BIDEN ECONOMY SLIPPING INTO RECESSION
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Summary
John Lonsky, founder and President of the Lonskys Group, joins us to talk about the latest in the Kamala Harris vs. Joe Biden 2020 campaign and what it means for the economy and the future of the country.
Transcript
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Hello, everybody, and welcome to the Great America Show. It's great to have you with us.
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Thanks so much for joining us today. The world is in shambles. America's in shambles. I mean,
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everything is out of control under this Biden-Harris administration. This week, we find out
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Border Patrol agents are going to revolt if Kamala Harris and Joe Biden, well, I should say
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just Kamala Harris, win the 2024 election. They're going to get the hell out of there and take
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retirement early because they can't deal with four more years of what's been going on in this
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country. Another big issue here at home is the economy. And as you hear me often say on this
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show, it teeters. And the economy was something Lou took great pride in and attention to on this show
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because it affects all of our daily lives, whether it be the inflation that we deal with every single
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day, us Americans who have 401ks, Americans who are trading in the stock market, or just simply
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Americans who go shopping every single day who can't afford a carton of eggs, a gallon of milk,
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the bare necessities we need, laundry detergents. The Biden administration under this president has
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made it impossible for almost all of us to live. But President Trump, it seems, is on the horizon to
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victory in November, on November 5th. At least we can hope for America. He was at the Chicago Economic
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Club this week, meeting with a not-so-smart man. He's a Bloomberg News editor-in-chief,
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and he completely owned this man. I want to bring in our guest today who knows a little bit about
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economics. He's John Lonsky. He's the founder and president of the Lonsky Group. John, first of all,
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thanks so much for joining us here on the Great America Show.
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I want to begin with first a clip for the audience on how this interview with President Trump and
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John Micklethwaite, I think is how you say his name, the Bloomberg News editor-in-chief. How their
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You said, President Trump, at the moment, there is a thing called the Trump trade in the markets.
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Do you know what that is? The Trump trade is very simple. People are betting that your policies,
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they're going to drive up debt, they're going to drive up inflation, so they're going to drive up
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inflation, interest rates. Are the investors wrong?
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Yeah, I had four years, no inflation. I had four years, no inflation.
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I had four years. It's better than that. And Biden, who has no idea where the hell he is,
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okay, Biden went two years with no inflation because he inherited from me. And then they started
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spending money like drunken sailors. They spent so much money. It was so ridiculous, the money they
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were spending. They were spending on the Green New Scam, the Green New Scam, the Green New Deal,
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you know, it was conceived of by AOC plus three. She never even studied the environment in college.
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She went to a nice college. She came out, she just said, the Green New Scam, she just named all these
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President Trump, the issue of the moment, the markets are looking at the facts. You are making all these promises.
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Latest one was car loans. You're flooding the thing with giving giveaways.
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I was actually quite kind to you. I used $7 trillion. The upper estimate is $15 trillion.
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People like the Wall Street Journal, who's hardly a communist organization, they have criticized
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you on this as well. You are running up enormous debt.
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What does the Wall Street Journal know? I'm meeting with them tomorrow. What does the Wall Street
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Journal know? They've been wrong about everything. So have you, by the way.
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You've been wrong about everything. You're trying to turn this. You're trying to turn this.
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You've been wrong about everything. No, you're trying to turn this into debate.
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No, but you're wrong. You've been wrong. You've been wrong all your life on this stuff.
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John Lonsky, Trump taking his latest victim. I can't seem to understand, John, why these people
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do this to themselves. They're nowhere near as smart as President Trump or the advisors he had
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around him. I can understand if we're back in 2015, John, where President Trump had no economic
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record to run on. But we saw what President Trump did in four short years. I mean, and some people say
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it's something short of just a miracle. Your thoughts on that brief exchange between the
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Bloomberg News Editor-in-Chief, John Minklethwaite, and President Trump?
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Well, the Bloomberg Editor, I think, overlooked the importance of deregulation and tax cuts
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to facilitating rapid economic growth without faster price inflation. That's his big mistake.
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And in fact, if Trump had maintained the presidency following the 2020 election, we would be in much
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better shape today. We would have had a continuation of his policies that were being guided by a team
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that I consider to be significantly brighter than Team Biden or Team Harris.
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And we might well be looking at solid economic growth without a budget deficit that is now just over
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You know, it's interesting, John, is this Nimrod, John Minklethwaite. I hope I'm saying his name right.
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He wants to talk about spending money. He didn't bring up the Green New Deal, which would have
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dumped trillions and trillions of dollars of wasteful spending. That would have absolutely
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done nothing. The money I think President Trump has touted that he will cut on Americans is money
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that will be made back through tariffs, through people spending more money. What people don't
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understand is if it's very simple and you know this better than anybody, John, and you can attest to
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it and give me your thoughts on after. But if people have more money in their pockets and
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it's a stable economy, right? Because that's a very key factor. It's a stable economy where
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inflation isn't rampant. If people have extra money in their pockets, John, they're going to go out and
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they're going to buy that car that they wanted. They're going to go out and they're going to go
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shopping. They're going to your wife's going to buy that pocketbook she wanted. The kids are going to
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go out and they're going to get that new baseball mitt, that new baseball bat. That's the thing that
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these people don't understand, John. And it's something that I learned, I think, in probably
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eighth grade. And it's embarrassing to me, in my opinion. And I'm sure in yours as well,
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because you're an economist. This is what you do for the Bloomberg News editor in chief to sit there
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and say something so stupid. Yeah, he doesn't really understand the fellow from Bloomberg that
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the stimulus we supply to the economy can differ regarding whether or not it promotes an
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increase in the work incentive, an increase in the labor supply, as well as an increase in investment
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spending. You know, with more investment spending, with more people wanting to work, we can get away
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with an increase in spending that does not put unwanted upward pressure on prices. And, you know,
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the Green New Deal, my goodness, energy policy has been nothing less than an unmitigated
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disaster for the Biden-Harris administration. Not only has it caused a lot of problems for the U.S.
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economy by limiting the supply of energy and thereby making the whole production process
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costlier than otherwise, let's not forget that the Biden-Harris energy policy has been a complete
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disaster for foreign policy in the United States. My goodness, it was by going ahead and pushing fossil
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fuel prices sharply higher that we enriched the belligerent states of Iran and Russia, and we're
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paying for that dearly today. So energy policy is very important for the domestic economy, international
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economy, and for world peace. I don't think I could have said it better myself, John. I'm by no means an
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economist. I'm just a guy who reads the Wall Street Journal every now and then or every day. You mentioned
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foreign policy. I want to take a quick break here. But when we return, tariffs, they're a big issue, and they've
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been talked about now since 2016, since President Trump. It's almost like tariffs didn't exist before 2016
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because our leaders didn't know what they were doing. But everyone has touted tariffs as such a
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bad thing. Well, I shouldn't say everyone. It's the Democrats. The Marxists left. They don't like
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tariffs because they know they work, and no Democrats will have the, I don't know how to say this, the
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gojones to go ahead and go to China and say, you guys are going to pay for this, or Mexico, you guys are
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going to pay for that. I want to take a quick break here. When we return, we got more video footage from
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that meeting with President Trump and the Breitbart News, Bloomberg News Editor-in-Chief, Arne
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Tariff. You've guessed it, President Trump owned him once again. We're going to take a quick break.
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We're coming right back with John Lonsky of the Lonsky Group. Folks, are you tired of supporting
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big box stores and multi-billion dollar corporations that don't support us? Corporations that donate
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tens of millions of dollars a year to push woke Marxist dem ideologies? Whether it be Amazon and Jeff
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Bezos or Target with their transgender clothing for kids, or even Bud Light going totally woke,
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enough is enough. Why should we as lovers of this country continue to support these
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corporations? The answer is we shouldn't. I constantly get people who reach out to me and
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ask, John, what can we do to save this country? Where can we shop and support American-made
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00:10:17.180
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00:10:21.100
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00:10:56.480
We're back. We're talking with John Lonsky, the founder of the Lonsky Group, a brilliant
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economist, one of Lou's favorite. Lou had favorite guests on this show, as you probably imagine,
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and John was one of them. John, President Trump was asked about tariffs and the destruction
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it's going to do on this country and everything that comes with it. I'll let the audience take
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So they're taking a tremendous advantage of us, $350 billion on trade, and we're then supporting
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them. In other words, it's not sustainable. You can't keep doing this. You can't have that,
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China, all of these countries. And stupid people made these deals. I saw trade deals that were so
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stupid. That you'd have to be, excuse me, that were so bad that you'd have to be an idiot to sign
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them. And we signed them for years. We had, we had, I could tell you trade deals that I have never
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seen of them. I said, who would agree to this? They had to be corrupt. They had to be corrupt. To
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make those deals, they had to be corrupt because there's no way a rational human being, I always say
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either corrupt or extremely stupid because there's no way a rational human being would ever sign the
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trade deals that this country signed. And I got out of many of those deals.
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What are your thoughts, John, as you, you got to witness President Trump, Obama before Trump,
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and the distinction between the trade deals that were made under President Trump and the trade deals
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that were made under Obama and the trade deals now that were made. I don't think there's any notable
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ones that were made under Biden and potentially ones under a Harris administration. Well, John,
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I think you hit on a very important word, and that is deals, trade deals. Trump views tariffs as a
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negotiating tool in order to get the best possible deal for American workers and for American companies.
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We also want to be sensitive to the fact that we may have become too complacent about the importance
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of national security in international trade. I don't think it's a very good idea for the U.S. to become
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too dependent on overseas sources of, say, pharmaceuticals, of critical metals, and so on. So there is, you know,
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a strong justification for tariffs, if only to bolster, to improve national security in the United States.
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And, you know, China is making a huge mistake. Let's face it, China's biggest customer is the
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American consumer. And what you don't want to be doing is pointing a gun at the head of your best
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consumer, which China appears to be doing right now. So perhaps through the skillful negotiations
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pertaining to tariffs, we could help China lessen its degree of belligerence out of the realization
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that China would be doing itself a lot of harm if it went ahead and shut off this very important
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market for its exports. Right now, Chinese domestic economy is really hurting. And the only perhaps
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bright light in the Chinese economy, as it was in the past, is exports. And if you take that away from
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them, they'll be in big trouble. And I think that once he assumes a presidency, Trump should have a lot
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of power when negotiating with China over tariffs. John, the old saying, kick the dog while they're
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down, I think applies here more than any, because the truth of the matter is nobody holds China
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accountable for anything they've done to us since, I guess, maybe the early 2000s of Belt and Road
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Initiative, which we let them do. They unleashed COVID on the world, killed over a million Americans,
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millions around this world, got away with it. No repercussions from the Biden administration. I do
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think if Trump was to return to office in January of 2021, he would have probably hit them with more
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tariffs as retribution for what they did to this country, because I think it's more than apparent
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they released it on the world, not by accident, but they get away with everything, right? We're letting
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them go now. Their economy's hurting. We should be hitting them now where it really hurts. We shouldn't
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have to wait for President Trump to come back in on November 5th or sworn back in on January to hit
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them where they hurt. Biden should be crippling these people for what they've done to us. John,
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not only on the COVID side, but on the economic side, the fentanyl side, what they're shipping into
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our country, fentanyl, killing hundreds of thousands of people a year with fentanyl. We let them get away
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with it. But this guy, I can't get over it. This Bloomberg News editor-in-chief thought he knew about the
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tariffs. Take a listen to President Trump. Take him to town on tariffs, because he's one of the
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savants, this fellow from Bloomberg. Take a listen. You're also talking about 10, 20% tariffs on the
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rest of the world. That is going to have a serious effect on the overall economy. And yes, you're going
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to find some people who would gain from individual tariffs. The overall effect could be massive.
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I agree. I agree. It's going to have a massive effect, positive effect. It's going to be a
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positive, not a negative. Let me just tell you. No, no, let me tell you. I know how committed you
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are to this. And it must be hard for you to spend 25 years talking about tariffs as being negative and
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then have somebody explain to you that you're totally wrong. It'll have a negative. It will have.
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I'll go a step further. If you don't do this, this country has no chance.
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40 million jobs is a lot of jobs to rely on trade. They're all coming back.
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Those are 40 million jobs in America that rely on trade. Are you ready? John Deere,
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great company, they announced about a year ago they're going to build big plants outside of the
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United States, right? They're going to build them in Mexico. And you threatened them in Paris and
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they stopped. That's right. I said, if John Deere builds those plants and not selling anything into
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the United States, they just announced yesterday they're probably not going to build the plants,
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okay? I kept the jobs here. John, he literally contradicts himself at the end, this fella.
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It makes absolutely no sense. The simple, simple thing, there's only tariffs on imports, John.
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The people who are making things here in America and employing Americans are going to pay the regular
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corporate tax that every other corporation in America pays, which President Trump gave a massive
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break to in order for these companies to stay and come back to America, further stimulating an economy,
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further stimulating jobs and helping out the American people. It's just mind-blowing to me,
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John, that these people on the left are so deranged that they're willing to go on national television
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and lie. Can you tell me one negative effect that the Trump tariffs had on this country, John?
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Well, we don't know of any quite yet, can we? We don't know of any whatsoever. And inflation
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remained low. I mean, inflation was less than 2% even prior to COVID and, of course, much less than
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2% when Trump left office. What we don't want to overlook is that when we talk about a 20% tariff,
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we're not stating that the prices of imported goods will rise by the full 20%. Let's not forget
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that a lot of that tariff will be absorbed by the importer, by whoever is bringing that good into the
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United States, and thus the price increase could be considerably less than 20%. Still, you've got to
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be careful with tariffs. You've got to use them judiciously. You don't want to be protecting
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industries in the United States that are not worthy of protection. I mean, you can get yourself into a
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problem that if you reduce the competition faced by U.S. companies too much because of tariffs,
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then you will not only pay the price in terms of significantly higher retail prices, you'll also pay
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the price in terms of a loss of product quality. This is something that has happened in South America
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that happened in Argentina. Do we need tariffs? Yes. Do we want to apply tariffs
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blindly? No. Yeah. And I think you'll agree with me on this is that where Trump applied the tariffs,
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they were very concentrated and they worked. We brought in money, John, that we'd never seen
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brought into this country. The other thing that people don't miss is President Trump says he's
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going to put the tariffs on. If you own a company, John, and you're down in Mexico and I tell you,
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you know, it may cost up to 50% for you to come across the border. There's no doubt that you're going
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to come back to America. So I don't even think in most cases the tariffs will be necessary. It's a
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bargaining tool that President Trump very smartly uses as a New York businessman, you know, that
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will try to get these companies. He did it with carrier air conditioning. He did it with Nabisco.
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But, you know, he's right. These companies, John, you go over to Europe, you don't see any
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American-made cars there. You're very few and far in between. You don't see American-made things over
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in Europe, in China. You know, American manufacturing is dying and it's at the hands of the Marxist Dems.
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I want to take one more quick break here. When we return, we're going to get your thoughts on that.
00:20:35.480
I also want to take up Jerome Powell and the Fed and where we go from here and where this market goes.
00:20:41.520
It seems we don't have a president right now, yet we have a very unstable market, in my opinion.
00:20:46.580
We're going to get your take on that. When we return, we're talking with John Lonsky of the
00:20:50.240
Lonsky Group. Stay with us. We're coming right back.
00:20:53.800
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We're back. We're talking with John Lonsky of the Lonsky Group, a brilliant economist. And John,
00:22:04.760
we were talking before we went to break about China. And the big issue that a lot of people miss
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above the surface is the national security aspect of it. We go over to China, and I use Elon Musk. I
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love Elon Musk, but I use him as an example all the time. He's over there building the batteries for
00:22:21.880
his cars. How much trouble are we in as a country, John, that we have Apple, Tesla, 90% of our
00:22:31.700
pharmaceuticals being made overseas, as you had mentioned before. How much trouble are we in as a
00:22:36.520
country? That's dangerous. I mean, I'm thinking about these critical metals for the development
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of weapons in the defense industry. You have to have access to those metals. But right now,
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a lot of those metals are found in China, or they're found in South America. But the companies
00:22:54.960
that now produce these metals in South America are owned by the Chinese. So we have to proceed
00:23:02.700
with a lot of caution in this manner because of geopolitical risk that could really become
00:23:10.180
amplified if we do have a conflict with China. I think I want to know, too, and I think this is
00:23:17.060
important. You can always make a strong case for tariffs when there is the very real danger
00:23:23.760
that a low-cost producer overseas may decide to dump its products on the U.S. market. Electric
00:23:32.580
vehicles right now constitute a prime example of this threat. Supposedly, China has more than a million
00:23:40.800
electric vehicles that it cannot sell. And China would love to go ahead and export these EVs to the
00:23:49.820
United States at prices that would be so low that it would lead to an immediate shutdown of EV production
00:23:58.160
facilities in the United States, Tesla, as well as at other companies. So how can you say that
00:24:06.520
there is no need for tariffs when, indeed, there is a strong argument to be made that without tariffs,
00:24:15.660
your developing industries would have no future whatsoever?
00:24:20.800
Yeah, it's John. You know, the problem is, is me and you are above the surface.
00:24:25.040
These people who are running this country, these people who are running Bloomberg, I mean, Bloomberg has
00:24:30.420
lost so much credibility over the last few years. And Michael Bloomberg, to his credit, he's a brilliant guy.
00:24:35.000
But these people he has running his organizations are just total buffoons.
00:24:39.460
I want to turn to some issues here at home. Should President Trump, and hopefully he wins on November 5th,
00:24:45.500
he has a big decision to make, and that's whether to keep or to get rid of Jerome Powell.
00:24:50.600
Here was his thoughts on it at the Chicago Economic Club.
00:24:53.700
You've gone backwards and forwards about whether you want to keep Jerome Powell as chair of the Federal Reserve.
00:24:59.960
His term as chair runs on to May 2026. Would you seek to remove, remove or demote him?
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Look, I think it's the greatest job in government. You show up to the office once a month and you say,
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let's see, flip a coin. And everybody talks about you like you're a god. Oh, what will he do?
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I mean, before, the guy used to walk into my office, he was like begging, he was fine.
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But you did talk about, you talked about removing him once.
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I did, because he was keeping the ridge too high. And I was right.
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In fact, he actually dropped him too much when I did this.
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Because I said, I was threatening to terminate him. There was a question as to whether or not you could.
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And there was an article in the New York Times, two half pages. One page said, I can do it by lawyers.
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One half page said, I couldn't. And that was enough for him. And he dropped the hell out of the ridge.
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He dropped him too much. He went so, he dropped him actually too much. Okay.
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Here's the story. I think that if you're a very good president with good sense,
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you should be able to at least talk to him. I don't say make the decision at all.
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But I mean, I've been a very successful businessman. I've done really good, much better.
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Now people are understanding how good I've done because they're seeing it much better than the fake news wants to give me credit for it.
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So, John, what's your thoughts on Jerome Powell?
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You know, I'm sort of tied and torn because it seemed like he's played politics a little bit too much during COVID.
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He was sort of playing games with the rates when they needed to be lowered.
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President Trump, as he said, he had to almost threaten him to do something to stimulate the economy that was hurting so bad.
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Now you've got an economy that's teetering and he's sitting there cutting rates and doing this.
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And it's almost like it's to try to save face for Joe Biden and Kamala Harris.
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Well, you know, what you just mentioned is a real possibility that this latest rate cut,
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the depth of the rate cut, was politically motivated in order to provide a boost to Harris.
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I think that his approach to the job is absolutely missing.
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And 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.
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We even have a bigger deficit relative to GDP today.
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It's more than six percent at this stage of an economic recovery.
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The deficit should be no higher than three to three and a half percent of GDP.
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It's one point eight trillion dollars with perhaps every chance of approaching two trillion dollars next year.
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And this should be brought up by the Fed chairman over and over again, like it was by Greenspan.
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But no, Jerome Powell, not a peep out of them regarding the deficit.
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And the deficit helps to explain why, despite this latest rate cut by the Federal Reserve, they cut Fed funds by half a percentage point.
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Instead of moving lower, the 10-year Treasury yield and long-term mortgage yields have climbed higher.
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I 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.
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It's sort of so asked back or a 10-year that it's like almost unimaginable to explain, to try to explain to someone.
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But it's better to just let it go and go ahead and buy into your bonds and stuff.
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The problem is, I was talking to my father, who's spent 30, 40 years on Wall Street.
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The problem is, is Jerome Powell is not an economist.
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And when you put somebody in who doesn't know what they're doing, look at Boeing.
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David Calhoun has ran Boeing into the damn ground.
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You put a businessman in to run an engineering company, and that's what happens.
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And I think it's the same thing with Jerome Powell.
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You have a guy who doesn't know what the hell he's talking about.
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But, John, our economy here at home is in trouble.
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7-Eleven, the convenience store giant, announcing they're closing 400 stores across America, 444 to be exact.
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Walgreens this week announcing they're closing 1,200 stores.
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Bank giants, though, J.P. Morgan, Chase, Bank of America, closing branches all across this country.
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If this doesn't scream that we're in trouble right now, I really don't know what does.
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If 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.
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So, jobs growth has been skewed towards these lower paying occupations.
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And 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.
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But the fact of the matter is there is lack of quality jobs being created in this country.
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And that is why that early October reading on consumer sentiment from the University of Michigan, close to a historical low.
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And 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.
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And I wouldn't be surprised if history repeats itself.
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Also note, too, that a lot of these jobs being created are either directly or indirectly being funded by the government.
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Government jobs are doing great, as well as jobs in health care that are, in effect, often funded by the government.
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And 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, you know, facilities that are related to green energy.
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Over the last few weeks, I was over on the West Coast.
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I was in Vegas for a little bit for some meetings.
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And one of the nights I went out for a rarely, a fairly expensive dinner with some friends at a restaurant at a brand new hotel in Vegas.
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And 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.
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And I was able to get in on a Friday, Saturday night.
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When you see the richer stop spending, John, you know there's a problem.
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I often go to a cigar lounge out here by my place talking to the guy the other day.
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So now you've got the blue collar worker who's not buying cigars.
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Restaurants all across the board, John, are getting killed.
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I think people are very terrified of what's happening.
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What are your thoughts as we wrap up here on where the economy sits right now?
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So are you a little bit more optimistic than me, you know, that we're not on some sort of seesaw that can go either way at any point?
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This economy is slipping into recession for the current economic recovery.
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It's going to be death by a thousand cuts, if you like.
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But I think the forthcoming recession is necessary to force a correction of the imbalances that we currently suffer from, the lack of affordability in housing.
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Unfortunately, that's only going to be remedied by a decline in home prices.
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And that may already be underway in states like Florida, Texas and California.
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And moreover, at some point, we've got to do something about excessive government spending.
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You know, we've got to return to the economy that we had under Trump back in 2017, 2019,
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when 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.
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And it's enough to get there is going to take some macroeconomic pain for the United States.
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And it's going to take someone with a brain to lead us there, John.
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Thanks for all the good work that you do and the good work that the word that you get out there and the honesty,
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because as we saw through those video clips from that fellow at Bloomberg,
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there's not very many honest people out there who will tell the truth.
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And thank you all for being with us today here on The Great America Show.
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Please be sure to join us back here tomorrow for The Great America Show as our quest for truth, justice and the American way continues.