Josh Barro and Jonathan V. Last: The Patriotic Cowboys Wrecking Our Economy

The Bulwark Daily

The episode explores the intersection of economic instability and political volatility in the United States. Hosts discuss Trump's declining

Key takeaways

• Donald Trump's approval rating has fallen below the 'Bush line,' reaching 31% amid economic frustration.
• Global interest rates are rising due to massive government budget deficits and intense capital competition from AI firms.
• The cost of moving oil from the Gulf East to Asia has surged 11-fold, from $3 to $34 per barrel, due to geopolitical instability.
• A bipartisan permitting reform deal is emerging to accelerate both renewable energy transmission and fossil fuel pipelines.
• Critics argue Pete Hegseth's 'patriotic cowboy' rhetoric ignores the technological reality of modern drone warfare.

Main topics

• Trump approval and economic sentiment
• Global interest rates and AI investment
• Energy markets and oil shipping costs

Notable quotes

The ideological clowns are out. The patriotic cowboys are in.

Conclusion

The episode serves as a sobering analysis of how economic shifts and p

Transcript preview

Speaker 2 (0:00) Hey everybody, Adventurous Podcast Booking on this Thursday. We had one of our besties going to be here, had a travel issue. We got my buddy Josh Barrow, who's on the pod today. We're doing some econ talk. We're going to get into his terrible takes about daylight savings time and other issues. But before we could do that, his internet on Fire Island just crapped out completely. Apparently the whole island is without internet. I don't know if this is a homophobic attack from... you know, the Iranians or the Trump administration or AI, but that's what happened there. And luckily JVL came in to save the day. So you have a half a pond with Josh Barrow and then some really high level dark JVL. And so I think it turned out great for everybody. So thanks for bearing with me. Stick around. Up next, Josh Barrow. Speaker 2 (1:00) Hello and welcome to the Bulldog Daily. I'm your host, Tim Miller. One note, yesterday I put in the show notes a link to the red district, red state Democrats that I think have a puncher's chance. And it was in JVL's Triad newsletter, which is always paywalled. And I kind of forgot, you know, some of you who aren't Bulldog Plus members, shame on you. You should join, but still wanted to see the candidates that you should support. So we've unpaywalled it. You can go check it out. The link to both lists. I did one in June or July and one yesterday. Both are in the show notes. All right. On today's show, he's a co-host of a couple of podcasts, One Serious Trouble with Ken White, a.k.a. Popat. The other one's called Central Air with Megan McArdle and my guy Ben Dreyfuss. He also writes on Substack at Very Serious. It's Josh Barrow with a very unserious new haircut. I Speaker 5 (1:46) don't think this is unserious at all. Well, actually, people keep asking me what crisis I'm experiencing. Speaker 2 (1:51) You Speaker 5 (1:52) bleached Speaker 2 (1:52) your hair. For the audio-only listeners, you bleached your hair like Bieber, kind of. I always Speaker 5 (1:59) wanted to be blonde and now I am. I'm just trying to be self Speaker 2 (2:02) -actualized. I don't know if that's right. Maybe you're not experiencing an acute crisis, Josh, but I think somewhere deep down. You're exploring something. You're dealing with a transition. You're kind of processing the linear nature of time in a way that is good. Speaker 5 (2:15) I feel great. You know, a friend of mine who had also bleached his hair when he saw that I did this, he goes, do you feel dumber yet? And I was like, you know, actually I do. It feels like a weight has been lifted from my shoulders. I'm getting to experience what. blondes get to experience of not being in charge. It's quite nice. Okay. We'll Speaker 2 (2:32) do a like count on this podcast versus the last time you were on when you were in brown hair and see how much has changed. I look forward to it. We're going to start with a little schadenfreude. You know, it's very rare that I open up Politico playbook in the morning and get a little nugget that makes me joyful these days. But, you know, I still have to read through the tip sheets. I want to know what's happening for the listeners out there. This little alert, this one, this one brought a smile across my face. One of Eric Schmidt's top aides, his general counsel, Ethan Harper, was supposed to leave his role tomorrow. to join the White House staff secretary's office, very prime office. But his transition is now in doubt, given his role in the Jack Smith gotcha gone wrong. Harper was the staffer standing behind Schmidt, holding up a board displaying the screenshots of the text messages. I got to tell you, that's nice. That's nice to see a little accountability in Washington for once. Speaker 5 (3:26) Yeah, I mean, you know, I assume that, you know, him being the one who held up the poster board, that that's somehow indicative of this, you know, being at least in part his fault. But it's interesting because the staff secretary's office, what the staff secretary does in the White House is supposed to be sort of controlling the flow of paper and information toward the president, which I don't know exactly how that works in the Trump White House, but it's exactly the sort of role where like. causing someone not to receive the embarrassing, incorrect document. Like that's, that's within the purview there. So it would make sense that they'd be like, maybe this is not the right guy for that role. Speaker 2 (3:57) If he, if he's here with that poster, it's pretty funny. I just feel bad Speaker 5 (4:01) for him. If he just ended up being the guy holding up the poster, like maybe it's somewhere else. He Speaker 2 (4:05) was the general counsel. Yeah. Why is the general counsel the poster holder? I don't know how that works. I never worked on the Hill, but he's the general counsel slash poster holder. You would assume that it would have been his purview. I guess it also goes to the point where even if they had it right, they had nothing. Right. Even if Jack Smith had happened to go to see Trey Young in the Atlanta Hawks game in 2024, that meant nothing. Speaker 5 (4:29) Yeah. I mean, it's like they then infer from that that Fonny Willis was also there at the game. Speaker 2 (4:34) Like, right. And that they were plotting together against Trump. I like they had nothing. Yeah. Speaker 5 (4:40) You know, if you, if you're having a secret meeting to plot against Trump, the thing you do is go to an extremely public arena to take in an NBA game. Speaker 2 (4:48) Yeah. It's like, yeah, just him and Nathan. They might've reviewed, I don't know. They might've reviewed the NBA league pass archive. Anyway, Ethan Harper, tough titties for you. Speaking of shot and footed, the Trump, this is an AP poll. It's a little bit of an outlier, but let's just tickle ourselves for a minute. The Trump approval rating has fallen below the Bush line, 31%, 69 % disapproved. Nice. On the economy, 26 % approved. Cost of living, 17%. On Iran, 28%. Trade, 38%. AI, 31%, which is down as well. I mean, even if this is off 10 points, this is bad. Speaker 5 (5:28) Well, did they poll about super intelligence? Maybe people like the way he's handling super intelligence. Speaker 2 (5:32) That's true. SI. Yeah. Yes. SI. Speaker 5 (5:35) Yeah. I mean, I feel like a lot of your listeners have been waiting for the shoe to drop about like, when will people finally realize that Trump is full of it, that he wasn't a good businessman, that he doesn't know about the economy. And for a long time, the voters have given Trump a lot of credit because the economy performed quite well for the first three years of his first administration. And then COVID. And now how many years was the first? Well, I mean, COVID is this like deus ex machina that I think people mostly correctly. treat as, you know, as an external force. The U.S. actually had a better economic recovery from it than most countries did. I mean, you know, one of the things I miss about this administration is Steve Mnuchin, who did quite a good job as Treasury Secretary, including, I think, on the economic aspect of the COVID response in 2020. Speaker 2 (6:17) Yeah. We were maybe a little unfair to Louise Linton. Oh, she's fabulous. That photo of Speaker 5 (6:22) her with the sheet. We didn't know how good we had it there with Steve Mnuchin at Treasury. It's so much worse this time around. But so, you know, there was this that halo from what happens Speaker 2 (6:31) when you put gays in charge of the money, you know? Yeah. Speaker 5 (6:34) No, they're never going to let us run Treasury ever again. But so, you know, there was this halo from that. That's like the last period people remember when they felt like the economy was good. Yeah. And Trump got elected on people were dissatisfied with Biden and inflation. And then he gets into office and. doesn't contain the cost of living problem and demonstrably does a bunch of stupid things that cause the cost of living to go up. I mean, I think people see the price of gasoline, the price of diesel right now, and they know that that's because of this war that the president chose to fight that has gone very poorly. You know, the shine finally came off because he finally did something that was very clearly his fault that made the economy worse in a way that everybody feels. So it makes sense that he would go below the push line. Speaker 2 (7:18) I'm sorry, I was on a plane, so I did something I do very rarely, which is I watched Scott Jennings hit on CNN. Speaker 5 (7:25) And Speaker 2 (7:25) he was saying that that's wrong, Josh, that the diesel prices are up. Yeah, because the liberals in California are not building enough diesel refinery plants. And had we built a couple more refinery plants, things would be just fine. Speaker 5 (7:40) So, I mean, were the liberals not doing that a year and a half ago when the price of diesel was a lot lower? Speaker 2 (7:45) I mean, that's a good question. I mean, Speaker 5 (7:47) there are actually some problems, I think, with emissions policy in California, but they're not new. Speaker 2 (7:51) What's new? We're building them in Louisiana, though. Speaker 5 (7:54) Yeah. Speaker 2 (7:55) But Speaker 5 (7:55) what's new is the global disruption to the oil markets that the president caused. Speaker 2 (7:59) Yeah. This Speaker 5 (8:00) is a funny thing for Democrats who I think people are so focused on immigration, crime, trans issues. I think they don't focus enough on energy. costs and how, you know, Democrats have a track record of voting for things that make energy more expensive. This is the big ass truck thing that Senator Ruben Gallego likes to talk about. People want it to be affordable to have their big ass truck, but it's very helpful to Democrats that the Republican president took a specific action that raises energy prices in a way that people might ordinarily associate with Democrats. It's neutralizing an issue that would normally be disadvantageous for the party. Speaker 2 (8:33) You're stealing this from Iglesias, but it's true that like, well, The Democrats have had, you know, policy platforms, white papers that would lead to higher marginal energy costs. Like each Republican presidency now has caused an energy shock because of the mismanagement of kind of geopolitics. And so, you know, that does kind of offset the advantage there. Speaker 5 (8:56) Well, I mean, and Barack Obama presided over the fracking boom, but Democrats didn't like to talk about it very much, even though it was bringing down energy prices and making them more stable. Take some credit for that sometimes, Dems. Speaker 2 (9:06) Let's look at the economy globally and then get into the interest rate stuff that you wrote about yesterday. Dow is still above 50,000. Shout out to... Pam Bondi. Yeah. The AI stuff and the build out with data centers is propping things up. Like unemployment is low. Right. Like we're kind of in a strange economic time. Right. Where people are still very frustrated with the price increases. Yeah. But like we're not hearing as much. I don't know. I think probably the last time you were on, there were, I think, fears that like a recession was around the corner. And that is not as much in the analysis right now. Like what do you how do you assess kind of what the macro situation is? Speaker 5 (9:44) Well, so I mean, there's sort of there's two stories about why interest rates are going up and they're going up globally. This is not just in the United States. One is that not just our government, but major governments all over the world are running budget deficits that are too large and don't appear to have political will to shrink those. And so the government is going to go out there and demand to borrow more and more money in a way that is not easily met in the markets. You have to interest rates have to go up so that people remain willing to lend. And that's a. bearish story that should be bad for stocks. You know, it means in the future, there's going to have to be tax increases and there's going to have to be cuts to government spending. And it's likely to cause inflation to remain elevated because governments, you know, are unwilling to do the fiscal consolidation that would bring inflation down. So that's the bad story. The other story that's less bad is that there's tremendous demand for capital investment related to AI. And so as the AI firms go out there and try to raise capital to make investments that they think are very promising, they're competing with governments and with other companies, more ordinary industries, and with people who want to go get a mortgage. Everyone's trying to borrow money at the same time, and that pushes rates up. But that's a story about people want to get their hands on money because there are good things in the economic outlook. There are things that you can invest in that they think will be very profitable. And so I think both of these stories are true. I think those are both factors that are pushing up interest rates around the world. But the fact that the second one is there, I think helps to explain, you know, why are stocks holding up so well? It's because there are these promising AI related business investments that increase the outlook for future profits and make it tolerable to borrow money at a higher interest rate. So I think that's how you can square that. Speaker 2 (11:20) Yeah. So it's not that capitalism is fake. You know, you don't think. No. Stock market's running on memes. Like the stock market's running on vibes and memes. Speaker 5 (11:28) You know, investors could be wrong about exactly what the future profit outlook is with AI. It has happened before. We've had bubbles in the past. So, you know, if that is a bubble and it pops, that's going to be quite negative for the economy. that also might cause some downward pressure on interest rates, which would give some relief there. Speaker 2 (11:46) Yeah, this was one of the big spoons from one of the Trump guys that was like, you just, you don't know how quickly rates can fall. Just look at 2007, 2008. Huge drop. Yeah, yeah, yeah. Careful what you wish for. Speaker 5 (11:58) Yeah. We're past the point where, you know, like a couple of years ago, people... who are AI skeptics sort of talked about it like it's the stochastic parrot and like this isn't actually that useful. We're past that point. This stuff is definitely useful, but it's still possible that it's useful and it's going to be very important going forward. And the valuations of these companies are nonetheless too high. Speaker 2 (12:17) Yeah. So Speaker 5 (12:18) that could be the sort of bubble that we have. It doesn't mean the AI companies would go away. It just means that their valuations would fall a lot. They probably invest less. Speaker 2 (12:25) And so I just want to talk about like how that is impacting kind of like regular people's view of the economy before we get into Fed stuff. Because I do think that, you know, that if you are somebody who's Speaker 3 (12:35) a Speaker 2 (12:35) consumer in this kind of like, how do you explain why approval rating is 26%, 17 % on cost of living when like the unemployment rate is significantly lower than it was, you know, around a lot of the Obama administration, for example. And to me, it's like the answer is, well, the things you spend on every day are expensive gas and food that has been exacerbated by Trump's stupid policies on tariffs and the war. And then also people feel kind of stuck if they want to move houses, change cars, et cetera, like things that they are borrowing against are much more expensive than they're borrowing cars in the past. That's kind of how I assess why people think the economy is so bad. Is that right to you or is there another factor? Speaker 5 (13:12) Yeah, I mean, I think those things are right. I think there's also a couple of additional things. I mean, some of this is a commonality going back to sort of mid-2021. It's been a similar situation in the economy where prices keep going up and people are mad about it, but people keep buying things, which is part of why inflation remains elevated. And they keep buying things because, you know, unemployment is low. People, I think, are dissatisfied with the economy, but they're not unusually concerned about losing their jobs. And they're able to pay these high prices. They just find it annoying and upsetting. And then the other thing that has gotten worse in recent months and recalls a period that persisted for part of the later Biden administration is that because of the price spike that has happened since the war started, real wage growth has gone negative again. So people, you know, they're still employed, but they feel like the money they're earning is not going as far as it used to. And they're actually correct about that. The inflation is high enough that it is outstripping the increase in their incomes. And so, of course, people are. People are mad, but it doesn't mean we're in a recession necessarily. I mean, I don't think we're in a recession. Speaker 2 (14:16) Have you ever thought I should really be doing more to protect myself from stalkers, scammers, and hackers? But you're not sure what? Here's what I've been