The man betting big on Trump's tariffs

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Can you imagine what it would be like to have basically every economist in the world calling you an idiot?

This could not be more stupid.

We're living in crazy town right now.

How stupid is that?

Someone puts a gun to their own head.

Now, I don't think that this bothers Donald Trump too much.

He's the one they're calling stupid, by the way.

All because one senile billionaire won't give up on the one stupid idea in his head.

He is extremely sure that his idea of fixing the world with tariffs is a good one.

Tariffs are very powerful, both economically and in getting everything else you want.

Donald Trump argues that tariffs are the solution to everything.

Tariffs are a,

properly used, are are a very powerful tool, not only economically, but also for getting other things outside of economics.

Almost everyone else, including people that have worked with him for years, disagrees.

But he doesn't care what all those other people think, because he's got someone in his corner agreeing with everything he says.

Thank you very much.

Today I'm honored to swear in our next Secretary of Commerce, Mr.

Howard Luttnick.

I've known him a long time.

He's a great guy.

Howard Luttnick, a billionaire with a permanent smile on his face, is Trump's point man on tariffs, and he is all in.

And so I think it's just a different way of thinking.

Donald Trump understands it.

He's going to be the driver of that policy.

And I'm excited that he's at the desk.

This is the guy that I want to talk about today.

His story is tragic and surprising.

He has been both a hero and a villain.

Two decades ago, he was briefly one of the most hated men in America.

He's about as Wall Street as anyone can get, but he's not stupid.

He's not confused.

He clearly understands the system that he is helping Trump upend.

So why is he doing this?

I think the answer lies in his past, and while Trump may have eased off on the stratospheric tariffs on China for now, I get the impression that he and Luttnick will not be dropping tariffs entirely anytime soon.

Global tariffs are a gamble, and Howard Luttnick is all in.

I'm Matt Bevan, and this is If You Listen.

There is a photograph of Howard Luttnick that I I have been thinking about ever since I first saw it.

A beaming Howard is crouched down next to his son Kyle, who is sporting a brand new red backpack on 90th Street in Uptown Manhattan.

I took my youngest son, he was three.

dropped him off in nursery school and then I took my next son, my oldest son, who was five, to his first day at kindergarten.

Howard Luttnick was almost never late for work because he had a very important job, but on this particular day, he took the morning off.

So I have a picture.

He's got a little wet hair.

He's wearing a little backpack.

On any other morning, Howard Luttnick would have been downtown.

He was the chairman of Cantor Fitzgerald, a financial services firm that occupied floors 101 to 105 of the North Tower of the World Trade Center.

He was a real Wall Street rich guy.

He loved fast cars, fancy suits, and expensive art.

The office was filled with August Rodin sculptures.

Among the Rodins was a very nepotistic workforce.

We chose to only work with people that we like.

So we would tell everybody, look, you've got winning friends.

Let's hire those winning friends.

So we all hired a friend.

I had my brother Gary, I had my best friend Doug.

There were 29 sets of siblings on the Cantor Fitzgerald floors on the day that Howard took his son to his first day of kindergarten.

Then when you took a photograph, they would put the time on the lower right-hand corner in like an LED little orange thing.

Drive a picture of me with my son in front of the school at 8.46.

8.46 a.m.

on September 11th, 2001.

Plane hits the building at 8.48.

Had Howard and Kyle looked up as as that photo of the two of them was taken, they would have seen the hijacked American Airlines Flight 11 fly almost directly overhead.

He works for Canton Fitzgerald and he's a bondbroker.

And

he was on the 102nd floor and we just haven't heard anything at all.

He called home, he left a message, and that's

the last I heard from him.

I love you.

I'm in the Wall Street Center.

and the building was hit by something.

I hope I'll see you later.

Bye.

Howard Lutnick went to the base of the tower and frantically searched among the evacuees for any of his staff members.

And I'm running, and I'm running hard,

and I'm just running.

I don't know what I'm running from.

And I look over my shoulder, and there's a tornado chasing me.

Howard was hit by a wall of debris as the South Tower fell.

His driver Jimmy dragged him uptown and the North Tower collapsed behind them.

Of the thousand Cantor employees at the Trade Centre only 300 are accounted for at this time.

By September 14th it was clear that none of the 658 people who were in the Cantor Fitzgerald offices that morning had survived.

Howard did interviews with three TV stations and cried in all of them.

My 700 families.

700 families.

And 700 families.

He became nationally famous as the face of the Wall Street victims.

Every single individual with his firm.

Gone.

Gone.

Gone.

His entire office.

Everybody.

Everybody.

I mean, I watched this guy tell his story, and it just

ripped me off.

I couldn't handle it.

Couldn't handle it.

On the 14th of September, Lutnik created a relief fund for the families.

And yet the following day, he sent out final paychecks to all of them.

He would no longer be paying their lost loved ones' salaries.

Lutnick was all over national television saying that he would do whatever he could for the families of the missing employees.

Well, it was about a week later that those families learned that all their paychecks were going to stop immediately.

Why would he cry, sob on television?

Are you suggesting that he just turned on the tears?

Oh, yeah.

Yeah.

He went on CNN to talk to Larry King about it and cried again.

See, they call me and they say, How come you can't pay my salary?

Why can't you pay my husband's salary?

Other companies pay their salary.

Why can't you?

But you see, I lost

everybody in the company.

So

you can't pay their salary.

So

they think we're doing something wrong.

Within weeks, Lutnick was a national pariah.

Wall Street Watchers say that's the cutthroat Howard Luttnick they know.

So what was he doing?

Well, he had a strategy of sorts.

Having looked at his books, he thought that if he kept paying the salaries of his lost workers, the company would rapidly go bankrupt.

But what if he restarted the company?

On September 12th, I hosted a call with my surviving employees and I laid out two choices for them.

We could either attend our friends' funerals, that's 20 funerals a day,

for 33 straight days,

or we could try to rebuild the company to take care of the 658 families that we lost that day.

He planned to pay the families of the victims using Cantor Fitzgerald's profits.

My partners and I, we talked about it and we decided that what we're going to do is we're going to give 25%

of the profits of the company to the families of the victims to try to take care of them.

It was a massive gamble.

He had lost two-thirds of his workforce.

He was locked out of all the company's accounts.

The people who knew the passwords were dead in the rubble.

All of their paper records were in New York Harbor.

Did they have a backup?

Yes, in what they thought was a safe place, the basement of the other twin tower.

The company was a shambles.

What if he never made a profit again?

25% of nothing is nothing.

It's going to be a different kind of drive than I've ever had before.

It's not about my family.

I get to kiss my kids.

I get to kiss my kids tonight.

But other people don't get to kiss their kids.

But he had a reason to think that his gamble might pay off.

See, Canda Fitzgerald was an unusual firm.

They were basically the eBay of U.S.

Treasury bonds.

What that means is they buy and sell U.S.

government debt.

I'll let this 1960s film star explain.

Hi, I'm Donna Reed.

I'd like to talk to you about a unique Christmas gift.

A gift that will fit any situation, is always in the best of taste, and will never, never go out of style.

One guess.

You're right, it's money.

But not the ordinary kind of money.

No, this is growing money.

Would you like to see some?

U.S.

savings bonds.

Now, watch how they grow.

Donna Reed explaining savings bonds is the 1960s version of Margot Robbie in a Bubble Bath explaining credit default swaps.

So, this Christmas, give growing money.

Give United States savings bonds.

Thank you.

And Merry Christmas.

Hmm.

I guess that didn't really explain the bond market, though, did it?

Unfortunately, Margo Robbie isn't available to come and sit in my bath to record this next bit, so I'll just have to do it.

So, the US government is always in debt, and so it almost always needs to borrow money.

You can lend your money to them in exchange for a bond, a promise that they'll pay you back with interest in the future.

It's not sexy, but it's considered a very safe investment for those who don't want to take on too much risk.

After all, the US government is hardly going to collapse, is it?

Ha ha!

Generally, US stocks and US Treasury bonds go in opposite directions because people switch from one to the other.

That's how it's supposed to work, anyway.

Anyone can buy these bonds, but you can't just call up the US Federal Reserve and buy them directly.

You need a broker, and that's where Cantor Fitzgerald comes in.

Okay, I'll get back out of the bath now.

Anyway, in 2001, Cantor Fitzgerald were by far the biggest broker of US bonds.

They'd reached that status by trading bonds over the phone.

But they were in the process of transitioning to an online trading platform that they owned called e-Speed.

E-Speed, the global leader in real-time electronic market solutions, the online control center.

Howard Luttnick knew that the markets would soon be reopening, and so it was the perfect time to capitalize.

When the greatest financial market on earth does resume trading, the whole world will be watching.

And he thought that the horrific terrorist attack would lead people to look for safe investments, switching their stocks for government bonds.

People have basically moved to try and get into what they think are secure assets so that they've gone into gold, they've gone into government bonds.

And if people want to buy government bonds, they're going to do it through e-speed.

And that means revenue for Cantor Fitzgerald.

Using their their London staff, a temporary office space in New Jersey and an army of technicians, they managed to get e-speed up and running in two days.

The strategy paid off.

So together we raised $180 million over the next five years for those families.

And my employees, they stitched my soul back together.

That's about $275,000 per family.

He also paid for their health care for 10 years.

After 15 years, Cantor Fitzgerald had hired 57 children of staff members who had died on 9-11.

And he's committed to helping them where he can.

Along with his sister, Lutnick now runs a massive charity which supports victims of terrorist attacks and natural disasters.

It's called the Canon Fitzgerald Foundation, and you know, anyone who can make a donation to it is going to help a lot of people who really, really need it.

Lutnick knew what funding and community could do for people who had lost everything and dedicated a great deal of time to helping people in need.

In fact, it was through charitable giving that he met Donald Trump.

He appeared on Trump's TV show Celebrity Apprentice in 2008 as a bidder in a charity auction.

All right, that's the game we're playing.

I'll take a bid for $100,000 in the front row.

$100,000, sir.

Thank Thank you very much.

His $100,000 donation got him a date for high tea with Fergie, as in the Duchess of York, not from the Black-Eyed Peas.

Now, obviously, this is kind of how it rolls on Wall Street.

Some people take massive gambles that, if they work, can really, really pay off.

You can end up with high tea with Fergie kind of money.

It was a pretty wild gamble, though.

I think I would have just liquidated the firm, collected the insurance money, and just split the proceeds among the victims' families.

And that's probably why Howard Luttnick is now a billionaire cabinet secretary and I am a thousand-air basement podcaster.

I think Howard Luttnick's business and his history has made him a very unusual Wall Street trader.

For one thing, his business is based on how much people trade, not on whether the market is going up or down.

We don't make money when the markets go up.

We don't lose any when it goes down.

But when we win is when it's busy.

So when you're putting a headline on your show or in the New York Times, this is really good for the company.

So the company loves volatility and with volatility back, you know, the numbers of the company are just beautiful.

So bull or bear, it doesn't matter as long as the market is busy.

Secondly, this is a man who has gone through one of the worst traumas imaginable.

Two-thirds of his workforce, including his brother and best friend, were killed in an event that he survived only by chance.

He seems, more than most people,

to be almost entirely unafraid of negative consequences.

How could anything be worse than what he has experienced?

And anyway, he's a billionaire now who makes money from volatility.

He is basically immune from repercussions.

Everybody walks around saying they're nervous.

They're just trying to create something because, let's face it, it's gorgeous out and it's gorgeous in the economy around the world.

In 2023, he got a call from his old TV friend, Donald Trump.

2023 calls me, says, Will you help me?

And I actually thought about it.

Like, and that was the first time I really thought politics.

And then I said,

yes.

He told the all-in podcast that he spent spent a lot of time in Trump's orbit throughout 2024 before deciding in October what he wanted to do to help a potential second Trump administration.

And I said, I want to balance the budget in the United States of America.

And this is the way we're going to do it.

He said, if Elon Musk can cut $1 trillion in spending and he can raise $1 trillion through tariffs, he thought that he would be able to get to a balanced budget.

If we can balance the budget for you,

will you agree to waive all income tax

for every person who makes less than $150,000 a year for the United States of America?

Which, by the way, is about 85% of America.

And the reason you want to work for Donald Trump is he looks at me and goes, sure.

Okay.

I want to pause on that point because it is

wild.

Remember a few episodes ago when we were looking into Doge and I was illustrating Elon Musk's cost-cutting goals with two very big jars of water.

Yeah, I'm not going to do that this time because in order to illustrate what Lutnik is suggesting, that would basically involve me smashing the jars with a hammer and then trying to glue the pieces back together.

He says he's wanting to use tariffs on imports to basically fund the entire US government.

This is the equivalent of Howard Lutnick looking at a pile of twisted steel and concrete, a massacred workforce, a cloud of paper floating through the air and thinking,

I can still make a profit this quarter.

I have to, to support the 700 families.

The American people are his 700 families now and he's taking another spectacular gamble.

Donald Trump is a rare politician.

He does what he says he's going to do.

The stuff Howard Luttnick and Donald Trump are saying in interviews only makes sense if you understand that they are genuinely trying to upend the entire U.S.

economy.

Like this quote, for example, promising to bring the production of high-tech products back to the U.S.

You're going to see robotic production of iPhones and the jobs that are going to be created.

People who build those factories, the mechanics who work on those robots, these jobs are going to be millions and millions of those jobs.

These are great, high-paying jobs, and you don't need a college education to do it.

Millions of non-college educated robot mechanics who presumably pay no income tax.

What about this quote from Donald Trump?

I don't think a beautiful baby girl needs, that's 11 years old, needs to have...

30 dollars.

I think they can have three dolls or four dolls.

Donald Trump genuinely wants Americans to cut back on consumption of of products that are currently made overseas.

I'm just saying they don't need to have $30.

They can have three.

They don't need to have 250 pencils.

They can have five.

They're not saying all these things by accident.

These aren't gaffes.

They are redesigning the American economy.

You won't need a degree to get a good job.

You won't buy so many toys or clothes.

Trade with other countries will be vastly different thanks to the trade deals they're currently negotiating.

But you're going to see over the the next month or so, we're going to roll out dozens of deals because we'll find categories of countries that it'll work out just fine.

But the other thing here is he's not making any specific promises.

There's no particular benchmarks or goals.

Much like with his promise to give 25% of his profits to the families, That could have been 25% of 1 million or 180 million.

This means that any concessions they get from other countries can be called a win.

We had a trade conversation with a country that sells a lot of cars into America.

And we don't sell hardly any cars into their market.

And we were getting nowhere.

We were just getting nowhere.

And the meeting was coming to an end.

And the trade minister at the end of the meeting drops his head and goes, fine.

We'll give your car manufacturers the same

subsidy that we give our car manufacturers.

Bang.

Bang.

We don't know what country that was or what the subsidy was or if that's what Luttnick was even trying to get out of them.

But in Lutnick's eyes, that's a win.

Bang.

I don't know what's going to happen here, but it's clearly not going to calm down.

Howard Lutnick is in the middle of the biggest gamble of his life, and in his mind, it's impossible for him to lose.

The only thing that's convinced him and Trump to ease off a little bit was a sudden drop in the price of stocks and bonds at the same time after their Liberation Day tariffs.

Instead of people swapping US stocks for US bonds, people swapped both for foreign investments because they thought that America had gone mad.

Short of this kind of thing happening, Lutnick is not going to stop until he is forced to stop or until the US economy is unrecognizable.

If you can find a way to benefit from volatility, like Howard Luttnick did, then the next few years look good.

I don't know what's going to happen to everyone else, though.

If you're listening is written by me, Matt Beffitt.

Supervising producer is Kara Jensen-McKinnon.

Audio production is by Cinnamon Nipard.

Next, after a brief, scary moment where two nuclear powers look to be on the verge of war, India and Pakistan have agreed to a temporary ceasefire.

But Indian Prime Minister Narendra Modi says it's not an end to hostilities, just a pause.

The scary thing is there are factions in both governments that think a war might be a good thing for them politically.

Why is that?

And will it inevitably lead to a deadly conflict?

That's next on if you're listening.

Hi, I'm Patricia Carvellis, the host of the Politics Now podcast.

Every day I'm joined by the ABC's sharpest political minds to talk about the latest developments.

Whichever direction they go in, it's not going to be ideal or perfect, but they're going to have to pick one of them.

No easy answers on a lot of these things.

And hey, governing gives you calluses, like it just does.

Listen to Politics Now on the ABC ListenApp.