Joining me now with more exclusive interview is Treasury Secretary Scott Bessent. First of all, Secretary Bessent, welcome. Thank you for doing this. Much grateful, much appreciation.
I know, Larry. Good to be with you on your maiden voyage.
So now you're back to working seven days a week like you used to in the White House.
Okay, you're right about that. Thank you, sir.
Anyway, Treasury Secretary Bessent, I know everyone wants to talk about China and Iran, but I wanted to lead with a different subject. You've been tweeting about it. The American economy is the hottest economy in the world. Not enough people are talking about it. I try to do it every day. A lot of us, our riffs have your tweets with some important numbers on income and wealth. Manufacturing is booming. Construction is booming. Real wages are rising. Poverty has collapsed as of last year. I mean, this is a great — we don't need socialism. This is a great example of free enterprise. You know, deregulate, cut taxes, and we could be growing at 5%. So, Secretary Bessent, I just thought I'd start with that.
Larry, what we're seeing now is the acceleration phase for all the hard work. As you know, we inherited a mess from the Biden administration. We righted the ship. Many times I say I feel like an emergency room doctor treating a patient that's been backed over by a truck. And we've got the American people back on their feet. And now I think we are in the acceleration phase of this economy. The working families tax cut passed last July 4th is really kicking in. And, Larry, in nature symmetry is the most beautiful thing. And I think the beauty of the tax bill was the symmetry on one side for business: full expensing for equipment, full expensing for factories, full expensing for structures. So we are seeing a boom like we have not seen for more than a decade — in nonresidential construction, factory building, a manufacturing boom. On the other side, the president kept his four signature promises: no tax on tips, no tax on overtime, reduced taxes on Social Security — 85% of our seniors are not paying taxes on their Social Security — and deductibility of interest on American-made cars. So more jobs, an acceleration in the economy, and Americans keeping more of what they make. It's a great setup. And the Atlanta Federal Reserve GDPNow — it's a noisy number, but it is currently clocking over 5% GDP growth for this quarter. And what's important here, Larry, is that is not inflationary GDP growth. If you look at core inflation away from the volatile energy shock that we've had, core inflation has been very quiescent and has actually dropped over the past few months. So the energy shock is not moving into core inflation. We will get to the other side of this Iran conflict. My prediction is that oil prices will be much lower, and then we are seeing, as you said, substantial wage increases for the American people. The wage increases are going to stay. The headline inflation will come down and match core inflation.
You know, Secretary, it's just very interesting. People think we can't grow like this, but really the American economy has gone through periods when policies are incentivizing the economy. I mean, the JFK tax cuts, we grew by 5% or so for about seven or eight years. The Reagan tax cuts, we grew by 5% plus for a few years. When Bill Clinton and Newt Gingrich cut the capital gains tax in the mid-'90s, we had phenomenal economic growth, about 4%. And my point is we can grow. As you say, it's not inflationary, and I don't see any end to it — whether it's data centers or, you know, factory shipments, which are booming, services are booming. We got all those numbers in the last week. I don't see any end to it, Secretary.
No, Larry. And it's what you and I have talked about before. It's parallel prosperity. Wall Street always does well, but now it's Main Street that's doing well. We're seeing a revival in small and community banks. But this comes back to the reason we can have this kind of growth: because the table has been set — tax policy, trade policy, energy policy, and deregulation. And let me just emphasize, Larry, I think the deregulatory aspect of what this administration has done is one of the things that is powering this growth and will make it sustainable and non-inflationary. When we came in, the president told the cabinet: for every one rule you put on the books, 12 or 13 have to come out. Well, it's been for every one rule that went on, it's more than 120. And you see, I'm out all the time engaging with businesses big and small, and the regulatory certainty and knowing that getting the government off their back and on side with them. And as you said, Larry, it is private enterprise that creates the real economic prosperity, not the government. The million jobs we've added this year are all private sector jobs. We've seen the federal government decrease by 300,000 jobs, and it's now being right-sized after the bloat of the Biden administration.
You know, it's just — it's why I wanted to talk about it first, Secretary, because I just want to get this out. People seem to be unaware of it. It's like the greatest story never told, but we are telling the story. Now let me ask you one related question, then we'll move on. With respect to the Federal Reserve, which has a very difficult board of governors and FOMC and so forth, are you worried that the old — you know, the old dinosaurs are saying fast growth like 5% is going to cause inflation? Are you worried that the Fed might choke this off?
Larry, what I think is that with Chair Powell, everyone asked me what the president would be looking for with the new Fed chair, what was I looking for. We both said someone with an open mind, because we both — the president and I — both believed that we could see this kind of economic growth. And if we go back to the '90s, Alan Greenspan, the maestro, had the same situation and he let things run because he saw the improvement based on office equipment, the internet, productivity. We are probably having the same kind of gains, if not more substantial, now, and Chair Powell is well aware of those. I think that the board and the voters on the Fed should have an open mind because, again, it's the deregulatory aspect — like we have created supply with deregulation. We got the great inflation from the Biden years because they had a demand shock that was met with supply constriction with all the regulations and the expansion of the regulatory state. And their demand shock was government-driven. We have a private sector demand shock, and that is being met with more supply because we've deregulated.
