Stephen Moore, President Trump’s controversial pick for the Federal Reserve who last week withdrew his name from consideration, had a lot to say Wednesday morning at the SALT 2019 Conference in Las Vegas about the fight for a trade deal, tax cuts and 401ks, among other topics.
Punctuated by straight talk and awkward jokes, Moore began with the subject of trade negotiations.
“The markets are overreacting to Trump’s comments,” he said. “He’s not a conventional Republican when it comes to trade, but he wants a deal to be done.”
Arguing the president’s remarks are “brinksmanship,” Moore believes even if Trump were to follow through with imposing tariffs by Friday’s deadline, they will most likely be temporary.
“I give the odds two out of three that a deal will be done. China will make concessions and it will have a giant, positive impact on the economy,” he said before emphasizing, “THIS is the critical issue, not climate change. Will the U.S. be the leader of the world in the next 20 years, or will it be China?
Referring to fellow Trump advisor Larry Kudlow, Moore noted the two began speaking with Trump about trade four years ago.
“He’s somewhat of a protectionist, but he gets angry at that [description]. He claims he’s for free trade, but also fair trade. The irony is that Trump may actually increase free trade by using tariffs as a billy club. I’ve advised the president to get a deal done now, and then when he gets reelected because of a strong economy, push for a better deal in the second term.”
Noting that trump thinks tariffs are good, Moore said he believes it benefits domestic agriculture and manufacturing, “something that I don’t agree with and I know many of you in the room don’t agree with, but Trump loves to follow the markets.”
It’s something he does every few hours. If the stocks market and economy crash, Trump “knows he won’t be reelected,” so it could result in flexibility on his part.
“However, I haven’t seen such a fertile economic environment in Washington in 30 years. Put a deal with China on top of that and it will be a huge benefit for American consumers.”
For those who would credit President Obama for the strong economy currently, Moore disagreed, countering, “most of what we’ve done has reversed Obama’s policies. I was asked on CNBC if what we’re seeing in the ‘Obama Effect.’ I said yes, it’s the effect of Obama no longer being president.”
Fed controversy
As for his recent Fed controversy, he said he was disappointed, as he could have been a “fresh voice.”
He also believes the Fed is too tight, growth does not cause inflation and “tax cuts and supply-side policies do not mean higher prices, but lower prices.”
“The first thing I would do if I was [Fed chairman] Jerome Powell is I would cancel the December rate increase. Generally, I would make the tax cuts permanent and cut spending.”
Turning to retirement saving, he said he’s a “big believer in individual accounts, rather than Social Security.
“One of the worst investments you can make is in Social Security. It has a negative real rate of return over a lifetime. Especially for Millennials, rather than sending 10 percent off to Washington to put in Social Security, I’d much rather see them put it in a 401k. They’ll be much better off.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
