we wouldn’t wanna be a part of

[01:25:19,066]: It is but we also it seems to me hamstring ourselves by our posture toward other countries

[01:25:26,066]: Like it is very off putting to have American officials come into your country and start telling you that your like ancient way of life is immoral

[01:25:33,206]: No no no for sure

[01:25:33,906]: People don’t like that

[01:25:34,966]: And that’s I mean it’s counterproductive and wrong

[01:25:39,406]: So I completely agree with you

[01:25:40,926]: Glourish right

[01:25:41,466]: Yeah yeah

[01:25:41,646]: I wouldn’t invite someone like that to dinner at my house

[01:25:44,926]: No

[01:25:49,646]: So one of President Trump’s ideas I don’t know if it’s been fully articulated but it’s very obvious from watching is that we can reestablish some sort of economic relationship with Russia once this war is resolved God willing

[01:26:04,326]: Could that happen

[01:26:05,466]: To what extent could that benefit the United States if it did

[01:26:08,626]: So first of all the amount of time that I spent worrying about Russia in the trade and economic sphere was minimum right

[01:26:16,366]: Right sure yeah of course

[01:26:17,486]: Because they’re small they have GDP smaller than Canada and they’re basically people would get into basically a gas station right there if they’re an energy producer and not much else

[01:26:30,786]: There was a time when they were also very much at the cutting edge of technology but I think that’s kind of waned

[01:26:37,846]: And you know depending on once again this is sort of a little feared from where I’m an actual expert unlike everybody else I actually identify when I am and when I’m not

[01:26:49,026]: I find it’s helpful

[01:26:50,426]: God bless you

[01:26:50,646]: It’s helpful to me but not other people

[01:26:52,986]: But I do believe that depending on how the war is resolved and it will be resolved right

[01:26:59,186]: I mean it’s just there’s no question wars are not eternal anymore than trade agreements should be

[01:27:04,106]: But when that happens I think you will see economic relations reestablished

[01:27:11,786]: I’d be flabbergasted if you didn’t

[01:27:13,266]: The reality is that there will be demand

[01:27:16,486]: There will be people that can sell

[01:27:17,806]: There are things you can do

[01:27:18,766]: But a lot of it is how it is resolved

[01:27:21,506]: If it’s resolved in a way that Europe and others view themselves as still more or less being at war then you’re gonna have a very slow recovery economically

[01:27:30,446]: If you view themselves as like we’ve turned the page and we’re in a new decade then my guess is you’ll see people move more quickly

[01:27:36,226]: The Europeans are grudge holders I’ve noticed

[01:27:39,946]: Okay you said you’re trying not to be partisan

[01:27:43,286]: I think you’ve done a great job because not all of these are partisan questions but in practical terms what do you assess the chances of the Democrats any Democrats supporting Trump on this program

[01:27:57,646]: So it should be really good

[01:27:59,326]: Let me just say It should be

[01:28:00,686]: I mean traditional Democrats would’ve supported this

[01:28:02,866]: Remember the Democratic Party is a bunch of different things like we are I guess

[01:28:08,006]: And Labor Democrats should do that

[01:28:11,286]: Remember when I was when I renegotiated the USMCA the president and I did and then I worked its way through Congress

[01:28:18,986]: And during this toxic time of impeachment and all of this we worked it through for months and months and months in Congress

[01:28:25,026]: And in the final analysis got 90 of the Democrats and 90 of the Republicans to vote for it in the House and in the Senate

[01:28:31,846]: It’s one of these things that people don’t remember but it was you know whatever the hell we had 385 votes in the House for it

[01:28:40,766]: I mean and it was That’s incredible

[01:28:42,366]: Yeah and people don’t give us credit for that but it was like historic

[01:28:46,006]: And so they’re impeaching the president and voting for maybe one of the biggest parts of his legacy

[01:28:52,526]: And there were a lot of Democrats particularly in the House who were key to that happening

[01:29:01,726]: I didn’t I don’t know how I missed all this

[01:29:02,966]: I’ll tell you I’ll tell you a story

[01:29:04,926]: We have John Lewis who was obviously didn’t like the president at all but who I admire as like the he was then the last living civil rights person someone who I greatly admire

[01:29:13,086]: And actually I actually brought my senior political staff to meet him just and they were just you know awed by him just to and he talked for 45 minutes about the civil rights movement

[01:29:24,246]: And we just sort of say this you are the last person that’s going to be able to talk to the last person who did this

[01:29:31,566]: But he made the statement for example he said you know I fought NAFTA with every bone of my body

[01:29:37,486]: I fought it as hard as I could possibly fought

[01:29:39,446]: And I never thought we’d have an opportunity to correct it but now we are and I’m supporting this

[01:29:44,826]: So there were he was there you know Rich Neal who was then the chairman of the Ways and Means Committee and Nancy Pelosi was a supporter but there were a lot of them Rosa DeLauro I mean very hard left people who realized what we were doing was for working people and that was our constituency

[01:30:03,006]: So I think there is hope

[01:30:04,086]: Debbie Dingell has spoken about this recently

[01:30:06,446]: I think there is hope but it Tucker it requires sales

[01:30:10,586]: It’s not like you have to go up and actually do the retail work

[01:30:14,406]: I spent a huge amount of time on the Hill when we were doing this a huge amount of time

[01:30:21,186]: I addressed twice I addressed the caucus of Democrats in the House

[01:30:27,606]: The actual the caucus you know once with Rich Trumka the head of the FLCIO just he and I and took questions from the Democrats

[01:30:37,106]: I’m sure that no one else in the probably in very many administrations from a different party has ever done that

[01:30:43,506]: So it requires sort of doing the spade work but I really think it’s worth it because this change economically is so important

[01:30:53,606]: It has to be bipartisan

[01:30:55,506]: It has to be acceptable

[01:30:56,926]: I’m not saying don’t do it unilaterally Mr President using existing law

[01:31:01,666]: I’m not saying that because I’m not Pollyanna

[01:31:03,766]: I think it would be very hard to pass something but you do want labor democratic buy in because that’s how you make something permanent is you have the smart people the caring people the ones who care about working people

[01:31:20,426]: And there’s lots of Democrats who do lots of them

[01:31:23,566]: Getting those people to buy in I think is really really important

[01:31:28,266]: And sounds achievable

[01:31:29,426]: So last questions about markets equity markets the S P the NASDAQ

[01:31:36,066]: That seems I mean that’s the main measure that the media use to gauge the health and trajectory of the economy as you know

[01:31:47,466]: So I mean there are shows on TV just about markets

[01:31:51,146]: Do you think that’s an accurate measure

[01:31:55,226]: So the answer is no and it’s particularly true in the short term right

[01:32:03,886]: Because the markets are affected more by the Fed than they are other things

[01:32:10,026]: I mean the market’s basically affected as much by you know they have interest rates go down as it is anything else

[01:32:16,846]: I think in a general way That’s kind of can I suppose that’s a little weird actually

[01:32:21,726]: Markets are supposed to equity markets are supposed to reflect the value of the companies in which you buy equity right

[01:32:28,946]: So it should be like the measure should be like how’s the company doing right

[01:32:33,986]: And it’s very often it’s But it’s kind of weird for the Fed

[01:32:38,086]: Macroeconomics yeah but the notion sort of is that well if interest rates go down you’re going to have economic activity increase

[01:32:45,206]: So it’s not crazy but it’s sort of off centered

[01:32:49,086]: I mean to me long term it’s fair to say what will the markets do right

[01:32:54,806]: Will these companies become richer under this system

[01:32:58,346]: American companies become richer under this system

[01:33:01,466]: The metric for me is did workers get richer

[01:33:05,446]: That’s the metric for me

[01:33:07,826]: But if that happens it should be reflected in the market

[01:33:10,566]: And so I think looking at a short term is very disruptive very destructive not right

[01:33:16,286]: Looking at a long term makes some sense but it’s not my metric

[01:33:20,026]: My metric after national defense my metric is do most Americans do relatively better

[01:33:28,746]: And if they in real terms and if they did the country is better off and the economy has done what it is supposed to do

[01:33:37,266]: I actually this is sort of in 1996 when Bob Dole who I worked for you’ll remember as the chief of staff and he was chairman of the finance committee I wrote a speech that sort of made this point that the purpose of an economic policy is to generate wealth for the mid section

[01:33:57,386]: The richer they’ll take care of themselves the poorer you have programs for but you want to take this is the purpose of it

[01:34:03,566]: And it was funny I got all the smart people with all this resentment in me wanting to have him make this speech which he agreed with right

[01:34:10,866]: He was a populous Midwestern guy

[01:34:13,526]: And finally I think when it was all over and we didn’t really have a shout at the end he just said I just got to keep Lighthizer from grunting so I’ll give the speech and he ended up giving it

[01:34:24,246]: So Was he a good guy

[01:34:25,686]: He was a good guy

[01:34:26,746]: Bob Dole was a good guy

[01:34:27,526]: He was you know it’s funny there’s like there’s kind of like different Bob Doles when you live to be 97 or something you have different you know you have the young Bob Dole I didn’t know and he went to war and got blown up and kind of gritted his teeth and fought back and he lived in the basement of his house so they could rent the upstairs you know so they could live

[01:34:47,386]: And then you have this guy in the middle who was the guy who was maybe the legislator of that time the number one

[01:34:54,166]: You could make the case for a few other people but I could you could make the case for him being the number one legislator in that midpoint in American history

[01:35:00,906]: And then you have this older guy who you know who got the Eisenhower Memorial done and got the World War II Memorial and did all these wonderful things in this like different way

[01:35:09,626]: So I had this middle this guy in the middle and he was a tough hard good conservative guy

[01:35:17,066]: And I obviously was had an enormous amount of affection you know stayed close to him his whole life

[01:35:23,386]: Wow

[01:35:25,286]: Bob Lighthizer that was an amazing tour through the past and I hope the future and thank you for doing that

[01:35:31,466]: Well thank you very much for having me

[01:35:33,386]: Tucker I’ll put this in my in my obit

[01:35:36,646]: I was on Tucker’s podcast

[01:35:38,526]: That’ll be in the obit

[01:35:39,546]: And it was just one suck up question after

[01:35:42,826]: Mr Lighthizer you’re a very handsome man

[01:35:45,006]: What’s your secret

[01:35:46,306]: No I just agree with you and I’m just so grateful to hear someone explain it clearly for non economists

[01:35:52,226]: I think it’s very important

[01:35:53,506]: I think it’s been neglected and I hope this helps

[01:35:55,926]: Great thank you

[01:35:56,766]: Thank you

[01:36:01,306]: So it turns out that YouTube is suppressing this show

[01:36:05,066]: On one level that’s not surprising

[01:36:06,626]: That’s what they do

[01:36:07,306]: But on another level it’s shocking

[01:36:09,046]: With everything that’s going on in the world right now all the change taking place in our economy and our politics with the wars on the cusp of fighting right now Google has decided you should have less information rather than more

[01:36:21,606]: And that is totally wrong

[01:36:23,806]: It’s immoral

[01:36:25,226]: What can you do about it

[01:36:26,586]: Well I’m going to tell you what I’m going to do

[01:36:27,066]: We could whine about it

[01:36:28,246]: That’s a waste of time

[01:36:29,446]: We’re not in charge of Google

[01:36:30,446]: Or we could find a way around it a way that you could actually get information that is true not intentionally deceptive

[01:36:36,586]: The way to do that on YouTube we think it’s to subscribe to our channel

[01:36:40,646]: Subscribe

[01:36:41,086]: Hit the little bell icon to be notified when we upload and share this video

[01:36:45,426]: That way you’ll have a much higher chance of hearing actual news and information

[01:36:50,526]: So we hope that you’ll do that

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