Why Democrats and Republicans want you to pay $50,000 for a car

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Joe Biden, Donald Trump wish for like a Detroit renaissance.
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Under the tariff regime, this has not worked.
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Hi, I'm Matthew Iglesias.
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Hi, I'm Jerusalem Demsis.
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This week, Jerusalem wants to destroy the American automobile industry.
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I just want a car.
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I personally just want a car.
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What kind of car?
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I want us to be able to buy Chinese electric vehicles.
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You start to realize how insane it is that like we are just like literally not allowed to buy some of the coolest new technology out there.
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Host privilege, I want us to insert here just a video of the new BYD Yang Wang Unai, which is a supercar that can jump over potholes.
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Okay.
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So I have mixed feelings about this.
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Because like I'm, I want somebody else to have, I want this take to be out there in the world.
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Because I'm often sitting around being annoyed by environmentalists.
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It's something I I spend a lot of time doing, is being annoyed by environmentalists.
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And it does seem to me that if you care like more than I do about climate change, as many people do, that like a good thing to do to like put on the table would be like, well, we should legalize these Chinese electric cars.
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If they were available, like clearly more than zero people would purchase them, and it would do nothing to raise prices or like inconvenience people.
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So it just like it seems like a no-brainer as a climate measure compared to say like rooftop solar subsidies, which do reduce emissions, but do so by like shifting costs onto the backs of apartment dwellers, right?
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It's like very regressive, it's quite costly.
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And so like all the time, I you like I see the climate movement like pushing economically costly things.
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Uh, whereas here we have something that would have like negative costs to consumers and would achieve the goal.
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And yet, like it's like have you talked to anybody about this?
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Like where are your allies?
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My allies are here.
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I mean, David Roberts is uh, you know, we we beef sometimes on Twitter, but he's pro letting in the Chinese EVs.
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Uh also, I think someone that we both read, Noah Smith, who I wouldn't call him the world's biggest environmentalist, but he's he's uh he's in favor of this.
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I mean, I agree this has like been kind of like a weird like back issue, in part because both like the Biden administration and the Trump administration seem to coalesce around like tariffs against China, particularly when it comes to like reviving the manufacturing base of the of Detroit in some, you know, right.
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But I mean also like like Europe has done a lot to sort of keep Chinese electric cars out because you know, and it's classic protectionism.
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Like these are big industries, they employ a lot of people, they are very important to the political economy of the critical swing state of Michigan.
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Um I just want to like just be clear, like, I mean, I know you know this, but just the level of protectionism the US is doing against China on EVs and a bunch of other things is like unmatched.
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Like, yes, Europe is doing some protectionism, but like largely those tariffs are like they're trying to like actually counteract the subsidies that China gives to its automaking industry.
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So like anywhere from 7.8 to 35% uh uh tariffs, but like we're doing like 130% effective tariffs.
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It's not really, I think, comparable.
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Like I would be okay with the idea that like there is some tariff that exists so to like, you know, to counteract the Chinese subsidies, which again, I think are a small part of why the Chinese EV market is much better than the American EV market.
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But like that's like very different than right now, where it's just like I just literally can't buy it.
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And I just at core, like I just I have this perception that, or I have this core value that I should be able to buy things I want to buy unless there's a very good reason for it.
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And I'm just like not persuaded that like any of the arguments that are brought up in favor of blocking Chinese EVs are like that good.
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So, okay.
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I mean, I do I I'm like I'm I'm torn because again, it's like I Sheldon Whitehouse did this thread and he was like, we can't listen to these hushers, like Democrats need to talk about climate change in the midterms, and like that's crazy.
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Like they they really don't, right?
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And like I I hear, you know, like Democrats in oil and gas states, and it's like these Greens, like they're killing me, right?
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And I'm like, yeah.
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And then it's like, here we have an idea that like if the up if Sheldon Whitehouse's thread had had your upshot, I would make it.
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Well, aren't EVs like hella unpopular though?
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Well, I mean, no, no, no.
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What's incredibly unpopular is the Democratic Party's policy on electric vehicles, which is that we should make people buy electric cars, right?
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Like there was a vote in the Senate that Chuck Schumer whipped where it was so California was gonna ban conventional internal combustion engine cars.
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And because the California market is so large, this was gonna have a big national impact on the availability of ICE vehicles.
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Um, the Trump administration was gonna deny California the waiver that would allow them to do this.
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It came up for a vote in the House, and you know, a a move to like block California came up in the House.
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All the Republicans voted for it.
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Every frontline Democrat uh voted with the Republicans on this because this measure is very unpopular.
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And then all the Democrats from the Midwest like also voted for it because it's bad for the, you know, Michigan-centric auto industry.
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Then it comes to the Senate and like the climate donors like start working the phones, they're telling Chuck Schumer, you gotta whip this.
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And so in the Senate, the frontline members uh vote, you know, with the left, even though to be clear, there were no stakes to this because Republicans had the votes to pass it, they get fucking Gary Peters to vote for this thing from Michigan because he's retiring.
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It's like Alyssa Slotkin is out there alone on an island.
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So that's crazy to me, right?
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And if Sheldon Whitehouse was saying, you know what, like instead of trying to ban conventional cars, why don't we allow the world's leading electric vehicles onto the market?
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I would say, you know what, Sheldon?
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I just don't agree with you about the significance of this issue and the electoral politics of China, but you at least like have a functioning brain and can think through the order of events.
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But as far as I can tell, like the entire American climate movement only is interested in like climate measures that hurt economic growth.
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And when you come up with something that would be like arguably beneficial anyway.
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But like you're mixed on it still.
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Like you're still not, you're not like I mean, I know you have this like uh, you know, meta point that you want to take about the climate.
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But this is the thing.
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Like at the end of the day, like I think I agree with the Biden administration's original take on this, which is that like we want to preserve automobile manufacturing industry in the United States, and we want to cultivate a domestic battery manufacturing industry rather than create this sort of like wholesale dependence on a China-based supply chain for these emerging technologies of the future.
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So I am in agreement that we should have like a domestic battery technology industry, like not just for like I mean, there's just so many national security net needs for that already we're seeing in the trade war between Trump and uh Trump's administration and and the current Chinese administration that you are seeing real threats to our ability to have um lithium-ion batteries, um, which are power basically everything and will continue to power basically everything for the future.
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But I actually think that like doesn't actually require us to block EVs.
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Well, I mean, I think it I think it might.
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I mean, and I think I I mean I think I w I want to talk about the the logic of sort of this view, right?
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Because w I thought that the Biden presidency was very betwixt and between in terms of what they wanted to say their trade policy was.
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You know, because he came in, he didn't really rescind Trump's prior tariffing efforts.
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I mean, he intensified tariffs on China to some extent.
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But then as they started to campaign against Trump, you know, first Biden and then Kamal Harris were like this across the board tariff is insane, et cetera, et cetera.
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And like I believe fully and firmly in the economics of free trade in a way that I don't think the Biden administration quite did, and the Trump administration definitely doesn't.
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Like, I don't think there's anything you pop open, you know, Ricardo and it's like comparative advantage.
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And I don't think there's anything like wrong with that, right?
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The the economics of 101 account is like totally good, right?
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But if you go back, like the cla the reason the classic example he puts out is England trading with Portugal and they're trading wool and wine.
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And England and Portugal are close allies.
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It's like the world's longest standing uh military and diplomatic alliance, um, you know, now subsumed by NATO.
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But I think there's like I mean, there's like there's like obviously the um sort of more facile free trade uh you know is good for peace argument, but I think like the more sophisticated one that's come out in recent years, like the Dale Copeland argument about future trade expectations is good.
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And and what Copeland Okay, I gotta be honest with you, I have no idea who Dale Copeland is.
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He's a political scientist, um, uh which is a field I know you do not fully respect.
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Trevor Burrus, Jr.
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Grainfield.
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Basically, his argument is like it's not just the idea that like, oh, free trade will just necessarily make everyone be happy and kumbaya and you'll never have war again, because clearly we've observed war under periods of time where different countries have been trading.
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But that the question is about future trade expectations.
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That like if a country is to believe that like the future trade expectations for um itself with you know, if if China believes that like the US is no longer gonna be a real trading partner in the future, that like increases the likelihood of conflict.
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It's not just like is there trade going on, but what it thinks is gonna happen.
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I think this is just like obviously true.
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Like, not just I don't want to like just spend here, like, I mean, obviously all of IR is like just trading examples back and forth for an hour.
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But I just think that it is really concerning to me the speed with which like I like I've lived in DC for most of my life or in near DC for most of my life, and just the speed with which like everyone just started to agree that like we were going to go to war with China or like we're gonna be in like some real adversarial relationship with China and that we were all gonna like have a sort of feta complete about this relationship seems really bad to me.
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And it seems like a self-fulfilling prophecy.
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Obviously, there are some like structural reasons why there are we are geopolitical rivals, but you know, I was reading this book over the weekend called Despero, which is this uh sci-fi book about uh Jesuit priests making first contact with aliens.
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And the it's not at all, it's the only thing that's relevant about this book to this conversation is that I got confused because it's like set in our current time period for some period of time, and they're talking about like Japan as like our main geopolitical rival, and then I'm like, oh yeah, this book was written in like the early 90s, like late 80s.
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And it's like the same fucking thing was happening then.
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And like now, you know, Japan's like our biggest ally.
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And again, I'm not saying that will definitely happen with China, but I just think there's like so much over-indexing on like current negative relationships.
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And I think it creates this the exact conditions for which you don't want to be interconnected.
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Well, so okay, so years and years ago, you know, I worked at the American Prospect, and that was a very like labor-aligned publication back then, a lot of free trade skepticism.
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And the editors there were really interested in um the US-China Security and Economic Review Commission, which was this kind of like joint project of like labor protectionists and China National Security Hawks.
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And and like my take at that time, as somebody who's like more just favorable to the economics of free trade, was that this alliance with the China Hawks, you know, opportunistic alliance with the China Hawks was dangerous.
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On basically the grounds that you were outlining, right?
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That it's like if you say in advance, like, well, we want to get ready, you know, to fight a war with you, then the people on the other side hear that message and they're like, well, we'd better get ready to fight a war with you in downward spiral.
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Um, this is Graham Allison's book.
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Uh, he titled it the Thucydides Trap, which I find a very confusing uh title.
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Um, it's I guess a reference to the uh Thucydides' account of the origins of the Peloponnesian War.
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Um I think maybe more straightforwardly, uh, World War I, you know, the German Empire starts to say, well, we need to build a navy uh because we need to compete with Britain.
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And then Britain starts saying, Why are they building this navy to compete with us?
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Um and so then Britain uh like settles its colonial beefs with Russia so that they can get ready to fight a war with Germany, and then the Germans freak out.
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Um so, you know, like that's bad.
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I I you know, if circa 2005, I was like, let's not do this.
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Um but I would say that events, you know, between 2005 and 2020 just made me think, you know, like it's it's I don't want to say like it's too late, war is inevitable, but like we avoided the opportunity to have a cooperative relationship with China.
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Um I mean, like what do you like how why do you think it's past point of no return?
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So I mean, I think a a bunch of things happened sort of along the way, but uh but a really noteworthy one is the way the Chinese government crushed the protest movement in Hong Kong and totally eviscerated um the semblance of a one country's two systems uh resolution there, which meant that they were giving up on a peaceful resolution to the Taiwan issue, you know, because if you thought like the original China-Hong Kong agreement, you'd be like, why would this be credible, right?
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Like what is stopping China from crushing it?
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I think Taiwan would be the obvious sort of example, right?
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Then we've also seen that when I go even further back to like free trade discourse, when I was in college in like 2002, you know, I took a class, Globalization is discontents, and um, we had uh as a guest professor, uh Thomas Friedman, uh the New York Times columnist.
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And he was really big at that time on the idea that integration into the global economy would lead to liberalization of the Chinese political system.
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And I think under Hu, uh Hu Jintao, that seemed credible to people in a lot of different ways, but under Xi Jinping, it's gone in the opposite direction, right?
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It's become more of a personalistic dictatorship.
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It's become clear that the internet and modern information technology, rather than having this kind of like liberatory uh sense that at the turn of the millennium we thought are really just an incredibly powerful tool of surveillance, um, the sort of repression and quasi-genocidal activity in Xinjiang, you know, again, are just showing us like this is a regime that has a really fundamental value conflict with the United States of America that I think makes, you know, real long-term cooperation extremely unlikely.
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Then the United States, on our own, has done a certain amount of um unhinged activity in the military sphere.
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Okay, but I wanna just draw it down here.
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I want to be clear that I think any thinking person would like observe the behavior of the Chinese government and go, well, like, this is like quite concerning for, you know, global peace and like prosperity and liberalism and freedom and democracy.
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Um but then the question is like, okay, like what do you do about that?
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Because I mean, obviously China is more powerful than a lot of other states, but there are lots of states that like are like this and that are uh uh you know threats to global hajip like prosperity and peace or whatever.
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I mean, the UAE is currently fomenting um uh, you know, genocidal uh behavior in Sudan.
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So it's just like lots of lots of places are doing really bad stuff all the time, and like that's really bad.
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And there's this question of like what we do about it.
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And the real problem here is that I feel like this, which is like a distinct conversation, which I'm like very open to a variety of policy responses to, gets conflated with this other thing, which is domestically, Joe Biden, Donald Trump, a bunch of other people like wish for like a Detroit renaissance.
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And like they try to like marry these two things together because the only thing that gets through Congress in a bipartisan way is like national security type stuff.
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So everyone kind of tries to like put all of their shit into like anti-China like language.
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And, you know, I'm not gonna begrudge you the politics of doing that, but I'm just saying like it creates like a really confused like policy decision because again, Chinese EVs, which is the original thing I want to have access to, are not act we don't have to block those to get all the benefits we're talking about.
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Like when we're talking about building up a domestic battery uh, you know, industry.
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There are a few blockers to this.
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Like one or the critical minerals.
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Trump administration is doing some stuff on this, but like that has like almost nothing to do with with China.
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Like we could if we wanted to.
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Like there are tons.
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I know they're called rare earth, but they're not actually rare.
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Like, we could just choose to do that in the United States.
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There are a lot of environmental blockers to doing that.
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We could choose to do that in other friendly countries, we could just expand our capacity.
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Like, again, there's some stuff happening now under the Trump administration on this, but that's a huge blocker.
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The second is around the 45X, which was the Biden administration IRA.
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It was part of the Inflation Reduction Act.
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Um, disclosure here, my husband does work at a battery company that does receive 45x funds.
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So disclosing that.
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Uh uh, but he, you know, the these, this was a production tax credit that was actually exactly what you would want to see, instead of just saying, you know, you get money for announcing big deals, you got money for like actually producing energy.
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And so, like, and that's the kind of like export discipline subsidization that you would want to see creating that benefit.
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And again, like lots of that's still around, but like that, we should just do more of that if we want more batteries.
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Like, I'm like confused why we would need to block me from getting an EV.
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I could even imagine like saying, like, you know, maybe there's part of the EV that you don't allow to be built in China or whatever.
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But like right now, like there is a battery that BYD has created that charges to 90% in five minutes.
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And like the biggest bear, I mean, like, just like as a person, like I it's like I am not buying something that will provide me tons of value for some like convoluted reason that it's going to produce benefits to Detroit when, like, under the tariff regime, this has not worked.
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We have not seen an increase in manufacturing jobs, even under this 130% tariff regime.
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You also haven't seen these companies be willing to commit to this long-term um capital-intensive uh uh strategy.
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Like, if you wanted Ford or GM to be like BYD, that like requires them committing to like a 30-year capital intention.
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I mean, so I I agree with you that we should distinguish this question from the Democratic Party's particular nostalgia about UAW organized factories.
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No, no, no, no, because because I mean there there is a a difference, right, which is that the American automobile manufacturing industry is now bifurcated, right, between this 4GM Stellantis, Michigan-based complex, in which um the UAW represents the workers at the uh the OEMs and many of the workers in the supply chain.
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And then you have this whole other automobile manufacturing industry, which is in the South, which is non-union, which is mostly factories building quote unquote German or Japanese or now Korean cars.
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And some of them are EVs, right?
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So, like in the United States, we people buy EVs, they mostly buy Teslas uh made in the Sunbelt, or they buy Hyundai Kia cars also made in the Sunbelt.
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And I don't think that there is a future for American automobile manufacturing that is just propping up the old big three factories.
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I it would be political.
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I mean, it seems what we're doing.
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Well, no, not really, because I mean, again, we are propping up all American automobile manufacturers.
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Right.
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And in particular, the the thing that the Chinese EVs would compete most with actually isn't the Detroit vehicles, right?
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Because the the stock and trade of Ford and GM in particular is pickup trucks, right?
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BYD does not make a product that competes head to head with a Ford F-150 or Chevy Silverado.
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It might if the I mean, yes, I mean, I mean, they they could someday, but I mean they don't in practice, right?
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They do make products that compete very directly with a Tesla Model 3, with a Hyundai Ionic, you know, et cetera, et cetera, et cetera.
00:20:54.079 --> 00:21:10.640
So in a proximate, like direct, real talk sense, like what we are most clearly protecting is non-union right-to-work electric vehicle sedan manufacturing, mostly in the American South.
00:21:11.119 --> 00:21:19.039
And I think that that is part of the effort to foster a battery supply chain in the United States, right?
00:21:19.119 --> 00:21:21.599
Is because like the subsidies, the stuff that you're talking about, right?
00:21:21.680 --> 00:21:22.480
Like that's good.
00:21:22.640 --> 00:21:27.599
The Trump administration's at first was like, oh no, we hate batteries because it's green.
00:21:27.839 --> 00:21:33.359
And then when they were doing their trade war with China, they realized that China could cut us off from rare earths.
00:21:33.519 --> 00:21:39.519
They realized that you need those rare earth magnets to make all kinds of stuff, including things Republicans like.
00:21:39.680 --> 00:21:39.759
Yep.
00:21:39.920 --> 00:21:41.440
And so now they're they're trying to address it.
00:21:41.519 --> 00:21:45.200
So we we need to address the regulatory stuff on mineral refining.
00:21:45.359 --> 00:21:59.599
We need to get like Trump's head out of his ass and distinguish between like trade with friendly countries and trade with hostile countries, because I think a lot of this like dirty refining we probably don't actually want to do in the United States, but it's like let like let.
00:22:00.160 --> 00:22:03.119
Peru do it, you know, let let somebody else do it for money.
00:22:04.079 --> 00:22:06.960
But we also want to have end products, right?
00:22:07.119 --> 00:22:11.359
And like an automobile is the ultimate end product for a battery right now.
00:22:11.519 --> 00:22:14.079
It's the biggest, most important battery market.
00:22:14.319 --> 00:22:19.599
So trying to have EVs assembled in the United States, I think is like a good and reasonable part.
00:22:20.000 --> 00:22:21.839
But like why can't we just subsidize it?
00:22:22.079 --> 00:22:22.480
I don't get it.
00:22:22.559 --> 00:22:23.680
Why can't we just subsidize it?
00:22:23.839 --> 00:22:25.359
Like, why do we need to do tariffs?
00:22:25.680 --> 00:22:28.160
Like, I just really I mean, like, you can do it with subsidies.
00:22:28.640 --> 00:22:32.720
No, but I'm saying, like, I actually I think that there's actually a really important distinction.
00:22:32.799 --> 00:22:43.440
Like, I think tariffs reduce a ton of the incentive for companies to try to do the hard work of like it it's really, really difficult to do what like BYD did.
00:22:43.519 --> 00:22:47.519
And BYD in the 90s is like originally a battery company before they get into cars.
00:22:47.839 --> 00:22:51.839
Like it's decades of like understanding like how this market works.
00:22:52.000 --> 00:22:56.799
The vertical integration that BYD has is like the biggest reason why it has like lower costs.
00:22:56.880 --> 00:23:01.920
Like people often think it's about the Chinese subsidies, but it's actually because of their uh the corporate structure.
00:23:02.160 --> 00:23:07.440
There's a great Rhodium report about why Chinese EVs are so cheap, and they like like try to really decompose what's going on here.
00:23:07.599 --> 00:23:13.680
And they find that you know BYD manufactures around 80% of its tier one components and 36% of tier two.
00:23:14.079 --> 00:23:17.839
That's more than twice Tesla's in-house share of Tier 1 components, only 37%.
00:23:18.240 --> 00:23:22.160
And Tesla is like of the American car manufacturers, is like the vertically integrated one.
00:23:22.400 --> 00:23:26.720
Well, and BYD is really a battery company that learned how to make cars.
00:23:27.359 --> 00:23:36.400
And and what we mostly have in the West is car companies who first were like, well, we could have an electric motor, which is easy, but then we need a giant battery.
00:23:36.480 --> 00:23:36.640
Trevor Burrus, Jr.
00:23:36.720 --> 00:23:42.640
But like Chinese state subsidies account for just 5% of BYD's per vehicle cost advantage over Tesla.
00:23:42.880 --> 00:23:46.160
Like Tesla also produces cars in China.
00:23:46.319 --> 00:23:51.519
Like it gets some, like it gets some of the state subsidies when it does that, not all of them, way fewer than BYD, et cetera, get.
00:23:51.599 --> 00:23:54.079
But like it also means it can use that labor market.
00:23:54.160 --> 00:23:56.160
It all like tons of things are equalized.
00:23:56.240 --> 00:24:05.680
It still isn't able to get close to that cost parity because there's like a lot of like difficult things that go into like making a very successful business that are difficult to just learn um without like tons of time.
00:24:06.079 --> 00:24:07.279
So we can't just go make cars.
00:24:07.519 --> 00:24:23.519
I'm saying like I'm saying it's very, very difficult and like it's possible to do, but I'm saying like in order to get someone to make that attempt, in order to get companies, whether it's the big three, whether it's new companies, like you want to foster like new Teslas, et cetera, like that's like 30 years in the future that's gonna happen.
00:24:23.680 --> 00:24:30.720
But my point here is like tariffs themselves, like, A, clearly are not producing that reality, but also, I mean, they're not.
00:24:30.799 --> 00:24:31.279
They're not producing.
00:24:31.440 --> 00:24:39.680
I mean, like when you're looking at um yeah, Ford and SK On uh announced an$11.4 billion joint venture in 2021 with a$9.6 billion DOE loan.
00:24:39.839 --> 00:24:45.279
In December 25, 2025, they dissolved that because EV demand fell short to pr uh projections.
00:24:45.440 --> 00:24:49.599
Ford took an$8.5 billion write down on its Model E segment that same month.
00:24:50.079 --> 00:24:57.119
Okay, like these companies are not like willing, even under this tariff regime, to like bear the difficult losses, which is like reason.
00:24:57.279 --> 00:24:58.000
I'm like not getting it.
00:24:58.160 --> 00:24:59.039
Yeah, listen, listen, listen.
00:24:59.119 --> 00:24:59.839
I I mean I agree.
00:25:00.000 --> 00:25:10.640
Look, if I could puppet master all of American like transportation, trade, economic policy, et cetera, yeah, I would land on something different than the mix that we have, right?
00:25:11.119 --> 00:25:12.799
But can I have my Chinese EV?
00:25:13.119 --> 00:25:13.680
Well, that's it.
00:25:13.839 --> 00:25:14.640
But this is what I'm saying.
00:25:14.720 --> 00:25:22.640
But you know, so like, I mean, the most simplistic thing in the world, right, is like the gasoline tax should be significantly higher.
00:25:22.720 --> 00:25:24.960
Yeah and it should be indexed to inflation.
00:25:25.119 --> 00:25:35.119
And in a world where the gasoline tax is higher and indexed to inflation, the overall popularity of these very heavy cars is just like structurally lower.
00:25:35.279 --> 00:25:46.079
And the whole thing where the main profit center of the American auto industry became, you know, trucks that are sold to hobbyists rather than real work trucks just wouldn't have arisen.
00:25:46.240 --> 00:25:46.480
Yeah.
00:25:46.720 --> 00:25:50.640
Those are the kinds of vehicles that are the most challenging to electrify.
00:25:50.799 --> 00:25:55.279
Like this is a reason why BYD doesn't have a directly competing product, right?
00:25:55.440 --> 00:25:59.839
Um, and their large SUVs are mostly plug-in hybrids, you know, so it's uh it's all complicated.
00:26:00.000 --> 00:26:05.119
In a world like that, you have more incentive to adopt electric vehicles without mandates, things like that.
00:26:05.200 --> 00:26:06.559
So that's all very constructive.
00:26:06.720 --> 00:26:08.480
We could do subsidy type stuff.
00:26:08.640 --> 00:26:20.559
We're right now we are caught in a uh a vice where, you know, Republicans don't want to promote vehicle electrification at all.
00:26:20.960 --> 00:26:21.279
Right.
00:26:21.519 --> 00:26:29.359
They like hear that for national security reasons, like batteries and electric motors are important, but they have like a culture war opposition to it.
00:26:29.599 --> 00:26:31.440
Um electrons that are.
00:26:31.759 --> 00:26:45.200
The most important electric vehicle entrepreneur in the United States of America is a politically influential Republican, but he has chosen not to wield any of his influence on impacting Republicans' thinking about electric vehicles.
00:26:45.440 --> 00:27:00.640
He has also chosen to like closely identify himself with right-wing culture war politics in a way that has hurt the sales of his own company and are making the whole EV market like look really, really bad.
00:27:01.359 --> 00:27:12.319
Then, because of America's uh interesting system of labor law, we have this like particular thing where like the shrinking companies are unionized, but the growing ones aren't.
00:27:12.559 --> 00:27:19.839
So Democrats who like electric vehicles and don't like Elon Musk have very mixed feelings about championing these like Korean trains.
00:27:20.000 --> 00:27:21.839
So like it's all fucked up, right?
00:27:22.400 --> 00:27:38.720
But I do think that to the extent that we have this kind of political coalescence around the tariffs, that is eliminating the tariffs does not get us to a consensus on a better kind of policy regime.
00:27:38.960 --> 00:27:51.039
It just knocks out the transplants, it knocks out Tesla, and it will continue to lead the sort of traditional Detroit manufacturers to like triple down on giant trucks.
00:27:51.279 --> 00:27:55.680
So but what about the consumer surplus of me getting a BYD card?
00:27:56.319 --> 00:27:56.640
I don't know.
00:27:56.720 --> 00:28:10.000
You know, so so here's why I should say I'm but I mean, like, but like seriously here, like I used to think this is like one of those things I assume you as well, but like I have the sense that like unless proven useful, the default should be to allow for trade to exist.
00:28:10.240 --> 00:28:27.599
I mean, I And I know that like you're broadly in favor of that, but I mean, again, like in this like disequilibrium we found ourselves in through like decades of bad policy and also like political, you know, compromises that had to be made because there are people that just want and companies that want to maintain the current existing structure of the American car market.
00:28:27.839 --> 00:28:38.720
Taking off tariffs on these specific vehicles has, I think, quite little impact on anything except for prices, for consumers.
00:28:38.880 --> 00:28:43.039
I mean, and again, I want to be clear like prices for consumers are like really, really bad now.
00:28:43.119 --> 00:28:49.519
I know this is like a we're an affordability moment or whatever, but like and housing is the thing that, you know, Matt and I talk about the most.
00:28:49.599 --> 00:28:52.880
But like transportation is like the second biggest cost to like most households.
00:28:52.960 --> 00:28:58.799
And it's like I know, but can I confess, I'm just like I'm kind of like enough, I'm here with my we should raise the gas tax.
00:28:58.960 --> 00:29:02.400
I'm just like kind of enough of an urbanist that I don't I don't really think.
00:29:02.559 --> 00:29:03.359
Well, my point is you can do that.
00:29:03.920 --> 00:29:06.400
I don't really sympathize with people's desire for cheap cars.
00:29:06.559 --> 00:29:09.839
Like, I sympathize with people's desires for cheap transportation.
00:29:10.000 --> 00:29:12.720
Uh I think that like it's very difficult to bus.
00:29:13.200 --> 00:29:14.640
Not everyone can ride the bus, Matthew.
00:29:14.880 --> 00:29:16.720
The bus system don't go doesn't go everywhere.
00:29:17.039 --> 00:29:18.319
I do have a mini bike, thank you.
00:29:18.480 --> 00:29:32.640
Um but I just think it it's it's there's something about and again, like clearly what's like I I also am an urbanist here, but I think that the solution to that problem has less to do with whether or not this tariff regime exists.
00:29:33.119 --> 00:29:34.160
Here's the other thing.
00:29:34.480 --> 00:29:52.480
I think that the Reagan experience in the 80s of curtailing Japanese automobile imports was not successful ultimately in like defending the big three or preventing this kind of like long, slow decline of the American automobile industry.
00:29:52.640 --> 00:30:08.480
But it was ultimately very successful in at getting Japanese automobile manufacturers to open factories in the United States, which is an important reason that like the American industrial base uh has been resilient to an extent, right?
00:30:08.559 --> 00:30:10.799
That's been a growing part of manufacturing.
00:30:10.960 --> 00:30:14.319
So to me, you know, part of the But like EV market share is falling now.
00:30:14.559 --> 00:30:21.839
The US EV share peaked at 10.6% in Q3 of last year, then collapsed five to 5.8% before.
00:30:22.240 --> 00:30:24.559
It's gonna go back up thanks to Trump's Green New Deal, though.
00:30:24.720 --> 00:30:27.839
I mean, it's you know, I I and by that do you mean the Iran war?
00:30:28.079 --> 00:30:28.240
Yes.
00:30:29.039 --> 00:30:31.359
No, I mean I do think I mean you do see this, right?
00:30:31.440 --> 00:30:33.920
I mean, EV shopping has gone up a lot this quarter.
00:30:34.559 --> 00:30:50.559
Why is it that this is like a classic you know, I'm always a skeptical about empirical social science, but we have really good data on this that like people make long-term investments in fuel efficiency of their cars based on like what is the price of gasoline today.
00:30:50.720 --> 00:30:51.920
And that's very stupid.
00:30:52.000 --> 00:30:56.160
And like I urge you to think harder about this uh the next time you're buying a car.
00:30:56.319 --> 00:30:57.359
But that is what people do.
00:30:57.519 --> 00:31:02.319
And I do think, I mean, I was saying gas tax, you know, many, many things, like that would be good.
00:31:02.559 --> 00:31:05.759
Expensive, I well, I'm not running for office.
00:31:05.920 --> 00:31:10.880
Expensive gasoline is good for the world, um, but bad for the poor.
00:31:11.039 --> 00:31:19.119
Uh, so if we could get Chinese companies to say, hey, Mr.
00:31:19.279 --> 00:31:24.880
Trump, you know, what if we open a factory in Tennessee?
00:31:25.279 --> 00:31:28.720
Like, I think we should try to get to yes on an agreement like that.
00:31:28.960 --> 00:31:34.640
And I was gonna say, I as a as a hypocrite, um, I drive not an electric vehicle, but a plug-in hybrid.
00:31:34.880 --> 00:31:38.720
Um and in China they call these new energy vehicles.
00:31:38.960 --> 00:31:42.640
They they lump together the plug-in hybrids and the battery electrics.
00:31:42.799 --> 00:31:47.759
Um and I drive not a Chinese plug-in hybrid, but a Volvo, which is Swedish.
00:31:48.000 --> 00:31:51.119
Um, but uh that's actually a Chinese company.
00:31:51.200 --> 00:31:53.759
Um they they bought Volvo some time ago.
00:31:53.839 --> 00:31:56.000
Um, the XE60 recharge.
00:31:56.319 --> 00:31:59.359
My XE60 recharge was manufactured in Sweden.
00:31:59.599 --> 00:32:12.319
The XE60 recharges that are for sale in the United States come on boats from Sweden, but they also have a factory in China, uh, I think two uh or more that makes the ones that are sold um all throughout Asia, which is a larger market.
00:32:12.559 --> 00:32:16.079
Volvo makes certain cars in South Carolina.
00:32:16.240 --> 00:32:25.200
You know, so if if we can get like these quote unquote Swedish uh cars assembled in the United States, like that's a good win.
00:32:25.359 --> 00:32:33.680
Um Geely, which is the company that owns Volvo, is a lesser Chinese car manufacturer uh than your friends at at BYD.
00:32:33.920 --> 00:32:42.400
But you know, if if they want to like come with an offer like that, I think that would be good because the know-how, the assembly, that kind of thing is valuable.
00:32:42.640 --> 00:32:44.640
But getting back to our like War and Peace stuff.
00:32:44.720 --> 00:32:48.799
Trevor Burrus, Jr.: But the assembly stuff, like I actually like, is that the really thing that's important here?
00:32:48.960 --> 00:32:53.519
Like, I think the battery production and manufacturing, like, that's important.
00:32:53.680 --> 00:32:57.440
But assembling cars at the at the end of the day, who cares?
00:32:57.680 --> 00:32:59.119
It's it's all part of a thing, right?
00:32:59.279 --> 00:33:03.839
I mean, it's but is it like is like it what is I think this is the thing, like everything gets conflated in this very weird way.
00:33:03.920 --> 00:33:11.519
Like, is like end-of-the-line manuf uh assembly of like an already manufactured car helping our national security?
00:33:11.599 --> 00:33:12.160
In what way?
00:33:12.319 --> 00:33:13.279
Like, people just like say this.
00:33:13.440 --> 00:33:14.319
I'm just like, What do you mean?
00:33:14.400 --> 00:33:14.880
No, no, no.
00:33:14.960 --> 00:33:20.079
So I I mean, so there's the specifics of like developing a battery industry and like what's the hard part, what's the easy part?
00:33:20.240 --> 00:33:21.440
But there's also the reality, right?
00:33:21.519 --> 00:33:27.759
That like in wartime, like car factories get converted to manufacturing military equipment, right?
00:33:27.839 --> 00:33:29.759
Like the cap- How could battery factories.
00:33:30.160 --> 00:33:30.799
Yes, yes, yes, yes.
00:33:30.960 --> 00:33:32.240
But it but it means all kinds of things, right?
00:33:32.319 --> 00:33:36.319
Like the ability to have a manufacturing base is relevant.
00:33:36.799 --> 00:33:44.720
Then the question is like, what should we like we both agree that it's like not maximally economically efficient to do any of the stuff that we're talking about?
00:33:44.799 --> 00:33:50.480
Subsidies, tier, we are taking that cost because there are other things that matter than like maximal economic efficiency.
00:33:50.720 --> 00:33:54.000
And then it's like, okay, but like economic efficiency does matter.
00:33:54.079 --> 00:34:06.079
So like what is the thing that we could do here that would generally not uh you know, undermine like price signals in the market, reduce the competition for you know new companies to come in, like whatever it is.
00:34:06.319 --> 00:34:10.880
And that's like to me, like clearly like let's be like narrowly targeted here about what we're actually trying to do.
00:34:11.119 --> 00:34:12.079
Like this, you're trying to do it.
00:34:13.199 --> 00:34:18.400
Like, well, maybe when there's a hot war, we'll like need I'm like, I don't know, maybe AI will fight all our wars and like No, no, no.
00:34:18.480 --> 00:34:23.280
I I mean I I do think this is why going back to the the international relations point is important.
00:34:23.519 --> 00:34:26.320
Like I think beyond the cars, right?
00:34:26.400 --> 00:34:35.119
That like we should be trying to lower trade barriers, dramatically lower trade barriers with Europe, with Japan, with South Korea, with Latin America.
00:34:35.280 --> 00:34:38.639
I mean, with a mix of like, there's like true allies, right?
00:34:38.800 --> 00:34:49.199
And then there's like there's a lot of countries out there that are kind of mixed bag in terms of human rights and and geopolitical alignment, um, but they're not hostile to the United States in geopolitical sense.
00:34:49.280 --> 00:34:50.800
And they're also not that large, right?
00:34:50.880 --> 00:34:55.920
Like you, you raised the UAE, which is, you know, that's an important country because of their oil wealth.
00:34:56.000 --> 00:34:56.159
Yeah.
00:34:56.400 --> 00:35:02.159
But there's no universe in which the UAE becomes like the dominant global power.
00:35:02.320 --> 00:35:03.760
And like they know that, right?
00:35:03.840 --> 00:35:07.679
Like they're just they're trying to sell oil to people and and make money, right?
00:35:07.760 --> 00:35:13.360
And I don't know why they're screwing around in Sudan the way they are, but like they're they're not gonna conquer the world.
00:35:13.599 --> 00:35:15.039
And so we want that.
00:35:15.199 --> 00:35:42.320
And I think that we should be trying to not like reshore a hundred percent of the manufacturing that has drifted to China, but to decouple substantially so that we are both manufacturing more stuff in the United States and importing manufactured goods from, you know, from Mexico, from Colombia, from Venezuela, from Jamaica, uh, from Spain rather than from China.
00:35:42.400 --> 00:35:53.199
And we should be trying to get a world in which friendly Asian countries, you know, Japan, India, Korea, et cetera, are like in a US-centric trading system rather than a China-centric trading system.
00:35:53.360 --> 00:35:58.960
It's through a little bit of happenstance that CARS has become like the hard, hard nub of this.
00:35:59.119 --> 00:36:06.480
But I think we want to like build on that nub that like Apple shifting more and more of its assembly to India, like that's very good.
00:36:06.639 --> 00:36:26.559
That like new um So like I totally agree that the number one thing that I wish people, mo more people who cared about this, people who are more concerned about China and are like certain about it, um, would do is they would care a lot more about French oring and like instead of using this issue as an attempt to return us to the economy of the 1950s, like I I agree with this.
00:36:26.639 --> 00:36:27.280
I think it'd be great.
00:36:27.360 --> 00:36:34.000
I don't think it's great that like 90% of the world's, you know, whatever, you know, rare earths that go into lithium-ion batteries are coming from China.
00:36:34.159 --> 00:36:41.199
It's clearly not good that any like supply chain would be so unbelievably uh, you know, uh uh undiversified.
00:36:41.360 --> 00:36:44.880
But like I think, and again, like maybe we're actually just saying the same thing.
00:36:44.960 --> 00:36:49.039
Like, yeah, like if it was but if it was like 30% coming from China, like I don't really care that much.
00:36:49.360 --> 00:36:49.519
Sure.
00:36:50.800 --> 00:36:53.920
But I actually think that like that's substantially different than what we're doing trying to do right now.
00:36:54.000 --> 00:36:56.880
We're trying to like eliminate China as a trading partner.
00:36:57.119 --> 00:37:00.000
And like that seems like I mean, I don't know that we are trying to do that.
00:37:00.159 --> 00:37:06.800
I mean, uh, you know, uh sadly the Trump administration is not super coherent in its uh policy approach, right?
00:37:06.880 --> 00:37:11.679
I mean, like they have relaxed export controls on NVIDIA chips and stuff like that.
00:37:11.840 --> 00:37:17.840
Like, I I I don't think that Trump has a um principled approach to geopolitics.
00:37:18.079 --> 00:37:22.079
I think that Biden may have a principled approach to deal-making with China on this, though, actually.
00:37:22.480 --> 00:37:22.880
Sort of.
00:37:22.960 --> 00:37:27.360
But I mean, uh you know, Trump is very interested in the stock market.
00:37:27.760 --> 00:37:28.400
You know what I mean?
00:37:28.639 --> 00:37:38.960
And so, you know, he has exempted from tariffs stuff that is needed to build data centers because that's been a big element of GDP.
00:37:39.280 --> 00:37:46.639
He has allowed Nvidia to export a lot of chips because that's good for one of the biggest SP 500 components.
00:37:46.800 --> 00:37:49.199
It's a little incoherent, right?
00:37:49.360 --> 00:38:04.320
H his approach to that leading edge technology with his approach to the auto industry, where those companies are now small enough that like it's not as big a deal for the stock market, but it still plays a big role in the kind of like American mythos, et cetera.
00:38:04.480 --> 00:38:20.480
The Biden administration, I thought, had a more coherent view of what its China policy was, but then its manufacturing policy was much more invested in like narrow labor union politics, you know, like which was also bad.
00:38:20.639 --> 00:38:32.719
Um, you know, a big challenge for American geopolitical competition with China is that you said like national security stuff is the only thing that can like get through Congress on a bipartisan basis.
00:38:32.880 --> 00:38:40.400
But there's like on a practical level very little like buy-in for the idea that there's geopolitical competition with China.
00:38:40.639 --> 00:38:42.159
Like nobody What do you mean?
00:38:42.400 --> 00:38:52.800
Like, nobody wants to say, you know, I am doing X and it is going to be moderately economically costly.
00:38:53.199 --> 00:38:56.639
But the reason that I'm doing it is geopolitical competition.
00:38:57.039 --> 00:38:58.480
Well, that's because it's a very bad message.
00:38:58.559 --> 00:38:59.840
You can't put that on a press release.
00:39:00.079 --> 00:39:00.320
Right.
00:39:00.400 --> 00:39:04.239
But I mean, you know, I think at the at the height of the Cold War, right?
00:39:04.400 --> 00:39:17.039
If the USSR, right, if Brezhnev had come and been like, I want to buy all of your most advanced microchips, and the Nixon administrators were like, no, people wouldn't have been like, what's going on?
00:39:17.440 --> 00:39:17.920
You know what I mean?
00:39:18.000 --> 00:39:20.000
Like like pe people believed in the Cold War.
00:39:20.079 --> 00:39:20.239
Trevor Burrus, Jr.
00:39:20.320 --> 00:39:25.440
But I mean, I think right now the debate over chips is very much like having a similar flavor.
00:39:25.599 --> 00:39:31.199
The problem is that like Trump seems not to be that concerned about the potential for China to Sure.
00:39:31.280 --> 00:39:32.800
But but that's part of what I mean, though.
00:39:32.880 --> 00:39:37.840
There isn't real, like for all that, like there are lots of people in Congress who are worried about it, less people in DC.
00:39:37.920 --> 00:39:38.320
I mean, I don't know.
00:39:38.639 --> 00:39:38.719
Right.
00:39:38.880 --> 00:39:40.000
I mean, it's just it's thin.
00:39:40.159 --> 00:39:41.599
You know, it's like the it's of course.
00:39:41.679 --> 00:39:43.599
Yeah, we haven't been in a political thing.
00:39:43.920 --> 00:39:49.199
We haven't been in like a like a hot war where like lots of Americans were fighting in a long time.
00:39:49.360 --> 00:39:56.400
I think it's made people way more complacent about the potential threat of of war on people's lives.
00:39:56.480 --> 00:40:05.280
I mean, I I just think that like even what's going on in Iran right now, like it's obviously super unpopular, but like most Americans are not like actually exposed to this.
00:40:05.360 --> 00:40:10.559
Like, there aren't most people do not have family members that are fighting in Iran and like are at risk of dying.
00:40:10.639 --> 00:40:14.639
Like, we're just like bombing this other country um or in allowing Israel to bomb them.
00:40:14.800 --> 00:40:18.079
And uh and again, like that I just think like it's been a while.
00:40:18.159 --> 00:40:23.360
Like, even Iraq, like it was a very much smaller proportion of people fighting than earlier conflict.
00:40:23.679 --> 00:40:41.360
But I mean yes, Iraq was was relatively disconnected, but the idea, but if you go back in time circa 2002, 2003, 2004, the idea that the United States was in some sense involved in like a war on terror was quite widespread.
00:40:41.519 --> 00:40:43.760
Yes, like it had mass penetration.
00:40:44.159 --> 00:40:44.719
Yeah right.
00:40:44.880 --> 00:40:49.679
And so if somebody said, like, why are these kids dying in Iraq, Mr.
00:40:49.760 --> 00:40:53.840
President, like he said that was to advance our goals in the war on terror.
00:40:53.920 --> 00:40:58.719
And then his opponents said, like, no, it it's not.
00:40:58.800 --> 00:41:01.199
Like, that's not a good way to pursue that goal.
00:41:01.360 --> 00:41:08.239
But the idea that like some kind of sacrifice in pursuit of like fighting al-Qaeda or something was very mainstream.
00:41:08.559 --> 00:41:17.360
I think the whole idea of geopolitical competition with China is like a very elite project that nobody wants to articulate to a mass public, and that that therefore makes it.
00:41:17.760 --> 00:41:20.400
Do you think that's different than the way that Japan was talked about in like the 80s?
00:41:20.800 --> 00:41:27.679
Well, the Japan thing was different because you know because I feel like I mean you look back, I mean, I don't I wasn't alive at the time, but like you look back at these.
00:41:28.079 --> 00:41:28.400
Were you?
00:41:28.559 --> 00:41:29.280
Yeah, I guess you were.
00:41:29.519 --> 00:41:30.639
I was alive in the 80s.
00:41:30.800 --> 00:41:31.199
Jesus.
00:41:31.920 --> 00:41:37.199
Um, I guess when you like look at the the coverage at the time, it seems very like you know, yellow peril.
00:41:37.360 --> 00:41:39.840
Like Molt Walter Mondale, what does he say?
00:41:39.920 --> 00:41:46.800
He said something on uh, you know, pre-campaign about how like, you know, do we want our kids like mopping the floors of factories around Japanese computers?
00:41:46.880 --> 00:41:49.280
Like that just like kind of sounds like how people talk now.
00:41:49.599 --> 00:41:54.079
Yeah, but so the difference is I I think it was almost the opposite, right?
00:41:54.159 --> 00:42:18.000
Like before the Japanese stock market crash, there was an incredible amount of like authentic grassroots anxiety about rising Japanese like clout in the world, about things like Japanese companies had all these sort of like surplus for for essentially for currency manipulation reasons, they kept recycling dollar profits into purchasing American investments, right?
00:42:18.079 --> 00:42:21.920
So, like Sony bought American movie studio.
00:42:22.079 --> 00:42:26.960
Um I mean, now it's just one of the big five American movie studios, but in the 80s that was a big deal.
00:42:27.039 --> 00:42:32.239
They bought Rockefeller Center in New York, and so there's all this, oh my god, like Japan is buying everything up.
00:42:32.320 --> 00:42:38.159
Uh the Michael Crichton book, Rising Sun, um, and and the associated movie great text of this era.
00:42:38.639 --> 00:42:46.000
But on an elite level at that time, people were saying Japan's a treaty ally of the United States.
00:42:46.239 --> 00:42:48.239
Japan's a democracy.
00:42:48.400 --> 00:42:51.760
Like, we don't actually have well, I mean, some people were saying that.
00:42:51.840 --> 00:42:52.000
Yeah.
00:42:52.320 --> 00:42:55.119
Yeah, but but I mean, I it was it was an elite focused.
00:42:55.760 --> 00:42:56.719
I don't know if I buy this.
00:42:56.800 --> 00:43:01.360
I mean, even like people who are concerned about currency manipulation and who bought Rockefeller Center aren't elites.
00:43:01.599 --> 00:43:04.559
Yeah, like r random, it's what I mean.
00:43:04.719 --> 00:43:06.719
They didn't understand the currency manipulation.
00:43:06.880 --> 00:43:12.559
They just saw hard American assets coming into the ownership of Japanese companies and were like freaking out.
00:43:12.719 --> 00:43:13.679
The Japanese are taking over.
00:43:13.840 --> 00:43:14.639
People are also way more racist.
00:43:15.039 --> 00:43:16.719
I think you're too New York City pilled.
00:43:16.800 --> 00:43:17.119
Like, are you?
00:43:18.880 --> 00:43:20.639
But also people were more racist then.
00:43:21.039 --> 00:43:21.360
That's true.
00:43:21.840 --> 00:43:23.199
You know, overtly.
00:43:23.599 --> 00:43:24.400
I think actually.
00:43:24.559 --> 00:43:29.039
Um but it was a populist criticism that like the elites.
00:43:29.360 --> 00:43:30.880
But so isn't the China one too?
00:43:31.039 --> 00:43:33.920
Like, I mean, right now, like so much of the quote-unquote like authentic energy.
00:43:34.000 --> 00:43:49.360
I mean, like again, like obviously the term elite here is like getting a little confusing, but when you think about people who are pushing for uh, you know, revival of manufacturing, people who are, you know, situating themselves as like members of the heartland, people who keep like citing the same David Augator paper over and over again.
00:43:49.519 --> 00:43:51.199
These are the people who are like considered those populists.
00:43:51.360 --> 00:43:59.760
And like, so there is there is a there is a brain dead populist argument about propping up American manufacturing jobs.
00:44:00.239 --> 00:44:00.320
Right.
00:44:00.480 --> 00:44:05.360
These are the people who would say that the worst thing that could happen would be NAFTA.
00:44:06.719 --> 00:44:11.599
I'm saying there is a different argument, which is about geopolitical competition with China.
00:44:11.840 --> 00:44:12.000
Yeah.
00:44:12.320 --> 00:44:12.480
Right?
00:44:13.039 --> 00:44:15.039
China, just China, right?
00:44:15.199 --> 00:44:19.840
So, like from a China-focused view, if we manufacture things in Mexico, that's good.
00:44:20.800 --> 00:44:22.159
Yes, those people don't exist.
00:44:23.119 --> 00:44:25.440
That is not a mass constituency, right?
00:44:25.519 --> 00:44:29.039
There is no this is why like French shoring struggles to take off.
00:44:29.280 --> 00:44:39.440
If people who were upset about jobs going to China were worried about China, then you would have a mass constituency for friends shoring.
00:44:39.599 --> 00:44:44.239
You'd be saying, look, we can get our cheap consumer goods and also decouple from China by working blah blah blah.
00:44:44.480 --> 00:44:49.360
But instead, friends shoring is like a checkmate debate point that me and you pull out to prove that people don't actually care about China.
00:44:49.440 --> 00:44:50.400
Trevor Burrus Or something like that.
00:44:50.639 --> 00:44:52.880
Or it's like we have good think tank papers about it.
00:44:53.119 --> 00:44:55.119
You know, and people have these kind of discussions.
00:44:55.280 --> 00:45:03.840
But you know, there isn't a and it's also why exports to China are very appealing to Trump.
00:45:04.079 --> 00:45:04.159
Yeah.
00:45:04.400 --> 00:45:04.559
Right?
00:45:04.800 --> 00:45:08.480
Whereas like from a competition framework, like you've got to be careful about that.
00:45:08.719 --> 00:45:10.320
So you know, I I mean I think it's a problem.
00:45:10.400 --> 00:45:10.559
Trevor Burrus, Jr.
00:45:10.719 --> 00:45:12.960
So maybe more people maybe I should like chill out then.
00:45:13.119 --> 00:45:14.960
Uh people aren't that worried about a hot war with China.
00:45:15.039 --> 00:45:21.119
We're not actually I think you we should be like fomenting more panic about this because like it's it's really bad.
00:45:21.760 --> 00:45:22.800
Okay, well we've come full circle.
00:45:22.880 --> 00:45:27.760
I still am not gonna get my BYD, but maybe I will get uh a different electric vehicle.
00:45:27.840 --> 00:45:29.119
I I'm just balking at these prices.
00:45:29.360 --> 00:45:36.960
Adam Ozumek, who is an economist, has been for for years now pointing out that it's insane that people spend like$40,000 on a car.
00:45:37.119 --> 00:45:40.639
And while as like a good But he said that like six years ago when everything was cheaper.
00:45:41.039 --> 00:45:42.000
He's still saying that now.
00:45:42.320 --> 00:45:43.280
He's still saying it now.
00:45:43.360 --> 00:45:50.480
Maybe it's a little bit higher, but still like when you look at like the median cost of a car, it's I think it's above fifty thousand dollars now.
00:45:50.559 --> 00:45:52.480
Our fact checker will let me know if that's correct.
00:45:52.559 --> 00:45:54.880
But like that's like it's actually like crazy.
00:45:55.119 --> 00:45:57.920
Median cost of a new car, fifty thousand dollars.
00:45:58.239 --> 00:45:59.840
I only ever bought one car.
00:45:59.920 --> 00:46:00.880
Um, so I don't know.
00:46:00.960 --> 00:46:01.679
It was very expensive.
00:46:01.920 --> 00:46:03.360
Yeah, and plug-in hybrid, man.
00:46:03.440 --> 00:46:03.920
Well, yeah.
00:46:04.159 --> 00:46:04.800
Not a good idea.
00:46:04.960 --> 00:46:06.320
I would actually just go electric.
00:46:06.400 --> 00:46:07.119
I I made a mistake.
00:46:07.280 --> 00:46:08.400
But I don't own the house.
00:46:08.719 --> 00:46:09.360
That's tough.
00:46:09.679 --> 00:46:12.320
Um, well, this is a great time to transition to peer review, I think.
00:46:12.480 --> 00:46:13.039
All right, let's do it.
00:46:13.280 --> 00:46:18.559
So peer review is our section where uh Matt locks back into his love of social science research.
00:46:18.800 --> 00:46:21.519
He has a paper for us today about smartphones.
00:46:22.079 --> 00:46:22.480
Yes.
00:46:22.719 --> 00:46:30.000
Uh my paper today is The Effects of School Phone Bands: National Evidence from Lockable Pouches by Hunt Alcott, E.
00:46:30.239 --> 00:46:31.679
Jason Barron, Thomas D.
00:46:32.000 --> 00:46:35.280
Angela Duckworth, Matthew Genskow, and Brian Jacob.
00:46:35.440 --> 00:46:41.360
Uh so this is looking at there's been a lot of discussion about smartphones in schools um over the past few years.
00:46:41.519 --> 00:46:47.360
There's been a big trend to uh requiring kids to uh not have phones, lock them down.
00:46:47.519 --> 00:46:53.519
Um so they looked at a um the use of uh pouches, right?
00:46:53.679 --> 00:46:57.440
So they're able to like verify that this pouching is occurring.
00:46:57.599 --> 00:47:06.320
Um, and then they showed that, you know, the pouch rules um substantially reduces phone use as measured by GPS pangs and teacher reports.
00:47:06.480 --> 00:47:13.280
Um they show that disciplinary incidents increase in the short term, I think because teachers have to enforce the rule.
00:47:13.360 --> 00:47:16.960
Um, student well-being goes down because kids like to have their phones.
00:47:17.199 --> 00:47:29.599
Uh, and then they find that, you know, in in later years this levels out, um, that students end up like better off subjectively, that the disciplinary issues go away because kids are just kind of following the rules.
00:47:30.159 --> 00:47:37.920
Unfortunately, I mean, the academic benefits that I think people were hoping to see from this don't really materialize.
00:47:38.079 --> 00:47:50.320
They say that, like, maybe some scores go up and maybe some scores go down, uh, but on average, there is zero effect, um, little evidence of effects on school attendance, on classroom attention, or on perceived online bullying.
00:47:50.559 --> 00:47:56.559
This was widely reported in the press as a disappointing uh result for the phone ban movement.
00:47:56.639 --> 00:48:03.760
Um, and it generated much of the pushback that you normally see when people get unwelcome empirical social science findings.
00:48:03.920 --> 00:48:07.599
Uh the statistical power of this experiment is not that high.
00:48:07.760 --> 00:48:12.159
You know, it's looking at a relatively short time span, blah, blah, blah, blah, blah, blah, blah, blah, blah.
00:48:12.320 --> 00:48:19.039
But basically, um, making the kids be less distracted by phones all day did not um make them better at reading and math.
00:48:19.440 --> 00:48:27.440
So um when I was first reading this paper, uh, I uh saw that the tested intervention were these yonder pouches, as you mentioned.
00:48:27.840 --> 00:48:31.920
Um so there are lots of different ways that like teachers or schools can like ban phones.
00:48:32.000 --> 00:48:35.519
They can ban them just during class time where like you have to put them in your pocket and like you'll get in trouble.
00:48:35.599 --> 00:48:39.519
So the teachers are like constantly policing, like, hey, you put your phone, you know what I mean, like whatever.
00:48:39.679 --> 00:48:50.800
You can also have these like pouches, which are if you've ever I I've been to a comedy show once that forced me to put my phone in one of these pouches, and so you get to like keep the pouch with you, and like you just can't unseal it.
00:48:50.880 --> 00:48:53.280
Like, you need the person to like unseal the pouch.
00:48:53.519 --> 00:49:01.679
Um, and then there's like other versions where like I know teachers will like have uh front of the room like baskets or like places where kids can put it with their names on it or whatever.
00:49:01.760 --> 00:49:05.119
And like there's like lots of different things, and so they're testing the specific one.
00:49:05.280 --> 00:49:14.159
I think this is like this intervention is not as bad as like the teacher monitoring constantly and saying put your phone away one.
00:49:14.320 --> 00:49:21.039
But I also don't think it's like anywhere near as like my ideal, which is like literally like you cannot have it in the school.
00:49:21.119 --> 00:49:28.000
Like maybe you can like have it in your locker, but you are not allowed to have your phone on your person at all over the course of the day.
00:49:28.159 --> 00:49:40.079
And like part of this is like there's like significant like research now about like I just want like a mat like I when I had this yonder pouch at this like comedy show, I was thinking about like, oh man, I wish I could have my phone sometimes.
00:49:40.159 --> 00:49:50.960
Like I was like constantly distracted by like the fact that I couldn't get it, and like there's all these reports of students like figuring out how to like break into these pouches, and like they do verify in the paper that like GPS pings went down.
00:49:51.039 --> 00:49:58.559
So like it's not like mass jail breaking of their phones, but like just like there's like a cognitive like load of just like having the possibility of having your phone.
00:49:58.639 --> 00:50:18.000
Like, just like imagine like other things, like if there was just like a television next to you or your best friend next to you at your off at the office, like just even if like you're supposed to be working, like these things, like taking the effort to not do something that is distracting is actually pulling you out of like working or engaging with a classroom or whatever.
00:50:18.159 --> 00:50:19.199
So, like I'm like a little bit.
00:50:19.599 --> 00:50:21.760
We were friends, you know, we're here at the office.
00:50:22.000 --> 00:50:23.519
We are, and we get distracted constantly.
00:50:23.760 --> 00:50:26.239
I have to like leave the office to work.
00:50:26.559 --> 00:50:27.199
It's not my fault.
00:50:27.280 --> 00:50:29.039
I'm uh put me in a pouch.
00:50:29.280 --> 00:50:29.440
Exactly.
00:50:29.519 --> 00:50:30.559
We gotta yonder pouch mat.
00:50:30.719 --> 00:50:31.760
But I just think that that's one thing.
00:50:31.920 --> 00:50:38.559
Second thing is just like, you know, people are really down on this paper, and like as someone who is not like a smartphone theory of everything person, like whatever.
00:50:38.719 --> 00:50:48.400
But I just think that like eight hours the day, you don't have your phone, but the other 16 hours a day, you do have your phone and you're like TikTok maxing AI slop.
00:50:48.480 --> 00:51:00.239
Like, yeah, like I don't know if your test grades are gonna go up that much, but like seems good that like the school is not this impossible to manage like rage cage.
00:51:00.480 --> 00:51:01.440
Like, you know what I mean?
00:51:01.760 --> 00:51:07.360
I mean like it would have been good if the scores went up, but like I don't I wasn't like super shocked by that, I guess.
00:51:07.679 --> 00:51:13.360
Look, I'm still comfortable with it as a policy since at the end of the day, like the scores didn't go down.
00:51:13.519 --> 00:51:16.000
Um, and the subjective well-being actually went up.
00:51:16.079 --> 00:51:16.159
Yeah.
00:51:16.400 --> 00:51:24.400
Which I think is sort of is motivating actually parents around this kind of stuff most.
00:51:24.719 --> 00:51:30.079
I mean, I'll just say, like, in the morning, you know, I've got a fifth grader and we live really close to the school.
00:51:30.239 --> 00:51:33.440
So we always get there early, and the kids hang out and play.
00:51:33.760 --> 00:51:38.320
And most of the time they're like running around or they're climbing trees or other kinds of stuff like that.
00:51:38.559 --> 00:51:43.360
This morning I was like talking to another mom at drop-off, and I said to her, I was like, what's going on?
00:51:43.440 --> 00:51:45.840
Like the every everybody's too quiet.
00:51:46.000 --> 00:51:46.159
Yeah.
00:51:46.320 --> 00:52:01.760
And we like looked over, and what happened is like there was a kid there who's not usually there early, but who got there early today, and he had his phone with him because he's one of the fifth graders who has a phone, and the kids were all huddled around watching a video or watching him play a game or something like that.
00:52:01.920 --> 00:52:02.239
Yeah.
00:52:02.639 --> 00:52:07.679
And I'm a huge hypocrite about this because you will constantly find me staring at my phone.
00:52:07.840 --> 00:52:16.719
And, you know, Jose thinks this is like the dumbest shit ever that I get on this high horse because I'm always like, you know, I'm on my tweets and stuff.
00:52:16.800 --> 00:52:25.840
Um, but it's like it seems like it's better for the children to interact with each other and play than to be on their phones all the time.
00:52:26.480 --> 00:52:31.920
That being said, like I am actually surprised that it didn't have more academic benefits than this.
00:52:32.239 --> 00:52:40.159
It just seems like to me, like it would be a huge distraction that would that would hurt people's learning.
00:52:40.320 --> 00:52:47.599
I'm putting this in the bucket of like, I'm not trying to be a total social science denialist, but like I don't I don't really believe it.
00:52:47.760 --> 00:52:50.639
I'll but it was it was a pretty short time span.
00:52:50.719 --> 00:52:54.079
So like it was Yeah, I mean, it it's relatively brief.
00:52:54.239 --> 00:53:04.639
Um the other thing I will say, I mean, not just in the spirit of like total skepticism, but the limits of this kind of experimental evidence is that you know what we're really talking about with phones.
00:53:05.119 --> 00:53:08.400
Yeah, I mean, we're talking about between April 2025 to February 2026.
00:53:08.559 --> 00:53:13.119
Like I mean, there's summer in that in which like you have your phone the whole time.
00:53:13.360 --> 00:53:16.480
There's like five months of like instruction, much of the phone.
00:53:16.639 --> 00:53:17.360
Yeah, no, no, I agree.
00:53:17.519 --> 00:53:17.760
I agree.
00:53:17.920 --> 00:53:19.840
I mean, it it might be better over a longer term.
00:53:20.159 --> 00:53:26.800
But also I think we're really talking about the sort of dynamic interplay of rules and norms.
00:53:27.920 --> 00:53:28.480
Right.
00:53:28.960 --> 00:53:39.280
And just all schools everywhere saying that like while school is in session, you can't have a phone isn't just like a school policy.
00:53:39.679 --> 00:53:54.880
It's like a statement of society about like what is the purpose of school, what is the role of phones in our lives that I think has implications for because I mean one thing is like, well, it shouldn't just everything be up to parents, right?
00:53:55.039 --> 00:53:59.519
But like as a parent, you know, we we live in a society, right?
00:53:59.599 --> 00:54:09.199
And it's like I will never be the first parent in my peer group to get my kid some new kind of advice uh device.
00:54:09.360 --> 00:54:11.199
And I probably also won't be the last.
00:54:11.360 --> 00:54:11.519
Yeah.
00:54:11.679 --> 00:54:12.239
You know what I mean?
00:54:12.320 --> 00:54:19.119
Like I'm gonna be somewhere in the middle and I'm comfortable being below average, but like there's only so far below average I'm gonna go.
00:54:19.280 --> 00:54:25.440
And like things that shift where the midpoint is, then impact how parents parent.
00:54:25.519 --> 00:54:25.599
Yeah.
00:54:25.760 --> 00:54:31.039
And how parents parent is probably a bigger deal than like literally what's the rule in the school.
00:54:31.199 --> 00:54:31.360
Yeah.
00:54:31.519 --> 00:54:36.239
But the school is where we make collective decisions about stuff.
00:54:36.400 --> 00:54:44.880
But like, you're not gonna find this in a difference in differences study of the rollout of the policy.
00:54:45.280 --> 00:54:48.320
I mean, I think over a longer time period you could probably find this.
00:54:48.400 --> 00:55:23.760
But I think that like, you know, I have a friend who works as an occupational therapist in a public school system in in the US in a major American city, and she, you know, she talks all the time about how, you know, a lot of her work is she's evaluating young children for developmental delays, and that like increasingly, like largely what's happening is that there are lots of kids who like would not have developmental delays if not for the fact that they were just like literally plopped in front of an iPad for like 24 hours, and like once like that intervention kind of happens, like they're not doing that, like these people could not enter gen ed and like they're not actually necessary, uh don't need her her services anymore.
00:55:23.920 --> 00:55:30.159
And what she finds is she's having these conversations constantly with parents, like all the time about like, hey, like tell me about screen time use.
00:55:30.400 --> 00:55:40.079
And like it's like really like, and this is just like an agreement to what you're saying, but just like it's like very, very difficult to have this conversation that parents feeling they're being shamed for it.
00:55:40.239 --> 00:55:44.960
And so they get like really hostile with her if she even brings up like screen time.
00:55:45.119 --> 00:55:57.280
And so, like, given that context, given that we're still in this equilibrium where parents are clearly themselves, like, I mean, not all parents, but like somewhat addicted to their phones, just like Matt on Twitter, like, can't get off.
00:55:57.360 --> 00:56:00.960
Uh, and me on like short form video, I just, you know, can't get off of it.
00:56:01.199 --> 00:56:09.599
Um it's not surprising that, like, yes, okay, they're now in their yonder pouches all day in school, but then they go home and they just immediately mainline.
00:56:09.920 --> 00:56:11.440
And maybe it's even worse now.
00:56:11.519 --> 00:56:18.639
I mean, like, they've been feeling withdrawal all day from their like, you know, AI fruit slop videos, and they're now watching even more.
00:56:18.719 --> 00:56:21.840
Like, I don't know, like, I think a really great study would be seeing like screen time use.
00:56:21.920 --> 00:56:25.679
I don't know if Apple shares that with researchers, but like, does screen time use change?
00:56:25.920 --> 00:56:27.599
Is the number of hours they're watching change?
00:56:27.760 --> 00:56:28.480
Are they sleeping less?
00:56:28.559 --> 00:56:43.440
Like, it's just like there's so many things that could be going on here because until we achieve like sort of society-wide view that like it is largely not good for like minors to be spending like hours and hours a day on their phones doing non-academic stuff.
00:56:43.599 --> 00:56:46.639
Like, I just don't think we're gonna have some like massive change in like test scores.
00:56:46.800 --> 00:56:50.159
Aaron Powell But what if they're like listening to podcasts?
00:56:50.480 --> 00:56:50.960
Then it's fine.
00:56:51.119 --> 00:56:52.159
Or watching podcast videos.
00:56:53.519 --> 00:56:55.920
Checking out my tweets, like, like and subscribe.
00:56:56.320 --> 00:57:00.639
Um I mean it's it's like we're all apart at the same hypocrisy, unfortunately.
00:57:01.039 --> 00:57:01.360
Not me.
00:57:01.599 --> 00:57:03.599
I'm I'm I'm weaned off my smartphone.
00:57:03.920 --> 00:57:04.320
What do you mean?
00:57:04.639 --> 00:57:06.960
I got a dumb phone and now my smartphone's locked down.
00:57:07.280 --> 00:57:07.519
Wow.
00:57:07.760 --> 00:57:07.920
Yeah.
00:57:08.159 --> 00:57:08.239
Okay.
00:57:08.480 --> 00:57:10.639
You're not you're not you're not following my dumb phone journey.
00:57:10.880 --> 00:57:11.199
I don't know.
00:57:11.360 --> 00:57:11.920
I guess right.
00:57:12.000 --> 00:57:15.760
I get some I get some some blue uh some some green text from me.
00:57:17.119 --> 00:57:18.000
It's gross.
00:57:18.559 --> 00:57:20.320
Well, I think it's a great place to end.
00:57:20.480 --> 00:57:22.239
Everyone, uh, thank you so much for listening.
00:57:22.400 --> 00:57:26.719
If you enjoyed the show, uh subscribe, like, tell your friends about it.
00:57:26.880 --> 00:57:30.480
We're still, you know, early days and we're growing and we want to make sure to reach more people.
00:57:30.800 --> 00:57:31.440
Bye.