Larry Kudlow gaggled on the driveway after a TV hit. Highlights:
?Said the White House is considering financial assistance to the airlines
?Said the various White House coronavirus aid proposals already announced so far add up to $400 billion worth of stimulus and would reach at least $800 billion if a payroll tax holiday through the end of the year were approved
?Urged calm over the markets and again saw buying opportunity
?Reported that the president’s call with G7 went well and the leaders agreed to do whatever it takes
?Said the fundamentals of the economy are still strong and declined to say a recession is coming but agreed it will be challenging time though for weeks and months not years
?Floated an idea to cut taxes for companies that relocate their supply chains to the US.
Kudlow quotes from the driveway gaggle
On helping the airlines:
“We don’t see the airlines failing, but if they get into a cash crunch we’re going to try to help them.” He did not like the term “bailout,” saying it was more of a short-term liquidity issue.
He said the airlines had been in touch seeking aid, “lots of them,” and that “we’re in touch about their balance sheets and their cash flow.”
On whether the world is heading into a global recession:
“We are going to be challenged, no question about it. We have a big challenge. I’ve been saying that and I’ll continue to say it. I’m not going to label it one thing or another.”
“The fundamentals of the economy are strong,” he added, saying that GDP was on pace to grow around 3 percent in January and February.
On fiscal response to the crisis:
He emphasized that the plans already outlined by POTUS such as the funds available through the Stafford Act, deferral of income tax payments, deferral of student loan interest and purchases of oil combined with the unpaid sick leave in the House-passed bill all add up to around $400 billion, though he avoided the word stimulus. “We have roughly 400 billion in – I prefer to think of it as fiscal assistance.”
Adding a payroll tax holiday through the end of the year would boost that to at least $800 billion, he said. “We have an enormous fiscal plan.”
On the market plunge:
“This market decline’s tough. Very tough. My own view, right or wrong, better or worse, I’ve always advocated long-term investing for myself and my family and friends. … To me, when you see these big dips, these big drops, they’re buying opportunities if you’re a long term investor.”
He praised the Fed for its moves on Sunday. “I want to really support their actions, as the president is correctly concerned about liquidity and very short term cash flow issues, exactly the sorts we’re talking about here. The Fed has enormous power, enormous power. And it looks like they’re going to start using it in connection with the Treasury Department and the president and the executive branch.”
On supply chains in China:
He said one idea that he likes is 100 percent immediate write off of expenses like structures, equipment, R&D and intellectual property. “That would pay for the moving expenses of American companies based in China. Right there, that would pay for their moving expenses.”
He said it was not a formal plan. “I’m tossing it out as something we’re thinking about. I’m not here to form – the president hasn’t signed off on it. It’s something worth thinking about.”
On the G7 call:
It was a “fabulous call,” adding: “The degree of cooperation and coordination was fantastic. Everybody, basically – and I’ve seen them around the table a couple times not so fantastic – today, basically, they all want to do whatever it takes on the health side of solving the virus side and on the economic side, we just heard that from one president and prime minister after another.”
He said they would continue to meet and coordinate. “They’re not always so agreeable but they are today. It’s a wonder to see, it’s a wonder to see.”
He noted that PM Abe of Japan “mentioned how much he wanted to hold the Olympics in Tokyo, this summer. He doesn’t know if he can, but he would like to. He believes that that would be a great leadership issue for the whole world, and President Trump wished him luck on that, we’re all behind him on that.”