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Mark interviews John Carney of Breitbart News. · The Mark Simone Show

• 0:00
  Speaker 1: Let's get back to the Mark Simone show on w
• 0:04
  Speaker 1: R Well.
• 0:05
  Speaker 2: John Carney, the brilliant business editor of Breitbart Business Digest.
• 0:10
  Speaker 2: You know the top economists in the world, A lot
• 0:14
  Speaker 2: of the businessmen, they subscribe to the Breitbart Business Digest.
• 0:18
  Speaker 2: You should too. It's great stuff. Every day. Just go
• 0:20
  Speaker 2: to Breitbart and then go to newsletters and subscribe. It's free.
• 0:24
  Speaker 2: Just subscribe to the Breitbart Business Digest. You can read
• 0:27
  Speaker 2: John Karney there every day. John Carney, how you doing.
• 0:33
  Speaker 2: Bring me back on Hey, great to have you. Hey,
• 0:37
  Speaker 2: Now tell us about oil. Soudast are saying, I go
• 0:39
  Speaker 2: to one eighty of people all upset. It's at one
• 0:42
  Speaker 2: oh five, it's one ten. This is all just temporary,
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  Speaker 2: isn't it.
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  Speaker 1: It is temporary.
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  Speaker 3: But the problem is nobody knows how long the temporary lasts.
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  Speaker 3: It's actually in some ways if it was seen as longer,
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  Speaker 3: we would actually get more US investment in oil that
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  Speaker 3: would then help bring the oil price down. They always
• 1:07
  Speaker 3: say the cure for high prices is high prices because
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  Speaker 3: it brings on more supply. Here that's unfortunately not going
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  Speaker 3: to happen because the high prices are being caused by
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  Speaker 3: the bottleneck at the straight of her moves, and so
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  Speaker 3: nobody's going to invest in new production in the US
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  Speaker 3: because that they expect that to be cleared up. The
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  Speaker 3: real problem, though, is when if we have oil at
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  Speaker 3: one hundred and ten dollars a barrel, gasoline at around
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  Speaker 3: four dollars a gallon for a.
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  Speaker 1: Week or two, we're okay.
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  Speaker 3: If it persists at that level or goes even higher,
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  Speaker 3: the saudis talking about one hundred.
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  Speaker 1: And eighty dollars a barrel. That will be very bad.
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  Speaker 3: For the economy, not because it will cause inflation, but
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  Speaker 3: because it will actually cause the opposite and economic contraction.
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  Speaker 3: Every dollar extra a gallon that you have to put
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  Speaker 3: into your car is a dollar less that you have
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  Speaker 3: to spend on the other goods and services that.
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  Speaker 1: You buy for your house, your family.
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  Speaker 3: So gas says a tax, slowing down the economy, And
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  Speaker 3: the real question is just duration. Persistence one hundred and
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  Speaker 3: ten dollars for a couple of days, we're fined for
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  Speaker 3: a couple months, it will slow the economy.
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  Speaker 2: Yeah, Now there's things the president can do. Release oil
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  Speaker 2: from the strategic reserve. You can turn up some spigots
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  Speaker 2: somewhere right, There's things we can do if we have to.
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  Speaker 3: There are some things we can do, but it's actually
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  Speaker 3: much more limited than people think. We can use the
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  Speaker 3: strategic control and reserve, but the problem is we actually
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  Speaker 3: have a.
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  Speaker 1: Lot of supply in the US right now.
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  Speaker 3: We can the President suspended the Jones Act, which can
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  Speaker 3: is what kind of ships can move oil from the
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  Speaker 3: Gulf Coast up the East coast. That'll help a little bit,
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  Speaker 3: but there's not a lot he can do because oil
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  Speaker 3: price is not just somewha's available right now, but what
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  Speaker 3: people expect to be available in the future. Your reserves
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  Speaker 3: have an endpoint to them. Again, if this ends quickly,
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  Speaker 3: you probably can use the reserves to hold down prices
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  Speaker 3: from going up. If it keeps going, you can't.
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  Speaker 2: So let's say two weeks and six days from now
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  Speaker 2: they reopen the straits of horn Moose, thirty forty tankers
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  Speaker 2: a day are coming through. Then how long before the
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  Speaker 2: price comes down?
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  Speaker 3: Well they always say that, particularly gasoline prices, that they
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  Speaker 3: rise like a rocket and fall like a feather. There's
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  Speaker 3: good reason for that, in that the gas station owners
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  Speaker 3: are nervous about dropping the price down too far, too quickly,
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  Speaker 3: because they're always thinking not of how much did I
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  Speaker 3: pay for this gas, but how much will I have
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  Speaker 3: to pay for my next tanker full of gas that
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  Speaker 3: I have to fill up. You have to make enough
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  Speaker 3: money to be able to fill up the next tanker.
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  Speaker 3: So it'll take some time for gasoline prices to come down.
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  Speaker 3: Oil prices, though, will go.
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  Speaker 1: Down right away.
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  Speaker 3: I think as long as people are confident that you
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  Speaker 3: know that it's open, that it's going to stay open,
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  Speaker 3: we will see a pretty dramatic decline in the price
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  Speaker 3: of oil, and then gas will take a little longer
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  Speaker 3: to come.
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  Speaker 1: Down, but not much.
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  Speaker 3: In pretty short order, we'll see the prices start to decline,
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  Speaker 3: particularly if they get it done quickly and get it
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  Speaker 3: done plausibly.
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  Speaker 1: Right.
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  Speaker 3: It can't just be, you know, something that where people
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  Speaker 3: think it is, you know, we got a couple of
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  Speaker 3: tankers through. It has to be that this twenty percent
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  Speaker 3: of the world's oil supply that comes through there that
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  Speaker 3: we expected to remain open for the foreseeable future.
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  Speaker 2: Now, whenever the price drops dramatically, like under the first
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  Speaker 2: year of President Trump, it doesn't seem to drop in
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  Speaker 2: California or New York.
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  Speaker 1: Why is that?
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  Speaker 3: Yeah, Well, there's a there's a couple of reasons, and
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  Speaker 3: they all rhyme with left wing politics. The California has
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  Speaker 3: a couple problems. One is that even though we produce
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  Speaker 3: a lot of oil in the US, California doesn't really
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  Speaker 3: have access to very much of it. It can get
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  Speaker 3: California out of it, can get oil that's actually taken
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  Speaker 3: out of the ground in California, but these giant Midwest
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  Speaker 3: oil platforms we have, there's not a good typeline to
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  Speaker 3: get the oil across the whole country. That's a huge problem.
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  Speaker 3: California and New York have enormous gasoline taxes.
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  Speaker 1: Right now.
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  Speaker 3: The national average price for gasoline is something like three
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  Speaker 3: dollars in eighty eight, so that's called three dollars ninety sense.
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  Speaker 3: In California it's well above five dollars that it's approaching
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  Speaker 3: six dollars. So California is paying far more for gas.
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  Speaker 3: But it's not because gas you know, gas stations are
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  Speaker 3: greedier in California or oil companies, hey, California. It's because
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  Speaker 3: the climate change activists won't let us build a pipeline
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  Speaker 3: to California, and California insists on taxing it. They like
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  Speaker 3: expensive oil because they want to force people to give
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  Speaker 3: up their internal combustion engines by making it too expensive.
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  Speaker 3: So this is not an accident. It's not even an
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  Speaker 3: unintended consequence of their policies. This is what they were
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  Speaker 3: aiming for us to have gas the more expensive.
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  Speaker 2: Interesting. Hey, we're talking John Carney Brekebark Business Digest. Make
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  Speaker 2: sure you subscribe to it. Fed Chairman Jerome Powell, what
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  Speaker 2: the hell is he talking about? Now when his term
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  Speaker 2: is up, he may become the pro temp chairman. What
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  Speaker 2: is he talking about? There's no such role, is there?
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  Speaker 3: No, there's not. So what Peals said was that if
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  Speaker 3: his successor, Kevin worsh who has been nominated by President Trump,
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  Speaker 3: is not confirmed by May fifteenth, that he will stay
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  Speaker 3: on as chairman. That's not allowed under the law. Now,
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  Speaker 3: there have been times where the Senate didn't confirm the
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  Speaker 3: next chairman, but it was the same chairman. So, in
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  Speaker 3: other words, back when Powell got renominated during Biden's term
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  Speaker 3: for a second term as chairman, there was a gap
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  Speaker 3: where the Senate hadn't yet gotten around in confirming him
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  Speaker 3: to that role, and he was allowed to stay.
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  Speaker 1: In that role.
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  Speaker 3: But that was because the President had already nominated him
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  Speaker 3: to the position. That happened with Ellen Greenspan as well.
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  Speaker 3: There's no president for a former chairman holding on to
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  Speaker 3: the role because the next chairman hasn't been nominated. What
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  Speaker 3: the best legal analysis we have of this, which goes
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  Speaker 3: back to the Carter Whitehouse, says the President that will
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  Speaker 3: select one of the sitting chairmen. Now he could be
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  Speaker 3: he could select Powell, but I don't think Trump's going
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  Speaker 3: to select pal to be the temporary chairman. But he
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  Speaker 3: gets to select one of the sitting governors to serve
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  Speaker 3: as chairman. The Senate doesn't get to say in that.
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  Speaker 3: The FED Board doesn't get to say in that. Certainly
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  Speaker 3: the FED. The current FED chairman whose term is expiring,
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  Speaker 3: doesn't get to claim the power to do this unilaterally.
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  Speaker 3: He didn't even have a vote, by the way, from
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  Speaker 3: the other FED members to say I have this power.
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  Speaker 3: He is unilaterally grabbing it. Frankly, if he continues to
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  Speaker 3: say this, it could I don't think Trump will do this,
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  Speaker 3: but it could become.
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  Speaker 1: Grounds to remove him.
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  Speaker 3: Because he is claiming a legal power he does not have.
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  Speaker 3: I don't think Trump will do that, and it would
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  Speaker 3: be a bigger hassle. What Trump should do is just announced.
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  Speaker 3: If worsh isn't confirmed, he is going to make Steven Myron,
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  Speaker 3: Christopher Waller, or Michelle Bowman the FED chairman until warsh
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  Speaker 3: his compromation comes around.
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  Speaker 2: I like that well, John Carney, brilliant it. As always,
• 9:01
  Speaker 2: everybody should subscribe to brek Bart Business Digest. All the
• 9:04
  Speaker 2: top minds in America read it every day. And what
• 9:07
  Speaker 2: the best way is go to Breitbart right.
• 9:09
  Speaker 3: Just sign up, Yeah, Breitbart dot com slash Newsletters. There's
• 9:13
  Speaker 3: a whole bunch sign up for bright Bar Business Digest.
• 9:16
  Speaker 3: It's free, it comes to your mailbox, and here's you
• 9:19
  Speaker 3: actually get it a couple hours earlier before it goes
• 9:22
  Speaker 3: up on the site at Breitbart dot com slash Economy
• 9:25
  Speaker 3: you can. The subscribers get it about an hour and
• 9:30
  Speaker 3: a half earlier than everybody else. So it's worth subscribing to.
• 9:33
  Speaker 2: I'm telling you all the top economists read it. First
• 9:35
  Speaker 2: thing you read every day, bright Bart Business Digest, Breitbart
• 9:38
  Speaker 2: dot com slash Newsletters. You sign up for anything you
• 9:40
  Speaker 2: want there, but make sure you sign up for the
• 9:43
  Speaker 2: bright Bart Business Digest. John Carney great as always, Thanks
• 9:46
  Speaker 2: for being with us, Thanks for having me Mark right,
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  Speaker 2: Take care, Hey, Coming up Buck and Clay noon today,
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