Tim Miller, Charlie Savage & Justin Wolfers

The Bulwark's Tim Miller explains a unique route that could lead to Trump's demise. UofM Economics Professor Justin Wolfers gleefully explains federal rate hikes and bank runs to us. Plus, The New York Times Washington correspondent Charlie Savage details Trump's latest legal trouble and the media manipulation he created around it.

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Episode Transcript

Speaker 1 (00:00):
Hi, I'm Molly John Fast and this is Fast Politics,
where we discussed the top political headlines with some of
today's best minds, and Alvin Bragg told Jim Jordan to
respect states rights and not interfere with his case against Trump.
We have the show of shows today. University of Michigan
economics professor Justin Wolford stops by to talk fed rate

(00:23):
hikes and bank runs. But don't worry, we make it fun.
Then we'll talk to the New York Times Charlie Savage
about Trump's latest legal troubles and the media manipulation he
created or added. But first we have the host of
the next level, The Bullworks, Tim Miller. Welcome back, Too
Fast Politics, Tim Miller. By second appearance, I'm going for

(00:48):
that green jacket. How many appearances do I need to
get jacket? After forty five appearances, we buy you a
green jacket. Okay, great, I'll hold you to that. Forty
three more to go. So Trump has neither been arrested
nor indicted. I have purple blue balls like I've been

(01:10):
waiting for it all week. I've just been waiting for
this to pop the champagne, and it sucks. It is
it's been disappointing. Definitely, folks got played by Trump. There
were a lot of whispers out there that he was
going to get indicted. I don't think I would have,
you know, bought into this Tuesday arrest that he put
on his pretend Twitter that he has if it wasn't

(01:30):
for the fact that, like on Friday, Saturday, Sunday, Monday,
your little TV producers were texting me. There were whispers,
you know, things were happening. Trump's Kid's going to happen.
And so then when Trump sent out the fake the bleat,
you know, it felt real. But alas it hasn't been,
though hopefully it's imminent there. We had a great bullwork
article this week. Do you know there's probably there are
six different investigations active into him right now. Six it's

(01:53):
just one of six. Well, there's Georgia, there's New York,
there's Jack Smiths Action one, there's one into truth Social
and there's the classified docs. Right But I want to
like real talk with you for a second. Even if
we see something from these six, I don't think it
hurts him. This has been the conventional wisdom out there,

(02:16):
and I don't I don't necessarily disagree with you, but
I do want to offer a potentially more hopeful take,
a more bright eye take, which is that the weight
of all of this overtime compounds. Right like, Trump was
at his weakest a few months ago because the news
environment around him was so awful. As the election had

(02:39):
gone bad, Trump had endorsed these terrible candidates. There was
the January sixth committee that was going on all of
these investigations, and that's when in some of these poles
run de Sanctis was beating him, right, and some of
these had the headpoles at that time, right right, And
that was a real thing that there are Republican voters
that still like Trump that are susceptible to you know,

(03:01):
a series of bad news environments that make them feel
like he can't win. Right. If they feel like he
can't win, they won't go with them. And so, you know,
I think that right now, in the short term, sure,
it's been a little booie. People want to stand by
their man, They want to come to his defense, you know,
but over time, if this one drops and then another
one drops, and then another one drops, which is what
I expect to happen, then I think the weight of

(03:23):
all of that, and the fact that like this guy's
got like four different arraignments coming up in a nine
week period. It might make you know, have not his
core MAGA folks, right, Not the core magas they're never
going to go, but this this wishy washy group, but
the key group in the Republican primary, which is people
that we like Trump but we're not sure are we
ready to go on the ride a third time? Or

(03:44):
do we just want to give him a gold watch
and put them on Mountain Rushmore and say, you know,
we're ready to move on? Right? Like that person. You know,
I think right now it's helping Trump with that person,
but I think over time it could go the other way.
Let's talk about this because we had Sarah Longwell on
this podcast and the Best and I'm a big fan
of hers, and she talks to a lot of people,

(04:05):
but she and she talks to a lot of people.
She talks to more people than any of us, right,
because she is doing these focus groups. She said that,
you know, she really feels like Jasantis is less dangerous
than Trump. I disagreed with her pretty strongly on that.
What is your take on that? Like in this imaginary

(04:27):
world where one of them is the president. Yeah, yeah,
I'd be interested to hear your disagreement. I would side
with Sarah. And the simple answer is this Trump has
now been through this one time. He's been in there
four years. He tried the oh, I'm going to have
some adults around, the John Kelly's and the and the Maddises,
and as as gross as all those people were in
how complicit they were, at some level, it was a

(04:50):
bumper around him, right, Like his craziest ideas didn't go through,
you know those Gary Cohn was like not was literally
not putting things on his desk and like pocket vetelling
things that government should work, by the way, but whatever, okay,
this next time around. The types of people that around
him right now are absolute lunatics. It's the dregs of
the dregs. And I think he would feel so embolded

(05:11):
to do whatever he wants. I think that he goes
a little kind of a scared little mouse that first year,
and he didn't think he was gonna win. He couldn't
believe he's gonna win, So he did plenty of damaging
ship and it was plenty horrible. But I just think
a second Trump term is like literally an extinction level
event potentially for the democracy. I don't want to like
scare people, but that's where I'm It's like a move
to Mexico City, cut level events, and like the Scantis

(05:34):
is bad and I and we could go through all
the things I don't like about what the Santis is
doing in Florida, but I do think he would bring
the adults in and you know, they might be more
effective at at enacting some of these policies that that
progressives don't like that I don't like in certain cases.
But I just think that like the worst case scenario
is just literally catastrophic, the end of American upper Trump

(05:56):
and for de Santis, it's like this is bad, right, right, rights.
My question for you, I actually think that Trump is
a sort of known quantity and desands is really really
hyper focused and very effective, and in my mind, these
two things make him and he's also and again you know,

(06:20):
I have many LGBTQ people in my life, present company included,
you included, but he has really made this the target
for him in a way we have never seen. I
mean in my lifetime, I have never seen or at
least in the last twenty years. I've never seen someone
really hone in to a group of people who where

(06:40):
everything is settled law, same sex marriage is fucking codified,
and the man is just going after gay people in
a way that I don't think in my head I
could have even imagined. Yeah, very few people have been
as vocally upset about the don't Say Gay bill in
particular in Florida as I was. I wrote about it

(07:00):
and you will have a child, Yeah, I have a child,
and that's why I wrote about her. Very early on.
I was like, this is crazy, This is insane, this
idea that a kindergarten her. You know that my child
couldn't come home and do a homework assignment. You know
about a family tree that some karen in Florida, you know,
could sue the school over that. That's literally the rule.
The fact that teachers couldn't talk to my kid about

(07:21):
her own family. Yeah, that is outrageous. What he's been doing, obviously,
talking to transfolks in drag is also outrageous. As the
head to head with Trump comparison thing, another thing that
you've had with the santass I just wanted to pop
this bubble a little bit about his effectiveness. He's been
pretty effective. But a lot of these bills are unconstitutional.
You know, our mutual friend Roddie Kaplan is working on
the Don't Say Gay Bill and pushing that out. She's
the best. The Woodstop Woke Act has already been overturned. Right,

(07:45):
A lot of this stuff is just nakedly unconstitutional, and
so I actually don't know that he's quite He's a
little bit more deft about it and puts a shinier
coat of paint on it than Trump does. Right, but
still it's still unconstitutional, and still we've had courts, you know.
Hold that. I think that there are specific areas, and
the LGBT area maybe prime among them, where De Santis

(08:07):
would likely be, you know, more effective and more narrowly focused,
you know, on on getting legislation that I don't like.
Past again, I would strongly support Joe Biden overrun to Santis.
I don't think it's even a close call head to
head against Trump, where it's like, Okay, we can fight
this piece of legislation, right, we can fight what he
wants to do in schools which run to Santa's versus,

(08:30):
like this dude might literally take us out of NATO
and end the you know, Western World alliance and threaten
the very fabric of our democracy. Like that's just how
I how I assess that. But um, you know, no,
it's not good either way. I wish that. I wish
the other option on the other side was Chris Sanuno
or somebody that you know, we could charitably agree and
disagree on various That's not the case. And both of

(08:51):
them are very bad. I just assess Donald Trump to
be end times level. So they're set. It's quite interesting
to me. I have to say that snow he had
an opportunity to differentiate himself and he and he didn't. Yeah,
you know, he went right along with Trump. I dislike
Chris Christie a lot. Yeah, you're not alone. Yeah, we

(09:16):
have a we have a actually a party every year.
It's a secret location because unfortunately, people would be storming
the gates to get in. It's just such a popular
ticket to Chris Christie hate party. But you know, he
at least would be able to go toe to toe
with Trump, right, and all these other guys are just
such politicians. And the problem is he just has all
this baggage now from everything from Bridge Gates. Just is

(09:36):
never Trump stuff. I just don't think the MAGA voters
are going to listen to him. But that snow New
is a nice guy, and I disagree with him on
certain things, agree with him on others. He would certainly
be much preferable in the other two that it's just
like this guy isn't gonna be able to go toe
to toe on the stage. It's just not where the
party is, right, Like, the party wants MAGA, and they're
trying to decide do we want the OG MEGA, who's

(09:59):
who might not be electable anymore and we're a little
nervous about, you know, all of his baggage, or do
we want a MEGA that is pretty close to the
OG but you know we might be able to convince
ourselves as more electable. That like, that is basically what's
happening in the Republican primary. And I think anyone that
doesn't fit in that MEGA world doesn't really have a chance. Yeah,

(10:19):
it's amazing, Right, we are in a situation here where
like if a Republican had been brave, there would be
an alternative. Well, I go back to the second impeachment.
Had ten more Republicans voted to convict him, we'd be
done with him. This is the thing that drives me
the most crazy right now, Molly, is all these guys

(10:39):
who you know, just want to be rid of Trump
and who are like slowly pushing the scantist you at
the chip Roys of the world, and you know people
in the Senate who are out there talking about how
you know, I just, John Thune, I just trust that
the voters won't do this again. Why are you trusting them?
Why didn't we just do your job, John Thune. Had
seventeen Republicans voted to convict him, he would would have

(11:00):
been he would have been borrowed from running, and all
of this would be moot, and we could have it
out on stage between the Santis and Haley and Pompeo,
and you know, all those guys can right and you
could have a real primary. Yeah, they were cowards. They
failed again for the one hundred millionth time since twenty
fifteen to do their job, and so now they're getting

(11:21):
stuck with them again. And so there's a little bit,
you know, if the stakes were so high, there'd be
a little bit of schadenfreud there. It's like it's like,
all right, John Thune, you're getting back in, you know,
with you're getting in back in the muttering with the
pig again. Good luck, enjoy it. But but unfortunately the
stakes are too high for me to kind of fully
fully appreciate the schadenfreud of that. Yeah, no, me too,

(11:43):
And I think I would like to keep our Democrats
say there's a world in which like there's some Republican
who stands up to him, But I guess not because
that's not where the base is and the numbers aren't there. Yeah,
I mean, sure, stand up. Yeah, I think that they're
going to be some to push back on him, but
are they going to do it? Well? Right, I got
PTSD this week. I don't know about you. When robah

(12:03):
Santis went to Peers and and was like, well, you know,
I mean donalds was, I don't know a whole lot
about this world of paying off porn stars. And I
would have been a little tougher than him on Fauci.
And you know, these kind of limp attacks on you
know that are like not really attacks, Like you know,

(12:23):
Donald's like ripping his face off. You're a groomer, you
might be gay, you're a whole ball, right, Donald, And
he's like, well, I'm not so sure. He's doing the
normal politician stuff. And I was like, we I we
did this already in twenty sixteen. I was like, I
lived through this. You know, everyone did this. Scott Walker
tried this, Jeb tried this, Marco trying to Ted Cruz. Right,

(12:44):
it's like, this strategy doesn't work. You know where Trump
goes alpha predator and you you know, kind of do
a light jab back at him, right, and they're they're
living We're just living through this all again. Pompeo, Hailey
deciantists are all making the same mistakes that we're made
in twenty sixteen. Like the only path to beating him
is to either go is to either go through him

(13:06):
or tomorrow complete yeah, completely an alternative vision and hope
he self destructs. I don't think that that would work.
That's second path don't work, but it might it could,
we don't know, like a year from now. But the
person who does that is Lisz Chainy. She's there, she
did it right well, I mean but she's these megafolks
aren't going to vote from it, liszt change. I mean,
she's primary so yeah, so that and that's like going

(13:26):
around and like by supporting Democrats. But I mean, like, hypothetically,
I think you can get in and say, look, I
think Donald Trump's kind of pathetic, and I'm just gonna
focus on here's all the things that I do. I
don't know that that. I don't know that that would work,
but but at least then you know you're offering something
to people, right, which is like here, I'm maga two,
I'm mega like you. I don't think that that what
he's gonna do is work. It's kind of sad how

(13:47):
he's lashing out and I'm just gonna focus on this
other stuff and I'm gonna ignore him. Now, maybe that
wouldn't work. Maybe you have to just punch his face out,
and that's I'm surely your old friend Rick Wilson would say.
But either of those are at least viable options. Getting
in and like, you know, doing this like pillow fight
with him while he's like gnawing that you're a jugular
is not like that doesn't work right, right, And yet

(14:10):
they're all doing it again. It is interesting. The thing
with the Santis that I never understand is like, if
you could have Trump, why would you have the guy
who's like lesser Trump. I think the hope is again
when you think about the Median Republican voter, right, like
the so there's some people, you know, let's take out
the people who are like Liz Cheney curious and take
out the people who are storming the capital for Trump, right, like,

(14:33):
but they're all those folks out. What percentage of voters
are those that we're talking about. You've got maybe ten
percent at best, probably a little less than that that
are never, you know, that are totally off the train
of Trump. Then you've got probably twenty five percent that
are Trump always, Trump forever, right, And and we can
all we could quibble. It might be fifteen on one side,

(14:54):
twenty thirty on the other. Right, but let's just let's
just say the big middle sixty percent fifty percent of
the party is people that like Trump but having one
hundred percent the side of their Trump forever, okay, And
like that is the center of the party right now.
They might just decide I like Trump, I thought it
was good, but man, I don't know, I'm really sick
of losing to Democrats, and you know, he's got all

(15:14):
this other, all this other stuff happening that I'm not
so sure about in the tweets, and it was fun
for a little while, but I might be already changed
the channel, right like, but again, I really do like him,
and I don't like it when the Libs are mean
to him, right Like, that person is the key person
in determining who's going to be the Republican nominee. And
so the hope was that DeSantis could win that person
over by being Trump like. But like, in practice you

(15:36):
can see why that doesn't work because Trump goes straight
for your head. Like Trump's gonna push him down to
the ten. He's like, oh, you want to try to
win these people who like me? Okay, well I'm gonna
make that And so like that might work again a vacuum,
right if you had an academic study and you know
ran the primary out and you know in imaginary land
that the Desanta strategy might work. But in real land,

(15:57):
where Trump is crushing you, it's a lot harder to
pull off. It's prediction time. Oh god, And by the way,
if you're wrong, you don't get the blue coat or
the green coat, okay, the green jacket after actually be
right in every prediction. Yeah, yeah, it's a very high bar.

(16:18):
What case goes first. Yeah, to me, it seems like
Bragg is imminent. I know, the imminent word is like
an eye roll now and MSNBC at this point, all
signs point to that. I think the only thing that
would prevent a Brag from Big first is if he
steps off the ledge and just you know, or the
grand jury. You know, something happens in the final days
with the grand jury. So I think Brag is the

(16:39):
most likely. And to me, it seems like Jack Smith.
It seems like the federal stuff is moving very fast.
And then I think that the federal investigation, um, they're
conscious of the timeline, right like the debate start in August, right,
These guys don't want to be doing indictments in August,
right like after the campaign has really right, But they themselves,

(16:59):
I think, feel like there's some imaginary date in their minds.
Maybe it's the first debate, maybe it's after you know,
certain number people announce or whatever, where it's like the
campaign is on right now, like we can't interfere. So
I think that the federal stuff would happen next. And
then I don't have as much insight into what's happening
in Georgia. But that seems very live too. There's a
lot that there's a lot of live grenades out there.

(17:21):
So anyway, that's my half prediction is that bragg is
going to happen first, just not as quickly as we thought.
Tim Miller, thank you, Thank you. I'm JF. Justin Wolfers
is a professor at the University of Michigan and the
host of the podcast Think Like an Economist. Welcome to

(17:42):
Fast Politics, Justin and Fast Economics, Molly. So, I can't
decide whether to start with the raid hike or the
bank runs, So I'm going to let you choose. Yes,
let's get bank runs and just explain a little bit
about what happened with these bank runs and what they
meet in Yeah. So, if anyone has seen the movie

(18:03):
It's a Wonderful Life. Yes, what happens is someone in
town thinks that the bank may not have enough money
in its vault, so then they run to the bank,
and then other people along the way also think, oh no,
there might not be enough money in the vault, so
they also run. And so now there are a whole
lot of people inside the bank trying to withdraw their money,
and there's more people than there is money in the vault,
and so a bank run is the self fulfilling prophecy

(18:26):
when everyone fears there won't be money in the vault,
so they all want to get to the bank and
we draw their money before someone else takes the last dollar,
and then you end up with no money in the vault.
That was what happened in a wonderful life. That's what
happened throughout the Great Depression, and that is what happened
to Silicon Valley Bank. There's an interesting caveat which is
wealthy venture capitalists were involved in this bank run, so

(18:49):
a particularly unsympathetic bunch of characters. The way a bank
run goes down is actually kind of everyone's a little selfish, right,
You're like, I hear the banks in trouble. You could
pull the manager enough he support, but you can raise
there to beat your neighbor. And if you really want
to think of who's most likely to exhibit that sort
of behavior, pet Teal's pretty high on my list. Supposedly though,

(19:13):
and I want to I want to ask you about this.
Supposedly he did not. He is saying, at least he
said to some journalists that he had fifty million in
that bank, and he did not pull his money out.
That said Founder's fund, which is a fund that he
has some affiliation with, UM did pull its money out.
And pet Teal has a long history of always telling

(19:33):
the truth, the whole truth, and nothing about the truth. Well,
my favorite is David Sachs. Who can you who's a
venture capital? I mean, I don't, I can't tell. Can
we say, like this is just like a gallery of pricks?
Can we say? David Sacks is a entrepreneur who is
a middle aged guy who went to Stanford and blocked

(19:57):
me on Twitter. He was another spreneur involved in this.
But you know what I think is pretty interesting about
all of these libertarians is that the minute Silicon Valley
Bank was in trouble, they weren't crying not to their
own bootstraps, but to the federal government because of a
much broader and much harder truth, which is that even

(20:19):
if you're the most fervent believer in market forces, while
we're on markets require regulation. And nowhere is that more
clearly the case than we're thinking about the banks making system.
Banks have what economists call multiple equilibria, And I'm going
to explain that Molly before you never invite me back. Yes,
go basically most days of the week, probably in January

(20:42):
twenty third last year, you woke up and you thought,
to yourself, finance is so boring. I promise not to
think about it all day. And that's an equilibrium because
if everyone does that, we'll just leave our money in
the bank and the next day's boring. What happened at
the end of last week was a bunch of people
woke up and they said, I'm worried them may not
be enough money in the vault. And it may not
even be I'm worried. It could be molly that I'm

(21:03):
worried that you're worried. Now, if I'm worried that you're
worried there's not enough money in the vault, I'm worried
you're going to go withdraw your money and then there'll
be no money in the vault. And so what I
do is I run. And that's the other equilibrium, the
other outcome. And so the thing is banks can flip
from the good boring state to the oh my god,
I've got to beat you their state just overnight. Click

(21:24):
your fingers, just like that. It turns out remarkable fact
here the economics to solve the problem of bank runs
solved it, totally solved it. So if you look at
the number of bank runs that occurred in the US,
they're incredibly common all the way through the eighteen hundreds,
the nineteen hundreds up until the Great Depression, or an
enormous number of bank runs destroyed the financial system, and

(21:45):
in the wake of the Great Depression were instituted what's
called deposit insurance. Deposit insurance says well, if your bank
goes bast we will pay you back, We'll give you
the money. And so what that means, Molly is let's
go back to January twenty third. Remember that was a
morning you work up and you thought finances so boring.
I promised not to think about it. If you have

(22:05):
less than two hundred and fifty thousand dollars every day,
is that boring? Right? And if you think the day
is boring, then I don't need to run to the
bank to withdraw my money before you do, because I
know that you think it's boring. So deposit insurance solved
the problem. You might well, but justin there was a
bank run. The thing about Silicon Valley Bank is all
of its depositors were not all A huge number of

(22:28):
its depositors were VC and startups. The thing about those
folks is they have gobs of money, heaps of it piles.
You're only inshored up to two hundred and fifty thousand dollars.
So what that meant was all the folks you mentioned before,
they're effectively uninsured. And so what that meant is that bank,
and that bank alone effectively was outside the framework that

(22:49):
has prevented bank runs from being a major feature of
American life ever since the Great Depression. But what happened
was that the Biden administration actually did what the Silk
and Valley people wanted them to do, which was to
guarantee over a two hundred and fifty thousand Yeah, so
let's go back to David Sachs and his brethren. So
when a bank run happens one bank, that took a

(23:12):
lot of bets, and maybe you should have known better
than to put your money there. If you're a super
smart Silicon Valley millionaire, when one bank goes south, you know,
like that's bad for you. And I just want to
be clear about the stakes here, by the way, which
is there's probably enough value in the organization that David
Sacks was going to get ninety cents out of every
dollar that he'd deposited. So this was not like losing

(23:34):
all your money anyway. It was like losing a tenth
of all your money. By Monday morning, you would have
got half of it, and within a few weeks you
would have got I'm guessing ninety percent or even one
hundred percent of money back. There's educated guesses. So when
your bank's going south, you don't want anyone else to
know about it, because that will actually cause it to

(23:54):
go south. As soon as your banks collapse, though, what
you want to do is create fear elsewhere, which is
what David Sachs did. These guys, libertarian heroes went to
Twitter and started screaming the banking systems collapsing. Washington has
to do something now. And that's because it wanted you
and I to believe that our bank might collapse. And

(24:15):
in fact, if they succeeded, that would have been enough
for my bank to collapse. If enough people were fearful,
they would have withdrawn their money. We would have had
another old fashioned bankrupt and at that point that's called contagion.
And the federal government has to do something to stop
this spreading to a million other banks. So that's why
these guys incredible misbehavior are screaming the whole systems going down,

(24:37):
despite the fact that they knew they were going to
get at least ninety percent of their money back. And
it's because they wanted to create the macroeconomic conditions that
would give the government no choice but to rescue them.
And it created not just the economic conditions, but also
the political conditions, and so the government effectively said, hey,
you know what, remember that part where he said everyone's

(24:57):
insured for the first two hundred and fifty thousand dollars,
just kidding, everyone's insured for everything, which would be like
totally awesome if it applied to the rest of our lives. Well,
it's good to see libertarians getting away with it because,
i mean, you know, good for them. Now, these people
are not going to see any it's just hard warming.

(25:17):
I mean, none of what they did was illegal. No
one was going to go to jail for this. This
is just another day of fun in manipulating markets. Right. Yeah,
But let's not minimize that, Molly. Let's call bad behavior
bad behavior. Let's call trying to cause economic destruction terrible.
Let's call trying to drag down the financial system in
order to get your bailout deplorable. May not be illegal, yeah,

(25:41):
but it is morally reprehensible, though I'm not sure morally
reprehensible is something that these guys consider to be a
bad thing. We lost like two of these regional banks.
I mean, do you think the rest of the banks
are safe? Number one? It seems like his time has passed.
We're getting a sense that they are. Let's pose there. Yes,
And the reason he is Silicon Valley Bank was unusual
in two respects. One, it was essentially uninsured because it

(26:04):
had all rich customers. Two, what management did is they
went off to the casino and laid some big bets
and banking one I one is you don't do that?
And the other thing I want to ask you is
it seems to me, like with the railroads, that this
would be a case for a regulation would have prevented Certainly,

(26:27):
you know regulation would have prevented this. I mean, will
there be regulation? And do you believe that? So there
are a variety of different responses, all of which I
believe so a different answer. I don't know how you
feel about this is maybe we should have insured all
deposits to start with, because if everyone's deposits, even billionaires,
were insured, then none of them have will start a

(26:50):
bank run because they all know that their money will
be there whether they go on with draw it or not.
So that's one possibility. It's a form of regulation. Another
answer is maybe we should be pretty comfortable with where
we're at, which is we ensure most deposits, just not
the super rich. But we shouldn't allow banks to only
cater to those who are uninsured, as Silicon Valley Bank did.

(27:14):
Another answer is what Silicon Valley Bank did was the
double whammy of being uninsured and then taking the money
to the casino. Why was it allowed to take it
to the casino? And I should be clear to your
listeners what it actually did was brought long term government bonds,
which sounds like it's safe government bonds. That sounds safe,
but long term government bonds is effectively betting that interest
rates will be low forever, and so it took a

(27:35):
bet I call that going to the casino. So it
used to be that banks of Silicon Valley Bank's size
were subject to closer supervision by the authorities to make
sure they don't go to the casino. And then in
twenty eighteen, Silicon Valley Bank and other small and regional
banks went to Washington, looked the authorities in the eye

(27:57):
and said, we are not systemically important. You don't need
to worry about us. We shouldn't be regulated like this.
Just you know, if we screw up, let us fail
and it won't have a big problem. They succeeded, and
so the regulations were weakened. That helped allow them to
go to the casino. And then of course they go
to the casino, they lose all their money, and then

(28:18):
they say, just kidding, federal government, we're really important. If
you don't say if us, she'll bring the economy down.
And they ended up getting pailed out. Just amazing stuff.
So talk to me about the rate hikes. Inflation has
not gone away, or at least the anxiety inflation has
not gone away. So if you're used to thinking about

(28:41):
inflation over recent months as being say six or seven
or eight percent, I've got really good news for you.
It's probably closer to four four points something. It may
be coming down, but it may not be because the
recent news hasn't been as exciting or positive as we
might have hoped. And so that then means the Fed's
got to do something to bring down inflation. And what
it normally does as it raises interest rates. And before

(29:03):
this financial mess, it had suggested it might even raise
interest rates by half a percent today, and today it
decided to go for the simple no surprises approach and
raised interest rates by about a quarter of a percent.
And it's very hard to fault its logic here. I
think there are some who are going to be concerned that, wow,
maybe they shouldn't have raised interest rates at all given

(29:24):
the distress in the banking system. But what you heard
from Chairman Powell was actually a fair bit of confidence that,
you know what, those guys at Silicon Valley Bank were
a bunch of Wacker hurdles and we don't think other
banks look like that, and we don't think that they're
that important to their broader economy. And in any case,
the way we fix those problems is what we do
is we lend money to banks who don't have enough

(29:45):
in the vault. So we have a solution. So we
use lending money to banks providing liquidity is the tool
for solving financial distress and then we go back to
using good old fashioned interest rates to glob or inflation.
And that seems to be what Powell is trying to do. Like,
if you were power, would you do this? I were power,
there'd be a lot more listeners to your podcast. They

(30:07):
may not be the listeners you want. I think it's
a very sensible, very defensible, straight down the middle of
the line, straight down the middle of the road view.
I think if one we're looking for a liberal critique,
it's the one that Elizabeth Warren has correctly raised, which
is when we raise interest rates to reduce inflation, what
we're doing is we are saying we are going to
throw some people out of work, sacrifice them on the

(30:27):
altar of lower inflation. And once you start to think
about those people, you start to think, well, maybe we
should really be sure we need to do it. And
so that would be like, I really don't want to
believe inflation. Is this stubborn, But I'm really going to
wait until they learn that rather than accidentally overdoing it.
That would be I think the liberal critique, and I
think it's quite serious. The conservative critique would be if

(30:50):
you sit back and let inflation take hold. Everyone's just
going to get used to it, and then inflation becomes
a self fulfilling prophecy where I ask for higher wages
because my customer living rose, and then my employer raises
its prices because it's wage bill rose. Unfortunately, we're not
in that position, and so I do think that you know,
there are a range of arguments, but it's a pretty
defensible view. Now Here. We are in this kind of

(31:14):
period where there's a lot of anxiety that we're headed
towards a recession, but really no one knows, right, No
one ever knows. Economists are fantastic at predicting recessions approximately
two to three months after they begin. What are the
indicators you're looking at and what are they telling you?
So I'm an optimist. Now, I want to be clear,

(31:35):
I'm not promising your listeners there will be no recession.
In fact, I think the simplest way of thinking about
it is, over the past century, there's been fourteen recessions.
So that says in any given year, there's a one
in seven chance or a recession. And then so I reckon,
why not think about that this year? Now, A lot
of people are a lot more pessimistic than I am.
They're like interest rates are high, so therefore we might

(31:56):
think it's more likely maybe, but you know, they're not
that high. And I is a very simple rule of thumb,
the very the single best indicator for the future path
of the economy is how's it going now? It tends
to repeat itself, and things are pretty good right now.
Unemployment is at a fifty year may have been a
tick higher this month. The rate of job growth over

(32:17):
recent months has been at a level that in normal
times would be called a boom. Yet for some reason,
the headlines are being recession. So I think there is
an enormous disjunction between the extraordinary pessimism I hear out
there in the actual heart economic numbers, which so far
I keep being amazed. But so far just keep looking
really really good, and let's just keep hoping it continues. Yeah,

(32:39):
I mean, look, you know what else, or what are
the other choices? What are the things that you're like
a little bit worried about in your head. The FEDS
put out its latest forecast today, and one reason I
pay a lot of attention to that is the FED
as an institution is literally hundreds of PhD economists who
spend their whole day just noodling over numbers, and as

(32:59):
far as we can tell, they're the single best predictor
of the state of the future of the economy. Really
does see the economy slowing over next year. Now, I
want to be clear, they're also not infallible, so that
gives me real concern. I worry about the rest of
the world. What's going you know. I think there are
a lot of things that could go wrong there. I

(33:20):
think the biggest, dumbest, stupidest thing that could happen is
that the federal government will decide to default on the
debt as a result of debt ceiling brinksmanship within Congress.
And I think this is a wildly dysfunctional Congress, and
simply refusing to pay your bills is just punching the
American economy in the face. And given that the right

(33:44):
wing of the Republican Party already like punching Kevin McCarthy
in the face, I think they like regular Americans even less.
So I worry a lot about that. Yeah, I mean too,
Thank you so much for joining us. I hope you'll
come back. The great pleasure mane. Charlie Savage is a
Washington correspondent at The New York Times. Welcome to you

(34:04):
Fast Politics, Charlie. Thanks for having me up. Delighted to
have you so super interesting moment in American media. Donald
Trump told us he was going to be arrested on Tuesday.
It is now Thursday, and nothing true. We of course something,

(34:25):
which is that Alvin Bragm, Manhattan District Attorney, is continuing
to work with a grand jury in New York and
seems to be close to a final decision to seek
an indictment. But Trump obviously had no actual knowledge that
he was going to be arrested on Tuesday or this
would be done on Tuesday, but was throwing out a
specific day as sort of a call to arms to

(34:47):
his supporters, which is now come and gone. That doesn't
mean nothing is happening, though, It just means that Tuesday
was made up. So explain to us a little bit,
because what so I wanted you to talk about this
piece that you just did. Possible Trump indictment puts attention
on execution for real discretion, because we're in a situation
where there are so many possible cases for this defendant

(35:10):
that the question we've hit a moment of like who
goes first? Right, there is a sequencing issue, not that
anyone has the authority to tell one prosecutor versus another
in New York or Georgia or Washington, DC. You have
to wait for this unrelated other matter to go first.
They're all kind of independent agents here, which is a

(35:30):
little bit chaotic where you have seen a lot of
commentary of people who are critical of Trump and Drew
Saint that he committed various crimes and should be held
accountable for that. So people that elk nevertheless wringing their
hands over the prospect that this case will go first.
Is this the first case to break that seal? And

(35:53):
for the first time in American history, an ex president
is being charged with a crime, This ex president in particular,
being charged with a crime when the matter at hand,
apparently bookkeeping fraud to cover up a campaign europe payment
to a porn star, is obviously so much less significant
than the events surrounding January six and attempts to overturn

(36:16):
the election, or even holding on to classified documents and
obstructing the government's efforts to retrieve them the other matters
at hand, not just because the actions seem to be tawdry,
as they are less important than those other things, but
also because there is a sense that the legal theory
the album Brag the Manhattan da is considering may itself

(36:40):
be novel in some way. And the problem is we
don't really know what his theory of the case is,
and there's been a lot of speculation, but that speculation
may be raw. But the issue is that we're pretty
confident that he's primary charged is bookkeeping fraud for writing
and Trump organization records that repayments to Michael Cohen for

(37:04):
this payoff to Stormy Daniels were for a legal retainer
that didn't exist, as opposed to writing down what they
were actually for, which is reimbursing him for this hush
money payment during the election. I mean, is that a
tax fraud issue or is that a campaign fraud issue? Well,
that's the issue. So bookkeeping fraud in the state law

(37:25):
is normally, if it's just by itself, it's a crime,
but it's not a big crime. It's a misdemeanor two
year statuted limitations. You're not going to you're not going
to go after a president on misdemeanor. That's old, But
it becomes a felony. The fraud was for the purpose
of committing or covering up a second crime. So that's

(37:47):
the question. One is the second crime that Bragg is
thinking about. There's been chatter that it may be a
campaign finance violation. Michael Cohen pleaded guilty in federal court
to violating campaign finance law by making this payment and
not disclosing it. But that's a federal charge. Presidential campaigns

(38:07):
are regulated by federal laws. Or raises the question of
whether a state prosecutor who doesn't have jurisdiction over federal
law can invoke that. Is there some way of making
it a state campaign law and so people are nervous
about doing something that hadn't been done before. It may
also be the case that everyone is wrong, and Bragg
has some other set of evidence it's not public, that

(38:29):
perhaps Trump intended to for I'm just making this up now, right,
Perhaps he has evidence that Trump intended to deduct those
payments to go in right state, to take a tax
right off on his payment to a sexual partner. YEA,
By the way, I would not put it past him.
But I want to ask you, and I want to
go back to something we were talking about a minute ago,

(38:49):
which is you said that there is sort of confidence
that Brag is still meeting about this indictment. Can you
explain to me where that comes from. Well, the DA's
office is locked down, but the people who are called
for the grand jury to testify are allowed to talk

(39:10):
about what they were asked. Lawyers for people who are
being given a chance to try to head off an
indictment or the defendant potential defendant itself are free to
talk about it. And so in these investigations, even without
there necessarily being inappropriate leaks from a prosecutor's office, especially
if it's high profile enough, the high mind of the

(39:30):
press corps is generally able to suss out puzzle pieces
that give us an idea of what's going on and
whether the grand jury is being used for this purpose
on this day or being asked to ask some unrelated case.
It looks like this is not going to be resolved
this week, and so it continues, and in the meantime
then people there's the void is filled by this commentary.

(39:52):
Is this the case to go first? Is this the
weakest case relative to the others, at least is Bragg
it's going to be vulnerable here to attacks from Trump
in his world that he's doing something that's never been
done before selectively for political reasons. And so that that
discussing into those issues of prosecutorial discression. What is selective prosecution?

(40:14):
What would Trump have to show if you did get
charged and brought that was the purpose of that piece
you brought up. I guess that group is meeting today,
but not about this. Can you explain that, Well, a
grand jury is not convened generally for one particular investigation.
The grand jury might have several unrelated batters. And so
there are reports out of New York that the grand

(40:36):
jury is not focused on this case today, in which case,
assuming that it's correct, they're you know, they're not going
to make a decision today, of course that you know,
maybe this is wrong. And by three pm the world
looks very different. But there's a whole lot of like
looking at this through a glass darkly for all of
us on the outside. Right, there's this case, there's a
possible DOJ case, right, we don't really know if that

(40:58):
where that is right? Two possible federal cases, both of
which are being handled by the Special Council of Jack Smith,
one about Trump's attempts to overturn the election leading up
to encompassing the events of January six and the other
about the classified documents at Marlago and obstructing the efforts
to get them back. And then there's Georgia. Yes, And

(41:20):
then the local prosecutor in Atlanta Fulton County in Georgia
has a January sixth investigation of her own going focused
on Trump's attempts to overturn Biden's narrow win in Georgia,
specifically including the famous taped and leaked phone call to
the Secretary of State which Trump asked him to quote

(41:40):
find the ten thousand or so votes he needed to
flip the outcome, and efforts to get Trump supporters to
declare themselves to be electoral voters electoral college voters, which
would then set up Mike Pence to not certify the election.
Isn't there another Georgia case? There's another phone collumns. Sorry,
there's a phone call that we didn't really know about.

(42:02):
There are multiple phone calls in Georgia, multiple efforts to
get people in to pressure Georgia officials to find a
way to flip the outcome of that election. And so
the Fannie Willis, the DA down there is looking at
both that on election crimes related to that and the
fake electors piece, and she has indicated that she's also

(42:23):
looking at a racketeering tis an interesting twist. Racketeering charges
were written to deal with criminal organizations like the mafia gangs,
where you had groups of people working together committing a
series of crimes, but all with a common purpose. And
so she seems to be toying with the notion that
Trump and his associates were together committing various crimes, all

(42:47):
with the unified purpose of trying to flip that election,
and that potentially could violate RICO, the racketeering one. Until
she puts together her a grand jury, there will be
no charges out of Georgia and there is no grand
jury yet. So yes, people may have heard that there
was a grand jury, and famously the chairwoman of that

(43:08):
went on this somewhat crazy publicity tour giving interviews. Yeah,
not necessarily coming off as the most serious looking person.
But that was a special grand jury that was merely
it's this thing that doesn't exist in federal law. It
was merely to gather evidence. That is to be the
body that oversees people testifying and turning over documents. But

(43:30):
we're a longer term investigation. It lacks the authority to
decide whether to actually bring charge. It will make recommendations.
So Fannie Will still needs to decide whether she wants
to ask a regular grand jury does this pile of
testimony and documents add up to chargeable offenses? And as
far as we know, she hadn't decided whether or not
she's going to do that at this point. So there

(43:52):
definitely are steps in the Georgia case that would need
to happen before anything happened. Well, and in the New
York case and in the recent case. Trump has not
been charged, No grand jury has voted to invite him anywhere,
but all kinds of things are boiling. Do you think
that Trump? And again, I know how annoying it is
to come on this podcast and for me to ask

(44:13):
opinion questions because you're a straight journalist, but I'm going
to ask you an opinion question, but at least it's
not partisan. Since Saturday, we have sort of lived this
news cycle that was a little bit of Trump's making, right,
even if there were absolutely do you think Trump sort
of won that news cycle? I mean, well, He certainly
focused attention on this, and he put his rival RHNDA

(44:37):
scantists on the hot seat, sort of forced him to
show his hand a little bit about whether he was
going to be on Trump's side or let Trump stew here.
In that sense, he at least was controlling the narrative.
He decided, this is what we were on them to
talk about, and we did. An element of this. Which
is interesting though, is that part of his commentary since
Saturday morning has been a very clear call to arms,

(44:59):
helping them to protest. Now was the time protest protest protests,
notably not using the word peacefully. Yes, he did once
in his notorious January sixth speech, and so then when
people later accused him of assitement, his supporters could say, no,
he said peacefully, you know, in the middle of all
that other stuff. He finally did, by the way, say
peacefully this morning in a true social post that used

(45:21):
the word very insidiously. Right. He didn't say, go protest peacefully.
He said, you know, I'm in a said Bragg's out
of control. He's an animal. They're destroying our country, and
they tell us to be peaceful, you know, right, kind
of the opposite of urging people to be peaceful. Right, So,
but what I was getting at is the protest that

(45:41):
he called for have not seen much of a response.
There's been a few sort of halfhearted gatherings of small
numbers of people that are generally outnumbered by the number
of media who showed up to see what was going
to happen. And so maybe some of that is just
no one really knows when the day is, If he's
actually in the courthouse, maybe you know, being fingerprinted, maybe

(46:05):
people will spontaneously flow there. But it's raising the prospect
that January sixth was a one off and that his
supporters aren't willing to do that again. All kinds of
you know, people rotting in jail and having to pay
for their own bills. And also this you know that
was about obviously it was a lie, but the election
was stolen. Your vote was taken away from you, and

(46:27):
maybe that's more galvanizing than hey, they're trying to charge
me with their crime over this payoff to a porn star,
which lacks that sort of your vote was element. But
in any case, we'll see what is he still able
to create or not, you know, to be exciting. He
may have revealed himself to not be able to reassemble. Well,

(46:47):
I don't want to predict he hasn't been able to
do that. But if he isn't able to reassemble a mob,
that maybe people in his own party and such, to me,
we consider how deferential they want to be to him. Yeah,
I mean that is a certainly very interesting situation where
you have members of the Republican Party more willing to

(47:07):
defend him than anyone else. I mean you have to wonder,
like we had thought for such a long time that
it was the base, but what if it's the party
itself that has Stockholm syndrome? Right? I mean you don't
have to answer that, because I know you was like
a real reporter, I will neither. But so I want

(47:28):
to ask you what else are you watching for? Again,
we're not going to predict, you know, we taping this
on whatever day this is. It will come out on Friday.
We're not going to try to predict what's going to happen.
But what else are you watching for in the macro
micro level whatever? Just tell me what you're looking at? Right,
So I'll say two things. One is the piece that

(47:49):
you mentioned earlier about prosectual discretion. Make it at something
that becomes important if Trump is charged and then his
lawyers file a motion to dismiss on the basis of
prosecutorial misconduct or selective prosecution, which certainly his pr statements
are pointing towards. You know, this was politically motivated, and

(48:11):
no one a weak case, no one else would be
charged with this. Therefore it's improper. As I understand it
from having read the cases now and talked to a
number of professors who've written in this space. The fact
that there's never been a case quite like this before
may get Trump some traction in the court of public
opinion and try to portray it this way. He will

(48:32):
have tremendous difficulty in an actual court of proving selective prosecution,
because what he would need to show is that other
people have in New York has to be the same
prosecutor's office. Can't just be you know, someone in North
Carolina or whatever. Other people in New York have done
this same thing, these same action, and the prosecutor chose

(48:53):
not to charge them, and those other people had invoked
their First Amendment rights to have different expressed different political
views them with me, right, because he has to be
an exercise of a constitutional right or some disfavored category
of like religion or race, like people are being treated
differently based on one of these things. And so it's
just not there are any other examples of New Yorkers

(49:16):
falsifying business records to cover up campaign era payoffs to
people that are embarrassing, even if they're otherwise lawful. And
so if he can't point to other examples, Roman Manhattan
DA could have charged someone with this and didn't, he
will not succeed in a selected prosecution case. So that

(49:37):
was interesting, very very difficult, and it's apparently has been
like a century since even anyone that's succeeded in selected
prosecution claim, even though defendants raise it all the time.
So that's what. The other thing that's interesting that going
on right now is House Republicans Jim Jordan at all
comer have been sort of galanized into action to try

(49:59):
to help Trump and have been demanding information, demanding testimony,
demanding documents from Alvin Bragg, the Manhattan DA who this
Morning's had his lawyers send them back a letter saying,
buzz off this federalism. You have no legitimate purpose in
doing this. Even the federal DOJ does not tell you
about open investigations. We're a state court as well, sovereign

(50:22):
state of New York Tenth Amendment array of defenses. And
it appears to me that it is likely that this
is just the beginning and there will be similar attempts
by the House DPD to get into the Georgia case,
maybe the Jack and the Jack Smith two cases we
may be ending up with. Can they get something to

(50:45):
the floor for contempt? If these prosecutors tell them to
go away, will we be back in court as we
were with The politics flipped one hundred and eighty degrees
in the last two years of the Trump administration, when
the Democratic controlled House kept keening entities ranging from Trump's
former lawyer Don Began, White House Council month Don Agan,

(51:06):
to Mazurs, his financial accounting firm, and sort of Trump World.
People were arguing, these subpoenas are invalid, These go beyond
Congress is legitimate legislative authority. This is just you know,
political fishing expeditions, and therefore, judge, you should quash the subpoena.
You know, it used to be exceedingly rare for Congress

(51:28):
to be in court pursuing litigation over trying to enforce subpoenas,
and that became kind of commonplace in the last two
years of Trump. Fancy stonewalled the Democratic House, and I
think that same set of issues is going to be
all over the place again now and we're starting to
see the leading edge of that, except now it'll be

(51:48):
Republican House trying to get its subpoenas enforced. Yeah, ironee yes, yeah,
thank you so much. This was so interesting. I really
appreciate you. Thanks, Charlie, my plan, sure, Molly jun Fast,
Jesse Cannon. It's always fun when the petty little foot.

(52:11):
None of this is funny, fun, ironic fun. I smile
with Matt Gates attacks Rod de Santists to defend his
boy Donald Trump. That makes me smile, But I'm maybe
a little deranged. So the whole idea here that Gates
and co. Have decided is that somehow does Santists could

(52:32):
protect Trump by stopping extradition from the state of Florida. Again,
Trump has yet to be charged with anything like these
people in a rush to defend the guy who hasn't
been charged with anything, they're making up a lot of stuff,
But The new thing is that Matt Gates wants to
santist to stop Trump from getting extradited, which isn't happening.

(52:54):
So there's nothing braver than defending someone for something that
you don't understand at all. Congratulations Matt Gates. I think
you're just arguing for this because you really want to
build that mode. Yes, I want to build the mode.
That's it for this episode of Fast Politics. Tune in
every Monday, Wednesday, and Friday to your the best minds

(53:15):
in politics makes sense of all this chaos. If you
enjoyed what you've heard, please send it to a friend
and keep the conversation going. And again, thanks for listening.