Notes from 1/23/19 White House Briefing on China,Trade, Economy, Markets
January 23, 2019
Summary: A few days before Chinese Vice Premier Liu He came to Washington, I had the chance to give a private briefing to a small group of Cabinet members in the White House on the Chinese economy, markets, currency, and trade. Now that the meetings have taken place, I can write this short summary of the points I made in the briefing. On net, I am more optimistic there will be a trade deal than I was before the meeting.
It is always a treat when my phone rings and I see Larry Kudlow's name on the screen. Larry and I first met 42 years ago when he worked at Paine Webber. I had just written a book about a strange theory called rational expectations. Larry wanted to talk about what it meant for interest rates. Since then we have worked together countless times as economic forecasters, as the two kids in the White House who got work on the Reagan Economic Plan, as colleagues at Kudlow & Company, and on his CNBC show. We have been through many wars together. We agree on many things, disagree on others. And we are friends for life.
So, when Larry asked if I would be willing to come to the White House to give a private briefing to Cabinet members on the Chinese economy, the PBOC's RMB policy, trade issues, the Fed and the US economy and markets I said "are you kidding?" So, I climbed on a plane and headed East.
The timing--other than the weather in WDC--couldn't have been more perfect. Chinese Vice Premier Liu He was due to arrive in WDC the following week to see if the talks between the mid-level worker bees in Beijing the week before could be turned into a preliminary agreement before the March 1 deadline Presidents Trump/Xi discussed at the Buenos Aires G20 meetings. All the top members of our trade team would be there.
Now the ground rules. I didn't want to write about this before the meetings had concluded--check. I can tell you that there were six Cabinet members there but not who they were. I can write about the briefing points I brought to the meeting but not about their questions or comments and not about the two hours of discussion that followed.
Now the caveat. Having learned long ago that ideas stick in people's heads better than numbers I used no slides, charts or data. As a result, I had to talk 600 words a minute with gusts to 1000. I'm going to have a hard time fitting all the points into one written piece. I have decided to write this one tight, as a summary of all the points and to go into details on the ideas in a series of separate posts in the next few days. Hope you enjoy.
My three takeaways
Long ago when I was preparing to release a series of two minute radio spots on the economy I hired an old pro media coach to teach me how to get the most out of a short audio, video, or in-person time slot. One of the things she taught me was to never go into an important meeting before you have written down the three things you want people to remember when they leave. Here are my 3 things for this meeting.
JR.
China/RMB/Trade.
Far-From-Equilibrium Economics (FFE).
Dr. John