- 7/1/2025
On The Cameron Journal Newshour we are talking about Trump's rewrite of the global economy, Mamdani's win in NYC and what it means for socialism and capitalism and we are talking about provisions of the Big Beautiful Bill (hint: it sucks).
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00:00:00I
00:00:30Okay, let's go.
00:38:29So,
00:40:29Thank you,
00:46:01Thank you,
00:50:02And that...
00:50:06This kind of turns back to, let's just go look at the rest of it.
00:50:12I read it over the weekend, and we'll just go find the rest of it.
00:50:17There it is.
00:50:19This kind of goes back to the conversation we were just having about Momdani,
00:50:23and the socialism, and competing with capitalism,
00:50:27and how systems don't necessarily work.
00:50:30And I love that it mentions right-wing populism and economic nationalism,
00:50:33because we're not the only country suffering from this right now.
00:50:38It's why Britain left the EU.
00:50:40It's why Hungary has a tenuous relationship with the EU right now.
00:50:44It's why a lot of Eastern Europe is going its own.
00:50:47I mean, there's a lot changing.
00:50:52And this, I think, article analyzes things quite well.
00:50:58I've long wanted to finish an article about saying,
00:51:01and forget the 70s, we actually have the economy of the late 1940s.
00:51:05And I love this line.
00:51:06It says,
00:51:06Despite the state interventions of Franklin D. Roosevelt's New Deal program,
00:51:09the economic situation stabilized and returned to sustained growth only in the 40s,
00:51:13when wartime rearmament delivered a huge industrial stimulus.
00:51:17The computer built for the post-war period was solving to avoid a repeat of the 1930s.
00:51:22The software update was a new governing idea of full employment.
00:51:25Achieving that aim as the central raison d'etre of the economy
00:51:28also entailed several hardware modifications.
00:51:30One was a policy forcing wealth owners to use their capital locally
00:51:33by limiting their ability to move it out of the country.
00:51:35To maintain their profits, they were obliged to invest in technology
00:51:38that would increase productivity.
00:51:40In this virtuous cycle, the high productivity allowed for high wages,
00:51:43which the state could then tax to fund social transfers.
00:51:46Combined with the government spending power revenues raised by high marginal taxes,
00:51:50America's welfare state was born.
00:51:52Labor unions were seen more as partners in business enterprises,
00:51:55and political parties needed to appeal to the median middle-income voter.
00:51:58These changes produced a political system in which the two main parties competed
00:52:02over a centrist consensus so bipartisan that people struggled to see the differences
00:52:05between Democrats and Republicans.
00:52:07And then it goes into the 70s, and right to work states and getting rid of unions,
00:52:15and the Federal Reserve raised interest rates to 20% to squeeze inflation,
00:52:19and a measure that induced a harsh recession, and we got circulation in the late 70s.
00:52:24As all of that implies, full employment ceased to be the governing economic idea.
00:52:27The software rewrite of this era instead made price stability, capital mobility,
00:52:31and the restoration of profits via globalization the new priorities.
00:52:33The hard-run modification was to make central banks more independent,
00:52:37the better to enforce price stability and enable the recovery of profits.
00:52:40These new priorities were justified by Margaret Thatcher's famous notion that,
00:52:44quote, there is no alternative.
00:52:45This reboot is going to be known as neoliberalism.
00:52:47And then he gets into how America was doing in the 90s, and so we see,
00:52:56this is kind of the important bit.
00:52:58So, we seem to be stuck, which is why this moment is so perplexing.
00:53:01The system upgrade is pending.
00:53:03The right is offering its regressive modernization as the update.
00:53:06The left has yet to figure out which of these three paths it wants to take.
00:53:09One possibility is to stay put with the gerontocracy of the Democratic Party
00:53:12and wait for Trumpism to implode.
00:53:14That might happen, and the Democrats' current position as the party of the institutional status quo
00:53:18makes this the most likely path, but this will be a losing proposition
00:53:21if no reversion to the mean of the pre-MAGA American politics occurs.
00:53:25The effort by Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders
00:53:29to rally an anti-oligarchy movement advocates for a second option of left-wing populism.
00:53:35But whether this appeals to young men who've been drawn to Trump,
00:53:37those young women who poll as more progressive,
00:53:40and can create a broad enough coalition remains to be seen.
00:53:42A third approach is the Abundance Agenda, promoted recently by Ezra Klein and The Atlantic's
00:53:46Derek Thompson, which proposes a progressive political program based on lower regulation
00:53:50pro-growth policies as a spark for renewed economic growth,
00:53:53though critics on the left accuse this approach of fitting to confront corporate power.
00:53:57To develop an alternative to the progressive modernization underpinning Trump's re-election,
00:54:00the left must come up with a governing economic idea that can compete.
00:54:04Technocratic fixes of the old system look very unlikely to inspire a broad enough coalition
00:54:07to defeat the potent, if unstable, electoral alliance that re-elected Donald Trump.
00:54:13The most promising avenue, one that could adjust the needs of millions of Americans who feel
00:54:16shut out of growth and prosperity and alienated from America's governing elite,
00:54:20might be a fusion of the AOC-Bernie populism with a more political, less technocratic version
00:54:24of abundance.
00:54:25Regardless of whether such a project can materialize, we have to accept that a transformation is
00:54:29underway.
00:54:30A new economic order is forming, which means that it is not yet fixed and can still be
00:54:34shaped.
00:54:34But time is running out.
00:54:36As jumbled as the regressive modernization is, it could win the day if we do not come
00:54:39up with a different governing idea of what the economy is and whom it is for.
00:54:43And we need enough people in our democracy to agree that this new purpose is the right one.
00:54:47The ideas are there to be found.
00:54:48They just need politicians with the courage to try them.
00:54:54I am not so enthusiastic about that.
00:55:01I think a lot of left-wing populism is not always successful.
00:55:06See Argentina and Peronism.
00:55:12I mean, yes, obviously the world economy is changing and the old globalization is probably
00:55:16not coming back.
00:55:16I don't think we're going back to a pre-Trump world either.
00:55:21I worry that we're going to get some weird Franken version where, because Trump is doing
00:55:31tariffs, he's not doing capital controls.
00:55:32So we might end up with some really regressive sort of economic nationalism with globalism.
00:55:39Like, free globalism, free economic, you know, sort of free movement of capital around the
00:55:44planet with lots of tariffs and trade barriers that makes it kind of ineffective, so that
00:55:50we're still having, you know, money moving out of the country, but it's not benefiting
00:55:55people.
00:55:55We're also undercutting social programs so that people just suffer more.
00:56:00I mean, I think that's kind of where it's all going is, rather than trying to help the
00:56:05most people, we're actually trying to help the fewest people.
00:56:08And I think, and it's funny because I think there are some people who are kind of already
00:56:11seeing this.
00:56:11In terms of understanding, you know, how people are kind of already suffering, who's being
00:56:21economically left behind, that even kind of loops back into why millennials are looking
00:56:24for socialism, is you have, you're having a lot of people left behind.
00:56:28And then you pile onto this entire conversation the changes with AI and robotics that are coming.
00:56:35And the robotics changes are already here.
00:56:37The AI changes are already here.
00:56:39You pile on all of these things, and it's like, who's this economy working for?
00:56:44Who is benefiting?
00:56:48The wealthy asset owners, which honestly, Thomas Piketty in capitalism 15 years ago said in the
00:56:5621st century, wealth derived from capital will be more valuable than wealth derived from labor.
00:57:01And we're now kind of finally seeing how that system is going to work.
00:57:04Basically, if you do not own assets, you do not have money, you will end up being poor.
00:57:09That gets us into techno-feudalism.
00:57:12We're basically regressing to how life was for the majority of human history.
00:57:18All the gains in creating a middle class from trade during the Renaissance and through industrialization
00:57:23in the 19th century, we could be losing.
00:57:26Don't know that for sure yet, but it's not looking great.
00:57:31Let's move on.
00:57:32Um, kind of, you know, piling on top of this global idea, I really loved this thing from
00:57:39Project Syndicate.
00:57:40Um, and it said, we're not gonna, this thing's, I think, a bit long.
00:57:44I'll grab you the big bits.
00:57:46Um, uh, Donald Trump's second-term policies have already been detrimental to America's economy
00:57:52and national security.
00:57:53While his administration has delivered a massive gift to China, there's still a chance for
00:57:57Europeans and others mourning the loss of U.S. global leadership to pick up the pieces.
00:58:03Um, and it says here, Trump wants to reverse the loss of American power and he's made his
00:58:07tariffs, tariffs his tool of choice for advancing his economic and national security goals.
00:58:11He's deploying a variety of other traditionalist tools such as export controls, direct controls
00:58:15on imports, deemed national security threats and restrictions on inbound and outbound foreign
00:58:19direct investment.
00:58:20But these policies are being implemented in a scattershot, on-and-off-again way, and their
00:58:24objectives are often unclear and contradictory.
00:58:28Uh, Trump's approach has always been based on his zero-sum mercantilist view that exports
00:58:32are good, imports are bad.
00:58:33He sees America's bilateral trade deficits as a sign of weakness, and this often leads
00:58:37to ludicrous conclusions.
00:58:38Like the notion that a poor country exporting raw, essential raw materials to the U.S. ought
00:58:43to import an equivalent value of goods from American producers.
00:58:45He believes that the unfair practices of trading partners are the primary cause of the U.S.
00:58:49trade deficit.
00:58:50They are not.
00:58:51Adding to the absurdity, the Trump administration's calculus is based only on trading goods, though
00:58:55the U.S. has large and growing trade surpluses in services, which account for 30% of global
00:59:00trade.
00:59:00These were conveniently left out.
00:59:02Perhaps Trump's own career led him to believe that real estate or banking services do not
00:59:06produce economic value, but they clearly do.
00:59:08Just look at the value created by Amazon Web Services, Google Search, ChatGPT, and other
00:59:12U.S. digital businesses that dominate global markets.
00:59:15Trump contends that tariffs will boost manufacturing, production, and employment in the U.S.
00:59:22He is mistaken.
00:59:23In the short run, tariffs and imports of intermediate inputs will increase the costs and prices of
00:59:27U.S. manufactured goods, reducing both domestic and foreign demand for them.
00:59:31In the long run, tariffs will not reverse the secular declines in manufacturing production
00:59:35as a share of GDP and manufacturing employment both overall and as a share of total employment
00:59:39that have occurred gradually but steadily for decades in all advanced economies.
00:59:43This has even been true in Germany, which has significant manufacturing trade surplus.
00:59:47Several structural forces, including rapid productivity growth, automation, increasing
00:59:50competition, and a shift in demand away from goods to services, account for these secular
00:59:54trends.
00:59:55Moreover, neither Trump's across the board nor his reciprocal bilateral trade tariffs distinguish
01:00:01among industries, again leading to contradictory results.
01:00:03In labor-intensive industries like apparel and footwear, U.S. labor costs are high and likely
01:00:07to increase as the American workforce declines for demographic reasons, a trend that mass
01:00:11deportations would accelerate.
01:00:13Hence, if production were to return to the U.S., it would be costly and uncompetitive.
01:00:18Thus, Trump's approach is doomed to fail.
01:00:20Traditional and semi-skilled union jobs will not return, and manufacturing employment, which
01:00:24has fallen from 30% of total employment in 1970 to less than 8% today, will continue its
01:00:29decline.
01:00:29And then it goes into how to fix some of that stuff, and down here at the bottom, equally
01:00:39destructive are the geopolitical consequences.
01:00:41Even though Europeans also view Chinese power as an economic and security concern, Trump is
01:00:45bullying them with tariffs and threats to leave NATO.
01:00:47With the U.S.
01:00:48that to make an adversary, Europeans will adapt their national and economic security objectives
01:00:51accordingly.
01:00:52Following last year's influential Draghi report, which called on the European Union to invest
01:00:56in its own capabilities, member states have quickly changed their spending priorities
01:00:59to favor defense, energy sufficiency, and strategic technological autonomy.
01:01:03This means that European markets for American advanced technologies will shrink.
01:01:06Why buy from Boeing when you can buy from Airbus?
01:01:08Why purchase American military equipment when you can develop your own?
01:01:11Abandoned by the U.S. and beset by economic and geopolitical challenges from China and Russia,
01:01:15the EU may become the champion of common rules, institutions for global trade and investment,
01:01:20given its own market size and commitment to trade.
01:01:21The bloc is likely to find many eager partners who've lost faith in the U.S.
01:01:27An EU-led coalition of the willing could be the foundation for sustaining win-win economic
01:01:31and independence this century.
01:01:33This may ultimately contain China's power and serve America's long-term interests.
01:01:40And that was the part I thought was very interesting, is that a stronger Europe could solve a lot
01:01:48of problems rather than having Europe be so dependent on the United States.
01:01:54I think there's going to be a lot of money to lose there, though.
01:01:56The European market is huge.
01:02:00It's the only market in its totality that's bigger than the United States.
01:02:04But this idea that a stronger, more economically independent and militarily independent EU
01:02:10will contain China's power and serve America's long-term interests is an interesting thought,
01:02:15and I thought that was quite, quite interesting.
01:02:19This is about the surveillance states of America and Trump's new surveillance system.
01:02:24We may talk about that next week.
01:02:27The Trump administration found Howard violated civil rights law.
01:02:31That is an interesting story.
01:02:36Oh, this is from the Big Beautiful Bill debate, which we kind of discussed at length.
01:02:40We don't need that.
01:02:41But the S&P 500, oh yes, the stock market, ironically, is up under Trump, which is interesting.
01:02:49It's regrained all the lost ground in March, and things are humming along, which I thought
01:02:55was kind of interesting as an anecdote at the end of the hour, which we're at.
01:03:00Oh, this thread is so good, and I want to talk talk about this, and we're coming up to
01:03:058 o'clock.
01:03:05Um, and that's not important.
01:03:10So, here's what I'm gonna do.
01:03:12I'm tired.
01:03:13I've had a long-ass day.
01:03:15Um, I'm going to stop now.
01:03:22I'm gonna go get this makeup off my face.
01:03:24I'm going to sit and hang out for a little bit.
01:03:27It's been a long-ass day.
01:03:28We'll return to those other stories next week.
01:03:30I'll put them in my notes for next week, and we'll get into some of the stuff.
01:03:34We've had great conversations, though, about trade, capitalism, one big beautiful bill.
01:03:38It's all, it's all so good.
01:03:40Um, thank you for watching.
01:03:42My name is Cameron Cowan.
01:03:43This is the Cameron Journal News Hour.
01:03:45You can catch me on social media, at Cameron Cowan on Instagram, uh, and Twitter, um, at
01:03:51Cameron Journal on TikTok, um, where there are lots of shorts of interviews, and this show.
01:03:56Um, join us on Wednesday, um, at 6 p.m. for the Living Joke Podcast with my buddies Will and
01:04:02Connor, and I will see you guys next Monday night.
01:04:06Thank you so much for watching.
01:04:08I really appreciate it.
01:04:09We'll talk soon.
01:04:10Have a great Fourth of July weekend, everyone.
01:04:12Bye-bye.
01:04:12Bye-bye.
01:04:12Bye-bye.
01:04:14Bye-bye.
01:04:16Bye-bye.
01:04:18Bye-bye.
01:04:24Bye-bye.
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