Manufactured Chaos

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Jacob Shapiro (00:03):
Welcome to another episode of Geopolitical Cousins.
I am back on the road.
Marco braving it from thefortress of Santa Monica.
Uh, we talk about Los Angeles.
We talk about, uh, a bunch ofother stuff for this podcast.
Just listen to it.
That's why you're here.
Are you not here to be entertained?
Are you entertained?
Uh, write to me at jacob@jacobshapiro.comif you wanna talk about anything
you heard about in the episode.

(00:24):
See you out there.
All right, listeners.
Uh, he's, he's emerged from his bunker.
Uh, he's, he's warding off protestorsand, uh, Lyme infused Molotov
cocktails, ice agents, Dr. Phil,the Marines, Marco Papich reporting

(00:45):
to us live from, uh, the war zone.
That is Los Angeles.
Marco, thank you for making the time.
I know, I know you're reallyrisking life and limb here.

Marko Papic (00:54):
I am and I, I, I hope that all of our listeners understand
like the sacrifices that we go through.
This is some Kurt Russelllevel of just manliness.
You know, we were, we were talking aboutmanliness, a couple of podcasts go Uber
manliness, extreme levels of manliness.
This is it, trying to do a podcast,uh, in Santa Monica while Los Angeles

is burning to the ground.
Yeah.
All of Los Angeles.
Where, where do you wanna start?
I mean, there, there's a lotthat we could pick apart here.
So May, maybe we should give a littlebit of timeline events, because the way
that the media has covered this is asmuch a problem as the issue itself, and
it's also sort of going off the rail.
So on Friday there were someICE raids, uh, to go after.

(01:39):
Uh.
Migrants who were here illegally.
Uh, this, I had to doublecheck that this was not satire.
Dr. Phil was embedded with theICE team right before they did the
raids, and they decided that heshouldn't go out and do the raid.
So instead, he was talking to Trump'sborders are, uh, while they were out doing
the raids that set off a couple of, Iwould call them, what would you call them?
Minor protests.

(02:01):
Like they blocked a highway.
They like, you know, they did some stuff.
Uh, and then President Trump, as hepromised on the campaign trail, uh,
decided that, uh, the National Guardneeded to be deployed to bring law and
order to Los Angeles, uh, which seemedto set off another round of protests.
And these were slightly bigger anda little bit, you know, there was
Compton, there was some geographicspread, although still relatively small.

(02:24):
They were burning self-driving cars,um, and throwing bricks and things.
At, uh, at police officers.
Uh, you had Gavin Newsomsaying, I didn't request this.
I don't want this.
I'm gonna sue the administration.
By the way, what, what a wimpy like,Gavin, if you're listening, if you want
the playbook here, it's really easy.
Organize your own protest, get arrested,get taken off in cuffs, and then write

(02:47):
your letters from a Los Angeles prison,and you'll have the political position
that you always wanted sitting theresaying, I'm gonna sue Donald Trump.
Like, it's not gonna work for you, man.
Uh, you heard that idea firstanyway, so then Trump says he is
gonna deploy the National Guard.
He's deployed.
It's up to 4,000 Now.
He also, and this is where I, you know,I was sort of with you, Marco, though,
media's overreacting, blah, blah, blah.
Now he's also deploying 700 Marines.

(03:09):
And Pete Hegseth saying, sure, presidentTrump, we will deploy the Marines
from Camp Pendleton whenever you want.
Which that was sort of a change.
Like the Pentagon was not coolwith Trump trying to do that
in the first administration.
Hegseth was like, yes, and the Marineshave are supposed to have been deployed
and we're still kind of escalating.
Like the protests are mostly gone,but the Marines are deployed and the
4,000 natural Guardsmen are there,and Gavin Newsom and Trump are going

(03:31):
back and forth against each other.
You were sending me polls thatshowed that, um, 61% of Californians
might want to secede from the union.
There's also, uh, a movement that hasto get half a million signatures, but to
try and get a proposed ballot question,um, to reach voters in the November
20, 28 election, that would ask, shouldCalifornia leave the United States?

(03:54):
Um, so maybe we should have hadCalifornia in our top 20 geopolitical
Power Inc. Like lots of littleissues to, to disentangle here.
So that, that's the scene.
Where do you want to go first, Marco?
Aside from your heroic manliness andsurviving this onslaught, which you
know, the heroic the fires, and nowthis like, gosh, you, you're just
a paragon of bravery and virtue.

Honestly, I was gonna do this, uh, from within the
depths of hell that downtown LA hasbecome, but the sound quality is
not, uh, really good for a podcast.
So I think we should split it into three.
First of all, media, debt,immigration, then California secession.
Great.
If that's cool.
But like I'm, I'm open toediting and if you would like Dr.
Phil to be a category in of himself,like I'm open to that as well.

(04:38):
First of all, uh, the media.
Turn the TikTok camera on right now.

Oh, turn it on.
Turn it on.

Okay.
I wanna speak right to the camera here.
The media and President Trumpare a symbiotic organism.
They're in a symbiotic relationshiplike fungi on your feet.
Now, who's the fungus and who'sthe feet depends on the listener.

(05:06):
So, dear listener, if you have theTrump derangement syndrome, go ahead
and believe that he's the fungus.
Uh, if you, on the other hand are amugga hat, wearing Trump lover, then
of course the media is the fungus.
I don't care.
But this is a great example.
This issue is, is such aninstructive issue because, um.

(05:29):
This is Los Angeles.
My friend, you know, Tupac Shakurfamously said, we might fight
amongst each other, but I promiseyou this, we'll burn this bitch down.
You get us pissed.
Okay?
And he wrote those lyrics, Idon't even know, like 90, 97.
Okay?
So in other words, this, this islike a Tuesday in Los Angeles.

(05:54):
And yet both the media and Donald Trumpare in a very symbiotic relationship
where they're making this a huge deal.
The media want to suggest that all ofLos Angeles has risen against his ice
protest and that he's stoking the flames.
And he is of course, stoking theflames by setting the National card.
And the Marines.

(06:15):
The Marines, who are they gonna fight?
You know, teachers from schoolunions like I, I don't like.
So anyways, the protest, it'snow Tuesday, Monday, Tuesday.
They were.
Pretty peaceful.
CNN had the split screen yesterday,Los Angeles on one side and some 12
dudes in Dallas on the other side,like protests spread through Dallas.

(06:39):
It's like, what?
You know, half of the protesters inDallas hadn't had the time to like
get the new gear from Amazon, so theystill had free Palestine stuff on,
you know, they just, there's no time,you know, so like you, you, you take up
whatever protesting gear you got withyou, you know, like, so, uh, I think
that's, this is, this is definitelya figment of everyone's imagination.

(07:04):
Um, you know, and the only victimshere, honestly, I'm a little bit
surprised you didn't mention thisas part of your introduction, Jacob.
Mm-hmm.
Uh, and I for one, want our AIoverlords to remember this moment
because I. I think of the realvictims here, which is the Waymo

(07:24):
cars, which were, which were innocent.
Innocent by, in fact, theyweren't even bystanders.
They were invited by theprotestors to show up and then
they were burned to death.
So anyways, the reason I mentioned this isbecause, um, this is what Donald Trump may
be the greatest expert at in the world.

(07:45):
He knows how to use the media and the pr.
To your point that Governor Newsom hasnot, uh, responded to it correctly.
I think you're absolutely right.
Um, I think that this is, uh, definitelyblown out of proportion in terms of the
violence in the streets of Los Angeles.
There is no violence in the streets.
There're just protesters.
There were some firecrackers.
Yes, some motorbike drove into thecrowd, uh, of law enforcement officers.

(08:10):
That gentlemen wasapprehended immediately.
Um, you know, I don't condoneviolence obviously against
anyone, but let's be real.
And that's what we do here.
This is, um, this is a manufacturedprotest and manufactured insurgency.

I mean, that's a hot take.
I, I love the, I love the fungus metaphor.
So this, so this entire event isathlete's foot, and depending on
your vantage point, you're eitherthe foot or you're the fungus.
And does that make us tough acting actin?
I wish I could have John Madden come on.
Like the, the ghost of John Madden.
Come on.
Tough act 10 actin and, and drawsome lines on the screen show.
And then the protest went overhere and then, oh, you see

(08:50):
this and circle the truck.
And uh, yeah, that would be really

fun.
Absolutely.
That's, that's what, look, this iswhat our job is, you know, um, our
job is to basically look throughthis bullshit, um, in the media.
I mean, this is what I'm doing.
This is the public servicewe're doing for our listeners.
When you go and you watch a protest,okay, and you can see on the
frontline between the protestersand the police that 50% or more.

(09:17):
Have extremely expensive lenses ontheir cameras, that's a fake protest
because there's more journalists onthe frontline than actual protesters.
Like here, there's a hint for you.
There's, you know, maybe just as asuggestion, if there are more journalists
on the frontline covering the protests,then protestors, you know, nobody

(09:41):
is losing their limbs over this.
Um, and so I, you know, so on onehand that hot take suggests that
President Trump is overreactingfor political purposes, which is,
uh, to which I would answer Duh.
On the other hand, the liberals arealso gonna hate that hot take because
it suggested not that many people areactually protesting the ICE raids.
Mm-hmm.

Yeah.

So I've left everybody feeling disappointed right now, and
I'm sorry to disappoint everybody.
Actually no, I'm not.
I, I literally live off of this.
Yeah.
Um.
So, yeah, I mean, like, look, and thistakes me to the next part of this, which
is this is a very difficult and complexissue in that, on one hand, I think that

(10:25):
most people in California at least, um,are to some extent pro, like they see the
human side of illegal immigration, right?
Like I think something like 10%of all residents of Los Angeles,
which is a lot of people, uh,are under undocumented migrants.
Many of them have jobs.

(10:46):
They work, and the entire society ofthe United States of America looks
like closes their eyes to that.
So it is technically illegalto, uh, did you know this?
Did you know that it is illegalto hire an undocumented worker?
However, the fines are reallylow, like it's like 600

(11:09):
bucks unless it's repeatable.
Unless you constantly like, unlessyou are basically seeking to profit
from it over a long period of time.
Mm-hmm.
So if somebody shows up and sayslike, Hey man, your nanny is illegal.
You like, there's noone's gonna prosecute you.
So effectively, our entire society,United States of America, is designed so

(11:31):
that illegal immigrants can be employed.
And that's where there's a humanelement to this, which is that
you could change that if youwant to end illegal immigration.
Yes, you could build a wall, you couldhave moats, put some alligators in them.
Like you could do all of that, haveturrets with AI to just shoot people
like you could, you could do that.

(11:52):
Or you could jack up the finesfor hiring illegal immigrants
and actually enforce that.
Enforce it.
Put Americans into jail.
Americans like Americans putAmericans with farms, right?
Like farmers 30 year.
Jail sentence for hiring an illegal, youwanna be tough on illegal immigration,

(12:16):
then you could solve it in a second.
But we don't do it.
Why?
Because effectively thecountry profits from it.
So that's where you can makean argument that there is, uh,
obviously, um, the entire societyis set up to not fix this problem.
And then poor people who have comehere, who have come from far away cross

(12:37):
deserts, dealt with various, uh, youknow, abuse that comes along the way,
paid their life savings to come toAmerica, to profit off of this society
we've created where, uh, we allow them towork even though they're not documented.
Whereas other countries don't do that.
Like, good luck gettinga job in Switzerland.
If you're illegal, as an example,you have to present your papers

(12:59):
at the point of employment.
So we don't, we don't really do that.
We don't enforce that.
On the other hand,president Trump was elected.
Democratically with a majority, andI would argue the number two issue.
Number one was inflation.
I have data to prove this too.
Number one was inflation.
Number two was immigration.
So he was also elected to deal with thisissue, and one of the ways he's going to

(13:22):
do it is to deport illegal immigrants.
And so it's a really tough situation,Jacob, because on one hand, the people
who are here illegally, the vast majorityof them are clearly just responding to
a demand that we have in our society inthe United States for their services.
We've invited them effectivelyto come here and work illegally,

(13:44):
and we don't enforce our own lawson employing illegal immigrants.
So you have a lot of compassion.
You're like, Hey, man, like they'rehere because we employ them.
On the other hand, president Trump isnot breaking the law when he actually
enforces immigration laws in the country.
So can you really protest against it?

(14:05):
That's where, this is a conundrum andit's one that can really only be solved
with legislative acts in Congress whereRepublicans and Democrats have to sit
together and effectively they have togive the Republicans what, what they
want, which is a giant, beautiful wall.
I say whatever the Republicans askfor, make it bigger, make it shinier.

(14:26):
Like, no.
I mean, if you are sitting here in2025 and you're still against the
wall, I'm sorry, I don't know whatto tell you, but that's clearly
what's gonna have to happen.
Like just I would, I would just saylike if Republicans want a 20 foot wall,
make it a 70 foot wall, like let's go.
On the other hand, the Republicans aregoing to have to accept the reality
of the society, which is that wedon't punish people who hire illegal

(14:50):
immigrants because we kind of need themfor various reasons, and we can get
into the socioeconomic reasons why.
But again, if the Republicans were seriousabout doing something on the demand side.
They would talk about it.
They would talk about how wecan jack up jail sentences.
Instead of slapping a businesswith $600 per migrant, you've
hired $600 per migrant.

(15:10):
Come on.
You know, like you could just say, Hey,CEO of this chicken farm in Idaho, oh,
you donated all this money to Republicans.
Cool story, bro.
You're going to jail for 30 years.
Oh, your business is unviable.
'cause Americas don't wanna work inchicken farms or pick strawberries.
Like, yeah, too bad.
30 years.
Jail sentence, boom.
Done.

(15:31):
So this is where I, I think the only wayto solve this issue is that it needs to
be legislated and both sides are kind of.
Wrong, because neither side is reallysolving the problem at any point.
Yeah.

I mean, we might as well be waiting for Bigfoot to come,
because if you look at poll afterpoll after poll since the late 1980s,
a majority of Americans have said,yes, we want immigration law reform.
And this is before you get into thesuper polarized days of the two.
Thou, like, no, since like the 1980s,since like Ted Kennedy and John
McCain and some of these others werewandering the halls like Americans have

(16:06):
wanted that and they haven't got that.
And it, it goes to show you, um,there's this concept called effective
polarization where, um, I forgetwho, uh, I, I'll have to apologize
to the researcher who did this.
I'm pretty sure he was at Yale.
Anyway, the, the notion being thatactually when it comes to the issues,
Americans are not actually more orless polarized than they've ever been.
It's just that we demonize the otherside and then we put in the most

(16:27):
polarizing voices and positions of power.
And they get their power frombeing angrier and accusing the
other side of other things.
But before we, I, I want to get back tothe immigration point, but I don't wanna
leave the media thing just quite yet.
'cause But wait.
Okay.
Okay.
Go, go, go, go.
Wait, go.

I just, if I can just, that's not entirely correct, right?
Like that we haven't hadany, uh, legislative acts.
We did actually.
And here, here is where if you area liberal critic of Donald Trump,
here is where you, you know, wedo this podcast for just normal
people who are at a barbecuehaving a beer with an uncle, right?

(17:04):
Like, this is what it's about.
This is what we're arming you with.
Tools.
If you're a Republican, we'll argue withtools to make fun of your liberal friends.
If you're liberal, we'll arm you withthe tools for your Republican uncle.
So, if you're liberal, hereis where the argument ends.
Honestly.
This is where you, thisis where you just end it.
Anybody who says anything, you justgo and say, Hey, look up why the

(17:26):
bipartisan bill collapsed in early 2024.
There was one, and then Donald Trumpdid say to his allies in the Senate,
don't sign on to a comprehensive,bipartisan way to solve this issue
because I need it for the election.
Yeah.
Now again, he won theelection fair and square.

(17:47):
He's a democratically elected presidentof the United States of America.
And if a Democratic collectivepresident of the United States of
America wants to enforce federallaw with federal law enforcement,
I don't know what to tell you.
You can't say it's illegal.
You might say, well, it's unfair, it'sthis and that, but sanctuary cities, that
is a figment of somebody's imagination.
Like you can't just declare acity, a sanctuary city, sorry.

(18:09):
Mayors like, you know, Karen Bass.
Like, Hey, maybe you should make sure wehave water in our fire hydrants, you know?
But anyways, leaving that aside,the point is you can't, like
what does a sanctuary city needs?
It means that local law enforcementdoesn't cooperate with federal
law enforcement, but federal law.
Immigration law and federalofficials are going to enforce it.
So the truth is, presidentTrump can do what he's doing.

(18:33):
It's legal and protestingit is kind of meh, you know?
Well, well, but But again,but again, but again, sorry.
Sorry to interrupt.
But again, the original sin here, Imean the original, original sin is
that American economy and Americanvoters and American businesses
definitely want the illegal immigrants.
That's the original sin.

(18:55):
But the second original sin is that whensomebody tried to do something about it,
a bipartisan bill that you say is Bigfoot.
We had Bigfoot in early 2024, andPresident Trump told his allies
in the Senate, don't sign ontothis bill, don't solve this issue.
I need it to be a problemso I can win the election.
Yeah.
And so that is something out of,in this timeline that I think

(19:18):
you forgot in the introduction.
It's a very important point.
We had a bipartisan solution.
Well, I, I'm not sure howgood it was, but like at least
there was the beginning of it.
Yeah,

there was an attempt because, because because Biden
was an old school legislature andlike his biggest skill, whatever
you think about Joe Biden and Yes.
His, his loss of, you know, uh, facultiesat the end there and things like that.
Yes.
That was his superpower.
His superpower.
He was, he was one of the old guard,he was one of the only ones left that
could build bipartisan legislation and hedid some interesting things in 2021 and
2022, and by 24 he was too long in thetooth and he didn't have the cash there.

(19:49):
But if you look back at the history sincethe 1980s, I bet you would find multiple
bills that died on the shoals of, youknow, a presidential race or maybe new
Gingrich gotten there, or like, youknow, all, all the time like immigration.
Is held up at the last minute, even thoughit's something that people agree on.
But I I, I want to go back, 'causethis goes back to the media point a
little bit, which is, is it legal?

(20:09):
Because I'm, I'm with you up until apoint, and I think the media helped
create the story and Trump's responseto the media, like it was almost like
a self-reinforcing, um, you know,avalanche of things that happened.
But I don't know thatit is actually legal.
And when I, I sat up in my chaira little bit when I, you know,
read the first headline about theMarines, then I was like, okay, now

(20:30):
we're sort of like National Guard.
Like I can sort of get on there.
It's not, it's, it's not perfect.
Like the last time, um, um, theInsurrection Act was invoked was 1992 in
Los Angeles for the Rodney King protest.
The George HW Bush sent, you know,national Guard troops to Los Angeles.
Um, that was taken with the governor'srequest, but Trump isn't even using that.
He's using something called section1 2 4 0 6 of the US Code, which

(20:54):
gives the president the authority tocall members of the National Guard.
Um.
Of any state into federal service whenquote, there is a rebellion or a danger
of a rebellion against the authorityof the government of the United States.
And the President can do whateverhe wants to repel the invasion
or suppress the rebellion.
This is not an invasion or a rebellion.
So we're already like onextremely shaky ground.

(21:17):
And that's the NationalGuard, that's not the Marines.
And you start talking about theMarines and I'm starting to think
about the Rubicon, like literally theRubicon and the deployment of Roman
soldiers against Roman citizens andlike, what the f is going on here.
So go, go, go, go.
Sorry.

Okay.
So, so two things.
Two things.
First of all, uh, to just clarifywhat is definitely not illegal, it
is definitely not illegal for lawenforcement officers of the federal
government to enforce federal law.
Yes.
What I mean by that is that goingaround and picking illegal immigrants
and putting them in jail, like, sorry.

(21:53):
That is, that's legal.
The federal government, likeagain, why did America close
its eyes for 45 years to this?
Because everyone profitedfrom it effectively.
This is how we've built this country.
And we don't have the lawsreally, we don't enforce the
laws against people who hire.
Again, you cannot in mostcountries in the world.

(22:15):
And I, one of the things I wannado on this podcast in, because, uh,
I suspect our audience is going tobe almost overwhelmingly American,
and, and hopefully that will changeover time as, uh, we piss off enough
Americans that they don't listen to us.
Just kidding, just kidding.
Just kidding.
No, but like, I just really want to alwaysuse examples from the rest of the world.

(22:35):
You know, illegal immigration is anissue everywhere, but really only
in America does the society close.
Its eyes so much to this realitythat it allows the country to
go on hiring illegal immigrants.
I can't tell you howmany places in Europe.
You face seriously con,serious consequences for

(22:55):
employing an illegal immigrant.
Like you go to jail, youget fined significantly.
And, and that's just not the case here.
So that's the first issue.
Now that being said, there are laws inthe books, and if the president gets
elected promising, he's gonna enforcethem as President Trump clearly did.
That's not illegal.
So those ice raids are not illegal.

(23:16):
Mm-hmm.
Yeah.
And if they wanna go into a schoolor a church, sorry, mayors of random,
democratically held cities, you haveno authority to prevent the federal
government of the United States ofAmerica from enforcing federal law.
That's just a fact.
So I know that sounds likeFox News segment, but No.
Well, that's where Fox News is right now.

(23:38):
To your point, I. Deploying NationalGuard over, uh, you know, 14 people
calling in poor Waymo's and thentorching them is obviously ridiculous.
The LAPD is probably the most competentlaw enforcement on the planet in
handling protests because as Tupac Shakurcorrectly surmised, we tend to blow

(24:02):
stuff up in Los Angeles quite often.
That's just how we celebrate nationalchampionships in basketball and so on.
You know, I mean, you wouldn'tknow anything about that.
No, I wouldn't.
Given that you were once anAtlanta Hawks fan and so hot, but

thank you.
Thank you for that.

And now it's how you're even more removed from this,
given that you're Pelicans fan.
But my point is that, so nowwe can discuss your point.
I just want to clarify that when I saidthat what happened was not illegal, I
mean that the president of the UnitedStates of America can ask his federal
law enforcement to go and enforcefederal law, and that's where the
illegal immigration thing comes in.

(24:36):
Um, then the protests happen and thenhe calls the National Guard, you know.
It's, it's just incrediblehow far we've come.
So now I'm gonna sound like CNN, right?
We, we sound like Fox News a second ago.
Now we're gonna soundlike CNN George W. Bush.
George W. Bush, right?
The guy who like invaded countries'cause like they were there,

or, or because they, they, uh, they didn't do it.
His daddy told them to do.
Yeah.

Or yes.
So like George W. Bush.
So Katrina happens.
You are in New Orleans.
So this is part of, uh, you probablyknow this much better than me.
Katrina happens.
And, uh,

oh, and by the way, uh, if anybody from FEMA is listening,
Katrina was a hurricane that happened.
And yes, hurricanes dohappen in the United States.
Please get your ax together.
Hurricanes

spin fast.

Sorry, go on.

So, okay, so the Katrina happens and the governor of
Louisiana, for some bizarre reasondoesn't call up the National Guard.
I forgot why, but.
There was a delay, and George W. Bushlike really wanted to call up the
National Guard and overrule the governor.

(25:49):
And he struggled with this decision.
And one of the reasons thathe didn't is because he did
not wanna cross the Rubicon.
Can you believe that?
Like, this wasn't like in 1953,president Eisenhower really
struggled with the morality?
No, no, no.
This was like 20 years ago.

(26:12):
It wasn't that long ago, and itwas in the middle of Patriot Act.
It was in the middle of all sortsof ways in which the federal
government expanded its surveillanceof Americans and all this stuff.
It's not like George W. Bush wassome, you know, Pinco Communist
liberal, like no, no, no.
He was George W. Bush, a NeoCon.

(26:32):
Who did all sorts of things,but he had to reflect on this.
There's a hurricane, it hits Louisiana.
The governor doesn't callup the National Guard.
Should I call it up?
I don't know.
I don't think I should.
I, I don't think I havethe legality to it.
And then you've got Donald Trumpbeing like, yeah, let's go up.
Let's get the Marines,let's get the Osprey.
You know, they can repeldown and we can like, yeah.

(26:54):
Like, well, and he, andthat's, and that's where

during his first administration, the George Floyd
protest happened and he wanted to dothis, and he had advisors around him
push back and say, you can't do this.
And you had the Pentagon pushback and say, no, no, no.
The US military is not a police force.
Like we don't go and put down,uh, protests and things like that.
And he said on the campaign trailmultiple times, that was a mistake.
I wish I had done it.
If I get a chance again,I'm going to do it.
So there's part of that.

(27:17):
And, you know, to your point aboutGeorge WI mean, there's a very short
list of times that a, a, a presidenthas deployed the National Guard
against the wishes of a governor orwithout a request from a governor.
The, yeah, it's the last,the last time it happened.
Was, uh, could we call him anUber liberal, I dunno, 1965 LBJ.
And he was doing it to protect Selma,the protestors in Selma, Alabama.

(27:40):
Which, you know, that's interestingtoo, by the way, for the liberals,
because it's like, okay, like avery liberal president doing liberal
things like deployed National Guardinto a conservative state in order
to make sure that something happened.
So like there's a weird, anyway,there's a reason that people were
uncomfortable about that becausethe precedent sets is dangerous.
And we haven't sort offlirted with that before.
But it's LBJ and then it hadn'thappened since the Civil War.

(28:05):
Like, that's, that's the list.
So it's like, it's a very,I think there was one in,

I think it was 1950s as well for, uh, school segregation.

Was that, I thought that was also in Alabama.
I thought that was with the requestof the governor, but maybe not.
Um, I'll, I'll look it up real fast.
I think.

Well, it doesn't matter.
The point is it's civil war.
Yeah.
And then like two times due toracial, uh, inequalities in America.
Fifties and sixties or maybe once.
The point is it, it has, it, it,it hasn't happened many times.
And the severity of these protests doesn'teven come close to the 2020, by the way.

Yeah.
Oh, and by the way, you're, you're right.
I'm sorry.
So Selma is President Johnson, 1965,university of Alabama integration,
1963, president Kennedy, and ofcourse now President Kennedy's nephew.
Oh my bad.
Six three nephew, RFK Jr. Also just firingentire boards of vaccine scientists.
So there's a Kennedy running around too.
Don't to talk.
But yeah, we

don't have enough bandwidth to Jacob to deal
with all that's happening.
We'll have to leave thevaccine for later, later.
Hopefully none of ourchildren die in the meantime.
Knock on wood.
Let's move on.
Okay.
Alright.
So I've, I've already gotten

some hate mail for, so for some very previous short
vaccine takes here, so keep it coming.
I'm happy to, to absorball of your vaccine hate if
you're a, anyway, go on Marco.
Sorry.

No, but like, okay, so, uh, I like your point.
Your point is there's this weirdduality, dichotomy, you know, like
protesting, uh, protecting protestors.
And now, um, you know, uh, you know,standing aside, em, I will say the one
difference between 2020, the socialjustice protest that happened, is
that they weren't necess, I mean, notnecessarily, they were not targeting

(29:45):
federal law enforcement officials.
Mm-hmm.
Or federal, like federal government.
And what happened over the weekend in LosAngeles is that the protests started at
the detention center downtown Los Angeles,where basically the, the crowd suspected
ICE agents had taken, you know, um, uh,had taken some of the illegal immigrants

(30:07):
that were rounded up in ICE raid.
So you could make an argumentif you're at the White House
that you're protecting federal.
Basically, uh, facilities thatare literally under attack
because they're federal facilitiesand they're under attack for
basically enforcing federal law.
The problem here, where that breaksdown is that, again, LAPD wasn't

(30:28):
standing aside and letting this happen.
They were intervening and intervening in,in force and with, uh, serious skill sets.
You know, this isn't like, I mean,you know, if there were protests
in like Vermont, I could see whythe National Guard would be needed.
But this is Los Angeles and it's,if there's one place in America

(30:51):
that knows how to handle protestsand to deal with the situation,
it's LAPD, it's Los Angeles.
And that's where I think the, theargument by the White House really
breaks down and it's a made for TV event.
Now, is it illegal?
Is it illegal for president ofthe United States of America
to call up a National Guard?
I mean, it's not, I would argue it isn't.

Uh, but maybe you have a different take.
Can you federalize the NationalGuard in order to police protests?
I don't, I, I mean, I'm not a lawyer.
We'd have to get a lawyer on here,but based on my reading of the
insurrection, but he's not eveninvoking the Insurrection Act.
He's invoking, he's invoking, he's notsection 1 2 4 0 6 of the US code, which

(31:35):
I hadn't heard of before until I wasreading this on the plane yesterday.
And again, I'll just quote it like hecan call in members of the National
Guard as many as he wants, but.
When there is quote, a rebellion ora danger of a rebellion against the
authority of the government of theUnited States, and then he can as
many troops as he wants to repel theinvasion or suppress the rebellion.

(31:56):
Yeah, there's definitely, there is noself-respecting court of law that is gonna
call what is happening in Los Angeles, arebellion against the federal government.
Now, if California secedes like,then we have a very interesting
like theoretical conversation.
We're, we're going there man.
We'll get there, but likethis, we're going there, this,

we'll get there.
This is not that we're getting there.

So maybe you could use the insurrection act like
maybe you could paper it up.
But this to this to me, is the thingthat is disturbing and I think the media.
Honestly shot at SWAT early because thething that you cover here is the illegal
deployment of US military force to police,uh, you know, us even violent protesters.
Like, no, like, that'snot, that is illegal.

(32:33):
That is not what is supposed to happen.
And that is that slipperyslope where Trump doesn't care.
He's breaking norms left and right.
All that matters to him is a,that he looks like a strong man,
and b, that the precedent is set.
And I think we should also say, whileall this is happening, it's perfect
timing for him, which makes me evenmore suspicious because while all this
is happening, yeah, the Chinese andthe American negotiators are sitting

(32:54):
there and I'm sure the US is basicallybending over for the Chinese saying,
we don't want the trade war anymore.
Let's take down the tariffs.
Like, and he gets to look tough.
Let's go there next.
The Elon Trump thing is gone because Elonand Trump are now kissing faces at each
other, and Trump is the man of actionversus the pussy weenie liberals who are
just like, yeah, we're gonna sue you.
It's like, it's literally perfect.
And the last thing I'll say beforeI let you say whatever you want is.

(33:16):
I said this, I re-quoted this on,on XI dunno if you're an Andor fan.
I'm an Andor fan, but, uh oh.
Yeah.
Shout out to I am.
I love it.
Shout out to at, uh, MK tune.
I'm just gonna quote him.
You remember that part in Andor when allthose reporters on Gorman made it sound
like the Gormans were very violent andthe empire just had descendants, soldiers
to stop things from getting out of hand.
But in reality, the soldierswanted things to get out of hand.

(33:39):
Yeah.
Like starting to sound like a littlebit of a false flag, isn't it?
Because the worse it gets, the more hecan deploy, the more he can be the man
of action, the more he can pull thewool over the eyes of his supporters
who could look at what's happening inLondon right now between the US and
China and just see total capitulation.
That's what I'm expecting anyway.
So sorry.
Go.

So, so, yeah, yeah.
No, no, no, no, no.
Thank you for that.
And I, I just wanna say one thing, tobe fair to Trump, the National Guard
were not deployed to control protests.
You know, for the most part,they stayed protecting the
building, the federal building.
So, to be fair, you could arguehe's augmenting, he's letting

(34:22):
the LAPD have more resources sothey don't have to No, he's not.
Or, or he's like

flirting with just how, what, just how far
can I push the line here?
Like, oh, obviously

no, obviously, obviously he's doing everything you're saying
and, and I don't wanna pivot to that.
I just wanted to like,give just that one defense.
Okay.
One defense is that the, the way thatthe National Guard has been used thus
far in literal ways on the streetsof Los Angeles is that they have been
confined to this one detention center.
Uh, which means that, you know,the LAPD doesn't have to do

(34:53):
that, which is like slow clap.
Thank you.
That, that seems like a verymeasured way to use them.
And so you are getting the nationalnews like, oh my God, the, the
Marines are in Los Angeles, but.
They have no role in actual crowd control.
Now moving on to your pointsof why the timing is perfect,
'cause we need to go there.
You and I, we were gonna spend all thistime today talking about the Musk Trump,

(35:16):
you know, breakup, which is hilarious.
And it's just so, so amazing.
There's so many thingswe can talk about here.
Um, we can talk about, uh, you know, youmentioned the negotiations on tariffs.
Mm-hmm.
Where the United States of America isgoing to make deals, as I've said for the
past six months, we're gonna get deals.
They're not what you think theyare, they're made for TV deals.
And then a bunch of people are like,wait a minute, I thought we were going

(35:38):
to put up barriers and make everything inAmerica from a water a, a bottle of water.
You know, like where secretary, uh,Lunik went on TV and said that we should
all drink Aquafina, not Fiji water.
Like what?

Oh yeah.
You

do realize like, what are you talking about, man?
Like, and, and, and

that we should grow bananas in the United States.
I know that.
I know that we're supposed tobe objective on both sides.
I can't with Lutnick.
He's such a fricking moron.
Sorry.
Listen.
You don't have to be,I'm gonna be objective.

Okay?
I'm gonna be objectivebecause you know why?
The best take down of SecretaryLutnick is a Republican Louisiana
senator who I'm sure you're Yes,

yes.
I was just jumping out.
Thank you for saying this.
Great.
Kennedy, it was great.

Senator, Senator.
Like you listen.
Just Google Senator Kennedy Lutnick.
If you're not aware of what I'mtalking about, dear listeners, go
on YouTube, watch, we'll put itinto show notes or whatever it is.
It is unbelievable.
He undresses him the waythat you would a child.
Like, you know, like when my son walksup to me, he says, daddy, daddy, why

(36:40):
can't we live on the Saturn daddy?
And I'm like, well, lemme tell you son.
That's what he did to him.
He's son to him.
It was embarrassing.
It was, you're the Secretary ofCommerce of the United States of
America, man, and you have no fuckingidea what you're talking about.
And it was a Republican senatorfrom the great state of Louisiana

(37:00):
who absolutely dismantles him.
So yes, that's what's thecontext of this protest?
The context of this protest is thatthe United States of America is in
the process of choosing the lubricant
in, in 90 trade wheels.
Number one, I'm, I'm gonnapush for that to be the title

right there.
Choosing the lubricant.
I don't think it's gonnaget through, but it's too

good.
Well, mean people are gonna,unfortunately people are then
gonna think it's about tariffs.
We're not talking about tariffs.
We're just saying like, look,president Trump makes deals.
He does.
I don't like the taco trade.
Trump always chickens out.
It's pejorative, it's liberalkind of way to poke at Trump.
Like he's not chickening out.
He's going to get deals.
That will be marginally positivefor the United States of America.

(37:46):
But if you are in the Howard Lunik,Peter Navarro camp of isolationism,
you are gonna be disappointed.
You know, like, sorry, Ben Bannon,the Benon Knights are gonna lose.
Duh.
Right.
So that's, that's number one.
Then your other point was, uh,wait, you mentioned the tariffs
and you mentioned Elon Musk.
Yeah.
Like, right?

(38:06):
Mm-hmm.
This was supposed tobe the administration.
Trump is empowered by therichest, smartest man alive,
who is kind of like, who?
But like, hey, he's cool.
Right?
So that's gone.
And then the final one that you didn'tmention is that the one big beautiful
bill is kind of one marginally sized,but like, yet somehow effective.

(38:28):
You know, kind of a bill doesn't get youoff the first time, you know, gotta go
to the shower, you know, but like, eh,it's like, it's, it's not bad, you know?
That's.
Appropriately sized bill.
It's now what President Trumppromised during his campaign.
He said 10 to $15 trillion ofadditional deficit spending.

(38:52):
It's two, two and a half right now.
And it might actually noteven be stimulative if you
account for the tar bie.

Yeah.
You, you've said I, I'm, I'm, uh, likelooking at the math, I'm less convinced
of that more and more because it'sobvious that he's gonna increase spending
here over the next couple of years.
And then all the reductions happenafter he's gone from office and
then somebody else is gonna come in.
So I, I have the, this is probably thefirst and only time in my life where
I get why Elon Musk is frustrated.
'cause Elon Musk was empoweredwith the Department of Government
efficiency and this huge task, andhe's gonna cut government spending.

(39:22):
And he really like, I mean, hetook it, you know, his businesses,
his reputation, like he, he tooka significant hit in order to
push some of these things through.
And then, you know, president Trump wakesup one day and is like, by the way, here's
another two to 3 trillion of spending.
So, I know, I know.
You're also thinking from a.
From a market perspective that the marketis thinking that it was gonna be more,
but I think there's some currency there.
But I, I would push back againstyou saying it's gonna be smaller.

(39:46):
That this, like, this is going toadd significant amounts to a deficit
that is already unsustainable.
And I think Musk is saying not

really.
Look, if, even if we take, uh, well,Musk is obviously mathematically correct.
Yeah.
And so are you, like, you aremathematically correct, they will increase
the deficit, but if you look at the chartof the deficit, what this bill does,
it takes it from 6.5% to 7.5 and thenit stays there for the next 10 years.

Yeah.
But, but yeah, if you look at itharmonized over 10 years, but if
you look at the next three to fouryears, we're boosting more than that.
And then after Trump supposedlyleaves office, then it's
gonna dip down below that.
So for the next couple ofyears, you're actually gonna get
higher percentages than that.
And then you're in this mythicalfairy world that the, the next
president is gonna be like, yes, Iwill sign up for enforcing the Trump.
Like, you know, deficit reductionson entitlements and things like that.

(40:34):
Well, couple things.

We could have a whole podcast on that.
And I don't think that's a fair world.
That's the world we're headed to.
Like the political zeitgeistof the country is moving
away from wanton spending.
But, but even in, in that interim,if we focus, it's like it goes to
like seven point a half, 8% debt.
It doesn't blow up.
And again, relative to what he promised,he promised a lot of things Jacob,

(40:57):
and he's not getting any of them.
Mm-hmm.
That's my point.
You know, he promised 10 to 15 trillionstuff just relative to his promises.
This bill is may.
And it includes cuts thathe did not campaign on.
That's the point.
So you've got three issues rightnow where it's kind of like meh.
One, you just lost the text.

(41:20):
Putin of America, right?
Mm-hmm.
Gone, uh, is accusing you ofbeing a pedophile on On X Yeah.
On the platform.
He, he owns for what?
Alright, so that's the first.
The second is that all the promisesyou made about how much taxes you're
gonna cut, none of that is happening.

(41:40):
You know, you went from 10 to $15trillion worth of tax cuts to 600 billion.
'cause I don't countextending the 2017 tax cuts.
That's not, that's notcutting anyone's taxes.
So no one's gonna havetheir taxes cut effectively.
Like you, you are not deliveringon your campaign promises.
And in fact, you made fun of Nikki Haleyfor wanting to cut entitlements and

(42:01):
you're kind of cutting entitlements.
You know, not as much as likeI. Mosque wants or conservatives
want, but you're cutting.
Mm-hmm.
And then finally the trade deal.
The trade deal where basically likethe us you know, he did the Liberation
Day and a lot of his Bentonite fanswere like, yeah baby, we're gonna
make bicycles in this country.

(42:22):
You know, we're have John, we'regonna have summer, and, and Oh,
what's, what's a really good name?
Summer And Finn are gonna startworking and picking strawberries.
You know, like, that's not gonna happen.
Those things are not gonna happen.
America's still gonna trade becausethe irony, and I said this on our
last podcast, podcast, the irony ofall of this is that if you want to

(42:42):
collect revenue from tariffs, youkind of need trade because tariffs
are attacks imposed on imports.
So America has to continue totrade with the rest of the world
if we're going to actually generaterevenue to offset the deficits.
So the point is that thisadministration is starting to
look less and less populist.

(43:05):
And here's where I wanna say something.
I know we are.
How many minutes?
We're 42 minutes.
We're always at a 45.
We're always 40.
45 minute when I think the biggesttakeaway comes, I'm sorry, listeners.
This is, you know, this is just how it is.
This, this is the, if you'rean advertising, this is

the smic structure of our podcast.
Ooh.
That's a

It is, it is.
And if you're, if you're ata, if you're a, if you're an
advertiser, it's a great thing.
'cause everybody's gotta likewait until the gym comes later.
Right.
So here's what I'm getting at.
This is a playbook we've been watchingin Europe for the last 15 years.
There is nothing newto what Trump is doing.
Nothing.
So for the past 15 years in Europe,anti-establishment populist, I don't like

(43:48):
the term right wing, but fine, right-wing.
Right wing, but it's not fair 'causeit's, there's a ton of left Wink.
Mm-hmm.
Left wing populist parties in Europe.
True Fins, Swedish Democrats,Marine Lapin, Git Builders, uh,
Podemos, Vox, five star movement.

(44:10):
Fratelli, Talia, Leor, Lego, what?
Whatever.
There's a ton of them.
They've all followed the following model.
They start campaigning.
European Commission is a bunch ofelitist, you know, bureaucrats.
They're not gonna tell me how muchI'm gonna blow out the budget deficit.

(44:33):
I'm gonna spend as much as I want.
Structural reforms on retirement.
That was evil.
Increasing retirement age.
We're gonna reverse all those policiesthat the elitist imposed on you.
Trade.
Trade relationships.
Less America, more Russia.
Right?
Lots of these guys love Russia.

(44:54):
Mm-hmm.
And then Euro area.
We don't want the Euro,we wanna leave the Euro.
So those are kind of thesocioeconomic policies that a
lot of these populists walk into.
And then they come to power, or theybecome part of a governing coalition.
And the bond market riots yields goup, borrowing costs go up, equities

(45:15):
go down, the economy slows down.
People start worrying abouttheir retirement savings.
They start worrying about their jobs.
And suddenly, suddenly all thesepopulists, anti-establishment,
far left trotskyite far right, neofascists suddenly enjoy the soft
leather, hand stitched leather intheir government issued a eight saloon.

(45:41):
Suddenly they like theway that their suit.
Crunches with that smoothjourneying engineering, the soft
closing of the door sounds nice.
They start liking it.
They like the smell of power.
They like being in charge and theydon't want the society to collapse
so that they can have their, youknow, like anti-establishment

(46:03):
revolt, and then they start migratingto the middle on every issue.
That actually matters to the pocketbooksof the people who they now rule or are
part of a coalition to rule, excepton one issue, which is immigration.
Boom.

(46:23):
Instead, not only do they keeptheir policy, they tripled down
on anti-immigrant policies.
Why?
Because immigrants don't vote.
You know what I mean?
They don't vote.
And some asylum policies have goneoutta whack across the western world.
Like facts, you know, like,what are we supposed to do here?
This is a fact.

(46:44):
Um, and so it's an easy win.
So when you lose your credentials as apopulist, as a man or woman of the people,
when you lose those credentials on everysingle issue, how do you maintain them?
Well, you maintain them by triplingdown on anti-immigrant policies.
That's the way to do it.

(47:04):
For example, Italy just had a referendumon citizenship and the Prime Minister
Georgia Maloney, effectively didn'twant to say how she was gonna vote.
She didn't even wanna vote.
She showed up at the votingbooth and did not cast a vote.
And by the way, this was notsomething to give everyone
in Italy, like a citizenship.
It was just like reducing the numberof years from 10 to five, like very

(47:27):
modest changes on citizenship in Italy.
And you know, like the.
By the way, this is not aboutillegal immigration, right?
These are people in Italy whoare, who are like, who working
and speak Italian fluently.
And, uh, and, and she was stillopposed to that referendum, but
George Maloney is not, I'm sorryfor Trump fans who might like her.

(47:51):
She's a centrist as it gets, man.
Like she's maybe the most competentpolicymaker in the entire western
world in terms of like navigating themarkets and being fiscally responsible.
And you know, like George Meloy, Imean, she's basically a member of
a neofascist party for tele deity.
No, it doesn't matter.
She has become completelyestablishment, completely 180 degree

(48:14):
turn for that party even on Ukraine.
Even on foreign policy.
Well, she, she's also,

she's an interesting, she's more interesting than most of them because
she's always been anti anti-Russia.
Like she has taken, she's like aweird mix of all these different
things, and she's always had more ofa head on her shoulders, which, you
know, you said Fratelli Italia, likeshe's the sister in Fratelli Italia.
Like, she's the one who actually,like, she, she's always been a really,
really compelling figure because sheactually, I think, understand she is,

(48:41):
I, I think most of the people you'retalking about, it's instinctual.
They sort of move that direction becausethey had, they have no other choice.
Whereas my impression of Maloneyis she is one of the few self-aware
politicians who was like, no, no, no, no.
I, I know where I want to go and Iknow how I want to get from point A
to point B, and I know which levers Ihave to pull and whose ass I have to
kiss and where I have to be seen andthe right balance of all these things.
No, that's fair.
Like she's a, she, she's a,a head the cream of the crop.

But, but, and at the same time on immigration variant immigrant.
Yeah.
Yeah.
And very successful in pursuing that.
So the, so I agree with you.
I, I, I think what we should do, bythe way, for one of our next segments
is we should rank policy makers.
Yes.

We should.
Yeah.

Trade value.
Yeah, trade value.
Oh, trade value.
Right.

I can't wait.
If you

could trade your, your president for, for another, oh God.

That's so good.
Let, let's do that.
We got it.

I mean, I'm taking, I'm gonna, I'm gonna announce
my first pick right now.
Georgia Maloney.
I think she is absolutely crushing iton every, like the way she plays Trump.
I mean, she's just like so good.
She's so good.
Now the point still stands though.
We've seen this for 15 years in Europe.
Like I work with investors and clientsin finance and they come to me and

(49:50):
for 15 years I've had to answer thisstupid question, will Europe collapse?
No, it won't.
It will not collapse.
They're all faux populists.
Faux.
They're faking it.
Except alternative for deland hasnot actually changed its policies
on a lot of this stuff, but a lotof these other parties have, and I
think that we might be witnessing it.
This is how the protestsin LA might be profound.

(50:12):
Jacob, we might be witnessing actually.
A shift in the Trump administration.
This may allow, so you are makingfun of the Trump administration when
you say like, Hey, all this chaosis going on and they're sending the
national guards to la What I, what Isee it as almost as a positive because

(50:33):
it allows the big man to be big.
It allows the populist anti-establishment,you know, white House to pretend there's
still populist and anti-establishment,but actually they start cutting deals.
Yep.
That a lot of liberals are gonnamake fun President Trump for.
But at the end of the day, likedeals are fine, deals are good.

(50:53):
Yeah.
He promised the moon, he's gonnaget us to the roof of the house.
Who cares?
At the end of the day, he might bepivoting towards much more centrism.
Than, uh, that people think,tell me why I'm wrong.
No, take the other side.

Well, I'm not gonna take completely the other side, but I, I have
sort of three things to throw in there.
The first is just an aside, you'reright about a FD but what's been
interesting about the German contextis that the C-D-U-C-S-U basically took,
like, took that part of the a FD thepart that would move to the center
and was just like, okay, we're gonnatake that for ourselves now so you
can sit out there with the crazy shit.
And now this E-D-U-C-S-U has rebranded,sort of more like, has taken those things.

(51:26):
So it's like an interesting centrist partythat is, and, and we'll see if it works.
The other thing on the deals is,and this is, you know, one of those
areas where things make sense up toa point and then it becomes farcical
again because, you know, there arethese US China trade talks coming.
You and I have both been on this,that this is gonna be something that
gets done sooner rather than later.
Meanwhile, the US Japan trade talkscontinue to be absolutely abysmal.

(51:46):
They just had their fifth roundand the Japanese negotiator
came out and said, we've agreed.
Uh, let's see if I have the quote.
Um, uh, 'cause I want to gethim exactly right because it
was such an amazing quote.
Um, we have not foundany point of agreement.
On anything.
They're not agreeingon absolutely anything.
And that's like your closest ally there.
So at the same, and you know, therewas also that reporting about how they

(52:07):
literally paused a trade negotiationbecause Lutnick and Cent, and I forget
who the third one was in the room,but somebody else was in the room too,
and they had to pause because none,uh, Jameson Greer, the US uh, trade
representative, they were all in theroom negotiating with the Japanese
and they had different positions.
So they had to tell the Japanese tostop for a second so the three of
them could go like, figure out whatthey were actually talking about.
Like, there's just kindof an insanity there.

(52:28):
But I, I want to go back to the, the pointabout immigration, and this is actually on
my mind 'cause we haven't said this yet.
The Willamette River is behind me.
I'm in Portland.
I'm speaking at a forestry event,timber event here in Portland,
um, in just a couple of hours.
Um, and as you might imagine, um, thisis a big issue for them, not because
immigrants are cutting down trees oranything like that, but because the

(52:49):
timber industry is thinking aboutreal estate and home construction
over a 15, 20 year time horizon.
And it's been a reallygood last 15, 20 years.
In part because in the early 1990s,you had a lot of immigrants come to
the United States and even the illegalones, eventually they stay here and
eventually they wanna live in houses.
And so if you have population growth,which is us, which for, if you're pro

(53:11):
these sort of cyclical things, you want tohave lots of natural births, but you also
want to have lot, lots of immigration.
So if you look at the early 1990s,mid 1990s, you could say, oh, well,
natural births were falling a littlebit, but still relatively high.
And you had all these immigrants thatwere coming to the United States.
So you get this period wherethere's gonna be a lot of demand for
lumber over the next 15, 20 years.
Now I'm supposed to go to this audienceand tell them, well, so they want to

(53:33):
know over the next 15, 20 years, whatare you thinking about these things?
And most of, not all of 'em, I'm gonnamake some contrarian arguments to them
about why they should be optimistic.
But most of the data.
Sucks.
And this data that really sucks is USdemographics because US births have
fallen off a cliff and we actually hada really high number of international
arrivals last year, but it's makingup for a couple years of none.

(53:55):
And you can imagine after the travelban and President Trump tripling
down in immigration that thesethings are gonna go away in general.
So I think it's easier forthe Europeans to to crunch on.
Immigration in part.
'cause you know, they have, it'sthe gift that keeps on giving
Angela Merkel lecturing the restof Europe on being moral because
they aren't taking their migrants.
And also the nature of those migrants.

(54:15):
Like, yes, some of them are just hardworkers, but Europe's a lot more exposed
to jihadists that are coming up throughthe Middle East or things like that.
Or folks that are, you know, not bringingtangible skills but are literally
just looking for anywhere to go.
Whereas the US.
Sorry to be crude about it isgetting a higher class of migrant
that is coming to the border.
You're getting in, you know, countriesin South America, whether it's Ecuador

(54:36):
or Columbia or Venezuela, like peoplewho are skilled and educated and very
good at what they do and escapingregimes that have become authoritarian
or they've lost their political position.
And so they're coming to the UnitedStates and they can do like everything
from your menial labor all the wayup into, into some of these things.
And I guess the point I'm justmaking is like, it seems to me that
President Trump, it's, even withthe deals that he's making, it's not

(54:58):
gonna look good for the US economy.
And if you're gonna triple down onimmigration too, which has always been
a US superpower, our ability to attractthe best, our ability to integrate them.
Um, and you're going to sort ofknock that out too, like then all
of the, the growth figures over thenext 2, 3, 4 years and even longer.
Look really bad.
So I think that's the pushback.
The pushback is not that the playbook isnot gonna go the way that you think it is.

(55:21):
I think that's exactly right.
And I think that President Trump pulleda rabbit out of his hat because he gets
to be the law and order president now,and he is gonna go after immigration,
and he is got lots of support for that.
But in doing that, combined with all theother things that he's done, like, it just
seems to me that like the US macro picturegoes from worse to worse every single day.
Because if you're not gonna fix thisthing, and like you're gonna have interest

(55:42):
rates going up and the dollar is gonnacontinue to decline and like, like you
just put the picture, the macro picturetogether, it starts to look very grim.
So I guess that's the pushback.

Yeah.
I mean, uh, I mean, look, thatthat might be the case if President
Harris was in the White House too.

Not on, I think that not, not necessarily on migration.

Yeah.
Uh, I mean the problem.
Migration.
Is that and not

on

trade?
Well, I don't know.

Not on trade and not on migration.
I not, I'm not saying PresidentHarris would've been great.
I'm sure she would've hadher fair share of mistakes.
They would've been entirelyher own, but they wouldn't have
been this cocktail of mistakes.

Yeah.
So, so I agree with that.
It's just that like, I think you'respeaking of secular issues that, um,
like, you know, I think there's a lotof secular problems that the US has.
Uh, the number one being that the deficitis too high, that the public sector is
effectively crowding out the private.
And I think that that issue,uh, is truly bipartisan.

(56:41):
Mm-hmm.
If you are searching for a bipartisan,for a hope for bipartisanship,
it's in the fiscal deficit.
Like that's where it happened.
Um, but yes, no, I, um, what I wouldsay is just that I think that when I
say that President Trump can move tothe center and kind of shove under the
carpet some of his, uh, populism andanti-establishment rhetoric and trade, um.

(57:05):
I think that this issuewill allow him to do that.
That's it.
Now, it, that pivot doesn't mean thatyou erase the scars that you produced
through the first three months ofyour presidency or six months now.
Um, so yeah, I mean, for sure.
Yeah, that's, and remember

like he did a phase one US China trade deal in his first
administration and the Chinese lived upto roughly, I have the number right here.
58% of their commitment.
Ak it wasn't a deal, to yourpoint, it was a TV deal.
It's, we sign a deal one day and wesay there's gonna be X amount of trade
and then there's not gonna be, and ifyou look at how China's doing things
like, I don't think they're gonna likeactually follow, they'll follow through

(57:44):
on some things, but they're gonnavertically integrate and create domestic
champions and have self-sufficiency.
The other thing, listen, and I knowyou want to push back, but, um, Robin
Brooks had a really good, he, he, he.
He had some really good data thathe put out just this week where
he looked at US China trade, andit's down, if you look over the
first like six months of the year.
But you know where trade is up, likeChinese exports are up, they're up
to Singapore, they're up to Thailand,to Thailand, they're up on Vietnam.

(58:08):
Like, like trade is like water.
So like Chinese goods areactually probably still gonna
get to the United States.
They're just gonna come throughtrans shipments markets.
And unless you erect full bare,like the 70 foot tariff wall on
all sides of the United States,like the stuff is gonna get in.
So like, even there it's like, uh,but my point is just that, yeah, those
scars, I think like China's gonna sayone thing and then in the meantime it's
gonna be like, oh, and we're creatingour own semiconductor industry and

(58:30):
we're creating our own biotech industry.
And eventually once we have thesethings and we don't need you anymore,
like you will encounter our Greatwall and, and you'll enjoy it.

Well, so, okay.
Couple of things on that.
I think that phase one deal was calledphase one because it was phase one
and I think that it could have beena great deal, but COVID happened.
Yes, COVID and, uh, I mean.
And I know I'm parroting what PresidentTrump says, but I'm parroting it
because it is correct objectively.

(59:01):
And then Joe Biden took over anddid not start any negotiations
with China over any trade.
In fact, he just kept putting tariffs.
So why would it, it's just not fair toPresident Trump and Robert Lighthizer.
What happened with that deal?
I mean, like they negotiated a deal.
China's not gonna keep buying soybeans andnatural gas in the middle of a pandemic.

(59:25):
And then when the pandemic ends,there's a different president in
the White House who doesn't engagethem in any conversations at all.
So why would they abideby the phase one deal?
And this is somehow, like, this issomehow put on President Trump's
balance sheet as his error.
But why It was the JoeBiden pre uh, presidency.
That refused to engage theChinese with any negotiations.

(59:48):
Why?
Because they were afraid that theChinese would say yes, this is
the irony of the Democratic party.
They cannot make a deal with China.
'cause if they do, any deal theymake, even if it's incredibly good
for America, will be seen negativelydomestically because they will be seen
as, you know, defeatists and you know,basically not good enough of a deal.

(01:00:08):
So what I'm getting at is that it wasvery difficult for the Chinese to abide by
the phase one deal because they expectedthere to be phase two, phase three.
And Joe Biden administration, they came inand they were like, nah, look, we can't,
domestically, we can't deal with you.
So I think it's an unfair,um, you know, it's an unfair
argument that phase one sucks.
And I hear this a lot, I hear this alot from both conservatives who say that

(01:00:31):
you cannot make a deal with China, butyou also hear it a lot with liberals who
both say that you cannot make a deal withChina and that President Trump is weak.
The second thing I would say isthat I think that this is where.
The Mennonites are goingto eventually self emulate.
This is where, no, this is whereeventually the reality of the planet

(01:00:51):
we live on is that you will absolutelyhave to continue to trade with China.
Like that's the reality of ourdebate that we had last time.
Like, you cannot stop trading withChina because no matter what their
intentions are, because if you do, yourown allies will come in and undercut you.
Like France is not gonna stop sellingAirbus airplanes if you say China's evil.

(01:01:14):
And I don't wanna sell Boeing airplanes.
So America has to trade with China.
It has to, the question is,how is it going to do that?
And Donald Trump is quite frankly,the only hope that the US has to
negotiate with China because the restof the Republican party is so full
of, uh, like national security hawks,but at an idiotic level, right, that

(01:01:38):
don't wanna engage with China at all.
So people who think thatbuying a bicycle from China.
Is a national security threat.
Okay.
So that's what I'm talking about.
Mm-hmm.
And that the Democrats, theDemocrats who understand the
mathematics, their problem is thatthey're politically extremely weak.
So they can't engage China inmeaningful trade talks because they're
afraid of how to sell the deal theymight make with China domestically.

(01:02:01):
So it's funny, but Donald Trumpis actually the only human
being on the planet that canactually make a deal with China.
That's not halfway bad.
And the reason I see that is thatit's perfectly fine for America
to keep buying Chinese goods.
And yeah, it's perfectly fine if thosegoods are, then you know that revenue
is taxed by the Chinese CommunistParty and they build hypersonic cruise.

(01:02:23):
Miss sells with that revenue.
That's how the world works.
As long as America gets a fair deal wherethe Chinese are also buying US goods, and
that's what the Lighthizer approach was.
Phase one was like, Hey,buy some of our commodities.
I called it at the time,pejoratively a medieval trade

Jacob Shapiro (01:02:39):
deal.
Mm-hmm.

Marko Papic (01:02:40):
What did America get from China?
Like, oh, buy our soybeans.
Whoa, great.
But the phase two is about, Hey man, youdo not import any services from the us.
That is where we have an advantage.
The US has an advantage in services.
You have an advantage in likewidgets and consumer electronics.
Cool, we'll buy your consumerelectronics, but you can't stop our,

(01:03:00):
you know, insurance companies comingin and doing an m and a with yours,
like Geico should, should be allowedto come to China, buy a bunch of, you
know, poorly run Chinese insurancecompanies and like, boom, there you go.
That would be beneficial.
So that's where I think that crackingChina open could be very beneficial
to the US and to the relationship.

(01:03:22):
Um, and I think that that's wherehe's headed and that's why I
think what's interesting is thatnegotiating with China first is a
brilliant strategy and here's why.
Telling Vietnam that they'renot allowed to take Chinese.
FDI.
That's stupid.
Vietnam is going to laugh at your face.
So is Indonesia, so is Malaysia.
This was the Stephen Iran approach.
Like people owe us for ourliberty, so they're gonna have

(01:03:44):
to like, make a deal with us.
Nobody owes America pretty muchanything unless you're South Korea.
Israel, Ukraine, maybe Estonia.
Who did I miss?
Uh, Japan, Taiwan, Germany, may,no, Japan is a nuclear power.
I'm not even like Yeah, ifthey wanted to they have nukes.
They're fine.
Look, my point is it's, there's very,very, very few countries in the world they

(01:04:06):
can actually like us, can actually bully.
And so what President Trump did, insteadof going with the Howard Lutnick, Peter
Navarro approach, he was like, okay, cool.
You guys don't wanna make a dealwith us to keep our Chinese FDI out.
They, i'll undercut you becauseI'll negotiate with China first.
I'll make a deal with China.
And so that's, I I do think thatthere's like, that is a smart approach.

(01:04:30):
Uh, now.
Does he have a lot of,uh, weapons against China?
No, I agree with you.
The US is gonna have to do a lot ofbending over here, uh, or, or kowtowing,
however you wanna describe it.
Um, so that, that I agree with,uh, but I don't think that it's
stupid to make a deal with China.
No,

but, but I think you're onto something with what you said about
immigration because you know, if youhad asked me even eight weeks ago, like
the bipartisan issue that you couldget both sides to agree on and which it
has been a bipartisan issue now sinceroughly 2015, is that China is bad.
And what we're talking about hereis the Trump administration saying,
uh, like maybe China's okay, canwe take it from China being bad?

(01:05:10):
And both sides hating China to, Hey,immigrants are bad and, and China's okay.
'cause we're gonna makea trade deal with them.
'cause we need to trade with themand don't look too closely, abandon
all the other guys the problem.

No, I hear you.
I hear the problem is that Chinais bad is for a children's book
that's like seven years, like.
People in Washington DC whosay that have a mental for, uh,
like aptitude of a 7-year-old.

Yeah, which I think also probably describes the median
voter if, if you look back at Pewdata, one of the really interesting
things here, and this, this goes toa larger conversation about how like
top-down political views eventuallymake their way to the median voter.
Like if you go back 10, 12 years, um,older people were always suspicious
of China 'cause they remembered theCold War and China was communists
and they remembered Mao or storiesof MAO or things like that.

(01:05:58):
But younger gen, the younger generationin the United States actually liked
China, like had no negative feelingsabout them, didn't remember the Cold
War, weren't thinking about communism.
And if you trust the data on theChinese side, it was relatively true.
That has changed over the last10 years and it's changed, I
don't think, because young peoplesuddenly decided to hate China.
But because they have been fedan unceasing diet, to your point

(01:06:18):
of the 7-year-old point of view.
And it's one of the only things thatthey get any kind of bipartisan agreement
from, which is China's a threat.
And this has been a, this has sort ofbeen a, a refrain in US politics for
a hundred plus years that China's athreat and they were the original, not
the original immigrants, but like, youknow, you think about what happened
in the early 19 hundreds out west, um,with Chinese immigrants, um, and all

(01:06:39):
of that sort of dynamic there as well.
So, no, I, I hear you.
Yeah.
So

I hear you.
But I, but I would say two things.
First of all, um,
there can be a bipartisan consensus that,you know, we should all go to the moon
and live in its craters, but you cannotdo anything about it 'cause it's insane.
And so what the United States ofAmerica has now found out over the

(01:07:05):
last eight years is that if we don'tlive in a bipolar world, if you don't
have your allies supporting you,then saying China bad is vacuous.
In the 19th century, people understoodthe reality of multipolarity, which is
you can have an adversary and you stillhave to trade with them because if you
don't, your own allies will undercut you.

(01:07:25):
This is a very important gametheoretical dynamic that you know,
quite frankly, I described likesix years ago, people thought I had
three heads when I described it.
It's been correct US hascontinued to trade with China.
Actually it's increased itstrade with China over the last
five years despite a consensus.
Why?
Because you cannot unravelthis relationship quickly.

(01:07:46):
In fact, in fact, you trade withyour enemy in a multiple or ordering
of the world because the French,the South Koreans, the Japanese,
the Japanese who are right next toChina, supposedly at risk of war with
them, the Japanese are not gonna stopselling goods and services to them.
And that's because geopoliticalpower is based on material wealth.

(01:08:10):
To accrue that material wealth, you needto actually trade with your adversary.
So I think that China is bad meme.
It's a meme, it means nothing.
And you cannot actually do foreignpolicy or trade policy based off of it.
Well, no.
If it meant, on the other hand, if

it meant nothing, then he wouldn't have to do the pivot to
immigration because like his baseand a large swath of the American
electorate does think China is bad.
And he's been sellingthat since the first term.
So he does have to do some, some like,um, some PR management around that.
Because if he's gonna make a deal withXi Jinping, he has to at least, and
it doesn't have to be much like he hasshown that he can do it fairly easily
with the Magac crowd and his supporters.

(01:08:45):
But he does have to just say like,Hey, you know, I got the deal.
Like he kowtowed to me, like I'm the guy.
China's with us now.
Like they've made the deal.
Like they have to make that move.

The second thing I would say to you, and this is more controversial.
But I think that the Americanview of China has peaked in
terms of how negative it is.
And actually the pure research, I'mlooking at it right now, the pure
research study that you point out,uh, it basically negative view of
China was, uh, it was 50 negative,the 55 negative 35 positive in 2014.

(01:09:21):
And then right around when hestarted making those deals,
it kind of actually narrowed.
Mm-hmm.
And then COVID just absolutelyexploded to negativity.
Right.
It's actually rolled over.
That's good.
Now it's still in the seventies,but it's gone from 83 to 77
over the last three years.
And the favorable viewhas gone from 14 to 21%.

(01:09:43):
So I think we've seen the peak.
I don't think it's gonna go downto 50 50, but it's interesting.
Yeah, it's interesting that thereis a decline, like the number
of, uh, people who believe.
Who have a very unfavorable view ofChina in America was in 2024 was 43%.
The varies down to 33%.

(01:10:05):
So that's a significance decline.
Um, and I think part of that,by the way, part of that is
that Trump is the president.
And I think part of that is that Trumpunderstands this multipolar dynamic
that in a multipolar world, China'sclearly an adversary of the US.
And to be fair to the Chinese Americais clearly an adversary of China.

(01:10:27):
But that doesn't meanthat you can decouple.
It's just impossible to do that

Well,

and, and, and it's impossible because of the multipolar
world, unless of course the rest of theworld decides to follow America on this.
But it would require China to dosomething like invade Taiwan or be
extremely negative in some way, or liketo change the dynamic of the planet.
And so that's where I thinkthe deal is inevitable.
And the weird thing that most of ourliberal listeners don't want to hear.

(01:10:54):
The truth is that only really Trumpcan make a deal with China, just
like only Nixon could go to China.
As the old adage goes,

yeah, the the Democrats.
Have been stuck on China as anissue literally since FDR, you
know, sort of picked the wrong side.
And, and, uh, Truman picked the wrong sideon the Chinese Civil War, and it's been
a bugaboo for the Democrats ever since.
Like, you could tie the decisions inVietnam to the Democrats, insecurity
about their decisions about Chinain the Korean War, and they just,
they have not been able to cleanout the skeletons in their closet.

(01:11:23):
Um, one other thing I want to, Iwanna say, and then we can either
go here or then we should talk aboutCalifornia secession, which is this
also what you just said underscoreswhy it's so important maybe for the
Trump administration to get a deal.
Now.
I reject the notion that hethinks the world is multipolar.
I will, I will go with you.
That he has an instinct for where power isand that he could see that China is a big
power that he needs to interact with them.
But I, I don't think it's likeintellectually codified that way.

(01:11:45):
I think it's just instinctual.
But you're right in the sensethat US and China, they're
trading more in an absolute sense.
It's going much.
And that China's actually a bigger shareof US exports in a lot of different
areas than it was even five years ago.
But.
That's not true for China.
China's been reducing itsdependence on the United States.
So even as it imports more, the US shareof some of those things has gone down.

(01:12:07):
So if you're looking sortof since 2008 mm-hmm.
The United States has become more,dependent is the wrong word, but more
exposed to exports and trade with China.
And China.
While it's still huge, it's stilla huge vulnerability enough that
they have to make the deals likethey have to be at the table.
They have to make a deal here too,for the things that are going on in
their economy, but the graph is goingin the opposite direction for them.
They have been successful at veryslowly diversifying from the United

(01:12:30):
States, finding other export markets,building up vertical champions.
So if you keep going, if you likeextrapolate out, the United States
is gonna become more dependent andChina will become less dependent.
Which to your point is maybe why theUnited States really has to say, look
like this is our last, it's, it's notso much about, you know, it's only
Trump can do it, but this is the lastmoment where maybe you have enough
leverage to make the Chinese takeyou seriously in a trade negotiation.

(01:12:53):
Literation like this might be the lastchance, but that's 'cause if you don't
do it now, five, 10 years from now, yeah.
There's probably not a deal that youlike that is gonna be, is gonna be had.

Just to be clear though, um, when you look at the data, a lot
of their FDI is going into Vietnamand Mexico so it can access us.
Mm-hmm.

Yeah.

So it goes both ways.
It does, it goes both ways, right?
US trade imbalance with China hasmassively corrected, but it's trade
balance with the rest of the worldcontinues to be negative because this
is all Chinese trade going from Vietnam.
So like, but that, that meansalso for China, that final demand
for China is not changing yet thefinal demand remains in the US and

(01:13:36):
Europe for their goods and Japan.
So, you know, like, and, andespecially because they have not done
anything to boost their consumption.
Mm-hmm.
True geopolitical sovereignty.
Like if Xi Jinping is listening,turn the TikTok camera on.
Okay.
And very appropriatethat it's TikTok camera.
Yeah.
Very.
Um, president Xi, you want to beindependent, you wanna be sovereign,

(01:14:01):
then you need to do what you don'twant to do, which is boost consumption
in your own country, over capacity,over production, the stuff that
rankles the west, the fact that youdon't import enough Western goods.
This is all a product of an unbalancedmacroeconomic feature of China, which

(01:14:22):
is that people don't consume enough.
So what I would say to you,Jacob, is that, uh, China hasn't
really, really shifted wherethe final demand is coming from.
It's still America and Europe.
They have just kind of like divertedit, but the final demand is still there.
And also their own demand ininternally hasn't been supported.
Now, the irony here is that as Chinaboosts its consumption, which I

(01:14:45):
think it will have to just because ofmacroeconomic amount as it does that
you might say, aha, they're gonnabuy more Chinese goods and so on.
But like, nah, I thinkthey'll still buy more.
Like if they boost their consumption asmuch as I think they need to in order
to become truly sovereign, they'll stillimport more from the US and Europe.
Now they'll.
They'll buy a ton more Chinese goodsfor sure, but the trading balances will

(01:15:09):
actually correct in a positive way whereeverybody can kind of sink kumbaya.
Uh, nonetheless, we kinda likewent off, uh, from immigration
to trade because, you know why?
Because that's where the geopolitical,I think, uh, gravity takes us
in every conversation we have.
We end up going back to thesetrade negotiations and the
rebalancing of the world.

(01:15:29):
And I think that it, it'sjust, you can't escape it.
Right.
We started talking about immigration,what was going on in la but we
can't escape talking about thisissue 'cause it's so important.
Well,

and this is the great, I mean, geopolitics has plenty
of blind spots and if you only.
Use geopolitical analysis, you willget some things wrong, but this
is the great virtue of geopoliticsand the way that it cuts across
disciplines and connects things thaton the surface don't seem connected.
Like there is absolutely an inextricable.
Have you seen has, I would challenge,uh, listeners, if anybody has seen anyone
analytically tying what's happeningin Los Angeles to the US China trade

(01:16:01):
deal, like deal making that's happening.
Like that is the first place my brain wentand all I'm seeing from the media is, oh
my God, it's the end of Los Angeles as weknow it in the United States coming apart.
This seems like, no, no, the.
All of these things are interconnected,and you have to be a very interconnected,
you have to be a deep generalist andhave enough, it's this weird combination
of humility and arrogance to say like,you know what, like, I know enough

(01:16:21):
about all of these different things totry and create this map of connections.
And maybe I can start ascribing causalityto some of these things could, because
most people will just stay in their lane.
The immigration expert will stay in theirlane and the trade expert will stay in
their lane and the California politic,like, you know, you have to connect
all these different things together.
But let's close on this, um, with,with our last 15 minutes here.
Um, you sent me some stuff aboutCalifornia potentially seceding.

(01:16:45):
Um, I don't think this is gonna happenanytime soon, but they are trying to
get a question on the 2028 ballot,which would be, should California leave
the United States and become a freeand independent country if at least.
First they have to gethalf a million signatures.
If 50% of registered Californiavoters cast ballots and it passes
by 50%, then there can be a studyabout whether that's gonna happen.

(01:17:06):
So it's not like these things aregonna happen like imminently or in
real time, but we should talk aboutthe notion of California secession and
about the idea of secession in general.
I don't think it's a zero, and Ithink you were right to send it to me.

Yeah, so I think, uh, you know, this is, you know, I can defend
President Trump with a lot of differentthings, but I think that where, uh, and
this is not just his fault, obviouslyit's fault of the left and the right,
but I think that if you want to thinkabout the greatest danger to the United
States of America, it's not the deficit.

(01:17:38):
You know, it's not China,it's not any of these issues.
It's really itself.
And so, uh, the last time, as yousaid, national Guard was, I. Invoked
by the, uh, called up by the presidentagainst the wishes of the state
was the issue of segregation, whichfundamentally was what the Civil

(01:17:59):
War was about as well on some level.
And now also also by the way, about

low class labor that was paid nothing that everybody
utilized, including the north.
Like there's a nice littlethroughput there too.

Oh yeah, that's, that's a very good point.
Yes.
And underclass, right, uh,uh, in the labor market.
Uh, great tie in.
Um, and so, yeah, I think that, uh, thisis another example, another example where
the US federal government is trying todo something that the states don't like.
And in this particular case,it's about immigration, but
it could be about anything.

(01:18:32):
You know, it could be aboutthe, uh, other issues.
And don't forget, don't forget one of thethings that launched this whole thing on
Friday, last Friday before the proteststarted against ice, there was this, uh,
news item that we now forgo, forgot, whichis that the White House was seriously
discussing withholding federal funds.
From California because of thetransgendered athlete who competed,

(01:18:55):
and I think she won some, uh,athletics championships in California.
And then Governor Newsom retorted, Idon't know if you saw this on Friday.
It was like, it, it flashed acrossthe news on Friday and was quickly
forgotten because LA got it.
It went into this, um, whole situation,but covering, Newsom returned it
by saying that he's gonna withholdsome 70 odd billion dollars that

(01:19:18):
the California pays into the IRSwhen it collects federal taxes.
Hmm.
So California, in other words,is definitely what we would
call a, uh, uh, what is it?
Um.
A have, there's have notsand have states, right?
California's a have state, and I, I knowpeople love to make fun of California,

(01:19:39):
but boy, do we make money here.

Well, not, not just California.
I mean, Los Angeles is, I had this datapulled for this for exactly for this.
It's the second largestcity in the United States.
It's the 24th largest city inthe world just ahead of Moscow.
The greater Los Angeles area hasa GDP of over a trillion dollars.
That's larger than the GDP of Switzerlandor of Poland, or even Argentina.
So just the Los Angeles area thatyou're picking a fight with, with right

(01:20:03):
now would be on the menu of globalpowers in a truly multipolar world.

Right?
So, so this is where I think,you know, why do I say that?
I, I say this becauseforget the National Guard.
Forget the Marines.
There was a news item on Friday thatwas actually worse, which is that
President Trump says, I don't like thata transgendered athlete competed in one.
I'm gonna withhold federal funds.

(01:20:29):
Governor Newsom says that I would holdthe money we pay into the treasury,
forget ice, forget NationalLA Guard, forget the protest.
This happened without any of that.
It happened because one transgenderedathlete competed and won some stuff.
So the threshold for people tolose their shit is very, very low.

(01:20:50):
You know, it's like a couple, you know,like a healthy couple has fights all
the time, but an unhealthy couple likefights over really dumb things and
endos fights escalate right away withinlike five minutes to like divorce.
And that's what this was like.
One human being who happens to betransgendered wants some stuff.

(01:21:12):
I'm gonna withhold federal funding.
Well, no, I'm gonna like pullthe plug on California financing
the United States of America.
What?
You know, so.
So I think that this is very unhealthy andso when you made fun of my Canada pick.
In the top 10.
What did I say to you?

I, I don't remember.

It was a hedge.
It was a hedge.
It was a hedge.
Because my view is that the probabilityof this stuff getting really bad
in the US is very, very elevated.
And I can tell you that the people thatare the happiest, other than the media
will love this stuff other than the media.
I think that the happiest people inthe world are in Beijing and Moscow

(01:21:52):
and, and and elsewhere becausethese kind of fights are real.
And I think it's very dangerous.
And, and if the US were to kind of starton this path, like that is a redrawing
of geopolitics at a level that I thinkmost people can't comprehend mentally.
Now, how does it get resolved?
Well, I think that it's justin the world we live in today.

(01:22:17):
Perhaps what needs to happen is someform of canonization, and this is a
very Republican conservative view.
Uh, traditionally, traditionally it was aRepublican conservative view, but I think
President Trump has obviously become,uh, far less about state's rights because
he controls the federal government.
But in Switzerland, the cantonshave massive power, massive power.

(01:22:42):
In fact, the federal government has verylittle power and cantons, even to the
point where they, they enforce immigrationlaws and citizenship laws of the country.
So, for example, the federalgovernment has minimum requirements
for you to become a Swiss citizen.
Like you need to do X,Y, and Z to become Swiss.
A Canton will come in and say, no,no, no, you need to do X, y, z,

(01:23:06):
alpha, omega, and beta as well.
Like you need to do these three things.
In addition, in this Canton, you know,and cantons in Switzerland are states,
but some of them have population oflike 30,000, you know, so it's not
like these are not large entities.
And I think that the UnitedStates of America may have to.
Over the next 30, 40 years, adopt thatkind of a state's rights, cantonal

(01:23:31):
canonization view of the world.
Because if one human being competingas a transgender athlete causes us
to get to a point where we're talkingabout withholding financing of the US
government, I think like that's not ahealthy situation that the US is in.
And so I, I can see thishappening more and more.

(01:23:51):
In other words, I think we're finallyat a point where both Republicans and
conservatives and liberals and Democratsmay be ready to accept what we call in
the US context, states rights, and whichI call in the global context canonization.

Hmm.
Uh, it reminds me of that episodein the West Wing where Martin Sheen
is debating the guy from Florida.
I can't remember the exact, uh, phrasephraseology that he uses, but he's
basically like the, you know, the Floridagovernor who he's running against is like
complaining about all the things that thefederal government does, and Martin Sheen,
president Bartlett is like, okay, great.
So we'd like our tax dollars back,please, if, if you're gonna complain

(01:24:29):
about all these other different things.
So, once again, the West Wing and AaronSorkin predicting some of these things,

I mean, that takes Yes, but the problem with that Jacob.
Mm-hmm.
But the problem with that, Jacob, isI'm not sure that makes any, any sense.
Mm-hmm.
In Florida's case, or Texas's case orCalifornia's case, there's, there are
many states in the United States that arewealthier without the federal government.
Now you might say, well, wait aminute, Marco, like, the state
of California is in a deficit.

(01:24:54):
Yes.
And just to be clear, I am not atall advocating for any of this.
I'm analyzing.
I personally, I can tell you mypersonal view, like I do not want to
live in an independent California.
Because lemme tell you, there'sgonna be some growing pains.
For the first 10 years or so, thisis a one party state, and the one
party that runs this state has gottenvery comfortable running it poorly.

(01:25:18):
So no, like I'm not advocating forthat, but I am seeing like, look, if
the, if the relationship was redrawn,there'll be a whole lot more money
for California to keep to itself.
Mm-hmm.
And same with Texas,and same with Florida.
I, I, I haven't looked at the data, soI might not fully know what I'm talking
about, but I know I'm talking what I'mtalking about in terms of California.

(01:25:39):
Yeah, California will be fine.
The rest of America less so.
So this is where I'm not surethe Martin Sheen in that, in that
exchange is actually correct.
Yeah.
Like would Florida sufferif it was independent?
Would they have more or less money?
I don't know.

Yeah.
And I mean, your Canada pick.
I, I'm still gonna go after your Canadapick because it's ironic the way that
Trump is treating Canada has led to thislike, creation of Canadian nationalism.
But like Canada has the same issuesinternally, uh, in, in some sense, some
of them further, further developed.
Um, but maybe the way that the UnitedStates is much further to develop is
like doing these things, things actuallyactually creating a stronger Canada.

(01:26:17):
But

my point was, my point was like, the reason that I want to
have Canada as a pick, the reason why Iwanna halt Canadian assets in some way,
shape, or form, is it's a hedge againstsome apocalyptic decline of American,
uh, stability due to, um, polarization.
And if, if the United States ofAmerica were to split up, Canada is

(01:26:41):
the most powerful country in NorthAmerica by default, automatically.
A like, it's the end of,end of story, you know?
And, and that's why I think that that'sliterally how I defended the pick.
I use, I use the term it's a hedge.
Mm-hmm.
But, but, but forgetabout that issue for now.
The bigger point is that, I knowit's difficult to do this after an

(01:27:02):
hour and a half of talking aboutLA riots, but forget LA riots.
Forget them.
I, I wish they hadn't happened becausewe would still be talking about this.
Jacob, you and I would still have spentan hour and a half today talking about
this issue because one human being whohappens to be transgendered, she competes
in a athletic meeting, wins some awards.

(01:27:25):
Whether you agree with thator not is not the point.
If you're very passionate and youdisagree with it, God bless you.
It's fine.
Not, I'm not, I'm not criticizing, I'mjust saying it's one human being and it
leads to the governor of California andthe president of the United States of
America basically talking about divorce.
You know, that's like, that's liketwo parents talking about divorcing

(01:27:50):
themselves because one of their kids.
Came home and said they wantedto do bed instead of soccer.
And the dad is like, fuck no.
And the mom is like, no.
You have to let them express themselves.
And they, and in five minutes they'retalking, let's divide up the assets.
Yeah.
Well, I'm gonna take the house.
You know, like, I mean,that's, that's unhealthy.

(01:28:11):
That's un that's unhealthy.
If I am objective and, and I, I,you know, we used to do this at
Strat for, uh, you know, somethingwould happen and you pretend you are
like a journalist writing about it.
Mm-hmm.
Writing about an emerging market country.
Yeah.
Yeah.
If you are just writing an objectiveanalysis of this issue that happened on
Friday pre-writing, you would say thisis an unhealthy level of polarization

(01:28:37):
over a, over a issue that's not relevantat all to the future of America.
Sorry.
Both liberals and conservatives,'cause both of you are not gonna self
emulate because the liberals are like,yeah, transgendered rights matter.
The conservatives arelike, this is terrible.
I'm gonna tell you as a geopoliticalstrategist who works in finance,
that no, this will not determine thefate of the United States of America

(01:28:58):
at all, no matter which size wins.
And yet it led to a talk of divorce.
That's unhealthy.

Well, that's bad.

That's a bad sign.
It

is bad.
And to your point, uh, you don't evenhave to pretend to do that exercise.
The way I do this now is I just goto the People's Daily and I look at
how the People's Daily summarizesthese articles in English about what's
going on in the United States, andit's exactly what you would expect.
They're just very coldly,dissecting exactly what happened.
And when you get this like ChineseCommunist party view that is
translated into English of what'shappening in the United States.
Yeah, it's very sobering.

(01:29:29):
And to your point, like Xi Jinping,like while his negotiators are there in
London, even if you're right, and evenif like China has less leverage than I
think it does in Beijing, everything isgoing according, not to the plan, but to
the way that they think about the world.
If you're a materialist, if you're aMarxist, if you're like the way that
the Chinese leadership has been educatedfor generations, everything is happening

(01:29:51):
the way it's supposed to happen.
And maybe that leads to hubris eventually,but like all of the things that they
were expecting to happen always does.
Yeah.
But like right now, inthis moment, oh my gosh.
They're like, oh my God, it's happening.
The the capitalist hegemonis eating itself alive.
Wow.
What.

And just, and just, you know, like I, I know we're,
we're pushing one and a half hours.
So like, I do like to tieeverything with a sports analogy.
Yes, do it.
But, uh, our, uh, our Lord andSavior, the one to whom we bestow
all of our gifts and prayers.
Bill Simmons, the great, he oftentalks about body language, right?
Mm-hmm.
He's the body language doc.

(01:30:27):
He calls himself the body languagedoctor, for those of you who don't know
what I'm talking about, bill Simmonspodcaster, historian of basketball.
Uh, we're modeling our, our,our analysis of geopolitics to
his analysis of, of basketball.
And he will often say, I watch thebench when I go watch the game live.
I'll watch the bench and I'll watch duringtimeouts are, are all the players engaged?

(01:30:52):
Are they high fiving?
Are they talking, do they haveside passionate side conversations
about what happened in the game?
Mm-hmm.
And, and it's so funny, it'ssuch a qualitative analysis, has
nothing to do with data empirics.
It, it goes against thegrain of sports analytics.
But he, he says like,look, this really matters.
Chemistry really matters.
And, and there's nothingbetter than body language.

(01:31:12):
You know, a bunch of dudes playinga sport, man, like body language
is going to come into it, you know,and that's what we're doing here.
Like, yeah, we can talkabout National Guard.
Is it legal?
Is it not history?
We can talk about trade tariffs policy,there's multipolarity, blah, blah, blah.
At the end of the day, like it'sa really bad sign that the body

(01:31:34):
language of the United Statesof America is where it is today.
And you, if you are, and if you're sittinghere listening to this and saying, that's
Donald Trump's fault, you know what?
You got your head up your ass.
It absolutely is not his fault.
He is a symptom Yeah.
Of the fact that that'salready there, right?
So like, it's not, it's not his fault ifhe, you know why that's important to say?

(01:31:54):
Because.
Whether you love him or hate him, oncehe's gone, it's not gonna get better.
And I think that that's very dangerous.
And it's dangerous for investors.
It's dangerous for people in the USAnd I would say it's also dangerous
for countries around the world.
Mm-hmm.
Uh, I, I say it's actuallydangerous for China.
It's dangerous for Russia.

(01:32:14):
It is dangerous for a, it's,it's just there's very few things
that I, a truly devoted nihilistbelieves is just universally bad.
But the idea that the United States ofAmerica dissolves or there's a federal,
state sort of fight, I think that'suniversally bad, is gonna create a vacuum.

(01:32:36):
It's gonna create, uh, potentialjingoism and Rev. And it's just
gen, genuinely a bad place to go.

Well on that, Rosie, an optimistic note.
Anything else you wanna tell thelisteners before we get outta here?
Mark?
We'll come back next time withour Trade Value Leaders, uh,
our, our trade value leaderboard.
That sounds really fun.

Should we do that next for next week?
Yeah,

let's do that for next week.
I'm, I'm ready to roll on

that.
Yeah.
We have enough time.
Yeah, of course.
Yeah.
Alright.

I, I'm, I'm ready.
I mean, you already had yourfirst pick, which I'm, I'm fine.
You can have Georgia.
That's fine with me.
I'll, I'll get

through it.
Whoa, whoa, whoa, whoa.
Wait, wait.
Right, right.
I, I flag that in a press conference.
Maybe.
Maybe.
Okay.
Maybe.
Let's see.
I just want some time.
I just want some time to goover it and, and see, but yes.
In the That's awesome.

In the meantime, Marco, stay safe.
I know, I know.
It's very difficult.
Thank you.
I appreciate it.

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