The Great America Show - DEMS AND MSM HAVE LONG PRAYED FOR A RECESSION - WILL THEY GET IT？

00:00:00.000 What the hell? 0.97

00:00:07.840 Wait, what are you doing to this guy? 0.93

00:00:24.840 My name's Frankie, and I'm getting arrested today protesting Elon Musk, bought his way

00:00:32.900 into office, he bought his way into heading a government agency, he bought his power at

00:00:36.800 the expense of the American people, at the expense of our environment, at the expense

00:00:40.020 of our world, and all of the people in it.

00:00:46.460 Hello, everybody, and welcome to The Great America Show.

00:00:49.320 It's great to have you with us.

00:00:50.660 Boy, do I love watching these Marxists, these Antifa thugs.

00:00:54.840 I get arrested for protests over the weekend in New York City.

00:00:58.360 These thugs thought they were going to vandalize and destroy one of Elon Musk's Tesla stores.

00:01:04.420 Folks, in case you haven't realized, Mayor Eric Adams is on our side now.

00:01:08.720 He's on the side of law, order, truth, justice in the American way.

00:01:13.560 We're not going to put up with your nonsense anymore.

00:01:15.560 Your days of burning cities down and doing destruction, shutting down college campuses, 0.92

00:01:20.800 it's over.

00:01:22.020 It's over.

00:01:22.780 It's not going to be tolerated anymore. 1.00

00:01:24.840 So you go out there and you make an ass of yourself, make a fool of yourself. 0.99

00:01:27.760 You get on camera, you get your little clip. 1.00

00:01:29.760 Congratulations.

00:01:30.300 Send it to your parents because they failed. 1.00

00:01:32.380 You guys are total losers. 1.00

00:01:35.080 That's how you fight back. 1.00

00:01:36.360 You destroy other people's property.

00:01:38.820 You burn down things.

00:01:39.980 You break windows.

00:01:41.320 Congratulations. 1.00

00:01:41.680 You guys are absolute losers. 0.99

00:01:43.940 Folks, before we get into some news today, if you're joining us on video and you watch 0.98

00:01:48.940 us each and every day on video on this podcast, I ask that you join us on YouTube.

00:01:54.360 We're now broadcasting on YouTube.

00:01:55.960 You can follow us at The Great America Show.

00:01:58.040 We'll be active in the chat.

00:02:01.000 Our producers will be feeding me through the questions and any concerns that you guys have

00:02:06.380 through the YouTube comments.

00:02:07.920 So we appreciate you guys joining us there each and every night.

00:02:10.260 Same time, 6 p.m.

00:02:11.200 on YouTube at The Great America Show.

00:02:14.700 So Tesla is not the only Elon Musk-owned company being attacked.

00:02:19.140 This afternoon, X, formerly known on Twitter, was attacked, Elon Musk, says, either by a foreign

00:02:24.800 government or a large group of organized people.

00:02:29.400 So why are they going after Elon Musk?

00:02:31.100 What's their beef with Musk?

00:02:32.620 You heard that Marxist lunatic there saying Elon Musk is an unelected bureaucrat. 0.50

00:02:37.680 Well, he's not acting like it. 0.79

00:02:39.400 He's just doing a good job.

00:02:41.680 He wants to cut spending.

00:02:42.580 He wants to cut the federal deficit.

00:02:44.240 Why are you mad at him?

00:02:45.560 What's your beef?

00:02:46.920 Are people not supposed to be billionaires, a self-made billionaire, and you're supposed

00:02:51.340 to hate on him? 1.00

00:02:51.900 We're supposed to hate this man for whatever reason that your sick, demented, jealous mind 1.00

00:02:56.620 tells you we are? 0.99

00:02:58.600 I don't think so, folks.

00:03:00.320 As I said, these Marxists are losing, and they're losing at a rapid, rapid pace. 0.98

00:03:04.580 Speaking of losers, Washington, D.C. 0.93

00:03:07.120 You folks may remember when they installed that big Black Lives Matter street painting 0.99

00:03:11.680 outside the White House just for President Trump to look out the window and see.

00:03:15.840 Well, guess what?

00:03:16.460 It's actually being dismantled as we speak and painted over.

00:03:20.280 D.C.

00:03:20.600 Mayor Mario Bowser, apparently very nervous about losing federal funding.

00:03:25.340 She says, it's okay.

00:03:26.680 You guys can dismantle it.

00:03:28.340 It's time for it to go.

00:03:30.040 Also doing the Lord's work, Tulsi Gabbard, revoking the security clearances for those 51 spies

00:03:35.860 who lied.

00:03:36.320 Remember the Hunter Biden laptop folks?

00:03:39.420 Those 51 intel chiefs who said it was Russian disinformation?

00:03:43.900 This is now, of course, in addition to what President Trump did last month when he revoked

00:03:47.440 Secretary Anthony Blinken, Jake Sullivan, Letitia James, Alvin Bragg, Biden's Deputy

00:03:54.060 AG Lisa Monaco, the corrupt prosecutor Andrew Weissman, the deep state lawyer Mark Zade, and Norm

00:04:00.480 Eisen, the man behind all the lawfare against President Trump, in addition to those 51 being

00:04:06.160 revoked.

00:04:06.980 Also, we've got to keep continuing to give credit where credit's due.

00:04:10.960 Marco Rubio has declared that the USAID audit is complete.

00:04:14.300 The vast majority of the foreign aid programs are now going to be axed, canceling 83% of

00:04:20.940 a formal USAID contract.

00:04:24.660 So great on Marco Rubio.

00:04:25.780 Great on this administration who are doing an absolutely terrific, terrific job.

00:04:30.480 Folks, I want to take today's episode to talk about something that's probably on all of

00:04:34.540 your minds.

00:04:35.300 It's on my mind.

00:04:36.160 It's on the American people's mind.

00:04:37.920 And it's this economy and where it's going.

00:04:40.260 A lot of us are looking at our 401ks, our IRAs, our stock portfolios, and we're getting

00:04:44.600 a little nervous that they're taking a little bit of a dive.

00:04:48.040 And, you know, there's a few catalysts, a few reasons why this market is in a tiny little

00:04:53.200 bit of a tailspin.

00:04:54.620 So I want to dedicate today's episode and go into a deep dive on what exactly is going

00:04:59.000 on, how long we can expect it to go on.

00:05:01.540 So I've asked the CEO of the Lonsky Group, John Lonsky, to join us today to break it all

00:05:06.300 down, to maybe ease some of our fears and let us know where we are and when we can expect

00:05:11.400 things to change for the better or for even the worse.

00:05:14.740 John, it's great to have you back with us on The Great America Show.

00:05:17.200 I want to start with, first of all, you're the only person I wanted to talk to today or

00:05:21.840 for the last week or so with what's going on right now.

00:05:24.720 From the left, you hear we're going down the wrong path.

00:05:27.880 This country is going down the drain.

00:05:29.740 It's the Trump dump or whatever they're calling it, the Trump economy.

00:05:33.100 It's going down the drain.

00:05:34.240 From the right, you're hearing, you know, just relax.

00:05:37.140 Wait a minute.

00:05:37.640 It's only been a few weeks.

00:05:39.260 It's not something that's been a long time.

00:05:41.340 But President Trump said this was all coming.

00:05:43.720 Your thoughts on where this economy is right now in the stock market that's got people trembling?

00:05:48.160 Well, you know, first quarter real GDP may contract outright, but the contraction that we're likely

00:05:58.600 to get for first quarter real GDP right now appears to be mostly the consequence of a one-time

00:06:07.480 non-recurring surge by imports.

00:06:10.840 And the surge by imports was largely the consequence of companies bringing forward their imports

00:06:21.320 before tariffs took effect.

00:06:24.900 If you look at the rest of GDP, if you take out the trade balance, you will still find growth,

00:06:32.960 though, again, growth may not be much greater than 1%, but the economy is still growing.

00:06:39.620 The labor market is still expanding.

00:06:42.820 We've yet to see a jump by the unemployment rate.

00:06:46.240 We've yet to see a stalling of jobs growth.

00:06:50.800 And so it's a little bit too early to state with any type of conviction that recession is

00:06:58.320 here or that recession will necessarily, without a doubt, strike the U.S. economy in the second

00:07:06.640 quarter.

00:07:07.080 You had mentioned a jobs growth.

00:07:09.540 I think the only fall off in jobs we're going to see, John, and we're going to talk about

00:07:14.080 this is government jobs and those that are start slashing.

00:07:17.640 You'd mentioned something that nobody's talking about.

00:07:20.160 The mainstream media doesn't talk about it, John.

00:07:22.280 The brilliant people on the left don't talk about it.

00:07:24.760 The people on the right don't talk about it.

00:07:26.100 And that part of this market slump is that spending is going to be drastically cut.

00:07:34.100 And you've seen it across the board where Elon Musk is finding billions and billions of dollars

00:07:38.700 of wasteful spending that's used to going into the government each and every year for the

00:07:42.640 past, I mean, however many years since JFK created USAID.

00:07:46.740 We'll start with just that one alone.

00:07:48.880 What effect do you believe that's having on the market versus the tariffs?

00:07:54.420 It is having a profound effect on the market, the forthcoming cutbacks in government spending,

00:08:00.840 if, of course, the courts allow these cutbacks to take place as currently scheduled.

00:08:07.220 That remains to be seen.

00:08:08.260 But what we have taking place right now is a tightening of fiscal policy, if you like.

00:08:17.140 I mean, not only do we have potential cutbacks in government spending arriving fairly soon,

00:08:23.500 we also have what serves as a tax hike, and that would be the imposition of tariffs.

00:08:29.540 So when you take into account the combination of higher tariffs, reduced government spending,

00:08:35.980 you get a tighter fiscal policy.

00:08:38.680 But wait, I'm not finished.

00:08:40.700 Remember, monetary policy still remains comparatively restrictive.

00:08:47.160 So restrictive monetary policy, a tighter fiscal policy, that tells us that we will be looking

00:08:54.980 at economic growth that may come in for a while under the trend rate of growth, which is about 2%.

00:09:04.200 What have we been growing at for the audience for the last four years?

00:09:10.020 About 2.8% last year.

00:09:11.700 But, you know, I think you touched upon an important point, John, and that is the decent growth that,

00:09:19.720 you know, now above-trend growth that we had in 2024, a lot of the credit goes to an unsustainable rate

00:09:26.560 of government spending.

00:09:27.840 It's not only just government spending as expressed in the GDP accounts, we also have hidden types

00:09:37.600 of government spending.

00:09:39.340 Healthcare spending was the strongest component of consumer spending last year.

00:09:45.480 It's one of the leaders in terms of jobs creation over the past 12 months.

00:09:50.460 And, in fact, get this, only 14% of all jobs are found in what's called healthcare and social

00:10:00.360 services.

00:10:02.040 And yet, that 14% of outstanding jobs supplied 45%, nearly half of the jobs created during the

00:10:12.000 12 months ended February 2025.

00:10:16.120 That's not healthy.

00:10:17.300 I can't call that indicative of a strong job market.

00:10:21.900 You don't like to see jobs creation so badly lopsided.

00:10:26.040 So you're looking at a much slower rate of jobs growth and a much slower rate of economic growth

00:10:31.100 if you take out healthcare, you take out government spending.

00:10:34.280 And there's one more.

00:10:35.980 There's all of that support that construction spending on manufacturing facilities,

00:10:41.900 specifically manufacturing facilities related to the production of electric vehicles and

00:10:48.800 batteries, as well as microchips.

00:10:52.120 That, too, is another example of where unsustainable government support artificially inflated

00:10:59.620 the numbers for 2024's GDP.

00:11:03.640 But that's coming to an end.

00:11:05.020 Thank goodness Trump is bringing a stop to this nonsense.

00:11:08.980 And eventually, this is going to help narrow the budget deficit, shrink the budget deficit.

00:11:16.320 And if we get a smaller budget deficit, we're going to be looking at significantly lower interest

00:11:21.880 rates.

00:11:22.580 Right.

00:11:22.700 And that's going to be a godsend for the still troubled housing sector.

00:11:27.180 To me, it sounds like you're on board where I am.

00:11:29.500 It's the long game.

00:11:30.440 It's not the short game.

00:11:31.700 John, for the first time, I think, in my lifetime, and people can correct me on this if I'm wrong,

00:11:35.960 but going back as long as I remember, the government has been the largest employer

00:11:39.480 in the country of citizens who are living in this country.

00:11:44.940 I think close behind them is Walmart.

00:11:47.000 I think for the first time in my lifetime, John, we may finally see the private sector.

00:11:51.860 And that's the way it should be, John.

00:11:53.660 We're a capitalist society.

00:11:55.560 In no world should the government be the largest employer of citizens of this country.

00:12:02.020 What are your thoughts?

00:12:03.220 Yeah, this is not a socialist economy.

00:12:05.240 My goodness, this is a capitalist economy.

00:12:08.200 And I think when we have an extension of Trump's tax cuts from 2017, and I think perhaps even more

00:12:16.080 importantly, when we see more in terms of deregulation, when we get rid of all these silly mandates

00:12:21.700 related to green energy, no electric stoves, all electric vehicles by 2035, 2050, whatever it is,

00:12:30.800 this economy is going to be better off.

00:12:32.960 But, you know, it's of the utmost importance that we move forward with deregulation as quickly as possible,

00:12:42.220 especially as it relates to the labor market, so that we can quickly take these people that have lost their jobs in government

00:12:50.220 or government funded jobs and put them into more productive occupations in the private sector.

00:12:57.120 Yeah, manufacturing will stage a comeback.

00:12:59.600 That will do better.

00:13:00.980 And I think there's other areas that have a good deal of room for growth.

00:13:07.500 John, you worked for a corporation for most of your life.

00:13:10.620 I won't say the name because we're not going to give them any credit.

00:13:13.300 You're the CEO of the Lonsky Group now.

00:13:15.120 But you worked in the private sector almost your life for a very, very important company,

00:13:19.940 probably the top company, financial services and credit rating agency.

00:13:24.960 And your time there, John, in the private sector is not your own boss.

00:13:31.920 Did you ever see a time where the CEO said to you or your boss said to you, you need to stop cutting?

00:13:39.080 You need to stop cut spending.

00:13:40.580 You need to stop cutting jobs.

00:13:41.860 You need to.

00:13:43.060 To me, it's like these Democrats, John, and the mainstream media are going absolutely berserk.

00:13:48.100 Look, that Elon Musk is finding he's going through our tax records.

00:13:52.440 He's going through this.

00:13:53.480 He's going through that.

00:13:54.480 He's going to do this.

00:13:55.620 He's going to do that.

00:13:56.820 Well, you know what?

00:13:57.440 If anything, the private citizen, John, should be happy because we're probably going to get less audits throughout the IRS. 0.82

00:14:02.480 But in what world, John, should people be angry that this man wants to cut the damn deficit that we've been living under for the last 20 something years? 0.98

00:14:13.820 Well, if you were a federal government employee or if your job depended upon federal contracts and you were supremely confident about job security, given the fact that you have a nearly $2 trillion federal budget deficit, this confidence would reflect either stupidity or insanity on your part. 0.99

00:14:37.900 You had to be braced for this particular type of shock. 0.98

00:14:41.420 It was going to happen sooner or later.

00:14:43.820 My goodness, if the company I was working for was losing nearly $2 trillion per year, I don't think I would be very confident about job security.

00:14:57.260 That's for sure.

00:14:58.320 So, you know, this is a wake up call.

00:15:00.840 It brings people back to reality that there has to be adjustments made with government spending so that we are no longer borrowing at such a pace that in the not too distant future, just meeting the interest cost on federal debt that now approach $1 trillion would have the effect of, you know, basically crippling federal government finances.

00:15:28.280 And in turn, doing immense damage to U.S. financial markets as well as the U.S. economy.

00:15:35.700 John, there's a reason I use Jamie Dimon.

00:15:37.560 I don't like the guy, but he does a very good job.

00:15:40.180 He's very good at his job.

00:15:41.420 And there's a reason why he's been there for so long.

00:15:44.020 And it's not because he's running a deficit every year for JPMorgan Chase.

00:15:48.820 It's literally mind-blowing to me.

00:15:50.160 I want to take a quick break here.

00:15:51.280 When we come back, I want to go a little bit further into these tariffs, the long game on them.

00:15:54.900 Do they actually stick?

00:15:55.980 Where do we go with them?

00:15:57.160 And then I want to go into, are we in a recession?

00:15:59.740 Are we entering a recession?

00:16:00.940 Have we already entered a recession?

00:16:02.520 Because I think that's something the audience is very nervous about.

00:16:04.920 They look at their 401ks and they see they're down the tubes.

00:16:08.440 How much longer can we expect this to happen and what the end game is here?

00:16:11.920 We're coming right back with John Lonsky.

00:16:13.460 He's the CEO of the Lonsky Group.

00:16:14.820 Stay with us.

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00:17:16.760 Folks, we're back with John Lonsky.

00:17:20.840 He's the CEO of the Lonsky Group, our chief economist here for The Great America Show.

00:17:25.280 I think it's safe to say he's the only one we trust with the news.

00:17:28.820 You know, it's easy, John.

00:17:29.760 When we have one person, if you're wrong, they can't say, you know, we're wrong about everything.

00:17:33.480 It's only one person.

00:17:34.760 I want to get to tariffs.

00:17:36.220 Scott Besson had this to say about President Trump's last week, about President Trump's use of tariffs.

00:17:42.820 Take a listen.

00:17:43.360 President Trump uses tariffs, unlike any president in modern times.

00:17:48.920 And we think about it three ways.

00:17:51.280 One can be revenues for the government.

00:17:54.120 Two can be to make trade fair, because a lot of our trading partners do not treat us fairly.

00:18:01.280 And three, President Trump uses them for negotiating, as he did with Colombia, as you're seeing with Mexico, with Canada, with the fentanyl crisis that we're having.

00:18:15.280 So there is a chance that the tariffs could bring in a substantial amount of revenue for the government.

00:18:23.360 So, for instance, a 10% global tariff would bring in $2.5 trillion over 10 years.

00:18:31.280 Imagine that, John.

00:18:32.760 The American government bringing in money and not dishing it out.

00:18:37.580 So three things he laid out there for President Trump's use of tariffs.

00:18:43.020 Negotiating.

00:18:43.880 He's using them right now to negotiate with Canada and Mexico to stop the migrant flow of illegal immigrants and drugs.

00:18:49.240 Trade deficits, which we have with almost every single country, I think, on planet Earth.

00:18:54.440 And revenue growth.

00:18:55.640 The last one, I think, is key, because Joe Biden didn't get rid of his tariffs that he put on China.

00:19:01.260 Why?

00:19:01.600 If tariffs are so bad, why didn't he get rid of them?

00:19:05.160 Well, Biden realized that China deserved tariffs, given the fact in part that, you know, they've been exporting fentanyl to Mexico that eventually makes its way into the United States.

00:19:18.800 I mean, Trump is using tariffs, I think, largely as a negotiating tool early on.

00:19:25.080 And it's conceivable that when Trump begins to look more closely at reciprocity, that is trying to level the tariff playing field.

00:19:37.180 For example, if Europeans impose a 100 percent tariff on exports of light trucks from the United States, then perhaps we should increase some tariff on European exports to the U.S.

00:19:52.520 to try to get Europe to lower the tariff that they impose on U.S. exports to Europe.

00:19:59.780 That would be a great thing.

00:20:01.000 You know, it's conceivable that this effort to lift tariffs in the United States might eventually lead to widespread reductions in tariffs if other countries open up their markets to production from the United States.

00:20:19.400 Right.

00:20:20.040 You know, it's really it's a complicated process, but, you know, European consumer would be better off if they could go ahead and purchase one of those nice SUVs, nice light trucks manufactured in the U.S.

00:20:34.000 I mean, we probably you know, there are again European companies like BMW that manufactures automobiles, other types of vehicles in the Carolinas.

00:20:45.740 Why not export some of those to Europe if they could lower the tariffs that are now imposed on such exports?

00:20:53.820 John, the way I see it is America's been taken advantage of for so long that nobody even realizes the average person doesn't realize what what the economy, how it works, what it looks like.

00:21:05.360 And that's to no fault of their own.

00:21:06.940 We don't teach it in our schooling system.

00:21:08.820 You're brought through schooling systems, not learning what an economy is, not learning what economics is.

00:21:13.520 I didn't take my first economics class until college.

00:21:16.160 That's not a way you should be raising your country.

00:21:18.500 You should be teaching these kids early on the fiscal responsibilities and what economics is and how important it is in society, John.

00:21:25.860 So the way I look at it is we've been silently tortured for a very long time from all these countries.

00:21:31.400 They have tariffs on us and we don't have anything on them.

00:21:35.160 President Trump's just a little bit more robust about how he goes about doing things.

00:21:38.380 He does it in the public domain.

00:21:39.900 He lets the American people know he's very transparent.

00:21:42.000 This is what we're doing and this is why we're doing it.

00:21:44.800 Yet we're getting blowback for putting the same amount of tariffs on these countries that are tariffing us.

00:21:50.140 It's almost like these people who are against it are anti-American.

00:21:54.040 You know, it's not only a question of tariffs.

00:21:56.280 Consider China with that country's production of what are now very cheap electric vehicles.

00:22:02.120 So one of the reasons why the EVs in China are so cheap is because of heavy government subsidies.

00:22:09.800 So we also have to take that into consideration when we're trying to come up with an effective tariff policy.

00:22:18.640 But, you know, John, you made a very important point, and that is I think the Trump administration would be they'd get a boost if they went ahead and explained to the American people why it is that the international trade has become an unlevel playing field for the United States.

00:22:43.160 It's why U.S. producers are put at such a disadvantage.

00:22:47.940 Maybe you need a half dozen examples and use that to explain to the American people what the Trump administration is trying to do by supplying U.S. manufacturers, U.S. producers with this level playing field in international trade.

00:23:08.020 Yeah. You know, you brought up a very, very good point, and it's about China being able to produce things so much cheaper than us.

00:23:14.860 I was at a funeral last week, and I saw a close family friend who's retired down to the Dominican Republic because he simply can't afford to retire up here.

00:23:22.820 He built a beautiful home, John, for $290,000, fully furnished.

00:23:26.400 Beautiful.

00:23:26.860 I asked him, I said, did you buy a car?

00:23:28.100 He goes, yeah.

00:23:28.880 I said, what'd you bring?

00:23:29.620 Did you bring a car down there?

00:23:30.580 Did you buy one?

00:23:31.120 He goes, I bought this Chinese thing.

00:23:32.940 He said, why would you buy a Chinese car?

00:23:34.200 He goes, it was $29,000, fully loaded out to the brim.

00:23:38.420 And you know why they're able to do that, John?

00:23:40.240 And it's things that only Donald Trump is talking about.

00:23:42.620 What people don't realize is, you know, it's like bringing a DJ into DJ at a wedding, right?

00:23:48.440 He charges you $15,000, but it's not really costing him anything.

00:23:51.540 It's costing him his time and his expertise, research and development.

00:23:54.500 It's probably the most expensive thing you could do in a product.

00:23:57.400 I was looking recently at golf clubs, and I said, why the hell are drivers $450?

00:24:01.520 I look up the cost of a driver, John, to actually manufacture.

00:24:05.420 It's about five or six bucks.

00:24:06.780 An iron's about five or six.

00:24:07.960 A driver's about $10.

00:24:09.200 It's that research and development through the engineers and these technologists who make these things possible.

00:24:14.900 China steals them.

00:24:16.020 So, of course, they're able to undercut us on every single thing we do.

00:24:20.480 Your thoughts?

00:24:22.840 Yeah, and how do you go ahead and capture that, if you like, stolen intellectual property from the United States?

00:24:30.740 In the case of EVs and other nation-developing industries, I think we perhaps have an argument to have some sort of protection from foreign competition over the near term.

00:24:47.740 Another factor we want to consider that we haven't mentioned yet, and that is national security.

00:24:53.800 I mean, does it make any sense for the United States to be overly dependent on imports for pharmaceuticals, to be overly dependent on imports of steel, of aluminum, other industrial materials, never mind rare earth metals and so on?

00:25:12.600 I don't think it does.

00:25:13.940 So we have to establish some sort of strategy to help assure that the U.S. has adequate production capacity in the event of a national emergency, especially a war, that would deny the United States access to these badly needed materials from overseas.

00:25:38.960 Oh, you mean like masks and gowns from China and pharmaceuticals that we weren't able to get during the China virus, John?

00:25:46.540 Before we get into it, I want to take up the recession talk on the other side of this quick break.

00:25:50.480 But before we get there, I'll tell you what my one issue is with President Trump and the tariffs.

00:25:55.560 I think what he's done with the tariffs is a great idea.

00:25:58.380 China and Mexico need to stop the flow of drugs and migrants into this country. 1.00

00:26:01.880 It's very, very simple.

00:26:03.160 I don't agree with the way he's done it.

00:26:04.780 He's put them on, he's taken them off, he's put them on, he's taken them off.

00:26:08.180 That's created, I think, more instability in the markets than perhaps anything else.

00:26:12.940 They're on, they're off, they're on, they're off.

00:26:15.140 If you're going to put them on, put them on and leave them on.

00:26:17.960 The market will take its hit.

00:26:19.060 In my opinion, the market will recover, I think, historically.

00:26:21.900 But by taking them on, putting them off, saying, this is only tariffed on this, this is only tariffed on that, where reciprocal trades are going in, tariffs are going in this time.

00:26:30.620 Your automobiles aren't tariffed.

00:26:32.060 This isn't tariffed.

00:26:33.120 I think these nations look at us and say, well, why are we even going to take you seriously in the first place when you've put them on three or four times and you can't leave them on?

00:26:41.300 That's my only beef with him on the tariffs.

00:26:43.980 What's your thoughts?

00:26:45.700 Yeah, it is a mess.

00:26:47.300 And it's almost as if Trump should have other spokespeople on this matter related to tariffs.

00:26:52.980 So besides just himself, appoint somebody in charge and come up with a clear cut strategy.

00:26:59.080 You know, you could be you could use a surgeon's scalpel when looking at the tariff issue.

00:27:05.460 You don't have to be ham handed with tariffs and just apply a 10 percent or 15 percent, 20 percent tariffs to all imports from a specific country or a certain set of countries.

00:27:17.180 So look at it that way. But if you keep changing your mind, if there's all this uncertainty surrounding the outlook for tariffs will lead to reduced capital spending.

00:27:29.420 You know, my goodness, if I begin to sense that tariffs are pushing the price of an auto of an auto higher and that that increase in price may only be temporary because tariffs will eventually have to be rescinded.

00:27:49.880 Why should I buy the auto? So this is it's a confusing situation and neither the consumer nor businesses like heightened uncertainty.

00:28:02.800 Yeah, I think if John, if he would have put them on when he said he was going to February 1st, I think everything would have bled out by now.

00:28:08.860 The truth of the matter is, I don't think Canada can last very long with them on.

00:28:13.660 I don't think Mexico can last very long with them on.

00:28:15.820 So if he would have put them on February 1st, as he said, we're now at March 10th here, I think it would have probably figured itself out by now.

00:28:22.760 And a deal would have been made between Mexico and Canada.

00:28:25.340 Your thoughts before we go to a quick break.

00:28:26.660 Well, you know, my thought is you have to really think this through clearly, because ever since tariffs became an issue towards the end of January,

00:28:34.960 I think since then a stock price index for the auto industry, when I last looked, was down by 30 percent.

00:28:43.220 Let's not forget that the production of automobiles in the United States is very interdependent on cross-border production.

00:28:52.780 OK, a lot of parts are sent into Canada.

00:28:55.240 They come back to the United States, back and forth, likewise with Mexico.

00:28:59.480 So you have to be extremely careful as to how you handle the imposition of tariffs on certain goods, certain materials.

00:29:10.000 It could be. And what will happen, unfortunately, is that if you have this, I don't know, a 20 percent tariff placed on imports from Canada,

00:29:19.240 then the Korean automakers, my goodness, Hyundai, Kia.

00:29:23.060 Boy, they have a golden opportunity to seize market share in the United States as the prices of autos from the big three automakers increase significantly, perhaps by 25 percent.

00:29:35.640 This thing has to be well thought out. Quit rushing into matters, sit back, do the analysis and then come up with the best strategic application of tariffs.

00:29:49.520 Haste can make waste. Haste can do more damage than waste certain times.

00:29:56.220 Oh, man. That's what my grandmother used to tell me. Haste makes waste.

00:29:58.960 It's a it's a famous quote, John. I want to take a quick break here. I want to come back with you.

00:30:03.120 I want to talk about a little bit of a recession and what we can expect.

00:30:06.720 I think that's what the audience all wants to know.

00:30:08.900 America wants to know what we can expect on an economic outlook from you.

00:30:13.920 We're coming right back with John Lonsky, folks. Stay with us.

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00:31:19.960 Folks, we're back with John Lonsky.

00:31:21.640 He's the CEO of the Lonsky Group.

00:31:23.580 John, before we get to the whole recession talk that the mainstream media wants so, so, so bad,

00:31:29.340 when can we expect, do you think, in your opinion, whether it be Canada bleed out or Mexico bleed

00:31:36.300 out, this tariff situation to be settled one way or another, whether they're on or they're off?

00:31:41.840 Is it a one-month thing?

00:31:43.640 Is it a three-month thing?

00:31:44.500 Is it a six-month thing?

00:31:45.400 Is this a year-long thing?

00:31:46.660 Well, you know, if we're looking at an equity market that is down by 15% from its latest high

00:31:55.220 that was set not too long ago, back in February, I think you're going to see a continued postponement

00:32:03.680 of tariffs, and perhaps at some point, this whole plan might be quietly shelved somehow

00:32:13.800 in order to restore stability to U.S. financial markets.

00:32:18.900 Be perfectly frank with you, Mr. Market is a very powerful fellow, and I think Mr. Market

00:32:28.400 in the end can be more powerful than Jerome Powell, as well as Donald Trump, and if the equity market

00:32:36.440 continues to sink, as it has of late, I'm pretty sure that Trump, who's a champion of common sense,

00:32:45.560 will heed the message of Mr. Market and pull back on his tariff strategy or revise it somehow

00:32:54.540 and just suffer the consequences.

00:32:57.460 It may end up being his version of the Bay of Pigs, but still, you know, President John F. Kennedy was admired.

00:33:03.980 Yeah.

00:33:04.560 Now, you know, you were asking about a recession.

00:33:06.700 You want me to go there and talk about it?

00:33:08.000 Yeah, real quick before we get there, because you brought up a very, very good point,

00:33:11.760 and we haven't had a rate cut from Jerome Powell.

00:33:13.760 He says he wants to wait to see, you know, what Donald Trump's trade policy is and what the deal is.

00:33:20.500 We're not even baking that in the cake.

00:33:22.000 If this thing continues to go where it's going, we're almost guaranteed to get a rate cut.

00:33:27.360 Is that correct?

00:33:28.920 I think right now that's the market's assessment.

00:33:32.040 The rate cut should be here by June, but that may be too little too late.

00:33:36.140 One of the problems you have right now is that just as spending is decelerating,

00:33:42.540 for reasons I think that extend beyond tariffs and doge, we find that inflation is gaining speed.

00:33:50.720 Boy, this is somewhat similar to what happened at the start of the 2008-2009 recession.

00:33:58.760 If you recall, price inflation was taking off in that first half of 2008,

00:34:06.120 and of course would quickly subside once recession took hold and consumer spending dropped.

00:34:13.180 So the Federal Reserve is in a very difficult situation.

00:34:20.160 They recognize the economy is slowing, but at the same time, they continue to see prices rising.

00:34:28.140 That being said, I think in the end that the Fed will take its cue from a slowing economy

00:34:36.260 and go ahead and cut rates by the middle of this year, even if inflation is rising.

00:34:45.820 Yeah.

00:34:46.260 You know, John, I just have something up here.

00:34:48.700 Household debt is at $18 trillion, up $93 billion for the first quarter of this year.

00:34:55.460 So that's something to look at.

00:34:58.120 Older Americans, too, according to the AARP, AARP found that 47% of adults age 50 and up

00:35:04.220 who carry credit card debt are using their credit card to pay for basic living expenses

00:35:07.920 like food, housing, utilities.

00:35:10.200 Credit card balances are through the roof.

00:35:11.820 Banks are taking advantage of people.

00:35:13.940 APRs are 30% now.

00:35:15.440 It's unbelievable.

00:35:16.260 It's almost unaffordable for people to even use their credit cards.

00:35:19.440 You've got everyone wants to talk about the egg crisis.

00:35:21.480 Nobody wants to talk about Joe Biden ordering the chickens to be killed before he left 0.99

00:35:25.960 office, driving this damn thing through the roof. 0.98

00:35:29.620 All of this, I think, is a key indicator that points towards what you said, a recession. 0.98

00:35:35.160 Now, I want to get your take on this because my father, who was a chief financial officer

00:35:40.460 for a very large bank for a very long time, always used to tell me, John, a recession isn't

00:35:46.300 always a bad thing.

00:35:47.700 Sometimes it's a good thing.

00:35:48.620 It weeds out some of the weaker links that are needed in order to build up a stronger,

00:35:53.960 more robust economy.

00:35:55.000 And you don't have an overall, necessarily, most times you don't, recession where everything

00:36:00.620 goes.

00:36:00.980 It's either usually a market or it's a housing market or it's a stock market, whatever it

00:36:05.100 may be.

00:36:06.520 Your thoughts first on what my father used to tell me all the time about a recession not

00:36:10.240 always being the worst thing.

00:36:11.220 Well, you know, John, recessions have also been referred to as corrections.

00:36:19.600 So we're a recession.

00:36:21.520 We go through a drop in domestic spending.

00:36:25.280 We go through an increase in unemployment.

00:36:28.780 But in the end, we end up with an improved allocation of resources.

00:36:34.840 We end up with creating new opportunities and new industries for people that lost their jobs

00:36:41.380 or didn't have jobs previously.

00:36:44.480 And I would think that the next recession that could happen later this year would have the

00:36:52.540 effect of finally bringing an end to our ongoing problems with price inflation.

00:37:00.780 It might be that at long last, food becomes less unaffordable, put it that way.

00:37:09.980 I would also think that we're going to see a deep drop by borrowing costs, especially mortgage

00:37:17.800 yields.

00:37:18.700 You know, part and parcel of a recession may be lower home prices, but the combination of

00:37:24.560 lower home prices, lower mortgage yields and the eventual restoration of healthy jobs growth

00:37:31.880 would make homes affordable for first time home buyers once again.

00:37:36.980 Yeah.

00:37:38.920 When Reagan took office in January of 1981, it was in August of 1981 that was then the worst

00:37:51.000 recession since the Great Depression that got started.

00:37:57.860 And that 81-82 recession was very painful.

00:38:03.100 It had a steep jump by the unemployment rate, loss of a lot of jobs.

00:38:07.780 It created a lot of problems in the manufacturing industry, created problems with real estate.

00:38:13.740 But we pulled out of that recession in great shape.

00:38:19.680 1983, 1984 were years of robust economic growth and a rate of inflation that was well under what

00:38:31.280 held prior to the 1982 recession.

00:38:36.920 And what happened is that Ronald Reagan in an 84 presidential election won by a massive landslide.

00:38:47.200 He totally demolished.

00:38:48.920 I think it was Walter Mondale in that particular presidential election.

00:38:53.880 So Americans got over the 81-82 recession very quickly because that recession served as a great 0.98

00:39:04.140 economic correction that put the U.S. economy on a path of sustainable, non-inflationary growth.

00:39:12.860 You know, I don't, John, and I'm not just saying this because Donald Trump's the president.

00:39:17.260 In the last segment, I had plenty of criticisms about him, about how he's handling the tariff

00:39:21.660 situation.

00:39:23.320 But I don't see another way out.

00:39:26.100 And correct me if I'm wrong.

00:39:27.280 And I'm not just saying it's because Trump's the president.

00:39:29.160 Biden were the president.

00:39:30.020 It would say the same thing.

00:39:31.100 He made plenty of his own mistakes.

00:39:32.760 I mean, spending money like it was absolutely nobody's business.

00:39:37.040 But I don't see any other way out, John, from this high inflation, from food costs.

00:39:44.140 I mean, you've got on top of the inflation, John, you've got restaurants and everybody

00:39:47.900 price gouging.

00:39:48.940 You go out to a restaurant here in New York City, John, $18 for a Caesar salad.

00:39:52.980 There's no way to justify that.

00:39:54.480 You go to the grocery store, you go to Costco, and you get five heads of romaine for five bucks.

00:39:58.300 Prices have went up, John, but they haven't went up that much where you can justify

00:40:01.240 $15 for a Caesar salad or $20 for a Caesar salad when you have illegals working in your 1.00

00:40:07.500 kitchen.

00:40:07.920 So there's no way to justify that, in my opinion.

00:40:11.100 What would you identify as the number one catalyst if we were to enter this recession

00:40:16.300 that you talk about?

00:40:17.180 If we're in this recession and you talk about, what would you identify as the number one

00:40:21.540 catalyst?

00:40:22.180 Inflation?

00:40:22.540 Inflation, and I would go back to what I stated earlier, we have a more restrictive

00:40:31.320 fiscal policy, okay?

00:40:33.060 Tariffs represent higher taxes.

00:40:34.900 You couple that with cutbacks in government spending combined with an already restrictive

00:40:40.160 monetary policy.

00:40:41.800 That's why you slip into a recession.

00:40:44.240 And moreover, you know, middle income and lower income consumers have been financially stressed

00:40:50.160 for some time.

00:40:51.740 And it very well may be that this latest upturn by prices that you referred to, those higher

00:40:57.380 prices can also be found in grocery stores today.

00:41:01.540 I think this may finally be the development that breaks the back of the U.S. consumer.

00:41:08.100 They say enough is enough.

00:41:09.440 And you will see, perhaps fairly soon, a broad-based pullback in consumer spending that pushes the

00:41:17.640 U.S. economy into a recession that I would like to call a correction.

00:41:22.700 It's long overdue.

00:41:23.840 There's other problems, too, with the Biden administration and the progressive Democrats.

00:41:28.600 And that is, you know, these guys, they frowned upon the work ethic. 0.99

00:41:32.660 They said, only a fool works hard. 0.99

00:41:34.860 You're not going to get any place because AI is going to knock you out. 0.99

00:41:38.240 Why don't you just take it easy, work remotely, worry more about your vacation than getting

00:41:45.280 ahead at work, getting ahead in your career?

00:41:48.200 That attitude has got to change.

00:41:50.760 And thank goodness with somebody like Trump in office, we are going to have a meaningful

00:41:57.440 improvement in the attitude that Americans have towards work.

00:42:01.820 And without the proper attitude, you are never going to obtain those aptitudes that you need to

00:42:11.580 succeed in life.

00:42:12.980 Yeah, I think you're absolutely right.

00:42:14.300 And I'm not cheering for a recession.

00:42:16.060 I don't want one.

00:42:16.740 I look at my 401ks and my IRAs every day, John, where I'm heavily invested in oils and gas and

00:42:22.540 petroleum companies and blue chips.

00:42:24.700 And I'm sitting there like this.

00:42:26.300 But you know what?

00:42:27.340 It's a it's a long road and it's not something that's done overnight.

00:42:31.380 It's not something that's done over in a three month period.

00:42:33.900 I think you've got to give Trump a year long to prove himself.

00:42:37.340 I don't think you'd give him six months.

00:42:38.840 I think you give him a year.

00:42:39.880 And at the end of the year, if we're in a total mess, you know, we'll come out and say

00:42:43.520 things aren't looking good.

00:42:45.320 Things aren't working out.

00:42:46.200 But you can't gauge, John, in two months, one month, three months.

00:42:49.780 You get the last words here.

00:42:51.280 The floor is yours.

00:42:52.080 I have one more question for you.

00:42:54.440 And then and then the floor is yours.

00:42:55.980 What can you tell all the folks who are in here who are elderly, who are retired, who

00:43:01.160 look at their 401ks and their pension plans and are absolutely terrified losing sleep over

00:43:06.700 a night?

00:43:07.060 Because there's a lot of people, you know, whose lives depend on that.

00:43:11.480 If you don't need the money right away, sit out the storm right out the storm.

00:43:15.460 That's what I would suggest.

00:43:17.740 You know, we've seen this over time.

00:43:19.760 The U.S. equity market may drop sharply.

00:43:23.580 It could go down 40 percent, but ultimately it sets a new record high.

00:43:28.960 So it may, you know, unless you really need the cash right out the storm, especially if

00:43:36.980 you have your portfolio is well diversified.

00:43:40.520 And you if you have exposure to a company or an or an industry that may be in long term

00:43:48.000 difficulty, you may want to get out.

00:43:50.420 If you want if you're in equities and, you know, you're look, you have a lot of consumer

00:43:54.760 staples in your portfolio, some utilities.

00:43:57.840 You have companies that have been able to grow dividends over time.

00:44:02.080 Sit tight and don't panic.

00:44:05.620 I want to add one thing that's kind of interesting.

00:44:07.420 I'll talk about a recession.

00:44:09.080 And that is, you know, I worked in the corporate bond market for many years, for decades.

00:44:13.960 And I can't help but notice that the difference between corporate bond yields and treasury bond

00:44:20.720 yields.

00:44:20.980 We call that a yield spread that represents the perceived risk of corporates going into default

00:44:28.800 is still historically low.

00:44:32.140 So while at this point in time, you do see stock prices sinking, you have certain segments

00:44:40.080 of the equity mark in a correction.

00:44:42.320 They're down by more than 10 percent from the latest high.

00:44:46.240 You don't see that type of sell off in the corporate bond market.

00:44:50.580 Maybe that's encouraging.

00:44:52.180 Maybe this is a storm that will blow over quickly enough.

00:44:55.620 The fact that we have a relatively stable corporate bond market is telling me that corporate

00:45:02.760 finances are still relatively strong.

00:45:05.860 There's a lot of cash on hand.

00:45:07.700 And this also holds true for the junk bond segment.

00:45:11.140 So I'm kind of surprised.

00:45:12.800 Maybe it won't last.

00:45:14.280 But I would add that if you need the cash and you suddenly see that difference between junk

00:45:20.200 bond yields and treasury yields, now it's about three percentage points, rise well above four

00:45:26.340 percentage points, approach five percentage points.

00:45:29.260 Then that tells you that a recession may already be here.

00:45:32.860 And you've got to be braced for a deeper slide by equity prices.

00:45:39.580 And if you got the money, what's the saying, John?

00:45:41.420 If there's blood in the water, the blood in the water, go out and buy, buy, buy.

00:45:44.760 No, it's too early for that right now.

00:45:47.360 You know, you get that dividend, keep it in cash.

00:45:51.400 Don't put it back in the market.

00:45:53.080 I would wait until you see the professionals reenter the market.

00:45:58.120 I would stay out of the market until you begin to see some sign of upward momentum, sustained

00:46:04.380 upward momentum.

00:46:05.880 Unfortunately, I don't think that's going to happen anytime soon.

00:46:09.140 By professionals, do you mean Dan Crenshaw and Nancy Pelosi?

00:46:12.380 Not at all.

00:46:13.000 Oh, come on, they haven't signed information.

00:46:15.840 Real quick, John, I know they have that.

00:46:17.960 I know I said that was the last question, but I just want to ease the audience's nerves

00:46:21.960 for just a little bit.

00:46:23.260 From November 5th, when Donald Trump won the election to today, the Dow was only down 310

00:46:28.720 points, less than three quarters of a percent.

00:46:31.060 The Nasdaq's actually up and the S&P is only down 5%, 314 points.

00:46:36.300 So it's not the end of the world.

00:46:38.700 I know I said you get the last word.

00:46:40.080 You get the last word here.

00:46:41.100 OK, the last word would be that we're probably there's a good chance, a 50-50 chance that

00:46:47.500 we're going to have a recession take place in this country and start by the middle of

00:46:52.220 this year.

00:46:53.880 I would view that as a correction.

00:46:56.500 I think that it's overdue.

00:46:58.120 It's the only way that you're going to get rid of this tendency of inflation to reignite

00:47:03.540 itself all too often.

00:47:05.960 So if you want to go ahead and bring an end to this ongoing struggle with price inflation,

00:47:13.520 and if you want to have it so this economy operates more efficiently, if you want to make

00:47:18.460 progress at reducing the federal budget deficit, then there may be only one remedy, and that

00:47:26.140 remedy would be a recession.

00:47:28.220 But, you know, we've had plenty of recessions in the past that were followed by very vibrant

00:47:34.940 economic recoveries.

00:47:36.920 And if we keep the government out of the economy, we will probably go through that same process

00:47:42.960 again as we did in the 1980s.

00:47:46.220 John, thank you so much for joining us today.

00:47:47.720 John Lonsky is the CEO of the Lonsky Group.

00:47:49.660 We appreciate your words of wisdom through these tumultuous times in America.

00:47:53.420 Okay, thank you, John.

00:47:55.900 Thanks to John Lonsky, and thank you all for being with us today here on The Great America

00:47:59.620 Show.

00:48:00.240 I thought it was very important to bring John on to try to ease the nerves of some of

00:48:04.360 you folks and the American people about what's going on in the country right now.

00:48:07.960 The honest truth, not what you're getting from the mainstream media, not what you're getting

00:48:12.000 from tabloids online and, you know, external places of news.

00:48:17.420 This is John Lonsky, a brilliant man, a brilliant economist who says it just how it is.

00:48:22.300 You heard it right from him, the man himself.

00:48:24.860 Folks, we'll see you back here tomorrow with The Great America Show, we hope.

00:48:28.260 Until then, may God bless you, may God bless America, and may God bless the great Lou Dobbs.

00:48:32.760 We'll see you tomorrow, folks.

The Great America Show - March 10, 2025

DEMS AND MSM HAVE LONG PRAYED FOR A RECESSION - WILL THEY GET IT？

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