The country is at a crossroads in this election.

0:00 Speaker 1 Sunday Morning with us today is Jake Clayton, the former Securities and Exchange Commission Commissioner, And well, he was with President Trump for four years, and so many things have happened, and this week historical drop in interest rates by jam and Powell. Jay, tell us about it. Tell us what you feel of what’s going on in the economy, what

0:29 you feel, is it right? Is it wrong? Give us your opinion. You were in Washington for four years, you ran the Securities in Exchange Commission, You’ve seen so many things. Give us your view.

0:44 Speaker 2 Well, thanks and nice to be here. My view when I was at the Securities and Exchange Commission, I think it frames my comments here was what does this mean at home? What does it mean for households? And I think what we’ve been seeing, at least over the last year is asshold budgets are tighter and tighter, and now

1:02 we’re seeing employment dropping. And I look, as a practical matter, the Fed needs to bring some relief to that group of people. Now there’s wider implications for the economy and the like, but we all know that prices are up, wages have not kept up, savings rates are way down, and to the extent that interest rates are eating into

1:23 household budgets. This brings some relief there in terms of the broader economy in real estate and the like, there’s room for relief as well.

1:33 Speaker 1 Well, mister Clayton, what I didn’t understand is what took so long, because the entire real estate industry has been suffering, and by them suffering, it made the regional banks and the banks suffer. And that’s one of the businesses I’m in.

1:55 And the banks used to chase you for real estate business. Right now nobody’s chasing anybody.

2:03 Speaker 2 Look, you have to make tough choices in government, and I you know, a lot of times people don’t want to admit that inflation is such a horrible scourge on the typical American. What inflation does to household budgets and the tightness that you need, you need to deal with inflation.

2:21 Who paid the price for inflation or for dealing with inflation and higher rates, People in the real estate industry and the like. You know, that’s just the way to say it’s not Let me say this. We talk a lot about soft landing. If we have a soft landing, we’re landing in a different place. We have more debt,

2:42 we have more stress in certain places. So even if we engineer soft landing, would you want to have gone through this? The answer is no. You need to avoid inflation like this at all costs.

2:53 Speaker 1 Well, President Biden promised the American people in twenty twenty that he’s going to take here the poor, He’s going to take care of the middle class. And when he made his war on the on oil, the price of gasoline doubled, the price of diesel fuel to the industries doubled, that increased the price of food by thirty to forty percent.

3:21 How does that help the poor in the middle class?

3:24 Speaker 2 It doesn’t, It doesn’t. What did we learn from that? What have we learned her the last four years. In addition to the fact that inflation and volatility hurt the middle class, hurt the poor more than they hurt others, we’ve also learned that the notion of this Green New Deal, that it would be good for middle class Americans was

3:42 absolutely fanciful. It was beyond silly. Let me give you a stat at the height of what I would say is energy inflation. During twenty twenty two, gasoline prices across the country were five to twenty five a gallon. They’re now three twenty five a gallon. Do you know what that means in people’s pockets every day? Seven hundred million dollars.

4:04 Speaker 1 Well, for every dollar that oil went up and meant one hundred million dollars to someone, Well, we burned one hundred million barrels a day exactly, and between the open nations in Russia they burn at least half of it.

4:24 So for every ten dollars they go up, that’s five hundred million a day.

4:29 Speaker 2 How crazy was it for us to transfer control over the price of oil to our adversaries. That was what the Green New Deal was doing. Thank god, we’ve taken it back. Let’s not make that mistake again.

4:43 Speaker 1 We made opic rich again. President Biden allowed President Trump had I ran down to four hundred thousand barrels a day. President Biden allowed them to go to four million battles a day. We made them, how should say, zillionaires again?

5:01 We made Iran had so much money they were able to hire hesbala and hoodies. And that’s what caused the problem.

5:11 Speaker 2 That’s because we had a horrible energy policy. Now the Biden administration has quietly reversed that energy policy and energy production in the US is actually up, but had had the Trump energy policy not invested for the future and for additional production, we would be in terrible shit.

5:33 Speaker 1 I was told because one of my company’s imports all their crude oil from Canada. Between Canada and the United States, we can probably produce over twenty million bows a day, maybe twenty one And why wouldn’t we only because of politicians?

5:52 Speaker 2 And hopefully we’ve learned that that’s a huge mistake, particularly for the middle class.

5:57 Speaker 1 So low energy with President Trump is fishing is low energy prices and now bring down inflation. So what what would my.

6:07 Speaker 2 And what else do we learn that for growth, particularly growth driven by technology, we need energy? Yes, and tech is our greatest advantage across the globe. Why wouldn’t we want cheap energy to power that great advantage in tech?

6:23 Speaker 1 And if the future of energy is following oil business, I don’t call it fossil fuels because it’s not fossils. It’s oil is made by the Earth. And I’ve said that many times.

6:38 Speaker 2 And look, John, if there’s a better cheaper way to produce energy, I’m all for it. I’m all for every But right now, the best thing you can do for America and for the middle class is to provide steady, inexpensive.

6:54 Speaker 1 Energy one correct, and what’s going to replace it fossil fuels, if you want to call it fossil fuels. What’s going to replace that someday is small modular reactors. And that’s what the future, I believe, is going to help the United States of America. And it’s not going to necessarily be windmills is not going to sell you going to

7:18 be it doesn’t give us enough energy.

7:22 Speaker 2 And not enough reliable, consistent supply.

7:26 Speaker 1 Absolutely, what else were Sunday morning? The American people are listening to us, they’re drinking their coffee. What else do you want to tell them?

7:35 Speaker 2 I want to tell them just to follow on from what we said. We’ve got great energy, we have great tech. There’s one more leg to that stool that we have in America, and that’s great capital market. It’s great investment.

7:47 And the three of them work together. And that’s why if you look at the US and you compare it to Europe twenty five years ago, our economies look the same. We’ve managed to create that tech, energy investment flywheel, and that’s why we’ve outperformed.

8:03 Speaker 1 Dramatically Jake Clayton, thank you for coming on, former Securities and Exchange Commission chairman. Would you take the job again if you were offered it.

8:13 Speaker 2 I don’t know if i’d take that job, but government service was the greatest. If a president asked you to serve, you should serve.

8:19 Speaker 1 I agree. Well, thank you so much, and God bless you and have a great weekend. Thank you.