Kudlow celebrates Trump economy’s booming job numbers


>>1% FOR THE RECORD HIGH BY THE WAY. VERY CLOSE. STUART: I THINK WE SHOULD BRING IN THE MAN OF THE HOUR. HIS NAME IS LARRY KUDLOW. NATIONAL ECONOMIC COUNCIL DIRECTOR AND I WAS HOPING TO SEE A HUGE GRIN ON THE MAN’S FACE BUT THERE YOU GO – LOOK, LARRY, I HAVE SAID THIS IS SPECTACULAR AND IT WILL NOT SUPPORT DO YOU WANT TO ADD TO THAT?>>IS ANOTHER BLOWOUT NUMBER. SOLID 3.2% GDP WHICH IS A BLOWOUT NUMBER LAST WEEK. VERY STRONG ECONOMY AND AGAIN I WILL SAY WE TALKED ABOUT PRESIDENT TRUMP’S POLICIES TAX CUTS THE REGULATION OPENING ENERGY, TRADE REFORM, STABLE DOLLARS AND SO FORTH HE IS REBUILDING THIS ECONOMY AND I HEARD YOUR GUEST TALKING ABOUT PRODUCTIVITY SURGING AND THAT IS HUGELY IMPORTANT AND MAYBE WE’LL GET IT UP TODAY’S JOB NUMBER BUT THAT AND HERE’S A VERY KEY POINT AND 3.2% GROWTH 263,000 JOBS WHICH CONTINUES THE STRONG TREND WE HAVE NO INFLATION. VIRTUALLY NO INFLATION. STRONG GROWTH, WITH VIRTUALLY NO INFLATION. I THINK THE INFLATION MEASURE FOR THE FIRST QUARTER IS 0.9% IN YEAR-TO-YEAR IS ABOUT 1.4 SO THAT IS AN IMPORTANT POINT. VERY STRONG GROWTH, VERY LOW INFLATION AND POLICIES ARE WORKING. STUART: CAN BRING OUT ONE BIG NEGATIVE. VERY STRONG GROWTH WITH TERRIFIC EMPLOYMENT MARKET AND YET YOU STILL GOT $800 BILLION DEFICIT IN THIS FISCAL YEAR AND THAT’S NOT SUPPOSED TO HAPPEN, LARRY MADE STRONG GROWTH YOU SHOULD BE BRINGING THAT IS IT DOWN AND IT’S 800 BILLION. WHAT DO YOU SAY?>>GIVE ME ANOTHER YEAR OR TWO ON THE DEFICIT BECAUSE I NOTICED CBO PUT OUT ITS OWN ESTIMATE BUT THEY HAVE VERY LOW GROWTH ASSUMPTIONS AND HENCE VERY LOW REVENUE ASSUMPTIONS COMING FROM LOW EMPLOYMENT BUT WE DON’T AGREE WITH THAT. THEIR MODELS ARE VIEW IS THE% GROWTH PLUS SO WHAT I AM SAYING IS AS A SHARED GDP WE WILL CYCLE DOWN THAT BUDGET DEFICIT IN THE YEARS AHEAD AND HAVE BEEN FOLLOWING THE NUMBERS WITH THE HELP OF MY PAL, DAN CLIFTON, AND REVENUES ARE COMING IN VERY STRONG. WE WILL SEE, I THINK, THOSE DEFICIT NUMBERS WILL BE MUCH BETTER BUT THE KEY POINT HERE – YOU HAVE A TEN YEAR COVENANT BOND NOTE OR GOVERNMENT NO GREAT AT TWO AND HALF PERCENT AND DOES NOT LOOK LIKE A DEFINITE PANIC TO ME. THE MAIN POINT IS ECONOMIC GROWTH CONTINUE STRONG AND IF YOU TAKE YOUR PRODUCTIVITY OR WHATEVER CALLED 2.5% LAST FOUR QUARTERS YOUR GROWTH AND EMPLOYMENT AT LEAST 1% THAT IS STRONGER THAN THAT WE ARE NOW IN A THREE, 4% GROWTH STONE AND THAT’S A HUGE CHANGE IN A COUPLE OF YEARS AGAIN I WOULD ARGUE BECAUSE THE PRESIDENTS POLICIES ON TAXES AND REGULATIONS AND SO FORTH ARE REBUILDING THE ECONOMY. THIS IS A VERY GOOD STORY, GOOD GROWTH LOW INFLATION AND I WOULD SAY THIS TO ECHO THE PRESIDENT PERIODICALLY HE SAYS THIS – I THINK WE CAN DO BETTER. FOLKS ARE TELLING ME IT WILL SLOW DOWN FROM HERE BUT I DON’T BUY IT. I THINK AS THE CAPITAL DEEPENING FROM THE IS THIS TAX CUTS CONTINUE YOU WILL SEE STRONGER GROWTH MORE CAPITAL GOODS AND BETTER PRODUCTIVITY AND CONTINUED INCREASE IN REAL WAGES AND JOBS. IT’S A VERY GOOD PLACE TO BE. STUART: I WANT TO DELVE INTO POLITICS, LARRY, I KNOW YOUR ECONOMICS BUT LET’S TALK POLITICS. SPEECH FROM JOE BIDEN THIS WEEK OF PRODUCER OF THE SECOND SOUNDBITE. ONE THAT DEALS WITH THE TAX CUTS. JOE BIDEN SAYS LOOK, YOU HAVE THIS WHOPPING GREAT BIG TAX CUT AND MUCH OF IT IS GONE TO RICH IN BUSINESS AND AMERICA’S MIDDLE CLASS ARE NOT FEELING IT AND HAVE NOT SEEN IT. I’M GOING TO ROLL THAT SOUNDBITE FOR A SECOND AND WANT YOUR COMMENT. ROLL THE TAPE, PLEASE.>>STOCK MARKET IS ROARING. BUT YOU DON’T FEEL IT. THERE ARE 2 TRILLION-DOLLAR TAX CUT LAST YEAR AND DID YOU FEEL IT? DID YOU GET ANYTHING FROM IT? OF COURSE NOT. STUART: I THANK YOU HEARD THAT, LARRY, WOULD YOU DEAL WITH IT, PLEASE?>>ALL THAT MANY TIMES I INTERVIEWED JOE BIDEN DOWN TO THE YEARS AND IN ANOTHER TV SHOW ON AN OTHER NETWORK, HEAVEN FORBID I NEVER WAS ABLE TO CONVINCE HIM OF THE MERITS OF THE INCENTIVE MODEL OF GROWTH IN MY LOWER TAX RATES IMPROVE GROWTH FOR EVERYBODY. HERE IS THE FACT. VERY IMPORTANT. THE STRONGEST GROWTH IN JOBS HAS COME FROM THE BLUE-COLLAR SECTOR. IT IS NOT THE UPPER END AND IN FACT, THE WAGE INCREASES IN THE BULK OF THE WAGE INCREASE FASTER WAGE GROWTH IS NOT THE UPPER END BUT THE BLUE-COLLAR MIDDLE-CLASS WORKING FOLKS IN THE 10%, TEN PERCENTILE HAS BEEN THE LEADER NOT THE TOP 1%. JOE BIDEN NEEDS TO GET HIS BACKSIDE AND RE-EXAMINE OUR POLICIES. WE ARE GETTING DONE WHAT WE HOPED TO GET DONE. MANUFACTURING IS REBOUNDED AND TO GET THESE TRADE DEALS STRICTLY USMC EIGHT WHICH I THINK WILL BE ECONOMIC GROWTH IN INVESTMENT WE WILL SEE CONTINUED SEARCH AND AUTO WORKERS, FARMERS, MANUFACTURING AND SO FORTH BUT THAT IS THE SWEET SPOT. IT’S NOT THE UPPER END BUT MIDDLE-CLASS FOLKS IN THE WORKING FOLKS IN THE HARDHATS AND THOSE ARE THE ONES I LOVE. STUART: CAN YOU GIVE ME A FORECAST FOR THE REST OF THE YEAR? WILL WE GET ANY GROWTH IN THE QUARTER? WILL BEGET AN UNEMPLOYMENT RATE BELOW THE CURRENT 2.6% RATE AT ANY POINT THIS YEAR? 4% GROWTH BELOW 3.6% AT ANY POINT THIS YEAR? WILL YOU FORECAST THAT?>>I WILL SAY THERE’S A STRONG PROBABILITY THAT THAT MAY OCCUR. GREAT CENTER OF IT WE WILL CALL IT THE VARNEY SCENARIO. [LAUGHTER] STUART: THANK YOU.>>I MEANT NONPARTISAN, BIPARTISAN GUIDE WHATEVER YOU SAY IS ABORTED. ALL I WANT TO SAY AGAIN IS YET THE .6% ON EMPLOYMENT, JOB GAINS 263, GDP GROWTH THE .2 AND STILL, HERE’S THE QUICK POINT. VIRTUAL PRICE STABILITY. HIGH-GROWTH, HIGH JOBS, LOW UNAPPOINTED RATES LOW INFLATION. THAT IS THE MESSAGE WE BEEN TRYING TO SEND AND I THINK THAT’S WHERE POLICIES WI-FI POLICIES TO REBUILD THE ECONOMY ARE WORKING. A LOT OF THESE OLD MODELS FROM VARIOUS INSTITUTIONS AROUND WASHINGTON DC I WOULD NEVER WANT TO NAME NAMES HAVE MISSED THIS. THEY DON’T BELIEVE IT. THEY SHOULD BECAUSE THE NUMBERS ARE BEARING THAT OUTFIT TO YOUR SCENARIO THE VARNEY SCENARIO WE COULD SEE A% GROWTH RATE OF LESS THAN 3.6% OF WOMEN BUT GROWTH IS GOOD AND HIGHER WAGES ARE GOOD AND MORE JOBS ARE GOOD, LOW UNAPPOINTED IS GOOD WORKING SUCCESSFULLY IS GOOD THIS IS A SWEET SPOT I HOPE FOLKS TAKE NOTICE. STUART: YOU HAVE TO BE DISAPPOINTED THAT STEPHEN MOORE HAS WITHDRAWN FROM CONSIDERATION AT THE FEDERAL RESERVE BOARD. I FOR ONE DO NOT UNDERSTAND WHY A MAN’S PERSONAL LIFE IN THE PAST SHOULD HAVE ANY INFLUENCE ON HIS POSITION AND ABILITY CHARACTERIZE MILITARY POLICY. YOUR COMMENT, PLEASE.>>I DO THINK IT’S UNFORTUNATE BECAUSE ONE THROUGH PERSONAL TAX WOULD HAVE NOTHING TO DO WITH HIS EXCELLENT RECORD ANALYSIS AS AN ECONOMIST BUT IT IS TOO BAD. I’LL GIVE ONE THING HERE. STEVE MOORE’S VIEW WHICH IS COINCIDENTAL WITH OUR VIEW IS WINNING THE BATTLE OF IDEAS WHICH IS, AGAIN, SUGGESTS A STRONG ECONOMIC GROWTH AND COEXIST WITH LOW INFLATION AND IN FACT AS STEVE TRIES TO SAY I WILL TACKLE THIS AND IT’S A LONG-HELD VIEW OF MINE AND THE PRESIDENT FOR THAT MATTER THESE INCENTIVES FOR LOW TAX RATES AND DEREGULATION ARE WORKING. THEY ARE WORKING SO THIS IS THE KIND OF NON- INFLATIONARY GROWTH WITH THE STABLE CURRENCY OF THE DOLLAR MONEY POINTED TO THE USA FROM THE WORLD SO I THINK STEVE WITH THE BATTLE OF IDEAS AND WILL LIVE TO FIGHT ANOTHER DAY. STUART: DO YOU WANT THE FEDERAL RESERVE TO CUT RATES AND THE PRESIDENT WANTS FEDERAL RESERVE TO CUT RATES AND CUT RIGHT NOW? YOU WANT HIM TO DO THAT?>>THE POINT IS THAT THESE LOW INFLATION NUMBERS THE FED IS ABSOLUTELY LOOKING AT RATE CUTS. SOME OF WHICH WERE PRICED INTO THE MARKET MAY BE UP UNTIL A FEW DAYS AGO.>>IS THAT GREAT AFTER A JOB SUPPORT LIKE THAT?>>WELL, LOOK, I WILL NOT GUESS THE TIMING AND THE DO WHAT THEY DO ON THEIR OWN TIME BUT WHAT I WILL SAY IS USING THE ANALYSIS WHAT WE FOUND IS THAT ALL THESE INCENTIVES IN THE ECONOMY CREATING STRONG GROWTH AND JOBS WITH NO INFLATION AND THE FED IS LOOKING AT THE INFLATION NUMBERS AND I DON’T THINK THEY ARE INCLINED TO FINE-TUNE REAL GDP. THEY ARE INCLINED TO THINK LOW INFLATION I SUGGEST THE NEED FOR LOWER INTEREST RATES IN THEIR TARGET RATE AND I MYSELF BELIEVE THAT IS THE CASE. THE FED IS LOOKING AT INFLATION AND THAT IS A GOOD WAY – OUR VIEWS RIGHT NOW INTELLECTUALLY ARE NOT FAR APART FROM THE FEDERAL RESERVE BEST I CAN DETERMINE. STUART: YOU WERE PROVEN RIGHT. YOU HAVE BEEN ON THIS PROGRAM MANY TIMES IN THE PAST AND I WAS A SKEPTIC, DON’T CALL THIS THE VARNEY SCENARIO BECAUSE IT’S NOT. I WAS A SKEPTIC AND DID NOT THINK WE COULD GET THE% GROWTH IN THE FIRST QUARTER BUT YOU CONSISTENTLY SAID AND NOW YOU’RE ON THE PROGRAM THINK THERE’S A GOOD CHANCE OF 4% GROWTH BELOW THE .6% UNAPPOINTED IN THIS CALENDAR YEAR. LAST WORD TO YOU.>>EVERY TEN, 15 YEARS, STUART I GET IT RIGHT. [LAUGHTER] STUART: TO REMEMBER WHEN I FIRST MET YOU? I REMEMBER MEETING YOU IN THE PLAZA HOTEL IN NEW YORK CITY ABOUT 1982 WHEN YOU WORKED WITH RONALD REAGAN AT THE TREASURY AND I REMEMBER DISTINCTLY BECAUSE I KNOW YOU EVER SINCE.>>I WAS IN OMB BUT YES, YOU AND LOU DOBBS I WAS YOUR [INAUDIBLE] YOU MADE ME GET UP AND I WAS ON THERE AT 6:30 A.M. STUART: YOU GOT MAD AT HELL AS ME BECAUSE I WOKE YOU UP IN THE MIDDLE OF THE NIGHT AND THAT YOU NEVER SPEAK TO ME AGAIN.>>AND LOU WHO IS AN OLD FRIEND WOULD NOT GIVE ME MONEY FOR THAT AND SAID HE’D SEND ME A BOX OF CIGARS I’M STILL WAITING FOR THOSE CIGARS. [LAUGHTER]

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