Richard Stern - Economist, Heritage Foundation Joins Houston's Morning News

Episode Transcript

Speaker 1 (00:00):
Really was there time? Was there time when money was it?
Gang five fifty three? Is that time? Here on Houston's
Morning News, all right, the economy right now? Where are
we at? Where are we going? You know we're hearing
about what was the story we had this morning that
Michigan and I want to say another Midwestern state are
sewing recession signs. I don't know if they're technically in
a recession or not, but they're showing some signs of recession.

(00:21):
Are we headed? We've been talking about heading in that
direction all throughout the Biden years and we never quite
got there. I don't think we're headed in that direction now.
But let's see what our guest, the economist thinks, Richard Stern,
he's an economists with the Heritage Foundation. Where do you
think this economy is going? Richard?

Speaker 2 (00:38):
Well, thanks for having me on to talk about it. So,
you know, I think what's going on here is we
have to remember the hiring is something that happens in
the moment because of long term business investment to give
us all of that productive capacity, all those job opportunities.
But growth is something that happens because of things like
tax cuts, deregulation, things that Trump has been doing. So

(01:01):
the reason why hiring is slower is frankly headwinds from
four years of Joe Biden's presidency. But the reason why
you have investment growth is because of the last nine
months under Trump and the deregulation, the tax cuts, and
all of the other things that Trump is doing to
grow the economy, including unleashing energy resources. So my mind,

(01:24):
that's why we've got the split screen economy. So I
don't see any warning signs at the mowment.

Speaker 1 (01:28):
Okay, well, that's good to hear, and I completely agree
with what you're saying. Here's what I'm wondering, because I
feel like we're having a post Biden administration inflation hangover.
We had all that runaway inflation during the Biden years.
Thankfully that has toned down and has slowed down to
something as much more normal here during the Trump administration.

(01:49):
But like everything else, we don't go backwards. Prices never
retreat to where they were before the Biden deministration. So
we're left with a hangover there, and people are there's
an affordability problem for a lot of people.

Speaker 2 (02:02):
Oh absolutely, So we have to remember that the way
that our current fed to works and the way that
the federal deficit works is that price has never come
back down again. Now look, the entire nineteenth century, prices
were flat. They actually declined to times. But it really
just can't happen as long as you have the federal
government run the massive deficits that are runs. Because of that,

(02:25):
there's always inflationary pressure. And yes, because of the reckless
COVID spending and all the spending that Biden piled on
for green energy subsidies and all the other things the
rest of the Look agenda, we have a twenty plus
percent price flake of consumer prices. But again, if we
have deregulation at tax cuts, if we get more energy

(02:48):
into the market, we have more economic growth. We can
grow our way past some of that inflation. And of course,
as long as we don't have another round of massive
government spending, we won't get another price bike the way
we did during the four years of buying.

Speaker 1 (03:03):
Well, let me ask you about the potential for massive
government cuts, especially if this shutdown continues. I think the
President has made it pretty clear that he's looking at
lopping heads and maybe departments and putting some people in
the unemployment line. I think the whole idea behind getting
smaller government, which I believe we would be best for
our country, is that these people would then go to

(03:23):
the private sector. But are those jobs available now in
the private sector when we have basically a lot of companies,
most companies cutting back and hiring.

Speaker 2 (03:34):
Oh? Absolutely, So you know what part of what's going
on again is that I think you've got these headwinds
going in from the Biden administration that have been sluggish. Frankly,
a lot of the labor that would have been available
to the private sector got waylaid by the federal government.
You know, the federal government can do something that private
business can do, which is print money and say, hey,

(03:56):
do you want to come waste your time? Do you
want to come regular the rest of your countrymen, and
will pay you newly printed inflationary dollars to do it.
So there's always a little bit of a transition period.
But the truth is getting more people out of the
federal bureaucracy is precisely the kind of thing that can
help open up investment in the private economy and getting

(04:19):
them out of the government, out of the regulatory industries.
So I'll take a little bit of time, but I
think yes, you're going to see a lot more private investment,
private hiring, and really good, long term, sustainable jobs that
come out of us.

Speaker 1 (04:32):
All right, Richard Stern, thank you, appreciate your time as
the economist, said the Heritage Foundation, Richard Stern,