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April 6, 2020 - Rudy Giuliani
24:57
Director of the US National Economic Council, Larry Kudlow: Economic OFFENSIVE Against COVID-19
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It's our purpose to bring to bear the principle of common sense and rational discussion to the issues of our day.
America was created at a time of great turmoil, tremendous disagreements, anger, hatred.
There was a book written in 1776 that guided much of the discipline of thinking that brought us to the discovery of our freedoms, of our God-given freedoms.
It was Thomas Paine's common sense Written in 1776, one of the first American bestsellers in which Thomas Paine explained by rational principles the reason why these small colonies felt the necessity to separate from the powerful Kingdom of England and the King of England.
He explained their inherent desire for liberty, freedom, freedom of religion, freedom of speech, And he explained it in ways that were understandable to the people, to all of the people.
A great deal of the reason for America's constant ability to self-improve is because we are able to reason, we're able to talk to each other, we're able to listen to each other, and we're able to analyze.
We are able to apply our God-given common sense.
So let's do it.
It is my great honor to have a good friend and a great American, Larry Kudlow, on.
We know that Larry is right at the core of guiding, shaping, and protecting our economy with President Trump.
Right before this happened, President Larry, his whole economic team, had this country conducting probably one of the best years it's ever had in its economy.
You could argue the best.
You know all the statistics.
And then all of a sudden this outside force attacks us, nothing to do with the internals of the economy, and the economy virtually has come to a halt.
So nobody better to ask than Larry Kudlow.
Larry, maybe just an open-ended question, how do you evaluate this as to what we're going to go through, and then how do we come out of it?
Well, they're good questions, Rudy.
Thanks for having me, by the way.
Thank you for doing it, Larry.
I know you're very busy, and you take very little of your time.
No, no, it's my pleasure.
You're very kind to do this.
Thank you.
All of your service down through the years, the least I can do.
So, your description is right.
We were off to a great start, and now comes this virus sort of dropping out of the sky.
No one expected anything like this, but it's happened.
All right?
So, had to deal with it.
You gotta have the health side works with the economic side.
They're not at loggerheads.
They're together.
The health specialists are doing what they're doing.
The mitigation is moving ahead.
And we're trying to bolster that as best we can, because we're going to have a big challenge.
Numbers out in the next few months are going to be very poor.
There's no question about that.
But here's the thought.
One of our goals in this assistance package, I mean, I believe it'll be signed and passed in the Senate today and the House forthwith, but this is the largest mainstream assistance package in the history of the country.
Main Street.
If you owned a business, let's say you owned a small business at the beginning of this year, things looked very rosy.
One of our goals, Hey, they did, by the way, Larry.
They look great.
They look great.
But I'm just saying, one of our goals is to make sure that when we get to, let's say July 1, you are still hanging on to your business.
We're trying to protect you.
We're trying to put liquidity in, cash in, loans in, loan guarantees in.
We're trying to protect your employees with direct rebates.
With unemployment insurance that equals wages when necessary.
With payment, if you have to be homesick or your spouse or your kids are home, we are trying to protect and bolster so that we have the business and the people that work in the business.
It's a total order.
It's not going to be perfect, but the involvement here is very substantial.
So the total package, it's really, About two trillion plus in direct assistance and another, hold on to your seat, Rudy, but it's another four trillion.
Wait, wait, wait, wait.
It's two trillion plus for direct assistance?
Yes.
Direct assistance.
Again, primarily to workers and the small businesses they work for.
It also includes, for example, income tax deferment.
For companies and employees.
So that means on April 15th, you know, April 15th effectively becomes what?
July 15th or something?
I think that's going to be the final date.
It could be stretched further, but that's about right.
And by the way, that's going to be interest and penalty free.
And by the way, that will include any tax liabilities.
If you're worried about back tax payments and stuff, you're going to get an extra Well, you may be way too rich to qualify.
I don't know.
We're doing that's very I mean I own several small businesses and that is
I that's enormously helpful by the way well you may be way too rich to qualify
I don't know well my small businesses I'll just think of them so I can analyze
it but I agree with you. I'd be happy to look at your income statement.
You and I have been too fortunate.
In all seriousness, it is an important step.
Because of these small businesses, I can understand the value of that, but go ahead.
In addition to that, we're going to have a moratorium on student loan payments, probably to the end of the year, both interest and principal.
I think that's going to be a big help.
On top of all of that, the Federal Reserve, which is doing good, they're moving in the right direction.
They got their target rates down.
They're buying up a lot of bonds.
They're increasing the money supply.
It's what we need now.
We need a lot of liquidity and a lot of cash in the system.
We sure do.
So working with the Treasury, the Fed is going to have programs that basically cover the entire economy.
I'll just give you, for example, the Fed is going to backstop with loans which will be guaranteed by the Treasury, that is the federal government.
Student loans, car loans, credit card loans, small business loans, money market funds, commercial paper, money, I said money market, various small businesses.
That'll be buying corporate bonds.
I mean, just to give you the scope of the assistance that the central bank is providing.
And we will do this in a transparent way.
There will be a board overseeing this, as there was 10 years ago.
And some large industries will qualify for these assistance packages.
Look, you can't have an economy without the airlines.
Yeah, you know, the idea is small business, large business, it's the worker that we're thinking about, and the large businesses have a lot of the workers.
That's a good way to put it.
Look, you can't have a job unless you have a business to work in.
So it's not one or the other, it's both.
And that's the way we've structured this whole thing, and that's why I call it Main Street.
So you call the $2 trillion package Main Street?
I do.
I call it Main Street.
It's helping small and medium businesses, and it's helping middle-income people, Rudy.
Those are the biggest recipients of all this direct assistance, direct payments, checks, tax moratoriums, student loan moratoriums.
There's a payroll holiday for small businesses that will probably last until the end of the year.
A lot of different aspects.
How did you come up with this so quickly?
Had you been thinking about this before, a month ago, two months ago?
I would say it came together three weeks ago, and then working with the Senate Republicans in earnest this past week, Steve Mnuchin and I, every day.
Yeah, I see you guys getting interviewed.
You tell Steve he's doing a great job, too.
I mean, I'm director of the National Economic Council.
We're the policy advisors.
The Treasury is the one with the direct operating responsibility for this.
Yeah, but the two of you are working together so well.
That helps, too.
We work well.
And I'll say Jay Powell, the Fed.
I've got to include him.
He's worked very well with this, too.
You've got your direct assistance, $2 trillion, and you've got $4 trillion in Fed lending authority.
Now, tell me about the $4 trillion.
Well, that's what I was describing.
They're standing behind, they're providing liquidity for, again, money markets, corporate bonds, commercial paper, student loans, car loans, credit card loans, small business loans, Rudy.
It's a huge Doctor, if you take the Fed's $4 trillion and you take the Congressional Bill's $2 trillion, it's a $6 trillion package which is roughly 30% of GDP.
30% of the entire economy will be covered.
Oh my goodness.
It's really quite remarkable.
So just, we don't have too much more time, but just tell me a little about the $4 trillion package.
Are these going to be loans or guarantees?
They'll be principally loan guarantees.
The Treasury, across the board, as I said, credit cards, cars, students.
It'll be engaged in the assistance programs for airlines and other distressed industries.
Some of that stuff, Rudy, is aimed at the financial markets.
They're all clogged up.
There's a shortage of dollars.
No, I know that.
You can see that every day.
Well, the banks are in good shape, by the way.
That was never the problem.
The banks are in good shape.
But some of the trading has been very sloppy.
So no, I know that.
You can see that every day.
So how do people apply?
How do people access this $4 trillion?
We have a number of ways.
You can do it online, you can do it through phone calls.
The Fed is in daily contact with the investment market, so is the Treasury Department.
Applications are easy.
So much of this will be done online.
That's probably the simplest way.
A lot of it will be done through the commercial banks, whose assistance will be guaranteed by the federal government.
So if you're a small business person, you've got a relationship, hopefully you've got a deposit, some kind of lending relationship.
Go right to the bank.
Your bank can help you through this because it helps them too, right?
Yes, absolutely.
So we can get through this period.
Another four to eight weeks, what the experts are telling us.
Four to eight weeks, based on the patterns overseas and Korea.
Four to eight weeks and we can kind of get back to work in some form of normalcy?
That's what we're aiming for.
We're going to do it, you know, we're carefully mapping out.
We have to do this with all the health authorities.
We have to do this through massive testing, which is now finally getting underway.
You've got treatments and medicines on the way.
We're not going to rush into this.
We've got to do it with the help of the governors who have done very well.
Gavin Newsom in California, Andrew Cuomo, others, Ron DeSantis in Florida.
Governors are very, very well.
I'm very impressed with Cuomo and Newsom because of overcoming the partisan thing that apparently some of the, you know, Pelosi and a couple of other characters haven't been able to do yet.
I hope they accomplish that, you know, today.
Well, so do I. America comes first, and there's not even any excuse for this, but that's another story.
Larry, what do you think the outcome will be in terms of our economy?
I mean, here we were.
There's nothing about this that suggests any weakness in the fundamentals of our economy.
That's correct.
Nothing.
That's correct.
Now, it is going to do damage, obviously, to some of the fundamentals, and not to others.
So how do you model coming out of this?
Well, look, you know, we're just trying to help people and their business get through this next, let's say, couple of months prayerfully, Rudy, prayerfully.
That would be the worst of it.
That would be the worst of it.
That's what the experts are suggesting.
And then, frankly, if we are so blessed, we should have a very strong rebound in the second half of the year.
I, okay, God, I pray for that, you know, and I'm not praying for it, you know, because of money.
I'm praying for it because of all our people that are suffering.
And Larry, they need to hear that hope.
I mean, they need to hear that when we come out of this, we're going to be stronger and bigger and better.
We're going to have, when you get knocked down like this and you basically come up at, you know, on the nine count, And you fight back.
That's when you're a real champ.
That's it.
That's it.
We did it 9-11.
We did it 9-11.
We did it after 2008.
Yep.
This country only knows how great it is when it's challenged.
You know that.
I do.
And the president lives that.
He lives that.
It's in his blood.
It's important.
We're very lucky to have him.
He's very lucky to have you and Steve.
And I think anybody who thought this was a weak administration.
Ha!
You are dealing with a package that in a certain way matches, you know, the Great Depression.
You're dealing with a package that has the kind of impact, you know, it's a much different economy than Roosevelt's first, what was the first hundred days, right?
You know, from day one, the President said that we will use whatever federal powers we have.
We will do what it takes.
And that's still the attitude.
How much of the loans will be forgiven and repaid, and what impact does that have ultimately on the national debt and things that some of the more conservative Republicans worry about?
Oh, I wouldn't.
To be honest with you, I mean, some of this will be repaid.
Some of it will not.
Yes, right.
I'll be honest with you.
Think of it this way.
If the federal government, and I'm a fiscal conservative, you're a fiscal conservative, but if the federal government, in an emergency like this, to protect its citizens, both the health and welfare and economy of its citizens, if you have to go into the marketplace and borrow at 30 or 40 basis points, Rudy, that's three or four tenths of one percent, that's how low rates are, in order to invest, In the future of our country and its health and its economic well-being.
That's a business decision.
Larry, from the first moment you guys started talking about this package, it made all the sense in the world to me.
Can I ask you one other question?
Because my good friend and your good friend, John Castamatidis, brought this up yesterday.
And I think he called for sort of a holiday for Wall Street, for the stock exchange, for a week or two.
I don't remember if you had a week or two weeks, because a lot of what they're doing seems so emotional and sporadic.
What do you think of that?
We're not keen on it.
The president's not really keen on it.
I didn't think so, but I wanted to ask.
I sort of look at it as, we've got to take our lumps.
And look, everybody knows the minute you get good news, Wall Street's going to go the other way.
Yeah, I mean, look, market price discovery is difficult in times like this, but look, We've seen this in the last 10, 15, 20 years.
I saw it in 1987, we saw it in 2008.
What goes down can come up fast.
And you just got to keep that in mind.
And I still believe, some people criticize me for this minutiae.
People should invest.
First of all, people should invest in the long run.
Second of all, on that basis, a long run investment for your IRA or 401k or whatever.
Look, this is a buying opportunity.
I don't want to, you know, tout that.
I'm not a timing guy.
I'm not trying to give people stock advice.
I'm just saying, if you're a long term investor, this provides opportunities.
I mean, look, companies were doing great in the beginning of the year.
The fact that the virus cuts in doesn't mean they're not great companies.
And in fact, as you know, at the beginning of this, the economy was doing great at the end of the year.
And the fact of the matter is, because of the virus, that doesn't mean the economy cannot recover and then some.
Yeah, well, the economy doesn't have a virus.
People do.
And the economy is healthy.
I mean, a lot of our other crises have come from the economy having a virus, the economy having an illness.
Here, the economy was doing fine.
It had normal problems, but nothing substantial.
So I, you know, I hope I'm not being overly optimistic.
But I also think when we overcome this, There'll be a great feeling of confidence in us.
One of the things that happens, as you know, when you're in a crisis, having lived through Nile virus, 9-11, anthrax, there's a feeling of confidence when you conquer it.
That will have a big impact on the market.
I mean, we're going to feel like, you know, supermen when we come out of this.
And in many respects, the men and women will be supermen for coming out of this.
This has been a great challenge, and I'll leave you with one thought.
One of the few things I can do, aside from these interviews, is I get in a car, try to stay isolated, and I drive around and I take pictures of New York.
Empty.
I'm sort of an amateur photographer.
The people are complying, Larry.
They're taking this seriously.
We may have a few exceptions, but I can't believe how obedient the people of New York have been.
So when they come out of this, they're going to be very, very, they're going to be a sense of confidence about how strong we are.
The President is producing that.
You tell him that, right?
That's great.
I sure will.
The President's been a great leader here.
We're moving through this a day at a time, you know, just day at a time.
Doing everything we can.
Everything we can.
And what is Judy doing?
My Judy is trying hard to paint.
Which is what she does for a living.
She's a great artist.
You tell her we had a wonderful time at the dinner.
I just love seeing her.
I've known her for so long.
I just look forward to coming down to Washington.
We go to dinner someplace, huh?
Instead of eating, I go to the Italian deli and get my food.
We can have dinner at home or at a restaurant.
We look forward to it.
We look forward to it.
Thank you.
Country's lucky to have you, my friend.
Rudy, you're the best.
Thank you.
Appreciate it.
All right.
Take care.
Bye-bye.
Well, that was an excellent description of where we are by a man who is truly one of the most knowledgeable on our economy that I've ever met or known.
And as I said, very lucky to have him.
But I do truly believe that Americans have to retain the fact that this was an external attack on our economy.
It had nothing to do with any internal strengths or weaknesses of the economy.
Think of it as Your baseball team, my team the Yankees, can't play baseball because of the attack on the stadium and what would happen.
But it's the same baseball team.
They got Judge in the middle and they got Sanchez catching and they got the great pitcher Garrett Cole that they picked.
They're all there.
They're all sitting there ready to go.
There's been no attack on them.
The same thing is true here.
Our economy was functioning well.
When this is over, there will be some casualties in the economy.
We can't say there won't be some permanent damage to it.
There'll also be some gainers in the economy, pharmaceutical industries, service industries, people who actually will legitimately make money during this crisis.
And then we'll emerge with a fundamentally sound economy, And I believe with a great spirit of accomplishment and a great spirit of what it means to be an American, here we have overcome another worldwide disaster imposed on us.
I saw this on September 11.
I predicted a much bigger long-term impact on our economy.
Not only did I, but everybody else did.
It's functioning.
It's the strongest in the world.
And we will have turned out to be people who can be very disciplined because that's how
we got through it.
I saw this on September 11.
I predicted a much bigger long-term impact on our economy.
Not only did I, but everybody else did.
We didn't factor in the tremendous sense of self-confidence that America's being able
to handle that kind of terrorist attack gave the American people.
Well can you imagine the sense of confidence we're going to have when we come through this
with a leader like we have who knows how to harness it?
So please, take advantage of these programs.
They're ingenious.
They're intended to get you through, to get you to the finish line, because the finish line, you're going to be very, very strong once we get there.
So get to know these programs, get to use them.
Realize that this is as big a thing done for the poor and the middle class than Franklin Roosevelt ever did.
So when people tell you that Donald Trump doesn't care about poor people or Republicans don't care about poor people, stop it.
He's done more for poor people than anyone.
We all care about poor people.
It doesn't distinguish us from Democrats.
This is not a political moment.
We should all join in.
And then afterwards, we can argue about what do you like better, capitalism, social, all that stuff.
Right now, let's save our people.
And Larry Kudlow has got his eye on the ball and the president more than anyone else.
And we will keep our eye on the ball for you so that we give you very, very straight analysis of what's going on during this coronavirus attack on America.
This is a war.
This is a war that's Being engaged by this virus, which is almost like a little army, you've heard my—a big army!
You've heard my comparisons to that.
And our army is made up of some of the best, most intelligent, most disciplined people in the history of the world.
And they're going to win.
We're going to win.
And we're going to come out of it much stronger than we ever were.
We've got to go through this little period now.
We've got to show our discipline, we've got to show our courage and strength, but we'll be rewarded for it by the grace of God.
Thank you very much, and we will be back, you know, pretty soon, to be talking about this in great length so you can understand it and you can get through it.
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