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Making Sense

#447 — The Unraveling of American Power

20 min episode · 2 min read
·
Peter Zion

Episode

20 min

Read time

2 min

Topics

Productivity, Product & Tech Trends, Science & Discovery

AI-Generated Summary

Key Takeaways

  • Tariff Impact on Manufacturing: Flat tariffs force complex manufacturers with thousands of production steps to relocate outside tariff zones to avoid paying duties multiple times, causing deindustrialization of high-skilled jobs while only simple products like furniture and plastics reshore successfully.
  • Industrial Construction Decline: Federal Reserve data shows industrial construction spending has been negative since tariff implementation in April, with businesses finishing existing projects but launching no new ones due to policy uncertainty from over 600 tariff changes since January 20.
  • Sinaloa Cartel Disruption Backfire: Biden administration prosecution successfully fractured the business-focused Sinaloa Cartel, but inadvertently empowered the Jalisco New Generation Cartel, which operates through extreme violence and territorial intimidation rather than bribery, increasing Mexico's murder rate and fentanyl production efficiency.
  • War Powers Act Challenge: Trump administration's Venezuela operations mark the first time a president has directly challenged the War Powers Act beyond the thirty day threshold without congressional authorization, with alleged war crimes including killing disarmed combatants in Caribbean waters.

What It Covers

Geopolitical analyst Peter Zeihan evaluates Trump's second term performance, arguing current tariff policies are causing American deindustrialization rather than reshoring manufacturing, while foreign policy decisions lack coherent strategy or congressional oversight.

Key Questions Answered

  • Tariff Impact on Manufacturing: Flat tariffs force complex manufacturers with thousands of production steps to relocate outside tariff zones to avoid paying duties multiple times, causing deindustrialization of high-skilled jobs while only simple products like furniture and plastics reshore successfully.
  • Industrial Construction Decline: Federal Reserve data shows industrial construction spending has been negative since tariff implementation in April, with businesses finishing existing projects but launching no new ones due to policy uncertainty from over 600 tariff changes since January 20.
  • Sinaloa Cartel Disruption Backfire: Biden administration prosecution successfully fractured the business-focused Sinaloa Cartel, but inadvertently empowered the Jalisco New Generation Cartel, which operates through extreme violence and territorial intimidation rather than bribery, increasing Mexico's murder rate and fentanyl production efficiency.
  • War Powers Act Challenge: Trump administration's Venezuela operations mark the first time a president has directly challenged the War Powers Act beyond the thirty day threshold without congressional authorization, with alleged war crimes including killing disarmed combatants in Caribbean waters.

Notable Moment

Zeihan describes the current administration as combining Zimbabwe and Argentine economic policy with French statism, stating he has not witnessed such rapid unraveling of national power since the Soviet Union collapsed, despite stated goals of reshoring manufacturing.

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Episode Transcript

Welcome to the Making Sense podcast. This is Sam Harris. Just a note to say that if you're hearing this, you're not currently on our subscriber feed and will only be hearing the first part of this conversation. In order to access full episodes of the Making Sense podcast, you'll need to subscribe at samharris.org. We don't run ads on the podcast, and therefore it's made possible entirely through the support of our subscribers, so if you enjoy what we're doing here, please consider becoming one. I'm here with Peter Zion. Peter, thanks for joining me again. Hey. It's great to be back. Well, so first, you've been on the podcast several times and most people will have, heard about you, seen you somewhere, if not here. Remind people briefly what you do, what's your day job when you're not doing podcasts like this. My job is to take demography and geopolitics and use it to paint a picture of the future and then show how it matters to the people who happen to be in front of me. So most of my clients are in the world of finance or manufacturing or agriculture, some sort of economic association or business, and I help them navigate the crazy that is to come. Speaking of, predicting the future and, I actually on points that matter, at least to me and a few of us, last time you were on the podcast, you told me that there was no way that Trump was gonna win the twenty twenty four election. So I have to ask you what the fuck happened right at the top of the Fair enough. Sorry. I I slept that day. Yeah. My general feeling was that it was gonna be America's independence that decided how things were gonna go. Not people who said they were republic or independent, but really were republicans and everything but name, but the actual 10% of the electorate that splits their vote because they had decided the last seven elections. So it felt pretty safe to me. And in the post election polls, it looks like that group decisively voted against Trump. Everyone else shifted, however, with one exception, Washington State. Every state in every demographic shifted substantially towards Donald Trump and allowed him to win with the margin that he got. Well, how would you rate his second term so far? We're we're gonna talk about tariffs and foreign policy and, supply chain and specifics like China, but what most concerns you? What have there been any pleasant surprises? How would you, how would you rate the last 10 on your budget? I usually try not to be critical of presidents in their first terms because, you know, they're they're learning. It takes time for the policies to kick in. The world doesn't move on a dime. Second term is different because they should have learned from what happened in their first term. And by that measure, it has not gone well. …

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