The others by his wealth and dealings of minorities and women. But no matter who the democrats pick, he or she will have a formidable task beating an incumbent president running a strong economy. Right now President Trump has that going for him as we head into november. Mr. Trump is already campaigning on the countrys solid job creation for 2,205,000 jobs added in january march the fourth month in the past year we saw employment gains of more than 200,000. Hes also touting of course low unemployment with historic numbers for africanamericans and latinos. Two groups that have not giving him much support in the past. And while Economic Growth has been good, not great, economists see little threat to recession anytime in the near future. On wednesday, the federal rate serve release management january meeting showing members felt the outlook for the economy was even better than december. A new wildcard has emerged recently. The coronavirus. Its in china would spilling over into that countrys economy and having global ramifications as well. This week, apple said is feeling the ripple effects. Said revenue will fall short this quarter because iphone sales in china have been disrupted. Walmart will see operations affected as well. In fact, Financial Data says one third of Financial Companies that had fourthquarter earnings through midfebruary use the term coronavirus and the cause. 205 of those had their businesses are being impacted. So is the u. S. Economy doing as well as the president is telling us or could do coronavirus or the election, or indeed anything else bring it tumbling down . Here to discuss that and much more is economist his resume includes working with the federal reserve, International Monetary funds, the world bank, and the president s council of economic advisers. Hes is currently the professor of economics and ceo thank you for joining us. Lets start with this outlook for the economy. You once famously earned the nickname doctor doom for your derek outlook and you are certainly out ahead of the financial crash and in 20,072,008. The u. S. Economy right now it looks fair, steady growth, unemployment great lowest in 50 years gains arising Financial Markets looking optimistic and confident. What could possibly gurob with that picture . Several things could go wrong, you are right absently the baseline is solid Economic Growth. The first of these is the coronavirus, we dont know yet whether its going to be contained within china or not. But i would say that the markets are busier than they would be of vshaped with the First Quarter going to be shortly down in china and may be slow down the rest of the world. But the production of the Second Quarter, i feel in the days. [inaudible] this thing might be more than the firstquarter effects. Secondly because the Chinese Government is going to be 6 is this is my tracking of the numbers even in this scenario growth in china would be at best 4 . To go from 64 is a reduction in chinese goods and china accounts for nearly two thirds of the goods so this trade competency and others can be significant. Im not forgetting of course the u. S. Recession but think growth in the u. S. And especially europe may surprise on the downside. Gerry s gonna have some sublime Global Supply chains like apples and others, but are we just get a snap back from that as soon as this is over . Firstorder secondquarter . Or would we expect an immediate recovery and no not Significant Impact the company . The answer depends on how long this contagion spreads within china and globally. But even in the baseline which things are going to improve by the end of this quarter, i think the damage done to china cannot grow more than 4 this year. Even if there is a rebound after this firstquarter shock. If thats the case, then shiny is only 4 growth so trade and other channels is going to be slow. Theres this lowdown saying u. S. Having 2 growth and they could have 1 or something slightly lower than that. Theres growth in the Second Quarter so thats a wash. Has a meaningful impact of the global economy. Gerry what about broader global relationships weve seen the trade and lets talk about phase ii but nobodys gonna think thats likely. Have we seen kind of the worst in terms of the effect on confidence of that trade work . Or do thing theres more to come . With them buying more of our goods, that is a broader issue for china with sdi investments, financial links is actually escalating look at what is happening with 5g and therefore we are in the middle of a process between u. S. And china. With pete globalization the be of Global Supply chains and we need to think. Gerry is that a longterm secular trend with d globalization . Yes we look at d globalization because we are looking at this between u. S. And china the Global Driver early between these two powers will lead to economy. And it goes towards policy everybody wants to protect their own firms and workers. They have more inward policies more protection, this is going to be like a negative supply shock in the global economy. It gradually over time. Gerry and it will suppress gross over the long term . The obviously reduces trade and economic activity. Just quickly, would gotta take a break and i want to talk was of the geopolitical risks. Are there any specific at risks in the u. S. Economy . We havent seen the imbalances it sometimes the economies and garlic this for almost 11 years. This stage of expanse and you see the housing market, Financial Markets were not really seeing any of that. Are you seeing any domestic pressures that could derail customer. I have seen them theres a a buildup that of the corporate sector where they leverage loans and liens to highgrade as opposed to writing too low. They are increasing profit margin but there could be profit margin compression with hi, not because asserting good but rather its becoming larger and larger on the adjusted basis are totally out of line. Any shock could lead to a correction first of all. Gerry but anything like 2007 or 2008 . Not yet but a few more years of this there is more housing and mortgages in banks and this time around its going to be corporate banks and other banks that lend to these corporates. Could be a crisis in a couple of years. Gerry print take a quick break him away come back were going to talk about the political picture and your thoughts on iran and the kind of threat that country may pose going into the region but for the rest the worldly United States. Stay with us. 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Only preservision areds2 contains the exact nutrient formula recommended by the National Eye Institute to help reduce the risk of moderate to advanced amd progression. Its how i see my life. Because its my vision. Preservision. Gerry my guest is economist nouriel roubini. I want to talk about the challenges we face you know that country very well, iran. There is a general view that after the killing of Qassem Soleimani by the u. S. Last month, iran is back in its box and we may be seeing some reduction and irans power and the threat it poses. I think you take a very different view, tells we think. Let me talk about the global level go into iran. For some others arrival between you asked and not just iran the other three that represent power its iran, china, and russia and north korea. Thats going to create a lot of attention. You see china and others, the issue with iran is the u. S. Was to contain iran or have a regime change. In the regime wants to survive. He had selected they are out of power its another four years of economic pressure and with change. Its baa really think its that much of a threat of President Trump stays in power . Yes the regime wants to survive. Now people believe that after the killing of Qassem Soleimani and the attack because if the iranians wanted a regime change in the United States they have to call chaos in the middle east, theres a spike in oil prices theres a crash of the u. S. Stock market, we go into recession and then trump was his election. So of course they have to pay a price, if they want to bomb the hell out of them to contain but its not going to lead to a regime change in iran letters 1 million troops in boots on the ground invading iran its not going to collapse. Even bombing the hell out of it the regime is going to rally to support the regime. So unfortunately they have to pay the huge cost, but they want regime change so. Gerry how are they gonna do that customer terrorism warfare question mark. Attacks against israel and others unleashing a mosque and bullock, cast on iraq, theyre going to create a regional conflict by spring and summer. If they escalate the israelis are going to want to attack iran. They cannot do that alone they need the support of the United States. That conflict is the region becomes actually glover and the u. S. Get sucked in. And then the markets and the policies will blame trump. Because the war with this oil prices go to the roof, stock market crashes he will be blamed for. Gerry doesnt history suggested theres a war scenario and terrorism theres kinda rally around the flag effect in this country. Doesnt that increase President Trumps prospects . Usually though war that leads to that has consequence i khamenei invade afghanistan. Look at three major shocks in the middle east. You have 73 war and then you had 79, 74 and five, and then you have the second shock with iranian revolution and 79, 82 carter loses to reagan. And then you have the invasion of current kuwait, spike in oil prices. Then by 92 and bush moves into claimant rates are three times when youve had a shock in the middle east is a spike in oil prices crashing the market and the economy, weve had regime change in the United States. Iran knows if negative for the fourth time. Be eight but this time the u. S. Is much less dependent on the middle east for oil. They are an exporter of oil would have the same effect even if oil went 220. Barrel . First about even if its a hundred and 20 cannot be at 60. The prices global and 10 below. To the price goes up normally. Second point when the producer of oil is going to make a fortune in terms of profit and revenue you will have consumers of oil, guys with prizes of 67 a gallon, utility prices increases a spike in the middle and you have all you have the u. S. It as a shock those losers are spending less. Those who are benefiting will save it and therefore its going to be hard on the u. S. Economy. You have a severe economic shock even United States. Gerry will become back i want to talk more about the u. S. Economy and election coming up here. And if we have a little more time well talk about the state of capitalism. Stay with us. Do you recall, not long ago we would walk on the sidewalk all around the wind blows we would only hold on to let go blow a kiss into the sun we need someone to lean on blow a kiss into the sun all we needed somebody to lean on the new xc90 plugin hybrid electric. Xc90. Recharged. [ fastpaced drumming ] its our most dangerous addiction. And to get the whole world clean . That takes a lot more than an alternative. So we took our worst vice, and turned it into the dna for a better system. Materials made from recycled plastic woven and molded into all the things we consume. We created bionic and put the word out with godaddy. What will you change . Make the world you want. Gerry i am with tran ten. If you are right there is significant tension in the middle east we have oils prices spike, we have a significant trouble here will president Bernie Sanders what would that mean for the economy . People worry about Bernie Sanders on the economy and he certainly very progressive. The reality is even if democrats take control of the senator, the immediate senator will be very much centered than Bernie Sanders. 2 oil tax big deal. Investors are paying 220 to hedge funds to manage their money so one pretentious tax is not a problem it will be acceptable. The point is that the policy, the actual policy is to be very different than one of President Biden or bloomberg because theyre not going to the morality. Was corporate taxation that arise, taxing the rich and wealthy. Gerry see or think in more regulation. Theres a lot of president can do is we have seen with President Trump he can do a lot with executive action that would presumably worry most people business wouldnt it . Yes to the stock market is going to take a hit to get stronger the economy is going to go around 2 i dont think youre going to have radical changes with medicare for all. Even what is a longterm objective, its not can be passed by congress but its good to do question record and expand obamacare for those needing coverage. So the policy on sanders on healthcare is the same of biden. Same practice is they Want Congress to pass. That will be much more moderate the impact on economies and be gradual. They do care more about the environment were i dont think that Bernie Sanders is a comic hes a social democrat he is to the right wing of Boris Johnson by the sand of europe but by the standards of United States is a leftist. But not really radical. Gerry im sure you would agree theres truth to get but that he is radical by american standards. What is to say about this country about confidence in the system, confidence and capitalism that so many Young Americans seem to support Bernie Sanders and actually save you asked them they would like to give socialism a try, they think capitalism is failing we think about that . There are trade of trade, migration, technology, those are winners and winners and losers many of them work for the democrats but for example trump a run as a populist saying the working class of america the white collar blue color being hurt. Since a good chunk of america people on the right or left that are left behind. They voted for trump because he pretends to be a populist. Its essentially governors and Bernie Sanders has some of the same things. With the workers and so on. So in some sense public is the right public is love its not very different. Gerry very quickly after wrap up you say that but real wages are rising at a faster rate than they have in a while. Skewed particularly towards the lower incomes. President trump may himself be but he is creating benefits. Is growing okay its not democratic republican a lot of people are left behind. There people dying with the surge of suicide depression, obesity, they are not measured by the 2 growth. As an economic problem its not the democratic problem or republican problem somebody has to fix them. Spee10 thank you very much indeed. Up next at tip from me who came to manahan to do years ago and made it much better. Stay with us. Wherever we want to go, autosave your way there with chase. Chase. Make more of whats yours. The business of hard work. 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Gerry with the race to be president seemingly dominated by men and women in their 70s, id like to close this week with a few words about a man who had already reached adulthood before any of those candidates were even born. My father celebrated his 100th birthday this week. When he was born a small town Woodrow Wilson was the president of the United States. We think of this with good reason. Its kind of an ancient history and it is still slightly boggles the mind to think that history was the reality of my fathers early life. I have often asked some people learn of my dads advanced age, whats his secret . Good genes surely i hope so . A life i think lived according to the simplest principle. Everything in moderation. While we may want to know the secret to a long life, i think we should devote more times to see what makes a good life, whatever time span we may be allotted. Here, i think i know my father secret. He came from an age when life was defined mostly by beauty, not by entitlement. The primary animating principle of his own life has been devotion, not to himself but the family, god, and country. In an era thats been scarred by broken families, he has been a loyal husband and father for many, many decades. In an era when the culture seems to have its highest accolades for bravery to those who make speeches about their own rights, its worth remembering the kind of courage my father in so many of his generation showed. He volunteers to join the british army days before the Second World War and spent the next six and half years in uniform. And an error when religion is increasingly a curiosity for many people, my father lived his life with an unshakable commitment to faith in god. He is truly, and has been a man for all of the seasons. First century and now more. , happy birthday dad. Thats all for us this week be sure to follow me on twitter, facebook an instagram. I will be back here next week with more indepth interviews right here on the wall street journal at large. Thank you very much for joining us and have a great weekend. Jack welcome to barrons roundtable of the sharpest minds on wall street make to get behind the headlines and prepare you for the week ahead. I am jack otter. We begin
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