WASHINGTON—United States Senator Bill Hagerty (R-TN) today joins Squawk Boxon CNBC to discuss rising inflation.
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Partial Transcript:
Hagerty on what he heard from Fed Chair Powell during yesterday’s hearing: “I think they’re going to meet at the end of this month. They’ve got to talk about further balance sheet expansion, which has actually been a great enabler of massive stimulus spending, and also rates. I think he’s got a longer term view on rates as he indicated. I really encouraged him to look hard at what’s happening in the real economy. If you take a look at what’s happening right in my home state of Tennessee. Try to buy a house in Nashville right now. The home prices are up through the roof. This isn’t transitory. There are transitory components of it, certainly, having to do with supply chain dislocations. But they talk as though this is some sort of pig in the python moment. What you see though, are inherently inflationary policies coming out of the Biden Administration right now. From day one, they came in and canceled the Keystone XL pipeline. They forbade drilling on federal property. What that does is it raises our cost of energy. Everything that people in Tennessee have to buy, it needs to be transported. People drive to their jobs. People are feeling inflationary components of this throughout, and then when you have massive stimulus spending underway at a time that our economy is improving, you’ve really got to take a very hard look at the long-term impact of this. I think that what we’re seeing is an increase in government dependency, subsidization of unemployment, which makes Chairman Powell’s job very difficult on the unemployment mandate. So we really need to be focused on inflation. That’s an insidious tax that’s being imposed on every American. I’m very concerned about it, and I think Chairman Powell acknowledge that, too.”
Hagerty on increase stimulus spending driving inflation: “As you know, inflation can be a self-fulfilling prophecy. It has to do with expectations. And I think people in my home state, I think people across America are feeling this. If they look at things that they buy every day, they’re more expensive tomorrow than they’re going to be today. It’s creating a sense of panic as people make long-term business decisions, medium-term business decisions, as families make their own decisions. So I am concerned about inflation becoming a very, very real concern that as I said, an insidious tax and more stimulus spending only increases that.”
Hagerty on what Democrats’ spending sprees will do to inflation: “We saw what happened in March, a $1.9 trillion package. That’s roughly 10% of our GDP that they want to dump right into the economy at a time that our economy is rebounding. Now they’re talking about doubling that number, at least 20% of our GDP, at a point where we just had month over month. If you annualize from May to June, that’s a 12 percent inflation increase. We haven’t seen the likes of this sort of inflation since Jimmy Carter’s days. Now, I get what a Chairman Powell is saying long-term. They want to see us at a 2% inflation target. We’ve way overshot that, and I think we need to be very, very cognizant of that before we consider any more sort of stimulus spending that’s being discussed right now.”
Hagerty on Democrats’ latest socialist wish list: “What they want to put through and whatever they want to call it, it’s essentially the Green New Deal. They want to raise death taxes. What they’re going to wind up doing with their energy policy again is making America less competitive. They want to do away with fossil fuels. As you mentioned, they’ve got capital gains proposals there that will absolutely freeze capital in place. What this does is it pushes American jobs off shore. What I want to see is America become the most attractive place in the world to invest capital. Capital investment begets jobs and economic growth. That’s what we need to see. That’s what we need to incentivize in America. This policy that’s embedded in this massive stimulus package that they’re talking about. Again, the Green New Deal disguised is going to have exactly the opposite effect.”
Hagerty on Biden’s tax on American workers: “I think Americans are waking up—back to the original topic of inflation— people are feeling this at home every day. Every good, every service that they buy when they go to the pump, when they drive to work, when they try to buy a home, this inflation is a massive tax on the middle class, on every American.”