REPORTS EARNINGS NEXT WEEK.
WHITE HOUSE PRESS SECOND KARINE
JEAN-PIERRE TAKING TO TWITTER
YESTERDAY TO BRAG ABOUT THE
DECLINE IN GASOLINE PRICES.
WATCH.
>> HEY, EVERYBODY.
SO GAS PRICES HAVE BEEN
DECLINING ACROSS THE COUNTRY.
IN THE PAST MORE THAN 30 DAYS,
WE HAVE SEEN GAS PRICES GO DOWN
BY MORE THAN 50-CENTS PER
GALLON.
SO LET’S GET INTO SOME GRAPHS.
THIS IS SO EXCITING, GUYS.
I’M IN THE GRAPH.
MARIA: SHE ALSO WENT AFTER OIL
REFINERIES, SHE SAID THEY WERE
MAKING PROFITS ALL THE WHILE SHE
LEAVES OUT THAT GAS PRICES ARE
STILL $2 HIGHER THAN WHEN JOE
BIDEN WALKED INTO THE OVAL
OFFICE.
IN FACT, PRICES ARE UP 40 PLUS
PERCENT YEAR OVER YEAR.
JOINING ME RIGHT NOW IS FORMER
WHITE HOUSE CHIEF OF STAFF AND
FORMER OMB DIRECTOR, MICK
MULVANEY.
GREAT TO SEE YOU.
THANKS VERY MUCH FOR BEING HERE.
IT’S INTERESTING TO SEE HER
CELEBRATE THE DECLINE IN
GASOLINE PRICES.
IT’S RISKY MOVE BECAUSE MARKETS
GO IN BOTH DIRECTIONS.
WHAT’S YOUR TAKE.
>> THEY DO.
WE’RE ALL GLAD PRICES ARE COMING
DOWN A LITTLE BIT.
THERE’S ONLY TWO WAYS THAT COULD
HAPPEN, EITHER THE SUPPLY OF
GASOLINE IS GOING UP OR THE
DEMAND FOR GASOLINE IS GOING
DOWN.
THAT’S HOW PRICES GET
ESTABLISHED IN A FREE MARKET AND
I THINK EVERYBODY KNOWS THE
SUPPLY OF GASOLINE UNDER THIS
BIDEN ADMINISTRATION IS NOT
GOING UP.
IN FACT, WE’VE LOST ALMOST
1 MILLION GALLONS A DAY OF
REFINING ABILITY IN THE COUNTRY
OVER THE COURSE OF THE LAST TWO
YEARS.
THE SUPPLIES ARE STILL GOING
DOWN.
SO WHAT DOES THAT MEAN ABOUT
DEMAND?
IT MEANS THE ONLY REASON THAT
PRICES CAN GO DOWN IS THAT
PEOPLE ARE DEMANDING LESS
BECAUSE WE’RE MOVING INTO A
RECESSION.
PEOPLE HAVE LESS MONEY TO SPEND
ON GASOLINE SO THEY’RE NOT -- SO
THE PRICES ARE COMING DOWN.
THE TRUMP ADMINISTRATION, YOU
COULD INCREASE THE SUPPLY OF
SOMETHING AND THE PRICE WOULD
COME DOWN, PEOPLE WOULD BE
RICHER AND BE ABLE TO BUY MORE
THINGS.
UNDER THE BIDEN ADMINISTRATION
THE DEMAND IS GOING DOWN.
PEOPLE ARE GETTING POORER AND
THAT’S WHY PRICES ARE GOING
DOWN.
I’M NOT REALLY SURE WHY THE
WHITE HOUSE IS RUNNING VICTORY
LAPS ON THIS ONE RIGHT NOW.
MARIA: WELL, I MEAN, ONE OF THE
REASONS THAT DEMAND IS GOING
DOWN IS BECAUSE OF THIS SHARP
SLOWDOWN IN THE ECONOMY AND NEXT
WEEK IS A BIG ONE ON THE
ECONOMIC FRONT.
WE’VE GOT A FEDERAL RESERVE
MEETING TUESDAY AND WEDNESDAY.
BUT WE WILL ALSO GET THE FIRST
READ OF SECOND QUARTER GDP.
MICK, WE KNOW THE FIRST QUARTER
IS A CONTRACTION OF 1.6%.
DO YOU BELIEVE WE ARE IN A
RECESSION NOW?
AND WILL THAT BE PROVEN NEXT
WEEK WITH THE GDP CONTRACTION
FOR THE SECOND QUARTER?
>> YEAH, YOU SORT OF GET THE
FEELING THAT IT IS A RECESSION,
RIGHT.
IT’S DIFFERENT BECAUSE YOU’RE
SORT OF AT FULL EMPLOYMENT
ALTHOUGH THE LABOR PARTICIPATION
RATES ARE WAY BELOW WHERE THEY
SHOULD BE BUT IT’S CURIOUS TO
SEE THE DEMOCRATS TRYING TO
REDEFINE THE LANGUAGE.
THE PREVIOUS SEGMENT YOU DID ON
WHAT DEFINES RECESSION WAS
STUNNING TO ME.
I CAN ASSURE YOU THAT IF THERE
WAS A REPUBLICAN IN THE WHITE
HOUSE RIGHT NOW AND WE HAD TWO
CONSECUTIVE QUARTERS OF A GDP
REDUCTION, THAT WOULD BE A
RECESSION IN THE MINDS OF THE
DEMOCRATS SO IT’S REALLY A
LITTLE BIT DISTURBING, AS ONCE
AGAIN THE DEMOCRATS ARE
UNDERMINING EVEN THE LANGUAGE
THAT WE TALK ABOUT OR THAT WE
USE WHEN WE TALK ABOUT OUR OWN
COUNTRY.
TWO QUARTERS IN A ROW OF GDP
CONTRACTION IS A RECESSION,
PERIOD, END OF STORY.
THEY KNOW IT.
AND ONE ONCE AGAIN YOU’VE GOT TO
WONDER WHY THEY’RE STICKING
THEIR NECK OUT ON SOMETHING AS
ABSURD AS ALL THAT.
MARIA: THEY PLAY WORD GAMES.
VERIZON IS OUT THIS MORNING AND
IT IS A MISS ON EARNINGS.
IT’S JUST REPORTING ITS NUMBERS
RIGHT NOW.
VERIZON IS ALSO CUTTING ITS
GUIDANCE FOR THE SECOND HALF OF
THE YEAR, MICK.
THIS IS ANOTHER INDICATION WHERE
WE ARE SEEING A HE SLOWDOWN IN T
ECONOMY AS THIS ADMINISTRATION
PUSHES THIS GREEN AGENDA AND
THIS CLIMATE CHANGE AGENDA WHICH
HAS COME WITH HIGHER COSTS FOR
CORPORATE AMERICA, MICK.
YOUR THOUGHTS ON WHAT IS GOING
ON IN TERMS OF THIS
ADMINISTRATION PUSHING AN AGENDA
EVEN THOUGH THE AMERICAN PEOPLE
ARE PUSHING BACK, LOOK AT THESE
APPROVAL RATINGS.
VERIZON IS CUTTING ITS FORECAST
AND THAT STOCK IS DOWN 4
AND-A-HALF PERCENT RIGHT NOW.
>> YEAH.
AND YOU CAN SEE OTHER INDICATOR
AS WELL.
HOME PRICES, NEW STARTS, LUMBER
PRICES.
THERE’S A LOT OF INDICATION
THAT’S THINGS ARE SLOWING DOWN
WHICH WHEN YOU ARE A DEMOCRAT
AND YOU’RE A DEMAND SIDER LIKE
SO MANY OF THE FED AND CERTAINLY
THE TREASURY ARE, THE ONLY WAY
TO BRING DOWN PRICES IS TO
REDUCE DEMAND AND REDUCED DEMAND
COMES FROM TAKING MONEY AWAY
FROM PEOPLE, MAKING PEOPLE
POORER, GIVING YOU LESS MONEY TO
SPEND.
IF YOU DEMAND FEWER THINGS AND
LESS SERVICES, THE PRICE FOR
THOSE GOODS AND SERVICES WILL GO
DOWN.
IT’S ONE OF THOSE CLASSIC
DIFFERENCES BETWEEN DEMOCRATS
AND REPUBLICANS.
REPUBLICANS ARE SUPPLY SIDERS.
WE THINK THE BEST THING TO DO IS
TO MAKE MORE THINGS SO THAT
THERE’S MORE THINGS FOR FOLKS TO
BUY AND PRICES WILL COME DOWN
AND DEMOCRATS SIMPLY REFUSE TO
DO THAT.
ONE OF THE REASONS GAS PRICES
ARE AS HIGH AS THEY ARE IS
BECAUSE DEMOCRAT POLICIES
REGARDING FOSSIL FUELS ARE
WORKING.
WE LOST ALMOST 1 MILLION BARRELS
A DAY OF CAPACITY OVER THE
COURSE OF THE LAST COUPLE YEARS.
WE’RE LOSING ANOTHER COUPLE
HUNDRED THOUSAND BARRELS A DAY
OF CAPACITY IN THE NEXT COUPLE
YEARS.
THE DEMOCRATS ARE MAKING IT
DIFFICULT OR UNPROFITABLE TO
INVEST IN GASOLINE AND FOSSIL
FUEL PRODUCTION.
THESE POLICIES ARE WORKING.
THAT’S WHY YOU’RE SEEING
SUPPLIES GO DOWN AND PRICES GO
UP.
UNTIL YOU CHANGE THAT, THE ONLY
WAY THAT PRICES WILL COME DOWN
IF DEMAND COMES DOWN BECAUSE
PEOPLE HAVE LESS MONEY TO SPEND
ON GAS.
MARIA: YEAH.
ALL RIGHT.
HERE’S BRIAN BRENBERG.
GO AHEAD, BRIAN.
>> HEY, MICK.
WE’RE IN THE MIDST OF WHAT LOOKS
LIKE A BIG SLOWDOWN AND THE
PRESIDENT THIS WEEK IS TOWING
THE LINE, TALKING ABOUT A
CLIMATE EMERGENCY WHICH WOULD
UNLEASH A SLEW OF EXECUTIVE
ORDERS THAT WOULD HAVE THE SUM
TOTAL EFFECT OF COMPLETELY
GUMMING UP THE ENERGY MARKETS IN
THE UNITED STATES.
IF WE GET WHAT WE’RE HEARING
ABOUT FROM THIS, HOW DO YOU
THINK THAT’S GOING TO AFFECT THE
ECONOMY?
HOW DO YOU THINK THAT’S GOING TO
AFFECT GAS PRICES, NAT GAS
PRICES OVER THE NEXT COUPLE OF
MONTHS?
>> LOOK, IT’S INFLATIONARY,
RIGHT.
AGAIN, IF INFLATION IS TOO MUCH
MONEY CHASING TOO FEW GOODS AND
YOU’RE GOING TO INTRODUCE A
BUNCH OF POLICIES THAT MAKE IT
EVEN MORE DIFFICULT TO GET THOSE
GOODS TO MARKET, WE’RE TALKING
HERE ABOUT GASOLINE, THE PRICES
OF THAT GO UP.
WHAT I REALLY WONDER ABOUT IF
DEMOCRATS UNDERSTAND HOW
GASOLINE GETS IN YOUR TANK.
YOU HAVE TO PULL IT OUT OF THE
GROUND.
THEY’RE REGULATING THAT.
YOU HAVE TO MOVE IT TO
REFINERIES THROUGH PIPELINES.
THEY’RE REGULATING THAT.
YOU HAVE TO REFINE IT.
THEY’RE REGULATING THAT.
YOU HAVE TO PUT IT IN A PIPELINE
TO GET IT TO CONSUMERS, THEY’RE
REGULATING THAT.
IF THERE’S ONE GOOD THING ABOUT
THE FACT THAT PRICES ARE COMING
DOWN OTHER THAN IT’S A LITTLE
CHEAPER IT PUTS THE WHOLE PUTIN
PRICE HIKE THING TO SHOW IT FOR
THE LIE THAT IT WAS.
PUTIN IS STILL IN UKRAINE.
THE RUSSIANS ARE NOT PRODUCING
ANYTHING.
YET PRICES ARE COMING DOWN.
CLEARLY THAT’S THE CASE AND A
PUTIN WAS NOT THE REASON PRICES
WENT UP IN THE FIRST PLACE.
THAT ONE LIE FROM THE WHITE
HOUSE HAS BEEN EXPOSED.
MY GUESS IS THAT’S NOT THE LAST
ONE BEFORE THE ECONOMIC CYCLE IS
OVER.
MARIA: CHRISTIAN WHITON JUMP
IN.
>> WITH A RECESSION LIKELY
COMING, THERE’S SOME DISPUTE
ABOUT THAT, I THINK A LOT OF US
ARE IN AGREEMENT THAT COME
THURSDAY, NEXT THURSDAY, WE’LL
BE OFFICIALLY IN A RECESSION.
OF COURSE WE’RE IN ONE NOW IF
THE REPORT COMES OUT ON Q2.
WHAT ABOUT THE COMING FINANCIAL
CRISIS WITH THE FEDERAL BUDGET,
IS THAT GOING TO HAPPEN, DO YOU
THINK?
WE’VE BEEN TALKING ABOUT THE
INTENSE SPENDING OF THE BIDEN
ADMINISTRATION AND SENATOR
MANCHIN THAT MAGNIFICENT DREAM
CATCHER OF PROGRESSIVE DREAMS
PUT THE BRAKES ON SOME OF IT BUT
DON’T YOU THINK THE FEDERAL
BUDGET WILL HAVE TO COME DOWN A
LOT IF WE’RE GOING TO TAME
INFLATION?
I MEAN, CAN THE FED REALLY DO IT
ALL?
>>> IT’S A GREAT QUESTION.
HERE’S THE THING THAT I WORRY
ABOUT THAT I DON’T THINK ENOUGH
FOLKS ARE TALKING ABOUT.
I BELIEVE THE FEDERAL RESERVE’S
HANDS ARE TIED AT A CERTAIN
POINT.
THEY CAN’T DO WHAT VOLCKER DID
IN THE ’70s AND ’80s TO
RAISE INTEREST RATES 14% BECAUSE
IF THEY DO THAT THAT FLOWS
THROUGH TO THE LARGEST BORROWER
IN THE WORLD WHICH IS THE
FEDERAL GOVERNMENT.
AT $30 TRILLION A YEAR, THE IF
YOU’RE AT 3%, YOU’RE TALKING
ABOUT A TRILLION DOLLARS A YEAR
IN INTEREST PAYMENTS.
I THINK THE FED KNOWS THEY CAN’T
DO THAT.
THEY WON’T BE ABLE TO RAISE
INTEREST RATES AS AGGRESSIVELY
AS THEY WOULD BE ABLE TO DO IF
THE FEDERAL GOVERNMENT WASN’T SO
HEAVILY IN DEBT AND I THINK THAT
MEANS THE FEDERAL RESERVE IS
GOING TO HAVE TO EITHER FIGURE
OUT A DIFFERENT TOOL TO USE, OR
IS GOING TO BE WILLING TO ACCEPT
A HIGHER LEVEL OF INFLATION OVER
THE LONG TERM.
OTHERWISE, IF THEY GO CRAZY ON
INTEREST RATES AND ONLY USE THAT
TOOL, THEY COULD BANKRUPT THE
FEDERAL GOVERNMENT.
I THINK THAT’S A VERY DANGEROUS
PLACE TO BE AND I HOPE THEY KNOW
THAT BUT IT’S REALLY A BAD
SITUATION TO BE IN WHEN YOU’RE
THIS HEAVILY IN DEBT AND I DON’T
THINK THAT’S GOING TO CHANGE
COMING OUT OF CONGRESS ANY TIME
SOON.
MARIA: YEAH.
I MEAN, WHAT’S THE INTEREST
PAYMENT THAT THE U.S. SEES IN
TERMS OF AN INCREASE AS RATES GO
HIGHER BY 1 POINT, MICK?
WE’RE TALK ABOUT HUNDREDS OF
BILLIONS OF DOLLARS, RIGHT.
>> AT A VERY BASIC LEVEL, 1
PERCENTAGE POINT INCREASE IN OUR
BORROWING COST IS $300 BILLION A
YEAR.
SO ROUGHLY A HALF TO A THIRD OF
WHAT WE SPEND ON DEFENSE.
THAT WOULD BE THE SECOND BIGGEST
LINE ITEM IN THE DISCRETIONARY
BUDGET.
MARIA: MICK, GREAT TO HAVE YOU.
THANKS VERY MUCH.