John Tamny- Geithner

That's a lot political broadcasting from a new balanced world headquarters buildings fairer and store them. -- so -- like -- so -- love my -- Boston but this is. The melting pot does not succeed.

WRKO. We are the ones without waiting -- we certainly -- can you imagine they picked ahead of GM whose does knowing about the harvest is that would be like electing a governor -- never been in politics before ha -- or president who'd only been two years in the US senate all -- you -- not what I was doing that's I don't think so now people -- right -- You've joined Todd Feinberg and Tom Finneran a year and AM 680 WRKO and we are about to join. The honorable John Tammany he is the editor in chief he's joining us for real clear -- and -- you know he -- he says -- Tim -- the secretary of the treasury the United States of America -- one dollar and formerly the head of the Federal Reserve for New York is a joke. And I find this horrified -- and shocking boy -- is not being taken seriously John Tammy Johnson and Jerry are now you know welcome John. Yes sir what is -- what is this all about what's going on with Geithner.

If we have the Treasury Secretary who has. Is silly enough to now the worse the Chinese think that were. Do any good job with inflation I mean this is the Treasury Secretary say in this the job that the dollars Malaysia but yet since 2001. The dollar has collapsed back -- about 150. Of an ounce -- today it buys about 1960.

All right so it's lost a quarter of its value in this decade is there anything bad going on them.

Yeah I think oh but lots of that's gone under in that time we need to value on Ian they're what happens. Others are rushed for real state property there's reason we have this. Crazy frenzy. And houses have to view -- with the dollar's collapse.

So part of that I did that luster realists say it was people looking for some thing. That was a reliable investment when the when the the paper money market was falling apart.

Most definitely this is the way in the class and achieve real beginning of currencies. The same thing extremely -- happened in the nineteen. Seven these. And eventually this led to much higher interest rates across the board. Particularly on -- treasury bills and and I think that's where we're headed now.

The misery index from that period time John I think is well recalled by all us a question for you with we got to that middle class that uses. Suggests fled to real estate. With real estate collapsing in front of RI as commercial as well as residential. What is that middle class -- today to try to protect the value of their their assets.

essentially what I always argues if you look at the broadest measures of home prices in this country yes they've declined but they have -- declined. Nearly as much as say your 401K or your investment. In the S&P 500 index and so. The scary thing is and and there'll be a lot of people might disagree. In times have we of a weak dollar is the place to. Remained the best place to be is someplace like housing or gold or some sort of hard -- That is least vulnerable to these currencies. The kind of currency debasement. But actually the Bush Administration foisted on us here's the Obama administration -- do the same thing.

And what exactly is the Obama administration doing that's wrong. That is going to make the situation worse.

Well for one. Director's comments over in China in the fact that what you showed an utter ignorance Q. What about what is inflation which is a weak dollar is a signal to markets he's going to continue to ignore the dollar's decline.

Are are you not being overly harsh some isn't he just trying to be positive and spin things nicely.

That there there's there's probably something to that and yet get argument there that the same time. There's a reason the treasury secretaries are always coached very very heavily before they -- public because any any little next step for any word change usually changes the dollar's value very quickly. So I don't think these were the correct words I think it's also important remember that he continue the bush administration's tactic of saying that we would like to see the Chinese. Have a market rates for -- long rather than take the war. Know what that that is code for what he's really saying there is we want a weaker dollar won't want to strengthen versus the dollar there's two ways he can do it in traditionally what's happened is that. Traders sold down the dollar responsiveness to all.

Okay so he's sending a bad code and he's not using the proper language going to larger sense. You feel that Tim Geithner is just over his head is is that something you felt when he was being appointed.

I did because I think that TARP was a disaster I don't think. He should ever be bailing out companies that fail when companies fail that signal from the marketplace. That that there assets should be taken over people would know what to do it and guide it was a part of TARP and so I thought that reason well he should not have gotten treasury -- And and I think this continuation. Of the as this night with two days showing up a lot of ways. That the biggest thing in my column. The problem most people you don't was -- We have a guy title in the Chinese that your dollar denominated assets as your treasures safe. Who can take that seriously when they watch the dollar's decline this decade treasuries pay out dollars. How can you how how can that be serious statement given the dollar's weakness.

John how much leverage does -- China have of -- the United States of America now given this weakening dollar in these trillion dollar deficit stretch stretched out all the all the way to the horizon.

I don't think. I don't think China has a lot of leverage here. And the reason for that is that if -- Sell off the assets is in some sort of any any more of the nation -- the party at this greatly would set back their economy I'm more of these people would stand. Of the US China trade relationship and make a lot of things for us that's not our economic interest to make and and in return we have time to make the -- to Google's and Microsoft's. Staples the world things like that. So. It also worried about China and eighty Nestor a lot less likely -- do if they don't a lot of our debt so. I don't think they've got a lot of leverage I but I just think for us to be. To be credible. We want to be known as a serious country I think it's important. Make our. To make our problems is more realistic and we need to value money you're making art that promises much --

John we have a lot of commentators in this country and a lot of calls to the show who say look if we want to be serious as a country we have totally lost. Because of free trade rules and and and the like totally lost any manufacturing capacity in this country. And that it's all gone elsewhere we don't have the capacity anymore to do anything that serious do you buy that how do you respond to that when you hear. Those arguments made against the -- does and the other free trade agreements.

I think they're very impoverished arguments in just it was what she's somewhat of -- local example. As I see it there's no difference between trade between individuals taxes in the state of Washington that are once. Between that trade between sane individuals emphasis change but let's look at taxes and Washington. Was the state of Texas somehow impoverished or for that matter the state of Massachusetts impoverished. By Microsoft being created apple I think if you look at. Dell computer Dell computers able to become a great computer company. By accessing what Microsoft made in the same way if the Chinese are willing to make for us. Certain it's active system and to make other things that the that are not making its basic compared and were far -- country because we mostly free trade he looks of the countries that do their very core. And there's reasons that is what look at we as individuals tried to be self sufficient. We would be a federally and in tragically impoverished the fact that we allow that we all engage in free trade on a daily basis. Means that were very well to do by any rational measure if we shut up shut up markets for dispute less well.

I'm not sure if you're analogies are fair ones though if you if you take individual to individual were all still living in this country. So the commerce were engaged in lifts the country and their for our boats go up as well. If we as a group of individuals are spending our money elsewhere and other countries. Isn't their argument that says that country can be lifted up while our assets are drifting out of the out of our country.

Well two things first off they're not true is drifting out of the country first -- for spending dollars. And they go to China. Those those dollars -- just don't sit there -- eventually going to come here. Secondly. What if the Chinese drug manufacturers found a cure for cancer would that be a bad thing that are dollars for going. Over the China. But but I think the third thing that had to be remembered is the importance -- the ultimate compliment -- imports. What would -- when. Individuals around the world send biscuits for sale are saying boy you guys are productive. You can actually purchase these things. -- we can only import the extent that we are producing something to begin with all trade bounces that is that's about. A trade deficit that we have we can possibly have a trade deficit. Because we -- to produce something first in order to get to. And so I think we've got to stop working this at trade as some kind of war thing and that is something we're basically people around the world a compliment.

But event. I think there's a subsidiary our agreement that is the concern and that is. That there are certain things as Tom was saying that we don't do for ourselves anymore and that. By allowing those things to become extinct or -- extent that we may be at risk of becoming a different kind of society without having consciously made that decision. Do we weaken ourselves and any -- way if we lose our manufacturing base. If all the hard work is done elsewhere and all we do his services that our problem we're told that's a problem on a regular basis. I don't know if it is maybe it's -- to only be a service economy.

A -- I think I think it's perfectly fine there's lots of things that we don't make anymore we don't make. Two X we don't make paper clips you know make -- will be considered the firm Nike Nike has never manufactured any of the units ever sold in the United States ever in the United States. This is great this is called compared to the damaged if we wanted to make issues the United States these. In in paper clips would probably be the best in the world that but in doing so. If we did this. We would have a lot less time to start up the route 128 self firms that attract all sorts of capital to Massachusetts we have less time once and -- Dell and Hewlett-Packard's the world is in the kind of companies that investors are willing to pay a lot more for. When we do you work that others can do you forests more profitably. That means that we do lower value work and when he did that. We have no choice eventually investors are going to say you know what. Americans are trying to compete with is low wage countries from labor. Okay so what you sense starts -- less capital the United States because they want to do low value work always always always. Let others make for you so that you can be something more valuable.

John Tammy is our guest editor in chief of real clear markets says so your argument then is that. Everything is going to be fine we're just going through a transition right now that's difficult for untrained workers who've been. Working in San factory where you don't need a lot of sophisticated skills and those paper and they're temporarily being held in limbo because they lack train.

Yeah yeah -- I think if you if you let the economy. Adjusted if you just if you wildest natural process to occur yes there'll be jobs destroyed that because. We're certainly getting paper clips as an example lot cheaper that just leaves more capital for other businesses to grow. Free traders -- for us to increase the value over time we just. On the if you look at the history. Look back in the early part of the twentieth century most Americans were engaged in agriculture are we worse off these now only two to 3% of Americans are I think not. A lot of jobs for destroyed but this was that. Look at that -- computer. It's arguably destroyed more jobs the United States -- any intention or any trade in history but I don't think anyone wants to destroy computers right now. You always should let this natural evolution her and getting back to the the dollar had we not and this is -- Bush Administration and Obama administration thing had we not to value the dollar when you do that. He tried investment away from the wage growth parts spare economies. I don't think we have the slowed down right now I don't think you have a lot of Americans. Until logically -- think -- about free trade.

On a related topic to the weakness of the dollar in the Chinese position. President Obama over the past couple of days is really wagged his finger at congress and give them a little bit of a lecture on not page you go stuff. Is is this that he chuckled to hire John guy you're at a chart I fellow all laughing and and I got up out of my -- is that it's at this one in the most outrageous gimmicks have ever seen in my life. MI you rob on that -- is this like one of the biggest frauds of all time.

It's total outrage -- What a great politicians have been anyone believes -- But I can't I can't do -- from the different Angola and the kind of guy that always Swansea. Taxes reduced because I think taxes are at their core price -- worked. Get them lower. But the problem with Paco but even more importantly it's -- remember what government spending is I don't have a problem -- depths of people -- and does. Abuse they think orbit for fine. When you have -- what's that saying is if we have another economic boom I don't think that's likely right now and revenues for the federal government rise quite a bit. They're going to spend every dollar I think we've got to get out of that mindset. We've got to remind Americans. That when governments spend money they are taking money from the wages of every single American. These the government is taking money from the private sector in concessions it. It's the trip should not be pay -- should be you know what we should spend -- that is always -- everywhere attacks on the American.

We -- no okay. Cano paid I paid no.

What's that cast is fine but let's have a federal budget that is. Small fraction of what it is what you -- that would governments spent last there's there's more money in the private sector so that might wages in the wake of everyone else can go up.

6172666. Seats succeed John your NWR -- John Tammany from real clear markets hi John.

I don't RU -- dot. -- Ask -- something is it really free trade. With China. They manipulate on the value of their currency. When they subsidize. -- order for the country. When they have no actually no labor law. Allows child labor labor. No problem with that.

It. Majority here's the question the great inequities in in in the so called free trade it's fixed rate is what Johnson.

Well yeah idea probably I don't have a problem with the manipulation of the war on one iota the basic truth is that all currencies -- paper concepts. They're manipulated by the treasury or Central Bank anytime in the question asked the -- we better off -- Massachusetts's. It's better off because the dollars the same in New Hampshire is isn't -- in Massachusetts I think so is allowed for the natural flow of goods. The fact the Chinese manipulated the -- as we keep the dollars of the it was paid for the dollar just made it more easy for kids to flow across borders. I'm regarding the substances services nation. I just read yesterday that Apple's dropping the price of the iPhone that 99 dollars. It will lose money on that that is somewhat of that they they're basically dumping product on the market as the acting notes did for market share and it I don't see what's different if the Chinese do -- there are taxpayers. Want to subsidize Americans. As -- give the average American. -- lower cost of goods. We'll take that any time I'm not rich enough to refuse someone else giving me -- and when they view -- that what -- certainly if they -- teacher for five dollars and normally go and that gives me five dollars extra the doesn't just disappear it means but I can consumer invest -- something else that's going to create jobs here in the United States.

Wow that's pretty clear and pretty convincing Bobby and excellent power -- and a college professor from now on because that's the type a professor we need. But -- on -- York daily John Tammany high.

The answer. That. -- about our -- all in premarket the ID that if you don't have yet. Well and outlook but they're pretty country.

Bob served got a bad sour -- going to but I never heard enough to be able to pose questions as the welfare state change any of these dynamics.

It changes the dynamics I think in the sense that it it keeps unemployment up longer. My problem -- welfare unemployment is that it creates it makes it easier for me to stand employed if I want to. On the realities of I was my jobs today I can get a job today it may not be the one I want but I know like -- working by the end of the day. When you have a welfare state what it does -- tunnel beside one worker. You can avoid finding new work longer than you'd like I think this is big negative for economic growth. Economic growth all business individuals producing when the government creates disincentives to that we their weapons individuals producing he wanted to kick start the economy right now one thing to do is get rid of unemployment.

So what's so welfare is taken a couple of pistons in your car's engine and saying you guys don't have to. Do any work right now to help move the car.

Yeah yeah it's it's exactly that. Its -- I think we apple was like General Motors. It like his kids of our parents gave us successful. Is we've probably didn't have to work right yeah. As adults.

John Tammy we appreciate it very good talking with you and we will call on you again if you're willing. It real clear markets dot com is where John does is right henceforth professor John Tim ordinary good guy that he's very smart and thoughtful very cogent and compelling so it doesn't sound like a professor adamant.

This is Lorraine -- you're listening to veterans forum.