1 00:00:00,040 --> 00:00:02,200 Speaker 1: With us around the table on place to say Gary 2 00:00:02,240 --> 00:00:03,080 Speaker 1: Cowed morning. 3 00:00:02,800 --> 00:00:04,080 Speaker 2: Gary, Good morning, John. Thanks. 4 00:00:04,080 --> 00:00:06,720 Speaker 1: I reflecting on our conversations we used to have many 5 00:00:06,800 --> 00:00:08,800 Speaker 1: years ago when you were in front of the White 6 00:00:08,800 --> 00:00:11,960 Speaker 1: House and you use this term the threes, Are we 7 00:00:12,000 --> 00:00:13,680 Speaker 1: going back to the threes? Is that what you think 8 00:00:13,680 --> 00:00:14,280 Speaker 1: we're going back to? 9 00:00:15,120 --> 00:00:17,000 Speaker 3: It feels like we're going back to the threes, you know, 10 00:00:17,160 --> 00:00:19,400 Speaker 3: in the threes. For those that don't remember me standing 11 00:00:19,400 --> 00:00:20,800 Speaker 3: in front of the White House talking about the threes, 12 00:00:21,000 --> 00:00:24,440 Speaker 3: I was talking about three percent GDP, three percent unemployment 13 00:00:24,640 --> 00:00:27,080 Speaker 3: and three percent wage growth. That was sort of the 14 00:00:27,120 --> 00:00:30,080 Speaker 3: sweet spot that we were trying to achieve at the time, 15 00:00:30,400 --> 00:00:33,280 Speaker 3: and we thought that was a really good solid place 16 00:00:33,440 --> 00:00:35,800 Speaker 3: for the United States economy to be, and that was 17 00:00:35,800 --> 00:00:37,200 Speaker 3: sort of the goal. That was sort of the middle 18 00:00:37,200 --> 00:00:39,159 Speaker 3: of the target that we were trying to hit, you know, 19 00:00:39,280 --> 00:00:42,040 Speaker 3: month after month, as we were talking on those fridays 20 00:00:42,159 --> 00:00:43,520 Speaker 3: after we released job data. 21 00:00:43,680 --> 00:00:45,400 Speaker 1: What I've noticed from you is that we seem to 22 00:00:45,440 --> 00:00:46,880 Speaker 1: have forgotten what normalists. 23 00:00:47,000 --> 00:00:49,080 Speaker 2: Well, we totally forgot what You've. 24 00:00:48,920 --> 00:00:51,120 Speaker 1: Been around for a long time. You've seen many cycles 25 00:00:51,440 --> 00:00:52,200 Speaker 1: what is normal. 26 00:00:52,440 --> 00:00:56,160 Speaker 3: So this is a campaign I'm on in many respects 27 00:00:56,160 --> 00:00:57,640 Speaker 3: that we have forgot what normalists. 28 00:00:58,040 --> 00:01:00,040 Speaker 2: So to go back to what normal. 29 00:00:59,800 --> 00:01:02,400 Speaker 3: Is have to go back to the post two thousand 30 00:01:02,440 --> 00:01:05,559 Speaker 3: and eight financial crisis, because since two thousand and eight, 31 00:01:06,240 --> 00:01:09,760 Speaker 3: you know, the FED has been the overwhelming dominant feature 32 00:01:10,160 --> 00:01:12,920 Speaker 3: of financial markets. So prior to two thousand and eight, 33 00:01:12,959 --> 00:01:15,440 Speaker 3: you know, FED meetings were important, but we didn't live 34 00:01:15,480 --> 00:01:17,520 Speaker 3: in die off FED meetings. In fact, I'm old enough 35 00:01:17,520 --> 00:01:20,400 Speaker 3: to remember when money supply was what drove markets. Now 36 00:01:20,440 --> 00:01:23,080 Speaker 3: I'm really dating myself on money supply there. But then 37 00:01:23,160 --> 00:01:25,800 Speaker 3: we get to two thousand and eight and the FED 38 00:01:25,880 --> 00:01:28,960 Speaker 3: goes into the whole policy of zero interest rates and 39 00:01:29,959 --> 00:01:33,919 Speaker 3: quantitative easy, followed by many other central banks around the world. 40 00:01:34,000 --> 00:01:35,959 Speaker 3: And as the FED goes into the zero interest rate 41 00:01:35,959 --> 00:01:38,639 Speaker 3: policy and they continue to build a bigger and bigger 42 00:01:38,720 --> 00:01:42,920 Speaker 3: balance sheet, they become the dominant factor in financial markets. 43 00:01:43,000 --> 00:01:44,720 Speaker 3: Not just in the fixed think of markets, not just 44 00:01:44,760 --> 00:01:47,680 Speaker 3: in the rate markets. But when you literally have zero 45 00:01:47,840 --> 00:01:51,480 Speaker 3: rates in return, you're literally forcing people out into the 46 00:01:51,560 --> 00:01:55,320 Speaker 3: risk spectrum. So you bring many, many other asset classes 47 00:01:55,320 --> 00:01:58,440 Speaker 3: that have historically not been appealing to people, You bring 48 00:01:58,480 --> 00:02:01,600 Speaker 3: them into play. Because the search for return, the search 49 00:02:01,680 --> 00:02:04,600 Speaker 3: for yield, you go farther out on the respector so, 50 00:02:04,640 --> 00:02:07,320 Speaker 3: we lived through the two thousand and eighth period all 51 00:02:07,360 --> 00:02:09,760 Speaker 3: the way up to basically, I would say COVID with 52 00:02:09,840 --> 00:02:13,200 Speaker 3: this zero interest rate policy. People looking for alternative assets, 53 00:02:13,320 --> 00:02:16,679 Speaker 3: looking for yield, searching for it in unusual places. 54 00:02:17,120 --> 00:02:19,680 Speaker 2: We come into the COVID period. 55 00:02:19,800 --> 00:02:22,040 Speaker 3: And sort of the Fed stays in their zero interest 56 00:02:22,080 --> 00:02:24,280 Speaker 3: rate policy because they have no idea, really what's happening. 57 00:02:24,480 --> 00:02:26,400 Speaker 3: I'm not sure that that's a mistake. You know, when 58 00:02:26,400 --> 00:02:28,640 Speaker 3: you don't know what's happening, don't make a change. And 59 00:02:28,680 --> 00:02:31,560 Speaker 3: then all of a sudden, we get into the we'll 60 00:02:31,560 --> 00:02:35,480 Speaker 3: call it the Biden administration, and we've gone through five 61 00:02:35,560 --> 00:02:38,639 Speaker 3: stimulus packages in the United States, and all of a sudden, 62 00:02:38,680 --> 00:02:42,200 Speaker 3: we've got us consumers with the best balance sheet they've 63 00:02:42,200 --> 00:02:46,520 Speaker 3: had in their life, enormous amount of disposable income, the 64 00:02:46,600 --> 00:02:49,200 Speaker 3: ability to finally go out and spend it after not 65 00:02:49,360 --> 00:02:51,880 Speaker 3: having the ability for almost two years to spend anything 66 00:02:51,919 --> 00:02:53,919 Speaker 3: that Like I said, you can't buy it at the 67 00:02:53,960 --> 00:02:56,720 Speaker 3: grocery store, FedEx or UPS or the United States Mail 68 00:02:56,720 --> 00:02:59,320 Speaker 3: Service can't deliver to you can't buy it. We now 69 00:02:59,360 --> 00:03:01,400 Speaker 3: have the ability to go out and spend that money 70 00:03:01,480 --> 00:03:03,480 Speaker 3: and lo and behold, we end up in a highly 71 00:03:03,520 --> 00:03:08,160 Speaker 3: inflationary cycle. So the FED goes from this zero interest 72 00:03:08,200 --> 00:03:11,680 Speaker 3: rate trying to drive economic growth, trying to drive inflation. 73 00:03:12,720 --> 00:03:15,320 Speaker 3: And I always remind my best friends, you know, if 74 00:03:15,320 --> 00:03:18,440 Speaker 3: you would have picked up any newspaper prior to two thousand, 75 00:03:18,639 --> 00:03:20,720 Speaker 3: in that two thousand and eight to two thousand and 76 00:03:20,919 --> 00:03:23,359 Speaker 3: twenty period, the FED headline would have been can the 77 00:03:23,400 --> 00:03:24,800 Speaker 3: Fed ever create inflation again? 78 00:03:25,360 --> 00:03:26,320 Speaker 2: So now we're back in. 79 00:03:26,240 --> 00:03:29,840 Speaker 3: This highly inflated period, and the FED goes from you know, 80 00:03:29,960 --> 00:03:32,640 Speaker 3: quantitative ease and to quantitative tightening, to zero interust rate 81 00:03:32,680 --> 00:03:35,520 Speaker 3: policies to fifty basis points sort of month in and 82 00:03:35,640 --> 00:03:40,160 Speaker 3: month out. So we have been through this fifteen plus 83 00:03:40,240 --> 00:03:43,800 Speaker 3: year cycle of what I would call abnormal. On top 84 00:03:43,840 --> 00:03:46,360 Speaker 3: of that, we end up with this inverted yield curve. 85 00:03:46,400 --> 00:03:49,920 Speaker 3: Because everyone's convinced the Fed's raising rates. The FED has 86 00:03:49,960 --> 00:03:53,000 Speaker 3: to slow down the economy. We have to see job degradation, 87 00:03:53,600 --> 00:03:56,440 Speaker 3: so we have to go into recession. I think the 88 00:03:56,480 --> 00:03:59,360 Speaker 3: missing component there was how strong personal balance sheets were. 89 00:04:00,080 --> 00:04:01,119 Speaker 2: Don't go into recession. 90 00:04:01,680 --> 00:04:03,880 Speaker 3: We still have an inverted yield curve, which I don't 91 00:04:03,880 --> 00:04:04,680 Speaker 3: think is normal. 92 00:04:05,160 --> 00:04:07,040 Speaker 2: So I think now for. 93 00:04:07,040 --> 00:04:10,200 Speaker 3: The first time, in this fifteen year period, we're getting 94 00:04:10,240 --> 00:04:13,520 Speaker 3: to position where we're starting, and we're just at the 95 00:04:13,640 --> 00:04:17,040 Speaker 3: very beginning of heading back towards normal and what normal 96 00:04:17,120 --> 00:04:19,839 Speaker 3: would be, and so reminding people a little bit what 97 00:04:19,880 --> 00:04:22,240 Speaker 3: normal looks like. It's going back to the three three three. 98 00:04:22,640 --> 00:04:25,640 Speaker 3: But historically we have a positively shaped yield curve in 99 00:04:25,640 --> 00:04:29,040 Speaker 3: the United States, we have a risk premium historically. If 100 00:04:29,080 --> 00:04:32,080 Speaker 3: you look at ten year yields, the ten year average 101 00:04:32,200 --> 00:04:34,440 Speaker 3: yield in the United States, you can either put in 102 00:04:34,480 --> 00:04:36,440 Speaker 3: the vulgar fed or you can take out the vulgar fed. 103 00:04:36,880 --> 00:04:40,200 Speaker 3: With the vulgar fed, it's it's it's four point six 104 00:04:40,200 --> 00:04:42,400 Speaker 3: percent without its four point three percent. 105 00:04:42,680 --> 00:04:44,320 Speaker 4: If you put aside all of this right, if you 106 00:04:44,360 --> 00:04:47,479 Speaker 4: take a look at the FED and say, okay, it's 107 00:04:47,480 --> 00:04:49,960 Speaker 4: on the back table, you start to look at the economy. 108 00:04:50,040 --> 00:04:50,880 Speaker 1: It looks pretty good. 109 00:04:51,000 --> 00:04:52,080 Speaker 4: It doesn't look like we're going. 110 00:04:51,960 --> 00:04:54,279 Speaker 2: Into recession a great. Why do people feel so bad? 111 00:04:55,480 --> 00:05:00,120 Speaker 3: Here's why people feel bad. Like the inflation number or 112 00:05:00,120 --> 00:05:03,200 Speaker 3: the inflation data is the most peculiar data we have 113 00:05:03,279 --> 00:05:06,600 Speaker 3: in the United States. We count inflation either month over 114 00:05:06,680 --> 00:05:09,760 Speaker 3: month or year over year. We don't zero baseline it 115 00:05:09,800 --> 00:05:13,640 Speaker 3: anywhere and so when we talk about inflation, we say 116 00:05:13,760 --> 00:05:16,320 Speaker 3: how much inflation do we have over last month? And 117 00:05:16,320 --> 00:05:18,120 Speaker 3: if we had inflation month over month, it means what 118 00:05:18,160 --> 00:05:19,920 Speaker 3: you paid last month this year and what you're paying 119 00:05:19,960 --> 00:05:22,560 Speaker 3: this month is higher. If we have inflation year over year, 120 00:05:22,760 --> 00:05:27,200 Speaker 3: same thing. So we've seen the compounding effect of a 121 00:05:27,360 --> 00:05:29,480 Speaker 3: three percent inflation year, a nine percent in place year, 122 00:05:29,480 --> 00:05:31,800 Speaker 3: a three percent all that adds up to twenty plus percent. 123 00:05:32,279 --> 00:05:35,360 Speaker 3: So when you're a consumer today, you're a hard working consumer. Today, 124 00:05:35,920 --> 00:05:39,480 Speaker 3: your basket of groceries is twenty plus percent more than 125 00:05:39,520 --> 00:05:41,400 Speaker 3: you think it should be worth and what it was 126 00:05:41,480 --> 00:05:45,240 Speaker 3: worth two years ago. So the compounding effect of inflation, 127 00:05:45,360 --> 00:05:48,200 Speaker 3: because we don't have a zero baseline basket, is really 128 00:05:48,200 --> 00:05:51,719 Speaker 3: what's affecting people's mentality. The second part of the equation 129 00:05:51,880 --> 00:05:55,400 Speaker 3: is people are working harder. They're working more jobs to 130 00:05:55,440 --> 00:05:57,640 Speaker 3: be able to buy what they want to buy. The 131 00:05:57,760 --> 00:06:00,000 Speaker 3: savings from the pandemic is gone. 132 00:06:00,120 --> 00:06:00,880 Speaker 2: It's not all gone. 133 00:06:00,920 --> 00:06:02,400 Speaker 3: There's still a lot of it sitting in treasury and 134 00:06:02,440 --> 00:06:02,920 Speaker 3: money market. 135 00:06:03,160 --> 00:06:04,160 Speaker 2: But if you look at the. 136 00:06:04,040 --> 00:06:08,440 Speaker 3: Financial position of many Americans that went from high consumer 137 00:06:08,480 --> 00:06:11,880 Speaker 3: debt going into the pandemic, then they went from consumer 138 00:06:11,920 --> 00:06:14,000 Speaker 3: debt being wiped out. They went to high savings right 139 00:06:14,080 --> 00:06:16,360 Speaker 3: because they were sort of forced in. They've actually spent 140 00:06:16,400 --> 00:06:18,120 Speaker 3: all that money back. They're back the way they started. 141 00:06:18,120 --> 00:06:20,719 Speaker 3: They're back at consumer debt. So they do care a 142 00:06:20,760 --> 00:06:23,760 Speaker 3: lot about the inflation and they care about their purchasing power. 143 00:06:24,000 --> 00:06:28,440 Speaker 3: And we are talking about wages today exceeding inflation, but 144 00:06:28,480 --> 00:06:30,720 Speaker 3: that's on a sort of spot market basis. We haven't 145 00:06:30,720 --> 00:06:32,360 Speaker 3: talked about it over a one year or a. 146 00:06:32,279 --> 00:06:33,040 Speaker 2: Two year basis. 147 00:06:33,160 --> 00:06:35,000 Speaker 4: You know, I got to say, I wonder how messy 148 00:06:35,040 --> 00:06:37,000 Speaker 4: the data is as well. And if you were still 149 00:06:37,000 --> 00:06:40,480 Speaker 4: the head of the Economic Council advising the president, how 150 00:06:40,480 --> 00:06:43,719 Speaker 4: would you communicate the idea that we're seeing churn, massive 151 00:06:43,800 --> 00:06:49,360 Speaker 4: churn in response to technological advancement. Something about eBay laying 152 00:06:49,400 --> 00:06:51,520 Speaker 4: off nine percent of its staff because it needs to 153 00:06:51,720 --> 00:06:54,440 Speaker 4: upgrade certain things, or SAP in Germany. You're seeing this 154 00:06:54,520 --> 00:06:57,480 Speaker 4: again and again. How much is that featuring into the 155 00:06:57,520 --> 00:06:58,559 Speaker 4: messiness of the data. 156 00:06:59,160 --> 00:07:01,080 Speaker 3: You know, we always have mess with data, you know, 157 00:07:01,279 --> 00:07:05,000 Speaker 3: we're always we never really get totally totally clean data. 158 00:07:05,160 --> 00:07:07,520 Speaker 3: You know, we could talk about all the revisions to 159 00:07:07,600 --> 00:07:10,440 Speaker 3: the unemployment data. You know, it's a survey data, and 160 00:07:10,480 --> 00:07:12,960 Speaker 3: then they go, they go and revise the data from 161 00:07:12,960 --> 00:07:15,320 Speaker 3: a month and two months ago, and sometimes the revisions 162 00:07:15,320 --> 00:07:16,000 Speaker 3: are bigger. 163 00:07:15,760 --> 00:07:18,840 Speaker 2: Than the actual data. But we of course fixate. 164 00:07:18,520 --> 00:07:20,880 Speaker 3: On the data on that Friday, and then a month 165 00:07:20,960 --> 00:07:24,080 Speaker 3: later we say, oh, that data was completely wrong. So 166 00:07:25,040 --> 00:07:27,440 Speaker 3: if you're in the world of looking for the clean, 167 00:07:27,520 --> 00:07:31,720 Speaker 3: pure answer, our economic data doesn't give you really clean, 168 00:07:31,840 --> 00:07:34,120 Speaker 3: pure answers on a real time basis. If you look 169 00:07:34,160 --> 00:07:36,119 Speaker 3: at the data over a cycle and over a period, 170 00:07:36,200 --> 00:07:38,760 Speaker 3: it gets very clean over time. I think you've got 171 00:07:38,760 --> 00:07:40,800 Speaker 3: to look at the data on a longer period of trend. 172 00:07:41,000 --> 00:07:42,560 Speaker 2: That's why a lot of people like like I look 173 00:07:42,600 --> 00:07:43,400 Speaker 2: at the Jultry report. 174 00:07:43,520 --> 00:07:45,920 Speaker 3: I think jolts is really interesting to me because it 175 00:07:45,960 --> 00:07:49,560 Speaker 3: shows job openings, amount of people looking. 176 00:07:49,600 --> 00:07:50,560 Speaker 2: But like what's in there. 177 00:07:50,560 --> 00:07:53,080 Speaker 3: There's some really interesting numbers in there. It shows you 178 00:07:53,080 --> 00:07:55,640 Speaker 3: how many people quit their job. Quits to me is 179 00:07:55,680 --> 00:07:58,680 Speaker 3: like one of the important numbers. People only quit their 180 00:07:58,760 --> 00:08:01,520 Speaker 3: job when they feel like there's a better job out there, 181 00:08:01,880 --> 00:08:04,880 Speaker 3: So it's a pure measure of what people's psychology on 182 00:08:04,960 --> 00:08:07,560 Speaker 3: the market is. When the quit rate goes up, it 183 00:08:07,680 --> 00:08:10,680 Speaker 3: means I believe I can get a better job, better paying, 184 00:08:10,920 --> 00:08:12,000 Speaker 3: better quality of life. 185 00:08:12,080 --> 00:08:13,240 Speaker 2: And I'm not worried about quitting. 186 00:08:13,280 --> 00:08:15,480 Speaker 3: When the quick rate goes down, people are saying, Okay, 187 00:08:15,520 --> 00:08:17,840 Speaker 3: the job market's not very good. I should be happy 188 00:08:17,840 --> 00:08:19,160 Speaker 3: with the job I have. I don't love it, but 189 00:08:19,200 --> 00:08:20,720 Speaker 3: I should be happy happy with the job I have. 190 00:08:21,040 --> 00:08:22,200 Speaker 2: So there's data out there. 191 00:08:22,200 --> 00:08:24,160 Speaker 3: If you put it all together, I think you can 192 00:08:24,200 --> 00:08:26,040 Speaker 3: create a pretty clean picture for yourself. 193 00:08:26,120 --> 00:08:29,600 Speaker 1: Unlike this administration. Gary would actually communicate Ramo that would 194 00:08:29,600 --> 00:08:31,120 Speaker 1: be the answer to that, but we won't get into 195 00:08:31,160 --> 00:08:33,800 Speaker 1: that now. With us around a table for some final thoughts, 196 00:08:33,960 --> 00:08:35,800 Speaker 1: Gary cond Gary, I know you don't want to talk 197 00:08:35,800 --> 00:08:37,400 Speaker 1: about a horse Rice. We won't do that, But I 198 00:08:37,400 --> 00:08:40,080 Speaker 1: do want to talk about policy. Sure, tax cuts, Tarrists. 199 00:08:40,200 --> 00:08:42,480 Speaker 1: Let's start with tax cuts. Haven't you been talked about 200 00:08:42,520 --> 00:08:44,280 Speaker 1: You and I caught up yesterday, and I have to say, 201 00:08:44,559 --> 00:08:46,559 Speaker 1: I haven't talked about the tax cuts and all the 202 00:08:46,600 --> 00:08:48,240 Speaker 1: money that starts to come back into the country for 203 00:08:48,240 --> 00:08:50,440 Speaker 1: the best part of six years or something like that. 204 00:08:50,480 --> 00:08:53,640 Speaker 1: How relevant are yesterday's tax cuts to today's economy. 205 00:08:53,800 --> 00:08:56,840 Speaker 3: Well, the twenty seventeen tax cuts, and I think they're 206 00:08:57,440 --> 00:09:00,560 Speaker 3: really important. So this is back on the theme of normalization. 207 00:09:01,280 --> 00:09:04,559 Speaker 3: So since we really got the tax cuts through that 208 00:09:04,600 --> 00:09:08,640 Speaker 3: were signed December twenty second of twenty seventeen. We sort 209 00:09:08,679 --> 00:09:12,760 Speaker 3: of had eighteen nineteen. We had two normalized years. Eighteen 210 00:09:12,840 --> 00:09:15,719 Speaker 3: was sort of an implementation year, and we saw some 211 00:09:15,800 --> 00:09:17,320 Speaker 3: really amazing things start happening. 212 00:09:17,320 --> 00:09:19,840 Speaker 2: We saw real repatriation. 213 00:09:19,480 --> 00:09:22,680 Speaker 3: Of foreign overseas money, so trillion and a half dollars 214 00:09:22,800 --> 00:09:25,400 Speaker 3: come back in the United States because in the old 215 00:09:25,440 --> 00:09:28,520 Speaker 3: tax system, corporations because leave their money offshore and they 216 00:09:28,520 --> 00:09:30,640 Speaker 3: didn't have to pay US taxes, so they brought it back. 217 00:09:30,840 --> 00:09:33,640 Speaker 3: We deemed that money to have brought back, so we 218 00:09:33,720 --> 00:09:34,439 Speaker 3: taxed it. 219 00:09:34,440 --> 00:09:35,400 Speaker 2: It got brought back. 220 00:09:36,000 --> 00:09:38,000 Speaker 3: I think when you see what's going on as the 221 00:09:38,040 --> 00:09:40,800 Speaker 3: manufacturing boom in the United States right now, which started 222 00:09:40,960 --> 00:09:43,280 Speaker 3: in that period of time, a lot of that has 223 00:09:43,320 --> 00:09:46,560 Speaker 3: to do with this repatriated money. Historically, when companies couldn't 224 00:09:46,559 --> 00:09:49,040 Speaker 3: bring their money back, they had to invest it overseas. 225 00:09:49,240 --> 00:09:52,640 Speaker 3: They built manufacturing overseas, they invested in property, plant and equipment. 226 00:09:52,920 --> 00:09:55,280 Speaker 3: Now that they're being tax no matter whether they bring 227 00:09:55,320 --> 00:09:57,440 Speaker 3: it back or not, they're bringing it back, they're paying 228 00:09:57,480 --> 00:09:58,160 Speaker 3: the tax. 229 00:09:57,920 --> 00:09:58,720 Speaker 2: And they're investing. 230 00:09:58,960 --> 00:10:02,640 Speaker 3: So you've seen the creation of manufacturing in the United States. 231 00:10:02,720 --> 00:10:05,959 Speaker 3: This started in twenty eighteen and nineteen as companies started 232 00:10:06,000 --> 00:10:11,040 Speaker 3: bringing back their repatriated money. You've also seen the growth 233 00:10:11,040 --> 00:10:13,120 Speaker 3: that we've seen in consumption. You've seen the growth in the. 234 00:10:13,040 --> 00:10:15,240 Speaker 2: Middle class is ability to spend money. 235 00:10:15,360 --> 00:10:19,480 Speaker 3: Hard working individuals got a real tax cut, and that's 236 00:10:19,520 --> 00:10:22,839 Speaker 3: why I think people have missed the economic picture of 237 00:10:22,840 --> 00:10:26,360 Speaker 3: the United States so badly. Everyone calling for this recession 238 00:10:26,480 --> 00:10:28,800 Speaker 3: over the last year and a half, I don't think 239 00:10:28,840 --> 00:10:33,920 Speaker 3: they understood the additional consumptive powers that the tax cuts created. 240 00:10:34,480 --> 00:10:39,120 Speaker 3: We put real additional disposable income into people's pockets, and 241 00:10:39,160 --> 00:10:41,520 Speaker 3: we did it on purpose. We made some very conscientious 242 00:10:41,520 --> 00:10:46,520 Speaker 3: decisions to make sure that we were delivering real taxable 243 00:10:46,640 --> 00:10:51,000 Speaker 3: returns or less tax to the hardest working individuals in America. 244 00:10:51,080 --> 00:10:53,000 Speaker 3: And it takes time for that to feed through the system. 245 00:10:53,080 --> 00:10:55,760 Speaker 3: It doesn't happen year one and then we go through COVID, 246 00:10:55,840 --> 00:11:00,880 Speaker 3: So you get all these unnatural, dominous and now we're 247 00:11:00,880 --> 00:11:03,880 Speaker 3: back that what I say is more normal behavior. People 248 00:11:03,920 --> 00:11:07,320 Speaker 3: are understanding what their taxable income is. You know, we're 249 00:11:07,360 --> 00:11:10,120 Speaker 3: some of the programs that we put in twenty seventeen 250 00:11:10,160 --> 00:11:12,680 Speaker 3: have expired, and I'm happy to say that we're seeing 251 00:11:12,760 --> 00:11:15,959 Speaker 3: some bipartisan legislation to reinstate some of those programs. 252 00:11:16,000 --> 00:11:18,719 Speaker 2: There's a bill going through the House right now to. 253 00:11:18,720 --> 00:11:22,400 Speaker 3: Reinstate some of the child tax credits along with accelerated 254 00:11:22,440 --> 00:11:25,640 Speaker 3: appreciation and the write off of R and D credits. 255 00:11:25,679 --> 00:11:28,120 Speaker 3: We think both sides of that equation they were in 256 00:11:28,160 --> 00:11:29,040 Speaker 3: the original tax bill. 257 00:11:29,040 --> 00:11:30,120 Speaker 2: We think they're both important. 258 00:11:30,440 --> 00:11:32,520 Speaker 3: You know, you're taking care of both sides of the equation. 259 00:11:32,600 --> 00:11:34,960 Speaker 3: We have to take care of hard working families with children, 260 00:11:35,080 --> 00:11:37,640 Speaker 3: and we have to incentivize companies to continue to do 261 00:11:37,760 --> 00:11:39,560 Speaker 3: R and D and continue to invest in the country. 262 00:11:39,559 --> 00:11:41,959 Speaker 4: There are those individual tax Customer twenty seventeen are set 263 00:11:41,960 --> 00:11:42,679 Speaker 4: to be expired. 264 00:11:43,360 --> 00:11:47,080 Speaker 1: As you say, that helps individuals and taxes. 265 00:11:46,640 --> 00:11:49,320 Speaker 4: But if you have a ten percent tariff wall around 266 00:11:49,360 --> 00:11:52,000 Speaker 4: the United States, it's a massive tax on consumers. 267 00:11:52,840 --> 00:11:53,200 Speaker 2: It is. 268 00:11:53,320 --> 00:11:57,200 Speaker 3: So Look, the tariff wall is something that needs to 269 00:11:57,200 --> 00:12:01,040 Speaker 3: be discussed. I know it's a potential. It's being discussed 270 00:12:01,040 --> 00:12:04,480 Speaker 3: out there, and it's an idea. It's something that's being 271 00:12:04,559 --> 00:12:07,080 Speaker 3: used to potentially pay for the. 272 00:12:06,960 --> 00:12:08,920 Speaker 2: Future tax plan. When it negated. 273 00:12:09,559 --> 00:12:12,920 Speaker 3: It's like, I think we shouldn't get too far ahead 274 00:12:12,920 --> 00:12:15,839 Speaker 3: of ourselves right now. As you said, the personal side 275 00:12:15,840 --> 00:12:19,960 Speaker 3: of the tax reform package terminates in twenty twenty five, 276 00:12:20,600 --> 00:12:23,400 Speaker 3: there will be enormous amount of discussion to what happens 277 00:12:23,440 --> 00:12:26,720 Speaker 3: between now and twenty twenty five. It will be important 278 00:12:26,760 --> 00:12:28,960 Speaker 3: to what the makeup of Congress looks like, to what 279 00:12:29,000 --> 00:12:31,240 Speaker 3: you are able to do, what you're not willing to do. 280 00:12:31,679 --> 00:12:34,560 Speaker 3: Are you going to be able to do this through reconciliation? 281 00:12:34,760 --> 00:12:36,600 Speaker 3: Are you going to be able to do through normal order? 282 00:12:36,640 --> 00:12:37,599 Speaker 3: Are you going to be able to do with a 283 00:12:37,640 --> 00:12:41,160 Speaker 3: simple majority? To do that, that means the Republicans would 284 00:12:41,200 --> 00:12:43,080 Speaker 3: have to control the House, the Senate, in the White House, 285 00:12:43,320 --> 00:12:45,960 Speaker 3: if you've got to split Congress, or maybe the Democrats 286 00:12:45,960 --> 00:12:49,400 Speaker 3: control all three. If you're doing it through reconciliation, you're 287 00:12:49,400 --> 00:12:51,000 Speaker 3: going to be able to do it through one set 288 00:12:51,080 --> 00:12:51,760 Speaker 3: of policies. 289 00:12:51,800 --> 00:12:52,720 Speaker 2: If you do it through. 290 00:12:52,559 --> 00:12:54,920 Speaker 3: Regular order, you're going to have to have a much 291 00:12:54,960 --> 00:12:58,800 Speaker 3: more of a compromise on what goes on here. So 292 00:12:59,120 --> 00:13:01,840 Speaker 3: I think that the ideas that are being talked about 293 00:13:01,960 --> 00:13:05,400 Speaker 3: right now are concepts. And this is what's interesting about 294 00:13:05,400 --> 00:13:07,160 Speaker 3: the electro process in the United States, And I think 295 00:13:07,160 --> 00:13:08,400 Speaker 3: this is why it's important. 296 00:13:08,559 --> 00:13:10,280 Speaker 2: This is a time where where. 297 00:13:10,080 --> 00:13:14,000 Speaker 3: Potential candidates and incumbents and we actually have a couple 298 00:13:14,000 --> 00:13:16,880 Speaker 3: of incumbents running. They get to tell us about their 299 00:13:16,920 --> 00:13:19,560 Speaker 3: ideas of how they want to run the government. 300 00:13:19,920 --> 00:13:21,000 Speaker 2: And these are ideas. 301 00:13:21,160 --> 00:13:23,000 Speaker 3: If you look at the history, there are concepts, and 302 00:13:23,000 --> 00:13:25,880 Speaker 3: they're starting places, they're not necessarily ending places. 303 00:13:26,080 --> 00:13:28,319 Speaker 1: Premos go thoughts, I know when Lass go thoughts. 304 00:13:28,400 --> 00:13:30,360 Speaker 4: Oh no, I just to me the idea. So many 305 00:13:30,400 --> 00:13:32,520 Speaker 4: people have come on and said, we're taking it seriously. 306 00:13:32,559 --> 00:13:35,120 Speaker 4: If Trump says something, we're starting seriously. And Gary Cone 307 00:13:35,160 --> 00:13:35,720 Speaker 4: is saying. 308 00:13:35,520 --> 00:13:36,199 Speaker 1: Eh, maybe not. 309 00:13:36,360 --> 00:13:38,520 Speaker 4: You know, you got to look at the whole process. Unfortunately, 310 00:13:38,520 --> 00:13:39,880 Speaker 4: we're out of time, but we'll have to get you 311 00:13:39,920 --> 00:13:40,679 Speaker 4: back to talk about that. 312 00:13:40,880 --> 00:13:43,040 Speaker 1: Gary's going to see you. Thanks Morna, Thank you, sir 313 00:13:43,120 --> 00:13:43,600 Speaker 1: Gary Khan.