Surely the steel tariffs would raise construction costs if they stay in place. We ask economist and money wiz David Bahnsen if or how that might hinder solving the housing inventory crisis.
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Speaker 1 (00:00):
Previously on Your Morning Show with Michael dil Chuno.
Speaker 2 (00:04):
Well, terrifs are going into effect, the effect if they
stay in place on steel and on construction, or ultimately
even our ability to solve the housing crisis. David Bonson
is our economist and money was joining us. David, that's
my concern how this could all play out and affect
all the building we need to do to increase housing
inventory area of concern.
Speaker 3 (00:28):
It's not the biggest area.
Speaker 4 (00:30):
When I mean, steel and aluminum are inputs, but they're
less so than obviously with housing things like lumber. It's
aluminum is really used in so many different elements of
day to day life that I don't think people even
realize that.
Speaker 3 (00:45):
Here's the economic fact.
Speaker 4 (00:48):
Basically, our consumption of aluminum is about seventy times greater
than our production of aluminum, our domestic production, and so
the you know, taxing imports on something that way more
people consume is just a transfer tax. You're basically just
saying we're going to subsidize American producers and we're going
(01:11):
to make American consumers pay for it.
Speaker 2 (01:13):
All right, So yesterday the left and they're in I
don't play left versus right, I play right versus wrong.
But it's obviously the politics is taking place and the
left is choosing to play the obstruction card, whether it's
our FK, whether it's Doge. You know, that's all they're doing.
So the narrative came forward on the egg that there
(01:34):
was a sense of blaming Donald Trump for the price
of eggs. Donald Trump has been president twenty one days.
These are prices of eggs over the last three hundred
the year. The year, so you're talking about Joe Biden
being president three hundred and forty of those days, donald
Trump twenty one of those days. But they're they're trying
to pin inflation and the economy now on Donald Trump
(01:57):
and he's only been there twenty one days. It begs
the question, can you imagine that?
Speaker 4 (02:01):
Can you imagine the horror of somebody doing that, trying
to blame the person who's president. So what's going on
in the economy? What kind of partisanship is that since
the beginning of time? But here's the serious question.
Speaker 2 (02:12):
So the things that Donald Trump is doing, and I
think the things, knowing you that you're liking, is whether
it's better trade deals, whether it's creating more things and
manufacturing or at tracking manufacturers back to the United States.
What we need is to produce things that create jobs,
produce things in the economy. That's the ultimate. I mean, yeah,
(02:34):
you can cut spending and that's good, more jobs, people
burden less with lower taxes. That's good for funding government
and lowering deficits. But ultimately we've got to create some things.
How long before we see the things Donald Trump's doing
today translating to a better economy.
Speaker 3 (02:51):
Well, it's going to be a while.
Speaker 4 (02:52):
I mean. The biggest thing they have to do that's
going to lead to producing more things as a tax reform,
and they haven't got to that yet. Keep in mind,
I do not believe it is true whatsoever that teriffing
imports produces more things. What it does is it punishes
one part of the economy while hurting another while helping another.
(03:13):
And so that is in the way we're going to
get an aggregate production increase.
Speaker 3 (03:18):
We're just going to switch the distribution.
Speaker 4 (03:21):
If they go forward with some of that, which I
don't believe that they will.
Speaker 2 (03:25):
Right it could just be a negotiating tactic. That's how
it's been playing out so far.
Speaker 4 (03:30):
Yeah, people talk about the steel and aluminum terraff in
twenty eighteen. He backed off of those after six months.
But when people say, well that might cause us to
produce more steel and aluminum in America, that'd be a
good thing. The issue is that I just said there's
seventy times more aluminum consumption. We have a significant amount
of people that import aluminum and then they have to
(03:51):
go make things with the imported aluminum and their production
goes down. Domestic people, their production goes down. It just
switches for one sector to another. The area I'm really
excited about is on deregulation, and I think that produces
more things. Is getting rid of Consumer Financial Protection Bureau.
I have a podcast that just went up today, my
(04:13):
weekly podcast, Capital Record, where I hammer the Consumer Financial
Protection Bureau because of its complete total failure to actually
protect consumers. But see, this all gets down to production,
which is what you're asking me about. When you have
a financial system that is so overly regulated, it discourages
the flow of capital. When you waste resources on just
(04:34):
absurd regulatory requirements and pacifying a bureaucracy that hurts production.
Speaker 3 (04:41):
So there's a lot of things he's.
Speaker 4 (04:42):
Doing and are going to do they're going to be
beneficial there, but they take a while to work through
the system. But unfortunately, and this is true of anybody,
but it's particularly true a President Trump. I've never believed
that one hundred percent of his policies are things I
ought to be supporting. There's a lot of there's so
many great things going on, but then there are other
things that get in the way, and you have to
kind of net it all out economically. But yeah, I
(05:05):
mean the tax reform thing, Michael, I can't say this enough.
They cannot leave that thing unaddressed because there is no
possible way significant capital expenditures and business decisions get made
when people grow, and their uncertainty as to what's going
to be happening with the tax.
Speaker 2 (05:21):
Code, does it strike you as it's far off. I mean,
when I look at the list of things that could
be done by the end of thirty days, I'm not
so certain. We're waiting till June on these tax cuts. Well,
they can't get it done in thirty days.
Speaker 3 (05:36):
I never thought they could. But what they don't have.
Speaker 4 (05:38):
Yet as we get close to thirty days is the
plan as to how they're going to get it, And
that's understandable because it is complicated and this is not
Trump's fault. He's asked Congress, he's asked the Houses the
Senate to figure it out. And you have kind of
two different approaches within the legislative branch as to what
they think is best between one bill and two bills,
(05:59):
and there's pros and cons to each. But until they
get clarity as to what they're going to be able
to do with one bill, Secretary Best and encouraged me
a lot last week because he's demanding did they do
this with a policy baseline of the current policy and
what that means, Michael is using what the current tax
rates are as your baseline.
Speaker 3 (06:21):
For how it's going to go forward.
Speaker 4 (06:23):
There's something that say, well, we think you're going to
get rid of the twenty seventeen tax cuts. We want
you to act as if those have come back in
the way you would assess the deficit.
Speaker 3 (06:33):
It's four trillion dollars difference.
Speaker 4 (06:35):
And if they do that, then that means they have
four trillion dollars last of tax cuts they can do
over ten years.
Speaker 2 (06:41):
David Bonson with the Bonds and Financial Group, I think
I first was exposed to had to be Fox Business, Right,
is that the one you were always on? I think
it was Fox Business. I never keep track of the networks,
so you're obviously an expert at following the market as well.
How does the market process this much change this fast?
And then when we start talking about like negotiating styles,
(07:03):
you know, the market couldn't react to the Panama threat
because that was resolved in a matter of days with
free shipping, and the Mexico and China was resolved in
less than two hours before it was even enacted. So,
but how does market follow these kinds of things and
react to these things or is it all built in
(07:24):
or they wait till they see how it shapes out.
Speaker 3 (07:28):
Well, again, this is a theological answer.
Speaker 4 (07:30):
Markets are essentially the sum total of trillions of activities, transactions, thoughts,
assumptions coming from billions of people that.
Speaker 3 (07:39):
Were all made by God with reason and rationality.
Speaker 4 (07:43):
And when you get all these things factored in together,
it had moves at the speed of light, and markets
tend to price things very quickly. But markets also tend
to not react to things that they learned not to
react to. So like when markets were up one hundred
and fifty points some Monday after the aluminum steel terrafs,
people said, what's going on here? I said, markets don't
take it seriously. Even if it goes on, they think
(08:04):
it's going to go away, and so you lose, you know,
markets lose their ability to be moved by certain things
after time because markets are really quite efficient that way.
So yeah, there's a lot to price in. But what
markets can never price in is what it doesn't know.
You can't discount things that are just simply unknowable. And
there's a lot that's unknowable, but there's also a lot
(08:25):
that we do know. What we do know is that
corporate profits are growing. We do know that unapployment is
right around four percent, where it's been a long time.
Speaker 3 (08:34):
You know what markets don't.
Speaker 4 (08:35):
Usually move a lot by is political noise, right, you know,
so the idea. I look, I am a diehard, lifetime
Reaganite conservative who has never voted for a Democrat in
his life. But I spent a couple of years just
utterly amused by Republicans acting like every single price move
was Joe Biden's fault.
Speaker 3 (08:54):
But I also knew they didn't really believe it either.
Speaker 4 (08:56):
They did because they became so hard to stand or
they didn't believe. But it's just part of the game. Yeah,
idea that they're going to take. They're going to take
egg prices and put it on Trump. Now that's the
way the game is played. Sorry, that's what happens.
Speaker 2 (09:09):
David Bonson Bonson Financial Group. Don't if you love our
visits weekly, you need to check out Capital Record Podcast.
Where would they They find that? Pretty much everywhere?
Speaker 4 (09:20):
Right, But yeah, it's all Apple, Spotify, all that. It
hosted my national view. But David Bonson's Capital Record Podcast.
Speaker 3 (09:27):
You know what I do. It's only about twenty minutes
an episode.
Speaker 4 (09:30):
I try to take a theological approach, a philosophical approach.
Speaker 3 (09:33):
To realize things happening in the economy.
Speaker 4 (09:35):
So I took on the Consumer Financial Protection Bureau today.
I gave my whole approach on RFK because I'm a
big opponent of a lot of what's gone on there,
and so I tried to talk about what we were
supposed to think about big pharma from a more first
principles base, and so those types of topics I cover
week by week and it might be interesting. I was
(09:57):
able to get it down about twenty minutes an episode.
Because people my three and a half hour episodes.
Speaker 2 (10:04):
I can't get enough. If you love the weekly visits
like I do, you're gonna love David Bonson's Capitol Record podcast.
Check it out everywhere great podcasts. Are you on iHeart?
We need to get you on iHeart if you're not,
and we'll talk again. Actually next Thursday you're off, we'll
talk in two weeks. I think I'll see you maybe
even between now and then. David Bonds is correct on
both counts. By the way, you never respond I said,
(10:24):
I warned you. I'm Italian, I'm a hugger. I love you.
This is a big deal for me to finally meet
you in person, and thank you for being a part
of this show every week. If you're uncomfortable with hugs,
you better you better duck or run really fast, because
you're gonna get a big one.
Speaker 4 (10:40):
Mate.
Speaker 3 (10:40):
I've been I've been around a while. I can handle
anything you got. I'm a person. We're gonna have a
good lunch.
Speaker 4 (10:46):
It's gonna make even better episodes together in the future.
Speaker 2 (10:49):
Hi, I pray so all right, David Bonson, thank you
for your time as always.
Speaker 1 (10:52):
Miss a little, miss a lot, miss a lot, and
we'll miss you. It's your morning show with Michael del
Chruno
Previously on Your Morning Show with Michael dil Chuno.
Speaker 2 (00:04):
Well, terrifs are going into effect, the effect if they
stay in place on steel and on construction, or ultimately
even our ability to solve the housing crisis. David Bonson
is our economist and money was joining us. David, that's
my concern how this could all play out and affect
all the building we need to do to increase housing
inventory area of concern.
Speaker 3 (00:28):
It's not the biggest area.
Speaker 4 (00:30):
When I mean, steel and aluminum are inputs, but they're
less so than obviously with housing things like lumber. It's
aluminum is really used in so many different elements of
day to day life that I don't think people even
realize that.
Speaker 3 (00:45):
Here's the economic fact.
Speaker 4 (00:48):
Basically, our consumption of aluminum is about seventy times greater
than our production of aluminum, our domestic production, and so
the you know, taxing imports on something that way more
people consume is just a transfer tax. You're basically just
saying we're going to subsidize American producers and we're going
(01:11):
to make American consumers pay for it.
Speaker 2 (01:13):
All right, So yesterday the left and they're in I
don't play left versus right, I play right versus wrong.
But it's obviously the politics is taking place and the
left is choosing to play the obstruction card, whether it's
our FK, whether it's Doge. You know, that's all they're doing.
So the narrative came forward on the egg that there
(01:34):
was a sense of blaming Donald Trump for the price
of eggs. Donald Trump has been president twenty one days.
These are prices of eggs over the last three hundred
the year. The year, so you're talking about Joe Biden
being president three hundred and forty of those days, donald
Trump twenty one of those days. But they're they're trying
to pin inflation and the economy now on Donald Trump
(01:57):
and he's only been there twenty one days. It begs
the question, can you imagine that?
Speaker 4 (02:01):
Can you imagine the horror of somebody doing that, trying
to blame the person who's president. So what's going on
in the economy? What kind of partisanship is that since
the beginning of time? But here's the serious question.
Speaker 2 (02:12):
So the things that Donald Trump is doing, and I
think the things, knowing you that you're liking, is whether
it's better trade deals, whether it's creating more things and
manufacturing or at tracking manufacturers back to the United States.
What we need is to produce things that create jobs,
produce things in the economy. That's the ultimate. I mean, yeah,
(02:34):
you can cut spending and that's good, more jobs, people
burden less with lower taxes. That's good for funding government
and lowering deficits. But ultimately we've got to create some things.
How long before we see the things Donald Trump's doing
today translating to a better economy.
Speaker 3 (02:51):
Well, it's going to be a while.
Speaker 4 (02:52):
I mean. The biggest thing they have to do that's
going to lead to producing more things as a tax reform,
and they haven't got to that yet. Keep in mind,
I do not believe it is true whatsoever that teriffing
imports produces more things. What it does is it punishes
one part of the economy while hurting another while helping another.
(03:13):
And so that is in the way we're going to
get an aggregate production increase.
Speaker 3 (03:18):
We're just going to switch the distribution.
Speaker 4 (03:21):
If they go forward with some of that, which I
don't believe that they will.
Speaker 2 (03:25):
Right it could just be a negotiating tactic. That's how
it's been playing out so far.
Speaker 4 (03:30):
Yeah, people talk about the steel and aluminum terraff in
twenty eighteen. He backed off of those after six months.
But when people say, well that might cause us to
produce more steel and aluminum in America, that'd be a
good thing. The issue is that I just said there's
seventy times more aluminum consumption. We have a significant amount
of people that import aluminum and then they have to
(03:51):
go make things with the imported aluminum and their production
goes down. Domestic people, their production goes down. It just
switches for one sector to another. The area I'm really
excited about is on deregulation, and I think that produces
more things. Is getting rid of Consumer Financial Protection Bureau.
I have a podcast that just went up today, my
(04:13):
weekly podcast, Capital Record, where I hammer the Consumer Financial
Protection Bureau because of its complete total failure to actually
protect consumers. But see, this all gets down to production,
which is what you're asking me about. When you have
a financial system that is so overly regulated, it discourages
the flow of capital. When you waste resources on just
(04:34):
absurd regulatory requirements and pacifying a bureaucracy that hurts production.
Speaker 3 (04:41):
So there's a lot of things he's.
Speaker 4 (04:42):
Doing and are going to do they're going to be
beneficial there, but they take a while to work through
the system. But unfortunately, and this is true of anybody,
but it's particularly true a President Trump. I've never believed
that one hundred percent of his policies are things I
ought to be supporting. There's a lot of there's so
many great things going on, but then there are other
things that get in the way, and you have to
kind of net it all out economically. But yeah, I
(05:05):
mean the tax reform thing, Michael, I can't say this enough.
They cannot leave that thing unaddressed because there is no
possible way significant capital expenditures and business decisions get made
when people grow, and their uncertainty as to what's going
to be happening with the tax.
Speaker 2 (05:21):
Code, does it strike you as it's far off. I mean,
when I look at the list of things that could
be done by the end of thirty days, I'm not
so certain. We're waiting till June on these tax cuts. Well,
they can't get it done in thirty days.
Speaker 3 (05:36):
I never thought they could. But what they don't have.
Speaker 4 (05:38):
Yet as we get close to thirty days is the
plan as to how they're going to get it, And
that's understandable because it is complicated and this is not
Trump's fault. He's asked Congress, he's asked the Houses the
Senate to figure it out. And you have kind of
two different approaches within the legislative branch as to what
they think is best between one bill and two bills,
(05:59):
and there's pros and cons to each. But until they
get clarity as to what they're going to be able
to do with one bill, Secretary Best and encouraged me
a lot last week because he's demanding did they do
this with a policy baseline of the current policy and
what that means, Michael is using what the current tax
rates are as your baseline.
Speaker 3 (06:21):
For how it's going to go forward.
Speaker 4 (06:23):
There's something that say, well, we think you're going to
get rid of the twenty seventeen tax cuts. We want
you to act as if those have come back in
the way you would assess the deficit.
Speaker 3 (06:33):
It's four trillion dollars difference.
Speaker 4 (06:35):
And if they do that, then that means they have
four trillion dollars last of tax cuts they can do
over ten years.
Speaker 2 (06:41):
David Bonson with the Bonds and Financial Group, I think
I first was exposed to had to be Fox Business, Right,
is that the one you were always on? I think
it was Fox Business. I never keep track of the networks,
so you're obviously an expert at following the market as well.
How does the market process this much change this fast?
And then when we start talking about like negotiating styles,
(07:03):
you know, the market couldn't react to the Panama threat
because that was resolved in a matter of days with
free shipping, and the Mexico and China was resolved in
less than two hours before it was even enacted. So,
but how does market follow these kinds of things and
react to these things or is it all built in
(07:24):
or they wait till they see how it shapes out.
Speaker 3 (07:28):
Well, again, this is a theological answer.
Speaker 4 (07:30):
Markets are essentially the sum total of trillions of activities, transactions, thoughts,
assumptions coming from billions of people that.
Speaker 3 (07:39):
Were all made by God with reason and rationality.
Speaker 4 (07:43):
And when you get all these things factored in together,
it had moves at the speed of light, and markets
tend to price things very quickly. But markets also tend
to not react to things that they learned not to
react to. So like when markets were up one hundred
and fifty points some Monday after the aluminum steel terrafs,
people said, what's going on here? I said, markets don't
take it seriously. Even if it goes on, they think
(08:04):
it's going to go away, and so you lose, you know,
markets lose their ability to be moved by certain things
after time because markets are really quite efficient that way.
So yeah, there's a lot to price in. But what
markets can never price in is what it doesn't know.
You can't discount things that are just simply unknowable. And
there's a lot that's unknowable, but there's also a lot
(08:25):
that we do know. What we do know is that
corporate profits are growing. We do know that unapployment is
right around four percent, where it's been a long time.
Speaker 3 (08:34):
You know what markets don't.
Speaker 4 (08:35):
Usually move a lot by is political noise, right, you know,
so the idea. I look, I am a diehard, lifetime
Reaganite conservative who has never voted for a Democrat in
his life. But I spent a couple of years just
utterly amused by Republicans acting like every single price move
was Joe Biden's fault.
Speaker 3 (08:54):
But I also knew they didn't really believe it either.
Speaker 4 (08:56):
They did because they became so hard to stand or
they didn't believe. But it's just part of the game. Yeah,
idea that they're going to take. They're going to take
egg prices and put it on Trump. Now that's the
way the game is played. Sorry, that's what happens.
Speaker 2 (09:09):
David Bonson Bonson Financial Group. Don't if you love our
visits weekly, you need to check out Capital Record Podcast.
Where would they They find that? Pretty much everywhere?
Speaker 4 (09:20):
Right, But yeah, it's all Apple, Spotify, all that. It
hosted my national view. But David Bonson's Capital Record Podcast.
Speaker 3 (09:27):
You know what I do. It's only about twenty minutes
an episode.
Speaker 4 (09:30):
I try to take a theological approach, a philosophical approach.
Speaker 3 (09:33):
To realize things happening in the economy.
Speaker 4 (09:35):
So I took on the Consumer Financial Protection Bureau today.
I gave my whole approach on RFK because I'm a
big opponent of a lot of what's gone on there,
and so I tried to talk about what we were
supposed to think about big pharma from a more first
principles base, and so those types of topics I cover
week by week and it might be interesting. I was
(09:57):
able to get it down about twenty minutes an episode.
Because people my three and a half hour episodes.
Speaker 2 (10:04):
I can't get enough. If you love the weekly visits
like I do, you're gonna love David Bonson's Capitol Record podcast.
Check it out everywhere great podcasts. Are you on iHeart?
We need to get you on iHeart if you're not,
and we'll talk again. Actually next Thursday you're off, we'll
talk in two weeks. I think I'll see you maybe
even between now and then. David Bonds is correct on
both counts. By the way, you never respond I said,
(10:24):
I warned you. I'm Italian, I'm a hugger. I love you.
This is a big deal for me to finally meet
you in person, and thank you for being a part
of this show every week. If you're uncomfortable with hugs,
you better you better duck or run really fast, because
you're gonna get a big one.
Speaker 4 (10:40):
Mate.
Speaker 3 (10:40):
I've been I've been around a while. I can handle
anything you got. I'm a person. We're gonna have a
good lunch.
Speaker 4 (10:46):
It's gonna make even better episodes together in the future.
Speaker 2 (10:49):
Hi, I pray so all right, David Bonson, thank you
for your time as always.
Speaker 1 (10:52):
Miss a little, miss a lot, miss a lot, and
we'll miss you. It's your morning show with Michael del
Chruno
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