Lee Elci: You are listening again to 94.9 News Now, broadcasting loud and proud, out over Connecticut, Rhode Island and Long Island. It’s time for us to join our very good pal again. The-Red-Line. com. That is where you can find Red Jahncke, national columnist, also for local publications, including the Connecticut Examiner, and of course, everything he writes gets posted up on that website. The-Red-Line. com. Let’s welcome Red Jahncke back. Red, good morning, sir. How are you?
Red Jahncke: Good morning, Lee.
Lee Elci: Alright! I want to ask you before we get into some of the things I’m sure you want to get into. I wanted to quickly ask you, we have a guest coming up who’s done extensive research again. But the idea is this, 30 million dollars forgiveness of medical debt. What’s your thoughts on that here by the governor.
Red Jahncke: This a function of the combination of immigration non-enforcement, and the national policy, that, if someone appears in the emergency room, you can’t deny them if they can’t pay. This is what’s called non-compensated care. It piles up at the hospitals. Hospitals have to eat it. It sits on their books. They load that debt onto all their other charges in order to recover it. So, the governor is transferring that to a nonprofit [Undue Medical Debt, aka Medical Debt Resolution Inc.] that will officially forgive the debt. It’s $30 million that’s leaving the books of the hospitals. But what the hospitals are actually getting for that. Maybe you know the figure, but it’s nowhere near $30 million. In essence, we [Connecticut citizens] are going to pay for that. People who have medical insurance, are responsible enough to have some kind of coverage. Our bills are going to go up. The nonprofit involved here is not taking on this debt dollar-for-dollar. It’s $30 million face amount. They’re probably giving the hospitals $2 million [actually, the norm is 1 cent on the dollar].
Lee Elci: Okay? Alright! Yeah. I’ll find that number out when we come back. Switching from that, Red, to interest rates. They’re going to drop the interest rates again here, thoughts on the drop of our interest rates.
Red Jahncke: Well, Lee, I just do want to set up, as I will from now through the end of the upcoming legislative session. At the beginning of every one of our talks here: state employees have gotten a 33% wage increase under Ned Lamont. It is unfair, unsustainable. If you polled all your listeners right now. I can’t imagine more than 10% have received a pay raise more than 33%. The national average for private sector employees is 23% over that period.
Lee Elci: I know it’s a big deal. Government employees in Connecticut have got themselves a pretty sweet deal. The legislature needs to know about that. So, we appreciate your trying to make sure everybody out there understands what’s going on here in the State of Connecticut. Now, give me a little interest rate information. What’s happening.
Red Jahncke: Well, I think what’s significant here is not that the Fed is going to cut again. It’s going to cut interest rates 25 basis points. For those unfamiliar with the lingo, that means 0.25%. That’s the interest rate that the Federal Reserve charges Member Banks — Chase Manhattan, Bank America, Wells Fargo. So that is their policy rate. The significant thing is, there are a number of observers who don’t believe the Fed should be cutting rates now and believe this should be the last interest rate cut because we’re headed into potentially very inflationary times based upon continued deficit spending and the acknowledged inflationary impact of President-elect Trump’s tariff policy. If he raises the tariffs 10%, that means all imported goods are going to be 10% more expensive to us consumers, which is going to lift up inflation. So, we are going to live with these relatively high rates.
Lee Elci: So, moving forward with Trump. If, in fact, we do see a continued sort of escalation in interest rates, and people are still struggling, you know, to buy food and pay for the essentials. That’s an ultimate lose for him. I mean America is not going to be happy about that.
Red Jahncke: Well, let’s look at the uniqueness of a president, a two-term President who has had a long intermission between his two terms. John F. Kennedy said, there is no school for presidents. So, when you take office in your first term, what’s coming at you is always what no one’s seen before. You’re basically just trying to get your feet on the ground and manage affairs in your first term and then, in your second term, you barely have a chance to catch your breath after running for reelection. It’s hard to change from your first term.
Now, in this cycle we have a President-elect who has the experience of having been President. He has had four years to contemplate what he did in his first four years. He has developed a very clear plan of what he wants to do in his second term. He’s not a lame duck. He’s going to ram through what he wants to do. It has been best enunciated by Elon Musk. He’s going to put the country through a lot of pain to bring the country back to where it was before we had this ridiculous drift left, and this ridiculous drift away from any sense of fiscal responsibility and economic competitiveness.
Lee Elci: Right.
Red Jahncke: So, number one, he is going to put tariffs on Chinese goods. He’s going to try to reshore U.S. manufacturing. He’s forcing multinational companies — read that, American companies — who’ve shipped much of their production abroad. He’s going to force them to bring their production back to the States. And it’s not going to be comfortable. It’s going to be painful.
Lee Elci: Alright!
Red Jahncke: Consumers are going to have to pay more. The hope is that when a factory that would have been built overseas opens up here, that the higher prices will enable that manufacturer to pay the higher U.S. labor rates, and that will ultimately be a win. But that’s going to be painful. Any adjustment of that magnitude is going to be real painful. There are going to be some people who get crushed. There are going to be some people who are enormous winners. So, that’s the theory on interest rates. They’re not going down. This is the last interest rate cut, I would advise people to expect it to be last for the next four years.
Lee Elci: Alright, Red Jahncke with us, as he is each and every Wednesday. We thank you. The-Red-Line.com. Red, we won’t talk for a couple of weeks, so have a good Christmas. Have a good New Year’s, and we’ll catch you next year, I guess is how we leave it so have have a good one.
Red Jahncke: Next year on 94.9, right?
Lee Elci: That’s right. Right here.
Red Jahncke: Merry Christmas, Lee! And have a Happy New Year, and I’ll look forward to the new one with you.
Red Jahncke is a nationally recognized columnist, who writes about politics and policy. His columns appear in numerous national publications, such as The Wall Street Journal, Bloomberg, USA Today, The Hill, Issues & Insights and National Review as well as many Connecticut newspapers.