RUSH TRANSCRIPT Very big ░░░░░░░░ And that s my ░░░░░░░░ All right let s ░░░░░░░░ this discussion joining you ░░░░░░░░ Michael falkender former assistant ░░░░░░░░ secretary for economic policy ░░░░░░░░ visiting fellow Joe Lavorgna ░░░░░░░░ White House national economic ░░░░░░░░ chief and NBC Michael ░░░░░░░░ about going to you ░░░░░░░░ profit tax for oil ░░░░░░░░ how about that what ░░░░░░░░ great brilliant idea what ░░░░░░░░ think Larry this is ░░░░░░░░ surreal You already see ░░░░░░░░ Biden Administration making it ░░░░░░░░ and more difficult to ░░░░░░░░ energy to refine energy ░░░░░░░░ say if you do ░░░░░░░░ to do those things ░░░░░░░░ you actually bring more ░░░░░░░░ online and serve the ░░░░░░░░ people we re going ░░░░░░░░ take it all away ░░░░░░░░ the you in the ░░░░░░░░ of an excess profits ░░░░░░░░ I have the misfortune ░░░░░░░░ testifying in front of ░░░░░░░░ Sanders about that If ░░░░░░░░ actually produce more this ░░░░░░░░ than you produced during ░░░░░░░░ pandemic you re going ░░░░░░░░ pay higher taxes merely ░░░░░░░░ you re providing more ░░░░░░░░ to the American people ░░░░░░░░ why would people provide ░░░░░░░░ quantity if all they ░░░░░░░░ going to do is ░░░░░░░░ it taken away at ░░░░░░░░ 95 tax rate Larry ░░░░░░░░ don t know why ░░░░░░░░ at 95 Hell I ░░░░░░░░ go to 100 I ░░░░░░░░ go to 110 Joe ░░░░░░░░ I was going to ░░░░░░░░ about the economy but ░░░░░░░░ juicy story on excess ░░░░░░░░ tax came up at ░░░░░░░░ last minute Joe this ░░░░░░░░ tried under Richard Nixon ░░░░░░░░ know he was Republican ░░░░░░░░ one of the worst ░░░░░░░░ presidents in history You ░░░░░░░░ say other things too ░░░░░░░░ let s not go ░░░░░░░░ and Jimmy Carter It ░░░░░░░░ Reagan who finally removed ░░░░░░░░ excess profits tax and ░░░░░░░░ price controls So Joe ░░░░░░░░ if you tax something ░░░░░░░░ get less of it ░░░░░░░░ is what arthur said ░░░░░░░░ that apply to oil ░░░░░░░░ it certainly will Arthur ░░░░░░░░ exactly right Knowing I ░░░░░░░░ coming on I wanted ░░░░░░░░ check the data Go ░░░░░░░░ the GDP accounts oil ░░░░░░░░ gas extraction we re ░░░░░░░░ 13 from the previous ░░░░░░░░ We ve had very ░░░░░░░░ growth only growing 5 ░░░░░░░░ that includes last year ░░░░░░░░ boom If you look ░░░░░░░░ from 2016 to 2019 ░░░░░░░░ President Trump oil and ░░░░░░░░ output was growing over ░░░░░░░░ So clearly we we ░░░░░░░░ short of the energy ░░░░░░░░ need You and Michael ░░░░░░░░ art are exactly right ░░░░░░░░ you tax it more ░░░░░░░░ will get less of ░░░░░░░░ Companies respond to incentives ░░░░░░░░ the tax policies are ░░░░░░░░ incentivizing them to bring ░░░░░░░░ to market Larry it ░░░░░░░░ interesting Michael falkender we ░░░░░░░░ about it a week ░░░░░░░░ last Monday I asked ░░░░░░░░ a question if I ░░░░░░░░ you king for a ░░░░░░░░ in Washington policy what ░░░░░░░░ you do and your ░░░░░░░░ was what My answer ░░░░░░░░ to unleash American energy ░░░░░░░░ to indthe war on ░░░░░░░░ fossil fuels As you ░░░░░░░░ it permeates so much ░░░░░░░░ the economy and in ░░░░░░░░ formed of manufacturing and ░░░░░░░░ of all the various ░░░░░░░░ around our economy that ░░░░░░░░ just listed off if ░░░░░░░░ don t unleash American ░░░░░░░░ we ll continue to ░░░░░░░░ this historic inflation continue ░░░░░░░░ the efforts of the ░░░░░░░░ to contain inflation Larry ░░░░░░░░ there any evidence Joe ░░░░░░░░ that really Joe Biden ░░░░░░░░ encouraging the oil companies ░░░░░░░░ produce more I mean ░░░░░░░░ it is kind of ░░░░░░░░ he wants to wave ░░░░░░░░ magic wand Yet everything ░░░░░░░░ does taxes them tells ░░░░░░░░ tells everybody not to ░░░░░░░░ in them You can ░░░░░░░░ have it both ways ░░░░░░░░ think American voters understand ░░░░░░░░ Joe What do you ░░░░░░░░ They do Larry You ░░░░░░░░ that in the consumer ░░░░░░░░ surveys But as you ░░░░░░░░ to invest in oil ░░░░░░░░ capital formation projects these ░░░░░░░░ not done on a ░░░░░░░░ This is done with ░░░░░░░░ quarters years of planning ░░░░░░░░ have to be incentivized ░░░░░░░░ want to do this ░░░░░░░░ also clear with the ░░░░░░░░ this is way to ░░░░░░░░ political points to look ░░░░░░░░ your doing something Even ░░░░░░░░ the economics are obviously ░░░░░░░░ There is obviously political ░░░░░░░░ to it You need ░░░░░░░░ move to clean sources ░░░░░░░░ is fine but that ░░░░░░░░ take a while you ░░░░░░░░ to make the transition ░░░░░░░░ I don t think ░░░░░░░░ re doing that right ░░░░░░░░ obviously Larry the other ░░░░░░░░ Michael I will go ░░░░░░░░ you on this Today ░░░░░░░░ had the manufacturing surveys ░░░░░░░░ want to switch gears ░░░░░░░░ the economy for a ░░░░░░░░ The manufacturing surveys in ░░░░░░░░ and Dallas fell So ░░░░░░░░ think Mike every single ░░░░░░░░ Reserve regional manufacturing survey ░░░░░░░░ now showing a decline ░░░░░░░░ that means industrial production ░░░░░░░░ going to falter We ░░░░░░░░ seen the housing slump ░░░░░░░░ we ve seen steady ░░░░░░░░ in real after inflation ░░░░░░░░ so the outlook for ░░░░░░░░ economy can t be ░░░░░░░░ I m just going ░░░░░░░░ ask you can t ░░░░░░░░ good The Federal Reserve ░░░░░░░░ going to have to ░░░░░░░░ interest rates again because ░░░░░░░░ inflation is still going ░░░░░░░░ So Michael how do ░░░░░░░░ read this economic story ░░░░░░░░ looks very difficult to ░░░░░░░░ It does to me ░░░░░░░░ well Larry On the ░░░░░░░░ hand you have got ░░░░░░░░ 1 2 unemployment which ░░░░░░░░ the Fed would keep ░░░░░░░░ until they start to ░░░░░░░░ pullbacks in employment But ░░░░░░░░ the other hand if ░░░░░░░░ look both housing if ░░░░░░░░ look at manufacturing seems ░░░░░░░░ we start to take ░░░░░░░░ The problem we ultimately ░░░░░░░░ with all the money ░░░░░░░░ the economy we have ░░░░░░░░ worker shortage We have ░░░░░░░░ manufacturing shortage and so ░░░░░░░░ think this recession is ░░░░░░░░ to be different in ░░░░░░░░ we re still going ░░░░░░░░ have a reasonably high ░░░░░░░░ of employment but we ░░░░░░░░ going to see reductions ░░░░░░░░ overall out put and ░░░░░░░░ things like housing and ░░░░░░░░ until this inflation numbers ░░░░░░░░ under control Larry that ░░░░░░░░ the thing Joe give ░░░░░░░░ the last point here ░░░░░░░░ looking through headline inflation ░░░░░░░░ consumption expenditures that is ░░░░░░░░ the Fed likes headline ░░░░░░░░ 6 2 Core is ░░░░░░░░ 1 Average hourly earnings ░░░░░░░░ that wages 5 the ░░░░░░░░ funds rate is going ░░░░░░░░ 4 1 2 4 ░░░░░░░░ probably get to 5 ░░░░░░░░ but is that going ░░░░░░░░ conquer inflation I mean ░░░░░░░░ s the thing you ░░░░░░░░ have real rates are ░░░░░░░░ going to be positive ░░░░░░░░ m sorry didn t ░░░░░░░░ to interrupt Please is ░░░░░░░░ going to conquer inflation ░░░░░░░░ so it I think ░░░░░░░░ change in rates is ░░░░░░░░ as important as the ░░░░░░░░ of rates and the ░░░░░░░░ that inflation is where ░░░░░░░░ is really partly a ░░░░░░░░ story So the Fed ░░░░░░░░ being forced to crush ░░░░░░░░ to deal with the ░░░░░░░░ shortage We re 13 ░░░░░░░░ our previous peak in ░░░░░░░░ of oil and gas ░░░░░░░░ so we really need ░░░░░░░░ supply side solution not ░░░░░░░░ demand solution but I ░░░░░░░░ expect the economy to ░░░░░░░░ a lot weaker than ░░░░░░░░ people are expecting That ░░░░░░░░ take care of some ░░░░░░░░ the problems Larry but ░░░░░░░░ you re causing a ░░░░░░░░ from the Fed that ░░░░░░░░ not really necessary but ░░░░░░░░ is what is going ░░░░░░░░ happen Larry Michael that ░░░░░░░░ to your point A ░░░░░░░░ ago you were on ░░░░░░░░ radio here we are ░░░░░░░░ again we ought to ░░░░░░░░ the handcuffs oil and ░░░░░░░░ production It would lower ░░░░░░░░ and promote growth Not ░░░░░░░░ production Larry but we ░░░░░░░░ to fix refining as ░░░░░░░░ We re at some ░░░░░░░░ the lowest levels in ░░░░░░░░ capacity that will take ░░░░░░░░ years to fix If ░░░░░░░░ don t get working ░░░░░░░░ it as part of ░░░░░░░░ agenda of the next ░░░░░░░░ Congress we ll see ░░░░░░░░ capacity move to China ░░░░░░░░ wow I got Steve ░░░░░░░░ coming on later in ░░░░░░░░ show.