"WHIPPING America's Industrial Ass!" Kevin O'Leary x Steve Keen Economics Debate

0:01Piers Morgan:Today, we're taxing.

0:03Kevin O'Leary:Redistribution of wealth has been attempted multiple times over 200 years. It failed every single time. China's been far more effective at drilling people out of poverty. I don't want my kids living under Chinese rule. We're going to go into a program about what I call compliance by tenderization. You say to whoever the supreme leader is, your brother's house on the hill at two o 'clock, it's going to be gone. The new garage you built for your cars, it's going to be gone.

0:40Piers Morgan:The US was in such a rush to sign an MOU with Iran, but it was purposely vague about everything of substance. That wasn't an accident or a failure of statecraft. It was the only way to get it done. But that's also the reason it's unravelling fast and seems destined to unravel again in the months or even years to come. Oil prices will spike every time it happens. So will the cost of fertiliser, food insurance and borrowing. In short, everything will pretty much cost more. It's the very inflation which President Trump pledged to rein in. And in a big election year, it could become his worst nightmare.

1:10Piers Morgan:Well, not by coincidence, Trump has been actively promoting the Freedom Fuel Network this week, a chain of gas stations offering cut-price fuel. The White House says they're not subsidised by the government, but it's bizarrely unclear who is behind them. Other recent giveaways include Trump accounts, free investment pots for kids, and Trump Rx for subsidised prescription drugs, all of which was enough for USA Today to ask, Trump realises this is a kind of socialism, right? I guess to backdrop a furious debate about wealth taxes, both in the US and indeed on this show, we've invited two money-minded guests to tell us what is really going on.

1:43Piers Morgan:Joining me to debate, this is Kevin O 'Leary, Shark Tank investor and venture capitalist, and Steve Keen, Professor of Economics, who's here with me in London. So, Steve, welcome to London. Lovely to see you. And, Kevin, great to have you back on Uncensored. So, Kevin, let me just cut to the quick here. I don't get any of this Iran thing from a political or economic strategic vanguard, if you like, in the sense that the longer it's dragged on, the more of a drain it's been on the global energy market in particular, and it shows no sign of ending any time soon. It's obviously had a bad effect on inflation.

2:22Piers Morgan:It's obviously negated a lot of the impact of the tariff war. which many people thought was actually going quite well. And so people look at it and go, well, hang on, we're middling in another Middle Eastern war, which Trump said he wanted to not do, and it's having the wrong effect on cost of living and inflation, which are now spiking again when they were going down. What is going on here? Can you make sense of it?

2:45Kevin O'Leary:And yet the market's near all-time highs, and you're bringing up a great question, why? Let me put the dots together. And I look at it from the investment point of view, from the sovereign wealth point of view, private equity point of view, trying to figure out what this means long term. Because you're right, it's definitely inflationary, not just for energy costs, other commodities, for example, fertilizer and other goods that have to go through the strait. The whole deal is about opening up the strait perpetually, no different than Panama Canal, Suez Canal. So what's the solution going to be?

3:18Kevin O'Leary:It's going to look like this. This is what the market is assuming. And I'm betting, and with my own dollars, as I put money to work for myself and my investors, this is what it's going to look like 24 months from now. There's going to be a cost to maintain the straight open. And let's call that, I'm guessing like everybody else, but$5 billion a month. There'll be a tithe on every ship, maybe 10 % to 20 % of the value of the goods in the ship. But what that does is reduce insurance amounts significantly if the protector is the United States plus the coalition of the willing in the Gulf. And we know which states there are.

3:54Kevin O'Leary:Now, why would Iran put up with this? Well, here's why. And this is where AI comes into play that I don't think a lot of people have thought through. Let's go right to the Department of War, the Pentagon or whatever you want to call it these days. And think about this. We're going to go into a program of what I call compliance by tenderization. Now, what does that mean? If you have extremely high precision ordinance, you don't need boots on the ground. An example, you say to whoever the supreme leader is of that month or that quarter in Iran, your brother's house on the hill at two o 'clock, it's going to be gone.

4:31Kevin O'Leary:Get get the maids, get everybody out of there. The new garage you built for your cars, 430 on Thursday, it's going to be gone. 20 % of your capacity we're going to take out next Friday at 9.05 so that your ability to pay your militia will be reduced by 20 % in terms of the oil you sell to China and other countries. And with this precision technology, which, by the way, is using AI servers, American servers, this is what is going to change the nature of war. They are never going to comply. They will be tenderized constantly. And so you have this balance of tenderization without a whole lot of commitment because you're going to make other countries pay for the piece, which is basically keeping the straight open.

5:15Kevin O'Leary:The price of oil will vary between 65 and 80 during the tensions and the tenderization programs. But every bridge, every house, every power center, every pipeline, every single refinery can be trimmed with a tenderization methodology. Not the whole thing. You don't kill anybody. You simply tell them coming at 905 and there is nothing they can do to stop it because you continually tenderize their air force, making sure they have a weakened air defense using inexpensive drones. And all of this is why people haven't thought this through. Every data center built going forward in the U.S. is going to have to give up at least 20 percent of its capacity to the U.S.

5:58Kevin O'Leary:government to protect the future of the U.S. citizen and allied countries. And why do I say that? because I'm in this business. I build them in Norway and Finland and Canada and Utah, and I'm having those discussions. And I agree with this policy. It's coming. It's all about tenderisation. Old warfare's over. New AI war. Drone-based, high-precision ordnance. That's the future.

6:25Piers Morgan:Well, fascinating, and has a real clarity to it, which Donald Trump seems to have not been able to exercise verbally over quite some time about all this. Steve Keen, you were pulling a few faces there. I take it you're not entirely in agreement with Kevin. So what would you say to that? I'm not in agreement. And for a start, this is a typical, I'm afraid to say, one-sided American view of everything. Everything America's do, Iran seems capable of doing just as well. And the fragility of that area is something which is grossly underestimated by the American invaders and by people commentating like this.

6:59If that's what America tries to do to Iran, Iran is quite within its rights because those are war crimes. You're taking out civilian facilities, damaging the civilian system. Those are war crimes. It's quite irresponsible of Iran to say, we're going to take out desalination plants. And if they do, some countries in that region rely on over 90 % of their water on desalination plants. Now, all Iran has to do is say, one more bomb and we take out desalination plants, and that lever America has, with the backing of the Arab states is over.

7:34Piers Morgan:I mean, Kevin, that has been the problem for the last four months, is that Iran has not really bothered in trying to compete with the United States and Israel with conventional military warfare. Instead, it's run an asymmetric war using the Strait of Hormuz as this extraordinary piece of leverage, holding the whole world over an energy barrel and also attacking the Gulf states in a way that's really damaged them economically. So it's almost like there's two wars going on here. And as Steve said, I mean, they pretty much responded to anything that the US and Israelis have been doing by doing their own thing, which has turned out to be often very effective.

8:15Piers Morgan:How do you stop them doing that?

8:17Kevin O'Leary:Well, to understand the future of this conflict, you have to go back and look at the past. 60 years ago, this was a very enlightened nation, and it just ran into some pretty bad management. And let me explain the management structure and why the tenderization program is going to work very effectively. You've got 150 ,000 paid militia overseeing an army of 1.1 million paid militia. The 150 ,000 have all the power and they are close to whoever the leader du jour is. They make that money through nefarious means, much of it illegal, but based on energy sales. So if you want a tenderization program that effectively threatens the leadership so they understand the pain of tenderization, you start to play with the economics, which right now are about$202 million U.S.

9:10Kevin O'Leary:a month. You can turn that off tomorrow with a small amount of tenderization. I'm not suggesting the whole thing. You just start with 10 percent and you squeeze because what you're trying to do is get the leadership, who I don't think will ever change. They have no problem killing their people. It's a brutal place. But that's their own business. But if you threaten their ability to pay for their security, which is one hundred and fifty thousand plus the one point one million, and you do that through tenderization, it's highly effective and it's going to work. And it has nothing to do with the U.S.

9:47Kevin O'Leary:playing some kind of overall leadership role. It's the region together that will agree on this strategy because they have the ability to do it. Currently, the Chinese cannot match the jamming technology that the U.S. is using. And all of these high-precision ordnance, which currently are too expensive, so there's a whole new program of lower-priced drones being built in places like North Dakota, Utah, Oklahoma, where they're testing much lower-cost ordinance with much higher precision. So when you talk about tenderisation, you can be very, very specific. You don't have to kill anybody. What you want to kill is cash-flow-paying militia.

10:27Kevin O'Leary:But why... OK, but... 100 % it's going to work.

10:30Piers Morgan:But Kevin, why am I hearing all about this from you and not from President Trump? Why is he not coming out with a whole speech about tenderisation in the way that you have?

10:40Kevin O'Leary:You know, I spend a fair amount of my time in Washington these days because the projects I'm building are at$16 billion at a time. You should make the assumption that every tenant is talking to me about facilities like the ones I have in Canada, Finland, Norway, Denmark, including those agencies concerned about this technology. And I'm not spilling anything that's secret. I'm telling you that both that, saved those two pilots was controlled by AI technology and predictive math that made sure it had the weather to go rescue those two pilots out of a server, maybe in northern Florida near Jacksonville.

11:23Kevin O'Leary:I don't know. Or perhaps in Texas, but it was on sovereign soil in the U.S. That's an AI war you're watching right now. And it's a new form of warfare. And if the Chinese got more advanced and they wanted to take over Taiwan, they would do exactly the same thing. We can't let that happen. So what I'm suggesting is a narrative that's playing out now privately. I'm a private sector guy. I don't work for the government. Is every single data center built going forward and the power generation associated with it in North America or in those nations that are in the circle of friendship, like Finlake, like Norway, like Canada, 20 percent of that capacity goes for defence.

12:07Kevin O'Leary:20%. 20 % of the servers always on guard. And that's where we're going. And I think people should start thinking this through because they haven't tied the dots together. And I don't think Trump's going to, but I'm telling you what's going to happen. I guarantee you this is how it's going to play out.

12:22Piers Morgan:Okay, Steve, you're still not convinced? No, absolutely not. I'm thinking I'm listening to McNamara 40 years later with body bags replaced by tenderisation, which sounds like we're talking about a cooking show rather than the real world, and it's all one-sided, as if the only country that can do this is America. One thing we've learned from this whole experience is China is well and truly leaving America in its dust in several industrial sectors, potentially including AI, and we know Iran has got enormous capabilities on the same front. A lot of what you're getting from America is coming from what's been done in Ukraine.

12:56I'm sorry, I just don't see this as a one-sided war.

13:00Piers Morgan:Let me turn to an impact of this war, which is obviously the economy, but also cost of living for people. There are many people in America really struggling. There are many people in the UK really struggling. And I had a sort of populist economist called Gary Stevenson on the show last week who's got a new film out. He's been pretty heavily criticised for it. But I want to play a clip from that and then just talk to you about this concept which he is very strong about, which is about a wealth tax.

13:32Kevin O'Leary:Listen, I know that if we don't deal with growing inequality, then ordinary British people will fall into further and further desperate poverty. And I know that's going to happen. And I see it happening. And they see it happening. I don't want it to happen. I come out here. I tell them, if you don't want your kids to be poor, you need to deal with this growing inequality. The only way to deal with that is growing taxation.

13:51Piers Morgan:Now, Steve, let me start with you there. What is your view of a wealth tax? I'm in favour of redistribution from the wealthy to the poor. So I'm on the same side as Gary when it comes to that front. My problem comes down to will the wealth tax actually work? And is it a problem of wealth that's causing the issues we're having? It certainly is a contributing factor. But a major part of this is, and particularly looking at the Californian bill, which is where I made my comments earlier this week, that Californian bill is saying we must increase state tax because of government funding cutbacks by the federal government.

14:26Now, in fact, it's the federal government cutbacks that I think are the mistake. And you don't need to balance the government's books. This is all a case of people applying household accounting to government finances, and it's completely and absolutely wrong in accounting to do that. And this is what's causing a lot of the angst we're seeing around the world, because when you cut back spending, what do you cut back spending on? Health, services, education and welfare. You don't cut it back on the military-industrial complex. We're getting a case here about devoting 20 % of the government's money to the military-industrial complex.

15:01It gets far too much already. So I agree with Gary's sentiments. I don't think he's got the right mechanism to do it. We do need to reduce the wealth inequality, and we do need to provide the welfare services we used to provide 50 years ago. When we had far less industrial power, industrial wealth, we gave people welfare. We had health and education, which was worthwhile. That's what's being destroyed. And this is where a lot of the anger is coming at, the ruling class in America now and the ruling class here in the UK.

15:30Piers Morgan:I mean, Kevin, it's also true the populations of the United States and the UK were massively smaller than they are now. I mean, one of the problems we have, for example, in the UK with the National Health Service is when it was created, it was created for a population of 50 million people. We're now 70 million people. And it's still the same system. is creaking at the seams because we've had so many people come into the country putting extra pressure on it. But specific to this concept of a wealth tax, the idea is becoming increasingly popular with the public. Roughly 75 % of Brits are in favour of it.

16:05Piers Morgan:62 % of Americans say billionaires are taxed too little. And there's no doubt, you've got a moment in time here where you have the first trillionaire in Elon Musk and yet you have millions of people who can't afford to feed their children in both our countries. So what's the solution to that?

16:26Kevin O'Leary:So both of us, or all of us, all three of us on this narrative remember the song Tax Man by the Beatles in the 60s. Yeah. And the Beatles, like everybody else that was making money, didn't want to get taxed at 98%, so they moved to the south of France. Then France tried it in the 80s. They tried socialism. Didn't work. People left and moved to Switzerland and other countries. It's been tried everywhere. Socialism has been attempted. The redistribution of wealth has been attempted multiple times over 200 years. It failed every single time. They're getting redistribution up these days. That's what people are complaining about.

17:05We have super inequality now. Listen, there's always been inequality.

17:11Kevin O'Leary:Wait a second. There's always been inequality. But when you talk about an extreme like a trillionaire, okay, How many jobs has Elon created? How many billions in taxes has he already paid? How many new technologies did he develop without government assistance initially? How much risk did he take when SpaceSense was public? I'm all for people being rewarded for taking risk. And it failed in 2008. And I argue to you that everybody that tries this will get to the same place as Cuba, North Korea. And what about China? Russia. OK, this is the elephant in the room we finally have. People have been saying to me for decades, what country is trying your approach?

17:51I've had me say that I can't nominate one. Now I can nominate China. And China's been far more effective at drugging people out of poverty. And it's also whipping America's industrial ass. Now, this is something which... You're going to tell me China's communist, or rather, a capitalist. That'll be good fun. It's the one country which is focused upon redistribution, raising the poor up and extending the services the vast majority of the public achieve. You might not know of John... You probably know of John Kenneth Galbraith. One of his most famous comments was to talk about America being characterised by private affluence and public squalor.

18:28And that really is the state of America. China's gone the opposite direction. It wants public affluence as well as private affluence. It showed the combination works. Now, that is completely against the narrative you're giving. Kevin?

18:41Kevin O'Leary:No, I don't agree. I think you brought up a very good point, though. There is only one large adversary to rival the success of the U.S. economy for 250 years with all of its faults. It's still the only country on Earth where people will risk their lives drowning under barbed wire in a river to get into. The American dream is the primary export of the country. I don't see a lot of people begging to live in China. Why do I probably get out of America these days? That's a cute narrative, but it's 250 years of success. There's never been an economy successful in the U.S., and it's still the number one economy.

19:19Kevin O'Leary:If you gave me a choice, do I want to go live in China? I have no problem with the Chinese people. The government I have a huge problem with. They are the adversary. And what's going to come of this is the, right now it doesn't look like it, but I guarantee you in 20 years, the Canadian economy that has everything U.S. needs is going to merge with the U.S. economy and for only one reason, so they can spend 5 % of GDP telling the Chinese, don't mess with us. That's where we're going. It's two different thoughts about how a human lives. Freedom of speech versus communism. China's been far more successful than America has for the vast majority of its population.