The private sector seems to be concerned about
particularly the trade was with China.
That there are some rough waters ahead, maybe
a recession, that those odds have risen.
What do you see?
Well I'll tell you what, I sure don't see
a recession.
We had some blockbuster retail sales consumer
numbers towards the backend of last week.
Really blockbuster numbers, and in fact, despite
a lot of worries with the volatile stock market,
most economists on Wall Street towards the
end of the week had been marking up their
forecasts for the third and fourth quarter.
That echoes our view.
You know, what we've got here consumers are
working at higher wages, they are spending
at a rapid pace, they're actually saving while
they're also spending.
That's an ideal situation.
So I think the second half of the economy
is going to be very good in 2019.
No, I don't see a recession.
Let me have one theme, Chuck, just one theme.
We're doing pretty darn well, in my judgement.
Let's not be afraid of optimism.
Again, I think it's a pretty good story.
Again, let’s me echo my theme, let's not
be afraid of some optimism.
Okay you say that but, you know, you actually
said that in 2007 right before the second
worst downturn in American history.
This is what you wrote, "There's no recession
coming.”
This is in December of ’07.
“The pessimists were wrong.
It's not going to happen...
The Bush boom is alive and well.
It's finishing up its sixth consecutive year
with more to come."
The more to come was a massive downturn.
So, I admire your optimism, but the data is
pointing in another direction.
Well I plead guilty to that late 2007 forecast,
I plead guilty.
By the way, every other forecaster CPO, OMB,
Bluechip--
You weren't alone.
That's right.
They were all there.
However, just a wee bit of Kudlow defense
now, by February and March on CNBC in those
days I did go to the recession call.
I do plead that I did see it, I don't think
that anybody saw that kind of crash.
But look, this is not then, this is not then.
Our banks are well capitalized, our financial
system's in very good shape, and I must say
that the President is transforming and rebuilding
this economy, he deserves enormous credit,
a new policy of lower taxes and regulation
and energy opening and trade reform.
You know we didn't quite get to 3% but look
Chuck, the first two years of the Obama administration
we were just a hair below 3% that we're moving
in the same direction.
And let’s be honest here, we've faced severe
monetary tightening, seven rate hikes in 2017
and 2018, don't think all that was necessary,
it's a miracle we're able to continue as well
as we're doing.
This is Trump’s economic adviser Larry Kudlow
promising, just like he did in 2007 while
he was carrying water for the last Republican
president, that there’s totally, definitely
no recession coming.
And I feel like the safer bet here, while
we’re predicting things, is that Larry Kudlow
is not the person to turn to for insights
about the economy.
In reality, what this proves is that Kudlow
is just as much a reliable economic figure
as Kellyanne Conway is honest.
That he, on more than one occasion in his
desperation to defend Bush, swore up and down
that there was no recession on the horizon
in 2007, is a testament to the fact that his
partisan politics have ALWAYS outweighed whatever
tepid economic credentials he has.
And while Kudlow absolves himself of his partisan
hackery by claiming that every other forecaster
missed the economic crash, I should note that
there was ONE person who did see it coming—
Ultimately, Alan Greenspan constituency is
just the banks.
Keep those banks safe and that means, everything
is happy.
But you see, Chairman Greenspan does think
we can make the payments by and large.
He's been asked about this at recent appearances
and he's not that worried about household
debt or that it's too much or that we may
be getting in over our heads.
You know, I don't understand what Chairman
Greenspan is reading in terms of the data.
Let's talk about what's happened to families,
not in the long past, just in the year 2000.
Since the year 2000, credit card defaults,
that is people who are not even making the
minimum monthly payment, up 55%.
Home mortgage foreclosures, people who desperately
want to keep up the payment on that one asset,
because if you don't that means you're out
on the street, up 45%.
And bankruptcies, ultimate declaration of
financial death that I can't make it anymore,
up 33%.
What was the number one New Year’s resolution
this year?
What was it?
For the first time ever overtaken lose weight,
it was pay off some debt.
I've got too much debt, I'm in trouble, I'm
worried whether or not I can make some basic
payments.
Alan Greenspan, our national economic leader,
has stood up for the last four years and told
Americans, barrow against your house, if you
can't close the gap at the end of the month
just barrow against your house.
Now he never called it barrow against your
house, he said fancy things like, tap your
home equity, which sounds like some kind of
dance or, you know, some clever financial
thing to do.
But what it really was, is barrow more money
against your and bet your house that you could
continue to make all those payments.
Do all that just as a way to make it to the
end of the month, to put groceries on the
table, to make that house payment, to keep
the lights on.
That's really scary financial advice for someone
to be giving American families.
And, what frightens me, is that millions of
American families have taken that advise.
We're starting to watch the numbers grow of
people who are 65 and don't have their homes
paid off, people that are 55 and still owe
20, 25 years on their mortgages.
Or in 30 years, when you're just finishing
mortgages payments, fifteen years after you've
tried to retire.
Trying to manage mortgage payments the same
time you're trying to live on social security.
We've literally, as a country, mortgaged our
future.
The long term trends don't look good.
It’s almost like listening to someone who
cares about the economy more than fawning
over Republican presidents might be a better
source when it comes to identifying impending
recessions.
And if Warren correctly predicting the 2008
crash was any indication of that, then we
might want to heed her advice about the economy
now under the Trump administration—
Senator Elizabeth Warren out with a new warning
today.
She says an economic crash is coming.
She also claims that has a plan that could
prevent it.
In a new Medium post, the 2020 presidential
contender writes, “I warned about an economic
crash years before the 2008 crisis, but the
people in power wouldn’t listen.”
She goes on to add, “Now I’m seeing serious
warning signs in the economy again—and I’m
calling on regulators and Congress to act.”
The Massachusetts Democrat bases her predication
on a number of reasons, including growing
household debt and corporate debt, and what
she calls a manufacturing recession.
Warren also faults President Trump for chaos
in the form of the trade war with China as
well as his comments on Brexit.
And this is a recurring cycle in American
politics.
A Republican president inherits a strong economy
from a Democrat.
They pass massive tax cuts for the rich, deregulate
Wall Street, which implements predatory banking
practices that only serve to line their own
pockets, the economy crashes, and then a Democrat
takes over to clean up the mess.
It happened when Bush took over for Clinton
2001 and it’s happening now as Trump took
over for Obama in 2009.
And Kudlow DOES try to invoke Obama, likening
Obama’s GDP with Trump’s GDP.
He says that while Trump didn’t get to 3%,
that Obama didn’t either in the first two
years of his administration.
…Only, when Obama took office, we were mired
in the Bush recession.
Kudlow just got done saying how indestructibly
strong this economy is—so are we really
comparing Obama’s economy in the midst of
the second worst economic downturn in US history
to Trump’s economy, after 107 straight months
of growth (76 of which he inherited from Obama)?
The truth is that Obama hit not only hit 3%
quarterly GDP growth, but broke 4% of several
occasions, even breaking 5% quarterly GDP
growth in the second quarter of 2014.
Trump, meanwhile, has only broken 4% quarterly
GDP once.
As for annual GDP, Trump reached 2.9% in 2018,
which is the exact same GDP that Obama had
only 3 years ago in 2015.
And 2.9% wasn’t bad then and it’s not
bad now, but to claim, somehow, that Trump
is some self-described economic guru sent
from the Gods is clearly based on …nothing.
And look, Kudlow clearly sees some warning
signs, which is why he goes on to toe the
White House’s line of already blaming for
Fed for rate hikes.
And this has been stressed ad nauseum by Trump
so that if a recession does occur, he’ll
have already made it clear that it wasn’t
his fault.
Because say it with me now: nothing is his
fault.
So Trump and his mouthpieces can pretend that
everything is fine, but they’re only doing
a disservice to themselves by disregarding
major warning signs, and there are some big
ones, like an inverted yield curve and massive
drops in the Dow.
But in our experience, the greatest indicator
of all is Larry Kudlow saying—
Well I tell you what, I sure don’t see a
recession.
