Trump and Bloomberg's John Micklethwaite get into a heated exchange at the Chicago Economic Club about the economy and what it means for the future of the country. John Lonsky, founder and president of the Lonskys Group, joins us to talk about it.
00:03:36.340You've been wrong all your life on this stuff.
00:03:40.080John Lonsky, Trump taking his latest victim.
00:03:43.800I don't I can't seem to understand, John, why these people do this to themselves.
00:03:49.240They're nowhere near as smart as President Trump or the advisors he had around him.
00:03:53.680President, I can understand if we're back in 2015, John, where President Trump had no economic record to run on.
00:04:00.040But we saw what President Trump did in four short years.
00:04:03.560I mean, and some people say it's something short of just a miracle.
00:04:08.260Your thoughts on that brief exchange between the Bloomberg News Editor-in-Chief, John Minklethwaite, and President Trump?
00:04:15.480Well, the Bloomberg editor, I think, overlooked the importance of deregulation and tax cuts to facilitating rapid economic growth without faster price inflation.
00:04:35.000And in fact, if Trump had maintained the presidency following the 2020 election, we would be in much better shape today.
00:04:45.740We would have would have had a continuation of his policies that were being guided by a team that I consider to be significantly brighter than Team Biden or Team Harris.
00:05:03.180And we might well be looking at solid economic growth without a budget deficit that is now just over six percent of GDP and without rapid price inflation.
00:05:17.020You know, it's interesting, John, is this Nimrod, John Minklethwaite.
00:05:24.620He wants to talk about spending money.
00:05:27.400He didn't bring up the Green New Deal, which would have dumped trillions and trillions of dollars of wasteful spending.
00:05:32.720That would have absolutely done nothing.
00:05:34.880The money I think President Trump has touted that he will will cut on Americans is money that will be made back through tariffs, through people spending more money.
00:05:46.000What people don't understand is if it's very simple and you know this better than anybody, John, and you can attest to it and give me your thoughts on after.
00:05:53.000But if people have more money in their pockets and it's a stable economy, right, because that's a very key factor.
00:05:59.920It's a stable economy where inflation isn't rampant.
00:06:02.820If people have extra money in their pockets, John, they're going to go out and they're going to buy that car that they wanted.
00:06:07.580They're going to go out and they're going to go shopping.
00:06:09.280They're going to your wife's going to buy that pocketbook.
00:06:11.500She wanted the kids are going to go out and they're going to get that new baseball mitt,
00:13:43.060Let's face it, China's biggest customer is the American consumer.
00:13:48.140And what you don't want to be doing is pointing a gun at the head of your best consumer, which China appears to be doing right now.
00:13:57.280So perhaps through the skillful negotiations pertaining to tariffs, we could help China lessen its degree of belligerence out of the realization that China would be doing itself a lot of harm if it went ahead and shut off this very important market for its exports.
00:14:24.200Right now, the Chinese domestic economy is really hurting.
00:14:28.660And the only perhaps bright light in the Chinese economy, as it was in the past, is exports.
00:14:35.480And if you take that away from them, they'll be in big trouble.
00:14:39.560And I think that once he assumes a presidency, Trump should have a lot of power when negotiating with China over tariffs.
00:14:49.160John, the old saying, kick the dog while they're down, I think applies here more than any, because the truth of the matter is nobody holds China accountable for anything they've done to us since, I guess, maybe the early 2000s of Belt and Road Initiative, which we let them do.
00:15:04.740They unleashed COVID on the world, killed over a million Americans, millions around this world, got away with it, no repercussions from the Biden administration.
00:15:14.520I do think if Trump was to return to office in January of 2021, he would have probably hit them with more tariffs as retribution for what they did to this country, because I think it's more than apparent they released it on the world, not by accident.
00:15:27.220But they get away with everything, right? We're letting them go now. Their economy's hurting. We should be hitting them now where it really hurts.
00:15:34.680We shouldn't have to wait for President Trump to come back in on November 5th or sworn back in on January to hit them where they hurt.
00:15:41.280Biden should be crippling these people for what they've done to us.
00:15:45.320John, not only on the COVID side, but on the economic side, the fentanyl side, what they're shipping into our country, fentanyl, killing hundreds of thousands of people a year with fentanyl.
00:15:54.080We let them get away with it. But this guy, I can't get over it, this Bloomberg News editor-in-chief, thought he knew about the tariffs.
00:16:02.580Take a listen to President Trump, take him to town on tariffs, because he's one of the savants, this fellow from Bloomberg. Take a listen.
00:16:10.300You're also talking about 10, 20% tariffs on the rest of the world. That is going to have a serious effect on the overall economy.
00:16:17.020And yes, you're going to find some people who would gain from individual tariffs. The overall effect could be massive.
00:16:23.380I agree. I agree. It's going to have a massive effect, positive effect. It's going to be a positive, not a negative.
00:16:29.540Let me just tell you. No, no, let me tell you. I know how committed you are to this.
00:16:33.540And it must be hard for you to spend 25 years talking about tariffs as being negative and then have somebody explain to you that you're totally wrong.
00:16:41.320It'll have a negative. It will have. I'll go a step further.
00:16:45.540If you don't do this, this country has no chance.
00:16:48.70040 million jobs is a lot of jobs to rely on trade.
00:16:52.540Those are 40 million jobs in America that rely on trade.
00:16:57.100Are you ready? John Deere, a great company, they announced about a year ago they're going to build big plants outside of the United States, right?
00:17:05.600They're going to build them in Mexico.
00:17:06.900And you threatened the tariffs and they stopped.
00:17:08.900That's right. I said, if John Deere builds those plants and not selling anything into the United States, they just announced yesterday they're probably not going to build the plants, OK?
00:17:25.780The simple, simple thing, there's only tariffs on imports, John.
00:17:30.700The people who are making things here in America and employing Americans are going to pay the regular corporate tax that every other corporation in America pays,
00:17:38.220which President Trump gave a massive break to in order for these companies to stay and come back to America, further stimulating an economy, further stimulating jobs and helping out the American people.
00:17:49.360So it's just mind-blowing to me, John, that these people on the left are so deranged that they're willing to go on national television and lie.
00:17:59.520Can you tell me one negative effect that the Trump tariffs had on this country, John?
00:18:03.780Well, we don't know of any quite yet, can we?
00:18:06.980We don't know of any whatsoever, and inflation remained low.
00:18:10.300I mean, inflation was less than 2 percent even prior to COVID and, of course, much less than 2 percent when Trump left office.
00:18:17.980What we don't want to overlook is that when we talk about a 20 percent tariff, we're not stating that the prices of imported goods will rise by the whole 20 percent.
00:18:29.720Let's not forget that a lot of that tariff will be absorbed by the importer, by whoever is bringing that good into the United States,
00:18:40.320and thus the price increase could be considerably less than 20 percent.
00:18:45.220Still, you've got to be careful with tariffs.
00:19:31.700And I think you'll agree with me on this is that where Trump applied the tariffs, they were very concentrated and they worked.
00:19:40.080We brought in money, John, that we never seen brought into this country.
00:19:42.880The other thing that people don't miss is President Trump says he's going to put the tariffs on.
00:19:48.320If you own a company, John, and you're down in Mexico and I tell you, you know, it may cost up to 50 percent for you to come across the border.
00:19:55.040There's no doubt that you're going to come back to America.
00:19:57.280So I don't even think in most cases the tariffs will be necessary.
00:20:02.020It's it's a bargaining tool that President Trump very smartly uses as a New York businessman, you know, that will try to get these companies.
00:20:11.140He did it with carrier air conditioning.
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00:20:59.880They've been part of this cancel culture, so they want to pass savings directly on to you.
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00:21:07.180When Mike started MyPillow, it was just a one problem, one solution company.
00:21:11.100Well, since then, with the help of his dedicated employees, they now have hundreds of products some of you may not even know about.
00:21:17.800To get the word out, they're having a $25 extravaganza.
00:21:21.320Two-pack multi-use MyPillows, just $25.
00:22:01.220We're talking with John Lonsky of the Lonsky Group, a brilliant economist.
00:22:04.420And, John, we were talking before we went to break about China.
00:22:07.300And, you know, the big issue that a lot of people miss, you know, above the surface is the national security aspect of it.
00:22:15.060We go over to China, and I use Elon Musk.
00:22:17.100I love Elon Musk, but I use him as an example all the time.
00:22:20.180He's over there building the batteries for his cars.
00:22:24.200How much trouble are we in as a country, John, that we have Apple, Tesla, 90% of our pharmaceuticals being made overseas, as you had mentioned before?
00:22:34.700How much trouble are we in as a country?
00:22:38.760I mean, I'm thinking about these critical metals for the development of weapons in the defense industry.
00:22:45.040You have to have access to those metals.
00:22:46.960But right now, a lot of those metals are found in China or they're found in South America.
00:22:53.740But the companies that now produce these metals in South America are owned by the Chinese.
00:23:01.340So we have to proceed with a lot of caution in this manner because of geopolitical risk that could really become amplified if we do have a conflict with China.
00:23:15.420I think I want to know, too, and I think this is important.
00:23:17.500You could always make a strong case for tariffs when there is the very real danger that a low-cost producer overseas may decide to dump its products on the U.S. market.
00:23:32.140Electric vehicles right now constitute a prime example of this threat.
00:23:37.660Supposedly, China has more than a million electric vehicles that it cannot sell.
00:23:44.900And China would love to go ahead and export these EVs to the United States at prices that would be so low that it would lead to an immediate shutdown of EV production facilities in the United States, Tesla, as well as at other companies.
00:24:03.620So, you know, how can you say that there is no need for tariffs when, indeed, there is a strong argument to be made that without tariffs, your developing industries would have no future whatsoever?
00:24:22.260You know, the problem is me and you are above the surface.
00:24:25.040These people who are running this country, these people who are running Bloomberg.
00:24:29.400I mean, Bloomberg has lost so much credibility over the last few years, and Michael Bloomberg, to his credit, he's a brilliant guy.
00:24:35.060But these people he has running his organizations are just total buffoons.
00:24:39.460I want to turn to some issues here at home.
00:24:42.960Should President Trump, and hopefully he wins on November 5th, he has a big decision to make, and that's whether to keep or to get rid of Jerome Powell.
00:24:50.600Here was his thoughts on it at the Chicago Economic Club.
00:24:53.580But you've gone backwards and forwards about whether you want to keep Jerome Powell as chair of the Federal Reserve.
00:25:00.520His term as chair runs on to May 2026.
00:25:04.220Would you seek to remove or demote him?
00:25:07.460Look, I think it's the greatest job in government.
00:25:11.940You show up to the office once a month and you say, let's see, flip a coin.
00:25:16.480And everybody talks about you like you're a god.
00:26:54.220Well, you know, what you just mentioned is a real possibility that this latest rate cut, the depth of the rate cut, was politically motivated in order to provide a boost to Harris.
00:27:06.640You can't argue that that was not the case.
00:27:11.560I think that his approach to the job is absolutely missing.
00:27:15.220But missing in one very important point, back when Alan Greenspan was Fed chairman, he was not afraid to bring up the importance of a thought to be gargantuan federal budget deficit to the performance, long term performance of the U.S. economy.
00:27:57.240And this should be brought up by the Fed chairman over and over again, like it was by Greenspan.
00:28:05.640But no, Jerome Powell, not a peep out of them regarding the deficit.
00:28:10.280And the deficit helps to explain why, despite this latest rate cut by the Federal Reserve, they cut Fed funds by half a percentage point.
00:28:20.180Instead of moving lower, the 10 year treasury yield and long term mortgage yields have climbed higher.
00:28:27.780I think the hardest thing to explain to someone these days is how you make more money on a bond and a yield in six months, leaving your money there than on a five year.
00:28:40.640It's sort of so asked back or a 10 year that it's like almost unimaginable to explain, to try to explain to someone.
00:28:47.780It's better to just let it go and and go ahead and buy it into your bonds and stuff.
00:28:52.320So the problem is I was talking to my father, who's spent 30, 40 years in on Wall Street.
00:28:58.060The problem is, is Jerome Powell is not an economist.
00:29:00.300He doesn't know what the hell he's doing.
00:29:45.720If we looked at the private sector jobs number for the month of September, we would find that the only substantial jobs growth you could find occurred in the industries of leisure and hospitality.
00:29:59.500That's low paying as well as health services.
00:30:04.680So, jobs growth has been skewed towards these lower paying occupations.
00:30:10.680And thus, we shouldn't get carried away when we read that we had 254,000 new jobs created in the month of September that well exceeded expectations.
00:30:27.260Yeah, before they revise it lower by 200,000.
00:30:30.280But the fact of the matter is, there is lack of quality jobs being created in this country.
00:30:37.320And that is why that early October reading on consumer sentiment from the University of Michigan is close to a historical low.
00:30:47.020And by the way, when we had consumer sentiment in the month of October, as low as it was this past early October, the incumbent party always lost the presidential election.
00:31:00.380And I wouldn't be surprised if history repeats itself.
00:31:03.540Also note, too, that a lot of these jobs being created are either directly or indirectly being funded by the government.
00:31:10.640Government jobs are doing great, as well as jobs in health care that are, in effect, often funded by the government.
00:31:18.460And let's not forget, some of those construction jobs are related to the subsidies provided to companies that are building with microchip factories, as well as other facilities that are related to green energy.
00:31:41.560Over the last few weeks, I was over on the West Coast.
00:31:43.900I was in Vegas for a little bit for some meetings.
00:31:46.520And one of the nights I went out for a fairly expensive dinner with some friends at a restaurant at a brand new hotel in Vegas.
00:31:54.180And it's a restaurant that on any day of the week, specifically a Friday or Saturday, especially a Friday or Saturday, I should say, is packed wall to wall.
00:33:28.940You know, we've got to return to the economy that we had under Trump back in 2017, 2019,
00:33:37.500when the young people were being encouraged to work as hard as they possibly can, gain these skills because they saw some upside for all of their efforts.
00:33:49.880So we and it's enough to get there is going to take some macroeconomic pain for the United States.
00:34:00.260And it's going to take someone with a brain to lead us there, John.
00:34:03.480And I think that man is President Trump.
00:34:05.280Thanks for all the good work that you do and the good work that the word that you get out there and the honesty,
00:34:10.100because as we saw through those video clips from that fellow at Bloomberg,
00:34:14.300there's not very many honest people out there who will tell the truth.