WHICH IS LIKELY WHAT WE WILL SEE
>> LET’S BRING INFORMANT MEGAN
ECONOMIST AND THE AUTHOR OF
TAXES HAVE CONSEQUENCES.
ART, GOOD TO SEE YOU AGAIN.
WHAT DO YOU THINK OF IT.
>> IT WAS A NICE REPORT.
THE HUNDRED PLUS THOUSAND JOBS,
NEW JOBS, WHICH WAS A GOOD
NUMBER.
REVISING THE LAST FEW DOWN
110,000.
THAT SORT OF OFF SETS IT.
THE ONE THING I FOUND
COMFORTING, IF I MAY SAY,
LOOKING AT THE HOUSEHOLD JOBS
WHICH ARE TWO SEPARATE SURVEYS
BY SEPARATE GROUPS, THEY WERE
DIVERGING VERY FAR APART.
NOW THEY ARE COMING BACK
TOGETHER.
USE ALL THE POP AND THE
PARTICIPATION RATE.
THOSE TWO NUMBERS ARE COMING
BACK IN ACCORDANCE.
STARTING TO GET A CORRECT
PICTURE OF THE LABOR MARKET.
ONE CORRECTION THAT SHOULD BE
MADE FROM THE PREVIOUS
ANNOUNCEMENT IS YOU ARE LOOKING
AT INFLATION OVER A FULL YEAR.
THIS MONTH’S GROWTH IN WAGES IS
WAY HIGHER THAN THE INFLATION
HAS BEEN.
THIS GROWTH WAS, I DON’T KNOW
WHAT IT WAS, 5% OR SOMETHING.
REAL WAGES IN THIS REPORT SHOWED
REAL SIGNS OF INCREASING WHICH
IS A GOOD SIGN.
>> 5.2% ON AVERAGE HOURLY
EARNINGS.
TO YOUR POINT, A CORRECTION FOR
JUNE OR JULY.
107,000 YOU ARE JOBS IN
PREVIOUSLY REPORTED.
THE LABOR PARTICIPATION RATE IS
INCREASING.
IT HAS BEEN AN INTERESTING
PHENOMENON FOR ME.
STRESS ON THE AMERICAN FAMILY.
THE PARTICIPATION RATE HAS
REMAINED LOW.
I THINK IT’S A POSITIVE SIGN WE
SEE THAT TAKING UP RIGHT NOW.
>> THE REASON WHY THAT WAS
HAPPENING, SEAN, TWO SEPARATE
SURVEYS BEING DONE
SIMULTANEOUSLY AND THEY MIX THE
TWO TOGETHER AND SOMETIMES A ONE
NUMBER DOES NOT MATCH THE OTHER
NUMBER.
FOR EXAMPLE, THE HOUSEHOLD
SURVEY, WE HAVE HAD BIG DROPS IN
THE NUMBER OF PEOPLE EMPLOYED.
VERY NICE GROWTH IN THE
ESTABLISHMENT.
THE HUGE DROPS IN THE HOUSEHOLD
MEANT THAT THE UNEMPLOYMENT
DROPPED AND ALSO PARTICIPATION
RATE DROPPED.
YOU HAVE TO RISE WHICH CAUSE A
PARTICIPATION RATE TO CAUSE UP
20 BASIS POINTS AND THEN YOU
HAVE THE UNEMPLOYMENT NUMBER GO
UP WHICH IS ALSO MORE PEOPLE IN
THE SURVEY THEY’RE LOOKING FOR
WORK WHICH IS EXACTLY WHAT YOU
WOULD EXPECT IF THOSE TWO SERIES
COME BACK TOGETHER.
THIS IS A MUCH MORE REASONABLE
NUMBER THAN LAST MONTHS.
WE HAVE A NICE JOB MARKET.
NOW WE HAVE TO SEE WHAT HAPPENS
TO INFLATION AND AS WE GO
FORWARD.
>> DOES THIS REPORT INSTRUCT THE
FED AT ALL?
WHAT ARE THEY GOING TO DEAL.
WILL THEY TAMPER?
WHERE DO YOU SEE IT GOING?
>> THEY WILL CONTINUE THEIR RATE
RISING.
THEY SHOULD STOP PRICE CONTROLS
AND LET THE RATES GO TO WHERE
THEY MAY BE.
UNDER VOELKER IN 1979, 80, 81,
THE 10 YEAR BOND YIELD, THEY
SHOULD JUST LET THAT RATE GO.
NO ONE WOULD BUY A 10 YEAR BOND
AT 3.2%.
IT IS JUST NOT SOMETHING THAT
THEY DO.
THE FED IS TRYING TO CONTROL THE
INTEREST RATE DOWN.
THAT IS THE WRONG THING TO DO.
IF THEY LET IT GO THEY CAN
CONTROL INFLATION MUCH EASIER.
MUCH LOWER INFLATION IF THEY
WANTED TO.
A GOOD ECONOMY AND LOWER
INFLATION.
>> WE HAVE THE FED WORKING ON
DEMAND DESTRUCTION.
WORKING ON SUPPLY.
LOWER TAXES AND LOWER REGULATION
ARE THERE ECONOMIST IN THE WHITE
HOUSE TALKING TO BIDEN THAT SAY
WHAT WE ARE DOING IS HORRIBLE TO
THE ECONOMY.
TAKE THE DONALD TRUMP RONALD
REAGAN PLAYBOOK.
>> THEY PROBABLY DO NOT HAVE PHD
’S, ADVISING BIDEN.
YOU NEED CENTRAL BANKERS, PEOPLE
IN BUSINESS, PEOPLE THAT
UNDERSTAND THAT THE INCREASE IN
THE SUPPLY OF A PRODUCT WILL
BRING THE PRICE DOWN.
THAT IS EXACTLY COMMON SENSE.
THE ECONOMISTS HAVE BEEN TRAINED
THAT IT IS BY CRUSHING DEMAND.
THE OTHER PROFESSORS OF
ECONOMICS SAY YOU CAN BRING
INFLATION DOWN.
MAKING IT MORE ATTRACTIVE.
WE HAD PAUL VOELKER RUNNING
INTEREST RATES RISING TO WHERE
THEY SHOULD BE SO MONEY WAS
TIGHT AND THEN YOU CUT TAX RATES
INCREASING OUTPUT.
YOU SHOULD’VE SEEN HOW THE
INFLATION RATE DROPPED.
IT DROPPED LIKE A STONE RIGHT
OFF THE EDGE OF A CLIFF.
THE MOST MIRACULOUS RETURN TO
PRICE STABILITY YOU HAVE EVER
SEEN WITH A COMBINATION AND THEY
REDID THE JOB.
THIS IS NOT MY PREFERRED WAY OF
DOING IT.
ULTIMATELY THEY WILL DESTROY
ENOUGH DEMAND IF THEY CRUSH THE
DEMAND ENOUGH THEY WILL BRING
INFLATION DOWN, BUT IT WILL BE A
VERY HIGH COST.
IT IS MORE BENEFITS, NOT HIGHER
COSTS.
>> I LOOK AT WASHINGTON, D.C.
AND I GO THIS IS CRAZY TOWN FOR
SURE.
YOU HAVE TO FED TRYING TO DEAL
WITH INFLATION BY RAISING RATES.
THEN YOU AT THE CONGRESS AND JOE
BIDEN FUELING THE FLAMES OF
INFLATION BY SPENDING MASSIVE
AMOUNTS OF INFLATION.
YOU ARE PULLING IN DIFFERENT
DIRECTIONS.
IT DOES NOT MAKE SENSE.
THEY ARE AN INFLATION RATE
PROBLEM.
LET’S WORK TOGETHER.
CUT SPENDING.
THEY ARE GOING TO GO IN
DIFFERENT DIRECTIONS HERE.
>> YOU ARE RIGHT.
SHOULD THE FED BE INDEPENDENT
FROM THE CENTRAL GOVERNMENT?
MY VIEW IS IT SHOULD NOT BE.
CONGRESS PASSING A LAW THAT MADE
THE FED INDEPENDENT.
THEY SHOULD BE RESPONSIBLE FOR
THE ECONOMY, FISCAL POLICY, THE
TREASURY, CLEARING ALL THE
DEPARTMENTS AND AGENCIES, ALL OF
THAT SHOULD BE UNDER THE
PRESIDENT CONTROL AND THEY
SHOULD DO A COORDINATED POLICY.
IF THEY DID THAT WE COULD HOLD
THEM RESPONSIBLE.
LET’S IMAGINE THE DEPARTMENT OF
COMMERCE WAS INDEPENDENT.
LET’S IMAGINE TRADE WAS
INDEPENDENT.
A MIX UP OF NOTHING BEING
COORDINATED.
THE FEDS SHOULD BE UNDER THE
CONTROL OF THE PRESIDENT OF THE
UNITED STATES AS WELL.
>> THEN JOE BIDEN WOULD KEEP
RATES REALLY LOW AND SPEND A LOT
OF MONEY.
WE WOULD HAVE A WILD INFLATION.
>> YOU CANNOT HAVE YOUR CAKE AND
EAT IT TOO.
[LAUGHTER]
GET THEM TO WORK TOGETHER OR
POSSIBLY TO WORK EVERY WHICH WAY
WRONG.
JIMMY CARTER, WE HAD SOME OTHER
CLASSICS.
UNFORTUNATELY, I THINK BIDEN HAS
NOT DONE A GOOD JOB ON PHYSICAL
POLICY.
I DON’T THINK THEY’VE DONE A