Earlier this week, I had the honor and pleasure of sitting down with former Vice President Dick Cheney on CNBC’s Kudlow Report to discuss his new book, In My Time about his 40-year political and business career.
The full transcript and video follow below:
KUDLOW: I am pleased and honored to welcome back to this program former Vice President Dick Cheney, who has written a terrific new book called In My Time about his 40-year career in politics and, I might add, business. I think people forget you were the CEO of Halliburton for a bunch of years.
KUDLOW: And you served on a whole bunch of corporate boards.
CHENEY: I did, indeed.
KUDLOW: So you come at it from both sides. Anyway, Mr. Vice President, thank you very, very much.
Let me just begin. Before I get into the book, I want to do some current events with you. I am worried, as are others, that America is in financial and economic decline right now. And I want to get your take on this. Our economy hasn’t really grown in 10 years. Stock market hasn’t really moved in 10 years. The budget is bankrupt, we’ve just been downgraded, the debt continues to rise, the dollar is falling, gold is rising. How worried are you that we are in decline? How do you see the future of the great American economy, which ain’t so great anymore?
CHENEY: Well, I’m worried, too, Larry. I’m–you’re somebody I follow who we’ve worked together over the years, back our days in government. If you’re worried, I’m worried. And I think most Americans are concerned, not just about the problems of the moment, but about the long term. Finally, our debt problems are catching up with us, and we’ve got to find some way to get back on top if we’re going to pass on the country to our kids and grandkids in as good as shape as we found it.
KUDLOW: The Chinese are nipping at our heels and they’re criticizing us at every turn, particularly on the budget and the debt and the decline of the US dollar currency, which frankly, started during the Bush-Cheney years. The dollar’s been falling now for 10 years, gold has been rising, China’s been yelling. Again, what should we be doing about that? How serious a decline is this?
CHENEY: Well, in terms of the financial standpoint, I think it’s very serious. I’m not ordinarily a pessimist. I basically believe deeply in the capabilities of the United States. We’ve done some tremendous things over the years, and I think we’re capable of doing that again. But we have to face up to the fact that we’ve got these very real problems that we’ve created for ourselves, in large part, especially with respect to the debt, and we, in fact, have to put in place policies that’ll stimulate growth, stimulate expansion, job creation, the private sector; and, at the same, time get a handle on entitlement spending in the federal government.
KUDLOW: Now you know the president constantly blames the–your administration for it. He says the Bush-Cheney people drove the economy into the ditch. That’s his stock phrase. And that he’s got to rescue us. And also, democratic talking points about all this, that we didn’t pay for the war, that we didn’t pay, we–the administration, the government, did not pay for the so-called tax cuts for the rich, they didn’t pay for the healthcare drug entitlement. What is your reaction to their blaming the Bush-Cheney administration?
CHENEY: Well, I think after nearly three years in office now, the effort to sort of pass all the problems back to George Bush’s platter, if you will, don’t sit very well. We’re getting to the point where, after you’ve been there for three years, you’ve made a lot of promises, campaigned from coast to coast across the country as President Obama did, sooner or later it becomes your economy. And I think we’re to that point now. He’s going to be measured very much next year against his performance.
KUDLOW: Do you–do you take some–do you take some of the blame for it? I went through some numbers. These are just broad numbers. Spending did increase during the Bush-Cheney years from 18 percent of GDP to 21 percent. The debt did go up $2 1/2 trillion from 32 percent of GDP to 40 percent. Now the debt is running close to 100 percent of GDP now. I get that. But do you take some of the blame? Could Bush-Cheney fiscal policies have been tighter and more disciplined?
CHENEY: Well, perhaps, but we were faced with some unique situations. I mean, when 9/11 happened, all of a sudden we’re hit with a terrorist attack against the homeland, 3,000 dead Americans in an hour and a half one morning. That required us to take some major steps that were expensive with respect to getting on top of that and making certain that we weren’t faced with another attack like that on our watch. So no question it cost money, but it was something that you absolutely have to do. It’s war time. And we’ve been able in the past to meet those kinds of challenges, as we did during World War II, for example, and then ultimately get on with our business. Now, in terms of adding to the debt, Obama has added as much to the debt in two and a half years as we did in eight years. The fact of the matter is, if we talk about unrestrained spending and a lack of discipline with respect to spending, I think the Obama administration’s record is the worst we’ve seen.
KUDLOW: I want to go back into the book. You don’t really spend too much time on the economy and financial stuff. It’s mostly a book about the terror war, and I appreciate that, but you do talk towards the end of the book about the big banking crisis in late 2008.
KUDLOW: And specifically you say the $700 billion TARP package, you mention this, and you said, `Look, I have long been an advocate of keeping government intervention in the private sector to a minimum. What we were talking about now was the largest such intervention in the history of the republic and I was a strong supporter.’ Now, as you know, the Republican Party en masse, especially in the last couple of years, have been totally against TARP. What do you say? Why were you such a strong supporter? Do you really think it worked?
CHENEY: Well, I–yes, I do think it worked. And I was a strong supporter because I concluded, as I think many of us did at the time, that the federal government is the one with the ultimate responsibility in terms of the nation’s financial system. Federal Reserve’s a part of that, Treasury’s a part of that, but the fact is there isn’t anybody else in the–in our system that can address those issues that were raised by that financial crisis except for Uncle Sam, for the federal government. And TARP was the response to that. And I think TARP has worked in the sense that we did stabilize the situation, that government is collecting in terms of money being paid back, so that virtually all of it has been or will be paid back. Though, from the standpoint of a lot of the criticism that was leveled against it, I don’t think it was valid.
KUDLOW: Did we learn wrong lessons? Is it government bailouts? Is it too big to fail? What came out of this was the Dodd-Frank Bill, which is a massive regulatory bill, almost ineffectively governmentizing the banking systems. Did we wrong–learn the wrong lessons from that emergency?
CHENEY: Well, possibly. I’m certainly not a fan of Dodd-Frank. I hark back to my early experience in government, which was a little thing called the Wage Price Control Program…
KUDLOW: Oh, yes, of course.
CHENEY: …under Richard Nixon. And my job then, I was the director of operations for the Cost of Living Council. I had 3,000 IRS agents who worked under my guidance to enforce those controls. I came away from the experience convinced it was a disaster. It was a classic case of trying to substitute government judgment for what ought to be a private sector enterprise, that millions of Americans would make better decisions for the country on a daily basis as they had addressed all those issues of wages and prices and profits than would a bureaucracy trying to operate in accordance with a set of bureaucratic rules. I think wage price controls were a disaster. I came away from that more conservative in terms of my view of what government’s role ought to be in this society. But this was different. I thought the financial crisis that we faced in ‘08 really, all of a sudden, the financial system seized up, major firms with no significant financial problems can’t get short-term operating cash. I mean, we had a lot of major, major indicators, if you will, that the financial system was coming to a screeching halt. And TARP was the system that was devised on short notice to get us out of that. And I frankly–I think it worked.
KUDLOW: Let me go to the–let me switch to the here and now. We have terrible unemployment problem, 9 percent, 16 percent including marginally unemployed. Something like 20 million people out of work or those who would like to have a better job. It’s a really bad situation. The economies in trouble. We’re growing at 1 percent or less. Now, President Obama next week will unveil another stimulus plan. I don’t know whether it’s stimulus three or four or five. He’s talking about an infrastructure bank, he’s talking about more unemployment benefits, he’s talking about temporary targeted tax credits. I want to get your take on this. And, again, I remind everybody, you yourself were a former businessman for years. You ran Halliburton, you served on a lot of boards, Procter & Gamble, Union Pacific. What should Obama do to trigger businesses that are sitting on $2 trillion in cash to get this economy moving again? What do you think of his so-called jobs plan as we know it from the leaks?
CHENEY: Well, of course, I haven’t seen the plan yet. We’re speculating about it and dealing with the leaks, but I’m not optimistic about what he’ll produce. I think his mind-set is very much along the lines of road-building projects, so-called stimulus, enhanced unemployment benefits. That it doesn’t go to the heart of the problem and that what we need to do is create an environment in which the private sector is prepared to invest, where there’s enough certainty there so that they can move forward in terms of making decisions about ways in which they can expand their businesses and create jobs. We need to do more to reduce the regulatory burden. I see, you know, a big regulatory burden being imposed on the private sector by the administration. That doesn’t appear to be addressed at all by President Obama. I think we need to seriously look at tax policy. I think, you know, left to his own devices, he was arguing for tax increases. I think the private sector is still concerned out there that, first chance he gets, he’s going to be for tax increases.
CHENEY: And all of those kinds of things will retard the restoration, if you will, of the kind of confidence that’s needed for the private sector, long term, to enter a period of rapid growth and job creation. That’s really the only way out of this. I don’t think government can do it by itself.
KUDLOW: I’ve got a couple more questions. I just want to make sure you and the batteries there are working OK.
CHENEY: Mm-hmm. Well, they are.
KUDLOW: What have you got going in there? You’ve got this lovely–looks like a fishing vest.
CHENEY: It is.
KUDLOW: And what’s–what are the hookups to keep your ticker going?
CHENEY: Well, I’ve got a–this is a control element. Sort of a small computer.
CHENEY: I’ve got two of these batteries.
KUDLOW: Oh, don’t move it, it makes me nervous!
CHENEY: They operate for about 10, 12 hours. Then what it does is it runs a heart pump called the HeartMate II that’s inside my chest, plugged into the heart, that takes blood out of the left ventricle, the pumping chamber…
CHENEY: …and moves it into the aorta. It operates at about 7,000 RPMs. Instead of a heartbeat, it’s sort of like having a Ferrari in your chest.
CHENEY: I mean, it gives you that kind of noise when you listen to it. But it’s wonderful technology. It was originally built to tide over patients until they could get a transplant. It’s now gotten good enough so that a lot of people are living for several years with this equipment. It’s a little awkward, but you get used to it. I get everything into this vest that’s specially made for that purpose.
KUDLOW: How is your outlook with this?
KUDLOW: You look great. You sound great.
CHENEY: …so far, so good.
KUDLOW: You’re snapping right back at me just like you always did.
CHENEY: Fourteen months ago, I was in big trouble. I was in end-stage heart failure. My heart was not moving enough blood to service my kidneys and my liver. I was close to–close to the end when we went in and put in the heart pump. Now, it’s not an artificial heart, but what it does is supplement your heart and move a significantly larger volume of blood than was possible…
CHENEY: …before it was installed. And it really is–has done wonders for me.
KUDLOW: All right.
CHENEY: I fish, I hunt, I’m not playing tennis, but I’m doing just about everything else.
KUDLOW: God bless. God bless. All right. Just the last round then, I appreciate this very much and thank you for showing us that. Back to my worries that America’s in decline.
KUDLOW: I’ve taken to calling this a Reagan moment. We need to find a Reagan-like figure to reverse the decline of the United States, at last in the economic and financial sphere. National security, we look much better, as your book chronicles, but on economic and financial. Now, let me ask you a couple of questions, political questions. The role of the tea party. How do you see the role of the tea party?
CHENEY: I think they’ve had a significant impact on sort of putting some spine in the backs of a lot of my friends in the Congress. That, in fact, I’ve realized it was controversial for the–for my colleagues to threaten, for example, the–not to grant the commitment to pay the debt, to raise the debt ceiling. That was, without question, controversial, but I think that threat was effectively used to force the administration to sign on to some significant deficit reduction measures. So I don’t think we would’ve gotten as far as we have without them sort of holding the feet to the fire of members of Congress, but that they were deadly serious about wanting to go after the deficit problem. Now we’ve not yet solved the problem by any means. I’m not totally happy with the package that was approved. I worry very much that defense is going to be on the short end of the stick when it gets down to the point of actually adopting a policy. But we’ve got to start. I think the special committee that’s been established has some good members on it.
CHENEY: But I think others like Erskine Bowles and Al Simpson have done some good…
KUDLOW: Did a fine job.
CHENEY: A fine job.
KUDLOW: Democrat Bowles, Republican Simpson.
KUDLOW: Simpson’s a great pal of yours from Wyoming.
CHENEY: He is indeed a very close friend.
KUDLOW: But they did a fine job.
KUDLOW: It’s a pity the president didn’t really just enact their proposals.
CHENEY: Totally ignored them. Totally ignored them. And we’ve got to continue to aggressively pursue it, and I think the tea party crowd has had a big impact on moving the political dialogue over to a more responsible…
KUDLOW: All right. On the campaign trail, Governor Rick Perry is the new front-runner. Governor Mitt Romney is a tough competitor. You also have Congresswoman Michele Bachmann. You also have Congressman Ron Paul. Are these people that can step into the Reagan and reverse America’s decline? Do you have confidence in the Republican field or are you looking for other candidates to run?
CHENEY: I haven’t endorsed anybody yet, Larry. I’m not sure that would be necessarily helpful. There’s some quarters where my endorsement probably wouldn’t be welcome. But I–we’re sort of at that moment where, as I look at it, the question is whether or not we can elect the equivalent of Ronald Reagan in 1980 or whether we’re going to get a Jimmy Carter-like figure.
CHENEY: And I worry that Obama–President Obama represents the Carter wing, if you will, of the political spectrum, and we badly need a Ronald Reagan. Now, do we have that yet in the Republican field? I don’t know. That’s going to depend a lot on what happens in the months ahead in terms of a candidate…
KUDLOW: But you’re not convinced. I’m hearing some–I’m hearing some skepticism and doubt in your–in what you’re saying here.
CHENEY: I have to say, I haven’t…
KUDLOW: You haven’t seen it yet.
CHENEY: I haven’t endorsed anybody yet, and I expect to support the Republican nominee, but they have a lot to show me before I’ll be enthusiastic about any one of those candidates.
KUDLOW: All right. I hear you. Last one, sir. Tenth anniversary of 9/11 approaches. It’s just going to be in a few weeks. Osama bin Laden is dead, the number two and threes of al-Qaeda, they’re dead and gone. We’ve really decimated them. We’ve killed them, we’ve crippled them. It looks like democracy, this was the Cheney vision and the Bush vision. Democracy is spreading–Tehran, Cairo, Tripoli, perhaps Kabul. First of all, on the 10th anniversary of 9/11, are you satisfied that our country is safe? And second of all, are we wining the global war on terror?
CHENEY: I think we’re making progress. I can’t say definitively that we’ve won. I think it’s important that we not let our guard down. I think there’s still folks out there who wish us harm, and I’m still worried that the biggest threat we face is a terrorist organization equipped with a weapon of mass destruction, a nuke or a biological agent of some kind that they’d try to unleash on one of our cities. So I’m not relaxed from that perspective. On the other hand, I think you’re right. I think our intelligence and military capabilities have been significantly improved over the years. We’ve worked hard on that, and I think it’s produced results. The demise of Osama bin Laden is proof positive of that.
KUDLOW: For which you have given the president some credit for pulling the trigger.
CHENEY: I have, indeed. He made the decision to send in Seal Team 6 at that moment on that raid, and that was a good decision. I think the groundwork for it was laid over the 10 years previously and that a lot of the credit goes to our professionals in the military and in the intelligence fields who really produced the information that ultimately led to bin Laden’s demise.
KUDLOW: All right. I’m going to leave it there, Vice President Dick Cheney. First of all, all best, God speed on your health. All best on the success of this book. And thank you for helping the Kudlow Report down through the years. You know we’ve had about a half a dozen interviews.
CHENEY: We have.
KUDLOW: You’ve been wonderful. Thank you, thank you, sir.
CHENEY: Well, great to see you again, Larry. I love the show.
KUDLOW: All right, thank you. We’ll be right back with more from this evening’s Kudlow Report as we thank Vice President Dick Cheney and wish him all God speed.