Full Interview:
Full Transcript:
Guy Benson: Joining us now is the Treasury Secretary under the Trump administration, Scott Bessent. Mr. Secretary, welcome to the show.
Sec. Scott Bessent: Good to be with you, Guy.
Guy Benson: I want to start with just a big picture assessment of the U.S. economy, because there are a lot of crosscurrents. We got a really good GDP growth number a few days ago. The jobs numbers month to month seem to bounce around from optimistic to less so. Then, of course, the inflation numbers continue to be stubborn and problematic for a lot of Americans feeling that pinch. As you look at all of the data points, what are you seeing?
Sec. Scott Bessent: Sure. And look, the GDP numbers are quite strong. Where I would take a little bit of exception with the jobs numbers is because of the deportations–some voluntary, some not voluntary–the number of jobs that the U.S. needs to create is much lower. I would say we have created 1 million private-sector jobs since this Trump administration began. Government has downsized by more than 300,000 jobs, and all those jobs are going to Americans. So there’s a lot of momentum. We are seeing a manufacturing renaissance. We are seeing construction jobs, manufacturing jobs, and we have a temporary energy supply shock. We will get to the other side of that.
What’s important for me, as someone who has been in the markets for 40 years and taught economic history, is that the inflation we’re seeing now–a substantial part of that is headline inflation. Core inflation has been down for three out of the past four months. In fact, we are seeing food prices come down; they’re below the Fed’s target of 1.8 percent. We’ve seen the biggest decreases in history in prescription drugs, down four and a half percent, and rents are down. So my message would be: we’re going to get to the other side of this Iran conflict, the world will be safer, and we will have much more energy on the other side.
Guy Benson: A couple follow-ups there. You said these are temporary price shocks. Granted, I think that’s true. I’m broadly supportive of the administration’s policy against Iran, but obviously a lot of voters are feeling that urgently. They’re frustrated, and when they hear a term like “temporary,” they ask, “Okay, what exactly does that mean?” Is there a sense of relief that’s right around the corner? Do we have to see what the president might order in his commander-in-chief capacity after the midterms? There’s been some reporting about that–what do you make of it?
Sec. Scott Bessent: Well, there are a couple of ways to address affordability. Under Biden, we hit a very high price level. Under President Trump, we have seen real wage gains–not as much as we wanted to see because of the energy price shock. And look, I can’t give away President Trump’s strategy, but we have been isolating the Iranian regime economically for the first time since they began pumping oil back in the ’40s. They have no energy on the water. So look, I think we are going to reach a situation where either the IRGC–the members of the regime with guns–turn on each other, or they will come to the table wanting to make a good deal.
Guy Benson: Operation Economic Outcast has been a very significant success so far on your watch, and when you couple that with the naval blockade and some of these other policies, the regime is being strangled. Something that strikes me is you almost never hear about that outside of a stray report or op-ed in the press. When there’s anything negative to report–or even potentially negative–they are all over it. But when the good news is indeed good for the United States, the military, and what you’re doing at Treasury, that kind of just fades into the background. So I want to make sure we’re bringing that information to this audience. Tell us about Operation Economic Outcast against the regime and how it has been successful.
Sec. Scott Bessent: Yeah, and it’s exactly as you said–it’s been a matter of sequencing. A lot of people say sanctions don’t work, or that they take years or decades. We’ve been squeezing the regime for a long time, since March of 2025, and inflation is over 100% there now. They don’t have access to dollars, and their banks are collapsing.
It really comes down to sequencing. First, there were the six weeks of kinetic activity: they have no airports left, they have no navy, and we’ve destroyed a substantial portion of their missile and drone capability. More importantly, we’ve destroyed 90% of the factories that rebuild them. Then there’s the blockade: no oil has gotten out and, crucially, they are not getting resources in.
Then, in August–I think we are on week nine now of Economic Outcast–we started the greatest economic isolation of any nation in history. I received expanded authorities across aviation, maritime, and crypto to go after anyone working with this regime. We have taken down three banks in the Gulf region: a bank in Dubai, a Turkish bank, and the international branches of the second-largest Russian bank. People know we’re serious. We’re getting great cooperation from many allies who had been a little less vigilant before. We have canceled a huge number–probably 90% to 95%–of the flights in and out of Iran. So my message to the Iranian regime is: if you love your country, congratulations, you’re stuck there. You can’t go see your sister in London, your girlfriend in Paris, or your money in Geneva.
Guy Benson: I want to come back to the issue of immigration enforcement, which might seem like a strange line of questioning for the Treasury Secretary, but you’ve connected dots that often go unacknowledged. In particular, you highlighted a case study out of San Francisco and a paper by the Federal Reserve branch there about the correlation between immigration enforcement and rent affordability. For a lot of voters, the immigration issue has fallen down a few notches in terms of urgency in polling, and the opposition party is running hard on affordability. Talk about rent, because I think that flies over a lot of people’s heads.
Sec. Scott Bessent: Yeah, so Guy, I’ll highlight two things. As you said, a recent San Francisco Fed study showed that at least 20% of the rent increases we saw during the Biden years were due to mass, unfettered immigration. It’s not a very popular statement, but it is factual: when ICE comes to a neighborhood, rents go down.
The laws of supply and demand were somehow not supposed to apply to unfettered immigration. Whatever the number is–10, 15, 20 million people who crossed the border–we did not increase the housing stock accordingly. That is a demand shock, and a demand shock without a supply response equals inflation.
On the other side of the ledger, the pro-unfettered immigration crowd claimed mass immigration doesn’t hurt working Americans’ wages. That was a lie. Whenever you have more of something, the price goes down. As you had more workers willing to work off the books, work cheaply, and work in unsafe conditions, working Americans’ wages went down. Now what we are seeing is the bottom two quintiles of working Americans experiencing wage growth faster than the median, and a big part of that is due to the success of deportations and securing the border.
Guy Benson: Another big drag on the economy–and one that is outrageous to a lot of Americans who work hard for their money only to see it confiscated by the government through taxation–is seeing that money get wasted and spent on fraud on an unprecedented scale. You were just up in Minnesota shining a spotlight on that scourge and talking about new federal efforts to crack down. Tell us about those.
Sec. Scott Bessent: Yes. The GAO reports that the amount of fraud taken from the government is $500 to $600 billion annually. That’s approximately 2% of GDP, which is shocking. If we could save that, we would be well on our way to balancing the budget.
I was out in Minnesota in January and saw firsthand the industrial-scale fraud going on there. It is systemic and endemic, and an auditor’s report noted that the Walz administration overlooked every aspect of it. Thus far, the Fraud Task Force–led by Vice President Vance alongside Justice, the FBI, Treasury, and the FTC–is actively working on this across branches of government. So far, there have been 900 months of sentences handed down, and I expect many more.
We are a high-trust society–no one is more generous than the American people–but this is a direct violation of that trust and of fiscal responsibility. When I was out there in January, it was heartbreaking. I held a roundtable with owners of children’s autism centers and parents who needed them, and the centers lacked funding because it had been stolen by fraudsters. We’re not going to tolerate it, and we are going to hold states accountable.
Guy Benson: I also read about a fraud whistleblower incentive program offering very lucrative rewards for people flagging this fraud. That could blow some of this up from within. My only concern is that these fraudsters are very clever; could they try to defraud the whistleblower program itself? How is that new effort being managed?
Sec. Scott Bessent: It’s a good question. What we are counting on is rats deserting a sinking ship. I am much less concerned about them gaming the system because the payout is 1% of what the government recovers, though we can pay an initial portion upfront. We are expecting people to step forward–much like an unattended package at an airport: if you see something, say something. Many people are fed up. As these schemes collapse, plenty of people will want to get on the right side of justice, both to collect the reward and potentially insulate themselves from charges.
Guy Benson: Moving to how you approach your job: you had a very successful career in the private sector, and now you hold this prestigious post at the top of the executive branch. Occasionally, you’ll publish a letter–to Senator Elizabeth Warren, for instance–that is pretty devastating, biting, and funny. You also had an instant classic the other day referring to the Obama presidential center as “Darth Vader’s tomb” in response to his aesthetic critiques of the White House. When do you decide to have some fun with this versus sticking to traditional, stodgy Treasury Secretary duties?
Sec. Scott Bessent: Look, I want to call out hypocrisy when I see it. Senator Warren has sent us between 100 and 150 letters. The real tragedy is that she and I share the same core goal: we don’t think the poorest Americans should pay the most for financial services. She simply favors a command-and-control approach that inevitably leads to higher costs. We believe in safe, smart, sound deregulation to increase supply–and when you create more of something, whether credit or housing, prices come down.
I have been appalled by the lack of basic knowledge in some of her letters. That’s what I was calling out. They sent correspondence revealing they didn’t know the difference between a currency swap and an outright purchase–basic Economics 101 and Bond Market 101 concepts. Senator Warren is the ranking member on Senate Banking and serves on Senate Finance, so it’s shocking–though not surprising–that legacy media won’t hold her or her staff accountable for basic errors.
As for President Obama, I’d point out that admission to “Darth Vader’s tomb”–the ugliest presidential library in history, a title I suspect it will keep–costs $30. That’s more than a meal at The Cheesecake Factory.
Guy Benson: You do seem to be something of an aficionado when it comes to The Cheesecake Factory menu. Is that one of your regular spots?
Sec. Scott Bessent: It’s right across the street from Treasury.
Guy Benson: Finally, very quickly: I had to chuckle the other day when you mentioned in an interview that you’ve been breaking the First Lady’s friends’ hearts when they ask to be set up with you and find out you’re unavailable. Have those calls dried up since you addressed it head-on?
Sec. Scott Bessent: Yeah, that was a couple of months ago. I think I’m looking a little more tired and worn down by the job now–not quite as appealing! But Guy, the hardest part of my job is keeping up with President Trump. People might think the best part is getting late-night calls from him; they always start the same way: “Scott, did I wake you up?” “No, sir, it’s 1:52 AM, I’m always up on a Tuesday.” It’s tough keeping pace with him, but it is an absolute honor to serve the American people.
Guy Benson: Given your demanding schedule and long hours, we are honored you spent some time with us today on election eve on The Guy Benson Show. Thank you so much.
Sec. Scott Bessent: Great speaking with you.
