The Great America Show - MARXIST DEMS DESTROYING THE ECONOMY

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00:00:33.660 Hello, everybody, and welcome to The Great America Show.

00:00:36.660 Great to have you with us.

00:00:38.020 Some economists are saying now we're on track for a recession, but the mainstream media tells us this thing is booming.

00:00:45.560 Who to believe? Well, to get a sense of what is going on, we asked top economist John Lonsky to join us today to break it all down.

00:00:55.060 And now here is John Lonsky.

00:00:57.040 And, John, great to have you with us again.

00:00:59.900 Let's start with what looks to be a troubled economy.

00:01:04.460 We're looking at what appears to be a slowdown in so many sectors.

00:01:09.260 We're looking at yields that are stubborn and persistent.

00:01:15.560 Give us a sense of where you think this economy is right now.

00:01:20.300 The economy is slowing down, and I'm not the only one with that perception.

00:01:25.080 You know, I was shocked to look at what the consensus is forecasting for the upcoming retail sales report.

00:01:32.340 I think it's a little bit low.

00:01:33.960 But the reality is, on a year-over-year basis, retail sales are not growing much faster than 3%.

00:01:41.860 But that's in dollar terms.

00:01:43.380 And if you adjust for inflation, there's basically little, if any, real growth in terms of volumes.

00:01:49.880 That's a warning sign, because we might soon reach a point where these 200,000-plus new jobs per month become a thing of the past,

00:02:00.980 mostly because companies find they just don't need these many people on payrolls if sales aren't growing fast enough.

00:02:08.900 The layoffs mount.

00:02:10.020 With more layoffs, you'll get less consumer spending, less consumer spending, et cetera.

00:02:15.460 We end up in a recession.

00:02:17.660 So I don't think the economy is doing that well.

00:02:19.880 High inflation and high interest rates have caught up with the American consumer.

00:02:27.180 And most Americans are living paycheck to paycheck, working men and women in this country.

00:02:32.800 That's a very troubling sign as well, isn't it?

00:02:35.460 That is.

00:02:37.340 And this brings attention to the reality that many of us who follow the economy closely as professionals or in the media,

00:02:46.080 we really don't have a clear understanding of the economic troubles, the economic burdens that the average American faces.

00:02:57.060 We don't really know what's going on with middle-income Americans, lower-income Americans.

00:03:01.860 And the little that I can discover is that inflation is hurting them,

00:03:07.600 and they're also upset at the fact that their real incomes are not growing as rapidly as they did in the years prior to COVID.

00:03:18.020 I take a look at this.

00:03:19.080 You know, real disposable personal income, 2017, 2019, thereabouts, is growing by about 3% annually.

00:03:27.100 Over the past several years, real disposable income growth has slowed down to something close to 1%.

00:03:34.780 Higher prices and a much slower, if any, improvement in living standards.

00:03:41.380 The average American is scratching their head, wondering what's going on,

00:03:45.620 especially since the rich get richer through this stupendous equity market rally.

00:03:51.180 And give us a sense, too, if you will, are real wages as low as they seem?

00:04:00.260 Is inflation really taking that big a bite right now out of incomes?

00:04:07.360 You know, Lou, I'm surprised.

00:04:08.540 I talk to people whose annual incomes, and this is in Westchester County, New York,

00:04:13.980 but they're middle-income people.

00:04:15.200 They make only $100,000 to $200,000 per year per family,

00:04:19.300 and they complain about a notable loss of purchasing power.

00:04:25.320 You look at, you know, the CPI actually understates what's actually going on with price inflation.

00:04:31.680 I'll give you one example.

00:04:33.400 I think a recent monthly CPI report stated that the insurance premiums,

00:04:42.200 health insurance premiums, that is, were down by nearly 12% from a year ago.

00:04:48.500 Now, somebody who's running their own business and has to pay health insurance,

00:04:51.880 I can tell you that is poppycock and then some.

00:04:55.260 I would take that minus sign and put a plus sign.

00:04:57.560 And, of course, if you see one cockroach in the CPI report, there must be others.

00:05:02.640 So when they say that the consumer price index is up by, what, 20% since Biden took over,

00:05:09.880 I think it's probably a lot higher.

00:05:12.320 It might be closer to 30% since he took over, to be perfectly honest with you.

00:05:16.780 And that's the impression I get from these families that have family incomes in the low six figures.

00:05:23.280 They are unhappy with Joe Biden's economy.

00:05:27.240 And look at what that must make most people feel like right now when they go into the grocery store.

00:05:33.760 My wife and I were in the grocery store the other day, and I'm complaining to her about prices because it's just shocking.

00:05:42.720 It takes $200 to make a dent in the groceries you need.

00:05:50.960 And I'm thinking about working men and women, their families.

00:05:54.040 I mean, they're feeding a lot more mouths than we are. 0.98

00:05:57.640 It's troubling stuff.

00:05:59.160 It definitely is.

00:06:01.380 And I think, you know, that shows up at the consumer sentiment number that remains very much on the low side.

00:06:07.200 We have this, you know, very odd divergence between a low reading on consumer sentiment, record highs for the equity market.

00:06:16.160 Last time we had consumer sentiment so low amid a relatively tight labor market was in 1979.

00:06:24.580 We know what followed that.

00:06:26.220 We had a recession in 1980, but at least in 1979, the equity market was also on the low side.

00:06:32.860 So I'm sort of like providing a warning to people that are putting new money into the equity market today.

00:06:39.840 Be very careful.

00:06:40.960 Be very cautious and realize that you're taking quite a gamble because if this consumer does not begin to spend more or to at least maintain the current rate of consumer spending growth,

00:06:52.940 you are in for a nasty surprise.

00:06:56.220 Well, we've got 4% suddenly, 4% unemployment.

00:07:00.260 We've got dogs barking and banging at the moon.

00:07:06.860 It's really a time right now, as you say, for people to kind of try to figure out where they are in this thing.

00:07:15.120 Because I just don't see a lot of happiness here.

00:07:18.620 We've got a fiscal spending is out of control.

00:07:21.480 The national debt is going through the roof or beyond.

00:07:26.580 We're looking at just every area of policy, whether it's monetary policy, whether it's fiscal policy, you name it.

00:07:34.600 Right now, we see headwinds, as the economists like to say.

00:07:39.400 And we see some tough times.

00:07:42.880 I don't see how we avoid them.

00:07:44.640 Do you?

00:07:46.100 You're exactly right, Lou.

00:07:47.640 I think we are headed towards an economic slowdown.

00:07:51.300 And unfortunately for Joe Biden, I think the situation economically gets worse as Election Day approaches.

00:07:59.160 Quite frankly, it's Donald Trump's election to lose.

00:08:03.820 And even if after this June 27th debate, the Democratic Party concludes that they have to get rid of Joe Biden,

00:08:12.060 if they put a Joe Biden facsimile in his place, say, oh, Michelle Obama or Gavin Newsom, they're still going to lose.

00:08:20.480 I strongly sense that the average American, the independent voter, is simply tired of the left in the United States.

00:08:28.440 They are simply tired of wokeism.

00:08:30.920 They want to get rid of this.

00:08:32.000 They don't like the crime.

00:08:33.340 They don't like being told what to think.

00:08:35.560 They don't like the restraints being placed on speech and whatnot.

00:08:39.320 These are reasons that extend beyond the economy, and these are the reasons why it will take a miracle or an unexpected move to the center for the Democrats to hold on to both the White House and the Senate come this November.

00:08:59.460 We're talking with John Lonsky, one of the country's great economists.

00:09:04.280 And we're going to come right back, and when we do, we're going to talk about some interesting Trump policy initiatives that he has been talking about.

00:09:14.800 And obviously, Janet Yellen, the Treasury Secretary, doesn't like any of them.

00:09:20.080 We'll find out why that is with John Lonsky.

00:09:22.540 Stay with us.

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00:11:00.180 We're back with John Lonsky.

00:11:02.300 And, John, as we talk about the character and the direction of this economy,

00:11:07.400 one of the interesting statements coming from Janet Yellen was this,

00:11:14.840 that former President Trump's idea to replace the federal income tax with tariffs would make life unaffordable,

00:11:23.220 which is pretty rich coming from a pro-inflation administration, don't you think?

00:11:30.320 Yes, I would think so.

00:11:32.380 But I think what we want to be careful with trade policy.

00:11:36.220 We can't blindly accept this claim that free trade is always in the best interest of the United States.

00:11:44.800 It's not.

00:11:46.260 You know, when we think about international trade, we also have to take into consideration

00:11:50.840 how this affects the middle-income American, the lower-income American.

00:11:56.920 That's very important because it could be that these jobs lost wipe out any supposed benefits from free trade.

00:12:05.340 And that is where free trade allows in some relatively cheap imports.

00:12:12.140 National security.

00:12:13.920 That's of the utmost importance.

00:12:15.580 My goodness.

00:12:16.580 Do we want to go ahead and just allow our manufacturing base to be stripped away because of cheap imports?

00:12:26.140 And then all of a sudden we find that we're less capable of defending ourselves in the event of some type of conflict?

00:12:33.620 That makes no sense.

00:12:34.780 And it's important to consider who we're trading with.

00:12:39.420 A lot of CEOs love to trade with China.

00:12:43.620 They love to establish investment arms with the Chinese companies.

00:12:49.800 And they are basically disregarding the extent to which China basically does not pay any attention,

00:12:59.860 doesn't abide by some of the most simple, some of the most basic protections provided to workers.

00:13:07.080 Never mind some arguments that China is using forced labor to produce the goods that are then exported to the United States.

00:13:16.920 My goodness, you know, what Yellen is saying, I don't know if it holds much water.

00:13:21.620 And let's go back.

00:13:22.280 You know, Trump did put tariffs into effect on Chinese exports during his administration.

00:13:29.960 Yet what I recall is that the annual rate of inflation never got higher than 2 percent.

00:13:35.740 So perhaps it's somewhat of an exaggeration on the part of Janet Yellen to claim that moving towards increased tariffs will necessarily spark another bulk of persistently rapid price inflation.

00:13:51.600 Yeah, they've got such a good track record in calling inflation now at every turn, don't they?

00:13:58.280 I wouldn't listen to them for a minute.

00:14:00.600 But they're absolutely egregiously wrong time after time after time.

00:14:07.180 And when we look at what the Chamber of Commerce is promoting, it is free trade at any cost.

00:14:16.300 They are still the same outfit they were 20 years ago, despite all of the changes in leadership over time.

00:14:24.860 They are the corporatist Chamber of Commerce, and that's not likely to change.

00:14:31.380 Let me ask you this.

00:14:32.720 As we look at 2024, the end of 2024 and 2025, it looks to me like President Trump is going to have some very serious challenges going into that year.

00:14:47.080 The business roundtable, all of the major companies seem to be coming toward him.

00:14:54.700 You recall they bailed on him in the first six months of his administration in 2017.

00:15:01.660 But I think we're seeing something different here.

00:15:04.060 I'm not sure.

00:15:04.860 I think it.

00:15:06.520 But they obviously mean to get what they want.

00:15:10.400 And what they want is the status quo forevermore.

00:15:14.480 What are you what would you think if they were to actually get that?

00:15:20.140 Well, I think a small example.

00:15:22.980 I know of a financier.

00:15:25.560 He has a lot of interest in manufacturing plants in various areas and based in the United States and in Europe for the most part, some in South America.

00:15:35.680 He was, you know, a big supporter of Donald Trump at one time.

00:15:39.880 However, he changed his tune when he found found out all the money he could make with the help of government subsidies for manufacturing windmills.

00:15:50.060 OK, so what happens here is that we have the federal government that's pouring billions of dollars into non-fossil fuel sources of energy, electric vehicles, the batteries that go into these vehicles.

00:16:06.720 And once these companies start to get these government subsidies, I don't care where where the CEO is coming from ideologically.

00:16:15.600 They like that free money.

00:16:17.900 They like that tax break.

00:16:19.860 And it's going to be very hard for these business leaders to give up this type of government support.

00:16:27.460 Once Trump takes office come this, you know, January 2025, there's going to be some resistance to that.

00:16:36.500 Yeah, this is something that has to be done.

00:16:38.440 This is a total waste of money.

00:16:40.380 You know, even Nikki Haley in one of the debates said if she was if she were president, she would go ahead and get rid of these various alternative energy subsidies.

00:16:52.480 That's, you know, a small part of what lies ahead for Donald Trump.

00:16:57.980 And he'll talk about some changes in the tax code.

00:17:01.140 You mentioned the tariffs.

00:17:02.620 Maybe you want to move more towards a consumption tax, relying less on an income tax.

00:17:09.280 And, of course, another matter of contention will be whether or not the income tax cuts that took place during the administration during the Trump administration will be renewed fairly soon.

00:17:26.420 We're talking with John Lonsky.

00:17:28.220 We're coming right back.

00:17:30.220 What does the future hold for us?

00:17:31.860 This economy, what's it got up its sleeve?

00:17:34.880 We'll be right back.

00:17:36.180 Stay with us.

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00:17:52.260 Rest assured, knowing that you have emergency antibiotics, antivirals, and antiparasitics on hand to help you and your family stay safe from whatever life throws at you next.

00:18:06.840 We're back with John Lonsky.

00:18:13.100 And, John, let's talk about a couple of basics here.

00:18:17.900 And that is, first of all, inflation.

00:18:21.720 Biden has left inflation rule.

00:18:25.680 Meanwhile, we have the monetary policy.

00:18:28.980 Jerome Powell is being stubborn about rate cuts.

00:18:32.780 It seems to me that it would make some sense here for the Fed to simply come up with new targets right now because what we're seeing is also a lot of damage being done in the real estate sector, construction, and it's painful.

00:18:50.820 And yet there's no attitude adjustment, no adjustment in policy on the part of the Biden administration or, frankly, the Fed.

00:19:01.280 Yeah, you're talking about the housing sector, and I'm very much surprised by how home prices have continued to climb higher, despite the fact that we have the highest mortgage yields since, I believe, roughly 1999-2000.

00:19:20.200 This is incredible.

00:19:21.060 A 7%-plus mortgage yield, and yet home prices still manage to increase.

00:19:26.320 As a result, of course, we're looking at sharply lower homes being sold, number of homes being sold, compared to where we were prior to COVID.

00:19:41.160 And one of the reasons why, of course, two of the reasons why people are not buying homes is quite easy.

00:19:47.000 Prices are too high, and so are mortgage yields.

00:19:49.660 There's a big affordability crisis.

00:19:51.340 The only risk with cutting rates and cutting mortgage yields right now is that that might put even additional upward pressure on home prices, which is something we don't want.

00:20:04.920 I think we have to, unfortunately, go through a process that will include some easing of home prices that recent buyers of housing are not going to like.

00:20:18.520 There's no way in the world that we get affordability back down to levels where it belongs without some combination of lower mortgage yields and lower home prices and also higher incomes.

00:20:33.560 This is especially true for middle-income Americans.

00:20:37.620 You were talking earlier about the divergence with consumer confidence, consumer sentiment, as it's called these days.

00:20:46.940 Give us an idea of what you think will happen with rates and yields and prices going forward.

00:21:00.320 Well, I think what's going to happen is eventually elevated prices, high interest rates bring about a slowdown by consumer spending that pushes the U.S. economy into a recession.

00:21:15.100 And with that, we're going to get higher unemployment, slowdown on wage growth.

00:21:19.920 We're going to go through a painful correction.

00:21:24.280 And this correction or recession is going to bring attention to these big problems that face the underlying U.S. economy.

00:21:34.980 And that is perhaps, you know, we mentioned this earlier, too much competition from cheaply priced goods from abroad.

00:21:43.440 That's one problem.

00:21:44.560 This is going to bring attention to an undereducated workforce that's unable to take full advantage of advanced technologies.

00:21:55.320 And we really cannot afford to have a workforce that is relatively unskilled relative to our major economic rivals abroad.

00:22:07.620 But that comes into the play.

00:22:09.320 And we also, you know, on the business side, the corporate side, we need less regulations and we need more corporate executives who focus on making a profit instead of worrying about trying to change the world through woke policies.

00:22:27.200 It's absolutely amazing to see what corporate America has become.

00:22:33.880 Do you think, on the basis of what you just said, do you think it's likely that we'll actually see any decoupling at all from China?

00:22:45.340 And the reason I ask the question is I can't imagine how we extricate ourselves from the dependency we've created.

00:22:52.680 And that dependency is, of course, on China.

00:22:57.600 Well, it's going to be difficult to achieve.

00:23:01.620 And I think what would worry me is that it would take a military type crisis in order to expedite this decoupling from China for the U.S. economy.

00:23:15.400 It's going to be painful as we go through the process.

00:23:18.340 It's not going to be pain free under those circumstances.

00:23:22.680 And so I hope that our corporate leadership has some idea as to what their strategies will be when we come to realize that we simply cannot have this much dependency on Chinese manufacturing, that it has to come to an end.

00:23:40.940 And China is like an octopus. 0.82

00:23:42.640 You know, they're all over the world now.

00:23:44.960 They have basically all but quarter the market in copper, in lithium, in cobalt.

00:23:53.120 And this involves mines that are located outside of China, in Indonesia, in South America, and so on.

00:24:01.060 So trying to wean ourselves away from the influence of China is going to be a difficult process. 0.91

00:24:10.220 It's going to be a costly process.

00:24:12.840 It's like a tariff.

00:24:13.980 Sometimes you have to swallow the increase in cost or the increase in prices that accompany a tariff in order to assure the long-term viability of the U.S., the long-term viability of a continued increase in living standards.

00:24:32.420 John Lusky is always great talking with you, always learned so much.

00:24:38.560 And I think the audience is thrilled to hear your voice and to see what reality looks like.

00:24:46.740 We appreciate it.

00:24:47.880 Thanks for being with us, John.

00:24:49.160 Thank you so much, Lou.

00:24:50.000 And thank you, everybody, for being with us here today.

00:24:53.080 Be sure to join us tonight for Lou Dobbs Tonight, 7 Eastern, 6 Central, on Frank Speech, Rumble, Roku, and X.

00:25:01.020 Thank you, everybody.

00:25:02.080 God bless you.

00:25:03.180 And may God bless America.

00:25:04.900 God bless America.

00:25:13.920 God bless America.

00:25:16.340 God bless America.

00:25:17.480 God bless America.

00:25:18.520 God bless America.

00:25:22.360 God bless America.

00:25:25.140 God bless America.

00:25:26.660 God bless America.

00:25:27.260 God bless America.

The Great America Show - June 20, 2024

MARXIST DEMS DESTROYING THE ECONOMY

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