White House economic adviser Larry Kudlow says the biggest missed story of 2018 is the roaring economy.
BARTIROMO: Larry Kudlow is with me, the director of the National Economic Council and assistant to the president for economic policy. He joins me now in an exclusive interview.
Larry, it's always a pleasure to see you. Thank you so much for being here.
LARRY KUDLOW, DIRECTOR, NATIONAL ECONOMIC COUNCIL: Thanks, Maria. Appreciate it, as always.
BARTIROMO: Very -- very good numbers, you know, wages up 3.1 percent.
But, of course, the markets have been very volatile and nervous that the good times are not sustainable, that a slowdown is on the horizon. Are you worried about a slowdown on the horizon?
KUDLOW: I'm not worried.
I mean, I hear all of this stuff about a sugar high and temporary and not sustainable. I mean, for one thing, that 250,000 in employment, which was, you know, a blockbuster, I remember telling -- I told the president about it Thursday evening. He said, whoa, whoa. And Kevin Hassett and I were really surprised.
Look, you got 3.1 percent rise in wages. You got 250,000. We're running solidly. You know who the biggest beneficiaries are, Maria? Blue-collar workers. Take a look at the numbers. The employment increase is largely centered on blue-collar workers. They're the big winners, fastest since the '80s.
And they are the ones experiencing the largest wage gains. Blue-collar workers are beating white-collar workers.
KUDLOW: I have nothing against white-collar workers. I'm just saying, this is a very -- depth -- it's reaching down deep into the blue-collar area.
That is precisely what we wanted with our supply-side tax cuts across-the-board and in deregulation, the president's program. It is working, including energy.
BARTIROMO: Yes, but you just heard -- you just heard Democratic Congressman Tim Ryan from Ohio on this program, right?
And he said 83 percent of the tax cut plan went to the top 1 percent. What's your answer to that? I pushed back on it, but what do you say to that?
KUDLOW: Well, I don't know where -- I don't know where Mr. Ryan gets that number.
I have respect for him. He is rather a more moderate Democrat. But those kinds of nitpicking and ankle-biting, I don't know where that thing comes from.
You know, when we put this program in place, when President Trump ran on this in 2016, Kevin Hassett and I and Laffer and so fourth worked on it.
We believed that the tax cuts for corporations, large and small, the marginal tax rate reductions, OK, now down 21 percent for companies, large companies...
KUDLOW: Now, it's 19 percent for small companies.
The biggest beneficiary would be ordinary working folks, the blue-collars. And that is precisely what the data is showing.
BARTIROMO: Larry, let me ask you this.
KUDLOW: So, I don't know where Mr. Ryan and others are getting this.
BARTIROMO: Congressman Kevin Brady, the chairman of House Ways and Means, joined me last week.
And he said he's now working on an additional tax cut, that the president wants to cut taxes for the middle class by 10 percent and make the individual cuts permanent.
If the economy is going so great, why do you have to cut taxes again?
KUDLOW: Well, look, I think the -- permanent for the personal taxes, which would include small business, is very important. And I think Kevin Brady is exactly right.
We are noodling about an additional 10 percent middle-class tax cut, just noodling, looking at different plans.
BARTIROMO: Yes. OK.
KUDLOW: We will see.
But, look, the great story of 2018, you said it, I think, in the break.
KUDLOW: It's the economy, stupid.
We are growing, you know, 3.5 percent in Q3, 4.2 percent in Q2, 3 percent overall. My friends on the other side of the aisle said you couldn't beat 2. We're now beating 3.
KUDLOW: This is the biggest single story of 2018. And it's not going away.
BARTIROMO: Another big story -- but another big story is how China has been behaving, right?
They have been stealing from us for decades. And now there's a report that -- Larry, that says -- it's a report that says that now China is considering buying oil from the United States vs. Iran as part of a larger trade deal with the United States that the president will discuss at the G20 with President Xi.
Has this been discussed, China buying oil from the U.S.?
KUDLOW: Well, I can't speak on the specifics quite yet, OK? Can't go there.
But, look, on the China deal, I think there's been some misunderstanding here. First of all, President Trump and President Xi had a positive phone call. That's a good thing OK?
Second of all, it is now certain that the two presidents will discuss trade at the G20 meeting in Argentina. That's a good, positive, optimistic thing.
Now, look, I spoke to President Trump yesterday. OK? We had a long talk about the China position. He believes that China's weakening economy -- by the way, their PMI is down to 50, so that shows they're on the cusp here of a recession.
Anyway, President Trump believes China would like a trade deal. And President Trump is the first president in decades to push the -- push this issue. We're not going to let them get away with unfair and illegal trading practices.
Now, having said that, President Trump told me he would make a deal with China, OK? But it has to be a deal that is strong and in America's interests. That's his key point.
We will work it out.
KUDLOW: We have asked them, Maria, about technologies transfer, stealing, about intellectual property right stealing, about ownership problems, about high tariffs on agriculture and industrial goods.
KUDLOW: They cannot steal our technology. That doesn't work for us.
KUDLOW: Now, if we -- if they respond to our asks, then the president will consider making a deal, as long as it's in America's interests.
KUDLOW: He was very clear in my talk with him yesterday. But it's got to be in America's interests.
BARTIROMO: Did the subject of oil come up? Did the subject of oil come up, China buying U.S. oil? Real quick, Larry.
KUDLOW: No, it did not. That may be down the road.
But my point is this. We may get some progress in Argentina. That's good.
KUDLOW: Let's be optimistic about that.
But let's not go overboard.
KUDLOW: Any deal, which will take a while to put together -- you know this, the details of negotiation -- must be in America's interests.
KUDLOW: And we have not heard from China with respect to our asks.
KUDLOW: We have not yet heard their position.
KUDLOW: So we have got to wait on this. Let's hope we get some progress in Argentina. But this has to be in America's interests.
BARTIROMO: Yes, of course, of course.
KUDLOW: President Trump is the first guy to stress this in 20 years.
KUDLOW: And he's not going to relent. He's got a strong backbone.
BARTIROMO: All right, Larry, it's good to see you this morning.
Thanks so much, Larry Kudlow joining us there on economics.
KUDLOW: Thank you.