Topics today include: Why are American taxpayers being forced to bail out healthcare insurance companies? https://www.conservativereview.com/articles/trump-continues-illegal-obamacare-bailout-for-insurers-congress Did a Democrat Senator accidentally tell the truth about Obamacare? http://www.lifezette.com/referral/sen-feinstein-makes-shocking-admission-obamacare/ Is the economy getting ready for a boom, or a bust? Here are some interesting signs. https://www.wsj.com/articles/as-washington-stalls-company-profits-keep-trucking-1501423201
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Anything run by liberals will be run into the ground, burned, stepped on, gasoline poured on it and burned again.
Get ready to hear the truth about America.
They're arguing about things and debating how quickly they can deconstruct the greatest country in the history of mankind and all of the ideas and norms that have gotten us here.
On a show that's not immune to the facts, with your host, Dan Bongino.
All right, welcome to the Renegade Republican with Dan Bongino.
Producer Joe, how are you today?
Morning, Agent Bongino!
Man, let me tell you something.
You know, I love the grappling and the jiu-jitsu stuff, so I was rolling around on Saturday and usually, you know, I'll give even really good guys a run for their money even if they win.
I got tooled!
Really?
On Saturday.
I am not too proud to say it.
Yeah, there was a good guy I'd never seen before, really talented, who came into the school.
He's been there for a while.
I've only been there for a couple months.
And man, did I take a beating.
And folks, just let me tell you before I get on to the content.
Once in a while, it is a very cleansing experience, kind of like a thing of Metamucil, to get your caboose handed to you I mean in just epic fashion because really it wakes you up and you start to say to yourself, gosh fighting really sucks.
I mean sucks when you're losing and some dude is on top of you with his knee in your rib cage and you can't breathe because you've been at it for like five minutes straight now and you're like okay this is really bad and you know you don't want to tap you can't tap unless you get submitted Because you don't want to tap because I tap because this sucks.
You got to tap it.
I was like, man, this guy is just destroying me.
So after like the sixth round of this guy just throwing me around like a ragdoll.
I'm laying on the mat and the other guys are looking at me like, you okay dude?
I'm like, I'm going to sleep.
I'm like, I'm just done.
The guy's like, you're done?
I'm like, I'm done.
I'm going home for the day.
Sometimes, when I was at Kenny Rogers, the Gambler Show, you got to know when to fold them.
That's when you fold them, brother.
Hey, let me ask you Dan-O, is anything from that on YouTube?
No, thank God.
Well, I did see a guy taking a picture of me as I was on the bottom with my face like this.
I know I don't have a ditto camera.
My tongue hanging out, my eyeballs rolling back in my head, and saliva coming out of my mouth.
And here was the sound coming from my mouth as this guy was choking me out with my collars.
Oh man, did I get killed.
It was bad.
All right, a lot going on folks.
You know, Monday's always stacked.
I always have a tough time discriminating what's most important for you to hear about on the show and on the day and let the other stuff go to the side.
But Obamacare, there's a couple of things that have creeped up.
I know this is an old argument and A lot of times we get sick of hearing about it just like the Trump-Russia fairytale, but there's an angle to this that's coming up recently that you all need to be aware of, and it's the cost-sharing subsidies.
Folks, this has really peaked maximum insanity right now over the weekend, because we now have Republicans like Susan Collins, who went on one of the Sunday shows, the Sunday news shows, where you get a pretty wide national audience.
Susan Collins, a Republican from Maine, Who actually went on the air and argued for the advancement of an insurance company bailout by the taxpayers despite the fact that some insurance companies are actually making profits and insurance companies lobbied for Obamacare.
So this is really critical.
We have Republicans now And again, Susan Collins is a Republican.
I mean, she's not even a Reiner.
She's not even a Republican.
She runs as a Republican, but she holds no Republican values.
But we have someone alleging to be a Republican, which is probably said better, who is now arguing for an insurance company bailout.
Now, this is a hot topic, folks.
This is going to be the next line of attack.
And the reason you need to know about it is because if the insurance companies don't get, the health insurance companies Participating in Obamacare, Joe, and if I lose you at any point on the way, stop me.
If they do not get a taxpayer bailout shortly, you are going to see an epic collapse of Obamacare.
Now, let's go back and rewind and talk about what this is, because it's critical you understand this.
Because the Democrats are The Democrats like to fancy themselves, Joe, as the party of the little guy.
They're against bailouts.
I mean, how many times, Joe, have you heard about the Democrats warn the evil health insurance companies, the profiteering, the brutal capitalists?
There should be no profit in health care.
Ladies and gentlemen, if they believe any of that, you can't possibly argue for the CSR or the cost sharing reductions or what I will call the insurance company bailouts.
So let's just be crystal clear why I'm bringing this up to you and why it matters.
Liberalism is a lie.
It's always been a lie.
Liberals are phonies, they are fakes, and liberals are frauds.
Not all Democrats, but the liberals are frauds.
Liberals have argued for years that health insurance companies are demons, they are demon spawn, they are the devil incarnate, and that they are not to have any legitimate place in appropriate conversation in American politics.
Liberals are now arguing for a policy that takes taxpayer money and gives it to said demons, said insurance companies.
You can't make it up!
Ladies and gentlemen, you cannot make this up.
This is not hyperbolic.
This is, again, not talk show content for effect.
This is real.
Liberals are actually arguing for CSR, which is a, make no mistake, taxpayer bailouts of the insurance companies.
Now, some data and some facts so you understand how this works, so you can argue with your dopey liberal friends, who will still claim to you they're in it for the little guy, not telling you the little guy is health insurance companies.
These cost-sharing reduction payments are monthly payments made by the United States government to health insurance companies.
Monthly.
The reason they're a big deal right now, I may have missed that point, is because Donald Trump, the President of the United States, of course, is threatening to withhold these payments, which I absolutely agree with him on.
Trump's take now is, listen, you can't fix insurance, we're not bailing it out anymore.
He has tweeted it out.
He has said we're going to let Obamacare implode and if the bailout payments may stop.
He's intimated as such, okay?
So these bailout payments are monthly.
They may stop.
If they stop, the insurance companies can't possibly stay in business because they're relying on bailouts to stay in business.
Right.
Now, the reason this is so pernicious and these payments are so bad is think about this, folks.
There is already a subsidy built in by the taxpayer In other words, taxpayer money given to insurance companies outside of the bailout payments.
These are the subsidies individuals get to buy overpriced insurance.
So, there are multiple pathways by which your wallet is being emptied and the money is being given to health insurance companies, or what liberals, Joe, would call the little guy.
Now, I'm being obviously sarcastic, but the whole point of my show is to point out to you how liberals are frauds.
They're total fakes.
You may not like conservatives, you may not respect conservatives, you may think we're all crazy, but at least we're not dishonest like you frauds.
So...
One pathway is the subsidies flowing to individuals.
Obamacare instituted a series of regulations.
You have to buy a bunch of insurance you don't want.
You know, healthcare, excuse me, hair plugs, you know, vasectomies for women.
I mean, you have to buy stuff you don't even want.
If you're a woman, you don't need that, obviously.
But you have to pay for an insurance plan that includes this.
So it's overpriced.
In order to compensate for the high price of what Obamacare demanded you pay for, Joe, demanded, they said, well, we're going to give you taxpayer money to pay for the overpriced insurance.
They'll call them subsidies.
Normal people and people who are sane would call those tax dollars, because the government's taking the money from Joe Armacost to give it to Dan Bongino to buy insurance Dan Bongino doesn't want.
This is real.
This is actually how Obamacare works, in case you guys missed this.
And ladies, Now, that's one way taxpayer money flows from Joe to Dan.
Obamacare's so bad, Joe, so overpriced, so ridiculously expensive, and so arithmetically and economically unfeasible, that even the subsidies, the money taken from you to give to me to pay for insurance I don't want, still isn't enough to make the insurance companies profitable.
So they instituted a bunch of other programs, risk corridor payments, risk adjustment payments, and these CSR payments, these cost-sharing reductions.
The cost-sharing reductions, because Obamacare was still so ridiculously expensive, were designed, Joe, to discount co-pays and deductibles.
And by the way, Dan Horowitz has a great piece in Conservative Review about this, which I'll put up in the show notes today.
It's about a month old, but it doesn't matter.
The premise of the piece is exactly the same.
And the issue's still hot now because Trump's now threatening to withhold these payments.
The cost-sharing payments, in addition to the subsidies, Joe, again, your money, were designed to discount copayments and deductibles for low-income enrollees who earn 250% or more of the poverty line.
So now, if you earn more than double what we would consider being in poverty, you are still entitled to other people's money, not just through subsidies, but through money flowing to insurance companies that is now being used to reduce your copayments and deductibles.
But the money, Joe, is coming from you.
Right, right.
Given to insurance companies to make them more profitable, to incentivize them to stay in Obamacare.
Ladies and gentlemen, you can't make this up.
Now, in case you think, oh, you know, this program, come on, it can't be that expensive.
You'd be wrong.
Estimates are $130 billion over 10 years this is going to cost.
Of your money, folks.
Keep in mind, the government makes nothing.
The government creates nothing.
The government provides no value added at all in an economic sense.
Now, it can provide our military to secure what we have.
It can provide a rational set of interstate regulations so we're all playing by the same rules.
But the government doesn't create anything.
The government doesn't do what Apple does.
It doesn't take a piece of glass and silicone and some rare earth minerals that are worth maybe $100 and create a $700 iPhone.
The government doesn't do that.
That's what we call value-added.
You break down an iPhone into its constituent parts, it's probably worth $50.
So why do you pay $700?
Because Apple is value-added.
It adds things.
It adds intellectual products.
It adds coding.
It adds a design feature.
It adds aesthetics.
It adds things to the constituent minerals that people want, which add value.
The government doesn't value-add, Joe.
The government just takes, because the government doesn't produce anything.
The government just takes, so when the CBO and other estimates come out, reasonable estimates, that say, hey, it'll be $130 billion over 10 years for this program, that money is being taken from you.
It's not a value-added product.
It's not going to be transformed magically into $500 billion of wealth.
It is simply $130 billion removed from the economy to give to someone else.
Folks, this is a big deal.
The CSR payments are going to be a lightning rod this week and in the weeks coming if something isn't done about Obamacare quickly.
Because the minute these payments stop, Joe, insurance companies are not going to be viable in these markets.
Right.
Now you may say, well, gosh, then we have to pay them.
Wait, I don't understand.
Please tell me what your premise is so we can argue.
Because I never know how to debate with liberals.
Because if on one hand you're blaming evil insurance companies, Then how is it that you're so willing to take taxpayer money, $130 billion in 10 years, for just one component of the bailouts, Joe?
Remember, the subsidies are a whole other expense.
How is it that you're willing to steal $130 billion from me to give it to so-called evil insurance companies?
It doesn't make sense.
Reality detachment, yeah.
A complete reality detachment.
Now, folks, we're about to reach a tipping point with Obamacare, because the minute one of these monthly payments isn't made, you are going to see a collapse in these markets, and it is going to be catastrophic, making this thing even worse.
There was no appropriation for this, and I addressed this a few weeks ago on the show.
These are illegal payments, folks.
This has already been determined by the courts.
There is no appropriation for this in Congress.
Now, for those who are probably the liberals listeners who are unfamiliar with the Constitution, the conservatives are probably well aware of this, appropriations have to be made by the Congress.
There was no appropriation for this money, folks.
There was a lawsuit.
The Republicans won the lawsuit.
Now, you may say, well, Dan, that doesn't make any sense.
Well, why is the Trump administration still paying?
I don't know.
As Randy Macho Man Savage would say, don't know.
I have no good explanation, folks.
I have no idea why the Trump administration is still paying these cost-sharing reduction payments monthly.
I'm not going to defend it because it's non-defensible.
I'm happy that Trump is finally bringing up the idea of stopping these bailouts, but the reality is action matters and it hasn't happened yet.
So there is no appropriation for this and the Democrats have no defense.
And by the way, so you don't think I'm just bringing this up because it's a Monday and I want to talk Obamacare.
Folks, the Democrats are in a panic, just like they are about the Trump-Russia debacle, now that they know that the dossier may point back to them, that they paid for it, in case you missed my show last week.
That's why Trump-Russia disappeared, the Trump-Russia story, because now they're figuring out that the dossier was likely paid for by Democrats working with the Russians, so the story disappeared.
The reason the Obamacare debate is going to creep up again this week is because the Democrats are in a panic behind the scenes, Joe, because there is no legal recourse for them if Trump says we're going to stop these payments, these cost-sharing reduction payments.
There's no legal recourse.
Joe, listen to me.
They already lost the court case.
Right.
Again, so if you're saying, well, then what the heck does he just cut them off for?
Yeah.
Don't know.
No idea, folks.
Oh, we're afraid of the collapse.
The collapse is already happening.
What are you talking about?
The collapse is already underway.
So in order to delay the collapse that, so you have a building that's going to collapse on your head and we're going to like, in addition to the collapse of the building, it's going to fall on everyone.
Instead of warning people to get out and just taking the building down now, We're waiting for the collapse to happen.
And by the way, while we're at it, let's pour 130 million, a billion dollars over 10 years into a building that's collapsing.
So then when the building collapses, the taxpayer money goes down with it and goes up in flames.
This doesn't make any sense.
Folks, we're in real trouble with Obamacare and even some Democrats are trying to start to speak out.
Now I have a quote here from a piece at Life's at Laura Ingram site, which I will put in the show notes again today as well.
From Dianne Feinstein, who is a Democrat senator from California, who, shockingly, Joe, has been... Listen, I'm no fan of Dianne Feinstein, let me be crystal clear, but she's been surprisingly lucid on some issues.
She was the one with the Trump-Russia thing during a CNN interview.
Remember we played the cut a while back where they asked her if there was any evidence whatsoever about the Trump-Russia thing?
She's like, oh no, no.
Remember that one?
You played the cut for me.
And then they asked her again.
A few weeks later, you know, you came on a few weeks ago and said there's no evidence of this Trump-Russia collusion scandal.
Have you changed your mind?
She's like, oh, no, there's still no evidence.
So Dianne Feinstein, for a Democrat, has been surprisingly clear on the truth in some respects.
I mean, I'm not willing to give her that much credit.
She still supports terrible liberal arguments.
But in this piece in Lifeset, I'm going to read you a quote from her in case you think, again, that it's just Republicans hastening the demise of Obamacare and that we're all making this up and that the catastrophe is not as bad as it sounds.
No, folks, it is.
Here's a quote from Dianne Feinstein she gave in an interview here.
Here we go.
She says, I will give you a reason to talk.
The reason to talk is the insurance industry and what's happening across the United States.
And it's a very serious thing.
Because you've got more than a million people who want to participate in the exchanges who are without carriers.
And you've got several million who don't have a choice of insurance carriers.
Folks, that's a Democrat.
That's Dianne Feinstein basically saying that insurance companies are pulling out en masse and millions of people are being left without insurance.
That's not a Republican.
Which is ironic, because you now have Dianne Feinstein admitting the truth about Obamacare as a Democrat, and Susan Collins, a Republican, allegedly, from Maine, a Senator, who's on this weekend defending these cost-sharing payments.
She goes, you know, you have to understand that these are payments meant to help low-income people.
They're not meant to help low-income people!
They are payments made to insurance companies!
Yep.
These are not meant to help low-income people.
You want to help low-income people?
Create a vibrant market for insurance where insurance companies have to compete to lower prices.
Don't create a non-vibrant market for insurance companies where they don't have to compete to lower prices because you're giving them money to increase prices.
Is this woman economically that illiterate?
Joe, I mean, does this make any sense?
No.
It's like instead of giving Joe's t-shirt company, right?
Instead of giving Joe's t-shirt company an incentive to lower prices by creating economic conditions, fair economic conditions for competition, and having Bobby's t-shirt company whittle away your profit margins until you have to lower prices to give your t-shirts away at a little more competitive price.
What are they doing?
The government's giving Joe's t-shirt company extra money from other taxpayers as an incentive to increase prices, and then Susan Collins goes on the news and says, hey, we're really helping out the poor.
No.
Does this make any sense?
No!
No!
Oh, man.
I mean, head, meet desk.
Repeatedly.
This woman's... Folks, again, in Maine, I don't want to... If you're up in Maine, I don't want to beat this thing to death, but if you are a Republican, I am imploring you, humbly and respectfully, do not donate, do not knock on a door, do not drop literature for, do not make phone calls for, participate in no way in this woman's re-election.
She is an absolute disaster.
I'm really, although I would never in my life vote Democrat, I am seriously starting to question the value of checking the box for her, even in a general election.
She's actually fighting for the other side now.
I mean, it's really beyond disturbing.
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All right, Joe, another hot issue.
So the CSR payments, the bailouts are going to be hot this week and in the weeks forthcoming if we don't get something done.
But another hot issue is Trump is not only threatening to withhold the insurance company bailouts, which again, in case you missed it, I wholeheartedly agree with him on.
We should not be giving taxpayer money to health insurance companies.
That's ridiculous.
But he is also threatening to withhold the congressional exemption or to modify the congressional exemption.
Yes, right.
I mean, this is going to be a disaster because, you know, Congress, Congress, these guys are amazing up there on the hill, the men and women in the Congress and the Senate.
So Chuck Grassley, just a little history on this, because liberals will still insist that there is no congressional exemption of Obamacare because liberals, most of them, sadly, will lie to you.
Not all of them, but most of them will lie to you to advance a political argument.
I promise you I will not do that.
And if something ever creeps out on the show that is not in fact true, as we've done before, we will immediately correct it.
Now, the congressional exemption works this way.
In Obamacare, I will even give you, in case, by the way, for liberals out there listening, in case you think I'm making this up, I will go back, I will give you the actual Obamacare section and subsections where, excuse me, you can go back and look it up yourself because, again, I understand how you are.
I know you will use any amount of dishonesty to advance an ideological argument.
Section 1312d subsection 3d of Obamacare is what provides for the congressional exemption and here's how it works.
Chuck Grassley introduced an amendment to Obamacare that was subsequently passed which required Congress to purchase the same insurance plans everybody else was going to be forced to purchase through Obamacare through the Obamacare exchanges.
Folks, it's no more difficult than that to understand.
Don't let your liberal friends misguide you with dishonesty and magic tricks.
Chuck Grassley's amendment, which I thought was a good one.
Grassley's amendment said, Senator Chuck Grassley said, you will buy the same insurance everybody else is forced to buy under Obamacare.
Clear?
It's no more complicated than that.
Now, of course, Congress, Joe, freaked out and said, wait, what do you mean?
We got to live by the same rules?
We jammed down everybody else's throat?
Joe, this is so unfair.
This is so unfair.
We can't, this stuff is crap.
I don't want to give this for my, I just thought this was for the great unwashed out there in America, not for me.
So what did they do?
There was an upheaval in Congress because they objected to this, so they pushed Obamacare and their OMB director, who is Kathleen McGettigan, who may be on the way out by the way, they pushed them through the Office of Management and Budget to create a little loophole in Obamacare and allow congressional offices, follow me for a second, it's important you understand this because this is a hot issue this week, right?
They pushed OMB to do a rewrite to allow Congress to declare itself as a small business.
And if they are allowed to declare themselves as a small business, Oh, the congressmen and congresswomen and the people in the Senate can go to the D.C.
Exchange, where Congress is, Washington, D.C., the small business, and they can get subsidies from the taxpayer to buy insurance.
Folks, I'm not making it up, okay?
They now, even despite their almost $200,000 a year salaries, the relentless butt-kissing that goes on, all of the free perks they get, and the fact that many of them leave office millionaires.
God only knows how that happens, Joe.
They get into office, they're worth 10 grand.
They leave office, they're worth 10 million.
It's just amazing.
What happened there?
I don't even know.
You can't even figure out how these people get rich half the time.
They are now getting taxpayer money, the subsidies I talked to in the beginning of the show, to buy insurance for them and their staff as an end-around around their entrance into Obamacare.
What it changed, Joe, is they initially had FEHB, the Federal Employees Health Benefits Package, which I had as a Secret Service Agent, and really it's just like an employee-sponsored health care plan, and they played whatever it was, 10-20% of the premiums.
You get what I'm saying?
That was all wiped out, and then they had to go into the exchanges and with their own money buy insurance.
They didn't like that, Although, remember, it's good enough for you, Joe.
It's just not good enough for them, right?
Oh yeah, that's right.
That's wrong.
That's exactly how a typical congressman should probably sound, you know?
So they lobbied for a subsidy or a taxpayer-funded bailout for them, and they got it, which is amazing.
I mean, it's just incredible what happened.
Again, look it up.
Section 1312D, subsection 3D.
Go check it out yourself if you think I'm making this up.
They're now getting money to go buy insurance for them and their staff.
Now, here's the kicker, Joe.
They got themselves declared small businesses.
That Congress has under 50 employees.
Now, how that's possible, how Congress would have under 50 employees, given that there's 435 members of Congress?
How that's possible is only DC math.
That's like that fuzzy math we were talking about.
The Al Gore fuzzy math.
I don't know how they came up with that number that Congress is in fact a small business.
So when your liberal friends tell you there is no congressional exemption for Obamacare, say really?
Then how did they get out of the FEHB?
Because no one in Congress is in the Federal Employees Health Benefits Program anymore.
Oh, because of the Obamacare exemption.
Well, how did they wind up in the small business exchanges?
They're not a small business.
Oh, because OMB let them.
Oh, and how many employees do you have to have to be in the small business exchange?
Oh, 50.
Oh, so you're telling me Congress has 50 employees?
Uh, how's that possible being that there's 435 members of Congress?
Don't know.
Do you understand liberals lie to you constantly?
Guys, ladies, the most frustrating part of... I love my job, believe me.
I have the greatest job on earth.
I wouldn't trade it for anything.
But the one pet peeve I have is that it will drive you mad if you don't laugh once in a while.
Because liberals will lie to your face No, without a hint of regret, without a hint of hesitation, you call them on the lie, Joseph, and they will double down on it.
They'll go, um, section 1311d 3d, that's not true.
Look on, do you have an iPhone?
Do you have a computer?
Do you have a brain?
Just put it in there and read it.
No, no, that doesn't exist.
Okay.
Whatever, dude.
Whatever.
You got it.
You're right.
I'm making it all up.
They're just liars.
And they'll come back with this.
This is how they always respond to you.
Whoa, there's two sides to every story.
No, there's not, okay?
There are not two sides to every story.
There are two sides to a lot of stories, okay?
There are two sides to an approach to foreign policy.
I totally respect people who see non-intervention as a way to go forward.
I understand the proposals of a lot of neocons as well.
I happen to lean more towards a more, not isolationist, but more limited foreign policy approach.
But those are two different opinions.
Both have their pros and cons, Joe.
There is no alternate opinion about whether a congressional exemption to Obamacare exists.
None!
There's the imbecile opinion who can't read, and then there's the logical, reasonable opinion for people who've actually read Obamacare and understand what's going on.
Now again, the reason this is hot is Trump's threatening to repeal that as well.
And I say go for it.
Yeah, baby.
It's damn right.
So just to wrap this up in a neat little bow, you're going to hear more about this week.
I promise you're going to hear more about this.
The CSR payments, he's threatening to stop them.
I say call your congressman and tell him, do it.
And secondly, this is a little tougher one, because your congressman is probably going to hang up on you when you mention it, but call him and tell him you want his exemption gone too.
And listen to him or her explain to you, by the way, on the phone, even Republicans, how they don't have an exemption to Obamacare.
Explain to them what I just told you.
Say to them, what is 1312D3D?
1312d 3d i mean oh dude oh man sometimes i love my show and these
These are the shows I love the most.
I feel really good today, by the way, in case you could tell my joyousness.
Even though I got totally tooled on Saturday.
I mean, beaten to a... Talk about humbling.
Pretty chipper today, yeah.
Yeah, I know, but I needed that.
I was doing quite well in there.
Sometimes you need to take a good beating.
Also reinforced to me the importance of stand-up.
You know, this guy was really good in the ground, and if you're into mixed martial arts or just kind of combat sports in general, you need to be well-rounded.
You need to know how to box, Thai box, and wrestle, because if you see a guy like that who's so far above your skill level, and this guy was on me, Then you better keep them standing up, because I always laugh.
I love jiu-jitsu, but the guys will tell you, oh, 90% of fights wind up on the ground.
And my response is, yeah, great, 100% start standing up.
So if I could keep you standing up and pound the crap out of you in the feet, that's what I'm going to do.
So you've got to be a little more well-rounded.
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Alright, moving on.
You know, last week I gave you some apocalyptic news about the, potentially about the economy.
And I didn't mean to scare anyone, I think I was clear on that.
But I've been in a good mood today, so I wanted to flip the script a bit, so I did a little homework and found an interesting piece about some good news.
It's actually, since it wasn't difficult to find, it's on Drudge, but it was in the Wall Street Journal today.
You know, last week I told you about Greg Ip, who is an author, and how he was laying out some signs in the stock market, and if you missed the show you can check it out last week, it may have been Thursday or Friday show, how economic output is a percentage of GDP, stock values, corporate debt, how these are all traditionally high and we may have, you know, we may, may have a problem lurking around the corner, Joe.
Here are some really good signs.
There's an article out today.
I'll put it in the show notes.
It's from the journal.
I'm pretty sure it's open to non-subscribers as well because Drudge is running it.
And it says, hey, listen, there's some good signs around the corner.
I'm going to give you the reasons why.
Two consecutive quarters, Joe, of double-digit profit growth for big companies in America.
That's a really good sign.
Double-digit profit growth is a really big deal.
The first time we've seen that since 2011.
So two consecutive quarters, double-digit growth.
Now, he goes into some other good signs, but I'm going to stick with that one for a second and the reasons why, because this really matters.
And also, it ironically fits into the conversation we had last week about the warning signs, the more apocalyptic show, because do you remember, Joe, the gist of that show was, hey, things aren't that great, you better get a damn tax cut done now to head off the problems before they happen.
Yeah, I remember.
Nothing changes now.
Even if these are really good signs, you should be saying, all right, well, we need to double down then and bump it up to from, you know, 1.2% growth, which is what we had in the first quarter, to 2.6%, which we had in the second quarter.
We can do better.
2.6% growth, which we had in the second quarter, is good.
It's not great.
Our historical average is around three, so we're still below average, Joe.
But the proposals in the piece, The reasons, the justification in the piece for the economic growth, I think require a little bit of attention from us.
The author of the piece says, the reason companies are growing at double digits, at least recently, over these last two quarters, and have been, he says, number one, has been cost-cutting, which is an interesting proposal.
You know, Obama may have had an effect on the economy.
This is fascinating, Joe.
A perverse effect on the economy through his addiction to regulations, tax hikes, Obamacare.
These are all costs imposed on companies.
Right.
But what's interesting is over the eight years of Obama, all of the costs imposed upon them, Joe, the additional costs of Obamacare, the regulations which they needed lawyers for, Dodd-Frank, the additional tax burden, there were Obamacare hikes, there was an income tax hike, there was a capital gains tax hike, there was a payroll tax hike, all of these things built into Obamacare were additional costs imposed upon people or companies.
Now, why would that be a good thing?
It's not a good thing.
But that doesn't mean a good thing can't flow from it, and that's where I'm going with this.
What happened was, Joe, companies saw these additional costs coming down to them, down the pipeline, and they said, well, gosh, you know, you're in charge of Joe's t-shirt company, you see your costs are gonna go up, say, 5% next year, Joe.
Yeah.
Strictly due not to products, just due to government.
More regulations, more Obamacare, more taxes.
So Joe, what do you do?
If your profit margins are only three, four percent, what's your first response?
I'm starting to cut fat, baby.
You're damn right you're cutting fat.
You're going on a little bit of a diet.
You betcha.
Now, the fact that this happened over eight years, which we hadn't seen in a while, and to be fair, even under the eight years of the Clinton administration, it wasn't a relentless assault on business.
I'm not a fan of Bill Clinton, but not everything he did for business was bad.
We had RFRA, we had relatively controlled government spending, and we even had a capital gains tax cut under Bill Clinton.
Yeah, tax cut.
I mean, he hiked income taxes.
But not everything Bill Clinton did for eight years was a relentless assault on business.
We can't say the same for Barack Obama.
So it forced them, he, excuse me, when I talk about it I mean the government, but Obama forced companies through his relentless assault on them and never backtracking and never getting pro-business to do what Joe just said and cut a lot of fat.
Yeah.
Now that we have a pro-business president in Donald Trump, and even though the feckless Republicans are in charge, there's still the idea that, okay, even if the Republicans don't do anything, Joe, at least they won't vance any more Obama-type stuff.
You get what I'm saying?
So the gist of the piece is that Companies are growing because they're not even expecting anything anymore out of the Congress because they suck so bad, the Republicans.
But they just understand that the suck extends to not doing anything, too.
Like, you're just not going to hurt us anymore.
And now over eight years, we've cut a lot of excessive costs we didn't need.
Joe's t-shirt company is now a leaner, meaner company.
Oh yeah.
It's figured out new ways to do business at a cheaper cost to sell cheaper t-shirts.
And now they figure, okay, we've adjusted to the crap business environment.
It's not going to get crappier.
And now all of a sudden they're turning the corner on it because they've learned to operate as a leaner, meaner operation.
Does that make sense?
Adapt, adapt, adapt.
Adapt is right.
They adapted and overcame.
You're absolutely right.
So that's one of the proposals in the piece, that the relentless anti-business environment caused a lot of cost-cutting, and that cost-cutting has taught companies to learn to operate in a leaner, meaner fashion, and now that the anti-business climate has stopped, Granted, the pro-business one hasn't started because we haven't done much except get rid of a few regulations.
The Republican Congress can't get out of their own way.
They can't get the tax cuts and can't repeal Obamacare, but at least the bad stuff has stopped.
Another proposal as to why this may be happening is the weak dollar.
You know, I always have a problem with this.
I'm not saying they're wrong in the piece, I'm not trying to challenge them, but the whole idea of a weak dollar, folks, being beneficial for an economy is a short-term band-aid that eventually, when you rip off the band-aid, it's going to lead to a gushing wound.
So, it may be short-term, giving us a boost, and I'll explain that in a second, but this is not something to be relied upon by members of Congress and the Senate as a long-term economic plan.
Now, cost-cutting can be.
Cutting costs in leaner, meaner businesses that are very efficient and produce good products, that is a long-term strategy for success, Joe, every time.
Clear on that one?
Yep.
So I get it.
Now, the second part, they're saying, well, you know, weak dollar policies are leading to a boost in sales because sales are up 5% in a lot of these companies.
That's not a long-term plan for success and should be a Paul Revere-type siren sound for Congress to get busy on these tax cuts now because this is not going to be a long-term strategy for success.
Now short-term, here's why that works.
This is really simple stuff.
As the dollar weakens through inflationary policies, Joe, so we, the United States government, through its Federal Reserve, prints a lot of money, or artificially lowers interest rates, and pushes a lot of money out into the economy.
Okay?
Does that make sense?
Just act like a Monopoly game.
You're printing a lot of Monopoly money, Monopoly money goes out in the economy.
As the Monopoly money makes its way out into the economy, what happens?
Prices go up.
Because it's more money chasing relatively the same amount of goods.
So if you print $100 in an economy, and you have 100 chairs, each chair could fetch $100.
If you double your amount of money production, meaning you print $200, then each chair could fetch, if it needed to, I mean obviously it's not just chairs in the economy, but follow for a second, could fetch $2 each.
So you would have a 100% inflation rate on that, okay?
These are simple, I get it, these are simple examples, but simple's best, because these are not complicated problems, and economists like to confuse you by making them overly complicated to show you how sophisticated they are with their econometric models, which by the way, nearly always fail.
Now, those inflationary policies will weaken the dollar.
Why will they weaken the dollar?
Because it now takes you, Joe, more dollars to buy a chair.
Correct.
Makes sense?
It took you a dollar yesterday, they print a hundred extra dollars the next day, now a chair can fetch two dollars, now it takes you two dollars.
So your dollar doesn't buy as much.
The dollar is weaker.
What happens, though?
You may say, well, how does that benefit an economy?
Foreign nations, foreign buyers, Use that weak dollar, because if that weak dollar is, you can now convert your foreign money for more as well, so you can buy more with the same amount of currency.
Does that make sense?
Let me just, so if you have, you know, one Japanese yen was equals one dollar the day before the inflationary money printing, the monopoly money printing, right?
And the dollar weakens, the day after that one Japanese yen can fetch you two dollars.
Makes sense, Joe?
Because they printed more money.
Yeah.
I get it.
It's simple, but just play the game for a second.
If you printed $100 on one day and then doubled your money production the next day and it all flowed out to the economy, that Japanese yen, that dollar, when the Japanese buyer comes over, he's like, wow, what just happened?
I got a dollar yesterday.
This is like magic, Joe.
Today I get $2.
So what can he do?
He can buy more stuff.
And you may say, well, that sounds great.
The Japanese, we could get rid of our trade deficit.
Everybody's buying US stuff because it's cheap.
Okay, folks, that's great.
That's terrific short term.
Companies that exclusively export, which is very rare, Joe, in other words, that are catering almost exclusively to foreign buyers, they will do very well, no question.
Their sales will go through the roof because of the weaker dollar.
But think about what happens over time, Joe.
This is not a model for success.
They call it beggar thy neighbor at economics.
Why is it not a model for success?
Because, one, there are no companies, almost no companies, that exclusively export.
Companies that export, import as well.
So let's say you have a product you export.
I'll make it a real simple example.
A car you could only sell in Japan.
Let's say Japanese buyers like a flux capacitor on their car.
Yes, love it.
From Back to the Future.
And it's the only country in the world that wants it.
So GM says, okay, let's build a car In Georgia, exclusively for Japan because they want the flux capacitor on it.
No one else will buy it.
Now you may say, wow, weak dollar's great because Japanese buyers now can buy the car cheaper because of inflation.
Their yen gives them more dollars to buy cars, right Joe?
All right.
Well, what's the problem with that over time?
The problem over time is the flux capacitor car built in Georgia Has parts sourced from Mexico, has parts made in Texas, has parts made in Wisconsin.
The global supply chain is broken up into so many pieces that you're not selling, although you're selling the car to a buyer overseas, you're also buying the car, pieces of the car, say the tires from Mexico, but now you have a really weak dollar.
So now the weak dollar that the Japanese buyer got more of, the dollar holder gets less pesos from Mexico.
So a day before the inflation, let's say it was one dollar for one peso.
Now in order to buy the tires for Mexico, they need pesos.
So in order to get a peso the day after the inflation, Joe, what does he need to produce?
Two dollars!
Does that make sense?
Because the Mexican peso is now, the weak dollar means your dollar's weak.
Yesterday you could buy one peso for a dollar.
Now you need two dollars to go get a peso.
So now the tires are more expensive on the car.
So now when you go to sell the car to the Japanese, you have to make up the cost for the increased cost for you to export products that go into the final product.
I know that's complicated.
I get it.
I understand it.
But the weak dollar means your dollars are weaker, too.
What Democrats and people who don't understand trade will tell you is, oh, weak dollar is good because it makes foreign buyers stronger.
Okay, Joe?
Does that make sense?
Yeah.
Which it does.
Weak dollar means stronger foreign buyers.
Great!
Foreigners will buy our stuff because they have strong money.
Okay, great.
Then when we go to shop overseas, we have a weak dollar.
We need to produce more dollars to buy their stuff.
Folks, this is not a model for economic success.
It's a model for economic stupidity.
So, and I'm not suggesting the Wall Street Journal has this wrong, but I'm just saying, attributing, you know, Cost, you know, sales growth to a weak dollar.
You have to keep in mind that that may be a short-term fix, but it's not long-term.
Although the cost cutting is a good thing.
So just some, those are ironically some good signs because I think the weak dollar, if it's used as a sign to Congress to get the tax cuts in there, get economic growth, which will lead to higher interest rates, could be a pretty good thing.
All right, I know that was a little deep today, but it's important we talk about that.
I didn't want to leave you with the bad news.
There is some good news on the horizon.
If we get those tax cuts, I think you could see a stock market, a significant jump in the stock market, and even further boost in corporate and business revenue, which would be great for the country.
So I think we could be in really good shape.
Bye, folks.
Thanks again for tuning in.
I really appreciate it.
We'll see you all tomorrow.
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