November 11, 2024 • 32 mins
In this episode, Brian Wesbury discusses the implications of Trump's recent election victory. Recorded the day after Election Day, Brian explores potential changes in economic and tax policies, providing insights into the future economic landscape.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ryan (00:12):
Hi, welcome to this episode of the First Trust ROI
podcast.
I'm Ryan Isakainen, etfstrategist at First Trust.
While we're recording thisepisode the day after election
day, I'm very excited to haveBrian Westbury joining me once
again for the podcast.
Brian and I will discuss theimplications of a Trump victory
in this election, what he thinksis likely to happen with
(00:34):
economic policy, tax policy anda number of other things.
Thanks for joining us on thisepisode of the First Trust ROI
Podcast, brian.
Thanks again for joining us onthe podcast here.
We are recording this the dayafter Election Day it's November
6th.
We're going to post this onMonday, which is November 11th.
As it stands right now, itseems like President Trump, or
(00:58):
President-elect Trump, will betaking power in January.
The Senate flipped to theRepublicans.
The House at the time thatwe're recording this is kind of
uncertain, but it seems toSenate flipped to the
Republicans.
The House at the time thatwe're recording this is kind of
uncertain, but it seems to beleaning to the Republicans.
So I guess my question for youis if you were advising the
incoming Trump administration onwhat they could do to have the
biggest impact right away froman economic policy standpoint,
(01:21):
what advice would you give them.
Brian (01:22):
Yeah, this is, I mean.
What happened is huge.
It was a landslide victory, andwe haven't seen one of those
since, basically 2012, withBarack Obama, and the results
are astounding to me.
I mean, new York State iscloser to being red than Texas
(01:43):
is to being blue.
That's amazing, and so I wouldargue that he got a mandate, and
the question is, what's thatmandate for?
He clearly talked about cuttingtaxes.
I always believed that KamalaHarris wanted to be the Santa
Claus that spent and gave moneyto people, and therefore Trump
can't be quite the anti-SantaClaus like and say we're going
(02:07):
to cut spending even though hehas.
Elon Musk and all that, but Ibelieve that we're going to come
back to that.
But you have to be a SantaClaus, and what his Santa Claus
was was giving tax cuts.
So tip workers, social Securitypolicemen, firemen, overtime
teachers, like I think, the onlyperson that didn't get a tax
(02:29):
cut under his proposals was me,so he's more of a robin hood
than that.
Maybe he's like giving, givinglike money he's just letting you
keep more of your own.
But I think that one of thebiggest things he could do for
the markets is to propose tomake his tax cuts that he put in
in his first term permanent.
And that's going to be a bigfight.
We're going to talk about theSALT deduction, the state and
(02:51):
local tax deduction.
There will be some compromise,depending on how the House
really shakes out.
The second thing and this,actually, I probably should have
said first in his first term Imean, people didn't think he was
going to win.
He might not have even thoughthe was going to win.
In other words, when he went in, he wasn't prepared to govern
(03:13):
and really grab control of thereins.
He didn't get people in theright spots and Congress kind of
hijacked his agenda and wentoff in their direction.
So this was Paul Ryan and MitchMcConnell.
This time that's not going tohappen.
What I've heard him talk aboutis he wants to put in tariffs,
he wants to cut taxes and hewants to put Musk in charge of
(03:36):
spending.
So I'm only talking about notRFK Jr and a healthy America,
but the economic policies, and Ibelieve that's what Ronald
Reagan did got spending undercontrol, cut taxes, and then
Trump wants to have the Fed cutinterest rates, and I'm sure
we're going to talk about thatwith inflation.
(03:56):
That's not what Reagan did.
He let Volcker raise rates, butthe combination of a smaller
government, lower taxes andtight money actually made the
economy boom, and I would hopethat's where we go.
It's not clear that we getthere, but if you wanted to have
the most immediate impact, it'sto make sure that tax rates are
(04:17):
lower and that the tax cutsthat are scheduled to expire at
the end of the year don't cutsthat are scheduled to expire at
the end of the year don't,because then you will encourage
more investment.
And I think by the way, that'skind of what the market is
saying right now that thesepolicies are going to be a
little bit better for the market, and we'll see how long that
(04:38):
lasts.
Ryan (04:38):
So I want to stay on taxes for a moment.
As you mentioned, theindividual tax rates that he put
in in the first Trump term areset to expire at the end of next
year, which is 2025.
So do you expect that he willjust kind of lock in what was
already passed and maybe try tomake those permanent, or will
(04:59):
there be some marginal decreasesin the tax rate as well?
Brian (05:03):
He wants to cut corporate tax rates a little bit more?
Yeah, and those are alreadypermanent though, right.
Ryan (05:09):
Those are 21% corporate tax rate.
Brian (05:11):
That's not permanent, because at the end of this term
they would have gone at the endof next year.
Ryan (05:17):
Everything was going back to where it was.
Oh, I thought the corporatewere permanent and the
individual were temporary.
If you're right and I'm wrong,then I'm willing to admit it,
irrespective.
Brian (05:26):
But I think he wants to cut it.
Vice President Harris wanted toraise it and so I think part of
the rally in stocks is a littlebit of relief from both of
those.
One we could have a lower one.
Number two we didn't have ahigher one, so that's good news
for the market.
Corporate taxes should be zerobecause we double tax corporate
income and it shouldn't be donethat way because we tax capital
(05:50):
gains, we tax all the money theypay out, we tax everything, and
so we should cut those taxes.
Number two the SALT deduction,which I think that should be
zero.
It's $10,000 now.
It really does like cost peoplethat live in high-tax states
(06:11):
more.
It encourages those states notto raise their taxes as much,
but it's likely to slip a littleand in negotiations you want
those high-tax state senatorsand congresspeople to vote with
you so to make those tax cutspermanent it's going to take a
lot of votes and I think they'regoing to have some negotiating
(06:31):
to get that done.
Ryan (06:32):
So in my self-interest, I'm kind of hoping that they
raise the self-deduction as aresident of New York State, but
I do understand the argumentthat it would maybe restrain
spending somewhat, although I'mnot sure that we've seen that in
New York State Right exactlythe other part of tax policy
that the incoming Trumpadministration has talked about,
at least during the campaign,was tariff policies and putting
(06:56):
increasing tariffs.
I'm wondering what yourthoughts are on tariffs in
general and maybe morespecifically as it relates to
the incoming administration'spolicy, Because I've heard you
talk before about the GreatDepression and the Smoot-Hawley
tariff act and how that wasextended what was something bad
already to make it even worse.
(07:16):
So talk a bit about tariffs.
Brian (07:19):
Yeah, the analogy I would use right here is kind of COVID
.
So one of the things that makesan economy, or a free market
economy, so strong is thedivision of labor.
You know, I don't have to be aplumber, I don't have to be a
carpenter.
We all specialize and, as aresult, we become more
(07:42):
productive as a unit, as anation, as a world.
And that's what free trade is.
It allows the world to be moreproductive.
So I have always been a freetrader from that point of view,
just like I'm a free trader froma free market point of view.
And specialization, a divisionof labor, covid.
(08:02):
When we locked everything down,you could see what happened to
the supply chain.
Well, if you close down worldtrade, you're going to get
similar things happening,because all of a sudden, stuff
that you bought from overseasisn't available and you can't
set up factories and producethings overnight.
And so if, let's say, we wereto put 100% tariff on everything
(08:25):
, are we really going to, youknow, the next day, be able to
produce all these things that webought from overseas?
No, it's impossible, and youcan see it.
During COVID it didn't happen.
We ended up with shortages andall kinds of supply chain
problems, and that's what wouldhappen.
So that's why Smoot-Hawley waspart and parcel with the Great
Depression tight money, risingtaxes and tariffs.
(08:49):
Now, having said that, china isan unfair trader, absolutely,
and in fact the proof kind of isin the pudding because Trump
put tariffs on China, presidentBiden left them in place,
actually made them a little bitworse on China, and so I
completely agree with them.
One of the reasons that we oneof the things that we need to
(09:10):
think about with free trade isthe United States is heavily
dependent on China in a lot ofcases for pharmaceuticals, even
things like Advil and Tylenol,but other pharmaceutical
products and military, likeheavy metals and steel and
(09:31):
things like that.
And semiconductors.
Yeah, and semiconductors.
And if we can't get thosepieces that we need to survive
if we were to say, get in a warwith China, that gives them
leverage over us, and so I thinkwe should do everything we can
to take that away.
Plus, they're not fair traders.
They steal intellectualproperty rights.
(09:52):
We know they're now spying ongovernment officials.
I mean, anyway, I've made mycase.
If you raise tariffs across theboard, you ruin the benefits of
global trade.
And there are a lot of benefits.
I mean, Canada and Mexico areour two biggest trading partners
and they're our friends andthey're not going away.
That's one thing.
Second thing is kind of themechanics of this, and maybe
(10:14):
this will shoot any job that Icould.
You know, they might ask me tocome do for Trump, but we only
have $4 trillion in imports.
Have $4 trillion in imports andif you tax them 100% and
nothing changed, we would onlyget $4 trillion in revenue and
we spend six and three quarters.
(10:34):
So it wouldn't fix the problem.
And the only time in Americanhistory where we funded
ourselves with tariffs andexcise taxes was when government
was 2% of GDP and it's now 24%of GDP.
You can't do it because if youraise tariffs to 100%, global
(10:55):
trade would shut down.
You would never even come closeto $4 trillion in revenue.
I mean, who knows what would beleft?
I guess there'd be some peoplestill drinking Bordeaux wine
because they love it so muchthey don't care how much it
costs.
There's not many things thatwould trade if you put 100%
tariff on.
So I get the concept and forChina I think it makes a lot of
(11:19):
sense.
But trying to fund governmentthis way it's not going to work.
Now I want to make one otherpoint, though.
Tariffs are basically, when youget down to who really pays
them and to the nitty-gritty,they're a tax on consumption,
(11:39):
and so we always have a choicein any economy.
Do you tax people when theyearn the money?
And remember, the only reasonwe work is to be able to spend,
and so you can either tax itwhen people earn it or when they
spend it.
And I've always been a believerthat taxing consumption and not
(12:00):
income is the most efficient wayto run a tax system, because
you can basically decideyourself whether you want to pay
taxes or not.
You could be a busboy or adishwasher in a restaurant, live
in a cardboard box in the alley, eat all your meals at 60% off
in the restaurant and save everytime you made, and open your
(12:22):
own restaurant, and so becauseyou wouldn't have paid taxes on
that, because you never spent it, and so.
But if we tax income, you don'thave that option.
You don't have a choice.
And so if we're moving towardmore of a consumption tax,
awesome, but if we do that, wehave to get rid of the income
(12:42):
tax.
Now, what I just proposed ismassive.
It would be radical change itwould be radical change, massive
change, and I highly doubt theTrump administration would spend
that much political capital ingetting there.
So I'm not telling you that'swhere we're going.
But if talking about tariffsmoves us in that direction, to
(13:04):
thinking about the tax code, I'mall for it.
Ryan (13:07):
Yeah, You're right, I think tariffs go into the price
ultimately and it's almost likea consumption tax on those
specific imported goods.
And if you had maybe a highertax on the imported goods but
you still had a consumption taxon the domestic goods, it sounds
amazing.
Brian (13:28):
It's too much political capital to get there.
I mean, it's a massive changein our tax code.
Ryan (13:34):
The other side of that, of course, is spending, which you
mentioned.
Elon Musk is apparently beingtasked to be the DOJ the.
Department of GovernmentEfficiency is kind of what
they're talking about.
Yeah, and I don't know if youread his biography where it
(14:00):
talks about some of his privatecompanies, the way that he would
just strive for efficiency andcut to the bone and he basically
made the case that if you wantto cut more than you actually
should, and then you can addthings back and that's kind of
the operating philosophy for alot of the Musk companies, right
, operating philosophy for a lotof the Musk companies.
I wonder if that will beactually brought into government
, because that seems reallydifficult to do.
One you know, you got to findsomething for all those people
(14:21):
to do if they're looking forjobs.
He actually said in I think itwas with his Joe Rogan podcast
interview that he would want tocontinue to pay those people for
a couple years, which I thoughtwas kind of interesting.
You fire them, keep paying them.
It doesn't actually cost thegovernment more, but those
people get out of the way.
And then the other side, ofcourse, apart from spending, is
(14:43):
decreasing the regulation.
That's a long question, brian.
What's your thoughts on that?
Brian (14:50):
I and we as the First Trust Economics Department, have
kind of used the four pillarsof prosperity to describe the
risks to the economy and themarket.
And the other side of the coin,there's four pillars of
prosperity, four pillars ofdestruction, and so you go back
to the Great Depression.
What did we do?
(15:10):
We raised taxes, raisedspending, raised regulation,
raised tariffs and had a tightmonetary policy, and that was a
disaster.
It caused the Great Depression.
Well, if you look at the Trumpproposals, we're talking about
lower taxes, so that pillar is agreen arrow we're talking about
, I think, smaller governmentmakes the private sector bigger
(15:33):
and makes us more efficient.
So, spending less, which is areal positive, regulating less,
which is a real positive.
Now we have tariffs, which, Iwould argue, if you go too far,
they're a negative.
And then President Trump alsowants to lean on the Fed to cut
interest rates.
So you've got easier money.
That's why the market is up.
(15:56):
Other than the tariffs,everything just turned green
with this election.
But the regulatory part ismassive.
We, right now in America, spend7% of our GDP complying with
regulations.
You know, I mean probably oneof the biggest ones for
(16:18):
everybody.
If you're not running a, ifyou're a landscaper, you got to
have how many pieces of paperjust to carry around weed killer
in your van.
Who knows it's like?
The costs are massive, but weall spend lots of money doing
our taxes and time, and if youcan streamline that stuff, make
it more efficient.
I mean there is a lot ofresources that could be
(16:41):
redirected to more productivethings.
So if Musk is able to do hisMusk magic and Twitter, I mean
he fired 70% of Twitter and itworks better than ever.
In fact, it's the leadingsource of news for this whole
election.
It is amazing what he did and Ido believe you could do that
(17:01):
with government.
Now, I did not listen to theRogan podcast, but there is a
problem in and try to lay offall these bureaucrats.
The deep state and I don't meanthat in the tinfoil hat way,
but the bureaucracy will fightyou tooth and nail, and so
(17:22):
promising to pay them for a fewyears might be a way to entice
people to move on.
Ryan (17:29):
He said that you could continue to pay them and they
could even go on and do a secondcareer.
Right, you know that would bethe incentive for the
bureaucrats.
Brian (17:37):
Right, which I mean, yeah , we still spend money and in
fact we're wasting it, payingpeople they're not.
But they probably were anegative for the economy in the
first place, because all theseregulations just hold us back.
But let's bring it right downto today.
The Russell small cap index isup four or five percent here the
(18:00):
day after the election.
Why?
I think a lot of it has to dowith that regulation.
First, we're not going to taxthem more, which is good, but
second, it's going to get a loteasier to do business because
the regulatory state will not bethrottling and strangling them
as much as it was.
Ryan (18:20):
So the interest cost on the outstanding debt is
something like three and a halfpercent of GDP.
So you're telling me that theregulation to comply with
regulations, the cost of that isdouble the cost of the interest
on the outstanding debt DoubleYep.
Brian (18:34):
That's our personal time.
Effort, blood, sweat, tears,money.
7% of GDP is taken up by thecost of regulation.
Ryan (18:43):
That's amazing, yep.
Okay, you mentioned inflationas well, so I want to circle
back to that.
And, as you mentioned, trumppretty consistently in his first
administration tried to kind ofnudge or know, I guess, where
interest rate policy should go,and you know what will be the
(19:17):
impact on inflation if rates arecut too soon.
Brian (19:21):
My belief is that the embers of inflation are still
there.
You know so.
I've done a lot of camping inmy life and one of the greatest
things for me in camping is likefall.
It's crisp outside and you wakeup in the morning and the
embers are still in the fire pitand all you got to do is throw
(19:42):
a few sticks in there and boom,you're making coffee and you're
warm and the fires pop.
You don't have to get yourflint out and do in there and
boom, you're making coffee andyou're warm and the fires pop.
You don't have to get yourflint out and do it all over
again.
You're a boy scout, at one pointI'm an Eagle scout, but what
I'm getting to is inflation Ifyou don't put the embers out.
So, Paul Volcker, he foundevery drop of water in the whole
(20:03):
campsite, threw it on the fire,put sand on top of that, put
sand on top of that, put rockson top of that, drove his truck
on top of it and then sat therefor three days and it was out
all right by the time he wasdone.
Well, now we have these embersand if the Fed reverses course
too hard cuts rates again,allows the money supply to grow,
that inflation.
I mean, you can already see itthe last month's numbers were
(20:27):
supposedly really good, but itwas still 0.2, which is 2.4%,
and then the core was 0.3, whichis 3.6%.
Inflation's not gone and I'mafraid if we throw some embers
on that or some wood on thatfire fuel, that we get inflation
back.
Real estate guys like lowinterest rates and who doesn't
(20:50):
if you want to buy something orrent it or finance it, but
they're not always the bestpolicy.
And what the Fed has done since2008, and we've talked about
this before I think they'vecreated real problems.
And today, long-term interestrates, the 10-year treasury is
(21:12):
up like what?
445?
I mean, we've gone up almost afull percentage point from the
low, and that's after the Fedcut rates, and what that's
telling me is that the long-termbond market is worried that the
Fed's going to get too easy andthose embers are going to turn
back into inflationary flames.
(21:33):
This is a really Fed policy, isreally important to get right,
and they can blow it all if theyask the Fed to ease too much.
They can blow it all if theyask the Fed to ease too much.
Ryan (21:48):
So the fact that basically , from the start of the Fed
pivot and when they began to cutrates, the 10-year, as you
mentioned, is up something like100 basis points, is that
telling you that the marketexpects inflation to be higher,
or do you think there's anotherexplanation for that?
Brian (22:10):
I think it's a little bit of everything.
We're running $2 trilliondeficits and now we're spending
3.5%.
I mean it's like we're notGreece yet, we're not Venezuela,
we're not Argentina and I don'tthink we will be for a long,
long time.
But the market is saying, hey,you have to pay us to fund these
things, you know, to fund thismassive deficit.
So that's one thing spendingcuts could really do is by
(22:32):
bringing that funding need down.
I think they could help calmlong-term interest rates down.
But the other part is thelong-term bond market saying the
Fed's going to go too far toofast and bring inflation back.
Term bond market saying theFed's going to go too far too
fast and bring inflation back.
And so you put those two thingstogether massive borrowing
needs and the potential forinflation to come back, and the
(22:53):
bond market's protecting itself.
They're just putting yields up.
Ryan (22:57):
What do you expect to happen with some of the fiscal
spending bills that were passedinto law during the Biden
administration?
Trillions and trillions ofdollars in fiscal spending
targeted on very specific areas.
You know that was sort of theirindustrial policy.
Do you expect that the Trumpadministration will roll those
(23:19):
back?
Will they keep some of them?
It strikes me that some of thebenefits also accrue to red
states, not just blue states.
Brian (23:28):
So what do you think will happen?
Yeah, a lot of that money isfocused on clean energy.
So it's subsidies for EVs, it'ssubsidies for solar and wind
and trying to get rid of allmotor you know, fossil fuel
burning motor vehicles by 2030,whatever California wants, I
don't even know what their lawis Well.
Ryan (23:49):
they raised the CAFE standard so high that, in order
for the automakers to actuallycomply with them, they have to
drastically increase the amountof EVs.
Brian (23:59):
Right, which is causing them, by the way, to lose
billions of dollars.
And so but we have put in thelast 20 years it's almost $20
trillion is the amount of moneythe world has spent moving in
that direction.
One of the reasons I bring thatup is that when you spend other
people's money on something forother people, like this whole
(24:23):
industry you don't care what youspend and you don't care what
you get for it.
When you spend your own money,you do.
And the interesting thing is,after all of that spending,
after all of that spending,Google and Microsoft and Meta
they're going to buy nuclearpower and not this wind and
(24:47):
solar, and that's because it'stheir own money, and so I do
expect the Trump team.
That's one of the easiestplaces to cut back spending.
And the other thing is becauseit's an incentive structure.
I always found this a littleunderhanded and sleight of hand
by the Biden administration isthey would set up a subsidy and
(25:10):
then the more people that tookadvantage of it, the more it
cost, and so they would score it, as this is going to cost us
$50 billion next year, and thenyou find out it cost us $150
billion.
Ryan (25:23):
There was no cap on their loan.
Brian (25:24):
There's no cap because it's a subsidy and then
everybody just takes it, and sothose areas are ripe for picking
.
I think there's a lot ofcompanies out there that have
only survived on just ongovernment subsidies in that
area and I think they're goingto get hurt because that
spending is kind of easy forTrump and the Doge and the
(25:50):
Congress to go after and we needto cut spending.
The government it's never beenbigger.
If you add up federal, stateand local government spending
plus the cost of regulationwhich we talked about, it's 51
percent of GDP.
Plus the cost of regulationwhich we talked about, it's 51%
of GDP.
And I mean that's why realgrowth in America for the last
(26:11):
20 years has only been 2% a year.
I mean that's less than half ofthe rate of growth we had after
World War II.
And I don't think peoplerealize that.
I mean, yes, we're growing, butwe're growing half the rate.
And think about it.
We've invented the internet,the computer, the worldwide web,
the cell phone, the you knowwe're, you know Starlink, like
(26:36):
Ozempic, ai.
Now, you know, I mean thetechnologies that we have
created in the last 20 years.
They should have boosted growtha lot and yet we're only
growing 2%.
Why?
Because government is so bigit's a ball and chain on the
economy.
It's a wet blanket on the fireof innovation and it just slows
(26:59):
us down.
And when you have slower growthlike that and the Fed tries to
boost us by printing more money,that's what turns into
inflation.
So that's why Reagan's policyof cutting taxes and spending
and regulation to lift growthwhile the Fed kept money tight
to keep inflation, why it worked.
(27:20):
We went from the 70s, where wehad stagflation, to a booming
economy with low inflation.
We kind of have somestagflation today and those are
the policies we need to get outof it.
Ryan (27:32):
So the incoming administration will start
January 20th.
Is it 20th Yep?
How long will it take for newpolicies to actually filter
through and have an impact onthe economy?
Brian (27:47):
I think the stock market I mean I get the exuberance we
don't have to worry about highertax rates and it's always
really hard to tell how much wasor what was priced into the
market.
Like if everybody was pricingin that Vice President Harris
was going to win and corporatetax rates were going to go up
(28:07):
and we were going to starttaxing unrealized gains.
That's not good for the market,right.
And so if that was priced inand now they're breathing a sigh
of relief and going, thankgoodness, and that's why we're
up, well then it's probably thisrally could last.
I think it's a little moreexuberance about, oh, the new
policies are going to change theworld immediately.
(28:30):
It didn't happen under Reagan.
I mean, he cut taxes prettyquickly and held the line on
spending pretty quickly.
But the market we still hadrecessions, we still had really
tough high unemployment in thefirst few years of Reagan, and
so right now I think the stockmarket is overvalued I'm sorry
(28:53):
to say that but it is.
And then today it's even moreovervalued because we rallied so
hard, and so I still thinkwe're at risk from that.
It doesn't mean it can't stayovervalued, but it's overvalued
and we're not out of the woodsand it takes time for these
policies to have an impact, evenif he's elected January 20th.
(29:17):
The tax cut, it can't movethrough Congress.
I mean, it takes a long time atleast 100 days and they can
immediately cut some regulation.
We're likely to see lessimmigration, which might put a
little squeeze on the laborforce.
I'm okay with that.
We need legal immigration, notwhat's kind of happened, but
(29:42):
there's a lot of moving partsand to think that it's
immediately going to jumpstartgrowth, I think that's well
wishing, okay.
Ryan (29:52):
Well, there's a lot more to talk about, but I don't want
to keep you too long here.
I have a final question for you, a young Brian Westbury, eagle
Scout, thinking about what wasgoing to come over the next few
decades of his life.
Did you plan on being aneconomist back then, and if not,
what did you think you wouldend up?
Brian (30:09):
doing.
I did not plan on being aneconomist.
I loved math, and so at first Iwanted to be an industrial
engineer, and so that's what Istarted my education in.
And then they made me takebiology and chemistry.
And I'm like, are you kidding?
(30:30):
Because that was the basecourses you had to do in
engineering school.
And I'm like I'm done with this.
And so I just changed to mathbecause, industrial engineering
is just applied mathematicsanyway.
And so I just changed to math,because industrial engineering
is just applied mathematicsanyway.
And then, somewhere along theway, I took an econ class and
the professor made me fall inlove with it and, by the way, he
had a forecasting contest, foryou know, he had to pick the
(30:53):
price of gold and the stockmarket or whatever, and I won.
I had no idea what I was doing,but I won it and I got a
subscription to Business Week asmy reward.
But being the winner and youknow it was and it was he was a
great teacher and I won thatcontest.
And then I realized I didn'twant to stand in front of a
blackboard my whole life.
(31:13):
I really like people andeconomics is about people, and I
went that way.
And also I believe thateconomics understanding the way
that markets work has a realimpact on people, and that's
(31:34):
what I care about.
I want the most opportunity foreveryone to find their
God-given talents and be themost productive they can, and
that's why I am such a fighterfor free markets and small
government, because the biggergovernment you have, the more
you have people dependent ongovernment.
(31:56):
The less creative people are,the less vibrant an economy is,
and so I really felt like Iwanted to be in a profession
that could have a big impact onpeople, and I guess I've had a
pretty good career.
Hopefully I have.
Ryan (32:14):
Yeah, I think there's no doubt.
I hear from the financialprofessionals that we interact
with on a daily basis, so Ithink that's a great place to
leave the conversation.
Thanks again for joining us onthe podcast.
Let's do it again soon.
Brian (32:28):
All right.
Ryan (32:28):
Brian.
Absolutely Thanks, brian, andthanks to all of you for joining
us on this episode of the FirstTrust ROI Podcast.
We'll see you next time, thankyou.
Hi, welcome to this episode of the First Trust ROI
podcast.
I'm Ryan Isakainen, etfstrategist at First Trust.
While we're recording thisepisode the day after election
day, I'm very excited to haveBrian Westbury joining me once
again for the podcast.
Brian and I will discuss theimplications of a Trump victory
in this election, what he thinksis likely to happen with
(00:34):
economic policy, tax policy anda number of other things.
Thanks for joining us on thisepisode of the First Trust ROI
Podcast, brian.
Thanks again for joining us onthe podcast here.
We are recording this the dayafter Election Day it's November
6th.
We're going to post this onMonday, which is November 11th.
As it stands right now, itseems like President Trump, or
(00:58):
President-elect Trump, will betaking power in January.
The Senate flipped to theRepublicans.
The House at the time thatwe're recording this is kind of
uncertain, but it seems toSenate flipped to the
Republicans.
The House at the time thatwe're recording this is kind of
uncertain, but it seems to beleaning to the Republicans.
So I guess my question for youis if you were advising the
incoming Trump administration onwhat they could do to have the
biggest impact right away froman economic policy standpoint,
(01:21):
what advice would you give them.
Brian (01:22):
Yeah, this is, I mean.
What happened is huge.
It was a landslide victory, andwe haven't seen one of those
since, basically 2012, withBarack Obama, and the results
are astounding to me.
I mean, new York State iscloser to being red than Texas
(01:43):
is to being blue.
That's amazing, and so I wouldargue that he got a mandate, and
the question is, what's thatmandate for?
He clearly talked about cuttingtaxes.
I always believed that KamalaHarris wanted to be the Santa
Claus that spent and gave moneyto people, and therefore Trump
can't be quite the anti-SantaClaus like and say we're going
(02:07):
to cut spending even though hehas.
Elon Musk and all that, but Ibelieve that we're going to come
back to that.
But you have to be a SantaClaus, and what his Santa Claus
was was giving tax cuts.
So tip workers, social Securitypolicemen, firemen, overtime
teachers, like I think, the onlyperson that didn't get a tax
(02:29):
cut under his proposals was me,so he's more of a robin hood
than that.
Maybe he's like giving, givinglike money he's just letting you
keep more of your own.
But I think that one of thebiggest things he could do for
the markets is to propose tomake his tax cuts that he put in
in his first term permanent.
And that's going to be a bigfight.
We're going to talk about theSALT deduction, the state and
(02:51):
local tax deduction.
There will be some compromise,depending on how the House
really shakes out.
The second thing and this,actually, I probably should have
said first in his first term Imean, people didn't think he was
going to win.
He might not have even thoughthe was going to win.
In other words, when he went in, he wasn't prepared to govern
(03:13):
and really grab control of thereins.
He didn't get people in theright spots and Congress kind of
hijacked his agenda and wentoff in their direction.
So this was Paul Ryan and MitchMcConnell.
This time that's not going tohappen.
What I've heard him talk aboutis he wants to put in tariffs,
he wants to cut taxes and hewants to put Musk in charge of
(03:36):
spending.
So I'm only talking about notRFK Jr and a healthy America,
but the economic policies, and Ibelieve that's what Ronald
Reagan did got spending undercontrol, cut taxes, and then
Trump wants to have the Fed cutinterest rates, and I'm sure
we're going to talk about thatwith inflation.
(03:56):
That's not what Reagan did.
He let Volcker raise rates, butthe combination of a smaller
government, lower taxes andtight money actually made the
economy boom, and I would hopethat's where we go.
It's not clear that we getthere, but if you wanted to have
the most immediate impact, it'sto make sure that tax rates are
(04:17):
lower and that the tax cutsthat are scheduled to expire at
the end of the year don't cutsthat are scheduled to expire at
the end of the year don't,because then you will encourage
more investment.
And I think by the way, that'skind of what the market is
saying right now that thesepolicies are going to be a
little bit better for the market, and we'll see how long that
(04:38):
lasts.
Ryan (04:38):
So I want to stay on taxes for a moment.
As you mentioned, theindividual tax rates that he put
in in the first Trump term areset to expire at the end of next
year, which is 2025.
So do you expect that he willjust kind of lock in what was
already passed and maybe try tomake those permanent, or will
(04:59):
there be some marginal decreasesin the tax rate as well?
Brian (05:03):
He wants to cut corporate tax rates a little bit more?
Yeah, and those are alreadypermanent though, right.
Ryan (05:09):
Those are 21% corporate tax rate.
Brian (05:11):
That's not permanent, because at the end of this term
they would have gone at the endof next year.
Ryan (05:17):
Everything was going back to where it was.
Oh, I thought the corporatewere permanent and the
individual were temporary.
If you're right and I'm wrong,then I'm willing to admit it,
irrespective.
Brian (05:26):
But I think he wants to cut it.
Vice President Harris wanted toraise it and so I think part of
the rally in stocks is a littlebit of relief from both of
those.
One we could have a lower one.
Number two we didn't have ahigher one, so that's good news
for the market.
Corporate taxes should be zerobecause we double tax corporate
income and it shouldn't be donethat way because we tax capital
(05:50):
gains, we tax all the money theypay out, we tax everything, and
so we should cut those taxes.
Number two the SALT deduction,which I think that should be
zero.
It's $10,000 now.
It really does like cost peoplethat live in high-tax states
(06:11):
more.
It encourages those states notto raise their taxes as much,
but it's likely to slip a littleand in negotiations you want
those high-tax state senatorsand congresspeople to vote with
you so to make those tax cutspermanent it's going to take a
lot of votes and I think they'regoing to have some negotiating
(06:31):
to get that done.
Ryan (06:32):
So in my self-interest, I'm kind of hoping that they
raise the self-deduction as aresident of New York State, but
I do understand the argumentthat it would maybe restrain
spending somewhat, although I'mnot sure that we've seen that in
New York State Right exactlythe other part of tax policy
that the incoming Trumpadministration has talked about,
at least during the campaign,was tariff policies and putting
(06:56):
increasing tariffs.
I'm wondering what yourthoughts are on tariffs in
general and maybe morespecifically as it relates to
the incoming administration'spolicy, Because I've heard you
talk before about the GreatDepression and the Smoot-Hawley
tariff act and how that wasextended what was something bad
already to make it even worse.
(07:16):
So talk a bit about tariffs.
Brian (07:19):
Yeah, the analogy I would use right here is kind of COVID
.
So one of the things that makesan economy, or a free market
economy, so strong is thedivision of labor.
You know, I don't have to be aplumber, I don't have to be a
carpenter.
We all specialize and, as aresult, we become more
(07:42):
productive as a unit, as anation, as a world.
And that's what free trade is.
It allows the world to be moreproductive.
So I have always been a freetrader from that point of view,
just like I'm a free trader froma free market point of view.
And specialization, a divisionof labor, covid.
(08:02):
When we locked everything down,you could see what happened to
the supply chain.
Well, if you close down worldtrade, you're going to get
similar things happening,because all of a sudden, stuff
that you bought from overseasisn't available and you can't
set up factories and producethings overnight.
And so if, let's say, we wereto put 100% tariff on everything
(08:25):
, are we really going to, youknow, the next day, be able to
produce all these things that webought from overseas?
No, it's impossible, and youcan see it.
During COVID it didn't happen.
We ended up with shortages andall kinds of supply chain
problems, and that's what wouldhappen.
So that's why Smoot-Hawley waspart and parcel with the Great
Depression tight money, risingtaxes and tariffs.
(08:49):
Now, having said that, china isan unfair trader, absolutely,
and in fact the proof kind of isin the pudding because Trump
put tariffs on China, presidentBiden left them in place,
actually made them a little bitworse on China, and so I
completely agree with them.
One of the reasons that we oneof the things that we need to
(09:10):
think about with free trade isthe United States is heavily
dependent on China in a lot ofcases for pharmaceuticals, even
things like Advil and Tylenol,but other pharmaceutical
products and military, likeheavy metals and steel and
(09:31):
things like that.
And semiconductors.
Yeah, and semiconductors.
And if we can't get thosepieces that we need to survive
if we were to say, get in a warwith China, that gives them
leverage over us, and so I thinkwe should do everything we can
to take that away.
Plus, they're not fair traders.
They steal intellectualproperty rights.
(09:52):
We know they're now spying ongovernment officials.
I mean, anyway, I've made mycase.
If you raise tariffs across theboard, you ruin the benefits of
global trade.
And there are a lot of benefits.
I mean, Canada and Mexico areour two biggest trading partners
and they're our friends andthey're not going away.
That's one thing.
Second thing is kind of themechanics of this, and maybe
(10:14):
this will shoot any job that Icould.
You know, they might ask me tocome do for Trump, but we only
have $4 trillion in imports.
Have $4 trillion in imports andif you tax them 100% and
nothing changed, we would onlyget $4 trillion in revenue and
we spend six and three quarters.
(10:34):
So it wouldn't fix the problem.
And the only time in Americanhistory where we funded
ourselves with tariffs andexcise taxes was when government
was 2% of GDP and it's now 24%of GDP.
You can't do it because if youraise tariffs to 100%, global
(10:55):
trade would shut down.
You would never even come closeto $4 trillion in revenue.
I mean, who knows what would beleft?
I guess there'd be some peoplestill drinking Bordeaux wine
because they love it so muchthey don't care how much it
costs.
There's not many things thatwould trade if you put 100%
tariff on.
So I get the concept and forChina I think it makes a lot of
(11:19):
sense.
But trying to fund governmentthis way it's not going to work.
Now I want to make one otherpoint, though.
Tariffs are basically, when youget down to who really pays
them and to the nitty-gritty,they're a tax on consumption,
(11:39):
and so we always have a choicein any economy.
Do you tax people when theyearn the money?
And remember, the only reasonwe work is to be able to spend,
and so you can either tax itwhen people earn it or when they
spend it.
And I've always been a believerthat taxing consumption and not
(12:00):
income is the most efficient wayto run a tax system, because
you can basically decideyourself whether you want to pay
taxes or not.
You could be a busboy or adishwasher in a restaurant, live
in a cardboard box in the alley, eat all your meals at 60% off
in the restaurant and save everytime you made, and open your
(12:22):
own restaurant, and so becauseyou wouldn't have paid taxes on
that, because you never spent it, and so.
But if we tax income, you don'thave that option.
You don't have a choice.
And so if we're moving towardmore of a consumption tax,
awesome, but if we do that, wehave to get rid of the income
(12:42):
tax.
Now, what I just proposed ismassive.
It would be radical change itwould be radical change, massive
change, and I highly doubt theTrump administration would spend
that much political capital ingetting there.
So I'm not telling you that'swhere we're going.
But if talking about tariffsmoves us in that direction, to
(13:04):
thinking about the tax code, I'mall for it.
Ryan (13:07):
Yeah, You're right, I think tariffs go into the price
ultimately and it's almost likea consumption tax on those
specific imported goods.
And if you had maybe a highertax on the imported goods but
you still had a consumption taxon the domestic goods, it sounds
amazing.
Brian (13:28):
It's too much political capital to get there.
I mean, it's a massive changein our tax code.
Ryan (13:34):
The other side of that, of course, is spending, which you
mentioned.
Elon Musk is apparently beingtasked to be the DOJ the.
Department of GovernmentEfficiency is kind of what
they're talking about.
Yeah, and I don't know if youread his biography where it
(14:00):
talks about some of his privatecompanies, the way that he would
just strive for efficiency andcut to the bone and he basically
made the case that if you wantto cut more than you actually
should, and then you can addthings back and that's kind of
the operating philosophy for alot of the Musk companies, right
, operating philosophy for a lotof the Musk companies.
I wonder if that will beactually brought into government
, because that seems reallydifficult to do.
One you know, you got to findsomething for all those people
(14:21):
to do if they're looking forjobs.
He actually said in I think itwas with his Joe Rogan podcast
interview that he would want tocontinue to pay those people for
a couple years, which I thoughtwas kind of interesting.
You fire them, keep paying them.
It doesn't actually cost thegovernment more, but those
people get out of the way.
And then the other side, ofcourse, apart from spending, is
(14:43):
decreasing the regulation.
That's a long question, brian.
What's your thoughts on that?
Brian (14:50):
I and we as the First Trust Economics Department, have
kind of used the four pillarsof prosperity to describe the
risks to the economy and themarket.
And the other side of the coin,there's four pillars of
prosperity, four pillars ofdestruction, and so you go back
to the Great Depression.
What did we do?
(15:10):
We raised taxes, raisedspending, raised regulation,
raised tariffs and had a tightmonetary policy, and that was a
disaster.
It caused the Great Depression.
Well, if you look at the Trumpproposals, we're talking about
lower taxes, so that pillar is agreen arrow we're talking about
, I think, smaller governmentmakes the private sector bigger
(15:33):
and makes us more efficient.
So, spending less, which is areal positive, regulating less,
which is a real positive.
Now we have tariffs, which, Iwould argue, if you go too far,
they're a negative.
And then President Trump alsowants to lean on the Fed to cut
interest rates.
So you've got easier money.
That's why the market is up.
(15:56):
Other than the tariffs,everything just turned green
with this election.
But the regulatory part ismassive.
We, right now in America, spend7% of our GDP complying with
regulations.
You know, I mean probably oneof the biggest ones for
(16:18):
everybody.
If you're not running a, ifyou're a landscaper, you got to
have how many pieces of paperjust to carry around weed killer
in your van.
Who knows it's like?
The costs are massive, but weall spend lots of money doing
our taxes and time, and if youcan streamline that stuff, make
it more efficient.
I mean there is a lot ofresources that could be
(16:41):
redirected to more productivethings.
So if Musk is able to do hisMusk magic and Twitter, I mean
he fired 70% of Twitter and itworks better than ever.
In fact, it's the leadingsource of news for this whole
election.
It is amazing what he did and Ido believe you could do that
(17:01):
with government.
Now, I did not listen to theRogan podcast, but there is a
problem in and try to lay offall these bureaucrats.
The deep state and I don't meanthat in the tinfoil hat way,
but the bureaucracy will fightyou tooth and nail, and so
(17:22):
promising to pay them for a fewyears might be a way to entice
people to move on.
Ryan (17:29):
He said that you could continue to pay them and they
could even go on and do a secondcareer.
Right, you know that would bethe incentive for the
bureaucrats.
Brian (17:37):
Right, which I mean, yeah , we still spend money and in
fact we're wasting it, payingpeople they're not.
But they probably were anegative for the economy in the
first place, because all theseregulations just hold us back.
But let's bring it right downto today.
The Russell small cap index isup four or five percent here the
(18:00):
day after the election.
Why?
I think a lot of it has to dowith that regulation.
First, we're not going to taxthem more, which is good, but
second, it's going to get a loteasier to do business because
the regulatory state will not bethrottling and strangling them
as much as it was.
Ryan (18:20):
So the interest cost on the outstanding debt is
something like three and a halfpercent of GDP.
So you're telling me that theregulation to comply with
regulations, the cost of that isdouble the cost of the interest
on the outstanding debt DoubleYep.
Brian (18:34):
That's our personal time.
Effort, blood, sweat, tears,money.
7% of GDP is taken up by thecost of regulation.
Ryan (18:43):
That's amazing, yep.
Okay, you mentioned inflationas well, so I want to circle
back to that.
And, as you mentioned, trumppretty consistently in his first
administration tried to kind ofnudge or know, I guess, where
interest rate policy should go,and you know what will be the
(19:17):
impact on inflation if rates arecut too soon.
Brian (19:21):
My belief is that the embers of inflation are still
there.
You know so.
I've done a lot of camping inmy life and one of the greatest
things for me in camping is likefall.
It's crisp outside and you wakeup in the morning and the
embers are still in the fire pitand all you got to do is throw
(19:42):
a few sticks in there and boom,you're making coffee and you're
warm and the fires pop.
You don't have to get yourflint out and do in there and
boom, you're making coffee andyou're warm and the fires pop.
You don't have to get yourflint out and do it all over
again.
You're a boy scout, at one pointI'm an Eagle scout, but what
I'm getting to is inflation Ifyou don't put the embers out.
So, Paul Volcker, he foundevery drop of water in the whole
(20:03):
campsite, threw it on the fire,put sand on top of that, put
sand on top of that, put rockson top of that, drove his truck
on top of it and then sat therefor three days and it was out
all right by the time he wasdone.
Well, now we have these embersand if the Fed reverses course
too hard cuts rates again,allows the money supply to grow,
that inflation.
I mean, you can already see itthe last month's numbers were
(20:27):
supposedly really good, but itwas still 0.2, which is 2.4%,
and then the core was 0.3, whichis 3.6%.
Inflation's not gone and I'mafraid if we throw some embers
on that or some wood on thatfire fuel, that we get inflation
back.
Real estate guys like lowinterest rates and who doesn't
(20:50):
if you want to buy something orrent it or finance it, but
they're not always the bestpolicy.
And what the Fed has done since2008, and we've talked about
this before I think they'vecreated real problems.
And today, long-term interestrates, the 10-year treasury is
(21:12):
up like what?
445?
I mean, we've gone up almost afull percentage point from the
low, and that's after the Fedcut rates, and what that's
telling me is that the long-termbond market is worried that the
Fed's going to get too easy andthose embers are going to turn
back into inflationary flames.
(21:33):
This is a really Fed policy, isreally important to get right,
and they can blow it all if theyask the Fed to ease too much.
They can blow it all if theyask the Fed to ease too much.
Ryan (21:48):
So the fact that basically , from the start of the Fed
pivot and when they began to cutrates, the 10-year, as you
mentioned, is up something like100 basis points, is that
telling you that the marketexpects inflation to be higher,
or do you think there's anotherexplanation for that?
Brian (22:10):
I think it's a little bit of everything.
We're running $2 trilliondeficits and now we're spending
3.5%.
I mean it's like we're notGreece yet, we're not Venezuela,
we're not Argentina and I don'tthink we will be for a long,
long time.
But the market is saying, hey,you have to pay us to fund these
things, you know, to fund thismassive deficit.
So that's one thing spendingcuts could really do is by
(22:32):
bringing that funding need down.
I think they could help calmlong-term interest rates down.
But the other part is thelong-term bond market saying the
Fed's going to go too far toofast and bring inflation back.
Term bond market saying theFed's going to go too far too
fast and bring inflation back.
And so you put those two thingstogether massive borrowing
needs and the potential forinflation to come back, and the
(22:53):
bond market's protecting itself.
They're just putting yields up.
Ryan (22:57):
What do you expect to happen with some of the fiscal
spending bills that were passedinto law during the Biden
administration?
Trillions and trillions ofdollars in fiscal spending
targeted on very specific areas.
You know that was sort of theirindustrial policy.
Do you expect that the Trumpadministration will roll those
(23:19):
back?
Will they keep some of them?
It strikes me that some of thebenefits also accrue to red
states, not just blue states.
Brian (23:28):
So what do you think will happen?
Yeah, a lot of that money isfocused on clean energy.
So it's subsidies for EVs, it'ssubsidies for solar and wind
and trying to get rid of allmotor you know, fossil fuel
burning motor vehicles by 2030,whatever California wants, I
don't even know what their lawis Well.
Ryan (23:49):
they raised the CAFE standard so high that, in order
for the automakers to actuallycomply with them, they have to
drastically increase the amountof EVs.
Brian (23:59):
Right, which is causing them, by the way, to lose
billions of dollars.
And so but we have put in thelast 20 years it's almost $20
trillion is the amount of moneythe world has spent moving in
that direction.
One of the reasons I bring thatup is that when you spend other
people's money on something forother people, like this whole
(24:23):
industry you don't care what youspend and you don't care what
you get for it.
When you spend your own money,you do.
And the interesting thing is,after all of that spending,
after all of that spending,Google and Microsoft and Meta
they're going to buy nuclearpower and not this wind and
(24:47):
solar, and that's because it'stheir own money, and so I do
expect the Trump team.
That's one of the easiestplaces to cut back spending.
And the other thing is becauseit's an incentive structure.
I always found this a littleunderhanded and sleight of hand
by the Biden administration isthey would set up a subsidy and
(25:10):
then the more people that tookadvantage of it, the more it
cost, and so they would score it, as this is going to cost us
$50 billion next year, and thenyou find out it cost us $150
billion.
Ryan (25:23):
There was no cap on their loan.
Brian (25:24):
There's no cap because it's a subsidy and then
everybody just takes it, and sothose areas are ripe for picking
.
I think there's a lot ofcompanies out there that have
only survived on just ongovernment subsidies in that
area and I think they're goingto get hurt because that
spending is kind of easy forTrump and the Doge and the
(25:50):
Congress to go after and we needto cut spending.
The government it's never beenbigger.
If you add up federal, stateand local government spending
plus the cost of regulationwhich we talked about, it's 51
percent of GDP.
Plus the cost of regulationwhich we talked about, it's 51%
of GDP.
And I mean that's why realgrowth in America for the last
(26:11):
20 years has only been 2% a year.
I mean that's less than half ofthe rate of growth we had after
World War II.
And I don't think peoplerealize that.
I mean, yes, we're growing, butwe're growing half the rate.
And think about it.
We've invented the internet,the computer, the worldwide web,
the cell phone, the you knowwe're, you know Starlink, like
(26:36):
Ozempic, ai.
Now, you know, I mean thetechnologies that we have
created in the last 20 years.
They should have boosted growtha lot and yet we're only
growing 2%.
Why?
Because government is so bigit's a ball and chain on the
economy.
It's a wet blanket on the fireof innovation and it just slows
(26:59):
us down.
And when you have slower growthlike that and the Fed tries to
boost us by printing more money,that's what turns into
inflation.
So that's why Reagan's policyof cutting taxes and spending
and regulation to lift growthwhile the Fed kept money tight
to keep inflation, why it worked.
(27:20):
We went from the 70s, where wehad stagflation, to a booming
economy with low inflation.
We kind of have somestagflation today and those are
the policies we need to get outof it.
Ryan (27:32):
So the incoming administration will start
January 20th.
Is it 20th Yep?
How long will it take for newpolicies to actually filter
through and have an impact onthe economy?
Brian (27:47):
I think the stock market I mean I get the exuberance we
don't have to worry about highertax rates and it's always
really hard to tell how much wasor what was priced into the
market.
Like if everybody was pricingin that Vice President Harris
was going to win and corporatetax rates were going to go up
(28:07):
and we were going to starttaxing unrealized gains.
That's not good for the market,right.
And so if that was priced inand now they're breathing a sigh
of relief and going, thankgoodness, and that's why we're
up, well then it's probably thisrally could last.
I think it's a little moreexuberance about, oh, the new
policies are going to change theworld immediately.
(28:30):
It didn't happen under Reagan.
I mean, he cut taxes prettyquickly and held the line on
spending pretty quickly.
But the market we still hadrecessions, we still had really
tough high unemployment in thefirst few years of Reagan, and
so right now I think the stockmarket is overvalued I'm sorry
(28:53):
to say that but it is.
And then today it's even moreovervalued because we rallied so
hard, and so I still thinkwe're at risk from that.
It doesn't mean it can't stayovervalued, but it's overvalued
and we're not out of the woodsand it takes time for these
policies to have an impact, evenif he's elected January 20th.
(29:17):
The tax cut, it can't movethrough Congress.
I mean, it takes a long time atleast 100 days and they can
immediately cut some regulation.
We're likely to see lessimmigration, which might put a
little squeeze on the laborforce.
I'm okay with that.
We need legal immigration, notwhat's kind of happened, but
(29:42):
there's a lot of moving partsand to think that it's
immediately going to jumpstartgrowth, I think that's well
wishing, okay.
Ryan (29:52):
Well, there's a lot more to talk about, but I don't want
to keep you too long here.
I have a final question for you, a young Brian Westbury, eagle
Scout, thinking about what wasgoing to come over the next few
decades of his life.
Did you plan on being aneconomist back then, and if not,
what did you think you wouldend up?
Brian (30:09):
doing.
I did not plan on being aneconomist.
I loved math, and so at first Iwanted to be an industrial
engineer, and so that's what Istarted my education in.
And then they made me takebiology and chemistry.
And I'm like, are you kidding?
(30:30):
Because that was the basecourses you had to do in
engineering school.
And I'm like I'm done with this.
And so I just changed to mathbecause, industrial engineering
is just applied mathematicsanyway.
And so I just changed to math,because industrial engineering
is just applied mathematicsanyway.
And then, somewhere along theway, I took an econ class and
the professor made me fall inlove with it and, by the way, he
had a forecasting contest, foryou know, he had to pick the
(30:53):
price of gold and the stockmarket or whatever, and I won.
I had no idea what I was doing,but I won it and I got a
subscription to Business Week asmy reward.
But being the winner and youknow it was and it was he was a
great teacher and I won thatcontest.
And then I realized I didn'twant to stand in front of a
blackboard my whole life.
(31:13):
I really like people andeconomics is about people, and I
went that way.
And also I believe thateconomics understanding the way
that markets work has a realimpact on people, and that's
(31:34):
what I care about.
I want the most opportunity foreveryone to find their
God-given talents and be themost productive they can, and
that's why I am such a fighterfor free markets and small
government, because the biggergovernment you have, the more
you have people dependent ongovernment.
(31:56):
The less creative people are,the less vibrant an economy is,
and so I really felt like Iwanted to be in a profession
that could have a big impact onpeople, and I guess I've had a
pretty good career.
Hopefully I have.
Ryan (32:14):
Yeah, I think there's no doubt.
I hear from the financialprofessionals that we interact
with on a daily basis, so Ithink that's a great place to
leave the conversation.
Thanks again for joining us onthe podcast.
Let's do it again soon.
Brian (32:28):
All right.
Ryan (32:28):
Brian.
Absolutely Thanks, brian, andthanks to all of you for joining
us on this episode of the FirstTrust ROI Podcast.
We'll see you next time, thankyou.
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