Carol Roth Just Exposed the Biggest Risk to America’s Economy — And It’s Not AI

If you’re trying to understand why everything in the economy feels upside-down—why stocks hit records while groceries punch you in the throat— Carol Roth is the person you need to hear from.

Roth isn’t just another pundit with a ring light. She’s a “recovering investment banker” who has executed billions in deals, advised private-equity firms and CEOs, sat on corporate boards, built companies, and written two New York Times bestsellers warning about trends everyone else ignored until they were unavoidable. She’s one of the few voices who can explain the macro chaos without hiding behind jargon—and one of the fewer who can tell you how to survive it. Her personal mission: make people think, make them laugh, and make them money. Capital & Power gets all three.

On this week’s episode, AInvest’s Adam Shapiro sits down with Roth for a brutally honest, occasionally hilarious, no-euphemisms-allowed conversation about the forces reshaping your financial future: inflation, the K-shaped economy, tariffs, AI, government dysfunction, hopeless young voters, and why America is “one liquidity firehose away from buying a suit for a million dollars.”

Here’s a taste of what you’re in for.

The conversation starts with Torsten Slok’s “K-shaped” consumer story—and Roth doesn’t mince words. She has “been talking about the K-shaped economy for years,” arguing that after 15+ years of money printing, the divergence was inevitable. Asset owners watch stocks and real estate keep inflating. Everyone else just gets slapped with the bill. And here’s the bombshell: the U.S. fiscal position is now so fragile that policymakers have no real choice. “We quite literally cannot afford for assets to come crashing down,” she warns. A market crash isn’t cleansing—it’s catastrophic.

Her prediction? More liquidity. More inflation. More nominal gains masking real erosion of purchasing power. “The only palatable thing politically that can be done is to continue to prop up assets via inflation.” Translation: you may feel richer, but your dollars won’t.

And when Adam invokes Paul Krugman’s claim that wages have outpaced inflation? Roth swings like someone who’s been waiting for this pitch. “Paul Krugman gets most of everything wrong.” CPI, she says, is engineered math—“statistics” in the Mark Twain sense: “there are lies, damn lies, and statistics.” Real people see real bills. Insurance. Property taxes. Food. Healthcare. “There’s nothing that wages are keeping pace with.” Try to tell people otherwise, she says, and “you’re trying to gaslight people.”

The episode then turns to government scale—and Roth’s diagnosis is scathing. Federal spending has exploded so fast that “they took in five trillion, they spent seven trillion,” and yet services worsen. She argues the government has drifted from its core functions into “redistribution and buying themselves power,” producing the diseconomies and dysfunction now baked into the system.

Think that’s spicy? Wait until they get to AI.

Roth isn’t in the AI-is-a-bubble camp. In fact, she thinks we’re just getting started. “We’re at the ground floor here and there’s so much more to happen,” she says, comparing the hype to the early internet: pets.com died—but Chewy lives. She thinks white-collar headcount will shrink, but she doesn’t buy the fantasy of replacing junior staff. “I don’t think they can eliminate junior staff,” because every industry still needs actual humans to be trained into future leaders. And markets? They’ll chase whatever comes next. “If it’s not AI, it’s Fred,” she jokes.

But her biggest fear isn’t tech—it’s America’s ability to build fast enough to stay in the race. “There are massive data centers… that have not been built because the electrical grid can’t support it.” Environmental hurdles, regulation, labor issues—if the U.S. doesn’t solve those? “We’re going to end up speaking Mandarin.”

Then come the tariffs. If you think Roth is going to automatically cheer for Trump’s tariff agenda, think again. “I am against tariffs… I’m sort of mostly against tariffs,” she says, drawing a sharp line between actual national security and taxing Barbie dolls, bananas, and everyday imports. And she’s crystal clear about who pays: “80% of the tariffs are being paid by consumers.” Her message to people defending tariffs only because they’re wrapped in Trump branding: it’s “the same bad idea.”

And yet despite all of this—despite the inflation, policy dysfunction, youth anger, political extremes—Roth insists you shouldn’t bet against America. But optimism isn’t passive. “When you see these bad ideas that are working against us, you should speak out.” She describes herself as “a realist, but also an optimist,” focused on creating, preparing, and never surrendering agency.

Her closing message to older listeners? Dismissing younger voters is a mistake. “If you have nothing to lose, you’re the most dangerous person around.” Acknowledge what they’re facing. Show them alternatives. Don’t lecture—lead.

This is one of the most wide-ranging, candid, and practical conversations Capital & Power has aired yet. If you want to understand where the economy is heading—and how to position yourself before the next policy wave hits—this is an episode you don’t want to miss.

When Carol Roth says the quiet part out loud, you listen.