<v SPEAKER_00>Joe Biden, Donald Trump wish for like a Detroit renaissance.

<v SPEAKER_00>Under the tariff regime, this has not worked.

<v SPEAKER_01>Hi, I'm Matthew Iglesias.

<v SPEAKER_00>Hi, I'm Jerusalem Demsis.

<v SPEAKER_01>This week, Jerusalem wants to destroy the American automobile industry.

<v SPEAKER_00>I just want a car.

<v SPEAKER_00>I personally just want a car.

<v SPEAKER_01>What kind of car?

<v SPEAKER_00>I want us to be able to buy Chinese electric vehicles.

<v SPEAKER_00>You start to realize how insane it is that like we are just like literally not allowed to buy some of the coolest new technology out there.

<v SPEAKER_00>Host privilege, I want us to insert here just a video of the new BYD Yang Wang Unai, which is a supercar that can jump over potholes.

<v SPEAKER_00>Okay.

<v SPEAKER_01>So I have mixed feelings about this.

<v SPEAKER_01>Because like I'm, I want somebody else to have, I want this take to be out there in the world.

<v SPEAKER_01>Because I'm often sitting around being annoyed by environmentalists.

<v SPEAKER_01>It's something I I spend a lot of time doing, is being annoyed by environmentalists.

<v SPEAKER_01>And it does seem to me that if you care like more than I do about climate change, as many people do, that like a good thing to do to like put on the table would be like, well, we should legalize these Chinese electric cars.

<v SPEAKER_01>If they were available, like clearly more than zero people would purchase them, and it would do nothing to raise prices or like inconvenience people.

<v SPEAKER_01>So it just like it seems like a no-brainer as a climate measure compared to say like rooftop solar subsidies, which do reduce emissions, but do so by like shifting costs onto the backs of apartment dwellers, right?

<v SPEAKER_01>It's like very regressive, it's quite costly.

<v SPEAKER_01>And so like all the time, I you like I see the climate movement like pushing economically costly things.

<v SPEAKER_01>Uh, whereas here we have something that would have like negative costs to consumers and would achieve the goal.

<v SPEAKER_01>And yet, like it's like have you talked to anybody about this?

<v SPEAKER_01>Like where are your allies?

<v SPEAKER_00>My allies are here.

<v SPEAKER_00>I mean, David Roberts is uh, you know, we we beef sometimes on Twitter, but he's pro letting in the Chinese EVs.

<v SPEAKER_00>Uh also, I think someone that we both read, Noah Smith, who I wouldn't call him the world's biggest environmentalist, but he's he's uh he's in favor of this.

<v SPEAKER_00>I mean, I agree this has like been kind of like a weird like back issue, in part because both like the Biden administration and the Trump administration seem to coalesce around like tariffs against China, particularly when it comes to like reviving the manufacturing base of the of Detroit in some, you know, right.

<v SPEAKER_01>But I mean also like like Europe has done a lot to sort of keep Chinese electric cars out because you know, and it's classic protectionism.

<v SPEAKER_01>Like these are big industries, they employ a lot of people, they are very important to the political economy of the critical swing state of Michigan.

<v SPEAKER_00>Um I just want to like just be clear, like, I mean, I know you know this, but just the level of protectionism the US is doing against China on EVs and a bunch of other things is like unmatched.

<v SPEAKER_00>Like, yes, Europe is doing some protectionism, but like largely those tariffs are like they're trying to like actually counteract the subsidies that China gives to its automaking industry.

<v SPEAKER_00>So like anywhere from 7.8 to 35% uh uh tariffs, but like we're doing like 130% effective tariffs.

<v SPEAKER_00>It's not really, I think, comparable.

<v SPEAKER_00>Like I would be okay with the idea that like there is some tariff that exists so to like, you know, to counteract the Chinese subsidies, which again, I think are a small part of why the Chinese EV market is much better than the American EV market.

<v SPEAKER_00>But like that's like very different than right now, where it's just like I just literally can't buy it.

<v SPEAKER_00>And I just at core, like I just I have this perception that, or I have this core value that I should be able to buy things I want to buy unless there's a very good reason for it.

<v SPEAKER_00>And I'm just like not persuaded that like any of the arguments that are brought up in favor of blocking Chinese EVs are like that good.

<v SPEAKER_00>So, okay.

<v SPEAKER_01>I mean, I do I I'm like I'm I'm torn because again, it's like I Sheldon Whitehouse did this thread and he was like, we can't listen to these hushers, like Democrats need to talk about climate change in the midterms, and like that's crazy.

<v SPEAKER_01>Like they they really don't, right?

<v SPEAKER_01>And like I I hear, you know, like Democrats in oil and gas states, and it's like these Greens, like they're killing me, right?

<v SPEAKER_01>And I'm like, yeah.

<v SPEAKER_01>And then it's like, here we have an idea that like if the up if Sheldon Whitehouse's thread had had your upshot, I would make it.

<v SPEAKER_00>Well, aren't EVs like hella unpopular though?

<v SPEAKER_01>Well, I mean, no, no, no.

<v SPEAKER_01>What's incredibly unpopular is the Democratic Party's policy on electric vehicles, which is that we should make people buy electric cars, right?

<v SPEAKER_01>Like there was a vote in the Senate that Chuck Schumer whipped where it was so California was gonna ban conventional internal combustion engine cars.

<v SPEAKER_01>And because the California market is so large, this was gonna have a big national impact on the availability of ICE vehicles.

<v SPEAKER_01>Um, the Trump administration was gonna deny California the waiver that would allow them to do this.

<v SPEAKER_01>It came up for a vote in the House, and you know, a a move to like block California came up in the House.

<v SPEAKER_01>All the Republicans voted for it.

<v SPEAKER_01>Every frontline Democrat uh voted with the Republicans on this because this measure is very unpopular.

<v SPEAKER_01>And then all the Democrats from the Midwest like also voted for it because it's bad for the, you know, Michigan-centric auto industry.

<v SPEAKER_01>Then it comes to the Senate and like the climate donors like start working the phones, they're telling Chuck Schumer, you gotta whip this.

<v SPEAKER_01>And so in the Senate, the frontline members uh vote, you know, with the left, even though to be clear, there were no stakes to this because Republicans had the votes to pass it, they get fucking Gary Peters to vote for this thing from Michigan because he's retiring.

<v SPEAKER_01>It's like Alyssa Slotkin is out there alone on an island.

<v SPEAKER_01>So that's crazy to me, right?

<v SPEAKER_01>And if Sheldon Whitehouse was saying, you know what, like instead of trying to ban conventional cars, why don't we allow the world's leading electric vehicles onto the market?

<v SPEAKER_01>I would say, you know what, Sheldon?

<v SPEAKER_01>I just don't agree with you about the significance of this issue and the electoral politics of China, but you at least like have a functioning brain and can think through the order of events.

<v SPEAKER_01>But as far as I can tell, like the entire American climate movement only is interested in like climate measures that hurt economic growth.

<v SPEAKER_01>And when you come up with something that would be like arguably beneficial anyway.

<v SPEAKER_00>But like you're mixed on it still.

<v SPEAKER_00>Like you're still not, you're not like I mean, I know you have this like uh, you know, meta point that you want to take about the climate.

<v SPEAKER_01>But this is the thing.

<v SPEAKER_01>Like at the end of the day, like I think I agree with the Biden administration's original take on this, which is that like we want to preserve automobile manufacturing industry in the United States, and we want to cultivate a domestic battery manufacturing industry rather than create this sort of like wholesale dependence on a China-based supply chain for these emerging technologies of the future.

<v SPEAKER_00>So I am in agreement that we should have like a domestic battery technology industry, like not just for like I mean, there's just so many national security net needs for that already we're seeing in the trade war between Trump and uh Trump's administration and and the current Chinese administration that you are seeing real threats to our ability to have um lithium-ion batteries, um, which are power basically everything and will continue to power basically everything for the future.

<v SPEAKER_00>But I actually think that like doesn't actually require us to block EVs.

<v SPEAKER_00>Well, I mean, I think it I think it might.

<v SPEAKER_01>I mean, and I think I I mean I think I w I want to talk about the the logic of sort of this view, right?

<v SPEAKER_01>Because w I thought that the Biden presidency was very betwixt and between in terms of what they wanted to say their trade policy was.

<v SPEAKER_01>You know, because he came in, he didn't really rescind Trump's prior tariffing efforts.

<v SPEAKER_01>I mean, he intensified tariffs on China to some extent.

<v SPEAKER_01>But then as they started to campaign against Trump, you know, first Biden and then Kamal Harris were like this across the board tariff is insane, et cetera, et cetera.

<v SPEAKER_01>And like I believe fully and firmly in the economics of free trade in a way that I don't think the Biden administration quite did, and the Trump administration definitely doesn't.

<v SPEAKER_01>Like, I don't think there's anything you pop open, you know, Ricardo and it's like comparative advantage.

<v SPEAKER_01>And I don't think there's anything like wrong with that, right?

<v SPEAKER_01>The the economics of 101 account is like totally good, right?

<v SPEAKER_01>But if you go back, like the cla the reason the classic example he puts out is England trading with Portugal and they're trading wool and wine.

<v SPEAKER_01>And England and Portugal are close allies.

<v SPEAKER_01>It's like the world's longest standing uh military and diplomatic alliance, um, you know, now subsumed by NATO.

<v SPEAKER_00>But I think there's like I mean, there's like there's like obviously the um sort of more facile free trade uh you know is good for peace argument, but I think like the more sophisticated one that's come out in recent years, like the Dale Copeland argument about future trade expectations is good.

<v SPEAKER_00>And and what Copeland Okay, I gotta be honest with you, I have no idea who Dale Copeland is.

<v SPEAKER_00>He's a political scientist, um, uh which is a field I know you do not fully respect.

<v SPEAKER_00>Trevor Burrus, Jr.

<v SPEAKER_03>Grainfield.

<v SPEAKER_00>Basically, his argument is like it's not just the idea that like, oh, free trade will just necessarily make everyone be happy and kumbaya and you'll never have war again, because clearly we've observed war under periods of time where different countries have been trading.

<v SPEAKER_00>But that the question is about future trade expectations.

<v SPEAKER_00>That like if a country is to believe that like the future trade expectations for um itself with you know, if if China believes that like the US is no longer gonna be a real trading partner in the future, that like increases the likelihood of conflict.

<v SPEAKER_00>It's not just like is there trade going on, but what it thinks is gonna happen.

<v SPEAKER_00>I think this is just like obviously true.

<v SPEAKER_00>Like, not just I don't want to like just spend here, like, I mean, obviously all of IR is like just trading examples back and forth for an hour.

<v SPEAKER_00>But I just think that it is really concerning to me the speed with which like I like I've lived in DC for most of my life or in near DC for most of my life, and just the speed with which like everyone just started to agree that like we were going to go to war with China or like we're gonna be in like some real adversarial relationship with China and that we were all gonna like have a sort of feta complete about this relationship seems really bad to me.

<v SPEAKER_00>And it seems like a self-fulfilling prophecy.

<v SPEAKER_00>Obviously, there are some like structural reasons why there are we are geopolitical rivals, but you know, I was reading this book over the weekend called Despero, which is this uh sci-fi book about uh Jesuit priests making first contact with aliens.

<v SPEAKER_00>And the it's not at all, it's the only thing that's relevant about this book to this conversation is that I got confused because it's like set in our current time period for some period of time, and they're talking about like Japan as like our main geopolitical rival, and then I'm like, oh yeah, this book was written in like the early 90s, like late 80s.

<v SPEAKER_00>And it's like the same fucking thing was happening then.

<v SPEAKER_00>And like now, you know, Japan's like our biggest ally.

<v SPEAKER_00>And again, I'm not saying that will definitely happen with China, but I just think there's like so much over-indexing on like current negative relationships.

<v SPEAKER_00>And I think it creates this the exact conditions for which you don't want to be interconnected.

<v SPEAKER_01>Well, so okay, so years and years ago, you know, I worked at the American Prospect, and that was a very like labor-aligned publication back then, a lot of free trade skepticism.

<v SPEAKER_01>And the editors there were really interested in um the US-China Security and Economic Review Commission, which was this kind of like joint project of like labor protectionists and China National Security Hawks.

<v SPEAKER_01>And and like my take at that time, as somebody who's like more just favorable to the economics of free trade, was that this alliance with the China Hawks, you know, opportunistic alliance with the China Hawks was dangerous.

<v SPEAKER_01>On basically the grounds that you were outlining, right?

<v SPEAKER_01>That it's like if you say in advance, like, well, we want to get ready, you know, to fight a war with you, then the people on the other side hear that message and they're like, well, we'd better get ready to fight a war with you in downward spiral.

<v SPEAKER_01>Um, this is Graham Allison's book.

<v SPEAKER_01>Uh, he titled it the Thucydides Trap, which I find a very confusing uh title.

<v SPEAKER_01>Um, it's I guess a reference to the uh Thucydides' account of the origins of the Peloponnesian War.

<v SPEAKER_01>Um I think maybe more straightforwardly, uh, World War I, you know, the German Empire starts to say, well, we need to build a navy uh because we need to compete with Britain.

<v SPEAKER_01>And then Britain starts saying, Why are they building this navy to compete with us?

<v SPEAKER_01>Um and so then Britain uh like settles its colonial beefs with Russia so that they can get ready to fight a war with Germany, and then the Germans freak out.

<v SPEAKER_01>Um so, you know, like that's bad.

<v SPEAKER_01>I I you know, if circa 2005, I was like, let's not do this.

<v SPEAKER_01>Um but I would say that events, you know, between 2005 and 2020 just made me think, you know, like it's it's I don't want to say like it's too late, war is inevitable, but like we avoided the opportunity to have a cooperative relationship with China.

<v SPEAKER_00>Um I mean, like what do you like how why do you think it's past point of no return?

<v SPEAKER_01>So I mean, I think a a bunch of things happened sort of along the way, but uh but a really noteworthy one is the way the Chinese government crushed the protest movement in Hong Kong and totally eviscerated um the semblance of a one country's two systems uh resolution there, which meant that they were giving up on a peaceful resolution to the Taiwan issue, you know, because if you thought like the original China-Hong Kong agreement, you'd be like, why would this be credible, right?

<v SPEAKER_01>Like what is stopping China from crushing it?

<v SPEAKER_01>I think Taiwan would be the obvious sort of example, right?

<v SPEAKER_01>Then we've also seen that when I go even further back to like free trade discourse, when I was in college in like 2002, you know, I took a class, Globalization is discontents, and um, we had uh as a guest professor, uh Thomas Friedman, uh the New York Times columnist.

<v SPEAKER_01>And he was really big at that time on the idea that integration into the global economy would lead to liberalization of the Chinese political system.

<v SPEAKER_01>And I think under Hu, uh Hu Jintao, that seemed credible to people in a lot of different ways, but under Xi Jinping, it's gone in the opposite direction, right?

<v SPEAKER_01>It's become more of a personalistic dictatorship.

<v SPEAKER_01>It's become clear that the internet and modern information technology, rather than having this kind of like liberatory uh sense that at the turn of the millennium we thought are really just an incredibly powerful tool of surveillance, um, the sort of repression and quasi-genocidal activity in Xinjiang, you know, again, are just showing us like this is a regime that has a really fundamental value conflict with the United States of America that I think makes, you know, real long-term cooperation extremely unlikely.

<v SPEAKER_01>Then the United States, on our own, has done a certain amount of um unhinged activity in the military sphere.

<v SPEAKER_00>Okay, but I wanna just draw it down here.

<v SPEAKER_00>I want to be clear that I think any thinking person would like observe the behavior of the Chinese government and go, well, like, this is like quite concerning for, you know, global peace and like prosperity and liberalism and freedom and democracy.

<v SPEAKER_00>Um but then the question is like, okay, like what do you do about that?

<v SPEAKER_00>Because I mean, obviously China is more powerful than a lot of other states, but there are lots of states that like are like this and that are uh uh you know threats to global hajip like prosperity and peace or whatever.

<v SPEAKER_00>I mean, the UAE is currently fomenting um uh, you know, genocidal uh behavior in Sudan.

<v SPEAKER_00>So it's just like lots of lots of places are doing really bad stuff all the time, and like that's really bad.

<v SPEAKER_00>And there's this question of like what we do about it.

<v SPEAKER_00>And the real problem here is that I feel like this, which is like a distinct conversation, which I'm like very open to a variety of policy responses to, gets conflated with this other thing, which is domestically, Joe Biden, Donald Trump, a bunch of other people like wish for like a Detroit renaissance.

<v SPEAKER_00>And like they try to like marry these two things together because the only thing that gets through Congress in a bipartisan way is like national security type stuff.

<v SPEAKER_00>So everyone kind of tries to like put all of their shit into like anti-China like language.

<v SPEAKER_00>And, you know, I'm not gonna begrudge you the politics of doing that, but I'm just saying like it creates like a really confused like policy decision because again, Chinese EVs, which is the original thing I want to have access to, are not act we don't have to block those to get all the benefits we're talking about.

<v SPEAKER_00>Like when we're talking about building up a domestic battery uh, you know, industry.

<v SPEAKER_00>There are a few blockers to this.

<v SPEAKER_00>Like one or the critical minerals.

<v SPEAKER_00>Trump administration is doing some stuff on this, but like that has like almost nothing to do with with China.

<v SPEAKER_00>Like we could if we wanted to.

<v SPEAKER_00>Like there are tons.

<v SPEAKER_00>I know they're called rare earth, but they're not actually rare.

<v SPEAKER_00>Like, we could just choose to do that in the United States.

<v SPEAKER_00>There are a lot of environmental blockers to doing that.

<v SPEAKER_00>We could choose to do that in other friendly countries, we could just expand our capacity.

<v SPEAKER_00>Like, again, there's some stuff happening now under the Trump administration on this, but that's a huge blocker.

<v SPEAKER_00>The second is around the 45X, which was the Biden administration IRA.

<v SPEAKER_00>It was part of the Inflation Reduction Act.

<v SPEAKER_00>Um, disclosure here, my husband does work at a battery company that does receive 45x funds.

<v SPEAKER_00>So disclosing that.

<v SPEAKER_00>Uh uh, but he, you know, the these, this was a production tax credit that was actually exactly what you would want to see, instead of just saying, you know, you get money for announcing big deals, you got money for like actually producing energy.

<v SPEAKER_00>And so, like, and that's the kind of like export discipline subsidization that you would want to see creating that benefit.

<v SPEAKER_00>And again, like lots of that's still around, but like that, we should just do more of that if we want more batteries.

<v SPEAKER_00>Like, I'm like confused why we would need to block me from getting an EV.

<v SPEAKER_00>I could even imagine like saying, like, you know, maybe there's part of the EV that you don't allow to be built in China or whatever.

<v SPEAKER_00>But like right now, like there is a battery that BYD has created that charges to 90% in five minutes.

<v SPEAKER_00>And like the biggest bear, I mean, like, just like as a person, like I it's like I am not buying something that will provide me tons of value for some like convoluted reason that it's going to produce benefits to Detroit when, like, under the tariff regime, this has not worked.

<v SPEAKER_00>We have not seen an increase in manufacturing jobs, even under this 130% tariff regime.

<v SPEAKER_00>You also haven't seen these companies be willing to commit to this long-term um capital-intensive uh uh strategy.

<v SPEAKER_00>Like, if you wanted Ford or GM to be like BYD, that like requires them committing to like a 30-year capital intention.

<v SPEAKER_01>I mean, so I I agree with you that we should distinguish this question from the Democratic Party's particular nostalgia about UAW organized factories.

<v SPEAKER_01>No, no, no, no, because because I mean there there is a a difference, right, which is that the American automobile manufacturing industry is now bifurcated, right, between this 4GM Stellantis, Michigan-based complex, in which um the UAW represents the workers at the uh the OEMs and many of the workers in the supply chain.

<v SPEAKER_01>And then you have this whole other automobile manufacturing industry, which is in the South, which is non-union, which is mostly factories building quote unquote German or Japanese or now Korean cars.

<v SPEAKER_01>And some of them are EVs, right?

<v SPEAKER_01>So, like in the United States, we people buy EVs, they mostly buy Teslas uh made in the Sunbelt, or they buy Hyundai Kia cars also made in the Sunbelt.

<v SPEAKER_01>And I don't think that there is a future for American automobile manufacturing that is just propping up the old big three factories.

<v SPEAKER_01>I it would be political.

<v SPEAKER_00>I mean, it seems what we're doing.

<v SPEAKER_01>Well, no, not really, because I mean, again, we are propping up all American automobile manufacturers.

<v SPEAKER_01>Right.

<v SPEAKER_01>And in particular, the the thing that the Chinese EVs would compete most with actually isn't the Detroit vehicles, right?

<v SPEAKER_01>Because the the stock and trade of Ford and GM in particular is pickup trucks, right?

<v SPEAKER_01>BYD does not make a product that competes head to head with a Ford F-150 or Chevy Silverado.

<v SPEAKER_01>It might if the I mean, yes, I mean, I mean, they they could someday, but I mean they don't in practice, right?

<v SPEAKER_01>They do make products that compete very directly with a Tesla Model 3, with a Hyundai Ionic, you know, et cetera, et cetera, et cetera.

<v SPEAKER_01>So in a proximate, like direct, real talk sense, like what we are most clearly protecting is non-union right-to-work electric vehicle sedan manufacturing, mostly in the American South.

<v SPEAKER_01>And I think that that is part of the effort to foster a battery supply chain in the United States, right?

<v SPEAKER_01>Is because like the subsidies, the stuff that you're talking about, right?

<v SPEAKER_01>Like that's good.

<v SPEAKER_01>The Trump administration's at first was like, oh no, we hate batteries because it's green.

<v SPEAKER_01>And then when they were doing their trade war with China, they realized that China could cut us off from rare earths.

<v SPEAKER_01>They realized that you need those rare earth magnets to make all kinds of stuff, including things Republicans like.

<v SPEAKER_01>Yep.

<v SPEAKER_01>And so now they're they're trying to address it.

<v SPEAKER_01>So we we need to address the regulatory stuff on mineral refining.

<v SPEAKER_01>We need to get like Trump's head out of his ass and distinguish between like trade with friendly countries and trade with hostile countries, because I think a lot of this like dirty refining we probably don't actually want to do in the United States, but it's like let like let.

<v SPEAKER_01>Peru do it, you know, let let somebody else do it for money.

<v SPEAKER_01>But we also want to have end products, right?

<v SPEAKER_01>And like an automobile is the ultimate end product for a battery right now.

<v SPEAKER_01>It's the biggest, most important battery market.

<v SPEAKER_01>So trying to have EVs assembled in the United States, I think is like a good and reasonable part.

<v SPEAKER_00>But like why can't we just subsidize it?

<v SPEAKER_00>I don't get it.

<v SPEAKER_00>Why can't we just subsidize it?

<v SPEAKER_00>Like, why do we need to do tariffs?

<v SPEAKER_00>Like, I just really I mean, like, you can do it with subsidies.

<v SPEAKER_00>No, but I'm saying, like, I actually I think that there's actually a really important distinction.

<v SPEAKER_00>Like, I think tariffs reduce a ton of the incentive for companies to try to do the hard work of like it it's really, really difficult to do what like BYD did.

<v SPEAKER_00>And BYD in the 90s is like originally a battery company before they get into cars.

<v SPEAKER_00>Like it's decades of like understanding like how this market works.

<v SPEAKER_00>The vertical integration that BYD has is like the biggest reason why it has like lower costs.

<v SPEAKER_00>Like people often think it's about the Chinese subsidies, but it's actually because of their uh the corporate structure.

<v SPEAKER_00>There's a great Rhodium report about why Chinese EVs are so cheap, and they like like try to really decompose what's going on here.

<v SPEAKER_00>And they find that you know BYD manufactures around 80% of its tier one components and 36% of tier two.

<v SPEAKER_00>That's more than twice Tesla's in-house share of Tier 1 components, only 37%.

<v SPEAKER_00>And Tesla is like of the American car manufacturers, is like the vertically integrated one.

<v SPEAKER_01>Well, and BYD is really a battery company that learned how to make cars.

<v SPEAKER_01>And and what we mostly have in the West is car companies who first were like, well, we could have an electric motor, which is easy, but then we need a giant battery.

<v SPEAKER_01>Trevor Burrus, Jr.

<v SPEAKER_00>But like Chinese state subsidies account for just 5% of BYD's per vehicle cost advantage over Tesla.

<v SPEAKER_00>Like Tesla also produces cars in China.

<v SPEAKER_00>Like it gets some, like it gets some of the state subsidies when it does that, not all of them, way fewer than BYD, et cetera, get.

<v SPEAKER_00>But like it also means it can use that labor market.

<v SPEAKER_00>It all like tons of things are equalized.

<v SPEAKER_00>It still isn't able to get close to that cost parity because there's like a lot of like difficult things that go into like making a very successful business that are difficult to just learn um without like tons of time.

<v SPEAKER_01>So we can't just go make cars.

<v SPEAKER_00>I'm saying like I'm saying it's very, very difficult and like it's possible to do, but I'm saying like in order to get someone to make that attempt, in order to get companies, whether it's the big three, whether it's new companies, like you want to foster like new Teslas, et cetera, like that's like 30 years in the future that's gonna happen.

<v SPEAKER_00>But my point here is like tariffs themselves, like, A, clearly are not producing that reality, but also, I mean, they're not.

<v SPEAKER_00>They're not producing.

<v SPEAKER_00>I mean, like when you're looking at um yeah, Ford and SK On uh announced an$11.4 billion joint venture in 2021 with a$9.6 billion DOE loan.

<v SPEAKER_00>In December 25, 2025, they dissolved that because EV demand fell short to pr uh projections.

<v SPEAKER_00>Ford took an$8.5 billion write down on its Model E segment that same month.

<v SPEAKER_00>Okay, like these companies are not like willing, even under this tariff regime, to like bear the difficult losses, which is like reason.

<v SPEAKER_00>I'm like not getting it.

<v SPEAKER_01>Yeah, listen, listen, listen.

<v SPEAKER_01>I I mean I agree.

<v SPEAKER_01>Look, if I could puppet master all of American like transportation, trade, economic policy, et cetera, yeah, I would land on something different than the mix that we have, right?

<v SPEAKER_00>But can I have my Chinese EV?

<v SPEAKER_00>Well, that's it.

<v SPEAKER_01>But this is what I'm saying.

<v SPEAKER_01>But you know, so like, I mean, the most simplistic thing in the world, right, is like the gasoline tax should be significantly higher.

<v SPEAKER_01>Yeah and it should be indexed to inflation.

<v SPEAKER_01>And in a world where the gasoline tax is higher and indexed to inflation, the overall popularity of these very heavy cars is just like structurally lower.

<v SPEAKER_01>And the whole thing where the main profit center of the American auto industry became, you know, trucks that are sold to hobbyists rather than real work trucks just wouldn't have arisen.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>Those are the kinds of vehicles that are the most challenging to electrify.

<v SPEAKER_01>Like this is a reason why BYD doesn't have a directly competing product, right?

<v SPEAKER_01>Um, and their large SUVs are mostly plug-in hybrids, you know, so it's uh it's all complicated.

<v SPEAKER_01>In a world like that, you have more incentive to adopt electric vehicles without mandates, things like that.

<v SPEAKER_01>So that's all very constructive.

<v SPEAKER_01>We could do subsidy type stuff.

<v SPEAKER_01>We're right now we are caught in a uh a vice where, you know, Republicans don't want to promote vehicle electrification at all.

<v SPEAKER_01>Right.

<v SPEAKER_01>They like hear that for national security reasons, like batteries and electric motors are important, but they have like a culture war opposition to it.

<v SPEAKER_01>Um electrons that are.

<v SPEAKER_01>The most important electric vehicle entrepreneur in the United States of America is a politically influential Republican, but he has chosen not to wield any of his influence on impacting Republicans' thinking about electric vehicles.

<v SPEAKER_01>He has also chosen to like closely identify himself with right-wing culture war politics in a way that has hurt the sales of his own company and are making the whole EV market like look really, really bad.

<v SPEAKER_01>Then, because of America's uh interesting system of labor law, we have this like particular thing where like the shrinking companies are unionized, but the growing ones aren't.

<v SPEAKER_01>So Democrats who like electric vehicles and don't like Elon Musk have very mixed feelings about championing these like Korean trains.

<v SPEAKER_01>So like it's all fucked up, right?

<v SPEAKER_01>But I do think that to the extent that we have this kind of political coalescence around the tariffs, that is eliminating the tariffs does not get us to a consensus on a better kind of policy regime.

<v SPEAKER_01>It just knocks out the transplants, it knocks out Tesla, and it will continue to lead the sort of traditional Detroit manufacturers to like triple down on giant trucks.

<v SPEAKER_01>So but what about the consumer surplus of me getting a BYD card?

<v SPEAKER_00>I don't know.

<v SPEAKER_00>You know, so so here's why I should say I'm but I mean, like, but like seriously here, like I used to think this is like one of those things I assume you as well, but like I have the sense that like unless proven useful, the default should be to allow for trade to exist.

<v SPEAKER_00>I mean, I And I know that like you're broadly in favor of that, but I mean, again, like in this like disequilibrium we found ourselves in through like decades of bad policy and also like political, you know, compromises that had to be made because there are people that just want and companies that want to maintain the current existing structure of the American car market.

<v SPEAKER_00>Taking off tariffs on these specific vehicles has, I think, quite little impact on anything except for prices, for consumers.

<v SPEAKER_00>I mean, and again, I want to be clear like prices for consumers are like really, really bad now.

<v SPEAKER_00>I know this is like a we're an affordability moment or whatever, but like and housing is the thing that, you know, Matt and I talk about the most.

<v SPEAKER_00>But like transportation is like the second biggest cost to like most households.

<v SPEAKER_01>And it's like I know, but can I confess, I'm just like I'm kind of like enough, I'm here with my we should raise the gas tax.

<v SPEAKER_01>I'm just like kind of enough of an urbanist that I don't I don't really think.

<v SPEAKER_01>Well, my point is you can do that.

<v SPEAKER_01>I don't really sympathize with people's desire for cheap cars.

<v SPEAKER_00>Like, I sympathize with people's desires for cheap transportation.

<v SPEAKER_00>Uh I think that like it's very difficult to bus.

<v SPEAKER_00>Not everyone can ride the bus, Matthew.

<v SPEAKER_00>The bus system don't go doesn't go everywhere.

<v SPEAKER_00>I do have a mini bike, thank you.

<v SPEAKER_00>Um but I just think it it's it's there's something about and again, like clearly what's like I I also am an urbanist here, but I think that the solution to that problem has less to do with whether or not this tariff regime exists.

<v SPEAKER_01>Here's the other thing.

<v SPEAKER_01>I think that the Reagan experience in the 80s of curtailing Japanese automobile imports was not successful ultimately in like defending the big three or preventing this kind of like long, slow decline of the American automobile industry.

<v SPEAKER_01>But it was ultimately very successful in at getting Japanese automobile manufacturers to open factories in the United States, which is an important reason that like the American industrial base uh has been resilient to an extent, right?

<v SPEAKER_01>That's been a growing part of manufacturing.

<v SPEAKER_01>So to me, you know, part of the But like EV market share is falling now.

<v SPEAKER_00>The US EV share peaked at 10.6% in Q3 of last year, then collapsed five to 5.8% before.

<v SPEAKER_01>It's gonna go back up thanks to Trump's Green New Deal, though.

<v SPEAKER_00>I mean, it's you know, I I and by that do you mean the Iran war?

<v SPEAKER_00>Yes.

<v SPEAKER_01>No, I mean I do think I mean you do see this, right?

<v SPEAKER_01>I mean, EV shopping has gone up a lot this quarter.

<v SPEAKER_01>Why is it that this is like a classic you know, I'm always a skeptical about empirical social science, but we have really good data on this that like people make long-term investments in fuel efficiency of their cars based on like what is the price of gasoline today.

<v SPEAKER_01>And that's very stupid.

<v SPEAKER_01>And like I urge you to think harder about this uh the next time you're buying a car.

<v SPEAKER_01>But that is what people do.

<v SPEAKER_01>And I do think, I mean, I was saying gas tax, you know, many, many things, like that would be good.

<v SPEAKER_01>Expensive, I well, I'm not running for office.

<v SPEAKER_01>Expensive gasoline is good for the world, um, but bad for the poor.

<v SPEAKER_01>Uh, so if we could get Chinese companies to say, hey, Mr.

<v SPEAKER_01>Trump, you know, what if we open a factory in Tennessee?

<v SPEAKER_01>Like, I think we should try to get to yes on an agreement like that.

<v SPEAKER_01>And I was gonna say, I as a as a hypocrite, um, I drive not an electric vehicle, but a plug-in hybrid.

<v SPEAKER_01>Um and in China they call these new energy vehicles.

<v SPEAKER_01>They they lump together the plug-in hybrids and the battery electrics.

<v SPEAKER_01>Um and I drive not a Chinese plug-in hybrid, but a Volvo, which is Swedish.

<v SPEAKER_01>Um, but uh that's actually a Chinese company.

<v SPEAKER_01>Um they they bought Volvo some time ago.

<v SPEAKER_01>Um, the XE60 recharge.

<v SPEAKER_01>My XE60 recharge was manufactured in Sweden.

<v SPEAKER_01>The XE60 recharges that are for sale in the United States come on boats from Sweden, but they also have a factory in China, uh, I think two uh or more that makes the ones that are sold um all throughout Asia, which is a larger market.

<v SPEAKER_01>Volvo makes certain cars in South Carolina.

<v SPEAKER_01>You know, so if if we can get like these quote unquote Swedish uh cars assembled in the United States, like that's a good win.

<v SPEAKER_01>Um Geely, which is the company that owns Volvo, is a lesser Chinese car manufacturer uh than your friends at at BYD.

<v SPEAKER_01>But you know, if if they want to like come with an offer like that, I think that would be good because the know-how, the assembly, that kind of thing is valuable.

<v SPEAKER_01>But getting back to our like War and Peace stuff.

<v SPEAKER_00>Trevor Burrus, Jr.: But the assembly stuff, like I actually like, is that the really thing that's important here?

<v SPEAKER_00>Like, I think the battery production and manufacturing, like, that's important.

<v SPEAKER_00>But assembling cars at the at the end of the day, who cares?

<v SPEAKER_01>It's it's all part of a thing, right?

<v SPEAKER_00>I mean, it's but is it like is like it what is I think this is the thing, like everything gets conflated in this very weird way.

<v SPEAKER_00>Like, is like end-of-the-line manuf uh assembly of like an already manufactured car helping our national security?

<v SPEAKER_00>In what way?

<v SPEAKER_00>Like, people just like say this.

<v SPEAKER_00>I'm just like, What do you mean?

<v SPEAKER_01>No, no, no.

<v SPEAKER_01>So I I mean, so there's the specifics of like developing a battery industry and like what's the hard part, what's the easy part?

<v SPEAKER_01>But there's also the reality, right?

<v SPEAKER_01>That like in wartime, like car factories get converted to manufacturing military equipment, right?

<v SPEAKER_01>Like the cap- How could battery factories.

<v SPEAKER_01>Yes, yes, yes, yes.

<v SPEAKER_01>But it but it means all kinds of things, right?

<v SPEAKER_01>Like the ability to have a manufacturing base is relevant.

<v SPEAKER_00>Then the question is like, what should we like we both agree that it's like not maximally economically efficient to do any of the stuff that we're talking about?

<v SPEAKER_00>Subsidies, tier, we are taking that cost because there are other things that matter than like maximal economic efficiency.

<v SPEAKER_00>And then it's like, okay, but like economic efficiency does matter.

<v SPEAKER_00>So like what is the thing that we could do here that would generally not uh you know, undermine like price signals in the market, reduce the competition for you know new companies to come in, like whatever it is.

<v SPEAKER_00>And that's like to me, like clearly like let's be like narrowly targeted here about what we're actually trying to do.

<v SPEAKER_00>Like this, you're trying to do it.

<v SPEAKER_00>Like, well, maybe when there's a hot war, we'll like need I'm like, I don't know, maybe AI will fight all our wars and like No, no, no.

<v SPEAKER_01>I I mean I I do think this is why going back to the the international relations point is important.

<v SPEAKER_01>Like I think beyond the cars, right?

<v SPEAKER_01>That like we should be trying to lower trade barriers, dramatically lower trade barriers with Europe, with Japan, with South Korea, with Latin America.

<v SPEAKER_01>I mean, with a mix of like, there's like true allies, right?

<v SPEAKER_01>And then there's like there's a lot of countries out there that are kind of mixed bag in terms of human rights and and geopolitical alignment, um, but they're not hostile to the United States in geopolitical sense.

<v SPEAKER_01>And they're also not that large, right?

<v SPEAKER_01>Like you, you raised the UAE, which is, you know, that's an important country because of their oil wealth.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>But there's no universe in which the UAE becomes like the dominant global power.

<v SPEAKER_01>And like they know that, right?

<v SPEAKER_01>Like they're just they're trying to sell oil to people and and make money, right?

<v SPEAKER_01>And I don't know why they're screwing around in Sudan the way they are, but like they're they're not gonna conquer the world.

<v SPEAKER_01>And so we want that.

<v SPEAKER_01>And I think that we should be trying to not like reshore a hundred percent of the manufacturing that has drifted to China, but to decouple substantially so that we are both manufacturing more stuff in the United States and importing manufactured goods from, you know, from Mexico, from Colombia, from Venezuela, from Jamaica, uh, from Spain rather than from China.

<v SPEAKER_01>And we should be trying to get a world in which friendly Asian countries, you know, Japan, India, Korea, et cetera, are like in a US-centric trading system rather than a China-centric trading system.

<v SPEAKER_01>It's through a little bit of happenstance that CARS has become like the hard, hard nub of this.

<v SPEAKER_01>But I think we want to like build on that nub that like Apple shifting more and more of its assembly to India, like that's very good.

<v SPEAKER_00>That like new um So like I totally agree that the number one thing that I wish people, mo more people who cared about this, people who are more concerned about China and are like certain about it, um, would do is they would care a lot more about French oring and like instead of using this issue as an attempt to return us to the economy of the 1950s, like I I agree with this.

<v SPEAKER_00>I think it'd be great.

<v SPEAKER_00>I don't think it's great that like 90% of the world's, you know, whatever, you know, rare earths that go into lithium-ion batteries are coming from China.

<v SPEAKER_00>It's clearly not good that any like supply chain would be so unbelievably uh, you know, uh uh undiversified.

<v SPEAKER_00>But like I think, and again, like maybe we're actually just saying the same thing.

<v SPEAKER_00>Like, yeah, like if it was but if it was like 30% coming from China, like I don't really care that much.

<v SPEAKER_00>Sure.

<v SPEAKER_00>But I actually think that like that's substantially different than what we're doing trying to do right now.

<v SPEAKER_00>We're trying to like eliminate China as a trading partner.

<v SPEAKER_00>And like that seems like I mean, I don't know that we are trying to do that.

<v SPEAKER_01>I mean, uh, you know, uh sadly the Trump administration is not super coherent in its uh policy approach, right?

<v SPEAKER_01>I mean, like they have relaxed export controls on NVIDIA chips and stuff like that.

<v SPEAKER_01>Like, I I I don't think that Trump has a um principled approach to geopolitics.

<v SPEAKER_00>I think that Biden may have a principled approach to deal-making with China on this, though, actually.

<v SPEAKER_01>Sort of.

<v SPEAKER_01>But I mean, uh you know, Trump is very interested in the stock market.

<v SPEAKER_01>You know what I mean?

<v SPEAKER_01>And so, you know, he has exempted from tariffs stuff that is needed to build data centers because that's been a big element of GDP.

<v SPEAKER_01>He has allowed Nvidia to export a lot of chips because that's good for one of the biggest SP 500 components.

<v SPEAKER_01>It's a little incoherent, right?

<v SPEAKER_01>H his approach to that leading edge technology with his approach to the auto industry, where those companies are now small enough that like it's not as big a deal for the stock market, but it still plays a big role in the kind of like American mythos, et cetera.

<v SPEAKER_01>The Biden administration, I thought, had a more coherent view of what its China policy was, but then its manufacturing policy was much more invested in like narrow labor union politics, you know, like which was also bad.

<v SPEAKER_01>Um, you know, a big challenge for American geopolitical competition with China is that you said like national security stuff is the only thing that can like get through Congress on a bipartisan basis.

<v SPEAKER_01>But there's like on a practical level very little like buy-in for the idea that there's geopolitical competition with China.

<v SPEAKER_01>Like nobody What do you mean?

<v SPEAKER_01>Like, nobody wants to say, you know, I am doing X and it is going to be moderately economically costly.

<v SPEAKER_01>But the reason that I'm doing it is geopolitical competition.

<v SPEAKER_00>Well, that's because it's a very bad message.

<v SPEAKER_00>You can't put that on a press release.

<v SPEAKER_01>Right.

<v SPEAKER_01>But I mean, you know, I think at the at the height of the Cold War, right?

<v SPEAKER_01>If the USSR, right, if Brezhnev had come and been like, I want to buy all of your most advanced microchips, and the Nixon administrators were like, no, people wouldn't have been like, what's going on?

<v SPEAKER_01>You know what I mean?

<v SPEAKER_01>Like like pe people believed in the Cold War.

<v unknown>Trevor Burrus, Jr.

<v SPEAKER_00>But I mean, I think right now the debate over chips is very much like having a similar flavor.

<v SPEAKER_00>The problem is that like Trump seems not to be that concerned about the potential for China to Sure.

<v SPEAKER_02>But but that's part of what I mean, though.

<v SPEAKER_02>There isn't real, like for all that, like there are lots of people in Congress who are worried about it, less people in DC.

<v SPEAKER_00>I mean, I don't know.

<v SPEAKER_00>Right.

<v SPEAKER_02>I mean, it's just it's thin.

<v SPEAKER_02>You know, it's like the it's of course.

<v SPEAKER_02>Yeah, we haven't been in a political thing.

<v SPEAKER_00>We haven't been in like a like a hot war where like lots of Americans were fighting in a long time.

<v SPEAKER_00>I think it's made people way more complacent about the potential threat of of war on people's lives.

<v SPEAKER_00>I mean, I I just think that like even what's going on in Iran right now, like it's obviously super unpopular, but like most Americans are not like actually exposed to this.

<v SPEAKER_00>Like, there aren't most people do not have family members that are fighting in Iran and like are at risk of dying.

<v SPEAKER_00>Like, we're just like bombing this other country um or in allowing Israel to bomb them.

<v SPEAKER_00>And uh and again, like that I just think like it's been a while.

<v SPEAKER_00>Like, even Iraq, like it was a very much smaller proportion of people fighting than earlier conflict.

<v SPEAKER_01>But I mean yes, Iraq was was relatively disconnected, but the idea, but if you go back in time circa 2002, 2003, 2004, the idea that the United States was in some sense involved in like a war on terror was quite widespread.

<v SPEAKER_01>Yes, like it had mass penetration.

<v SPEAKER_03>Yeah right.

<v SPEAKER_01>And so if somebody said, like, why are these kids dying in Iraq, Mr.

<v SPEAKER_01>President, like he said that was to advance our goals in the war on terror.

<v SPEAKER_01>And then his opponents said, like, no, it it's not.

<v SPEAKER_01>Like, that's not a good way to pursue that goal.

<v SPEAKER_01>But the idea that like some kind of sacrifice in pursuit of like fighting al-Qaeda or something was very mainstream.

<v SPEAKER_01>I think the whole idea of geopolitical competition with China is like a very elite project that nobody wants to articulate to a mass public, and that that therefore makes it.

<v SPEAKER_00>Do you think that's different than the way that Japan was talked about in like the 80s?

<v SPEAKER_00>Well, the Japan thing was different because you know because I feel like I mean you look back, I mean, I don't I wasn't alive at the time, but like you look back at these.

<v SPEAKER_00>Were you?

<v SPEAKER_00>Yeah, I guess you were.

<v SPEAKER_01>I was alive in the 80s.

<v SPEAKER_01>Jesus.

<v SPEAKER_00>Um, I guess when you like look at the the coverage at the time, it seems very like you know, yellow peril.

<v SPEAKER_00>Like Molt Walter Mondale, what does he say?

<v SPEAKER_00>He said something on uh, you know, pre-campaign about how like, you know, do we want our kids like mopping the floors of factories around Japanese computers?

<v SPEAKER_00>Like that just like kind of sounds like how people talk now.

<v SPEAKER_01>Yeah, but so the difference is I I think it was almost the opposite, right?

<v SPEAKER_01>Like before the Japanese stock market crash, there was an incredible amount of like authentic grassroots anxiety about rising Japanese like clout in the world, about things like Japanese companies had all these sort of like surplus for for essentially for currency manipulation reasons, they kept recycling dollar profits into purchasing American investments, right?

<v SPEAKER_01>So, like Sony bought American movie studio.

<v SPEAKER_01>Um I mean, now it's just one of the big five American movie studios, but in the 80s that was a big deal.

<v SPEAKER_01>They bought Rockefeller Center in New York, and so there's all this, oh my god, like Japan is buying everything up.

<v SPEAKER_01>Uh the Michael Crichton book, Rising Sun, um, and and the associated movie great text of this era.

<v SPEAKER_01>But on an elite level at that time, people were saying Japan's a treaty ally of the United States.

<v SPEAKER_01>Japan's a democracy.

<v SPEAKER_00>Like, we don't actually have well, I mean, some people were saying that.

<v SPEAKER_00>Yeah.

<v SPEAKER_01>Yeah, but but I mean, I it was it was an elite focused.

<v SPEAKER_00>I don't know if I buy this.

<v SPEAKER_00>I mean, even like people who are concerned about currency manipulation and who bought Rockefeller Center aren't elites.

<v SPEAKER_00>Yeah, like r random, it's what I mean.

<v SPEAKER_01>They didn't understand the currency manipulation.

<v SPEAKER_01>They just saw hard American assets coming into the ownership of Japanese companies and were like freaking out.

<v SPEAKER_01>The Japanese are taking over.

<v SPEAKER_01>People are also way more racist.

<v SPEAKER_00>I think you're too New York City pilled.

<v SPEAKER_00>Like, are you?

<v SPEAKER_01>But also people were more racist then.

<v SPEAKER_01>That's true.

<v SPEAKER_01>You know, overtly.

<v SPEAKER_01>I think actually.

<v SPEAKER_01>Um but it was a populist criticism that like the elites.

<v SPEAKER_00>But so isn't the China one too?

<v SPEAKER_00>Like, I mean, right now, like so much of the quote-unquote like authentic energy.

<v SPEAKER_00>I mean, like again, like obviously the term elite here is like getting a little confusing, but when you think about people who are pushing for uh, you know, revival of manufacturing, people who are, you know, situating themselves as like members of the heartland, people who keep like citing the same David Augator paper over and over again.

<v SPEAKER_00>These are the people who are like considered those populists.

<v SPEAKER_01>And like, so there is there is a there is a brain dead populist argument about propping up American manufacturing jobs.

<v SPEAKER_01>Right.

<v SPEAKER_01>These are the people who would say that the worst thing that could happen would be NAFTA.

<v SPEAKER_01>I'm saying there is a different argument, which is about geopolitical competition with China.

<v SPEAKER_03>Yeah.

<v SPEAKER_01>Right?

<v SPEAKER_01>China, just China, right?

<v SPEAKER_01>So, like from a China-focused view, if we manufacture things in Mexico, that's good.

<v SPEAKER_00>Yes, those people don't exist.

<v SPEAKER_01>That is not a mass constituency, right?

<v SPEAKER_01>There is no this is why like French shoring struggles to take off.

<v SPEAKER_01>If people who were upset about jobs going to China were worried about China, then you would have a mass constituency for friends shoring.

<v SPEAKER_01>You'd be saying, look, we can get our cheap consumer goods and also decouple from China by working blah blah blah.

<v SPEAKER_00>But instead, friends shoring is like a checkmate debate point that me and you pull out to prove that people don't actually care about China.

<v SPEAKER_01>Trevor Burrus Or something like that.

<v SPEAKER_01>Or it's like we have good think tank papers about it.

<v SPEAKER_01>You know, and people have these kind of discussions.

<v SPEAKER_01>But you know, there isn't a and it's also why exports to China are very appealing to Trump.

<v SPEAKER_03>Yeah.

<v SPEAKER_01>Right?

<v SPEAKER_01>Whereas like from a competition framework, like you've got to be careful about that.

<v SPEAKER_01>So you know, I I mean I think it's a problem.

<v SPEAKER_01>Trevor Burrus, Jr.

<v SPEAKER_00>So maybe more people maybe I should like chill out then.

<v SPEAKER_00>Uh people aren't that worried about a hot war with China.

<v SPEAKER_01>We're not actually I think you we should be like fomenting more panic about this because like it's it's really bad.

<v SPEAKER_00>Okay, well we've come full circle.

<v SPEAKER_00>I still am not gonna get my BYD, but maybe I will get uh a different electric vehicle.

<v SPEAKER_00>I I'm just balking at these prices.

<v SPEAKER_00>Adam Ozumek, who is an economist, has been for for years now pointing out that it's insane that people spend like$40,000 on a car.

<v SPEAKER_01>And while as like a good But he said that like six years ago when everything was cheaper.

<v SPEAKER_00>He's still saying that now.

<v SPEAKER_00>He's still saying it now.

<v SPEAKER_00>Maybe it's a little bit higher, but still like when you look at like the median cost of a car, it's I think it's above fifty thousand dollars now.

<v SPEAKER_00>Our fact checker will let me know if that's correct.

<v SPEAKER_00>But like that's like it's actually like crazy.

<v SPEAKER_00>Median cost of a new car, fifty thousand dollars.

<v SPEAKER_01>I only ever bought one car.

<v SPEAKER_01>Um, so I don't know.

<v SPEAKER_01>It was very expensive.

<v SPEAKER_00>Yeah, and plug-in hybrid, man.

<v SPEAKER_01>Well, yeah.

<v SPEAKER_01>Not a good idea.

<v SPEAKER_01>I would actually just go electric.

<v SPEAKER_01>I I made a mistake.

<v SPEAKER_00>But I don't own the house.

<v SPEAKER_01>That's tough.

<v SPEAKER_00>Um, well, this is a great time to transition to peer review, I think.

<v SPEAKER_00>All right, let's do it.

<v SPEAKER_00>So peer review is our section where uh Matt locks back into his love of social science research.

<v SPEAKER_00>He has a paper for us today about smartphones.

<v SPEAKER_01>Yes.

<v SPEAKER_01>Uh my paper today is The Effects of School Phone Bands: National Evidence from Lockable Pouches by Hunt Alcott, E.

<v SPEAKER_01>Jason Barron, Thomas D.

<v SPEAKER_01>Angela Duckworth, Matthew Genskow, and Brian Jacob.

<v SPEAKER_01>Uh so this is looking at there's been a lot of discussion about smartphones in schools um over the past few years.

<v SPEAKER_01>There's been a big trend to uh requiring kids to uh not have phones, lock them down.

<v SPEAKER_01>Um so they looked at a um the use of uh pouches, right?

<v SPEAKER_01>So they're able to like verify that this pouching is occurring.

<v SPEAKER_01>Um, and then they showed that, you know, the pouch rules um substantially reduces phone use as measured by GPS pangs and teacher reports.

<v SPEAKER_01>Um they show that disciplinary incidents increase in the short term, I think because teachers have to enforce the rule.

<v SPEAKER_01>Um, student well-being goes down because kids like to have their phones.

<v SPEAKER_01>Uh, and then they find that, you know, in in later years this levels out, um, that students end up like better off subjectively, that the disciplinary issues go away because kids are just kind of following the rules.

<v SPEAKER_01>Unfortunately, I mean, the academic benefits that I think people were hoping to see from this don't really materialize.

<v SPEAKER_01>They say that, like, maybe some scores go up and maybe some scores go down, uh, but on average, there is zero effect, um, little evidence of effects on school attendance, on classroom attention, or on perceived online bullying.

<v SPEAKER_01>This was widely reported in the press as a disappointing uh result for the phone ban movement.

<v SPEAKER_01>Um, and it generated much of the pushback that you normally see when people get unwelcome empirical social science findings.

<v SPEAKER_01>Uh the statistical power of this experiment is not that high.

<v SPEAKER_01>You know, it's looking at a relatively short time span, blah, blah, blah, blah, blah, blah, blah, blah, blah.

<v SPEAKER_01>But basically, um, making the kids be less distracted by phones all day did not um make them better at reading and math.

<v SPEAKER_00>So um when I was first reading this paper, uh, I uh saw that the tested intervention were these yonder pouches, as you mentioned.

<v SPEAKER_00>Um so there are lots of different ways that like teachers or schools can like ban phones.

<v SPEAKER_00>They can ban them just during class time where like you have to put them in your pocket and like you'll get in trouble.

<v SPEAKER_00>So the teachers are like constantly policing, like, hey, you put your phone, you know what I mean, like whatever.

<v SPEAKER_00>You can also have these like pouches, which are if you've ever I I've been to a comedy show once that forced me to put my phone in one of these pouches, and so you get to like keep the pouch with you, and like you just can't unseal it.

<v SPEAKER_00>Like, you need the person to like unseal the pouch.

<v SPEAKER_00>Um, and then there's like other versions where like I know teachers will like have uh front of the room like baskets or like places where kids can put it with their names on it or whatever.

<v SPEAKER_00>And like there's like lots of different things, and so they're testing the specific one.

<v SPEAKER_00>I think this is like this intervention is not as bad as like the teacher monitoring constantly and saying put your phone away one.

<v SPEAKER_00>But I also don't think it's like anywhere near as like my ideal, which is like literally like you cannot have it in the school.

<v SPEAKER_00>Like maybe you can like have it in your locker, but you are not allowed to have your phone on your person at all over the course of the day.

<v SPEAKER_00>And like part of this is like there's like significant like research now about like I just want like a mat like I when I had this yonder pouch at this like comedy show, I was thinking about like, oh man, I wish I could have my phone sometimes.

<v SPEAKER_00>Like I was like constantly distracted by like the fact that I couldn't get it, and like there's all these reports of students like figuring out how to like break into these pouches, and like they do verify in the paper that like GPS pings went down.

<v SPEAKER_00>So like it's not like mass jail breaking of their phones, but like just like there's like a cognitive like load of just like having the possibility of having your phone.

<v SPEAKER_00>Like, just like imagine like other things, like if there was just like a television next to you or your best friend next to you at your off at the office, like just even if like you're supposed to be working, like these things, like taking the effort to not do something that is distracting is actually pulling you out of like working or engaging with a classroom or whatever.

<v SPEAKER_00>So, like I'm like a little bit.

<v SPEAKER_01>We were friends, you know, we're here at the office.

<v SPEAKER_00>We are, and we get distracted constantly.

<v SPEAKER_00>I have to like leave the office to work.

<v SPEAKER_01>It's not my fault.

<v SPEAKER_00>I'm uh put me in a pouch.

<v SPEAKER_00>Exactly.

<v SPEAKER_00>We gotta yonder pouch mat.

<v SPEAKER_00>But I just think that that's one thing.

<v SPEAKER_00>Second thing is just like, you know, people are really down on this paper, and like as someone who is not like a smartphone theory of everything person, like whatever.

<v SPEAKER_00>But I just think that like eight hours the day, you don't have your phone, but the other 16 hours a day, you do have your phone and you're like TikTok maxing AI slop.

<v SPEAKER_00>Like, yeah, like I don't know if your test grades are gonna go up that much, but like seems good that like the school is not this impossible to manage like rage cage.

<v unknown>Like, you know what I mean?

<v SPEAKER_00>I mean like it would have been good if the scores went up, but like I don't I wasn't like super shocked by that, I guess.

<v SPEAKER_01>Look, I'm still comfortable with it as a policy since at the end of the day, like the scores didn't go down.

<v SPEAKER_01>Um, and the subjective well-being actually went up.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>Which I think is sort of is motivating actually parents around this kind of stuff most.

<v SPEAKER_01>I mean, I'll just say, like, in the morning, you know, I've got a fifth grader and we live really close to the school.

<v SPEAKER_01>So we always get there early, and the kids hang out and play.

<v SPEAKER_01>And most of the time they're like running around or they're climbing trees or other kinds of stuff like that.

<v SPEAKER_01>This morning I was like talking to another mom at drop-off, and I said to her, I was like, what's going on?

<v SPEAKER_01>Like the every everybody's too quiet.

<v SPEAKER_03>Yeah.

<v SPEAKER_01>And we like looked over, and what happened is like there was a kid there who's not usually there early, but who got there early today, and he had his phone with him because he's one of the fifth graders who has a phone, and the kids were all huddled around watching a video or watching him play a game or something like that.

<v SPEAKER_03>Yeah.

<v SPEAKER_01>And I'm a huge hypocrite about this because you will constantly find me staring at my phone.

<v SPEAKER_01>And, you know, Jose thinks this is like the dumbest shit ever that I get on this high horse because I'm always like, you know, I'm on my tweets and stuff.

<v SPEAKER_01>Um, but it's like it seems like it's better for the children to interact with each other and play than to be on their phones all the time.

<v SPEAKER_01>That being said, like I am actually surprised that it didn't have more academic benefits than this.

<v SPEAKER_01>It just seems like to me, like it would be a huge distraction that would that would hurt people's learning.

<v SPEAKER_01>I'm putting this in the bucket of like, I'm not trying to be a total social science denialist, but like I don't I don't really believe it.

<v SPEAKER_00>I'll but it was it was a pretty short time span.

<v SPEAKER_01>So like it was Yeah, I mean, it it's relatively brief.

<v SPEAKER_01>Um the other thing I will say, I mean, not just in the spirit of like total skepticism, but the limits of this kind of experimental evidence is that you know what we're really talking about with phones.

<v SPEAKER_00>Yeah, I mean, we're talking about between April 2025 to February 2026.

<v SPEAKER_00>Like I mean, there's summer in that in which like you have your phone the whole time.

<v SPEAKER_00>There's like five months of like instruction, much of the phone.

<v SPEAKER_00>Yeah, no, no, I agree.

<v SPEAKER_00>I agree.

<v SPEAKER_01>I mean, it it might be better over a longer term.

<v SPEAKER_01>But also I think we're really talking about the sort of dynamic interplay of rules and norms.

<v SPEAKER_01>Right.

<v SPEAKER_01>And just all schools everywhere saying that like while school is in session, you can't have a phone isn't just like a school policy.

<v SPEAKER_01>It's like a statement of society about like what is the purpose of school, what is the role of phones in our lives that I think has implications for because I mean one thing is like, well, it shouldn't just everything be up to parents, right?

<v SPEAKER_01>But like as a parent, you know, we we live in a society, right?

<v SPEAKER_01>And it's like I will never be the first parent in my peer group to get my kid some new kind of advice uh device.

<v SPEAKER_01>And I probably also won't be the last.

<v SPEAKER_02>Yeah.

<v SPEAKER_01>You know what I mean?

<v SPEAKER_01>Like I'm gonna be somewhere in the middle and I'm comfortable being below average, but like there's only so far below average I'm gonna go.

<v SPEAKER_01>And like things that shift where the midpoint is, then impact how parents parent.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>And how parents parent is probably a bigger deal than like literally what's the rule in the school.

<v SPEAKER_01>Yeah.

<v SPEAKER_01>But the school is where we make collective decisions about stuff.

<v SPEAKER_01>But like, you're not gonna find this in a difference in differences study of the rollout of the policy.

<v SPEAKER_00>I mean, I think over a longer time period you could probably find this.

<v SPEAKER_00>But I think that like, you know, I have a friend who works as an occupational therapist in a public school system in in the US in a major American city, and she, you know, she talks all the time about how, you know, a lot of her work is she's evaluating young children for developmental delays, and that like increasingly, like largely what's happening is that there are lots of kids who like would not have developmental delays if not for the fact that they were just like literally plopped in front of an iPad for like 24 hours, and like once like that intervention kind of happens, like they're not doing that, like these people could not enter gen ed and like they're not actually necessary, uh don't need her her services anymore.

<v SPEAKER_00>And what she finds is she's having these conversations constantly with parents, like all the time about like, hey, like tell me about screen time use.

<v SPEAKER_00>And like it's like really like, and this is just like an agreement to what you're saying, but just like it's like very, very difficult to have this conversation that parents feeling they're being shamed for it.

<v SPEAKER_00>And so they get like really hostile with her if she even brings up like screen time.

<v SPEAKER_00>And so, like, given that context, given that we're still in this equilibrium where parents are clearly themselves, like, I mean, not all parents, but like somewhat addicted to their phones, just like Matt on Twitter, like, can't get off.

<v SPEAKER_00>Uh, and me on like short form video, I just, you know, can't get off of it.

<v SPEAKER_00>Um it's not surprising that, like, yes, okay, they're now in their yonder pouches all day in school, but then they go home and they just immediately mainline.

<v SPEAKER_00>And maybe it's even worse now.

<v SPEAKER_00>I mean, like, they've been feeling withdrawal all day from their like, you know, AI fruit slop videos, and they're now watching even more.

<v SPEAKER_00>Like, I don't know, like, I think a really great study would be seeing like screen time use.

<v SPEAKER_00>I don't know if Apple shares that with researchers, but like, does screen time use change?

<v SPEAKER_00>Is the number of hours they're watching change?

<v SPEAKER_00>Are they sleeping less?

<v SPEAKER_00>Like, it's just like there's so many things that could be going on here because until we achieve like sort of society-wide view that like it is largely not good for like minors to be spending like hours and hours a day on their phones doing non-academic stuff.

<v SPEAKER_00>Like, I just don't think we're gonna have some like massive change in like test scores.

<v SPEAKER_01>Aaron Powell But what if they're like listening to podcasts?

<v SPEAKER_00>Then it's fine.

<v SPEAKER_00>Or watching podcast videos.

<v SPEAKER_01>Checking out my tweets, like, like and subscribe.

<v SPEAKER_01>Um I mean it's it's like we're all apart at the same hypocrisy, unfortunately.

<v SPEAKER_00>Not me.

<v SPEAKER_00>I'm I'm I'm weaned off my smartphone.

<v SPEAKER_00>What do you mean?

<v SPEAKER_00>I got a dumb phone and now my smartphone's locked down.

<v SPEAKER_01>Wow.

<v SPEAKER_00>Yeah.

<v SPEAKER_01>Okay.

<v SPEAKER_00>You're not you're not you're not following my dumb phone journey.

<v SPEAKER_01>I don't know.

<v SPEAKER_01>I guess right.

<v SPEAKER_01>I get some I get some some blue uh some some green text from me.

<v SPEAKER_01>It's gross.

<v SPEAKER_00>Well, I think it's a great place to end.

<v SPEAKER_00>Everyone, uh, thank you so much for listening.

<v SPEAKER_00>If you enjoyed the show, uh subscribe, like, tell your friends about it.

<v SPEAKER_00>We're still, you know, early days and we're growing and we want to make sure to reach more people.

<v SPEAKER_00>Bye.