MOST PEOPLE THINK.
>> LEADER McCONNELL IS STANDING
BY.
FIRST, GENE SPERLING.
GOOD TO HAVE YOU WITH USED TOO.
THE QUESTION THAT COMES UP AGAIN
AND AGAIN IS THAT THE MESSAGES
THAT WE RECEIVED FROM ALL LEFT
FIELDS OF THE WHITE HOUSE AND
TREASURY HAVE BEEN WRONG.
SO HOW DID YOU GET THIS SO
WRONG?
>> WELL, MARTHA, THE WHITE HOUSE
AND THE TREASURY DEPARTMENT WERE
SAYING LAST YEAR AND I CAN’T
STRESS THIS ENOUGH, REFLECTED
THE OVERWHELMING ECONOMIC
CONSENSUS IN THE PRIVATE SECTOR,
IN THE U.S. AND OTHER PLACES
AROUND THE WORLD.
IT WASN’T SO MUCH -- IT WASN’T
THE PEOPLE WERE WRONG WITH THE
FACTS THAT THEY HAD.
IT’S THAT THINGS HAPPENED AFTER
THAT THAT AFFECTED THE OUTCOME.
SO WE HAD NOT JUST DELTA, BUT
OMICRON.
WE HAD GAS PRICES AT $3.31
JANUARY 17 WHEN PUTIN FIRST
STARTED DOING MILITARY
EXERCISES.
>> Neil: UNDERSTOOD.
WITH ALL DUE RESPECT, LET’S PUT
THIS GRAPH UP.
WHILE THIS WAS HAPPENING,
WOULDN’T IT HAVE BEEN WISE AT
THIS POINT TO SHIFT YOUR
STRATEGY BECAUSE THIS IS A
REALLY PRETTY CLEAR CHART AT
WHERE THINGS WERE GOING.
WITH ALL DUE RESPECT AGAIN, YOU
GUYS ARE THE FOLKS THAT ARE
ELECTED AND APPOINTED TO THESE
POSITIONS.
YOU’RE SUPPOSED TO BE THE BEST
FIGURING OUT WHAT’S COMING
AROUND THE BEND.
>> WHAT YOU SAW IS THAT WHEN
DELTA HIT, A LOT OF THE
DIFFERENT THINGS THAT WE WERE
HOPING AND NOT JUST US, BUT
LITERALLY EVERY MAJOR FORECASTER
IN THE WORLD WAS PREDICTING THAT
THE SUPPLY CONSTRAINTS WOULD
EASE UP.
WE ALL SAW WHAT HAPPENED AFTER
THAT.
WE SAW LOCKDOWNS FROM CHINA, WE
SAW SEMI CONDUCTOR CONSTRAINTS
HAPPEN.
AND THOSE ENDED UP MEANING THAT
THE SUPPLY CONSTRAINTS THAT
AFFECTED COSTS OF INFLATION
EFFECTIVE -- EXCUSE ME.
THEN YOU GOT HIT WITH WHAT IS
DRIVING THE PRICES A LOT TODAY,
WHICH ARE HIGHER ENERGY PRICES.
NOW, JUST REMEMBER, GLOBAL
INFLATION RIGHT NOW IN THE 38
MAJOR COUNTRIES IS 9.6%.
IT IS 9% IN THE U.K.
THIS IS A GLOBAL PHENOMENON.
IT HAS HAPPENED WITH UNEXPECTED
AFTER SHOCKS FROM THE PANDEMIC.
>> Martha: LET ME, IF I MAY, GET
A QUESTION IN HERE.
I UNDERSTAND WHAT YOU’RE SAYING.
SO MY QUESTION TO YOU IS, WHEN
YOU SAW THAT WAS HAPPENING,
RIGHT?
DELTA STARTS TO HIT.
WE HAVE A COUPLE OF TRILLION
DOLLARS IN STIMULUS THAT HAS
JUST GONE IN.
WE’RE SEEING AN INCREASE IN
DEMAND BASED ON THAT.
YOU CAN SEE THE SUPPLY CHAINS
DRY UP.
WHY DIDN’T THAT SET OFF
INFLATION ALARM BELLS AND SAY WE
HAVE TO PULL BACK ON THE
STIMULUS AND START TO INCREASE
INTEREST RATES HERE THAT MESSAGE
COULD HAVE COME FROM THE FED.
SO YOU HAD A LOT OF WARNING WITH
THE THINGS WE’RE TALKING ABOUT.
WE’RE TOLD OH, IT’S GOING TO BE
OVER BY THE END OF THE YEAR OR A
COUPLE MONTHS.
NONE OF THAT WAS TRUE BASED ON
ALL THE THINGS THAT WE COULD
SEE.
>> NO, ACTUALLY THAT’S NOT
RIGHT.
I’LL TELL YOU AGAIN THAT IN
JUNE, JULY, PEOPLE DID NOT SEE
THE I’LL PACT OF DELTA.
THEY DID NOT SEE THE IMPACT OF
OMICRON.
THEY DID NOT SEE THE IMPACT OR
THE -- THERE WOULD BE THIS TYPE
OF UNTHINKABLE WAR.
AS THAT HAPPENED, EVERYBODY IN
THE WORLD HAS HAD TO DEAL WITH
THIS.
AND THE UNITED STATES, IF YOU
WERE PAYING ATTENTION, PRESIDENT
BIDEN WAS ON IT FAST WITH A
SUPPLY CHAIN TASK FORCE.
YOU REMEMBER ALL THE ISSUES
ABOUT THE STOCKS NOT -- WOULD
SHELVES BE BARE FOR CHRISTMAS,
ALL THE WORK IN THE PORTS AND
THE SUPPLY CHAINS AND WHAT YOU
HAD SEEN IS THAT THE DEFICIT HAS
COME DOWN $1.7 TRILLION.
>> Martha: THAT DOESN’T MAKE
PEOPLE FEEL BETTER.
YOU HAVE A 70% DISAPPROVAL ON
THE HANDLEING OF THE ECONOMY.
YOU’RE TELLING ME --
>> YOU KNOW WHAT I’M TRYING TO
DO?
I’M TRYING TO ANSWER THE VERY
QUESTION THAT YOU ASKED.
YOU ASKED ABOUT DID YOU PULL
BACK ON SPENDING.
I’M SORRY.
THAT’S A QUESTION THAT YOU ASKED
ME.
I SAID WE HAD A PLAN OF WHICH
1.7 TRILLION DEFICIT WENT DOWN.
SOME OF THAT WAS THE SURGE OF
REVENUES FROM STRONGER GROWTH
AND MOST OF IT WAS LESS
SPENDING.
THAT’S THE ISSUE THAT YOU
RAISED.
I WANT TO RAISE WHAT HAS
HAPPENED THIS YEAR.
>> Martha: A LOT --
>> 1.7 TRILLION DEFICIT
REDUCTION.
>> Martha: LET’S TALK ABOUT WHAT
HAPPENS NOW.
NOW THERE’S DISCUSSION ABOUT
MORE SPENDING THROUGH A NEW
VERSION OF BBB AND PERHAPS TAX
INCREASES ON SOMETHING THAT
WOULD IMPACT A TRILLION TO 1.3
TRILLION THAT WOULD HIT SMALL
BUSINESSES AROUND THE COUNTRY.
IS THAT WHAT YOU’RE SUPPORTING?
I’M GOING TO TALK TO MITCH
McCONNELL IN A MOMENT.
I’D LIKE TO KNOW WHAT YOU’D SAY
TO HIM ABOUT THIS.
WHY DO YOU THINK THAT THAT IS A
GOOD IDEA, TO PUT TAX -- TO
RAISE TAXES ON BUSINESSES THIS
COUNTRY AT THIS FRAGILE MOMENT
IN THE ECONOMY?
>> WELL, THE RIGHT DESCRIPTION
OF THIS IS YOU’RE TAKING SEVERAL
EFFORTS THAT WOULD REDUCE PRICES
FOR PEOPLE.
WE’RE TALKING UTILITY PREMIUMS.
WE COULD HAVE A FEDERAL GAS TAX
HOLIDAY THAT COULD LOWER PRICES
BY 18 CENTS A BARREL.
THESE ARE THINGS THAT WE DO.
YOU HAVE TAXES ON THE VERY MOST
WELL-OFF CORPORATIONS AND
BILLIONAIRES AND PEOPLE WITH
OVER 100 MILLION.
THAT IS TO MAKE SURE THAT YOU’RE
GIVING THIS RELIEF TO AMERICANS
IN A WAY THAT IS NOT
INFLATIONARY.
WHAT I’D SAY TO LEADER McCONNELL
WHO I HAVE WORKED WITH BEFORE,
IS THAT I THINK WHEN WE WORK
TOGETHER, WE CAN DO SOME
POSITIVE THINGS.
ONE EXAMPLE IS IN THE BIPARTISAN
INFRASTRUCTURE DEAL, WE WERE
ABLE TO GIVE RELIEF TO
INTERNET -- FOR INTERNET.
NOW A LOT OF PEOPLE ARE GETTING
NEARLY FREE INTERNET.
THAT IS WHERE WE WORK TOGETHER
AND LOWERS PRICES AND COSTS FOR
AMERICAN FAMILIES.
WE CAN SOLVE THIS IF WE WORK ON
THINGS LIKE PRESCRIPTION DRUGS,
UTILITY AND ENERGY COSTS --
>> Martha: LET ME ASK YOU THIS.
WHEN YOU -- A NUMBER OF THE
THINGS YOU NAMED TO BE FAIR, I
UNDERSTAND THAT THAT IS YOUR
PERSPECTIVE.
YOU KNOW THERE’S PEOPLE ON THE
OTHER SIDE OF THE EQUATION THAT
SAY YOU START ADD GAS TAX
HOLIDAY AND YOU’RE GOING TO
STIMULATE DEMAND MORE AND THEY
BELIEVE THAT THAT WILL KEEP US
IN THIS SITUATION FOR A WHILE.
LET ME ASK YOU THIS QUESTION.
DO YOU BELIEVE THAT INFLATION
HAS PEAKED?
DO YOU BELIEVE THAT WE’RE GOING
TO SEE A NUMBER IN THIS SECOND
QUARTER THAT IS GOING TO PUT US
INTO AN ACTUAL TECHNICAL
DEFINITION RECESSION?
>> SO IN TERMS OF INFLATION, I’M
GLAD YOU RAISED THIS.
THE ONE THING THESE CURRENT
INFLATION NUMBERS DON’T FULLY
ACCOUNT FOR IS HOW MUCH GAS
PRICES HAVE ALREADY DROPPED.
THEY’RE NOW DOWN 42, 43 CENTS.
THAT IS NOT FULLY REFLECTED IN
THE INFLATION PRICES --
>> Martha: ARE THEY GOING TO
KEEP GOING IN THAT DIRECTION?
>> I SURE HOPE SO.
IT’S HARD TO MAKE FORECASTS.
BUT WE’RE DOING -- THE PRESIDENT
IS STILL DOING THE STRATEGIC
PETROLEUM RESUM RELEASE OF A
MILLION A DAY.
HE’S ENCOURAGING 60 MILLION MORE
FROM OUR PEERS, PUSHING
REFINERIES TO OPEN UP MORE
REFINERY CAPACITY, PUSHING MAJOR
GAS COMPANIES TO MAKE SURE THAT
WHEN OIL PRICES ARE DOWN, THAT
IS REFLECTED IN THE PUMP.
AGAIN, HE’S CALLED FOR A FEDERAL
AND A STATE GAS TAX HOLIDAY.
ALL OF THOSE THINGS COULD MAKE A
VERY BIG IMPRESSION.
WE ALREADY HAVE 10,000 GAS
STATIONS RIGHT NOW UNDER $4 --
>> Martha: WE’RE SEEING A LOT OF
THE CORE PRICES ON RENT AND FOOD
AND THINGS OUTSIDE OF ENERGY ARE
PUTTING ON PEOPLE’S
DISCRETIONARY INCOME.
THAT IS A PROBLEM.
DO YOU BELIEVE THAT WE HAVE
PEAKED AND THINGS ARE STARTING
TO IMPROVE AND WE’RE NOT GOING
TO BE IN A RECESSION?
CAN YOU JUST ANSWER THAT FOR ME
BRIEFLY, IF YOU COULD, SIR?
>> I BELIEVE THE FACT THAT WE’VE
HAD A MILLION JOBS CREATED OVER
THE LAST THREE MONTHS AND
372,000 JOBS CREATED WITH THIS
MONTH.
IT’S NOT CONSISTENT WITH WHAT
ONE THINKS OF WHEN YOU THINK OF
A DOWNTURN.
A MILLION JOBS OVER THE LAST
THREE QUARTERS SHOW AS STRONG
JOB MARKET.
THERE’S LOTS OF SIGNS, LIKE WE
SAID, THE GAS PRICES ARE COMING
DOWN.
THAT IS WHAT WE HOPE.
THAT SEEMS LIKE A REASONABLE
THING TO PROJECT.
AGAIN, IT’S A VERY UNCERTAIN
WORLD.
IT’S VERY HARD TO MAKE FIRM
PREDICTIONS.
FOR ME OR FOR ANYONE.
>> Martha: THOSE ARE THE HOPES
RIGHT NOW.
WE CERTAINLY HOPE THAT THAT
TURNS OUT TO BE A STRATEGY THAT
WORKS.
GENE SPERLING, THANKS VERY MUCH.
SERIOUS TIMES AND A LOT OF
PRESSURES ON EVERYBODY.