Larry Kudlow CNBC Interview: The “Growthier” Story [FULL TRANSCRIPT]

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The following is the unofficial transcript of a FIRST ON CNBC interview with National Economic Council Director Larry Kudlow on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) today, Friday, September 7th.

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The following is the unofficial transcript of a FIRST ON CNBC interview with National Economic Council Director Larry Kudlow on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) today, Friday, September 7th. The following is a link to video of the full interview on

CNBC's full interview with NEC Director Larry Kudlow


Carl Quintanilla: as we mentioned earlier, back to today’s key economic data. The labor department says 201,000 jobs were added in august. Wage growth a new cycle high going back nine years. Unemployment at 18-year low. Joining us this morning with the first reaction from the white house is national economic council director Larry Kudlow. Good morning, Larry. Good to have you back.

Larry kudlow: good morning! Thank you, Carl. I appreciate it.

Quintanilla: are wages the headline to you?

Kudlow: wages and this number were very good. What have we got, 2.9% year on year, plus 0.4. Yeah, I like that a lot. I also liked 201,000 non foreign payrolls because of the skewed seasonal adjustments. Some people thought that number was going to be 50,000 lower, but it wasn’t! And it shows the strength of the economy. On wages, Carl, can I just add something, you know, my pal Kevin Hassett of the CEA, he just put out a great report when you -- after tax, after inflation, after bonuses, after benefits, actually, what we might call real wages are rising 1.4% year on year. That’s a big number. And let me add one other point here from the employment report today. Average hourly earnings, times hours worked, okay, it’s a proxy for wage income, is 5%. And if you just take out, let’s say 2% inflation, that’s plus 3. And I hate to throw all these numbers at you, but real disposable income, which I’ll just call paychecks—fatter paychecks plus 3%, the economic boom continues. It’s the big story of 2018. Jobs, growth, wages. Doesn’t get much better than that.

Jim Cramer: Larry! Jim. How are you?

Kudlow: good, jimmy. How are you, buddy?

Cramer: I’m good. Let’s talk tariffs and trade. We keep hearing and I know you were very close on Europe and getting rid of tariffs. We had good news from Mexico. Hopeful for good news from Canada. But, Larry, and I know you’ll love this. I speak to so many CEOs, as you know, I’m hearing CEOs who are saying, “you know, we don’t need to manufacture things in china we think that china is going to cave anyway.” where are we with the trading partners after an incredibly strong job number?

Kudlow: you referring to china, jimmy?

Cramer: all of them. But china I keep hearing CEOs, Larry, saying, “you know what, our president really making it so we can move out of china. We don’t need to manufacture in china. And that’s going to cause china to come to the table and do what we want.”

Kudlow: well, look, I wouldn’t put it quite so definitively. We are still talking with china on a number of issues, as you know. Those talks will continue to go on. We want lower barriers across the board. You know, zero tariffs, zero non-tariff barriers, zero subsidizes, stop the IP theft, stop the technology transfer, allow Americans own their own companies. Those have been our asks for many months, and so far those asks haven’t been satisfied. However, hope springs eternal, and discussions continue. We had a small contingent from china here, what, two weeks ago or so. So we’ll see. We’ll see. This isn’t -- look, our view, the president’s view is not to destroy the Chinese economy. We’re not trying to put him out of business. We’re trying to get them to join the international trading nations world. And be a citizen. And abide by the rules for the first time in some 20 odd years. And if they lower their barriers, and leave us to our technology innovation, you’ll see a ton of the American exports, which will shrink the trade deficit. That’s the point. Lower barriers, open markets, quit stealing ip and technology. These things are not hard. So we’re waiting to see if china will just say, yes. Remember Nancy Reagan, jimmy?

Cramer: sure.

Kudlow: she said “just say no to drugs,” and she was right about that. How about china? Once in awhile, just say yes to one of our asks so we can move the process forward.

Cramer: I love that. David?

David Faber: yeah. Thanks, Larry. It’s David. Structure reforms tougher. Back to Europe though on trade, Larry. Now these reports they were willing to get rid of all tariffs, was that true? And if it’s true, why wouldn’t we take that deal?

Kudlow: well, we might. I mean, look president Juncker, president trump when they met here had their bilateral, maybe a month ago or so, they talked about abolishing tariffs and non tariff barriers and so forth. And we will be continuing those negotiations. Ambassador Lighthizer is going to Brussels this coming week to meet with Cecilia Malmström. We’ll probably -- I’ll probably see them at the united nations meetings in a couple of weeks. We’re very optimistic there are a number of transaction actions on the board. Things like soybeans, things like lng, things like beef, perhaps things like military sales. There’s a lot of things on the board and I’d say the relationship is growing between the U.S. And the EU. And I look the goodwill. I really like the goodwill. I talked to my counter part. Bob Lighthizer talks to his. Perhaps president trump will talk to Juncker again at the U.N. In New York. It’s moving steadily. It’s an early process, and color me mildly optimistic about that.

Quintanilla: all right, Larry, today the journal tries to talk about whether or not there’s the possibility of confronting china with -- as you’ve said in the past, a united front. Get the NAFTA deal done, bring in the EU, maybe even bring in japan, they argue, and then deal with china as a group? Is that possible?

Kudlow: yes. I mean, you know, we’ve – you and I have talked through the month and months and months. Let’s see, a trade coalition of the willing, EU would rather do business with the u.S. Than it would with china. I think the same is true with japan. I think the same is true with Mexico. We’re moving forward with that. It’s a diplomatic issue but we like it. I think the Chinese, you know, may find themselves more isolated if they don’t come into the global process. And if they don’t provide new information. And begin to say yes to the asks of president trump. President trump continues to speak well about president xi. But they’ve got to show some action. I’m not in a mood to bash anybody today, I’m happy camper with all of these great numbers. By the way, can I just say – did I forget to say this? -- the biggest story in 2018, the biggest story in 2018 is an economic boom that virtually no one thought possible. Let’s see, the Atlanta Fed, GDP now is predicting, let’s see, 4.4, 4.5, 4.6 for the third quarter, after 4.2. The first half was 3.1. As we discussed, the wages are rising very, very well. This is great stuff and it’s widespread. I don’t know if you saw, ism manufacturing, boom. Ism services, boom. There’s no let up to this. Consumer spending, they’re probably emerging into a capital goods boom right. Now, really this is Kudlow supply side, low tax rates, expensing, repatriation, lower marginal tax rates for individuals and so forth. This is the takeoff in our view, 3% plus growth, it may be 4% plus growth, that’s the big story in 2018. Sorry, it’s so hot here, I can’t hardly talk. That’s the big story in 2018. All this other stuff is side ramp stuff.

Cramer: Larry. Alright. That was Kudlow, this is Cramer. Larry, you know I know stocks. Their – china, their stock market is down 18%. Our s&p is up 7%. Our NASDAQ is up 14%. We are strong enough to take it to them. When are you going to just say, “listen, we are going to make them say yes instead of just being hopeful, it’s our turn”?

Kudlow: Jim, you know, in my old age, I’m becoming more diplomatic.

Cramer: oh, okay. Now you got the edge on me.

Kudlow: -- you and I are both growth guys, you and I are both stock market wealth guys, you and I want to help every single investor around the world, I think that’s still fair for both of us. China has, I think, taken some missteps and I don’t think they have joined the conversation with the kind of intensity I would like. All I’ll say is we’re continuing to talk, and things can get better. But yes, what are these stock markets telling you? China is moving lower in their economy. The U.S. Is moving higher, we’re the hottest place in the world. Investment is pouring into the u.S. The weakness in the Chinese currency is a function of people withdrawing their investment. The steadiness and the strength of the dollar is a function of a coming investment here, all right? That tells you something, you’re quite right, markets don’t lie. They’re giving you the directional signals. I want this to be win-win. But right now, all I can say is, new policies from the trump administration on taxes and regulation and business success, and rewarding entrepreneurship, new policies are working. All right? It may be the greatest story never told. It may also be a "growthier" story, mind you, jimmy, growthier, we’re still moving, more growth, I call it growthier, it’s a Kudlow word, but it’s already been printed in the "Washington post." feel free to use it. Growthier. I think that’s the story.

Quintanilla: and one final note, Larry, I mean in a week when people are talking about whether or not Gary Cohen stole a piece of paper off the president’s desk, have you done anything to try to work against the president’s impulses, at least on trade?

Kudlow: are you kidding? I’ve spent -- including the campaign, I have spent the better part of 2 and a half years, almost three years, promoting, developing his pro-growth policies. I have devoted myself to it. I have worked with him. I am honored to be in this position to help him. And others of our team on a day-to-day basis. We may have our discussions regarding trade and other matters, what’s the best most efficacious way to generate the kind of economic growth policies and solve the world trading balances. You know, the trading system is broken, and we’ve got to solve it. Would I work against him? That’s just crazy. I saw a couple of publications say that I and some others here are responsible for that crazy editorial. That is just nuts. Nuts. Of course I have nothing to do with this. I have been working my tail off for six months. And he’s on the right track. You know, instead of these egotistical personalized vendettas against the president who himself is a patriotic American, instead of that – why don’t we try to help him in his effort and crusade to make America stronger at home, to make America stronger abroad, to take reforms internationally on trade and elsewhere, that will help everybody around the world for world peace and security. Why don’t people try to help him instead of harm him? You know? Or why don’t they come out of the wood work and at least display some honesty and be quoted on the record so we could engage them in a decent discussion? I don’t do personalities. You guys know that. If there’s a disagreement, then come out of the wood work, put yourself on the record and let’s talk. Right now they’re taking pot shots at a president who in my opinion, I mean, nothing’s perfect in the world, including me. But in my view, in less than two years, he has changed our whole economic story, he’s changed our whole international security story, he’s draining the swamp and he’s taking measures that Americans love to see. And by the by, although I’m not a political guy, may have a bigger impact come November than you all think. So, no, I didn’t write anything, I don’t know about these stories, I don’t know anything about that. I go to work every day and, Jimmy and Carl, let me -- you know, I have said this to you before, these are long held Kudlow views, we’re operating pro-growth models, free and fair trade models, I have put my heart and soul into this for how many -- I think I’m coming on to four decades. I come down here every four or five years to try to put it back together. It is my honor -- I’m going to say this, OK? -- it is my honor to serve president trump on a daily basis to make this story better. And I’ll say it again, folks, all right? 2018, these other stories are not the big deal, the big story in 2018 is an economic boom that most people thought impossible, but it is happening before our eyes,this argument has the added benefit of being factually true and it’s going stronger, the data show is not letting up, it’s not one time, it’s going stronger. That’s the key point. America’s going to be stronger, more optimistic and a happier country. And I hope the rest of the world takes note of what we’re doing, because they could learn something from what we’re doing.

Quintanilla: Larry, thank you for answering that question, we will see you next time.

Kudlow: thank you. Appreciate it.

Quintanilla: Larry Kudlow, director of national economic council.

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