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April 3, 2020 - Rudy Giuliani
49:29
Charlie Kirk and Norm Champ Weigh in on the Historic $2 Trillion Stimulus Package
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It's our purpose to bring to bear the principle of common sense and rational discussion to the issues of our day.
America was created at a time of great turmoil, tremendous disagreements, anger, hatred.
There was a book written in 1776 that guided much of the discipline of thinking that brought us to the discovery of our freedoms, of our God-given freedoms.
It was Thomas Paine's common sense Written in 1776, one of the first American bestsellers in which Thomas Paine explained by rational principles the reason why these small colonies felt the necessity to separate from the powerful Kingdom of England and the King of England.
He explained their inherent desire for liberty, freedom, freedom of religion, freedom of speech, And he explained it in ways that were understandable to the people, to all of the people.
A great deal of the reason for America's constant ability to self-improve is because we are able to reason, we're able to talk to each other, we're able to listen to each other, and we're able to analyze.
We are able to apply our God-given common sense.
So let's do it.
Hello, this is Rudy Giuliani with Rudy Giuliani's Common Sense.
And this episode is going to be devoted to the economic aspects of what we're going through in this terrible crisis that faces America and the world.
For us, I guess, one of the worst in terms of a pandemic having dramatic impact on our economy.
Our first guest, Charlie Kirk is the head of Turning Point USA, a great organization, and he's turned a lot of the resources of that organization over trying to figure out what's good about a bill that has some pretty bad aspects to it, but like anything else that comes out of Washington, you know, good, and you get some bad and some good out of it.
And we have Charlie with us and I'd like him to to kind of take us through it and then first talk about the micro parts of the bill that are helpful.
And then we'll talk about some of the parts of the bill that really need to be corrected.
Charlie, how are you?
I'm great.
Thank you, Mr. Mayor.
And thanks for the opportunity to talk about this.
Congratulations for the work that you're doing, because it's keeping people hopeful.
And we've got to work at that to make sure we keep them hopeful through this.
You know, it's not all doom and gloom.
I know.
I know.
I agree.
And so you and I were kind of talking beforehand There's a lot of unintended consequences and externalities that are happening.
So the first thing I want to say is for anyone out there listening to this podcast that you might know someone in your life that might not do well in social isolation, please keep in contact with that person because I study this pretty closely because I've lost some of my dearest friends to suicide.
There are some alarming escalations in suicide happening right now across the country.
Well, it's a very, very important point to make.
Air Force, I think, cadet or Air Force, individual at the Air Force Academy
committed suicide because of social isolation.
In Knoxville, Tennessee, they're seeing, they saw such a dramatic increase,
they had 10% of their 2019 number in just 48 hours.
So anyway, I just wanna say that first because everyone has someone in their life.
Well, it's a very, very important point to make.
It's kind of being ignored, but from the very beginning,
it troubled me that that would happen.
But we've gotta do everything we can to avoid it by keeping in contact with these people.
So tell us about the stimulus package and how particularly small businesses can utilize it so they can get through this period for their employees.
Yeah, totally.
So if you're a small business owner right now anywhere across the country, help is on the way.
Starting Friday.
April 3rd, you'll be able to go through your local bank to get access to capital.
So here's how it works.
Let's say that you're a small business, essentially less than 500 employees.
There are two basic capital relief programs and packages you can access.
One is called the payroll protection.
The other is called the Economic Injury Disaster Loan.
Let's start with the Payroll Protection.
And there's a third one too that I'll talk about, which is the Employee Retention Program.
We'll start with the Payroll Protection.
This loan, which is up to two and a half times your payroll from the last couple months, will be totally forgiven.
So it's basically a grant.
It's very simple.
payroll, utilities, or rent.
So I encourage every single small business owner out there to go after this immediately.
Go to your local bank, call your small business association desk,
essentially you call your bank, say, hey, I wanna talk to the person handling SBA loans.
Every bank has that person.
And apply.
And it's very simple, it's a couple page form.
And as long, and look, I'm a little bit, I know there's, people are gonna misuse these funds,
Mr. Mayor, and you talked about this, but we gotta bet on the American people
that they're gonna act ethically and honestly, And if anyone does act nefariously, I hope that the feds go after them, because that's not right, especially in a time of crisis or need.
But for those that need it and you spend it on payroll, utilities or rent.
And you do not decrease your labor pool down to prior 2019 levels of your average workforce.
It's all fully forgiven.
Now if you go below your 2019 levels, anything below that alone is not forgiven for that specific level.
So I encourage every single small business person out there to go do this immediately.
It's fully forgiven if you're able to demonstrate that your business was impacted. I don't know any business except Clorox that
was not impacted.
So secondly, the economic injury disaster loan. This is not a forgiven loan, but it's at a
manageable low interest rate and it's a higher amount of money. And it's the first year is
deferred. So it's basically enough to pay any sort of interest on the loan for the first year. It's
about a five year repayment, about three and a half percent to be used as you see fit.
I highly encourage small business people to go after this.
The other is the 50% employee retention.
So if you get the 50% employee retention or you decide to use it, it's available to any small business out there.
You can't also get the other two loans that I mentioned.
So it's an either or.
But the 50% employee retention, Is best for individuals that might have hourly workers or they don't want to go through the SBA and they don't want to go through the whole loan process.
You actually it's a refundable tax credit so the government will send you money when you fill out your 941 quarterly report.
So for anyone right now that actually has kept employees on since February 15th and you don't want to deal with the SBA or don't want to deal with the loans and I get that some people Are apprehensive about it.
You right now on April 1st, this is the window where you fill out your quarterly 941 payover report.
So the government will pay half of your employees wage of what you have kept on.
It's called the payroll retention, essentially the employee retention package.
And they will send you a check within two weeks as a refundable tax credit.
The last thing, Mr. Mayor, that I encourage every single small business owner to take advantage of is the deferral of the payroll tax.
Your employer obligation of payroll taxes, about 6%, can be deferred up to the end of 2021 and can actually be as far as deferred as the end of 2022.
If you think we're going to go through some period of inflation, this is basically interest-free loan right now for any employer. I encourage
every single employer out there to take advantage of this deferral. That's
just some of the really good right now. I encourage every person out there
that might have a sole proprietorship or a small business, take advantage of it.
This is the time to really try to keep your businesses open. We need the
backbone of small business in our country. How many American businesses and self-employed
people do you think will take advantage of this? Tens of millions.
So it's pretty simple.
This is not complex.
This is not terribly complex, like, you know, filling out a gigantic tax return.
Well, and I got to give the president of the United States tremendous credit because he demanded out of the Treasury Department and demanded at Congress.
He said, I don't want to have what happened in 2008-2009 financial crisis, where you got to go through all these sophisticated instruments.
And meanwhile, people are defaulting on their homes.
This is going through your pre-existing bank, which I say it's a very, very good way of doing this, because you have the relationship, you have all the documentation, you don't have to go through more lines of bureaucracy.
They know your balance sheet, basically.
Wow.
So it's a much better way of doing it.
You know, this is part of deregulation, in a sense.
Yes.
Had it been done by a prior administration, almost any prior administration, there would have been so much red tape surrounding it, half the people would have been discouraged.
That's correct.
That's right.
And so some other kind of goodies, if you will, in the bill is for those of you that that are looking for additional relief and additional assistance, there will be in my if you kind of look at the small business protections and the insurance side of it, I believe that For businesses that are looking for the EIDL or the payment protection or the deferral of the payroll of the payroll tax, if you will, there also will be state based programs that could supplement these federal programs, especially for New York, New Jersey, and some of the private lenders.
And so help is on the way for the small businesses and for the entrepreneurs out there.
And Mr. Mayor, we could dive into some of the other aspects of it, the unemployment and so on and so forth.
But the main thing is to keep people working.
I mean, the unemployment, I can see the need for it and the necessity for it.
But the more spent on this side and the less that we have to spend on the other side, the better off we are, right?
Yeah.
And so the unemployment part is probably the one where I've voiced my greatest deal of opposition.
Tell us about that.
Yeah.
And so we started with the good.
Now we've got to get to the honest bad.
And the president had to sign this.
He had no choice.
And I hope Congress goes back and fixes this.
So typically unemployment is supposed to be a safety net.
It's not supposed to be a hammock.
And so what Congress did is they basically said, all right, you'll get your state based unemployment insurance plus $600 a month.
And that's absurd.
Basically, you're going to be having millions of people that are going to be earning more on unemployment than they were when they were gainfully employed.
It's going to create stickiness and it's going to create basically an entire permanent amount of individuals that don't want to go back into the labor pool.
So, for example, In the state of California, New York, unemployment would
pay about 45% of your quarter two wage from last year.
So let's pretend that's about four or $500 for a middle income family in Long Island.
Plus $600 would be $1,100 a week.
That's more than they were earning with their wage previously.
I don't think that's what unemployment should be for.
I would, Mr. Mayor, I would have liked to have seen the payment protection program doubled
and this unemployment to reduce.
Yes, of course, right, where people incentivize to keep people on their books, not put them
on the unemployment rolls.
Is there a salary cap for the protection program?
Is it $100,000?
Yes, that's right.
It has to be prorated to $100,000 a year.
So anyone that earns more than $100,000 a year, they can have their wage covered up to $100,000 a year.
Right.
So, I mean, that's going to cover most of the basic workers.
That's right.
And it will cover, if someone's making $150,000, it would cover a hundred of the hundred of the $150,000?
That's right, but per month.
Pro-rated per month.
That's right.
And so you have to cover the overages over that.
And you could use some of the other loan.
You could use the loan to cover the rest.
You just have to repay that part of the loan.
And so this accountants are going to make a whole bunch of money on figuring out how to categorize a lot of this and how to kind of go through it.
Another kind of portion of this that I do want to communicate to people out there and small business people.
And I'm really someone who employs people.
I'm insistent of this, which is Try your best to keep people on your payroll.
It really helps.
I know it's difficult, but I'm a big believer in dignity.
I'm a big believer in keeping people purpose.
It's hard.
As someone that has a big payroll and campuses are totally shut down, I understand that it's very difficult, but it's something that I'm really trying to communicate to the audience out there, small business people and entrepreneurs.
And I'm encouraging Congress to try to extend this payroll protection program If possible, because this we cannot allow the economy to destroy.
And one of the thought on this, Mr. Mayor, in the Constitution, a document that you've built a wonderful career defending and putting away people that have violated the Constitution.
There's Article 5, which says that in Article 5, it says that if the government takes your property away from you, you are deserved compensation.
Well, you could make the argument that the government shut down these businesses, right?
The government shut down the flow of people into restaurants and movie theaters.
You make the argument.
This is not a handout, Mr. Mayor.
This is not welfare to these businesses.
This is equal compensation for the government shutting them down.
It's a great argument.
It's a great argument, Charlie.
It's a great argument from the point of view of morality and decency, too.
You know, my father used to say that no matter what a man has to do for work, Yes.
that man is dignified and that man should be honored to support his family. Work is so much
better than not. And keeping these people working and even keeping them in a status where maybe
there isn't much work they can do, but they know they're going to come back, that's going to reduce
the suicides too. And it's going to reduce the depression.
And it's going to reduce the sense of hopelessness. And I would think Congress would extend
this if, God forbid, this goes further But is this a unique program?
I can't think of a program designed like this before, when we've had recessions or even—not that I recall the Great Depression.
I'm not that old, but I read about it.
I don't recall a program quite like this.
It's phenomenal, Mr. Mayor.
In fact, for the small business part of it, I'm not a big fan of the big bailouts for companies.
We can talk about the bad or the NPR stuff or the PBS stuff.
But I want to see the administration brag more about this, to be honest with you.
And I don't think they've actually done as good of a job as they could.
I get there's a lot of communication needs right now.
I mean, they got to talk about testing.
But I would love to see them use 10 minutes dedicated to clearly talk about how powerful this program is.
Mr. Mayor, I've never seen a program like this.
And this 5 to 10% of the bill should dominate 90% of the communication, right?
So let's focus less on the loans for big airlines.
Let's talk about more how, hey, the federal government's coming in under Article 5, and we are going to save small business in this country.
And here's how we're going to do it.
Because to your credit and your observation, I don't think so, Charlie.
I think this is unique to the Trump administration.
I'd really like to know who came up with the idea.
Sounds like people who understand business, and it keeps people working.
When you think about Roosevelt and the programs that were necessary to get through the Depression, they basically—and a lot of people will say they had to at that time—they created dependency.
Yes, that's right.
it and then they were overdone and kept on too long and then they morphed into the great
It is.
society and we ended up with a large dependent society.
This is just the opposite.
This is trying to preserve independence for people.
It really is a brilliant program.
It is and the worst parts of the bill are the unemployment which is going to do similar
to what FDR and LBJ wanted to do but I want to see the focus to be extending on the small
business and the payroll protection.
Every person we can keep off of the dependent on unemployment role is a win for America.
It's going to make this recovery easier.
It's going to make our transition back to normalcy easier.
And I'm afraid, though, that business owners are now going through a purge where they're saying, well, maybe we didn't need this many people before.
Yeah, in some ways, you could say, oh, well, that's good for efficiency, but it's not good for the economic strength of the country that President Donald Trump was able to to be able to basically talk about and be able to achieve.
And so I want to see them talk about this more and also expand this program.
If there's going to be a phase four, Mr. Mayor, they should expand this payroll protection, economic disaster loan and also the employment employment employee retention program.
Charlie, just quickly, the economy itself.
Obviously, there's no way to describe the economy right now.
It's under an attack that it's never been under before.
But how do you see us coming out of this?
So look, I'm actually going to be advocating that whenever we as a country are comfortable with the curve flattening, I think the president and the White House, the Treasury and Congress should advertise a buy out America campaign for five to seven days.
Have every single day be a different theme.
Maybe do a sales tax holiday.
Maybe do, hey, we're going to pay for a sale for have retail, travel, charity, restaurants and and really challenge America to go big.
And you know what?
America will step up.
And I'm telling you right now in five to seven days, we'll be able to do months worth of purchasing.
And psychology will dictate that a couple days of good can erase many months or many years of bad.
And if in July, or if it's in late June, all of a sudden America goes back and we're filling movie theaters and we're purchasing out inventory, you're going to see that confidence.
That's the greatest stimulus that we possibly could have, Mr. Mayor.
Not the unemployment stuff, not giving millions to NPR, but I want to see President Donald Trump, and I know he will, Mr. Mayor, because he's a businessman, I want him to say, We're open for business, America.
Go nuts, right?
And I want to see America go to bedlam.
I want to see us go crazy in a good way.
I want to see inventory being poured out because there is that pent up demand.
And so but here's the thing, Mr. Mayor, we can't do it too soon.
And, you know, I'm a guy that wants to you know, I'm anxious to get back.
I have that same problem when September 11 happened.
I try to urge, along with President Bush, the stock exchange to come back two days later.
And Dick Grosso said I could bring it back for two hours and then it would go down.
I said, okay, Dick, we'll wait.
But it did come back the next Monday and I forced Broadway to open within two days.
And the first two nights in Broadway, there was nobody in the theater.
But by the third night, they were full again.
I am a very big believer in, you gotta get people's eyes lifted toward the future.
Because right now, their eyes are on the television, and they're watching all these terrible numbers, and you can't help but just about cry when you see this.
I agree.
Amen.
realize it's not going to be like this forever. You got to get their eyes toward the future.
Baseball is going to be back. Broadway is going to be back.
Jobs are going to be preserved.
We're going to be stronger. I think they should realize 9-11 did this to us. We're going to be
stronger for having gone through this. Amen. I mean, we're going to be strong and hopefully,
Charlie, we'll be more united as Americans. Hopefully. Yeah.
And one other thought, one other thought I would recommend, and I'm going to say
this both privately and publicly, the president needs to announce a transition business task
force to be working in harmony right now to get ready for that moment. How we are going to
open up retail, how we're going to open, because Americans need, I think the market would respond if
they saw Elon Musk, if they saw Doug McMillan from Walmart, if they saw these other front-facing
companies, if you will, Bezos, working in concert and harmony to be ready for that moment.
Because Mr. Mayor, if we're not prepared, all of a sudden we could have some fumbles and some false starts.
But America needs to say, hey, someone's looking to say how I can go to a Chicago Cubs baseball game in August.
I'm a Cubs fan.
I know you're a Yankees fan.
Maybe we'll play each other.
How beautiful would that be though, right?
That people that say, Hey, Mr. Mayor, I'm getting more messages where people are anxious.
They're saying, is football going to be coming back?
Seriously.
I mean, this is stuff that's, and I know that might seem silly to some people that aren't, and this is a livelihood of tens of millions of Americans.
And that needs to be communicated.
I would urge people to watch a documentary that I still think is available on HBO.
I don't remember if it's seven miles or nine miles from ground zero, but it's about how baseball helped America come back from September 11th.
And it culminates in Bush throwing the pitch, the first pitch at Yankee Stadium.
But look, people need to be reminded that there's more to life than this. And all
you have to do is access that once. Maybe they like baseball, maybe they like plays, maybe they like
music, maybe they're deprived of all of that now except on television. Yeah, and Mr. Mayor, you
remember Frank and Delano Roosevelt wrote this beautiful letter in the presidential archive,
and I've seen this letter when I was waiting in the upper reception room to go into the Oval.
I read it in the Presidential Archive.
Franklin Delano Roosevelt wrote a letter to the Baseball Commissioner, urging him not to cancel baseball during World War II, saying that, I know the quality of play will be decreased, but people need baseball now more than ever.
They need that daily drumbeat, that daily escape.
And he was right.
I mean, FDR had a lot of flaws, but he was right.
Stan, we can't do that.
He was absolutely right.
Exactly the philosophy I followed after September 11.
I basically harangued people to come back.
Broadway, baseball, football, David Letterman, anyone that wanted to perform, so that people started to see there's going to be a future.
Well, we'll get through this.
We're really strong people, and I really believe we're going to get through this, and we're going to really amaze the world at what we can do.
I agree, Mr. Mayor.
And Charlie, you'll be one of the reasons.
Well, thank you.
You're doing a great job.
God bless you, Charlie.
And stay safe.
God bless.
Stay healthy.
Thank you.
All right.
We will.
We need you.
We'll be right back.
Welcome back to Rudy Giuliani's Common Sense.
I have with me A guest who we've interviewed before and has a really keen perspective on what's going on right now.
In fact, fortuitously, Norm Champ just wrote a book called Mastering Money, and the subtitle of the book is to be prepared for any financial crisis.
He had to be a prophet, writing this book.
He's written many books on the economy.
He's also a practicing lawyer with Kirkland & Ellis.
And I think we couldn't have anyone better to kind of assess the micro effect, the macro effect, and some practical advice on how we get through this.
Norm, how are you holding up?
So far so good, Mr. Mayor.
I feel very fortunate that we are busy, you know, so have work to do and, you know, it's unexpected benefit is time with family.
So, you know, I feel lucky.
Well, I feel lucky too because I'm busy and I think it must be terrible if you have nothing to do during this period.
You've got to create something, some way to help.
But Norm, I thought maybe we would start with some practical advice for people that they're home, maybe they're still getting a salary, maybe they're not, but they're starting to worry about that 401k.
What would it be now?
About half of what it was a few weeks ago?
Well, U.S.
stocks are off more than 20%.
They have come back a bit.
So we are officially in a bear market.
So those people who depend on their 401k or dream about it, they're down about 20% you think?
Probably, yep.
I thought it was worse.
It's been worse over the last few weeks.
And it's down again today.
I think the main thing on 401ks is to remember that stocks are a very long-term investment.
So when I was at the U.S.
Securities and Exchange Commission, the studies we did of Main Street investors showed consistently that people sold when the market was down, and then when the market was up, they regained confidence and they would buy.
So that's, of course, the opposite of what you want to do.
So I would counsel people Be patient.
The federal government has done a lot to step in on the economy.
Stocks are down, but it's better to not sell at this point and understand that if you hold stocks over the long term, you're looking at around a 10 to 11% annual return.
So, very important to hold on through this.
And try other things like some of these interest-free loans, long-term loans, forgivable loans, if you need some liquidity, right?
Yep, so I think it's, you know, it's a right.
We're in this time, the federal government, both the Federal Reserve and the Treasury are empowered to lend to businesses.
Now, there's still some lack of clarity about what exactly that's going to mean from Treasury.
There's a general loan program, there's a mid-sized business loan program, and then there may be a Main Street lending program.
At the same time, the Small Business Administration is offering loans, and particularly payroll protection program loans, to smaller businesses as well.
So there are a lot of resources out there for businesses, and this is very different from the last crisis.
So, 08, 09, the lending tended to be to banks and insurance companies, some of those folks,
and of course that was very controversial.
This time around, the Fed and Treasury and SBA are really empowered to lend to businesses.
So if you are a business owner, it is important to check out all of these programs.
And I agree with you, I think it is on the income side of the ledger, there are resources available, and it's worth checking them out, particularly some of them are forgivable after a certain amount of time if you keep your payroll the same.
So there are various conditions.
But it's an important source for income as if you're in a business that shut down, These loans are meant to help those businesses survive so that when we come out of this, we don't just have a bunch of businesses that are gone.
They can actually restart and come back.
I think the rationale for that program is ingenious, really.
I don't remember, you may, that we ever utilized anything quite like that before in depressions or recessions or a program where businesses are given help to kind of stay alive so they'll be standing when the thing is over and they can regroup.
I've never heard of anything like that.
I don't hope it's going to work, but I think it's an ingenious program.
Can you think of any similar thing the government did before?
They did not.
And the solutions in 2008 and 2009 were so different, right?
Because they were lending to banks Um, they were propping up, you know, and in fact, think of companies that got in trouble.
Um, you know, we're basically turned into banks.
So Morgan Stanley and Goldman Sachs were turned into banks over the weekend, you know, and so it was really a bank driven solution and it's interesting, right?
Because that in the end, that caused a lot of resentment that the banks had been bailed out.
And I feel like these programs are much more targeted to frontline business and frontline businesses who employs people in America.
And we just don't want these businesses to go away permanently because of this unexpected event.
I also think that hopefully, right, even in a worst case, let's say we get a recurrence in the fall, we're probably talking about an event that is, you know, six months, eight months, you know, something, right?
And the problem in past financial crises where you just didn't know how long they were going to last.
Right.
You know, I think it's a very logical response because we've got a virus and if we, once we get over the virus, then we want our businesses to be able to be there and snap back and get people back to work.
So I agree with you.
I think, and it was not done in a way, there were no corporate loan programs like this.
And so it's uncharted water a little bit, and it's going to require some navigation, but the programs are there and the government is looking to help businesses.
So I would agree with you that on the income side of people's ledgers, That's a place to look for help.
And would it be generally good advice to say to people, kind of suggesting what you said before, that if you have to get your hands on some money, borrowing might be better than cashing in stock?
For sure.
If you can, borrowing, rather than selling here at the bottom, it would be better to borrow from the government.
And the other piece of this is, The private credit markets are basically very, very shut down, very quiet right now.
So that's the other interesting part of this is, as always, when we get a crisis, you know, lenders have money called from them.
They have to get money from others.
You know, they have their own liquidity issues.
So we have seen private credit be very much, very quiet at this moment.
And that's a perfect time to say, OK, the government comes in and lends money.
And it's lending money against assets.
Remember, Most of these loans are against assets.
Um, so some of the Fed programs are against assets.
So it's a time when you could see the government coming in and doing this.
And then a lot of these programs by their terms terminate in the fall.
Some of the Fed programs already say they're going to terminate in the fall.
So of course they could be extended if, if we, if things go worse, but, but so it's a temporary measure to keep these businesses going.
I think the other thing for individuals is, You know, we are caught at home.
Everybody's in the same boat.
I think it's important to think about expenses.
So as an individual sitting at home right now and, you know, hopefully have things to do, but if there is spare time, it's a good time to also look at the expense side of the ledger.
And one of the points I make in my book, Mastering Money, that you mentioned is as Americans in a consumer society, we often have expenses that are going out the door.
that we don't even know about. So for instance, one of the things I talk about in the book,
most people have an average of nine apps that are charging them automatically every month for
various, you know, video services, right? And the studies show most people use two or three,
you know, and the other ones are just are recurring.
Fabulous advice!
That is really totally relevant, fabulous advice that pertains to yours truly.
So it's a time when, if you have a little spare time and you're at home, I would recommend looking at your credit card statement, look at your bank statement, look for those recurring charges that are coming out of your, you know, pocket.
Most of them come when we all see, oh, sign up for a free trial.
You know, just put in your credit card and we'll bill you if you like it or something like that.
Most people forget to cancel.
So that's an easy one to focus on expenses.
Obviously, it's a smaller piece, but it's more of an example.
So as you're looking at your bank statements and looking at your credit card statements, think about other charges and things that, you know, do I really need this item?
Is that real?
Because this is a time where you can cut the expense side as well.
And then hopefully when you get back to work, then you know, people get back to work, they have a lower on the expense side, they get back to work, get cash coming in.
And it's, you know, then they can hopefully achieve income over expenses, which is the goal.
So we can get positive cash flow, and then use that positive cash flow to reduce debt and start investing.
So, so it's a great time to think about expenses.
Well, how can you analyze how we come out of this when this downturn, this problem in our economy, is not really a problem in our economy?
Almost all of the other financial crises we had, except maybe those caused by war, were caused by some internal problem in the economy.
The Great Depression, 08.
This is caused by an external force completely unrelated to the economy, a pandemic of, I guess, historic proportions.
I mean, we'd have to go back to years ago or anything like this, the Spanish flu, I guess.
So the economy was so solid the day before this all broke.
Now the economy is faltering.
This is going to be over.
I guess it becomes a question of what gets destroyed as a result of that.
And what continues and what can be rebuilt, right?
Some some analysis of what permanent damage does this do?
Yep, I totally agree.
And if you think about it, that is really the tragedy here of where we are at the moment, because the boom that has been going on for the last three years was benefiting, you know, hourly wage earners in particular.
And so wage growth, which had been stagnant for 10 years after the crisis, Wage growth had really picked up and that was very encouraging for our society and for social mobility and for people to move ahead in our society.
So to see the really good wage growth we had and to see that wiped out by 3.3 million, you know, jobless claims last week, which by the way is five times the prior records, just incredible.
And so It is very sad.
I'm very sad for workers who have lost their jobs.
Now, how do we move forward and how are we going to come out of this?
Obviously, this thing is going to run its course.
I'm not an epidemiologist, but everything I read and listen to, we are going to run our course.
The question is, how long?
I sort of think of the economy in two ways as we come out of it.
I think there's a certain level of economic activity that comes back right away.
So, you know, we will still need products.
People are still going to need things.
There's the, you know, getting, you know, sort of manufacturing those things.
And there's a whole, there's sectors of the economy that I think can come back pretty quickly.
The area in the economy that I'm quite worried about is, is in fact the very same areas that have produced so much of this unemployment.
So even when this has run its course, You know, do we see people going back to restaurants, going back to movies, going back to concerts?
Do we see them going back in short order to those activities?
It seems, you know, it's, I think it's a big question, you know, will people want to get out and do those activities or, you know, are they going to be nervous?
And I'm afraid that they will be nervous for quite some time.
And so, That leads to your destruction point, right?
I think that there's probably a certain number of businesses that just won't be able to weather that.
Now, I'm sure on the other side, you know, leaders will be urging people to get out and go to local businesses and do all those things.
I just think people are going to be very scared.
This thing has proven to be, I think, a lot scarier than people thought.
When you drive through New York City, which I try to do about every two days, and you see how abandoned it is, and you say to yourself, this is a city of 8.3 million people who love to be on the street and love to drive cars, and you see nothing.
You realize people are obeying.
By and large.
I'm sure we have examples of people who aren't.
But people are, by and large, obeying.
And as I check other cities, it's pretty much the same.
That means they're very frightened.
I mean, this is not one of these things where they say, oh, Cuomo's exaggerating, or Trump is exaggerating, or Fauci is exaggerating.
They're buying it.
So, this will have created some long-term effect, like 9-11 did.
You know, people had fears of flying and fears of airplanes going into buildings.
So, take me through one more time the two different ways in which you analyze the economy, because there was something there that I wanted to recommend.
So, I think that if... I think there's certain areas of the economy that don't rely on that kind of traffic, right?
Healthcare, right?
Healthcare doesn't require large gatherings, you know, a lot of things that I, I'm in the financial world, you know, a lot of things we do don't require large crowds.
So I think there are certain parts of the economy that can come back relatively quickly.
I am worried about the types of activities, the types of economic activities that depend on large groups, you know, being away from home in large groups, traveling to a concert, Traveling to wherever.
To your point on fear, this thing has come quickly and I do think people are scared.
The videos are dramatic and the numbers are dramatic.
I just have my doubts that people go back.
Say we're out of it in December.
Let's say we get a recurrence in the fall.
Let's say we get a cessation in the summer and then a recurrence in the fall, which is what happened in 1918.
But then let's say it's over by December.
Do you see many people going to a concert at Madison Square Garden in January?
No, I think very interesting will be what's Christmas like in New York?
You know, I know New York better probably than any place.
The month of January and February in New York is generally empty.
This is the time you can get discount tickets to plays, discounts on the greatest hotels, the hotels of 60%, 50% occupied.
Then we get into March, St.
Patrick's Day usually marks the beginning of the tourist season starts.
And then from March, virtually through December, it's just every month gets better and better and better and better and better and better.
And from the time that we changed the city and we reduced the crime, we get tourist numbers that rival Orlando and Las Vegas.
They're the top three.
Now, that's going to get hit very hard.
We expected that after September 11, and it did get hit very hard.
But our mutual friend, Christine Nicholas, helped me with a program that turned out to be ingenious.
About two days after September 11, I went to the Broadway people and I said, go back on.
And they said, we can't.
People are too frightened.
I said, oh, stop it.
They have to come in from New Jersey.
They have to come in from Long Island.
I'll send the police to bring them in.
Nobody will shoot them.
Nobody will hurt them.
I'll put police in the theaters.
Just go and perform.
So I think by Thursday or Friday night, they were back.
I went to seven plays one night.
Like, for ten minutes.
There were six people, basically, in the theater.
And boy, this thing looked like it had really bombed, right?
The theater owners, by the weekend, were ready to kill me.
Tuesday, they come back, and the place is full.
They advertised.
They sort of embarrassed people.
You gotta come back.
You gotta come back.
And then we started a program where we advertise for people to come to New York.
And we used Henry Kissinger, and we used Barbara Walters, and we used great New Yorkers to say, this is a time to see the city, this time you can really enjoy it, and this is the time you can show you an American patriot.
And I think you're going to need something like that.
You're going to need something that gives them a bridge over their fear.
And now, this is a different thing than September 11.
But if you think about a week or two or three after September 11, people were still afraid to fly on airplanes.
People were still visualizing every airplane going over a building.
And there was a national effort.
Remember, Saturday Night Live did a whole show about coming back.
David Letterman did a whole show about coming back.
There was almost a concerted effort to rebuild the confidence of the American people.
You can take an airplane.
You can go someplace.
You'll be protected.
And don't let the terrorists frighten you.
That's the game they're playing.
So I think we're going to need to develop a program like that because I think you're absolutely right.
The day it reopens, A lot of people are going to stay home and there's got to be an effort to get as many of them out of those homes as possible.
So that's something that government could work on with the private sector.
And, uh, I think that's a very good thing to note, Norm.
Now, how are you doing in terms of your own work?
Uh, so, you know, I'm busy.
Um, I, as I said, I feel fortunate, uh, to, um, to be in a area of law practice that's busy, uh, the investment world.
Although markets are down, in down markets, the investment world is always thinking of new ideas and where are there opportunities.
And so it's been very busy.
And I think that's why I was mentioning about different sectors.
I think there will be different sectors that can continue or restart relatively easily.
And I agree with you.
I think leadership like you showed after 9-11 and leadership to get people out into the Yes.
And this is a Trump strength.
I mean, he's a cheerleader.
Just think of his own rallies that he has.
They've all been interrupted.
Yes.
And he's going to want those back pretty quick.
Yes.
Particularly running for re-election, right?
Yeah.
No, no, absolutely.
And he'll be, no, he'll be great.
And obviously, you know, he'll be great at, at getting people rallied.
And, and, you know, he's, I mean, and he's also emphasized, I mean, we do need, you know, I think he's listening to the scientists and he's extended social distancing to April 30, but, you know, we also need to get the economy going.
There will be terrible human costs if we don't get the economy going.
So there is this balance.
I think they're clearly, you know, weighing that balance.
And at the moment, We've got a shelter in place.
But I agree.
I think the president will try to lead us out of this and make sure that people do get out of their homes and overcome the natural fear.
It's been a scary thing.
But you're right.
It's going to take a real effort, I think, to get people back.
So we get another book out of this?
I wasn't planning on it, but maybe.
Maybe a few months out where you can take a look at some of the things we're predicting are probably going to work out differently.
They always do.
It'd be interesting to see how this all works out.
Absolutely.
But I think that people... Look, we've come out of things like this before.
It seems like the worst thing ever, but our society, our people have been through things that are horrendous before, and we come through it stronger.
I'm very hopeful we will, but we just can't depend on that.
We have to work at it, and you're helping a great deal, Norm, with your analysis of the economy, and particularly the way you make it relevant for the regular guy, you know, who's got to make a choice between, do I take the money out of the 401k, do I take it out of the bank, or do I borrow?
That's really important, and thank you very much.
And stay healthy, and we'll be checking with you regularly, all right, if you don't mind.
Absolutely.
Thanks so much for having me.
Thank you, Long.
And good luck to you and your family.
Take care.
Same to you, sir.
Well, that was a very interesting interview with Norm.
I think it was very helpful.
I think both interviews, the one with Charlie Kirk and the one with Norm, had both a great deal of practical advice that you and I can use.
I intend to use both, by the way, with my business and with my personal finances.
And I think it had a great deal of macroeconomic sense to it about In the case of Charlie, how the emphasis should be on retaining independence for people, not using this to build dependence, which was the knee-jerk democratic reactions to these kinds of things.
You know, you think of the New Deal, and the New Deal, I believe, was necessary for the time, and I also believe they probably couldn't think their way to a better solution, because they were in such a crisis, and economic thinking hadn't advanced to that point.
However, it has now, and we see the good things that the New Deal did, and then we see the bad things it did with the Great Society and all the people on welfare, creating a dependency society.
And an intelligent society doesn't make the same mistake twice, when you have an intelligent president.
And we're very lucky to have a president that's a businessman, because I don't think a president that wasn't a businessman would have thought of How do I keep the jobs going for my people?
This is a man who ran a construction business.
And if he were going through something like this, and he had no money to pay them, he wouldn't want to lose his good employees.
And not only that, you got to know something about President Trump, because I've known him for 29, 30 years.
This is a man dedicated to his employees.
This is a man who Gets the results he gets.
He gets things done in less time than anybody else because those people work above and beyond the call of duty for him.
Because he takes care of them.
He goes and talks to them.
He gives them extra money.
He worries about their families.
That brain figured out, let's see if we can keep the core of these businesses together.
Maybe it'll just be a month or two or three.
If they keep the core of the business together, And rest of the economy comes back.
They can just plug right back into the pharmacy they were before, or the toy store they were before, or the supermarket that isn't working right now, or the many restaurants.
They come right back.
I think in the case of Norm, his advice on how you make a trade-off between a 401k and savings and borrowing If you can, this is the time to borrow.
I mean, interest rates low, inflation possible when you have to pay it back, a lot of areas of forgiveness and extension.
They can get you to a time to pay back when it's the most advantageous.
So I take advice from these men, and when you listen to these programs, try to extract the practical advice that comes along with the macroeconomic advice so it can be useful to you.
So I hope you're bearing up.
I know we're in the month of April now, and this is the month that President Trump has predicted.
I think not only just President Trump, but many others.
We're going to see some horrendous, horrible number of deaths.
I think we have to prepare ourselves for it.
I think we have to prepare ourselves for it in any way that we do.
For those of you that are religious or spiritual, then I think this is the time for prayer and for reflection and meditation.
For those of you who aren't, you've got to think about the fact that America has been through horrendous things in the past.
A revolution, a civil war, a Spanish flu, a world war, communism, Islamic extremist terrorist attack that took us by shock.
We always came out stronger.
We'll come out stronger from this.
With our hearts broken, but with a much stronger spirit.
Our hearts will be broken for the people that we lost.
My heart is still broken for the people we lost on September 11.
I'll never get over it.
I went down there the other day to take a look at how it was doing, and I saw the spot where I last saw Pete Gansey, and I just about cried.
And here it is, 20 years later.
But I'm functioning, and I'm functioning at a higher level, and my city has twice as many people down there as before, We're going to do the same thing.
Please trust me.
I've been through this.
Some of you are too young to have been through it.
I've been through it.
You can get through it.
And when we get through it, we're going to be stronger as a result of it.
Pray to God that that's what happens because he's guiding it all.
Thank you very much.
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