MARIA: WELCOME BACK.
WE JUST HEARD FROM HANK PAULSON
10 YEARS AFTER THE FINANCIAL
CRISIS.
MY NEXT GUEST IS PREDICTING A
RECESSION FOR THE FIRST TIME IN
10 YEARS.
ARE THERE HAZARDS ON THE
HORIZON?
JOINING ME TO DISCUSS, ECONOMIST
NOURIEL ROUBINI.
HE'S CALLED BY "FOREIGN POLICY
MAGAZINE" ONE OF THE TOP 100
GLOBAL THINKERS.
HE PREDICTED THE 2007-2008
HOUSING COLLAPSE.
YOU HAVE CONCERNS ABOUT WHERE WE
ARE ON THE HORIZON.
BUT CHARACTERIZE WHERE WE ARE IN
TERMS OF THE ECONOMY.
>> THE ECONOMY IN THE U.S. AND
GLOBALLY IS DOING WELL.
NEXT YEAR THE WILL BE SLIGHTLY
LESS THAN 2%.
BUT I EXPECT A SLOWDOWN AND
LIKELY A RECESSION BY 2020.
THE NEXT TWO YEARS THINGS ARE
FINE, BUT THEN WE'LL HAVE A
SIGNIFICANT SLOWDOWN IN GROWTH.
MARIA: WHY?
WHERE -- HOW DO YOU GET THERE
FOR A SLOWDOWN AND RECESSION IN
2.
>>
IN -- IN 2020.
THE THIRD QUARTER LOOKS LIKE
AROUND 3%.
THE ECONOMY IS GROWING AROUND
3%.
THIS YEAR AND NEXT YEAR, 1% OF
GDP.
CONSUMER CONFIDENCE IS BETTER
AND BUSINESS CONFIDENCE IS
BETTER.
BUT MOST OF OF THE MOVEMENT FROM
2 TO 3.
THE WAY THEY DESIGNED IT TO
018-2019.
AND IT'S A CLIFF.
THE STIMULUS GOES AWAY AND THE
BEGINNING IN 2020.
AND IT WILL GET BIGGER AND
BIGGER BY 2025.
THE 3% PUSHES YOU BELOW 2%.
AROUND 2.PAY THE, AND 1.PAY THE
BY 2020.
THEY HAVE NO OTHER CHOICE, YOU
HAVE THE TRADE WAR, YOU HAVE
TRADE WARS, NOT JUST TRADE
FRICTION.
IT WILL SLOW DOWN GROWTH.
LACK OF SPENDING, AND THE REST
OF THE WORLD IS WEAKER.
MARIA: THERE ARE MANY PEOPLE WHO
FEEL THE ROLL BACK REGULATIONS
WAS SO SIGNIFICANT BECAUSE UNDER
THE OBAMA ADMINISTRATION YOU HAD
A SCENARIO WHERE BUSINESSES WERE
SITTING ON CASH.
THIS ADMINISTRATION ROLLS BACK
REGULATION.
THAT'S WHY THEY BELIEVE THERE IS
A LONG RUNWAY, THAT IT WILL
CONTINUE TO IMPACT CORPORATE
AMERICA.
THEY WILL INCREASE CAP X BECAUSE
OF THE LACK OF THREAT OF NEW
REGULATION.
YOU DON'T BUY INTO THAT.
I BELIEVE REZIEWTION REGULATION
MIGHT HAVE ECONOMIC GROWTH IN
THE SHORT TIME.
THE CEO IS.
0.1 OVER A DECADE.
0.01 EVERY YEAR, THEN THE DRAG
AFTER 2020.
BUT THERE ARE OTHER TIMES OF
REGULATION THAT SLOW DOWN
GROWTH.
IMMIGRATION, NOT JUST ON
COUNTRIES FROM ARAB.
IT SLOWS COUNT POTENTIAL GROWTH
OF THE LABOR SUPPLY.
WE'LL START NOT JUST A TRADE WAR
WITH CHINA.
BUT INTO THE U.S. FROM CHINA AND
OTHER COUNTRIES.
WE'LL RESTRICT THE ABILITY OF
FIRMS TO INVEST ABROAD OR HIRE
ABROAD.
THE WHOLE MOTTO OF TRUMP IS HIRE
AMERICAN, BUY AMERICAN.
SO YOU WILL HAVE THE ALLOCATION
OF LABOR CAPITAL WILL BE WORSE.
THAT WILL SLOW DOWN GROWTH.
MARIA: YOU SAID INFLATION COULD
BE AN ISSUE.
WE HAVE THE PPI AND THE CPI IN
THE LAST TWO WEEKS PAINT WAS
NONEXISTENT.
>> WAGE GROWTH HAS STARTED TO
PICK UP FROM 3%.
THE INFLATION LAST WE ARE
BOTTOMED OUT AT 1.3%.
CLOSE TO THE FED.
WHERE FISCAL SOMETIME ST. LOUIS
WAS OVERHEATING OF THE ECONOMY.
YES THERE ARE SOME CHANGES IN
TRADE.
BUT THE POLICY OF TRADE
RESTRICTION, MIGRATIONW AND
OTHER -- MIGRATION AND OTHER
THINGS WILL LEAD TO HIGHER
PRICES.
I'M NOT SPEAKING ABOUT HIGH
INFLATION.
2.2, 2.3%.