Trump’s Trade War End Game Revealed (Uncut) 03-06-2025

Trump’s Trade War End Game Revealed | Arthur Laffer

I don’t think the trade issues are really very important contributors to U.S. agricultural price increases. I just don’t think they are, David. They’re very consequential with regard to comparative advantage and real incomes.

And they are really consequential with regard to the recording gains from trade on all products. No one wins in a trade war. No one wins.

That’s true. But not everyone loses equally. A survey conducted by CBS from February 24th to 26th showed that 77 percent of Americans think that their incomes are not sufficient to keep pace with rising inflation.

In response to this, Treasury Secretary Scott Bissett has vowed to appoint an affordability czar. We’re going to find out what that means in just a bit. Can the Trump White House actually quickly tackle this affordability crisis? Joining us to discuss this and how he rates Trump’s performance so far is Dr. Art Laffer, founder and chairman of Laffer Associates.

Dr. Laffer is the father of supply side economics and is best known for the Laffer curve. He is also a former member of President Reagan’s Economic Policy Advisory Board. In 2019, Dr. Laffer was awarded the Presidential Medal of Freedom for his contributions to economics and his latest book is called The Trump Economic Miracle and the Plan to Unleash Prosperity Again, co-authored with Stephen Moore.

Dr. Laffer, an honor to host you as always. Thank you for coming back to the show. I love being on your show, David.

It’s really loads of fun for me and thank you very much. It’s great. And you’re right in Taiwan right now, by the way.

Wow. Absolutely. Yeah.

We’re different parts of the world. The wonders of modern technology and globalization. It’s fun.

Great. We’ll talk about whether or not globalization is dead. That’s kind of the theme of modern economics today.

But before that, Dr. Laffer, you were a part of Reagan’s Council of Economic Advisors or more specifically, his Economic Policy Advisory Board. You’ve advised President Trump in his first term. Are you in touch with the Trump administration today? Are you currently advising them right now? Well, let me just say I am in touch with the Trump administration peripherally in there.

I’ve never taken it was ever since 1970, 72. I’ve never taken a job with government, David, for a simple reason that once you take a job with government, you’re an employee. And as an employee, you owe an oath of loyalty to your employer, the government.

And therefore you will defend policies you don’t really believe in because that’s what a loyal employee is supposed to do. And I don’t ever want to be put into that position again. And frankly, I’m not never was a paid employee for Reagan or for Trump or for anyone else.

And as such, I am advising, but only peripherally. He’s got a great economist there at the head of the NEC, a guy named Kevin Hassett. I know Kevin very, very well.

Kevin’s extremely strong on technical academic economics, as well as being very, very well experienced in policy matters. And so he’s just super great. And I do put in my ideas from time to time there.

And I hear things back from time to time. And I do have contact with the president as well. But whatever he says to me, you got to call him to find out what he believes.

I’m not going to tell you. He’s been pretty good at expressing himself, I think. I think we can then frame some of the conversations today as a hypothetical of what you would do if you were actually currently in the administration.

I mean, the theme of the conversation today is affordability and inflation and among other things. First of all, how would you rate the performance of the Trump administration so far and the policy that they’ve set out and how you think that they would actually accomplish fighting inflation, which is one of the objectives that the Trump campaign has set out prior to the election? You know, he’s been in office just a little bit more than a month, maybe a month and two weeks or month and a week. I think it’s been an spectacular first month and a half.

I don’t know how this pace continues. I’m exhausted just watching it on TV. I just want to go and take a nap.

And oh, my God. No, I am a little older, but just what’s happening is just an incredibly frenetic pace and everything I’ve seen so far, David. And, you know, I get worried like everyone else that something’s going to go wrong and something that’s going to happen.

But so far, I’ve been very pleased with all of the policies, the executive orders he’s put through, the passage of the tax cuts and job extension by the House. I was delighted by that. I’m delighted by a lot of these policies.

And I’ve just got to say, I think he’s doing a spectacular job. And as I said to you before, now, remember, I’m only an economist and I keep saying that, but I’m going to keep saying it because I only talk about economics in his first term. I think he was the single best first term president the U.S. has ever had in economics.

And I think he’s continuing that right now. And if he continues in this pace and even if he slows down a lot, he’s going to probably be the best second term president as well. OK, well, let’s take a look at something that Secretary Scott Bassett has recently talked about, which I referenced the beginning, which is affordability.

Take a listen to this clip and then we’ll evaluate this together, Dr. Laffer. Sure. Now we see in our polling 52 percent of Americans say Trump’s policies are making grocery prices go up.

Explicitly said that on this bar chart you see there. So it’s an experience and a perception issue. When does that shift, when we see the benefits of the planning you say is underway? I think President Trump said that he’ll own the economy in six or 12 months.

But I can tell you that we are working to get these prices down every day. But it took four years to get us here and we’ve had five weeks. So interest rates are down.

That’s a very good start toward housing affordability, toward auto affordability. And we are tackling this at Treasury. We are going to appoint an affordability czar.

We are going to have an affordability council. We are laser focused on this. What does that mean? What’s an affordability czar? Someone who picks the five or eight areas where this administration can make a big difference for working class Americans.

Okay what would you do Dr. Laffer if you were the affordability czar and your responsibility is outlined by Scott Peset right now? Yeah well let me just start at the very highest level. I mean the 6,000 foot thing. You know if you look at it if you have more output and less money you’re going to get prices coming down.

If you get more output you’ll have wages, salaries, all of that increase. You got to go at it from the standpoint of economic growth, number one. And also lower inflation has to be done there as well by really the Fed keeping policies in line over there.

So the two tacks I would take is reducing inflation by expanding output and making the supply of goods more plentiful and putting more controls on the grade of growth of the monetary base. And also you know cutting taxes which really will stimulate the economy dramatically. So I think macroeconomics has a lot to say about affordability and that means higher employment, more productivity per worker, and controlling inflation as best we can.

To judge Trump on the first week in office by saying inflation is up is a little bit of a ridiculousness. But he can do a lot of this with decontrol of oil for example. Now that’s going to take some while before the wells are pumping and output increases and the U.S. becomes independent again.

That will take some time and Scott Besant is correct when he says that. But I think they’re well on their way and I’m very excited by it. One that I’m especially excited by is medical transparency which is really bringing down health care costs.

As you know health care is a little less than 20% of all GDP and yet it’s the one section of the economy that has no relationship whatsoever to markets. You don’t know what the price of health care is, you have no idea what your insurance company collects for what the procedures are, and you have no idea what the efficacy of the health care procedures are either. So we need to get the health care industry onto a market by posting prices, transactions prices, and by really full disclosure of all the consequences of health care provisions.

Once we do that I think we can reduce health care costs by upwards of a trillion dollars. I mean that’s a huge amount and reassert U.S. life expectancy above the rest of the world by providing good health care at low cost and that’s the key element for me in the next four years and Trump’s executive order has done exactly that. It’s just spectacular what he’s done on health care and yet you don’t hear anyone talking about it.

But he has really reaffirmed his old executive order and made it much more costly for health care providers not to follow suit and post transactions prices and post what the consequences of these procedures are or drugs are. What should we do about grocery prices then Dr. Laffer? Per the polls that we just referenced a lot of Americans are concerned about grocery prices staying high or perhaps even going up during the next administration. Well you should declare it illegal to have the bird flu.

That’s just a joke, that was a joke David. You know where the bird flu has really caused egg prices to zip up. It will be over someday and when it is they’ll come way back down again and it’s a very sorry state that that happened.

But if you look at it I just think the overall rate of inflation and making sure and farmers are treated properly, that markets are cleared properly, that real GDP is growing so that we can have productivity increases. I know with a lot of the issues on oil, you know oil is the basis for a lot of fertilizers as well as you know and it’s not burnt that’s used as fertilizers and by restricting the amount of out of oil pumping and really does make it more difficult for farmers to fertilize their fields etc. I know I have a little farm up in Kentucky and I know just fertilizing my cattle ranch there and the grass there is about three times more expensive than it was three years ago.

And all of that is what you go into and you just remove the restrictions and you release the price controls and you let markets solve the problem and they will do it and they’ll do it really nicely but it may not happen tomorrow morning. That yeah exactly it may not happen tomorrow morning. Short term though do you see a risk to the upside for grocery prices due to tariffs especially because of imported goods, food products from Canada, Mexico and other other trading partners? Yeah you’ve got some funny stuff there for example Canada has like 200% tariffs on all dairy products from the US going into Canada.

You know that all of these things I don’t think are really inflation issues. I think they really are free trade issues and they really are comparative advantage issues because you know if we have a better dairy industry in Wisconsin than Canada does we should be supplying them with dairy products not being held at gunpoint by their tariffs. So I don’t think the trade issues are really very important contributors to US agricultural price increases.

I just don’t think they are David. They are very consequential with regard to comparative advantage and real incomes and they are really consequential with regard to the Ricardian gains from trade on all products and also on the Sydney Alexander gains from trade which is by the transfer of resources from savers to investors and I don’t know if you want me to go into that topic with you at length but I would love to if you think it’s worthwhile. Yeah absolutely I think that’s an interesting point because you since you brought it up the comparative advantage of the US trading powerhouse if you want to call that what is America’s comparative advantage now relative to China or Canada or anyone else? Yeah let me just say that we produce some products more efficiently than foreigners do and they produce some products more efficiently than we do.

We and they would be foolish in the extreme if we didn’t sell them those products we make more efficiently than they do David in exchange for those products they make more efficiently than we do. This is the classic Ricardian gains from trade comparative advantage. It’s a win-win for everyone and it’s really a huge huge contributor to US prosperity and to you know happiness in the world.

I mean it’s not only US prosperity but foreign that that is one set of the gains from trade. The second set of gains from trade done by Sydney Alexander is the transfer of real resources from one country to the next. For example from 1640 until 1870 and I think I said this on one of your podcasts as well is that in in that 230 year period we ran trade deficits each and every year with seven exceptions.

We built our country on importing capital from Europe and using it with our labor and with our raw materials and we became the preeminent country on the planet earth in economics purely and simply because of those trade deficits i.e. capital surpluses in the US and that has allowed us to become the preeminent economic sort powerhouse. Those are the two gains from trade that are really really consequential. I mean without them the US would not be the US.

Without them you’d have a lot of problems in the world community. It’s really it’s hard to overstate the importance of the gains from trade both Ricardian and and Alexander gains from trade but then there’s the Trump view which is the negotiation view and while it’s very very true David that no one wins in a trade war. No one wins.

That’s true but not everyone loses equally. The example I like to use just to illustrate the point is imagine we have only two countries in the world. The US and Puerto Rico.

Okay those are the only two countries in the world. The US is 99 times larger than Puerto Rico so of all world production the US does 99 percent of it and Puerto Rico does one percent of it. You can follow my example.

Now we have trade with Puerto Rico. There are gains from trade. Puerto Rico makes some things better than US does and US makes some things better in Puerto Rico and Puerto Rican exports to the US are US imports from Puerto Rico.

US exports to Puerto Rico are Puerto Rican imports from the US. If we assume trade is balanced that there they have this thing and we got the perfect gains from trade where their gains from trade are exactly the same as our gains from trade. However their gains from trade on a per capita basis are 99 times larger than ours.

Therefore if you look at Puerto Rico if the US I mean every company in the US in this example 99 percent of their marketplace is in the US and one percent is abroad in Puerto Rico and Puerto Rican companies again 99 percent of their production goes to exports to the US and one percent is for domestic Puerto Rican marketplace. So if the US threatens protection access to the US markets the Puerto Ricans are in a distinct disadvantage in their negotiations. So the US with this powerful gains from trade can extract increased gains from trade that the gains from trade can be tilted much more towards the US if they decide to use the relative strength of the US economy versus others and that is exactly what Donald Trump is doing.

You know the US is much more important to Mexico than Mexico is to the US. US is much more important to Canada than Canada is to the US and by looking at the relative import there of the US economy and access to US markets Donald Trump has been negotiating and I believe correctly negotiating lower tariffs on their part for access to our markets. It’s called reciprocity he’s a lectured on it 25 times and he is using our very large market as a leverage point to get them to reduce their tariffs quotas and non-tariff barriers which which I really do think is the right thing for him to do.

But you follow me? Yes let’s back up a minute and talk about protectionism overall. Some economists argue that the US is not in a position as it was maybe 20 years ago to be dictating global trade. Let me just take a look at we’ll show you this map right this is an animated chart and I just want you to respond to this Dr. Laffer.

Somebody put this together the this is showing who is a larger trading partner US or China. China being red the US being blue over time and as you can see it’s starting to it starts in 1980 and the map progressively changes over time and you can see over the past 40 years there’s been more red now than there was 40 years ago. In 1980 there’s more countries in the world with which China does more trade with now than the US and so the question is whether or not the US can afford to implement protectionism now or is it using antiquated so-called antiquated policies that may not be applicable in modern times? Yeah let me just say I do not think the US will nor do I think it should actually implement protectionism.

I don’t think that’s a good policy but using protectionism as the leverage and getting them to negotiate reciprocal trade reductions the US if you look at all the major countries has less protectionist less tariff less quotas less non-tariff barriers than all of our trading partners bilaterally. We are by far the lowest protectionist country in the developed world in the big country world there are a couple places like Hong Kong maybe or Jersey, Guernsey and Sark or the Isle of Man or you know maybe some of these other countries that are less protectionist but getting Japan to lower tariffs is good for Japan it’s good for the US it’s good for the world. If Trump uses access to the US market in discussions with Japan to get them to lower tariffs lower quotas lower non-tariff barriers I’m all for it.

To actually try to protect the US by banging down closing the door to Japan I think would be a mistake and I think Trump knows how to do this negotiation very very well and if you look at what he did in his first term if you look at the Japanese trade deal you look at USMCA US Canada and Mexico if you look at the South Korean deal if you look at to Brazil you look at Bolivia all of these trade deals that Trump did with other countries all of them resulted in lowering tariffs lowering non-tariff barriers and lowering quotas which is really great for the world and he knows how to negotiate that very very well and I’m quite excited by his structuring and negotiations so far on trade.

I always am scared to death David that he will go into a tariff mode I am scared but I don’t think that’s his strategy I don’t think that’s his goal I think he’s a free trader all the way based upon his history as a CEO of a large international company and as I also said in last time with you also because he’s imported two foreign wives he’s got this to him I don’t think he found it amusing no he didn’t he did not but I do and he’s a very funny guy I like him very much personally and no matter what he thinks of me I think he’s been a very very good president. Well I think he thinks very highly of you Dr. Laffer you never know tomorrow morning it may change you know he’s quite transactional and I think that’s the way a president should be he’s quite transactional and you know tomorrow I may say something that irritates him but that doesn’t change my view of him.

Well let me finish off the trade conversation aspect of this discussion on this question Dr. Laffer what is he doing this time differently that may look to be different than what he did when you were you know advising him in 2017-2020. Yeah well then let me just say that what he did with Mexico I mean it’s wonderful allowing us surveillance over Mexico to find the drug lords of similar crime cartels and all that Canada is also beefing up its border stuff he’s using trade discussions to get all sorts of non-trade preferences which is perfectly legitimate David and that’s what he’s doing and I don’t remember him doing all of that back in his first term. In his first term he looked really at trade versus trade and this time I think his whole focus on reciprocity is really cool I mean he’s really trying to get them to lower tariffs dramatically.

I told you at what he did at his at the at the G7 meeting in Ottawa before he met with Kim Jong-un he said to them he said you know the US is prepared right now to get rid of all tariffs all quotas and all non-tariff barriers if you guys are and they all looked up at the sky the whistle they looked at the shoes and said bye Donald see you later you know. I think he’s really got a much more efficient much more practical agenda this time of getting things done and you know by having a very efficient process and team to get things done it also raises risks but I think the risks are well worth it I mean what he’s doing with Doge

and Elon Musk is pretty amazing I mean you know are there going to be some eggs broken in making this omelet probably but I think on balance it’s going to be one of the most successful things the world has ever seen in government reforms and so I’m really very excited about how he’s doing his economics this time and he’s doing it a lot more efficiently a lot more focused and he’s doing it in a lot larger amounts.

I’d love to follow up with you next time on Doge because this is we’re only in March we’re only two months into implementing some of these Doge policies let’s let’s let’s wait and see how I’d love to do a big one with you because I was the first I was the first chief economist at the OMB when it was formed and and I really do know the budgets of the US and the departments and agencies and all those it’s been a long time but let me tell you I was the first one to be there to do that and I was back then I was just gobsmacked by the inefficiencies and by the lack of incentives in the structures but let’s just save that for the next time.

You were part of the Reagan administration how is this different than the Grace Commission that was part of the Reagan administration? It’s not conceptually very much different I was not part of the Reagan administration I was part of the Nixon administration and that’s when the OMB was formed. I was an advisor to Reagan throughout his full eight years saw him frequently and for long times and that but I never did take a job with him the Grace Commission was intended to be exactly what Doge is only the Grace Commission really didn’t do much and Doge is doing a hell of a lot but all of this really is predicated upon putting incentives into the government structure to allow the government structure to be efficient going forward for example merit pay for teachers.

Teachers who teach well should be paid more than teachers who don’t teach well as the current structure is for government employees and the union there is there is only seniority-based pay not performance-based pay so all of these systems need to be restructured so that performance is rewarded not seniority not longevity that department heads and agency heads can be compensated more by reducing structures if they’re inefficient and by expanding structures if they’re terribly efficient so efficiency should be the guideline not size of the department or agency as it is now every manager in the government can’t get a different pay they all get the same pay the only way he or she expands his influence his power and his prestige is by having more employees which means adding fat often often means adding fat so that’s the way I’d like to see is putting incentives back into the government structure

and you can do this fairly clearly I told you about merit pay for teachers you can do it at Sununu did it in New Hampshire by having social workers paid more by getting rid of social welfare cases not by having more so they tried to solve the cases and getting people off the welfare rolls not adding to the welfare rules and

all of these types of incentives can be done Billy Weld when he was governor of Massachusetts had an employee that saved the state I think eight or ten million dollars and he tried to give her a bonus of ten thousand dollars and the court struck it down saying it was illegal for him to pay her for the good job that she did which is ridiculous these types of things are where I’d like to see Doge go in the long run but right now they are going on just cutting things down which is also good right now but they need to make this a permanent part of the U.S. a thing we need to instill incentives in the government to let them run efficiently reward politicians for doing a good job and punish politicians for doing a bad job my view is we should put politicians on commission I see no problem with politicians making a lot of money if all the rest of us do too

I see a lot of problems if they make a lot of money and we lose money that’s wrong one difference compared to the grace commission is that Doge is run by a private citizen Elon Musk some people don’t like that idea Dr. Laffer there’s a lot of t-shirts I see on social media I didn’t vote for Musk I voted for Trump right how do you feel about how do you feel about Elon Musk who’s a who’s the head of several large enterprises in the U.S. by the way yeah well let me let me start by by correcting you a little bit what was that commission under Reagan yeah I see your point it was it was called the grace commission and it was named after Peter Grace who was one of the CEOs in America really a very competent professional a la Elon Musk it was okay it’s a dance group and they did it so there’s really conceptually no difference I don’t see between Peter Grace’s and Elon Musk’s conditions except that Elon Musk is being successful and Peter Grace was not

I mean that difference now if you look at Elon Musk I love the idea that a very competent businessman or business person businesswoman is running the operation especially if the person is personally very wealthy you know Peter Grace is not doing this for a commission let me tell you when you have 250 billion dollars you can’t even think of ways of spending your money to be brought he got into a good company that thing exploded and grew on him and he now is worth 250 billion but that’s not his mark of excellence he really knows how to run a good company and that’s what I love and I love it that he’s wealthy so that he is not personally trying to make money from his insider dealings with the government that I think is terrific and I think all these people with their t-shirts are wrong or incorrect you know poor people are far more focused on serving themselves than are very very rich people and

that’s why I like it that you have very principled in both sense of those words principled people running government I think it’s really important David I’m interesting it is to me and you know these guys know how to do it and they do a lot better job than I think Bernie Sanders ever would.

I think that’s a conversation for another time it’s very philosophical we can delve deep into that. We had one like it if you remember with your friend uh the Marxist and I uh yeah we did that we had that discussion there and it was very fruitful I thought I loved the session but it does show the difference in models I like uh I like rich competent businessmen running government at business side of government than the other side that’s that’s just me. That video has over half a million views now uh people kept watching it over over the last year and a half so I’ll put the link below uh Dr. Laffer debated Richard Wolff on my show uh two summers ago let me switch gears now and talk about Ukraine because I know um we’re running out of time here so uh not a very uh I guess what might call a productive conversation with Zelensky, President Zelensky of uh Ukraine in the Oval Office let me just take play you one clip uh one minute of this exchange one of the more heated exchanges.

You have to show it because it makes me uh okay go ahead. I just want to get your reaction Dr. Laffer. Yeah well you know you’re gonna make me cry.

What kind of diplomacy GD you are speaking about what what do you what do you mean? I’m talking about the kind of diplomacy that’s going to end the destruction of your country. Yes but Mr. President Mr. President with respect I think it’s disrespectful for you to come into the Oval Office try to litigate this in front of the American media right now you guys are going around and forcing conscripts to the front lines because you have manpower problems you should be thanking the President for trying to bring it into this conflict.

Have you ever been to Ukraine that you say what problems we have? I have been to I’ve actually I’ve actually watched and seen the stories and I know what happens is you bring people you bring them on a propaganda tour Mr. President are do you disagree that you’ve had problems like bringing people in your military and do you think that it’s respectful to come to the Oval Office of the United States of America and attack the administration that is trying to trying to prevent the destruction of your country? A lot of questions let’s start from the beginning.

Sure. First of all during the war everybody has problems even you but you have nice ocean and don’t feel now but you will feel it in the future. God bless you.

You don’t know that. God bless you. God bless don’t tell us what we’re gonna feel we’re trying to solve a problem don’t tell us what we’re gonna feel.

I’m not telling you. Because you’re in no position to dictate that. You’re in no position to dictate what we’re gonna feel.

We’re gonna feel very good. We’re gonna feel very good and very strong. You’re right now not in a very good position.

You’ve allowed yourself to be in a very bad position and he’s happy to be right about it. From the very beginning of the war. You’re not in a good position.

You don’t have the cards right now. With us you start having cards. Right now you’re gambling with the lives of millions of people.

You’re gambling with world war three. You’re gambling with world war three. Failed diplomatic meeting.

They didn’t sign the deal on rare earths. Anyway what was your reaction to this whole episode? It’s a very uncomfortable situation. It’s like watching mom and dad fight.

It’s like I had two brothers older brothers they would fight and I just screamed stop stop stop. You know when I look at this situation in Ukraine we have a war going on where lots of people are being killed and the first step the first step in solving that is step one taken by itself a ceasefire. Just stop shooting.

That is it. You don’t have to have the totality of the agreement negotiated over five years or whatever it is to get the stopping the killing now. A ceasefire requires a ceasefire not security guarantees not this that or the other all that just get a ceasefire.

Security guarantees are a very funny thing in there. If the U.S. had if if if Ukraine were part of NATO today we’d be in world war three. We would be.

The U.S. would be obliged by contract to go in there. Do you want to threaten world war three for a security guarantee of Ukraine? I you know that’s a serious question that you and I can debate but frankly I really do feel sorry for Ukraine. I do think it’s awful.

I don’t want world war three to be honest with you. So talking about a long-term solution I would love to get a long-term solution to end the Ukraine war Ukraine Russian war permanently but we don’t have to ever permanent solutions to begin with. I think that by requiring a security guarantee by requiring a return of all properties etc to Ukraine that we’re taking from Crimea onto the whole Donbass region there requiring that is a non-starter.

It will it will not lead to a ceasefire and we’ll just keep going until something explodes. I would like to see us do a ceasefire first and then see what we can negotiate. If we can’t negotiate it Zelensky has a perfect right to say no and put Putin has a perfect right to say no.

I mean what you try to do is find common ground is there a way of making this a permanent ceasefire and solving the problem between Ukraine and Russia. Whatever it is I don’t know what the solution is but I do know it starts with a very limited ceasefire and then you try to negotiate from that position to make it more and more and more and more permanent. That’s the way you go on ceasefires and I’m just very saddened that Europe and Russia and Ukraine are all unwilling to even start with a ceasefire.

You need that and I think Trump is correct that we just need a ceasefire now and then let’s start negotiating. Let’s start talking maybe we can’t come to a good answer David. I don’t know but at least you’re not killing people in the process of negotiating.

Do you follow me? Yes. Good. Do we need a security guarantee? That surely should be something on the table to discuss.

NATO membership should be on the table to discuss. Everything should be on the table to discuss but start with a ceasefire. Okay now we’ve got to breathe.

No one’s shooting anymore. Let’s sit down at the table and start going what about this? What about that? What about the other? I’m not trying to in a ceasefire determine what the ultimate peace deal will be. I just want it to be a ceasefire to start the peace deal conversation going.

It’s like mom, dad stop fighting. Stop fighting. Sit down.

Take a deep breath. Go to different rooms. You know that’s the way you want to start and then you start saying look if you did this with it then we can maybe come to a long-term solution.

It’s like Gaza as well. It’s like all of these places and they are very dangerous David. Believe me they’re dangerous.

The Trump administration wants so-called back pay for the billions of dollars sent in terms of military aid and financial aid to Ukraine over the last couple of years. Should the U.S. make an economic deal with Ukraine either in the form of a rare earths deal or anything else? If it’s worthwhile for Ukraine and if it’s worthwhile for the U.S. yes. If it’s not no.

I mean here you got two independent people and they’re trying to negotiate a deal. Now what does Ukraine get out of a deal a rare earth deal with the U.S.? What Ukraine gets out of it is a lot of U.S. economic presence there which should be a little bit off putting to Russia for invading the country. I mean I would think Russia would be very careful about invading a country where there are a lot of U.S. economic interests.

It does trigger hostilities from our side and I think U.S. needs to do a deal with Ukraine where we make money as well. So it is a win-win situation if you can find the right terms. If you can’t find the right terms no it makes no sense but I think there’s a great deal for Ukraine to be advantaged by the U.S. doing a lot of business in Ukraine and having a lot of assets in Ukraine and I think U.S. gets a lot of benefits from having a lot of U.S. business in Ukraine both economically and strategically militarily.

So I think Trump was very good in proposing that but it may not fit Zelensky and Ukraine’s position but at least they got an option. They can always say no David. Yes.

What’s wrong with saying no if it’s not but thank God for even making a proposal. That’s what deals do is you make the proposals and you may not like it then don’t take it. But you know a ceasefire is a ceasefire.

Just stop shooting. Now with the guns not blazing with none of this imperative that you’ve got to shoot with that there you can sit down and maybe have a cup of coffee and start talking. And the way mediators operate is always the mediator goes to the one side and talks to about this.

Then he comes back to the other side. They don’t all three meet. If Putin and Zelensky were in the same meeting together they could have solved this long ago without the U.S. The reason why they’re fighting is because they can’t solve it.

So you separate the two belligerents and the mediator goes to each one and talks to each one. You never include the other one in the meeting with the first one or the first one in the meeting with the second one. It just that’s not the way mediation works.

If you’re ever divorced David you’ll understand what I mean. But mediation that’s how a country is mediated. Now if the U.S. is the mediator and it goes to Russia and talks what do you want and it goes to Ukraine what do you want and above above and negotiates back and forth.

If they do that we just might get a good solution. We might not but God we should try. There’s no upside to continuing this war.

Why doesn’t the U.S. just stay out of this completely just hypothetically Dr. Laffer and let the EU mediate this instead the European partners. Well maybe they will. I mean that’s maybe in the U.S. I mean we’ve had the EU sitting there for what is it now four years three four years three years now plus trying to do something.

EU’s done nothing. Biden did nothing. Trump came in and tried to do something.

Now if it doesn’t work he can step back and let the EU keep going the way it was. But there’s nothing wrong with trying. All I’m trying to say is there’s nothing wrong with saying let’s have a ceasefire and let’s start the discussion.

I’ll go sit down with Putin and find out what he wants. I’ll go sit down with Zelensky and find out what he wants. And the U.S. I mean that’s perfectly reasonable to do it that way and that’s the way it should be done.

But it starts it starts with a ceasefire. Mom and dad stop fighting. And you know inter-European battles.

I mean it’s just it’s just grotesque to see the number of people killed and the damage being done to lives to humanity. Ceasefire is the first step. Then let’s see what the second step is.

1. That’s the way that’s the way peace negotiations always occur. Well let’s see if that happens.

Let’s switch gears. I hope it does. I really do.

War you know as Linda Ronseth says no one likes a nuclear war. That’s a quote. Is that the worst case scenario here? Is that on the cards? I’m sure it is a guy on the cards.

Of course isn’t why you’re worried about it. Russia’s got nuclear weapons. You know when I was a kid David now this is a long long time ago before your parents were even born.

But when I was a kid we used to have we used to have defense things about a Soviet missile attack on the US and we’d have these big wooden tables and all the kids would climb under the tables in case of a Soviet attack. It was scary. It was awful.

You know I don’t want to go back to that. You know we’ve had you know looking at Korea and Vietnam and some of the other wars that have occurred but nothing like World War II. We don’t need to back to a world of world wars.

We really don’t. It’s not good for anyone. Let’s get a cease fire to begin with and then let’s start talking.

And you must agree with me on that. I hope you’re I hope you’re readers and viewers too. You know you don’t have to stipulate what the final agreement looks like to get a cease fire.

You just don’t. Stop. Cease fire now.

Now let’s talk security. Let’s talk trade. Let’s talk what the properties go to where what.

And if they don’t agree these two countries don’t agree they can go back to war with each other. But at least let’s try. As John Lennon my hero John Lennon said give peace a chance.

Just give peace a chance. I like John Lennon too. But I love that stuff and war is never good.

I yeah well if you’re watching this now to the audience comment below on what Dr. Laffer just said what should the next step be cease fire and then you know what else. So let’s talk about finally cryptocurrencies. Now this is a as you’re aware Dr. Laffer President Biden wanted to implement a Bitcoin strategic reserve but now he’s expanded that just this weekend.

He’s expanded that to a crypto. I think you mean Trump. You said Biden.

Did I? Oh I apologize. Yeah you mean Trump. Okay yeah you’re right Trump.

I was sitting there Biden did? Oh my god. No Biden did not. Did I say Biden? Wow my mind is not working.

I’m sorry. It’s 2 a.m. in Taiwan right now. I apologize.

Trump wanted a crypto strategic reserve. This is what he said on Truth Social. U.S. crypto reserve will elevate this critical industry after years of corrupt attacks by the Biden administration which is why my executive order on digital assets directed the presidential working group to move forward on a crypto strategic reserve that includes XRP, Solana, Cardano.

I will make sure that the U.S. is the crypto capital of the world. We are making America great again. And then he added obviously Bitcoin and Ethereum as other valuable currencies.

This has had mixed reactions from the crypto community. On the one hand the Bitcoiners don’t like it. They think all the other coiners are trash.

The only thing that should be in the reserve is Bitcoin. And on the other hand while the rest of cryptocurrency market is celebrating this, cryptos are up today or actually yesterday on this news. What is your take on the idea of including a lot of these other projects or tokens or coins into a strategic reserve? I’m not sufficiently competent to be able to go through each and every one of the currencies there to decide whether they should or should not be part of this deal or any of the exchanges or any of that stuff.

But the idea of cryptocurrencies is an ancient one. We have moved from bad monies to good monies over time. And what you’ve seen happening with the weakness of the unhinged paper currencies which came about really in the early 1970s with Nixon and the Smithsonian Accord and all of that which got rid of gold as a backing for the dollar.

You’ve seen hyperinflation. You’ve seen the actual currencies monopolies run by the government have been failing and people are struggling to find an alternative private money. And they’ve looked at gold if you notice that gold prices have risen dramatically as well and crypto prices have risen dramatically over the last couple of years.

And looking at these it’s the private markets attempt to get an alternative means of payment. And I think Trump is very correct on this is trying to make it respectable and legitimate to think about cryptocurrencies not picking one over the other. But I think he’s trying to make it so that these currencies the markets can in fact look for an alternative to paper currencies.

And I laud him for that. I think it’s why shouldn’t he allow this to happen and why shouldn’t the markets try to find a cheaper easier better currency. And that’s what’s happening.

And I really think it’s neat. And by the way I’m scared to death of cryptocurrencies. I don’t own any of them.

I don’t understand it all but I don’t understand gold either. But it really worked for centuries and centuries. You know if you go back to the U.S. let’s say you can go back to the 1790s from 1790 until 1913 we had private monies in the U.S. They were banknotes.

They backed it on gold. The gold was defined as the currency. The federal government did not have a role to play in money.

They just defined a dollar as 1 20th of an ounce of gold or one ounce of silver. The government also minted coins but so did lots of other people and the government also back then audited bank balance sheets to make sure that they were telling the truth and their financial statements were accurate. They did that but they didn’t control money and starting in 1913 on to the present they’ve taken over and nationalized money.

And as you can see from 1790 until 1913 inflation was effectively zero. Prices bopped around but there was no generalized inflation in that period. If you look at the period from 1913 to the present I think prices have risen 33 or 34 fold.

We’ve had huge inflation since then. It’s time to go back to a private money my view. That’s me as an economist and I think crypto has a right to be considered as one of those private monies along with gold and along with alternative sources there and I’m very excited about the prospects of that to be very serious.

This is a question from our producer Aaron. We’ll give him credit for this. Why would the government on a federal level even tolerate this? I mean the role of private money wouldn’t this somehow subvert the federal reserve or the treasury in controlling the flow of money? Yeah it surely would and that’s why a good government a decent government that reflects its citizenry and its residents should do that.

If the government’s doing a lousy lousy job at something they should stop doing it and the government has done a lousy lousy job on money creation and controlling monopolizing money and they should get the hell out of the business and be back into the business of auditing private sector but not producing all the products themselves and that’s exactly what happened in Eastern Europe after they went free from the Soviet Union and you can see how the Eastern European countries are exploding with economic growth because they have denationalized all of these industries and we have a really a very bad control of money and it’s caused all sorts of bad consequences and I think we should at least allow markets to go back to private monies if they want to.

Final question before I let you go Dr. Laffer. What do you think is going to happen with the Fort Knox audit? Are you expecting anything to come out of that? You know do you know remember Geraldo Rivera? Do you remember the guy the guy Geraldo Rivera and he did that one and I forget what it was the vault was it the big gangster the gangster’s vault and they had the biggest secret thing and opened the vault and there was nothing in it.

I don’t know that that’s what’s going to happen with Fort Knox but I’m really curious to see what’s in there. It’s really cool isn’t it? I mean do you think the gold’s there? Huh? I think it’s I don’t think the U.S. should be in the in the business of storing gold. I don’t think the U.S. should be in the business of gold.

If you’re going to have a dollar you should have it backed by gold but I think the U.S. should get out of the money business and sell off the gold stocks and let private monies come back into come back into vogue. That’s what I’d like to see and first thing I do is I want to see what happens when they open that vault door in Fort Knox. There’s all sorts of there’s all sorts of jokes online the people at Fort Knox are busy painting their bricks gold color.

I know I love it don’t you love it? I don’t know if they’re saying I understand it’s all trolls and ghosts and trolls and all this stuff there but it’s it’s very exciting you know it’s just really exciting. I mean that the implications suppose there were no gold would be disastrous for a lot of people but I’m not where is it then? Yeah I know what happened I mean I can tell you what happened in March of 1933. That was the bank holiday act Roosevelt’s bank holiday four provisions of that thing you got to turn in all gold it’s it’s illegal criminally illegal to hold gold except for Dennis had a little bit and stuff like that that’s one provision.

Number two it put that the price of gold which was twenty dollars and sixty seven cents an ounce you could buy all the gold from the private sector at that price and they did and it was criminally if you didn’t sell your gold you were criminally liable. All right number three banks were prohibited from buying or selling metals of a specie and banks were prohibited from buying or selling foreign exchange. After having that in proper place for six months it then was September of 1933 that the government then devalued the dollar in terms of gold from twenty dollars and sixty seven cents an ounce to thirty five dollars an ounce after confiscating it all from the private sector.

This was the biggest wealth tax in U.S. history they devalued the wealth and specie by sixty percent and foreign currency by the way as well and that was the beginning I mean of the monopoly it’s one of major steps in monopolizing money in the process it’s just shocking. I wrote my dissertation on the voluntary foreign credit restraint program and the interest equalization tax which was another major move by the government to stop uh importing monies from abroad and on and on it goes now we have a government that controls the money totally and completely at least as much as they can and you can see what the consequences are. I hope your viewers understand that inflation is a consequence of a debauched unhinged paper currency.

There is no cost to adding another zero to a dollar bill none so if the marginal cost of adding a zero is zero they’re going to add a lot of zeros. That’s the problem with currency boards is because once you get the backing there of the currency board once you’ve got that backing government looks at that pot of money and decides it wants to take it and they do that’s what happened in Argentina when uh when Menem left and then the other side came in and you know governments need to be out of the business they need not to be producers of money. Very good thank you very much an honor to have your insights once again.

So where can we follow your work Dr. Laffer? I mentioned uh you’re the author of uh what you knew you knew is about the Trump miracle a economic miracle rather we’ll put a link down below um you’re also the author of Taxes Have Consequences a book that you very genuinely sent me thank you for that and uh we yeah where else so read those books where else can we find you? I understand that there’s a great podcast that has my viewers reading on it it’s called the David Lynn podcast if you know how to get your people there to look at this I would love to do this type of conversation with you it makes much more sense to me than saying all the letters I write all the notes that speeches I blah blah blah but I think what you’ve done here is very admirable I love it pull the stuff out of me you get me all excited and focused on this stuff and it really means a lot to me and

I’m just gonna just uh not let you follow me on other uh another media I’m just gonna wait till you invite me to come back again and I will do it and I will invite you back again soon there’s a lot of talk about with the uh with this administration moving things at a very fast pace so and if you ever want to do one on Reagan you know we could do a whole Reagan oh yes I would love to do a Reagan go through the whole era of Reagan of what he did and didn’t do I’m about the only one left alive David who was there yeah I mean you know

and I’d love to talk about that and how it was in the push and the pull because if you look at this you’re seeing all the same conflicts with Reagan what happened when Reagan invaded Grenada with the Cuban troops there it’s not unlike uh it’s not unlike uh Ukraine you know when we had all this stuff the similarities are there at any time you want to do a good long uh session on that I’d love to with you and if you want me to debate other people I’d love to have you debate with the uh with the people who wanted wealth tax get Elizabeth Warren on here get Bernie Sanders or get Saez or get Piketty

I don’t give a damn let’s debate it what happens when you raise taxes on the top one percent I know what happens I’ve got every single tax return they don’t know and if they do know they’re misleading you you think you can get income uh you can income growth and more equality by taxing the rich you’re crazy sorry all right comment below comment below who you like to see Dr. Laffer debate we’ll we’ll bring on a left-wing economist for you Dr. Laffer thank you that’ll be a lot of fun enjoy Taiwan thank you very much Dr. Laffer at honor once again we’ll speak to you again soon and thank you for watching don’t forget to like and subscribe