1 00:00:05,200 --> 00:00:10,800 Speaker 1: Live from Vall Hartland and the Crossroads of America. It's 2 00:00:10,880 --> 00:00:15,240 Speaker 1: Tony Katz today. I found it very strange that Disney 3 00:00:15,280 --> 00:00:18,440 Speaker 1: stock was up. Of course, this says to everybody who 4 00:00:18,440 --> 00:00:20,840 Speaker 1: said I'm gonna boycott Disney and I'm not going to 5 00:00:20,920 --> 00:00:24,960 Speaker 1: stream Disney. Well, people didn't do that. The streaming is up, 6 00:00:25,400 --> 00:00:28,760 Speaker 1: their numbers are up. But also up is the amount 7 00:00:28,800 --> 00:00:31,760 Speaker 1: of people going to the theme parks. They attribute the 8 00:00:31,800 --> 00:00:35,560 Speaker 1: stock price rising to people attending the theme parks. Have 9 00:00:35,640 --> 00:00:38,760 Speaker 1: you tried to attend a Disney theme park? I would, 10 00:00:38,920 --> 00:00:40,839 Speaker 1: but I work in radio and we just don't have 11 00:00:40,880 --> 00:00:44,200 Speaker 1: the money for it. Tony Kats Tony Katz today. Good 12 00:00:44,200 --> 00:00:46,199 Speaker 1: to be with you, EJ. And TONI joins you right 13 00:00:46,200 --> 00:00:50,040 Speaker 1: now chief economists at Heritage. And there's a series of 14 00:00:50,040 --> 00:00:54,920 Speaker 1: subjects to get to, including the President selecting Kevin worsh 15 00:00:54,960 --> 00:00:58,600 Speaker 1: to lead the FED, and that's going to require Senate confirmation. 16 00:00:58,640 --> 00:01:00,560 Speaker 1: I want to hear your thoughts on that. Let's talk 17 00:01:01,040 --> 00:01:05,959 Speaker 1: about this economy for a moment. We have talked often 18 00:01:06,600 --> 00:01:10,960 Speaker 1: about the economic issues all across the country. I'm one 19 00:01:11,040 --> 00:01:14,000 Speaker 1: of the people who says this economy isn't great. I 20 00:01:14,080 --> 00:01:17,319 Speaker 1: can see that tariffs didn't necessarily blow up inflation. And 21 00:01:17,400 --> 00:01:19,920 Speaker 1: I'm still not a fan of tariffs, and the President 22 00:01:20,000 --> 00:01:22,600 Speaker 1: can yell let me all he wants. But this is 23 00:01:22,680 --> 00:01:25,760 Speaker 1: weird because we all know that the prices to go 24 00:01:25,800 --> 00:01:28,880 Speaker 1: to Disney World or Disneyland have gone up. It's outrageously 25 00:01:28,959 --> 00:01:32,280 Speaker 1: expensive to do never mind hotels, never mind the food 26 00:01:32,360 --> 00:01:34,240 Speaker 1: once you're in a park, never mind just the actual 27 00:01:34,280 --> 00:01:38,480 Speaker 1: park itself, and that attendance is up, and this economy 28 00:01:38,600 --> 00:01:41,959 Speaker 1: is questionable. Those two things don't make sense to me. 29 00:01:42,400 --> 00:01:45,360 Speaker 1: I was hoping you can square the circle. What does 30 00:01:45,440 --> 00:01:49,160 Speaker 1: this move? This this statement about Disney, as CNBC reported, 31 00:01:49,840 --> 00:01:51,840 Speaker 1: tell you about the economy in general. 32 00:01:52,440 --> 00:01:54,040 Speaker 2: Oh, Tony, thanks for having me back. 33 00:01:54,080 --> 00:01:56,640 Speaker 3: Look, this is I think another example of the kind 34 00:01:56,640 --> 00:02:01,720 Speaker 3: of bifurcated economy that we've been dealing with ever since COVID. 35 00:02:01,800 --> 00:02:04,600 Speaker 3: If we roll back the clock to twenty nineteen, you 36 00:02:04,760 --> 00:02:09,560 Speaker 3: had an economy where both lower income as well as 37 00:02:09,600 --> 00:02:14,040 Speaker 3: middle income and upper income folks were all doing better. 38 00:02:14,080 --> 00:02:17,400 Speaker 3: In other words, we saw income gains across the board, right, 39 00:02:17,440 --> 00:02:21,840 Speaker 3: and everybody's income was rising faster than prices in terms 40 00:02:21,840 --> 00:02:26,560 Speaker 3: of looking at people as a class. Right, Again, that 41 00:02:26,760 --> 00:02:30,480 Speaker 3: threefold distinction between lower middle and upper income folks. But 42 00:02:30,880 --> 00:02:35,240 Speaker 3: after COVID what happened was only the folks really in 43 00:02:35,320 --> 00:02:40,320 Speaker 3: the upper income bracket. We're seeing their incomes actually outpace 44 00:02:41,040 --> 00:02:44,640 Speaker 3: their income gains, i should say, outpace price increases. In 45 00:02:44,680 --> 00:02:49,360 Speaker 3: other words, middle class families fell behind, lower income folks 46 00:02:49,680 --> 00:02:54,680 Speaker 3: fell behind. And that really has continued almost until today. 47 00:02:54,760 --> 00:02:58,680 Speaker 3: It has only been very very recently, just a matter 48 00:02:58,720 --> 00:03:01,880 Speaker 3: of the last several months, that we have seen income 49 00:03:01,960 --> 00:03:06,440 Speaker 3: gains across the board that are outpacing inflation. And so 50 00:03:06,600 --> 00:03:09,720 Speaker 3: this idea that somehow, just because Trump came into office 51 00:03:09,760 --> 00:03:12,840 Speaker 3: in January of twenty twenty five a year ago, that 52 00:03:12,919 --> 00:03:17,320 Speaker 3: all of a sudden everything magically became better. No, there's 53 00:03:17,360 --> 00:03:21,280 Speaker 3: absolutely no evidence for that. It took a while for 54 00:03:21,400 --> 00:03:25,200 Speaker 3: Biden to really wreck the economy. He started spending with 55 00:03:25,280 --> 00:03:29,080 Speaker 3: his multi trillion dollar spending packages literally in his first 56 00:03:29,160 --> 00:03:32,919 Speaker 3: month in office, but inflation doesn't peak until a year 57 00:03:32,960 --> 00:03:35,920 Speaker 3: and a half later. It's not as if making changes 58 00:03:36,000 --> 00:03:38,840 Speaker 3: right away is immediately going to produce all of the 59 00:03:38,840 --> 00:03:41,840 Speaker 3: effects that you want or sometimes don't want. These things 60 00:03:41,920 --> 00:03:44,440 Speaker 3: take time. Well, it's the exact same thing now with 61 00:03:44,480 --> 00:03:47,480 Speaker 3: President Trump. It is taking time for all of the 62 00:03:47,480 --> 00:03:52,640 Speaker 3: different policy changes to actually have their effects, to slow inflation, 63 00:03:52,880 --> 00:03:56,920 Speaker 3: to bring certain prices down. These things do not happen overnight. 64 00:03:57,320 --> 00:04:01,200 Speaker 3: Now again we are finally seeing I think things move 65 00:04:01,320 --> 00:04:04,800 Speaker 3: in the right direction. But you haven't yet regained all 66 00:04:04,800 --> 00:04:06,920 Speaker 3: the lost ground. I'll give you just one real quick 67 00:04:06,960 --> 00:04:09,000 Speaker 3: stat that I think sums it up to me. If 68 00:04:09,480 --> 00:04:13,800 Speaker 3: if you look at what the average Americans' weekly paycheck 69 00:04:13,880 --> 00:04:17,560 Speaker 3: can actually buy, and you look at what happened to 70 00:04:17,600 --> 00:04:20,080 Speaker 3: that weekly paycheck again, what it could buy, in other words, 71 00:04:20,080 --> 00:04:23,400 Speaker 3: adjusted for inflation, over the four years of Joe Biden, 72 00:04:23,800 --> 00:04:26,719 Speaker 3: it fell about a cumulative four percent or so. And 73 00:04:26,760 --> 00:04:29,440 Speaker 3: that's just according to the official metrics. Right if you 74 00:04:29,440 --> 00:04:31,520 Speaker 3: look at what has it done under the first year 75 00:04:31,680 --> 00:04:34,360 Speaker 3: under President Trump, it's gone up about one and a 76 00:04:34,400 --> 00:04:37,039 Speaker 3: half percent. So again that tells you, I think two things. 77 00:04:37,120 --> 00:04:39,680 Speaker 3: Number One, we were moving in the wrong direction. Now 78 00:04:39,680 --> 00:04:42,360 Speaker 3: we're moving in the right direction. So positive change there. 79 00:04:42,480 --> 00:04:45,120 Speaker 3: But the second thing it tells you is that you 80 00:04:45,320 --> 00:04:48,800 Speaker 3: have not yet regained all the lost ground from the 81 00:04:48,880 --> 00:04:50,600 Speaker 3: previous four years, which. 82 00:04:50,480 --> 00:04:53,080 Speaker 1: Now you have to stop. You how in the world 83 00:04:53,080 --> 00:04:55,880 Speaker 1: do people afford Disney at that moment? So, I mean 84 00:04:55,920 --> 00:04:58,800 Speaker 1: I might be asking a question about personal responsibility and 85 00:04:58,839 --> 00:05:02,960 Speaker 1: a question about where people's motives are. Their answer was 86 00:05:03,080 --> 00:05:05,560 Speaker 1: I now finally have a couple more bucks in my pocket, 87 00:05:05,640 --> 00:05:07,400 Speaker 1: or feel that I will have a couple more bucks 88 00:05:07,400 --> 00:05:11,600 Speaker 1: in my pocket. Let's go spend the unbelievable increase in 89 00:05:11,720 --> 00:05:14,720 Speaker 1: prices at Disney. Let's go put our money there. 90 00:05:15,760 --> 00:05:18,040 Speaker 3: So, Tony, this is where we just have to come 91 00:05:18,080 --> 00:05:21,960 Speaker 3: to the well, we got to face facts. Basically, Disney 92 00:05:22,200 --> 00:05:25,400 Speaker 3: is increasingly like I'm trying to think of another good 93 00:05:25,400 --> 00:05:28,120 Speaker 3: example here, maybe taking a family to the ballpark to 94 00:05:28,160 --> 00:05:30,599 Speaker 3: watch a game. When I was a kid, when you 95 00:05:30,640 --> 00:05:34,000 Speaker 3: were a kid, you could go to the ballpark, you 96 00:05:34,040 --> 00:05:37,279 Speaker 3: could bring your entire family, and you could afford to 97 00:05:37,279 --> 00:05:39,919 Speaker 3: eat there and everything right, and it was relatively inexpensive. 98 00:05:39,960 --> 00:05:42,600 Speaker 3: You could do an outing out at a baseball game. 99 00:05:42,920 --> 00:05:46,320 Speaker 3: A family can't really do that the day unless you're 100 00:05:46,320 --> 00:05:48,120 Speaker 3: willing to shell out a whole heck of a lot. 101 00:05:48,200 --> 00:05:50,360 Speaker 3: More so for a lot of families that you're simply 102 00:05:50,440 --> 00:05:53,520 Speaker 3: out of reach. My point is that things like going 103 00:05:53,560 --> 00:05:55,640 Speaker 3: to Disney, going to a ball game, that used to 104 00:05:55,720 --> 00:06:00,720 Speaker 3: be relatively inexpensive are today luxuries. And so when we 105 00:06:00,760 --> 00:06:04,159 Speaker 3: look at why is it certain luxury purchases like going 106 00:06:04,160 --> 00:06:08,440 Speaker 3: to Disney are actually increasing today. Again, that speaks to 107 00:06:08,440 --> 00:06:11,560 Speaker 3: the fact that you still have a kind of bifurcated 108 00:06:11,600 --> 00:06:15,599 Speaker 3: economy where the rich, the wealthy, the high income earners 109 00:06:15,640 --> 00:06:19,320 Speaker 3: over the last five or six years have done extraordinarily well, 110 00:06:19,839 --> 00:06:22,760 Speaker 3: and you are still waiting for the lower income folks 111 00:06:22,760 --> 00:06:25,599 Speaker 3: and middle class families to catch up to that. If 112 00:06:25,600 --> 00:06:28,600 Speaker 3: you look at who is actually going to Disney today, 113 00:06:29,080 --> 00:06:32,839 Speaker 3: it is not the blue collar guy making seventy thousand 114 00:06:32,880 --> 00:06:35,039 Speaker 3: dollars bringing his family a four. 115 00:06:35,240 --> 00:06:37,919 Speaker 2: It's not it's people making six figures. 116 00:06:37,960 --> 00:06:41,120 Speaker 3: Oftentimes couples who both the mom and the dad are 117 00:06:41,160 --> 00:06:44,359 Speaker 3: each making six figures, who are taking their kids to Disney. 118 00:06:44,640 --> 00:06:48,600 Speaker 1: So let me now bring this to a kind of corollary. 119 00:06:48,800 --> 00:06:51,520 Speaker 1: Maybe that's the right word talking to ej antony hif 120 00:06:51,560 --> 00:06:58,599 Speaker 1: economists the idea of income gap versus wage gap, because 121 00:06:58,640 --> 00:07:02,080 Speaker 1: we'll often hear about pay inequities, right, it's one of 122 00:07:02,120 --> 00:07:04,200 Speaker 1: the things that the leftloff's talk about, and the wage 123 00:07:04,200 --> 00:07:06,640 Speaker 1: gap between men and women. But there, you know, we 124 00:07:06,680 --> 00:07:09,680 Speaker 1: can go back to the conversations of Thomas Sole and 125 00:07:09,800 --> 00:07:13,760 Speaker 1: the decisions that are made in families, decisions made by women, 126 00:07:13,800 --> 00:07:17,680 Speaker 1: all sorts of things that lead to this disparity in numbers. 127 00:07:18,000 --> 00:07:21,320 Speaker 1: But it's interesting that there is certainly a difference between 128 00:07:21,360 --> 00:07:26,160 Speaker 1: wage gap and income gap, and this idea of not 129 00:07:26,240 --> 00:07:29,160 Speaker 1: the Bell curve, but what's known as the K curve, 130 00:07:29,840 --> 00:07:33,640 Speaker 1: and the idea that you can have rich growing, poor growing, 131 00:07:33,680 --> 00:07:37,520 Speaker 1: the middle class shrinking, and that usually leads to unrest 132 00:07:37,840 --> 00:07:41,239 Speaker 1: and things not being very good. First, do you believe 133 00:07:41,440 --> 00:07:45,360 Speaker 1: that this K graph conversation is one that's representative as 134 00:07:45,360 --> 00:07:49,600 Speaker 1: you're discussing it, of where the American economy is right now, 135 00:07:49,880 --> 00:07:52,520 Speaker 1: the difference between a wage gap and an income gap, 136 00:07:52,880 --> 00:07:57,760 Speaker 1: and is Trump's economy on its way to settling both 137 00:07:57,800 --> 00:07:58,680 Speaker 1: of these things down. 138 00:08:00,000 --> 00:08:02,720 Speaker 3: I would say Tony that the problem that you're describing 139 00:08:02,920 --> 00:08:05,880 Speaker 3: is not as bad today as it was a year ago. 140 00:08:05,920 --> 00:08:08,560 Speaker 3: It is much less so than it was two or 141 00:08:08,680 --> 00:08:13,480 Speaker 3: three years ago, but it still exists. It's not as 142 00:08:13,520 --> 00:08:17,480 Speaker 3: if just because prices have basically stopped rising at this point, 143 00:08:17,520 --> 00:08:21,240 Speaker 3: the inflation rates are incredibly low today, much lower than 144 00:08:21,240 --> 00:08:23,720 Speaker 3: the official metrics if you look at something like the 145 00:08:24,200 --> 00:08:28,760 Speaker 3: true Inflation Price Index. But at the end of the day, again, 146 00:08:29,000 --> 00:08:32,400 Speaker 3: just because things are not getting worse for everybody, does 147 00:08:32,440 --> 00:08:35,920 Speaker 3: not mean that everything is getting better for everybody. So 148 00:08:35,960 --> 00:08:38,840 Speaker 3: that's basically where we are at today. There is a 149 00:08:39,000 --> 00:08:41,800 Speaker 3: lot of lost ground that we're going to need to 150 00:08:41,840 --> 00:08:45,680 Speaker 3: make up before people are made whole as it were. 151 00:08:46,280 --> 00:08:51,120 Speaker 3: And so yes, the kind of case shape there still exists. 152 00:08:51,160 --> 00:08:55,000 Speaker 3: That bifurcated economy, as I like to call it, still exists. 153 00:08:55,040 --> 00:08:59,680 Speaker 3: Those differentials between wages and incomes still exist. Are they 154 00:08:59,720 --> 00:09:03,319 Speaker 3: get better, yes, but it is still not great. 155 00:09:04,360 --> 00:09:08,160 Speaker 1: Let's now move over to the future of this economy. 156 00:09:08,720 --> 00:09:12,280 Speaker 1: It's very clear that President Trump has no love lost 157 00:09:12,480 --> 00:09:15,360 Speaker 1: for Jerome Powell, Chairman of the Federal Reserve. He has 158 00:09:15,640 --> 00:09:20,400 Speaker 1: nominated Kevin Walsh to that position. He would need Senate confirmation. 159 00:09:20,640 --> 00:09:25,079 Speaker 1: This is a process that is certainly not an easy 160 00:09:25,120 --> 00:09:29,960 Speaker 1: one in today's world. Walsh is interesting because not only 161 00:09:30,000 --> 00:09:33,400 Speaker 1: as he addressed the idea of bringing down rates, he 162 00:09:33,480 --> 00:09:36,679 Speaker 1: has also addressed the idea that the Federal Reserve has 163 00:09:36,679 --> 00:09:39,440 Speaker 1: too much on the balance sheet and that has to 164 00:09:39,520 --> 00:09:44,719 Speaker 1: go away in order for things to really be economically superior. 165 00:09:45,120 --> 00:09:48,360 Speaker 1: Talk to me about what you know about Kevin Walsh, 166 00:09:48,400 --> 00:09:52,640 Speaker 1: his theories that would lead the Fed, and what kind 167 00:09:52,679 --> 00:09:55,080 Speaker 1: of changes one could expect under his leadership. 168 00:09:55,760 --> 00:09:58,760 Speaker 3: Well, Tony, I've actually had the pleasure to sit down 169 00:09:58,840 --> 00:10:02,840 Speaker 3: with Kevin Warsh several times now over dinner and have 170 00:10:03,000 --> 00:10:07,320 Speaker 3: some really in depth discussions on monetary policy, and I 171 00:10:07,360 --> 00:10:10,880 Speaker 3: have been very, very impressed with the man. You know, 172 00:10:10,960 --> 00:10:14,040 Speaker 3: this is a guy we forget because it happened seemingly 173 00:10:14,120 --> 00:10:16,600 Speaker 3: so long ago. But this is a guy who during 174 00:10:16,640 --> 00:10:19,960 Speaker 3: the global financial crisis and the mortgage meltdown. So we're 175 00:10:19,960 --> 00:10:22,840 Speaker 3: going back to, you know, two thousand and seventy eight nine. 176 00:10:22,920 --> 00:10:25,959 Speaker 3: Here he was the one saying to the rest of 177 00:10:26,000 --> 00:10:26,920 Speaker 3: the people on the FED. 178 00:10:27,000 --> 00:10:27,880 Speaker 2: He was there at the time. 179 00:10:28,280 --> 00:10:30,800 Speaker 3: He was the one saying, guys, you're making a mistake here. 180 00:10:30,840 --> 00:10:33,160 Speaker 3: This is not the policy course you should be taking. 181 00:10:33,440 --> 00:10:36,400 Speaker 3: Instead of doing X, you should be doing why, et cetera. 182 00:10:36,520 --> 00:10:40,640 Speaker 3: And of course history has proved him to have been correct. 183 00:10:41,080 --> 00:10:43,000 Speaker 2: So it's not as if he's just. 184 00:10:43,000 --> 00:10:46,680 Speaker 3: Monday morning quarterbacking where he's looking back and saying, hey, 185 00:10:46,720 --> 00:10:47,480 Speaker 3: back then, we. 186 00:10:47,440 --> 00:10:49,000 Speaker 2: Should have done something differently. 187 00:10:49,080 --> 00:10:51,880 Speaker 3: No, he was the man in the arena at the 188 00:10:52,000 --> 00:10:55,599 Speaker 3: time saying we need to do something differently. So he 189 00:10:56,200 --> 00:10:58,680 Speaker 3: has you know, it's not just a matter of okay, 190 00:10:58,679 --> 00:11:01,040 Speaker 3: look at his education, look at places he's worked. 191 00:11:01,040 --> 00:11:02,280 Speaker 2: Wow, he's got a great resume. 192 00:11:02,520 --> 00:11:04,680 Speaker 3: No, I don't care so much about that as I 193 00:11:04,760 --> 00:11:07,320 Speaker 3: care about his ideas and the fact that he is 194 00:11:07,400 --> 00:11:11,240 Speaker 3: consistently correct. That to me is the most impressive thing 195 00:11:11,640 --> 00:11:15,520 Speaker 3: on his resume. So fast forward to today and he 196 00:11:15,720 --> 00:11:20,000 Speaker 3: has pointed out that the FED under Jerome Palell has 197 00:11:20,080 --> 00:11:24,880 Speaker 3: the policy mixed exactly backwards. They have interest rates too 198 00:11:24,960 --> 00:11:28,680 Speaker 3: high and the balance sheet too big. You can reduce 199 00:11:28,800 --> 00:11:32,679 Speaker 3: rates without causing inflation by selling off the balance sheet. 200 00:11:32,720 --> 00:11:36,320 Speaker 3: But Jerome Pale, a Wall Street creature and a lawyer 201 00:11:36,400 --> 00:11:39,600 Speaker 3: not an economist, has been for a very long time 202 00:11:40,040 --> 00:11:43,680 Speaker 3: funneling profits to Wall Street at the expense of Main 203 00:11:43,760 --> 00:11:47,040 Speaker 3: Street by exploding the balance sheet, which is when the 204 00:11:47,080 --> 00:11:51,000 Speaker 3: FED engages in all of these asset purchases, flooding the 205 00:11:51,080 --> 00:11:54,760 Speaker 3: system with liquidity at the same time then having to 206 00:11:54,880 --> 00:11:57,720 Speaker 3: jack up interest rates to deal with the inflation that 207 00:11:57,800 --> 00:12:01,520 Speaker 3: is inflicting Main Street. Street has to deal with higher 208 00:12:01,559 --> 00:12:04,679 Speaker 3: prices and a higher cost of borrowing via these high 209 00:12:04,760 --> 00:12:07,760 Speaker 3: interest rates, whereas Wall Street just gets to rake in 210 00:12:07,840 --> 00:12:10,800 Speaker 3: all of the higher asset prices and higher profits that 211 00:12:10,880 --> 00:12:14,199 Speaker 3: has been the Fed under Jerome pal and Kevin Walsh 212 00:12:14,400 --> 00:12:18,840 Speaker 3: wants to completely reverse all of those mistakes. That would 213 00:12:18,880 --> 00:12:22,760 Speaker 3: be such a huge win for the American economy and 214 00:12:22,840 --> 00:12:25,200 Speaker 3: more importantly, Tony, for the American people. 215 00:12:25,520 --> 00:12:28,720 Speaker 1: So we take things off the balance sheet? Describes me 216 00:12:28,800 --> 00:12:30,720 Speaker 1: what those things are, what does it mean to remove 217 00:12:30,720 --> 00:12:32,880 Speaker 1: it from the balance sheet, and what is the result 218 00:12:33,080 --> 00:12:35,840 Speaker 1: that Midwest main Street feels on day one? 219 00:12:37,040 --> 00:12:39,360 Speaker 3: Well, Tony, When we talk about the FED adding or 220 00:12:39,400 --> 00:12:43,520 Speaker 3: subtracting from its balance sheet, that basically means the FED 221 00:12:43,600 --> 00:12:46,560 Speaker 3: is going to be buying or selling assets. The assets 222 00:12:46,559 --> 00:12:50,240 Speaker 3: in these cases are things like United States treasuries. Those 223 00:12:50,240 --> 00:12:53,520 Speaker 3: could be bills, notes, or bonds, and also mortgage backed 224 00:12:53,520 --> 00:12:57,920 Speaker 3: securities or nbs. And as the FED buys these things, 225 00:12:58,160 --> 00:13:01,439 Speaker 3: it is creating money in the process because when the 226 00:13:01,480 --> 00:13:05,800 Speaker 3: FED gives you money in exchange for one of these assets, right, 227 00:13:06,200 --> 00:13:08,640 Speaker 3: you have the bond, I, as the FED, buy the 228 00:13:08,679 --> 00:13:10,880 Speaker 3: bond from you. So you give me the bond, and 229 00:13:10,880 --> 00:13:12,480 Speaker 3: what do I give you? Well, I'm going to give 230 00:13:12,520 --> 00:13:14,840 Speaker 3: you cash. Where did that cash come from? While I 231 00:13:14,880 --> 00:13:16,040 Speaker 3: created it? As the FED? 232 00:13:16,160 --> 00:13:16,960 Speaker 2: That's my power. 233 00:13:17,000 --> 00:13:19,320 Speaker 3: I was given that power by Congress, the power to 234 00:13:19,320 --> 00:13:22,440 Speaker 3: create extinguish money. That is what happens when the FED 235 00:13:22,640 --> 00:13:25,959 Speaker 3: puts these assets on its balance sheet, it is injecting 236 00:13:26,000 --> 00:13:31,200 Speaker 3: liquidity into financial markets. Conversely, when the FED sells these assets, 237 00:13:31,240 --> 00:13:32,520 Speaker 3: we're reversing the process. 238 00:13:32,559 --> 00:13:32,880 Speaker 2: Tony. 239 00:13:32,920 --> 00:13:35,720 Speaker 3: So I'm giving you the bond back and you're giving 240 00:13:35,760 --> 00:13:38,320 Speaker 3: me money. What happens to the money you just gave 241 00:13:38,360 --> 00:13:42,200 Speaker 3: me as the FED poof it's gone? It extinguishes the 242 00:13:42,320 --> 00:13:44,200 Speaker 3: money as the FED gets it back. 243 00:13:44,559 --> 00:13:47,040 Speaker 2: And so that is what Kevin wants to do. 244 00:13:47,240 --> 00:13:52,280 Speaker 3: That is anti inflationary, that puts downward pressure on prices, 245 00:13:52,360 --> 00:13:57,400 Speaker 3: not upward pressure on prices. At the same time, having 246 00:13:57,679 --> 00:14:02,360 Speaker 3: less pressure on inflation means that FED can lower interest rates. 247 00:14:02,520 --> 00:14:05,000 Speaker 3: So this is a real win for main street because 248 00:14:05,040 --> 00:14:09,200 Speaker 3: you not only get the benefit of less inflationary pressure 249 00:14:09,240 --> 00:14:12,480 Speaker 3: in the economy, but you also get the added benefit 250 00:14:12,720 --> 00:14:16,440 Speaker 3: of lower interest rates on everything from your mortgages that 251 00:14:16,480 --> 00:14:18,679 Speaker 3: you're trying to get, your credit cards that you open, 252 00:14:19,000 --> 00:14:22,560 Speaker 3: your student loans, your auto loans, you name it. So 253 00:14:22,800 --> 00:14:25,480 Speaker 3: you're talking about not having to spend as much on 254 00:14:25,640 --> 00:14:29,320 Speaker 3: products and services because of less inflationary pressure in the economy, 255 00:14:29,520 --> 00:14:31,520 Speaker 3: but then also not having to spend as much on 256 00:14:31,760 --> 00:14:34,640 Speaker 3: interest every month because it doesn't cost you as much 257 00:14:34,720 --> 00:14:38,560 Speaker 3: to borrow that is such a huge win for as 258 00:14:38,600 --> 00:14:43,480 Speaker 3: you said, Midwest main Street talking to EJ. Antoni, chief 259 00:14:43,560 --> 00:14:46,080 Speaker 3: economist at Heritage dot Org. Before I let you go, 260 00:14:46,920 --> 00:14:49,760 Speaker 3: I've been tracking what's been going on with silver and gold, 261 00:14:49,920 --> 00:14:54,800 Speaker 3: and silver at one twenty one and gold at fifty 262 00:14:55,000 --> 00:14:57,480 Speaker 3: at fifty six hundred, and it would have been climbing 263 00:14:57,520 --> 00:15:00,520 Speaker 3: and climbing and then all of a sudden boom getting 264 00:15:00,560 --> 00:15:03,360 Speaker 3: punched in the neck as it did at the end 265 00:15:03,440 --> 00:15:07,040 Speaker 3: of last week and over the weekend, and still at 266 00:15:07,080 --> 00:15:10,760 Speaker 3: outrageous highs and silver between seventy five and eighty five 267 00:15:11,240 --> 00:15:13,680 Speaker 3: dollars an ounce, and gold and at forty six hundred 268 00:15:13,720 --> 00:15:18,280 Speaker 3: dollars an ounce. These things are the typical hedge against inflation. 269 00:15:19,000 --> 00:15:21,720 Speaker 3: Why did gold and silver go up so much? Why 270 00:15:21,760 --> 00:15:24,600 Speaker 3: did it just take a hit downward? And if you 271 00:15:24,640 --> 00:15:26,800 Speaker 3: want a crystal ball at I'm not going to hold 272 00:15:26,840 --> 00:15:27,200 Speaker 3: you to it. 273 00:15:27,520 --> 00:15:30,120 Speaker 1: Where's it going, Tony? 274 00:15:30,200 --> 00:15:32,600 Speaker 3: Great great questions, and this actually has a lot to 275 00:15:32,640 --> 00:15:34,840 Speaker 3: do with what we were just talking about, Kevin Walsh. 276 00:15:35,200 --> 00:15:38,920 Speaker 3: You know, people have been looking at what's happening in 277 00:15:38,960 --> 00:15:42,000 Speaker 3: Congress where they just cannot get control of the spending. 278 00:15:42,040 --> 00:15:46,000 Speaker 3: They refuse to make substantive cuts to go to the 279 00:15:46,040 --> 00:15:49,280 Speaker 3: federal budget, and they've been watching what Jerome pal is 280 00:15:49,320 --> 00:15:52,840 Speaker 3: not just saying but doing at the FED and realizing 281 00:15:52,880 --> 00:15:57,080 Speaker 3: that there is so much upward pressure on inflation in 282 00:15:57,160 --> 00:16:00,560 Speaker 3: the future because of that deadly combination of so fiscal 283 00:16:00,600 --> 00:16:03,560 Speaker 3: restraint in the halls of Congress and a federal reserve 284 00:16:03,640 --> 00:16:06,680 Speaker 3: that is more than happy to print the money to 285 00:16:06,760 --> 00:16:10,680 Speaker 3: cover the deficits, which is what has been happening under Powell. However, 286 00:16:11,080 --> 00:16:15,480 Speaker 3: with Kevin Walsh's announcement with his nomination, all of a sudden, 287 00:16:16,120 --> 00:16:19,160 Speaker 3: that was water dousing the fire. Now there is not 288 00:16:19,280 --> 00:16:23,040 Speaker 3: anywhere near as much concern that you need to heavily 289 00:16:23,160 --> 00:16:27,920 Speaker 3: hedge against inflation because the policies that we were just 290 00:16:28,000 --> 00:16:31,840 Speaker 3: talking about of Kevin Walsh would be much less inflationary 291 00:16:32,160 --> 00:16:35,440 Speaker 3: at the FED than what we have seen under Jerome Powell. 292 00:16:35,440 --> 00:16:39,200 Speaker 3: And that's even true with the Congress that refuses to 293 00:16:39,240 --> 00:16:44,200 Speaker 3: control the spending. Even with that bad component not having 294 00:16:44,560 --> 00:16:47,840 Speaker 3: Jerome Powell, there would still be a god send for markets. 295 00:16:47,920 --> 00:16:51,440 Speaker 3: So that kind of soothing or calming effect on those 296 00:16:51,480 --> 00:16:56,680 Speaker 3: inflationary fears meant that the monetary premium on gold and 297 00:16:56,720 --> 00:16:57,920 Speaker 3: silver went. 298 00:16:57,840 --> 00:17:03,760 Speaker 1: Way way down. Antoni Chief economist Heritage dot Org. Appreciate 299 00:17:03,840 --> 00:17:07,840 Speaker 1: you coming back to join us. Glad it's all going well. 300 00:17:07,920 --> 00:17:10,760 Speaker 1: E j Antni, thank you. More ahead. I'm Tony Katz 301 00:17:10,800 --> 00:17:15,400 Speaker 1: and this is Tony Kats Today. It's Posadni Bell. 302 00:17:20,480 --> 00:17:23,280 Speaker 4: We look to the future and not just the past. 303 00:17:24,160 --> 00:17:29,199 Speaker 4: So I suppose this party could use a forecast. It 304 00:17:29,359 --> 00:17:33,879 Speaker 4: is my job this February two to look to the 305 00:17:33,960 --> 00:17:37,480 Speaker 4: skies and report back to you that. 306 00:17:37,560 --> 00:17:40,680 Speaker 1: There is a shadow here on my ground. 307 00:17:41,400 --> 00:17:44,520 Speaker 4: Six more weeks of winter abound. 308 00:17:54,720 --> 00:17:57,040 Speaker 1: If you don't love America, I don't know what to 309 00:17:57,119 --> 00:18:01,640 Speaker 1: tell you. Grown men talking to a rodent to get 310 00:18:01,640 --> 00:18:04,800 Speaker 1: a weather forecast. And then one hundred thousand people are like, 311 00:18:04,920 --> 00:18:07,000 Speaker 1: let's turn this into a party. Or it might not 312 00:18:07,080 --> 00:18:08,760 Speaker 1: have been one hundred thousand, but a lot of people. 313 00:18:08,800 --> 00:18:12,040 Speaker 1: Tony Kats, Tony Kats today. Good to be here, Good 314 00:18:12,080 --> 00:18:16,320 Speaker 1: to be with you. It's Groundhog Day, or's the Groundhog's Day. 315 00:18:16,560 --> 00:18:18,879 Speaker 1: And they head over to Gobbler's Knob there and they 316 00:18:18,920 --> 00:18:21,480 Speaker 1: knock on the door and Punk's Tony film comes out. 317 00:18:21,560 --> 00:18:23,639 Speaker 1: He's like, I was taking a nap and they're like, 318 00:18:23,720 --> 00:18:25,840 Speaker 1: too bad. We need you to tell us the weather, 319 00:18:26,080 --> 00:18:30,040 Speaker 1: and the groundhog is like, was Al Roker busy? And 320 00:18:30,040 --> 00:18:33,199 Speaker 1: they're like Al Roker is always busy, And then he 321 00:18:33,240 --> 00:18:35,639 Speaker 1: gives the forecast. The people have a party. It's just 322 00:18:35,840 --> 00:18:41,080 Speaker 1: so how can you not fall in love with it all? 323 00:18:42,160 --> 00:18:48,399 Speaker 1: It's so ridiculous, it's so silly, and yet thousands and 324 00:18:48,480 --> 00:18:50,919 Speaker 1: thousands of people show up and it's a party, and 325 00:18:51,000 --> 00:18:53,199 Speaker 1: all the people who like are from I guess the 326 00:18:53,200 --> 00:18:55,760 Speaker 1: city councilor whatever it is. This is their moment, like 327 00:18:55,800 --> 00:18:57,760 Speaker 1: this is the greatest thing's ever happened to them. And 328 00:18:57,800 --> 00:19:01,360 Speaker 1: they've got the tuxes and the top and the canes. 329 00:19:02,240 --> 00:19:06,840 Speaker 1: How do you It's just such a cool, fun part 330 00:19:07,680 --> 00:19:13,679 Speaker 1: of Americana Kitchen. I don't I don't know how you 331 00:19:13,800 --> 00:19:16,360 Speaker 1: don't love it now. As for whether or not there's 332 00:19:16,359 --> 00:19:18,879 Speaker 1: gonna be six more weeks of winter, it's a rodent. 333 00:19:19,720 --> 00:19:22,679 Speaker 1: I don't pay attention to rodents when it comes to 334 00:19:22,720 --> 00:19:26,040 Speaker 1: the weather. All I know is it's been stupid freezing. 335 00:19:26,400 --> 00:19:30,520 Speaker 1: I was in Florida for a conference stupid freezing, and 336 00:19:30,600 --> 00:19:33,679 Speaker 1: I was told there'd be some global warming once again. 337 00:19:34,080 --> 00:19:37,560 Speaker 1: Al Gore lies, And I'll trust the rodent over al 338 00:19:37,640 --> 00:19:40,040 Speaker 1: Gore any day of the week. I'm Tony Katz, And 339 00:19:40,119 --> 00:19:46,639 Speaker 1: this is Tony Katz today. But what if I'm reading 340 00:19:46,680 --> 00:19:50,400 Speaker 1: the whole situation about Disney wrong. What if that when 341 00:19:50,440 --> 00:19:52,840 Speaker 1: I take a look at the CNBC reporting, another reporting, 342 00:19:52,840 --> 00:19:54,919 Speaker 1: they're telling me the more people are going to theme parks, 343 00:19:55,240 --> 00:19:58,080 Speaker 1: but theme parks are actually flat. And what if I'm 344 00:19:58,119 --> 00:20:00,920 Speaker 1: seeing that there's an increase in subscrip. But maybe that's 345 00:20:00,960 --> 00:20:03,200 Speaker 1: not telling the whole story. Because when I saw this 346 00:20:03,240 --> 00:20:05,679 Speaker 1: story about Disney, and I said, how is it possible 347 00:20:05,680 --> 00:20:07,560 Speaker 1: if the economy is having problems and more people are 348 00:20:07,560 --> 00:20:10,520 Speaker 1: going to Disney? And then how does any of this 349 00:20:10,640 --> 00:20:14,520 Speaker 1: relate to Trump's economic policies? Is there actually some progress 350 00:20:14,560 --> 00:20:17,080 Speaker 1: happening that we don't note? And then you take a 351 00:20:17,080 --> 00:20:20,000 Speaker 1: look that he's already made his nomination to replace Jerome 352 00:20:20,040 --> 00:20:27,000 Speaker 1: Powell with Kevin Walsh Warsh, which is a plan that 353 00:20:27,040 --> 00:20:30,119 Speaker 1: our own doctor Matt Will, has wanted to happen for 354 00:20:30,160 --> 00:20:33,200 Speaker 1: a long time. Now, Tony Katz, Tony Katz today, Good 355 00:20:33,200 --> 00:20:35,320 Speaker 1: to be here, Good to be with you. Doctor Matt 356 00:20:35,320 --> 00:20:39,600 Speaker 1: Will joins me right now, economist at the University of Indianapolis. 357 00:20:39,800 --> 00:20:43,439 Speaker 1: We have talked often about Kevin Walsh as being a 358 00:20:43,480 --> 00:20:46,560 Speaker 1: possible selection as the next FED chair, and what you 359 00:20:46,600 --> 00:20:49,480 Speaker 1: have liked about him and discussed is this idea of 360 00:20:49,560 --> 00:20:53,160 Speaker 1: removing things from the balance sheet. Talk to me about 361 00:20:53,200 --> 00:20:57,359 Speaker 1: the nomination and if he gets his way, what will 362 00:20:57,359 --> 00:21:01,560 Speaker 1: be the immediate difference between a Jerome Powell led FED 363 00:21:02,160 --> 00:21:04,120 Speaker 1: and a Kevin wash lead FED. 364 00:21:05,680 --> 00:21:08,800 Speaker 5: Well, first of all, the markets like this selection. Because 365 00:21:08,800 --> 00:21:14,680 Speaker 5: the markets reacted positively. The commodity prices plummeted, gold, silver, 366 00:21:15,080 --> 00:21:18,520 Speaker 5: because the market believes we will now have control over inflation. 367 00:21:19,040 --> 00:21:21,400 Speaker 5: And this is how he's going to control inflation. I 368 00:21:21,440 --> 00:21:24,640 Speaker 5: love his formula. He's going to do two things. One, 369 00:21:24,800 --> 00:21:27,399 Speaker 5: he's going to cut interest rates. Now that's going to 370 00:21:27,440 --> 00:21:30,359 Speaker 5: cause inflation. People get nervous about that. But he will 371 00:21:30,359 --> 00:21:34,520 Speaker 5: combine it with selling the assets owned on the FED 372 00:21:34,600 --> 00:21:37,159 Speaker 5: balance sheet. He's going to sell treasury bonds, He's going 373 00:21:37,240 --> 00:21:40,240 Speaker 5: to sell mortgages, and when he does that, that will 374 00:21:40,280 --> 00:21:44,280 Speaker 5: pull cash out of the economy. That dual approach is 375 00:21:44,280 --> 00:21:47,480 Speaker 5: the ideal approach. That's the opposite of what Jerome Powell 376 00:21:47,520 --> 00:21:50,000 Speaker 5: was doing. Jerome pal said, no, no, we're going to 377 00:21:50,040 --> 00:21:51,919 Speaker 5: hold all these mortgages, We're going to hold all these 378 00:21:51,920 --> 00:21:54,240 Speaker 5: treasure We're going to keep all this cash floating in 379 00:21:54,280 --> 00:21:58,240 Speaker 5: the economy, and Kevin Warsh has said he's going to 380 00:21:58,320 --> 00:22:01,520 Speaker 5: do the opposite. So the market understands this. I realize 381 00:22:01,560 --> 00:22:04,760 Speaker 5: that's a complicated topic, but people need to understand. The 382 00:22:04,800 --> 00:22:09,120 Speaker 5: market's happy because he is going to control inflation. That 383 00:22:09,240 --> 00:22:13,160 Speaker 5: is the best news. It's going to be independent. There's 384 00:22:13,200 --> 00:22:14,879 Speaker 5: a lot of people in the Senate who are nervous 385 00:22:14,880 --> 00:22:16,960 Speaker 5: about this. They think he's not going to be independent 386 00:22:16,960 --> 00:22:19,280 Speaker 5: because he said, yes, he wants to cut rates like Trump. 387 00:22:19,560 --> 00:22:22,840 Speaker 5: But the people saying that are not knowledgeable. They don't understand. 388 00:22:22,880 --> 00:22:25,639 Speaker 5: He's got a too pronged approach, and the too pronged 389 00:22:25,640 --> 00:22:29,119 Speaker 5: approach is going to be successful as controlling inflation. The 390 00:22:29,160 --> 00:22:31,479 Speaker 5: market believes us. Why do we know the market believes 391 00:22:31,480 --> 00:22:34,760 Speaker 5: it because silver drop and gold drop. The market believes 392 00:22:34,840 --> 00:22:35,840 Speaker 5: he will cut inflation. 393 00:22:37,000 --> 00:22:41,720 Speaker 1: Talking to doctor Matt Will, economist at the University of Indianapolis. 394 00:22:41,760 --> 00:22:45,680 Speaker 1: So when we see that massive silver and gold drop down, 395 00:22:46,119 --> 00:22:49,879 Speaker 1: it's that the wsh pick brings down inflation, which tells 396 00:22:50,000 --> 00:22:53,520 Speaker 1: us that inflation has indeed still been there. Isn't that 397 00:22:53,640 --> 00:22:57,399 Speaker 1: kind of a proof of concept is the wrong word, 398 00:22:57,520 --> 00:23:01,280 Speaker 1: but a proof of our argument Yet me for months 399 00:23:01,280 --> 00:23:04,200 Speaker 1: the inflation's down, Why won't you admit it down where 400 00:23:04,200 --> 00:23:08,399 Speaker 1: it was with Biden? Yes? Done, No, So there's already 401 00:23:08,440 --> 00:23:10,960 Speaker 1: the market saying that if you have this new guy, 402 00:23:11,480 --> 00:23:14,720 Speaker 1: everything on the inflation side will get better. But don't 403 00:23:14,760 --> 00:23:17,160 Speaker 1: those plans have to be implemented and don't those plans 404 00:23:17,200 --> 00:23:17,720 Speaker 1: take time? 405 00:23:18,760 --> 00:23:20,919 Speaker 5: Yes, they do take time, and it's going to take 406 00:23:20,960 --> 00:23:24,360 Speaker 5: some while to implement. But the market reacts to news instantly, 407 00:23:24,440 --> 00:23:27,720 Speaker 5: So as soon as something is known, a fact occurs, 408 00:23:27,800 --> 00:23:30,800 Speaker 5: a piece of information comes out, the market reacts. So 409 00:23:31,080 --> 00:23:33,120 Speaker 5: the fact that he is going to be the said chair, 410 00:23:33,680 --> 00:23:37,399 Speaker 5: the market has reacted positively. So the market reacts to news. 411 00:23:37,640 --> 00:23:40,320 Speaker 5: So he doesn't have to do it yet, but we 412 00:23:40,400 --> 00:23:41,840 Speaker 5: know that he's going to do it because he has 413 00:23:41,840 --> 00:23:44,359 Speaker 5: indicated that he will, and he's been very emphatic about it, 414 00:23:44,400 --> 00:23:47,200 Speaker 5: which is why I support him, even though I got 415 00:23:47,200 --> 00:23:49,520 Speaker 5: to tell you, Tony, I wasn't a fan of his 416 00:23:49,560 --> 00:23:52,119 Speaker 5: in the past, because this is the guy who invented 417 00:23:52,160 --> 00:23:55,000 Speaker 5: Too Big to Sail and yes, he's had a mia 418 00:23:55,080 --> 00:23:57,560 Speaker 5: kulpa on that, but he was the guy that did 419 00:23:57,560 --> 00:23:59,399 Speaker 5: something that you and I have said we don't like. 420 00:24:01,440 --> 00:24:03,640 Speaker 1: Let's move it off of Kevin Washing and get into 421 00:24:03,680 --> 00:24:09,560 Speaker 1: this conversation specifically about Disney. It was an interesting piece 422 00:24:09,560 --> 00:24:12,520 Speaker 1: over there at CNBC that the Disney stock was up 423 00:24:12,960 --> 00:24:16,600 Speaker 1: and it's being led by streaming and theme parks. And 424 00:24:16,640 --> 00:24:19,440 Speaker 1: I said, now, wait a second, how in the world 425 00:24:19,560 --> 00:24:23,880 Speaker 1: is anybody affording to take their family to Disney. It's 426 00:24:23,880 --> 00:24:26,960 Speaker 1: an outrageously expensive thing to do. Never mind the fact 427 00:24:26,960 --> 00:24:30,000 Speaker 1: that I was told that there were people boycotting Disney 428 00:24:30,119 --> 00:24:32,240 Speaker 1: and they're streaming for things that they were putting on there, 429 00:24:32,240 --> 00:24:34,320 Speaker 1: and how they ruined certain things, and I guess that 430 00:24:34,640 --> 00:24:38,159 Speaker 1: didn't hold. As often these things don't hold. E j 431 00:24:38,320 --> 00:24:43,040 Speaker 1: Antoni economist things that the issue regarding Disney has to 432 00:24:43,080 --> 00:24:46,920 Speaker 1: do with income disparities, that there are people who have 433 00:24:47,000 --> 00:24:48,760 Speaker 1: been making more money, the idea of the rich are 434 00:24:48,760 --> 00:24:51,320 Speaker 1: getting richer, and they're now spending their money. And so 435 00:24:51,400 --> 00:24:55,480 Speaker 1: it's not any level of traditional blue collar worker. It's 436 00:24:55,520 --> 00:24:57,760 Speaker 1: mom and dad each making more than one hundred thousand 437 00:24:57,800 --> 00:25:00,760 Speaker 1: a year who could afford to take their family to Disney. 438 00:25:00,800 --> 00:25:04,360 Speaker 1: First things, First, you think the CNBC reporting is right 439 00:25:04,440 --> 00:25:08,840 Speaker 1: or wrong regarding Disney in the stock price, Okay, I 440 00:25:08,920 --> 00:25:09,600 Speaker 1: first have to. 441 00:25:09,520 --> 00:25:12,840 Speaker 5: Just fully disclose Tony that my student fund that my 442 00:25:12,880 --> 00:25:16,040 Speaker 5: students and I manage. We own Disney, and we have 443 00:25:16,119 --> 00:25:18,439 Speaker 5: voted to get rid of Disney, so we haven't sold 444 00:25:18,440 --> 00:25:20,199 Speaker 5: it yet, but we have voted to get rid of it, 445 00:25:20,560 --> 00:25:22,800 Speaker 5: and all this information is part of the reason we 446 00:25:22,880 --> 00:25:27,520 Speaker 5: made that decision. I think the CNBC reporting initially is 447 00:25:27,560 --> 00:25:32,359 Speaker 5: just reproducing the public relations release from Disney. It doesn't 448 00:25:32,359 --> 00:25:35,480 Speaker 5: have a deep dive. How do I know that? Because 449 00:25:35,480 --> 00:25:39,240 Speaker 5: the market's down five points on Disney the stock price 450 00:25:39,280 --> 00:25:42,160 Speaker 5: has plummeted. That's a pretty that's a five percent drop 451 00:25:42,480 --> 00:25:44,920 Speaker 5: at the current price by one oh seven, So the 452 00:25:44,960 --> 00:25:46,920 Speaker 5: market says this is not good news. And let me 453 00:25:47,480 --> 00:25:51,520 Speaker 5: go into a deep dive on the streaming Hulu. They've 454 00:25:51,560 --> 00:25:54,280 Speaker 5: acquired Hulu and in their press release they said, oh, 455 00:25:54,320 --> 00:25:57,840 Speaker 5: Hulu and Disney Plus is up. Well, yeah, because Hulu 456 00:25:57,880 --> 00:26:01,240 Speaker 5: is up, they bought subscribers. I don't grow by buying 457 00:26:01,359 --> 00:26:05,240 Speaker 5: subscribers when you acquire a company like Hulu. So the 458 00:26:05,359 --> 00:26:08,520 Speaker 5: fact is Disney Plus was at one hundred and sixty 459 00:26:08,520 --> 00:26:13,240 Speaker 5: one thousand subscribers two years ago. The forecast that they 460 00:26:13,240 --> 00:26:15,520 Speaker 5: will be this year at one hundred and twenty seven thousand. 461 00:26:15,680 --> 00:26:17,879 Speaker 5: One hundred and twenty seven thousand is lower than one 462 00:26:17,920 --> 00:26:21,919 Speaker 5: hundred and sixty one thousand, and ESPN Plus will be 463 00:26:22,040 --> 00:26:25,359 Speaker 5: down I mean million, I'm a million subscribers. I apologize. 464 00:26:25,560 --> 00:26:29,280 Speaker 5: YESPN Plus will be down from twenty six million to 465 00:26:29,400 --> 00:26:33,000 Speaker 5: twenty three million. So there, they cannot get people to 466 00:26:33,080 --> 00:26:36,959 Speaker 5: buy ESPN Plus. They can't get people to buy Disney Plus. 467 00:26:37,240 --> 00:26:39,840 Speaker 5: Hulu is the only thing they have that is of 468 00:26:39,920 --> 00:26:42,320 Speaker 5: any worth in their streaming service, but they lump it 469 00:26:42,359 --> 00:26:44,840 Speaker 5: all together to make you think they're streaming is great. 470 00:26:44,960 --> 00:26:49,000 Speaker 5: When they're streaming stinks. So I don't think their streaming 471 00:26:49,080 --> 00:26:51,520 Speaker 5: numbers are legitimate, and I think the market agrees with me. 472 00:26:53,480 --> 00:26:57,200 Speaker 1: So how does how in today's world could you possibly 473 00:26:57,240 --> 00:27:01,480 Speaker 1: have an that's one heck of an allegation that's being 474 00:27:01,520 --> 00:27:04,200 Speaker 1: made there. And I hear you that you're not making 475 00:27:04,240 --> 00:27:07,840 Speaker 1: an allegation. This is your personal opinion. This personal opinion 476 00:27:07,880 --> 00:27:11,320 Speaker 1: in view has formed you and for your students there 477 00:27:11,520 --> 00:27:14,840 Speaker 1: at the University of Indianapolis some ideas on where to 478 00:27:14,880 --> 00:27:18,520 Speaker 1: invest and not invest. How does one come to the 479 00:27:18,560 --> 00:27:21,359 Speaker 1: place where you don't trust a number because you're not 480 00:27:21,400 --> 00:27:23,600 Speaker 1: the only person who's ever invested and said, yeah, I 481 00:27:23,600 --> 00:27:25,719 Speaker 1: don't think that's actually what's happening and I have reasons 482 00:27:25,720 --> 00:27:28,679 Speaker 1: for it. Is it the idea of where they've been 483 00:27:28,720 --> 00:27:31,960 Speaker 1: in the past, Is it the idea of other examples 484 00:27:32,000 --> 00:27:34,520 Speaker 1: of over inflation by Disney? Can you get a little 485 00:27:34,520 --> 00:27:37,200 Speaker 1: more specific, Well, let me say. 486 00:27:37,040 --> 00:27:39,320 Speaker 5: That it's not my opinion. I mean, I just gave 487 00:27:39,359 --> 00:27:43,479 Speaker 5: you actual numbers as to what their subscribers are and 488 00:27:43,520 --> 00:27:47,199 Speaker 5: what they were. That's a fact. That's nothing disputable about that. 489 00:27:47,200 --> 00:27:49,080 Speaker 5: It's not an opinion. And if I were to look 490 00:27:49,080 --> 00:27:53,119 Speaker 5: at their affiliacy, So the fees they get from affiliates 491 00:27:53,160 --> 00:27:57,040 Speaker 5: for their networks, that's down from it was about eleven 492 00:27:57,280 --> 00:28:00,320 Speaker 5: point seven billion in twenty twenty three. At the end 493 00:28:00,320 --> 00:28:02,119 Speaker 5: of this year, it's going to be eight point five billion. 494 00:28:03,240 --> 00:28:05,400 Speaker 5: I don't care how you slice it. Eight point five 495 00:28:05,520 --> 00:28:08,479 Speaker 5: is less than eleven point seven billion. That's just a fact. 496 00:28:09,040 --> 00:28:12,560 Speaker 5: So the only thing they're doing well on their entertainment 497 00:28:12,600 --> 00:28:15,240 Speaker 5: side is direct to consumer. They are making money direct 498 00:28:15,280 --> 00:28:18,439 Speaker 5: to consumer. Why, because they're selling all that Disney archive. 499 00:28:18,840 --> 00:28:22,719 Speaker 5: People are buying tons of Disney products. But it's true 500 00:28:22,840 --> 00:28:25,800 Speaker 5: their theme parks are up for the moment, that is true, 501 00:28:25,800 --> 00:28:29,679 Speaker 5: and maybe their theme parks will continue to grow. But Tony, 502 00:28:29,720 --> 00:28:32,679 Speaker 5: that's you know, their theme parks, park experiences, you know, 503 00:28:33,040 --> 00:28:37,000 Speaker 5: ten and a half billion dollars of revenue. That's they 504 00:28:37,000 --> 00:28:39,800 Speaker 5: make more money on licensing their content. They make thirty 505 00:28:39,800 --> 00:28:44,000 Speaker 5: eight billion dollars a year licensing Disney. So yeah, okay, 506 00:28:44,200 --> 00:28:47,280 Speaker 5: they're up ten point five billion in theme parks. Correct, 507 00:28:47,320 --> 00:28:50,440 Speaker 5: good job. Okay, that had a billion dollar increase. That's 508 00:28:50,520 --> 00:28:55,680 Speaker 5: nothing compare to their overall revenue scheme. They're heavily into content, 509 00:28:56,040 --> 00:29:00,840 Speaker 5: they're heavily into streaming services, and those two areas they 510 00:29:00,880 --> 00:29:01,640 Speaker 5: need some improvement. 511 00:29:02,640 --> 00:29:06,600 Speaker 1: Talking to doctor Matt Will, economist at the University of 512 00:29:06,720 --> 00:29:12,440 Speaker 1: Indianapolis before I let you go, my take on this 513 00:29:12,520 --> 00:29:17,640 Speaker 1: economy has been that these first six months of twenty 514 00:29:17,680 --> 00:29:23,920 Speaker 1: twenty six looked very, very rough. They look like a 515 00:29:24,520 --> 00:29:27,480 Speaker 1: kind of resetting of all right, here's what Trump's doing. 516 00:29:27,680 --> 00:29:29,680 Speaker 1: You never know when a tariff is going to get implemented. 517 00:29:29,680 --> 00:29:31,120 Speaker 1: You never never know when a tariff it is going 518 00:29:31,160 --> 00:29:33,720 Speaker 1: to get removed. That leads to a level of uncertainty. 519 00:29:34,320 --> 00:29:37,920 Speaker 1: And after this this spending season, this holiday spending season 520 00:29:38,160 --> 00:29:40,200 Speaker 1: where more was spent on luxury goods but less was 521 00:29:40,240 --> 00:29:44,680 Speaker 1: spent overall. As at least I've looked at the numbers 522 00:29:45,200 --> 00:29:47,640 Speaker 1: and I certainly could be wrong there, but more was 523 00:29:47,680 --> 00:29:50,840 Speaker 1: spent on luxury goods and everyday goods. It is a 524 00:29:50,960 --> 00:29:54,280 Speaker 1: continuing this idea of not wage gap but income gap, 525 00:29:54,360 --> 00:29:57,360 Speaker 1: this idea of the K curve instead of you know 526 00:29:57,800 --> 00:30:01,400 Speaker 1: where the rich getting rich or the poor are getting 527 00:30:01,720 --> 00:30:06,960 Speaker 1: uh poorer and the middle class is is shrinking, although 528 00:30:06,960 --> 00:30:10,000 Speaker 1: one could argue that all wages are going up overall, 529 00:30:10,120 --> 00:30:14,080 Speaker 1: just some of faster than others. I have looked at 530 00:30:14,120 --> 00:30:16,280 Speaker 1: these next six months saying this is going to be rough, 531 00:30:16,320 --> 00:30:18,840 Speaker 1: and it's going into a midterm, and Trump needs a 532 00:30:18,840 --> 00:30:21,040 Speaker 1: couple of things to turn around to be able to 533 00:30:21,080 --> 00:30:23,800 Speaker 1: show some success on the economy, to get back some 534 00:30:23,920 --> 00:30:27,040 Speaker 1: voters who may have left and not be with him 535 00:30:27,040 --> 00:30:31,440 Speaker 1: for the midterm. Is is the pick of wash or 536 00:30:31,520 --> 00:30:33,840 Speaker 1: is there are there any moves that you see in 537 00:30:33,920 --> 00:30:36,640 Speaker 1: the in the in the office, things that have already 538 00:30:36,720 --> 00:30:39,120 Speaker 1: happened that are going to show a result that you 539 00:30:39,360 --> 00:30:43,120 Speaker 1: think either work for the Republicans or are going to 540 00:30:43,120 --> 00:30:44,760 Speaker 1: continue to trend for the Democrats. 541 00:30:46,280 --> 00:30:48,920 Speaker 5: Oh man, you're you're That was a backhanded way of 542 00:30:49,000 --> 00:30:51,920 Speaker 5: making me predict the future. But I will do it. 543 00:30:52,160 --> 00:30:53,880 Speaker 5: I will, I will do it, and I will say 544 00:30:53,960 --> 00:30:57,360 Speaker 5: this I believe in the analogy that I've used all along, 545 00:30:57,480 --> 00:31:00,600 Speaker 5: it's it's a boxing match where Trump is against Trump, 546 00:31:01,320 --> 00:31:03,160 Speaker 5: and he makes some good moves and he makes some 547 00:31:03,240 --> 00:31:06,520 Speaker 5: bad moves, and I think the worst decision is a 548 00:31:06,560 --> 00:31:09,840 Speaker 5: great move, and I believe it's going to lower prices 549 00:31:09,880 --> 00:31:12,240 Speaker 5: going into the midterms. So he's going to get lucky 550 00:31:12,280 --> 00:31:16,320 Speaker 5: on that. If he falls back to tariffs are beautiful, 551 00:31:16,880 --> 00:31:19,440 Speaker 5: I think that's going to hurt him because tariffs are 552 00:31:19,480 --> 00:31:22,600 Speaker 5: not beautiful and they harm the economy. As far as 553 00:31:22,600 --> 00:31:25,240 Speaker 5: the luxury goods, I got to tell you you've seen 554 00:31:25,320 --> 00:31:27,440 Speaker 5: a little bit of a blip. That is true. There's 555 00:31:27,480 --> 00:31:29,280 Speaker 5: been a little bit of a blip. But the leading 556 00:31:29,320 --> 00:31:33,320 Speaker 5: indicator for this is LVMH moet Hennessy's. They own the 557 00:31:33,360 --> 00:31:37,240 Speaker 5: brand names across the board in luxury goods, and their 558 00:31:37,280 --> 00:31:40,200 Speaker 5: revenue has declined from eighty six billion to eighty four 559 00:31:40,280 --> 00:31:43,000 Speaker 5: to eighty They had a blip this year of up 560 00:31:43,000 --> 00:31:46,440 Speaker 5: to eighty two, but that's a blip. They are still 561 00:31:46,440 --> 00:31:49,560 Speaker 5: on the downward trajectory, so the luxury good market is 562 00:31:49,600 --> 00:31:52,680 Speaker 5: still being hurt. I don't know who's going to win 563 00:31:52,720 --> 00:31:55,720 Speaker 5: the battle in Trump versus Trump. I'm hoping that good. 564 00:31:55,720 --> 00:31:59,120 Speaker 5: Trump wins if he cannot believe the tariffs are beautiful 565 00:31:59,120 --> 00:32:02,920 Speaker 5: and to stop using them as a weapon. I think 566 00:32:03,200 --> 00:32:06,440 Speaker 5: this could be a really good year, but I cannot 567 00:32:06,440 --> 00:32:08,920 Speaker 5: predict what he's going to do. If you can, let 568 00:32:08,960 --> 00:32:09,280 Speaker 5: me know. 569 00:32:10,040 --> 00:32:14,760 Speaker 1: Well, I only went with where I hear things anecdotally 570 00:32:14,800 --> 00:32:17,960 Speaker 1: and what the numbers seem to be showing me. So 571 00:32:18,960 --> 00:32:22,720 Speaker 1: they don't show me that things are great. The anecdotally 572 00:32:22,720 --> 00:32:24,720 Speaker 1: in the discussion with business owners don't show me that 573 00:32:24,800 --> 00:32:28,240 Speaker 1: things are great. We talking about manufacturing numbers. They don't 574 00:32:28,280 --> 00:32:30,600 Speaker 1: show me this level of growth that I think is 575 00:32:30,680 --> 00:32:32,880 Speaker 1: necessary in the place is to be able to have 576 00:32:33,000 --> 00:32:35,000 Speaker 1: a strong economy, and it does. I don't think it's 577 00:32:35,000 --> 00:32:37,800 Speaker 1: going to take much, sir, for things to turn around 578 00:32:37,840 --> 00:32:40,720 Speaker 1: or for people to feel good. I have said, gas 579 00:32:40,720 --> 00:32:42,400 Speaker 1: prices have to keep coming down. You have to be 580 00:32:42,440 --> 00:32:44,960 Speaker 1: able to afford a stake to grill in your backyard, 581 00:32:45,000 --> 00:32:46,360 Speaker 1: and you have to be able to afford to take 582 00:32:46,400 --> 00:32:48,800 Speaker 1: your family out to dinner. You do those three things 583 00:32:48,800 --> 00:32:51,480 Speaker 1: and people start feeling good, and I think it'll show 584 00:32:51,880 --> 00:32:55,080 Speaker 1: in an election. That was my three. What do you 585 00:32:55,120 --> 00:32:57,080 Speaker 1: have your three or do you have an opinion on 586 00:32:57,120 --> 00:32:57,760 Speaker 1: what I just said? 587 00:32:58,520 --> 00:33:02,480 Speaker 5: Yes, I think I gave you the positive upside potential 588 00:33:02,560 --> 00:33:06,320 Speaker 5: for Trump. But let me explain the absolute downside horrendous, 589 00:33:06,360 --> 00:33:08,960 Speaker 5: and that is the manufacturing. You hit the nail on 590 00:33:09,000 --> 00:33:12,960 Speaker 5: the head. Manufacturing has been shrinking. The report In fact, 591 00:33:13,040 --> 00:33:17,640 Speaker 5: you know, the report just came out today and okay, 592 00:33:17,680 --> 00:33:21,600 Speaker 5: ready for this. It reversed a ten month decline. We 593 00:33:21,640 --> 00:33:23,880 Speaker 5: now had a growth in manufacturing last month for the 594 00:33:23,920 --> 00:33:28,840 Speaker 5: first time in ten months. That's a good thing. That's positive. 595 00:33:29,400 --> 00:33:32,240 Speaker 5: At the same time, the prices were going through the roof. 596 00:33:32,880 --> 00:33:34,960 Speaker 5: They went I mean, the PMI report came out and 597 00:33:35,000 --> 00:33:37,440 Speaker 5: we had growth in manufacturing, we had growth in new wars. 598 00:33:37,720 --> 00:33:41,480 Speaker 5: It was a great report. So I see some good news. 599 00:33:42,000 --> 00:33:44,280 Speaker 5: But that's not a trend yet. It's not a trend. 600 00:33:44,280 --> 00:33:48,120 Speaker 5: We had ten months of shrinking manufacturing because of tariffs. 601 00:33:48,600 --> 00:33:51,560 Speaker 5: Have we turned the corner yet? I hope we have, 602 00:33:51,760 --> 00:33:55,080 Speaker 5: but I don't know for sure. I know I didn't 603 00:33:55,080 --> 00:33:58,520 Speaker 5: give you. I didn't give you maybe a concrete reply 604 00:33:58,640 --> 00:34:01,400 Speaker 5: to your question, Tony, see what you did? 605 00:34:01,440 --> 00:34:03,960 Speaker 1: You did it like some kind of politician. I see, 606 00:34:04,320 --> 00:34:08,200 Speaker 1: I see, I see where this friendship has gone. Doctor Mattwell, Economist, 607 00:34:08,400 --> 00:34:12,000 Speaker 1: University of Indianapolis, I appreciate you taking the time. Moore's 608 00:34:12,040 --> 00:34:14,400 Speaker 1: coming up on Tony Katz. This is Tony Katz today. 609 00:34:14,680 --> 00:34:16,240 Speaker 1: So it seems that there are a bunch of states 610 00:34:16,239 --> 00:34:19,640 Speaker 1: that have not handled the storm well. And the look 611 00:34:19,800 --> 00:34:26,480 Speaker 1: at Tennessee and the electric issues has been really something 612 00:34:26,600 --> 00:34:29,880 Speaker 1: to behold. Tony Katz, Tony Katz today, good to be 613 00:34:29,960 --> 00:34:32,719 Speaker 1: with you. They have not been able to keep up 614 00:34:32,760 --> 00:34:37,280 Speaker 1: with the power. You still have over one hundred thousand 615 00:34:37,320 --> 00:34:41,840 Speaker 1: people without power. It's day seven now because of these storms. 616 00:34:41,880 --> 00:34:46,520 Speaker 1: It has been incredible and there's been a very interesting 617 00:34:46,560 --> 00:34:49,040 Speaker 1: conversation of well, part of the problem here is that 618 00:34:50,080 --> 00:34:55,200 Speaker 1: Tennessee has a lot of locally owned utilities, and maybe 619 00:34:55,239 --> 00:34:59,000 Speaker 1: government isn't the group that should own utilities, which I 620 00:34:59,040 --> 00:35:01,000 Speaker 1: got to dig in a little dep there's a very 621 00:35:01,000 --> 00:35:05,759 Speaker 1: interesting argument there. But then there is New York, which 622 00:35:05,800 --> 00:35:09,719 Speaker 1: elected Mam Donnie and the streets weren't plowed and the 623 00:35:09,760 --> 00:35:12,960 Speaker 1: garbage is piling up, and everyone is very clear, this 624 00:35:13,040 --> 00:35:15,319 Speaker 1: is not what I wanted, this is not it, this 625 00:35:15,480 --> 00:35:17,840 Speaker 1: is radical. Well, yeah, you voted for communists. What do 626 00:35:17,920 --> 00:35:21,920 Speaker 1: you expect You voted for a guy who aligns himself 627 00:35:21,960 --> 00:35:25,840 Speaker 1: politically with people who kill those who disagree with them. 628 00:35:26,200 --> 00:35:30,160 Speaker 1: Every communist does. I don't care if you're the local official. 629 00:35:30,200 --> 00:35:32,080 Speaker 1: I don't care if you're Mom Donnie. I don't care 630 00:35:32,120 --> 00:35:35,359 Speaker 1: if you're just some tool on social media. If you're 631 00:35:35,400 --> 00:35:38,000 Speaker 1: aligned with the communists, you're aligned with a group of 632 00:35:38,040 --> 00:35:42,120 Speaker 1: people who are historically are murderers, but most importantly can't 633 00:35:42,160 --> 00:35:45,480 Speaker 1: get anything done, and if you want something done, they 634 00:35:45,560 --> 00:35:50,200 Speaker 1: will disappear you for saying it out loud. Anyone's surprised 635 00:35:50,200 --> 00:35:53,279 Speaker 1: that Mam Donnie can't do the job, because if I 636 00:35:53,360 --> 00:35:56,440 Speaker 1: now have to hear leftists and communists complain about Mom Donnie, 637 00:35:56,640 --> 00:35:58,840 Speaker 1: I don't I don't think there's enough burbage for me 638 00:35:58,920 --> 00:36:02,759 Speaker 1: to drink to enjoy that. Find everything at Tonycotts dot 639 00:36:02,760 --> 00:36:03,400 Speaker 1: com tomorrow. 640 00:36:03,440 --> 00:36:04,319 Speaker 2: Everyone take care.