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| Our country fairly. | ||
| We want the museums to talk about the history of our country in a fair manner, not in a woke manner or in a racist manner, which is what many of them, not all of them, but many of them are doing. | ||
| Our museums have an obligation to represent what happened in our country over the years, good and bad, but what happened over the years in an accurate way. | ||
| Thank you very much, everybody. | ||
|
unidentified
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Thank you, Fresh, thank you, Fresh, thank you. | |
| Thanks, guys. | ||
| Cut it out right here. | ||
| Thank you, Fresh. | ||
| Thanks, guys. | ||
| Cut out right this way, right this way. | ||
| Thanks, guys. | ||
| Keep coming. | ||
| Thanks, guys. | ||
| Thanks, guys. | ||
| Thank you, guys. | ||
| Thank you, Press. | ||
| Thank you very much. | ||
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unidentified
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Thanks, guys. | |
| Thank you, Fred. | ||
| Let's go. | ||
| Let's go. | ||
| Thank you, Fred. | ||
| Thank you. | ||
| Thank you. | ||
| Looking ahead on our live coverage today at 2:30 p.m. Eastern, Governor Gavin Newsom and other California officials respond to the GOP-led redistricting efforts in Texas. | ||
| Then at 4, a conference on liberalism in the 21st century, where scholars will discuss new threats to democracy from authoritarian leaders. | ||
| And later, the United Kingdom's ambassador to the U.S. speaks about trade, technology, and transatlantic relations at the Chicago Council on Global Affairs, live at 6:30. | ||
| And tonight at 8:30, more from the Liberalism Conference with remarks by Russian opposition leader and former political prisoner Vladimir Karamirza. | ||
| You can watch all of these events live here on C-SPAN on our free mobile video app, C-SPANNOW, and online at c-SPAN.org. | ||
| And past precedent. | ||
| Why are you doing this? | ||
| This is outrageous. | ||
| This is a kangaroo car. | ||
| This fall, C-SPAN presents a rare moment of unity. | ||
| Ceasefire, where the shouting stops and the conversation begins. | ||
| Join Political Playbook Chief Correspondent and White House Bureau Chief Dasha Burns as host of Ceasefire, bringing two leaders from opposite sides of the aisle into a dialogue to find common ground. | ||
| Ceasefire this fall on the network that doesn't take sides, only on C-SPAN. | ||
| Welcome back to Washington Journal. | ||
| We're joined now by Vance Ginn. | ||
| He is former chief economist and Office of Management and Budget under the Trump administration. | ||
| He's also founder and president of Ginn Economic Consulting. | ||
| He joins us to talk about President Trump's economic policies. | ||
| Vance, welcome to the program. | ||
|
unidentified
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Thank you. | |
| It's a pleasure to be with you today. | ||
| So tell us about your background first and what your role was during the first Trump administration. | ||
|
unidentified
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Sure. | |
| I was the chief economist, also known as the official title as Associate Director for Economic Policy at the Office of Management and Budget in the first Trump administration, kind of like the last year, June 2019 to May 2020. | ||
| I've also worked in a lot of public policy and think tank area for over a decade now, working on many issues at the state, local, and federal level. | ||
| Recently came out with a book called Empower Patients. | ||
| So I'm also working on healthcare policy, just a number of different areas. | ||
| But at the end of the day, I'm an economist, I'm a dad, and a husband. | ||
| And those are the types of things that I really enjoy. | ||
| So I want to start with the latest numbers, the inflation numbers, Axios with the headline, Keep Consumer Price Index Gauge Rises. | ||
| What's the takeaways from those latest numbers for you? | ||
|
unidentified
|
Well, when you look at inflation in growing about 2.7% over the last year for overall headline CPI, the Consumer Price Index, which is a good measure of the basket of goods and services that the urban people pay across the country, it's what the Fed looks at. | |
| It's what other folks in the government like to look at. | ||
| So that's up quite a bit. | ||
| When you look at, and it has moderated some, it was up 9% back in 2022, so it's only up 2.7, but that means it's still increasing. | ||
| Prices are still increasing. | ||
| If you look at, if you exclude food and energy, which of course we all buy, but happen to be more volatile over time, it's at 3.1%. | ||
| And so that's about a full percentage point higher than what the Federal Reserve, our central bank, would like it to be, closer to 2% when they look at their flexible average inflation target. | ||
| And so that shows that inflation is still hot. | ||
| It's still growing too fast. | ||
| And especially when you start looking at some of the areas that people spend a lot of money on, like their shelter, that's still growing at a pretty rapid pace. | ||
| Food has started to go up again as well. | ||
| And so those are the types of things that I look at and say, okay, the American people have had a tough time during the four years of Biden with higher inflation. | ||
| And it's moderated some, but it's still way too high. | ||
| And I think that's a combination of excessive government spending by Congress, but also the Federal Reserve printing too much money over a short period of time over the last couple of years. | ||
| And there's still a lot of liquidity or cash that's flowing across the system. | ||
| Too much money chasing too few goods. | ||
| You're going to get higher inflation over time. | ||
| And that's exactly what we're seeing now. | ||
| And have President Trump's tariffs impacted that number, do you think? | ||
|
unidentified
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Well, you know, when you look at the tariffs, right, and they've been on again and off again. | |
| We had the first ones coming in on April 1st, and I guess it was April Fool's Day because they kicked it back a month. | ||
| But we have seen a 10% across-the-board tariff on most countries across the globe. | ||
| And so that does increase the cost of production. | ||
| When you look at the imports that we have here in the United States, about half of those are intermediate goods that businesses buy, like raw materials, things of that nature, that go into the final production process. | ||
| And so that will influence a lot of business costs. | ||
| At the same time, we also have half of them that are final goods and certain goods in particular that we buy as American consumers that we also pay those tariffs. | ||
| Because we've got to remember first that tariffs are taxes, and they're taxes on imports paid by American consumers. | ||
| We could talk about the burden, how maybe initially some of these businesses, whether it's foreign or domestic, pay for that. | ||
| But at the end of the day, people pay these taxes, not companies. | ||
| The last time I saw a business can't pay a tax, it's just a building. | ||
| It's really the people inside there, the employees, the employer, your shareholder value, things of that nature. | ||
| So we are seeing those costs throughout the system. | ||
| But it doesn't necessarily mean, like some would argue, that the inflation measure itself will go up. | ||
| To me, that only comes from increases in the money supply and the Federal Reserve's excessive monetary or expansionary monetary policy. | ||
| It doesn't come from the tariff directly, but what you will see are individual prices that have tariffs on them, like steel and aluminum and many other things that we're importing. | ||
| You have relative price changes versus the overall increase in inflation metrics like the CPI. | ||
| So I think that's where we're really seeing a lot of the distortions that have taken place from these tariffs that have been put in place by the Trump administration. | ||
| I want to ask you about the revenues from tariffs. | ||
| I heard you say that it's people, it's American consumers are paying this money. | ||
| The Washington Times has an article where it says that Trump tariff revenue jumps to $25 billion monthly as inflation holds steady. | ||
| Now that's over, that's higher, that's up from $7 billion a year ago. | ||
| So it was $7 billion a year ago. | ||
| Now it's $25 billion. | ||
| Will that have an impact on reducing the deficit and improving the economy overall? | ||
|
unidentified
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Well, when you look at any sort of tax collections, and these are higher taxes that are coming in to the government from these imports paid by Americans, you're going to see that if the spending doesn't increase at the same rate and you have an increase in taxes, then the deficit would necessarily go down. | |
| But we've also seen is that spending is growing at a rapid clip as well. | ||
| And so we've got to get control of spending, which is the ultimate burden of government on its people. | ||
| And so what I've seen, and there's some talk about this, like you said, the $25 billion, if you annualize that, make it over a year, we can see $300 plus billion dollars of revenue, tax revenue that's collected by the government that's coming in. | ||
| And that's a massive increase. | ||
| This is a large increase from prior years because of that 10% tariff. | ||
| I mean, if you look at the average tariff tax rate that's hitting people now, it's around 15, 16% versus before these tariffs were put in place, it was only 2%. | ||
| So we've seen a substantial increase in these tariff rates overall. | ||
| And there's also been some discussion about what do you do with this extra money. | ||
| Some have said giving rebate checks to Americans and sending it back. | ||
| But I think that would create more dependency on government, having these rebate checks being sent out. | ||
| Instead, I would rather see the tariffs go away. | ||
| At some point, I think we need to know what the endgame is with the Trump administration. | ||
| In the first Trump administration, when I was there, there was a zero-zero policy, zero tariffs, zero trade barriers. | ||
| We were trying to get to some measure of free trade. | ||
| At least that was what the rhetoric was. | ||
| Now, I don't hear a lot about that. | ||
| It almost seems like these tariffs are going to be permanent. | ||
| That's why they're trying to give tax rebates. | ||
| That's why they're looking at other ways to either spend the money or send the money back, which indicates that it could be more permanent. | ||
| And I think that would be a step in the wrong direction. | ||
| If this is a good idea to do something to get a negotiation, you know, bring the other side to the negotiating table, whether it's China or other countries, then do that. | ||
| But don't make this a permanent form of taxation. | ||
| We've got enough taxes to deal with already. | ||
| And if you think about, well, can it replace the income tax? | ||
| If it brings in $300 billion a year or maybe $3 trillion over a decade, if you have that average per year, you know, that sounds like a lot. | ||
| But you've got to remember that income taxes alone bring in about $3 trillion every year. | ||
| So it's not enough money. | ||
| It's only about 10% of the amount of income taxes that are coming in. | ||
| So it's not enough to replace the income taxes. | ||
| So I'm hopeful that the Trump administration will have used these, get rid of them as quickly as possible, because I think it's distorting the overall economy and a lot of supply lines. | ||
| At the end of the day, it also is about control. | ||
| I mean, American people should be able to buy from whoever they want to buy from and not have the government dictating where those dollars are going. | ||
| I want to ask you about interest rates, but before I do, I'll let people know that if you'd like to join our conversation with Vance Ginn about President Trump's economic policies, you can do so. | ||
| Our lines are bipartisan. | ||
| Republicans are on 202748-8001. | ||
| Independents are on 202-748-8000. | ||
| And Independents 202-748-8002. | ||
| You can start calling in now. | ||
| Vance, your substack has this headline: CPI still running hot. | ||
| The Fed can't afford to cut rates. | ||
| However, Secretary of the Treasury Scott Bessett says this on Bloomberg. | ||
| Bessett urges Fed to lower rates by 150 basis points or more. | ||
| I want to play you a portion of his comments and then have you respond to that. | ||
| I think what we could see is that, first of all, what if the BLS data had been the higher quality and we'd had those numbers, Jonathan? | ||
| So if we'd seen those numbers in May, in June, I suspect we could have had rate cuts in June and July. | ||
| So that tells me that there's a very good chance of a 50 basis point rate cut. | ||
| And I think President Trump is very good at giving these nicknames. | ||
| And I think the reason that Jay Powell gets the nickname too late is because he wants to go into a series of rate hikes. | ||
| He's not willing. | ||
| He's not Alan Greenspan, who is very forward thinking. | ||
| They try to be more data-driven, which I think is a mistake, because I think we are going back into an economy like we had in the 90s. | ||
| So, you know, it's just very old-fashioned thinking. | ||
| But I do think we could go into a series of rate cuts here, starting with a 50-basis point rate cut in September. | ||
| If you could put that into perspective for us, Vance, 150 basis points, is that drastic? | ||
|
unidentified
|
Well, it is. | |
| I mean, currently the federal funds rate, which is the overnight lending rate between banks that the Federal Reserve targets, they don't control interest rates. | ||
| They target the interest rates with their money supply creation in which assets that they buy, in particular the Treasury securities in this case. | ||
| And it's the current range that they have it in for that federal funds rate is 4.25 to 4.5%. | ||
| So if you were to cut it from 4.5% by 1.5% points or 150 basis points, as he mentioned, then you're looking at a 3% federal funds rate. | ||
| So that's a pretty substantial cut from where it's at today. | ||
| But I think that's not a good idea at this moment. | ||
| I mean, it would be great because mortgage rates could come down. | ||
| The interest rates that are being paid on the treasuries, meaning that on the national debt, which just went over $37 trillion, which is a massive amount, the interest on the debt payments would also go down, which are exceeding about $1 trillion a year right now. | ||
| So that would be good indications. | ||
| But that or a good step in the right direction as far as the Congress goes and our national debt. | ||
| But really what needs to be done is the cutting spending. | ||
| Spending is what's mainly driving the national debt over time, the primary driver. | ||
| And so I think that's really where you should start instead of trying to bring down interest rates. | ||
| The other thing is that I would kind of go against what Treasury Secretary Besson said was when you look at the labor market, yes, the labor market is weakening. | ||
| And I think whether or not the BLS, the numbers are biased or other things are going on, I think there is some truth to that in the sense of not necessarily biased from a political standpoint, but because of the way that they collect the data, the survey responses are down dramatically from where they were even during 2020, during COVID and everything else. | ||
| You also have some seasonal adjustments. | ||
| After the Trump lockdowns happened and the economy was shut down, that contributed to years of seasonal base adjustments that have now been biased in different directions. | ||
| But if you actually look at the trend since 1965 of revisions, and last month there was a revision, or sorry, this month's Johns report that came out, they revised the previous two months by about 260,000 jobs lower, which sounds like a lot. | ||
| But as a percent of employment, right? | ||
| And it's well within the margin of error. | ||
| And those revisions have been going down since 1965 as a percent of employment. | ||
| And so I don't see that there's a huge concern to be had at this time, even though I do think that there are reasons to improve how we collect those data. | ||
| And bringing all this together now, though, to answer your question, is that Bessett was talking about the labor market and a reason why the Federal Reserve would be cutting because the Federal Reserve has this dual mandate of price stability and full employment. | ||
| They also have some regulatory power and other things that are out there. | ||
| But the one thing that they can control is inflation. | ||
| They cannot control the real labor market. | ||
| And so I would rather them go to a single sort of mandate, which is only on price stability because that's the only thing they control. | ||
| They should not be looking as much about the labor market because then it gets into politics and everything else that the Federal Reserve has no ability to control. | ||
| So I think it's a bad time to be cutting interest rates. | ||
| And in fact, if you look at some of the measures that are out there, like the Taylor rule named after John Taylor, we're right in the sweet spot of where that maybe the natural rate of inflation or sorry interest rates would be. | ||
| And so I don't think there's any reason to be cutting interest rates. |