I THINK IT WILL STAY.
THE REASON IT TOO FAST BECAUSE
THEY THINK THE ECONOMY IS SO
GOOD.
>> JOINING ME NOW IS CHIEF
ECONOMIST AT THE MILKEN
INSTITUTE, BILL.
THANK YOU FOR COMING IN.
LET'S START WITH THE MARKET.
WE'VE NEVER HAD A POINT GAIN
LIKE THIS BEFORE IN THE HISTORY.
WHAT YOU MAKE OF IT?
>> WE CAN CALL OF THE --
RECOVERY.
IT'S SAFE AND WE DON'T HAVE TO
WORRY ABOUT A CHANGE IN THE FED
SHARE.
SUDDENLY THE MARKETS TURNED
AROUND.
DESPITE THE FACT THAT IT
COMPLETELY FLOODED
COMPLETELY FLOODSD
COMPLETELY FLOODS THE MESSAGING.
HE COMMUNICATED TO THE MARKETS
THAT WE ARE READY TO PAUSE.
THE ECONOMY MAY SLOW AND WERE
GOING TO BE CAUTIOUS.
HE SAID WERE ON AUTOPILOT.
>> WHAT DIDN'T SCARE THE MARKET
WAS INCREDIBLE RETAIL FIGURES.
THEY WERE VERY GOOD.
I'M WONDERING TO WHAT EXTENT HAS
THE MARKET BEEN UNDERPLAYING THE
EFFECT OF THE GENERAL ECONOMY.
>> IT'S VERY SOUND.
WERE EXPECTING ABOVE TREND
GROWTH IN THE U.S. ECONOMY.
IS FUELED BY THE LABOR MARKETS
THE JOB GROWTH IS SPECTACULAR.
IT'S GIVING CONSUMERS CONFIDENCE
AND THEY ARE DECREASING THEIR
SAVINGS RATE WHICH IS NOT
SUSTAINABLE.
WERE LOOKING FOR TAX CUTS TO
KICK IN AND BOOST PRODUCTIVITY.
THAT HAS TO COME INTO PLAY.
WHAT'S UNCERTAIN IS WHETHER THE
SPAT WITH CHINA'S CAUSING FIRMS
CUT BACK ON THEIR INVESTMENTS.
>> DAVID: WHAT BOTHERS ME IS
WHEN WE CONTINUE TO HEAR THAT
THEY ALL WENT TO STOCK BUYBACKS.
WHEN YOU HIRE A WORKER YOU HAVE
TO SPEND AN AVERAGE OF 10,000
DOLLARS.
THAT IS AN INVESTMENT IN HUMAN
CAPITAL.
AN INVESTMENT MADE MILLIONS OF
TIMES SINCE THE TAX CUTS AND
THAT'S WHY WE HAVE MORE JOBS AND
JOB SEEKERS.
>> LET'S NOT FORGET, EVERYONE
SAYS IT STOPS BUYBACKS BUT THAT
DOESN'T MEAN THE MONEY
DISAPPEARS.
THE SHAREHOLDERS ARE SAYING IF
THEY CANNOT USE MY MONEY I'M
GOING TO PUT IT TO WORK IN OTHER
COMPANIES.
IT DOES TRICKLE BACK.
IT TAKES LONGER.
THE MARKETS ARE IN TURMOIL SO
ALLOCATING THESE FUNDS BECOMES
MORE DIFFICULT.
IT DOES NOT MEAN MONEY
DISAPPEARS.
>> THE PRESIDENT WHEN HE SAID
IT, I GUESS IT WAS TWO MONTHS
AGO WHEN HE POINTED OUT THE FED
WAS MOVING TOO FAST ON HIKING
INTEREST RATES LOT OF PEOPLE SAY
COME ON, THIS IS UNSEEMLY TO
HAVE A PRESIDENT ATTACKING THE
FED.
BUT IN FACT DIDN'T LOOK LIKE
TRUMP WAS RIGHT.
>> EVERY PRESIDENT GONE BACK TO
LYNDON JOHNSON HAS HAD A PROBLEM
WITH THE FEDS.
NO PRESIDENT LIKES THE FACT THAT
HE'S DOING THIS IN AN
INDEPENDENT WAY.
TRUMP IS JUST GOING BACK TO
REMIND THE FEDS THAT WE HAVE TO
LOOK AT THE ECONOMY WITHOUT
BEING ON AUTOPILOT.
THE MARKETS WERE SPOOKED THEY
HAVE BEEN DOING EXTRAORDINARY
THINGS.
MONEY HAS BEEN AT ZERO INTEREST
RATES FOR WAY TOO LONG.
THE FED IS ALSO TOLD LISTS WERE
DOING IT SLOWLY.
TRUMP SAYS WE HAVE TO DO IT
SLOWLY BECAUSE WE DON'T WANT TO
JEOPARDIZE RECOVERY.
>> IT'S NOT JUST THE STOCK
MARKET.
THERE'S A WORLDWIDE ECONOMIC
SLOWDOWN.
IN EUROPE IS PARTLY BECAUSE OF
THEIR POLICIES IN CHINA IT'S
LARGELY BECAUSE OF WHAT WE HAVE
BEEN DOING TO GET THEM IN ORDER.
IT WOULDN'T TAKE THAT MUCH FOR
WHAT'S HAPPENING IN THE WORLD TO
AFFECT US TO THE POINT WHERE WE
HAVE A SERIOUS SLOWDOWN.
>> THE U.S. IS THE ONLY BRIGHT
LIGHT IN THE GLOBAL ECONOMY IN
TERMS OF GROWTH.
EVERYONE ELSE IS STRIP
STAGGERING UNDER WHAT SOCIALISM
AND HIGH GOVERNMENT SPENDING
BRINGS ABOUT.
CHINA IS FEELING THE EFFECTS OF
THE TARIFFS MORE THAN WE
THOUGHT.
THE PRIVATE SECTOR IS IN DANGER
OF SLOWING DOWN.
THEY'RE PUTTING IN PLACE OF
FISCAL POLICIES.
>> DAVID: THERE IS AN ARTICLE IN
THE NEW YORK TIMES LAST WEEK
SUGGESTING THERE ARE PEOPLE IN
THE PRIVATE SECTOR IN CHINA AS
INTRUSIVE AS THE COMMUNIST
GOVERNMENT IS, THERE ARE PRIVATE
ENTERPRISES AND THEY LIKE WHAT
DONALD TRUMP IS DOING BECAUSE IT
GIVES THEM MORE LEVERAGE TO WORK
AGAINST THE HARD-CORE COMMUNISTS
TO ENCOURAGE MORE OPENING IN THE
ECONOMY.
DO YOU AGREE WITH THAT?
DO YOU THINK TRUMP IS ON THE
RIGHT SIDE OF THE ISSUE?
>> TRUMP IS HELPING THE PRIVATE
SECTOR OF THE CHINESE ECONOMY
BECOME MORE INDEPENDENT.
THEY'VE BEEN KNOWN TO BE HUGE
BEHEMOTHS.
WE NEED TO PRESERVE INTELLECTUAL
PROPERTY RIGHTS.
THERE'S A LOT OF DEVELOPMENT OF
NEW PATENTS IN CHINA.
THEY WANT THEIR RIGHTS
PROTECTED.
WE WANT MARKET ACCESS, WE BOTH
WANT TO PROTECT INTELLECTUAL
PROPERTY WERE STARTING ON THAT
TRACK BECAUSE THE CHINESE HAD
LOVE LEGISLATION THAT SAYS
INTELLECTUAL PROPERTY THEFT IS
ILLEGAL.
THE CHINESE ARE FAMOUS OF
PUTTING IN LAWS THAT ARE NOT
ENFORCED.