Teach 2 Dumb Dudes

Rick Roberts - The Road To Recession

July 18, 2022 Joe Bento Season 2 Episode 14
Teach 2 Dumb Dudes
Rick Roberts - The Road To Recession
Show Notes Transcript

Everyone is feeling the pinch in their wallet, but why? Is the Russian occupation of Ukraine causing sky-high gas prices? Will the housing market crash? Can we expect a recession in the coming months? Rick is here to teach a couple dumb dudes and their audience about the economy. Rick answers the questions that people are dying to know, and puts a perspective on where this crazy economy is headed. 

Bento:

What's up, everybody. Welcome to another episode of teach two dumb dudes as always I'm bento. He's Bobby today, we're talking to Rick Roberts. Rick is a professor in the department of economics finance and real estate at Mont university. He's graduated from Columbia university and he's got 20 plus years as a executive of the federal reserve system. Uh, so we're talking about the economy today. Gas prices, inflation housing market, stock market, and even a little dash of politics at the end. Find out who Rick thinks is gonna run in 2024 and where the hell he thinks our economy's going. And how long is it gonna take to get there? Hey, Rick, you

there?

Rick:

Yeah.

Bento:

Can you hear me? Yes. Okay.

Rick:

A loud and clear. I was just trying to get my video clipped on here, but, uh,

Bento:

see,

Rick:

try that. Here we

go.

Bento:

There we go. Nice. You, how are you? I'm doing good. Yeah. Where are you

Rick:

out of? I'm out of Jersey, right? Just an hour, hour south of, uh, New

Bento:

York. Oh, okay. Where? Uh, right, right up the road in Rhode Island.

Rick:

I know. Yeah. Yeah. I listened to your last show.

Bento:

Oh, did you good?

Bobby:

yeah. What'd you think?

Rick:

Uh, yeah, I, I couldn't shut it off. Good. Terrific.

Bobby:

Pretty,

Bento:

I mean, I mean, he ended up coming now, so it must have been that bad.

Rick:

yeah,

Bento:

awesome. Well, Rick, thanks for coming on. I've been really looking forward to this one. We actually don't normally do podcasts on Thursdays. It's usually a Monday thing, but I wanted to sneak you in quick because oh yeah. That's going on with, uh, you know, the economy and inflation and uh, you know, the gas prices it's been really crazy out there. So that's kind of where we wanna start off to is the gas prices, right? That's that's the big, hot, hot topic right now. I don't know a whole lot about it, but when me and Bobby talk about it, we tend to think, obviously the war in Ukraine is causing a problem, but we get such a low percentage of oil from Russia. And I'm curious, like how does that affect the United States to make our prices go

Rick:

so high. Yeah. It's, it's actually very little of it, although it's a convenient excuse, I guess I would

Bobby:

say. Right.

Bento:

Sure. Right. That's what, that's what we think, but we don't wanna be all like

Bobby:

conspiracy theory. That was, but that was our first thought, right. Our first thought was, well, wait a second. Are these prices just artificially inflated or is the market demand really driving it up that much? Right. Because we send some of our reserve oil over to Europe, but that's our reserve.

Rick:

Yeah. I mean us. Yeah. I mean, there's there it's supply end demand. And on the supply side. That's a good point on the high oil prices. What part is due to the Ukraine? Russian skirmish, right? Mm. Yeah. I mean, logically it doesn't make a whole lot of sense that that's driving the price up because we get a very small percent, even indirectly would be held back in terms of supply from that skirmish. So, you know, although that's a very small piece, there's a couple bigger pieces going on. One is It relates to what's causing the high inflation in the us demand demand is forcing prices higher. So the government sent out a lot of spent a lot of money. Fiscal checks, unemployment extensions, COVID benefits in response to COVID upfront, right? Mm-hmm And then at the same time, the federal reserve lowered interest rates. So it made borrowing cheaper and people are spending more money. So there's a higher demand out there. And plus on top of that, we're, we're, uh, starting to get, you know, feel better about ourselves. We're able to get out and travel, right? Yeah. Right. Walk down so damn long. Uh, let's get out and do something. So on the demand side of the equation regarding the oil prices, there's a higher demand in the us for gas because, because of those reasons, people have more money and they're just eager to get out and spend it particularly using gasoline, go do something we've been locked down for a long time. So that's one part of it. And then at the same time, supply has been limited. Some importantly, the supply of gas has been cut into because a lot of the us. Sources have cut back their production. Mm. When the economy was locked down or substantially locked down at the beginning of the COVID crisis, there was no demand, right? So a lot of refine just shut off the spigot. And now the demand's coming back. It's not an immediate turn on the SPT and here comes the oil. It takes a while to get a well going and so forth. So that's a piece of it on the demands on the supply side, less supply in the us. And then also less supply coming from, as you guys know, there's this group in the mid east, known as OPEC, this cartel oil petroleum exporting countries. Mm-hmm right. And they see what's going on and they're eager to hold back on supply. So they're not pumping as much so they can keep the price high as well. Wow. So those are the main factors, high us demand, low us production and low production in the middle east. And on the margin. This, uh, Ukraine, Russian conflict has a little bit to do with it as

Bobby:

well. I wonder what you know, I have heard that about the refineries and I wonder where the hesitation was to get those back going again, just simply because they didn't wanna get stuck holding

Rick:

it. Yeah, I think frankly, the, uh, the, uh, there's some politics involved there with president Biden's, uh, kind of general approach towards energy being more green, right. Less fossil fuel. So, you know, folks are, you know, we shut it off. Look, it doesn't look like given what the government's trying to get done here. You know, we're gonna have an ongoing demand, even when COVID comes it, it goes away because it is pushed towards green energy. So I think that was some of the reluctance to, you know, flip the switch back on there.

Bento:

Yeah. So when I see those stupid frigging stickers of Joe Biden point and at the gas price says, I did that, is, are those true?

Rick:

yeah. You know, I think, I think he played a role in it. Now what he's doing are more, you know, symbolic type things,

Bobby:

right. Because even

Rick:

the federal tax, right. The midterms are coming up, so he's right. Cutting the federal pack. I think frankly, some, most states have done that as well. You know, these are kind of gimmicky things, you know, I figured on a, uh, cost me a hundred bucks to fill my tank the other day. I was, I, I was doing some math and I think I walked away under Biden's plan with an extra $2 and 10 cents or something. So, you know, nothing to write home about. Sure. Yeah. Not that, not that everybody doesn't need an extra dime here and there, but that's nothing to write home. And in addition, he, you know, he's releasing some oil out of our petroleum reserves, which is peanuts, but you know, both of those things, he thinks sound good. I think they don't mean much. And particularly in today's environment, I don't think this is gonna draw them. The Democrats, a lot of votes in with the midterm elections, this, you know, federal gas tax holiday, as well as release of petroleum reserves. These are little gimmicks don't mean anything. And I think in this political environment, you know, it's not gonna sway any voters, meaningfully. For by in anyway.

Bento:

Right. So when, uh, when do you see the gas, gas prices coming down or, you know, well, roughly how long do you think this could take to even get some relief, even, you know, even a quarter of what it is

Rick:

now. So it's like those three factors, right? Let's okay. Let's count three and a quarter will, will count the Ukraine Russian conflict, right. About the three other ones. So we have the demand from the, you, you and me, you know, we have more money. We have benefits that were sent out from the government, the fed lowered interest rates. So we're, you know, we have, we have something to spend and then we we're eager to go out and spend it. So what, when is that gonna back off? Less demand will lead to a lower price. Right. You

know?

Bento:

Right. I couldn't believe it this morning. I saw on the news that, you know, they said more people are gonna travel this weekend yeah. Than any other July 4th before even with the gas prices, the way they are, which I thought was fascinating. Like people, you think people kind of almost take a strike against it and say, well, I'm not gonna purchase this product or, or I can't afford you. You know, there's still, I feel like there's a lot of families out there

Bobby:

struggling still for money. Yeah. And, and that's the other thing I wanted to ask about Rick, you know, so I saw something about uh, you know, families that live paycheck to paycheck have, uh, really taken a huge hit in this inflation rise and gas price rise. So with that, you know, we say like, oh, you know, but you know, demand is high and, you know, But is that demand high across the, the broad swath of America? Like, I feel, I feel like there are huge portions of the population where that they don't have that. Right,

Rick:

right, right. But the fact is the bulk of gasoline is, is not purchased by yeah. Okay. Folks living day to day. Although, you know, that depending on the estimate, that can be anywhere from 55 to 70% of families now are living paycheck to paycheck. So, you know, it's, it's a sad story. Those folks toward the low end of the spectrum, not, not degrading it anyway, but low end of the income spectrum are, are hit most hard by inflation and they can least afford to, uh, bear those costs. So that's that sort, but back to this, uh, real quick mm-hmm, when price is gonna back off a little bit. So I think when demand backs off a little bit, right. And as far as that goes, we're starting to see a higher likelihood of an economic turn down because the fed raising interest rate. So I think, and that raises the unemployment rate and so forth. So if the economy slows, we would expect. Demand to slow as well. Right. And then on this, those supply factors, mm-hmm, the opening up of Wells and so forth in the us. So this, some of this is underway, but as demand starts to back off, because the economy gonna slow down, I don't see that supply us supply really picking up meaningfully and the other supply piece there is OPEC and who knows what they're up to. Yeah. Right. We will almost always try to, uh, arrange things such that price of oil per gout per uh, barrel is higher than. So I don't see all of that. Uh, in a nutshell says, I don't see gasoline prices coming down meaningfully in the near term, in the next six months or so anyway.

Bobby:

Wow. Six months. That's incredible. So talk to us a little bit about the inflation in the principal inflation, right? Cause this is something that like, I, I was talking to my wife and I say, oh man, you know, inflation's gonna continue to go up this and that. And my wife was like, well, why? And I simply looked at her and I was like, well, I don't really know what is inflation the principle and how is it affected by our society or government

Rick:

or things like that. Yeah. So inflation and there's various ways to calculate it. But inflation basically is just an increase in the overall prices that we pay for. Goods and services. So when those you know, the government, one measure of inflation has the government it's called the CPI. I don't know if you've ever heard of this, the consumer price index. Okay. Yes. CPI is out, you know, economists get all jumpy, right? We, we don't live an overly exciting life. So we need to, you know, get excited about things and CPI is one of them, right. Uh, but the, you know, the way that's measured is the government comes up with a standard basket of goods and services that you and I buy each month, the typical American, what they buy. Okay. And then they, uh, figuratively anyway, check that basket out each month at the us, uh, economy, grocery store to see how much it costs. So if last month that costs a hundred dollars, that basket of standard goods that you and I buy. And this month it costs, you know, $108. Then we say, Per the consumer price index, the inflation has gone up 8% from a hundred dollars to $108. So that's the way inflation is measured. And then the question is, well, why the hell's that price going up? Why are these prices going up? And if you think about it, that basket that the government creates got all these goods and services that we buy in there. The typical American some prices are go, not, it doesn't mean that every single damn price in that basket is going up, but on average, the price of the basket is going up. Okay. And then question is why, and the answer is kind of ties back to something we talked about earlier here, what happened? Uh, the well-intended folks in Congress and the well-intended federal reserve. In economics, we call these guys fiscal policy makers, the Congress people, and monetary policy makers, the fed at the beginning of the COVID crisis, uh, they saw or feared an economy that was falling off the cliff. So they wanted to throw as much stimulus into the economy, add as much demand as we could to prevent that economy from falling. So, as I mentioned earlier, the government sent out checks, enhanced unemployment, gave all sorts of benefits out the folks. And additionally, the fed lowered interest rates. So that really, and, and you, and I, you know, took a loan out maybe for a car that we otherwise wanted bought because the payment was too high. But with the lower interest rate, Hey, we're gonna buy that. Or folks bought houses like never before, right? Hey, that mortgage rate's down that monthly, payment's more affordable. I'm gonna go for that. So when there's a big demand in place, right? Uh, that generally. In economics. Right? Makes sense. I think in life, a lot more people want something it's gonna force the price of that, something up. And that's what we've seen here. Now, this has been, and that's kind of standard economics. But it's a little more, it's, there's been some things that have made it even worse. So we've had a big increase in demand and you guys get it right. Higher demand. It's gonna force the price of goods up. Sure. Now just put that aside and just think about supply for a second. If supply goes down of a good. The price of the remaining goods is gonna go up. You can think of if they're formal, everybody wants a Tesla and there formerly were a thousand Teslas on the lot. Well, maybe they're all being sold for 80,000 or whatever, but if everybody still wants a Tesla, but that dealer only has two cars on the lot. The supply at Tesla's has really dropped from whatever 1,002, those remaining two go way up in price, right? The buyers all want it. They're gonna bid the price up. So in this, so we've had supply decreases in the goods that are provided to us related to the pandemic. China was locked down, couldn't provide us things that we need to make products, for example, microchips in cars. So if we can't get microchips, we can't produce cars. There's less cars. The price of cars go up. Hmm. The skirmish Ukraine and Russia has had some, uh, additional, uh, supply chain impacts as well. And that ha that, you know, on the margin, those supply issues have added to the inflation problem. So we have demand way up and supply problems cutting in the supply. And both of those are a disaster for inflation, both put pressure on prices upward. And that's what we've seen as you guys said, inflation's very high. It happens to be a 40 year

Bento:

highs. So do you think this is gonna throw us into another, uh, recession, like we saw in 2008 and with that, do you think there'll be a housing market crash as well? Uh,

Rick:

the question is, you know, the fed is gonna try to fix this by raising interest rates. So you and I is kind of that demand piece that caused it, that we're talking about. We said the government spent a lot of money. Well, they can't reverse what they did. We already have the money. They can't call us up and say, Hey, check back. But the fed lowered rates and kept them at zero for a long time. Now they can reverse that. And that's what they're starting to do. They're, they're starting to raise interest rates and have the last couple times they've met. And, uh, so those higher interest rates, again, the idea is it leads you and I to borrow less. So we're less apt to take that car loan out or that mortgage loan out. So hopefully, uh, that from the Fed's perspective, that will cut into demand demand, right? We bring back, bring down inflation, but the problem is it's kind of a balancing act, right? Higher interest rates. Sure. It's gonna cut into demand and lower inflation, but at the same time, while it's cutting in demand, we're not buying houses. We're not buying cars. Et cetera. Companies don't firms don't need to make those things needed, right? So they start laying off people mm-hmm and this is where it starts impacting the economy. Higher interest rates, less of a demand, less production needed, less jobs, less jobs, and the economy starts hurting. So the question is, can the fed raise interest rates to cause inflation to come down without popping the bubble of the economy and forcing a recession and answer your question? I tend to think we will see a recession into next year, you know, maybe towards the first or second quarter of, of next year. You know, but economists, I mean, we like to think we're, uh, hard scientists, you know, with the old white coats walking around dish or whatever. Sure. The socioeconomics is social science. So we can't be that precise people say, oh yeah, we're big. Recession's coming or no way. They're just guessing as I kind of am with a little data behind my guess. And

Bento:

most of, so what do you think, what do you think an alternative way to, uh, you know, reduce inflation would be besides raising the rate?

Rick:

Anything that would lead to less spending by you and I by the American consumer. And less investing by American businesses like to expand their plants. That's another thing when interest rates go up, they're less apt to build onto a plan. Right, right. Costs more far money. And then on, on top of that, maybe they don't need it since there's let fewer people are buying their good. So anything that does that you know, there's a fiscal policy. If Congress can do something, they could, would, none of us like, it, it sounds very textbook like, and you, but one way to take money out of our pockets. Right. So we have less to spend is to

Bobby:

raise taxe raise taxes. Yeah. So that's

Rick:

what you may have seen in your, in your basic econ class. That's another tool to slow down the economy is to raise taxes. Mm-hmm you know, I see Biden's been monkey around with a plan to raise taxes on the, on the wealthy, I don't know where he is, but that, you know, I'm not sure that's, that's the avenue to take at this point, but I think it's pretty much just hold on and hopefully the fed can pull this off without causing a recession. Although I kind of think that's gonna be tough to

do,

Bobby:

frankly. Yeah. I mean, it kind of seems like we were due after, uh, you know, the pandemic that, you know, how are we gonna get through this without feeling something, you know? Yeah. And I think too that when the, the fed raised interest rates, uh, am I correct in saying that that was ahead of schedule as well? Cuz inflation started going up so high. Yeah. Yeah. Yeah.

Rick:

So, okay. You know, they're raising it a little fast raising rates a little faster than most anticipated they would. Okay. In fact, last time they raised, they bumped it up another quarter of a point at the last minute, because they saw some inflation data suggest that the story's worse than they were

Bobby:

thinking. Yeah. Oh, wow. Okay. Wow. Incredible. And so and also I, I had read, you know, gosh, this was the beginning of the year that they were playing to raise it twice and they already have that's correct this year. They have. And so that's, we're likely now that they might raise it again a third time this year,

Rick:

they're probably gonna raise it right through the end of

Bobby:

the year, I

Rick:

would guess. Wow. Okay. Wow. Now the, the magnitude matters, right? Right. The three little ones or, you know, three big ones that are somewhere between the two. So I think, uh, they're probably gonna be meaty for the next meeting or two, and the fed meets eight times a year. So basically every, uh, weeks or so six, seven weeks.

Bobby:

Hmm.

Bento:

Yeah, it's horrific. So Rick, I really wanna buy a house and this, this whole crisis totally screwed me over here in Rhode Island. I mean, PE as I'm sure everywhere people were buying houses without inspections, nothing, people were literally writing the seller's notes as to why they really want the house as a way to like kiss their ass to, to sell them this house. Yeah. When do you think I'm gonna be able to reasonably buy, you know, an affordable house? Like it was, you know, Five 10 years ago,

Rick:

you know, I think you're gonna be in good shape to get a, uh, affordable house or at least someone that will be willing to take your bid because there's gonna be less demand for houses. But the question is are you gonna be able to pay the monthly payment because the interest rates are gonna be high now. Right? Right. So the demand for homes is gonna go down, but concurrent with that, and actually a driver of that drop in demand part anyway, is higher interest rates. So, you know, the question, can you, will you be able to afford not you personally, but will one be able to afford the higher interest rates if they can? It's gonna be a buyer's market. Mm. As, as the, uh, housing market goes into yeah. You know, a pretty sharp decline here. It had a nice run up as you guys

Bobby:

said. Yeah. I think the hardest part hearing around too is there's no new construction here and because there's, there's hardly any new construction here of affordable houses. Right. They always, you know, they, anytime they build a house around here, it's 750,000 or up. Right. And so the affordable housing around here just doesn't get built, like used to, so as soon as one goes on the market, cuz supply is so low, the demand is so high as you were saying. And so, yeah, that's where I think Ryan, we have a tough time here with that. They're gonna figure out how to get more affordable housing.

Rick:

Yeah, bill. I mean, we have the same issue down in our area as well. Yeah. You know, 700 million homes are going up and you know, it's tough times for those folks that, uh, you know, aren't in that income level that can easily afford

Bobby:

those. Right. Well, and it's funny too, because you know, you, it's one of those things, like you can't really blame anyone, right. Because the cost of doing construction is up the cost of getting those supplies is up. And so naturally these folks, when they buy a plot of land, which is ridiculously expensive, they wanna try and maximize as much profit as possible. So they build these ridiculous houses cause they know somebody's gonna come along and buy it. And so it's one of those things like, you know, I, I don't necessarily, right. Like it's, you know, how do you, how do you get someone to buy land and build affordably? Like it it's gonna be like out of the generosity of someone's heart, like it's not gonna happen.

Rick:

right. I mean, you usually see those moves after, you know, someone exits from that business after they made a ton of money and you know, and then, and then come marching down saying, oh, you know, I have a soft spot in. Part for the, uh, average folk. Well, you kind of leave out of the story. The fact that, you know, this, this, uh, this folk is, is living in a, uh, you know, multimillion dollar home because he led a different, uh, style of a business before, but I don't see that happening. It's, you know, this is a problem, not just in Rhode Island or Jersey, it's a problem in many areas across the country, affordable housing, you know, so this is going to, you know, we'll see housing slump down, right in prices. Uh, the affordability index is gonna go up because of the higher interest rates in that. But the other part of housing rental will probably see, go up because there's gonna be less or, or certainly won't be declining. Like, uh, housing purchases will the price of new homes or existing homes, uh, because people aren't gonna be able to afford those. And then we have the economy downturn as well. People aren't gonna be able to afford the new homes. Uh, many won't they'll be looking, they'll be looking to rent. So it's kind of, especially that new buyer that would other in another period, be ready to buy their first home will be, will be looking to rent. And we'll probably see an upward little upward pressure in rents over this next year or so.

Bobby:

Oh, it seems like this seems like the, uh, the average person just can't catch a break when it comes to this kind of stuff. I feel like, uh, you know, a lot of our, our, a lot of our monetary policy unfortunately, is, uh, not built for us.

Bento:

right. I feel like it's been that way my whole life. Like, I can always remember my parents playing too growing up that like, oh, the middle class, you know, they're always screwing us. And you know, now I'm 41 years old. And like, yeah, like I've, you know, I'm just a middle class guy for an island. You know, I rent right now. I make, you know, I make a decent salary, but I'm not, you know, I'm not loaded. I get to do the things I like to do, which is nice. But, uh, you know, it's the only way I've ever known how to live is paycheck to paycheck.

Rick:

Yeah. It would, you know, I, it seems anyway, it would help. And I don't know how you implement something like this, but if these people making the decisions, we talked about these, you know, fancy phrases, fiscal policy makers, monetary policy makers, Congress, and the fed, right? Yeah. It would be useful if you saw an average Joe, in that crowd, you know, someone who was, you know, pulling up in a used car or the, yeah. You know what I'm saying? The average, you know, across the fed leadership there, you know, there's a couple exceptions, but you know, the net worth that he is got multimillionaires, most of them. Wow. And you know, the folks you see. On, uh, TV from Congress. I know less about the specifics of this, but I I'm pretty sure most of them are very well off. Mm. Certainly you hear about Pelosi's net worth over yes. 50 million in others, you know? Right, right, right. So, you know, it, it would be useful to have, you know, one of the average folk, we call this main street, you know, economics economists sit around and you know, they mumble, you're thinking anyway, like, oh, that's wall, that's a wall street. Issue's a main street issue. They kind of divide the world like that. Yeah. Right. We need more main street folks making decisions that impact main street. Right. Cause you know, most of these guys didn't. It's not like, oh yeah. I used to be on main street and I worked hard and got my way out. Mm. So I, but I under, I remember, you know, I know where they're coming from. A lot of these folks aren't like that, you know, they, they, you know, they weren't on main street on their way to the top. They were, when they came outta the womb, they were at the top.

Bobby:

Yeah, exactly.

Rick:

Right. So they can't even say, you know, well, the best they can say is, yeah. You know, I talked to my constituents or whatever, and other thing, but you know, they didn't live it. And you know, I'm saying like, if we get some folks that really live the day to day headaches that you know, you and I, others have yeah. Middle, middle class folks. It might be useful.

Bobby:

Let's get some single moms and some, uh, some folks who, who are, you know, uh, single parent raised. And

Bento:

all, all we really got is Bernie. And he's not gonna be around doing this job for all too much longer.

Bobby:

Bernie he's he's too

Rick:

much. Where's he at? He's in you getting close to 80 or?

Bento:

I think so. Yeah. He's gonna be

Bobby:

something like that. Probably. I think now. Yeah. When he, when he ran against Trump, 78, he was 78. Oh, he's over. Oh, he was,

Bento:

yeah. Wow. Yeah. That's something. Yeah. So, so the main street thing is a good segue into wall street. Right? And this kind of, you know, maybe you can explain the stock market a little bit to us, you know, you mentioned people got money, they're spending it. They're really eager. So like, you know, people are still, you know, we're not broke yet. We're not in the recession. So people are pumping money into the economy. Why is the stock market still so low? You would think that the purchase of goods and services would, you know, bring those, those stocks up

Rick:

the stock market is, you know, a lot of it's based on where do we expect the economy to

Bobby:

go. Right. And it's like, fear right now everyone's afraid. And so they're getting out and all that selling causes the market to go down. Correct.

Rick:

That's right. And the fed likes that, you know, really the reason. Yeah, because back to that same demand story demand was too high. They did too much right. Congress and the fed demand too high. We gotta pull that back. So part of demand, uh, the money, the spending, making up demand comes from. What we call the wealth effect from the stock market. So, you know, the simple example you buy a, a share of IBM for I'm being loose with the numbers here, but a hundred bucks. And it goes up to 150. If you sell that, you know, you have an extra $50 to go out and spend. So as the stock market goes up, we call this the wealth effect. You're gonna go out and spend it. And even if you don't say it, you bought it for a hundred and it went up to one 50 and you decide, eh, it's I think it's going up higher. I'm gonna leave it, sit and keep rolling. Even though you don't pull that profit out, right. You're feeling better that your wealth's going up on paper. So you're more AP. Yeah. You're more apt to spend more too. So as the stock market goes up, either because you took the money out or you're just feeling better, cuz your paper profits went up, right. You're gonna spend more and that that's forcing inflation up. So the feds certainly, although they're not out there saying, you know, high fobbing people every day saying yes, the stock market, they like that because you know, the more the stock market drops down the that helps the demand curve shift. Maybe the fed doesn't have to raise interest rates as much to cause that demand to shift back.

Bobby:

I know I've been trying, I've been trying so hard as, as we've seen the market come down and I know it's, you know, expected to continue to go down here in the near future. I've been trying to pump in as much as I can into the, uh, right. The, the us stock index fund there. just to try and take advantage of the bounce back up. Yeah. I don't

Bento:

that's what I was gonna say is this is a good time to put money into it,

Rick:

frankly. You know, I don't even look at my statements. I just waited out and I think it's gonna turn and, you know, but I, it seems like there's a ways to go, but, uh, that's not my, uh, area of expertise. And again, I don't think anyone can predict the market bottom decision. Yeah. We seem like of precision. Yeah. It seem like the rallies recently have been rallies on the downside, you know, temporary bump up, but we're still trending down. I can tell you what if, if the, if the rally starts again while inflation in gear, this is, this will be a decent tip. If you see a, you can count on that rally being stopped, the fed will get out there and start commenting on the stock market, being inflated and kinda Jawbone it down the scare investor, because that's the last thing they want is to add to demand. And if the stock market starts going up. Before the fed has inflation fixed. That's gonna add to demand and the Fed's gonna wanna stop that. So one way or another, I see the stock market heading down over the rest of this year. It may not be a straight line down. It probably won't be yeah. Little upturns and stuff, but overall, I think it's gonna be pulling back because of that, that wealth effect, the you want to, you don't want people taking money or feeling good and then adding to

Bento:

demand. Hmm.

Bobby:

That's terrific. To change gears a little bit here, Rick. So one of the things that, uh, I've kind of been interested in over, over, you know, in the past is economics in total, right? And I bought a book at one point. It was big ideas explained simply they do a fantastic job of creating these books around economics, uh, philosophy, psychology, you know, all kinds of different topics. And, and one of the things that they brought up was Adam Smith and the wealth of nations and the history of kind of that capitalistic idea of open markets and free trade. But I don't, I can't say that I know enough about Adam Smith to really like, if. Adam Smith. When, when he created wealth nations, he really had an intention though, to create a stronger middle class. Is that correct? Because he felt that you needed all of those people in the production chain,

Rick:

right? Is that correct? Yeah. That's, that is correct. I mean, I think where he, you know, slightly missed the boat, I don't, honestly, I don't pay a lot of attention to economics history. Mm-hmm but I'm more worried about what's going on today. Right. But to the extent some of it applies, but we're, you know, what's he from, you know, 18 something, Adam Smith even

Bobby:

forget, uh, yeah. A while back.

Rick:

1880s. Yeah. Yeah. I mean, we had to read a couple chapters of that at one point, but, uh, yeah, so maybe he didn't count on the power, the monopolistic power. So might say of, of the, uh, the, uh, firms that hire the workers, you know, so they can clamp down on the benefits, going to those workers. And that's pretty much what we, what we've seen, although for a period of time unions, unions, right. Were, uh, pretty active, but

Bento:

they've gone by the

Rick:

wayside now as well.

Bobby:

And why, why do you think that is? You know, so when we talk about unions and, and kind of protecting the rights of workers and, you know, not giving rights, these huge mega corpse, you know, how has our economic system been designed. Where now we have this problem of this huge wealth disparity, right. It, I mean, at some point in our history, how did an economist not say, well, look, this is gonna be really bad for the middle class in, you know, however many years, or like, where was that point where that disparity started growing?

Rick:

Yeah. So, you know, I, I would say that this, if it didn't start, then it started getting worse then as, and has continued over the past 40 years or so that's the onset of globalism really? And that when, you know, globalism being kind of, if you think figuratively as no borders, goods and services just flow across the world with no interruptions, right. And capital mm-hmm there's not any, you know, uh, not any major impediments to get your goods sold in another countries. This is kind of like the idea of globalism

Bobby:

free trade. Right, right. So

Rick:

that led many us firms. Right. Well, focus on the us with your question, us firms to you know, take advantage of that cheap labor overseas. They could get it quickly with the advent of technology. And so forth, they can, you know, order things almost in real time from a very cheap supplier overseas. And, you know, they're making products in the us still some, but the inputs to those products, they started getting from overseas suppliers in the, as globalism expanded, right. Mm-hmm right. Build a, build your factory for inputs, or maybe even make your damn products in Indonesia or Vietnam or China. And this led to us, uh, manufacturing workers. And I was a pretty unionized business there for a while.

Bento:

I was a victim of that until 2003, I was a machinist and we were, yeah, we were making carbon parts. And one day the business was there since God, 1940 something. And, uh, the owner called us in one day and said, they're shipping everything down to Mexico and we all lost our jobs. Yep.

Rick:

So you saw see this over and over and that just like, you know, those folks that you included don't know how you ended up on your feet, there seems like you're doing quite well. Yeah.

Bobby:

luckily yeah, yeah. But

Rick:

many dent, you know, maybe didn't get a job that kept up with that good wage and benefits. And you started seeing this spread between the haves and the have nots kind of widen,

Bobby:

right?

Bento:

Yeah. I mean, there were guys there that were that working there for 30 years. It's like, it's the only thing they've ever known is, is working that, those kind of jobs. Yeah. So a lot of

Rick:

that, you know, globalism reaching overseas for cheaper. Sources or making your product or make getting your inputs for your product from overseas, it led to layoffs or closing the plants and then concurrent with that you saw, you know, certainly over the past 40 years or so additional technology that's, you know, Hey, bring in some robots, we need less people. Where are those less people go? They go out the door, right. And they're, they're, uh, you know, these are often folks that worked many years in the manufacturing industry and that was their skillset, right. They worked damn hard putting, putting a meal on the table for the family. They kinda kids in college over to home, still to pay. And they're certainly out on the sidewalk looking for work. So this has led to a lot of tough times globalism.

Bento:

They talk about that with the truckers. Now, you know, once, once these automated trucks really start hitting the streets and you know, no, no need for a driver, you know, there's so many people that drive a truck in this country and kind of same situation, you know, they, they may be older and not able to learn a new skill

Bobby:

set. Yep. And, and so with that, if, if, if we don't increase our GDP, our, our gross domestic of product, how do we combat that? Right. Cause it, I mean, nobody's bringing those plants back and bringing those, uh, you know, jobs back here. And, you know, I think, you know, like you said, 40 years ago, our GDP was huge and, and you know, really manufacturing based and production based. And now if I'm not mistaken, the largest percentage of our GDP is financial based. Hmm,

Rick:

it's just that, you know, as things get soft, for example, the manufacturing, uh, industries over the years, it just, you know, it's things, it takes a while to adjust, but they just move the different sectors. Productivity is enhanced and as a result, GDP generally starts trending up as well. But, you know, GDPs been pretty sluggish here for outside of that. You know, post pandemic, big bump GDP as a result of that big demand, uh, proceeds that were sent out by, uh, the federal government and the, and the fed with lower interest rates. GDPs been relatively sluggish for 10, 15 years or so since the oh eight crisis.

Bobby:

Right. It really hasn't

Rick:

been a boom. We've seen the stock market go up, but in terms of GDP, it's been, it's been relatively, uh, sluggish. We really haven't seen any major

Bobby:

growth here. And do you think that there is a correlation between the GDP and the wealth disparity? This is something I've, this is something I've heard in the past. I've come across online doing various research topics where they, they say that if we can't increase production in those types of jobs here, then you're, you're, you know, like where Bernie comes back, comes around and says, well, let's tax all the billionaires and tax all the super wealthy. Well, really, if you. Raise a GDP you'd force these companies to pay their employees, reasonable, livable wages. And then in turn, you're stimulating that bottom half. And so I just wanted to ask you about that in terms of whether you think that's actually effective or even really connected.

Rick:

It there's a lot of moving parts to that one. Uh, portion of that, that somewhat falls apart is, you know, everyone's for this, we gotta put the American middle class back to work. They need what, you know, better wages, fruitful wages, et cetera. And then when you say, are you willing to pay a higher price for your goods? Because the cost of labor is gonna go up right. Compared to. These goods could be made for overseas. Are you gonna, are, are you gonna be willing to, uh, instead of buying those t-shirts at Walmart from Indonesia for a pack of five, for 15, are you willing to pay, you know, 25 for those, if they're made in the us and studies show that, uh, on average and averages are funky numbers, right? Mm-hmm on average, Americans are only willing to pay just a little more to keep Americans employed, to bring the middle class back. So we need to have a market for the goods that they're producing at a higher cost. That's gonna be passed on by the companies, to the consumer, you

Bobby:

and me. Right. Right, right. And so, and so without that, without that motivation, that's something that's never gonna get changed. Right. Because I, I know already, if you were to ask most people in the working, you know, working class, middle class, lower class, Hey, if we were gonna raise prices on these things, they're all gonna say, whoa, we already can't afford everything. How are you? You know, we can't turn around and pay those higher prices, but it's like, well, but then you can't turn around and get those jobs. that's right.

Bento:

That's right. But's only think the only thing, if we did raise the wages and we did pay the right, cuz we're already paying, paying high now because of this inflation, if people were making a livable wage and we were manufacturing things, the United States wouldn't the pandemic have not affected us in such a adverse way because. Yes, China does it. China makes all, literally all of our things basically. So wouldn't, we have, we'd still be paying more for stuff, but we'd be making more wages. So this inflation would hit a lot less harder than it does now.

Rick:

Right, right. So I think Joe's right on with that, you know, we got bit and, uh, may get bit again, we, you know, we're slow to learn our lessons when it's money involved. You know, if, if we can save money, we're kind of slow to adjust those things that led us to save money. And one thing was, we had too many of our supply chains tethered to, you know, areas or just at one or a couple areas, right. China, Southeast Asia and stuff. Sure. So when they were locked down, we were, you know, we were screwed in some ex to some extent I was teaching, uh, an MBA class, uh, executive MBA class for a, uh, hospital concern here. And, uh, they were telling me how they could not get, and of course we knew this nationally anyway, but they couldn't get their PPE equipment, their, their gowns and mask because they had their two suppliers. Uh, as I recall, both in China and they were, they were bit by that. I, I ran into. A student from that class recently had a kid's birthday party and, and mentioned this and, and she was quick to say, she didn't think they had adjusted their supply chain yet. You know, you would think you got burned one, but the, but, you know, and then went on to say, but the cost is so different,

Bobby:

you know? Right, right.

Rick:

So you could make these changes, but then, you know, there's always nothing, you know, comes free and making a change like that is gonna, is gonna force prices up for

Bento:

sure. Right. But that's the thing too, is like, so many of these corporations make so much money in profits. Right. If they just take some of those profits away and act more like a European or, you know, like a Japanese corporation, our prices wouldn't have to go up and they could pay the labor. It's just like, we've just kind of made this cycle of greed. And I'm just curious as to when people are gonna be like, all right, like, this is enough. Like we need to stop this and it doesn't seem to be going in that trend yet.

Rick:

I mean, the evidence, right. You're right. How much of the higher costs are they gonna pass on to the consumer? Yeah. With the profit margins, many companies have, although we're starting to get in the earnings reporting season here on wall street. Right. Mm-hmm and I suspect we're gonna start to see earnings, you know, some more earnings misses than we've seen up to now is the economy slow, starts slow, and also. Less of that those cost increases are being passed on because of inflation. If maybe the consumer can't take it anymore. Right. Right. So, uh, yeah, you're, that's an important issue passing on the higher prices to the consumer and how much of it can you do?

Bobby:

Absolutely. And I think that that's one of the, that's one of the, uh, you know, the bigger issues too, is that, you know, that creates the divisiveness of, you know, is it these corporations? Is it the policy makers, you know, and that's where you start dividing lines amongst, you know, who's responsible rather than what's the solution.

Bento:

it's all like the hazards, the have nots now. Yep. Yep.

Bobby:

Good point. Yeah. Terrific. So Rick, the other thing I wanted to uh, ask you about was China in, in general, right. You know, we've heard that, you know, China's economy in the last, I don't know what decade has absolutely just taken off. And so do you think that that's because they have the ability to pay virtually nothing for their labor?

Rick:

First I don't, I don't buy that their economy has taken off mm-hmm I went for a moment having been to China many times, written a book in China as it was yeah. In Mandarin. Uh, I, I wouldn't, I don't believe their data.

Bobby:

Really, I don't believe much of anything.

Bento:

The right, like their COVID numbers are so for a country with that many people in it, you look at United States, they should be at, at least at our, you know, at our level or higher, and their numbers are so low Right, right. For, you know, there are towns in the mid Midwest, United States that had a higher outbreak than they did. Like there's no way it's possible.

Bobby:

So,

Bento:

so I don't,

Rick:

uh, you know, I don't put a lot of stock fair in their numbers, but, you know, given the type of government they have, certainly they can, uh, open their coffers and fund anything. You know, they have cheap, relatively cheap labor, as you say, they can keep their companies afloat. Right. They don't see a lot of what's going on in the official data that they actually. Who's at, for the rest of the world. Yeah.

Bento:

Now you seen him buy oil and bulk from Russia now.

Rick:

Right? Right. And I say this not, not being tough on China. My, my wife is of Chinese descent. Mm-hmm so, so we get there enough you know, it's just bad sports all the way around, over there. yeah, there there's a lot of people and, and there, and a lot of 'em are working and they're hard workers sure. Have an economy that's cranking things out. I will say that. I'm not sure. I go far beyond that with, with the data and so forth though. It's kind, you know, it's a manipulative government that, uh, is controlling the economy. It's not much of a free market, although they like to like

Bento:

to, uh, yeah. Like to pretend that

Bobby:

it is, or they like to tout it. That's funny. I, I guess I never really thought about that like that, but yeah, you're right. I guess that you can't really rely on, on some of that information. I think it's funny too, cuz I remember what was it two or three years ago, there was an area in China or, or a couple areas in China where they had built these massive like cities and then nobody moved to them and nobody could afford them.

Rick:

Yeah. I don't re I mean this happens every now and again, right? Yeah. There was probably some intent on the government to have something produced in those areas. Right. Uh, but uh, as it is, my in-laws moved to a new community that popped up outta nowhere, about an hour and a half outside of Shanghai. Mm-hmm I never got deep into the conversation regarding what's, you know, what's the purpose of that community other than, you know, they have so many people they need to get 'em outta the city and out, out. Right, right. Yeah. The whole, yeah, the whole thing's government controlled government bill, as in that case, it was condominiums and, and they moved out. But yeah, it's a much different

Bobby:

economy than what we see. Yeah. So that's what it is. Is they just have, they just have the ability to do so much of their own manipulation. Now it's, it's kind of so falsified, right? I mean, you saw,

Rick:

they, they wouldn't, uh, let us, uh, look closely at the source of COVID, you know, I'm not sure, you know, they're necessarily leading the world with guilt there. I don't know but we

Bento:

never got

Rick:

a, we never got a close look, Hey, come on in and take a peek yourself. It was, it was never like that. You know, I, I don't think they'd say, Hey world, Hey, Western countries, come in and take a peek at our economic data that giving you, you know, that's not gonna happen. Right. I'm sure there's all sorts of, uh, issues with the data that they, uh, send. But having, like I say, having said that, I said, damn big country hardware, industrious people. Mm-hmm for cranking out a lot. But it's certainly far from free markets. So yeah, you know, it's big. They're making things. I don't see them as overtaking the us.

Bobby:

Wow. Okay. Economic

Rick:

prowes anyway, but, uh, who knows?

Bobby:

Yeah. Interesting, interesting. Well, and again, I think that, that maybe there's a, a, a misconception there, right. Because I think that a lot of people do believe that China has surpassed the us and economic pro as you put it. But yeah, I totally, now that you've kind of illustrated that point of, well, you can't really count on what you hear from them. It, it does make me second guess that, and so I do think that that is a common misconception out there though. And so I was, I'm glad to hear that. One of the other things, uh, and again, I'm sorry, I'm jumping topics here. The other thing was uh, UBI, right? So this is kind of a new concept that we've heard, uh, within the last bunch of years, especially with Andrew Yang and running for president of the universal basic income. Right. And the first question I had, I think everybody has is where are you getting the money for this? And I think, especially we heard from Andrew Yang about the truckers saying, well, when these folks lose all those jobs, what are we gonna do with them? You know, my mind is like, well, you skill retrain. We, we find another avenue for these folks, you know, I'm sure they have skills in, in some way. But UBI and I was like, how is this gonna work? So what, what do you think about UBI? And, and, and do you think it's actually possible or plausible for our future.

Rick:

No you know, two issues. Well, the broad principle is, you know, I I'm, I'm never big on, or at least my ears get pinned back and I start paying attention when somebody's particularly, the government is monkeying around in the market. Mm-hmm government can't do anything without

Bobby:

it up, basically. Right, right. Better to make,

Rick:

you know, years ago. But they're certainly not very efficient doing a lot of things. And why would we think they can get in the middle of a market and start controlling it? And the second is so, you know, I can't even get past that hurdle. Number two, I, I frankly never heard a figure that made sense how much people were gonna bring in. I mean, I, I don't remember what the figures were when yang was, was on the stump talking about this. I remember thinking

Bento:

a thousand dollars a month. Yeah. Maybe

Rick:

I'm in the New York Metro and thinking maybe it's, you know, much cheaper out in Kansas city suburb think, but, you know, I kept thinking, well, geez, what the hell's

Bobby:

that gonna do? Right. Terms of helping

Rick:

these people. And number three, even if it did help, I, to, uh, your point, Rob is where the hell's that money coming from,

Bobby:

right. Who's right, right.

Rick:

Where's it coming from? Because even if we're running deficits, Meaning we spend money. We don't have in the government, we over draw the treasuries account. We gotta bar we gotta cover that overdraft. Right, right. Just like you and I have to cover if we, you know, have an overdraft in our checking account. Yeah. We have to cover that the government needs to cover their overdraft and the way they do it is they borrow money. And the way they borrow, they sell treasury bills. So, but they have to pay that back. So we may be temporarily able to fund the deficit, but, uh, we have to pay those funds back at

Bento:

some point. I mean, the idea was always that they would tax Amazon and tax McDonald's and, you know, tax all these companies that are turning to automation because, you know, I get the appeal, right. If, if I own a trucking company, it's certainly a lot nicer to have an automated truck that runs 24 7, doesn't have to sleep. Doesn't, you know, no health insurance, no. Right. No health insurance doesn't need to eat, you know, there's no, you can just work it until it, until it ties. But if they're gonna make more money off them, then they should be putting more money into, you know, programs or, you know, like, like Rob said, like a universal Inc basic income, which again, like you said, has a lot of, uh, you know, detractors to it. For sure. Especially if the government's involved, you know, on that,

Rick:

you know, with that example. So yeah. I mean, I could see a situation where we're taxing the Uber rich firms, right. Getting some revenue. But instead of this universal, basic income, just putting this into, you know, retraining, I think is robs him. Maybe

Bobby:

mm-hmm you know? Yeah. Labor skill training, uh, I mean, labor skill

Rick:

training, those type things instead of

Bento:

universal healthcare. I think we need that first before, before we need universal basic income.

Rick:

Right? Yeah. So I don't see that idea certainly today. In today's environment, you know, this isn't gonna even get off the

Bobby:

ground.

Bento:

Yeah, it's interesting. They actually do. They're actually doing a program here in Rhode Island where they're giving people who are below the poverty level. I forget how much it was per month,

Bobby:

$750 per household, I wanna say. But if it was, if you were a married couple, they give you a thousand, I think.

Bento:

And it's been it's it's actually per month, per month. Yeah. It's actually helped out a lot that the program's going well, but you know, it is such a small scale compared to giving everybody in the United States a thousand dollars a month. Well,

Rick:

who's paying for that.

Bobby:

Uh, I believe it is a state of, they got a federal grant for something that they turned in and it was like 50% of it's gonna pay for this. I mean, we're only talking about, I think it was under a hundred residents. Yeah. It, it wasn't a big pilot program. Yeah. But so far that they said the, the results were pretty good. Uh, there were a few people who used that money very wisely and were able to essentially, uh, I think there was one, one fella. He used, he saved his, all of his money. And then at the end of the program saved his money to go buy a taxi cab. And so now he can do all his Uber and taxiing and all that stuff. Now he is, you know, he has, he does that as his own business now. And so I think that those stories are great, but we're talking minuscule numbers on a minuscule pilot program. I mean, you know, if we were to look at the grand scheme of. All right. Did this help people get out of poverty? I still believe that answer's gotta be a very small percentage. Mm-hmm mm-hmm

Rick:

but you know, it's promising, although on a small scale and it's nice to hear those positive stories. Yeah. You know, I think those, so we talking about main street wall street before, right. I think a lot of wall street crowd is thinking, you know, these guys are getting the money and they're doing drugs or buying drug, you know,

Bobby:

what are they doing? Well, that's certainly the, that's certainly the, the line that I think the, the, the objectives of a UBI idea, that's the first thing they say is, oh, great. Now we're just gonna create a bunch of lazy people who sit around don't do anything. Right.

Rick:

So I, I think, you know, it's nice to hear those success stories with that. I think going beyond that small scale, uh, would be tough. You know, I, you know, I I'd be happy to, uh, you know, be balanced looking at it, however.

Bobby:

Yeah, absolutely. Absolutely. Yeah. I mean, it's just an interesting thing. Cuz again, you know, like I said, my first instinct was where are we gonna get this money? Cuz you know, if they're gonna give it to people who need it most and are below that poverty line. Oh great. I'll, I'll pay an extra couple percent, you know what I mean? On my, you know, annual tax or something like that, because then hopefully that means I can pay less on welfare and other social programs. So

Rick:

it'll be a wash, right? To some extent you shifted right.

Bobby:

Right. So I, I mean, I, I think that's a big thing is trying to, you know, trying to, if you're gonna try to create additional ways of, of stimulating the lower classes of the economy, wouldn't those programs be the first thing looked at, I don't understand how much money is dumped into these programs. And then I feel like there's not a lot of checks and balances on them.

Rick:

Yeah. I mean, I think, right. I mean, I agree with you. There's checks and balances are in general, nowhere to be found on those. And as a result, you know, a lot of bad stories originate, probably accurate ones in many cases, because those, you know, in previous attempts or current attempts, if it's going on real time, you know, these bad stories result, and these are the ones people hear about, these are the ones that you like to listen, the newscasters like to broadcast. Right? Yeah. You're not talking to you won't you won't see many of the stories of the one you provided

Bobby:

Rob. Yeah, of course not. Right. You did something good. Right? That, that one, that one was in the smallest little column in the province journal. I went online to see if I could find it anywhere else. No,

Bento:

of course, you know, but the guy who

Rick:

picked up, you know, went and purchased a, purchased a weapon and did something horrible. That that would certainly

Bobby:

be there. Yeah. He made he, yeah, he made the AP news

Bento:

there. really,

Rick:

I tell, you know, the swim, I'm not a political scientist, although I've kind of fancy myself as a. You know, political expert. I follow very closely. Mm-hmm we're the tide shifting, right. We're going back towards the, uh, Republican side of the spectrum here. That seems, uh, pretty obvious to me. Oh yeah. I'm more a, an independent here. I'm not on either in either

Bobby:

camp, but yeah. It's well,

Bento:

this

Rick:

baby's swinging and it's swinging pretty, pretty quickly over towards the

Bobby:

Republicans. Yeah. And I feel like the, I feel like the swings are only going to get more dramatic. Right.

Bento:

As we, the teams are becoming more

Bobby:

extreme. Yeah. As we separate farther apart

Rick:

and it's far right. And then, you know, Biden it's, it's tough. I'd say the same if Trump was in office. Yeah. He may not have totally everything to do with the inflation and the economic financial situation, but the fact that he's in office, you kind, that's part of the rules of the game. Right. Right. You have to take the blame for it. That was Trump. We'd be yelling. And you know, Biden's taking the heat on that. And, uh, right. You know, on

Bento:

top of that, Obama took the heat in his first term from Bush mm-hmm for the war.

Bobby:

Yep.

Rick:

Of course. Biden has other issues in terms of probably relating with people that don't help, but this economy, you know, I think there's some exceptions, but most people vote with, uh, their, you know, with their pocketbook.

Bobby:

Right, right, right. Yeah. Yeah. Definitely. I think that's a huge factor, especially as you, as you rise up economic classes, I think that's even more and more. True.

Bento:

Right. I was just telling wife the other day, like I've I voted Democrat as long as I've been violent politics. I don't consider myself a Democrat anymore, just cause what's going on. I lean more towards independent, but you know, I, I feel like every time we have a Republican president in office, my life is a little bit better. Like financially things cost less. I, I, I'm not feeling the pinch, but every time you have a democratic president, I'm just constantly feeling that pinch in the back account. And I don't know if it's layover from one president to another, like you said, or you know, that president takes him a blame. I guess if somebody does two terms, it's easy to say it's it could definitely be them, but a one term president it's really tough to tell cause they just don't have enough time and there to, to make that change while they're still in office. Yep.

Rick:

I hear good job.

Bobby:

I, I think it's an interesting point too, because you know, if you look at the inflation now, right. I don't think that you could even turn around and say, well, Trump caused that, right. I mean, it's just, it's just the nature of the beast of going through a pandemic and coming out to their side. Correct. Right. It is. It

Rick:

is, you know, although I, I don't think Biden had a push through another, uh, major spending bill there. Trump had already somewhat overdone it and then Biden, you know, put a little more gas in the tank.

Bento:

Right. He's like, thanks for electing me. Here's some of my money. And everybody's like, yeah, we love Joe Biden.

Bobby:

let me get a couple extra points. Yeah. but the real world

Rick:

is even if Biden did nothing. The rules of the game are he's in the office and he's gotta take blame for what's going on right now. Right. Right. And you know, he doesn't, uh, he doesn't do himself, any favors pointing fingers all the way around it's, you know, it's, it's Putin, it's Trump. It's this it's that.

Bento:

So you really into politics. I gotta ask you, uh, who do you, think's gonna run in 20, 24 for, for the president.

Rick:

That's that's a good one. You know, I, I don't think Biden's gonna run

Bobby:

again, but oh, you don't, you don't think so. I really hope much.

Bento:

Yeah. They say camel is gonna try to run, but man, like I really dislike that woman and I think she gonna end up it's so serious. Like anytime here, any kind of interview, she just has this like really shitty attitude about her. And I think she's gonna come off kind of like Hillary Clinton came off 2016 where people just aren't gonna really get behind her and

Bobby:

those rumors are popping back up,

Bento:

Hillary, Hillary, please guys stay the fuck away, Hillary. Like, you're very ruined so much.

Rick:

but she's leak. She's leaking that out. I think I saw that last night. If not mistaken. Yeah, me too. Maybe I just happened to be reading it last night. I don't know when it came out, but she's. Did you see, uh, today, uh, Harris when asked and I just saw blurb on this, did you catch it where she was asked, uh, about Biden running and maybe her role as the vice president in a future? No run. And she. And no, and without uncertainty, Biden's definitely running. These are my words, not her. You can fact check and I'm definitely gonna be his vice president. And that's, that's the message she sent anyway. However, you know, this white house, which, you know, consistently has some communication challenges. Yeah. Then shortly thereafter came out with the clarification. Did you guys see this? No. Oh, you should look it up. I will. It just happened today. I think they came out with a clarification, again, my words, uh, not, uh, the exact words, but they said, you know, more, the way I read their clarification was, Hey, you heard vice president's. Uh, Harris's answer earlier. What she meant to say was. If Joe Biden runs

Bobby:

strong likelihood

Bento:

that she'll be, she'll be,

Bobby:

oh my God. Why they put that out? Yeah. Sense.

Bento:

Right. I mean, putting out the correction just draws more attention to it than it needs to be in the first place. Right,

Rick:

right. That's another one. It's you might be better off just shutting up just like inflation, if Biden, just like every day he's on the Stu talking about right. Talking about inflation. I mean, you can't help, but think, geez, inflation's a problem, you know? Yeah, exactly. I I'm really, I'm really focusing on it now because I hear about it all day and uh, plus he blames everybody else for it. Maybe, you know, there's some techniques just kind of be quiet, not that the issue's gonna go away, but don't bring attention to it. Right. And the issue about his Biden and running. See if you guys can find it maybe after the show. Oh, check it out. Yeah. Yeah. Yeah. I think I'm right. But, uh, it'd be interesting for you guys to, uh, take a peek at that. Yeah.

Bobby:

Yeah. I definitely will think Trump's gonna run. Trump. I, I don't

Bento:

think so. No. Hmm. I hope so. I, I, I

Rick:

don't think so, but I think he'll certainly, uh, you know, do his best to manipulate

Bento:

things. I think they might try to run Ron DeSantis from Florida. Santas is looking pretty popular. Oh man. That's scary too.

Rick:

He's right.

Bento:

This is, uh, that dude is a whack job. He's not, he's not Trump level, but he's, he's up there. he's certainly part of this new wave of right wing politicians, you know, like from the Trump era. Yeah.

Rick:

Yeah. I mean, I, I, I know my wife is a big fan of, uh, not a big fan, but a relative fan on the Republican side of things of, uh, John K from Ohio, you know?

Bento:

Yeah, yeah, yeah. Yeah. I mean, as far as Republicans go, he wasn't terrible. That's for sure. Yeah. Right. He seems like, he seems like classic Republican, you know, like Bush air of Republican. Yeah.

Rick:

He's kind of, he's probably not gonna embarrass anybody when he gets in office. Yeah. Right.

Bento:

He's not gonna screw you over right away. It'll take, you know, a couple decades

Bobby:

to feel it

Bento:

trickle down. Reagan economics,

Bobby:

you know, But,

Rick:

I mean, we're kind again at this point where you don't see, uh, strong candidates on either side of the fence. Right?

Bento:

Right. God, they say that there's, you know, 700 million people in this country and Hillary and Donald Trump are the two best people we come up with. It's just, that's the problem is like, they're really smart people out there don't want that job because it's, it's a ridiculous job. It really is. And, and I totally get why scientists and philosophers and just really smart people don't want to do the, to do that.

Bobby:

Yeah. I,

Rick:

I think I may have seen a list that had maybe Budha chick on their, uh, pretty high, if Biden does that run, he was above her actually on, yeah. She was like, he was two, maybe

Bobby:

something like that. I could see that he's he, he did well in the, uh, right. He was in the primaries, uh, last time around. Yeah, he did pretty well there.

Bento:

Yeah. He's our, what tra trash station secretary right now. I believe something like that. Yeah. Transportation. Yeah. Yeah. Awesome. Well, Rick, Hey, we appreciate coming on. Appreciate your time. Uh, teaching two dumb dudes about economics and, you know, still scratching your head about a few things, but you definitely cleared up a lot of, you know, a lot of questions that we had, so we appreciate it.

Bobby:

Yeah. Thank you so much, Rick. We really do appreciate it. And, uh, you know, this is, uh, very, very helpful to clear some things up and, uh, you know, help us understand a little bit better, especially about, uh, you know, inflation and, and, you know, kind of why, why things are the way they are right now. Guy, I feel like I could just keep asking you questions for another hour. In that regard,

Rick:

you know, I love what you guys are doing. Great show. I'm happy to come back anytime.

Bento:

Appreciate it. Is there anything, uh, that you wanna, you wanna plug anything you're coming out? Nothing. Nothing. All right. Sounds good. Rick. Next again. Have, have yourself a great night. You bet. Cool. You guys take care care all later.

Bobby:

who the fuck am I? You know what I mean?

Bento:

Fucking Rob Washburn

Bobby:

at home, that might mean something around here, but.