Your thoughts, sir?

Yeah.

Thanks for having me, Steve.

I, you know, I made my, my jumping off point the data center kerfuffle.

Obviously, people are very angry at data centers, but I think the, the question is why? What's going on here? And, and the most fascinating thing I found in my research is, is I went back and compared just the bottom falling out of support for data centers.

I mean, a few years ago it was a good thing, right? Like, politicians showed up for a ribbon cutting for a data center.

We've seen the public turn against data centers three times faster than they turned against nuclear power in the year after Three Mile Island.

Your thoughts and observations about Mike's, uh, comments in, in your article.

Your thoughts, sir?

Yeah, thanks for having me, Steve.

I made my jumping off point the data center kerfuffle.

Obviously, people are very angry at data centers, but I think the question is why, what's going on here? And the most fascinating thing I found in my research is I went back and compared just the bottom falling out of support for data centers.

I mean, a few years ago, it was a good thing, right? Like politicians showed up for a ribbon cutting for a data center.

We've seen the public turn against data centers three times faster than they turned against nuclear power in the year after Three Mile Island.

I mean, there is something much bigger than a nuclear meltdown basically going on here.

Respond to your thoughts and observations about Mike's comments in your article.

Is there an issue of trust here? And I guess I wonder if because of some of what President Trump has said, renaming lakes and some of the rhetoric, does trust erode in some of these conversations to a point where potentially, like, could we see the opposite effect? I mean, could this actually push Canada closer to China instead of working with the United States, you know, as allies to oppose China?

I certainly take the point that I think a lot of the rhetoric and so forth, going back to the start of the administration, has obviously been needlessly antagonistic to Canada.

That being said, I don't agree with Mo's characterization of kind of the whole world deciding or our allies deciding that we are not a trustworthy trade partner or are difficult to deal with and looking elsewhere.

Because the reality is that everybody else did come to a deal with the U.S., In the opening weeks after what Trump called Liberation Day, when he was causing all of the initial disruption, after saying, oh, look at this, everyone's going to retaliate, this is going to destroy trust, et cetera, et cetera.

The reality is that's not what happened.

The opposite happened.

Almost none of our allies retaliated at all.

Oren, as you've watched tariff disputes like this play out in the past, I mean, is there something we could tell Americans like if and when you start feeling X, this was a good policy for the United States, this tariff war with Canada?

At what point did did this start to just dissipate and this kind of easily caricatured libertarianism start to rise up in its place?

Well, I think you got the exact issue here at the heart of it, which is there's this logical fallacy that, you know, I always think of as the all chickens have feathers, but not everything that has feathers is a chicken.

Right.

Where it's certainly true that, you know, in Catholic social teaching, in these various other religious traditions, there is.

is a strong and I would say entirely justified and beneficial emphasis on the common good.

It does not therefore follow that if you are interested in the common good, you have to be a Catholic or from a particular religious denomination.

The various religions that – Probably most.

Is that sentiment justified?

What do you think was the main factor that drove them to embrace this ideology? And when do you think that really started to occur?

Well, I think the best way to understand it is, and the best term to use here is we're actually talking about embracing conservatism, right? Someone like Milton Friedman, someone like Friedrich Hayek would never have said that they were conservatives.

In fact, one of Hayek's most famous essays is literally called Why I Am Not a Conservative.

And what you saw in the Reagan era was Reagan really embraced and brought into the coalition a lot of libertarians, a lot of folks that didn't care at all about conservative principles or concerns.

And Frankly, for purposes of winning the Cold War and for defeating communism, we allowed that sort of absolutist free market ideology to steer our economic policy.

And I think what you're seeing now is a lot of voters, the typical Republican voter, frankly, the typical American, say, you know, wait a minute.

A lot of these ideas from a Friedman or a Hayek, a lot of the blind faith in free markets, we certainly don't share that.

How do you respond to those critics?

Uh, do we have workers for that if we're also engaged in mass deportations?

Well, so I think we certainly are bringing manufacturing back.

Um, Wall Street Journal's Greg Ip has been calling it a stealth manufacturing boom.

Uh, 'cause the reality is, step one is you actually have to build new factories, right? You're not gonna see the actual hiring, uh, for some time.

But, you know, to your point, we certainly have plenty of people outside the labor force.

We have plenty of people in much lower productivity, uh, jobs that might be well-served by jobs in the manufacturing sector.

Uh, we also have a lot of technological change happening that people think is going to vastly increase productivity.

Teamsters sponsored the gala last night.

[laughs]

Uh, and what's so fascinating about that is it, it is an explicit concession that, as you just said, immigration affects labor markets.

Um, one, one would think that that is an extremely obvious and non-controversial statement to make.

Um, but in, in recent decades, there has been this strong push, wh- which I would argue is almost entirely pretextual, from people who for, for other reasons want to support higher levels of, of legal immigration and just open borders and a failure to enforce the law generally.

There's this push to say, "No, no, immigration doesn't affect the labor market.

Um, in fact, it, it doesn't do anything to the wages of especially lower-wage workers already here." And yet, at this moment now, when we see a very tight labor market, we see concern, are rising wages driving inflation? People have just run to this argument that, well, if we, if, if we increase immigration, that will solve this.

It will loosen the labor market.

Mm-hmm

Can you describe that poll a little bit?

Yeah.

This was one of the questions we asked in, in this poll I was just describing, is just, okay, do, do you think we should sell AI, advanced AI chips to China or not? Uh, you get across the board a, a, a pretty large no answer.

The interesting thing is we actually then dug in a little bit and said, "Okay, well, you know, there's this kind of middle course that some people are trying to pursue where we're not gonna sell them the leading edge stuff, but let's try to sell them some pretty good stuff and kind of get them hooked on our technology anyway." Uh, and even that was very unpopular.

You actually had absolute majorities across political parties saying, "No.

Why, why would we sell AI chips to China?" And you're exactly right, that's a, a place where it's very clear that the Trump administration has gone a very different direction.

And, and I think it speaks to the extent to which, uh, my sense is President Trump really views this as a, as a transactional commercial dispute, right? He, he has always said the problem is China is ripping his- us off, and I think his answer has always been we need to get a better deal.

Right.

Walk me through it, sir.

Well, you know, I think what we're seeing right now is, is the administration trying to figure out, uh, okay, what does the endgame with China look like? You know, I think President Trump, going all the way back to 2015, 2016, did, did an incredibly important service for this country in, in waking people up and saying, "China is not our friend.

This deal with China does not work.

We need to change things." And, you know, in the first term, they, they did a lot of work shaking things up, showing that we weren't going to accept this anymore.

Uh, now we're, now we're in this second term.

We've sort of had Liberation Day a year ago.

Uh, we are in the process of transforming the global economy and, and international trade.

What is missing of the understanding that these guys are maniacally focused on eventually de- it, it's a one-way street for them, but decoupling from us as quickly as they can, sir?

Are there ways of encouraging these strategic sectors, if that is the goal, that would have fewer downsides than this very broad brush approach to tariffs?

I agree entirely with Anna about sort of looking at it in this, you know, sector by sector way, and I would highlight two other things related to that.

One is it speaks to the way that tariffs are one piece of a broader strategy.

And for instance, on critical minerals and mining, you're seeing significant investments that are being pushed by an active industrial policy out of Washington by very aggressive multilateral agreements that they're in the process of establishing.

And so it's not tariffs alone.

Obviously, in the semiconductor space, yes, the Trump administration exempted a lot of incoming chips, but that's in the context of the CHIPS Act and the very aggressive effort that is leading to a massive investment boom and expansion, uh, of productive capacity in advanced semiconductors.

And so if you look at what the administration has said it wants to do now, they are proposing to explicitly establish a policy that says you, you get those exemptions from the tariffs as long as you are actively investing in bringing capacity online in the US.

But do you worry about getting in the way of this?

What does that mean for an ally like Canada?

Well, I think what you're seeing here, I think that's very well put and actually highlights a really interesting division even within the new right.

The fun thing about any country's politics is you can slice it as thin as you want and then still find that everybody's fighting about everything.

One of the really interesting debates that's taking place within the new right in the US is it takes the form of a debate over the terms empire and republic.

And the question is, is the United States an empire or a republic? Does the United States want to be an empire or a republic? I would say, in general, the ethos of the due right has been to see the US as an empire as one of the key flaws of its strategy in recent decades.

It's actually not that great to be an empire.

Historically, that's not necessarily the best long-term strategy.

I want to expand the conversation to some of the other elements of your political economy approach how would they change american policy beyond trade i'm thinking for instance uh labor relations the environment some of the questions around financialization and wall street i i don't expect you to lay out a 15 point or 20 point plan but in broad brush strokes how how would you situate your political economy agenda in the minds of our audience members

Why did the Supreme Court rule the way they did on these specific tariffs? And people need to understand this isn't all tariffs, but one specific subset of the tariff basket.

Yeah, that's exactly right.

There, there are a lot of very well-established tariff authorities.

You heard the president just mentioning some of them.

Uh, Section 301, Section 232, these are all processes you can go through.

You show that some other country is behaving unfairly, some particular product that's important to the US is under threat, and then you can impose tariffs.

And, and the president has done that going all the way back to his first term as well.

Because although, although you didn't see these worldwide tariffs under Biden, I will admit actually, with one exception, because Biden even kept many of the China tariffs from Trump's first term in place, and that's kind of a little, a little mentioned fact because they were in fact working and because China was in fact guilty of the things that the, that the American investigators had found.

[chuckles]

Um, you know, there, there are sort of technical academic definitions of it, but I, I think generally what it means, and, and what I have in mind when I use it, is it is a, a shift in the orientation of the economy toward financial transactions as, as ends unto themselves.

Um, 'cause I, I think it's important to say, like, I think financial markets are incredibly important.

I'm, I am here because I, I think capitalism is a very good economic system.

I think we need financial markets.

I think we need people who bring capital together and deploy it, and they are entitled to a good return on investment when they do.

Um, what we have seen in the US in recent decades, though, is something very different, which is that financial markets and the financial sector have exploded as a share of GDP.

Okay.

Give, give some examples of what, of what financialization, specifically, what, what that might be.

Sure.

So you see it in a lot of the kind of Wall Street firms.

If you think about hedge funds, private equity funds, right? A lot of the time, what they're doing is they're, they're collecting a whole lot of money, and w- you know, interesting question where that money comes from, and then they're going out and looking for things that they think they can buy at one price and sell at a higher price.

So if, if you're a hedge fund, right, uh, in the case of what's called a high-frequency trading hedge fund, you don't even care what you're buying and selling.

You're literally building bigger fiber optic cables to try to race your trades to the floor faster, so that you can get out in front of whoever else is bidding on them.

You make a teeny, teeny little bit on millions of transactions, and ta-da, you've generated a profit.

Yeah.

Are you saying we don't actually have a capitalist system, that this is more corporatist than we even scream about here in W- in War Room? Or is it, is it at the bases, we do have capitalism with just a lot of grift on top, or is the whole system rotten to its core?

I th- I think it's more that we have capitalism with a lot of grift on top.

You know, one, one thing I try to emphasize in the piece, and, and one of the...

You know, they, they find the title that, that will get the most people to, to click on it.

The, the working title was Saving Capitalism from the Capitalists.

Because I, I think the, the basic system of capitalism is still a, a good way, the, the best way [chuckles] anyone knows to structure an economy, and for that matter, you know, healthy financial markets are a really important thing.

We need to have markets that allow savers to consolidate their savings and, and to deploy that capital to productive uses.

Why is the alternative quite different than late-stage cap- finance capitalism that we find ourselves in this kind of cul-de-sac?

Oren, the floor is yours.

Well, thank you for having me on.

It's, it, it is a sad day for America first, bluntly.

Um, I, I think you've, as, as you've laid out, there are these fights that have been going on behind the scenes, uh, over all of these different definitions and, and fights on AI.

And what's fascinating about them is, is these people will not have the debates in public.

Um, you will not find anybody actually go out there, face a tough interview, and try to explain why we should be telling, you know, states, "No, nobody else can do any regulation." Uh, they, they will certainly not go out and explain, "Why should we sell chips to China?" Uh, and yet they, they continue to push these directly contradictory policies.

"AI is the most important thing, we have to win on it." Also, "We should give advanced chips to China." I, I have to highlight, uh, 'cause this is so funny or maybe pathetic, you, you decide, uh, literally yesterday as the Trump administration was saying, "We're going to start selling these advanced chips called the H200s to China," the Trump administration Department of Justice was proudly announcing they had cracked down on somebody for smuggling those exact same chips to China.

It's, it just, it doesn't make any sense, does it? Is there any logic here that you and I are missing, or the other people I've talked to, the hundreds of other people in the last 24 hours on this?

Walk, walk us through it and why there's now all this pressure not to pass this, to make sure that we limit and restrict the Chinese Communist Party from what they can get, sir.

Yeah, it's great to see you, Steve.

I think, (laughs) you know, that there are days when the good guys in the Trump administration are doing great stuff, and there, there are days when the bad guys in, in the Trump administration are doing really bad stuff.

And unfortunately, this is a pretty bad day.

Um, you know, you mentioned some of the AI regulation stuff we can get into.

On, on GAIN AI, there's, there's a very simple issue here which is, you know, we keep hearing, look, it's, uh, you know, Jensen himself goes in every earnings call.

He says, "We are all sold out of chips." And yet he wants to sell more chips to China.

What is your thoughts about this AI amnesty, sir?

So Oren, is it your position that everyone was wrong 25 years ago? Like, should those barriers never have been lowered in the first place or was it just done badly and mismanaged over time?

Well, I think certainly everyone was wrong and I think it's really important to focus in on, on something Jason was getting at, which is, you know, what exactly changed in 2000.

You know, it's- it's very funny to me that of course at the time, this was celebrated as, you know, th- the single most important economic move and, and policy that, that the country could be pursuing.

Now that it's gone so badly, we have this revisionist history that, well, in fact, it wasn't actually changing things that much, it wasn't such a big deal, China already had this access to our market.

Um, the reason that corporations in particular were so obsessed with getting this done is that it did fundamentally change everything.

When you have an annual renewal process for normal trade relations, first of all, corporations have no confidence and they have said they did not have confidence and part of the reason for doing this was to give them confidence that it would be permanent, which led to much, much higher levels of investment in offshoring, investment in China.

And secondly, it- it lost our leverage over China.

So what's going on here?

(laughs)

We only have boring new glass office buildings, I suppose.

Um, you know, I think what's, what's going on, and, and you're seeing this both from the tech perspective and the sort of, you know, US trade and, and negotiating perspective, is everybody is just focused on these giant numbers of billions of dollars.

And it's really important to connect that back to what does that actually represent in terms of actual economic activity? Um, if, if you are just talking about building lots of data centers, uh, I guess depending on how you feel about AI, you can think those are very necessary.

They, they are not the most economically beneficial, uh, form of investment in a lot of ways, certainly for communities, workers, and so forth.

Um, and I think to your point, uh, you know, you have these big tech companies driving so much of the capital investment, um, that it, it also raises these, uh, almost more political concerns about their role.

So I, I think in general, the, the closer relationship that you are seeing between the US and the UK, you know, UK was first one to come to an initial trade deal, I think there's a, a focus on, on fostering more productive investment.

Mm-hmm.

Why are guys that are pretty calm like you and Jim Banks lighting your hair on fire about this, sir?

Well, thanks for having me on, Steve.

And, and I w- wanna give credit to, to Senator Banks.

He's been fantastic on this issue.

Like, like you heard in that clip, w- there just aren't enough chips out there right now.

I mean, this has been the story for a few years.

U.S. companies that are trying to be leaders in AI for our economy, for our military are desperate to get as many of these chips as they can.

Oren Cass, your thoughts?

Um, Oren, uh, uh, you heard my opening presentation with which I'm sure you disagree, but I want to give you a chance to, to open, therefore, and, and tell us, is the rollout of tariffs as they are, assuming this is roughly where they stay, the kind of trade policy you have wanted for a long time?

Well, I guess, uh, you know, where I would start and, and maybe where we disagree is, is with an understanding of the world as it is, because I, I think the reality is that the global economic system has been badly broken for a long time.

Um, if we look at, you know, who are the leading producers of all sorts of things, they are already all national champions that are overwhelmingly supported by, by state subsidies and protected markets.

Right? Taiwan Semiconductor is the leading semiconductor company.

Airbus is the leading aerospace company.

Huawei is the leading telecommunications company.

The new Chinese EV companies and battery companies and solar companies are all global leaders.

Wouldn't the, the right strategy to deal with th- the country that I would agree with you is the largest country that doesn't play by free trade rules, that is China, to get your allies, uh, Europe and Japan, as part of a free trade ecosystem, keep low tariffs on them and high tariffs on China?

So how then do you interpret this jobs report that came in weaker than expected, 73,000 jobs added last month? The May and June figures were revised down by a combined 258,000.

Well, like, like you just said, there were a lot of revisions, and I think, uh, you know, I don't know exactly why the revisions happened.

If, if I had to guess, in part, when you have the kind of turbulence in the labor market that we have with the ongoing immigration enforcement, uh, you're likely to see more adjustments, but I don't, I don't know the, the specific facts around that.

Um, and so again, I, I think it's important to step back and look at where we, where we are with the economy broadly.

I mean, think about what economists were saying about tariffs, what they were saying after Liberation Day, the idea that we were headed into a recession, the idea that this was going to be a disaster, uh, and now look at where we are.

The, the unemployment rate is the same place where it was.

Like I said, jobless claims are low.

What are the trade-offs now, especially looking at the high reciprocal rates for some of these countries?

Oh, sure.

... specializes in foreign affairs law.

I think he made the really important point that if, if you were to assess this as just sort of an economic policy question, it's, it's a, it's at the very outer reaches of what you might expect a president to be able to do, what you might expect Congress to be able to delegate to, to the president.

If you, if you see it to a significant extent as, as a foreign affairs power and, and you see the way that Trump is using it in negotiations with foreign countries, I think it's, it's pretty fair to say, uh, look, you, you could not do this through legislation.

If you want to be able to use tariffs to negotiate, then the president does have to use this, this power just as he might use, you know, sanctions or, or military power or, or anything else.

Um, so I, I would suspect the court is likely to at least try to find a middle ground or, or uphold, uh, a, a lot of what the administration has done.

That being said, if you want tariffs to work, if you want them to have their economic effect, uh, at the end of the day, you need them to be permanent.

Do you think that will be persuasive to the court, that, that freedom of the seas is a commander-in-chief issue?

It deals with artificial intelligence, the future of really the, the drivers of the world economy." W- w- w- walk us through both the article and this letter, and what your concerns are, and the concerns of people you've brought into this, uh, debate, sir.

Yeah, thanks for having me on to talk about this.

I think it's a, it's a super important issue.

Uh, I wanna credit Americans for Responsible Innovation, who's d- did a lot of the work on this, bringing the letter together.

We were very proud to, to partner with them from American Compass.

And, and they got a lot of leading national security guys and, and gals, folks, folks from the first Trump Administration in a lot of cases, to call attention to this, this really important problem we're having, uh, with China in particular.

I, I think you just described things well.

What do you hope... what is it... what's the heart of what the letter says to President Trump, and what do you hope to accomplish?

(laughs)

Would you, you know...

Do you think...

What do you think is gonna happen or do you worry about the instability of not easing this transition, but is this a...

And look, I- I've read the whole like Mar-a-Lago Accord and I don't know if that's a conspiracy, but is the idea that there's some master plan if we create this chaos, we cause all this thing, to draw people to Mar-a-Lago where they renegotiate our nation's debt.

Is that something that you think is plausible? Or is that, is that what, what this is all about? Is that why they're not doing it in a way that seems more thoughtful? So, let me say two things about it.

Yeah.

So-