John Carney & Michael Faulkender | 03-28-26

0:00The Larry Cudlow Show entertaining and informative on the Red Apple podcast network and we'll turn to the economy. We're running late on it. We've got John Carney, who was Breitbart News Editor for economics and finance and co-author of the Daily Breitbart Business Digest must read. And Mike Faulkender is the former deputy secretary of the Treasury and teaching school at Maryland and the head of economics for AFPI, America First Policy Institute. That was your great, I'm sorry, Jack Keen went long, Ron Johnson went long, been a hard day, but you're very kind. We've got just under a dozen minutes. Mike Faulkender, can I just ask, look, we have to have reconciliation. We have got to do it. It's the only way to get around the Democrats with respect to voter registration, financing DHS, fixing the whole business about ICE and the customs and the border and TSA

1:13and cyber security, all that. And there'll be budget cuts in there. There might even be some supply side tax cuts. And I think you should run, if you haven't started at AFPI, you should run some studies, run some, I know it may stretch the bird rule and all that, but that's what's happened in the last 20 years anyway. But it's the only way to get conservative policies through Mike Faulkender, the only way. I agree with you entirely. And so the experience that we had working on the one big, beautiful bill gave us a lot of information about how the parliamentarian is interpreting the bird rule because when the Biden pushed through and the Democrats pushed through what they called the American Rescue Plan and then separately what they called the inflation reduction act, there were some novel uses of reconciliation to do policy. We did some of that in the big, beautiful bill. And yes, we absolutely needed to need to do it for funding DHS,

2:16for getting the Save America Act. And also the defense supplement, we're going to need some stockpiles that are in low positions. Those need to be replenished. And you know full well that the Democrats are going to use any must pass legislation to try to get some of their desired activities. We have to use reconciliation to do these absolutely necessary functions of government. I think so. And we'll talk some more about this, but I'm hoping you can mobilize your troops at AFPI or whatever outside help you need. You know already having conversations with House leadership about what goes in that package. There should be some housing pieces in there as well, you know, not the institutional. Maybe you can get some tech. But you know, why don't you index capital gains? Put that in there. Anyway, I'm just, there's a lot we can do it. I'm glad you're amenable to it because I think enough is enough. All right. Enough is enough. And what's going on the Democrats just block every damn thing,

3:18be just because it's Donald Trump, not because it might help the economy or the country or destroy Iran, right? It's all about the Trump's arrangement syndrome. And I'm sick to death of it, honestly. And there's one other thing that we're going to get in there, which is we're going to go after all of that fraud that's showing up in Minnesota and California. And by the way, that's fabulous because those will be those will be offsets. That's a true fabulous pay for it. Now, John Carney, that leaves me, you know, everyone's talking about the war and the Strait of Hormuz and the whole stock market is trading off it. But John, can we remember the one big beautiful bill a year ago with all kinds of, you know, a hundred percent appreciation, which was spawning factory construction and a business cap expoan and profits are booming. And the trend line for productivity is two and a half percent, which is terrific. And deregulation and a drill baby drill.

4:18I mean, why won't the post war economy boom? That's my question. I think you're right. It will boom. We were actually set up for a tremendous movement. I'll add to your list of good things going on in the economy. There are basically zero people losing their jobs in America today. Their unemployment is at the four week moving average for jobless claims is at 205,000. I think the map on this, it's only been more than that five percent of the time. That's almost always when you're coming out of a recession and people are rehiring. Never in a six-year of a recession or an expansion. Have we seen the unemployment this low? That means that people will have won their confidence. They're not losing their jobs. There's a lot of demand for labor out there. So right now we do have some challenges from higher-priced gas. But by the way, even the higher-priced gas, it's a lot lower and the oil

5:22is a lot lower than it was at the height of the Biden administration. We're way below where we were in 2023 and 2022. So I think the drag isn't going to be quite as much as people fear, and once you get past this, then we will have an economic boom and all of that one big beautiful bill. Remember, there's a lot of individual tax cuts. People are already seeing bigger refunds and their and their the amount being taken out of their paychecks is going to be lower. That gives them more power to consume and do well. It's funny. It's like a shock. Okay, like a bad hurricane, a bad, bad hurricane hits New Orleans years ago, very, very hard because New Orleans had a terrible economy and there was no real business base. When it hits Houston, Texas, a few years later,

6:24they clean it up in a week or two because the business base was so strong. What I'm saying is you have this sort of mild shock. You're right. Historically, the oil shock is very minor, a mild rather, but the US economy is it says good shape with a great incentive structure right now. And therefore it's we will deal with it rapidly. I mean, that's the way I see this story. I think that's right. We're going to see a and something you said on the television show the other day. I think makes a lot of sense. If I were, you know, trying to figure out where I want to be in my investment portfolio of six months from now, I want to be long stock. The oil price is going to crash once the straightover moose is re-opened. It may crash even before that because once people see it's going to be open, the price will start to get down and stop and if you look at the profits and corporate profits are way up and they're expected to keep expanding. That's a recipe for a stock market explosion. Once we get past the fear of that's

7:31prevailing right now. I love that. The expectation once, listen, if marines take those little islands, I was just talking to Brett develop coverage about this and he knows all if the marines take those little islands in the straight, that's going to be the leading indicator that we're going to take it over and re-opened it and you're right. The oil prices will start coming down. I don't know. Trump said something really important. He called it the the the straight of Trump the other day. I think that's very important. That's the leading indicator. It tells everybody that this guy that our president is not going to let this last. That's right. He's taking ownership of it. It's the straight of Trump that that's a single oil pressure should start to fall down. That's a great point. I forgot about that. Last one, Mike Faulkender. At the cabinet meeting, Mr. Trump slammed J. Powell,

8:31praised Janine Piro and said that Kevin Worsh is not going to have an office. You and I have great supporters, but I just think he's got this story wrong and I wish he would straighten it out. I want Kevin Worsh to tell. I want Kevin Worsh to talk to the public about the reforms he's going to make at the Fed because they're all going to be pro-girls. That's right. I don't want the president finding him in office at the White House. I want him creating the office for the reserve for him and the way to do that is to call off Janine Piro and end the criminal investigation because Tom Tillis loves Kevin Worsh and is ready to vote for him as long as the specter of an investigation over Jerome Powell is removed. Worsh will sail through the confirmation hearings. I think he might even get some Democrat votes because people recognize the quality of a candidate he is. The ball is entirely in the hands of Janine Piro and President Trump to remove the specter of an investigation. As you say on your show every day,

9:37hashtag free Kevin Worsh. Let's get him into the Fed so that we can get monetary policy complementing fiscal and regulatory policy rather than standing in its way. That's right. You know, I think it's I don't want Jay Powell to steer the Fed and monetary policy in the post-war period. I do not want that because he's going to nitpick stuff the way he did with tariffs inflation and the way he did at the last news conference a couple weeks ago. You know what I'm I want Kevin Worsh's leadership. I want his rhetoric. You know, he'll communicate why America can grow rapidly without inflation, right? I don't want Jay Powell to get up there and look gray and sound gray like some old gray dinosaur and you know, he's the guy's a bummer. People take a look at the guy and he's just he's just so pessimistic and he's pessimistic because he can't stand Trump. Okay, that's what this is all about. I don't want that. I want a new face. The meanest thing Donald

10:43Trump can do is make sure that Powell has to leave. Don't give him any room to stay. Don't let the investigation go on any longer. As soon as the investigation's dropped, Powell's heart will break because this is his excuse to try to be the Fed chair forever. Yeah, and he will take that away from him once the investigation is dropped. I agree with that. And and to quote John Carney, the best thing you can do with Trump that that that Powell will take as an insult. But what end this entirely is to pardon. I know. I think Jay or I think you were exactly spot on. It was Carney's. It was Carney's. The Carney Powell. The Carney pardon. Yeah, it was Carney's you know, Carney's best moment ever. I mean, he just unleashes this. The bar, the bar, Jay Powell, you know, Trump said he would, it would though I can implicitly we, we indicted them, we tried them, we found them guilty and now we're pardoning him. And we'll give him a proper office inside the

11:47Federal Reserve. You guys did a great job. Thank you for this. I appreciate it so much. John Carney, Breitbart Business Digest, Mike Falkinger, former Deputy Secretary of the Treasury, and the head of economics at the American First Policy Institute. Thank you very, very much, Salmon. The Larry Cudlow Joe on the Red Apple Podcast Network.