americans with no equities

Sitting down with Mike Rowe at the Ronald Reagan Presidential Library, Treasury Secretary Scott Bessent covers an enormous amount of ground in 40 minutes: why America “printed away” its sovereignty and industrial capacity for 25 years, the AI race with China he says the United States cannot lose, the new Trump Accounts that seed every eligible newborn with $1,000 of index-fund exposure, and the core tension he frames as efficiency versus resiliency. The full conversation is episode 494 of The Way I Heard It, recorded the day Bessent delivered his “While America Slept” keynote at the Reagan Library.

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Bessent argues that decades of worshiping efficiency hollowed out American production of medicines, semiconductors, steel, and critical minerals, and that the administration is racing to reshore those single points of failure before a “point of no return.” He pitches the Trump Accounts as the most important government benefit for young people since the GI Bill, a financial literacy engine for the 38% of American households that own no equities. On AI, he claims the US is roughly a year ahead of China with compute share heading toward 80%, sees no AI job losses yet, and says the labs have done a terrible job explaining the technology. Rowe pushes on workforce anxiety, data centers, housing, the trades, and the difference between innovation and imitation, and Bessent closes with his own rags-to-Treasury story and one core piece of financial advice: gauge your risk, respect compounding, and never bet against America.

Thoughts

The real thesis of this conversation is not AI or taxes, it is the efficiency-versus-resiliency trade. Bessent’s cholesterol analogy is the sharpest framing a Treasury secretary has given for industrial policy in years: optimizing the bottom line quietly accumulates systemic risk the way red meat quietly builds plaque, and by the time the number shows up on a chart you are already sick. That is a risk manager’s argument, not a protectionist’s, which makes sense coming from someone who spent three decades running money on the contrarian side of consensus. Whether the policy execution matches the diagnosis is another question, but the diagnosis itself (95% of rare earth magnets and 90% of pharmaceutical precursor chemicals sourced from a strategic rival) is hard to argue with.

The AI segment deserves scrutiny precisely because it is so confident. Bessent asserts the US is about a year ahead of China, that American compute share is heading from roughly 60% to 80%, and that “we’ve seen no job loss from AI yet.” The first two claims are strategic estimates nobody outside classified briefings can verify, and the third is already contested by entry-level hiring data in several white-collar sectors. His historical analogies (the lantern-carriers walking in front of early cars, the Lotus spreadsheet panic that ended with bookkeeper demand going through the roof) are genuinely useful priors, but the interesting tell is his admission that the people building AI “have done a terrible job explaining it.” When the government’s chief economic officer says the industry’s biggest problem is communication, and Rowe counters that 75% of the country is uneasy, the gap between elite optimism and public anxiety is the story.

The Trump Accounts are the most concrete thing in the episode and the most underrated as a behavioral experiment. The mechanics matter less than the psychology Bessent is betting on: a kid who can watch a real account compound on a phone becomes a shareholder in temperament long before they are one in size. Rowe lands the best observation of the whole exchange when he points at the stock ticker in the corner of every news broadcast and notes that for the 30 to 40% of Americans with no market exposure, that ticker is a daily reminder that the game is being played without them. Turning that resentment engine into an ownership engine is a legitimately big idea, whatever one thinks of the branding. The honest caveat Bessent himself supplies: financial literacy has two sides, making money and managing debt, and the buy-now-pay-later economy is teaching the second lesson the hard way.

The most intellectually interesting thread is Rowe’s innovation-versus-imitation question. Bessent gives the standard answer (innovation wins over the long run, Coca-Cola is still number one), but Rowe’s counterpoint is better: the satellite founder sitting nearby will succeed or fail on his ability to imitate himself perfectly, over and over. That is the unglamorous truth about manufacturing renaissance rhetoric. Reshoring is not an invention problem, it is a replication problem, and replication is exactly the muscle (process knowledge, skilled trades, factory discipline) that Bessent admits America let atrophy. The episode quietly makes Rowe’s decades-long workforce argument for him: you cannot win an innovation race without an army of people who are excellent at repetition.

Key Takeaways

Bessent was at the Reagan Library to deliver a keynote titled “While America Slept,” arguing the US “printed away” its sovereignty and industrial capacity for roughly 25 years and is now bringing both back.
The title is a deliberate nod to Winston Churchill’s While England Slept, which chronicled Britain’s unpreparedness for Nazi rearmament; Bessent’s parallel is America’s unpreparedness for dependence on non-allies.
He believes there was a “point of no return” approaching, past which the industrial base would have been too big a project to rebuild.
His accountability line is explicit: if the administration leaves in January 2029 without accomplishing the goals in that speech, “we will have failed.”
On market anxiety, Bessent says the market is not rising on bad news; the quality of the news itself is bad, with opinion now routinely presented as news.
He points to egg prices down roughly 90% from their spike and a presidential post listing 12 major grocery items with falling prices, while conceding beef will stay tough due to a disease in the Mexican cattle supply and a difficult beef cycle.
His investment career (about three and a half decades) was built on contrarianism: looking at the other side of consensus, thinking in the medium and long term, and remembering “this too shall pass.”
The Working Families Tax Cut (the One Big Beautiful Bill) made the tax cuts permanent, ending what he calls “student body left, student body right” policy whiplash.
Businesses of any size can fully deduct capital expenditures, and factories can be 100% deducted from taxes for the next five years.
The four signature consumer policies: no tax on tips, no tax on overtime, reduced taxes on Social Security (85% of seniors pay none), and deductibility of interest on American-made cars.
Tax refunds were the largest ever, up 11% year over year.
The US is the number one energy producer in the world, but California has chosen what Bessent calls energy poverty: it is the only state dependent on foreign imports, bringing in roughly 40% of its energy.
One Californian leaves the state every two minutes, which Bessent reads as voting with their feet against one-party governance; he recalls Jerry Brown comparing Democratic trifecta control to “running China.”
Losing production means losing both security and knowledge: people who work with their hands and understand manufacturing process can immediately pivot to war production in a conflict, and that muscle disappeared with the factories.
The manufacturing renaissance shows up first as a construction boom; those construction jobs convert into manufacturing jobs, with pharma reshoring, auto supply chains returning, and Arizona positioned as the semiconductor capital of America and eventually the world.
Rowe’s central concern: creating jobs is different from having a workforce that is skilled, willing, and enthusiastic, and pushing those two together is the actual job. His foundation is now working with the Department of War on recruiting for hundreds of thousands of defense industrial base jobs.
Bessent’s answer to workforce apathy is legitimacy: people came to believe the system was rigged, and the fix is demonstrating that hard work and good decisions still buy the American dream, with good-paying jobs waiting on the other side.
Trump Accounts are open to any child under 18 at trumpaccounts.gov; children born during the current presidential term receive a $1,000 Treasury seed investment.
Families can contribute up to $5,000 per year, employers can add up to $1,000 for employees’ children, and about 20 states plan to contribute; Susan and Michael Dell donated $6.25 billion, working out to roughly $250 per registered account.
The money sits in low-cost index funds and compounds for 18 years, after which it can fund a business, a home down payment, or education, or roll tax-free into a retirement account and keep compounding.
Bessent calls the accounts the most important government benefit for young people since the GI Bill.
38% of American households own no equities at all; Bessent analogizes this to food deserts, calling them “financial service deserts” where people have no access to, and no knowledge of, ownership vehicles.
Treasury has built five or six financial literacy modules for different age groups, betting the accounts become a real-time, on-your-phone financial education experiment.
Even non-shareholders benefit from a rising market, he argues: in the first Trump term the bottom 50% of households gained more net worth than the top 10%, and hourly workers outgained supervisory workers.
On housing: low locked-in mortgage rates are freezing inventory, a bipartisan bill aims to push institutional investors out of residential housing (only 3% nationally but 20 to 30% in growth markets like Atlanta and the Texas sunbelt), and Treasury is working with builders on first-time buyer schemes.
Home Depot CEO Ted Decker reckons housing represents something like $50 trillion of the economy, which is why Rowe frames renters as locked out of the American dream’s main compounding asset.
Rare earths are not actually rare, but the US lost the processing: the largest rare earth magnet company was American until China bought it, moved it, and now exports back to us; 95% of rare earth magnets come from China, and MRI machines use more of them than almost anything.
The administration keeps a list of supply chain single points of failure, is standing up domestic processing facilities, planning controls against Chinese predatory pricing, and recruiting allies (Japan, Canada, Europe, Australia, South Korea) into a sovereignty coalition.
The stat Bessent says should freak everyone out: 90% of the precursor chemicals for American medicines, including amoxicillin, are made in China.
His efficiency-versus-resiliency analogy: pure efficiency is like eating nothing but red meat, the bottom line looks strong while cholesterol silently accumulates; ignoring resiliency is a silent killer.
Rowe quotes Aldous Huxley: the greatest threat to freedom is total anarchy, the second greatest is total efficiency. Bessent liked it enough to steal it.
On AI anxiety (Rowe estimates 75% of the country is uneasy, citing Larry Fink’s $10 trillion infrastructure buildout figure), Bessent answers as an economic historian: every transformative technology, from cars to Google, triggered the same fear, and 20% of today’s jobs did not exist in 2000.
He is most optimistic about AI for small business: ventures that used to need 10 people to start can now start with one or two, letting small business compete with big business.
He claims no AI job losses so far, citing a large credit card company that moved workers from collections to its travel department rather than cutting them.
His Lotus spreadsheet story is the historical anchor: everyone predicted the death of bookkeepers in 1984, and instead demand went through the roof because bookkeeping got cheap.
Bessent says he runs much of the administration’s AI effort, framing it as an innovation race with China the US “just cannot lose,” while calibrating the right equilibrium between innovation and safety; he says the AI labs are cooperating and want to be part of the solution.
He estimates the US is about a year ahead of China in AI and that American compute share, once 50 to 60% of the world’s, will soon reach 80%, an “incredible national advantage.”
Rowe’s counterweight: AI is like a firearm, capable of extraordinary virtue and extraordinary mischief, and nobody yet has their head around how to wield it or who ought to have it.
On innovation versus imitation, Bessent picks innovation over the long run (you cannot steal your way to the top; Coca-Cola is still number one despite knockoffs), while Rowe argues that scaled self-imitation, doing the same thing perfectly over and over, is its own miracle, citing Apex’s mass-produced satellites.
Bessent’s origin story: a 250-year-old South Carolina family that hit financial trouble, first job at nine busing tables and renting beach umbrellas in Myrtle Beach, saving paychecks and spending tips, which he says is why he likes no tax on tips.
His market philosophy was the “reverse commute”: asking what everybody believes that could be wrong, and accepting being too early, like a critical minerals stock he held from 2009 until it went bankrupt in 2015.
His one core financial truth for Americans: gauge your personal risk level (the young should take more risk), never get out over your skis, respect long-term compounding, keep a rainy day cushion, and neither panic at the bottom nor get euphoric at the top. It is a very long game.

Detailed Summary

The Reagan Library and “While America Slept”

The conversation opens with Bessent visibly energized by the venue. He met Ronald Reagan at 18 near the Yale campus, shook his hand, and cast his first presidential vote for him. He is at the library to deliver a keynote called “While America Slept,” a title borrowed from Churchill’s survey of British unpreparedness in the 1930s. His argument: for about 25 years America printed away its sovereignty and industrial capacity, becoming a country that no longer produces its own medicines, semiconductors, steel, or critical minerals, and the administration is racing to reverse that before it becomes too big a project to bring back. He also recounts the previous day’s White House press conference, where reporters who wanted to be called on had to address him as Dr. Bessent, a joke born of a fresh honorary PhD from the University of South Carolina.

Anxiety, Bad News, and the Case for Certainty

Rowe describes his audience as concerned about AI, the market, and being out of the market. Bessent’s diagnosis is that the news itself is low quality, with opinion presented as news, and that his own asymmetric information (on the Iran conflict, for instance) looks nothing like the front pages. His prescription is certainty: permanent tax cuts through the Working Families Tax Cut, full expensing of capital investment, 100% factory deductibility for five years, no tax on tips or overtime, reduced Social Security taxation, interest deductibility on American-made cars, and record tax refunds up 11%. He touts falling grocery prices (eggs down 90% from the panic) while conceding beef will remain stubborn. On energy, the US is the world’s top producer, while California, importing 40% of its energy, has chosen energy poverty, and residents are leaving at a rate of one every two minutes.

Workforce, the Trades, and the Manufacturing Renaissance

Rowe raises his signature issue: reinvigorating the trades, including new work between his foundation and the Department of War on hundreds of thousands of defense industrial base jobs. Bessent frames deindustrialization as a double loss, security and knowledge. Factory workers carry process knowledge that converts directly to military production in a conflict. He rejects the criticism that manufacturing employment has not surged yet: the renaissance shows up first as a construction boom, and construction jobs become manufacturing jobs as pharma reshores, auto supply chains return, and Arizona builds toward being the semiconductor capital of the world. To Rowe’s sharper question, whether the workforce is willing and skilled enough to meet the opportunity, Bessent answers that people stopped believing the system works for them, and the job is proving that hard work and good decisions still purchase the American dream.

Trump Accounts and the Financial Literacy Bet

The centerpiece policy discussion is the Trump Accounts. Every child born during the current term gets a $1,000 Treasury seed; any child under 18 can open an account at trumpaccounts.gov. Families can add up to $5,000 a year, employers up to $1,000, roughly 20 states plan to contribute, and the Dells’ $6.25 billion gift adds about $250 per registered account. The money compounds in low-cost index funds for 18 years, then funds a business, home, or education, or rolls tax-free into retirement. Bessent calls it the biggest youth benefit since the GI Bill and pairs it with a striking statistic: 38% of American households own no equities, living in what he calls financial service deserts. Rowe connects it to the stock ticker on every broadcast, a daily taunt to the 30 or 40% with no stake in it. Bessent adds the sobering half of financial literacy: managing debt, from freshman-lawn credit cards to buy-now-pay-later schemes that get people sideways fast.

Housing and the Locked-Up Market

Citing Home Depot CEO Ted Decker’s estimate that housing represents something like $50 trillion of the economy, Rowe asks how renters can feel like participants in the American dream. Bessent points to the lock-in effect of ultra-low mortgages freezing inventory, a bipartisan bill to push institutional investors out of residential housing (a small national share but 20 to 30% of hot growth markets like Atlanta and Texas), and ongoing work with builders on first-time buyer programs.

Rare Earths, China, and the Efficiency Trap

Bessent makes supply chain risk visceral: rare earth magnets are in every iPhone and nothing uses more of them than an MRI machine, yet 95% come from China, which bought America’s largest magnet maker and moved it offshore. Rare earths are not rare; processing is the chokepoint, so the administration is standing up domestic processing, preparing defenses against Chinese predatory pricing, and enlisting allies from Japan to Australia. The number he says should frighten everyone: 90% of pharmaceutical precursor chemicals, including the amoxicillin every parent has given a child, are made in China. His summary of how it happened doubles as the episode’s thesis: America worshiped efficiency and gave up resiliency, wanted consumption and forgot production. Rowe answers with Huxley’s line about total efficiency being the second greatest threat to freedom, and Bessent extends it with his cholesterol analogy: unmeasured risk accumulating silently behind a healthy-looking bottom line.

AI: The Race America Cannot Lose

Rowe channels public unease: a $10 trillion data center buildout (citing BlackRock’s Larry Fink), a race with China nobody chose, no visible finish line. Bessent, calling himself “mercifully not an economist” but an economic historian, reaches for precedent: people once walked in front of automobiles with lanterns, and 20% of today’s jobs did not exist in 2000. Google and spellcheck are already AI. He is most bullish on AI for small business, letting one or two people do what took ten, and reports no AI job losses yet, citing a credit card company that moved collections staff to travel. He says he runs much of the administration’s AI effort, describes an innovation race with China that cannot be lost (the leverage a leading China would hold is “unconscionable”), and puts the US about a year ahead with compute share heading toward 80%. The labs’ great failure, he says, is education; Rowe’s rejoinder is the firearm analogy, extraordinary virtue and extraordinary mischief, with nobody sure yet who ought to wield it. Bessent’s own AI moment: a Zoom call where someone’s AI agent attended and produced a beautiful six-page report three days later, from a founder two years into business.

Innovation vs. Imitation, and Bessent’s Reverse Commute

Asked whether innovation or imitation matters more, Bessent takes innovation over the long run: you cannot steal your way to leadership, and Coca-Cola survives every knockoff. Rowe complicates it: Coca-Cola’s real miracle is perfect self-imitation at scale, and the satellite founder they both just met (Apex) will win by imitating himself flawlessly. Bessent concedes the economics: mass production drops prices, usage rises, and imitation sparks competition. His Lotus story caps it: the 1984 spreadsheet panic ended with bookkeeper demand exploding because bookkeeping got cheap. The personal history follows: a formerly prosperous 250-year South Carolina family fallen on hard times, a first W-2 at age nine busing tables and setting beach umbrellas in Myrtle Beach, saving paychecks and spending tips. His career edge was the reverse commute, betting against consensus and sometimes being years too early, like a critical minerals position that went bankrupt in 2015, a decade before the theme became national policy. He closes on Ben Franklin (“a republic, if you can keep it”), the self-regulating pendulum of American democracy, and the Carter malaise giving way to Reagan’s reignited national spirit, a cycle he believes is repeating: America has awakened. Not woke, Rowe notes. Awakened, Bessent agrees, and full speed ahead.

Notable Quotes

“We printed away our sovereignty and our industrial capacity for about 25 years. We’re bringing that back.”
Scott Bessent, on the thesis of his “While America Slept” keynote at the Reagan Library

“We worshiped efficiency and gave up resiliency. We wanted consumption, but we didn’t focus on production.”
Scott Bessent, on how 90% of pharmaceutical precursor chemicals ended up made in China

“We are the AI superpower. We are ahead of China. I think we’re about a year ahead. I think we will continue moving ahead.”
Scott Bessent, on America’s position in the AI race

“There’s an innovation race between us and the Chinese that we just cannot lose.”
Scott Bessent, who says he runs much of the administration’s AI effort

“I think of it like a firearm. It can be used for extraordinary virtue and extraordinary mischief.”
Mike Rowe, offering his framing of AI back to the Treasury Secretary

“Demand for bookkeepers went through the roof because it was so cheap to hire a bookkeeper.”
Scott Bessent, on what the 1984 spreadsheet panic actually did to jobs

“You don’t want to panic at the bottom. You don’t want to be euphoric at the top. The main thing is it’s a long game. It’s a very very long game.”
Scott Bessent, giving his one core financial truth for the average American

“The market might go up, it might go down, might stay the same, but over time it goes up. As Warren Buffett said, never bet against America.”
Scott Bessent, on long-term compounding

“We believe if we leave in January 2029 and we haven’t accomplished a lot of the goals that I talked about in my speech today, we will have failed.”
Scott Bessent, setting the administration’s own bar for success

Watch the full conversation between Mike Rowe and Scott Bessent here on YouTube.

Tag: americans with no equities

Scott Bessent Tells Mike Rowe Why America Needs More Than AI: The China Race, Trump Accounts, Reshoring, and Efficiency vs. Resiliency (The Way I Heard It #494)