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Mark interviews Breitbart Business News editor John Carney. · The Mark Simone Show

• 0:00
  Speaker 1: Welcome back to The Mark Simone Show, live from the
• 0:04
  Speaker 1: WOR LifeVac studios. Well, John Carney, the editor of the
• 0:09
  Speaker 1: Breitbart Business Digest, which is a very important thing to
• 0:13
  Speaker 1: read every day. The smartest people, Larry Kudlow, Scott Besant,
• 0:17
  Speaker 1: they say it's the first thing they read every morning.
• 0:19
  Speaker 1: The Breitbart Business Digest. You can get it. It's free.
• 0:23
  Speaker 1: Just go to Breitbart.com, go to newsletters, sign up for
• 0:26
  Speaker 1: the Breitbart Business Digest. And here's the editor, John Carney.
• 0:30
  Speaker 1: How are you doing?
• 0:33
  Speaker 2: Very good. Thanks for having me, Mark.
• 0:35
  Speaker 1: Hey, 2 o'clock today, they'll announce the new rate. Kevin Warsh,
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  Speaker 1: first time. What are we thinking, a quarter of a point?
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  Speaker 2: Yeah, it's almost certainly going to be a quarter of
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  Speaker 2: a point hike. I don't think they'll want to go
• 0:52
  Speaker 2: more than that. Market is pricing in a quarter of
• 0:54
  Speaker 2: a point hike. Maybe... one or two more by the
• 0:59
  Speaker 2: end of the year, but they won't want to deliver
• 1:01
  Speaker 2: a shock either by not hiking or by overdoing it
• 1:06
  Speaker 2: all at once. I think they'd go just a quarter point.
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  Speaker 2: All right.
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  Speaker 1: Let me ask you all the dumb questions people ask,
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  Speaker 1: including me. If you have inflation, why would you want
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  Speaker 1: to rate hike?
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  Speaker 2: Right. Well, so the basic reason is And again, this
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  Speaker 2: is a little bit complicated because monetary policy really does
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  Speaker 2: work like a complicated contraption. But when interest rates are higher,
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  Speaker 2: people borrow less money for all sorts of business projects.
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  Speaker 2: And some more money goes into owning bonds rather than
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  Speaker 2: investing in businesses, right? The effect of that is to
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  Speaker 2: lower demand across the economy. At least that's the theory.
• 1:56
  Speaker 2: So you raise rates and you basically slow the economy
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  Speaker 2: a little. That hopefully brings down inflationary pressure.
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  Speaker 1: Now, there are people listening saying, well, this is going
• 2:07
  Speaker 1: to make it more expensive to get a mortgage. Is
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  Speaker 1: that true?
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  Speaker 2: I don't think that that can be true when the
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  Speaker 2: Fed raises rates. I don't think it'll be true right
• 2:16
  Speaker 2: now because we've actually already seen mortgage rates climb. And
• 2:20
  Speaker 2: so the actual hike, because people believe that the Fed
• 2:24
  Speaker 2: eventually will have to hike. So the actual hike, I
• 2:28
  Speaker 2: don't think will do very much to mortgages. It may
• 2:32
  Speaker 2: even bring down longer term mortgage rates and longer term
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  Speaker 2: interest rates across the board because people will say, okay,
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  Speaker 2: If the Fed is addressing inflation now, it may not
• 2:44
  Speaker 2: have to hike as much in the future, and the
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  Speaker 2: long rates will come down with mortgages. Huh. All right.
• 2:50
  Speaker 1: Now, here's the other stuff. We love Kevin Warsh. We
• 2:54
  Speaker 1: both know him. Good guy. He's going to announce at
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  Speaker 1: 2 p.m., and then it says at 2.30 he's going
• 3:00
  Speaker 1: to hold a press conference. I thought he was going
• 3:02
  Speaker 1: to end that tradition of these press conferences.
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  Speaker 2: Yeah, he would like to. I don't know if he'll
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  Speaker 2: end it entirely. He does not want to have press
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  Speaker 2: conferences at the end of every meeting. That was a
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  Speaker 2: tradition started during the financial crisis, never used to happen.
• 3:19
  Speaker 2: He thinks that you should really only have a press
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  Speaker 2: conference when you have something important or new to talk about.
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  Speaker 2: But he did say, look, we've been doing press conferences
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  Speaker 2: every meeting for a while now. I'm going to keep
• 3:36
  Speaker 2: doing it until the end of the year, and then
• 3:39
  Speaker 2: I'm going to evaluate what should be done. He also
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  Speaker 2: has all these task forces that he's assembled to try
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  Speaker 2: to figure out what the right way for the Fed
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  Speaker 2: to communicate going forward is. He's very focused on the
• 3:53
  Speaker 2: idea that we changed things a lot back when we
• 3:57
  Speaker 2: had to drop interest rates to zero because the economy
• 4:01
  Speaker 2: was collapsing, because Wall Street blew everything up, And that
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  Speaker 2: we should be– we're not in that situation anymore. We
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  Speaker 2: should be rethinking how we do it. But he doesn't
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  Speaker 2: want to– you know, it would be too much of
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  Speaker 2: a shock if he just said, you know what, I'm
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  Speaker 2: not having press conferences anymore at all. So we're going
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  Speaker 2: to get a couple more this year, and then we'll
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  Speaker 2: see what happens next year.
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  Speaker 1: Yeah, that's a good point. He could spook the market
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  Speaker 1: by not doing it. Hey, these AI companies, the big four,
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  Speaker 1: the cartel, screaming for– please regulate us. What is that
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  Speaker 1: all about?
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  Speaker 2: Yeah. Yeah, so it is a very well-known thing that
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  Speaker 2: businesses do. Some people are saying, well, businesses usually don't
• 4:42
  Speaker 2: want to be regulated. That's actually wrong. Very often, we
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  Speaker 2: have seen many, many times over the last 150 years,
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  Speaker 2: basically since the birth of the regulatory state, Businesses attempt
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  Speaker 2: to become regulated because they want to create anti-competitive moats
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  Speaker 2: around their way of doing it. So if you can
• 5:02
  Speaker 2: make it really expensive to do it and get all
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  Speaker 2: the regulations in place that help your business or don't
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  Speaker 2: hurt it that much... then you're actually making it so
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  Speaker 2: that it's really hard to compete with you. As you
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  Speaker 2: put it, you make a cartel. So we'll have a
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  Speaker 2: cartel of two or three of the biggest companies, and
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  Speaker 2: everybody else will get squeezed out. That's a big part
• 5:25
  Speaker 2: of what's going on.
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  Speaker 1: Yeah, so this handful of companies controls all the AI.
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  Speaker 1: In other words, they want to close the fence now,
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  Speaker 1: shut the gates so nobody else can get in this.
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  Speaker 2: Yeah, that's right. And, you know, they have a point.
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  Speaker 2: There are real risks. But their way of regulating things
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  Speaker 2: is probably wrong. I'm going to have on Breitbart Business
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  Speaker 2: Digest a much cleaner solution that doesn't create these kind
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  Speaker 2: of regulatory gates around the industry, but also highly incentivizes
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  Speaker 2: the big companies in particular to make sure that their
• 6:02
  Speaker 2: product is safe. Yeah.
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  Speaker 1: Hey, you wrote about this. Everybody thinks retail is dead.
• 6:08
  Speaker 1: It's dying. Retail sales are actually higher, aren't they?
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  Speaker 2: Yeah, they're booming. It is a lot. So the background
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  Speaker 2: here is a lot of people thought, like, look, gas
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  Speaker 2: prices have gone up. They're really high. That should hurt
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  Speaker 2: sales elsewhere in the economy. You know, every dollar you
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  Speaker 2: spend put into your gas tank is a dollar less
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  Speaker 2: you have to spend at a restaurant. That's the theory. Frankly,
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  Speaker 2: I buy that theory. The problem is, it's not happening.
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  Speaker 2: The American consumers are saying, no, we're fine. When you
• 6:42
  Speaker 2: look at, so there's a category, they call it food
• 6:46
  Speaker 2: services and drinking places, bars and restaurants is what the
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  Speaker 2: rest of us would call it. That's highly discretionary. If
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  Speaker 2: people are running out of money, that's one of the
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  Speaker 2: first places you start to see it go down. It's
• 7:01
  Speaker 2: up 1.2% just in the month. And year over year,
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  Speaker 2: it's up 4.2%. So people are spending on the most
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  Speaker 2: discretionary categories and spent a lot more in August. That's
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  Speaker 2: not a consumer that is in pain.
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  Speaker 1: Wow. Hey, but oil, now $ 103 a barrel. Brent crude,
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  Speaker 1: $ 106 a barrel. We can't keep that up for very long,
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  Speaker 1: can we?
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  Speaker 2: No, that is really too high. It is, it needs
• 7:33
  Speaker 2: to come down. We need to, I mean, the latest
• 7:36
  Speaker 2: impetus to it was not the Strait of Hormuz, but
• 7:38
  Speaker 2: the other strait that connects the Red Sea. That's where
• 7:41
  Speaker 2: the pipelines were going. That was going to be the workaround.
• 7:44
  Speaker 2: Now we have these maniac Houthis who are high on this.
• 7:49
  Speaker 2: plant they call Kot, and they have RPGs, and they
• 7:52
  Speaker 2: have shut down the other missiles that they got from Iran.
• 7:58
  Speaker 2: It's the same problem. It's just a different group of
• 8:02
  Speaker 2: Iranian-backed maniacs. They've now caused the problem in the other strait.
• 8:12
  Speaker 2: These bottlenecks are driving up the prices. It needs to
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  Speaker 2: come down one way or the other. It will eventually
• 8:20
  Speaker 2: put a lot of strain on the economy. But as
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  Speaker 2: I said, right now, I mean, gas prices, as everybody
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  Speaker 2: listening to this knows, if you drive, gas prices went
• 8:33
  Speaker 2: up a lot in August. And the gas station sales
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  Speaker 2: were up 3.2%. That's not because people wanted to buy more. Yeah, yeah. Well,
• 8:41
  Speaker 2: because that includes the gas itself. Wow. Right? So people
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  Speaker 2: spent a lot more at gas stations in August.
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  Speaker 1: Sorry, 3.1%.
• 8:52
  Speaker 2: Don't want to mislead anybody, but 3.1% up. And that
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  Speaker 2: still did not stop people from spending elsewhere in the economy.
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  Speaker 2: I think eventually it will if they stay that high.
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  Speaker 2: And by the way, even if right now, it's a
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  Speaker 2: pretty big political problem for Republicans. People voted against Biden
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  Speaker 2: in large part because they didn't like inflation and because
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  Speaker 2: gas prices were too high. Donald Trump ran on an
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  Speaker 2: energy abundance. High gasoline prices are bad for the brand
• 9:27
  Speaker 2: of Republicans. Yeah.
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  Speaker 1: Well, John Carney, great stuff. You always are able to
• 9:31
  Speaker 1: explain everything brilliantly. Everybody read Breitbart Business Digest. You can
• 9:36
  Speaker 1: get it. It's free. Just go to Breitbart.com. Go to newsletters.
• 9:41
  Speaker 1: Click on the Business Digest. Sign up for it. It'll
• 9:43
  Speaker 1: come free every day to your email. John Carney, great stuff.
• 9:46
  Speaker 1: Thanks for being with us.
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  Speaker 2: Yeah, thanks, Mark.
• 9:49
  Speaker 1: All right. Take care. Hey, it's Wednesday already. We got
• 9:55
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• 9:56
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