Andy Puzder, former CEO of CKE Restaurants, says the economic shutdown cannot extend past late April because the CARES Act provides only short-term survival aid, not justification for prolonged closure. He argues inflation is unlikely in the near term since demand is low, but warns of long-term price pressure when the economy reopens.
Andy Posner. Andy, where are you holed up?
I'm holed up in, uh, in beautiful Nashville, Tennessee.
Yeah, you're right. That is beautiful Nashville, Tennessee. Do you get out?
No, I've got, you know, I'll be 70 in July and I've got asthma. I don't have asthma now, but I have it, you know, it can be, it can be activated. So, uh, so I'm stuck. I can't go anywhere.
Are you with somebody?
Yeah, my wife, my wife and I are here. We're both, we're both holed up and, uh, yeah, it's not so bad. I'm doing a lot of writing. It gives me a lot of time to think through things. And, uh, I can do TV on my iPad. I can do interviews like yours, this radio interview, but I figured out how to use my iPad to do Skype and, uh, and television interviews. I'm never going back to the studio. This is great. I have my blue jeans on and a suit jacket and tie. I'm good.
You don't even need blue jeans.
Yeah, well, it's true.
I know a guy who did it in shorts, you know, and he had a suit, you know, suit jacket, tie, and shorts. So it's— that's— it's— anything's possible now. It'll be interesting to see if this does change, if this changes that aspect of the media. Anyway, Andy, uh, a few questions here. Really, I guess I'll begin with the big one. How long, and there may not be an answer to this, but how long can we go on like this without semi-permanent damage?
You're right, there's not an answer, but I wouldn't think much past the end of April. I mean, this can't last. Now this new bill, the CALM Act, or the CARES Act that Congress recently passed, does a lot to ease the pain. I mean, a lot of businesses that would have been gone, that we would not have seen come back when this is over, are going to be able to make it through because of this. A lot of people that were in— I mean, it's a lot of stress when you can't pay your bills, you don't know where you're going to be able to buy food for your family. I think the act goes a long way towards alleviating those fears as well. But I don't think the government can drag this on much by the end of April, at least not a complete shutdown. Complete shutdown. I think people, you know, elderly people, people with— that are at risk will need to continue to isolate themselves for a period of time until we come up with therapeutics that work or a vaccine that works. But getting the general public back to work, I think we're going to— I don't see us going much beyond a month.
I agree with you, but there are political leaders talking about June.
Well, June would be pushing it. Um, I don't know if they've got another, you know, some other kind of legislation too. And I wouldn't call it stimulus, I'd call it, uh, survival.
Yeah.
Survival.
So let me ask you about that. What is it going to do to the dollar?
Uh, well, you would expect inflation from this because we're, we're, we're, you know, printing so many dollars with respect to this that when there's an abundance of dollars, you usually find inflation. But for inflation, there has to be demand. So I don't think the inflation's going to come along until there's a demand for products or demand for services. Uh, but eventually I think you'll see more inflation than we've seen over the past 3 years, right?
Because people won't be buying as much, even if it ended, even if it were cured tomorrow, if you could take a pill and there's no chance, you know, you'll get the sickness. it would still be an issue. People, people aren't going to buy like they were buying 2 months ago.
Right. And that, and demand is really what, when, when prices go, prices go up when things are in short supply and high demand.
Right.
And right now we don't have that high demand. So we're not, I don't think we're going to see that kind of inflation in the short term, but in the long term, I think when demand comes back, I think you will see prices going up more materially than we've seen in the past because there's going to be so much liquidity out there, which will increase demand. Um, so I, I think long-term, uh, we're— one, the other issue we're gonna have to do about this is the deficit. I'm hoping this will inspire or incentivize a conversation about how we can reduce government spending, how we can fix our entitlement programs. As you say, you know what, those programs—
let me, um, on this one I have to just tell you a little anecdote. A friend of mine, in the early days, he was an Israeli, in the early days of Israel, you had to get your phone from the Ministry of Communications. He said to the guy, "How long will it take?" The guy said to him, "6 months." And he said to the guy, "Is there any hope that I'll get it sooner?" And the guy said, "Sir, there's always hope.
There's no chance." Yeah, well, I agree with you, but we gotta do something.
I agree, all right, hold on with me. Andy Puzder, who should have been Secretary of Labor, is on, on with me.
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