Kudlow’s Money Politics

Paulson Interview

Here’s an interesting excerpt from my interview last night with Treasury Secretary Henry Paulson:

KUDLOW: Secretary Paulson, welcome to Kudlow & Company. Sir, before we get to the competitive issues, can you give us a brief thought on today’s stock market correction, on the subprime issue and the general health of the American economy?

TREASURY SECRETARY PAULSON: Larry, first of all, it’s good to be here. Secondly, I believe–well, first of all, I focus on the economy and fundamentals. I think that’s what drives the market over any reasonable period of time. And I continue to believe the US economy is healthy.

Now let me comment on the subprime mortgage market. We have had a significant housing correction in the US. Housing was growing at a level that was unsustainable. The correction has been significant. You can’t have a correction like that without causing some dislocations. It’s too early to tell whether it’s bottomed. I believe it has. We’ll know more in the next month or two. You know the housing starts, some of that data has shown some continued slowdown, but in terms of the demand, it’s held in there pretty well. When we get farther into the spring, we’ll get a better sense of that.

Now, so if, as I think is the case – again, I don’t have a crystal ball – that the housing correction has bottomed, again, it shouldn’t be a surprise to anyone that there’s some fallout in the subprime mortgage market. And, again, as I’ve said before, I believe there’s going to be dislocations. It’s painful to some mortgage holders. It’s going to be painful to some lenders, but it’s largely contained.

KUDLOW: It’s not a credit crunch economy wide?

Mr. PAULSON: No, no. The consumer in this country continues to be very healthy. This is a diverse economy. We’ve got exports growing faster than imports right now. That’s adding to growth. We’ve got a very, very healthy consumer. Inflation would appear to be contained. So, again, I continue to believe that we are making a successful transition from an economy that was growing at an unsustainable rate, to one that’s growing at a more sustainable rate.

Larry Kudlow — Larry Kudlow is the author of JFK and the Reagan Revolution: A Secret History of American Prosperity, written with Brian Domitrovic.

Most Popular

Culture

Jussie Smollett Changes His Story Again

The actor Jussie Smollett continues to talk about the alleged January 29 attack on him during a frigid night in Chicago, giving Good Morning America his fullest description yet of his claims. It differs substantially from what he told police initially after the alleged assault. Smollett told GMA that the ... Read More
Politics & Policy

We’ll Regret This

Mitch McConnell says the president will sign the budget deal and he will also declare a national emergency to build the wall, as I expected. We’ll see the legal justifications he uses, but as a political and constitutional matter this is a long-term disaster. Oh, it might be good for Trump according to the ... Read More
White House

The Failure of the Deal

EDITOR’S NOTE: The following is Jonah Goldberg’s weekly “news”letter, the G-File. Subscribe here to get the G-File delivered to your inbox on Fridays. Dear Reader (But especially Sammie), I had my say on the emergency declaration yesterday, and I’m sure I’ll have to say it all again not very far ... Read More
Politics & Policy

Capitalism’s Cold War

The story of capitalism since the 1980s has been that of a kind of cold war between capital and politics. In the decade prior, American government was at the nadir of its prestige and credibility. The so-called War on Poverty, launched with great fanfare and idealism in the late 1960s, quickly collided with ... Read More
U.S.

Trump Declares National Emergency to Fund Border Wall

President Trump declared a national emergency on Friday in order to unilaterally appropriate $3.6 billion for the construction of his long-promised border wall. The announcement, made during a televised White House Rose Garden ceremony, came after Congress passed a bipartisan homeland-security-funding bill ... Read More