222. The Man Who Just Stood Between Trump and Economic Chaos

The Federal Reserve has finally stood up to Trump for the first time in three years it raised interest rates, despite the president's protests. Not bad for Fed Chair Kevin Walsh once written off as nothing more than Trump's sock puppet. But will it work? Can the Fed rein in a cost of living crisis and calm those bond markets? And while the Republicans are crashing the economy, where are the Democrats, Cady? They need a plan, and I have a few ideas. Meanwhile, in the Middle East, the U.S. has refused to back Saudi Arabia's war in Yemen while secretly meeting Houthi leaders. You heard that right. Washington sidelined a key ally in favor of a U.S.-designated terrorist group. Go figure. Why? Stay tuned to find out. This episode is brought to you by E. Toro. A tariff of spending plan, a regulatory change, it can all start just as the first line of a speech. But it sets in motion things that can reach far beyond Washington an unfold for years to come. That's right, Cady. Markets move on expectations, not just events, investors are constantly weighing what a decision could mean for companies, sectors, and the wider economy. So E. Toro is an investing platform where you can access a wide range of markets and explore how political and economic developments can affect them. You can also learn from the global community of investors and see how people around the world are interpreting the same news. As with all investing, your capital is at risk, see E. Toro.com/trippus for full terms. Imagine setting your makeup, then forgetting it's even theirs. Meet new grippies setting missed from Mabelie, New York. Sell-to-miss technology locks in your look for up to 24 hours, with flexible all-day comfy grip. No tightness, no stickiness, no residue. Just plump, dewy, hydrated skin that still feels like your skin. Try new grippies setting missed from Mabelie, New York. Maybe it's Mabelie. Welcome to the rest is politics US, I'm Cady Kay. I'm Anthony Scaramucci, how are you there in Hong Kong? I'm a little discombobulated and I have to confess. I have no idea what time of day it is. I almost don't know what day it is. This jet lag is crazy. But it's interesting, it's always great to travel, it's always great to hear people. I'm hearing a lot of concerns about the state of the US and actually I'm hearing a lot of concerns behind the scenes, although the markets are going crazy on Wall Street. I'm actually hearing, surprisingly, quite a lot of concern from investors about the state of the US generally and the state of the US economy, so it's great to get out. I just, God, I wish I knew what day it was. Well, I'll tell you what day it is for me, Cady. It's launch day. Look at that. Look at that. I've got book day, Cady. I'm here in London peddling books, like a traveling salesperson. Okay. Anthony, I want to know why you're not out on the street corner, why are you recording this now? Get out there. You'll publish it out on the street corner with a pile of books, I want you. Well, the answer is my boss, Cady Kay called me in for this podcast, but I was out there with a plastic flower in my lapel shooting water at people from my lapel, as I was sitting there saying, please go to the local bookstore and buy the book, but I appreciate your support on the book and also call hangers, but I want to go to the Fed for a second because Trump tried to defend Worsh last night. I don't know if you saw that because you're in Hong Kong. He told one of the CNN journalists that, you know, Kevin called me. He wants a lower rates, but he's got a unanimous decision by the board and the board is really bad for America and they're really bad people, but Kevin's a good guy. Because in Trump's mind, I know how he thinks he's got egg on his face in his mind. He wants the rates to be lower, but the United States, Cady, could never do what Trump is asking if they want to maintain their status as the reserve currency. Trump is saying that rates should be 1% or less because we are the best credit in the world by far. That's literally a quote from him, but I just want to point out to everybody listening, you can't have core 3.3% inflation and have 1% rates on your overnight yields. That is not sustainable for a country and that would break down the fabric of trust in our financial system, which is still the deepest, most liquid market in the world. Yeah, I mean, that's basically what Kevin Worsh said, right? He gave a very brief press conference. He said inflation is too high. I am going to have to do something about it. He hinted at the fact that there could be another rate raise coming later this year as well, which is what investors here in Hong Kong, certainly expect there to be. I thought it was interesting. Two things. One, he didn't give Kevin Worsh a nickname, which always is a strange thing when Trump doesn't call you out with a nickname, remember to late Powell. Anyway, for the moment, Worsh seems to be on good ground, and I think it's because Worsh has played the politics of this much better than Jay Powell did. Worsh Lobby, you and I know this, he fought hard for this job. He has wanted this job for a very long time. He lobbied Trump very well. He had a little bit kind of mark, he asked, he's been very good at getting inside Trump's head. He signaled to Trump that this was coming. He gave Trump a bogeyman that he could fight against, which was the Board of Governors. So there was another enemy that Trump could call out here. He didn't have to call out Kevin Worsh, who, after all, Trump had said it straight out of central casting. And I think for the moment, Worsh is safe. The question I have is, how many more raises before Trump turns on Worsh more ferociously? And does this do enough, Anthony, to reassure people who are looking at this weird, and I want you to explain this to me, because it's what I'm hearing here in Hong Kong, is the US economy is so confusing at the moment. On the one hand, you have the equity markets going bananas, largely on the back of AI investment. And at the same time, despite this raise, real concerns about the longer term stated US economy, namely, the tariff policy, the deficit, which keeps ballooning the lack of competence. People are talking about quite openly now, lack of competence around economic policy with best and trying to buy up bonds in order to calm the bond markets. So does this do enough? I guess it does enough, doesn't it, to reassure people that the Fed has some independence. And maybe that's the most you can expect. It does send a signal to the bond market that he's on top of it, and what you don't want to have happened the 10 year, which percent was really, did not want to go through 5% is now over 5% and now we're looking at expectation management. We don't want to think at the 5.5%. Just to remind people why that would be so important, interest rates are the physical gravity of financial assets, so the higher the rates are, usually the assets go down. But in addition to that, when borrowing costs get high, you're constraining the growth of American businesses, you're constraining cap expending. That would be the AI cap sex cycle boom that's helping the market, but also other elements of cap expending. But what we're leaving out of the analysis, Caddy, which is we have to explain to people, is what the president did. The war in combination with the tariffs has sent the affordability crisis to the moon. You mean that crisis that's a hoax, that one? The affordability hoax? The hoax and that gas prices are going to be down right after the midterms and all that other stuff. But just think about, the cent is talking to the Congress, our secretary of treasury, and he's blaming the crisis on Joe Biden. And they're looking at him like, well, how many more years are you going to do that for? You're two years now out of the Trump presidency. But I want to explain this quickly to people, CPI hit 4.2% in May. That is a direct result of energy prices going up, Caddy. The worst cost in terms of the treasury just writing checks is about 39 to 40 billion dollars. That's the estimate. But you have another 150 or so billion dollars of energy prices that now need to be absorbed by the Americans. And that says include what's going on here in the United Kingdom or around the world. But just hear me out for a second. $2,400 a year in additional spending on energy for the average American. So utility builder, gas bill, et cetera. And this is the stuff that I am shocked by, Caddy. And if you please push back and tell me differently, why are we not hearing from the Democrats? Why hasn't a Democrat got to a microphone with a wall board and said, okay, this is what the president's doing. He campaigned on affordability. The number one issue in the United States is affordability. And he just took the affordability crisis and exponentially made it worse. And here's how he did it. Why are the Democrats so flat-footed on this issue, Caddy? I actually don't know that that's a fair reading of Democratic candidates around the country. I mean, if you look at candidates like El Sayed, you look at candidates like Talleriko, you look at Roy Cooper, I don't hear a Democratic campaign ad at the moment that doesn't have the word affordability in flashing big red letters. I mean, that's why Trump is calling this a hoax because they're saying that Democrats invented the word. I actually think Democrats have got on board. They've kind of abandoned, you know, what AOC calls woke one around identity issues, which was certainly the issue in the 2024 campaign. And this time, it's around class issues, which is another way of talking about affordability. And they're basically saying, whenever they can, the fat cats are getting richer, but you You are paying. here are a couple of the numbers. You're paying $4.30 for your gas, which might sound, you know, like nothing per gallon to Europeans, but it's a lot for Americans. Your mortgage rates are now at about 7%. So the cost of your housing has got a lot more expensive. The cost of your car payment has got a lot more expensive. The cost of your groceries, the cost of your beef is up, whatever the White House wants to say, it's why Taloriko is ahead in Texas at the moment. It's why Rokuper is ahead in North Carolina. It's why El Sayed is a little bit ahead in Michigan. It's why you've got these Democrats ahead. It's purely this issue of affordability. And I think it's the thing they are campaigning on the most. I'm hearing it in all of their campaign ads. You're not hearing them talk about it. I don't know. I do hear it tepidly. If I look at the polling, okay, the Democratic Party favorability is still underwater by 12 points. Right, but they are ahead of the Republicans when it comes to the economy, which is shocking, right? They have an approval rating of like the local cable or the IRS. I mean, they're not doing well in a situation like this. There's something wrong with their communication in my mind. So let me ask a follow up question on this thing. So what policies are the Democrats putting forth? Yes. I'll accept what you're saying that there are Democrats that have less of a profile than Donald Trump that are talking about the crisis. But what policies are they putting forth? I think that's a really good question. Because I hear them talking about affordability and that they will bring prices down. But I suspect the reason that you're pointing to Democrats' lower approval ratings is that no one, apart from saying, okay, we are going to get out of the war in Iran and that will bring down gas prices. If you're on the Bernie Sanders wing of the political spectrum, you're talking about wealth taxes. If you're on the Mamdani wing of the political spectrum, you're talking about a luxury penthouse tax and that kind of old-fashioned redistributive policies. But I don't hear people buying that. And I think that's why the approval ratings of both parties are particularly low because people are smart. They know that inflation is hard to come down from. If you actually, if you listen to Kevin Washington, I've spoken to Kevin Washington about this several times before, what you really need to do is have the kinds of reforms that would shrink the American deficit and that would lead to lower interest rates which would lead to lower prices. But good chances doing that because I'm not hearing a single candidate on the campaign trail at the moment talking about the kind of structural forms that the American economy actually needs. Are you? I mean, that, that is 2012 talk. That's the broader point. So there's so off-message. Hakim Jeffries actually has something. He's calling it fighting for an affordable America agenda. You know, he's talking about lowering the cost of groceries. He doesn't say how, lowering the cost of gas and housing. Again, doesn't say how. It's mostly about ethics in tying down Donald Trump and providing guardrails against Donald Trump's corruption and his family's corruption. There's nothing in there that talks about an economic plan that can incentivize lower prices or an economic plan that can create more housing, more supply of housing, etc. So, so I'm just making the point guys get it to get it together. You've got a negative approval rating because you're not doing a good job communicating what you're going to do to fix the problem that the country's most worried about. Okay, so let me make you. We're going to do some role play. We like a little bit of role play on the rest is politics US. How tall am I? Am I tall in this? Oh, I think you're Gavin Newsom. I think you you've got Gavin Newsom. I think you've got the head. I mean, you're kind of a Gavin Newsom mixed with a little bit of Rama manual because Rama comes up with policy papers for everything. So I'm sure actually he does have several plans for addressing this because he he likes his plans. Pretty so boring, Caddy. Oh my god. At least at least Newsom can pull a crowd him. You want policy papers. Rama manual has policy papers. I was listening to people to judge actually over the weekend. He was in the last few days. He's been sounding pretty smart about this too. You are now the Democratic communications advisor. In fact, no, let's make you the Democratic candidate for president. I'm going to channel Newsom's hair. Okay. I haven't been to I haven't been to the colorist recently. There's a little bit of gray in there. Okay. I'm ready, Caddy. Go ahead. You have to come out with a economic proposal to address the question of affordability, but here's your challenge. This is where you get your bonus points. You have to make that proposal sing in a 30 second TikTok video. Go. Guys, if you're making less than a hundred thousand dollars a year, I'm going to take your earned income tax credit up so that you have enough money to afford your groceries and pay your rent. I know. By the way, if I end up getting some type of consumption-based tax in- Basically, you get a tax deduction. That doesn't help the people not below 100,000, but- No, it will. It will because because they do get tax. They still you're you're taking 13,000 dollars away from somebody making 70,000 dollars. Give it back to them. Okay. And oh, by the way, if I get a consumption tax put through- Oh, people up to a hundred thousand. I thought you said people over a hundred thousand. No, no, people up to a hundred thousand. You're up to a hundred thousand. We're going to give you all the money back on the taxes. So you can go buy the groceries and you can pay your rent. And oh, by the way, if I can get a consumption tax put through, which will help me with the tax cheats and all the billionaires that are avoiding taxes, you're going to be absolved from that as well. And so I'm going to use tax policy and good incentive management to get you and your family back in the game. And Mr. Candidate, how are you going to persuade the Republicans who are in opposition in Congress and who you will presumably need to pass some kind of legislation on this because you can't do this with an executive order. You have to pass legislation. How are you going to get them to come on board and help you out with this because they're not going to want to help you with anything? Well, listen, young BBC journalist. Let me let me teach you Grasshopper. Okay. The Democrats are the deficit social spenders. The Republicans are known for the tax cuts. And so I'm going to get some of them. I promise you through good campaigning and good messaging and phone calls into the Congress that there's going to be a good group of those people because they've stood for tax cuts as Ronald Reagan was in office. I'm going to get some of those people. And this is going to help them by the way. You know what? This is a bipartisan move because they'll be able to go back to their districts and say I cut taxes for the people that needed it most by what what's that word? I haven't heard that word before. I haven't that you'll have to translate that for me by person. Yeah, it's not something that you're used to. I know that. I just think that the the Democrats stop running on price scourging and the release of the Epstein files work on supply of housing and work on putting more money into the pocketbook of the consumer that is really suffering. That is an issue, a concrete issue that Democrats should be running on housing. And I know that Newsom and I know that some of the Democratic candidates have spoken about that, but the housing crunch particularly for young Americans is a very real thing, deregulating the building industry to allow for more housing. I think would be a popular proposition for many voters. I would like to hear more from Democratic candidates on that, by the way. Oh, by the way, I'm going to negotiate an end to this stupid war. The Trump's not going to be able to do it. We're going to be in a quagmire until the end of his term. And so when I get done, I'm going to get back to Oman or wherever I have to go and negotiate an end to this war, because because you know, the Iranians are suffering too. So he Trump's playing chicken with them. He's hoping that the Iranian economy will blow to smithereens and the regime change will happen as a result of that economic revolution. But I think you'd be waiting a long time for that. While you're at it, why not end a trade war with our closest partner in the North, which is vastly unpopular, which is driving up your prices? I mean, a modicum of competence around economic policy, I think would probably be more popular. You told me that I only had 30 seconds. I was cropping the bomb. It's fast as I could. This is the challenge that candidates face at the moment. They have to have economic plans that will sell on TikTok that don't sound like old-fashioned political speak, that people buy as credible and implementable, given that we live in a hyperpartisan era. That's not an easy proposition for any candidate, whether you are the smartest candidate around or not. But I do think one thing that we haven't mentioned and that we were talking about doing as a segment for this week, but we spoke a lot about Russia last week, I do think it is worth Democrats pointing out the fact that Donald Trump's son had a wedding party. They can call it an after-party all they like. I've seen the pictures. There is a wedding cake and there is D and B, Don Jr. and Bettina, his wife, on the kind of DJ stand that was paid for by somebody who's been described to me as not just an oligarch, but an oligarch, oligarch, a real mate of Putin's. Do you remember when Barack Obama wearing a tan suit was a scandal? Here they are having their wedding paid for? We spoke about this last week, so we didn't particularly want to spend the whole episode on it. I always say that. Barack Obama had his daughter's wedding paid for by the Russians. They would be going crazy on the poor guy. I don't know why they give such license to Trump. I know we got to go to the break, but I want to say something about Worsh because it's very important here, Katie. He did the hardest thing that a Fed share can do four months in. He's got a lot of credibility now with the marketplace, and the market's going to reward him for this. Now remember, he's giving a really good. speech after the rate hike. He said, "I am hawkish on inflation, but not on the economy." And so I'm going to have a very fast trigger to lower rates if we can get out of this supply shock, this supply energy shock, i.e. Hey, Mr. Trump, President Trump, do you want to end that war so that I can get energy prices back to $60, $70? Do you want to do that? Because if you do that, I can lower rates going into the first day of the 2027. Which is exactly what Donald Trump wants. I'd recommend everyone to read Muhammad El Aryan's opinion piece in the New York Times, we'll put it in our newsletter this week. But it's a really good piece that lays out the different scenarios for the direction that the US economy is heading in. And if somebody tells you that they know which direction the economy is heading in, they don't, because there are multiple scenarios most of which revolve around uncertainty. Okay, we're going to take a break and come back. And talk about the who sees. Meet new grippy setting mist from Mavily New York. Gel to mist technology locks in your look for up to 24 hours, with flexible all day comfy grip. Just plump, dewy hydrated skin that still feels like your skin. Try new grippy setting mist from Mavily New York. Maybe it's Mavily. Welcome back to the rest is politics, US, where Antony, we have always maintained that the problem with starting wars is that you do not know where they are going to go geographically, politically, economically. And I think we have had proof of that in the last few days in the Middle East, where a war that was started against Iran, a war of choice, it should be said, by the White House against the Iranians, has now expanded effectively to another front with the Houthis in Yemen, attacking the Saudis and the Saudi oil infrastructure. And the Americans ending up saying to the Houthis, who have long been seen as a proxy for the Iranians, they're not the Iranians, but they have been seen as a proxy for the Iranians, they have Iranian backing in Yemen. And the Americans basically saying to them, at a meeting in the US embassy in Muscat, Oman, we are not going to retaliate against you. They could have put in brackets because we are overstretched in the state of Hormuz. And we've already taken on the Iranians. And that is enough, we have enough on our plate. And we are spending millions on interceptors as the Iranians strike our bases in places like Jordan in the last few days. And the message to America's longtime ally, and a very good friend of the president, and a very good friend of the president's children, Mohammed bin Salman, the Crown Prince of Saudi Arabia, when he went and he called Donald Trump and said, please will you retaliate against the Houthis with strikes? Reportedly, the message to Mohammed bin Salman was, no, we'll give you intelligence, but we are overstretched. And you will have to deal with this one by yourself. So we're in an extraordinary situation, I think, in the Middle East where this conflict has expanded beyond ways that Donald Trump probably imagined when he launched those strikes back in February. The US just by having this reported meeting with the Houthis at their embassy in Oman have elevated the Houthis to being an international player, rather than a kind of band of rabble rouses in Yemen. They've put them at the table, opposite them anytime the Americans sit down with a group, whether it's Kim Jong Un or the Houthis that elevates that group and gives them international standing. And the Houthis have not back down on their demands to the Saudis to have control of various cities and ports. So I see this as a win for the Houthis, but the biggest loser in all of this, apart from America's reputation with its allies, are all of those Gulf partners who are now looking at the United States and saying we don't know who you're going to defend and who you're not going to defend and when depending on your own situation. I think this is a very precarious moment for the Middle East, but also for America's reputation in that part of the world. Why do you think MBSs please fell on deaf ears with his friend in the White House? Well, because Trump does it to everybody. He gave the money to Jared Kushner, he gave money to Trump, he gave money to the foundation of Ivanka Trump and he thought he understood Trump and he thought he was going to get help from Trump and Trump rebuffed him. But I want to go back because I really want to lay this out for everybody because Americans listening somehow we never get this. So 9/11, Caddy, we're going to hit you, you're going to over-react, you'll spend $33 trillion in deficit spending and blow a hole in your empire. We did that. They understand us better than we understand them. October of the 7th, 2023, wait a minute. The Saudis are getting close to Netanyahu and the Israelis. They may actually have a diplomatic rapprochement with them and acknowledge Israel. Okay, Iran is going to send money to Hamas and let's decimate the Israelis. I'm not going to discuss whether or not Netanyahu knew about it or didn't or what happened there. Well, Israelis were also sending money to Hamas, by the way. They were. They were. They thought they were propping up a political regime that was going to create some more stability. So now, but the Iranians win that argument because they want to destabilize that part of the Middle East. They do not want the Israelis tied to the Saudis. So they aggressively attack Israel and then Netanyahu does exactly what Bush does. He wildly over-reacts. He creates this humanitarian crisis in Gaza. Let's keep going. Okay, so now he goes to the White House and he says, well, these guys are the ones that started the fight with us where your ally helped me decapitate these guys. And oh, by the way, if we just decapitate them, it's going to be no problem. You'll have your Delci Rodriguez and you'll be signing a peace deal somewhere in the Red Sea and you'll get your long-wanted Nobel Peace Prize. Okay, and so that goes completely haywire on them. And then this is the peace that Americans wake up. Let me just knock on this thing a little bit of Americans. Are you there? Wake up, please. Because the Houthis, now another state sponsor, terrorists of Iran, we're going to shut down the Red Sea and bomb the pipeline so that we can economically cripple the Saudis who are an ally of the United States. And lo and behold, Trump doesn't step in. Now I'm going to tell you what Trump's telling people because like you, I'm jet lagged and I was up all night last night talking to people in Washington. And Trump is telling people, don't worry about this. This is 17D chess. It's okay that this went down because we're going to pump oil from Venezuela. We're going to pump oil from the United States. And oh, by the way, even my most hated ally Canada, which is so surprising that we've been saying that they're going to be able to make money off of this too because we're going to shift the direction of supply globally to the Western hemisphere away from the Middle East. Ha, ha, ha. All these guys are going to lose the chess mass. We just have to wait till after the midterms. So that's what's going on in Trump's mind. And that's what's going on in the Houthis mind in the Iranians. But remember this last but not least, Caddy, there's a ceasefire in place between the Americans and the Houthis that existed in 2025, whereby calling them, they're not hitting American ships coming out of the Red Sea. Right. But they have said that they'll hit Saudi ships coming out of the Red Sea. And they said they would hit Israeli ships. Okay. So, so and does Trump care about them? Okay. Let's say rhetorically. No, he doesn't care about them. So he's the least trusted of the allies. If you're going to have an ally, the worst ally you could possibly have is Donald Trump because he doesn't give a shit about you. And he'll do exactly what he wants to do, whatever he wants to do with the service interests. But I'm going to tell you this is going to end in a nightmare, Caddy. This will end in a nightmare. This will be $7.50 diesel by the by the end. In other words, unless the Americans cut the deal with the Canadian interests, I predict they will, unless the Americans create a rapprochement with the Iranians, we're going to have huge energy shock, a bigger energy shock than the one that we have right now. And the Fed's not going to raise rates one more time, at least two or three more times over the next five or six months, unless somebody rational, somebody normal steps into the thing that actually understands the situation and creates the peace. I'm the problem with Trump's scenario on the Venezuela front at least is that it's going to take a considerable amount of time for that oil to get out of Venezuela and be refined. It's not going to happen in a time frame that is going to help out oil prices right now. The Saudis have just told the Europeans that they aren't going to be sending any more shipments to Europe at the moment because their pipeline was blown up to Yambu because they can't because they can't because of the situation and the suits because of the hoothies. I was having, I have a lovely nephew who lives in Hong Kong. It was a pleasure to see him here for dinner last night, James. And he was saying, look, our grocery prices have gone up. Everybody here is furious at the war because the price of rice has gone up. The price is bread has gone out. The price of everything has gone up in Asia. I don't think Americans quite understand that either, but I think the longer term damage beyond even this energy shock. And I know that you and I have been talking about the prospect of a real energy shock coming. And every analyst, oil analyst, I speak to keeps telling me, listen, if this carries on, We have drawn down strategic reserves to their lowest level on record. we can't keep doing this. There will be a big hike in energy prices, and it's going to come if we can't wrap this thing up. And now we've just expanded that thing. But we're in a position right now. I think with a longer term threat, is that America's credibility as an ally is shot. Yeah, maybe the Gulf states were stupid to think that they really liked the way that Trump did business. They understood that. They could bypass all those pesky, annoying institutions, like the National Security Agency and the State Department and all of these institutions that were the bedrock of American diplomacy that did things by a certain book and took into account history and geopolitics and knock-on effects and actually the chess board. And they thought this is great. We just have Donald Trump's cell phone number like every journalist in Washington. I have it. You have it. Has Donald Trump's cell phone number and we can just call him directly and bypass the NSA? And the State Department, well, guess what? What happens when you do that? You end up with a situation that you're in now with the Arab countries confronting a war that they didn't want. They didn't start. Iranian attacks that don't seem to be stopping against them and continue to be a threat. Who these that are emboldened? Energy infrastructure is now vulnerable. And an uncertainty about whether America is going to come to their defense after decades of acidiously courting those relationships that were not just built on oil transactions and arms transactions. That was an important part of it but it wasn't just transactional. It was built on building confidence amongst those leaders and amongst whoever was in the White House, whatever party was in the White House. And that's what's shot here. Those countries may have thought they were better off with Donald Trump because they could call him directly. Actually, I think what the lesson for them and other allies is that actually a system of institutions was better off than this slightly feudal system that we have at the moment, right? I mean, if you're America's ally in the Middle East right now or you're in Seoul or you're in Taipei, you are watching what happened this week with MBS calling the White House and getting a kind of, oh, sorry, no answer. Sorry, no answer from the White House. Call back again, all our lines are occupied right now, right? I mean, that's the problem here. So, Kelly, the big question, okay? And I want you to really think about it. Will the government of Iran tip over because of the economy? And just your me after a second, Trump is a very lucky guy. These numbers are staggering. Oil exports are down 85% inflation is through the roof, 67%. The October number for inflation actually was 80 to 90s. So I'm just giving a blended one for the war. The regime is standing, but they are hurting and the Israelis are telling Trump, listen, they're going to stop paying the security forces. They're running out of money in Iran. And when they stop playing the security forces, the IRGC is going to flip. Is that possible, Kelly? Is Trump that lucky? Or that is possible? Or will the Iranians be able to outlast Trump's insanity? Given the situation that we are in now, if you are sitting in the situation room and the Israeli government is calling you with intelligence and advice, how much credibility are you giving that intelligence and advice? There has to be a question about it. I'm with you, but if you're Donald Trump, remember because this is a policy of one. And if BB's calling him and saying, hey, just hold on, we got the Masad in there and it's about to blow up and the combination of economic misery now plus the destruction from the war is going to lead to regime death. Okay, now I'm going to give you my opinion. I'd like to hear yours. I don't think so. I think these people are going to outlast that. Trump is telling people privately because again, I was talking to people last night that this is all going to happen by Thanksgiving. Just hang on. This whole thing is going to implode and I'm going to be the genius that looks right. And by the way, I will say this, Kelly, I want him to be right. Okay, I despise Trump. I think it's pretty clear from this podcast how much I dislike him and how much damage he's done to the global society. But I would like that regime to fall. You know, what I don't want to have happened is what I think some of these rallies want, which is a failed state like Syria. I don't want that. I want a secularization of that state and a reformation of that state and a rebirth. And I want that state economically aligned with us here in the West. I want that. But do you think that's possible? I know what the White House is looking at. They're looking at the Overland trucks. They're getting bogged down at the Iranian Pakistani border. They can't get the oil out overland. They were getting that oil out overland. They can't get the oil out through the state of all moves. They are being squeezed economically. Their tolerance for being squeezed is remarkably high. It was economic pressure that brought the Iranians to the table in 2014 to negotiate the original JCPOA. They now have an existential reason not to come to the table unless it was on their terms. However, because they've seen what's happened over the last six months, so I don't know. Maybe Trump's going to be lucky. Maybe this is all about to collapse and it's a house of cards, but they seem to be hanging on despite their odds. I just telling you what they're telling them. And I know what they're looking at. I know what the intel is that they're looking at. When you hear Donald Trump say the midterms and blah, blah, blah, you know, remember, there's also there's a floating supply that Iran still has out there that it is selling at a discount to China. When that floating supply is over, you're not going to be able to truck enough oil to China. And that's going to put a lot of economic pressure on Iran. So when we sit here in the West and we look at all of the mistakes and the misfortune that the president has had in the war, the Iranians are hurting too. And so now that's the gauntlet. That's the game of chicken. We'll have to see where it ends. Now I'll make a prediction here. I think this will put enough pressure on Iran to create a ceasefire and a break of this economic impasse. It's not going to put enough pressure on them to change the regime, which then gives them the continued ability. If you are in the Gulf region and you are the UAE or your Kuwait or your Qatar or Jordan, I think US base is then become very vulnerable because you have a continued ability. Clearly, once there is a ceasefire, what will the Iranians do exactly what they did during the MOU pause? They started to rebuild their missile infrastructure and their missile production. They'll start to do that again. And I think that leaves those Gulf allies very vulnerable if there isn't some kind of significant regime change anyway. Trump is also telling people there's no chance that the US will rebuild those bases in those countries, in those Sunni countries. And so I don't know, I don't know what that means for America's footprint around the world. You know one thing that it means it means that if you are a country that has the option of going for a nuclear weapon, you will look at that more seriously today. If you're in Asia or if you're in the Middle East, then you would have done six months ago because you can no longer rely on the US security umbrella. And that makes the world a more dangerous place. All right. In the immortal words of Donald Trump, we'll have to see what happens, Caddy K. That's the good news, guys. But here's the really, really good news. If you want to know how we got into this mess and how we can get out of this mess, you need to tune into our new founding members mini-series. All the wrong moves. It's based on Anthony's incredible book. It's so good. It really does give you a roadmap forward as well as a glimpse into the past. The first episode came out this week where we discussed the fatal policy decisions that got America to the situation it's in now, specifically with reference to Donald Trump. Here's a clip. So you build the book and near around three catastrophic policy decisions. And I want to talk about the first one. We've set the stage in the background and this sense of kind of mistrust that people have. We come out of the Cold War and America has won and been triumphant and everyone is buying into capitalism and pluralism and the American way of doing things. And there is a belief that the rest of the world will follow the example of the end of the Cold War that if we open up trade to the rest of the world, it'll be like a bit like the extension of that kind of very early trading block in the United States at the beginning of its history around the American Revolution that China essentially will follow the pattern of the Eastern European countries that we could just bring them in as we have brought in Eastern Europe. Remember the wall has just come down and this big Soviet block that no one could get into suddenly it's accessible and they are developing judicial systems and rule of law and free trade agreements and allowing people access to capital in a way that we kind of thought had been impossible even perhaps five or ten years beforehand. And so perhaps it's no surprise that policy makers who have just come out of that extraordinary moment of triumph and change in one communist block of the world look around and they say to themselves hey it's happened in Eastern Europe it could happen in China too and then we would all be free trading and then there will be even more money for everybody. I'm playing devil's advocate here because that was the consensus in the 1990s and that is when we get to the first catastrophic decision which is what we talked about right at the beginning of this program China's accession to the world trade all optimization. Gary there's nothing like being young, smug, and arrogant. then getting something completely wrong. But as you pointed out before we started this recording, it wasn't just me, it was the economist, the Wall Street Journal, the New York Times. The consensus thinking was the narrative that you just suggested. Again, I want to point this out to people. Richard Nixon, he goes to China. Okay, it's the winter of 1972. He's an anti-communist. He wants to have a rapprochement or a detente with them because he wants to check Soviets. And he goes to China and he does a couple things in China that people forget about what we should mention it. He allows Mao to link his ren Mb, his currency, to the US dollar caddy. This is super important because China is trying to figure itself out. They don't get there until Mao dies and Deng Zhao Ping begins these capitalist reforms in the society. But they've linked themselves to the American currency. And so the Americans are deficit spenders. So they have to weaken their currency. If you really understand the way currency works, if you're in a manufacturing center and you're building big factories, your currency should strengthen caddy. But the Americans allow the Chinese to link the currencies. So we're pulling the Chinese currency down because we're devaluing at a time where they're building these manufacturing centers. So they have this wild explosion of growth. They get manufacturing plus devalued currency and they're able to flood the West as a result of the introduction of the world trade organization powers. They come into the West as an emerging market. But the same standing as let's say the Dominican Republic where they they can protect their markets with tariffs and we have to allow their goods to come into our markets relatively unfettered. Okay, this is something Trump is right about. Okay, we have to acknowledge that Trump was right that there was malpractice done. This catastrophic decision was to allow China in and did not check them as they were growing. So I think this is a really interesting moment to talk about Bill Clinton because Bill Clinton, of course, child of the Cold War comes out of that kind of consensus era. And he and George H. W. Bush, Reagan's successor, are basically agreed on globalization. Everybody has agreed on the globalization crusade. If you look at the 1992 election, there is George H. W. Bush, Bill Clinton, pretty much the Democrat and the Republican on the same page. The person who is interesting in that story is Ross Perot, the self-made billionaire, who runs on an anti-globalization sort of put broadly platform and goes on in 1992 to win 20% of the popular vote. But do either of the parties, the Democratic Party and the Republican Party, which has just lost, do they turn around and say, "Ooh, that's interesting." 20% of the American electorate has just voted for somebody who is opposed to China coming into the World Trade Organization and is opposed to this process of rapid globalization. They don't. To listen to the rest of the series, become a founding member at therestispoliticsus.com or follow the link in the description. That's it from us today. Thanks for listening, everybody. Nothing else I can say after that. Have a great weekend, everybody. Buy the book is what you're meant to say. Buy the book. Thanks for the help with the book, Caddy K. Look at that, huh? Thank you. All the wrong moves out now. Have a great weekend. Meet new, grippy setting mist from Mabelie, New York. Gel to mist technology locks in your look for up to 24 hours, with flexible all-day comfy grip. Just plump, dewy, hydrated skin. That still feels like your skin. 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