The Economy Is Fine... So Why Are People Struggling? — Bakari Sellers On CNN

[00:00:00] Speaker 1: Tonight, a new defense from President Trump and a new spin of why he says he wanted to get an agreement with Iran done as quickly as possible. [00:00:12] Speaker 2: So the one thing I didn't want to see is I didn't want to see economic catastrophe. If you kept this going, that could have happened. But all I know is every time we talked about the possibility of peace, the stock market shut up like a rocket ship. It never went down. They didn't like it. The people, you know, the stock market is more brilliant than anybody there is, including the people on this stage, other than me, of course. [00:00:39] Speaker 1: Joining the table, John Perdue, the executive editor at The Economist. And, John, we've been talking four months about the impact that this war has had on the economy, the price of gas skyrocketing. A month ago, it was $4.51. It's come down a bit to $4.03. But that's still over a dollar a gallon more than it was on February 28th of this year and almost more than a gallon more than it was a year ago. So it seems like, yeah, if Iran wanted to put pressure on the world economically, they absolutely succeeded. [00:01:16] Speaker 3: I think that's right. I think they've discovered in the course of this war how much leverage they have. And I think there's some pretty solid economic analysis there from President Trump. You know, had this war continued, had the oil been unable to get through the Strait of Hormuz, that there's 20 percent of the world's oil supply flow through that there. You know, you shut that down indefinitely. And I don't know about economic catastrophe, but it would look pretty bad. And so, yeah, the president thought going into this war, he had the leverage. I think it turns out that he didn't. [00:01:48] Speaker 1: Yeah. [00:01:48] Speaker 3: I think he panicked a little bit. [00:01:49] Speaker 4: I mean, the economy, well, the economy is doing really, really well, right? Yeah, really well. And so, you know, you look at record stock market, you look at what's happening in manufacturing, construction, we're seeing incredible productivity gains in inflation. There's no doubt about the inflation rate's going to come down very rapidly. In fact, we may have close to zero inflation in a few months, especially if the gas price comes down. [00:02:12] Speaker 1: But only if the gas prices come down, Stephen. [00:02:14] Speaker 4: What's that? [00:02:15] Speaker 1: But only if the gas prices come down. The inflation. [00:02:18] Speaker 4: But that'll help a lot. [00:02:19] Speaker 1: No, no, no, but I'm saying, but what I'm saying is, and you guys can hash this out, but the inflation that we've experienced in the last two months have been driven by gas prices. [00:02:27] Speaker 4: No question about that. [00:02:28] Speaker 1: So in order for that to reverse itself, the gas prices do have to come down. [00:02:32] Speaker 4: And they will. And they are coming down. [00:02:34] Speaker 1: But that's why Trump felt so much pressure to get this deal down. [00:02:38] Speaker 4: Except my point is, they were coming down anyway. And so I don't, you know, in other words, he may have panicked and said, oh, I need to have this deal to make the economy strong. And my point is, it's strong. I mean, the most amazing thing is how durable and resilient the U.S. economy has been, despite the fact that the oil price went up to $100 a gallon. [00:02:57] Speaker 3: I think there's some truth to that. I mean, the president's point about the stock market is correct. You know, people are in a frenzy about AI stocks and all of that. But I do think that if you shut off 20% of the world's oil supply indefinitely, that has an effect. And even with the memorandum of understanding we have now, the price of oil is not going to go down to the level it was before the war. It will remain elevated because it's going to take quite a while to get the oil flowing through the strait. You know, it's full of mines that have been placed there by the IRGC. It needs to be demined. You know, there's a whole load of ships that need to get out there. So it'll take a while for us to get back to where we were. And most of the forecast I've seen suggests that by the end of the year, the oil price will be, you know, $10 a barrel. Can I just ask that? Higher than it was pre-war, which is not a crazy amount. [00:03:50] Speaker 4: It's $74 right now. [00:03:52] Speaker 3: Yeah. So it already is. [00:03:54] Speaker 5: Can I ask you two smart fellas a question real quick? I mean, I know that your economic indicators that you're using are things like the stock market. No, no. But I'm not. I'm talking about people's income. Well, I'm talking about people from Denmark, South Carolina, where I'm from, who are paying higher grocery prices because of the war, the cost of fertilizer went up. So the cost of consumer goods. How about this? The cost of electricity is at a price point where people are paying more for electricity right now than they have been. So when you look at these common markers, and I'm not talking about the ones that you all are talking about, which are very intricate in the NASDAQ, in the market, and AI. I'm talking about people who right now, for example, this is very sensationalized, so forgive me for bringing it to this level. But, you know, a gallon of milk in South Carolina is $4.52. A gallon of gas is $4. The federal minimum wage is $7. So literally you have to work a full hour just to get one gallon of gas and one gallon of milk. So while you guys are talking about these economic indicators, I'm talking about the American public whose price of living actually went up because of this war. [00:04:57] Speaker 4: Am I missing a point? It did, but the average, the median family income since January 1 of 2017 when Trump came in, I mean, when Trump came in for his second term, is up $3,000 for the median family income. So they're doing better. They are even with the higher gas prices. [00:05:15] Speaker 1: But also, Stephen, isn't it also true that because of the inflation, inflation has outpaced wage growth the first time in three years in the last couple of months. [00:05:27] Speaker 4: In the last couple of months, yeah. But I'm talking about over the full. [00:05:30] Speaker 1: But I'm talking about, we're talking about here, how has the war impacted Americans and how they're doing. There's no question it was negative. There's no question. It's interesting because there's not a lot of questions you can ask Americans where you get 86% of people saying the same thing. Well, 86% of Americans say that the war has been bad for their cost of living. 83% say it's been bad for the global economy. That is also, you look at there on the GOP side, that's still, that's three quarters of Republicans who agree with those statements. So, look, that is almost universal. People believe this war has been bad for their pocketbooks, and that is the political problem. [00:06:10] Speaker 6: And I'll tell you, when I worked in the Biden White House in 2022, my dad called me on my way into the White House, and he said, talk to your boss and tell him I can't fill up my truck. And he's still saying the same thing today. The American people always look to who is sitting in that Oval Office, and that president has to answer for it. And it's a very hard thing to say, well, you know, it was about the missiles, it was about the drones, it was about the proxies. That just doesn't translate to every day. [00:06:33] Speaker 4: But that's, under that, that we would never go to war. In other words, wars are bad for the economy. No, I understand that. [00:06:39] Speaker 6: But then it's how you communicate it. And the problem is, I just don't think we have a communicator as the commander-in-chief that you can rely on. [00:06:46] Speaker 5: And I think that people also see, and I misspoke on Saturday when I was on the table for five. I said that 1897 had gotten these contracts, when it was actually broken, had gotten contracts with the Defense Department. So I misspoke, blamed my head and my heart. But people are also seeing people profiting off of war. And I think that when people see them being unable to make ends meet, and people are still profiting off of war, then for the people who are watching at home, they see a fundamental disconnect. And honestly, this is where we would also agree, I think, Stephen. And I'm trying to find some moments of common ground here because I like you. But I think that people see that as being not a Democrat or Republican problem, but a problem of a class of elitism that they don't necessarily identify with. And so when I'm talking to both of you guys about these issues that are really just table issues, I'm talking about the women who wear the big hats, who sit on the front row of church, and when you hug them, you smell like Chanel No. 5 all day long. But they're making these decisions about whether or not they pay their utility bills or get their prescription drugs. I mean, these are real issues that don't have anything to do with the volume of trades in the stock market because of defense stocks or anything else. [00:07:54] Speaker 1: We're going to hit pause here for just a moment. We'll resume after a quick break. A lot more to discuss on the economic impact of this war.