3-27-25 - 9am - Produced or Spent GDP and Is The Country On The Right Track

Episode Transcript

Speaker 1 (00:00):
Now, Michael, the tesla was in Texas, the child rape
was in Massachusetts, two different places.

Speaker 2 (00:07):
Obviously. Yeah, it's still generically speaking, law enforcement.

Speaker 3 (00:20):
You just don't get it, Michael, No.

Speaker 2 (00:21):
I get the point he's making. He misses the point
that I'm making is in this country we have these stupid,
inconsistent standards of behavior among law enforcement. And it drives
me nuts. And yeah, I get it. Texas. Do you
think Texas? What do you think Texas would do with

(00:42):
a alleged child rape? Is seventy five hundred dollars bond
in most parts of tech. I gotta be careful here
because in most parts of Texas that guy probably you know,
we found in a bar ditch somewhere. The other places
in Texas, Austin, Dalla, Houston, I'm looking at you, San Antonio.

(01:03):
You'll probably get out on seventy five hundred dollars bond.
So I get the difference between the states. Trump and
his Commerce Secretary Howard Lutnik are really doing, I think
a long term strategy to return. You know, Trump refers

(01:25):
to it as the Golden Age, the Roaring twenties, or
but however you want to describe it. I really think
that I saw someone on X yesterday post something to
this effect that the long term goal is. You know,
he keeps talking about an external revenue service at some

(01:46):
point eliminating the income tax and going to a national
sales tax, a consumption tax. I don't like the phrase
consumption tax because oftentimes will lump into that value added
tax of that tax, which I'm totally opposed to. But
in national sales tax, I would be quite happy with.

(02:08):
In elimination of the income tax. Absolutely, I am in
favor of that, and have that balance paid for with
tariffs foreign countries doing it. So they're working on this
kind of I think grand scheme, and I wish them well.
I hope they can. But one of the things they've
been talking about is changing the definition of the gross

(02:30):
domestic product, and I think that bears some consideration. Think
about start up by thinking like this, Thinking like this.
You pay yourself to dig a hole and to fill
it back in. You're paying yourself to do that. You labor,

(02:52):
you earn some money, money changes hands, and some activity
did occur? Did it create anything of any economic value?
I've got a I have a fifty dollars bill in
my wallet. Hey, Michael, I'm going to pay you with
my money, fifty dollars to go out here in the

(03:16):
front circle. There's a mound of grass, and I want
you to dig a hole and then fill it back up,
and I'll pay you fifty dollars. There's no value created there.
I've paid myself. That is the central paradox that I
think drives the Commerce Secretary to reform this definition of

(03:41):
gross domestic product. He wants to exclude non productive government
spending from GDP from gross domestic product GDP calculations. Now
he's not merely just trying to fudge the Now, he's

(04:01):
challenging the very epistemology of growth itself. And I think
he's correct in doing so. How many times did we
hear about the job's numbers and oh, my gosh, we
had a great you know, we were expecting one hundred
and seventy five thousand jobs and we got one hundred
and eighty five thousand jobs. Oh, it had exceeded expectations.

(04:23):
And then you dig into it and of the one
hundred and eighty five thousand jobs, one hundred thousand or
more were government jobs. Right now, our gross domestic product
includes almost all government spending, regardless of the utility of

(04:45):
that spending. It doesn't make a distinction, for example, between
money that you might spend on a highway or building
a bridge, or the money that you spend on a
bureaucrat that's not even involved in the building of a
bridge or a highway, but in instead is drafting a
program within FEMA, for example, to spend money on family

(05:09):
assistance programs, or somebody working in the Department of Ag
working on our regulation about what you can or cannot
spend snap money on food stamps on. He wants to
get rid of that instead, he wants to use an
expenditure approach, where when you think about gross domestic product,

(05:34):
the G component we count as economic output regardless of
whether it funds infrastructure or idle administrative meetings, meetings, the
bane of Washington EVA, the bane of my existence. Even here,
I think that what the Commerce Secretary's insight is, it's

(05:54):
pretty simple. Not all government spending constitutes production. Now that
means that we have to recognize that some government spending
does equal production. Now, you may question, how do we
value that local government that spends on a fire department

(06:16):
that's a productive expenditure a local government that fixes a
pothole which reduces the damage to cars that keep hitting
the pothole, that's a productive expenditure. A Colorado Department of
Transportation that would fix a I seventy closure gate that
keeps flying open and damaging cars, that would be a

(06:40):
productive expenditure. I also think there's an expenditure that they
should reimburse the driver, but that's a different story. But
the opponents to this approach are screening bloody murder. They
claim that if you redefine gross domestic product that somehow
that's going to eroad investor confidence, it's going to complicate

(07:02):
international comparisons, or should become a political tool, to which
I say, every single one of those complaints is a
problem to begin with. If gross domestic product includes all
of this non productive government spending, you think investors will
understand that a savvy investor would already understand that the

(07:27):
gross domestic product figure, whatever it is, let's let's just
say in our dreams. Because China keeps claiming that it's
going to have five percent GDP growth this year, I
think it's utter bull crap. Why Because China's in the
process right now of subsidizing people to buy things. And
I don't mean houses, I don't mean cars, I mean food, groceries,

(07:53):
mobile phones, laptops, clothes, shoes, anything you can possibly imagine.
The Chinese government is in the process of subsidizing that
because they want to get to that five percent GDP number.
That's all fake, it's all there's nothing true about it
at all. And then there are people in it that

(08:14):
will invote Keynesian economics arguing that government spending is somehow
stabilizing force when you're downturning the whole idea that you know,
you go into a recession or a depression, you got
to spend government money to get you out of that.
How did that work out for us with COVID? How
did that work out for us? In two thousand and
eight Too Big Defail? We're right back to too big

(08:35):
to fail again. GDP is not reality itself. GDP is
a tool. It's a measurement, and like any tool or instrument,
it's got to be judged about whether it serves the purpose.
What's the purpose of GDP to reflect economic vitality? Not growth,

(08:56):
but vitality. How is the economy performing? In an article
that I read it said, consider this, If a family
cuts its cable subscription, has that family gotten poor? No,

(09:16):
not necessarily, so I would you know, I just haven't
taken the time to do it. In fact, I found
the company it will do it for you. I may
hire them do it. I just haven't taken the time
to calculate what do I spend on streaming and Comcast
or Exfinity, And then if I cut out Exfinity in

(09:39):
terms of cable television, what's the savings there? But I
have to take into consideration that if I cut out
all of the other stuff that Exfinity then may increase
the price of my Internet per month. So I've got
to take that into consideration. So a family is going
to cut cable doesn't necessarily poor. They're trying to optimize

(10:02):
their spending and get the most value for the dollar
that they spend on their entertainment and their internet. So
think about government. When government trends or stops or eliminates
a wasteful program, does the economy shrink. No, Now, it
went under the current model of gross domestic product, which

(10:25):
treats every dollar spent regardless of who spends that dollar
or what they spend that dollar on that it's sacrosanct.
You've got to count that dollar. If we're paying people
at the federal level or at any level. I don't
care any level of government to work from home. And

(10:45):
let's give them the benefit of the doubt. They're actually
working two hours a day. They're actually sitting at their
computer and doing something not productive but work related for
two hours a day out of the eight hours that
we pay them. Why are we counting that? What? What
what Lucas trying to do is to correct the distortion

(11:09):
that counting all of those dollars spent counts towards GDP.
It separates this illusion of growth from spending. And that
was what that means that policymakers, congressmen, state representatives, even
city countsmen could make cuts without conjuring all these recessionary shadows.

(11:33):
Oh my gosh, if you cut this, you're gonna you're
gonna you're gonna push us into a recession. You're gonna
cause the market, the stocking market to collapse. Now, I
think the practical importations are amazing. I want you to
think about a gross domestic product number that distinguishes between, say,
the construction of a bridge versus a government symposium on

(11:57):
say DEI. Under Lutnix plan, only the construction of the
bridge would be counted. The money spent to have a symposium.
You know where people travel, you know, they come from
all over the country to go to a symposium that
the Department of Education is holding about DEI. That is
totally not productive. Doesn't do anything other than you might

(12:20):
say that, well, Michael, they spent money on airplane tickets. Well,
no they didn't. The government did. And while that may
have added to the value of the airline that you
spent the money on that was paid for by tax dollars,
and that seat probably would have been filled by somebody else.

(12:42):
And what did the airline do they have a full
plane of government employees or government employees ended up filling
up a plane by there were twenty seats left and
they were all government employees. Well, the people that paid
tickets to be on that flight paid a higher rate, really, wasn't.
I mean, there's no value in that. And I know

(13:07):
that people probably think that defining non productive is too subjective.
Yet if you draw the lines between productive and non
productive expenditures, that's going to involve disagreement. Is basic research productive? Well,
I think that maybe some basic research probably is productive.
Are welfare programs productive? M probably not? What about research

(13:33):
and development for new weapons systems? Is that productive? Yeah? Probably? So.
We already distinguished between public and private investment, We distinguish
between fixed capital formation and consumption, and economists are always
disaggregating data to refine insight into what is the economy doing,

(13:59):
what are we spending money on, and what is it producing.
So the burden is not to avoid subjectivity altogether, but
to simply to manage that subjectivity. Lugnan proposes currently that
twenty five percent of our current GDP is probably non productive,

(14:22):
and they laugh about that, But so far I haven't
found anything that's really substantie. They just laugh about it.
If total government spending hovers around, say, thirty five to
forty percent of GDP, and much of that is what
transfer payments, administrative costs, regulatory compliance did, I think that
estimate of thirty five to forty percent is probably pretty

(14:45):
plausible because the real issue is not the number itself,
it's the principle. Should gross domestic product measure what is produced?
Should it measure what is spent? Imagine two countries Atlantis
and Borraalia Atlantis fake Cony well formerly fake country Atlantis

(15:09):
spends lavishly on committees, consultations, conferences, meetings, blah blah blah.
What does Borealia do It invests in ports, roads, and semiconductors.
Under our current structure, both might report the same amount
of growth. But what Lutnick says we ought to do
is that Burraalia, who actually invests in ports, roads, and semiconductors,

(15:34):
would emerge as the true engine of prosperity. In other words,
he restores economic measurement to its moral purpose, illuminate genuine progress,
don't flatter political appetites. Then detractors worry. Oh my gosh.
But if we do it, nobody else does. What about

(15:57):
global comparability? If somehow we change we calculate GDP and
others don't, are we going to appear weaker? Well we could,
but that would be only to a lazy observer. That
would only be to the drive by consumer of news
that hears about. Oh, our GDP only increased three point
five percent, and France's was up where China's was up

(16:18):
five percent. Oh look how much better China's doing. We
ought to be communists like China. That's a lazy consumer
of news transparency. On the other hand, if we fully
explain what's going on, if we really state both our
traditional and the revised figures, then our investors, the capitalists

(16:41):
in this country, can adjust their investments accordingly, and our
allies can measure us accordingly too. Publish both metrics for
say twenty years, as Lutnick suggests, that would drant. That
would probably get other countries to start transitioning to a

(17:01):
fair and more accurate GDP number. Also a more accurate
number of what's spending actually accomplished. It wouldn't that be
a nice change?

Speaker 4 (17:12):
Could a migrant suggest that ties to the community could
mean that he knows how to wash windshields and busy intersections.

Speaker 2 (17:24):
Yeah, I'd like for them to do that. That'd be great. Yeah,
I'm at Santa Fe and Alameda wipy windshields all day long.
I'm really worried about this weekend. I may not be
able to work this weekend because it's supposed to rain
and I just don't know. I don't know. I may
have to go back to Venezuela for the weekend.

Speaker 3 (17:42):
Damn climate change exactly.

Speaker 2 (17:44):
It's exactly right. Price. Eggs are coming down. There's some
good news. Wholesale egg prices continue to fall. Costs her
down about fifty nine percent from February. Trump's Department of
Bag actually took some action to put downward pressure on
egg prices. They did a couple of things. They started

(18:06):
surging resources to actually fight the avian flu outbreak among
the poultry population. And they also said, let's quit and
I love this word, culling. Let's quit culling all of
these flocks of chickens that we got in these chicken
farms everywhere. Let's try to start treating the disease as

(18:28):
opposed to just killing all the birds.

Speaker 3 (18:30):
You kill all the birds you.

Speaker 2 (18:32):
Got for your eggs. You got for your eggs, the
price goes up. You got more chickens, you got more eggs.
The more eggs you got, the prices start to come down.
Jimney Christmas. These people are brilliant, utterly brilliant. Trump says,
gas way down, Eggs are way down, groceries are down
very substantially. Almost everything is down. I'm not quite sure
I agree with that, sir. It might be in some places,

(18:54):
but once you come to Colorado, let's invite the president.
You know, we should invite the president to or even vans.
It's likes to travel around the country.

Speaker 3 (19:01):
You see him.

Speaker 2 (19:01):
Shooting his machine guns with the Marines yesterday fired off
a Holwitzer two. Maybe we get him to come to
Colorado and go he and I go to King Supers
and do some grocery shopping, he says. Now, Trump says, now,
I'd like to see interest rates come down a little bit,
and then you're going to see billions of dollars, even
trillions of dollars coming into our country very soon in
the form of terrorists. I hope he's right. Now, wholesale

(19:23):
prices have fallen, and the Trump administration and experts caution
that it could still take some time for consumers to
see the changes in the retail prices, because those retailers
will want to hold onto those higher prices as long
as they can until they see that, oh, we're not
selling as many eggs. So let's start lowering the prices,

(19:44):
and let's stop the calling the killing, the murder of
the mass murder of the kickens. In addition allocating more
resources to end av and flu outbreaks, they've cleared the
way for new imports of eggs from designated countries, including Brazil.
So the alleviation of supply constraints how to help drive
the prices down. The Secretary of Agriculture, Brook Rollins not

(20:07):
that all these measures have already contributed to a fifty
percent dropping prices in New York State. Well, I don't
care about New York. I care about Colorado.

Speaker 1 (20:16):
The gasoline is way down, eggs are way down, Groceries
are down, very substantially, but down.

Speaker 2 (20:25):
Almost everything's down. Now.

Speaker 1 (20:26):
I'd like to see interest rates come down a little bit,
and you're gonna see billions of dollars, even trillions of
dollars coming into our country very soon in the form
of tariffs because we were abused by presidents and frankly,
in all it wasn't their expertise, but they had no
idea what they were doing.

Speaker 2 (20:46):
Let's hope that it happens. I mean, really do hope
that it happens. A new lawsuit, surprise, right, a new
lawsuit aimed at Trump has landed on a desk of
a judge that should be familiar to you, Judge James Boseburg,

(21:08):
who previously blocked Trump's efforts to deport these Venezuelan gang
bangers back to El Salvador, usually the Alien Enemies Act.
The case was filed yesterday by American Oversight. It accuses
Defense Secretary Pete Hegesith and others of breaking federal records
laws by discussing the Houthia attack strategies in that signal

(21:32):
group chat. So the guy that tried to block the
transfer the deportation of TDA gang members to El Salvador
is now the same judge by just the luck of
the draw to get this lawsuit against Trump for breaking

(21:57):
federal records laws by discussing the tax on signaled Now everyone,
and I want to make clear about this and I
don't want to be accused of making the same mistake.
This judge was originally appointed to the trial court by
my old boss, George Bush. He was appointed to the

(22:20):
d C Court by Barack Obama. Darrel Isa, the Congressman
from California, is urging Boseberg to step aside because he claims,
and I think he's right, his rulings reveal a clear
bias against Trump's team. Isa says that it's no coincidence
that Bosberg got this case, and I would argue that

(22:40):
it's right. While these while these assignments are supposed to
be by random draw I really don't think this one was.
And of course Isa doubts that the judge is going
to recuse himself by arguing that it would be the
right move for the credibility of the court. The judge
doesn't care. He doesn't care. Now, Trump, you know, has

(23:01):
been calling for his impeachment, and Brandon Gill, he's the
guy by the way at the beginning of the program
who was questioning, what's your name? Maher, the head of NPR,
he has actually filed articles of impeachment to start the
process in the House of Representatives. Now I've got mixed
emotions about impeaching judges over this. I'm not quite sure

(23:24):
this is what we should be doing. If indeed, though
they're fudging the selection process where it's supposed to be random,
and if indeed he has a huge conflict of interest,
which he does because of his wife's involvement with Democrat operaties,
and I think he's given I don't hold me to
the figure, but in access of thirty thousand dollars or

(23:45):
something to democrats, I think the guy, I mean, I
understand he has a free speech First Amendment right to
contribute to Democrats. Because you have a right to do
something doesn't mean that doing it is the right thing
to do. I just don't think the judge. I think
judges on their own should have enough integrity to say,

(24:06):
you know what. It creates an appearance of impropriety. It
creates some question about the credibility of the courts if
I give heavily to Democrats and then it seems that
I do things like, oh, I approve a warrant on
the FISA Court to go spy on the opponents that

(24:28):
I gave money to the other side. I don't think
they ought to be giving the money now. American Oversight
claims that the Trump administration has flouted the Federal Records Act.
That act mandates the federal officials preserve all their government communications,
and they claim that the who the discussion by being

(24:50):
on Signal where it's automatically deleted after a certain period
of time, that that violated this group. And it points
out that agencies typically require officials to save message from
apps like Signal by forwarding those messages to official systems,
something they alleged didn't happen here. I don't know whether
it really happened or not. Honestly, I don't really care.

(25:14):
Now they denied a signal chat was used for war planning.
You know, we've been through all of that. But American
Oversight claims that they're nonpartisan, but an organization called Influence
Watch says that American Oversight frequently appears explicitly partisan in

(25:36):
its choice of investigating projects, with conservatives arguing since it
was founded in twenty seventeen with the express purpose of
waging a lawfare campaign against the first Trump administration. Now,
who's involved in this, Well, most of the key leadership figures,

(26:00):
and let me rephrase that, almost all the key leadership
figures are Democrats, former senior counsels lawyers involved in the
Obama administration. And if they weren't involved in the Obama administration,
they're tied to the Democrat Party or they're tied to
Democrat super packs. So yeah, it's not nonpartisan. They know

(26:20):
precisely what they're doing. But again, I'm not convinced that
impeachment's the right thing to do. Point out how bad
he's acting, and because the Supreme Court reads the newspapers too,
the Supreme Court knows what this judge is doing. And
in fact, Chief Justice Roberts is the one that appointed Bobert.

(26:44):
Bobert too. I'd never think is Rep. Boseberg. He wouldn't
say Bobert Boseburg to the Piza Court. So he knows
exactly what's going on, and I think that when it
comes time for his case to be heard, maybe Roberts
ought to disqualify himself, but that's wishful thinking. There are

(27:05):
a couple of polls out I want to mention to
you before we get done. An NBC poll, forty four
percent of those responding say the country is headed in
the right direction. Now, I know that means that fifty
six percent don't think so, or some derivative thereof, but
that's a huge number. It's the highest recorded number since

(27:28):
two thousand and four. Ameri's Pole shows basically the same thing.
Forty five percent say that we're on the right track.
That's the highest number since two thousand and nine. Now
we look at the opinion surveys, you look at the
recent hard economic data, it directly contradicts what the cabal

(27:52):
is saying, that they're sliding consumer confidence and that we're
facing an imminent recession. This data, at least to me,
appears to suggest that recent declines in consumer confidence are
being driven by the media that keeps telling everybody that, hey,
there is a downward slide in consumer confidence. They're driving

(28:14):
the narrative. What an example. CNM data guru Harry Entend
noted during a recent segment, this, let's take a look
at the percentage of the country who say that we're
on the right track. It's actually a very high percentage
when you compare it to some historical numbers. But what
are we talking about, he asks, According to Maris, forty

(28:36):
five percent say we're on the right track. That's the
second highest that Maris has measured since two thousand and nine.
How about NBC News, He says forty four percent. That's
the highest since two thousand and forty, exclaims. The bottom line,
he says, is the percentage of Americans who say we're
on the right track is through the roof. But the
CNN data reporter said the current polling is above the

(28:59):
numbers when incumbents are usually re elect suggesting that Republican
candidates could perform fairly well during the twenty twenty six
mid terms. If this voter sentiment about the country's direction
remains positive.

Speaker 5 (29:17):
So let's take a look at the percentage of the
country who say that we're on the right track. It's
actually a very high percentage when you compare it to
some historical numbers.

Speaker 3 (29:25):
What are you talking about?

Speaker 5 (29:25):
According to Maris, forty five percent say that we're on
the right track. That's the second highest that Maris has
measured since two thousand and nine.

Speaker 3 (29:31):
How about NBC News.

Speaker 5 (29:33):
Forty four percent, that's the highest since two thousand and four.
The bottom line is, the percentage of Americans who say
we're on the right track.

Speaker 3 (29:40):
Is through the roof.

Speaker 5 (29:40):
And if you were to compare it to when presidents
have historically been re elected.

Speaker 3 (29:44):
Of course, Trump.

Speaker 5 (29:44):
Is not constitutionally eligible to run for election, but I
think it sort of puts it in perspective. Forty two
percent of the country says the country is on the
right track when the incumbent party is reelected. And also
keep in mind, back when Kamala Harris lost in the
Democrats or turned out of power, only about twenty seven
to twenty eight or some of the country said the
country's on the right track. The bottom line is right
now a much higher percentage of the country says we're

(30:05):
on the right track.

Speaker 2 (30:07):
This guy's gestures are over the top with excitement. The reporter,
the anchor who's watching it a really dour, sour face,
like shut up.

Speaker 3 (30:19):
I wasn't disturbed till I got here.

Speaker 2 (30:22):
What happened until you got where? Until you got.

Speaker 3 (30:28):
Here, here to this show.

Speaker 2 (30:30):
That's that's why I'm thinking here to this show. Right.
So let's go back. We talked about NPR earlier and
in that last thing that I was talking about these
biases where democrats tend to control things but they never
want that revealed. Well, that also happened in the NPR
hearing yesterday.

Speaker 6 (30:50):
Can we expect that you will bring the same lack
of reverence for truth to your management of NPR.

Speaker 7 (30:57):
Thank you, Grison. First of all, I do want to
say that NPR agnowledges that we were mistaken and failing
to cover it the Hunter Biden laptop story more aggressively
and sooner our current editorial leadership Wuhan.

Speaker 3 (31:08):
We recognized that we.

Speaker 7 (31:09):
Were reporting at the time, but we acknowledged that the
new CIA evidence is worthy of coverage and have covered it.

Speaker 6 (31:15):
What have you done to clean up the bias before me.
I wasn't there for that. What are you doing to
clean up and make sure that we have?

Speaker 7 (31:24):
Absolutely? Thank you, Congressman. As I mentioned, I came in
in May. Mister Berlinter published his story two weeks into
my tenure regarding stories that had happened prior. I wish
that I had the opportunity to speak with mister Burletter.
I would have loved to have had him engage and
come back to us with some suggestions as to what
we could do editorially in order to address what he
perceived as bias.

Speaker 6 (31:43):
Now, you've had a long history, including the thing that
I mentioned about lack of reverence for truth and how
reverence for truth you've even talked about the First Amendment
kind of getting in the way of what you wanted
to get done. And then you're wanting us to believe
that NPR now taking this non biased approach, I mean,
where was the come to Jesus moment for you? I

(32:04):
guess that has turned you around that we can trust
the American taxpayer dollars with your leadership of NPR.

Speaker 7 (32:11):
I so appreciate the opportunity to perhaps clarify some things.
My talk about truth was really referencing the way that
people use truth to refer to belief as opposed to facts.
And my encouragement was that we focus on facts with
regards to the first Aemen.

Speaker 3 (32:26):
That's not what your comment said.

Speaker 6 (32:27):
Your comments said that truth was getting the way of
getting things done, and that you were prioritizing what you
wanted to get done over truth, and that's really unfortunate.
I want to go to a different context, because you're
allowed to have your political opinion. Any news organization should
be going after the truth. That's what we want to
expect out of news organizations. But certainly a media platform

(32:50):
can have whatever opinion it wants in a free society.
The question for us today as a committee is whether
or not the taxpayer should be forced to pay for
this kind of thing. Mister gonzales I wanted to tag and.

Speaker 2 (33:03):
It should not. Why do we just ask yourself, why
do we have national public radio. I'm not going to
answer the question. I want you to answer it, because
obviously I'm biased. I don't think we all spend taxpayer
dollars on it anymore than I think that taxpayer dollars
ought to subsidize what I do or what this company
does