Speaker 1: Well, here we are.
Speaker 2: Hi.
Speaker 1: How are you welcome to the Big Podcast. It is
Monday today. It's the fourth day of August, year of
Our Lord twenty twenty five. My name is Tom Sullivan.
So well, we'll pick up where we left off. On Friday,
as we were peeling out for the weekend, we find
out that Donald Trump had fired the head statistician for
the Bureau of Labor Statistics. A jobs report came out
on Friday, and it was a shocker. It was estimated
to be one hundred thousand jobs creator, which was very weak,
much lower. You were more north of two hundred thousand.
So they said, no, it'll be about one hundred thousand.
It came in seventy three thousand. That number, I think
is going to be revised. But the shaker was the
two previous months May and June. They revised those two
months down two hundred and sixty thousand jobs. I mean
June was originally one hundred and forty seven thousand, they
told us. Then they totals on Friday. No, no, no, no,
it's only fourteen thousand jobs. And the private sector was
revised from a seventy four thousand down to three thousand
and you look at this and you go, these numbers
are not anywhere near what they reported. And then they
do these revisions and it's not a little revision or
not even a medium revision. These numbers are huge, way
off from where they are. And I got an email
a couple of weeks ago from a listener that was
asking about the politics of the FED, and this is
kind of in the same category of Bureau of Labor
Statistics is an independent organization now as part of the
Department of Labor. Department of Labor is part of the
executive branch. The FED is a totally independent group. But
it's the idea that these these are are I've talked
for years about the fact I've talked to some of
these people at the Bureau of Labor Statistics Statistics and
they are number nerds, I mean huge number nerds. They
barely speak English, they're so hard to understand sometimes and
so they are off in their own little world. But
this what they produce, not only jobs reports, but also
GDP Gross Domestic Product CPI consumer price inding. These are
these are reports that so many people depend upon. Economists
depend upon it, but so do business people, so do
so many people want to know what is going on
with our economy, and if they're given as bad information,
how why So I've got to tell you. Well, let
me first of all, this is President Trump over the
weekend and he was out on at the airport in
New Jersey and was asked about the firing of this statistician.
Speaker 3: Announcing a new statistician sometime over the next three four days.
Speaker 4: We had no confidence. I mean, the numbers were ridiculous.
Speaker 3: Just before the election, this woman came out with these
phenomenal numbers on Biden's economy, phenomenal numbers, and then right
after the election they announced that those numbers were wrong.
And that's what they did the other day.
Speaker 4: So it's a scam in my opinion.
Speaker 1: I don't know if it's a scam or if it's
just incompetence, but it's got to be one of the two.
Either they don't know what they're doing or they're playing
some sort of game, and either way it's absolutely unacceptable.
So the person who's been put in to kind of
run the shop until they come up with a new
person is a guy by the name of William Wyatt Trowski.
He's a longtime employee of the agency widely respected by
experts inside and outside of government. The career employees who
collect and analyze the data will remain in place. They
will continue to use the same methods and procedures that
they used before. So I good luck on finding somebody.
Could you imagine if the President called and said, hey,
we'd like to offer you the job of being the
head of the Gureau of Labor Statistics. No, thank you, sir,
I'm serious, because if they're using old methods, then they're
still going to come up with bad information. I mean,
it's the old thing about the definition of insanity if
you keep doing the same thing and expect a different result,
and they're planning on doing the same thing. What they do,
they've got they've got an outside survey that they do,
uh and one using employment information that's sent in digitally,
but the outside it's called the entire Establishment Survey. They
are not getting the response they used to get back
in twenty fifteen, twenty seventeen, twenty nineteen, they were getting
about a sixty to sixty five percent response when they
did their establishment survey. They literally were surveying sixty thousand
businesses and people and they got a good response but
then they started getting I'm busy, I don't have time,
or they would say I'm not going to take that survey,
and I'm not sure what it is. I don't know
about you, but I was complaining the other day to
a friend of mine. I said, every time you do anything,
you buy a product, or you have a conversation with
somebody on some chat window, immediately you get a survey
from the company going how was the agent, how did
they treat you, how would they show you respect? Did
they know what they were doing? And I don't have
time for this. I don't take any of those surveys anymore.
So maybe that's what these people are doing. They're getting
We've been over surveyed in this country to the point
where I'm done. And so instead of getting sixty to
sixty five percent back in twenty fifteen through twenty twenty,
it's dropped like a rock and it has been dropping
and we're now down to somewhere in the forty percent range.
So it's a much smaller survey about employment than before,
And so are they getting insufficient data to be able
to make the report about employment? But these they're not
even close. That's the problem. So I do not blame
Donald Trump for firing this person. I would have too
if they keep doing a bad job and the numbers
are not even last fall they had. They have an
annual revision that they do basically to tidy up the numbers.
Last year, the twenty twenty four revision, they said, oops,
we told you there were eight hundred and eighteen thousand
more jobs than really created. We were off by eight
hundred and eighteen thousand, and the last two months they're
off by two hundred and sixty thousand. So the problem
is the way that Donald Trump operates. He doesn't fool around,
and the media doesn't like him, and they're blaming this
on he didn't like the numbers, therefore he fired the lady.
I don't think so. I'm sure he didn't care for
the numbers. He's worried about the economy slowing. Labor markets
supposedly has been solid, but with this kind of information
coming out, you go, well, maybe it's not so solid.
So it will impact Wall Street investments, a variety of places.
But I don't blame him for firing the person. I mean,
this is incompetent. I think maybe maybe is political, but
I think it's I think it's the woman who ran
this division should have known. Wow, these numbers are way off.
We got to get this fixed, but never did a thing,
never corrected us, saying Muhammad al Arian, well respected economist
on Wall Street. He chimed in as well, let's see
what Mohammad has to say.
Speaker 5: Yeah, this shouldn't be a political move. This is an
apolitical institution. It is true that it's had persistent problem
on data collection. The response rate has come down, there
hasn't been much in corporation of the higher frequency data
that was so valuable to everybody during the pandemic. And
then clearly there's a problem of methodology. The estimation until
you get more data seems to be off. So there
are problems on the data collection and the data estimation,
But you should not undermine the institutional integrity of the BLS.
It's being interpreted signal as I don't like what you've
released in terms of data, and therefore I'm going to
fire you.
Speaker 2: Now.
Speaker 5: Kevin has it said yesterday that the president wants someone
that he can trust there, and other people have noted
that it's actually very difficult for the head of the
institution to change the way the data is compiled because
so many people are involved, so you wonder how much
is gained and you worry about what it does to
institutional integrity. So the bottom up data that you and
I look at, those numbers are particularly valuable at turning points.
If you remember go back to twenty twenty one, the
companies were all saying, we are seeing higher costs and
we have pricing power, but the top down data wasn't
picking up the infationary impulse until it was too late. Similarly,
now the bottom up data has been signaling weakness, not recession,
but in economy that's weekning. We've seen that in terms
of pricing power for those who sell to lower income household.
We've seen it. In terms of net income growth away
from the top ten, it has struggled. We've seen what
has happened to employment in the public sector. So for
those of us who look at micro indicators, they were
flashing yellow, but the big data wasn't flashing yellow until
we've got these massive revisions. And these are massive revisions.
We're down to job creation that we haven't seen for
four years in terms of three month moving averages. So
I think the macro data is finally catching up with
the micro data, which is now of course making everybody
change their mind about what the Fed should have done.
Last week.
Speaker 1: Yeah, so there was a massive revision in one particular month. Fine,
but this has been ongoing for quite some time and
it's still it's getting worse. So again I support the President.
Glad he got rid of this person who. I don't
know if they could be able to changeange anything quickly,
but boy do they need to get up to speed
with some modern methods of establishing getting the information the
data that they need in order to call out the
jobs report for us every month. So we've got that.
The other big story today is in Austin, Texas, the
state capitol, where fifty Democrats have taken off. I know
that the report this morning was that they went to Illinois.
There was a plane. I don't know, they chartered a
fight or something and went up to Illinois. But there's
some in New York today with Kathy Hochele, the governor
of New York. This happened a few years back. They
did the same thing. They took off and they went
to Washington, d C. And well, no, they were gone
for I forget how long it was. I believe it
was over a month and they came back. It was
over a voting bill, and that voting bill was still
able to go through the way the Republicans wanted it to.
So Texas is a very red state, very Republican, not
all of it. In fact, the city of Austin, the
state capital, is very liberal part of the state of Texas.
But they wanted to do this, and it's just wrong
on so many levels. Listen to this guy. This is
Jean wu He's the chair of the Democrats in the
state capital of Texas, and he talks about how the
Republicans are playing games, and I'm going does he not
understand that he and his fellow Democrats are playing a
huge game? Apparently not.
Speaker 6: It's not a choice that we take lightly to be
here in Chicago. We really didn't have a choice. We
tried to negotiate Republicans, We tried to talk to them,
We try to reason with them, We try to tell
them that the public is very angry at what they're doing,
and they simply wouldn't listen. This was the only way
we could protect our constituents and protect the state. What
they're doing is not just politics. It's not just affecting lines.
This is going to destroy lives first of all, and say,
you know what, today is a great day to end
the corruption of Greg Abbott. This has gone on far
too long. Public has been enraged about this. How politicians
continue to tell the public pretty words but never actually
do what they say they would do. This is Governor
Abbott being upset about that because he's been caught doing
exactly that. And your Governor Abbot, frankly, he doesn't know
how to read attorney general's opinions because he used to
be attorney general. And frankly, Democrats say, come and take it.
Speaker 1: Okay, this guy's not making any sense that he's the
top Democrat. But still he's talking about Greg Abbott being
Greg Abbott. I've met the governor, talked to him many
many times. He's a brilliant man. He's done a great
job for Texas. Texas is where people are going. He's
recruited so many jobs, so many businesses. He's done a
fabulous job. And this guy is saying that he's corrupt. Now,
I'll tell you I'm not real big fan of the
lieutenant governor, especially their attorney general. I think he's another story.
But Greg Abbott, I think, is an honorable, smart, good
governor of the state of Texas, and now he wants
to make it so that Texas is more red than
it is right now. He wants to make it so
that there are areas that will be more Republican than
they are right now. They're trying to do the same
thing in California. There's some other states. Even Kathy Hokle today,
the governor of New York, was talking about, Okay, we'll
do it too well, rewrite New York to be more blue.
You can't get more blue than New York is right now.
And the same with California. You can't get it more blue.
But that's kind of what Texas is. It's not going
to make a big difference, but it will. It will
be anywhere from two to five more seats that will
wind up in Congress that will be on the Republican
side of the aisle. With everything being so close in Congress,
it will make a big difference. But the other states,
I'm not sure it's going to make a big difference.
And they ran off to Illinois, some here to New
York that Illinois is a blue blue, blue, blue, blue, state.
So he's not very articulate. Let me this, Jeen Wu.
He just seems to throw out things that are talking points.
I don't know. Maybe he needs some help with his
public speaking. So then mister Woo was asked about the
fact that the governor is going to have they don't
show up, which they did not at the three o'clock
session of the House of Representatives in Texas, that he
was going to have them removed as members of the House.
I don't know if he can do that or not.
He thinks he can. He quoted some Attorney general opinion.
But the other thing he's going to do is he's
going to find them. And this is in Texas state
law five hundred dollars a day. This is Jane Woo's response.
Speaker 6: Frankly, I don't care, and our members don't care, because
what we're fighting for is not about us. It's not
about our pain and our suffering. We are elected officials.
We have volunteered for this. We have committed to sacrificing
our lives to protect the people of the state of Texas,
and that is exactly what we do. The the five
hundred dollars whatever they're going to find us and that
is nothing compared to the pain that American people have felt,
and the people have tad Texas have.
Speaker 1: Felt, no brother, but spare me the grief. This again,
they tried this, I think it was four years ago,
and this goes back to the again the definition of insanity.
They're trying to do exactly the same thing and it
did not work four years ago, and they're expecting a
different outcome this time. Here's New York Governor Kathy Hochele.
She's going, oh yeah, this sounds great.
Speaker 7: This This is not breaking the law. This is a
legitimate process that has been used before by breaking form
and being here today, these legislators are getting into it.
John Lewis might call good trouble. Good trouble is the
best kind of trouble. They've drawn racist lines to disenfranchise
millions of Texas.
Speaker 1: They're drawing racist lines. Well, let's hear what Governor Abbott
has to say.
Speaker 4: So they they're leaving, and they've left because they're very untexaned.
Texans don't run from a fight. And there's a fight
going on in the legislature right now about redistionering as
well as other things. But I'll make two quick points
about this. For one to run to statesite New York
and Illinois to protest redistricting is kind of like running
to Wisconsin to protest cheese. It's just kind of outrageous.
Those are New York and Illinois to hallmark states. They've
already done redistricting to eliminate Republicans. But the second thing
is far more serious, and that is what these Democrats
have done. Just a small fraction of them were needed
to break a quorum, and that small fraction is holding
hostage legislation in the state of Texas where we will
be able to provide assistance and reform for all of
the victims of that horrific flooding that we've had in
the state of Texas. Our fellow Texans are being let
down and not getting the flood relief they need because
these Democrats have absconded from the responsibility, and I believe
they have forfeited their seats in the state legislature because
they're not doing the job they were elected to do.
Speaker 1: So it's a political cat fight, and the Democrats don't
want Texas to be more red than it already is.
And it's the same in California, Illinois, New York, they're
already just thoroughly blue. The problem with all this is
if take a look at California, It's been run by
the Democrats, their Assembly, their Senate, their governorship of all
Democrats all the time. And since that has happened, the
state of Californias has just gone straight downhill in so
many ways that we could spend hours talking about. They
really have ruined the state of California. The state of
New York, it's the same. The Democrats have done a
terrible job. But it's not so much about Democrats. That
is one party rule. And so as much as I
appreciate that Texas wants to do what they want to do,
I don't like the idea of turning a state into
just one controlling party and the other part already has
no voice. You may not like what the other party
has to say, but I think it's important in managing
the affairs of a state, because the ones that have
gone full one party have done a terrible job. You
got to hand Texas. I mean, you don't need to
be a political scientist to know that Texas is the
place where the populations are moving to Texas, not out
of Texas. Or moving out of New York, out of Illinois,
out of California. Texas has had a net in popular
population for quite some time. And again there's more fortune.
One hundred companies now headquartered in Texas. That used to
be the banner that they held over New York not anymore.
So Texas is doing a good job. But I still
prefer to have some balance in the people that are
governing our local political establishment. So let's move on to tariffs,
because that news isn't going to go away. The tariffs
are the August one tariffs are supposed to take effect
on Thursday, the seventh. And the thing that nobody's really
talking about, but it's bubbling below the surface, is that
there is a lawsuit that has been brought by some
business small businesses and some states to go after the
idea that Donald Trump doesn't have the authority to do
tariffs under the Constitution. It says that Congress is the
one who has the taxing and tariff authority, but actually
under the executive authority, there's all kinds of ways that
the President can lay down tariffs. But in the meantime,
this case is going on. This is a guy by
the name of Victor Schwartz and his lawyer talking about
the lawsuits that they have brought forward and we'll find
out if they're successful. If so, it would really throw
all of this tariff hullabaloo into total chaos. Here's the
plaintiff and his lawyer.
Speaker 8: Well, they're very impactful, obviously, and you're having with the
ten percent power for a fifty percent tariff. The numbers
are big for us. Of course, the uncertainty is a
major issue, and now we're moving from a uncertain and
chaotic policy to an onerous policy, and the onerous quality
is going to be on our cash flow. Very simply,
we have to come up with all of this additional
capital to pay for these tariffs, which we have to
pay upfront at the port. And your business is wine,
flying spirits, sakes, and alcohol free so things that all
will be affected, including some wines, everything from many countries
in the world. There's though avoiding at this time, very
different from the first time.
Speaker 6: And there are a lot of business owners like you
who might be frustrated with the tariffs. Some do support them,
but bottom line, everyone is having to figure out how
to deal with them.
Speaker 9: That's correct.
Speaker 8: Well, it was kind of a meeting of minds. I
was introduced to the Liberty Justice Center through Elia Soman,
and I got in touch with him really just to
tell him about what was going on in our particular industry,
in the wine and spirits industry, because we have been
talking about it since last summer. Elias suggested that I
get in touch with Jeff Schwab, who's with us today,
and Jeff said, why don't you join our case? And
then he asked me to be lead plaintiff, which was
flat okay, a lot of pressure. That was a little different.
I'm going to show up here with talk to you.
Speaker 1: Well.
Speaker 9: We have many theories, actually, the first of which is
that the statute that the president uses, which is referred
to as AIPA, doesn't actually allow tariffs, and no president
has ever used it for teriffs. It is an emergency action, sure,
that allows the president to take other actions, but it
doesn't say anything about tariffs. So that's our first argument.
But even if it does, there are other mechanisms. There
has to be an emergency, it has to be unusual
and extraordinary. And then even under what the president is saying,
even if if you accept all that is true, that
power that the President is claiming would create a constitutional
problem because Congress, not the president, has the ultimate authority
to impose tariffs.
Speaker 8: First of all, I want to say, after seeing what
happened after our victory in the Court of International Trade,
the outpouring that's come to me from across the political
spectrum has been amazing. And what is apparent to me
is that this is first a bipartisan effort, has nothing
to do with politics and has to do with business owners.
So if the administration needs to go through Congress as
they're supposed to do, as our constitution says they should
do and must do, then the Congress is going to
have to answer to their constituents across the country, and
that's going to be a problem for them.
Speaker 1: I know the President gets sued a lot, but this
one's different. This is small business owners and some states.
But the small business owners may make some traction here,
and if they do, that just puts one more delay
question mark over the whole business about the terriffs and
how much it's going to cost to do business. It's
just one more confusing point regarding economic policy in this country.
Now to the latest on Russia. Apparently Steve Whitkoff is
going to have a meeting on Wednesday, maybe with Vladimir Putin.
We can't confirm it, but the Russians say that the
meeting is set up, but Wickkoff is not confirming that
he's going. But we're expecting he will be there in
Moscow on Wednesday to meet with Vladimir Putin. The problem
with Putin is right now, he's telling everybody that he
sees progress from the Russian side. The Russians are making
progress in Ukraine, and so he doesn't he's not in
the mood for a cease fire talk. But who do
we talk to whenever we bring these subjects up? Of course,
here's General Jack King Well.
Speaker 2: Putin in this case Memdev, who's his deputy chairman of
his Security Council. He was a stand in president for
him during two thousand and eight to twenty twelve, and
he uses him kind of as a as a spokesperson
to express his views. And what Memdev did here to
precipitate the president's actions once again brandeds the threat of
nuclear weapons use and believe me, this is a part
of their instrument of national power. They use psychological warfare,
is how I would describe it, and they were quite
successful in the Biden administration because as a result of
threatening the use of tactical nuclear weapons, Biden restricted the
use of our weapons. He held them back, long range missiles, tanks,
F sixteens, to name a few. The Europeans were onto it,
and they realized that this was a bluff and we
should stop submitting to that bluff and changing our behavior,
and they forced the Biden administration to provide those items.
I just suggested the Europeans that is because they were
in a sense calling the Russians bluff. The President has
heard this and he wants them to know unequivocally that
he's in charge here. He's not going to submit to
this kind of intimidation and coercion and psychological warfare. And
that is a message he is sending by announcing the
deployment of two nuclear powered submarines. By the way, all
of our submarines are nuclear powered. Fourteen of them carry
nuclear ballistic missiles as part of our strategic triad arsenal. So, yes,
this is much It's about messaging more than anything else else,
and it's by the president. I am not going to
submit to this kind of intimidation. Yeah, well, certainly he's
always been able to work around sanctions. He's not all
that intimidated about him. But the combination of tariffs and sanctions,
and the kind of sanctions we're talking about here is
really going after the major buyers of Russian oil that
we know for a fact that Russia is the one
commodity economy oil and gas. And you go after China,
India and Venezuela, Brazil, other countries that are purchasing this oil,
it will definitely have some impact. It won't have an
immediate impact, but it will have impact.
Speaker 1: Then.
Speaker 2: Their economy is already struggling with very high inflation devaluation
of the ruble. The Russian people, though overwhelmingly the majority
of them, still support this war despite forty one months,
and it has to do with how Putin characterizes it.
He's talking about the United State in the West encroaching
on Russia, wanting to deny Russia their sovereignty and their
ability to exist as a nation. That's how he portrays
this war on state television day in and day out,
day in and day out, and he avoids getting conscripts
or new recruits from the western part of Russia. He
gets from some central and eastern Russia, and if there
is a death as a result of one of these
soldiers being killed, they pay them the equivalent of one
hundred and fifty thousand dollars, which is really quite stunning
giving the Russian economy. So the people are still supporting.
Putin knows that, and the reality is here, these sanctions
will take its toll on the people and the economy
once they're enforced.
Speaker 1: The other problem about all of this is India talked
before about the Prime Minister Modi and the fact that
he plays both sides. He plays Russia up, he plays
us up. He wants to be friends with everybody. Well,
Donald Trump is saying, if you keep buying the oil
from Russia, we're going to slap huge sanctions on you,
and Mody said, go ahead, We're going to keep buying
the oil from Russia because we get it really cheap.
So they're going to have to work out. President Trump's
gonna have to work out something with President Mody or
we're going to be in basically loggerheads with that country.
And then, just in some miscellaneous news crossing the wires today,
this Sydney Sweeney thing is getting hilarious. Even President Trump
was asked about it today with the American Eagle ad
that she did for her genes, and he says, as
long as she's a registered Republican, he thinks it's great.
There was a lady, I don't know what left organization,
but she was a lefty and she was literally all
wound up about this and saying that this is essentially
what the Nazis did. And you know, if you don't
know what to say, just put out the Nazi banner
and throw that around the head of Jaguar. The CEO
of Jaguar, he has resigned. He has quit. This is
the guy who came up with the ad for Jaguars
that did not have any automobiles in it. It just
had people kind of dancing around with various colors changing.
It's weird. It was supposedly woke. I don't even know
what it was. It was just weird. How can you
have a car commercial without putting a car in the
car commercial? So anyway, that guy's gone. You know, you
try things, it doesn't work your toast. That's what happened
at Jaguar. Lonnie Anderson died yesterday at her home seventy
nine years old. Lonnie Anderson was a receptionist for WKRP
in Cincinnati, and I just love that show. It was
everybody on that show. There was somebody at every radio
station that is exactly like that. The receptionist, big blonde,
the head of sales, a herb, kind of a goofy guy,
the general manager. It was a great show, absolutely a
great show. So Lonnie Anderson passed away. Nancy Mace, the
congresswoman from South Carolina, she has thrown her hat into
the ring. She's running for governor. And Boeing just cannot
catch a break. Their division that makes fighter jets. The
people that worked there, three two hundred of them in
that division, they have gone on strike. So Boeing keeps
getting the short straw on all these deals. Wall Street
today it was turned around from Friday. We went down
five hundred points on Friday. We went up five hundred
points today a five hundred and eighty five forty four
one seventy three. So much for the distorted employment reports.
SMP up ninety one, Nasdaq up four hundred three, price
of gold up twenty nine dollars to thirty four to
twenty eight, and the price of oil, fella buck, it's
at sixty six dollars for one barrel of oil. Thank
you for coming by today. We are going to try
this the end tomorrow, and we hope to see you
then