If Trump is not improving the economy and we are headed for a recession, then why was the inflation report lower than expected?? We asked economist and money wiz David Bahnsen if this is another media narrative that died of reality.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Previously on Your Morning Show with Michael dil Juno.
Speaker 2 (00:04):
David Bonson is our economist and money wiz joins us
every Thursday. David, how frustrating is it for you, as
an economist and somebody that follows the market to watch
America take its cues from political narratives rather than economics.
One oh one must be hell.
Speaker 3 (00:20):
Well, it's extremely frustrating. It isn't hellish.
Speaker 4 (00:24):
I have a little resilience to it at this point,
but I will say this, it's a bipartisan frustration. And
that's the part that bothers me because I don't expect
a lot some of the last from some of this.
I think politicizing economics is really a core to what
central planners believe in doing. They want a greater role
for the state and that includes an economic administration. So
(00:48):
they want to make something political out of economic issues.
But when the right does it, it bothers me a
great deal.
Speaker 2 (00:56):
Give me some examples about how the right does it.
How are they doing it right now?
Speaker 3 (01:00):
Well?
Speaker 4 (01:01):
The I mean I would say this, I think that
that trying to interpret economic data as always connected to
you know, if it's good data, it's because my president
did it.
Speaker 3 (01:15):
If it's bad data, it's because the other.
Speaker 4 (01:16):
President did it, As opposed to the basic presupposition, the
first level of economic data you assume might have nothing
to do with politics whatsoever. And so I would no
more assume that eggs went up because it was Biden's fault,
then I would assume that eggs go down because it's
Trump's credit. Both things are so preposterous and counterfactual.
Speaker 3 (01:40):
But the only reason one would be tempting to.
Speaker 4 (01:42):
Do so is because of the strong mesionic idolatrous a
ruler of politics.
Speaker 5 (01:49):
Prices of eggs went up because of bird flew right, and.
Speaker 3 (01:53):
I'm pretty sure that's the safe thing to say.
Speaker 2 (01:55):
Yeah, but yeah, but when they politically lay it all
on the line, these narratives, and these narratives keep biting
the dust due to reality. That's the self defeating game
that politicians play, and shouldn't What would you educate the mary?
Speaker 5 (02:09):
I mean, you just saw the inflation report. Did it
surprise you?
Speaker 4 (02:13):
Well, no, because I've been saying for some time that
the numbers that are baked in the CPI are overstating
the real on the ground numbers about rent and shelter,
and that is thirty four percent of the CPI number.
Now that number is showing in the data. It had
been five or six percent, it's now four point one.
And so if you had that at the real numbers
(02:35):
that zero, and real litter and national apartment lists and
some of the real actual market current time data numbers
indicate are more like two to three, then that would
bring the CPI number down to one point nine percent.
Speaker 3 (02:47):
And that's where I believe the real number has been
for some time.
Speaker 5 (02:51):
So not just not just down, down probably even more.
Speaker 3 (02:56):
That's right.
Speaker 4 (02:57):
And the goods inflation in the data is zero percent,
so goods has come down, but services and states stubbornly higher.
Speaker 3 (03:07):
And then you get into things that are not called inflation.
Speaker 4 (03:09):
They're called high prices, meaning, hey, the overall price level
may never going higher, but man, oh man, why is
auto insurance so much higher? Why are used car prices higher?
That's a different story. Then you get to look at why, okay,
like eggs, Okay, why did everything else at the grocery
store go up one percent but eggs went up twenty percent?
Speaker 3 (03:28):
And you can look at the actual causation. People don't
like to do that because we'd like to just talk.
Speaker 4 (03:33):
About inflation monolithically, and that enables us to talk about
it politically.
Speaker 3 (03:37):
And there's times when they should be talking about politically.
Speaker 4 (03:40):
You know, we went we've gone through moments, so politicians
have done things that move the whole price level up.
Right now, Michael, we're clearly going to a period where
expeditions are going lower and growth expectations are going lower.
And I would say, what's a bigger story a modest
moderating of prices or growth expectations collapsing. And that to
(04:03):
me is that's clearly a policy issue around the tariffs
and the trade wars.
Speaker 5 (04:08):
All right.
Speaker 2 (04:08):
Visiting with David Bonson, he's an economist, he is also
a money whiz and when it comes to the market.
That's how I was exposed to him watching Fox Business.
You know, I always say this about the unemployment number.
At the end of the day, I have no use
for it. I mean, I remember we were going through
the big economic challenge of two thousand and eight, two
(04:28):
thousand and nine, you know, and these unemployment numbers were
so misleading because they didn't take into account underemployment or
those who left the workforce. And so at the end
of the day you just throw up your hands and go.
You know, these numbers are just worthless? Are the inflation numbers?
Consumer confidence numbers? Are they becoming just as worthless? And
how do they get there? Why can't we have just good,
accurate economic indicators.
Speaker 4 (04:50):
Well, consumer confidence has always been worthless, and it has
never been a leading indicator. And consumer confidence is just
simply not something that can be measured as a forward indicator.
I don't agree with you, by the way that I
think the unemployment numbers are worthless. I just think that
they're incomplete, which is probably what you mean. Yeah, in
other words, you know, the underemployment number was available. It
just isn't the same thing as the unemployment right, both
(05:13):
data both data points come out every single month.
Speaker 5 (05:16):
They're just put in yours.
Speaker 2 (05:17):
But let's just stop then, do that real quick for
everybody in your world underemployment. I lived in Tulsa, Oklahoma
when Sitko left and Sidco didn't just leave tuls Oklahoma
as the largest employer, left the country and went back
to Venezuela, which was a whole other total economic picture
in terms of energy and jobs. But I saw so
many people losing two two hundred and fifty thousand dollars
(05:37):
a year jobs, and then they were taking ten dollar
an hour call center jobs. That's underemployment. Well that's a
big difference, because then you're not buying the homes that
create such commissions for realtors, or buying cars that pay
such commissions for car salesmen, or paying taxes.
Speaker 5 (05:52):
At this level, I mean, it's night and day. I mean,
it's far more shit helping you.
Speaker 4 (05:57):
There's absolutely no scenario ever, and there was there a
no eight where you're going to get a big spike
in unemployment without also getting a big spike in unemployment
in the two thousand and eight nine and by the way,
ten numbers too, because Obama had to own that there
is easy President Obama had to own that during the
midterms of twenty ten that we were still sitting at
over ten percent unemployment. So you had a big spike
(06:17):
in unemployment, which was itself a factor that as you
point out, infected wages spending activity, but the unemployment number
was significantly higher too, So those two are highly correlated.
The other one you brought up is the bigger deal
of me, which is the label participation for and You're
exactly right. The unemployment number doesn't measure it. But I
just have always said there are two different things in
(06:39):
both of a matter. The unemployment number matters to understand
how many jobs there are. The labor participation force matters
to know how many workers there are.
Speaker 3 (06:49):
And those are two different things.
Speaker 2 (06:51):
Yeah, and we've had more workers than we've had jobs
for a long time. All right, So help my your
morning show family understand all these indicators that are narrativized.
Speaker 5 (07:00):
How do we get those out of our head? And
what do you follow? What should we follow to really
understand where we're at.
Speaker 3 (07:05):
I don't.
Speaker 4 (07:06):
I don't think it's the matter getting the numbers out
of our head. I think the problem starts with us
in the mirror. It's the way we want to think
about the numbers. Hear the numbers, you know, the whole
thing with the news cycle, like where there's a crime
and the left like there's a shooting right, and there's
a political tendency that the left kind of hopes it's
a crazy right winger and right kind of hopes it's
(07:26):
a it's a Jihavis or something.
Speaker 5 (07:28):
So where the problem at? Yeah? Where the problem?
Speaker 3 (07:30):
Yeah? Yeah? I don't. I don't want to hear economic
data if I'm being an on it.
Speaker 4 (07:34):
If I'm going to manage the seventy billion dollars of
money I'm responsible to manage diligently. My clients do not
want me to hear data points and say, hey, how
can I put this in a political narrative?
Speaker 3 (07:46):
The data is not in a political narrative. I'm putting
it in a political narrative.
Speaker 4 (07:50):
That's what I would say to our listeners, that that
there is no need to put in a political narrative
where the data needs interpretation. Then people are going to
use their own no belief system and worldview and what
not to do. So some of it is much more
cut and dry. But yeah, I think it's that knee
jor team plus to want to put it in there.
That's what we have to avoid doing.
Speaker 5 (08:11):
Shameless plug time. Do we have a dividend cafe this week?
Speaker 4 (08:16):
We must certainly do each and every week Friday, and
I will tell you it is one of my favorite
divning cafes. I have an open on my computer right
in front of me here at my hotel in Palm Beach, Florida.
I'm spending a few days at our Palm Beach office
and have been writing it for the last three and
a half hours, and I took a break from my
writing to go live on air with.
Speaker 5 (08:34):
You, sir. What's the topic?
Speaker 3 (08:37):
It is on whether or not Trump no longer cares
about markets? And I'm going to make the.
Speaker 6 (08:42):
Very nuanced argument that that is not a conclusion we
should avoid or a conclusion we should draw, but that
there's a lot going on right now that it feels different,
and I want to unpack it.
Speaker 4 (08:54):
What's going on in the President Trump and the way
he thinks about markets. That's so many Dividing Cafe tomorrow.
Speaker 2 (09:00):
This may or not surprise surprise you, but so many
of my listeners appreciate you so much. Every week I
probably get as many emails about you and david'sanadi as anyone,
and I'm grateful for your time that you give us,
and I encourage everybody. If you want more of our
money with David Bonsen, you can find that at Dividendcafe
(09:21):
dot com.
Speaker 5 (09:22):
Always appreciate you.
Speaker 2 (09:23):
Have a good time, and Wes Palum, we'll talk to
you next week or sooner if conditions weren't.
Speaker 1 (09:27):
You got it, Miss a little miss a lot, Miss
a lot, and we'll miss you. It's your Morning Show
with Michael del Churno
Previously on Your Morning Show with Michael dil Juno.
Speaker 2 (00:04):
David Bonson is our economist and money wiz joins us
every Thursday. David, how frustrating is it for you, as
an economist and somebody that follows the market to watch
America take its cues from political narratives rather than economics.
One oh one must be hell.
Speaker 3 (00:20):
Well, it's extremely frustrating. It isn't hellish.
Speaker 4 (00:24):
I have a little resilience to it at this point,
but I will say this, it's a bipartisan frustration. And
that's the part that bothers me because I don't expect
a lot some of the last from some of this.
I think politicizing economics is really a core to what
central planners believe in doing. They want a greater role
for the state and that includes an economic administration. So
(00:48):
they want to make something political out of economic issues.
But when the right does it, it bothers me a
great deal.
Speaker 2 (00:56):
Give me some examples about how the right does it.
How are they doing it right now?
Speaker 3 (01:00):
Well?
Speaker 4 (01:01):
The I mean I would say this, I think that
that trying to interpret economic data as always connected to
you know, if it's good data, it's because my president
did it.
Speaker 3 (01:15):
If it's bad data, it's because the other.
Speaker 4 (01:16):
President did it, As opposed to the basic presupposition, the
first level of economic data you assume might have nothing
to do with politics whatsoever. And so I would no
more assume that eggs went up because it was Biden's fault,
then I would assume that eggs go down because it's
Trump's credit. Both things are so preposterous and counterfactual.
Speaker 3 (01:40):
But the only reason one would be tempting to.
Speaker 4 (01:42):
Do so is because of the strong mesionic idolatrous a
ruler of politics.
Speaker 5 (01:49):
Prices of eggs went up because of bird flew right, and.
Speaker 3 (01:53):
I'm pretty sure that's the safe thing to say.
Speaker 2 (01:55):
Yeah, but yeah, but when they politically lay it all
on the line, these narratives, and these narratives keep biting
the dust due to reality. That's the self defeating game
that politicians play, and shouldn't What would you educate the mary?
Speaker 5 (02:09):
I mean, you just saw the inflation report. Did it
surprise you?
Speaker 4 (02:13):
Well, no, because I've been saying for some time that
the numbers that are baked in the CPI are overstating
the real on the ground numbers about rent and shelter,
and that is thirty four percent of the CPI number.
Now that number is showing in the data. It had
been five or six percent, it's now four point one.
And so if you had that at the real numbers
(02:35):
that zero, and real litter and national apartment lists and
some of the real actual market current time data numbers
indicate are more like two to three, then that would
bring the CPI number down to one point nine percent.
Speaker 3 (02:47):
And that's where I believe the real number has been
for some time.
Speaker 5 (02:51):
So not just not just down, down probably even more.
Speaker 3 (02:56):
That's right.
Speaker 4 (02:57):
And the goods inflation in the data is zero percent,
so goods has come down, but services and states stubbornly higher.
Speaker 3 (03:07):
And then you get into things that are not called inflation.
Speaker 4 (03:09):
They're called high prices, meaning, hey, the overall price level
may never going higher, but man, oh man, why is
auto insurance so much higher? Why are used car prices higher?
That's a different story. Then you get to look at why, okay,
like eggs, Okay, why did everything else at the grocery
store go up one percent but eggs went up twenty percent?
Speaker 3 (03:28):
And you can look at the actual causation. People don't
like to do that because we'd like to just talk.
Speaker 4 (03:33):
About inflation monolithically, and that enables us to talk about
it politically.
Speaker 3 (03:37):
And there's times when they should be talking about politically.
Speaker 4 (03:40):
You know, we went we've gone through moments, so politicians
have done things that move the whole price level up.
Right now, Michael, we're clearly going to a period where
expeditions are going lower and growth expectations are going lower.
And I would say, what's a bigger story a modest
moderating of prices or growth expectations collapsing. And that to
(04:03):
me is that's clearly a policy issue around the tariffs
and the trade wars.
Speaker 5 (04:08):
All right.
Speaker 2 (04:08):
Visiting with David Bonson, he's an economist, he is also
a money whiz and when it comes to the market.
That's how I was exposed to him watching Fox Business.
You know, I always say this about the unemployment number.
At the end of the day, I have no use
for it. I mean, I remember we were going through
the big economic challenge of two thousand and eight, two
(04:28):
thousand and nine, you know, and these unemployment numbers were
so misleading because they didn't take into account underemployment or
those who left the workforce. And so at the end
of the day you just throw up your hands and go.
You know, these numbers are just worthless? Are the inflation numbers?
Consumer confidence numbers? Are they becoming just as worthless? And
how do they get there? Why can't we have just good,
accurate economic indicators.
Speaker 4 (04:50):
Well, consumer confidence has always been worthless, and it has
never been a leading indicator. And consumer confidence is just
simply not something that can be measured as a forward indicator.
I don't agree with you, by the way that I
think the unemployment numbers are worthless. I just think that
they're incomplete, which is probably what you mean. Yeah, in
other words, you know, the underemployment number was available. It
just isn't the same thing as the unemployment right, both
(05:13):
data both data points come out every single month.
Speaker 5 (05:16):
They're just put in yours.
Speaker 2 (05:17):
But let's just stop then, do that real quick for
everybody in your world underemployment. I lived in Tulsa, Oklahoma
when Sitko left and Sidco didn't just leave tuls Oklahoma
as the largest employer, left the country and went back
to Venezuela, which was a whole other total economic picture
in terms of energy and jobs. But I saw so
many people losing two two hundred and fifty thousand dollars
(05:37):
a year jobs, and then they were taking ten dollar
an hour call center jobs. That's underemployment. Well that's a
big difference, because then you're not buying the homes that
create such commissions for realtors, or buying cars that pay
such commissions for car salesmen, or paying taxes.
Speaker 5 (05:52):
At this level, I mean, it's night and day. I mean,
it's far more shit helping you.
Speaker 4 (05:57):
There's absolutely no scenario ever, and there was there a
no eight where you're going to get a big spike
in unemployment without also getting a big spike in unemployment
in the two thousand and eight nine and by the way,
ten numbers too, because Obama had to own that there
is easy President Obama had to own that during the
midterms of twenty ten that we were still sitting at
over ten percent unemployment. So you had a big spike
(06:17):
in unemployment, which was itself a factor that as you
point out, infected wages spending activity, but the unemployment number
was significantly higher too, So those two are highly correlated.
The other one you brought up is the bigger deal
of me, which is the label participation for and You're
exactly right. The unemployment number doesn't measure it. But I
just have always said there are two different things in
(06:39):
both of a matter. The unemployment number matters to understand
how many jobs there are. The labor participation force matters
to know how many workers there are.
Speaker 3 (06:49):
And those are two different things.
Speaker 2 (06:51):
Yeah, and we've had more workers than we've had jobs
for a long time. All right, So help my your
morning show family understand all these indicators that are narrativized.
Speaker 5 (07:00):
How do we get those out of our head? And
what do you follow? What should we follow to really
understand where we're at.
Speaker 3 (07:05):
I don't.
Speaker 4 (07:06):
I don't think it's the matter getting the numbers out
of our head. I think the problem starts with us
in the mirror. It's the way we want to think
about the numbers. Hear the numbers, you know, the whole
thing with the news cycle, like where there's a crime
and the left like there's a shooting right, and there's
a political tendency that the left kind of hopes it's
a crazy right winger and right kind of hopes it's
(07:26):
a it's a Jihavis or something.
Speaker 5 (07:28):
So where the problem at? Yeah? Where the problem?
Speaker 3 (07:30):
Yeah? Yeah? I don't. I don't want to hear economic
data if I'm being an on it.
Speaker 4 (07:34):
If I'm going to manage the seventy billion dollars of
money I'm responsible to manage diligently. My clients do not
want me to hear data points and say, hey, how
can I put this in a political narrative?
Speaker 3 (07:46):
The data is not in a political narrative. I'm putting
it in a political narrative.
Speaker 4 (07:50):
That's what I would say to our listeners, that that
there is no need to put in a political narrative
where the data needs interpretation. Then people are going to
use their own no belief system and worldview and what
not to do. So some of it is much more
cut and dry. But yeah, I think it's that knee
jor team plus to want to put it in there.
That's what we have to avoid doing.
Speaker 5 (08:11):
Shameless plug time. Do we have a dividend cafe this week?
Speaker 4 (08:16):
We must certainly do each and every week Friday, and
I will tell you it is one of my favorite
divning cafes. I have an open on my computer right
in front of me here at my hotel in Palm Beach, Florida.
I'm spending a few days at our Palm Beach office
and have been writing it for the last three and
a half hours, and I took a break from my
writing to go live on air with.
Speaker 5 (08:34):
You, sir. What's the topic?
Speaker 3 (08:37):
It is on whether or not Trump no longer cares
about markets? And I'm going to make the.
Speaker 6 (08:42):
Very nuanced argument that that is not a conclusion we
should avoid or a conclusion we should draw, but that
there's a lot going on right now that it feels different,
and I want to unpack it.
Speaker 4 (08:54):
What's going on in the President Trump and the way
he thinks about markets. That's so many Dividing Cafe tomorrow.
Speaker 2 (09:00):
This may or not surprise surprise you, but so many
of my listeners appreciate you so much. Every week I
probably get as many emails about you and david'sanadi as anyone,
and I'm grateful for your time that you give us,
and I encourage everybody. If you want more of our
money with David Bonsen, you can find that at Dividendcafe
(09:21):
dot com.
Speaker 5 (09:22):
Always appreciate you.
Speaker 2 (09:23):
Have a good time, and Wes Palum, we'll talk to
you next week or sooner if conditions weren't.
Speaker 1 (09:27):
You got it, Miss a little miss a lot, Miss
a lot, and we'll miss you. It's your Morning Show
with Michael del Churno
Popular Podcasts
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.