4-4-25 - 7am - History of Tariffs and Over Regulation

Episode Transcript

Speaker 1 (00:00):
Get more than Michael and Dragon.

Speaker 2 (00:02):
I got a question every time you played that little
Diddy on Friday morning, it's a low Friday.

Speaker 1 (00:10):
That just hits me the wrong way. I've been to Hawaii.
We don't say Friday. What that just I don't get it.

Speaker 3 (00:20):
Can we trade lives? If that's the biggest thing you're
gonna bitch about today? Is aluha Friday a loua fraud?

Speaker 1 (00:28):
And that that's what does the guy say? Aloha or
lo ha?

Speaker 3 (00:32):
I don't know, and I don't care.

Speaker 1 (00:34):
Yeah, I guess I don't care either, and I and
I've been to Hawaii, and I I like, uh, I
don't know I really said alone hall that.

Speaker 3 (00:43):
Much so, but I do love the fact that he
took his time to open the iHeart app go to
the situation with Michael Brown the live feed right now,
and then leave that talk back to complain about huh
Friday beautiful?

Speaker 1 (01:04):
It is beautiful. It just never mind. I want to
finish up. So we've gone through the Sean Davis analogy
about the farmer, and the question is will this work.

(01:26):
I don't think anybody knows whether it will or not.
That's not the issue. The issue is much larger than that. Yeah,
I've checked the text line. No one has countered my
what I believe to be an unassailable statement, and that

(01:50):
is the current economic path, the political path, the however
you want to describe it. The way we're running the
country is unsustainable, absolutely unsustainable. I guess if I were
really a good talk show host, I would have researched this,

(02:13):
But I didn't expect to be continuing this topic this hour.
But I really am curious dragon, Hint, hint, I really
am curious the value of a dollar today based on
you know, looking at a baseline of nineteen sixty or
nineteen seventy, and what's that dollar worth today? And part

(02:37):
of whatever that diminution of value is of that dollar
has somewhat been offset by cheaper goods that we get
from foreign countries like communists China. So the question remained.
So if we start with the premise, the unsayable premise
that no one has denied so far, and you've had

(02:57):
plenty of time to deny it, and that is but
the current trend we are on is unsustainable. The country
cannot survive. In fact, right now, we cannot pay off
a thirty seven trillion dollar national debt.

Speaker 3 (03:10):
The value of a dollar in nineteen seventy compared to
today eight dollars and ten cents. Is how much eight
dollars and ten cents.

Speaker 1 (03:22):
The dollar today is worth eight dollars and ten.

Speaker 3 (03:24):
Cents versus nineteen seventy. That's the inflation calculator.

Speaker 1 (03:30):
I'm not sure what that means. I'm going at the
purchase power the value of that dollar. So I gotcha. Yeah,
a dollar that is worth a dollar in nineteen seventy
cannot be worth eight dollars and ten cents. It's worthless.
It may have greater purchasing power. Go back and see

(03:52):
what to see what else you can find the dollar.
The value of the dollar has decreased between inflation and
just the amount of currency that we've got in the
money supply floating out there in the economy. That purchasing
powers decreased. But let's get back to the basic question, though,

(04:12):
will these policies work? Nobody can answer defensively yes, or
know that they will or they will not. So the
cabal is out there screaming, and everybody's pointing to the
stock market. Did I lose money? Now? No, I didn't
lose any money. Yesterday because I didn't trade any stocks yesterday,

(04:33):
but the dollar value of my portfolio dropped yesterday because
I'm invested in equities and those equities decreased in value.
I just put that in a vernacular of I lost
some money yesterday, but it's not the end of the world. Okay.

Speaker 3 (04:50):
I did find a weird article from Yahoo Finance. Yes,
in nineteen seventy you could have bought two pillowcases for
eighty eight cent. You could have bought a rake for
a dollar and nine cents, a wrench for ninety eight cents.

Speaker 1 (05:07):
Yes, and today none of those things cost.

Speaker 3 (05:09):
Six hershey bars, six hershey bars.

Speaker 1 (05:14):
As you go to the circle case today, hershey bar
is three.

Speaker 3 (05:16):
Dollars, three bucks ninety cents for six hershey bars.

Speaker 1 (05:20):
Yeah. So yeah, there's a comparison. That's what you were
looking for. Yeah. Yeah. So opinion on them, whether it's
going to work or not, is sharply divided, and it
divides up into two corners. It divides up in one corner.
Over here, you got people that claim to be free traders,

(05:41):
and they're you know, wringing their hands and mashing their
teeth because they're warning us about higher prices, that there
will be disruption of international trade and there'll be a
trade war that nobody's going to win. So that's those
are the free traders. Now over here in the other corner,
I'm not I'm quite sure what to call them, but

(06:02):
they're not really anti free traders. They are more like
economic protectionists, I guess, I mean, I don't know, maybe
fair trade. Let us call them fair traders. They like
the idea of free trade in theory. What they don't
like is the ethic of free trade for you, but

(06:23):
not for you, and just that, according to Donald Trump,
has been the fate of post World War two America.
In nineteen forty five, You have to again, you've got
to understand history. In nineteen forty five, we were the
only big economy standing. What did we do in nineteen

(06:47):
forty five? We basically said to Europe, impose all your
tariffs because we're going to buy stuff from you. Now
Europe's olfacy changed. Then we're gonna buy stuff from you
to help you rebuild your continent. And they use tariffs
to do that. They use those tariffs to suck money

(07:09):
out of our economy into their economy so they could
rebuild and so rather than us just becoming conquerors, we
became facilitators. We helped Europe rebuild, and Europe rebuilt for
a while, and Europe became a pretty good industrial powerhouse.
Look at Europe today, what does Europe produce? Because Europe

(07:34):
went down, Europe again is for us the fortune teller's
ball to look into. Europe is a shadow of itself.
Germany used to be the industrial center of the universe.
Not so much now. I mean, now all of Europe

(07:55):
is so focused on social welfare programs. They're so focused
on green energy, renewables, all that green you know, that
bull crap green New Energy Deal and now their second wind.
So you know, I do think the idea about fair
trade column fair traders. They liked the idea of free trade,

(08:18):
but in theory, they don't like the inconsistency. In nineteen
forty five, as I said, we were the big economy.
So it's understandable that the policies that that policies did develop,
they gave advantage to other countries at our expense, and
we could afford it. In nineteen forty five, we could

(08:40):
afford it. We were coming off World War Two. We
had all the soldiers coming back. The middle class was huge.
We had factories, we had industry, we were building things,
We were producing things of value. Now that's not to
say the things we air quotes here produced today don't
have value. I do believe that intellectual property has value.

(09:05):
I believe that innovation has value. I believe that information
has value. But you can't just have we can't live
just on information. I still need food. I still need clothing.
I still need transportation. I still need particularly in an
information economy, I need what's sitting here in front of me.

(09:27):
I need this iPhone. I need this laptop. I need
these computers. I need all of this stuff. In fact,
I still need paper. I still need a three ring binder.
I still need this backpack made of leather. I still
need this coat that I got from the United Kingdom.
Over here, they actually still make really good coats I need.
I still need those things even in an information society,
but we're not producing it. We're not producing it. And

(09:52):
some of the stuff we do produce, like my father
in law used to buy a lot of stuff from Philson.
Filson's a great MANUF factory, manufacturer, producer of outdoor supplies,
outdoor goods. One of my favorite coats came from Pilson.
It just totally fell apart. I sent it back to them,
just a lifetime warranty, lifetime guarantee. I said, look look

(10:13):
at this, it's falling apart. Fix it. It came back
looking like crap. I'll everybody anything from Filson again. Instead,
I bought something from Private White VVS LLC out of Manchester, England,
because their quality is still as good today as it
was one hundred years ago. So our policies changed and

(10:34):
our output changes, but we still need these things, but
we're not producing any of them ourselves. And again I
want to point out in nineteen forty five we were
able to allow, in fact, we encourage Europe to impose
tariffs on us so we could transfer some of our
wealth over to them to help them rebuild their country.
So here we are eighty years on and the world

(10:56):
has changed, our trade policies have not changed. And there's
the problem. Until now. Trump's basic message was summed up
in the movie in the Remember Network where Matt as hell,
We're not gonna take it anymore. That's where I think
the country is. We have we have in these quarters,

(11:18):
and I know in your life too, do you have
bitched and moaned about we can't keep doing this, we
can't keep doing it. And now somebody comes along and says, Okay,
well we're gonna we're gonna try something different. And then
everybody goes, oh my god, we're scared to death. You know,
during the camp during both of his campaigns, Trump one
point oh and Trump two point zero, he used the

(11:38):
word reciprocal lot. What other countries charged us, We're gonna
charge them. In the event, his administration is starting off
with something just a little different. There will be a
ten percent tariff on all goods imported to the United States.
Then there is we might call discount of reciprocity. China,
for example, China imposes a sixty seven percent duty on

(12:01):
US imports. Trump wanted to impose or is going to impose,
a thirty four percent duty on goods from China. Now
i've heard today, I haven't confirmed it, but I've heard
today that China has has retaliated and now they're going
to up their sixty seven percent tariff to I don't know,
eighty four to ninety four percent.

Speaker 3 (12:20):
I think it was another thirty five that they're adding
on top, they're.

Speaker 1 (12:23):
Adding thirty five so they're gonna have another thirty five percent. Okay,
that means that when you buy your cheap crap from China,
it's going to cost you a little bit more. Yeah.
Now eventually you won't buy that from China because you'll say, oh,
you know what, I'm going to make the decision not

(12:45):
to spend that money. Now that means that at some
point those Chinese companies are going to have to start well,
maybe we all start backing off a little bit basic
economics again, it gets back to econ one oh one.
So what happens now, Well, the market is still unhappy.

(13:08):
But the thing to bear in mind, I think, is
that we're faced with an empirical question. Economists don't like
empirical questions. You know, there's this old joke about economists.
An economist says, well, that's all very well in practice,
but how does it work out in theory? You and
I work in the opposite world, you and I work out, Well,

(13:30):
that works out pretty well in theory, but how does
it work out in the real world. So there's going
to be a lot of that inverse reasoning going on
in the weeks and months to come and there's going
to be to tumult in the market. You know, as
I was walking out during the break, I or maybe
coming back here I do. It doesn't make any difference.
I heard somebody talk about, oh, yesterday was the worst

(13:52):
day on the market since March of twenty twenty. Okay,
so worst it's been for five years. B fd uh yeah,
b f d Will there at the end of the day,
at the end of what day, will the market still

(14:12):
be at the end? I'm just asking you, Will the
market be bad at the end of the day today?
What about from three months from now? Six months from now?
Are the terrors fment of work? There are people on
both sides of the fence are looking forward to looking
back so they can say I told you so. Adam Smith,
the great apostle of free markets and the inventor of

(14:35):
the of the image of the invisible Hand. You know
about the invisible hand, You know the invisible hand that
works this alchemy by transforming the private, selfish actions of
you and me into the goods that goes into the
common good. It is Adam Smith, the anti Trump. I
don't think it's quite that simple. In his book The

(14:58):
Wealth of nations an absolute genuflection to the wonders of
the free market. But Adam Smith was also a realist,
and he understood what we would call protectionist policies are
sometimes appropriate under the category of restrain some particular imports.

(15:18):
Adam Smith said this, there may be good policy and
retaliations when there is a probability that they will procure
the repeal of the high duties or prohibitions imposed by
other countries. Oh so, more than two hundred years ago,
Adam Smith is addressing today. He went on to write,

(15:41):
the recovery of a great foreign market will generally more
than compensate the transitory inconvenience of paying deer during a
short time for some sorts of goods. Gosh, that sounds
like the Secretary of the Treasury, Scott Bessent and what
he was saying yesterday. Well, let them make a more
general point. I do believe, and it's often said, and

(16:07):
I sincerely believe this, that this country is an innovative,
risk taking country. Okay, Well, the current policies have landed
US with more than thirty trillion dollar federal debt, not including,
as somebody said earlier, all the unfunded liabilities that we
face and a two trillion dollar annual budget deficit that

(16:29):
is not sustainable. So now it shows up the disruptor,
Donald Trump. Now they're smart people, they're not stupid, and
they're at least willing to try something different. My question,
or I get, yeah, it's a question, why don't we
give them a chance? We're debt ridden now, we're still

(16:51):
rich and powerful, and again going back to Adam Smith, obviously,
but in another context said a deal of ruin in
a nation. I say, let's give it a shot. Let's
see if it works. We can't, because the alternative of
not doing anything or continuing on the path we're on

(17:15):
is eventually going to fail. I've often talked about, you know,
I never really thought I'd live in this time of
history when we really are. We always talked about the
fiscal cliff we're about to go off. Well, guess what,
We're at the stage where we can see the cliff.
We can look over the cliff. It's not like it

(17:36):
was thirty forty fifty years ago when we knew that
somewhere down in the future we would reach the point
where it would become fiscally mathematically unsustainable. And we've reached
that point, and Trump is trying to do a reset.
Let me ask you one more question. We can either

(17:57):
keep doing what we're doing.

Speaker 3 (17:59):
We can try.

Speaker 1 (18:00):
I want Trump wants to try. What would you do?
What would you do? If you're so damn smart, tell
me what you would do. I've thought about it myself.
I don't know. Good morning, Michael and Dragon. Michael.

Speaker 2 (18:18):
I'm not sure which economists came up with this idea,
But isn't there benefit to having other lower value production
activities in the economy moved out of the US so
that we can focus resources on the higher value design, innovation,

(18:38):
those types of things. Let the other countries do the manufacturing.

Speaker 1 (18:44):
I would say, not always.

Speaker 3 (18:46):
Yeah, look at how well those masks turned out when
we need them in twenty twenty.

Speaker 1 (18:50):
Yeah, you won. You then become dependent upon that supply chain,
and you've become dependent upon another country. In fact, in
this case, a I MEANUS anti American country that's simply
using us to suck money out of our country and
lead to our demise. But there's a greater issue than
even that, and I think that is this. I'll be

(19:15):
very crude here. Not everybody's a rocket scientist and not
everybody can have a high paying job doing some sort
of high tech manufacturing. You still need someone to actually
put together. And I always use a widget, which it
is a nondescript simple item that somebody needs as a

(19:40):
part for something else. It doesn't require you know, a
clean room to manufacture it. You don't have to wear
you know hands and you know masks and gloves and
be in a completely air filtered place to do it,
you know, with an elevated floor, temperature and humidity controlled.
It's just something that somebody makes with their hands. Well,

(20:04):
you don't pay that person ninety five dollars an hour
or one hundred and twenty thousand dollars a year to
make a widget. That's a low wage job, but which
is necessary for the higher end value that it has
when it's put to use somewhere else. And you still

(20:26):
need janitors, You still need someone. I still although I
wouldn't put them necessarily in the low wage category. In fact,
i'd put them in the high wage category because you
still need painters and plumbers and electricians. You still need
just you know, general handyman and contractors. I'm thinking about

(20:47):
the guy that we paid yesterday to do some handyman
work in our home. You know, he made he made
a good chunk of change yesterday doing stuff that, quite frankly,
one I'm not very good at doing. And to my
time's better spent doing show prep because I get paid
more doing this, and I would do I would get
paid doing that. So we still need that whole gamut.

(21:09):
And what we've done is we've kind of eliminated that
entire spectrum of economic activity. So no, I would disagree
with you. But but there's another point about that we're
that we're missing that I think is a part of
this plan by Trump, you another way to jumpstart this economy,

(21:33):
and they're they're working on it. I'm not saying they're
not doing it, but it's something that's kind of gotten
drowned out in the whole. Oh my god, the tariffs.
That's the end of the world. Hysteria going on right now.
Tax cuts, corporate tax cuts, Oh my goodnes it is
Michael Brown again. He's an elitist. He wants he wants
the corporate tax rate to be cut. Yeah, I do.

(21:55):
I think the corporate tax rate ought to be cut.
I mean, what take it below twenty per fifteen percent?
Guy's bills. As far as I'm concerned, to get rid
of the corporate tax rate because corporations don't pay it,
I pay it?

Speaker 3 (22:10):
What what?

Speaker 1 (22:11):
Whatever? And everybody uses Amazon as an example. Amazon didn't
pay any federal income tax for a couple of years
or something. Well, yeah, because they had a lot of losses.
They had a lot of investment they you know, so,
so we give them an incentive to invest, and then
they can write those losses off. They can write off
those expenses. And I halllula I I. If that means

(22:33):
Amazon didn't pay any taxes and they made a bazillion dollars,
I don't care. I don't care because Amazon, whatever taxes
we would impose on Amazon is going to be paid.
Every time one of those little goobers brings a box

(22:53):
to your front door. You pay that tax. You know
that now, but idio, it's out there, don't know it,
but you know it. Also reduce federal individual income taxes,
give us more of our money back. I think that's
part of Trump's master plan. Let's start reshoring all of

(23:16):
that money. If we start bringing in all of this money,
when Democrats inevitably and even many Republicans will talk about
how are we going to pay with these tax cuts,
which I hate that question because pay for a tax cut,
what do you mean pay for a tax cut? You

(23:37):
cut my taxes. I'm incentivized to make even more money.
If I make more money, even at a lower rate,
you get more revenue from me. And if everybody, if
people have more money to spend, then businesses have more
profit to make. And guess what, They're going to hire

(23:58):
more people, They're going to buy more supplies, they're going
to be manufacturing more goods, and that's going to increase
revenue back to the treasury. And you're going to create
more taxpayers because as they expand and grow, then they're
going to create more taxpayers and you can get more
money in So this bull crap about we got to
pay these tax cuts is utter bull crap. Then there's

(24:21):
another thing going on, and I think this is equally
as important as tax cuts. Do you regulate this nation?
Do you regulate us? Now, I'm not saying eliminate all regulations.
I'm going to lunch with a friend today, don't know
where yet, but wherever we go, I want to make

(24:42):
sure that they've had a health inspection. I want to
make sure that I'm not going to get triconomus. I'm
not going to get you know, Jardi. I'm not going
to get whatever from, you know, botulism, from eating at
whatever restaurant we go to. So I still want some
deminimous regulation of our economy, but we've gone way beyond that, way,
way beyond that. I haven't checked today, but yesterday I

(25:06):
was admiring how I can see Pike's Peak from our
west side balcony because we've got clean air. Could it
be cleaner? Why? I bet it could. Why all we
need to do is just eliminate humans, eliminate all human
activity and pristine air. He said, we still got those

(25:27):
damn animals out there, and those animals still fart, they're
still carbon bodies. So you know what, I'm for clean air,
I'm not for the cleanest air because the cleanest air
means we're probably overregulating pollution, we're overregulating industrial output, and
we're over regulating everything, and so now we're going to

(25:52):
end up costing everything more. You want to expand the economy,
stop the regulation, which is actually a good segue into
I wanted to remind everybody about Senate Bill twenty five
to three, the anti Second Amendment, the gun Registry, the

(26:12):
uh the the evisceration of the Second Amendment. It's on
Polus's desk. The Colorado State Shooting Association still has the pot.
You can still sign the petition and I would urge you,
urge you to do so. However, the Hicks On x
has done a financial analysis of this bill, and this

(26:36):
is a great segue into a fantastic example of how,
in the name of trying to make your life safer
by taking away your guns commonly used guns is actually
going to cost the state of Colorado a boat load
of money. If you look at some of the basic

(27:01):
facts on the firearm industry in Colorado, and then we'll
go from there. Based on ATF data alone, Federal Firearm
Licensed Dealers in Colorado, there's about sixteen hundred FFLs in
this state. Each FFL is one company, sometimes just an individual.

(27:23):
One individual authorized to sell or manufacture firearms or AMMO.
A Type one and a Type two FFLs are either
retailers or pawnbrokers. They're involved in the direct sale of
firearms to the public. Now, of those, there's an estimated
twelve hundred or more here in Colorado, the National Shooting

(27:46):
Sports Foundation reports somewhere between eight hundred and fifty and
nine hundred and seventy of those FFLs are held by
small businesses. Then, the National Shooting Sports Foundation goes on
to estimate that in Colorado alone, guns sales, services manufactured

(28:08):
yielded more than one hundred ninety million dollars in business
related tax revenues in Colorado. Got that. Keep that number
in mind. One hundred ninety two million dollars in business
related tax revenue to the state of Colorado. The same
yahoos who are still grappling with a one point five
billion dollar deficit. Now that same industry, the gun industry

(28:31):
in Colorado, talked about regulation. This is all tied back
to the whole thing about regulation. That industry in Colorado
is responsible for more than sixty eight hundred FTE jobs,
four hundred and thirty one million dollars in wages, and
contributed more than one billion dollars, in fact, one point
three billion dollars to Colorado's GDP. Got it. Those are

(28:57):
big numbers on guns. Now, Colorado doesn't have a firearm
registry yet, so when you look at firearms sales, these
are estimates. If you look at CBI background checks on
average over the past six years and estimated four hundred

(29:17):
thousand guns four hundred thousand firearms were purchased annually. That's
based on background checks. In twenty twenty, the data showed
four hundred and eighty seven thousand approvals. Of those, fifty
seven percent or about two hundred and seventy seven thousand,
were handguns. Forty three percent, or about two hundred and

(29:39):
ten thousand, were long rifles shotguns. Now, if you assume
the accuracy of four hundred thousand firearms sold every year,
this yields the following amount of money to Colorado, which
is going to disappear.

Speaker 4 (29:58):
You can't outsource your HVAC, you can't outsource your mechanic,
you can't outsource a lot of things. We need workers,
and I think that's why there's been a shift of
males not going to the university and getting into the
trade because they can make decent money and they are

(30:18):
contributing to society, and that's a job that won't go away.

Speaker 1 (30:23):
Yeah, and God bless them. Don't be a lawyer, be
a tradesman. There's there's my fatherly advice. The day So
let's go back to the guns, because I think the
whole point about regulation, this stupid gun bill in Colorado,
we're all focused on, and rightfully so Dovan, don't get
me wrong. I'm opposed to it vehemently because I think

(30:45):
it's so unconstitutional. But they've actually done a really good
analysis of the cost of this bill. So go back
to the just the assumption that they're four hundred thousand
five firearms sold every year, here's what you get, almost

(31:07):
eight and a half million dollars in sales tax to
Colorado General Fund coffers, six million dollars to the CBI.
You pay a fifteen dollars fee for the background check.
Now that does not include any additional revenue from Proposition KK.

(31:28):
That's the tax on firearms that's effective April one, or
was effective April one. But now let's go to the
expense of the bill, because if if I can't buy
these guns, if I can't buy these guns in Colorado,

(31:49):
then I'm going to find a way to circumvent it
and buy the guns elsewhere. Now they're trying to set
it up so that you can't do that. So if
I buy a gun, say in Oklahoma or New Mexico.
Then that fl that I buy from in New Mexico
has to send it to an FFL in in Colorado. Well,
I'm gonna I'm going to work and find and maybe
some of you already know, but there's got to be

(32:10):
a way around that. So there just won't be any
guns sold in Colorado unless you're willing to go through
all of the expense that's going to be to do it.
And first of all, you've got to get past your sheriff.
And there's there's not a must issue requirement to get
any to even get in the training. This is so

(32:34):
blatantly unconstant. You know what this is in a nutshell
if you understand the entire DC infrastructure that they had
in place that essentially made it impossible to own a
handgun in DC and certainly impossible to conceal carry. They're
trying to replicate that in Colorado. But I want you

(32:57):
to think about the bill itself, because even according to
the footnotes, the budget notes in the bill, this bill
will cost one point three six million four fiscal years
twenty five to twenty six. It'll cost six hundred and
five million dollars in FY twenty six, twenty seven. Now,

(33:22):
of that six hundred and five million dollars, one million
will go to developing the IT infrastructure to track the
verification of you completing the coursework required. The fiscal note
attached to the bill estimates the addition of three full
time employees. That's going to cost about two hundred and

(33:45):
thirty one thousand dollars to support the bill directly, So
you're going to get more bureaucrats from the bill. Now,
to understand the revenue side of the bill, you've got
to look at the process that it invokes. It bans
most semi automatic weapons except for those that complete the
following process. It's a multi step cumbersome process. One receive

(34:08):
a course eligibility card from your county sheriff with a
criminal background check that that then allows you to sign
up for a second part a twelve hour firearm training
course over two days out of your life, and then
three when you complete the course, you get a permit.
Now that permits valid for five years. It allows you

(34:28):
to purchase a firearm contingent on another criminal background check
performed by the retailer through the CBI. So back to
the revenue stream of the bill. The Fiscal Note estimates
revenue of two million dollars solely from collection to funds
for the card. Their estimate is based on forty dollars

(34:49):
collected from fifty thousand citizens annually. Now I think that's dubious.
At best, revenue minus expenditures, this bill costs a boat
load of money