Canada’s Break With Trump Just Got MUCH Bigger | Receipts Live

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1:00Hey, everyone. This is Catherine Randpell, economics editor at The Bullwork. I just wanted to give a quick note for everyone who is listening to The Bullwork Takes podcast. Receipts is now its own stand-alone podcast. That means this episode that you are watching or listening to is the last episode of receipts that you'll hear within The Bullwork Takes podcast feed. And to get more from me and JVL and the rest of our bodies in the future, you will need to subscribe to receipts with Catherine Randpell on Apple Podcasts Spotify or wherever you get your podcasts. And until then, thanks so much for listening and enjoy the show. Hey, everyone. I'm Catherine Randpell, economics editor here at The Bullwork. Join as always on Fridays by my colleague and pal JVL, who is once again modeling our excellent merch that we offer here at The Bullwork, please. Yes, yes. Honestly, a friend of mine, unprompted yesterday told me that she was going to buy the capitalist wing of Antifa shirts as well, which maybe next week I'll model that for you all.

2:05That is what you're designed for. I think it is. It definitely is. We are going to chat about all sorts of other things that were designed for me, including the economic policy platform of the Canadian government. So we're going to chat a little bit about Canada and how Canada feels about the United States, how Canada feels about the economy. Yeah, exactly. Their deepening relationship, Canadians deepening relationship with the EU, what all of that means for both of our economies, all three of our economies, really. We're going to talk about the Fed and how Donald Trump is hot dogmaning himself because he's wondering why the Fed was forced to raise rates, who was responsible for this. And we're going to talk about some other fun stuff, including some government data that's being kept from you. Well, we have theories about why. And maybe if we're lucky, we'll talk a little bit about our old pal Elon Musk.

3:08So JVL, as I said, I want. Right, I take it from your topic rundown that all the things we're going to talk about are great positive developments. They're very cheerful. They're all very, very cheerful. I mean, at the very least, it's cheerful for some people. So Mark Carney, who is our neighbor to the North, just got the highest approval ratings in Canadian history, 70%. So shout out to Mark Carney. And this is interesting for a number of reasons, including that Mark Carney is like the Catherine Rampelle fever dream of what an economic leader should be. He was previously the governor of the Bank of England. He's a trained economist. He had also worked as an investment banker. That's neither here nor there. But generally, not the kind of thing on a CV that you would expect to propel someone toward popularity. And of course, for the two of us.

4:09Exactly, exactly. And apparently for the Canadian populist, because he is implementing a pretty darn strict neoliberal agenda. Lots of things that we were told, the people, the populists worldwide no longer wanted, privatizing airports and streamlining government and things like that. And he's still very, very popular now. To be fair, he's probably not popular because of those things. He's popular because he stood up to Donald Trump. And the world, including the world of Canada, is hungry for heroes. So I'm curious to hear your thoughts, JVL, on how you think this works out for Carney and for what we are learning about, which is the potential for Canada to become an associate member of the European Union. I mean, how much time do you have? Because I get a lot of thoughts on this. Oh, please, please. And I think we have a lot of viewers in Canada who want to hear your thoughts.

5:13I think you have to start by understanding that Mark Carney is a wartime president. And Canada sees itself totally reasonably as facing an existential conflict against a now hostile superpower to itself, with which it shares a border. And I want to, I want to dial us back here one second by giving an unrelated anecdote, which has been driving me to distraction all week. Three days ago, the president of the United States sent out a tweet on truth social, the social networking owns, in which he boldly and specifically accused of the democratic party of participating in a plot to assassinate him in the summer of 2024. And he said that the democratic party was behind this assassination plot. In a normal sane world, this would have been the most explosive news in American history.

6:18It would have been banner headlines on every single newspaper in the country. It would have kicked off crazed reporting and investigations. It would have led the evening news because we would have been in a position where one of two things was going to happen. Either it was going to turn out that this was true and the democratic party did participate in a plot to assassinate a presidential candidate, in which case a whole lot of people were going to go to jail. And there was going to have to be like mass reorganization and purging of the democratic party from the fascist violent elements within it. Or it was going to turn out that the president of the United States is either insane or a liar. And Those things are not mutually exclusive, but not mutually exclusive. But but instead what happened in America was everybody looked away and just pretended it didn't happen. And so like as a thought experiment, I want you to begin by thinking, what would have happened in America if everybody just took the words of the president of the United States

7:20seriously, right? And we could see like it would have set off this large chain of events. Because in America, we live in an assay in asylum and we've become acclimated to this and we no longer treat things as having meaning. We just again looked away because we're taking this to uncomfortable conclusion. Nobody wants to have big investigations. Nobody wants to say out loud that the president is a psychopath, right? Because that's really indelicate and you know, you look like one of those never trump crazy people. The rest of the world, however, has faced a version of that for the last two years. The president of the United States said that he wanted to annex Canada and turn Canada into a member of the United States and that he was open to, he wouldn't totally rule out. He didn't think using force would would be necessary, but he didn't completely rule it out. And he said that it was vial to America's national security and it was vial to America's national security that we annex Greenland, which was part of Denmark.

8:21The rest of the world acted like these words were had meaning and like they had to react accordingly. And that is what Mark Carney and Canada have done. And they, the reaction has been a very, very serious one. I mean, first of all, they swirved and elected Carney, which nobody thought they would. And that was entirely because of what Trump did. And secondly, Carney has absolutely moved to realign Canada from a north south alignment to an east west alignment. And he has made overtures to the European Union. He has made overtures towards China. He became the first Canadian Prime Minister to visit China in like 20 years. And what you've seen also is a total unity of purpose. So earlier this week, Canada held a big investment summit in Toronto. They brought in foreign investors, people from sovereign wealth funds, CEOs. They're looking to attract about a trillion dollars in investment.

9:24And the most notable thing is this was organized by the current government. And the closing speaker was Stephen Harper, who is the most popular conservative party prime minister in Canadian history. And Harper and Carney are totally like this. It would be like having Barack Obama and George W. Bush holding hands in 2010. And that's why he's at 70% approval. It's because everybody in Canada just treated the words of the American President as if they mattered. Yeah. Well, they, I mean, they, they should presumably. I think should. Right. No, this is, again, I'm saying because they are not living in a sane asylum. We are. We are not necessities. Yes. Yeah, they're not desensitized. And they shouldn't be because when you're talking about your, your sovereignty as a nation, like, you don't have that luxury, you're like, we're decadent. And so we, or foolish, whatever, we can have a big debate about that. But it is very important to understand. So he leaves this summit.

10:25He goes straight over to Europe. They float the idea and a speech about becoming an associate member of the EU, which is not a thing that exists. They're looking at the EU is considering making this happen. He has already begun shifting Canadian defense spending away from America, which is also something that Europeans are doing. This is a, you know, again, these are people just preparing for the breakup of NATO. And when you talk to people in defense who were bullish on the idea that NATO could last past Trump, and they would always say, well, it's about interoperability, you know, they're all so reliant on American military systems that they really don't have any choice but to stick with us. And that's all shifting. You've seen huge, huge growth in the European defense sector over the last two years. The Canadians are going to throw in with that. They are no longer going to be interoperable with America in 10 years. And all of their spending is pointed in that direction. So and at the same time reaching across to forge better ties and better relationships

11:29with China. And Canada is in a really unique position by dint of its geography and resources to be able to be a counterweight to America in a multipolar world order. Right. So world order where it's not just an American hegemon, it's not just the duopoly two superpowers China and the US, but it's truly multipolar, right? Where the EU has decided to be, you know, come together and act as a true global force. Our economic throw weight is about the same as America's, frankly. We could put them all together. And to have Canada right there on Northern border working on both sides of that as, you know, close to the EU, but also able to draw closer to China when necessary could cause us no end of headaches. And you know, we are going to wind up isolated in alone and we deserve it because that's what America, the American people chose. Yeah. And I think that's one of the concerning things.

12:29It's like a 10 minute monologue. I should say. But it was a good one. Hey, what's up guys? It's Hayley Bailey. Okay. I need to tell you about something. I just got YouTube premium. It's got tons of awesome features like offline downloads so I can download my favorite videos before I travel and watch them whenever I don't have Wi-Fi because we all know airplane Wi-Fi is the worst. I get ad free, I get back room play and there's like a ton more in there. You should try it. If you like YouTube, you'll love YouTube premium. Try it now for two months free at youtube.com slash premium. If you like YouTube, you'll love YouTube premium. Hi, I'm Sean Evans from Hot Ones and I want to tell you about YouTube premium. It has offline downloads so you can watch without Wi-Fi. Background play. So you can lock your phone and it still plays baby. Oh, and it is completely ad free. Yes, I said it. Ad free. Try YouTube premium for two months free at youtube.com slash premium. Trial eligibility varies, terms apply, cancel anytime.

13:34There's nothing like being in the stands cheering on your favorite team. Game time is your hack to unlocking amazing tickets in just a few taps. It's easy to use and the game time guarantee means you can trust you'll get 100% authentic tickets at the best price. These are always included. So what you see is what you pay. Take the guesswork out of buying sports tickets with game time. Download the game time app and create an account to start searching for tickets to upcoming games and events. And I think that's partly what's concerning about all of this is that this is not just this momentary disruption in our relationship between the United States and Canada. This will be enduring. This is largely anecdotal on my part, but it is backed up in polling data that Canadians are mad, not just a Donald Trump, they are mad at the American people. And they should be as they should be. They think that the fact that we elected him not once, but twice, once maybe a fluke,

14:36he lost the popular vote then. He lost the popular vote. People didn't realize they were just taking a chance. The 2024 election is so important. Right. Because that is the, no, no, America saw, and they didn't like, this is the other thing about 2024. I'm sorry, I've interrupted you because I'm just like, you know, I'm just fueled by hate fire. The thing about 2024 isn't even that America got through a first Trump administration and they sort of locked into being unscathed. We had a global pandemic in which a million people died and then he attempted a coup. We got the worst case scenario and still, and they got the worst case scenario, then they got a totally fine democratic administration, which did not force transferries on everybody's kid and did not go into a global depression or anything like that. They got a pretty okay, very normal baseline, median democratic administration in the

15:39intervening four years. And the Americans then said, by increasing his vote share, yeah, we want Trump again. Where does the one can't ignore that? Yeah. And I think we have some data actually from some recent polling showing that Canadians are more likely to say that they share more in common with Europe than America, the blue bar here is the share saying that they have more in common with Europeans. The red bar is United States. They're right. I don't know if Matt, if you have the other charts, but like we also have some data on yeah, half of Canadians support joining the European Union. And then that Canadians at the very least overwhelmingly support closer, closer integration with the European Union. Because they don't really want to be part of the European Union. They want to be tightly and that's why actually I think the associate member is such an interesting and strategically deft move because it's undefined.

16:42We can define it anyway we want to if you're Canada and the European Union and you can define it in such a way that both sides get the best of all worlds. If it's joining the European Union, that is so freighted, you know, there's going to be a lot to well there. You like these conditions, you don't like those conditions. This again, Karnie has been an incredibly smart strategic thinker and he's been fantastic on this and he's a wartime president and good for him, good for Canada. Yeah. Can I ask you a question? Yeah, sure. Go for it. So on the next level like a month ago, I was rapsodizing about how much I love Mark Karnie. And I said, boy, I wish America was the kind of place where somebody like Mark Karnie could be elected president. And Sarah said absolutely somebody like Mark Karnie could be elected president in America. And I just laughed at her. No.

17:42Who's right? Only in West Wing. Only in the West Wing where I was saying Jed Bartlett. Jed Bartlett was a Nobel Prize winning economist. This is the fantasy of all fantasies. Someone like that could only get elected in Canada, not in the United States. I'm sorry to say. So I think it's very unlikely. I think all of those parts of his biography that I ticked off, including the fact that he's an economist and a central banker and an investment banker, I think all of those things would be just like such a net negative in the United States right now. And less maybe like there were some other bully bullying us. I don't know who that would be at this point. And then we would have our wartime president and maybe someone with that background could get elevated. Could prove their medal, but I think it's unlikely. So Karnie I think is a good deal, more liberal, just for the in his own instincts than you and I are. But he is pursuing neoliberalism in this moment.

18:43And he has the political freedom to do that precisely because his opposition to America is like the base populist fact. Right. He's at the most basic level Canadians want him to protect Canada. And that frees him to pursue these technocratic neo-lib policies that people like you and I like. Yeah. Yeah, he wraps himself on the flag. It's the music comments. It's like Jay Powell for president. Yeah, baby. Well, you know, it is interesting. I forget who pointed this out. I think it was near a tandem pointed out that like the three strongest political bullworks we have fighting Donald Trump are all former investment bankers. So Jay Powell also, former investment banker, Mark Karnie and McCrone, all former investment bankers. So, you know, that's, I know, I know who would have guessed those of us who were around to have covered the 2007 financial crisis never would have guessed as much.

19:43But it will be the eye bankers who save us. The eye bankers who save democracy against all of the odds. Yeah, I don't think we could elect someone like that here. But you mentioned, JVL, that the American people put Donald Trump back in the White House despite all of the baggage, I think is a euphemism for everything that had happened in Trump one. The thing is they are not so hot on this guy right now. They put him in place. They reelected him because of inflation, right? That was the thing that people were so mad about during the Biden era, despite all of the regular, normy stuff that we were just discussing. They were really, really fixated, I think, understandably, on high prices. I think we have a little clip from Harry Enten at CNN talking about how Donald Trump is faring in terms of favorability on that issue right now. How do you get this low? How are you breaking records that no other president possibly was able to achieve?

20:46Well, the way you do it is by being negative across all of your partisan groups. Trump's not a prover on inflation among Democrats. 95 points underwear. That's uniformity, basically. Independence, 74. I mean, come on, what are we talking about here? And among Republicans, even Republicans have turned against the President of the United States, out of the question, minus four points. Negative, negative. Yeah, so Donald Trump just ran into the math in my head as to what the actual split is to be negative 95. I mean, that's 98 to two or 97 and a half to two. Yeah, that was the net, right? So yeah, it could be. The net is not. It's pretty striking. And actually earlier in that segment, Harry mentions that Donald Trump now has the lowest rating on inflation of any president ever, including Jimmy Carter. Wow. That this is really striking.

21:47Donald Trump, again, one office, or at least one office again, largely on a promise that he would deal with inflation. He would reverse inflation against the odds. And instead, now has the worst approval rating on record as a president for how he has handled inflation. And that is deserved to be clear because inflation had been decelerating when Donald Trump got into office. It was still too high, but it had been coming down and had been cooling. And it re-accelerated around liberation date last year, April 2025, because he put in place the tariffs. And then, of course, in addition to the tariffs, we have the war, which has raised the cost of energy. Right before we started this, I think I saw that energy or oil prices were had dipped below $100 a barrel. I don't know exactly where they are right now, but they're around that level. And of course, that feeds into all sorts of other prices for things that businesses

22:47and consumers buy. So Donald Trump is single-handedly responsible for re-inflating our price growth. And he's getting his just desserts. I think that's what it comes down to. Hey, what's up, guys? It's Hayley Bailey. Okay. I need to tell you about something. I just got YouTube Premium. It's got tons of awesome features, like offline downloads, so I can download my favorite videos before I travel and watch them whenever I don't have Wi-Fi. Because we all know airplane Wi-Fi is the worst. I get to add free, I get back room play, and there's like a ton more in there. You should try it. If you like YouTube, you'll love YouTube Premium. Try it now for two months free at youtube.com slash premium. If you like YouTube, you'll love YouTube Premium. Hi. I'm Evan from Hot Ones, and I want to tell you about YouTube Premium. It has offline downloads, so you can watch without Wi-Fi. Background play. So you can lock your phone, and it still plays, baby. Oh, and it is completely add free.

23:48Yes, I said it, add free. Try YouTube Premium for two months free at youtube.com slash premium. Trial eligibility varies, terms apply, cancel anytime. Yes, it's Angus Maximus. This partner has one pound of a pound of hot, sushi cooked to honor Angus Speed. It's more fish than a quarter pounder. The battle of clothes. And for only $5.99, even regular juice can afford it. Like that guy. You can get that big old burger. Yeah. He holds Angus Maximus, only $5.99 is cold senior. A bill for a limited time in participating restaurants, tax on included, non-valid for use within a combo or in combination with any other offer or discount. Shop the Sherwin Williams Fall sale and get 35% off paints and stains September 15th through the 21st, with prices starting at 29.86. Whether you're refreshing your interior or exterior, we've got the colors to bring your vision to life, and with delivery, getting everything to your door is easier than ever.

24:49Shop online to have it delivered or visit your neighborhood Sherwin Williams store. Click the banner to learn more. The sales only some exclusions apply. See store for details delivered available on qualifying orders. I'm going to defend the American people here for a minute. God help me. Okay. So normally this is the part where I would say it's ridiculous that his rating on inflation is worse than Carter, because under Carter inflation was running at like 10% or something like that. Like it was. And what is our inflation right now? 39. Three and 3.4%. 3.4% right? So. Over here. Yeah. But it is it is. Apples and oranges. The difference is that Jimmy Carter didn't choose inflation. Yeah. Right. I mean, we had an oil shock. There are all sorts of exogenous events happening around the world. You can say that the Carter administration should have dealt with it in some better way. I didn't mind not a student of the economics of the 1970s.

25:51But this is a case where Trump had a couple of buttons in front of him, which had like glass over top. You know, we'll cause inflation. And he's just like pushing them and pushing them and pushing them and so it is absolutely deserved because everybody knows how to stop the inflation and he doesn't want to. Yeah. Okay. Well, he especially doesn't want to as evidenced by his reaction this week to actions by the Fed. So the Federal Reserve as our viewers and listeners probably know, met this week. They decided to raise interest rates, which is a thing that the Fed does when they are worried about inflation. And Donald Trump, of course, was apoplectic at even the prospect of raising interest rates. He thinks rates should be lower. And he's real mad. He thinks that well, actually, why don't we play what his interpretation of events this week is? I talked to Kevin and I said, you might as well vote with the board because it's not going

26:53to matter. The board is very hostile. They're very political. They're doing the wrong thing. There are bunch of politicians or people put on by politicians. And it's a shame because it's too high an interest rate. Despite that, the country barrels through everything because we're doing so well. But the interest rates are too high. We should be paying the lowest interest rate anywhere in the world because we have the strongest credit. If we wanted to get rid of deficits, which we could do with the swipe of a pen with every country, we'd make a trillion and a half dollars a year. We'd pay off our debt, we'd do all sorts of things, but we haven't chosen to do that. But at some point, we will. Interest rates are too high. The board is very hostile. Yeah. So he means there. With the swipe of a pen, I assume. I don't know. I don't know that he knows what he means. So he is mad that interest rates are high and are rising. This is how I went on Pekko. He said, he's mad about that. That part is not surprising.

27:54The thing that I have been wondering about is how Kevin Warsh, whom Donald Trump just appointed to be Fed share, was going to navigate this very difficult position that he was in, which is doing what he needs to do to get inflation down and that he is like constitutionally biased to do, which is having tighter modest Terry policy. He's known, he's been known for basically his whole career as an inflation hawk. Someone who looks at one given set of data and is like more prone than others to say, let's raise rates. Let's, let's tighten monetary policy because I'm really worried about inflation. How he's going to do all of that and not get Trump furious at him. And by furious, I don't just mean like Trump throws a catcher bottle against the wall or whatever. I mean, Trump deploys the full arsenal of government weaponry that he deployed against J. Powell. Kevin Warsh's predecessor, whom Donald Trump had also originally appointed to that position. And if folks may remember, Donald Trump bullied, threatened, harassed, said he was going

28:58to fire J. Powell, launched a criminal investigation, a bogus criminal investigation into J. Powell. And so my question from the get go has been the way that Powell responded to that kind of pressure, that kind of law fair was really admirable. And I think most people don't have that in them to say, yeah, you're going to threaten me with all these things. You're going to try to investigate me and maybe indict me, who knows? And I'm going to keep doing my job. Most people I don't think have that, that strong of a backbone. So I've been wondering like, how is Kevin Warsh going to handle this? Because he's going to find himself in exactly the same position. And I think what we've learned is that Kevin Warsh, well, from public reporting and those comments from Donald Trump amongst others, Warsh's approach has been to talk to Donald Trump all the time, which is like very, very unusual for the Fed share to be talking all the time to the president. The Fed share is supposed to be independent. Is that good? Do you think that's good, Catherine? No, it is. Well, I don't know.

29:58Maybe that's the best strategy he has available. I think in normal times that would not be good. But he seems to think that this is how he can handle the president. He can do his job, Warsh can do his job, and handle the president by like managing expectations or whatever. The thing that I'm worried about is not just that they're talking, it's that Donald Trump's takeaway, whatever Warsh is saying, Donald Trump's takeaway is that Kevin Warsh wants to cut rates and the rest of the board won't let him. That is what Donald Trump said in that clip we just played. That's what he said in the past. He says, Warsh is a good man. Nope, that Donald Trump used very similar language when he at first appointed Jay Powell. When Powell wasn't adopting Trump's preferred policy decisions, he said, Powell's a good man. I think Powell got like a seven or eight month sort of honeymoon period where he was doing things that Trump didn't like, but Trump wasn't lashing out at him quite yet. It sounds like Donald Trump's takeaway is, okay, Warsh wants to do what I want him to

31:03do, which is to cut rates, but he can't because the rest of the board is hostile and political. What does that tell you Donald Trump will do when he perceives someone as hostile and political? We know that he has already repeatedly tried to fire Lisa Cook, who was one of the governors of the Fed. The Supreme Court stopped him last time around. He's trying it again. I have been hearing concerns for months from people sort of close to the Fed that Donald Trump may also try to go after some of the other members. Jay Powell, in a break from norms, has decided to stick around as a governor, even though he's no longer the boss, he's no longer the chair. He's still on the board. So he gets a vote. Presumably, Donald Trump has not forgotten his grudge for him. There's Michael Barr, who is another Fed governor who used to be vice chair for supervision. Today, a report was released or at least teased from another Trump appointee on the Fed board,

32:04Michelle Bowman, about what happened with Silicon Valley bank failing. I think we have some of that. This new report blames bank supervision. Look, that may be true. I haven't read the report yet, so I don't know whether it makes a compelling case. My concern is that this will be used as pretext to fire Michael Barr, another Fed board member. That basically, the Trump administration has been sniffing around for ways to oust people that it considers hostile and political to Donald Trump's agenda, and this is going to be ammunition, whether or not the facts of the report or the analysis in the report are correct. So that's really where I'm worried things were going. Whether a war is deliberately throwing people under the bus, I don't know, but certainly, and I don't want to suggest that he is, but certainly Donald Trump's takeaway from his

33:07conversation in the board. Trump thinks he is. Yes. Trump thinks that the real problem is not, at least for now, the real problem is not Kevin Warsh. Kevin Warsh is like being bullied or something into voting for rate hikes, even though it was a unanimous decision to raise interest rates. So that's where I'm really worried about what's going to happen in the next few months. So this is, so you and I have been speculating for months now, like how this would work, and what Warsh's plan was. And I think now we see it. His plan was to raise rates, but blame the rate hikes on everybody else and to represent to Trump. Boy, boss, man, I wish that we could cut the rates because we really should be cutting the rates. But I mean, have you seen these people, they're horrible. They're all DEIs and and lib tar, demo crafts. And I mean, if I didn't have them, then, you know, then maybe, well, maybe you could do something about that boss.

34:09And then simultaneously, he hopes that the Supreme Court upholds the federal society's most sincere belief, which is that Republican presidents can do whatever they want, but they can't fuck with the money. And so he will hope that Supreme Court prevents Trump from doing the things that he is signaling to Trump that he would like the president to do, which will then leave him free to kind of conduct monetary policy in a normal-ish way. That seems like an incredibly complicated and dangerous game. How does the replacement schedule for Fed governors work? Are they all in defined terms? Like the chair of the tenure term? Is that right? The chair is a four-year term. The chair is a four-year term. I forget how long the governor positions are. They're like 16 years or something, but people usually, but they're like the 16-year increments are fixed. And so if you come in in your 15, you have to get reappointed at your 16.

35:13I don't know. I may be somebody correct me if I'm wrong about how many years they are. We're sorry. 14 years. Thank you. 14 years. 14-year terms. And the terms for the governors are separate from the terms for the chair and the vice chair. So that's why Jay Powell is able to stay. His term is chair is over, but his term as governor is not. And normally, like, who wants to stick around after you've been demoted? That's why I was saying like a period of use. So somebody else would come in if Powell had left. The person who pointed to him would have been entering on his year of that term. And then he needed to be reappointed. Gotcha. Okay. Look at this. Learning things from receipts with Catherine Rampel. Yeah. So look, to be fair. I don't know what Kevin Worsh is saying to Donald Trump. None of us do. I think Kevin Worsh owes the American people more information about what he's saying to

36:13the president. You may recall that when Donald Trump summoned, again, Worsh's predecessor, Jay Powell to the White House, the Fed was so concerned about even the perception of politicization of that job that it released a statement saying, yes, Jay Powell went to meet with Donald Trump. This isn't Trump's first term at Trump's request. And they had a good discussion or whatever. And it concluded with some language that was like, and Powell's and the chair said, like the Fed will continue to conduct monetary policy as it sees fit in apolitical ways. I just remember there was some reference to them being apolitical or nonpolitical or something like that. The Fed really wanted to make sure that there was transparency here, that there were no rumors flying around, that they were like secretly in cahoots and that the president was in charge of the money supply. And the reason why that matters is not that like it's just about propriety or whatever.

37:14If the head of state, if politicians are in charge of the money supply, that's how you get much worse inflationary outcomes. And this is not a theoretical thing. We've seen this in Turkey and Venezuela, in pre-euro Greece, in Argentina, even arguably in the United States during the 70s, when presidents leaned on Arthur Burns, for example, to print more money, to have loose monetary policy. So the perception that the supply of money that the central bank is independent is just as important as its actual literal independence. So they were really freaked out about that. This time around, Kevin Warsh is apparently talking to his buddy Donald Trump all the time. So Trump is calling, based on the reporting I've seen, Warsh, excuse me, Trump is calling Warsh rather than the reverse. I don't know if that's always true, but I will take it at its word. And Warsh was asked about when did he last talk to Trump during the recent press conference? He would not answer. Trump, of course, said during that pull spray that he had talked with Warsh.

38:19And this is when he said, like, Warsh wanted to cut rates, but couldn't, because the board is political and hostile and whatever. And I told him to go ahead and do it. Go ahead and raise rates, because like you can't fight them. So I do worry about the perception here, the actual political influence and what Warsh's out is. Because one thing I haven't mentioned is that they raised rates this week, but a majority of the committee members who set rates predicted that they would have at least one more rate hike by the end of the year. So it's not like this is one and done. Warsh is going to have to go through this again, probably maybe next month, maybe in December. And I don't know how he's going to handle it. Let me ask you an uncomfortable question. If you like YouTube, you'll love YouTube Premium. It's destroying athlete, creator, and YouTube Maxard. YouTube Premium enhances how I use YouTube with awesome features like offline downloads,

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40:25My dad's got. Yeah. Abilgle for a limited time and participating restaurant tax firms. Taxis without included. Not valid for use within THA combo or in combination with any other offer or discount. My name is Shandon Maldonado, I'm the founder of Yowie, a gift shop from the Lens of artists and handmade objects. I chose Shopify because when I was testing other platforms. It was definitely one of the most user friendly. It was important to me to think about where we would be in the future. of the tools for reading your sales like planning inventory. They're just right there on your dashboard. For anyone starting a small business, the biggest thing I can tell you is it doesn't have to be perfect. Shopify can help you build upon it. Start your free trial on Shopify.com. What if what if what if wash is doing actually the wisest thing? Like it's morally compromised, but what if this is actually the best way to truly insulate

41:27the Fed and the Fed's power from Trump? And it's to pretend to be with Trump, to throw the blame on the other people and trust that the Supreme Court will protect those other people. Because I get a sense that we are so far out in the undiscovered country at this point that financial markets is viewing this are likely to take away from it. The lesson not that like, oh, it's bad that wash is communicating constantly with the president. But actually maybe be reassured that wash seems to be managing the president and so is able to raise rights still. And so much of this is like four years ago, this would have been red light crisis because of the message markets received from it. But now having seen exactly how authoritarian Trump is, this gets perceived by markets in a very different way.

42:29I think it is. I think exactly what you are describing is the case that markets don't seem particularly concerned that it's terrible. Yeah, like it's a sign of the key. Yes. And I do think wash has no good options here. Because again, Donald Trump has basically forced him and the Fed into raising rates as I wrote about in my newsletter this week that Donald Trump is too blame for the fact that they had to raise rates because Donald Trump has juiced inflation. And wash has a bunch of bad options. I don't know what I would do if I were in his shoes. If he just doesn't take Trump's calls as it sort of acts a little bit more like Powell. And I don't think Powell rebuffed the president, but the president took it as an insult, it seems. Right. That maybe that'll, that'll inflame things further.

43:32And maybe the best way to deal with it, I think he thinks, I don't know, but I think what he thinks is basically what you describe, that the best way to deal with it, the best way to safeguard the Fed's independence is to sort of like manage Trump and then do the job. Except there are a lot of people in the past who tried to manage Trump, right? Basically, that was the story of Trump's whole first term was all of these adults in the room who thought that they could manage Trump. And sometimes they actually did. They, you know, there were stories about Gary Cohn's swiping papers from Donald Trump's desk that would have like, you know, torn up a trade agreement or whatever. There were other things that they did to undermine him. But in the end, he's still tried to format an insurrection. This is where it's honestly, it's just like the Canada stuff, right? It can be comfortable

44:33to live in a house of lies where you're constantly, and you can talk yourself in, and you can see, like we just did it, you can talk yourself into saying, look, we have to be realists here, the man as president, elections have consequences. We want to insulate the Fed. If we bad if Trump really did go in and put Kevin Hassett in charge of the Fed or something like that. So we've got to, we got to live in the world as it is because this stuff is deeply important. And a lot of people's lies will get hurt if the Fed loses independence. And so we have to lie and pretend and make believe and accommodate on the other end. And so there's, you can make a reasonable case for that. On the other hand, like you're also trusting in a bunch of other institutions, backstopping you, like the Supreme Court. And you do see that eventually there are bills to be paid for this, right? And this is, you know, Gary Cohn stopped Trump from doing a bunch of crazy things that would have heard America. And that was good. It also resulted in Donald Trump being reelected.

45:37Yeah. Yeah, I don't know. Very hard. Very hard. All right, let's talk about more philosopher. We need Cheety Aganiade to help us figure out what the right course of action is. Is it a moral philosophy? I mean, I don't know if it's about philosophy or if it's just about like gaming out the strat, if it's about game theory, you know, like our probabilities, which, I mean, we get two very different answers depending on which academic we brought in to talk to this about us. Yeah, like in the case that you talked about, the proposal that you gave for Kevin Warsh, like maybe he can manage him to protect the feds independence, maybe, and maybe that's, Warsh thinks that's his best shot. It's also very dangerous because it could backfire if Donald Trump thinks that what's standing between him and, you know, money printer go burr is the fact that the other members of the fed just don't deserve to be there and they should be fired. And then who is Warsh going, if that is what he's doing, you know, who is Warsh going to scapegoat at that point? So I don't know. I don't know. I do not envy any of

46:42these people, their jobs. Well, good news is they can paint for those jobs. It isn't the fact that Kevin Warsh has been put upon by the universe and that this landed in his lap. So he has been, he has been cultivating his life. Yes, for a decade at this point, he was in the running for Fed share in Trump 1.0 and gave some interviews where he said that he did not say the things that Trump wanted to hear and he stuck by his principles and that's why he didn't get the job essentially. There's a book by Simon Bowman. I don't know if it's out yet where he interviews lots of people who met with presidents and vice presidents. And so there's an interview with Kevin Warsh from a couple of years ago where he says something to the effect of I stuck by my principles didn't tell the president that I was going to cut interest rates and I didn't get the job. And now you can infer what has changed between them. And now, all right, let's talk about a couple of other things before we go. One is one of my favorite subjects, which is about the

47:47government keeping data from you. The New York Times had this great story about how every year the IRS releases a report saying how big the tax gap is. That's how many taxes were owed that weren't paid. It's an estimate, right? We don't, but sort of by definition, if people didn't pay their taxes, you don't necessarily know that or you don't know how much they short-changed Uncle Sam. Every year they put this report out and this year they're not. They don't want people to know how big the tax gap is, how much people might be cheating on their taxes or making mistakes on their taxes to be fair. They don't want the public to know. And they have some technocratic reasons or excuses for why they're not doing that. They want to change the methodology or whatnot. But I find this extremely suspicious. And by the way, this report would be, I believe, for 2024 data. So not even how much tax compliance is gone down under Trump. But it does mean that it's much harder to have

48:49baseline for how much tax compliance has likely gone down. How much more cheating has done up or other kinds of fraud have gone up under Trump. And you know, this is one of these things that I get it. Like there are all of these gothic horrors happening under the Trump administration. People being kidnapped off the streets who cares if some little IRS report doesn't go out. But this is, again, emblematic of like a much deeper rot that is happening within the government to make it harder for the public to hold the government accountable and to make sure that our government is enforcing the laws against the public and against the people who are supposed to be serving the public. So anyway, this is again, one of my one of my hobby horses is about how these kinds of numbers are just disappearing and nobody knows. It's bad. That's bad. Okay. That's that's your contribution. It's bad. It's bad. It's it is not unlike people getting disappeared off the street, right? Which is

49:50which is largely about government acting with impunity and avoiding future accountability. Mm-hmm. And that's what this is too, right? It is what what was the, I mean, you know, I've already forgotten the they stopped collecting data based on some reform law and then they went and deleted the database. So the data wouldn't even do you remember this? It's like six weeks. I mean, there are like hundreds of examples like this. Oh, you're talking about the FinCEN data. Yeah, the FinCEN. Right. Yeah, this is the data showing who owns these these shell companies. I think, right. Yeah, this is just attempting to make sure there can't be any accountability in the future. Yeah, and I wonder who might stand to benefit from our being less good at. Impossible to say. Less good at assessing who's cheating on their taxes. I mean, I imagine Donald Trump doesn't even care about that anymore anyway, because he has immunity from the IRS and perpetuity according to whatever that settlement agreement was with Todd Lanch.

50:51All right. The other thing that came up as I was looking into what happened with the IRS here is like to what extent is this about? They don't want to know the answer to what extent is this about? They just don't have the resources to calculate numbers like this anymore because they've lost tons and tons of personnel, civil servants. And there was also some great reporting that came out this week on that that federal employees were paid $9.5 billion not to work in 2025 under Doge. And so from this, I'll read a couple things from this story. The Department of Government Efficiency's program to shrink the federal workforce through deferred resignations increased the use of a paid of paid administrative leave by 435% during the first year of President Trump's second term. One bill. Yeah, so exactly. This is from a GAO report actually that came out. And the administration has claimed that its efforts led to $200 billion in savings, but no one seems

51:56able to verify where that number came from or how it was calculated. But again, this is a government efficiency at work here paying people not to show up to work, people who would like to work and contribute their skills to the government, to science, to national security, to all of the other things that our government is there to work on. And instead, we get this bill. I do wonder, I meant to actually calculate this before we jumped on the live show, which is like what else could have been paid for with that $9.5 billion. I mean, how many ballrooms? How many? Maybe we could have put triumphs for 18 American cities. That's the right unit of measurement. I agree. How many are you? I was I mean, there is one tiny silver lining to this, which is that it is further evidence that you can just do things with power.

52:58If you can power, you can just do things. You don't have to say, oh, well, that's not right. Well, you can simply start drafting articles of impeachment against a series of cabinet secretaries. And if you are the president, simply bring in a couple excavators to the demolition excavators, to the ballroom and just start tearing it down. You can just do these things. Yeah. Yeah. Well, I am. Democrat sometimes a girl will stop you with the Kennedy Center. Will them? So Sarah and I just talked about this. I am pro-carrying down the Kennedy Center. Why? Just accelerationism. Like I want them to do it. Like I had to do it. Uh-oh. I want you to see like bare animus toward the Kennedy Center. It's that you want the Kennedy Center. You want to see the world burn. I want to see the world to see the world burn. Yes. How about you? Are you? Now you're an institutionist, right? Yeah. You want to minimize the

54:02damage and people. I want to have accountability, but I don't want to have needless destruction if at all possible, but different strokes for different folks. All right. I think that is it for us today. But before you all go, I do want to mention one specific thing. A note for our audio listeners today is the official launch of our new separate feed for receipts. It will no longer be appearing in the bullwork takes feed. So that means starting today, we're shifting that this and future episodes from the bullwork takes feed into its very own feed. Go follow receipts. It's receipts with me, Catherine Rampell, wherever you get your podcasts, whether that's on, you know, Spotify or Apple podcasts or whatever. Look up receipts with Catherine Rampell. You will still be able to catch us here every Friday, 12, 30 PM Eastern, JBL and me talking about the lovely and cheerful economic news of the week. We will also be adding additional episodes

55:06earlier in the week. Interviews with newsmakers, with politicians, with experts, with other guests. And of course, our other friends in the bullwork universe and JBL maybe joining me other times in the week as well. If I can strong arm him, but probably it'll be more often other folks from Bullworkland as well as as I can mark carny. Mark carny. That's the dream. Yeah. If you are listening. The dream. Yeah. Mark carny. Yes. Yes. Mark carny. Please join this show. I really want to talk with you about, you know, federations, functions and neoliberalism and all of you know, if you had Mark carny and you didn't touch any politics stuff, you did pure nerdery. That would be amazing. But be a good person to ask about these things like the fed is re-evaluating. Yeah. Come to an interview and we won't talk about any of this stuff. Like all we'll do is like the most deep dive technocratic nerd stuff. Well, there are very important questions

56:07that he could help answer. Like how should the fed be changing its communication strategy, which is something Kevin Worsh is interested in. The Bank of England went through that. I believe all carny was governor. So yes. PM carny, if you are listening, please come join the show. We will chat about all sorts of economic nerdery and maybe some of the other stuff too. But in the meantime, thanks to everyone for watching and listening. You can find us right here on YouTube again next week live at 12.30 pm. But first, opt into the receipts feed wherever you get your podcasts to check out other episodes from us and the bulwark. Yes, is Angus Maximus. This burger has one down of a pound of hot sushi cooked to order Angus feed. It's more fish than a quarter pounder. The burger is closed. And for only 599 even regular juice can afford it. My dad got it. You can get that big of burger. Yes. The whole Angus Maximus only 599 is cold senior.

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58:13not valid for use within a combo or in combination with any other offer or discount.