Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 2: I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 1: Tracy New Year. I think, so far in twenty twenty four,
Speaker 1: I do not feel any more clear or confident that
Speaker 1: I have some real deep sense of which way this
Speaker 1: economy has gone.
Speaker 3: Uh.
Speaker 2: It feels like there's a risk that everyone could be
Speaker 2: wrong just going in the other direction this time around.
Speaker 2: So as we've discussed multiple times, at this point, feels
Speaker 2: like there's a lot more acceptance for the idea of
Speaker 2: a soft landing or the idea that inflation can come
Speaker 2: down without generating a big spike in unemployment.
Speaker 1: No, there's no question at the end of last year
Speaker 1: like soft landing, optimism really picked up. But you could
Speaker 1: like tell me any story right now, and I would
Speaker 1: believe you could say, oh, financial conditions are easy quite
Speaker 1: a bit. Stock markets at all time high or close
Speaker 1: to all time high. Rates are falling, the labor market
Speaker 1: is tight. Wage growth just came in higher than expectation.
Speaker 1: There's still upward risk of inflation. You could tell me, oh,
Speaker 1: u six, and various measures of the labor market actually
Speaker 1: weakened last month. Maybe the economy is not as on
Speaker 1: solid footing as we thought or two months ago. Like
Speaker 1: any story, this is, I might believe you.
Speaker 2: This is a symptom of being online too much and
Speaker 2: talking to people online too much.
Speaker 4: That's it.
Speaker 2: Yeah, and just being able to argue both sides of
Speaker 2: the story because you see it constantly. But I mean,
Speaker 2: I take the point like, there there is a lot
Speaker 2: more optimism out there right now than there was a
Speaker 2: year ago. But on the other hand, there is still
Speaker 2: this I guess lingering sense of unease or even angst
Speaker 2: that you see in some of the consumer measurements. Or
Speaker 2: again to your point online, if you point out the
Speaker 2: jobs market is doing really great, you will have a
Speaker 2: bunch of people talking revisions to payrolls and things like that.
Speaker 1: Yeah, and it's legitimate, like some of the measures have
Speaker 1: gone down. So you know, I genuinely I find myself
Speaker 1: and plus the crowd is you know, gets it wrong
Speaker 1: a lot, So it seems like we're at tempting fate
Speaker 1: by believing too much in the soft landing story. But
Speaker 1: it really does feel to me, like, you know, there
Speaker 1: are many moving parts to this economy. You mentioned some
Speaker 1: of the sentiment measures, but there's also the fact that
Speaker 1: even with the inflation improvement, housing is still incredibly expensive,
Speaker 1: and there's all kinds of frustrations around that. So I
Speaker 1: don't think we will ever reach the end where we
Speaker 1: could say, Okay, we know what's going on in the
Speaker 1: economy right now. We're always just going to sort of
Speaker 1: be searching for more threads to follow.
Speaker 2: The soft landing is a journey, not a destination.
Speaker 3: Joe.
Speaker 1: Well, on that note, I really think we do have
Speaker 1: the perfect guests to start the year to discuss the
Speaker 1: state of the economy, where it's going, what policy levers
Speaker 1: might yet to be pulled as we go through twenty
Speaker 1: twenty four. I'm thrilled to welcome her first time coming
Speaker 1: on to the Odd Lots podcast. Lalol Brainerd, Director of
Speaker 1: the National Economic Council, Lalo Brainerd, thank you so much
Speaker 1: for coming on Odd Lots. Really appreciate you joining us.
Speaker 1: Why did we just get started? So on Friday we
Speaker 1: had the latest December non farm payrolls report. Headline looked
Speaker 1: pretty solid, unemployment, wages, job creation better than expected, but
Speaker 1: we did see some weakening in measures like labor force
Speaker 1: participation rate, prime age, employment to population U six measures
Speaker 1: of underemployment. Is there anything that concerns you right now
Speaker 1: about the momentum of the labor market as we head
Speaker 1: into twenty twenty four.
Speaker 3: Well, I have to say, taking a step back, sure
Speaker 3: that the labor market looks really strong if you think
Speaker 3: about it. It started twenty twenty three with unemployment already
Speaker 3: below four percent, and it maintained that. In fact, it's
Speaker 3: been below four percent now for just about two years,
Speaker 3: which I think is we haven't seen that for fifty years.
Speaker 3: And even despite the fact that we started the year
Speaker 3: from a position of low unemployment, the economy created an
Speaker 3: additional two point seven million jobs, which is really a record.
Speaker 3: And in terms of thinking about the economy going forward,
Speaker 3: the growth of the economy's been quite good. Productivity has
Speaker 3: been up, and inflation has actually come down during this
Speaker 3: time of strong employment growth, So that also looks like
Speaker 3: a pretty healthy economy.
Speaker 2: So I take the point about the health of the
Speaker 2: jobs market at the moment, but I can tell you
Speaker 2: from personal experience that if you tweet the payrolls figure
Speaker 2: came in strong or higher than expected, you do get
Speaker 2: a bunch of people on the internet who are pointing
Speaker 2: to things like downward revisions, or the shift from full
Speaker 2: time to part time jobs, or the number of people
Speaker 2: now who have to hold multiple jobs. How are you
Speaker 2: thinking about I guess the quality of jobs as well
Speaker 2: as the headline figure.
Speaker 3: Look, I think the overall statistics are very strong in
Speaker 3: terms of the quality of jobs as well. We've had
Speaker 3: wage growth that is exceeding inflation now not just relative
Speaker 3: to when the President took office, but also relative to
Speaker 3: the strongest pre pandemic year. So wages are up by
Speaker 3: an amount that means most households can spend, you know,
Speaker 3: thirty five hundred dollars of extra spending after buying the
Speaker 3: same things they would have purchased a pre pandemic. Wealth
Speaker 3: is also up, and the fact that so many Americans
Speaker 3: are employed, that the employment of population ratio for working
Speaker 3: age Americans is very high, higher than pre pandemic means
Speaker 3: that those people are going to continue earning and continue
Speaker 3: being able to spend and to power the economy going forward.
Speaker 3: So while I think we are seeing slowing growth, which
Speaker 3: would make sense at this point in a very strong recovery, Nonetheless,
Speaker 3: the wages, the record union contracts that we have seen
Speaker 3: over the last year vote really well for the ability
Speaker 3: of households to continue spending and to continue fueling the economy.
Speaker 1: Do you have an explanation for why the labor market
Speaker 1: has held up as well as it has given a
Speaker 1: sort of historic interest rate shock over the last eighteen
Speaker 1: twenty four months.
Speaker 3: Well, look, I think it is remarkable actually, just how
Speaker 3: much this president has navigated through if you think about it,
Speaker 3: the pandemic, which scrambled supply chains and led to a
Speaker 3: historic number of people out of the labor force. And
Speaker 3: then just on top of that, we got this massive
Speaker 3: oil price shock by rush invasion of Ukraine, and just
Speaker 3: a year ago, don't forget, we navigated a regional banking crisis,
Speaker 3: all while interest rates were rising. But if you look
Speaker 3: at the strength of the labor market, the growth that
Speaker 3: we've seen over the course of the last year, well
Speaker 3: above trend, and if you look at inflation, which we
Speaker 3: saw coming back down to two percent in terms of
Speaker 3: that core measure over the last six months, it's been
Speaker 3: a strong record, and I think it reflects the president's
Speaker 3: own views that this was not a normal kind of recovery,
Speaker 3: and he focused on two things, one on making sure
Speaker 3: that as many Americans were able to stay in their homes,
Speaker 3: come back into the labor force, quickly maintain their household
Speaker 3: balance sheets. So you had a much more equitable recovery,
Speaker 3: and it was also a much stronger recovery that attracted
Speaker 3: a lot of Americans back into the labor force. So
Speaker 3: instead of seeing the great resignation, we've seen the great
Speaker 3: rebound in terms of the workforce. And then the second thing,
Speaker 3: he put a tremendous amount of focus on the supply
Speaker 3: side of They found the economy which was really the
Speaker 3: source of a lot of the distortions. And he's got
Speaker 3: a agenda of investing in America and investing in Americans
Speaker 3: that has an ongoing focus on more R and D spending,
Speaker 3: more spending on clean energy transition, fixing infrastructure that really
Speaker 3: needed to be fixed, and of course investing in industries
Speaker 3: of the future like semiconductors. So you know, we've got
Speaker 3: that strong investing in America agenda along with a strong
Speaker 3: recovery attracting people back into the labor force into these
Speaker 3: good jobs of the future.
Speaker 2: So Joe and I definitely want to get into more
Speaker 2: of the supply side in just a bit, but before
Speaker 2: we do, given everything that you just slaid, out, So
Speaker 2: the economic recovery, which was stronger than a lot of
Speaker 2: people expected, the still very strong and buoyant jobs market,
Speaker 2: the improvement in wages, where you know, on an inflation
Speaker 2: adjusted basis, we have seen those going up. Why do
Speaker 2: you think in surveys people are still showing some sort
Speaker 2: of angst. You know, we've seen this repeatedly, and you
Speaker 2: can call it whatever you want, the vibe session or
Speaker 2: something else, But why aren't those messages filtering through?
Speaker 3: Yeah, so it's a good question. I mean, if you
Speaker 3: do look at both household incomes adjusted for inflation, really
Speaker 3: strong improvement since before the pandemic. And secondly, if you
Speaker 3: look at wealth media and household wealth is up by
Speaker 3: thirty seven percent inflation adjusted since before the pandemic, so
Speaker 3: the best year of the previous administration. So in terms
Speaker 3: of personal finances, you do actually see Americans reporting with
Speaker 3: a large majority that they are doing okay financially and
Speaker 3: job satisfaction is quite high. But it's been a very
Speaker 3: stressful few years for Americans if you think about the
Speaker 3: number of layoffs, the number of small businesses that shuttered,
Speaker 3: and then the surge of inflation that was on the
Speaker 3: supply side, and it may take a little bit of
Speaker 3: time for Americans to really feel confident that the good
Speaker 3: economic numbers that they're seeing and their own good personal
Speaker 3: situations is actually going to be sustained. And part of
Speaker 3: that is some prices have not come down, and we're
Speaker 3: fighting pretty hard to get those prices to come down.
Speaker 3: One area that really is difficult for Americans is healthcare affordability.
Speaker 3: And though you've had a huge set of really important
Speaker 3: initiatives that the President has been focused on. For instance,
Speaker 3: in the legislation that was passed about a year ago,
Speaker 3: it actually brings down the cost of insulin for the
Speaker 3: first time from four hundred dollars a month to thirty
Speaker 3: five dollars a month for seniors, and some companies have
Speaker 3: extended that more broadly, and it caps the yearly out
Speaker 3: of pocket costs for seniors for prescription drugs at two
Speaker 3: thousand dollars, So that will start to make a dent there.
Speaker 3: But we're going to continue pushing on healthcare costs as
Speaker 3: well as other areas which are really more about deceptive
Speaker 3: pricing where Americans feel like they're just spending more than
Speaker 3: they should.
Speaker 1: So one area of disinflation or supply side improvement that's
Speaker 1: very clear has been on oil and gasoline prices. And
Speaker 1: you mentioned the oil shock a couple of years ago
Speaker 1: or a year and a half ago, but it's obviously
Speaker 1: come down quite a bit. Meanwhile, US oil production, domestic
Speaker 1: production of oil is at all time highs. Is that
Speaker 1: something that the White House is proud of and is
Speaker 1: that something that further aims Does the White House aim
Speaker 1: to see further expansion of domestic oil production in order
Speaker 1: to push gasoline prices lower?
Speaker 3: Well, gas prices are so important for weekly budgets and
Speaker 3: the kind of kitchen table economics focus of this administration
Speaker 3: is very much trying to make sure that people have
Speaker 3: a little breathing room at the end of each month
Speaker 3: after paying their bills. So that reduction in gas prices
Speaker 3: at the pump from to about two I want to say,
Speaker 3: it's just a touch below three dollars median price that
Speaker 3: Americans are seeing around the country, and in a lot
Speaker 3: of states they're seeing lower prices than that. That is
Speaker 3: a very meaningful amount of relief. It's about a dollar
Speaker 3: ninety down from what we saw a year ago. And
Speaker 3: of course we're also seeing some grocery store prices coming down.
Speaker 3: But in terms of your question, the President also has
Speaker 3: a huge clean energy transition investment agenda. He got historic
Speaker 3: legislation there. We have tax credits that are leading to
Speaker 3: a real boom in manufacturing of clean energy, clean vehicles.
Speaker 3: So these two things are going on at the same time,
Speaker 3: and that bodes very well for the longer term transition
Speaker 3: to a clean energy future that America is in the
Speaker 3: process of making. And I would say those tax credits
Speaker 3: tremendous excitement. They are huge numbers of private sector investments
Speaker 3: that are being catalyzed by those government inflation reduction at
Speaker 3: clean energy incentives.
Speaker 2: Since you mentioned grocery prices, one thing we've been talking
Speaker 2: quite a bit on this podcast about is excuse flation,
Speaker 2: or the idea that companies have taken advantage of supply
Speaker 2: chain disruptions to raise their prices all at once, and
Speaker 2: other people call it different things, you know, profit led
Speaker 2: inflation or seller's inflation. Biden recently referred to it as
Speaker 2: price gouging. But I'm curious what evidence you see from
Speaker 2: your perch of companies sort of opportunistically raising prices. And
Speaker 2: then secondly, what tools does the Biden administration actually have
Speaker 2: to target prices that are ultimately being set by private enterprises.
Speaker 3: Yeah, so we have seen and you can see it
Speaker 3: in the data that when supply chains were snarled and
Speaker 3: input prices were going up, that a lot of big
Speaker 3: corporations raised their prices to consumers by as much or more,
Speaker 3: which meant that their markups went up, which some people
Speaker 3: have referred to as a price price spiral. And the
Speaker 3: President has been very focused on this because if you
Speaker 3: look at supply chain measures, they look like a very
Speaker 3: sharp spike upward to a level of supply chain disruptions
Speaker 3: that we really don't see in the data prior to
Speaker 3: twenty twenty two, and then they come down extremely sharply
Speaker 3: over the course of twenty twenty three, so that they
Speaker 3: are now back down to levels that we saw pre pandemic.
Speaker 3: And input costs also have come down. So what is
Speaker 3: really troubling is that corporations need to pass those input
Speaker 3: cost declines on to consumers and so that consumers can
Speaker 3: see the benefit of that in their weekly budgets. And
Speaker 3: the President has been very clear about how important that is.
Speaker 3: We've done a lot of work to fix those supply chains.
Speaker 3: Now corporations need to make those input cost reductions available
Speaker 3: to consumers in terms of their final price. And we're
Speaker 3: also taking action where we have enforcement tools on deceptive
Speaker 3: or unfair pricing. And so you've seen actions in areas
Speaker 3: like airlines on family seating fees or extra baggage fees.
Speaker 3: We've seen actions that the administration has taken on overdraft
Speaker 3: fees and bounce check fees, and will continue to push
Speaker 3: really hard and take action where necessary in the areas
Speaker 3: like ticketing fees, other areas where American consumers are just
Speaker 3: kind of fed up with seeing these extra charges.
Speaker 2: How do you encourage companies to pass on those price
Speaker 2: declines to consumers? Because I'm just thinking in other parts
Speaker 2: of the world, I mean, notably Europe, there's been talk
Speaker 2: of stuff like or some action on price controls, but
Speaker 2: that seems like a sort of political non starter in
Speaker 2: the US. So what exactly can you ask companies to
Speaker 2: do on this front.
Speaker 3: Yeah, that really hasn't been the approach that this administration
Speaker 3: has taken at all. It has been to use the
Speaker 3: authorities we have at our regulatory agencies to go after
Speaker 3: fees that are deceptive, fees that are not transparent, fees
Speaker 3: on ticketing or fees on hotels. You know, we've had
Speaker 3: the President meet with people who for instance, Becky Chong
Speaker 3: from Oregon, you know, came to a junk fees event
Speaker 3: at the White House and she talked about how she
Speaker 3: and her husband took her two daughters to see their
Speaker 3: grandparents last summer and they were surprised to see unexpected
Speaker 3: junk fees on their hotel bill that totaled over one
Speaker 3: hundred dollars. So partly by just making these practices very
Speaker 3: transparent and then taking enforcement actions and creating rules about
Speaker 3: transparency of those prices, we are starting to see some
Speaker 3: real progress, but it's not enough. And in the area
Speaker 3: of healthcare in particular, we have legislative tools to enable
Speaker 3: drug prices for the first time to be negotiated with Medicare,
Speaker 3: and we expect that to make a big difference.
Speaker 1: I just want to go back again to the question
Speaker 1: of domestic energy, especially given the industrial policy efforts from
Speaker 1: the White House, chips, the Inflation Reduction Act, the infrastructure
Speaker 1: spending obviously is going to need a lot of energy
Speaker 1: to power up new factories, new facilities, and so forth.
Speaker 1: Does the White House want to see that domestic production
Speaker 1: of oil and gas continue to rise. I take it
Speaker 1: about the clean energy and the transition, but in terms
Speaker 1: of fossil fuels, does the White House want to see
Speaker 1: that line continue to rise? I feel like the last
Speaker 1: president and the perhaps rival would be out tweeting about
Speaker 1: that line a lot.
Speaker 3: The President has passed historic legislation to help this economy
Speaker 3: transition in the most resilient and dynamic way to a
Speaker 3: clean energy future. So that really has been a huge
Speaker 3: focus on his part to make sure that the US
Speaker 3: is a leader on technologies that are going to reduce
Speaker 3: emissions and a leader on clean energy and electric vehicle
Speaker 3: investments at the same time. During this transitional period, he's
Speaker 3: been very focused on making sure that American consumers have
Speaker 3: the ability to have a little extra money at the
Speaker 3: end of the month, and that has meant working really
Speaker 3: hard to get what we're very distorted high prices at
Speaker 3: the pump down very substantially, and that's what we're seeing.
Speaker 3: We're seeing gas prices at the pump below three dollars
Speaker 3: in most parts of America. So those two things are
Speaker 3: both important to the President, and I think we are
Speaker 3: seeing real progress on both.
Speaker 2: So in terms of things that Americans really care about.
Speaker 2: I mean, one of those has to be housing, and
Speaker 2: we have seen various metrics of housing affordability really decline
Speaker 2: in the past.
Speaker 4: Couple of years.
Speaker 2: And there is a broader concern that with interest rates still,
Speaker 2: you know, relatively high, that you are going to start
Speaker 2: to see capacity slow and there is I guess this
Speaker 2: tension between keeping rates high to bring down inflation and
Speaker 2: also encouraging more supply of housing so that ultimately that
Speaker 2: can be more affordable. What can the administration do when
Speaker 2: it comes to that particular tension.
Speaker 3: Yeah, so you're exactly right. Making housing more affordable is
Speaker 3: central to so many Americans, whether they be first time
Speaker 3: aspirational home buyers or whether that is people who are renting.
Speaker 3: Bringing down the costs of housing for Americans is really important. Now.
Speaker 3: The good news is we have actually seen mortgage rates
Speaker 3: come down about one and a half percentage point just
Speaker 3: in the last few months on the back of the
Speaker 3: really good inflation data that we've been seeing. So that's
Speaker 3: very encouraging. But the President also has a very forward
Speaker 3: leaning agenda there to ensure that there are many more
Speaker 3: affordable units. We have been supporting tax credits that would
Speaker 3: lead to about one point two million additional affordable homes
Speaker 3: and a second tax credit that would mean about five
Speaker 3: hundred thousand more affordable homes for first time home buyers.
Speaker 3: The President has proposed relief for first generation home buyers
Speaker 3: and renters to help lower costs, and I think we
Speaker 3: really are going to be pushing hard on Congress to
Speaker 3: get those policies done. Congress, the Republican House in particular,
Speaker 3: has not supported a lot of improvements on affordable housing,
Speaker 3: but we're going to continue working really hard. And additionally,
Speaker 3: we're trying to incentivize changes in local zoning policies in
Speaker 3: a lot of cases near transit hubs. By providing incentives
Speaker 3: with transit dollars, we're getting localities to unlock areas for
Speaker 3: more dense housing, and we think that'll make a really
Speaker 3: big difference over time as well. In the final thing
Speaker 3: I'd just say is that with office vacancy rates being
Speaker 3: a bit higher in some downtown areas, we've also got
Speaker 3: some programs to encourage office to residential conversions of downtown areas.
Speaker 1: You mentioned zoning, particularly the constraints around housing near transit.
Speaker 1: It's sort of something that I've been thinking about a
Speaker 1: lot of people are talking about you know, there was
Speaker 1: a CNN report that the White House was frustrated by
Speaker 1: the lack of tangible things the President can point to
Speaker 1: on the campaign trail that said, you know, we built this,
Speaker 1: or the clear evidence of these bills turning into physical things.
Speaker 1: And I'm not going to ask you to comment on
Speaker 1: press reports, but I am curious if you think that
Speaker 1: this is a tension between the Industrial Policy Act, Inflation
Speaker 1: Reduction Act CHIPS policies designed to get more factories on
Speaker 1: the ground, and whether there's still things that need to
Speaker 1: be done on the local side to make it easier
Speaker 1: to break ground on new construction.
Speaker 3: So two separate really important points that you're making. One
Speaker 3: is we do need localities to create changes in zoning,
Speaker 3: and so we have a pro housing grant program, which
Speaker 3: is first of its kind, that provides those kinds of
Speaker 3: incentives to help those communities that do remove barriers to
Speaker 3: housing production so that they get support for that. And
Speaker 3: we have a similar kind of program using Department of
Speaker 3: Transportation transit funding. On the side of clean energy and
Speaker 3: ships investments and infrastructure investments there too, a lot of
Speaker 3: attention has been given to permitting to accelerate the ability
Speaker 3: to make those investments by having a much more streamlined
Speaker 3: review at the federal level that brings together all the
Speaker 3: agencies in a streamlined process rather than going through what
Speaker 3: in previous administrations was kind of a laborious agency by
Speaker 3: agency review that in many cases took very many years.
Speaker 3: So we are looking for kind of game changing mechanisms
Speaker 3: to make that permitting process easier while still respecting the
Speaker 3: really important equities of local stakeholders.
Speaker 2: So Janet Yellen, now Treasury Secretary, formerly at the Fed,
Speaker 2: of course very similar to your career history, felt comfortable
Speaker 2: enough with the economic data last week to basically declare
Speaker 2: that this looks a lot like a soft landing. After
Speaker 2: many years, or I should say, a couple years of
Speaker 2: worrying about the potential for a recession hard landing, it
Speaker 2: feels like we're on the right path. What are you
Speaker 2: and the Biden administration looking at in terms of benchmarking
Speaker 2: your success and how much left there is to do
Speaker 2: on things like inflation.
Speaker 3: So we are really pleased with how well the economy
Speaker 3: has performed. A hunderd four percent unemployment rate for twenty
Speaker 3: three months in a row, another two point seven million
Speaker 3: jobs created over the last year alone, fourteen point three
Speaker 3: since the beginning of President Biden's time in office, and
Speaker 3: inflation that has come down now to the two percent
Speaker 3: range core inflation over the six the last six months,
Speaker 3: most forecasters just said that couldn't be done. I mean,
Speaker 3: if you look at the forecasters a year ago, there
Speaker 3: was a lot of recession calls and a lot of
Speaker 3: those forecasters saying you couldn't get inflation as far down
Speaker 3: as it is today without seeing a lot of unemployment.
Speaker 3: That has not happened, and that again is because we
Speaker 3: were very focused on the supply side of the economy
Speaker 3: and the President wanted to support the recovery rather than
Speaker 3: withdraw support. So in terms of on a go forward basis,
Speaker 3: you know, we're going to continue our work because too
Speaker 3: many things are still too expensive for Americans. We talked
Speaker 3: a little bit about healthcare. We've got a really robust
Speaker 3: agenda to bring down prescription drug costs. We talked about
Speaker 3: housing affordability. That's going to be a major focus at
Speaker 3: the president in the months ahead, and we are going
Speaker 3: to continue calling out corporations who are not passing along
Speaker 3: cost savings to consumers, as well as those who are
Speaker 3: pricing in ways that are deceptive and lead to bigger
Speaker 3: bills at the end of the purchase process that consume.
Speaker 3: Then consumers were led to belief. So our work is
Speaker 3: not done. We are going to continue fighting on the
Speaker 3: app consumers.
Speaker 1: To lower costs LAOL BRAINERD, thank you so much for
Speaker 1: coming on odd Lots. Really appreciate your.
Speaker 3: Time, Appreciate being on the tow Thank you, Thank you
Speaker 3: so much.
Speaker 1: Thanks Loud.
Speaker 4: That was great, Joe.
Speaker 2: I liked your oil production question and the idea that
Speaker 2: if Trump was still in office and US domestic oil
Speaker 2: production was at a record, he would be tweeting it NonStop.
Speaker 4: He'd be tweeting about stocks too.
Speaker 1: He would be tweeting about stocks. Tracy, by the way,
Speaker 1: is praising me for that oil question because she says
Speaker 1: I took her joke, So I want all odd LATS
Speaker 1: listeners should know that that was originally Tracy's joke about
Speaker 1: Trump tweeting the oil production charts. But actually, I mean,
Speaker 1: like I did find it interesting, like here's the number
Speaker 1: one driver or a huge driver of headline disinflation, one
Speaker 1: of the most salient prices. But it's interesting that, like
Speaker 1: you know, on this idea of like, well do we
Speaker 1: want to see even more US oil US liquids production.
Speaker 1: The inclination was to talk more about the clean energy investments.
Speaker 2: Yeah, I mean, you can see why it might be
Speaker 2: a sensitive topic for the Biden administration, given that their
Speaker 2: platform or you know, going into the election, was very
Speaker 2: much about clean energy and moving away from oil. But
Speaker 2: then we saw prices spike, and obviously there was pressure
Speaker 2: from consumers to bring those down again, and so kind
Speaker 2: of a tightrope there.
Speaker 4: The other thing I thought was.
Speaker 2: Really interesting was the very very like clear and targeted
Speaker 2: discussion of companies price gouging. And that seems like such
Speaker 2: a tricky one to me, because again, the American political
Speaker 2: model or economic model is sort of all about, you know,
Speaker 2: make as much money as you can as long as
Speaker 2: it's legal. But that seems to be a point of
Speaker 2: tension or angst among the domestic population, given what's happened
Speaker 2: the past couple of years, and so it's really interesting
Speaker 2: to me to see how the administration actually goes about
Speaker 2: targeting that particular behavior. And I guess they can sort
Speaker 2: of nibble at the edges on things like insulin or
Speaker 2: junk fees, like there are concrete things they can do
Speaker 2: but how are you going to tell a big consumer
Speaker 2: goods company to reduce its profit margins and pass on
Speaker 2: cost savings to consumers.
Speaker 1: I guess you'd sort of the the moral suasion aspect,
Speaker 1: the tweeting about it, pressing about it. But there aren't
Speaker 1: a ton of like policy levers really that it's clear
Speaker 1: the administration could take. I mean, going back, I mean,
Speaker 1: I did think it was interesting her answer to your
Speaker 1: question about like, why has why is there so much
Speaker 1: frustration because we started the conversation about, Okay, this does
Speaker 1: look like a very impressive labor market, impressive rebound disinflation
Speaker 1: over the last year or so without any weakening of
Speaker 1: the labor market, and I think her answer is like, yeah,
Speaker 1: I mean it was a you know, it is a
Speaker 1: crazy three or four years between everything really, including the inflation,
Speaker 1: and so this idea of maybe maybe it just needs
Speaker 1: to give it time to put some of this in
Speaker 1: the rearview mirror before there's like and actually just today
Speaker 1: recording this on Monday, January, you know, there was a
Speaker 1: New York Fed survey that said that seemed to indicate
Speaker 1: people feeling better about their finances, highest in a couple
Speaker 1: of years. So maybe that's the case. Maybe it's just
Speaker 1: a matter of time and we'll see things like you
Speaker 1: mission consumer conference board turn higher.
Speaker 2: Lags in consumer sentiment. That seem to be the argument there,
Speaker 2: like long and variable lags in people just taking time
Speaker 2: to digest all the changes that have happened, which kind
Speaker 2: of makes some sense. But I still have questions about
Speaker 2: the role of I guess, partisanship in some of those surveys.
Speaker 2: And you know, if the economy got even better, which
Speaker 2: maybe is kind of a tall order after what we've seen,
Speaker 2: but would some of that like partisanship, start to go
Speaker 2: away or would there still be a significant chunk of
Speaker 2: America that like always feels angry or always feels that
Speaker 2: things are heading in the wrong direction. That's an interesting
Speaker 2: question to me.
Speaker 4: But for now, shall we leave it there?
Speaker 1: Let's leave it there.
Speaker 4: Okay.
Speaker 2: This has been another episode of the All Thoughts podcast.
Speaker 2: I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 1: And I'm Joe Wisenthal. You can follow me at the Stalwart.
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Speaker 1: Bennett at Dashbod and Keil Brooks at kel Brooks Thank
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