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CLAY: I think what’s going on as we work our way through this budget process is every year the Democratic Party has become more and more divorced from the idea of understanding basic business, and I’m gonna play a couple of clips here from people who just don’t understand the basic rules of economics.
And, not surprisingly, Jen Psaki leading the charge of the Biden administration on this 3.5 trillion reconciliation bill. She was asked about the possibility of taxes going up basically through the charges for products rising because of taxes going up for corporations. And I want you to listen to her completely illogical response to that question.
REPORTER: The Joint Committee on Taxation say more than 16% of taxpayers would see their taxes increase under the bill that’s approved by the House Ways and Means Committee. Will the president sign that bill, or will he insist on the changes so that he will maintain his commitment that taxes won’t go up on people making $400,000 a year?
PSAKI: I have not looked at the document. Obviously, the president’s commitment remains: Not raising taxes for anyone making less than $400,000 a year. There are some — and I’m not sure if this is the case in the report — who argue that in the past companies have passed on these costs to consumers. I’m not sure if that’s the argument being made in this report. We feel that that’s unfair and absurd and the American people would not stand for that.
CLAY: Wha…? That’s what business does, Jen Psaki! When their costs increase, in order to make a profit, they have to increase what they are charging customers or else they lose money. That’s the very foundation of basic-level business knowledge. And I don’t care whether Jen Psaki thinks, Buck, it’s “unfair and absurd” that that’s the basic rule of capitalism, but this is the kind of lack of knowledge we’re dealing with.
BUCK: The principle for an economy in the hands of social justice warriors should be a terrifying thing to everybody because they do not understand the basics of supply and demand, of costs. They ignore this stuff constantly. The Democrats… Really the Americans largely now the American Socialist Party, or they share a lot of DNA and a lot of hopes and dreams with what we would consider straight-up European socialists.
And all you have to do is look to our south and you see a country, for example, like Venezuela or Cuba. But Venezuela is the example that I have in mind where if you run an economy on “fair” as in social justice, right, another these are terms that are used — on equity, right? Not equity like the stocks that one trades but on equity on what is a fair outcome according to people in four, you get disaster.
That’s actually at the heart of the Venezuela crisis is everybody knows. The Venezuelans used to be pretty well off certainly by South American and western standards as a nation they have the largest proven oil reserves in the world — larger even than Saudi Arabia — and yet it’s a country that has had trouble feeding itself in recent years.
And this is because, Clay, one they instituted price controls because the rich, bad capitalists were making things too expensive. Jen Psaki you would think from the sound bite would say, “Wow, the Maduro regime. They’re really about fairness because they said, ‘A dishwasher doesn’t cost X. Let’s make it cost Y just ’cause we say so.'” That was the beginning of the spiral.
Also, of course, land appropriation, redistribution, government intervention, government seizure, lawlessness and crime in the streets. A lot of things that Democrats in this country are comfortable with and like as a toll of peaceful-of-policy happen in Venezuela. But, Clay, it’s gotten so bad that there in the last couple of weeks the Maduro regime has had to start outsourcing to the private sector, state-run agricultural and food producing industries.
Because the people are sick of what they call “the Maduro Diet,” which is quasi-starvation. Because when you don’t have incentives aligned when you don’t have people that can make a profit that are going to benefit, and where there’s no upside or downside to efficiency and doing things the right way, you get bread lines. Literal bread lines! Now, I know we’re not quite at bread lines, folks, but if you apply the same principles and understanding, you see why what Jen Psaki says makes Clay the capitalist want to do back flips and throw things at the wall.
CLAY: Yeah. That’s clip 1 from Jen Psaki. Here’s clip 2 where she says the $3.5 trillion reconciliation package will actually cost nothing. Zero dollars.
PSAKI: There’s not disagreement about the fundamentals of what we’re trying to achieve. And there is agreement that we need to, uh, address the climate crisis; that we need to cuts cost for child care, for college. Uh, that we need to make it easier for women to rejoin the workforce, we need to rebuild and modernize our infrastructure. So there’s not… There’s agreement on that.
There’s a basic, uhh, discussion that needs to happen or is ongoing. Uh, w–we’re right in the weeds of it now on what the size of the package looks like. But I will also note — uhh, and we’ve done this a little bit over the past couple days — that this package, the reconciliation package would cost zero dollars. (sputtering) So what I’m saying… What I… What we are… The case we’re making here is that there needs to be agreement on the different components. There’s broad agreement on the goals. And then there needs to be agreement on what the revenue pay-fors are.
BUCK: That’s a lie like, “If you like your doctor, you can keep your doctor.” It’s an intentional, malicious, and meaningful lie.
CLAY: Yeah, and what I would say is, again, it also reflects a fundamental misunderstanding of basic economics. This is the equivalent… What Biden administration is arguing when they say, “It has a cost of zero,” is equivalent of saying, “Hey, Santa Claus buys all of the presents that he puts underneath the tree. It doesn’t cost any of the families anything!”
You might need to turn the radio down if you have young kids in your car ’cause I don’t want to disabuse of them their incredible notion here. But it’s a fantastical reality that you would argue this. It’s a form of magical monetary policy, this modern monetary idea. The $3.5 trillion is coming directly out of American families’ pockets, and it’s being given to the government.
And that 3.5 trillion — which, frankly, I believe the American people could use in a more efficacious manner to grow the economy — is instead going to be given to the government and be wasted, as most government programs do, on excesses which are not remotely necessary for the country to grow in a prosperous way economically.
And so it’s a direct lie to say that there is no cost here, that it costs zero. And it’s akin to Santa Claus brings every Christmas present and so Christmas doesn’t cost anything to anybody. That’s what they’re basically arguing, a fantastical Santa Claus-based economic policy in the Biden White House right now.
BUCK: You know something is wrong when the Democrats start using words they don’t have to use to describe things that otherwise would be very straightforward. When they start using terms like “undocumented,” what does that even mean? It’s a nonsense term. When they say things about the debt, Clay — or about the budget, rather — like “it won’t have any cost,” what does that mean?
When they say “pay-fors,” they’re going to use “pay-fors.” There’s another word for “pay-fors.” It’s called “taxes.” They are changing the words they use to obscure the actual impact and intent of their policies because the ideological left is driving the Democrat Party, and they don’t want the center of the country or enough of the center of the country to catch on to what’s going on such that they’ll actual suffer political consequences.
And the ramifications of this will not be known in time for the midterms to actually punch back at the Democrats. So that’s why they’re using all this — listen for it and you hear — fuzzy language. “Investments.” Investment is government spending, which means taking money from you and me and the people listening to this show and then spending it on things that Nancy Pelosi believes should get more funding, that address “the climate crisis.” There’s something in this budget bill, Clay, about — and I’m not kidding — “tree equity.” I don’t even know what tree equity is! Do you know what tree equity is?
CLAY: No, I don’t know what tree equity is. I thought that oak trees and magnolias got along really well.
BUCK: Just fine!
CLAY: I didn’t know there was lack of equity in trees.
BUCK: I didn’t know that the oak trees were oppressing the maple trees or whatever.
CLAY: Yes.
BUCK: But nonetheless, tree equity is in there under the Green New Deal section which, of course, they’re calling combating climate change. The fact that she says there’s agreement about all these things? There’s absolutely not agreement. She’s in a 50-50 divided Senate environment. She’s in a handful of House seats giving the Democrats leverage, a Biden administration that is underwater, approval ratings circling the toilet bowl, and there’s agreement on everything we want to do?
CLAY: On the biggest tax increase of our lives. That’s where we are.