Today's number 469. That's how many

times executives said storyteller or

storytelling on earnings calls and

investor days in 2025. A 31% increase

from last year at Merry Christmas. True

story. When I was five, I got a piece of

coal from Santa and I was so pissed off

that I poisoned his cookies and that

[ __ ] killed my father.

I was a five Herford or Hartford,

whatever it's called. One of these

douchy members clubs here in London

said,

>> you know, smell you,

Grand Prince of Wales. Anyways, so and

uh started talking to a very lovely

prostitute and I said, "So, what did you

ask Santa for, young lady?" And she

said, "500

bucks like everyone else."

>> What's hilarious is you also gave me

$500 for Christmas. So clearly I'm the

prostitute as well,

except I got it as a digital gift card.

>> Is that what we gave? I literally have

no idea what we gave. I mean, I'm so I I

picked it out myself. I'm so glad. A

$500 digit. How do we pick that number?

>> $500. Thank you. Thank you, Scott.

>> Spend it on the ones you love, Dad.

Spend it on the ones you love. God, in

New York, that won't even be a date.

Thank god you have a girlfriend. That

wouldn't even be a date these days. in

New York. You and your douchy Shaargo

members club.

Oh my god. That's the thing I don't like

about Sheamargo is it has I'm fine with

women your age at those places. I am not

fine with men your age at those places.

>> We're terrible. We're cramping your

guys' style.

>> Oh, Prop G, you're so interesting. Let's

talk about interest rates. [ __ ] off.

[ __ ] off. I'm not that nice and I'm not

The last thing I want to talk about is

business when I'm out. You really need

to make sure you never do that because

this happened to James Cordon where he

was a huge dick in public. Actually, he

was at Boltazar which is your favorite

restaurant. Huge dick in public,

publicly shamed and cancelled for it.

People stopped listening to the show.

People really care how you interact in

person. So even if those feelings come

into your mind, I would encourage you to

just really suppress them. Just be nice

and say.

>> Except for Uber, I could not be nicer to

service people cuz I used to be. I'm I'm

This guy changed there was a couple guys

I used to park cars and the same guy

used to give me 20 bucks which was like

$7,000 when I was your age and I love

Anyways I'm except for Uber drivers I'm

I'm definitely like going to have a

vulture pick up my liver forever by the

way I treat Uber drivers but everyone

else I'm very very good to very kind to

>> What do you have it against the Uber

drivers? I get in a car, I'm stressed

out, and they're like, literally, I've

put into the app, I'm going to

LaGuardia. And they're like, uh, and

then they pull up their thing, and then

they type into ways for 10 minutes. And

I'm like, can we go? And then, and then

he's like, I have a different route. And

I'm like, what?

You're smarter than the AI called Ways.

Google Maps needs you. Have you thought

about going to work for Amazon for for

Google Maps? Is that your next career? I

can't handle myself in the back of a

car. I'm stressed. It my favorite line

in the Devil Wars Prada and it's coming

out next is when she gets in when she

gets into the car in the back of her car

and they're just sitting there and she

goes, "Go."

>> That's what I I feel like every time I

sit I'm like I'm like go. I've already

put in the [ __ ] What's the point of

me putting in the address 20 minutes ago

if you don't already have the route

figured out and all you got to do is

follow the blue line.

>> I thought you were going to say my

favorite line from that movie is Anna

Hathaways doing something clumsily and

she says by all means move at a glacial

pace. You know how much that thrills me.

>> That's not even the best. The best is

Emily Blunt who says I'm one stomach flu

away from my target weight.

That's the best line. God, we need more

movies like that. Do

>> you know what's coming out? It's coming

out with my friend My friend Justin

Theorough, isn't it? Devil Wears Prada

2. I can't wait to see that. And Meet

the [ __ ] 4, but there's clearly

aren't money. I'm glad Merryill Streep's

getting her second home or her second

penthouse somewhere. The the creative

community was was demanding a sequel to

The Devil Wears Prada.

>> We were. We actually were. Um, should we

get into a conversation here with with

Justin Wolfers? Why not? Why not?

>> Here is our conversation with Justin

Wolfers, professor of public policy and

economics at the University of Michigan.

Justin, great to see you. Thank you for

joining us on our final episode, final

guest episode of 2025. Good to see you.

>> Where are you packing up? Going home.

Done.

>> Going home. Done. Calling it a day.

That's it. Calling it a day.

>> I'm going to take over. I'm going to

begin just by saying congratulations. I

heard that Forbes was looking for people

under 30.

>> Wow.

And they managed to find 30 of them.

>> Thank you.

>> And mate, I reckon, look, it's not only

often you get a moment. Let me explain.

The audience has probably heard it, but

Ed was named one of the 30 under 30. And

you know, you're from the journalism

side and I'm from the econ side. So, I

want to say as an accredited economist,

mate, I think you're there because you

are an immensely talented economics

communicator and I tip my hat to you and

you you earned every part of it, mate.

>> Wow, that is really, really kind,

especially coming from you. Thank you,

Scott.

>> Yeah, Scott's gone quiet.

>> God, I hate this podcast so far.

>> It's not like we've been talking about

this nonstop for the last what feels

like 30 years.

>> You're the one who brings it up, Scott.

We're very proud of Ed, Justin. We're

very proud of him.

>> I want to start with

uh a reflection on the year as our final

interview of 2025. It's been kind of a

wild year. How would you grade Trump's

first year back in office? With many of

my students,

I give them I look at the output they

produce and I give them a grade and then

they come to my office after and say,

"But Professor Wolfers, this isn't

fair." I put a lot into it. Their claim

is that I should grade them on inputs

rather than outputs. And I think if you

were to do that in Trump's case, you

would actually get very different

answers. Um, so if we were talking about

outputs, how's the economy doing in

terms of hard numbers that we have at

this point in time? To be clear, it's

December 2025. We still don't have a lot

of the numbers from late 2025, so it's

only a partial report. We are not in a

recession

probably. Um, we do have unemployment

drifting up. We do have inflation

uncomfortably high. We do have a budget

deficit that is at a point that simply

doesn't make sense for where we are in

the business cycle.

All of those would push you toward a B.

You might go and remember this is a

grade inflated America. You need to

understand the extent of great inflation

in this country right now. But you can

go a step further. We have needlessly

um turned allies into foes. Our incoming

tourism is terrible. Our exports of

education are going to be in the tank.

our role in the world and the respect

with which we're held around the world I

don't think has been lower in my

lifetime

uh whether that has an economic impact

is a something of an open question so in

terms of outputs actually I'm on the

generous side let's go back to inputs

um the inputs are do we have a coherent

the the president's first job is to

appoint a highquality economic team I

think by any measure he failed it's the

worst economic team in a White House

at a minimum in my lifetime and I'm just

not very good at history. That's why I

can't say ever. Um the president's chief

trade adviser is a felon. His chief

economic adviser is

a yes man. He is council chair of the

council of economic adviserss claims to

believe in the independence of the Fed.

That's why he's currently on leave from

the executive and sitting at the Fed.

the people on his short list to become

the next Fed chair. If you look at the

history of our Fed chairs, people like

Ben Bernani who went on to win the Nobel

Prize in economics, people like Janet

Yellen,

extraordinary public servants, um his

short list doesn't look like that at

all. Um and if you think about the if

you again judging by inputs now, this is

a question of policy process and actual

policies implemented. The policy

processes have been a disaster.

uh the man 10 years after declaring that

his number one economic priority was

tariffs. The man who had run two

election campaigns and in fact won

four-year term as president arrived and

still didn't have a tariff agenda even

though he'd written one several times.

Announced one on the White House lawn on

so-called liberation day and was forced

to back off within 7 days, giving you a

sense of how chaotic it was. Of course,

that's not where you need to look. If

you could ask the penguins at the herd

in McDonald Islands whether this was a

wellthought through and highly targeted

tariff regime.

You have a regime which I think doesn't

make any sense on its face. But at least

10 months later they finally figured out

that tariffs on bananas are not going to

bring banana factories back to the

United States because we simply don't

have the soil or the sunshine.

And so the very fact it took 10 months

to figure that out is extraordinary.

And that's I'm not even getting started.

So, I I do want to get to the important

thing. The important things here are the

man fired the head of the Bureau of

Labor Statistics. I will tell you, Betsy

and I are on vacation. Betsy, my

partner, fellow economist, and she woke

me up at 6:00 a.m. and said he fired the

BLS commissioner.

So, for folks at home who don't

understand how weird that is, my partner

woke me at 6:00 a.m. in a in in quite

some distress.

This is something you have not seen from

a non-autocrat

anywhere in the world ever.

We've had continued attacks on the Fed,

continued attacks on the rule of law,

continued attacks on immigration. Then

many Trump supporters say, "No, no, no.

It's all about illegal immigration."

Except it's not.

And the institutional foundation of

American prosperity is wrapped up in th

in in those deeper forces. And that's

what he's undermined.

And the reason you don't want to grade

based on what's happened in the first

year is much of this is um white anting

the foundation of prosperity and will

show up not next week not next year but

in a decade or two and the effects from

what we know in the economics literature

is the effects are quite substantial and

so in 10 and 20 and 30 years time our

kids the beautiful little baby Edson's I

bet they're so cute they're going to be

lovely and they'll be looking for their

first job, but their first job won't be

as good as what you're hoping for right

now, Ed, because our economy won't be as

big. It won't be as prosperous.

There will be entrepreneurs who never

entrepreneured, inventions that weren't

invented, diseases that weren't solved

because of what's going on right now. So

on this measure, it's the worst single

year in an administration as far back as

I know American history, which really is

only 50 years.

>> Is that an F,

>> mate? How far does the scale go?

A to D and F.

>> Well, I when I don't know what to do, I

just give it incomplete. And uh

incomplete feels like where we're at

right now.

>> Yeah. Incomplete.

So, how is it you I like that you're

creating a distinction between the

inputs and the outputs. The inputs

really bad. Outputs not so bad. It

sounds like is your description. Outputs

being perhaps stock market performance

up 17%. Let's pause there.

>> You don't you don't like that one. Okay.

>> So, this has been the number one talking

point from the administration, which is

look at us. Markets are up. We must be

doing incredible stuff. So, one of the

things we try and do is we think about

what would have happened otherwise.

That's called counterfactual thinking.

So, what would have happened to a global

to the US stock market if it weren't for

the president? Well, one thing you could

think is maybe we just would have gone

up at the same rate as everyone else.

So let's compare the returns on the

American stock market to everyone else.

And so I did an exercise recently where

I took I believe it's 23 developed

countries that are in the Morgan Stanley

total return indices and I calculated

the returns since liberation day in

every one of those countries up to about

a week and a half ago. I can update it

again if you want. And what I discovered

is of those 23 countries we were third

last

>> maybe fourth last. So, uh, Denmark is

below us because the Danish stock market

is Novo Nordesque and if things aren't

going well with their wonder drug, there

goes Denmark.

New Zealand is beneath us and Australia

is pretty close. But every other major

country, Germany, Italy, Japan, uh, just

name your favorite countries, Portugal,

Spain,

they're all

doing better in terms of stock market

returns in US dollars than the US. So if

you Canada, Canada's doing better

despite the fact we've clobbered

Canadian exports.

So if you say are we doing well, the

question is compared to what? The answer

if if the answer is compared to almost

anyone else you think should be in your

peer group, unless you believe New

Zealand and Denmark are your peer group,

we're actually doing worse in terms of

stock market returns.

>> I'm having a tough time sussing out the

impact of AI on unemployment or if there

is one yet. Any thoughts? I think you've

actually gotten something really really

painfully important which is that

unemployment has been rising and that is

an untold story. Unemployment has been

rising at exactly the pace that will

attract zero media attention while still

disrupting people's lives. And

unemployment has been as low as 3 1/2%

just in the pre- pandemic period or up

to 4 12%. That is an enormous

difference. And the problem is it

occurred month by month or every second

month and no one's talking about it. And

so that's part of why I think the output

of this economy is so weak. The second

reason I think that's very important to

think about is a lot of our economic

measures right now are distorted by

what's going on with immigration. So for

instance, employment growth in numbers

is not that great, but that's partly

because usually employment growth's got

to be high to keep up with population

growth. We got no population growth. So

we're going to see pretty crummy

employment numbers. There's also a lot

of questions about benchmarking and a

whole lot of nerdy stuff about how you

measure stuff. One of the nice things

about unemployment is it tends to

maintain its interpretability during

these complicated moments. All of which

is say, "So far, Scott, all I've done is

granted the premise of your question.

You might now ask me to answer it." So,

there's a little swirl of conversation

that says recent college grads

unemployment rate is a bit higher than

you might like.

Therefore, AI. Um, first of all, that's

not much of the overall story because

recent college grads are not much more

much of the overall population

and trying to discern these things in

real time is kind of tricky cuz there's,

you know, measurement error and seasonal

adjustment and blah blah blah. I'm not

at all convinced that's the issue. I

could believe it in specific sectors.

So, um, for instance, I'm quite

confident the last interpreter has been

hired. I am less confident that last

coder has although I'm aware that things

are a lot tougher for coders right now

but when you look at data on the

adoption of AI by American businesses

it's still remarkably weak so it's very

much a forward-looking story I think

it's one I am glad you've got your eye

on the issue Scott because I think it is

the biggest disruption coming to the

labor market in decades I'm just not yet

confident we're there yet except at the

very sharpest stage of the wedge. What

are you seeing?

>> You hear about uh the kids at business

school not getting as many offers, but

they're still getting offers and the

employers on the demand side, they say

they're not letting up their hiring,

even law firms.

>> Well, that's interesting because like

law firms are one of the places where we

won't know them anymore.

>> I wonder if there's a bit of a bias

among quote unquote the expert class to

catastrophize because it makes you sound

more intelligent. But I'm not saying the

collapse in employment that the

I don't know that the the experts are

I'm not saying it's not going to happen.

I just don't I don't see it yet. um talk

a little bit about

so our thesis has been that if you look

at the valuations the underlying

valuations of these companies they're so

extraordinary that built into those

valuations is the expectation they're

getting an an incremental 3 to5 trillion

in revenue gains for their clients

who've purchased these expensive site

licenses or they'll get efficiencies

which is Latin for layoffs we haven't

seen a ton of incremental businesses

from AI

What we do see evidence of is these

efficiencies whether it's Disney saying

they're going to spend less money on

legal or JP Morgan less money on

compliance officers.

But our thesis is one of two things have

to happen. Curious to get your feedback.

You're either going to see chaos in the

labor markets that justifies

the expenditure on uh these companies

from efficiencies or you're going to see

the valuations of these companies come

way down. Any thoughts? So you actually

had a question there about capital

markets and a question about labor

markets. Let's take them in turn. The

question about capital markets is these

companies are valued at bajillion

dollars. That seems crazy. I don't think

capital market valuations are very

informative about how transformative the

technology will be. The logic is simply

this. If this remains a market with many

competitors

and switching between competitors very

simple. In fact, apparently there's been

a lot of people jumping off of Open AI

and implementing Gemini in their

corporate systems

in some sense. Then that says Google and

Open AI and Anthropic are like, you

know, when you drive to a corner where

there's a gas station on every corner,

very easy to go from one gas station to

the other if you save a couple of

pennies.

At the moment when you talk to IT folks,

it looks a lot like there's a gas

station on every corner or an AI station

on every corner. And so there's a lot of

competition. Competition pushes price

down to marginal cost and it pushes

economic profits approximately to zero,

which means you can have an utterly

transformative technology, but capital

doesn't get rich. Instead, the gains go

elsewhere. The prices aren't high enough

for these companies to be worth a ton of

money. The other possibility is that one

of these companies will come to be seen

as the clear leader. When you hear all

this talk of America needs to lead the

tech revolution, it sounds like or we

need to win AI. That sounds like a claim

that it's some form of winner take all

market. And there are some aspects of

this in which that's true, right? Every

one of these AIs can go and read all of

Wikipedia, but whoever gets the most

customers has more customer chats that

they can that they can train on and

stuff like that. If it's the latter that

matters, now we're in a winner take all

world. In which case, whoever gets the

lead becomes better, in which case they

pull ahead, in which case we end up a

monopoly. In which case, that company

becomes the monopoly provider of AI

services, in which case that company

will come to be worth trillions,

literally trillions of dollars.

And so you can have the same AI

revolution, one where companies are

worth trillions and another where it's

worth zero. And that's all about the

market structure of the market for AI

services, which right now remains

remarkably competitive.

Let me pause there. That's the capital

market question you asked, Scott. And

then I do want to bite on the labor

market question you asked. I can't

figure out if it's going to be labor

chaos or this will be like previous

technologies where we have new

opportunities, new new markets, new

businesses that will somewhat backfill

and create a soft landing in the labor

market. So, let's take ATMs and the

market for bank tellers. Go back to the

1960s. And what you would do is you'd

walk into a bank and there was a teller

behind the counter and you would ask for

money and they would hand it to you.

You'd hand over your passbook and they'd

give it back to you. Then someone

figured out a way to automate almost all

of their work and that's called an ATM.

And now you don't walk inside the bank,

you go outside the bank, you put your

card in and it gives you cash. You might

think that this technological revolution

which is literally labor replacing would

have led to a sharp decline in the

number of bank tellers. In fact, there

are as many bank tellers today as there

were prior to the ATM.

So that's an interesting story. What

happened? Well, the bank the ATM

revolution actually was quite slow. It

took a while for them to be deployed

everywhere for older people to trust

them and so on.

And the set of tasks

that bank tellers used to do is now

fully automated, which is they used to

predominantly count money. That's all

done. They don't count money anymore.

What they've done is they've moved up

the value chain instead. There are just

as many tellers inside the bank, but now

what the teller is doing is selling you

a moderately sophisticated financial

product.

And so what's happened is the set of

tasks done by the people in the job has

evolved where we got rid of the old

stuff. And here we could even

editorialize and say we got rid of the

boring stuff, the repetitive

dehumanizing factory work stuff and

we've left them with much more creative

work where they get to look other people

in the eye. If you're an optimist and

say find the right product that fits

them, if you're a pessimist, say figure

out how to rip off the sucker in front

of them. But either way, they remain

fully employed. So that's a fascinating

case study.

>> And so the question is, does AI look

like ATMs?

Now, there's lots of other jobs that

didn't survive. For instance, the word

processor got rid of the typing pool.

So, every building used to have a floor

of typists in it. Uh, I don't have an

assistant at all at the University of

Michigan. I answer all my own emails. I

write my own letters and I ignore all my

own phone calls. Um, so the typing pool

did get eliminated. So, is AI more like

the typing pool or more like the ATM?

And that's a real question. Let's bring

this back to economics 101. The question

is, is this a substitute for labor or is

it a compliment? That would be a natural

way of thinking about it.

When we're trying to justify a new

investment to our bosses, I want you to

give me x million so that I can AI this

joint.

The easiest story to tell is to go to

the boss and say, I'll get to fire 10

people, so therefore I'll save this

much. Therefore, the ROI is very

positive. And so, we have a tendency

when we tell stories to focus on the

labor saving part. And that's because of

the bean counters above us in the org.

It's much harder to say what I'm going

to do is I'm going to use AI to

supercharge the productivity of the

people already in the office.

Let me make a guess.

My guess is in the background of ProfG G

Markets, the people who make your

thumbnails for YouTube probably use AI.

My guess is that 10 years ago they did.

5 years ago they did not. My guess is

you haven't stopped employing those

people. What you've done is you've

allowed them to do the boring part a lot

more quickly

>> and you've moved them forward into sort

of a more high value added part like

they just wrote that brilliant question

that you just asked me. Um but you

didn't end up firing a lot of people

because of the AI that Prof is using in

the background.

>> And that is your assumption for what we

are probably going to see next year. I I

guess the I I'm glad that you bring up

the typists because I feel like part of

this the conversation that is missing

often times when we talk about AI it's

like we know that there is uh a tangible

positive return on say GDP or or we know

that ultimately as the with the ATMs um

it could lead to more employment more

more creative jobs but I feel like what

often gets left behind is there were

certainly

typists, individual typists, perhaps

even individual bank tellers when the

ATM was being brought online. Same with

the the computer and those individuals

did lose their job. I mentioned I wanted

to use time and I'm glad you brought me

back to it. Um my better half Betsy

Stevenson just wrote a beautiful essay

about this

>> in which the speed at which this

transformation occurs basically

determines how much it's pure

substitution versus complimentarity. So

if slowly I can learn the skills so that

AI becomes the cape that gives me

superpowers, then I keep my job. If I

don't have the time, the skills, and the

bandwidth, you're going to fire me and

hire a 22-year-old who can who can put

the cape on straight away. And so the

pace of technological adoption, I think,

is absolutely central to the extent to

which we can reinvent jobs. A job is

just a social construct, right? So

you've got someone who's working at the

fourth floor of the big tall building in

Manhattan. It used to be the typing

pool, but now it's the typing and

scheduling pool. And then it becomes the

typing and scheduling and phone

answering pool. And then it becomes the

help me with my ideas as well pool. And

in those jobs, including the people in

them, evolve. Look, all of this is the

optimistic story. I want to come back

and give a lot of weight to the

pessimistic story.

This is a freaking amazing technology.

And I love being told by people who've

spent no time with it that I'm wrong,

but it is. It's a freaking amazing

technology.

And it appears to be coming quite

quickly. Not as quickly as Silicon

Valley or much of Wall Street thinks,

but compared to past technological

revolutions, remember the old expression

um the personal computer is everywhere,

but in the pro productivity statistics,

it took 20 years to get a computer on

everyone's desk.

there's an AI on everyone's desk within

two. They're just not using it.

>> Um, so if we move as quickly as could

be, you know, things like coding, coding

was difficult because you had to write

in computer code. Well, AI,

you use natural language. Um, AI is

written with APIs that make them modular

and plug and play and so on. So, there's

a lot of reasons to believe adoption is

going to be very quick, but the quicker

the adoption is, the more collateral

damage I suspect there'll be along the

way.

We'll be right back after the break. And

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>> We're back with Profy Markets. 2025 was

the year of AI. I I suspect 2026 will be

the year of AI as well. That to me is

the big question for economists is to

what extent is this new technology going

to fundamentally transform the world in

which we live. And it appears that there

are some there's maybe a fork in the

road here. It could be unbelievably

great. It could also be pretty terrible.

It seems as though it is the

administration's job to figure out how

to pave the best path forward. And I

look at what has happened in the past

couple of weeks where Trump has decided

an executive order saying no, no, the

states are not allowed to regulate their

own AI. We're going to leave that up to

Washington. The federal government's

going to figure that out. And then I

look, okay, what is the federal

government's AI policy? And I look

online, I try to figure it out. There is

none. And it seems as though their their

philosophy is um regulation is bad. It

basically means you're anti-AII or

you're anti- capitalism. And so we're

just going to say no, the chains are

off. Let it run its course. What do you

think of that as as a strategy? Do I

have that wrong? Um and where is that

going to lead us? Coming back to

failures of the Trump administration,

the most fundamental failure is that the

outrage of the day, the president was

mean about Rob Reiner

and we're all pissed about it and it's

graceless and it sucks

or the president just started the new

meme coin or the president just knocked

over the East Wing. None of these are

actually about the fundamentals of our

future prosperity.

And what they've done though is they've

crowded voices, including yours and

mine. I'm as guilty as anyone, out of

the most important issues of the day.

And from a domestic economic policy

perspective, AI is I think by any

measure the most important economic

change of the day, probably of the

decade and possibly of the first half

likely the first half of the 21st

century.

We need political change, economic

change, social change. We markets work

well, that's true, work well when we

have well articulated rules of the game

that make sure that the profit motive is

directed in ways that are pro-social

rather than antisocial.

Anti-regulation

means we get rid of any of that. Um, so

people talk a lot about our political

marketplace being distorted by deep

fakes and the like. That's one

possibility. Where's the regulation

around that? A lot of it's actually come

from the firms themselves. Um but uh

what's going to h what's the pace of

adoption? What's this going to do to

um mid-tier white collar workers? What

is an appropriate welfare state? That is

to say a social safety net in a world in

which jobs may be about to be automated

away. Um all of these rules of the game

really really matter and in the United

States we have made 0.00

progress on them. Um, who is the

administration's chief AI economist?

Where's their working group? Where are

the sociologists thinking about broader

social implications? Where's the public

debate? Where are the white papers?

Where are the discussions? Where are the

ideas being floated? Nothing. Point.

Nothing. Nothing. It's a profound

disappointment and an enormous mistake

occurring as you and I chatter right

now. I mean, it seems like it's all up

to David Saxs, who is a part-time

employee who's in charge of AI and

crypto and who spends his time investing

in AI companies or talking about AI on

his podcast or posting on Twitter.

>> I'm sure you like the idea of podcasters

running the world, but some of us think

running the world full-time job.

>> It gets me excited.

>> That's great.

U can I shift us to tariffs unless Scott

any AI questions here?

>> Another one of our thesis that AI the

similar to jet transportation or

vaccines or the PC that it'll be have a

huge impact on society but the winners

will be all of us that very few

companies will be able to sequester

shareholder value and that it'll be

absorbed or the value will be absorbed

by the general public. What do you think

of that thesis? And what happens if

that's the case and these companies that

now represent 40% of the S&P? People

just wake up and say, "These are

airlines." And that's not to say they

won't add huge value. They're just not

going to make that much money because

there's pretty, you know, there seems to

be substitutes everywhere, including

these open wave models from China. What

do you think of that thesis?

>> I think it's possible. And it actually,

your point, I'm not saying it's right,

but it's possibly right. And it

reinforces Ed's point which is this

seems strikingly important. So to go

back and it's actually speaks to exactly

the way I was trying to conceptualize uh

competition in this space right if it

turns out to be a competitive model and

we end up with an AI gas station on

every corner the price is low but

everyone gets gas and that gas could

supercharge us to do all sorts of things

which means the companies are worth

nothing. The other possibility is that

somewhere deep inside this there's some

sort of winner take all dynamic. Um, and

it could be in algorithm development. It

could be in finding the the data that go

into it. It could be just in attracting

the world's top scientists and then we

end up in a monopoly world and the

monopolist eats everything. And the

important thing about that, Scott, is

there is a a utopian view. The utopia is

it is like airlines that, you know,

everyone can buy a ticket for 400 bucks

and get across the country by flying.

Can you believe it? Flying. Humans fly.

It's freaking amazing every time I think

about it. Right.

It's only a few hundred. I know a few

hundred's a lot for for people, but it's

still only a few hundred to be like a

bird. That's crazy, right? That's

utopia. And dystopia

is we all lose our jobs. The machine

does work for us. And the machine makes

Sam Alman richer.

And the important thing is it doesn't

take much in terms of the structure of

our economy to flip us from utopia to

dystopia.

In the story that I just told, it's all

about the competitive forces within the

industry. Um, last time I was on your

podcast or maybe the time before, I

talked about how differences in

ownership, if I gave Ed ownership of his

own AI, then Ed could get his job done

for him and still enjoy getting paid.

But if I gave Scott the ownership of the

AI that could do Ed's job, then Ed would

be unemployed and Scott would be rich.

And so that's another domain where very

small differences in economic parameters

move us between utopia and dystopia. And

the point is the pot of gold which is to

say the potential future productivity.

The the gains here are huge.

So what we got to do is start thinking

about how do you compensate the losers?

How do we set it up so that pot of gold

is evenly shared? If that pot of gold is

in fact the result of a simple algorithm

inhaling the intellectual work that you

and I and every other American has done,

our data, then how do we set up a data

dividend so they get paid for that? Like

so many important issues here. So Scott,

I agree it could be incredible, could be

horrible. What we need is real work and

real regulation. I read an article this

week uh from the Wall Street Journal. It

said why everyone got Trump's tariffs

wrong. That was the headline of the

article. It said economists missed the

mark. Um so I read this. It based on

your reaction it sounds like we agree. I

thought this was a ridiculous article.

Um basically saying that oh it turns out

that the tariffs were different than

what we thought. Economists thought it

was going to be all bad. It's like I

thought economists thought the tariffs

were going to cause more layoffs that it

was going to increase inflation. We're

at 4.4% highest in four years on the

unemployment rate. We're at 3%

inflation. We were 2.3% preliberation.

The way I look at it, economists were

right. People like yourself. Sorry if

I'm jumping in the line of fire here,

but I don't really understand that. Um,

your reactions to that article. I'm

overjoyed that you're frustrated with

pointless both sides wisdom. Um, which

was in the top of that article, but you

read the further down. It actually

wasn't that bad. And it's partly because

we lacked the ability to have mature and

responsible serious economic

discussions.

So, I'm pretty sure I've even said this

on your show. If we'd gone back and

talked about how much inflation will

tariffs cause, let's do the arithmetic

together because I know I've done this

arithmetic a 100,000 times. Imports are

15% of the economy. If tariffs are 20%,

that means the average price level will

rise by 3%.

Realize though that there's a lot of

holes in the tariff regime. So let's

just call that 2%. Let's let that happen

slowly over 2 years. That would boost

inflation by 1 percentage point in each

of two years, which is within the range

of the upy downiness, statistical noise.

Hard to figure out, hard to see that uh

you would see anyway. And as you point

out, it turns out actually kind of

that's what's happened as well.

>> Right. Here's the problem. If I went on

television and I said tariffs are going

to raise inflation by a whole percentage

point,

then you never get invited back. Now, I

try to tell the truth. And actually,

I've had some success at telling the

truth, but that's not a narrative that

sells. So, what you have instead is

people that don't understand the m don't

understand numbers, and everyone on this

podcast does.

>> We understand one percentage point per

year is a reasonable baseline. And then

we could go to Wall Street guys who have

long spreadsheets and they'll give us

more sophisticated versions.

But then when you you go to the next

level of the media, all they're thinking

is well tariffs are big and that's going

to cause big inflation. Oh my god, the

sky is going to fall. And so they were

sort of led rhetorically. They used

language as if inflation was going to

rise to 6 or 7%. They never said a

number because they don't know what

numbers are.

and they spoke about it that way.

There's also some liberal wish casting

here which is it's not realistic to

expect an enormous effect on inflation.

But that's not the point. One of the

points I've tried to make over and over

and over again is a tariff fueled

inflation is fundamentally different

than the usual inflation we have. A

demand-driven inflation causes prices to

go up. The price of what I produce just

went up. That means I'm more valuable to

my boss. I generate more dollars for

him. He has more dollars. As a result,

probably a year later, my boss will

offer me a wage rise, and wages keep up

with prices. I'm frustrated. It takes my

boss a year to get around to it, but

I'll get over it. When it's tariffs,

costs for the boss have gone up. What I

produced didn't get more valuable. He

doesn't have more cash. There's no

reason for him or her to pay me a penny

more. So, prices go up, but my wage

never catches up. So, here's the thing.

The problem isn't that tariff and it

never has been that tariffs are going to

cause a hyperinflation. It's that

they're going to cause prices to rise

without wages keeping up and that is

immensely more painful. That

fundamentally undermines your real wage,

your quality of life, what you can

afford forever.

Whereas a regular inflation is just a

transitory thing. And so the frustration

here is why can't we have a mature and

serious conversation? So the effects

will be small. They'll be persistent.

It's still a bad idea, but I'm not going

to tell you it's the worst thing I've

ever heard. I've spent the whole last

six months telling you it's a bad idea.

I really think it's a bad idea. It's

because it's not often that a single

president can use their failure to

understand economics 101 to cost 340

million people

a moderate but not huge amount of money.

So, reversing that worth it. But this

isn't World War II either. This is a

polic a pointless policy mistake that is

expensive but not prohibitively so.

We'll be right back. And for even more

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We're back with Profy Markets. Just

going into 2026 here, we've seen the

inflation rise from 2.3% to 3%. This

episode will come out just we're

recording this just before we get the

new inflation report. So maybe it'll be

higher than 3% by the time this episode

is out. But that's what we've what we've

seen. Meanwhile, we've got twothirds of

Americans saying that they think Trump

is losing the battle against inflation.

People do not think that he's handling

this very well, which is very

interesting in and of itself. We also

got this rate cut in December because

we're trying to battle against the

unemployment thing, which is not very

good for the inflation thing. You

mentioned that you see this playing out

over one or two years. What do you think

inflation is going to look like in 2026?

Is this all just going to keep getting

worse?

>> Don't bother ever asking anyone that

question. The single best indicator of

the future path of inflation is the

Fed's forecasts. They beat every single

private sector forecaster. They beat um

and they beat the combination of the

private sector forecasters. So my honest

answer is whatever J Pal says, good

enough for me. What J Pal says is we're

not there yet. Um inflation's not coming

down anytime soon. He does say tariff

adjusted inflation might be back to 2%

right now. meaning inflation without the

tariffs.

>> Problem is we do have tariffs,

>> right?

>> Um but if you're trying to get a sense

of the underlying speed of things um and

you know I as I said I I really don't

think the best way to talk about the

effects of tariff is its inflationary

impact. It's actually its effect on

purchasing power. It's the reality that

there will be many many kids will get

fewer toys this Christmas and that's

because most of our toys come from China

and the tariff rate on China is

enormously high. Trade with China has

been one of the greatest forces lifting.

It's very unpopular thing for a

center-left guy to say. Trade with China

has been one of the greatest forces

lifting the purchasing power of

working-class Americans.

And that's getting kneecapped right now.

There's another side to the coin though,

which is well, I don't know if it's

equally bad, worse, or less bad. But in

addition to that 2% over 2 years, 1% per

year sounds manageable, but basically

what you're saying is it's a 1%age

decrease in just prosperity full stop

>> forever for as long as the tariffs last.

And then the other side is that there's

reciprocal tariffs from nations that

counter punch and our markets shrink

which means lower wages which means okay

so prices are up and there's less demand

for my labor because the market for my

products has shrunk uh because Europe no

longer Europe's also implemented tariffs

and which has increased the prices and

value proposition of my products. So it

just I'm having a difficult time finding

a way a more elegant way to reduce

prosperity both on I if you call it

demand and supply side

but it just doesn't I guess is that side

as bad as the increase in prices the

decrease in our market the markets for

our products overseas when I talked

about the effect on consumers that

effect is persistent as long as the

tariffs exist. So every year the tariffs

are there, there's an effect on you

reduce people's prosperity by, and I

want to correct you, Scott, two

percentage points, right? So if you're a

guy who earns $100,000, it's like you're

earning 98.

I don't need to throw away $2,000.

Um, but I can still feed my kids. And

you're absolutely right. What's totally

bizarre is at the moment the

administration is bailing out soybean

farmers.

And it's like, no, the rest of us are

being taxed. The rest of us are worse

off. And the soybean farmers though,

because Trump refuses to accept the

reality that Americans pay tariffs that

he levies on Americans.

The soybean farmers getting bailed out

partly because their collateral damage

from counter measures from China. Now,

the retaliatory tariffs will continue to

hurt us for as long as they're in place.

So, that's very much like the effect on

consumers. But there's one more thing I

think it's really worth considering is

what's going on with so there are other

domains where we have pissed people off

in a way that has destroyed American

leadership for at least a generation. So

I you and I Scott work at an export

industry um education. We have kids

coming in from all around the world who

want to pay 40 50 in your case $60,000 a

year to be blessed by you.

>> 68

>> 68. See you're worth a lot more than I

am. I teach you a state school. Um,

>> and I just want to add to that 95 points

of gross margin. I can't think of a

single product globally that has that

price point with those levels of gross

margins.

>> And let's think about this. These

highquality jobs, let me now interview a

professor. Professor Galloway, uh, does

your back ache at the end of the day?

>> It's the opposite of dirty and dangerous

work. I mean, Justin, this is this is

the dirty secret.

All the young kids like Ed want to go to

work for Google and Bane. They don't

realize if they have any talent and they

go into academia, it's a fantastic job.

>> Well, it's a few zeros less than the

paycheck, but it's immensely joyful.

>> I believe anyone in economics or finance

or at a business school who's any good,

if they're making seven figures from

different revenue sources means they're

not very good. [ __ ]

There's no Yeah, don't play humble with

me, brother. That's not I see you on

MSNBC almost as much as I see 30 under

30 at Elson.

>> And I got to tell you, once you get that

sweet MSNBC money, it goes straight to

my Lamborghini payments.

>> I think it's a great profession and

that's where you were headed. I think

it's a great job.

>> These are beautiful jobs. these are jobs

I want my kids in.

>> And it has the soft power ROI of people

who come and take your class go home and

they love America and they like you and

they like Michigan and they want to they

don't want to declare war on us and they

want to send their kids here and they

want to do trade deals with us. It's got

incredible knock-on effects, I think.

>> And these are the places that Google's

founded and the places that Facebook's

founded and the places that Microsoft

has founded and on and on the list goes.

These are the places that vaccines are

developed and cancer cures are developed

and and and on and on and on and on. And

yes, it's frustrating that some of our

colleagues in the humanities might spend

a few moments too a few too many moments

inspecting the lint in their navls, but

that's not the entire enterprise.

So these are great jobs and all and

these are export jobs and I can I

personally do everything I can to help

the president close the trade gap

because everyone who comes in and spends

50,000 at the University of Michigan and

another 20,000 on housing and so on is

in fact counted as an export. But I

can't do it because right now a kid

wants to come in and take a 4-year

degree, a doctoral program for instance,

and they're being told we will only

promise you visas for the next two

years.

>> Yeah, it's crazy. if they're from a

country, no matter what the size of the

bank balance is and how much they're

willing to blow,

if they're from a country that's a

little bit too

disfavored by the president, they can't

get a visa at all. Um, so this is an

industry that's being destroyed for no

reason. But mine is not the only

industry. No one is coming from Canada

or Europe to visit the United States

anymore. We have the Soccer World Cup

this year, but we will never have it

again under this sort of regime.

The every scientific society around the

world holds an annual world congress.

Usually they're held in the US because

we got these big hotels in Las Vegas and

they generate millions of dollars and

again soft power

and they can't hold their conferences in

the United States because we can no

longer guarantee people can get across

the border.

There are companies that want to start

engineering and creating incredible new

products, but they can't get H-1B visa

holders in. And so they're relocating

research and development across the

border to Canada.

So these are things that just drive me

up a wall. And but we we the American

voters, Trump will end, but we the

American voters have shown that we will

elect someone

twice who will put a ring fence around

the United States and refuse to engage

with the rest of the world. And the rest

of the world will not forget that.

And so I'm sure trade with Canada will

rise a little in the couple of years

after Trump, but I am absolutely sure

that the closeness of that relationship

will never be repaired, which has

immediate economic impact before we even

start to talk strategic.

>> So when we just summarize like 2025,

if I had to summarize it in maybe two

words, it would be AI and tariffs.

>> Actually, I want to take tariffs out and

I want to say okay,

>> incompetent governance. I mean, we have

had fools at every level of government.

The idea that Cash Patel

is going to help find the the guy who

gunned down people on Bondi Beach is

absurd on its face.

>> Cakistocracy.

>> We have fools and charlatans at every

part of our government. And Scott, you

said kakistocracy because you also want

to say thieves as well.

>> And you're absolutely right. They are

tearing down institutions. And the good

thing normally is that you can undo what

the last guy did. But the thing is

building takes time and energy and work.

tearing down's easy. And so none of us

know how long it will take to So it's

been the destruction of American

institutions. And if you want to be

melodramatic, and I'm not very good at

this, the destruction of the foundation

of American greatness.

>> So those were our themes for 2025.

um if you had to make predictions or

just overall thoughts on the kinds of

themes that you think are going to drive

the story of the economy and of

economics in 2026. What do you think

they'll be?

>> I agree AI is going to continue to be

wildly important. Maybe we'll actually

figure out where we're at once we've got

all these data centers. Maybe we'll

figure out if there was some froth at

the edge or if it was a bubble or or or

what was going on there. we'll get a

stronger sense of what the rest of the

world's going to do given us. If you

remember in the wake of the co pandemic,

there were these new words like

onshoring and friend shoring. We don't

hear those words in America anymore, but

you hear them in every other capital

around the world, which is countries are

trying to reduce their including

explicitly Mark Carney has set explicit

quantitative targets. They're trying to

reduce their exposure to the United

States and we'll see how enduring those

changes turn out to be. if there's going

to be, for instance, large scale trade

deals or closer alignments that exclude

the United States. Um, many people look

forward to 2026 and say, "Well, it's

going to be the midterms. Some of the

destruction will stop." But here's where

I'm a little less optimistic.

Nothing Trump has done apart from his

budget went through Congress. He has had

no interest in Congress. So, even if

Congress were to flip, what would

happen? they'd have investigations and

discover that the guy was destroying

American institutions,

which you can already read about in the

newspaper. So, um, the fact that it's,

you know, it could be, you know, past

administrations have said, "Oh, we don't

have the house. How much can we do with

with executive action?" And they managed

to find a flurry of activity for 3

months and then they get to the bottom

of their playbook and there's nothing

left to do. It is possible he's picked

the last executive action apple off the

ground and there's no more that will

fall. Although the creativity of these

guys and their disdain for standard

legal interpretations

means a year in they're still going at

it and they don't look like they're

slowing anytime soon. Remember the West

Wing that got destroyed just by bringing

in bulldozers. Um the east wing, sorry.

Um I don't actually care about that

building. I think it's a metaphor. Um

and that metaphor I think speaks very

very loudly. So

I, you know, look, the the honest thing

to admit is none of us know. Um, the

second most honest thing to admit is

whatever you saw happening last year is

probably your best bet for what's going

to happen next year. And then the third

rule of thumb is everyone who has a

complicated story for what will play out

next year is a little bit too cute and a

little bit too clever because the the

world is more complicated than that,

which just means go short everyone

else's prediction. If the next or

someone running for president said,

"Give me a country or benchmarks or role

models for really thoughtful economic

policy and fantastic economic adviserss,

Fed chiefs." What countries or regions

do you point to?

>> Historically, I would have spoken about

the United States and that's because I

would have looked at personnel and the

quality of our debate. The quality of

American economists, whether you love

them or not, is extraordinary. Um and

the vibrancy of our debate and part of

the reason our debate is so vibrant and

so well informed and so keenly debated

is because this is such a big country

and there are so many people debating it

so many more than my native country of

Australia.

So I would have said based on personnel

let's look to the US and it turns out

that you need to go a step further

beyond that because if the people are

here but the institutions aren't you're

screwed. So then the standard center

left answer is always look to the Nordic

countries. um you know they um have

healthy welfare states

and a real commitment to looking after

each other. There are deep questions

about how much one can apply that to the

United States. Those questions are these

are often ethnically homogeneous

countries and if everyone looks like

each other, no wonder they can all look

out for each other. I'm not sure I'm

that pessimistic about our ability to be

racelind.

Um but maybe I should be. Um so then

that leaves me with some boring

countries that I happen to love. One is

Australia where we get a lot of things

right wrong but a tolerable number of

things wrong. We have a very strong

two-party system. We have a profound

commitment to democracy. I um actually

I'm going to plug something if I may. I

gave I was just back in Australia a

couple of months ago. I gave they have

like a the big annual public lecture

series. It's meant to go to someone

fancy but they chose me instead. And it

was a great honor. It was it's called

the boy electors. Um and I actually gave

a speech entitled Australia is freaking

amazing. That speech is a love letter to

the underlying institutions that

recognize the mistakes that we make but

says fundamentally we are all in favor

of democracy. For instance, we don't

have gerrymandering in Australia. We

have a an independent electoral

organization that that draws the

districts and everyone trusts them to do

the right thing and they do the right

thing because everyone trusts them. We

vote on a Saturday. We have compulsory

voting. We have uh preferential voting

so that everyone's vote counts. We It's

this the speech is this intense love

letter. Um we have an independent public

service that that talks without fear or

favor. Um but it's not just Australia.

That's Australia is actually a mismash

of British institutions, American

institutions in our own colonial

history. you see a similar mishmash for

instance in Canada as well which strikes

me as a a relatively well-run coherent

economy. Um we have you know you

actually see it over over the last over

this week we had a tragic shooting at

Brown University that led to an

outpouring of thoughts and prayers and

nothing else and we had a tragic

shooting in Sydney in Bondai Beach which

has now led immediately to a meeting of

national cabinet which is the equivalent

of every governor meeting with the prime

minister

to change gun laws.

>> I mean just to press pause there it was

a single bolt action and a shotgun. It

could have been 150 people, not 15, had

that taken place in America. And you

guys have this terrible habit of having

a mass shooting every 27 years. We have

one every 27 hours. I mean, it's just I

I said this and I'm not just kissing

your ass, Justin. I I'm like, can we put

the management team from Australia? Can

we do a hostile takeover Australia and

have their management team run our I

mean, you have really wellrun

government. your super annu I forget

it's called super return fund

>> superanuation

>> I mean it's just it feels like uh bodily

autonomy

you know not this this like these cudgal

issues around uh transgender rights an

elected populace that isn't 130 years

old

>> and the social media laws

>> these social media laws now granted

you've kind of been or Australia has

kind of been um I don't know China's I

think it's it's good to be regionally

resourcerichi and regionally located or

proximity to China, but they've done an

amazing job. What would what about

places like and I agree with you on

Northern Europe, but what about places

like and it's a different model, but a

Singapore and I'm curious if you think

China's a well-run economy.

>> So, first of all, I want to summarize

everything you just said, Scott, is

hugging Australia and you should.

>> Great huggers.

>> There you go. True story. I I love

hugging and I'm actually quite

affectionate and I don't do it at work

anymore because I'm so much older than

everybody else. So, I don't want to

creep anybody out, but as soon as as

soon as I someone's worked with me for

two or three years, I become a I become

a hugger. I was just back home. I uh

group of men who I we all get together

and discuss life. And one of my mates,

Dan, taught me he just learned he went

to a retreat and he said, "What you want

to do is you want to hug someone and

then hold it for the full breath in and

then out." It was beautiful. I'm just

saying, Scott, next time you hug, do the

full breath cycle nice and slow. The

other person will feel your chest expand

and contract. It will feel oddly long

and no one's sure why. Make sure you've

got consent,

but uh I took hug 101 from my mate Dan

and it was a good hug. He gave me a

great hug.

>> This is not where I was expecting to go.

>> This is more important.

>> It is more I I 100% agree with you,

Justin. All right, last question, Ed,

and then we're gonna then we're gonna

hug it out.

>> I guess we've talked about our outlook

for 2026 a little bit. I guess my

question would be,

it's been a little bit of a depressing

episode.

>> I mean, we ended on hugs.

>> We ended on hugs. We'll end on another

nice note. What are you most optimistic

about in 2026? What do you think could

go right this year?

>> So, I want to continue the hug. Um,

Scott, one of the things you've been

talking a lot about is the role of

masculinity in men.

This group I belong to in Australia,

it's quite beautiful. Every Wednesday

you meet on the beach and you work out

for 20 minutes because men are not very

good without some endorphins or alcohol.

Then we gather in a circle and we talk

deeply. We talk about what's going on

with our lives. And the other men in the

circle have learned their job is to

listen.

And then we all run in the ocean even in

the middle of winter. And then we all go

for coffee.

>> That's nice. And then my mate Dan

teaches me how to hug.

Why do I tell that story? When I look

around, I can't tell what's me aging

versus what's the world changing because

both happen at the same time. But when I

look around, I see people who are

interested and excited to reinvent

masculinity.

Men who hug. Um, and that fills me with

tremendous excitement because there are

so many toxic things associated with

masculinity. But those who were out

there trying to reinvent it, I tip my

hat to you.

>> Justin Wolfers is a professor of public

policy and economics at the University

of Michigan and a regular contributor to

I think every TV network in the world

right now. I Justin, can you make it

stop? I can't turn on the TV without see

you. I mean,

>> I just want to teach the world economics

and the problem is people keep raising

questions.

>> There you go. We appreciate your

contribution to the prop pod over the

last 2025 and look forward to seeing

more of you in 26

>> 100%.

>> Thanks Justin. Happy holidays.

>> Thanks both of you. Take care.

>> What do you think? He's always the best.

I'm waiting for the Justin Wolfers

podcast. I mean, our research associate

Don Jalon Pedest uh the other day he

said every minute spent not podcasting

he's he's losing money which is very

true.

>> Yeah. He's one of those guys though that

I don't understand and that is he's more

interested in self-actualization and

purpose and meaning than money. So I

can't really relate to guys like that.

>> Yeah.

>> He's he's one of these I want to add

value and be happy kind of people that I

don't understand.

Um, yeah. I'm like, Academia has a

platform to make serious bank. And he's

like, what? I just teach kids and do

research.

I'm like, I'm like, advise Monty Burns

on the next nuclear power plant. Um,

actually 25 has been a big year for him.

I had never heard of him at the

beginning at 25 and now he's everywhere.

>> What did you make of what he said about

the year and and and the grade on on

this administration so far? I mean, I I

think my big takeaway, and you know, I

think we all probably just agree with

this, but the extent of the damage,

which we haven't seen yet, I feel like

everyone's looking at the year and being

like, "Oh, it's fine." You know, maybe

Trump's crazy, maybe he's doing some

crazy stuff, but look, the economy is

okay. And then it we interestingly then

justify his ridiculous policies because

we look at what's happened in the past,

you know, six months as evidence that

it's fine. My big takeaway is like this

is going to show up years from now,

perhaps even decades. Um, and it's going

to be extremely damaging. I just want to

get your reaction to what he said. You

know, Biden lets in a quarter of a

million people in one month by just

raising their hand and saying asylum. I

think that's, you know, running into a

wall head first. You break your nose.

Your nose is going to heal. You can

repair. I feel as if what Trump is doing

is exposing the nation to radiation

and and you're not going to feel

anything, but in 20 years, the nation's

going to have leukemia. And that is not

not bringing in human capital, the most

talented human capital, forcing our

trading partners to develop new supply

chain routes around the US. There's the

next president, whether it's JD Vance or

Governor's Newsome or Shapiro or pick

your Democratic candidate. There's no

way they're going to be able to repair

this [ __ ] for years. They're going to be

like, go back to Canada and say, "We're

sorry." And I'm like, "Sorry, we have

new trade relationships with South Korea

and Brazil and China, and it's working

out really well." And so what he said

that I, you know, this is, it's like if

you ask Chad GPT, how would I undermine

if I were the devil? Jonathan Hyde asked

us, if I were going to try and destroy

American youth, what would I do? And he

said, you would do it with dance videos

and, you know, and Tik Toks and it

basically described social media. And I

feel as if you said, okay, I really want

to [ __ ] America over the medium and the

long term. It would be okay massive

deficits that reallocates money to the

wealthiest 1%.

Um, a series of economic policies that

destroy trade relationships that took

decades to build. You know, we got a

check there. Discourage the best and

brightest from coming to America to

build companies and do medical research.

Check. Did that. I just feel as if it's

almost sort of in a weird way like

elegant the way they are figuring out a

way to create a legacy of of uh a lack

of prosperity. And it the the strange

thing is is that we're transferring all

this money to the 1% and I don't think

what people have come to fully recognize

is that the 1% no longer really have a

vested interest in the United States.

And there's this notion that they should

be smarter because people are going to

show up with pontoons or I'm sorry

pitchforks and lanterns about 10 5 years

before that happens they're piecing out

to Dubai, Milan, London somewhere else.

The the thing about the 1% especially

the 0.1% is they're really mobile. You

know France gets angry at rich people

imposes a wealth tax. Bernardo can have

a really nice life having a place in

Brussels and spending time in the south

of France or in Capri. the really

wealthy will take advantage of the

monetization of everything and the flow

this massive income inequality and this

regulatory policy that's like or

government or economic policy that's say

try and figure out a way to put as much

money in the winner's pockets the 1% and

then when the 1% are sitting on a

decaying a country of decaying rights

decaying infrastructure decaying

education polarization anger they'll

just peace out to a beautiful place

somewhere else and buy their rights and

buy their freedoms. So there's something

I feel like America to a certain extent

is kind of being a little bit hollowed

out from the inside out. And then where

I try to be optimistic is what um

Heather Cox Richardson says and that she

says that America has faced a lot of

these kind of constitutional crises or

really um I don't know deprave is the

right word but moments where the the

metal of our constitution has been

tested

and we've always bounced back even

stronger whether it was slave owners

controlling the nation whether it was

the great depression whether it was

interning Japanese families But the

thing I worry about is that the people

with all the capital are going to peace

out to another nation and that we're not

going to they're going to leave behind

them a polarized society with a with a

der of resources. Um, so I'm I'm still,

you know, like Warren Buffett said, you

never want to you never want to bet

against America, but I just think he

Trump is exposing the nation to

radiation, and even if it doesn't feel

that bad right now, it's going to it's

going to hurt people, you know, a lot of

people. I the real impact of Trump won't

be felt till after he's dead.

>> Yeah, I think that's sort of the big

question that I had is when is it all

going to come due? Whether it's AI in

the bubble behavior that we're seeing,

whether it's the tariffs, whether it's

the deficit spending, whether it's

ruining our reputation on the global

stage as a reliable trade partner and an

ally, all of these things are obviously,

as he puts, destructive inputs. And the

question is when do you start to see it

in the outputs? Um, I don't know the

answer to that question, but I guess the

question that I'm thinking about going

into the year is, will it come due in

2026?

Is that a possibility?

I fear it might be. Thank you for

listening to Property Markets from

Profit Media. If you like what you

heard, give us a follow and join us on

Monday for our annual Ask Me Anything

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