Inflation and gas prices continue to skyrocket in America, thanks to several factors — from nonstop money printing and ESG, to reckless practices at the Fed and energy policies. Diana Furchtgott-Roth, Former Chief Economist at the U.S. Department of Labor, joins Glenn to discuss what’s next for the U.S. economy. She explains why high prices likely will continue through the summer, but she also shares the ONE good thing about our current economic situation: ‘This is a self-inflicted wound,' she says. 'This is a problem that’s fixable.’
Below is a rush transcript that may contain errors
GLENN: This is the Glenn Beck Program. Boy, we're seeing some real problems. I read an article authored by a bunch of Yahoo experts. They were all ones who were saying, oh, inflation is transitory. It's nothing to worry about. Now they're coming out, yeah. We were wrong before. But we're right this time. This is the worse it's going to get. You know, by the new year, we'll be rolling. I don't buy that for a second. And here's why: All of the things that are being done right now, are going to be adding to inflation. And shortages. Right now, there are 16 states, just at the beginning of the week. What was it, ten? There are now 16 states that are paying $5 a gallon for gasoline. Maine is 5.02. Massachusetts, 5.02. Idaho, just over 5.00. New Jersey over 5.00. Pennsylvania, Ohio, over 5.00. Arizona, 5.18. Michigan, 5.21. Indiana, 5.23. Alaska, 5.46. Illinois -- can I ask you, is there a reason Michigan, you're paying 5.21, when Alaska is paying 5.46?
Illinois, 5.53. Washington State, 5.48. Oregon, 5.48. Hawaii! Hawaii is paying 5.49. And Nevada is paying 5.56 a gallon. And then California, coming in at number one, at $6.39 a gallon. Now, what is causing this?, by the way, several other states are on the verge. Utah, gas is 4.98. Vermont, 4.99. So those will be added. We added, I think, 26 cents this week. Twenty-six cents in the last seven days. And it's not going to stop. Because of ESG. Because of everything that this government is doing to stop funding oil research and petroleum companies.
Do we have Diana on yet, Sarah? Okay. She is this -- Diana, I want to get her name right. Furchtgott-Roth. There's a name that clearly you change, or if you're marrying into that, you're like no. Uh-uh. Anyway, Diana is an adjunct professor of economics at George Washington University. She has been the chief economist at the U.S. Department of Labor, chief of staff, the president's council of economic advisers. Deputy executive secretary for domestic policy. She also served under Reagan, Bush, and the second Bush. She's kind of an expert. And I really, really want to talk to her about two different kinds of inflation. The inflation that is caused because we printed so much money. And then the inflation that is not going to go away, in my opinion. And that is the inflation on food and gas. And things like that. Because we are moving into a new green economy. And it's going to cost us a fortune. A fortune. By the way, did you ever pay -- did you ever -- did you vote for that? Because I didn't vote for that. I thought we were voting for someone that would just take us back to normal. And be sane. I don't think we've gotten that. Maybe it's -- you know, maybe it's just me. Diana, are you there?
DIANA: Yes, I'm here.
GLENN: Hi, welcome. It's an honor to have you on the program. To answer their hillbilly questions from a guy like me. I would -- I would like to ask you about inflation. But two different kinds of inflation. The inflation that comes from money printing. But then -- is there not inflation that is coming because of ESG and our energy policies. What's happening with the food crisis. And everything else. Those are two different reasons, we're feeling this price crunch, correct?
DIANA: That is correct. Yes. Yes. But with the fed monetizing and accommodating these supply pressures. Then it means that inflation is higher. So you see that in the EU, for example, they have had the same upward pressures on energy. But their inflation rate is low. Same with Switzerland, for example, because their central banks have behaved in a different way.
GLENN: So why is Germany in so much trouble? I'm seeing Germany, their inflation is the highest, since I think 1950, or something like that. Why is Germany different? Do you know?
DIANA: Right. Well, they -- they -- Germany is having particularly high problems with -- with its energy prices. The two -- the two work together, of course. They work together -- of course, if you have higher prices. Then they do affect -- if you have higher prices then, of course, they do affect what the Federal Reserve is doing.
GLENN: So, but the Federal Reserve. Even if the Federal Reserve could correct all the mistakes that we've made, it is the -- the problem with our gas and energy, is that we are hell-bent now, with this administration, on destroying all fossil fuels. So there's no funding through ESG. And so that's not going to go away. These prices are relatively where they're going to be forever. I mean, they go up. But it's not going back down to $2 a gallon. With these -- with this administration. Do you agree with that?
DIANA: Yes. Unless this administration changes its mind. Then, yes, it's not going to go down. Yes, exactly. Exactly.
GLENN: Okay. So it feels as though the American people are being impoverished. You know, I don't know where you stand on the Great Reset. But it bothers me when someone says, hey, in eight years, you'll own nothing, and you'll be happy. It feels like we're being impoverished. And at the same time, they just came out with, you know, a new safety net, for retirees. It seems as though the government is starting to just gobble up everything. And starting to provide everything. Do you know much about secure 2.0?
DIANA: I know that secure 2.0 is not necessary. The assumption is that low income workers don't even have any way of saving for retirement. But we have IRAs. You can put $6,000 a year, in an IRA. The vast majority of people do not use that amount of tax deferred savings. And you can have it automatically come out of your bank account, every month. So there are no -- there are -- there are tax deferred retirement programs, for low-income people. That is why IRAs got put in. So it's not fair to make employees have the burden of that. On the --
GLENN: Okay. So then what are they doing with this new retirement -- with this new retirement plan? What is this? What is their goal?
DIANA: The goal is to require employers to provide 401(k) plans for all their workers. Which up to now, has been optional.
GLENN: What's that going to do to us? What is it going to do to businesses?
DIANA: Well, it's going to raise the cost of businesses. Because you have to hire someone to do it. Say you work in a hardware store, and you have a lot of low-income workers, working as cashiers or helping people find goods in the hardware store. So you might have to provide a 401(k) plan for these individuals. So you're going to have to call up, a benefits manager. And you probably don't even have a benefits manager. You probably give them payroll every month. Now you're faced with setting up a 401(k) for them. Even for larger, sophisticated officials. Or consulting firms. Often, they don't have a 401(k). Or a startup. They don't have a 401(k). It's difficult to do. So it places an additional burden on small businesses. That is not necessary, because if these individual cashiers in the hardware store, wanted to put $6,000 in an IRA, they would be able to do that. If they wanted that bank to transfer $500 a month, that would be auto enrollment into the 401(k) program. They can do that. So it's just a matter of the federal government getting involved, where it doesn't really need to.
GLENN: This is incredible. I mean, you worked in the Reagan administration. It feels like what we're suggesting. And we're not even close to it on the fed level. But if the fed did what the fed do in 1980, 1981, '2. And started raising to 19 percent. And we had all of this Biden red tape, that he's adding, you would stop the heart of this nation. Would you not? Economically speaking?
JAMES: Really, you -- you really would. You would definitely send an economy into a recession, and you would cause major damage, especially to the low income workers, that President Biden purportedly represents.
GLENN: So as you're looking at things, and you know what the situation is now, where it's all being done administratively. That's not really even going to go through Congress. He'll just do it administratively. How long can we take this beating, before we really start to see everything just go haywire?
DIANA: It's not a question of how long. I mean, the longer it goes, the worse people are going to be asked. But the wonderful thing about the United States. And I speak as an immigrant from the United Kingdom. Is that the pendulum does swing back. And there's an opportunity to do that in November. There's an opportunity. And the polls say, that the House and Senate will be Republican. So that will be an opportunity for oversight hearings. There will an opportunity in 2024. So I think, the damage is in the United States is always limited. Because people have the choice of voting in another party. And when times get bad, they do that.
GLENN: I -- I -- from your mouth to God's ears. I was reading an article today, about -- I think it was at the New York Times. Yeah. I think it was New York Times. All of these experts that had said, inflation is transitory. And now they're saying, okay. We were wrong about that.
However, we're at the top of the inflation ladder, and it's going to start coming down. And 2023 will be great. It will come back down. One was actually saying, it will be back down to 1.2 percent inflation rate. Who do we listen to? Who -- is there anybody out there, that we can trust?
And what is going to happen with the inflation rate, best guess?
DIANA: It's certainly going to be 8 percent, I would say. Certainly through the summer. With high energy prices, affecting people's use of air conditioners. Some people saying, there will be blackouts. High gas prices are going to be pervasive throughout the summer. But the important thing to know is that this is a self-inflicted wound. America has the largest oil and natural gas reserves in the world. We could be encouraging fossil fuel production. Encouraging pipelines. And we're not doing that. This is a problem that's fixable. And that's the sunny side of this. This is something that we can fix, with another administration. With another Congress.