WEBVTT 1 00:00:00.440 --> 00:00:02.919 I almost prefer you over zoom to in person. 2 00:00:06.919 --> 00:00:13.240 Harsh ask not what your country can do for you, 3 00:00:14.160 --> 00:00:16.719 ask what you can do for your country. 4 00:00:16.800 --> 00:00:25.280 Mister girl. But you'll tear down this wall, read my lips. 5 00:00:28.000 --> 00:00:31.480 Welcome everybody to the Ricochet Podcast number seven hundred and 6 00:00:31.480 --> 00:00:34.960 thirty five. This is Steve Heyward sitting in James Lylyc's 7 00:00:35.000 --> 00:00:37.840 chair on top of a booster seat, and I'm joined 8 00:00:37.880 --> 00:00:40.600 with Peter Robinson today with a special guest who is 9 00:00:40.640 --> 00:00:41.320 Steve Hillman. 10 00:00:41.600 --> 00:00:43.159 So let's have ourselves a podcast. 11 00:00:43.479 --> 00:00:46.079 I agree, you'll never get bored with when and we 12 00:00:46.200 --> 00:00:47.119 never get bored? 13 00:00:48.679 --> 00:00:49.560 Well, Peter, here. 14 00:00:49.399 --> 00:00:51.799 We are without the dulcet tones and firm hand of 15 00:00:51.880 --> 00:00:56.439 James Lylac for episode seven thirty five. That's pretty amazing, 16 00:00:56.520 --> 00:00:56.799 isn't it. 17 00:00:57.159 --> 00:01:01.240 Staggering? Absolutely staggering. Oh here's the good news. And having 18 00:01:01.280 --> 00:01:03.920 done seven hundred and thirty five, if we just keep 19 00:01:03.960 --> 00:01:06.599 doing these things, John pot Horritz and the boys and girls, 20 00:01:06.640 --> 00:01:09.400 that commentary will never catch up. I think that's right. 21 00:01:09.480 --> 00:01:12.040 Yeah, although I have to imagine there, how do they 22 00:01:12.040 --> 00:01:13.480 ever go back to get a magazine out? 23 00:01:13.480 --> 00:01:15.159 Oh wait a minute, And of course they will catch up. 24 00:01:15.200 --> 00:01:16.680 Of course they will of course they will. They do 25 00:01:16.680 --> 00:01:18.719 it five days a week. In fact, they've probably done 26 00:01:18.799 --> 00:01:19.879 ten thousand already. 27 00:01:20.439 --> 00:01:22.799 It could be, but I figured you were pard of 28 00:01:22.799 --> 00:01:25.120 the new Math, Peter, which you know, Yes, I don't know. 29 00:01:25.239 --> 00:01:27.799 Right, in the New Math, I'm always a step ahead 30 00:01:27.799 --> 00:01:28.400 of John. 31 00:01:29.000 --> 00:01:31.239 Right right, Well, now, you know, I guess we should 32 00:01:31.319 --> 00:01:36.799 start with two old Reaganites like you and me. Remember 33 00:01:36.920 --> 00:01:40.319 that Reagan fought a v a valiant effort while he 34 00:01:40.359 --> 00:01:44.079 was president to fend off protectionism and defend bolaires. He 35 00:01:44.159 --> 00:01:46.560 was a free trader. Now he did concede a lot. 36 00:01:46.920 --> 00:01:48.879 I went back into research on this recently. 37 00:01:48.920 --> 00:01:50.840 You know, Oh yeah, you would know, you of all 38 00:01:50.840 --> 00:01:53.480 people would know, you'd be the authority they were, go ahead, 39 00:01:53.480 --> 00:01:57.400 do you do the history. But here's my memory is 40 00:01:57.480 --> 00:02:01.480 he made tactical retreats. Yes, only in the interest of 41 00:02:01.519 --> 00:02:04.319 a strategic position, right, yeah, yeah. 42 00:02:04.439 --> 00:02:07.920 The point is he compromised to stave off worse from 43 00:02:07.920 --> 00:02:09.039 his first days in office. 44 00:02:09.159 --> 00:02:09.360 Right. 45 00:02:11.039 --> 00:02:14.719 But I was startled to find out some particulars. For example, 46 00:02:14.759 --> 00:02:19.520 in nineteen eighty six, Reagan threatened Spain with a two 47 00:02:19.639 --> 00:02:23.120 hundred percent tariff across the board in order to get 48 00:02:23.159 --> 00:02:27.479 Spain to relax its restraints on American farm imports to Spain, 49 00:02:27.520 --> 00:02:29.919 and they did right. So Reagan was not a verse 50 00:02:29.960 --> 00:02:33.639 to playing hardball with the trade measures. There were literally 51 00:02:33.840 --> 00:02:36.919 hundreds of bills introduced in Congress, many of them by 52 00:02:37.080 --> 00:02:41.120 Republicans for tariffs and protection, and some of the trade 53 00:02:41.159 --> 00:02:44.159 bills that Reagan vetoed were by Republicans, one of them 54 00:02:44.199 --> 00:02:46.479 by strom Thurmon in his diary talks about how I 55 00:02:46.520 --> 00:02:48.520 had a veto at trade bill. It's a bad bill. 56 00:02:48.879 --> 00:02:51.240 I called up strom Thurman. He took it better than 57 00:02:51.240 --> 00:02:54.000 I thought he would. He said, so, yeah, that's the 58 00:02:54.039 --> 00:02:56.319 point is that you had a you might say, a 59 00:02:56.439 --> 00:03:00.560 trumpest bipartisan majority in favor of protectionism in the eighties. 60 00:03:01.080 --> 00:03:03.719 And and you know, I get impatient my libertarian friends 61 00:03:03.719 --> 00:03:05.960 who say, yeah, Reagan talk like a free trader, but 62 00:03:06.039 --> 00:03:08.280 he was a hypocrite because they ignored that he was 63 00:03:08.319 --> 00:03:12.560 a working politician at a principal man, but a working politician. 64 00:03:12.599 --> 00:03:14.960 You put the two of those together, and if you 65 00:03:14.960 --> 00:03:18.719 can't distinguish between tactics and strategy, you'll just not You'll 66 00:03:18.719 --> 00:03:20.719 make a hash of the Reagan record. You just won't 67 00:03:20.800 --> 00:03:22.120 get it exactly. 68 00:03:22.199 --> 00:03:24.000 And so now the odd thing is there is I 69 00:03:24.039 --> 00:03:28.400 think you'd say a week bipartisan majority now in favor 70 00:03:28.400 --> 00:03:30.919 of liberalized trade, maybe not complete free trade. I think 71 00:03:30.960 --> 00:03:33.280 Democrats are still protectionists at their core. 72 00:03:34.000 --> 00:03:36.759 But I mean I asked question when you talk about 73 00:03:36.759 --> 00:03:38.719 the when you talk about the weak majority in the 74 00:03:38.759 --> 00:03:42.599 old days of weak protectionist majority versus a week free 75 00:03:42.599 --> 00:03:46.680 trade majority today, are you talking about I hate the 76 00:03:46.759 --> 00:03:49.879 term elites, but are you talking about the hill essentially 77 00:03:50.159 --> 00:03:52.759 or are you talking about the general population? Because I 78 00:03:52.840 --> 00:03:55.960 have been very struck that in poll after poll after poll, 79 00:03:56.599 --> 00:04:00.840 the American people are against the majorities very but they're 80 00:04:01.120 --> 00:04:04.960 quite sizable majorities. It's two thirds or so. Thiniffs are 81 00:04:04.960 --> 00:04:08.280 a bad idea. Yeah, you know, what do you have 82 00:04:08.319 --> 00:04:10.000 in mind when you. 83 00:04:09.879 --> 00:04:11.960 I think it's both. I think there's a weak majority. 84 00:04:11.960 --> 00:04:14.319 I think it was a strong majority for protection in 85 00:04:14.360 --> 00:04:17.199 the eighties. I think it's a weak majority. I mean, look, 86 00:04:17.240 --> 00:04:18.639 you know the n After Treaty got through with a 87 00:04:18.680 --> 00:04:20.720 lot of Democratic votes. You know, Bill Clinton had to 88 00:04:20.720 --> 00:04:23.120 break arms to get it through and so forth, and 89 00:04:23.199 --> 00:04:25.439 reel out al Gore to debate Ross Paroe. 90 00:04:25.480 --> 00:04:26.120 You remember that. 91 00:04:26.079 --> 00:04:30.519 Famous moment thirty years ago. Yes, but so I think 92 00:04:30.519 --> 00:04:32.720 it's a weak majority. And then I think the public. 93 00:04:34.000 --> 00:04:36.279 You know, my hunch about that, Peter, is that people 94 00:04:36.519 --> 00:04:40.000 like getting inexpensive consumer goods. They say, the maid in 95 00:04:40.079 --> 00:04:43.920 China made in Vietnam on the labels, And I think 96 00:04:44.000 --> 00:04:47.800 in an unsophisticated way, they recognize the benefits of liberalized trade. 97 00:04:47.879 --> 00:04:51.639 It's benefited especially lower in common working class people, right, 98 00:04:52.800 --> 00:04:56.120 and I think they understand that tariffs could blow up 99 00:04:56.160 --> 00:04:58.680 and make their lives more expensive. Again, I don't know 100 00:04:59.480 --> 00:05:02.319 that's a I'm surprised there are more surveys that try 101 00:05:02.360 --> 00:05:04.560 to get at that more deeply because I've seen the 102 00:05:04.560 --> 00:05:06.639 same numbers that you have that people oppose it. But 103 00:05:07.680 --> 00:05:12.000 that may be an odd combination of Republicans who don't 104 00:05:12.079 --> 00:05:15.680 like trade protection and Democrats who are opportunists. So I 105 00:05:15.680 --> 00:05:17.839 think right now there's a lot of opportunists. I mean, 106 00:05:18.040 --> 00:05:20.560 my joke is this boy Trump is a genius. Think 107 00:05:20.639 --> 00:05:23.000 of the things Trump has accomplished in the last several months. 108 00:05:23.079 --> 00:05:25.800 He's made Democrats hay to Kennedy, We've been trying to 109 00:05:25.839 --> 00:05:29.399 do that for sixty years, right, Yeah, what else has 110 00:05:29.439 --> 00:05:32.399 he done? The other one now is that he's made 111 00:05:32.399 --> 00:05:34.839 Democrats come out against a tax increase, which is what 112 00:05:34.879 --> 00:05:37.399 a terriff essentially is, and in favor of free trade. 113 00:05:37.720 --> 00:05:39.680 I mean, there's you know, I don't go in for 114 00:05:39.759 --> 00:05:41.680 the three D chess stuff very deeply, but I do 115 00:05:41.839 --> 00:05:45.839 wonder sometimes what the political thought behind all this is, 116 00:05:45.839 --> 00:05:47.560 because it certainly confused the scene. 117 00:05:48.199 --> 00:05:51.560 Yeah, it has confused the scene at a minimum. So 118 00:05:52.319 --> 00:05:56.160 let's rehearse the argument, shall we? Very briefly? Excuse me? 119 00:05:56.160 --> 00:05:58.040 What I mean is, let me rehearse the arguments and 120 00:05:58.040 --> 00:06:00.240 then you tell me where I'm right or wrong, as 121 00:06:00.279 --> 00:06:02.160 I understand it. First. So, first of all, we have 122 00:06:02.279 --> 00:06:05.040 that we can grant. I think we can stipulate that 123 00:06:06.519 --> 00:06:10.040 even a very cursory examination of American history shows that 124 00:06:10.079 --> 00:06:14.560 the protectionist impulse, I would almost call it a protectionist temptation, 125 00:06:14.800 --> 00:06:18.480 is permanent. It is always with us. You are always 126 00:06:18.480 --> 00:06:21.879 going to find political figures, major political figures, at any 127 00:06:21.879 --> 00:06:25.839 given time, who are willing or insist on putting up 128 00:06:25.839 --> 00:06:32.480 protectionist barriers. Item one. Item two. You have the counter 129 00:06:32.680 --> 00:06:38.079 argument of Milton Friedman. For example, Milton had what I 130 00:06:38.079 --> 00:06:40.680 would call the strong free trade position, which is that 131 00:06:41.839 --> 00:06:44.720 it is always in your favor to engage in free trade, 132 00:06:45.199 --> 00:06:49.480 even if your counterparties are not we hear a lot 133 00:06:49.480 --> 00:06:52.319 about I can remember Milton saying, as you know, I 134 00:06:52.399 --> 00:06:55.959 knew Milton Friedman in his final years when I overlapped 135 00:06:56.000 --> 00:06:57.519 him for a few years at the Heritage at the 136 00:06:57.560 --> 00:06:59.720 Hoover Institution. In fact, his office was down the hall 137 00:06:59.759 --> 00:07:04.279 from so Milton would say, we hear a lot about 138 00:07:05.120 --> 00:07:08.319 Chinese dumping products in the United States. What that means 139 00:07:08.360 --> 00:07:10.639 is they're willing to give us their products for less 140 00:07:10.639 --> 00:07:13.519 than it costs them to produce them. If they intend 141 00:07:13.600 --> 00:07:16.360 to make us a gift, why should we object Over 142 00:07:16.399 --> 00:07:19.199 the longer term, the people who are out are the Chinese, 143 00:07:19.519 --> 00:07:24.279 not us. Okay, So that's the strong argument. The counter 144 00:07:24.439 --> 00:07:29.600 argument is that if you're going to engage in a 145 00:07:29.600 --> 00:07:33.480 welfare state. Actually I had this conversation with an economist, 146 00:07:34.000 --> 00:07:36.560 my friend Tom McCurdy, who argued the point with Milton 147 00:07:36.600 --> 00:07:39.800 Friedman himself, and Tom argues that if you're going to engage, 148 00:07:39.800 --> 00:07:43.079 if you're going to set up a welfare state, then 149 00:07:43.120 --> 00:07:46.240 you have to think twice about free trade, because you 150 00:07:46.319 --> 00:07:50.680 have two ways of helping the poorer people. One is 151 00:07:51.399 --> 00:07:55.160 income transfers and that runs through the tax system. The 152 00:07:55.199 --> 00:08:01.199 other is to increase their wages and that would imply tariffs. 153 00:08:02.240 --> 00:08:05.360 And if you use tariffs to increase their wages and 154 00:08:05.480 --> 00:08:08.839 benefit workers, you don't have to run it through the 155 00:08:08.839 --> 00:08:11.600 federal government. In a certain it is a tax, there's 156 00:08:11.600 --> 00:08:13.240 no doubt about that, but you don't have to send 157 00:08:13.240 --> 00:08:15.480 it to the IRS and get bureaucrats involved who will 158 00:08:15.519 --> 00:08:18.319 take the viig so to speak. And Tom said, in 159 00:08:18.360 --> 00:08:21.279 a certain sense, you could even argue that tariffs are 160 00:08:21.319 --> 00:08:27.199 a more efficient way of benefiting workers, the less privileged, 161 00:08:27.519 --> 00:08:31.399 less privileged persons in the United States. Okay, So you 162 00:08:31.399 --> 00:08:33.360 put all that together, and there's some pros and there 163 00:08:33.360 --> 00:08:35.720 are some cons. What do you make of it? Of 164 00:08:35.759 --> 00:08:38.440 the artica, I'm not yeah, I'm not sure I buy that. 165 00:08:38.639 --> 00:08:41.320 I think there are better arguments, one for in favor 166 00:08:41.360 --> 00:08:43.519 of tariffs. 167 00:08:42.519 --> 00:08:44.919 Better arguments in favor. Okay, give me your best argument 168 00:08:45.000 --> 00:08:45.919 in favor of tariffs. 169 00:08:45.960 --> 00:08:48.360 Well, let me just say make one comment about that, 170 00:08:48.360 --> 00:08:51.480 the argument you just gave, which is, tariffs may protect 171 00:08:51.600 --> 00:08:54.759 domestic workers' wages, but only at the effect of lowering 172 00:08:54.759 --> 00:08:57.440 the wages of workers overseas. And it takes a lot 173 00:08:57.480 --> 00:08:59.679 to explain why that's true. And I think that makes 174 00:08:59.679 --> 00:09:02.759 her stability in trading relations and so forth and can't 175 00:09:02.759 --> 00:09:05.799 be sustained over time, which is why it's likely a mistake. 176 00:09:06.360 --> 00:09:08.759 I think the argument in favor of tariffs is not 177 00:09:08.840 --> 00:09:13.840 their intrinsive sweet goodness or whatever Trump is saying about them. 178 00:09:14.240 --> 00:09:17.360 It's that they are an important tool for two reasons. 179 00:09:17.399 --> 00:09:21.720 One is when other nations are practicing predatory trade, which 180 00:09:21.759 --> 00:09:23.519 certainly would be the case of China, and they do 181 00:09:23.559 --> 00:09:25.919 that two ways, either by dumping or in the case 182 00:09:25.960 --> 00:09:30.080 of China, currency manipulation, which means that the basics straight 183 00:09:30.159 --> 00:09:33.159 up econ one oh one flows of currencies that would 184 00:09:33.159 --> 00:09:37.639 adjust their values, and then the currency we send overseas 185 00:09:37.679 --> 00:09:39.320 to buy stuff comes back here in the form of 186 00:09:39.320 --> 00:09:44.720 investment capital. It distorts all that badly. And then remember domestically, 187 00:09:44.759 --> 00:09:49.080 the theory about why trade protections that could be justified 188 00:09:49.200 --> 00:09:52.399 is the same as antitrusts. Right, we prosecute predatory pricing 189 00:09:52.919 --> 00:09:57.159 where someone credibly uses predator rate. That's right, Yeah, you 190 00:09:57.480 --> 00:09:59.360 want to crush your competition. Then you have a monopoly 191 00:09:59.360 --> 00:10:02.399 and you get monopo rents. As the economist would say, 192 00:10:02.720 --> 00:10:04.960 I think those are both sort of limited, and the 193 00:10:05.000 --> 00:10:07.919 basic idea the trade deficit is in and of itself bad. 194 00:10:08.039 --> 00:10:11.840 Is just I think economically illiterate and totally Trump seems 195 00:10:11.879 --> 00:10:12.639 to have bought into that. 196 00:10:12.679 --> 00:10:15.200 I don't know whether he is. It possible that he 197 00:10:15.200 --> 00:10:17.799 doesn't know better himself. I mean, the argument is Jonah 198 00:10:18.000 --> 00:10:20.519 mentioned someplace in the web the other day that if 199 00:10:20.559 --> 00:10:24.320 you go into whatever, you go into McDonald's and buy 200 00:10:24.320 --> 00:10:27.480 a hamburger. On the Trump argument, McDonald's is stealing from 201 00:10:27.480 --> 00:10:29.679 you unless they buy your Jeanes in return. 202 00:10:30.159 --> 00:10:33.399 Yes, John, you and I have been talking about how 203 00:10:33.399 --> 00:10:35.919 we need a tariff against McDonald's for their untrair trade 204 00:10:35.960 --> 00:10:41.200 advantages over us, especially with that predatory product that mcribb 205 00:10:41.279 --> 00:10:44.519 that he loves so much. Yeah, you know, Look, I 206 00:10:44.519 --> 00:10:49.240 think Trump's instincts and its policies are mostly fantastic. But 207 00:10:49.320 --> 00:10:51.039 I have joked over the years that I don't think 208 00:10:51.039 --> 00:10:53.679 he knows the difference between Friedrich Heydrich and the Selma 209 00:10:53.720 --> 00:10:55.799 Hayaks the problem. 210 00:10:55.879 --> 00:10:56.080 Right. 211 00:10:57.200 --> 00:10:59.960 It pains me to say this, but it's very worrying because, 212 00:11:00.360 --> 00:11:03.200 again going back to the Reagan example, the Reagan people 213 00:11:03.279 --> 00:11:06.399 knew from day one that if they didn't fix the economy, 214 00:11:06.799 --> 00:11:10.080 they couldn't accomplish anything else they wanted to do. And 215 00:11:10.120 --> 00:11:12.519 now the hazard for Trump, who I think has made 216 00:11:12.519 --> 00:11:15.320 the biggest bet of any president ever perhaps is that 217 00:11:15.360 --> 00:11:17.919 if he screws up economy, it's going to crush all 218 00:11:17.960 --> 00:11:19.799 the other great things that he's doing. 219 00:11:20.759 --> 00:11:24.559 So I think a correct as far as that goes. 220 00:11:24.840 --> 00:11:28.000 But b if you're going to try to save the economy, 221 00:11:28.080 --> 00:11:29.600 if you know, if you screw it up, you can 222 00:11:29.679 --> 00:11:32.720 get nothing else done, then you say to yourself in politics, 223 00:11:32.759 --> 00:11:37.080 as you know, Steve's sequencing matters, and this guy has 224 00:11:37.159 --> 00:11:42.200 decided to impose tariffs, caused turmoil in the market, shrink 225 00:11:42.279 --> 00:11:47.120 everybody's four O one K, and then extend his tax cuts. 226 00:11:47.679 --> 00:11:50.240 He only has a margin of three or four seats 227 00:11:50.240 --> 00:11:52.480 in the House on a good day. All you have 228 00:11:52.519 --> 00:11:55.759 to do. He's already lost four Republicans in the Senate. 229 00:11:55.799 --> 00:11:59.519 He has already he's got four Republicans McConnell, the usual 230 00:11:59.600 --> 00:12:04.600 suspect mckowski, Collins, but also Rand Paul have now voted 231 00:12:04.679 --> 00:12:10.039 against Trump to reduce or eliminate the tariffs on Canada. 232 00:12:10.240 --> 00:12:13.480 You just get this slight stirring in the Senate of 233 00:12:13.519 --> 00:12:16.200 the constitutional position of the Congress, which is that the 234 00:12:16.279 --> 00:12:21.960 Constitution gives Congress authority over tariffs and taxation, not the president. Well, 235 00:12:22.159 --> 00:12:24.679 if you lose rand Paul, you're in a position to 236 00:12:24.759 --> 00:12:27.559 lose three four or five a dozen in the House. 237 00:12:27.600 --> 00:12:30.080 And if you do that, as you're coming up on 238 00:12:30.120 --> 00:12:34.200 an extremely complicated, huge bill, to the centerpiece of which 239 00:12:34.240 --> 00:12:37.159 is to extend the tax cuts, and that fails, or 240 00:12:37.159 --> 00:12:39.240 it gets hung up, or it gets turns into a 241 00:12:39.279 --> 00:12:43.120 long protracted process, he will get wiped out in the midterms. 242 00:12:43.320 --> 00:12:45.240 It is to me, it is just a sa right, 243 00:12:46.080 --> 00:12:49.120 and then he's done. Then he's just done. Well, my 244 00:12:49.200 --> 00:12:52.399 big worry immediately, not the midterms, is this could screw 245 00:12:52.440 --> 00:12:54.519 up the tax bill. You can see things on that 246 00:12:55.080 --> 00:12:58.559 next right. Yeah, exactly what I'm saying. Exactly what I'm saying. Well, 247 00:12:58.639 --> 00:13:00.559 let's get out with I'll give you two more quotes, Peter. 248 00:13:00.639 --> 00:13:03.480 You'll like our instances that I'm getting animated on. I'm 249 00:13:03.480 --> 00:13:07.720 getting animated on the anti tariff side. But I mean 250 00:13:07.759 --> 00:13:10.519 as you are. I was about to say, gamely pointing out, 251 00:13:10.519 --> 00:13:13.200 but you're doing it more than gamely. You're granting real 252 00:13:13.240 --> 00:13:17.639 credence to the pro tariff It's particularly if he's using 253 00:13:17.639 --> 00:13:20.039 them just as a tool for if the idea is 254 00:13:20.080 --> 00:13:23.039 imposed tariffs to get to a world without tariffs. All right, 255 00:13:23.120 --> 00:13:26.759 that's sensible. You can argue about sequencing and how you 256 00:13:26.799 --> 00:13:28.720 do it and so forth, but at least there's a 257 00:13:28.720 --> 00:13:32.919 at least there he has tariffs become tactics in the 258 00:13:32.960 --> 00:13:35.799 interest of a larger and sensible strategy. Yeah. 259 00:13:35.840 --> 00:13:37.399 Well, let me give you three quick quotes to get 260 00:13:37.480 --> 00:13:39.840 us out, because we're going forever on this one. Is 261 00:13:40.840 --> 00:13:42.799 you know, here we are, as we're talking, the stock 262 00:13:42.840 --> 00:13:45.679 market is crashing for a second day. And I remember 263 00:13:45.720 --> 00:13:47.559 there's a moment in the fall of nineteen eighty one 264 00:13:47.600 --> 00:13:50.399 when the stock markets started going down after Reagan's tax 265 00:13:50.440 --> 00:13:53.759 cut pass tax cuts passed, and a reporter, you know, 266 00:13:53.840 --> 00:13:57.279 a typical antagonistic border said, gee, mister President, wall Street 267 00:13:57.279 --> 00:13:59.960 doesn't seem to think very much of your economic policy. 268 00:14:00.440 --> 00:14:03.399 And Reagan's response was, I've never found wall Street to 269 00:14:03.440 --> 00:14:05.919 be a very good source of economic advice, which I 270 00:14:06.000 --> 00:14:06.919 thought was terrific. 271 00:14:07.000 --> 00:14:07.639 Right boom. 272 00:14:08.159 --> 00:14:11.120 But then I got to thinking about something a little older, 273 00:14:11.799 --> 00:14:14.480 back in the nineteen twenties, when Churchill was Chancellor of 274 00:14:14.519 --> 00:14:17.960 the Exchecker and facing a decision that is parallels this 275 00:14:18.000 --> 00:14:21.159 one in some respects, and it was when and at 276 00:14:21.200 --> 00:14:24.759 what valuation to return to the gold standard, which they botched. Yes, 277 00:14:25.000 --> 00:14:26.759 but he had a line that it sounds very trumpy, 278 00:14:26.759 --> 00:14:29.799 and he said I would rather see finance less proud 279 00:14:30.120 --> 00:14:33.840 and industry more content. That is, in substance what the 280 00:14:34.080 --> 00:14:35.480 Trump pro tear people say. 281 00:14:35.639 --> 00:14:37.960 All right, they want to, except that industry doesn't seem 282 00:14:38.000 --> 00:14:41.559 to be content at all. I correct winging and whining 283 00:14:41.639 --> 00:14:46.120 and re shoring, as the term now goes very grudgingly. Well, 284 00:14:46.200 --> 00:14:50.440 in particularly these tariffs. Some there are industries that over 285 00:14:50.440 --> 00:14:53.279 the last couple of years has made a real effort 286 00:14:53.279 --> 00:14:55.360 to get their supply chains out of China, so they've 287 00:14:55.360 --> 00:14:57.720 put them in places such as the Philippines and Vietnam. 288 00:14:58.120 --> 00:15:03.519 Boom Trump puts on them as well. Yeah, all right, well, 289 00:15:03.559 --> 00:15:06.360 I'm sure, I'm not sure contented industry is quite the 290 00:15:06.440 --> 00:15:07.080 right way to put it. 291 00:15:07.120 --> 00:15:11.679 Well, no, I mean there's evidence that capital investment is 292 00:15:11.840 --> 00:15:14.399 pausing right now, which is a bad thing. Yeah, because 293 00:15:14.399 --> 00:15:15.240 of the uncertainty. 294 00:15:15.919 --> 00:15:16.960 But I did dust off. 295 00:15:17.639 --> 00:15:19.799 It's very rare that I would say anything nice about 296 00:15:19.840 --> 00:15:22.200 John Maynard Keynes, but he wrote a pretty good essay 297 00:15:22.320 --> 00:15:26.879 at the time called the Economic Conquences Economic Consequences of 298 00:15:26.919 --> 00:15:29.639 mister Churchill, And after going through a very coach and 299 00:15:29.679 --> 00:15:32.320 explanation about why they made a mistake in their valuation 300 00:15:32.480 --> 00:15:35.080 point for gold, he has a sentence which you can 301 00:15:35.159 --> 00:15:37.960 use right now. He said, what now faces the government 302 00:15:38.080 --> 00:15:41.679 is the ticklish task of carrying out their own dangerous 303 00:15:41.720 --> 00:15:45.480 and unnecessary decision. I have a hard time running away 304 00:15:45.480 --> 00:15:47.240 from that right now, but I'm hoping for the best. 305 00:15:48.000 --> 00:15:50.879 There's a lot more illumination we can bring to the subject, Peter. 306 00:15:52.000 --> 00:15:55.759 But right now, that reminds me that speaking of illuminating 307 00:15:55.799 --> 00:15:57.240 things are sponsored Lumen. 308 00:15:57.759 --> 00:16:01.639 Well done, well done, well done. I mean, right up 309 00:16:01.679 --> 00:16:03.879 until the last moment you had me wondering where you 310 00:16:03.879 --> 00:16:04.360 were going. 311 00:16:05.360 --> 00:16:08.639 Did you know that when your metabolism is working properly, 312 00:16:08.840 --> 00:16:11.679 you will feel that benefits in literally every aspect of 313 00:16:11.720 --> 00:16:15.000 your life. 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Then Lumen gives you a personalized nutrition plan 325 00:16:50.960 --> 00:16:53.919 for that day based on your measurements. You can also 326 00:16:53.960 --> 00:16:56.679 breathe into it before and after workouts and meals, so 327 00:16:56.759 --> 00:17:00.039 you know exactly what's going on in your body in 328 00:17:00.080 --> 00:17:02.720 real time, and Luhman will give you tips to keep 329 00:17:02.759 --> 00:17:05.359 you on the top of your health game. James, Robin, 330 00:17:05.440 --> 00:17:08.160 Peter all use Lumen. I've got mine on order because 331 00:17:08.160 --> 00:17:11.039 I certainly need help in the carbs and proteins department. 332 00:17:11.519 --> 00:17:15.359 And so we thank Luman for sponsoring this the Ricochet Podcast. 333 00:17:16.519 --> 00:17:18.960 Steve Hilton joins us. Now you may know him well 334 00:17:18.960 --> 00:17:21.000 from Fox News, but you should know him now for 335 00:17:21.079 --> 00:17:25.359 his brand new book called Cali Failure and Boy. For 336 00:17:25.400 --> 00:17:27.920 a native of California like me, and for a transplant 337 00:17:28.000 --> 00:17:30.000 like Peter. This is a subject near and dear to 338 00:17:30.079 --> 00:17:32.599 our heart and about which we have lots of thoughts. 339 00:17:32.640 --> 00:17:35.359 But we want to hear yours. So, Steve Hilton, welcome 340 00:17:35.400 --> 00:17:36.519 to the Ricochet Podcast. 341 00:17:36.720 --> 00:17:38.640 It's fantastic to be with that. I'm so happy we 342 00:17:38.680 --> 00:17:39.160 could do this. 343 00:17:39.400 --> 00:17:39.839 It's great. 344 00:17:39.839 --> 00:17:42.359 I don't know what you know. I feel terrible, Peter, 345 00:17:42.440 --> 00:17:45.079 you know, it's so why haven't I done this before? 346 00:17:45.359 --> 00:17:49.279 It's exactly exactly, and we see each other quite often. 347 00:17:49.319 --> 00:17:51.240 Actually we only live a few miles apart. We should 348 00:17:51.319 --> 00:17:53.880 simply start recording our own conversations. Oh, Steve, let me 349 00:17:53.880 --> 00:17:58.079 ask you the large question. Yeah, I'll give you the 350 00:17:58.200 --> 00:18:01.519 large questions. A touch of biography here so you can 351 00:18:01.559 --> 00:18:03.559 see why I really care about this question. 352 00:18:03.640 --> 00:18:03.720 So. 353 00:18:03.759 --> 00:18:06.720 I grew up in the Northeast. I had relations who 354 00:18:06.720 --> 00:18:09.480 had moved to California and written at the end of 355 00:18:09.480 --> 00:18:11.960 the nineteenth century, as it happens, and in the family 356 00:18:11.960 --> 00:18:15.119 collection we have letters that they wrote back to the 357 00:18:15.160 --> 00:18:19.480 men who are still farming northeastern Pennsylvania, and they said, 358 00:18:19.559 --> 00:18:23.480 come to California. You don't go through another winter again 359 00:18:23.880 --> 00:18:28.440 with just they were describing paradise. I worked for Ronald 360 00:18:28.480 --> 00:18:32.039 Reagan in the White House. Reagan his old California hands 361 00:18:32.240 --> 00:18:36.319 ed Meese Linnofziger. They spoke about California as if it 362 00:18:36.319 --> 00:18:40.720 were paradise. They really loved it. It meant everything to them. 363 00:18:41.000 --> 00:18:44.559 Ronald Reagan himself used to say that if the Pilgrims 364 00:18:44.559 --> 00:18:48.119 had landed in California instead of back east, nobody would 365 00:18:48.119 --> 00:18:51.480 ever have bothered to discover the rest of the country. 366 00:18:51.920 --> 00:18:54.640 The state was that beautiful, It was that much of 367 00:18:54.680 --> 00:18:58.599 a paradise to ordinary working people, which, by the way, 368 00:18:58.640 --> 00:19:02.119 the families of Ed Mees and lindov Sigger and Ronald 369 00:19:02.160 --> 00:19:07.680 Reagan were when they went to California. What went wrong? 370 00:19:08.359 --> 00:19:11.240 How could you take a state so blessed with talent 371 00:19:11.680 --> 00:19:17.039 and beauty and natural resources? What went wrong? Well? 372 00:19:17.559 --> 00:19:20.440 I first want to underline how much I agree with 373 00:19:20.599 --> 00:19:24.759 all those sentiments, and I'd add or add to it. 374 00:19:24.759 --> 00:19:27.799 It's not just the physical beauty, their magnificence of our 375 00:19:27.880 --> 00:19:30.759 landscapes and the diversity of them, and the weather and 376 00:19:30.759 --> 00:19:34.559 all those things. There's also something magical and inspirational about 377 00:19:34.599 --> 00:19:38.559 the idea of California, the ideal of what California represents. 378 00:19:38.720 --> 00:19:44.319 And to me, there's a spiritual, emotional, intellectual dimension to it. 379 00:19:44.319 --> 00:19:47.359 It's not just it's the most amazing place to live 380 00:19:47.400 --> 00:19:50.680 in that sense, or should be. It's that it represents 381 00:19:50.720 --> 00:19:54.359 the best of what I think of as America. And 382 00:19:54.400 --> 00:19:56.559 there's a line, right, I think it's actually the first 383 00:19:56.599 --> 00:19:58.960 line in the but I can't recall now, But which 384 00:19:59.000 --> 00:20:02.400 is this? I I feel very strongly about this. California 385 00:20:02.519 --> 00:20:06.440 means to America, what America means to the world. And 386 00:20:06.519 --> 00:20:10.640 what I mean by that is that I had this 387 00:20:12.200 --> 00:20:16.720 love for California even before we moved here, and it 388 00:20:17.640 --> 00:20:21.160 represented to me the best of what I thought of 389 00:20:21.240 --> 00:20:24.480 as America. And we can throw around words, but I 390 00:20:24.480 --> 00:20:26.759 think we all kind of have a feeling for, you know, 391 00:20:26.799 --> 00:20:31.200 innovation and energy and optimism and ambition and swagger and 392 00:20:31.319 --> 00:20:36.160 start up hustle and this sense of anything is possible, 393 00:20:36.640 --> 00:20:39.319 and also another dimension which is less referred to, but 394 00:20:39.400 --> 00:20:42.440 I feel it very strongly, and it very much connects 395 00:20:42.440 --> 00:20:46.559 to where things have gone wrong, the rebel spirit. That's 396 00:20:46.599 --> 00:20:51.680 why we've got so many people creating in this incredible industry. 397 00:20:51.720 --> 00:20:54.759 You know that's Hollywood, you know, centur Aco or Silicon 398 00:20:54.880 --> 00:20:58.160 Valley and so on. Inventions and just the rebels and 399 00:20:58.200 --> 00:21:00.640 the builders and the dreamers and the creat that's what 400 00:21:00.680 --> 00:21:03.680 it's all about. And I felt that very strongly. I'll 401 00:21:03.680 --> 00:21:06.359