Dec. 7, 2022

Give an Inch and They’ll Take a Mile - Discussing the Debt Ceiling & Jobs Report – with E.J. Antoni - [Ep. 148]

Give an Inch and They’ll Take a Mile - Discussing the Debt Ceiling & Jobs Report – with E.J. Antoni - [Ep. 148]

The national debt continues towards cataclysmic levels, yet our government acts as if money grows on trees. All government spending is paid for by taxpayers, and policy makers have no trouble spending our money. The economy is in a free-fall, with...


The national debt continues towards cataclysmic levels, yet our government acts as if money grows on trees. All government spending is paid for by taxpayers, and policy makers have no trouble spending our money. The economy is in a free-fall, with lay-offs and cutbacks announced daily, yet the media claims the recent jobs report was positive. Was it? How can we discern fact from fallacy? Linda’s guest, E.J. Antoni, Economist with the Heritage Foundation, shares truth about the debt ceiling, the jobs report, and other economic issues that concern you, your business, and our nation.

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Transcript

Linda J. Hansen  

Welcome. Thank you for tuning in to this episode of the Prosperity 101 Breakroom Economics Podcast. My name is Linda J. Hansen. Your host and the author of Prosperity 101 - Job Security Through Business Prosperity: The Essential Guide to Understanding How Policy Affects Your Paycheck, and the creator of the Breakroom Economics online course. The book, the course, and the entire podcast library can be found on Prosperity101.com. I seek to connect boardroom to breakroom and policy to paycheck by empowering and encouraging employers to educate employees about the public policy issues that affect their jobs.

 

My goal is to help people understand the foundations of prosperity, the policies of prosperity, and how to protect their prosperity by becoming informed, involved, and impactful. I believe this will lead to greater employee loyalty, engagement, and retention and to an increased awareness of the blessings and responsibilities of living in a free society. Listen each week to hear from exciting guests and be sure to visit Prosperity101.com.

 

Thank you for joining with me today. Today's topic is the economy. I'm sure that like me, you are feeling the pinch. So, you will appreciate this interview. My guest today is E.J. Antoni. He's a research fellow for Regional Economics at the Center for Data Analysis at the Heritage Foundation in Washington D.C. E.J. is a repeat guest, and I invite all listeners to refer back to previous episodes to glean from his wisdom.

 

E.J. has also been a great friend and advisor to my work with Prosperity 101, and he worked closely with me and Steve Moore, as we worked on final edits for the economic policy portion of my latest book. So, E.J., thank you so much for joining us today and economy is such a hot topic. I saw recently that you had an article in Daily Caller that was entitled Don’t Give An Inch On The Debt Ceiling. Would you like to start with the debt ceiling and the overwhelming debt in our nation?

 

E.J. Antoni  

Certainly, I mean, it really is going to be a Sisyphean task trying to pay this thing off. People really underestimate, I think, because when we get into these large numbers, it's so hard to, you know, to get a grasp of what they mean like, “Well, what does it mean that we're $31.5 trillion in debt, for instance. People have a very hard time trying to wrap their minds around that it is kind of reminiscent of when Stalin said one death is a tragedy, but a million deaths is a statistic, right? At some point, these numbers kind of lose their impact, lose their meaning.

 

But I mean, the United States at this point really is truly hopelessly in debt. When you think of you, as an individual, owing like hundreds of thousands of dollars as a taxpayer, that kind of, I think, puts a little better of a perspective on it, than just what terrible financial shape we're in, and the fact that so much of our entire financial system is built on that very, very shaky ground, unfortunately.

 

And the debt ceiling is there for a reason. It's so that the Treasury cannot simply borrow into oblivion. And this idea that we are just going to constantly write a blank check to the Treasury and constantly increase it. Every time it bumps up against that limit is really rather silly. It is much like a family with a bunch of maxed-out credit cards. And whenever they run into that credit limit, they go to the bank and say, “Look, even though we are hopelessly in debt, even though we have no chance of ever actually paying you back, right? We can barely make the minimum payments. In fact, we're actually putting that on a different credit card, which is what the Treasury does, right? Can you still please, nevertheless, give us a limit increase on our credit card?” No borrower in the right mind – or excuse me – no lender in the right mind would say yes to that. But that is exactly what the Treasury is yet again asking of Congress, and Congress needs to say no.

 

Linda J. Hansen  

Agreed. Congress needs to say no, but the American people need to step up and make sure Congress says no, correct?

 

E.J. Antoni  

Absolutely. And, you know, we sometimes forget that, you know, politicians are still people, and they're still doing a job. And like any person doing a job, they operate under incentives. And if we exert enough political pressure on them, in other words, if we say, “Hey, look, you're out on your can the next election unless you do what we want.” Right? Then those people will, in fact, do what we want. And so, we need to exert the right amount of political pressure on them, to get them to do what needs to be done to frankly save the Republic.

 

I mean, that's not an exaggeration. I know that sounds like hyperbole, but it's really not when you when you read your history, and you understand how close we likely are to a financial cliff just based on what other nations have gone through, right? There's no telling exactly where that point of no return is. So, I can't pretend to tell you exactly what that number is. But I do know that judging by, you know, history, what we've seen other nations go through, we've got to be getting close if we're not there already.

 

Linda J. Hansen  

We are absolutely very close, both financially and culturally, spiritually, I mean, we have really hit a tipping point in our nation. So, it's not only a financial cliff, but it is truly just a cliff for holding on to the heart and soul of America. We're really fighting against, you know, globalism and tyranny versus, you know, nationalism and independence, and freedom. And part of that freedom is economic freedom.

 

And all of these things play together into our national economy. And, you know, if we can hold our elected officials accountable, especially as we start in the new Congress, coming into the beginning of the new year, these are many people that wanted our vote based on how they would handle spending decisions. And so, we do need to hold them accountable.

 

E.J. Antoni  

Yeah, absolutely. And again, there is no reason to believe that political self-interest is any different from, say, economic self-interest. Right? And so, you know, this is not really like to demonize politicians or anything like that. Trust me, there’s plenty of other material we can use to point that, you know, but my point on self-interest is this is just, you know, we really just need to accept like, “Hey, this is the framework in which the world operates. And so, we need to operate within that framework, too, and get this done,” because the alternative is going to be pretty terrible.

 

Linda J. Hansen  

Absolutely. And so, you have written quite a few things that will help educate the listeners, and we'll make sure that they have access to that and know where to go. But along with just talking about the debt ceiling, I'd also like you to address the recent Jobs report because, you know, the administration put out this glowing report and the media, you know, carried it far and wide. And we have to look a little bit under the hood and say, “Is this exactly what's been happening?” So, could you put some clarification to that Jobs report, so people really understand what's truly happening in America?

 

E.J. Antoni  

Sure, sure. But it's amazing how the Biden administration doesn't seem to understand their own statistics, frankly. It really is shocking, the so-called economist, it's as if they read nothing but the headline from the report. So, let's actually talk about that a little bit. The headline Jobs number comes from something called the establishment survey, which is just a survey of businesses. And then the unemployment rate comes from a household survey, which is, you guessed it, a survey of households.

 

So, the household survey, though, also has its own measure of employment, which is needed to actually calculate that employment and unemployment rate. And that has shown a huge divergence away from the establishment survey number. And one of the reasons for that is double counting. So, in the establishment survey, what you're actually counting are technically payrolls, not people. So, you're asking a business, how many people are on your payroll, but the reason it's not strictly counting people.

 

Let's say, I go to work for multiple businesses, I'm going to be counted multiple times in that establishment survey, but not in the household survey. Because when they survey my household, I'm only answering yes or no for employment. It's a binary. Right? There's no number of jobs being asked. There is a separate question that asks about multiple jobs, but not about, you know, specifically how many businesses, let's say.

 

So, anyway, to make a long story endless, we've seen this tremendous amount of double counting in the establishment survey. I mean to the tune of something like a fifth of all the jobs we've added over the last year in the establishment survey are probably just double counting. In the month of November, in fact, you know, even though that headline jobs number was up over 200,000, the amount of double counting in November was very likely much more than that.

 

So, it is a very strong possibility that in the month of November, the economy didn't actually employ any additional people at all, again, even though that headline number goes up. I mean, there are lots of other troubling signs in that report as well. And again, this seems to go back to the administration. It's like they don't understand their statistics because although the unemployment rate stayed where it was, a big reason for that was the fact that labor participation dropped. 

 

Meaning people actually exited the labor force and stopped looking for work, so that even though in that household survey again, the number of people employed went down. The number of people looking for work also went down. And so, because you're changing the top and the bottom of that fraction simultaneously, the unemployment rate, it allowed the number to stay the same, but it is not at all a good sign. It's exactly the opposite.

 

Linda J. Hansen  

Well, it is, and, you know, we can hardly open a newspaper or turn on a social media feed or anything without hearing about layoffs, especially with some of the major, major corporations, major employers within our nation. And that's certainly not a good sign for our economy. Can you address that?

 

E.J. Antoni  

Sure. You know, something really seems to have broken in the labor market back in March. And my best guess is that it was the sky-high inflation. Prices rose in the month of March, almost as fast as they had in the entire year before Biden took office. So, I mean, that's pretty shocking, right? Well, what were people's response to that?

 

We have to remember that not only was that consumer inflation rising incredibly fast, but wholesale inflation. Meaning the prices that businesses are paying also rose incredibly fast. Now actually it set a record that month, granted the record-keeping for wholesale inflation does not go back that far. But still, it was extremely high, both for consumers and for producers.

 

In response to that, what did consumers have to do? A lot of consumers had to go out and get second jobs. But again, that plays into that double counting. From the business standpoint, if you need to cut costs, one of the things that you can do is eliminate full-time jobs and replace them with part-time jobs, not in all cases, but very frequently, because that allows you to cut back on benefits, for instance, benefits that might be required for full-time workers, but not for part-time workers. And ever since then, we've seen this increasing shift of preferences among businesses, for part-time workers instead of full-time workers. In fact, I want to say since May, the economy has lost an average of 2,600 full-time jobs a day.

 

I mean, we are we're just hemorrhaging full-time jobs here. And it's particularly troubling because employers usually transition from that preference for full-time hiring to part-time hiring before they transition to just straight-up layoffs. So, you know, for those who are looking at a lot of different economic indicators, we want to remember that employment is a lagging indicator. Very often, the economy changes before employment does.

 

Linda J. Hansen  

Yes, those are really important indicators to think about. And, you know, this is affecting every business, and really every family. And even if we don't think about it affecting our day-to-day lives, maybe someone feels like, “Well, that's somebody else's problem.” It's definitely not because we see it when we go to the grocery store. We see it when we go fill up our car with gas. We see it, you know, when we get our tax bill. We just see it constantly that there are increased costs to everything.

 

So, what would you be saying to, you know, employers and employees now? I do think we should address, too, that some of this problem is the woke ideologies. You know, I hate that term, woke ideologies, but we have the ESG that is permeating businesses. And, you know, we have all of this, bringing in the policies that really do not lead to economic prosperity. They're being brought into the workplace, into the government, and, you know, it's really trickling down and hurting the American family. So, what would you say to employers and employees about what they could do to impact change?

 

E.J. Antoni  

One of the things that those two groups need to do is to stop blaming each other for inflation. You know, I increasingly hear these talking points from consumers about how these greedy corporations are raising prices, and that's causing, you know, inflation. And conversely, I am increasingly hearing from business owners that their greedy workers keep demanding higher wages. And the only way they can incentivize people to come back to work is by paying them more and more. And that translates into higher prices for the business.

 

You know, at the end of the day, why is it that consumers are able to pay higher prices for the things that they want to buy? It's because the government flooded the economy with money. So, now that there's more money available, right? Prices are going to go up. And by the same token, why is it that that workers are demanding such high wages right now? It's because if business A doesn't pay it, business B will. Because again, there's so much liquidity out there that there is enough cash to pay for these things, both higher wages and higher prices for consumer goods.

 

But the reason it doesn't feel like that for many people, business owners and consumers alike, is because just as fast as the new money's coming in, it's going out, right? Wages are going up. But the things that you have to buy with those wages are going up even faster. On the business end, yes, the prices that they charge have gone up, but their inputs have gone up even faster because they have to pay for a lot of things besides just labor.

 

In terms of like the ESG nonsense, all that is essentially doing is exacerbating inflation. Because in addition to the government putting too much money out there, right? Inflation is too much money relative to the amount of goods and services. So, if you want to bring down inflation, there are two different things you could do or you could do both at the same time.

 

One is lower how much money is out there and to increase the amount of goods and services that that money is chasing around, while ESG is doing exactly the opposite of that. ESG is decreasing the amount of goods and services that are out there by all of these ridiculous requirements, which essentially are making production more expensive.

 

Linda J. Hansen  

So, to the consumers and to, you know, really all the American citizens, being educated about ESG policies and all these policies that are coming in from the government, these mandates, you talked about wage policies and things I've often mentioned how, you know, a higher minimum wage requirement is really an unfunded mandate of sorts, and, you know, businesses can only absorb so much, and the government cannot continue to provide for people's need nor should they, we do not want a welfare state, and you can't do this if you've got a lopsided thing. 

 

You start to have more people taking from government than those that are putting in to government. And government has nothing unless we provide it to them through our taxes. So, we started this by talking about how citizens are responsible for holding our elected officials accountable. So, again, what would you say to action points for citizens, the average listener, and the employer and the employee that you mentioned,

 

E.J. Antoni  

I think it starts with education, right? Because the number one thing is we have to go out there, and we have to be able to convince our fellows of the right course of action for the Republic. But there's an old saying, “No man can give what he doesn't have.” So, before we can educate others, we got to make sure that we educate ourselves on these issues.

 

And you know, part of the mission of the Heritage Foundation, where I work, is to help with that. So, for example, you mentioned The Daily Caller article that I wrote. I wrote an article on the Jobs report for Fox News. But all of those different things that I and the other experts at Heritage write are all eventually compiled onto the heritage website itself.

 

So, if you're interested in anything that a particular expert has done or is working on, you can find all that at Heritage.org. So, I would really encourage people, you know, to use that resource as best they can. And again, you start with yourself, and then you work out from there to your fellows. And then they can do that to their fellows as well. And that's how, you know, that's how we grow movement. And that's how we enact positive change in our country and in the larger world.

 

Linda J. Hansen  

Exactly. And I really appreciate all that the Heritage Foundation has done I remember like being very young and first being involved in politics and reading so many of the Heritage Foundation policy booklets and just constantly keeping up. So, I think the Heritage Foundation for their work and helping me to be educated and always learning. There's always something more to learn, aAnd I appreciate that.

 

And for listeners who may not be familiar with what I offer, what we talked about that Steve Moore and E.J. helped with, I have a book available on the website, and I also have an online course. And the online course is a very simple way for employers to educate employees about these issues, just very simple economic issues.

 

And it's basically a civics and economics course, 12 lessons real quick, non-partisan. And so, if you’re looking for basic education to get someone really started and help develop their curiosity for learning more, that would be a great starting point. But again, the Heritage Foundation has so many things. So, go to Heritage.org, and you can reach EJ from there. And you can reach me at Prosperity101.com. And E.J., do you have any closing comments?

 

E.J. Antoni  

I'm so glad you brought up the ESG topic because I think we really underestimate how much damage can be done by regulation with the federal government. The Trump tax cuts did a lot of good for the economy. But far better for the economy was all the deregulatory efforts that the Trump administration undertook during their four years in office.

 

Sadly, a lot of that has been reversed and in fact, replaced with even worse stuff, quite frankly, in the two years of the Biden administration. And so, that's part of the reason for our current economic malaise, and why the recovery, which was very strong initially, after the government imposed shutdowns, why that has essentially stalled out and why we experienced, you know, six months of negative economic growth, for example, in the first half of this year, and why we're very likely going to return to negative growth probably within the next year.

 

Linda J. Hansen  

Right. And I'm so glad you brought up just the regulatory environment. I've heard the phrase regulation without representation. So, you know, when we think of regulation without representation, it's like taxation without representation. And people sometimes don't realize that the regulatory environment drives up cost and so many difficulties for businesses as they work to adapt to every new regulatory demand that comes down the pike. And it's often changing.

 

And it's not necessarily something that is done through the legislature where citizens have a lot of input or are able to have a lot of impact. Sometimes it is done through bureaucrats behind closed doors, and we don't always find out until it's too late. And so, I really encourage listeners, you know, again, go to Heritage.org, where you can find out a lot about regulations that might affect the industry in which you're involved.

 

But also, you know, find out more things on my website, Prosperity101.com. And, you know, it starts with education. If you're an employee, ask your employer, “What are the issues that are affecting your ability to run this company? Help me to learn more.” If you're an employer, help your employee to understand that each of these things that are coming down from the government are really impacting your ability to provide higher wages and increased benefits. So, we just really have to educate. And I'm so glad that you brought that up. So, how can people contact you?

 

E.J. Antoni  

The best way to find me and the other experts at the foundation is going to be Heritage.org.

 

Linda J. Hansen  

All right, and they can just search for your name, E.J. Antoni. So, thank you again, E.J., for joining with us. If you have any other closing comments, please share them now. And otherwise, we'll wait for next time.

 

E.J. Antoni  

Thank you for having me, Linda. I look forward to next time.

 

Linda J. Hansen  

Oh, thank you so much. You've been always great. Thank you.

 

E.J. Antoni  

My pleasure.

 

Linda J. Hansen  

Thank you again for listening to the Prosperity 101 Podcast. If you enjoyed this episode, please subscribe, share, and leave a great review. Don’t forget to visit Prosperity101.com to access the entire podcast library, to order my newest book, Job Security Through Business Prosperity: The Essential Guide to Understanding How Policy Affects Your Paycheck, or to enroll you or your employees in the Breakroom Economics online course. You can also receive the free e-book, 10 Tips for Helping Employees Understand How Public Policy Affects Paychecks.

 

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