MARIA: JOINING US RIGHT NOW IS
VESTED CHIEF ECONOMIST MILTON
ESRATI.
THANKS FOR JOINING US.
>> PLEASURE TO BE HERE.
MARIA: WE'VE SEEN THE CHINESE
ECONOMY HAVE AN IMPACT.
WHAT ARE YOU EXPECTING HERE?
>> I THINK THE CHINESE ARE GOING
TO SIGN A DEAL.
THEIR ECONOMY SUFFERED
TREMENDOUSLY, NOT JUST FROM THE
TARIFFS.
THERE'S A NATURAL SLOWDOWN IT'S
NOT THE DEVELOPING ECONOMY IT
WAS.
A LOT OF INDUSTRY IS LEAVING
CHINA, NOT JUST TO AVOID THE
TARIFFS BUT ALSO THEY'RE LEAVING
BECAUSE THE WAGES HAVE GONE UP
MORE THAN IN NEIGHBORING
COUNTRIES, VIETNAM, CAMBODIA,
INDONESIA.
CHINA, THIS HAS COME AT A BAD
POINT FOR CHINA.
THEY HAVE TO MAKE A DEAL.
THEY NEED US MORE THAN WE NEED
THEM.
MARIA: THE LAST THING CHINA
WANTS IS UNREST IN THE STREETS,
RIGHT, STEVE?
>> THAT'S RIGHT.
THE WHOLE DEAL WITH THE
COMMUNIST REGIME IS THEY DELIVER
THE GOODS SO YOU PUT UP WITH THE
REGIME'S SUPPRESSION.
AS LONG AS YOU HAVE THE FREEDOM
TO GET RICH.
CHINA'S BEEN FAKING THEIR
ECONOMIC STATISTICS OR RATHER
INFLATING THEM, MAYBE THEY'RE
GETTING -- HAVE THAT COLLEGE
SCANDAL BUG IN THEM.
BUT ANYWAY, NOBODY BELIEVES
THOSE NUMBERS ANYMORE AND
THEY'VE GOT TO DELIVER AND THEY
HAVEN'T BEEN ABLE TO DELIVER.
>> I THINK IT'S NOTEWORTHY IN
THIS RESPECT ON CHINA, IF YOU GO
BACK TO 2008, THE RECESSION
OF '08, THE WHOLE GLOBE WAS IN
RECESSION.
THE CHINESE DON'T HAVE MUCH OF A
SOCIAL SAFETY NET.
THEY LAID PEOPLE OFF AND THERE
WERE PARTY MEMBERS --
>> IT'S AMAZING HOW CHINA DOES
THE GDP.
THEY WOULD HAVE THE GOAL -- THIS
IS THE GOAL FOR THE GDP AND THEY
TELL LOCAL GOVERNMENTS -- IF
GOVERNMENT SPENDS, THAT COUNTS
AS PLUS ON GDP.
THEY WOULD TELL LOCAL
GOVERNMENTS, SPEND TO MAKE SURE
WE REACH THE TARGET, WHATEVER IT
WAS.
SINCE 2008, ESPECIALLY, IT WAS A
FALSE BOOM.
IT'S NOT FROM FREE MARKET FORCES
AT WORK.
IT'S DIRECTED FROM THE TOP.
THAT'S WHY YOU HAVE MASSIVE BORE
BORROWING IN CHINA, TO INFLATE
THE GDP NUMBERS.
MARIA: WHAT ABOUT THE U.S.?
>> I THINK THE U.S. ECONOMY IS
SLOWING NOW.
I DON'T THINK IT'S GOING TO BE A
LASTING THING.
I THINK IT WILL PICK UP IN THE
SECOND HALF OF THE YEAR AND THE
CONSUMERS SPENT A LITTLE AHEAD
OF INCOME GROWTH LAST YEAR.
HE AND SHE ARE PULLING IN HORN.
THAT'S THEIR FIRST QUARTER THIS
YEAR, MAYBE INTO THE SPRING.
CAPITAL SPENDING WHICH HAD DONE
VERY WELL IN '17, '18, VOTED IN8
VERY WELL IN '17, '18, VOTED IN,
VERY WELL IN '17, '18, VOTED INS
VERY WELL IN '17, '18, VOTED INO
VERY WELL IN '17, '18, VOTED INE
VERY WELL IN '17, '18, VOTED IND
VERY WELL IN '17, '18, VOTED INI
VERY WELL IN '17, '18, VOTED INN
THE LAST PART OF LAST YEAR.
HOUSING HAS SEEMED TO HAVE
STABILIZED.
>> IT DEPENDS ON A CHINA DEAL.
>> IT DEPENDS ON THE CHINA DEAL.
>> WERE YOU SURPRISED THAT GARY
COHN SAID THE U.S. WAS DESPERATE
FOR A DEAL.
TO ME, THAT INTERVIEW SEEMED
PERSONAL.
HE WAS HITTING SOME OF THE
FORMER COLLEAGUES AT THE WHITE
HOUSE.
I DON'T KNOW IF HE WAS SETTLING
SCORES OR IF HE ACTUALLY
BELIEVES WE'RE DESPERATE FOR A
DEAL.
>> I THINK HE BELIEVES WE'RE
GETTING A DEAL.
I DON'T KNOW WHAT MOTIVATES THE
MAN.
I DON'T THINK I EVER WILL.
MARIA: MINNESOTA RESIDENTS ARE
REPORTEDLY BUYING UP MUNI BONDS
TO REDUCE THE TAX BURDEN.
THEY ARE AT 9.85%, ACCORDING TO
TURBO TAX.
IT'S NOT JUST THE NORTHEAST
DEALING WITH THE FALLOUT OF HIGH
RATES.
YOU'RE SEEING A MASSIVE EXODUS
IN SOME OF THE HIGH TAX STATES
IN THE U.S.
>> THE DEAL HAS EFFECTIVELY
TURNED THE PUBLIC -- IF THEY
DON'T LIKE THE TAXES NOW, THEY
HAVE NO REPRIEVE EXCEPT TO
EITHER LEAVE OR GO TO THEIR
STATE CAPITAL AND SAY STOP THIS.
THOSE ARE THEIR ONLY OPTIONS.
THEY USED TO BE ABLE TO
EFFECTIVELY SOCIALIZE THE TAXES
BY SPREADING IT OUT THROUGH THE
REST OF THE COUNTRY.
THAT'S GONE NOW.
NEW YORK IS SUFFERING FROM THAT.
THAT'S A PROBLEM FOR THE CITY,
NEW YORK STATE AND ALL THE HIGH
TAX STATES.
>> DO YOU THINK ALBANY, NEW YORK
CITY, GRACIE MANSION REALIZE HOW
PRECARIOUS NEW YORK'S POSITION
IS.
I'M OLD ENOUGH TO REMEMBER THE
MID-1970s.
ARE WE GOING TO HAVE A REPEAT OF
THAT.
MARIA: CAN NEW YORK GO
BANKRUPT?
>> THAT'S WHAT I'M ASKING.
>> THE STATE ARRANGED TO BILL
PAY FOR THE CITY, CUT THE CREDIT
CARDS IN HALF.
IT COULD HAPPEN AGAIN.
I DON'T THINK IT'S GOING TO
HAPPEN IF AND UNTIL WE HAVE A
RECESSION.
BUT THE CITY -- THIS IS THE BEST
OF TIMES FOR NEW YORK CITY.
UNEMPLOYMENT IS LOW.
THE MARKET REMAINS RELATIVELY
BOUYANT.
EVERYTHING IS RIGHT FOR THE
CITY.
THEY'RE STILL RUNNING A DEFICIT.
THEY CALL IT A GAP.
IT'S A DEFICIT OF ALMOST
$4 BILLION.
DAGEN: GOVERNOR CUOMO
UNDERSTANDS WHAT'S GOING ON IN
THE STATE, THOUGH, BECAUSE OF
THE REVENUE SHORTFALL THAT'S
REALLY PUTTING A SQUEEZE ON THE
STATE'S BUDGET.
MARIA: $2 BILLION.
DAGEN: WHEN YOU SEE 25,000 JOBS
THAT WERE HEADING INTO NEW YORK
CITY FROM AMAZON DISAPPEAR
OVERNIGHT BECAUSE OF SOME
20-SOMETHING CONGRESSWOMAN WHO
DOESN'T UNDERSTAND HOW THE
UNEMPLOYMENT RATE IS CALCULATED,
THAT SENDS SHIVERS THROUGH THE
SPINES OF POLITICIANS.
>> I THINK CUOMO KNOWS.
I DIDN'T ANSWER FOR DE BLASIO.
MARIA: WHAT IS GOVERNOR CUOMO
GOING TO DO?
IF HIS BACK IS UP AGAINST THE
WALL AND YOU'VE GOT ALL OF THIS
UNCERTAINTY AND CONCERN OVER
TAXES, WILL HE ACTUALLY LOWER
TAXES?
>> OH, I DON'T THINK HE'S GOING
TO LOWER TAXES.
I THINK HIS FIRST MOVE IS TO TRY
TO CUT SPENDING.
DAGEN: AND DO MORE DEALS WITH
TECHNOLOGY COMPANIES?
GOOGLE IS HUGE, HUGE EMPLOYER IN
NEW YORK CITY AND GROWING.
THEY'RE JUST NOT GOING TO
PUBLICIZE ANY KIND OF DEALS THEY
MAKE WITH THESE CORPORATIONS.
THEY'RE GOING TO SAY KEEP IT ON
THE Q.T., WE'RE NOT GOING TO
MAKE SOME BIG MARKETING SPLASH
WITH IT.
OTHERWISE, YOU KNOW WHO WILL BE
TWEETING ABOUT IT, TWEETING I'DT
TWEETING ABOUT IT, TWEETING I'DE
TWEETING ABOUT IT, TWEETING I'DT
TWEETING ABOUT IT, TWEETING I'DN
TWEETING ABOUT IT, TWEETING I'DG
IDIOCY WHICH I KNOW WE'LL BE
TALKING ABOUT WITH CARL