Live from Music Row Monday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed by Fox Business contributor and Wall Street expert Liz Peek on the newsmakers line.
During the third hour, Peek deep dived into the new American Rescue Bill proposed by the Democratic Biden administration and outlined what and where the funds were going. She later described how the stock market’s uptick was a reflection of a healthy economy in the wake of COVID-19 citing that many larger corporations were reaping the benefits while lower-end workers will be hurt by inflation.
Leahy: We are joined now on the newsmaker line by Liz Peek a Fox News contributor and Wall Street expert. And she has a fantastic article at Fox News this morning. Biden’s Big Con. Here’s What President Democrats are Afraid to Tell You About COVID, Economy. Welcome, Liz.
Peek: Good morning. I’m so glad to join you.
Leahy: Well this piece. Tell us what you really think about Joe Biden and the Democrats and the COVID-19 and the economy.
Peek: You know, I spent yesterday reading the bill. I think it is 586 Pages something like that. It’s one of these colossal boondoggles that Democrats Delight in. And it’s a mess. Of course, it’s a mess. It’s all this stuff in it that has nothing to do with COVID. It’s basically a blank check of one point nine trillion dollars for Democrats to spend on all kinds of Democrat priorities.
And yes, then also incidentally some things that presumably help the country and COVID related industries that are really in trouble etcetera. I think people should kind of take a step back and say do we need one point nine trillion dollar bill? And by the way, why aren’t Democrats even talking about why we need this? And the answer is they’re afraid people are going to find out that A., COVID is collapsing.
Cases are down 77 percent in the last several weeks. Some people are now talking about herd immunity as early as April. A more commonly read follower of data talking about it being here in June. But the answer is it’s coming very quickly. And what we need to do is open our schools, open our businesses, and get the country working again. That is the stimulus.
We don’t need another two trillion dollars. Remember there’s a trillion, I think it’s actually one point one trillion dollars that are unspent from prior bills. And much of the money in this bill won’t even get out this year or maybe even next year. It’s an offense. And it’s basically about Democrats buying votes for the next cycle. The 2022 election cycle. It’s not about what’s really right for the country.
Leahy: Liz I see you note in your article a great article, by the way at Foxnews.com. The bill includes a 350 billion dollar bailout of mismanaged blue cities and states. And it hikes the minimum wage up to $15. per hour. What are we doing rewarding poor fiscal management in these blue cities and states?
Peek: Well, we’re paying off Democrats. We’re rescuing Democrats. That’s what this rescue is. It’s called I think the American Rescue Bill. That’s who we’re rescuing. And the reality is it’s so interesting that if you read The New York Times or The Washington Post, you never see that 350 billion dollar number mentioned. You hear about the $1,400. checks and the extended unemployment.
Nobody’s talking about the fact that one of the biggest slugs of the money goes to New York, Illinois, and New Jersey and states that are in trouble. New York itself is going to get 50 billion dollars. Well, guess what? That goes a long way towards bailing out Cuomo and DeBlasio for the absolute mess they have made of the cities and states’ economies.
Again, it’s appalling to me, but guess what? The voters in Montana, Georgia, and other states, they don’t even know this because it hasn’t been talked about in the media. And by the way, (Chuckles) you can tell I’m fired up about this bill. On the minimum wage thing, which we hope desperately will not end up in the final bill in the Senate, they’re not only hiking the minimum wage for everybody which is a stupid idea nationally because of different costs of living and so forth.
They’re also taking away an exception to the federal minimum wage which used to allow you to hire teenagers who don’t contribute as much as adults presumably and disabled people. It used to be you could hire them for somewhat lesser rates. So they’re taking that away. Now we’ve all known and applauded companies that hire people for example with Down Syndrome and they don’t pay them what they pay other workers because they don’t contribute as much. If you take away that exception for disabled Americans you will have less hiring of disabled Americans. Which is a cruel kind of footnote to this stupid minimum wage policy that’s in this bill. So people really should read the bill. It is incredibly tedious and infuriating but it’s worth it.
Leahy: You were the first female partner at the Wertheim Company. You’re a Wall Street person and you know Wall Street. You know investments. Typically we see Wall Street now not really looking at the world from a free-market fiscally conservative perspective. How did you become so free-market-oriented and so conservative?
Peek: I don’t think it’s hard to look and see what works. I mean, we have a template all across the country. We have experiments and what works and what doesn’t work. If you continue to put onerous regulations on labor, for example as they’ve done in New York and California you get less of it. It’s very simple. If you raise the minimum wage then fewer workers are employed. And it’s not just me.
We’ve seen that actually work in states where they have employed a higher minimum wage. And you see a lot of people at the low end of the income ladder lose their jobs. That is what’s so upsetting. Democrats pretend that they really care about blue-collar workers and people who are on the edge of society etc. Everything they do whether its climate policy, which is guaranteed to drive up electricity rates (i.e. in California where you have big green energy mandates), the cost of electricity is 50 percent higher than the national average.
Who does that hurt? It doesn’t hurt high-income Hollywood types, it hurts the people who make a minimum wage and are barely putting food on the table. That’s who it hurts. All their policies, immigration, green policies, and of course a minimum wage really hurt the Americans who need our help the most. And I think that’s what’s so upsetting. It’s so hypocritical and failed. It doesn’t work. You got states that exemplify the failures.
Carmichael: Liz, this is Crom Carmichael and I support everything that you have just said. But I have a question for you because you’re in the financial markets every day. And I scratch my head trying to square the stock market being at essentially an all-time high with what I think are some of the worst economic policies that I’ve ever seen coming out of the Biden administration with no end in sight of more stupid policies. So how do you square markets are forward-looking, how do you square those two?
Peek: Well, first of all, markets are apolitical. And what investors care about most right now is the fed’s determination to keep interest rates uber low, which they are. Meaning that there’s an incredible amount of money sloshing around in the system. Money that finds its home basically in the stock market. Also, they look at the fiscal intentions of this administration rolling out by the way, not just this one point nine trillion-dollar boondoggle bill, but also another one behind it.
Remember there’s another two trillion they want to spend on infrastructure. And reasonably they figured that’ll create an enormous sugar high in the economy. We’re going to have a lot of people spending money that you know will kind of inflate consumer spending and companies are going to have big earnings gains. And at the end of the day the stock market is all about earnings and what companies are doing and how companies are doing.
And even in the pandemic, they are doing reasonably well. If you watch the earning season we just came through, you know, somebody like Walmart yeah, they got dinged for spending a billion dollars on their online sales apparatus, which I think actually stands them in very good stead going forward, but revenues were up five percent. For a company that size, holy mackerel. That’s a huge gain.
So an awful lot of consumer companies, in particular, did very well. Right now our economy is really bifurcated. There are industries like airlines, hospitality, and entertainment, which are totally in the doghouse because you’re not allowed to go and travel. People are afraid to go to big sporting events. They aren’t being held anyway. And so there’s a lockdown still on a pretty significant segment of the economy and on two of our biggest states.
If you put New York and California together, that’s like a quarter of the country. Absent that people are spending a lot of money. The savings rate is high. Personal bankruptcies are down. The consumer is also responding to higher home prices and stock prices. Consumer net worth has gone up a stunning amount in 2020.
That leads economic activity by about six months. So there’s a lot of good news out there. But I tell you what, it’s threatened by just exactly what you’re talking about. By stupid policies that will hurt workers and drive up inflation that which is a big topic all of a sudden. And I think people have to be aware of that.
Leahy: Liz last question just briefly. So you live in Manhattan. What’s it been like there?
Peek: Thankfully I’m not staying in Manhattan right now. I’m staying about an hour north of the city because the city is dreary beyond belief and is not totally safe even in my neighborhood which has historically been a very safe neighborhood. An awful lot of people like myself and my family have moved out. I don’t know when we’ll go back.
Leahy: So Liz, I’m going to invite you and your family to move to Nashville. (Carmichael laughs) because it’s a great place.
Peek: I know! Everyone is moving to Nashville!
Listen to the full third hour here:
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