The economy, high inflation, high-interest rates.

0:00 Speaker 1 What us today is Steve Forbes, one of the smartest economists I know and a great businessman. Mister Forbes, otherwise known as Steve, how are you today this Sunday morning. Our economy is floundering. What’s going on?

0:21 Speaker 2 What’s going on is confused, one of the things. In addition to the huge spending, reckless spending from Washington, which is at a higher level than it was even at the height of COVID, nobody seems to know where that money is going, trillions of dollars. But one of the great dangers is the Federal Reserve, which still believes that

0:40 the way you fight inflations by depressing the economy. So the fact that the economy shows some signs of strength, the Fed is keeping interest rates at artificially high levels. And that’s doing two things. One, it is hurting particularly people with middle and lower incomes who have to pay interest on mortgages, who have to pay interest on credit cards,

1:03 interest on car payments and the like. They’re getting crushed. And then the housing market and the commercial real estate market are getting crushed as well. When you have mortgage rates going up to seven and a half percent. As you know, the monthly payment or a typical house owner has doubled in the last couple of years from a

1:22 thousand a month to two thousand a months. That is a real hit to Americans. And John, one of the surprising things is that the consumer Price Index does not include interest payments on mortgages or car loans or credit cards.

1:39 Those are real expenses, but they’re not included in inflation. If they did that, the real rate of inflation would be two to three times what it is announced today.

1:50 Speaker 1 I agree with you, and it seems like the higher the interest rates, the more problematic is going to be for the real estate industry, and then the banks will have a problem.

2:06 Speaker 2 The banks, a lot of banks are going to have problems precisely because there’s a lot of people, especially in commercial real estate, are not going to be able to make timely payments because of the high vacancy rates. And the housing market’s been totally mucked up because people who have low fixed mortgage rates don’t want to sell, and

2:27 so you have artificial shortages. So it’s it’s a real mess. And the interest rates are cost of doing business, which the FED doesn’t seem to realize. What the FED should do is let the markets set interest rates. What they’re doing is a form of rent control with their interest rate manipulations.

2:49 Speaker 1 You’re one hundred percent correct, h What else? What else is hurting our economy? What do you see?

2:59 Speaker 2 What hearning are the countless regulations that are coming in now that are especially burdensome to small businesses who don’t have the lawyers and the accountants and others to deal with this reign of regulations. Even big banks are hit by it. For example, the large banks now have to file two reports each eighty thousand pages long, which are

3:27 useless in terms of capital adequacy. If you want capital labacy for a bank, just look at the balance sheet. But regulators are making them. Do these thousands of pages of regulations that are burdensome raise the cost of living?

3:42 For example, the head of the head of JP Morgan, Jamie Diamond, pointed out the other day that if you took out all the crazy regulations on mortgages, they would be the typical mortgage rate would be seventy to seventy to eighty basis points than they are today, so instead of seven would be six point two. That’s real money,

4:06 and that is this useless regulation opposing a real burden on real people.

4:13 Speaker 1 How are mister Forbes, how are things going to happen when the individual agencies like the EPA are making their own rules, and already the Supreme Court says rules for business and our economy, et cetera are supposed to be done by Congress.

4:32 Speaker 2 That’s right. How are regulations that have a certain impact have have to be approved by Congress? And this is just the lawlessness of the current regime. They just do what they want to do, and the heck with what the law says. So when a new government takes over in January, one of the first things they have to

4:55 do is get rid of these regulations. Also prosecute the law wallessness. They know what they’re doing is wrong, but they figure f take the courts forever to do it, and we’re just going to do it for short term political election gains. So lawlessness must be punished.

5:14 Speaker 1 Anything else you want to tell you American people on a Sunday morning, everybody’s having their coffee right now. Any want to know where are we going?

5:25 Speaker 2 What we’re going is we have two start choices. Either we go in the direction we’re in where we’re stimied and suffocated with regulations and entire taxes. They’re coming, and or we get a new approach, the traditional approach of individual creativity initiative, allowing businesses to be able to grow and prosper banks being able to lend patients, being in

5:54 control of healthcare, and the federal Reserve realizing their task is a stable value for the dollar, and not manipulating the economy. The Soviet Union showed manipulating the economy doesn’t work, so back off. They are wrong every single time. They’re economic models, no matter how elaborate, can’t predict the future.

6:15 Get over it. Let people be free again.

6:18 Speaker 1 Well, mister Steve Forbes, thank you so much for your input, and the American people appreciate it. And God bless America, and I pray for our country and we’re all working hard for our country. Thank you so much.

6:32 Speaker 2 Thank you, John, Keep up the good fight.