VCP: Inside the Manufacturing Shift: An Anonymous Expert View @nnzp1730

Vance Crowe [00:00:01] Now that the tariffs have been implemented and you know, countries are responding, there's now this big emphasis on actually doing manufacturing in the United States. What is, what is that Ev Is that even possible?

Guest [00:00:14] Yes, it is possible. The pro, the problem I would say is at what scale and how quickly can we replace what we've been getting? And also, can we do some of the things that we're used to? I mean, or, or can we get the consumers things that they're used to? 'cause there are a lot of manufacturing processes that are no longer done in the United States at any scale, or sometimes at all, that people like, like Chrome plating say, or, or bright plating or simulated stainless steel. Most of that is done offshore today. So if you look at like a refrigerator or a car or, or any number of other things, there's a number of those things that are usually brought in from the outside because of processes that, that are no longer in place today in the United States in any quantity.

Vance Crowe [00:01:13] And what about things that aren't like that?

Guest [00:01:17] There's, there's also limited capacity in those things. I mean, the, the industries have adapted, this is a, you know, this is a 40 year shift, right? I mean, if we think about what's happened over the last, say 40 years, is that right? 20, yeah, at least 35 years. And really since the mid eighties when, when we started really talking to China and Asia, you had the Asian Tigers, you had Japan, then you had South Korea, then you had the Asian tigers and then you, and then you had China and now you have Vietnam and Indonesia and some others there as well. So it's been going on, really this offshoring thing has been going on since about 80, the mid eighties. It really took off after China joined the WTO in what, 2000? 2001. And a lot of industry has moved there. A lot of it because of environmental regulations or hand work, you know, things like that. So,

Vance Crowe [00:02:22] Alright, I'm gonna jump in here for just a moment to give you a little bit of background about what's going on. So I have a podcast guest, NNZP, that will come on occasionally when big news is happening. Big news, like what is tariff craziness gonna do to the imports and exports and manufacturing. But one of the stipulations that NNZP has is that he wants to do it anonymous. So if you are used to watching the video of this, you already know that we're not showing the video that we normally do. But that is because this is a guy that is playing in the real world. He has shots up and you know, he's gonna talk openly about China, about manufacturing capabilities, about Europe, and he just doesn't want it to come back on him for the work that he's doing. But I don't give anonymity to politicians or to people that I think are gonna manipulate things. But in this case, it's really interesting to have somebody that knows so much about manufacturing, willing to talk so openly with us. So you can just know that I vouch for him, I know him personally. We've gotten to spend time in the real world together. But he is an extraordinary character. And I think you're gonna get a lot out of this podcast. I am going to mention just a little something about Legacy Interviews. About a week ago, I had a rather profound experience where I interviewed my parents, I captured their life stories so that future generations can know what they were like. And I am really excited about what I'm gonna be able to show my own children in 10, 15, 20 years when they are finally old enough to be able to understand, you know, the people that their grandparents are or were.

Vance Crowe [00:04:09] So I'm gonna come back a couple of times during this podcast because I did make some pretty big realizations, including one big mistake I made. And so rather than just take it up here, I'll check back in with you a little bit, but let's get back to the conversation with NNZP. You know, there are a lot of people that are saying that the tariffs, they should have been done a different way. It should have been like, Hey, let's get the manufacturers prepared to do this, and then we pull the trigger on the tariffs. But I think that people have been saying for a long time, Hey, we should bring back chip manufacturing. We should bring back these manufacturing and just never happened. What's your take? Is this the fool hardy way to do this? Or the only way to do it?

Guest [00:04:52] I don't know whether there was any other way to do this. I'm sure there's, I, you know, there's a million ways to skin a cat as they say, right? And they, not that I want to go do that, but there's a lot of ways to do different things. But in the end, you know, it was always gonna be a food fight of some sort. Right? And that's the what I believe. I mean, there's no easy way to do any of this stuff. There's no incentive to move stuff back unless somebody puts some incentive in place, whether it's a positive incentive or a negative incentive, right? So I, you know, I mean, we could say that all we want. We've been talking about it for a long time. There's been a lot of people talking about doing this stuff for a long time. And even if you go back, you know, to the 1990s or the two thousands, you can get any politician of any sort on camera saying, you know, that NAFTA's bad and, and or, or that China, we need to do something about this. You know? And that's over the last 25 years people have been saying that, but really the, the flow has been continually outward and it's gotten more prevalent as we've gone. So, you know, we can talk and jawbone all we want until somebody changes something, nothing's really gonna happen. So, yeah. Could there have been a different way of doing this? Absolutely. Would it have made any difference unless there was some sort of pain involved?

Guest [00:06:24] No, I don't think so. Is it gonna be ugly? Yeah, it's gonna be ugly. There's gonna be some shortages and there's gonna be some problems with supply and things of that nature, but it wasn't gonna change unless something like this happened. So it really, you fall into the camp of do you want it to change or do you not want to change? Do you believe it has to change? Or do you believe what we were doing is okay? And you know, and then you pick a time span, I guess, and you look at the incentives

Vance Crowe [00:06:59] And how do you think this is gonna play out? You're talking about shortages. Are you talking about shortages at the grocery store or are you talking about shortages? You're not gonna be able to buy the car you wanna buy? What is this gonna look like?

Guest [00:07:09] I think shortages in, in hard goods is going to be an issue. I don't know to what extent, and I don't know, you know, how we fix some of that in the short term in particular. In particular, you know, there are certain things that just aren't, aren't in huge supply outside of China. I mean, rare earth is one of 'em. We, you know, we've had those discussions on, on Twitter X, whatever you wanna call it. And you know, there, there is a mine in the us there's lots of rare Earth aren't exactly rare, but the refining of rare Earth is fairly rare. We finally did start up mountain pass again, and it's making some rare earths probably for the defense industry, but the majority of rare earth are, are, if they're not mined in China, they're processed in China and now they've cut those off. So what does that mean? So anything to do with magnets, permanent magnets, you know, extremely powerful. Permanent magnets are all contain rare earth. There's a number of other things that contain rare earth. I think there's a number of other things that we, we don't think about, that nobody thinks about in their daily life that are so critical to the current environment that we live in. Like capacitors, resistors, simple chips. And when I talk about simple chips, I'm talking about the predecessors to like the 80 80, the Intel 80 80 chip or the 3 86 is a, is was the next generation. And some people probably know it better. And those chips are used everywhere for everything.

Guest [00:08:43] Your, whether they have to be or not is a different question, right? What do you need your toaster to know what time it is and to automatically sense how brown the toast is and pop it. But that, that is done through a logic circuit. And those logic circuits contain simple, simple chips, right? And those, those chips are basically made in China today, along with capacitors, resistors, and a lot of printed circuit boards. I mean, the actual board that we, we print that we put chip chips and resistors and and capacitors on to make boards, a lot of the displays are made over there. So a lot of the HMI displays that you see are displays in cars or things like that. Those are all very China centric, I would say they're assembled here. And that's where people get mixed up. Right? And I'm, I'm famous for saying that a assembly isn't, isn't manufacturing. It is, but it isn't. You have to have those basic components to assemble. And some of those basic components, we have allowed to become very, very concentrated. And so some of the things that, that we think are ubiquitous may not be UBI ubiquitous anymore.

Vance Crowe [00:10:07] And when, when that goes on with some place like China, it's easy to imagine this for like six months. Oh, I couldn't get the printer that I wanted. Or oh, the microwaves, you know, ran a little bit. But what if this goes on for five years? Will we be able to bring on capacity by then?

Guest [00:10:25] So five years is probably the inside of the window of when we will really develop capacity like that we can move fairly quickly if we're all together and we're all on the same page. I would not say that's probably the case today. I think there's multiple tribes out there deciding what they wanna do and what they feel and what they think should happen. And those tribes have not have a lot that are not in common and what they think we should do. And they don't even agree on the principles, I would say. So we're not together on that. So I would say we would move slowly. It would take quite a bit of funding incentive, you know, to private entities and from the government and from other things to really get this moving. Right? And, and it would take a lot of regulatory work. And how do we, how do we actually do some of these things? A lot of these things moved offshore because they're dirty, they're, they have a lot of hand work to them and or they have some other environmental problem, right? Rare earth have an environmental problem, right? The way we separate those is through acids and acid washing and things like that. Separation. Same thing with a lot of materials processing and refining. They're dirty.

Guest [00:11:56] They're, they're chemically dirty or physically dirty or very, very hard work and require a lot of, a lot of equipment.

Vance Crowe [00:12:06] So you mentioned before about rare earths and that you need 'em for magnets, but I, I don't know anything else about rare earths like are these just like, not like pure elements? Is this, you know,

Guest [00:12:18] Titanium, what is it? So they're pure elements. I mean they, they typically are congregated together and in what's known as mischmetal. And they, they can be separated out. They have different properties. They're, they're, they're more rare than other things. So you remember the periodic table, and remember there's that big stretch in the middle that has these, this row of elements in the middle. There's two rows that have all these sirium and, and I don't know, I can't even think of marium and, you know, all these other strange names. Those are a lot of the a a lot of the rare earths in that category. And so there are these, there are these metallics that, you know, stick to every that, that are in combination with a lot of other things. They're a lot of men up in like cold tailings and things like that. You'll find 'em, they're all meshed together with a lot of other things. So you have to kind of sort 'em out through processes and get 'em, get 'em out. But they have really unique properties that provide some sort, some sort of enhancement to properties of other materials and things of that nature. So in magnets, they use 'em to make super strong magnets, right? And, and they, they, they enhance the properties of, of a lot of materials you can use 'em for, for that purpose. And that's what we've used is we've developed a lot of these new technologies. We developed a lot of new materials, a combination of elements that make up these new materials.

Guest [00:13:52] And a lot of those things contained rare earths, especially in the fence industry. Yeah. And I, electric vehicles, if you wanna talk electric vehicles, all those magnets that run those motors and electric vehicles all have rare earth them.

Vance Crowe [00:14:07] So the rare earth, I, I saw a guy talking about them and he said, you know, they're, they're not rare necessarily in the sense that they only ended up in China or they only ended up in Russia. They, they're everywhere. They're just rare because they come up in such small amounts. And then to your point, the manufacturing of them is so dirty or so

Guest [00:14:27] The refining of them Yep.

Vance Crowe [00:14:28] Yeah. The refining of them.

Guest [00:14:29] Yep. The

Vance Crowe [00:14:29] Separation.

Guest [00:14:30] And so

Vance Crowe [00:14:30] Do, like, do you see a world in which the west starts accepting, refining, you know, and, and the, well,

Guest [00:14:38] We, we restarted mountain pass in I think 2018,

Vance Crowe [00:14:42] I don't even know what that means.

Guest [00:14:44] Mountain pass California is, is America's rare earth mine. And it was closed for several years because of environmental problems and also the effects of China, you know, being able to sell as rare earth very cheaply. So I think in 2018 or 19, I have to look it up, they restarted that mine and the refining, because, you know, things like, if you remember the F 35 stopped production for a while because they found Chinese rare earths were in some of the magnets. And that's not allowed, you know, it has to, it can't be Chinese material. So that's one of the reasons why we started looking at it. Australia's got a lot of rare earth. There's a couple, there's a couple pilot facilities in, in Australia. Africa's got a bunch of rare Earth. Canada's got a bunch of rare earth, rare earth. But again, most of the, even if you have rare earth, you usually dig 'em up, ship 'em to China, have 'em processed and ship 'em back.

Vance Crowe [00:15:53] So you've dealt with the Chinese before. How do you think Trump's you know, strategy of negotiations works in the Chinese culture and in the circumstance they're in, I mean, they're in what some people are saying, well, they're already in a recession, it's close to a depression, they're weak. Other people are like, no, China's been around for a thousand years. They'll be around for another thousand years. What do you think?

Guest [00:16:17] All those things can be true. And are they in a depression recession? That's, you know, it's hard to put a label on it. They are in outright deflation. I mean, I was, you know, I was there recently and they are in outright recession. There is over capacity in every industry. The, they are talking about consolidating, the government is talking about consolidating certain industries and forcing people to consolidate.

Vance Crowe [00:16:49] Yeah. Like the, this is a, a hard thing for even for my mind to even wrap around when you talk about deflation. It's because they built out factories that could just crank out things and then there just weren't enough people to keep buying. So you can't just keep building and building and building. Well,

Guest [00:17:06] So yeah, I mean the, the signal, the signal and the response are separated in China. It's state capitalism, and they, it, and really if you think about China as a, as a country, employment is mandatory. I mean, it is, it, it's something they have to have. The one thing the c CCP is, is afraid of is the, the citizens rising up against them. And if they don't have jobs, that's more likely to happen. So it's a, it's a big employment game there that they gotta keep people employed, right? And, and, and somewhat pro moving towards prosperity. That's been their promise. They've kept it, the people trust them because they've kept it for so many years. And so now we're seeing that kind of backward eight, right? And when I say over capacity, I mean, if, if China produced every car that it could produce, no other country in the world would have to produce a car. So they can produce about 90 million cars. The world consumes about 90 million cars a year. They consume about 30. So they have three times the capacity. Talk about steel. It's probably five to six times the capacity that they can use domestically. Okay? So everything that they have industry-wise, and this goes across industries, across wide various of industries. And this is one of the reasons why I think you see the United States reacting the way it is and start people starting to, to see this.

Guest [00:18:40] I mean, China went from exporting no cars to being the world's leading exporter of cars in two years. Okay, go, go do the go do the research. They export more cars than anybody today. So Europe has to make some decisions about their car industry, whether they're gonna let the Chinese in because it will destroy BMW and Mercedes and every other car company in, in, in Europe. If we let 'em here, it will do the same. And I understand the arguments about protectionism and things of that nature. It's really what kinda world do you wanna live in? Do you wanna live in a world that is all services? And yes, we have a great services economy and we export a lot of services, but if, if you don't manufacture things, you can't defend yourself. So you have to decide what kind of world you wanna live in. And if it's a Chinese world where they control all the manufacturing and they ship you all the cars, then they are the lead economy. That is the way this works. I mean, manufacturing is, when it comes right down to it. If you can't manufacture a car, you can't manufacture a tank and you can't manufacture a plane and you probably can't even man, well you, we become really good at manufacturing guns. So I won't say that, but, but you know, it's, it goes, it goes a long ways. Even the things that we make today, like, you know, the HIMARS, you know, let's talk about 1 50, 155 millimeter shells.

Guest [00:20:12] I mean, we don't make enough 155 millimeter shells for a week in Ukraine in the United States. We're buying 'em from South Korea, okay? High Mars or some of the, you know, the Reapers that they're being shot down by the Houthis, those are all full of electronics, right? They're all full of things that we don't necessarily make a lot of, right? So we, I I think it's, you know, for 40 years this has been unbelievably good for the American consumer. It is held inflation at bay in the United States. And, but as I like to say, everything taken too far turns to shit. And this is Milton Friedman's, you know, you know, free trade taken to an excess where you're going to have a, a global hegemon in manufacturing, you already do. Right after, before World War ii America was the global hegemon of manufacturing. And afterwards it was, it was vastly everything for about 20 years, right? Until we rebuilt Japan and Germany, China sits in that position today. So really, you know, and I I go back to things that I've said before, which is, you know, do they, do they, do they believe in the same things we believe in?

Guest [00:21:45] And are we risking our, our society because we're becoming so dependent on someone that maybe doesn't believe the same things we believe in democracy. The same idea of, I I read a Mearsheimer book recently and, and his comment struck a note with me, which is, you know, societies are built around the idea of what the good life is, what is the good life, right? And do we share the same ideas of what the good life is? And the answer is no, we don't, we probably share a lot of it with the people of China on the ground, but we don't share it with the ccp. And so we have to decide, I think, who we wanna be. And I think your,

Vance Crowe [00:22:31] What do you think the CCP thinks is the good life?

Guest [00:22:34] The good life is to them is they are the center of the world and they get to make the decisions and they believe that with their whole heart. And they believe that that's China's rightful place is the center of the world. And of course we believe that too, right? I mean, so let's be honest, right? I mean the, the reality is, is that we believe that too. That that our rightful heritage is to be exactly where we're at in the middle of the world, right? And everything revolves around us and the US dollar and the US consumer and things like that. And so there's, I mean, I don't think that that's it's evil for them to believe that they should be at the center of the world or, or their ideas are right, right? I may disagree with their ideas and, and their view of the world, but it doesn't mean that I, you know, that, that they have, that they have to be evil for thinking that, I guess. But I do think that at some point you have to decide, you know, you know, is this what you want? Because we're, we're, we've been drifting this way for a long time and it continues to drift forward at an ever increasing rate. And since 2020, I am, as I frankly am astounded at the, at the innovation in Bev's battery electric vehicles, an electrification that has happened in China since 2020.

Guest [00:24:07] Okay? They are the leaders in electrification of everything. So, you know, our, our electric vehicles and they, they basically tore up the rule book and started over. They knew they couldn't win in the ice vehicle arena, and they tore up the book and went all bvs. I still say that the green agenda is sponsored by them and that they're, they're, they're putting, they're doing this partly because they know they can win this game, right? This is, you know, this is a Machiavelli Sun Zoo sort of thing. You know, where you play the game, you can win, not the game that you, that, that is offered to you. And certainly when you look at the green agenda, they're building, as we talked last time, more coal fire power plants in the next 10 years than exist on the face of the earth. And they're doing everything. Yeah, they're building solar and they're building some wind too, but they're building nuclear, coal, net gas, everything that they could possibly do because they know that abundant, affordable, available energy is the key to everything, as I say. And we meanwhile are taking things offline in Europe, more so than the America, but we're taking things offline and we're buying solar panels and windmills from them. And we're, it looks like, you know, their bvs are, are, are, could come here too. And, you know, so what are we doing exactly right?

Guest [00:25:38] I mean, what's, what's the goal here? And I don't think that, you know, we've, we're, we're sleepwalking into a real problem. We've already slept, walked into the problem, but we're not, we're not so far gone that we can, we can't stop.

Vance Crowe [00:25:53] Yeah. Bessent has said that in addition to doing the tariffs, he wants to make it so regulation gets taken off so that, that way you can start to build industry. To me this is something that's gonna go well beyond something you can do in an executive order. You gotta get a lot of people on board for deregulation, both at the federal and at the state, even local level. Is this even possible? Alright, we're gonna jump in here real quick. I mentioned that I wanted to talk about my experience recording my parents' own interview. And the experience was that I realized you should almost always have a third party do the interview. I got only a few minutes into my interview with my dad and he was already kind of rolling his eyes saying, well, you know the answer to that. Well, you know this story. And I had to prompt him to be able to tell the context of stories that maybe I know, but oftentimes I actually didn't know and he assumed that I did. And I think this is actually chalked up to the power of a legacy interview in general, when your parents are trying to hand down stories, they oftentimes are like, well, you remember this or you know all about this, but it's because they are coming at it from an adult mindset. They don't realize that you were a child when this was going on, so you didn't understand how it was connected to other things. So I actually have a new conclusion. You know, I used to come on the podcast and talk a lot about how if, if we're not the right option, Legacy Interviews for you to record your family's life stories, that I could give you the questions and you could do it yourself.

Vance Crowe [00:27:24] And I still think you can do it yourself. I just think that if you're gonna do it yourself, maybe have a neighbor or a friend or somebody that's slightly more outside of the family because you're gonna get bigger, richer, more textured stories if you don't do what I did. I, I actually, it's hard to say I regret it because I am so delighted that I have it, that I'll talk a little bit more about that in, in the next break. But I wish I would've done it differently. And I had a really great editor, my, my guy Sean here, who I know could have done a great job, but my kind of controlness, I just had to do it. And anyway, if you are interested in having us serve as the third party to do your family's Legacy Interviews, go to Legacy Interviews dot com and schedule a call with me and we can chat about what the interview might look like, how it will go, and make sure that we capture what it is that you hope gets passed down in the future. Alright, let's head back to the interview with NNZP.

Guest [00:28:28] Sure, it's possible. I mean, there in the Reagan years, and we, we did a lot of deregulation. Even Clinton did a bunch of deregulation in, in some areas. So the answer is if if there's the wi, if there's the political will, we can do anything. The, again, I come back to the country is very divided. We are not on the same page. We, we do, we do not see the threat the same way if there, if you see a threat at all. So I think the, the real answer here is that sort of stuff will happen in little bits until we decide what we wanna do about it as a country. And that will come in a referendum of some sort. The Trump, the last Trump election was somewhat of a referendum. I mean, winning all five swing states was not expected and big. He didn't win by large amount. So I'm not gonna call it a mandate or a landslide, but winning all five, all five swing states is not chicken feed. And so there is some mandate to do this. I think Trump it, it's gonna take an outsider probably to do some of this. And I, you know, it's, it's very ham-handed what we're doing right now, but it's gonna, it's gonna be ham-handed. I mean, I think we built up a lot of regulation, we built up a lot of ideas about how the world works, and that's how it has worked for at least 40 years.

Guest [00:30:05] And the 80 year period, you know, the 40 years before that, it worked a little differently because China wasn't there and it worked a little better because China wasn't there. And we were, you know, we didn't have some of these problems that we have with one, one country being the, you know, taking dominance in a, in a huge number of areas. It was more disperse. But the last four years is, you know, you gotta remember that that's the, that's a vast part of the population that has only lived in this arena that we live in today. And, and getting people to think outside of, of what their, you know, what their arena is, is very hard. You know, it's, it's that what is that the hundred and first day of the pig or whatever, where it gets picked, the slaughter that we talked about, right? Every day before it, nothing happened. They just got fed more and more and more, right? And then that last day, you know, something different happened that they were, that were, that was unexpected and they were unprepared for that because they had never experienced that before they hap got on the truck again because they're just going somewhere, somewhere else to eat, right? And the reality was they're, they're going to the slaughterhouse. So you gotta have that, you gotta have that moment of realization, I guess.

Vance Crowe [00:31:24] You know, there's been a lot of hope been that's been brought out because it's like, hey, if we bring manufacturing back now, we're gonna have jobs, is gonna be middle class. Is this true? Or will the factories that come back be largely without lights because they can just build them as, as AI robotic systems and we don't need that many people.

Guest [00:31:44] So again, a mixed bag, it's both can be true. And why, why I would say that is there are going to be some blue collar labor la you know, like we had it previously, right? And there's also going to be a lot of automation. There has to be, there's a lot of things that Americans don't want to do and we can, you know, people can say yes or no to that, but yeah, you can always find somebody for the right price. It's not absolutely true. And, and then there's gonna be a lot of automation because of envir, you know, and the environment that some things are made in and things of that nature. Plus, you know, precision and it's there. So what does that bring that brings more opportunities for automation engineers or automation technicians or people trained in keeping those machines and systems running. And those can be, you know, I've got people that do that with high school degrees. I've got people that do that with two year tech degrees. I got, I got full engineers that do that. So there's, there's different levels of, of things that people could do in that and they do pay well. But I, I think, you know, there's also the, the, the thought that, you know, that will also probably increase prices. And so there'll be some inflation with that maybe at least for a while and we'll see where that goes.

Guest [00:33:19] But like a lot of things, both sides can be true, right? I mean, and you have to open your eyes and, and think about it, you know, without your, without your philosophical bent that your, you know, your biases. And think about, you know, a lot of times when people are talking one side or the other side, the reality is right somewhere in the middle could be skewed to one side or the other, but it's not one, it's not all the way to one side or the other. So this one I think is both can be true.

Vance Crowe [00:33:49] So how are you feeling about the tariffs as you look at what this could do for our country?

Guest [00:33:54] I think we're in for some short term pain. And by short term, I mean maybe two, three years. And I think there's will be shortages. I think we will see lower production rates because of shortages of parts and, and things like, kind of like COVID, COVID was a precursor to this, I think as far as missing components or, you know, I always say it takes a hundred, a hundred percent of the parts to make a car. You know, you can't make it with 99, although I was proven wrong during COVID because they made 'em and parked them in parking lots and pulled out chips and made another one and drove it out there and pulled the same chip out and made another one, pulled the chip out and drove another one out there. So there were literally cars in, in fields or, or parking lots waiting for a single chip or multiple things. And when they got there, and we also saw during COVID options that were deleted from cars, like heated seats and certain, you know, like USB chargers and things like that or, or that were, the dealer said, we'll install those later. They were sold to people without 'em and they with a plug in there and you know, I will tell you when to come back and get it. And so I think we'll see some of that again. I think we'll see some, maybe some simplification of some of the household goods, right? Like washers and dryers may get more mechanical again, you know, more, less electronics and less options.

Guest [00:35:27] I guess maybe the, maybe it won't have the smart sense or know when you put the downy pod in or whatever, you know, or that you can't connect to it from your phone as you're driving home and turn the dryer on. I guess

Vance Crowe [00:35:42] Are there things that you are predicting or you're confident that they're gonna be in shortages? So you're buying up now or buying ahead of time?

Guest [00:35:50] Oh boy, the answer is I should be, but I'm not. And we will make due, I think there, I think there's also going to be, you know, less volume in the short, in the, in the next two or three years in industry. So I think we'll have excess equipment and so some of that'll be cannibalized or moved around until we figure out where we're going. So, you know, there's also the thing that, because I think there's gonna be less, less volume, you know, you don't wanna spend a ton of money either stocking up your store room and buying new equipment and things like that. So I think we're seeing that in the trucking industry. You know, we see truck truck sales going down, we see, you know, IHS which is the, which is the forecaster for the automotive industry, took a million units out for 2025. So they're saying instead of 15 million cars, we'll build 14 million cars as of this week. So, you know, I mean I think there's, I think there's some of that that'll happen as well. Right? So, you know, they'll, they'll be parts, they may not be new parts, they may be parts that you buy off eBay or buy off auctions or, you know, things like that, right?

Vance Crowe [00:37:11] Yeah. I remember a few years back I interviewed a, a man that lived in what was then Rhodesia. And he talked about how when they got completely cut off from the rest of the world, that it actually had this profound impact on their economy because they learned how to manufacture things and all of a sudden they were very, very well developed and he was like, we never would've done this had we not been forced to invent our new, how to build our own cars and how to build our own weapons.

Guest [00:37:39] Interestingly, I I ran into a guy from Rhodesia as well in February in Park City, in Deer Valley, park City, Utah, skiing in the hot tub. And he fought, he had fought in the wars in Rhodesia and we had an interesting conversation. But yes, that, that happens, right? And you get more innovative and you get, but you know, necessity is the mother of invention and so you figure things out, right? It happens in companies that don't have money too, you know, you figure things out.

Vance Crowe [00:38:12] What we think about right now is very easy as a consumer to think about what's gonna happen, what, you know, what will I maybe need in the future. But there's another side of it, which is what happens if the things we are producing aren't consumed by Americans, if they're consumed as exports, like so many of our agricultural commodities, man that'll actually reshape the, the landscape. You know, it's gonna actually change what you put in the ground and what grows.

Guest [00:38:41] That's gonna be super painful. And you know, for farmers and you know, that you, you know, my family history, so we have farms and our family and my mom still lives on the farm that my mom and dad farmed. And that will be painful, but it may, you know, it also may be good in the long run too. You know, I mean we, we have, we're, we're becoming a mono cropp, I guess, you know, or a, or a by monocrop between soybeans and, and corn and largely corn because the ethanol mandates and things of that nature. But, you know, we'll see, see how that affects people. But it certainly will have an effect on, on, on farmers just like it has, you know, I was talking to someone on Twitter the other day and, and, and it's a guy I really like and we have good conversations. He goes, you know, the government shouldn't be picking winners and losers and I, I agree, but they always do. Right? Policy and policy always picks winners and losers. So you can have a strong dollar or a weak dollar policy. And one of 'em is good for farmers and one of 'em is bad for farmers, right? One of 'em is good for manufacturing, the other one's good for manufacturing. It's, it's reversed for manufacturing, right? So for export manufacturing at least, so if you, you know, if one that's good for farmers is bad for export manufacturing and vice versa. So there's always winners and losers in, in, in these, in these policy decisions and in these geopolitical foreign policy decisions.

Guest [00:40:21] And no matter who, what you think happens, the government's always choosing one way or another through all of their policies and we elect those people, right? So ultimately I guess we're choosing indirectly and this is what we've chosen for now. So we chose it in 2016. We chose something different in 2020. Now we've chosen this again and we may choose something different again in, in 2028. So yeah,

Vance Crowe [00:40:54] This is a problem China does not have, right? They can do things for much longer, this

Guest [00:40:57] China does not have, right? Or Russia does not have, right? That they have a long term. And especially China today. I mean, at least in the past, China did have transitions. They were, they were not major transitions and the party was still the party and they still basically believe what they believed. But there was a personal transition today, you know, I don't know whether will transition until he passes, you know, so he may be around for a long time like Putin's around for a long time. So they can have a fairly steady policy that lasts a long time and he has a lot of time to affect that policy. Where in the United States, and even in Europe, although Europe's more stable than we are, as far as which governments which, which factions control governments or have been, they seem to be mixing it up right now. But we have, we, we've been, we've been manic depressive on that front. We've gone one way and gone the other way and then the other way and then the other way.

Vance Crowe [00:42:03] So, but I mean, in the US' defense, yes, we go back and forth, but the, the, it's not revolution. I mean this one is probably as close to revolution as ever, but if China goes, like you were saying, if they have a whole bunch of outer work people and they start having massive upheaval, then you see an actual cultural revolution where, where things are getting really crazy. And that clearly could happen here. We may be here right now, like in the revolution, but it does, it doesn't feel like what I think will happen whenever, you know, no country, no matter how stable you are, can stave off a revolution forever, right? The the people always want change at some point.

Guest [00:42:43] Well, you know, and that's, if you go back to Neil Howe and the fourth turning and, and those theories, generational theory or you know, every fourth generation we have some sort of event. It can be internal or external. You know, civil War was internal, you know, the Revolutionary War was internal. The rest of them have been mostly external, right? And people think about the Revolutionary War as an external war, but it really was an internal war between the revolutionaries and the, and the monarchist in the United States. So yeah, I mean we, every, every 80 to a hundred years we seem to have some sort of event, whether it's internal, external.

Vance Crowe [00:43:32] What do you think is gonna go on with the nature of employment going forward? Right now it seems like inflation is hitting people, but there seems to be a lot of jobs out there, you know, like the, it seems like college is not nearly as important as it was before. Where do you think employment is heading?

Guest [00:43:52] I think employment is, again, both things can be true. And I think, you know, if you look at the numbers, the BLS numbers for the last year, I mean the, the, the federal government and the state governments were leading the hiring, right? It was government and hospitality and really manufacturing was shrinking even last year, starting in, in January of last year. A lot of other things have been, have been on a slow decline. So I think, I think, I think employment slows down and at least for a while, until we figure out where this is going and what's going on. And again, that IHS cut that I talked about a million vehicles coming out of a out of the year says that very directly, doge says that very directly, right? We're, we're cutting the federal government employees. So it's, I think that that's pretty self-evident to me anyway. Now about college and things like that, I think, yeah, I think, I think again, everything taken to an extreme turns to turns to shit, right? And so we, we sent everybody to college. Everybody had to go to college in the nine, starting in the 1990s. And by the end of the nineties, if you didn't go to college, you basically were a loser and you didn't, you know, you, you weren't gonna do anything, blah, blah, blah.

Guest [00:45:30] A lot of that didn't turn out well for people. There's, you know, some of, a lot of it did, a lot of it didn't, right? And a lot of people got degrees that didn't provide them any net present value, right? They, they paid out more money than they're ever gonna earn from that degree. And so there are other paths, and I think tech schools are a great path. I there's a great one over in Fort Wayne that does two year tech automation degrees. I hired several people from it. They're very, very good. There's one in Quincy, Illinois that does welding very, very good. I i, this is John Wood Community College, I, I can't remember, but I think and very, very good. And everybody comes outta there with a, with a job, right? And then there are, I think there are gonna be apprenticeships and other things that happen again, start starting again too. I think that we're starting to open up to that. But if you think about from when even I'm, I'm 56 and when I was growing up, I mean, you could still go to Caterpillar or you go to John Deere or you go to the big three and, and get in right? And have a career there and a pretty decent career. But it was already starting to fade that way. And, and, you know, those jobs were disappearing and they disappeared quicker in the nineties and even quicker as we, as we went along. You know, if you look at the UAW at the peak, there were 860,000 members today they're what, 170, 180,000, right?

Guest [00:47:08] It's a, it's a big difference, right? So, but I think we're starting to see the light that we need more of these people, the number of plumbers and electricians and maintenance technicians and people that understand hydraulics and things like that are those guys are retiring. I mean, there's a lot of guys my age doing it too. And, but you go to the next generation down and it gets even thinner, right? I mean, it went from very thick knowledge to thinner knowledge, to thinner knowledge, to thinner knowledge. And now there's a lot of people that are, that are in the boomers generation that are retiring out of the workforce that have a lot of experience.

Vance Crowe [00:47:50] Okay, one final break in, he's talking about retirement. And man, there are a lot of people that are doing Legacy Interviews when they retire, their family members get it for him or their coworkers. And it is a really great thing. But my own experience when I was driving home from having done my parents' interview, even though I didn't get it the way that I wanted it, 'cause I should have had a third person do it. I have to say that driving home with those memory cards sitting next to me in my passenger seat, I felt like I had wealth that I had never had before. I felt like I had an heirloom, a thing of actual value that I could pass down. And it actually made me realize like maybe the only wealth that matters is the wealth that you get to pass down. And that is what a legacy interview really is all about. It's about hearing the stories that have wisdom in them and that have shown you know, how to live a good life or how to avoid mistakes. And if you can as a family pass down those stories, it is a truly powerful thing. So I am more proud than ever that I am working on Legacy Interviews, that I've built a great team around Legacy Interviews that so many of you have felt that sense of wealth as you receive your in interview of your loved ones. So if you're interested in having that profound feeling of knowing that you built something that would be passed down to future generations, go to Legacy Interviews dot com, click on the contact form and schedule a call with me, the one that does all of the interviews.

Vance Crowe [00:49:28] I know how important it is to me. I'll be able to translate that into an interview for your loved ones, and we'll find a way to make this something that you truly love. So Legacy Interviews dot com and schedule a call with me. And now back to the conversation with NNZP. Yeah. And the, and the hardest part about the trades is, is that you can't just send some kids to school and then two years later have 'em be a great electrician. I mean, you might know a lot about it in theory, but all of that stuff, I mean, I worked on construction things like it just takes you years and years of watching somebody else solve problems. Otherwise you've gotta learn how to do it on your own. And bringing that back, that all of this now I think is obvious to us in hindsight. You know, just how big of a, of a mistake that was. I wonder what the world looks like after our knowledge workers leverage AI for a while and, and we, we now have like a non apprenticed knowledge workers. Have you used very much ai?

Guest [00:50:38] No, we've used some and I know people in, in, in, what

Vance Crowe [00:50:42] Are you using? What, what have you personally used?

Guest [00:50:45] I've used it for solving some simple problems. I'm not deep into it, but I know people that are,

Vance Crowe [00:50:51] Man, I have to say like, for, for me, the, the, I am like a technology, like I lean totally into it, right? I'm not like, oh, I want all the leg gadgets, but I'm very open to learning about technology in the last two weeks, I would say AI has actually frightened me. Like where I actually stare off into space saying like, whoa. And, and the biggest reason it's frightened me is because it is accelerating so fast. It is unbelievable. I, I I love that the getting better. And then one of my buddies started showing me like, Hey, wait a second. You can actually create on Claude, or on another one called Notebook lm. You can create basically a person and you say, Hey, you're my marketing person. I'm gonna feed into you my website, I'm gonna feed into you all of my marketing materials. I'm gonna actually feed you every podcast that's ever been put out that talks about my material. This is everything we have now. Now you, whenever I have a question about marketing, I'm gonna come and ask it. And you have all this context. Now I'm gonna do the same thing with sales. Let me show in every single demographic, every piece of information I have here about sales. And you are going to have the highest end salesman, marketing people, whatever, all, all these people working for you,

Guest [00:52:10] Everybody else,

Vance Crowe [00:52:11] And so is everybody else. And so now you aren't going to have an advantage once everybody has it, this is just going to be the speed. But what does the world look like? I, I have, I just, it's so hard for me to wrap my mind around where where does the world go when you have radically decreased the value of knowledge work?

Guest [00:52:32] I'm, I'm gonna, I'm gonna grab a book here off my shelf and I'm gonna, I'm gonna tell you, you ever you ever seen this book?

Vance Crowe [00:52:43] I've heard of it, but I don't think I've ever read it. When Genius Failed.

Guest [00:52:47] Yep. It's the story of Rise and Fall Long-Term Capital Management. These guys built a computer model in the, in the, was it the eighties? Eighties I think eighties or nineties, I can't remember, nineties. And their PhDs, they built a computer model about the stock market and things like that. And they, they were the smartest guys in the room. These are Nobel Prize winner, a couple Nobel Prize winners. And they got, so the, the, the technology led them into such a corner that they couldn't get out of it. And that's why long-term capital management failed. If they started selling, the price would go down, which would sink their price, which would sink their whole in. So I think, and this is my concern with AI and things of this nature, is that people put so much faith in these things and everybody's gonna have it eventually, and it's going to start feeding on itself. And it's only as smart as we put into it originally. So is it like the, I've I've said, is it like the Homer Simpson, the Simpsons episode where Homer clones himself and, you know, third and fourth and fifth generation homers were dumber and dumber and dumber, right? Because it's circular, it's, it's feeding on itself. Instead of referencing a paper from a, a PhD that did the original research and knows exactly what it is, it's referencing a paper that some AI wrote from this, another AI that wrote, that actually knows the paper, blah, blah, blah. Right? And

Vance Crowe [00:54:14] Well, you're, you're hitting my point A actually. Exactly. Right. Like, and that is the same thing as we didn't think we needed tradesmen, so we didn't do 'em. So then you lost that ability and now you're losing that with knowledge work. And like, I think this is entirely possible because you are going to have generations of kids that have grown up having a fleet of knowledge workers that they could spin up at the moment's notice to get, you know, knowledge work. And then if that goes away or it ends up being a tail, you know, the snake eating its tail. I, I don't know what you do in a world where all of a sudden you've lost the ability to like think through knowledge work

Guest [00:54:55] Such as the world, right? I mean, I think we could say the same thing about going off the gold standard, right? Yeah. So, so I mean, you know, the, the unintended consequences and the second and third and in order effects are unknown. And so what will happen is completely unknown, but you can be assured that it will be absurd and you'll, and that it'll probably be worse than your thinking. There will be some things that are really good about it as well, right? I

Vance Crowe [00:55:30] Mean the i, the i the AI stuff, like, I actually really enjoy it. The other day I was driving home from, and I, I was like, I need to think through this problem and it's doing the voice to me and we're just having a conversation. By the time I was done, I had not only solved the problem, I had written the email and I had created a, a brief that I was gonna show my wife about. Like, Hey, this is how I think we should handle it. It was freaking great. It, it would've taken me hours upon hours to do that by myself if I could have done it at all.

Guest [00:55:59] Hopefully it wasn't something you were thinking of. She was how she should do something.

Vance Crowe [00:56:03] No, no. My my wife like, this is great. She's gonna love this 'cause it's gonna be like, take my wild crazy idea and create a memo about it with bullet points and outcomes. And this is gonna be able to translate what I my crazy mind into her logical mind. I see this as having very good impacts on

Guest [00:56:22] Our marriage. So it's an intermediary for you?

Vance Crowe [00:56:25] Yeah, probably.

Guest [00:56:27] Yeah. Yeah. You know, it's funny 'cause what you just described is, I guess I'm obsolete because I talk to myself in the car all the time and you know, my mom always said it's okay as long as I don't start arguing with myself, you know, about, you know, that I can't agree that, you know, on what we decide amongst the two of us that are in the car.

Vance Crowe [00:56:47] I mean, I'm all about that too. There, there is a voice inside of my own head that I don't control and I do talk to it, right? Yeah. Like

Guest [00:56:53] There's, there's, I talked to it out loud and it's funny because I'll be driving down the road and my wife will be with me and I'll be thinking about something and I'll blurt out something, you know, she's like, what? I'm like, oh no, that was my internal voice came out

Vance Crowe [00:57:08] So well, I, so the other thing that I've been using AI for is I record a voice memo of me just talking stream of conscious, and then I drop it into my stream of consciousness log, and then it transcribes the whole thing and then it starts categorizing and sorting information. And so, I mean, it's, to me, I am both horrified and terrified about the future. And I am also right there being like, this has so many benefits to me that I'm trying to find every way that I can harness it while it's still an advantage because, well,

Guest [00:57:42] It

Vance Crowe [00:57:42] Won't be around forever.

Guest [00:57:43] I see it as a, I see it as another way to make, make me obsolete because the, the smartphone made me obsolete as well because I spent a lot of time reading and, and studying different things so I could answer crazy questions, you know? And now anybody has it at their fingertips and it just makes me a little irritated that, you know, but people still ask me, my friends still ask me. It's like, well, do you know about this? Oh yeah, what would you like to know? You know,

Vance Crowe [00:58:11] I mean certainly there's things about AI that it, that they are not gonna be able to answer and the novelty just isn't there. Right. It can only create what it is seen before. It's not Yeah. What is already known. And so, and

Guest [00:58:23] It can, but it can extrapolate between things. And that's the interesting part is what will it do? How will it extrapolate an idea?

Vance Crowe [00:58:33] It's given me great feedback. So I took all of the Ag tribes reports and fed them into one project on a thing called Notebook lm. And then I, that thing has a feature. You could then ask it questions so you can chat with it. Like, tell me about the host. What questions does he ask too frequently? What are the, you know, what are the uhs and ums put in there? But you can also ask it like, what are the weaknesses of this podcast? What are the strengths? And it's given me really good feedback.

Guest [00:59:02] Good.

Vance Crowe [00:59:02] And then you can have it, if you feed it a bunch of information. So say you took a bunch of technical papers and you feed it into this notebook, lm you can have it create a podcast where there's either two hosts or one talking about the information put into a 25 minute podcast where it's distilling everything down, which to me is wild.

Guest [00:59:22] That is wild. I wonder how much nuance you lose in that. Right.

Vance Crowe [00:59:30] I had it do a podcast on my podcast, which I know a lot about. And it started bringing up guests and different things that they said throughout and things that were important. So in some ways it certainly cut out nuance, but it also brought out things that I had forgotten about myself.

Guest [00:59:47] Yeah. Okay. Interesting. I I haven't really played with it very much. I've been busy doing other things and, and I'm, I'm kinda, I, I I like to live in the real world, and I know this is the real world too, right. But my world, I'm getting old enough that I've, I've stopped worrying about some of what's going on.

Vance Crowe [01:00:06] Yeah. I am not of that age where I can stop worrying about it. 'cause I've gotta figure out, well, how do you raise your children in a world where AI is very important? How do you run a business in which, you know, any business now, there is no business that can right now definitively say, AI won't come for my job. There's like, maybe, you know, like there are certain parts of a job that they can't

Guest [01:00:30] Come from. Yeah. I, I, yeah. It's, it's, I'm, I'm sure that's true and I'm certain that it will become a tool in everyone's toolkit if, you know, it's, it is already a tool, a lot of people's toolkit. But we've been watching this stuff for, you know, decades now. I mean, I, I remember when, you know, people could get pricing together, you know, my customers would come to me with a list of all my similar parts, you know, and say, why is this one outta line with the other one? Right. I mean, and, and now this becomes so easy, right? And you have to be smarter than the person looking at your data, or they will catch you on this stuff, right? I mean, if you misprice something, you know, or something like that. And they will catch it because it's easy to catch now because the, the computing power is so high. Before you'd have to do that on a piece of paper when I started and now, you know, then you went to a spreadsheet and now it's in AI and, you know, and so Yeah, absolutely.

Vance Crowe [01:01:32] Well, I used to, you know, when I would go out and I was a representative for Monsanto, I used to say it was me versus Google when I would go give these talks. 'cause somebody could sit on their phone and have Google going, now it's even a whole different level. I mean, you're on X and somebody disagrees with what you're saying, but they go out to their own AI and have it process information and give them, you know, suddenly they, they are able to tell you about Ukrainian fifth century, you know, history. Like, where you're like, I don't, are we even having a discussion?

Guest [01:02:02] I build? I mean, there's so much nuance to history and which, which book did it come out of? And whose version of this is it? You know? And you know, who wrote, you know, what ver what, what was the bent of the writer? And you know, that's, you know, I read a lot of history as you know, and I always, my dad always told me, you know, there's, there's only one, one thing worse than, than not knowing anything about a subject is reading one book on it. Right. And that's because you have one person's point of view now. And, and so I've always tried to read two or three books on everything and try to get a different vantage point. And so AI is picking one or two and or melding multiples together. So what are you getting? I don't know what you're getting. Right. To some extent.

Vance Crowe [01:02:52] Absolutely. You know, I always say, great, it

Guest [01:02:55] Might be great

Vance Crowe [01:02:55] Anytime you're learning about a subject, you haven't learned about it until you become terrified with how much you don't know. Yeah. Like, until you hit that point where you're like, oh God, I didn't even know there was this much to know. Then you are under the Dunning Kruger effect where you're like, oh, this is so easy. It's so obvious. Absolutely. Exactly how that thing started. And AI is going to create the illusion that you know these things or that you understand it. That's, this is an interesting, I mean that's,

Guest [01:03:22] That's Mark Twain, right? It ain't what you, it ain't what you don't know that gets you in trouble. It's what you know for sure that isn't true.

Vance Crowe [01:03:31] But I, my take home message here, I think there will be flaws is that many times before I said AI was cursed, and it may still be, but it is now, it is fascinating, and it is going way, way faster than I thought it was. I

Guest [01:03:48] Agree with that. And I think it, I think it will become pervasive in, in, in society. Whether that's for good or for bad, I, I don't know. But what I, what I do know is, is that there is going to be no group of people that can control where it goes. And, you know, we can say, well, we need to control this. There's a, there's a group of people on the other side of the world that have a different view of the good life again, that have, that have, that are going to use it the way they want to use it, not the way we want them to use it. And I think we have to be really cognizant of that.

Vance Crowe [01:04:27] Well, NNZP, there is no way that AI could just replace you. So I'm glad you're around and thanks for coming on today.

Guest [01:04:35] Well, I appreciate Vance, and maybe we'll do this again sometime.