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March 6, 2025 - Dinesh D'Souza
57:00
MAKING SENSE OF TARIFFS Dinesh D’Souza Podcast Ep1035
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Thank you.
Thank you.
Coming up, I'll make the case that far from being the instigator of a constitutional crisis, Trump is in fact a needed response to a constitutional crisis created by the Democrats.
The theme of today's podcast is tariffs, and I have a distinguished economist, Brian Westbury, chief economist at First Trust Advisors.
He's going to join me to really dig into this issue of tariffs and see how they fit into a comprehensive look at Trump's economic America
needs this voice.
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The Trump movement is often accused of driving a constitutional crisis in this country.
I want to argue that the movement is in fact a response to a constitutional crisis that had been created by the Democrats under the Biden-Harris regime.
Think about it.
Those guys thought that they could turn the government into a massive grift operation, a massive transfer of wealth to them.
Via government programs and government surrogates.
I'm talking here about the NGOs.
And politicians would essentially think of it this way.
You allocate money to the NGO. The NGO doesn't really do anything, but it's populated by your friends, your relatives, your in-laws, fellow Democrats.
And then they turn around and give some of that money back to your campaign.
Your coffers, your operations.
So this is the corruption aspect of it.
And the other part of it was to turn the government into a militarized regime against political opponents, partly in order to keep this grift operation going permanently.
So this is truly a constitutional crisis.
This is nothing even close to what the founders anticipated.
It is a system radically detached from what the founders envisioned.
And so Trump is far from creating a constitutional crisis.
He is the cure for it.
He is trying to do restoration.
And as we're seeing, it's not entirely easy to do.
The good news is that people are waking up to the Democratic Party.
It's really great.
I share pretty much every day some videos on social media of former Democrats, people who are like, that's it.
That's enough.
I'm out.
We saw a bunch of new ones just in response to Trump's address to Congress.
And the cold, kind of callous, almost like witch-like response by the Democrats has caused a bunch of people.
Now, it's not that people are watching the address or a single event and going, that's it.
It's rather that they have become...
Progressively, if I can use that word, disillusion with the Democratic Party, and this then becomes like the last straw.
I also think that it's becoming increasingly clear that there is no great democratic kind of grassroots machine.
These are people who are all paid.
They're paid by Soros, but even more importantly, they're paid by USAID. They're paid by the government itself.
So, defunding the Democrats, defunding through Doge is a way of cutting off the Democrats from these sources of support.
And then it turns out that the only Democrats left when you do that are the mentally ill, the race baiters, the communists, the feminists.
I mean, basically it's a freak show.
That's what's left.
Because those people will be Democrats even if you don't pay them.
By themselves, they're not that formidable.
The rest of the operation has been cut off.
Sometimes I look at things and it gives me a double take, and it gives Debbie a double take.
So the other day we both see that the Department of Veterans Affairs is considering...
Laying off 80,000 workers.
And Debbie's like, this is troubling because it's like veterans.
Of course, the Democrats are going to jump off.
Newfound love of veterans.
By the way, when the veterans were all being let go because they wouldn't take the vaccine, the Democrats were smug.
They're like, let's punish them.
Let's teach these people a lesson.
Now, suddenly, they are gravely concerned for their families, their mortgages, and so on.
My reaction was, wait a minute.
You know, we tend to lose our perspective here.
What is the Department of Veterans Affairs doing employing not 80,000 people, but some larger number in which you can cut 80,000 people and still do the same thing?
In other words, if I, in the abstract, you were to tell me, you know, just arrive from Mars, and you say, you know, we have this Department of Veterans.
And I'm like, does this department fight wars?
No.
Does it directly run hospitals?
Not necessarily.
It is kind of a clearinghouse.
Well, how many people should be working there?
I would say, well, I guess maybe 500, maybe 800. Okay, if I'm underestimating the magnitude of the tasks involved, maybe 8,000.
But 80,000?
Or such a large number that you can cut 80,000 and there's still a bunch of people left?
I mean, you have to enlighten me in what the Department of Veterans is doing to require the population of a medium-sized town to be working for it.
And this, by the way, applies to the other departments as well.
When you see the stuff that Elon Musk is dredging up...
You just begin to see the magnitude here of the looting of the taxpayer, looting of you and me, really.
Elon Musk says, there are almost twice as many credit purchasing cards in the government as there are people in the government.
Think about that.
Let's just say, this happens to be true, about 2.2 million people in the federal workforce.
Imagine if you've given these people 4.4 million.
Million credit cards.
Frankly, when I was at the medium level in the government in my 20s, I didn't have a government credit card.
I spent my own money.
This idea that all these people have government credit cards, who knows the level of abuse that's going on with these cards?
Number two.
The Trump administration is now proposing to sell 443 federal buildings.
And some of it is downright funny because this is like the Nancy Pelosi building.
Some of these buildings named after Democrats are being unloaded.
And you begin to think that maybe this is Trump's motive.
But when you look at it again more closely, you realize that there is an actual inventory out here about the occupation level of these buildings.
And you will be downright shocked.
To realize that many of these buildings are at like 8% occupancy, 12% occupancy, or even 50% occupancy.
Think about it.
If you have 50% occupancy, that means for every two buildings, you can sell one and move the people in that building into the other building.
It's kind of like an apartment complex.
It's got 400 units, but only 200 people are staying there.
Guess what?
You've got 200 vacancies.
But in the government, they just don't care.
Why?
Because they're spending other...
People's money.
That's the heart of the matter.
Now, I have coming on to join me a very good economist, Brian Westbury.
I want today's episode to focus on the issue of tariffs.
And tariffs are a little bit of a complex issue and an issue on which I have to say I have strong anxieties about what is going on and the prospects for trade wars, which generally are not good.
Let's also remember that tariffs were one of the factors that...
He's a very commonsensical guy.
Along with me, he shares this kind of desire to take things down to first principles.
Let's just talk basically about what a tariff is and what a tariff does.
I think you'll find the conversation very illuminating.
It'll help you think for yourself about this issue.
And this is a topic that I'm going to continue to be talking about on the podcast.
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Guys, I'm delighted to welcome back to the podcast.
One of my favorite guests, and in fact, a distinguished economist and analyst who will help us to make sense of what is going on with Trump, and particularly with his economic policies.
Brian Westbury is the chief economist at First Trust Advisors.
He's also a member of the Academic Advisory Council.
of the Federal Reserve Bank of Chicago.
He was named a fellow of the George W. Bush Presidential Center in Dallas.
Brian, we won't hold that too much against you.
Oh, they might have fired you by now.
Yes, the letter is in the mail.
You can follow Brian on X at Westbury, W-E-S-B-U-R-Y, the website ftportfolios.com.
Brian, great.
Thanks for joining me.
I know you're on the move, so you're joining from a hotel room.
But there's a lot going on here with Trump.
He has come to power as part of this populist wave.
And he has an ensemble of policies that seem to be in the realm of taxes, regulation, the whole Doge enterprise to identify waste and fraud, tariffs.
And some of it, of course, is completely consistent with what you and I would identify as classical conservatism going back to the Reagan days, but some of it is not.
And that's why I want you, because you're the guy here to help us make sense of all this.
So give us a little context, if you will, for what Trump is up to here.
Not since that election, you know, Reagan defeating Carter.
It was about a change in philosophy.
The voters, the Americans kind of grabbed back the Constitution, if you will, and we did it again.
And then the question is, where do we go from here?
There's 40 things he's doing.
I don't know.
There might be 140, but let's just say 40. And there's about three of them that scare me a little.
Two that...
Truly, I don't like.
Sovereign Wealth Fund, I do not like because I think if we put Trump and Musk and percent in charge of that Sovereign Wealth Fund, it would be fine.
But four years from now, eight years from now, 12 years from now, somebody else that we don't want is going to be in charge of that fund, and that's why I don't like it.
I also don't think we ought to...
We've had experience with that in the history of America, buying silver or buying gold.
If we're not on a gold standard or a silver standard, a bimetal standard, we shouldn't do that.
And then the last one, which I know we're going to talk about extensively today, is tariffs.
They scare me.
I'm a free market guy, and I know you are too, and tariffs are a tax.
They're kind of a violation of free markets.
Now, the question is, do they make sense?
And where's this coming from?
And just give me a minute and a half here, a minute, to talk about this, Dinesh.
Keynes and Keynesian...
Economists believe that savings is kind of a drain.
And so what we want to do is we want to tax people with a higher marginal propensity to save, the billionaires, the millionaires, the high-income people, and we want to give it.
To people with a higher marginal propensity to consume.
So we're going to take it away from people who might save it, give it to people who are going to spend it, and then through that, we boost consumption.
And if you're a Keynesian, you believe consumption is what drives growth.
The problem with that is that a free market view of this is that we need savings and investment.
We have to invest in order to make things more productive.
And so if we look at the last 20 years in America, consumption is going like this and production is flat.
And that's why we've gone from a $20 billion trade deficit every month to $100 billion every month.
And we're consuming more than we're producing.
And the way you make up the difference is you import.
So what happens is our manufacturing base, we can't make all the Tylenol we need with the components that we produce in the United States, car parts, military equipment.
And so I think this is where the real push...
We've lost manufacturing jobs.
It's not just because of productivity.
It's because we're boosting consumption artificially and we're filling the hole.
If all you want to do is consume and we don't make enough, then we're going to buy it from overseas.
And so one of the things that I wish is that we wouldn't do tariffs, that we would cut.
Corporate tax rates and capital gains and regulation and make it way cheaper, way more efficient to produce in the United States instead of tariffing other countries.
But what's the chance of that?
Congress can barely keep the tax rates where they are right now.
What happens is we end up with tariffs.
I understand fentanyl and immigration and the negotiating stuff, but I think the push in the economy, the reason we want to try to bring manufacturing back here is that we've chased it away and we've over-consumed.
And so we have a really bad system, and I think that America's history is just filled with we're going to fix It's almost like RFK Jr., right?
He talks about make America healthy again because all we do is treat the symptoms and not the disease, not the cause.
And the real cause of the push for tariffs is that we overconsume and underproduce.
The fix for that is to change our whole tax code, but the odds of being able to do that with Congress are really small, so we're left with tariffs as the tool.
Somebody who's trying to think about this in political terms, I'm going to try to put it to you a little differently and have you respond to it, because I think that if I look at my adult lifetime, let's just say the interregnum from the Reagan years to today, what we've seen is a lot of globalization, a lot of opening up of the world.
Obviously, a lot of things are now made better with technology, and that's a good thing.
But it's also the case that a lot of things are made cheaper abroad by outsourcing them.
And that's a benefit to consumers, because that's how you can buy shoes in Walmart for $32.50, whereas they otherwise may cost $75 if made in America.
So we can see why the corporations went that way.
But there has been the undeniable effect of all this, which is that you've had whole towns, whole communities, in some cases whole industries.
That have been decimated or wiped out.
And I think politically Trump is a response to all that.
I think Trump may believe, I think he does believe, that a great deal of the wealth or the gains of the past generation or so have gone to one group of people.
The coastal elites, the technological elites, the big banks, the CEOs.
But the ordinary American has not...
done so well.
And so Trump's tariffs, I think, are aimed at saying, all right, well, we need to bring some jobs back for those guys.
In fact, those guys are my base.
They're the reason I'm in the White House right now.
So how would you, if you were advising Trump and he were to say something like this to you, how would you advise him to approach this economically?
Yeah, you know, so Dinesh, like all of these questions and arguments that we can think about, it really comes back to the Constitution, right?
And the Constitution is about the individual, and that's why we believe in free trade.
And so you can't, Texas cannot tariff California.
Minnesota cannot tariff, you know, Wisconsin.
And so everybody understands that's crazy, and the Constitution won't let us do that, and so we don't do it.
But we're the only country under the Constitution, and other countries aren't.
So if they choose to dump...
Or subsidize their industries and undermine our country because what they're saying is those guys play by the rules.
They have the Constitution, but we don't have to.
And so we're going to dump.
We're going to take advantage of them.
So then the question is, are we willing to...
Make individuals, I mean, a tariff will raise the price of the tennis shoes, will raise the price of an automobile.
Are we willing to pay that price to get our manufacturing back because other countries have stolen it, basically?
They played unfairly.
And so, I mean, I'm...
What I like, I love the word, we're going to reciprocate.
We're going to have reciprocal tariffs.
So if you put a tariff on us of 10%, we're going to put one back on you for 10%.
If you're going to tariff eggs, we're going to tariff eggs.
It's all reciprocal.
And in that way, I think we can stay within the Constitution and still fight the battle.
And so there's, gosh, there's all these deep questions about this.
I mean, I think of the draft.
Is the draft for the military constitutional?
And we needed people to fight the war to keep us free, and so we drafted people into the military.
Are we willing to put a tariff on?
The cost of things to go up in order to fight this economic battle, and that's really what it is.
And I think we could also help ourselves dramatically if we cut the size of government.
This is why when I say he's doing 37 things that are awesome, three that I wonder about, tariffs being one of those.
Doge, cutting spending, stopping as much redistribution.
If we saved more and consumed less, I mean, because that's what Keynesianism is about.
And they've been, I mean, government, in 1925, the government was 2% of GDP, federal government.
Today, it's 27% of GDP, 25% of GDP, depending on what quarter you look at.
And we redistribute all that money, and it distorts the economy.
And one of the things that doesn't get talked enough about is how big government slows our growth down, undermines our manufacturing base.
It's not just all the competition from overseas or the cheating from overseas.
And tariffs...
Do help fix that, but we have other things we have to fix at the same time.
So the question is, are you willing to make the individual pay more, in this case, to save the manufacturing base in the United States?
And that's the debate we have to have.
And I think that's why he's having...
You know, we put them on and we take them off of certain things, and now we're going to delay them by another month.
And so I get it that they're a negotiating tool, and in the end they'll work.
I really do think they'll work with him, but they are a dangerous thing.
A massive universal tariff, I would...
And that was almost the first day he got in office.
They took universal tariffs off the table, and I cheered that day.
I was like, okay, great.
We're going to use them as a negotiating tool.
We're going to use them in a reciprocal manner, and that's an okay way to use them.
But we have to realize that we're asking individuals to pay a price for benefits down the road.
We'll be right back with Brian Westbury to pursue further this topic of tariffs.
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I'm back with economist Brian Westbury, chief economist at First Trust.
The website ftportfolios.com.
Follow him on X at Westbury.
Brian, you know, Trump has been a kind of enthusiast of tariffs, it seems like, all his life.
If you listen to old interviews with Oprah, there he is talking about the Japanese taking advantage of us in the 1980s and why we need to tariff their cars.
This is big with Trump.
And it goes, I think, beyond...
I've said, too, on this podcast, I understand if you're using tariffs as a kind of a diplomatic cudgel or battering ram.
Hey, if you don't seal the border and stop the fentanyl, I'm going to tariff you.
I understand that.
We're not talking about that.
We're now talking about tariffs as kind of an economic strategy, an economic weapon.
Trump has even talked about the fact that, hey, listen, we may not even need an income tax because we can...
We'll get all this money from abroad by tariffing all these goods, and so we can have an external revenue service rather than an internal revenue service.
So what if Trump or the Trumpster were to say to you, hey, Brian, listen.
I know that the tariff is a tax, but we have a lot of other taxes as well.
And so Trump seems to be saying that this tax is better than the other tax that you have called the income tax.
So what if we make you a trade, and that is we lower the income tax levels, maybe even move in the direction of a more flat tax, and then get the revenue out of tariffs, recognizing that it's going to have some negative effects, which tariffs unquestionably do.
But since it's pain either way, this is a better type of pain than the other.
Yeah, it's the most, what does he say?
It's the most beautiful word in the dictionary, tariffs.
And he's enamored, obviously, with McKinley.
We've renamed Denali McKinley, which actually I like as a former climber.
I'm glad it's called McKinley again.
It has nothing to do with tariffs.
But the reason McKinley, he likes McKinley, is McKinley and tariffs go kind of hand in hand.
Remember, back then, in the 1800s, early 1900s, before there was an income tax, this was the primary source of revenue for the U.S. But our government was 2% to 3% of our GDP. It is now 10 times bigger.
Imports right now are about 15% of GDP. And so if you tariff them...
100% you would get revenue to the government that's 15% of GDP. Well, we get more than that from our tax code right now.
So we would actually have less tax revenue.
So if you really want to go back to kind of a McKinley era, you got to cut the size of government massively.
And with Social Security and Medicare, Medicaid, and the size of our defense budget these days, it almost seems impossible to pay for it all with tariffs to me.
I mean, even with an 80% tariff, 100%, 120% tariff.
So it's a little unrealistic to try and recreate the McKinley era because government has grown tenfold since that era.
Then the question then becomes, you know, and as you said, you watch them back in Oprah in the 80s complaining about Japan.
They imported all these consumer goods.
By the way, Japan is a really interesting case study to me because what they did is they used big government.
Big banks and big corporations, and they cross-subsidized each other and did all kinds of things, but they picked as their target, if you will, the American consumer.
And so they made little radios, little cars, and their cars kept getting better and better, motorcycles, all these consumer goods, and they did.
And they got really productive at them, and they could produce them cheaply, and they kept getting better and better and better at making them.
I mean, today, people love driving Toyotas and Hondas, but back then, they were little tin boxes, and that's what they did.
They focused on the American consumer, but I think what they did is they actually took an advantage, if you will, of our free market, of our We believe in free trade.
We believe that.
So you have to protect the individual.
And the way you do that is you make everyone free.
You can buy wherever it's produced.
You can find the cheapest place.
But in the end, if they use all their banks and their government and their big business to do that, they're, in a sense, almost kind of dumping.
And so using a tariff to protect us.
I would argue that's an appropriate use of tariffs.
But it is fraught with danger because if we don't bring manufacturing back quickly, by the way, it's going to take years for all of this to unfold.
You want to build all our cars here, all our chips here, all our washing machines here, everything that we buy, if you want to build them all here.
Number one, I don't think we could do it.
We're going to still need to import.
But number two, it's going to take years to build all those plants and repurpose all these employees and assets and savings.
And so I get the temptation to go down this road, but unless we shrink the size of government a lot, stop redistributing as much, it could backfire.
And I think the stock market was overvalued.
And it still is overvalued, by the way.
And I think it was looking for an excuse.
So I'll just say this real quickly.
It was looking for an excuse to sell off.
It's using the tariffs.
People should realize it's not all the tariffs.
The stock market was overvalued.
It was frothy.
It had to come down at some point.
And it needed a catalyst.
That's all that this is.
This is not a depression coming.
This is no 1930s or 1999 or dot-com bust.
We needed a correction in the market.
And it just so happens it's all happening at the same time.
You know, you used the example of the Japanese, and it seems to me that part of the problem was that our own car industry in Detroit reacted very stupidly.
In the 1970s and 80s, you had an OPEC cartel, quite clearly gas prices were going up dramatically, and yet these dudes were still making giant cars.
They didn't even adjust to the idea that Americans are going to want to start driving smaller cars, and the Japanese just took advantage of that absolute kind of error of judgment on the part of all the major automakers.
So that's the first point, is that you want to be in a free market, you've got to learn how to compete.
Compete and pick up the signals and do the things that you need to serve the consumer better.
Now, the other point you're making is that, hey, a lot of these countries don't have a reciprocal deal with us.
They want to sell their cars over here, but guess what?
You can't sell your car over there.
Or they don't hesitate to slap a big fat tariff on you if you do that.
I think there's a little bit of Trump that just is the good old, you know, the guy in the ring and he's like, wait a minute, you know, I stepped on the weighing scale.
I had to play by certain rules.
You know, you don't have those rules for us over there.
And so I'm not going to go along politically with an arrangement in which it's kind of heads you win and tails I lose.
Right.
Yeah.
I mean, Canada doesn't really allow us to.
Put our banks up there.
They have seven, eight, I think it's seven really big banks.
That's how they run their banking system.
They don't let Citibank and Bank of America and J.P. Morgan up there to compete.
Neither does Japan.
Neither does China.
And so it's absolutely right.
I mentioned this before, but we don't have tariffs between California and Texas.
Texas Bank can go into California.
California Bank can go into Texas.
And maybe by using these tariffs, we end up pushing the whole world to get closer to freer trade.
And that would be my dream come true, that you use the cudgel and you point out the error of their ways and competition.
is the way you spread democracy.
It should be that way.
Freedom, democracy, free markets spread when the force of the United States is put to bear on the rest of the world.
And I don't mean boots on the ground.
Competition.
So I love this idea.
And obviously Trump has lived in the world of New York real estate.
What is more competitive than that?
And within that, he lives with regulators and government and zoning issues and unions and all of this stuff.
And he has learned how to all the levers to pull.
To get a building built or make a deal.
And that's what he's doing.
And so I'm okay with that.
If it moves us to more free trade, it's perfect.
The one thing I would argue is that a tariff is a consumption tax, really.
That's what it is.
And I have always fought this throughout my career.
Because when I retire, I don't want us to get rid of the income tax because I saved all my money under the income tax.
Now I have to pay a consumption tax.
And so I'm going to be double taxed in my life, right?
But I finally decided, you know what?
My great-grandfather or grandfather went to World War II, and they sacrificed, the greatest generation sacrificed to win World War II. I think maybe we should sacrifice.
We ought to change from an income tax to a consumption tax.
Scrap it.
Europe has both.
I always think that's crazy.
But you have to get rid of the income tax and then move to a consumption tax.
And I think that would help.
A lot of this overconsumption in the United States, it would boost savings, boost production, and it would make us more competitive around the world.
So if we're going to use tariffs and think of them as a substitute for the income tax, let's go all the way.
Let's go all the way and put in, and there's a group of people out there, they call it the fair tax.
I'm sure many people watching today have heard of that.
I'm now a supporter.
I used to fight against it because I didn't want to be double taxed in my life and, you know, save under the old system and then spend in my retirement under the new system.
But now I'm willing.
I think we should be willing to do that.
I think those of us who have saved under the income tax system should be willing to pay a consumption tax in order to get to a better economy in the future.
And Brian, if we can close out this way, let me sort of make the case for that, I think, in a certain type of plain language and tell me if you agree with what I'm saying.
You're saying, you know, we live in a country where if some guy makes $75,000 a year or $100,000 a year right now, that guy is spending pretty much all of it.
One way or the other, there's very little savings.
And in fact, it's not surprising to find that guy, even with a pretty decent income, going into debt, credit card debt.
And you're saying that it would be better not just for the country in some generic way, but it would be better for that guy to have a savings habit, not because we're against him consuming or his family consuming, but because if he actually saved money, he would get to consume a lot more down the road.
In other words, the good old habit of deferred gratification and frugality aimed at consuming later.
So your point is this, right?
Right now, what we do is we tax the guy's income.
And when you tax the guy's income, you're penalizing him really for getting income, right?
Because you're taxing that.
And you're saying, if we shift, don't tax income, but tax consumption.
The guy will have more of an incentive, not to give the money to the government per se, because he's giving it one way or the other, but rather to put some of that money aside, not consume, but rather save, so he'll have and his family will have more money down the road.
Isn't that in a nutshell the kind of case for a consumption tax over an income tax?
Dinesh, perfectly said.
I believe a good tax system should be moral and ethical and actually encourage us to do the right thing.
And deferred gratification is one of the...
I mean, we try to teach our kids all the time this, right?
Every parent in the world has had to deal with this.
And I think our system today, because it's designed by Keynesians, really, I mean...
Who said it, Dinesh?
You're the scholar here.
Who said all our actions are controlled by some dead philosopher?
Keynes.
I think that was actually Keynes who said that, and it applies now to him.
Yeah, exactly.
And that's where I was going.
I think it was Keynes.
And we are.
That's what we do.
We tax savers.
When you go after a billionaire, they can't spend all their money.
I don't care how big their yacht is.
They still have tons of savings.
And we're taxing them and we're giving it to people who spend it all.
And that's creating more demand for Social Security, Medicare, Medicaid.
The savings rate in America right now as a percent of our income is 3.8%.
It's about a half.
Like, about a half of what we saved before COVID. Because COVID was a massive use of this Keynesian-type policy, right?
Where we're just literally giving people the money, giving money to people for not working.
And we suspended all their student loan payments, and they spent all of it.
And so the savings right now is 3.8%.
And back when Reagan was in office, it was 10. In the 60s, it was 15. And so this movement, this Keynesian movement to take money from those that would save it, because Keynes, not himself, but Keynesians look at savings as a leakage.
They look at it as a bad thing.
Oh, we're not consuming.
And so, yeah, anyway, back to the way you put it.
You put it exactly right.
You should have the choice of whether you pay taxes or not.
And the way you choose is, Spending.
If I buy stuff, I'm going to have to pay the consumption tax.
If I don't, I don't.
And I can pay it later in my retirement, but by then that's compounded because I invested it and it earned interest over time and it's a more moral system.
And so the fair taxers, if you will, Have finally won me over.
And I guess I would credit Donald Trump, too, because he's pushing this tariff.
His instincts, I call them spidey senses.
And he may not understand the economic arguments from Smith and Keynes and Hayek and Mises and Friedman and all of that, but his spidey senses tells him there's something here.
And I think he's right.
And it's the system that we've designed and the size of government, though, that we have to focus on the system and the size of government along.
Tariffs won't fix it all.
We have to do those.
We have to cut the spending.
We have to cut regulation.
And if we do that, we'll be a much, much stronger country in the future.
Agree completely, guys.
I've been talking to economist Brian Westbury.
Follow him on X at Westbury, website ftportfolios.com.
Brian, as always, thank you very much for joining me.
Yeah, Dinesh, great to see you.
Great to be with you.
I'm in the final chapter of The Big Lie, now out in paperback.
And I was thinking I might be able to finish today, but I probably won't.
I'll probably finish Monday.
Maybe Tuesday at the latest.
And I've been trying to think about what I should do next.
In fact, Debbie asked me, she's like, well, what are you going to do after the big lie?
And I haven't decided yet, but I'll try to come up with something really good to pick up on for next week.
Now, the last chapter here is called Denazification.
And it has to do with rooting out the fascism of the left.
I begin with noting that Nazism and fascism in the formal sense did in fact collapse right in 1945. So in 1945, British and American and Soviet forces were converging on Germany.
This was several months, about nine months after the Allied landing at Normandy.
And Hitler was holed up in his bunker in Berlin.
He was with his new wife, Eva Braun, and defeat at this point was assured.
It was a fait accompli.
And so Hitler made his final decision.
He had been advised by some Nazis to take off, to flee the city, but he refused.
He and Eva Braun withdrew to a private section.
And Eva Braun took cyanide.
Hitler did the same, just to make sure that it would work.
And then he also fired a bullet into his head.
And then the Nazi loyalists buried him and burned his body beyond recognition to prevent it from being discovered or recovered by the Allies.
Now, a few days earlier, Mussolini disguised himself.
Pretending to be something else, just an ordinary Italian.
Got into his Alfa Romeo sports car, and he was trying to flee Italy.
He was with his mistress, Claretta Patacci.
But Mussolini, if you've seen his photo, is a pretty distinctive character.
In fact, he looks less like a modern-day Italian than an ancient Roman.
In any event, he was discovered.
He and his mistress were apprehended at the Swiss border, and the next day they were both machine-gunned.
Mussolini's body was hung upside down in the Piazza Loreto in Milan.
And so Mussolini and Hitler died.
They perished within a few days of each other.
And you may say at this point fascism and Nazism in a formal sense came to an ignominious end.
Well, an end but not a final end, I would say.
Why?
Because fascism...
In a different guise, in a different uniform, with different slogans, is indeed back, both in Europe and in the United States.
Many years ago, the writer Sinclair Lewis, kind of warning of the fascist threat, this guy was politically clueless, but he's like, it can happen here, not realizing that it was even at that time happening there under FDR. Sinclair Lewis was too blind and clumsy to have any political awareness, but he was doing the usual shrill arm waving.
But in a sense, he is right.
It has happened here.
And the left has established this kind of fascist regime.
By regime, I mean an institutional framework.
Now, this regime was in charge of the government until Trump...
Took over, beat them in 2024. But this regime is far from gone.
Now, the point here is that the old fascism was defeated by military force from the outside.
It took a war with tens of millions of casualties to accomplish this.
And I want to leave off this chapter and also the book by...
Asking how this new fascism can be vanquished.
I think it can be vanquished without military force, but it has to be done, of course, from the inside.
And it's important to do it before it rises to full power.
Even under Obama, where we saw these nascent roots of fascism, even under Biden and Harris, it wasn't full-fledged fascism.
So the way you prevent full-fledged fascism is you choke it at the root.
And by the way, this is also true of 1920s Italy and 1930s Germany.
When Mussolini first came to power, he wasn't very strong.
The Italian military, the police, the political establishment could easily have defeated him.
The king could have routed Mussolini almost single-handedly using his royal prerogatives, but none of them did.
The same thing with Hitler.
When he first came to power, he came to power as a kind of compromise candidate.
And he could have been stopped.
His brown shirts could have been apprehended, rounded up, locked up.
We could have stopped fascism before it was too late.
Now the question is, why didn't that happen?
Why didn't they stop Mussolini?
Why didn't they stop Hitler?
The Italian historian Renzo de Feliz, by the way, one of the very great Italian, one of the very great scholars of fascism who has emphasized the point.
That fascism is on the left or has powerful left-wing elements to it.
He argues that the political class in Italy and in Germany were weak.
They were complacent.
They were compliant.
They were cowardly.
And so they would rather try to deal with fascism accommodated from their point of view rather than Overthrow it.
And this was the problem.
They found that it couldn't be accommodated.
The fascists actually were more single-minded, in the end, tougher than the political establishment.
And so once they gave power to Mussolini, once he basically became a dictator, once Hitler was able to get the so-called Enabling Act through, These people became unstoppable.
Now they had the power.
Now they had the military.
Now they had the police.
And so they could round up the very people who earlier could have overthrown them.
So the accommodation was a disaster.
And by the way, this accommodation, this appeasement, as we now call it, continued not just domestically in Germany, but also on the foreign policy front.
And here the key figure, of course, was England's decent but befuddled prime minister, England's own answer to Jimmy Carter, Neville Chamberlain.
And Chamberlain was a guy who wanted to believe the best about Germany and about Hitler.
This is what Winston Churchill says about Chamberlain in his great account of the events of World War II. Churchill is very severe on Chamberlain, but he's also kind.
He says, look, this guy was a weakling, but he wanted to believe the best.
There was a fundamental decency that drove him.
But Hitler had his number.
Chamberlain went to see Hitler, and Hitler commented afterward that Chamberlain was symbolized by his umbrella.
Basically, Hitler says, this is modern-day England.
They're a bunch of pansies.
This is not the England of Sir Walter Raleigh, the great pirate who was an ally of Queen Elizabeth.
And so Hitler was like, I can smash this guy.
And swashbuckling England from Hitler's point of view was no more.
It was no longer the land of Sir...
Francis Drake.
Now, again, had Britain and France come together and fought Hitler at the beginning, they could have beaten him.
But they didn't.
They coddled him.
There was Munich, the treaty, the pact.
Hitler used that time to build up the German military so that it was stronger.
Perhaps not than England and France put together, but certainly than either one of those two countries taken separately.
And that's what ended up happening.
Hitler attacked France first, defeated the French.
Hitler was right there on the Champs-Élysées in Paris.
And then there was only England left to resist and hold out.
So they coddled Hitler.
They gave him a chance to grow.
And so the point here is that both on the domestic and the foreign policy front, fascism and Nazism were...
Accommodated.
And this is the point I want to make about America.
There is a tendency on the part of us, our team, the right, the conservatives, the Republicans, well, let's accommodate the liberals.
Let's live and let live.
Let's find some common ground.
Let's unify.
Let's attribute to them the best of intentions.
And you see here how I'm echoing all the things that were said and done toward Mussolini and toward Hitler.
I guess the point I'm trying to make is that we will be no more successful in appeasing the fascism of the political left now than was the case close to 100 years ago, really in the 1920s and the 19...
And so what I want to do in closing out is outline the nature of this new fascism, how it is different from the old fascism in one key respect, and that is it hides.
It doesn't use its name.
Nobody on the left goes, yeah, we're fascists.
The old fascists, of course, were...
We're not embarrassed about being called fascists.
If you called them fascists, they wouldn't emphatically deny it.
They would take it as a compliment.
But what we have with the left today is a, well, that's why I use the title, The Big Lie.
They're lying about who they are.
They're lying about who we are.
And this is the first step toward recognizing and taking on the adversary that we're dealing with now.
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