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Let’s get the recession over with: Yahoo Finance’s Rick Newman

In this article:
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Yahoo Finance political reporter Rick Newman breaks down the build-up surrounding recession calls, President Biden's comments, inflation, and foreign energy markets within Russia.

Video Transcript

- Fed Chair Jerome Powell today testifying in front of the House Financial Services Committee, assuring Americans that the Fed's commitment to bringing down inflation is unconditional, and a recession is certainly a possibility. Leave it to senior columnist Rick Newman to say, yeah, recession, bring it on. We want some of that. Is that what you're saying, Rick?

RICK NEWMAN: Let's just get this thing started and get it over with. I mean, when I heard Powell yesterday say, oh, yeah, we could definitely have a recession here-- and he's basically saying, I don't even care if we have a recession. All I care about is getting inflation down. It's like, OK, Joe Biden, the poor guy, he's the last optimist standing.

He's the last guy saying, we don't have to have a recession. We really don't have to. This is really getting kind of ridiculous. I mean, when you have an unpleasant event coming up, like, maybe it's surgery or you have to see relatives you hate and that the dread of the thing ends up being worse than the thing itself? I mean, that's what we're doing right now.

We're talking ourselves into some terrible economy that's coming. Whereas we're not in a recession right now. We're not. But everybody wants to be. So maybe we should-- I don't know. Maybe everybody should just quit their job, stop spending money, get the recession started. And maybe we'll be out of it by 2023.

- All right.

- Fed Chair Rick Newman.

- An interesting point. I think people will be a little hesitant with that plan. But Rick, if we do fall into a recession-- we already Biden is in a very tough spot heading into the midterms. How much further does this complicate matters for the Democratic party?

RICK NEWMAN: Well, if you look at the fundamental economics, this is the position Biden is facing. So consumer confidence by one measure, University of Michigan, is at its lowest ever. It's lower than after the 9/11 terrorist attacks. It's lower than after the financial crash in 2008 when the S&P fell 57%.

So Americans are more bummed out than that. And we're not even in a recession yet. So let's say we do get a recession in 6 to 12 to 18 months. Americans are already as gloomy as they could be. And then we're going to be in a recession. And so they're going to be even more gloomy.

So I think Americans just want to feel bad. And if you want to look around, there's plenty to make you feel bad. All you've got to do is look at the price of gas and say it's Armageddon. And apparently that's a way a lot of people feel.

- And, you know, when it comes to things like this, it's usually the guy who's in charge who gets all the blame.

RICK NEWMAN: Absolutely.

- How much of the blame, though, does fall to President Biden and his policies versus some things that are out of his control?

RICK NEWMAN: It doesn't matter because the reality is what you just said, that most voters are not going to parse how much of whatever's bothering of them about the economy is Biden's fault and how much is not Biden's fault. I break down inflation this way. I would say maximum 30% of inflation is Biden's fault. The rest is clearly the war in Ukraine as the main factor pushing up oil and gasoline prices right now. Supply chain disruptions messed up balances of what consumers are buying that date back to COVID and so on.

Again, it doesn't matter. I'm going to keep trying to, you know, provide all the details about how much is Biden's fault and how much is not. And people are going to keep emailing me saying, shut up, it's all Biden's fault.

- And the interesting thing is about the war in Ukraine is you're seeing pre-pandemic levels of gas exports from Russia, according to some experts because of India, because of China. So what is the true impact of the price of gas there? I mean, we don't have time to break that down. But it's interesting discussion.

RICK NEWMAN: Well, I'll give you a very-- I'll give you a very short answer. And I'm reporting on this. Sanctions on Russia are not likely to change anything on the ground on the battlefields in Ukraine. Russia is making more energy from oil sales right now, even though it's selling less oil, because the price is so much higher. And I saw one piece of analysis-- this is a great detail. Russia's taking in $1 billion a day in oil revenues, and its military expenditures for the war are $325 million a day. So more than 600 in surplus that they're going [INAUDIBLE].

- And unless you get India and China to turn off the spigot, not much you can do about.

RICK NEWMAN: Right.

- Rick, we'll have to have you back on to talk a little bit more about that.

RICK NEWMAN: I'll be here.

- All right. Rick Newman, we love when you're on set with us.

- Nominate this man to the Fed.

- I know. You've got one vote. I'm a little iffy. I don't really know if I'm ready to bring on the recession. But we'll see.

- She's no vote.

- I might be able to be talked into it.