ah ah safe good. mm hm. and then international anti corpse, an excellence award. bought now for your hero, lou

. hello, i, marianna mozy and london al main story. this, our japan is in a state of shock off to the form of prime minister sions, or ave, was shot and killed a campaign event on friday. all leaders have been paying tribute the man on for trying to revive japan's stagnant economy with his own brand of economics. as african name reports, a shot to the heart by a man with a homemade gone, a routine campaign speech ending in an unprecedented assassination. former japanese prime minister sions obeyed, died friday morning in the western city of nora. he was campaigning for upper house elections scheduled for sunday seconds after our bay collapsed officers tackled the suspect. police say 41 year old had to ya. ya mcgarr me. told them he was

disgruntled with our bay and aimed to kill him. it was a rare occurrence in a country with a low crime rate and some of the world's most restrictive gun laws. emma can men o q q, so we cannot accept that this violent act took place during an election. the foundation of democracy in the strongest terms i condemn this attack and to the 67 year old was a dynamo of japanese politics. and a 3rd generation politician. his grandfather was prime minister, his father foreign minister. abby distinguished himself as the longest serving prime minister with 2 terms in office. he brought stability to a political system that tended to kind of churn out prime ministers, one after another. and not only that, but he was also transformative and japanese politics. he made japan

a much more significant player in terms of regional and i would say, even global security. abbe promoted policies dubbed ib nomics, intended to boost the economy. he wanted to strength in japan's geo political clout, by amending its post world war 2 pacifist constitution. it proved polarizing among the public and his efforts failed. during his last year in office, he was criticized for his handling of the coban 19 pandemic. cuz as i say, i've worked hard every single day to revitalize the economy and conduct diplomacy that would protect the national interest during this time. i am proud to have taken on various challenges with the japanese people. oh oh, though i be resigned in 2020 siding, poor health. the following year he returned to japanese politics and continued to wield influence within the liberal democratic party. a man who couldn't shed his political skin assassinated for it. natasha rename l g a 0. in

are that lines rusher is vito to vote at the un security council that sought to extend a deliveries to syrians and the last rebel controlled north western region. a russian proposal to approve the un operation for 6 months also failed to get the required support. un is warning that closing the corridor via the bible, how a border crossing could be catastrophic. this is not a moment to mince words. i have long said that this is a life and death issue, and tragically, people will die because of this vote. and the country who's shamelessly deployed the veto. today, the u. s. president assigned an executive order to help protect women's access to abortion and contraception, terabyte and criticize what he called an out of control supreme court. which recently overturn roe the wade, the land not ruling that guarantee. the constitutional right to an abortion across the u. s. he said, the fastest way to withdraw or abortion rights is to pass

a federal law through congress. on the form of british chancellor wishes to knock is among the 1st people to say they are seeking to replace or is johnson as u. k prime minister e opposition leader to kissed armor is threatened to a no confidence vote in parliament unless johnson is removed as prime minister immediately at voice chances that he wants to remain in the row until the autumn. the bottom line with steve clemens is coming up next. ah, i am steve clements and i have a question. if so many economists and politicians from both political party saw it coming. why didn't joe biden see inflation coming? let's get to the bottom line. ah,

just one year ago, optimism floated through the air. the economy was booming after a gigantic pandemic relief package of $1.00 trillion dollars. people were buying new cars and old cars and stuff. lots of stuff on amazon. some even decided that they didn't want to work for a while. cash was flowing and extended unemployment benefits and rent relief paid many folks more than they made before the pandemic. we'll guess what economists call that kind of situation. a classic overstimulated economy. overnight. there was much more demand and supply then boom, the supply crisis hits. there wasn't enough to buy prices surged, and that's all before russia even invaded ukraine to shoot up the price of gas and all forms of energy, the debbie downers were out there shouting, inflation is coming, inflation is coming. but who wants to hear that job? i didn't want his folks out there saying the i word. now the white house may be finally admitting that it got this all wrong. but what can you do now?

to day we're talking to doug holtz eek and former director of the congressional budget office and current president of the american action forum a domestic policy think take here in washington, dc. doug, it's really great to be with you and see if her, where i'm going with this. i'm sort of interested in how in economics, so many people can look at the same ecosystem and see it so differently. but from a policy perspective, if you get inflation wrong, you're getting a lot wrong. i am i right. you are, once you let inflation getting grained, as we have, you essentially have no good choices at choice number one is live with the inflation. that's clearly not going to fly. people are very unhappy or do the things necessary to take that overstimulated economy and slow it down, raise interest rate. it's in the extreme raise taxes, cut spending, all of that produces weaker housing markets, weaker labor markets, weaker retail sales. that's bad news for american people, so you're looking at

a situation where there is no good news. all the choices are hard ones. so this is june of 2022, going into july and election is coming up in november. it's hard to imagine things getting worse where they were given the toxic political situation we've had in this country. we saw what happened unfold in january 6th. now we're seeing the price of you know, of gas of, of basic supplies baby formula of a peanut butter. i mean years, you just name it out there, and prices are surging. i'm just interested as someone who has been in the halls of power, who have advised presidential candidates, you know, what would you do in the situation? what would you advise president biden to do in the situation? he has the following very simple problem. ah, if you look at the monthly reports on personal income and outlays in the behavior of american households, they are spending money. you're continuing to spend money and they have a lot in the bank from the, the big stimulus checks and, and the,

and the spending fine and the, that sort of part of the economy is fine. if you look at the consumer sentiment surveys, we have consumer confidence at the lowest point since the depths of the 1980 recession. so people are behaving as if they've got the money, but they don't feel good about it and they're really unhappy and they're blaming the president and leadership. if you're in that situation, you have essentially 2 choices. choice number one has changed the subject. i don't think that will work. they've tried that on a number of occasions. choice number 2 is acknowledge some responsibility and, and take action. and so in similar situations, we have seen presidents let some people go say, look, my economic advisors have failed. the american people, i'm going to get an achievement and i wouldn't be shot to see that. you know, one of the things i'm always intrigued with in yet are you and i have talked about economic issues for a long time. and it's always fair. you know, to have contending perspectives into debate, which is what happens even among the federal reserve board governors. but i want to

go back to a tweet that heather boucher, j tweed it out in june of 2021. let's show this week reads as the viruses contain, the economy is improving step by step. today's data on inflation is the latest indicator that things are both moving in the right direction, and that we have supply chain hiccups. now in part this, this tweet was in response to folks like senator joe mansion at the time. and you began hearing a chorus, folks included some leading democratic commas, like lawrence summers, a former secretary, the treasury, jason firm, and a former chairman of the council economic advisors under president obama thing we've got a problem folks. i'm just interested. you are a practitioner in this field, you know, been in c, b o you advised senator mccain. how could this tweet be one? ah, you know, it's some level, how does this tweet get the, the reward or the condemnation it deserves? and how do you go back and say, wow, you know, mansion was basically calling something early on that he was worried about. so

early on, many people were worried about this. so, so now the clock back to the key moment, which is march of 2021 of the american rescue plan is being debated. cons, congress, $1.00 trillion dollars in us spending and tasked us a big stimulus. and at that moment, the posture of the white house and the democrats in congress is this economy needs a lot of help. and we need to give it something very big. and, and the motto you heard was better air on size being too big than too small and, and they pushed har. i testified about the american rescue plan at the time. and all the data indicated the economy is growing. it's 6.5 percent as, as indeed it turned out or did in the 1st quarter of 2021. there was no need for stimulus. so this was a political call that they were going to get try to take credit for the recovery by having this big stimulus. and they made a big policy here, larry summers to his credit senate at the time. so this gonna cause

a lot of inflation. other people were worried about it. i didn't think because what inflation, full disclosure i thought was a big boom and asset prices because people wouldn't be able to spend the money and they go buy criptos and houses. and we'd seen some of that already. but either way, we were gonna force the feds hand to do something and i thought it was a mistake. that white house tweet was trying to say, look, it's not our fault. the inflation is from the supply side. we didn't do it. and we got this growth and we want to take credit for. i don't think that your credit for the growth was there any way they inherited it. and you only measure supply relative the demand. they hadn't done the rescue plan, the supply problems wouldn't have been. so prevalent, so i think they really missed the boat analytically on this and, and they tried to cover it politically and they've been in trouble ever since. you know, one of the other dimensions out there in terms of big spending in the economy didn't, didn't happen was the build back better package, the early versions of the build better

a back better plan folks were about 6 trillion dollars. that's what bernie sanders wanted at the, you know, think, and then getting it to 3 and a half was, was a huge controversy. and then the even bigger controversy was getting that down to 1.75. really? you know, senator mansion was looked at a sort of the devil incarnate for keener suggesting right. and now that didn't happen either. and maybe when the climate energy bill or something comes along, it will be $900000000000.00 or trillion. but the point as you saw this, i guess my question to you, we don't even have to play with the 6 trillion. what if the 3 trillion 3 in after the $1.00 trillion dollar package had come on when it did? would things, would it have impacted these numbers would apply, you know, impacted inflation, the supply chain crisis, you know, that the, the supply crisis in general. how would that have played out if it had come to be? so the supply crisis is not complicated. it's the fact that we have, okay, demick and globally, workers have been unable to go to regular ships at their factories,

regular shifts of transportation. and as a result, things are all messed up in the end with logic that, that's, that's the pandemic that gets solved only by the public health response around the globe. so you have to live with that, that's there. given that it's there, you can't have too much demand. and i think senator mansion has a really, a saved the congress in the administration by, by stopping us. the political dynamic was we want to do all this stuff. streamline, broad scope to the bill, back, better plan. and as the numbers had to get smaller, the way they did it was let's front load these programs, have them only just for year 2 years, 3 years. let's back load the taxes and make it all at up till better a degree. won't you think about that front loaded spending back go to pay force. that's a stimulus bill. and that would have been the mechanistic went all over again. bigger internet economy that was clearly already having a big inflation problem. and it would have been a,

in worse policy era than the microscopy plan was. so they really are benefited from mansions, insistence that they not perform well. listen, let's listen to president biden for a moment in a state. the reality of how he see things right now. the idea we're going to be able to and out quick switch, bring down the cost of gasoline is not likely in the near term, nor is it with regard to food. so he's basically saying we're stuck in this situation for a while, and patient will be able to flip a switch. i just interested in what policy levers are out there. and i understand that the federal reserve is independent allegedly, from the white house. but when you kind of look at the question of the big role, the government plays out there, you know, in terms of talking to us, what sorts of, you know, we use talk about soft landings. you know, to, to try to bring an economy down to sort of manage the cycles in economy. i'm just interested in knowing from you. what are the levers that can be moved,

that the president is saying he doesn't have to deal with gas to deal with food to deal with inflation? so 1st let me say that the inflation problem is the fact that shelter as inflation of 5 and a half percent. so that was essentially, ah, one percent at the beginning of the president's term. ah, that's not something that moves quickly. that's not like food. we're see a bounce up a down. certainly not like energy we're global markets can move overnighting and raise and lower the price will dramatically shelter is rents and it's owning homes, and the inflation started slowly. and it's never yet pete. it's gone up month after month after month. and if you've got 5 and a half percent shelter inflation, you can hit the feds to percent target unless everything else is 0 or negative. and that's not going to happen. so if you think about the problem, the problem is how do we slow down the housing market? stop coming. so red hot of that year over year housing prices on

a 20 percent euro or your rent going up 20 percent and get the overall economy back to a original place. if 2 choices we can do with taxes and spending, or you can do it with the fed, the feds got a plan. and if the plan is simple, we're going to raise interest rates and in particular make mortgages traits higher . unlike mortgage is less attractive, which makes buying house less attractive, which makes building houses less attractive. which means that you don't put up refrigerators in those houses. you don't. what furnace is in this house? you don't paid the driveways. you don't do the electrical work. you have an impact on the broad swath of the economy by cooling down the housing market. and so that's, that's what the feds up to. it's largely the housing market will also shopping autos and other consumer doorbells would make those things more expensive, slow down the economy. unfortunately, if you're in a white house, you don't want to be seen is just sitting by and letting someone else solve the problem. you want to do something the things they would have to do would be the reverse of the, the, the stimulus raised axis had spending. that's not going to happen. this is an

election year. there's very little substantively baking. do the one thing that stands out to me is they could roll back some of the trump era tariffs, particularly on china and have a a discernible one time impact on the, the level of prices and economy. and i have been surprised at their reluctance to pull that level, that's something i at least would advise them to do. so you mentioned trade. i mean, i, i'd love to just go and not further in that because, you know, when the, when the president laid out his indo pacific in economic framework recently, there wasn't a return to the trans pacific partnership. there wasn't a widget region wide trade deal put on the table. and if you look on the, the gas and fuel side of it, you know, the president is going to be meeting up with the saudi crown prince allegedly, a ma, had been psalm on and others are there things that can be done in terms of whether domestic in the united states, or because we're the biggest oil and energy producer in the world, but with the saudis, or the other players, to basically help you know, create

a lot more. so a demand than we're doing on our oil, gas and other forms of energy. certainly both fronts, you could, in principle on get additional production, it takes some time and they would have to acknowledge the need as specially delay, you turn on their climate strategy, which has been to really call out fuel sources as the strategy. we're not gonna use coal, we're not gonna use oil, we're not gonna use natural gas. i don't agree with this strategy that has been their strategy. it has to do a u. turn on that and they're reluctant politically to do that. and they don't have to, to kind of deal with the saudis, where, you know, let's, let's just be delicate. i mean, relations are not at their all time best of in and there's a lot of concern about the saudis. and so i think they've been hesitant to get into that game and, and they're, they're trying instead to set expectations that gasoline and all over so roomy, ah, ah, i think they also have a general trade problem. if you look at the framework that just announcing the pacific account framework, that's not a traditional trade agreement that lowers tariffs, increases market access,

reduces costs of production and consumption. that they, they don't seem to want to do that. we don't see any market access moves at all and said these are agreements, the sort of st. well, we have a bunch of domestic problems in common corruption, tax collections. let's work on those. now doug, we're gonna do a real 1st on this show cuz i've never had cardi be on this show. and i wonder, but let's bring a carty be tweet on carty, be rights when you all think they going to announce that we going into a recession. so let me ask you that, ah, when are we? when do you think mr. economic advisor, we're going into a recession. i think the recession talk is, is way overblown. um that though the reality is that the inflation and the hot labor market or the flip side of the same problem, you don't get the inflation without away mark that hot and you don't get a mark that hot was on jerry's inflation. none of that sounds like a recession to me. so ah, yes,

the federal reserve is going to raise rates and slow down the economy. it is val, it's goal is, as you mentioned earlier, to have a soft landing slow growth enough that inflation pressures come down. but remain making forward progress. i'm very have a heart problem that's, that's a hard thing to do. they're doing it in the face of a lot of things that are tough. the tail end of a panoramic, we hope it's, it's, it's path is uncertain. ukraine invasions and the impact on global energy and food markets, a china economy that's really hard to gauge right now, given their public health crisis. i that, that all makes the fence a life much, much harder. and historically, it's been a difficult task when inflation is then above 4 percent of what has been below 5 percent. the fed has never engineer to soft landing, so we're asking them to do something that they haven't historically done without a having the benefit of con conditions. i still think that this year there's not a chance. we have a recession. 2023, maybe to the 2nd half there, heightened recession probability. but the premature chatter i'm recession,

i think is well on let me ask you a question about the hot labor market you just referred to. and i don't, i think that i don't know the aggregate numbers. i don't know what is real in this area, but i do know that there was a period of time as we were stimulating the economy as we had extended unemployment benefits. where the incentive structure for workers changed and we had the so called great resignation, a lot of people leaving. and so as we look at these historically low unemployment figures, i'm just wondering if they're real. where are all these workers that used to be in the system that if somewhat disappeared, do they, do they exist in this country? and what are the implications of that? and is it a function of, you know, basically, ah, style, immigration policy essentially out there? what are the dimensions of the hot labor market that we ought to be focusing on? where did all those workers go? the puzzle of the missing workers is the great can under of this moment. ah,

you know, lots of people are looking at this and we go, it's kind of like cost of like a year round up, the usual explanations we were paying people to not work well that, that went away last labor day. so if that was the problem, it's gone. we haven't seen the workers return. ah, we had people had the care of school. kids and schools were closed or they were worried that might be close. you didn't take a job. you look in the data peep with school age kids stayed at work more and went back faster than other people did. so that doesn't seem like the answer we had to retirement can under might. it turns out that a fairly common thing in the united states, as people retire, they think about it for about 6 months. i think now i'm going back to work. i think of this is the wal mart greeter probably need to stay home for while your board is out, the school work wal mart, big reader. and so you move back into the labor force. no one becomes a greeter and a panoramic right so that that's stopped. but now we've seen that restart, people are now coming back in. so that's not the answer. um, we have some other things out there that i think are real and we don't know how big the are the opium and crisis has really hit prime age workers. united states and

the numbers are substantial and, and frightening. and we have this phenomenon known as long coven, for which there is no definition, but out 30000000 americans report that they have some symptoms that persisted for a long time. and 10 percent of them say they can't work because that's 3000000 people. so maybe there's something there, but they honest truth, steve is, i can't tell you where those workers are. no one can. and, ah, it's a, it's a part of the supply problems because we just don't have the workers out there to produce goods and serves. you know, you know, both sides of the political equation when you were head of sepia which was non partisan and you were an advisor, a senator john mccain. and now the american action for him, you're out there trying to help, you know, all, all parties are there. but i'm just suitors in how you would, you know, judge and grade. i'm republican suggestions right now that are out there. and i often think to myself, what if donald trump for president right now, would the go go economy that we have the cheap money, you know, what would these issues be any different under donald trump?

and i have to say, honestly, i'm not sure they would. so do you see how do you critique the republican response to the president right now? do they need to up their game? i think they have no real answer the question, what would you do about inflation? and the reason is, the things that a congress can do to slow this economy are things that they're not interested in doing that they vanish in raising taxes, which will be one way to slow this down. they, they really don't have a lot of recent track record of budgetary integrity, but they're, they're all, you know, newly um, are converted to the idea which i have control government spending. so they, they wouldn't. so sir, be doing the stimulus so they wouldn't create the problem, but the darn, any real good solutions. in the end, this is the federal reserves problem. the fed should be allowed to deal it to the best of its ability and hands off of that is a good thing for all parties at this point. but as i said before, once you are in

a situation like this, there are no good choices. and so there are no obvious politically easy policies. one part of the discussion today was really focused on what are the blind spots that our policy world has. and if, and if this was one, i'm just interested in terms of the many errors of economic performance. we've had in the united states, what are other like, you know, we have the real estate bubble. we have the subprime crisis. we've, you mentioned a couple of worries about other bubbles here. we have a growing national government debt problem. we also had a bubble in private debt that caused some issues, but i'm just interested without nessie ascribing and saying that these things are out there. what are the other kinds of potential blind spots that are in minutes in an administration might have that you think we should be discussing? so, so this is the analytic error, the by demonstration made on this for session was not in a 20th century recession, which are usually income events and where we developed our tools,

unemployment insurance, discretion tax cuts, sending checks to replace income that was lost in recession. it's also not a 21st century recession, which is larger than financial mark events and dot com bubble bursts, and we have a us, a small recession, get a huge subprime a mortgage problem and financial crisis. we get a big recession. this was the virus and people on able to go spend their money. they couldn't get on a plane, stay in a hotel, go to a show. all that disappeared overnight in 2020, at the peak of this income rose in the aggregate well, throws in the aggregate, all of the capacity the spend was there and people just couldn't go do it. and indeed, if you look in the data, the piece that was missing in the u. s. economy was spending by african americans. they were the ones who typically wouldn't take a fancy vacation or gone to shows on broadway and traveled a lot. and they were doing it, they weren't going out to dinner, they weren't doing any of those things. there was nothing about that problem. they

could be fixed by the things that the ministration did. you send checks to poor people that doesn't like rich people's then you expand the unemployment. sure system they're not employed. the problem they had was one that could only be fixed by a strong public health response that allowed people won't spend. that was it. but they ran a playbook that was inappropriate for the problem they had, and now we had the inflation. and that's it in a nutshell. well, we'll have to leave it there. economists douglas holds iq in former director of the congressional budget office in current president, the american action form. i always benefit in my discussions with you, and i'm sure my viewers did as well. thank you so much. thanks. have. so what's the bottom line? americans were already stressing about their toxic political environment, and now inflation makes things so much worse by shaking folks confidence in their economy as well. many blame rising cost on the war in europe or tack it onto the corona virus. but we can't ignore that. america's leaders, we're happy to have a go go economy with cheap money and super low interest rates from the federal

reserve. america has had cheap, easy to get money for a long time, long before ukraine and long before wu on. as long as americans keep consuming, prices are going to keep going up because the supply is limited out there right now . it will be that way for a while, policy makers are going to have to gut punch that consumption, usually by pushing interest rates up. but if that doesn't work, what happens is a big recession may come and solve the problem. and that's going to be painful with huge job losses and tougher times. the question then will be how jo biden's white house leads. so far we've seen a lot more blame game than leadership and a lot more blind spots than vision. and that's the bottom line. ah, a

ah. safe going home and then international anti corruption excellence award boat. now for your hero lou.