Welcomes the Commentary Magazine Daily Partners today is Wednesday June seconds, one in twenty one. I'm John had words the editor of Commentary magazine with me, as always: executive editor, Remould, hired a jump Senora Christine Rosen High Christine, I John edit or no rough and high Noah. I job and joining us stay for the first time, a nay known to listeners of this part cast as the chairman of the bonds and group whose adds have graced are our are our airwaves here for

For about a year, my my good friend commentary, contributor National Review Contributor National Review, Podcast Gaster with his podcast Weekly Pike S, capital record, David Byrne. Some high David welcome as great to be with you I do want to say that David is one of my arm. I'm just lived. Respondents to the bog in email always has something it thing to say listening day in, and David as people will remember with somebody I turned to every morning as as the pandemic was growing, because his Daily NEWS letter DC today dot com would would do these really great deep dives into the covert numbers after day after day about where they were going, where the surges were what we should make a lot of the of what we were seeing and I was struck

Last night ass, I was going through various. There are three or four different daily trackers of covert who's. The most obvious of the best known one is that is that short. That appears on the front on the on the homepage of the New York Times that shows case number then death numbers and the and a percentage of the two week change so that there's that their Johns Hopkins has a covert tracker and then there's one called world amateurs which tries to get this stuff together. Yesterday, it was really kind of. There was a moment when I looked at Johns Hopkins cover. Tracker am, I said the pending. is really over cuz. It was

it wasn't a weekend. It was the day after we gained it wasn't a Sunday. It wasn't a sorry wasn't memorial day and the covert tracker of Johns Hopkins said that America, yesterday June first, there were fifty six hundred cases, new cases of covered and a hundred and thirty eight deaths, and I thought okay. Well, as we keep saying Anthony fancied, some point said: if we go under ten thousand cases, the pandemic is over it for two hundred and thirty eight desk the pandemic is really over, and now I'm trying to find these other than I went to world amateur and the number were a little higher. They were, whereas cigarette twelve thousand thousand cases and two hundred and something deaths, so that was ready startling. I thought

four hundred and thirteen thousand cases hundred this, but the New York Times had twenty two thousand new cases and about five hundred deaths so as it as a person who makes his living as a numbers cruncher. What do you make of these disparities for one. What are they tell us about what we know about covered in general as we try to follow this number two. What they all do agree on is the trajectory downward is startling and that, if even if they dont quite agree, even the New York Times larger number one is heading inexorably down in a week or two or three so that now her under which, according to Anthony Voucher, we are no longer in the pandemic. I think John. A lot of this has been

A all the way through the pandemic, which is that different states have different methodologies for how the reporting an indifferent agro. Gaiters of the data, which is what you are referring, do have different ways of aggregating it different met, oh for aggregating from different sources of data, and so the best tool that I used throughout was pulling these different. Sources? The M using running averages just to get the general trends, and so to that point, there's no disowned like real, real, clear pandemics is what Europe is. What you're saying of the moment more aware of the problem. The problem is, it is much less now, although that number you cited

at the end, with the larger death number is another example. But last summer I was focusing on what I called the fact states, which was for the Arizona, California, taxes, the amount of backlog, deaths that were being reported in Massachusetts. New Jersey were still doing it heavily into one of this year. There were days that you were getting over fifty per and of the deaths reported from over ninety days. Prior it would have a whole nursing home that apparently had left data in a file for a hundred twenty days or something it has not been. A confidence inducing period time for the way data is apparently aggregated by central authorities in the country, but but the trend is what matters and I would point to a difference. a point which was zero covert deaths in the? U K over the weekend and zero deaths in all of New York City yesterday, with apposite

at rate in New York state at zero point, five, seven percent with I am just going to go out on a limb and say in my world is the same as zero percent, so you basically in the ground, zero carbon in the country have killed, covert, it's gone and, and so the statistics of this, which one is twenty DAS or fifty deaths, and also forth all that. take away. Is that all of it is getting better and is almost entirely better and by any practical, if not technical definition of heard immunity. Has come and been here for a couple of weeks, but I still want to push back on the other, this is new F. One defines the urgency If the pandemic, the way I was always defined, which the fear of over running the hospitals and a massive amount of excess moralities, because we have been so far removed from that for so long. That remains

me. The most egregious policy are right now we're debating of words at zero, zero point one, but we were effectively months ago at a place in which far more normalization could have been achieved. I mean let's let let's discuss, though, will bear because because the yet that great fear from the outset- and I'm talking about April of twenty twenty- that great fear was the dog that didn't bark of the pandemic. I mean even in New York, the epicenter of you know, there's still give the motor mortality rate in Europe

No doubt distance everything last spring and all of that and the emergency rooms were not over run. We were living here. They were setting up tents in central park. They were setting up the Javert Centre, which is now a mass vaccination site as a as a hospital of run, they brought a ship up from from Norfolk a hospital ship to deal with this Andrew Cuomo said we need forty thousand ventilator. Somehow ventilators were constructed and sent to New York, and none of it in the end turned out to be necessary, even in other words the system held. Even with this mass you no explosion of cases and and illnesses. Even then, even then, so I'm not sure what that that tells us because I hear now even from friends of mine candidates, like all we hear that in Manitoba

of they're running out of I see you bet, but somehow it never gets point we're. Somebody says we're out of icy. You bet you Eddie. It's always like, where its aid, percent, you know we're an eighty five percent, I'm sure terrible in Canada. I don't mean to belittle- or you know or downgraded the severity of any of this, but Paul. the story here is that the american Healthcare system held and did not break, and that story has not been told at all. As far as I can tell I'm trying to say real, quick that one of the things that is most unethical about the way the stuff was reported is the very story of hospital bed. capacity and the way I figure it out and I'm not a journalist. But I decided to play one last summer as part of my daily research for the the writing, which you meant.

And in a wanted- and I want to tell you a funny story about that- writing than Bob you in a second, but I picked up the phone and calm the Methodist Centre Hospital. It's a network of aid hospitals in Texas in Houston, where they were reporting in the media every day that they were on the verge of having bodies piled in the emergency rooms and that they had no beds Nicias see is were overwhelmed and I just kept calling the high and getting higher and higher rank people on the phone to eventually I got a call back. from the ceo or the hospital network. Who flat out told me of course, were overrun, is long. We say that the number of beds we have as acts but with one switch. The acts can be doubled because there's a whole lot of other beds and are not right now called I see you beds, the can be reclassified as such. I couldn't understand here in Orange County California, I'm sitting right now. My house in Newport reach their sixty six hundred hospital beds.

And they had about nine hundred, that we're prepped. For I see you when they were saying we were at the danger zone, and I see you, but there were four thousand empty hospital beds, and so all comes down to the known issue whether or not I see you beds, work and be made out of non, I see you beds, which could be done really quite easily and is somewhat part of hospitals. Business model that you don't want to run at fifty percent icy. You could pass the other than obvious humanitarian, and you know human aspect of it. But I'm saying from a kind of resource utilization standpoint, it makes no sense to be a fifty percent to you, so they have a kind of up and down the management of that and the press would report it, knowing that it was untrue.

they didn't have the ability to search that capacity and not just search it with a little bit of gymnastic surgeon. Quite easily: well, I guess this is an interesting question for, for everybody consider I know what I have a running a running dispute over one thing, which is that term. He believes and sweet reason more than I do and say people know this, and then they say it anyway, or they should know that and therefore they said- and I would I would dispute your contention david- that that the people who reporting this more reporting it, knowing that what they were important, was false surface

I worked in and around newsrooms and in journalism for for decades now, and I cannot tell you how ignorant how sloppy and how generally and authoritative people are, particularly when their covering disasters are. Scandals are things like that, the data that where a paper needs to staff opera or is set up and throw a lot of resources at things that means that they have two or three experts on staff who know everything about something where the New York Times for decades have got him. Robert pair knew everything about healthcare, but when you get twenty people on health care, then somebody says we're running out a hospital beds. What you just said which is obvious to anyone who has ever state in a hospital writer has ever been in the hospital they got. They got

We got beds and hallways because they don't have enough beds in rooms. They ve got You know they will, in a machine to measure some extra oxygen capacity into a room. If something going wrong, which effectively turns it into an icy you room without being in the. I see you when you know it's, it's it's in a last think it's like a it's accordion like system where there is, Oh, it's not like a hotel like there is no two hundred percent. You know occupancy, doesn't work that way. People don't know that because they don't know nothing, they know you know us better, has revealed over many years it's amazing how little people now Noah. So that's why I want to ask you here: do you agree?

What David I mean it David saying that he thinks that you know there was a lot of knowing false reporting and worries of gin up hysteria. Whatever do you think that's the case, or do you think that we really should attributed alive this to the fact that amateurs were covering matter, is that they really did member stand. We should allow for a grand said that more logical explanation for human behaviour. The malice, surely, nevertheless as you alluded to, we have. The at the advent of twitter has allowed us to Pekin to their the thought process that goes into the sort of reporting, and you have reporters quite freely admitting their irrational They say that a irrational, but nevertheless compelling fear about things like I'm asking and- and relaxing social distancing guidelines because yeah sure maybe its justified by the statistics, but it makes me feel weird

and that's the sort of thing that leads me to the conclusion that gas David's absolutely correct that there was an average him, nearly public opinion only ever to Munich Nebula. Public opinion was led by public health officials. Admittedly honesty on issues like the necessity of mass and the threshold at which we achieve hurt him unity and whether or not the first, the first dose of the five million of that seems, was sufficient to produce enough unity that we, put off the second. Those that sort of thing was, admittedly done in the effort to achieve a political outcome was not based on data, as we understand it, or a dispassionate reading of public health guidelines but you know, bring us to the outcome. That was desirable. It was a noble lie and if admitted the noble lies, and if reporters were taking their cue from yet

for its particular. This is something that was word brought up. Reporters we're taking the Jews from these experts in their fields, who they don't expect them to manipulate that they don't expect to be listened to by their sources in the world of science and medicine, quite unlike, for example, in politics than their their cars would have been downloading, isn't there would have been producing these? What the public health bureaucracy wanted them to say. So is it prickly, understandable outcome. Even not necessarily malicious. It is rooted in a noble objective, but the means I wish it was achieved were biology.

nefarious. Do you fucking? Let me just ask you this: do you think that if the pandemic had taken place in twenty nineteen or twenty? In other words, if it hadn't taken place in an election year that the coverage would have had a different ten shares, what I mean, I'm just gonna call you from MSNBC Sorry Melbourne, who defended the media yesterday for dismissing the covered, lab leaks,

quote if the chief and loudest advocate for something is a race. Bathing wire lies all the time. You can understand why people don't want to get near that now. Granted people thought that Trump was a race baiting liar long before the election year, but the fact that we were being simultaneously dealing with a pandemic and an effort to cast the presidency itself as a villain in in the pandemic, that that lead to a greater degree of this kind of of these I didn't distortions only marginally, because you know you allude to trumpet villain before it was elected. You know, Does he really was a villain since since then the twenty sixteen campaign season and never cease being one?

to the same people? I mean the weird the weird thing, but our members statement, I think he said I don't recall Trump being the foremost proponent of the lovely theory, actually I recall him through. You know dumping on China and in broad vague terms throughout interspersed with also praising China's job. So I don't. I don't know that that that holds ethics of ethics, a pretty poorest fence there with regarding v the question of malice or ignorance. on the hospital data and associated issues. I very much go from malice here, because I will never forget the way at this very same time when cases were peeking in New York, the sort of on the fifteen minutes every fifteen minutes checking in

at hospitals, with love cameras to wait to await the more trucks. You know. salivating to be able to bring together the the worst disturbing take on, And I would also say it wasn't always. The noble line was sometimes quite ignoble, because a lot of this is the point of it was to prove to people how ill prepared

America is generally the Trump administration, specifically how they ve been failed. I figure was there was a lot of negative propaganda involved and all of it, you don't Christine. This is an important point, because I just looked at this number. There was in fact one hospital in in New York City that had a problem with an overflow. There was one the Elmhurst Hospital in Queens, where we famously there were famously refrigerated trucks outside that were being used. There are two hundred and fourteen hospitals, working hospitals in New York City, two hundred and fourteen

one hospital where and it's a small hospital- and it's not a very good spittle, and all that one out of two hundred and fourteen is not the overrun of an entire system, and I get back to this point, which is there is a longer narrative here about the american healthcare system. It's a complicated, long term narrative. The american healthcare system triumphed over covered in it. How everyone a slice it for, while we had enough capacity, we have enough treatment. We learned quickly that the initial treatments that were being used, which largely involve ventilators, was work. What was a mistake and it was basically largely abandoned people's private lives too soon and actually killed them. when that was an honest mistake literally announced for mistake, because this is how you treat the kind of one Christ

the people were undergoing and then, of course you have, if you want to put that if you want to put drug drug development, drug treat, drug drug drug testing and all that into the system. Of course, we have the greatest triumph really of our time, which was development of the of the vaccines in you know in nine months the development of them under the vaccines in nine months time- and nobody is talking about this- nobody is looking at this insane oh, my god. Yet you know where this wasn't the case now great granted, a England has a national healthcare system so and the UK has triumphed over covered. So this is not yet look at this positive case, but no one saying but we did pretty well, we did pretty well. We have the greatest drug company system in Europe, a series of drug companies and in the world we have kept them going as we do not nationalized pricing that we do not have yet. We do not limit their capacity to

research and development. All that and look where we are look what happened here, Millions more could have died and they didn't but known as saying that, all that I can it speaks for a larger point night, and I agree with David, enable more cynical, but I think more accurate taken on the media's role here, because a sign of a healthy, democracy is one that can have open civic debates about important and complicated issues, and unfortunately, in this case the I think, the narrative that the mainstream media, in particular promoted, suited political things that we note, the majority of the mainstream media shares and also rely quite heavily on Americans, broad statistical, ignorance right, our inability to understand? What numbers me and I'm sure David can is very well. We would see frightening statistics about hospital beds, but with no com

tax the role of the media in telling these stories is to provide some context, some neutral context. All of those story should have said normal. I see you capacity is kept at seventy five to eighty percent. For economic reasons. Most people would understand what that meant than they could observe the statistical information they were getting and the fear mongering that was that was the intention of a lot of these pieces would have been abated. I think we see this as well in the weird reckoning that mainstream media outlets, like the Washington Post or doing with regard to the origins of the covert virus, they're going back and changing headlines that criticized people like Senator Tom Cotton, who spoke out early about the possibility of last week. So that is very concerning, because when we have a situation where the media claims to be

bring me a couple of itself for having missed some important part of a very large global story, but there may a copper is just to tweak headliner too and say asked my bad. No, it's very bad, because Americans, mistrust and media is already at an all time high and if we can look to sort of mainstreaming,

Tell us what these numbers mean, then we're going to be in trouble down the line with another crisis, so guys. Let me just quickly talk to you about the Ex cherry, for me. Talk about it that that luxury supercar of of of office chairs, you get your. You got your patented X, Hmc technology that brings heat and massage therapy to your core keeps you keep seagoing keeps you that keeps you feeling great, as you said, and the dynamic variable lumbar support. That means you get that important. Lumbar support for your lower back. You've heard me talk about it. I got it at home and change my life. I no longer sit at a horrible desk chair that that that gives me a pain. You really really got to take your take your cues from this chair and take a take, a good feel and and and see what you can see what

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slaughterhouses and processing plants that is now threatening to vastly increase the price of of of beef and There's a piece of the Washington Post about what they call shrink fallacious, which is the act of new forms. Packaging of of foods and But where are the price remains sympathy amount of good in any given package is reduced by ten or fifteen percent, thus making it out by ounce more expensive, even though the outlay at the

supermarket or wherever you're buying, it remains constant. You just will run out of things more and have to buy more of them and that's basically a different structure for inflation, so we'd out, we did a wholesale last week about the threat posed by the by the Biden. The six trillion dollar Biden budget fantasy by David Byrne, said a man with that and as we as we said many times, I nearly three billion dollars under management for your management firm. So your man, we make interest in inflation and what it will mean for your club. and is not an academic Nor is it simply the kind of question of the way which inflation functions as a regressive tax on unconscious Or so the poor, you are the more inflation bite you

here too. We are talking here about a global question of where you don't wear. Equities are gonna, be we're bonds or do they? All of that, and you have a kind of to live. Take on the threat. Inflation would love to hear you, you know of expand on it. It's interesting that it is counter intuitive and- and I agree with you that it is certainly a country in the current moment, right now, but I dont know why its counter intuitive when every bit of- overwhelming evidence of the last forty years indicates that over indebtedness from sovereign developed. Governments is deflationary. So if we had not lived through the post financial- crisis period in America. Where the conservative was predicting ass of devaluation of the dollar and hyperinflation, because a quantitative easing only to have that

Oh up in their face and, more importantly, hadn't lived through Japan through forty years I'm not a hundred and twenty percent debt to GDP, but two hundred and fifty percent debt to GDP, where they couldn't create inflation. If their life depended which to the Bank of Japan and more or less has so, I do believe that its current curative, but I dont think its current outta because of the weight of history. I think that that when you talk about price, Is going up to bring up this? This God awful cyber attack on the meat plants and that can result short term disruptions to prices. That is a price increase. That is bad debt This should be dealt with for a whole lot of reasons, not least to which I suspect, ran somewhere. Cyber attacks are about to become the geopolitical national.

carry story of our lifetime. However, it is not inflation in a monetary sense. If you believe inflation is too much money chasing too few goods and services is ideal The fact of the matter is that everybody involved in this story wants to create inflation. Inflation is attacks on poor and they don't care and they would inflate away their debt and action spending in a minute. If they could, the issue is not whether or not they want inflation. And by that I mean politicians, legislators and particular central bankers, the issue, have another able to create it. When you get the absolute Kuwait, in velocity of money in law. We demand that excessive Government indebtedness creates because appalling future growth into the present. That's the economics,

all of our time and as a political conservative. I think republic are going to have this thing blow up in their face when you get print after print showing non inflationary conditions a year from now, after every single auction by predicting hyperinflation but in the end, then I'll be quietly. Let everyone else. The other thing I'll say John, is this thing is not tailor made for a discussion like, just like the one that people like all of us can have here together. It's not good for soundbites began. As there is a negative problem that needs to be dealt with in price inflation of housing, but its government policy process one zoning, environmental restrictions so forth, and so on. Not a monetary inflation issue we're getting this backwards, and I think it's gonna happen a great political risk. So does this one

things that was puzzling were initially puzzling to those of us who were not economists but know something about. You know that the history of inflation, politically the history of inflation over the particularly in the twenties country was the fact that the Biden Budget proposal featured this rather astonishing projection a very low, relatively low growth over the course of the next decade. Despite all this spending that they wanted to do, and of course we do not. We have been told that government spending now has an inflationary but also the least it must at least be a kind of sugar high, though that that suddenly money floods into the market from the government in a kind of Willy nilly fashion just overwhelms things. There should at least be real growth, even if it's not

annex if it serves created simply by by the kind of just flow of dollars and yet no wrote about this yesterday, Paul Krugman, saying yeah there under promising that they won over deliverance, totally five years. So they say, there's gonna be basically two percent growth for the next decade. Just like there was pretty much in the previous decade. is that a concession to the reality that you yourself are laying out here that the concession to reality is that they know full well that, rather than what we have been but which, as you know, Weimar Germany runs the printing presses and people are papering, their walls with Deutsche marks in nineteen. Twenty six is it's a trillion deutsch barks to the dollar, whatever the hell, it was an

and here we are now that, in fact, that this is a deflationary and not inflationary spirals that to the binding economists know that as this concession to that or while let s start with the Krugman point. Have you ever in your life met a politician who is in the business of under promising in over delivery and doing so consciously I mean it's most ridiculous thing, I've ever heard they're gonna deliver on their growth projections in that report. And so the question is: is it a concern? and what it is is being loved. By reality. You have thirteen years of some trendline real economic growth, it's a glow, more and domestic condition, and there there's, no way anyone with a straight face to come out and put a three handover for handle on real economic gdp growth forward, looking on The sugar high or the multiplier effect of the current spending is not even supposed to be keynesian.

Which is why, by the way they did to their credit, used the word relief more than stimulus on round number three quite a bit because they are. You did along humanitarian lines and I would argue it was not humanitarian and in fact Pierre to be one of the biggest backfires, policy that I'm observe, which is this. The unemployment subsidy is really in a lot of ways should thus far the biggest misfire the by demonstration. You can but they're not going to growth really in the region are not going to get us for all the reasons. I've said and no president is going to get it because we have spent too much of tomorrow's growth already an end that ability to have a sort of Reagan like output explosion is impossible disappoint, and so I thought whether their budgeting on two percent or two and a half per cent. They know it in their heart of hearts and they will be very lucky to get something in there.

By one's on ago, former basis that the high ones keeps the world turning Something's below that gets into significant japanese disinflation right. So let's say that all the inflationary red flags that we're seeing now disappear in a year's time they're here today, consumer prices rose in April by four percent little over four percent politicians Responding to these signals with the trepidation that is appropriate, given the instability, anxiety and political backlash that could follow functionally, That's an indistinct from whether or not we're seeing read the actual inflation that persists in the next year. Five years, ten years That will necessitate some sort of a river of recession in order to bring things back or higher taxes in order to peril this all this money in the economy. Back. So what's the deal, the phone,

No distinction between real inflation and signals have inflation that politicians responded with, perhaps a little more elaborately than is due, while the cyclical and secular inflation feel the same in the cycle. I agree with you and I and arguing that we're not facing sexual inflation, but there will be components of cyclical inflation and what com hence the subject is a lot of what we term of the four percent sepia I the basis Act is a real condition and the supply chain problems are real condition. So therefore, not monitor inflation, but it feels the same to consumer. However, the very important too ancient is wrong about three dollar gas, which is a lot more. And to our gas of a year ago, except for we had three hour again and she doesn't nineteen, two dozen eighteen, two dozen sixteen fifteen and we had five dollar gas from two dozen tended to doesn't thirteen there's, no those things inflation- that is forty percent lower the price level of ten years ago-

opera prices, are just now back to two thousand fourteen, but their thirty. sent higher than they were a year ago. So I think that there are components of sickle price inflation that are damaging to consumer MIKE Meyer. My point is trying to say a political points with it by dumping it on binding is a danger for Republicans, because its highly likely to prove transitory okay. So the argument that was made in two thousand and nine as you point out that there is a trillion dollars in stimulus that a did not have much effect And be the conservative said to two things: one was we are The fact is: opening the spigot, its acuity, its printing money and were, and- and the government has just passed, the largest single sky

bill in american history. Now it seems almost quaint to say that a trillion dollars Beneke bill was like beyond all believe more than anything we ve ever seen before, it is, of course, that open the Overton Window and now we're talking, we bench, we talk about two trillion boy bills as other nothing, but so there is a truly our bill and key to and and nothing much tappitt, not that's good, was one, and so there were. These two separate arguments made one John Tailor made in the pages of commentary tailored Coggan said it was incredibly badly structure because it was structure to go to states, states all have balanced budget amendments, and so the money that was sent to the states for keynesian stimulus actually had to go to pay down budget deficits that wasn't used to dig holes

the ground, and so it was inefficient and didn't do what it what was promised. That was number one number two was: oh, my God here comes inflation, cuz, we're crowding out public private sector lending with the public sector. Spending and Qe2 is printing money, and all of that, and then that didn't happen. The argument was, you know, maybe this the whole that was done by the two thousand and eight financial crisis. was so deep that you poured all this money into it and it basically

didn't even filled the whole. I mean you know that it was much worse than we realise. Things were much worse than we realised and the deflationary effects of what happened in two thousand, it was impossible to challenge, was impossible to fix, but you're saying that the mere acts of this kind of government approach top down government approach to fixing the economy as a result of this kind of crisis itself is deflationary. Can you explain yes, how that is because, of course, once you say it, and then you think about Japan right, which was the leading economy in the world having the side from Mars. But I mean it was the China of the nineteen eighties Reverend Japan was The verge of eating our lunch by buying or real estate was buying or movie studios, Japan, Japan, Japan and then they hit their secular stagnation in ninety ninety and its

one years later and eight out of it and there never gonna come out of it. The hours there were painted Japan is exactly what played out Post America's housing bubble. Was it how bubbles asset bubbles that burst are always followed? I'd deflationary impact, but to treat the deflation it's a scam. here, the dog component, and I as you know, John, I don't drink anymore, but I have heard times when someone drink too much the night before and drink so little in the morning, they can feel better. I can't confirm or deny this, but I've heard it it's a hair of a dog government policy. Ok, where they, treat the problem with more of it? And yet the problem is as every abusive drinker finds out. Eventually, you had a point where it doesnt work anymore and the real quality is that you can only lower rate so much to stimulate on the monetary side and certainly

as even keens would say, you hit a point at which you don't get it the effect on stimulative government spending, so excessive government debt cakes growth, to the present and then leaves you without the tools into the future, but but on an America's economy. The households after all how our financial crises have to deliver, so that was a substantial Joey deflationary impact as debt was reduced and assets were liquidated, but they treated it with corporate real averaging. that's. The good news is a kind of worked private debt middle markets You want a private equity. from a formation the lead. You got a problem. Give economic activity, and it was enough to try to keep the wheels turning, but now here's the problem- company,

it's not worth three times: debt to even da are now at five times that even die, so they can they borrow more. But those were dim borrowers, data, productive use for the money they can borrow at three percent. get a return on equity at ten percent. You like that trade, but for now, fully lever they're up at five times so who's gonna create alone demanded now, and you can't get new money in and searches without more borrowing. That's what I think. Most people don't understand, living bar comes from people depositing money in a bank there's no new. They created only deposit money. There's no new. He created when the fan puts excess reserves on bank balance sheets money gets created from and demand and there's no loan demand when there's no good borrowers, that's what we're up against and that's the default generic spiral of excessive indebtedness. But what we hear and again we hear it from the media and we just spent twenty minutes bashing the media. So we can do it again

The year Biden even say yesterday about black entrepreneurship. There's lots of entrepreneurs they get. You know he said this in his speech and Tulsa, but they did they go I have lawyers and they don't have bankers and they can't borrow money and we keep hearing that like hard to borrow money when you're, we know an entrepreneur in America now because it all being crowded out by I didn't. I didn't know what exactly the the logic of it is. What what you're saying is that. you said, there are no good borrowers. What does that mean that there are no with borrow at size? like. If one of us goes and buys a house there- and we have the income to support it. Then that's good borrower, there's plenty of appetite for home borrowing but generally on the margin that doesn't move the needle much for someone might be selling a million dollar house to buy a one point: two million house there, just so putting a little more debt on their balance sheets, real signal

get movement of my money. Supply comes from corporate reflation corporate borrowing and bring up when they ve already lever that their debt. Issues are already at the upper end. They have record amounts of cash on the balance sheet because they don't want to go put more debt on and they don't have enough good projects to invest in I talk all the time about, most embarrassing. Things in the tube twenty one american economy is that Amazon is still the size than it is but I dont mean that in the temperate Karlsson or Elizabeth Warren kind away, I mean this is a ninety ninety, seven company. They talk about like a school tack and new tack and big tat. This is a twenty five year old company, it should be a dinosaur by now, but we don't have the new innovations, new products, new projects, new capital expenditures, whether soft

or indeed hardline d, that there isn't enough demand to go produce and that's why we want a decade of sub two percent: real GDP growth. Ok, can I ask you a question then about something else that was dead? the news, and I feel like I'm hugging, the might from Christine and a fair

Well, let me just now we want we invited you onto hard to make tat is true. Ok, so let me ask you there, so we ve been reading about this astonishing semi conductor, shortage that and if you actually think about it, the potential consequences of a gears, one semiconductor shortage, given the role of semi conductors now in, like almost every single consumer product that you can possibly be by that, isn't a stuffed animals that that doesn't talk, stuffed animals talk now have a semi conductor in them. You know is really astonishing, so you would think when you hear about this, hey the semi. Shortage. Intel is two hundred billion dollar company, or some like that, build find more semi such or factories. Why is

the problem where, where does something like that? You know it's sort of like the discussion that we were having about the vaccines and and and the the whole question of the the vaccines and their the patents, which is don't give the Pat other companies like five hundred and eighty billion dollar company? Let them build more they know how to build these, so let them build these facilities in order to create more vaccine dearly. You can let go do enough to scale as fast as possible with the safety concerns, where considering this whole other method is crazy, but as with the semi conductors, why is it going to be a three year lag before they can make more? You know if there's a shortage, I'm this where I missing a beat somewhere while that about another. Now g that has a pretty prominent place in Africa as with oil rigs, as we had about seven hundred rags and they brought it down to below two hundred cause of the supply

an conditions of co bed and now to get the rigs back, cap is demand aspiring up again their back to about three hundred now, sir, we're still less than fifty percent of where we were. But I think there is this idea: and then oil rigs work like a light switch in, and it isn't so simple and there's a lot of complexity. It goes getting a ring back on line the semiconductor thing wrap relatively new. We ve gone to the rig lag. in that, in the past my own belief is that those issues get solved the problem that created there is an incredible economic incentive right now for in Togo, a twenty billion dollars in real couple: new manufacturing plants in Arizona New Mexico to make other people semi conductor, chaps that it's not going to be the IP of entails revenue model, it's gonna be just purely the manufacturing component, so you will get.

Gotta players and that in this case they will outperform expectations. It will not be three years but a lot of money. We talked about in the four percent c p I move before was in in autos I think the number would have gone to two point: eight percent, if it were works, auto and that's entirely related to the semi conductor issue, and so term stands out of something can continue along this can continue, but it's it's an embarrassment. then it was allowed to happen to begin with, and I think it speaks to deficiencies in the way America Supply chain has been constructed, question for David about this. Actually, because there's that there's a political issue here that we see right now, it's a bit on the margins unless you're in the area, where the advocacy is very high, particular environmental advocacy. But do you see the Bite administration strikes me as being very amenable to using this moment of recovery. As a way to inject ideology

the policy making into industries that I am glad you brought up oil rigs that might economically benefit I'm being left alone to to respond to new, demanded research, resurgent demand, but in fact, are gonna end up being hobbled down the line by a kind of political decision making about policies that that might actively harmless economically, but would satisfy an ideological wing at a party. When do you think about Why did I definitely think? There's gonna be some of that with the bark. The question is: how much of their that there will be with the bite and and this was really consistent feature of the Obama administration was job owning things, they were actually not doing anything to hurt behind the scenes and the fracturing industry the latest example. There was really almost no way they could have been friendlier nerve in the Obama mission. Other than LAO permits on federal land, which was a bridge too far, but the truth is that the even with the bite initiation so far, Chevron Enough

honor both up about sixty seventy percent in stock prices, Biden was elected for the very reason that they know whatever he does. Regulatory wise is likely to hurt small players and not big players. The most trump thing Biden could do, is to use this moment to celebrate on shoring domestic production and and provide big tax breaks taxes tended to companies. They can go move a lot of their production to Vietnam are Mexico, because the IP is not there to do it. It would take too long where they can do it, is in the? U S, it still wouldn't be smooth uneasy, but for whatever reason the bite administration doesn't seem to see a populist opportunity here, which I think there is one polluter. way. But I believed us far. It's been really intellectually gets a frantic in terms of how the by demonstration is for trade. Some of these things. So you definitely a right. You get these moments where looks like their portraying some sort of

she'll gender. What have you and yet, when it comes down to the actual policy teeth, Even in the regulatory side, I haven't seen a lot of it, yet that is actually been substantive. I do think that one of the strangest lines I've heard thus far was his line yesterday, the John and it wasn't about bank lending, though it will heed said. Black entrepreneurs can't find accountants and attorneys in that is, would be news to every african american entrepreneur. I've ever met a shockingly infantilism taken on the adult African Americans astound, but I shall I ever had another question. David related, something you said, you imagine that we make expect any sort of explosive boom in there in the near future, and I'm just wondering about, and the service

I should self there's a kind of desperation I think baked into it, but nevertheless, what about the possibility of a complete the sort of unforeseen technology? that isn't about building on, we have been building up to some extent, but isn't about sending you know the superconductors or or something else you know, sort of something that you serve swoop, in from left field, as things have in the past that for tens something resembling a boom what those things that could create a bill, meaning unleashing of economic productivity, are also deflation. And so I fracturing I do a significant in the supply of oil and natural gas, natural gas prices went from fifteen dollars to two dollars and anything related to productivity. Enhancement of the technology sphere is DIS inflationary, which is why,

a are used to cost eight hundred dollars, and now you know where were Do you understand what tat is done? There are really significant DIS inflationary, oh forces from some things that enhance productivity. One creates inflation at a productivity as if the a velocity of money were to turn up and that's the problem. Right now is that there is no precedent in human history for violence, a key going higher when debt is growing, you wouldn't, the budget deficit to be lower than the rate of nominal GDP growth. This is this is basically algebraic and I find that in comprehensible at this point that there is any Politician by the way, I should say that this is really not fair to either Democrats or Republicans, there. I don't think there any american people that have the will for them.

should be nominal GDP growth in excess of budget deficits of the rate of budget deficit growth, and that is what an compressors velocity, which keeps deflation low. Now demographics, Yahoo, overall demography story has weighed on deflation. Certainly, globalization did certainly technology did and of those forces, can move in different directions and the? U S, Japan, or he is not going to be identical. It's gonna rhyme, but not repeat, but I do believe that the over all he economic principle that I'm talking about, which is that excessive indebtedness, ways on future meaning for those who define growth and wealth. The way that I do- and I presume you do- that we will not Have the goods and services produced an economy to soak up that access that that money supply that there will not be that

that realm. That would then make up a naval turnover of money and velocity that creates inflation. Girl, just wanna shift hop. It's just just a complete this session, because I have a little thing I want to share. I want some aid to observe response, to it. There is a gap in the first big in person. Debate in the work may always you're near me, always takes place two weeks from three weeks from yesterday The primary it's complicated primary, its rank choice, voting, which means we because of the complication at you. You pick five people in order and at the point at which somebody it's the fifty percent in this round. Robin counting will become the nominee and the Democratic Assembly will then essentially November become the the next May of New York City

Here's why here's with of interest? So there are three leading candidates and then there's a bunch of other candidates and the three living candidates. Gang Erika, Andrea Eric atoms and the coal Garcia. Cassandra's. Excuse me: Yang and atoms are sort of running as moderates Garcia running as it can do. You know that knows how to do things politician and then there's two very far left candidates. Otherwise work as some kind of things are happening. Emerson did a pole, Voters in New York City last week- and it has an incredibly interesting statistic- that people haven't quite made the measure of asking people what the most important issue is facing: New York City, a twenty percent said: public safety, meaning crime, sixteen or fifteen percent that housing and twelve percent said homelessness and then

breast is divided. You know ten ten thousand different ways to my mind, if actually look at those three categories there. a species of the same condition, Arguably you can take housing out, but our homelessness is a public safety issue. It is on a humanitarian issue, people who say the homeless. This is the worst problem facing. The city are not saying so because what feeling a sorrow because their people lying on the streets there things up they feel unsafe and menaced and harassed by people on the streets and crime is crime. You Adam together, get thirty one percent. I would argue that housing when people say there are about by housing. Generally speaking, we concern about pricing of housing and where they can get apartments law that for a lot of those, people. Housing is a public safety issue, particularly people who live in housing projects, of whom there are hundreds of thousands in the city who are living in play

there are increasingly unsafe. So I think you could argue that where, between thirty and forty percent of Yorkers, are saying that crime and public safety is their number one issue. I think that's entirely true, I think you're the interesting thing about it is that, because you have those different categories depending on what you want to say, you can talk about it as A law and order issue, or as some mental health issue which which it is but but those Going in one direction or the other serve, gives a very different gloss on the on the on the topic and Orient soon very different place, the quite so. The question is how many new Yorkers are sort of fed up with the sense

of looming menace on through every block in midtown, which is which is, I think, a reality now or how many of them are sort of looking at the homeless, wandering around not foremost as a potential threat, but as evidence of the failure, the care taking state I mean I I wouldn't. I would love to think in some ways that people you now have the capacity in some sense deserved divide all this up and think about it and complicated please. I think what what these numbers indicate is that the is that the twenty two This is not that interesting to be lots of York City, but it should be because that I'm making a more general case the live ability, of american cities is now becoming a political issue exactly the way it wasn't. The nineteen seventies this pole and this these data and the fact

The gang of Atoms gang who was running as the moderate and the race and Adams was running kind of falsely by the way as up as a tough former cop, because he was a cop was mantle cop. When he was a cop that would says he was a cop who hated the police department. that's what he did in the ninety nine. These nonetheless he's like walking around like a cop. The way John Kerry walked round like he was the greatest soldier in the world, but he was somebody who thrones metals away right. this is a boy to the woke left. They are losing their they're, losing the battle for the hearts and souls of of of the blue states by the results of those policies that they are putting in place. I believe- and my AIDS can be interested to see how these politicians and would be politicians act.

Act upon this data to many of the candidates. Already two invested, like the Democrats and twenty nineteen and twenty twenty in their walk, far left narratives to shift gears. The bullet yeah just to the southern, have seen that a lot of those with pro defined people be they have caught wind. The public sector with John you're describing cities now and there are there- are very vigorously trying to make the case that the rising crime doesn't really have anything to do with anti police sentiment with defined movement. You seek The combination of everyone went crazy from the pandemic and survive a general kind of like

you know crazy year that no one can construct rather has rounded and control, and that, if you look at the statistics, you'll see that violent crime, rose in places where there was no change and policing, as well as in places where there was so. You can't pinpointed too that good luck I mean I I tend to wane. I tend to be on your side. I think most people in cities view this as a general aid is a real problem with law enforcement nothing in the end, one has to hope that this is the case because of its not then everything that we understand about what people expect from government is now. Thrown out the window and skewed beyond belief if the if the purpose of local government is not, first and foremost, to make sure that you don't feel like you can't let your kids out of the apartment, because they're either going to get shot by a stray

when or or that your grandmother's gonna walk down the street and get punished in the face by by a homeless. Criminal That is not what government is for and government is that actually literally there to serve you know redistributing income or something like that, then what we know about what self governance is about. has really undergone the kind of change that the left really wants to be the case. I believe that is true, but I will see when we see what the nerves of election tells us about, that. With that David Bonds, and thank you so much now. You know why he is the antidote to the intellectuals, weary of the financial services industry at four April. Still, no one jump upwards. Keep the cavalry!