BUCK: Inflation numbers came out this week. Not good for Democrats, but big questions still loom over the economy in general. Recession, jobs, what’s going to happen here? We have, as promised, Steve Moore with us now. He’s an economist and a distinguished fellow in economics at the Heritage Foundation, former advisor in the Trump White House as well. Steve, what was going on with the numbers this week, man? Looks like the transitory just a smidgen of inflation line from Biden. Not going to stay for very long, is it?
MOORE: Yeah. This is the seventh month, of seven or eight months now, of 8%-plus inflation. And it was almost exactly a year ago. You’re exactly right that Biden and the others in the White House, “Now, it’s temporary, it’s transitory, it’s going to go away.” And, remember, the other thing they said about inflation, do you remember when, I think it was White House Chief of Staff Ron Klain tweeted out that inflation was just a high-class problem. Remember that? “Just affects the high-class people.”
Gee, I’m not in the high class. And it sure affects me and I think it affects just about everybody listening to this radio show. So, this is crisis. We’re in a real crisis. I think the most important thing for people to understand in terms of how we got here, because the people in the White House either are pretending they don’t know or they’re just, you know, stupid is that we’ve spent and borrowed $4.1 trillion since Joe Biden came into office. You could make a strong argument that Joe Biden is the most fiscally reckless president in American history to ring up that kind of debt.
And by the way, a lot of that was paid for by just printing money. Now, you don’t have to have a Ph.D. in economics, right, to understand if you’re going to flush the zone and just saturate the economy with all of this cheap money, what’s going to happen to (unintelligible) prices? Prices are going to go up. I mean, it was as plain as, you know, sun rising in the east and setting in the west.
So, I’m just surprised anybody in the White House is surprised that we have this kind of inflation and it is now going to be kind of painful to wring it out of the economy. You know, the Fed is now having to raise rates, but much more importantly. The single most important thing we can do as a country right now in terms of getting the inflation down to the 2 to 3% range where we want it is to take a chainsaw to this budget and cut, cut, cut. And I hope Republicans do that when they take Congress.
CLAY: Okay. So, thanks for joining us, Steve. How long is this going to take, right? We’re sitting at over 8% inflation now. You’ve got mortgage rates that are about to go over 7%, which will be the highest in twenty years for everybody out there who is… generationally high mortgage rates. Obviously, mortgage rates under Jimmy Carter in what seems like a somewhat historically analogous situation were way higher 16, 17% back in the early eighties. How much worse is this going to get and how long does it take to get resolved back to some form of normalcy?
MOORE: I wish I could give you a good answer for that. How long will this take? I mean, we have people in the White House who are incompetent when it comes to the economy. And they…you know, we’re the ones who did the study. I don’t know if you remember that story we did a few months ago that found that the majority of people in the Biden administration don’t have any business experience whatsoever? None. Zero. Not only have they not worked for business – I mean, not only they never run a business, they’ve never even worked for a business. They have no idea what they’re doing.
CLAY: Even for Democrats, your study showed that the Biden administration’s ability in terms of experience was historically inept on the business side.
BUCK: You know what, Steve? What’s happened with her, by the way? Because we were told she was a technocrat.
MOORE: Yeah. She has drunk all the Kool-Aid, basically. All of a sudden, she’s a climate expert. Did you notice that? You know, so she has been a complete disappointment. So, there’s nobody. I mean, the the analogy I like to use, gentlemen, is that it would be like giving the keys to a Ferrari, to a 12 year-old and having them drive down the middle of the highway. You know, that’s what we’ve got in the White House right now.
So, I have a hard time answering your question because we still have two years of this guy. We still have more than two years of him in the White House. They are, they are completely incompetent. They don’t know what to do. And what I’m telling you is, what I’m telling Republicans they need to do, which is to start…take a chain saw to that budget. We have spent so much money. The debt is…you know, when I first came to Washington, guys, in 1984, the national debt was $1.5 trillion. Do you know what it is today? 31.5 trillion.
I mean, come on. And by the way, it’s not just the Democrats who love to play Santa Claus. The Republicans do, too, but at least they’re a little bit more skinflint than the Democrats are. So, until we get this…this is a global problem. By the way, I was on Fox today with Austan Goolsbee. Goolsbee, he’s a Democrat who worked for Obama. He was his chief economic adviser and a good guy.
I mean, he is a friend of mine, but I don’t always agree with them. And he said, “Well, you know, this is it’s not just the United States. It’s all over the world.” Yeah. You know, do you know the developed countries in the world since covid hit have borrowed and spent and printed $22 trillion? 22? We have never seen anything like this before in the history of the world. This is a grand experiment. You guys know what Modern Monetary Theory is?
MOORE: But that’s what we’re doing, but they’re doing moneta….they put it in place, this dingbat idea. For those who don’t know what we’re talking about. This is the idea. They came up with some second-rate economists and some second rate universities, which was… kind of …we laughed when they came up with the stupid idea that the country of the United States is so rich. We could just spend and spend and borrow and borrow and print money. It’s not going to have any negative effect. And, you know, we thought what a stupid idea that is. But then Biden came in and he did it. And so, now we’re facing…and my only surprise has been inflation is even higher than it is.
BUCK: Well, that’s where we got to ask you, Stephen. We’re speaking to Stephen Moore. As you guys can tell, he’s fired up. But that’s because —
MOORE: I’m angry. I’m angry.
BUCK — we all I mean, people right now are saying, “What the heck is this administration doing?” Recession, recession, recession. We were talking about it more a couple of months ago when it was clear we were in two negative quarters of economic growth in this country, which is the traditional but “not official” recession definition. Are we in one and where are we going? I think is the even bigger question for a lot of people right now who are looking at not being able to afford homes because the mortgage payments have gone up, etc., etc..
MOORE: Okay. So, the average family in America, the middle-income family, average middle income family has lost 4 to $5000 in purchasing power because of this economy and this runaway inflation. Now, would you define that as a recession?
CLAY: Yes, I would. Yeah.
BUCK: I’m sorry. There’s two of us. Yes, we would.
CLAY: That’s not good.
MOORE: No, that’s not good. You know, when you have. And by the way, I worked for Trump, as you guys know. We raised family income. And in four years by $6100, adjusted for inflation. In almost two years, Biden’s wiping all of those gains out. If I sound frustrated and angry, I am. And you know why? Because if we just stuck with the Trump policies, the economy would be booming right now. We would be in the biggest boom ever. Covid over, all the businesses reopening people going back to work. Trump’s pro-energy policies. Can you imagine how they…?
CLAY: Steve, I’m glad you bring that up, because I just want to ask you this question. You worked in the Trump White House. Now, if covid doesn’t happen right, let’s like wave a magic wand and pretend that covid never arises, that it doesn’t come out of the Chinese lab, which Buck and I think it did. That we don’t make the disastrous decisions that we did. In February of 2020, the United States economy under Donald Trump and you guys’ leadership was the greatest that it has ever been in the history of our country. What would the world look like? You know, we talk about the recovery. What would it look like if covid had never happened?
MOORE: So, you know, I’ll tell you, it’s kind of interesting story. This is true. I remember waking up in the middle of the night in like around February 2020, and I had this weird premonition. I said, “Oh, my God, everything is going so well. We’ve got the best economy ever. You know, Trump is going to lead, you know, have a Reagan-style reelection. He’s going to win 48 states. It’s going to be the biggest blowout ever. And that’s the course we’re in.” And I remember thinking, something’s going to happen. We’re going to get hit by an asteroid or, you know, there’s going to be an earthquake, you know, or there’s going to be a, you know, a war or a terrorist attack.
I just had this premonition that something was going to ruin this beautiful picture. And I got on this truth. I really did. And then three weeks later, we get hit by this virus that nobody, you know, could have possibly saw happening. And incidentally, I’ve got to say this. I feel strong about it. Trump does not get enough credit for the way he handled covid. Now, did he make mistakes? Yes, we were all at the beginning very confused about how deadly this virus would be, how to deal with it. We hadn’t had a pandemic like this, in you know what, 75 years.
But Trump was the one. I was there in the room in the Oval Office so many times. He wanted to get the economy reopened as quickly as possible. And it was people like Fauci and all these other, quote, health people and all these governors. “Oh, no, you can’t do that. You’re going to kill people.” And Trump was exactly right. And the thing that Trump did that does not get enough attention, appreciation, is that Trump basically said, you know what, we’re going to let the states make the decision. And that was a brilliant decision, because if we…I guarantee you guys, I wonder if you agree with me on this. If Joe Biden had been president when covid hit, he would have shut down the whole damn economy for four years.
MOORE: And it would have been catastrophic. And so, I give Trump a lot of credit for doing a good job. And by the way, the last six months that Trump was in office, you know, from like July through January. July of 2020 to January 2021, we were in a ferocious recovery. That was the B.S. line from Biden said, “Oh, I took over this economy that was in shatters.” No, he didn’t. No, the economy grew 20% in the last six months of 2020. Look those numbers up. I’m sick and tired of Biden lying about what… he didn’t inherit a economy crumbling. He inherited the economy. All he had to do was just leave it alone.
BUCK: But so, Steve, I got to ask you again, though, where does… let’s say Republicans actually do what we’re hoping they’re going to do, which is they take the House. They take the Senate. Yeah. So, you know, the asylum, they’ll be adult supervision again, to some degree. As you point out, Republicans spent a little too much, too. But it’s not as though they’re trying to implode our economy and undermine our currency.
MOORE: Right.
BUCK: What does the economy look like in that scenario by, you know, March, April of next year? Are we…are things starting to turn around or are we actually just feeling, you know, the full punch in the face of where we’re heading right now?
MOORE: Mm hmm. That’s a that’s a tough question, because I think you’re going to have certainly the Repub…it’s very, very, very important. And I’m not a rah-rah Republican. I’m not. But it is so important that these people have done this to our country, are thrown out of office in a resounding way. I mean, if you care about our country, you have to vote against these people. This is almost criminally, financially…the liabilities that we’re going to spend generations paying for what Joe Biden and Nancy Pelosi and Chuck Schumer have done to our country.
It is so outrageous the massive amount of debt. So, it’s going to take a long time to get us out of this ditch that they’ve driven the economy into. And I got to tell you, I’m worried. You guys talking about a recession? I’m worried about a financial collapse. I mean, the amount of debt that’s out there right now and you’ve got people don’t know what they’re doing. So, having the Republicans run Congress can stop a lot of the bad things.
But where’s the growth going to come from? They don’t want to cut taxes. They don’t want to produce American energy. They don’t want to reduce the burden of government. They don’t want to do anything. They are completely infatuated and obsessed with this crazy cult of climate change. Like the people can’t balance the budget. They can’t get the budget, you know, they can’t get the border secure. They can’t stop crime. They can’t do anything right. These are the people who think they’re going to change the temperature of the planet?
CLAY: It’s a mess. And great things to think about as we roll into the weekend.
MOORE: I mean, it’s just, why did we put these people in charge?
BUCK: We didn’t do it. Don’t blame us, Steve. We tried. We warned everybody.
MOORE: I’m blaming you two. (laughter) Yeah. I think the American people understand. “Whoops. We made a big mistake.”
BUCK: I hope so. Stephen Moore, everybody. Heritage Foundation. Economics fellow. A voice of sanity, along with us, in an insane world.
CLAY: Yes, indeed. Thanks to Steve there, although I think you’ve got a lot of people rattled headed in the weekend to talk about economic collapse, which, honestly, I think a lot of you probably — in the back of your mind — are worried about as well.
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