Speaker 1: This is Dan Kaples and welcome to today's online podcast
Speaker 1: edition of The Dan Caplis Show. Please be sure to
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Speaker 1: and to subscribe, download and listen to the show every
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Speaker 2: Yeah.
Speaker 1: I don't think there's any question the American Way is
Speaker 1: in jeopardy. But how do we preserve it? How do
Speaker 1: we strengthen at different points of view on that? You
Speaker 1: know mine, but really happy to have our friend Ross
Speaker 1: Kaminski join us now from a fifty k a way
Speaker 1: where he does a great show each and every day.
Speaker 1: And Ross, I think it would be an understatement to
Speaker 1: say you are ferociously opposed to the Trump tariffs. So
Speaker 1: thank you for being with us to talk about all that,
Speaker 1: and welcome back to the show.
Speaker 3: Well, thank you, And I just would like to start
Speaker 3: by saying how much I love your opening.
Speaker 4: Oh thank you?
Speaker 2: Yeah, no, it's so fabulous.
Speaker 4: It gets me fired up every day. Yeah sure, but
Speaker 4: thank you.
Speaker 3: I feel like, you know, like getting ready to run
Speaker 3: up the steps like Rocky or you.
Speaker 2: Can just to chat with you.
Speaker 1: Well that's the whole idea. Now, your station was just
Speaker 1: named Station of the Year. On Saturday nights. So we're
Speaker 1: going to light some candles and send some flowers because
Speaker 1: when Craig and I were named Show of the Year,
Speaker 1: I think that was the year they ended the show,
Speaker 1: but my memory may be tricking me.
Speaker 4: But yeah, yeah, so I know what's that.
Speaker 2: It's a fickle industry.
Speaker 1: Oh yeah, no, listen, come on. None of us is
Speaker 1: entitled to a single minute on air. So grateful for
Speaker 1: every day that we get. Absolutely But my friend, I
Speaker 1: know you to be a very smart guy and a
Speaker 1: very smart financial guy. So tell folks why you are
Speaker 1: so opposed to the Trump tariffs.
Speaker 3: Okay, let me first start for those who maybe don't
Speaker 3: hear me very much by saying that I probably agree
Speaker 3: with eighty or ninety percent of Donald Trump's policies, and
Speaker 3: part of what frustrates me so much right now is
Speaker 3: I think he's risking all of that with this trade
Speaker 3: war stuff. The other thing I I'd say is Donald
Speaker 3: Trump has identified an actual problem in that other markets,
Speaker 3: other countries do things to prevent American products from getting
Speaker 3: in and it's a legit issue, and I'm grateful that
Speaker 3: he's paying attention to it. The problem comes because I
Speaker 3: deeply believe, and because Trump has been saying this for
Speaker 3: forty years, that his primary goal with tariffs is not
Speaker 3: as negotiating leverage to get other countries to do that,
Speaker 3: although he would be happy with that, it would he
Speaker 3: would be pleased if other countries said we're going to
Speaker 3: lower our trade barriers.
Speaker 2: He would take that as something of a win.
Speaker 3: But he really believes that the use of tariffs can
Speaker 3: help reindustrialize America, make America richer.
Speaker 2: And that is just a weird kind.
Speaker 3: Of economic alchemy that has been disproven for two hundred years,
Speaker 3: every place that's been tried, every time it's tried, and
Speaker 3: people seem to forget that the primary victims of tariffs
Speaker 3: are not the producers in the other.
Speaker 2: Countries that are trying to sell us this stuff. It
Speaker 2: is bad for them.
Speaker 3: But the primary victims of tariffs are American consumers who
Speaker 3: face higher prices and fewer choices and probably a recession.
Speaker 1: And I know a lot of smart people share your concerns.
Speaker 1: If President Trump was with us, as you know, his
Speaker 1: counter to that would be, well, wait a second, ross,
Speaker 1: I'm trying to accomplish a lot of different things with that.
Speaker 1: But part of it, yeah, is I want this to
Speaker 1: be a big source of revenue for the US, so
Speaker 1: we can then do things like no tax on tips
Speaker 1: and other tax relief to the working class, and we
Speaker 1: can have other big tax cuts across the board. So
Speaker 1: where do you think that's all flawed?
Speaker 3: I think that is an insane, ridiculous, mathematically impossible argument
Speaker 3: because the tariffs are paid by Americans.
Speaker 2: They're not paid by foreigners.
Speaker 3: Even if if the foreigners did pay did pay them,
Speaker 3: then the prices of our stuff would go up. But
Speaker 3: the bottom line is the tariffs are paid by Americans,
Speaker 3: so it's just taxation in one form or another.
Speaker 2: So since there's not going to be more money.
Speaker 3: There's not going to be sort of Biden style money printing,
Speaker 3: and thank goodness, there won't be. What will happen is
Speaker 3: if Americans are still buying foreign stuff and paying the tariffs,
Speaker 3: and then all that stuff is more expensive than it
Speaker 3: used to be, then we will have less money to
Speaker 3: buy other things that could be made in America. There
Speaker 3: will then be less demand for other things. Then sales
Speaker 3: taxes will drop, businesses will fire employees, income tax revenue
Speaker 3: will drop, the deficit will.
Speaker 2: Get worse, and there won't be any.
Speaker 3: Room for cutting any any taxes, none of that stuff
Speaker 3: that his minions are out there saying is going to work.
Speaker 1: Dan now Ross, I think the if is the key
Speaker 1: words you use there, right, because, as you know, President
Speaker 1: Trump would say, yeah, if our people are then still
Speaker 1: buying as much from these foreign countries.
Speaker 4: But but of course, as.
Speaker 1: You know, a big part of his rationale is that no,
Speaker 1: these these terroriffs, these taxes on incoming goods will then
Speaker 1: cause manufacturing to grow again in America, make more at home,
Speaker 1: and then people will be able to get you know,
Speaker 1: those affordable products while strengthening America, strengthening American employment, strengthening
Speaker 1: the American tax base, et cetera.
Speaker 4: So right, where is he wrong on that?
Speaker 3: So where he's wrong is he's trying to have it
Speaker 3: both ways. He and Peter Navarro and other people like
Speaker 3: that say two things at the same time. They say,
Speaker 3: terifts are going to push people to buy American and
Speaker 3: tariff's are going to raise six or seven hundred billion
Speaker 3: dollars a year.
Speaker 2: Well, which is it.
Speaker 3: They're only going to raise a lot of money if
Speaker 3: they're not buying American and which case, you haven't achieved
Speaker 3: that goal. And if they are buying American, then they
Speaker 3: won't raise the money, and then you won't have achieved
Speaker 3: that goal. So you can't try to do both at
Speaker 3: the same time. You can do one or the other.
Speaker 3: And the fact that they keep saying that they're going
Speaker 3: to try to do both shows either that they're pretty
Speaker 3: dumb when it comes to economics, or they assume we're
Speaker 3: pretty dumb when it comes to economics. The other thing
Speaker 3: i'd say, Dan, in response to the last part of
Speaker 3: what you said, there's absolutely no reason to think that
Speaker 3: anything that starts being made here that is currently being
Speaker 3: made somewhere else will be less expensive. When it's being
Speaker 3: made here, It's going to be anywhere from a little
Speaker 3: bit more expensive to a lot more expensive, and we
Speaker 3: are all going to be poorer because we won't be
Speaker 3: able to afford to buy what we used to buy.
Speaker 1: Well, let me challenge that assumption first, and that is,
Speaker 1: if that assumes at this point just a lack of
Speaker 1: American ingenuity, innovation, etc. That would then reduce costs. I understand,
Speaker 1: our labor costs are always going to be higher, right,
Speaker 1: which is another reason I think to be very concerned
Speaker 1: about that the current status quo, because in a lot
Speaker 1: of ways we're just you know, fueling at this point,
Speaker 1: kind of this slave labor around the rest of the world.
Speaker 1: But coming back to domestic purchases because it hits most
Speaker 1: people right who are just understandably very sensitive to those
Speaker 1: price points. But I think your view and I understand
Speaker 1: the logic behind it, but I don't think it takes
Speaker 1: into account American innovation and true free market competition, which
Speaker 1: I know you'd be a great champion of, you know,
Speaker 1: and in America then okay, you know, if we want
Speaker 1: people to buy American, we're going to have to to
Speaker 1: compete price wise, quality wise, et cetera. And then I
Speaker 1: think historically Americans have shown that they do a pretty
Speaker 1: darn good job of innovating to accomplish that.
Speaker 3: So I think it could play out the way that
Speaker 3: you say we and in fact I will I will
Speaker 3: agree with you in a certain sense here. I frequently
Speaker 3: remind listeners that when you're buying stocks, most of the time,
Speaker 3: you're not really betting on the politicians. You are betting
Speaker 3: on the incredible entrepreneurial spirit and creativity of.
Speaker 2: American business owners and creators.
Speaker 3: And I think of that in the sense that I
Speaker 3: had a lot of friends, conservative friends who refused to
Speaker 3: buy stocks when Obama was present because they thought nothing
Speaker 3: good could possibly happen while that guy was president. And
Speaker 3: it turned out there was a massive stock market rally
Speaker 3: and they all missed it, and it was because they
Speaker 3: didn't think that a good thing could happen when someone
Speaker 3: like that was present.
Speaker 2: So we got to separate those things.
Speaker 3: So I will grant you that it is that I'm
Speaker 3: always willing to bet on American ingenuity. The issue is
Speaker 3: that the timeframes don't match. So I had a guest
Speaker 3: on my show today who is VP of the biggest
Speaker 3: technology trade association in the world, and what he said
Speaker 3: was Trump is trying to push manufacturing technology. Manufacturing to
Speaker 3: change in a year or two in a way that
Speaker 3: will require, if you were lucky, five years, but probably
Speaker 3: more like ten. And so that's the problem, right, So
Speaker 3: let's say we could get to what you're talking about
Speaker 3: with Americans making the stuff instead of it being made
Speaker 3: in China in ten years.
Speaker 2: Now.
Speaker 3: I still don't actually buy your argument that we could make.
Speaker 2: It cheaper, but let's just say you could.
Speaker 3: What about for the next five years when the iPhone
Speaker 3: that you would like to buy instead of being one
Speaker 3: thousand dollars, because if tariffs's fifteen hundred dollars, you're either
Speaker 3: not going to buy it or you will buy it
Speaker 3: and you'll have five hundred dollars less for other things.
Speaker 3: It's all economically bad and my take is that the
Speaker 3: risk and the cost is not worth the gain. Also,
Speaker 3: we only have what four point two percent on employment?
Speaker 3: Where are all these workers going to come from?
Speaker 1: Hey, can you do another segment? Because there are two
Speaker 1: or three points there. I have some respectful disagreement on it,
Speaker 1: and i'd like to follow up with you on. But
Speaker 1: then i'd also like your take on the bigger question,
Speaker 1: which is and I don't mean this in the pejorative,
Speaker 1: but you know you've mentioned minions, and I think I
Speaker 1: detect a certain tone. I think you're truly very upset
Speaker 1: about this. And so the question that i'd ask you
Speaker 1: to come back and answer is do you really think
Speaker 1: these guys and gals are idiots? Do you think Trump
Speaker 1: and his team are just really dumb? And because if
Speaker 1: you're right, then that's the way they're acting and I
Speaker 1: don't think they're that at all. Rosskominski kind enough to
Speaker 1: join us, we'll come back get his take on that.
Speaker 1: You're on the Dan Kapla Show.
Speaker 5: And now back to the Dan Kaplas Show podcast.
Speaker 1: I'm really happy to have Ross Komensky with us. Does
Speaker 1: a great show over on our sister station eight fifty KOA.
Speaker 1: And we have a much different approach to President Trump's
Speaker 1: current tariff plan. And I use that broadly because the
Speaker 1: plan includes more than that, obviously, but Ross very opposed,
Speaker 1: and we've done a segment together already you can pick
Speaker 1: off the pod on that, and we've gone into some
Speaker 1: of the specifics. I, on the other hand, I think
Speaker 1: that right now the status quo is unacceptable. I think
Speaker 1: that we're on a path that's on SoC sustainable and
Speaker 1: I do trust Trump. I think he's earned that trust
Speaker 1: on economic matters, and I respect the fact he's willing
Speaker 1: to endure some pain politically to try to write the ship.
Speaker 1: So that's where we resume our conversation and Ross, as
Speaker 1: we set the table for those who just joined us,
Speaker 1: I think I understand you correctly that if this was
Speaker 1: a relatively short term play to get leverage to cut
Speaker 1: some deals, etc. You wouldn't have the same level of concern.
Speaker 4: You believe though, that this is not that.
Speaker 1: It's instead the president looking to put in place Tariff's
Speaker 1: long term as a source of revenue and for the
Speaker 1: other purposes, he stated, And you believe that that's going
Speaker 1: to be disastrous. Is that a fair summary?
Speaker 3: That is a fair summary. And just one other really
Speaker 3: random thing. I will buy you a beer if you
Speaker 3: can tell me the name of the band or musician
Speaker 3: for the bumper music that the song coming into the
Speaker 3: segment that Ryan just played.
Speaker 4: I'm going to have to.
Speaker 1: Buy my own beer, my friend. I don't recognize most
Speaker 1: what he plays, but.
Speaker 4: It sounds good.
Speaker 2: Yeah, it was.
Speaker 3: It's h Dave Davis of the Kinks, the less famous
Speaker 3: Kink's brother.
Speaker 2: It's a Kinks song, but it was Dave's song. Sorry,
Speaker 2: and it's my favorite band.
Speaker 3: And I've never heard that played a bumper music, so
Speaker 3: I just loved it.
Speaker 4: Yeah, I didn't know any of those brothers are famous.
Speaker 1: But no, I'll tell you, thirty or so years on air,
Speaker 1: I don't know. I've never seen anybody a fraction as
Speaker 1: good as Ryan when it comes to music. But hey,
Speaker 1: let me ask you, my friend, and you know, I
Speaker 1: know we disagree on some specific points. I want to
Speaker 1: follow up with you on, and I want to start
Speaker 1: with one of them, but then I really want to
Speaker 1: get to what your fix would be, because if you're
Speaker 1: new to the show or the area, Ross isn't one
Speaker 1: of these guys who criticizes Trump on everything. As he
Speaker 1: started the show with, you probably support what percent of
Speaker 1: Trump's policies eighty to ninety okay, And so I do
Speaker 1: want to get to what your fix would be. But
Speaker 1: let me ask you the there are so many reasons
Speaker 1: why in concept I like what in Trump's doing. And
Speaker 1: one of those is something I know you care deeply about,
Speaker 1: which is national security. And you know, whether it's a
Speaker 1: prescription drugs, which right now we import. I think it's
Speaker 1: almost eighty or ninety percent of into this country, whether
Speaker 1: it's Ammo, whether it's steel, whether it's lots of other things.
Speaker 1: We're depending on other nations, including to a disturbing extent, China.
Speaker 1: For what about the national security benefit of what he's doing.
Speaker 3: So I think that China is a special case, and
Speaker 3: I think it deserves its own conversation that we can
Speaker 3: have or or not. But I would separate China from
Speaker 3: all of our other major trading partners. I would not
Speaker 3: and do not want to be reliant on China for
Speaker 3: anything really important. I think it's dumb how reliant we
Speaker 3: are on China for pharmaceutical precursors, for rare earth minerals
Speaker 3: and and some other things. I would not be upset
Speaker 3: with being pretty reliant for those things on our allies,
Speaker 3: on Japan, on Korea, on Canada and Mexico and so on,
Speaker 3: all this stuff. And there's just a very fundamental concept
Speaker 3: in economics of comparative advantage that we shouldn't try to
Speaker 3: make everything ourselves, even things that are very important. There
Speaker 3: are some of them that we should not try to
Speaker 3: make ourselves. But I wouldn't be reliant on a country
Speaker 3: that is sort of drifting from competitor to enemy for
Speaker 3: things we have to have.
Speaker 1: And then obviously it gets more complex from there, and
Speaker 1: there's obviously an area of common ground when it comes
Speaker 1: to China. So to a certain extent, you know you
Speaker 1: would support aggressive tariffs on China. I assume I know
Speaker 1: that you're aware that President Trump, I think it was
Speaker 1: an eighteen levied some pretty significant tariffs on China that
Speaker 1: have been very effective to a point, and Biden even
Speaker 1: I think, continued most of those. But what do you
Speaker 1: do then about because obviously communists cheat and China cheating
Speaker 1: and learning a lot of stuff now through Vietnam and
Speaker 1: maybe some other countries as well. So if you're in
Speaker 1: Trump shoes, how do you address all that without doing
Speaker 1: something broader than just China.
Speaker 3: Well, this is why these people get elected and have
Speaker 3: these very difficult jobs.
Speaker 2: These are the hardest questions.
Speaker 3: And you said, you know, I, you know, you assume
Speaker 3: I'd be in favor of very aggressive tariffs on China.
Speaker 2: I don't know that that's true.
Speaker 3: We have to be very surgical about this, and we
Speaker 3: have to remember that Americans, Americans buy an immense amount
Speaker 3: of stuff from China.
Speaker 2: But normally, when.
Speaker 3: You have the conversation in an environment like this where
Speaker 3: you know, we're on the radio, when we're and we
Speaker 3: talk about lots of things, it's not a nerdy Econ
Speaker 3: show that you and I do every day, although I'm
Speaker 3: nerdier than you are on Econ sometimes. But Americans think
Speaker 3: of the stuff that's coming from China. They think about tennis,
Speaker 3: se use, tupperware, you know, final goods, cheap stuff that
Speaker 3: you're buying and using yourself. But an enormous percent I
Speaker 3: think Somewhere around half of stuff that we buy from
Speaker 3: China is stuff that American companies use to make other things.
Speaker 3: And if you start tariffing that stuff, then you make
Speaker 3: the inputs to American companies more expensive. And that's very
Speaker 3: bad for the American companies and for American consumers.
Speaker 2: And that's why this is so difficult.
Speaker 4: But why couldn't that stuff also be made here? Well?
Speaker 3: It could, but the question is could it be made? Okay,
Speaker 3: So give you an example. I was listening to a
Speaker 3: guy this morning on one of the financial news networks
Speaker 3: I forget which one, and a very very well respected
Speaker 3: technology analyst tech stock analyst, and he said, based on
Speaker 3: his own homework, he said, iPhone that is largely assembled
Speaker 3: in China that you buy for one thousand dollars, if
Speaker 3: it were to be made in America.
Speaker 2: Would cost you three thousand dollars.
Speaker 3: Now, I don't know about you, Dan, and there's not
Speaker 3: a sarcastic comment. I absolutely would not pay three thousand
Speaker 3: dollars for an iPhone, which would mean I'd just keep
Speaker 3: my old phone for a long time until it's useless,
Speaker 3: and then I'd find something else. For the people who
Speaker 3: do pay three thousand then they have two thousand dollars
Speaker 3: less to buy other things?
Speaker 4: Right, But doesn't that ignore the secret sauce of America? Right?
Speaker 1: And this isn't cheerleading. We've seen it in Natch, the
Speaker 1: secret sauce, which is free market competition in a market
Speaker 1: this big, a population this big and well educated where yeah,
Speaker 1: that's what it might be today. But then you turn
Speaker 1: free market competition loose on that ingenuity, et cetera, and
Speaker 1: you'll never be able to make it as cheaply as
Speaker 1: China right where they're probably using slave labor to make it,
Speaker 1: which is another big concern, But you're going to make
Speaker 1: in roads there, which leads to another question, Rouss, can
Speaker 1: you do another segment?
Speaker 2: Sure?
Speaker 4: Because I'd love to know is the status quo acceptable?
Speaker 4: And what would your fix be?
Speaker 1: Us, as a smart guy thinks a lot about this stuff,
Speaker 1: we obviously disagree, but really interesting what his solution would
Speaker 1: be Around the Dan Capitlis Show.
Speaker 5: You're listening to the Dan Kapliss Show podcast, what is.
Speaker 4: Your reaction and what is the impact on your cans?
Speaker 1: You work them to spending more on defense, which they
Speaker 1: are agreeing to finally, but how can they do that
Speaker 1: when their economies are crashing, and they are now No.
Speaker 6: No, no, no, no no, Their economies are not crashing. The
Speaker 6: markets are reacting. No, their economies are not crashing. Their
Speaker 6: markets are reacting to a dramatic change in the global
Speaker 6: order in terms of trade. And so what happens is
Speaker 6: pretty straightforward. If you're a company and you make a
Speaker 6: bunch of your products in China and all of a sudden,
Speaker 6: shareholders are people that play the stock market realize that
Speaker 6: it's going to cost a lot more to produce.
Speaker 2: In China, your stock is going to go down.
Speaker 6: But ultimately, the markets as long as as long as
Speaker 6: they know what the rules are going to be moving forward,
Speaker 6: and as long as that sentence and you can staying
Speaker 6: where you're going to be, the markets will adjust businesses
Speaker 6: around the world, including in trade and global trade.
Speaker 2: They just need to know what the rules are.
Speaker 6: Once they know what the rules are, they will adjust
Speaker 6: to those rules.
Speaker 1: Hey, Rosskominsky, our guest right now, does a great show
Speaker 1: over an eight to fifty ka nine to new iconic
Speaker 1: time slot held for many years by Mike Rosen kind
Speaker 1: enough to join us. We disagree about the let's call
Speaker 1: it the Trump tariff plan at this point. I think
Speaker 1: there's much more involved in that. We've had a very
Speaker 1: detailed conversation over the last three segments. We won't rehash here,
Speaker 1: but Ross really appreciates you staying around because I want
Speaker 1: to get to kind of this seminal question of Okay,
Speaker 1: we disagree, but what would your solution be? Because I
Speaker 1: know that we both want the same thing in the end,
Speaker 1: We want a healthy, thriving, secure, prospering America, and we
Speaker 1: disagree right now about whether Trump's approach is more likely
Speaker 1: to get us there than others.
Speaker 4: But what would your fix be?
Speaker 2: That's a great question, I think.
Speaker 3: I think what's so difficult about this conversation about tariffs
Speaker 3: in particular is that people tend to focus only on
Speaker 3: the barriers that a tariff imposed by the US would
Speaker 3: put on a foreign product coming into the US, and
Speaker 3: we only tend to think about, well, what does that
Speaker 3: mean for the foreign producer that he or they or
Speaker 3: she whatever.
Speaker 2: Won't sell as much stuff to us.
Speaker 3: What we forget is actually the more important part, and
Speaker 3: the more important part is that by imposing those tariffs,
Speaker 3: depend and the reaction to a tariff could be anything
Speaker 3: from a small increasing price to a large increasing price
Speaker 3: to a complete unavailability of the product.
Speaker 2: Right.
Speaker 3: For example, Jaguar range Rover just announced they're not going
Speaker 3: to bring any more range Rovers into the United States
Speaker 3: for the time being.
Speaker 2: That's kind of an extreme, an extreme.
Speaker 4: Case, so it could be a March Gary Creek tomorrow.
Speaker 3: There needs you, right exactly, So there needs to be
Speaker 3: some focus on the fact that what the tariffs do
Speaker 3: is increase costs and reduce choices for American consumers and
Speaker 3: American businesses.
Speaker 2: So you know, I'm president of the Bad Analogy Club.
Speaker 3: So what this is like is Trump is pointing a
Speaker 3: rhetorical gun at a trading partner and says, if you
Speaker 3: don't do what I want, I'm gonna shoot you. But
Speaker 3: he's got his hand in front of the barrel, and
Speaker 3: so the trading partner knows that if Trump actually pulls
Speaker 3: the trigger, the bullet will go through the hand and
Speaker 3: hit the trading partner and hurt him or kill them
Speaker 3: or whatever, but not without putting a big hole in
Speaker 3: Trump's own hand.
Speaker 2: And that's what makes this difficult.
Speaker 3: So I think, more often than not, I think that
Speaker 3: the cost to the American consumer, which doesn't go talk
Speaker 3: to about isn't talked about enough is larger and more
Speaker 3: important than the potential benefits to American producers of getting
Speaker 3: the other guys to open their markets.
Speaker 2: What do we do about it?
Speaker 3: Look, I don't think it's crazy for Trump to threaten
Speaker 3: tariffs and maybe even briefly impose tariffs to try to
Speaker 3: get them to back down. But that's not what he's doing,
Speaker 3: and he said over and over and over that his
Speaker 3: goal is to keep tariffs in place. I don't think
Speaker 3: it's a bad gambit if that's all it was, to
Speaker 3: say we're going to tearriff you until you lower, and
Speaker 3: then see how the game theory plays out. It's basically
Speaker 3: a game of chicken. But it's not what he's doing.
Speaker 3: So what else could you do? There are other ways
Speaker 3: to put pressure, but you know, put make it difficult
Speaker 3: or expensive for tourists from some country to come here,
Speaker 3: or for students to come here.
Speaker 2: There are a lot of different things you could do.
Speaker 2: But the other thing that folks forget about.
Speaker 3: They think, well, we're gonna put tariffs into the other guys,
Speaker 3: they're going to have to lower. But the other guys
Speaker 3: have this same problem that our politicians have, which is
Speaker 3: that there are basis of political power that are highly
Speaker 3: concentrated and highly organized industrial labor unions, farmers for example.
Speaker 3: So think about from the perspective of the French or
Speaker 3: the Canadians. The Canadians, right, they've got big tariffs on
Speaker 3: our dairy and they have a big dairy industry. So
Speaker 3: you've got several thousand dairy farmers in Canada who are
Speaker 3: well organized and contribute a lot of money to a
Speaker 3: political action committee. And if the politicians don't do what
Speaker 3: they want, they're going to run all these ads that
Speaker 3: they're going to contribute to primaries and beat all these guys.
Speaker 3: And so they get the tariffs put in, and the tariffs,
Speaker 3: you know, harm every Canadian to the tune of I'm
Speaker 3: just going to make up a number thirty dollars a
Speaker 3: year while benefiting the dairy industry one hundred million dollars
Speaker 3: a year again, whatever the number is. And it's not
Speaker 3: that easy for Trump to just tell the Canadians you
Speaker 3: need to lower your tariffs, because they've got their own
Speaker 3: domestic politics to deal with, in addition to the domestic
Speaker 3: politics of not wanting to look like you're being pushed
Speaker 3: around by Donald Trump. So all of this is harder
Speaker 3: than most people think, right, But aren't.
Speaker 1: We at the point right now where Americans can't be
Speaker 1: subsidizing these foreign politicians and their domestic political concerns? And
Speaker 1: russ I love your analogy here for this reason, because, yes,
Speaker 1: for President Trump to accomplish what he needs to to
Speaker 1: benefit the American people.
Speaker 4: Long term, there will be pain. There will be.
Speaker 1: Political pain to him, which he's suffering right now, there
Speaker 1: will be pain to America. But isn't it true over
Speaker 1: the course of American history and world history that there
Speaker 1: has to be almost always some pain endured in order
Speaker 1: to take on and solve major problems which are causing
Speaker 1: us great harm, whether you compare it to a war scenario,
Speaker 1: which I know is different in material ways, But but
Speaker 1: isn't that almost always the pattern? There's no painless way
Speaker 1: to take on and defeat these big problems we have
Speaker 1: right now.
Speaker 3: So yes, and no, I think many people, including probably you,
Speaker 3: right now, are overstating the degree of the problem. It
Speaker 3: is a real problem that foreign countries block American producers
Speaker 3: from selling some stuff into these various countries. But how
Speaker 3: big a problem is it? We have four point two
Speaker 3: percent on employment that's actually higher than it was. We
Speaker 3: have faster economic growth than any other Western industrialized nation.
Speaker 3: We have a higher standard of living than any other
Speaker 3: Western industrialized nation.
Speaker 2: So yes, we could be doing a little better.
Speaker 3: But so many people, including Trump, are selling this as
Speaker 3: if we're doing really badly, and we're not. And I
Speaker 3: do think that's important. And I think that the goal
Speaker 3: that you're describing, you know, making you didn't say make everything, but.
Speaker 2: Make lots of stuff here.
Speaker 3: Is somewhere between difficult and impossible, but more importantly, it's
Speaker 3: not desirable.
Speaker 1: Well, and Russ, I understand that your view would be
Speaker 1: and there's no silver bullet, but that these tariffs aren't
Speaker 1: the solution to this. But obviously we're on an unsustainable
Speaker 1: debt and deficit trajectory. I think that in terms of
Speaker 1: the separation between you know, the financial haves and having
Speaker 1: more and the haves not have nots in America, I
Speaker 1: think is unsustainable, you know, politically and in terms of
Speaker 1: national coherence and national unity, I think that national security.
Speaker 2: But how would has help?
Speaker 4: Well?
Speaker 1: I think the point here is that the more we
Speaker 1: can rebuild US manufacturing, right, because I mean, everybody knows
Speaker 1: the stats, right, US manufacturing has really been not completely gutted,
Speaker 1: but substantially reduced since nineteen seventy nine. And these manufacturing jobs,
Speaker 1: they tend to pay better, they tend to be more stable,
Speaker 1: they tend to create other jobs that you know, it
Speaker 1: would benefit this nation. I think in lots of ways
Speaker 1: to have a much more stable, larger manufacturing base in America.
Speaker 2: I couldn't disagree more. I couldn't disagree more.
Speaker 3: Wells most of the areas where we have outsourced, where
Speaker 3: we've outsourced, manufacturing is not the high value stuff, right.
Speaker 2: We manufacture an immense.
Speaker 3: Amount of stuff in America more than ever, and our
Speaker 3: share of global manufacturing it did decline in the early
Speaker 3: part of the rise of China, just like every Western
Speaker 3: nation lost some manufacturing to China, and then it's been
Speaker 3: stabler up since then.
Speaker 2: We manufacture a lot. I don't want us to.
Speaker 3: Make T shirts and sneakers here, and where are you
Speaker 3: going to get the workers?
Speaker 2: And here's the other thing.
Speaker 3: I think that whatever manufacturing does come, an immense amount
Speaker 3: of it is actually going to be done by automation
Speaker 3: and not by people, which would be actually better, right,
Speaker 3: don't I think chasing all these manufacturing jobs just doesn't
Speaker 3: make sense.
Speaker 1: But I think where you get to workers as you
Speaker 1: shift them out of the T shirt manufacturing and you
Speaker 1: shift them into these manufacturing jobs which average about one
Speaker 1: hundred and two thousand dollars a year with the benefits
Speaker 1: package and everything else. But Ross, can you do another
Speaker 1: segment or I know you've been generous with.
Speaker 2: Your time just for you, I will Danne.
Speaker 1: Okay, thank you, my friend. We'll be back with Ross Kominski.
Speaker 1: You're on the Dan Kapla Show.
Speaker 5: And now back to the Dan Kapla Show podcast.
Speaker 4: Wow.
Speaker 1: So glad to have Ross Kominski with us. Does a
Speaker 1: great show nine to noon on eight to fifty KOA.
Speaker 1: We generally disagree a specifics and more broadly on what
Speaker 1: President Trump is doing right now with the tariffs, but
Speaker 1: so great to have Ross's perspective and appreciate you being
Speaker 1: so generous with your time.
Speaker 4: Ross.
Speaker 1: In our last segment together, I really want to zero
Speaker 1: in on a couple of things.
Speaker 4: Sounds to me.
Speaker 1: Tell me if I'm wrong that you're saying that you're
Speaker 1: okay with the status quo right now, You're okay with
Speaker 1: these trade deficits overall, you think America is doing really well.
Speaker 1: You mess with this and is anything substantial you would
Speaker 1: do right now to address the trade deficits?
Speaker 3: Okay, So I think you just put words in my
Speaker 3: mouth that were the exact opposite of all what I
Speaker 3: said a few minutes ago, Right, I said that it
Speaker 3: is I said Donald Trump has identified a legitimate problem
Speaker 3: with other countries having tariffs and other non tariff barriers
Speaker 3: against our products, and I'm glad he's trying to do
Speaker 3: something about it. And if that's all he were trying
Speaker 3: to do, I would probably reach your same conclusion, at
Speaker 3: least at first, before we see how the game plays out. Hey,
Speaker 3: let's give it a try and see how the game
Speaker 3: plays out. But that's not really what he's trying to
Speaker 3: do when he's imposing tariff levels that go way.
Speaker 2: Beyond that and are going to cause a lot of pain.
Speaker 3: The other thing that he's doing by stopping and starting
Speaker 3: and stopping and starting, is he is injecting so much
Speaker 3: uncertainty into the economy that I personally think a recession
Speaker 3: is coming even if you back, because who's gonna make
Speaker 3: multi billion dollar plans based on a guy who can
Speaker 3: change his mind five minutes later. So no, I don't
Speaker 3: think everything's perfect, but I also don't think we're doing
Speaker 3: we're doing badly. I would try to get these other
Speaker 3: places to open markets. Frankly, I don't have the answers
Speaker 3: on everything we could try to do to get them
Speaker 3: to open markets. I would try it, but again, what
Speaker 3: Donald Trump is doing is not primarily about that.
Speaker 1: Well, and I think that is a great way to
Speaker 1: bring this full circle and wrap up this last segment
Speaker 1: that we have about two or three minutes in, because
Speaker 1: I disagree with your premise that this is a very
Speaker 1: long term play for him, rather than leverage to kind
Speaker 1: of reset the deals across the world that matter most now.
Speaker 1: Neither of us can know for sure right We're gonna
Speaker 1: find out together, but I do believe that's his play
Speaker 1: right now. It'll turn out to be a brilliant one.
Speaker 1: It will accomplish a lot, and he and the GOP
Speaker 1: and the country will soar. But we'll find out together
Speaker 1: on that. But Russ, my final question is, and I
Speaker 1: know you you're a very thoughtful guy. You think a
Speaker 1: lot about all of these issues. You're not just any
Speaker 1: kind of Trump hater, But do you really think these
Speaker 1: guys and girls are stupid in the administration? I mean,
Speaker 1: because if you're right about how disastrous this is, it
Speaker 1: would be a historically kind of biblically stupid, well biblically
Speaker 1: strong word, it would be a historically stupid move, and
Speaker 1: that has not been his history.
Speaker 2: So I think it depends on the person.
Speaker 3: I think there are you and I well know from
Speaker 3: our overall experience during COVID society has experienced during COVID
Speaker 3: that just because somebody is an expert or has a
Speaker 3: fabulous degree from somewhere doesn't mean they're right, and definitely
Speaker 3: doesn't mean they're telling you the truth. Now, I do
Speaker 3: think there is something to be said for somebody who
Speaker 3: studied something at a great school, and all that I do.
Speaker 3: I have a little bit of faith and experts. But
Speaker 3: I think Peter Navarro in particular, even though he has
Speaker 3: a Harvard PhD, is a blight on this country, and
Speaker 3: he is either incredibly ignorant of history and economic theory,
Speaker 3: but not just the theory right the actual practice and
Speaker 3: what's happened during trade wars, or he's lying to everybody.
Speaker 3: A lot of the other people who are out there
Speaker 3: talking about this stuff in a positive way, I just
Speaker 3: think they're good soldiers. I think they either don't know
Speaker 3: one way or another, or they don't care. It's my
Speaker 3: job to support the president. I'll go say what he
Speaker 3: wants me to say. So I think it's some combination
Speaker 3: of all that.
Speaker 1: You really don't think Trump's doing this because of Peter Navarro, Right,
Speaker 1: He's not going to bet as president or see in
Speaker 1: the country on that.
Speaker 4: I mean, Mark, the whole bunch of them.
Speaker 1: But but isn't it when you talk about everybody with
Speaker 1: the degrees and everything. Trump's degree is from the University
Speaker 1: of real life, and he's had a lot of success personally,
Speaker 1: a lot of success in his first term financially. So
Speaker 1: what is it that would make you think that suddenly
Speaker 1: he would do something as disastrous as you believe this
Speaker 1: is going to be.
Speaker 2: So Peter Navarro is the symptom, not the cause.
Speaker 3: Trump hired Peter Navarro and has Peter Navarro around him
Speaker 3: because Navarro confirms what.
Speaker 2: Trump has long believed.
Speaker 3: Trump has long been an opponent of free trade, going
Speaker 3: back at least forty years.
Speaker 2: So this is not new. This is why Dan, five.
Speaker 3: Or six weeks ago, for the first time in my
Speaker 3: fifteen years on radio, I went on my radio show
Speaker 3: and told listeners. I have never been more convinced in
Speaker 3: my entire life that the stock market is going down.
Speaker 3: And I am selling stocks, and you know I used
Speaker 3: to be a professional trader, right, so first time in
Speaker 3: fifteen years I did that because I knew that Trump
Speaker 3: is not doing this to even out trade balances. By
Speaker 3: the way, to answer your previous question, I don't care
Speaker 3: about trade deficits.
Speaker 2: There irrelevant.
Speaker 3: Peter Navarro is Lee is confirmation bias for Trump eating
Speaker 3: him down a.
Speaker 2: Very dangerous path.
Speaker 3: And yes, Trump is pretty good at real estate, but
Speaker 3: he doesn't know economics.
Speaker 4: And Ross's you know the music means we're done.
Speaker 1: But I think Trump there have been a lot of
Speaker 1: examples of Trump doing things that really smart people thought
Speaker 1: would fail and he then succeeded.
Speaker 4: And I know we both want this country to succeed,
Speaker 4: and indeed we do.
Speaker 1: Thank you for being with us today. Love your show
Speaker 1: nine to noon on eight to fifty k Awa. Please
Speaker 1: do check out Ross's show if you don't already, look
Speaker 1: forward to the next conversation.
Speaker 3: My friend, Thanks for having me, Thank you you take
Speaker 3: care of Thank you Ryan, Thank you, Kelly