CHARLES PAYNE, FOX NEWS ANCHOR: FOX on top of two stories we are tracking very closely this hour.
On Wall Street, stocks getting hammered again, with inflation fears flaring up.
And Pennsylvania, where they are still counting up all the votes in that GOP Senate primary, Dr. Oz and David McCormick separated by a razor-thin margin.
Welcome, everyone. I’m Charles Payne, in for Neil Cavuto, and this is “Your World.”
First to FOX Business’ Lauren Simonetti with more on today’s sell-off — Lauren.
LAUREN SIMONETTI, FOX NEWS CORRESPONDENT: Charles, it was a bloodbath.
It took out even the sectors often considered safe, like consumer staples. Think Campbell’s Soup, for instance. If you look at the Dow, it had its worst day in quite some time, slumping 3.6 percent, or more than 1,100 points, the S&P 500 down more than 4 percent, the Nasdaq down almost 5.
Mohamed El-Erian says, yes, we have entered a new phase of this sell-off, as runaway inflation erodes living standards and profits. Take a look at Target. It lost a quarter of its value today, the worst day for them since Black Monday, 1987. Why? Higher costs for gas, for shipping pushed their own costs up by a billion dollars. They couldn’t pass all that on to shoppers, so their quarterly profits fell 50 percent.
Well, yesterday, Walmart said its profits fell 25 percent, as inflation becomes unmanageable. The lower-income consumer feels it the most. Look here. Dollar General, Dollar Tree, those stocks tanked today, 14 percent for Dollar Tree.
CEOs are noting a shift in how we shop, from buying big things like electronics and appliances to buying food and essentials. And Goldman Sachs says it’s seeing customers tap into credit to get by.
Fed Chief Jay Powell says the Federal Reserve must bring down inflation. And they’re going to act aggressively, raising rates to do so. And that warning hit the growth stocks today.
Apple, the country’s biggest company, it’s down 22 percent from its highs. Meta, Facebook, that’s down 49 percent. And if you think that’s bad, look at Netflix. It’s lost three-quarters of its value from its 52-week high. So, investors right now are wondering, how low can these stocks go if they’re growth stocks? How much is growth going to slow in general?
And the other risk is the R word, recession. Are we in one? Are we about to enter one? And, if so, Charles, how bad is it going to be?
PAYNE: Yes, I think everyone’s bracing for that. Thank you so much, Lauren.
The question of course, is, again, is the sell-off overdone?
With me now, FOX Business’ Susan Li.
Susan, everyone on the Street now all saying it’s going to go a lot lower from here. What do you think?
SUSAN LI, FOX NEWS CORRESPONDENT: Well, I just want to tackle the retailers, first of all, Charles, because this is macro becoming micro, meaning the record high gas prices, higher wages is finally biting into the profit margins of some of these retailers.
And they have been unable, finally, to pass it on to the consumer. This is what we call price elasticity. And you heard that from Walmart’s CEO yesterday. He says consumers are still spending, but there’s a point at which they are willing to opt for the cheaper options here, especially with those private labels.
Target’s CEO says that the consumer is still strong about. But what they’re willing to pay for right now are experiences, instead of the basic goods. I think it’s interesting that also Target and Lowe’s part of the sell-off today. Yes, they missed on profit, but they kept their sales guidance intact for this year.
And what that tells me, Charles, is that these companies, they will be forced to eat some of the higher prices and inflation and not be able to pass that on to consumers.
PAYNE: No, there’s no doubt about it. And, again, that’s why the dollar stores are getting hammered.
PAYNE: Ironically, their revenues will probably set records, but they’re not going to bring any of it to the bottom line, because producer prices have outpaced the consumer prices.
The irony, of course, is, we keep hearing in Washington it’s all about profiteering. It’s not about profiteering. Look at Target stock, down 25 percent in a single day.
PAYNE: Now, here’s the thing. Recession, right?
PAYNE: One of the big guys that Guggenheim said, we’re going to be down 45 to 75 percent.
Are we already in one? Do we — how much work does the Fed have to do? There’s so many question marks out there, Susan.
LI: Yes, well, I will tell you this, is that stock markets seem to be pricing in a 70 percent probability of a recession. You heard from Janet Yellen, the Treasury secretary, this morning. She talks about a strong household and consumer, because they’re still cashed up.
They have been unable to spend. And you have been able to see some of these companies. They have been raising prices. Look at the airfares that you’re paying, up 20 percent from month to month, and rising at record paces.
Now, I will tell you this also is that there is some optionality out there, meaning that, yes, we’re pricing at a 70 percent probability of a recession, but the Fed, they could — and you heard that from Jay Powell yesterday at The Wall Street Journal conference — is that, yes, they’re behind the curve. They should have raised interest rates earlier.
But there is optionality, in that if they see that the stock market is doing the work for them, which it seems to be, given that were down 1,200 points, they could take their foot off the pedal. And that would actually be, I would say, positive for risk assets up there.
And it’s been pretty orderly, don’t you think? I mean, look at the volatility and the fear gauge. It’s gone nowhere in the last year or so. In this type of sell-offs, and especially if there’s panic, as you have seen in ’87, since we have been referring to retail stocks seeing the worst day since that Black Monday, it’s been pretty orderly.
And people are not running for the exits, and nor is there that huge volume to sell in these markets.
PAYNE: You know, the irony, though, is that Wall Street believes that’s the problem. They think that they’re — they think the retail investor has to suffer more, has to blink more, has to so-called puke it all up, panic.
They will actually think that’s going to be the buy signal. And until we get that volatility, until we get that volume spike, Wall Street is saying, we’re going to go much lower, and that’s what’s concerning me.
It doesn’t have to come to fruition, but that’s what folks on the Street are looking for.
LI: Well, stagflation is the word, meaning that we’re going to be in this period of stalling growth, higher prices, and how the companies react and how cashed up they are will determine where markets go.
PAYNE: All right, Susan, thank you very much. Appreciate it.
Now let’s go to Pennsylvania, where the election results from Tuesday’s Republican Senate primary are still too close to call, this as officials continue to count the votes.
Bryan Llenas is in Hope, Pennsylvania, with the very latest — Bryan.
BRYAN LLENAS, FOX NEWS CORRESPONDENT: Charles, good afternoon from Bucks County, Pennsylvania.
It is the county, the Philadelphia suburb that put Dr. Mehmet Oz just in the lead late last night, ahead of his challenger, former CEO of a hedge fund, Dave McCormick.
As we look at this race, it is really too close to call at this moment. Right now, we have Oz leading, about 2,100 votes ahead of McCormick. If the lead stays at or below 0.5 percent, it’ll trigger an automatic recount, which must be completed by June 7.
There are still thousands of mail-in ballots to count, including absentee and military ballots. In Lancaster County, workers have about 16,000 ballots left to count after a batch of 22,000 ballots misprinted and must now be marked by hand.
in Allegheny County, McCormick’s hometown of Pittsburgh, we’re still waiting on results from 31 precincts after memory sticks on voting machines failed. Those memory sticks with votes have been transferred to a central facility. We’re told counting will easily extend into next week.
We’re told the McCormick camp is feeling confident because mail-in ballots have been going their way. They think they have enough of those uncounted mail-in ballots to overtake Dr. Oz.
The Dr. Oz camp feels optimistic that they can hold their lead. Last night, Oz specifically thanked former President Trump for his endorsement, which boosted his campaign.
(BEGIN VIDEO CLIP)
MEHMET OZ (R), PENNSYLVANIA SENATORIAL CANDIDATE: President Trump after he endorsed me continued to lead into this race in Pennsylvania. He knows all the subtleties of it. He was willing to participate with tele-town halls, which he advised that I do. It was a brilliant idea.
(END VIDEO CLIP)
LLENAS: Another Trump-backed candidate, state Senator Doug Mastriano, also won the Republican nomination for governor here last night. He was the anti-establishment pick who even went to the rally on January 6 and believes the 2020 election was stolen.
Pennsylvania Democratic Senator Bob Casey says that he believes that picking these Trumpian candidates will not serve the party well come November. But the RNC chairperson, Ronna McDaniel, says this energized turnout in the primary means good things for the party come November — Charles.
PAYNE: It’s all about the will of the people, isn’t it? Thanks a lot, Bryan. Appreciate it.
So what can we glean, right, from Tuesday’s primary results, particularly when it comes to the midterms?
I’m going to bring in RealClearPolitics’ Phil Wegmann, along with Democratic strategist Laura Fink, and Inez Stepman with the Independent Women’s Forum.
Inez, let me start with you.
A lot of debate over the influence of President Trump. But I think the last point Bryan made was really most important. There’s overwhelming enthusiasm on the GOP side, no matter what faction of the Republican Party is winning.
INEZ STEPMAN, INDEPENDENT WOMEN’S FORUM: Yes, I mean, I really — both sides had high turnout. So let’s start with that. There was high turnout in the Democratic side as well.
But, really, this is — the question about these primaries is really the influence of Donald Trump. And what is interesting to me is to see sort of the MAGA agenda sometimes split from Trump’s endorsements and which one was more powerful.
Here, he endorsed Dr. Oz, and Dr. Oz is now in this very, very tight run- off with a more sort of fiscally traditional Republican, while the person who really represented the MAGA agenda, probably closest, is Kathy Barnette. And she’s out of this race, but she had an enormous surge.
And a lot of people thought that she was actually really, really close to winning this thing. And she came from behind at the last minute. So it’ll be interesting to see how Trump’s endorsement and some of his heterodox on in terms of trying to establishment GOP, his heterodox policies, how those sometimes split apart.
Sometimes, they’re in the same place, right, with J.D. Vance, for example. But, here, they have split apart, where Dr. Oz has not been — on a lot of the cultural issues especially, has not been aligned with what I think a lot of Republicans understand to be the MAGA agenda.
But he had that personal endorsement from Donald Trump. So, here, those things are split apart.
PAYNE: Yes. Yes.
Laura, your thoughts?
LAURA FINK, DEMOCRATIC STRATEGIST: Well, I would say, thank you. Thank you to Donald Trump for going 23 for 27. Thank you for sending us candidates from the extreme right flank of the party.
Thank you for putting independents, young people, and especially women back on the table for Democrats in the fall. I think this certainly neutralizes some of the headwinds we see with the environmental factors like inflation.
And when you send extremist candidates, then they line up real well with the moderate Democrats that are winning their primaries across the country. So I think it was a big day for Democrats because of the Republican choices and the fact that President Trump really does still have influence on the party.
And I will say this, one other footnote. Madison Cawthorn losing his race shows that, when the establishment and moderate Democrat — or moderate Republicans get together, they can actually stop Trump from sending those extreme candidates. They just choose not to.
PAYNE: Or maybe he just an overly flawed candidate.
Phil, your thoughts on what we have seen so far, not just Pennsylvania, but Ohio. I think, combined, it does feel like President Trump still has a large degree of influence, and the notion that these candidates can’t win a general election.
PHILIP WEGMANN, REALCLEARPOLITICS: Well, I think that, this morning, when Mitch McConnell was asked this question about what’s going on in Pennsylvania, he sort of wipes his brow sarcastically, before then telling reporters that, of course, he feels confident and whoever wins that Pennsylvania race.
WEGMANN: They think that they’re going to hold the seat there.
But everyone knows — and the two other panelists have ably laid out the fact that this is not just a question of whether or not Republicans are going to control the Senate. It’s also, again, a referendum on whether or not Donald Trump remains the kingmaker in chief when it comes to the Republican side of things.
We’re going to get a good sense of that once some of these mail-in ballots are finally counted in Pennsylvania.
And quickly, though, I think that what Laura laid out is very interesting, right? Democrats are eager to run against some of these candidates who are farther to the right. But I can’t help but hear some potential echoes to the same sort of thoughts that were shared in 2016, where Hillary Clinton and others were very eager for Donald Trump. And that didn’t end up…
PAYNE: Sure. Sure.
I think we all heard the echoes. But you just mentioned it.
Real quick, Laura, someone else you talked about, these young voters, these housewives, suburban moms. I don’t know if you have heard of this thing. You kind of referenced this inflation. But we might actually be in a recession right now. The stock market is melting down big time.
These kitchen table issues that President Biden always talks about, they seem to be a very dark cloud over the Democratic Party right now.
FINK: Well, I think you’re going to see the economy improving by the time we get to the fall.
But I think you’re right, Charles. It’s obviously a factor. But so are things like abortion rights and the Supreme Court removing a historic right that women have enjoyed for nearly 50 years. I think that drives young people that you’re talking about. I think that drives women, when you look at that, when you look at contraception being threatened, when you look at gay rights being threatened.
FINK: Don’t forget, no voters are single-issue voters. And they’re going to consider all of these things come fall.
PAYNE: Except, gay rights haven’t been threatened and abortion is not illegal.
But I hear where you’re coming from. Talking points, talking points.
FINK: Well, yes. No, hardly. That’s just facts.
PAYNE: I wish we had more time now. We got to leave it there.
Inez — Inez, you two bites at the apple next time. Thank you all very much.
All right, so we’re just days away, folks, from Title 42 ending at the border. Homeland Security Secretary Alejandro Mayorkas insisting he has a plan to deal with the migrant surge once it’s lifted, but are border communities buying it? We’re going to ask.
And, later, President Biden wants to lower inflation by raising taxes?
The top Republican on the House and Ways Committee, Kevin Brady, he’s coming right up.
PAYNE: Looking live at the Southern border, where Title 42 is set to expire in five days, and officials are bracing for an even bigger migrant surge after the public health order is lifted.
FOX News’ Jonathan Hunt has the details — Jonathan.
JONATHAN HUNT, FOX NEWS CORRESPONDENT: Charles, on both sides of the Southern border, preparations are being made for what may be to come. On the U.S. side, law enforcement agencies joined the National Guard to put on a show of force in Eagle Pass, Texas, today designed to deter migrants on the southern side of the border from trying to cross the Rio Grande if and when pandemic-related restrictions are lifted.
Those restrictions collectively known as Title 42 are due to expire on Monday. And all along the border, officials say they are preparing for a surge and we will deal with it if it comes.
(BEGIN VIDEO CLIP)
JESUS VASABILBASO, TUCSON SECTOR BORDER PATROL AGENT: If Title 42 goes away, the border is not going to be open. So we are going to be processing everybody humanely. But we are going to enforce our immigration laws.
(END VIDEO CLIP)
HUNT: That message was echoed by Homeland Security Secretary Alejandro Mayorkas as he toured an immigration processing center in McAllen, Texas, Tuesday.
(BEGIN VIDEO CLIP)
ALEJANDRO MAYORKAS, U.S. SECRETARY OF HOMELAND SECURITY: Border — the laws at the border will be enforced. If one does not qualify for relief, one will be removed.
(END VIDEO CLIP)
HUNT: But the simple fact is, it is a numbers game.
And, in many places, border agents and their local law enforcement partners are overwhelmed. Even with Title 42 restrictions in place, Customs and Border Protection reported more than 234,000 encounters in April, a record high, even if around 10 percent, a little over 20,000, were Ukrainians who had fled the ongoing war.
There is a possibility, a big one, in fact, that the courts may intervene and order that Title 42 be kept in place. The Biden administration has said, Charles, it will abide by such an order if it comes. And the clock is certainly ticking — Charles.
PAYNE: It certainly is.
Jonathan, thank you very much.
PAYNE: So, how are communities at the border preparing for all of this?
Cochise County, Arizona, Sheriff Mark Dannels joins me now.
Sheriff, I mean, just looking at the number of migrants that were turned away over the last two years, and considering, if everyone says, OK, now we can try it again, to use the word Jonathan used, it’s overwhelming. How can you prepare for something like that?
MARK DANNELS, COCHISE COUNTY, ARIZONA, SHERIFF: Well, the problem we — the problem, the biggest challenge, Charles, is the fact that we do not have active engagement with this administration.
Secretary Mayorkas talks about the border. They say it’s effectively being managed. That — I will disagree 100 percent on that. Over the last 16 months, we have seen our county go — one of the safest counties on the Southwest border to I think one of the most challenged counties on the southwest border.
We have doubled the capacity in border-related crimes in my jail, the pursuits, all the way up to murder. We have had our community challenged at the hands of this administration. It is not getting better. When Secretary Mayorkas says that, I have to debate it. And it’s frustrating to hear that from him.
PAYNE: So, in addition to the crime, to the increase in crime that you have described, resources.
We’re talking about small towns, and in a period where, even in good times, it’s hard. And this recessionary, runaway inflation, I could just imagine the struggles that you’re going to have on every level of trying to just be able to do the things that you want to do for your citizens there.
DANNELS: Well, that’s exactly right, Charles, and the fact that we don’t have the resources to see what we’re doing.
In my county, we deal with almost 100 percent of got-aways. These are the people that are fleeing from us. They’re violent. They’re smuggled by the criminal cartels, the transnational organizations. So our challenges are great right now in a crisis mode.
Now you’re opening up Title 42. And the messaging, I continue to say this, is not there by this administration. We have to secure this border for public safety, national security. And let’s not forget the humanitarian challenges that are being addressed on this border.
Title 42 is a scary day when it goes away on Monday, which, unless a judge blocks it, we’re going to be in deep, deep challenges.
You have referenced the messaging from the administration, I want to share with the audience what Secretary Mayorkas saying about Title 42 ending with respect to not meaning that the border is going to be wide open. Take a listen.
(BEGIN VIDEO CLIP)
MAYORKAS: We are preparing for the end of Title 42, based on the Centers for Disease Control and Prevention’s decision that it will end on May 23. That does not mean that the border is open beginning on May 23.
We continue to enforce the laws of this country. We continue to remove individuals who do not qualify for relief under the laws of this country.
(END VIDEO CLIP)
PAYNE: Sheriff, what are you telling the citizens of Cochise County?
DANNELS: It’s what the citizens are telling me, Charles. They’re not buying it. I’m not buying it.
Telling the American people that don’t live on the Southern border, there might be some credit to what he’s saying, because they don’t see it. What we’re seeing on the Southern border is not what’s being described by Secretary Mayorkas. And he knows that.
And I would challenge this administration to do a blind survey with every Border Patrol agent on the Southwest border, and see what the reality is. It wouldn’t be good for this administration to read what they’re going to say. It’s not working down here.
Well, good luck with everything. We always appreciate when you come on. And, obviously, we will be checking in on you. Thank you so much.
DANNELS: Thank you, Charles. Thanks for having me.
PAYNE: So you think gas prices are bad now, wait until this summer.
And could something Sweden and Finland doing over there send inflation soaring even higher over here?
PAYNE: Get ready to get even more mad when you fill up at the pump, folks. That’s right, a new warning on just how high gas prices will go that will have drivers calling this summer a big bummer.
We’re back in 60 seconds.
(BEGIN VIDEO CLIP)
KARIN OLOFSDOTTER, SWEDISH AMBASSADOR TO THE UNITED STATES: We realize that the security arrangements that we have had and that we have built up for so long, they are not enough anymore.
We have seen that we need to be part of the strongest military alliance in the world. And that’s really important for us.
(BEGIN VIDEO CLIP)
PAYNE: The Swedish ambassador to the United States selling FOX today why her country decided to join NATO.
Meanwhile, Russia sending mixed signals over Sweden and Finland, formally applying for the inclusion in the military alliance.
So, the question, of course, now is, will there be any military fallout?
Here to discuss this the former USS Cole Commander Kirk Lippold.
Commander, thanks for joining us.
Russia has been doing some serious saber-rattling, but it looks like it’s going to happen. So what comes next?
KIRK LIPPOLD, FORMER MANDER, USS COLE: Well, Charles, first, you need to remember that the whole process for Finland and Sweden to join NATO is going to take anywhere from probably four to 12 months in order to completely work out.
Obviously, one of the biggest hurdles right now is to make sure that the concerns being addressed by President Erdogan in Turkey, make sure that we work through those, because they are essentially blocking that right now.
But, at the end of the day, I think Finland and Sweden will become members of NATO. Russia is probably going to react initially with some form of hybrid warfare. Whether they take it military or not, I actually doubt. I think that Putin realizes that he’s somewhat in a corner right now, given the performance of his military, especially in the eastern part, in the Donbass region, and down south, even though they did manage to defeat Mariupol yesterday.
PAYNE: So, you mentioned Vladimir Putin’s back being against the wall.
If you look at like, for instance, Sun Tzu’s “The Art of War,” do you want — do we want to put his back completely against the wall? There was a sense that, at one point, that these buffers, these neutral buffer states, created a sense of calm.
Does this create a sense of panic by the Russians?
LIPPOLD: I don’t think so, Charles.
At this point in time, what we have seen happen is that the only time deterrence in any form has worked, it has been by Putin’s threats to deter the West from taking action. Not one thing that the United States, NATO, or the West has done to date has deterred Putin from taking any action when it comes to Ukraine.
I don’t think they’re necessarily backed into a corner or their backs are against the wall. Nobody is invading Russia. Nobody is threatening to topple their government. Nobody is demanding that we have regime change.
So everything that Russia is doing right now that might justify that action flat doesn’t exist. So the reality on the ground is, nothing that Russia has done to date is going to allow them to be able to push into NATO and create a wider-scale conflict.
PAYNE: And with respect to the war on Ukraine, it feels like Russia has gone to the drawing board at least twice. They have come up empty both times. What happens next?
LIPPOLD: Well, I think, right now, what we’re seeing is that Ukraine is slowly losing territory in the southeast.
By the same token, they are making some advances up by Severodonetsk. And what that means is, if they can regain that territory, and they can get more toward the Russian border, they’re going to have the ability to literally cut off the logistic lifelines that are now supporting the Russian forces in the east and even going south across the southern border area.
So, if they can get in and start interdicting some of those logistics and supply lines, we have already seen where Russia is incapable of maintaining those in the first place. And if they do that, long term, that is why we need to get them the arms with the standoff distance and lethality, so that Ukraine can continue that fight, cut off the Russians and allow them to wither on the vine and keep their forces boxed up, and eventually be able to push them back to the border.
And that includes Ukraine being able to regain the territory in Crimea.
Commander, thank you so much. Always appreciate it.
LIPPOLD: Thank you, Charles.
PAYNE: One major retailer sounding the inflation alarm big time today.
What it means for voters right now and for Democrats and Republicans in November. We have got Lee Carter coming. She’s going to break it all down.
And drivers could be at their breaking point. Doesn’t Jeff Paul know it, as the pain at the pump is stretching from coast to coast — Jeff.
JEFF PAUL, FOX NEWS CORRESPONDENT: Yes, Charles, record gas prices here in California.
Could the rest of the country be following suit? We have got the dreaded details coming up.
PAYNE: Well, you might not have time for it either, but you are dealing with major pain at the pump, as drivers in all 50 states are seeing something at the same time, in fact, for the first time ever.
To FOX’s Jeff Paul in Los Angeles with the latest — Jeff.
PAUL: Yes, Charles there’s simply just no end in sight for these rising gas prices. You can see behind me very painful, $ 6.59 per gallon at this Chevron in Los Angeles.
And something happened today for me, Charles, that’s never happened before. I went to go fill up my pickup truck on the way into work, and my bill was in the triple digits, more than $ 100. And that is something that many Californians are experiencing right now, with the statewide average hovering around $ 6.05 per gallon, a stark contrast to what it was a year ago here in Los Angeles, around $ 4.17 a gallon.
Those prices at the time seemed very high for the rest of the country. But we’re learning that is now sort of the new normal, the first time the price of gas is more than $ 4 in all 50 states. Georgia, Kansas and Oklahoma had yet to cross that $ 4 mark until just this week.
(BEGIN VIDEO CLIP)
MARTIN RICHARDSON, DRIVER: As soon as I turned the corner and I saw that price, and I thought, well, we don’t have time at this point. So it’s a convenience thing for us, so kind of expected as much.
(END VIDEO CLIP)
PAUL: Now, with prices getting so high, there’s been talks about price gouging and Congress introducing the Consumer Fuel Price Gouging Prevention Act.
Well, the U.S. Chamber of Commerce has issued a statement saying they’re against the new measure. They fear it would bring back gas lines like that were seen in the 1970s and discourage new energy production.
And it seems this is maybe a sign of how consumers are responding. For the first quarter, the first three months of 2022, the registrations for new electric vehicles is up 60 percent — Charles.
PAYNE: Yes, $ 4 gas brings new meaning to the United States of America.
Jeff, thank you so much.
Meantime, Target missing the mark, and I’m talking big time, the retailer taking a hit, as inflation keeps giving it hits. All of this adding up to more money worries for voters ahead of the midterms.
Let’s get the read from GOP pollster at Lee Carter.
Lee, today, Peter Doocy pressed the White House on gas prices, and they continue to put the blame on the so-called Putin price hike. Let’s — are we going to take a listen? No, we’re not.
PAYNE: Just tell me what you think. We have heard it enough. We know…
LEE CARTER, REPUBLICAN POLLSTER: We have heard it enough.
CARTER: I think Americans are tired of the blame game.
At a certain point, this president’s going to have to own the pain that the Americans are feeling. It’s showing up in his polling numbers. He’s dropped like across the board, not just — you can’t just look at it holistically. He’s lost 10 points of support among Democrats, which is huge, independents, 30 points, Republicans even still some support.
A lot of people were willing to give them the benefit of the doubt. They’re no longer able to do that. People’s view of the economy is the worst that it’s been in over a decade. On every measure, people are feeling the pain.
They’re not happy. And I think it’s really going to show up in the polls in November.
PAYNE: You know, to me, what’s really remarkable is — besides Vladimir Putin now, every day going after business.
And we keep seeing evidence that businesses aren’t passing this — these costs on. Target is a prime example of that. Target’s same-store sales came in way better than Wall Street thought. They couldn’t bring any of the money to the bottom line. No one to bring it to the bottom line. No one can pass on these costs.
So is it a mistake for them to keep suggesting capitalism is the villain here or these greedy corporations or these profiteers? I mean, can that backfire on them?
CARTER: Absolutely, it can, because the big companies and healthy companies are the backbone of our economy.
When you think about what we need for innovation, what we need to keep growing, we need healthy companies. That’s what this country is all about.
I think what the Democrats have found is that big companies are red meat among voters. It’s — there’s this feeling out in the country, about 65 percent of Americans right now feel that things are unfair, that there’s this imbalance and that companies are greedy, they’re ready to profit off of them, their backs. They’re all hardworking Americans who have kept us going over the last 2.5 years.
And that’s easy for people to capitalize on. But the bottom line is this. Healthy companies make for a healthy America. And it’s not going to work in the long run. And I really think, if you look at where people feel right now, the polling suggests that Republicans are going to win in the midterms. And as long as the economy is on the line as the number one issue, the Republicans have a clear path to victory.
PAYNE: Is there anything that people say in the polling they’d like to see done about this?
CARTER: Yes, well, 80…
PAYNE: Like — because they’re talking price controls. They’re hinting at that. There’s all kinds of crazy suggestions out there that many people think would actually make it worse.
CARTER: There are many people that think that things will make it worse, but 80 percent of Americans right now saying this administration is not doing enough to combat inflation.
So they’d like to see anything tried, rather than some of these things that are just — we’re just sitting here blaming everybody else. But I do think the bottom line is that people are going to want to see more production of the oil here at home, so that we can start getting some ease there.
There’s a lot of other things that can be done. And I think, if the Republicans start talking about what they will do in November if they take power, that’s going to be really what people want to hear right now, because people are struggling.
PAYNE: Yes, that’s the one area that I have seen some question marks, like, OK, we know President Biden, more or less, he declared war on fossil fuels. We heard how much electric vehicle registrations are up. That was the goal. That was the goal, to make us feel pain at the pump.
But we’re not hearing, are we — we’re not hearing enough, right, from Republicans, like, what is the alternative? What’s their plan?
CARTER: That’s exactly, I think, one of the biggest problems Republicans have.
And I look at the polling. And you think, the Democrat approval rating is so low, you would expect Republicans to be doing really well in a generic ballot. But that’s not the case, because they’re not putting anything forward, except, look how bad this is. We can’t afford to have this happen.
That’s not a playbook for success. A playbook for success lays out the map to a more prosperous America and give us hope again. When you look at the fact that only 14 percent of Americans right now feel optimistic or excited about the future of this country, Republicans have an easy job to paint a better future of what they’re going to do.
It’s not about attacking Democrats. They don’t need to do it. They can just move forward.
PAYNE: And they have got a real receptive audience, right? People do want to hear something concrete.
PAYNE: Thanks, Lee.
CARTER: Thank you.
PAYNE: Appreciate it.
All right, folks, so higher taxes, how about that one to lower inflation? President Biden keeps pushing it.
House Ways and Means Committee Ranking Member Kevin Brady, let’s just say he ain’t buying it. He’s next.
PAYNE: President Biden pushing higher taxes to tame inflation, but would that even work?
Joining me now, House Ways and Means Committee Ranking Member Texas Republican Congressman Kevin Brady.
Congressman Brady, it’s always great to have you on these topics.
REP. KEVIN BRADY (R-TX): Good to see you, Charles.
PAYNE: It’s good to see you too.
PAYNE: It’s almost mind-boggling, to be quite frank with you, that higher taxes and more spending is the solution to inflation. Has anyone been paying attention for the last two years?
BRADY: No, you’re exactly right.
This is a mystery economic principle that just surfaced. And, look, the numbers right now for them are really bad, because inflation has been accelerating. And you have probably noticed, the last three months, we’re averaging 9.9 percent inflation for consumers and for the last almost half- a-year, double digit on our wholesale prices, which means those are going to end up — going to come into those consumer prices.
And the housing inflation really hasn’t shown up yet. So the White House has got bad news, economic news on the price front coming forward. So it makes no sense. In fact, Charles, you probably noticed this, but four countries are lowering their business tax rates to fight inflation, knowing those taxes end up in the bottom line for consumers in higher prices.
And we have a president going exactly the opposite direction at exactly the wrong time for families and workers. So, look, his whole economic policies have been puzzling, to say the least. And this is another one.
PAYNE: Yes, I have always said, though, to be quite frank, it’s — I don’t think they are truly economic policies. I think they’re driven by climate.
They have got — their goal is climate change. That’s the agenda. And every now and then, they will try their best to wrap something in the veneer of economics. But when it doesn’t make sense, and when it does more harm than good, someone’s got to push back.
BRADY: Yes, it — I think you’re right.
And it really is driven by this agenda. And another great example economically is, all their incentives to pay people more to stay home than to return to work and reconnect, they still — they still don’t recognize why more workers should be a focus and how it helps us on inflation and pricing…
BRADY: … because if we don’t have the people to assemble the products, man the production lines, deliver them or service them.
And, again, I just think they are driven by this ideology.
PAYNE: What do you make of — this week, it has been so intriguing.
You have had a couple of the richest people who’ve ever walked the planet, mostly liberals, maybe you can consider one a libertarian, Jeff Bezos and Elon Musk, pushing back on the White House and finally standing up.
In fact, even Elon Musk, from what I understand, said he’s going to vote Republican for the first time.
BRADY: Yes, I think they’re just tired of the nonsense out of the White House, these policies, the blame game, just the denial and really dismissing and of really some of the key economic factors.
And with this country, I think they’re just tired of the route that is being taken. And I think a good example of the reverse is, after the tax cuts, we saw not only the most competitive economy on the planet, but we lifted almost six million people out of poverty. Paychecks were rising twice as fast as inflation.
BRADY: And those who are people of color and those with the least skills were seeing the biggest gains.
These are societal gains that our free enterprise system made, not government.
PAYNE: Yes, those were organic.
We had similar gains in the last year, but that was driven by trillions of dollars…
PAYNE: … and not at the — not at the — it’s so amazing, because you can’t compare the two.
One created organic gains, where we saw everyone enjoy — the same tide lifting all ships, to your point. Now we’re dealing with the runaway wage- price spiral. We have heard — we’re hearing from companies this week that they may have to start laying people off.
So we may lose all of the gains we have had quickly if nothing is done. I mean, but what can be done?
PAYNE: You know folks on the other side of the aisle. Is there any glimmer, any chance they would pivot?
BRADY: Yes, I don’t think so, Charles, I wish they would, for the sake of the economy.
But they’re doubling down, obviously, on the taxes and the spending.
BRADY: But their focus — look, if they were smart, they would — they would make number one priority getting workers back on the job, the 24-to- 54-year-old.
Their second priority would be stop the COVID era spending, get that out of the budget. The third one is, let’s do more on the supply side, encourage businesses with lower rates to invest in the supply chains in all those technologies and equipment that will allow us to move out of this inflation fight.
BRADY: But they’re not going to do it.
It’s always a pleasure to see you, Representative Brady. Thank you so much.
BRADY: Good to see you. Thanks, Charles.
PAYNE: All righty.
Well, discouraged over the housing market? How you can turn a three-bedroom home into a 14-bedroom home. That’s next.
PAYNE: Mortgage rates increasing, rents skyrocketing, and Americans are turning, well, now to creative housing solutions.
Enter stackable sleeping pods that can make a single-family home fit 14.
Brownstone Shared Housing’s James Stallworth and Christina Lennox join me now on their new invention — innovation, rather.
Guys, you got a 14 — how does it work? Tell me how it works.
JAMES STALLWORTH, BROWNSTONE SHARED HOUSING: Yes, so we have these sleeping pods we created, that they’re just furniture that we can put into the house.
And it allows more people to share a room than would typically be able to with less private bunk beds or single beds. And we create the space where they have their own lights and fans and an area to work at a desk, and then just design the house, so it can accommodate everyone.
PAYNE: So how’s it been going so far? What’s the demand been like for this?
STALLWORTH: Yes, we have a lot of people interested.
And since we have gotten some publicity, a lot of people are applying. Thousands of people have come to our Web site. And we don’t have any spots open. But even before all of that, we always had the houses full.
PAYNE: What I’m interested in is, what are they — when people inquire about it, what’s the number one reason that they’re curious? Is it money? Is it because what’s happening in the housing market, what’s happening with inflation, or do they just like the idea of even being able to have — fit more people under the same roof?
CHRISTINA LENNOX, BROWNSTONE SHARED HOUSING: So a lot of it’s money. It’s easy to get into because there’s no security deposit.
And so that’s really appealing to them. And the rents are really, really high here in Palo Alto. And so, normally, for a one-bedroom house, it would be around $ 3,200-plus. And so, yes, they see that $ 800 price tag with the utilities included, and that’s really appealing to them, because our housing market is pretty insane right now.
PAYNE: Yes. No. Yes, it’s probably the worst, Palo Alto.
Hey, let me ask you, where do I put my 72-inch TV if I get into one of these things?
STALLWORTH: So we provide a TV that everyone shares. We have a little movie room that we set up, and there’s also space to work. So it’s not just a house full of pods.
PAYNE: Anything about the culture? Because I know something similar to this took off in Japan, different sort of cultural ideas
Americans, we like those McMansions, right? We like our La-Z-Boys. Are you seeing any sort of cultural pushback?
LENNOX: Not at all, actually.
Surprisingly, it’s warmly embraced by our residents. And everybody has a culture of respect, mutual respect, and love for each other. And it’s just like a nice little warm community inside of our house.
And I like it because there’s people from 15-plus different countries now stayed in our house. And one of our unifying beliefs, basically, is that we — we do need to respect each other. And kind of our differences, they draw us together.
LENNOX: And that’s the most important thing for us.
PAYNE: All right, so you’re Silicon Valley. How long before the IPO?
STALLWORTH: Well, we would take an offer tomorrow if it came to us.
PAYNE: I’ll tell you what. The IPO market has dried up a little bit, but something this innovative.
Are you concerned about copycats? I mean, is there any sort of patents that you guys have on this? It’s a brilliant idea. I’m sure it will take off in parts of this nation, but it doesn’t seem like it’d be hard to duplicate.
STALLWORTH: Well, it actually would be very hard to duplicate.
And the reason is, it’s easy to do it wrong. And, as you know, many people have tried to do this. And we have been able to build a brand. And we have a lot of customers and a lot of data.
And so, if someone wants to get a six-month to a year late start to a race, then we welcome that competition.
PAYNE: All right, I would love to see you guys get six Democrats — seven Democrats and seven Republicans in there from Congress, and maybe for like four or five weeks, and see if they can maybe come up with some ideas to help get this country back on the right track.
PAYNE: It’s a fantastic idea. And we will be rooting for you, for sure.
Whenever they come in my size, give me a call.
All right, folks, that will do it for us. Of course, make sure you catch me on “Making Money,” FOX Business, 2:00 p.m.
Now, listen, this market is in serious, serious trouble right now. Take a peek at what we’re going to do tomorrow. I have got you covered.
In the meantime, here comes “The Five.”
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