John Lonsky, CEO of the Lonskynky Group, joins us to talk about the Dow s 10th straight losing day on the Dow, first since 1974, and what that says about the direction of the economy.
00:15:04.340John, when we return, I want to go a little bit deeper into these interest rates going back to last six months.
00:15:09.900And a trend that looks like it's happening, I also want to go a little bit deeper into this budget that Mike Johnson's trying to force down our throats.
00:15:17.160And Jerome Powell, if he can stay in his job after doing what he's done now for the last year or so to this country.
00:15:25.840So, we're going to take a quick break.
00:15:27.280We're coming right back with John Lonsky.
00:17:08.740I have to assume for December we're going to see that trend continue upwards maybe 2.9 to 3.
00:17:16.120What happened in that period of August and September that we saw that little drop-off in inflation that now looks like it's back on its trajectory on its way back up after Kamala Harris and Joe Biden told us in October and November,
00:17:30.800I don't know about you, John, but when I pick up my insurance bills and whatnot, you know, when I go to the grocery store, I see absolutely no evidence of a declining rate of inflation.
00:17:43.640I happen to think that service sector inflation is taking off much more so than as it's measured by the Bureau of Labor Statistics, by the federal government.
00:17:55.320I don't believe any of this at all, quite frankly, and neither do American consumers.
00:18:01.640Neither did the American voter on November 5th.
00:18:07.040So I think, you know, they maybe tried to pull a stunt on the back of what had been declining gasoline prices, but that now has, you know, gasoline prices have bottomed out.
00:18:18.840They're increasing again, but worse yet, it seems as though food prices are beginning to lift off one more time.
00:18:28.300Just in time for the holiday season when Americans seemingly have to go shopping for their families and shopping to celebrate the holidays.
00:18:36.360There's so many complaints, you know, for families that have younger children above these steep price hikes for toys this Christmas season.
00:19:20.260I want to turn to Jerome Powell, who I think has played a massive role in all of this and seemingly thinking his job is safe there at the Federal Reserve.
00:19:29.320Lou didn't agree that Jerome Powell was there in the first place.
00:19:32.940I certainly don't think he should have been there in the first place.
00:19:52.980This man, it seems, is manipulating the markets.
00:19:54.940How does President Trump allow him to stay in his job knowing this man's a politician?
00:20:00.420Well, I think Trump lacks, to the best of my knowledge, the constitutional authority to fire Jerome Powell.
00:20:10.060But you say, yeah, Jerome Powell is not an economist.
00:20:13.280And by the way, the last time we had a lawyer or a non-economist like Powell had the Federal Reserve was under Jimmy Carter.
00:20:21.560The guy's name was G. William Miller and inflation went through the roof and, you know, cost Carter any chance at being reelected as president back in the election of 1980.
00:20:36.240So it's sort of like history is repeating itself.
00:20:39.980You know, Powell's he's a political animal.
00:20:43.900You mentioned the Inflation Reduction Act, that act that had the effect of swelling the budget deficit and actually should have been called the Inflation Preservation Act because it extended the spout of rapid price inflation and elevated prices.
00:21:01.520When he was Fed chairman, did Jerome Powell ever question the wisdom of this Inflation Reduction Act that added to government spending, government subsidies?
00:21:42.960You had Janet Yellen, who I think is, I thought at least, was a hair smarter than Powell.
00:21:48.280It seems that she's completely either lost her mind or I don't know what she's up to.
00:21:51.680But she was sitting there cheering this thing on, and she knows damn well that everything her party was pushing was not good for the economy and not good for Americans, John.
00:22:01.780Yeah, they were not being honest about the economic cost of this reduction in carbon emissions.
00:22:09.680Believe me, if they followed through on the plan proposed by John Kerry and company, the cost would have been humongous.
00:22:17.040The cost would have led to higher inflation and slower growth and the loss of tens of thousands, if not more, in terms of jobs.
00:22:26.920If you want to do something like this, at least be honest with people.
00:22:32.140Don't try to sugarcoat a change in the functioning of the economy that in all reality would prove to be very, very costly.
00:22:42.620And I think the American people caught on to this.
00:22:44.900They realized that this was a giant scam, if you like.
00:22:50.240I want to I want to turn to something, too.
00:22:52.180It's another issue, and it's coupled with another issue.
00:22:55.600And we'll try not to play politics on it because you are an economist.
00:22:59.780The fact that U.S. real wages, if you look at what they are continuously on a decline from April of 2021 to flat now, I mean, completely flat.
00:23:21.920People aren't making more money to adjust for inflation.
00:23:25.180And to adjust for inflation right now, you need to make it get a considerably high promotion or raise.
00:23:31.580And these companies are just not doing it.
00:23:33.800But it seems like companies now are making more money than they've ever made before.
00:23:37.640A lot of companies exploited COVID, raised prices when they didn't need to be raised as high as they were.
00:23:43.920Hopefully, these people pay the price for what they've done.
00:23:45.960But you couple that now with illegal immigration and the illegals that are taking jobs in this country.
00:23:52.000And then you couple that, John, with what President Trump wants to do when it comes to tariffs in this country and adding tariffs onto countries like Mexico, countries like Canada, countries like China, who have been eating our lunch for the last four years now.
00:24:15.860You know, they're taking jobs from American people, allowing – and it's these folks.
00:24:20.600I spoke to Victor Ovia the other day, a very good man on the border.
00:24:25.100It's these folks who are hiring them in cities like New York, right?
00:24:29.200They're hiring these illegals to come work construction jobs or restaurant jobs.
00:24:32.540They're paying them, you know, half the wages of what an American or illegal citizen would be making.
00:24:37.700And they're driving wages down for folks who could have those jobs.
00:24:42.000What do you see coming January, now January 20th, as it comes to illegal immigration, the deportations, and what it will mean for real wages for American people?
00:24:52.860Hey, wage depression by illegal immigrants helps to explain why the Republicans did so much better with your lower-income voter in the United States.
00:25:33.600And what I find to be funny about this is the fact that you have these proponents of a sanctuary city, these well-off liberals, you know, from towns like around New York City,
00:25:46.880from Rye, Chappaqua, Bronxville, Scarsdale, whatever, you've got to go ahead and let these people and take care of them.
00:25:54.580But I'll be damned if these limousine liberals want to have these illegal immigrants housed in their own communities.
00:26:03.080I'll be damned if they want to have their kids going to their schools that they pay such high taxes for in order to fund these schools.
00:26:14.780So you've got to sympathize for those people getting hurt by this.
00:26:18.760And you really have to get angry at the people who push for these types of policies, who have this way of making sure that they're insulated from paying the cost of such policies.
00:26:32.600You know, it's funny you brought that up about the hypocrisy, but you remember what happened when I think it was DeSantis or Abbott flew them up to Martha's Vineyard.
00:26:40.880They couldn't get them out of there fast enough, John.
00:26:55.340And they did this prank I saw the other day.
00:26:57.880And they brought a petition to these really rich white neighborhoods and they brought it to the they find Democrats and they bring it to the door.
00:27:05.460They say, do you support bringing illegals into our city?
00:27:11.860And they had a boss, a yellow bus pull up outside with all these fake actor migrants get out and they start filing it to this lady's house, about 10 or 15 of them.
00:27:20.680And no, no, no, no, no, no, no, no, no.
00:27:23.420But it's literally the hypocrisy of it all.
00:27:25.580Well, John, you bring them in here, then you should you should house them.
00:27:44.060There's a lot of room for cost cutting.
00:27:46.720Unfortunately, as I said earlier, this will involve getting rid of people that really aren't needed.
00:27:53.280Of course, these people now go into the private sector and that perhaps will provide the private sector with a badly needed supply of labor.
00:28:03.180And over time, of course, the economy will grow more rapidly than otherwise.
00:28:23.340You know, Senator Mike Lee of Utah has introduced legislation to ban illegal immigrants from receiving public benefits.
00:28:30.840And I tweeted this out. If you do this, coupled with penalizing those folks who hire them and you get this border fixed, I guarantee you, you could fix this migrant issue in probably less than two years that President Trump has with this, at least Republican Congress.
00:28:47.820You stop giving them government subsidies, health care and schooling.
00:28:51.800They have no constitutional right to help.
00:28:54.520We don't even have a constitutional right to health care as Americans, John.
00:28:57.540Yeah. And what we should, you know, the State Department should wake up to their part of the problem and that they should go to these countries where the illegal immigrants are coming from and tell them it's time to shape up.
00:29:10.460It's time to get rid of their silly socialist or Marxist doctrines that's restrained growth in all these different economies.
00:29:17.460And also they have to push a lot of the corrupt officials, government officials from these Latin American economies and elsewhere out of office, try to clean up the act overseas.
00:29:29.720And I'm going to go take I'm going to go a stretch further.
00:29:32.580I'm going to go across the Pacific Ocean and I'm going to make a forecast.
00:29:36.980And that is that as long as China remains allied with Russia and Iran and North Korea, the Chinese export engine will never roar the way it did in the past.
00:29:54.320Chinese exports will not do that well.
00:29:56.960The Chinese leadership has made a humongous, huge mistake that they need to correct.
00:30:02.140If they want to have the Chinese economy return to the type of growth that provides the Chinese youth with the opportunity of finding a job.
00:30:12.660I think the Chinese youth unemployment right now is above 25 percent.
00:30:17.200I've been told that youth unemployment in China is so bad that Chinese young people are leaving the cities of China and moving to rural areas to take up a newfound occupation as a farmer.
00:30:34.760You know, it's kind of crazy because I've been on the show and Lou's been on the show and Lou's been doing it for 30 years.
00:30:40.240I'm just criticizing the Chinese as masters of deception because everything they do is a lie.
00:30:46.480I mean, the Chinese people individually, I'm saying the CCP, the Chinese government, everything that they tell us is a lie.
00:30:52.100They told us 100000 people died in China from covid.
00:30:55.020OK, you know, I got a million dollars for you if you can prove that to be true.
00:30:59.300But it's it's now become the American government has become the same exact way when it comes to lying.
00:31:05.880I want to take one more quick break here.
00:31:07.460We're coming back with John Lonsky is the CEO of the Lonsky Group.
00:31:10.240And I want to go a little bit further into these tariffs that President Trump plans to to enact on, like I said, Canada, Mexico and China,
00:31:19.940just being the three of the three main ones who have been eating our lunch for the last four years and what it means for this economy.
00:31:25.400I also want to take up that nearly 1500 page omnibus bill that Mike Johnson wants to give us all as a Christmas gift.
00:31:33.540So nice of him. We're coming right back with John Lonsky. Folks, stay with us.
00:31:36.500I'm excited to announce our Christmas extravaganza is finally here.
00:31:43.440Get this season's flannel sheets for as low as fifty nine ninety eight.
00:31:47.480They won't last long, so get them while you can.
00:32:57.780It's going to kill the American economy.
00:32:59.980We're not going to be able to afford anything.
00:33:02.120Well, if I look at it the way it is right now, things are pretty pretty unaffordable.
00:33:07.180If you look at the amount of debt people are in and the price of things and the inflation that's hit them,
00:33:13.280how much worse can it possibly get under these these tariffs that they say is going to get so bad, John?
00:33:16.980Well, you know, let's not overlook the fact that the imposition of tariffs on exports from Canada, Mexico and China are contingent on these countries doing something to help stop the inflow of illegal immigrants into the United States.
00:33:38.780Whether or not these tariffs are going to be imposed depends upon the willingness of these three countries to halt the inflow of fentanyl that has contributed to so many deaths in the U.S., so many so much heartache.
00:33:58.520So Trump is using the threat, the threat of tariffs as a negotiating tool, a negotiating chip.
00:34:07.540And the reality is that because we have such a large consumer driven economy, I mean, he has the balance of power.
00:34:18.420He has a strong bargaining position dealing with Canada, Mexico and China, I think, on these issues.
00:34:26.260And I'm pretty sure given the sad state of affairs as far as China is concerned, the underperformance of the economies of Canada and Mexico, people don't know this,
00:34:36.720but I think the Canadian economy is growing about one point two percent versus we have nearly three percent growth in the United States.
00:34:44.520Likewise, in Mexico, a relatively poor country, you're getting economic growth of less than two percent.
00:34:51.660These countries are in a weak position vis-a-vis the United States, and perhaps they have no choice but to agree to do more to halt the inflow of illegal immigrants and the inflow of fentanyl into the United States.
00:35:07.780And this would be, you know, a feather in Trump's cap if he manages to successfully get what he wants.
00:35:14.780You know, if you look at, John, if you look at America's imports, among the top three things that they're importing are computer goods.
00:35:25.600You know, Tim Cook sending his Apple computers over here.
00:35:28.500And the reason I bring this up, I should preface it with this is, you know, there's some on the left who say, OK, well, Trump, it's almost like they're playing for the other side, which drives me nuts.
00:35:37.560John, you see these folks on Twitter and hopefully you don't spend as much time on Twitter as I do because it makes me angry.
00:35:42.340But you see these folks on Twitter who are like rooting against America.
00:35:46.480You know, oh, Trump puts tariffs on them.
00:35:48.580They're going to get us with tariffs, you know.
00:35:50.260So if you look at among the top three things that America imports cost wise, luxury vehicles from Germany.
00:35:57.620So, OK, you guys want to put tariffs on?
00:36:12.580I guess, Tim, you're going to have to find a place out of China to start making your computers.
00:36:17.100And if you want to keep selling computers, because I'd have to assume America is probably the number one consumer of Apple products in the world.
00:36:24.040OK, Tim Cook, maybe it's time for you to learn your lesson and go start making them somewhere else.
00:36:28.520I understand that there's certain things you can't make in America.
00:36:55.700I mean, my goodness, you could go ahead and help bring inflation down pretty quickly if the federal government, instead of discouraging drilling for oil and natural gas, tries to encourage the production of oil and natural gas.
00:37:12.320That's just another example where the Democratic Party failed to make the American people understand just how very costly this pursuit of zero carbon emissions is.
00:37:26.960Do you really want to go down that path?
00:37:29.300Well, you know, you have to be willing to pay the cost.
00:37:32.280And as you hinted at, these costs are going to be borne unequally.
00:37:38.400People with a lot of money, upper income Americans, are not going to feel the same amount of economic pain as middle income and lower income Americans will if you follow through with further reductions in the ability of the United States to drill for oil and natural gas.
00:37:58.320John, I got another thing we got to talk about because it's just happening this week as if the not so bright have gotten dimmer out in California.
00:38:07.540They just approved the ban of gas powered cars to sell the gas to sell gas powered cars by 2035.
00:38:15.920I mean, you see what happened in this election with regard to New York.
00:38:21.640President Trump getting a million more votes in New York this time than he did last time.
00:38:27.080President Trump won Beverly Hills County, John, the probably most liberal place in America, where if you walk down the street and you're wearing one of these hats, it's over for you.
00:38:37.760President Trump winning Beverly Hills, California for the first time in a very long time.
00:38:43.900Do these people not read the writing on the wall, John?
00:38:47.200With this last election, you want to go ahead now and ban gas cars because everyone could go out and afford to go buy yourself a brand new electric vehicle.
00:38:57.080Yeah, you have to have the charging stations and whatnot.
00:38:59.840You have to have the electric power generation capacity to provide the power so you could use electric cars.
00:39:09.340But on top of that, you know, talking about electric generation capacity, let's not forget about the demands now being imposed on power generation by the development of artificial intelligence.
00:39:23.060My goodness, that's supposedly going to soak up, I don't know, billions of kilowatts in order to reach its full potential.
00:39:33.420So, but where's the electric power going to come from?
00:39:38.280It's going to come from natural gas powered plants, maybe a few oil powered plants and perhaps nuclear plants.
00:39:45.760But all of a sudden, of course, these people that were so opposed to nuclear energy are now very much in favor of it so that they can get full use of artificial intelligence.
00:39:56.900And perhaps at the same time, have enough power left over for electric vehicles and you need a transmission facilities.
00:40:05.240And so many communities don't want these new power lines going through their community.
00:40:10.920We could go on and on with all of the problems that these grandiose plans and goals of the Democratic Party present to the United States.
00:40:21.900Yeah. You know, the other thing people don't talk about it, I talk about it often on the shows, where do you dispose of the batteries, John?
00:40:28.540Where do you, if you care about the environment so much, if you're a simple engineer, it doesn't take an engineer to figure it out.
00:40:35.900If you're a simple engineer as an American folk, where do you dispose of these batteries, these lithium ion batteries that if catch fire, these things explode?
00:40:44.380Where do you dispose of them if you care so much about this environment?
00:40:46.740Well, you're going to put them in the same place where you put the spec uranium fuel rods, I guess, bury them in some mountain in Nevada.
00:40:57.220It's these people, you know, I can't really fathom what goes through their mind.
00:41:02.380They can't think ahead. That's what it comes down to.
00:41:05.380They can't fully appreciate how complex their goals are and how difficult and how costly it will be to reach these goals.
00:41:13.920Maybe it's best to just allow the market to decide how we're going to proceed with whatever powers motor vehicles.
00:41:23.140You know, you have climate change, you know, if you have a lot of storms or fires in an area, the insurance companies will help you solve that problem.
00:41:33.160People will learn their lesson and try to avoid areas that are susceptible to natural disasters.
00:41:40.040I mean, to be quite frank, if you want to get rid of fossil fuels, the most efficient way of doing so is by increasing the federal excise taxes on fossil fuels.
00:41:52.560But believe me, no politician is willing to propose to do that if they have any hope of getting reelected.
00:42:01.920It's almost like you have a brain that a lot of these it's it all boils down and it doesn't take a brain scientist.
00:42:08.960I'm not saying you're an honest and you're a very smart man, but you're not a environmentalist.
00:42:13.940You're not any of that stuff. You're not an engineer.
00:42:15.720You're an economist and you understand it.
00:42:18.100And, you know, I think a lot of people on the show, if not the whole entire audience, understands what's going on, what the government's trying to do to us.
00:42:25.300I want to talk about something else that the government's trying to do to us, and it's trying to pass a fifteen hundred page omnibus before Christmas, just as they like to do every single year.
00:42:38.380Passing of Mike Johnson's woke policies, whatever he wants.
00:42:42.860Also, we mentioned real wages stagnant.
00:42:45.840John Congress, those members of Congress somehow are going to be voting for a 20 percent raise for themselves, a little bit higher than inflation.
00:42:54.060So they're you know, they're getting the long end of the stick.
00:42:57.880They're going to be making over two hundred thousand dollars a year, almost three times more than the average household median income in America.
00:43:04.800Thirty. What are we at? Thirty two trillion, thirty three trillion dollars in debt.
00:43:08.160Now, John, what's going on with these folks in D.C.?
00:43:16.960Just crazy. You know, you're running a deficit of over six percent of GDP.
00:43:21.040Historically, you don't get a budget deficit above six percent of GDP unless you are in a recession, unless you have high unemployment.
00:43:30.540But by the way, today we have a near full employment economy.
00:43:34.200And nevertheless, we still run this huge federal budget deficit.
00:43:38.140And I guess that's one of the reasons why you should not be confident about disinflation becoming well established in 2025.
00:43:49.080OK, so the people in Washington, let them have their last fling.
00:43:54.400This is it, because come inauguration day around January 20th, things will change dramatically, I believe.
00:44:02.940And it will be following the inauguration, a time of some significant belt tightening in D.C., a time of material reductions and federal spending that are so very important.
00:44:18.060If we are going to get rid of this inflation problem, if we're going to get interest rates and mortgage yields back to where they were prior to COVID, say, in 2019.
00:44:29.660We haven't had a budget passed in, I think, over 20 years, maybe more.
00:44:34.880I don't understand why the Republicans are so feckless in the sense, shut the government down.
00:44:44.060Let the constituents call these members of Congress, the folks on this show, probably we give out the number every single day, who call these folks and tell them what they want.
00:44:54.340I mean, what are we going to do when I have kids and I have to explain to them, well, now we're $60 trillion in debt and we have no plan to pay that off, which means there's only one possible thing, John, and we default on that.
00:45:07.440Everyone knows what happens when you default on something, you lose it.
00:45:10.880What's that going to do to American currency when eventually one day we default on it because we can't simply keep printing money anymore and people don't respect the dollar anymore because it's worth absolutely nothing.
00:45:21.760Because these politicians decided to run our debt up and I'm saying $60 trillion, it's probably going to be more than that one day, hopefully not in my lifetime, but the way things are going, it's looking awfully like that.
00:45:33.200Why don't the Republicans say, okay, that's fine.
00:47:08.400We spend a huge amount of money on health care, and yet we find that this is a relatively unhealthy population in the United States compared to other advanced economies.
00:47:20.200There's so much that needs to be done in D.C., and, you know, I would say this is going to be the last gasp for those big spenders in Washington, that everything should be changing after Inauguration Day.
00:47:35.840And, you know, as I noted earlier, that these major changes, these pullbacks in government spending, unfortunately, are going to entail some pain.
00:47:46.640It seems President Trump is literally the only man, not in D.C. yet, but who's been in D.C., who has the gut to go ahead and say, shut it down.
00:47:55.800He famously told Nancy Pelosi and Chuck Schumer, which they paraded, shut the thing down.
00:48:02.760He's the only man, I think, probably that I've ever seen in my lifetime who is trying to cut the national debt, who's trying to get a balanced budget through.
00:48:12.260If COVID didn't happen, his plans were to start paying down the national debt.
00:48:15.340It would have been the first time we've seen a president do it in how long, John?
00:48:18.520It seems that things are just things that are just common sense, aren't so common for these folks in D.C., and I don't know if it's on purpose, John, or if it's by design, but it doesn't seem like there's one person there.
00:48:30.100A lot of these guys come out, they'll go on Fox News, they'll go on CNN, they talk tough, but when push comes to shove, they go ahead and vote for that C.R., that continuing resolution, C.R. after C.R.
00:48:40.380C.R. after C.R., I don't think Mike Johnson's the man for the job.
00:48:44.320As we wrap up here, what's your thoughts on how we push forward into this new year?
00:48:48.360Do you think the Republicans grow a backbone and say enough's enough?
00:48:52.940Our grandchildren have a country that they need to be left to them.
00:48:56.600Our children need a country to be left to them.
00:48:59.940What do we see going into this new year in regard to this omnibus?
00:49:03.820Well, John, I hope we see that backbone come January.
00:49:07.900I mean, that's so important to the future of this country.
00:49:11.020And the Republicans have to be willing to take the risk of imposing some pain on Washington for, you know, the purpose of putting this country back on the road to prosperity,
00:49:28.220on the road to real wage growth, on the road to hope as far as younger Americans are concerned about their economic future.
00:49:41.620One thing I left out there is Mike Johnson tweeted out earlier this year when he took over the gavel.
00:49:47.660There will be no budget passed if it doesn't have border security in it.
00:49:52.180Lo and behold, John, there's no border security in this bill.
00:49:54.280I just had to get that in there to let the people know that this man is a snake loose, called him from what he is from the beginning.
00:50:00.560We got calls from his office to please relent and back up.
00:50:03.680When I told Lou about those calls, Lou says, I will do no such thing.
00:50:07.000And as a matter of fact, I will go harder now because, you know, there's very few people, John, as you know, you know, Lou for a very long time.
00:50:14.660There was very few people who were willing to call it out for what it was.
00:50:17.460And we all miss him and his loud voice because there's nobody who's willing to go ahead and say enough's enough.
00:50:27.460John, we hope you have a Merry Christmas and a Happy New Year.
00:50:29.920And we hope that when we talk to you in the new year, this country is off to a good start or a better start than we were off to this past new year.
00:50:38.620Yeah, we hope that we're in a position several months from now where we can have hope for the future and some faith in the operation of the federal government, which right now is sadly lacking.
00:50:52.580You know, there's just too many young people out there that don't have any confidence in the future.
00:50:57.600And there needs to be changes that begin in Washington, that begin with the presidency and with the Congress that puts this country on firm footing for the future.
00:51:11.280I'll end with this, as Colonel McGregor reminded me on yesterday's show.
00:51:15.340As Lou famously used to say, America's got the best government money can buy.