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April 19, 2023 - Truth Podcast - Vivek Ramaswamy
50:49
US vs. China: The Fight for Economic Independence with Jim Nelles | The TRUTH Podcast #15
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So, we're starting to see an interesting pattern emerge across different controversies that seem like they have nothing to do with each other.
Public schools across this country were closed for the better part of a year, creating a systematic inequality amongst kids who went to public schools versus the smarter private schools that didn't close.
And that's going to last a generation and we're going to have to pay for it.
That's as it relates to school closures.
Now you go to similarly ongoing risk factors today.
Let's say the war in Ukraine.
This idea that deterring Putin is an unknown.
Is he going to go for Poland?
Is he not?
We can't say for sure, but on the current facts, what do we know?
We know that Russia's been revealed to be a paper tiger.
OK, the fact that their military capacity is not nearly what we assumed that it was.
In fact, our defense intelligence establishment predicted that Ukraine would fall within days.
The same establishment that actually predicted that Kabul would not fall for the better part of a couple of years got this one wrong.
But again, fear wins the day.
We can't say for sure that Putin won't go for Poland if he succeeds in annexing Ukraine.
And so we do the thing that the technocracy preys on, which is fear about the unknown possibility.
However fringe that possibility may be, that then wins the day again to do what would be the so-called cautious thing to do.
Give so far $100 billion plus in aid to Ukraine and counting.
You're seeing a pattern here where the so-called safe thing to do, school closures on the one hand, $100 plus billion in aid that could have been spent on different domestic priority agendas or even foreign policy priority agendas.
What it sounds like the safe thing isn't really actually the safe thing at all.
It's just what feels safe through the lens of the technocracy that preys on fear.
You saw the same thing with respect to the Silicon Valley bank bailout.
It really wasn't a bailout of the bank technically, but it was a bailout of Silicon Valley itself.
This idea that a bank that was different than all the other banks in the United States, only 11% of its deposits were actually insured.
That's very different than most other banks where a majority of banks deposits are insured.
They said, well, even still, this bank that we said for the longest time is not systemically important.
It's a fringe bank that serves a rare set of customers, Silicon Valley tech companies.
Somehow over this last weekend became deemed to be systemically important where those Silicon Valley interests basically said there's going to be a bank run in America on Monday unless you bail us out.
And again, the technocracy wins buckling to the fear of the unknown and the technocracy wins the day.
We bail out those banks, even though that creates new corporate moral hazard for probably a decade, if not a generation to come.
And so the seemingly safe option isn't actually the option that's either safest or most desirable for us in the end, but they use it.
This is one of the tricks of the technocratic class.
we lack a fundamental self-confidence, when we lack fundamental conviction in what we know to be right as Americans, when that conviction is lacking, they're able to prey on that fear to be able to implement an agenda that they otherwise would not have been able to implement from COVID school closures to a war in Ukraine to a bailout of special interests they're able to prey on that fear to be able to implement an That's part of what the cost of the loss of self-confidence in America is all about.
When we lose our self-confidence about our actually deepest and even most obviously held convictions, that's what allows us to fall prey to the new culture of fear.
One of those areas where I predict that to play out over the next year is actually going to be, if I'm successfully elected as president, in implementing one of my core policy priorities, which is to declare independence from China.
The thing that we're going to hear is that this is going to result in economic calamity here in the United States.
You know what?
Even though we know that China is a long-run enemy, even though China is using American companies to advance their geopolitical ends, we just can't afford to actually decouple.
We just can't afford to declare independence.
Now, my broader view here is deeper, is that if we're willing to do it, We actually won't have to because China will reform its behaviors because there will be greater loss to them than there is to us over here.
That's really what more deeply motivates me to seize on this moment when Xi Jinping has shot China's economy in the foot last year as part of his grip on a third term of power.
That's really what's going on from my perspective.
But you can't be a bluff.
We actually have to be willing to declare independence from China.
That will involve some measure of sacrifice.
No one should deny that.
But you can make a sacrifice if you know what you're sacrificing for on the timescales of history rather than electoral cycles, this thing we call America.
And if you're willing to make that sacrifice, at least in geopolitics, it means that you probably won't have to make that sacrifice at all.
But with that being said, I'm actually joined today by Jim Nels, somebody who knows a lot about supply chains, including the international supply chains that provide the products, the shoes on our feet, the phones in our pockets, the products that power our everyday modern way of life, and who's thought a lot about these supply the products that power our everyday modern way of life, and who's thought a lot about these supply chain And as I've said, Even if we do declare independence from China, it's not just a rosy picture.
We got to get into the weeds of understanding what the potential consequences of that could actually be.
And so among other topics, that's what I'm going to be discussing with Jim today.
Jim, welcome to podcast.
Thank you very much.
It's great to be here.
So, share just a bit about your background, a bit about, you know, your area of expertise, particularly in this area of supply chains, how you came to that, and then we'll get right into the conversation.
Sure.
So, I've been in supply chain, now that I'm an old man, for about 25 years.
Okay.
Fell into it by accident.
My first job out of the military was at an industrial distribution company, and while I was doing my management rotation through procurement, the procurement manager quit, and I was a procurement manager the next day, and just kind of moved on from there, and then after I got my MBA, I started doing consulting and ended up doing supply chain and procurement consulting and just have been unable to get that piece of gum off my shoes.
So it's what I've been looking at, it's what I've been studying, it's what I write about primarily, that and the economy.
And it's an area where no one thought about it for the last 50 years until two years ago.
And one of the things that I think people misunderstand about what's happened is COVID did not cause the supply chain crisis.
COVID exposed the weakness of the American supply chain.
When you have a supply chain that is 12,000 miles long, you use just-in-time inventory, you have the two worst ports in the world in Long Beach and Los Angeles when it comes to efficiency.
And then you move those things over broken roads with a shortage of truck drivers.
It's not surprising that when COVID happened and there were major hiccups, we couldn't find diapers on the shelf and we couldn't find toilet paper.
It does challenge the conventional narrative a little bit, right?
Right?
That COVID put pressure on us and that's why we were overextended or whatever.
But that's an interesting thesis.
Kate, can you put some more meat on that bone?
Sure.
So if you look at what happened What happened?
Typically from the port of Shanghai to the port of Los Angeles, it's a four to six week transit time for a ship to come there.
The ship shows up.
From the port of what did you say?
Shanghai to the port of Los Angeles.
Okay.
Four to six week transit time and then usually less than a week to unload.
What we saw during COVID because of what was happening in China, whether or not you thought that they were doing that on purpose to hurt the US economy or not, we saw that transit time go up to two months.
And then the wait time at the ports.
And just what is your view for why that change took place?
A number of things.
One, they had the zero COVID policy.
They did too, right?
Yeah.
So as soon as they would have an outbreak of COVID, they would shut down shipping, they would shut down trucking, they would shut down the cities, they would shut down plants.
And so it just caused irregularities, if you will, in the supply chain.
You couldn't predict when things were going to come.
And what kinds of goods are we talking about here?
You're talking about everything from tennis shoes to your Peloton bikes to clothing.
Anything that came out of Asia.
So the time went up by what?
3, 4x?
It went up at least by 2x, sometimes 3 or 4x.
Okay.
And then the congestion at the ports because of the issues that we have in our ports.
On our side.
On our side.
So if you look at, there was a recent survey that came out and rated the 350 largest ports in the world.
The port of Long Beach and Los Angeles were 349 and 350 when it came to efficiency, meaning it takes us nearly twice as long to unload a ship as it does any other port in the world.
So you look at ports in Saudi Arabia, you even look at a port in the Congo, and they do better than we do.
So have we always been this bad, or is this a more of a recent trend?
We've always been this bad, but because there were no hiccups in the supply chain, no one noticed.
I guess why is it that we're so inefficient when it comes to Port unloading.
Is that the term you use, port unloading?
You can use that term, that's fine.
What's the term of art?
Debarking.
Debarking, yeah.
But at the end of the day, it comes down to really two things.
Over-regulation and the power of the unions.
So you think we're more regulated than places like Saudi Arabia?
Absolutely.
When it comes to debarking.
So at the port, the big issue that we have is the unions will not allow automation in the ports.
Why not?
Self-interest.
Self-interest, right?
So they don't want to be able to use...
One person could control six remote cranes, for example, and unload six ships at a time, whereas now we need multiple people to do that.
Okay, that's one.
Number two is we have over-regulation of the trucking industry.
So once something actually comes off of a ship...
It's hard to get it to where it needs to be.
And those overregulations happen in two areas.
One, the state of California overregulates.
They've taken nearly 100,000 trucks off the road in the last 18 months because they don't meet California emission standards.
So any truck with an engine that was older than 2010...
So you think it's because of...
Okay.
I mean, it's one of these...
Okay, keep going.
Sorry, I'll come back to this.
Yeah.
And this is my...
Not my favorite one, but my favorite example, if you will.
If you were a young woman who fought in Iraq or Afghanistan, and you were a truck driver in Iraq and Afghanistan, you come home, you leave the military, you're not allowed to drive a commercial truck across state lines until you're 21 years old.
You can't get a commercial driver's license to cross state lines until you're 21. Why are we telling someone who was able to drive a truck in a war zone that she's not capable to drive a truck from Missouri into Southern Illinois?
Why?
Regulation.
It's all self-interest.
What is like a worker unionist, union protectionist kind of?
There's a union thing, but there's also just antiquated rules.
I'll give you another example, the Jones Act, something that most people don't even know about.
I don't know about it, I have to admit.
So Jones Act says that if a foreign ship makes a port call in the United States, it can't make a second port call in the United States.
Meaning, if you are a ship full of goods that come from Vietnam, let's say, a ship full of textiles, And you have deliveries to make in Los Angeles and in Hawaii.
You can only stop at one of those two places.
And then the goods have to be offloaded, put on a U.S. flagship, and moved that way.
I'm just trying to...
I mean, I want to give the most charitable understanding.
I'm trying to understand what the...
What logic might have been for them to worry about if it's already coming to the U.S. once, what exactly are they worried about if it was to make a second stop?
To promote U.S. shipping is basically what it was.
Are you kidding me?
To promote U.S. shipping.
And here's the irony.
Right now, there are only about 100 ships that meet requirements.
But even promoting U.S. shipping by going from one U.S. port to another as opposed to going internationally?
Correct.
That seems nonsensical.
When was this Jones Act passed?
Several decades ago.
I think it goes back...
It's like a Carter era thing?
No, I think it goes back beyond that.
I'd have to double check.
I don't have the numbers on it, but I think it goes back a long, long time.
It's antiquated, as you said.
It's antiquated, but even after hurricanes, when Puerto Rico got hit by a hurricane, they wouldn't even relieve the Jones Act in order for people to take goods to Puerto Rico for the relief effort there.
But it all comes back to The government is not smart, right?
The government does silly things.
It doesn't make sense to take thousands and thousands of trucks off the road when we already have a shortage of about 80,000 truck drivers in the United States.
It doesn't make sense to tell a ship that it has to bypass Hawaii Go to Los Angeles and then reload all those goods and take it back to Hawaii, which causes their prices to go up by 20%.
It doesn't make sense to tell a combat veteran that she can't drive the same truck she drove in Iraq, like I said, from Missouri into Illinois or Missouri into Ohio.
It just doesn't make sense.
But...
Let's look at it.
We've got a Secretary of Transportation right now who is more concerned with the equity of bridges than he is with making things work.
And, you know, as I like to say, do you know how you know when the Secretary of Transportation is bad?
You know who the Secretary of Transportation is.
Yeah, it's actually a great point.
That's a great point.
Americans should not know most of the figureheads of the administrative state.
I would say the same thing about the Federal Reserve too, but for that matter.
I don't disagree.
But for that matter, that's actually a pretty good point.
So you're making a pretty interesting point, right?
This idea of just the pandemic-driven supply chain weaknesses.
No, it actually wasn't driven.
It was just the pandemic exposed these pre-existing.
Generally, what I'm hearing are regulatory failures as well as antiquated laws that contribute to those regulatory failures combined with unions as an obstacle.
Is that about right?
Correct.
And so that's not specific to whichever other country.
I mean, that's true if something coming from the Philippines, from India, from China, from Japan, that's broadly true.
Absolutely.
And so to walk us through the, can you just walk me through the supply chain here, right?
What does that mean?
Is it leaves, it embarks from somewhere, it debarks in the United States.
There's a distribution chain within the United States as well.
Is it really that shipping, debarking?
How much of the chokehold is there versus at other steps in the cascade?
Well, there are a lot of areas where things can go wrong, right?
So let's take a computer keyboard, for example.
Computer keyboard made in southern China would then be put on a truck and taken to a warehouse and then either put onto a cargo container in Hong Kong or in Shanghai.
It would then be shipped via ship to the United States, come into the port of Long Beach or Los Angeles for the most part.
And there it would be unloaded and then taken to another warehouse where then another truck would come, pick it up, probably take it to yet another warehouse and then distribute it to, say, your Best Buy, your computer store, your Amazons, what have you.
So there are a number of things that go wrong there.
One is the shipping.
We've talked about that.
Two is the trucking.
But another area, and this is something- And what's the rate limiter there on the trucking side right now?
It's the number of truck drivers.
And is that more of a recent phenomenon than it was 20 years ago?
Or do you think that also has been lurking for a long time as a problem in this country?
It's been coming for a long time, but it's more critical now.
They have some new health standards for truck drivers that seem silly.
There's that law in California, the gig economy law, where they're making truck drivers be part of an organization as opposed to their own independent contractors, which is imposing a lot more paperwork on these guys, and they just don't want to do it.
But also, who wants to be a truck driver?
It's a hard job.
You're away from home all the time.
You're sitting all the time.
The health issues are not good because, again, driving across the country.
So folks, it's not a very entertaining industry to get into.
And then, like I said before, we make it hard for people to get into it because they can't start until they're 21. So you lose a whole generation of folks who maybe go into construction or become electricians because they can't drive a truck across state lines.
Or just sit in their parents' basement.
There's that as well.
There's that as well.
The other area that we had a lot of problems with during COVID, it's getting a little bit better now, was just finding the labor in the warehouses to move things from point A to point B. The Biden administration- And that's more of a last few years.
Yes, that's more of a last few years thing.
But given how much money that they paid people to stay at home, why would I want to go work in a hot warehouse?
I'll just stay at home and like you said, sit in the basement, watch TV or play video games.
How much, I guess if you were to think about breaking this down between...
The regulations, let's just say on debarking for ships or even the trucker shortage versus the incentives that we've created for people not to work that create this human capital shortage.
How would you attribute the problem?
I would say 90-10.
It's 90-10, the regulations and the infrastructure.
The 10% is, like you said, it's a recent phenomena.
It'll go away.
I mean, even with this last jobs report, you're seeing more and more people having to come back into the workforce.
Workforce participation ticked up, not because there are great jobs out there.
It's because people can't afford to pay their bills now.
Yeah, because the pandemic aid, et cetera, has run out.
Exactly.
And inflation, right?
If you look at the inflation rate right now, one thing that a lot of people don't talk about, inflation was at 6% in February.
But that was on top of almost 9% inflation the year before.
So we're talking 15%, 16% inflation compared to 2021. So when someone says, oh my gosh, inflation's down to 6%, it's like, no, it's not.
And that impacts the supply chain as well because that means it costs a lot more for those goods and services to get to the grocery store.
That's the thing I would say.
The cost being higher and the uncertainty of those dollar-denominated price increases at every step of the chain, that's actually another important factor as well.
So, I mean, one of the issues that I'm focused on, I've said, you know, you heard me say it before, is declaring independence from China.
Okay, so this is not going to be an easy pill to swallow.
There's a lot of...
I would say geopolitical long-run reasons why I think it's really important for us to make sure that we're not dependent on our chief military rival for our modern way of life.
The example I've often used is if that was a Russian spy balloon flying over the United States, we would have shot it down in an instant and ratcheted up sanctions.
But the reason we didn't do it for the Chinese spy balloon is that we know we have to dance around China very carefully because we are dependent on them.
For our modern way of life.
And that's a problem.
It's also intentional.
I mean, this is what China planned for in their best case scenario when Kissinger opened up relations between the US and China, when our economies opened up.
We thought we were using Capitalism as a vehicle to spread democracy and American values to places like China.
They actually, I think, knew what they were doing.
They turned that game upside down and said, you know what, we can play this game in reverse.
We'll use capitalism, their version of it at least, as a vehicle for advancing the Chinese geopolitical agenda, getting companies to do things that those companies otherwise wouldn't have done.
Were it not for a condition of gaining access to the Chinese market, Airbnb handing over the data of US users to the CCP as a condition for doing business there, getting companies to apply emissions caps in the US that China refuses to adopt, you know, for BlackRock, for example, that constrains American companies with one hand, lets Chinese companies like PetroChina roam free with the other.
And so anyway, I've talked about all of these forming the basis for why we actually have an opportunity when China's relatively vulnerable economically.
Xi Jinping isn't even in a as politically vulnerable position as he's ever going to be after holding on to that third term that he took over last October.
Now's our window of opportunity to say that we're going to declare independence from China.
We pull a little bit of the economic rug out from under them.
It'll involve some short-term pain for us, but it'll involve I think greater cost for them that we can use that as a catalyst to get the CCP to reform.
That's, broadly speaking, one of the core aspects of my foreign policy agenda and foreign policy priorities vis-a-vis China is to, in some ways, defeat them economically so that we don't have to militarily later.
There's a lot to peel back from there.
A lot in your area of expertise, too, about what the costs of this are going to be because I don't want to paint too rosy of a picture.
It's not going to be easy to do that.
But first of all, if you think about the irony, We're the ones that made China rich so that they can now compete with us militarily.
Of course.
They couldn't have done that in the early 70s.
They just couldn't have.
And then if you look back at the Clinton era where they gave the missile, the satellite technology to the Chinese as well, there were a lot of mistakes that we made.
And if you want to be positive, we made them with the best of intentions.
But let's not argue that point right now.
Decoupling from China is going to be challenging, but one of the things I've been preaching recently is repatriating the supply chain.
And if you look, it's actually Vivek starting to happen.
Production of groundbreaking of U.S. plants, of manufacturing facilities in the United States was up 120% in 2022 compared to 2021. Say that again.
What was up 120%?
People are starting to build factories in the U.S. Factories in the U.S., yeah.
Factory construction in the US. Yes.
The other thing that we're seeing is a lot of American companies are – they're stopping the reliance on China and looking more into the USMCA region, specifically Mexico.
But here's the interesting part.
The Chinese aren't stupid.
The Chinese have invested over $3 billion building plants in Mexico over the last two years.
So, they want to participate in our diversification.
And think about that.
So, one, it gets them around any sanctions to China.
Mm-hmm.
And then it gets them around any sort of COVID lockdown if they were to start to go back to COVID lockdowns.
And it shortens the supply chain.
So they can actually make a very good claim saying, hey, we're here, we're closer, we're investing, whatever.
What I foresee happening, though, is more and more American companies building plants in America.
Look what Elon Musk is doing.
I mean, he's building gigafactories in Texas.
We're seeing more and more investments in places like Arizona where Virgin Galactic is going to build rockets.
I think that's happening.
It's going to take time.
It takes a long time to build a plant and get it up and running and then to decouple from your current supply chain.
But I think it's going to continue.
And here's the other part, though.
It's not necessarily going to be as painful as a lot of people think.
When you look at the total cost...
Of not only the cost of the good, but the cost of getting it from point A to point B. And the cost of getting it then into the consumer's hands.
We might be able to at least maintain costs or even reduce costs.
The other thing though is that if it's available, you can sell it.
If it's not on the shelf, it goes unsold.
So I actually have a lot of hope for the future of what's going to happen.
The one thing that's...
You can always say is you can never bet against the ingenuity of Americans when it comes to trying to do well in business.
They'll find a way to make it happen.
We'll find a way to make it happen.
Yes, we will.
Yeah.
I think that has been true for most of our history.
I think it can be true again.
I think we've lost this sense of self-confidence, lost that spirit that you just described, that you cut us loose.
There's nothing we're not going to achieve.
I think that that's part of what makes us American.
I think temporarily we've lost a bit of that national spirit, but I'm with you.
I think we can absolutely get that back.
But let's just go into this.
Let's understand the best arguments.
I'm with you that I think that this needn't be as hard as we make it out to be for decoupling first supply chains and then more broadly from China.
But let's go into a little bit more detail there.
How would you see that process actually playing out?
Double click a little bit.
Let's get into the meat of what that decoupling for American businesses looks like.
First and foremost, I think we're going to have to provide incentives for companies to invest in America again.
And if you look at President Biden's budget, he's spending a whole bunch of money on agencies as opposed to maybe giving tax credits to business to invest in America.
So let me just ask you about that.
I mean, because I think that there's two potential goals here.
One is more modest than the other.
The first is just decoupling from China.
But there is this whole rest of the world outside of China that we could also – Mexico among it, among the rest of the world.
Japan, India, Australia, Southeast Asia, Western Europe, Brazil – How much of the slack do we pick up from China from the rest of the world versus having to repatriate that to this?
There may be a lot of reasons why it's desirable to do that in the US as a matter of so-called industrial policy or otherwise, but put that to one side.
If we're just talking about the goal first of for geopolitical reasons, decoupling from China.
How much of that slack can be picked up by other international supply chains as well, diversified across a broader base of countries?
It's there.
Yeah.
It's there.
And that's a great point.
Just because we decouple from China doesn't mean that we have to become isolationist and try to make everything in the United States.
Right.
That's kind of where I'm at on this.
That's impossible, right?
There's no way that we can make everything that we need in order to function as a society.
So what are the things that we want to import from other non-Chinese countries?
What can be done in Mexico?
Anything can be done anywhere.
If you look at when NAFTA first came out, the rise of automotive manufacturing in Mexico was huge.
But the incentives were there.
And if we have those incentives in place, then we can do it.
There is a huge textile industry in Vietnam.
We don't have to buy clothes from China.
Same as Cambodia as well.
So they exist.
We just need to make a decision as a nation.
You know what?
I'm tired of giving money to my enemy.
It's just like in business.
I'm tired of giving money to people that hate my values.
I'm tired of giving money to my enemy.
I mean, I think that this is related to some one of the things I was talking about where I just think that we have an opportunity to revive conviction in what is right.
We know that we're gonna have to do this with respect to China.
I talked about this examples with COVID school closures.
I talked about it with respect to resisting the siren song of the bank run when it comes to the Silicon Valley bailout just in recent weeks.
And yet, you hear the same thing with respect to decoupling from China.
It will be a disaster.
There's an economic calamity awaiting in America, even though we know that's the right thing to do.
Talk to the American people right now.
Why should we not be afraid, even if we know in our hearts that's the right thing we have to do to protect America over the long run vis-a-vis communist China, but to the people who will say, yeah, but that's going to make my life too difficult for that to be worth it.
Maybe my grandkids can deal with it, but not me.
Talk to them and make the most persuasive case you can that between the rest of the world, redundancies we have in other countries, and the trends we're seeing here in the United States, you know, factory construction, etc., up 120%, as you said, you know, even over relative years, even over year-on-year growth.
Why we shouldn't be As afraid as we are of pulling that rug out.
Well, first, you have to listen to who's telling you it's going to be painful.
Who benefits from telling you that it's going to be painful?
Who benefits from staying in China?
It's politicians and it's companies that want cheap labor.
Full stop.
So to the American people, it's...
Listen, would we have...
Were we buying Mercedes Benzes during World War II from Nazi Germany?
No.
We said we're not buying those cars.
We decided to take a step back from, again, our enemies.
And if we're going to determine that...
China is our enemy right now, so we need to back away.
It's not going to be as painful as you think it is.
The world will fill the void.
It always does.
And so what the American people need to do is get that spirit back, like you said, that we can do it.
We're going to go through it.
We're going to make it happen.
And to the point that you made earlier in the discussion, you may not have to pull all the way away because once you start doing it, they're going to collapse.
Here's the interesting thing about China.
And first of all, any American who tells you that he or she understands China is lying, right?
We can only understand part of China.
It's a very, very complex society.
But Right now, they're not growing.
And that's bad for President Xi.
What's their GDP growth now?
I think it's like 3 points.
Peeking out at 8%, you know, a few years ago, 7, 8%.
It's down under 4 now.
It's in a 3 handle on it, I think.
Yeah, I believe it's 3.6%, but I don't want to be quoted on 3.6.
But they need to grow at about 8% to keep the economy going, to just employ all the people that become of working age.
And if you also look at their country, China should be about six different countries, not one country.
So it only takes a little bit of unrest for them to have a lot of fear.
And that's what we saw with the COVID riots at the end of 2022.
People had had enough, basically.
And President Xi had one of two choices.
I can either clamp down really, really hard, or I can relax the COVID restrictions.
And he made the political calculation to relax the COVID restrictions.
They're not as strong economically as people get them credit for.
We are a much stronger economy than China is.
It's not even close.
And that's the thing.
I mean, that comes back to this theme of if we're willing to make that sacrifice, we probably won't have to make it at all.
Right.
What is it about the American psychology right now that stops us from being able to just man up and do what we know we're supposed to do, to put it bluntly?
Where is the speech that says, here's what I want to do for the economy?
I want American dollars to be spent in America.
I don't want to continue to make my enemy rich.
Where is that Ronald Reagan-esque speech talking about that?
I think the second part is even just the most obvious.
I don't want my dollars to be spent on subsidizing my enemy.
Exactly.
Even if that means the rest of the world that are allies, most of which are allies, it's not just in America as a protectionist policy.
Just don't use it to prop up our enemies so that they can strengthen themselves economically so as to be able to fight us militarily.
That's exactly what we're doing today.
I'm happy to buy stuff from Honduras, right?
Yeah, exactly.
Exactly.
It's fine.
Or in the United States, there's some combination of Honduras, Mexico, West Africa, India, Japan, Western Europe, the Philippines, and Brazil.
Great.
I mean, it's interesting you brought up Africa, right?
One of the most underdeveloped Continents in the world.
Tons of opportunity there.
They have more than just rare earth minerals.
That would be a wonderful place.
I think so too.
I think Africa is underexploited.
The funny thing about Africa is, you know, with the rare earth mineral discussion is, I think a lot of those African nations, including West African nations, they like dealing with the US better than they do with China.
But right now, if they're given opportunities to have development deals with both, they'll take both.
And yet we in the United States could be, this is another point of, you know, pulling the rug out from under China a little bit, playing a little bit harder ball, is to tell those African nations that, hey, we're here for you.
But you got to drop the other guy.
Exactly.
And the arguments some of the African nations provide, I mean, you know, look, I don't blame them.
Every nation should look after its own self-interest first, but they'll make these arguments back to the U.S. that say, have you heard this expression?
They'll say, when two elephants fight, it is the grass that dies.
So the U.S. then says, oh, okay, okay, all right, we understand and, you know, we'll tell China to be a little bit more of a team player, but At the end of the day, these African nations, they had to choose.
You know, China offers these raw deals.
They're dishonest in their dealings.
They encumber these countries with debt they can't get out of.
And they – you're talking about racism?
China has deeply racist attitudes towards black people.
More so, including African black people, more so than anything we've ever seen in the United States.
And certainly more than exists in the United States today.
So those African nations, they don't want – if they had to choose, it's definitely America over China.
Yet we're allowing them – And them being China, the courtesy of being allowed into a picture that we could just disintermediate and cut them out of.
Well, China's been brilliant and we've been lazy, is the way I put it, right?
So they give these loans that the country can't pay back.
And so they say, okay, we'll take your port.
And then we'll take the airport.
And then they have the infrastructure there.
And we've done nothing.
You know, where is the State Department with stuff like this?
Why are we not having meetings with these African nations saying, do you understand what's happening?
And we're, like you said, we're here for you.
Think of all the money we've given to Ukraine that maybe we could have used in Africa to help develop some of those countries and have better trading partners.
To actually invest.
You know, I mean, the way that China is now, they use debt deals.
To encumber these countries with a level of debt, they're asset underwritten debt deals.
And so what do they do?
They seize ownership of the ports, the airports, etc., the infrastructure that then allows them to exert leverage that they otherwise wouldn't have had when the United States was just providing that same money in the form of aid.
And investment that didn't have the same kinds of strings attached while allowing them to actually sell their security interests, like as in debt security interests, to China.
So, you know, I just think it's a matter of mustering the fortitude and self-confidence to actually – Just say no to China.
I agree.
Just say no.
And maybe instead of giving speeches about how evil Republicans are, we should be talking about how our vision for the future, what that needs to look like.
I would love a speech that talks like that.
The way you talk, for example.
Thank you.
I'll give you credit where credit is due.
You do have that Reagan-esque way of talking about what's possible.
The art of the possible is something that the Americans have always had.
We need to regain our swagger back a little bit when it comes to the Yeah, we forget it from time to time.
I mean, we went through this identity crisis in the late 70s.
We lost our sense of self-confidence or lost our sense of self-assuredness.
We were lost as to who we are as a people.
But you're right.
Reagan rediscovered that.
And I think that – Economics and psychology, they're not independent.
They're actually deeply interwoven.
Once we gain that sense of self-confidence of what is possible, our conviction in what is right, then we set the milestone marker and we go achieve it.
It's like one of my experiences in building businesses, successful businesses, is that there's two ways of thinking about You know, building a startup business.
Okay, one is you start from where you are and you look at what your resources are and say, what could I reasonably achieve as a goal over the next three-month period or six-month period or 12-month period or whatever, and then you sort of move from the present forward.
You don't really achieve liftoff that way.
Okay, that's...
That's how you build a classical what they call small business.
By the way, these Silicon Valley tech startups that show up with trillion-dollar business plans have now re-characterized themselves as small businesses to get a bailout.
But that's that small business thinking.
If you really want to create a startup with uncapped potential, the way you do it is the other way.
You plant a flag.
And say that is what we need to achieve to change the world in whatever way we want to change the world and create seismic amounts of value in the process.
We lay that flag down.
And then you work backwards and say, all right, how do we make that possible?
What is it between now and then that makes that possible?
Now, there's a risk to that.
The risk to that is that you fail, of course, that you plant the flag and despite all of the best intentioned, you know, hubris, good kind of hubris, you still fall short that happens.
It's happened to me.
And that's just the nature of setting ambitious targets and falling short.
But I feel like that's what we used to do in this country at a national level too.
When we did it more as individuals, our nation is comprised of individuals who think this way.
Now we think in a different way where how do we play defense?
And sometimes the best defense is offense.
Is offense.
And we've lost that spirit.
Look at Kennedy when he said we're going to go to the moon.
Yep.
He does say we're going to try to go to the moon.
No, we're going.
We're going to the moon.
We'll figure it out, right?
Or when I work with my clients and they're trying to improve their EBITDA and we have to take out a certain amount of money in order to make them more profitable.
I set a huge stretch target.
We're going to go for $50 million.
And I'd rather set a goal of 50 million and achieve 35 than set a goal of 10 and achieve 11. That's right.
And you have no chance of achieving 10 out of 10 goals unless you actually set the goal of actually doing it, right?
- And this comes back to the point I keep bringing up and what I would love for you to continue to do is set that future, that vision. - Yeah. - It's not complaining about previous administrations.
It's not complaining about the malaise of the American people.
It is, this is where I wanna take the country.
And Americans, I mean, they'll do almost anything if they see that vision and they believe in that vision.
We can achieve anything.
I believe that deep in my bones.
And I think when it comes to the subject that you and I are talking about, I mean, there's two ways in which I'd like to do it.
One is to say that I believe that we as a nation can stand on our own two feet with our allies by trading with people who actually believe in the same values that we do without having to rely on people who believe in decimating, annihilating the existence of our country and those values over the long run.
Okay?
We don't require dealing with our enemies in order to thrive here at home.
And you know what?
We're going to live in a world.
I can tell you how we're going to get from here to there.
Okay, it might be difficult, but let's plant the flag and say we're declaring independence from China.
China believes in its It's exercising power over the United States.
It believes in superseding the United States on the global stage.
Why on earth are we going to help them do that?
Why are we funding that, right?
Why are we funding that?
We're not.
We're declaring independence.
And then we work backwards and see how we make that happen.
And then as it relates to how we unleash our economy at home… We've fallen, both parties have, we've fallen into this trap of small ball where one camp wants to raise taxes, one camp wants to talk about, you know, entitlement cuts as a way of managing our deficit because after all, China is the second largest provider of that debt after Japan.
My view is we grew at over 4% GDP growth annualized for our entire nation's history and I think the rise of the new climate cult is another such factor, or shackles the United States while leaving other parts of the world untouched.
I think the rise of affirmative action and anti-meritocratic policies in the American economy created a culture that was fundamentally hostile.
It's a victim culture.
It's a victim culture and victimhood culture is not good for the economy.
So there's a lot of reasons why we've flattened out GDP growth.
But the other area where I just think we can achieve it is say, we're going to unleash the American economy and actually forget about playing small ball debating tax increases versus spending cuts.
We will grow our way out of the problems.
Let's restore 5 plus percent GDP growth.
You know, I think we're working on the exact numbers here.
I think that is achievable.
But like Kennedy going to the moon, if we can go to the moon, we certainly can get back to a place of 5 plus or if not 5 plus, 4 plus percent annualized GDP growth.
And if we did that, the rest of our problems become easy by comparison.
I think that's just the big ball, the way we got to be thinking.
But no one thinks that way anymore.
We're going to change that.
No one thinks that way.
Well, you need a young guy who wants to run for president who's got the vision and the ability to communicate that.
But You know, I believe the American people still want to play big ball.
I think so, too.
I think that we've just been taught recently by failed administrations that small ball is okay.
And we've taught to be afraid.
Think about COVID. They taught us to be afraid during COVID. It was the flu.
And I know people died, and I'm sorry people die, but people die of the flu every year as well.
People die of pneumonia every year as well.
It was the flu, and we hid in our homes, we ordered groceries delivered, we left them outside, then we sprayed sanitizer on them, and then maybe we ate them, right?
I mean, think how quickly the American people gave up their civil rights during COVID. For fear.
We need to change that.
You talk about fear a lot.
We can't be afraid.
We have to think big.
We have to think boldly.
And there's nothing that we cannot achieve.
I look at my children.
My son's graduated from college this year and he's got his first job.
Thank you.
Yeah.
I'm going to be in there every Saturday because I know the people that I work with don't go in on Saturdays, but the boss is always going to see me in there on a Saturday.
So people still have that mentality.
They want to succeed.
He's trying to start his own businesses.
He was actually so ingenious.
He went to school in Michigan.
He got every one of his fraternity brothers to change their registration to Michigan so they could vote in local elections and vote the right way.
Right?
So, I mean, there's still that in this country.
There's still – I look at my daughter and how she wants to change the world.
She wants to become a lawyer and she wants to do really aggressive law for people that she feels are victimized.
Not people who are victims, but victimized.
And maybe who refuse to be victims.
Yes.
As long as people want to stand up for them too.
That's what she wants to do.
I mean, she would love to go do some of the Jan 6 people that have been left in a jail cell for two years now.
Good for her.
You know, it's interesting.
And that's 19 years old.
She's 19. It's there.
She's 19. Yes.
That is so brave.
I mean, I think it reminds me of, you know, back when I was maybe, yeah, it was about maybe that age, actually, when there was these cases of the people post 9-11 that were, you know, locked up in Guantanamo, likely terrorists.
We needed to go through the process of convicting them.
And I was one of those weird people at that time who said that Yes, but we need to still respect due process so that we know with conviction who really was guilty and who was not.
And, you know, back then, I wouldn't call myself – I mean, I'd like to think I was brave, but the reality is the people who took that position were celebrated in some ways by principled people on the left, actually, in this country that stood up to the, you know, the authoritarian ways of the Bush-Cheney administration.
That's suspended due process and whatnot.
And yet the thing that's disappointing for me is those people are silent, pin drop silent when it comes to the January 6 defendants who we now know were denied access to potentially exculpatory video evidence.
That is a, you know, hands down Brady violation.
It's a constitutional rule that says that basically, if you're being going to be criminally charged, you have to have- Exculptory evidence presented to you.
Yeah, exactly.
And so that's something that's had me down a little bit, just the fact that the very people who would stand up for Guantanamo Bay likely alleged terrorists- Won't stand up for American citizens.
Won't stand up for American citizens who are actually more actively being denied those same constitutional rights.
But then it makes me feel- Makes me feel good when you hear a 19-year-old girl in this country, who's, I guess she would be Gen Z, I suppose, still, right?
I have no idea where they are now.
I think it's still Gen Z, who says she wants to go defend...
Forget even the individuals, the constitutional rights.
The Constitution.
Right?
The Constitution presents itself in human stories, but it's still the Constitution that we're defending.
That inspires me.
Actually, that gets me going.
You made my day hearing that.
I can see your body language changing.
But here's the thing, and this is something I actually – I'll give credit where credit is due.
I read Dave Rubin's book, Don't Burn This Book.
Okay.
And in the first chapter, he talked about it's time to stop being afraid to speak your mind.
And that's when I started writing.
That's when I started doing podcasts, TV, and radio, and I started speaking my mind.
And I think we need more and more people to not be afraid to do that.
And right now, people are terrified to speak their minds if you are on the right side of the spectrum.
Because you're going to be labeled an isms and isms and racist and whatever and misogynist and it doesn't matter.
We need to change that.
We need people to have debates.
I remember my freshman year in college, my freshman year roommate, he was to the left.
Okay.
I was to the right of Ronald Reagan.
Okay.
And we would stay up till three o'clock in the morning with just these wonderful debates about our views on life and our views on politics and our views on the economy.
And it made us better friends, but we weren't afraid to have the conversation.
You can't have those conversations today.
And that's why I'm so proud of my son and my daughter because they're not afraid to have those conversations.
That's also what gives me hope because they're not that unique.
Every parent thinks their child is unique.
They're not that unique.
They have friends who do the same thing.
We need the leadership that's going to encourage that type of behavior.
One of the things that I've long said in the last couple of years is that you want a good litmus test for how well we're doing as a country, the civic health of our country.
Take the gap between what people are willing to say in private and what people are willing to say in public.
When that gap is narrow, we're doing great as a country.
When that gap is wide, we're not doing well.
No doubt, today we're in a moment where there's a big gap between what people are willing to say in private and what people are willing to say in public.
And that's because fear...
Is infectious.
I mean, there's just an inherent property of fear.
You're talking about COVID. They call the R-squared rate, the transmission rate.
The transmission rate of fear in a culture is just naturally very high.
Well, they say courage is contagious.
So is fear.
Fear is infectious.
I say courage is contagious.
Actually, that's one of our slogans is… It takes more people to be contagious before that's true, right?
So it's not like courage doesn't spread automatically.
But if you have enough people, people like your son, your daughter, who for their generation amongst their classmates are willing to demonstrate that, Then courage actually is ready to spread too, but it takes a few people to start it.
Fear starts automatically.
Courage can be contagious too, but it takes a few people at least willing to demonstrate it first before it actually starts spreading.
Very good point.
You know, I think we're at that moment where people are quietly hungry for it.
And, you know, whether it's decoupling from China, whether it's actually taking the right course of action in Russia vis-a-vis Ukraine, whether what we've learned about what those school closure policies did for us in the COVID era, Silicon Valley Bank and its depositors this weekend.
When you submit to fear, you actually make – you actually take a greater risk without knowing it even though temporarily you feel like you did the safe thing.
But we're starting to see pockets of resistance if you will.
But we're seeing that.
Yeah.
I think we're at the cusp where hairs trigger away from actually a domino effect.
The mama bearers at the school board meetings.
Right?
People starting to recall some of these George Soros district attorneys that he's put in place.
Sure.
And say, you know what?
We want district attorneys who are going to enforce the law.
So I really think you're starting to see that.
I think you're going to see a big backlash over what happened with Silicon Valley Bank.
I think so too.
I think people are really angry about it because it's like, why do they have different rules than everyone else?
They shouldn't, but they do.
That was the point that you made on the podcast the other day was, why do they get different rules?
And it is that moral hazard that we're creating now because basically, if I'm running a bank, I don't have to worry about insuring my folks.
I can play with the money any way I want to because the government's going to come in and fix it.
And I think that the way we get there is to start talking openly again.
I think we're about to do that.
And it's a big part of what not only this campaign, but conversations like this are all about.
Thanks a lot for coming, Jim.
I really took a lot away from this.
And, you know, I think the supply chain people utter the words, but I think you understand it more deeply in a way that, you know, there's something about overcoming fear too, where part of the root of fear is the failure to understand I'm
Vivek Ramaswamy, candidate for president, and I approve this message.
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