Transcript
CHARLES PAYNE: I want to bring in white house senior trade counselor peter navarro and peter we know how badly powell has been behind with respect to the curve. i want to ask you about something that you wrote that caught my eye. powell's audition for worse fed chair began shortly after his february 2018 appointment. promising president trump in the oval office a supportive posture to support his nomination. i didn't even know, can the fed do that? someone is saying i want to be in charge of the fed. can they say to the president i'll support your agenda because obviously, he did not.
SENIOR COUNSELOR PETER NAVARRO: dirty little secret here in the swamp. everybody is a partisan animal and fed chairman are partisan animals, and i remember well when powell was angling for the job and he had a fan in steve mnuchin, the treasury secretary at the time, comes into the oval and he says all of the right things to the boss about how he supports the policies, this , that, and the other thing. he gets the job, and immediately turns coat. it was like, what are you doing? the important thing here, charles, and you and i understand this really well, is that trumponomics has the ability to grow the american economy significantly faster than obamanomics or bidenomics without causing inflation, so in 2018, the first powell major blunder, we're cruising along and powell gets in his head, well we're going to get inflation, we're doing too well and it was too early then, first major blunder, and then look, it was criminal and this gets to the politics again. when he wanted to get reappointed by biden, what did he do? he held back on interest rates even as the inflation started to build and it wasn't until it was out of control and he couldn't put the biden inflation back in the bottle that he starts raising rates, but charles, the worst thing he did when biden and congress were doing that inflation reduction act, all that, he kept his mouth shut. contrast him and what i do in the hill op-ed is william mcchesney martin when johnson was prosecuting the vietnam war and didn't want to exchange guns, he took away the punch bowl and what did volcker do the other great chairman at the fed in modern history. powell is the opposite and now you and i agree he's done two major blunders but the only thick is is what he's doing is a third major blunder and clearly as the data says that we should be at least 50 basis points lower right now and the cost of that, let me just do the cost for you. it's about a quarter to a half point of gdp growth that we lose. that's about 500,000 to 750,000 jobs we don't create. that's about $150 billion added over 10 years to the national debt because 20-30% of that debt will be financed by short-term rates. it's over $1,000 a year that people who have a mortgage on their home and the revolving credit card debt where we have a trillion dollars out there, it's like $5 billion that jay powell, this man is blundering his way and hurting americans to the tune of billions and that's why i nominated him for the worst fed chair in history and i think he's earned that.
PAYNE: peter, i think that you've talked about this and wrote about this. i thought this is interesting. his silent permissiveness which i found an interesting choice of words because some say this is a form of narcissistic behavior and you talk about how much this has cost american public this morning, the nfib come out with optimism survey and i want to show the public this because this is to your point. that blue line is inflation. inflation worries among small businesses plunged. its absolutely plunged. small businesses aren't concerned with inflation. wall street is not concerned with inflation. what's going through powell's head that all of a sudden by the way, he was data dependent and the data said no inflation and then he always says he doesn't want the public to become afraid or think the prices are going higher. well if you say they are going higher you're the chair of the fed that hurts everything doesn't it?
COUNSELOR NAVARRO: let's make the point which you're making here. when you are fighting inflation, the biggest fight after it gets out of control is not the inflation itself. it's the inflationary expectations among workers and among businesses and so when you see this kind of thing, where inflationary expectations are clearly following, we're winning the war on inflation, so when you ask me what's going through powell's head, the other point i'd make in the hill op-ed piece, charles is that powell's a lawyer. he's not an economist. every good fed chair we've had –
PAYNE: let me jump in one second, peter, because i was actually kind of excited we had someone who wasn't an economist that had real-world experience but now he's playing like what he's doing is really off the chain, but i've only got a minute to go. here is what i want to get. so kevin warsh was on with larry kudlow yesterday and said the fed needs regime change and there's a lot of dead wood there so my question is why not take this opportunity to remake the fed, to make it into an agency that works for main street and no longer wall street. no longer the creature from jeckl ex island.
COUNSELOR NAVARRO: that was way out of my lane, charles, but what i can say here is that the concept of an independent fed is a good one but the problem is we've got a partisan fed with jay powell and what i'm calling for on july 29 & 30, if powell can't get religion on trumponomics, it's the board of governors to reign him in. you've got intelligent people on that board. why are they letting jay powell lead them around by the nose. the other lawyer that was on the fed chair was also a disaster. i don't know if you remember, g. william miller lasted only 500 disability in the middle of the carter stagflation and who was he replaced by? paul volcker who saved the day.
PAYNE: real quick. anything you could tell us about trade, peter? what's happening on the trade side?
ADVISOR NAVARRO: yeah, sure. the letters that went outcomed with a couple of deals which are pending with vietnam, we actually get good coverage on almost 90% of the trade deficit that we have with the world because that trade deficit is only with about 15 countries settled. all of the other countries we can do better with to reduce and improve our trade situation, but we're in a good place now and we're collecting billions upon billions of dollars and they are going to help pay for the big beautiful tax cut which by the way we can do maybe another segment sometime is actually going to reduce the debt by several trillion rather than increase it. so what i can tell you about trump's trade policies it's going very well for the american people.
PAYNE: peter thank you so much my friend. we have a couple more segments we have to follow-up with appreciate you.
COUNSELOR NAVARRO: any time you know.
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