And now time for politics and policy.
Our next guest says French economist Thomas Piketty is quietly influencing the growing populist movement inside the Democratic Party.
And joining me to discuss this and more is Mark Bloomfield, Chair of the Board of Directors of the American Council of Capital Formation.
Mark, thank you so much for joining us today.
Well, thank you, Johnny, and this is actually the 2nd time I've been here, and I think it's important to put all the current events in the broader context of populism on the left and the right, and today it's populism on the left.
You rightly said, who is Thomas Piketty, and why should we care?
Well, it goes back to a conversation I had in June 2014 when Trump was starting his campaign, and then Senator Jeff Sessions, the leading populist in the Senate, created quite a spur by signing.
Up with Trump, Senator Sessions and I ran into each other.
He says, What's new, Mark?
And I responded, Well, there's a book, Capital in the 21st Century, written by Thomas Piketty, a French socialist economist.
It's 793 pages, grade charts, tables, and algorithms.
And Senator Sessions replied, Who cares about a French economist writing a book that nobody can understand yet buy?
The problem, I said, it's Amazon number one, New York Times, number one, Wall Street Journal number one bestseller.
There's a luncheon in the White House.
There's hearings on Capitol Hill, and he said, Oh my gosh.
And I said, Piketty's thesis is that free markets that evidently result in income inequality which then destroys American democracy.
The senator alarmed, said, Mark, we better do something about it.
Let's have lunch tomorrow, which we did.
And of course there was nothing we could do.
So that's why Thomas Piketty is relevant to all the discussions we have about economic policy today, including obviously blockchain at all.
So Mark, how is Piketty influencing what you see as a growing populism within the Democratic Party?
Well, before Piketty, um, those of us who believe in free markets focused on threats from Bernie Sanders, Elizabeth Warren, AOC.
Today, however, in response to your question, think of the politics of Maine, New York City, and California.
The Senate race in Maine is one of the Democrats' best pickup opportunities.
Graham Plattner, who no one heard of recently, an oyster farmer. is now the likely Democratic nominee who espouses populism and economic populism with a criticism of wealthy elites, and I would assume that would include people involved in crypto.
On a recent November morning, for example, Zohan.
Mamdani, the Democratic mayor of New York City, appeared in front of an Upper East Side condominium with video cameras to call for an annual OPerre tax.
The tax the richs video was viewed by 52 million people.
In November, Californians will vote on the 2026 Billionaire Tax Act, which would create a 5% tax on the net worth of California residents with assets of $1 billion or more.
Right now it's leading in the polls, 52 to 33%, and pickotism is just beginning and I wouldn't be surprised if they take a look at what all this blockchain and cryptocurrency is about.
So let's talk about some other economists you feel belong in this conversation.
Who are they and what is the overall impact to the 2026 midterms and beyond that you are watching from these economists.
Well, Remember, I'm concerned about a tax on free enterprise, and there are two folks who now should be brought into our conversation.
There's Art Laffer, who many of you in the audience know, who created the Laffer curve, which shows beyond a certain point higher taxes can.
Actually reduce total revenue because they discourage work, investment and business activity.
Art Laffer and Emmanuel Saez, who's a close intellectual collaborator of Piketty, debated what I just mentioned, the California 2026 Billionaire Act.
The fundamental issue Is whether prosperity depends more on what your colleague referred to as capital formation, entrepreneurship, and and investment, or limiting inequality through distribution of progressive taxes.
Piketty and saws.
Art Laffer in the debate did not argue against upper income people paying more, but was very careful about the upper taxes not hurting saving and investment.
The second fellow which is relevant is Martin Wolf, one of the world's most influential economic journalists and the long-term chief economics commentator for the Financial Times.
In his book Crisis of Democratic Capitalism, he writes that capitalism and liberal democracy are in a sort of marriage.
When the economy fails, like in Weimar, Germany, democracy is in serious trouble.
Similar, if democracy is.
Under attack, a prosperous economy is in trouble.
In other words, democracy and capitalism need to be saved together, and my fear is that pickotism would be the demise of both.
And if you or your colleagues would like some information on these, there's, we can send you a YouTube of Art Laffer and Thomas Sousse's debate or a webinar we've done with Martin Wolf.
Also, let's talk about the current redistricting battle that's making headlines.
How do you see this shaking up the midterms?
Well, it ain't new.
As I mentioned, I'm a little bit older than you.
I remember in 1812 when Governor Gary Perry approved in Massachusetts, uh, uh, uh, a, a strange shaped Senate district, um, to help his party.
This was in 1812.
Critics said, It would, it resembled a salamander named, and they called it Jerry after the governor's name Amanda.
So this is not new.
It's been going on for quite a while.
But what about, what's the result of the current one?
Well, the current one, it has overall created competitive districts. and competitive districts are getting smaller, so there's less competition, and this obviously will have an impact on the midterms.
But mind you, a lot of these changes are being challenged in the courts, and we've only got less than 6 months for things to take effect.
So I think the big impact will be in the presidential election.
But there's also some peculiarities, these, for example, the Black Caucus.
The Black Caucus consists of black members of Congress in an important plays an important role in Congress.
There are 62 members today.
There were only 13 in 1971, and because of this redistricting, or I call it gerrymandering, they will lose 6 seats in November and by 2028 a dozen.
That has impact on legislation and economic policy.
All right, Mark, last question.
Big meeting over in China.
How do you view the insights of Trump's visit to China and the implications here?
Well, let's talk about the fundamental issue.
Our relationship with China is unusual.
We are economically intertwined, but we're in strategic competition.
China is one of America's largest trading partners, yet both government and interests conflict with our geopolitical.
For example, we have a new kind of Cold War.
Although unlike the US-Soviet Cold War, the two countries remain economically deeply committed, connected, but there's this new geopolitical conflict.
So I think the bottom line is that it's a historic meeting.
Um, but remind you, and it's a historic event time in our, in our history, but remind you most importantly, few details have been announced, so we don't know what the impact will be on the American economy, our exports and their exports.
Great, Mark.
Thank you so much for joining us.
Mark Bloomfield, uh, CEO and uh board of directors for the American Council of Capital Formation.
Thank you very much.
