00:07:51.900And I think a lot of the standard economists didn't use that kind of imagination to be able to say, well, of course China's going to eat these.
00:08:00.700And the other thing, too, that Walmart has been eating a lot of the cost.
00:08:09.380So across—it hasn't flowed to the consumer.
00:11:09.340But an independent central bank is very important.
00:11:13.560But as I said, as we were going around the table, when the president called on me, the Federal Reserve gets this authority because the American people trust it to be independent.
00:11:26.200And when we have a potential scandal like this or a potential member who seems to have a very serious mortgage violation, because one thing we have not heard yet from Lisa Cook, we haven't heard her say, I didn't do it.
00:11:44.500We haven't heard her say, I didn't do it.
00:11:45.720Just for people who haven't followed this that closely, Lisa Cook, on the Fed, accused of a scandal, fired by the president, saying that the president doesn't have the power to fire her, now threatening to sue the president.
00:11:58.920The president says, you know, go on and try it.
00:13:14.440And one of the things that I have called for over the past couple of months is for the Federal Reserve to do a big internal review before an external review comes along.
00:13:32.420And I think this should be the thing that pushes them over the line just to review all that.
00:13:38.800Because there's monetary policy, there's regulatory policy, and then there's the administration of this sprawling institution with a very large budget that's losing.
00:13:51.060The Federal Reserve is losing $100 billion a year because of some bond buying that they did at bad prices.
00:14:00.100So again, for now, I'm calling for an internal investigation.
00:14:08.260Before they get the external investigation, right?
00:14:11.920President Trump, during the cabinet meeting, was attacking the Fed chairman because he said, look, America's housing is doing very well right now, but the housing market would be doing much, much better if not for Jay Powell's stupid rates.
00:14:25.840One, from your position at Treasury, how do you assess how the Fed is doing and housing and elsewhere?
00:14:32.220And then looking ahead to the next Federal Reserve chairman, what sort of things do you want to see other than it not being you?
00:14:39.060Well, one of the things that I said that I won't comment on the mistakes the Fed's going to make, only on the mistakes they have made, because that's a big folder.
00:14:52.540And a couple of the big mistakes was when they did a quantitative easing, which was large-scale bond buying, that had the effect of lifting assets.
00:15:02.360And again, the top 10% of households own 88% of equities, the top 50% really own the other 12%, the bottom 50% of Americans have debt and rent.
00:15:17.840So again, you end up with this distributional problem.
00:15:21.660There's a progressive economist, Karen Petirou, who has a book called The Federal Reserve, The Engine of Inequality, who says that they've set off this massive amount of inequality that we have in the U.S.
00:15:36.160And if we look back to the COVID period, I couldn't have agreed with the Fed more in terms of when the markets became destabilized, March, April, even May, June of 2020.
00:19:44.780So I understand how these institutions work from the bottom up.
00:19:48.760And this big market outside of the regulated banking system that we're seeing in private credit and buy now, pay later, all that tells me that the regulated banking system has been in this regulatory noose.
00:20:06.880And we need to unshackle the banks, especially the small banks.
00:20:12.760And the small banks doing well is the key to Main Street doing well because they provide a huge amount of the small business loans, the ag loans, the small real estate loans.
00:20:22.800So it would be someone who understands bank regulation well.
00:20:26.440And then three is someone who can run an institution of this magnitude.
00:21:21.180Uh, the president has talked about a sovereign wealth fund for the United States.
00:21:25.640Uh, he said there are going to be more investments to come.
00:21:28.060I think many people in America right now would like to see him acquire a cracker barrel as soon as possible, maybe turn that around too.
00:21:35.100Uh, but assuming that's not on the docket for businesses that he's looking to, uh, to constitute the sovereign wealth fund, what sort of industries,
00:21:43.160what sort of businesses could you see down the line if that fund is to be built?
00:21:48.060Well, uh, we'll, we'll see whether it's in the form of sovereign wealth fund or, uh, other businesses.
00:21:55.300But I, I, I think, uh, your viewers should think about it in two ways.
00:22:02.240So the only, as I've said many times, the only good thing about COVID was it was a test run for what happens if we were to get into a kinetic war with a major economic slash political adversary, i.e. China.
00:22:18.260And we saw that we were woefully negligent in our supply chains.
00:22:23.280So five to seven strategic industries that we have to rebuild at home.
00:22:28.820So with chips being one, 99% of the high value chips are made on the island of Taiwan.
00:22:37.760I, I have no reason to believe that China will do it, but I know they could do it if they were to do a blockade of Taiwan and stop semiconductors from getting off.
00:23:37.240Uh, why, why, why shouldn't the American public, the American taxpayer get part of the upside?
00:23:42.760So I, I think their, uh, early stage talks for, uh, the two government controlled mortgage companies, Fannie Mae, Freddie Mac, then that, that could be a windfall for the American taxpayer, uh, that perhaps a sale of TikTok, then the government, some of that value could accrue to the American taxpayer.
00:24:08.560But I, I think what's important here is unlike the past, I, I guess we'd have to go all the way back to, I don't know how far, um, President Trump wants to create assets for the American people, not debt.
00:24:25.680So he wants to pay down the debt with the tariffs, tariff money, and the CBO came out on Friday and all of a sudden they had an aha moment.
00:24:36.740There could be $4 trillion comes from tariff income, $3.3 trillion from tariffs, $700 billion.
00:25:12.920So, uh, we, we, we had a big increase in tariff income July over August.
00:25:17.840Uh, my guess is we're going to see a big increase August over September.
00:25:22.660Then we'll get into a natural cadence that 400, five, $500 billion.
00:25:31.020And the, the, again, the way for your viewers to think about that is every 300 billion is 1% of GDP.
00:25:38.580So, uh, if, if we could get, make it easy on me, if we could get to 450, then we will narrow the budget deficit by 1.5% of GDP.
00:25:49.340So the mess that the Biden team left us, they left us at 6.5% deficit GDP.
00:25:54.740The highest, when we weren't at war, what, weren't a recession, if we could get it down to something with a five or a four in front of it, at the same time with the one big beautiful bill that it's front loaded as the companies are building factories and buying new equipment, then they get a automatic depreciation.
00:26:16.920So that hits in the early years, but it's like coiling a spring, it's productive capacity, and then that production comes online and generates more jobs, tax income.
00:26:26.800So if the tariff income actually, the, uh, prevents the, the front loading, then this is fantastic.
00:26:37.640And this is what the president kept saying in the cabinet meeting.
00:26:39.880He said, you think it's good now, wait for two years, wait for three years when, when this capacity is really online.
00:26:45.040But I, I, I do think we're going to see the acceleration fourth quarter of this year, beginning of next year.
00:26:52.740And I think 2026 could be a great year.
00:26:56.320Mr. Secretary, any fun plans on Labor Day?
00:26:59.640Uh, I, I actually am going to, for Labor Day itself, I'm going to be out, uh, my, one of my favorite parts of the one big beautiful bill is the no tax and tips.
00:27:09.760When I went, I got my first, I actually had two jobs when I was nine years old.
00:27:14.280One was working on the beach, putting out, uh, beach chairs and umbrellas.
00:27:18.320Uh, the other was working in a restaurant.
00:27:20.780So I've been getting tip income since I was nine years old.
00:27:24.960So I, I'm going to visit a series of, of family restaurants and diners, probably not Cracker Barrel, uh, on the, uh, on Monday and talk to the employees there about the, the difference that no tax on tips is making in their lives.
00:27:43.760Because they, uh, the, the, these are hardworking people.
00:27:47.940They're going to get to keep more of their income.
00:27:50.900And, uh, I, I can tell you, because there's no tax on tips.
00:27:54.560When I walk into a restaurant, I'm the most popular person there.
00:28:15.660One thing I notice every time I sit down with Scott Besant is that he looks like a basketball player.
00:28:22.540A little bit whiter than most basketball players, but he's very, very tall.
00:28:25.980I think he's a descendant of the Nephilim.
00:28:27.920Anyway, after I spoke to Secretary Besant, I then moved from the basketball player to the, to the football player, a former professional football player who now happens to be the Secretary of Housing and Urban Development at a time when housing is on everyone's mind.
00:29:16.380And that is one of the many reasons that I'm thrilled about Hillsdale College's brand new free online course called The Federalist.
00:29:22.620You know those Federalist papers everyone references but few have actually read?
00:29:26.080They were penned by Alexander Hamilton and James Madison and don't forget John Jay to explain how our Constitution creates a government strong enough to protect our rights, yet safe enough to trust with power.
00:30:43.820One point that stuck out to me was President Trump going after the Fed Chairman, Jay Powell, and saying that because of his policies, housing is not exploding in the way that it should.
00:30:54.060And I know this is an issue that is on a lot of, especially young Americans' minds.
00:31:08.500And as you can see, the president is very transparent.
00:31:11.340And as he said, in the cabinet, we have nothing to hide.
00:31:13.800Every cabinet member had an opportunity to speak about what's going on in their prospective agencies.
00:31:20.700And so the American people appreciate that.
00:31:22.620I hear from people all the time, thank you, you know, that we get to hear what's going on in education and labor and defense and state and HUD.
00:31:30.200And so I'm grateful for the president doing that.
00:32:57.840Washington doesn't know the needs of Nashville, Tennessee, or Plano, Texas, or Dubuque, Iowa, or Trenton, New Jersey, and so on and so forth.
00:33:28.080Another thing is to form public-private partnerships.
00:33:30.520I've traveled all around our country and have seen some great examples as it pertains to affordable housing, single-family, multifamily.
00:33:37.960And manufactured housing is also a big deal when it comes to affordable housing.
00:33:41.600But when private entities partner with public entities, public-private partnerships, and they work together to identify the issue and then come up with a strategy for long-term sustainability and execute that strategy, I've seen that over and over again.
00:33:59.460The federal government is not the answer.
00:34:01.140The federal government, HUD, is a facilitator and a great convener.
00:34:05.360But when you start bringing in the private sector, when you start bringing in the nonprofits and the faith-based entities that are doing the work on the ground every day, that's how you build more affordable housing.
00:34:16.920But it has to start with regulation, and we need the interest rates to come down, period.
00:34:21.620Now, the other aspect of the last two weeks of the news that's really touched on you is that President Trump is threatening to invade all these cities, notably Washington, D.C., which is obviously the federal district anyway.
00:34:35.740So the notion that the president could take over Washington is kind of absurd on its face.
00:34:40.520But he said, and we're going to look at Baltimore, and we're going to look at Oakland, and we're going to look at Chicago.
00:34:45.400In the cabinet meeting, he seemed to couch that a little bit and say, look, I'd rather go in there by invitation.
00:34:54.52024 out of 25 times, they're Democrats, and they don't want to admit that they need my help, but these cities are falling apart.
00:35:00.640From the federal standpoint, what do you think that the government can do to improve these cities that, in some cases, I'm only being slightly hyperbolic?
00:38:17.940Politics should never trump principle.
00:38:19.680And I believe what you're seeing now with the president, with this cabinet, with leaders in this administration, we're getting back to principles.
00:38:27.820We're getting back to the foundational principles that make America great, that make America safe, that make America prosperous, that make America welcoming, that make America a place where hardworking, everyday men and women raising their families feel proud to live.
00:38:42.200And I think returning to that principle mindset is what you're seeing.