RADIO

'Tiger mom' and Yale law prof says calling for America's 'divorce' is 'playing with fire'

You may know Amy Chua as the “tiger mom” who wrote a bestselling memoir about the benefits and drawbacks of strict parenting called “Battle Hymn of the Tiger Mother.” Chua is also a Yale professor and the author of several books on a range of topics. In her latest book, “Political Tribes: Group Instinct and the Fate of Nations,” Chua tackled the political tribalism that is dividing America.

On today’s show, she and Glenn chatted about the right-left dichotomy that is tearing Americans apart; solutions that can help us see each other as people again; and the insanity of calling for a “divorce” into two separate nations.

“How do we come together when we each think the other side is the problem?” Glenn asked.

Watch the full clip (above) for Chua’s response to this crucial question and listen to the full interview here.

This article provided courtesy of TheBlaze.

GLENN: I'm hoping that Amy Chua can spend some time with us today. She has written a book called Political Tribes: Group Instinct and The Fate of Nations. She is the -- the John duff professor of law at the Yale Law School. She graduated from Harvard.

Amy, welcome to the program. How are you?

AMY: I'm great. Thanks so much for having me.

GLENN: You bet. I don't know how much time you have, but I would love to spend as much time as you have.

AMY: I have time.

GLENN: Okay. Your book is great because you talk about the secret of America. And how we're really kind of violating that now. Really, strangely, unknowingly. But you -- you speak to both sides of the aisle so we can kind of hear each other.

It's not -- it's not a book written from the left or the right.

AMY: Absolutely not.

GLENN: And it's trying to speak the language of -- of both sides. And let's start with the essential goodness of America, that you point out.

AMY: Right. So I'm not even trying to be both sides. I am just kind of going back. I think we all need to remember what it is that makes America special.

And so I actually have spent 20 years studying different countries, countries in the developing world. You know, European countries. And believe it or not, there was something really special about America, that I think most Americans don't even realize. And I say that we alone among the major powers, not France, not England, we are what I call a super group.

And to be a super group, Glenn, it's really simple. You only need to do two things.

The first is to have a really strong overarching national identity. Just something that holds us together. Americans. But the second requirement for a super group, is we have to allow all different kinds of subgroup identities to flourish.

So it's like -- so in this country, you can be -- you know, you can say, I'm Irish-American. I'm Italian-American. I'm Croatian-American. I'm Japanese-American and still be intensely patriotic at the same time. And believe it or not, this is not true in a country like France. You wouldn't say I'm Italian French. There's no such thing.

GLENN: Right.

AMY: So we -- and right now because of the tribalism that has taken over our political system, we're starting to destroy that. We're starting to destroy this connective tissue, this big overarching national identity that we have, that has -- what's made us special.

And, you know, your example, really, about Chick-fil-A, is also -- there's an attack on allowing individual subgroup identities to flourish too. So it's a dangerous moment for us.

GLENN: Right. So you -- I thought this was really fascinating. And the most clear I have heard anybody state this.

You're saying that a lot of these wars that we have engaged in, are unwinnable, simply because those nations don't have a super group.

AMY: Exactly. So one thing that America has done -- and so, you know, my real feel for 20 years has been, again, looking for foreign policy. And what I try to say is I explain why we have messed it up so much, in countries from Vietnam, to Afghanistan, to Iraq.

And a lot of it has to to do with, we don't realize how exceptional, our own identity and history is. So we forget how unusual it is to be this multi-ethnic nation, with so many different ethnicities, and to have a really strong American identity.

So, Glenn, why do you think Libya is now a failed sate? We missed this. President Obama actually really, honorably conceded this.

He said, we failed to see the depth of the tribalism. They -- Libya was a multi-ethnic country like we are. One hundred forty different ethnic groups. But the difference is, that Libya didn't have a strong enough national identity. This idea of being a Libyan didn't matter to these people.

And it just fell apart. It fell apart after we intervened. And we didn't see that. We thought, you know what, they're going to be like us.

GLENN: Yeah.

AMY: If we just take out this horrible dictator and then we leave and put in democracy, it's going going to come together. And it didn't happen. So we project -- we forget how special we are, and we make mistakes by forgetting that other countries are not like us.

GLENN: And it seems in a sick, sort of twisted way, we understood this with the motivation behind the Sykes-Picot line and agreement in the Middle East. Where we drew these country lines, knowing that it would cause warring factions and the dictators would -- would be -- would be so busy trying to keep their own tribe together, that they wouldn't have time to look out.

We did know this at one point.

AMY: Well, you know what's so funny, the British were the masters of this, actually. Because the British, they -- I mean, morally, of course, that's another question. But how were they so successful in maintaining this empire, for centuries, with such a small number of people?

I mean, just a handful of British administrators in places like India and the Middle East, exactly what you said. They were masters -- they were so conscious of all these little group decisions. But they used it to divide. And you're right. You know, they were like, okay. How can we keep these people at bay? And they actually purposefully pitted groups against each other. We were not like that, after we went to the world stage, post World War III two.

We started (?) as like this magic formula. You know, that -- if we -- because democracy -- historically has worked so well for us. We went into Iraq thinking, oh, Sunni, Shia, Kurds, it's kind of a mess, but let's just have some elections. And that was so wrong-headed. Because what I've shown is under certain conditions, democracy can actually worsen. (?) not make it better.

GLENN: Sure. So I want to go to the part of the book where you talk about how the left isn't listening to the (?) and you -- you describe, especially for a professor. I'm just shocked that you're even allowed to teach.

But --

AMY: I get to go back.

GLENN: Yeah. But you described what happened with the Trump voter. And what's happening with the Trump voter. And try to explain that to a person on the left. And I've not heard anyone in the media do this. And do it effectively, as you did. And what we're supposed to learn from this. And how you describe the left to the right, when we come back.

The name of the book is Political Tribes. Amy chew ais with us.

Don't hold it against her that she's a Yale professor. She just said, I don't know how -- I don't know if they're going to let her back in. But it's a remarkable book.

GLENN: Amy chew a,she is an author of the book (?) political tribes. Group instinct. And the fate of nations.

In your book, you -- you talk about the left believes that the right-wing tribalism, bigotry, racism is tearing the nation apart. (?) identity politics. Political correctness is tearing the country apart.

And they're both right. Can you explain?

AMY: Right. So, you know, I'm the kind of person that believes that people are basically good. And so many things that go crazy and end up being awful and are now ripping us apart actually started with good intentions. (?), for example, let's start with the left. Progressives in the '60s and the '70s, a lot of their rhetoric was about equality. And it was very inclusive. It was about, let's include everybody. Let's tran end groups, so that we don't see skin color. What happened was right around in the '70s and the '80s, a lot of people (?) all these calls for let's not seek groups. Let's be equal and all this, are not actually helping us. And so you started seeing people as a minority -- they're like, look at these histories that we're telling about the United States. We're romanticizing our Founders. We're romanticizing the Constitution. We're romanticizing everything.

And, Glenn, I think there's some good to that. We should talk about the fact that our Founders, some of them held slaves. We do to have talk about our naturive populations. But what happened is they just started going way, way too far.

So now, if you fast forward to 2018, it's all the way to the other extreme. It's like, America is a land of oppression.

It's not even -- it's not like, look, we have this wonderful Constitution, with these incredibly important principles, which we have repeatedly failed to live up to, which I believe.

Instead, it's like this whole thing is a sham. The country is built on white supremacy.

GLENN: Yes.

AMY: And that is playing with poison. Because it's throwing the baby out with the bathwater. It goes back to what I was saying. It's attacking that precious American identity. Not saying we need to strive to make it better.

To make it reality. But just saying, you know what, let's just throw the whole thing out. And with identity politics, another thing that has happened is -- and, again, I understand where the left came from. They were like, you know, all this group stuff is just being used to block (?) it's just being used by the right to not make any changes. Well, fast forward, it's gone too far. Brav in 2018 now, on a college (?) campus where I teach, it's all about groups. If you try to be group transcending, you will immediately be called a racist. Because the idea is that you are trying to erase all the very individual examples of group oppression that we have. But the problem is that the groups are dividing, smaller and smaller. And even worse than that, the idea is like, you cannot understand me. You cannot speak for me.

And on top of that, the final thing that drives me craziest is the vocabulary policing.

So I feel like a lot of people -- you know, in the middle of the country, who are not on these Ivy League campuses, they are good-willed. They may be anxious about immigration. They may be anxious about our country changing.

You know, they may have certain views that I disagree with. But that doesn't mean that they're racist and xenophobic and homophobic and whatever. Does or (?) you're immediately branded all these things.

And what that does, is it drives. (?) a lot of horrible stuff on the right. And there you hear terrible things. You know, so -- and it's this vicious cycle.

So that's half of it.

GLENN: Okay. So now let's go -- when we come back, let's go to, how do we fix it? Because I -- Amy, you're one of the few people that I've talked to that I think fully understands the problem that we face, and you have a solution. Next.

STU: We're talking to Amy chew a. She's the author (?) group instinct and the fate of nations. You also might remember her from (?), you know, that only sold about 25 zillion copies a few years ago. So she joins us now.

Amy is with us.

GLENN: So, Amy, I have to tell you, I feel like -- you know, I'm a brother from another mother with you.

AMY: Yes.

GLENN: Because you're -- you're so spot-on, on what the problem is, I think, with the political tribes. And how we are -- how we are one half of the country (?) dismisses the other half. We dismiss -- you know, one half of the country dismisses all the good that America did. The other half sometimes dismisses all of the bad that America did. And we've just been pushed further and further apart.

So now, how do we come together, when we each think the other side is the problem?

AMY: So, there are these fascinating, but terrifying studies that I describe, that showed that a lot of this is actually biological. That human beings are tribal animals, that we would want --

GLENN: Sure.

AMY: And that's not always bad. Family is tribal, but positive.

GLENN: We had to -- to survive.

AMY: Exactly.

GLENN: Prehistoric man had to be.

AMY: Exactly. But there are some scary tests that show that our brains light up when we stick it to the other side.

So there's a lot of it. But here's the good news: I have all these studies that show that we can as human beings overcome this tribalism. And there are all these very, very robust studies that show, that if you can pull human beings out of their group context. Because we're worst with our buddies. You know

GLENN: Yeah.

AMY: And you pull two people from opposite sides. Opposite tribes. And have them interact as human beings. It is astounding how much progress can be made.

Now, this is not saying to (?) you put a bunch of different races and backgrounds, they could just hate each other more.

The point is, having them interact as human beings. And the best example of this is the integration of our military in the 1950s. That was a time when everybody said, no way. This is not going to work. Nineteen percent of America was against (?) troops. But they did it. And afterwards, they found that the integrated troops were as or more effective than the all-white troops. And when they interviewed and conducted all these studies, it was so inspiring.

I mean, this is not just black and white. This is at that time, Italian Americans (?) Swedish Americans and German Americans. But what they said is, you know what, if you throw us all into the foxhole, we miss our loved ones in the same way. We're terrified in the same way. And we have to trust our lives to this other person, we don't care what accent they have, or what color their skin is.

And that's a perfect example. Because norms really changed. And a lot of bad things happened in Vietnam. But one good thing is people start to see each other as human beings. So I have this one idea that a lot of people are excited about. It's going to sound silly. But like a public (?) a lot of children from one part of the country, where they're always with their own kind. Their own privileged (?) and maybe enforce -- you know, encourage, on are they have (?) and work side by side with other young Americans on a common project. Not in a condescending way. Like we're going to teach you. But rather, just some common infrastructure or some project together. So I think that we really have to think about this.

I think we have to change the way we teach our history. I think we've overcorrected. I mean, when you were saying bad and good. You know, we have to tell the truth. But we have to make people feel proud of being part of this country. And not forget what makes us so exceptional about it.

GLENN: But, you know, I have to tell you, Amy, my daughter challenged me once. She said, Dad, you only know the good stories about America. And I said, honey, you've gone to school. You only know the bad stuff.

And I said, I tell you what, you read the stuff, I'll read the bad stuff. And by really immersing myself in things like wounded knee and really, truly understanding it, I've actually come out more hopeful, that we can survive (?) anything, if we learn from it.

PAT: Yes. Yes. I could not agree with you more! (?) and I think we're criticizing the same thing. Because there's a lot of voices on the right and the left, it's almost like they want to maintain those tribes. So if I were to want to -- if you're somebody on the left and you wanted to go to Chick-fil-A or read something positive about George Washington, you're instantly branded by a lot of people preponderance and the same thing happens on the right. If somebody on the right wanted to do, you know what, I want to hear this person talk about Black Lives Matter. No, no, no. You can't. And I just think that it's -- because I -- I wrote this book because I actually looked at other countries that have actually fragmented and just broken up. And I think that America doesn't realize how precious what we have is. I see people on both sides saying, let's just get a divorce. Let's just break up the country. And I think they're playing with fire. And I understand that. Sometimes you just get so mad at the other side and what people are saying. And one extreme thing feels like a more (?) escalates in a place where people are so (?) at both sides.

GLENN: So, Amy, I think what stops us from listening to the other side, or sitting down -- and perhaps it's just saying that you're part of the problem if you do sit down, is both sides feel -- and I could speak for the -- for the right, I think on this one. Is it feels like, you know, we'll sit down and we'll tell you the truth. But, you know, the left isn't going to tell us the truth of what their real intent is. And I think there's a difference between the -- the average person in the country, and those who are leading these -- you know, these -- these groups.

AMY: Yes. I totally agree. I think it's actually a lot of very loud, shrill groups. Even on a campus, I can say, you'll hear these things that the rest of America will (?) these crazy things that are said. But when I talk to my students in a private setting, in a smaller group, I find that the majority of them, whether they're on the right or the left, are actually very -- very reasonable reasonable. (?), but it's a very small number of people. Almost like bullying. You know, and -- but I think that, for example, just -- like what you just said about -- you're a very influential person. So if you just said, you know, I read this book about Wounded Knee, or something. Try it.

You know, that's not a strident thing. It's not taking sides. And I think if even just a few people start doing that -- and, yes, I think the left is very problematic this way. You know, if somebody -- look, maybe George Washington was a slaveholder. But that's not all he was.

You know, it was an amazing story. There was (?) so much heroickism. And that's like a no-no no. (?) that's partly why I wrote this book. So Amy, I have to tell you, I think I was in Denver. Were you with me institutions

STU: I think I was, yeah.

GLENN: I was in Denver. I had just flown in. (?) and it was a guy who was driving the car. And he was a -- a professor. And he was a professor of Native American studies. And something else. I can't remember what it was. But everything -- everything in me went, he hates your guts, Glenn.

And I -- you know, I -- I would -- you know, I was supposed to hate him, I think. But I started talking to him. And he was taking me to a broadcast station. And I could tell that he didn't really like me.

And so we just started having a conversation. And I found out that he was from Wounded Knee, that he had done a lot of studies on Wounded Knee. So we had this great conversation. He dropped me off at the station. I said, wait. Wait here. When I'm done, I want to show you something.

In the back of the car, he didn't know this. But I had one of the seven Native American guns from wounded knee that had been collected.

AMY: Wow.

GLENN: And I told him when wedding back in the car, I said, I want to tell you something. I said, I don't know if you know who I am. He said, oh, I do.

And I said -- I said, let me tell you what I found out about Wounded Knee. And I said, (?) when I arrived, I want you to open up the back. I have something to show you. And I pulled out the gun. I handed it to him. And he actually wept. He cried.

AMY: Wow.

GLENN: And we hugged each other. And we had a great conversation. And we ended up liking each other, a lot. That doesn't mean we agree on everything. We just --

AMY: Exactly.

GLENN: We saw each other -- I stopped seeing him as a -- as a professor. And he stopped seeing me as a guy who talks politics. And we saw each other each as people.

AMY: I love that -- that's what I was saying. (?) I have conservative students. Believe it or not, they take my classes. And I have a lot of minority students. Because I'm a minority. And I try to do the same thing. I facilitate it. But I say that -- you know, I think we all need to elevate ourselves on both sides of the spectrum and be more generous. Because sometimes it's almost like -- and, again, I get it. It's almost like a game of gotcha. It's very pleasurable just to hate the other side too. You think of sports, you know. I like my story.

Your story reminds me of the one that I tell, that's the same thing. I have this very poor Mexican (?) grew up in a trailer park. And he tells a similarly moving story about the people in the next trailer over who were so kind. To his family. And they were, you know, very strong Trump supporters. The other people would have called white supremacists. But what (?) even though the words they used, to all my progressive friends sound horrible, the things that they said, at the level of just human beings, they were the ones that protected us. They were the ones that said, we're going to be here for you. So I love that story.

GLENN: So we are sitting in a place -- Amy, I'm going to run out of time.

We are sitting at a place now, to where you just said, I think, the language that they might use, we almost speak a different language. I don't know if you're familiar with Jonathan Haidt.

AMY: Yes. I completely agree with him.

GLENN: But we speak a different language. And I've learned this by going to all kinds of different churches and synagogues and mosques and listening. And I'm amazed that we agree, I think, on 95 percent of the stuff. But we think we're farther away from each other because of the language that each religion happens to use. And we don't understand it. Coming in, we're like, okay. That's weird.

No, it's exactly what you're saying, just said in a different way.

AMY: Exactly. And here again, I think that the left and the right have to -- they both have to improve. I have been quite harsh about the left just all this vocabulary policing.

GLENN: Yes.

AMY: The vocabulary changes all the time. If you slip up a little bit, then suddenly, ah, we caught you. You're racist.

And that's not going to help anybody. But I think what that does is it makes some people on the right go too far on the other direction. They go, you know what, (?) we're going to say this. Then it makes them purposefully say incendiary things that do sound artificial. (?) more generous towards -- I always say, just try to think about what they're -- what the person is really trying to say. Instead of fixating on the exact word. You know, where are they coming from? Are they coming from a good place? Because I see so many people coming from a good place, who suddenly get torn down because they get the wrong -- they use the wrong word. And, again, I think that's bullying.

GLENN: Amy chew a,it is a thrill to talk to you. (?) political tribes. Group instinct and the fate of nations.

She has not only diagnosed the problem, but she points to the cure. Amy, thanks so much.

AMY: Thank you so much for having me.

GLENN: You bet. Can't believe she's a professor at Yale. How did she get on campus?

If they find out -- let's keep this interview to ourselves, if they find out, she's gone.

TV

The ONLY Trump/Epstein Files Theories That Make Sense | Glenn TV | Ep 445

Is the case closed on Jeffrey Epstein and Russiagate? Maybe not. Glenn Beck pulls the thread on the story and its far-reaching implications that could expose a web of scandals and lead to a complete implosion of trust. Glenn lays out five theories that could explain Trump’s frustration over the Epstein files and why Glenn may never talk about the Epstein case again. Plus, Glenn connects the dots between the Russiagate hoax, the Hunter Biden laptop cover-up, and the Steele dossier related to the FBI’s new “grand conspiracy” probe. It all leads to one James Bond-like villain: former CIA Director John Brennan. Then, Bryan Dean Wright, former CIA operations officer, tells Glenn why he believes his former boss Brennan belongs in prison and what must happen to prevent a full-blown trust implosion in American institutions.

RADIO

Rumors explained: Is Fed Chair Jerome Powell OUT?!

After rumors spread that President Trump would soon fire Federal Reserve Chair Jerome Powell, Trump has said that he's "not planning" on it right now. But is it possible for Trump to fire him? Will he resign? And how is the Fed Chair even chosen in the first place? Glenn and his head researcher Jason Buttrill explain ...

Transcript

Below is a rush transcript that may contain errors

GLENN: Well, last night, I was rapidly looking the lie some of these rumors, on X.

Pretty incredible people on what's going on with Jerome Powell and the fed.

What the heck?

I was actually popping popcorn and watching this. It was so crazy.

GLENN: So it's just the rumors, that he is going to be stepping down?

JASON: Well, yeah.

Yeah. Anna Paulina Luna. Congresswoman. She was saying, it was almost imminent, that he was about to be fired. Actually fired.

There were other rumors saying, well, we're not sure about fired.

But he's considering resigning.

GLENN: Yeah. You know why.

JASON: We were like, what the heck is going on?

GLENN: So do you know why?

Do you know why he's resigning? Any guesses? I mean, you had popcorn out. I would love to hear what you have come up with.

JASON: So there was the CPI stuff coming out. The interest rates going up.

We know that the President wants interest rates to come down. I'm assuming that is what the deal is, and there's some sort of internal battle going on.

GLENN: Well, and the president can't fire the Fed chief. Okay?

So the Fed chief is the one that nominated. The federal reserve is the biggest crock of bullcrap I've ever seen in my life.

It's nothing, but the five biggest banks. Okay? And you know which ones they are. They're the ones that keep getting bigger. And everybody else is falling to the wayside.

So the Federal Reserve is the arm of those five banks.

Okay?

And they suggest, who the president can select from.

So the president can't say, I don't want any of these guys. I want this guy. Can't do it.

He has to take a look at the list that all the banks have put together. Is. Say, pick from this list, Mr. President.

Did you know that?

JASON: It's kind of how Iran chooses their next president.

GLENN: It's exactly. It's exactly that way. Except, this religion is all about the almighty dollar.

Okay. So he can't -- he can't pick on his own. But the president has a right to pick one, you know, every term. If it comes up in his term.

The president wants this guy out. And I think he's been really, really bad.

Because he's been wrong on almost -- on almost everything. But show me the -- show me the Fed, you know, the guy who the Fed was right ever.

So he can't fire him. But he wants him out. Because he wants interest rates dropped.

And, you know, the jobs are coming back. Things are coming back.

But interest rates keep coming up.

And the -- and the interest rates, if we keep our interest rates high, we have a harder time borrowing money for our debt.

And it just gets more and more expensive for everybody all along. So the president wants him to back off interest rates. But the Fed chief believes that that could cause more inflation.

Which I think he's right on that one. And I hate to say he was right on anything.

Because I don't think he was ever right.

Makes me question myself. When he's like, well, I think he might have a point on that one. But the president is like, no. He can handle it.

I want them down. I want cheap money again.

He refuses. So what has the president done?

The president can only fire him, with cause!

So what do you do when you can only fire somebody with cause, and you want them out.

You find a cause, and this one is easy.

So the Fed has been the one leading the way saying, we can't keep borrowing money.

We've got to have some fiscal sanity. Right?

This is going to kill us. We have to keep these interest rates high, because you are borrowing too much money. And maybe this is the only way to stop you.

So we got to keep it high, because you've borrowed too much money. And how many times has he testified in front of Congress? We've got to cut. We've got to cut. You can't keep spending like this.

Okay? Well, did you know that the Federal Reserve, with our tax dollars, the five biggest banks, a/k/a the Federal Reserve, is redoing their offices. To the tune of two billion dollars!

Now, I don't know what kind of wallpaper they need there.

But that seems like a pretty hefty renovation, especially when everybody is looking at cutting things. And you're lecturing me about spending money. So they get money from the government, okay? They're telling us, stop spending.
Stop borrowing.

Except, okay. What you've borrowed. I need $2 billion of that, to redo our offices in Washington, DC.

Excuse me?

Why don't you do that yourself. Okay. I think banks maybe have some money.

So they're borrowing that money, and there's $700 million over.

So it's $2 billion. $700 million over budget. And they're still not finished.

And the problem is: They're putting in water features.

They have a rooftop garden they're building.

JASON: Okay.

GLENN: I mean, it is -- it's insane. The president now knows, really? You want to play this game with me. I will sit your ass down in front of Congress, and you answer to the American people, how you're lecturing us about spending. And you're putting in a rooftop garden and a water feature in your office. No! No.

So the president is now threatening, I'll fire you for this. You want to quit, now would be the time to quit.

Otherwise, I'm dragging your butt in front of Congress.

You answer to the American people for this. And they will beg me to fire you.

That's what's happening.

JASON: I looked at that a lot.

Because I was like. There's got to be some leverage that the president had, because they can't get rid of.

But that is a pretty big cut. That sounds like a Babylon Bee article. $2 billion.

GLENN: It does. It does. $2 billion, 700 million over budget.

JASON: Oh, my gosh.

GLENN: I mean, and these are the responsible bankers. No, I don't think so.

It just shows, they don't mean what they say. They'll just keep doing it for themselves. You know, if you really believed that America was really on that financial cliff, why would you do that?

You would lead the way and say, guys, we are going to be the only responsible ones here.

We will lead by example.

No renovation. You know what, go to IKEA?

You need a new desk. Go to IKEA, and get a new desk. Well, we have to keep up our image. We're not going to have a country.

So what do you say, we go to IKEA?

Our image should be, we are going to lead the way out of this madness!

That's what a leader would do.

JASON: So, Glenn, I still don't think I get this disconnect between Trump and Powell on -- we know Trump wants to lower interest rates.

Powell is standing back and saying, basically, he doesn't want to do it.

Is he trying to undermine President Trump on this?

GLENN: President Trump thinks so. President Trump thinks so.

I think so, to some degree.

I mean, I'm worried about inflation.

Look, you know what happened. Do you know what's happening with yap?

JASON: What's happening with Japan?

GLENN: So what's happening with Japan, is Japan has always had this really amazing image of, we're solid. We're absolutely solid.

This is target to crack. The foundation.

1989.

Let me go back to 1989.

This was the crown jury trial of the global economy.

Back in 1989, you probably aren't old enough to remember.

All of a sudden, Japan owned everything in America. We were just becoming Japanese, and everything was being purchased by Japan. Kind of like it feels a little bit like China now.

JASON: They even owned Nakatomi Plaza, Glenn, that Bruce Willis had to save -- they owned everything in every '80s movie!

GLENN: Oh, yeah, they owned absolutely everything.

Okay? And the -- things were so insane in Japan. The grounds of the imperial palace, in Tokyo, on paper was worth more than the entire value of the state of California.


JASON: Wow!

GLENN: Okay?

So their land. Everything just shot up. And so they had all of -- they were flush with all this cash.

And people believed that Japan had suddenly, you know, cracked the formula for, you know, eternal prosperity.

That's the problem. Then it all started to fall apart. And the asset prices. That they had mortgaged against.

Okay?

They had borrowed. Well, the imperial palace was worth more than California.

That doesn't make any sense. You wouldn't mortgage it like that. At least long-term. I will do this real quick, and pay it off.

You would never, ever mortgage, because you know that's inane. Well, nobody ever wanted -- and it seems in governments, nobody ever wants to believe that this is just a fluke. Okay?

So the asset prices collapse. The stock markets plunged. And for three decades, they have gone into this very polite political coma.

Okay? Economic coma. And so the central bank did something radical. They were the first ones to set your interest rate at zero. They lowered the interest rate. They made money so cheap, it was nearly free. Zero percent interest. Sometimes, they would pay you to take out money.

So the -- they had negative interest rates. Can you imagine that? Now, you're not fixing the problem. You're just printing wallpaper to cover the mold. All right?

So they've done this for decades.

Now their debt is I think 260. Or 280 percent of their GDP.

I think, what is ours?

100?

80 percent.

Something crazy. 120. You never believe back.

The death threshold is usually 120, 140.

They're 260 percent of their entire economy is debt.

That's not a crack. That's a fault line.

So this week. Or was it last week? Things started to creek and grown in Japan.

And the government bonds, which are like our treasuries. Is this getting too complex.

Are you following this still?

JASON: Yeah.

GLENN: Okay. So their government bonds.

They were the safest investments on earth.

One of them. Okay?

It's us. Japan, Germany.

They started to fall.

Hard. And when bond prices fall, interest rates were the easily go up.

All right?

So they borrow all this money.

260 percent of their GDP is borrowed. Okay?

So they borrowed all of that money. And they had it at like 3 percent interest. Whatever.

2 percent interest.

And they were paying people.

2 percent.

Well, all of a sudden, the cracks started to appear. And people were like, I'm not sure this is stable at all.

And then the belief of the system started to -- to go away. So people started selling their Japanese bonds.

Once they do that, now the yields have to go up.

What happens when yields go up?

What happens when interest rates go up? For a government. You have to pay more interest on your debt!

Okay?

You add two or three points.

Just imagine, you have an adjustable rate. Okay?

This is a government having an adjustable rate. Except, they have 260 percent of everything they make, in debt!

And it's all leveraged.

And now, their adjustable goes up two, three, four points.

You're not able to afford that anymore, okay?

So massive problem.

Because what it really means is. People don't believe in Japan.

They know the con game is now over.

And investors are saying, you know, I want a whole lot more in return.

Because I just don't believe you anymore.

And it's not just Japan's problem. This is not a neighbor's house on fair.

This is -- imagine we're all living under the same roof. This is the neighbor's apartment, on fire.

We're all under the same roof. We all have the same foundation. And so when this happens to Japan, you should pay attention. And I'll show you the ripple effects in just a second.

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(music)

GLENN: Okay. So now if Japan -- that means there's a stampede out of Japan.

And people are starting to look and reprice the risk of their money.

Now they're like, wait a minute.

The most stable. You know, if you're driving a car and it is the safest car in the world and all of a sudden, they just start blowing up on the highway.

You're like, I don't think that's the most -- that's the safest car on the highway.

And if that's the safest car, what does it mean for the car I'm in?

You know what I mean? So now, this is going to push US interest rates going up.

Which makes our mortgage rates go can up. And our car loans more expensive. And the national debt. Which is already costing us $1.2 trillion a year, just in interest.

Now, they can't sell their treasuries. People are skittish on treasuries. Maybe they come to the United States, but they're not so far.

They're getting out of the Japanese interest. Or the bonds there.

Japan has to pay their bills.

What do you do when you have to pay a bill?

And you don't have any money coming in.

You don't have enough money coming in. What do you do?

You sell something. Right? You sell your car. You sell something that you have of value.

Well, what do they have? What do they hold of value? US Treasuries.

So now, we are trying to sell our bonds, for our new debt, they hold our old debt.

They're saying, hey. Anybody want to buy this debt? Because I have to sell it. Fire sale. What do you give me for it?

Okay?

Which makes that debt more attractive, because they can get a better deal there.

Which means, if we want to have new debt, we have to raise our interest rates. Which means, we pay more for interest for our mortgages and everything else.

And it floods the market with bonds, crushing the prices, skyrocketing the costs for us.
And causing even more trouble, in other countries, that have US bonds. Because they start to look and go, nobody is buying these bonds.

Well, of course not. You have two countries. The two stablest countries besides Germany.

You have the two stablest countries now selling US Treasury bonds.

Okay? Really, really bad.

Now, let me add this on.

Germany is now having to pay for their own army.

And so they said, they're going to borrow money.

To build the army.

And they're going to lower their interest rate. So they can borrow more money. All right?

And now, the German bund, which is -- you know, like our Treasury. That's now starting to fall apart.

Well, Germany has some assets, they can sell.

What do you think that asset might be that they want to sell?

US treasuries.

We have been playing an extraordinarily horrible game.

This is why I believe the president wants somebody else in charge of the Fed, because the Fed can say, we're lowering the interest rates.

Because he's got to get more money into the system. So people can spend money, can start businesses. Borrow money.

Get things moving, so we can increase the amount of taxes that we collect.

The more people money -- the more people make, the more taxes we collect.

So he's like, we've got to grow the economy. And the only way we can grow the economy is to lower the interest rates.

But at the same time, interest rates around the world because of what's happening with the bonds is going through the roof.

We are in a very -- we've never been in this position before.

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