Episode 195

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Published on:

7th Apr 2026

The Recession Is Coming Faster Than Most Admit

Jerremy and Dave hear from James Klein on why a recession is likely 3-6 months away with conditions like the Jimmy Carter era. Sustained high oil prices will drive inflation and limit rate cuts. AI helps with repetitive work but creates garbage output and favors a few big companies. Klein argues trades are understaffed and entrepreneurship is far harder than the hype suggests.

Timestamps:

  • (00:00) The recession is already showing signs and capital will decide who survives it
  • (00:19) 3-6 months until a painful 1970s-style downturn with job losses ahead
  • (00:45) Oil prices, inflation and interest rates created long recessions before 2008
  • (06:37) AI won't save the job market or replace the need for real skills
  • (07:24) Practical AI use cases exist but most applications are pure hype
  • (11:12) Rapid AI change mostly consolidates power with a handful of monopolies
  • (14:27) Trades represent the practical third door when entrepreneurship fails

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Transcript
Alex:

James sees a 1970s-style recession forming—NOT a bubble,

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:

not a COVID spike—and THIS

one scares him more than both.

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Jerremy presses for what the signals

actually look like on the ground,

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and the honest answer lands hard.

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Recession Watch — James

Predicts a:

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Jerremy: Heck yeah.

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Well, speaking of spending money

and having capital and being

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prepared, you're a smart guy, dude.

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I like talking to you and you're always

very, you always have a very good,

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big macro perspective, I feel like.

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And you said.

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Three to six months from a recession

at some point, or that's how you

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feel like we are right now, current,

present day, for those who are

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listening to this podcast in real time.

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And your read is, is like a Jimmy

Carter late seventies recession.

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Not, not a 20, not a 2001 like tech

bubble, AI bubble kind of thing, and

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not COVID, which was macro and fast

and quick and spread out and delayed

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and immediate at the same time.

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Walk us through what you're

seeing that makes you land late

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seventies Jimmy Carter recession.

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Dave: Hey.

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And, and if you could, and if you could

tell our, our, younger listens, listen.

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As what that was

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Jerremy: Yeah.

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James Klein: What that

was like was gas lines

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Dave: Yeah.

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James Klein: in that the Middle East.

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Cut down vastly in the supply of gas to

the rest oil to the rest of the world.

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OPEC asserted itself, so literally for the

young people, like look it up on Google,

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Dave: Mm-hmm.

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James Klein: people would literally

line up for an hour or more to

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get gas to put in their car.

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Quite often they were limited as

to how much gas they could put in

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because supplies were so limited.

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my sense with the current oil situation

and while yes, the US and Canada are oil

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independent and can supply our own needs,

we are still very much a global economy.

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And if oil stays at these prices.

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I am expecting inflation

that will be quite high.

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And again, the people who, who came of

age after:

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interest rates at 1%, half a percent zero.

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Jerremy: Yeah, yeah, yeah, yeah.

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James Klein: I'm old enough to

remember 15, 16, 18% interest rates

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on mortgages and business loans, So,

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Jerremy: Hey, Dave, do

you, do you know that too?

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Do you?

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Dave: It's our running joke.

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da.

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You know, I am, I am.

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You know, I'm the old man.

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Jerremy: Yeah.

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James Klein: Right.

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So you know like when I hear

people complain that interest

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rates are 5% and oh my God, they're

so high, it's not sustainable.

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Yeah,

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Dave: Yeah.

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James Klein: that's based on a

very short window of information.

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Jerremy: Exactly right.

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James Klein: to the seventies

and e and eighties, you would put

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your money in a savings account

and earn five or 6% interest.

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So everything post 2008 up

until outta COVID when interest

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rates went up was very atypical.

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If you look back at the

last 50 or a hundred years.

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A little bit of inflation

is good for the economy.

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It stimulates growth, but that's two

to 3% inflation if gas stays where

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it is, and it's very expensive in

Canada right now, and I watch the

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US News and I'm seeing $5 and $6 gas

depending on where people are in the us.

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That is going to have a massive impact

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Jerremy: Massive bro.

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James Klein: of everything.

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Jerremy: Everything.

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James Klein: last week just announced

an 8% surcharge on all packages starting

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April 1st because fuel costs are going up.

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Dave: no

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James Klein: I've got, I've got

clients moving stuff by truck

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from a manufacturer to a three pl.

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Shipping rates have gone

up in the last month.

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So number one, I think even if this

gets resolved and gas goes back to

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where it was, everybody who raised

their prices because of the high gas

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price, maybe we'll cut, cut back a

little bit, but they're not gonna

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go where it was the last plus days.

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So I'm expecting inflation to be probably.

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5% or greater.

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So I think the chance of a Fed rate

cut no matter what happens after

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Powell's gone based on the underlying

metrics, I don't think anybody's gonna

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be able to cut interest rates 'cause

that will just fuel more inflation.

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So we could get into one of those spirals

It just, it's absolutely disastrous

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losses over the last six months.

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If you look at the, the labor

numbers, job jobs are actually being

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lost rather than being created.

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when you pair high inflation,

high interest rates, high

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gas with a lack of jobs.

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That has the potential to get really

ugly, and I don't think it'll be one

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of those one or two quarter recessions.

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And I know a recession by definition

is two quarters of negative growth.

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I think it could be a longer one for sure.

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Jerremy: Yeah.

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And a quick history

lesson for our listeners.

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So in 19, 1973, January, US markets

%, to:

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So 1973 to 1975.

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Those two years.

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50% decline.

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And then 1976 to 1978,

we had another 25% drop.

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And really the overall markets

felt like they were doing nothing.

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they stayed relatively flat, relatively

sideways until the early eighties.

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So 19 82, 19 83, or we finally,

finally started going higher.

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So that, to your point, man.

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I also feel like five to 6% inflation.

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or, and sorry, five.

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To 6% interest rates are normal and

good, and healthy and sustainable.

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I also totally agree with you that the

business owners right now, or the people

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that want to go into business or the

people that are going to school or going

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to college, you have to keep in mind that

there's always gonna be some shifts that

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are gonna be happening at some point.

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And this is, this is one of them

that's right in front of our face.

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I mean, it is right there, right now.

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James Klein: Very much so, and

you know, people spending a couple

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of hundred thousand dollars to

get a degree in art history.

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You know, what kind of, and no, no

disrespect to the art history majors.

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Like what job is waiting for

you at the end of that path?

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maybe you had four great years at school

and you partied and you learned something,

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but do you have any marketable skills?

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you know, AI will definitely

change some things.

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I don't think it's going to eliminate

as many jobs as some of the naysayers

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are postulating all over the internet.

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But AI will definitely have an impact

on the job market moving forward.

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Dave: Well,

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Jerremy: Oh yeah.

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Dave: yeah, let's talk

about that a little bit.

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when you and I talked, you know,

like we, we, we dove into the

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AI world and, you know, like.

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What I heard you say is that,

people are using AI just for the

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sake of using it, and it's creating

actually more work than saving time.

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make that case, you know, I think that

a lot of people are, are saying to

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businesses, to entrepreneurs, to to small

business owners that you gotta get on

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this train or you're gonna be left behind.

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so what, make the case, make your case.

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James Klein: Sure.

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the first thing is I think AI

has the potential to be great

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with the proper use case.

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For example, you run a customer

service team and half your customer

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interactions are, where's my package?

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Et cetera, et cetera.

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That's a perfect case for an AI bot that

finds the customer, finds their tracking

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information, sends it back to them.

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That makes all the sense in the

world, rather than having to hire.

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A lot of additional customer service

agents as your business scales.

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for specific tasks, repetitive

spreadsheets that are shared on a daily

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or weekly basis where you're pulling data

from the exact same places, of course,

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AI can do it faster and better with

less errors and free up your team to do

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things that do need hu human interaction.

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But I also see a lot of garbage.

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That's

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Jerremy: of

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James Klein: written by ai.

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Jerremy: tons of garbage.

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James Klein: LinkedIn

and read half the posts.

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Dave: Mm-hmm.

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James Klein: You can tell which ones were

written by AI and the person who posted

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it never bothered to proofread it or

personalize it or do anything with it.

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And to me that's just ai

garbage it for writing.

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AI can get you, in my

opinion, probably 80%.

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Of where you need to go,

but then you still need to

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polish it and personalize it.

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you know, in the IT business, it,

the, the saying has always been

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garbage in, garbage out, and your

output is only as good as the data

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and the prompts that are going in.

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There are a lot of people

using terrible prompts in AI

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creating terrible work product.

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The thing about AI that I don't like.

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Is that it's evolving way too quickly and

you know, as an example, I'm more than

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likely older than most of your audience.

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I started in business, there

were no personal computers.

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Dave: Yeah.

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James Klein: My first computer was

an IBM PC with two five and a quarter

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inch floppy disks, where literally

the program would be on one disc and

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your data would be on another, and

as the disc got full, you'd pull out

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the data disc and put in a new one.

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My first hard disc was five megabytes.

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It cost me, I believe, $2,000 at the time,

and I was told that I would never fill it.

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Now on my desk, I have

terabytes of storage.

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When I started, there was no internet.

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There was no email, and each one

of those things took, the adoption

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period happened over several years.

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Dave: Yeah.

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James Klein: Computers came out until

everybody had computers on their desk.

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That was probably a five

to eight year period.

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The internet came about until

everybody widely adopted it and

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built out e-commerce and all of that.

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There was a long adoption period.

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Same thing with email.

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AI is now improving and iterating on a

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Jerremy: Yeah.

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Yeah.

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James Klein: nobody has a clue

what some of this AI is actually

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doing, and I find that terrifying.

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Jerremy: I also kind of think

up until Dave, I think it's

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like the flying car fallacy too.

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You know, everyone's like, oh,

we're gonna have robots and AI doing

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everything in like five months.

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I'm like, I don't think so, dude, I

think it's gonna take a lot longer.

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most AI production is crap.

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It's cool, but you know, it's ai and

again, I'm fine if it's gets better, but

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give us a, a business like business case.

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Make a strong, make a strong

argument that AI is gonna genuinely

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reshape small businesses and

entrepreneurship for the better.

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And then tell me why

you're still skeptical.

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James Klein: I, I think it can

absolutely reshape business for the

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better, especially as I said earlier,

with repetitive tasks and mining

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data, and ha giving you numbers

you need have to be able to make

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proper decisions in your business.

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Jerremy: Faster.

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Yeah.

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James Klein: Exactly.

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You know, you go to your bookkeeper,

accounting person, fractional

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CPA, whatever they are, you say,

okay, I need, I need a bunch

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of reports that showed this.

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I have to go to the bank

to renegotiate my deal.

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Somebody right now has to essentially mine

all that data, manually produce a report.

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Chances are there's some errors in it.

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You have to validate the data.

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That could be a two or three week

process using AI properly, you can

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probably generate that report in an

hour, maybe less if you're really good at

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prompting and you know what to instruct

the AI to do on, on those levels.

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You know, predicting inventory

requirements and when

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you should be reordering.

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The AI can certainly do a lot of that.

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My biggest concern about the AI.

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Ecosystem is the same concern I have

with the social media platforms.

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are four or five, six companies

are in pretty much monopolistic

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Jerremy: Yep.

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Yep.

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James Klein: have all your data.

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They know everything's going

on, like the whole TikTok thing.

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Oh my god.

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China's gonna have your data.

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Guess what?

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China already has your data.

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So does Apple.

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So does meta, so does Google.

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You name it.

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They've all got all our data.

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Unless you're living totally off the

grid have just like a flip phone that

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has no data on it, you mention something

in a conversation five minutes later,

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Facebook is serving that to you as an ad.

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Jerremy: A hundred percent.

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James Klein: Ev, everybody

has all of our data.

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it, is what it is.

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My concern is primarily with all

of these roll-ups that are going on

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like Paramount now, the way they're

requiring all these other media

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entities, and literally any industry,

there's gonna be 2, 3, 4 entities that

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essentially have a total monopoly.

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On their entire space, which creates

a very high barrier to entry for

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somebody who has a great new idea.

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it's, you know, if they like your

idea, they're gonna acquire you

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or they'll put you outta business.

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So from that standpoint, as an

entrepreneur, I'd rather see more

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players in that market rather than

everything being so concentrated.

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Jerremy: Yeah, James, so.

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The trades right now, trades

being like electrician, plumber.

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Those are being sold as an obvious

alternative to college and or I

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should say, maybe even an obvious

alternative to working a desk.

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Software job because software is going to

be replaced soon and everything's going

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to be AI and we can't replace, you know,

manual physical labor right now instantly

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like cutting grass and cutting hair.

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But you took a third path

entirely called entrepreneurship.

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What does the sales pitch

for that path Leave out.

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For anyone who is considering stepping

into being their own boss, being their

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own business, what do they actually

need to know that no one tells them?

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James Klein: That it's much

harder than you think it is.

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you know, that would be the first thing.

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can have the best idea in the world.

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But until you execute on it and find who

actually agree that it's the best idea

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in the world and are prepared to spend

money to buy whatever your widget or

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service happens to be is very challenging.

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There's a great deal of security

and having a job and knowing that

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money is being deposited into your

bank account week or every two weeks

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or whatever pay cycle you're on.

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When you're an entrepreneur,

quite often it's feast or famine.

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And you know, there are times where you're

deciding, am I going to a restaurant

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this week, or do I need to buy something

for my business, or am I going without

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a paycheck for the next month or six

weeks because cash flow is tight.

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these are all the things that

people don't really understand.

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It's not for everybody.

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It's not for the faint of heart.

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You know, you talk about university

degrees, not everybody needs a university

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degree and people can make great

livings as plumbers or electricians.

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Or masons, like try to find somebody to do

a, a brick job today is almost impossible

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because it tended to be immigrants

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Jerremy: my gosh.

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James Klein: They brought that

skill from the old country.

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They made some money.

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Their kids went to university and didn't

wanna follow them into the business.

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Or if the second generation went

into the business, the third

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generation by then said, oh, hell no.

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And the immigrants encouraged the

second and third generations to

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be the first ones in the family

to go to university, et cetera.

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So the trades are horribly

understaffed and that they're, I

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find, generally they're underpaid.

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you know, I don't think anybody who

works 40 hours a week should have

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to have a second job to be able

to rent an apartment or buy food.

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Or anything else?

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I'm socially liberal.

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I believe in universal healthcare.

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You know, I believe in a bunch of

stuff that not everybody does, and

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yes, McDonald's needs workers, but

honestly, if you look at how many

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hamburgers McDonald's sells in an

hour with eight or 10 employees.

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If they paid tho those employees an extra

three bucks an hour, so maybe they'd have

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to raise the price of a quarter pounder by

5 cents to make the those economics work.

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But the people at the bottom

of the economy, they earn more

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money, it's not like they're

putting in the bank and saving it.

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turning around and they're putting

that money right back into the economy.

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They're going to Walmart.

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They're going to Costco,

they're going to restaurants.

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So.

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Again, I don't like to overpay, but

I think anybody who actually puts in

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the effort to work a job should be

entitled to the dignity of living.

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Not a grand life, certainly

being able to survive and not

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be one missed paycheck away from

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bankruptcy or eviction.

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Alex: Jerremy floated a stat—James

turned it into a diagnosis.

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One in six workers CHAINED to

jobs they'd leave tomorrow if

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healthcare weren't on the line.

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Next, what 45 years living outside

that system actually reveals.

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About the Podcast

Solving America's Problems
Solving America’s Problems isn’t just a podcast—it’s a journey. Co-host Jerremy Newsome, a successful entrepreneur and educator, is pursuing his lifelong dream of running for president. Along the way, he and co-host Dave Conley bring together experts, advocates, and everyday Americans to explore the real, actionable solutions our country needs.

With dynamic formats—one-on-one interviews, panel discussions, and more—we cut through the noise of divisive rhetoric to uncover practical ideas that unite instead of divide. If you’re ready to think differently, act boldly, and join a movement for meaningful change, subscribe now.