has high prices. No, our prices are coming down tremendously from the highest prices in the history of our country.
And joining us now is Jay Clayton. He is the U.S. Attorney for the Southern District of New York and a former Chairman of the SEC. I'd like to be able to take the president's side. Just explain how to explain it, because prices in certain sectors are coming down, like energy. And he's right about that. And that could be, that could filter into other parts of the economy and cause inflation, which is really never zero or lower. It can be, but that's not good.
That would be bad. That would be bad. That would be Japan.
So the president, you know, he shouldn't really say that inflation is going to zero or that prices are actually negative. Some of them are. Food prices can be volatile and could go negative. But what we want to do is get the rate of increase below where the Fed thinks it needs to, you know, to raise rates or not cut rates, because it's about 3% right now, which is about where it was when Biden left office, up a little bit. But the affordability issue is from the 22% increase in prices and inflation under Biden. There's just full stop right there. That's the affordability issue. And you ought to be able to explain that.
Better, right? That's right. And look, I think that with the economic team, President Trump and the economic team led by Scott Bessent, you have people who very much understand this. And it was a, they were, they were thrown, you know what I would say, the worst economy for the average American in my adult lifetime in terms of the, like you said, the incredible increase in prices at the household.
Except for it's part of the reason that they won. And now Americans say, fix it, make it better. And you've got, they were handed, they were handed a situation where Americans felt like their dollar was not going as far.
But if absolutely, we should all, like, face up to that. Let's go with, let's go.
Average weekly wages fell from the time Biden took office to when he left. That's why people feel like. And now that's not the case anymore. Prices are still high at both ends. Wages came down.
The only reason we brought this up was to talk really about Mamdani, because that's what elected him, is affordability. And that's where you come in, because you got to save this city and keep it safe.
All right, let's go. Let's go. National affordability. And then we'll come to the city. National affordability for things that the Trump administration has focused on. You hit one, energy, already a big impact. One of the things on energy that I would love to see bipartisan support for is transmission. We talk about all the above, green energy, fossil fuels, etc. One of the reasons why your electric bill is still going up in New York is transmission. We have not invested in transmission. They're bringing prices down. They'll invest in transmission. Health care. Okay. Why? Why is health care so high? We have a cost-plus pricing model with opacity to the consumer. Get, get information to the consumer. You have Mark Cuban on. He's absolutely right on this. President Trump understands that. Scott Bessent understands it. Housing. Housing is a disaster because we subsidize the heck out of it at the federal level, and we restrict the heck out of it at the local level. Do you know what it costs to build an affordable unit in New York now? $750,000. If the replacement cost for affordable units, or the incremental affordable unit, is 750 grand, that's why prices have gone way up. And what most of that, most of that delta, like I would say, you know, way above the rate of inflation, is due to overregulation in the construction and the time it takes to build homes. So you've got all those. And what else do people really care about? The cost of education. The cost of education has outpaced inflation again, because we subsidize the heck out of it. And we sell a whole bunch of things adjacent to education that we make people buy. You know, it's not about the cost in the classroom. It's about all those extra costs that you make everybody buy who goes to college. We've got all of that. Donald Trump can talk plainly to people about that, and he's doing it. And I think focusing on those four areas, we're going to, we're going to, we're going to see results.
And Hassett was on earlier this week, Kevin.
And he said we're going to wage increases since. And I think he was implying since inflation never goes negative. So we're locked in those Biden increases of 22%. Those are, those are locked in. Prices are going to stay higher. That we need to grow out of it in terms of income levels. This is to feel like you can afford.
This is why everyone fears inflation, because the effects of a jump in inflation, they never go away.
They never go away. And that's why, that's why.
And you add another 3% on.
Economists do that. So Mamdani ran on that. And now I don't know what happens to the city that you said. One of the things you can.
Go to the city. What, how are we going, how are we going to bring the cost, the cost of incremental units in New York down or actually keep it from increasing? What's, what's.
Let's say you can only charge 200,000 to build a house.
Yeah, that no one builds a house, you know, I mean, that's the, that's crazy.
Okay. So one of the things that happens in cities is whether you have competence in government. Now, we had the most competent big city mayor, again, in my lifetime in Mike Bloomberg. You know, things, things in the city were running. They were running. Well, we, the New York people, need to demand competence across government. We, we have a terrible New York City Housing Authority, you know, $12 billion a year. And the results for our most vulnerable citizens in New York are poor. You know, one of our jobs is fighting crime in those housing projects. That's, that's something that we are keenly focused on. But we need to do better in housing. Our, our prison system, the cost of an inmate at Rikers is into the multiple hundred thousands. It's a, it's a wide range when the cost in the federal system is, you know, 50 to 70,000.
And that's a function of unions. That's a function of labor. That's a function of what?
All the above. And we, we, we need to do better at these things. You know, we're, we're doing great. We're doing great. The New York Police Department, I mean, what, they are amazing partners to us and they are really well run. You know, top to bottom, cops care. The brass cares. They really care about quality of life.
Have you spoken to the mayor-elect in this new role?
I'm sure, I'm sure. Does that work? I'm sure at some, at some point we will have to interact. His people, my people at the top. And I look forward to working with him. We, we, we have a great relationship with the New York Police Department. We have, we have good relationships across other parts of New York City. The better those relationships, the better we're going to do with public safety.
One of the things that we were talking to Kathy Wylde about just yesterday, who's now on the transition team and was working with the New York City Partnership, is this report just last week that the mayor-elect said that he was not going to be sweeping these homeless encampments, sort of tented camps, and what that portends for quality of life, but also just the humanity of some of the homeless and also crime. And I know you've been trying to take drugs off the street and other things in your role and sort of how you think about that. She was pretty insistent that those reports were incorrect or misunderstood. What do you know about them?
Well, let me, let me tell you what I know I can focus on. And the folks, open-air drug markets, we just should not tolerate them. So Washington Square Park, we had an open-air drug market. There are housing projects in the city that have open-air drug markets. We are going to target those and bring them to an end. I don't want children walking through Washington Square Park having to dodge needles, seeing, seeing people, the horrible effects of drugs. I mean.
So can I ask a question? I've taken the subway over here last night and somebody was ODing, you know.
My question about the Washington Square Park? I actually saw that news. And I, by the way, as a New Yorker, I was thrilled that you were doing that. It's been like that for years. And I always wanted to think to myself, kind of happened under COVID. But why is that? Why and where is that a New York Police Department situation? Is that a mayoral situation? Is that a prosecutor? What, what is the, what leads to that? And for it to be as persistent and consistently happening for as long as it did?
Or was it the change in the state laws?
Many, many people engaged in that activity who are charged in the state system are released. They are not detained pending charges. And very often the charges are, are pled down to misdemeanors. And they don't do time. If you are, if you have 10, 20, 30 priors and you are dealing fentanyl, that results in someone's death, you don't deserve to walk the streets, right.
So my question to you, I think it was, I remember at the time it was around COVID and they, they changed the laws at the state level for what people could be held for. And then at that point, the police officers are like, I put them in, they're out a day later.
So I'm going to say it again. So New Yorkers hear it. When a person is brought before a judge, arraigned, and you consider whether they're going to be detained and held or not, risk to the public is not a factor you can consider. Okay, that, that's the, that's the law in New York. 99 out of 100 New Yorkers, I explained that to, say that can't be right.
Did that change four or five years ago, or has that always been the case?
You want to, you want to get gun violence down. If someone uses a gun in a crime, detain them. Yes.
Jay, you may be right. It just doesn't sound to me like the mayor-elect, and I don't know this, I don't want to project, is necessarily on board with the things you're saying historically in terms of.
People ask me about that and I say we're the, we're the federal law enforcement. We don't touch every one of these crimes. But when something rises to the federal level.
But that was my question. How do you, to the extent what's, what the people want, what, every New Yorker wants it? But what rises to the federal level? When do you get to be involved? When does the city or state get involved? And, and where's the, again, this goes to the relationship that you may or may not have with the next mayor. How does that, how is that supposed to work? Because, because there are lots of things that he disagrees with the federal government about, including we can get into ICE and everything else.
Instead of, instead of going through the folds of federal jurisdiction versus state jurisdiction and the like, what I will tell you is, where are we focused? Where we have federal jurisdiction? Someone uses a gun in a crime in New York. We're going to look at that. And if, and if we have clear federal charges, we're going to bring them. I think that's what New Yorkers want.
What was your reaction to the mayor-elect?
Do you? I mean, every New Yorker, we have the most restrictive gun laws in the country.
I don't disagree with you. I'm just.
