TARIFFS AND THE ECONOMY REVISITED (Transcript)

Hello, Bob Barney again with Plain Truth Today. And we’ve been talking in the last few weeks, last few months about the effects of the tariffs, if there’s going to be an effect of tariffs. And of course, that’s the most ridiculous thing I’ve ever heard. When people get on TV, and they say that there’s not going to be an inflation when you have a 15, 20, 25% tariff or 100% percent tariff on this country or maybe a 50% on this

10:27Country, I mean, I just don’t understand these experts and I kept and I have said over and over and over again Don’t believe people that are snake oil salesmen on these business shows or reporters in general because they want you to keep buying stock They want you to think everything’s great because they make money off this kind of stuff. But the thing is if you are in business or you have your mind to look at the real news and have a brain to realize that anything that makes the price of business go up cost money to somebody. There’s not enough money for companies

11:07to keep absorbing tariffs. And even if that’s the case, you’re taking that money away from the stockholders who are mainly American. None of this makes sense. This is bad business news.

11:19This is bad business ideas. This is not sound capitalism. And I mean real capitalism. I’m not talking about corporatism where we give big companies and monopolies welfare with government tax breaks. I’m talking about 60% of the businesses in America are small businesses and they really compete against each other and they have very slim margins. So what I wanted to play today,

11:47because I think it’s kind of unique, is I keep saying in these shows, look at the numbers, look down into the records and see what is else going on that maybe, just maybe, is telling you that everything is not going great like

12:06the Trump administration and everyone else on TV is trying to tell you right now. I’m gonna play a few like I did the other day I’m gonna play a few outtakes from different programs that you know doesn’t make the morning program when all the people watch before they go to work this was during the day I caught it I backed it up and I taped it so we can play it and talk about it.

12:28But listen to some of the real numbers about tariffs and stuff that’s being said. This is again from Squawk Box at the nine o’clock hour. Yeah, no, I’m sorry. It was like quarter to nine the other day.

42:43Yesterday’s headlines, just modestly higher inflation from tariffs. quarter to nine the other day. is good and then I want to ask you what it would really take. For the Fed, the lack of a more alarming acceleration in price pressures likely removes an obstacle to lowering rates in response to worries about the labor market.

13:16This is Joe Kernan. He’s so far up Trump’s butt when it comes to promoting that these tariffs don’t cause an increase in cost of goods sold. And also, he believes the economy is great. He believes that everybody is doing really well, except people who are lazy. That’s basically his, if you listen to him long enough, and I like Joe Kernan, I listened to him for many years now, but this is his take, because these people are so far away from the reality of the middle-class

13:47Americans because they’re being paid millions of dollars a year. They have no concept what it is to be struggling from paycheck to paycheck. And I can give them to you right now that middle stream, mainstream America is not doing great right now, like Donald Trump says or he wants to say and you’re gonna hear some statistics now That you’re basically not here

44:18What would be For core What would be the size of the number for core?

94:253-5?

24:26I think it’s kind of like, there’s been two criteria, Joe. How much is coming through and is it bleeding into other areas? And those have been the keys.

134:36You’re expecting 3-5?

24:37It’s not out of the question. Guys, let’s just skip the first part of this and go right to the first graphic.

44:43Uh-oh.

24:44We’re just going to…

54:45Oh, alright.

44:46Because this is…

94:47So we’re talking…

124:48PPI’s coming today, is it?

24:49PPI’s tomorrow.

124:50Oh, tomorrow.

24:51Okay. So… That’s right. You look inside the report.

14:55These are things, Joe, what we did8. I’m sorry, that broke up. 4.8 for tools and hardware. So we’re talking about six months worth of inflation. Women’s clothes up 10%. Tools and hardware up 5%.

25:15You see toys and games, these are things that normally would be going down or flat or were offsets to it. And that’s really a key, guys, if you move on here, we’re doing this live here. Another way to see the change though

25:27is from the prior declining trend. Mike Konzel from the Roosevelt Institute found some stark reversals. Take a look here. Tools and appliance categories was heading down. That’s the trend line, the dotted line there,

25:39before the reversal that likely is linked to tariffs. Similar pattern in home furnishings and dozens of other products that are mostly imported. The trend line was down and you can see the current line is up. Cons of found that 52% of 82 items in the core basket are up more than 3%.

25:55That was a sign of persistent inflation in the pandemic. Scott Lincecum from the Cato Institute tells me, quote, the big question is whether we’re starting to see it move into the service inflation and auto repair could be a sign of that how long margins could hold before they pass on the tariff at the same time sort of talking about what Joe’s talking about those who see benign tariff outcomes have been proven correct

26:16in several respects some prices are falling perhaps the reaction to other things being more expensive that’s that relative price that we’ve been talking about acting as an offset to the tariffs. And tariffs may not be sufficient in and of themselves to overcome these other offsets. Take a look at yesterday’s CPI.

26:33Energy was down 1.1, so that’s a big offset. Food at home, down 0.1. Core commodities, though, were up, that’s where it really was modest, but the surprise was that core services up zero four So the stock market trades like it’s game over in this debate between saying it ain’t gonna ever happen And then it’s warning just you wait the better ladder see overtime to this game

26:55Yeah in August and the inflation reports, I think that answers your question when you talk about it

46:59Oh, yeah, you know that the consensus has gone from oh, it’s gonna be terrible in place And to now people think that we know that it’s not going to.

117:06Can I ask you one question?

17:08And that’s just simply not the case. We do not know yet how bad inflation is going to be and stagflation. Now inflation will lower itself somewhat if we go into a recession, which I really think we’re already in a recession. The GDP doesn’t prove that. It did the first quarter of the year, it was negative,

17:30but the last quarter was quite well positive, they claim. But I think that has more to do with big business reporting than it has to do with the little guy in the street. But anyway, we’ll have to see that. But my point is, even if we go into a recession, as long as you keep tariffs, and there are so many things we just do not manufacture in America, as long as you keep tariffs, you’re

17:54going to continue having a high price, even in a recession. Usually in a recession, I want to just explain this to people who may not know this, prices come down called deflation because companies are saddled with a lot of products and they’re selling them off even at a loss to get cash because they need cash to keep going or they got to start laying off people and they have to start shrinking their company. But if there is what’s called stagflation which we had in the 1970s,

18:25and we thought we were gonna have with Joe Biden, but we did not, we did not. We had bad inflation, but it did have what was called a demand destruction of the economy, and the economy slowed down to a recession.

18:38And the last two years, in my opinion, the last two years of the Biden administration was a pure United States, America, and my opinion, the last two years of the Biden administration was a pure United States, America and worldwide depression, recession, however you want to say it. You know, Ronald Reagan said, depression is when you’re out of work and a recession when your neighbor’s out of work, very little difference. But the idea that these tariffs, this kind of tariffs have not been tried since the 1930s.

19:09And all one has to do is go back to the 1930s and find out just how bad that happened to be because it caused World War II.

49:24This is the perfect world that I wish… I wish there was some chance that it was true.

109:28What’s that?

49:30You know how Trump always says that we’re collecting money from foreign countries and we already know that it’s… It’s people that imported here…

99:39I haven’t answered.

49:40No, no, but my question is… Let’s say that there are countries That it’s so important that they continue to export to us that they really have eaten the lion’s share

89:52Yeah

49:53the tariffs in their prices So you actually could say that they’re the ones that are losing out and actually paying for the tariff Right money not true here at least a part of that could be true.

210:06It could be 10%, could be 50%.

710:09But the golden sack says it’s 60%.

510:11Think about it.

210:12No, no, no, that was also including the wholesalers and the retailers as well. Here, and corporations.

110:18Meaning American corporations.

410:20Wouldn’t it be great?

610:20It would be great.

210:21What a wonderful world it would be. I’m gonna give you two answers to that question. The first one is why I like my job so much. Because you know what, tomorrow is not only PPI, I think it’s tomorrow, we’re going to get import prices. When did you ever get excited about import prices? I’m excited about it because the import prices will answer that question.

210:39If import prices were not falling. They were kind of flat. Which is crazy. It shows that they’re not absorbing it overseas. If it was…

410:50But the dollar has been weak too.

210:52You have a currency. The other thing is you know we have our CFO council which is really a great group of people.

110:58What he’s going to say here I’m breaking in here because this is a very important thing is what I talked about the other day. Is there is not the profit margin in business today to absorb tariffs at big amounts. People think and people who are not owners of businesses or they’re just consumers they think that these big businesses work on two

111:22three four hundred percent like the pharmaceuticals do. But most companies are not pharmaceuticals. There’s a reason why Walmart for example has put everybody out of business in a small town. All the mom-and-pops they cannot compete because Walmart buys so good and sells so low that just you and I if we tried to compete against Walmart we’d go out of business. So therefore, if they are being able to buy that cheap

111:49and that low and sell to you that low, they’re doing so on a very reduced profit, relying on billions of dollars in sales at a low profit still means billions of dollars of profit, but it’s not a lot percentage but listen to this next thing that this guy Steve points out and I think is it what I’ve been saying but you’re not hearing this from the media

112:14you’re listening to. One CFO said to me I don’t think we’re that stupid and bad negotiators that our suppliers

212:25have 15% extra margin to absorb.

512:29According to-

112:29Isn’t that interesting? And that is the case. Nobody is making that kind of profit in a commodity world. The people in my business, the people who are making the resins, the people who are making the solvents,

112:41they’re not making a great deal of money. Now when you get to the automotive paint, the end people, the big five out there which has a 99% market share worldwide because they are a monopoly. They’re the ones that are 40, 50, 60 times in their cost but not the raw materials that are selling to them from basically China. Almost all resins and paint additives come from China today

113:10because no American company wants to be in that business with an EPA that’s gonna go after them and target them. But let’s go on and finish this and we’re gonna get one other thing that’s gonna show you the real state of our economy.

413:22That really exists. That Elizabeth Warren thing, said him.

113:26Exactly. Businesses like our business, my wife and my business, we do not have the room to absorb these tariffs. And the idea that when Donald Trump said to places like Walmart or Ford, live with it, absorb it, don’t pass it on to the consumer, make less money. Well, he’s not making less money

113:48Let’s go on

413:50Every single

213:59Already making money and you have an extra 15% I couldn’t negotiate it out. And that the world is so uncompetitive that there’s an extra 15% hanging around.

414:09What’s Nvidia’s margin?

214:10Well, that’s the margin, but that’s true. That’s true and we’ll see. We’ll take it for margin. My friend Rob is begging me to not talk.

114:18As I pointed out, Nvidia is just gonna pass that 15% onto the rest of the American businesses that need to buy that same chip. That’s what’s going to happen with Nvidia and AMD. China’s not going to pay that 15%. Nvidia eventually is not going to pay that 15% nor is AMD.

114:36Who’s going to end up paying it is you, me and the consumer in America who pays for the whole world it seems like. And Donald Trump has not changed that projection one bit. Now the next topic that I’m gonna cover today to show you how bad the economy is and what tariffs are doing to the small businesses of America and even some mid-sized businesses and the big guys can overcome a lot of this but the little guys cannot and this is another report this is not

115:04CNBC it’s Bloomberg News and it’s about bankruptcies. I’m gonna try to find where that is and we’ll go talk about that right after this message from theplaintruth.com. Please go to theplaintruth.com every day to find out what’s happening, what it means to you, and what God may have to say about it. That’s theplaintruth.com where you can go to the message board and leave your ideas. You don’t have to register to do so. You can go to our Your Health Today

115:32and learn about what maybe you should do to improve your health. And you can go, of course, to these podcasts and find out what I have to say about things and other people because we broadcast a lot of different points of view to try to keep our listeners and our readers informed. That’s theplaintruth.com. Please go there every day. Thank you. Well we’re back now and I wanted to go into the last deal to

116:02show you how bad our economy really is doing and things you just are not listening to when you watch the local news or the six o’clock news or even unfortunately the business news. And I got this from Bloomberg. I’m going to try to get it. I might be a little off here.

116:17If so, I’ll try to. But I’m just going to show you something here based on bankruptcies, corporate bankruptcies in the United States.

316:26Could result in less transparency around the Fed rate decision, which would increase uncertainty for investors and companies, which is something the market never likes. And some argue that’s a worst case scenario than the data itself of being wrong, especially now for a growing number of companies critically in need of that transparency. You’ve got US corporate bankruptcies in July, which is your highest monthly volume since 2020. You’re talking about large public and private companies filing bankruptcy at a rate of 71 last month and then 66 in June. Year-to-date total filings run about 446 through the end of July.

317:00That is the most for the seven-month period since 2010. So a record of 15 years, and this is a really tricky problem to-

117:07A record bankruptcy in 15 years, 2010. That’s when the Tea Party movement started because Obama was destroying our economy. I went through it again with our business and we darn near went out of business under Obama. He destroyed our economy in many ways worse than Joe Biden did because

117:27when you look at the facts, Joe Biden, maybe he was senile, maybe he didn’t know what he was doing. Of course he didn’t know what he was doing anyway, he’s a Democrat. But the truth is, bankruptcies weren’t where they are right now. Corporate bankruptcies were lower under Biden than they are now. They were lower under the first Trump than they are now. We have to go back to 2010, 15 years to get to the number of bankruptcies

117:52that we’ve had so far in the first seven months of this year. This is something that everybody is just, when you listen to these experts saying, we don’t have a problem, United States is booming, we’re leading the world, it’s a lie.

118:07It’s an absolute lie. And you go to the Bible, I’m gonna say something before we end this bankruptcy thing here. You go to the Bible and you read the prophets and the prophets talking about the lying, the lying prophets, the false prophets

118:24that continually lie in the name of the Lord. And God has a problem with it because people say, thus saith the Lord when they did not. And Jeremiah, a true prophet of God,

118:36had a lot of problems when he gave prophecies because he was given prophecies that God told him to give to the people of Judah, they did not want to hear. And so there were these false prophets, you know, like the so-called Christian ministers of today that are really into Baal worship, into paganism, and they’re not telling you the truth. I watched a program the

118:58other day on a side note where this, it was like a commercial but it was a lie, this evangelical pastor type was saying how young people in droves are coming to Christ. It’s probably the biggest revival in the last 75 to 100 years. It’s nonsense. Read the polls. Young people today are more apt to reject modern Christianity, even modern Christianity, but real Christianity, than any people before them. Worldwide, Christianity is suffering.

119:34Now, I’m not saying that God’s not gonna bring it back when the time comes right, but you have this guy on TV, I thought it was a paid commercial on a news show, saying, oh, kids everywhere, and they showed these pictures of these kids with their arms waving in the air,

119:47because they’re controlled by Satan when they do that, by the way. That’s all part of false Christianity. And they show all these kids swaying back and forth, thousands of kids. It’s like everybody you know,

119:58every kid that you know, your neighbor’s kids, your best friend’s kids, they’re all you know going to these Christian socials. Really? Do you see that? This is the lies that our media continues to bring to us. Lie upon lie upon lie. Go to the Bible and read for yourself what God has to say about the lying prophets. This is from Jeremiah and I believe it’s chapter 23 and he’s got a message to the prophets and he says, my heart is broken, all my bones shake. I’m like a drunk person, like someone who’s overcome with wine. This is because the Lord and his holy words are

120:42affecting me is what he’s saying. The land of Judah, and that’s what it’s really called, it should not be called Israel today. The Jews, wherever the Jews live is called Judah. Wherever Ephraim lives should be called Israel. The land of Judah is full of people who are guilty of adultery.

120:59Is the United States not full of people guilty of adultery? Because of this, the Lord has cursed the land. It’s become a very sad place and the pastors have dried up. The people are all evil and they use their power in the wrong way.

121:13Does that not sound like what’s happening today? But listen to the next phrase here that’s coming on. Both the prophets and the priests live as there is no God. I found them doing evil things even in my own temple, says the Lord, so they will be in danger. They will be forced into darkness. There they will be defeated. I will bring disaster

121:36on them. In the year I punish them. I saw the prophets, says the Lord, do something wrong. Those prophets prophesized by the word of Baal, Baal worship, false Christianity, and led my people of Israel astray. Israel is the United States of America and England and the Lost Ten Tribes throughout Europe. I’ve also seen the prophets of Jerusalem do terrible things. They themselves are guilty of adultery and they live by lies and they encourage

122:06evil people to keep on doing evil things so people don’t ever stop sinning. All of those people are like the city of Sodom. The people of Jerusalem are like the people of Gomorrah to me, saith the Lord. So this is what the Lord All-Powerful says he’s gonna do to these prophets and this is what’s gonna happen to these false Christian ministers. Do not be deceived. God will not be mocked. God will fulfill his promises. I will make those prophets eat bitter food and drink poisoned water because the prophets

122:41of Jerusalem spread wickedness throughout the whole country. Don’t pay attention to what these prophets are saying to you. They’re trying to fool you. They talk about visions that they make up in their own mind. They’re not from me. They say, those who hate me, the Lord says you have peace. You know, I have, you keep hearing, we got peace, we’re gonna have peace, right? They say all these stubborn things because they want to tell you what you want to hear,

123:08that nothing bad will happen to you. But none of these prophets has stood in the meetings of the angels or seen my message or heard it at any time. Look, the punishment from the Lord is coming like a storm. His anger will be like a hurricane.

123:22It will come swirling down on the heads of these wicked people called my prophets who are liars. The Lord’s anger will not stop until he finishes and does what he plans to do. And when that day is over, you will understand this prophecy clearly. I did not send these prophets,

123:42but they tell people what they themselves make up in their own mind. That is the problem that we have with these false profits that’s trying to tell you all’s good everything’s great the economy is okay yeah we have tariffs but it ain’t gonna make a difference. Doesn’t make a difference that your company that you’re buying from it’s got to pay 50% more for the same product they did last year.

124:06But they’re not going to pass that off to you because they’re making such good money. No, no, the country that it’s coming from is going to underwrite the whole thing. This is lying profits. The lying profits of business. Lying profits of religion. You name it.

324:21Let’s go on to this bankruptcy thing here now. To solve on one hand, if you want to correct this data, essentially pause and looking at less transparency. But on the other hand, the data does need to be corrected because many businesses make decisions off of this. And some would argue, had the data been correct in May and in June, we would have had a rate cut already.

124:41And some of those businesses on the brink of bankruptcy. Some of those businesses would not have, on the brink of collapse, would not have collapsed. What she said here is what I’ve been just saying. If the truth was told to many of these businesses that the economy is suffering, tariffs are hurting us, other businesses are going bankrupt,

125:00news that you’re not hearing, that other businesses are not hearing. And so when they’re having bad records, they’re blaming themselves, saying, everybody else is doing great. Listen to the news. Everybody is doing great. This is the best economy, according to the president, of all times. And he did a good job the first time around. What are we doing wrong?

125:20And they try to change things, and they try to correct their losses. And what they do is they dig themselves into a grave even deeper when you try to cut to make a profit. When businesses try to cut to make a profit they cut themselves out of business and that is what’s happening and that’s why bankruptcies are running at a 15-year high and I even think they’re going to get a lot worse in the coming year

125:46when the tariffs finally hit. But then there’s one other thing that’s going to hit our economy, and pricing and inflation, and that is when the crops in California, Arizona, Florida, continually will not be picked because the people picking them are hiding from the ice agents and so crops and I have a customer who told me he paints farm equipment out in California. As far as you can see he was seeing produce rotting in the field and the people who run the farm say nobody’s coming to work because they’re all afraid to.

126:22This is all going to come and bite us the butt. And we have a problem coming and keeping our heads buried under the sand, listening to all good news. That’s what the people of Israel did. That’s what the people of Judah did. And it didn’t do them any well, any good.

126:36And it’s not gonna do us any good to listen to false lies from false prophets. God is not going to be mocked. God tells us how we should treat one another, which we’re not doing, and how we should live in a lawful manner.

126:52You know, I get a laugh out of people saying, when I’m talking about, I’m preaching legalism. What’s wrong with that? Do you want, do you want illegalism in your life? When you buy a house, do you wanna have a deed that’s legal or do you want somebody

127:07just write some on a piece of paper, it’s yours. And then two months later, you find out the person didn’t even own it because you didn’t make it legal by registering it with the courthouse and by having loan insurance, you know, business insurance or this insurance. Everybody in their personal life, anybody with brains, they want to be legal. But for some reason when you say God wants you to follow the legality of his laws, then you say, oh

127:35that’s legalism and Jesus did away with it. He did no such thing. Not a word of truth in that. That’s lying prophets prophets lying to you to tell you what you want to hear so you can continue to eat pork you can continue to go to church on Sunday you can continue to have an affair with your neighbor’s wife because you’re gonna go repent of it all of these things are leading America down the drain to ruin and the person behind it or I should say the God that is behind it, is

128:05the God they think they’re worshiping. Because God is not going to continue to allow America to keep going the way it is with leaders that are crooks, leaders who truly do not believe in any God, they just tell you they do, so you think that they’re good people. And you yourselves are gonna have to come to the conclusion At least for you and your family if not a country to go to God Start following what God says to do read the Bible and understand the Bible is news. It’s not a religion

128:37It’s not a book of what you should do. It is the news God is giving to you, the plain truth news of what’s gonna happen and why it’s gonna happen and what you can do to stop it from happening. And until you understand that is good news, the gospel is the news of the day. That’s the most important news you will ever hear.

129:01Now who won the baseball game or who won the race. No, the news you want to hear is the news you find in the Bible because it’s what’s going to affect you, your family, and your future. Well, we’re about out of time. I just wanted to get this off about the inflation and the lack thereof and it’s really higher than anybody can imagine. You know, one last point, and I’m going to go a little over time. We have a 3% inflation. We should have a 2% deflation because people forget we’re at that high level that Biden left us with a 40% inflation mark. And now we’re still going up 3% a year on top of that. We should be going down in good times or not. If these policies were good, prices fall. Prices should

129:49be falling because they were at an artificially inflated high. No, that’s not what we’re seeing. So when they say it’s a 3% inflation, and if inflation should be going down, called deflation, by 3% to 4% a year, and that’s what would be a good thing for consumers, by the way, and for businesses, if that was the case,

130:13then we’re really running at a 7% inflation rate, are we not? Think about it. And I gotta go, we’re out of time. This is Bob Barney for the Plain Truth today. Thanking everyone who listens,

130:24Thanking everyone who listens, and till tomorrow, bye-bye.