WHEN: Today, Wednesday,November 30th
WHERE: CNBC's "Squawk Box"
Following is the unofficialtranscript of a CNBC interview with Steven Mnuchin and Wilbur Ross on CNBC's"Squawk Box" (M-F, 6AM-9AM ET) today, Wednesday, November 30th.Following is a link to the full interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000572204.
All references must besourced to CNBC.
ANDREW ROSS SORKIN: IN THEMEANTIME, WE HAVE SOME VERY IMPORTANT PEOPLE WITH THE CALL. THE TRUMPRALLY.
JOE KERNEN: EVERY TIME YOUSAY IT, I JUST LIKE TO GET YOU TO SAY IT. WOULD YOU SAY IT AGAIN?
SORKIN: THE TRUMP RALLY.
KERNEN: COMING FROM YOU --ISN'T IT GOOD, WILBUR? COMING FROM HIM. SO GOOD. PRESIDENT-ELECT DONALDTRUMP ANNOUNCING MORE CABINET PICKS FOR TREASURY SECRETARY FINANCIER AND LONGTIME GOLDMAN SACHS EXECUTIVE STEVEN MNUCHIN AND FOR SECRETARY OF COMMERCEOUR OLD FRIEND WILBUR ROSS. HE'S SNOT OLD. HE'S OUR FRIEND FOR A LONG TIME IMEANT. THEY JOIN US NOW. I DON'T THINK THE APPOINTMENTS ARE ACTUALLY OFFICIALYET, BUT CAN YOU GENTLEMEN CONFIRM THIS HAS HAPPENED?
STEVEN MNUCHIN WE CAN,INDEED. WE'RE THRILLED TO BE HERE AND WE'RE THRILLED TO WORK FOR THEPRESIDENT-ELECT AND HONORED TO HAVE THESE POSITIONS.
SORKIN: CONGRATULATIONS.
KERNEN: LET'S START WITHTHIS. IT'S A TWO PRONG QUESTION. NUMBER ONE, BECAUSE WE TALK ABOUT IT ALL THETIME. WHAT IS THE POTENTIAL GDP GROWTH FOR THIS U.S. ECONOMY, NUMBER ONE? WHATDO YOU GUYS SEE IT AS THAT WE CAN AVERAGE? NUMBER TWO WHAT ARE THE MOSTIMPORTANT THINGS TO GET US THERE?
MNUCHIN LET ME JUST SAY OURMOST IMPORTANT PRIORITY IS TO SUSTAINED ECONOMIC GROWTH AND I THINK WE CAN ABSOLUTELY GET TO SUSTAINED 3 TO 4% GDP AND THAT IS ABSOLUTELYCRITICAL FOR THE COUNTRY.
KERNEN: NOT ONE OR TWO QUARTERS?
MNUCHIN: NO I THINK IT'S SEASONALLY ADJUSTED THIS QUARTER BUT I BELIEVE WE CAN HAVE SUSTAINEDGROWTH AT THAT LEVEL. AND TO GET THERE OUR NUMBER ONE PRIORITY IS TAX REFORM.THIS WILL BE THE LARGEST TAX CHANGE SINCE REAGAN. WE'VE TALKED ABOUT THIS DURINGTHE CAMPAIGN. WILBUR AND I HAVE WORKED VERY CLOSELY TOGETHER ON THE CAMPAIGN.WE'RE GOING TO CUT CORPORATE TAXES WHICH WILL BRING HUGE AMOUNTS OF JOBS BACKTO THE UNITED STATES.
KERNEN: WHERE DO YOU THINKYOU CAN GET TO ON THAT?
MNUCHIN: WE'RE GOING TO GETTO 15% AND BRING A LOT OF CASH BACK INTO THE U.S.
KERNEN: IS IT POSSIBLE,ANDREW, TO GET TO 15%?
SORKIN: IT MAY BE. WE HAD ACOUPLE OF DIFFERENT GUESTS ON –WE HAD A COUPLE OF
KERNEN: YOU THINK 25%.
SORKIN: WE HAD A GUEST ONEARLIER IN THE MORNING, A WASHINGTON ANALYST WHO WAS SUGGESTING THEY THOUGHTTHAT THE CONVERSATION WOULD START AT 15% AND POTENTIALLY COULD CREEP UP. IDON'T KNOW IF YOU THINK THAT IS A POSSIBILITY.
MNUCHIN: I WOULD FIRST JUSTSAY THAT CORPORATE TAXES ARE ONE COMPONENT OF REVENUES TO THE GOVERNMENT.OKAY? AND THE MAIN COMPONENT IS OBVIOUSLY PERSONAL INCOME AND PERSONALTAXES. SO WE THINK BY CUTTING CORPORATE TAXES WILL CREATE HUGE ECONOMICGROWTH. AND WE'LL HAVE HUGE PERSONAL INCOME. SO THE REVENUES WILLBE OFFSET ON THE OTHER SIDE. WE'LL HAVE A BIG MIDDLE INCOME TAX CUT. THAT'SANOTHER BIG PART OF THIS IN SIMPLIFYING TAXES. TAXES ARE WAY TOO COMPLICATEDAND PEOPLE SPEND WAY TOO MUCH TIME WORRYING ABOUT WAYS TO GET THEM LOWER.
KERNEN: IS DYNAMIC SCORINGGOING TO COME BACK INTO PEOPLE BELIEVING IT? BECAUSE PEOPLE -- WE HAVEPEOPLE ON THAT JUST FLATOUT ON THE LEFT SAY THERE'S NO PROOF THAT IT EVERWORKS. I DON'T SEE HOW THEY CAN COME UP WITH THAT. IF YOU DO 4% GROWTH YOU GETMORE TAXES. DO YOU NOT?
MNUCHIN: OF COURSE IT WORKSAND OF COURSE YOU HAVE TO HAVE DYNAMIC SCORING. IT WOULD MAKE NO SENSEOTHERWISE. AND WE'RE GOING TO WORK WITH CONGRESS. I THINK THEY UNDERSTANDTHAT.
MICHELLE CARUSO-CABRERA:DYNAMIC SCORING MEANS THAT WHEN YOU CUT TAXES, SOME PEOPLE BELIEVE THAT THATCHANGES BEHAVIOR WHICH LEADS TO MORE REVENUE. LEFT HAS ARGUED THAT THERE'S NOPROOF OF THAT, SUPPOSEDLY.
WILBUR ROSS: WELL, THISADMINISTRATION WILL PROVE IT.
KERNEN: THE LASTADMINISTRATION KIND OF PROVED IT IN THE CONVERSE I WOULD SAY.
ROSS: I WOULD RATHERTALK ABOUT WHAT THIS ADMINISTRATION IS GOING TO DO.
KERNEN: OKAY THE WRAP ISGOING TO BE THE LIONS SHARE OF THE TAX CUTS GO TO THE WEALTHY. NOT JUST THEAMOUNT BUT ALSO THE PERCENTAGE CUTS.
MNUCHIN: IT'S NOT THE CASE ATALL. ANY REDUCTIONS WE HAVE IN UPPER INCOME TAXES WILL BE OFFSET BY LESSDEDUCTIONS SO THAT THERE WILL BE NO ABSOLUTE TAX CUT FOR THE UPPER CLASS. THEREWILL BE A BIG TAX CUT FOR THE MIDDLE CLASS BUT ANY TAX CUTS WE HAVE FOR THEUPPER CLASS WILL BE OFFSET BY LESS DEDUCTIONS THAT PAY FOR IT.
KERNEN: SHOULD I DONATE TOCHARITY THEN THIS YEAR I MEAN WHAT ARE YOU GOING TO DO?
MNUCHIN: THEY'LL STILL LETYOU DO CHARITIES BUT THERE'LL BE OTHER DEDUCTIONS THAT ARE ABSOLUTELY LIMITED TO PAY FOR THIS--
CARUSO-CABRERA: HOW ABOUTMORTGAGE DEBT?
MNUCHIN: AGAIN, WE'LL ALLOW-- WE'LL CAP MORTGAGE INTEREST BUT ALLOW SOME DEDUCTIBILITY.
SORKIN: SOME OF THE ANALYSISTHAT SUGGESTED THE MIDDLE CLASS -- THAT CERTAIN PEOPLE, ESPECIALLY I THINKSINGLE FAMILY – SINGLE HOUSEHOLD -- SINGLE PARENTS, THEY MAY ULTIMATELY PAYMORE. HAVE YOU SEEN THOSE?
MNUCHIN: WE DON'T BELIEVE INTHAT ANALYSIS. WHEN WE WORK WITH CONGRESS AND GO THROUGH THIS, IT WILL BEVERY CLEAR. THIS IS A MIDDLE INCOME TAX CUT. AND THE CHILD CARE CREDIT ISA BIG ASPECT OF THIS. THIS IS SOMETHING WE'VE WORKED ON IN THE CAMPAIGN. AND ONE OF THE BENEFITS OF THIS IS WILBUR AND I HAVE WORKED TOGETHER THROUGHOUTTHE CAMPAIGN WITH THE PRESIDENT-ELECT AND THE POLICY TEAM. SO THIS WILLBE AN INTEGRATED APPROACH ACROSS COMMERCE AND TREASURY. SO ANOTHER BIGAREA IS GOING TO BE TRADE REFORM WHERE AGAIN IT CUTS ACROSS BOTH COMMERCE ANDTREASURY AND WE BELIEVE IN FAIR TRADE AND WE THINK THAT'S GOING TO BE A BIGBOOST TO THE ECONOMY AS WELL.
SORKIN: CAN YOU TELL US ABOUTTHE NEGOTIATIONS WITH CARRIER WHICH I THINK WE'RE GOING TO LEARN ABOUT LATER.
ROSS: WELL IT IS A GREATPRESENT FROM THE PRESIDENT HERE WE HAVE A TRADE VICTORY BEFORE WE'VE EVEN COMEINTO OFFICE.
SORKIN: BUT WHAT KIND OFNEGOTIATE – DO YOU THINK A LARGE PART OF YOUR ROLES IS GOING TO BE NEGOTIATINGWITH AMERICAN COMPANIES TO KEEP THEM IN THE UNITED STATES AND HOW ARE THEYGOING TO BE ONE OFF DEALS? WHAT IS THE CARRIER DEAL ACTUALLY LOOK LIKE? I THINKTHERE'S STILL QUESTIONS ABOUT WHAT --
CARUSO-CABRERA: WHAT WERETHEY OFFERED AND WHY DID THEY STAY?
MNUCHIN: FIRST THING I WOULDSAY IS IT STARTS WITH AN ATTITUDE. OF THIS ADMINISTRATION, THIS PRESIDENT, THISVICE PRESIDENT-ELECT IS GOING TO HAVE OPEN COMMUNICATIONS WITH BUSINESSLEADERS. YOU CAN SEE THIS STARTED BECAUSE THE PRESIDENT-ELECT CALLED UP THE CEOOF UNITED TECHNOLOGIES AND SAID IT'S IMPORTANT TO KEEP JOBS HERE. AND WILBURAND I WILL CONTINUE THAT. AND AGAIN AS HE SAID, THIS IS A GREAT FIRST WINWITHOUT US EVEN HAVING TO TAKE THE JOB.
CARUSO-CABRERA: BUT THEREASON THOSE JOBS WERE GOING TO GO TO MEXICO IS BECAUSE THEY WERE CHEAPER. ITWOULD HELP THE COMPANY STAY MORE COMPETITIVE. HOW DO YOU ADDRESS THE UNDERLYINGISSUES OF WHY COMPANIES WANT TO LEAVE THE UNITED STATES?
ROSS: WELL, FIRST OF ALL,IT'S MORE COMPLICATED THAN THAT. MEXICO HAS 44 TREATIES WITH OTHER COUNTRIESTHAT MAKE IT VERY ADVANTAGEOUS TO DO INTERNATIONAL SHIPPING FROM MEXICO RATHERTHAN FROM THE UNITED STATES. BELIEVE IT OR NOT, MEXICO HAS BETTER TREATIES WITHTHE REST OF THE WORLD THAN THE UNITED STATES DOES. WE'RE GOING TO FIX THAT.
CARUSO-CABRERA: SO THAT WOULDHELP ADDRESS –
ROSS: SURE.
CARUSO-CABRERA: THE INITIALPROBLEM IS WHY DO THEY WANT TO GO ANYWAYS?
ROSS: ON A TYPICAL CAR, THEYSAVE TWICE AS MUCH IN TARIFFS GOING INTO EUROPE OUT OF MEXICO AS THEY DO GOINGINTO MEXICO TO SAVE LABOR.
KERNEN: WILBUR, WHENEVER YOUARE ON WE SAY WHERE ARE YOU IN THE WORLD A LOT OF TIMES AND YOU MIGHT BE IN THEUK OR YOU MIGHT BE – I MEAN, YOU'RE ALL OVER. IF ANYONE HAS BENEFITTED FROMFREE TRADE, IT MIGHT BE WILBUR ROSS AND YOUR COMPANY. YOU SAW THE RHETORICDURING THE CAMPAIGN. I MEAN, A LOT OF PEOPLE SAID THE MARKET IS GOING TO SELLOFF 2,000 POINTS IF TRUMP PULLS OFF A SURPRISE WIN BECAUSE WE'RE GOING TO BE APROTECTIONIST COUNTRY THAT IS NOT INTERESTED IN FREE TRADE. HOW DO YOU SQUARETHAT UP WITH YOUR WHOLE CAREER?
ROSS: FIRST OF ALL,PROTECTIONISM IS A PEJORATIVE TERM. IT'S NOT REALLY SOMETHING THAT'SMEANINGFUL. THERE'S TRADE, THERE'S SENSIBLE TRADE, AND THERE'S DUMB TRADE.WE'VE BEEN DOING A LOT OF DUMB TRADE. AND THAT'S THE PART THAT'S GOING TOGET FIXED.
KERNEN: WHAT IF WE PUTTARIFFS ON CHINESE GOODS? WHAT IS GOING TO HAPPEN? AND THEN, IF WE PUT TARIFFSON CHINESE IMPORTS, WHAT ARE THEY GOING TO DO WITH IPHONES?
ROSS: EVERYBODY TALKS ABOUTTARIFFS AS THE FIRST THING. TARIFFS ARE THE LAST THING. TARIFFS ARE PART OF THENEGOTIATION. THE REAL TRICK IS GOING TO BE INCREASE AMERICAN EXPORTS. GETRID OF SOME OF THE TARIFF AND NON TARIFF BARRIERS TO AMERICAN EXPORTS.
KERNEN: STEVEN, ISN'T SOME OFTPP – ISN'T THAT WHAT IT DID? GOT RID OF A LOT OF TARIFFS? NO?
ROSS: NO. NOT AT ALL. FOR ONETHING, TPP HAD TERRIBLE RULES OF ORIGIN. RULES OF ORIGIN MEANS CAN STUFF COMEIN FROM OUTSIDE THE BOUNDARIES OF THE TREATY COUNTRIES? IN AUTOMOTIVE, AMAJORITY OF A CAR COULD COME FROM OUTSIDE TPP, NAMELY COULD COME FROM CHINA,AND STILL GET ALL THE BENEFITS OF TPP. AND IF IT CAME IN THROUGH MEXICO,ALL THE BENEFITS OF MEXICO.
KERNEN: IS THAT A BAD DEAL?STEVEN, YOU THINK –
ROSS: HORRIBLE DEAL.
MNUCHIN: ABSOLUTELY.
KERNEN: TPP WAS A BAD DEAL?
ROSS: HORRIBLE.
MNUCHIN: ABSOLUTELY. AND WEBELIEVE IN BILATERAL NEGOTIATIONS. AND WE WILL HAVE VERY GOOD DEALS WITHLOTS OF COUNTRIES.
CARUSO-CABRERA: INTERESTING.SO THIS HUGE REGIONAL APPROACH TO TRADE YOU THINK IS A BAD IDEA. COUNTRY TOCOUNTRY TO COUNTRY.
MNUCHIN: ABSOLUTELY.
ROSS: THE PROBLEM WITHREGIONAL TRADE AGREEMENTS IS YOU GET PICKED APART BY THE FIRSTCOUNTRY. THEN YOU NEGOTIATE WITH THE SECOND YOU GET PICKED APART. AND YOUGO WITH THE THIRD ONE. YOU GET PICKED APART AGAIN. WHAT HAS TO BE PUT INTOPERSPECTIVE, WE ARE THE BIG MARKET. WE ARE THE WORLD'S BIGGESTIMPORTER. WE NEED TO TREAT THE OTHER COUNTRIES AS GOOD SUPPLIERS. NOT ASDETERMINING THE WHOLE SHOW.
KERNEN: WE'VE GOT SO MUCH TODO, SO LITTLE TIME. CAN YOU GUYS STAY UNTIL 9:00? I'M KIDDING. BUT WE'RE GOINGTO KEEP YOU AS LONG AS WE CAN. I JUST WANT TO GET TO DODD/FRANK QUICKLY. A LOT OF PEOPLE WERE HOPING FOR HENSARLING. I SAW JOHN ALLISON YESTERDAY. BOTHOF THOSE GENTLEMEN PROBABLY HAVE MUCH MORE STRIDENT VIEWS ABOUT DODD/FRANK ANDWHAT WE KEEP AND WHAT WE DON'T KEEP THERE. DOES YOUR NOMINATION MAKE IT LESSLIKELY THAT THAT ENTIRE BILL IS GONE OR WILL YOU GO SOFTER ON REFORM OFDODD/FRANK THAN THOSE OTHER GUYS?
MNUCHIN: WELL, LET ME FIRSTSAY, WE LOOK FORWARD TO WORKING WITH HENSARLING AND THE OTHER PEOPLE INCONGRESS ON THIS. OKAY? AND I THINK ONE OF THE GOOD THINGS ABOUT BOTH WILBURAND I, WE HAVE ACTUALLY BEEN BANKERS. SO WE WERE THE ONLY TWO PEOPLE DURING THEFINANCIAL CRISIS THAT WERE ISSUED LICENSES BY THE GOVERNMENT –
KERNEN: YOU'RE SUPPOSED TOWHISPER THAT FOR THE LAST EIGHT YEARS, AREN'T YOU? BUT YOU'RE ACTUALLY COPPINGTO THAT.
CARUSO-CABRERA: BADGE OFHONOR, YOU THINK IT IS.
MNUCHIN: WE'VE BEEN IN THEBUSINESS OF REGIONAL BANKING AND WE UNDERSTAND WHAT IT IS TO MAKE LOANS. THAT'STHE ENGINE OF GROWTH TO SMALL AND MEDIUM SIZED BUSINESSES. SO AS WE LOOKAT DODD/FRANK, THE NUMBER ONE PROBLEM WITH DODD/FRANK IS IT'S WAY TOOCOMPLICATED AND IT CUTS BACK LENDING. SO WE WANT TO STRIP BACK PARTS OFDODD/FRANK THAT PREVENT BANKS FROM LENDING. AND THAT WILL BE THE NUMBER ONEPRIORITY ON THE REGULATORY SIDE.
CARUSO-CABRERA: WHAT ABOUTTHE VOLCKER RULE?
ROSS: YEAH, AND MANY OF THESMALLER BANKS HAVE HAD TO GET TO THE POINT WHERE THEY NOW HAVE MORE COMPLIANCEPEOPLE THAN THEY HAVE LENDING OFFICES. THAT'S CRAZY.
SORKIN: WHAT ABOUT THEVOLCKER RULE AND THE CONSUMER PROTECTION BUREAU?
MNUCHIN: WELL, YOU KNOW, IWOULD JUST SAY WE'RE GOING TO LOOK AT ALL THESE THINGS. BUT I WOULD SAY THENUMBER ONE PROBLEM WITH THE VOLCKER RULE IS IT'S TOO COMPLICATED AND PEOPLEDON'T KNOW HOW TO INTERPRET IT. SO WE'RE GOING TO LOOK AT WHAT TO DO WITH IT ASWE ARE WITH ALL OF DODD/FRANK, WITH THE NUMBER ONE PRIORITY IS GOING TO BE MAKESURE THAT BANKS LEND.
SORKIN: RIGHT. STEVEN, THISIS SORT OF ONE OF THE FIRST OPPORTUNITIES PEOPLE ARE GOING GET TO KNOW YOUPUBLICLY. YOU HAVE NOT BEEN AS MUCH OF A PUBLIC FACE AS WILBUR HASHISTORICALLY. I TALKED TO HANK PAULSON WHO YOU WORKED FOR LAST NIGHT ON THEPHONE. PUT THIS IN THE NEW YORK TIMES THIS MORNING. HE SAID, "HE IS VERYTALENTED, HAS A DEEP UNDERSTANDING OF FINANCE AND MARKETS, HE KNOWS HOW TOBRING PEOPLE TOGETHER TO GET THINGS DONE. AND IMPORTANTLY, HE HAS A WORKINGRELATIONSHIP WITH AND THE CONFIDENCE OF THE PRESIDENT-ELECT." THIS WAS A BIGGAMBLE FOR YOU TO SOME DEGREE OR AT LEAST FEELS LIKE THAT WHEN YOU DECIDED TOPUT YOUR LOT IN WITH HIM EARLY. A NUMBER OF YOUR COLLEAGUES AND PEERS RAISEDQUESTIONS ABOUT DOING IT. DID YOU THINK OF THIS AS A TRUE IDEA OF GETTING INTOTHE ADMINISTRATION EARLY ON?
MNUCHIN: SO LET ME FIRST SAY,AND I'VE HEARD A LOT OF PEOPLE SAY THIS WAS A GAMBLE. THIS WAS NEVER A GAMBLEFROM MY PERSPECTIVE. I'VE KNOWN THE PRESIDENT-ELECT FOR OVER 15 YEARS. IBELIEVED IN HIS POLICIES. AND I THOUGHT HE WOULD WIN. BUT I DID THIS BECAUSE IBELIEVED IN IT. DESPITE THE FACT THERE WERE A LOT OF PEOPLE IN CALIFORNIA ANDNEW YORK THAT WANTED TO STOP BEING FRIENDS. THEY'VE ALL COME BACK.
CARUSO-CABRERA: SO JOE HASBROUGHT UP THAT YOU'VE DONATED MONEY TO BARACK OBAMA AND TO HILLARY CLINTON INTHE PAST. WHY?
MNUCHIN: WELL, LET ME JUSTSAY, LIKE THE PRESIDENT-ELECT, I LIVED IN NEW YORK AND GAVE MONEY TO CERTAINDEMOCRATS. I DID GIVE – THE MOST SUBSTANTIAL GIFT WAS TO MITT ROMNEY LAST TIME,OKAY? AND I HAVE BEEN A REPUBLICAN. AND I'M EXCITED TO SUPPORT –
CARUSO-CABRERA: SOTRANSACTIONAL, NOT CONVICTION.
KERNEN: I FEEL BETTER. MYQUESTION WAS GOING TO BE YOU GAVE MONEY TO THE CURRENT PRESIDENT, OBVIOUSLY,AND YOU'RE GOING TO TRY TO REVERSE, I WOULD HOPE, A LOT OF THE ECONOMIC – YOUKNOW, PEOPLE ARGUE ABOUT WHETHER THERE HAS BEEN A GREAT ECONOMY OR BAD ECONOMY.I WOULD ARGUE WE WERE WELL BELOW OUR POTENTIAL FOR EIGHT SOLID YEARS. TEPID ATBEST. YOU BACKED HIM OVER THE REPUBLICAN CANDIDATE. YOU WERE WITH HILLARYBEFORE THAT. WHAT ABOUT THOSE –
MNUCHIN: LET ME JUST SAY, IDIDN'T SAY I BACKED THEM. I SAID I GAVE MONEY TO THEM. BUT I AGREE WITH YOUCOMPLETELY. THE PROBLEM HAS BEEN FOR THE LAST EIGHT YEARS, THERE'S BEEN NOECONOMIC GROWTH. WHAT WE SAW FROM TRAVELING WITH THE PRESIDENT-ELECT TO ALLTHESE RALLIES IS FOR THE AVERAGE AMERICAN WORKER THEY'VE GONE NOWHERE. AND OURJOB IS TO MAKE SURE THE AVERAGE AMERICAN WORKER HAS WAGE INCREASES AND HAVEGOOD JOBS. THAT'S THE PRIORITY OF THIS ADMINISTRATION.
KERNEN: IT'S NICE AT 4.9%,THOUGH, TO START THERE BECAUSE YOU MAY NOT NEED MINIMUM WAGE WORK. I MEAN, IFTHE LABOR MARKET IS TIGHT, YOU INCREASE DEMAND AND GROWTH. THIS SHOULD HAPPEN.THIS SHOULD HAPPEN. YOU GUYS COULD BE COMING IN AT A REALLY OPPORTUNE TIME.
MNUCHIN: WELL, IT SHOULDHAPPEN AND WHEN WE CUT CORPORATE TAXES, THAT'S GOING TO CREATE A HUGEOPPORTUNITY FOR MORE JOBS.
KERNEN: HOW WILL YOUREPATRIATE? HOW WILL YOU DO THAT AND SATISFY EVERYONE INVOLVED THAT SAYS NOJOBS ARE CREATED, JUST GOES TO SHAREHOLDERS OR DIVIDENDS.
ROSS: THAT'S JUST NOT TRUE.AND IT'S ALSO NOT TRUE THAT ALL JOBS ARE CREATED EQUAL. A GUY WHO USED TO WORKIN A STEEL MILL NOW FLIPPING HAMBURGERS, HE KNOWS IT'S NOT THE SAME. SO IT'STHE QUALITY OF JOBS AS WELL AS THE QUANTITY. AND ONE OF THE PROBLEMS WITH THERECOVERY IS WHEN THE NEWLY CREATED JOBS ARE NOT NEARLY AS REMUNERATIVE AS WERETHE JOBS THAT WERE LOST. THAT'S A VERY BIG STRUCTURAL PROBLEM.
SORKIN: STEVE, THECONFIRMATION PROCESS MAY BE CHALLENGING. DEMOCRATS ARE ALREADY OUT IN FORCE.THE OPPO RESEARCH, IF YOU WILL, IS OUT. SO LET ME JUST ASK YOU TWO OF THEQUESTIONS I KNOW YOU'RE GOING TO BE ASKED. ONE ABOUT ONEWEST. THIS IS THEHEADLINE FROM BLOOMBERG. "TWO HOUSING ADVOCACY GROUPS ALLEGE THAT ONEWEST BROKEFEDERAL LAWS BY KEEPING BRANCHES OUT OF MINORITY NEIGHBORHOODS AND MAKING FEWMORTGAGES TO BLACK AND LATINO BORROWERS." THIS IS GOING TO BE A QUESTION THAT IKNOW IS GOING TO GET ASKED OVER AND OVER AGAIN.
MNUCHIN: SURE. WELL, LET METELL YOU ONE OF THE MOST PROUD ASPECTS OF MY CAREER WAS BUYING INDYMAC DURINGTHE FINANCIAL CRISIS. WE BROUGHT IT FROM THE GOVERNMENT IN A HIGHLYCOMPETITIVE SIX-MONTH AUCTION. AND WE SAVED A LOT OF JOBS AND CREATED ALOT OF OPPORTUNITIES FOR CORPORATE LOANS. ONE ASPECT TO THAT IS WE BOUGHT THEWORST MORTGAGE PORTFOLIO IN THE HISTORY OF TIME. INDYMAC WAS ABOUT 30ÞLINQUENT LOANS. SO ALL THE LOANS THAT WE UNFORTUNATELY HAD TO FORECLOSE ON,WE DIDN'T ORIGINATE THOSE. THOSE WERE INDYMAC LOANS. AND THE DEAL, WHEN WEMERGED WITH CIT, WAS THE FIRST BANK DEAL TO BE APPROVED POST DODD/FRANK OVER$50 BILLION. WE WENT THROUGH A ONE-YEAR COMMENT PERIOD WITH THE OCC AND THEFED. THE SAME COMMUNITY GROUPS PROTESTED AGAINST THE DEAL. THE REGULATORSLOOKED AT THE DEAL AND THOUGHT IT MADE SENSE.
SORKIN: THERE'S ONE OTHERTHAT'S THE SORT OF AT THE TOP OF THAT LIST, IF YOU WILL. NEW YORK DEPARTMENT OFFINANCIAL SERVICES FOUND OF THE TOP TEN BANKS MORTGAGE SERVICES COMPANIESIDENTIFIED FOR PAYING OUT INSURANCE CLAIMS TO HURRICANE SANDY VICTIMS THATONEWEST WITHHELD THE MOST OF THEIR INSURANCE FUNDS.
MNUCHIN: AGAIN, YOU'RETALKING ABOUT CERTAIN SPECIFIC THINGS WHERE, AGAIN, LET ME JUST SHOW YOU THEFACTS. WE BOUGHT $150 BILLION MORTGAGAE SERVICING PORTFOLIO FROM THE GOVERNMENTTHAT WE TOOK AS PART OF THE DEAL. MOSTLY ALL THIRD PARTY LOANS. WE WERE THE ONLYBANK TO GO THROUGH AND HAVE HIGHLY-RATED SERVICING FOR THE ENTIRE PERIOD OFUNDER OUR OWNERSHIP AND WE'RE VERY PROUD OF THAT.
CARUSO-CABRERA: BOTH OF YOUGUYS UNDERSTAND INTEREST RATES AND THE BOND MARKET VERY WELL. I MEAN, YOU WEREIN CHARGE OF TRADING MORTGAGE BACKED SECURITIES, ET CETERA, RIGHT?
MNUCHIN: MORTGAGES,GOVERNMENTS, MUNICIPALS, A LITTLE BIT OF EVERYTHING.
CARUSO-CABRERA: WHAT DO YOUTHINK ABOUT WHAT HAS HAPPENED TO INTEREST RATES SINCE THE ELECTION AND WHERE DOYOU THINK THEY ARE GOING TO GO?
MNUCHIN: I THINK INTERESTRATES ARE GOING TO STAY RELATIVELY LOW FOR THE NEXT COUPLE OF YEARS. WE'RE IN APERIOD OF TIME OF LOW INTEREST RATES. I THINK WE'LL STAY THERE. AND INTERESTRATES HAVE COME UP A LITTLE BIT WHICH I THINK MAKES SENSE. I THINK WE'RE GOINGTO BE LOOKING AT THE TREASURY ALL DIFFERENT TYPES OF OPPORTUNITIES. WE'LL LOOKAT POTENTIALLY EXTENDING THE MATURITY OF THE DEBT BECAUSE EVENTUALLY WE AREGOING TO HAVE HIGHER INTEREST RATES AND THAT IS SOMETHING THIS COUNTRY IS GOINGTO NEED TO DEAL WITH.
CARUSO-CABRERA: HOW LONG? 50YEARS? 100 YEARS? WILL YOU DO WHAT SOME OF THESE OTHER COUNTRIES ARE DOING?
MNUCHIN: I THINK WE'LL TAKE ALOOK AT EVERYTHING AND SEE WHAT MAKES SENSE.
CARUSO-CABRERA: WHAT DO YOUTHINK, WILBUR? WHY ARE INTEREST RATES GOING UP AND WHERE ARE THEY GOING TO GO?
ROSS: WELL, I THINK THE FED'SGOING RAISE IN DECEMBER. THAT WILL HAVE NOTHING TO DO WITH US.
CARUSO-CABRERA: BUT THAT'SNOT WHY THE 10-YEAR'S RISING, RIGHT? SINCE THE ELECTION?
ROSS: WELL, EVERYTHINGAFFECTS EVERYTHING.
KERNEN: STEVEN, NO GOVERNMENTEXPERIENCE. IT'S LIKE MUSIC – I'M NOT GOING TO SAY IT. BUT, NOGOVERNMENT EXPERIENCE. AND I LOOK AT JACK LEW. ALL HE HAD WAS BUREAUCRATICEXPERIENCE. YOU KNOW THIS STUFF INSIDE OUT. IT MIGHT WORK. LET ME ASK YOU THIS.EVERY TREASURY SECRETARY IN HISTORY HAS SAID STRONG DOLLAR IS IN THE INTERESTOF THE UNITED STATES. BUT THEN I SEE THAT SOMETIMES I SEE THAT EITHER THEFEDERAL RESERVE OR EVEN SOMETIMES THE TREASURY – EVERYBODY LIKES A CHEAPERCURRENCY FOR EXPORTS. WHAT DO WE REALLY WANT IN THIS COUNTRY? WHAT WILL YOUPRESS FOR? STRONG DOLLAR OR CAPITAL COMES IN? OR EVERY TIME WE DO THAT,CORPORATIONS SQUAWK ABOUT CURRENCY HEADWINDS.
MNUCHIN: LET ME JUST SAYFIRST OF ALL, I THINK THE UNITED STATES IS THE GREATEST COUNTRY IN THE WORLD TOINVEST IN AND WE SEE THAT. AND WE SEE THAT MONEY IS POURING INTO THE UNITEDSTATES FOR THOSE REASONS. SO I THINK WE'RE REALLY GOING TO BE FOCUSED ONECONOMIC GROWTH AND CREATING JOBS. AND THAT'S REALLY GOING TO BE THEPRIORITY.
SORKIN: CHINA. CURRENCY.TRUMP'S WANTED TO CALL A MANIPULATOR. IS THAT SOMETHING YOU THINK YOU WANT TODO?
MNUCHIN: WELL I WOULD JUSTSAY, ONE OF THE THINGS, WILBUR AND I ARE GOING TO WORK VERY CLOSELY TOGETHER.SO AS YOU LOOK AT BOTH OF US IN THE U.S. TRADE REPRESENTATIVE, THIS WILL BE ACOORDINATED ASPECT. SO THERE IS ENFORCEMENT ASPECTS OF TRADE AGREEMENTS THATARE IN COMMERCE AND THERE ENFORCEMENT ACTS IN TREASURY. SO IF WE DETERMINE THATWE NEED TO LABEL THEM AS A CURRENCY MANIPULATOR, THAT'S SOMETHING THE TREASURYWOULD DO –
KERNEN: ARE YOU A FAN OFJANET YELLEN, STEVEN?
MNUCHIN: YOU KNOW,LOOK. I THINK SHE'S DONE A GOOD JOB AT THE FED.
KERNEN: SHE SHOULD CONTINUETO SERVE OUT HER TERM?
MNUCHIN: I'M NOT GOING TOCOMMENT ON WHETHER SHE SHOULD OR SHE SHOULDN'T.
KERNEN: WILBUR? JANET YELLEN?YOU A FAN?
ROSS: WHETHER SHE SHOULD ORSHOULDN'T – I THINK THAT SHE DEALT WITH A VERY DIFFICULT SITUATION AND DID AREASONABLY GOOD JOB.
KERNEN: BUT SHE MAY SERVE OUTHER TERM. WOULD SHE BE RENOMINATED?
ROSS: WELL, THAT'S REALLY AQUESTION FOR HER AND THE PRESIDENT. IT'S NOT A QUESTION FOR US.
MNUCHIN: BUT I WILL SAY WE DOHAVE TWO GOVERNOR SPOTS TO FILL AND THAT WILL BE HIGH ON THE PRIORITY LIST.
SORKIN: ARE YOU BOTH GOING TOGET ACTIVE TWITTER ACCOUNTS? IS THAT ON THE LIST?
MNUCHIN: SO THE ANSWER IS IDO NOW HAVE AN ACTIVE TWITTER ACCOUNT ONLY BECAUSE THERE WAS A FAKE TWITTERACCOUNT SO I HAD TO HAVE A REAL ONE. I USED TO HAVE A PSEUDONYM FOR TWITTER ANDI'M TRYING TO GET MY CHECK TO VERIFY ME. SO HOPEFULLY NOW TWITTER WILL GIVE ITTO ME.
KERNEN: WELL GENTLEMEN,CONGRATS ON THE APPOINTMENTS AND GOOD LUCK.
SORKIN: GOOD LUCK.
KERNEN: I DON'T THINK IT'SGOING TO BE –
CARUSO-CABRERA: DID YOU EVERTHINK, WILBUR ROSS, THAT YOU WERE GOING TO WORK FOR THE GOVERNMENT?
KERNEN: YEAH, WE SAID THATALREADY.
ROSS: NO. I DIDN'T THINK IWOULD EVER HAVE A BOSS AGAIN.
KERNEN: YOU'RE GOING TO GETTHROUGH THIS EASILY. JUST YOUR BREADTH OF KNOWLEDGE ON ALL OF THESE THINGS.THANK YOU.
MNUCHIN: THANK YOU VERY MUCH.
SORKIN: THANK YOU.CONGRATULATIONS. WE LOOK FORWARD TO SEEING YOU MANY MORE TIMES.
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With CNBC in the U.S., CNBCin Asia Pacific, CNBC in Europe, Middle East and Africa, and CNBC World, CNBCis the recognized world leader in business news and provides real-timefinancial market coverage and business information to approximately 381 millionhomes worldwide, including more than 94 million households in the United Statesand Canada. CNBC also provides daily business updates to 400 million householdsacross China. The network's 15 live hours a day of business programming inNorth America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC'sglobal headquarters in Englewood Cliffs, N.J., and includes reports from CNBCNews bureaus worldwide. CNBC at night features a mix of new realityprogramming, CNBC's highly successful series produced exclusively for CNBC anda number of distinctive in-house documentaries.
CNBC also has a vastportfolio of digital products which deliver real-time financial market news andinformation across a variety of platforms including: CNBC.com; CNBC PRO, thepremium, integrated desktop/mobile service that provides live access to CNBCprogramming, exclusive video content and global market data and analysis; asuite of CNBC mobile products including the CNBC Apps for iOS, Android andWindows devices; and additional products such as the CNBC App for the AppleWatch and Apple TV.
Members of the media canreceive more information about CNBC and its programming on the NBCUniversalMedia Village Web site at http://www.nbcumv.com/programming/cnbc.
For more information aboutNBCUniversal, please visit http://www.NBCUniversal.com.