POLITICAL REPORTER MARY LAHAMMER.

FIRST UP IN THE SHOW, MARY LOOK AT OUR UNCERTAIN ECONOMY.

>> Mary: YEAH, THAT'S RIGHT, ERIC.

BIG LAYOFF AT 3M, AND A LOOMING DEBT CEILING CRISIS.

HERE TO TELL US WHAT THEY MAY MEAN FOR OUR REGION, LEWIS JOHNSTON, HE'S AN ECONOMIST WITH THE COLLEGE OF ST. BENEDICT AND ST. JOHN'S UNIVERSITY.

LET'S START WITH THE NUMBERS, NATIONAL JOB NUMBERS.

>> 250,000 NEW JOBS, UNEMPLOYMENT RATE'S AS LOW AS IT'S BEEN SINCE THE LATE 1960S.

ESPECIALLY GOOD WAS EMPLOYMENT RATE, UNEMPLOYMENT RATE FOR AFRICAN AMERICANS, IT'S THE LOWEST T'S EVER BEEN SINCE WE STARTED RECORDING IT IN 1972.

>> Eric: THE FED HAS MADE A DECISION THIS WEEK I THINK IT'S THE TENTH TIME IN A YEAR TO RAISE INTEREST RATES.

DOES THIS REPORT IN ANY WAY AFFECT THEM OR COMPLICATE THEIR LIVES?

>> NO, AND A LOT OF PEOPLE ARE SAYING IT DOES, I DON'T THINK IT DOES BECAUSE THEIR ATTITUDE IS WE WANT TO GET INFLATION DOWN, THE JOB MARKET IS STRONG SO THIS MEANS WE CAN KEEP EITHER RAISING INTEREST RATES OR KEEP THEM AT THE LEVEL WE'RE AT NOW AND NOT WORRY.

>> Mary: WHAT ABOUT THE TRICKLE DOWN ON INTEREST RATES AND THE HOUSING MARKET?

BECAUSE OUR STATE ECONOMIST HAS SAID THIS IS ONE OF THE RED FLAGS HERE.

THIS IS DEPRESSING THE ECONOMY AND HOUSING ARKET.

IN MINNESOTA AND ACROSS THE COUNTRY.

>> AND ON PURPOSE IN A SENSE.

THAT'S WHY THE FED HAS RAISED INTEREST ATES, THEY WANT TO SLOW THE ECONOMY DOWN, THE FIRST PLACE IT'S GOING TO SHOW UP IS IN THINGS LIKE HOUSING.

ANYTHING THAT'S SENSITIVE TO INTEREST RATES, AND AS YOU SAID IT'S GOING TO TRICKLE DOWN, ZIP THROUGH HINGS, SO THE 3M LAYOFFS AND THINGS LIKE THAT.

THE BANK FAILURES THAT WE'RE SEEING.

IT'S ALL BECAUSE THOSE INTEREST RATE INCREASES ARE NOW START TO GO FILTER THROUGH.

>> Eric: WHAT HAPPENED AT 3M?

>> SO WHAT'S HAPPENING IS SLOW DOWN IN DEMAND FOR THEIR GOODS THAT THEY'RE PRODUCING.

AND THEY'RE I THINK BEING PREEMPTIVE, THEY SEE WHAT'S HAPPENING ON THE HORIZON.

AND SO THEY'RE TAKING ACTION NOW TO MAKE SURE THEY DON'T GET CAUGHT LATER ON HAVING TO CUT WORKERS IN A HURRY.

IT'S LIKE BEING STRATEGIC NOW RATHER THAN JUST HAVING TO HURRY UP AND DO IT.

>> Mary: WHAT ABOUT THE ECONOMIC IMPACT OF THE FOREVER CHEM CHEMICALS?

RIGHT NOW IN THE HOUSE AND SENATE CONFERENCE COMMITTEE THERE IS LANGUAGE THAT GOT INTO A BILL DEALING WITH THAT.

>> THAT'S A BIG ONE BECAUSE THAT PUTS A BIG LIABILITY ON THEIR BALANCE SHEET AND WE DON'T KNOW WHAT IT IS YET AND THE STOCK MARKET IS ASKING HOW MUCH IS THIS GOING TO COST YOU AND TRYING TO PRICE THAT OUT AND SO THAT'S HURTING THEIR STOCK, THAT'S MAKING THEIR OUTLOOK MORE DIFFICULT, AND THAT'S PARTLY WHY THEY'RE LOOKIN' ALOUD.

>> Eric:AHEAD.

>> Eric: THE BANKING CRISIS SEEMED TO AFFECT REGIONAL BANKS.

IS THAT TAKEN CARE OF?

CANAIRRY IN THE COAL MINE OR SOMETHING?

>> WE HOPE IT'S BEEN TAKEN CARE OF.

REALLY THE BIG PROBLEM AGAIN IS THE FED'S BEEN RAISING INTEREST RATES, THESE REGIONAL BANKS THEY HAVE BONDS AND THINGS THAT ARE LOSING VALUE AND SO BIG DEPOSITORS WHO AREN'T NECESSARILY INSURED THEY'RE MOVING DEPOSITS TO BIGGER INSTITUTIONS THAT ARE MORE SAFE.

AND THAT'S HURTING OTHERWISE HEALTHY BANKS.

>> Mary: ANOTHER RED FLAG FROM THE STATE ECONOMIST, D.C. AND THE POLITICS IN D.C. AND THE DEBT CEILING, HOW BIG OF A DRAIN IS THIS?

>> IT'S A BIG DRAIN AND WHAT BOTHERS ME ESPECIALLY IS IT DOESN'T NEED TO BE THIS WAY.

WE HAVE BILLS THAT WE HAVE TO PAY, ATTORNEY ISSUE DEBT TO PAY THEM, AND AD WE'VE GOT A SITUATION WHERE ONE GROUP IS SAYING, WELL, WE'RE NOT GOING TO PAY THOSE BILLS NLESS YOU MAKE THESE PROMISES ABOUT THE FUTURE.

WELL, THAT'S, THAT'S NOT THE WAY TO MAKE A BUDGET.

>> Eric: COURT ACTION TO CHALLENGE THE CONSTITUTIONALITY?

IS THAT POSSIBLE?

>> YEAH, WELL, THE WAY IT WOULD WORK IS THE 14TH AMENDMENT TO THE CONSTITUTION SAYS THE UNITED STATES WILL MEET ITS DEBT OBLIGATIONS, IT WAS PASSED OVER THE CIVIL WAR TO ASSURE THE REST OF THE WORLD WE'RE GOING TO PAY OUR DEBTS BACK.

IN 1917 THEY PASSED THIS DEBT LIMIT AND NOBODY'S EVER BEEN SURE IF THAT'S CONSTITUTIONAL SO THE WAY IT COULD WORK IS THE BIDEN ADMINISTRATION COULD JUST GO AHEAD, START ISSUING DEBT AND THEN SOMEONE WOULD HAVE TO BRING A SUIT.

>> Eric: WHAT ABOUT THIS INFAMOUS TRILLION DOLLAR COIN?

TOO MUCH OF A GIMMICK?

>> I SHOULDN'T LAUGH TOO MUCH.

IT'S POSSIBLE BUT I THINK IT'S WAY TOO MUCH OF A GIMMICK.

>> Mary: WHAT ABOUT PIVOTING BACK TO THE STATE THEN, RED FLAGS IN OUR ECONOMY, WE HAVE A $17 BILLION SURPLUS BUT WE HAVE A LOT OF CONCERNS, ANOTHER OF THEM IS WORKERS AND THE WHOLE STATE BUDGET IS KIND OF FASHIONED AROUND MAKING MINNESOTA MORE ATTRACTIVE, BRINGING PEOPLE HERE, WE DESPERATELY NEED PEOPLE TO MOVE HERE SO WE NEED HOUSING AND WORKERS.

HOW DO WE GET THEM?

>> WELL, AND WE NEED EDUCATION, WE NEED ALL THOSE THINGS THAT EMPOWER OUR WORKFORCE.

AT THE SAME TIME, THOUGH, WE'RE DOING SOME THINGS THAT I THINK ARE GONNA PUSH PEOPLE AWAY OR MAYBE NOT ALLOW BUSINESSES TO ATTRACT THEM.

THIS WORLDWIDE TAX REPORTING THAT'S ON THERE I THINK THAT'S A REALLY BAD IDEA.

THERE'S A TOP TIER IN THE TAX BRACKET THEY'RE TALKING ABOUT ADDING.

I THINK THOSE THINGS N A SENSE ARE GOING TO OFFSET THE GOOD STUFF THAT THEY DO SO I WISH THEY WOULDN'T DO THAT.

>> Mary: DOES THE GOOD STUFF ACTUALLY ATTRACT PEOPLE?

>> OH, YES.

I THINK IT DOES.

>> Mary: SOME OF THE POLITICS AND THE POLITICAL, BEING A REFUGE FOR A VARIETY OF PEOPLE.

>> IT DOES, I THINK IT REALLY DOES.

AND THE PROBLEM IS IS THAT WILL IT HAPPEN FAST ENOUGH AND WILL IT BE ENOUGH TO OFFSET THE NATIONAL TRENDS IN DECLINING IMMIGRATION?

BECAUSE THAT'S WHERE WE COULD REALLY GET SOME HELP AND RIGHT NOW WE'RE JUST NOT GETTING THOSE IMMIGRANT FLOWS.

>> Eric: REAL QUICK, CHANCE OF RECESSION?

>> I THINK ONE IN THREE, ONE IN FOUR.

>> Eric: ALL RIGHT.