He's editor in chief of breit Bart News and a New York Times best selling author, and on this podcast he brings deep research, prescient analysis at world class guests. He's Alex Marlow and this is the Alex Marlow Show.
All right, Newsy show for you today. With two guests.
We got Carla Sands, the former ambassador to Denmark, very smart lady. We talked mostly about the Iran War. It's got a ton of background foreign policy, national security, and we tried to find what victory will actually look like for President Trump. And we also get into some things like Visa's visa abuses of where she's putting a lot of her effort and resources into investigating that, which is important.
Then we speak to John Carney, my partner in crime in the Bright Bar Business Digest, and I think the most knowledgeable person on macca, maga economics, maganomics, if you will, in the world, perhaps second to Scott Bessant, but I think they're right there, neck and neck. And I asked him about the potential for a Trump two hundred and
fifty dollars bill. I asked him about inflation numbers. I ask him about how the economy is actually doing, and one of my favorite things the Trump accounts how you can get involved, particularly if you've got young kids or grandkids.
So all that is cool and covered on the broadcast. Let's get into it first with Carla sans.
Right.
Really pleased if Carla sands with me, the former ambassador to Denmark for the United States ambassador and last time you were here, we were talking about Greenland. That's kind of fallen off of the radar. Are you disappointing this? I'm a little disappointed in this. I still want us to take Greenland and have that become the next date, but it's a well what happened?
How come the conversation? I dropped.
Well, we've got this Iron War going on and a few things cooking down around Cuba. In our southern hemisphere, I would say it's on the back burner, but I would say within maybe the third quarter of this year, you'll probably see more developments regarding Greenland and the Arctic.
I hope so.
And a lot of that is dependent on getting through the Iran war, which I think largely is pretty noble. But as are all foreign intervention engines around the world, there's always so many issues that it's hard to foresee when you enter a war, even for righteous regions.
So I want to talk about.
Where we think we're at here and what do you define How would you define a victory? What do we need to achieve to be able to be able to come home and say definitively, declaratively we won this thing.
Yeah, it's a great question, Alex, because that's what's on the mind of every American. How do we get out and what are we achieving? And thank god President Trump doesn't believe in forever work, so we're not going to be there for twenty years. Iran has a fuse lit because they at some point are not going to be
able to pump any more energy. Once carg Island and all of the storage areas are full, they're going to put the oil into the ships, into the the carrier ships, and then once those are full, they're going to have to cap off those wells.
How long is it going to take? Not that long.
So when President Trump says today in his cabinet meeting, I don't care about the midterms, he's telling the Malas and the IRGC members in Iran, we're not going to end this war because of the midterm so you can stop watching the clock thinking that I'm going to blink. I'm not going to blink. That was a direct communication to the regime was strong. He also said, We're not going to leave with a bad deal. We're not doing a bad deal like Obama did with the JCPOA where
they can slowly get that bomb. He's saying no nuclear bomb for the Iranians, and that's a good thing. We don't want them to have nuclear arms. They've threatened us and said death to America and death to Israel. We don't want to be on their radar when they have a much longer range, medium range missile than they had claimed. They had lied about about fifty percent of its capability.
So how long what's the.
Timeline till they have a long range nuclear weapon or a long range missile that can attack the homeland.
I don't know.
Probably not that long because China and Russia are helping them. So what do we want to do.
We want to shut down all the trains and trucks that are bringing supplies in from China and others who are helping to resupply Iran. We want to cut off the money so that they're starved of cash, and then we don't want to let their energy get out because that starves them of first of all, they're going to overflow, and then their wells will have to be capped. I
think they blink when that happens. If they don't and they just let their economy complete completely collapse to like stone Age, well then it's going to take more attacks to make this happen. Let's not forget. In World War Two, Japan also a very strong opponent. They in spite of the devastation, they would not surrender until we dropped two nuclear bombs.
Right.
Yeah, And I'm glad you brought up China because it does feel like a lot of what President Trump is doing foreign policy wives are designed to indirectly put pressure on China. I don't think they would respond very well to too much direct pressure, so I think this is pretty wise on the President's part. But China is a huge beneficiary for all that commerce going through the Strait, so I know they would like to see it open, which could ultimately perhaps drive China closer to the United States,
which is interesting. And also China maybe the position where they might decide to buy more of our oil versus Iranian oil. Do you feel like there's some upside here.
Yeah, I do.
They are talking about it, so there's a potential that they'll buy our energy. They already buy our coal. But one of the beautyful things about President Trump's foreign policy is what he did in Venezuela actually took away about four percent of China's energy and redirected it to the United States where we're now refining it like we did ten years ago. So that's a win for the US.
But then that Iranian energy supplied on another seventeen percent of China's energy, so that takes that off the table because it's not getting through it. But China also buys even more energy from the Saudis, and that's not getting through Cargo Island. Now there are not cargo the Hormu straight but Saudis have other ways of getting the energy out. But the less energy that China is getting, the more
pressure it puts on them. Although they have really great reserves, much more than our reserves, it puts a lot of pressure on China to do the right thing and stop being the malign presence as a country that they are against the United States with the propaganda, the theft, the ip theft, the restriction on rare earth minerals, all the things they're doing to try to destroy our economy but also our society. I mean they're behind if you're looking at these the riots and the sort of the pressure
from the left on stopping data centers for instance. The money's coming from China, so you know, you know, it's kind of throwing through flowing through people like Nevill Singham, but a lot of that money is funded by China to stop our progress as a society so that they can take over and they can win in things like the data wars.
Yeah, I'm important to always mentioned Nevill saying where you can. We've did a lot of research on him at Brightbart. I already did a segment on him earlier in the week on the show, So definitely a good call out there.
All right.
So the couple of the deal points potentially with Iron that I'm curious your take on. First of all, the issue of cash. It's the we really mocked Obama for giving Iran cash, and it feels like they're asking for a lot of cash. I think they can get cash again. For me, I've kind of conceptualized it as I don't think it's the cash that matters. It's that we don't
really know where the cash is going to go. So we could assume it's going to terror, and if the cash does good to terror, then that's really the problem. But I don't I theoretically don't mind if they use the cash for something like rebuilding their society, that probably doesn't hurt. But there's a real way to know, right, So what's your position on them getting cash.
Well, you're absolutely right with your first promise, and that is that they have doubled down and said, even in the last week, we are going to get a nuclear weapon. We are going to continue all of our activities. They are an existential threat to the United States if they have the power to attack us, and that means no
nuclear weapon. But also so all of the proxies that that they're funding, the who these hamas hesballah, And let's not forget I think they put out a fifty million dollar bounty on President Trump's head, so they've literally ordered a high level hit. I've never heard of a fifty million dollar bounty to assassinate someone that's truly evil. And so these people, if we can call them people because
they behave in subhuman ways. These really evil people are intent on their express and you know, their express determination to be an existential threat to everything that we hold dear. They want this caliphate. They are they are.
A kind of religious cult looking for the thirteenth Bodi.
They want revolution, and they want they welcome the terrible explosions and the end of everything as we know it, because they believe that there's their kind of heaven waiting for them. These are really crazy people, That's what President Trump says. I like that they are crazy people.
So then how do you kind of deal with crazy people? They're also very hard to negotiate. They spoke to the President about this personally. They move very slowly. They have huge layers of bureaucracy so that it's hard to get through. He says he doesn't even know who he's talking to some of the time. He said that publicly too, That's what he said to me before, and he's only echoed
that in the pass. Then how do you go about this is what's interesting because day to day we're tracking markets, we're tracking oil prices, and people are trying to read tea leaves here. How do you read tea leaves when you're negotiating with crazy people who are notoriously difficult.
Yeah.
Well, Alex and that's the great question. So, first of all, Americans are really good to deal with, Like we like to do deals. We do a lot of deals. I would say Europeans are good to do deals with. We all share common common things. The Iranians are probably the hardest people to do deals with in the world. Right, they have an ancient society, they're very tough negotiators, and that goes for even American Iranians. I mean, these are people that are hard to do a deal with. They're
very tough. But you get into this IRGC where it's like a mafia hard because these are the gangsters that run the country. It's about thirty one different decentralized nodes with different leaders, and so it's really hard to take this on when you don't have one central person that's going to be the pivot, there's no president.
It's diffuse and I'm not sure how much power really this mala has.
I think the IRGC is basically in control at this point, and I do believe that President Trump is going to have to go in and do a little more to just wake them up. They think that they're winning, or at least that's what their line is. Do you remember bag Dad Bob during the Iraq War, the guy would come out, he would say just crazy lies all day, every day, and I mean you could laugh, but that was there. That's kind of what the Iranian press is doing now, is they're just making things up and saying
crazy things. But because there's maybe an idea of the truth or something that people can hook on. I think probably there's a certain segment of the Iranian population and maybe people living in the Gulf States that might believe it, maybe twenty percent. But the Iranian people are so oppressed. They don't have the basic things that those of us used to living in societies that function have, Like they
didn't do the investments in the infrastructure. They don't have functioning water for a lot of the country, things like that things because the Mala regime did not invest that money you were mentioning, what would they do with the money. They're not going to put it in infrastructure. They're going to invest in terror and in building more you know, three hundred foot deep bunkers, or they're going to make
more bombs. That's who they are. So believe people when they've shown you over and over again.
So what do we want.
We want infrastructure built, We want the people of Iran to be peaceful. There's a group called NCRI that's where looking on that the National Council Resistance of Iran, and they want to be a non nuclear, democratically elected republic, a democracy with equal rights and freedom of religion and things like that.
So let's see if they can get it done.
There's other groups in Iran that want, you know, similar things, So let's see if the people can rise up. Unfortunately, China has exported a lot of its surveillance technology to Iran because of the agreement between the Malas and China, and so it's getting harder and harder for the people to actually advocate and fight for their independence.
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Right.
So this is an important point because we're trying to think about what our best case like, what's the worst case scenario victory where the best case scenario victories. I mean, I think all of us would love to see a regime change, though I think all of us are not holding our breath that that could potentially happen. But we all hate them all as we hate the IRGC is there. It just feels like that would just take way too much time and be too complicated to see that through
to the end. But I think all of us sort of holding out hope that maybe one day something could emerge that's not this.
Yeah, I agree, I'm hoping there. President Trump says they're in negotiations now. It's I think the Iranians are calling it the Islamabad Framework. I'm not sure what we're calling it. But I saw Steve Wikoff was in that in the room when he just the president just had his recent cabinet meeting, and so you know, if if there can be a negotiated deal, that's fantastic. Otherwise I just think we starve them out until they literally society collapses because
they have no money to pay their military. The RGC has the leadership, has no money to pay they're you know, members of the IRGC, and so things just collapse, which is what's happening in Cuba right now. So if President Trump keeps his eye on this and he's willing to wait them out, we win. We absolutely win. We're not in a hurry for a deal. Time is on our side. Time is not on Ron.
So well, one other complicating thing here when it comes to the Middle East is is Reel attacking Lebanon. I understand why Israel is doing it because Lebanon is Heswell is there and they're an ancient foe of Israel's and Hesbela is proped u Yra and Aron is attracted to their stuff. They're just hitting docks for Israel. But also that means that they're gonna invariably, because of the nature of the way Hesla operates, there's gonna be innocence who get injured and killed.
During the process.
I feel like this is not great timing for world peace that Israel continues to pummel Heswela. Right now, you've a thought on this, because they're they're still fighting them.
Well, I do, actually, so, Egypt used to be a Christian country. Syria was a Christian country. Lebanon was a Christian country. People used to call it the Paris of the Middle East. But the Muslims came in, Hesbela came in, and they basically they purged. They purged, they killed people, and they killed the Christians and drove them out largely. It's not any longer a majority Christian country. Could it be again, I don't know. I think Israel wants to
see if that's possible. Lebanon should be peaceful. It shouldn't be at war and trying to attack Israel at every turn. It should not be a hostile neighbor. And so let's see what happens, Okay.
And then so last one for today. You've been doing some work on visas. This is something we keep a close eye on at Breitbark. Could you share some of your findings you've had recently with us because this is a near and dear issue for us.
Sure, maybe I should publish at Breitbart sometime, Alex, that'd be great.
I love Wreitbart.
But the fact is that these visas that the US government has issued to foreigners over the years has resulted in is it forty five million or seventy five million visa holders? It's American visa holders. It's either forty five million or seventy five million. I can't remember the number, but either one is like crazy hoigh millions.
It's a lot of millions.
And the American young college graduates, but even non college graduates and mid career professionals are losing jobs or opportunity because we have people from foreign countries coming in. About eighty percent of them are Indian. They're coming in and sometimes they don't even have real credentials. They fake them, and once the one of these visa holders gets a hold of like the HR position or leadership position, they
bring in people from their own town. Like if it's Hydrobod, everybody's from Hydrobod is now being hired by that company, or it maybe from their own cast, and they bring people in from their own cast. But they it seems like they're favoring illegally people from their own country and often their own religion or their own cast.
And for America doesn't want cast systems.
We want to be equality, you know, under the eyes of God, we're all created equal. We don't have cast systems, we don't know high and low. We can move around in society, and so it's a really bad the corruption that they're bringing and also the sort of bad societal things that we don't want. We want to have our American culture that says we're all equal, we meet on the street. So this is an issue that I think the government has to pay more attention to. I see
now Congress is beginning. I just talked to Representative Brandon Gill and Speaker Johnson about this. These are really big deal issues that Congress is going to have to get on top of to end because we need to hire American and in an age of AI when there's going to be different Chaine just happening in employment, jobs will be there, but they may be a little different. We want to make sure that those American jobs and even
American universities that they're hiring American. They're not bringing in people from third world countries because they can spend a little less, or moving the jobs to a foreign country because it can cost them a little less if it's an American company. This is our two and fiftieth anniversary. I think they should show some patriotism, and they should hire American and celebrate our own great American working people.
Yeah, really really important points. I was interesting, I've been I just watched do documentary Hills Deals got coming out called Revolutionary America, and they were talking about how diversity was not the strength of the founders. The whole goal was to try to get a bunch of a lot of diversity, all growing in the same direction, and we really lose.
Sight of that.
That That's kind of what got us on the right track as a country, was trying to say, Okay, everyone's got different values, and everyone's got different principles and backgrounds, we all got to go in this direction. That's the real trick. It's not just announcing, oh, look, with diversity is beautiful. It can be, sure, but not always. We're trying to keep a society together. Sometimes we do need to have a collective consciousness.
Yes, and that's the shared common background that we have as Americans.
It's really really important.
I mean, when we see some of these foreigners that have been elected to Congress and the crazy ideas and the anti American sentiment coming out of their mouths, it really is kind of shocking.
Yeah, it really is.
Okay, anyway, the good stuff Carlos has. Where can people find some of your stuff? I know you're writing Daily Caller, you're writing in Washington Times. You're going to write for me? Now we work that's coming up. Hey, I'm easy to find. You know where to buy me? So good key with the great stuff. I'm enjoying these conversations, and let's do.
Another one soon.
Thanks.
All right.
One of my favorite people all media, John Carney, is here. He's my economic and finance editor at Brightbart News. We collaborate frequently on all sorts of different things. The Bright Bar Business Digest is a must read newsletter. He does the heavy lifting and I'm his sidekick on that one. And then we also appear quite a bit together on bright par Confidential, which is our show for premium members
that we do over break part. So if your big Bright Bar fan supporter, that's a way to get more involved, get to know some of your favorite writers and editors a little bit better.
John.
I collaborate over there quite a bit, but on the podcast today, John, because there's just too much economic news and I just want to start running stuff by you and start getting your take on stuff. The first and most fun item is breaking this morning. As we're recording this, probably a day afters comes out, Trump has allegedly pitched a two hundred and fifty dollars bill. I want to get your sense on the wisdom of a two hundred and fifty dollars bill does what signal does send about
inflation putting the president on it. I love that idea because it trolls all the bad guys. Also the two hundred and fiftieth anniversary of the country that kind of makes it relevant. Maybe there's all fake news, maybe just one of these headfakes, like we're going to buy Greenland, even though I want to buy Greenland.
What is your initial opinion on this stuff?
So part of me is exactly where you are. I really love the idea. A few years ago they were trying to get rid of the one hundred dollars bill. They thought, like, we.
You know, we shouldn't have it. One of the reasons though, for that, is.
That the larger denomination bills actually make it much easier to do crime. You know, like whenever you see a you know, like a drug deal in a movie, right, if it's one hundred dollars bills in briefcases. So if I were the president, I'd worry a little bit about like two hundred and fifty dollars bills in a suitcase being used to buy you know, you know, drugs or guns or whatever. You don't really want your face to be the face of criminal activity. On the other hand, look,
we have had a lot of inflation. We don't have we haven't had a higher than one hundred dollars bill in quite some time in general circulation, So why not, you know, it seems kind of cool. I mean, it would be fun to have. You know, they probably won't to be honest, they're not going to print that many two hundred and fifty dollars bills, right.
No, I don't know. I use them.
I've got a couple of things that I use cash for. I like having it around. I'm is it you know, miss missus doctor Marlow does not like any cash, like and then when she asked for cash for me, she always once like sixty dollars like some sort of.
Like really minimal about of cash. But it's for me.
I like having it, and I do feel like I end up sometimes when I go and I get the denominations I want.
The stats are pretty high, so I think it's kind of a cool idea.
Also, Trump being the guy that the rappers, all the rappers talked about for so long and then he's our richest president and for him to be on the biggest currency, I mean, it's just sort of fabulous to me. But does that is that necessary? Is it's a waste of time? Is it a distraction? What's you're talking?
She said? I'm not really one hundred percent convinced it's real. So, you know, these stories, maybe they pushed for it, maybe the Washington Post, you know, talk to some people who were you know, that's where the story came from, I think originally. So I'm not sure how real it is.
It could be like, it could be real in that like they proposed it, but it might just be in no patrol. I would carry around a two hundred and fifty dollars Trump bill in my you know, like in my wallet. I'd like to have, you know, didn't look, I don't want to like encourage criminals out there. I always have a little bit of extra cash, I mean, just in case, right, So a two hundred and fifty dollars bill would make it really easy to have, you know, a two hundred and fifty bucks on you at any
given points. So not, you know, not a terrible idea. I do love that. It, you know, will freak people out. It's going to you know, all the people who hate Donald Trump are going to think this is the end of the world. Oh no, he's going to put his face on the currency. Come on, like it's it's more of a fun thing than anything else. And as you said, I bet you you know, it would be fun to have, you know, like you said, like rappers, you know, raining making it rain money falling to Yeah, that's cool.
Yeah, I think it's cool too. And it's just like, how about how about you.
Know, like you're giving out a Christmas gift and then you pull out four crisp Donald Trump to fifty dollars bills forty who's not gonn feel like a million bucks?
It's only a thousand, but you'll feel like a million if you have that. And you know what, imagine giving that to like somebody for like the graduation.
Yeah, exact hard and they got a Trump fill inside.
I think it's you know, I like it. I like the idea.
I do think sadly though, it does represent that is just money is not what it was. I mean, it's the I think I got. I think I cracked one hundred bucks at the pizza joint last week. John, I mean I got, I got, you know, six mouths to feed minimum on a given night. So I'm not a typical family. But it's the they're small mouths. And I mean, it just feels like normal stuff is just so insanely expensive.
As I've been known to know that the uh, the the credit card fraud alert goes off on my gap on two of my cars, like I can't fill the car before the credit card limit kicks in in California.
And not great.
Two hundred and fifty dollars is the new one hundred dollars. Sure, that's that's not That's not great. And I but I think, really, like I said, there's not going to be a ton of use for the two hundred and fifty dollars bills, Like I said, mostly you would. I think it would be you know, people use it for gifts, they'd use it to carry around some extra cash. So there's probably not going to be a ton of these things ever pricked,
which you know also might make them collectors' items. Because, by the way, if the Democrat ever gets in office, do you think they're going to keep the two hundred and fifty dollars bills with Donald Trump's face in the circulation? They will end that as soon as they can, which, uh,
you know, might make them collectors items. Right, we might have two hundred and fifty dollars bulls in a frame that are worth five hundred dollars because they've been discontinued by the Kamala Harris or you know, Gavin Newsome administration.
At some point, I've been saying, I think it's gonna be hear us. I've been I've got to you know, my track record on this is second to none. I feel like she's by far at the front runner, sign him close. So it's the it'd be so magnanimous, though if she she let it go one, it's.
So perfect, it's so perfect.
And look, it's the I don't even know if it sends the right message with the fact that disinflation is it's too high and it's lower than it wasn't her Biden, but it's too high and we're gonna get to that momentarily. But before we get to inflation, which is on my list, John, this is as a recording. Is a big day because Trump accounts are open. There's a Trump account app. I'm not played with it, but I anticipate trying to do so today right away.
I want to know what's going on over there.
This does feel like potentially a big moment for people who are trying to come up with any way to scrimp and save for their future, for their children.
What is this? What do we you know about? Yeah?
So the great thing about the Trump account it is another way to save for your children's future.
There is right now.
So if you had a kid born in between January first of twenty twenty five and or over the next couple years, you actually get a thousand bucks to start the accounting. My kids are too old for that, so I'm not going to get the thousand bucks, although you could, you know, talk to our CEO. Because employers are allowed to contribute, parents are allowed to contribute, grandparents are allowed to contribute.
And this money has to be putt in relatively safe investments, basically an S and P five hundred fund. So it's not, you know, like you can't do crazy investments. It's not money that's really going to be at risk. But it gives away I think, to put more people in the market give.
When you try to educate kids about how like the stock market works and they don't have any skin in the game, it's hard for them to really learn this could potentially mean.
And I talked to.
A high school teacher, a friend of mine, who said, even exists would be great if all the kids in his class had Trump accounts so that they could actually be tracking how their accounts are doing, how the stock market is doing will actually affect them.
That'd be really good.
I got to say that this is something that I don't do a lot of interesting investments, John, but it's in my I would really love it. And if I had more money when I was in college, I worked in college at one or two jobs at a time, but I never had enough where I was like, really able to make a difference. If I had enough of an estay where I could really I could have seen building habits where I'm way on top of that stuff
at an early age. And I'm treating it as though it's a game that you can win in the stakes so you can make more money at it, and it just feels like something that could be really it could be a good teaching tool, is the main thing.
That's one of the ways Treasury Secretary Scott beston what's that.
He's really big on the idea that we can increase Americans financial literacy, and he thinks this will actually be a great tool to help young Americans understand the value of savings over time. One of the things I really like about these accounts is we've had similar things. There are these five twenty nine accounts where you can save, but it has to be spent on education. This is not limited in this way, so it can be spent after your child is no longer eighteen years old, particularly
once they get a couple of years beyond that. They really shouldn't be spending it immediately, but it can be used to do things like put down a down payment for a house started this, or just accumulating savings for retirement.
I think that's really great. It's not restricted. It's not a subsidy for colleges, which is more or less what the five twenty nine things were.
The other things there were like you could do a rawira for your kids, so you could do a traditional ira for your kids but it had to be money that the keys themselves earned, which might was like you know, basically like a child actor subsidy. It was not something aimed for everyone. This is an account that everybody can use, and particularly if you are a new parent. It's free money. I mean, the government is literally cutting you a check
and giving those too. There are also charitable organizations that are giving people money, and a lot of employers have said they will match their employee contributions to these accounts. That's really good. And you know, the key to any.
Savings, and you were alluding to this earlier is time, Right, the earlier you start to time in a bank in an account, particularly one that's invested in something like that SIP, which is going to go up a lot more than money. You know, you put money in a bank account, you don't get a lot of interest, but if you could grow on average seventy eight percent a year, which is what the simptas, that really adds up.
So after forty years you will have gained a lot of money accumulated. I think it's it's a great opportunity for Americans.
Yeah, I can't wait. I'm gonna get my kids involved immediately. Maybe even as early as today. It's just good stuff from the president. And it's good that we can have a minute to talk about something positive that's putting on you know.
Like like they made it maximally easy. Yeah, you know, everything's on it app. But it's kind of it's very annoying that so many other things that the government tries to do, you have to go through like a million hoops, get a form mailed to you and you know, fill it out and then mail back or forth. This isn't like that you can actually start it on your phone.
Yes, that's exactly right. And I just like that and the simplicity. So and I want to keep an eye on the app because recall, you know, president won't always have a great track record of starting new apps.
Or yeah, it's like this, you know, is this they're going to crash They these things happen if too many people try to sign up all at once.
It happened for Obamacare and many other places as well. But like the fact that Obamacare the biggest bet that Barack Obama made his whole administration, and the heat botched the website. Just stutting stuff. Okay, John, here's the main question. This is the biggest question. I want to take on those two specifics, but this is the most the biggest thing,
What is the state of the US economy? Every time you're on it's because I want to give the audience a assessment from your vantage point, because whenever I look down at the news on a given day, I'm seeing certain gauges that look positive, certain gauges that look negative.
Let me go through some of the stuff.
That you've been reporting on for us at bright barp and in the bright Bar Business Digest. So it's the consumer sentiment historic low. Americans are increasingly gloomy, including Trump supporters, about the economy.
But businesses are seeing strong sales growth. We just saw today Cohle's is anticipating bigger sales growth. But there are some exceptions to this.
Some car companies are seeing they're cutting their forecasts.
Businesses are betting.
According to your bright Our Business Digest article from a couple of days ago, they're betting on a boom taking place. And the FEDS preferred inflation gauge is up, but not up as much as the experts predicted.
All of this makes a very.
Confusing environment for people who are even I think pretty observant about this stuff. So I know that's a lot to bite off, but let's just get into it where we at.
Yeah, so the most so, yes, you're right, let's start with where you end in inflation. Uh, inflation is up, and it is up year over year. It's way too high. It's three point eight percent. A huge part of that it's gasoline.
Though.
Core inflation it's like three point three percent. Still too high, and we did want it to rise, right, everybody wants inflation to go down. The Fed end for two percent, we're well above that. Uh, and again gasoline politific. But even if you take out gasoline, inflation still rows, and it is and it's going up at two fasted picks.
The thing that really amazed me those is if you look at the consumer spending numbers that were released alongside those inflation numbers, the personal consumption expenditures, those are up a lot, in other words, and not just even outside of gasoline. So people actually haven't yet what the high price of gasoline mean that they're not buying other things. That was my big fear with the economy, right that you once you get gas heading up to four dollars
and fifty cents. People have less money to spend on other things. Less why it just spend on groceries, on shoes, on clothing, on haircuts, right on services.
You know, we're not seeing that.
Actually, consumers are being resilient to the high gas prices. That's not great, you know, meaning people are going to feel stretched. They're real spending, meaning it's after inflation is actually falling, meaning they're getting less stuff for their money. But that's going to happen when you have gas prices go up twenty They're close to thirty percent year over year according to the Personal Consumption Expenditure Index, So people are still spending. They're not being scared out of this.
I think a big part of that is that unemployment is very low. Jobless claims are very low, which means people are not losing their jobs.
So that is encouraging.
As long as that measure holds up, people are going to be able to keep spending. And I think a lot of people do think that, unlike when if gas prices rise, because you know, we've had like a policy change that's going to permanently raise gas prices. People I think are looking at this gas price increase and saying it's temporary, so they're not saying, oh, I can't buy other things.
Because gas is so high. They don't like gas being high, but they think they can still keep spending because they think eventually gas prices will come back down.
And I think they're right. I'm not sure they'll come back down very quickly. I think we may be stuck with high gas prices for several months.
There's good news, you know.
I think the latest news is that there is a you know, maybe something of an agreement to reopen the Straight of Her Moves. But I don't think that's going to make gas prices go down at three dollars and fifty cents anytime in the next two months. I think we're stuck through a lot of the summer with high gas prices.
Yeah, I think so too, because I think it takes a while.
And then also remember the the it's a lagging index, and also the summer formula that they use is more expensive. So it's just one of those things that we're going to have to deal with. They'll come down eventually, but not yet. So I'm just trying to square this circle where you're saying businesses are betting on a boom. I want you explain that at the same time we're seeing consumer sentiment falls the floor, at the same time we're seeing Coals raise their projections for earnings.
Yeah, so look, Coal's numbers will just to be honest, aren't really that great. They're better than people expected. But Coals has had I just use that as.
An example of sort of just like an average store, average people buy average stuff at right, Coles has.
Some management problems. They even admitted this.
I just want to like put this out there so people don't think I'm counting Coals, Coals and Vincent like they have a problem. People walk into their store and they can't find the stuff they want to buy.
Their merchandise isn't exactly right, but they're stuck.
Is up twenty percent because they're actually doing better than a lot of people expected.
We saw that would best buy. Also they're doing they're they're doing better than expected.
The numbers that informed my piece about the businesses expected boom comes from the survey of businesses that the atlant of Fen does, and they expect that we're going to see a huge risons sales over the next year, and not because prices are going up. Yes, that also contributes to it. But because I think people will be buying more, businesses are confidence. So yes, you have consumer sentiment really, really down. The University of Michigan's measure is at the
all time low. That to me blows my mind. But I heard a good explanation for it. I mean, think about that, it's lower than it was during the pandemic, right when we block everything down. It's lower than it was during the financial crisis in two thousand and eight
and two thousand and nine. How could it be that at four point three percent unemployment, the economy growing, you know, a AI investment boom happening, businesses, stock markets at an all time Just to put it the easiest way, stock market is at an all time high and consumer sentiment is at all time low.
What's going on there? My favorite theory right now is that there's been a sort of cumulative impact on consumer sentiment. It just off. It seems like it's one thing after another, right like.
You know, you get the financial crisis, then you get the slow growth and the sort of depressing Obama years. Things went pretty well under Donald Trump, but then we got hit with the pandemic, and then we got hit with Biden inflation, and so I think even when times are good now, people don't feel good about the economy
because they feel like they get ambushed every time. It's like when the you know, you're watching like a horror movie and the nice music comes on, You're supposed to relax, but you don't relax, you know, the like you know they're going to open the door and the killers right behind it.
Right, that's what's happening. I think that's how people feel about the economy.
The cumulative effect of all of the series of bad things that have happened to us, it has just basically depressed consumer sentiment. But look, consumers might not feel good about the economy, but and years ago that would have been indicated that they were going to spend a lot.
But that's not happening.
We actually aren't seeing a tight correlation between how consumers say they feel about the economy and how they act.
About the economy. I mean.
One of the other thing that's going on, obviously, is Democrats are out of their mind when it comes to think about the economy. I just looked at an economists you gou pull and fifty five percent of Democrats think that we're in a recession right now, you know, the first procession we've ever had where nobody ever lost their job. Another twenty four percent of Democrats say we're likely to be in a recession sometime over the next twelve months.
So then you're looking at eighty eighty something percent of Democrats. We are not such an are headed one. So that's automatically going to weigh down any measure of consumer sentiment. Now, we have seen a little shakiness on the part of Republicans. Trump voters, people who say they're maga, people would say they're conservatives. Their consumer sentiment has come down, but they're nowhere near as depressed. That's these awful Democrat numbers were getting.
I think Democrats just hate Donald Trump and they will never feel good about the economy as long as Donald Trump still around.
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or go to lear alex dot com. Yeah, exactly, And and they like feeling bad. It makes them feel live to feel bad about things. And it feels like there's unless you're some sort of a capitalist that prefers Trump to Democrats secretly, which I do think that's a subset of people. But again, John, I guess the main question I've got here is, other than the war, is there anything else inflation area that's going on that you feel like is not good and the Trump adminstration should rein in No.
I actually think that's the fantastic I'm happy to hear it. I think the economy is doing really well even despite the war. Right.
The thing that impressed me the most about the latest consider spending numbers that we got today was that it didn't disrupt people as much as I thought that it would. I you know, I think we've talked about this. My biggest fear was that people would have to pull back on spending because they're spending so much on gasoline. We're
not seeing that. So the economy is doing well. Employment is doing well, business investment is booming, The hiring has been really good for several months, and layoffs are almost non existent.
So the economy is doing very well.
The gas price oil prices are the obstacle to it doing even better. But what I would say is even with those gas prices, we're still doing well. So it's not like we could be doing well if not for gas prices. It's we are doing well, and we could be doing even better if we didn't.
Have gas prices as highs.
There, John Carney, what else do you feel like the audience we should impress upon them during our remaining time that we've got today on this very podcast.
So I think we're going to get next week some employment numbers, and those will be important, But.
Is it jobs? Is it jobs week? Already? We're already here, not tomorrow, not Friday, but next weekend.
Next week we're back to jobs Friday, and we've had several good months where jobs numbers really blew away expectations.
I think we're going to see a pretty strong jobs number again.
But the one thing I want to like tell everybody about this because you'll often hear people say, well, the job's numbers, we're not adding that many jobs in the economy, and this is the mental reset a lot of people haven't yet made. We don't need to add many jobs in the American economy. We are actually very near full employment. We needed to add a lot of jobs when the
population was growing fast. We needed to add a lot of jobs during the Biden administration because they were letting in millions of people a year over the border.
We put an end to that.
So the at growth of the labor force is now very low. A month where we get ten thousand jobs is a good month. That's something that like the economic pundits haven't gotten their head around, and I don't think the American public has either. We're used to seeing one hundred two hundred thousand jobs as a good month. We're not yet used to seeing ten thousand jobs is a good month. I think we're going to have to readjust our expectations of that. And it's not a downgrading of our expectations.
Right.
I'm not saying, like, get used to bad jobs reports. I'm saying, rethink what a good jobs report is. When you have very low unemployment and low labor force growth, you just are not going to be adding that many employees. Instead, businesses are going to grow by increasing productivity and investing in equipment, machinery, doing capital expenditures. That's how they're going to grow workers. And by the way, that's a path to higher wages for workers, non inflationary. Higher wages need
more productivity. So this is a good development for the US economy. But people's minds aren't yet there. So when we watch the jobs evers coming next month, look, I know I'm not going to try to dicked exactly where they're going to come out, but I will say the number might not look good by historical standards, but it may be amazing.
By what we need right now for the US economy.
John Carney, Economic and Finance editor for Bry Partners. Always appreciate the insight that you give me, and really I get coached up in these things. I always have my number two pencil I type, but I do theory to have my modern version of that out, so I learn a bit when we talk to John. Thank you, my friend, and thanks to all of you in the audience. Thanks Misty for putting it together, and all of you for a two on ten thousand friends and family members about the show.
See you next time.