Rahm Emanuel: Trump's Foreign Policy, China, Europe's Decline, Immigration & DSA vs Democrats

All right, everybody. We are super pleased to have Rahm Emanuel join us for the All-In interview today. He was a senior advisor to Bill Clinton, the last president to preside over 0 national debt.

He was Obama's chief of staff, mayor of Chicago, and ambassador to my favorite country to visit, Japan, under President Biden. He hasn't made an official announcement about his presidential run in 2028, nor do I think he's going to make an announcement here, but he's been talking a lot about where the country needs to go in a post-Trump world, specifically in 2028. Friedberg and I are going to ask Rahm about the most important topics facing America today: the economy, inflation, employment, surging national debt, never-ending wars, the rise of socialism—

Mm-hmm.

—and, sadly, antisemitism, immigration—skilled and legal—and how his positions have evolved over 4 decades of service to America. Welcome to the All-In interview, Rahm Emanuel. Welcome, Rahm.

I'm here, yeah.

Okay, there you go.

I didn't know that was the cue. I was waiting for... It felt like an obituary.

I was waiting for the rabbi to get up.

I'm going all in.

That introduction is the only one that ever starts with Clinton. Usually, they start with my career in Congress, so I give you a lot of kudos for remembering that I started as senior advisor to President Clinton.

1. Clinton And Obama Lessons

Well, let's start with that. What did you learn under Clinton and Obama? These two are what I would say are the last two sane presidents we seem to have had—moderates, in my mind. I'm a moderate, slightly left-leaning. But these seem to have been two great presidential runs that you were involved in. What did you learn from each of those individuals?

They have different skill sets. They had an outlook of the world, an outlook of the United States in the world, and an outlook of a progressive, affirmative view of government. Most importantly, you can't have progressive policies if people think that the government can't organize a one-car parade. It's not possible. They have to have an affirmative view.

The last time you had a net positive was under Bill Clinton. The balanced budget obviously helped, but it actually shifts when he signs welfare reform, and you can go back and look at the data.

To their skill sets, Bill Clinton was a unique person who, in my view, was able to integrate, in 3-dimensional chess, policy, politics, and press. He understood the presidency in a way that Teddy Roosevelt had redefined it. He was redefining it for the 21st century, and he really meant what he said about being a bridge there.

Nobody was better, not just at giving a speech, but at taking a policy and being able to communicate it—to carry people from where they were to change, make change nonthreatening, and then achieve the objectives you wanted.

President Obama, in my view, coming toward the end—not the end, but toward the end—of the Iraq War understood that this was a different presidency. At both the end of the Iraq War and the financial meltdown, we were at a pivotal and transitional moment for America.

Every president gets judged: What's the world you inherited? What is the world you leave behind? Sometimes the harshest critics of both Obama and Clinton come from the left, not the right. I said, “Is it the peace or the prosperity you don't like most? Because I'll address it.”

Was it the fact that, post-Reagan, Clinton's economy grew the most, jobs grew the most, and income disparity shrank the most? People were calling it the unipolar world, where no country—economically, politically, or militarily—had the power the United States had. Now, we can get back to what happened there.

In the same way, the left criticizes Obama for being tepid. He inherits a country that's near a depression, known as the Great Recession, but it was actually getting close to a depression. He saves it from that, transitions from losing 800,000 jobs to creating 200,000 jobs, and gets America out of 2 wars.

He continues, obviously, the War on Terror, but repositions America in the world to be a force for good. I learned how—there's no to-do kit in the drawer of the Resolute desk—but about the merging of policy, politics, and communications.

2. America Exports Dysfunction

Did Obama export American democracy as a point of primary policy? Did that lead to this world that we find ourselves in today, where there's this pullback because a lot of what gets exported ends up being one side of the political spectrum, not the other? Now we're seeing this—what did we do?

I made this point a long time ago. I said it recently at an Aspen security conference, so I'm now writing my next op-ed for the Journal as a curtain-raiser to the summit between Xi and Trump.

Mm-hmm.

I'm labeling it “The Summit of Disruption.” China's largest export is not autos or electronics. It's the domestic economic dysfunction of China. They're crushing everybody else's manufacturing base and industrial base across the world. They have more WTO cases than any other country, and all of them combined are against China: Chile's steel plant, Indonesia's garment plant, Brazil's 4 blast furnaces.

We are exporting our domestic political and cultural dysfunction. The 2 superpowers are holding the world hostage, one through economic dysfunction and the other through domestic dysfunction. Xi refuses to deal with the real estate bubble popping, a consumer that's flat on its back, and an industrial base that makes no rational sense.

Literally, as an example, China's auto industry is now exporting more cars while its profits are down 20%.

Right.

Through Trump, you can look at what he's doing in Brazil: 9 days before the German election, meeting with the neo-Nazi party, the AfD. There were racial tensions in Great Britain. We seem to want to exacerbate them.

We are literally exporting both political and cultural dysfunction at home onto the world. I happen to think this president stylistically likes to punch down and kiss up to Putin and Xi, but that's a stylistic point. That's what the 2 superpowers are doing: They don't seem to have managed their internal problems, and now they're exporting them onto the rest of the world as a dumping ground for their domestic problems.

Coming back from Japan, I happen to think that rather than have tariffs, we should have an economic bloc so all of us together can withstand China and actually organize not only that economic bloc, but then kind of other players in the marketplace. That's how you win friends and influence enemies.

Yeah. Is that a different view than the Obama-era notion that we should be exporting American culture—American democracy, I think was the framing—and that then opened the floodgates to exporting our culture wars? Our culture wars became this kind of battleground—

I don't agree.

—where there's—

Right.

—transgender theater in Africa and things like that. Right? I mean, all of this stuff.

No, I don't think that's what opened the door. Look, David, the United States of America, like every country, has 4 tools in its national security toolbox. 1 is military power, 2 is political persuasion, 3 is economic statecraft, and 4 is cultural attraction.

America's culture writ large, not just Hollywood—the American brand—is a cultural attraction, or was. I actually think this president has hurt the American brand.

Our economic statecraft—our market, our technology, our universities and research, our national labs—that is a piece of our economic statecraft and a piece of our national security. You know, there was a great story the other day by David Gram, but only the United States can get Russia and Ukraine around the table. There is no other world power. Our political persuasion to do that is an asset in our national security toolbox.

If you wanted to achieve the 23-state solution, as I laid out in my speech in the Middle East, in Israel, China, Russia, or Europe cannot do that. Only we can do that.

We have massive political and military power. I happen to think our military is not prepared for the future. That's on both parties. I was also present at one of them.

I think we got so enamored with the War on Terror that we lost sight of the transformation happening on the battlefields and in the technologies. You could see that in the drone era, as an example. Neither Iran nor Ukraine has a navy, and they both control waterways near their fronts. That tells you everything you need to know: You're not fighting 2 wars; you're fighting 2 different types of wars, and we've got to get ready for that.

To me, this also is a slight sickness of all you guys in the media, which is: Where do we point the blame? I don't think Obama, representing our cultural attractions around the globe—

I do think America being popular around the globe is a political asset that you then use. Now that America’s brand under Trump is in the toilet, that actually hurts America, its political power, its economic statecraft, and its military capabilities. Simple.

I don’t say, “I don’t think that we were exporting those cultural things, and therefore that’s where this problem came.” That’s not how I see the point of origin or what has happened here.

Fair enough. Can I just ask one thing on China?

Sure.

It’s your podcast. You can ask whatever you want. It’s whether I answer it.

Well, I’m just here for Jason, at his pleasure.

You’re doing fine, sweetie. Keep going.

Yeah, that’s true for both of us.

Okay. Well, thanks.

Jason’s going to have me back. Okay. As I look at China, historically it’s been about this manufacturing base, this energy production capacity, right? I often reference that they’re on their way to 8 terawatts of electricity production. We’re hovering around 1, finding it very hard to get to 2 by 2040.

So China’s got this massive amount of energy that they can use to power and electrify things. They’ve got 20 times the manufacturing square footage of the U.S., and much of it is automated. But now, with AI and open-sourcing AI, not only is China dampening the capacity to compete in manufacturing—making molecules, making pharmaceuticals, making materials—but now we’re seeing them effectively eliminate the capacity to compete in knowledge services and IP.

And this has really been the heart of the U.S. economy, at least for the last 30 years, probably going back even further. But as we shifted to a more global trade-oriented economy and allowed manufacturing to move to China and elsewhere, we focused on this knowledge and services base.

Do you think that we have a response against China today, given how we’re positioned economically and what’s going on with AI? This is the thing I worry a lot about in this China-U.S. conflict: We’re all still looking at the last 30 years as opposed to thinking about what the next 20 years look like in a world of AI commoditization of all the things that the American economy has been powered by.

First, let’s step back. The way I see it is, Xi comes to power, and we buy into this win-win stuff that he’s selling. It was never win-win. China wants everybody dependent on China and wants to be independent of you. That is their theory of the case.

“Our markets are going to be so big and important, you can’t do anything about it. You’re going to be dependent—your economy—on our markets. We’re going to leverage that to then destroy, manipulate, and control your sovereignty, and we’ll be independent of you. We don’t need your market.”

If you give us barley, we’re going to have 5 other people give us barley. Look at the soybean case in the United States. We’ll cut off your soybeans; we have Brazil and Argentina soybeans. So they have duplicity in the system. They have maximum latitude with minimum risk for us or anybody else.

Second, I take a lesson out of COVID, and I think this is illustrative of their plan and how we have to get smart. We have to learn from our mistakes. You can’t ignore them. You should look.

I’m going to get back to your software piece, but in COVID, Xi notices Operation Warp Speed: Within 12 months, the United States develops a vaccine that has 90-plus percent efficacy. China takes 18 or 19 months, and its efficacy is in the 60% range. We know for a fact that a lot of Chinese leaders were not taking the Chinese vaccine, but they would quietly end up taking Pfizer, Moderna, et cetera.

And they couldn’t export this vaccine. Nobody in the Third World wanted it. That’s a huge opportunity for America. We squandered it on the political side, the economic side, and the cultural side: winning, quote-unquote, the Global South.

Second, Xi makes a decision that this will never happen again and massively invests in life sciences. Within 5 years, China is not just nipping at our heels; it’s pari passu with the United States in life sciences, a place that the United States, outside of 1 or 2 examples in Europe, dominated.

Now, again, I’m going to take a shot at Trump. Every budget, he’s proposed a 40% cut to the NIH. Every budget. And the Republicans face off and allow a 15% cut. You’re not going to cut the NIH on your way to American leadership.

There’s a pancreatic drug on the market. It came from NIH funding, and it’s actually now looking like it will address 3 or 4 other cancers. The NIH, the National Science Foundation, DARPA, America’s national labs, and our national universities are our crown jewels. And what are we doing? We have an administration declaring war and actually involved in unilateral disarmament.

Now, software and AI and manufacturing: We are dominant in software and in those tech spaces. We shouldn’t think it’s either software or manufacturing. It’s both. We allowed one to atrophy. Everybody, we allowed the commercialization of our national security.

The Business Roundtable and the Chamber of Commerce way over-influenced our national security vis-à-vis China when we saw industry by industry, supply chain by supply chain, move offshore, and America’s economy kept getting more vulnerable. And that’s on everybody. Everybody.

The other piece of it is, what do we need to do? What’s the next 20 years? One, aggregate Australia, Japan, South Korea, Taiwan, the EU, and friends in Latin America, and get more friends. Don’t declare war on Brazil. It’s a big economy in the region. Make it an economic bloc, because standing together makes China isolated. Isolate the isolator.

Then use that time as a bloc—not through our unilateral actions, but as an economic bloc where we’re the dominant player—to organize our research and our capacity to then build up.

Now, take the defense industry as an example. The United States is again flat-footed, but don’t underestimate the United States: new technology, entrepreneurs, venture capital, the DARPA research arm, and the United States’ ability to deploy. You give us 5 years, and the capacity of that incredible system will produce, as long as we don’t let Lockheed, Raytheon, and General Dynamics kill it, and the Pentagon nurture it.

But we have to use the time of an economic bloc to stand up what we have allowed to atrophy, then organize that bloc to confront China. China, North Korea, Iran, and Russia—we isolate them. Right now, I’ve got to be honest, the president has isolated America and increased America’s vulnerability. So that’s how I look at the next 20 years.

Yeah. And where do the Middle East nations fit into that equation? Are they part of the bloc?

Sure. David, I would say this: There are 3 trends going on in the Middle East. Step back from the news of the Strait of Hormuz. There are 3 or 4 trends that we then aggregate, and one of the reasons I laid out what I laid out in Israel was as a way to isolate Iran. It would be a good day for Israel’s security, a good day for America’s leadership, and a good day for American allies in the Middle East.

The UAE, Bahrain, and Kuwait are staying with the United States. Saudi Arabia, Egypt, and Jordan are in that first list. Saudi Arabia, Egypt, Pakistan, Turkey, and Qatar look like they’re hedging. They know they’re reliant on America, but they’re not going to be so dependent that they’re vulnerable because of the lack of leadership in two wars, Iran and Iraq. That’s one trend.

And one of the reasons I mentioned the India-Middle East-Europe Economic Corridor is that it keeps everybody coming closer to the United States economically and also politically on the 23 states.

Second, Iran invested 40 years and $40 billion-plus in what Israel described as the octopus—the proxies. Hamas is degraded to defeat. I thought there was a very good article in Foreign Affairs on this point. Hezbollah is cornered. Damascus in Syria has been lost. And the Iraqi president seems to be making pretty good headway—not all the way there—on dealing with the militia.

That strategy of the proxies is so different. As an example, you have the Lebanese government working with Israel on cornering Hezbollah and degrading it. Syria, with a non-Assad president, is now talking to Israel about a security agreement. That would mean Jordan peace, Egypt peace, and a Syria security agreement. The 3 forces in the Six-Day War all came to some resolution with Israel as a fact. Massively different. Strategically different.

And Syria will be the outlet for a pipeline from Basra to its port for energy around the Strait of Hormuz. These are big opportunities. So when I say—and then you obviously know about semiconductor chips and other pieces of the economic piece—yes, major players in the Gulf would be part of that economic bloc.

3. The Taiwan Deterrence Test

Let’s, before we leave China, talk a little bit about Taiwan. Obviously, the Trump administration has been talking about 2027 or 2029—China plans on invading Taiwan, seizing the fabs, et cetera. You worked under multiple administrations where strategic ambiguity was the process for dealing with Taiwan.

One China policy.

Yeah. We support Taiwan and China and just keep it super ambiguous. The next president’s probably going to have to deal with this.

Actually, let me say this.

Yeah.

We keep the politics ambiguous, but as it relates to using kinetic force to change the status quo, we’re not ambiguous.

Yeah, unpack it.

There are 2 different parts to the Taiwan One China policy. That’s a political statement. Then there’s the position that nobody changes the status quo through the use of force. Those are 2 things.

Just to prove that somebody knows something about the Taiwan Relations Act—

Yeah.

—as well as policy.

Is your thinking that China will, at some point, blockade Taiwan? And how would the next president, or how should the next president, deal with that circumstance? Should we be airlifting all the equipment and people out of Taiwan?

Yeah.

Or should we be engaging in a blockade? This is, I think, the escalation that maybe isn’t getting enough attention. Then we’ll go back to the Iran war.

Right. Well, Jason, let me start here, which is the consequence of the Iran war. China’s watching the United States bogged down in the Strait of Hormuz, with resources allocated. Its confrontation with the Philippines has picked up dramatically. Its economic, military, and political pressure on Japan is much more aggressive. They’re doing things around the Senkaku Islands that are much more aggressive. They fired a live missile from a submarine in and around Australia.

Those are just some of the things. I could go on to Vietnam, what they’ve done, and other things in the Philippines, which is the most dramatic in the South China Sea. China is now sending a message to all our allies—South Korea, Japan, India, Australia, New Zealand, Singapore, the Philippines, and even Vietnam: “Look, your protector? No more.”

The damage caused by this administration moving not only resources there, but also attention and political focus, is clear. The 1 thing I know you guys didn’t ask—but it’s not that you didn’t ask—is that when there’s a war, the White House becomes a 1-ball juggler, okay? This White House is consumed with what’s going on, and it has lost focus on the Indo-Pacific. It’s quite evident. China has picked up its aggression.

Our long pole in the Indo-Pacific is Japan. Japan is under economic pressure, political pressure, and military pressure. Yes, we have just come to the defense of the yen, but we haven’t done anything in and around the Senkaku Islands. We haven’t done anything as it relates to the economic coercion China is involved in or the political battering.

So if China moves in, what do we do?

So, hold on. You say 2027. I’m looking at it today and saying, “You don’t get to wait. It’s happening now.”

Second, I happen to think the South China Sea—everybody talks about Taiwan, and I’ll get to that. When you look at the Philippines, Vietnam, Malaysia, and China’s behavior and the islands they’re creating again out of the shoal, out of Scarborough Shoal, et cetera, they aren’t waiting to try to say that the South China Sea, in which they lost the court case in 2016, is their backwater.

The Philippines is not Taiwan. It’s a country, it’s a treaty ally, and it won a 2016 case. If we don’t stand up there, the jig is up.

So it sounds like—

Excuse me, the jig is up. Number two.

Sounds like you think we should be projecting some force there or putting some troops there, some ships there with our allies, and we have to rebuild those bridges that we burned.

Jason, we already have troops there, and we already have resources. We need to double them up and give the Philippines confidence, especially given that President Marcos is taking massive risks.

Second, in Taiwan, there are 3 strategies. 1 idea is a quarantine, 2 is invasion, and 3, off mainland China’s coast, are 3 islands associated with Taiwan. They got a rock, a butterfly, and a tree, and a fisherman. That’s it.

The 3 strategies are, 1, an economic quarantine that just suffocates Taiwan; 2, an invasion that tries to end this in 96 hours; and 3, taking over those 3 islands and looking at the world and saying, “You’re going to start a war over this?” Then they use their incremental strategy. If you look at China and its history, it has done all 3 of those historically with different countries. We have to be prepared for all 3.

1, they want a 96-hour war, not a Ukraine example. We have to say, “No, this is going to be 96 days,” and have the resources and the capacity to say, “This isn’t going to be 1 and done, quick.” 2, as it relates to quarantine, we have to be able to show, through our resources—which is why, with the Philippines and the Okinawa Islands, a quarantine can’t work—by air, naval, or otherwise. You can’t pull it off.

And then, third, with the little islands off China, we have to project force there, as we have before. Remember, there’s a security piece and there’s a deterrence piece, and we need to be prepared. Our deterrence piece is very weakened right now.

I want to get your opinion also on Japan remilitarizing, since you spent some time there, and its role in this, because that seems to be an ally that’s critically important, as well as South Korea. Let’s go to Iran right after we sum up what’s happening with those 2 allies and, in your estimation, how we should be courting them. Obviously, we just backstop the yen, and we have a pretty solid relationship with Japan.

Look, Japan is the long pole of America’s Indo-Pacific policy. You look at the Quad: India, Australia, Japan, and the United States. You look at the 2 trilaterals that I worked on: Korea, Japan, and the United States; and the United States, Japan, and the Philippines. The 1 constant is Japan with the United States.

Our largest military footprint in the world in a single country is in Okinawa, Japan. Europe is the biggest by continent, but Japan is the only place in the world where there is an aircraft carrier permanently based.

For the last 5 years in a row, Japan has been the number 1 direct foreign investor in the United States. For the last 5 years in a row, the United States has been the number 1 direct foreign investor in Japan. So, from an economic standpoint, you could call it soft power, or what’s called cultural attraction. You can look at what Japan has done with baseball in the United States, the 2 countries sharing a cultural attraction.

I’ll just go through it. Japan now, because the prime minister had the audacity to say publicly what we have tried for 30 years to get a Japanese prime minister to say publicly—that a move on Taiwan would be a national security threat. She says it, and China goes crazy because she said publicly what Xi never wanted announced. For domestic reasons, they’re now under economic coercion, political coercion, and military intimidation.

You have to get there to be— And it’s not just— I’m happy the administration has decided to support the yen in an intervention. I think there’s a lot of self-interest as it relates to our Treasuries and our dollars, and the pressure on our Treasuries right now because of the amount of debt we have. But we have to do more in terms of military training, especially when Russia and China are doing exercises around the Senkaku Islands, where we’re just not present.

Can we go over to Europe for a minute before we talk about—

Do whatever you want. This is your show. Do whatever you want.

4. Europe's Immigration Backlash

Yeah, domestic issues. I do want to talk about domestic issues, particularly the economy and government spending’s interaction with the economy. But before we do, there’s an argument that Europe is in this kind of state of irreversible decay. Many have indicated points that I think are counter to your characterization of the AfD party in Germany as a neo-Nazi party, that the party is really a response to an open-border policy in Europe—an open immigration policy that many would say has really drained resources and diluted culture, right?

David, first, let me say 1 thing.

Yeah, please.

The German intelligence agency has the AfD under watch. Forget whether I characterize it as a neo-Nazi party and you don’t want to buy it.

Well, U.S. intelligence also had Donald Trump under watch, right?

Yeah. No, but okay.

There are a lot of ways we could paint that.

Yeah.

But, yeah.

Yeah, a lot of ways. You want to go?

No, I’m not trying to be supportive of the party. I’m trying to indicate that there’s a reaction to something going on in Europe.

Oh, look.

Yeah.

There’s no doubt about that. Both on the cultural and economic sides, there’s a reaction in Europe, like there is here in the United States.

And so what’s your view on where Europe is, how immigration played a role, and where things are going in Europe?

Look, I think immigration played a role in the same way that I think economic stagnation played a role. And this is also somewhat as we transition closer to home, before we keep pushing Iran off. We’ll do that. But look, you look at what has happened to incomes, where here in this country we have a greater share now of Americans living paycheck to paycheck. That has—

Yeah, almost 2/3. I think it’s 63% of Americans who are in that situation.

Yeah, and so that has changed our politics, and it’s changed our cultural landscape.

So do I think immigration plays a role? 100% it does play a role. I also think stagnating incomes, when there's greater concentration—not just of wealth, but greater concentration where the political system is skewed toward that wealth—all of that gets mixed into the stew. There isn't a separate soup dish for immigration, separate from the dish on incomes, economic growth, GDP, et cetera.

Europe—here's my thing. I think the former Italian prime minister Draghi wrote a good plan for the EU. It is in our interest for strong, robust European-based economies to be technologically and otherwise contributors to the Western system. If I'm right about a bloc, you don't want hangers-on. You want people that are actually rolling. And so I happen to believe Europe is important for America's security, important for our economic prosperity, most importantly, and we want them to be competitive. I do think they have participated in their own kind of suffocation.

Just on this point, Rahm, because this idea that Europe is committing suicide has kind of taken form in the political narrative that's being spun, right?

Do you disagree with that?

I think Europe has made policy decisions that are not in the best interest of the citizens of Europe.

Okay. Well, okay.

I mean—

You said suffocation.

No, yeah.

Other people say suicide.

Yeah, yeah, yeah.

Okay. Well, what’s it?

No, no, no. I get it. I get it.

There’s no difference.

But, but what is, what—

You said, “Give the answer.” The short answer is yes, you agree.

Well, so, so yeah, so let me ask. The policies are arguably leftist policies. They're policies that come from the left. The energy policy that gutted Germany's nuclear power production and made it dependent on Russian energy was an insane set of policy decisions. The idea that you will provide public services and public welfare programs while opening the borders to increase the population for nonproductive people to come in and then drain those resources, and then there's all the cultural dilution stuff.

Well—

But the idea that AfD and other parties in Europe are arising out of—

Yeah, but here—

Yeah.

Here's—

So you're saying open borders, Friedberg, are a leftist policy. For the last 40 years, that's been a Republican policy: to let as many people into the country as possible—

Hey, but wait a second.

—to get cheap labor.

Wait a second.

Yeah. Fair enough.

Is the party affiliation of Angela Merkel a mystery to you, David?

Right.

Oh, no, wait a second. You made this broad-brush attack about the left. Angela Merkel came out of the Christian Democratic Union, the conservatives.

Right.

2. It was her decision to cut the—wait, no, wait a second. You're making a point that is—I'm sorry—historically wrong. This will be the last time I'm on your show.

That's fair enough.

Okay.

You're welcome to tell me I'm wrong.

No, I'm—well, good. Put on your seatbelt. I'm enjoying this right now.

Okay.

It's like therapy.

Okay. Let's go.

She's from the CDU—

Yeah.

—and when 1,000,000 people came out of Syria, she said, “We can handle this.” That's from the Christian Democratic Union, the conservative element, Kohl's party. Number 2, after the nuclear facility in Japan had its meltdown, she shuts down the nuclear facilities and makes Germany much more dependent on Russian energy, and we were the ones that warned against it. So don't tell me this is from the left. You're wrong.

There was a lot of anti-nuclear rhetoric coming for a long time.

Okay. No, yeah, exactly.

Just to be clear.

But who was the chancellor that said, “Shut it down”?

Yeah.

Who?

No, who?

Merkel, yes.

What party is she from?

The Christian Democratic Union.

What part of the political landscape—left, center, or right?

I would—well, nowadays I would say far right, but yeah.

Oh, no, you're just—no, this is crap you're selling.

It's how you would probably want to characterize it, but I think the argument—

No.

Yeah. No.

Your basic argument—now that I've decided to score my Emanuel points on you, let me back up—is where is the party—

And immigration. And immigration, I think.

Yeah, she did. She opened the borders when she should've been a more thoughtful person. Look, the one thing we know—I'm going to speak at home about immigration—people don't like disorder. They don't like it on the border, and they don't like it on the streets of Minneapolis. Europe responded to the disorder, whether that's in Stockholm or whether that's in Berlin. It seemed way out of control.

Europe is a very welcoming continent, but it looked totally out of control, as you saw just this weekend vis-à-vis Morocco. That's not a surprise, but to say that this is leftist is just not accurate. Brussels, on the economic front, while they were trying to regulate, suffocated innovation, entrepreneurship, and competitiveness, and they're trying to correct that now.

Where I find fault with us, through the Trump administration, is that we are exacerbating their tensions when they're trying to deal with it. Germany today is losing—I read a story, and I've got to remember the number right—I think it's 5,000 to 10,000 manufacturing jobs a month to Chinese pressure. That should be an opportunity for us to come in and say, “Let's work together and confront China, not independently, but together.” We're not doing that. Our vice president, 9 days before the election, is meeting with the AfD. When there are race problems in Great Britain, we're exacerbating them. When Meloni is dealing with some stuff domestically, we attack her.

What's the political calculus there, Rahm?

Why does Trump do that?

Look, I think this is—

What's the strategy on his part, if there is any?

Jason, I have said this before, and I'm going to repeat it. This president punches down and kisses up. He has this fixation about Putin and Xi admiring him as an equal, and they think he's a joke. They think he is not their equal. America is their superior, but he is not their equal.

He then takes a Lula in Brazil, a Merz in Germany, or a Meloni, a Carney, or a Sheinbaum, and he punches down because he thinks, if you're a middle power, “I'm going to show how big and bad I am.” He is nothing but a bully, and nobody's buying it anymore. Everybody is looking at the emperor wearing no clothes.

Which, I guess, would be a great point for us to wrap up.

There's no strategy to this.

Yeah.

This is all his insecurities.

He's just winging it. Okay, so let's do Iran and then go to the United States, unless there's—

I know. I was feeling good beating up David there for a second.

This is why we're here. We work for you.

I will tell you, if you showed me Angela Merkel's decisions on a blank sheet of paper, I would say that's a leftist program.

No, but you, here—

That's pointing out—

Here's what I would say.

I would say that across Europe, there has been almost this—

Yeah.

I don't know how to describe it, and what I'm trying to understand is also the psychology versus the foreign influence on these suicidal policy decisions—

Right. Okay.

—that seem to be wrapped up in what are prescribed leftist notions that end up becoming policy actions at scale, and maybe the different parties are different. And specifically, you're talking about immigration, so let's just go right at immigration then.

Economic decisions, energy decisions—

Yeah, but immigration seems to be the core of it.

Immigration decisions. And here's the—

So let's talk about immigration, Rahm.

Defense decisions.

5. Rahm's Immigration Compromise

Okay, Rahm, let's just tackle one thing at a time. Immigration is a critically important one. I think we've gone from too hot to too cold. Americans didn't like an open border, as you pointed out—chaos. They also hate the chaos, just according to surveys, of ICE dragging people out of their homes and taking people who are picking strawberries and basically beating the shit out of Americans.

In some cases, I guess we've had 4 deaths, and they'll be adjudicated over time. But I want to know what your solution is to immigration. We had President Trump on this podcast. He promised we'd put a green card on every diploma of every immigrant coming here, and then they reneged on that. They've been trying to essentially kick out some of these best and brightest we've brought here, which has a negative impact on our ability to build great companies in Silicon Valley, et cetera.

Almost all the great entrepreneurs we have are either immigrants or sons of immigrants, like my friend David Friedberg here. So tell us, what is Rahm Emanuel's plan for immigration after this hot-and-cold stretch we've had? Is there a Goldilocks zone?

Yeah. Well, I'm, bizarrely, the last optimist who thinks you can actually get a deal legislatively. I start with 2 principles: we're a nation of laws and a nation of immigrants, and whatever we do on legal and illegal immigration has to be true to both. Nobody likes people breaking the laws and getting a pass, and I'm included.

You're looking at the guy for President Clinton who designed Operation Gatekeeper in San Diego and Operation Safeguard in Nogales, Arizona, and did this stuff in El Paso. My view is tough borders, tough enforcement, and also resources at the workplace. There's a thing called the Dignity Act. It has 23 Republicans and 23 Democrats in the House.

It's true to being a nation of laws and a nation of immigrants. Is it the bill that Jason would write? No. Is it a bill that Rahm Emanuel would write? No. But does it achieve the goal? Yeah. So everybody else is hiding, using rhetoric. I endorsed it.

Now, if you were doing politics, I think in order to run for president, you would stay away from this and use just pablum. But to me, we've got to get this problem behind us so we have a future in front of us. You have 23 Republicans who signed on to certain things around legal immigration and certain things around illegal immigration. Does it tilt from the first time, when the Democrats were in the majority, a little more to the Republican side? Yeah. They're now the majority. Now, could you tilt it back to the original? Yeah.

And you need leadership out of the White House, not just coming on this show with President Trump speaking pablum and never really following through, like he did on Dreamers, like he did on a green card on every diploma. Legal immigration—getting the best and the brightest, going back to our China example, all these people who are leading China's life sciences came out of the United States, trained and worked in our life sciences. We kicked them out like fools.

Okay? So to me, pass the Dignity Act. Don't mess with it. And again, I want to be clear: it is not the bill I would write if I was sitting down at my keyboard. Does it accomplish the goal I set out? Is it a true compromise? Yes. Do we finally do what we have to do at the border? Correct. Does it finally do what we have to do to attract the best and the brightest? Yes. And that, to me, would stop the Civil War.

What about a points-based system? It seems like all the great, high-functioning immigration countries in the world have a points-based system. Even Japan—I just learned on my last trip a couple of weeks ago—they're going to require you to speak the language fluently to get those jobs. There are so many people who want to go to their great nation. They've kept it pretty tight, and they force people to assimilate. What are your views on assimilation, speaking the language, and points-based systems? Any lessons there from Japan?

Yeah.

No, because I mean, even in the Trump administration, we're taking equity stakes in companies, which is not a typical free-market conservative view.

Well, look.

Any lessons there from Japan?

There are lessons. Now remember, because you're touching something that's also both legal, et cetera, but is also historic and cultural, I don't think Japan is a perfect analogy, given that it's an island.

If you're looking for something analogous, the 2 countries I would say that we have a lot to learn from and emulate are Canada, which has somewhat of a point system—a variation with a Canadian signature on it—and Denmark. Japan has a 98% homogeneous society, only like 3.7 billion immigrants, and they think they have an immigration problem. If you look at the United States on a demographic and quantitative level, it's totally different.

I look at the Canadian system and how Canada, because of our system or our dysfunction, is now attracting the talent that used to come to America to study. I actually think the Canadian model and the Danish model are closer to where we get the best practices and lessons learned. The Dignity Act does some of that.

Now, I'll give you an example. This is not about immigration, but it's something I spoke about when it came to affordability for higher education. I would let universities and colleges across the United States set a goal: you can go up to 20% foreign students. Today, some of them are at 6%, and some are more. I don't care how you divide it between your graduate and undergraduate students. That's up to you.

But those students pay full freight; they pay full price. It would subsidize our ability to get American students a 3-year B.A. rather than a 4-year degree, saving Mom and Dad a year's worth of tuition, because the foreign students pay full boat and they want the American brand.

Given that they came here to study, they would more likely want to stay and then start building this country economically, as you said, from the technology and other types of companies across the United States. A lot of immigrants and children of immigrants came because of the university system, and that is a political power, persuasion, and capacity the United States has underinvested in.

The short answer is Canada and Denmark are the better examples. The Dignity Act—I don't want to sit here and go through the bill with you and rip it apart—but, A, it does that. B, I want to be very clear: if you control the border, you send a signal that people who break the law don't get rewarded.

I'm so angry at my party not only losing control of the border, but in the 2020 debate raising your hand and saying, "I'm going to give healthcare to people who cross illegally." Forget the immigration policy; consider the value system. You have American families suffocating under healthcare costs. Not everybody is universally covered, but maybe we're significantly well on our way there, and you're talking about free healthcare for having crossed the border illegally? At every level, that was foolish of the party.

Friedberg, you're up.

Can you, Jason, start referring to him as David, okay?

Okay.

A little more comedy.

We have 2 Davids on the program. We have a Sacks and a Friedberg.

So I'm used to your last name.

That's not your problem. I just think "Friedberg" is so insensitive to— and we've clearly proved that David has a lot of sensitivity on this show.

Yeah, I am very sensitive.

Can confirm.

I always tell people I'm probably the last person to ever get offended by anything, but Jason always offends me off the bat.

Yeah.

So, Rahm, I will start with a framing, and it's a contention I'd like you to disagree with.

I disagree.

Yeah. This is debate club. So no matter what I say, you are to disagree, okay?

And let's establish a fact: Angela Merkel came out of the CDU.

I would establish a fact that I consider Angela Merkel a leftist, but we'll leave that.

We'll leave that.

I think it speaks to what defines each of these parties. You were part of a party that, in its peak moderate era, wanted to balance the budget, wanted the border to be controlled, and wanted globalism. Now that seems to be half Trump. It's hard to define these parties anymore, especially with socialism.

That's why I think categories like saying these are leftist policies are all wasted and broken. But go ahead, David.

Yeah.

No, because I mean, even in the Trump administration, we're taking equity stakes in companies, which is not a typical free-market conservative view. But let me just frame this up.

6. Government And Rising Costs

I would argue that over the last 30 years, when the government spends more to try to make things more accessible to American citizens, the cost of those things goes up in a disproportionate way. The average rate of inflation in the last 30 years has been 2.5%, but housing has gone up by at least 5% a year on average, compounding. Education is over 6%. Healthcare is 5.5%.

All 3 of these are categories where the federal government has launched programs to either subsidize or make these services available to people through promises: you're all going to have a home, you're all going to have education, you're all going to have healthcare. The more that the government provides—$300 billion a year in housing support, $200 billion a year in education, over $1 trillion, almost $2 trillion, in healthcare—the more expensive things get.

So is it really the role of the government to provide these services, or should it get the F out of the way and let the market work? Because in all the places where the government hasn't launched services, hasn't provided support, and hasn't provided loans—technology, energy, food, and consumer services—we've seen a net decrease in total cost. Deflation actually works when you let markets work. But when the government comes in and tries to rally markets to provide more to more people, things simply get more expensive.

Okay.

Tell me why I'm wrong.

So you're wrong. First of all, the GI Bill was a government initiative that led to a massive increase in housing and homeownership in America. Would you have recommended, after World War II, for those who served overseas, no GI Bill because the market would take care of their housing needs? It also had an education component.

Second, when you said food costs went down and the government wasn't involved, what do you consider the agricultural bill that subsidized growing food in the United States for Big Ag?

Well, I know that bill very well.

I don't know.

But we can debate that bill if you'd like.

Okay. No, no.

Yeah. Yeah.

Second, you say we're not involved in energy. We have a tax write-off for drilling. We're involved in energy. That's just not true.

You could make that case about everything, Rahm. You could say we touch everything.

Well, that's—

But our total dollar spend—our total dollar spend—is what I'm talking about.

That's why your analogies are wrong. And B, right now, I happen to think that the United States government has a role, and there's a balance between both the private sector and the public sector. This balance is trying to ensure that, when the forces and concentration of both power and wealth get too much, you—

I've just opened up the Teddy Roosevelt Library, et cetera. That was a redefinition of what the government does to come to the aid of those who are most vulnerable—not just vulnerable, but vulnerable to the concentration of power.

Now, in housing, that is where the government has messed up. This is not at the national level but at the local level. When you get things like San Francisco and New York, you have a concentration of demand and an economy that's doing well, but restrictive laws as they relate to zoning, building, and permitting drive up costs. They're not the only reason, but they're a significantly contributing factor.

I'm not mayor today, but if I were mayor of Chicago, I would say, "Okay, I'm going to put all our zoning laws, all our building laws, and all our permitting and planning laws up against Dallas, Houston, and Phoenix. You tell me what we have and why they don't have it, and why we have it and they don't have it. If you can't justify it, get it the hell out of here."

I would also do things because I think the biggest problem we have in housing is first-time homeownership. That's a post-2008 financial meltdown issue. For whatever reason, the market has gone to the high end and the low end, and first-time homeownership is where we are stuck in terms of new construction. I actually do think that's a place where both the public and private sectors together need to address a problem that has now been around for almost 20 years, and the private sector on its own hasn't fixed it.

I don't agree with your analogies, and I do believe there are places where the government gets in its own way, and places in which it should be targeted to incentivize the private sector to address those problems. That's where I would go in addressing that on a policy—

What about education, Rahm?

Yeah, go ahead.

Yeah, go ahead.

No, I was turning my attention there.

Okay.

Now look, I spent 8 years, every day and every hour, working to fix an education system that was broken. When I was done, Sean Reardon at Stanford called it the single-best education system of the top 100. By example, we drove our graduation rates from 56% to 83%. We drove our reading and math scores at every one of the elementary levels. I'm doing this by memory, so I could be slightly wrong, but it's in the report. We were 6 months ahead of our peers. Trust me, that is not easy to achieve.

I'm going to go to Louisiana at the end of September because it's the only state whose reading and math scores have gone up to the pre-COVID level, to find out what they're doing. I went to Mississippi for the same reason.

At the elementary level, one thing we did was create full-day kindergarten and free, full-day pre-K. I'm a very big believer in early childhood. In the elementary years, there are 3 things.

First, universal accountability—not just for teachers, but for parents, principals, and the schools. Second, reboot our teacher education and training so it's constant, not just one-and-done. Teacher training today is really flat. Give teachers the support so they know what to do in the subjects they're supposed to teach. Constantly train them. Reboot the entire teacher-training program starting in our colleges.

Third, braid the resources together so states and cities can meld them, because what happens on the South Side or West Side of Chicago, in our suburbs, or in some of our best schools, like Northside and Payton, just isn't the same. Students in poorer schools need more resources. But there has to be accountability through the system.

Fourth, nobody wants to talk about it: you've got to be at this every day. This is a 20-year project, not a 2-year project. That's what Mississippi and Louisiana showed us.

High school: fundamental reform. Elementary school: stay with the fundamentals. In high school, our goal was for 50% of our kids to graduate with college credit by high school graduation. I set a goal that, if I decided to do this, 100% of our kids would graduate high school with college credit through dual credit and dual enrollment with our local community colleges, of which there are 1,200.

We're the only school district in America to set this up, and I'm going to make it a national requirement: nobody graduates and gets a high school diploma without showing a letter of acceptance from a college, a community college, a branch of the armed forces, or a vocational school. Every child—not just Jason's, David's, and Rahm's—has a plan. They know where they're walking to when they're walking across the stage on graduation day.

Universal post-high-school education. We hired a huge number of college counselors in the city of Chicago, and we accomplished 98% compliance with it. Third, take the $8 billion you're wasting on detention centers at ICE and modernize our community college systems—the campuses, the curriculum, and the relevance they have to the industries in and around them.

Finally, higher education. Foreign students are allowed up to 20%. Second, identify 10% of the things that you pay for in complying with the federal government. You keep 100% of those dollars. Third, if a child graduates with 20 college credits from high school, that child is eligible for a 3-year BA, not a 4-year degree, saving Mom and Dad the equivalent of a full year of tuition. Oxford and Cambridge do 3-year BAs.

Second, if your income is below $200,000, you're going to go to college for free. Finally, in that area, if your income is above $200,000, tuition each year doesn't go above inflation. That's what I would do on education: get kids into universal pre-K at a minimum of 4 years old, ideally 3; return to the fundamentals; stay at it; and bring accountability and standards back into the school system.

Revamp our high school years into college and career, not just diploma-driven, with 2 or 3 examples. The best one I also did—the first and only school district, the first city to do it—was make community college free if you got a B average in high school. The goal here is to take the high school years, when you lose students, and the community colleges, and meld them so kids are graduating high school with college credit, prepared for the next step in their lives.

Eighty percent of all jobs require some education, a minimum of 2 years post-high school, and we've done nothing to revamp our high school years since Teddy Roosevelt. That's top to bottom.

Yeah. Now—

And it makes—

And no child, no student of any income or background, is left out of that. You want to go to college and then be an engineer? Great. You want to be a nurse? You want to be a carpenter?

As you pour more of these dollars into the community colleges and into the federal student loan program, the administrative staff continues to bloat. We've seen administrative staff grow from 10% to 60% in the last 30 years, as they've had no limits on spending because the federal student loan program doesn't provide a criterion that says, "If your tuition costs too much, if your school isn't that good, et cetera, et cetera, we restrict your access to this loan program."

The loan program is so unrestricted—

Yeah, but get it—

—that it provides fuel for the fire.

Okay.

For cost, that is. For cost.

Is that right? Okay.

Yeah.

I just sat there and told you what I would do. Okay, great. Now let me ask you: you haven't addressed the fact that 50% of our kids can't read at grade level.

Yes, that is—

You want to talk to me about—oh, no, no, wait a second. Wait a second, David. The way you asked that question told me where your priorities are. Your priority is, "Okay, I want to talk about the student loan program." But just—

Higher education. Higher education.

Okay, I'll—

I'm not talking about—

Oh, how do you get to higher education?

The group—well...

Well, I get that you're not talking about it, but there are a lot of parents sitting around the kitchen table talking about it.

I'm talking about costs, Rahm. Costs in higher education. That's it. That's all I'm talking about.

I just gave you a plan. Ask anybody that gets on your show: I just gave you a plan on how to control costs. None of it dealt with the student loan program. It dealt with the fact that we cut our nose off to spite our face by not letting foreign students come in and pay full price, which is squeezing our colleges. You get up to 20%; you decide how you want to do it. You can identify 10% of the savings that you apply—comply with the federal government. You keep 100% of the cost, but here's what you're going to do differently. And to get that—

But if we—

Wait, wait a second.

Yeah.

This is the answer part to the question part.

Go for it. Yeah, yeah.

Okay. You want to get to college? Revamp what goes on in not only the elementary years, but the high school years. You know when kids drop out of college, David? Third grade. That's when they start dropping out. And when you have 50% of your kids not reading at grade level, college cost is not your problem. We're going to compete against China with 50% of our kids not reading. I'm sorry, that's not how you beat a country that's 3 times your size.

Yes, we need to fix that issue. But, taking a zoom out, my concern arises from—

Kids drop out of college in third grade, David.

I'm not talking about dropping out of college. I'm talking about how much we spend on administration in colleges and how much we've allowed it to inflate, and that ultimately leads to a cost—

Yeah.

—and an accessibility problem to higher education, Rahm. Because as it gets to be $30,000, $40,000, $60,000, $80,000 a year for a kid to go to school—

Two things. You are talking about costs. That is a problem. To me, the problem is that we've given up on 50% of our kids.

Fair enough.

Given up. Okay, number two.

Yeah, that's a fair statement. I—

Hold on. What you identified is a problem. I'm identifying the problem. Number two, in my view, I have spent more time on the subject of education because I wanted to be an early childhood educator when I went to college, and I took a system that William Bennett called the single worst in America to where Sean Reardon at Stanford called it the single best of the top 100, and it took everything in my soul to get it there.

Yeah.

We need to take the high school years, let alone the standards and accountability in the elementary years, and revamp them with the 3 things I talked about that fit together. B average, community college is free. 50%, which I would set as a goal of 100%, have to graduate with college credit under their belt. And third, nobody gets a diploma that doesn't tell us what they're doing next: college, community college, a branch of the armed forces, or certification school.

I'm not just about college. We're 500,000 to 600,000 electricians short just for data centers. Broadband, 150,000. You can't build submarines because we don't have pipefitters and plumbers. Okay? You want to be a pipefitter? Great. You want to be a physician? Great. You want to be a physical therapist? Great. Have an education system that actually reflects the economy and skills that we need.

7. The Fiscal Reckoning

Yeah. Yeah, that's a good point. And my concern, Rahm, comes from a fiscal—

All right, can we end it there? Since you said it was a good—

No, no, no.

—a good point, and I get to go off.

You make a lot of great points, and you make some that I disagree with, but that's what we're all about. And as I zoom out, I mean, I look at our $7 trillion-a-year spend in the federal government, $5 trillion a year in revenue. We're $2 trillion short. We've got $40 trillion of debt, 30 years at 5%. That's $2 trillion—

Yeah.

—and a year in interest expense. We have to figure out a way to reconcile the fiscal condition of the federal government to have a future for our kids.

There's 5 things.

And so for me, everything comes down to this cost model, and I'm like—

I got it.

—where are we spending money that we're inflating costs? And it doesn't make sense to do it.

Okay.

So, we could—

I have a slate. Look.

And by the way, Rahm, this was something that Trump promised he would do with DOGE and other cuts, and he's only increasing it, obviously.

Mm-hmm.

It was all snake oil salesmen. Look, I don't accept redistribution, and I don't accept corruption. You can't have capitalism or economic freedom with corruption as a grounding principle. It's against the rule of law, which is key to capitalism and economic freedom. And redistribution doesn't solve anything as it relates to growth.

I believe in 5 things that are essential to grow the economy and grow incomes, so people are no longer living paycheck to paycheck. One, everything we just talked about on education and training from pre-K to BA. Two, the Dignity Act, as I said, as it relates to immigration. Three, modernize our energy system. Vis-à-vis Texas is the best example in the United States, and I've said that. Four, a 10% levy on all predictive markets and online sports gaming, and it has to go to the NIH, National Science Foundation, and DARPA. Double our dollars into research.

Fifth, a tax code that does not reward wealth preservation but wealth creation. This tax code is an abomination as it relates to economic freedom. Control the overall spending for the next 5 years so it can't grow, and start making some tough choices within the system. I told you, you don't support it. I would not spend $38 billion on detention centers nobody wants. I would take $8 billion of it as a starting point and modernize the 1,200 community colleges throughout the country that are the economic backbone of La Crosse, Wisconsin; Spartanburg, South Carolina; go down the list.

I've seen it firsthand because we did it in our community colleges. The World Bank called it the best college-to-career program in America. That, to me, is what we should be doing, and we're going to make some tough choices. I don't believe in sending ICE agents out with $50,000 bonuses when I'd rather give a bonus for signing up to be a carpenter or electrician. That's more important to America's future than some masked man running around the streets of Minneapolis.

What's the politics of this? How do you get Congress to come along? Because for years, we've heard a lot of points from both parties about, “We are going to rationalize spending. We are going to do the right thing. We are going to get ourselves out of the deficit. We are going to make things economically viable for the United States, so people are going to advance.”

Everyone's got great ideas, but when push comes to shove, representatives of their district or of their state end up saying—

Oh—

—“I'm going to give more to my people in order to get reelected.”

Yeah, yeah.

And the budget goes up and up and up.

David, here's the thing, which is unfortunate about American politics. As the person who coined the term, “Never allow a good crisis to go to waste,” it's the opportunity to do big things.

Look, I believe the surplus created sloppiness that Bill Clinton left. We tried to fight 2 wars with 2 tax cuts. Really stupid. Never been done in American history, and that's the beginning of a wild—

We went from a surplus that Alan Greenspan described as a real danger to America because of the 10-year Treasury note to running $38 trillion of debt. From a surplus to that, because it was reckless. We fought Iraq and Afghanistan with 2 tax cuts. Never tried in American history, and it proved to be stupid.

Now, that crisis has come due, and it's going to force some really tough things on the system. And while AI is also hovering, we cannot have a further concentration of wealth to a very few. It can't happen, because you can't get to the fiscal sensibility you want just talking about cutting—not just because of politics, because it's not right and it won't work.

So we're going to have to actually deal with the revenue side as well as the spending side. I gave you a cap, but we have a tax code that rewards everybody on this show, me included, for preserving wealth and passing it on. There was a story in the Wall Street Journal 6 weeks ago. Retreats are being organized to help kids figure out how to handle their inheritance.

You have got to be kidding me. And we have a tax code that favors that. You are the idiot if you don't take advantage of actually preserving your wealth and passing it on from one generation to another. And you all know this. We all know it. The step-up basis is a way to avoid all taxes while everybody else is working for a living and can't pay monthly bills. So it's going to hit everybody, and you're going to make some changes.

One thing I, like most capitalists, was not concerned with was the minimum wage, because I thought the free market would work that out.

Mm-hmm.

And then, after watching it rise in cities in the United States and seeing what's going on in New Zealand and the Nordic countries, all the studies now show that when you go from $12 to $20 an hour, there's no difference. It doesn't cause any economic hardship for those companies, and it doesn't cause unemployment or automation.

So, what's your take on the federal minimum wage being raised?

Three things. I worked with Bill Clinton when we raised it. When Nancy Pelosi and I helped make her Speaker, that was the last time it was raised: $7.25. When I was mayor, I raised it. I'm a big believer in raising the minimum wage. I would raise it and have it go up each year, as we did in Chicago, coupled with a very generous earned income tax credit.

That's what makes work pay. So, a minimum wage with a very robust earned income tax credit—which, if I were waving a magic wand, I would take the earned income tax credit and the per-child tax deduction and make a single-family credit—would put it all in one thing because it rewards—

I think we should talk about the DSA before we wrap.

You know, last weekend in Chicago, the DSA held a convention. You're not Democrats. You're a separate party. I'll see you in November. You're literally beating Democrats. Forget about it. I'm not interested in it.

I spent my whole life replacing George Bush with Bill Clinton, having Barack Obama compete against John McCain, flipping 31 districts from red congressmen to blue congressmen so Nancy Pelosi would be Speaker. I am not into turning a blue district midnight blue. It doesn't do anything for a minimum wage. It doesn't do anything for universal pre-K. It doesn't do anything to give 10 million children who didn't have healthcare, healthcare. So, I'm not impressed.

You are a separate party. You're the Democratic Socialists of America. I'll see you in November on the ballot. You had a party convention. You are not a Democrat. And there was a person the other day in Tom Edsall's column, a Justice Democrat who is part of the DSA network, who said they're not interested in beating Republicans. Well, now I appreciate the honesty.

I am. I think Donald Trump is an existential crisis. You think Barack Obama, Nancy Pelosi, or Hakeem Jeffries are an existential crisis. I don't. We have a fundamental strategic difference, a fundamental policy difference, and this fundamental political difference. Go to your own party. Stay there. I'll see you in November.

There you have it, folks. Over an hour with Rahm Emanuel. We will have you back in the coming months and years.

I don't think David will.

This has been amazing, and we gotta get you on with Chamath and Sacks next. Thank you so much, Rahm.

Okay. Thanks, guys.

All right, besties. I think that was another epic discussion. People love the interviews.

I could hear him talk for hours.

Absolutely.

He crushed your questions. Admit it.

We are giving people ground-truth data to underwrite your own opinion. What'd you guys think? That was fun.

That was great.