Trump's Tariffs and the Great Depression

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Speaker 2 Hello, and welcome to the Victor Davis Hanson Show. This is our Saturday edition where we do something a little bit different in the middle segment.

Speaker 2 And today, Victor is going to be talking about the Great Depression.

Speaker 2 And I think that kind of works well with the top news stories, which are over Donald Trump's Liberation Day speech, and then, of course, the topic of that, which are tariffs.

Speaker 2 And we'll get to that after these messages.

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Speaker 2 welcome back to the victor davis hanson Show.

Speaker 2 show Victor is the Martin and Ely Anderson Senior Fellow in Military History and Classics at the Hoover Institution and the Wayne and Marcia Buskie Distinguished Fellow in History at Hillsdale College.

Speaker 2 Please come join him at his website, TheBlade of Perseus. The web address is victorhanson.com and we would love to see everybody there.

Speaker 2 There's lots of things to read and I think that you will enjoy the website, especially if you like Victor's work. So Victor Donald Trump, we had our Friday news roundup when we had

Speaker 2 Donald Trump was just giving his speech, so we haven't had a time to talk about the Liberation Day speech, which seemed to be centered around tariffs and the process of the United States giving what Donald Trump called kind reciprocity for tariffs that are up to the generous reciprocity.

Speaker 2 Yes, and we've had some reaction in the meantime to those, that Liberation Day speech, which is the Dow or the stock markets have seemed to have responded by dropping a little bit.

Speaker 5 1,600 points today on Thursday, on which we're doing it.

Speaker 2 Europe and China have sent out the signal that they are going to retaliate, possibly. So this looks like it's going to turn into a very big part of Donald Trump's administration.

Speaker 2 I was wondering your thoughts on this.

Speaker 5 I have some questions about this. Number one,

Speaker 5 if tariffs are so bad,

Speaker 5 then why isn't the economy of China, Vietnam, India, and Europe crashing? Because they have tariffs up to 200,

Speaker 5 300 in some aspects like Canada, but 20, 30 percent. So

Speaker 5 why aren't they saying, why aren't they having a discussion in China or Europe, this is bad,

Speaker 5 This is like the Smoot-Hartley Act, or we can't do this. Classical libertarian economics say tariffs are terrible, Europe.
Why aren't they having that internal discussion? But they're not.

Speaker 5 Apparently, they think tariffs are very good. It's only our tariffs that are bad.
That's the first thing.

Speaker 5 The second is they keep saying great depression, great depression, great depression, depression, depression, depression. You're going to cause a depression.

Speaker 5 Well, we're going to talk about the Great Depression. But my former colleague, colleague, deceased, but a brilliant man, Milton Friedman, pointed out in print and in lectures.

Speaker 5 I must have heard him say this four or five times in person,

Speaker 5 that tariffs did not, they were a minor factor in the Great Depression. Most of it was monetary policy, too few dollars.
There wasn't enough money, and people were hoarding money, etc.

Speaker 5 But his other point was it was wild speculation in Wall Street. So my point is that the more Wall Street lectures us about depressions and tariffs cause depression, I want to say to them, no, you did.

Speaker 5 You caused depressions because you had wild stock swings. Does anybody believe some of these stocks that are being offered to the public are actually worth that?

Speaker 5 If you look at the actual earnings of companies and you look at their stock valuation, they're way off. So they are just headed toward a reconciliation, a reckoning.

Speaker 5 It's not the tariffs that are going to cause it, and it didn't cause it in the Great Depression.

Speaker 5 The other thing is, what I don't understand, maybe you can answer the question, Sammy. It's simply this.

Speaker 5 Why is the world

Speaker 5 not angry at the people who started the tariffs and have asymmetrical, but they're angry at the target that is finally replying?

Speaker 2 I do have an answer for that. The United States is is the strongest country in the world and expected to be paternal to the rest of the nations.

Speaker 5 Okay, so we're going to be a patsy for long because we think it's 1947 forever and we're right after World War II, flushed with cash, and we're the colossus astrida in the entire world, and that's in perpetuity?

Speaker 5 No.

Speaker 5 The other thing is that I don't understand:

Speaker 5 is the word tariff even appropriate? So give me, I'll give you an example. If Europe

Speaker 5 has a 10%, 8% tariff on cars and we say we're going to do the same thing,

Speaker 5 is it a tariff or is it just

Speaker 5 we just doing what you do?

Speaker 5 What I'm getting at is tariffs classically as defined, and we're going back to the Smoot-Hartley Act,

Speaker 5 they were 40 and 50%,

Speaker 5 and they were unilaterally on the United States to protect industry after the 1930s after the stock market crash. But these aren't unilateral, preemptive, provocative tariffs.

Speaker 5 They are a reaction, and they're reciprocal. So I don't even know what they're saying.
It's like we're on autopilot. We just say

Speaker 5 we're not going to have, we don't believe in tariffs, but all we're going to do is whatever tariffs you have,

Speaker 5 it's going to mirror image you. So it's your tariff.
So, Canada, if you have a 258% tariff on American butter,

Speaker 5 it's autopilot. We'll do the same to you.
And if you don't, we won't. But we're going to be completely on autopilot, reactive.
And that's pretty much what we are doing.

Speaker 5 I don't even think tariff is the right word for it. And

Speaker 5 the other thing is

Speaker 5 they keep talking about the

Speaker 5 Hartley Act in 1930, but if you look at those tariffs, like I just said, they were astronomical. They weren't 10%.
They weren't even 25%. They were 40% and 50%.

Speaker 5 And

Speaker 5 this is a whole different world right now. I'm more worried about the stock market being overvalued

Speaker 5 and

Speaker 5 a whole generation of young people

Speaker 5 between the two coasts that are not getting married, they're not having children, they can't buy a home, they have not had a rise in real wages.

Speaker 5 From 2015,

Speaker 5 excuse me, from 2005 to 2017 until Trump came in, there was no rise in middle wage, adjusted for inflation.

Speaker 5 What good does it do to dump all this stuff, free trade stuff, from China and Vietnam, for example, and Mexico in the United States and say it keeps consumer prices down if wages haven't risen commiserately.

Speaker 5 So we don't get any break by cheaper prices if the wages are flat.

Speaker 5 And so, and I don't mean California artificially raising the minimum wage and driving everybody out. I'm talking about free market economics.

Speaker 5 And wages have not gone up, and they haven't gone up because people are outsourcing and offshoring. So there are cultural, economic, and social considerations.

Speaker 5 There's a reason why we're losing not just the cartel's machinations, but there's a reason why a person takes a drug. There's a reason why the suicide rate is at record levels.

Speaker 5 There's a reason why males of the working classes between 18 and 30 are completely a lost generation.

Speaker 5 And it's because they don't get up in the morning and think, I'm going to build a plant, I'm going to build a natural gas generator, I'm going to build, and I'm going to get an adequate wage, and I can buy a house.

Speaker 5 That's been gone. So this is a class thing.

Speaker 5 It really is. Donald Trump, Mirabel Dictu, I can't believe he did it as a classical Republican.
He's not classical Republican. But what Donald Trump did was he said,

Speaker 5 this Republican is going to choose the side of

Speaker 5 the working man. It's not going to choose Wall Street.
Wall Street hates Donald Trump.

Speaker 5 Have you ever seen anybody in this audience that's watching or listening?

Speaker 5 Has anybody ever, in their wildest imagination, think that Democrats would be on the floor of the Congress blasting Donald Trump and worried that Wall Street's going to be hurt

Speaker 5 and not talking one word about the working classes that are all for this because they think finally somebody's listening. And the final thing is, has it had any effects?

Speaker 5 Donald Trump says $4 trillion in foreign investment.

Speaker 5 The figures I've seen are commitments. They're not actualizations yet, but $3.1 trillion.

Speaker 5 If that comes in, $3.1 trillion, there will be millions of jobs that come in here for people to avoid these tariffs.

Speaker 5 Because he's just saying if you come in the United States and you want to help us, you can keep the profits. You just have to have the jobs here.

Speaker 5 If you're a Mercedes-Benz and you get a 3 to 8% profit on your sales, fine. But

Speaker 5 the cost and the services and the labor is going to be here. You're going to pay for things here.

Speaker 5 And so it's going to be a boon to the interior of America. And the Democrats, because they have no other alternative agenda,

Speaker 5 They are taking the side of the uber rich, even while they blast oligarchs and aristocrats and plutocrats. No, you're on the side of plutocrats and aristocrats.

Speaker 5 You guys were the party of globalization under Bill Clinton that started it all off.

Speaker 5 You were the people who thought globalization was neat because you could wean the billionaire class over to your side, which is about 70 percent of them are on their side.

Speaker 5 So they are speaking in their interests. They're not speaking for the people of Pennsylvania or Michigan or Wisconsin, the working people.

Speaker 2 So then just a few more things about the tariffs that are being applied to countries. Donald Trump has chosen not to apply those tariffs to Russia, Cuba, China, and North Korea, or Belarus, not China.

Speaker 2 Belarus and North Korea. And I was wondering.
Russia. And Russia, yes.

Speaker 5 Well, ostensibly, we don't. I'm not saying that we don't have leakage through third parties, but we have trade sanctions on those countries.

Speaker 5 So there's no point in.

Speaker 5 I mean, we're not trading with them because

Speaker 5 under the Biden administration, once they invaded, we leveled trade sanctions against.

Speaker 5 And Trump has said that he would even go beyond that and put sanctions on anybody who does trade with Russia, i.e. buys their oil.

Speaker 5 Then they would have sanctions put upon them by us, so it would be redundant. In North Korea, we don't let things from North Korea come in.

Speaker 5 And of course the left says, this is Putin's puppet. He's not putting things on Russia.
He's putting things on Great Britain because Russia is already sanctioned.

Speaker 5 And Trump, to get them back into the negotiations, he's going to sanction them them even harder. He's doing things that nobody on the left ever thought.

Speaker 5 Did Joe Biden ever say?

Speaker 5 I mean, Joe Biden almost,

Speaker 5 if you read the secret history of the Ukraine war as it appears in the New York Times, Joe Biden was authorizing types of strikes where he was getting messaging from the Russian military not to do that because they were going to go to DEF CON, their version of DEF CON 1.

Speaker 5 He just ignored it. Or whoever was running the country, he wasn't.
But my point is

Speaker 5 that

Speaker 5 I didn't hear any Democrat in the Senate said we're going to sanction any country that buys Russian oil or gas.

Speaker 5 Partly because the Europeans were blasting us for not giving enough money why they were secretly buying Russian natural gas and oil, and they didn't want to be sanctioned.

Speaker 2 Victor, I would like, before we move on,

Speaker 2 and there's more questions I have on the tariffs. I would like to take a moment for our sponsor, Field of Greens.
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Speaker 2 So, Victor, I was wondering if you thought that there would be special impact on farmers or the

Speaker 2 how is this going to impact farmers? Are they for or against these tariffs?

Speaker 5 I would say most of them are probably

Speaker 5 against them because it's in the media.

Speaker 5 But if you look at the entire economic plan that people are proposing about the extension of the tax cuts, there are elements within that package of immediate depreciation for the purchase of tractors and things that will be, in the long run, favorable to them.

Speaker 5 But right now, if you have a,

Speaker 5 I don't know, if you have a Massey Ferguson that's assembled in Canada or you've got a Kubota tractor and you need parts and they come in here, they're going to be more expensive.

Speaker 5 I don't know how much people are talking about, but in the case of a house, it might be $10,000 more

Speaker 5 to pay the extra price on bolts and nuts and nails until domestic production either increases or those companies decide to put those factories here.

Speaker 5 That could be done very quickly because there's so much unused manufacturing places in the Rust Belt. You could have a Japanese company go into Michigan or Wisconsin or any of those places.

Speaker 5 They'll probably go into Tennessee or the South because of the unions, but they can find all of these abandoned places, fix them up, or build new ones. They could do it immediately, within a year.

Speaker 5 They could do it if they wanted to. But

Speaker 5 most farms, the thing about it is

Speaker 5 I have 40 acres of almonds, and it produces, I don't know,

Speaker 5 in an excellent year, almost three tons. We're talking about 120 tons.
It's not very much, but we have 1.1 million, maybe it was 1.5, I think it's down to 1.2 million acres of almonds.

Speaker 5 And tariffs did not make the almond price collapse. Overproduction did.
So, what happens is if you have almonds or walnuts or pistachios or raisins, and they go down to the port of LA,

Speaker 5 the Koreans, the Indians, the Chinese just go along with clipboards and they look at all of the cargo ships. They look at the

Speaker 5 cargoes,

Speaker 5 the big crates, you know,

Speaker 5 and they count them them and they think, what is the shelf life of a pistachio? How long has it been sitting here? Oh, in about six months, we'll offer them 75 cents on the dollar.

Speaker 5 That's what they're doing because of overproduction. And they have tariffs, too.
Anything that competes with their agriculture, they have tariffs. And one final thing:

Speaker 5 this idea, that post-war idea is so ossified that we take the hit

Speaker 5 and we we allow these countries to create

Speaker 5 these production assembly manufacturing centers and then we take American capital out of the United States and develop them over there in these centers

Speaker 5 and then they send it back here cheap

Speaker 5 and this process then is going to make these countries like Vietnam more affluent or China more affluent.

Speaker 5 Now I'm parroting George H.W. Bush and Bill Clinton.
And in that affluence,

Speaker 5 they naturally appreciate the beauties of Western-style free market capitalism and more importantly,

Speaker 5 democracy. And I have seen zero proof of that.
The more we gave concessions to China, the more they rigged their markets and dumped product here below the cost of production.

Speaker 5 They manipulated the money markets. They stole copyrights.
They stole patents. They ran up deliberate surpluses.
They didn't believe in capitalism, free market economics. They believed in Napoleonic

Speaker 5 mercantilism. And did they ever liberalize? Oh, Tenneman Square was because, I remember this, Teneman Square, that was because of the new affluent growing awareness.
No, it just made the Chinese.

Speaker 5 All globalization did to the Chinese is make its military almost the equal of ours. And Vietnam is still run by communists.
I haven't seen any of that.

Speaker 5 You think Mexico, all of a sudden, they've got $177 billion surplus and there's no cartels, there's no corrupt judges? No.

Speaker 5 There's no proven, demonstrable connection between greater affluence and a tent

Speaker 5 based on mercantilism and then an automatic or predestined transition to democracy. That's what we were told.
You guys out there in

Speaker 5 Pennsylvania, Wisconsin, Michigan, we're going to have to put you up on the altar of globalism.

Speaker 5 And you can just go to 7-Eleven and be a clerk or work on the internet, you know, and sales or something because your jobs were overpriced. You were getting too much.
So we outsourced.

Speaker 5 And now everything's more efficient because capital always goes to the most efficient thing. But the people who say that are never

Speaker 5 the victims of their own ideology. It's always somebody else in the Midwest or the San Joaquin Valley.
And I saw that as a farmer. I saw raisins go $1,420

Speaker 5 to $440 in 12 months. And I was a smart blank-blank AS kid with a irrelevant PhD in classical languages, farming on a massive Ferguson.
And everybody around me,

Speaker 5 my Mexican-American friends, would say, Biektar,

Speaker 5 where did you get a PhD? Are you a better pruner than I am? I can prune 200 vines. I don't think you can do that.
What did they teach you over there at Stamford?

Speaker 5 That's what they would say to me. And I'd say, you got a point.

Speaker 5 And they say, who is the fool, you or me? And I said, I am.

Speaker 5 But the point is, I went up, I think I mentioned that, I went up to the Raisin Administrative Committee, and we had this economist come out, and he was going to lecture us all about how wonderful it is that the free market was going to.

Speaker 5 And I said, Greece and Turkey are now in the EU, and they're dumping dumping product below.

Speaker 5 They're getting about, you're a baker, and you want to pay $1,400 for American ton of raisins, or you want to pay $800. But they had actually, the real costs were triple R's because of their

Speaker 5 regulated economies, but the EU was subsidizing it, so they were dumped here. And I said to them, they have no defense.
We're paying for their NATO budget big time in the 80s.

Speaker 5 And I said, we just bombed Libya, Gaddafi. And you know what?

Speaker 5 All of these these people that are dumping, these EU countries that are dumping product here through subsidies below the cost of production to ruin our industry, they wouldn't let American planes fly over Europe from England.

Speaker 5 They had to go around the European contract. They were siding with Qaddafi while we were protecting them from Russia.

Speaker 5 So we're paying their defense, they're subsidizing product, and this guy says to me, as I said earlier, and you know what's so weird? I heard it on the radio and driving today and on television.

Speaker 5 I try to listen to all these different stations. They get these free market people.
Now they're Democrats, but they usually are Republicans or Liberal.

Speaker 5 And they always say that it's going to hurt the consumer because you're going to get cheaper prices

Speaker 5 and we're going to get lackadaisical domestic suppliers because they think that they can just raise prices. They're not going to be competitive.

Speaker 5 And, you know, we talk about China and Vietnam and Europe, but

Speaker 5 this is not sustainable for their countries to have protectionism because

Speaker 5 they're not facing market realities, the buffets, the winds, the tornadoes of the market. We are, so we're flexible.

Speaker 5 How'd that work out the last 50 years? Go tell somebody who was a boilermaker or steel worker and tell them that he was lazy or that he's better off at seven bucks an hour or ten bucks an hour.

Speaker 5 I'm so sick of that. It's a class thing.

Speaker 5 And I have this unique or unfortunate experience of being in the Bay Area and on the Stanford campus listening to this and then coming back to southwestern Fresno County and seeing the reality of stark poverty and no jobs that pay well except for government, state of California,

Speaker 5 $57

Speaker 5 billion in debt,

Speaker 5 but it's still, you know,

Speaker 5 printing money or print money, borrowing money for everything, Medicaid, everything. Yeah.

Speaker 2 Victor, before we go to a break and then to your middle segment on the Great Depression, the last question I had was:

Speaker 2 did you notice I was skimming over the tariffs to be applied in all the countries and their tariffs, and it seemed to me that the the countries that had the highest tariffs against the United States, and you kind of touched on this, were Cambodia, Laos, Vietnam, but and somebody could argue, well, they're communist states, of course, but then Taiwan as well, which is not.

Speaker 2 And it's all these Asian states. And is there any there are some that were not Asian, but it's predominantly with the highest ones,

Speaker 2 those Asian states. And I know that they would make

Speaker 5 it communist.

Speaker 5 But Taiwan's not communist.

Speaker 5 Thailand, Taiwan.

Speaker 5 But their attitude was

Speaker 5 their model. Their model was China.
And their attitude was this.

Speaker 5 Well, if China is a belligerent to the United States and a rival and the United States doesn't trust it, and China gets away with 10, 20, 30 percent tariffs on certain things, then why wouldn't our friends or neutrals like us get the same break?

Speaker 5 See, that's what people don't understand.

Speaker 5 Once you start to do it and you work at a disadvantage, and some of the people that you're working at a disadvantage of are your hostiles or belligerents or enemy or opposition, then your friends say, well, why would you treat your enemy better than us?

Speaker 5 So we're going to do it too. So they got on.
And then the second thing was,

Speaker 5 when we started to have frostier relations, some people started to relocate to Southeast Asia for cheaper wages. And they thought, wow,

Speaker 5 this is really good. We've got a lot of money coming in.
Maybe we'll put barriers because we're kind of insulated now.

Speaker 5 First of all, the United States doesn't believe in retaliatory tariffs. And number two, we've got all this foreign investment coming in.

Speaker 5 So we can afford to be a little bit protectionist of our small-scale industries, agriculture, because

Speaker 5 they're not going to retaliate against us, and we've got all this infusion for relocation from China and assembly. Same thing with Mexico.

Speaker 5 So

Speaker 5 it's,

Speaker 5 I just don't understand the logic. This is why I'm so confused.
The world is angry at the people who say no mas.

Speaker 5 All you have to, and Carolyn Levitt's been very good at that. I don't know if it's the press secretary, I really like her.

Speaker 5 She just kept saying reciprocity, reciprocity, reciprocity, reciprocity. Her little chart, she puts them up.
And why are you mad at us? We're just doing what you do.

Speaker 5 And, you know, even the only country that I have I'm ambiguous about

Speaker 5 somewhat is Australia. I did last night Sky News of Australia.
I love Australia.

Speaker 5 The pew polls show that of all countries in the world, we have the fondest favorability, most favorable

Speaker 5 feelings, reverence for Australia. Okay.

Speaker 5 they've run a $16 billion deficit with us.

Speaker 5 And so why did we have a tariff on them? Because

Speaker 5 one of their biggest industries, of course, is beef.

Speaker 5 And

Speaker 5 in 2003, there was a case of mad cow disease from a Canadian imported cow.

Speaker 5 And so they went

Speaker 5 I don't blame them. They went ballistic, so they said no more beef.

Speaker 5 But then Donald Trump said, if you look at the Chinese and if you look at the Europeans and if you look at everybody, they go into little weird things like, oh,

Speaker 5 you can't have a chicken in a cage this size, or this environmental can't leave this much carbon footprint, or you can't have, you might have a swine flu or a bird flu outbreak.

Speaker 5 And they find little things like that.

Speaker 5 You think that 345 million Americans that eat meat all the time are going to get mad cow disease? No.

Speaker 5 But Australia used that. And so for the next 22 years,

Speaker 5 they haven't allowed our beef to go in at all. So Trump said the other day, I like Australia, but they're using an archaic calcified idea as an excuse to keep out competition from American beef.

Speaker 5 And

Speaker 5 I just,

Speaker 5 I live eight miles from the Harris Beef Corporation, which is the largest beef corporation west of the Mississippi in terms of actual tonnage of beef produced.

Speaker 5 It's right here on McCall Avenue, not very far from my house. John Harris sold it about four years ago to a local company.
But if you talk to the people who ran it, I won't mention their names.

Speaker 5 They're wonderful people. And John Harris is probably,

Speaker 5 he's known as a cattle baron, agribusiness person, but he's known foremost as a man of integrity.

Speaker 5 He's just a sui generis. He's a different type of person.
He's always had a high moral code. And we mentioned Carol Harris, recently deceased.
She did too. Very generous people.

Speaker 5 The idea that they were producing beef there that might have mad,

Speaker 5 that is insane. That is one of the most up-to-date, clean, automated,

Speaker 5 and he's even got,

Speaker 5 they even had PhDs in animal science to see that the way that the animals were dispatched was humane.

Speaker 5 You know, I think they even had an animal psychologist to come in and make sure that the animals weren't too apprehensive as they were led to their next life.

Speaker 5 But my point of it is, so Australia would say that you can't have any American beef, no Harris beef. That's insane.
And so that's why there's all these things that Trump is saying,

Speaker 5 I got four years, I'm going to be reciprocal.

Speaker 5 It's madness. And think one last thing.

Speaker 5 Everybody, take a deep breath. He could have been like Ronald Reagan.
Ronald Reagan did a lot of good things,

Speaker 5 but he didn't cut the budget. He didn't try to balance the budget.

Speaker 5 And he didn't try to shock the world into treating us the way that we treat them. George W.
Bush came in.

Speaker 5 He did a lot of good things, deregulated, but the deficits went up, just like they did during Trump's first term, partly or mostly due to COVID.

Speaker 5 And we got into optional ground wars, which I supported at Iraq after 9-11, and Afghanistan.

Speaker 5 So my point is this. This is the first, and George H.W.
Bush, he kept talking about capital gains tax, capital gains tax, capital gains tax, but not offshoring or off-source.

Speaker 5 This is the first Republican that said

Speaker 5 we've all been playing musical chairs and this music's going to go off.

Speaker 5 And when it goes off, there's no seat for the United States with $37 trillion in debt and $1.1 trillion or somewhere between $900 billion versus $1.5 trillion that undulates in trade deficits.

Speaker 5 So he's the first person who said, I am going to common sense-wise or comprehensively take a look at everything that is plaguing the United States.

Speaker 5 The border, no more cheap labor under the bushes in Reagan.

Speaker 5 I looked at them. I've debated.
My friend Alan Simpson, he was one of my close friends. I debated him on the Simpson-Missouli in front of a group.
I really loved him.

Speaker 5 He was a wonderful person, but I think that bill was wrong. But he's the first person that said there's going to be no illegal immigration.
We're going to follow the law.

Speaker 5 He's the first person that said, we just want to be treated the way they treat us. on trade.
He's the first person that said the federal government's 3 million

Speaker 5 employees, it's out of control, and we can't run these deficits. None of the other Republicans did it.
And yet,

Speaker 5 you pick up the Wall Street Journal, you think he'd be public enemy number one. I don't understand it at all.
I don't understand why people are saying, yes, he tweets too much or he says this or that.

Speaker 5 I can understand that. But why don't they see what he's trying to do? And why don't they compare what he's trying to do with past presidents?

Speaker 5 Why doesn't the Wall Street Journal, like the Democrats, why don't they just say, this is the Wall Street Journal's alternate plan?

Speaker 5 We believe either they have to do one of two things. We don't think trade deficits are a problem at all.
We don't mind at all. It's like we said, it lowers consumer prices.
It makes us more efficient.

Speaker 5 And just say that.

Speaker 5 Or we don't think budget deficits are that bad. You can always borrow.
You don't need to cut like this and this and that, because they're always criticizing his cuts and stuff.

Speaker 5 Or

Speaker 5 why don't they say we can manage $3 $3 billion?

Speaker 5 Or the defense budget, you know, it's the same as the annual interest payout? That's no big problem. But they don't.
All they do is attack, tack, tack, tack, tack.

Speaker 5 Well, come up with a constructive alternative. Or, if you can't, say the status quo was fine.
It was all Trump's imagination. Trade was great, deficits were no problem.
Interest borrowing, no problem.

Speaker 5 The border was fine. We got a lot of cheap labor, great

Speaker 5 demographics. Just say that.
But they don't.

Speaker 5 That's what drives me nuts.

Speaker 5 There's going to be one last thing. There's going to be, is it 12 Democratic representatives as we speak are going to visit the border to inspect the status of immigration?

Speaker 5 What are they going to do?

Speaker 5 Vinnie Thompson, remember him, the chairman of the January 6th Committee,

Speaker 5 before that, known as an election denialist, who tried to overthrow the 2004 election by trying not to certify, I think, along with other 30 other House members, because they said, does this sound familiar?

Speaker 5 The voting machines were crooked. And

Speaker 5 George W. Bush didn't really win Ohio.
Willie, John Kerry. And John Kerry, if he won Ohio, he'd be the president.
So we're not going to certify it. We're going to delay.

Speaker 5 And then they put him the head of the January 6th Committee. And

Speaker 5 he's going down to the border. He didn't set foot there, did he?

Speaker 2 Not for four years.

Speaker 5 I guess his attitude is: the border's wonderful when it's wide open and there's 12 million illegal aliens and there's 500,000 felons, so I don't have to visit it.

Speaker 5 But if Donald Trump is president and there's nobody coming across and there's no more illegal aliens, then there's something wrong. I've got to go find out and attack him.

Speaker 2 There might be something unsafe there, Victor.

Speaker 5 He's saying there's too many people not working. I went there and they're just diving around waving at each other.
They're not getting killed or shot at or trying to deport people with who knows what.

Speaker 5 You know what I mean?

Speaker 2 And I think that Donald Trump has got a massive project trying to clean up the border problem that the Democrats left him. And he's got a massive project doing these tariffs.

Speaker 2 They are going to be somewhat of a long term, much longer term.

Speaker 5 He didn't have to do this. He could have just sat back and said, I'm Donald Trump, and he could tweak things at the edges.
He could have did like he did the first term.

Speaker 5 He could have done some good things, good GDP, low inflation, deregulated, cut taxes, tried to jawbone the cultural revolution. Instead, he said, woke, ESG, DEI,

Speaker 5 uh-uh, I'm going to have a counter-revolution. Cultural, social, economic, political,

Speaker 5 military, diplomatic. And that's what he's doing.

Speaker 2 And I think only

Speaker 2 a businessman and his businessman's attitude of, we've got a problem, let's get it fixed, this is how we do it, that's the only way to get done.

Speaker 2 If you had a swamp creature in there, they would be doing what you just suggested: sitting back, letting things ride.

Speaker 5 Or their wife would have come to them or their spouse or whatever and said, you know, I went to a cocktail party in Georgetown, and I just can't take it, what they're saying.

Speaker 5 Or one of the senators would call up and say, you know, my wife works for CBS, she's going ballistic. Or somebody else would say, my husband,

Speaker 5 he's working for PBS, you can't do this. And then they would be susceptible to that.
But

Speaker 5 as I wrote in the case for Trump, I'm writing this sequel,

Speaker 5 the Trump comeback or whatever we call it. It's almost, I'm getting close to a rough draft.
But he is like Sophocles Ajax or Ethan Edwards and the searchers. He's the outsider, the tragic hero.

Speaker 5 And everybody said, we're in stasis. We can't deal with the debt.
We can't deal with trade. We can't deal with the border.
We had Joe Biden. Oh, who's that weirdo riding in?

Speaker 5 from the mount from the Grand Tetons. Oh, it's Shane.
Oh, he was a gunslinger. Yeah, but we don't care if he's a gunslinger.

Speaker 5 He's faster than the cattle baron. So, Shane, do your thing.

Speaker 5 And then when he does his thing and we're safe, they said, oh my God, he has a gun. I don't approve of that.
Remember that great line when he says,

Speaker 5 there's no living with a killing, and there's no place for me here. And I've got to leave.

Speaker 5 And the point was, it's just like John Wayne at the end of that searchers when he walks out, that famous John Ford scene where he opens the door and there's light coming out, and it's dark, and everybody's celebrating that Natalie Wood came back, and everybody's happy.

Speaker 5 And you think they're going to crown him with flowers or an olive wreath or something? No, they don't want him. He kind of does that John Wayne, well, you know, I'm done and I'm going home.

Speaker 5 And he's got that kind of Confederate double-breasted thing, and it's like, thank you.

Speaker 5 And we loved you for doing that. And I don't think we want you to stay for dinner.
Not the mechanisms you used. You were a little bit too violent for my taste.

Speaker 5 I don't, you know, it's kind of like Curtis LeMay.

Speaker 5 He's going to take the B-29s down to 7,000 feet.

Speaker 5 He's going to drop napalm. He's going to come in on the jet stream, 400 miles an hour.
He's going to target the industrial centers of all the major Japanese cities.

Speaker 5 He's going to shorten the war by two years, no invasion of Japan probably.

Speaker 5 He's going to mine all the harbors. Oh my gosh, if he could do that, we wouldn't have to invade Japan.
And that was why we did invade Japan, by the way. It wasn't just the atomic bomb.

Speaker 5 Japanese said that after the war, that the B-29s did far more damage than the atom.

Speaker 5 So then, after it's over,

Speaker 5 peace.

Speaker 5 Oh, my God.

Speaker 5 We invented napalm at Harvard University. And that Curtis LeMay guy did it.
He dropped napalm. He didn't.
He dropped 11 million leaflets. That wasn't enough.

Speaker 5 And then we started trashing him, him and

Speaker 5 he pops up in Doctor Strange love, you know,

Speaker 5 as

Speaker 5 a composite character of these nefarious, odious generals. And then we make fun of him and then he dies.
And it's like,

Speaker 5 but when you're in an existential war and you don't know how to use the B-29 and it's a bigger loss than the Manhattan Project, $2 billion down the drain, and General Hansel was a nice guy, a really nice guy, and he's flying at 30,000 feet, and they're missing the target,

Speaker 5 and the bombs, and the engines are burning out, then I think you need

Speaker 5 Shane.

Speaker 5 You need Shane or John Wayne. And then, and that's what we do everything.

Speaker 5 Same thing with George Pat.

Speaker 5 Oh, my God, he slapped a soldier. Yeah, he slapped a soldier after he saved North Africa and he won the Sicilian campaign.
And then they put him back in.

Speaker 5 Oh, we need him. Where is he? Well, we isolate him for a year because he slapped two soldiers.
Well, bring him back. We were stuck at D-Day.
We can't get out of the Bokage. Phew.

Speaker 5 He's on the way to the Rhine. And then after the war, it's,

Speaker 5 oh, my gosh. He said that one day we might have to fight the Russians.
Oh, my gosh.

Speaker 5 He said that we fought to liberate Eastern Europe in 1941 from the Nazis, and now it's controlled by people just as bad. Those are our allies, our friends, the Ruskies.
I know what we'll do.

Speaker 5 We'll relieve him of command. And then we'll say he's a nut.
And that's what they did. Same thing with General Sherman.

Speaker 2 Sad tales, figures.

Speaker 5 It is. It's the tragic hero.

Speaker 5 That was the brilliance of the seven plays of Sophocles. Read them.
Philoctetes, Ajax, Antigone.

Speaker 5 It's some brilliant person that comes out of nowhere to be the

Speaker 5 moral problem solver. And then as the problems get solved, the people who are the beneficiaries think, wow, that was amazing, but now we don't need them.

Speaker 5 And now I hate myself for ever calling in such extremists.

Speaker 5 And that's how it works.

Speaker 2 Well, Victor, we have to go to a break and then come back to talk a little bit about the Great Depression. So stay with us, everyone, and we'll be right back for the Great Depression.

Speaker 2 Welcome back to the Victor Davis Hansen Show. So, Victor, you can find Victor at X.
His His handle is at V D Hansen and on Facebook at Hansen's Morning Cup.

Speaker 2 And we've started video production of these podcasts, which can be found on YouTube, Rumble, and Spotify. So, whatever your outlet is, come join us there.

Speaker 2 So, Victor, the Great Depression, perfect week for it since Donald Trump rolled out all his tariffs.

Speaker 2 So, I'm looking forward to your assessment of the significance of the Great Depression to our history. So, go ahead.

Speaker 5 It's still debated. The Great Depression was that period, everybody, from Black Tuesday, the collapse of the American stock market in 1929,

Speaker 5 all the way through 1939,

Speaker 5 where you finally had a steady

Speaker 5 increase in GDP and lower unemployment. It really didn't happen, though, until 1941.
And you should remember that we had about 18% unemployment with the second mini-depression of 1938 and 1939.

Speaker 5 So the question is, why did this booming economy in the post-World War I era, the roaring 20s that we call it, why did it suddenly collapse?

Speaker 5 It's very interesting. It's relevant now because

Speaker 5 we're talking about tariffs, and there was a huge tariff,

Speaker 5 the Smooth-Hartley Act of 1930. But we noticed something.
The stock market collapsed in 1929, not 1930, and that didn't get really going going to 1931.

Speaker 5 As I said earlier to Sammy, Milton Friedman never thought, as most economists don't think, that the tariffs were the main contribution. So what caused this panic?

Speaker 5 One of the problems was

Speaker 5 that the stock market was not regulated, and there was this boom, and the actual productive capacity and profits in real dollars of companies that were highly valued through speculation,

Speaker 5 they were not earning the types of returns that justified the market. And people started to see that.
Now, why did they,

Speaker 5 what were the structural things that were happening? In the 1920s,

Speaker 5 horses, I think my grandfather told me that he stopped using horses in the early 20s on this ranch.

Speaker 5 But his point was half of his 135 acres was devoted to pasture to feed the so-called Newman Newman tractors. Once he got, I think his first tractor was a Ford

Speaker 5 Fordson, I think they called it. And

Speaker 5 he went to heaven when they made the

Speaker 5 Model 9,

Speaker 5 8. It was called a 9N.
It didn't have overhead valves, but it did have a PTO shaft. My point is that once that happened, he brought all of his land in production.

Speaker 5 And that happened all over the United States.

Speaker 5 And it happened in industry, too, with electrification. So, when you started to get mass electrification in the 20s, at the end of World War I,

Speaker 5 you started to get enormous increases in assembly line production, and you started to get enormous increases in food production, because you almost got a 40% increase in aeritable land, because they were not.

Speaker 5 it wasn't being used to create the power to cultivate. That was now replaced by the internal combustion engine.
So, you were creating a lot of product.

Speaker 5 At the same time,

Speaker 5 there was this Ponzi scheme where the Versailles Treaty said that Germans had to pay reparations.

Speaker 5 The Weimar government was under pressure, so it was almost the equivalent of about a half a trillion dollars today, and they were supposed to be paid in gold.

Speaker 5 or at least marks that were backed by sufficient gold reserves. And they quickly started to inflate the currencies to pay back France and Britain, but primarily France.

Speaker 5 So the German economy then suffered hyperinflation, started to tank. The Allies who had borrowed billions of dollars from us in 1914, 1915, 1916 were not able to pay us back.

Speaker 5 So what we did, partly rectified and

Speaker 5 exacerbated under the Dawes plan, we started loaning massive billions of dollars of outflows to Germany so Germany could pay France and Britain so they could pay us back our reparations.

Speaker 5 And they, what we were doing is we were putting investment in to the German economy that wasn't creating goods and services or new factories or new jobs. And we were doing the same thing.

Speaker 5 They were paying Britain reparations. And they were not really using that to rectify the losses they had or convert their factories into productive peace, they were paying us.

Speaker 5 So, this money was coming in

Speaker 5 and the stock market was going crazy. And they looked at increased,

Speaker 5 I mean, wouldn't you want to have a booming stock market and start speculating when all of a sudden there's billions of dollars coming in on borrowed money from the French and the British to pay us what they had borrowed at the early years?

Speaker 5 And then all of a sudden, you look at agriculture and manufacturing, and they're producing all this goods and services.

Speaker 5 And once the stock market started to collapse in big time,

Speaker 5 and then people's banks started to fail, people started to hoard money. I mean, one out of every five banks failed.

Speaker 5 And so they took money out of circulation. And then people, at the moment they had this enormous productive increase in the 20s,

Speaker 5 there was no purchasing power because everybody was freaked out. They started taking their money out of the bank.

Speaker 5 The stocks were wiped out because of the dramatic thing. The British couldn't pay us back.
The French couldn't pay us back. And it was a monetary

Speaker 5 problem.

Speaker 5 And we were on the gold standard. And the gold standard is fine if you're in prosperity.
But when you have no money, you need to increase the supply of money.

Speaker 5 And that was contrary to classical economics. Keynes was right

Speaker 5 for a brief period that you needed to increase the money supply because there were billions of U.S. dollars that were in people's socks under their mattress.

Speaker 5 They were just terrified to spend it because they didn't know if they'd have a job and they didn't want to put it in the stock market and they didn't trust the bank. So, what do you do?

Speaker 5 You take it out of circulation and you pile it. Not that they had that much money.
And then the debts were called in. The more the debts were called in, the more you put you reload.

Speaker 5 You took people 25% unemployment. it was just a circular at some and then in 1933 after the third year of this

Speaker 5 getting into the fourth we get the new deal and what did the new deal do it started to regulate the economy and it's the national recovery act which was declared unconstitutional the agricultural adjustment act they started to make work civilian some of it was good but it wasn't market-based the government is not as wise as the market and they started restricting profit profit-making and controlling the economy.

Speaker 5 At this time, by 1935 and 1996, we had some increases in GDP, but when you look at the other countries, and this is the irony about it, the totalitarian, fascist, horrific countries like Japan, like Germany, like Italy, were command economies.

Speaker 5 And one of the things that, and remember, they had the word socialism, national socialism. Italian fascism was a socialist concept.
Same thing with the Japanese militarists.

Speaker 5 So what they started to do were massive public works program, trains, train stations, public buildings in Germany and Italy, autobongs. And then

Speaker 5 Japan started building huge port facilities and they started to rearm. And they started to expand their market economies by printing, by expanding their monetary base.

Speaker 5 And for, I mean, it had to be paid back, but for that period it was stimulus. We didn't do that.

Speaker 5 And that cycle of too much production, too little money in circulation, 25%, it just kept going and going.

Speaker 5 And no matter what Roosevelt did, he made it worse because he kept trying to control the natural yin and yang of the market, which would have adjusted.

Speaker 5 And so by 1938, we had about 17% unemployment, 18%. I think in some states it was up to 20%.

Speaker 5 And then he said something quite unique. He said,

Speaker 5 we're going to have Dr. War War and not Dr.
New Deal get us out of this. So then we went up, suddenly printed money up to 123%,

Speaker 5 130%, bigger than now, 140% of GDP.

Speaker 5 So a country that could not afford an army the size of Portugal in four years years was equipping people,

Speaker 5 12.2 million people in uniform. And when they went overseas, people could not believe it.
The Australians or the British would say, oh my gosh, those Americans have the most beautiful uniforms.

Speaker 5 They have chocolate bars. They have lucky strikes.
They have camel cigarettes. They have condoms.
They have everything.

Speaker 5 And

Speaker 5 we don't have anything. So it was a massive and then everybody said when the war was over, the music would would cut out and we'd be back in the Depression.

Speaker 5 It didn't happen because we kept expanding production and we changed over from war production and then the Cold War, and we stayed in the.

Speaker 5 But

Speaker 5 it was preventable had

Speaker 5 the Federal Reserve loosened up on the money supply. I don't know if it would have been wise to suddenly get off the gold standard.

Speaker 5 We did eventually, but to get to start to nurse ourselves off it and allow money not to be all money connected with the amount of gold we had. I mean, it's an inflationary process we have today, but

Speaker 5 the main problem was coming out of World War I with these payments

Speaker 5 that were just circulating between the defeated Germans and Austrians,

Speaker 5 the

Speaker 5 reparations that were not going to them, they were being paid off in funny money, and then our desire. I think Coolidge said they hired the money, didn't they? Meaning France,

Speaker 5 especially France, but also Britain, especially Britain, and also France, had to pay us back.

Speaker 5 But nobody was using that money to invest, is what I'm saying.

Speaker 5 And that fueled the stock market price. And then the stock market looked at things and they looked at, oh my gosh, look at cotton now.

Speaker 5 We went from a half a bale an acre to three barrels with machinery and nitrogen fertilizers. And, oh my gosh, everything.

Speaker 5 And they they looked at the arable, and these farmers were buying machinery, and they were taking huge debt. I know my grandfather said to me, I never borrowed a dime in my life, but

Speaker 5 I had no choice. If I could get two 9N tractors, you know, for

Speaker 5 $800 each and go to the bank and borrow it, then I could get double my production.

Speaker 5 But if the price of raisins went from World War I, $175, to

Speaker 5 $32,

Speaker 5 and they used it, finally, the government went in and bought it from them. And they laced it with brandy and sold it for cattle feed.

Speaker 5 And then the government came in and controlled it. You couldn't take your raisins and sell them yourself.
The government owned it. And that commodities.
And those were these

Speaker 5 allotments. You couldn't plant this much of cotton or this much of wheat.
They had allotments on everything. So it strangled the free market as a reaction.

Speaker 5 So the strangulation of the free market and the constriction of the money supply, and then the methods to address that made it worse.

Speaker 5 And then the international scene, and it was tragic because one of the results of the Great Depression, besides that ruined lives, and people died, and starvation, and horrible things happened, was the rise of Italy, Japan,

Speaker 5 and Germany. And they said to us, the democracies, we solved the Great Depression before you did.
And we did public works and we borrowed and we rearmed.

Speaker 5 And so in the sh salons of New York, Mussolini was a cult hero. All these very wealthy New Yorkers said, wow, the douche duce, he's got

Speaker 5 the trains run on time, he's got sophisticated telecommunication stations, he's got

Speaker 5 air service between cities and Italy. And they looked at Germany and they said, there's not a freeway in the United States like the Autobahn.
So they started to

Speaker 5 not look at what those fascist fascist countries were really like.

Speaker 5 They just saw that they had somehow survived the depression greater than, and that made us unaware of what they were like and what our rendezvous would be like.

Speaker 5 And they got ahead of us, way ahead of us, especially Japan.

Speaker 2 Well, your discussion has raised one observation and then one question, which might be too big for right now.

Speaker 2 But it looks like the United States has expected to take an imbalance in their economic relationship with other nations in the world from post-World War I.

Speaker 2 We tend to just always put it as post-World War II, the U.S. becomes the big economic power, therefore, it had to take the hit when it came to trade imbalances, for example.

Speaker 2 But it seems to me that from the discussion of the Great Depression in the United States or what you said earlier,

Speaker 2 the United States has really done that even post-World War I.

Speaker 5 Number one. They stepped in with a Dawes plan, and they said to the Germans,

Speaker 5 stop printing money to pay the Allies,

Speaker 5 because the Allies can't pay us. So we will loan you money and then you should invest that money in productive and create real wealth and pay the Allies and they can pay us.

Speaker 5 It didn't quite work out that way.

Speaker 5 But we were trying to intervene

Speaker 5 and solve these problems. And finally we said, we're so wealthy now with the Roaring 20s and we're so sick of World War I.

Speaker 5 And by 1933 and 1994 the mood in America was, hey, we got 117,000 of our kids killed over there. We sent 2 million people over there, and they're at it again.
Hitler, Mussolini, now the Japanese.

Speaker 5 We're sick of them. And

Speaker 5 that delayed our rearmament. And

Speaker 5 that was tragic.

Speaker 2 And the second one is a question. So

Speaker 2 when you said that government is not as wise as the free market, you sound like a Milton Friedman free market advocate.

Speaker 2 Yet in our earlier segment we talked about tariffs and you're defending Donald Trump's tariffs.

Speaker 5 So make sense of that for me.

Speaker 5 Well, the fallacy, with all due respect, is yours.

Speaker 5 Apparently you have to remember the adjectives I used. I said

Speaker 5 wise, not ethical, are nice. There's an iron law out there.
It has nothing to do with us.

Speaker 5 It's kind of like the political science theory of the iron law of oligarchy.

Speaker 5 No matter what kind of democracy you create or constitutionally, there's going to be a select group of people who are more talented or more money or whatever, and they're going to rise and run the thing.

Speaker 5 Okay, I don't know if you believe that or not. But there's kind of an iron law.
The hidden hand is what they use. And

Speaker 5 you can't pick,

Speaker 5 there's millions of variables that make a business succeed or failure. So when Pete Buttigig thinks he's going to spend $10 billion

Speaker 5 to make charging stations,

Speaker 5 he thinks he's smarter than all of these local people who build charging stations. They know the traffic patterns, the type of charging station.
He thinks he can just mandate that.

Speaker 5 Well, he didn't build any. We just blew that $10 billion.

Speaker 5 But because he didn't just say,

Speaker 5 Here is a grant for the state of California to disperse, and it's going to be competitive building, and we're going to monitor it and see which particular

Speaker 5 contractor can build so many stations in such a time for such a cost.

Speaker 5 It was overly controlled. And even that is not efficient.

Speaker 5 And so, what I'm saying is

Speaker 5 there is a hidden hand.

Speaker 5 And it's very efficient. Don't get me wrong.
It's very efficient for the whole world to have something guy in Vietnam produce something we want and somebody will produce something they want.

Speaker 5 But the problem is

Speaker 5 that efficiency is not necessarily

Speaker 5 equated to fairness. I'm not a socialist.
I'm just saying that, I'll take an example.

Speaker 5 We have the seventh highest per capita income in the world, but we've got massive numbers of people that can't buy homes because that per capita reflects the total wealth of the country divided by the number of people in it.

Speaker 5 But it's not a good indicator of the general welfare of everybody. It's a good indicator of how dynamic the U.S.
economy is, as is GDP.

Speaker 5 But when you have vast numbers of the people of the population who can't do certain things in a sophisticated society, like get married at an earlier age, have children, buy a home, not take drugs, not commit crime, all that.

Speaker 5 Not that you can, that's part of human nature, but you can mitigate that by having affordable housing. And I'll give you an example of what, in 1971, I graduated from this town.

Speaker 5 And I mentioned this before, but almost everybody in my class did not go to a four-year college. They were electricians, they were insurance salesmen, they were assemblers, they were manufacturers.

Speaker 5 There were about 10 of those plants in this little tiny town.

Speaker 5 If I went down the main drag of Reedley, California, there were packing house after packing house after, they're all shut down now.

Speaker 5 And everybody was working there, and these people were buying homes for $18,000, $20,000, FHA homes, and they were getting married in their 20. When I came back

Speaker 5 from graduate school at 25, everybody called me the old man, and you're not married?

Speaker 5 You're not married and you're 25 years old? And I thought, well, I got a PhD. I don't have any money.
What would I do?

Speaker 5 you know I can't but so that was a very healthy thing in that country and that reflects things about the country on crime on safety on tradition on values it was a very public spirited time I can tell you that

Speaker 5 and I would make a some prognosis if I was walking in San Francisco I don't know, in 1955,

Speaker 5 and I lost my wallet, I would have a much better chance of somebody turning into police than I would today. I'm sorry, I would.

Speaker 5 If I was in Selma, California, and I was driving in a parking lot, there would be very little chance that somebody would intentionally try to hit my car and then file a fraudulent insurance claim.

Speaker 5 Because there was a shame culture, it was a close-knit. People were roughly pretty prosperous.
I'm not saying they were as

Speaker 5 I mean, they didn't have cheap Chinese things and the internet and all that. I'm not talking about technology, but it was very different.

Speaker 5 It was the idea that we're building homes and we're going to build,

Speaker 5 you know, in 2014, we voted in California 7.5, it was kind of an ossified idea, an old-fashioned idea to build dams and make water, like our grandparents did.

Speaker 5 We built, we authorized $7.5 billion to make three big reservoirs, and Gavin Newsom didn't even do it. Nobody would have ever got away with that in the 50s or 60s.

Speaker 5 Instead, he took the money, he took a quarter billion dollars of the money and blew up dams. For what?

Speaker 5 Well, that was new

Speaker 5 postmodern,

Speaker 5 but

Speaker 5 what I'm getting at is you have to have a moral economy and an efficient capitalist economy, and they're not antithetical. You can channel it.

Speaker 5 If you restrict it too much like Europe does, and you get socialism and inefficiency. So there's 500 million people in the EU, and they produce about 20 trillion dollars.

Speaker 5 $20 trillion of goods and services per year. That's their GDP.
There's 340 million in the United States. We produce about 30 trillion, 33% more than the EU.

Speaker 5 And we have 60% of the population. And that's because we're far more efficient, far more efficient.
But we might do a little bit more of ensuring that people have an ⁇

Speaker 5 that we can encourage home builders to build homes. We don't have to be socialists like they are.

Speaker 5 But if we just said we're not going to regulate the thing that's that's really destroyed this country is this bi-coastal elite who is very, very wealthy through globalization when they had their 7 billion person markets.

Speaker 5 If you were a lawyer, a media person, an academic, an investor, a financial analyst, you name it, a high-tech person, you got a whole new 7 billion people buying your products.

Speaker 5 The muscular people, we just wrote them off. They were losers.
And you can't do that. And so

Speaker 5 I'm not trying to romanticize the middle class. I grew up with the middle classes and

Speaker 5 I think if you look at a map of California, Tulare County, Kings County, and southwest Fresno County, and I live at the intersection of all three, is the poorest area

Speaker 5 in California and about where Appalachia is. I think this community has about a $16,000 per capita income.

Speaker 5 So I'm I'm not trying to, but I can tell you that the morality of the people that I see here, in many ways, it's superior to the people that I see who are very affluent in Silicon Valley.

Speaker 5 And so you have to try to invest in the working classes, always,

Speaker 5 the majority.

Speaker 2 So the government should play a role, but a necessarily smaller role for particular

Speaker 5 someone who's a business. It can be a deregulatory war.
It can be an incentive, capitalist role.

Speaker 5 It can say to this, if Gavin Newsom said this, any developer who creates 1,000 homes, 2,500 square feet, per year,

Speaker 5 I will waive the requirement that he has to have a solar panel and this and this, not things that involve the structure. And I will promise you you can get a permit in a year and a half.
That's it.

Speaker 5 Or if you could give incentives, or I will not charge, if you build a new

Speaker 5 for the first 10 years, you will have a 50% reduction in your property tax. Anything like that, you can work with the market to give incentivize.
But they're doing the opposite.

Speaker 5 They're de-incentivizing the market.

Speaker 5 They're saying if you do, if you build a house, you better take a camera guy and pay him $20,000 to film every aspect of your building because under our judicial system, some guy is going to sue you and say you missed three

Speaker 5 studs, and then we're going to hold you liable. You know what I'm saying? And so we're so over-regulated.

Speaker 5 And California is a huge state.

Speaker 5 If you look at the

Speaker 5 population per square mile, it's not, compared to other countries, it's huge. I mean,

Speaker 5 it's about the size and total area of Japan, and we don't have 130 million people. We have 41 million.
It's shrinking. So we have a lot of space.

Speaker 5 We could really create more dams and reservoirs and fix our freeways and get more

Speaker 5 better airports and more housing. And we don't have to build, you know, European style high-rises with a little green grass circle around it and everybody gets on the high-speed rail to work.

Speaker 5 We can give people

Speaker 5 five or six homes per acre and give them a backyard and stuff.

Speaker 2 And the government's role is to play the role of making that an easier process to the extent, but not taking over as the capitalists or the government.

Speaker 5 You have to have regulations or otherwise.

Speaker 5 There's a housing track that was built in the late 50s, early in this town.

Speaker 5 And if you go look at those houses, and I know people who've lived there, so I've been in them, they have like one-quarter-inch glass still. There were no regulations, and they're slums.

Speaker 5 We called it Splinter Village when I was in high school, Splinter Village. It was kind of fake

Speaker 5 Frank Lloyd Wright style, and

Speaker 5 they all collapse. So you have to have regulations, but you have to be reasonable.
And the problem is that our regulations are boutique regulations.

Speaker 5 They come out of the mind of very affluent people on the coast who have everything they need. They're very wealthy, and they think, I'd like to live to 100 years.
I want beautiful air.

Speaker 5 I don't want any. I want to look out at California as perfectly scenic and pristine.
I have to, because they have that laxity to do that.

Speaker 5 And then they start charging electricity rates and gas rates and taxes that nobody could afford except them. And

Speaker 5 that's what's destroying the Democratic Party, that it's the party of the professional class and the billionaire class. And they want this idealistic, top-down vision.

Speaker 5 The vision of what Tom Sowell called the vision of the anointed.

Speaker 5 And it has nothing to do with getting up in the morning in Fowler, California and saying, can I fill my gas tank at 470? I just got back from Michigan when I got this flu a month ago. Gas was 305.

Speaker 5 We have more gas in California, natural gas and oil than Michigan does. I just went by, it was 470.

Speaker 5 There's no reason for that. There's no reason that

Speaker 5 a guy named Joe Gomez, who's a lineman for the power company, should have to pay 40 cents per kilowatt. It's just ridiculous.

Speaker 2 Well, Victor, let's take a break and then we'll come back and talk a little bit about Gavin Newsom and the Democratic Party of Virginia.

Speaker 2 Yeah, speaking of California, I know you went into it, but we'll talk.

Speaker 2 Welcome back to the Victor Davis-Hanson Show. So, Victor, I know that you wanted to say

Speaker 2 a little bit about Gavin Newsome, who's been in the news in an effort to

Speaker 2 look like he's moving to the center so that he could potentially run for a presidential race. And also, just the Democrats, are they offering any viable agenda? And so, go ahead.

Speaker 5 No, I mean,

Speaker 5 he said he was going to have the edgiest podcast around. He was going to engage people, confront people.

Speaker 5 So, we've had, let's see, we've had Michael Savage, Savage Nation, have Charlie Hurt,

Speaker 5 we've had Bill Maher,

Speaker 5 and we have another conservative too.

Speaker 5 And it's been going on about 60 days.

Speaker 5 Has he had any new initiative that says

Speaker 5 we're going to build a reservoir with the 7.5? No.

Speaker 5 Has he said we're not going to blow up those two dams in Northern California? After I did four already? No.

Speaker 5 Has he said I have a plan to

Speaker 5 raise the $8 billion that I gave to Medi-Cal. Is he canceled the reparations commission that he created?

Speaker 5 4% of the population of California is African American. It was a free state.
It never had a slave in its mind. 27% of the population were not born here.

Speaker 5 And he's creating a reparations when he's $76 billion started the fiscal year in debt. No.

Speaker 5 As he said, oh my gosh,

Speaker 5 California has one of the lowest home ownership rates. It's 55%.

Speaker 5 The average nationwide is 62. I've got to start getting initiative to incentivize developers building.
No.

Speaker 5 As he said,

Speaker 5 oh my gosh, I've blown 20 billion on high-speed rail and the 99 doesn't have six lanes, three in each direction, nor does

Speaker 5 the I-5 and the Federal Highway, nor does

Speaker 5 101. And people are being killed.
And per miles driven, the 101 and the 99 are among the most dangerous places in the United States to drive. I better fix them.

Speaker 5 I better get six lanes before I build one more inch of high-speed rail boondoggle. Stonehenge.
No. He hasn't done anything.

Speaker 5 We passed this repeal of the $950

Speaker 5 theft. He hasn't even enforced it.

Speaker 5 They don't enforce it. You can go to San Francisco and walk through and shoplift.
They're not going to do anything to you.

Speaker 5 There's not a new team that's going to indict you, convict you, and put you in jail for grand theft.

Speaker 5 He hasn't done anything because

Speaker 5 he just looked around and he said this. This is what he's doing.

Speaker 5 Okay,

Speaker 5 29% Democratic rating, 27%

Speaker 5 NBC, CNN says 29, then NBC said 27. Now it's 23%.

Speaker 5 So then he got, I better talk tough. We have a toxic brand.

Speaker 5 That's what he said, remember?

Speaker 5 So then he thought, okay,

Speaker 5 but I created all this mess. But I'll just reinvent myself, but I won't ever reinvent myself and go back and do things to correct the disasters that I caused.
But

Speaker 5 how are we doing this? Is the party following the lead of Fetterman? No.

Speaker 5 Oh, it's called street art.

Speaker 5 AOC and Bernie Sanders, she does her little jiggle, and then, but Bernie gets that awful accent and starts,

Speaker 5 yes we agree

Speaker 5 you know what I mean and then we look at oh we can say SHIT if we're senators we're gonna stop this S-H we're gonna do this to Trump and then we can have the kickback

Speaker 5 or we can get Al Green I can take my cane you're not gonna do that Donald Trump and get escorted out and then we can have Corey Booker 25 hours I hate Donald Trump I despise Donald Trump he's a monster no he's addicted no he's a for 25 The only thing that was impressive about that, he didn't urinate or defecate.

Speaker 5 I don't know how he did it for 25. He must have taken some type of constipatory drug or something.
I don't know how he did it or not drink water. Maybe he didn't get a kidney stone.
I don't know.

Speaker 5 But he - that was a complete waste of time.

Speaker 5 It was just a buffoon. So then Gavin looks around and says, well, Corey's, these people all have their theater art.

Speaker 5 We've got the House of Representatives inspecting the border to see if any illegal alien is being clubbed or whipped. So we can say Donald Trump is put.
Where are those cages that Obama built?

Speaker 5 And they say, well, they're empty now. There's nobody.
Well, show me a cage. I've got to say that Donald Trump is worse than Auschwitz, like Michael Hayden tweeted, remember?

Speaker 5 So that's what they're doing. And Gavin feels left out.
So now I'm going to have a hard-hitting Joe Rogan type of podcast. No, you're not.
And then he's going to do this. Have you watched him?

Speaker 5 It's really weird, his mannerism. He kind of goes like this.

Speaker 5 You know, like this?

Speaker 2 Yeah, he has a lot of

Speaker 2 hand movements when he does

Speaker 5 in the mountains of Greece

Speaker 5 buying a rug for my mother, you know what I mean? A handmade rug up in Andritsina, or maybe a Rockova, and the guy would do this, and this, and point it out like this, very

Speaker 5 figuratively with their hands.

Speaker 2 Dramatic, it tries to add drama.

Speaker 5 The only difference was they were genuine and he's artificial.

Speaker 5 So it's a joke. And Donald Trump is like,

Speaker 5 he's like the proverbial D9 cat. I mean, he just, there's all these obstacles.
He's going boom, boom, boom, boom. And they throw mud at him.
They throw stuff at him.

Speaker 5 And boom, boom, boom, boom, boom, boom, boom. And then he adds insult to injury when he says, he doesn't say like this.

Speaker 5 which I would do and I'd fail because I don't have his political skills, but I'd say,

Speaker 5 I didn't ask to do this, but if I don't do it, who's going to do it? In other words, you know, the tragic sense. He says, It's Liberation Day.

Speaker 5 It's a day that'll be the most famous day in American history. We're liberating.
You're going to love it.

Speaker 5 Gonna be a little tough, but it's like a showman, you know, and they, and then their heads even explode what's left of them. And the D9 just go, boom, boom, boom, boom, boom.

Speaker 5 And he doesn't care. He thinks, man, I'm only here one term.

Speaker 5 How do I get back at those people for all the things they did to me? You know, Fanny Willis.

Speaker 5 I know what I'll do this week. I'll say I'm going to invade Panama.
Oh, my God. He's a 19th-century teddy.

Speaker 5 Well, that didn't last long. Maybe I'll say that I'll make Canada the 51st state.
Oh, my God.

Speaker 5 How about invading Greenland? I got a better idea. I'm going to run for a third term and violate the constability.
He's not going to do any of that, but he wants to make them go insane.

Speaker 5 And that's what they're doing and you know what i wouldn't do that and if i was president right now the democrats would probably have a 40 percent he's president he's got them down to 23 because he understands their mentality and what makes them go nuts and when they go nuts they show who they are and they're absolutely blank blank crazy And they have no agenda.

Speaker 2 They have nothing to offer that the American people want.

Speaker 5 They're like the Wall Street Journal and they're like

Speaker 5 the libertarian. I just want to hear what they want to say.
I mean, I was surprised by Rand Paul. I know he's libertarian, but he voted against Trump on the tariff.

Speaker 5 So I would just like him, and then I would like Chuck Schumer and Nancy Pelosi to say, look,

Speaker 5 this is the,

Speaker 5 to be fair to Rand Paul, he's good on the budget, but let's just say Nancy and

Speaker 5 Hakeem Jeffries and all of them just say, contract for America, debt, 37. Here is how we reduce the debt to 30 over the next next decade, then 20, and then in 2050 we're balanced.

Speaker 5 Here's how we get the deficit from 1.7 down.

Speaker 5 Besides, and we already have almost 40% in some states like California, it's over 50%.

Speaker 5 So the idea you're going to raise taxes to 60 or 70 is not going to be a solution. So then this is where Social Security is not funded.
This is our plan. This is our plan to close the border.

Speaker 5 This is our plan to deal with the 500,000 criminals. They don't do it.
You know why? This is because their solutions pull 20%.

Speaker 5 Because they're ideologue revolutionaries. They're Jacobins, French revolutionaries.
And they say, you know what?

Speaker 5 If I say that I'm delighted that we let in 12 million new constituents, yeah, we have a few bad apples. There are always a few bad, just a half a million.

Speaker 5 There's going to be some people killed, raped, maimed for life. But that's, you know, you make an omelette, you break an egg.
That's their attitude. And you know what?

Speaker 5 Yeah, Afghanistan, that was humiliation, but it's over. 50 billion, 60 billion, million, who cares? It's Taliban, they're terrorists anyway.

Speaker 5 They needed a new rifle, a new helicopter. That's their attitude.
They don't care. And they can't say that.
Fracking? I don't want fracking. I don't want fossil fuels.
Well, the Americans do.

Speaker 5 Well, I can't say anything. I can't say that I'd like to make mandatory EVs.

Speaker 5 That's what they did.

Speaker 5 They had all these rules until

Speaker 5 Elon.

Speaker 5 Elon's kind of a sacrificial tragic hero. His Tesla's on the altar of fossil fuels.

Speaker 5 By trying to destroy the brand of Tesla, they're empowering the fossil fuel

Speaker 5 kind of nice.

Speaker 5 Maybe Ram 1500 trucks going to say, oh my God, we got rid of that beautiful Hemi V8.

Speaker 5 Just when it was getting 19 or 20 in the let's bring it back because they destroyed Elon and nobody wants to Tesla, so we're all going to buy Hemis.

Speaker 5 Or maybe Tahoe and Suburbans will come back with a VA.

Speaker 2 I think you're dreaming, Victor. I think that they'd go.
The idea is we'll get rid of Tesla and they'll go to the EVs that Ford.

Speaker 5 We have about 8% of the market for them. Nobody wants those things.
They're no good.

Speaker 2 Yeah, they're together.

Speaker 5 That's the funny thing.

Speaker 5 The best thing he ever said was

Speaker 5 he said something to the effect that

Speaker 5 they asked him how he did it, and he said something to the effect, and I did it with Asperger's too. I'm the first guy I do with Asperger's

Speaker 5 because he is a little communicatively distant.

Speaker 5 Everything he touches, I don't know how he does it. When you talk to him, I mean, his personal life is a mess.
He's got all these children, he's got these girlfriends, wives, but

Speaker 5 and he tweets some crazy thing. But there is an authentic American.
He's kind of like Henry Ford was kind of weird, you know, and so was Henry Kaiser, and so was

Speaker 5 Alexander Graham Bell.

Speaker 5 Edison was really weird, and I think he's just, he's an authentic Renaissance genius, and he knows how, not only as an engineer, he has the idea, but he knows how to get the top people.

Speaker 5 When they did Brett Baer's interview, and he had those Doge people,

Speaker 5 Remember it was Big Balls, is that his name? B-A-L-S? I thought it was going to be a bunch of little nerds. And then I looked at those guys, and they were like 45, 50, and they were

Speaker 5 head of this company, head of that. And they reminded me of a half courtroom lawyer, half sophisticated professor, half engineer.
They were brilliant. And they weren't chainsaw.

Speaker 5 They were sober, judicious, methodical. And they gave a brilliant tutorial on what they're doing.
I wish

Speaker 5 that could be published. That's the best thing Elon ever did.
Yeah.

Speaker 2 It seemed like a room full of mathematician,

Speaker 2 mathematical geniuses. They're like, no problem.

Speaker 5 I mean, I don't, people say, well, why would you have any empathy for the witchest man in the world? But I do.

Speaker 5 When I see him talking and he seems bewildered when he talks about what they're doing to Tesla, it's kind of like

Speaker 5 they're destroying. I used to be, I provided, they all loved me.
They're destroying this product, this brand that they all want. It's the best car of any EV in the world.

Speaker 5 It has no emissions. I mean, you can argue about the power generation and where it comes from, but

Speaker 5 why are they doing this? Well, they hate you, Elon. Well, why do they hate you? Because you're trying to balance the budget and cutting.
And you endorse

Speaker 5 Satan, Lucifer, the Prince of Darkness, Donald Trump. They're going to hate you for the rest of your life, no matter what you do.
Well, why would they do that? It's so bizarre. They're terrorists.

Speaker 5 Nobody's arresting them. No, they're in on it.

Speaker 5 When AOC says this is take

Speaker 5 when

Speaker 5 Jasmine Crockett says we're going to take Elon down she means it and then that filters out to the talking points and

Speaker 5 the eight to five demonstration hours they somebody is paying them a lot of money in some cases a lot

Speaker 5 talking points but the Democratic Party and the left is behind it all they're the orchestrators

Speaker 5 Just like during the 2020 riots, you always get a fact checker. Have you noticed that? Camilla Harris can say, and these riots are not going to stop, nor should they stop.
They're going to keep going.

Speaker 5 They're going to keep going. They're going to go all the way into election day.
She didn't say riots, but demonstration. And they shouldn't stop.

Speaker 5 And then you see all the fire in the background destruction. Then

Speaker 5 all of the facts, polyfact, you know, and all of these fact checkers.

Speaker 5 Context was lacking. She didn't mean this.
She was calling for peaceful protein. And then you have Donald Trump.
I want everybody to go to the Capitol and

Speaker 5 assemble patriotically and peacefully. This is a code name for rioting.
That's what the fact-checkers did.

Speaker 5 So

Speaker 5 it's crazy. It's just the way it is.

Speaker 2 All right, Victor, we're at the end of the show. So I wanted to read a comment from Ashley Kraft, who is responding on your website to your article, What Trump Needs to Do.

Speaker 2 And I have a feeling, based on what she says, she's responding to the

Speaker 2 suggestion that he have a compassionate voice. And she says, thank you for your wise comments.
President Trump has shown this side of himself before.

Speaker 2 As I remember, the disastrous debate with Biden last summer that ended that campaign, it wasn't just

Speaker 2 that Biden's condition was out there for all to see, but many times President Trump looked at him with sympathy, and it worked really well.

Speaker 2 That being said, one of Trump's greatest assets, in my opinion, is his steady authenticity. If and when he authentically feels like expressing that tragic tone, he will.
I like that.

Speaker 5 I don't know if I would say it was quite sympathy. If you're Biden and you say the following,

Speaker 5 and then Trump goes like this.

Speaker 5 Did anybody, I don't know how to say, I can't, does anybody know what he said?

Speaker 5 I guess that's sympathetic. The most sympathetic thing, I keep going that, I know your listeners are going to get sick, but

Speaker 5 he said when that couple came up, you're not ordinary. No, no, you're not ordinary.
And then when the wife, the spouse of the person who said that, said,

Speaker 5 you took a bullet for us. Thank you.
And he said, I guess I did.

Speaker 5 Yeah,

Speaker 5 I did.

Speaker 5 So

Speaker 5 there's,

Speaker 5 I'm writing this book, and one of the things I'm not doing is going to interview him or go, just want to look at, you know, dispassionately and read everything I can and watch everything, every video.

Speaker 5 But I've been learning that

Speaker 5 he's much more complex than his enemies make it out. You know what I mean?

Speaker 5 And

Speaker 5 he's very affable. And

Speaker 5 anyway,

Speaker 5 the story's not written. We'll see what's going to happen.
He's got four years. He's got to get through the midterms.

Speaker 5 Or they're going to impeach him and subpoena everybody.

Speaker 5 And everybody's going to have to get - that's going to be the ⁇ that's going to make the Wisconsin race look like child's play, the midterm.

Speaker 5 And the low-propensity voters that have joined the Republicans, they're going to have to get out and vote and vote

Speaker 5 and vote. They've got to get out because it's going to be a ⁇ oh, I don't even want to go through it.
It's going to be.

Speaker 2 It's going to be very important for

Speaker 5 vocabulary, too, about Donald Trump.

Speaker 5 The classical definition of a recession is 1.5 negative growth for two quarters. When Joe Biden had that, remember that?

Speaker 5 And they said, that's not a recession. That was an archaic system of classification.
The reason I'm saying that, I just saw that

Speaker 5 on a left-wing site said,

Speaker 5 once we get to 1.5, two consecutive quarters, he's doomed us. It'll be a full-fledged recession.
And I thought, no, it won't. You've told us that it didn't exist anymore.
That was what Biden.

Speaker 5 So the language will change. And we've got a lot to look forward to, but

Speaker 5 at least someone finally in God's year 2025 said, What can't go on won't go on. And we were headed to the

Speaker 5 third tier of civilization if we were lucky in debt and disunity and no borders.

Speaker 5 And now

Speaker 5 we have a chance.

Speaker 2 Well, thank you, Victor, for all your wisdom today. And thanks to our reader, Ashley Kraft, for her comment.
And thanks to you, our audience, for choosing to join us this weekend.

Speaker 5 Thank you, everybody, for watching. Much appreciated.
And viewing, too. Yeah.

Speaker 2 This is Sammy Wink and Victor Davis-Hansen, and we're signing off.