January 16, 2025 • 38 mins
In this episode, Lisa and EJ Antoni discuss the anticipated economic changes under Donald Trump's presidency, focusing on the potential for a 'golden era' in America. They explore the challenges posed by inflation, the impact of immigration policies on the labor market, and the importance of regulatory reforms and tariffs in fostering economic growth. The Truth with Lisa Boothe is part of the Clay Travis & Buck Sexton Podcast Network - new episodes debut every Monday & Thursday.
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Episode Transcript
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Speaker 1 (00:01):
So Donald Trump will soon be president again, and he
has promised us a golden age for America, which I
am certainly looking forward to, which I'm sure you guys
are at home are looking forward to, particularly after these
last four years of I think what we could all
admit has been hell under Joe Biden, hell for the economy,
(00:23):
help for the border, complete chaos around the world as well.
Speaker 2 (00:27):
Seems like things have just fallen apart.
Speaker 1 (00:29):
Just a lack of patriotism as well, insanity with you
trying to transgender kids, and just complete and total nonsense
is basically what we've experienced over the past four years.
Speaker 2 (00:39):
But today, for.
Speaker 1 (00:40):
This episode, I want to focus on this golden era,
particularly for the economy.
Speaker 2 (00:44):
What does that look like?
Speaker 1 (00:46):
What should he do in these next steps. Also want
to dig in a little bit to doge what will
some of those government reforms look like for the country
and for the economy. Also, I'm sure you guys are
all familiar. There's recently a lot of back and forth
on X and in conservative circles about H one B visas.
(01:06):
And we had this conversation when I was on Outnumber
not too long ago, and I I quoted a friend
and he said this, over the last year, native born
Americans have lost almost eight hundred thousand jobs, while foreign
born workers have gained over one million jobs. The US
labor market is turning into a temp agency for foreign
(01:26):
workers and government bureaucrats. We're going to have the person
who I quoted, Heritage Foundations economists EJ and Tony on
the show to talk about that, to talk about the
debate around H one B visas, to talk about Doge,
and to talk about what this golden era for America
will look like and what he's hoping and what the
(01:47):
Heritage Foundation is hoping we can get done over these
next four years. So a lot to discuss, particularly on
the heels of the inauguration, and just a really exciting
chapter for the country.
Speaker 2 (02:00):
So stay tuned for EJ and Tony.
Speaker 1 (02:08):
Well, EJ, it's great to have you on this show.
Like most of these interviews since the election, a lot happier,
a lot more upbeats. It's very exciting four years we've
got ahead of us, So you.
Speaker 3 (02:22):
Can say that again, Lisa, it's it's certainly a much
more positive conversation than it otherwise would have been.
Speaker 1 (02:29):
Well, and you guys are going to be busy at
Heritage too, because you know, we're actually going to be
moving legislation forward that we want, so that'll keep you
guys busy.
Speaker 3 (02:39):
One hundred percent. You know, here's hoping we can actually
get some of these conservative these ideas of conservative governance
across the finish line instead of basically just doing damage control,
which is what we've been more or less relegated to
for the last four years.
Speaker 1 (02:53):
And you know, boy, has it been damage that we've
been saying over these past four years. I guess, you know,
as we're waiting for this golden age for America, which
I do believe, we'll see, how hard do you think
it's going to be to roll back some of that
damage that Joe Biden has done.
Speaker 3 (03:13):
Very It's going to be very, very difficult, Lisa. It's
you know, the president, the Vice president, the Treasury Secretary,
all these folks have a very very tough job on
their hands. Obviously, guys like Tom Homan do as well
at the border. But you know, my focus is obviously
more so economics. So let's just throw out a few
(03:34):
things or just I think to give some people context here.
Everyone loves talking about how wages are up, under Biden, right,
And that's true. In fact, we just got recent data
showing that the average Americans hourly wage jumped five dollars
and seventy six cents, so darn near six bucks. That's
incredible for just four years. The problem is that actually
(03:57):
buys you forty four cents an hour less than it
did when he took office. So there's effectively been a
six dollars and twenty cent hourly inflation tax imposed on
the average American. That is absolutely devastating. There's a reason
why despite so many of these positive numbers, again like
average wages going up, there's a reason why the American
(04:19):
people voted out the president's party from power. They gave
Trump not just the electoral vote, but the popular vote.
They didn't just give him a couple of swing states,
they gave him every single one. In other words, anything
that was remotely up for grabs this time around, Trump got.
And it all has to do with the fact that
Biden has done an incredible amount of damage to the
(04:42):
typical Americans family finances. I mean, home ownership affordability today
is at the lowest point in at least at least
forty three years, at least probably more so, I say,
at least because the record keeping was different back then,
and it's hard to compare. It's a little bit apples
and oranges, Lisa. But at the end of the day,
you still have to face the fact that a monthly
(05:03):
mortgage payment on a median price home, not a mansion,
just a median price home today has more than doubled
compared to when Biden took office. It will cost you
an extra thousand dollars a month every month for thirty
years to afford the exact same house compared to just
four years ago. This is a genuine cost of living crisis.
And we didn't get here overnight. You know, Biden's started
(05:26):
the runaway multi trillion dollar spending bills literally as soon
as he got into office. It's not an exaggeration. They
continue to this day. But he started it immediately. However,
inflation didn't peak until eighteen months into his term, and
it's still bad right now. It's running about a four
point eight percent annualized rate at that pace. Price is
(05:46):
double in less than fifteen years, so that's still really bad.
It's not as bad as it was at its peak.
But the the point is this, Lisa, you know, Trump
is going to implement a lot of executive orders literally
on day one. He's going to push for all kinds
of spending and regulatory reform right away. And even if
those things get across the finish line quickly, it is
still going to take some time before all of those
(06:09):
policies have their effects, just like it took some time
for Biden's bad policies to have their effects. We also
have to grapple with the fact that a lot of
the when it comes to inflation, at least a lot
of the causes don't have immediate effects. So the fact
that the Federal Reserve cut interest rates in what I
think was election interference right before the election to try
(06:30):
to get their preferred candidate across the finish line. They
came in with these emergency rate cuts. That is not
going to have an immediate impact on inflation. It's going
to take many, many months, and so there are inflationary pressures.
You can say it's already baked into the cake for
this year for twenty twenty five based on what the
Federal Reserve was doing last year. Same thing with all
(06:51):
of the runaway spending that Biden continued throughout up until
the very end of twenty twenty four. You know, that
is going to continue to have an inflationary effect this year.
So now it's just a question of how quickly can
they get these regulatory reforms done, how quickly can they
increase energy production, because at least for the first year
or two, all of those positive effects are going to
(07:14):
be at loggerheads with the negative effects that are really
the leftovers from the Biden administration.
Speaker 1 (07:22):
You know, and you look at cutting spending. I mean,
I think things like doge It's it's a great idea,
and I think it's a positive sign. You know that
he wants to task people like Elon and Vivey to
try to cut spending and to try to do some
government reforms and rain and in a bit, you know,
the challenge is just because of how astronomical or debt is.
(07:43):
You know, even if you talk about two trillion dollars,
I mean we're really just talking about like servicing that
debt with that kind of money, right Like, it's like
that's how deep in the hole we have gotten as
a country financially.
Speaker 3 (07:55):
At least one hundred percent. You're spot on here. I mean,
it is so incredible bad today that it is costing US.
I mean, in the month of December, it costs US
one hundred and forty billion dollars just an interest on
the debt. That's not a dime towards principle, that's just
the interest. It's like when your credit card comes in
after you've maxed out your credit card and all you
(08:15):
can afford is just the minimum that covers the interest,
and you can't actually pay down the principle at all.
That's where we are essentially as a country. Sixty six percent,
so essentially two thirds of every dollar paid in personal
income taxes in the month of December went just to
interest on the debt. It didn't go to building roads
(08:37):
or bridges, or hospitals or schools. It didn't fund the military,
it didn't go to pay Social Security recipients. It went
just to interest. And what's really incredible here is the
fact that in the month of December, that's just the
latest data we have available, that was interest on the
debt that was the largest line item in the entire
(08:58):
monthly statement from the Apartment of the Treasury. I mean,
it's incredible. It is more than the Social Security Administration,
it is more than the Department of Health and Human Services.
It is more than all military spending combined. We are,
if we're lucky, going to spend about one point two
trillion dollars in twenty twenty five just in interest on
the debt, just to service the darn thing. I mean,
(09:21):
we are in a very very tight spot, and not
to get too far into the weeds here, but we
keep seeing the yields on treasuries go higher and higher.
That's essentially. That essentially means that if people are going
to hold a treasury, they're demanding that they get a
higher and higher interest rate from the treasury. So the
(09:41):
Treasury is going to sell this debt at an auction,
and the only way they can get people to buy
it is if they're paying very very high interest rates
compared to where they were a few years ago. A
lot of it is converging at about five percent. Five
percent on thirty six trillion dollars is catastrophic. I mean,
the only reason we're able to survive right now is
because so much of the debt was locked in at
(10:03):
interest rates of two or three percent. But that is
slowly all coming due, and when it comes due, we
don't have any money to pay it off, we roll
it over. Going back to that credit card example, Lisa,
imagine if you maxed out a bunch of credit cards
and when you finally have to start making payments on them,
after like an initial like an introductory low rate APR
or something like that, you all of a sudden have
(10:24):
to start making payments and you can't, so you open
up new credit cards and just transfer the balance. That's
basically what we're doing with the national debt right now.
And the problem is again you're getting rid of a
two or three percent interest rate and now you're at
five percent. This is a big reason why the cost
to service the debt is absolutely exploding and it's getting worse,
(10:47):
particularly because Janet Yellen has been engaging, to put it mildly,
financial engineering of treasury markets, which had the positive effect
initially of keeping certain costs to the treasury down and
also increasing liquidity in financial markets. So it kind of
had the same effect as if the Fed was lowering
(11:07):
interest rates and printing money and handing it out throughout
the economy. But now the bill is coming due, and
now the incoming Treasury secretary is going to have to
undo everything that Janet Yellen did, which is going to
cause yields to go up even more. It's going to
cause the cost to service the debt to go up
even more. It's going to cause a lot of tighter
financial conditions within markets. In other words, it's going to
(11:29):
have all these bad effects that should have happened last year.
But Yellen was essentially playing politics with treasury markets again
in order to try to keep things together before the election.
But now that the elections behind us, you know, all
bets are off.
Speaker 2 (11:46):
We've got more with EJ.
Speaker 1 (11:47):
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Speaker 3 (13:06):
As.
Speaker 1 (13:06):
If you look at this Golden era, this golden age
for America, I think, what do you think that looks like?
Speaker 2 (13:14):
And you know what steps would you.
Speaker 1 (13:17):
Like to see the Trump administration take to get us there?
Speaker 3 (13:21):
Well, the Golden Era was a period where we had
not only our fastest rates of economic growth, but they
were sustained rates of economic growth, so it wasn't simply
a one off. You know, in the Reagan years they
managed something like twelve percent annualized GDP growth for about
eighteen months, but that was it. Now you you had
decent growth on average the rest of Reagan's presidency, but
(13:44):
that peak was only sustained for about a year and
a half. During America's Golden Age, that those peaks were
sustained for much much longer. And if we look at
you know, what was what was the winning formula during
that time, you essentially didn't even have a regulatory state.
Regulations that were put in place were incredibly mild compared
to what you have today. This is where you mentioned DOGE.
(14:06):
This is where DOZE is going to be incredibly vital
because they'll help identify not just where spending is being wasted,
but where regulations are imposing undue burdens on the American
people and on American manufacturers and other producers. So dose
will be really important there. I'm very, very hopeful with
the people who are getting appointed to Ohira Casey Mulligan,
(14:30):
who's going to be kind of the deregulatories are. He'll
be at the SBA. He's a great, great economist, University
Chicago professor. He wrote a paper not that long ago
explaining how during the first Trump administration their regulatory reforms
actually saved the average American family about twenty five hundred
dollars a year per year, So multiply that by four
(14:52):
years and that really adds up over time. Conversely, the
Biden administration has done exactly the opposite. Their regulatory costs
have imposed something like ten or twelve thousand dollars in
new costs on the average American family. That has greatly
contributed to inflation, to the cost of living crisis. And
so undoing all of those bad regulations is going to
(15:13):
help bring down costs for Americans. And again not just
for families, but for producers too, the people who are
trying to bring goods and services to the marketplace. That's
the regulatory regime. What about taxes, Well, there, you didn't
even have an income tax. Sure you had it for
a little bit when it was a temporary wartime measure,
but it was quickly ruled on constitutional It's not until
(15:34):
nineteen thirteen where the Constitution actually has to be amended
where they can reimpose any kind of income tax and
make a actual long term statute. So you didn't have
income tax, where did the government get all its money tariffs?
I can't stand lee. So all these so called economists
out there who are screaming from the rooftops the tariffs
are somehow going to crash the economy. They didn't during
(15:57):
first Trumps. During Trump's first term, excuse me, and Biden
said that all these tariffs were terrible, except he's had
four years to revoke them all and he hasn't. He's
left them in place because they're not doing any harm
at all. In fact, they're a net benefit. And during
America's Golden Age, the government funded itself almost exclusively on tariffs,
(16:17):
and what we saw was not a collapse of the economy,
but again some of our highest sustained growth rates ever
in our nation's history. And I really love this latest
proposal from the President, where we already have an IRS,
and he says, you know, for too long the IRS
has been burdening Americans. We need an ERS, an external
revenue service that's going to help collect all of these
(16:40):
taxes from foreigners, from foreign producers, for example. And we
do have something like that right now in the Bureau
of Customs and Border Protection, but that has other duties.
And I would really love to see an agency that's
going to spearhead this tariff effort and also non tariff
barriers and will also keep track of foreign currency markets.
(17:03):
The reason that's so important, Lisa, is because you have
bad actors like China who are constantly manipulating their currency.
They're doing it right now in spades where they're purposely
devaluing their currency faster than other nations. And what that
does is essentially give their producers an unfair advantage because
the way the currency markets work in exchange rates, it
(17:26):
makes their goods artificially cheaper, and so our domestic producers
are unable to compete with their Chinese counterparts. And one
of the things that the Trump administration had started doing,
but the Treasury Secretary at the time just I guess
didn't have his heart in it or whatever. He never
really fully pursued this idea of currency manipulation by China.
(17:47):
I think Scott Bessant, the incoming Treasury Secretary, is going
to pay attention to it. I think the Trump administration
broadly will, and they will make an effort to penalize China,
in other words, impose tariffs to counteract the devaluing of
the Chinese currency. And this is where I would love
to see all of these measures rolled back under the
(18:08):
Treasury Department in what used to be called the custom service,
and I think this ers would go a long way
in making in making all of that happen, in really
protecting the American producer from this unfair competition around the world.
And the other thing that we need to be I
think very aware of, Lisa, is the fact that you
(18:29):
do have a lot of nations today that have tariffs,
except they just don't call them that. Europe has a
tax regime where you have all kinds of measures like
value added taxes that because of the way they're structured
there end up imposing what is the equivalent of a tariff.
(18:49):
And so if they're going to do that, then we
should do the exact same thing to them. Why should
their producers have an unfair advantage over American producers. This
is a big part of why it is so hard
to make anything here. We literally, because of the differences
in tax codes, give unfair advantages to people making things overseas.
(19:12):
We actually provide an incentive, Lisa, in our own tax
code for a manufacturer to close up shop here in
the United States, to fire all of the Americans working
for him, and to move his factory to Canada, to Mexico.
He doesn't have to go to China. He can just
go right over the border and stay in North America
and still get that what I think is an unfair
(19:33):
tax advantage, and it's time for that to end.
Speaker 2 (19:37):
What do you make of tariffs?
Speaker 1 (19:39):
I mean, it seems that Trump, President Trump has been
able to use them in the past pretty successfully in
trying to, you know, push people in the direction that
he would like. And you know, it is clear that
that is going to be a big part of this
incoming administration in his next four years.
Speaker 2 (19:58):
So what do you make of taris It might for them.
Speaker 3 (20:02):
Sure, sure, At least I part ways with a lot
of my fellow economists in this regard because I just, frankly,
with all due respect, some of them are very bright,
but I don't think they've thought through this issue very well.
You know, they talk about how they're for free trade, Well,
what does that mean. You're talking about free trade as
if trade only happens on the international market. What about
(20:22):
the domestic market. If you're really for free trade, then
you should be fighting for the elimination of sales taxes
here at home. That's a tax on a domestic transaction,
and so is income tax. Income taxes a tax on
the exchange of labor for an income for money. So
if you're going to be for free trade, then why
(20:43):
are you okay with taxing domestic income, with taxing domestic sales.
It doesn't make any sense except that's where we're at today,
and it's as if we just have these blinders on
among so many so called conservative economists where they say, Okay,
we're going to be for getting rid of all taxes
(21:03):
on international transactions and we're just going to rely on
taxes of domestic transactions to finance the government. It makes
no sense, especially when you consider the fact that our politicians,
our lawmakers should be about America first. They should be
putting Americans first. And so why is it we're going
to only tax Americans, especially when America provides so many
(21:27):
benefits for the rest of the world. And what tariffs
do is they help shift some of what we call
tax incidents, which is not who is tax but who
actually pays the tax. They help shift some of that
tax incidents off Americans and onto the rest of the world.
And if we're really going to be about America first,
then that should be a priority. I think that's a great,
(21:47):
great thing and what we saw you mentioned under the
first Trump administration with these tariffs. What we saw then
was for every dollar on average, for every dollar of
tariffs that Trump imposed on China these producers, eighty one
cents was actually paid for by those Chinese producers. Only
nineteen cents on the dollar was actually paid for by
(22:10):
Americans in the form of higher prices. And a lot
of that has to do with the fact that if
the Chinese producers ended up just raising their prices and
passing the full freight onto American consumers the full cost
of that tariff, then American consumers would simply buy it elsewhere.
We saw this with Chinese steel. They could only raise
(22:30):
their prices a little bit because if they raised them anymore,
then Americans would just buy their steel from American steel companies.
They would buy them from even other overseas companies like
in Sweden, for example. That was a big source of
competition with Chinese steel, especially after these tariffs. And so
this idea that somehow we're going to impose attacks on
(22:52):
Americans exclusively, I'm sorry, but both the theory and the
record of history say that that is completely wrong. And
again we need to get away in my opinion, we
need to get away from this mentality of thinking that
free trade only applies to the international marketplace. If we're
going to make any marketplace free trade truly free, I
(23:14):
would much rather we start with America first and we
make all of our domestic markets free of taxes before
we worry about anything abroad.
Speaker 2 (23:24):
You know, we've already seen that.
Speaker 1 (23:27):
You know, the National Federation of Independent Business UH said
that it's small business Optimism index has increased since Donald
Trump has taken office. It's searched the highest level in
just over six years in December. What does that mean
for the economy as well? Just with you know, small
(23:50):
businesses and businesses in general, uh, just being more enthusiastic
about these next four years.
Speaker 3 (23:57):
Uh.
Speaker 1 (23:57):
You know, the deregulation that we've talked about. How much
of an impact does that have on the economy.
Speaker 3 (24:03):
Oh, tremendously, is really really tremendous impact, especially when we
consider that small business is really the driver of the economy.
That's where you know, that's where you see the big
gains in employment. That's where you see the big providers.
I'm not talking about big providers in terms of a
single small business has a huge volume of factory orders,
(24:26):
but when you combine small business together, that's the biggest
source of production. In fact, even a retailer like Amazon,
they get more than half of all the stuff they
sell from small business. It's not as if it's all
just mega corporations on there. Obviously, Amazon is a mega corporation,
(24:47):
but in a way they're really just fulfilling a middle
man role of getting consumers and small businesses together because again,
more than half of what they sell is from small businesses.
What we're seeing beeing in terms of that increase in
optimism that you mentioned, the increase in December that brought
us to that six year high, You're absolutely right that
(25:07):
was built on the huge increase that we saw in November.
In fact, that increase we saw in November is the
largest since November of twenty sixteen, when Trump won the
first time around. And those are the biggest single monthly
gains in the history of the index. So that gives
you an idea. I think of how much small businesses
(25:29):
value the Trump agenda of what they are anticipating, and
if we delve into that survey as well as others,
what we find is that people are anticipating a much
more favorable tax and regulatory regime under Trump. They're looking
forward to much lower energy prices. They're looking forward to
(25:49):
a better competition i should say, a more competitive environment
in the sense that they think they'll be more able
to compete with foreign counterparts. A lot of that has
to do with the tariff discussion that we just had.
And again this is not simply a single survey of
small businesses in the country. What we find when we
look at the regional Federal Reserve banks, they do surveys
(26:13):
of both manufacturers and the service industry. We find the
exact same thing. Optimism is through the roof the issue though,
is the fact that although they expect future conditions to
be much improved, Lisa, the problem is that current conditions
in all these different surveys continue deteriorating. In other words,
things right now are still getting worse. We saw that
(26:35):
in the most recent inflation data for December, where inflation
rose so much should I should say prices rose so
much faster than incomes in the month of December, that
we saw the average Americans real income fall yet again.
So it's already down like three percent in November in
(26:56):
real or inflation adjusted terms, and then after December it's
down now three point two percent. So again the situation
is bad and it's deteriorating, not a good place to
be in. And all of this future optimism is great,
but future optimism does not pay today's bills, and so
we continue to see Americans fall behind when it comes
(27:17):
to things like credit card debt. We continue to see
the rate of delinquencies and defaults on credit card debt,
on auto loans, all of those things are picking up
student loans that's going to go through the roof really
really fast. The only reason it hasn't been going up
these are the defaults and delinquencies that is is because
the Biden administration conveniently changed the rules on credit reporting,
(27:42):
so they gave essentially a reprieve where if you are
delinquent on your student loans, it's not going to get
reported to credit credit bureaus. Well, that just ended again
very conveniently timed with the election. So now you can
expect in twenty twenty five the rate of loan non
performance or in other words, people not paying on those
(28:02):
student loans, that is going to absolutely go through the
roof as people can't afford to pay their student loans,
something that was already happening, but is finally going to
get reported to credit agencies. So it's not a good
situation where we are right now. But at the same time,
cometh the hour, cometh the man. I think Trump is
the right guy to steer the ship of state through
(28:24):
these troubled waters. I think his energy policy, his immigration policy,
his regulatory policy, his tax policy. I think all of
these are the winning formula that we need. It's just
that we're going to be coming at this from a
very very low level, and it's going to take time
for us to climb back to where we were when
Biden took office. It's not that it's not going to happen.
(28:46):
It's not that it's not doable. It's just that it's
going to take a lot of work.
Speaker 1 (28:50):
We've got to take a quick commercial break. More with
EJ and Tony on the other side. I quoted you
when I was on air now two long ago on
Outnumbered and we were talking about the H one B
visa discussion that really kind of took fire on social media,
particularly on X and you said this near a quote
(29:12):
you said over the last year, Native born Americans have
lost almost eight eight hundred thousand jobs. Well, foreign born
workers have gained over one million jobs. The US labor
market is turning into a temp agency for foreign workers
and government bureaucrats. How has the influx and the incoming
of legal aliens and immigrants to the United States shaped
(29:38):
the workforce and what does that mean for Americans?
Speaker 3 (29:42):
Well, great, great questions, and you're absolutely right with the
numbers there. We literally have fewer Americans working today, Lisa,
than we did before the pandemic. So over the last
five years, Americans have lost ground. I mean, that's terrible,
especially when you consider the fact that the population has
gone up. It's not as if the American population is
(30:04):
collapsing here. And yes, I understand that people are retiring,
but even once you take those retirees into account, you
still have a lower labor force participation rate, and even
among the prime age in other words, the people who
are in their peak working years, if you want to
call it that. The only reason why that is up
(30:26):
is because that includes foreign labor. So it's not as
if Americans are the ones getting all of these jobs
that Biden keeps talking about. It's foreign workers. Their employment
is up over three and a half million now again
compared to pre pandemic. So why are Americans so unhappy
with the labor market. It's because they're not the ones
(30:46):
getting the jobs. And instead, what we have seen, in
large part because of this administration's crazy immigration policies, has
been corporations being able to rely heavily on cheap foreign labor,
much of which is actually under the table. And what's
interesting is that even the Biden administration admits on the
(31:09):
Bureau Labor Statistics website that their their category of foreign
born workers includes an unknown number of illegal aliens. And
so you can't tell me that this is just all
you know, people coming here legally, you know, with H
one B visas or whatever the case may be. No,
a huge part of this has to has to do
(31:31):
with the influx of cheap illegal labor essentially coming into
this country. And that's part of the reason why when
we break out wage growth among different cohorts, you can
see that low skilled or unskilled labor that has that
cohort has seen some of the worst wage growth over
the last four years, because that's where you're getting the
(31:52):
massive increase in supply. Well, the you know, if you
increase supply, you decrease price. That's econ one on one
the price of labor. We call that wages. So there
you go. And one of the things that this administration
is going to have to do is not just seal
up the border and stop that flow of illegal immigration,
not just deport the illegals who are already here. But
(32:15):
on top of that, they're going to have to consider
some serious reforms of programs that you mentioned, Like, they're
going to have to really look at H one B
and they're going to have to think, Okay, is this
program actually doing what we want it to do? Well,
what do we want it to do. We want it
to attract the best and brightest, literally from around the world.
(32:35):
We want anybody who is productive, highly productive, who can
add to society. We want those people to come here
to the United States. We want them to add to
our society. We want them to increase production here because
that benefits Americans. That increases real wage growth across the
(32:55):
income scale, That increases the standard of living. It brings
down the cost of living by having those highly skilled
professionals here in America. By the way, this does nothing
for me, right, I want to import more PhDs, not
people who didn't even graduate high school, people who have
little to no skills. I want more people here who
(33:17):
are going to compete with folks like me. This is
not going to help my wage growth, but you know
who it is going to help, Lisa. It's going to
help the average American. It's going to help the guy
who's starting his career, the guy or gal who doesn't
yet have any skills, but they're getting their first job
where they're going to acquire some skills. They're going to
learn things like how to deal with the boss, with coworkers,
(33:38):
with customers, how to show up on time. They're going
to show leadership skills, they're going to learn entrepreneurial skills,
all of these things that you get on the first job.
That's your first rung on the ladder of success. But
you cut out that wrung on the ladder of success
when you force Americans to compete with illegal labor at
(33:59):
wages which they can't compete. And so again, it doesn't
even matter if this person is ultimately going to end
up as high skilled labor or continue their whole career
as relatively low skilled labor. And that's fine. People can
still make a good living that way, provided you have
a labor market that's structured in a manner which allows
everyone to succeed. And so that again, that's going to
(34:21):
involve looking at programs like the H one B visa
and saying, all right, we need to reform this in
such a way that it attracts the best and the
brightest only and so that companies can't abuse it. And
there have been lots of ideas floated which have garnered
a lot of attention by folks like Elon Musk and
Vivek Ramaswami. You know, that has sparked a whole bunch
(34:44):
of different discussions on platforms like x and elsewhere in
the media. You know, some of which some of those
discussions you yourself have had with people, Lisa, And at
the end of the day, we need again to make
sure that our immigration system doesn't serve the rest of
the world, should serve Americans, because again, this is America
(35:04):
and we're about America first. Now, the other part, if
I may, of that quote that you mentioned was the
fact that we're turning the labor market into something that
serves foreign labor, but also it's a temp agency and
it's serving government bureaucrats. The reason that that temp agency
component is in there is that if we look at
(35:26):
in the labor market right now what's going on with
full time work versus part time work. We are absolutely
hemorrhaging full time jobs. In fact, if you look at
where we were in December again that's just the latest
data we have right now, the economy was down one
point three million jobs compared to June of twenty twenty three.
(35:47):
So over the course of a year and a half,
we hemorrhaged one point three million jobs. So where did
all the job growth come. It has literally all been
part time work. All net job growth in the last
year and a half, think of that has all been
part time jobs. A lot of that has to do
with people losing their full time work and having to
replace it with multiple part time jobs. This is why
(36:10):
you're increasing the number of jobs without actually increasing the
number of people who are employed. In fact, what you
just saw again in the month of December was the
number of people employed was down almost a quarter million
over the last thirteen months. I mean, these are terrible,
(36:30):
terrible numbers. And then finally, the other thing mentioning the
government bureaucrats over the course of last year, the number
of people in government surveys who reported that they were
now working for the government jumped by almost half a million.
So that plays directly into the unemployment rate, which is
(36:51):
being kept down because of all this hiring by government.
And we have never had so many government jobs in
our nation's history before. And even if we want to
think of things like, okay, what about government jobs as
a percent of the population or as a percent of
total jobs, it is still rising at a very alarming rate.
And on top of that, we also have to remember
(37:12):
that there are a lot of what we would call
private sector jobs LISA that aren't actually paid for by
the private sector. When the government gives a grant to
a hospital, let's say, and that hospital hires a nurse,
or even if they hire a janitor, doesn't matter. That
salary is paid for by the taxpayer. You could call
that an indirect hire by government. So the issue here
(37:35):
is the fact that you need many, many private sector
jobs being added every month to support a single government
job being added that month, and the ratio is probably
at least forty to one. I've seen some estimates that
are a lot higher, that are closer to eighty or
ninety to one, but whatever the case, we are nowhere
near a sustainable ratio right now because about half of
(37:58):
all job growth that we've seen over the last year
was either a direct or indirect hire by the government.
In other words, about half of all our job growth
was someone being whose salary is paid for by taxpayer dollars.
That is completely unsustainable.
Speaker 1 (38:13):
Absolutely, EJ and TONI, I appreciate your time, Thanks so
much for coming on the show and look forward to
having you back one and hopefully a discussion about things
going right and continuing to go right. So appreciate your time.
Speaker 3 (38:25):
Here's hoping, Lisa, thank you very much for having me.
Speaker 2 (38:29):
That was EJ.
Speaker 1 (38:30):
And Tony with the Heritage Foundation. Appreciate him for making
the time. Appreciate you guys at home for listening every
Monday and Thursday, but of course you can listen throughout
the week on to Thank John Cassio, my producer, for
putting the show together.
Speaker 2 (38:41):
Until next time,
So Donald Trump will soon be president again, and he
has promised us a golden age for America, which I
am certainly looking forward to, which I'm sure you guys
are at home are looking forward to, particularly after these
last four years of I think what we could all
admit has been hell under Joe Biden, hell for the economy,
(00:23):
help for the border, complete chaos around the world as well.
Speaker 2 (00:27):
Seems like things have just fallen apart.
Speaker 1 (00:29):
Just a lack of patriotism as well, insanity with you
trying to transgender kids, and just complete and total nonsense
is basically what we've experienced over the past four years.
Speaker 2 (00:39):
But today, for.
Speaker 1 (00:40):
This episode, I want to focus on this golden era,
particularly for the economy.
Speaker 2 (00:44):
What does that look like?
Speaker 1 (00:46):
What should he do in these next steps. Also want
to dig in a little bit to doge what will
some of those government reforms look like for the country
and for the economy. Also, I'm sure you guys are
all familiar. There's recently a lot of back and forth
on X and in conservative circles about H one B visas.
(01:06):
And we had this conversation when I was on Outnumber
not too long ago, and I I quoted a friend
and he said this, over the last year, native born
Americans have lost almost eight hundred thousand jobs, while foreign
born workers have gained over one million jobs. The US
labor market is turning into a temp agency for foreign
(01:26):
workers and government bureaucrats. We're going to have the person
who I quoted, Heritage Foundations economists EJ and Tony on
the show to talk about that, to talk about the
debate around H one B visas, to talk about Doge,
and to talk about what this golden era for America
will look like and what he's hoping and what the
(01:47):
Heritage Foundation is hoping we can get done over these
next four years. So a lot to discuss, particularly on
the heels of the inauguration, and just a really exciting
chapter for the country.
Speaker 2 (02:00):
So stay tuned for EJ and Tony.
Speaker 1 (02:08):
Well, EJ, it's great to have you on this show.
Like most of these interviews since the election, a lot happier,
a lot more upbeats. It's very exciting four years we've
got ahead of us, So you.
Speaker 3 (02:22):
Can say that again, Lisa, it's it's certainly a much
more positive conversation than it otherwise would have been.
Speaker 1 (02:29):
Well, and you guys are going to be busy at
Heritage too, because you know, we're actually going to be
moving legislation forward that we want, so that'll keep you
guys busy.
Speaker 3 (02:39):
One hundred percent. You know, here's hoping we can actually
get some of these conservative these ideas of conservative governance
across the finish line instead of basically just doing damage control,
which is what we've been more or less relegated to
for the last four years.
Speaker 1 (02:53):
And you know, boy, has it been damage that we've
been saying over these past four years. I guess, you know,
as we're waiting for this golden age for America, which
I do believe, we'll see, how hard do you think
it's going to be to roll back some of that
damage that Joe Biden has done.
Speaker 3 (03:13):
Very It's going to be very, very difficult, Lisa. It's
you know, the president, the Vice president, the Treasury Secretary,
all these folks have a very very tough job on
their hands. Obviously, guys like Tom Homan do as well
at the border. But you know, my focus is obviously
more so economics. So let's just throw out a few
(03:34):
things or just I think to give some people context here.
Everyone loves talking about how wages are up, under Biden, right,
And that's true. In fact, we just got recent data
showing that the average Americans hourly wage jumped five dollars
and seventy six cents, so darn near six bucks. That's
incredible for just four years. The problem is that actually
(03:57):
buys you forty four cents an hour less than it
did when he took office. So there's effectively been a
six dollars and twenty cent hourly inflation tax imposed on
the average American. That is absolutely devastating. There's a reason
why despite so many of these positive numbers, again like
average wages going up, there's a reason why the American
(04:19):
people voted out the president's party from power. They gave
Trump not just the electoral vote, but the popular vote.
They didn't just give him a couple of swing states,
they gave him every single one. In other words, anything
that was remotely up for grabs this time around, Trump got.
And it all has to do with the fact that
Biden has done an incredible amount of damage to the
(04:42):
typical Americans family finances. I mean, home ownership affordability today
is at the lowest point in at least at least
forty three years, at least probably more so, I say,
at least because the record keeping was different back then,
and it's hard to compare. It's a little bit apples
and oranges, Lisa. But at the end of the day,
you still have to face the fact that a monthly
(05:03):
mortgage payment on a median price home, not a mansion,
just a median price home today has more than doubled
compared to when Biden took office. It will cost you
an extra thousand dollars a month every month for thirty
years to afford the exact same house compared to just
four years ago. This is a genuine cost of living crisis.
And we didn't get here overnight. You know, Biden's started
(05:26):
the runaway multi trillion dollar spending bills literally as soon
as he got into office. It's not an exaggeration. They
continue to this day. But he started it immediately. However,
inflation didn't peak until eighteen months into his term, and
it's still bad right now. It's running about a four
point eight percent annualized rate at that pace. Price is
(05:46):
double in less than fifteen years, so that's still really bad.
It's not as bad as it was at its peak.
But the the point is this, Lisa, you know, Trump
is going to implement a lot of executive orders literally
on day one. He's going to push for all kinds
of spending and regulatory reform right away. And even if
those things get across the finish line quickly, it is
still going to take some time before all of those
(06:09):
policies have their effects, just like it took some time
for Biden's bad policies to have their effects. We also
have to grapple with the fact that a lot of
the when it comes to inflation, at least a lot
of the causes don't have immediate effects. So the fact
that the Federal Reserve cut interest rates in what I
think was election interference right before the election to try
(06:30):
to get their preferred candidate across the finish line. They
came in with these emergency rate cuts. That is not
going to have an immediate impact on inflation. It's going
to take many, many months, and so there are inflationary pressures.
You can say it's already baked into the cake for
this year for twenty twenty five based on what the
Federal Reserve was doing last year. Same thing with all
(06:51):
of the runaway spending that Biden continued throughout up until
the very end of twenty twenty four. You know, that
is going to continue to have an inflationary effect this year.
So now it's just a question of how quickly can
they get these regulatory reforms done, how quickly can they
increase energy production, because at least for the first year
or two, all of those positive effects are going to
(07:14):
be at loggerheads with the negative effects that are really
the leftovers from the Biden administration.
Speaker 1 (07:22):
You know, and you look at cutting spending. I mean,
I think things like doge It's it's a great idea,
and I think it's a positive sign. You know that
he wants to task people like Elon and Vivey to
try to cut spending and to try to do some
government reforms and rain and in a bit, you know,
the challenge is just because of how astronomical or debt is.
(07:43):
You know, even if you talk about two trillion dollars,
I mean we're really just talking about like servicing that
debt with that kind of money, right Like, it's like
that's how deep in the hole we have gotten as
a country financially.
Speaker 3 (07:55):
At least one hundred percent. You're spot on here. I mean,
it is so incredible bad today that it is costing US.
I mean, in the month of December, it costs US
one hundred and forty billion dollars just an interest on
the debt. That's not a dime towards principle, that's just
the interest. It's like when your credit card comes in
after you've maxed out your credit card and all you
(08:15):
can afford is just the minimum that covers the interest,
and you can't actually pay down the principle at all.
That's where we are essentially as a country. Sixty six percent,
so essentially two thirds of every dollar paid in personal
income taxes in the month of December went just to
interest on the debt. It didn't go to building roads
(08:37):
or bridges, or hospitals or schools. It didn't fund the military,
it didn't go to pay Social Security recipients. It went
just to interest. And what's really incredible here is the
fact that in the month of December, that's just the
latest data we have available, that was interest on the
debt that was the largest line item in the entire
(08:58):
monthly statement from the Apartment of the Treasury. I mean,
it's incredible. It is more than the Social Security Administration,
it is more than the Department of Health and Human Services.
It is more than all military spending combined. We are,
if we're lucky, going to spend about one point two
trillion dollars in twenty twenty five just in interest on
the debt, just to service the darn thing. I mean,
(09:21):
we are in a very very tight spot, and not
to get too far into the weeds here, but we
keep seeing the yields on treasuries go higher and higher.
That's essentially. That essentially means that if people are going
to hold a treasury, they're demanding that they get a
higher and higher interest rate from the treasury. So the
(09:41):
Treasury is going to sell this debt at an auction,
and the only way they can get people to buy
it is if they're paying very very high interest rates
compared to where they were a few years ago. A
lot of it is converging at about five percent. Five
percent on thirty six trillion dollars is catastrophic. I mean,
the only reason we're able to survive right now is
because so much of the debt was locked in at
(10:03):
interest rates of two or three percent. But that is
slowly all coming due, and when it comes due, we
don't have any money to pay it off, we roll
it over. Going back to that credit card example, Lisa,
imagine if you maxed out a bunch of credit cards
and when you finally have to start making payments on them,
after like an initial like an introductory low rate APR
or something like that, you all of a sudden have
(10:24):
to start making payments and you can't, so you open
up new credit cards and just transfer the balance. That's
basically what we're doing with the national debt right now.
And the problem is again you're getting rid of a
two or three percent interest rate and now you're at
five percent. This is a big reason why the cost
to service the debt is absolutely exploding and it's getting worse,
(10:47):
particularly because Janet Yellen has been engaging, to put it mildly,
financial engineering of treasury markets, which had the positive effect
initially of keeping certain costs to the treasury down and
also increasing liquidity in financial markets. So it kind of
had the same effect as if the Fed was lowering
(11:07):
interest rates and printing money and handing it out throughout
the economy. But now the bill is coming due, and
now the incoming Treasury secretary is going to have to
undo everything that Janet Yellen did, which is going to
cause yields to go up even more. It's going to
cause the cost to service the debt to go up
even more. It's going to cause a lot of tighter
financial conditions within markets. In other words, it's going to
(11:29):
have all these bad effects that should have happened last year.
But Yellen was essentially playing politics with treasury markets again
in order to try to keep things together before the election.
But now that the elections behind us, you know, all
bets are off.
Speaker 2 (11:46):
We've got more with EJ.
Speaker 1 (11:47):
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(12:09):
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Speaker 3 (13:06):
As.
Speaker 1 (13:06):
If you look at this Golden era, this golden age
for America, I think, what do you think that looks like?
Speaker 2 (13:14):
And you know what steps would you.
Speaker 1 (13:17):
Like to see the Trump administration take to get us there?
Speaker 3 (13:21):
Well, the Golden Era was a period where we had
not only our fastest rates of economic growth, but they
were sustained rates of economic growth, so it wasn't simply
a one off. You know, in the Reagan years they
managed something like twelve percent annualized GDP growth for about
eighteen months, but that was it. Now you you had
decent growth on average the rest of Reagan's presidency, but
(13:44):
that peak was only sustained for about a year and
a half. During America's Golden Age, that those peaks were
sustained for much much longer. And if we look at
you know, what was what was the winning formula during
that time, you essentially didn't even have a regulatory state.
Regulations that were put in place were incredibly mild compared
to what you have today. This is where you mentioned DOGE.
(14:06):
This is where DOZE is going to be incredibly vital
because they'll help identify not just where spending is being wasted,
but where regulations are imposing undue burdens on the American
people and on American manufacturers and other producers. So dose
will be really important there. I'm very, very hopeful with
the people who are getting appointed to Ohira Casey Mulligan,
(14:30):
who's going to be kind of the deregulatories are. He'll
be at the SBA. He's a great, great economist, University
Chicago professor. He wrote a paper not that long ago
explaining how during the first Trump administration their regulatory reforms
actually saved the average American family about twenty five hundred
dollars a year per year, So multiply that by four
(14:52):
years and that really adds up over time. Conversely, the
Biden administration has done exactly the opposite. Their regulatory costs
have imposed something like ten or twelve thousand dollars in
new costs on the average American family. That has greatly
contributed to inflation, to the cost of living crisis. And
so undoing all of those bad regulations is going to
(15:13):
help bring down costs for Americans. And again not just
for families, but for producers too, the people who are
trying to bring goods and services to the marketplace. That's
the regulatory regime. What about taxes, Well, there, you didn't
even have an income tax. Sure you had it for
a little bit when it was a temporary wartime measure,
but it was quickly ruled on constitutional It's not until
(15:34):
nineteen thirteen where the Constitution actually has to be amended
where they can reimpose any kind of income tax and
make a actual long term statute. So you didn't have
income tax, where did the government get all its money tariffs?
I can't stand lee. So all these so called economists
out there who are screaming from the rooftops the tariffs
are somehow going to crash the economy. They didn't during
(15:57):
first Trumps. During Trump's first term, excuse me, and Biden
said that all these tariffs were terrible, except he's had
four years to revoke them all and he hasn't. He's
left them in place because they're not doing any harm
at all. In fact, they're a net benefit. And during
America's Golden Age, the government funded itself almost exclusively on tariffs,
(16:17):
and what we saw was not a collapse of the economy,
but again some of our highest sustained growth rates ever
in our nation's history. And I really love this latest
proposal from the President, where we already have an IRS,
and he says, you know, for too long the IRS
has been burdening Americans. We need an ERS, an external
revenue service that's going to help collect all of these
(16:40):
taxes from foreigners, from foreign producers, for example. And we
do have something like that right now in the Bureau
of Customs and Border Protection, but that has other duties.
And I would really love to see an agency that's
going to spearhead this tariff effort and also non tariff
barriers and will also keep track of foreign currency markets.
(17:03):
The reason that's so important, Lisa, is because you have
bad actors like China who are constantly manipulating their currency.
They're doing it right now in spades where they're purposely
devaluing their currency faster than other nations. And what that
does is essentially give their producers an unfair advantage because
the way the currency markets work in exchange rates, it
(17:26):
makes their goods artificially cheaper, and so our domestic producers
are unable to compete with their Chinese counterparts. And one
of the things that the Trump administration had started doing,
but the Treasury Secretary at the time just I guess
didn't have his heart in it or whatever. He never
really fully pursued this idea of currency manipulation by China.
(17:47):
I think Scott Bessant, the incoming Treasury Secretary, is going
to pay attention to it. I think the Trump administration
broadly will, and they will make an effort to penalize China,
in other words, impose tariffs to counteract the devaluing of
the Chinese currency. And this is where I would love
to see all of these measures rolled back under the
(18:08):
Treasury Department in what used to be called the custom service,
and I think this ers would go a long way
in making in making all of that happen, in really
protecting the American producer from this unfair competition around the world.
And the other thing that we need to be I
think very aware of, Lisa, is the fact that you
(18:29):
do have a lot of nations today that have tariffs,
except they just don't call them that. Europe has a
tax regime where you have all kinds of measures like
value added taxes that because of the way they're structured
there end up imposing what is the equivalent of a tariff.
(18:49):
And so if they're going to do that, then we
should do the exact same thing to them. Why should
their producers have an unfair advantage over American producers. This
is a big part of why it is so hard
to make anything here. We literally, because of the differences
in tax codes, give unfair advantages to people making things overseas.
(19:12):
We actually provide an incentive, Lisa, in our own tax
code for a manufacturer to close up shop here in
the United States, to fire all of the Americans working
for him, and to move his factory to Canada, to Mexico.
He doesn't have to go to China. He can just
go right over the border and stay in North America
and still get that what I think is an unfair
(19:33):
tax advantage, and it's time for that to end.
Speaker 2 (19:37):
What do you make of tariffs?
Speaker 1 (19:39):
I mean, it seems that Trump, President Trump has been
able to use them in the past pretty successfully in
trying to, you know, push people in the direction that
he would like. And you know, it is clear that
that is going to be a big part of this
incoming administration in his next four years.
Speaker 2 (19:58):
So what do you make of taris It might for them.
Speaker 3 (20:02):
Sure, sure, At least I part ways with a lot
of my fellow economists in this regard because I just, frankly,
with all due respect, some of them are very bright,
but I don't think they've thought through this issue very well.
You know, they talk about how they're for free trade, Well,
what does that mean. You're talking about free trade as
if trade only happens on the international market. What about
(20:22):
the domestic market. If you're really for free trade, then
you should be fighting for the elimination of sales taxes
here at home. That's a tax on a domestic transaction,
and so is income tax. Income taxes a tax on
the exchange of labor for an income for money. So
if you're going to be for free trade, then why
(20:43):
are you okay with taxing domestic income, with taxing domestic sales.
It doesn't make any sense except that's where we're at today,
and it's as if we just have these blinders on
among so many so called conservative economists where they say, Okay,
we're going to be for getting rid of all taxes
(21:03):
on international transactions and we're just going to rely on
taxes of domestic transactions to finance the government. It makes
no sense, especially when you consider the fact that our politicians,
our lawmakers should be about America first. They should be
putting Americans first. And so why is it we're going
to only tax Americans, especially when America provides so many
(21:27):
benefits for the rest of the world. And what tariffs
do is they help shift some of what we call
tax incidents, which is not who is tax but who
actually pays the tax. They help shift some of that
tax incidents off Americans and onto the rest of the world.
And if we're really going to be about America first,
then that should be a priority. I think that's a great,
(21:47):
great thing and what we saw you mentioned under the
first Trump administration with these tariffs. What we saw then
was for every dollar on average, for every dollar of
tariffs that Trump imposed on China these producers, eighty one
cents was actually paid for by those Chinese producers. Only
nineteen cents on the dollar was actually paid for by
(22:10):
Americans in the form of higher prices. And a lot
of that has to do with the fact that if
the Chinese producers ended up just raising their prices and
passing the full freight onto American consumers the full cost
of that tariff, then American consumers would simply buy it elsewhere.
We saw this with Chinese steel. They could only raise
(22:30):
their prices a little bit because if they raised them anymore,
then Americans would just buy their steel from American steel companies.
They would buy them from even other overseas companies like
in Sweden, for example. That was a big source of
competition with Chinese steel, especially after these tariffs. And so
this idea that somehow we're going to impose attacks on
(22:52):
Americans exclusively, I'm sorry, but both the theory and the
record of history say that that is completely wrong. And
again we need to get away in my opinion, we
need to get away from this mentality of thinking that
free trade only applies to the international marketplace. If we're
going to make any marketplace free trade truly free, I
(23:14):
would much rather we start with America first and we
make all of our domestic markets free of taxes before
we worry about anything abroad.
Speaker 2 (23:24):
You know, we've already seen that.
Speaker 1 (23:27):
You know, the National Federation of Independent Business UH said
that it's small business Optimism index has increased since Donald
Trump has taken office. It's searched the highest level in
just over six years in December. What does that mean
for the economy as well? Just with you know, small
(23:50):
businesses and businesses in general, uh, just being more enthusiastic
about these next four years.
Speaker 3 (23:57):
Uh.
Speaker 1 (23:57):
You know, the deregulation that we've talked about. How much
of an impact does that have on the economy.
Speaker 3 (24:03):
Oh, tremendously, is really really tremendous impact, especially when we
consider that small business is really the driver of the economy.
That's where you know, that's where you see the big
gains in employment. That's where you see the big providers.
I'm not talking about big providers in terms of a
single small business has a huge volume of factory orders,
(24:26):
but when you combine small business together, that's the biggest
source of production. In fact, even a retailer like Amazon,
they get more than half of all the stuff they
sell from small business. It's not as if it's all
just mega corporations on there. Obviously, Amazon is a mega corporation,
(24:47):
but in a way they're really just fulfilling a middle
man role of getting consumers and small businesses together because again,
more than half of what they sell is from small businesses.
What we're seeing beeing in terms of that increase in
optimism that you mentioned, the increase in December that brought
us to that six year high, You're absolutely right that
(25:07):
was built on the huge increase that we saw in November.
In fact, that increase we saw in November is the
largest since November of twenty sixteen, when Trump won the
first time around. And those are the biggest single monthly
gains in the history of the index. So that gives
you an idea. I think of how much small businesses
(25:29):
value the Trump agenda of what they are anticipating, and
if we delve into that survey as well as others,
what we find is that people are anticipating a much
more favorable tax and regulatory regime under Trump. They're looking
forward to much lower energy prices. They're looking forward to
(25:49):
a better competition i should say, a more competitive environment
in the sense that they think they'll be more able
to compete with foreign counterparts. A lot of that has
to do with the tariff discussion that we just had.
And again this is not simply a single survey of
small businesses in the country. What we find when we
look at the regional Federal Reserve banks, they do surveys
(26:13):
of both manufacturers and the service industry. We find the
exact same thing. Optimism is through the roof the issue though,
is the fact that although they expect future conditions to
be much improved, Lisa, the problem is that current conditions
in all these different surveys continue deteriorating. In other words,
things right now are still getting worse. We saw that
(26:35):
in the most recent inflation data for December, where inflation
rose so much should I should say prices rose so
much faster than incomes in the month of December, that
we saw the average Americans real income fall yet again.
So it's already down like three percent in November in
(26:56):
real or inflation adjusted terms, and then after December it's
down now three point two percent. So again the situation
is bad and it's deteriorating, not a good place to
be in. And all of this future optimism is great,
but future optimism does not pay today's bills, and so
we continue to see Americans fall behind when it comes
(27:17):
to things like credit card debt. We continue to see
the rate of delinquencies and defaults on credit card debt,
on auto loans, all of those things are picking up
student loans that's going to go through the roof really
really fast. The only reason it hasn't been going up
these are the defaults and delinquencies that is is because
the Biden administration conveniently changed the rules on credit reporting,
(27:42):
so they gave essentially a reprieve where if you are
delinquent on your student loans, it's not going to get
reported to credit credit bureaus. Well, that just ended again
very conveniently timed with the election. So now you can
expect in twenty twenty five the rate of loan non
performance or in other words, people not paying on those
(28:02):
student loans, that is going to absolutely go through the
roof as people can't afford to pay their student loans,
something that was already happening, but is finally going to
get reported to credit agencies. So it's not a good
situation where we are right now. But at the same time,
cometh the hour, cometh the man. I think Trump is
the right guy to steer the ship of state through
(28:24):
these troubled waters. I think his energy policy, his immigration policy,
his regulatory policy, his tax policy. I think all of
these are the winning formula that we need. It's just
that we're going to be coming at this from a
very very low level, and it's going to take time
for us to climb back to where we were when
Biden took office. It's not that it's not going to happen.
(28:46):
It's not that it's not doable. It's just that it's
going to take a lot of work.
Speaker 1 (28:50):
We've got to take a quick commercial break. More with
EJ and Tony on the other side. I quoted you
when I was on air now two long ago on
Outnumbered and we were talking about the H one B
visa discussion that really kind of took fire on social media,
particularly on X and you said this near a quote
(29:12):
you said over the last year, Native born Americans have
lost almost eight eight hundred thousand jobs. Well, foreign born
workers have gained over one million jobs. The US labor
market is turning into a temp agency for foreign workers
and government bureaucrats. How has the influx and the incoming
of legal aliens and immigrants to the United States shaped
(29:38):
the workforce and what does that mean for Americans?
Speaker 3 (29:42):
Well, great, great questions, and you're absolutely right with the
numbers there. We literally have fewer Americans working today, Lisa,
than we did before the pandemic. So over the last
five years, Americans have lost ground. I mean, that's terrible,
especially when you consider the fact that the population has
gone up. It's not as if the American population is
(30:04):
collapsing here. And yes, I understand that people are retiring,
but even once you take those retirees into account, you
still have a lower labor force participation rate, and even
among the prime age in other words, the people who
are in their peak working years, if you want to
call it that. The only reason why that is up
(30:26):
is because that includes foreign labor. So it's not as
if Americans are the ones getting all of these jobs
that Biden keeps talking about. It's foreign workers. Their employment
is up over three and a half million now again
compared to pre pandemic. So why are Americans so unhappy
with the labor market. It's because they're not the ones
(30:46):
getting the jobs. And instead, what we have seen, in
large part because of this administration's crazy immigration policies, has
been corporations being able to rely heavily on cheap foreign labor,
much of which is actually under the table. And what's
interesting is that even the Biden administration admits on the
(31:09):
Bureau Labor Statistics website that their their category of foreign
born workers includes an unknown number of illegal aliens. And
so you can't tell me that this is just all
you know, people coming here legally, you know, with H
one B visas or whatever the case may be. No,
a huge part of this has to has to do
(31:31):
with the influx of cheap illegal labor essentially coming into
this country. And that's part of the reason why when
we break out wage growth among different cohorts, you can
see that low skilled or unskilled labor that has that
cohort has seen some of the worst wage growth over
the last four years, because that's where you're getting the
(31:52):
massive increase in supply. Well, the you know, if you
increase supply, you decrease price. That's econ one on one
the price of labor. We call that wages. So there
you go. And one of the things that this administration
is going to have to do is not just seal
up the border and stop that flow of illegal immigration,
not just deport the illegals who are already here. But
(32:15):
on top of that, they're going to have to consider
some serious reforms of programs that you mentioned, Like, they're
going to have to really look at H one B
and they're going to have to think, Okay, is this
program actually doing what we want it to do? Well,
what do we want it to do. We want it
to attract the best and brightest, literally from around the world.
(32:35):
We want anybody who is productive, highly productive, who can
add to society. We want those people to come here
to the United States. We want them to add to
our society. We want them to increase production here because
that benefits Americans. That increases real wage growth across the
(32:55):
income scale, That increases the standard of living. It brings
down the cost of living by having those highly skilled
professionals here in America. By the way, this does nothing
for me, right, I want to import more PhDs, not
people who didn't even graduate high school, people who have
little to no skills. I want more people here who
(33:17):
are going to compete with folks like me. This is
not going to help my wage growth, but you know
who it is going to help, Lisa. It's going to
help the average American. It's going to help the guy
who's starting his career, the guy or gal who doesn't
yet have any skills, but they're getting their first job
where they're going to acquire some skills. They're going to
learn things like how to deal with the boss, with coworkers,
(33:38):
with customers, how to show up on time. They're going
to show leadership skills, they're going to learn entrepreneurial skills,
all of these things that you get on the first job.
That's your first rung on the ladder of success. But
you cut out that wrung on the ladder of success
when you force Americans to compete with illegal labor at
(33:59):
wages which they can't compete. And so again, it doesn't
even matter if this person is ultimately going to end
up as high skilled labor or continue their whole career
as relatively low skilled labor. And that's fine. People can
still make a good living that way, provided you have
a labor market that's structured in a manner which allows
everyone to succeed. And so that again, that's going to
(34:21):
involve looking at programs like the H one B visa
and saying, all right, we need to reform this in
such a way that it attracts the best and the
brightest only and so that companies can't abuse it. And
there have been lots of ideas floated which have garnered
a lot of attention by folks like Elon Musk and
Vivek Ramaswami. You know, that has sparked a whole bunch
(34:44):
of different discussions on platforms like x and elsewhere in
the media. You know, some of which some of those
discussions you yourself have had with people, Lisa, And at
the end of the day, we need again to make
sure that our immigration system doesn't serve the rest of
the world, should serve Americans, because again, this is America
(35:04):
and we're about America first. Now, the other part, if
I may, of that quote that you mentioned was the
fact that we're turning the labor market into something that
serves foreign labor, but also it's a temp agency and
it's serving government bureaucrats. The reason that that temp agency
component is in there is that if we look at
(35:26):
in the labor market right now what's going on with
full time work versus part time work. We are absolutely
hemorrhaging full time jobs. In fact, if you look at
where we were in December again that's just the latest
data we have right now, the economy was down one
point three million jobs compared to June of twenty twenty three.
(35:47):
So over the course of a year and a half,
we hemorrhaged one point three million jobs. So where did
all the job growth come. It has literally all been
part time work. All net job growth in the last
year and a half, think of that has all been
part time jobs. A lot of that has to do
with people losing their full time work and having to
replace it with multiple part time jobs. This is why
(36:10):
you're increasing the number of jobs without actually increasing the
number of people who are employed. In fact, what you
just saw again in the month of December was the
number of people employed was down almost a quarter million
over the last thirteen months. I mean, these are terrible,
(36:30):
terrible numbers. And then finally, the other thing mentioning the
government bureaucrats over the course of last year, the number
of people in government surveys who reported that they were
now working for the government jumped by almost half a million.
So that plays directly into the unemployment rate, which is
(36:51):
being kept down because of all this hiring by government.
And we have never had so many government jobs in
our nation's history before. And even if we want to
think of things like, okay, what about government jobs as
a percent of the population or as a percent of
total jobs, it is still rising at a very alarming rate.
And on top of that, we also have to remember
(37:12):
that there are a lot of what we would call
private sector jobs LISA that aren't actually paid for by
the private sector. When the government gives a grant to
a hospital, let's say, and that hospital hires a nurse,
or even if they hire a janitor, doesn't matter. That
salary is paid for by the taxpayer. You could call
that an indirect hire by government. So the issue here
(37:35):
is the fact that you need many, many private sector
jobs being added every month to support a single government
job being added that month, and the ratio is probably
at least forty to one. I've seen some estimates that
are a lot higher, that are closer to eighty or
ninety to one, but whatever the case, we are nowhere
near a sustainable ratio right now because about half of
(37:58):
all job growth that we've seen over the last year
was either a direct or indirect hire by the government.
In other words, about half of all our job growth
was someone being whose salary is paid for by taxpayer dollars.
That is completely unsustainable.
Speaker 1 (38:13):
Absolutely, EJ and TONI, I appreciate your time, Thanks so
much for coming on the show and look forward to
having you back one and hopefully a discussion about things
going right and continuing to go right. So appreciate your time.
Speaker 3 (38:25):
Here's hoping, Lisa, thank you very much for having me.
Speaker 2 (38:29):
That was EJ.
Speaker 1 (38:30):
And Tony with the Heritage Foundation. Appreciate him for making
the time. Appreciate you guys at home for listening every
Monday and Thursday, but of course you can listen throughout
the week on to Thank John Cassio, my producer, for
putting the show together.
Speaker 2 (38:41):
Until next time,
Host
Lisa Boothe
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