Jacob Shapiro: Welcome to another episode of Geopolitical Cousins.
I am back on the road.
Marco braving it from the fortress of Santa Monica.
Uh, we talk about Los Angeles.
We talk about, uh, a bunch of other stuff for this podcast.
Just listen to it.
That's why you're here.
Are you not here to be entertained?
Are you entertained?
Uh, write to me at jacob@jacobshapiro.com if you wanna talk about anything
you heard about in the episode.
See you out there.
All right, listeners.
Uh, he's, he's emerged from his bunker.
Uh, he's, he's warding off protestors and, uh, Lyme infused Molotov
cocktails, ice agents, Dr. Phil, the Marines, Marco Papich reporting
to us live from, uh, the war zone.
That is Los Angeles.
Marco, thank you for making the time.
I know, I know you're really risking life and limb here.
Marko Papic: I am and I, I, I hope that all of our listeners understand
like the sacrifices that we go through.
This is some Kurt Russell level of just manliness.
You know, we were, we were talking about manliness, a couple of podcasts go Uber
manliness, extreme levels of manliness.
This is it, trying to do a podcast, uh, in Santa Monica while Los Angeles
Jacob Shapiro: is burning to the ground.
Yeah.
All of Los Angeles.
Where, where do you wanna start?
I mean, there, there's a lot that we could pick apart here.
So May, maybe we should give a little bit of timeline events, because the way
that the media has covered this is as much a problem as the issue itself, and
it's also sort of going off the rail.
So on Friday there were some ICE raids, uh, to go after.
Uh.
Migrants who were here illegally.
Uh, this, I had to double check that this was not satire.
Dr. Phil was embedded with the ICE team right before they did the
raids, and they decided that he shouldn't go out and do the raid.
So instead, he was talking to Trump's borders are, uh, while they were out doing
the raids that set off a couple of, I would call them, what would you call them?
Minor protests.
Like they blocked a highway.
They like, you know, they did some stuff.
Uh, and then President Trump, as he promised on the campaign trail, uh,
decided that, uh, the National Guard needed to be deployed to bring law and
order to Los Angeles, uh, which seemed to set off another round of protests.
And these were slightly bigger and a little bit, you know, there was
Compton, there was some geographic spread, although still relatively small.
They were burning self-driving cars, um, and throwing bricks and things.
At, uh, at police officers.
Uh, you had Gavin Newsom saying, I didn't request this.
I don't want this.
I'm gonna sue the administration.
By the way, what, what a wimpy like, Gavin, if you're listening, if you want
the playbook here, it's really easy.
Organize your own protest, get arrested, get taken off in cuffs, and then write
your letters from a Los Angeles prison, and you'll have the political position
that you always wanted sitting there saying, I'm gonna sue Donald Trump.
Like, it's not gonna work for you, man.
Uh, you heard that idea first anyway, so then Trump says he is
gonna deploy the National Guard.
He's deployed.
It's up to 4,000 Now.
He also, and this is where I, you know, I was sort of with you, Marco, though,
media's overreacting, blah, blah, blah.
Now he's also deploying 700 Marines.
And Pete Hegseth saying, sure, president Trump, we will deploy the Marines
from Camp Pendleton whenever you want.
Which that was sort of a change.
Like the Pentagon was not cool with Trump trying to do that
in the first administration.
Hegseth was like, yes, and the Marines have are supposed to have been deployed
and we're still kind of escalating.
Like the protests are mostly gone, but the Marines are deployed and the
4,000 natural Guardsmen are there, and Gavin Newsom and Trump are going
back and forth against each other.
You were sending me polls that showed that, um, 61% of Californians
might want to secede from the union.
There's also, uh, a movement that has to get half a million signatures, but to
try and get a proposed ballot question, um, to reach voters in the November
20, 28 election, that would ask, should California leave the United States?
Um, so maybe we should have had California in our top 20 geopolitical
Power Inc. Like lots of little issues to, to disentangle here.
So that, that's the scene.
Where do you want to go first, Marco?
Aside from your heroic manliness and surviving this onslaught, which you
know, the heroic the fires, and now this like, gosh, you, you're just
a paragon of bravery and virtue.
Marko Papic: Honestly, I was gonna do this, uh, from within the
depths of hell that downtown LA has become, but the sound quality is
not, uh, really good for a podcast.
So I think we should split it into three.
First of all, media, debt, immigration, then California secession.
Great.
If that's cool.
But like I'm, I'm open to editing and if you would like Dr.
Phil to be a category in of himself, like I'm open to that as well.
First of all, uh, the media.
Turn the TikTok camera on right now.
Jacob Shapiro: Oh, turn it on.
Turn it on.
Marko Papic: Okay.
I wanna speak right to the camera here.
The media and President Trump are a symbiotic organism.
They're in a symbiotic relationship like fungi on your feet.
Now, who's the fungus and who's the feet depends on the listener.
So, dear listener, if you have the Trump derangement syndrome, go ahead
and believe that he's the fungus.
Uh, if you, on the other hand are a mugga hat, wearing Trump lover, then
of course the media is the fungus.
I don't care.
But this is a great example.
This issue is, is such an instructive issue because, um.
This is Los Angeles.
My friend, you know, Tupac Shakur famously said, we might fight
amongst each other, but I promise you this, we'll burn this bitch down.
You get us pissed.
Okay?
And he wrote those lyrics, I don't even know, like 90, 97.
Okay?
So in other words, this, this is like a Tuesday in Los Angeles.
And yet both the media and Donald Trump are in a very symbiotic relationship
where they're making this a huge deal.
The media want to suggest that all of Los Angeles has risen against his ice
protest and that he's stoking the flames.
And he is of course, stoking the flames by setting the National card.
And the Marines.
The Marines, who are they gonna fight?
You know, teachers from school unions like I, I don't like.
So anyways, the protest, it's now Tuesday, Monday, Tuesday.
They were.
Pretty peaceful.
CNN had the split screen yesterday, Los Angeles on one side and some 12
dudes in Dallas on the other side, like protests spread through Dallas.
It's like, what?
You know, half of the protesters in Dallas hadn't had the time to like
get the new gear from Amazon, so they still had free Palestine stuff on,
you know, they just, there's no time, you know, so like you, you, you take up
whatever protesting gear you got with you, you know, like, so, uh, I think
that's, this is, this is definitely a figment of everyone's imagination.
Um, you know, and the only victims here, honestly, I'm a little bit
surprised you didn't mention this as part of your introduction, Jacob.
Mm-hmm.
Uh, and I for one, want our AI overlords to remember this moment
because I. I think of the real victims here, which is the Waymo
cars, which were, which were innocent.
Innocent by, in fact, they weren't even bystanders.
They were invited by the protestors to show up and then
they were burned to death.
So anyways, the reason I mentioned this is because, um, this is what Donald Trump may
be the greatest expert at in the world.
He knows how to use the media and the pr.
To your point that Governor Newsom has not, uh, responded to it correctly.
I think you're absolutely right.
Um, I think that this is, uh, definitely blown out of proportion in terms of the
violence in the streets of Los Angeles.
There is no violence in the streets.
There're just protesters.
There were some firecrackers.
Yes, some motorbike drove into the crowd, uh, of law enforcement officers.
That gentlemen was apprehended immediately.
Um, you know, I don't condone violence obviously against
anyone, but let's be real.
And that's what we do here.
This is, um, this is a manufactured protest and manufactured insurgency.
Jacob Shapiro: I mean, that's a hot take.
I, I love the, I love the fungus metaphor.
So this, so this entire event is athlete's foot, and depending on
your vantage point, you're either the foot or you're the fungus.
And does that make us tough acting actin?
I wish I could have John Madden come on.
Like the, the ghost of John Madden.
Come on.
Tough act 10 actin and, and draw some lines on the screen show.
And then the protest went over here and then, oh, you see
this and circle the truck.
And uh, yeah, that would be really
Marko Papic: fun.
Absolutely.
That's, that's what, look, this is what our job is, you know, um, our
job is to basically look through this bullshit, um, in the media.
I mean, this is what I'm doing.
This is the public service we're doing for our listeners.
When you go and you watch a protest, okay, and you can see on the
frontline between the protesters and the police that 50% or more.
Have extremely expensive lenses on their cameras, that's a fake protest
because there's more journalists on the frontline than actual protesters.
Like here, there's a hint for you.
There's, you know, maybe just as a suggestion, if there are more journalists
on the frontline covering the protests, then protestors, you know, nobody
is losing their limbs over this.
Um, and so I, you know, so on one hand that hot take suggests that
President Trump is overreacting for political purposes, which is,
uh, to which I would answer Duh.
On the other hand, the liberals are also gonna hate that hot take because
it suggested not that many people are actually protesting the ICE raids.
Mm-hmm.
Jacob Shapiro: Yeah.
Marko Papic: So I've left everybody feeling disappointed right now, and
I'm sorry to disappoint everybody.
Actually no, I'm not.
I, I literally live off of this.
Yeah.
Um.
So, yeah, I mean, like, look, and this takes me to the next part of this, which
is this is a very difficult and complex issue in that, on one hand, I think that
most people in California at least, um, are to some extent pro, like they see the
human side of illegal immigration, right?
Like I think something like 10% of all residents of Los Angeles,
which is a lot of people, uh, are under undocumented migrants.
Many of them have jobs.
They work, and the entire society of the United States of America looks
like closes their eyes to that.
So it is technically illegal to, uh, did you know this?
Did you know that it is illegal to hire an undocumented worker?
However, the fines are really low, like it's like 600
bucks unless it's repeatable.
Unless you constantly like, unless you are basically seeking to profit
from it over a long period of time.
Mm-hmm.
So if somebody shows up and says like, Hey man, your nanny is illegal.
You like, there's no one's gonna prosecute you.
So effectively, our entire society, United States of America, is designed so
that illegal immigrants can be employed.
And that's where there's a human element to this, which is that
you could change that if you want to end illegal immigration.
Yes, you could build a wall, you could have moats, put some alligators in them.
Like you could do all of that, have turrets with AI to just shoot people
like you could, you could do that.
Or you could jack up the fines for hiring illegal immigrants
and actually enforce that.
Enforce it.
Put Americans into jail.
Americans like Americans put Americans with farms, right?
Like farmers 30 year.
Jail sentence for hiring an illegal, you wanna be tough on illegal immigration,
then you could solve it in a second.
But we don't do it.
Why?
Because effectively the country profits from it.
So that's where you can make an argument that there is, uh,
obviously, um, the entire society is set up to not fix this problem.
And then poor people who have come here, who have come from far away cross
deserts, dealt with various, uh, you know, abuse that comes along the way,
paid their life savings to come to America, to profit off of this society
we've created where, uh, we allow them to work even though they're not documented.
Whereas other countries don't do that.
Like, good luck getting a job in Switzerland.
If you're illegal, as an example, you have to present your papers
at the point of employment.
So we don't, we don't really do that.
We don't enforce that.
On the other hand, president Trump was elected.
Democratically with a majority, and I would argue the number two issue.
Number one was inflation.
I have data to prove this too.
Number one was inflation.
Number two was immigration.
So he was also elected to deal with this issue, and one of the ways he's going to
do it is to deport illegal immigrants.
And so it's a really tough situation, Jacob, because on one hand, the people
who are here illegally, the vast majority of them are clearly just responding to
a demand that we have in our society in the United States for their services.
We've invited them effectively to come here and work illegally,
and we don't enforce our own laws on employing illegal immigrants.
So you have a lot of compassion.
You're like, Hey, man, like they're here because we employ them.
On the other hand, president Trump is not breaking the law when he actually
enforces immigration laws in the country.
So can you really protest against it?
That's where, this is a conundrum and it's one that can really only be solved
with legislative acts in Congress where Republicans and Democrats have to sit
together and effectively they have to give the Republicans what, what they
want, which is a giant, beautiful wall.
I say whatever the Republicans ask for, make it bigger, make it shinier.
Like, no.
I mean, if you are sitting here in 2025 and you're still against the
wall, I'm sorry, I don't know what to tell you, but that's clearly
what's gonna have to happen.
Like just I would, I would just say like if Republicans want a 20 foot wall,
make it a 70 foot wall, like let's go.
On the other hand, the Republicans are going to have to accept the reality
of the society, which is that we don't punish people who hire illegal
immigrants because we kind of need them for various reasons, and we can get
into the socioeconomic reasons why.
But again, if the Republicans were serious about doing something on the demand side.
They would talk about it.
They would talk about how we can jack up jail sentences.
Instead of slapping a business with $600 per migrant, you've
hired $600 per migrant.
Come on.
You know, like you could just say, Hey, CEO of this chicken farm in Idaho, oh,
you donated all this money to Republicans.
Cool story, bro.
You're going to jail for 30 years.
Oh, your business is unviable.
'cause Americas don't wanna work in chicken farms or pick strawberries.
Like, yeah, too bad.
30 years.
Jail sentence, boom.
Done.
So this is where I, I think the only way to solve this issue is that it needs to
be legislated and both sides are kind of.
Wrong, because neither side is really solving the problem at any point.
Yeah.
Jacob Shapiro: I mean, we might as well be waiting for Bigfoot to come,
because if you look at poll after poll after poll since the late 1980s,
a majority of Americans have said, yes, we want immigration law reform.
And this is before you get into the super polarized days of the two.
Thou, like, no, since like the 1980s, since like Ted Kennedy and John
McCain and some of these others were wandering the halls like Americans have
wanted that and they haven't got that.
And it, it goes to show you, um, there's this concept called effective
polarization where, um, I forget who, uh, I, I'll have to apologize
to the researcher who did this.
I'm pretty sure he was at Yale.
Anyway, the, the notion being that actually when it comes to the issues,
Americans are not actually more or less polarized than they've ever been.
It's just that we demonize the other side and then we put in the most
polarizing voices and positions of power.
And they get their power from being angrier and accusing the
other side of other things.
But before we, I, I want to get back to the immigration point, but I don't wanna
leave the media thing just quite yet.
'cause But wait.
Okay.
Go, go, go, go.
Wait, go.
Marko Papic: I just, if I can just, that's not entirely correct, right?
Like that we haven't had any, uh, legislative acts.
We did actually.
And here, here is where if you are a liberal critic of Donald Trump,
here is where you, you know, we do this podcast for just normal
people who are at a barbecue having a beer with an uncle, right?
Like, this is what it's about.
This is what we're arming you with.
Tools.
If you're a Republican, we'll argue with tools to make fun of your liberal friends.
If you're liberal, we'll arm you with the tools for your Republican uncle.
So, if you're liberal, here is where the argument ends.
Honestly.
This is where you, this is where you just end it.
Anybody who says anything, you just go and say, Hey, look up why the
bipartisan bill collapsed in early 2024.
There was one, and then Donald Trump did say to his allies in the Senate,
don't sign on to a comprehensive, bipartisan way to solve this issue
because I need it for the election.
Yeah.
Now again, he won the election fair and square.
He's a democratically elected president of the United States of America.
And if a Democratic collective president of the United States of
America wants to enforce federal law with federal law enforcement,
I don't know what to tell you.
You can't say it's illegal.
You might say, well, it's unfair, it's this and that, but sanctuary cities, that
is a figment of somebody's imagination.
Like you can't just declare a city, a sanctuary city, sorry.
Mayors like, you know, Karen Bass.
Like, Hey, maybe you should make sure we have water in our fire hydrants, you know?
But anyways, leaving that aside, the point is you can't, like
what does a sanctuary city needs?
It means that local law enforcement doesn't cooperate with federal
law enforcement, but federal law.
Immigration law and federal officials are going to enforce it.
So the truth is, president Trump can do what he's doing.
It's legal and protesting it is kind of meh, you know?
Well, well, but But again, but again, but again, sorry.
Sorry to interrupt.
But again, the original sin here, I mean the original, original sin is
that American economy and American voters and American businesses
definitely want the illegal immigrants.
That's the original sin.
But the second original sin is that when somebody tried to do something about it,
a bipartisan bill that you say is Bigfoot.
We had Bigfoot in early 2024, and President Trump told his allies
in the Senate, don't sign onto this bill, don't solve this issue.
I need it to be a problem so I can win the election.
Yeah.
And so that is something out of, in this timeline that I think
you forgot in the introduction.
It's a very important point.
We had a bipartisan solution.
Well, I, I'm not sure how good it was, but like at least
there was the beginning of it.
Yeah,
Jacob Shapiro: there was an attempt because, because because Biden
was an old school legislature and like his biggest skill, whatever
you think about Joe Biden and Yes.
His, his loss of, you know, uh, faculties at the end there and things like that.
Yes.
That was his superpower.
His superpower.
He was, he was one of the old guard, he was one of the only ones left that
could build bipartisan legislation and he did some interesting things in 2021 and
2022, and by 24 he was too long in the tooth and he didn't have the cash there.
But if you look back at the history since the 1980s, I bet you would find multiple
bills that died on the shoals of, you know, a presidential race or maybe new
Gingrich gotten there, or like, you know, all, all the time like immigration.
Is held up at the last minute, even though it's something that people agree on.
But I I, I want to go back, 'cause this goes back to the media point a
little bit, which is, is it legal?
Because I'm, I'm with you up until a point, and I think the media helped
create the story and Trump's response to the media, like it was almost like
a self-reinforcing, um, you know, avalanche of things that happened.
But I don't know that it is actually legal.
And when I, I sat up in my chair a little bit when I, you know,
read the first headline about the Marines, then I was like, okay, now
we're sort of like National Guard.
Like I can sort of get on there.
It's not, it's, it's not perfect.
Like the last time, um, um, the Insurrection Act was invoked was 1992 in
Los Angeles for the Rodney King protest.
The George HW Bush sent, you know, national Guard troops to Los Angeles.
Um, that was taken with the governor's request, but Trump isn't even using that.
He's using something called section 1 2 4 0 6 of the US Code, which
gives the president the authority to call members of the National Guard.
Um.
Of any state into federal service when quote, there is a rebellion or a danger
of a rebellion against the authority of the government of the United States.
And the President can do whatever he wants to repel the invasion
or suppress the rebellion.
This is not an invasion or a rebellion.
So we're already like on extremely shaky ground.
And that's the National Guard, that's not the Marines.
And you start talking about the Marines and I'm starting to think
about the Rubicon, like literally the Rubicon and the deployment of Roman
soldiers against Roman citizens and like, what the f is going on here.
So go, go, go, go.
Sorry.
Marko Papic: Okay.
So, so two things.
Two things.
First of all, uh, to just clarify what is definitely not illegal, it
is definitely not illegal for law enforcement officers of the federal
government to enforce federal law.
Yes.
What I mean by that is that going around and picking illegal immigrants
and putting them in jail, like, sorry.
That is, that's legal.
The federal government, like again, why did America close
its eyes for 45 years to this?
Because everyone profited from it effectively.
This is how we've built this country.
And we don't have the laws really, we don't enforce the
laws against people who hire.
Again, you cannot in most countries in the world.
And I, one of the things I wanna do on this podcast in, because, uh,
I suspect our audience is going to be almost overwhelmingly American,
and, and hopefully that will change over time as, uh, we piss off enough
Americans that they don't listen to us.
Just kidding, just kidding.
Just kidding.
No, but like, I just really want to always use examples from the rest of the world.
You know, illegal immigration is an issue everywhere, but really only
in America does the society close.
Its eyes so much to this reality that it allows the country to
go on hiring illegal immigrants.
I can't tell you how many places in Europe.
You face seriously con, serious consequences for
employing an illegal immigrant.
Like you go to jail, you get fined significantly.
And, and that's just not the case here.
So that's the first issue.
Now that being said, there are laws in the books, and if the president gets
elected promising, he's gonna enforce them as President Trump clearly did.
That's not illegal.
So those ice raids are not illegal.
Mm-hmm.
Yeah.
And if they wanna go into a school or a church, sorry, mayors of random,
democratically held cities, you have no authority to prevent the federal
government of the United States of America from enforcing federal law.
That's just a fact.
So I know that sounds like Fox News segment, but No.
Well, that's where Fox News is right now.
To your point, I. Deploying National Guard over, uh, you know, 14 people
calling in poor Waymo's and then torching them is obviously ridiculous.
The LAPD is probably the most competent law enforcement on the planet in
handling protests because as Tupac Shakur correctly surmised, we tend to blow
stuff up in Los Angeles quite often.
That's just how we celebrate national championships in basketball and so on.
You know, I mean, you wouldn't know anything about that.
No, I wouldn't.
Given that you were once an Atlanta Hawks fan and so hot, but
Jacob Shapiro: thank you.
Thank you for that.
Marko Papic: And now it's how you're even more removed from this,
given that you're Pelicans fan.
But my point is that, so now we can discuss your point.
I just want to clarify that when I said that what happened was not illegal, I
mean that the president of the United States of America can ask his federal
law enforcement to go and enforce federal law, and that's where the
illegal immigration thing comes in.
Um, then the protests happen and then he calls the National Guard, you know.
It's, it's just incredible how far we've come.
So now I'm gonna sound like CNN, right?
We, we sound like Fox News a second ago.
Now we're gonna sound like CNN George W. Bush.
George W. Bush, right?
The guy who like invaded countries 'cause like they were there,
Jacob Shapiro: or, or because they, they, uh, they didn't do it.
His daddy told them to do.
Yeah.
Marko Papic: Or yes.
So like George W. Bush.
So Katrina happens.
You are in New Orleans.
So this is part of, uh, you probably know this much better than me.
Katrina happens.
And, uh,
Jacob Shapiro: oh, and by the way, uh, if anybody from FEMA is listening,
Katrina was a hurricane that happened.
And yes, hurricanes do happen in the United States.
Please get your ax together.
Hurricanes
Marko Papic: spin fast.
Jacob Shapiro: Sorry, go on.
Marko Papic: So, okay, so the Katrina happens and the governor of
Louisiana, for some bizarre reason doesn't call up the National Guard.
I forgot why, but.
There was a delay, and George W. Bush like really wanted to call up the
National Guard and overrule the governor.
And he struggled with this decision.
And one of the reasons that he didn't is because he did
not wanna cross the Rubicon.
Can you believe that?
Like, this wasn't like in 1953, president Eisenhower really
struggled with the morality?
No, no, no.
This was like 20 years ago.
It wasn't that long ago, and it was in the middle of Patriot Act.
It was in the middle of all sorts of ways in which the federal
government expanded its surveillance of Americans and all this stuff.
It's not like George W. Bush was some, you know, Pinco Communist
liberal, like no, no, no.
He was George W. Bush, a NeoCon.
Who did all sorts of things, but he had to reflect on this.
There's a hurricane, it hits Louisiana.
The governor doesn't call up the National Guard.
Should I call it up?
I don't know.
I don't think I should.
I, I don't think I have the legality to it.
And then you've got Donald Trump being like, yeah, let's go up.
Let's get the Marines, let's get the Osprey.
You know, they can repel down and we can like, yeah.
Like, well, and he, and that's, and that's where
Jacob Shapiro: during his first administration, the George Floyd
protest happened and he wanted to do this, and he had advisors around him
push back and say, you can't do this.
And you had the Pentagon push back and say, no, no, no.
The US military is not a police force.
Like we don't go and put down, uh, protests and things like that.
And he said on the campaign trail multiple times, that was a mistake.
I wish I had done it.
If I get a chance again, I'm going to do it.
So there's part of that.
And, you know, to your point about George WI mean, there's a very short
list of times that a, a, a president has deployed the National Guard
against the wishes of a governor or without a request from a governor.
The, yeah, it's the last, the last time it happened.
Was, uh, could we call him an Uber liberal, I dunno, 1965 LBJ.
And he was doing it to protect Selma, the protestors in Selma, Alabama.
Which, you know, that's interesting too, by the way, for the liberals,
because it's like, okay, like a very liberal president doing liberal
things like deployed National Guard into a conservative state in order
to make sure that something happened.
So like there's a weird, anyway, there's a reason that people were
uncomfortable about that because the precedent sets is dangerous.
And we haven't sort of flirted with that before.
But it's LBJ and then it hadn't happened since the Civil War.
Like, that's, that's the list.
So it's like, it's a very, I think there was one in,
Marko Papic: I think it was 1950s as well for, uh, school segregation.
Jacob Shapiro: Was that, I thought that was also in Alabama.
I thought that was with the request of the governor, but maybe not.
Um, I'll, I'll look it up real fast.
I think.
Marko Papic: Well, it doesn't matter.
The point is it's civil war.
Yeah.
And then like two times due to racial, uh, inequalities in America.
Fifties and sixties or maybe once.
The point is it, it has, it, it, it hasn't happened many times.
And the severity of these protests doesn't even come close to the 2020, by the way.
Jacob Shapiro: Yeah.
Oh, and by the way, you're, you're right.
I'm sorry.
So Selma is President Johnson, 1965, university of Alabama integration,
1963, president Kennedy, and of course now President Kennedy's nephew.
Oh my bad.
Six three nephew, RFK Jr. Also just firing entire boards of vaccine scientists.
So there's a Kennedy running around too.
Don't to talk.
But yeah, we
Marko Papic: don't have enough bandwidth to Jacob to deal
with all that's happening.
We'll have to leave the vaccine for later, later.
Hopefully none of our children die in the meantime.
Knock on wood.
Let's move on.
Okay.
Alright.
So I've, I've already gotten
Jacob Shapiro: some hate mail for, so for some very previous short
vaccine takes here, so keep it coming.
I'm happy to, to absorb all of your vaccine hate if
you're a, anyway, go on Marco.
Sorry.
Marko Papic: No, but like, okay, so, uh, I like your point.
Your point is there's this weird duality, dichotomy, you know, like
protesting, uh, protecting protestors.
And now, um, you know, uh, you know, standing aside, em, I will say the one
difference between 2020, the social justice protest that happened, is
that they weren't necess, I mean, not necessarily, they were not targeting
federal law enforcement officials.
Mm-hmm.
Or federal, like federal government.
And what happened over the weekend in Los Angeles is that the protests started at
the detention center downtown Los Angeles, where basically the, the crowd suspected
ICE agents had taken, you know, um, uh, had taken some of the illegal immigrants
that were rounded up in ICE raid.
So you could make an argument if you're at the White House
that you're protecting federal.
Basically, uh, facilities that are literally under attack
because they're federal facilities and they're under attack for
basically enforcing federal law.
The problem here, where that breaks down is that, again, LAPD wasn't
standing aside and letting this happen.
They were intervening and intervening in, in force and with, uh, serious skill sets.
You know, this isn't like, I mean, you know, if there were protests
in like Vermont, I could see why the National Guard would be needed.
But this is Los Angeles and it's, if there's one place in America
that knows how to handle protests and to deal with the situation,
it's LAPD, it's Los Angeles.
And that's where I think the, the argument by the White House really
breaks down and it's a made for TV event.
Now, is it illegal?
Is it illegal for president of the United States of America
to call up a National Guard?
I mean, it's not, I would argue it isn't.
Jacob Shapiro: Uh, but maybe you have a different take.
Can you federalize the National Guard in order to police protests?
I don't, I, I mean, I'm not a lawyer.
We'd have to get a lawyer on here, but based on my reading of the
insurrection, but he's not even invoking the Insurrection Act.
He's invoking, he's invoking, he's not section 1 2 4 0 6 of the US code, which
I hadn't heard of before until I was reading this on the plane yesterday.
And again, I'll just quote it like he can call in members of the National
Guard as many as he wants, but.
When there is quote, a rebellion or a danger of a rebellion against the
authority of the government of the United States, and then he can as
many troops as he wants to repel the invasion or suppress the rebellion.
Yeah, there's definitely, there is no self-respecting court of law that is gonna
call what is happening in Los Angeles, a rebellion against the federal government.
Now, if California secedes like, then we have a very interesting
like theoretical conversation.
We're, we're going there man.
We'll get there, but like this, we're going there, this,
Marko Papic: we'll get there.
This is not that we're getting there.
Jacob Shapiro: So maybe you could use the insurrection act like
maybe you could paper it up.
But this to this to me, is the thing that is disturbing and I think the media.
Honestly shot at SWAT early because the thing that you cover here is the illegal
deployment of US military force to police, uh, you know, us even violent protesters.
Like, no, like, that's not, that is illegal.
That is not what is supposed to happen.
And that is that slippery slope where Trump doesn't care.
He's breaking norms left and right.
All that matters to him is a, that he looks like a strong man,
and b, that the precedent is set.
And I think we should also say, while all this is happening, it's perfect
timing for him, which makes me even more suspicious because while all this
is happening, yeah, the Chinese and the American negotiators are sitting
there and I'm sure the US is basically bending over for the Chinese saying,
we don't want the trade war anymore.
Let's take down the tariffs.
Like, and he gets to look tough.
Let's go there next.
The Elon Trump thing is gone because Elon and Trump are now kissing faces at each
other, and Trump is the man of action versus the pussy weenie liberals who are
just like, yeah, we're gonna sue you.
It's like, it's literally perfect.
And the last thing I'll say before I let you say whatever you want is.
I said this, I re-quoted this on, on XI dunno if you're an Andor fan.
I'm an Andor fan, but, uh oh.
Yeah.
Shout out to I am.
I love it.
Shout out to at, uh, MK tune.
I'm just gonna quote him.
You remember that part in Andor when all those reporters on Gorman made it sound
like the Gormans were very violent and the empire just had descendants, soldiers
to stop things from getting out of hand.
But in reality, the soldiers wanted things to get out of hand.
Yeah.
Like starting to sound like a little bit of a false flag, isn't it?
Because the worse it gets, the more he can deploy, the more he can be the man
of action, the more he can pull the wool over the eyes of his supporters
who could look at what's happening in London right now between the US and
China and just see total capitulation.
That's what I'm expecting anyway.
So sorry.
Go.
Marko Papic: So, so, yeah, yeah.
No, no, no, no, no.
Thank you for that.
And I, I just wanna say one thing, to be fair to Trump, the National Guard
were not deployed to control protests.
You know, for the most part, they stayed protecting the
building, the federal building.
So, to be fair, you could argue he's augmenting, he's letting
the LAPD have more resources so they don't have to No, he's not.
Or, or he's like
Jacob Shapiro: flirting with just how, what, just how far
can I push the line here?
Like, oh, obviously
Marko Papic: no, obviously, obviously he's doing everything you're saying
and, and I don't wanna pivot to that.
I just wanted to like, give just that one defense.
Okay.
One defense is that the, the way that the National Guard has been used thus
far in literal ways on the streets of Los Angeles is that they have been
confined to this one detention center.
Uh, which means that, you know, the LAPD doesn't have to do
that, which is like slow clap.
Thank you.
That, that seems like a very measured way to use them.
And so you are getting the national news like, oh my God, the, the
Marines are in Los Angeles, but.
They have no role in actual crowd control.
Now moving on to your points of why the timing is perfect,
'cause we need to go there.
You and I, we were gonna spend all this time today talking about the Musk Trump,
you know, breakup, which is hilarious.
And it's just so, so amazing.
There's so many things we can talk about here.
Um, we can talk about, uh, you know, you mentioned the negotiations on tariffs.
Mm-hmm.
Where the United States of America is going to make deals, as I've said for the
past six months, we're gonna get deals.
They're not what you think they are, they're made for TV deals.
And then a bunch of people are like, wait a minute, I thought we were going
to put up barriers and make everything in America from a water a, a bottle of water.
You know, like where secretary, uh, Lunik went on TV and said that we should
all drink Aquafina, not Fiji water.
Like what?
Jacob Shapiro: Oh yeah.
You
Marko Papic: do realize like, what are you talking about, man?
Like, and, and, and
Jacob Shapiro: that we should grow bananas in the United States.
I know that.
I know that we're supposed to be objective on both sides.
I can't with Lutnick.
He's such a fricking moron.
Sorry.
Listen.
You don't have to be, I'm gonna be objective.
Marko Papic: Okay?
I'm gonna be objective because you know why?
The best take down of Secretary Lutnick is a Republican Louisiana
senator who I'm sure you're Yes,
Jacob Shapiro: yes.
I was just jumping out.
Thank you for saying this.
Great.
Kennedy, it was great.
Marko Papic: Senator, Senator.
Like you listen.
Just Google Senator Kennedy Lutnick.
If you're not aware of what I'm talking about, dear listeners, go
on YouTube, watch, we'll put it into show notes or whatever it is.
It is unbelievable.
He undresses him the way that you would a child.
Like, you know, like when my son walks up to me, he says, daddy, daddy, why
can't we live on the Saturn daddy?
And I'm like, well, lemme tell you son.
That's what he did to him.
He's son to him.
It was embarrassing.
It was, you're the Secretary of Commerce of the United States of
America, man, and you have no fucking idea what you're talking about.
And it was a Republican senator from the great state of Louisiana
who absolutely dismantles him.
So yes, that's what's the context of this protest?
The context of this protest is that the United States of America is in
the process of choosing the lubricant
in, in 90 trade wheels.
Number one, I'm, I'm gonna push for that to be the title
Jacob Shapiro: right there.
Choosing the lubricant.
I don't think it's gonna get through, but it's too
Marko Papic: good.
Well, mean people are gonna, unfortunately people are then
gonna think it's about tariffs.
We're not talking about tariffs.
We're just saying like, look, president Trump makes deals.
He does.
I don't like the taco trade.
Trump always chickens out.
It's pejorative, it's liberal kind of way to poke at Trump.
Like he's not chickening out.
He's going to get deals.
That will be marginally positive for the United States of America.
But if you are in the Howard Lunik, Peter Navarro camp of isolationism,
you are gonna be disappointed.
You know, like, sorry, Ben Bannon, the Benon Knights are gonna lose.
Duh.
Right.
So that's, that's number one.
Then your other point was, uh, wait, you mentioned the tariffs
and you mentioned Elon Musk.
Yeah.
Like, right?
Mm-hmm.
This was supposed to be the administration.
Trump is empowered by the richest, smartest man alive,
who is kind of like, who?
But like, hey, he's cool.
Right?
So that's gone.
And then the final one that you didn't mention is that the one big beautiful
bill is kind of one marginally sized, but like, yet somehow effective.
You know, kind of a bill doesn't get you off the first time, you know, gotta go
to the shower, you know, but like, eh, it's like, it's, it's not bad, you know?
That's.
Appropriately sized bill.
It's now what President Trump promised during his campaign.
He said 10 to $15 trillion of additional deficit spending.
It's two, two and a half right now.
And it might actually not even be stimulative if you
account for the tar bie.
Jacob Shapiro: Yeah.
You, you've said I, I'm, I'm, uh, like looking at the math, I'm less convinced
of that more and more because it's obvious that he's gonna increase spending
here over the next couple of years.
And then all the reductions happen after he's gone from office and
then somebody else is gonna come in.
So I, I have the, this is probably the first and only time in my life where
I get why Elon Musk is frustrated.
'cause Elon Musk was empowered with the Department of Government
efficiency and this huge task, and he's gonna cut government spending.
And he really like, I mean, he took it, you know, his businesses,
his reputation, like he, he took a significant hit in order to
push some of these things through.
And then, you know, president Trump wakes up one day and is like, by the way, here's
another two to 3 trillion of spending.
So, I know, I know.
You're also thinking from a.
From a market perspective that the market is thinking that it was gonna be more,
but I think there's some currency there.
But I, I would push back against you saying it's gonna be smaller.
That this, like, this is going to add significant amounts to a deficit
that is already unsustainable.
And I think Musk is saying not
Marko Papic: really.
Look, if, even if we take, uh, well, Musk is obviously mathematically correct.
Yeah.
And so are you, like, you are mathematically correct, they will increase
the deficit, but if you look at the chart of the deficit, what this bill does,
it takes it from 6.5% to 7.5 and then it stays there for the next 10 years.
Jacob Shapiro: Yeah.
But, but yeah, if you look at it harmonized over 10 years, but if
you look at the next three to four years, we're boosting more than that.
And then after Trump supposedly leaves office, then it's
gonna dip down below that.
So for the next couple of years, you're actually gonna get
higher percentages than that.
And then you're in this mythical fairy world that the, the next
president is gonna be like, yes, I will sign up for enforcing the Trump.
Like, you know, deficit reductions on entitlements and things like that.
Well, couple things.
Marko Papic: We could have a whole podcast on that.
And I don't think that's a fair world.
That's the world we're headed to.
Like the political zeitgeist of the country is moving
away from wanton spending.
But, but even in, in that interim, if we focus, it's like it goes to
like seven point a half, 8% debt.
It doesn't blow up.
And again, relative to what he promised, he promised a lot of things Jacob,
and he's not getting any of them.
Mm-hmm.
That's my point.
You know, he promised 10 to 15 trillion stuff just relative to his promises.
This bill is may.
And it includes cuts that he did not campaign on.
That's the point.
So you've got three issues right now where it's kind of like meh.
One, you just lost the text.
Putin of America, right?
Mm-hmm.
Gone, uh, is accusing you of being a pedophile on On X Yeah.
On the platform.
He, he owns for what?
Alright, so that's the first.
The second is that all the promises you made about how much taxes you're
gonna cut, none of that is happening.
You know, you went from 10 to $15 trillion worth of tax cuts to 600 billion.
'cause I don't count extending the 2017 tax cuts.
That's not, that's not cutting anyone's taxes.
So no one's gonna have their taxes cut effectively.
Like you, you are not delivering on your campaign promises.
And in fact, you made fun of Nikki Haley for wanting to cut entitlements and
you're kind of cutting entitlements.
You know, not as much as like I. Mosque wants or conservatives
want, but you're cutting.
Mm-hmm.
And then finally the trade deal.
The trade deal where basically like the us you know, he did the Liberation
Day and a lot of his Bentonite fans were like, yeah baby, we're gonna
make bicycles in this country.
You know, we're have John, we're gonna have summer, and, and Oh,
what's, what's a really good name?
Summer And Finn are gonna start working and picking strawberries.
You know, like, that's not gonna happen.
Those things are not gonna happen.
America's still gonna trade because the irony, and I said this on our
last podcast, podcast, the irony of all of this is that if you want to
collect revenue from tariffs, you kind of need trade because tariffs
are attacks imposed on imports.
So America has to continue to trade with the rest of the world
if we're going to actually generate revenue to offset the deficits.
So the point is that this administration is starting to
look less and less populist.
And here's where I wanna say something.
I know we are.
How many minutes?
We're 42 minutes.
We're always at a 45.
We're always 40.
45 minute when I think the biggest takeaway comes, I'm sorry, listeners.
This is, you know, this is just how it is.
This, this is the, if you're an advertising, this is
Jacob Shapiro: the smic structure of our podcast.
Ooh.
That's a
Marko Papic: It is, it is.
And if you're, if you're at a, if you're a, if you're an
advertiser, it's a great thing.
'cause everybody's gotta like wait until the gym comes later.
Right.
So here's what I'm getting at.
This is a playbook we've been watching in Europe for the last 15 years.
There is nothing new to what Trump is doing.
Nothing.
So for the past 15 years in Europe, anti-establishment populist, I don't like
the term right wing, but fine, right-wing.
Right wing, but it's not fair 'cause it's, there's a ton of left Wink.
Mm-hmm.
Left wing populist parties in Europe.
True Fins, Swedish Democrats, Marine Lapin, Git Builders, uh,
Podemos, Vox, five star movement.
Fratelli, Talia, Leor, Lego, what?
Whatever.
There's a ton of them.
They've all followed the following model.
They start campaigning.
European Commission is a bunch of elitist, you know, bureaucrats.
They're not gonna tell me how much I'm gonna blow out the budget deficit.
I'm gonna spend as much as I want.
Structural reforms on retirement.
That was evil.
Increasing retirement age.
We're gonna reverse all those policies that the elitist imposed on you.
Trade.
Trade relationships.
Less America, more Russia.
Right?
Lots of these guys love Russia.
Mm-hmm.
And then Euro area.
We don't want the Euro, we wanna leave the Euro.
So those are kind of the socioeconomic policies that a
lot of these populists walk into.
And then they come to power, or they become part of a governing coalition.
And the bond market riots yields go up, borrowing costs go up, equities
go down, the economy slows down.
People start worrying about their retirement savings.
They start worrying about their jobs.
And suddenly, suddenly all these populists, anti-establishment,
far left trotskyite far right, neo fascists suddenly enjoy the soft
leather, hand stitched leather in their government issued a eight saloon.
Suddenly they like the way that their suit.
Crunches with that smooth journeying engineering, the soft
closing of the door sounds nice.
They start liking it.
They like the smell of power.
They like being in charge and they don't want the society to collapse
so that they can have their, you know, like anti-establishment
revolt, and then they start migrating to the middle on every issue.
That actually matters to the pocketbooks of the people who they now rule or are
part of a coalition to rule, except on one issue, which is immigration.
Boom.
Instead, not only do they keep their policy, they tripled down
on anti-immigrant policies.
Why?
Because immigrants don't vote.
You know what I mean?
They don't vote.
And some asylum policies have gone outta whack across the western world.
Like facts, you know, like, what are we supposed to do here?
This is a fact.
Um, and so it's an easy win.
So when you lose your credentials as a populist, as a man or woman of the people,
when you lose those credentials on every single issue, how do you maintain them?
Well, you maintain them by tripling down on anti-immigrant policies.
That's the way to do it.
For example, Italy just had a referendum on citizenship and the Prime Minister
Georgia Maloney, effectively didn't want to say how she was gonna vote.
She didn't even wanna vote.
She showed up at the voting booth and did not cast a vote.
And by the way, this was not something to give everyone
in Italy, like a citizenship.
It was just like reducing the number of years from 10 to five, like very
modest changes on citizenship in Italy.
And you know, like the.
By the way, this is not about illegal immigration, right?
These are people in Italy who are, who are like, who working
and speak Italian fluently.
And, uh, and, and she was still opposed to that referendum, but
George Maloney is not, I'm sorry for Trump fans who might like her.
She's a centrist as it gets, man.
Like she's maybe the most competent policymaker in the entire western
world in terms of like navigating the markets and being fiscally responsible.
And you know, like George Meloy, I mean, she's basically a member of
a neofascist party for tele deity.
No, it doesn't matter.
She has become completely establishment, completely 180 degree
turn for that party even on Ukraine.
Even on foreign policy.
Well, she, she's also,
Jacob Shapiro: she's an interesting, she's more interesting than most of them because
she's always been anti anti-Russia.
Like she has taken, she's like a weird mix of all these different
things, and she's always had more of a head on her shoulders, which, you
know, you said Fratelli Italia, like she's the sister in Fratelli Italia.
Like, she's the one who actually, like, she, she's always been a really,
really compelling figure because she actually, I think, understand she is,
I, I think most of the people you're talking about, it's instinctual.
They sort of move that direction because they had, they have no other choice.
Whereas my impression of Maloney is she is one of the few self-aware
politicians who was like, no, no, no, no.
I, I know where I want to go and I know how I want to get from point A
to point B, and I know which levers I have to pull and whose ass I have to
kiss and where I have to be seen and the right balance of all these things.
No, that's fair.
Like she's a, she, she's a, a head the cream of the crop.
Marko Papic: But, but, and at the same time on immigration variant immigrant.
Yeah.
And very successful in pursuing that.
So the, so I agree with you.
I, I, I think what we should do, by the way, for one of our next segments
is we should rank policy makers.
Yes.
Jacob Shapiro: We should.
Yeah.
Marko Papic: Trade value.
Yeah, trade value.
Oh, trade value.
Right.
Jacob Shapiro: I can't wait.
If you
Marko Papic: could trade your, your president for, for another, oh God.
Jacob Shapiro: That's so good.
Let, let's do that.
We got it.
Marko Papic: I mean, I'm taking, I'm gonna, I'm gonna announce
my first pick right now.
Georgia Maloney.
I think she is absolutely crushing it on every, like the way she plays Trump.
I mean, she's just like so good.
She's so good.
Now the point still stands though.
We've seen this for 15 years in Europe.
Like I work with investors and clients in finance and they come to me and
for 15 years I've had to answer this stupid question, will Europe collapse?
No, it won't.
It will not collapse.
They're all faux populists.
Faux.
They're faking it.
Except alternative for deland has not actually changed its policies
on a lot of this stuff, but a lot of these other parties have, and I
think that we might be witnessing it.
This is how the protests in LA might be profound.
Jacob, we might be witnessing actually.
A shift in the Trump administration.
This may allow, so you are making fun of the Trump administration when
you say like, Hey, all this chaos is going on and they're sending the
national guards to la What I, what I see it as almost as a positive because
it allows the big man to be big.
It allows the populist anti-establishment, you know, white House to pretend there's
still populist and anti-establishment, but actually they start cutting deals.
Yep.
That a lot of liberals are gonna make fun President Trump for.
But at the end of the day, like deals are fine, deals are good.
Yeah.
He promised the moon, he's gonna get us to the roof of the house.
Who cares?
At the end of the day, he might be pivoting towards much more centrism.
Than, uh, that people think, tell me why I'm wrong.
No, take the other side.
Jacob Shapiro: Well, I'm not gonna take completely the other side, but I, I have
sort of three things to throw in there.
The first is just an aside, you're right about a FD but what's been
interesting about the German context is that the C-D-U-C-S-U basically took,
like, took that part of the a FD the part that would move to the center
and was just like, okay, we're gonna take that for ourselves now so you
can sit out there with the crazy shit.
And now this E-D-U-C-S-U has rebranded, sort of more like, has taken those things.
So it's like an interesting centrist party that is, and, and we'll see if it works.
The other thing on the deals is, and this is, you know, one of those
areas where things make sense up to a point and then it becomes farcical
again because, you know, there are these US China trade talks coming.
You and I have both been on this, that this is gonna be something that
gets done sooner rather than later.
Meanwhile, the US Japan trade talks continue to be absolutely abysmal.
They just had their fifth round and the Japanese negotiator
came out and said, we've agreed.
Uh, let's see if I have the quote.
Um, uh, 'cause I want to get him exactly right because it
was such an amazing quote.
Um, we have not found any point of agreement.
On anything.
They're not agreeing on absolutely anything.
And that's like your closest ally there.
So at the same, and you know, there was also that reporting about how they
literally paused a trade negotiation because Lutnick and Cent, and I forget
who the third one was in the room, but somebody else was in the room too,
and they had to pause because none, uh, Jameson Greer, the US uh, trade
representative, they were all in the room negotiating with the Japanese
and they had different positions.
So they had to tell the Japanese to stop for a second so the three of
them could go like, figure out what they were actually talking about.
Like, there's just kind of an insanity there.
But I, I want to go back to the, the point about immigration, and this is actually on
my mind 'cause we haven't said this yet.
The Willamette River is behind me.
I'm in Portland.
I'm speaking at a forestry event, timber event here in Portland,
um, in just a couple of hours.
Um, and as you might imagine, um, this is a big issue for them, not because
immigrants are cutting down trees or anything like that, but because the
timber industry is thinking about real estate and home construction
over a 15, 20 year time horizon.
And it's been a really good last 15, 20 years.
In part because in the early 1990s, you had a lot of immigrants come to
the United States and even the illegal ones, eventually they stay here and
eventually they wanna live in houses.
And so if you have population growth, which is us, which for, if you're pro
these sort of cyclical things, you want to have lots of natural births, but you also
want to have lot, lots of immigration.
So if you look at the early 1990s, mid 1990s, you could say, oh, well,
natural births were falling a little bit, but still relatively high.
And you had all these immigrants that were coming to the United States.
So you get this period where there's gonna be a lot of demand for
lumber over the next 15, 20 years.
Now I'm supposed to go to this audience and tell them, well, so they want to
know over the next 15, 20 years, what are you thinking about these things?
And most of, not all of 'em, I'm gonna make some contrarian arguments to them
about why they should be optimistic.
But most of the data.
Sucks.
And this data that really sucks is US demographics because US births have
fallen off a cliff and we actually had a really high number of international
arrivals last year, but it's making up for a couple years of none.
And you can imagine after the travel ban and President Trump tripling
down in immigration that these things are gonna go away in general.
So I think it's easier for the Europeans to to crunch on.
Immigration in part.
'cause you know, they have, it's the gift that keeps on giving
Angela Merkel lecturing the rest of Europe on being moral because
they aren't taking their migrants.
And also the nature of those migrants.
Like, yes, some of them are just hard workers, but Europe's a lot more exposed
to jihadists that are coming up through the Middle East or things like that.
Or folks that are, you know, not bringing tangible skills but are literally
just looking for anywhere to go.
Whereas the US.
Sorry to be crude about it is getting a higher class of migrant
that is coming to the border.
You're getting in, you know, countries in South America, whether it's Ecuador
or Columbia or Venezuela, like people who are skilled and educated and very
good at what they do and escaping regimes that have become authoritarian
or they've lost their political position.
And so they're coming to the United States and they can do like everything
from your menial labor all the way up into, into some of these things.
And I guess the point I'm just making is like, it seems to me that
President Trump, it's, even with the deals that he's making, it's not
gonna look good for the US economy.
And if you're gonna triple down on immigration too, which has always been
a US superpower, our ability to attract the best, our ability to integrate them.
Um, and you're going to sort of knock that out too, like then all
of the, the growth figures over the next 2, 3, 4 years and even longer.
Look really bad.
So I think that's the pushback.
The pushback is not that the playbook is not gonna go the way that you think it is.
I think that's exactly right.
And I think that President Trump pulled a rabbit out of his hat because he gets
to be the law and order president now, and he is gonna go after immigration,
and he is got lots of support for that.
But in doing that, combined with all the other things that he's done, like, it just
seems to me that like the US macro picture goes from worse to worse every single day.
Because if you're not gonna fix this thing, and like you're gonna have interest
rates going up and the dollar is gonna continue to decline and like, like you
just put the picture, the macro picture together, it starts to look very grim.
So I guess that's the pushback.
Marko Papic: Yeah.
I mean, uh, I mean, look, that that might be the case if President
Harris was in the White House too.
Jacob Shapiro: Not on, I think that not, not necessarily on migration.
Marko Papic: Yeah.
Uh, I mean the problem.
Migration.
Is that and not
Jacob Shapiro: on
Marko Papic: trade?
Well, I don't know.
Jacob Shapiro: Not on trade and not on migration.
I not, I'm not saying President Harris would've been great.
I'm sure she would've had her fair share of mistakes.
They would've been entirely her own, but they wouldn't have
been this cocktail of mistakes.
Marko Papic: Yeah.
So, so I agree with that.
It's just that like, I think you're speaking of secular issues that, um,
like, you know, I think there's a lot of secular problems that the US has.
Uh, the number one being that the deficit is too high, that the public sector is
effectively crowding out the private.
And I think that that issue, uh, is truly bipartisan.
Mm-hmm.
If you are searching for a bipartisan, for a hope for bipartisanship,
it's in the fiscal deficit.
Like that's where it happened.
Um, but yes, no, I, um, what I would say is just that I think that when I
say that President Trump can move to the center and kind of shove under the
carpet some of his, uh, populism and anti-establishment rhetoric and trade, um.
I think that this issue will allow him to do that.
That's it.
Now, it, that pivot doesn't mean that you erase the scars that you produced
through the first three months of your presidency or six months now.
Um, so yeah, I mean, for sure.
Yeah, that's, and remember
Jacob Shapiro: like he did a phase one US China trade deal in his first
administration and the Chinese lived up to roughly, I have the number right here.
58% of their commitment.
Ak it wasn't a deal, to your point, it was a TV deal.
It's, we sign a deal one day and we say there's gonna be X amount of trade
and then there's not gonna be, and if you look at how China's doing things
like, I don't think they're gonna like actually follow, they'll follow through
on some things, but they're gonna vertically integrate and create domestic
champions and have self-sufficiency.
The other thing, listen, and I know you want to push back, but, um, Robin
Brooks had a really good, he, he, he.
He had some really good data that he put out just this week where
he looked at US China trade, and it's down, if you look over the
first like six months of the year.
But you know where trade is up, like Chinese exports are up, they're up
to Singapore, they're up to Thailand, to Thailand, they're up on Vietnam.
Like, like trade is like water.
So like Chinese goods are actually probably still gonna
get to the United States.
They're just gonna come through trans shipments markets.
And unless you erect full bare, like the 70 foot tariff wall on
all sides of the United States, like the stuff is gonna get in.
So like, even there it's like, uh, but my point is just that, yeah, those
scars, I think like China's gonna say one thing and then in the meantime it's
gonna be like, oh, and we're creating our own semiconductor industry and
we're creating our own biotech industry.
And eventually once we have these things and we don't need you anymore,
like you will encounter our Great wall and, and you'll enjoy it.
Marko Papic: Well, so, okay.
Couple of things on that.
I think that phase one deal was called phase one because it was phase one
and I think that it could have been a great deal, but COVID happened.
Yes, COVID and, uh, I mean.
And I know I'm parroting what President Trump says, but I'm parroting it
because it is correct objectively.
And then Joe Biden took over and did not start any negotiations
with China over any trade.
In fact, he just kept putting tariffs.
So why would it, it's just not fair to President Trump and Robert Lighthizer.
What happened with that deal?
I mean, like they negotiated a deal.
China's not gonna keep buying soybeans and natural gas in the middle of a pandemic.
And then when the pandemic ends, there's a different president in
the White House who doesn't engage them in any conversations at all.
So why would they abide by the phase one deal?
And this is somehow, like, this is somehow put on President Trump's
balance sheet as his error.
But why It was the Joe Biden pre uh, presidency.
That refused to engage the Chinese with any negotiations.
Why?
Because they were afraid that the Chinese would say yes, this is
the irony of the Democratic party.
They cannot make a deal with China.
'cause if they do, any deal they make, even if it's incredibly good
for America, will be seen negatively domestically because they will be seen
as, you know, defeatists and you know, basically not good enough of a deal.
So what I'm getting at is that it was very difficult for the Chinese to abide by
the phase one deal because they expected there to be phase two, phase three.
And Joe Biden administration, they came in and they were like, nah, look, we can't,
domestically, we can't deal with you.
So I think it's an unfair, um, you know, it's an unfair
argument that phase one sucks.
And I hear this a lot, I hear this a lot from both conservatives who say that
you cannot make a deal with China, but you also hear it a lot with liberals who
both say that you cannot make a deal with China and that President Trump is weak.
The second thing I would say is that I think that this is where.
The Mennonites are going to eventually self emulate.
This is where, no, this is where eventually the reality of the planet
we live on is that you will absolutely have to continue to trade with China.
Like that's the reality of our debate that we had last time.
Like, you cannot stop trading with China because no matter what their
intentions are, because if you do, your own allies will come in and undercut you.
Like France is not gonna stop selling Airbus airplanes if you say China's evil.
And I don't wanna sell Boeing airplanes.
So America has to trade with China.
It has to, the question is, how is it going to do that?
And Donald Trump is quite frankly, the only hope that the US has to
negotiate with China because the rest of the Republican party is so full
of, uh, like national security hawks, but at an idiotic level, right, that
don't wanna engage with China at all.
So people who think that buying a bicycle from China.
Is a national security threat.
Okay.
So that's what I'm talking about.
Mm-hmm.
And that the Democrats, the Democrats who understand the
mathematics, their problem is that they're politically extremely weak.
So they can't engage China in meaningful trade talks because they're
afraid of how to sell the deal they might make with China domestically.
So it's funny, but Donald Trump is actually the only human
being on the planet that can actually make a deal with China.
That's not halfway bad.
And the reason I see that is that it's perfectly fine for America
to keep buying Chinese goods.
And yeah, it's perfectly fine if those goods are, then you know that revenue
is taxed by the Chinese Communist Party and they build hypersonic cruise.
Miss sells with that revenue.
That's how the world works.
As long as America gets a fair deal where the Chinese are also buying US goods, and
that's what the Lighthizer approach was.
Phase one was like, Hey, buy some of our commodities.
I called it at the time, pejoratively a medieval trade
Jacob Shapiro: deal.
Mm-hmm.
Marko Papic: What did America get from China?
Like, oh, buy our soybeans.
Whoa, great.
But the phase two is about, Hey man, you do not import any services from the us.
That is where we have an advantage.
The US has an advantage in services.
You have an advantage in like widgets and consumer electronics.
Cool, we'll buy your consumer electronics, but you can't stop our,
you know, insurance companies coming in and doing an m and a with yours,
like Geico should, should be allowed to come to China, buy a bunch of, you
know, poorly run Chinese insurance companies and like, boom, there you go.
That would be beneficial.
So that's where I think that cracking China open could be very beneficial
to the US and to the relationship.
Um, and I think that that's where he's headed and that's why I
think what's interesting is that negotiating with China first is a
brilliant strategy and here's why.
Telling Vietnam that they're not allowed to take Chinese.
FDI.
That's stupid.
Vietnam is going to laugh at your face.
So is Indonesia, so is Malaysia.
This was the Stephen Iran approach.
Like people owe us for our liberty, so they're gonna have
to like, make a deal with us.
Nobody owes America pretty much anything unless you're South Korea.
Israel, Ukraine, maybe Estonia.
Who did I miss?
Uh, Japan, Taiwan, Germany, may, no, Japan is a nuclear power.
I'm not even like Yeah, if they wanted to they have nukes.
They're fine.
Look, my point is it's, there's very, very, very few countries in the world they
can actually like us, can actually bully.
And so what President Trump did, instead of going with the Howard Lutnick, Peter
Navarro approach, he was like, okay, cool.
You guys don't wanna make a deal with us to keep our Chinese FDI out.
They, i'll undercut you because I'll negotiate with China first.
I'll make a deal with China.
And so that's, I I do think that there's like, that is a smart approach.
Uh, now.
Does he have a lot of, uh, weapons against China?
No, I agree with you.
The US is gonna have to do a lot of bending over here, uh, or, or kowtowing,
however you wanna describe it.
Um, so that, that I agree with, uh, but I don't think that it's
stupid to make a deal with China.
No,
Jacob Shapiro: but, but I think you're onto something with what you said about
immigration because you know, if you had asked me even eight weeks ago, like
the bipartisan issue that you could get both sides to agree on and which it
has been a bipartisan issue now since roughly 2015, is that China is bad.
And what we're talking about here is the Trump administration saying,
uh, like maybe China's okay, can we take it from China being bad?
And both sides hating China to, Hey, immigrants are bad and, and China's okay.
'cause we're gonna make a trade deal with them.
'cause we need to trade with them and don't look too closely, abandon
all the other guys the problem.
Marko Papic: No, I hear you.
I hear the problem is that China is bad is for a children's book
that's like seven years, like.
People in Washington DC who say that have a mental for, uh,
like aptitude of a 7-year-old.
Jacob Shapiro: Yeah, which I think also probably describes the median
voter if, if you look back at Pew data, one of the really interesting
things here, and this, this goes to a larger conversation about how like
top-down political views eventually make their way to the median voter.
Like if you go back 10, 12 years, um, older people were always suspicious
of China 'cause they remembered the Cold War and China was communists
and they remembered Mao or stories of MAO or things like that.
But younger gen, the younger generation in the United States actually liked
China, like had no negative feelings about them, didn't remember the Cold
War, weren't thinking about communism.
And if you trust the data on the Chinese side, it was relatively true.
That has changed over the last 10 years and it's changed, I
don't think, because young people suddenly decided to hate China.
But because they have been fed an unceasing diet, to your point
of the 7-year-old point of view.
And it's one of the only things that they get any kind of bipartisan agreement
from, which is China's a threat.
And this has been a, this has sort of been a, a refrain in US politics for
a hundred plus years that China's a threat and they were the original, not
the original immigrants, but like, you know, you think about what happened
in the early 19 hundreds out west, um, with Chinese immigrants, um, and all
of that sort of dynamic there as well.
So, no, I, I hear you.
Yeah.
So
Marko Papic: I hear you.
But I, but I would say two things.
First of all, um,
there can be a bipartisan consensus that, you know, we should all go to the moon
and live in its craters, but you cannot do anything about it 'cause it's insane.
And so what the United States of America has now found out over the
last eight years is that if we don't live in a bipolar world, if you don't
have your allies supporting you, then saying China bad is vacuous.
In the 19th century, people understood the reality of multipolarity, which is
you can have an adversary and you still have to trade with them because if you
don't, your own allies will undercut you.
This is a very important game theoretical dynamic that you know,
quite frankly, I described like six years ago, people thought I had
three heads when I described it.
It's been correct US has continued to trade with China.
Actually it's increased its trade with China over the last
five years despite a consensus.
Why?
Because you cannot unravel this relationship quickly.
In fact, in fact, you trade with your enemy in a multiple or ordering
of the world because the French, the South Koreans, the Japanese,
the Japanese who are right next to China, supposedly at risk of war with
them, the Japanese are not gonna stop selling goods and services to them.
And that's because geopolitical power is based on material wealth.
To accrue that material wealth, you need to actually trade with your adversary.
So I think that China is bad meme.
It's a meme, it means nothing.
And you cannot actually do foreign policy or trade policy based off of it.
Well, no.
If it meant, on the other hand, if
Jacob Shapiro: it meant nothing, then he wouldn't have to do the pivot to
immigration because like his base and a large swath of the American
electorate does think China is bad.
And he's been selling that since the first term.
So he does have to do some, some like, um, some PR management around that.
Because if he's gonna make a deal with Xi Jinping, he has to at least, and
it doesn't have to be much like he has shown that he can do it fairly easily
with the Magac crowd and his supporters.
But he does have to just say like, Hey, you know, I got the deal.
Like he kowtowed to me, like I'm the guy.
China's with us now.
Like they've made the deal.
Like they have to make that move.
Marko Papic: The second thing I would say to you, and this is more controversial.
But I think that the American view of China has peaked in
terms of how negative it is.
And actually the pure research, I'm looking at it right now, the pure
research study that you point out, uh, it basically negative view of
China was, uh, it was 50 negative, the 55 negative 35 positive in 2014.
And then right around when he started making those deals,
it kind of actually narrowed.
Mm-hmm.
And then COVID just absolutely exploded to negativity.
Right.
It's actually rolled over.
That's good.
Now it's still in the seventies, but it's gone from 83 to 77
over the last three years.
And the favorable view has gone from 14 to 21%.
So I think we've seen the peak.
I don't think it's gonna go down to 50 50, but it's interesting.
Yeah, it's interesting that there is a decline, like the number
of, uh, people who believe.
Who have a very unfavorable view of China in America was in 2024 was 43%.
The varies down to 33%.
So that's a significance decline.
Um, and I think part of that, by the way, part of that is
that Trump is the president.
And I think part of that is that Trump understands this multipolar dynamic
that in a multipolar world, China's clearly an adversary of the US.
And to be fair to the Chinese America is clearly an adversary of China.
But that doesn't mean that you can decouple.
It's just impossible to do that
Jacob Shapiro: Well,
Marko Papic: and, and, and it's impossible because of the multipolar
world, unless of course the rest of the world decides to follow America on this.
But it would require China to do something like invade Taiwan or be
extremely negative in some way, or like to change the dynamic of the planet.
And so that's where I think the deal is inevitable.
And the weird thing that most of our liberal listeners don't want to hear.
The truth is that only really Trump can make a deal with China, just
like only Nixon could go to China.
As the old adage goes,
Jacob Shapiro: yeah, the the Democrats.
Have been stuck on China as an issue literally since FDR, you
know, sort of picked the wrong side.
And, and, uh, Truman picked the wrong side on the Chinese Civil War, and it's been
a bugaboo for the Democrats ever since.
Like, you could tie the decisions in Vietnam to the Democrats, insecurity
about their decisions about China in the Korean War, and they just,
they have not been able to clean out the skeletons in their closet.
Um, one other thing I want to, I wanna say, and then we can either
go here or then we should talk about California secession, which is this
also what you just said underscores why it's so important maybe for the
Trump administration to get a deal.
Now.
I reject the notion that he thinks the world is multipolar.
I will, I will go with you.
That he has an instinct for where power is and that he could see that China is a big
power that he needs to interact with them.
But I, I don't think it's like intellectually codified that way.
I think it's just instinctual.
But you're right in the sense that US and China, they're
trading more in an absolute sense.
It's going much.
And that China's actually a bigger share of US exports in a lot of different
areas than it was even five years ago.
But.
That's not true for China.
China's been reducing its dependence on the United States.
So even as it imports more, the US share of some of those things has gone down.
So if you're looking sort of since 2008 mm-hmm.
The United States has become more, dependent is the wrong word, but more
exposed to exports and trade with China.
And China.
While it's still huge, it's still a huge vulnerability enough that
they have to make the deals like they have to be at the table.
They have to make a deal here too, for the things that are going on in
their economy, but the graph is going in the opposite direction for them.
They have been successful at very slowly diversifying from the United
States, finding other export markets, building up vertical champions.
So if you keep going, if you like extrapolate out, the United States
is gonna become more dependent and China will become less dependent.
Which to your point is maybe why the United States really has to say, look
like this is our last, it's, it's not so much about, you know, it's only
Trump can do it, but this is the last moment where maybe you have enough
leverage to make the Chinese take you seriously in a trade negotiation.
Literation like this might be the last chance, but that's 'cause if you don't
do it now, five, 10 years from now, yeah.
There's probably not a deal that you like that is gonna be, is gonna be had.
Marko Papic: Just to be clear though, um, when you look at the data, a lot
of their FDI is going into Vietnam and Mexico so it can access us.
Mm-hmm.
Jacob Shapiro: Yeah.
Marko Papic: So it goes both ways.
It does, it goes both ways, right?
US trade imbalance with China has massively corrected, but it's trade
balance with the rest of the world continues to be negative because this
is all Chinese trade going from Vietnam.
So like, but that, that means also for China, that final demand
for China is not changing yet the final demand remains in the US and
Europe for their goods and Japan.
So, you know, like, and, and especially because they have not done
anything to boost their consumption.
Mm-hmm.
True geopolitical sovereignty.
Like if Xi Jinping is listening, turn the TikTok camera on.
Okay.
And very appropriate that it's TikTok camera.
Yeah.
Very.
Um, president Xi, you want to be independent, you wanna be sovereign,
then you need to do what you don't want to do, which is boost consumption
in your own country, over capacity, over production, the stuff that
rankles the west, the fact that you don't import enough Western goods.
This is all a product of an unbalanced macroeconomic feature of China, which
is that people don't consume enough.
So what I would say to you, Jacob, is that, uh, China hasn't
really, really shifted where the final demand is coming from.
It's still America and Europe.
They have just kind of like diverted it, but the final demand is still there.
And also their own demand in internally hasn't been supported.
Now, the irony here is that as China boosts its consumption, which I
think it will have to just because of macroeconomic amount as it does that
you might say, aha, they're gonna buy more Chinese goods and so on.
But like, nah, I think they'll still buy more.
Like if they boost their consumption as much as I think they need to in order
to become truly sovereign, they'll still import more from the US and Europe.
Now they'll.
They'll buy a ton more Chinese goods for sure, but the trading balances will
actually correct in a positive way where everybody can kind of sink kumbaya.
Uh, nonetheless, we kinda like went off, uh, from immigration
to trade because, you know why?
Because that's where the geopolitical, I think, uh, gravity takes us
in every conversation we have.
We end up going back to these trade negotiations and the
rebalancing of the world.
And I think that it, it's just, you can't escape it.
Right.
We started talking about immigration, what was going on in la but we
can't escape talking about this issue 'cause it's so important.
Well,
Jacob Shapiro: and this is the great, I mean, geopolitics has plenty
of blind spots and if you only.
Use geopolitical analysis, you will get some things wrong, but this
is the great virtue of geopolitics and the way that it cuts across
disciplines and connects things that on the surface don't seem connected.
Like there is absolutely an inextricable.
Have you seen has, I would challenge, uh, listeners, if anybody has seen anyone
analytically tying what's happening in Los Angeles to the US China trade
deal, like deal making that's happening.
Like that is the first place my brain went and all I'm seeing from the media is, oh
my God, it's the end of Los Angeles as we know it in the United States coming apart.
This seems like, no, no, the.
All of these things are interconnected, and you have to be a very interconnected,
you have to be a deep generalist and have enough, it's this weird combination
of humility and arrogance to say like, you know what, like, I know enough
about all of these different things to try and create this map of connections.
And maybe I can start ascribing causality to some of these things could, because
most people will just stay in their lane.
The immigration expert will stay in their lane and the trade expert will stay in
their lane and the California politic, like, you know, you have to connect
all these different things together.
But let's close on this, um, with, with our last 15 minutes here.
Um, you sent me some stuff about California potentially seceding.
Um, I don't think this is gonna happen anytime soon, but they are trying to
get a question on the 2028 ballot, which would be, should California leave
the United States and become a free and independent country if at least.
First they have to get half a million signatures.
If 50% of registered California voters cast ballots and it passes
by 50%, then there can be a study about whether that's gonna happen.
So it's not like these things are gonna happen like imminently or in
real time, but we should talk about the notion of California secession and
about the idea of secession in general.
I don't think it's a zero, and I think you were right to send it to me.
Marko Papic: Yeah, so I think, uh, you know, this is, you know, I can defend
President Trump with a lot of different things, but I think that where, uh, and
this is not just his fault, obviously it's fault of the left and the right,
but I think that if you want to think about the greatest danger to the United
States of America, it's not the deficit.
You know, it's not China, it's not any of these issues.
It's really itself.
And so, uh, the last time, as you said, national Guard was, I. Invoked
by the, uh, called up by the president against the wishes of the state
was the issue of segregation, which fundamentally was what the Civil
War was about as well on some level.
And now also also by the way, about
Jacob Shapiro: low class labor that was paid nothing that everybody
utilized, including the north.
Like there's a nice little throughput there too.
Marko Papic: Oh yeah, that's, that's a very good point.
Yes.
And underclass, right, uh, uh, in the labor market.
Uh, great tie in.
Um, and so, yeah, I think that, uh, this is another example, another example where
the US federal government is trying to do something that the states don't like.
And in this particular case, it's about immigration, but
it could be about anything.
You know, it could be about the, uh, other issues.
And don't forget, don't forget one of the things that launched this whole thing on
Friday, last Friday before the protest started against ice, there was this, uh,
news item that we now forgo, forgot, which is that the White House was seriously
discussing withholding federal funds.
From California because of the transgendered athlete who competed,
and I think she won some, uh, athletics championships in California.
And then Governor Newsom retorted, I don't know if you saw this on Friday.
It was like, it, it flashed across the news on Friday and was quickly
forgotten because LA got it.
It went into this, um, whole situation, but covering, Newsom returned it
by saying that he's gonna withhold some 70 odd billion dollars that
the California pays into the IRS when it collects federal taxes.
Hmm.
So California, in other words, is definitely what we would
call a, uh, uh, what is it?
Um.
A have, there's have nots and have states, right?
California's a have state, and I, I know people love to make fun of California,
but boy, do we make money here.
Jacob Shapiro: Well, not, not just California.
I mean, Los Angeles is, I had this data pulled for this for exactly for this.
It's the second largest city in the United States.
It's the 24th largest city in the world just ahead of Moscow.
The greater Los Angeles area has a GDP of over a trillion dollars.
That's larger than the GDP of Switzerland or of Poland, or even Argentina.
So just the Los Angeles area that you're picking a fight with, with right
now would be on the menu of global powers in a truly multipolar world.
Marko Papic: Right?
So, so this is where I think, you know, why do I say that?
I, I say this because forget the National Guard.
Forget the Marines.
There was a news item on Friday that was actually worse, which is that
President Trump says, I don't like that a transgendered athlete competed in one.
I'm gonna withhold federal funds.
Governor Newsom says that I would hold the money we pay into the treasury,
forget ice, forget National LA Guard, forget the protest.
This happened without any of that.
It happened because one transgendered athlete competed and won some stuff.
So the threshold for people to lose their shit is very, very low.
You know, it's like a couple, you know, like a healthy couple has fights all
the time, but an unhealthy couple like fights over really dumb things and
endos fights escalate right away within like five minutes to like divorce.
And that's what this was like.
One human being who happens to be transgendered wants some stuff.
I'm gonna withhold federal funding.
Well, no, I'm gonna like pull the plug on California financing
the United States of America.
What?
You know, so.
So I think that this is very unhealthy and so when you made fun of my Canada pick.
In the top 10.
What did I say to you?
Jacob Shapiro: I, I don't remember.
Marko Papic: It was a hedge.
It was a hedge.
Because my view is that the probability of this stuff getting really bad
in the US is very, very elevated.
And I can tell you that the people that are the happiest, other than the media
will love this stuff other than the media.
I think that the happiest people in the world are in Beijing and Moscow
and, and and elsewhere because these kind of fights are real.
And I think it's very dangerous.
And, and if the US were to kind of start on this path, like that is a redrawing
of geopolitics at a level that I think most people can't comprehend mentally.
Now, how does it get resolved?
Well, I think that it's just in the world we live in today.
Perhaps what needs to happen is some form of canonization, and this is a
very Republican conservative view.
Uh, traditionally, traditionally it was a Republican conservative view, but I think
President Trump has obviously become, uh, far less about state's rights because
he controls the federal government.
But in Switzerland, the cantons have massive power, massive power.
In fact, the federal government has very little power and cantons, even to the
point where they, they enforce immigration laws and citizenship laws of the country.
So, for example, the federal government has minimum requirements
for you to become a Swiss citizen.
Like you need to do X, Y, and Z to become Swiss.
A Canton will come in and say, no, no, no, you need to do X, y, z,
alpha, omega, and beta as well.
Like you need to do these three things.
In addition, in this Canton, you know, and cantons in Switzerland are states,
but some of them have population of like 30,000, you know, so it's not
like these are not large entities.
And I think that the United States of America may have to.
Over the next 30, 40 years, adopt that kind of a state's rights, cantonal
canonization view of the world.
Because if one human being competing as a transgender athlete causes us
to get to a point where we're talking about withholding financing of the US
government, I think like that's not a healthy situation that the US is in.
And so I, I can see this happening more and more.
In other words, I think we're finally at a point where both Republicans and
conservatives and liberals and Democrats may be ready to accept what we call in
the US context, states rights, and which I call in the global context canonization.
Jacob Shapiro: Hmm.
Uh, it reminds me of that episode in the West Wing where Martin Sheen
is debating the guy from Florida.
I can't remember the exact, uh, phrase phraseology that he uses, but he's
basically like the, you know, the Florida governor who he's running against is like
complaining about all the things that the federal government does, and Martin Sheen,
president Bartlett is like, okay, great.
So we'd like our tax dollars back, please, if, if you're gonna complain
about all these other different things.
So, once again, the West Wing and Aaron Sorkin predicting some of these things,
Marko Papic: I mean, that takes Yes, but the problem with that Jacob.
Mm-hmm.
But the problem with that, Jacob, is I'm not sure that makes any, any sense.
Mm-hmm.
In Florida's case, or Texas's case or California's case, there's, there are
many states in the United States that are wealthier without the federal government.
Now you might say, well, wait a minute, Marco, like, the state
of California is in a deficit.
Yes.
And just to be clear, I am not at all advocating for any of this.
I'm analyzing.
I personally, I can tell you my personal view, like I do not want to
live in an independent California.
Because lemme tell you, there's gonna be some growing pains.
For the first 10 years or so, this is a one party state, and the one
party that runs this state has gotten very comfortable running it poorly.
So no, like I'm not advocating for that, but I am seeing like, look, if
the, if the relationship was redrawn, there'll be a whole lot more money
for California to keep to itself.
Mm-hmm.
And same with Texas, and same with Florida.
I, I, I haven't looked at the data, so I might not fully know what I'm talking
about, but I know I'm talking what I'm talking about in terms of California.
Yeah, California will be fine.
The rest of America less so.
So this is where I'm not sure the Martin Sheen in that, in that
exchange is actually correct.
Yeah.
Like would Florida suffer if it was independent?
Would they have more or less money?
I don't know.
Jacob Shapiro: Yeah.
And I mean, your Canada pick.
I, I'm still gonna go after your Canada pick because it's ironic the way that
Trump is treating Canada has led to this like, creation of Canadian nationalism.
But like Canada has the same issues internally, uh, in, in some sense, some
of them further, further developed.
Um, but maybe the way that the United States is much further to develop is
like doing these things, things actually actually creating a stronger Canada.
But
Marko Papic: my point was, my point was like, the reason that I want to
have Canada as a pick, the reason why I wanna halt Canadian assets in some way,
shape, or form, is it's a hedge against some apocalyptic decline of American,
uh, stability due to, um, polarization.
And if, if the United States of America were to split up, Canada is
the most powerful country in North America by default, automatically.
A like, it's the end of, end of story, you know?
And, and that's why I think that that's literally how I defended the pick.
I use, I use the term it's a hedge.
Mm-hmm.
But, but, but forget about that issue for now.
The bigger point is that, I know it's difficult to do this after an
hour and a half of talking about LA riots, but forget LA riots.
Forget them.
I, I wish they hadn't happened because we would still be talking about this.
Jacob, you and I would still have spent an hour and a half today talking about
this issue because one human being who happens to be transgendered, she competes
in a athletic meeting, wins some awards.
Whether you agree with that or not is not the point.
If you're very passionate and you disagree with it, God bless you.
It's fine.
Not, I'm not, I'm not criticizing, I'm just saying it's one human being and it
leads to the governor of California and the president of the United States of
America basically talking about divorce.
You know, that's like, that's like two parents talking about divorcing
themselves because one of their kids.
Came home and said they wanted to do bed instead of soccer.
And the dad is like, fuck no.
And the mom is like, no.
You have to let them express themselves.
And they, and in five minutes they're talking, let's divide up the assets.
Yeah.
Well, I'm gonna take the house.
You know, like, I mean, that's, that's unhealthy.
That's un that's unhealthy.
If I am objective and, and I, I, you know, we used to do this at
Strat for, uh, you know, something would happen and you pretend you are
like a journalist writing about it.
Mm-hmm.
Writing about an emerging market country.
Yeah.
If you are just writing an objective analysis of this issue that happened on
Friday pre-writing, you would say this is an unhealthy level of polarization
over a, over a issue that's not relevant at all to the future of America.
Sorry.
Both liberals and conservatives, 'cause both of you are not gonna self
emulate because the liberals are like, yeah, transgendered rights matter.
The conservatives are like, this is terrible.
I'm gonna tell you as a geopolitical strategist who works in finance,
that no, this will not determine the fate of the United States of America
at all, no matter which size wins.
And yet it led to a talk of divorce.
That's unhealthy.
Jacob Shapiro: Well, that's bad.
Marko Papic: That's a bad sign.
It
Jacob Shapiro: is bad.
And to your point, uh, you don't even have to pretend to do that exercise.
The way I do this now is I just go to the People's Daily and I look at
how the People's Daily summarizes these articles in English about what's
going on in the United States, and it's exactly what you would expect.
They're just very coldly, dissecting exactly what happened.
And when you get this like Chinese Communist party view that is
translated into English of what's happening in the United States.
Yeah, it's very sobering.
And to your point, like Xi Jinping, like while his negotiators are there in
London, even if you're right, and even if like China has less leverage than I
think it does in Beijing, everything is going according, not to the plan, but to
the way that they think about the world.
If you're a materialist, if you're a Marxist, if you're like the way that
the Chinese leadership has been educated for generations, everything is happening
the way it's supposed to happen.
And maybe that leads to hubris eventually, but like all of the things that they
were expecting to happen always does.
Yeah.
But like right now, in this moment, oh my gosh.
They're like, oh my God, it's happening.
The the capitalist hegemon is eating itself alive.
Wow.
What.
Marko Papic: And just, and just, you know, like I, I know we're,
we're pushing one and a half hours.
So like, I do like to tie everything with a sports analogy.
Yes, do it.
But, uh, our, uh, our Lord and Savior, the one to whom we bestow
all of our gifts and prayers.
Bill Simmons, the great, he often talks about body language, right?
Mm-hmm.
He's the body language doc.
He calls himself the body language doctor, for those of you who don't know
what I'm talking about, bill Simmons podcaster, historian of basketball.
Uh, we're modeling our, our, our analysis of geopolitics to
his analysis of, of basketball.
And he will often say, I watch the bench when I go watch the game live.
I'll watch the bench and I'll watch during timeouts are, are all the players engaged?
Are they high fiving?
Are they talking, do they have side passionate side conversations
about what happened in the game?
Mm-hmm.
And, and it's so funny, it's such a qualitative analysis, has
nothing to do with data empirics.
It, it goes against the grain of sports analytics.
But he, he says like, look, this really matters.
Chemistry really matters.
And, and there's nothing better than body language.
You know, a bunch of dudes playing a sport, man, like body language
is going to come into it, you know, and that's what we're doing here.
Like, yeah, we can talk about National Guard.
Is it legal?
Is it not history?
We can talk about trade tariffs policy, there's multipolarity, blah, blah, blah.
At the end of the day, like it's a really bad sign that the body
language of the United States of America is where it is today.
And you, if you are, and if you're sitting here listening to this and saying, that's
Donald Trump's fault, you know what?
You got your head up your ass.
It absolutely is not his fault.
He is a symptom Yeah.
Of the fact that that's already there, right?
So like, it's not, it's not his fault if he, you know why that's important to say?
Because.
Whether you love him or hate him, once he's gone, it's not gonna get better.
And I think that that's very dangerous.
And it's dangerous for investors.
It's dangerous for people in the US And I would say it's also dangerous
for countries around the world.
Mm-hmm.
Uh, I, I say it's actually dangerous for China.
It's dangerous for Russia.
It is dangerous for a, it's, it's just there's very few things
that I, a truly devoted nihilist believes is just universally bad.
But the idea that the United States of America dissolves or there's a federal,
state sort of fight, I think that's universally bad, is gonna create a vacuum.
It's gonna create, uh, potential jingoism and Rev. And it's just
gen, genuinely a bad place to go.
Jacob Shapiro: Well on that, Rosie, an optimistic note.
Anything else you wanna tell the listeners before we get outta here?
Mark?
We'll come back next time with our Trade Value Leaders, uh,
our, our trade value leaderboard.
That sounds really fun.
Marko Papic: Should we do that next for next week?
Yeah,
Jacob Shapiro: let's do that for next week.
I'm, I'm ready to roll on
Marko Papic: that.
Yeah.
We have enough time.
Yeah, of course.
Yeah.
Alright.
Jacob Shapiro: I, I'm, I'm ready.
I mean, you already had your first pick, which I'm, I'm fine.
You can have Georgia.
That's fine with me.
I'll, I'll get
Marko Papic: through it.
Whoa, whoa, whoa, whoa.
Wait, wait.
Right, right.
I, I flag that in a press conference.
Maybe.
Okay.
Maybe.
Let's see.
I just want some time.
I just want some time to go over it and, and see, but yes.
In the That's awesome.
Jacob Shapiro: In the meantime, Marco, stay safe.
I know, I know.
It's very difficult.
Thank you.
I appreciate it.