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Live from Music Row Thursday 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 Fox Business contributor and Wall Street expert Liz Peek on the newsmaker line to comment upon current inflation levels and what the end of the 2022 year will look like for taxpayers and consumers.

Leahy: On the newsmaker line, our very good friend, Fox News contributor, specialist, and expert in the area of financial markets, Liz Peek. Good morning, Liz.

Peek: Good morning. Thanks for having me.

Leahy: Liz, I’m always delighted to have you on. However, let us just say that you don’t necessarily bring good news to us. (Laughter) What is going on with inflation, the economy? It looks like it’s just going straight down the tubes.

Peek: It’s all because the government basically decided to put untold and unprecedented amounts of money into the economy at a time when the economy was rebounding very sharply from the COVID-induced downturn.

It was too much. It went on too long, too much spending. And when you look back at the Democrat bill, the American Rescue Plan, which was passed a little more than a year ago, $1.9 trillion on top of $5 trillion which had already been spent by the federal government to fight the effects of COVID, it was a ludicrous idea.

And remember, only Democrats voted for it. And of course, their charge was that Republicans were basically being stingy and they just didn’t want to give Joe Biden a win.

No, Republicans understood that this was going to be sort of just one more weight on the seesaw that was going to tip us into an overheated economy, which is exactly what it did.

What’s really extraordinary is that Democrats followed up the American Rescue Plan with a proposal, the Build Back Better thing, which every credible analysis showed would have been another $3 or $4 trillion spent on an already overheated economy.

The whole thing really was just so terribly planned, terribly thought out. And I have to say, we all know that Joe Biden’s approval ratings really headed south during the Afghanistan mess.

They did such a bad job on that bad messaging and horrifying decision-making. But really, I think also his touring the country and telling people that spending another 3-to-$5 trillion and Build Back Better was going to bring inflation down.

I think that was sort of the pivotal lie that all of America woke up to and kind of looked at it and said, no, that can’t possibly be right.

And of course, many economists, many experts in the field have come out and said it would have been a catastrophe. It is kind of interesting.

I think the president’s credibility really just cratered at that moment because even people with no background in finance saw what was happening. They knew too much money was going in.

They knew the Fed was inert and didn’t move fast enough, and the combination of those two things. And now there’s no question supply chains, the war in Ukraine, all that has added fuel to the fire. But believe me, the fire was burning very nicely beforehand.

Leahy: But wait, there’s more! We have a story up at The Star News Network right now. headline: “Biden White House Report Says Energy Taxes Are Needed for Green Transition.”

The White House said Americans should pay higher taxes to ensure a rapid green transition away from fossil fuels. This was a report issued last week by the Council of Economic Advisers. Your thoughts, Liz Peek?

Peek: First of all, let’s separate two things here. One, renewable energy is more expensive. You don’t hear much about that because they are already enormous tax handouts to the providers and suppliers of materials that lead to solar installments and so forth.

We’re already paying higher electricity prices. If you look at what Californians, for example, are paying for electricity, it’s way above the national average. It’s not because they’re far west.

It’s because their state officials have demanded enormous reliance on renewables, which de facto are more expensive. So right away, transferring from cheap natural gas, even cheaper coal, but we’ve done most of that, to renewables is going to cost Americans more.

But yes, if you really want to accelerate the process and make it even more painful, put taxes in place. That makes no sense. But it is amazing to me that on climate, there is no sense.

You have zealots in charge of climate policy and they brook no rationalization of what they’re doing. It’s a conversation you actually cannot have with people.

Leahy: It’s now April 19, 2022. How is this year going to end up, Liz? It looks like it’s all going bad. (Chuckles)

Peek: It’s not going great. Obviously the focus now is on the Federal Reserve. And the question is, can they temper demand? This is, again, a demand-driven problem in the sense that people have too much money.

How can that be a bad thing? It really isn’t. But when you have too much money chasing too few goods, then it translates into inflation, and then it gets embedded.

The problem I think that policymakers have now is it’s really embedded. Everybody’s asking for a pay hike. Why? Because the cost of the grocery store is through the roof. I checked out of the grocery store yesterday.

It took forever because everyone in front of me was saying, wait, that can’t be. Eight bagels for $12? And people questioning the prices. Well, guess what? The prices are pretty stunning.

So the Fed now is on the hook to slow it down, raise interest rates to the point where demand is squashed enough to put inflation back where it was, which, by the way, is not going to two percent anytime soon, in my view. And that’s the so-called soft landing.

The idea that the Fed can manipulate this $20 trillion economy with fluidity and not make a mistake and overcorrect, is extremely wishful thinking.

That is obviously the big issue right now. The economy underneath is pretty strong. People have jobs and they are sitting on a lot of extra savings still, although that’s been coming down.

The economy is not in terrible shape. But as the interest rates ratchet higher it’s going to be a question of, can they do that and not just completely suppress demand. I don’t know.

The odds of recession now are being put around 35 percent to 40 percent, not this year, but next year. And guess what? I don’t have the answer to that, but it’s certainly not going to be an easy time and I think the markets are going to respond badly.

Listen to the interview:

– – –

Tune in weekdays from 5:00 – 8:00 a.m. to The Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.

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Pete Buttigieg claims a rail strike would force Americans to boil their water and the economy would grind to a halt - as unions, Democrats and Republicans go to battle over paid sick leave

Pete Buttigieg painted a grim picture if railroads shut down due to a strike claiming the auto industry would shut down, Americans would have to boil water to clean it or 'resort to bottled water' and 765,000 people would lose their jobs in the matter of two weeks.

The Transportation Secretary pushed on Thursday for the Senate to pass the House's bill forcing railroad workers and unions to accept a deal with the White House that would avoid a strike by December 9.

'There is no substitute in the U.S. for functioning freight rail, and if a shut down were to occur, that's not just shutting down our trains, it's really shutting down our economy,' Buttigieg told MSNBC's Morning Joe program on Thursday.

The House passed two pieces of legislation Wednesday, one to avoid a strike and one on giving railroad workers at least seven days of paid sick leave.

The measures will now need to pass the Senate before going to President Joe Biden's desk, which Buttigieg, and other White House officials, say needs to happen by the weekend at the latest.

Transportation Secretary Pete Buttigieg said the economy would face dire consequences if U.S. railroads were to shut down from a strike 

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The first bill passed by the House Wednesday was forcing a tentative agreement reached between Biden and railroad unions in September negotiations, which fell apart this fall after four of the 12 unions refused the terms.

The resolution echoed much of that previous agreement and included a 24 percent salary increase for rail workers by 2024, $5,000 in annual bonuses and caps on healthcare premiums.

It's unclear if there are the 60 votes needed in the upper chamber to pass both measures – but it's much more likely the bill avoiding a strike would pass before the one permitting seven paid sick days.

Buttigieg says he is hopefully that the bill will pass the Senate.

'I think it will. I hope it will,' he told the Morning Joe hosts. 'I'm going to be spending time with senators today, mainly to make sure they understand the implications of inaction for our transportation system.'

Buttigieg said a railroad shut down would collapse the economy and lead to 765,000 layoffs. Also said Americans would have to boil their water or get bottled water because 'water treatment plants would run out of the supplies'

He then described what would happen to the economy if rail workers were to strike and shut down the U.S. train system.

'Immediately you would see effects, including when it comes to inflation, prices shooting up because of the cost of shipping,' Buttigieg detailed.

'You would see water treatment plants in some cases, fairly quickly, running out of the supplies that they need and you could have American citizens in cities around the U.S. being told they need to boil their water or resort to bottled water,' he added.

'Within a few days, you would start to see our ports unable to operate because they couldn't ship the goods out of the ports,' Buttigieg said. 'So they would eventually get so congested, they would have to turn ships away. You would see our auto industry very quickly grinding to a halt, because many facilities only have a couple of days of parts on hand.'

The Transportation head repeated previous estimates that in the 'first two weeks of a shut down' of the railroad system, there would be 765,000 layoffs. 'And there's no guarantee that laid off workers would get their jobs back after a disruption ended,' he added.

Rail strike looms as Congress works to impose tentative benefit agreement four of 12 unions object to: What's at stake 

Eight out of twelve rail workers' unions have accepted a White House-brokered tentative agreement between labor leaders and rail operators that includes a 24 percent pay increase. Four other major labor unions have not accepted the deal, arguing it does not allow their workers enough sick time. 

Biden has now called on Congress to act to impose the deal on workers who have not accepted it before the December 9 deadline, after which they will strike if there is no deal. 

What's in the deal: 

Time off for medical appointments - workers will be able to take time off for medical appointments without being penalized. 

Pay raises - workers will be offered a 24 percent pay raise over the fivey-ear period from 2020-2024, back pay and cash bonuses, with 14 percent of the raise taking effect immediately

No health care hikes - the agreement prevents increases to healthcare copays and deductibles, a big win for workers. 

More time off - workers would be given voluntarily assigned days off and one more paid day off per year. 

Two-person crews - The deal protects two-person crews indefinitely, after workers voiced safety concerns when they were asked to operate trains by themselves

What's not in the deal: 

15 days of sick leave - workers who object to the deal say this is their sticking point. The tentative deal only offers one additional day of sick leave. 

What happens if a deal isn't reached by December 9:

As Biden noted, a rail strike would 'devastate our economy,' and could put up to 765,000 out of work. The president noted that it could even affect the drinking water supply and livestock and agriculture. Businesses the nation over could be forced to shut their doors without access to the supplies they need, and the U.S. economy could lose out on $2 billion per day.

If even one of the unions goes on strike, the other 11 honor the picket lines, shutting down railroads. 

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