Treasury Secretary, US Treasury
Economic Security Is National Security with Scott Bessent
After decades of sacrificing economic security for the sake of the free market, American policymakers are returning to the wisdom that economic security and national security are inextricably linked. At American Compass’s 2026 New World Gala, Treasury Secretary Scott Bessent joined Oren to explain why this shift is vital for the national interest.
They talk through how COVID didn’t create but revealed our supply chain crisis for vital resources, and what the Trump administration is doing, from pharmaceuticals to military readiness and beyond, to restore preparedness. Finally, they discuss the...
About Scott Bessent
Treasury Secretary Scott Bessent has promoted the Trump administration’s economic record, citing strong job growth and tax policies. In a June 2026 interview, he said the U.S. created 900,000 private-sector jobs since President Trump took office and described the past three months of job creation as “a blowout,” with 170,000 to 180,000 jobs per month. He attributed a manufacturing “rebirth” to tariffs and tax policy, and said core inflation had surprised on the downside at 2%. Bessent also expressed confidence that energy prices would decline once the conflict with Iran is resolved, stating that oil was already 25 to 30 percent off its peak. Bessent joined First Lady Melania Trump in June 2026 to announce “Fostering the Future” accounts, a savings and investment vehicle for foster youth. He described the accounts as part of the broader “Trump accounts” program, which provides a $1,000 seed contribution from the Treasury for every child born between January 2025 and December 2028. Bessent said that, assuming historical growth rates, the deposit could grow to at least $500,000 by retirement. He stated that the program aims to give foster children the same opportunity for asset ownership and long-term wealth building as other children, and that it would help ensure their futures are shaped by possibilities rather than circumstances. During a House Ways and Means Committee hearing, Bessent defended the administration’s tax cuts, including provisions eliminating taxes on tips, overtime, and Social Security benefits, and said 62 million Americans claimed at least one of those provisions. He also faced questions from Democratic lawmakers about the economic impact of tariffs, the IRS settlement with President Trump, and the administration’s budget deficit projections.
Transcript (33 segments)
✨ AI-enhanced transcript with speaker attribution
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Interviewer0:09
Secretary, thank you so much for making the time.
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Scott Bessent0:11
That's great. Great to be here.
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Interviewer0:14
I wanted to ask you what the free market means to you. It's a term that gets thrown around all the time on the right of center, but I think people have very different senses of what it actually is, what its strengths are, and where we need to worry about it. How do you think about it?
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Scott Bessent0:38
I'd say I'm informed by 35 or 40 years in the markets. My largest successes came in what you'd call market failures. In economics, there's equilibrium, but you never hit it; you're always moving toward or away from it. The free market can go too far and then trend back. How do you avoid a calamity? What guardrails do you put up to avoid market revulsion like in '08 and '09? Conventional wisdom is right 90% of the time in markets, but it's the 10% where things break. A lot of free market people forget we're in a political economy. I gave a speech at the Reagan Library about 'While America Slept' — for 25 years we had a slavish devotion to free markets that would recalibrate automatically, but they didn't. There was cheating. That's what's been great about President Trump: in a political economy, voting is what recalibrates. The market, or any complex system, can go non-linear and produce a cataclysmic outcome. We pretended the market is free when it's not. The Federal Reserve put leads to risk-taking; that's not a free market. Housing isn't a free market. Social sciences are like biology, not physics; markets involve emotions and visceral reactions. Often there's a mutation where everyone thinks it's a free market but it's not, like housing in 2005-2006 backed by Fannie and Freddie. So a lot of it is the illusion of free markets. You need to see what's really going on underneath the hood.
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Interviewer5:38
That's a helpful distinction between two problems with markets: the 10% non-linear extreme case, and the everyday market where you slice away layers — housing isn't free, healthcare isn't, education isn't.
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Scott Bessent6:03
Education has its own inflation index, 2-3% above CPI. Compounded over time, it eats the economy. On 'Why America Slept': I based it on Churchill's 'Why England Slept'. We brought China into the global trading system thinking they'd become like us, but Xi Jinping was different. We let consumption become more important than production. We don't need to reshore fireworks or whoopee cushions, but there are things where cheap and efficient is not enough. We were lulled into thinking prosperity doesn't require security. National security is economic security. COVID didn't cause supply chain problems, it highlighted them. We believe there are five to eight essential industries to reshore, and we're sprinting: semiconductors, critical minerals, precursor chemicals for amoxicillin, all from China. Our strategic pharmaceutical reserve is only four weeks. What would we do in a kinetic battle with no medicine? We've neglected this too long.
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Interviewer10:56
Your Reagan Library speech was fantastic. My favorite line: 'Manufacturing is not just an output on a balance sheet; it is a reservoir of practical capability.' That captures what we're trying to bring back. In critical industries, we think of outputs like chips and drugs, but also capabilities. I don't know the details of whoopee cushion or fireworks manufacturing, but...
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Scott Bessent11:40
And you don't need to.
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Interviewer11:41
And I don't need to.
I didn't think I needed to know about critical minerals. Are capabilities just synonymous with those critical outputs, or are there capabilities we need to build here not because the product is high value today, but because if we needed to shift to a war footing, maybe the whoopee cushion factory also makes tourniquets?
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Scott Bessent12:14
Maybe. It's about preparedness and skilled workers. The people who can make a latte may not run a rivet machine. Jeff Bezos attributed his success to growing up on a ranch, tinkering with his grandfather. We came to think we could separate research from production, but you can't. That's why China can't replicate jet engines despite taking them apart. Boeing is a case study: they separated corporate from manufacturing, moved to Chicago, then Washington, bought back stock. Senior defense leaders know little about manufacturing. In the UK, the PLC/operating company split contributed to the loss of their industrial base, along with bad tax policy. We've got to admit when we were wrong. Ronald Reagan said a great country can admit its mistakes.
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Interviewer15:43
Yeah.
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Scott Bessent15:43
Doesn't have an industrial base anymore, that and some bad tax policy. So I do think it's very important. We've got to admit when we were wrong. That was the topic of my speech — Ronald Reagan said a great country can admit its mistakes.
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Interviewer16:04
You only gave Ronald Reagan credit for saying that great countries can admit their mistakes. We're clearly doing that now. The Boeing example is fascinating because the problem wasn't being undercut by China; something else is going on. It seems to be a prevalent phenomenon in the US and UK. Is there a policy response? Ultimately it must come down to incentives. What do we change to move back toward making things and having management where production is, rather than extracting short-term cash?
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Scott Bessent17:02
President Trump issued an executive order here; the DOW is going to give you production targets, and if you don't meet them you can't make more than $5 million. So there's a lot of incentive there.
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Interviewer17:18
That's great for defense contractors. Does it apply more broadly?
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Scott Bessent17:23
More broadly, there are incredible companies like 3M and Honeywell that constantly innovate. I'll tell a story: early in the administration, I walked into a meeting with President Trump and Bobby Kennedy and seven pharmaceutical executives. Trump asked why drug prices are so much higher in the US. They gave excuses about PBMs and pensions. Trump said no, he had a friend who went to London for a fat shot that costs 10% of the US price. He pushed them to bring prices down and make other countries pay more. That's happening now. It took one executive order. If we think about the Strait of Hormuz closure, or the Strait of Taiwan, we need to bring semiconductors here as quickly as possible.
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Interviewer20:45
You've mentioned the production versus consumption tension. Your Reagan Library speech hit it well. I always go back to your comment after Liberation Day: 'The American dream is not cheap stuff.'
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Scott Bessent21:06
I got into a back and forth with Mike Pence who said it is. I said, 'Let them eat flat screens.' It's not a great...
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Interviewer21:18
This is good. I promised I wasn't going to say anything about Mike Pence tonight.
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Scott Bessent21:21
Well, since he's out with his book...
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Interviewer21:23
Is out with his book. Picking up now.
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Scott Bessent21:26
Yep.
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Interviewer21:26
Don't have to tell them what you do with it once they've picked it up. The flip side is we're still an incredibly consumer-oriented culture with affordability challenges. You're right on the substance and the need for a political shift. How do we make that point politically salable?
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Scott Bessent24:09
I agree. We should offer a way forward that's achievable. We have a gambling society. I'm from South Carolina; I get a Dr. Pepper for breakfast. I see blue-collar workers playing the lottery, thinking it's their moonshot. They've lost hope. The lottery is taxation without representation; states with worst economic outcomes have highest lottery participation. We need to make people understand the system is not rigged — work hard, do well, you can have a comfortable life. That's why we're implementing Trump accounts at Treasury. 38% of Americans have no equity market exposure. I was a kid from South Carolina who knew something bad happened on Wall Street in 1929. We need to show people the stock market going up is good for them. Liquidity is going into building; we've created 90,000 construction jobs. At my hearings tomorrow, I'll say those turn into manufacturing jobs. We've got to get people back into the system. The Trump accounts will be game-changers for financial literacy, making compounding visible on your phone.
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Interviewer28:08
So where do we go from here? What's the next step for conservative economics? The president you've moved the ball tremendously. Is it in a stable place? Are there key elements you still want to push?
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Scott Bessent28:33
There are many things we should be doing. Just reshoring those five to eight industries will create a boom. We're overemphasizing college — my roommate's son is in a United Airlines pilot training program, making $300,000 in five years with no debt. At Treasury, we're working on the student loan portfolio, moving deliberately to fix it. I coined 'parallel prosperity' during the campaign. Wall Street has done great, Main Street has gotten squeezed. Both can do well, but Main Street needs a catch-up. The Wall Street Journal called me a closet populist. I got out of college in 1984 and saw Wall Street eat everything through financialization. We don't need to deflate the financial bubble, just let everything else catch up. Now, venture capital is investing in advanced manufacturing like Divergent, a 3D printing company. The FCC banned Chinese routers and drones, giving a market signal, and now many new router and drone companies have emerged. It's about giving a market signal without too much protectionism that leads to third-rate domestic products.
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Interviewer33:27
It's truly extraordinary to have a Treasury Secretary in a Republican administration talking this way. We are very lucky to have you doing the work you're doing.
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Scott Bessent33:40
I still believe in the market as the greatest way to create national wealth, but we're in an adjustment period. Main Street can do great. Elizabeth Warren said banks would go under, but Dodd-Frank put 45% of community banks under — big banks too big to fail, small banks too small to succeed. This year alone, there are 18 new bank licenses. The system works, it reboots, and President Trump has done a reboot. It's an honor to be part of it.
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Interviewer34:42
Well, it's an honor to have you here. Really appreciate you making the time. Please join me in thanking Secretary Scott Bessent.
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Scott Bessent34:50
Thank you.
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Interviewer34:52
This is really cool. Thank you.
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Scott Bessent34:53
Thank you very much.