tv Newsmakers Larry Kudlow CSPAN March 17, 2019 10:03am-10:41am EDT
work on iraq and afghanistan at issues in the pentagon and the state department between of those times. bothdministrations were the desire was to win politically or win for political reasons, domestic political reasons. >> matthew tonight at 8:00 eastern on "q&a." >> joining us on "newsmakers," larry kudlow. thank you for being with us. also, nancy cook. mr. kudlow, let me begin on the issue of china and trade. last week, you said we have china over a barrel. where do things stand? mr. kudlow: actually, we are making good progress.
bob lighthizer was on the hill a lot of this week and the basic message is we are gaining on it. we are moving forward, closing on a deal. there are still issues to be resolved, particularly in the enforcement area and also want to say as i have in the past, the discussions here have gotten -- gone deeper, broader and further at any time in u.s. china trade relations. on the whole they have been successful. the meetings hereto now three weeks ago when he came with his top deputies and our principles and we've been negotiating and that went very well. he has to go back and get xi.arance from president we had a teleconference meetings every day last week.
this week, steven mnuchin and bob lighthizer made a lot of good progress. they are not quite there yet. there are still some places to go, but bob lighthizer has taught me everything about trade. he's a very cautious man, but he is indicating that we are gaining on it and we have some things to do. one of the most interesting things or two of the most interesting things, china's people's congress, they passed a law that will restrain any intellectual property theft and will also restrain any forced transfer of technology which is an ownership question that will allow the united states companies operating in china to own their own companies and
-- in these joint ventures, which forced us to give up blueprints of technology, so the laws to congress passed deal with that. the currency fix is very well. no competitive devaluations and absolute transparency for any intervention in the open market. that is breaking new ground. what we are left with now is probably more enforcement kind of issues. we have proposed a very comprehensive enforcement, which would move through. if an american company complains or a series of complaints it , will go through three layers between china and the united states teams. we get to the principles if we designate they are not in compliance, we will resort to tariffs in a proportionate way
and the chinese have agreed not to retaliate. we are waiting on a final signoff off on that. it is a very clever approach. president trump himself i was in -- a meeting the other day with the republican senators. the president spoke very well on that. we need a final signoff, but i think for moving ahead nicely. -- we are moving ahead nicely. >> i think there was talk about completing this agreement at mar-a-lago at the end of the month. do you think that is happening or it needs more time? mr. kudlow: i don't want to get into that forecasting business. i think a little more time is going to be necessary. this is a 140 page document and they are going through it line by line. i'm on the trade principles committee. minutia and lighthizer are doing the actual negotiations.
you can imagine line by line on the phone late into the evening, it takes a little more time. there was some talk about how a visit was canceled, that is untrue. you cannot cancel something that was not scheduled. i would say perhaps the month of april. it is not in cement. i don't want people to base any decisions or investments on that point. all i will say this to pete bob lighthizer. i want to quote him to get it right. u.s. and china negotiations are closing in on a deal. hope is we are in the final weeks of the agreement. that is what bob lighthizer is saying. he is my mentor in this. , so we aresage maker close. i don't know whether it is the first week of april, second week of april, third week, the more you get into april, the nicer it
will be for me to go down to mar-a-lago and the weather will be fantastic. we will see. here's my point. we are getting close. reports from some media outlets that we want a fast deal to spur the stock market are utter nonsense. it has to be right and again, trump told the meeting with republican senators on wednesday in the cabinet room it has to be a great deal. it has to protect our workers, farmers, ranchers, our businesses, our technology. it has to. so that is the key we are point. getting closer. >> if you don't reach a deal, what do you think will happen to the markets? mr. kudlow: i don't want to do what if predictions on that sort of thing. i suppose there might be some disappointment. then again, it depends on the conditions. mind you, if we don't get
something done in its entirety in the second week of april, the third week of april, that does not mean it is over. that just means it is taking a little longer. i think everybody knows we would like president xi and president trump to get together and sit down and sign off on this and it is not a time factor. it is a right factor. it has to be good. the president contradicted me in the cabinet room the other day. i said it had to be a good deal and he said it had to be a great deal and i'm all for that. the enforcement mechanism is very important. i will say republican senators, predominantly the traders, are -- free traders are absolutely behind us and agree with this, us, so patience.
it is a virtue. >> >> there has been some disagreement about how long the -- far along the deal has to be to schedule a meeting between the presidents. does the deal have to be totally done and precooked before they set up that meeting? mr. kudlow: that is a good question. i think it should mostly be done before the two leaders get together. whether it has to be entirely done, i don't want to speculate on that. i read some things that you all are writing. we are going to have to be close, maybe a few less details -- last details in order to get the two leaders together and i think the negotiators on both sides, the vice premier, who i believe is a man of integrity. heknows that we know that --
knows that, we know that, president xi knows that. i just don't want to be held or mislead you. we don't necessarily know all that, but again, we are getting close. that is what mr. lighthizer said. bob, who has taught me literally everything i know about trade in the year i've been in this office, is a cautious man. we arehim to say that getting closer on it is a very positive development. >> in that tutorial thing, what one thing you did not know in that -- did you learn in this process? mr. kudlow: that is a great question. it has been a year. i'm not a trade expert. i have learned a lot of things. two points. president trump has proven that
tariffs can be and are essential -- an essential negotiation tool and he believes and i agree that our use of tariffs helped bring them to the table in more serious ways than ever before. our economy is the hottest economy in the world. the china economy has been slumping for quite some time because they have been departing from their reforms and because our tariffs hurt them. i think they want to rescue their economy. their economy, i'm told, is really the most important paramount issue with regard to president xi's own thinking and his policies. i think president trump has taught a lot of us that tariffs can be very useful negotiating
tools and i want to add to that because i have worked very closely with the president, whether it is g7, g20, china, europe or any of these places. tariffs are not an end to themselves. this is his view. he wants a free, fair reciprocal trading system. i call it the three zeros. i wrote a column about this. we would love to see a world of zero tariffs, nontariff barriers and such things. -- subsidies. we would love to see a world that is fully reciprocal, so they treat us as we treat them. they cannot have an 80% tariff on something. when we are at 20 or that has to 10. change. that has done damage to our own economy and workforce. i think skeptics, nonetheless, the president upon use of
-- president's use of tariffs have been instrumental and -- in positive -- and positive in negotiations. i have experienced this with europe. where we reopened. i helped work on that. certainly the usmca, which is bob lighthizer's most brilliant new template for trade deals. we are doing it with japan and china. nothing wrong with using tariffs. other presidents shied away. this president refused to let go of the china story. not just a few press releases. in and it got a response from them. >> part of the president's economic agenda has been deregulation and more business friendly environment. there have been some critics who
have said maybe the administration had been too friendly with the company like boeing. after what we saw happen. every other country had grounded these planes and the u.s. was the last to act and the ceo made personal calls to the president. can you walk us through why the trump administration moved so slow and in retrospect, maybe they should have moved more quickly? >> i happened to be sitting in on the phone call. the president, i don't know if you've ever had the experience of a potus cross-examination. i'm in there all the time. doing policy stuff. you better be ready and he had a lot of tough questions for boeing. i'm not going to go into the details of a private conversation, but the fact that we waited a day is of no consequence. i would not read anything into that.
decisions were made over the department of transportation. secretary elaine chao, who was a very brave woman, working with the fda. we are still trying to find the black box and open it up. we had some trouble with the ethiopians. they wanted to go to a third party and this and that. it will get squared away. we will learn many more facts. it has nothing to do with commercial considerations as far as we are concerned and everything to do with safety considerations, so to be honest with you i would not read into that. >> do you think it will take a long time for them to sort out whether these planes are safe? i'm sure a lot of americans and people around the world are wondering. fixed in ak this we couple of days or will it take a while? mr. kudlow: i'm not directly involved in that. you can be sure that our dot and
faa will not reopen those until we are 100% satisfied of safety. from what i gather, boeing has come forward to make some adjustments and flight plans and software and sensors and pilot training. i'm not blaming here, just giving you a narrative. they will not be on the runways until we are absolutely satisfied they are safe. ?> what was the new data my reporting was you got new data the other morning that made you ground the planes. what was the new data because other countries like canada had dated that made them ground the planes 24 hours earlier. >> i'm going to leave those details alone. first of all, i'm not an expert. although the nec is involved, --
the president himself and you have seen his tweets has been somewhat skeptical about the advanced computerization of these planes. i'm not going to go there because it is not my field of expertise. we will find the data, get the black box, it will be examined. there is no higher priority than the safety of the united states and world travelers here. boeing is a fine company. they may have to make fixes. again, i'm not an expert. i don't want to point to any one thing. i just want to say i think we did the prudent thing and we will continue to act accordingly. >> let me turn to another issue. we recently passed a $22 trillion debt. at what point is that unsustainable?
>> we recently proposed, past, what you mean? >> the debt. mr. kudlow: it is actually a little less than that, but who's counting? >> still a lot of money. mr. kudlow: it is funny. the american economy is $20 trillion real gdp. household net worth is well over $100 trillion. i don't regard that as alarming. i do not regard that as alarming. i know people like to talk about that. the trick here, first and foremost, more than any other factor is to grow the economy to its maximum potential. growth solves a lot of problems.
for example, in our latest budget out this past week, we are running -- spending is about 5% gdp and we are showing -- the deficit is about 5% gdp as well and we are showing a longer-term baseline where we will be cycling down those ratios and it's based on two things. number one, we are sticking with our view that lower marginal tax rates create incentives to work, produce and invest and we are in effect rebuilding the american economy in ways that are 20 years old plus. we are maintaining our efforts to roll back all manner of unnecessary regulations. it is very interesting.
if you look into a statistic called new business applications and new business formations. these are the small businesses. i think the face of the new trump economy right now is to -- two fold. men and women starting and owning their own companies because of low taxes and regulations not only give them an incentive reward, but make it easier because the paperwork is lighter. of course, we have opened up the energy sector and made these trade reforms. men and women owning small businesses, we haven't seen that in a long time. secondly, blue-collar workers, we have the best employment increases since i was here during the reagan era. the blue-collar pay scales are fastest growing.
they have grown faster than white-collar pay scales. i'm not saying they are higher, they are just growing more rapidly. and finally, i'm very proud of this. the newest, most powerful -- entrance to the labor force are women. we have not seen that in a long time. something like 62% of the new jobs of the past year or so have come from women and the unemployment rate, which is 3.8% overall, you go down the line, african americans, women, asians, hispanics, even things like people who do not have college education, they are coming back into the labor force because of high wages and they are being retrained and re-skilled by your friend and colleague.
this is the dynamism that will eventually lower and lower the debt burden on the economy so it is not a problem. that is what i'm saying. >> the u.s. economy had a really strong year last year, growth and job, but we are all watching europe closely, china as well, particularly with brexit. no one really knows what the impact will be on the u.s. economy if there is a messy divorce. have you thought through this? what should americans prepare for if this is not play out well? >> we are looking at it and solving it. i talked to the british and basset are constantly. he is a wonderful man. it's losing votes left and right . different plants on seem to be looking out. i personally favored brexit, so -- several years ago, so did the president. i think it could be a great idea. i refer to it as magna carta
2.0. you could have a dynamic british economy and not be overregulated and overtaxed. >> should they have a do over vote? mr. kudlow: i think if you do rip the british democracy in many different pieces. they voted for it. now get it done. that's my opinion. we were with the irish prime minister. nobody really knows. point -- to your point, no it will not disrupt the american economy. i'm aware the whole european economy is near recession and china is the weakest it has been in decades and so is japan. we are the engine of growth. we create the incentives after-tax, after regulation to promote economic growth, jobs and technological advance.
the u.s. drives the rest of the world. i cannot make that point enough. in fact, even our trade deficits which do not thrill us, we are the only source of demand that these other countries have. we had the g-7 meetings. and the g20 meetings. we will go again in japan and france. i've become friendly with a lot of these heads of states. i urged them and said prime minister abe, who i love, you slash your tax rate. you need to get down there. you really should reform your --or markets so you can add dynamism is missing from the rest of the world. president trump on the other hand has ended the war on
business, on success. some of these crazy socialist people don't seem to have a clue about how that works. we are a free market economy to exercise our god-given talent. when you reward people, they will work. the incentive model works, lower tax rates work. john f. kennedy did it, ronald reagan did it. donald trump is doing it. we drive the world economy. are we immune from that? no. it is just a small piece. >> in the budget that just came out, they were projecting the rate of economic growth would continue to be 3% over the next decade. a lot of independent economists and the cbo disagree with that assessment.
what makes you confident that the u.s. can sustain such a high rate? won't the effects of tax legislation peter out? mr. kudlow: no. i'm glad you asked that. it's this sugar high thing. i think damien writes about this all the time. the one year sugar high thing. i'm just kidding. the corporate tax rate reduction from 40 to 21 is actually permanent. >> 35. number.s a nice we wanted 15. there is a tax cut 2.0, maybe not. that is five years, but it has four more years and the repatriation from overseas is
permanent. by the way, the repatriation is coming in at $750 billion for 2018, which i'm sorry, i cannot remember the joint tax numbers, it has to be three times more than they anticipated and that money is going into wages, bonuses, dividends, share buybacks and capital spending. capital spending which is the hardest. -- part of it. we are investing has never -- heart of it. we are investing has never before and money is coming in from all over the world. the dollar is strong because we are working and they are not. everyone want to invests in the hottest economy because of the change in our laws. if you are going to play that game, the sugar high one year, let's just get the facts right.
it isn't one year, it is a whole bunch of years going well out to 2025, soer, 2024, forth and so on. why shouldn't end? first-quarter. we always do. the government shutdown during that period. i called it the glitch, but you will see it taking up really nicely. we are already seeing a nice move up in the stock market and consumer confidence. i am very pleased that reserve is on hold. thrilled about their interest rate hikes in the fourth quarter, and i will say cuts,too, blindside tax which produce more investment from the supply side of the economy and production, anductivity hour-by-hour, the economy at the center of it.
1.8% is the best number we have had in many years. why can't this go on for quite some time? really? -- and, wait, in my old age, i do not want to forget the fact there is no inflation. with all those econometric models, have argued for some many decades, and i have been fighting this for so many years, i cannot even remember. the economy can grow faster from supply-side tax cuts, deregulation, and the fact and the economy can grow faster with the study dollar is not cause inflation. that old celebs curve, more people working is bad? no. more people working with higher productivity is bad? no. there is no inflation. look at the market signals, ok?
the bond market spreads are telling you know inflation. we are worried about the budget deficit, so how come that 10 year treasury bond is 2.6%? if it was a crisis, it would be higher than that. signal,is giving you a and i am glad. i'm glad and appraise the federal economy for shifting its policies. >> we have a minute left. one thing we are hearing a lot about from the campaign trail is this big tech idea that something has to be done about technology companies, google, facebook, and others gathering personal data and doing whatever they want. is the white house looking at addressing this in some way? >> i am not going to give you a clear beer, but we are looking at it. the nec is looking at it. it is an important issue. 5g.re doing very well on
we are. there is this idea it is a catastrophe and nothing is happening. .e are doing very well on 5g we are well ahead of our chinese counterparts in the united states. we will do more and more. you know why? free market entrepreneurial project -- private sector investment always wins. government control and socialism, and health care for all, and paying everybody whether they work or not, and the green new deal, which ambably cost $100 billion, i -- maybe we can come back and talk about that. trial,tting socialism on and i going to convict socialism . this is a teaching moment, and the young people, the so-called millennials going to work, i believe oh come around to our
point of view. you remember what winston churchill said. he said it to me personally many years ago. when you are in your 20's, if you are not a socialist, you have no heart. if you are in your 30's and you are not the capitalist, you have no brain. we are entering into the capitalist brain part. i do not mean this to be condescending. this is a teaching moment. our system with its free demand prosperity is the greatest system in the history of history. i want to change it -- i do not want to change it. people, want to punish i want to reward them. in other places, we, the usa, have the lead and will remain in the lead. >> we want to back any time. i want to conclude with a personal question. this weekend marks when you're at the white house, and you had a heart attack a couple of weeks into the job. how are you feeling? call it my cardiac
episode. you are kind to ask. i absolutely feel great. know, this is the greatest job i have ever had. i was here years ago at a lower level job. it is a great honor for me. i love working with president trump. i am with him all day, every rightnd we are using the , tocies to rebuild america rebuild america. it is an honor for me to be a part of that. >> very cut low, the director of the white house economic council. thank you -- larry kudlow, the director of the white house economic council. nancy on china. if you could read the tea leaves, what is going to happen next? >> well, i think larry kudlow presented an optimistic view of
the administration's dealing with china and wanted to make the point that talks were going well. he did make a little news in saying it seemed like a meeting with president trump and china, thei possibility had slipped until april. we had thought it would be at the end of march. that signals there may be some real sticking points, which you talk about over enforcements, and it is slow going compared to what the administration had thought. host: he seemed to downplay that the $2 trillion debt, did that surprise you? guest: he did, and what i thought was interesting was the idea that the markets, how the markets reacted and how the deal came together. he also said they would be a little disappointed. that is a huge understatement if the markets are going to be hugely disappointed with the tariffs. you know, key political constituency facingtariffs.
not onlye is mirroring his own views but president trump's. republicanrump is a who is not been terribly concerned about those things. host: and you line of questioning on boeing and what has been happily with big tech. guest: i was surprised because the white house went out of its way to defend boeing, and the u.s. was the last country to not ground the plane. and then larry tells us, which i had not heard, that president trump was actually quite tough on the ceo and they will not let the planes back on the runway and tell they are 100% safe. we had not heard that before. also one big tech, we are all curious where the white house stands on the emerging debate about they companies and the information they are collecting and selling. -- larry kudlow said for the first time they were looking at doing something. definitely something to watch closely.
host: and we heard that from elizabeth warren, so this will be an issue in the democratic i married. guest: and democrat -- in the diamond craddick primary -- in the democratic primary. guest: also, they are asking why they are not more transparent, so i think we will hear about that a lot on the campaign trail and killed. guest: it is notable -- on the campaign trail and hill. trump the administration has been presenting themselves as a probe, and this may be one instance where they think about how to rein in technology companies or reevaluate their power. host: nancy cook, white house reporter for politico. and the white house economic journalist. thank you for being with us on c-span. >> congress is in recess until
monday, march 25. house speaker nancy pelosi vote ond the house will an override of the president's veto of the american declaration resolution. that measure to terminate the president's border emergency declaration originally passed 245-182, by a vote of but will need a two thirds majority to override the veto. that vote will be held tuesday, arch 26, live on cease -- march 26, live on c-span. when the senate returns, work continues on judicial nominations with the procedural vote on a nominee to serve on the ninth circuit court of appeals. later in the week, they will begin debates on the green new deal proposal and the disaster aid measure. watch live senate coverage on c-span2. on capitol hill this week, the ceo of wells fargo, tim sloan, told lawmakers about
improvements he says wells fargo has made in its approach to customer service since he took over in 2016. he faced questions by members of the house financial services committee, citing examples of what they described as consumer abuse and predatory practices. here is a portion of the hearing , leading off with questioning by committee chair maxine waters. chair waters: according to the 2010 wells fargo claimed, they had a plan to remediate customers affected by these matters.