Tariff Policy Critique: The podcast discusses the administration's evolving tariff policies, highlighting that these have left both the U.S. and its trading partners worse off, with tariffs on American consumers remaining higher than before.
Economic Impact: Joel Griffith emphasizes that the tariffs have led to increased costs for American families, estimating an additional $400 per year due to the India trade deal alone, and criticizes the rationale behind these tariffs as contradictory and economically damaging.
Trade Deals with Allies: The discussion highlights that recent trade deals with allies like the UK and Israel have resulted in higher tariffs, harming both U.S. consumers and foreign exporters, with no clear benefits from these agreements.
Reciprocity Argument: The podcast critiques the administration's justification of tariffs as reciprocal, pointing out that U.S. tariffs are significantly higher than those imposed by trading partners, undermining the reciprocity claim.
Revenue vs. Growth: The conversation explores the administration's focus on tariff revenue as a positive outcome, contrasting it with the negative impact on corporate profits and economic growth, which are crucial for job creation and prosperity.
Redistribution Concerns: The podcast criticizes proposals like Senator Holly's tariff rebate plan as redistributive schemes that do not compensate small business owners or middle-class families adequately, instead benefiting non-working families disproportionately.
Policy Inconsistencies: The discussion highlights the inconsistency in policy goals, such as promoting capital investment while imposing tariffs that negate these incentives, leading to a lack of coherent economic strategy.
Free Market Advocacy: The podcast concludes with a call to uphold free market principles and resist protectionist policies that threaten economic freedom and growth, advocating for a return to first principles in economic policy.
Transcript
Capital Record, where we defend free enterprise and capital markets because we believe in the dignity of the human person. Hello and welcome to David Bonson's Capital Record, brought to you by National Review. I am very pleased to for the third time this year be uh bringing on a special guest this week. Uh, not only am I happy to have Joel joining us, but I also am particularly happy that I don't have to talk about tariffs all by myself this week. If you look through the 2025 history of Capital Record and some of the different episodes we've done, sometimes little 10-minute monologue, sometimes a bit longer, but there's been a good half a dozen, um, podcast I've done this year here in the Capitol Record to address the issue of tariffs and different concerns, critiques, um, and comments about the policy. One of the reasons that there's had to be more than one is that the administration has had more than one iteration of what their policy intentions were. They themselves have moved the ball several times. I don't expect that that's actually over yet itself. Uh there's also been a lot more than one rationale for tariffs that's been offered and so multiple ration have had to be critiqued because tariffs and I did a whole podcast about this moving ball that tariffs have been justified as a necessary policy response to uh low domestic manufacturing or to national security issues or to uh unfairness in global trade deals or to human rights abuses. So to the extent that there's been a lot of different reasons, some of which are contradictory from one another uh given but for reasons behind tariff policy, it's required more than one response. Uh what my guest today has done a wonderful job at is staying on top of the various concerns with tariffs as well as critiquing various adjacent ideas that have come about and uh as a result of the overall tariff conversation and and in our conversation today we'll address an article he recently wrote in Barons about one particular kind of offshoot of the current tariff moment but mostly to take the microphone out of my mouth and allow somebody else a sane voice to also join in a sane critique of the concerns many of us have around the administration's tariff policies. Uh I am very privileged today to welcome to Capitol Record Joel Griffith. Joel currently serves um at the Advancing American Freedom Organization. He is a well-known uh author speaker on not only this particular subject but various aspects of policy uh e economic policy and whatnot. He has done some time at the heritage foundation and now is a senior fellow at uh vice president's advocacy organization that is advancing American freedom. uh good friends of National Review uh and and I think a tremendous ally in the cause of freedom, which is what we're here to advocate in the Capitol Record. With all that said, Joel, welcome to the Capitol Record. >> Hey, thank you for having me. I'm a big fan of yours, as you know, and of course of National Review. Glad to be on. >> Well, you heard kind of the long setup there. apologize for the the lengthy, you know, introduction, but I wanted to get to where we kind of stand in the current tariff moment as you and I are sitting here recording and and luckily this uh podcast is going to be airing very soon after recording. So that takes away some of the risk where sometimes you can record a podcast on a Monday and by Thursday, Friday, you know, three, four, five days later, a lot has changed in what is being said about a deal with India or the reason for a deal with China or whatnot. I hope a lot doesn't change overnight for us, but where things stand now, Joel, what is your general take on what the administration has done with a lot of these deals that have been announced? um a sort of halfway deal thus far announced with China and a little bit more than halfway announced with Japan, uh Korea, United Kingdom in the European Union. >> Well, the irony is that each and every deal that has been announced has left us and our trading partners worse off than they were prior to the beginning of the year. Now, thankfully, some of these so-called deals have resulted in tariffs on American consumers being slightly lower than they were in the week prior to the deal. But that doesn't change the fact that if you compare the tariff tax that American consumers are paying today post trade deals, those tariffs are far higher than they were prior to Trump becoming the 47th president. And uh to your question specifically on India, that so-called Indian trade deal left tariffs of nearly 50% intact on most Indian products. And I ran the numbers with my team over at Advancing American Freedom. And we're estimating that that will be close to a the India trade deal alone will result in American families paying about $400 more per year on Indian imports than they were just one year ago. >> Now, is the administration saying that the India deal in particular is the deal or that the 50% represents the nondeal tariff rate because there isn't a a deal? In other words, are they still using the we're negotiating line to get to a point or is 50% the expectation for status quo? Well, it's it's it's a blend because that 50% is 25% so-called reciprocal tariff and then there's another 25% that is being imposed on Indian imports as a penalty on them for importing too much Russian oil. And we can, of course, good people can disagree about whether or not we should be restricting Russian oil exports. I'm actually in favor of putting restrictions on Russia as a as a villain in the world. Um, but whether we should be punishing American consumers and families for an act that India is taking, simply purchasing Russian oil, that does not seem to have the desired effect. If you look at just this past week, you have the Indian president who has been a key ally of the United States in the region. He's been overseas with multiple dictators, including Putin and including the Chinese Communist Party dictator. He's been hobnobbing with them and actually cementing further economic deals. We are driving away a key ally in the region. And to what end? And right now it does seem that to your point the the Modi meetings with Putin and Xi um that posture doesn't seem uh let's say that they're getting more adversarial and and our um approach to it has worsened not uh improved the matter. But then when you look at something that's a more traditional and black and white definition of ally, uh, Canada, uh, UK, Japan, Korea, South Korea, of course, these situations also appear to have resulted in worse, not better deals. Um, so using just the examples of allies and again an increased cost to American importers, what is your general take on on the good, bad, and ugly of what we have accomplished with those particular uh geographic blocks? >> Well, unfortunately, I I can't say there's any good with this. It's just a mix of bad and ugly. So, I'll give you the ugly. I'll give you the bad. Ugly is worse than bad, right? So the bad would be the deal that we reached with the United Kingdom, but we're still left with a 10% tariff tax on British exports to the United States that harms our consumers and of course it harms British exporters as well. Um, an example of outright ugly would be what the administration did on truly one of our our our dearest allies in the world and that's Israel. We share a lot of common enemies, a lot of common friends. Uh we have a lot of Americans that are living in Israel and Israel and the United States have had a free trade agreement in effect since 1985. Over the next four 40 years, the remaining tariffs that Israel imposed on us and that we impose on Israel went to almost zero. In fact, the average tariff that our products face going into Israel last year was far under one percentage point. Well, what did we did do with Israel? Well, Israel this year said they'll drop all remaining tariffs on all United States exports. It's a small amount remaining, but they said we'll drop all of it. And in response, the Trump administration just imposed a 15% tariff on Israeli exports. That harms our ally. It's going to destroy tens of thousands of Israeli jobs potentially. And it harms us as well, especially as we import quite a bit of Israeli technology and we actually import quite a bit of Israeli wine. We estimated over at AAF that that Israeli tariff trade deal that's going to result in another 40 bucks a year for American families. A relatively small amount, but it underscores that even the trade deals that were me that we are reaching with our allies leave us in a worse spot than we were just a year ago. >> Well, you mentioned that they were essentially offering 0%. they were awfully close to 0% even before every nobody would deny the uh ally nature of the relationship between US and Israel. Um Switzerland is another example of a country that the tariffs that we are wanting to impose are much higher than what they have imposed on us largely because what they've imposed on us is essentially been near 0%. Now some of us would point out that the entire conversation even when you go to Vietnam, South Korea, Taiwan and others um also undermines the absurdity of the reciprocity uh justification because all of this is a byproduct of having rejected and walked away from the TPP discussions of about 10 years ago where we were really headed to 0% tariffs with a lot of these particular ally nations. Why did the administration ever feel the need to tell us that one of the objectives was reciprocity if with such an obvious example of Israel, the one you've used, Switzerland, etc., reciprocity had nothing to do with this whatsoever? What was the reason to ever go down that path? >> That's a difficult question because the data are so clear. Uh we know that our trading partners on average have imposed roughly a 2 and a.5% tariff on our exports which is actually I should mention the tariff that they've been imposing on us is actually uh lower than the tariffs that we've been imposing on our trading partner. But that's besides the point. The so-called reciprocal tariffs have on average been about 10 times the tariff rate that our trading partners impose on us. There's nothing reciprocal about it. There's nothing in the definition of reciprocity that suggests that the tariff rates that we're imposing is anywhere close to what they're imposing on us. Um, you know, I've heard a number of folks um talk about the fact that well, we're putting in place these reciprocal tariffs that are higher than the tariffs imposed on us because Europe, for instance, has a value added tax. And it takes a, you know, several minutes to explain why a value added tax is not a tariff. why the sales tax is not a tariff. It takes some explaining to do. So, the best I can think of it and you know, and I hate to say this, I like to attribute good intentions to everybody, but calling these reciprocal tariffs allows the administration to get away with the fact that they're actually imposing much higher tax rates on American consumers. And I think it's unfortunate because at a time when so many people in the public are paying attention to trade, this would be an excellent time to do what you're doing. I wish politicians are doing this, explaining to people that over the last 40 years, the middle class now is far better off. We're actually producing nearly twice what we were producing 40 years ago. And while fewer people are employed producing products, it's allowed a greater percentage of Americans to be in far greater paying jobs precisely because fewer of us have to be engaged working on a factory line. Well, I have a little theory I'll run by you about this kind of bait and switch on the reciprocity, and I think it speaks to the lay of the land um with the right in in the American political landscape right now. And and I had uh Richard Ryen Sean last week and and we had a real candid conversation about where a lot of these things lie. But right now, when I say bait and switch, where the administration's largely gone to and where I see certain defenders from the right, um, so-called right of the tariff regime, where I see them going is look at how much money we're generating for our country with these taxes and look how much the Treasury Department is bringing in because of these tariffs that have not been ratified by Congress. And I think that if the administration had started with that that they knew the the right is not going to get excited about um taxes about revenue to treasury. That's just sort of so far removed from the orthodoxy of conservatism that it was unsellable. And yet some sort of poorly reasoned, poorly defined um loaded rhetoric about reciprocity, about fair trade, about America getting ripped off. That had some currency to it. It wasn't tied to facts or logic, but it had a a sellability to it. So, I think they started with that and then now having gotten a bunch of people to cross the Rubicon into defending this nonsense, they know they can't really go back. So, they've moved out of the pretense of reciprocity and into what would in most times and places of my 51 years on planet Earth been considered heresy in the conservative movement. that we're supposed to celebrate how well the government's doing at collecting taxes from American businesses. Yet, that is exactly what has happened. And I don't mean implicitly. I mean explicitly. It's a tweet a day right now coming from a high-profile person echoing what the president himself said, which is that America is getting rich by American businesses being taxed more. I cannot believe the political party of supply side economics is falling for this utter nonsense. >> Yeah, it is a bit jarring to see the White House I I I saw I believe it was a tweet from President Trump just uh maybe earlier today with a chart of the escalating monthly tariff inputs. And of course those that are cheering on these tariffs, they continue to deny the economic reality that it's American families and businesses that are paying the tariffs. Right? The whole entire mantra is we have been getting ripped off from these free trade deals and now we are forcing these foreign companies and foreign governments to pay us to be allowed to sell their products here. And we're beginning to see, of course, that that's not the reality. a lot of the the earnings reports that are coming in now, including I did a um a write up on General Motors just the other day showing that as General Motors tried to absorb some of these tariff costs, their net income fell by 40%. There's very little buffer left at many companies to absorb the costs of these tariffs themselves. Especially when you operate on a five to 10 percent profit margin as many automobile manufacturers do, as many grocerers do, there's very little cushion to absorb the entire cost of these tariffs long term. And you know, anecdotally, I was talking to my sister-in-law the other day. She's a financial officer at a clothing company, a nonpublicly traded clothing company. And I was talking to her about this problem they're having. and their some of their senior leadership, they were under the false notion that they could get vendors to absorb a third to one half of these tariff costs. Guess what? Those vendors aren't absorbing a single dollar. The entirety of that cost is being passed along. And to give you an example, the blue jeans have gone from 59 bucks at their firm to 69. Their net income is now sliced by nearly in half. And there's going to be some serious repercussions to follow now with American employees. And my fear is that there, you know, there there's been a delay in really feeling the impact of this because businesses were able to stockpile inventory, but the pain is going to become acute in the coming months if these tariffs are not rolled back. Well, and one thing I would add that I'm not sure I've spoken about a ton here in the capital record, but I've uh written about and spoken about a great deal in my investmentoriented work with dividend cafe is that when people are saying the cost will not get moved on to consumers and I fully accept the idea that various products have different elasticity than others, various uh price elasticities that um some costs are easier to move on than others. That that is not um a good argument for tariffs. What we are saying in that case is good news. The consumer won't see a price go higher because company profit margins will go lower and company profit margins drive hiring, wage growth, factors of production, capital investment. um what we on the right have historically referred to as the sources of economic growth. So we kind of are in a pick your poison mode here where there's either an impact of the consumer on price or a declining corporate profit. And in both cases they strike me as being extremely anti-growth and anti- prosperity and anti-productivity. And that's the part I can't wrap my arms around. If we said this is a matter of crucial national security, which some com particular components are, um, then I don't really see tariffs as being a solution because I don't really want to get paid to compromise our national security either. But then what I found out from the Trump administration was no. In fact, what we're doing to resolve our differences with China is a deal where we're going to sell them more semiconductors and they're going to sell us more rare earth minerals. We're going to become more dependent and more coupled, not decoupled. I almost feel like the people should be most upset are not those who have held on to free marketeteer orthodoxy guys like you and me but people like you know for example Kevin Roberts at Heritage tweeted out we're headed to total decoupling with China and and I feel like a lot of the guys that have been defending the Trump administration have been left out to dry by what the administration's done. They've undermined their thesis. They've said, "We're going to fight for domestic manufacturers." Then turned around and said, "But we're giving carveouts, waiverss, exemptions to some of the key manufacturing industries." I cannot really understand who's supposed to be happy here other than those on the left who really like more government revenue. There at this time seems to be more government revenue, but as you know, there can't be more government revenue unless the trade is happening. And if the trade is happening, then that means that no domestic industries are being protected whatsoever. So, I'm at a loss not only as an opponent of the of the policy. I'm at a loss as to figure out who exactly is supposed to be happy. >> No. And and lost in the shuffle on all this too is is the rule of law. And I'm one who recognizes the threat that we have from China. But the way that we address that threat is very crucial when we're engaging in now a trade war with China with indiscriminate tariffs placed on all exports coming to our country. That's an enormous tax hike. But then you double down with partial nationalization of intel without congressional authorization. And of course, we're talking about socializing pieces of the means of production as a mechanism to counter China supposedly. And number number third here, >> by the way, when you say all exports in China, my understanding is uh Apple's exempted, right? >> Yeah, there is a sweetheart deal for now in place for Apple. I don't know how that happened. Uh >> yeah, something about the swamp. U but we've got these two instances, right? Tax hikes on the American consumers, partial nationalization of Intel, and the third related component shaking down Nvidia um in order to uh allow them to continue exporting sensitive technology to China. we are going about this the wrong way and we're violating multiple statutes and violating constitutional order in the process. >> Well, I guess then the good news is that there's a bunch of money coming in that they can rebate to the American taxpayers. This again speaking to the sort of internal contradictions of the ongoing moving arguments. Well, at one point we're told we're going to reduce the deficit a lot. Um, and then now there are those advocating for the idea of taking tariff money and rebating it to the American taxpayers. You've had some thoughts on this idea. Uh, besides the total inconsistency and and incoherence, maybe give listeners a little further unpacking as to why this rebate idea is so comically absurd. >> Well, well, sure. Well, this all goes back to several months ago when President Trump piloted the idea of potentially giving Americans a um um maybe a personal check as a portion of all the tariff revenue that has been collected. Well, Senator Holly, the supposedly a Republican senator from Missouri to try to decided to run with this idea, actually came up with a piece of legislation articulating how this supposed redistribution of tariff revenue would occur. And >> not not to interrupt Joel, I should clarify for listeners, this is not to be confused with the aforementioned Senator Holly's legislation co-authored with Bernie Sanders to put hard caps on what credit cards are allowed to charge. But I digress. >> Yeah, correct. Which incidentally, that proposal was even worse than AOC's proposal of two years ago on the on the rate caps. But so Senator Holly had this proposal. He said, "Yeah, let's run with President Trump's idea to give checks to Americans um to to to give to them what we're collecting in tariff revenue." Well, this actually is an enormous redistribution scheme. If you look at the fine print of Senator Holly's legislation, um it looks clear at first. He says, "Okay, we're going to take the total amount of tariff revenue that's being collected. we're going to divide by the total number of American citizens and that's going to give us the the the the total rebate. Well, it's not so simple as that. He takes that number and Senator Holly's proposal is to either increase that number or decrease that check based on how much money you make and how many children you have. So, it turns out that there's a very steep phase out in this tariff rebate proposal. As soon as you hit $75,000 as an individual, the amount of tariff rebate you're going to receive begins to steeply decline. And this results in this absurd situation in which you if you are a single parent, a mother or dad, and you're not working and you've got four children, you're going to receive more than $6,000 in tariff rebates. Not working, four children as a single parent. But if you're an upper middle class family, a married couple, you're each earning $140,000 a year, you've got two children, and they're in private school, you get zero dollars in tariff rebate. And um by that by that notion of it's a very redistributive uh system. It creates an enormous new uh um entitlement. And what's even more bizarre is if you're a small business owner, a lot of these small machine shops, for instance, it costs them three $400,000 to put in a new piece of machinery that you that often is imported. That new piece of machinery is costing that small business owner $100,000 extra in tariffs, that small business owner, no matter how much money they're making, they're see they're seeing none of this tariff rebate. If they're lucky, that's $1,600. So, this doesn't compensate small business owners for the cost. It really does nothing to compensate middle upper middle class families. But what it ends up being is another diversion of possibly tens of thousands of dollars per year to those who are not working. Well, um the other piece to this that is the uh one big beautiful bill act had supply side provisions for deductibility of capital expenditures that I think were reasonably progrowth and bonus depreciation and other things that now are being totally offset by this um the the issues you refer to the cost of tariffs. is offsetting the benefit of the very few but nevertheless real provisions in the big beautiful bill act that were uh tax um shall we say uh supply sideoriented and progrowth in the tax bill and and and this again gets to to this problem of a sort of intellectual incoherence whereby on one hand we're being told be really excited about the big beautiful bill it's giving incentive to companies to invest And on the other hand, we're being told, be excited that we're taking away the incentive to invest and collecting money from tariffs. Why not take away the tax deductibility of capital investment and and say we're getting rich by businesses paying more taxes that way? There's one side of the pool that is being emptied and another side of the pool being filled up. And it it it can't possibly be that the people involved in this don't understand it. It it just it seems to me to be a very duplicitous um notion. Now with Holly who's a a smart guy and I think wrong on most things. I think he knows exactly what it is, which is, as you point out, in this case of a proposed tariff rebate notion, rank disistribution and a backdoor way to pull from high earners to give doing something that we have repeatedly, going back to the Obama years said we're against, which is tax credits that result in refunds going to people who pay no taxes, which is one of the reasons that people were appalled by the audacity of the child tax credit at the level at which the Biden administration did it. That is redistribution by any other name, is it not? >> It it um absolutely is redistribution. Um and it's been proven um to to fail. And to your point about the businesses and one of the beauties of the one big beautiful bill is if you're a business and you're investing a million dollars in a piece of machinery, you can deduct that as an expense. And if you're in the 25% tax bracket, that's great. You saved $250,000 that year in your taxes by being able to immediately depreciate it. But if you're facing a 40% tariff on that piece of machinery, on the one hand, you're saving $250,000 on your taxes, but then on the other hand, you're paying $400,000 to Uncle Sam with the tariffs. It doesn't make sense. And with this redistribution um uh scheme, you know, with with some of these uh some of these populists in Congress that claim to be Republicans, their economic proposals are it's not just that they're not much different than those in the Democratic party. In many ways, their proposals mirror the extremity of the Democratic party. I mean, we're talking about this rebate plan where you're going to be giving potentially $8,000 per non per for some non-working families in new dollars from the federal government. And you combine that with the the MAGA accounts and combine that with now this new it's in the works over at Heritage Foundation for up to $17,000 per child and another tax credit. Um, this is redistribution. It does not end well. Doesn't just harm those that are making more money. It ends up holding the entire economy back. The other thing it does, Joel, is first of all, it's not going to pass. It's not going to get through. But then it leaves on the cutting room floor the argument for the left to use against us next time they're in power which will be some form of tax credit or redistribution or cockami idea around their social agenda that they will now say how can you be against it economically when it's the same blueprint of a plan you guys tried yourself. So, in the end, what Heritage wants, which is more procreation, they're not going to get this policy done for good reason. And they're giving a sort of um lending of the argument uh to the left who will then try to use it in a different capacity, whether it's something environmental or or for all we know, anti-procreation. But, but either way, um it's inviting the state into something that we can't afford its intervention. And I just am am truly mystified at what we're observing. >> Yep. I I I share the the the mystification and u and it's is it's quite unfortunate especially when we're able to look at examples not just in the distant past. We're able to look at contemporary examples of other nations who are currently have protectionist trade policies and we can see how it has stunted their own economic growth. We can look at countries like Hungary that have embarked on the attempt to use government dollars to spur procreation. We can see both how it's failed to achieve its goal and at the same time resulted in even more of government burden. These are this is not happening in the distant past of the cold war era. We're able to look at current examples of what these policies lead to. And yet our politicians who are paid to be aware and paid to learn and paid to actually legislate, they seem to be ignoring this. And even worse, they continue to outright fabricate the truth on national television. Well, I'll close this out with a quick comment on this notion that because Joel brought it up, this this idea, which I think actually originated in the precursor election from a Project 2025 uh uh position paper that now has in fact been advanced by Heritage. Now, I haven't heard anything from the Trump administration that they're behind it or support it. I have absolutely no doubt in my mind it would have no chance in either chamber of Congress to go through. But the notion of expensive paying people to have children where I I can't speak for Joel here. I'll speak for myself. I'm a big fan of people having children. I'm all for it and I don't want any policies that impede people having children. Um, but this gets to the heart of the matter for those of us who advocate for a free and virtuous society. That the virtuous society needs to promote procreation and cutting out from the freedom of society is not going to do anything to make that happen. In fact, what we have, if we want, which I think a lot of the folks at Heritage would like to see, if you want um healthy uh procreation in society, then you need to advocate for strong churches. You need to advocate for religious freedom. You need to advocate for good schools, for good marriages, for a whole host of circumstances that promote family. These are all things outside the legislative ability of Congress and they're outside the um executive branch of government. To go about believing that Washington DC is the first place to turn for larger families is one of the most anti-tovillian, anti- uh conservative, anti- Burkian concepts I've ever heard. And it has absolutely no chance of succeeding. There is not a single person in America that is trying to make their decision on whether or not they want another kid based on $4,000 of a tax credit. Um, this is a issue that speaks to moral, culture, family values, and when we confuse these domains, we get neither freedom nor virtue. Joe, I'll let you comment on that and and then we'll close this out here. >> Yeah. Right. and this Heritage Foundation proposal that I've seen some of the I guess some of the leaked documents there. We're talking $17,000 per newborn child. Um it's it's it's a massive massive new entitlement that's being proposed. And look, I grew up in the Midwest. Um >> is that 17,000 as a credit or the deduction? So 4,000 becomes the net benefit. >> I've seen it as a 17,000 outright credit equal to the current adoption credit. And that's in that's in the the executive summary and this is all I think recently has been all over the the uh the policy space Twitter sphere. Um so that that's it's a it's a it's a market new entitlement. And to your point about the the um the drop in fertility rate and what causes it. Like I grew up in the Midwest in a very religious community. We had a congregation of people. Most people were middle class. I would even say lower middle class. A lot of them lived in mobile home mobile home parks. Even those families were having we had we had five I'm the oldest of five in my family was a one one income earner household. We were not extraordinarily wealthy middle-ass family and we were not the biggest family in our social group by far. There were numerous other families with more children than we had living on middle class incomes in the Midwest. They chose to do that because they had a strong support network of a of a religious congregation. They had strong homeschool networks and they were deeply religious people and they made that choice. Um if you and and we know we know from the data that's out there that this drop in the fertility rate, it's not because of the lack of financial resources. We live in the most prosperous middle class society in the history of mankind and those that want to have children, including where I'm at right now at my brother's house, four children. He's in his 30s and they love it. doing this on one income and it's a middle class family. It's possible. Um, and my reason for delaying it has nothing to do with lacks of a tax credit. It's just not the state of life that I'm in. But to be proposing massive new expansion of the entitlement state to make us even more like stagnant Western Europe to resolve this problem, it's it's a it's a it's a misdiagnosis of the problem and it's a misdiagnosis that could stunt our economic prosperity for decades to come. Well, I couldn't agree more. And and one of the reasons that a guy like myself has always uh not voted Democrat is because I think they do things to stunt economic growth. But now here we are having a conversation about significant to the tune of hundreds of billions of dollars. a blended tariff rate that might have been about two and a half to 3% soaking wet um a year ago at this time that right now we're debating if it's going to be 14 16 17 maybe 18%. Significant increase uh significant uh addition of regulation. You brought up the Intel issue which was a big focus of mine a week ago. Uh nationalization, socialization of losses. Um, I I I just don't know what to say about this trend other than that we're going to continue resisting it, making the argument against it, and ultimately allowing the cooler heads to prevail that are rooted to the first principles we hold dear that we think will defend and uphold a free and virtuous society. Joel Griffith, thank you for your work in defending the free society. I hope you'll come back again and join us at Capital Record. Likewise, thanks for the opportunity >> and thank you for listening to David Bonson's Capital Record. Look forward to being with you again next week. Two episodes that will drop next week as we get into my favorite time of year, the fall, September football season, all the good things. In the meantime, thank you for listening to David Bonson's Capital Record.
Joel Griffith on Making a Bad Idea Tariffable
Summary
Transcript
Capital Record, where we defend free enterprise and capital markets because we believe in the dignity of the human person. Hello and welcome to David Bonson's Capital Record, brought to you by National Review. I am very pleased to for the third time this year be uh bringing on a special guest this week. Uh, not only am I happy to have Joel joining us, but I also am particularly happy that I don't have to talk about tariffs all by myself this week. If you look through the 2025 history of Capital Record and some of the different episodes we've done, sometimes little 10-minute monologue, sometimes a bit longer, but there's been a good half a dozen, um, podcast I've done this year here in the Capitol Record to address the issue of tariffs and different concerns, critiques, um, and comments about the policy. One of the reasons that there's had to be more than one is that the administration has had more than one iteration of what their policy intentions were. They themselves have moved the ball several times. I don't expect that that's actually over yet itself. Uh there's also been a lot more than one rationale for tariffs that's been offered and so multiple ration have had to be critiqued because tariffs and I did a whole podcast about this moving ball that tariffs have been justified as a necessary policy response to uh low domestic manufacturing or to national security issues or to uh unfairness in global trade deals or to human rights abuses. So to the extent that there's been a lot of different reasons, some of which are contradictory from one another uh given but for reasons behind tariff policy, it's required more than one response. Uh what my guest today has done a wonderful job at is staying on top of the various concerns with tariffs as well as critiquing various adjacent ideas that have come about and uh as a result of the overall tariff conversation and and in our conversation today we'll address an article he recently wrote in Barons about one particular kind of offshoot of the current tariff moment but mostly to take the microphone out of my mouth and allow somebody else a sane voice to also join in a sane critique of the concerns many of us have around the administration's tariff policies. Uh I am very privileged today to welcome to Capitol Record Joel Griffith. Joel currently serves um at the Advancing American Freedom Organization. He is a well-known uh author speaker on not only this particular subject but various aspects of policy uh e economic policy and whatnot. He has done some time at the heritage foundation and now is a senior fellow at uh vice president's advocacy organization that is advancing American freedom. uh good friends of National Review uh and and I think a tremendous ally in the cause of freedom, which is what we're here to advocate in the Capitol Record. With all that said, Joel, welcome to the Capitol Record. >> Hey, thank you for having me. I'm a big fan of yours, as you know, and of course of National Review. Glad to be on. >> Well, you heard kind of the long setup there. apologize for the the lengthy, you know, introduction, but I wanted to get to where we kind of stand in the current tariff moment as you and I are sitting here recording and and luckily this uh podcast is going to be airing very soon after recording. So that takes away some of the risk where sometimes you can record a podcast on a Monday and by Thursday, Friday, you know, three, four, five days later, a lot has changed in what is being said about a deal with India or the reason for a deal with China or whatnot. I hope a lot doesn't change overnight for us, but where things stand now, Joel, what is your general take on what the administration has done with a lot of these deals that have been announced? um a sort of halfway deal thus far announced with China and a little bit more than halfway announced with Japan, uh Korea, United Kingdom in the European Union. >> Well, the irony is that each and every deal that has been announced has left us and our trading partners worse off than they were prior to the beginning of the year. Now, thankfully, some of these so-called deals have resulted in tariffs on American consumers being slightly lower than they were in the week prior to the deal. But that doesn't change the fact that if you compare the tariff tax that American consumers are paying today post trade deals, those tariffs are far higher than they were prior to Trump becoming the 47th president. And uh to your question specifically on India, that so-called Indian trade deal left tariffs of nearly 50% intact on most Indian products. And I ran the numbers with my team over at Advancing American Freedom. And we're estimating that that will be close to a the India trade deal alone will result in American families paying about $400 more per year on Indian imports than they were just one year ago. >> Now, is the administration saying that the India deal in particular is the deal or that the 50% represents the nondeal tariff rate because there isn't a a deal? In other words, are they still using the we're negotiating line to get to a point or is 50% the expectation for status quo? Well, it's it's it's a blend because that 50% is 25% so-called reciprocal tariff and then there's another 25% that is being imposed on Indian imports as a penalty on them for importing too much Russian oil. And we can, of course, good people can disagree about whether or not we should be restricting Russian oil exports. I'm actually in favor of putting restrictions on Russia as a as a villain in the world. Um, but whether we should be punishing American consumers and families for an act that India is taking, simply purchasing Russian oil, that does not seem to have the desired effect. If you look at just this past week, you have the Indian president who has been a key ally of the United States in the region. He's been overseas with multiple dictators, including Putin and including the Chinese Communist Party dictator. He's been hobnobbing with them and actually cementing further economic deals. We are driving away a key ally in the region. And to what end? And right now it does seem that to your point the the Modi meetings with Putin and Xi um that posture doesn't seem uh let's say that they're getting more adversarial and and our um approach to it has worsened not uh improved the matter. But then when you look at something that's a more traditional and black and white definition of ally, uh, Canada, uh, UK, Japan, Korea, South Korea, of course, these situations also appear to have resulted in worse, not better deals. Um, so using just the examples of allies and again an increased cost to American importers, what is your general take on on the good, bad, and ugly of what we have accomplished with those particular uh geographic blocks? >> Well, unfortunately, I I can't say there's any good with this. It's just a mix of bad and ugly. So, I'll give you the ugly. I'll give you the bad. Ugly is worse than bad, right? So the bad would be the deal that we reached with the United Kingdom, but we're still left with a 10% tariff tax on British exports to the United States that harms our consumers and of course it harms British exporters as well. Um, an example of outright ugly would be what the administration did on truly one of our our our dearest allies in the world and that's Israel. We share a lot of common enemies, a lot of common friends. Uh we have a lot of Americans that are living in Israel and Israel and the United States have had a free trade agreement in effect since 1985. Over the next four 40 years, the remaining tariffs that Israel imposed on us and that we impose on Israel went to almost zero. In fact, the average tariff that our products face going into Israel last year was far under one percentage point. Well, what did we did do with Israel? Well, Israel this year said they'll drop all remaining tariffs on all United States exports. It's a small amount remaining, but they said we'll drop all of it. And in response, the Trump administration just imposed a 15% tariff on Israeli exports. That harms our ally. It's going to destroy tens of thousands of Israeli jobs potentially. And it harms us as well, especially as we import quite a bit of Israeli technology and we actually import quite a bit of Israeli wine. We estimated over at AAF that that Israeli tariff trade deal that's going to result in another 40 bucks a year for American families. A relatively small amount, but it underscores that even the trade deals that were me that we are reaching with our allies leave us in a worse spot than we were just a year ago. >> Well, you mentioned that they were essentially offering 0%. they were awfully close to 0% even before every nobody would deny the uh ally nature of the relationship between US and Israel. Um Switzerland is another example of a country that the tariffs that we are wanting to impose are much higher than what they have imposed on us largely because what they've imposed on us is essentially been near 0%. Now some of us would point out that the entire conversation even when you go to Vietnam, South Korea, Taiwan and others um also undermines the absurdity of the reciprocity uh justification because all of this is a byproduct of having rejected and walked away from the TPP discussions of about 10 years ago where we were really headed to 0% tariffs with a lot of these particular ally nations. Why did the administration ever feel the need to tell us that one of the objectives was reciprocity if with such an obvious example of Israel, the one you've used, Switzerland, etc., reciprocity had nothing to do with this whatsoever? What was the reason to ever go down that path? >> That's a difficult question because the data are so clear. Uh we know that our trading partners on average have imposed roughly a 2 and a.5% tariff on our exports which is actually I should mention the tariff that they've been imposing on us is actually uh lower than the tariffs that we've been imposing on our trading partner. But that's besides the point. The so-called reciprocal tariffs have on average been about 10 times the tariff rate that our trading partners impose on us. There's nothing reciprocal about it. There's nothing in the definition of reciprocity that suggests that the tariff rates that we're imposing is anywhere close to what they're imposing on us. Um, you know, I've heard a number of folks um talk about the fact that well, we're putting in place these reciprocal tariffs that are higher than the tariffs imposed on us because Europe, for instance, has a value added tax. And it takes a, you know, several minutes to explain why a value added tax is not a tariff. why the sales tax is not a tariff. It takes some explaining to do. So, the best I can think of it and you know, and I hate to say this, I like to attribute good intentions to everybody, but calling these reciprocal tariffs allows the administration to get away with the fact that they're actually imposing much higher tax rates on American consumers. And I think it's unfortunate because at a time when so many people in the public are paying attention to trade, this would be an excellent time to do what you're doing. I wish politicians are doing this, explaining to people that over the last 40 years, the middle class now is far better off. We're actually producing nearly twice what we were producing 40 years ago. And while fewer people are employed producing products, it's allowed a greater percentage of Americans to be in far greater paying jobs precisely because fewer of us have to be engaged working on a factory line. Well, I have a little theory I'll run by you about this kind of bait and switch on the reciprocity, and I think it speaks to the lay of the land um with the right in in the American political landscape right now. And and I had uh Richard Ryen Sean last week and and we had a real candid conversation about where a lot of these things lie. But right now, when I say bait and switch, where the administration's largely gone to and where I see certain defenders from the right, um, so-called right of the tariff regime, where I see them going is look at how much money we're generating for our country with these taxes and look how much the Treasury Department is bringing in because of these tariffs that have not been ratified by Congress. And I think that if the administration had started with that that they knew the the right is not going to get excited about um taxes about revenue to treasury. That's just sort of so far removed from the orthodoxy of conservatism that it was unsellable. And yet some sort of poorly reasoned, poorly defined um loaded rhetoric about reciprocity, about fair trade, about America getting ripped off. That had some currency to it. It wasn't tied to facts or logic, but it had a a sellability to it. So, I think they started with that and then now having gotten a bunch of people to cross the Rubicon into defending this nonsense, they know they can't really go back. So, they've moved out of the pretense of reciprocity and into what would in most times and places of my 51 years on planet Earth been considered heresy in the conservative movement. that we're supposed to celebrate how well the government's doing at collecting taxes from American businesses. Yet, that is exactly what has happened. And I don't mean implicitly. I mean explicitly. It's a tweet a day right now coming from a high-profile person echoing what the president himself said, which is that America is getting rich by American businesses being taxed more. I cannot believe the political party of supply side economics is falling for this utter nonsense. >> Yeah, it is a bit jarring to see the White House I I I saw I believe it was a tweet from President Trump just uh maybe earlier today with a chart of the escalating monthly tariff inputs. And of course those that are cheering on these tariffs, they continue to deny the economic reality that it's American families and businesses that are paying the tariffs. Right? The whole entire mantra is we have been getting ripped off from these free trade deals and now we are forcing these foreign companies and foreign governments to pay us to be allowed to sell their products here. And we're beginning to see, of course, that that's not the reality. a lot of the the earnings reports that are coming in now, including I did a um a write up on General Motors just the other day showing that as General Motors tried to absorb some of these tariff costs, their net income fell by 40%. There's very little buffer left at many companies to absorb the costs of these tariffs themselves. Especially when you operate on a five to 10 percent profit margin as many automobile manufacturers do, as many grocerers do, there's very little cushion to absorb the entire cost of these tariffs long term. And you know, anecdotally, I was talking to my sister-in-law the other day. She's a financial officer at a clothing company, a nonpublicly traded clothing company. And I was talking to her about this problem they're having. and their some of their senior leadership, they were under the false notion that they could get vendors to absorb a third to one half of these tariff costs. Guess what? Those vendors aren't absorbing a single dollar. The entirety of that cost is being passed along. And to give you an example, the blue jeans have gone from 59 bucks at their firm to 69. Their net income is now sliced by nearly in half. And there's going to be some serious repercussions to follow now with American employees. And my fear is that there, you know, there there's been a delay in really feeling the impact of this because businesses were able to stockpile inventory, but the pain is going to become acute in the coming months if these tariffs are not rolled back. Well, and one thing I would add that I'm not sure I've spoken about a ton here in the capital record, but I've uh written about and spoken about a great deal in my investmentoriented work with dividend cafe is that when people are saying the cost will not get moved on to consumers and I fully accept the idea that various products have different elasticity than others, various uh price elasticities that um some costs are easier to move on than others. That that is not um a good argument for tariffs. What we are saying in that case is good news. The consumer won't see a price go higher because company profit margins will go lower and company profit margins drive hiring, wage growth, factors of production, capital investment. um what we on the right have historically referred to as the sources of economic growth. So we kind of are in a pick your poison mode here where there's either an impact of the consumer on price or a declining corporate profit. And in both cases they strike me as being extremely anti-growth and anti- prosperity and anti-productivity. And that's the part I can't wrap my arms around. If we said this is a matter of crucial national security, which some com particular components are, um, then I don't really see tariffs as being a solution because I don't really want to get paid to compromise our national security either. But then what I found out from the Trump administration was no. In fact, what we're doing to resolve our differences with China is a deal where we're going to sell them more semiconductors and they're going to sell us more rare earth minerals. We're going to become more dependent and more coupled, not decoupled. I almost feel like the people should be most upset are not those who have held on to free marketeteer orthodoxy guys like you and me but people like you know for example Kevin Roberts at Heritage tweeted out we're headed to total decoupling with China and and I feel like a lot of the guys that have been defending the Trump administration have been left out to dry by what the administration's done. They've undermined their thesis. They've said, "We're going to fight for domestic manufacturers." Then turned around and said, "But we're giving carveouts, waiverss, exemptions to some of the key manufacturing industries." I cannot really understand who's supposed to be happy here other than those on the left who really like more government revenue. There at this time seems to be more government revenue, but as you know, there can't be more government revenue unless the trade is happening. And if the trade is happening, then that means that no domestic industries are being protected whatsoever. So, I'm at a loss not only as an opponent of the of the policy. I'm at a loss as to figure out who exactly is supposed to be happy. >> No. And and lost in the shuffle on all this too is is the rule of law. And I'm one who recognizes the threat that we have from China. But the way that we address that threat is very crucial when we're engaging in now a trade war with China with indiscriminate tariffs placed on all exports coming to our country. That's an enormous tax hike. But then you double down with partial nationalization of intel without congressional authorization. And of course, we're talking about socializing pieces of the means of production as a mechanism to counter China supposedly. And number number third here, >> by the way, when you say all exports in China, my understanding is uh Apple's exempted, right? >> Yeah, there is a sweetheart deal for now in place for Apple. I don't know how that happened. Uh >> yeah, something about the swamp. U but we've got these two instances, right? Tax hikes on the American consumers, partial nationalization of Intel, and the third related component shaking down Nvidia um in order to uh allow them to continue exporting sensitive technology to China. we are going about this the wrong way and we're violating multiple statutes and violating constitutional order in the process. >> Well, I guess then the good news is that there's a bunch of money coming in that they can rebate to the American taxpayers. This again speaking to the sort of internal contradictions of the ongoing moving arguments. Well, at one point we're told we're going to reduce the deficit a lot. Um, and then now there are those advocating for the idea of taking tariff money and rebating it to the American taxpayers. You've had some thoughts on this idea. Uh, besides the total inconsistency and and incoherence, maybe give listeners a little further unpacking as to why this rebate idea is so comically absurd. >> Well, well, sure. Well, this all goes back to several months ago when President Trump piloted the idea of potentially giving Americans a um um maybe a personal check as a portion of all the tariff revenue that has been collected. Well, Senator Holly, the supposedly a Republican senator from Missouri to try to decided to run with this idea, actually came up with a piece of legislation articulating how this supposed redistribution of tariff revenue would occur. And >> not not to interrupt Joel, I should clarify for listeners, this is not to be confused with the aforementioned Senator Holly's legislation co-authored with Bernie Sanders to put hard caps on what credit cards are allowed to charge. But I digress. >> Yeah, correct. Which incidentally, that proposal was even worse than AOC's proposal of two years ago on the on the rate caps. But so Senator Holly had this proposal. He said, "Yeah, let's run with President Trump's idea to give checks to Americans um to to to give to them what we're collecting in tariff revenue." Well, this actually is an enormous redistribution scheme. If you look at the fine print of Senator Holly's legislation, um it looks clear at first. He says, "Okay, we're going to take the total amount of tariff revenue that's being collected. we're going to divide by the total number of American citizens and that's going to give us the the the the total rebate. Well, it's not so simple as that. He takes that number and Senator Holly's proposal is to either increase that number or decrease that check based on how much money you make and how many children you have. So, it turns out that there's a very steep phase out in this tariff rebate proposal. As soon as you hit $75,000 as an individual, the amount of tariff rebate you're going to receive begins to steeply decline. And this results in this absurd situation in which you if you are a single parent, a mother or dad, and you're not working and you've got four children, you're going to receive more than $6,000 in tariff rebates. Not working, four children as a single parent. But if you're an upper middle class family, a married couple, you're each earning $140,000 a year, you've got two children, and they're in private school, you get zero dollars in tariff rebate. And um by that by that notion of it's a very redistributive uh system. It creates an enormous new uh um entitlement. And what's even more bizarre is if you're a small business owner, a lot of these small machine shops, for instance, it costs them three $400,000 to put in a new piece of machinery that you that often is imported. That new piece of machinery is costing that small business owner $100,000 extra in tariffs, that small business owner, no matter how much money they're making, they're see they're seeing none of this tariff rebate. If they're lucky, that's $1,600. So, this doesn't compensate small business owners for the cost. It really does nothing to compensate middle upper middle class families. But what it ends up being is another diversion of possibly tens of thousands of dollars per year to those who are not working. Well, um the other piece to this that is the uh one big beautiful bill act had supply side provisions for deductibility of capital expenditures that I think were reasonably progrowth and bonus depreciation and other things that now are being totally offset by this um the the issues you refer to the cost of tariffs. is offsetting the benefit of the very few but nevertheless real provisions in the big beautiful bill act that were uh tax um shall we say uh supply sideoriented and progrowth in the tax bill and and and this again gets to to this problem of a sort of intellectual incoherence whereby on one hand we're being told be really excited about the big beautiful bill it's giving incentive to companies to invest And on the other hand, we're being told, be excited that we're taking away the incentive to invest and collecting money from tariffs. Why not take away the tax deductibility of capital investment and and say we're getting rich by businesses paying more taxes that way? There's one side of the pool that is being emptied and another side of the pool being filled up. And it it it can't possibly be that the people involved in this don't understand it. It it just it seems to me to be a very duplicitous um notion. Now with Holly who's a a smart guy and I think wrong on most things. I think he knows exactly what it is, which is, as you point out, in this case of a proposed tariff rebate notion, rank disistribution and a backdoor way to pull from high earners to give doing something that we have repeatedly, going back to the Obama years said we're against, which is tax credits that result in refunds going to people who pay no taxes, which is one of the reasons that people were appalled by the audacity of the child tax credit at the level at which the Biden administration did it. That is redistribution by any other name, is it not? >> It it um absolutely is redistribution. Um and it's been proven um to to fail. And to your point about the businesses and one of the beauties of the one big beautiful bill is if you're a business and you're investing a million dollars in a piece of machinery, you can deduct that as an expense. And if you're in the 25% tax bracket, that's great. You saved $250,000 that year in your taxes by being able to immediately depreciate it. But if you're facing a 40% tariff on that piece of machinery, on the one hand, you're saving $250,000 on your taxes, but then on the other hand, you're paying $400,000 to Uncle Sam with the tariffs. It doesn't make sense. And with this redistribution um uh scheme, you know, with with some of these uh some of these populists in Congress that claim to be Republicans, their economic proposals are it's not just that they're not much different than those in the Democratic party. In many ways, their proposals mirror the extremity of the Democratic party. I mean, we're talking about this rebate plan where you're going to be giving potentially $8,000 per non per for some non-working families in new dollars from the federal government. And you combine that with the the MAGA accounts and combine that with now this new it's in the works over at Heritage Foundation for up to $17,000 per child and another tax credit. Um, this is redistribution. It does not end well. Doesn't just harm those that are making more money. It ends up holding the entire economy back. The other thing it does, Joel, is first of all, it's not going to pass. It's not going to get through. But then it leaves on the cutting room floor the argument for the left to use against us next time they're in power which will be some form of tax credit or redistribution or cockami idea around their social agenda that they will now say how can you be against it economically when it's the same blueprint of a plan you guys tried yourself. So, in the end, what Heritage wants, which is more procreation, they're not going to get this policy done for good reason. And they're giving a sort of um lending of the argument uh to the left who will then try to use it in a different capacity, whether it's something environmental or or for all we know, anti-procreation. But, but either way, um it's inviting the state into something that we can't afford its intervention. And I just am am truly mystified at what we're observing. >> Yep. I I I share the the the mystification and u and it's is it's quite unfortunate especially when we're able to look at examples not just in the distant past. We're able to look at contemporary examples of other nations who are currently have protectionist trade policies and we can see how it has stunted their own economic growth. We can look at countries like Hungary that have embarked on the attempt to use government dollars to spur procreation. We can see both how it's failed to achieve its goal and at the same time resulted in even more of government burden. These are this is not happening in the distant past of the cold war era. We're able to look at current examples of what these policies lead to. And yet our politicians who are paid to be aware and paid to learn and paid to actually legislate, they seem to be ignoring this. And even worse, they continue to outright fabricate the truth on national television. Well, I'll close this out with a quick comment on this notion that because Joel brought it up, this this idea, which I think actually originated in the precursor election from a Project 2025 uh uh position paper that now has in fact been advanced by Heritage. Now, I haven't heard anything from the Trump administration that they're behind it or support it. I have absolutely no doubt in my mind it would have no chance in either chamber of Congress to go through. But the notion of expensive paying people to have children where I I can't speak for Joel here. I'll speak for myself. I'm a big fan of people having children. I'm all for it and I don't want any policies that impede people having children. Um, but this gets to the heart of the matter for those of us who advocate for a free and virtuous society. That the virtuous society needs to promote procreation and cutting out from the freedom of society is not going to do anything to make that happen. In fact, what we have, if we want, which I think a lot of the folks at Heritage would like to see, if you want um healthy uh procreation in society, then you need to advocate for strong churches. You need to advocate for religious freedom. You need to advocate for good schools, for good marriages, for a whole host of circumstances that promote family. These are all things outside the legislative ability of Congress and they're outside the um executive branch of government. To go about believing that Washington DC is the first place to turn for larger families is one of the most anti-tovillian, anti- uh conservative, anti- Burkian concepts I've ever heard. And it has absolutely no chance of succeeding. There is not a single person in America that is trying to make their decision on whether or not they want another kid based on $4,000 of a tax credit. Um, this is a issue that speaks to moral, culture, family values, and when we confuse these domains, we get neither freedom nor virtue. Joe, I'll let you comment on that and and then we'll close this out here. >> Yeah. Right. and this Heritage Foundation proposal that I've seen some of the I guess some of the leaked documents there. We're talking $17,000 per newborn child. Um it's it's it's a massive massive new entitlement that's being proposed. And look, I grew up in the Midwest. Um >> is that 17,000 as a credit or the deduction? So 4,000 becomes the net benefit. >> I've seen it as a 17,000 outright credit equal to the current adoption credit. And that's in that's in the the executive summary and this is all I think recently has been all over the the uh the policy space Twitter sphere. Um so that that's it's a it's a it's a market new entitlement. And to your point about the the um the drop in fertility rate and what causes it. Like I grew up in the Midwest in a very religious community. We had a congregation of people. Most people were middle class. I would even say lower middle class. A lot of them lived in mobile home mobile home parks. Even those families were having we had we had five I'm the oldest of five in my family was a one one income earner household. We were not extraordinarily wealthy middle-ass family and we were not the biggest family in our social group by far. There were numerous other families with more children than we had living on middle class incomes in the Midwest. They chose to do that because they had a strong support network of a of a religious congregation. They had strong homeschool networks and they were deeply religious people and they made that choice. Um if you and and we know we know from the data that's out there that this drop in the fertility rate, it's not because of the lack of financial resources. We live in the most prosperous middle class society in the history of mankind and those that want to have children, including where I'm at right now at my brother's house, four children. He's in his 30s and they love it. doing this on one income and it's a middle class family. It's possible. Um, and my reason for delaying it has nothing to do with lacks of a tax credit. It's just not the state of life that I'm in. But to be proposing massive new expansion of the entitlement state to make us even more like stagnant Western Europe to resolve this problem, it's it's a it's a it's a misdiagnosis of the problem and it's a misdiagnosis that could stunt our economic prosperity for decades to come. Well, I couldn't agree more. And and one of the reasons that a guy like myself has always uh not voted Democrat is because I think they do things to stunt economic growth. But now here we are having a conversation about significant to the tune of hundreds of billions of dollars. a blended tariff rate that might have been about two and a half to 3% soaking wet um a year ago at this time that right now we're debating if it's going to be 14 16 17 maybe 18%. Significant increase uh significant uh addition of regulation. You brought up the Intel issue which was a big focus of mine a week ago. Uh nationalization, socialization of losses. Um, I I I just don't know what to say about this trend other than that we're going to continue resisting it, making the argument against it, and ultimately allowing the cooler heads to prevail that are rooted to the first principles we hold dear that we think will defend and uphold a free and virtuous society. Joel Griffith, thank you for your work in defending the free society. I hope you'll come back again and join us at Capital Record. Likewise, thanks for the opportunity >> and thank you for listening to David Bonson's Capital Record. Look forward to being with you again next week. Two episodes that will drop next week as we get into my favorite time of year, the fall, September football season, all the good things. In the meantime, thank you for listening to David Bonson's Capital Record.