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Discussion Of U.S. Economy
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| Democracy is worth dying for. | ||
| Democracy belongs to us all. | ||
| We are here in the sanctuary of democracy. | ||
| Great responsibilities fall once again to the great democracies. | ||
| American democracy is bigger than any one person. | ||
| Freedom and democracy must be constantly guarded and protected. | ||
| We are still at our core a democracy. | ||
| This is also a massive victory for democracy and for freedom. | ||
| Welcome back. | ||
| Now for a discussion of what's happening with the U.S. economy. | ||
| We're joined by Robin Farzad, who's the host of Public Radio's Full Disclosure. | ||
| Welcome back to Washington Journal. | ||
| Thank you. | ||
| Can you talk a bit about full disclosure, the kind of topics you explore and where people can find you? | ||
| I'd say it's an omnivorous show on the business of culture broadly. | ||
| I understand that at least my mother-in-law is a subscriber. | ||
| You can find it on YouTube, on the NPR app, on Spotify, Apple, podcasts, wherever you get your pods. | ||
| Increasingly, it's a vodcast where we excerpt things to video. | ||
| We put them on Instagram and all the social media channels. | ||
| And I've always loved doing public radio ever since I was a magazine reporter going on all things considered and morning edition and tell me more and those other shows. | ||
| And when I had the chance to launch my own show in 2014, I pounced. | ||
| And here I am floundering around 11, 12 years later. | ||
| What are some of the top economic stories you think we should be watching in the year ahead? | ||
| It is really like sipping from a fire hydrant at this point. | ||
| If you can just focus on oil geostrategically, what happened in Venezuela, the potential deluge of heavy crude that's going to hit Gulf Coast refiners. | ||
| You have another mineral play potentially in the United States, you know, rattling its saber about Greenland and this fight with NATO and Denmark, potentially another rush at minerals. | ||
| You have a president who's really troubled by persistently high prices that have remained from the Biden administration. | ||
| Inflation is a really tough beast to kill. | ||
| And you almost oftentimes have to throw an economy into a recession, a deep recession, to arrest the rise of prices. | ||
| And yet prices for many are still going up. | ||
| The misery index is still unusually high for an economy where you have a record stock market, record real estate, and other asset prices, but definitely a disconnect to this economy. | ||
| They call it that K-shaped recovery that asset holders are experiencing on the upside. | ||
| And everybody else just is treading water. | ||
| So I think what the president does in reaction to inflation, and there are only so many things he controls. | ||
| He's even trying to browbeat and worse the Federal Reserve, which I imagine we'll talk about and pack the Fed, the central bank with his appointees. | ||
| And so it's a perilous time. | ||
| And you think that markets would be reflecting this more. | ||
| But they're not. | ||
| Why is that? | ||
| Everybody who's so psyched over AI, this is, you know, like think back to the internet when you first went on Netscape or Mosaic in the early 90s and the whimsy that followed. | ||
| Everybody was rushing into these investments. | ||
| Yahoo, Amazon, you know, that all fomented this dot-com bubble that only burst, I think, at the turn of the century. | ||
| And a lot of that was felt for several years and the market went on to do nothing for a decade. | ||
| Now, this idea of AI fundamentally disrupting the economy, fundamentally disrupting the power grid, where you've seen your electricity bill go up every month because of the unbelievable demands on utilities to run these data centers. | ||
| You're worried, there's fear and loathing if you have a college grad, a 20-something, if you're in the professional services world. | ||
| Is my job going to be phased out by AI? | ||
| There's on the flip side of that tremendous excitement for companies like NVIDIA, for database services companies, for utilities. | ||
| Of this capital spending, if you're sensing a sea change for the economy that's maybe even bigger than the internet at this point, then the reflex has been to buy first and ask questions later. | ||
| And the market has had a spectacular 15-year run. | ||
| The United States market has not been this richly valued since the turn of the century. | ||
| We all know what happened after that, but there's clearly something disconnected from the rest of the economy. | ||
| You mentioned stubbornly high prices earlier. | ||
| In a speech at the Detroit Economic Club last week, President Trump said that inflation was down. | ||
| And even though it is, you know, pretty steady, it's at 2.7%. | ||
| What is the disconnect there? | ||
| I think mom and pop, by and large, might remember a time stamp, a visual stamp, a print in their head. | ||
| Say, I was at Kroger in 2019, and a thing of Starbucks Cold Brew cost $3.99. | ||
| That same thing right now costs $6.99. | ||
| For many people out there, I think the fallacy is that inflation will only be over when and if that $6.99 falls back to $3.99. | ||
| It doesn't work that way. | ||
| I mean, prices are still growing up. | ||
| Prices have typically gone up traditionally and every year. | ||
| You don't want deflation, but I think there's this nostalgia almost, this sense that that was taken away from me. | ||
| We saw the price of eggs rise because of avian flu. | ||
| You see real estate prices. | ||
| You see car prices, car insurance prices. | ||
| There's inflation everywhere. | ||
| And it's not like it just stops and prices fall overnight. | ||
| Oftentimes you'll see prices fall and discounts given in a deep recession or a deep pullback where companies have to compete again for market share. | ||
| And that's not what's happening. | ||
| And I think they're increasingly taking that out on the Trump administration, which after all promised to come in and kill inflation in its first 100 days. | ||
| That's actually kind of reflected in a NPR, PBS, and Marist poll, which asked, is the economy working well for you personally? | ||
| And 52% of Americans said that, well, 39% said that the economy was working well for them. | ||
| But 61% of the people in this poll said that the economy is not working well for them. | ||
| In that same poll, 52% of Americans said that the U.S. was in a recession, and 61% said the economy is not working well for them personally. | ||
| At the same time, though, unemployment is pretty low. | ||
| It's at 4.4%. | ||
| The economy is expanding at 4.3%. | ||
| And annual rate in the third quarter, it's pretty high growth, highest we've seen in two years. | ||
| Why do people still sort of feel like things are bad? | ||
| I think the unemployment rate doesn't reflect the learned helplessness in this economy. | ||
| People have just given up. | ||
| I mean, there are people out there that actually, you know, I don't know what was said during the 1980s, was it the 1980 presidential election or was it before that with Gerald Ford, a time of inflation? | ||
| It's like when you are persistently and long-term unemployed, it certainly feels worse than a recession to you. | ||
| It feels like a depression. | ||
| Who cares if the headline number says four, four and a half percent? | ||
| I mean, these are Bureau of Labor Statistics numbers that don't reflect the difficulty of gig working, the difficulty of making ends meet, making your nut of rent and car payment every month. | ||
| And certainly anecdotally, there's no shortage of people out there right now who've given up and they're taken out of the calculation of the official unemployment rate. | ||
| It just, you know, these numbers don't necessarily reflect the pain and the reality and the lived experience on the ground. | ||
| Earlier this week, there was a prominent group of previous Fed chairs as well as previous Treasury secretaries that issued a statement. | ||
| These are secretaries and Fed chairs appointed by both Democrat and Republican presidents. | ||
| They issued a statement in support of current Fed chair Jerome Powell in light of the Trump administration's investigation of him. | ||
| I want to read a bit of this statement that came out. | ||
| The Federal Reserve's independence and the public's perception of that independence are critical for economic performance, including achieving the goals Congress has set for the Federal Reserve of stable prices, maximum employment, and moderate long-term interest rates. | ||
| The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use the prosecutorial attacks to undermine that independence. | ||
| This is how monetary policy is made in emerging markets with weak institutions with highly negative consequences for inflation and the functioning of their economies more broadly. | ||
| It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success. | ||
| Among those who signed on to that were former Fed chairs Greenspan, Bernanke, former Treasury Secretary Janet Yellen, Geithner, Lou, Paulson, many members of the Council of Economic Advisors. | ||
| How much damage do you think this investigation could do to the economy? | ||
| You know, it's a first world problem to have, as I said, that you can play chicken or this kind of game with your own appointed Fed chair. | ||
| I know he's fallen out of love with him. | ||
| He said he waited too long to cut interest rates. | ||
| Others said that he waited too long to hike interest rates, which didn't arrest the inflation of 2022 soon enough. | ||
| So, you know, damned if you do, damned if you don't. | ||
| But the unanimity around him, the backlash that you've seen from meme stock investors, it's created this kind of cult of Jerome Powell. | ||
| And I say that it's such a dangerous game to play because if you're out there with Trump and having such a muscular foreign policy, if something, heaven forbid, were to go wrong, suppose during this, China decides to invade Taiwan and then U.S. markets collapse, interest rates suddenly fluctuate everywhere, global markets collapse, you have runs on currencies and various other if-then scenarios happen. | ||
| It forces Trump to have to step forward and say, I actually disregard that investigation of the Fed chair. | ||
| I have full faith and confidence in him. | ||
| That's the problem. | ||
| We have such a time of stability and asset prices are so high that you can afford to play these games with your Fed chair. | ||
| The reality is his term, I think, I believe, ends in May. | ||
| You're going to have somebody else appointed there that there will be pushback from not just Democrats, but Republicans in the full politicization of the Federal Reserve. | ||
| You don't want the United States turning into a Turkey or a Thailand or another place that has had tremendous problems, IMF issues. | ||
| This is supposed to be the redoubt of safety, the U.S. dollar, the U.S. interest rate, the U.S. Treasury. | ||
| And that is not something that I think anybody wants to jeopardize in the interest of maybe getting a Fed chair to lower interest rates before his term ends. | ||
| We saw the president announce on Truth Social a new round of tariffs potentially against NATO allies in response to what's happening in Greenland. | ||
| President Trump has staunchly defended his tariffs more broadly, and we're expecting a Supreme Court ruling on those tariffs any day now. | ||
| How important do you think that case is, and what are you expecting in terms of the outcome? | ||
| I think it could all get thrown out, and maybe he's perceiving that he could have a little fun with it in the final few weeks of the policy. | ||
| Certainly, I think if you go back to what it was, what was it, Liberation Day? | ||
| What was it called? | ||
| April. | ||
| Emancipation Day. | ||
| April 2nd, I think. | ||
| Something like that. | ||
| How many times has he come back and asterisked and pulled back and diluted and renegotiated these things? | ||
| And over time, there becomes a kind of a cry wolf element, and the markets start yawning. | ||
| They're like, oh, this is not as serious and as draconian as we'd first imagine. | ||
| And when you start drawing it up and thumbnailing it with respect to the annexation of Greenland, it totally goes into Looney Tunes territory. | ||
| And people start saying, yeah, you go ahead and have a full-throated, full-fledged trade war with our closest European allies and see how that's treated. | ||
| Maybe he perceives that it's just for rhetorical sake at this point. | ||
| And there are people that do expect that the Supreme Court could come down against this. | ||
| I think it would be an interesting, you know, it would be a victory for him in that he could say, I did go to bat for the American manufacturing. | ||
| I did go to bat for American jobs, but I was thwarted in this so he could get a symbolic victory out of it. | ||
| And you were right, it was April 2nd. | ||
| I want to go back to that Detroit economic speech that the President gave last week. | ||
| He also outlined several initiatives that he said would deal with the affordability crisis, as people are calling it, laying out initiatives to address housing, credit card debt, health care. | ||
| Let's listen to some of what he said. | ||
| At Davos, next week, I'm going to provide much more detail about our housing policies so that every American who wants to own a home will be able to afford one. | ||
| We have some great things happening with housing, as you know. | ||
| You saw the $200 billion buy-in on bonds and mortgages. | ||
| This will include a ban on large institutional investors buying up single-family homes all over the country and making it impossible for people to buy a home. | ||
| And I've also announced that the U.S. government is purchasing $200 billion of mortgage bonds to bring down mortgage rates, and it's had a huge impact. | ||
| It's already started. | ||
| And just last week, the average 30-year mortgage dropped below 6% for the first time in many years. | ||
| It's coming down very rapidly, and that's not with the help of the Fed. | ||
|
unidentified
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If I had the help of the Fed, it would be easier. | |
| But that jerk will be gone soon. | ||
| In addition, I proudly called for the credit card companies to cap interest rates at 10% for one year, because they're getting 28 and 30% and 32%. | ||
| And it's unfair. | ||
| The rates are way too high. | ||
| To provide further relief to hardworking Americans, we'll also be confronting one of the biggest factors in driving up prices, the monstrosity known as the Unaffordable Care Act. | ||
| You know what that is, right? | ||
| It's Obamacare. | ||
|
unidentified
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It's a great name. | |
| Unaffordable Care Act. | ||
| Did anybody ever think of that one before? | ||
|
unidentified
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It's true. | |
| It's the Unaffordable Care Act. | ||
| Obamacare was a gift to make health insurance companies rich at the expense of the American people. | ||
| In particular, the so-called enhanced premium tax credits were a corrupt payoff to the insurers whose stock prices went up more than 1,000 percent after Obamacare was signed. | ||
| I want the same money to go. | ||
| I want it to go directly, very simple. | ||
| I want the money, those big amounts of money paid for by the government, to go directly to the people so they can buy the health care that's right for them. | ||
| They can negotiate their own deal, health care savings account, but they'll buy their own health care, and everybody loves it. | ||
| That's why later this week, I'll announce our health care affordability framework that will reduce premiums for millions of lower drug prices, delivering price transparency and demand honesty and accountability from insurance companies all over the country, all over the world, actually. | ||
| Robin Farzad, I want to go back to some of that NPR PBS Maris polling related to several of those issues that the President raised in terms of the economic issues that concern Americans the most. | ||
|
Inflation's Rising Tide
00:15:26
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| 45% say prices are what concern them the most, followed by housing costs at 18%, tariffs at 15%, job security at 10%, interest rates at 9%. | ||
| The president touched on a lot of those topics in that clip there. | ||
| How real are these proposals and do you think they'll make a difference? | ||
| They're not realistic. | ||
| I mean, you could go back and look at Hugo Chavez, who was Maduro's predecessor in Venezuela. | ||
| He was the populist lightning rod who came to power in the late 90s and stayed there. | ||
| He used to have a show, I believe, called Allo Comandante, where people would call and complain, like, you know, my daughter wants to have a wedding, but I cannot afford a meal for her. | ||
| And Chavez would interrupt them and say, stop, send this man three goats and sacks of rice and some beans for them to do the wedding. | ||
| Or he would send people cement. | ||
| The president of the United States does not directly control the economy that way. | ||
| There might be some palliative measures. | ||
| There might be some browbeating, like when he has the credit card industry and its crosshairs. | ||
| I mean, it's suddenly news to him that subprime credit card customers pay north of a 10% interest rate on their balances, that there are people that pay well into the 20s and others. | ||
| Why do you think the credit card companies inundate people with credit card offers to begin with? | ||
| Why do you think students in college see their mailboxes crammed with these things? | ||
| That's the pursuit. | ||
| That's capitalism, red and tooth and claw. | ||
| You can't have it both ways. | ||
| Why do you think private equity came after homes? | ||
| There's rest of money that's looking for return. | ||
| I think the bigger problem in housing is, you know, you could buy mortgage bonds left and right at these levels. | ||
| You're not going to bring interest rates back down to two and a half, you know, mortgage rates down to 2.7% mortgage that some people availed themselves of in 2022, 2023, and are loath to sell the homes that are backstopped by those mortgages right now. | ||
| What? | ||
| If I sell them, I have to go out and take out a mortgage closer to 7%. | ||
| So the president cannot control that and hence his frustration with Jerome Powell, hence his frustration that rates haven't been brought down. | ||
| Certainly, the economy has a bigger problem and that it's gotten used to 0% interest rate policy for the better part of the last 25 years. | ||
| We had so many different emergencies. | ||
| And the problem is, is too much of that begets inflation. | ||
| And on balance, we're still trying to mop up inflation in this economy. | ||
| And you have a president who sees the numbers, who sees that there's a very likely chance that he loses the house in the midterms. | ||
| And there's only so much he can do, whether it's respect to private equity in homes or credit card companies. | ||
| And, you know, certainly I think that this play for Venezuela to stuff the market with so much heavy crude at a time when oil prices are low, maybe that's a backdoor way of attacking inflation in this economy. | ||
| But that's not something that's typically been the province of the president. | ||
| All right, we're going to be taking calls with questions for Robin Farzad, host of NPR's Full Disclosure. | ||
| Let's start with Charles in Fort Collins, Colorado, on our line for independence. | ||
| Good morning, Charles. | ||
|
unidentified
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Hi, Robin. | |
| Hey, I heard that if you take the top seven companies out of the stock market, most of them are like dot-com companies and AI companies and are really driving the stock market. | ||
| But when you take those seven of the, what, 450 out, the stock market really isn't doing that great. | ||
| And I'd like you to really comment about your thoughts on the impact of these tariffs going forward that we're seeing and how that might affect everyday, every man's pocketbook. | ||
| Yeah, that's a great point. | ||
| The stock market has not been this concentrated specifically in technology since the turn of the century. | ||
| The Magnificent Seven, if you think about Amazon and NVIDIA and Google and Apple and a handful of other companies. | ||
| If you look at the Standard Imports 500 Index, which is the most quoted and benchmarked U.S. stock market index, I know the Dow Jones Industrials gets quoted every night on the nightly news, but this is one that is that the better you do, the bigger you become, the more of the index you represent. | ||
| And so right now, I believe it was last clock that close to a third of this index is represented by those companies. | ||
| And that is true that if you take the 493 other companies, the performance has been solid, but not great shakes. | ||
| And so it does beg that question. | ||
| I mean, there are some, it's the haves and the have lots and the haves kinds of, you know. | ||
| And that is the situation right now. | ||
| And the numbers, I mean, you have companies that are seeing unbelievable revenue growth, companies that are valued at $5, $6 trillion. | ||
| We've never in history had that kind of growth happen with companies with such massive income and cash flow statements. | ||
| So that's a concern. | ||
| I think in terms of tariffs, if the Supreme Court does come and shut it down, imagine what the reaction would be in markets. | ||
| Imagine, you know, there'd be some pushback and all, but I think on balance, it would be looked at as anti-inflationary. | ||
| After all, a lot of these prices are being paid and borne by American consumers, right? | ||
| So that could be a revenue hit for the government, but I think it would be looked at as a positive price thing and maybe still give Trump some rhetorical cover to say, hey, look, I tried. | ||
| And once again, our numbers, if you want to call in with questions for Robin Farzad, Democrats, 202-748-8,000. | ||
| Republicans at 202-748-8001. | ||
| And Independents at 202-748-8002. | ||
| Mike is in Montgomery, Alabama on our line for independence. | ||
| Good morning, Mike. | ||
|
unidentified
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Hey, good morning. | |
| I have two questions for your guests to expound on, if you will. | ||
| The first is President Trump's plan to provide a $2,000 check to those who qualify. | ||
| And the second question is in regard to Social Security and their reduction in percentage for, I believe, retirees, if that's the case. | ||
| So I'll hang up and listen to your guests' answer. | ||
| And thank you so much. | ||
| I mean, the $2,000 check thing, again, you know, the fiscal stimulus that comes around, these things are great on election years. | ||
| It's great. | ||
| And you see Donald Trump's permanent marker signature inevitably on the check massively. | ||
| That's a very iconic signature saying, you know, remember who cut this out for you. | ||
| That's really not going to put a dent into the significant expenses right now being born in this economy. | ||
| It's help. | ||
| It's palliative. | ||
| Social Security indexing, I think all of these things go back to inflation. | ||
| Inflation visited us in 22 and 23 in a way that it has not. | ||
| It had not since, I think, Jimmy Carter left office in the early years of Ronald Reagan. | ||
| And it's very, very difficult to put that in the rearview mirror for people. | ||
| There's a tremendous amount of fresh PTSD. | ||
| And they're saying, I only make this much and I can only fill up a grocery cart with this much, or I can only have this much left over at the end of every month after car payments, after insurance payments. | ||
| I mean, take your car to the shop recently, see how much more it costs now than it did before because of the various shortages that came out of COVID and semiconductors and the like. | ||
| And so there has to be a real catch-up in terms of real wages versus inflation and a real feeling that you've caught up. | ||
| Again, if you've been in the markets, if you've been in real estate and everything, your money has been protected quite well from inflation. | ||
| It has outpaced inflation. | ||
| The returns have been great. | ||
| If you're living paycheck to paycheck, it's not even cold comfort. | ||
| Ken is in Ann Arbor, Michigan on our line for independence. | ||
| Good morning, Ken. | ||
|
unidentified
|
Hi. | |
| Good morning, Robin. | ||
| Thank you for participating. | ||
| This is a great talk. | ||
| You're a good teacher. | ||
| I turned out to agree with President Trump in this particular case of interest rate. | ||
| You know, we are in a different situation than we were in the past. | ||
| In the past, of course, with low inflation, we would probably also lower the interest rate because it would not be inflationary. | ||
| But at this time, what I call affordability index is very low, meaning that a lot of people can't really afford buying things. | ||
| And therefore, lowering the interest rate is not going to be inflationary as much as it's going to be helping building up resources, building up wealth, which would be good for the future. | ||
| That's really my comment. | ||
| Thanks, Alexai. | ||
| Thank you. | ||
| That's a fair point. | ||
| Look, if you're carrying massive credit card balances and you see a cut in the interest rate, that's tremendous relief right there. | ||
| If you're waiting on the sidelines to buy a home, but every action has some sort of reaction. | ||
| And if interest rates are brought down to levels that suddenly unleash the animal spirits of companies and private equity and home builders and others, you start to see a bidding up for raw materials, a bidding up for human capital, bidding up for labor. | ||
| If you're saying that get it while the going is good, I want to take this cheap money. | ||
| I want to take this closer to free money than I had when interest rates were high and spend it and get a return on that investment. | ||
| That will drive up prices. | ||
| There'll be a competition for that. | ||
| That's why it's not, there's no free lunch in this, whether you cut a gigantic check, whether Congress gets together with the Trump administration and gives everybody a massive rebate or you take it out of this and out of that. | ||
| At some point, there is a reckoning with respect to prices. | ||
| And that is difficult at a time when you have so much volatility with the Federal Reserve. | ||
| We don't know who the next chair is going to be, if they're going to be beholden to this White House more politically than before. | ||
| You're going to have the capital markets, which I would argue investors, Wall Street, that's a third rail, a third branch of government. | ||
| They don't like what they see and they go out and run up, you know, they start selling U.S. Treasuries. | ||
| And you start to have a problem in the United States with respect to its creditworthiness. | ||
| That is a whole other crisis that a single man, a single administration in the White House will not be able to arrest. | ||
| So I'd be very cautious about believing that low interest rates, interest rate cuts are just a no-consequence, easy answer for this affordability problem. | ||
| Mark in St. Louis, Missouri has a question via text saying, can you quantify or touch on the impacts of sanctuary cities on budgets, wages, housing, food, and utilities? | ||
| I can't. | ||
| I do know that there is a frustration with immigration in that we did not get a streamlined immigration policy, a bipartisan immigration policy, and that businesses, hospitality industry, the others who would reliably count on immigrant labor in the past have not been able to do that. | ||
| And there isn't anything that's filling that. | ||
| And there's a frustration with small, medium businesses and with Fortune 500 companies that that's not a given anymore and that labor prices have gone up and you're not getting the consistency of the labor input. | ||
| So I wonder if they would isolate that in sanctuary cities and see where people might feel on balance, more safe to come out for jobs, how that affects local economic numbers. | ||
| But certainly right now, there's just a broad sense of fear overall regarding ICE. | ||
| ICE can have its way. | ||
| And a liberal city like Minneapolis, it can come in. | ||
| It can butt heads with local law enforcement in Manhattan and other cities. | ||
| And if you are, you know, the idea that people have to produce their papers, even if you're a seasonal worker and the like, you're probably going to hang low just out of self-preservation. | ||
| And that will have a chilling effect on the labor market. | ||
| Keith is in Palm Bay, Florida on our line for Republicans. | ||
| Good morning, Keith. | ||
|
unidentified
|
Hey, good morning, y'all. | |
| I have a couple of questions. | ||
| You were just talking about wages and stuff in the sanctuary cities. | ||
| And you were talking about wages earlier. | ||
| You were talking about wages going up for people. | ||
| And you said the more that Immigrants can't get the jobs the more the wages go up. | ||
| That sounds like a good correlation to me when legal people get legal jobs. | ||
| But you said something about all the money's going to these trillionaire companies. | ||
| Can you name some of these trillionaire companies? | ||
| And I know a few. | ||
| There's 10 only, really, that's publicly traded. | ||
| And they're all to entertainment like the internet. | ||
| You know, a mascot for a basketball team professional makes $625,000, one of them, a year. | ||
| And a teacher and a fireman and police make $100,000. | ||
| As long as society is willing to keep paying for all this entertainment on the top of their budget and not doing real budgeting that was taught to us when we were younger. | ||
| I'm a boomer. | ||
| Proud boomer last year. | ||
| I don't understand why you guys are so interested in the entertainment part and not what real people do. | ||
| Keith, I'm not sure that I clearly understand your question. | ||
|
unidentified
|
We're willing to support a basketball mascot. | |
| What is he giving back to society? | ||
| At $625,000 a year, but our teachers and our fire and police make around $100,000 a year. | ||
| What does that say about our society? | ||
| We're more interested into the Romans and the Coliseum and the games and stuff. | ||
| That's on the top of our budget. | ||
| You know, our partying for the month. | ||
| And at the bottom of our budget is our mortgage and insurance and stuff. | ||
| Until that flips like the food pyramid back to where it should be, we're going to be upside down in society. | ||
| You said as the illegals were leaving the Sanctuary City, the wages were going up. | ||
| That's a good thing to me. | ||
| I don't understand why it's not a good thing to you. | ||
| And he said that all this money was going to these trillionaire companies. | ||
| Could he name some of them? | ||
| The name of his program on the radio is full disclosure. | ||
| Okay, well, let's let Robin respond. | ||
| So this is on the trillionaire companies that you're referencing, whether or not it's, you know, Keith believes that the immigrants being, you know, leaving and therefore wages potentially going up as a result of that is a good thing. | ||
| And I think the final point was about, what was it, Keith? | ||
| Okay, well, Robin, I'll let you respond. | ||
| Well, trillionaire companies, I was saying trillion-dollar market caps are a common thing these days, that the Magnificent Seven, the biggest, the top seven companies in the U.S. stock market, they've amassed these gigantic market values on really outsized growth over the past decade. | ||
|
Shift From Labor to Capital
00:02:11
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| NVIDIA, the microchip company, which has become a, you know, the semiconductor company, has become a national champion. | ||
| Apple, I don't have to tell you about Apple's reinvention over the last 30 years and how that iPod morphed into something that's become ubiquitous as part of your life and the iPhone and Apple TV and iCloud and everything else. | ||
| Amazon, Amazon, if we were just ordering a CV or a book in the mid-90s and it was a curiosity that was coming in the mail, think about it now. | ||
| They own Whole Foods. | ||
| You see significant part of infrastructure in this country, trucking and delivery and logistics controlled by Amazon. | ||
| And I would say to answer that question, Amazon has these warehouses where people are paid a minimum of $15 an hour and there's a voracious demand for labor. | ||
| A lot of that is going into automation increasingly. | ||
| And artificial intelligence might tamp down the demand for fresh bodies to work these gigantic places. | ||
| And I would say that these data centers that are getting enormous amounts of investment right now in the United States, unbelievable, just go up the 95 on the eastern seaboard. | ||
| These are not labor-intensive places, but they're capital-intensive, and they're also energy-intensive. | ||
| They are driving up power bills for everybody else. | ||
| And you see a tremendous number of ads on TV for the data center industrial complex arguing that it's good for the economy. | ||
| So I don't think that it's one thing where kind of the exploitation of labor is immediately making companies trillion-dollar market caps. | ||
| I think it's more over time that you see this shift from labor to capital. | ||
| Capital has definitely been in the catbird seat over the past 10, 15, 20 years. | ||
| And with stock market valuations the way they are now, question is for these companies if they have money sitting around, would they use it to buy back stock or would they use it to go and hire people? | ||
|
Executive Order Impact
00:09:19
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| That is ultimately where the rubber meets the road. | ||
| And right now, I think that they're waiting and seeing with respect to hiring. | ||
| Bill is in Albany, New York, on our line for Republicans. | ||
| Good morning, Bill. | ||
|
unidentified
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Oh, good morning. | |
| As far as the economy is concerned, I just had a question, Mr. Fasad, on is there still an President Biden put an economic pause on drilling oil, I guess. | ||
| I don't know if it's on home property or on federal property. | ||
| Now, has that President Trump reverse that executive order, or is that still on the books? | ||
| Because when I researched it, it still looks like it's on the books, whether there's still a pause to, you know, for drilling. | ||
| Because I was wondering, because that's what happened was ever since that happened, the prices went up because of the trucks that had to transport the food to the grocery stores. | ||
| And the prices are still up. | ||
| And the gas really hasn't come down that much. | ||
| And I know we're supposed to be patient with it, but I was wondering that that was supposed to be one of the first things for being elected was the economy. | ||
| And we don't hear too much about that, really. | ||
| So I was wondering if you had any information, first of all, on the executive orders. | ||
| I'm not familiar. | ||
| I'll have to check on the executive order or Kimberly, maybe somebody I'm going to do. | ||
| Yes, I'm just looking it up now. | ||
| So I believe what Bill is referencing is Biden's offshore drilling ban, which was an executive order just as the former president was leaving office. | ||
| This is a story in the Pensacola News Journal. | ||
| I'll just read a little bit of it. | ||
| This is from February 3rd, 2025, so the beginning of last year. | ||
| When former President Joe Biden acted on January 6th to ban offshore drilling across 625 million acres of American coastal waters, he drew immediate criticism from the man slated to succeed him. | ||
| Donald Trump called Biden's move ridiculous, and one of the many executive orders he issued in the first days after being inaugurated to serve a second term in office sought to gut the decision. | ||
| Whether he succeeds remains to be seen. | ||
| Biden used his powers under the Outer Continental Shelf Lands Act to ban offshore drilling not only in the eastern Gulf of Mexico, but also along the entire Atlantic coast and Pacific coasts of California, Oregon, and Washington. | ||
| The protections even extended to part of Alaska's Bering Sea. | ||
| So that was in the initial executive orders that President Trump signed to rescind Biden's executive order. | ||
| And I'm checking to see if I can find any updates since then. | ||
| But in the meantime, if you'd like to kind of generally respond, Robin. | ||
| Yeah, I think it's one thing to do that and by fiat or executive order, but oil prices are depressed right now. | ||
| If anything, the problem is too much oil. | ||
| There's a glut of oil on global markets. | ||
| And whether you look at WTI or Brent crude, if you are a wildcat or if you are a domestic driller, and that's been a miraculous story in the United States, is the development of U.S. oil over the past 15, 20 years and how that's almost eclipsed many players in OPEC. | ||
| But it's not very economic for you when oil is close to $60 a barrel to kind of hire the roughnecks, bring out the infrastructure, bring out the architecture. | ||
| You'd rather see oil sustainably, $80, $90, maybe closer to $100, sustainably at that level so you can plan, you can drill when there's $60 and moreover, a threat of bringing this difficult crude from Venezuela to Gulf refineries and cramming it like so much food that you feed geese to make a pate. | ||
| So I do. | ||
| There may be a play for him to bring prices down even more so it trickles down at the gas pump level and becomes deflationary in this economy. | ||
| And that might be the idea, but actually bringing all of these rigs online is tremendously difficult to pull off. | ||
| So I did find a little bit more information about what the president and the administration have done regarding offshore drilling since February. | ||
| This is an article from News of the United States notice. | ||
| The Department of the Interior in November proposed opening up 34 new leases off the coasts of California, Alaska, and the Gulf states from 2026 to 2031, including in areas previously withdrawn from offshore drilling due to state regulations or policies set by former Democratic presidents or by President Donald Trump himself during his first term. | ||
| The plan is a draft and the department will release multiple other iterations before approving a new leasing schedule. | ||
| But early opposition points to the administration's quest falling flat. | ||
| And more oft think about the Deepwater Horizon catastrophe in 2010. | ||
| That is a difficult incremental barrel to drill. | ||
| Is it economic for a BP or one of its many drilling partners or development partners to go out and seek that incremental barrel, even if the president opened up these offshore fields when oil is where oil is right now? | ||
| I think that is the big question asked. | ||
| Jimbo in Bakersfield, California asks via text, can Mr. Farazat explain why the economic statistics show the economy just moving along, but the economy I live in is unaffordable? | ||
| Why is there such a discrepancy between the factual numbers and the reality of unaffordability that I'm living? | ||
| It's a question I've grappled with my entire career. | ||
| I mean, why is it that these numbers seem to be so sanitized and oftentimes so detached? | ||
| I mean, man, on the street right now, there are no shortage of people that will say we are in a deep recession, that the economy has pulled back. | ||
| If you ask them how much, if you, you know, trick question, what did the economy contract by last quarter? | ||
| The economy didn't contract. | ||
| This is not, if you're feeling it, again, on a micro level, if you're feeling long-term unemployed, if you're feeling not gainfully employed, if you have no pricing power, if you have an inability to make ends meet, it's worse than a recession for you. | ||
| And I don't quite understand, you know, on a macroeconomic level, maybe the Bureau of Labor Statistics has to have a more fully loaded number, that a headline unemployment rate doesn't do these things justice. | ||
| Maybe we have to pay more attention to a discouraged or quitting worker numerator. | ||
| There have to be other aspects out there that pay more than lip service to this. | ||
| Henry is in Alabama on our line for Democrats. | ||
| Hello, Henry. | ||
| Good morning. | ||
|
unidentified
|
Good morning. | |
| I do believe that we should use the oil from Venezuela, But we turn the profits to Venezuela, and that will help us and the Venezuelans get back on their feet. | ||
| I don't think we should just take over Venezuela and their oils, but I do think the profits should go back into Venezuela. | ||
| That's all I have to say. | ||
| Thank you. | ||
| I think it's important when Donald Trump says we're going to take that oil and use it for us and the Venezuelans, it's paying, it's tipping his hat to the fact that American companies, American multinationals, they had assets seized. | ||
| They had expropriation done under the Chavez and Maduro regimes in Venezuela. | ||
| And unless they're made whole, unless that you give them a good, clear return on investment, they're in no rush to go back and take a chance again in a very volatile situation. | ||
| You know, especially with oil prices where they are right now. | ||
| Maybe they would be if oil was sustainably, you know, 50% higher where it is. | ||
| It's like, you know what? | ||
| I'm going to take on that geostrategic risk, the funkiness and everything to exploit that incremental barrel. | ||
| But at these levels, you saw in the meeting at the White House, there was tremendous pushback. | ||
| And Trump has no love now for ExxonMobil because they didn't immediately bow down and say, yes, Mr. President, we're going to race to Venezuela. | ||
| Thank you for opening it up for us. | ||
| It's so much easier said than done. | ||
| Even if we have a kind of a hand-in-glove relationship with our refineries along the Gulf Coast and the specific peculiar type of difficult crude that comes from Venezuela, there'd be much more of an appetite to get all of that infrastructure up and running, which is not easy to do. | ||
| You're talking about tens of billions of dollars of investment over several years to do that, to get the throughput that we need to bring gas prices down. | ||
| So there's a hesitation. | ||
| They're also thinking, well, he might be weakened in the midterms. | ||
| You know, what's going to happen with the next administration? | ||
| Is there going to be continuity? | ||
| These companies have to decide, do I spend the money on investments in the United States? | ||
| Do I invest it in dividends and share buybacks? | ||
| Or on a kind of a more of a flyer on making Venezuela a sustainable partner well after this administration ends. | ||
|
Monday Morning Discussion
00:02:32
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||
| Well, thank you so much, Robin Farzad, who is the host of the public radio program, Full Disclosure. | ||
| Thank you so much for joining us again on Washington Journal. | ||
| My pleasure. | ||
| Thank you. | ||
|
unidentified
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C-SPAN's Washington Journal, our live forum, inviting you to discuss the latest issues in government, politics, and public policy from Washington, D.C. and across the country. | |
| Coming up Monday morning, we'll discuss the latest news on Iranian mass protests and the potential for U.S. military involvement with Trita Parsi of the Quincy Institute for Responsible Statecraft. | ||
| And then we'll talk about MLK Day and the state of civil rights today with Star Parker, founder and president of the Center for Urban Renewal and Education, and author and educator Penil Joseph of the University of Texas at Austin. | ||
| C-SPAN's Washington Journal. | ||
| Join the conversation live at 7 Eastern Monday morning on C-SPAN, C-SPAN Now, our free mobile app, or online at c-SPAN.org. | ||
| On Monday, the Reverend L. Sharpton will recognize community leaders, politicians, and activists at the National Action Network's annual Martin Luther King Jr. legislative breakfast. | ||
| Honorees include Baltimore Mayor Brandon Scott and former Attorney General Eric Holder. | ||
| From Washington, D.C., watch it live starting at 8.30 a.m. Eastern on C-SPAN 3. | ||
| C-SPAN Now, our free mobile app, and online at c-span.org. | ||
| As Congress returns to Washington for the second session of the 119th Congress, lawmakers face a January 30th deadline to fund the government through the end of the fiscal year and avoid a shutdown. | ||
| President Trump begins the second year of his term with major foreign and legal issues in focus, including Venezuela. | ||
| Attention is also turning to 2026. | ||
| The midterm elections are ahead, with every seat in the U.S. House on the ballot, all 435 voting members and five non-voting delegates. | ||
| Many candidates will compete in newly redrawn districts, including in states like Texas. | ||
| Voters will also decide 33 U.S. Senate races and 36 gubernatorial contests. | ||
| High-profile mayoral elections are coming in Los Angeles, San Francisco, and New Orleans, cities where clashes with the Trump administration have helped shape national debates. | ||
| And the road to the White House begins to take form as potential 2028 presidential contenders start testing the waters. | ||
| Follow it all on C-SPAN as events unfold in Congress, the White House, the Supreme Court, and the 2026 campaign season. | ||