Oikos and Nomos: What Is the Economy, Really?

This week, Dan and Sean dive into the deep end of economic uncertainty—from the philosophical origins of “the economy” to the lived reality of layoffs, inflation, and shifting trade routes. Why do oil rigs in North Dakota matter to the price of cheese? Are we witnessing demand destruction or just another panic? And what does “creative destruction” really look like when the grenades are turning into landmines?

Along the way: internal combustion nerdery, fourth turning fatigue, and a fair bit of macroeconomic exasperation.

If you’re feeling off-balance in today’s economy, you’re not alone. We're all just trying to stay afloat in choppy waters—and sometimes the best you can do is keep your head up and wait for the next swell.

Books Discussed:

• In This Economy? – Kyla Scanlon

• A Splendid Exchange – William J. Bernstein

• Amusing Ourselves to Death – Neil Postman

• The Fourth Turning – William Strauss and Neil Howe

• The Siege – Ben Macintyre

• The Fifth Risk (and a new companion) – Michael Lewis

Podcasts Referenced:

• Odd Lots

• Hidden Forces (Grant Williams + Demetri Kofinas – The Hundred Year Pivot)

• The Fed Guy (Joseph Wang)

Quote of the Week:
“They’re not grenades anymore—they’re landmines we’ve set for ourselves.”

Chapters:
00:00 – Weekend work and the managerial grind
01:00 – Oilfield layoffs and sour vs. sweet crude
04:00 – Why internal combustion is still the apex of engineering
06:00 – What does “economy” actually mean? (spoiler: it’s Greek)
10:00 – Sheep barons, trade routes, and the roots of specialization
14:00 – Consumer sentiment vs. reality: is the mismatch getting worse?
18:00 – Tariffs, inflation, and the risk of stagflation
24:00 – Layoffs, rate cuts, and the Fed’s boxed-in dilemma
30:00 – Budget gaps, fake fixes, and the math that doesn’t math
34:00 – The future of global trade (with or without us)
39:00 – Will the Fed move fast enough—or too late again?
45:00 – NIH cuts and the role of scientific “waste”
51:00 – A fresh read from Michael Lewis + other book recs
56:00 – The fourth turning isn’t over: the ecpyrosis continues
59:00 – Swimming, surfing, or just floating through it all
1:04:00 – Walmart’s margins and the myth of “just eating” tariffs
1:10:00 – Median income, optionality, and the meaning of wealth
1:13:00 – Outro: shifting sands and the promise (or threat) of change

Episode Transcript

(00:01):
Welcome to Unqualified Advice, the show where we try to make sense of business, investing,and life with just enough experience to get ourselves in trouble.
I'm Sean and he's Dan.
We both started in different careers, Dan in IT, climbing the ranks to Chief TechnologyOfficer in New York, and me in manufacturing, managing production quality across three
countries.

(00:21):
At some point, we both decided we didn't know enough.
So we went back to school for our MBAs.
Me at Columbia Business School and Sean at the University of Houston, downtown.
And after all that, we figured the best way to share what we've learned and what we'restill figuring out is to start a podcast.
So if you like deep dives into decision-making, business strategy, and the occasionalhalf-baked investing theory,

(00:45):
Or just enjoy listening to two guys challenge each other's ideas and occasionally admitwhen we're wrong?
You're in the right place.
Welcome to Unqualified Advice.
Sean, good afternoon.
Good afternoon, Dan.
It's a nice sunny Saturday.
I think it's the middle of May.
May 17th is in fact just for a time stamp in case.

(01:06):
You're like, I think it's the middle of May.
So tell us how life work life or what's what's distracting you these days from knowingwhat day it is.
Is it just too much vacation?
uh
I wish I wish quite the opposite.
I'm planning on pulling out the, work laptop here for, at least four or five hours herethis weekend.
So things are, things are, things are a little busy, in general, just as, as I think theyare at the, at the managerial level I've reached, tend to have 80 % of your week spent in,

(01:37):
in meetings.
to actually get things you need to get done, you have to carve out time outside of the.
normal nine, 10 hours a day you might be in the office.
But that's, you know, it is, the perks of the job, so to speak.
These days it seems like it's good to just be employed.
Absolutely.
will say we are, you know, oil and gas in general.
I think there's been a lot of talk about it in the news and nobody should be surprised,but it's going through a rough period.

(02:03):
Absolutely.
With, let me see here.
I heard reports of 25 % of the rigs being laid down in the Wilson basin, North Dakota,which is one of the most active regions in the U S and, about 10 rigs I heard being
dropped in the Permian laid down.
to not be producing anymore, is probably only 15 or 20 % out there, but it's still a bigdip, particularly in North America.

(02:30):
out of these basins stays domestic or do we ship it out?
It's a mix.
A good chunk does stay domestic, but some of it ends up going and being traded to othercountries where they have more refining capacity for that type of crude, depending upon
what type of crude is being produced, which varies by region, whether it has a lot ofsulfur or not a lot of sulfur, sour versus sweet, respectively.

(02:52):
uh
are like such a beautiful example of how interconnected and globalized our economies are.
And I don't think people realize it.
It's like, well we drill over there and then I get gasoline at the pump.
And it's like, yeah, that's a little bit bigger than that.
oh
and even a commodity that people see as being pretty fungible is not always perfectlyfungible.

(03:12):
If you have a refinery that doesn't have sulfur scrubbers, you can't handle the sourcrude.
So it's of zero value to you, roughly.
It's...
It also makes me wonder about the tiny little details, the tiny little questions thatcertain engineers have to go through too.
So if the Shell engineer working for Ferrari's F1 team, are they thinking about all theway down to the source, like for my engine, it is so temperamental and high strung, I

(03:43):
cannot have the North Dakotan oil.
I must have the Gulf oil or whatever.
after the refining process, that's been stripped out because that's what the refiningprocess does is get like you refine it to its sub components, its base molecules and then
you put those together in whatever blends you need.
you get your 80 to 90 to 100 octane, whatever octane they run an F1.

(04:09):
You mix in your.
whatever little jet fuel components you need to get those things to rip.
So I think the refining process in general would preclude most of those concerns for them,given that most countries do have some refining capacity.
So I guess I could imagine a situation where maybe certain countries like, I can't getthat grade of gas here in a given country because our refineries don't produce it here and

(04:36):
you have to import it.
I could see some stuff, I could see a possible thing having to consider that as a F1engineer.
That's a really good question, Dan.
We need to meet an F1 engineer to invite him on and explain it to us, I think.
That would make my year, frankly.
That would be so fun, Yeah, preferably we could do it in the paddock.
Yeah, I would I would be happy to just sit and listen while you ask all the questionsbecause I would just like, yeah, that sounds

(04:59):
you'd be integral.
think your engineering mind would start spinning up.
You may not have the same level of interest as I do, but you would start nerding out andyou'd get in there right with me.
Yeah.
We would have two different angles.
Yeah, yeah.
And the origin of those materials.
You tell me your brakes are from the Concorde.
Yes, exactly.
Yeah, no, actually, the production side of it, how it's all made and comes together, thatwould be absolutely

(05:23):
The transmission alone, you could spend a week talking about the transmission.
Probably longer, depending on your level of interest.
I took a semester long class at Purdue, internal combustion engines.
It was a semester just on the ice, you know, and how it works and, yeah, like even.
people can't manufacture cars.

(05:44):
Like EVs, easy.
Easy.
There's very few moving parts.
It's battery motors and off you go.
Like the car itself is not a, typically, unless you're like at the peak or something, it'snot a marvel of engineering necessarily.
gadgetries maybe, but it's the, it's the actual engine that throws.
I mean, that's why the car companies are the car companies is usually because of the sheerdepth of their.

(06:05):
knowledge in internal combustion, which is crazy.
just their internal design books that tell them how they figured out how to do it over theyears and to do it this way.
there, yeah, there are so many factors like, you know, you have to know fluid dynamics tothink about how the gasoline is vaporized and fills the chamber.
And you have to think about all your, you know, mechanics of all basically what they callfour bar linkages and how you turn, linear motion into rotational motion.

(06:27):
you have to think about the materials and what temperatures they can withstand and thepressures and there, there is a lot of detail that is.
Goes into those as you've pointed out.
Yeah.
You absolutely we could, if we, if any of you, F1 engineers out there here, this and wantto come on and tell us all about your job, we would gladly spend as much time as you give
us because there's clearly a lot to dig into.

(06:47):
Yeah.
All right.
We had a failed recording last week due to technical difficulties and the topic that wewere sort of mulling over in that failed attempt was, I don't want to take it from you,
Sean.
It was one that you plucked out of the hat.
Yeah, I was just thinking about words and
I was thinking, you know, actually I was thinking specifically about Kyla Scanlon's bookin this economy.

(07:12):
you know, kind of what economy has evolved to mean to people today.
And like, if I say, yeah, how do you think the economy is doing?
What that means to people today?
And I don't think it's always meant that over the years.
And I was just thinking about how the development of what we envision the economy meaningtoday is actually this multi-layered
definition of all these things going back to Sumerian times even when trade was firstbeing established.

(07:39):
And I just thought it was kind an interesting thing to maybe for us to kind of dig intoand talk about because I think there's a lot of emotional things around the economy uh as
well.
And so, David, like when I say, if I ask you the question, what is the economy?
first pops off your brain?
I had a real quick answer last time.
I think it was the production, distribution and consumption of goods and services.
Something like that.

(07:59):
is, think, almost spot on what you spouted off, is very much, very much, well, it's thetext.
It's the textbook answer from what we call a modern economics perspective, very modernday.
That's how we think about it.
And in B-School,

(08:20):
what's the old definition?
Well, so yeah, so I thought let's dig back into where it all kind of started.
So let's just talk about the word economy.
It derives from Greek actually, two Greek words, oikos being house and nomos being lawmanagement or custom.
So.
Okay.
right.
So it's kind of the management of the house or the network of your home in your community,right?

(08:49):
And so, in early usage, words around economy were very much more around kind ofanthropologically or, what's the link for?
whether anthropologically or evolutionary was a lot about just defining a network of howpeople interact with each other and create a system of rules around how the tribe works

(09:15):
together.
And that's where it.
and sort of the guardrails on those chain reactions.
Yeah, and like developing trust and reputation and coming up with, know, what isessentially like kind of reciprocal, like what's good for you is good for me, reciprocal
altruism.
uh
the dismal science, right?
There are hard numbers and then so much of what comes out or like what so much of whatthose numbers are telling you are outcomes of behaviors and soft subjects that are hard to

(09:44):
impossible to measure.
Mm hmm.
Yeah.
And so you know that that was back in times before, you know, coinage was around or papercurrency.
So it was, you know, starting off with how do we, you know, reciprocity and gifting, Ithink initially, really like just doing, I'm just going off on, I'm just going off on my
imagination here.
This is purely speculation.

(10:06):
But like, you know, you think about the first people that were even looking at like a
go to the zoo and look at the, look at the, you know, the primates and, they're helpingeach other out by, picking things off each other's backs and working together to do
certain things.
Right.
I that's.
each other and smack each other up the side of head and the rest of it too.
There's pecking, pecking deep, like a deeply held pecking order.

(10:28):
territorial, know, territorial concerns that we have.
And then I think as people started to move from like a nomadic life, then probablyproperty rights became more part of what people think of in terms of the economy and just
defining, you know, where I live and what is, yeah, and what is, you know, what isrightfully, quote unquote, rather than ownership.

(10:51):
Yeah.
And eventually we got from there to, I think probably more like of a, people would thinkof like terms around the economy is like trade-based, right?
I'm going on the Silk Road and building.
Well, then you start being able to assign worth, right?
Even pre-money, you'd still be able to say like, the cow is worth eight sheep.

(11:12):
And eight sheep is worth a bushel of wheat or whatever, right?
So you have these things that are non-fungible, but that you're coming up with relativevalue for, right?
And you know, eight sheep is worth a little bit different than someone else than someoneelse, you know, and the same is true for money, right?
$10 is meaningful to some people and others are like, whatever, it's just 10 bucks.

(11:34):
Yeah, so I mean.
there again, another soft thing, you know?
Yeah, because what you're going to do with those sheep versus that cow might depend whatit's worth to you, right?
Maybe I'm a...
it might save my family from starving or it might just be another cow.
Mm hmm.
Yeah.
And I might be the only person in the village that now has a cow that makes milk that Ican sell cheese from or or you know, that I can then use.

(12:00):
Yeah, that I can then use to trade for other things that I want and trying to, you know,corner the market on fresh cow's milk and I could see I don't know.
Do you replace settlers of Catan?
It's been a long time.
I love becoming a sheep baron.
That's usually my goal is I just want to, I just want to hold mess of sheep.
That's, that's my favorite.

(12:21):
I don't know why it just gives me joy to have just a stack of sheep that I'm just tradingin and dominating with.
Yeah, you would have gotten along just fine with the shepherds where we were in Morocco.
Only on paper.
I don't actually want to deal with the business end of a sheep, uh From Clarkson's farm, Ican tell it's not that pleasant.

(12:45):
There's a lot of like, this is a good idea.
Or like, it's good to think about.
Yeah.
so yeah, like, also, yeah, that's very true.
There's, which is also, I think, part of the economy is there's a lot of things that wedon't want to think about in our, have to think about in our daily life.
we offload through specialization, um, and relative.

(13:05):
or comparative advantage.
And yeah, exactly.
Compared advantage.
I'm, if I'm a hell of a sheep farmer and you can't seem to keep them alive, then you know,you go do something else, cut stone and I'll, I'll take care of the sheep.
because, know, I have a fresh spring on my property and your, property is all dry and youcan't, can't support them.
you.
hard to be the blacksmith and the stone Smith and the sheep herder and the, and the, andthe, and the, right?

(13:30):
Like, and that's how, economies have gotten more mature, more specialized and the floor Iwould argue has gone up on more boats have risen because of specialization.
can kind of think about it as, think one of the cynical ways to think about it is, we wentfrom sharing everything to stamping our, our ownership on everything and getting selfish.

(13:52):
When in fact, another lens to look through is we've all gotten more specialized and we'vebeen able to demark what is and isn't ours.
And through that, we've made a bigger economy and through bigger economies, we've raisedthe floor with which we all live.
you know, if, if you were to be a king and the, in the 1600s, you probably live worse thana lower middle-class person in the United States today.

(14:13):
I mean, they certainly didn't have refrigeration or...
maybe the status that you would have for feeling, like, yeah.
would just wait on you.
was, I mean, not all Kings made huge kingdoms either.
I'm sure there were some Kings up in Northern Sweden that just like had a group of 18people, but he was King and that's that.
And I don't know that that would be all that particularly awesome, but.

(14:35):
say King?
King can mean a lot of different things, I suppose.
I'm king of the lanes, you know?
uh
But I'm just, you know, I just think like, I, know, when you draw these, draw these lines,I think it can start feeling more and more impersonal as like we get more and more
abstracted from the jobs.
Think about like, you know, the, the corn cob on your plate or the steak on your plate.

(14:56):
And you have like basically no idea how that is made or delivered to you.
Most people don't.
I mean, I think they're so abstracted from their food.
It's incredible.
But this is how we've been able to all specialize and not concern ourselves necessarilythrough systems design and sharing economies or maybe sharing economies there was the

(15:18):
wrong turn of phrase, but you know, you get where I'm going.
I think I do.
because yeah, like, like, like even making something as simple as like a pencil, right?
something as simple as that it's, hundreds of different steps that are done by differentlocations and you can't do it all yourself.
You you're not going to be good at cutting down all the trees in the forest and then help,you know, shaving them down to the right size or sourcing the graphite or.

(15:40):
What have you.
where it, which I think that's where I've been, I've been thinking a lot here the lastweek as I've been trying to ponder what I was going to say today.
And I think my view of the economy has really developed more around it's, it's a, it'snetwork.
It's about the network as much as it is anything.
It's, it's the interconnectivity of, of people with each other is what is the crucialaspect, which, know, in today's modern

(16:03):
times, we see us wanting to break off portions of those networks or change the way thenetworks interconnect.
that's, you know, it's, we're caught, I feel we're starting to see some pain in what wewould call, you know, the economy here in modern times.
but yeah, like in the modern times, we judge it off of a bunch of numbers, right?
We've, we've boiled it down to data.

(16:25):
collect and then use those as signals or extrapolations of the inner workings proxies.
Yeah.
And therein lies why people can say that the economy, the economy is terrible, but I'mdoing fine because that's what most survey say right now.
Everyone thinks the economy is in the dump and has, they have felt this way for years, butthey they're doing completely fine, which that's a total mismatch.

(16:50):
Somebody should be doing not well.
if the economy is in the tank.
Exactly, and I wonder why people have been feeling that way more lately.
Is it more exposure to maybe seeing
Instagram.
Instagram, yeah, just exposure to seeing wealth gaps and.
I think you see more of it.
Yeah.
And also the presentation of people is curated.

(17:11):
That's like an ingredient.
I'm not saying that that's the reason why.
no, no, but I think that's, there's some truth to that, like you're in a little.
yeah, I'm only going to show the best parts and I'm going to make sure my billboard isreally pretty.
And then when everyone sees your billboard, they're like, man, that guy or gal is doinggreat.
My life sucks.
And then that feeling compounds.

(17:32):
they see a facade and they extrapolate that through the.
really good at unfortunately judging ourselves, right?
And, and seeing the negatives or seeing what we don't have.
so, you know, comparison in one's mind is pretty evil.
It's pretty terrible for mental health.
And I think a lot of this stuff begs for that to be happening, whether it's TikTok orInstagram and so on.

(17:53):
Okay, I think you're right.
well, that's that their comparison machines Dan they are they're like, literally thosetools I think are Yeah, exactly.
of dopamine and you keep going.
You want to keep looking at it.
Exactly.
And you want to keep posting stuff up that, you know, people like, I think that's give me,I give you like on that.
And yeah.

(18:14):
That's a whole nother rabbit hole, but I do believe that that is an ingredient in thismismatch between like what my life is versus what the economy is versus what people
believe about our country, like, and how it's doing.
That's, that's bigger than the economy because that starts bringing in like culture anddirection and leadership and the rest of it.

(18:36):
And I think, you know, there's just so many people that think it's a, I mean, I mean, Iguess I'm put me in that boat.
I'm like, that's kind of a mess.
Is that okay if it's not economy is that community is that country is that Yeah
I would argue that the weights for each individual, if you were to break out thosedifferent categories, each individual would have a different set of weights on each of

(18:58):
those categories, right?
Some people would put country as a bigger weight than community, for example, right?
Or the other way around, right?
Yeah, I mean, isn't a country just one big community?
I mean, if you extrapolate, yeah.
Yeah, it doesn't feel that way right now, that's for sure.
And that probably never really has historically, honestly.
uh

(19:19):
probably true.
That's, this is probably another place where because of the internet and the coagulationof society, we're feeling certain things that have always existed, but we're feeling them
more.
And since we're feeling the more they feel pretty damning, a negative, even though it'skind of like, maybe we should all be like, it's always been this way and just shrug it
off.
Not easy to do.
like, so yeah, I think we both kind of have a good feel for what we think, you know,economies are.

(19:44):
I don't know why I particularly find this an interesting topic to think about.
I just, enjoy the going back into history and reading about, you know, I've been workingon that book.
Uh, a glorious exchange, uh, splinted exchange and, know, uh, getting up through, um, Oh,I'm, I'm like to, to, uh, like 180 at this point.

(20:07):
Um, just to, as things have developed and change from, again, they were just originallytrading one good for another and setting odd prices.
Then along came using something like gold as a, as a medium for exchange and, and saying,well, this, this,
One gold bars were so many sheep.
But man, it's also amazing how much freaking gold used to move around the world.

(20:30):
Even like, like I was listening to what the relative value today would be.
And it's like, my gosh, that's a no wonder there was pirates abound, you know?
Yep.
Bandits on the road.
Even in the United States.
they, does gold, I mean, they're still gold miners pulling gold out of the ground.

(20:51):
What does that supply chain look like?
Where does that gold actually end up?
Like mostly going to mince to make coinage or bars and then into vaults?
bars and bolts, yeah.
It seems like a hoarding activity to me.
yeah.
mean, there's a little bit in industrial app.
Well, can melt down an iPhone and get a bit of a bit of gold out of it.
certain, certain electrical applications or yeah.

(21:12):
Yeah, a little bit of industrial jewelry.
But yeah, you don't hear anybody going out and trying to sink a ship to or to take a shipto get the gold anymore.
That's a.
Don't you?
I don't know.
Well, I guess maybe I'd maybe it's not it's just what's ever on the ship.
It's Yeah
a, you have to have like a $400,000 submarine to get what's left or more or $7 millionsubmarine.

(21:36):
I'm not sure.
I'm talking about active piracy, trying to go and trying to go and like sink a ship, like,like they just left a port somewhere to get the gold off of it.
You know, because, because I'm sure it's just like, well, it's well also probably in termsof the size of the ship, it's like one cargo container versus the other, how other many
thousands of containers are on the ship.

(21:57):
Yeah, it's easy to hold because there's only seven people on the boat.
The rest of it's just stuff.
It was easier to take over the ship and to say like, you do whoever owns this ship?
Do you want it back?
I want 20 mil.
That's that's today's pirating, right?
exactly.
And that's also, that's probably easier to spend too, depending.
Yeah, I want it in unmarked Bitcoin.

(22:19):
And then they're like, do you know how Bitcoin works?
Apparently not.
Yeah!
It's the thing is it's all marked on Bitcoin.
Well, how do you feel about the economy today, Dan?
I'm a little dark.
The whole vibe shift, you know, I could get behind because I wanted it to be I wanted tobe manifesting a different future, even though like, there are many things I disagreed
with.
But, you know, more progress for most is something I can get behind.

(22:43):
But it seems we've definitely been sold a shitty bill of goods.
And so now we get to live with the consequences of
whipsawing uncertainty.
And I think with that, businesses have to pull back and consumers are pulling back.
And now we're, you know, we've got this week, 7,000, layoffs at Microsoft, the world,world's one of the world's most well-capitalized and richest companies just laying 7,000

(23:08):
people off.
I'm not judging them for that.
I'm just like, this is a sign of, probably more of what's to come.
and what's going to be happening on the ground.
So it's good to be looking from the top down and it's also good to be looking at what'shappening on the floor.
And those 7,000 people are definitely going to be on the floor.
There's a ton of government, you know, I hear scuttlebutt and sort of, you know, littlestories coming out of DC and like little shops closing or more for rent signs or stuff

(23:35):
like that because how many federal workers have lost their jobs?
Again.
not passing judgment here.
I'm just, you know, seeing what's happening and, and yeah, and then we got consumersentiment from the university of recently, and we have now, kind of matched 08, 09 levels.
And no, at no time previously have we.
This is...

(23:55):
in 08, 09, did it tank?
Did it take for the market to actually fall before the consumer center to tank or wassentiment tanking before Lehman and Bear Stearns?
Do you remember?
Now let me share the...
yeah, even better.
That's the graph.
Okay.
So I think if you look, you know, five, six, seven, eight, nine.

(24:18):
So eight would be right, eight would be like right there, right?
I guess I can't see my mouse.
Oh, there you can.
There you go.
Eight would be like right there.
When did the market crash at the end of 08?
Right here.
towards the end.
So it looks like it was starting to tick up as the market was...
I mean, the market started to have troubles.

(24:38):
was a dip in Q1 of 08 that then there was a recovery from, and then it went off the table,or went off the...
know, is delayed, matches that, but delayed off of that, right?
Yeah.
Yeah.
Which makes some sense.
But now we're this taking up to these levels where we haven't had, I mean, we had a prettygood drawdown, right, that we've since recovered from.

(25:01):
uh
well, I think the real economy is going to get hit here shortly, but.
think I just saw how the negative was flashing a possible negative print.
Um, was it this Atlanta fed I saw this week that they were, it was looking like GDP mightbe turning negative this quarter, which would be in sync with this.

(25:22):
ah
And that's such a, that's such a difficult measure too, because it's aggregating so manythings and it can't always go up.
It's a, it's a question of how many quarters in a row did we have that, um, that, thatnegative GDP going, we, know, we, one, one quarter of GDP, you know, negative growth or

(25:43):
flat is not a recession, but two is.
So, um,
also a good time to enter back into the uh thought process of the hard economy, the thingthat you can measure in the soft economy, the thing you can't measure because psychology
plays a huge role and uh the way people feel can be manifested into reality.
And so I see this graph.

(26:06):
Let me like explain this graph just a little bit, especially for the people who aren'tlooking at it.
This is from the university of Michigan.
can link it in the show notes.
Consumer ant, uh
Consumers anticipate rising unemployment and elevated risks of personal job loss.
This is a three month moving average.
Um, and you have a black line and a red line.
The black line is probability of losing a job during the next five years.

(26:28):
And then the red line is percent of consumers expecting more unemployment during the nextyear.
Both have shot up hard verticals and, um, the dot at which
the data has been collected for the most recent survey, uh there's no dot to match ituntil you go back to the 08, 09 crisis.

(26:51):
um So I would say, are we in an 08, 09 crisis right now?
No, not at all.
But will we be in the next three months, six months?
Well, uh our continued debt issue that we have with also trying to current legislationgoing through House trying to increase the deficit, um the party of fiscal responsibility,

(27:16):
ladies and gentlemen, the party of fiscal responsibility, the party of fiscalresponsibility.
I just keep reminding, just.
Never, not once.
Only Democrats have ever balanced the budget.
And I think some of that is like, would you, this is whole rabbit hole.
Clinton was one that did that, right?
quoting SNL there, but slash Al Gore quoting SNL quoting Al Gore.

(27:41):
Yes.
Yes.
Yeah.
And the debate with Bush, uh, Gore was emphatically saying, we're going to take that,that, that surplus we built and put it in a lock box.
And Bush was, Bush was say, well, we're going to be physically conservative andresponsible.
And then starts a huge war that doesn't allow us to be physically concert conservative orresponsible.
So, um, which is kind of what happens during a time of war.

(28:05):
can.
No need to debate the merits of said war, but yeah, I mean, that's, you know, part of,part of that is there, there was a big event, you know, in, on September 11th that
warranted change in action.
And, and I think that probably as much as anything more than, more than just the, the,party in, in, in power time probably drove a lot of that.

(28:27):
Also we were experiencing in, in, you know, the end of well, and at the end of.
It was the Duff Tan Boom coming out of, you know, the Clinton presidency.
So of course the deficits, you know, there was a better chance of having a, a, a, asurplus rather than a deficit because of the way things were growing and, the tax
structure at the time, you know, since then, of course, a lot of.
Tax laws have been created that I think have probably changed, the, have reducedcorporate, corporate taxation and a lot of corporations have offshored their tax, their

(28:54):
headquarters to avoid paying corporate taxes.
So.
at that.
That's all, that's all contributed as well to even just keeping a balanced budget.
if people don't reside, know, we don't reside their corporations here and we let themoffshore their tax burden, then this is, this is what we have to deal with.
Yeah, I mean, there was one thing that my dad would often say, and I don't know that healways had a like completely thoughtful sort of view around it.

(29:19):
But if you just take it at service level, I'm starting more and more finding myselfagreeing with it.
It's like we've already got enough laws in the books.
It's time to just enforce them.
And was like, and you know, some of this tax stuff, I'm like, yeah, totally.
Like, do we need more tax revenue?
hell yeah, we do.
Do we know where to take it?
I think we do.
And I don't know that we actually have to hurt people all that much.

(29:42):
I think we just have to go collect it.
and you know, living in my little world of Amazon sellers, I'm like 60 % of all sellerspay zero taxes.
So start collecting laws are on the books.
All you gotta do is do it.
And if you want to go kick Amazon in the knees for political gain, because you're apopulist leader, this seems like a perfect way to do it.
Come on.

(30:03):
Here's a tool for you.
Now go, go play it.
you don't need concourse or anything.
It's just the laws there.
You're the executive you're supposed to enforce the laws get to it.
Absolutely.
Yes, absolutely.
We have, we have the things on the books, but then also it takes funding, governmentfunding and, you know, oh support staff to go do, mechanically do those things.
it's nice to say, but then you also then have to say, okay, well, we're going to expandthe number of people in this division.

(30:28):
And that's antithetical to what is the current mission of,
So much of what's going on is like there are perfectly opposing forces happening at thesame time.
It's like, do you even know what direction you're trying to take this in?
it's also like, well, also so much of what you see from any one is, talking about, want tohave an outcome that looks one way.

(30:50):
You know, we want to see a balanced budget and then the actions are taking our counter tothe outcome because they're not aligned with, they're not rationally.
you think through, I, if I go in
reduce our, cut our overall taxes and make the last set of tax cuts more permanent andextend them or expand them, you know, that reduces your revenue.

(31:13):
Okay, now I'm gonna replace that revenue.
Well, we're gonna implement tariffs, I guess, to help replace some of that revenue.
And then they do it in such a way that even if you total up what they can make from it,it's not going to cover the...
touch it, yeah.
the gap.
It's like, well, we're going to reduce our revenue over here by $5 and increase it by $1over here.

(31:34):
We'll be fine.
That doesn't balance.
um that's where it happens everywhere.
You could say whoever's in office, whatever party is in office have similar games theyplay because we're all just so accustomed to hearing what I think wanting to hear what we
want to hear and hearing it that will accept it.

(31:55):
And we don't question it for our own selves.
it's the fundamental flaw in, sorry.
Yeah.
It's the fundamental mental flaw with democracy, right?
Because you're trying to everyone is a voter and at the end of the day, everyone's, to, anextent individually maximizing.
Michael Gurdley had a tweet that I liked and said, build more houses, not near near me.
Train more plumbers, but not my kids reduce the debt.

(32:19):
Don't use my money.
That sums it up well.
That sums it up quite well, I feel.
ah
We're just, you know, whatever.
There's a lot to unpack inside of that.
That would be like a whole civics lesson that I don't think we should even touch orattempt to.
I don't think we're prepared for it.
Probably not, probably not.
Okay, well, mean, anything else you want to say on the current?
I'm with you that I'm feeling a little bit darker about the path we're on potentially,feeling that we're on a path that is fraught with peril, not that we will fall into it,

(32:49):
but that there is a larger likelihood of it happening because of the
elements that are together.
It's, you know, you have these big points in history where
The war could have happened at any time, but it happened at this point in time because allthese things just aligned, right?
Uh, you say that about world war one.
You say that world war two, it, things could have happened at a different time or in adifferent way, but it's, just have the elements around and a chain reaction starts to

(33:14):
occur and you don't know where it's going to go.
And maybe it goes somewhere.
Maybe it goes nowhere.
Maybe a spark happens and, and we see, you know, a few houses burned down, but then, okay,we get it under control and, and save the, save the city blocks.
I, or you have a wildfire that, or a fire come through and just wipes out the palisades.
You don't, you don't know.
it's just what elements are there for, for things to go ablaze and, in a negativedirection.

(33:39):
I, I, again, I don't think it's.
I don't think we're locked to see anything terrible.
It's just that I feel like there's an elevated risk of it and it has me on edge, Isuppose.
It makes me uneasy and that's what sucks.
so in your mind, you're visualizing this like possible off ramp.
That's not, that's, that's, unpleasant.
You know, you, you wouldn't, you wouldn't wish this on anyone.

(34:00):
but at the same time, one of the things that I feel is true is a, is a truth these daysright now is that trade routes and priorities and soft word called friendships.
are very rapidly getting rewritten around the United States rather than with the UnitedStates.

(34:20):
That has me gravely concerned about the future for my kids.
That's, I think that's a very good point that we should all be thinking about more is notwhat does this look like next year?
What does this look like in 10, 15 years, 20 years, because of, because of the thingswe're doing right now that are shifting policy as the policy shifts, what will be the

(34:43):
outcome and how will it impact the future?
Right.
Um, not just next year's the stock market gonna rip is, is it going to then
be stable because we've set up a system where earnings continue to grow because we havefree exchange of ideas and goods and are able to sell into global markets or have global
markets sell into us the cheap goods that we, that we don't want to specialize in.

(35:05):
So we'll see.
mostly uncensored internet the priority worldwide or has the firewalled Chinese internettaken over as like a weirder sort of dark light?
don't know.
I don't think that could completely happen, like as a demonstration of who is the culturalleader in the world.
Well...
world would you rather live in?

(35:27):
Hmm.
I don't think I want to live in the censored world, particularly.
I don't.
mean, ours is a little bit crazy and fraught with disaster sometimes, but I'll take thefree and open any day.
Yeah, at least then we can see what's going on, I think.
Although, who knows, maybe it's just so much misinformation it doesn't matter.
Maybe there's too much signal to know, noise to signal to actually do anything with it.

(35:51):
Yeah.
Like.
in fake information.
It's not even about fake information.
It's just like so much information that at some point you don't even know what is real.
Yeah.
we can't process it and, and yeah, that's a good, good, good, good short one.
Yeah.
83, 84 right in there.

(36:13):
Oh wait, no.
Was it 70 or 80?
Did you say 70?
Ah, let's ask.
All I know, still prescient today.
So what have we got in the hopper in terms of rate cuts for the year?
Make a prediction?
Rate cuts are rate changes, I should say.
shouldn't, I shouldn't,
Yeah, we shouldn't assume it's gonna be a cut, but...
I anchored you.

(36:34):
But you anchored me to that.
1985 on Amusing Ourselves to Death.
I...
Well, you have certain parties putting pressure, trying to get interest rates down asquick as possible, as much as possible to unlock cheap credit, to try to start a new
business cycle.
You have other people worried about ongoing inflation.

(36:54):
And again, we're going to probably see a wave of, it will at least be a wave of, it mightbe transitory, but a wave of inflation stemming from,
something from the tariffs and let's talk about what we mean by transitory.
It's like we get a 20 % price jump and then it's steadies off.
That 20 % price up is five years of in five, six, seven years of inflation put together atonce maybe.

(37:16):
And that's what I think is the, is the big deal.
It's not that it's just, is it, is it a little bit of a
automatically jump at the same time.
If anything, they're going down or like not, not being actively suppressed, but throughlayoffs, like the amount of money in the economy and going back to the economy is payroll
that gets suppressed at the same time prices are rising.

(37:37):
Isn't this stagflation.
Exactly.
that's more of a demand.
Is that way?
What does that lead to?
Is that demand destruction or supply destruction?
Be demand destruction, right?
Yeah.
can still get all my things, just more 20, they're 20 % more expensive and I have to passthat price on or go bankrupt, then I pass that price on.
And then people decide that's too much, I can't pay that and I'll wait to buy it.

(38:02):
Then you've destroyed demand, even though people might still want it, they can't affordit.
but ultimately, so, but, but either way, yeah, with that demand destruction though, it,you'll have from that.
The inflation that we're going to be seeing is not something that can be addressed withrates.
It's not, it's not as though we have an overabundance of demand that people are, can'tmake enough their products that they're selling into frothy markets that they can raise

(38:23):
prices with.
It's that, you know,
really interesting.
So it's a one-time jump created by policy, right?
At the same time, more layoffs are happening.
you could, let's just play the scenario out and whatever we're gonna design the scenario.
Unemployment ticks up and the Fed has two main objectives, steady employment and steadyprices, right?

(38:48):
And if you get a one-time jump in inflation that is a hundred, let's call it 95%.
due to policy.
And it was a one time known jump.
It's measurable.
Not that you can trust this guy to only do one, you know, whatever.
Setting a lot of things aside.
what we call a tolerance band.
Now that tolerance band might be plus or minus 200%, but.

(39:10):
Okay.
All right.
Moving on.
But couldn't you cut rates and expect to not see a dent in inflation in the wrong way,right?
You've got the one jump that's in the books when we've moved on, but then you cut ratesbecause the economy is actually getting worse because you just destroyed demand and people
are getting laid off and you need to juice the economy.

(39:32):
Yeah.
So this is a situation where I was trying to think of like a counterpoint to why youwouldn't want to raise rates.
And the one argument is inflation currently even without tariffs is still elevated.
It's close to three, three, two.
Um, you know, uh, a good chunk above the target of 2%.
Actually, wait, no, it's not a two eight.
I think the last CPI was two eight.
It had cooled a bit.

(39:53):
Yeah.
Um, so it's, it's, it's moving.
It's moved.
It's moving in the right direction.
Yes, it's been moving in the right direction.
So I think that it's appropriate for them to consider another cut here soon.
And with that other demand destruction, I could see more coming.
That's what I was trying to get to it is like, what are the mechanics that are going tolead us to what the fed decides to do?
So I ultimately I'd say by the end of the year, at least two.

(40:16):
Uh, and well, let's not just say two because that's, Oh, is that a quarter?
Is that, I'd say we're going to, we're dropping at least 750 Bips.
You mean 75 babs.
Wait, yes, 75 Bips.
Yes.
No, no, no, no, no, no.
That'd be negative.
Yeah, no, I'm sorry.
We're not Norway or whatever, wherever they had the negative interest rates for a minute.
Japan, yes.
We're not Japan.
No, yes, 75 Bips.
I'm sorry.

(40:36):
Yes, 75 Bips.
I'd say, yeah, I'd say knock three quarters of a point off is where I think we end uproughly by the end of the year.
think like a soft 25 and then they come in harder at 50 and that's the year.
Something like that.
All right.
X that that that that acceleration also I think is
What I like, I worry that they have to accelerate.
That's why I was saying, I don't want to just say two.

(40:57):
think they, I think they have to make one and I think they're gonna have to make anotherbigger one later.
Yeah.
Um, because we're still seeing a lot of this is all of this stuff that we've been talkingabout for the last two, three months in terms of this is lagging.
The impacts are lagging at the beginning of the year.
At the beginning, we were talking about the idea of tariffs.
said, I think we're going to see a 20 % jump in layoffs this year.

(41:21):
Right.
That was one of my predictions for the year.
So far, if you look at JOLTS data, we're up about seven, 8%.
So that when you look at the layoffs, yeah.
So we're, while it's not 20 % year on year, we're, moving in that direction.
And as we approach 20, 30 % jump in that number, things start to get squishier though.
Even with the 20 % jump in the last, we'd still have a pretty strong job market from wherethe current baseline.

(41:44):
it's not, it's not, it's not like doom and gloom.
don't think.
Um, but, but if it keeps
escalating and it keeps rolling.
I don't want to pick up steam.
That's what I worry about.
So I think they I think they're gonna end up having to cut rates harder.
lot.
You gotta listen to the fed guy, the Atlanta fed guy on a lots, because he was talkingabout one of the, you know, I think one of the judgments against Jay Powell is that he

(42:11):
waited too long to act on inflation.
And I believe what this guy said from the Atlanta fed was like what the, the, the fed has,I don't remember what timeframe, but like has decided that we're going to wait to see it
in the data.
We will not be doing any preemptive moves.
And with that being said, and that clearly, since it was spoken words from one of the fedchiefs just last week, I'm going to say still current and active policy.

(42:38):
They're going to, they're going to have to see some.
last month that said the same thing.
Okay.
Yeah, they're going to have to see some like blood in the streets before they startcutting is what I'm afraid.
messaging from the fed that I've been hearing after after the FOMCs as they go do theirpress tours and they show up on podcasts that I listened to several different fed chiefs
have been saying that for a while.

(43:00):
Let me just put it that way.
cut, maybe 50 bits, but then in 2026, they start hurrying it up because again, they waitedtoo long and people are angry.
Yeah, we'll see.
Yeah, that could be that could be because also we're already in we're already in May,right?
So there's not a lot of time left here for
and a half and a half of the years over.

(43:21):
crazy.
But I would not be surprised to see 150.
I would not be surprised to 25 and a 50 depending.
And because I think again, they're going to need to bring down the prime rate so that waycredit loosens up so people can go afford to take, buy the shit they need on credit cards
or on...
uh
doing it on credit cards, but credit cards are, the interest rates are insane anddelinquencies are up, right?

(43:46):
But if you've got equity in your home and the bank is like, yeah, I'll lend it to you, butit's at 11 % or 10%, which for a HELOC, think is, I don't know that that would be a
competitive, maybe it's nine right now, but that's high, you know?
Yeah.
Or people even you wouldn't have to take out a heat lock depending on the situation.

(44:07):
You could just take out a second mortgage.
like straight up, which is, think probably a little bit better rate, but you have to,know, then you have the money all there and you're paying the interest the entire time.
So it's maybe not, not such as good of a deal depending upon what you want to do with it.
But yeah, I could see people if, if, if rates come down, we're going to see, obviously awave of refis.
well,

(44:27):
Wait, wait, wait, wait, wait, wait, wait, no, hold up.
We're making some assumptions here,
Like what?
We're assuming that the back end of the curve is tied to the front end.
What do mean?
Explain more.
So if we, if we, if the fed cut 75 Bips, that doesn't mean 10 year comes down 75 Bips.
Yeah, because we saw the market rip in the good direction, but we also saw bonds go in thesame direction.

(44:47):
that, I mean, something is broken.
that's, that's a sign of bad times.
Um, so, so yeah, you could cut 75 bips and then they say, this is gonna, this is gonnaunlock American spending because there people are gonna be able to go, they're gonna be
able to go refi those expensive mortgages they've got the last five years.
They're gonna be able to take out a second, a second mortgage to get some capital to gofund a new car.

(45:09):
But if the 10 year just stays where it is and the curve steepens, which would make sensein my
That might not happen.
I just, I would just, again, it's, I, yeah.
I could, I think it'll be come down with some beta.
Like if we, if we get 75 vips of cuts, maybe the, long end of the curve come down's 375vips or I'm sorry, you know, 37 vips.

(45:33):
How does that play out though?
Okay.
So the, the tenure stays where it's at or maybe jumps up a little bit or whatever.
And the fed cuts again.
Like what's what does the fed do at that point?
What if the market isn't reacting to their moves?
they start buying.
That's how they've controlled it in the past.
They have to start buying bonds off at the open market to actually drive down price andgrow their balance sheet.

(45:55):
At least as I've understand it from conks, I think that's what happens.
um And that might be a tool and yeah, exactly.
But we also, you know,
Bringing down the interest rates will help us with our, our, our bit of a debt situationthat we have that is looming, that, know, doesn't, isn't in a great spot because it's,

(46:18):
it's looking hard to maintain.
the interest payments are more than our military spending and usually military spending isnumber one.
Yeah, exactly.
Our interest payments are out of this world, which is, I mean, just think about that.
That means every, every dollar we're paying in taxes that are taken out of our paychecksare just going to pay interest on stuff we've borrowed for in the past.
It's, it's, you know, or a growing percentage of it, like 30 % of it is going towardsthat.

(46:42):
think 35 % towards interest, um, which, know, when you borrow money, that's how it works.
Uh, but maybe it means we need to look at what's going on in the front end of that.
And
either spend or generate more revenue, spend less or generate more revenue in taxes.
Yeah.
So yeah, to integrate.
So some of these things we're talking about, like rate cuts might help grow the economyand solve some of those issues.

(47:04):
So it's a very, such a complex system.
It's, yeah.
right?
It's like, will it?
Well, maybe.
You kind of got to diversify your diversify what your the measures you're taking becausenot any single one of them is going to probably be the measure that solves an issue but
you need you know a set of ten things going on trying to address the problem to make ithappen ultimately

(47:25):
a little bit of rate cuts, a little bit of...
weird American exceptionalism leadership, hurrah kind of thing.
And what, what, what other ingredients can we stir in this pot?
little bit of the idea of Doge that actually works though.
uh
isn't a...
hype job.
I wouldn't even call it hype.
It seemed like ideological, like an ideological cleanse rather than, actually looking atthe numbers.

(47:52):
I mean, if you look at, if you look at Alon's ability to cut expenses and do thingscheaply, he has an amazing track record at just that.
So like putting him in charge of that awesome, but it just became an ideal.
In my opinion, it became an ideological purge mostly rather than a, does this make senseor does this not make sense?
and let's cut where necessary.

(48:12):
that's very true.
I feel.
mostly behaves in his organizations.
Maybe not, maybe not in the past two years.
I don't know.
You know, like.
say.
Hard to say.
not close enough for me to say anything, but I can, you know, just, just look at, just,just look at sending one pound into space cost 1964 to the seventies to the eighties to
the nineties to when space X did it.

(48:33):
And it's like, are saving boat.
We the American taxpayers saving boatloads of money because of Elon.
That's a good point because we rely on those things going up into space for so much today.
Yeah.
Like so much of our, of our technology and lives are now related around the communication,you know, with those satellites are getting, cause it's not just, it's not just Starlink

(48:57):
satellites he's putting up.
It's everybody's satellites.
It's everything that's going up on, I'm sorry, not Starlink on, no.
Yeah.
SpaceX is taking us for a link.
Yeah.
Yeah, exactly.
Now we're paying people here to do it, right?
That's great.
I love that.
I love that for America.
Same.
Maybe I don't love his, you know, hatred of everybody at the NIH, but...

(49:19):
Agreed.
Totally agree.
Speaking another of a long term run or long term view, right?
Like we've just shot ourselves in the foot in terms of scientific innovation.
Yeah, there are places where you want waste.
Waste is part of the process.
Yes.
I think there's a lot of waste in science and that's part of the process.
It's yeah, because you, you have to stumble upon the right combination of things.

(49:42):
You're not, it's not like you have a guidebook there saying, well, if I put these stringstogether and become with a new invention, no, have to stumble your way and iterate through
it.
It by nature is somewhat wasteful, but there are a lot of, there is a lot of bad scienceout there with, you know, what they call P hacking and basically working your way through
a set of, a set of trying to come and say, I, my ultimate objective is to find somethingand figuring out a way to.

(50:06):
But cutting the budget of NIH isn't going to fix that, right?
Like we need to fix the incentives and start like actively shutting down bad sciencerather than.
Again, this goes back to a conversation that we've had a couple times and it's beenhappening for a long time now.
These people are throwing grenades in the room.
And with that, if you're doing the siege on Prince's Gate, you're gonna hit hostages andthe bad guys.

(50:34):
You're being indiscriminate with how things are going.
Anyway.
point I feel like it started, it's not, it's not longer grenades.
They're starting to become landmines, where you're going to walk into a trap later on thatwe've set for ourselves.
We don't realize it.
Like it's not blowing something up now.
It's blowing something up in the future.
That's good, yeah.
Well...
It's having a hard time putting this into the bucket of creative destruction because Ithink it's not.

(50:55):
Yeah, exactly.
It's creative something.
Cause there was a whole bunch of things that I and many people were legitimately scaredof, but I really tried to suppress a lot of that and be like, you know what, create a
little creative destruction.
You know, there's like, we're going to lose some good guys along with the bad guys.
Like this is just part of reinvention and re-envisioning.
And I just so badly wanted to be, wanted that to be part of it.

(51:19):
But, um, that was me trying to be an optimist or I don't know.
is you trying to see the, you think your system that is so complex can change maybe, andmaybe it just can't change effectively.
don't know.
no, that can't be true.
We just didn't seem like, yeah, well, I wonder, and, you know, I don't have the insightfor it, but I'm sure in a few years we'll get a couple of good books around the changes

(51:46):
that we're trying to be made.
And like, look forward to the post-mortem and saying like, ultimately what stood in theway of meaningful good changes happening.
Like obviously there's a lot of changes that people would argue and I would probably agreewith that are not so good that are being tried.
But I think you, anybody can say about any change.
Um, but like it just seems like there's a lot of changes that have been tried that aren'tever to, aren't ever able to actually be put in place.

(52:10):
And I wonder what.
Not again, I don't want them to go in and gut every department and remove everybody's job,but.
But like, is it that's standing in the way of certain change, I suppose?
Like, do we have the system structured improperly and we need to look at how certainsystems and agencies are structured?
I don't know.
I mean, I can't help but to agree with you.
mean, if we, if we functionally want the government to be smaller than I think one, it'sgoing to involve hard decisions and two, it's going to involve a little bit of, you know,

(52:38):
like I felt like the headlines were pretty, vindictive around like, well, Elon's Doge likefired all these people and then they hired to had to hire four of them back idiots.
I'm like, that's kind of, that's kind of part of it.
Right?
Like I was like, found something that broke.
Let's grab these four people, let's get them back in and they're actually going to be in adifferent apartment because we've, you know, this.

(53:00):
you, if you fired 10 and had to rehire for that's probably pretty good success rate or Idon't know.
that maybe not on.
Yeah.
Right.
It's probably percentage points, not.
of an organizational change where it's just like, you know, the person got fired that youthought was like, there's no way we can fire that person.

(53:20):
They know too much.
And then they're gone and everyone's got to figure it out.
And it's scary for a little while.
And then you figure it out.
You have seen my share of those.
Some of them more recently than I would care to admit, but as recently as two weeks ago.
But yeah, you move on.
this, tie this in with Michael Lewis's newest book, which I just heard about.

(53:40):
listened to an interview with him and, I think it's called like how, or what isgovernment.
And, he wrote the fifth risk a long while back and that was a really fun, good read.
thought I enjoyed it a lot.
And, now he's, he's back sort of investigating the government again and finding thesecharacters who do absolutely amazing work and they do it for us.

(54:01):
Right.
It's.
Yes.
His lens through this and the stories that he finds makes you proud of our federalgovernment and the people that it employs.
So I think a little bit more of that.
Five or six or something like that, yeah.
Okay.
Yeah, I heard about that as well.
and it piqued my interest and you mentioned, mentioned it and I'm like, okay, I probablyneed to go ahead and read this.
It's popping into my zeitgeist.

(54:22):
So, I'll put that on the queue for sure.
yeah, same, same.
I haven't started it or anything, but it's on my list.
Yeah.
Have you been reading anything lately, Dan?
I did and I just kind of mentioned it because it was in my head, The Siege by Ben McIntyreand it's about the Iranian terrorists from Arabistan, which is like the southwest corner

(54:45):
of Iran, that's an Arab section.
And anyway.
This is back in 70s or 80s or something like that.
I don't have the dates off the top of my head, but it's a, so the terrorists take over theIranian embassy in London and they hold everybody hostage and then things deteriorate from
there.
And I think the SAS goes in and takes out the tangos at some point.

(55:08):
Ben McIntyre writes really cool spy, real, real.
It actually happened in history uh books.
this one was, yeah.
I needed something with action.
I desperately needed to not read for my mind.
I needed to read because it was fun.
And so this is what I picked up.
My consumption of books has been way down the last month.

(55:30):
I've been busy and then in podcast land has been particularly active with stuff I've beenwanting to listen to.
sometimes I'll, yeah, not, yeah, I want to hear, well, I mean, I've been listening to oddlots.
They're increased production cycle.
Yeah.
So, yeah, so there's been a lot to say that they've been tapping into that I've beenwanting to hear.

(55:51):
Um, uh, the, Ben, um, Ben Williams and Dimitri Kofinas podcast that you shared the, uh,the a hundred year pivot grant Williams, grant Williams.
Um, I've listened to the first three episodes of that now, uh, as well that, that kind of,yeah, the, piece of the episode with, uh, Neil Howe, um, was, was just wonderful.

(56:14):
I rec I will put that in the show notes.
recommend that that.
to anybody who is a fan of The Fourth Turning, because it's him talking, one of thewriters of The Fourth Turning, talking about his thoughts on it and how he sees it playing
out in real time.
And I had a lot of interesting perspectives that I cannot possibly put as elegantly, so Iwill just point you in that direction.

(56:35):
And then Russell Napier was the other episode that I was pretty good, talking about...
good.
gets a little bit more in the weeds.
I guess they're all sort of in the weeds.
Those, the hidden forces podcast.
It's a little in the weeds.
So if you're not prepared for, yeah, Russell Napier can really, interesting guy though.
Yeah.
yeah, I had a couple of spots.
I had to go back and like rewind and say, what?

(56:57):
I don't think I understood the meaning of that.
So yeah, I've been listening to a few more podcasts on my commute than lately where I knowthat down an audio book, just as things have been interesting and, you know, we're living
through exciting times and, and possibly events that will be, you know, written about in away in the history books that not every year has events that are like this.
I don't think.

(57:18):
It sometimes feels like it does, but I don't think so.
Why does it feel like I've been feeling that way about life for the past five years?
That's a hell of a good question.
my, I just think about the 2010s and how I just did stuff and I lived my life.
I went to work and things were mostly pretty good.
And then it's gotten a lot harder.
mouths to feed that make everything maybe a little more raise everything to a differentlevel of your consciousness or, or, know, the late 2010s, we had the Trump presidency,

(57:49):
which was exciting for Trump one was exciting to say the least.
But then, you know, we had the pandemic and then it feels like from the pandemic, we hadthen inflation.
forward, we just have had these, you know, once in a life, like, what do you want to callit?
Like a little, like, like it's a period where it's like, wow, we had a pandemic and thatwe haven't had that since 1918.

(58:12):
And now it's like, we have a potential economic pivot, let's call it.
We don't know exactly what's going to happen that is possibly once in a lifetime kind ofthing.
I'm just here to tell you I'm exhausted.
I just want to lay my head down.
I feel you, I am there myself with some of the cycle.
Is it that we're in an ecpyrosis?

(58:33):
Is that why it feels this way?
This is what the...
know, I was just thinking, I think I thought this before you and I met during ourtechnical difficulty record.
Going back to Natalya's tweet of the fourth turning is over and both of us going, hmm?
Yeah, yeah.
And I'm like, nah, it's like, nope, still like to end pyrosis.

(58:54):
I should go find that and just retweet it like this age 12.
uh
I don't even want, like I'm not even trying, like there's zero parts of me that like,yeah, like I'm not trying to win anything.
I'm like, that is, that was a take and I can completely understand why there are, therewere a number of people that felt that way, right?

(59:17):
He was not alone at all.
And even me reading it was like, I'm like, I don't think so, but like there is room for itto be true.
And, but now I'm like, nah, dude, it's just been whack-a-mole since.
yeah, it's always a possible outcome.
But again, I don't think I didn't see it because I didn't see that we've had thatconflagration, that burning of, of the event that brings us together out of it.

(59:43):
Yeah.
There there's gotta be something that causes cohesion coming out of it.
And that could be going into a really good period of great economy where everybody's,everything's just going great for everybody.
And then maybe that's what brings it together.
Sure.
But it doesn't seem like that's what's happening right now.
know.
call me cynical here.
I kind of don't think good times can do it.
I think there's gotta be some bad times.
The question is, is how dark do they get?

(01:00:04):
Damn it.
I was really not wanting to land on that.
And yet, and it's just, you know, one of those weeks, Dan, where things are choppy andit's causing us some worry, I think, based upon.
I think so.
you know, choppy is the right way to or the right word.
I think about, you know, swimming in the sea and are you letting the sea crash upon you orare you surfing the waves?

(01:00:28):
Or somewhere in between of I am at least taking agency and trying to get on the surfboard,even though the waves are still crashing upon me.
It's a gradient.
It isn't binary.
And I don't know where where are you?
Man, lately I feel like I've been just trying to float on top of the water and just keepmy, like, as calm as I can without trying to fight against it.
Because fighting against it is just going to wear me out, wear you out, and you drownsooner.

(01:00:52):
persists.
something like that.
So it's not that I want to go along and necessarily swim along with the current every day.
Or again, choppy seas, it's up and down, up and down, right?
You just gotta try to ride it out and not wear yourself out or not let your resources getworn out, whatever that means.

(01:01:12):
Yeah, having the energy reserve to strike when the opportunity is presented.
Yeah, because you're gonna get some big swells and some big dips and when things areparticularly tumultuous and knowing what to do when you're at a peak or a valley of that
local minimum maximum, I think is what is important.

(01:01:34):
Yeah, I'm shooting myself in the foot for not having...
gone in and hit the buy button a little bit harder, know, middle of April when things weresuper cheap, I was thinking, it's almost there.
But I think we got a little more.
And then it came back up, like, okay, I could, it's.
talked about like the data hasn't hit yet.
Yeah, that's what I, that's what I keep coming back to is we're it's the time it like.

(01:01:57):
sold, sure.
But I don't know that I would have bought and held.
I think there's more to come.
yeah, right now buying like at this point holding for another month or two is probably, Ithink would be, yeah, good work because it's, think we're going to see that data come
through Q3, Q4 really.
Well, like that doesn't...

(01:02:18):
October seems to always be a scary month in the market.
October surprise.
I think that's also about the time that we will see, begin to see that if demand is stillstrong.
spotty supply because a whole bunch of people just didn't buy like a whole bunch ofbusiness owners didn't buy anything.
couldn't afford it or well or just didn't yeah exactly didn't know

(01:02:38):
You're telling me that I'm going to go bankrupt if my boat arrives at a particular time?
Then I'm going to choose not to go bankrupt.
So that's either don't order or commit tariff fraud.
Those are your two choices.
If you don't order.
Now they had three choices.
did like not ordering like ends up just seeing like another quick path to bankruptcybecause then you don't have any thing to generate revenue with.

(01:03:00):
You're still gonna have some base level costs.
Yeah, you're just maybe trying to minimize or delay.
No, think I do.
I already believe that we will see a spike in bankruptcies and we will see a spike insuicides.
I don't know that it's going to be as big as I would have bet a couple of weeks agobecause of the 90 day moratorium we're currently in.

(01:03:20):
But a little 90 day pause like this means absolutely nothing for certainty.
You're right.
It, if anything.
I put in an order now, which it seems like everyone has, like orders went up 227 % orsomething like, or shipment, boats on water went up 227 % or something like that.
That doesn't, since the actual liberation day.

(01:03:42):
Because they dropped way off to zero almost.
Right?
Yeah.
Cause the fentanyl is still there and then the base 10 is still there.
I think it's a 30 or something like that.
anyway, since that, since that, right.
Okay.
Cause I will, I will.
No, I mean, well, they dropped, I've said the shipments dropped all the way off, right.

(01:04:03):
From like fully.
Yeah.
60, 80%.
So they've come up several hundred percent from that level to a little bit up before thelevel before to kind of make up the gap supply gap.
you know, I'm piecemealing.
I'm piecemealing data together.
It'd be interesting to get a graph on that to see, is that, is this current rise, get usback to pre actual Trump labeled liberation day levels or not.

(01:04:28):
I want to see that graph so I can look just like the area under the curve because if thearea under the curve is neutral then this all washes out in three months in terms of
supply.
Yeah, maybe.
or six months, I'm saying in terms of supply availability, but it'll be the true.
And who's supplying and what's supplying and what's at what cost, so.

(01:04:49):
listen, the CFO of Walmart was on CNBC this week saying, you know, we're pretty good athandling 3 % price increases.
Like we can handle that in our system.
Well, we can't handle 30 % price increases, which is what we are seeing.
So they're the people they buy from.
are increasing prices.
Exactly.
buy a lot.
Because you have to

(01:05:11):
they buy from it's the the it's the prices on the for the tariff, right?
It's not like the not other suppliers are actually raising prices.
It's Yeah, the cost the costs are the costs to deliver for delivery the delivered thelanded costs have gone up 30 % you whether it's from
whether there's a middleman on that purchase from Walmart or if Walmart is directing themanufacturer.

(01:05:32):
Mm-hmm.
The landed costs still went up.
It doesn't matter.
doesn't magically just not get paid.
Yeah.
And if there, if there's middlemen, it probably went up more because you end up having amarkup that's applied onto the costs and that markup can be, you know, can compound, can
be multiplicative.

(01:05:53):
So you, you never know.
well, no, you do know it's going up.
Yeah, yeah, yeah.
It's going up.
Yeah, I heard some of that interview and saw some of the things that were said after thatin the media about certain people in certain offices were saying that they should just eat
the tariffs, which seemed improbable looking at actual Walmart's margins.

(01:06:16):
to put it, another way is to say that the math doesn't math.
Yeah.
What you're wishing for is your, you know, the people saying that stuff and people feelingthat stuff.
What they're actually saying is I want my Christmas tree to be empty because if absolutelyeveryone in the economy is not allowed to make a profit, then there is no economy going

(01:06:36):
back to how we opened this discussion.
exactly.
There's no motive for anybody to do anything for anybody else.
There's no reciprocity.
There's no trust.
The network breaks down and everything goes.
And that's not to say that there are certain people who are profiting too much and thereare certain people who are profiting too little, blah, blah, blah, blah, blah, blah, blah.
This is all part of it and this is part of market mechanisms and a lot of times overperiods of time, sometimes short, sometimes long, things even out and get a little bit

(01:07:01):
more fair.
If you're just wishing for everyone to dissolve themselves and pay the government fromtheir own pockets of money that they don't have because their profits are now negative,
which is how like lots of small businesses or extremely thinly margins companies like whatI imagine Walmart to be.
haven't looked at their margins or grocery stores, for example, like they're sitting on 2% margins, you know?

(01:07:24):
Yeah, you can't.
That's not gonna fly.
That doesn't make the economy spin.
That actively makes it stop.
operating margin in 2024 was operating margin 4.3%.
I'm looking for their gross margin.
So you, you raise cogs by 30%.
Where's that coming from?
Mm-hmm.

(01:07:44):
Yeah, exactly.
Because most of the most, not most, but a significant portion of their costs are cogs.
They have obviously...
take a $1 salary and you have not even made a 10th of a percent difference.
Does not matter.
nobody would notice.
Nobody would notice.
talking billions of dollars in tariffs.

(01:08:05):
They collected like 16.8 over that time.
Billion.
Jeez, wait, how, period of time was that?
A month, month and a half?
Okay, but that's, and still though, take that, multiply that out times 12, that's 600billion, and that's still 4.8 trillion shy of making up the budget deficit.

(01:08:30):
Give it, give or take?
Shit.
Let's say I'm off by half.
Crazy.
The sheer magnitude of these numbers is, and here I am just like, can I just make an extrafive grand a month?
Like, that would change my life.
Yeah, right, right.
Well, when you have 360 million people all contributing to these numbers, it becomes alittle more balanced, but.

(01:08:55):
million of the most wealthy people on earth.
Or maybe wealthy is wrong word, but at least high income.
Yeah, the what is the right?
I mean, doctors make like 55 K in the UK, right?
Like, I don't think people realize how depressed salaries are for certain things in on theEuropean continent.
They just kind of think it's like the United States over there and it's, it's deeply,deeply not like the United States.

(01:09:19):
Mm-hmm.
What like that's an interesting thought you've given me around when we define wealth, it'sis it it salary?
Is it the is it the optionality that is provided like the opportunity costs of of of whatwe do with our time because of the favorable, you know, exchange rate we have on our time

(01:09:40):
to a currency.
Basically, everybody here, because it's our currency, that's the global reserve, we havethe best personal time exchange rate to gain that currency.
It's not going through as many intermediaries.
Yeah.
whole bunch of global stuff comes our way.
And if, you know, everyone at Google is making 150 or more, and now Google employees arescattered across the country and don't use Google as a generic brand that covers all kinds

(01:10:08):
of like knowledge workers and stuff, right.
And financial firms and so on and so on and so on and so on.
There's a bunch of people that make really hefty upper middle class sort of livings andthat.
Is a lot of money just in the system and going back to you want to fight class warfare ordo you want to recognize the fact that we've made the economy bigger and therefore the

(01:10:30):
floor is higher.
That's a good question.
Very good point, I should say.
I'm not saying it's all good and rainbows for everyone, but nor will it ever be.
Um, but if we all get it to others throats doing class warfare, then, um, you might aswell just go back to like Romania in the 1980s, you know?
Not good.

(01:10:51):
Not good.
Uh, doctors in the UK start at around 37,000 pounds, which is,
49 grand.
Now I can go up there with specialization and experience, but just a little tidbit of likethe disparity.
School teachers in Houston make more than that starting off.
Bye.
think people that these are to me, these are interesting numbers because I think peopledon't realize now granted taxes are way higher and there's a whole bunch of expenses that

(01:11:15):
we all as Americans have to pay for because in Europe it's all provided.
Um, so, uh, you know, there's a, how does it balance out question, which is extremelycomplicated and complex to answer.
And I recognize that, um, you know, if you're in the Netherlands and 55 % of your.
or your, yeah, Netherlands, I don't know, 55 % of your money is taken by the government.

(01:11:38):
You're not left with much, especially if you're starting salaries much lower, but you'renot worried about healthcare and a whole bunch of other things.
So I just did a little search here.
So in terms of the top 10 countries ranked by median annual income when you adjust forpurchasing power parity, number one is Luxembourg.

(01:11:58):
Mmm, financial services there.
Yep.
Number three, Norway.
Kind of surprised me.
Oil, yeah, a lot of oil and fat drugs.
No, no, that's Copenhagen.
That's Denmark.
Right?
Norway, is Denmark.
Okay, I'm sorry.
thought it was for some reason that was Norway.
Okay, yeah, my bad.
Number four, Switzerland.
I guess the chocolate, right?
It's just the chocolate and the knives.

(01:12:20):
That's, that's, yeah.
Yeah.
And do they still have a thing where you can pay to move there?
I don't know if that's active or not.
Yeah.
And then number five is the United States.
So we're number five on the list of the top 10 in terms of median annual.
And the other ones are tiny compared to us, right?
highly specialized, right?
Like Luxembourg is just a, it's a tax haven, UAE tax haven.

(01:12:43):
So it's just where rich people go to hide money.
That's it.
And then Norway with oil.
Yeah.
Yeah.
Yeah.
But I'm, yeah, I'm not saying you're not right, but yeah.
I think, the way they're trying to position the economy as oil runs out is.
We are going to invite a whole bunch of rich people here and they can not pay taxes.
They have a giant duty free zone where people can move in and build whatever they want andsell it wherever they want and not have to pay a tax on it.

(01:13:08):
It's a.
Back when I flew through that airport, was 2014, I want to say, there was a Porsche forsale in the airport.
And I'm like, who, who and how?
Like, do you just talk to the guy and be like, yeah, I live in Denver.
Have it at my house when I get there.
I was curious, I was like, this is exemplary of what's going on here.

(01:13:33):
Wait, was it at the duty free shop by chance or was it,
There's not a pedestal and it's for sale.
was for sale.
It was a Porsche Cayenne Turbo.
Uh, that's the.
I wonder how many they sold through that airport.
I deeply wanna know, yeah.
I just figured like maybe I'd fly through there again one day and I'd be like, huh, here'sanother car for sale, so it must work.

(01:13:56):
But I haven't flown through again, so I don't have any closure on that.
Okay, well, I'll let you know if I get to go.
Yeah.
Interesting.
Yeah.
So anyway, I don't know how we got immediate incomes, but yeah, I think, I think we've,we've talked about all the, all the important things I had to talk about on the economy
and got, I've gotten my feelings out.
It's, it's scary times where we're all in an interconnected network that is very tentativeand shifting, shifting sands and

(01:14:22):
The promise or threat of change is intimidating, right?
Yeah.
And I think on our last episode, I said something like, you I'm sorry that, you know, I'mtalking about tariffs and all that again, but it's like 90 % 90 % of my job now.
And I still feel that way, like trying to figure out where we're going and what is and isnot true is now like 90 % of my job.
so until that changes and we go back to the land of like, I know what the system is andwhat the system designers want from me until we get back there.

(01:14:51):
Um, being a small business owner, this is it.
It's
political and macro focused.
It is not nearly focused on the business as you might think.
at this, you know, from our lens of what's impacting our lives as, you know, entrepreneursand in business.
And these are the things that are in those lives, in those lenses, playing, just causingmassive shifts and massive changes.

(01:15:12):
You know, in my workplace, we're just seeing so much shifting, changing, restructuring,repositioning, all as a result of these things.
And, you know, the effects are real and are just starting to come through in the big data.
And I think let's try to maybe avoid talking about tariffs till after the middle of Junewhen maybe we have a little bit more big data out there in the world, but we'll see.

(01:15:33):
I don't think I'm gonna have anything else to say until we start getting some new data andto see what the next step is.
It's right now, yeah, more of the same.
saying the things that I still feel.
Every day.
Yeah, but still, yeah, we'll come up with something.
Yes, we will.
Well, thanks for tuning in everybody for another episode of Unqualified Advice.

(01:15:56):
ah We'll see you next time.
Yeah.