by trump to be the next treasury secrary. he founded the key square group investment firm previously raised money for democratic presidential candidateal gore, hillary clinton and barack ama. and served as a chief iesent officer for soros fund management. more rently, he raised more than $57 millionor donald trump's 2024 campaign. if confirmed, he would become the second guy person to serve in a presidential cabit after pete buttigieg. nextsct bessent in his own words. we start with his remas a conservative economic policy suiteld on the sidelines of the 2024 republan national convention. he talked about penal economic priorities for a second trump aintration. ond trump administration. >> let me start with you. you are one of the leading financial minds in america.

have made a lot of money in the financial markets. have been a strong supporter of donald trump. you talk to him all the time. you see scott on fox news all the time, fox business news, as well as jason and charlie, of course. you're talking to trump. what do you think he needs to be doing, in addition to the things we've been talking about, what does he need to do to get this economy going because you're talking to him all the time? >> i think it's a lot of what you said. i suggested to him that his good friend, the prime minister of japan, who was tragically assassinated, had something called the three arrows. i suggested to president trump that he had a similar three arrows and just to back up a little. i have a good life. i used to always say, i want fortune, not fame. but i've come out from behind my desk in this election cycle because i do believe the

2024-2025 is the last chance for us to grow our way out of this massive debt. that the biden administration has put us under. and if you hear the former fed vice chair, it was her idea to get rid of the average inflation targeting, right when inflation took off, but she's now head of the chair of the national economic counsel and she gave a speech last year and the just the tax program that you've shown. so they have spent, spent, spent and now i think they want to put the u.s. economy in what i call an economic respirator. or ventilator. you go on a ventilator because you're sick and 50% of the time you don't come out. and i think we're about to go -- they want to put us on an economic ventilator ala

european-style social democracy. so what would i do? to grow out -- i think we need to freeze, no the cut, discretionary spending. except for defense. i think as dr. laffer said, defense is an investment that you never hope to use. president reagan took defense spending as a percent of g.d.p. from about 4% up to 5.5%. progressives said, he's a war mongerrer, budget hawks said, you're crazy, you're going to blowout the deficit. and now we're at 3% of g.d.p. because he took down the soviet union. so freeze discretionary spending except for the defense, deregulate 3% real economic growth, bring -- have a complitment to bring -- have a o bring the budget deficit down to -- by 2028 to 3%.

as a financial markets person, i can tell you financial markets will respond to that area well. good forward guidance on that. i told the president come you didn't get us to 7%. you don't have to get us to 0%. entitlement reform. you don't have to do the big entitlement reform until you get the current house in order, and the current house is on fire. 3% real economic growth. 3% deficit to gdp by 2028. to your point, a 3%, 3 million more crude equivalents per day. crude and gas. we are producing about 20 million, so up that 15%. i have been looking too, the other three, saudi arabia is holding off 3 million barrels of production per day. maybe convince our friends in the kingdom that lower oil

prices, good economy is better for them and the world. >> you're one of trump's top economic advisers. what are two things that you think he should do right out of the gate? we will start with you, scott. scott: he should make clear that he will tackle the budget deficit because everyone thinks that he is prolific. then, he should implement tech policies -- >> speak into your mic. scott: all right. >> mine is on. >> i think mine is on now. >> no, they are not on. >> keep talking. scott: all right, anyway, make

it known that he is fiscally responsible, tax cutter, announce that he is going to follow through at a level on the deportations. there are 1.5 million final orders of deportations for illegal immigrants. we should give them 60r days to leave. >> more now from scott bessent, president-elect donald trump's pick to be treasury secretary, and his own words in 2024 mr. bessette was a featured speaker at a manhattan institute discussion on fiscal policy, the economy, and the biden administration's economic policy.

>> hello, everyone. it's my great pleasure to introduce scott bessent, the founder, ceo, chief investment officer of a global assessment firm he launched in 2015. prior to that, he served as chief investment officer and held a number of roles since the 1990's and 2000, overseeing investments in europe. outside the world of finance, he taught economic history at yale, his alma mater, and been a prolific philanthropist, including in his home state of south carolina. please join me in welcoming him. [applause] scott, you have been a respected voice in financial markets for decades. you're only recently started weighing in publicly on larger questions of u.s. public policy and the stakes of the 2024 election. what motivated you to start

speaking out about the direction of american economic policy? scott: first, thanks to you, the manhattan institute, for having me. when he invited me, he said just of you know, we have heather mcdonnell -- you had me at those. i don't need anymore. it is a good question. i've always been politically interested for macro investing, you are always politically adjacent to geopolitics. people ask me, what is macro investing? we live at the edge of geopolitics, economics, and gravity. eventually gravity wins. so, for a long time i've been analyzing political situations, economic situations, and i just decided that 2023-2024 is

important for me to come out from behind my desk, because i think we are at a very unique moment here. i would list three reasons, or three things i'm focused on as, one, just in the u.s., i'm alarmed by the size of these deficits and the spending. we do not have a tax collection problem. we have a spending problem. i have never really seen -- well, we've never seen anything quite like this. i am an economic historian. for better or for worse, i can tell you what the budget deficit was under lyndon johnson in 1967 as a percent of gdp. this is really alarming in terms of this 6%, 7% deficit during

peace time, during a non-recessionary time. i think that the buying the administration knows what they are doing. there are two very different choices for america. they have a central planning, top-down mindset going back to the 1960's and 1970's revisited. i was at yale when james tobin was there. he was janet yellen's phd advisor. i thought we had put all this on the scrapheap of history, but it's back. if it's not working any better this time, i would argue probably worse, i would think we were confronted with that choice -- maybe we will get into my view of what you want to call it

bidenomics, bidenflation, bidenitis, like a cute disease, when i'm in a particularly bad mood i call it bidenism. i think on the others, we see from trump 1.0, it is not a strict adherence to reagan's principles, but it's a pretty good 21st century adaptation, and it really worked for everybody. i will bring it back to number three, but igniting the private sector and the kind of balance across all income distributions and per capita labor and growth that we had, i thought was phenomenal. that's number one. number two, i think, as an

economic historian and someone who has been in markets for 40 years, i actually think i'm starting to look like it now, but i think we are also at a unique moment geopolitically, and i could see in the next few years that we are going to have to have some kind of a global economic reordering. something along the line of new bretton woods, or if you want to go back, something back to the treaty of versailles, there is a very good chance that we are going to have to have that over the next four years. and i'd like to be a part of it. i have studied this. i think it's a unique skill set.

three, as both of your most recent panelists said, the republican coalition is now a very new coalition. and i am very dedicated and focused to making sure that keeps expanding and to make sure that this new group who joined the republican party, that the policies are good for them. that we retain those groups and continue growing and turning it into majorities. two weeks ago here in d.c., a gentleman and i had a day with 150 or 200 black entrepreneurs and it was fascinating. many of them have always been republicans. some have just switched. some are trump curious. to spend the day with these folks was so enlightening.

they feel as though they are not getting adequate representation in the republican party. they are insulted by the, oh, donald trump went to jail, so that's why black people are voting for him. these people at this event are entrepreneurs, business people first-generation, they are rich. they are franchise owners. they are car dealers. they are not ivy league graduates or fortune 500 companies. this is main street. that is the natural progression for the republican party. the third reason for coming out from behind my desk is to make sure that constituency gets bigger and bigger. reihan: you painted a pretty bleak picture of biden's economic agenda. i think that he would say my agenda has been a historic success. labor markets are tight, the inflation reduction act and chip

act are spurring investment. while the president acknowledges inflation has been a challenge he would argue that the worst is behind us. let's drill in a bit about where you think that a second bite intern will take the country economically. again, what the president is saying is that this course is delivering, ultimately, wage growth. it will help us compete with china and what have you. when you are looking ahead to another four years of president biden, where do you see the u.s. economy at the end of that? scott: back to what we said in one of the earlier panels, he is giving away so much money. why are the programs so unpopular? imelda marcos was on a bus throwing out dollar bills and she was super popular. money can buy you votes and

love. that is not happening this time. to give my overview, you've got this top-down view and this turning machine where you think you can turn the dials, kind of back to jfk's economic cabinet. the economy is too big and too complex. these are linear people with a linear program, and they've gotten a linear result. so, the linear result, the global result is unemployment is low, investment is high, and everyone is unhappy. the output is fine, but the nonlinearity in the system means that all the components really aren't working at all. i've been quoted before as saying i can make zimbabwe great again if i had a 7% budget deficit.

or reserve currency. i think one of the former panelists was getting at, when talking about the fed putting on the brakes and the buying administration hitting the accelerator, in grand prix racing it is called to for -- it is called two-footed driving. you are hitting the gas and hitting the brakes going around the corner. i think that is what is happening here, this inflation, i don't think the american people are going to forgive him for it. reihan: so you think even though it is moderated somewhat, you think we are on kind of a knife edge where it can come roaring back without material change in economic policy? scott: it is always there. it would re-accelerate. we've had a very steep price level declined that i think has americans seething. seething.

my firm is not very good at -- we don't try to predict particular numbers. we tried to get the direction of travel. we are getting an employment number tomorrow. maybe the heat has come off the jobs market, but it has come off the jobs market in a bad way. through mass, unfettered immigration. that should not be a tool in the toolkit for getting down inflation, because back to the question of why everyone is unhappy is, can you imagine what the bottom 25% of wage earners wages would have been if we hadn't had, depending on the number you want to use, 10, 15, 20 million new arrivals? if i look at these policies, there is what i believe a flawed macro machine, and they keep

trying to make micro adjustments. they caused the great inflation, the housing market takes off, and then mortgage rates take off , and young people or old people are now locked out of the housing market. so, we are going to announce a $10,000 starter kit and then a $400 a month subsidy, and just all these irregularities and contortions in the system that are so unhealthy, and all they are doing is pushing the housing market up more. but the real problem in the housing market is going to come in 12, 18, or 24 months, because new arrivals typically take 24 months to start forming households. so guess what, there's going to be more competition for housing,

-- reihan: a relatively fixed supply? scott: probably at a 2.5 million dwelling deficit. with this top-down view, they're just getting slice after slice of the problems at all the micro levels. reihan: sorrow, more housing insecurity and maybe even more homelessness in the streets of some american cities. then you could try to say, we will build more public housing, or what have you, but that's not a great track record. building on that, many americans are itching for return to the low interest rates of the past 20 years. others believe that ultralow rates have badly distorted the market for risky assets. with european central bank cutting their key policy rates this week, what do expect from the fed in the coming months and what should the fed do? do you think grabbing jay powell

by the lapel and saying cut the key policy rate down is the right step? scott: i think bank of canada and ecb can cut, because the canadians and the europeans exercise some level of fiscal prudence. they are not two-footed driving. there is a natural economic cycle, and jay powell has been easing, for whatever reason, he felt compelled to ease financial conditions last fall, after the fomc meetings in november and december. the statements were very anodyne, and he walked out at a press conference and gave very dovish guidance of rate hike, rate cuts are coming and a massive ease of financial conditions. by doing that, what happened? he pushed up the stock market,

which benefits the top 20%, and then we are back to the bottom 50% who don't own assets, they have debt, so rates have had to stay higher for longer. i actually think that he has hurt biden's chances by reigniting inflation, pushing economic growth, re-accelerating economic growth, when it could have been slowing. and i think they could have been cutting rates, but they are not. and i would also predict that it won't be a slowdown in inflation that causes rates to get cut. i think it will be an economic wobble. reihan: you mean that there is going to be some kind of, maybe a quarter of negative growth, or something like that? scott: for some kind of slowdown

in the economy -- i think it will be an economic slowdown that actually causes it. the administration has a lot of tricks up there sleep between now between november 5, november 6, november 7. everything is up for grabs. but we're probably going to see $150 billion come out from the covid employee retention checks. those checks will conveniently start getting mailed out next month. reihan: a number of administrative measures have have been designed to buoy the economy. scott: back to the younger voters have really started to turn on president biden. i've seen some of the numbers. the under 35 cohort had been very, very attached to the democratic party, and that is starting to move. a big portion of that is housing. if you look now, the

philadelphia fed has been measuring credit card delinquency since 2012, and we are at the highest rate of delinquencies since they have been measuring. and that is primarily the lower 25% income group. the other group that has very high credit card delinquency is 35 and up, because they don't have assets. reihan: there is a stark difference between the tax policies being proposed by former president donald trump and incumbent president joe biden. let's start with biden. among other things, the president has called for steep tax increases on corporate and investment income and insists this will leave middle and lower income households untouched. we talked about your concerns with deficit and debt. where do you stand on biden's approach and the tax increases he is most focused on? scott: why did i come back from behind my desk now? i viewed 2024 as a last chance to grow our way out of this

problem. for more years of layering on this amount of that and then end up in a permanent european malaise. maybe you have to go to a higher tax a -- higher taxation regime to hold things in place a la france. i do think there is an opportunity to grow our way out out of this, but i think it is biden layering on the debt. i think i'm deeply cynical about this. spend, spend, spend, many of the assets are not productive. clearly, they have gotten rid of scoring. you are replacing things that work with things that maybe work less well. these could be stranded assets. now, they are going to say we've done all this spending, we've got to pay the piper. i have a piece that came out

yesterday as part of the series, they asked about 10 to 12 people for the national economy magazine, how do we restart american productivity? my number one, you do it through tax policy and you keep high return, high after-tax returns on capital. raising these capital gains taxes, raising taxes, raising corporate taxes is just the wrong thing. it is a sleight-of-hand when biden says he's not going to raise taxes on anyone making less than $400,000. if you're going to move cap gains up to the same level as ordinary income, that's going to apply to everybody. i think this is worse and worse. reihan: then there is the

incidence of corporate taxes as well presumably has an impact on wages and indirectly consumers. scott: we saw an investment boom 2018, 2019. the other thing is, the 2017 trump tax cut, a lot of the deficits were frontloaded because the investment expenses were in those years. the biden deficits were actually worse, because the expense was 100% on day one. i just think this is a dynamism killer. some of these other ideas, like taxing unrealized capital gains, if you want the tax unrealized capital gains, if you want to drive the venture capital industry offshore, i couldn't have come up with a better way to do that. i am on a foundation board, and every three years, to make us feel not very smart, they take

us out to silicon valley. on the last trip we said we don't want to meet the fund managers, we want to meet the entrepreneurs. what was fascinating, six out of the eight entrepreneurs were not nativeborn americans. that is high-end, high-class immigration. but those people could all be in singapore, they could all be in israel, they could all be in abu dhabi, and we will drive that whole class offshore. reihan: added earlier on you -- you noted earlier that you saw the trump presidency as a shrewd adaptation of the reagan era playbook for the 21st century. i wonder if you could elaborate on that. when you think about the ways in which a selective departure, the way in which he did reaffirm the reagan playbook, talk to us about the parallels. scott: let's go back to where we were in 1980. reagan came in with high

inflation and the great malaise and the soviet union. trump came in, it wasn't malaise, but the recovery post gfci had not been strong. -- post gfci -- post-ufc, the recovery had not been strong. they both immediately went for tax cuts. they both focused on the biggest external threat. reagan spent the soviet union into oblivion. i think trump had a different idea for how to deal with china, and makeup for a lot of bad trade, historical trade agreements. and kind of pushed things forward. i think that once trump was in

office -- and even make america great again, it was a reaganesque set. it's an optimistic vision of america, instead of managed decline, which i would think a biden 2.0 would be. but i will say, i think whoever wins has a mandate. if joe biden wins, he has a mandate for central planning, things on the periphery, novel economic ideas, social policy. and donald trump will have a mandate for deregulation, closing the border, and energy independence, and projecting strength. both candidates will have a mandate. reihan: going back to tax policy

for a moment, donald trump is calling for making the tax cuts and jobs act permanent and calling for a big across-the-board increase in tariffs, a policy that critics see as self-defeating. is there a role for tariffs in a conservative economic policy agenda? scott: let's go to alexander hamilton. he believed in tariffs for two reasons. when he was setting up the treasury there was no real revenue. so, tariffs, until world war i, tariffs were the main source of revenue. he believed tariffs to generate revenue and protect nascent u.s. industry. i would add a third reason for tariffs at it is negotiating. so, i think that given donald trump's credibility and what he has done in the past on tariffs that we might not have to get to tariffs, but the threat of

tariffs will change the quality and the fairness of a lot of historically poor trade deals. president trump, ambassador lighthizer was very focused on the trade deficit, and they talk about it is a function of bad trade agreements. i think the tariffs are one way to remedy that. but i think anyone with an economics background will also tell you the trade deficit comes from our budget deficit and from the level of the currency. so, there is this interaction and calculus between the three. i don't think -- i believe in a conservative agenda tariffs have a place, but i think it is part of a calculus of all the tools

in the toolkit. reihan: you might be among the world's leading experts on currency fluctuations and how to think about them. if you go back to the reagan era come you had the plaza accords. scott: the plaza accords and then the louisville courts, up and down. reihan: talk about whether you see large-scale currency intervention as an important tool for the next presidential administration. scott: i don't think it has to be a large-scale currency intervention. i think what we have to have is to go back to the 1980's and even the 1990's where there was a large-scale coordination between currency, between fiscal, between monetary, and with the chinese, with a lot of these systems, these excess

reserves that are being accumulated, the level of the excess reserves just tells you that probably there is the initial trade agreement is not right, the level of currency is being suppressed, there is hidden subsidies. there is something wrong there with these excess reserves. is there something else that could be done? or, could you say come you are accumulating these excess reserves, you are moving out of treasuries, maybe that is a good idea? reihan: essentially the strength of the dollar now is a product of interventions other states are undertaking, including adversaries, and we need to be more proactive? scott: i think we are not thinking about it the way we use two. i think it is back into this

calculus. the other thing is, when you are running these massive deficits that generate the high inflationary level, the biggest currency in the world is now a carry currency. there is on forward points a real pick in yield over the japanese yen of 3%, 3.5%. that is not sustainable or optimal over the long-term. but i think we have to keep coming back to china, because how do we think about the chinese currency? our research at my firm shows that we think the chinese currency on any academic model is now undervalued. they've done a big internal devaluation, cut labor, written

down real estate, very similar to what happened to the europeans 2011-2012. the chinese currency is in three different equilibriums. they are statistically cheap, you have 99% of your citizens if they could take the money out they would, and then you have the 20% chance of foreign investors who probably believe if i am holding an rmb there is a 20% chance on not getting my money back. i think the rmb is something we have to investigate the relationship between that and the dollar. charles kimball berger one of the great currency thinkers of the 20th century, i think kimball berger was a big

part of that. at the time it was between the u.s. and sterling. he called it the important pair. we have to rethink the important pair for the u.s. and cnh. when you go to reserve currency status in the history of the world there have been six reserve currencies. what do the former reserve currencies have in common? portugal, spain, holland, france, the u.k. they were also security zones. how did they lose reserve currency status? especially spain. they got highly leveraged and could no longer support their military. when you tell me, people in the biden administration say we want to keep reserve currency status but the 10 year budget

projection calls for a 10 percent cut in the fence in a world that has seen if anything defense spending rise come you can't keep your reserve currency status if you lose the defense umbrella. reihan: you are an admirer of shinzo abe. faced with persistent deflation, his economic revival consisted of three arrows, aggressive monetary policy, fiscal stimulus, structural reform. if you were to advise him -- say, donald trump if he were elected president, what would you suggest as the three arrows for a successful presidency? scott: i might even advise him to campaign on three arrows. 3% real economic growth. how do you get that? through de-regulation, more u.s.

energy production, slaying inflation, forward guidance on confidence for people to make investments so the private sector can take over from the bloated government spending. two, i would urge him to make public his desire to get the deficit down to 3% by the end of this term. he didn't get us to the 6% or 7% deficit. they averaged 4% under him. get that down to 3%. then, 3 million more oil barrels per day for u.s. energy production. that would be my 3, 3, 3. that would substantially decrease the oil price, which would bring inflation -- that is

one of the number one of the number-one drivers of inflation expectations. then, back to the fed, they could go into a proper easing cycle. reihan: you started your remarks by describing how that has been a big motivator for you getting in the fray, getting into the public policy debate nationally. this year, the federal deficit will land between 6% and 7% of gdp and the primary deficit will be close to 4%. that is a staggeringly high relative to europe, relative to canada -- as you mentioned. it is really an outlier when you are looking at other advanced market democracies. you're talking about getting the deficit to 3% overall, not just the primary deficit. talk to us about a path that you consider politically realistic and credible. donald trump is someone who is a pragmatist, someone who won't want to tank the economy, but won't be closed to the idea that

some fiscal consolidation might be appropriate. when you're thinking about the path, what does that look like? some fiscal consolidation that is not something that will cause an enormous amount of economic pain? scott: my earlier point, i think that we are at the last chance for growing our way out of this. it has to include -- we reinstate the 2017, the tax cuts and jobs act, i think we can tame this -- you know, the green new deal, probably save a trillion over 10 years on that. probably something to do on medicaid in terms of empowering states, no cuts.

i think on discretionary spending we probably need to do some kind of a freeze, except defense. i think the market will respond to that. i have been very outspoken. i noticed with great pleasure in the last 48 hours that senator kennedy, louisiana and senator hagerty from tennessee took secretary on to task for shortening the u.s. debt maturity which eased financial conditions. people talk about criticizing the fed, i think the treasury has taken over the fed. as the former fed chair, she knew how to do it. i think there is a chance that you can get into a good reflexive cycle on debt cost, because i think it has been imprudent to finance at the front end. every emerging market blowup

starts the same way. you end up with an asset bubble -- sound familiar? it is driven by high deficits. high deficits in an election year finance the shortened. i call it the 3 body problem. you see it in turkey. you see it in argentina. you see it in venezuela. this year, interest on the debt is going to be $1.1 trillion. reihan: more than the defense budget. scott: more than the defense budget. i have an article coming out in the next few weeks. i was writing congressman mike gallagher, but he has gone to the private sector. he has privatized himself. i am a big fan of the congressman. in it i say these high deficits are a national defense problem. these high deficits are going to create a national defense

problem. cicero said, he had some quote like, unlimited finance is the sinew that drives war. that the u.s. ability to be able to leverage up during a conflict is -- the treasury was able to expand the deficit. stephen was talking about it earlier in terms of whether it is a covid crisis or war. u.s. treasury was able to save the country during the civil war by expanding the deficit, were able to save the economic well-being of the country during the great depression by spending, and were able to save the world during world war ii. we have to get this down or we have no room for maneuver.

having said all that, it goes to 1.5 trillion mechanically if there are no interest rate decreases this year. i think, president trump with the right policy could create a reflexive self-reinforcing cycle on the downside. when there is talk, these entitlements are massive, i think that the next four years isn't the time to deal with them. we've got to deal with the discretionary portion of the budget and get that under control. i think the signal -- i always say crawl, walk, run. we have to crawl, maybe walk, our way to get the current deficits under control. the next step is for future administration to have the confidence to deal with the entitlements. reihan: you spoke earlier about

the historical role of tariffs in protecting nascent american industries and the notion of tariffs to be used for negotiating leverage. there is another way tariffs have been used, as a source of revenue. i wonder, when the former president talks about the idea of across-the-board terrorists, particularly large tariffs on china, and president biden announced his own tariffs on chinese electric vehicles and other goods, do you see a role for tariffs as a revenue source? some say this amounts to a consumption tax on american households. if there is a geopolitical benefit, do you see that as a credible or reasonable strategy to help achieve fiscal consolidation? scott: yes. let's say that there is a 10% tariff. having done currencies for a

long time, some portion of that will result in currency appreciation. normally it is two thirds of that. now you are collecting 10%. the lift on the currency does 6%, 7% of it for you. reihan: it hurts exporters. scott: it hurts exporters, but you are also using it as a geopolitical tool. i was at a recent council on foreign relations meeting and jared bernstein was talking about biden policy to him anything they don't like is a market failure. everything is a market failure. in the q and a a woman from a european think tank said you said the word friendshoring, but

you never tell us what it means to be a friend. tariffs, currencies, in terms of bilateral trade agreements, i think in terms of security agreements, i think in terms of values, i think we should make it very clear that there is a green, yellow, and red bucket. we let everyone know where they are. reihan: here's what we ask of you. scott: here is what we ask of you. you can choose which bucket you want to be in. here's what you get for being in the bucket. reihan: i believe we have time for a few questions from the audience. >> market watch. there is definitely a view that in the first trump presidency the tax cuts and spending were

not good for our country's financial health. what makes you think that -- he has called himself the king of debt. why do you think things will go better in a second presidency on that front? scott: that view would be incorrect. it was fantastic for the country. working wages went up. capital investment went up. the tax collection level never went down. then we hit covid. i think we don't know. things were going very well. i'm not sure. i reject the view that it didn't work for the country. the debt -- absolute debt to gdp i think would have been going down from 2022 onward.

i think the tax cuts and jobs act were a homerun across every segment. it was fueled by private sector expansion. it wasn't fueled by government spending. and, and, wait for it, non-inflationary. because the demand from the private sector was met with the deregulation, as opposed to now the demand shock is being met with supply constriction through regulation. reihan: any other questions? sorry, there is someone on this side of the room and you will be next. >> thank you. the daily mail. in the background, you have been

to several of these fundraisers. what is the mood on wall street about a possible trump victory? are they optimistic or pessimistic? could you give me an idea of who they want to see as vice president? scott: i have no particular expertise -- i will work backwards. i have no particular expertise on the veep, but i can tell you i think they would be happy with the list that leaked out yesterday. the wolf of wall street group would be very happy with that. i think the wall street group was always going to come back. i find it more interesting the venture-capital cohort who is supporting president trump. as they say in las vegas -- this is a completely new

group. in silicon valley it is ok to be a republican. it isok to support donald trump. i found the stephen schwarzman on why he is coming out for donald trump was anti-biden sentiment. pervasive anti-semitism and a lot of these policies. there are two candidates now, and there is a clear choice. >> i jumped the line, i guess. scott, you mentioned you think policies can get real gdp through 3%. potential gdp, by most people's estimates, was not much more than 2% in the previous

administration. no one thinks that it has changed all that much. where do you think the big -- going from 1.8 to three is a big jump. where do you see the big difference is coming from? scott: i think, i think the global economy is actually picking up. i think that we -- if you look -- between trump and biden, if you look at the economic data for biden, the big jump is in structures, which is the manufacturing. mining, which is the energy industry was practically nil. i think we can do that. i think you can get consumer -- [coughs]

excuse me. i think you can get consumer sentiment back. it can be exports. it can be broad-based. a lot of it can be driven, i think, just in the energy industry, some kind of regulatory certainty that that would happen. some of my clients are some of the biggest private families who are manufacturers in the u.s. i always ask them, for trump 1.0 what was more important? tax cuts or deregulation? tax cuts were nice but the regulatory certainty was what enabled us to do the massive capx. we would show up at the obama epa on friday and ask window guidance on our chemical facility. can we do this? what you think of that? they would be on site at the

facility on monday. i think it can be across the board. once we can get inflation down, interest rates down, we can have a proper housing boom. reihan: i hope you will indulge me a more personal question. you lived for many years in london, you've lived in the northeastern united states, now you are back in your home state of south carolina. one reaction that i've heard from a number of folks on the political right is in the wake of donald trump's experience in his criminal trial but also in his civil trial, a lot of people have come to believe that if you are someone who holds conservative political convictions it is no longer very wise for you, if you're someone of means, someone who might be a target, to reside in a deep bloom and into polity or state -- deep blue municipality or

state. that is a dismaying thought. i wonder how you think about that. when you speak to other like-minded folks who are successful entrepreneurs, investors, people who want to enter into public life, are you getting the sense that people have to migrate to a political safety given the change in climate? scott: i think that the recent verdict is the most, the idea being an enemy of the state, state as in state government, has maybe come to the forefront. i think in people's mind previously it was tax rates, regulation, fees of doing business, again regulatory certainty within state government. this migration from the blue states to the red states is one of the largest migrations, other

than the post-civil war migration by american blacks out of the south. the migration back to read states -- red states started before there is the notion of enemy of the state. i think there is a risk premium that is being created. does the risk premium get created on tax uncertainty? i will tell you, i have one investment in massachusetts. massachusetts put in a tax above a certain level. massachusetts was my biggest tax bill and i have one investment there. i think this idea of economic freedom, i think it is economic freedom. i don't think we have degenerated yet to the idea of

enemy of the state. i hope we won't. i am part of the republican party. i study game theory a lot. i am part of the republican party that is saying, the best revenge is to win on november 5. let's not set off a tit-for-tat chain reaction. traditionally, conservatives are the adults in the room. let's stay that way. it is alarming. it is alarming on both sides to see the breakdown in the federal system. whether it was during trump with sanctuary cities -- we are not going to enforce the law. the state of texas feeling as though they have to enforce their own border.

i think we have to get back to the idea that the federal system does work. reihan: everyone, please join me in thanking scott bessent. [applause]

>> american history tv saturdays on c-span2, exploring the people and events that tell the american story. a 7:00 a.m. eastern in the lead up to inauguration day, american history tv looks back at famous inaugural speeches. speeches by jimmy carter in 1977, ronald reagan in 1981, george h w 89. on lectures in history, hillsdale college professor on civic fate and how american nationalism incorporated religious elements and symbolism during the cold war. at 9:00 p.m. eastern on the presidency, the book "the mysteriousness is next in --

mysterious mrs. nixon." exploring the american story, watch american history tv saturdays on c-span2 and find a full schedule in your program guide or watch online anytime at c-span.org/history. >> sharon mcmahon, host of here is where it gets interesting podcast and author of the small and the mighty is our guest sunday night on c-span's q and a profiling lesser-known americans who changed the course of american history. including retail pioneers sears and roebuck, former slave and philanthropist clara brown, and others. >> if you ask people, who is the best person that you know, almost never will they say jeff

bezos, right? almost never will they say some tv star. they will almost always say somebody who has impacted them. very often, those people are not famous, not rich, they don't have daddy's money, they don't have their name on the side of a building. there are thousands of americans who have changed the course of history, changed who the united states has become through their actions, but for a variety of reasons their stories haven't recorded in those boldfaced fonts in the history textbooks. >> sharon mcmahon with her book the small and the mighty sunday night at 8:00 p.m. eastern on c-span's q&a. you can listen to all of our podcasts on our free c-span now app. ♪ >> attention, middle and high school students across america.

it is time to make your voice heard. c-span studentcam documentary contest 2025 is here. your chance to create a documentary that can inspire change, raise awareness, and make an impact. your documentary should answer your message to the president. what issue is the most important to you or your community? whether you are passionate about politics, the environment, or community stories, studentcam is your platform to share your message with the world. with $100,000 in prizes, including a grand prize of $5,000, this is your opportunity to not only make an impact, but to be rewded for your creativity and hard work. enter your submissoday. scan the code or visit studentcam.org for all of the deils on how to enter. the deadline is january 20, . >>-span. democracy unfiltered.

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