Oil prices soared and the stock market soared to new highs after OPEC agreed on its first oil output cuts since 2008, but veteran financial guru Larry Kudlow, who served as the Donald Trump campaign's senior economic adviser, tells Newsmax TV that the cartel's glory days have passed.
“I don't care what they (OPEC) do," Kudlow told Steve Malzberg on "America Talks Live." "Our oil and fracking or natural gas makes the United States the most important oil producer and if the price goes up, you'll see all that fracking come back online, supply will increase, the prices will be relatively stable,” he said.
OPEC forged the deal after Saudi Arabia accepted "a big hit" on its production and dropped its demand on arch-rival Iran to slash output. Non-OPEC Russia will also join output reductions for the first time in 15 years to help the Organization of the Petroleum Exporting Countries prop up oil prices. As a result, the U.S. stock market soared to record highs and oil prices surged.
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Brent crude jumped over 9 percent to more than $50 a barrel as Riyadh reached a compromise with Iran and after fast-growing producer Iraq also agreed to curtail its booming output.
But it doesn't really matter much anymore, said Kudlow, who under President Ronald Reagan was the associate director for economics and planning, Office of Management and Budget, Executive Office of the President, where he was engaged in the development of the administration’s economic and budget policy.
“I don't care about OPEC," Kudlow, a Newsmax Finance Insider and CNBC senior contributor, said, calling the Organization of the Petroleum Exporting Countries oil cartel "yesterday's news."
“I say the swing producer is the United States. OPEC is dead,” said Kudlow — host of "The Larry Kudlow Show" and author of "JFK and the Reagan Revolution: A Secret History of American Prosperity," written with Brian Domitrovic and published by Portfolio.
In a wide ranging interview, Kudlow:
- Said he knew Trump would turn over daily control of his business to his children. “It's the sensible thing to do. I mean I've never doubted that he would do that. It was just (critics) attacking him and nitpicking him and ankle-biting him for this stuff. The guy built a fabulous business and his family can run that business and they'll figure out the legal ways to separate him so he can run the country, grow the country, create jobs, give his supporters security, and trash and destroy ISIS.”
- Applauded Trump’s business prowess to cut a deal to United Technologies Corp. to keep close to 1,000 jobs at its Carrier Corp. air conditioner plant in Indianapolis, roughly halving the number of U.S. jobs it planned to move to Mexico. The deal, announced by Carrier on Twitter late on Tuesday, is a victory for Trump, who campaigned hard on keeping jobs in the United States and specifically criticized Carrier for shipping jobs overseas, messages which appealed to blue-collar workers in the Midwest. “I think the key point here is that Trump's tax reforms, particularly his business tax reforms, are going to make it so hospitable to stay in the United States that we won't have to worry about companies leaving or taking their cash oversees.”
- Touted Trump’s plan to slash the corporate income tax rate. “The key point here is to provide business incentives to stay home, that's the key point, and grow the American economy with more workers and better wages. That's just got to be the bottom line," he said. "We won't need inversions, we won't have to go to Ireland because we'll have a 15 percent tax rate (from the current 35 percent). It doesn't get any better than that,” he said. "If you cut the tax, give businesses more incentives and more profits, you have full immediate cash expensing for investment, repatriate the money overseas back. Why would they leave? If we create new incentives to stay, they will stay.”
- Explained Trump is "also cutting personal tax rates to make the workers have better after-tax wages."
- Said Trump's selections of former Goldman Sachs Group Inc. partner Steven Mnuchin as the next U.S. Treasury secretary and billionaire investor Wilbur Ross as Commerce secretary will have to transform government and benefit the economy. "Both are very good men. I know Wilbur and Hilary Ross very, very well, love them to death, terrific people, great businessman. I'm sure he'll create a new culture at the Commerce Department, maybe he'll get around to a scalpel and take out about half, maybe 100 percent of it," Kudlow said. Kudlow also complimented Mnuchin. "He's first rate, first rate, absolutely, supply sider, pro-growth, and he'll do a good job at the Treasury Department."
Larry Kudlow is a senior contributor at CNBC. His new book is “JFK and the Reagan Revolution: A Secret History of American Prosperity,” written with Brian Domitrovic.
To find out more about Larry Kudlow and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com
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