Pete Buttigieg: The Left's Identity Crisis, Wealth Tax, 2024 Mistakes, Plans for 2028

Last week, we had Joe Manchin on. This week, Pete Buttigieg is here. Everybody knows Mayor Pete: born in South Bend, Harvard, Rhodes Scholar, McKinsey, U.S. Navy, and, of course, he ran for president and was the transportation secretary under Biden. Welcome to the program, Pete Buttigieg. How are you?

Good. Thanks for having me.

Pleasure. Meet Chamath Palihapitiya, a former Democrat who renounced his support for your party and is now a Republican. The spirit of this program is to have a candid discussion. We like to get into the details, and I wanted to start with your perception of entrepreneurs, technologists, and so on.

I was watching a clip of you on Bill Maher, and you said, “These libertarian, science-based folks in Silicon Valley made a very practical decision. These are rich men who have decided to back the Republican Party, which tends to do good things for rich men.” These rich men include Tim Cook, Mark Zuckerberg, and Elon Musk. These are people who had been part of the Democratic Party for a very long time, huge donors to the Democratic Party, and they all made this sort of flip.

Do you think it was pragmatically based upon the desire to have less regulation, a better business environment, and to personally make more money? Or do you think there were other things at work with the loss in 2024?

Well, I don’t think you can reduce it to any one thing, but I certainly think that’s part of the story. Look, it’s no secret that Republican policies tend to favor people who are wealthier. A lot of people who drifted away from the Democratic Party—at least the ones who are getting a lot of attention, like, “How could these business figures, investors, and billionaires have gotten away from Democrats and gone to Republicans?”—might be kind of a dog-bites-man story, not something that’s wildly complicated.

If you look at the fact that Democrats have been extremely concerned about wealth and income inequality, and you’ve got a lot of very wealthy people, I don’t think it was just that. I think there were a lot of things that combined at once.

For a lot of my friends who are scratching their heads and saying, “Wait a minute, these are folks who are from the tech and science world. How could they back a president or administration that’s been deleting references to science and censoring science, at least anytime that climate is concerned?” A lot of these guys are libertarian. How could they be on board with an administration that is sending troops into the streets and has really led a crackdown on freedom? That’s something out of the fever dreams of my conservative and libertarian friends back when we were arguing about politics over beers, something I never thought I would see happen.

Some of these folks are gay. How can they be backing an administration that’s really assaulted LGBT rights? If you just go down the list, there are a lot of things that are counterintuitive about some of these Silicon Valley leaders who flipped—in many cases, flipped from being very active Democrats to backing Trump.

Maybe there’s an intuitive answer to that counterintuitive thing, which is that many of them feel their short-term business interests or personal financial interests are better served by Republicans. I get that.

I would counter, as I think a lot of people in Silicon Valley who are still Democrats would, that you don’t want to be overregulated, but you also want to make sure you’re in an environment with the rule of law. You want to be in a place where it’s safe to say scientific truths out loud. You want to be in a place where somebody can’t impose their interpretation of their religion on other people. I have a whole counter to that, but I think that’s the kind of swirl that we got into, definitely in those short years between 2020 and 2024.

Do you think there was censorship under the Biden administration for things like scientific truth? Let’s just focus on COVID for a second, and the back doors that it seemed the Biden administration had to places like Facebook and Twitter to suppress scientific thought and debate, as you just talked about.

This is an amazing example of some of the false equivalencies that I’ve seen thrown around out there. I would acknowledge that it came really close to the line some of the times when the administration was trying to make sure that bad information or misinformation wasn’t being pushed into the public health conversation, and was engaging social media companies that were trying to be responsible and do the right thing. There might be moments when they got that wrong or went too far.

But right now, we’re in a moment where the president of the United States doesn’t like being criticized by a comedian and has the head of the FCC, which regulates corporations that are trying to buy TV networks, go out and threaten them and say, “We can do this the easy way or the hard way.” That is a whole different level of censorship.

Not to mention the way they’ve gone through every government website and deleted anything that could accidentally be a reference to climate change. I’m worried about the false equivalencies here.

You could definitely say there were moments under the last administration, or any administration, where we could argue that having fidelity to free speech meant you should have done this instead of that, or that these edge cases should have been different. But I am nervous that anybody would equate a president trying to direct the destruction of not only journalists but comedians he doesn’t like with public health authorities in a public health emergency that killed a million Americans, doing their best to make sure that people got good public health information.

Let’s talk a little bit about where the rubber meets the road, which is tax policy. I think a lot of what we’ve seen in this back-and-forth adds to why the Democrats lost all of these amazing entrepreneurs and capitalists who build these amazing companies that create all the jobs and the tax base for this country.

There are 2 tax proposals recently. In New York City, with Mamdani—and I don’t know if you’ve come out and publicly supported him yet—he’s proposing a 54% tax for the top earners there. Here in California, we have the floating of a bill to charge a wealth tax of 5% on billionaires. At a recent Mamdani rally, they were chanting, “Tax the rich.” Elizabeth Warren and Bernie Sanders, who I think are far to the left of you—you can correct me if I’m wrong—are saying, “Ban the billionaires.” We have this sort of movement that being a billionaire is in some way immoral or unethical.

Let’s start with some brass tacks here. Would you support a wealth tax? Obviously, you’re going to run for president again in 2028, and you’re one of the leading candidates. Would you ever support a wealth tax?

In principle, maybe. You rightly said that folks like Bernie are to my left. I don’t know the details of the state and local proposals you just mentioned, but those sound, on their face, like they’re further than I would go.

Look, in reality, we tax across a variety of things, right? There’s income tax, payroll tax, and property tax. A wealth tax would be along the lines of a property tax. The thought, of course, is that you’ve got a lot of folks who become incredibly wealthy.

Importantly, the way taxation works now, less and less of the way the wealthiest people accumulate their income is actually booked as income. This is why you have these stories of multibillion-dollar corporations or multibillion-dollar individuals somehow paying an effective tax rate that’s lower than a teacher or a firefighter. I think most people get that that’s wrong.

My overall take is that everything has a balance and everything has limits. But if you’re asking me whether the wealthiest people in America right now are paying too much tax or too little tax, I would say the wealthiest are paying too little tax.

Whether you adjust that through income tax or through something like a wealth tax, there are a lot of ways to do it. What’s important is that it’s fair, that it makes sense, and that you do it in a way that makes sure the people who are spectacularly rewarded by our system are contributing to it without being so extreme that you’re crushing wealth creation.

What is the responsibility of the U.S. government, in your eyes, with the tax receipts that they get? How do we understand that the money is being spent appropriately and well, versus on pet projects or pork-barrel spending, or frankly just waste and grift?

Where is that line? And give us some examples of how you would make sure that as tax receipts went up, accountability went up with it.

Yeah, I think that's super important, and people's willingness to pay taxes depends, on some level, on their sense that they're getting good value for their money. I cut my teeth as a mayor. We couldn't print more dollars if we wanted to. As the city of South Bend, we had a cash budget and had to balance it every year. If we took on debt, we really had to think hard about how we were going to pay on that debt.

We made sure that anytime we were asking people to pay revenue into the city, they knew what they were getting for that—whether it was police service, parks, or trash pickup. I don't think that's the worst metaphor for thinking about how things should work at the national level, too. We should believe that we're getting good services and good infrastructure. That was obviously what I worked on when I was at the federal level as Secretary of Transportation. We should get good national defense and all the other things that we, as a country, are—

How do you make sure that it's not wasted? I'll give you an example. You had billions and billions of dollars allocated to you from the Infrastructure Investment and Jobs Act to deploy charging infrastructure, right? As of this year, there are only a few hundred of these charging stations. It's been pretty much an abject failure.

That's not true. And I'm really glad you raised that, because it's actually one of the biggest red herrings we had to deal with. This is a program to get EV chargers deployed by 2030. The thought was that by 2030, about half of the car sales in the country would be EVs—or we were hoping about half the sales would be EVs. In order to have that work well, we're going to need more chargers.

The market does a good job of delivering chargers in a lot of places, but there were other places where we found it was lower-income, more rural, more spread out, and it just wasn't going to pencil for the private sector to do it. We had a fund called NEVI. I can't even remember what the acronym was, but the point was, as you said, about $7 billion to buy down the difference, to subsidize or just outright build those chargers in places where they were needed. And we made a couple of choices that we knew would mean that it would take longer, but we were okay with that.

One of them was to have it led by the states. Instead of sitting there in Washington saying where all the chargers ought to be built, we sent the funding to the states. We let them set up their own program. Importantly, we let them set up their own programs differently. We weren't going to dictate what the optimal subsidy was in Wyoming compared to West Virginia, or whether you even did it through a subsidy or whether it was owned and operated by the state.

We took a step back on that and let the states innovate, even if that meant it was going to take a while for them to polish the program, knowing that most of the chargers would go in in 2026 and 2027, but well ahead of 2030.

Now, the second thing—and this is really important, too—we made a conscious decision to insist that the chargers be made in America. When you do that, you're deciding that it's going to take longer. I'll just admit that, because just buying them off the shelf from China would be dramatically quicker. We thought that was worth it because we thought it was important to have a U.S.-based industry with American workers, ideally union electrical workers, making and installing these chargers.

Again, we knew that if the goal was to get them all done by, like, 2023 or 2024, we wouldn't have had the luxury of doing that. But since we thought most of the chargers would be needed by 2030, we were okay with that.

Now here comes Washington politics, right? Somebody gets ahold of the numbers. They see it's a $7 billion or $8 billion program and then falsely try to make it look like we spent the $7 billion or $8 billion already on the handful of chargers that they already managed to build first, even though we never thought most of the chargers would be built even during our first term.

And that's where the Washington game comes in, right? Take something that—I mean, the jury is still out, right? The program's not done. We'll see how the Trump administration does in completing the program. But you can't really say whether it was a success or a failure until the program's been run. They move the goalposts. I'm not challenging you that there's waste, that there are bad things that happen in government spending that I don't like, but—

What's your best guess in general? For every dollar that gets given to the United States government by U.S. taxpayers, what actually lands in productive programs that benefit Americans versus what gets leaked away? What's your best guess? Is it 50 cents of every dollar, 10 cents of every dollar, a penny, 90 cents? What is your best guess? You've been in the bowels of these organizations.

So my experience in transportation is that most of it goes to very good use. If you just break it down, it goes to things that keep the aviation sector operating safely. It goes to things like highways, roads, and bridges. That was the biggest slug of funding that we had in the infrastructure package.

And when the Government Accountability Office or the inspector general—institutions that Trump is demolishing right now, by the way—the organizations that do the auditing and really dig in on a bipartisan basis, look at outright fraud, they're going to come in at a number that's well below 1%. But I've also seen—

No, effectively, this comes to the other part I was going to say. I think about my time in the military, for example. There was a building—I think it was at Camp Leatherneck. Maybe it was Kandahar, but I think it was Leatherneck. When I traveled out there, there was a building that had taken years to go up. I think it was about $30 million. Just before they were about to activate it, they tore it back down. I mean, it was a complete boondoggle.

We see stuff like that happening for sure. We see cost escalations on a lot of projects. It's not the same as fraud. That's the under-1%, but it's still a huge waste if you have a project cost 1%, 10%, or sometimes 100% more than it should. By definition, every penny it takes to build something more than what was actually required is wasted. I do think there's a lot of that. I think government gets in its own way with procedure—

Just explain to us, as a secretary, how much control do you have in stopping that waste? If you see it, I'll give you a specific example. In 2023, there were some pretty incredible outages in the FAA. We've all now learned that we have an incredibly brittle air-safety infrastructure that needs to be upgraded. You saw that in 2023; there were outages all the time. What do you do to stop that? And when you see the waste, how do you stop it?

You know, that was an example where we needed to invest. So it's that tough situation of needing to swallow hard and go before Congress and the taxpayer and say, “Look, we need more funding for this.” But that's what we did. And by the way, this is one of the rare areas where I agree with my successor, who's done pretty much the same thing, to make sure we got the funding to upgrade the technology.

Now, this is one of the few audiences that might be nerdy enough that I can geek out a little bit and talk about the big upgrade to the communications backbone that we were doing. It was to go from TDM to IP, from copper to fiber. I think a lot of people would be astonished to know that something as important and theoretically modern as our aviation system is working on TDM. So that obviously had to be upgraded.

We launched a contract. Verizon is the contractor. Obviously, a multiyear, multibillion-dollar IT contract, when you have to have not even 5 nines but like a billion-to-1 chance of anything going wrong, 24/7/365, is challenging, and it takes a while. That's one of the reasons why we felt a lot of urgency on that particular issue.

But again, there are 2 ways of looking at this, both of which are true. One thing is to look at the system and say, “How can the system not be more modern?” We need to make better use of the dollars that go into the system, have more up-to-date communications infrastructure, and have more controllers who are both well-equipped and well-rested. The FAA's got to do better on that.

The other way to look at it is to consider the civilizational achievement that is aviation safety in this country. So it's easy to grumble, and I grumble—and more than grumble. I mean, I got pretty upset with a lot of things about how aviation works as a passenger, which is why we pushed airlines so hard on passenger protections.

But just in the 4 years I was secretary, we had about 4 billion passenger enplanements. So, 4 billion times somebody got on an airplane, right? And 0 commercial airline crash fatalities out of that 4 billion. In other words, what this kind of clunky, imperfect federal government has achieved is a standard of safety on a form of transportation that involves being propelled through the air almost at the speed of sound by flammable liquids miles above the ground.

And frankly, you and I—one of us is more likely, not to be flip about it, but one of us is more likely to randomly die of natural causes during this taping than to be involved in a commercial airline fatality.

Let’s hope it’s Jason.

Wow. [laughter] Well, I was about to say, in some places in our infrastructure, we’re incredibly blessed. And I’m wondering, as now you’re in your 40s and you’ve seen a lot of the world, whether it’s your military service or just being a mayor of a small town and then, obviously, working in a Cabinet position, how has your view of free-market dynamics solving problems versus the government solving problems evolved, if at all?

Because when we talk about these problems, you look at what’s happening with space. We now can get to space for 5% of what it used to cost. Thanks to Elon Musk and SpaceX, we have superchargers and chargers everywhere, thanks to Tesla and a number of other folks putting them out there—ChargePoint, et cetera.

When it comes to putting fiber into rural areas, which the FCC was trying to do, they were going to spend $5,000 to $25,000 per home. And now we have Starlink and its competitors. Again, back to Elon, whom your party decided under Biden not to even invite to the EV summit.

Well, let me talk about that, but I want to park that to the side because we should probably talk about what happened there.

Because I’m a moderate, but I voted Democrat about 65% of the time and Republican a third of the time. When I look at it, I just can’t understand how the Democratic Party hates us so much—hates entrepreneurs. That’s how they feel. But that’s how Silicon Valley feels. We’ll talk about whether you want to deny it or not, but it feels like—

Hates entrepreneurs? I don’t think most Democrats do. But I know what you mean about the vibes, and we should get to the piece about Elon particularly.

But on the substance of the question you’re raising, I think it’s really important to think of this as not, “Should it be the government or should it be the private sector?” but, “Which parts should the government do, and which parts should the private sector do?”

So, to me, the classic example is just the smartphone. I cannot imagine that a smartphone designed by the federal government would be a pretty thing. As a matter of fact, having been in the military and dealt with what I guess you could call apps—some of the software that you have to deal with, even if it’s done by contractors—it’s kind of done in a way that you can tell was designed by the government, and it’s not pretty.

On the other hand, when you talk about capital allocation, the federal government literally invented the internet, right? There are certain trillion-dollar ideas that the private sector just won’t do because it doesn’t pencil, or because of whatever market failure is there. That’s where you need government.

That’s things like basic research. That’s things like filling in gaps, especially on network effects, like broadband and EV charging networks, where the bulk of it can be done quite well by the private sector, but there are pieces that just don’t click unless you have federal involvement.

And that’s the attitude we tried to take on things like EVs. I never thought that we were going to create a government EV, or that you even needed the government to make sure that a transition to electric happened. But we did believe that for it to be made in America, for it to happen as quickly as we wanted, and for it to reach people who maybe couldn’t afford those initial buy-in costs, whom we really wanted to help out, that’s where there’s a role for policy. That’s where there’s a role for funding.

What I get confused about, though, Pete, is that on the one hand, you’re saying the government should set up these clear moonshot objectives that advance America for itself and relative to other countries. But then the other side is that if you do too well achieving those objectives, we want to go and take a bunch of that away from you.

How do you reconcile that? And how do you think it impacts the motivations of young men and women who want to learn and excel and put themselves at risk, but also want to believe that if they put themselves at risk and then they are rewarded, they’ve earned those rewards?

Look, I love people being entrepreneurial, creating something and doing well by it. I mean, that’s the basic idea, only to a certain level. Beyond a certain point of entrepreneurship, if you create a monopoly, I might not like it. If you hurt other people, I might not like it. If you concentrate power into your hands to an extreme extent, I might not like it, because that’s just not American.

But in general, if we’re talking about taxation, I just want to make sure people who are really well-off do their part to pay into a system that has helped them to thrive, because that’s what it takes for the next generation to do well, and that’s what it took for all of us to do well.

Let’s just assume you’re president. You get trillions of dollars of receipts.

Mhm.

I’m going to guess the party line that you have to take is that DOGE was bad. Okay, fine. What is the version of DOGE that you would implement so that—

Great question.

—we could figure out what percentage of that dollar that we’re giving you is wasted and stop it?

Yeah. I would love, in theory, a Department of Government Efficiency that was actually about government efficiency. I think that would make tons of sense. It’s what I tried to do again when I was mayor.

We took apart the small government that I was in charge of, about a $300 million operation, and put it back together and found that it could be radically more efficient in many ways. And we need to do that at the federal level.

How much money did you take out from that $300 million?

We used it better. I would put it that way. There were areas where we were able to have a certain budget line item shrink, but in a city where the average per capita income was $18,000 or $19,000 per person when I came in, we weren’t handing that over in tax breaks to wealthy residents. We were putting it to other use on public safety and fundamentals like that.

But look, again, I agree that the DOGE we could have could do a lot of really good work. It could find duplicative regulations. It could find cases where we could move from input-based to output-based evaluation of our programs.

In other words, instead of saying, “This is a meaningful program because how many billions went into it,” figure out how much value came out of it.

But the DOGE we got was one that couldn’t even count, that put information sometimes that was wrong by 3 orders of magnitude on its own website, then erased its own information because they didn’t believe in transparency.

The DOGE we got sent an email to every air traffic controller in the country during an air traffic controller shortage and suggested they quit being an air traffic controller and get something “more productive” to do in the private sector, only later to be told, actually, that was a mistake. The DOGE we got apparently wasn’t supposed to send that information to all the air traffic controllers. Whoops.

The DOGE we got fired people in charge of making sure our nuclear weapons were safe and in charge of making sure that bird flu didn’t spread and then, whoops, tried to hire them back in a race.

So, yeah, there’s a huge difference between the DOGE we got and the DOGE we could have had. But if you’re talking about, in principle, whether we should unleash really smart, talented people with an outside-in perspective and a free hand to evaluate what is working and where we’re not getting value for our money in government, you and I would be in violent agreement that that’s a good idea.

And there’s no better place to find some of those opportunities than in the things that the federal government does just because it does, or because there was a good reason once upon a time but that reason has expired, or maybe the reason was not good to begin with.

Can we go to debt as part of this? I don’t know where you were going to go, Chamath, but I think maybe—

I wanted to go to the inner workings of the Democratic Party, but go ahead to debt.

Yeah, and then that’s a good segue. I was just going to point out, we’ve added about $2 trillion in debt over the last—well, 9 years now—under Trump 1, 45, 46, Biden, and now again with Trump. We just hit $38 trillion. So, it seems like we’re adding $2 trillion a year. What’s your take on the sustainability of this?

First of all, the debt path we’re on is not sustainable. And that’s one area where you’re right: neither party has covered themselves in glory. And it’s an area where I would part with some in my own party.

I think for too long you’ve heard the message from Democrats basically that debt doesn’t matter, or that there’s no such thing.

And there was a moment when this felt a little more credible. Some of the evidence as of a few years ago put a lot of wind in the sails of what was called Modern Monetary Theory. I think a lot of that looks different now.

It looks different. And then you had the Republicans, right, who say that debt matters but then act the exact opposite.

Now, look, as a good Democrat, I could point out that I would argue there’s a difference in terms of what history empirically has shown us in terms of the return on investment you get when you raise debt to fix roads and bridges and other productive infrastructure versus if you blow up the debt in order to give massive tax breaks to the wealthiest people in the country.

Because that has just never generated the growth that the Laffer curve has collapsed empirically, and it just doesn't work that way. So I could quibble over, if you're going to do debt, what's the best thing to do with it? And I would argue the best thing to do with it is education, healthcare, investing in it to make sure kids don't get lead poisoned, investing in ports and roads, and not investing in tax cuts for extremely wealthy people who didn't need them and, in some cases, weren't really asking for them, and were perfectly productive—in fact, history would say more productive at times in history when they were paying more taxes in the US.

But leaving that partisan fight aside, I do want to come back and agree with you again that where we are right now is not sustainable. Contrary to what some on the left would say, there is such a thing as the debt. It does matter, and we need to make sure that what we're doing going forward is more consistent with some basic fiscal responsibility.

What is the fiscal responsibility? I hear all this political speak over and over again from you guys, but I never hear anybody say, “You know what? We’ve got to tighten our belts, folks. We’re going to have to cut unemployment, and we’re going to have to raise taxes here. We have to make cuts here.” I don't ever hear any of you come up with a plan that actually would pass muster with any of us in the business community who have to run companies and make sure they're solvent. This does not seem like you have a plan or anybody else has a plan. Is it because it's so unpopular that you can't just say, “Hey, there's going to be some austerity here, and it's going to be painful, and there's going to be more taxes, and that's going to be painful, and then you don't get elected”? Is that the issue?

I literally did put out a plan in which I balanced every single spending item back when I was running for president in 2020, which feels like another lifetime. Every single thing that I proposed spending on, I also proposed to pay for and explained what would have to happen tax-wise in order to do it. Again, those are just the habits that I built as a mayor who had to do my budget in cash.

Look, it's not like it's a completely unsolvable problem. There are measures that we've got to take to reduce things like the cost of providing healthcare, which is one of the biggest sources of pressure on Medicare, Medicaid, you name it. Not just getting people insured, but the actual underlying cost. Same with pharmaceuticals. And then there are things you've got to do on the revenue side. I'm sorry, but we can't just slash $1 trillion from what the wealthiest people are paying again and again and then call this a sustainable budget.

The $1 trillion of cuts—what is that specifically that's being cut?

Oh, you mean on the tax side?

Yeah.

Well, start with OBBBA, right? And then TCJA, too. We know that the vast majority of the benefits of those tax cuts went to the wealthiest. We could say the same about the broader pattern of cutting taxes going back to—I mean, I guess if you look back over the 50 years. Why do you think that the American entrepreneurial class was more productive in terms of annual productivity growth back when taxes were higher?

How do you measure that?

Well, I don't know. Productivity growth and income taxes. Those are two pretty simple measures you could use.

Which era?

Well, look at the ’70s and ’80s, right? The ’60s, ’70s, ’80s. Look at GDP growth, productivity growth, and tax rates. I'm sure you're aware that those growth rates were higher and the tax rates were higher, too. I'm not saying there's no correlation where, if you overtax, you'll eventually get less productivity, but if you look at where we are in the spectrum between too far this way and too far that way, it's not like we're doing this in a vacuum of data.

But I just want to make sure: You think the OBBBA was a giveaway to rich folks? No taxes on tips, extending the Trump tax cuts that disproportionately affected middle-income folks—those are giveaways to rich people?

Do I think the majority of the OBBBA tax cuts went to rich people? Yes.

And how do you define majority? Dollar tonnage of depreciation, or actual dollars in the pockets of humans?

I mean, either way you look at it, it's important how you look at it because—

Actually, if you're low-income, dollars in your pockets are going down when you account for what they've done with the subsidies.

Which subsidies?

Can you name me a measure? Can you name a measure by which—I'm asking you. I'm asking the politician. I don't know.

Yeah, I don't have a line-item breakdown in front of me. What I'm telling you is that it is not terribly contested. If anybody listening to this podcast feels like opening up a window and looking it up for themselves, just to figure out which one of us is right, it's not terribly contested that the majority of the benefit of TCJA and OBBBA went to wealthy people. It's definitely not contested—or I would say generally not contested—that OBBBA represents one of the largest transfers of wealth from lower-income people to upper-income people in global history.

How do you measure that?

You can measure it in terms of wealth before and after. You can measure it in terms of the incidence of the different forms of taxation. You can measure it in a total package that accounts for subsidies as well as benefits. Any number of ways. But again, if you measure it a different way, I'd love to hear it because I don't regard this as something that's deeply contested. It sounds like you have a measurement in mind that's different, and I'd love to run with it and look it up so I can see where you're coming from.

And we definitely cut corporate taxes and personal taxes because of TCJA. Yeah, right?

And to be clear again, because the Laffer curve turns out to be—we did not just grow our way out of the deficits that it created. Right?

Let me ask you a question about the inner workings of the Democratic Party. I'm sure you've been asked this a hundred times, so sorry for us being the 101st, but in Kamala Harris's memoir, she points in part to your identity as a reason why you weren't considered as her running mate. Can you explain to us the role of identity in Democratic politics—both perhaps you on the way in, when you were nominated for secretary, and then maybe on the way out, when you were not considered as a credible vice-presidential candidate?

Let's just say I would love for identity to play a less central role in the politics of our country and the politics of my party—not just because I might have been passed over for an opportunity, but because I think it has really dominated so many people's thinking in a way that makes it harder for us to build a message across identities. Don't get me wrong: I don't think it makes sense to pretend that identity doesn't matter. I don't think it makes sense to pretend to be colorblind. I also don't think it makes sense to allow that to explain everything, which is one of the habits that's formed, I think definitely on my party's far left, that made it harder for us to get through, especially when you have a lot of people whose interests are shared.

I'm thinking about the economic interests of poor people and low-wealth people in this country, for example, who are Black, white, and of every ethnicity and identity and gender, of course, who maybe didn't hear a unifying message that was speaking to them as a group because it felt like my party was like a salad bar: Here's something for your group and here's something for another group, and it didn't add up into a story. Now, I would argue that Trump practices a kind of identity politics, too—a sort of white identity politics that makes people feel like they are encircled by the other, that immigrants are sort of an invasion. We can go down that road, and I often have, but the more straightforward way to answer your question about my party is that I think identity has become too central to how my party thinks.

How have they reacted? You took a pretty firm line on Israel-Gaza. You took a pretty firm line on transgender folks in sports. Tell us about the dynamics of taking those positions inside the Democratic Party.

Famously, our party has a lot of different voices within it. Some folks—if you are not saying the leftmost thing—they're just done with you. But I think a lot of others believe in the idea of politics as building a coalition and pulling people into a bigger picture. I'm going to say some things that won't be in conformity with what every activist group in my party wants to hear. That's okay. That's part of it.

How do you navigate the necessary extremism, maybe, that's required to get out of a primary process?

Well, this is the classic issue with going from primaries to generals, right? You are pressured to say one thing to appeal to the base in your party, and then you wind up, if you're not careful, saying things that make it hard for you to have credibility in a general election when you're trying to paint a picture that the broadest number of people possible can see themselves in. That's nothing new. But one thing that has happened more and more is that that's happening in more and more races. So the presidency is always a little bit like this, but the presidency is also the one that gets painted in the broadest strokes because it's a campaign for the whole country, and it's all the different jostling around all the issues and all the groups, all boiled down into 2 people running for 1 office.

But where I think this actually hurts us the most is in Congress. We have 435 seats in the House. Last time I checked, less than 1 out of 10 of them was considered seriously competitive at best. Less than 40 are actually competitive, which means that in 9 out of 10 races, the primary is pretty much it.

You never even have to bother thinking about whether some stance you took in the primary is going to make it harder for you to work across the aisle, or harder to win people over or bring them together in the general, because these districts are so gerrymandered that all you have to worry about is your right flank if you're a Republican, or your left flank if you're a Democrat. That's where I think it hurts us the most.

The Democratic Party—really, 2 parties right now. The classic Democratic Party, I'll call it the Clinton-Obama party: We're socially liberal, but we're not absolutely crazy and insane. We don't necessarily need to advocate for trans kids to get surgeries when they're 12 years old and 14 years old, and all the stuff that's now become illegal in most modern countries.

Is it 2 parties now? I'm watching Mamdani and that group go, "Ban the billionaires, more taxes and socialism, and here's all the handouts. We're going for it." Then there's guys like you and, I would say, the more Clinton-era, Obama-era kind of moderate Democrats. That's kind of how I'd frame it. Can those 2 ever coexist in the same party?

I think both parties have their contradictions, and that's definitely true for my party. One of the biggest problems we have as a society is the level of inequality we've hit. Historically, there's no evidence that any republic can reach this level of inequality, hold on to it, and continue to be a republic.

The question is, what do you do about it? You've got an explicitly socialist left that says the answer is socialism. You've got Republicans who tend to say this is not a problem at all. Then you've got what I think of as the center, or at least what I would like to be the center of my party, which is saying, "Yeah, we've got to do things. We've got to lean in. We've got to use the tools of the state, not in a socialist way, but in a way to try to have things be more balanced in this country."

Is there a contest between the center-left and the far left, or however you want to characterize it? Sure. But today's Republican Party is a coalition of normal Chamber of Commerce business Republicans, more of the tech Republicans who, to me, are more libertarian, even though it puzzles me that they're for such dramatic government control over society right now, and Trump.

You have normal business Republicans, technolibertarians, and economic populists, who are in many ways to the left—even left of center in some weird ways—on trade and some issues like that. Then you've got white nationalists. I don't know that they can coexist for long if they're not held together by the awe of, or fear of, the personality of Donald Trump.

People keep imagining, maybe what if we had a third party? I look at other countries that have them, and it's not unusual in a lot of other modern countries to have 4, 5, 6, or 7 parties. In some ways, it feels on its face like that would make more sense in the U.S. But I think the reality in practice is that anytime somebody tries to go off and start a third party, it just winds up screwing it up for one of the other 2, and we're right back where we started.

Pete, do you think that Donald Trump made the right decision to close the border? If not, why not?

I think that he is right to draw attention to the problem of the border and that it is important to have a secure border. I don't believe it was true that it was exactly open before. I think it is functionally closed now, but I would agree that the last administration didn't do enough and didn't do enough early enough.

Yeah. Yeah. And why do you think Biden looked the other way?

What was the strategy? Was there a strategy?

Yeah, I think what happened was he was really looking to Congress to do it. He came out of Congress. He was a creature of Congress and thought Congress could forge a bipartisan consensus, since there's actually a bipartisan agreement among the American people on what to do, right?

Most people believe what I believe, which is: Let's make it harder to come in illegally and easier to come in legally, and to get legal if you're not. I mean, that's where most people are.

Yeah. And that's where most of the space for compromise has been on the Hill. Yet, I think it was the 1980s the last time we had an actual bill to fix it. So I think—and this is speculating; I never really was in the middle of the immigration side of things—that he felt like the way to do this was to get things done in Congress.

He felt that he'd managed to get the infrastructure bill done and the IRA. But what's interesting is that when he finally gave up on Congress, when it was clear that we just weren't going to get very far, meanwhile you had that exact set of executive orders that came late in the term and had a major effect on the number of illegal crossings.

You've got to ask yourself: If that executive order that happened toward the end had been done in year 1 or year 2, would we be in a different place? Now, of course, we're on the other extreme. We've got citizens who just have an accent or look brown getting picked up, sometimes getting detained without access to a lawyer for a frighteningly long amount of time.

And that's citizens, let alone other people who maybe shouldn't be here, but also shouldn't be brutalized. I think one reason you see the pendulum swinging on this is that we're seeing just how extreme it's gotten, at a time when I think the only way forward really is a kind of grand bargain.

We need to bring together the people who believe in these simple realities: We've got an economy and a society that exerts a pull and actually needs more people for our demographics and our economy to work than there is room in the legal pipeline to come in.

Just to clean this up, Pete, if it were up to you, would you reopen the border, or would you maintain the Donald Trump position right now of, "Okay, now it's closed. Now let's figure out this grand bargain," as you say, keep—

Let's be more precise about what we mean. If you mean having it be at least as difficult as it is now to cross illegally, I think it's a good thing for it to be difficult to cross illegally. But again, I think calling it open then or closed now, you're talking about a lot of different overlapping things.

Obviously, there are a lot of things about Trump's immigration policy that I think are wrong, destructive, and possibly illegal, too. If everybody has consensus that the border should be closed, and it should be orderly and legal, great. It's 80% of the country.

The majority of the country doesn't like what we're seeing with ICE agents without badges wearing masks. That's the majority of the country that's uncomfortable with this. A large percentage of the moderates who voted for Trump—at least this is what the surveys are saying—are not comfortable with this.

I'm curious about what you think the motivation is, and you can go into conspiracy corner if you want. It's allowed here on this program. We can speculate.

The conspiracy corner for Biden was that he wanted to let a lot more people in to build the Democratic base and get voters. Okay, that's one theory. Now, the theory here is that Trump is doing these violent deportations, tackling people, and spending a lot of money while doing it. Why is Trump doing it this way? Why does Pete think he's doing it this way?

I think he thrives on a politics of fear. I think chaos is good for him. I think he thrives on chaos. When you see images of people getting beaten up, or what he used to call "American carnage," anything that validates that—basically, the worse it feels to be in this country, the better off Donald Trump is, whether he's running for president or whether he is president and sending troops marching into the streets.

Can I just say, as the only immigrant right now on this podcast who immigrated here legally, I feel much safer and better under a Donald Trump presidency than I ever did under a Biden presidency. I just want you to hear that from my mouth, for what that's worth.

Do you feel safer about the fact that a Latino doctor crossing the street in Washington, D.C., is getting hassled or harassed because they're brown?

I don't think I've heard that. Now—

Okay. So you're not aware of any case in which a U.S. citizen—

No, but I will tell you, for example, after 9/11—

Wait. You're on a podcast commenting about immigration. You have some level of awareness.

Let me tell you: After 9/11, for years, I had SSSS on my boarding passes, and I was pulled over constantly. People probably thought that I was a Muslim hijacker.

So I know what it feels like to be harassed. What I'm telling you categorically is that I feel safer in this presidency than I have ever felt. I'm just letting you know that. This is just my lived experience.

Yeah. Yeah. I mean, I think—

I'm glad you feel safer. I'm worried about how most Americans feel.

Well, I mean, I think we're all aware that people are being picked up, they're being racially profiled, and their Fourth Amendment rights are being suspended here.

Let me put it a different way. Has it crossed your mind that if, right now, they started by going after people who are here illegally and then started roughing up people who are citizens but who are speaking up against the administration, even if you feel safe now, in a country where that sort of thing can be done—where even comedians could lose their jobs for criticizing the government—does any part of you wonder if that might ever come for you?

Pete, it did come for me. Here's what I'm trying to tell you. After the Patriot Act passed, after 9/11, I had to come to terms with the fact that even as a legal immigrant into the United States, I was going to get extra searches and I was going to get stopped. It happened for 6 years. I came to terms with it, put my head down, and kept working.

But that didn't mean it was okay, right? It was a law that was passed, and people felt, for whatever reason, that there was an amount of racial profiling that could happen then. What I'm telling you is that every immigrant class has felt this at some point. My point is that it made things safer in the aggregate, and what I'm telling you now is that what is happening now makes cities safer. If you go to Washington, D.C., it is the safest it's ever been. You hear this consistently from many brown and Black people.

I guess what I'm telling you is that if you take the amount of money it costs to do a full-scale military deployment in an American city and just use it on improving funding for the police, mental health, and a whole lot of other things, you probably get a pretty good result that way, too. But I know there are a lot of people, and I have heard personal, direct examples of people who are, in some cases, U.S. citizens, or in other cases here illegally, who no longer think it's even okay to go outside. They ask people to run errands for them because of the atmosphere that has been created in Washington, D.C. So it's definitely not safer for them.

Let me ask you a different question. I really want to get some insight into what it was like for you to work in the Biden administration. We've had a sea of tell-alls coming out: Kamala Harris's book, KJP's book. We had Joe Manchin on last week, and one of the things that he said is that it was not that Joe Biden changed, but that the staff were nuts, and that Ron Klain was effectively a gatekeeper. If you had reasonable proposals, they would go into some black hole and die. Can you give us a sense of what it was like to work under Biden—the positives, but also the negatives? Give us a fair representation.

Yeah. In the spirit of fairness, I should say this is the only time I've—outside of the military—ever worked in the federal government. So I can't benchmark it to compare one White House to another or one president to another, but I'll tell you what my experience was like.

There was a high level of ambition to get big things done quickly, especially in the first 2 years, when it felt like there was an opportunity to work with both houses of Congress to make it happen. That included a ton of energy going into, among other things, spending time with folks like Joe Manchin to make sure that we held together that coalition to do things like the infrastructure law.

There were calls I agreed with and calls I disagreed with. There were also a lot of times when it looked like something wasn't going to happen, and then somehow it happened. That's where I do think it helped to have a president who spent as much time as he did in the Senate, because it really felt like the infrastructure bill was dead. We forget this now because it happened, and it's kind of hard to imagine it was any other way, but it was proclaimed dead many, many times in the summer of 2021 before it got done. These were moments of snatching victory from the jaws of defeat.

The word “gatekeeper” gets used a lot for White House staff. I don't think that's unfair. I would also say that I don't think that's new. The gatekeeper is often the other word you use for a chief of staff.

Was he in cognitive decline, or when did you first realize he was in cognitive decline? I guess the better question is when did you suspect that he wasn't up for the job?

You could feel that he was growing older. I think we all saw that. My experience—and obviously I wasn't at the White House every day; most of the time I was out in the field doing transportation work—but what I would see if I was at an event was the same as what you'd see watching TV. I think the debate was a real turning point.

Yeah. I mean, the debate was a turning point, right? You just saw—I think everybody saw what everybody saw. On the other hand, when we watched something like that happen, how does somebody who is in such cognitive decline get put into that situation? It's clear that they knew many months before that this was not going to end well. How did they get to that point? How insular were they? Then I want to talk about the selection of Kamala without having a primary.

Yeah. I think the short answer is that there's not really a “they” that makes that decision, right? People give advice, but there's a “he”—one person decides if he's running again. One person decides, at the end of the day, on the campaign strategy and is accountable for that.

I can't imagine exactly what was going on in the inner circle. I wasn't part of those conversations, but I do think that by the time it got to that debate, it was just very clear that it wasn't serving him well and wasn't serving the party well.

Okay. So I know you don't want to go to that point, but just as the last thing about the speed run, there was no primary.

We were speculating on podcasts: Why not run a speed run? Just have the 6 or 7 candidates, including yourself, do 3 weeks. This would be blockbuster television. Were you in favor of the speed run, or not? Was there discussion of that? We're hearing that Obama and maybe some other people wanted to have a quick primary. What do you think the outcome would have been? Would you have had a shot at winning?

Yeah, there's a lot of chatter about that. In hindsight, since the outcome of what did happen was not good, I think anyone serious in our party has to ask, “What if we'd done that?” You could argue that it would have led to a different nominee. You could also argue that it would have led to the same nominee, but that she would have been stronger.

If she had become the nominee by prevailing over another half-dozen people who wanted a shot, presumably that kind of sharpening that happens would have served her well in the general. Let's remember that that's actually more normal. Most countries don't drag out their presidential process for more than a few weeks.

Let's move to a different, more tactical question. This is my last question for you, Pete, which is that there's some discussion about moving NASA under the Department of Transportation. Good idea, bad idea? Give us your reasoning.

Well, let me think about it. To be honest, I haven't deeply reflected on this. At a selfish and nerdy level, it would have been amazing as Secretary of Transportation to be working on NASA, too.

Generally, anytime you can have 1 box on an org chart where there are 2, as long as it's justified, I think there are some benefits to that. Right now, the way that it works—let me put it this way: If we think the future of space is going to be more and more about commercial space, which is clearly, just as a matter of numbers, what's happening, the mishmash we have now is complicated. You've got NASA obviously leading government-driven space missions, and you've got the Department of Transportation, which already had responsibility over some things, including commercial space licensing.

We wound up having to radically accelerate how that worked because it actually comes under the FAA, largely because you have to go through the national airspace to get to space, right? There are actually parts of it that sit with the Department of Commerce. So it would make sense to disentangle that one way or the other, whether it's inside of DOT or whether you configure it a new way.

I do think that Washington in general—and my party is definitely guilty of this—is too attached to all of the structures that we have right now, the existing org charts, and existing habits. One message I'm trying to get my party to accept is that if and when we get another chance, a lot of the things that he has burned down just aren't coming back the way they were. Why would we put them back the way they used to be if they were full of problems anyway?

I don't have a deeply considered answer for you, but I wouldn't be hostile to a change just because it's a change or just because it came from this administration.

This is my last question. There was a report that came out today. I think the number of miles driven per day by Waymo is about to pass 250,000. We have Tesla with the Cybercab and robotaxis. These things have a material ability to prevent drunk driving and prevent vehicular deaths.

What do you think should be done? Should we let this play out at this exact pace? Is there a responsibility from the federal government? Do you wish you had done more to accelerate this? Tell us about autonomous driving and its role in society.

I think there's the potential to save a huge number of lives. We talked earlier about the incredible standard of aviation safety: zero fatalities per billion passenger miles. It's the opposite on roadway safety, and nobody talks about it. We had a plug door blow out of an airplane, and we reconsidered our whole oversight framework because somebody could have gotten hurt that day.

Meanwhile, every day, 100 to 150 people die on our roadways in car crashes involving vehicles driven by humans. I mean, it's enough to fill a 737 every day. It's on par with gun violence: 30,000 to 40,000 people a year. So, human drivers have a murderous track record.

It's a little bit different when we talk about professional drivers, who have incredible—I met truck drivers who have 2 million miles with no crashes or accidents. But, just as a general rule, most of us—the average driver—think we're safer than the average driver. And the average driver stands a shockingly high percentage chance of getting somebody killed.

I think we're at the point where at least some of these technologies are already safer than human beings, and that's only going to increase and improve. The irony is that even a handful of highly publicized negative incidents will really change public acceptance.

And they have. Yeah.

Yeah. So, my approach was that we do need to be conservative as a safety regulator to make sure it's safe—not because I don't believe in the technology, but because I do. I think if people see it unfolding safely, there's going to be more acceptance.

But are there things we could or should do, or could or should have done, to accelerate AV adoption? I think the answer is yes. The simple reality is we can't tolerate human drivers killing more than 100 people a day on our roads as if it's no big deal.

This is a perfect segue for my final question. We've had a grand debate occurring in our industry about job displacement. Amazon announced yesterday, I'm sure you saw, 30,000 white-collar jobs to be eliminated. UPS today, something around 40,000 people, and there was a leak in The New York Times that Amazon was planning on eliminating 600,000 job requisitions in the future and not hiring for them because they're so convinced that robotics will do that.

We all know AI is going to be the biggest change of our lifetime. I don't think that's the debate. The question is: What will job displacement and new job creation look like this time? What does Pete Buttigieg think? Do you think that we have a serious issue on our hands, or do you think we'll be able to navigate it? And what's the government's role in it? When you're president, what will it look like if you inherit this chaotic AI job-displacement potential?

I'm seriously concerned about it, and part of that's from growing up in the industrial Midwest. I grew up in Northern Indiana, where there were a lot of auto-industry supply-chain companies. In the 1990s and 2000s, there was a lot of trade and automation, but the truth is, mostly automation came in.

Everybody was told, “Don't worry too much about what you're doing today. The pie is going to get so much bigger that everybody will be better off.” The thing is, the pie did get bigger, but the rest of that promise didn't come true. And people were pissed.

People were pissed because they lost their income, but also, even after they got their income, if they went through a training program and got another job in a field that was growing, but it wasn't who they thought they were, it wasn't connected to their sense of identity or belonging, then you continue to have a displacement that's not just economic, but really deeper than that. I actually think a lot of that leads directly to the populism and nationalism that you see in this administration and in this political moment.

The thing that really haunts me is that, as much as any auto worker or electrical worker I know, their sense of belonging and identity very much depends, in many ways, on being an auto worker or an electrical worker. That's even more true for most white-collar workers I know. People who work in law or software—you see what's happening in radiology, just to take one example, and what's happening in medicine that's really changing because of AI—and the displacement that could come with that, I think, is enormous. I don't think we're prepared.

I don't want to get into prediction games about which things will happen in which order, but I think it's clear that it's big. It's clear that it's fast. It's coming. It's accelerating. My big worry is that if we're already at a level of concentration of wealth and power that no republic has ever survived, is this going to be a development that just makes wealth and power even more concentrated in even fewer hands? I don't think it has to be. I think that's where good policy can make a difference.

But I think if we just sleepwalk into it, that could happen. It could be even more destabilizing. The thing that you just said is the key: It doesn't have to be. It requires very smart, thoughtful legislation.

I think that we had some really idiotic legislation under Biden that President Trump and David Sacks have largely unwound—these diffusion rules, the gatekeeping, all of those things, Pete, would have seen us lose to China. Just to be very clear, as a technologist who's in the middle of it, who is investing and building, what I'm telling you is those historic rules were terrible and dumb, and they had 1 or 2 companies that would have basically had all the spoils while the rest of us would have been standing on the outside looking in.

That's no longer the case. We can run the race now. But I think what you said there is very critical: It doesn't have to be a winner-take-all or winner-take-most outcome.

Well, and to me, that's not just a question of tech policy. That's a question of—

Well, this is, by the way, and I just want to be clear: The reason it was likely under Biden is because it was so difficult to actually talk to him. He wouldn't talk to anybody.

The difference with Trump, just so it's clear, is that he'll talk to everybody. He'll make his own decision, but he gets the broad tapestry of everybody's feedback. The danger of that Biden approach is that when 1 or 2 people are allowed in and everybody else is shut out, and you can't even find a way of just proposing ideas or explaining how it's going to be, you get things like the Biden diffusion rule.

Just as something to think about, I think being open and being available to people is a really good way of running the country. That's 1 thing I definitely believe in.

If you win, Pete, are you going to forget us and not come back on the pod? And you won't invite us to the White House? Or, if you win, can I still get an invite to the White House?

I would love for this not to be our last conversation.

It looks like Gavin is in first place, AOC, oddly, in second place, and then yourself in third place right now. Gavin obviously is running up the hill. Who knows if he takes the arrows first, but it looks like you're in a pretty good position here. What are your thoughts on the early indicators of who's connecting with the sharps over at Polymarket?

Well, you guys don't strike me as folks who'd be content with a 6% return.

Got to get those numbers up, Pete. Maybe a day, Pete. Maybe a day.

What do you think about Gavin coming out strongly and saying, “Hey, I'm running. Obviously, I'm running”? He's been pretty clear about it. Do you think that's a smart, savvy move, or is that a crazy move three years out?

I don't know. One interesting thing about what the current president did is, if I remember right, he didn't even wait for the midterms in order to announce.

It feels like the timelines keep shifting. I'll tell you, I'm in no hurry to be in the middle of presidential politics. Obviously, it's something I care about. It's something I have done already once before, in 2020, but this year is the first year in about 15 that I haven't been in office or running for office, and I'm kind of enjoying it.

I'm working hard supporting candidates I believe in. We have a PAC, and I travel a lot and speak a lot, but there will be a time for those kinds of things, and I'm not going to try to rush.

Do you support Mamdani? Did you support him? Did you come out publicly for him, or do you have concerns?

I'm not getting directly involved in that race or endorsing or anything like that.

You're going to dodge the “globalize the intifada” bullet?

I mean, that is the craziest. Obviously, that's a problem. He's got a lot of views. It's no surprise or secret that he is further left than I am in the Democratic coalition.

That said, I was a 29-year-old mayor that a lot of people wrote off and didn't take seriously, and was able to get big things done. So, I expect that he's going to win.

Socialist experiment in what was, at least before, the greatest city in America and one of the greatest cities in the world.

Well, the thing about winning is you get a chance to find out very quickly how good your ideas are and whether they'll have the results you have in mind. And that's something that I expect: he'll win, and then we'll all get to see.

Yeah. It's going to be interesting to see when that 54% tax hits, if people are like, “You know what? Miami and Texas look pretty great. Maybe I'm going to bounce.”

All right, listen. Pete, thanks so much for taking the time. We'll have you on again. Great to talk with you, and we appreciate you coming on the program. We'll see you all next time. Bye-bye.

Same here. Good day.

Great job.