Why Americans are losing hope in the economy: Anthony Scaramucci

Former White House Communications Director and SkyBridge Capital Founder Anthony Scaramucci sits down with Yahoo Finance Executive EditorBrian Sozzi to unpack the pivotal political and economic missteps that brought America to its current breaking point. Video Transcript 0:00 spk_0 I mean, I've gotten my ass fired from the White House. I'm getting lit up by the late-night comedians, excoriated in the press. I, hey, Dad, are you gonna be OK? Well, it was the first time in my life where my kid was trying to parent me. 0:14 spk_1 Welcome to a new editionof, uh, Power Players. I'm so excited to welcome in my next guest. I talk to him all the time, but he's the author of the new book, uh, All the Wrong Moves How Three Catastrophic Decisions Led to the Rise of Trump. That's Anthony Scaramucci. Good to see you.Good to see you too. 0:29 spk_0 I mean, yeah, yeah, you know, I was just saying if that, that book was about all my wrong moves, it would have been the size of a phone book, Brian. So it was just.Just about a historical analysis of how we got to where we are. 0:40 spk_1 When didyou find time to write this? You're still, uh, you got a day job. 0:42 spk_0 I'm on the planes a lot, and, uh, I had two good research assistants that helped me with it. And, uh, you know, I'm always asked the question when I'm traveling or speaking, what happened? How did we get so tribal, so partisan? How did such a large group of people in the United States feel left out?Uh, a group of people I grew up with, you grew up with that were economically aspirational as working class people, how did they become desperational from an economic point of view? And, uh, so I did about a year's worth of research, formulated a few ideas, and put it down, and then obviously backed it up. 1:17 spk_1 You'refamously, uh, what, 11 days communications director.You and I have talked about 1:21 spk_0 I would say more infamously. I don't really know was famously, 1:23 spk_1 but you've beensteadily.Like pushing back, you've you've you've sounded the alarm on what's going on in this country very early on. 1:32 spk_0 Well, listen, I love the country. Um, I say in the book, I made a mistake working for Donald Trump. I, you know, I, I, I also objectively explained in the book what Donald Trump has done well. I try to tell people, uh, it's really not about left or right, but what's right or wrong for the country. And in this book, it is not a partisan book, it's not a witch hunt. It's just an observation.Economic observation, political observation, but also a historical observation of what happened in the country to create the moment that we're in right now. And by the way, if you don't like this moment, the last two chapters are about how we can repair and how we can rebuild. Um, but I sounded the alarm on President Trump in 2019 because I didn't like, uh, I don't like the politics of hate, don't like the politics of anger. Uh, people can criticize me for working for the president when he was ridiculing Mexicans.Uh, before he got into the presidency, I have to own that. We have some cognitive dissonance in our personalities, and we project onto other people what we want them to be as opposed to what they are. Um, but at least I was man enough to admit my, my, my mistakes, and I admit a lot of my mistakes here. I, I thought some of the things that we did in those three catastrophic decisions, I probably would have supported all three of those at the time. So this is a hindsight test. This is like, OK, hey.We thought this was gonna happen. These are well intended good people trying to make a great decision on behalf of the American people, and the consequences being what they are, they went in a different direction than they originally anticipated. 3:07 spk_1 What would you say to someone that would counter that with, but Anthony, the stock market's at a record high. 3:14 spk_0 I would say that the, the country's top heavy. I would say that the dynamics in the country, and I know you talked to a lot of economists, the upper third of the country, certainly the upper 1% of the country is doing incredibly well. Those are the owners of the stocks. Uh, the profitability for those large companies are quite good, and that is all well and good, and I'm all about that. But if you look at disposable income and you look at the median income in the country.Uh, you know, we're not catching up, and there's a lot of financial anxiety. It's a very large group of people that feel left out of the system. That's what I wouldsay. 3:51 spk_1 It is top-heavy, you know, the other side of it is, you know, I track a lot of companies. I read a lot of earnings call transcripts and companies that are exposed to Dollar Tree, Dollar General, and these people can't even afford to make it.Week to week, I mean, they're cutting back on what they can eat week to week. Suddenly a trip to McDonald's is too damn expensive. 4:08 spk_0 OK, so, so Brian, to fortify that, I'm on the board. Uh, Eric Schwartz, who's the head of the board, former Goldman partner, dear friend of mine, put me on the board of City Harvest this past year, which is a big honor for me, frankly, because I, I wanna be helpful. It's the largest food bank in the city.Uh, the stats are very damning. We have 1.2 million people in this beautiful, very wealthy city that feel food insecure. By the way, these are not homeless people. These are people who have two jobs, working super hard. To your point about going to McDonald's, they're having a hard time because their energy prices are up, their heating prices are up. The transportation to get to and back to work is up, and it's starting to eat up the other aspects. Remember, remember, these price increases and inflation are regressive.Uh, wealthy people can handle it, but the poor can't. And so we have 1.2 million people that are food insecure in the city, likely to go up after the midterms because the SNAP benefits, one of the things in the Big Beautiful spending bill is that the SNAP benefits are gonna, uh, be reduced after the midterms. So guys, I put a lot more pressure on these people. So, so you see it, you see it in the economic data, I see it. Um, I'm doing well. 5:21 spk_1 Havethe Republicans lost theThe economic narrative 5:27 spk_0 I think, I think the Republicans have lost the economic narrative, and I, and again, I want to be objective. I think the president, frankly, understood the crisis at the border, handled the border reasonably well. I don't like the fact that he shut off legal immigration. I think as an economist, we need 1.5 to 2 million people to come into the country to refortify the labor markets and also to help us with our intellectual capital. We always need a flow of smart, smart people to come in.That's where you got Sergey Brin. That's where you got Elon Musk and some of these very, uh, incredible innovators and, and visionaries. We certainly want that in the country, uh, but shutting the border down, I think, helps on narcotic trafficking, helps on sex trafficking. It probably, it probably reduces the oversupply of labor in some of those jobs. I think he certainly got that right.Uh, but if he had just stuck with the direction of where things were going in 2024, he didn't like admitting this, but the inflation numbers were going down, the economy was going up. Uh, we, we were, we were starting to rebuild off of COVID. Uh, but I think the decisions to ratchet up the tariffs was a bad one.Moreover, it was illegal. And so we've had this push, pull, stop, start with the tariffs. Tariffs are a regressive tax on poor people. Second thing that he did, he promised he wouldn't go into a forever war. The prosecution of that war, um, you know, many people take him at his word about the risk of Iran and so on and so forth. I'm just not so sure. We had a deal with Iran that got ripped up, the Iranian deal that the President Obama put together.And we're now in a quagmire, and it's pushing prices up, fertilizer prices, which affect food, energy prices. We're about to go into the winter. We could have $7 gas, and by the time we get to Christmas and we don't solve this problem, uh, we've depleted our strategic petroleum reserves here and in Europe. And so I think from an economic narrative point of view, these things are hurting us now. So I'm gonna push back and say, well, look at, look at how robust the.Uh, the business cycle is at the top end and look at the spending cycle and AI and so forth and so on. I say, yes, there's no question about that.But the average American has about $400 in savings. The average American is missing dental appointments. They won't go to the insurance adjuster if they have a fender bender. Um, we have 40% of the students, again, this is sort of a statistic knowing what food insecurity is, 40% of the students in the elementary school, that would be K to the 6th grade, if they're going to a public school.In the United States, 40% of them respond to the following question, Why aren't you doing well in school? They say, because I'm hungry. I'm going to school hungry. I can't concentrate now. Whatever you think of Kathy Holle on that one issue, I applaud her because she restored.Uh, what was taken away in federal funding for the public schools here in the state of New York, you know, Brian, we're a rich enough country. We don't have to have the kids going hungry, going into the schools. So there's a have, have not thing going on right now that's creating a lot of anxiety. 8:35 spk_1 What'syour, what's the mood within your Wall Street community? I mean, you knoweveryone. 8:41 spk_0 Well, I think the mood in November 2024 is ha ha, Trump is back, mooch, you're an idiot. You thought Trump would be bad for us. Ha ha ha, yeah, a great, yeah, ha ha, ha ha, mooch, you're such an idiot. You got this wrong.And I think the mood now is more akin to what Jerry Baker said two days ago. I don't know if you know Jerry. Yeah, WSJ editor, uh, he's now a columnist there. He says he thinks he's getting a case of Trump derangements in them. He's a longtime Trump apologist, longtime supporter. Uh, uh, he was also making the lesser of the two evils argument that Trump was the lesser of the two evils versus what the Democrats were offering. But I think he's now seeing the existential harm that the president's causing.To the body politics, there's something else the president's doing, which is very, very bad for middle and lower income people. It's the corruption, because let me tell you how corruption works in somebody's mind. Corruption takes away hope. When you're Brian or Anthony growing up on Long Island and the families we grew up in, we had hope, and our parents looked around and said, you're gonna be somebody. But when you have that level of corruption going on inside of Washington, people look up and say, oh my God, there's a two-tiered system.Uh, some people are getting treated more favorably than others, and guess what? I'm not in there. Uh, and this doesn't become a glass ceiling, Brian. It becomes a concrete ceiling for people. I said something last night. I was at Politics and Prose in DC promoting the book. I said, I just want you to just think about this. This country lives on hope, OK? I had hope as a kid, you know, my parents had a tight budget. We were in the middle class, but you know what? I had hope that I was gonna break out, OK? And Henry Ford, whatever his.Stupidity was on certain issues. He had one great line that I always repeat, if you think you can.Or you think you can't.You're right, OK. And when you take hope away from people and they think they can't, guess what happens? They start taking their careers, they start taking their lives in a different direction, and we have to have a hope restoration in the United States. 10:45 spk_1 What does that even look like? Hope restoration. 10:48 spk_0 Well, you need reform, you know, you, you need to have some accountability for this egregiousness that's happening in Washington. You need reform. You need to end Citizens United. That, that has been a failed experiment. This unlimited amount of money going into the political system since January of 2010, when that Supreme Court decision was rendered, has been an abomination for the system.Uh, the whole legislative agenda over the 16 years is big food, big business, big pharma, tax cuts for the rich, corporate welfare, crony capitalism, don't break up, uh, obvious monopolies. Um, that's not helping the country. So there's a lot of things we could do, OK, that are in the best interests of everybody, uh, and that can make the system a lot fairer. Uh, but, you know, Citizens United is creating a separate but equal.Democracy. So that's a big thing. Gerrymandering. Look at what's going on now, you know, they, they used to gerrymander quietly. Now it's like an open arms race where they're trying to redistrict each other to gain an advantage. And I submit to my fellow Americans, are we in a real democracy?If the politicians are picking the voters, I thought the voters were supposed to pick the politicians. So, so that's another thing that we could do to reform things. Uh, we got to get back to the Clinton, George Herbert Walker Bush budgetary guardrails. I write about that in the book. We had, we had the Bush administration, the first Bush created with Dick Dorman as OMB director, a legislation called Pago or pay as you go legislation, and it put guardrails on the Congress. Bob Kerry voted for it.The Democrat Dick Gephardt voted for it, and it forced the Congress to make spending decisions pursuant to those guardrails. Moreover, if you wanted a tax cut, you had to find a spending cut. If you wanted an increase in social services, no problem, but you needed a correspondence. Now 12:36 spk_1 we're startingto feel the pain of this. I mean, we got, we have yields over 5%, and we got a mortgage, uh, rate over 7%. The housing market's basically frozen. I mean, we're now finally at that point. You and I have been talking about this for years where.Our debt problem is starting to become a crisis problem. 12:53 spk_0 Well, I mean, I'd be more, you know, I know you just had Rick Rieder on the show. I would be interested in his, his take on it. He's obviously somebody I respect 13:00 spk_1 enormously an eyeopener what we're seeing right now. He, he stopped short of calling a crisis. I maybe took it a little too far. Eye openerfor him, 13:07 spk_0 yeah, but I think, I think when you analyze it, theHigher rates to me are based on the energy supply shock. The higher rates to me are based on inflation expectation, and the higher rates, we had an expectation coming into 2026 that we were gonna have a 75 basis point cut. People don't remember that now, but then the war starts in February, uh, and we have a 25 basis point increase with likely another 25 basis point increase.So our expectation was -75, and so if you have 50 basis point increases, you're, you're 1.25% off of what your expectation was, right? So it's surprising that prices aren't lower in the stock market, but they certainly are lower in the bond market if you look at the activity. But I submit to you that this is probably more energy shock related. If you could somehow resolve the war.And you got the energy prices down. There's a lot of deflation coming in terms of innovation and AI and the technology that we're also about so quickly. 14:11 spk_1 Like, what is the, what is, what is the lasting damage? 14:14 spk_0 Not gonna happen, not gonna happen quickly enough. Uh, well, I mean, we'll have to remain to be seen, but let me tick off some things. We've, our, our bases.In the Sunni area, uh, which would be the, the, the western side of the Gulf, uh, they've been decimated, you know, the Bahrain supply depot, Qatar, all decimated. We're trying to supply our aircraft carriers from Diego Garcia, which is a British denominated island. It's 2200 miles away from where the war is going on. So that's the doctrine of unintended consequences what's going to happen to the American.Security footprint in the Middle East as a result of the war. Um, it's not clear to me what's going on with the regime. Will the regime be able to stay in place. Uh, they've got, you know, 60, 70% inflation. Uh, some of the personnel in the IRGC are not getting paid. There's a lot of pressure on the regime, so there's a game of chicken going on now between the administration and the Israelis and the regime, who's going to break first. Uh, so it's unclear how that's going to work out.Uh, but if the regime is successful in staying in place and controlling the, the Gulf, you know, you got, you got a supply constraint, and you could have $7 gas. You're gonna have some very unhappy people in the United States, and you already see it in the president's approval rating. Uh, you probably saw this, this poll this week, his, uh,Uh, how's the president doing on the economy? 26% of the people say that he's, he's doing well. That means 74% of the people are saying he's not doing well. That is not good for the president. It's not good for the Republicans. So, so to me, you have unnecessary consequences. It's like, it's like, it's like this. Mr. President, you have a rising economy and you have a reduction in interest rates, close the border, but still allow for legal immigration, uh, help the crypto industry, help the banking industry.Uh, be incredibly popular president, 16:07 spk_1 but he, but he,but he, but he didn't do that. Totally off topic, but like,well, I'm 16:12 spk_0 not gonna pat myself on the back, but I'm gonna pat myself on the back. You say that. Like Stephanie Rule said to me yesterday, you know, I'm not dogging you. I said, actually, when you say you're not dogging me, you actually are dogging me. So I'm not gonna pat myself on the back, but I'm gonna pat myself on the back, OK? I said that this would never pass because I understand how Washington works and how you make sausage in Washington.And the incentives were aligned for it not to pass. So guess what? It didn't pass, and that's a shame. Now they'll, they'll use the forces of the administrators in the CFTC and the SEC to put together clarity-like provisions to allow for certain things. But as Paul Atkins would tell you, the SEC commissioner, the chair, he would tell you that, well, that can get reversed in an ensuing.Administration. So that's bad. You would really want this to come from the Congress. You'd want it codified and have some solidity and permanence to it, but it's not going to. 17:07 spk_1 Does it temper your enthusiasm on crypto?I think it's gonna 17:10 spk_0 slow, I think it's gonna slow down some aspects of tokenization, uh, but I don't think it slows down Bitcoin. I think Bitcoin's probably up 20% since the announcement that clarity failed. Yeah, yeah, because those tokens are gonna be part of the future, whether people like it or not. Those are the Ubers. Hear me out for a second.Every taxi commission, every mayor hated Uber, and nobody wanted Uber. But you know who, yeah, they still do, but you know who wanted Uber to people? Brian and Anthony wanted Uber, and Brian and Anthony got Uber. And so Ethereum and Bitcoin and Solana, they're gonna be part of the future whether the regulators like it or not, you know. And so, and so for me, um,I could have predicted that happened. I did predict it. I was on record saying it wasn't gonna pass. Uh, but, you know, listen, you know, if you really, you didn't ask me this, but I'm gonna answer it. The president heard it because 3 days before his inauguration, he's launching a meme coin. He rugged polls about 60 to $700 million out of the meme coin. $3.8 billion is lost in the meme coin. No bueno. And so that, if you want to piss people off, do that.And now all your adversaries that are Democrats are saying, well, wait a minute, I'm not gonna support this. The president wants it. I'm not gonna give him a win. And which was the main reason why I thought it wasn't gonna happen. 18:33 spk_1 You mentionedearlier on the word hope, looking out over the next two years of the Trump presidency. What, what should investors hope for? What should they cling on to? 18:43 spk_0 Well, I mean, it's very cynical for me to say this, but if there is a change in the House, which I think is very likely.That's good for investors. Because you and I both know a mixed government, always better for investors. If there's a change in the House and the Senate, I would say, OK, look out, we're gonna have some shenanigans going on because there's gonna be bicameral investigations on the president and his family. I predict if that happens, the president will move quickly to pardon his family members and likely pardon himself. Uh, he'll, he'll want to stop those investigations.And so that'll create a whole new set of constitutional issues. So, I think we're in for way more mayhem at the governmental level. I don't like it.Uh, I would like there to be more tranquility. You know, we all do better when we don't, you know, if, if you're not watching the president's tweets hour to hour, and you don't have a president where there's people spending $100,000 a month to get his tweets ahead of the other people because they could trade on that information, we probably would, probably would be doing better if we didn't have a situation like that. 19:47 spk_1 I think we're headed.Towards a Kamala JD run. Oh, you think so? Do you think I, I'm, I'm asking you, I mean, what do you, what do you think? Well, 19:55 spk_0 I, I, I think Gavin was trying, you know, Governor Newsom was trying to say, well, if she's running, I'm not gonna run, but he was really trying to say she had her chance. Why is she gonna try to go out there and run again? I think she's having a hard time raising money. She wants to run, but I think she's having a hard time raising money. I think, I think Newsom is, is clearly running in my opinion. I don't see anything gonna stop him.JD Vance, if you'd interviewed me over the summer, I would say, JD Vance is running. I'm a longtime Republican Party presidential candidate fundraiser, and JD Vance was out there surfing all summer for leads, banging the tin cup for potential donations on the run-up to his presidential candidacy. Marco Rubio was not. And Rubio's telling people privately that he hasn't made any money, and he would like to make some money.And I don't predict Marco Rubio will run because you, you have to, you maybe don't announce until May, June of 2027, but you gotta get the fundraising apparatus together. You got to try to lock up some of these big potential donors. Vance is doing that. Uh, I think Newsom is doing that. There's a selection of candidates that could be in the race, but he is the,Poll position person and just the way the Republicans work.They are a traditional party. Whatever Trump did to them in terms of MAGAifying the party, they're still a traditional party, and they will probably nominate the vice president. They did it for Richard Nixon in 1960. Uh, they did it for Bob Dole. Remember, he didn't win the vice presidency, but he was nominated in 191976. They gave him the presidential nomination in 1996. They did it for George Herbert Walker Bush, right? He was the 21:34 spk_1 president, vicepresident.resemble more George W. Bush or more Trump. 21:42 spk_0 Uh, great, it's a great question. I'm gonna say neither, and I'm not dodging the question. I think he'll have elements of Trump in terms of his anti-Europeanism. I, I really go back to that Munich Security Conference speech in February of 2025. That seemed like that was his rhetoric more than the president's. 22:00 spk_1 So he'd be leavingtariffs on. He, he's not coming thereday one. Yeah, 22:04 spk_0 I, I, I think, I think he, he, he's running hot on the populist strand of the party.I think he's a huge oligarch. Uh, so I, I think he'll be very pro-business. Um, so he made that, that may be where he has less Trumpian aspects. He's smart, JD, you know, he, I mean, Vice President Vance, read his two books, Hillbilly Elegy and Communion. They're thoughtful books. He's a smart guy. He's had an identity crisis, changed his name 3 or 4 times. He shape shifted. He went from Donald Trump as Hitler.To Donald Trump is Moses and Jesus combined, you know, and I don't think Donald Trump is either of those things. And, and JD Vance won't have, if he, if he were able to rise to the presidency, I don't, I don't think he would have the personality following, the personality cult-like following of a Donald Trump. But here's the other thing, you know, I think Rubio thinks that this is an anti-incumbent environment, and Vance is gonna get smoked by the Democrat. As long as the Democrat can fog a mirror.And not act overly woke, they'll probably beat the Republican this time just given where the president's approval ratings are. 23:11 spk_1 Lastly, before I let you go, um, it takesIt takes a special type of person to say, you know, I was wrong, and you've, oh, you've said repeatedly over many years, like you've made mistakes, your career, the communications job. Where does that come from for you? How have you been able to do that and put yourself so out there publicly? Uh, 23:28 spk_0 I think if you, I think you become way more relatable as a human being if you're able to admit that your mistakes, you know, some of these guys have a very tough time doing that, but I think when I got my ass kicked at the White House, and you've met my older son, he's the CEO of Treasure Trove, I was, hey, Dad, are you gonna be OK?Well, it was the first time in my life where my kid was trying to parent me. I mean, I've gotten my ass fired from the White House. I'm getting lit up by the late-night comedians, excoriated in the press.And I said, yeah, I'm gonna be OK. Watch what I do with this. And I think for our children's sake, expressing vulnerability, observation of vulnerability, I find too many of my wealthy friends try to pretend everything is perfect.Their, their life went up in a 45 degree angle. They never made a mistake. I read some of these biographies and you got some of them behind you. I'm like, this guy never made a mistake. No, no, no, no names, you know, he was, he, he was, uh, he was in, he was in the 1st grade. He got everything right and everything right since then hasn't aged, and I feel that that puts huge pressure on the kids. I'd rather be like, hey, here, here's me, warts and all.To give my kids space to fail, to get my kids comfortable with the idea that they can go for their passion projects, and if they have ups and downs, they can put it together, uh, if something goes unexpectedly. So that's, that's part of the motivation of me being so honest about things. 24:47 spk_1 Good to see you. Tell your son that I said hi.Congrats on the book. God 24:50 spk_0 bless. Thank you, Brian. All right, 24:51 spk_1 that's it for the latestepisode of Power Players. View Comments