>> ERIC: THE BIG POLITICAL NEWS THIS WEEK?

GOVERNOR WALZ HAS ANNOUNCED A RUN FOR A THIRD TERM.

WE'LL DEVOTE THE END OF THE SHOW TO THE ANNOUNCEMENT AND MORE MINNESOTA POLITICS WITH A STORY FROM MARY LAHAMMER AND OUR PANEL OF FORMER LAWMAKERS.

AND KAOMI LEE WILL LOOK AT WHAT'S HAPPENING WITH MEDICAID UP NORTH.

>> CATHY: BUT WE START THE HOUR WITH ECONOMIC NEWS.

THE FEDERAL RESERVE LOWERED INTEREST RATES WEDNESDAY AGAINST A BACKDROP OF A WEAKENING NATIONAL LABOR MARKET AND RISING PRICES.

PROFESSOR LOUIS JOHNSTON IS BACK TO DECIPHER IT ALL FOR US.

HE TEACHES ECONOMICS AT THE COLLEGE OF ST.

BEN'S AND ST.

JOHN'S UNIVERSITY.

IN COLLEGEVILLE.

TOMORROW IS THE 40th ANNIVERSARY OF FARM AID.

GOT THE BIG CONCERT AT THE U OF M.

>> IT IS.

YUP.

>> Cathy: GOSH, 40 YEARS AGO, THE FARM ECONOMY WAS TERRIBLE.

>> IT WAS.

>> Cathy: TRACTOR CADES AND ALL THAT.

>> IT WAS.

>> Cathy: HOW IS IT LOOKING NOW?

>> THEY'RE IN TOUGH SHAPE RIGHT NOW.

AND THE BIG PROBLEM RIGHT NOW IS THE EXPORT MARKET.

SO, FOR EXAMPLE, MINNESOTA FARMERS HAVE HAVEN'T BEEN ABLE TO SELL A SINGLE SOYBEAN TO CHINA THIS YEAR, EVEN THOUGH THAT'S THEIR BIGGEST MARKET.

CHINA HAS BASICALLY DECIDED, WE CAN'T COUNT ON THE UNITED STATES FOR AGRICULTURAL IMPORTS, SO WE'RE GOING TO GET IT FROM BRAZIL, PERU, WHEREVER WE CAN GET IT OUTSIDE THE U.S., THAT'S WHERE WE'RE GOING.

>> Cathy: EXAMINE THIS IS A DIRECT RESULT OF THE PRESIDENT'S DECISIONS?

>> DIRECT RESULT, UM-HUM.

>> Eric: 3.5% UNEMPLOYMENT RATE FOR MINNESOTA.

>> MINNESOTA'S JOB MARKET IS LOOKING PRETTY GOOD, ESPECIALLY WHEN IT COMPARE IT WITH SOME OF THE STATES AROUND IT.

THEIR UNEMPLOYMENT ATES ARE HIGHER.

JOB GROWTH IS STRONG.

WHAT I'M CONCERNED ABOUT IS THE SECTORS.

SO, WE'RE SEEING GROWTH IN PLACES LIKE CONSTRUCTION, THAT'S GOOD.

HEALTHCARE.

BUT GOVERNMENT, NOT SURPRISINGLY, HAS FALLEN.

AND MANUFACTURING.

WE'VE BEEN LOSING JOBS IN MANUFACTURING.

SO THAT'S SOMETHING TO KEEP AN EYE ON.

>> Eric: IMMIGRANT WORKFORCE, THAT'S THE OTHER SHOE I'M WAITING TO DROP BECAUSE WE HAVEN'T SEEN THINGS REALLY AFFECT THAT YET.

BUT IN PLACES LIKE MEAT PACKING, THE DAIRY INDUSTRY, THINGS LIKE THAT, THAT'S GOING TO REALLY START TO PUT A CRIMP IN THAT.

>> Cathy: THE RATE CUT, WAS IT DECENT OR NOT ENOUGH?

>> WELL, I DON'T THINK THEY SHOULD HAVE CUT AT ALL.

SO IF YOU'RE ASKING ME, I WOULD HAVE JUST KEPT THINGS WHERE THEY'RE AT.

PRESIDENT TRUMP OBVIOUSLY THINKS THEY SHOULD CUT A LOT MORE.

THE BOARDED TO GO FOR A QUARTER PERCENT, MOSTLY I THINK THEY DID THAT BECAUSE THE FINANCIAL MARKETS ALREADY THOUGHT THEY WERE GOING TO.

SO THEY DIDN'T ANT TO DISAPPOINT THEM.

WELL, THEY ALREADY BAKED THAT IN, WE DON'T WANT TO SURPRISE THEM AND UPSET THEM.

>> Cathy: SO THAT DECISION, THOUGH, IS POLITICALLY CHARGED.

>> IT WAS VERY -- AND IT'S A TERRIBLE THING TO BE SITTING AT THE FEDERAL RESERVE TABLE RIGHT NOW.

YOU HAVE ONE GOVERNOR THAT WAS JUST APPOINTED BY PRESIDENT TRUMP.

WHO DECIDED HE'S ONLY GOING TO TAKE A LEAVE OF ABSENCE FROM THE WHITE HOUSE AND NOT RESIGN.

YOU'VE GOT ANOTHER ONE ACROSS THE TABLE WHO PRESIDENT TRUMP IS TRYING TO FIRE.

AND TRYING TO REMOVE.

AND THEY'RE BOTH SITTING THERE AT THE TABLE, ALONG WITH THE CHAIR OF THE FED, WHO THE PRESIDENT'S PRETTY CLEAR HE WANTS GONE.

GOTTA BE A PRETTY TENSE MEETING.

>> Eric: IS THIS JUST SORT OF BELTWAY, PALACE INTRIGUE OR IS THERE SOME LASTING PROBLEM THAT IT'S GOING TO CAUSE?

>> NO.

THIS IS REALLY IMPORTANT BECAUSE TRADITIONALLY THE FEDERAL RESERVE HAS BEEN DIVORCED FROM POLITICS, IN THE SENSE THAT THE MORE INDEPENDENT A CENTRAL BANK IS, THE LOWER THE INFLATION RATE IS.

AND, SO, IN THE U.S., WE HAVE REALLY TRIED TO DO THAT.

PRESIDENT TRUMP IS UPSETTING ALL OF HAT.

HIS ATTITUDE IS THAT THE FEDS SHOULD BE -- THE FED SHOULD BE CONTROLLED BASICALLY BY THE EXECUTIVE BRANCH.

WHEN, UNDER THE CONSTITUTION, IT'S CLEAR THAT CONGRESS IS SUPPOSED TO CONTROL IT.

IT SAYS THEY HAVE THE POWER TO COIN MONEY AND REGULATE THE VALUE THEREOF.

AND THEY CREATED THE FED TO DO THAT.

AND HE'S BASICALLY TRYING TO TAKE THAT POWER.

>> Eric: UNION PACIFIC AND NORFOLK SOUTHERN HAVE MERGED.

>> THE FIRST TRANSCONTINENTAL RAILROAD, THE FIRST LITERALLY PACIFIC TO ATLANTIC RAILROAD IN U.S.

HISTORY.

>> Eric: WHAT DOES IT MEAN FOR MINNESOTA AND FOR TRUCKERS IN MINNESOTA?

>> WELL, IT PROBABLY WON'T AFFECT US THAT MUCH BECAUSE UNION PACIFIC AND NORFOLK SOUTHERN ARE MOSTLY IN THE CENTRAL AND SOUTHERN PARTS OF THE UNITED STATES.

BUT IT WILL PUT PRESSURE ON TRUCKING RATES IN THE SENSE THAT TRUCKERS NOW WHO ARE TRYING TO CONNECT EAST COAST PORTS WITH THE WEST COAST ARE GOING TO HAVE TO LOWER THEIR RATES.

THEY'RE GOING TO HAVE TO BE MORE COMPETITIVE BECAUSE NOW YOU CAN GO END TO END, YOU CAN GET SOMETHING IN NORFOLK AND TAKE IT OFF IN LOS ANGELES.

>> Cathy: SO GETTING BACK TO THOSE SOYBEANS AND THE FARMERS.

SO, IF THIS KEEPS GOING ON, WHAT HAPPENS TO THE MINNESOTA AG ECONOMY?

>> THEY GET INTO DEEP TROUBLE.

SO, FOR EXAMPLE, IF YOU CAN'T SELL THOSE SOYBEANS, WHAT ARE THESE FARMERS SUPPOSED TO PRODUCE?

AND WHERE ARE THEY SUPPOSED TO SELL IT?

THEY COULD START TO MOVE INTO OTHER GRAINS, BUT RIGHT NOW WE HAVE AN ECONOMY THAT'S SET UP TO GROW CORN, PRIMARILY, SOYBEANS, PRIMARILY, AND TO EXPORT MOST OF THAT STUFF.

WITHOUT THAT, WHO KNOWS.

>> Cathy: DO THE FEDS THEN, COME IN AND MAYBE HAVE SOME SORT OF PRICE SUPPORT PROGRAM?

>> WELL, THAT'S ONE OPTION.

MANY FARMERS GROUPS HAVE BEEN SAYING THEY NEED PAYMENTS FROM THE FEDERAL GOVERNMENT TO SUPPORT THEM.

YOU COULD HAVE PRICE SUPPORTS, YOU COULD HAVE OME KIND OF PROGRAM TO BUY UP SOME OF THE SURPLUS.

THERE'S A LOT OF POSSIBILITIES, BUT, YOU KNOW, WE SPENT THE LAST 40 YEARS GOING AWAY FROM THAT TRYING TO INCREASE EXPORTS AND NOT HAVE PRICE SUPPORTS.

NOW WE'RE GOING TO FLIP THE WHOLE THING OVER AGAIN.

>> Eric: WE'LL HAVE YOU BACK.

>> THANK YOU.

>> Cat