Feb. 3, 2023 - Rubin Report - Dave Rubin
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[Outro] | |
| I'm Dave Rubin. | ||
| This is The Rubin Report, and it's time for another Friday Roundtable extravaganza. | ||
| We've slimmed it, as of a week ago, two guests instead of three so we can focus on the erudite conversation that is forthcoming just In moments from now, joining me today is the founder and executive chairman of Strive Asset Management, Vivek Ramaswamy, and president of the Brownstone Institute, economist Jeffrey Tucker. | ||
| Vivek, Jeffrey, welcome back to the Rubin Report. | ||
| Good to be here. | ||
| Good to be on. | ||
| I am glad to have you guys on, because we're going to do something a little different than I was focusing on all week. | ||
| You know, I was doing a lot on big tech, and we're doing a lot on the culture wars, and some of this Trump-DeSantis stuff. | ||
| But there's a ton going on with the economy right now. | ||
| Most of it not good, but some of it actually is pretty decent. | ||
| And you guys are all stars in this field, so that's why I brought you both on. | ||
| And I did not know until about, what, 35 seconds ago, you guys don't know each other. | ||
| So let's see if we can make some magic here. | ||
| Let's start with the big thing in terms of the economy this week, which is this whole debt ceiling debate. | ||
| We do this sort of every year, every two years. | ||
| Are we going to mess with the full faith and credit of the United States? | ||
| When one side is in charge, then they're the ones fighting it and everyone knows the usual nonsense. | ||
| Here is Kentucky Senator Rand Paul, Libertarian Rand Paul, one of the guys on my short list of people that I like in the Senate, Rand Paul, telling Republicans basically don't negotiate with Biden on the debt ceiling. | ||
| President Biden says he won't negotiate over raising the debt ceiling. | ||
| I have news for him. | ||
| He absolutely will negotiate. | ||
| Conservatives will not vote to raise the debt ceiling. | ||
| The majority in the House, Republican majority in the House, will not vote to raise the debt ceiling without significant budget reform. | ||
| The greatest threat to our country is and the greatest threat to our national security is the debt. | ||
| One of the great things about where we are now, though, is it really doesn't take as much as you would think to actually balance the budget. | ||
| In Europe, over half of the countries balance their annual budget. | ||
| We think of Europe, of Germany and Sweden, of having these large governments, and they do, but they're actually fiscally responsible in the sense that they spend what comes in. | ||
| We could do it in our country. | ||
| If we were to have a $100 billion cut, which would still have us spending way more than we spent before COVID, $100 billion cut and free spending, we would balance our budget in just four years. | ||
| All right, Jeffrey, I will start with you because you are a libertarian economist. | ||
| You would prefer, I think, to spend less and save more. | ||
| That seems to be what Rand Paul wants to do. | ||
| Is this making some sense? | ||
| And do you think the Republicans will actually get any concessions? | ||
| Because we know at the end of the day they will raise the ceiling. | ||
| They always raise the ceiling. | ||
| Well, that's the tragedy of it. | ||
| We do know the end of the story. | ||
| They won't let risk default. | ||
| They're not going to go through 30 days of shutdowns. | ||
| They don't mind shutting down the U.S. | ||
| economy for two years and crushing small businesses and shutting churches and schools for two years. | ||
| Who cares about that? | ||
| After that, save ourselves from a virus. | ||
| But they're not going to shut down the government. | ||
| That's when they scream and wail. | ||
| But anyway, his comments are music to my ears. | ||
| I mean, the House has to get really serious about this. | ||
| The only power Congress really has left, more or less, kind of, sorta, is the power over the purse. | ||
| And if they want to enact any reforms, this is the only way to do it. | ||
| A hard line in the sand. | ||
| We will not raise this debt ceiling until there's significant budget reforms. | ||
| And he's talking about a $100 billion cut. | ||
| I mean, I don't know, make it $300, $400 billion. | ||
| Get rid of the income tax. | ||
| Don't replace it with the national sales tax. | ||
| And go back to pre-COVID spending days. | ||
| I mean, I don't think we're suffering under too little government in those days. | ||
| Right. | ||
| I mean, that's a little bit of a pipe dream, of course. | ||
| But right. | ||
| I mean, the Republicans just need to just not be intimidated and pushed around anymore by the same old nonsense where they Oh, we got shot down by the government. | ||
| You can't get your passport. | ||
| You can't go to the Washington Monument now. | ||
| You can't go to the National Parks. | ||
| We're suffering. | ||
| I mean, it's all lies. | ||
| And I hope that the Republicans have grown up and realized what's going on here. | ||
| So I hope he speaks for the party in general. | ||
| I'm afraid that's not true, though. | ||
| Vivek, I've been saying on the show for a couple weeks that since the fight for the leadership, which McCarthy obviously ultimately won, that Republicans are showing some teeth for the first time, at least in a long time. | ||
| There is a sense like, oh, we're gonna do some stuff, and as Jeffrey's saying, maybe the one thing that they can do is related to the purse. | ||
| Do you sense that there really is going to be a strong pushback on this, or is it just usual talk and that ceiling will rise, et cetera? | ||
| I mean, as far as the prediction about the politics of it, my guess is as good as anybody's. | ||
| And frankly, it's not what I'm even interested in. | ||
| It's about what they actually should be doing. | ||
| I'm glad to see that maybe they're interested in doing more than just going through the motions. | ||
| I liked what Jeffrey said, actually, is what's the point of going through the motions if the negotiation about a debt ceiling or the existence of a debt ceiling was just supposed to be a normal routine you were supposed to ignore? | ||
| It's actually supposed to catalyze an open conversation about how we're going to handle the national debt. | ||
| I think that there are a lot of underappreciated solutions, Dave, though, that I'm drawn to. | ||
| One is relating to kind of an old school statute now dating back several decades. | ||
| We actually have some weird statutes on the book in this country, and I think this could be an occasion for Republicans to bring up things they haven't talked about in a very long time. | ||
| One is the Impoundment Protection Act. | ||
| My view is if you're elected president of the United States, you have authority to actually determine whether or not certain priorities are enforced because you run the executive branch of the government. | ||
| There's this weird statute dating back, I think, to the Carter era that says that if Congress appropriates money, a president of the United States actually has to spend it. | ||
| And I think one of the underappreciated levers, I mean, as we're thinking about 2024, I know that's been a theme you've been focused on this week, Is that if you put a new president in the White House, say it's a Republican, great. | ||
| That's just the first step. | ||
| But you can't even shut down even if you're the person who runs the executive branch in government. | ||
| The way it's set up today is even if you wanted to shut down a branch or an administrative agency within that government, you can't do it even if you're the guy in charge. | ||
| You can't fire the very people who work for you. | ||
| And if you can't fire the people who work for you, that means you work for them. | ||
| I think that was a big part of the problem, even under President Trump. | ||
| And so I think these are, I think, out-of-the-box ideas where Republicans can go beyond the tug-of-war to say, we're going to go upstream and fix the rules of the road. | ||
| To say that this impoundment protection nonsense, you know what? | ||
| We're going to empower the next elected, duly elected President of the United States to actually run the federal government. | ||
| And if he or she wants to shut it down, that's, I think, a rule-of-the-road kind of thing that we can use these moments to sort of, in a negotiation, get the Democrats won't really understand what's happening. | ||
| But they can use that as levers to weave that into this negotiation. | ||
| But I don't see a generation of Republicans today really thinking that creatively. | ||
| I'm glad they're not just going through the motions, I guess. | ||
| It seems that way. | ||
| But there's a long way to improve before we actually have some real creativity in this movement. | ||
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unidentified
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Right. | |
| I guess one thing at a time. | ||
| Jeffrey, when you hear the phrase shutdown, I would imagine as a libertarian, you kind of dig it, right? | ||
| Like if you would have asked me 10 years ago when they would talk about shutdowns, When I was more on the left, oh, God, they can't shut the government, not the government. | ||
| But now when I hear they're going to shut the government down, that's what could happen. | ||
| I'm kind of like, all right, well, let's see what happens for a couple of weeks. | ||
| And I suspect we don't need you people that much. | ||
| Well, no offense to the parks department. | ||
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unidentified
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Right. | |
| But they know this game pretty well. | ||
| What what they do is they they take away from you all the services that you actually need government for, like issuing passports and that sort of thing. | ||
| I mean, They've done this trick many times, and they start torturing the people and getting people to start screaming about it. | ||
| They stop processing visas. | ||
| And so, you know, they do all the things you kind of, they stop doing all the things you want them to do, | ||
| but they continue to do all the things you don't want them. | ||
| So it's just, it's in old Washington parlance, it's called the Washington Monument ploy. | ||
| You know, people show up to DC and they want to go to the Washington Monument. | ||
| The cops say, sorry, we don't have the money to keep the lights on here. | ||
| You know, they did this with the Eiffel Tower in France, by the way, I don't know if you remember that. | ||
| They turned off the Eiffel Tower, but yeah. | ||
| So it's an old game. | ||
| And so I'm a little worried about that. | ||
| However, I do think the Republicans need to tolerate a government shutdown and explain it as clearly as possible to the American people what's going on, that we have to get this government under control. | ||
| Now, the next stage in this sort of blackmailing schemes is, of course, the threat of default. | ||
| And now, we haven't really talked about that, and hardly anybody is talking about that. | ||
| I mean, there are worse things in the world than seeing a downgrading of U.S. | ||
| debt. | ||
| I mean, I think that if the U.S. | ||
| government lost some of its creditworthiness, that might not be such a terrible thing. | ||
| So I think we need to start talking about that, too. | ||
| In any case, we definitely need to take some extreme measures. | ||
| I'm so intrigued by Vivek's comment about Personnel and agencies and and authority and power. | ||
| I think he's referring to a thing I'd studied a long time Which is one of the best things to come out of the Trump administration right at the end You remember this executive order concerning schedule F the idea of reclassifying? | ||
| In fact, is that something about what you're referring to? | ||
| Okay. | ||
| Oh rhymes with exactly what I'm talking about. | ||
|
unidentified
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Yeah. | |
| Yeah, okay So this is extremely important because and people need to understand that we have a fourth branch of government called the administrative state That is really unelected and imagines itself to be a sort of a meta-layer on top of the other three branches. | ||
| And Trump had this brilliant idea with an executive order that was passed two weeks before the election, where he ordered the reclassifications of a vast number of executive employees that were involved in policymaking and interpretation, wanted to reclassify them as Schedule F, which would enable the president actually to get rid of these employees and fire them. | ||
| you know, if he didn't like what they were doing, that would, that order was just a brilliant achievement | ||
| as far as I'm concerned. | ||
| I mean, like, and I don't know legislatively what can happen to institutionalize that Schedule F thing, | ||
| but here's how important that is. | ||
| It didn't get a lot of public attention at the time, you know, when Trump signed the executive order, | ||
| but all the sort of insider sources, like the Washington Post and The Hill | ||
| and these various things were screaming about it. | ||
| This would be fundamental. | ||
| This would change everything about America. | ||
| We can't do this. | ||
| This is horrible. | ||
| We need these unelected bureaucrats. | ||
| Run the country, right? | ||
| That's exactly right. | ||
| This is where the action is. | ||
| Again, we're going to talk about the tug-of-war and the debt ceiling, but we have two threats to America that come from an over-expansive, over-spending federal government. | ||
| One is actually just the loss of fiscal discipline that shrinks the size of the economy over the long run that leaves people to suffer economically. | ||
| But the other is the fact that the people who we elect to run the government aren't even the ones who are running the government. | ||
| And I think that those two things actually go together. | ||
| That if you thin out the administrative state, the people who are doling out all of that money in the form of entitlements and subsidies and so on, not only do you solve the economic problem, which is where an older generation of Republicans was focused, but you also restore democratic integrity to the elected government in the same fell swoop. | ||
| And this is where the action is. | ||
| And the Schedule F is like one item on a menu of many, and we could spend hours talking about this. | ||
| I think legislatively, there is a lot that actually think Republicans could lead the way. | ||
| In making this a lot easier. | ||
| That was a clever trick and a good one by President Trump in the waning days of the administration. | ||
| But we don't have to be that clever if through the front door, we get rid of these civil service protections. | ||
| We get rid of these laws that say the president has to spend money that Congress appropriates, even if the president doesn't want to. | ||
| We have to give the president the ability to shut down administrative agencies. | ||
| And that's going to, believe me, the net effect of that, talking about the debt ceiling, the knock-on effects of saving money over the long run, These are just rules of the road that prevent us from ever getting in the position that we're in right now, bumping up the debt ceiling every so often. | ||
| But it's not even about the money. | ||
| It's about actually restoring the integrity of self-government itself. | ||
| And it's not that these are different issues. | ||
| They go hand in glove together. | ||
| And the only thing that, you know, If I have one criticism of President Trump on this front, it was that he only did it in the last two weeks. | ||
| This is actually what draining the swamp is all about. | ||
| And part of the reason Republicans are shy right now to cut entitlements or whatever is that, unfortunately, over the last five years, Republicans don't have the greatest track record when it comes to government spending themselves. | ||
| If they did, I think they would have more of a solid footing on which to speak confidently right now about making the kind of reforms we need to cut the spending. | ||
| Well, real quick, one more on this, so I hate to be the Debbie Downer here, but Joe Biden clearly ain't going to do any of the draining that you guys would like to see and that pretty much everyone watching this would like to see. | ||
| Here's Biden's thoughts on the debt ceiling. | ||
| They want to raise your gas prices. | ||
| They want to cut taxes for billionaires who pay virtually only 3% of their income now. | ||
| They want to impose a 30% national sales tax on everything from food, clothing, school supplies, housing, cars. | ||
| Look, if Republicans want to work together on real solutions and continue to grow manufacturing jobs, build the strongest economy in the world, and make sure Americans are paid a fair wage, I'm ready. | ||
| But I will not let anyone use the full faith and credit of the United States as a bargaining chip. | ||
| The United States of America, we pay our debts. | ||
| Oh, we pay our debts by borrowing more money to pay our debts. | ||
| Jeffrey, bring us home on this one and then we'll move on to the second. | ||
| Really critically, just to roll back slightly, on the Schedule F point, the administrative state, just so we understand where Biden stands on this, within hours of the inauguration, he repealed Trump's executive order. | ||
| That's how important it is to him. | ||
| the Democratic Party at this point is the sort of marionettes for the executive state, | ||
| for what's sometimes called the deep state. | ||
| And that's what they depend on, that's what they rely on. | ||
| And by the way, Biden's rhetoric here is ridiculous, 3%, the wealthy paid 3%. | ||
| It's just ridiculous, it's just completely untrue. | ||
| But apart from that, his rhetoric about the national sales tax, I'm telling you, the Republicans | ||
| a disastrous misstep in talking about a national sales tax. | ||
| I don't think that would be a good reform. | ||
| The Wall Street Journal, I think, very appropriately denounced that idea. | ||
| I love the idea of getting rid of the income tax. | ||
| I mean, that's a great idea, but don't replace it with a European-style VAT or anything close to that. | ||
| That's a bad idea, and all you're doing is giving fodder to the Democrats to continue with their lies and nonsense. | ||
| Vivek, just to fully bring us home on this one, you're doing okay. | ||
| I'm guessing you're paying a little more than 3%. | ||
| Fair to say? | ||
| Fair to say. | ||
| All right, very good. | ||
| Let's shift to the second topic here. | ||
| So the interest rates are going up. | ||
| Here's video of the Federal Reserve announcing that, yeah, they're going up 25 basis points. | ||
|
unidentified
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Federal Reserve raising by 25 basis points to a new range of $4.5 to $4.75. | |
| This is the eighth straight hike by the Federal Reserve since March, up by a quarter to $4.5 to $4.75. | ||
| The Federal Reserve sees ongoing increases as appropriate, so that phrase that some thought might come out remains in. | ||
| The Fed is still en route to a level it calls a sufficiently restrictive level of the funds rate. | ||
| One little bit of dovish commentary here says inflation has eased somewhat. | ||
| However, it says it still remains elevated. | ||
| Vivek, give me inflation 101 here for the people that don't pay that much attention to this stuff. | ||
| 25 basis points. | ||
| OK, it's the eighth hike in a row. | ||
| Why does this matter? | ||
| Why should people actually care about this? | ||
| Yeah, I mean, let's just zoom out. | ||
| I mean, at a 50,000 foot level, I think we shouldn't. | ||
| And the Fed is a joke. | ||
| But we'll come back to that later, just in terms of the present of what we're talking about. | ||
| For about a decade and a half, following the 2008 financial crisis, the Federal Reserve pumped a lot of money into the system. | ||
| They used a wide range of tools, fancy-sounding toolkits, to do it, but the bottom line is they pumped a lot of money into the system. | ||
| They did it with reckless disregard to what the long-run consequences of that would be. | ||
| There was a myth that somehow doing that would graduate from the old rules of finance and stop us from facing an inflationary crisis. | ||
| Turns out we do face, you know, rampant inflation now over the last year. | ||
| This was, of course, predictable. | ||
| Though they pretend like it wasn't. | ||
| It was, of course, exacerbated by other forms of government spending, exacerbated by shooting ourselves in the foot with respect to energy self-sufficiency, which then has other cost drivers. | ||
| But the Federal Reserve's actions over the last decade and a half were a big part of it. | ||
| If you ski on artificial snow for a long time, you're in trouble when the artificial snow machine turns off. | ||
| So what happens now is that because we're facing inflation, the Federal Reserve has to hike rates. | ||
| We've seen this movie before. | ||
| Paul Volcker had to do it under the Reagan administration and otherwise. | ||
| But right now, we face a little bit of a double whammy, because it's a little bit different than Volcker did it under Reagan. | ||
| You at least had, okay, when rates go up, that cools off the economy a little bit, reigns in inflation, but that was against the backdrop of Reaganite reform, like cutting taxes, like deregulating the administrative state. | ||
| Right now, we have a double whammy, because unfortunately now, the Federal Reserve has to have its hand forced to raise rates To fight inflation against the backdrop of a Biden administration that doesn't have the pro-growth agenda that the Reagan administration did. | ||
| So I think that that's a little bit of a double whammy, which makes this a little bit more painful, potentially at least a little bit more painful than last time around when you had the Volcker-Reagan complementary combo, at least. | ||
| Here it's two negatives pointing in the same direction from an economic perspective. | ||
| One is by the Federal Reserve cooling the economy, but the other is the Biden administration's policies are doing the economy no favors at the same time. | ||
| So, Jeffrey, to that point, I think you already alluded to this, but do you think that this administration understands economics in any way that any of us might understand economics or anyone who took economics 101 in college before colleges all went woke and then economics became about race or something? | ||
| Do you think they know what they're doing? | ||
| No. | ||
| Powell understands the challenge. | ||
| I think he was he felt like he was trolled during the pandemic era. | ||
| He was already trying to unroll these zero interest rates policies before the pandemic hit, and he went along with it and flooded more money in and went back to zero interest rates, which was a disaster. | ||
| By the way, I just want to say about Vivek's little soliloquy there, if you didn't catch everything he said, just rewind the tape and listen to it again about 10 times, because in just a very short space, he summarized 1,500 years of economic history and all the cause and effects related to zero interest. | ||
| That was a disastrous policy we pursued in 2008, and what it did is it massively subsidized the right side of the yield curve and led to all sorts of speculative investments, and the corporate oligarchy got ballooned out of control. | ||
| That's when we got ESG and DEI and HR departments going crazy, and the whole corporate sector just got ballooned. | ||
| So the shift of Powell to try to get inflation under control To finally having real interest rates again, and the left side of the yield curve has dramatically changed the economic calculations of the whole production structure. | ||
| And that's why I've seen the massive layoffs in all the high-tech firms and the big, the former high-flying companies are having to slice off all the foam off their companies in the form of layoffs. | ||
| And we've just seen the beginning of this. | ||
| And here's the thing. | ||
| Powell really has another two percentage points, whole percentage points to go before he can outrun the inflation. | ||
| We need to understand, even though, yes, it seems as if inflation has calmed down a little bit, the December reports of the sticky price inflation figures, that's excluding both food and energy, were actually higher than ever. | ||
| And approaching 6%. | ||
| So we've got interest rates at whatever they are, 4.25 or something like that. | ||
| We still have to get, in order, that terminal rate has got to get ahead of the inflation, certainly the sticky rate, before we're going to conquer this disaster. | ||
| So we've got a long way to go. | ||
| So there's still a lot of carnage to take place on what used to be called formerly the right side of the yield curve. | ||
| Bringing us back to economic reality. | ||
| So we've got a long way to go before we get this thing under control. | ||
| My read on the situation is that Powell is still ready to go on this fight. | ||
| But also, Vivek is exactly right. | ||
| The last time we tried this with Volcker, at least we had a reformist-minded administration who's working with a newly deregulated sector in trucking and telecommunications. | ||
| And all these other sectors that were deregulated into the last years of the Carter administration. | ||
| So we were headed to boom times because we were freeing up the economy. | ||
| That is not what's happening now. | ||
| So we're driving ourselves into recession and bringing about a greater degree of economic reality to control this out-of-control inflation that everybody's facing. | ||
| On the other hand, we're not Establishing a sort of infrastructure that's conducive to economic growth in the future. | ||
| There's no talk about dramatic tax cuts or more deregulation. | ||
| So, in a sense, we're headed to very hard economic times for that reason. | ||
| Right. | ||
| I mean, it's bizarre because they fundamentally don't believe that deregulation nor tax cuts actually help the economy, so then it kind of doubles down on itself. | ||
| Vivek, is there maybe a political silver lining here, which is that we are rolling into a presidential election just a year from now, basically a year and a half from now is when people will vote and that the Biden administration can't have the whole thing go off the rails because he or Kamala or Gavin or somebody is going to be running as a Democrat and you don't want to be in a full on recession when that happens. | ||
| I think the horse has left the barn and I'm not sure it's going to be exactly in their control. | ||
| If only they would wish it were. | ||
| It's not, but I think that there's a cultural silver lining that I care more about than the partisan politics of the next two years of this. | ||
| I agree with Jeffrey. | ||
| We are probably going to be in for hard times. | ||
| I don't think there's going to be a free lunch at the end of having to hike rates to fight inflation against the backdrop of punitive economic policies, which is at least preserving a punitive status quo when it comes to a regulatory state that tamps down on economic and private sector activity. | ||
| I think there is a cultural opportunity embedded in there. | ||
| Okay, sometimes I tell it to students, I could say it to our economy at large, hardship is not the same thing as victimhood. | ||
| What does that mean is these hard times can actually cause us as a culture to look in the mirror and ask ourselves who we are. | ||
| It is true that the three-letter acronymized version of capitalism from CSR to DEI to ESG to, you know, CCP, though that's another story, three-letter acronym, what's lurking behind the scene This was the product of excess, artificially created excess. | ||
| OK, mana raining from heaven on high. | ||
| It's like, you know, raining cocaine onto a bunch of cocaine addicts. | ||
| It's not exactly how you serve them. | ||
| Well, now the bell tolls, it tolls for thee. | ||
| Now is the time to actually pay for those sins. | ||
| That just may be a necessary part of not only just the economic cycle, but a cultural cycle where I think we have an opportunity to emerge stronger on the other side of it, to rediscover the fortitude we're going to have to muster. | ||
| In order to make it through the difficult times we have, I would, sorry to say, through policy created for ourselves, getting what we deserve in the short run might actually be a disciplining force for this country over the long run, as long as we learn the lessons from it. | ||
| And as long as, you know, the basic fabric doesn't break in the meantime. | ||
| So that's actually where I'm focused is making sure that basic fabric doesn't break. | ||
| And if it doesn't, Then I think we're gonna be stronger over the course of the next decade with the generation that grows up under different norms where we actually learned lessons that we should have learned over the last 15 years, but didn't. | ||
| That's actually a perfect segue to the next segment, which is about some possibly good news here coming out of the tech sector, which is sort of counterintuitive to everything we're saying, but we've got some info here from CNBC. | ||
| The S&P 500 rose to its highest level in five months on Thursday, As better than expected, meta results further improve sentiment around technology shares, which led the market lower last year. | ||
| The broader market index jumped 1.4% or its best level since August. | ||
| Meanwhile, the tech-heavy Nasdaq composite advanced 3% to its highest level since September. | ||
| The gains come ahead of a trio of big tech results after the bell in Apple, Amazon, and Alphabet. | ||
| Meta surged more than 25% in its best days since 2013 after reporting a fourth quarter beat on revenue and announcing a $40 billion stock buyback. | ||
| That helped investors look past losses in the business unit overseeing the metaverse. | ||
| Other mega cap tech stocks rose on the back of those results. | ||
| Shares of Google Parent Alphabet were up more than 6% while Amazon jumped more than 6%. | ||
| Apple shares gained more than 3%. | ||
| Tech stocks have outperformed in 2023 buoyed by recent signals of cooling inflation that investors expect could lead to a pause from the Federal Reserve in its aggressive rate hiking campaign. | ||
| The S&P 500 information technology sector is up more than 14% this year after a decline of more than 28%. | ||
| Last year. | ||
| I thought the more interesting part of that is this situation with meta where it seems to me nobody really wants to go into the metaverse. | ||
| Certainly not a metaverse that Mark Zuckerberg is going to lead us into because he doesn't even seem like a human on in this world that we're in right now, an actual carbon being. | ||
| And people just don't want to be strapped into these things. | ||
| I know they really want to push us there. | ||
| But on top of that, it doesn't seem like people are paying that much attention to Facebook. | ||
| But I guess if you do some stock buyback things and some other weird tricks, it can be good for shareholders. | ||
| Right, Jeffrey? | ||
| Yeah. | ||
| And also huge job cuts. | ||
| Right. | ||
| We've got to we've got to save the labor costs. | ||
| Those are the big costs. | ||
| And a lot of these companies have Cut 10, 15, 20% of the workforce. | ||
|
unidentified
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Yeah, I'll give you guys some numbers on that in a few minutes. | |
| Yeah, when Elon took over Twitter and fired four out of five employees and the platform became better than ever, that was a signal to the entire corporate world. | ||
| I was there last week. | ||
| The commissary is very empty. | ||
| There's a lot of tables and very few people. | ||
| Yeah, we gotta get that moved over to Orlando or Austin or somewhere. | ||
| We gotta get that thing out of San Francisco. | ||
| But I'm not sure how long these gains in big tech are gonna last. | ||
| We'll see. | ||
| I mean, Facebook has just become a big distributor of advertising. | ||
| I guess that's all it's ever been. | ||
| But it's also more controlled than it ever has been. | ||
| I mean, it's not been reformed from the height of its censorship days. | ||
| So I'm just not very optimistic about that thing. | ||
| I'm glad to see the metaverse flop. | ||
| That's been fun. | ||
| I mean, Zuckerberg massively miscalculated on that one. | ||
| But I'm not too optimistic about Facebook for the long term. | ||
| I'm really more interested in all these other alternative platforms that are springing up all over the place that I hope Can replace some of the failings of these old companies. | ||
| And they're going to face it. | ||
| And we're working on it with Rumble. | ||
| We're working on it. | ||
| Yeah, Rumble's very exciting. | ||
| But, you know, Vivek and I were talking before the show, you know, just the need to create all sorts of new institutions, you know, financial management places and video distribution and think tanks and just everything. | ||
| The failures of the last three years should have really highlighted Just how much has gone wrong in America and just the urgency to completely rebuild. | ||
| I mean, people don't understand that. | ||
| They haven't been paying attention. | ||
| You know, you asked something earlier that I don't think I answered. | ||
| You said, does the administration believe, do they understand economics? | ||
| My worry is that we have people in charge of this right now that have really a different view of what constitutes success. | ||
| It may not be prosperity. | ||
| It may not be a thriving population, you know, where we, ever more people share in the riches of the good life. | ||
| A sign is, you know, the continued attack on home appliances. | ||
| You know, the attempt to get rid of the gas stove, and God bless your governor, Dave, right? | ||
| I mean, he's tax-free, tax-free stoves, right here in the free state of Florida, as of this week. | ||
| That was so great. | ||
| But it's intensifying. | ||
| And, you know, that poor slob at the Consumer Product Safety Commission who was put in charge of announcing to the world that they intended to get rid of the gas stove, he's like, I don't know, that's what they told me to say. | ||
| But really, it is a plot. | ||
| I mean, it is going on. | ||
| It's all part of the huge attack on fossil fuels. | ||
| And their view of our future is not the same as our hopes for our future. | ||
| They're really divergent. | ||
| With the Biden administration, we have something like what I've called the sadistic state. | ||
| I mean, they like to see us growing in greater degrees of poverty, you know, seeing us restricted to 15 miles, you know, within our cities and, and living off, you know, eating bugs, which by the way, I tried some bugs in Mexico City recently. | ||
| I don't, I don't recommend them. | ||
| They're very, they taste like rancid fish. | ||
| I mean, it's just not, that's not, that's not going to be the basis of a good diet anyway. | ||
| They have a different worldview than you and I have. | ||
| And this is very important to understand. | ||
| They like privation, punitive policies. | ||
| They get a kick out of seeing us suffer. | ||
| When it gets too cold, our electric cars are not going to go as far. | ||
| And that sort of delights them. | ||
| They want to eliminate fossil fuels. | ||
| And the sooner we understand that, the sooner we're going to be able to find ourselves in a position to combat it. | ||
| I think it's a great point, because as they always say, you will own nothing and you'll be happy. | ||
| And it's like, no, I'd prefer everyone to own whatever they want. | ||
| And I think that it's not that the materialism itself is the thing that makes you happy, but your chance to go out there and get what you want. | ||
| But Vivek, I want to ask you something specific on the products of these companies. | ||
| Because we can talk about, okay, they're 6% more, they made a little more money or stock buyback or all that. | ||
| But to me, it seems like the product of Facebook no longer works. | ||
| The product of Amazon does work, right? | ||
| Like people are still buying stuff on Amazon relentlessly. | ||
| I try not to do it as much as possible, but I obviously I still do as well. | ||
| There's a convenience factor there for sure. | ||
| So that one makes sense to me. | ||
| The product of Apple, it's like, Yeah, there's a new iPhone every year, but they're not innovative anymore. | ||
| The Apple Watch, you never really see anyone wearing it. | ||
| Like, the products that are driving these things don't seem to be connected to the profits in a weird way. | ||
| Yeah, I mean, I think that that's a, you know, we could talk about that in generality. | ||
| I mean, the reality is there's a time and place for everything. | ||
| Consumer markets shift, the culture shifts, demand shifts. | ||
| And the question for great companies that are built to last is, Are they able to actually out-innovate what their old product was to be able to meet the new need? | ||
| And time will tell on Facebook. | ||
| Look, I am not, I'm actually, probably the first thing I've said that even has a slightly different opinion than Jeff, is I don't know if from a practical standpoint this has put a fork in the metaverse vision or not. | ||
| Mark Zuckerberg is, you know, in the past overspent money acquiring WhatsApp for what people thought was Was far more money than he should have paid, which actually turned out to be one of the most valuable properties of the company for a long time to come. | ||
| So there's the business decision component of it. | ||
| And time will tell whether or not he's able to build a metaverse or not. | ||
| I, as a citizen, as a side note, have a separate view on whether that is desirable for society to dissolve the boundaries between the online and offline world, which is what the creation of the metaverse calls for. | ||
| And so Dave, in some sense, yeah, you're right. | ||
| Facebook doesn't work. | ||
| I think Mark Zuckerberg sees that, right? | ||
| So he is trying to do the thing that companies ought to do in order to survive over the long run is they have to out-innovate what got them to where they are to get to where they need to go. | ||
| But that business question ought not be conflated with the normative question as to whether or not that state of the world is even desirable. | ||
| I can come out on the side as a citizen, believing that it is not. | ||
| I also believe that the creation of other alternatives, in the meantime, not all these solutions are going to be driven through government, but plural choice from tech to financial management, as Jeff said. | ||
| I think that plurality of choice, even through the market itself, the sooner other innovators are able to step up and offer other visions and other alternatives, I think the better off we're going to be as a culture. | ||
| I do think, though, I can't resist myself here, just to go back to that discussion where you guys, the exchange you just had. | ||
| I think you're getting really close to the flame, and I wanna get us a little bit closer about what's actually going on on this self-defeating movement. | ||
| It's not, and I think conservatives make this mistake sometimes, Dave, it's not about reading comprehension. | ||
| It's not about failure of economic comprehension. | ||
| And I think it's not even about failure or even a different vision of the future, though I think that was getting closer. | ||
| I think it's an obsession with the past, actually. | ||
| And I think that it's not that they have a different vision of what success looks like. | ||
| It's that they have a different attitude towards success itself. | ||
| I think what's at the heart of this cultural movement, I'm not just talking about government here, I'm talking about across our culture, is the new attitude of apologizing for success itself. | ||
| It's not a different vision of what success looks like, it's that success itself is the sin. | ||
| And you have to self-flagellate yourself, wear a equivalent of a hair shirt, to apologize for the sins of accumulated success in eras past. | ||
| And so these policies in some ways, are not about a boneheaded approach to getting towards what we see as the right place to go. | ||
| It's about instead apologizing for the fact that we got as far as we did. | ||
| And I think the best embodiment of that is this new climate religion, which if it really was even about the climate, you would have some problems with shifting oil and gas production. | ||
| You talked about Fossil Fuels Day Shifting oil and gas production to places like Russia and China. | ||
| That would be a problem if climate change was your concern, or you'd be in favor of nuclear energy, if you cared about carbon emissions. | ||
| But the fact that this same movement is hostile to nuclear energy and totally apathetic towards shifting fossil fuel production to the East, when in fact it's all about just constraining it here in the West, reveals that what's really going on in our culture, and I think this gets right on top of the flame, is apologizing for success itself. | ||
| And that's sort of the inner animal spirit that's been domesticated in America that we need to untame. | ||
| And it's at the intersection of culture and economics. | ||
| It's not one or the other. | ||
| The two go hand in hand together. | ||
| Well, that's exactly why you started Strive. | ||
| And for people that didn't see my first interview with you on that, we'll put a link to it down below so that they can see exactly how everything you're talking about is connected. | ||
| You know, it's interesting also what you said about the cultural aspect of it, whether we as people wanna go to this metaverse with Zuckerberg or not, versus the company that just has to pivot because nobody's paying attention to Facebook anymore. | ||
| It's like, man, just watch Ready Player One or read the book and then decide, do you wanna follow Mark Zuckerberg? | ||
| Into that world. | ||
| And I think probably the three of us have the same answer to that one. | ||
| Just a little bit more on some of the cuts that are happening in the industry. | ||
| This is from Bloomberg at Twitter. | ||
| And Jeffrey, you referenced this. | ||
| The diversity, equity and inclusion team is down to just two people from 30. | ||
| One former employee said a DEI worker who was let go from a popular rideshare company said that their job search has stalled as other technology companies assess their finances. | ||
| And just before getting the axe at separate tech giants this fall, two DEI specialists said leadership had stopped setting long-term goals for their departments entirely. | ||
| The layoffs sweeping the technology industry are gutting diversity and inclusion departments, threatening company pledges to boost underrepresented groups in their ranks and leadership. | ||
| Listings for DEI roles were down 19% last year, a bigger decline than legal or general human resources jobs saw, according to findings from Textio. | ||
| Which helps companies create unbiased job ads only software engineering and data science jobs saw larger larger declines at 24 and 27 percent respectively You know I can tell you guys having started locals and obviously merged with rumble the idea That we would be sitting down in the hiring process, and I'm personally not that involved with with the hiring But I am involved in policy And how we go about doing public facing business. | ||
| The idea that we would be looking at engineers and going, you're a lesbian and you're black and you have a lazy eye is so bananas. | ||
| But that's, I guess, why we will build great products and why, Jeffrey, as you said, Elon had to fire half the company when he bought that when he way overpaid for a very faulty product. | ||
| Yeah. | ||
| Look, those statistics just make me so happy. | ||
| And there's not a lot of happiness in the world, but watching the euthanasia of the overclass | ||
| embedded in HR and DEI and ESG and all that, is just a source of immense joy for me. | ||
| I just, I have to say, and there's not, like I say-- | ||
| So says you, you white guy. | ||
| (laughing) | ||
| The thing is that all these divisions are not really about stockholders. | ||
| They're not really about company performance. | ||
| They're not about profitability. | ||
| And it would just be nice to see companies get back to what they're supposed to be doing, which is bringing value to the customers and value to the stockholders. | ||
| That would be a nice thing. | ||
| All this stuff happened, as Vivek said, over the last 15 years, when we massively distorted production structures with Ben Bernanke's fancy pants trick to get us out of the housing crisis in 2008. | ||
| It wrecked American capitalism as we know it. | ||
| It wrecked everything. | ||
| It was a huge cultural cost. | ||
| And at the time, I didn't really quite understand what was about to happen. | ||
| We've lived through a decade and a half of growing nonsense that's finally being cut down to size. | ||
| I hope we're just beginning that process. | ||
| It's an absolute delight to see this. | ||
| I mean, I was looking at job openings. | ||
| Right now and that the data is too aggregated But you can see that the job openings and and like real work kind of stuff like hospitality like bringing food to people and making drinks and cleaning up rooms and hotels and That sort of things like actually doing real work or driving trucks or delivering food that those are those are rising, you know Dramatically right now. | ||
| I mean there's opportunities for everybody But in the professional business service class, they've been falling now for about two years now. | ||
| So we're starting to see these two things cross, actually. | ||
| What this means for a tremendous number of highly credentialed, six-figure, do-nothing employees, you know, who rode out the pandemic in their pajamas at home, is that they're all going to be having to face dramatic lifestyle changes. | ||
| Huge career changes are coming. | ||
| And Joseph Schumpeter in 1945 said that is the most sort of Dramatic thing you can ever do to people is to sort of downgrade | ||
| their social status But that's that's going to happen to millions of people | ||
| It's happening now and it's going to continue to happen for the next couple years | ||
| Vivek, you must be very conflicted about this, because on one hand, you started Strive to fight DEI and fight ESG, so it's nice seeing that, you know, old businesses are coming around. | ||
| On the other hand, no offense, you have a darker skin shade, and you must want to use that against people like us, so the conflict must be just endless when you wake up. | ||
| Oh, it just eats me inside. | ||
| What a, what a, what a titanic conflict within, I would say. | ||
| It's like Congresswoman Ayanna Pressley, right? | ||
| What'd she say? | ||
| We don't want any more brown faces that don't want to be a brown voice. | ||
| Well, I don't believe that your race has anything to do with more than your melanin content than it does with the content of your ideas. | ||
| But I will tell you, I am, I'm experiencing some level of joy in seeing The effect that, you know, not only that I believe I've had and others have had over the last year, you know, strive has had on the corporate economy, but even the fact of economic discipline reigning in what's really just been a form of cultural excess. | ||
| In a certain sense, the shame, a lot of this actually did begin, you know, we talked a lot about the Federal Reserve policies in the back of the 2008 financial crisis, which is one culture of excess, the skiing on artificial snow problem that created this entitled sense of luxury that was actually artificial. | ||
| Part of it was also even the sin dating back to 2008 itself of bailing out the big banks. | ||
| I mean, speaking of Schumpeter, you know, I mean, creative destruction is an important part of the cycle of capitalism and how this is supposed to work. | ||
| And he meant that in a slightly different sense because he'd also laid the groundwork for socialism in his work. | ||
| But to channel the spirit of it, if we hadn't bailed out the big banks, then I think that we wouldn't have had to feel this apologist culture to repay the sins of capitalist excess in the period leading up to it. | ||
| But I think we can learn those lessons now to see companies across Silicon Valley, even earlier last year, a company like Netflix doing a 180, saying that they weren't going to allow employees to say that there's projects they don't want to work on anymore. | ||
| They said, if you don't want that, show yourself the door, close the door on your way out. | ||
| We're going to put excellence at the top of our cultural document. | ||
| But they only did it, crucially, after they had a disastrous quarterly earnings report where revenue, subscribers, profits were all down. | ||
| I think this economic disciplining is part of what takes a DEI department from 40 to 2. | ||
| I still think that that's too, too many, because the E in DEI, equity, is fundamentally incompatible with excellence. | ||
| Excellence demands certain forms of unequal results. | ||
| I'll say that out loud, even though that's a thing you're not supposed to say. | ||
| But I think that we're going to see that come back, if not organically, as it probably should have out of an intercultural revival, now out of economic necessity, both at a company level, be it Facebook, Meta, be it Netflix, or at an economy-wide level. | ||
| Weirdly optimistic, Dave, actually, that some of this hardship is gonna be good for us. | ||
| Yeah, so I wanna do one other thing with you guys because I like this phrase, cultural recklessness. | ||
| Speaking of cultural recklessness, someone at a network once gave Stephen Colbert a job to host a late night show. | ||
| Here is Stephen Colbert talking about Joe Biden finally lifting the COVID regulations. | ||
| Well, eventually lifting them. | ||
|
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Tonight, breathing easy, because the White House has finally announced they plan to end the COVID public health emergency in May. | |
| Take that, COVID! | ||
| We beat you! | ||
| Shove that up your nose and rotate it five times. | ||
| This has been a long time coming. | ||
| I wish you could see the smiles on the faces of my audience. | ||
| And I wish I could, too, because they're still wearing masks. | ||
| The end is near. | ||
| The end is near. | ||
| This is a huge moment. | ||
| After all the COVID we've all been through. | ||
| The Delta variant. | ||
| Omicron. | ||
| Omicron VA2. | ||
| XBB.1.5. | ||
| XBB 0.1 0.5 God, irony is dead. | ||
| Comedy is dead. | ||
| I mean, the fact that those people are still wearing masks and they're applauding it and he's making a joke about them while he's not masked, just, it's the perfect snapshot of what COVID became. | ||
| But Jeffrey, you know what I'm going to do here, because every time you're on, I give you credit. | ||
| You, from day one of COVID, Wrote a piece, I mean literally day one of COVID, if not before it really hit, saying that none of this was gonna work, lockdowns, masks, the whole freaking thing, so credit where credit is due, so I hand it to you. | ||
| Yeah, that was January 27th I wrote that, and I wrote it again on March 8th, I wrote it again on March 12th, and I watched everything, watched the whole world go dark, and the three, how do you say, hammer blows to American liberty in the form of lockdowns, And then the mask mandates, and we know now, of course we knew then, that the masks don't do anything to stop the spread of a virus. | ||
| And then finally, the vaccine mandates. | ||
| There are three tests of your compliance and your intelligence. | ||
| Unfortunately, a lot of people failed all three. | ||
| A lot of people failed at least one of those three. | ||
| But the really wise and intelligent among us, and you're among them, you passed all three tests. | ||
| But it's interesting that He's still got his audience mask. | ||
| It occurred to me watching that, when I first saw that clip, I thought, wow, these people just continue to engage in these mythological superstitious religions. | ||
| What's wrong with them? | ||
| But then he realized something. | ||
| This is a way that he can assure that everybody in his audience is going to laugh at his jokes. | ||
| Because anybody who would sit there in a mask is going to be an idiot, right? | ||
| It's self-selective. | ||
| It's a way of filtering the population of his audience to make sure that people think he's funny. | ||
| I mean, Vivek, isn't it just extraordinary watching that at this point and that people still, I mean, it goes to the group think, it goes to the failure of just all of us. | ||
| I would put all of us, myself included, that we all should have screamed more. | ||
| I was pretty good after two weeks to flatten the curve. | ||
| I pretty much saw it right then. | ||
| As I said, Jeffrey got it on day one, but that we all should have been just absolutely enraged. | ||
| And I think what scares me now Is that there's a whole bunch of people that are going to gladly welcome it when it comes for climate lockdowns or COVID-6 or monkeypox or whatever's next. | ||
| Or climate change, right? | ||
| Climate catastrophe, because that is definitely the one that is coming with the same religion rearing his head under under new avatar. | ||
| So, look, I mean, this shows up in many different forms, even as it relates to COVID. | ||
| Just to close the loop on that one. | ||
| I mean, it's not just the masks in his audience or whatever late night. | ||
| You know, Novak Djokovic, I'm a big tennis fan, so this is a little personal to me. | ||
| Novak Djokovic just won the Australian Open. | ||
| Yep. | ||
| Quite possibly, arguably if not already, the greatest tennis player of all time. | ||
| Will, for the second consecutive year, at least as of now, not be allowed to enter the United States to play the next tournaments of like Indian Wells and Miami, top tournaments that are coming up, after he won the Australian Open? | ||
| It's just mind boggling. | ||
| And wasn't allowed to play in the Australian Open the year before. | ||
| Because he wasn't vaccinated. | ||
| But every year that passes, I mean, even if you just are lock, stock and barrel bought into the religion, it doesn't make sense on its own terms now for a vaccine that's how outdated relative to even not only what the case numbers are, but where the virus is. | ||
| I'm almost dignifying it by even talking about it and getting into the detail of it, because it's just it's a religion at its core. | ||
| And I just think that the interesting thing to think about, whether it's COVID, whether it's climate, whatever comes next, and you're right to ask that question, because this ship has finally moved past the horizon where hopefully we're not gonna see this one anymore. | ||
| It's just gonna be a new one that shows up. | ||
| What is it within each of us, right? | ||
| We spend a lot of time, myself included, complaining about the collusion of private power and state power to do what neither one could do on its own to create this new authoritarian form of centralization. | ||
| And we've seen it, and we're gonna continue to see it. | ||
| But it does take two to tango. | ||
| And I think that the question for us to also start with at the bottom up level is look in the mirror and ask ourselves within each of us, what side is it of our own heart and soul that wants to bow down to this authority? | ||
| This is an ancient human instinct. | ||
| I mean, it's why the Israelites wanted to go back to be ruled by Pharaoh when they were lost in the desert. | ||
| I mean, this is innate stuff in humanity and in each of us. | ||
| And I think that Though it's easy for us to point to the, you know, I think a lot of this is top-down, a lot of this is cynical, a lot of this is authoritarian and power centralizing, but it's not just that. | ||
| I think that it only works insofar as each of us within submits to the inner slave within each of us, where we're told to shut up, sit down, and do as we're told, but we tell ourselves to shut up, sit down, and do as we're told sometimes, too. | ||
| Maybe not Jeffrey, because it sounds like he was all over it since day one, but most of us. | ||
| Most of us do. | ||
| I felt very much alone, and we had a hard time finding each other. | ||
| It turns out to be rather deliberate now, looking back at it. | ||
| But your comments do remind me of this book by Matthias Desmet, which I haven't read, but I've seen so many wonderful excerpts of it. | ||
| I think it's called Psychology of Totalitarianism or something. | ||
| We really do need to come to terms with this. | ||
| And on the travel restrictions in particular, it's not just Djokovic. | ||
| I have a fellow of Brownstone Institute in Canada who cannot come for a fellow's retreat I have in two weeks because she refused the vaccine. | ||
| And there are millions of people all over the world that are profoundly affected by this. | ||
| In the United States, unvaccinated foreign nationals cannot come to visit to see the Statue of Liberty. | ||
| That's what we have going on in this country right now. | ||
| Not enough people care about it. | ||
| It's an outrageous thing. | ||
| I continue to run articles about it, but I think I'm one of the only venues that's, | ||
| and it's not clear that when the emergency ends in May, if that was going to be lifted or not. | ||
| This is an outrage that we're doing this. | ||
| And Jeffrey, they might as well not see it because the Statue of Liberty in this environment is just a hollowed out husk of itself anyway, right? | ||
| What's the point of coming to see a symbol if the place to which you come doesn't even live what it's supposed to symbolize? | ||
| So in a certain sense, there's a poetic, tragically fitting poetic justice to the whole thing. | ||
| But, you know, I think that it starts from looking within, each of us too as citizens, Dave, I appreciate your vulnerability and openness and sharing your own perspective on COVID, but I just think that I wish more people do what you did. | ||
| We all should have screamed louder. | ||
| We all should have screamed louder. | ||
| I think one of the things that they really preyed on is sort of the blasé attitude that most people just have towards life. | ||
| And maybe that's just because of video games and porn and drugs and whatever. | ||
| Social media. | ||
| People just go and go and go. | ||
| And then there was like an excitement for a couple of weeks and people were like, oh, I'm locked in my house. | ||
| At least it's different. | ||
| Something to that effect. | ||
| Yeah, something to that effect. | ||
| Listen, you guys, this was an absolutely fantastic panel. | ||
| I definitely want to have you guys on together. | ||
| I'll link to both of you. | ||
| Jeffrey, we're going to link to your early COVID video because it's just phenomenal. | ||
| You nailed everything. | ||
| Vivek, we're going to link to your original interview with me, which was all about Strive and some of the solutions to a lot of what we talked about here today. | ||
| I appreciate you guys. | ||
| Have a great weekend. | ||
| And we are going to do a postgame show on Locals in about 42 seconds. | ||
| So stay with me, everybody. | ||
|
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...that I have worked, that I have used myself for you in these years, that I have used my time properly in the service of my people. |
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