The Great Tariff Debate with David Sacks, Larry Summers, and Ezra Klein

30:23That's not what Bill Clinton was arguing. He said number one. There'd be huge economic benefits for the US He says quote by this agreement we will increase exports of American products He means to China that will create American jobs. Okay, did that happen the way we intend it? I don't think so. Number two is he believed that you looked at the data on export flows from the United States to China It actually did happen at a quite substantial rate But with huge trade deficits to the United States You're arguing that they they did not have a discriminatory way towards our products This idea that Americans could just do business in China the way that they could do business here as ridiculous anyone who tried to do business over their nose, you had to create a JV, you had to get a local partner, giving 51%, it was extraordinarily difficult.

31:07We were discriminated against Larry. It was ridiculous to try and claim that somehow this was an equal relationship. Okay? And we imported far more from them than we ever exported to them. So Bill Clinton was wrong about that. Number two, he said that signing PNTR and bringing China to the WTO would promote democracy in China, that we would export one of democracy's most cherished values economic freedom. Did that happen? I don't think so. He said this would strengthen global trade by ensuring China adhere to international trade rules, reducing trade barriers and resolving disputes through WTO.

31:41Did that happen? I don't think so. And then he said on national security, he said it would improve our national security to bring China to WTO and help make them rich. He said, quote, if we don't deal with China in this way, we will increase the prospect that they will turn in work. That's not what happened. We help make China rich. which we've exported millions of jobs to them. They built up their economy and their supply chain. To the point where now they are a global competitor to the United States, they're a peer competitor. We turned that baby dragon into a grog on size monster that can now challenge us in Asia and across the world for primacy.

32:15Why in the world we have done that? Disrupt for national security reasons. That was a very foolish thing to do. Okay, so Larry, I guess I have to let you maybe self -grade. How did you guys do? Is there any regrets as Saxus pointing out there? Obviously China has not magically become a democracy But I guess you could argue they do have a middle class now We haven't gone to war with them. So I guess you could argue that this has been good for relations But to Saxus point they are incredibly powerful and they are our top adversary How would you grade the history of this so we can move forward? I was a surging growing reforming economy growing at double digit rates.

32:55That it was before there was any WTO agreement. The WTO agreement did not change a single rule that represented a U .S. restriction on imports from China. It did change a variety of rules, not as far as I would have liked, that let the United States export more to China and the protected United States intellectual property in China and that brought China more closely into the international system. You need a counterfactual for what would have happened if China had been excluded from the World Trade Organization. That counterfactual is not that they would not have sold goods to the United States.

33:51That principle had already been crossed 15 years before. Not a single restriction was reduced. But look, anything you would have done differently is. I don't get the whole mindset here. I understand that we should have done more as a country for the Rust Belt and invested in it much more heavily. If I was worried about dependence and strategic and all that, the last policy I would have wanted to abolish was the CHIPS Act. That's the largest boldest thing the United States has ever done to avoid dependence in a national security area. Let me branch him off. The Trump administration has killed all of that.

34:42Jamath, you heard as original question and the history here from Larry and David looking at their some industries that we need strategically for a military cars. These are fairly obvious rare earth minerals are obvious. But we also have the lowest unemployment of our lifetimes and Americans probably don't want to work in factories on mass. What is your take on going forward, some metrics that this administration should, not sacks of saying this, you're saying it. What would you measure this success as in terms of ensuring and reducing dependencies? If, to as was point, two years from now, we were degraded.

35:27Give us some specifics here, Tremor. There is a major issue that the United States has that's much bigger than China, which can be framed in the lens of resiliency and the ability to defend for ourselves. There are supply chains that have many single points of failure. And independent of whichever country that single point of failure exists, it could be an ally or it could be a foe or it could be a frenemy, that creates risk. And I think what we are learning, and David's right, it was really highlighted during COVID, we are not in a position to take care of what we need. So if I had to very precisely answer Ezra's question, I would say that we need to measure and protect four critical areas.

36:17Everything else I think we can deal with, some inefficiency, some single points of failure, but the following four areas Ezra, I would say are or Sacrosanct. Number one is all of the technology, both the chips as well as the enabling technology around artificial intelligence. It must be a robust, largely American supply chain. It must. You cannot have single points of failure outside the United States because what you see is even in allied countries, their posture towards things like free speech and other things can ebb and flow, their posture on trade, their posture on defense. Okay, so that's one thing.

36:57Chips. Number two is energy. We have a critical deficit of electrons in America. We do not have the capability we need to make the energy we need quickly in many ways. We have supply chain issues on Nat gas. We have critical supply chains that can be shut off by China around photovoltaics. So whether you believe in coal, whether you believe in Nat gas, whether you believe clean energy, we are in a very bad, sure that. Okay, I think we're in agreement to go in. Number three are there are critical material inputs that drive the material science of the future. Rare earths are an example going back to chips, things like gallium, things like phosphorus even.

37:40So we have a critical minerals and rare earths and material science input problem. And then the fourth Ezra are pharma APIs so that when American citizens get sick, we have the ability to not just make it, but also design it and manufacture it because some of these APIs, the active principle ingredients for many of the drugs require very convoluted and complicated processes, cold chains and the like. And again, there, we depend on folks whose view of the United States can change in real time. So if I had to say it to you as well, what I would expect is if the United States government, whoever was in charge, would put those four things on a board, then detail out all of the key inputs, measure how much we can make ourselves versus import, and then basically try to level that playing field.

38:31We would be in a very good place. A couple things because I think I probably agree with all of that and what it sounds like is an excellent argument for Joe Biden's policies, which were functionally, maybe not the pharmacide, just literally that. Let's pull out. semiconductors and semiconductor supply chain, let's pull out energy, let's plot a couple of things like that. You know, what was it? A high fence around a small garden was what Jake Sullivan called it. Let's particularly try to restrict the supply chain export of AI critical materials to China. They had a whole set of policies about this.

39:05Now the Trump administration, the thing we are in theory here discussing is an extraordinarily broad -based set of policies. It is tariffs on not just Cheyenne, it's on Brazil. It's not just on critical industries like Chimath is talking about, but it's on, you know, mangoes and avocados and, you know, lumber from Canada and basically everything else. I guess there's an argument I could sort of extract out of this that the Biden administration believed what they called Frenchoring, which is that you want to create an integrated supply chain of allied countries that we can work with and that we can rely on and the Trump administration, I think believes something, depending on who's talking, more like that the entire supply chain needs to be onshore to America specifically.

39:51But one of the problems and the reason I'm keep trying to push people to be very clear about their arguments and very clear about their metrics is that I feel like there's this king's cup of what we're trying to achieve here, where one day it's that we're trying to achieve the reindustrialization of the American heartland and the next we're trying to replace they see income tax with tariff income. And then the next we're just using it as all -purpose surplus leverage against any country that does anything we don't like. And the next day we're using it for an entirely third purpose. And maybe we're just gonna use it to isolate China but to bring in our friends.

40:24But none of these, you can't do all of these things at once and it needs to be very stable if you're going to get companies to do these long -term CAPEX investment decisions that take decades to play out. Nobody I know in the market. You guys didn't want to change anything. You guys didn't want to change anything about anything. I wasn't in the I wasn't in the guy's administration number one. I'm treating as well and Larry as a team. I would love to change. I just want to make sure I would change all kinds of things. You mean the Democrats didn't want to change anything? Of course. Let's see if we can even admit that PNTR did anything.

40:58We not keep doing PNTR for minutes. Look forward. Not backwards. Look at the chip look at the IRA act, they did the exact things we're talking about. Larry, go ahead. Let's see if we can find a little bit of agreement. Please. Here. I agree with Chimath's agenda. I may not agree in every detail, but I broadly agree with Chimath's agenda. And I'll go a little further than that, Ezra. I think Joe Biden's attachment to energy security was kind of selective and heavily oriented to green technologies, not others. I thought canceling the keystone pipeline was a clear mistake. I thought the stopping a variety of things involving liquid natural gas were a clear mistake.

41:44So I think the Biden administration's approach to regulation that empowered every NGO with respect to stopping transmission lines with respect to constructing power plants because of the importance of democratic constituencies was a mistake. So I think energy security is a central objective of policy and that there's a lot of room to move beyond what the Biden administration did. I actually believe that very strongly and agree with Jamath and David. What I don't understand is tips absolutely right. The chips act was all about making there be an American semiconductor industry with production in the United States as a central priority.

42:38The Trump administration has declared war on that. Rare Earths, we want to have a strategic petroleum reserve for any rare earth, you want to do more mining in the areas that Jamoth says we should in the United States or in friendly countries, I am all for that. Here's what I cannot understand, Jamoth. They don't see how your resilience agenda drives anywhere near liberation day and the emphasis on tariffs. It drives towards a set of specific industrial policies, perhaps including tariffs in some particular product areas, but steal from Canada. Anything from Lusoto, any natural resource product across the board tariffs on everything.

43:39I think you are absolutely right about resilience and that traditional conventional economics has given it too little thought and that COVID pointed that up as a central issue. What I can't understand is why Donald Trump's echoing of Leia Coco from the A's about tariffs is responsive to any of that. But this is the point I'm trying to draw around Biden. I'm not saying I agree with every way the Biden administration defined its objectives. I just wrote an entire book about the failures of democratic policy making in this specific era. What I am saying is a Biden administration's view of trade with it.

44:24There are targeted industries. We should be putting a lot of both domestic policy and international policy into play in order to protect and restore or French or. And the Trump administration's view is that you have a generalized problem running all across the world. It requires highly general policies. That then when I asked people to defend it, they sort of moved this targeted argument. Donald Trump's view, we can, I feel like we end up making something that is not that complicated into something much more complex than it is. Since the 80s, Larry's point about Leigh -Eyed Koka, Donald Trump has seen has appeared to hold the view that any time the US is operating at a trade deficit with someone else, that is evidence we're being ripped off.

45:11And that is how you get, at least the initial set of tariffs here, that work off of bilateral trade deficits and try to correct every single one with every single country, be it Lusoto or a collection of islands inhabited by penguins. I think it's really important to be connected to the policy that was actually announced and not projecting all of our own onto it. Yes, Larry's right. That you could have a different set of critical industries than Biden did. The Biden team was very focused on clean energy over other kinds of energy. I also do not agree with the liquid gas pause. I thought there was some...

45:46We did not do nearly enough on things like permitting reform. right? There's a lot you could have done that they didn't do. But if what you have in your head is a targeted idea of reshoring specific industries or near -shoring or Frenchering or whatever, which is kind of what I'm hearing from a number of people on this call, then it seems like you would want targeted policies. And what we have is not targeted policies. It's broad -based policies. So many. And 90 -day pause on larger broad -based policies and a huge trade war with China. I would like to hear a defense from somebody. I'll give it to you.

46:19As soon as I agree, specific policies, I'd like somebody to explain to me why it's a remotely sensible theory to say that the United States is being exploited by any country where the overall pattern of trade is such that we are running a trade deficit. And maybe in the process you could explain to me why my grocery store is exploiting me because I'm running a massive trade deficit with that. Okay, trade deficit, Schumoff or Sachs, who wants to take it? I can start them, maybe Sachs can, Sachs and so let me actually start by giving some credit to where Biden did do a few things, right? Just in the spirit of finding some common ground inside the IRA.

47:05I think that there were two things and I've said this pretty repeatedly, but I just want to put it on the record again. The ITC credits and the ITC transfer markets for those credits, the tax equity markets, are critical industries in America to support private investment in all kinds of very complicated markets, energy markets being the most important. and what the Biden administration did to their credit was remove the uncertainty because those things had to be renewed over and over again and they gave us a very long window where we could underwrite investments to your point Ezra. That was smart.

47:46But it's important to also remember that in order to get Biden's budget done, what they did was they had mentioned roll over on permitting reform. And Ezra, you know this probably better than all of us when you look inside of the Chips act as smart as that initial policy was. If you ask, why has nothing actually happened? Why have no fabs actually been built other than grandiose statements? The answer is that, which you speak to in your book. It's just this complete malaise and inability to actually get these things permitted and turned on even when it's right. So I just want to acknowledge that that's there.

48:21So Larry, very, very importantly to your question, the thing that we have to acknowledge is that in certain countries what you have is a very blurry line between private and public industry and they have this very tight coupling and again I hate to go back to China but it is the best example of this where what do they have? I choose one other country just for the sake of it. We can use Korea we can use Japan we can use Germany okay there are instances where the government balance sheets support private industry they can support them in three different ways. Number one is tax credits that they can use, the subsidies that they can use to build the things that they need.

49:03Number two is how then they can support that in the active selling and engagement in public spot markets to shape the demand curve of the things that are made. And then number three is the taxation on the back end, the terms of repayment and the capital cycle. So those are things that in the United States, we overwhelmingly turn the responsibility over to the private markets to do. We are the cleanest, the purest form of capitalism in that sense. But many other countries are shades of this. And again, let's not talk about China, which is a thing. So very good. So Larry, so what do you have is how do you defend dumping?

49:45How do you defend that? How do you defend spot market manipulation that drives American companies out of business? How do you fight that? And I think... Here's the problem. If President Trump had announced a big broadening of anti -dumping law to confront a variety of instances of what he's... What the administration, after careful economic analysis, saw as inappropriate subsidy. I might or might not have thought that they were doing that in the right way, but we wouldn't be having this argument. The front pages would not be about tariff policy day after day, and the stock market would not be down by $5 trillion.

50:33The central thing we are discussing is not whether there are sensible modifications to trade policy to respond to bad practices in other countries or to promote resilience. Those are technical debates that frankly aren't that interesting to a large number of people. The question is whether declaring that we need a whole new era of U .S. economic policy around universal tariffs against everything is a rational step forward. or and what I would say, I had a little trade surplus as a judge. Now we're talking about the Monte Carlo simulation of how to achieve the outcome. And what I am saying is there is just as much as you and I want to guess, the fundamental and honest answer is none of us know.

51:28The people in the White House, what they know, they will share a little bit at a time. Because the reality is if what you wanted was a white paper or if what you wanted was paint by numbers, I think back to David's point, all that would do is just take any leverage that they had and give people the opportunity to shape their response. And I think in traditional game theory, and again, in traditional game theory, I think the right thing to do is when you're playing poker, you play street by street. What's the flop? Make a set of actions. What's the turn? Make a set of actions. What's the river?

52:03Make a set of actions. And I think if you're gonna play to win And this is what they should do. Keep their cards very, very close to the vest. Realize that you can't necessarily surgically go and attack the Lithium market first, then the rare earth market second, because it all goes back to the same balance sheet. It's the same actor over and over. I think there's a useful analogy to draw here. I think a lot about an article Mark Daner wrote in the New York Review of Books many years ago about the Iraq War. And it's an article that is stuck in my mind forever because what he says about it is that one of the difficulties of the politics of the Iraq war is there was no one war.

52:44There was everybody's private war that they were projecting on to the Bush administration. You had the liberal humanitarian vision of why we were going to war and what that war would look like. You had a realist vision for it. You had a vision that was more about weapons of mass destruction and keep it in the whole and say from terrorism, you and people believe there was an Iraq Al -Qaeda connection, there were really dozens of these, which is how you got as broad a coalition behind as bad a policy as that together, because everybody said, you know, there being a little bit vague about what's really going on here and why we're really doing this.

53:16But I bet you, if you go into their heart of hearts, what they want is the thing I want, even though the policy doesn't quite match what policy you would get from starting from my premises. And that's really what I hear here. I hear it on this show, but I hear it in general in the discussion around this, that there are a lot of different objectives being projected onto Donald Trump and his trade war. The objectives do not fit the policies we're seeing. The objectives are not stably articulated by Donald Trump or the people around him, nor is any specific objective being articulated in a stable way without contradicting objectives, also being articulated at the same time.

53:57And look, maybe in the end, and this is why I want to push you all on metrics, you get something you like out of this. But you're giving away a lot of clarity just on the trust that what is happening is people are keeping a good hand of cards with a good strategy of poker hidden from you. As opposed to what's happening is what we seem to be seeing in public, which is Donald Trump is a chaotic and erratic person. They are making policy in a chaotic in a radic way that policies having chaotic and erratic consequences and then they are operating and moving on the fly in chaotic and erratic fashion.

54:31So actually heard Ezra say that he feels this administration is being a bit chaotic in the approach here. What's the counter to that? You heard Shaman say, hey, this is a really thoughtful. They're holding their cards close to the chest. Maybe you could clarify what your position is. Is this too chaotic or is this crazy? What I'm hearing is a bunch of process objections to Trump's policy and I'm hearing a bunch and nitpicking, what about the Soutu or whatever, okay? Look, this is a very unrealistic view of politics when we've had a bipartisan consensus in Washington for decades that unfettered free trade is a good thing no matter how big our trade deficit's got, no matter how rich and powerful China got, no matter how unfair the trade practices got, no matter how many millions of our jobs and factories got exported overseas, this has been the bipartisan consensus in Washington.

55:19And Larry, you're right that it started before the Clinton administration and the George W. Bush administration definitely accelerated it, but there has absolutely been a bipartisan consensus in Washington that this sort of unfettered free trade policy was good for the country. Now, how do you change that? Now, look, you can nitpick this and you can make all the process objections you want, but Donald Trump has changed the conversation. I didn't get there. I'm just - Let me finish. Let me finish. You keep saying I've offered a process suggestion when I'm objecting to the absence of your goal. You were pointing to Donald Trump's views when he was a public figure in the 1990s on trade, somehow he was wrong.

55:57He was not wrong. He was one of the few people in the few public figures in America who was right about this. I think most people today would say he was right about this, that throwing open our markets to these foreign policy without having consequences was an estate. You guys have me completely confused. Really you do. No, I can't use about the incursion of your position, Larry. Larry. David, you still believe that the Clinton administration, let's call it a bipartisan consensus, that era was correct. While at the same time you're arguing that PNTR didn't do anything. I think it is really telling that you are so much more low to defend what we are seeing then to attack what has been.

56:37If you want to, it's fine. Like I guess you could have, it would be interesting to have you and the two me there are going if you be it should have you and Larry go 12 rounds on the Clinton era, but you know when I say to you listen there is not a stable set of objectives that fit the policy here can I say that's a process I just like somebody to defend the thing they keep actually doing I would like somebody to explain to me here. Anderson, Chimoff Chimoff resilience central four sectors, are we more resilient in the four sectors? What's the answer in two years from now? I got that. I agree. All that.

57:17I cannot make any linkage between a 10 % across the board, tariff, a tariff on steel, a tariff on automobiles, and much of what the rest to the president's says and you were very valid objectives. I hear David, I can give this free trade, his destroyed America and we're going to undo that and this reign in the heart again, all this stuff. And I just want to understand how we'll know whether we have to. Okay, look, I can answer this too. Go ahead. Go ahead, David. All right. Look, Larry and Ezra, welcome to a political coalition. Different people have different objectives. Just like different people had different objectives for the policy that we had in place 25 years ago.

58:07Okay, there are some people who think that we should have an across the board 10 % tariff to raise revenue because the country needs revenue And that that would be a better way to raise revenue than to say have income taxes or capital gains taxes stand drunken miller who's not a fan of tariffs Nonetheless said that he would support a 10 % tariff no more than 10 but up to 10 as a way to raise revenue Okay, that's his point of view There are other people, and I would say I'm more someone who thinks about the geopolitical consequences of this, who think it was a huge mistake to throw up in our markets to Chinese products, basically feeding their economy to the point where they could become a pure competitor of the United States and the US, the threat in the US world order.

58:50One more time. There are different people, hold on, there's different people with different objectives. One more time, because you are just not speaking truth. I want to know one restriction that the United States had on Chinese products that was changed in the year 2000. You said seven times, throw open our market to China's products. I want to know one example in which the United States opened its market in 1999. 99 the point the point the point of the point of the point of anti -art. Well, the plane one product. Yes, where restrictions were reduced. Okay, David Namin. Listen, you're mischaracterizing what PNTR did.

59:37We can play this like a rock game. If you want, people can go ahead and grok this question and they'll get this answer. Look, the answer is that before PNTR China was granted MFN on a year by year basis by Congress. Correct? PNTR made it permanent. What does that do? It created a permanent new framework for trade relations between the United States and China. So it created permanence and it created a certain expectation. What did that enable? Massive investment by US companies in China. So all the bean counters from McKinsey started talking about outsourcing and just in time manufacturing. They started moving the factories over there in a much greater way.

1:00:17You know, the Mitt Romney's in private equity. We just, we just, we got the Mitt Romney's in private equity said this is a great idea. Let's move all of our manufacturing. Could we be that whether or not it was the WT on the bankers on Wall Street got to financialize and securitize all sorts of new products? Okay. That was the result of PNTR. The thing we have to decide really right now is a country is if the thing that you all are trying to replace this with is better, right? If it will work. And so I want to go back to what you said a minute. Go David, when you're like, welcome to political coalitions.

1:00:48Larry has been in politics a long time, but it's Treasury Secretary, I've covered politics for a long time, I'm familiar with political relations. In fact, a lot of my book is currently about the problems in the way the Democratic coalition with too many objectives all at once can end up destroying the ability of the policy to actually achieve a clear goal. So this is precisely the non -procedural objection I am bringing here. This is why I think it is dangerous to be treating an upheaval of the entire global financial system without a clearly defined objective that is connected to a policy. So the question is, if the idea is that there are all these different players here who have all these different policy objectives that would connect to all these different policies and everybody's getting a little bit of them and Trump is flipping back and forth through different versions of them, you could end up, despite, yes, whatever mistakes were made in the free trade consensus, which I do agree that we had, you could end up with a bad and not even consensus, just a bad next policy.

1:01:50An unclear coalition that is fighting with itself and is making policy without a strong process can create not like nitpicky procedural problems, but actual damage and disasters. Shemoff, let's look, let's try to look forward here. This obviously has been a cataclysmic, chaotic, intense, whatever, a description you want to use of the past week. Productive. Okay, sure. And it's certainly created massive swings in the market. Is this all going to cause a recession? Is this too violent of an approach to markets? That is, I think, a valid criticism that people have, including the majority of business leaders are saying, hey, I think I have to start layoffs.

1:02:34You had United Airlines say, we're not going to give any guidance. This feels to business leaders, Republican business leaders primarily and market participants as just far too chaotic and they can't plan. If they can't plan, then they stop planning, which then is going to cause layoffs. It's going to cause bankruptcies. Who knows what the second and third -order consequences are going to be. What's going to happen here over the next couple of weeks and months? Just on the recession question, and I'd like to give an answer to Ezra and Larry. I think that, and I've said this for about a year, it was clear to me that we were sneakily in a recession before.

1:03:14And the reason was the vast amounts of money and deficits that were being pumped into government services that perverted the actual GDP picture in America. So as doge sort of slows down that money flow and as the consensus in Congress gets to a better budget, I think that you're going to see that the government was probably responsible for 100 to 150 basis points of just waste. And if you take that out, you will technically be in a recession. That was independent of these tariffs. and I think that that's where the true economy Jason was. And I think that we're going to just find that out. So that's that.

1:03:59On where we go from here, I can give you an anecdote and I'll give you a projection. The anecdote is this weekend, my wife and I were in bed, and a person called me, very successful businessman who was representing the president of a country, saying, hey, Chmoth, I need some advice. What do we do here? And we walked through the three things that he and his government, that they government, were trying to figure out because they wanted an off -ramp. They were like, I'm ready to cry, Uncle. We're ready to tap out. And again, he was calling me as a private citizen, but I think this conversation was very instructive.

1:04:33Number one, he's like, look, we have these really high tariffs on inbound American products. We're happy to cut these things to zero. And I said, well, you should do that. Second, while we were exploring, he's like, yeah, we have an enormous capital purchase with Airbus. I said, cancel it. Swap it to Boeing. He's like, done. And then the third, which was interesting is he's like, we need to import an enormous amount of energy. And I said, well, who do you give that concession to right now? And it was a non -American company. And I said, well, why wouldn't you just RFP that to an American business and let them compete?

1:05:08And he's like, we'd be open to that as well. So he said, you know, we're getting prepared. We want to find a way to talk to the Trump administration. And I'm like, great, however I can be helpful, I'll be helpful to you. I got off the phone, I looked at my wife and I said, if even 30 of these 75 countries do a deal anywhere remotely close to this, this was an enormous win. So let me give you my projection, Jason, of what the art of the deal could be here. What you do is you can rewrite Bretton Woods 2 .0. What was Bretton Woods 1 .0? It was fixing exchange rates. It was setting up the IMF. It was setting up the World Bank.

1:05:43Those were the conditions on the ground. Post World War II had made a lot of sense. what would we do if we had to write the Mar -a -Lago Accords right now? I think what we would do is work backwards from the question that Ezra asked and the answer that I gave. How do we create resiliency in these critical markets? Number one, a framework for that. Number two is how do we create limits for government -sponsored intervention against capital for -profit companies, many of whom are American, so that we can actually compete on a level playing field. And then number three, very simply, if you can do business in my country, why can't I not do business in yours?

1:06:22And I'll just give you that story for one second. I was responsible. I was the head of every single entity of Facebook outside of the United States. I opened every market. My team and I created a framework for dominating. I figured we figured out how to crack Brazil, India, Russia, you know, the one market that we never could ever make a single Iota progress? Say it, Jason with me. Well, China, China, Russia. No, we want in Russia. So my point is in every single market except one, is it that we were just lucky in 174 markets and one we were stupid? No. So I think that the Mar -a -Lago Accords, this sort of Bretton Woods 2 .0, is the outcome Ezra.

1:07:05It will basically use tariffs as a way to get these governments to a table and allow us to negotiate a much fairer economic quid pro quo. Here's my concern with this theory. I want to leave out the sort of question of what the real economy looked like to Larry. This world in which what is happening is a business leader who represents a country is calling you and saying, okay, what do we need to do to deal? Right? They're coming to Donald Trump and they are going to come to Donald Trump as Larry said earlier. There's no doubt that the US economic leverage is enormous. and virtually every country faced with our might is going to try to cut a deal with us.

1:07:43But then there's a call they're not making to you that they're making to someone else, which is we have allowed or we have approached the US as a functionally benign partner for a very long time. And now they're becoming a dangerous partner. They are very very strong and they will use that strength to crush countries smaller than them when it suits the whims of a personalist regime run by a person who his feelings, even about people that the US or countries, the US traditionally considered allies like Canada or much of Europe, change. And so yes, on the one hand, for the next year or two, we want to avoid getting a big tariff slapped on us.

1:08:28And so we got to figure out what is it that if we offer it to Donald Trump, he will say to himself, that was enough of a give that, you know, I can move on to someone else. I can make them the focus of my eye. And on the other hand, they're going to begin to build fortresses and deals and partnerships and approaches that make sure they're less exposed to our ability to wield this power against them in the future. But before I came on the show, I had gone on X and I saw a clip of you going around where you're saying that one of the problems with the Biden administration was that you couldn't get anybody on the phone.

1:09:04And then the Trump administration, you make the call, the deputy chief of staff picks up, you say, Hey, I need you to talk to this company. They work with them. They're freaking out about the tariffs. The deputy chief of stock, Kelsey company, they work something out. No, no, not that they work something out. They listen, they listen. This world in which we are doing the dealmaking by individual relationships, by who can get the calls answered not by rules. It feel clear. As you're that's how the all the all the but that's how the Biden administration will that's not what Moss said. And that's not what I said.

1:09:36Well, you know, as you're trying to make it sound like corruption. Hold on. I was I was George Clooney that was making a call. Who cares what George Clooney thinks? Maybe you just say on why was very, very critical by the guys. I saw that clip. As well. What you're What you're saying is simply that the White House listens. They lose calls. Whereas he can get his calls returned by the Obama administration. Great. I think we're actually not saying something all that. No, you may sound like corruption. Well, I actually do think what Trump is working through is deal by deal patronage based on how he sees the company.

1:10:14I'm sorry, the other country. That's not what happened. As Rick, can I just make sure that this is clear? This is a 150 year old American business. I have no interest in that company except a friendship. These are Americans hiring Americans trying to compete with China who were very negatively affected and all I said was why don't you have a chance to explain what's happening on the ground. My point that I was trying to make and maybe I didn't make it clear enough so let me set the record straight. The Trump administration, what I have seen as a businessman, is willing to hear the conditions on the ground.

1:10:46As a businessman, when I was building Ezra just to be clear, critical rare earth supplies for America under the Biden administration, battery -cam materials to compete with China under the Biden administration, AI chips to be the best -inferenced solution under the Biden administration, I couldn't get a call back. That's just the facts. Not because I wanted anything, just to tell them what was going on. So fair enough. That is insane. Okay, fair enough. I am not telling you that the Biden administration should never turn your calls. What I am saying is that the degree to which Trump first, and then everybody around him as an example of him because culture comes from the top, is working off this kind of individual call and deal making worries me because I believe that you had every one of these calls you're saying and they went exactly the way you say they went.

1:11:38and then the calls that you are not getting. And then two minutes ago, as you were saying, that a 10 % across the board tariff was too broad and we need to go industry by industry. And now you're saying that it's gonna be too particular and he shouldn't do country by country to go against. You see the word deal making, listening to people, listening to people is not deal making, as right? It's just listening to people. Are you really going to be there and telling me that the way Trump himself works is not individual deal making. Here's what I have seen. with David. David seems is this really is this really the argument here?

1:12:12I will tell you what I've seen and David seen much more What I have seen from the president is he takes in hundreds of opinions and starts to figure out what the ground truth is and the reason is when you only listen to one or two Every president probably deals with this you have this information asymmetry problem because you are the president of the United States And so how do you cut through it? You talk to hundreds and hundreds of people and you try and calculate what the truth is So it's not like he's giving any favor. He's collecting information. That is a good process You want the most powerful person in the world to get to the ground truth.

1:12:48Go ahead, Larry I am all for information gathering I agree that the Biden administration did not do as good a job as it could of maintaining relations with the business community. I agree that it's a good idea for there to be quite extensive connection. I am also appalled by the half -dozen phone calls I have gotten from prominent people in business who have said I'm used to being shaken down when I try to do business in some parts of the world. It's a new experience to be shaken down by representatives of the president of the United States. What's the shape when you have close connections? You help us, you contribute this way.

1:13:40That makes no sense at all. What the president has been trying to do is it hurts. Maybe it is an erroneous perception to which I have been exposed. repeatedly. But it is a pervasive total nonsense. You guys are very confident that you're out of perception. Perception, everybody else's aren't. It is a perception that is shared by almost everyone who has experience in the conflict of interest area, who has looked at the situation of Trump administration officials and those working as special government employees in the Trump I'm not sure what you're saying. So I just went through that whole process, Larry.

1:14:26What does that mean? It will be false. But I can speak to this because I just went through this process. It took forever, it took like months. Okay. I went through the same process everyone else goes through. The OGE career staff have to go through all of your disclosures and they figure out what the conflicts are. And then you have to divest them. Okay, it's the same process that everyone goes through. So you're all over the place making all sorts of accusations here. So if you have some proof or you want to accuse someone, Then once you just do it, but otherwise what you're saying is just not true.

1:14:55It's not backed up by anything great They shut down Eric Adams. That's my that's a direct accusation that happened in public They should down Eric. They shook down Eric Adams because I can't even this pocket. I don't know That's a big deal y 'all like that is a way they are viewing business here You guys are all over the map making wild accusations What baby it was there There's a lot of Two seconds of resignations to because of their discomfort with being overruled by your colleagues in the Trump administration. So the suggestion - You're all over them now five seconds ago. So the same ethical standards that I was held and that other members of previous administrations, including the Bush administration, were held, unfortunately, is not right.

1:15:41Well, that's false. All right. Well, there's two issues here. You may have to be familiar. We're talking about two different types of divest. Hold on, I had to divest a lot as I talked about in this show. In any event, you guys are all over the map making wild accusations. Two seconds ago, the shakedown was at the level of companies. Then all of a sudden it was OG and ethics. Then it was something about Eric Adams. You guys are doing business. You guys are doing business. Nobody's making, I like that you're like, who's Eric Adams? We're not making any new. No, I know Eric Adams is. I supported him on this show.

1:16:09It's a straightforward way that Trump does business at every level at which he operates. And so it is happening at every level. personal administration. I know you don't. I got to say, I know it's not that I it's not that I don't want to hear. You know how this started is because it's reported all our second Ezra you misquoted something Jamal said on another podcast where all he said was that I can get my phone calls returned by this White House where I couldn't with Obama or Biden. And you guys have somehow morphed that into some sort of like broad ranging accusations of corruption or something like that.

1:16:44think that you have no worries, no fear about what the accusation of what your Donald Trump works is. As a, your accusation of me tried to infer some form of corruption or some form of deal -making. None of that happened. What I, what I, again, I'll tell you, I connected the White House so they could hear on the ground what's happening from a company who was very negatively impacted by the tariff so that they had the complexion of that feedback as well. Okay. Do you deny the possibility that your experience with the Trump administration might be different than people who they feel are less ally to them than you are.

1:17:15Ezra, I'm willing to. It's a straightforward question. What are you sure that you're a good sample? I don't even know what we're talking about anymore. I think what I'm talking about right now is that people who donate to politicians have unique access to politicians, I think we can all agree that that's true. Okay, just to be very clear, I have given way more to the Democrats than I've given to Donald Trump. And you were disappointed about that. And by the way, where you're allied now. And by the way, like, what's crazy is I was the same intellectual person I was under Biden that I am under Trump It's just that it seems like the Trump administration is like, well, this is a smart guy with some opinions that we listen Biden and by the way and Larry, you and you know this These are some very close friends of hours that we share mutually that would not even return my calls So it is a little personal for me as well as right just to be honest with you I'm not gonna go there, but the point is that's fair.

1:18:06I have never I have never seen a single I oduh of any form of anything other than just gathering information from the Trump. They've never asked me for anything. They've never tried to direct me to do anything. They just want to know what's going on when you ask them, hey, can you talk to such and such a person? I assure you that your experience is not the experience of quite a number of the nation's major law firms. It is not the experience of quite a number of the nation's business leaders. It is not the experience of quite a number of the nation's universities that I am neither the first nor the hundredth person referencing efforts at extortion to use the movie The Godfather as a metaphor for the four aspects of the way in which our country is being governed.

1:19:05What a surprise. Democratic universities and Democratic law firms are making accusations. Let's move on. We think we've got the tariff issue and I think we can all agree that if you donate money, you might have better access to politicians. I want to talk about the future of - Best of you, Jason, if you give 10 % to the big guy, then you really get access. We could do these allegations all day long if you, you know, yeah. There's a long list of people who've made donations and there's a long list of favorable things that have happened to them after across all administrations and we can debate cause and correlation all day long here.

1:19:39But I wanted to talk about the future of the Democratic Party while we're here. Ezra, you have been on a tour talking about exactly how incompetent, how terrible of a campaign they ran. What is the future? And Larry gets his two cents in here as well. Is there any saving this party? And if so, what would it look like? Well, there's the problem of the party in the campaign. Let me bracket that because my book of abundance is more about how Democrats govern at both the state and local and federal level and some of the pathologies of governance there. Then we get hard for liberals to achieve their goals.

1:20:17There are versions of this on the right, but I'm not really writing about that in this. So my book about its Derek Thompson is about the tendency Democrats have to subsidize things where they are choking off the supply of the thing they want people to have more of. So think about housing in California, you get rental vouchers from the federal government, but we make it incredibly hard to build homes. Clean energy, which a lot of the Biden administration's policies were about putting huge subsidies behind the building of more clean energy, but they didn't really do anything to make the permitting, the citing, the state capacity to do all of that, capable of building that amount of clean energy at the pace they foresaw us building it, right, that they wanted us to build it.

1:20:58And behind this, and I can sort of go into a lot of detail here, but it's a diminishment in a state capacity that comes from wrapping the state itself in red tape and regulation. I think we think and have an intuitive way of thinking about the idea of deregulation on the private sector, right, when the government is imposing regulations on private companies and it's making it hard for those companies to act to do business, et cetera. But this happens first and foremost on the government itself. One of my favorite examples I've been using lately, there's a new RAND report that looks it how much it costs to construct a square foot of housing in California, in Texas, in Colorado.

1:21:35And it does it on two kinds of housing market rate, and it does it on affordable housing subsidized by the public sector. And the cost of creating housing in California market rate is 2x in California, what it is in Texas. But when you get into that publicly subsidized housing, where you have all these new standards and rules and regulations being triggered by the addition of public money, it goes up to about 4 .4x. And so you have this real problem, I think, in a way of governing that evolved in the 70s, the 80s. There's a kind of small government version of the Denver Cratic Party, the new left more individualistic that was worried about too much exercise of government power.

1:22:16And now that we are in a different world with different problems, we're thinking about reindustrializing, we have a housing shortage. And you have things like the Biden administration, which really are thinking about how to build a lot more in America, but you don't have either a policy architecture or I would say a governing culture that makes that possible. A lot of this came from Francis Fukuyama, I think, and Votocracy. Votocracy, how do you pronounce this? Fukuyama is a great sort of related concept of Votocracy, which is the Votocracy. Votocracy, yeah. But you also got another great concept since we're bringing up Fukuyama, which is the neo -liberals which you've sort of been talking about here with the WTN other things.

1:22:53he says people think about it as the veneration of the market, but it is first and foremost is the degradation of the state And I think that explains a lot more about the world we're in than people recognize Either you can agree with this Francis Fukuyama is probably one of the most polarizing modern Academics in America as you read and people end up in their very pro Fukuyama or they think Fukuyama Yeah, I mean look as because what happened is I mean just to uplevel is for a second is that you had Fukuyama right the end of history which basically said that Democratic capitalism is the end. I'll be all and we're basically down to one system and the whole world's going to run on that system.

1:23:29And that philosophy then animated, I would say, a neoliberal and neo -conservative consensus in Washington for 25 years. And there were three key pillars of that, let's call it globalist consensus. Number one, we'd have open borders, free flow of labor. In fact, the Wall Street Journal editorial page, which is considered to be conservative, have actually supported a constitutional amendment saying that we'd have open borders. Number two, we'd have open flows of trade and capital. So basically the unfettered free trade agenda. And then number three, the third leg of it was Pax Americana. We deploy American troops all over the world to defend this consensus because they've agreed it as liberators, not occupiers.

1:24:10I think all three pillars have been refuted. it. And the person who has represented the shift in this consensus to, I'd say, a new agenda of economic nationalism and geopolitical nationalism is Donald Trump. Okay. I was going to guess that. Listen, when you have, so this is a real organizing consensus. I'll announce end of history and the last man is a much more complicated. Let me finish the point here because I'm kind of on a roll here. Yeah, keep wrapping around. Bring it home. When you have a bipartisan consensus that included both Bush Republicans and Clinton Democrats around these three pillars of globalism.

1:24:53And then I'd say that country turns against that. That's not going to be a smooth process. That is going to be potentially a violent process. It's going to be a disruptive process. And you guys want to raise, like all these nippy objections and proster whatever, Donald Trump is bringing that realignment. But the real question is, was that consensus correct? Was it a failure? I would argue is a failure. Larry, let me ask you a question then. When you see something like Doge happening and people start taking a bit of a more unilateral, a quicker, a less veto based approach, is that encouraging to you, Larry, do you think that's the right way to do it?

1:25:32Because we haven't been able to get the government's smaller sense Clinton. So are you pro -doge, not doge, And do you think this sort of objection to, hey, we're going too fast, too violently? Maybe that's what we need to do at times. And then I'll go back to you as a answer to the same question. I think Ezra is broadly right about the promiscuous distribution of the veto power. He's broadly right that we need to be able to do more things more quickly in the state if we're to be an effective government. I think we need much more reform. I think Democrats have allowed themselves excessively to become hostage to particular groups, particular traditional concerns and have lost touch in important ways with an American mainstream.

1:26:29And I think that in so far as the election outcomes in recent years have not been what they want to, that is an important contribution to how that has happened. And I agree with David that Donald Trump represents the transformative and profoundly different ideology that has been present in governing America before. I do believe that it is fundamentally not new under the sun, just new in America, that it is the Juan Perón approach, which is very familiar to students of Latin American history in particular, and that the general experience of that approach is that its leaders, particularly when they have galvanizing personalities can be very popular for a substantial period of time, but that they are very rarely remembered well by historians of their countries.

1:27:41And so my best judgment is that this project is going to end in disastrous failure, despite having put its finger on some important concerns and issues. Of course, there should be much more aggressive reform of the government than there is, but that does not excuse or mean that it is likely to work out well for some of the mindless savagery that the dose is bringing to traditional American institutions is going to work out well and to take just one example. My belief is that the revenue loss from the dojos' destruction of significant part of the functioning of our nation's tax collection system is likely to exceed in terms of contributing more to the deficit than any savings that is - Can you describe it?

1:28:58What do you mean by that? What is this? Identified the right thing, but they're executing on it too much. Go ahead, Jema. No, no, I have two questions. Larry just tactically what do you mean by the destruction of the revenue collecting mechanism? That's question number one, which was just I just want to understand what you meant. But second question, which is more broadly, if Larry if you were president for a day, just give us the Larry Summers plan like what is the counterfactual to what's happening now? You can include tariff you can include those. I just want to understand how you would frame the solution to what ails us.

1:29:33So maybe tactically just talk about the collections part because you referenced it and then just more strategically what the Larry Summers 2 .0 Plenty is. We are firing on mass people whose job it is to audit people like you. And the results of that is that we are losing revenue directly. We are losing revenue further because people once audited go straight in subsequent years. And we are losing revenue because more and more people are playing the audit lottery, engaging in problematic practices in the expectation that they will not be caught. Let me tell you my experience. I get audited every year automatically.

1:30:24And the reason you get audited every single year is typically the way that you acquire your wealth creates complexity, 700, 800, 900 page tax filings. Now you don't do that yourself. What happens is you typically pay a large big fore accounting for millions of dollars to do it. Deloitte, PWC, Anderson, etc. Etro. Every year that I've been audited, the biggest delta has been about a thousand bucks. In this case, I actually was owed a thousand, but the US government last year, which was spending on. I'll spend it everywhere. So Larry, just so you know, well aware of everything you just said, and I have no doubt about your personal integrity.

1:31:07It's not the high, you think it is less than a quarter of people with incomes over $10 million are on it. it. So lucky. It's just, it's just not true. Let me ask everybody is not true that everybody is, that everybody is ordered. I get the sense Larry, you're, you like Doge, but you don't like the execution. Got it. Ezra, you talk about your book. We got to move faster. We got to do things faster. We got to take more risk. So are you prodoge or not? And if you look at the democratic, if you look at this administration, I'm going to call Trump 2 .0 for clarity. These are, I would say two out of three people around Trump, whether it's Shamaaf, Joe Rogan, Besant, Howard, even Trump himself, are Clinton Democrats.

1:31:54So it's basically the Clinton thing to say yourself. I don't matter. Ezra, are you happy about those? Your book seems to be a plan to do Doge -like things. I think building state capacity is two dimensions. One is what the state can do, and the second is a rules under which it doesn't. Doge seems to me to be fundamentally destructive of state capacity. First, and this goes again to my endless frustration that I feel like goals are not clearly laid out in the Trump administration. What are the measures we are looking at and how will they achieve them? Is it just trying to cut? Save a $20. They've been very - But that's not efficiency, right?

1:32:31I could save a trillion dollars. No, I could save a trillion dollars in ways that will make the, let's put it this way, what Larry was just saying, right? If you cut everybody at the IRS, right? Just cut every single one of them. On the doge measure of how much did you save in headcount, that will look like it counted up towards your save a trillion dollar score. But in terms of what Larry is saying, which is the long term efficiency of US tax collections, you would have just made the IRS much, much, much less efficient. and we get that, but they've also cut all these efficiency software and consulting nonsense.

1:33:04There is a lot of grief and some stuff. I am not going to tell you that there are zero doge cuts that made sense. But I am going to say that what I see them doing overall is highly destructive state capacity. Or similarly, a lot of things happening around USAID and say, PEPFAR funding, is PEPFAR efficient? I mean, yes, you say money by not giving HIV and URTRA virals to children in Africa. But I think it is good that you do that, right? So that's not the kind of efficiency I'm looking for. I am interested in state capacity that is connected to achieving specific goals. I've talked to a bunch of people around Doge.

1:33:38And again, here you get a lot of different ideas of what the goals are. Some people say, well, what we're trying to do is save money. But if what you wanted to do is save money, you could say go to Congress and do a very big bill. There is a lot of interest in Congress, people like Rokana, who wanted to work with Doge to identify big spending cuts that both sides could agree on, defense being a big piece of this, and then they decided not to do it. So, doge to me, it would be great if somebody tried it, but I see this is much more of a discussion of state capacity and a hack and slash operation.

1:34:10Larry Summers, we're going to thank you for coming. I know you've got to drop off right now. Thank you. What about Larry Summers to point out? Can you be up to, do you like to do your, Larry Summers, you're, yeah, before you, just go up the counterfactuals. Yeah. What's your plan, Larry? Counterfactual is focus on necessary strategic investments in infrastructure, in making America the leading country unambiguously in the world in technology, particularly disseminating in large scale artificial intelligence for collective benefit, building a larger network of alliances so that we are in a position to counter China, both with hard power in the form of increased military expenditures, and with moral strength and the world as a whole behind us, as a central organizing theme of foreign policy and reinvent our education system at every level to pick up on Ezra's notion of being about results and doing all of that while you're doing the abundance agenda as well of frames stuff up so that we're in a position for governments to get things done.

1:35:51I believe the country is best governed from the center, not best governed from a radical fringe. And I believe moving to a transactional model of leadership is the approach of Latin American can strong men and history does not find it to be a successful model. And so I would venerate rather than denigrate the rule of law as part of governing the country. All right. They have folks, Larry Summers. Appreciate you coming on the pod. Thank you, Larry. Thank you. Spicy, spicy episode here. Sex, you wanted HNs to respond on the doge issue as we wrap Well, yeah. I mean, I think I'm pretty productive episode.

1:36:47Yeah, let me, let me partially agree with Ezra here. I mean, I think that he's trying to introduce this idea of an abundance agenda to the Democrat party. I think that's a good thing. You know, I know you've talked about permitting reform and not tying up projects and so many hoops and so much environmental regulation and you know, even D .E .I and all this kind of stuff. So I think that is all well and good. I mean, we should, we should do those things. The thing that I take issue with is that you're on the one hand saying that there's way too much process around just getting things done, right, when you're talking about public works.

1:37:27But the objection you're making to Elon is that he's not following enough process. You know, it's not enough niceties. Larry called it mindless savagery. This is the problem is How do you expect anything to ever get done the reason why your public works projects don't happen is because there's too Many special interests who get organized and they stop it. Okay, what Elon is trying to do We have a two trillion dollar annual deficit. He's trying to figure out how to cut it Every single program that gets cut The interests who receive that money and we found out that it's hopelessly corrupt You know stacey Abrams gets a two billion dollars for non -profit and you have all these NGOs who are basically cashing in, they're all going to do everything in their power to stop those cuts from happening.

1:38:13And they're the ones who are ginning up this hysteria, you know, burning down card dealerships and so forth and so on. So this is the problem that I see is that you don't really have a kind work to say for the people are actually getting things done who actually are performing things. Elon is one who's actually making the difference. Can you find any good in this? I mean, you sound like your cherry picking, when I brought it up and I questioned you, like, if you support Doge, your first thing is to say, like, well, here's my favorite pet projects. I want to keep those. Yes, but yes, right? Like, this is, I think, really important and weirdly it's the through line of almost everything I've said on the show today.

1:38:52Knowing what you are trying to achieve is the first part of achieving it. So if Doge is cutting things that I think do good in the world, I'm not going to say, Hey, look, they're making the government more efficient. We no longer have a strong foreign aid program or whatever it might be. They've destroyed the Department of Education without knowing what they're cutting there. I don't think Doge is doing a good job because I don't think they have in a thoughtful way connected means and ends. Weirdly, my critique of the Democrats is also that they have not been outcomes focused. They've been process focused.

1:39:25David's point here is actually not been the critique I've made here. I would make procedural criticisms of Doge. But there's a world in which my Hakeondos is look. I agree with what they are trying to do, but I wish they would follow the law. But that's not my Hakeondos. If you had the pick, Kamala Harris continuing the spending that was going on or Elon and Doge cutting, which would you choose? I would absolutely prefer to Kamala Harris administration to the Trump administration. Would I like to see Democrats be significantly more reformist? Yes, I've written a book about it. I'm trying to persuade them of this argument.

1:39:57your book is about a getting rid of this red tape and you just said you want to keep the people not just getting it's really not just getting hold on. You just yeah, you say you want to change. This is radical change. I agree. But you just said you would rather have had the person and the administration that put night trillion on top of the devil. This is why you'll never get that change as you guys all invited me here. You'll never get the abundance agenda that you I don't think it's people like Elon or Trump who get things done. This is the way that politics work. You have to have a paradigm shift to get what you want.

1:40:32I think getting dumb things done is not good change, right? I actually don't understand how this point is so hard to grok. If you get a lot of change and the change is bad, I am going to think that is bad, not good. I would hope that is true for all of you that if Kamala Harris or some other Democrat came in and began wrecking things that you wouldn't say, well, we needed a bunch of change. Like, let's break everything in sight. I want to see things done well. There should be good permitting reform. Let me give you an example of the kind of thing that I am looking for. We talked about ships a bunch on this show.

1:41:06I like the Chips Act. I did a big piece that coined the term, everything bagel liberalism about the way in which the ideas inside that act, when they began building out the grant program, layered on too many standards and programs and so on. But one thing they then did was they passed a bill or by the inside a bill by Ted Cruz and Mark Kelly taking chips out of the Normal environmental review because they said look if this is a matter of national security and we're trying to build a semiconductor Fab so quickly we cannot have this layered in years of environmental view Which now take on average three and a half to four and a half years so because I care a lot about clean energy one of my arguments is that we should have a speed run for clean energy.

1:41:49It should not go through the normal levels of review. What is happening in California high -speed rail where it had 12 years of environmental review was not in my view a good idea. At the same time, that doesn't force me to say, well, I think we should build a bunch of coal plants with that environmental review because I can make distinctions between things I want to see happen in the world and things I don't. I think you're totally right with that. Let me give you the more practical day -to -day example because those are these Albatross projects that are largely a byproduct of ineptitude and corruption.

1:42:18But let me tell you a more tactical example so that you can understand why what Elon and Trump are doing is so necessary. So as I told you in 2020, on the back end of COVID, I started a business to build battery, cathode, active material in the United States, okay? So that's a business we need so that when you want to electrify everything you want to electrify there are batteries that we can make that's not reliant on the Chinese supply chain. It made sense. The guy that I started with worked for Elon. The other guy I started it with was a professor at Stanford and the third guy I started it with was the head of battery engineering at Toyota.

1:42:57A more complete group of people I think you couldn't put together. So we start to build, we get a deal with general motors so far so good. But eventually you hit a point where in order to really commercialize, you need some form of government acknowledgement that you're good. And the way that you do that is you apply to the DOE. And the DOE has a very legitimate grant program that tries to accelerate these key things, especially things that are critical. We went through that program, Ezra. We paid a couple million dollars in consulting fees to the people that we were told to pay it to. And we were rejected.

1:43:31Okay, fine. kept going, I kept funding the business. And then next year, last year, we applied again. 125 companies applied, 25 were shortlisted. We all went through incredible diligence. We won, incredible validation. At the end of that entire process, so really two years from when I started, and millions of dollars, we got a hundred million dollar federal grant from the DOE, and 50 million dollars from Michigan to build a plant in Michigan to help redemesticate battery cam in the United States. It turned out that in that same period while we were going through that rigamarole, Stacey Abrams got $2 billion after 30 days.

1:44:17And I just asked the question, what is broken inside of the government that that's possible? That's hopelessly corrupt. That's exactly right. A company of 50 people, 50 people, where none of this money goes into our pockets. We take that money and we then have to raise more money. I have to put in more money. We try to hire people. We try to build a battery factory that can basically give us resilience against the Chinese, which I think is great. They're an incredibly strong and viable competitor. In 30 days, she got 20 times more than we did. How do you explain it? So here's what I'll say, here's what I'll say on the two things.

1:44:57And how do you fix it? I have not myself looked deeply in the space of Abram's story, but I am very skeptical of the accounts I keep hearing about it. I suspect that if she had made $2 billion in 30 days, she wouldn't be now hosting a podcast on crooked media. She'd be on an island somewhere. So I can't comment on that perspective. You're supposed to call crooked media. What I, yeah, the part of the American thing is it's a joke from Donald Trump actually. It's very out. I don't know. The broader thing here though, right, which is you're getting at, You're frankly, what I worry about is that what you had in that DOE process was fairly quick for the government.

1:45:28One of the things that I am targeting in the book is a way that even when members of the administration, when governors want things to happen, they are not willing to upend the process, to pass the new bills, to reconstruct the architecture of the federal or the state government, to get it happen. and Jerry Brown and Gavin Newsom wanted high speed rail haven't knowledge, can't you acknowledge it's insane that somebody can get $2 billion after 30 days. I am not going to acknowledge a story I've not looked into myself because I'm not sure I trust the count. I don't think it's crazy. I don't think it's crazy.

1:46:05You get the money after 30 days, but it depends on whether or not the process was good. Hold on. I want to stop before you guys move around to a bunch of like, wait, I want to stay on the one thing that I want to stay on with abundance for a minute here. is that the thing that I think would be useful to do is actually build legislation to make these processes work more quickly with more discretion from decision makers and then oversight after the fact rather than heavy process before the fact. I was talking to somebody highly involved in the World Broadband programs under Obaidan and one of the things they were saying to me was that there is this entire edifice as he put it, of policy that is here to make sure I do nothing wrong.

1:46:42What would be better, and I think this is right, is to allow me to act more and then look afterwards to see if I did something wrong and then hold me accountable for it. I think too much of our regulation is precautionary as opposed to being able to let people move quickly and make decisions in the real world and then go back and see how they worked out. I think that's a great point and I agree with you on that. And I think there are a lot of people out there who would say that governments too bureaucratic, there's too much red tape in terms of getting things done, any kind of project, like the rural broadband takes 15 steps, three of them were DEI, that's crazy, the environmental reviews, and the lawsuits that bog these projects down for years, make them unfinanceable.

1:47:24There are people who agree with you on that. You know what they're called? Republicans agree with this. But you know who doesn't agree with you? AOC, and Elizabeth Warren, and Bernie Sanders. So maybe you're in the wrong party because I don't think you're gonna convince Democrats of this. Well, we'll see. Well, I wish you well on that. I hope you do. I appreciate that. Yeah, no, I do. I think if you can convince Democrats of this, I think it'd be a great thing. But look, this is my issue with some of what you and Larry are saying is that you want Elon and Trump to abide by all of these procedural niceties.

1:48:00You want them to play by. You keep saying, you keep saying this is my view, but it's not my view. You know who get things done? And this is what we say in Silicon Valley. You know who gets things done? Disruptive people, founders, founder mentalities. There are the ones who get things done. Your response, Ezra, as we wrap here. I know you have to get it. Getting dumb things done quickly is not a good idea. And that is why... Starlink is a much better idea than rural broadband. Neither are batteries. Batteries are not dumb things. You're asking me about what Trump and Musco doing right now. We started here on the tariffs.

1:48:34What you're watching with Trump is using expanded terror authorities to do things that have a bad process behind them and we'll have a bad set of outcomes. So look, I've asked you many, many times here. I don't really feel like I got the set of metrics I was looking for, but we will maybe talk again in two or three years and we can decide together. Was this genius work by the disruptors or was this a really, really dumb approach to economic policy? What was the issue with the metrics that I gave you, Ezra? You don't think they're good. I don't think they're the unit of measurement kilograms. I don't think they're completely complete.

1:49:09I think you're processing us. You're doing to us exactly what the government bureaucrats did to rural broadband. What's your metric? How long is it going to take you to deploy this? We have to put it up check list. Yeah, exactly. Come on. These are debate tactics. Here's all you need to know, Ezra. It's a hundred bucks to get Starlink. It's 15 ,000 to do five. We're trying to pay principles and you're trying to bog it down in procedural arguments. Hold on, this is amazing to me. You really think saying to you, in two years, what are three or four metrics that we tell us? I gave them to you. What you gave me doesn't fit the poll.

1:49:44I mean, look, we don't need to do this whole thing again. But what you gave me doesn't fit the policy. It's just reindustrialization. Hold on, we said that we want to reindustrialize America in critical industries especially and reduce our dependence on foreign supply chains that are based in potential adversarial countries. Concrete enough as well. Those are things that as efficient objective because the other thing that I the part of you the part of it that I did not hear Those things to be measured was okay. Where is the economy right there's got to be some cost you don't want to wait So what metric would you want?

1:50:15I'd like to see like okay GDP growth has been X I will Okay, you want positive GDP growth and we want resiliency for those four critical industries amongst others Okay, and it be nice for the trade deficits come down and you know Those are your best. Especially with certain countries. Yeah. Get back to work then. We're all going to get back to work. We got the four critical industries. We got the GDP increase and trade deficits. Yeah, it's an open debate. All right. Ezra Klein's new book, abundance is out in fine bookstores and Amazon and all kinds of other places. You can get it and you can hear him on podcasts.

1:50:49Incessantly. When are you going to stop this podcast? Where is? Oh, man. It's just a rough industry. One of the last. Absolutely. Absolutely. All right, we'll talk to you soon, Ezra. By all, thanks for having me. Thanks Ezra. All right, thanks Ezra. How do you think the debate went? I think it's a good debate to have, and we made progress here. The paradox of all of this is what they're describing in some ways is what Trump and Elon are doing. Yes. But it's a bit too hot. So if I were to give a criticism or room for improvement to the current administration to maybe pull some of these people over, it's basically or slowing down and explaining what's going on a bit better.

1:51:28I give the administration, like I give Doge a plus plus, it's obvious like they're doing the right thing. I give the communication like a B, like just increase the communication and you can see they're doing that. Antonio went out and talked a bit about Doge, they did a round table and they're updating the website faster. The more you do that, the less the opposition's mind is gonna wander. The same thing with the tariffs. If the tariffs, if the cent was out there, front center every day talking about methodically what their plan was. Instead of the shock and all, I think people would be able to process it quickly.

1:52:00Let me just add one thing to that. I like that. You can always say that communication should be better. But here's the reality of it. Take Doge, for example. You have crazy leftist fire bombing, Tesla dealerships, painting swastikas on Tesla cars, a costing Tesla drivers, okay? Creating violence and chaos and trying to depress Tesla's sales, okay? And who's to blame for that? And then what people say is, well, somehow Elon's the disruptive figure here. You have a crazy left wing that's reacting in crazy ways to sensible things that Doge is doing. And then what people do is they reinterpret this chaos that's being created by the leftist.

1:52:44They somehow put the blame for that on Elon. I think your explanation there is even more reason to be proactively communicating decisions. So, then that doesn't forgive anybody drawing swat stickers on Tesla's. Obviously, they should go to jail and if anybody's coordinating it, that should be like a rico case. My point is, we should find out who it is. Just if we're going to bring these two parties together, which I think we came close to here of like finding some common ground. I think, Shamath, you outwiring your four bullets. And then at the end, as you're saying, well, what's the impact on GDP?

1:53:14And then you add into that That's actually what's the input on the trade difference. For the first time, these two sides, I think we outlined what should happen, what should the measure be in two years? Have we ensured those important industries is GDP robust and is the trade deficit more balanced? This is the same debate we always had over immigration. Let's pick a number and work towards a number, right? That's where the debate in our country breaks down in my mind, is that we don't pick numbers. We can agree that we need a ton of innovation. Segway, Jason, go. Hey, Achaimap. I saw that you were at the breakthrough prize.

1:53:51Sorry, I'm one of the weekends. Sorry I couldn't make it. I had family stuff, but Freeberg was there as well. And as everybody knows, this is the breakthrough prize. It's like kind of the Oscars for science. They had hundreds of guests there. And about a third of them were scientists. The third were tech founders. And you had a bunch of Hollywood folks there, posted by James Corden and you had Jeff Bezos, you're emailing there as I mentioned, Zach, Vin Diesel, Sergei and Gwyneth and Mr. Beast. Lots of excitement there. And I know David, you were at a secret conference that also I was almost invited to, that you met Gwyneth, Paltero, friend of the pop.

1:54:32Jason, my, Nick, you can show some photos here. Oh, we do have photos. Okay. I know. My wife sent me a letter to read on the air. So let me just open this up here. Open, open letter. It's an open letter too. Oh, my God. Okay. Dear Gwyneth Paltrow. Oh, geez. It's open. Love letter to Gwyneth. Okay. I'm just going to read this here. Last night when I met you, I learned in that moment that pharaoh months are not a myth. They are real and apparently trademarked by you. You have the kind of femininity that could destabilize the stock market. I left the encounter slightly dazed unsure if it was your presence or an as of yet unlisted group.

1:55:16Okay, wait, let's just stop here. Let me just man explain what she's trying to say here, guys. Wait, you said she's got a crop. She's got a crop. Oneth Paltrow. Oneth Paltrow is hot as balls. Okay, that's the clown of Troy. You're saying she crashed the mark? She has so much aura and Riz. David, you have to, I mean, I don't know if we have the picture where David met her at the JPM conference, but she is so kind. She's got high EQ. I gotta say, so cool. I have to say, I've met a lot of stars. That's a star star. That's a star star where you're just like holy shit. You're just kind of like a little bit in awe.

1:55:51Oh, she's a star. She's a star. There she is. Fifth bestie, Gwyneth Paltrow, G -Po. That was stunned. That was stunned. I was stunned. We were all stunned. So wait, are you saying that Nat has a girl crush? I think so. Girl crush has been declared here for the first time on all in. We have an official girl crush. What I think is just remarkable Jason though is that another conference lost your invitation in the mail. I mean, it is crazy. You got to talk to the post office about all these invites that keep getting lost in the mail. It's a surging. My White House invite this. That's not your mail man.

1:56:28I don't think about saying it or something. I don't know. I gotta get invited. I think that you're great. I think the party, I guess I'll see everybody enough. One, you're a great family man. So at least you're always busy with your family. So I think people know. Well, I try to prioritize the family. I got young girls. What am I supposed to do? Oh my gosh. All right, let's shout out to your enjoy of Milner. I think. Yes, incredible. And what they're doing to inspire people to get into science is just so important. You know, the awards are enormous. It's like $3 million awards, which I think It's just kind of like it's an amazing reflection of how important this stuff is and every so far the last two years also Had a little tear had a shed a little tear Because they do these things where like you know you bring some of these folks that had been impacted positively There was a girl who Had her jeans edited she was literally on on her deathbed and this guy David Lou who on the breakthrough prize did a very targeted gene at it She's alive and thriving and she gets to present the award to him and you're just like, oh my god It's you know sacks when he said he was shedding a tear or almost shed a tear I thought he was gonna say he saw his reflection in his tuxedo and just got a little chunked up about it because he's how good he looked Roth does look good in that photo put it back up.

1:57:39Put it back up. Let's see this photo You see how he's wearing the silhouette the silhouette on your tuxedo is just Okay, well that so that's wearing our money pre -ve and I'm wearing Laura Piano, which is like a double bracelet to see. They make a double verse to see. Wow, they make that cashmere. Asmere to see. I cannot comment on the material choice because it was just that is. That's a gorgeous garment. Well actually, you know, Friedberg was going to be on the program today, but then he found out how many endangered species. Did you guys wait murder? Did you see the Nick? Do you have the picture of us with Zoe Saldana.

1:58:15Oh, there's us in Friedberg. Oh, Friedberg's good. Oh, there's Zoe Saldana, the Mr. Beast and her husband. Who's the guy with the man bun? Marco Perigo. Great guy. This is Zoe Saldana's husband. A cooler, funnier, fun dude. You're not going to that guy should be at every party. Really? Every man bun. Yeah, it definitely looks like it's carrying. Look at Zoe Saldana's tattoo in her honor, Jess. I don't know if that's true. I want to see if that close, you know, that close guy on X is always critiquing Republicans. He's awesome. I love you. I want to know if he how he responds, well, that's terrible.

1:58:49Mr. Beast fails. But I want to know how he responds to your Tuxedo Jamath and finally gives you credit because I think he only compliments Democrats as sort of the problem. Oh, is he really not? He's always picking on Republicans. Jimmy, look at that. Did you guys see the picture of Julius Dress? I just want to say one thing about Julius. Did you see Julius Dress? I have them. Let's take a look here. This is an insane story. So this is Julia Milner. So the cool thing about this guys is this is this isn't very incredible and famous painting by Rafael called the School of Athens. Yes. This is like a visual manifesto of human knowledge.

1:59:24And so there's all these very important people Aristotle, Plato, Socrates, Pythagoras, Pythagoras, etc. Anyways, she got the license, I think from like the Vatican. And then she worked with Dolce and Gabbana to make it into addressed for the occasion just to celebrate learning. But there she is with with our boy Jimmy Donaldson. So anyways it was a great event. Thank you Yuri and Julia for including us. All right guys I got to wrap. All right David I miss you. Thanks for the invite. All right, bison. I will hand deliver Jason's invitation. I'm pretty sure you guys have a phone number you can text me the invite.

2:00:05I could you can send me a calendar. I have a G -cow. I've got a Google calendar you could invite. I'm a good at that. Oh, my God. Oh, my God. Oh, my God. It's so funny. That event that Sachs was at, one of our mutuals was like, hey guys, this incredible event's going on, this famous person's hosting it, the celebrities are coming, J -cow, Freiburg, everybody you're all invited. And then like two weeks per day, I was like, are we going to this thing? Because I'm just like my calendar and everything. They're like, ah, yeah. Yeah, the event's happening. and I'm like, for you, Jason. Did you send me a vent?

2:00:38And they're like, they're like, I'm not sure. You're my rider, but you're texting me. The invite, but you didn't email it? Okay, it's sure. I will never go to an event that rejects you ever. Like a rider, die, baby. For our chairman, dictator, another exceptional episode of The All in Podcast. We'll see you all next week. Bye bye.

2:01:04I'm going on a trip. And it said we open source it to the fans and they've just gone crazy with it. Lumby West, I'd be sweet up, you can walk. I'm going on a trip. What are you doing? What are you doing? I'm not really sure. Besties are gone. That's my dog. Take it away. I wish you're driving. Oh man, my hamster will meet me. We should all just get a room and just have one big hug. Because they're all just like this like sexual tension. They just need to release that. What? You're a bee. I'm going to be your VP. Be your VP. We need to get merch. I'm going to leave.

2:01:52I'm going to leave.