larry kudlow on the closing bell, and mark cuban congratulated him on twitter >> congrats, larry thanks for watching "power lunch. >> "closing bell" starts right now. ♪ live from the new york stock exchange in new york city, this is the closing bell, i'm kelly evans. >> i'm wilbur frost. we'll break down what this means to they's economic future and talk with larry live and exclusively himself coming up. stocks on the move lower today, dow down 338 at the lowest, and right now, down 210. let's get right to the reporters watching all of the markets for

us >> bob is at the nasdaq, and bob pisani is on the floor of the stock exchange >> we have trading roulette. traders are having their heads spin with the headlines and competing issues they have to deal with it's causing confusion. starting with the first one here soft retail sales for february, a big surprise we're not sure what to make of it, parsing through the numbers, but this is what it's doing to the stock market look at the department stores, jcpenney, that's not a typo, down 7%. the other stocks are down 4%-6%. there's the issue that keeps on giving, the trade war, possibility of tariffs against china. we don't know how it plays out, but when the headlines come up, we see aerospace sector names, proxies for this whole thing to the downside there's boeing that's not a mistake, down $8. down $16 at one point. that's another problem then we have inflation concerns. we've had ppi unit today, cpi

yesterday, and the jobs report mental cruel muted. ten year yields have been moving down in the last few days pressuring the bank stocks showing you key corp., for example, another one, and this is another classic camp of the group that's been a market leader, last three days or so, generally under pressure, talking about regional banks we have the final thing here, and that's the enof td of the quarter. we had big moves, leadership groups issue and technology stocks here's a classic one, hp, down fractionally, down basically three days in a row, and that stock was over $20, just a short while ago. a lot of headlines moving the markets around it's not quite as easy as it was last year, guys. remember last year, it was all about global economic growth and the tax cuts now the headlines are little murky, and traders have a hard time figuring it all out back to you. >> bob, how much of this, though, is the resolving door a the white house, when gary cohen

said, is he worth 2,000 points on the dow now with larry going in, what effect does that have on the market >> creates confusion, but if you want to talk about larry, look, larry is beloved down here he's a beloved by me, you, and we all laike larry, but no big market moves when we announced it was going to happen i think that's an indication that the markets are not sure whether that's going to have a major impact on policy right now, particularly the trade issues, so i agree with the general idea that all of the revolving door in the white house causes an additional bit of confusion for traders >> bob, thank you so much for that see you at the close fair to say as we saw on the gary departure news, we recovered in the days after. not surprised to see a bounce on the larry kudlow appointment >> larry will be joining us in just the back half of the show larry's going to come and -- listen, we have a ton of questions for him, and i'm sure you guys do as well. we'll see how much he's game for, but knowing larry, it will

be quite a bit >> sure it will be as soon as he's here, he's joining us live on set meantime, a look at the new york stock exchange, what about at the nasdaq >> the nasdaq, let's not forget, this week, closed at a record high over the last few days, and now down for the second day in a row there, after being up seven days in a row. when chips are down, things are down, investors go to the same old players, the usual suspects, the fang names that's what's holding up this market netfl netflix, facebook, amazon, and google walmart now taking aim at amazon with new delivery options for groceries, and the chips today are up fractionally, going back and forth, some of the chip equipment makers are among the leadership, but qualcomm moved higher after being negative on the day here

either side of the even mark, rather, uneven trading there on qualcomm after broadcom abandon its bid among the pushback from the white house. here, as well, among the big losers, are the retailers. we continue to see that softness in retail sales, down for the third straight month kelly? >> yeah. that was a big disappointment this morning in gdp numbers coming down, ten-year yield is down, thank you. turning now to the breaking news out of washington cnbc's larry kudlow is headed to the white house. >> let's get to washington we have the latest on that news that's unfolded, eamon >> reporter: i got off the phone with larry a half hour ago, i'd say, walking me through what happened here. he said the president made the call to him last night, tuesday night, he was in manhattan having dinner with friends, saying he stepped out, ducked into an uber in the call, and

the uber driver had never seen anything like it, a guy in the backseat chatting with the president on the way out of town he accepted the job, honored to have it, and looking forward to working with the president of the united states. in terms of the issue of tari s tariffs, he's been opposed to broad based tariff, and the president in a tariff-related frame of mind here at the white house. kudlow said, it goes back to the reagan years the way i was brought up in the reagan years, you talked it out, argue it out, but once the president decides, that's it, he said my job is to execute not endless bureaucratic things and delays the national economic counsel is an information broker, and i look forward to that role. he says he looks forward to serving the president. he has spoken to paul ryan, the speaker of the house a number of times, and paul ryan has been encouraging of his taking the job. he also said he's comfortable with the president, and he's known him for about 20 years,

interviewed him on the cnbc program and elsewhere, and he said he is familiar with the president's view and the president familiar with larry's views, not saying they are the same views, but they know each other's mind here. the president is ultimately the final decision maker is what kudlow was saying. >> he's got a closer opinion to the president's than gary, who, as we know, was, in fact, a democrat, and you can say with the appointment of mike as the secretary of state that in that position, also moving to someone with closer views to the president. is he now appointing yes, men, people who just agree with him >> reporter: well, that's a question born out over time, right? what kudlow says he will disagree with the president when he feels important to do so, but ultimately, the president makes the decisions here it is the white house after all, and kudlow will execute on decisions even if he does not agree with them as economic counsel national directorment that's how that relationship is

going to go and set up he also raised issues of immigration, which was interesting. i don't necessarily think of it first and foremost as an economic issue, but kudlow said that's one of the things he wants the national economic counsel to focus on. he said he is exactly where the president is ideologically on immigration, agreeing with him entirely on the wall, on chain migration, as the president calls it, and also on the dreamers in finding a solution to the dreamers. lair kudlow saying that's an economic issue and wants the national economic council focused on it. >> thank you very much for that, and we'll explore those issues and many more with larry kudlow himself. he's never shied away from speaking his mind, and here's what he recently said about the president easter riff plan >> president trump and i have talked about this. we agree on many aspects, disagree on some aspects, okay yesterday, he mentioned 25%

tariffs on european cars coming into the u.s i've actually talked to him about that that i don't like that idea. reward our friends, punish our enemies. i think president trump is right. we got to have something steel i just don't know the best way to do that >> joining us now to discuss more about this is his former boss, david stockman, the former on the director under president reagan with kudlow in the white house as well. david, thank you for joining us. i don't know, what is he like in the workplace? what do you say based on your experience in the past and what to expect from larry in the white house? >> caller: well, i say congratulations to larry, but unfortunately, that's about as far as it goes he's walking into what i think is an impossible mission it's head, trump wins, tails, larry loses. what i mean by that is donald trump is an incorrigible

lifelong rabid protectionist, on the record back not 1970s, it's primitive, he's never change his mind, and he's not going to listen to anyone on these issues including larry. >> but you certainly don't think he wouldn't -- anybody going to say, you know, i have an opportunity to work in the white house, but i'm not going to do it because we disagree >> caller: no. i'm glad he's taking it. i say more power to him, but i'm also saying if there's an expectation that this is going to change anything on the matter of trade at the moment, i think that is a delusion trump is, as i said, somehow his mind is frozen in a, you know, 17th century market time warp, and nobody's going to have any influence in terms of pushing ahead. unfortunately, on the other issue, which is even bigger, this roaring deficit that's coming down the track, and we'll

hit, you know, wall street full steam in the fall, larry is going to tell trump what he wants to hear, and that is, we can grow our way out, and he has a wonderful, excellent, brilliant data miner, and he will find ways to convince trump if he waits a little longer, growth is around the corner. now, that's not going to happen, and he's going to help trump sleepwalk right into a tremendous fiscal collision coming in the next few months. unfortunately. >> dave, is that an issue that, if your time working with larry, that the two of you specifically clashed on on how big a deficit should be and where the spending should be a way to try to pursue growth? >> caller: no, we didn't clash because back then we were both budget balancers, both hard core anti-spende anti-spenders. unfortunately, larry spends about 35 years on wall street, and he's come up with a

different view, and that is whatever it takes to keep the stock averages rising, that's what we need to do, and i think that is a huge mistake, and we're going to -- we're beginning to see that unfold already. there will be a yield crunch, a yield shock that i don't think the white house, larry, or the president or washington in general is prepared for. >> we'll put all the points to him when we speak with him shortly. david, thank you for joining us. >> caller: okay, thank you >> david stockman. >> let's bring in mike santolli, good afternoon to you. clearly, markets improved over the course of the day. do you put that -- dow back down 260 points, in fact. >> we just recently broke into interimmediate on the s&p. it's now 2747, putting us in the next phase, right, ready to test

lower, which we tested back in early february when the market fell out of bed. >> either way, do you think the appointment today is a good thing for markets? >> i think it's a good thing for the country because i love larriment larlarr me me he's great i don't think the appointment is immediately going to affect the markets. political stuff is not going to affect pricing in stocks, right, but with larry there, certainly, it can't hurt. in the long term, it's good, but one way or another, the market right now is focusing on some of the broader issues, and, in fact, some of the issues that david talked about, what's coming down the pipe, two, three months out is getting the market unnerved >> today, mike, show the yield on the ten-year, down 2.8%, concerned about a yield shock coming higher. the market is not expressing that concern right now should there be a worry we'll have run away deficits, and a guy like larry or with him in their period, there's not going to be something to stand in the way of that?

>> seems like the market is not going to extrapolate out to that point. obviously, we had a run of softer data, soft retail sales, jobs report, you know, as good as it was in the headline friday, bond market will not place in inflationary things, you are seeing the evidence of it just not yet. be patient on that when it comes to the bond market, as for the stock market, i think that they are not going to try to work too hard to confer the specific policy priorities that are represented by the fact that larry's getting this job it's more about having a voice, that kind of knows wall street, and, also, sheer advocate for corporate market >> what if peter nevvaro was the guy? >> it's not larry in a vacuum, and i think you might have a little more nervousness show up. on the other hand, do the calculation that says, look, yes, the president clearly wants aggressive trade policies out there, but what's the minimum

you can kind of declare victory on are you always painting every detail, follow through the most aggressive front we don't know how it's going to play >> to your point, you've already seen that easing back on some of the trade talk with trump, right? he came out of the box, really hard, and he's already starting to ease back, and what he want to do was get people to the table to discuss this. if this is how it happens, this is how it happens. >> thank you very much for that. one fascinating thing we'll ask is whether he spoke to the president in the last couple weeks on that topic. he was in discussions with them and the president dialled back >> on topic of >> easing. give people carveouts, change the types. we'll discuss that amongst many other things with larry kudlow coming up in about 15-20 minutes. >> kenny, thank you, mike, see you in a bit 45 minutes, dow down 250 points today, and we have been flux waiting to the downside most of the session. s&p down 16. volatility gauge is higher,

small caps lower, nasdaq, last check, it is lower, but it's been the outperformer today. still to come, of course, the interview with larry kudlow, live and exclusively at point nine to discuss the new role at the white house. before we head to break, here's larry in his own words recently. >> that's a revolutionary thought. one quick point, i think you're going to like this the president has done a great job lowering tax rates, growing back all these regulations, president trump and i agree on many aspects, disagree on some trumps reforms on tax cuts, deregulation, and energy, the united states is becoming the most hospitable investment climate in the world these are all pro-growth measures, already showing up in the economy, and it makes america more competitive the dollar's your signal watch the dollar i've said this a million times all i want to say. i don't like blanket tariffs reward our friends, and we should punish our enemieenemies. i want to talk about the steel

industry i'm puzzled. why not have direct government subsidies for steel industries steel has a bad impact on the economy. we have about 160 different quotas and tariffs on steel. never seems to work. what's less harmful? make a deal with canada and mexico if the steel industry has problems, then keep them alive with subsidies i would have loved to see full bore, targeted tariffs on china. china is probably the most offensive trade deal breaker in the world. that's why i would have gone after them first really hit china with a coalition behind you that will agree. tariffs on china that's what i want each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices,

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welcome back to "closing bell," everybody, i'm kelly evans, down 256 points, 40 minutes to go. we have seen the nasdaq go from positive to negative recently, now down by a quarter of a percent. still the outperforming. a moment now, president trump arrives in a boeing plant in st.

louis, there to talk about tax cuts, but on everyone's minds are the tariffs trump wants to impose on china. boeing sells one out of every four planes they make to china >> joining us to discuss more. tom, former lead negotiator and trade representative under president george w. bush, and michael foreman from under president obama, both now fellows on the council of foreign relations. good afternoon to you both tom, starting with you, if i may, in terms of whether we think this visit this afternoon is something that could sway the opinion of president trump, clearly, boeing is declining fast today, at the bottom of the dow. do you think this is something that could make him change his mind on tariffs if he does realize the threat of retaliation information on china? >> i certainly hope so this was supposed to be a good news story for the president, good news visit. boeing has done very well in the first year of the trump administration after a rocky

start. they recently announced they are going to invest $100 million in employee development and another $100 million in work force development from the tax cuts. they also, the administration announced large trust of f18s made in st. louis. this was supposed to be a good news story boeing is, already, of course, at risk of retaliation over the steel and aluminum tariffs, and with this action of china coming down the pipe, it's hard to see how those risks don't increase the president seems very prime to act against china, so it's difficult to see a visit swaying that >> larry kudlow is joining us in minute's time, so we'll ask him about this, but do you think him joining the team makes it less likely that we see blanket tariffs, less likely that we see tariffs that could hurt boeing, for example, what's your

takeaway >> well, i think larry kudlow has a more traditional republican perspective on trade than the president, and when what we've seen over the last year on trade, in particular, there's only one person in the administration who truly matters, and that's the president. he's had a long standing view on these issues, and his sense of the drawing board, when he didn't come back with tariffs on chinese steel last summer, and sent the u.s. trade representative back to the drawing board when he didn't come forward with enough tariff proposals to focus on china for the upcoming action on intellectual property rights, so i don't -- i hope that larry is a good voice at the table on this and could have influence, but one thing we've seen is that the president has a very strong and long held view on this >> tom, what would you consider the reactions so far around the world, but specifically in china, to the steel and aluminum tariffs? so far there's not been any big domestic retaliation, just

strong rhetoric from various partners china was not too perturbed by this because maybe it's a decade or so too late if the president imposes something significant and targeted, what response could we get from china how serious could it be? >> china's exports are responsible for 2% of the steel imports. that's part of the reason they are comfortable with a minimum response to the steel and aluminum tariffs, but if they take this action that might reference intellectual property and technology transfer, the expectation is that the administration is looking at $60 billion in tariffs it's hard to believe they wouldn't respond i think you'd see that response come in a couple forms the first is, i think, you'd see a wto dispute against the united states, in which if they win, china will be able to retaliate

legally. i also think you'll see more subtle forms of retaliation against companies like boeing, specifically, where a lot of chinese airlines are state controlled, so the purchase of those planes, certainly, china goes elsewhere like airbus for the purchase of those planes, and they can do other measures against boeing too boeing is opening a plant in shanghai, so they would be risking that investment as well. >> does china need us more than we need them or is it the other way around >> both want a robust economy and avoid a trade war. so far, as you said, china responded with quite a bit moderation and fragmentism, but depending on what the action the administration takes against it directly in this case on intellectual property rights -- and, by the way, the administration is properly focused on the intellectual property rights issue. it's a real problem in china

imposing $e ining tariffs, limig investments in the united states and limiting their visas to come into the united states, they are not standing on the sidelines and doing nothing. >> if that's your view, which is you got to do something if there's theft, cheating, and a real danger there, how do you do that without negative ko consequenc consequences, or those who say, we have to stand on principles for us, and it if hurts the economy, so be it, this is more important in the longer term >> look, it is important to operate effectively against this i think you do it by using the tools that we have, bringing them to the wto and winning cases against them as we did over the course of the obama administration, but also mobilizing an international coalition of partners who would put pressure on china, and that means not just the eu, japan, and canada, but major emerging economies like brazil and india who are also concerned about china's policy one of the charges of the administration's approach is we are alienating allies and

partners needed to come to the table to pressure china. we're the ones becoming isolated rather than china becoming isolated >> gentlemen, leaving it there, thank you very much to you both, and, kelly, the president likes to look at the target, boeing down significantly there in the last five days, boeing down 5%, airbus and france down. >> talking about boeing traded at a higher multiple of facebook that was true in the early part of the year, but it's not true any longer as we mentioned in one minute's time, larry is joining us, talking about boeing, a host of other issues with tariffs, trade, and working in the white house. zblmpbl we have a news alert on tesla. >> we are watching tariffs of tesla. the downside pressure today being driven by a report at the tech team here at cnbc according to several current and former tesla employees, the electric car maker is producing

a relatively high ratio of flawed parts and vehicles. it's not uncommon for auto parts to sometimes require reworking before being able to be used again, but the reports may suggest that inefficiencies in the production process at tesla could be a drag on the company's ability to hit certain production targets for the new model 3 car. tesla says, quote, our remanufacturing team does not rework cars, and that every car produced is subject to rigorous quality control rocesses the company acknowledged they shut down the model 3 production line last month to give it time to make improvements and improve production rates that's all part of the story for the rest, go to cnbc.com for that story there it's impacting the stock back over to you >> tesla shares down nearly 5% thank you. a lot of reported problems with the assembly of this model 3 in trying to get that up to speed discussing breaking news today that cnbc's own larry kudlow heads to the white house

to fill gary cohen's role with a special guest, larry kudlow. don't miss that interview in minute's time. >> i hope he's on time i hate when the countdowns are wrong. >> he'll be getting over here. we'll be right back. >> particularly as we advertise when he's going to arrive. where can investors seek predictable income in an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. partner with pgim. the global investment management businesses of prudential. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory.

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welcome back to "closing bell" in washington, where we have news from the white house pushing back against the idea of a narrow immigration deal. earlier today, the "washington post" reported that the white house, itself, was floating the idea of including three years of border wall funding nor a three-year daca extension, but the white house now telling me in an on the record statement it opposes the so-called three for three deal saying that it's expecting to get funding for the border wall through the comprehensive spending bill that lawmakers are already writing right now. the white house said that we have never stopped working to negotiate an immigration reform package that addresses daca, stops illegal immigration, and secures and modernizes our legal immigration system guys, looks like the fate of daca up in the air, but i caution that we have not yet seen the final text of that spending bill. we'll let you know when we do. back over to you >> yeah, it's not final until

it's final thank you. >> absolutely. >> time now for a cnbc news update, sue? >> hello, guys students from parkland high school in florida walked out of class this morning and marched to the football field for 17 minutes of silence, one minute for each of the victims at their school the protests takes place exactly one month after the mass shooting snowstorm in the boston area did not stop some students from participating in that national walkout. demonstrators began marching this morning from downtown boston they are calling on lawmakers to create stricter gun laws the office of professional responsibility has recommended the firing of former fbi director andrew mccabe the recommendation is before jeff sessions who will make the final decision he's due to retire this weekend. if fired before then, his federal pension would be at risk a server at a houston waffle house receiving an unexpected

$16,000 college scholarship after details of her act of kindness spread online williams cutting an ailing customers food after the elderly patron could not do it himself another customer snapped a photo and shared the image on facebook it's a good note to end on that's the news update this hour >> that's awesome. i hope she gets more money >> i hope too. >> as people pick up on the story. >> reconsider social media >> if it was filled with stories like that, of course >> thank you, sue. >> thank you larry kudlow joining us on set. we believe he'll be the replacement for gary cohen as the chair of the national economic council, that announcement may be coming toei tomorrow we'll see what details we can get when he joins us in a bit. >> an awful surprise if not, but he'll confirm, and we look forward to seeing him either way.

>> 25 minutes into the close here, dow is headed back towards session low, down nearly 300 points, about 279, and the major averages, the nasdaq, down a quarter percent. dow worst performing, boeing down 1%. >> boeing a third of the decline. larry kudlow is joining live and exclusive here at post nine to discuss his new role at the white house. plussi ines boeing shares sl up 130% since trump was elected. could tariffs derail that rally? president trump is in missouri and we'll get live reactions from the president's remarks ayitus say carl, we have a question about your brokerage fees.

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welcome back, everybody. >> a news alert on united. kate rogers has the details. >> that's right. we have an update from united airlines this is in response, of course, to a dog dying on one of their flights. they said, quote, we have spoken to the family, our crew, and a number of passengers seated nearby we've learned the customer did tell the flight attendant there was a dog in the carrier, however, our flight attendant

did not knowingly place the dog in the overhead bin. as we stated, we take full responsibility and are deeply sorry for the tragic accident. we remain in contact with the family to express condolences and offer support. they added to prevent this by happening again, by april, there's bright colored bag tags to customers traveling with in-cabin pets. this tag will further help flight attendants identify pets in cabin, guys, back over to you. >> okay. thank you very much for that a very disturbing story of today, united down 2.7%. let's focus back to the broader markets. joining on "closing bell" exchange is steve grasso and rick santelli from the cme in chicago. good afternoon to you. at the market levels, you've been watching the s&p level very carefully, key levels dropped below and hovering around. >> sure, if you are watching from a trading desk or at home

looking at the the s&p and spx wondering why we are stuck here at this level, that is the 50-day moving average, so algorithms key in on that, traders key in on that we broke it a couple times today. that's a key level that the bulls must hold today if the market wants to ratchet back higher from there. if we do break into the downside, then you look at the 20-day moving average. so traders, professional traders, that is called the momentum indicator that's the bull-bear line, 2731, giving you breathing room below it if you are a real bowl and want the market, which is react extremely well telling you events that took place this past week, we would be in a corner curled up. >> behaving more like it is -- >> no volatility, fair enough, but to that point, 2789, feels like a lifetime ago. we were just there a couple days ago. so that was the recent high, february 27th intra-day high

look for that level if you're a bull i ultimately believe that markets move higher. we've seen reits not reacting to a rising rate environment, outperforming today, making sense. >> ten-year back down 2.8% jeff, are you taking investment cues from the white house these days >> well, i think we've got to take cues from, you know, potential imposing $60 billion tariffs on china, a big number to throw out there's the potential of the retaliatory types of situations if we were to make that move, and visa restrictions, a bufferin bunch of other things influencing the markets today, and possibly in the near future as well. >> sorry, excuse me, rick, not larry, i have not got larry yet, but later. rick, your take on what yields are doing at the moment. i mean, clearly, quite a big move back towards the 2.8 handle on the ten-year opposed to pushing through the 2.9 handle >> yeah, but, i mean, we have a

darn good chance for the 14th day in a row close in the 280s, and, actually, i fully suspect that's going to be the case. but there's a big story here you know, right after we that employment report, the report before last, we saw average hourly earnings up 2.9 year over year everyone was in a frenzy about inflation. well, i think we learned something today. that other than nervous reactions, whether it's about protectionist wars or hyperinflation, the real issue is that we have weak retail sales. weak growth. that's been a common dmenominatr for all of 2018. weak should be lower stocks, lower yields that makes sense, but what's fascinating is the actual inflation data was far from cold, but medium to a little warm if you look at x autos, excuse me, x food, x energy, x trade,

that particular barometer was just added in august of 2014 when the changed the way they calculate ed ppi. this is the highest level on that chart today reasons to look at the inflation side why didn't the treasury yields go up? the curve flattened. the short end paid attention to the ppi. the long end paid attention to retail sales i think investors should be mindful of that. inherent in that are clues how to trade we've hit a soft patch, no doubt, in terms of data not as stellar has it's once been >> starting at 4.2%, now down to 1.9% >> right >> party note here, montage to larry kudlow, congratulations, but how many times did he say subsidies? steel, steel should be reacting better than you'd think on a day

like today >> thank you, all. >> we got 17 minutes to go before the close we are near the lows of the day again, about 80 points still to come, we are joined with the soon to be chief economic adviser to the president, long time cnbc host and contributor, lair kudlow, will be here exclusively on "closing bell. ♪ ♪ run your business at cloud speed. and do more with systems you have in place. the ibm cloud. the cloud for smarter business. and made it liberating. we took safe... and made it daring. we took intelligent,

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welcome back to "the closing bell," near session lows, down some 255 points. >> all waiting the president's arrival at a boeing plant in st. louis. >> joining us now, head of policy research and head of the washington officer at strategic research partners. dan, thank you so much for joining us this afternoon. let's discuss quickly the result we got in in pennsylvania that is expected to confirm a democratic victory in a

republican seat that the president easily won how big a blow is it for the republicans and what it say about the midterms >> yes, so one election doesn't matter, but look at the five house special elections, there's a twenty point swing to the democrats in all five of the seats. the reason why that's important is what we see in the maps is that democratic and independent voters are coming out 75, 80% and for republican voters, they are coming out 50% the democrats are much more energized than republicans that makes the democrats much more competitive in seats they normally wouldn't win, and the democrats seem to have a lot of momentum going into the november midterm election we're eight mornths from an election a lot could change, but the democrats have the winds to their back right now >> dan, how's it play out to others coming down the pipe? even warren more supportive of the president's policies than

his own? >> sorry, kelly, what was the first part >> how does it play into what happens with tariffs, what you're saying about a democratic wave coming. >> absolutely. so when you think about it, president is trying to get this baked out, so going to the popular route, talking about steel and aluminum tariffs, and there's a lot of democrats who support what the president is trying to do, yet, that being said, a lot of democrats are now starting to join the pro-trade side to oppose the president it's a bit of a mixed bag, kelly, in that republspect, but clearly, they are beginning the work, getting growth, a new spokes for the white house is making that case, then maybe the possibility for republicans can get better, but it's not the trade issue that turns the election for the republicans or for the president. it's growth and tax cuts >> well, dan, we'd love to keep the conversation going, but we have a special guest who just joined us. >> yeah. >> here on set you might know him, larry kudlow

is here. >> absolutely, my good friend. >> we are putting the microphone on you, larry, we're not waiting until you are officially ready to go. >> let me say hello to my dear friend, dan cliffton, the smartest policy guy in washington, d.c. >> congratulations >> i'll call you for help. >> thank you very much >> which camera am i on? >> larry, congratulations to you. >> thank you, appreciate it. >> talk us through what unfollowed in the last couple weeks, when did the president get in touch with you and formally offer you the role, and your immediate reaction? >> well, that last one's easy. immediate reaction, yes, honored to take the job. which was last night >> in an uber? >> actually, it started on 5th avenue i was at one of the dinners, john and margo, judy and larry, and alex, we have hem all the time, and so the phone rang, and, of course, the place is packed, and one of his military

guys said, you know, the president's calling. i walked outside we started a conversation on 5th avenue, very cold, so i got in the uber - >> the weather was cold, not the president. >> the president was great talk about that in a moment. i had to get uptown to do the show like i do every 15 some odd years every tuesday night for a hour, so we were talking - >> who suggested the 10 hours would be more work than accustomed to? >> oh, how unfair. >> 12 hour days all the time tell us about the conversation >> i anchored twice on this network in this -- for a long time, i think the 11 to noon, come back at 7:00. i'm ready. i played a strong game - >> continue to join us regularly as well? >> exclusively, right? larry, come on, you know, all the other tv -- nope, nope, you have to stick here you have a contract, don't you >> kelly, whatever you want. my great pleasure. >> continue to tell us about what the president offered you, and what you expect you'll be

able to do in this role? >> well, look, he called me sunday afternoon, and i was in connecticut, just finished playing tennis, and i thought he was going to call me to ball me out because i had problems with the across the board tariffs, as you know, but he didn't, actually he called and started to explain his position to me thinking on the matter, which i want to get to in a minute because it's not quite what people think it is, and then we got into the conversation and he started talking about the nac director job. that's when i realized that's what this was really going to be about, and he was wonderful. i mean, one of the -- listen, i've been around a while, my head is not turned easily, i've served in the white house, et cetera, et cetera, but just to talk to him for 30 minutes, three, four days in a row is a wonderful thing. i just want to say that. it's a wonderful thing, and he

and i have known each other many years, interviewed him on radio and tv, was in the campaign helping out, i know him, you know, reasonably well, and it was just a terrific experience i don't want to sound sophomoric, but it was a good thing. >> larry, we want to dive in the differences, but multiple 30 minute phone calls a day in the last week. >> yes >> how was the president in the moment people are framing this as a chaotic or very volatile couple weeks. how is he doing personally >> great sounded great. i will see him tomorrow, going down tonight, got all kinds of things to do sounded great. look, the economy is starting to boom the tax cuts are working the deregulation is working. we're going to get on the infrastructure yeah, we're getting on to trade also he's completely in command as he always does, now as he explains stuff he's thinking, but he asks questions.

this is an old thing between us, and he asks good questions if i try to give the kudlow thing, he's going to come back and he's a smart man, so i -- look, i haven't been in the white house as a staffer, you know, so i can't say what all goes on there, but i didn't hear that >> dan cliffton, the reason we talked to him, he said now that the tariff number could be $60 billion, that would do more to offset the impact of tax cuts, in fact, you know -- >> the tariff -- >> this is the tariff number reportedly 30 billion worth of tariffs on china on things like toys or tech, other industries, and the president said it was not enough, and now the reporting numbers were $60 billion. the concern is, look, now the numbers are starting to add up to something that could hurt growth more substantially and undermine benefit of the tax cuts we know you love so much. what's the message going to be to the president on this >> well, i'm a little unsure

about these numbers. i'm not privy to the numbers i talked about it at some length today, an old friend of mine, and i can't comment on that, but i will say this, china is not played by the rules for a long time i've talked about that, intellectual property rights, corporate technologies, other barriers, transshipments to get around things, and so china needs to come up with trade. i believe that now -- >> looking at live pictures of president trump at the boeing plant as well, which we'll keep looking at the pictures. we just had a statement, larry, from the white house, sarah sanders saying kudlow offered and accepted the position of assistant of the international economic council you confirmed that to us, we knew that. but now official confirmation. >> thank you by the way, it was out -- i didn't know that i watched the tv this yormornin,

and the president called, and he said, it's out i don't think he was intending to put it out until tomorrow or friday, and i said, oh, and he said, you're on the air. he said, i'm looking at a picture of you he said, very handsome that's how trump he is >> he's there at the boeing plant now. boeing is down significantly today, 2.5% over five days, down 5%, airbus' rival. we know he looks at the stock market do you think he'll be looking at the reaction to boeing's stock price today, listening to people there at the plant thinking, gosh, tariffs on china is not the right move because they can retaliate and hurt american companies like boeing? >> well, we will see i must say as someone who doesn't like tariffs, i think china has earned a tougher response not only from the united states, but i mean, i would -- a thought i have is that the united states could lead a coalition, of large

trading partners and allies against china or to let china know that they are breaking the rules left and right, that's the way i like to see. you can call it a trade k coalition of the willing, and i can't comment on specific numbers. i don't think the numbers have much to do with us i don't know where they come from i mean, my problem with the steel and aluminum tariffs as originally announced that it might do harm to american users of steel and aluminum. i made that point on the air i made it to him and consumers, ultimately what is happening is on that, and this is a very important thing, the end of last week, he start ed up with the carveouts, the exclusion. canada, mexico, perhaps australia. now, were we on friday we talked about this >> i think we were >> i said i was relieved because i just don't like blanket tariffs or think you should punish your friends to punish

your enemies in international affairs, and that's where he went on the radio saturday, i appl d applauded the carveouts, and in talking with him recently in the days, europe gets carveouts if they are willing to negotiate with us to remove their barriers nay have many barriers ditto for japan. maybe china can negotiate in good faith we'll see. regarding cash rates, no, i don't think our economy -- even worst case goes through, i don't think it would have happened the principle of the thing is not the problem, but i don't like blanket tariffs i spoke to speaker paul ryan today at some length supply ciders said, if you must, at least target them specifically that will work reagan -- we had, what, motorcycles, ships - >> we spoke to david stockman, your former boss >> oh, i know. >> he had interesting things to

say about this he said he sees you in this position as a head trump wins, tail larry loses the president wins no matter what, you could be the fall guy. the president is an incorrigible lifelong protectionist and people are delusional thinking anything will change on trade outcome. the trump is a 17th century time warp, and gary's departure was acknowledgement there was nothing anybody could say or do to change the course of that outcome. >> for 35-some odd years, my friend, david stockman, has been the sky is falling guy, no matter what happens. he's never met donald trump. he doesn't know anything about him. i love dave, i love jennifer i worked for him for three, three and a half years dave -- i don't have to agree

with those comments, and i don't want to go further because i don't want to get personal >> your objective to change the president's mind >> well -- i'm not sure >> the close, all the noise of the bell, the dow closes down around about 250 points. the s&p down about 15 points, and underperformer on the dow. >> you are watching "the closing bell," everybody, we are joined by larry kudlow who, is it official what do we call you? mr. director >> call me larry perfectly okay >> okay. >> she was one of my greatest guests with ratings through the roof on kudlow - >> e-mails right now from people offering congratulations >> many of them. >> thrilled for you. >> god bless all of them one night she's on, and no one comes down the set - >> let me review -

>> taking her away from me, i can see it >> this is a statement from the cnbc chairman. larry is a thoughtful, tenacious, and gracious gentleman who possesses an encyclopedia knowledge of markets, and has the ability to make the most complex components accessib accessible he's been a part of the fabric of cnbc since its founding in 1989 we wish him well >> thank you extremely kind the last 25 years of my life have been tied up with cnbc, which changed my life, changed my profession, and it's been a family to me, and, however this works out, it will be god's will if there's an opportunity when my service is complete, i hope very much to come back and help cnbc it is my family, and it's change my life, and it's cnbc also

years back gave me a chance after my crash and burn, ron and bill grifeth, and next thing i knew, i was in the rotation, and next thing i knew one night i was on air with jimmy cramer, didn't know what we were doing, but i loved the guy, and it was wonderful. i love this place. i'm honored to take this position, hardest part about it is i won't be here three, four days a week anymore. >> so many of us echo mark's words. you are an inspiration to us now you have a chance to make a difference for many, many more people how big an honor is that for you? >> enormous honor. my life has had twists and turns, and as people know, you know, with god's grace, i'll have 23 years clean and sober in the next couple months

that made it all possible, and wonderful people like you, kelly, and mark hoffman, and everybody else here, the whole news room, it's just -- i love it there are greater responsibilities i'm aware of that. i believe i'm up to the task i've got a lot of energy >> listen, people are lucky if they get a second active life, larry. this is your fourth for you? i mean, you are the hope that people - anyway, the president, we'll hear from the president himself as well. he's in st. louis, touring the boeing factory, and that is a fascinating backdrop, the main issue of contention for the markets is the direction of the tariffs, just one final point that david stockman named, he said he thinks, larry, you are the kind of guy who just wants to do whatever it takes to keep stocks rising. >> now, people say that about the president as well. they are all looking at the tariff policy through the lens is it helping our hurting policies like boeing, helping our hurting stocks

what do you think? >> look, in terms of my economic philosophy or views, it's no secret i'm a disciple of robert and some others, steve forbes, steve moore. look, i'll make it really simple mr. stockman notwithstanding i believe, first of all, the greatest and most important thing for this or any other country is rapid economic growth and prosperity for everyone. that's the basic view and has been for four decades. second, there's ways to do it. i don't believe in secular stagnation we go through sulumps in the country, good policy helps, it's the genius of the american businessmen and women, but if you keep tax rates minimal, keep regulation and government spending minimal, if you keep the dollar sound and steady, you

are going to have a terrific economy. if government has a modest approach and lets people do what they need to do and allows the freedoms to do it, we will do great in this country. we are already, i believe, on the front end of a tremendous investment boom. numbers are going to come out of time that's my philosophy look, i love the stock market. i love wealth. i think rising stocks helps everybody, all right, and let me finish this point. many of the people who are critical of me or the president's tax cuts are the very people who are being helped the most for example, my friends in the union movement teachers union, government workers, they hate this stuff. you know what? lower tax rates and faster economic growth and the better profit is the only hope they have of ever seeing their pension. don't tell me it doesn't help everybody because it does, and, in fact, i know people are nagging and complaining to me

about the tax on state and local governments. okay we'll figure that out over time, but you know what? i'm going to say, as i have, everybody is going to benefit from a boom. everybody. you know why i say to my friends, wealthy people in the suburbs or the city, your business is going to improve, your orderbook will improve. you'll be better off everywhere. >> what would you want to ask larry kudlow right now, and if you could wave a magic wand, what's one policy to ensure higher long term growth rate, what would you do? infrastructure >> no. >> keen on one thing >> lower tax rates and sound money. >> personal tax rates? >> personal, corporate lower taxrates, sound stable dollar if you have that combination, as we wrote in our book in the reagan revolution, when that model was tried under jfk and

reagan, it's worked fabulously. >> what would a strong dollar look like? >> i have no reason to believe president trump opposes sound and stable dollar. a great country needs a strong currency he knows that. i have no reason to believe he doesn't favor a sound and strong and steady -- i'm not saying the dollar has to go up 30%. i'm just saying let the rest of the world know we are going to keep the world's international reserve currency steady. that creates confidence at home and overseas i have no reason to believe the president disagrees with that view >> what's it mean for the deficit? willing to let the deficit rise in the short term? >> i have to >> what sort of levels >> that's the way this crazy stat tick scoring is in washington, d.c. i don't believe a word of it i was a numbers dpguy at omb for three years. i heard that with reagan short run deficits, yes, but, look, you're running a business. you're running a business.

you see investment opportunities to expand your business, machinery, equipment, training, whatever, so you go out and borrow in the short run in order to expand the business p over time, that's how it works. if you borrow to finance expenditures, that's a problem if you borrow to invest, we are investing in america with lower tax rates, sound money, and making sure we look over interests overseas, that's the best possible thing. >> what kind of conversations have you had with gary cohen might stick around for the transition >> i hope he does. i've talked to gary daily. he's wonderful, a great help to me, and at one point, i called him one day going through this, i said, gary, this is a dumb question, but, look, what do you do what's your day like what do you do he laughed he said, no, that's a good question >> are you moving to washington? >> i am, oh, yes, absolutely

>> tonight >> well, not lock, stock, and barrel, but, yeah, just a 24/7 job. >> gary have cautionary advice for you? say, hey, plan worked perfectly until peter walked into the oval office >> you know, i have only really good things to say about mr. cohen who i think -- he and steven were so instrumental in this tax cut, it is unbelievable they changed everything. they are working with congress and working with the public. you heard me a few times support their point of view. i have nothing but good things to say about gary and steve, and this pro-growth would have never happened without president trump. people calmed in the campaign, oh, don't believe him, using that, whatever that means. i said, what we are talking about -- trump was the last guy in washington in fact, when i went on the train, argued for 15%, and he got it done. this is after the health care

thing fell - >> what about pete, quickly. >> pete is a good friend of mine i talked to him today or yesterday at some length a regular, on the kudlow report for years. we agree and disagree on things. if you know me, policy disputes are great. i never and never will make it pe personal never. he's a smart guy we have agreements we have disagreements. my friend wilbur frost helped me on this. same thing, you said to me, larry, all i ask is that when the decision is made by the president we then move on to the next issue i said, you have my word you have my word i want to set up, by the way, or strengthen a process so that when decisions are made, we devote our time and discipline to executing the president's policy desires that's the way this should work. i've had experience in the area years ago with reagan and

followed him in the bush years >> is peter going to report to you or that's over >> i don't know anything about that >> just curious on the process >> in my mine, peter is an equal. okay whatever the flowchart may or may not say, i have not gotten that far by the way, i'm a good bureaucrat, have been, a process and policy guy that's why the president and other friends of mine said to me, you have been working 40 years for this the president said to me, this is the job you wanted. i said, yes, sir, it is. >> 25 years -- >> that's correct, by the way. three years at the fed ten years as the chief economist at sterns. other activities around. >> this, by the way, the ten-year anniversary of -- gary cohn linked ceos and the business world with the administration

is that something you see as a role you'll take on? >> absolutely. >> have you spoken to any in particular >> some. there's a laundry list according to the front office of people that want to talk to me. i want very much to do it, follow in gary's footsteps i did that years ago with reagan, a business guy from wall street, but, yes, must do that it's not a consensus thing it's the president's desire and the senior staff to let folks know what we are doing why we are doing it. i know there's agreements and disagreements, but to me, transparency is important principle, particularly nowadays with the high-tech communication. you can't hide anything nor should you i look forward to meeting with them jamie dimon, a friend of mine, asking for my number what i didn't like about it is that he had my number. >> write it down, and i can send it to him. >> as long as he buys me dinner at the local watering hole in the upper east side. >> i'm sure he'll be willing to

sit down back to gary cohn. you have disagreements with the president at times, ultimately, led to the departure, do you fear that? what is the tenure you're hoping for? one year, three, four years, seven years? >> look, it could be for six days, and i'd be talking about this look, i've known the president for a long time. we have mutual admiration society. he is the president. it's a different role. i'll abide by that may be agreements, disagreements, we'll talk it through, but as i said, once decisions are made that's it, time to execute >> the president is going to speak, i believe, in st. louis in the boeing plant within a minute or two. stick around >> love to >> i want your thoughts on what he has to say there. >> interested in what he says. >> you don't know already? are you going to be giving him -- do you expect to give him directions on matters like this? >> i would certainly give him the best advice i can, and

working with my pal, kevin, we are numbers people we make assertions, but p we are numbers people, and the president deserves the best information he can get >> asking something on the pennsylvania election results real quickly district trump won by 20 points, looks like the democrats won at this point dan was on as well said the wave election is coming in the fall how does that complicate things for the white house? if they are the biggest supporters, elizabeth warren is more in his corner >> the president, by the way, polls show he has 24 lead in the district i don't want to get into -- it's a close race let the best person win. i can't tell that. i don't want to anticipate stuff. you know me, i'm an optimist >> one place you have a core disagreement >> i'm an optimist and believe in growth as does he the country is going to have a great run here

we've been a little slow i think this is the greatest country in the world and will produce the best economy in the world, that's what our history tells us >> the president, you said, when you spoke to him over the last few p ddays was not in a negatie mood >> great mood, great jokes back and forth, kidding me about stuff, doing great to know him, i just have to tell you this, it's a lot different than what people's past views are. >> the president is about to begin. >> we'll listen in to president trump. let's take a listen. >> a great company, we appreciate it. i thank the secretary for being here you flew from a different direction, but it's important economic development even for treasury is very important and then president and ceo of the missouri chamber of commerce, thank you very much, doing a great job, and missouri is doing a great job incredible place i want to thank my friend,

dennis, we've been friends for a long time, and i keep telling you, i want you to buy american, buy americanme menamerican we help people, we help countries, gave aide to countries. where do you buy your equipment? other countries. what about buying from the united states? well, we've not been doing that. now they do it we want them to buy, and we also make the best product. [ applause ] we also make the best product. you know, if we didn't make the best product, i wouldn't ask them to do it, but we make the best fighter jets. we make the best there is in the military world, and mostly the best there is in almost any world, and we're coming back, and doing it more so than we've ever done before we are setting records the f-18, my favorite plane, is a work of art. you look at the workers, you look at the talent that went into it. we just looked at different

versions of it, and it is spectacular. it's a beautiful thing to watch. just a few years ago, this plant was in very serious danger of shutting down, and we got it going again, and i think going like it's never gone before, doing better than it's done before we kept it open, keeping thousands of americans employed right here in st. louis, missouri great place. place that was very good to me the state of missouri was very good to me, i'll tell you that and i think josh is doing a fantastic job, i can tell you that he's working hard, just met him at the plant we are going out of our way of t the. we asked congress to fund 24 brand new f-18s, that's going to be the latest and the greatest, stealth, and what people don't

even know about. it's another version of the plane. we are looking for 24 brand new ones we are working on price, and maybe we can work out a good price. [ laughter ] otherwise, we're going to buy them from somebody else. it'll all be in the united states, right? i don't know i have a feeling, way do you think? going to make a deal >> we'll find a way. >> we'll find a way. [ applause ] but it is wonderful to be back in this great state and to push all of the historic tax cuts you know, this was about the first place i announced that we were going to be asking for massive tax cuts, that everybody said it'll never happen, has not happened since ronald reagan to any scale, and didn't even come close since then, and we got it not only passed, but bigger than anything ever passed in the history of our country, and we are now going for a change too, we are going for a phase two,

that will help in addition the middle class, will help companies, and it's going to be something i think very special kevin brady's working on it with me, congress is working, the senate is working, and unfortunately, on the original, we didn't have one democratic vote, which is pretty incredible now they are regretting it we are going to do a phase two, and it'll be something, i think, that will really be a big incentive to do a lot of things like we are doing right here, and a tremendous incentive for the workers. six months ago, i promised that we would cut taxes to bring main street roaring all the way back, and we did we helped wall street. we helped main street. we helped everybody. all of that money that went into the pockets of people, thousands and thousands and thousands of dollars each, they are very, very happy about we created 300,000 jobs in february that's getting to be a number that nobody would have believed. 300,000 jobs

and, really important, we have created almost 3 million jobs since election day, and if somebody would have said that that was going to happen, they would have said, that's not possible, and, you know, the candidate, i wouldn't have said it you would have lost all credibility in running, but we created almost 3 million, and in fact, it's going to be over 3 million jobs since election day, a number that is just nobody would have believed that could have happened, so we are very proud of it. new jobless claims are down to a 50-year low. 50 years new job claims, so we have nobody seen that, and jobless claims went down at a record pace over the last year, and since the election day, but they are down now to a 50-year low. a typical family in this area for example, earning $75,000 a year will see their tax bill slashed in half.

so they will take home money, spend it, save it, do whatever they want to do with it. [ applause ] now the banks are stronger and good things are happening, and they will actually start getting a little interest on the money, and that's okay too if you don't want to invest in the stock market that's good. for a while, people put their money in the bank getting no interest, and that really hurt a lot of families, especially families that saved. you know, people were saving all their lives, and then for a long period of time, they'd like to put their money in the bank and get interest, and they were not getting interest on their money, and now they are getting interest on their money. that's another way, and the 401(k)s are up 30, 40, in some cases higher than that percent for the year, and more than that from election day so it's been really something great a lot of people are very happy families right here in missouri will save more than $4 billion

in taxes and that's just for this year alone. $4 billion right in missouri millions of workers are getting more bonuses, higher wages, and more take home pay i mean, they are going to have a lot more in terms of pay, and you know what, if they want to work here, they can work here. if they want to go -- this is bad news for dennis, i shouldn't say this, but if they want to go someplace else, they can go some place else there's job alternatives now people are able to go out and work where they want idon't think anybody leaves boeing, but just in case they want to. i'm not so sure dennis wants to hear that. he wants to keep them here, but the fact is, having, four, five, six job offers now, whereas before they had none, and that's really something that's special, so we have with us today a great group of people, great business owners we have employees of the firm. we have a lot of tremendous people, and i think what i'd like to do is maybe quickly go around the room, say exactly who

you are, what you do, and i know you all love boeing and love missouri, but maybe we can start and we'll start with the chamber of commerce. >> thank you, mr. president, welcome to missouri, and on behalf of the employers in the room today, welcome to our state. i know we're talking about taxes today, but your regulatory relief, the work on health insurance, and igniting the debate on infrastructure has been very, very helpful. there's a lot of optimism around those three things, but the tax relief, in particular, has missouri humming again a story that directly impacts the missouri chamber we hired a 22-year-old fresh out of the college last october, and this year in calendar '18 as a result of the tax relief, she will save $954 $954 extra to go into her pocket, so thank you very much for that >> thank you very much >> we hear stories like that from all around the state from small, medium, and large

employers here today >> a great job you do with the chamber. >> thank you very much >> thank you yes, sir >> mr. president, david turner, chairman and ceo of hawthorn bank shares, a community bank headquartered in jefferson city, missouri we are a $1.4 billion bank with 348 employees and 21 banking centers in the central and western part of missouri as a result of the tax relief, we were able to give a $1,000 bonus to all employees, $500 bonus to the part-time employees, and in addition to that, mr. president, we have a profit sharing plan. >> great >> so in the future, our employees will continue to benefit from what you did with your leadership role to get that tax relief passed. thank you very much. >> banking business is a tough business with all the regulations and all of the problems, we want regulation, but it needs to make sense, and as you know, the banks are doing much better now, and they are

able to loan, but we have a big one coming up. we have a bipartisan bill that hopefully will be voted on very shortly on dodd-frank. very important amendment especially for the smaller banks and community banks and i think it's going to be a very special bill for you are you following that >> yes, i am i actually thought it was going to pass today. >> it could pass by the end of the meeting. we'll see. >> let's get it passed >> i think it's going to be very popular. it's really for the smaller banks, but they need help and very honored >> it's refreshing >> a lot of money to get great customers. >> absolutely. >> thank you very much >> thank you, sir. >> president trump, i'm kevin purs, work at dynamic fastenerf. we sell fasteners and power

tools to the commercial industry with primary emphasis of metal buildings. my background is i'm a nerdy engineer, so i'm completely out of my element in this room right now, but i'm very appreciative that i got invited, so thank you for that >> you have a very good company, i know about your company, very good job thank you. >> thank you >> yes, i'm mary beth hartman, and i have a union highway construction company it's very small. we have 30 employees, but immediately upon you being elected as president, my whole mind set as an employer changed. i started at that moment operating in a way that i believe your tax cuts would be happening, and they did, and that translated into an upgrade of all the fleets of the seven foreman, spent over half a million in equipment this year, something i was afraid to do before, and everyone received -- they are union, so they have a very good benefit package

already, but i gave them an additional week's vacation for the tenured employees, which was meaningful to them and to all the management, and then they all received at least $500 at christmas. some as much as $2500, depending on what their ranking was, so the biggest thing i thought, for ten years, my employees that were union were very concerned about their pension fund it had been underfunded for over ten years, and when i talked to them last week, they are 94% funded with the expectation that they are going to be 100% funded by the year 2020 >> that's true >> we are very supportive of you in our company, and we are so grateful for the work you've done, and you've only just started, so thank you for everything >> thank you very much, very nice you had your best year >> best year in 17 years absolutely so far. >> people are saying that, by far that they've ever had, so that's what we want to hear,

thank you. >> thank you >> mr. president, the kansas city center railway in kansas city, missouri i'd like to thank you for your leadership with the tax reform it was perfect timing. our team did give all employees a $1,000 bonus, perfect timing at christmas season, which employees were grateful for the need for their families during that time. heard many great stories such as medical bills. >> right >> just repairs needed to automobiles, vehicles, so thank you for your leadership. >> thank you thank you very much. mr. president, i'm the president and chief executive officer of kansas city southern. chad is one of our leaders in the field. he runs about half of our u.s. railroads. we're one of the nation's largest freight railroads based in kansas city as our name implies, about 7,000 miles,

7,000 employees, big presence in missouri the tax reform was wonderful for our business, our company, as you, i'm sure, understand the railroad industry is hugely capital intensive. our company spends about 24% of the revenue in capital assets, track, infrastructure, equipment, and in addition to the tax rate relief, the immediate expensing of capital expenditures is going to make it possible for us to continue to invest at that level, and create jobs and grow and serve our customers, and one of the success stories recently - >> those are business leaders who are speaking in st. louis alongside president trump. just made remarks there. counting successes on the economy and lowering taxes, and, in fact, on that prompt, president trump just said he's now working on phase two of the tax reform larry kudlow is here for some reaction to what we heard, but

first, let's bring in washington on details on what phase two could entail >> reporter: i can confirm house and ways means chairman brady's office is in discussion with the white house on that phase two of tax reform they are telling me that they are looking at opportunities to make the individual's tax cuts permanent. remember, they do expire before ten years is out they are looking at ways to encourage innovation and more people to save said it shouldn't take another 30 years to improve the tax code we'll see how long it takes for them to pull a package together. looks like the republicans would like to have this done before the midterm elections, at least as a proposal for them to run on to show voters what they would do if they are, indeed, elected, but kevin brady in discussions with the white house on that phase two of tax reform, guys? >> thank you very much for that. let's get immediate reaction from larry kudlow, of course, who is still with us

larry, your reaction to them, how achievable is it before midterms >> i heard the same thing. con firming everything said. very important a lot of people, kevin brady, everybody, the president, make the individual tax cuts permanent. they had to fiddle with them because of the goofy stat tick scoring models that never work >> they don't care about the costs, just making it permanent? >> we'll see i don't know these costs are -- look -- can we please use dynamic scoring. >> so everyone knows what you are talking about, static scoring says taking cost of this program, and there you have it dynamic scoring is takes cost, but if the economy grows 3%, we tweak projections so it does not look as cost le. you wa - costly you want the latter to happen. >> critics say plug in ha 10% growth number and it looks like roses. >> it's better than plugging 1.5% number.

look american history proves otherwise. plug in 3% i don't care plug in 3.5%, it looks better. individuals deserve a permanent break. that's important adding more to it. talk about capital gains, possibly lowering the rate, but possibly indexing them for inflation, which is something many of us argued for years. the index, individual code for inflation, because of the 70s experience, index capital gapes because you are paying taxes on illusion their or inflationary profi profits, which is unfair to investors and anti-entrepreneurship. i tried to get brady this morning, but we couldn't, but let's really help the signal businesses on this the small business portion, the 20% deductions and so forth, it's still very complicated and opaque the rules have not been fully

written yet. they are concerned about that. i think we need to give them some help and it should be very positive help, not punishing them small business very important. >> can phase two include a broader cut as a corporate tax rate >> i hate to say i don't expect it you're talking -- look, i want 15% corporate rate, but, no, i don't think so not this time around, but the key here with all the politics and so forth, if the economy is grow iing as we expect it to gr, that is a terrific thing for mr. trump to run on and the republican party to run on there has to be good messaging on this. if i have any fault with the white house, i don't think they had enough really hammering this thing in go for it. you have a good product. the polls show it's popular. the more people know it, the more like it get out there and push >> that the first item, make the most of the tax cuts the administration already passed to show what benefits are to

everyone >> it's going to be one of them. it's going to be one of them the president likes me as a media communicator, so i will be more than happy. >> it's going to be hard for us to go have you communicate any other platform here's more on what phase two looks like >> reporter: the question here is whether this is going to be a policy proposal or a political proposal democrats have already put out their open plan for what tax bill would look like post-2018 including raising the corporate rate to 25%, reinsating things like the alternative minimum tax to individuals and corporations. now you are seeing republicans hitting democrats on their plan going forward, but they also want their own plan going forward. they don't want to just run on tax accomplishments, so i think that what you'll see in phase two is really something that's more geared towards a 2018 midterm messaging rather than something that's going to actually pass before november. >> well, look, there's always

politics in this stuff, i get it you're reporting is always great, but i will tell you this, kevin brady was really the i instigator who sold president trump on it and trump acknowledged it in a meeting, and as i spoke to president trump in recent days, he's referred to it a number of times. i'll just say i understand politics and election years, but these are serious proposals, trust me whether they get them or not remains to be seen they are serious proposals >> but the vehicle they use no longer exist >> we'll see we'll see. you can only take one bite out of the recop silluation app -- reconciliation apple there's other ways and means to get that done -- pardon me >> larry, confirming a new budget proposal that could used to pass tax reform, phase two? >> you know, i would get rid of the reconciliation process i said this to so many people throughout the years

it's a pain in the butt. makes no sense get rid of filibusters makes no sense this is the 21st century, the information age, and they behave like it's the 1830s. i get rid of that, a vote, up or down 50 plus wins >> now your getting big for your britches, what to do in the senate and throwing policies out the window >> i spoke to mcconnell on this. i believe it i have said this before. it's like the 1830s. we don't need it anymore the other thing is this, democrats, i don't understand the democratic party, and let me just say, i am a former democrat, okay, let me just say that i think some of the best republicans were former democrats, john f. kennedy, about whom a wrote a book, a democrat who cut taxes, pro-growth democrats want to cut the corporate tax rate big time. i talked to them i know them. they are stifled by their

leadership i don't understand that party. how are you going to run on raising taxes? explain that to me if the tax cuts are working and popular, which is what the evidence shows and the polls show, how are they -- tax rich people >> raise the taxes and use the money for infrastructure >> raise the taxes and we'll spend and spend and spend on a bunch of things, and i don't think it's a winning message i'm not going to predict the midterms in march, but i'm saying, i think the gop, if they get the message out as much stronger ground on this election than ever before i think they phase too is a good idea, and, by the way, mention trump's defense in america, regarding international trade, whatever the specifics turn out to be is a popular issue, a very pop bular issue he's a negotiator. so far, the returns are good >> so this is now the battle for china, specifically targeting

areas of abuse there, like tech and intellectual property. is that something that, look, no matter what the cost is needs to be done, or is that something that threatens probably the most successful part of the u.s. economy? >> that is correct that's correct therefore, i'm -- if it comes to itting i ing it, i'm targeting strong tariffs and tax increases on china until they come to the table sincerely and play ball with us. >> that chinese companies would not list on the new york stock exchange or u.s. companies with bro broadcom and qualcomm could not have - >> i don't want to predict in this stage across the board tariffs are very unhealthy, but in the history of history, targeted tariffs are necessary, and the president and i talked about this in length in recent days, and he makes a persuasive case again, i don't want to fight the

allies i want to settle the dispute, you know, on the table with nafta and europe and so forth and japan. to me, that's the best way we must not shoot ourselves in the foot tariffs are taxes. but, but, but, such an extreme point -- american company goes to a providence, and the provenn issue people force them to put all the plans on the table incoming the technology. that's unheard of. and then - >> apple, concessions of the most important company we have >> right you got the guys, like, mobsters, and you got to get rich to get there in the first place, then they steal your technology and property rights look, that's got to change i cannot criticize that, all my free trade friends can't criticize there. >> it's jyour job, therefore, t

convince ceos who came out and loudly criticized tariffs of any form what you said is sensible. we know there's property stolen from china going on throughout presidencies how do you argue to the ceos coming out unilaterally to say tariffs are a bad idea >> again, i'm not a lover of tariffs, don't get me wrong, but, but, but, i'll be happy to sit down gary cohn established this, a genius at bringing business people in. very important trump is accessible to the business people. that's good. i'll carry that to the best of my ability, but there's going to be disagreements i'm sorry. i get that we'll see. >> are you bringing any of the people in of your own? >> at the moment, my biggest concern is keeping the staff they have an excellent staff cohn put together. i know some quite well i was metaphorically on my knees

with one asking for her help i won't mention her name, but she's a superwoman, and she is going to stay and help out i hope they all do >> is morale low because of what happened with collins? >> i don't know. sometimes you have anxieties in life and it takes a seasoned old guy to calm him down i hope they stay, that is the pitch. i want them to stay. we may add some and so forth, but it's a good group, very good group. of all the wars in the administration, the nec staff gets really high marks from everybody, which is amazing. >> larry, what's your view -- i mean, monetary policy is not for you to decide, but view on inflation? >> stable dollar stable money confident, reliable, strong, and stable the adjectives are very

important in that game i, right now, steve moore and i had a piece if "journal" yesterday or the day before, growth does not increase inflation. more working, god forth bid blue collar workers get a raise after not having one since 2000. >> you need that up in your office >> i wrote -- >> what he said about wages, but not general inflation. >> that's right. never said it was inflationary keep the dollar sound. >> ready for this? rewi we are trading larry, bringing on the fast money crew >> all right >> guys, thanks for joining us we love this concept what's your larry trade now? no pressure. >> all right, yeah i mean, i love larry i got to say, going into today, long puts, didn't love the gary

cohn change, but of everyone out there, i'm most excited about this choice, outstanding he'll do a great job i think -- >> thank you >> a very, very great job, not just on policy, but the other parts you talked about, communication. which is maybe equally or more important. you have the skills to do both you're an outstanding choice >> thank you, karen, much appreciated. >> larry, congratulations, and major netspire as we say on larry, mostly look at the market over the last couple days, we've gone with being concerned about overheating to a place where now we question growth granted, there's been a couple macro points, retail sales, pmis slowing a little bit, but bottom line is the world needs to understand, i should say markets need to understand what the world understands. we're in a better environment glo globally better to punish your enemies than your friends at the same time we are learning this now, who is

pro or against, fair deals or not. regardless the momentum for corporate eps and where rewith in the country right now is still bullish. >> yes >> the fact in three days we saturd sold to different places in the market, and sentiments, have caution on that view, and, therefore, larry is a fresh voice in the equation, and if that takes us higher, i'm a yes buyer on larry kudlow. >> thank you, thank you very much look, somebody said profits are the mother's milk of stocks. i can't remember who that was. >> it could have been a wise guy on cnbc. i'm going to put him on the spot really now >> the profit picture is good. it's looking real good, and growth is not inflationary just let it rip for heaven's sakes. the market is going to take care of itself. the story takes care of itself let it rip the fed will do what it has to do, but i hope they don't overdo it >> karen, tim, do you buy the dollar

>> oh. >> after everything we talked about, buy the dollar? >> i think the dollar is going to suffer at least with the prospect of twin deaf zits i don't think the dollar is a fall here. in fact, obviously, we corrected 14% on the dollar, which is ultimately the result of, i think, other central banks starting to catch up more than the fed than it is there's some major weakness remember, the dollar, in terms of the dollar basket, europe's in a better place. the dollar is range bound, not going lower or should go a lot lower, but the twin deficits are an issue for the dollar, and that's something that at least with all the fed background that should be bullish, i think it hampers that >> i know who said this, but king dollar is in the great interest of the americans. and its economy, and its stock market look, whether you're domestic investor or foreign investors, you are not going to buy a currency chronically falling >> you heard about the twin deficits we hear this everywhere.

they listen to what you said about phase two, and larry gets in there, we'll spend more to lower rates, and the dollar goes down >> i'm not a spender, but a spending cutter. spending cutter. stockman did better on that, but that's another segment >> larry, where do you want to see the dollar, then >> the dollar a wee bit stronger than currently, but stability is the key. i don't think you have direct targets in these days, but you know wiit when you see it the dollar lost ground i get that it's way above the lows, and it had an enormous rally, so on the dxy, it's where, a 90? all right. i would not want to see it drop another 10%, for example, okay, if it did that, it suggests excess money and inflation i don't see that right now me i would buy king dollar and sell gold

that's the trade that i love i don't think it's about budget deficits it's not about trade deficits. it's whether we grow the economy as i believe we will and that we take care of our currency and instill confidence that's how i see it. the deficits are going to take care of themselves, please they are going to take care of themselves the trade deficit with trump economic growth, trade, it's going to get wider it's not a good measure of the economy. >> tim, karen, leaving it there, but we look forward to "fast money" in a few minute's time. >> thank you >> thanks, guys. >> congratulations, larry. >> thank you so much >> with larry, now, quickly on the dollar - >> yeah? >> was it a mistake to give the possibility of an interpretation that the treasury secretary does not want a strong dollar >> he's in recovery right now. he's a good friend of mine who texts back and forth, and i call it the adjectives. adjectives are very important in

life strong steady reliable consistent those are wonderful adjectives for a treasury secretary he knows robert ruben from goldman sachs, and he was a fabulous treasury secretary making it clear policies for for a steady and strong dollar in the nation's interest. every once in a while, ruben did dollar buying just to tell the short sellers you're on the wrong track, fellas. i'm not an interventionist, but you get the trip >> leaving the door open >> keep the adjectives up. that's all i'll say, and steve mnu mnuchin believes that. he's worked wonders on taxes and so forth, so, no, i -- may do something if it falls a lot. i hope that doesn't happen the federal reserve may have to

raise the funds rate a weebit, okay, fine i love it where it is, kind of, 90 let's call it, high as 103, somewhere in there -- you know what's great, my former boss at the new york fed, he says, one of the things we need to do is have a conversation and an effort, the g20 now, to enhance currency cooperation and stability worldwide. we do not want neighbor policies or dollar wars that's bad for everybody and, by the way, no one ever devalued currency in the process, but the idea of having a full scale conference of currency reform, i don't mean pegging rates, but you know it when you see it. we have to work together i don't know why they don't bring it up. >> years ago they were close >> i know, i know. now they go around and talk about global climate warming and all this stuff that's their job, they are finance ministers for god's

sakes. >> the others are getting stronger now >> okay, that's a good point no, no absolutely right. and it's interesting in this dollar slide in this turning point, guys, gold has not exploded upwards, commodities have not some extent, europe is growinger about, japan is growing better so they are currencies are stronger that's a terrific point. i'm going to sell that to mr. trump and make sure i give you full credit as i always do i don't want to see the dollar plunge that would be bad so far i'm okay with this story. let's keep up with night stepping away from the dollar, back to the stock market two weeks ago we sat here asking about the steel and aluminum tariffs the day they were put on the market was falling sharply, you said here on this set that you were hoping the president acknowledged the fall in the stngt stock market since then he rolled them back do you want that was because of the stock market fall? did you speak to him specifically about that?

how closely do you think he looks at the stock market as an indicator whether his policies, words are the right things. >> i know he follows the market. we haven't spoken about the market in recent days. he does follow it. he should. i think the stock market is a good indicator of the current future economy look, i was very concerned i mean i was not a happy camper when the aluminum and steel thing first broke because of its blanketness and because it seemed like we were punishing our friends. but he shifted very important and he, again, he's a negotiator we don't have many presidents who were do you know who is a good negotiator, once president of the union? ronald reagan. he knew how to use carrots and sticks. >> nafta, tpp are those important objectives of yours. >> yes. >> we always talk broadly, larry, about free trade. with those trade agreements being out there and with these possibly being negotiating chips are you going to push all this towards an outcome where okay we

use these as bargaining tools so that we stay in nafta. i don't know if you think we need a better deal maybe you join the trans-pacific partnership? >> look, it's the president's view that counts the president would much prefer to negotiate through nafta much prefer. that's one of the reasons that he exempted canada and mexico, the two nafta partners, because it was overdone. okay i'm for nafta but it has to be fixed. it's got to be reup holstered in many different ways. you have got tax issues and internal regulatory issues but our economies are completely integrated nowadays. so i don't think -- if we left nafta i think it would have bad consequences to be honest, i think the president acknowledges that his basic point is let's negotiate. and that's a good point for international trade. >> larry, hang on. we've got more from elon now on the potential details of phase two of tax reform. >> share khan brady's office

confirming to me they are hoping to bring forward some improvements to the tax code, this phase two this year unclear if that would be before or after those novel elections again, the goal of the new package would be to make those individual tax cuts permanent, to encourage household savings and help businesses become more innovative so there is now some sort of time line at least for those discussions that chairman brady is having with the white house. >> spot on that's a key point and the other key point about permanence is i would like to see the immediate investment expensing be made permanent. it has a five year window. >> does that take the stimulus out of it? because if it's not going to sunset there is no urgency to do it now or -- >> no. long term. that's the deal. >> that's the rule. >> it makes our investment environment more hospitable for folks at home and folks abroad trump always said this, i agree. we want to make america the

worldwide investment destination. we had that mantle but lost it in recent years. we're more competitive with respect to taxes, with respect to regulations the interest trading system, do it the right way, and hence people will come to us we want them to come to us companies that left us will come home international companies that stayed away will come back, come in and build new stuff that's a big part of the president's thinking and he's right literally we are making america great. what did he say in davos. >> in canada there is pressure on the prime minister because suddenly their tax rates don't look as attractive. >> pity. i'm told by important sources in the american government that mr. trudeau has been on the phone with the president hand over fist acknowledging concessions >> i have a feeling your sources are good as well. >> very good source. one i've been speaking with in recent days. i'm told that. and he told the same thing about

europe but i will say this, this source is worried about the trade situation in europe. eu has very bad protectionist policies they also have bad tax policies. they have big vats we have to pay the vats. they sometimes have quotas on our cars we let them in, welcome them in the south and so for the low tax rates and the right to work and so forth. >> eu has a 10% import tax on u.s. cars. does your source -- >> we don't. >> think if this doesn't get resubtracted there will be a reciprocal tariff put on european cars. >> he is looking at it closely >> if i could jump in. >> yes. >> one of the big international questions in addition to tariffs that companies are facing is what happens with the international side of the tax code it seems maybe of the companies are digesting all of the major changes particularly on the the complicated international saide

that were done in the last tax package. are republicans biting off more they can chew with putting together yet another tax package before the last one is completely worked out? >> i think you just kmu the whole peanut butter sandwich on this in other words you are going to have revisions to the individual code, revisions to the small business code. and i think you are quite right, by the way a lot of international provisions, okay, moving to -- moving away from the current situation and being taxed only once, it is a little bit opaque, elon you know, you look at it -- i tried to work through it with people it's not clear what all is in there. so we will have to see i think it all goes together if they come for a second package you will see it all bundled in together and hopefully we will abolish the filibuster rule so you just need a simple majority to pass and it america will grow and we will all be optimistic like kudlow is, i am an optimist. >> 1978, we believe this might

have been your first tv appearance on "nbc nightly news." they dug it up for us. let's have a watch. >> that's awesome. >> the dollar market, the stock market, the gold market, the bond market are all very much related. these are markets made up of millions of people making individual assessments, individual decisions and quite clearly, there is now a massive loss of confidence in the ability the u.s. to handled its inflation problem over the next couple of years >> good point! needed a hair cut, but good point. i had hair in those days. >> your interviewer needed a haircut more. >> he was a good business reporter in the days when business reporters were very scarce i can't -- maybe it will come to me he was terrific. he was the only guy who cared. i would go on the today show when tom brokaw and jane pauley was running and and we would start talking about the economy, which was a big subject because it was all going to health in a

handbasket and mycogenson -- that's it. home run mycogenson >> larry such a pro that you are a guest with an earpiece as well. >> jason, is there anybody smarter? anyway the point is i would try to get a message out on the economy. it wasn't easy tom brokaw has been a life long friend i love the guy jane pauley i don't know so well but i remember going up with all this crisis and she's saying well it sounds like you know what you are talking about i'm not quite sure and i looked over and said well that's because you really don't know what i'm talking about. >> was that the last time you were ever on that program? >> there was a highiate us of several years. the cast changed and i was welcomed back. >> you are brave for bringing it up again. >> i was sort of annoyed okay. now, nowadays everybody covers everything in business and finance. >> your communication is still one of the first things -- what is that going to look like are you going to get out there

and do -- pick a platform. radio. you have tv. you have twitter you have the web is there going to be a concerted evident, or just i'm available i want to talk about this and tell everybody what we are trying to do >> i'm vailable. no question about that i love radio one of the hardest parts of in i'm going to have to give up my radio show for a while i love tv. i tweet, constantly tweet. i haven't in recent days because i've been locked up in rikers island but i will be able to start tweeting again and giving opinions like we are tonight which is fabulous. everything everything look, the tweeter in chief knows a lot about communications >> larry, we want to echo our congratulations. lots of people have been mentioning it including you haven't been able to speak to jamie dimon. god speed my friend. >> a wonderful man. >> sum for us in the last 30 second how much this means to you, this new role. >> it's my life, my career, my profession, and i trained a long time for it. i've been in the e-commerce game

a long time in different areas and i'm proud of in a and the president has given me a chance of the i love it i'm honored by it. i'm honored to serve my country of it is a great dream and i will work like heck to get it done i really will. >> how long do we have to wait for 3% growth. >> week after next >> larry, a pleasure thank you so much. so very much for all your time, so generous. >> that does it for "closing bell." and "fast money" begins right now. >> lot of great moments there with our friend larry kudlow we wish him well "fast money" does start right now. live from the nasdaq market site traders on the desk are pete najarian, tum tim, karen finerman, and guy adami. tonight on fast it is the kroipt canary in the coal mine of the is the bitcoin sell off a warning sign for stocks. a stop strategist from wells fargo is here with a bold