street" is over. >> thank you very much. good morning. it is 8:00 a.m. at applecuperti. 11:00 a.m. on wall street and "squawk alley" is live. ♪ >> good monday morning. welcome to "squawk alley." kicking off the month of may. it's going to be a busy week in our nation's capital from health and tax reform to the rising tensions with north korea. the president weighing in on a number of those issues over the weekend and for that we turn to eamon javers in washington. good morning. >> reporter: good morning. fascinating interview between

president trump and cbs news over the weekend. pegged to his 100-day anniversary in office. the president raising a number of important issues but particularly talking about north korea and trade. a comment that might indicate some shift in the president's thinking. here's what he had to say. >> north korea is maybe more important than trade. trade is very important. but massive warfare with millions potentially millions of people being killed, that as we would say trumps trade. >> reporter: other presidents have viewed trade very much that way as sort of a poker chip in a larger geopolitical game. i had an opportunity to ask wilbur ross about that here at the white house last week. he said ultimately this white house looks at trade in a different way than other white houses have looked at it. that comment would suggest that the president is changing his mind and coming around to a more traditional way of thinking about trade. i know you guys just spoke to wilbur ross about that this morning as well. also the president talking about

infrastructure surprising a few people by saying the deadline for launching his infrastructure program is rapidly approaching. here's what he said. >> going to do infrastructure very quickly. we have a plan largely completed. we'll be filing it over the next two or three weeks, maybe sooner. >> reporter: so it might be art of the deal mode here in washington, d.c. over the next coming weeks if the president is going to roll out that infrastructure plan and also we're waiting on a health care deal and also a spending deal here in washington, which seems to have been reached. we'll see whether it passes this week. back over to you. >> thank you for that. one eye on washington and one eye on the markets. obviously the nasdaq hitting its seventh intraday record high in a row as we wait for earnings from apple and facebook later in the week. both stocks hitting all-time highs this morning. nasdaq is the best performing index year-to-date no surprise. for more on this, let's bring in walter isaacson and also jeff richards. gentlemen, good to have you both. good morning to you. >> good to be back.

>> good morning. >> markets struggling with this debate about some arguing the market is narrowing to this sliver of large cap tech and on the other hand you look at where growth is and where cash balances are and others argue it makes sense. what do you think? >> i do think it's surprising that this entire tech boom in the past few months has really focused on the big companies. we'll see more of it this week with facebook and apple as they report their earnings. i think it's indicative of something larger that we should keep an eye on, which is the pace of wholly new innovation. new things coming along like the uber or whatever seems to have slowed down a bit and you're consolidating around facebook, apple, and the other giants of the industry like google and amazon. >> that's what i'm wondering your thoughts on. there's this euphoria but it feels like we're in between major cycles.

the smartphone has slowed. the pc still kind of kicking but not a huge deal. nothing is growing gangbusters. is all of this valuation really justified? >> let me add a couple thoughts to what walter pointed out. we are seeing a huge boom for the large cap tech stocks. also don't count out recent ipos. ipo class of 2016 is up 48% to date and ipo class of 2017 is up 17%. so we've seen a pretty good market reception to new offerings. plus, great outcomes to silicon valley and the rest of the industry. there is an undercurrent of up and coming companies and beyond companies like uber and air bnb, you have great private tech companies that are still private. they are valued at $10 billion that aren't really on the public

market radar yet but will be over the next 12 to 18 months. we think that's a healthy undercurrent. >> walter, it's also interesting that this whole stock and earnings boom is happening under the first few days of the trump administration. in fact, the tech sector is the best performing within the first 100 days on a day we learned that some of the tech executives are going to lead a council to the white house come working session sort of what we've seen from other parts of the industrial economy in terms of ceo advisers to the white house. how do you expect this relationship to play out? >> well, i think it will play out better now and you're right, the report and other reports that they're going to start a technology council at the white house. i think one of the people will staff it had a lot of fear at the beginning of this administration that it was all about, you know, pushing trade deals that it was going to help maybe some manufacturing and industrial companies. but that it was hostile to

technology. under jared kushner and others, they're trying hard to reach out to tech companies. it will be interesting to see which tech ceos agree to be part of this process. i suspect there will be more than last time around when even travis felt like he had to back out of a meeting at the white house. >> we've talked a lot about the balance of being at the table and also trying to make sure your own workforce understands why you're going to an event like that. part of this mission is to modernize government it behind the curve when it comes to adopting new technologies. is it possible they truly become a new growth element for large or small cap tech? >> it's a great question and something people haven't talked about over the last 12 to 18 months. i think it's run of the reasons why you'll see some of the large cap tech companies like hp, microsoft, cisco, you saw cisco

make the move, you'll see them going after emerging companies in places like security. security has never been more important. obviously with the news last year and the russian hacking, you have other countries around the world that are trying to use cyberwarfare more than physical warfare. it's a big topic and something silicon valley is well positioned for. we're concerned about immigration. immigration is very important to silicon valley. a lot of workers in silicon valley and important tech companies were founded by immigrants. it's something here people are passionate about and we would love tech leaders be able to influence the president and his thinking on immigration. >> speaking of immigrants and tech leaders, you have to give a shout-out to microsoft put into play as one of the big growth companies as he goes into the cloud. i know he agrees with you totally as an immigrant himself. he cares about the american dream. >> people were tweeting out

stories the journal did prior to his appointment. whoever ran microsoft next would be unlikely to make a difference. turned out not to be right. let's zero in on apple. due with earnings after the close tomorrow. cash expected to top 250 billion for the first time ever. cash is greater than market caps of walmart or tesla or disney. then ubs has this note this morning titled survey finds near term iphone demand soft but should investors care? should they? >> well, i do think they should care. one of the great things that made apple a wonderful growth company is it continues to surprise us with new things. gets back to what i was saying at the beginning of the segment. i haven't been surprised by great new products in the past five or six years. whether it was google glass or the apple watch. it didn't fully, you know, change the way we live.

i keep hoping apple will do that. i have a deep suspicion that the new iphone will be truly great but at the moment it's a company sitting on as you said a quarter billion dollars in cash. it's not -- >> trillion, yeah. >> $250 billion in cash. it's not in the dna of apple to return that to shareholders. i remember years ago being at a shareholders meeting with steve jobs and there was pressure from the floor return it in buybacks and dividends and steve got more annoyed with that. i remember afterwards the most polite thing he said about people demanding him to do that was that they were brain dead. used other words that i don't know what they meant. i don't think it's in apple's dna to do that nor is it in their dna to buy big companies. they could buy netflix and tesla and have a lot of money leftover for cups of coffee, but it's not

in their dna to do that. they have to innovate have a big new product. >> they also have debt approaching, i believe, $100 billion in dividend obligations so it's not a trillion dollars in cash and securities sitting around. there hasn't been a transformative move in silicon valley in a while. we've had intel, qualcomm and xp but nothing like oracle people soft from a couple eras ago. do you expect to see something transformative happen? >> i think we will. you look at cash balance sheets and relative lack of big transformative m & a and there are great up and coming companies. you mentioned microsoft. now very relevant in silicon valley whereas five or seven years ago it wasn't.

we'll see m&a and early phases of that. you talk about apple. i was in beijing two weeks ago. there's a line out the apple store in beijing. you talk about starbucks adding a store every 15 hours. we had howard schultz on last week. growth opportunity outside of the u.s. for big tech and consumer tech is massive. let's put it in perspective. everyone talks about we're in a bubble and maybe things will crash like they did in 2000. in the year 2000, there were 350 million internet users worldwide now 3.7 billion. there's 700 million millennials in china and india alone. you have an enormous population out there that wants new products from apple. they love starbucks. they love nike. they love these brands from the u.s. and going back to your point on trump and trade, i think it's incredibly important that we keep an open mind as a country as we look to support our companies doing business around the world and back to your question, john, a lot of companies doing the best job of

engaging with some of these emerging markets are up and coming tech companies. many of them still private. look at companies like in china and india doing great things in that market so m & a with big players look to do things in other markets to compete with google and facebook as well. it's going to be interesting. >> real quick if i can make a point on that. it's such an important thing you just said. this means that china and trade with china and good relationship with china is absolutely crucial. so i think one of the most important things that will happen to tech in the next six months is can we resolve the korea problem and have a better relationship with china? trump said it to john dickerson this weekend. >> he did. the president talked a lot about that. we'll see what happens this week. a lot of information is headed our way. thanks again. when we come back, former federal reserve chairman ben bernanke on rate policy. we'll go live to boeing's annual

meeting in chicago. and then twitter's jack dorsey buying more stock but are investors? all that and more when "squawk alley" continues. usaa gives me the peace of mind and the security just like the marines did. the process through usaa is so effortless,

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ben bernanke weighing in on growth, the president, tax reform, rolling back dodd/frank and much more today in a cnbc exclusive interview on "squawk box." steve liesman is back at hq with

some of the highlights. >> thanks very much, sarah. the former fed chair not shying away from controversial topics in this morning's exclusive cnbc interview and went after critics that said fed policy only benefited the wealthy. it helped create 16 million new jobs. >> talk about how fed policy helped the rich. when the fed was thinking about raising rates, the hedge fund guys writing op e-eds saying ras are too low. >> the former fed chair ventured into current policy saying economics behind his support for the current fed notion that interest rates can end up at a low 3%. >> it comes from global savings. it comes from low returns on new capital investments. so the feds very low interest rates are not as stimulative as it would have been 10, 15 years ago because we're not that far

from where interest rates are neutral. >> what that means for current fed policy is because bernanke agrees the fed doesn't have that far to go, he thinks the fed can get there gradually so the fed should be cautious seeing no immediate threat from inflation. bernanke said there's no reason to pick a hawk or dove because they don't often voting that way once they get on the fed board. bernanke advised the president to choose independent thinkers who do what's best based on long-run needs of the economy, sarah. >> steve, thank you. i thought it was interesting what he said about border adjustment tax. did he sort of endorse it? very open-minded. >> it's been a dilemma for a lot of economists. a lot of smart economists on both sides of the aisle like this idea. one of the ideas comes from a more left of center economist. that's one source of it. what he says is, look, it's a good idea and compelling idea. interested in it. thinks there's a big problem in

implementing it and he's concerned about the adjustment period where the things like strength of a dollar that are supposed to happen cause this economic dislocation in the time period when the economy adjusts. >> we know the treasury secretary has expressed concern about the dollar impact as well. political fallout from that. a lot of political fallout from that. always been a dilemma. bernanke went through this in the crisis. how do you do the right economic policies and finesse the political side of things. >> steve, thank you. >> more highlights from steve's interview from ben bernanke. >> still to come, jack dorsey's latest bet on the future of twitter. plus, live from the conference out west, treasury secretary steven mnuchin. headlines that you should thank me for your bank stocks doing better. some people taken aback by that comment. he'll join us for a live interview in minutes. "squawk alley" is back right after this.

treasury secretary mnuchin speaking this morning. already a bunch of headlines on the tape regarding housing reform, bank regulation, the tax package and health care. we'll talk with him. david faber is there live later this hour. meantime, following some wall street news here. change at money manager alliance bernstein firing the ceo. leslie has more on the drama unfolding here out of france. good morning. >> drama indeed. alliance bernstein said in a filing this morning that it fired the ceo and nine members of the board. the firm moved by written consent to restructure the board and add six new directors including a former jpmorgan chase executive who will take over as ceo. also named the former president of the world bank as its chairman. it's unclear at this time from either the press release or a call held earlier this morning exactly why they terminated

kraus and the rest of the board. analysts on the board pressed the chairman of axa on why exactly they decided to make such a subtle change and his response was "you should have no concern in terms of anything that was not apparent in the figures. the direction we want to take is fully in line with what's been achieved in the past in terms of diversification of the expertise toward new asset classes." the firm reported first quarter earnings last week that showed declining net revenue but assets totalled almost $500 billion. guys? >> all right. thank you. and elon musk speaking at the conference in vancouver over the weekend giving a sneak peek into his plans for a tesla truck. listen. >> so this is a heavy duty long range semitruck. highest weight capability and with long range so it's meant to

alleviate the heavy duty trucking world. with the tesla semi we want to show an electric truck can out torque any diesel semi. this will be a very spry truck. you could drive this around like a sports car. >> of course just because you can doesn't mean you should. musk also told the audience tesla is going to deliver an autonomous driving experience from l.a. to new york as early as november this year while joking about the ways other car companies are trying to compete with tesla. >> we'll be unveiling the tesla semi truck. >> so model 3. it's supposed to come in julyish. >> it's looking quite good for starting production in july. november or december of this year we should be able to go -- all of the way from a parking

lot in california to a parking lot in new york. no control touched at any point during the entire journey. in order to motivate bmw executives, they showed a picture of me. okay. >> they could very well have just shown a picture of his stock chart and not just him. amazing elon musk's ability to time these announcements of plans to keep investors believing in the stock. >> up another 3% today. and he talked about space, didn't he, as well, on a day when they had a successful booster landing and launching this secret military mission into space. >> got to imagine mark zuckerberg is watching these successful spacex launches going why couldn't you have launched my satellite? >> watching from ohio of course. >> now let's send it back to hq. sue herrera has a news update. >> here's what's happening at

this hour. french riot police firing tear gas at protesters at a may day worke workers' march in paris. molotov cocktails thrown at security forces. the rally included calls to block far right presidential candidate lepen from winning the presidential election. joe biden in new hampshire saying he has no plans to run for president in 2020. he made that clear during a speech at the state's annual democratic party dinner in manchester. >> so when i got asked by ray to come up here, there wasn't a doubt in my mind even though i know it caused a lot of speculation. guys, i'm not running, okay. i know it caused a lot of speculation. no. >> and out west, a wildfire in southern california threatening homes in riverside county. the fire was first reported sunday evening before it quickly spread through heavy brush to consume more than 15 acres.

about 100 firefighters are battling the so-called jameson fire. that's the news update this hour. back downtown to "squawk alley." back to you. >> extreme weather all over the country this weekend. thank you. when we come back, we're live from the global conference out west. an interview with u.s. treasury secretary steve mnuchin who just told wall street you should thank me for your bank stocks doing better when "squawk alley" returns. customer traffic?st analyze can we push the offer online? brian, i just had a quick question. brian? brian... legacy technology can handcuff any company. but "yes" is here. you're saying the new app will go live monday?! yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes.

welcome back to "squawk alley." in just a few moments you'll hear from steven mnuchin, the u.s. treasury secretary sitting down with our david faber in just moments. in the meantime, look at the markets. the nasdaq soaring to record highs. dow wavering between positive and negative. dow best performer of the day and of the year adding 12 points to the dow right now which is down less than one point. there's nasdaq up half a percent. stars like netflix and facebook at a record high. facebook also reports earnings this week on wednesday. and these big cap stocks continue to just get bigger. >> they do. and it seems like they could just keep going. especially after earnings this season. a lot of people were speculating valuations were so rich the stocks like the likes of intel,

microsoft, had been on such a run that earnings would have to blow out. amazon another one in order for them to keep moving in. what do you know? they absolutely did. >> si think the overall markets will be tested this week. there's a fed meeting, which no policy change expected, though always interesting to get the statement, comments potentially on the balance sheet something discussed with ben bernanke and jobs report on friday where we get april data. kind of soft as market looks for some sort of rebound. >> three big misses today on income and spending and then the ism and then construction spending as well. but a bunch of option aoptional. latest poll shows 6939. >> that's a big gap. >> some wonder if you want to be short going into a health care vote which has a better chance than the last month one.

>> the fact that the u.s. government averted a shutdown and passed something early this morning and maybe given initial a boost to stocks. it's been a strong run. worth saying that we're in the beginning of may. five of the last six months have been positive for s&p and dow. nasdaq running higher six months in a row. >> yet dow can't put two back-to-back gains together except for one time since february. >> is that true? also record territory remains nasdaq moment only. dow and s&p have not set records since back on march 1st. >> mike is back at post nine. a lot to watch. we're left with the narrative of large tech outperforming and industrials barely moving. >> it's hard to get that macro justification for saying cyclical stocks should resume the lead here. not sure how long that will last. nonnasdaq index tough getting to record territory. monday and tuesday of last week

market gaps up both days. it's been low energy churning around. it's been incomplete pullback we had in march. 3%. didn't really see that fall flush to the downside. similarly we're not rushing to build upside excesses right now. if i look back to when the broad market was at these levels in late february and early march, you had people much more bullish. people much more excited about stocks. we've had this two-month pause. that's refreshed sentiment. >> you have oil down a percent again below $49 a barrel. >> not helping. >> we'll take a short break. on the other side of this, the treasury secretary. don't go away. iting to geico. huh. we should take a closer look at geico... you know, geico insures way more than cars. boats, motorcycles... even rvs! geico insures rvs? what's an rv? uh, the thing we've been stuck on for five years! wait, i'm not a real moose?? we've been over this, jeff... we're stickers!

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>> let's get to david faber in l.a. david? >> thank you, carl. we are joined by the treasury secretary of the united states, steven mnuchin. nice to have you. >> pleasure to be here with you. >> a lot of response to the proposal put out last week. one-page proposal. many saying we don't get it in the sense of the deficits that are potentially seen as created as a result of the significant cut in rate could never be made up, some say, by the economic growth that you see it creating. i know you differ in that. ben bernanke saying i'll take under on 3% gdp growth.

so many others do. what gives you the confidence that this plan can actually do what you say? what evidence are you basing that on? >> let me first say we think that it is critical that we have economic growth, and there's really three parts that will drive that. first is tax reform. this will be the most sweeping tax reform we've ever had. second part is regulatory relief. we can have sound regulations. make sure we have proper regulations. and the third part is fair trade. renegotiating the trade deals. we think those three things together will create sustained economic growth of 3% or higher and it will take some time to get there but we think that by unleashing the economic opportunities in this country that we can do that. and tax reform is a major part of that. >> i realize this has not been scored by many. we don't have details. at the same time, plenty of nonpartisan watch dogs have weighed in. i looked at it this weekend in preparing for our conversation here. 3 trillion, 5 trillion, 6

trillion in deficits created over ten years. are you not concerned that that would be the case? >> let me first say that most of the people who model these plans have not modeled it because they realize they don't have the details. so we thought it was important to put out the core principles. i've been working with the president for over the last year on the economic plan, and we've been talking about tax. we thought it was very important to put out the principles. the principles are simplify personal taxes, middle income tax cut and make our businesses more competitive. we have one of the most uncompetitive business tax systems in the world. in return for simplifying it and lower taxes, we're going to cut back on lots of deductions and the combination -- >> what are those going to be, mr. secretary. you said you thought it was wise to put out the proposal. i'm curious as to why without details that go into these very deductions that may have people rethink the deficits they see that are potentially created. >> on the personal side we said

specifically we're going to eliminate all deductions other than mortgage interest and charitable contributions. that's a sweeping change getting rid of lots of special interests. getting the federal government out of the business of subsidizing states. these are big changes and will raise a lot of revenues so a big chunk of the cost of lowering the rate through simplification will be paid for by eliminating deductions. >> by residents of california and new york. two places you called your hometown, what do you tell residents of those two states, for example, that have very high tax regimes you can no longer deduct your state and local income taxes and your economy may suffer significantly as a result? >> again, you're lowering the top rate. so those people may not get a tax break and we're less concerned about creating a tax break for people on the high end. they're getting a lower rate. we lower the rate from 39.6 to 35%. a lot of people would say i give up my deductions for the lower

rate. >> relative tradeoff would be states with lower tax regimes would be more attractive for those high earners. you could see some migration from california and new york. i know it's a concern. governor cuomo said this would be a death nail for new york. politicians are scared at the possibility. >> i don't think it will be a death for new york or california. these are economies that have done tremendous. i never thought i could move from new york to go to a higher tax place like california, but it's great. people like it here. there's a lot of innovation. that's why people pay the taxes. >> back to the idea of the details, which we don't have except for you saying that we're going to eliminate all of the deductions other than mortgage interest and charitable giving. is that going to add up to enough in terms of the revenue being given up by cutting rates so low? >> we've been working on this for several months. we have over 100 people in the tax department at the treasury that have been running lots of different scenarios.

we are working very closely with the house and with the senate, and the reason we didn't come out with more details is we want to work with the house and senate and have a joint agreement so when we release this plan, it's something that can pass congress and the president can sign. so we have lots of different things, but we're working through details with them. >> how long until so many of news the media and investor class just speculate on what it will eventually look like? when are we going to get those details? >> as fast as we can. so we are meeting weekly at the leadership level. we're meeting daily at the staff level at times. and we're all committed. we share similar views of what we're trying to accomplish and we're committed to work as fast as we can on this. >> this morning politico reported senior officials in the white house and treasury wanted to keep working behind the scenes to create a more fully big tax plan that would get support from capitol hill republicans. then early this summer they could roll out a detailed

blueprint that would address concerns of speaker ryan and others. again, why the decision to release something that was so similar to what candidate trump had talked about on the campaign trail as opposed to going this route that apparently many people in your department wanted to? >> well, first of all, you know, i'm not going to comment on the specifics of the press. that's just not the case. i've been working with the president on this for a very long period of time. we were in the oval office several times last week. the president is very focused on this. we thought it was important that the american public wanted to know and should know an outline of what we're trying to do on tax and make it perfectly clear it's a big priority of this administration to create growth and that's why we came out with the principles and details will come out when we turn this into a bill that can be signed. >> in your first interview, which was on cnbc with my friends at "squawk box" the 30th of november, you said there will be no absolute tax cuts for the

upper class. they will be offset by deductions to pay for it. do you stand by that? >> i've been quoted on that a lot. even during my confirmation hearings i think that got named the mnuchin rule. >> it was a very arresting statement. people look at a 15% tax rate, what you're talking about in the three new brackets that you're going to have, and believe that most of these tax cuts will accrue to the wealthiest americans. >> our focus is really on creating middle income tax cut and simplifications. as i said, a lot of the reduction on the high end is going to be paid for by eliminating deductions so in many cases, people's effective tax rate won't go down. and that's something, you know, again, this is about creating jobs. this is about creating economic growth. very interesting statistic is on the business side, many studies show that over 70% of the cost of taxes are born by workers. so by cutting the business rate,

we're going to have businesses put more money to work, create more jobs, and create better paying jobs. >> there's been concern that as a result of the 15% applying to pass throughs that a lot of people are going to make themselves into those similar kinds of pass throughs. i could go out and create david faber productions and benefit from a 15% rate. how do you make sure that doesn't happen? >> you won't be able to do that. >> how are you going to stop me? >> well, we'll have rules that it's clear that wage earnings will be taxed as wage earnings so what we want to do is we want to create the opportunities for small and medium size businesses to have the benefit of the 15% rate, but we're not looking to somebody who should be taxed at a 35% rate for wages can go out and set up an llc to avoid that. that's something that we won't allow. >> smart tax lawyers out there. that's why we're in the place we

are 30 years after tax reform originally passed. what gives you the confidence you can actually come up with language and/or enforcement that's going to by the law prevent likes of other people from creating these pass throughs? >> as i said? we've had a lot of people working on this issue. it's something we're very conscious of. we're determined that when we come out with regulations this is not going to be about tax avoidance. this is going to be about creating opportunities for small and medium sized businesses. that's why i call it the business rate and not the passthrough rate. >> why getting rid of the estate tax? >> it's a double tax. it's a tax on debt. we believe that people who have worked hard whether they have farms or they own businesses should be able to not have to pay an additional tax when they die. >> deduction is $11 million right now. i looked at statistics. 50 family farms a year. 26% of the tax is paid by .1%. the highest .1% of americans in

terms of income and wealth. that doesn't sound necessarily like it's unfair. >> again, we believe in taxing people once, not taxing people twice. so to the extent that you've paid taxes during your lifetime, we think the estate tax is an unfair tax. that's for every american. >> an economic adviser in the last administration says 269 billion over ten years, you can pay 27 million people $10,000 over that ten years as a tax break. why not go that route? >> we'll create tax breaks for the middle class as part of this as well. >> you're adhering to the mnuchin rule as you put it. you're going to say this is not going to benefit the upper class. >> what i will say is mnuchin principle as opposed to mnuchin you' rule. we'll work with the house and senate on the ultimate plan.

that's the principle. where it ends up will depend on how this turns into a bill, but the president's objective is creating a middle income tax cut and not creating tax cuts for the high end. >> despite what are doubts of some out there who follow -- gdp growth is what -- productivity gains and hiring more team is the key to gdp growth. so how do we get from this tax plan, tax reform that so many corporate leaders told me for so long we need, how do we get from that and individual to kinds of growth we're talking about? make the connection for me and the american public so we can fully understand how we're not going to generate enormous deficits. >> first, on the business tax, we have the most uncompetitive corporate tax system in the world. we have one of the highest rates. we tax on worldwide income. we have deferral. it's not a surprise that businesses leave trillions of dollars offshore. by going to a territorial system and having a one-time tax on companies, they will bring back

trillions of dollars. that's money that will be put to work here that they can invest in their businesses. regulatory relief. there's many businesses that want to do things that are stuck and can't invest because of excess regulations and fair trade. we're going to make sure that we have fair trade where people charge us 25% tariffs and we charge them nothing. that's not free and fair trade. by a combination of these three things, we think we can unleash economic growth that's been held back. >> you're up against a pretty tough comparison. i only mention that because i checked. no administration has seen a .8% increase. let's call 2.2% gdp right now being generous. you're going to get to 3% you say. no administration has seen a .8% increase since 1981. >> we have a lot of work to do. we're determined to do it. >> you do conceivably have a lot of work to do. and finally, secretary mnuchin,

i mean, just wanted you to respond to larry summers in "the washington post" a couple days back writing an editorial. i'll quote from it. some of the most difficult moments for any cabinet officer come when the president fails to respect the department's desire to do serious policy work. when political circumstances force the reputation of past statements. all three things happened to mr. mnuchin last week. >> larry is a smart person. i respect him. i don't know why he's off making these statements. i've worked with the president. i've known him for over 15 years. i've worked with him for the past year. we're putting out this policy because it's something that we spent a lot of time on. we wanted to do it and we believe in. the only reason we didn't put out all of the details is because we're determined to work with the house and the senate to turn this into a bill. and that's the reason why we

didn't put out the details. so i wish larry well. he seems to like writing these editorials. >> yes, he does. he likes to continue to have his voice. finally on the time line itself which you reference and working reference working with the house, bill bradley, senator from new jersey, he was instrumental. it's complicated edcomplicated. you had reagan, bill bradley, so many different constituencies working for years. what gives you the confidence you can get this done in month sns. >> well, it is complicated and that's why we haven't had tax reform in 30 years and it's time we have it. one thing people understand is they want sim ler taxes, businesses that can invest and be competitive and we're determined to do that. >> well, we certainly appreciate your willingness to stop by and

discuss. look forward to future conversations! thank you. pleasure. >> carl, back to you. >> david, good stuff. we were all listening attentive. david faber at the mill ken conference. for more, we turn to rick santelli, bob p pisani is on the floor. let's get your take, the principle maybe not the rule. >>. >> yeah, you know, i know ss o it's so fascinating when anybody in government trying tos to tackle something large. to get that one sound bite that's just as rigid, i think that's a waste of time. the collection of taxes, the revenue generated through taxes that goes to uncle sam is hugely from the individual side. much more than the corporate side. just to set that stage. in terms of modeling on the one page that was released e erele

take that to the next level. modeling hasn't worked out well. we had ben bernanke on today. they never modelled the fact that much of their policy would be put in the purchase of stocks. modeling is limiting. if you talk about deficits, if you want the horsepower from tax cuts, think what what we're saying. p put the money in thands of the people making it, not the government. that has to be a deficit. that's where the kicker is. and finally, on state and local taxes, i just can't wait to see people like schumer deal with the notion they always say the wealthy benefit on state and local taxes, i don't know how you square the complaints on that side of the equation. >> i think that was my biggest take caylka away, this was goin a big fight. the quote was i don't think it's going to be deaf for new york and california. he said they're big sources of innovation, people are dwoipg to live there, but this is going to be a hot button issue. >> people are liveing there

despite the high cost of tax ts there. the it's thot as if this is somehow a game where you on a net basis make out by having your state and local taxes deducted. so, i agree. i think the whole thing in terms of the treasury secretary's set of proposals and principles is a test for what the appetite is in congress, both for initial deficits and tackling some of these deductions and loopholes and exepmtss. i think it's the start of a process and not much more. >> bob pisani, a lot of fliers being taken here. the administration saying they're going to do in months what others haven't been able to do in years. they're going to achieve gdp growth. are the markets going to continue to believe? >> so far, yes. we were virtually unchanged because the narrative hasn't changeded. the reason we are five points on the s&p from an historic high is number one, less risk and volatility over in europe. number two, slowly improving

global economy. three, earnings are better than expected and slowly improving and expect ed to improve and th guidance has been good and finally, the tax cut proposition. there isn't anybody down here that thinks we're going to get a a 15% cut. the bet here is all between 20 and 25%. and how do you pay for it? nobody believes that with a border adjustment tax gone, it's going to be completely revenue neutral. everyone believes even with the removing the deductibility of your deductions right now, everyone believes there's going to be some kind of deficit and most people i talk to down here surprisingly, think that's okay. the one thing nobody believes is just because of we have some kind of tax cut we'll automatically get some kind of growth. none of the people here are economists, but the curve is not widely believed here either. but general feeling is this is going to help. money coming in from infrastructure spending, money coming in to corporations from a

tax cut, even if its repate ruad is going to be a big help for tlooet a year or two. nobody believes the it's the long-term. you've got a perfect combination of three or four forces where risks are reduces. that's why we're only five points from historic high. >> still curious though, mike, prospect of deficit spending, prospect of fiscal stimulus. might move equity, ten years, two, three, one. >> it's not a linear relationship at all and hasn't been for a while. we were in trillion dollar deficits in the depts death penalties of the great depression. >> if the ten year is two, three, one, ss not like the bond market is betting on 3% growth from the administration. >> it's not that i'm optimistic about the plan. i'm pessimistic about the current conditions of tax

policy. >> meaning you still think there's a lot of upsitd? >> manager needs to be done. no, no, no. something needs to be done with taxes and exactly how that translates into multipliers, we'll see. personally, i believe in the laugher curve, just to the extent it curves that i'm not sure of. >> carl, nobody seems to mind deficit spending if it means more money in their pocket. >> it's going to be a discussion. >> a lot of the deficits in the past did not create involve ready prokts that moved through. so you can't burn the bridge of deficit spending f. did that, there would never be another fed ea ease. >> it worked for a while during the reagan years. >> are we going to talk about this -- b. >> the drunken sailor, you don't see new airport infrastructure. that's a big deal. >> guy, thanks. dow's up ten points. back after a a break. ft a a bre. you do all this research

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we've been in a pret thety tight range all morning long, but tlas lot headed our way later in the week including earnings tomorrow from apple, then facebook wednesday night. >> those are both big. a lot of people are going to be watching what apple says about this iphone and ios cycle and on facebook after google's strong showing, the advertising market and capital market. >> the atlanta fed put out its first look at second quarter

gdp. the forecast is for 4.3%. that is very optimist ik and would mark a strong rebound from the weakest quarter we've seen in years. >> they started, down over time. we'll see what happens. it is a pleasure to welcome the judge back to the half. let's get to scott wapner at hq. >> and welcome to the halftime report. i'm scott wapner. our top trade this hour, the bernanke buzz kill. while the former fed chair says the economy won't be as strong as some think and what ma meta to your money and the market. with us today -- want the begin with those controversial comments from ben bernanke. the former fed chair telling squawk box this morning economic growth is unlikely to hit and sustain 3% anytime soon. >> i think if there's a big tax cut for example that lowers tax rates, you might have a