BUCK: I feel like we all understand the very basics of inflation, right?

CLAY: Yes.

BUCK: How does inflation work? You’ve got the value of dollars going down. Too many dollars are in circulation chasing goods, right? So, there’s too much money out there, and so money becomes worth less. It’s an issue of supply and demand, and so Joe Biden somehow thinks that if they spend a whole lot more money — or, actually, just if he repeats something three times — it will make it true.

BIDEN: Look, here’s the deal. Moody’s today — a Wall Street firm, not some liberal think tank — said if we pass the other two things I’m trying to get done, we will, in fact, reduce inflation, reduce inflation, reduce inflation, because we’re gonna be providing good opportunities and jobs for people who, in fact, are going to be reinvesting that money back in all the things we’re talkin’ about. Driving down prices, not raising prices.

BUCK: “Reduce inflation,” he says three times like a robot that has a microchip that malfunctioned.

CLAY: (laughing)

BUCK: No serious person thinks their $3.5 trillion budget is going to reduce inflation, a decrease in the purchasing power of money and increase in the price of goods. This is a reality that they can try to get away from but it is right now creeping up on us.

CLAY: It’s childlike, Buck. It reminds me, when I was a kid and there would be stories on the television about the national debt, and I remember — and probably a lot of you do. You’ve answered these questions for your kids, your grandkids; you may have had them yourself. “If the government prints money, how can they ever run a deficit? Can’t they just print more money?”

‘Cause that’s the way the kids think. That’s the Democratic economic policy right now. It is a childlike, fundamental misunderstanding of how business works. And this is crazy. There used to be Democrats who were business owners and understood basic business. They have lost all control of their party, and I think they have to be sitting on the sidelines just throwing up their hands over this insanity.

BUCK: That childlike understanding of money, by the way, is now reflected in the underlying economic philosophy of some of the most powerful Democrats in the country. They’ve given it this fancy name of Modern Monetary Theory, MMT they call it for short.

CLAY: Yes.

BUCK: Which is the argument that a government should print whatever fiat currency it wants to cover whatever needs it has, and there’s no pressure in the financing of it. So effectively no financial constraint. Print whatever you need to print and deal with the consequences. That is the money tree fallacy. This is we make it up so we can make up as much of it as we want, and we just keep putting it out there, and try to disconnect economic reality from what’s actually happening.

BREAK TRANSCRIPT

CLAY: We’ve been talking about what appears to be a failure of argument at it’s most basic level, right, Buck? “Inflation doesn’t matter.” You’ve got Biden not making any sense on vaccinations, saying things that are not true and being unable to even answer the most basic questions out there. How much worse is this gonna get? I think it’s a question that a lot of people ask. Democrats are saying it privately. Republicans are having that conversation publicly.

BUCK: I think no one who looks at the numbers and what’s going on with the economy would think that this has been a successful first six or seven months for the Biden administration. They keep pretending like they’ve created. The expectation here was we were in lockdown, an artificial recession.

CLAY: That’s right. Not an economic recession, a forced-by-the-government-and-the-virus recession. And as soon as we got to widespread inoculation and reopening you have much more economic activity. Even with that wind in the sails, so to speak, it’s been pretty meager. And that’s why Biden’s trying so hard to convince people, “Oh, it’s gonna be great.”

BIDEN: The economy is picking up significantly. It’s rational when you think about it. The cost of an automobile is kind of back to what it was before the pandemic. We compare what the prices were for the last year in the pandemic, and they are up. They’re up because, in fact, there was not much call for, for example, automobiles.

You know, you had the rental car company selling off their entire stock! You found yourself in the same way with automobile deals. All of a sudden now, it’s comin’ back; we’re gonna grow at 7% is expected. We create more jobs in the first six months of my — our administration than anytime in American history. No president has ever, no administration has ever created as many jobs.

BUCK: The best job creator ever, Joe Biden. Notice… How? What jobs? Where? Where’d they do?

CLAY: Unemployment came out again, by the way, Buck, because we’re continuing to pay people not to work. We still haven’t even been able to fill all these nine million jobs. And, again, to your point there was an artificial, created recession. We created the recession in our response to covid, which, by the way, was completely unnecessary. Lockdowns didn’t work. Masks, by and large, haven’t worked. And you and I are both concerned that we’re spiraling right towards a repeat of what happened in March of 2020 as we move into the fall and the winter.