Below are the video and transcript of the panel discussion “Can the American Economy Rebound? ” which took place at the David Horowitz Freedom Center’s 2015 Restoration Weekend. The event was held November 5-8th at the Belmond Charleston Place Hotel in Charleston, South Carolina.
Stephen Moore: First, let me say did any of you see that the other day Hillary Clinton was asked about Barack Obama’s economic record.
She said, “I would give Barack Obama the grade of A for his handling of the economy.”
I thought, “Wow an A, that’s with grade inflation, right?“
It reminded me of when I was in college and – we take basketball very seriously at the University of Illinois – we had recruited this kid who was a phenomenal basketball player but Lord knows how he got in through the admissions process. After his first semester, he famously had gotten this report card and his grades were one D and four Fs. He was talking to the coach of the team, and the coach, looking at his report card, says to him
“Son, it looks like to me like you’re spending way too much time on one subject.”
This what I call the Reaganomics versus Obamanomics chart. It is something that all conservatives should throw in the face of liberals when we are debating and it’s the growth gap. The way I like to put it is that there’s a natural experiment out there that this country has had that over the last 50 years we’ve had two presidents who’ve entered office during periods of great economic crisis. The first was Ronald Reagan, and you all remember 20 percent mortgage interest rates and 14 percent inflation and it felt like America was an empire in permanent economic decline. We also remember the $830 billion stimulus bill that didn’t create a job, cash refunders, and then the Obamacare bill that was going to reduce healthcare costs for everyone. We had the Fed over the last 6 years print somewhere in the neighborhood of $4 trillion. We had tax increases on the rich. We had three minimum wage increases. In sum, almost every single page of the liberal playbook they threw it all in 2008 and 2009.
Now what this is showing you is that the path of the recovery of these two periods. What’s amazing about this is the current recovery has been at an average rate of about 2 percent, just slightly under 2 percent, for the last 7 years and then you can see under the Reagan recovery we grew at about 4 percent. Now the difference between 2 or 4 percent doesn’t seem to suggest a big difference, but as Albert Einstein used to say the most powerful force in the universe is compound interest, so the compounding effect of a 2 percent growth rate versus a 4 percent growth rate over 6 years makes a whole heck of a lot of difference.
This does not include the numbers for the third quarter of 2015. Those numbers just came out a week or two ago, so this gap has probably actually grown a little wider because we had such a pathetic third quarter growth rate is that we had had a Reagan-style expansion we would have $3 trillion more GDP today. $3 trillion.
The first time I ever was on TV which was in 1987 when I was working for President Reagan. We did something, as Reaganites, we weren’t very proud of. We proposed to Congress the first trillion dollar budget in American history. As fiscal conservatives, we were kind of embarrassed this was the first trillion dollar budget and I’ll never forget my boss, Jim Miller, called me up on a Friday afternoon. He said he was supposed to do this TV appearance on the Today Show with Katie Couric, but couldn’t do it. He had to be over at the White House, and he asked me if I could go instead; I had never been on TV before.
I was terrified. I spent the whole weekend preparing for this. I read through every single line item of the budget. The federal budget is like the Manhattan phonebook, right? It’s like 600 pages. And so I was ready for any question Katie Couric might ask. I mean I knew what the budget was for the Navy, for the ANILA, for the Department of Defense. Anything she’d asked me, I knew the numbers. So, cameras are rolling. The lights come on. It’s 7:30 a.m. There’s 6 million people watching Katie Couric, and she sort of snarls at me.
She said “Mr. Moore, I see President Reagan is introducing the first $1 trillion budget in American history. I just have one question for you this morning. How may zeroes are there in a trillion?”
I just melted down. It was the worst interview. I just melted down after that. And, by way, how many zeroes are there in a trillion? There’s 12, there’re 12.
So we have a $3 trillion gap right now. So that’s a big number. And one of the ways I like to sometimes we use these big numbers – and people’s eyes glaze over – but one way of thinking about this is that if we have $3 trillion more GDP today, and we just distributed that evenly to every family in America every family in America would have about $15,000.00 to $20,000.00 more income. The statistic that is devastating to Hillary and others that every Republican should recite every single time they talk about President Obama and Hillary.
Since President Obama came into office in January 2009, the average family has lost $1,700.00 in income; $1,700.00 of income. People are kind of mystified about why Americans are so cranky. Why are they so angry? Hillary can’t understand it. This is just an A recovery. They have lost income. They haven’t gained it.
If you look at this next chart here, you’ll see here is the problem with the job picture. Now the job picture has been decent under Obama. It hasn’t been poor, but it’s certainly been subpar if you compare this recovery with the Reagan recovery. We should have about 6 million more jobs today and I think knows that the biggest lie in Washington is that we have a 5 percent unemployment rate. The real unemployment rate is about 10 percent and why they report a lower unemployment rate is that we’ve had a record number of people leave the workforce. I think part of it is a skill shortage; part of it is welfare is paying people to stay out of work, and part of it is the people have just become discouraged from finding a job.
So the point is that liberals have a lot to explain. They’ve done their program, and Hillary’s going to have a very difficult time, for one reason. One of the things that comes shining through in the polls right now that is just undeniable is that when Americans are asked, do you want a Barack Obama third term? Only less than 1 out of 3 say yes. In fact, the numbers are 67 percent no, and about 22 percent say yes. And Hillary is essentially running for Obama’s third term.
This is just kind of an interesting one. This is what I was talking about, about they report 5 percent unemployment. That’s the blue line. The actual unemployment, when you include people who have dropped out of the workforce and people who can’t find a full-time job. By way, anybody know what a 49er is? Not a San Francisco 49er. Anybody know what a 49er is? It’s a business that is capped its employment at 49 workers. Do you know why they’re doing that?
Obamacare’s law says if you hire somebody with 50 or more workers you have to apply Obamacare regulations and mandates to every single one of your workers. So when I go around this country, I can’t tell you how many businessmen and women I talk to say, I will be damned if I ever hire a 50th worker. And if you look at the data it’s startling.
Because we keep track of the average number of people per establishment what we’re finding is there’s a big cap at 45 to 50 workers, right? So employers are capping at 45 to 50, and they’re not going above that. By the way, anybody know what a 29er is?
So we’re seeing this effect too. Because under Obamacare if you hire somebody for more than 30 hours a week, that is considered a full-time employee. You have to provide them benefits. So we’re saying the same thing with respect to employers are now; they’re hiring people from 25 to 28 hours a week to stay under. Incentives matter. We believe that as conservatives, right? Economic incentives matter. Businesses do respond to this stuff, and they’ve held back employment, so that’s one of the reasons you’re seeing the real unemployment rate being much lower than that.
Let me shift gears. I think this is one of our most powerful arguments against the Left, as I just wrote this book about 7 or 8 months ago with my good friend, Art Laffer, called The Wealth of States.
This is really one of the most important shifts that’s going in America that people aren’t paying attention to which is that we are seeing a huge increase in the number of people are moving from one state to another; it’s not happening randomly. What is happening is that people are moving from the north to the south and they are moving from blue states to red states.
If you’re a liberal, that’s a hard thing to explain. Because liberals say they’re going to create a worker’s paradise; everything’s going to be wonderful in blue states. Wait a minute. People are moving out of blue states into red states; prima facie evidence that their model isn’t working very well.
When the book first came out, Arthur and I did a big book tour. We went around to cities around the country, talked about the findings of the book; that just all these people are moving to red states. We were in Birmingham, Alabama, and they had a huge gathering in this big civic center There must have been 600 people – and I got a little bit carried away – when I slammed my fist on the table, and I said and what I’m trying to tell you people is that the south will rise again. And these people started cheering, and this one guy in the back of room, and I’ll never forget this, he’s waving his hand at to me, and I said yes, sir what can I do for you? And he goes Mr. Moore, he said do you mean militarily? I said of course not.
But there is like a second civil war going on in this country. It’s a peaceful one. It’s an economic war between the states, and our ideas are working a lot better than theirs are. One of the ways I like to summarize this 300 page book is in just one chart which shows you that we have four large states in America; Texas, Florida, California and New York. 1 out of every 3 Americans lives in these states. So what happens in these states matters a huge amount in terms of how the country as a whole does. Now if you compare Texas, Florida versus California and New York, I’m not saying red as Republican blue is Democrat bad. It’s the policies that matter. What is the income tax rate in Texas and Florida? Zero, you all know that. Anybody know what the highest rate in California and New York is now?
In New York City it’s 13.5 percent. So those are the two highest tax places to live in the United States of America. Now there’s other differences too. Texas and Florida happen to be right-to-work states. California and New York are forced union states. One of the things we find in our research is this makes a huge difference.
If I were to advise a governor, and he or she were to say what is the most important thing we can do to bring jobs to our state? There’s no question. The single most important thing today is for every state to become right to work. Did you all see, when you flew into Charleston, did you all see the Boeing, that huge Boeing plant? It’s right next to the airport. They have something like 5 or 6,000 workers here that used to be in Seattle, Washington.
Why did they move? They moved because South Carolina is a right to work state, Washington is not a right to work state. So we’re seeing these affects very clearly. There’s all sorts of other factors. Texas and Florida allow drilling. California and New York don’t allow it. Texas and Florida don’t have super minimum wage rates. California and New York do. And so, you see the results here that for every job that was created in California and New York over the last 15 years, Texas and Florida created three to four jobs. That’s a huge difference, right? That’s a huge difference. If you’re a liberal, you have a hard time explaining this. How do you explain this? I thought your ideas worked so well. I thought your ideas created so much prosperity.
Now I don’t know if any of you were out at Freedom Fest this summer. That’s this big conference they have. I debated Paul Krugman, the left wing economist. I showed him this chart in the debate, and I said Paul, you got to explain yourself. So he gets up on the stage. He’s a very arrogant guy, and he said, Steve there’s a very simple explanation for this, and it’s not too surprising with your pea-sized brain you don’t understand this. He said the reason people are moving from the north to the south is because of the weather.
Because of the weather. Now look there’s some truth to that, obviously. I mean many of you live in Florida. You live in Florida because of the weather and many of you are Californians. If you had to live in a place like Cleveland, Ohio or Peoria, Illinois or Rochester, New York, or you could move to Myrtle Beach, South Carolina. Yes, weather matters but then I just I really zinged him. I said well, Paul that’s a really interesting observation, and I don’t have a PhD in economics. I only have a master’s. I don’t teach at MIT, and I don’t have a Nobel Prize in economics, but there’s something that sure I can’t figure out by this. I said if the explanation of all this is because of the weather, then please explain to me why people are leaving San Diego and going to Houston, right? ‘Cause nobody moves from San Diego to Houston for the weather.
The point is that there, and by the way, the do you know what state over the last 5 years has had the most in migration in percentage terms? North Dakota. Nobody goes to North Dakota for the weather. So this is not weather related. It’s related to policy. Policy does matter. The point of this is very simple. If we want to make America strong in economic, what is rebuild the American economy, the goal is to make America look less like New York and more like Texas. And if you want to see why, I’m going to show you this. Some of you have seen this chart. I show this every speech I give, so I apologize if you’re seen it before. This is Texas versus the rest of the country. And what this is telling you, this is an amazing finding that over the 7 year period from 2007 through the end of 2013, the State of Texas, the Lone Star State, created more jobs than the other 49 states combined. That’s an amazing statistic.
This is a rating of the states that Laffer and I do every year. We’ve done this for 8 years for ALEC, and these are the states where we think based on about 50 variables which states we think will have the most growth and which states will have the least. And I don’t know if there’s anybody here from Utah, but Utah, we’ve done this 8 years in row, and Utah has consistently come out No. 1. So this is a statistic, a very pro-enterprise state, North Dakota too. Indiana’s an interesting one. When we started our thing, when we started this, 7 years ago, Indiana was ranted 26, and now they’re ranked third. What does this tell you? Leadership matters a lot.
Think of the two governors that you had in Indiana over the last 10 years. First, you had Mitch Daniels who was amazing, and now you have Mike Ponce, and they had made the Hoosier State a real growth state. Let me just make one other point about – oh, let me just show you the bottom states there because these states have just been stuck there in a rut for 10 years. New Jersey, Connecticut, Minnesota, Vermont, New York, things just don’t get a lot worse than they are there, and these are states where the politicians just don’t have their tray tables in an upright and locked position when it comes to economic growth. They don’t understand the mechanism to create growth.
Oh, one other quick thing about Connecticut, and I meant to say this at the outset. Larry Kudlow, who is not there today, is going to run for the United States Senate in the State of Connecticut. He needs our support. We are going to nationalize this race. Blumenthal who he’s running against has voted every single Obama initiative. He voted for the ARANA initiative. We are going to make Blumenthal. We’re gonna put him on the stage, let the American people see what he’s done, and we’re gonna beat him in a blue state of Connecticut, and that’s gonna be a great victory and one of the most important ones of the year.
I wanted to mention is sometimes our movement is too dower and too dire, and we think, oh my god we’re losing. We are not losing. We’re losing in Washington, but we’re winning big time in the states. There’s just no question about. We’re winning in the states, and if you want evidence for that, when we started doing these economic outlook things and Laffer and I have been like pied pipers, and I think we’ve been to 46 state capitols in the last 10 years, when we started this there are now three states that are right to work that were not right to work 5 years ago. Do you know what state are, which states are those?
Indiana, Michigan and Wisconsin. Now those are the states in the cradle of unionism, right? If we can become right to work in those three states, we can do this all over the country, and I think that’s gonna happen very soon. We’re winning in the states. By the way, Nevada, and I don’t know if any of you saw Nevada just last year about 3 or 4, I’m sorry about 3 or 4 months ago, just passed the first statewide voucher program for kids. So we’re winning. We’re winning these fights all over the place, okay.
So what’s the most important thing we can do for the economy right now? I think it is tapping into this energy revolution that’s going on and I listened to that amazing speech by the general last night. Wasn’t that an incredible talk the general gave last night? And all of the things he was talking about as he was going on about all of these threats we face in the world, what was going through my mind is how do we stop these people? How do we stop these evil people who are trying to destroy us?
It’s so obvious, at least from an economic standpoint, how we can try to take money away from these people, and that is to develop our own energy resources? I mean, it’s so obvious that we should do this. And President Obama, you saw what happened on Friday, President Obama announced that he’s not gonna build the Keystone pipeline. That’s craziness, that’s insane. Why wouldn’t we build a project that will create to 8 to 10,000 jobs for, and, by the way, those are union jobs, they pay, 50, 60, 80 sometimes $100,000.00 a year for welders and pipefitters and trucks and electricians. They say they care about these people, but they don’t want to build this project.
This will obviously facilitate our developing our own energy resource, and President Obama says no. And what’s so scary about this is that we are now in the midst of an incredible energy boom that is so under appreciated by almost all Americans because it happens overnight so rapidly, but this red line, you’re seeing there, is all non‑farm employment in the United States. And the blue line is what’s happened in the oil and gas industry. That’s amazing. Isn’t it? Look at that. That means to say that every on balance and from 2009 through 2013 a net every new job that was created in the US economy was due to the oil and gas industry which is ironic, right? Because this is the industry that Barack Obama despises the most. These are the people that reelected Barack Obama unfortunately. Without the fracking boom and the shale, oil and gas boom, there’s no way Barack Obama would have ever been reelected.
The point of this is that we are just at the very beginning stages of this. I spent a lot of time with the geologists who are doing this stuff. I’ve been to North Dakota. I’ve been to Oklahoma, Texas where North Dakota has quadrupled its production of oil. Texas tripled it in the last 7 years. United States, as a whole, we’re up 90 percent in 7 years with our own gas production. And it’s not as if when you go to the Bakken and Shale in North Dakota or here on the east coast if you go to these states like West Virginia and Pennsylvania and Ohio that are producing huge amounts of natural gas through the Marcellus shale, it’s not if that oil and gas all of sudden just appeared. That oil and gas has been there for hundreds of thousands of years. What this is a story of is incredible American ingenuity and know how. That we finally after hundreds of years, finally cracked the code and figured out how to get at this stuff, and the reason they’ve done this is because of technology it’s the horizontal drilling where they do it 2 miles deep in the ground and out 2 miles in any direction, and then, of course, fracking, where they’re basically able to crack through that shale rock and get at this oil and gas. What a story.
Now I was giving a talk, not long ago, in Florida actually, to the valedictorians of the high schools, and so there was something like 60 kids in this room, and they were all incredibly efficient, I mean, impressive, and they were incredibly smart, and really, I really liked these kids. Well dressed, all in sport coats and ties and eager to learn. And I remember I showed them this graphic, and I said look at this. Isn’t this amazing? Look what’s happening in America. And I said, and this is because it’s happening because of fracking. And all of sudden there’s frowns come on these kids’ face. And I went wow. I said, wait a minute. It took be me aback. And I said, wait a minute. Let me just do a little quiz of you in this room. How many of you kids think fracking is a good thing? Five of them raised their hands. How many of you think fracking is a bad thing? Fifty of them raised their hands. What kind of propaganda campaign is coming on this country? Well one of the greatest technological breakthroughs in the history of the human race, and these kids are being taught it’s a bad thing. That’d be like saying you’re against a cure for cancer, right?
I mean, so we’re up against an incredible propaganda campaign here, but this is amazing, and the great part of this is this is just the start of this. And if we get this right, I said this 3 years ago at the conference that we had at the Breakers, and I’m gonna amend what I said 3 years ago, ‘cause many of you may recall 3 years ago I said if we get this right, within 5 years the United States of America will be energy independent. That’s certainly true, and when I said it 3 years ago it was a little bit surprising. Now it’s not surprising at all. I’m gonna amend this by saying not only can be in 5 years energy independent, if we get this right, if we elect a president who wants this stuff to happen, the United States of America will be the energy dominant country in the world, the energy dominant country in the world. And that can happen almost overnight. So that’s a really cool story, and we just got to stick with this.
Now people, here’s the windfall from this. Not only we create a huge amount of jobs in the oil and gas industry, but if you wanna see the bounty to the rest of the country, look at what has happened to the price of oil and gas at the pump, so this is the oil price that was a $115.00 barrel a year and a half ago. Today it’s at $46.00, $47.00 a barrel. That’s a 60 percent decline. Now for the oil and gas industry, that’s not too good, but guess what, they’re figuring out how a way to make money at even $46.00 a barrel. But think of what this means for the rest. Energy is the master resource, right? It is part of everything that we produce. So when the price of energy falls, and, by the way, most people on Wall Street got this whole story wrong, and they think of falling oil price is bad for America. No, no. We want the price of oil and gas to go to zero, right? We want this stuff to be free. As this price goes down, what it means is that for American every other American industry it’s a huge, huge gain. So we’re seeing a manufacturing resonance in America. Partly because guess what country in the world has the lowest electricity prices today? We do. That’s a huge competitive advantage. The Left loves to talk about how much they care about poor people. When the price of energy falls, that’s like a tax cut for the American consumer, right? So I estimate that this fall in energy prices has been about $100 billion a year cut, a $100 billion a year tax cut for American consumers. Every time the price of gasoline falls by one penny at the pump, it puts a billion dollars into the hands of American consumers that they can spend on other things. So this is a huge plus for the economy.
Now the only last thing I’ll say about this is that I do believe that we are up against a left wing kind of network that is suffering from what I call climate change derangement syndrome. I don’t want to offend anybody. I know people disagree on this, but I’m just gonna say it. I think global warming is the greatest scam of the last 100 years. I mean, these people are making this stuff up. The reason I say this, is I wrote a column about a year ago when we had a big storm out in Virginia, where I live, and so our electricity went out, and so, somebody may have read this. I wrote this column in The Wall Street Journal about what happened when our electricity went out, and I tell the story of my two teenaged kids who at first oh, this is cool. We’ll be able to build fires and all this stuff, and what happened was after about 48 hours, they were literally pulling their hairs out. They couldn’t figure out how people ever even survived without electric power. My friend, Charlie, I think in the back there, we’ve had all these discussions about how do we win back millennials. How do we get millennials to understand the stuff we’re talking about? And I finally came up with the idea. Let’s just get rid of electricity for a week. Seriously. Turn out the lights for a week, and let’s see what these millennials think when they’re iPads don’t work or their iPods don’t work and their VCRs. When that stuff doesn’t work, they’re gonna be, they think that somehow we’re gonna power all this stuff with windmills. Really. I mean, this is ridiculous. We have an $18 trillion industrial economy. We are not going to power that $18 trillion economy with windmills, right? I mean, there’s an old saying that you can make windmills with steel, but you can’t make steel with windmills?
Now think about this from a more sinister point of view. If you wanted to, I’m not a conspiratorialist, but it you wanted to wreck the American economy, if you wanted to deindustrialize this economy, what’s the best way to do it? Raise the price of energy, right? In fact, we have a book that’s coming out in 6 months called Fueling Freedom about this revolution that’s going on in the industry. And one of the points that we make, in the book, is if you go back to the industrial revolution, Jonah Goldberg talked a little bit about this yesterday about how we’re all born naked with nothing. What caused this burst of growth? What caused the progress and prosperity that we’ve seen in the western world over the last 250 years? It’s obviously, the industrial revolution. Well what caused the industrial revolution? As you kind of do your studying about the industrial revolution, it wasn’t just a story of machinery and equipment and so on that obviously, made production much more efficient. What made that possible? It was fossil fuels. So the industrial revolution is really an energy story, and what these folks are saying, is let’s go back to pre‑industrial era energy.
I’m gonna make one last point, and then I’m gonna open it up to questions from you all. I wanna show you one other chart in terms of easy things that we could do to make the economy grow faster. By the way, I’ll just show this ‘cause this is. You can’t see that, so. What happened? Anyway, I don’t know if you can see this very well, but this is the tax system and why we have to cut our corporate tax, and for some reason you can’t see this very well, but there’s a parallel line that goes at the top of this that’s the US corporate tax rate of 30 percent. We’re at about 36 percent when you include state and local taxes. The red bars which you can’t quite see, but you can see the tail end of these, those are the average rates of the rest of the world, the countries that we are competing with, and what is interesting about this story is that those red lines keep coming down and down and down. Year after year, after year, the average corporate tax rate of the countries that we’re competing with keeps falling. We have not cut our corporate tax rate since Ronald Reagan left office in 1988. So for 25 years, we’ve had no progress. The rest of the world keeps cutting and cutting. In fact, the rest of the world is using Reaganomics, right? They’re cutting their tax rates to become more competitive. So much so that today, the average tax rate in the rest of world is 20 to 25 percent. We’re at 37, 38 percent. So what this is telling you, ladies and gentlemen, is that every American company, every American company that competes with global competitors, is instantly put at a 15 percentage point disadvantage. This is like a tariff that we’re placing on our own goods and services. This is crazy, right? Why we would want to this? I made this point on MSNBC the other day, and they’re oh, how can you say this? I said look if anyone who supports a 37, 38 percent corporate tax rate in the United States, is unpatriotic ‘cause who are being hurt by this? American workers. And how many of you’ve been following this inversion issue? These are American companies that are leaving the United States, and they’re going to other places. So we’ve seen just in the last 9 months to a year, we’ve seen Burger King, we’ve seen Medtronics, one of our major medical companies, Pfizer is now talking about leaving, three or four others, Walgreens is talking about leaving. Why are they leaving? They’re telling us why they’re leaving. They’re leaving because the tax rate is lower in these other countries. What’s wrong with this picture? We’ve got to bring this tax rate, I’m with Larry Kudlow. If Larry were here, he’d say cut the corporate tax rate to zero. I’d take 15 percent. And, by the way, the good news is we have seven Republican candidates who want to cut the corporate tax rate to 15 percent, and I’m here to tell you if you cut that corporate tax rate from 35 to 15 percent, you’re gonna see so many jobs come into this country. We’re going to have more jobs than we’re going to have workers to fill them. So this is just a no brainer issue that is really so critical to American exceptionalism and success, and I think I’ll just end there with one final comment.
I’m really optimistic about the potential for growth of this U.S. economy if we get it right. If we make the right decision in 2016 and we get someone who is pro growth, pro worker, pro trade, pro immigration, pro tax cut, pro flat tax, if we get that person in office this American economy is really ready to explode, there’s no doubt about it. I mean I think you see it. Those 4 percent growth rates I was showing you on the rates, we could recapture that, we can have 7 or 8 years of 4 percent growth. I tell you, if you cut the corporate tax rate that is going to increase growth by a half a percentage point right there and then just two things on energy. If you basically allow drilling on federal lands, because 95 percent of the drilling has been on private lands because Obama won’t allow drilling on federal lands, and I’m not talking about Yosemite and Yellowstone, I’m talking about forest lands that aren’t being used for anything. And then the second thing that’s really important related to this is if we allow the exporting of American oil and gas. I don’t know how many of you are aware of this but there’s a 1974 law, a 40-year-old law that says that United States manufacturers and producers of energy aren’t allowed to export this out of their country. Now wait a minute, we’re going to be soon producing more than we’re using, we’re going to need to be able to export this stuff. If you do that you could increase GDP by about $100 billion right there. We can do this, we need new leadership and I’ll say this because it’s like the last line I always say in every speech, the single most important thing for America, the single most important thing is we all have to work diligently and non-stop to make sure that she does not become President in 2016. Thank you very much.
Audience Member: I’m wondering if any of the current people running for President have contacted you or Forbes for advice and also I wanted to know if you had been able to convert any of those kids into believing that fracking was good.
Stephen Moore: On the Presidential candidates, yes, we’ve met with virtually all of them and I think we’ve have had an impact. If you look at the tax plans of the Republican Presidents they’re all really good, they’re all really good. I mean there’s all sorts of different variations on the same thing; bring the rates down as low as possible, broaden the base, get rid of the double tax on saving and investment. I’ve worked with Rand Paul, I’ve worked with Carly Fiorina, Arthur Laffer has worked really closely with Ted Cruz and with even Donald Trump. We were even able to turn Donald Trump around on taxes, he was going to raise rates and we got him to lower them. He’s got actually a pretty good tax plan. Actually the only Presidential candidate unfortunately who doesn’t have a particularly good tax plan is Marco Rubio which is too bad. We’ve got to work on Rubio to get a good plan because Marco is so good on everything else. But his tax plan is probably the worst of them all.
And on fracking by the way, I think we can convince young people of this, that this is about jobs, this is about helping the poor, it’s about making America number one again. They just have to learn the argument. By the way one thing about this I think you call know this but what country in the world, they’ve got this big thing going on right now in Paris, they’ve got these accords going on on climate change and as these accords are going on, first of all what country of all the industrialized countries has reduced its carbon emissions the most? The United States has. That’s shocking, right? We didn’t pass the Kyoto Treaty, we didn’t do cap and trade, we didn’t do all these other dingbat things that these European countries are doing, how did we get to reduce our carbon emissions? Because we’re doing fracking. And guess what? When we can do fracking what does that mean? What are we getting a lot of? Natural gas. Natural gas is a wonder fuel. It’s number one. It’s the greatest fuel ever invented. Natural gas is cheap, it’s abundant, it’s made in America and it’s clean burning. Why would the left be against this? I think it’s because they’re against anything that works, quite frankly. So yeah, I think we can win that.
Audience Member: I wanted to know, I have a lot of friends who ware very liberal who support Obama who support Hillary, I know, they’re very old friends of mine, and most of them when I say that the economic policies that have been pursued by Obama have really destroyed the economy and they’re doing terribly and the answer always is and this relates to Bernenke also, that without all of these things it would be much worse, we would be in a depression like the 1930s and of course you can’t prove against it or for it but that’s what they say.
Stephen Moore: You can never prove a counter factual. I get that all the time myself and you’re right, Bernenke said that. I think I have a chart, unfortunately I don’t have it but here’s why they are wrong. First of all if you just compare, we’ve had post-World War II recessions, some have been worse than others. The one we had in 2008 and ‘09 was horrible but it wasn’t the worst. I disagree with Obama that this was the worst. No, the worst recession the American economy had was in the 1970s. Anybody remember the 1970s? I mean the 1970s were like a decade long recession. If you look at what happened to stock failure, and I’m going to show you something, it’s kind of amazing, some of you have seen this chart but I want to show it to you. Here it is. So anyway if you look at what happened to stock values from 1968 to 1982 and the 15 years before Ronald Regan became President and real term stocks lost 62 percent of their value for 15 years. That’s the worst bear market we ever had since the Great Depression. What Obama inherited was a 2-year recession, what Regan inherited was a 15-year long recession in terms of what happened. If you look at the growth rate, not just compared to Regan but the average of the last eight recoveries, Obama’s is by far the worst. How do they explain that?
And now here’s another thing to throw at their face. Barak Obama did a big famous study in his first 2 months in office, his economic advisors and they said here’s what the economy will look like if we just stay on the current path we’re on. Here’s what the economy will look like if we do this gigantic economy stimulus. Here’s the most amazing thing; if you compare those two charts with where the economy is today, amazing, we have less jobs and less growth today than Obama said we would have if we did nothing. If we did nothing. So doing nothing would have been much better than we did. There’s a great book for those of you who are students of history, there’s a great book out by James Grant called The Forgotten Depression. Have any of you heard of that book? It’s won. It’s a great book, isn’t it? And what he shows is that after World War I American suffered one of the most severe depressions in the last century and a half, the economy tanked. And you know what Warren Harding did in response to that? Nothing. Nothing. And you know what happened? We had the booming 1920s, the strongest decade ever. As Cool Hand Luke would say, sometimes nothing can be a pretty cool hand. We would have been much, much better off doing nothing than all these things we’ve done.
And here’s one last thing, you know what the national debt is right now today? Did you see this? On Wednesday, because of these Republicans who betrayed us, right? The Republican Party betrayed us with the budget deal that they made with Democrats; how many of you agree with that? These guys betrayed us with what they did. This is one of the worst budget deals we have seen. We elected these Republicans to be fiscal conservatives, we increased the budget by $400 billion in 2 years. I don’t even know why I brought that up but under Obama when he entered office the national debt was a little under 10 trillion, when he leaves office we will have almost $20 trillion in debt. Who’s going to pay for that? Ask your liberal friends; who’s going to pay for this $10 trillion in debt? By the way, you and I aren’t going to pay it, it’s our kids and our grandkids. I thought they cared about the children. Last one?
Audience Member: So continuing on employment, every month we read that there’s 100,000 more jobs or 200,000 more jobs and yet the rules seem to indicate that many of these jobs are part time jobs. What I can’t figure out is how many jobs actually have grown into full times jobs and how many people are working two jobs which is counting as two jobs? In other words are we really losing full time jobs? That’s my question and how many? Because I can’t find out anywhere what the numbers are.
Why don’t you ask yours and he can answer both.
Question about incentives for innovation; if you took away the incentive that Obama provided would fracking and horizontal drilling been developed and would venture capital come out of the woodwork to fund it?
I didn’t understand the first part of your question, you were saying if what?
If you took away the incentives that the Obama administration policies did.
What incentives? I don’t know what you’re talking about.
Well, they raised the cost of energy.
Oh right, right, okay. So let me deal with this first question first. Yeah, you see a bigger increase in part time employment in the data, I mean there is just no question about it. Part time employment has increased a lot. And I was at a conference not long ago with the Restaurant Industry Association and I’ll never forget this, after I was done with my talk it was talking about how terrible Obamacare was and these two guys came up to me and they said, one of them owns Burger Kings and the other guy owns Wendy’s restaurants and you know how in every town the Burger Kings and the Wendy’s are across the street from each other. So he said to me, these guys said to me, you don’t have any idea how bad it is. To get around the 29-hour work rule you know what they’re doing? The worker is working 20 hours a week at the Burger King and then they’re going across the street and working 20 hours a week at the Wendy’s and vice versa. And so incentives do matter. One thing on this employment picture that I think we as a movement have to understand, a severe problem with our economy.. There are a lot of jobs.
When I talk to businesses right now you know what they say one of their biggest problems is? Finding workers, findings workers. I talked to the trucking association about 2 years ago and I said what’s your biggest problem? And they said finding truck drivers. I said finding truck drivers? We have 15 million unemployed people in this country and you can’t find people to drive the trucks? You know what happened? You want to see how incentives matter? So the trucking industry is incredible cyclical, right? So during the good times trucking jobs went way up, when we hit the recession they went way down so they laid off hundreds of thousands of truckers.
Guess what all those truckers did when they lost their jobs? They went on unemployment compensation insurance, they go unemployment benefits. You know what? Under Obama we gave workers 2 years of benefits, those truckers would not go back to work until every single month of those benefits, so we actually made the unemployment problem worse with those benefits. But the other point I was going to make is we have a big problem in this country with respect to skills, we just do.
Also too many kids are going to college and they’re getting jobs in psychology and sociology and ethnic studies and things that are worthless in the 21st Century economy. They’re paying $200,000.00 for a worthless piece of paper. What we have to get back to in this country is teaching American skills. We need carpenters, we need electricians, we need pipefitters, we need welders, we need mechanics, we need engineers, people who know how to do something. And if you’re good at it you’re going to make a lot of money. You might start if you’re a mechanic earning 40, $50,000.00 a year after 3 years you’re making $70,000.00 and if you’re really good at it you’re making 80 and then you start your own business. But we’re telling our kids not to go into those fields. I think we do a real disservice. Do you agree with me? I think it’s a real disservice to these kids, they’re not learning stuff. They should put shop in; remember when we were in high school? How many of you took a shop class? They don’t even have that anymore. They don’t have that kind of stuff, they’re too busy learning about how horrible America is as a country.
Now your question had to do with the energy thing, so no question about it, the big spike up in prices caused a huge increase in exploration and it was one of the incentives that led to, as we all know necessity is the mother of invention. Right? Invention comes when you need something and we had huge prices of oil and gas and that led to this huge exploration that was going on. It was not government by the way. And in fact the most amazing thing about the fracking and the shale oil gas revolution, it wasn’t government, it wasn’t even the big energy companies, it wasn’t Chevron and Exxon and Mobil that did this, it was the small wildcatters that went out there. Harold Hamm who owns one of the oil and I did an interview with him at The Wall Street Journal, I mean this is a guy, another great American story. He grew up the 12th of 13 kids in a little tiny town in Oklahoma, they did not have electricity, they didn’t even have plumbing in their house. He is now the 12th richest person in the world because he’s figured out how to do fracking and when everybody said it couldn’t be done he went there and did it. I mean he’s a great American hero. And since when do we tear down rich people in this country? Rich people who create enterprise are people we should salute not tear down. The great thing about the fracking resolution is they are discovering how they can make money. This is getting better and better, the technology is getting better all the time and we’re way ahead of the rest of the world on this, that’s the thing. The rest of the world still hasn’t cracked the code about how to do fracking. We ought to move full charge ahead.
I’ll just end with this, imagine; if you think this energy revolution is big right now, imagine, Mike, if we had a President who wanted to do this. We’re going to be the Saudi Arabia of oil, gas and coal. Thank you very much.