>>> NOW FROM THE TARIFF WARS WE DISCUSSED EARLIER TO TAX CUTS FOR THE RICH, IS THERE METHOD IN TRUMP'S MAGANOMICS.

OUR NEXT GUEST CALLS IT HIS WEAPON OF MASS DISTRACTION.

NYU PROFESSOR AND PODCAST HOST SCOTT GALLOWAY JOINS HARI SREENIVASAN TO BREAK DOWN WHAT CONSTANT HEAD SPINNING POLICIES MEAN FOR THE STATE OF AMERICAN FINANCES.

>> SCOTT GALLOWAY, THANKS FOR BEING BACK WITH US.

LAST TIME WE WERE TALKING ABOUT YOUR BOOK "ADRIFT" AND YOU SAID AMERICA AS A COUNTRY ISN'T LOST BUT RATHER ADRIFT AND UNMOORED AND HAS YOUR ASSESSMENT CHANGE?

>> YOU COULD ARGUE IT'S FOUND DIRECTION.

UNFORTUNATELY, I THINK THE DIRECTION IS MORE AROUND CHANGE TOWARDS --A QUARTER OF EACH PARTY ARE IN FAVOR OF AN AUTOCRAT AS LONG AS THAT AUTOCRAT SHARES THEIR VIEWS AND I THINK THAT'S SORT OF COME TO FRUITION HERE.

I THINK THE SUPERSEDING OF OUR CHECKS AND BALANCES OF DIFFERENT BRANCHES OF GOVERNMENT SUCH THAT ONE POLITICAL PARTY THAT IS IN CONTROL CAN SORT OF BYPASS THE TRADITIONAL CONSTITUTIONAL MEASURES OR SAFEGUARDS REFLECTS THAT AMERICA HAS BECOME, YOU WILL, MORE OPEN OR ACCEPTING TO THE NOTION OF AN AUTOCRACY.

I THINK WE ARE PRETTY MUCH IN A FULL KIND OF CALL IT MAYBE MOST MUCH OF AMERICA VOTED FOR THIS.

>> DO YOU THINK THAT SAY, FOR EXAMPLE, WHAT'S HAPPENING IN THE STOCK MARKET IS A REFLECTION OF PEOPLE'S DISSATISFACTION WITH THIS DIRECTION YOU'RE TALKING ABOUT?

I THINK THE S&P HAD ONE OF ITS WORST WEEKS EVER.

ALL THE GAINS SINCE THE ELECTION HAVE PRACTICALLY BEEN WIPED OUT.

>> I WOULDN'T SAY IT'S DISSATISFACTION BECAUSE THAT IMPLIES THEY'RE UPSET ABOUT IT.

THE MARKET IS PRETTY UNEMOTIONAL AND IS FOCUSED ON INCREASING EARNINGS AND PEOPLE WILL BUY STOCKS REGARDLESS.

SENTIMENT SORT OF TAKES A BACK SEAT TO FINANCIAL CONSIDERATIONS.

I THINK WHAT'S HAPPENING IN THE MARKET IS FIRST OFF, YOU HAVE TO ACKNOWLEDGE EVEN WITH THESE DRAWDOWNS THE MARKET IS SUBSTANTIALLY UP FROM WHERE IT WAS JUST SIX MONTHS AGO.

IT HAS COME BACK FROM PREELECTION THE TRUMP BUMP HAS BEEN WIPED OUT.

I THINK YOU'RE SEEING A COUPLE THINGS.

THE MARKET MAY HAVE GOTTEN TRIGGERED THE SELLOFF IS WHAT APPEARS TO BE IRRATIONAL NONECONOMIC DECISIONS AROUND TARIFFS WHERE WE'RE BASICALLY RIPPING UP THESE 80-YEAR LONG ALLIANCES WITH TRUSTED ECONOMIC PARTNERS THAT ENGAGE IN MUTUALLY BENEFICIAL TRADE AND THAT THESE ARE NOT ONLY A BAD IDEA IN THE SPECIFIC AGREEMENTS OF TRADE WE'RE RIPPING UP, BUT AMERICA IS LOSING A VERY IMPORTANT BRAND ASSOCIATION FOR ECONOMIC RELATIONSHIPS OR GEOPOLITICAL NEGOTIATIONS AND THAT IS ONE OF CONSISTENCY.

>> THERE WAS AN ESTIMATE BY THE YALE BUDGET LAB THESE TARIFFS WILL COST THE AVERAGE HOUSEHOLD SOMEWHERE BETWEEN $1,600 TO $2,000 AND ESTIMATED TO REDUCE OUR GDP BY AS MUCH AS $110 BILLION A YEAR.

ONE OF THE LINES OF THINKING I HEAR FROM THE ADMINISTRATION IS IF THESE SHORT TERM HITS CAN GET US BETTER LEVERAGE TO TRY TO NEGOTIATE LONGER TERM PROSPERITY FOR AMERICA, THIS WILL HAVE BEEN WORTH IT.

DOES THAT MAKE SENSE?

>> WELL, TO BE FAIR, TARIFFS AREN'T ALL BAD.

SOMETIMES YOU NEED TARIFFS AS A HAMMER TO RESTORE SYMMETRY TO AN ASYMMETRIC TRADE RELATIONSHIP.

BIDEN MAINTAINED THE INITIAL TRUMP TARIFFS.

I THINK SOME OF TRUMP'S INITIAL INSTINCTS AROUND THE ASYMMETRY OF THE TRADING RELATIONSHIP ARE ACCURATE.

I WAS A GRADUATE INSTRUCTOR OF MACROECONOMIC IN GRADUATE SCHOOL AND WE USED TO TALK ABOUT TARIFFS I IMAGINE THE SAME WAY PROFESSORS IN MEDICAL SCHOOL TALK ABOUT LEECHES LIKE CAN YOU BELIEVE THEY WERE STUPID ENOUGH TO BELIEVE THIS WOULD WORK?

THE NOTION WE'RE PUTTING OURSELVES IN A POSITION TO NEGOTIATE SOME BIG BEAUTIFUL DEAL, I DON'T THINK IT'S GOING TO WORK BECAUSE TRUMP TORE UP THE IRAN DEAL AND NOW APPEARS TO WANT IT AGAIN.

THE TARIFFS ARE OFF AND ON.

I DON'T THINK WE'RE SEEN NOW AS A RELIABLE PARTNER THAT CAN BE COUNTED ON WITH THE LIVELIHOOD OF YOUR COUNTRY.

THINK ABOUT CANADA.

WE'RE NOT EVEN ABLE TO GIVE CANADA A GOOD REASON WHY HE'S DOING THIS.

KIND OF THE STATED REASON FROM THE ADMINISTRATION FOR WHAT ARE TARIFFS THAT WILL HURT OUR ECONOMY AND DRAMATICALLY HURT THE CANADIAN ECONOMY IS THE UNCHECKED TRANSFER OF FENTANYL ACROSS THE CANADIAN BORDER.

YOU COULD TAKE THE AMOUNT OF FENTANYL THAT HAS COME ACROSS THE U.S./CANADIAN BORDER AND PUT IT IN A BACKPACK, ESTIMATES THAT IT'S LESS THAN 1%.

TO ALIENATE YOUR CLOSEST ALLY.

CANADA IS THE LARGEST UNDEFENDED BORDER IN THE WORLD.

WHAT DOES THAT TELL YOU ABOUT OUR RELATIONSHIP TO THIS POINT?

THEY JOINED US IN WORLD WAR 1.

THEY WERE IN WORLD WAR II BEFORE US TRAINING ALLIED PILOTS, SIDE BY SIDE WITH US IN KOSOVO, IN OUR FIGHTS AGAINST THE TALIBAN, AMAZING ECONOMIC PROSPERITY.

WE HAVE NBA AND NHL TEAMS IN AMERICA AND CANADA RESPECTIVELY.

I LOVE THAT QUESTION, HARI, THAT WAS PRESENTED BY THE EVALUATING WHO ARE YOUR REAL FRIENDS?

IT COMES DOWN TO ONE QUESTION FOR HER.

WOULD THEY HIDE ME?

THAT'S A REALLY PUNCTURING KIND OF RATTLING QUESTION TO EVALUATE YOUR FRIENDS BY, BUT BY THAT STANDARD, CANADA IS ONE OF OUR BEST FRIENDS.

IN THE IRAN HOSTAGE CRISIS, THEY HID AMERICAN DIPLOMATS AND UNDER GREAT PERSONAL RISK INSURED THEIR SAFE ESCAPE FROM IRAN AND THEY STAYED BEHIND AND HAD THEY BEEN CAUGHT, THERE WAS A GOOD CHANCE THEY WOULD HAVE BEEN HANGED FROM CRANES.

CANADA HAS HID US.

THEY ARE REAL FRIENDS AND FOR US TO RECKLESSLY, IRRATIONALLY, AND INEXPLICABLY TRY TO HURT THEM IN EXCHANGE FOR WHAT MIGHT BE SOME BIG BEAUTIFUL DEAL, THE DAMAGE HERE TO UNWIND AND REPAIR WILL TAKE THE BETTER PART OF THE 80 YEARS IT TOOK TO MAKE THESE AMAZING, PROSPEROUS RELATIONSHIPS THAT, QUITE FRANKLY, THE ADMINISTRATION IN MY VIEW IS IRRATIONALLY TAKING THEM FOR GRANTED.

>> HOW DOES THE WORLD DEAL WITH THIS KIND OF UNCERTAINTY.

>> THE ATLANTA FED HAS A METRIC THEY'RE TRYING TO PREDICT WHAT GDP GROWTH MIGHT LOOK LIKE IN THE COMING YEAR.

IN THE LAST 45 DAYS IT'S GONE FROM 4% TO NEGATIVE 2.8.

THE ECONOMY IS CONTRACTING FASTER THAN IT HAS SINCE THE COVID LOCKDOWNS.

OBVIOUSLY THE MARKETS ARE CHILLED.

I THINK THE SILVER LINING HERE --I ALWAYS LIKE TO ASK MYSELF WHAT COULD GO WRITE BECAUSE OVER THE MEDIUM AND LONG TERM, THE MAJORITY OF THE METRICS IN THE WORLD DO GET BETTER.

IT'S EASY FOR ME TO TRY AND SOUND SMARTER THAN THEY ARE BY ALWAYS BEING NEGATIVE.

I THINK THE SILVER LINING IS EUROPE IS BECOMING A UNION BECAUSE THEY REALIZE THEY CAN NO LONGER COUNT ON THE MILITARY UMBRELLA.

QUITE FRANKLY, THEY HAVE GOTTEN I WOULD CALL LAZY AND EXPECTANT AROUND THE MILITARY UMBRELLA PROVIDED BY THE U.S.

THEY NOW ARE CONVINCED THEY CAN NO LONGER COUNT ON THE U.S. TO BE PRO DEMOCRACY AND MAKE RATIONAL DECISIONS AND HONOR THIS POST WORLD WAR II ORDER.

THEY REALIZE THEY CAN NO LONGER COUNT ON OR EXPECT THE MILITARY UMBRELLA OF THE U.S.

THEY WILL DRAMATICALLY INCREASE THEIR SPENDING ON MILITARY WHICH I THINK WILL HAVE STIMULATING AND SPILLOVER EFFECTS.

I THINK THE SILVER LINING HERE IS EUROPE WILL BEGIN TO COMMAND THEIR SPACE.

THE TOTAL GDP IS 19 MILLION.

THE GDP OF RUSSIA IS 2 TRILLION.

THERE'S NO REASON WHY EUROPE SHOULDN'T BE ABLE TO PUSH BACK AND BE A CREDIBLE OPPOSING THREAT TO AN ECONOMY THAT IS AGAIN SMALLER THAN THE SIZE OF CANADA, RUSSIA.

CRITICAL OF ELON MUSK IN THE PAST SEVERAL MONTHS AND REALLY COUPLE YEARS.

IN LIGHT OF THE DEPARTMENT OF GOVERNMENT EFFICIENCY, I THINK THERE IS CONSENSUS THAT PEOPLE ON BOTH SIDES OF THE AISLE ARE INTERESTED IN MAKING GOVERNMENT FUNCTION BETTER, MAKING IT MORE RESPONSIVE AND EFFICIENT.

WHAT HAVE YOU SEEN OVER THE PAST COUPLE MONTHS THAT GIVE YOU PAUSE ON WHETHER THIS IS GOING TO HAVE LONGER TERM EFFECTS AND PERHAPS UNINTENDED CONSEQUENCES?

>> WELL, EVERY ADMINISTRATION CLINTON/GORE HAS HAD SOME SORT OF TASK FORCE TO TRY AND ROOT OUT INEFFICIENCY, FRAUD, AND WASTE.

SO FAR IF DOGE IS AN AUDIT OF THE U.S. GOVERNMENT, THE U.S. GOVERNMENT HAS BEEN ISSUED A CLEAN BILL OF HEALTH BECAUSE ITS RECEIPTS ARE SURPRISINGLY SCANT.

THE FIRST ONE SAID THEY WERE SAVING $8 BILLION.

IT ENDED UP BEING 8 MILLION OF SPENDING THAT HAD BEEN SPENT AND NUMBERS TWO, THREE, AND FOUR ON THE LIST OF DOGE RECEIPTS THAT HAVE SINCE BEEN TAKEN DOWN WERE BLATANTLY FALSE.

THE "WALL STREET JOURNAL" REPORTS SO FAR DOGE HAS FOUND 2.6 BILLION IN COST SAVINGS.

YOU CAN SIX X THE SAVINGS FROM DOGE TO DATE BY CUTTING OFF ALL SUBSIDIES TO TESLA WHICH COST TAXPAYERS $15 BILLION.

WE ALL LIKE THE IDEA OF CUTTING WASTE, BUT I BELIEVE IT'S A MISDIRECT.

THAT IS WHY WE ALL HAVE OUR HAIR ON FIRE LOOKING OVER HERE AT DOGE, 2.6 BILLION, THE EMOTIONAL UPSET OF FIRING GOOD PEOPLE DOING GOOD WORK OR GENERAL INCOMPETENCE OF FIRING NUCLEAR CONTROLLERS AND FIRING OFF PEOPLE WITH OUR NUCLEAR STOCKPILE AND FIRING THEM BACK, I BELIEVE IT'S A MASSIVE DISTRACTION AS THE TRUMP ADMINISTRATION PLANS TO INCREASE OUR DEFICIT BY $800 THE WEALTHY.

ALL THIS IS A MISDIRECT.

IT'S SAD.

IT'S UNFORTUNATE.

IT'S INCOMPETENT.

THESE STAVINGS ARE ILLUSORY, BUT AT THE END OF THE DAY I THINK IT'S A PURPOSEFUL DISTRACTION FROM THE TAX CUTS THEY ARE TRYING TO PUT FORWARD AT THE EXPENSE OF FUTURE GENERATIONS.

>> DO YOU THINK ELON IS GETTING A NET POSITIVE BENEFIT FROM THIS?

ON THE ONE HAND, HE'S GAINED INCREDIBLE PROXIMITY TO POWER AND, IN FACT, POWER FOR HIS $250 MILLION CONTRIBUTION TO THE CAMPAIGN.

ON THE OTHER HAND, THE VALUE FROM TESLA SHARES HAVE BEEN EVAPORATING BECAUSE HE SEEMS TO HAVE ALIENATED A HUGE CHUNK OF THE PEOPLE THAT USED TO BUY HIS CARS?

>> I THINK THE POLITICAL CALCULUS WAS MISCALCULATED ON HIS PART.

WE WERE TALKING ABOUT NIKE OFF MIC.

WHEN NIKE EMBRACED COLIN KAEPERNICK, WHICH WAS A POLITICAL POSITION, THEY HAD DONE THE MATH.

TWO-THIRDS OF THEIR REVENUE COMES FROM PEOPLE OUTSIDE OF THE U.S.

UNDER AGE 30.

THEY PURPOSEFULLY TICKLED THE SENSORS AMONG A CUSTOMER BASE THEY KNEW WOULD APPRECIATE THAT.

MUSK HAS MADE EXACTLY THE WRONG CALCULATION.

THAT IS THREE-QUARTERS OF REPUBLICANS WOULD NEVER CONSIDER BUYING AN EV ANYWAY.

HIS LARGEST MARKET IS CALIFORNIA AND SALES ARE DOWN 11%.

IN EUROPE SALES ARE OFF 75%.

TESLA HAS SHED A THIRD OF ITS VALUE IN THE LAST MONTH, GIVEN BACK ALL ITS GAINED SINCE THE TRUMP ELECTION.

WHAT IS REALLY GOING TO HURT HIS POCKETBOOK IS THAT IT HAS NOW JUMPED THE LAB AND IS STARTING TO INFECT SPACEX, SPECIFICALLY STARLINK, WHO IS SEEING CONTRACTS CANCELED BY PEOPLE RANGING FROM CANADA TO POLAND AS SAYING WE CAN'T COUNT ON YOU FOR SOMETHING AS IMPORTANT AS COMMUNICATIONS AND BATTLEFIELD COMMUNICATIONS SO THEY'RE RECONSIDERING THEIR STARLINK CONTRACT.

I WOULD ARGUE THE POLITICAL CALCULUS HERE FROM MR. MUSK WAS WILDLY INACCURATE AND HE IS SEEING A LOT OF HIS WEALTH EVAPORATE BECAUSE THE NEGATIVE ASSOCIATIONS OF MUSK ARE STARTING TO INFECT NOT ONLY THE TESLA BRAND, BUT ALSO THE SPACEX BRAND.

SO I THINK IT WAS AN IRRATIONAL DECISION FROM A PURELY COMPLEX STANDPOINT.

>> HERE WE WERE AT THE INAUGURATION AND WE SAW LINED UP TO THE PRESIDENT LITERALLY THE WHO'S WHO OF TECHNOLOGY AND BILLIONAIRES STANDING NEXT TO HIM.

IS THIS JUST BUSINESS AS USUAL OR IS THIS DIFFERENT THAN WHAT THE CARNEGIES OR ROCKEFELLERS MIGHT HAVE DONE 100 YEARS AGO?

IS IT THE OPTICS THAT ARE DIFFERENT NOW OR IS THERE SOMETHING MORE STRUCTURALLY MORE DESTRUCTIVE?

>> IT'S A FAIR QUESTION BECAUSE I THINK A LOT OF PEOPLE ON THE RIGHT WOULD MAYBE FAIRLY SAY LOOK, WE MAY BE MORE IT, BUT IT'S NOTHING LOBBYISTS AND LAWYERS AND MEDIA HAVEN'T DONE IT FOR THE LEFT.

WHEN THE MOST POWERFUL AND WEALTHY TECH EXECUTIVES IN THE WORLD ARE WILLING TO BE INTIMIDATED DONATING TO AN INAUGURAL CAMPAIGN, WHEN THEY'RE WILLING TO BE PARADED AROUND FOR THE BENEFIT OF THE TRUMP ADMINISTRATION, YOU HAVE A DOMINO OF COWARDICE.

THEY TEXT MY PIVOT CO-HOST THEY HATE THEMSELVES IN THE INAUGURATION AND THEN THEY SHOW UP.

THAT GIVES THE CEO OF X CONFIDENCE TO DEMAND THAT AN AD AGENCY ADVERTISE ON THEIR PLATFORM OR RISK HAVING THEIR MERGER BLOCKED BY HER BUDDY WHO HAS PROXIMITY TO THE PRESIDENT.

WHAT WE DON'T WANT TO ACKNOWLEDGE IN AMERICA IS THAT RIGHTS AND DEMOCRACY ARE NOW A FUNCTION OF HOW MUCH MONEY YOU HAVE, FULL STOP.

THE WEALTHY TECHNOCRATS AND 0.1% FEEL AS IF --AND QUITE FRANKLY, IT MAY BE TRUE --THAT THEY ARE PROTECTED BY THE LAW BUT NOT BOUND BY IT, WHEREAS, THE REST OF THE 99% ARE BOUND BY THE LAW BUT NOT PROTECTED.

>> GETTING BACK TO THOSE CEOs, I WONDER IF THEY WILL OR ALWAYS HAD A SHIELD SAYING I'M JUST DOING WHAT'S RIGHT FOR MY SHAREHOLDERS, MY FIDUCIARY RESPONSIBILITY.

SO I GIVE $1 MILLION TO THE CAMPAIGN OR INAUGURATION.

IT COULD HELP OUR STOCK DOWN THE LINE OR IF I DON'T GIVE THE MILLION DOLLARS, IT COULD HURT MY STOCK DOWN THE LINE AND AS CEO, THAT'S WHO I'M SUPPOSED TO BE LOYAL TO.

>> I THINK THAT'S A FAIR ARGUMENT, HARI, BUT WHAT I WOULD ASK IS THEY DON'T EVER USE THE TERM STAKEHOLDERS AGAIN.

REMEMBER ALL THIS BS THE LAST TEN YEARS THEY START TALKING ABOUT STAKEHOLDERS?

ALL RIGHT.

THE COUNTRY, DEMOCRACY, POOR PEOPLE, PEOPLE NOT POLITICALLY HAVE STOCK OPTIONS IN APPLE, THE 99% THAT ONLY OWN 10% OF STOCKS, ARE YOU SUPPOSED TO ALSO BE REPRESENTING THEM?

ARE YOU SUPPOSED TO HAVE SOME FIDELITY TO THE VALUES OF THE RULE OF LAW, CHECKS AND BALANCES THAT HELPED GET YOU SO RICH IN THE FIRST PLACE?

LET ME LIST ALL THE CEOs WHO FILLED THIS LEADERSHIP VOID SAID I AM MORE CONCERNED ABOUT THE LONG TERM HEALTH OF AMERICA AND WHAT IT MEANS FOR THE PREVIOUS AND PUBLIC COMPANIES.

I'M NOT GOING TO ENGAGE IN IN KLEPTOCRACY.

I'M NOT GOING TO BE AN AGENT.

HERE ARE SOME OF THE CEOs WHO FILLED THIS LEADERSHIP VOID.

OKAY, LIST OVER.

AT SOME POINT MANY OF THESE PEOPLE WHO TALK ABOUT RUNNING FOR PRESIDENT AND CLAIM TO BE GREAT AMERICANS AND CONSTANTLY VOICE GRATITUDE FOR WHAT IS THE BEST EXPERIMENT AND BEST PLATFORM IN THE WORLD FOR ESTABLISHING ECONOMIC SECURITY AND RIGHTS, AT SOME POINT YOU'D LIKE TO THINK THEY'RE GOING TO SHOW SOME FIDELITY TO THE DEMOCRACY AND PRINCIPALS AND RULE OF LAW AND CHECKS AND BALANCES THAT PLAYED A HUGE ROLE IN THEIR WEALTH, BUT THEY DEFAULT TO THIS COLD COMFORT OF WELL, I'M A FIDUCIARY FOR SHAREHOLDERS.

LET'S BE HONEST.

JUST KISS HIS ASS, GIVE HIM A MILLION BUCKS AND STAY OUT OF THE CROSSHAIRS.

THEY SAY I'M REPRESENTING THE BOTTOM 99%, REPRESENTING DEMOCRACY AND WHAT AMERICA IS SUPPOSED TO STAND FOR AND PAYING IT FORWARD BASED ON THE RULE OF LAW, DEMOCRACY, FAIR COMPETITION THAT GOT ME HERE IN THE FIRST PLACE.

I'M THINKING WHAT THEY HEAR IN THE PRIVATE SECTOR IS NOT ONLY SHOCKING, IT'S VERY DISAPPOINTING.

>> AUTHOR AND PROFESSOR AND PODCAST HOST, SCOTT GALLOWAY, THANKS SO MUCH FOR YOUR TIME.

>> THANK YOU.