Voters are rejecting an economy that leaves wage earners behind

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 18:20

   wrong okay unpack i'll go through all the ways in which i got it wrong but i just want to first acknowledge what my blind spot is like most people's blind spots but i can just speak for myself is through the lens of my own lived experience and very narrowly what is in my best interests. And I think what we had was a move away from the culture wars. That was very much in my best interest. But I think it was in everybody else's best interests as well. I don't think that was on the ballot. But what I don't think I understood clearly enough, and I think that this election has made extremely clear, is that since COVID, we have moved past political ideology. And I want to say this again, I do not think Democrats or Republicans matter. That is my real takeaway after this election. There is a central block of people that vote the prescient

2. 19:18

   issues of our time. It was a gargantuan win for Biden. Then it was a gargantuan win for Trump. And then it was a gargantuan win for the Democrats in these midterms. What are these people voting for. I think what they are shouting now, they were trying to signal and now they are shouting is a broad based belief that the economy has completely decoupled from reality and is broken. The economic reality in America is broken. There is a small percentage of people, the four of us on this pod and all of our friends who are the asset owners of America. And We'll be right back.

3. 20:00

   we have benefited in every weather condition. When rates were zero, we benefited because we were able to build our businesses with very cheap capital. When rates were high, we benefited because we had pricing power. And in every condition in between, whether there was tariffs, whether there were not tariffs, whether there were subsidies, whether there were not subsidies, we've all managed to continue to accumulate and grow assets. But we are few and far between. And then there's everybody else who are wage earners and the structural capacity of the American economy to support and grow wage earners is broken. It's clear. Why do I say that? I do not think, and I disagree with Freeberg, I don't think this has anything to do with socialism.

4. 20:48

   I don't think the far left one, particularly more than they were expected. I don't think the far right one, particularly more than was expected. This was a complete and total repudiation about the state of the economy. The economy is broken. I have a few charts to support my point of view. Number one, if this was ideological, and if ideology mattered, money in politics would have had a more direct impact on the election. But when you look at the amount of money that was spent, all of this money was wasted. All the money that went into Texas was wasted.

5. 21:26

   All the money that went into Senate raises in Ohio was wasted. The better bet was to look who was being spent money on. If you had taken the opposite candidate who had no money, you would have been overwhelmingly more right. So money follows ideology. Money did not work in this election. Ergo, in my opinion, ideology did not matter that much. Next chart. Redistricting and gerrymandering also follows ideology.

6. 21:55

   You try to set up the geographies in a way so that you could gain more seats. Look what happened of the 15 Republican seats that were redrawn so that they could capture all of them. Democrats won 11 of them. Republicans only won one. So again, ideological gerrymandering also totally failed. So we have ideological spending in politics, failure. Ideological gerrymandering, failure. Next chart. And what you had were centrists, normal people.

7. 22:31

   These were not people running around talking about communism. These were people that very narrowly focused on one thing and one thing only, which was affordability and the functioning of the United States economy. And they spoke to a large block of people that were both Democrats and Republicans, initially supported biden overwhelmingly supported trump and then overwhelmingly went to the democrats largely to vote the displeasure with the economy that's it i don't believe iran really had much to do with it i don't believe israel had much to do with it i don't believe ai had much to do with it this is the american society asking for a reset on the economic principles on which we operate. And I think the obvious thing to do for the ambitious candidate on the left or the right is to take these three charts together and have one very precise takeaway, which is the

8. 23:31

   economic populist platform will be the one that you can take to the presidency in 28. And the path is really straightforward. Because if you look at what happened to Harris, and then you look at how aggressively all of these states moved towards what I think is economic centrism, what you have is for either side to not worry about whether you're a Democrat. or whether you're a Republican, but if you embrace reasonable standards of economic fairness, you will win. So I got this wrong. I thought top-down economics can still work. I thought that when you had asset owners building assets and investing in the economy, these things can get to everybody else. It's clearly not happening. It's not true. I have to update my priors.

9. 24:25

   And my new framework is we need to figure out how to stop all the loopholes. We need to figure out how to do some of the things we've talked about before, stop the federal underwriting of loans, combine that with getting rid of student debt, take all federal taxes beneath a certain band, probably 150K to zero. There's all kinds of things that can be done now to allow the wage earning class to feel more ownership of the United States economy.

10. 24:55

    And until it happens, my prediction is not that Democrats or Republicans win, but they will violently keep going back and forth away from the status quo, because if you are in power and you do nothing, they will vote against you. So now the Democrats have a really interesting challenge. What will you do with the majority in both houses? Are you actually going to try to legislate economic fairness? Or are you going to spend your time distracted with impeaching Trump?

11. 25:20

    because then you will find yourself, if the Republican candidate embraces the economic populist platform, you'll find yourself losing the way the Republicans lost in the midterms.