What if I told you there was an economic boom happening in America? It's called the "CapX Boom" and we talk about the positive news that's happening here in America right now? Today's guest is Joe Lavorgna, Counselor to the U.S. Treasury Secretary Scott Besson.
00:00:51.000His spirit, his love of this country, he's done an amazing job building one of the most powerful youth organizations ever created, Turning Point USA.
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00:02:02.000Thank you so much for sharing your time.
00:02:03.000Tell us about the successes that we are seeing with capital expenditures in this country right now.
00:02:09.000Yeah, you led with a nice lead in, and that is if you look at the capital expenditures, essentially what businesses are spending to run their businesses more efficiently, to run it better.
00:02:21.000Those capital expenditures in the official government data rose at a 24% annualized rate in the first quarter.
00:02:30.000And then we have figures from the Federal Reserve that suggest that in the second quarter, those same government numbers, when they become official next week, should show another 11% increase.
00:02:42.000That would bring first half capital expenditures, capital outlays, capex, as it's known, to a 17% annualized rate.
00:02:52.000That would be the fastest two-quarter gain, excluding the pandemic, since late 1997, which you think about, it's almost 30 years ago.
00:04:29.000So this AI renaissance is very important.
00:04:32.000I know you guys are monitoring this at the Treasury Department.
00:04:35.000What does that also mean for blue-collar jobs investment?
00:04:39.000And can you talk about how capital expenditures actually is a direct investment in the working class?
00:04:46.000Because when companies invest, workers then have higher wages and more work, please.
00:04:51.000So, Charlie, if you look so far at the first six months of President Trump's term, blue-collar workers, these are people who are not the professional managerial class.
00:05:18.000Unfortunately, through the bulk of time and data go back to the 1960s, people saw real wage declines, not even increases, but declines.
00:05:26.000So already the blue-collar boom has occurred.
00:05:29.000To the extent we get more capital investment, in other words, companies being able to invest in tools, machinery, to allow them to produce more, that means higher productivity, higher profits.
00:05:43.000And we know from technology and AI certainly now is at the forefront of technological innovation that when we have these technological booms, they're disinflationary.
00:05:54.000So that will also tend to lift real wages.
00:05:57.000But also, the middle class tends to benefit quite significantly.
00:06:01.000We had a little bit of that under Trump 1.0 in his first term when you saw significant increases in median household income and the middle to lower income wage earners did the best.
00:06:12.000So essentially what the president's doing is he's taking the policies that worked well in his first administration and he is accelerating and improving upon them in the second term because there's other parts of the bill, not just the full expense of capex, but also, Charlie, the full expensing of structures.
00:06:30.000So now you could deduct the building of a plant or a factory.
00:06:59.000Business investment is surging at the fastest pace since 1997.
00:07:03.000Equipment production jumping 17% year over year, powered by retroactive incentives in the president's newly signed Big Beautiful Bill.
00:07:12.000The administration hoping to boost productivity, lift blue-collar wages, and lay the groundwork for longer-term economic growth.
00:07:19.000So what other components on the Capital X side makes America have a competitive advantage?
00:07:28.000So can you just walk our audience through how some of these companies, they need to pick what country they're going to have capital expenditures in?
00:07:37.000And why is it now that America is winning that contest, please?
00:07:41.000So number one, Charlie, if we start with the Tax Cuts and Jobs Act of 2017, you've got a significant cut in the corporate tax rate.
00:07:48.000Corporate tax rates is one of the lowest in the world.
00:07:51.000We'd love to see it lower, but it's one of the lowest in the world.
00:07:56.000You've got pro-business regulation, the president trying to shorten the time with which it takes to build something because the permitting process has gotten out of control.
00:08:26.000You're getting tax credits to be here if you're building a plant or you're investing in CapEx.
00:08:34.000I mean, it's across the board where you want to bring your money here.
00:08:39.000And the tariff, in addition, is an added incentive to do it.
00:08:42.000So this is why you're seeing the president announce all these countries wanting to invest directly in the U.S., why Secretary Besson's been working so hard to get these trade deals through.
00:08:53.000We're now reaping the early stage of these benefits, which should be multi-generational as they take hold.
00:09:00.000And so let me just kind of have one final question here, Joe, which is how much of this is current and is also a lagging indicator?
00:09:10.000When do you think we'll start to really see the culmination of CapEx?
00:09:15.000Because some of this, in my opinion, takes six, nine, 12, 18 months to materialize into macroeconomic data.
00:09:23.000When do you think we're going to really start to see all of this take hold where people start to feel the benefits of this capital expenditure bonanza that's happening in a good way?
00:09:37.000So the big gain in Q1 that looks like it continued in Q Charlie was due to the fact that we have retroactivity to the tax cut.
00:09:58.000And because AI now is so abundant and we know how to use the technology, so that shortened the time period from which you actually could get the benefit.
00:10:07.000So we're not talking like 12, 18 months.
00:10:09.000We're going to continue to see the benefits as you get more capex.
00:10:12.000We'll see very strong second half numbers.
00:10:14.000The economy should be growing at 3%, 3% plus.
00:10:18.000And then sometime in the new year, we could talk about how 2025 started this incipient boom.
00:10:24.000And with these policies in place, there's a very long runway.
00:10:28.000And that runway is going to be higher living standards, higher wages, and Americans are going to feel much richer and healthier because of it.
00:10:40.000According to the Department of Energy, the risk of blackouts could increase by 10,000% over the next few years.
00:10:47.000It's because of massive energy demand from AI data centers and an aging, fragile power grid that just can't keep up.
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00:11:56.000Japan is our number one foreign investor.
00:11:58.000They're our fifth largest trading partner.
00:12:01.000Take a little victory lap and explain to the audience what happened yesterday.
00:12:06.000Well, the president, with the help of Secretary Bessett, Ambassador Greer, and Secretary Lutnik, worked on an historic deal where there's a 15% reciprocal tariff with Japan.
00:12:19.000They are going to take our agricultural products, make it less onerous as they import products from us.
00:12:26.000They won't have to go through other additional regulatory checks that we're holding back many of the goods that we want to export to them.
00:12:33.000And at the same time, Japan has committed to, and this is because of President Trump's leadership, has committed to investing $550 billion into the U.S. with a 90-10 split, 90% of the profits and proceeds taken by the U.S., 10% going back to Japan.
00:13:16.000It shows that President Trump upselled Japan from a $400 billion investment to a $500 billion investment.
00:13:24.000That's all tied into capital expenditures.
00:13:27.000Can you just walk through somebody living right now in Marshallton, Iowa, or someone that's living in Butler, Pennsylvania, or someone that is in a rural area where factories are starting to come back?
00:13:37.000What does this mean for forgotten parts of the country that President Donald Trump is a phenomenal salesman for America?
00:13:46.000So Charlie, what it means is that Japan, it's not just Japan, many other countries have announced their intention to bring capital, bring money into the U.S. That money is going to invest in projects that people want to be in, that these foreigners want to be in.
00:14:03.000It could be cryptocurrencies, the creation of digital assets, which you need to mine those assets.
00:14:12.000It could be automobiles, because again, there's tariffs.
00:14:16.000Those tariffs are designed to encourage people to not sell into the U.S., rather invest in the U.S. So it's a whole range of potential different industries and products that people want to come into the U.S. because the U.S. is the largest economy in the world.
00:14:33.000We're the biggest consumer in the world.
00:14:35.000We're the wealthiest consumer in the world.
00:14:37.000So there's all these wonderful opportunities to come into the U.S. And President Trump has said, look, we're open for business and we're going to make it so that it is your best reason.
00:14:47.000It makes the most sense for you to be here.
00:14:50.000So when you have countries like Japan who are committing over half a trillion in capital to build the industries and firms here that they think are going to be additives to the U.S. economy, the U.S. worker is going to be a direct benefit of that.
00:15:07.000So again, we'll get more details as things come out, but this is really fantastic news.
00:15:12.000And so, for example, that means that Toyota might build more manufacturing plants here.
00:15:18.000That means that Japanese, so talk about that, how foreign companies can avoid the tariff, and that means that they will build and they'll invest in the United States, which is a benefit for everybody.
00:15:30.000It's a benefit for welders, electricians, and plumbers and accountants, please.
00:15:49.000So as more countries consider, like, look, we've got this tariff.
00:15:53.000Maybe it makes more sense instead of selling into the U.S. and paying this tariff.
00:15:58.000Maybe we should relocate to the U.S. to take advantage of its low corporate tax rates, its investment incentives, its high-quality workforce.
00:16:31.000Well, you're going to employ Americans because the president has made sure that illegal immigration has been put to a fault and you're going to pay Americans.
00:16:39.000And as Secretary Besson has said, because there's now, there isn't any more below or artificial labor supply anymore, you're going to get normal market-based wage rates.
00:16:52.000So your companies are here, they're building.
00:16:54.000And at the same time, the Americans who are here, who want to work at a market-based wage, are going to get it.
00:17:00.000You're going to see wages rise, as Secretary Besson is highlighting.
00:17:04.000Joe Lavorgana, thank you so much for your leadership.
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00:18:38.000Joining us now is a very smart woman, Inez Stepman.
00:18:42.000She's a fellow Claremont, let's say troublemaker with me, but Independent Women's Forum and an anti-feminist.
00:19:16.000I think it's bad, insane, and a really terrible idea.
00:19:20.000Inez, walk our audience through this kind of growing movement and sentiment of young men that seem to be very, very mad at no-fault divorce, which is leading them towards a almost polygamist aim and your response to it.
00:19:43.000And, you know, actually, a little fun anecdote.
00:19:46.000My husband and I went to one of the three states in the union to redo our marriage contract that allows anti-no-fault like divorce where they have a list of possible grounds for divorce.
00:19:58.000It really doesn't work that well in law because you can always escape to the next state, but that's part of the issue with the fact that all of our states have moved to a no-fault regime.
00:20:07.000I don't think that this argument, first of all, it has some truth to it because there is something to the fact that we are by nature not monogamous, that women are hypergamous and that men are hardwired to try to have as many children as possible with as many women as possible.
00:20:26.000And this was something that worked relatively well in human societies in the pre-Christian era and before and to some extent after in primitive societies, but it was totally incompatible once societies moved into some kind of civilization.
00:20:41.000And the reasons for that are anthropological.
00:20:44.000There's obviously there's a religious argument against this, there's a moral argument against it, but there's also a common sense and anthropological argument against it.
00:20:51.000And there's a reason that polygamy, widespread polygamy, as opposed to a small minority elite, but widespread polygamy as a system of marriage has basically disappeared.
00:21:01.000All the societies that practice that, like the Plains Indians, have been essentially defeated, replaced, overwhelmed by societies that didn't.
00:21:12.000So we believe monogamy is obviously biblically and morally correct, but it's superior cultural technology.
00:21:19.000So if young men right now start to engage in widespread polygamy or what they call this red pill culture, and explain that.
00:21:26.000It's not the red pill that we would think of, which is, you know, to believe in conservative or MAGA values, but it's something completely foreign and different.
00:21:33.000Inez, can you explain that and talk about how polygamy is actually really bad for a culture at large?
00:21:41.000Yeah, I mean, polygamy has a math problem, right?
00:21:44.000Even if you don't agree that it has a moral problem, you don't agree with the morality that is taught by Christianity, by Judaism, then you still have a math problem at the end of the day, right?
00:21:55.000So then the basic math problem is what to do with all of the unattached men who have no wife and no hope of getting a wife and no hope of reproducing or having sex, right?
00:22:06.000And those guys tend to get restless and angry.
00:22:08.000We see this like on a small scale in our society today, right?
00:22:11.000As people are not finding a partner or not finding a girlfriend, a wife, right?
00:22:17.000You see that there's unrest there, some of it mitigated by the SOMA drugs of pornography or just doom scrolling online, but still like it causes social problems.
00:22:28.000Now imagine flipping those numbers, right?
00:22:30.000You have an 80% incel culture, for example.
00:22:34.000What happens is there's a lot of restless young men.
00:22:36.000And in times when societies were going to war, where there was a war season, frankly, a lot of the young men were just dying, right?
00:22:43.000So a smaller and smaller number of men were making it through that gauntlet of constant warfare and then establishing themselves in, let's say, a Plains Indian tribe in a position where he would be permitted by society and attractive enough to women to take a wife and then another wife and then another wife, right?
00:23:00.000But you can see how very quickly, if your entire civilization depends on warfare, which is very much true about the Plains Indians, depended on this constant seasonal warfare, that doesn't leave a lot of room for building things.
00:23:15.000That doesn't leave a lot of room for actually applying labor as opposed to defense and war, applying it to butter, right?
00:23:22.000The traditional distinction between guns and butter, to applying it to learning to cultivate, to building wealth and being able to defend it against constant attacks, right?
00:23:31.000So that's why a lot of those civilizations were very precarious.
00:23:34.000They lived very war-filled and precarious lives.
00:23:38.000And by the way, it didn't really, contrast some of the other claims, didn't really explode their fertility rate either.
00:23:43.000Most of those societies had very low fertility rates to the point where they were constantly having to raid other societies for more women in the hopes of saving their tribes from extinction, from demographic extinction.
00:23:55.000So it is a way that to some extent a natural way that people have lived throughout the past, but it is not compatible with actually building wealth, technology, all the things, by the way, that make modern warfare, make you a formidable opponent in modern warfare.
00:24:13.000So it's an important point because societies that embrace polygamy actually don't do very well.
00:24:19.000So why don't you take a step back here, Inez, and explain what an incel is, the problems with young men and young female dynamic and relationships right now.
00:24:28.000Why are so many young men not getting married?
00:24:32.000Why is this even worthy of our time to discuss?
00:24:35.000And this is even being proposed as a potential alternative.
00:24:40.000Explain it to our audience that is not totally in touch with some of the structural issues happening right now.
00:24:46.000Yeah, I mean, look, that's a big question.
00:24:47.000And I'm sure there are a lot of people with a lot of thoughts about this.
00:24:51.000You know, the dating discourse is broad and long, but I do think at least part of it is the fact that we've lost touch with the differences between men and women and what men and women look for in a partner.
00:25:04.000And you see the projection going both directions, right?
00:25:09.000There was a recent viral tweet a couple of weeks ago about a woman saying her friends are just fantastic, amazing catches.
00:25:15.000And then in describing how she thinks that they're amazing catches, right?
00:25:18.000She's talking about their master's degrees or the fact that they have really great jobs.
00:25:22.000And it's not even that those things of themselves are turnoffs.
00:25:25.000I think that can go sort of too simplistic on some of the red pill discourse, but it's that they just don't matter that much to men.
00:25:33.000And women are just thinking about the things that they would like to see.
00:25:36.000Ambition, for example, the ability to provide, the fact that men and women are looking for different things.
00:25:41.000So I think there are like two big hits going on in the dating culture, in addition to just everybody retreating from an IRL life is one is like just simply the obesity crisis, right?
00:25:55.000And that hits women's attractiveness more than it hits men because women are not as visually choosing their partners, as men are.
00:26:01.000So it hits women harder than men, even though both men and women are statistically obese.
00:26:07.000And then on the male side, just lest you think I'm only ragging on women, on the male side, the ability to interact charmingly in person, to be funny, right, to crack a joke, to seem comfortable and confident in company.
00:26:21.000Again, both men and women are retreating from that.
00:26:26.000We spend more time interacting in an asynchronous manner where you don't have to come up with anything witty on the fly.
00:26:32.000You can take your time and type out a text, right?
00:26:34.000That hits all of us, but it hits young men more than women because women just don't really want to be with like a shy, awkward kind of guy.
00:26:43.000It really is just not one of the things that women are naturally attracted to.
00:26:47.000And I think when you put both of those two things together, you add in long sexual histories and heartbreak, you add in the fact that people are looking to marry much later.
00:26:57.000You add all those things together and you get something where the sexual market, if you will, where the average person on both sides of the sex divide is less attractive to the opposite sex than they were, let's say in 1970, where the average woman was younger, hasn't dated around as much, right?
00:27:16.000Doesn't have as long a sexual history, is slimmer, right?
00:27:19.000And is generally not opposed to behaving in a more feminine way or taking on a more feminine role.
00:27:24.000On the flip side, right, in 1970, you had a lot of cultural encouragement for men to develop those kinds of social skills, to develop competencies that would make them feel competent and confident when they were going out and talking to women.
00:27:38.000Those were things that were kind of instilled in the culture, not to be too glib about it, but you'd get stuck in a locker more often.
00:27:47.000And that might have been painful, but it really did shape people in a way that made them more attractive on average, the opposite sex.
00:27:55.000And then, of course, there was a big pay differential between men and women in 1970 in a way that's not true today on the average sort of dating market.
00:28:04.000I'm not trying to be too didactic about this, but it's still, you can look at the overall dating market and see where, you know, your average woman and your average guy who are out there looking for a partner may be less satisfied with what they find than they would have been 30 or 50 years ago.
00:28:34.000And I said, we got a serious problem here.
00:28:36.000The young women, they want a six foot five, blue eye, hunky hedge fund manager making $2 million a year that will, you know, never cheat on her.
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00:30:41.000Inez, you describe yourself as an anti-feminist.
00:30:44.000What is feminism and why are you anti?
00:30:47.000Yeah, it's funny because I've been putting that in my bio for, I don't know, 10 years, 15 years.
00:30:52.000Now it's gotten sort of mixed in with the Tradwife accounts and some other weird things that I want nothing to do with.
00:30:59.000But it's the definition that I use is the political, economic, and cultural equality or social equality of the sexes.
00:31:09.000I think that's a pretty fair and broad definition of feminism.
00:31:12.000For one, it's the definition in Merriam-Webster dictionary, but it's also the definition that Beyonce used when she put that giant feminist sign behind her.
00:31:20.000So it has, I think, some broad appeal.
00:31:22.000And the reason I like that definition is it swoops in a lot of people who think of themselves as more on the right, right, or who are conservative.
00:31:35.000And two is that I wouldn't think that it would be desirable.
00:31:40.000So the differences between men and women are incredibly deep.
00:31:43.000And the feminist sort of premise from the very beginning, from the first wave of feminism, you can go back and read Wollstonecraft and the American Founding and still see the sort of seed of this idea.
00:31:54.000And that is that those differences are primarily socially constructed rather than biological and immutable.
00:32:00.000And I think you've seen the final stop on that train with the trans issue, right?
00:32:05.000If we say that men and women are interchangeable biologically with regard to everything important in life, if they're interchangeable in our relationships, in our careers, in society, in our role in the world, and in our families, then I don't see why we shouldn't say that those biological exterior differences are also irrelevant and interchangeable.
00:32:27.000The differences between men and women above the neck, I guess, Is the short version is the differences above the neck and in our brains, which are confirmed by decades of science before the Academy stepped on doing any of this kind of science, are as significant as the ones that are below the neck that are obvious and external.
00:32:44.000These differences are deep, and I simply think that it's better to accept them, to celebrate them, and to use them in a complementary way where men and women can actually feed off of each other's strengths and counter each other's weaknesses and build a more flourishing society together.
00:33:00.000In closing here, Inez, so what does this look like then from a conservative movement?
00:33:09.000Because there's a lot of young men that are really upset, they're really jaded, and they're joining the conservative movement in record numbers, which is amazing.
00:33:18.000How do we handle this as a movement conservatively to be pro-family, but also try to remedy this structural differences between the sexes?
00:33:27.000Yeah, I mean, so I think it's important that we take some of these structural concerns and legal concerns seriously.
00:33:34.000I'll say that up front before I get to the part that I think young men probably won't like to hear from me, but the part that I think I agree with them on is that it is time for the conservative movement to pick up some of these issues.
00:33:44.000It is time for us to pay attention to the bias in family courts.
00:33:48.000It is time for us to think about the incentives that we are building into marriage and to counteract those both legally and culturally.
00:33:58.000And I think we're finally at a moment where a lot of people are willing to listen to those kinds of concerns more than they might have 10 years, 20 years ago.
00:34:07.000Because I mean, the major problem with the conservative movement, since I've been a part of it for, I don't know, 15 years or something, has been that they've always been chasing the left.
00:34:16.000You know, conservatism is just progressivism going the speed limit.
00:34:19.000Just in this issue, they really have done that.
00:34:24.000They've chased the idea that the right is the real feminist while the left is the crazy feminist.
00:34:31.000And I think we really should stop chasing that train and look at some of the ways in which we built female victimhood and frankly power over men into the legal system.
00:34:41.000And by the way, at the top of that list is things like ensuring due process when there are sexual misconduct allegations on college campuses, right?
00:34:50.000Something that Biden was personally involved in as a VP under the Obama administration and stacking that deck against young men in college and something that the Trump administration reversed not once, but now twice.
00:35:02.000So I do think we should pay attention to more of those issues and take them seriously.
00:35:06.000That being said, you know, the history of human relations is long and there have been plenty of both material deprivation and cultural, you know, sort of, I guess, like cultural structures that weighed against generations before us, right?
00:35:24.000This is not, it's new, but it's not unique.
00:35:27.000It's not like we are in a totally powerless position over our own lives.
00:35:32.000And sometimes I feel like we really go into this, like you have to be able to look at these structures, say they're unfair, and still take agency for your own life and not make yourself miserable in the process.