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LARRY: THE BIDEN ADMINISTRATION
CAN’T GET ANYTHING RIGHT.
COUPLE DAYS AGO THEY WARNED OF A
DROP IN JOBS AND IT TURNED OUT
TO BE ON THE UP SIDE.
467,000 FOR THE MONTH OF
JANUARY.
THE CONSENSUS WAS PLUS 150.
ACTUALLY THE LEVEL OF JOBS IN
JAN ROSE ... 1.4 MILLION ABOVE
THE REPORTED LEVEL IT WAS A
BLOWOUT.
IT LOOKS LIKE PEOPLE WHO WORKED
FEWER HOURS BECAUSE OF OMICRON
DIDN’T LOSE THEIR PAY, IT LOOKS
LIKE.
AVERAGE HOURLY EARNING INCREASED
8.4% AT AN ANNUAL RATE THE PAST
3 MONTHS.
AND I DON’T BLAME THE WORKFORCE FOR WANTING HIGHER WAGES.
FOR WANTING HIGHER WAGES.
A LOT OF KEYNESIANS AND ROOT CANAL CONSERVATIVES I CALL THEM.
CANAL CONSERVATIVES I CALL THEM.
THEY ONLY BLAME WAGES AND
WORKERS.
WE ARE IN AN INFLATIONARY BOOM
AND WE NEED SOME ADVICE.
THE BEST IN THE ADVICE-GIVING
BUSINESS IN HISTORY IS MY DEAR
FRIEND ARTHUR LAFFER WHO IS A
RECIPIENT OF THE PRESIDENTIAL
MEDAL OF FREEDOM.
TODAY WAS -- TELL ME -- I SEE
THIS AS AN INFLATIONARY BLOWOUT.
IT WILL PUT A LOT OF PRESSURE ON
THE FED, ONE CAN ONLY HOPE
GOVERNMENT WOULD STOP SPENDING.
THESE THINGS MOSTLY ALWAYS DON’T
END WELL.
THAT’S WHAT I’M ASKING YOU.
>> I’M NOT EXPECT IT TO END WELL
EITHER.
YOU ARE THE EXPERT I WOULD HAVE
COME TO TO SHOW THIS NUMBER.
IT LOOKS LIKE ESTABLISHMENT
HOUSEHOLD PROBLEMS WITH THESE
NUMBERS AND THE REVISIONS GOING
BACK, I’M NOT SURE WHAT THEY
ARE.
BUT IT’S CLEAR WE ARE GETTING A
LITTLE BOOST OF THE
PARTICIPATION RATE.
WAGES ARE PICKING UP AS YOU SAY.
THEY ARE STILL NOT GETTING
CAUGHT UP WITH INFLATION.
AND AVERAGE HOURS ARE FALLING AS
WELL.
ALL OF WHICH IN THIS REPORT
TELLS ME WE NEED TO WAIT TO LOOK
AT A LONGER PERIOD.
I BELIEVE YOU ARE CORRECT, THIS
WILL NOT END UP WELL.
THE FEDS PRINTING OF MONEY IS
WAY TOO LARGE, WAY TOO
ACCOMMODATIVE AND THE DEFICITS
ARE HUGE.
THE STIMULUS COMING FROM FISCAL
POLICY DEFICITS IS OFFSET BY THE
LAGS EFFECT THAT WILL REDUCE
FUTURE GDP GROWTH.
I’M NOT LOOKING FOR AN EXCITING
LONG-TERM FUTURE FOR THIS
ADMINISTRATION OR THE ECONOMY
THE NEXT 2 YEARS.
>> IF YOU ARE SITTING ON THE
FED.
NOW DAYS ALL THE NOMINEES ARE
FOR CLIMATE CHANGE AND WOKE AND
SLAVERY REPAYMENTS.
IN THE DAYS WHEN PEOPLE SAT ON
THE FED, YOU WOULD LOOK AT THESE
NUMBERS, THE ONE FROM MICHIGAN
STATE WANTS REPARATIONS FOR
SLAVERY.
SHE IS GOING TO SIT ON THE FED.
THIS KIND OF NUMBER IS GOING TO
PUT A LOT OF PRESSURE ON THE FED
TO -- I CALL IT TAKE AWAY THE
PUNCH BOWL.
WITHDRAW RESERVES, STOP PRINTING
GOVERNMENT BONDS AND TAKE AWAY
THE MONEY SUPPLY.
END QUANTITATIVE EASING AND GO
TO QUANTITATIVE TIGHTENING.
>> I DON’T SEE THOSE POLICIES AS
HAVING HAVE MUCH IMPACT.
IF THEY RAISE IT BY 50 BASIS
POINTS.
REAL INTEREST RATES TODAY ARE
NEGATIVE, MAYBE 5% NEGATIVE.
THE 10-YEAR BOND IS 1.9.
YOU ARE PAYING THE GOVERNMENT TO
LEND MONEY TO THEM.
IN 1981 WHEN PAUL VOLCKER
BROUGHT THIS UNDER CONTROL, THE
PRIME INTEREST RATE WAS 21.5%.
WAY ABOVE INFLATION.
THE REAL INTEREST RATE WAS 7,
8%.
IF WE HAD A REAL 10-YEAR BOND
YIELD OF 4 OR 5 PERCENT.
WE WOULD HAVE A 10-YEAR BOND
YIELD OF 11 PERCENT IN NOMINAL
TERMS.
I THINK THEY SHOULD STOP
INTEREST SNREENGT CAPITAL
MARKETS.
STOP BYING FEDERAL DEFICITS.
AND SMA RING THAT BALANCE
SHEET.
NOT WORRY ABOUT INTEREST RATES.
LET MARKETS CONTROL INTEREST
RATES.
LARRY: I LIKE THE IDEA OF GOING
BACK TO CONTROLLING WHAT WE USED
TO CALL THE MONETARY BASE AND
LET INTEREST RATES BE WHAT THEY
MAY.
WE DON’T KNOW WHAT THE RIGHT
INTEREST RATE IS.
YOU ARE RUNNING A 5% -- I THINK IT WAS%.
IT WAS%.
THE BASIC -- I THINK IT WAS 6%.
>> 4%.
LARRY: THE MARKET HAS TO RESET
THAT RATE.
THE FED DOESN’T KNOW.
ONLY THE MARKET KNOWS.
YOU LOOK AT THE FED MEMBERS, YOU
ARE SURE THEY DON’T KNOW NO
MATTER WHAT THE FACTS ARE.
I AGREE ON THE WAGES AND JOBS
REPORT.
ALL OF US WANT TO SEE WAGES GO
UP.
BUT I WOULD LIKE TO SEE RAILWAY
GO UP.
WHAT YOU SAW ON THE JOBS REPORT,
5.7% ON THE WAGES.
THAT’S NOT ENOUGH TO HAVE THE
REAL WAGES GOING UP.
GOODNESS KNOWS WHAT IT WILL BE
NEXT TIME TOIL PRICES ARE AT
ALL-TIME HIGHS.
IF YOU LOOK AT PRODUCER PRICE
INDEX.
THEY ARE HIGHER THAN THE CPI.
SO YOU HAVE GOT A LOT OF
PRESSURE AND THEY ARE DOING
NOTHING TO STOP IT, NOTHING.
LARRY: I’M TRYING TO MAKE THE
POINT.
DON’T BLAME THE WORKFORCE.
DON’T BLAME UNIONS OR BLUE
COLLAR WORKERS FOR THE EXCESS
SPENDING BY UNCLE SAM AND MONEY
PRINTING BY THE FEDERAL RESERVE
HOSPITAL NEW MEMBERS ARE WORRIED
MORE ABOUT SLAVERY REPARATIONS
AND SOCIAL POLICY THAN THEY ARE
ABOUT THE WELL-BEING OF THE
COUNTRY.
OUR FRIENDS, A LOT OF THE
KEYNESIANS AND ROOT CANAL
CONSERVATIVES SAY WAGES ARE
RISING.
IF YOU SAY INFLATION IS BEATING
WAGES AND REAL WAGES ARE
FALLING.
I WANTED TO MAKE THAT ANALYTIC
SOCIAL, NOBEL PRIZE POINT.
I JUST WANTED TO GET THAT IN.
>> NEVER BLAME WORKERS.
NEVER.
LARRY: IN THE JACK KEMP DAYS YOU
AND JACK WOULD MAKE THESE
POINTS.
QUIT BLAMING THE WORKFORCE.
THEY ARE GOING TO SPEND ANOTHER
$350 BILLION SO WE CAN OUT-CHINA
CHINA.
PICK WINNERS AND LOSERS AND
SUBSIDIZE THIS AND SUBSIDIZE
THAT.
IF YOU WANT TO MAKE AMERICA
COMPETITIVE, INSTEAD OF MORE AND
MORE SPENDING, DON’T PAY FOR
ANYTHING.
WHY DON’T WE MAKE THE TRUMP TAX
CUTS PERMANENT.
KINDS OF LIKE MY LATEST MANTRA.
ARE YOU IN FAVOR OF MAKING THE
TRUMP TAX CUTS PERMANENT?
>> I WOULD LIKE SIT TO BE THE
NEXT CONGRESS WHEN WE TAKE OVER
CONGRESS, AND IN 2024 WHEN WE
TAKE OVER THE PRESIDENCY.
MAKE THE TAX CUTS PERMANENT AND
STOP THE SPENDING.
LARRY: REPUBLICANS VOTED FOR
THIS GOOFY CHINA BILL.
REPUBLICANS.
>> $1,000 PER MAN, WOMAN AND
CHILD.
THAT’S RIDICULOUS.
THAT’S A LOT OF MONEY.
>> IT’S NOT GOING TO DO A LOT OF
GOOD.
MORE DEBT, MORE SPENDING.
ALL RIGHT, ART LAFFER.
HAVE A GREAT WEEKEND.
WE’LL VISIT MORE ON THIS.
BUT I DON’T THINK TAKING THE
PUNCH BOWL AWAY WILL BE EASY.