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June 17, 2025 - Dinesh D'Souza
49:59
THE DISRUPTOR Dinesh D’Souza Podcast Ep1106
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Coming up, a big surprise with the Minnesota shooter.
For some weird reason, he's being charged with second-degree murder.
It's the 10th anniversary of Trump coming down the escalator and announcing his first run for president.
I'll talk about how he has transformed American politics.
I want to argue that self-deportation is the best way to get the illegals home.
I want to show how it can be encouraged.
Former U.S. Ambassador to Israel David Friedman joins me for a unique and very lucid take on the Israel-Iran conflict.
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guest.
you Thank you.
So, I don't understand this at all.
I'm looking at a complaint.
Filed against Vance Luther Bolter, the guy who is the alleged shooter in Minnesota.
Kills two Democrats, apparently has some sort of hit list.
This is the Tim Walsh political appointee.
And of course, the left is hysterically trying to prevent this fact from being known.
They've been blasting Senator Mike Lee.
Mike Lee had an extremely witty post on X where he called it Nightmare on Wall Street.
And he had a picture of the shooter disguised as a policeman with this weird mask.
And the guy really looked like he was out of a horror movie.
So it was a very clever post.
And the nightmare on Wall Street is, I mean, that's an ingenious formulation.
And it points to the fact that this guy had...
As I mentioned, Walsh appointed him to a Governor's Workforce Commission board.
But there is a big hullabaloo.
Mike Lee needs to take this post down.
I think the reason they want him to take it down is not because the post is false, but because it's so effective.
The left shrieks loudest when an arrow hits the target.
And that's what happened in this case.
But what is weirding me out a little bit here are these charges against this guy.
Second-degree murder.
Wait, isn't it the case that this is a clear case of premeditation?
He targeted these people.
He planned this out.
He had a disguise.
He went to their homes to do it.
Second-degree is, quote, a crime of passion.
You somehow got worked up about something and you, in a fit of passion, But when there's evidence of this kind of plotting, this kind of disguise, this kind of targeting, the second degree would not seem to apply.
So unless there's something that we don't know at all, there's something that's like some new information.
These people had a grudge against each other, and this was some private vendetta, and something was said or done that set this guy off.
So far, we have no indication of any of that.
So, for these reasons, I think that this second-degree murder charge is bizarre, to put it mildly.
Now, let me talk a little bit about Iran and Israel, because I've been looking at these videos of Tehran.
Tehran is virtually physically empty.
Essentially a ghost town.
And it's worth recalling that Tehran is a city of something like 8 million people.
So 8 million people have evacuated Tehran.
And why?
Well, the answer is because of a single social media post by Trump.
Trump basically says Tehran should be evacuated.
And within 24 hours, I mean, I think we are witnessing a certain type of remarkable phenomenon that is a testament to Trump, but also to the power of social media.
Never before in history does a single social media post cause 8 million people to pack up and leave.
And yet that is exactly what seems to have happened.
And we're going to have to do this.
Now, I'm going to have Ambassador David Friedman, the former U.S. Ambassador to Israel, to come on shortly and talk about all this and talk about some of the fracas that's developed on the MAGA right over all this.
I thought that Trump was an anti-war guy.
I thought he said, no more wars.
I refuse to die for Israel.
Why are we being dragged into a conflict that is none of our business?
I want Ambassador Friedman to reflect on all of these questions.
What gives Israel the right to do a preemptive strike?
Don't the Iranians have a right to defend themselves under the Geneva Convention?
There's a swarm of issues and questions around here, and I do think it is good to have them debated.
But let's look at what we've seen so far.
What we've seen so far is that Iran, which, by the way, is a big country, The population of Israel, something around 11 million.
The population of Iran, something around 70 million.
So Iran is seven times as big as Israel.
Second, Iran is an oil-rich country.
And third, Iran is a country that at least as far as we could see was united by this kind of cohesive ideology.
I don't mean that the people of Iran are...
Not at all.
In fact, that's going to be an interesting issue to explore in the days to come, the regime versus the people.
But the regime does have a certain benefit, which all tyrannical countries do, when you have full control of the levers of society.
And the Iranians certainly have that.
And yet, it is to me quite remarkable how terribly Iran seems to be faring in this conflict.
On social media, of course, I look at the accounts of Khamenei, the supreme leader, and also the Iranian government.
They're like, Israel, watch out.
Tel Aviv, get ready.
You're going to pay a heavy price, blah, blah, blah.
But so far, the heavy price has been paid on the Iranian side.
Now, I'm quite aware that there's all these images of broken down buildings and rubble in Tel Aviv.
But let's look at it.
The Israelis are hitting...
massive military targets disabling infrastructure knocking down communication centers blowing up the center of the revolutionary government essentially targeting nuclear scientists top officials in fact there was one analysis by one of these Iranian experts basically saying that Khamenei the supreme leader
And this is the nature of war, right?
In war, you strike the enemy's weaponry.
You strike their ammunitions facilities.
You attack their air force.
You attack their army bases.
And that's what Israel is doing.
Now, I'm in a little bit of a social media skirmish right now with this comedian named Dave Smith.
Normally, I don't like to get into this kind of thing with someone like that, but on the other hand, this is a guy who's like, yeah, you know, all the members of Con Inc., this is one of their big phrases, meaning Conservatism Inc., as if there's some incorporated entity called conservatism.
I think what he's getting at here is that people like me have I've been at National Review.
We were part of the Reagan years.
We were at various think tanks.
So supposedly I'm part of like some conservative establishment.
And the idea also is that, Dinesh, you know, you were wrong about the Iraq War.
You know, you shouldn't be speaking about this issue.
And look, I mean, I was wrong about the Iraq War.
Many of us were.
And why?
Mainly because we were given bad information.
We were given false information.
And so we've had to learn from that to be more distrustful of information from these official sources.
But I think it's important to note that Iraq is not the same as Iran.
It can safely be said that Iraq was not the force behind 9-11.
But can it be said that Iran was not the force behind October 7th?
No, Iran was in fact.
The main sponsor of October 7. Can it be said that Iran was not the force behind a slew of terrorist attacks going back to the 1980s, occurring not just against Israel, but occurring all over the place in Beirut, in other parts of the Middle East, all across the Western Hemisphere?
Iran has been cooking up terrorist schemes and doing it, by the way, not as a ragtag independent group like ISIS or Al-Qaeda, but doing it as a state-sponsored regime that is also clawing its way toward nuclear weapons.
So all of this is, for me, an adequate The Israelis have every right to strike back.
They were struck first.
And nobody says that when somebody comes and strikes at you, let's just say, for example, you experience a home invasion.
Is there anything that says that you have to limit your retaliation to some sort of proportion to what the other guys did?
So they came into your home and were trying to rob the place when you surprised them?
Your retaliation has to be limited to going into their home and robbing the place for the same amount of time.
No.
You can strike out at those people.
You can retaliate against them.
You can protect your own property and safety.
And you can do it, quote, indiscriminately.
I mean, you can do it without paying immediate attention to whether the level of damage that you're inflicting is somehow measured against what the other people did.
And there's countless examples of this to classic.
Example is Pearl Harbor.
The Japanese destroy one-third of the US naval fleet.
Does the United States government go, well, you know what?
We're now limited in our response to going and destroying one-third of the Japanese fleet, but we've got to stop there.
We can't go further.
No, the United States basically took it all the way until you have complete Japanese surrender.
So Israel is really adopting a kind of Western playbook here, and it seems odd to say to Israel, well, you can't do that.
Everybody else could do it, but you can't do it.
We did it, but you can't do it.
Now, let me say a word about Trump because we are at the 10th anniversary of Trump coming down the escalator and declaring for president.
And there are some articles in the New York Times and elsewhere about, oh, Trump has transformed the landscape.
But if you read between the lines, of course, the articles are basically saying he's transformed the landscape for the worse.
And why are they saying that?
And the question I want to briefly address, the question that I talked about in Vindicating Trump, the film, is this.
These are the people who used to lionize Trump.
And why did they turn against him?
What is the significance of Trump coming down the escalator?
And I'd like to, I might have mentioned this on the podcast, but I think it bears repeating, and you may not have heard it.
For me, the escalator is a kind of image.
A trope, a meme that points to something that goes beyond the obvious Trump is making an announcement.
And you can think of it sort of this way.
At the top of the escalator, you have all the people.
Who used to love Trump.
Oprah Winfrey's up there, at least in my imaginative reconstruction of all this.
And all the Hollywood people are there.
The cool people are there.
They are all, these are the people who want to be photographed with Trump.
They want to be seen with Trump.
But then Trump does something kind of telling, doesn't he?
He gets on the elevator and he descends, which means he goes down.
But where does he go down to?
in my mind, at the bottom of the escalator are like all the ordinary people, the forgotten people, the people that haven't seen any American dream, the people whose jobs have been outsourced or offshored, the people whose lives are not better a whole generation later, and their kids cannot look forward to a better life than their parents.
And so Trump, these are people, by the way, that are not He could not be more removed sociologically, economically from those people, and yet he descends to them.
And they look up and they're like, well, wait a minute, who's this guy?
Well, he's not one of us.
But Trump does make common cause with those people, and the people at the top of the elevator, the cool people, they go, what's he doing?
He's betraying us.
He's leaving our tribe.
He's going and joining these pitchfork people at the bottom.
So here I think in a single image or metaphor, you can kind of see the Trump betrayal.
He seems to have betrayed not only his economic class by joining with the working class, but betrayed his cultural group by joining with a group of people that the cultured people of America consider to be backwater people, the yahoos, the deplorables, as Hillary.
This, I think, was the great sin of Trump, and this is why he is now hated by some of the very people who once loved him.
Let me also say a word about self-deportation.
I see an article in the New York Post.
Nearly one million illegal immigrants have self-deported already under Trump.
This is, by the way, in a matter of weeks.
One million.
So, hey, that's not, you know, that is a small portion of the, what, 8, 10, 12 million people who came in the Biden years.
But it's not a small number.
It is, even as a percentage, it's, what, 10%, 12% of the entire number.
And by the way, self-deportation makes deportation easy, right?
Because if you can let people...
So, in a way, the Trump rhetoric has worked.
And I must say the demonstrations of Trump enforcement have also worked and convinced a lot of people, hey, listen, it might be better for me to I don't want to wait for them to come and get me.
I want to make a kind of exit on my...
And Trump, in a recent post, I think, puts his finger on the heart of the matter.
Because all of this, if you're kind of wondering, and sometimes people do wonder, like, why did Biden do this?
Why would he, why would a guy, or if Biden didn't do it, somebody did it.
Well, why did they do it?
Why did the junta do it?
Why did these people, why are these people here?
What purpose do they serve?
Leaving aside their motives.
Which are actually more benign, not counting the criminals, they're more benign than the motives of the people who let him in.
What are those motives?
Here's Trump.
He says that we must expand efforts to detain and deport illegal aliens in America's largest cities.
So right there, let's pause.
The cities are a primary venue of this, such as Los Angeles, Chicago, and New York, where millions upon millions of illegal aliens reside.
These and other such cities are the core of the Democratic power center.
So now Trump is moving candidly toward the Democrats' motives, where they use illegal aliens to expand their voter base.
Cheat in elections and grow the welfare state, robbing good-paying jobs and benefits from hard-working American citizens.
These radical left Democrats are sick of mind, hate our country, and actually want to destroy our inner cities, and they are doing a good job of it.
This is perhaps the clearest, boldest, starkest statement from Trump.
That identifies exactly why the Democrats are doing this.
And again, no surprise.
The Democrats are shrieking over this.
What is Trump saying?
He's only going to enforce the laws in Democratic areas and not in Republican areas?
No, Trump isn't saying that.
But what he is saying is that you guys have a vicious and malevolent motive that is not only a corrupt motive.
But that is a motive that involves the destruction of the prospects and even the lives of American citizens.
And you don't care.
You're going to go ahead with it despite the high price it's going to inflict on your own.
And we, the Republicans, we, the MAGA movement, we, the Trump movement, are not going to let you do that.
Our focus is on what Trump calls the single largest mass deportation program in history and, quote, the re-migration of aliens to the places from which they came.
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Guys, I'm delighted to welcome a new guest to the podcast.
He is Ambassador David Friedman, the U.S. ambassador to Israel from 2017 to 2021.
This is a man who had a key role in negotiating the...
Abraham Accords, which normalize relations between Israel and the UAE, Bahrain, Sudan, Morocco.
You can follow him on x, davidm underscore freedman.
And there's a website, onejewishstate.net.
Ambassador Friedman, thank you for joining me.
And let's begin by looking at what has been happening.
Between Israel and Iran, I said a little early on in this podcast that I've actually been amazed that a country that is some 10 times the size of Israel has been so effectively hit by Israel.
and has proven, quite frankly, to be somewhat lame, at least so far in its responses.
I mean, yeah, they've produced some rubble, and yeah, they've got some civilian casualties, but they don't seem to have been able to inflict any significant retaliatory damage on Israel's Can you talk a little bit about this, I think to many people, puzzling disproportion in which you may say the little David of Israel has been able to, at least so far, teach Goliath a pretty significant lesson?
Dinesh, thanks for having me.
And look, that is one of God's messages to all of us, right?
That David can.
Beat Goliath.
In this case, I wouldn't discount divine providence as part of the reason for those who are believers.
But look, the Israeli military is pound for pound, certainly no worse than tied for as the greatest military in the world.
Its pilots are really, really special.
The equipment comes from the United States.
There's a lot of joint training between Israel and U.S. pilots and other military.
The one thing Israel has, unfortunately, as an advantage over the United States is it gets to practice a lot more under real circumstances, right?
Israel is often in battle.
It hasn't known a day of peace since 1948.
It's always been at war with at least one of its neighbors.
And it punches way above its weight.
You know, it's got more Nobel Prize winners in physics and chemistry and in computer engineering than any other country.
And, you know, what's Mossad is legendary.
You saw what it can do a few months ago in Lebanon when, you know, the entire Hezbollah.
Upper echelons were decapitated with these pagers that exploded in people's pockets.
So, you know, I would say, you know, there's a lesson here.
Don't mess with Israel.
The Iranians have relied always far too much on threats and bluster and, you know, repressing their own people.
And, you know, like most repressive regimes, They come to an end because ultimately they don't stand on very much other than sand and it comes to an end and that's what we're seeing now.
Something that you alluded to that I think is very important here when we've always had this very high opinion of Israeli intelligence capabilities.
Now that was dealt a blow.
On October 7th, because obviously there was some kind of a failure there that enabled this attack to be carried out that really surprised Israel, in some ways blinded Israel.
But we have subsequently seen, and even in recent days, just the absolute brilliance and ingenuity of Israeli intelligence penetration of the upper echelons of the Iranian political and military network.
I mean, Israeli spies at the highest level of the Iranian government, the knowledge of where these nuclear scientists live and where they're sleeping, in which bedroom, on which floor.
I mean, it seems to me a stunning affirmation Wouldn't you agree?
I think so.
And remember that, you know, again, only a few months ago, Ismail Haniyeh, who's the head of Hamas, was in an extremely secure building for one night in Tehran, and he didn't wake up the next morning.
His bed blew up.
The Israelis can do things that no one else can do.
They have a different ethos.
Also, Dinesh, remember, there is, unfortunately, again, regrettably, there is a culture in Israel that we're never going to allow another Holocaust, right?
And, you know, they truly believe every single day.
That they're fighting for their lives, they're fighting for their children and their grandchildren, that what they do today will affect the viability, the safety of the Jewish people, you know, for another generation.
You know, there's more Jews living in Israel now than anywhere else in the world.
It wasn't true until a couple of years ago.
So, and you know, your point about October 7th is very true.
It was a massive failure of intelligence, but it was primarily a function of arrogance, right?
Because you didn't need a lot of intelligence to know that Hamas was gearing up at the border.
I've always said this when I was practicing as a lawyer for many years.
The little things are usually the things that bite you, the things that you take for granted.
Look at 9-11, right?
19 terrorists with box cutters managed to do what they did to America.
So, yeah, I think that arrogance, again, I wish there were different circumstances, but that arrogance is no longer present in Israeli society.
I'm glad you mentioned, you brought up October 7th, because I've been watching and to some degree participating in this skirmish.
Within the MAGA right over Trump and whether Trump has broken his promises and whether, quote, Iran has a right to defend itself.
And as part of that, I'm a little vulnerable to people who go, well, Dinesh, you didn't learn your lesson from Iraq.
you supported the Iraq war.
And I think there is a key difference here, which is to say that But there is not a tenuous connection between Iran and October 7th.
There's not a tenuous connection between Iraq and a kind of slew of terrorist incidents going back to the 1980s.
I mean, this has been like the global mission of the Khomeini revolution, and it's been carried out with remarkable consistency.
So, am I right, do you think, in making a key distinction between the Iraq situation under Bush?
And Israel on October 7th?
Iran on October 7th?
You're completely right.
I think there are many key distinctions.
Remember that in Iraq, there was an assumption, you know, there was an argument that Saddam Hussein had weapons of mass destruction.
Colin Powell got before Congress and made that speech.
Well, he was wrong.
Okay, so first of all, the intelligence was wrong.
In Iraq.
And there's no question that everybody acknowledges that Iran is working towards a nuclear bomb because there's no purpose in enriching uranium to 60% purity for any civilian use.
It only is relevant to a nuclear weapon.
And then they got 14 facilities there that are all set up in gear.
Plus, there was a whole archive that the Mossad captured about five, six years ago, which showed that they were That's number one.
Number two, George Bush famously landed on the aircraft carrier and declared the war was over, only to find out that he could not control the Iraqi population.
There's not going to be any boots on the ground in Iran.
No, no American boots on the ground.
No Israeli boots on the ground.
You know, what may happen today or the next day is.
That's it.
They're going to pick up and leave at that point, as are all the Israelis.
And the Iranians, who have a very well-developed society with some diversity, will try to find a way to rebuild their country.
We're not going to be in the business of nation building.
So the skies are completely clear.
In Iran, we have an opportunity, a window of time, to destroy their nuclear capabilities.
That's what this war was about.
This is one of those rare opportunities.
We don't see it that often.
We have a very clear mission, both America and Israel, a very clear mission.
Go in.
Get rid of the nukes.
The nukes are there.
Get rid of the facilities.
And then get up and get out.
And there shouldn't be, I mean, unless something goes terribly wrong, there shouldn't be a single Israeli or American that is injured as a result of this process.
There hasn't been a single Israeli plane or Israeli pilot who's been taken down.
They've been flying around there for five, six days.
So this is a winnable war.
It's got a very clearly defined objective.
The intelligence is unassailable.
And Iran, as you correctly point out, has been the leading state sponsor of terror for 25 years, responsible for the killing of many Americans.
It's attempted to kill even people now in the Trump administration, certainly from the 45th administration.
So this is enormously different from what happened in Iraq.
And I agree that Iraq was a mistake.
And I see significant distinctions between the two.
Somebody who worked closely with Trump on the Abraham Accords, you have a very good window up close and personal on how this man thinks.
I offered a theory a day or so ago where I said that a lot of people are confusing the fact that Trump repudiated sort of Bushism.
And you could define Bushism pretty clearly.
You know, false pretext for going into a war.
But second, the idea that you have to sort of occupy these countries, export democracy, transform their society and their culture.
So Trump is against all that.
And by that I mean the idea that the world is a dangerous place, that isolationism is not a real option, and that occasionally when you have people who are going around chanting death to America or death to your allies, giving them a kind of sound butt-kicking and putting them in their place is something that Trump has never hesitated.
Do you think that this is a correct assessment of the way Trump thinks?
100%.
And by the way, look, we saw that.
Don't forget, we saw that in the first term when he took out Qasem Soleimani.
I mean, that was an enormously aggressive action to send a message to Iran.
Don't mess with the United States.
We're watching you.
Don't develop a nuclear weapon.
And look, it's very possible that Iran would not have gotten to this point.
Had there not been a four-year gap with Biden, where Biden relieved the sanctions, Iran all of a sudden found itself holding billions of dollars and had spent all that money on terrorism and building weapons of mass destruction.
So Trump was never about nation building.
He was never about changing the hearts and minds of our enemies.
It's just simply this.
If you're going to be in a position where you can hurt us, we're going to preemptively make sure that doesn't happen.
We're going to protect the American people.
We're going to protect our allies.
And it's exactly Reaganism.
It's exactly the opposite of Bushism.
Awesome stuff.
Guys, I've been talking to Ambassador David Friedman.
Follow him on X at DavidM underscore Friedman.
Ambassador Friedman, thank you very much for joining me.
It's my pleasure.
Thank you.
Guys, I'm going to have Mike Lindell on tomorrow on the podcast to talk about the verdict in his recent case.
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I'm discussing today the issue of Reagan and the disappearing middle class.
This is a topic that is just as relevant now as it was then.
In fact, more relevant.
And in fact, there are good and bad reasons for a middle class to shrink in size.
I mention this because there are some people who think a middle class is inherently great.
We want more middle class.
and a middle class is a sign of a healthy society.
And this is not necessarily Think, for example, as a thought experiment.
We have 100 people in a village and 99% of them are in the middle or 90% of them are in the middle, but they're extremely poor.
You have 5% that are even more poor, let's just say starving, and 5% at the top that are living well.
Is that a healthy situation?
No, because just, quote, being in the middle isn't a virtue in and of itself.
Now, I only say that because I think that the issues we're dealing with today regarding the middle class have to do with things that developed after Reagan.
And by that, I mean the mass outsourcing of jobs, which came mostly starting in the 1990s and then continued in the 2000s.
Second, the advance of modern communications and other forms of technology.
Now, Reagan, I suppose, is partly to, quote, blame for that, but I wouldn't blame him because I don't think the technology by itself is bad.
If you have people, for example, who are doing a job of any kind, let's just say they are booking airline tickets, which if you remember used to be a very manual job.
You go to a travel agent, they would book your tickets.
And now that can be done electronically.
You can book your tickets for yourself.
It's faster.
It's cheaper.
Why would you need to go through a travel agent when they send you, these are the proposed flights, and no, I want different ones.
It takes you another day for that to change.
The system we have now is better, even though those travel agents now had to go find other jobs.
In fact, the whole industry was virtually eliminated.
So, these are some of the factors that produced the damaging dent in the middle class breakdown of communities.
I've talked about this on the podcast, and this, I think, is the Trump approach.
With Reagan, the situation was somewhat different.
Yet the rhetoric coming in the Reagan era about the disappearing middle class sounds very much the same.
But here's what was going on in the second half of the 1980s.
Basically, you had a middle class, and these were people, you could say, earning roughly $30,000 to $50,000 a year.
Now, let's remember that this is money from the 1980s, so you would have to revise it upward today.
The middle class would probably today be measured as people making, let's say, $50,000 to $80,000 a year.
Because money has lost value between then and now.
But we're just taking kind of a general estimate of what the middle class is.
And the truth of it is there were a lot of people in that group.
But here's what happened.
Because of the engine of prosperity, because of the Reagan boom starting in 1983 and going uninterruptedly to the end of the Reagan years, a bunch of people who were in the middle class Moved up.
They moved into, well, they didn't become necessarily rich.
Some of them did.
But most of them became affluent or they became upper middle class.
And the key difference here is that if you're middle class, you are comfortable.
You're not lacking anything.
You certainly don't miss any meals per day.
And you have a roof over your head.
And you can get your braces for your kids' teeth.
But on the other hand, you don't really have disposable income.
You have to be very careful where you go on vacation.
You can probably go on vacation once in a year.
You have minimal savings that you can put aside.
You're not really building any kind of wealth.
But if you're in the upper middle class, you can do those things.
So that's the key difference.
And the point is that when a bunch of people in the middle class move up, That reduces the size of the middle class, of course, by definition, but why is that a bad thing?
Isn't the goal of America to create opportunities for mass prosperity?
So, this is the point I make in the book, which is that Reagan created the first mass affluent class in world history.
In other words, if you look across the West, The great achievement of the West, starting really in the mid-1800s, in the middle of the 19th century, all the way through the second part of the 20th century, was to create a middle class.
Because most countries have and had a population that was largely poor.
So the fact that Americans were mostly in the middle class was itself a kind of achievement.
But what I'm saying is, under Reagan, that achievement got one-upped.
It got even better.
In the creation of a mass affluent class, suddenly you had millions of people who were well off and the number of people who were millionaires.
Now, again, all of this is so tricky because being a millionaire today, having a net worth of $1 million is not the same as having a net worth of $1 million in, let's say, 1988.
Today, you'd probably have to have closer to $1.5, maybe $1.8 million to be a, quote, 1980s millionaire.
But the number of millionaires in the 1980s swelled.
It swelled even more in the immediate post-Reagan era, which was the 1990s.
And all of this, I think, was, in fact, a very impressive achievement.
The remarkable thing is that even though the marginal tax rate under Reagan was cut, and cut dramatically, what do I mean by the marginal tax rate?
The tax rate on the last dollar that you earn.
What's the rate on that dollar?
Because that affects the incentives of whether or not you're going to put in the effort to earn that extra dollar.
If I'm paying a 70% rate, which is what the rate was, The top rate, when Reagan came to office, that means that if I earn an additional dollar, I keep 30 cents, the federal government gets 70. So I'm going to have to say to myself, do I really want to make that effort?
I get to keep less than one-third of that last dollar.
Now, remarkably, under Reagan, that top rate came down from 70 initially to about 50. And then down to 28. Wow.
And yet, the amount of taxes paid by the rich went up.
I have the data in the book.
I don't need to really go into it.
But by and large, the revenues to the federal government from that top group surged.
The top 5% of income earners who had paid 35% of the tax revenue in 1981 now paid 46% of the tax burden in 1988.
And this pattern holds true to today.
If you look and see right now, the bottom 50% of people in our country pay very little in federal income taxes.
Most of the federal income taxes are collected on the top 1%, the top 5%, the top 10%.
Those groups, and obviously they overlap, they pay the vast majority of the taxes.
So this phenomenon became observed in the Reagan era.
It's continued.
And it's a bit of a puzzle, right?
How can it be that rich people are charged less on the last dollar, and yet the government ends up taking in more money?
And the answer is very simple.
When your tax rate on the last dollar is less, I'm not being charged.
70 cents on the dollar.
Now when I make a dollar, I'm only charged 28 cents on that dollar.
I'm going to work harder to make more of those dollars because I get to keep most of what I earn.
That's exactly what happened.
So in other words, you remember the Laffer curve that I talked about.
The Laffer curve basically says that the federal government will get zero tax receipts if the tax rate is 0%.
Because there are no taxes being collected, the government gets nothing.
But the Laffer curve also says that if the tax rate is 100%, the government will get zero receipts because nobody will work.
The government's going to take everything you earn.
And so there is a point under the Laffer curve in which taxing people more So the point I'm trying to get at here is that Reagan's policies in practice vindicated the Laffer curve.
And this itself is worth dwelling on for a moment.
Because for many years, I would say even decades, we've had these Keynesian theories about the economy, aggregate demand, aggregate supply, the Phillips curve.
Blah, blah, blah.
Most of it, nothing but highfalutin nonsense that has never been subjected to empirical scrutiny.
In fact, to the degree you take the Phillips curve and say, measure it against reality, it always proves to be wrong.
It was wrong in the 70s before Reagan.
It was wrong in the opposite way in the 80s after Reagan.
So, yet these economic theories continue to be taught in textbooks.
They're going to be taught in the business schools as if they represent some kind of knowledge.
But they're not knowledge in the scientific sense.
You can't point to real-world experiences and go, oh yeah, see, there you are.
That's the phenomenon we're talking about.
But with the Laffer curve, Reaganism represented the empirical vindication of the Laffer curve.
And Laffer said that there is going to be a point, Where taxes are so high that the government will get less revenue.
And if you cut taxes, the government will get more revenue from the people in that bracket whose taxes have been cut at the Lafera curve sort of level.
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