We're back with another edition of the Federalist Radio Hour. I'm Emily Kashinsky,
culture editor here at the Federalist. As always, you can email the show
at radio at the Federalist dot com, follow us on exit fdr LST.
Make sure to subscribe wherever you download your podcasts, and of course to the
premium version of the Federalist dot com as well. Today we are joined by
Vance Gin. He is the president of Gin Economic Consulting. He's also the
host of Let People Prosper That is a podcast. Vance. First thing I'm
going to do is ask you to tell us where people can follow your work
listen to the podcast. That would be fantastic. And also, you know,
if you could tell us a little bit about the work that you did
at the Office of Management and Budget during the Trump administration. I think you
said it was twenty nineteen to twenty twenty, that would be a great place
to start. There is no shortage of news that could use your experience.
That's right, that's right. Well, it's a pleasure with you and I've
I'm a listener of your show, so it's really great to be on.
Yeah, So everybody can find me at Vance scan dot com. That's where
I have my podcast like Pe'll Prosper along with my newsletter at Vance Scan dot
Subside dot com. But go there. It has all the great information bio
and all that fun stuff. Yeah. I was there at the White House
from June twenty nineteen to May of twenty twenty. Not a shortage of things
that was going on at that time. Helped write the President Trump's last budget.
Then there was a whole impeachment hearings that were going on, and then
you know that little thing called COVID hit and then that whole that threw a
whole rich into what we were doing. And so then I decided to bring
my family and two kids at the time we got three now, we came
back to Austin, Texas, and so that's where we're at today. Yeah.
Also, no shortage of news happening in Texas, that's right. Austin
Van tell us a little bit about what you did before going to OMB.
Obviously you've had a full career before you went to OMB. So how did
you end up there? Yeah, that's right. I mean I grew up
in Houston. I went to school at Texas Tech University and my PhD in
economics, taught at sam Houston State University for a couple of years, so
I was in academia. Then I was like, well, I really want
people to read when I'm writing and actually have an influence on things. And
so that got me into public policy, where I started at the Texas Pulit
Policy Foundation. Worked there for about a decade on state budgeting, occupacial licensing
reform, eliminating bad taxes, and that sort of thing. And then that's
when I met Russ vote Whenever. He was the acting director of OMB at
the time, and we talked a lot about the conservative Texas budget that I
had worked on and some of my worked with other state thing tanks across the
country, and he said, well, you know what, we need to
do more of this at the federal level. And so I went up there
and then started working a lot on that. But I had a good opportunity,
you know, in Texas being the largest red state, to see what
can happened with better spending, lower taxes, deregulation. Really what I call
the Texas model. That all this economic growth, and I think that's what
needs to happen across the country and even at the federal level. Yeah,
I was excited to talk to you about something that fascinates me, which is
the reaction to Javier Mile and the reaction to victor Orbon And it's there's the
two sides of what people see as the new right spectrum, and media kind
of freaks out about conservative studying both of them closely. And I think conservatives
have good reason to study both of them closely. But what you're talking about
with Texas sort of reminds me of why I'm very favorable to Milayism taking a
chainsaw to regulation basically, but also you know, protecting things like the right
to life. And I want to ask just your experience in the Trump administration
where you had this infusion of really exciting and new economic nationalism from people like
russ and others, and then also you had your sort of old school Goldman,
you know, Steve Menusan, Gary Cohne. I think Cone was probably
gone before you were an own b But can you talk just about it,
like from behind the scenes of the administration. It's sort of like and I
don't think it is a bad thing. The question of where America should fit
and how America should should kind of answer these tough questions sort of like it
was being worked out in real time. And honestly, this sounds overly optimistic,
but kind of in a helpful way from my perspective. So I'm curious
for your experience. Yeah, no, I love the way you put that
too. I'm a big fan of what Hoavier Malay is doing down in Argentina.
I think we should just be taking a train chainsaw to a lot of
these agencies and departments across the federal government and state governments. So I love
what he's doing there and hope we get more of that at the federal level
and across the states. And someone who comes at it from more of a
classical liberal angle, I'm a free market, free trade guy. That's really
where I do what I focus on and try to promote as much as possible
to let people prosper Throw that in there, and so you saw that within
the Trump administration there were there was a lot of diverse views on what was
going on. When you had Larry Kudlow, for example, who was in
there, that's the NEC National Economic Council Director, Kevin Hassett at Council of
Economic Advisors. You had that those sort of folks who are more free trade
versus maybe you're Peter Navarro's and Robert Leiinheiser's not so free trade. There was
a lot of discussion, and that's what I think the president President Trump really
appreciated was the diverse viewpoints that would come in and he's going to make the
decision at the end of the day, but he wants to hear the background
of what's going on and what's happening, and that was something that I appreciated
very much about the administration. It was an extraordinary time. I wasn't always
happy with the direction of where things were going. I wanted to cut spending
more than what we could what we did, which of course that's Congress at
the end of the day. I wanted more free trade. But at the
same time, there was a lot of other things that go into this discussion
about national security threats, what else should be on the table, what should
we be looking at with China, and so I from my perspective to your
point, I think there's a lot more that we could have cut, and
maybe there would would have cut in the second the second term, and maybe
there will be in a new Trump term. But at the same time,
let's make sure we have a free market direction to go. It's super interesting,
yes, because it sounds like that the plans, whether it's from Heritage
or other groups working with Heritage or other groups independently. Russ actually has talked
a little bit about what a second Trump administration or even another presidential administration from
a Republican could look like. So I have some questions about that too.
But this is reminds me of there's a great case study playing out in the
news right now that balances a lot of the concerns you just brought up,
which is the case of nip and steel and you know, the US steel
Japan trying to buy a steak in it, And it's just it's the most
interesting, I think collision of all of these different variables. And the Wall
Street Journal, their editorial board on economics hasn't really been persuasive to me for
many years, but I actually thought the editorial in this question was a very
interesting one. Advance from your expertise and not my sort of armchair economics.
What is your perspective on the conservative argument for against what's happening with US steel
right now? Yeah, I think you know, one of the things we
will to look at is national security threat, and from my perspective, I
don't see a national security threat from Japan, and so I don't understand why
we would reject this deal with Japan, who is an ally. I mean,
it's not even that they're an adversary, they're an ally. And what's
going on. So when the Biden administration and others are saying, you know
what, we don't want this to happen, I think that's the wrong direction
for the country. I think that there are reasons to consider what's happening with
China and whether or not that's a good idea for certain businesses like TikTok or
by Edance, And there's a whole discussion going on there as well, which
we could talk about. But with this this with with Steele in Japan,
I don't see this as being a big issue. And I'm hopeful that we
can allow as for more competition to be in the marketplace, because what you
don't want to see is that, you know, the joind ventures or mergers
and acquisitions start to be determined by DC and no matter what, and because
if that happens, we reduce the competitive playing field and we lead to more
uncertainty you know, if I if I'm a big business or a business in
general and want to do business with another country, is the government going to
come in and stop me? Based on this? That leads to a lot
of uncertainty in the marketplace, which is one reason why I thought you saw
Nie con Steele their their their stock market value decline dramatically after these the SEMs
have been made, because they're like, what's going to happen? And it
brings up so much uncertainty that I think we need to get out of the
system. And that's why less government should be the answer, not more.
Yeah, the national security question is paramount. It's actually not one that the
Wall Street Journal editorial board address, but that seems to me the question of
reassoring some of these critical industries, whether it's chips or pharmaceuticals, is a
huge priority. How do you think that can be because chips is something that
you For example, that legislation was supported by Marco Rubio and some kind of
national conservatives, who then pulled their support because the bill was still full of
like crony DEI handouts, green energy handouts, and just things that weren't ultimately
helpful. There's some evidence right now that DEI is causing different chips manufacturers to
look to other places, whether it's South Korea, I think, Japan,
other regions where these chips can be manufactured outside the United States because there's so
much red tape to building here just with DEI and green regulations. Do you
have any sort of insight into how some of these industries can be shored up,
no pun intended, but without you know, becoming overly sort of planned
economically. Yeah, it's great points that you made there, and I think
the way to look at it is, for one thing, the DEI has
just went overboard. I mean, whenever you're focus seeing more on DEI sort
of analysis for your firm compared to profitability, which is why this should be
in business to make a profit, then you're going to have problems. And
that's what we've seen. I mean, I think what we're seeing is a
weeding out of the DEI be based on competition in the marketplace, which is
what we what I would want from a free market perspective versus a top down
approach, and instead what we should should hope from policy is to remove government
barriers out of the way. One of those I think across the board would
be to lower the corporate income tax rate. I mean, it's it's it.
It went down from thirty five percent to twenty one percent from the Trump
tax cuts of twenty seventeen, but the average global rate is now going even
lower than that, it's closer to seventeen percent. So already we're doing a
disadvant We're at a disadvantage when we think about the corporate tax rates. Also,
deregulation, I mean one of the things under the Trump administration that I
think was huge with only Trump tax cuts, but also deregulation, and the
Biden administration has come in and increased regulation after regulation after regulation. The American
Action Forum, they put out these numbers that come up with what's the cost
of regulation? Under Obama was around three hundred billion dollars during the first three
years. Under Trump it was about twenty four billion, so much less,
and under the Biden administration it's four hundred plus billion dollars. So yes,
they've been raising taxes, but they're also raising regulations, which makes it more
difficult for businesses to profit. And so what a businesses do when they can't
profit as much? They turn to all these woke nonsense items like DEI.
And I think if we get back to profitability and not lambasting every company who's
making more in profits and saying that's a bad thing, will be in a
much better situation. And is that because if you turn to DEI, you
some people see that in C suites as a marketing opportunity. We saw that
behind the scenes of bud Light, We've seen it behind the scenes of Disney.
But also that you are sort of they shower you in subsidies if you
sprint towards DEI, that's right, and you get included in ESG portfolios that
kind of thing. Yes, yeah, And there's been decisions that are rules
made by the Federal Reserve that you need to have certain ESG standards, And
when you look in the Department of Labor, there's been DEI sort of rules
put in place. So this goes back to the hobby m Mala point that
you made earlier. I mean, we really need to start slashing a lot
of this stuff from these agencies and departments because they're leading us to make these
decisions throughout the marketplace. And just to go back to your Chip's point,
you know, I think that there are critical assets that we want to be
building here or know where they're coming from, that are are going to be
high quality and not have other sort of issues. I think we also got
to be careful though about supporting one business or industries over another. The government
can support certain industries, but the problem is they're always behind the curve.
Government does is not forward looking. It's either at the moment or what's in
the past. It's just like we do these broadband expansions to rural areas.
The bad funding is what they call it. Right out of the was the
Inflation Reduction Act and the Investment and Jobs Act, all these different acts that
they done over the last couple of years. They put all this money into
broadband. And my concern is like, okay, but in these rural areas,
people knew that they were going to have broadband, they were choosing to
go there. Why should we force the marketplace to do that. And by
the way, Elon Musk with Starlink may make all this obsolete very quickly.
Yet now we've spent billions of dollars. And so what we ordinarily see with
any sort of industrial policy is that you create you definitely pick winners and losers.
And we see a huge cost to that over time on the taxpayer.
At a time where we're running two trillion dollars plus deficits, we just don't
We can't afford it anymore. I had a piece out recently where America can't
afford by nomics, and I think this is so true, where it's not
just Bynomics but big government in general. We can't afford this anymore, running
massive deficits, and it starts with reigning and government spending. You've probably noticed
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No, that's so interesting because another question I was going to ask you
is JD. Vance was recently profiled by Political Magazine and they asked him about
the Trump tax cuts, sort of in that context of new right criticisms of
the Trump tax cuts, and I think Jdvan said something like it was helpful
to the economy, but you know, the slashing the highest marginal rate probably
not his top priority. I wanted to ask you what your take is on
how crucial those tax cuts were to the economy under Donald Trump. I mean,
and especially the corporate tax rate, which now the Biden administration has this
outright social studia of a global minimum tax, which has gotten way too little
attention. It is just full blown socialism, of bordering on communism, crazy
stuff. But it really is like their pickety proposal that they've swallowed whole cloth.
So tell us a little bit about how you think that tax cut bill
affected the economy, and maybe a little bit about how you think that another
Republican administration, whether it's Trump or someone else, should approach those issues.
Do you focus on regulation slashing regulation, do you focus on cutting more taxes?
Do you focus on reforming Medicare, social Security? I know that's a
huge question, but just you know, I think that if the past is
prologue going forward, you know what did that do and what can be done
in another Republican administration. Yeah? Great, great question. Maybe where it
start is to say the three big things. Let me start here. Actually,
this excessive spending issue is a biparisan problem. It's been Republicans and Democrats
that have led us to the situation we are today, and it is from
excessive spending. We don't have a revenue problem. We have a spending problem.
And all the evidence and the research that I've done on this shows that
that to be the case. In fact, had we just matched population growth
plus inflation, which is a good measure of the average taxpayer's ability to pay
for government spending over the last twenty years, instead of running up twenty point
two trillion dollars in national debt, and we have only added seven hundred billion.
That would have meant like eighteen point five trillion more dollars in our pocket,
and actually nineteen point five trillion more dollars in our pocket where we wouldn't
have to have higher interest rates and inflation and everything else if he just ran
in government spending. And Biden in his latest budget of seven point three trillion
dollars expects for revenue to come up to about twenty percent of GDP. We've
never seen that before, and we're not going to see that under his budget
because the tax rates are just going to be so high. And so the
three big things that I think any Republican administration should do, and I would
hope any administration, but let's say Republican administration is, for one thing,
we've got to get control of spending. Spending is the problem. Let's cut
spending and then limit it to something some growth rate over time. A good
fiscal rule, I think is really important, and I was able to get
that into the last President Trump's last budget where we mentioned a fiscal rule the
first time since the Graham Redman rules back in the nineteen eighties. So I
think that was huge. But once you limit government spending, number two is
we need to continue to cut taxes. I think the Trump tax cuts should
be made permanent, from the top down to the bottom. All those are
really important because what does those what do those tax rates do if they're too
high or if they're just a there. In general, they're going to disincentivize
you to work. I don't care if it's the lower income, middle income,
or upper income. It's one of the reasons why I'm such such a
big fate in favor of having a flat income tax rate instead of the progressive
marginal income tax race system that we have today, because it is historic's economic
activity. But you also want a lower corporate income tax, and I should
say that my preferred corporate income tax is zero. I don't think that we
should be taxing businesses because businesses only submit taxes, they don't pay taxes.
People pay taxes to the form of higher prices, lower wages, and fewer
jobs available, or share holders just take a hit in the process too.
We all pay for it somehow. So there shouldn't be a double taxational corporations
that we're already paying in the process. And so let's keep bringing that down.
And I love your point too about this global taxes. I mean,
global government is bad just in general. You name it, it's bad.
And so I think a global corporate tax or minimum tax, whatever they want
to call it, is also bad news. You want countries to be able
to compete. I think the best way to compete is to lower that corporate
to zero. But if we're not going to do that, then let them
compete as much as possible. You know, Ireland cut their rate dramatically and
they've seen a huge increase in economic growth because that corporate tax rate has been
so low and it makes it more competitive. And for the United States to
be more competitive, we need to do the same thing. And the third
thing that I would say is part of my one, two and three spending
tax cuts, deregulation is the last one. I think you've got to have
deregulation as part of this because if not, the bureaucratic state will continue to
weaponize against the public unfortunately, and that's where a lot of our money's going
nowadays. Yeah, the corporate tax rate is Again that's why I like Malayism
because it's a much more American you know, not exactly Melayism, but it's
a much closer it's a much closer rendering of American conservatism than urbanism. Not
that there's a problem with thinking about how people should have more children from a
policy perspective, but the American approach to this really is to be the competitive
engine of global economic might. And you know, I'm from Milwaukee area,
and I remember when Johnson Controls was headquartered in Glendale, right out sel Milwaukee.
It's headquartered in Ireland. Now that should tell us something. There's really
no reason for it, so other than the corporate tax rate. You know.
One of the things I'm thinking about as you're talking is so many people
that come from the free trade, staunch free trade and deregulation side of this
are really panicked and depressed about this infusion of economic nationalism and are so bitterly
hostile to people like JD. Vance or even if people like Russ. It's
very personal and divisive, but just listening to you, you seem to be
understanding that these are people coming from reasonable places. It's a reasionable difference of
opinion. Are you panicked over the state of conservative economic ideology or are you
sort of optimistic about all of this being melted into something that's a better final
product. Maybe I hope. I'm hopeful for the latter. I'm an optimistic
economist. Those things don't usually go together, the dismal science, if you
will. But I'm an optimist at the end of the day, and I
think that this is a good time for this discussion to take place, and
for this internal debate, a conversation of differing views to go into. I
should mention that I was a signatory of the freedom Conservative conservatism. Uh,
and so that is kind of where I'm at compared to the net CON.
So I don't consider myself to be a net con or anything like that.
I still send the nat CON one. Okay, there you go. See,
but we can have these discussions. I think it's important to have these
types of discussions when you're when you're going on. So for example, if
you just take free trade, I know that's a big debate that happens between
the two. For example, I was in a lot of those discussions,
and he heard a lot of discussions at the White House about China and understood
where like Peter Navarro was coming from, where he's like death death by China,
where he really believes that they are going to have a consequential threat to
us for the future if we don't do something about them, And I totally
understand that. At the same time, though, while tariffs can go after
them, I would just be you were remissed if I didn't remind us that
we Americans pay those tariffs. Yes, the Chinese may get hurt by it
because they're not going to produce as much, but we're still going to pay
a higher price and costs in the process. My my retort was always that
we should go a different direction. Why not have more free trade with our
allies. If we had more free trade with our allies, then we could
put more pressure on China because just one country, even though we're a large
country, China can just go to other countries, which they've been doing.
I was actually a big fan of the Transpacific Partnership, which some people don't
like, and I got some pushback for that. That's okay, but I
think by expanding trade with these folks, we would put more pressure on China
to change their policies because they'd have to do it with more countries than just
the United States. In addition to that, it goes back to all those
things we just mentioned earlier. Of cutting government spending, cutting taxes, and
cutting regulation. If we have to look at internally what we're doing in America
to raise the cost of doing business, that's sending businesses to other places.
One thing I like to say is that when we're pointing our finger at someone
else, we've got three other fingers that are pointing back at us. So
we need to make sure that we're doing everything that we can from an American
perspective so that we could be as competitive as possible, instead of putting in
a situation where we're having higher taxes as and other things on other countries that
which hurts us in the process. But I do think, but I do
think we didn't need these discussions though, of nat CON's free cons whatever we
want to call ourselves, is that it brings us together to figure out what's
the next steps. Another thing that you know, I'm not as comfortable with
or cautious about is natalist policies. You know, like the recent tax the
child tax credits. I've got three kids. I would love to get that
additional money. However, I think that there are better ways to allow for
parents to do what it's going to be in their best interests. Instead of
government trying to decide or incentivize certain activity to take place. And so I'm
real cautious about those sort of things. Yeah, no, absolutely, And
it's so interesting. And the American Political Science Association asked me to speak on
a panel about net con versus free Con last year, and one of the
points that I wanted to make, and this is where Melayism comes in,
is that I could have signed the free Con statement with I maybe took exception
to one thing or the other. And I know people who signed the free
cont statement who have said I almost could have signed onto the net con statement
too. And not to beat the MELA drum over and over again, but
I feel like that's the model, not orbone. You know, the natalism
stuff is an interesting part of that, but that's the model to me.
This this combination of deregulation, shrinking the federal government, Schedule F stuff,
you know, that's the big the big campaign of Project twenty twenty five from
Heritage and others is to basically slash the size of the federal government, which
the left is now saying is so radical. Yes, yes, yes it
is because we desperately need that radical change. I don't know if you have
any other thoughts on that. But it's been kind of tough, how bitter
that conversation is between so many different factions. You know, the new right
is taken it very personally. The old right is taken it very personally because
it's sort of responding to a condemnation of their life's work in many cases and
accusing them of corruption and all of that. So it's been hard to have
this conversation. I think, yeah, I think so too. I think
some of it goes back to assumptions. As an economist, that's always look
at as the assumptions, and I think, and this is not for everyone,
but some of the free cons might assume, well, hey, look,
we haven't had this libertarian because I think from the free cons is they'll
hear the net cons say, well, maybe we've always been in this reagan
esque view and that we have this libertarian dream world that we're in, whereas
I don't see that as ever happening. In my view, we've still had
too much government. In the Reagan years, we were running massive deficits because
they cut taxes, but they didn't cut government spending. There was still a
problem that was taking place. You know, George W. Bush did the
same thing. You really have to go back to Calvin Coolidge that actually cut
taxes and cut spending. And I think that's more of the model that we
need, going back to Hobby or Malay of looking at this and something else.
You know that I look at a lot is on states. I think
the states should be telling us more of this. I believe strongly in federalism
and what's happened and maybe we probably growth both agree on this is that the
government's got so big at the federal level, which has centralized power to the
federal level way too much. I want to see that decentralize as much as
possible, get that money out to the states, or cut taxes more and
so that way the states and people ultimately have more control over their future than
the federal level. Because the more and more we centralize this, the worse
offware going to be, the larger these agencies are going to be, and
the more money we're going to have to spend in the process. Today's episode
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surf shark dot deals slash federalist. Yeah, no, I could not agree
more. And that's where I want to pivot, maybe to Bidenomics self styled
Bidenomics. The White House sort of goes back and forth and whether or not
they should be even using the brand Bidenomics. Sometimes they think it's their ticket
to reelection and other times they understand that it really isn't their ticket to reelection.
So talk to us a little bit about your assessment of the economy under
the Biden administration. Still have high interest rates, we have you know,
inflation in certain areas of the economy. We have the Paul Kragmans of the
world saying, why is everybody upset about the economy? They're absolutely fine,
Biden is doing so well. Look, the rate of inflation is decreasing,
et cetera, et cetera. Why are the Paul Kragmans wrong? And what
went wrong under Biden? Yeah? You know what's funny too, Emily,
is that whenever they talked a lot about this is all gonna be transitory inflation.
I remember them talking about that soft landing. Yeah, yeah, yeah,
And then now krug Krugman and others that they'll come out with ways to
explain how this was transitory inflation, but it was never going to be transitory
inflation. I was writing about this back and back then. You know,
one of the reasons why I left the White House when I did it was
to go back to Texas where there was a sense of freedom. But also
I was you know, I was pretty frustrated by the lockdowns and everything else
and the amount of spending that was taking place. I was trying to push
it back hard or like on the checks that were sent out, the rebate
checks to everyone, not just those that who really needed it, who didn't
lose their jobs, but that really really created a much more expensive situation that
we were going to be in that had a lot of ramifications down the way.
And I wrote about this a lot after I got out of the White
House. But you know, you started seeing the deficit and debt go up
dramatically under Trump, not necessarily before that twenty seventeen, twenty eighteen, twenty
nineteen, there were still were deficits, and we we were trying to bring
that down. The last budget by the President President Trump found four point six
trillion dollars in savings over a decade. So we were trying to do something
with russ Vote and others. But then COVID came in and that threw all
that out of the water. So then there was the Cares Act, the
Family First Act. There was another act that was passed in December, which
I can't even remember the name now, but there was a lot of money
that was spent, driving up the debt deficit dramatically under the Trump administration,
and then Biden came in and put that on steroids. I mean, you
had the American Recovering Reinvestment Act or sorry ARPA, American Relief what was it.
I don't remember that now, but anyway, it's some convoluted actor.
Yeah, yeah, ARPA is the way that I remembered it now. But
then you had all these other acts that were put in place to continue all
that spending. Whenever the economy was recovering, states were opening back up.
There was no need for it, and so we ran up. If you
put include the Trump administration and the Buid administration, about ten trillion dollars in
debt over the course of three or four years. It's a massive amount of
money and then what happened was the Federal Reserve, our central bank, they
came in and they increased their balance sheet. They bought a lot of that
debt. They increased it from four trillion to nine trillion dollars and now it's
back at seven point five, but it's still about double what it was before.
And I mentioned all that because we do need knowledge that there was a
large amount of debt increase under the Trump administration, and then it was it
was doubled down upon, though in a bad way, under the Biden administration.
And you add in what the Fed did of trending all that money.
Too much money chasing too few goods, you're going to have inflation. And
I figured it was going to be much longer than what many were saying.
It wasn't just supply chain disruptions, as someone would argue. They said that,
you know, it's just a supply chain. Once all these countries open
back up, the supply will come back on and then that will bring down
prices. We didn't see that, though. Even when inflation hit nine percent
in October of twenty twenty two, it's down to a little over three percent.
Depends on what measure you look at but let's say three percent, it's
still double or or it's still about fifty percent higher than the two percent target
rate that the Federal Reserve would like for it to be. So that's already
too high and is three percent on top of the higher prices that we paid
last year. So it's a compounding effect. And just since Biden's taken office,
and I think this was really reflective of bionomics, is excess spending,
trying to raise taxes and overregulating the economy. So you're you're shrinking the supply
of supply, supply of labor and capital in the marketplace so goods and services,
and you're increasing demand. On the other side, you're going to have
higher prices for longer. And is what has happened is average weekly earnings,
which I think is the best measure to look at what people are actually getting
paid across the economy. If you adjust that for inflation, since January of
twenty twenty one, then Biden took office, we're down four point two percent.
So that means that you can't buy four point two percent of what you
bought just three years ago. That's a substantial amount for a lot of people.
And it's why you can hear the polls say are sorry some of these
key economic indicators like an unployment rate being three point nine percent or inflation coming
down to three percent. But then you whole people and Americans are like,
you know what, this is a terrible economy. His you know, Biden's
polling on the economy looks very poor and all these other things, and so
these economic measures are not reflecting how Americans are really feeling. Whereas I think
this real average weekly earnings down four point two percent, it really does that
people are taking multiple jobs. So the Biden administration can come out and say,
look, we're creating two hundred plus thousand jobs this month and non farm
jobs, but you look at the household sector. Emily, I'm just going
on a little bit longer on this, but I think it's important is that
on the household sector, there's been declines in employment for four of the last
five months. So things are not going well for people. And that's because
they have multiple jobs and the people who want a job can't find them right
now. And that's a tough situation for many Americans. And I think it's
a direct result of bionomics. No it was a really helpful and interesting answer.
It reminded me actually of Axios and other corporate media outlets celebrating how women
have returned and higher numbers to the workforce, which we know that the majority
of working mothers would prefer to work part time, which just tells me,
you know, there's a great likelihood that women are being forced back into the
workplace in ways that we shouldn't be celebrating because they don't want to be there.
They're struggling to make ends meet. Basically, yeah, yeah, and
you know, how do you overcome this? I mean, I think it's
going to take a while. The Federal Reserve is expected to cut rates three
times this year. My guess is that's the most that they'll be able to
do, probably closer to two times, because inflation is going to remain higher
than an otherwise would because of their balance sheet. It all goes together.
I mean, you know, economics can be pretty difficult because of all the
things that are out there, but I think a lot of it just takes
common sense. Common sense economics is really what it's about. When you think
about the government being too involved, too much money being created, and you're
overregulated and overtaxed. What's going to happen higher inflation and less economic output than
you otherwise would have. So what do you do instead, Well, you
cut taxes, you cut regulars, you cut the money supply. That breeds
more pro growth policy. So my view, you know, Emily, is
that we don't need to hand out and pick winners and losers. We need
government to shrink and so that way everyone has an opportunity to do more of
what they please. And I think that's more of the freedom approach, maybe
the Malayian approach as you put it. That's out there, and there are
these debates that I hope will continue, like bringing on the net cons versus
the free cons. But how do we get to the most prosperous place possible?
In my view, let peele prosper which you know, I could go
back into my story where I was a drummer in the band in my late
teens and I used to play drums. I still play drums actually, but
I got in a really bad car accident where we rolled six times. We
were going one hundred and twenty miles an hour, and I was twenty,
and we were young and stupid, but got life lighted into Herman Hospital in
Houston, Texas and had about a month to think about like where my life
was heading and everything, because it wasn't in a good direction. And I
really felt kind of this calling of let puel prosper. And I can't explain
it a lot other than God and my faith. And that's what got me
on this track of being a first generation college graduate. That someone got a
PC economics, worked at a top think tank in the country, and then
got to work in the White House as someone who also went to homeschool from
seventh grade through twelfth grade. To work in the White House was remarkable.
And so when you piece all these things together, I think we make it
too complicated sometimes and it should be about letting people prosper. Yeah, that's
amazing. I love that. I don't know if you can see the cahen
behind me. I think it's covered by a chair, but I think it
is. I see the guitar though. Drumming is awesome. But on that
note, actually, one thing I wanted to ask you about was anti trust
because obviously Lena Khan is there and there's actually disagreement within you know, Senate
Republicans on the benefits of Lena Kon between at Josh Holly and a Tight Cruz
and a lot of different people, But without focusing too much on Lena Kahan,
I'm just curious what your perspective is on whether competition has been stuff fold
by, for example, the Obama administration's sort of passive approach to mergers.
When I look at some of these industries, like when I look at meat
packing, ranching, and you know, social media, what happened to Parlor
in the app store as a competitor to Twitter. What role do you think
our approach to M and A has had in the economy, maybe in adding
to some of the problems. Are we in an anti competitive environment? Do
you think we should go more towards maybe like borghism and understand that monopolies can
bring consumers benefits or consumer welfare to use the phrase. What's your take on
that? Yeah, a great question. I wrote a piece recently talking about
Biden's anti trust policy is one of the biggest threats to capitalism that we have
because in capitalism, pre market capitalism, you have a situation where there's a
lot of competition, and in situation, as long as things are left pretty
free, you're going to allow for competition or the threat of competition to keep
you from raising your prices too high or having low qualities, and so the
marketplace can work its way out. The problem, in my view is whenever
you have too much government that gets in the way, and then that creates
a situation where you can have too much power. You know, you look
at different Heirshman the Herfman index of looking at too much concentration of power,
that's the word. I was looking for a concentration of power in a marketplace
that can create this monopoly sort of issues. But I think there's something very
powerful with the consumer welfare standard. I think that it's a more objective metric
than a lot of those that are being thrown around out there today from Lena
Khan and either the Department of Justice. What we see is a lot of
subjective determination that they just don't like these companies, they don't like what they're
doing, or if they're having environmental concerns or DEI or something else. It
seems like they want to go after them for that compared with are they providing
value to the consumers. And when you look at competition, one way that
monopolies quote unquote monopolies can form is because that's what consumers want, and I
don't think that's a bad thing if that's what the consumers want. At the
end of the day, consumers have a lot of sovereignty that we don't give
them enough credit for. Consumers can choose not to buy something, they can
choose to go somewhere else or things of that nature. And so from that
perspective, I would really let the marketplace work then coming in to try to
break up these companies or deal with mergers and acquisitions. Just recently, there
was talk by Governor greg Aabbott here in Texas of you know, there's some
reports that forty four percent of new houses are being purchased by companies by investors,
and so there was a concern that he's like, maybe we need to
tackle this next session to make sure that companies can't go in and buy all
the supply and then that raises the prices for individuals. However, the reality
is is that that's not the case. That it's all when I've read about
two percent of the marketplace is being purchased by investors, and so there's this
push for action that's more from an emotional perspective to see what's best from a
populist perspective really of what's going on in the marketplace versus what's actually happening in
the market. In this particular case, you need investors to be able to
buy some homes because otherwise they may not be able to sell their home,
and then they can take that money and go buy a home somewhere else.
So it's adds liquidity into the marketplace when you think about what's happening with some
of these other murders and acquisitions. I would hope that we would allow for
the market for consumers to decide what's going to be the best way forward instead
of the government getting involved. And this is another area where from my view
that I think you have progressives on the left and some on the right who
are coming kind of coalescing together that they're both concerned about the antitrust issues that
are out there. I'm more concerned how to make sure that the marketplace works
and don't have government picking winners and losers in the process, because I think
that will lead to a worse outcome down the road. So with antitrust,
I would focus on the consumer welfare standard and allowing for as much competition as
possible instead of government getting in the way. Where have all the Friday jobs
reports gone? The Watchdout on Wall Street podcast with Chris Markowski. Every day
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Check out the watchdot on Wall Street podcast with Chris Markowski on Apple,
Spotify, or wherever you get your podcast. You know what, I am
sure that our free con listeners we're so happy to have this perspective under ship,
I should say, remaining freeconstens I tend to we tend to swing in
the that con direction. So no, that's it's it's helpful perspective. And
again, I think, you know, these conversations have gotten so understandably personal.
I was going to say overly personal. But in some cases it's perfectly
understandable that these conversations have gotten personal. But Yeah, it's so helpful to
have constructive sort of sharing of perspective on this issue. Uh, is there
anything else you think about the Biden economy people should be aware of, or
anything about, you know, the conservative approach that we haven't talked about you
want to make sure you cover. Yeah, I think with you know,
with the Biden economy, I'm you know, I'm I'm hopeful that they won't
do much this year. It's an election year. Maybe we'll wait until next
year. It seems like with the gridlock going on in Congress that could be
a good thing. There's discussions about the continued resolution and whether or not we're
going to have a shutdown here. Pretty my guess is they're just picking down
the road a little longer. That's what Congress has been good about doing with
these budgets. But we're not seeing anything else from the Biden administration that makes
me hopeful of pro growth policy. I mean, it's one thing after another
that's trying to grow government and therefore reduce our liberty and our freedom to do
what we want to do. And I think that's why so many people are
frustrated about this economy. Even though some of those headline numbers can look good
on paper, they're not feeling it at home. Whereas if you compare it
to twenty nineteen before the pandemic and the lockdowns and everything else, I think
most people felt like this was a good economy, and it was all the
papers and everything else that was going on, the headlines really matched. I
think what Americans were feeling, and we're not feeling that today. We need
a new direction that's going on, and you know, and for the conservative
free market movement, I'm hopeful that we can have more of a focus on
government spending to make sure that it's cut and that we have too much spending.
I mean, Biden's latest budget is seven point three trillion dollars. Whenever
I left the White House it was four point six trillion dollars, so we
almost doubled it it just in four years. So, yes, there was
a lot of spending hearing COVID and all this that some of that's going to
dry up, but that was emergency spending above the baseline budget. We're just
talking about baseline budget seven point three trillion dollars. This is this is ridiculous,
and so those of us who are really focused on the budget need to
come in and say where are we going to start making these cuts? And
I think everything should be on the on the table. Because servers have been
scared about touching social Security and Medicare and national defense, I think those are
going to have to be on the table. I mean, within the next
decade of social Security and medicare are going to be basically insolvent unless we have
massive cuts to benefits that are going to be paid out or higher tax than
something else. I don't think that we want to do that to the economy.
And the only way to overcome deficits and debt is to focus on reducing
government spending. If you raise taxes, it's not going to work. It's
one of the reason why I'm concerned about this new Fiscal Commission is that they'll
focus a lot on raising taxes or raising taxes slows economic growth, it doesn't
raise revenue, and that will make it put us in a worse situation as
we move forward. There's a lot of good research out there by Alberto Alosina,
John Taylor, Casey Mulligan. There's just a lot of work that's out
there that shows that that's not the path to allowing us to be more fiscally
sound over time. And so I think by doing so, looking at the
future, finding ways to overcome big government and allow for competition, allow for
lower government spending, lower taxes, and less regulation, we could be in
a much better situation. And federalism. Don't make sure to plug that in
there. Make sure we have federalism where states are doing more of this and
less of the federal level, and then we'll have more ways to let people
prosper. Yeah. I mean, there was such an interesting, I think
clarification during conversations about COVID vaccines where you had some people who had previously been
associated with the New Right, like Adrian Vermuil fully in favor of vaccine mandates,
and just about everybody else in the New all Right was animated against vaccine
mandates. And that basically tells you everything you need to know about where the
heart and soul of American conservatism is and where we can find common ground deregulation,
federalism, cutting spending. Either there has to be a conversation obviously about
entitlement reform, otherwise you know we're going to continue to run up theat no
matter what. So this has just been a wonderful conversation. Van Skin It's
Vanskin dot substock dot com. Right, yes, that's where you find me.
Also at vance gain dot com. Make it easy, but the newsletters
at vance Gain dot subsdid dot com and my podcast Let Feel Prosper is on
all the major outlets that are out there. Wherever you get your favorite platform,
go to that one and so a lot of good stuff there as well.
Let People Prosper. All right, Vance, thank you so much for
joining us. Thank you, of course you've been listening to another edition of
the Federalist Radio Hour. I'm Emily Trehenski, culture Editor. You're at the
frost Billy back sooner till then be lovers of freedom and anxious for the frame.
Then you were the only love