America: The Come Back Story

Steve Moore sheds light on the heart of the U.S. economy -- and how Obama is destroying it.

Editor’s note: Below are the video and transcript to Stephen Moore’s address at the Freedom Center’s 2014 Texas Weekend. The event took place May 2nd-4th at the Gaylord Texan Resort and Convention Center in Grapevine, Texas.

Steve Moore: So, I am upbeat, Michael. I do think that things are going to get better. I agree with Pat Caddell. I guess my message is that we are really one election away from a real economic renaissance in this country. And I feel very strongly about that. And I kind of want to walk you through this.

And I’ll start by talking – I was chatting with some people at breakfast about this. I mean, there is so much good news actually that’s going on in America that doesn’t get enough attention. It gets a lot of attention here in Texas. And I know a lot of you in this room are Texans.

But if you look at the US economy over the last six years, there is one industry that has almost literally been carrying the rest of the economy on its back. And what industry is that?

Unidentified Speaker: Oil.

Steve Moore: Yeah, the energy industry, the oil and gas industry. And this is an amazing story. And it’s not just a story about America being, you know, so richly endowed with natural resources; we are. There’s no question about it. But other countries have natural resources. This story of American renewal and energy production is really about American ingenuity, it’s about entrepreneurship, it’s about technological progress.

And by the way, it’s not the big oil companies – the Chevrons and the Exxons and the BPs – that have made this possible. These are small and medium-sized wildcatters who went out there and found this oil, the shale oil and gas, and found a way to get at these natural resources that have been there for millions of years; we just never had the technological capacity to get at it.

And, you know, many of you heard me tell many times the story about my trip about two or three years ago to North Dakota. How many of you have ever been to North Dakota, by the way? Raise your hand. About half of you have. I had never been to North Dakota. I’d been to every continental state in the United States. And I go to North Dakota, because of course North Dakota sits atop the Bakken Shale, which is the biggest oil find in North America in at least 50 years. And it’s an amazing place to go to.

You go to this little town of Williston, North Dakota, it feels like what it must’ve been like during the Gold Rush era in California. I mean, literally, it’s a town that just – bigger and bigger and bigger almost every day. And they just can’t keep up with the incredible population growth. And it’s just a stunning thing to spend time with the geologists to explain what’s happening.

By the way, you all know, right, that North Dakota has the lowest unemployment rate in the country. Right? I mean, North Dakota’s unemployment rate officially – the statistics that came out yesterday – you saw the unemployment numbers came out yesterday – they say that the unemployment rate in North Dakota is 3.1 percent. I’m here to tell you that’s a bald-faced lie. The unemployment rate is not 3.1 percent in North Dakota; it is negative. It is negative. That is to say there are about 15,000 more jobs in North Dakota than there are people to fill those jobs.

Whenever I see panhandlers in Washington, DC or New York, I say – go to North Dakota. That’s where the jobs are.


So it’s a great story. And it’s all being driven, of course, by these two incredible technologies – horizontal drilling – which all of you have heard about, where these drills now can go in any direction. And that is a huge seismic breakthrough in terms of the productivity and efficiency of our oil exploration. And the other, of course, is hydraulic fracturing.

And you know, I just have to say this. This is an amazing thing. I was giving a talk in Florida a few weeks ago to a kind of community group. And they actually had me talk to the valedictorians at the high school in the area. And these were all really impressive kids, 18- and 19-year-old kids, and really smart kids, and very inquisitive. And I was really impressed with them, about 20 kids in the room.

And we were just chatting about the things that were going on in America. And I talked a little bit about this energy revolution. And then it kind of occurred to me that they were kind of skeptical about this. And so I said to these kids – again, these are the smartest kids in the schools in Florida – I said – how many of you kids know what fracking is? They all raised their hand. And then I said – how many of you kids think that fracking is a good thing? Two of them raised their hand. Two of them. How many of you think fracking is a bad thing? Fifteen of them raised their hand.

We are losing this kind of propaganda – there is a left-wing propaganda campaign against the greatest innovation, I would argue, in 30 years, in any area. I mean, to be against fracking, to put it very simply, is like being against a cure for cancer. Right? I mean, this is a huge, huge thing.

Now, what I would say about this is a couple things – one, because of these new technologies – by the way, it’s not just happening in North Dakota. You all know it’s happening big time here in Texas. And the great story about Texas is that in the last four years, in just four years, Texas has almost tripled its oil and gas output. That’s an amazing thing to think about. It’s happening in Oklahoma. Oklahoma has doubled its oil output.

You all know about the Marcellus Shale on the East Coast. The Marcellus Shale is the biggest natural gas find in the world that we’ve had any time in the last hundred years. The Marcellus Shale, by the way, has 150 years’ worth of natural gas. One hundred fifty years. And by the way, every time they drill, they’re finding more of it.

President Obama – by the way, one thing that’s really interesting about this – if you had gone back five and six years ago, nobody saw this coming. Nobody in their right mind thought that the United States would become the number-one natural gas producer in the world. It’s a perfect example of the problem of government central planning. Because what were they all doing five and six years ago? I mean, in fact, as recently as three years ago, President Obama’s running around the country telling the American people we’re running out of oil and gas.

Ladies and gentlemen, we are not running out of natural gas and oil; we are running into it, right, in a big, big way. And by the way, nobody – I mean, even people on our side – nobody saw it coming. It was these entrepreneurs who made it happen.

Now, the cool thing about this story – we are way, way ahead of the rest of the world in these technologies. And so, it gives us a huge strategic advantage in terms of our ability to produce these natural resources.

And imagine, by the way, how big this would be, how huge this would be, if we actually had a President who wanted it to happen. Right? I mean, we have a President who is more hostile to the fossil fuels industry than any President in American history. I mean, this is a President who really hates fossil fuels. He believes that if we keep burning these fossil fuels, the oceans are going to rise, and we’re going to have hurricanes, and all these things. He really buys into that. So everything that he has done has been to try to stop this from happening.

Now, that is a tragedy. Because if we want this economy to grow – let me just show you one – got to show you this chart, because this is pretty amazing. This is the US economy, this is job production in the US over the last, oh, six or seven years. Look at this – the red line is all industries, except oil and gas. The blue line is the oil and gas industry. You know, I know some of you in the oil and gas industry – congratulations, you helped reelect Barack Obama. Because if it had not been for the oil and gas boom, there is no way that Barack – we would still be – let me put it very simply. If it were not for this boom that we’re seeing in oil and gas, we would still effectively be in a recession today. The US economy would not be growing at all.

So that’s an amazing thing to think about. I mean, it is stunning – and by the way, these are good jobs. That’s the other thing. We’re not talking about $30,000- or $40,000-a-year jobs. We’re talking about jobs that pay $70,000, $80,000, $90,000, $100,000 a year.

One of the most dastardly acts that I’ve seen in the last two or three years in politics is President Obama saying he’s not going to build the Keystone XL pipeline. I mean, this is craziness. And by the way, he’s not even a good – you know, we always say that Barack Obama is a Saul Alinskyite, you know, “Rules for Radicals?” He’s too ideological to even be an Alinskyite. I mean, Saul Alinsky would say build that pipeline, you know, get the issue behind them. But he will not do it.

And this is one of the themes that I think Republicans should really be pushing hard on. And a lot of you are instrumental opinion leaders in America. Republicans, I believe, have an incredible opportunity in the next two elections to win back the old blue-collar Reagan Democrats.

Because there is a crackup right now that is just starting to emerge in the Democratic coalition that we have to exploit. And that crackup is between the radical Greens, who fund the party – the people like Tom Steyer, and the billionaire Democrats who really don’t care about these people whose jobs they’re destroying – we need to go to the union halls, the blue-collar industrial – and I’m not talking about the teachers’ unions and the public sector unions. They’re always going to be the bedrock of the Democratic Party. I’m talking about people who actually do industrial jobs – pipefitters, teamsters, construction workers, people like that; and say – we care about your job; they don’t care about your job. We care about protecting your livelihood; they don’t.

Are you with me on that? Shouldn’t we be doing that? We should be going out and saying we’re the party that will protect your livelihood. And so it’s an important story with respect to that.

Now, let me show you another kind of interesting thing. If you look at the second panel here, what you’re looking at is the – the first one is just total production. But look at the growth in production.

And by the way, just so I’m bipartisan here – because I know this is a bipartisan – a nonpartisan group –


-- some of the craziness that’s gone on in energy policy actually started under George W. Bush.

I mean, George W. Bush invested hugely in these crazy green energy policies. A lot of this started in 2005 and 2007. So under Bush and Obama, over the last six years, we have spent $100 billion of taxpayer money, $100 billion, on wind and solar power, to try – because these are infant industries, right? I mean, windmills. We never had windmills before. But you know, this is a technology that goes back to the Middle Ages, and they say it’s an infant technology.

But in any case – so we’ve spent $100 billion on this, and look at what’s happened. Have we gotten anything in return for that money? I mean, there’s almost been no growth. And then look at the oil and gas output, which, by the way, gets almost no subsidy, zero subsidy. In fact, the oil and gas industry pays more taxes to the federal government than any other industry in America. And look at the difference in the growth.

An interesting question for you all, because I want this to be a little bit participatory – after spending $100 billion on wind and solar energy, anybody in this room want to take a guess at what percentage of our electricity production in America today comes from wind and solar power? I heard somebody say one, I heard two, three. We’re up to 2.6 percent. So we spent $100 billion; we’re up to 2.6 percent.

Let me just put it very simply – we have an $18 trillion industrial economy. We are not going to power this industrial economy of $18 trillion with windmills and solar power. It’s just not going to happen. We need to power this with what we’ve got, right? Which is – we are the Saudi Arabia of coal, we’re the Saudi Arabia of natural gas, and we’re becoming the Saudi Arabia of oil. And we can do this. And the fact that we’re holding it back is such a tragedy.

Now, here’s the exciting thing about this story. I think – you know, when I started talking about this a few years ago at these conferences, people kind of, you know, were stunned by this. I don’t think you’re so stunned by it today, because it’s become almost a conventional wisdom. But within five years – by the year 2020, if not before – the United States of America is going to move from being an oil and gas import country to an oil and gas export country.

Now, that is huge. That is a game-changer in terms of our economy. What do we spend more money importing than anything else in the world? Oil. We spend about $300 billion. You’ve been hearing the last couple days from foreign policy experts who know a lot more about it than I do.

But think about what this means for our national security, if we actually start selling this stuff rather than buying it. Think about what it means, how it changes the whole geopolitics of the Middle East. Think about the countries that hate us, that harbor terrorists – countries like Venezuela, countries like Saudi Arabia, countries like Iran. If we don’t have to buy this stuff from them but sell it, it’s huge.

And it also changes the whole geopolitics of what’s happening in Europe. Right? I mean, what is Ukraine really about? It’s about pipelines, it’s about oil and natural gas. The pipelines go right through Crimea, which is why Russia – and Russia supplies 80 to 90 percent of the natural gas and oil to Western Europe. That’s why this is a big deal. Guess who should be supplying the oil and gas to Europe? We should. And we have the capacity to do that. We don’t just need pipelines – hell yes, we need pipelines – we also need to be building LNG terminals so we can liquefy this stuff, send it over to Europe.

I keep making a line on Fox almost every day – if you really want to break the back of Putin, who is such a monster, start selling this stuff to Europe, so they’re not wholly dependent on Russia for gas.

So this is a good-news story. And by the way, it has huge ramifications for all of the other industries in America that will benefit from this. So we’re seeing – I don’t know how many of you are aware of this, but there is a mini-renaissance going on in this country in manufacturing. America’s making things again. You know, we’ve complained for the last 25 years we don’t make anything anymore? We do make stuff.

I was in Grand Rapids, Michigan last month. Grand Rapids is going through a boom period. They’re producing steel, they’re producing all sorts of light manufacturing products, the auto industry parts and assembly materials. And that’s all – not all of it, but a big part of that is happening because – guess what country in the world today has the lowest electric power costs? We do. We do. This has given us a huge strategic advantage.

So for example, our natural gas prices are $4; they pay $8 to $10 in Europe, and they’re paying $12 in Asia. So when we compete against the Chinese, when we compete against the Indians, when we compete against the Germans and the French and the Italians, this has put American companies at a huge, huge strategic advantage.

So we’ve got to go full speed ahead with this. And I think if you got a President who actually wanted it to happen, it would an amazing thing for the US economy.

So, what’s the next part of this story? This is something I really want to stress so importantly. Because again, this is the sound bite we have to keep using over and over and over again when we debate the Left. And I always try to make these charts as simple and as concise as possible. And by the way, this doesn’t even include the numbers that just came in this week. I haven’t quite updated this yet; I have to do this.

So, I was in a debate. We all know who Paul Krugman is, the leftie from the New York Times? So I was debating Paul Krugman about Keynesian economics and so on. And I showed this chart, and it infuriated him. I mean, I knew I was making a strike, because he was getting so angry about this.

But here’s the point – we’ve had two Presidents in the last 30 years who’ve come into office during great periods of economic crisis. How many of you remember 20 percent mortgage interest rates and 14 percent inflation, America de-industrializing in the late ‘70s? When Ronald Reagan stepped into office, the American economy was in a collapse. We had suffered a 12-year bear market; stocks in real terms had lost 60 percent of their value. You couldn’t even get a job as a college graduate. I remember this, because I graduated college at this time. Even as a burger-flipper, things were so bad.

It’s also true Barack Obama stepped into office. He says this every day, right? I came into office – we’d lost seven million jobs, the stock market was in collapse. No question.

So we have a great natural experiment here, right? Two Presidents came in during a complete collapse. And then you ask the question – well, which – and by the way, they used completely opposite strategic attempts to get us out of this crisis. Reagan came in, and you all know the story. What did he do? He cut tax rates significantly – the top rate (inaudible) from 70 to 28 percent. We deregulated the economy, we got government spending under control, we got control of the money supply. We depended on the supply side of the economy, the producers and the businesses, to get us out of this terrible recession.

Obama comes in and does exactly the opposite. Right? You all remember the $830 billion stimulus plan. Then we had Obamacare. Remember Cash for Clunkers? Remember that program, where government paid you to buy cars?

You know, the other day, Joe Biden made another one of his crazy – I mean, almost every day he’s saying something stupid. And so, there was a great cartoon in the Washington Times, I don’t know if you all saw it. But President Obama’s carrying Joe Biden around like he’s a piece of lumber. And he goes to this window, it says Cash for Clunkers.


I love that.

But anyway, Obama and Reagan do exactly the opposite. And then you ask the question – which worked? You know, which strategy worked? And this is an amazing statistic. So what this is saying is that if the economy under Barack Obama had grown as fast as it did under Ronald Reagan, the American economy today would be – the new number is $2.1 trillion larger. $2.1 trillion. Now, these are numbers that are so large they’re hard to comprehend. But let me just put this in kind of a context for people. If we were to divide that $2.1 trillion every year evenly among every household in America, every household in America would have about $15,000 more income.

So this is a huge loss. This is the growth deficit that we’ve seen under Barack Obama. And it’s getting worse; it’s not getting better. We have 0.1 percent GDP growth next month. So we’re not in a recession; we’re just not growing nearly fast enough.

And by the way, Krugman has no response to this. Barack Obama has no response. Liberals have no way of explaining this. If their ideas work so well, explain why we have this $2 trillion deficit. And there is no response, except for the fact that their ideas don’t work.

Now, let me show you this. This is a fun one. So I have a new book out that I just did with Arthur Laffer, on the – it’s called “The Wealth of States.” And the story is the red-versus-blue states phenomena. And you all know what’s going on. The red states – the states of the south are getting richer, they’re getting more and more people.

Did you all see the story the other day about Toyota moving out of California into Texas? This is just a –


Yeah, that’s great news, right? So this is happening day after day after day.

And so, what I did – this one chart really summarizes the whole book. I still want you to stimulate the economy by buying the book. But this chart really summarizes the argument, which is – red states have got it right. Right? I mean, Texas is such a prototype state that does almost everything right.

But here’s the point – the red states, you know, are low-tax states, they’re states that are right-to-work states, they’re states that don’t have heavy regulation, they’re states that are going full speed ahead with drilling and so on. And the blue states just do the opposite – they’re raising tax rates, they’re not right-to-work states, they’re [forced] union states. They have high government spending, high government debt. They give a huge amount of power to the public sector employee unions, and so on and so forth.

Now, what’s the point of this? So, this is just job growth over the last 20 years. Job growth over the last 20 years. And the nice thing about this – this is another wonderful national experiment. Because it turns out, our four biggest states in America – of these four states – Texas, Florida, California and New York – they account for one third of the population of the US. So these are huge mega-players in the US economy. And it turns out, just by sort of luck, as a statistician, that two of those states are red states, and two of them are blue states.

So all I did was I said – Arthur and I said – well, let’s look at what’s happening in these states – which model works better? Texas and Florida have basically created about four times as many jobs over the last 20 years as [New York and California]. Now, what possible explanation is there for that?

I’ll tell you what Paul Krugman said in our debate, because he didn’t like this argument too much, either. Because they don’t have much of a response to this. So he said – Steve, this is happening because of the weather. Right?


I mean, you know, he said that people – and by the way, there is some truth to this, right? I mean, there’s a lot of truth to this. I mean, would you rather live in Minneapolis, Minnesota; or would you rather live in Fort Lauderdale? There’s no question people are – especially as we get older, people are moving to warmer climates, no question about that.

But it certainly doesn’t account for everything. And I had so much fun with Krugman. Because you know, he’s such an asshole. I mean, I just cannot –


-- he’s such an arrogant jerk. Sorry, Mike. I know we’re not supposed to use that kind of language at these, but he really is.

So you know, he says to me – so he says it’s all weather-related. And so, I just zinged him. I said okay. Dr. Krugman – I was very respectful – I said – I didn’t call him an asshole at this meeting.


I said – Dr. Krugman, if you think this is all a result of the weather, then please explain this to me, Dr. Krugman, with your Nobel Prize in economics – why is it that people are moving from San Diego to Houston? Because they’re not moving from San Diego to Houston for the weather. Right? And he was like – he had no response to that at all.


I mean, don’t you all agree this is great vindication and validation of our ideas? We have to keep pushing this metric.

The cool thing about this, by the way, is that that Toyota example – I mean, this is happening every single day in America. So the red states are getting more prosperous; the blue states – and by the way, I’m from a blue state. I’m from the state of Illinois. I mean, it’s tragedy what’s happening in our state. It’s just a tragedy.

When I was growing up, Illinois was one of the richest states in the country. Illinois is getting bled dry because of preposterous policies. You know, five years ago, the highest income tax rate in Illinois was three percent. So we had a flat-rate income tax of three percent. The governor just recently raised it to six percent. And now, there’s going to be an initiative on the ballot sponsored by the teachers’ unions to raise it to nine percent. To nine percent.

Now, I talked to Mike Pence the other day – you know, the governor of Indiana who’s a great dark horse for the Republican candidacy for President. And I asked him, I said – Mike, what do you think of this? And he was so great. He said, you know – Steve, I’ve got to tell you this. He said – living next – being a neighboring state to Illinois, here in Indiana, it’s like living down the street from the Simpsons.


I just thought that was a great line, you know.

But anyway, these things have to be – we have to keep pushing the red state message. Because I think it is so important.

One or two other points if I may, and then I’ll open it up to some questions for you. I just thought I’d show this to you. This is an indication of where – or kind of forecast of which states – not which states have grown the most, but based on our kind of formula of which policies are the most pro-growth in states. I just thought I’d show this to you because so many of you are from different states.

I know a lot of you are Texans. By the way, I always get asked – why is Texas 21 on this list? It’s because Texas is so good already, it’s hard to find policies much to improve here. But you know, over the last 10 years, you’ve grown much, much faster than any other state.

But the point is, you look at the states that are growing and have the best forecast – Utah, South Dakota, Indiana, North Dakota, Idaho, North Carolina, Arizona, Nevada, Georgia, Wyoming. What do all those states have in common? They are red states that are growing.

Look, just cast your eyes, if you will, on the bottom six or seven states. You guys probably can’t read this, so let me read it for you – New Jersey, Minnesota, California, Illinois, Vermont, New York. Those states, every year after year, are losing people, they’re losing businesses, they’re losing capital.

And by the way, how many of you here are from California? How many – a lot of you are. Mike, maybe you can explain this to me – how do you screw up California? I mean, really? I mean, I love – every time I go out for your conferences and visit you out there, it’s like – this is like heaven on earth. Right? I mean, beautiful mountains and beautiful beaches, and beautiful, 70-degree weather and sunshine, and beautiful women. I mean, what’s not to like about this great, great state of California?

And it really shows how politicians can screw a place up. So, tragically, the people want to actually move out of this great state.

The next point I want to make – I know I am running out of time – I just want to show you one other quick thing, if I may. Oh, by the way, I don’t know how many have seen this. This is the new flat tax that Barack Obama just came up – how much money did you make? Send it in.


It’s a – I mean, can it get any simpler than this? You can put that on a postcard.

But I wanted to show you one other thing. Oh, okay. So we were chatting a little bit about this at breakfast, about what’s happening in the money supply. And I think Pat Caddell mentioned this, about Americans really concerned about our money supply. They should be. They should be.

Look at this. We’ve never seen anything like this before in the country’s history. This is the supply of money. Look at what happened in 2009 – I mean, 2008. That was during the meltdown of the economy. And then, you can see QE1, QE2, QE3. And those are just fancy terms for saying what we’re doing is just printing more and more money. Right?

And this is unchartered territory. We’ve never seen anything like this before. We’ve more than doubled and tripled the supply of dollars in the economy.

Now, you all know this from your Economics 100 course – what is the likely impact of all that money printing? Inflation, right? You reduce the value of your currency. And that’s what’s been happening in America.

By the way, I don’t know how many of you saw – there was a report that came up from the New York Times. It’s somewhat suspect, because the New York Times reported this. But they were basically saying that the average Canadian is now – did you all see this? The average Canadian has a higher living standard than the average American. Now, I don’t believe that to be true. But it is true, over the last 10 years, Canada’s been catching up in a big way.

And this reporter put 2,500 words into this, talking about this. And they came up with all sorts of explanations. But one of the explanations that they did not mention, which is one of the key factors for why Canada lately has been doing so much better than the United States – have you all been seeing what’s happened to the Canadian dollar versus the US dollar? The Canadian dollar has gone way up. I mean, remember 20 years ago, the Canadian dollar was, what, 65 to 70 cents for a dollar. Now, it’s – actually, it went above the US dollar, didn’t it, for awhile. I think right now, it’s at about par.

When you devalue the value of your currency, what happens to the standard of living of people? Right? And that’s what we’re doing here.

And by the way, if I showed you that chart, and I didn’t even tell you what country that was, you know, you’d probably say – that’s Argentina. Right? That’s Mexico, that’s Bolivia. I mean, that’s what countries do when they get in a debt crisis. And it’s a – I would make a case to you, it’s a very, very dangerous situation.

I’ll just show you one more on this money stuff. It’s kind of interesting. These are the interest rates in the US. You all see the ‘70s – remember when the interest rates went up and up and up and up? And then, look what happened when Reagan came into office. Anybody remember who the Fed chairman was in 1981? Volcker. So this is the Reagan-Volcker disinflation, one of the great economic triumphs of the last 50 years.

And look at this. Look at what – you want to see a beautiful picture, look at the last 30 years – down, down, down, down, down, down, down, down go interest rates. You know, and now they’re – this is a little out of date – we’re at about 2.5, 2.75 on the Ten Year Treasury Bond.

But I will make a bet to any and all of you in this room. If, let’s say. we were to re-gather two or three or five years from now – I’m willing to bet $100 to any and all of you that interest rates are going to be higher then than they are today.


Anybody want to take me up on that? I mean, it’s not a very bold bet. We are – and by the way, I’m an optimist. I am an optimist. But I will say this – one of the things that keeps me up at night – think about what happens if those interest rates start to rise just to the average of where they’ve been in the last 30 years. So let’s say the Ten Year Treasury bill goes from 2.5 to 4.5 or five percent. What institution in the world is the biggest debtor in the world? The US government. Right? So what country is the most exposed to an interest rate effect? We are.

If you see those interest rates go up to, say, five percent – which again, that would only be the average of what they’ve been over the last 40 years – if those interest rates go up from 2.5 to five percent, that will increase the national debt, our borrowing, our deficit over the next 10 years, by $2.5 trillion.

So we are extremely susceptible to an interest rate shock. We got to stop borrowing.

Just quickly show this. Some of you have seen this. But if you want to see where prices are out of control on the American economy, it’s education and healthcare. You know, if you look at basic consumer items, they’ve actually been falling in price. Software and computers and clothing and vehicles, and almost anything you can buy at a Walmart – those things are falling in price, which is a good thing. Isn’t it interesting – the two industries in America where prices are completely out of control are healthcare and education.

Now, who runs those two industries? The government does, right? And you want to see – healthcare prices are going to continue to go up.

Did you see, by the way, what President Obama said when the GDP report came out on Wednesday? He said – this is really good news, because healthcare spending went way up. And that shows that Obamacare is working. I mean, he actually – I’m not kidding, he actually made this statement.

Now, wait a minute! Then he told us that if we put in Obamacare, it would cause the prices to fall! And he’s celebrating the fact that they’re rising.

Education and healthcare. How many of you in this room have a son, daughter, grandson or granddaughter, in college today? Raise your hand. The greatest scam in America today is how much universities are charging in tuition, right? And Republicans should be doing something about that.

And I have a great article in the paper next week about a school, College of the Ozarks, that charges zero for tuition. You know how they do it? The kids work. The kids work. Isn’t that a dramatic idea?

So, I can tell that Michael’s hyperventilating a little back in the room, because I’ve used more time than I should. I’ll simply say this – there is only one thing standing between America and an incredible economic renaissance, like we had in the ‘80s and ‘90s, where the economy just booms, the stock market rockets, and America becomes the number-one competitive country in the world. Only one thing stands in our way. And that is Hillary. We have to beat Hillary.

But if we do, if we do – and I think we are going to beat her – if we win that 2016 election, you’re going to see the biggest boom in this country you ever saw.

Thank you very much. Great pleasure to be with you.


Is there any time for questions, or –? Two or three. Okay. Really quickly, I’ll try to get through – yes. Go ahead. [Edelle]?

Unidentified Audience Member: Assuming the boom scenario – at what pace would the federal debt reduce? What’s the offset to the money supply and the federal debt?

Unidentified Speaker: I’ll let you ask your question now.

Unidentified Audience Member: Some bloggers think that deflation is a higher probability than inflation. What is your opinion on that?

Steve Moore: I think those people are absolutely crazy. I mean, if you’re printing more and more money, how does that lead to deflation? Right?

Now look, it is true inflation is very low right now. I mean, the CPI indicator’s only going up by 1.5 percent. But that’s only because the economy’s growing so slowly. Right? The money isn’t turning over.

One of the things that’s going to kind of retard this boom that I’m talking about – as people start spending more money, as investors start investing and as banks start lending it, what’s going to happen to the inflation rate? It’s going to start to go up. Right?

So anybody who thinks we’re in an era of deflation – I think you’re – I just don’t see it. I think the debt is too high – and by the way, one of the things that’s scary is, if we actually had a rush of inflation, the government actually benefits from that. Because it reduces the real value of the debt. So I just don’t – how many of you think we’re going to see deflation over the next – how many think we’re going to see inflation? So, I think you’re right. I would go with you on that.

I’m sorry, (inaudible) –

Unidentified Audience Member: (Inaudible)

Oh yeah, right. Look, here’s the thing – we should be on a four percent growth path. This is what Reagan created. Reagan created an American growth path of four percent for seven years.

I don’t know how many have ever read the book by my hero, Bob Bartley, who was the original Wall Street Journal Editorial Page editor. But Bartley wrote a great, great, great book. If you want to read a great history book, read “The Seven Fat Years.” It was about the incredible success of what happened when Reagan cut tax rates. When he deregulated the economy, when he got money under control and inflation fell, we saw the biggest boom in this country ever. And it hit every class – the low-income people, the middle-class people, the people in the upper class. We can do that again.

And you get back to four percent growth, and then the deficit will fall very dramatically. You will see people’s incomes start to rise. I mean, I was struck – I didn’t hear all of Pat Caddell’s comments this morning, but I heard a few of them. And he is so right. Americans – the most amazing statistic – and he talked a little bit about this – over half of Americans today, 52 percent according to the latest Fox poll, think America’s still in a recession. Wait a minute – this recovery began in June of 2009. We’re almost five and six years into this recovery, and half of Americans think we’re still in a recession. Why is that? Why is that?

Well, I’ll tell you. If you look – the Left always talks about – oh, we care about the middle class and so on. The middle class has gotten crushed under Obama. The average middle-class family has lost $1,800 in income during this so-called recovery. So they aren’t getting richer; they’re getting poorer. They are getting creamed by Obama policies. And that is the message Republicans have to say over and over.

One last one, and then I promise I’ll end, Mike. Go ahead.

Unidentified Audience Member: (Inaudible question – microphone inaccessible) –

Steve Moore: Oh, this is –

Unidentified Audience Member: (Inaudible question – microphone inaccessible).

Steve Moore: Well, I am worried about – on this electricity issue, our electric prices should be falling very dramatically. Because we’re – you know, look, where do we get most of our electricity from today? There’s two sources that we get 80 percent of our electricity from. What are they? Coal and natural gas, right? And about 40 percent comes from coal and about 40 percent from natural gas.

This is a roundabout way of answering the question, but I got to tell you a statistic. Can I just take two more minutes? I know you’re running behind, but I bet this will stun everyone in this room, and it’s a great thing to throw in the face of liberals.

So they say all they care about is global warming, got to stop the oceans from rising, and so on. If you look over the last five years – I bet, if you read The Wall Street Journal Editorial Page, you probably know this – over the last five years, what country in the world, of all the developed countries, do you think has reduced its carbon emissions the most?

Audience: We have.

Steve Moore: We have. Now, that’s stunning, right? How could we have reduced our carbon emissions more than Europe and Asia? We never signed the Kyoto Treaty, right? We never passed Cap and Trade. We never did, you know, the carbon tax, all the stuff – for the last 10 years, Europe has been talking so sanctimoniously – oh, we’re doing all this stuff to stop global warming. We’ve done more to reduce carbon than they have! Why? What’s going on? Why is it our carbon emissions have fallen so much?

Natural gas!

Unidentified Audience Member: – [50] percent coal, and now we’re 40 percent (inaudible) –

Steve Moore: Exactly. You’ve got it exactly right, sir.

And so what’s going on is natural gas – it turns out natural gas is a wonder-fuel. Right? This is like the most amazing fuel ever invented. Why? Number one, it’s abundant. Right? We’ve got hundreds and hundreds of years’ worth of natural gas. Number two, it’s American. We have more natural gas than anybody else in the world. It’s homemade energy supply. Number three, it’s cheap. Right? And number four, it emits very few carbons into the atmosphere. Right?

So you would think – right – you would think that the Left would be celebrating the natural gas revolution. This is the solution to global warming. But do they like natural gas? They hate it, right?

My view is that the Left has a very, very sinister campaign going on here. It is not about global warming, it is not about cleaning the air or cleaning the water. What is this really about? It is stopping growth, it is stopping capitalism, and it is stopping progress.

And this gets back to the point that I just want to stress one last time before Michael punts me over the goal – we can win back sensible middle-class Americans. Because when I talk to Democrats who are not in office, or who talk to me off the record, you know what they tell me? Steve, our party, the Democratic Party, we’re on the wrong side of the energy issue. They are. Right? They bet the farm on wind and solar power, and it doesn’t work! Right? It can’t possibly compete with this natural gas and oil revolution.

We’ve got to shove this down their throats, and say – we are going to create millions and millions of high-paying jobs in this country that are going to bring back the middle class.

And the Democrats, and these wackos like Tom Steyer – do you all know who Tom Steyer is? He’s given $100 million to the Democratic Party. Those are the opponents of the American Dream.

Thank you very much. Been great to be here.


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