THAT'S A FACT.
OH, WAIT FOR IT, LARRY KUDLOW IS
WITH US, JOINING US NOW.
WHITE HOUSE ECONOMIST LARRY
KUDLOW.
HE'S THERE.
I THOUGHT -- I'M GLAD YOU'RE ON
CAMERA AND NOT ON THE PHONE,
BECAUSE I WANTED TO SEE A GREAT
BIG SMILE AS SOON AS YOU
APPEARED --
[LAUGHTER]
BECAUSE OF THE JOBS REPORT.
YOU KNOW, LARRY, WHY DON'T YOU
JUST TAKE A VICTORY LAP AND GO
AT IT RIGHT NOW.
>> OH, YOU KNOW, MODEST GUY THAT
I AM --
[LAUGHTER]
LET ME TAKE MY THROAT LOZENGE
OUT.
I'VE BEEN TALKING FOR SO LONG, I
CAN'T TALK.
FIRST OF ALL, STU, IT'S ALWAYS A
PLEASURE.
HAPPY THANKSGIVING AND HOLIDAYS.
STUART: THANK YOU.
>> I JUST WANT TO SAY THAT THESE
ARE SPECTACULAR NUMBERS, WHAT,
236 AND THEN YOU -- 266 AND THEN
YOU HAD A 241,000 UP FOR
REVISION.
THOSE ARE REALLY BIG NUMBERS.
YOU'RE BACK IN THE 300,000 ZONE.
BUT REALLY, REALLY, I GUESS THE
FUNDAMENTAL POINT, AMERICA IS
WORKING.
AMERICA IS WORKING.
AND JUST TO GO UNDERNEATH THAT,
WHAT WE FIND LOOKING AT THE
NUMBERS FROM THIS MONTH AND
RECENT MONTHS AND THE WHOLE YEAR
OR SO, THE PRODUCTION WORKERS
ARE GETTING FASTER WAGE GAINS
THAN THEIR BOSSES, THE MANAGERS.
LAST TIME I SAW THAT, STU, WAS
WHEN I WAS A REAGAN CUB SCOUT AT
OMB HERE.
IT'S THE SAME IDEA.
WE HADN'T SEEN THAT FOR MANY,
MANY YEARS.
AND I WANT TO MAKE ONE LAST
POINT SURROUNDING THIS, AMERICA
IS WORKING.
WE ARE IN AN AMERICAN WORKERS'
BOOM WITH RESPECT TO INCOME AND
WAGES.
BUT LOOK, PRESIDENT TRUMP HAS
RESTRUCTURED AND REBUILT THIS
ECONOMY WITH LOWER TAXES AND
REGULATIONS AND ENERGY OPENINGS
AND TRADE OPENINGS, TOUGH TRADE
OPENINGS.
WE ARE SEEING SOME VERY BIG
CHANGES IN THE WHOLE
INFRASTRUCTURE OF THE U.S.
ECONOMY.
AND YOU KNOW WHAT?
IT'S NOT OVER YET.
I KNOW EVERYBODY WAS TALKING
ABOUT A RECESSION A FEW MONTHS
AGO.
I ARGUED TIL I WAS BLUE IN THE
FACE THAT WOULDN'T HAPPEN.
THIS THING IS NOWHERE'S NEAR
OVER, NOWHERE'S NEAR OVER.
STUART: SO CAN WE GET CLOSER TO
3% GROWTH IN THE EARLY PART OF
NEXT YEAR?
BECAUSE WE'VE COME DOWN FROM 3%,
2.
WE'RE PROBABLY AROUND 2% RIGHT
NOW.
BUT WITH A JOBS REPORT LIKE
THIS, WAGES RISING AND ALL THE
CHANGES THAT YOU'VE OUTLINED
THERE, LARRY, CAN WE GET TO 3%
IN THE EARLY PART OF NEXT YEAR?
CAN WE DO IT?
>> WELL, WE SURE CAN.
WE ABSOLUTELY SURELY CAN.
I MEAN, ONE KEY HERE, JUST I'LL
BE GENERAL AND THEN I'LL BE VERY
DIRECT, ONE KEY HERE IS TO GET
MY THEME OF REBUILDING AND
RESTRUCTURING.
PRESIDENT TRUMP HAS
REESTABLISHED AND RETORED AND
DEEPENED INCENTIVES, INCENTIVES,
YOU KNOW, TO WORK, TO INVEST, TO
TAKE RISKS, TO START A BUSINESS.
HE'S NOT ATTACKING SUCCESS, HE'S
REWARDING SUCCESS.
THAT'S A HUGE PART OF THE
RESTRUCTURING.
NOW, TO THE NUMERICAL POINT,
SOME POSITIVE THINGS HAPPENING.
I MEAN, LOOK, WE RAN UP AGAINST
AN EXTREMELY SEVERE, TIGHT
MONETARY POLICY STARTING IN 2017
AND THEN BRUTALIZING IN 2018.
NOW, THE FED HAS CHANGED COURSE,
THEY'VE TAKEN THE FOOT OFF THE
BRAKE.
THE BALANCE SHEET IS RISING
NICELY.
I LOOKED THIS MORNING, THE
MONETARY BASE ARE GROWING ABOUT
14% AT AN ANNUAL RATE YEAR ON
YEAR.
THAT'S A TOTAL REVERSAL FROM
WHERE WE WERE A YEAR AGO AND A
DARN GOOD THING.
AND THEY'VE LOWERED THE RATES.
SO THAT'S A BIG PLUS RIGHT THERE
BECAUSE, YOU KNOW, THAT MONETARY
STUFF WAS STIFLING THE
INCENTIVES THAT I WAS ARGUING
ABOUT BEFORE.
SO I'M VERY HOPEFUL ON THAT.
AND JUST ON TODAY'S JOBS
NUMBERS, STU, I THINK WE ARE
MOVING INTO A CAP-EX BUSINESS
INVESTMENT RECOVERY.
WE HAD A TERRIFIC ONE IN 2017 --
STUART: HOW DO YOU THINK -- HOW
DO YOU KNOW THAT?
WHAT NUMBERS CAN YOU TELL ME
THAT WE GOT A CAPITAL INVESTMENT
RESURGENCE?
WHERE IS IT?
>> COUPLE THINGS.
AND IT'S NOT OVERWHELMING, BUT I
WILL JUST SAY HERE'S WHAT I'M
LOOKING AT, YOU KNOW?
I USED TO BE A WALL STREET
ECONOMIST, ETC., ETC., ETC.
THE DURABLE GOODS REPORT, THE
CORE CAP-EX SHIPMENTS AND ORDERS
POPPED UP IN OCTOBER.
THAT DOESN'T MAKE A A WHOLE
STORY, BUT IT'S THE FIRST NICE
POP-UP I'VE SEEN.
AND ONE OTHER POINT I'LL MAKE,
AND THIS IS MAYBE A LITTLE MORE
CONTROVERSIAL, I KNOW THE ISM
MANUFACTURING WAS DOWN A BIT.
BUT, YOU KNOW, THEY'RE COMPETING
WITH THE9 MARKET PMI, AND THAT
BROADER MEASURE -- IT COVERS
MORE COMPANIES -- THAT'S BEEN UP
NOW, I BELIEVE, FOR THREE OR
FOUR STRAIGHT MONTHS.
SO THERE'S EARLY SIGNS.
BUT THE OTHER THING TOO WITH THE
GM STRIKE OVER, I THINK THESE
EMPLOYMENT NUMBERS AND THE
INCOME NUMBERS BEHIND IT ARE
REALLY GOING TO PRODUCE MUCH
MORE BUSINESS INVESTMENT IN
MACHINERY AND TECHNOLOGY AND SO
FORTH.
AND THEN WE'VE GOT STUFF GOING
ON, LOOK, NEC IS DEEPLY INVOLVED
IN THE 5G BUILDOUT.
THE 5G BUILDOUT IS NOT ONLY
EMPLOYING HUNDREDS OF BILLIONS
OF DOLLARS AND WE'RE JUST
GETTING STARTED, THERE ARE GOING
TO BE HUNDREDS OF THOUSANDS OF
PEOPLE EMPLOYED WHETHER IT'S
HIGH BAND IN THE CITIES OR MID
BAND IN THE RURAL AREAS.
THAT'S ALREADY BEGINNING.
THAT'S A WHOLE DISASTER.
YOU KNOW, THESE ARE GALES OF
CREATIVE DESTRUCTION.
TECHNOLOGY LEADS THE WAY.
[LAUGHTER]
SO I'M JUST SAYING, AMERICA IS
WORKING, AMERICA -- MIDDLE
INCOME AMERICANS ARE MAKING MORE
MONEY.
THEIR TAKE-HOME PAY IS BETTER
THAN ANYTHING WE'VE SEEN IN 20
YEARS.
SO, YEAH, I THINK BUSINESS IS
GOING TO --
STUART: OKAY.
NOW TELL ME ABOUT CHINA TRADE.
I HAVE TO ASK THE QUESTION.
EVERY DAY WE SEEM TO GET A
HEADLINE ON CHINA TRADE.
THE MARKET GOES UP, THE MARKET
GOES DOWN.
IT'S ALWAYS INDEFINITE.
THERE'S NOTHING CONCRETE.
CAN YOU GIVE US A CONCRETE WORD
ON CHINA TRADE?
FOR EXAMPLE, ARE WE CLOSE TO
PHASE ONE DEAL?
YOU KNOW, ARE WE?
ARE WE CLOSE?
>> WELL, LOOK, I WILL SAY WE'RE
CLOSE.
I WILL REALLY RATHER QUOTE THE
PRESIDENT WHO HIMSELF IN LONDON
AND NOW BACK IN WASHINGTON LAST
COUPLE DAYS HAS SAID VIRTUALLY
ROUND THE CLOCK TALKS, TALKS
HAVE BEEN CONSTRUCTIVE, THE
TALKS HAVE BEEN PRODUCTIVE.
HE'S BEEN SAYING THIS, HE'S BEEN
TWEETING THIS.
HE HASN'T SEEN THE FINAL DEAL
YET, BUT HE'S BEEN PRETTY
OPTIMISTIC ABOUT THE MOVEMENT OF
THIS THING.
THE DEPUTIES LEVEL JUST, LET'S
SEE, TWO NIGHTS AGO THEY HAD A
MEETING.
WE'RE BASICALLY INVOLVED NOW IN
EVERY ASPECT OF THIS.
SO, YOU KNOW, STAY TUNED.
THAT'S ALL I CAN SAY.
STUART: WELL, HERE'S WHAT SOME
PEOPLE ARE SAYING, THE PRESIDENT
WILL MOVE HEAVEN AND EARTH TO
KEEP THIS ECONOMY GOING INTO
2020 AND INTO THE ELECTION.
AND TO KEEP IT GOING, HE'LL DO
ANYTHING INCLUDING WORKING OUT A
CHINA TRADE DEAL BECAUSE THAT
WOULD BE GOOD FOR THE ECONOMY
AND GOOD FOR THE MARKET.
DOES HE FEEL THAT PRESSURE?
IS HE IN THAT CORNER?
>> NO, I THINK THAT'S MANAGER OF
A MISCHARACTERIZATION.
SOMETHING OF A
MISEXACTERRIZATION.
LET ME BE CAREFUL HERE, I DON'T
WANT TO MISQUOTE.
HE HAS SAID TIME AND AGAIN HE
WILL SIGN A GOOD DEAL OR A GREAT
DEAL, AS HE COULD CHARACTERIZE
IT.
WHAT'S GOOD FOR THE ECONOMY.
WELL, A GOOD DEAL THIS DEALS
WITH ISSUES SUCH AS FARM IF
TARIFFS AND FARM PURCHASES,
INTELLECTUAL PROPERTY THEFT,
FORCED TECHNOLOGY TRANSFER AND A
LITANY OF THINGS.
A GOOD DEAL LIKE THAT, WHICH IS
ENFORCED, WOULD BE GREAT FOR OUR
ECONOMY.
BOTH OUR ECONOMIES.
ON THE OTHER HAND, STU, LET ME
PUT IT TO YOU THIS WAY.
IF WE DON'T GET SUCH A DEAL,
THEN I THINK THE PRESIDENT IS
BOUND AND DETERMINED, AS HE HAS
SHOWN US, TO DEFEND AMERICA AND
TO DEFEND THE AMERICAN ECONOMY
AND DEFEND THE AMERICAN WORKER,
THE FARMER, THE TECHNOLOGY
PERSON.
THAT'S A FORM OF ECONOMIC GROWTH
TOO.
I MEAN, WE CANNOT GIVE UP, WE
CANNOT LET ANY POWER, BE IT
CHINA OR ANY OTHER POWER, STEAL
OUR DREAMS.
OUR PLANS, OUR CREATIVITY.
SO THE PRESIDENT MUST PROTECT
AND DEFEND OUR ECONOMIC RIGHTS
AS WELL AS NATIONAL SECURITY.
AND YOU KNOW WHAT?
HE HAS BEEN TOUGH, I LOVE TOUGH,
DEFENDING OUR ECONOMIC SECURITY.
IT'S ALSO GOOD FOR THE ECONOMY.
SO, YOU KNOW, LET'S SEE HOW THIS
THING SHAKES OUT.
STUART: OKAY.
BUT I CAN QUOTE YOU AS SAYING,
YES, YOU THINK WE ARE CLOSE TO A
PHASE ONE DEAL.
GOT IT.
ONE LAST ONE, PLEASE, LARRY.
HOW DID MR. TRUMP REALLY FEEL
ABOUT THAT VIDEO WHERE SOME
WORLD LEADERS APPEARED TO BE
MOCKING HIM AT THE NATO
CONFERENCE?
DO YOU KNOW HOW HE REALLY FELT
ABOUT THAT?
WAS HE REALLY ANGRY?
WAS THAT WHY HE LEFT THE PLACE
FAST?
>> OH, I --
[LAUGHTER]
I WASN'T THERE AT THE TIME.
I THINK, I THINK HE'S MELLOWED
OUT A BIT ON THAT --
STUART: WHAT?
THE PRESIDENT HAS MELLOWED OUT?
[LAUGHTER]
>> KIND OF MELLOWED OUT.
IT'S SUCH A BEAUTIFUL DAY HERE,
STU --
[LAUGHTER]
IT'S SUNNY.
JOBS ARE COMING IN, AMERICANS
ARE HAPPY, I'M HAPPY, YOU'RE
HAPPY.
I THINK, I THINK THE PRESIDENT
USED THE WORD TO DESCRIBE ONE OF
THE LEADERS AS TWO-FACED.
SO SOMETIMES WHEN YOU HAVE TWO
FACES, YOU'VE GOT TO PICK THE
BEST FACE.
STUART: NOT ONLY ARE YOU AN
ECONOMIST, YOU'RE ALSO A
DIPLOMAT.
[LAUGHTER]
YOU KNOW HOW TO DANCE AROUND
SOMETHING REAL CAREFULLY.
THAT WAS A MASTERFUL