Republicans ‘Behind the Eight Ball’ on Economy, Says Stephen Moore

Stephen, it's great to have you back with 25 days left. Everyone's trying to come up with an idea or pin the blame on somebody. That's the way it goes in the final throes of a campaign. How would you describe the state of this economy with gas prices, oil prices, where they are, diesel, where it is as voters hit the polls in November? Well, great to be with you there, Amber. Thank you for having me. I was listening to your previous conversation with, uh, Senator, uh, Jeanne Shaheen and so on, and I just wanted to make one quick point, which is, you know, 24 days, right? That's how many we have. That's a lifetime in politics. I bet if you ask most people on the street, did you know there's an election coming up in 3 or 4 weeks? They probably don't even know it. So a lot of Americans haven't even really focused that much yet on the elections. And a lot of people make up their minds in the last, uh, in the last few days or the last few weeks. But this is the crucial period. And there's no question Republicans are behind the eight ball right now. Uh, undoubtedly. Um, but it is a strong economy. It's a very good economy. I wouldn't say it's great, but it's very strong. Uh, in terms of just how industry is doing. And we're seeing construction boom, we're seeing a manufacturing boom. We have fewer Americans signed up for unemployment insurance benefits than any time in American history. That's pretty amazing. We have more jobs than people to fill them. That's a good problem to have. Um, even on a one interesting thing, and I did listen to the, uh, interview with the, uh, the woman from, uh, the Michigan Survey. Um, in economics, we have a, uh, we have a saying called Revealed Preference. In other words, you don't have to ask, uh, someone at the University of Michigan what consumers feel. All you have to do is look at what they're doing. And so there was an interesting chart. I don't know if you saw it on the front page of the Wall Street Journal. I think it was earlier this week that showed consumer sentiment weighed down and consumer spending way up. And so the revealed preference, even though consumers say they're being squeezed, they're still spending a lot. And that consumer spending is one of the reasons that Federal Reserve Board thinks we might have 4% growth in this quarter. So yes, the Republicans are in a hole, but there's a lot of time to make that up. And they have to really make the case for the strong economy, because frankly, the media won't do it. Well, when you talk about the strength of the economy, Stephen, and it's great to have you. And we appreciate you listening to our conversations with Joanne Chu and Gina manzano and Lisa millar, a political panel. When you talk about the strength of the economy and you cite manufacturing and the like specifically, is there breadth to that strength or is in large part this economy right now riding on a boom of artificial intelligence and associated infrastructure? Great. That's a great question, I guess. Yeah. Yes. But, you know, that's become if you look, for example, uh, the numbers on employment, uh, we're seeing a big construction boom. And you're exactly right. Um, the vast majority of those jobs are related to technology sector, including data centers. I don't understand why people are against data centers when they're huge. Uh, you know, in fact, the unions are very strongly in favor of, uh, more data centers, because that's where a lot of the jobs are coming from. Um, so, listen, uh, I know from my own family members that people are angry about prices. I'm angry about price. I can't believe how much things cost. Um, this is an inflation problem that's been going on for 5 or 6 years now. Uh, look, 80% of it happened under Biden, but people are angry. The prices are still so high and they're still rising. It is true. This is all being driven by the oil price. Uh, because as you guys mentioned, every time the oil price goes up, that filters into the price of just about everything else. The less Stephen Moore could smile when he's saying he's angry. There's just something, I don't know. Contagious about it. Steven. Uh, we just saw a report. God, I love you. Now. Okay, he's bringing the anger. Um. Reuters. Feeling that anger is reporting on the president's moves here. Uh, on diesel. I'm only. I only know what I'm reading to you off of Twitter. This is Jarrett Renshaw. I'm told the president will issue a directive ordering officials to rein in diesel costs. There are three industry sources, uh, pushing this story, pushing department heads to bypass state and local regulations, blocking energy production. How would that work? And would it actually lower prices? Well, I think I don't know a whole lot about that. I don't know exactly. No. I'm blindsiding you with this. Yeah. No, but I would say that. So, for example, you know, what state has by far the highest diesel and gas prices, right? You're going to say California. Yeah, California. They're way, way, way above any other state. Uh, in fact, the people in California pay at least a dollar, 25 to $1.50 more than people in other states. And what that's telling you is there's something about the energy policies in California, by the way. New York and New Jersey are very high priced, too. And, uh, the infrastructure issue, one of the most important things we have to do now, this isn't going to solve the problem of high gas prices now. But, you know, did you know we have not built a refinery in this country for over 40 years? We need refineries. We need pipelines. We need to have LNG terminals. We're producing more energy in the United States, oil and gas, than any other time in American history. And you have the infrastructure to move along that oil through pipelines and get it refined just hasn't, uh, kept pace. And that's in part because many, especially blue states, have rules that make it very difficult to to build that infrastructure. Well, even if there is a move to ease permitting and regulations and build that infrastructure, it's not going to be a near-term solved success. That's races, and that's something that the Federal Reserve has to consider. Obviously, it's the ability to respond to a supply side challenge is limited. But we saw one rate hike in the expectation, as we could very well see another by the end of the year. Stephen, do you think it would be a mistake for the fed to hike again, given that so much of this is being driven by the supply side, or is it necessary that they do so for fear of not only actual, uh, recognized inflation, but inflation expectations. To get back to the sentiment and consumer expectations. Data we started with could run away from that. I do think Kevin did the right thing in raising the rates at quarter point at the last fed meeting because we, as you said, we're running a 3.5% inflation right now, and that is driven by the energy sector. But you know, we're going to have to see prices fall in other areas, uh, to bring that inflation rate down to about well below 2%. By the way, I'd like to see that mean for 1%, given how much prices have risen as to whether the fed should be raising rates again. I mean, I'm not in a good position to really say I don't know what the data you know, the fed has access to a lot of the data that me more mortals like us, uh, don't necessarily have. So I can't really say. But I do think Kevin Warsh, I will say this to your viewers and listeners. Kevin Warsh is an inflation hawk, and he is quite correctly focused on one thing bringing inflation back down by whatever means possible. Mhm. I don't know if you have a take uh, Steven on this Lisa Cook story, but this is a doozy. Today that one of us is, uh, going to be launching an investigative committee as it's being referred to. There'll be a hearing at the white House in November. It's unclear what authority this, uh, this would be on. Should should Lisa Cook show up for that hearing? You know, um, I, uh, you, as you probably both know, I was nominated to be on the Federal Reserve Board by Donald Trump. I did not make it through the process. But, you know, I went through it. And so, uh, look, if Lisa Cook did what she is alleged to have done with respect to these, the mortgage fraud, she should be off the Federal Reserve Board. I think everybody would agree with that. I mean, the mortgage fraud is what created one of the greatest financial panics in American history. And if she was in any way part of that, I just don't see the reason why she should be sitting on the Federal Reserve Board. Now. I don't know if she's okay. I don't know the facts of the case. So, yes, I think it should be investigated, and I think everybody should want to get to the bottom of it.