BUCK: Let’s talk to Stephen Moore now, former economic adviser to President Trump, co-founder of the Committee to Unleash Prosperity and a senior economist at FreedomWorks. We promised we’d have him for you yesterday. We got him for you today. Steve, thanks for being with us.

MOORE: I could hear you yesterday (audio drop) on the show, and, you know, I do think, by the way, that we still have a chance at stopping a recession, but we better start getting going pretty soon, and we gotta stop the massive trillions of dollars of spending that are going on in Washington. That is the match that lit this forest fire. So, when I hear Chucky Schumer and Nancy Pelosi saying, “Oh, we have more spending, more taxes,” I just want to (audio drop).

BUCK: How much of this do you think can be reasonably set? If we’re gonna be fair-minded about this, how much of what we’re seeing right now is a result of what the Biden Democrats have done in the last 15 months or so?

MOORE: Well, I’ll give you a number. You’re not gonna believe this, but you can look it up because it happens to be true. So when Trump left office, Buck, do you want to take a guess at what the inflation rate was of the U.S. economy in January of 2021?

BUCK: Um, 1.8%?

MOORE: (chuckling) You’re pretty close. 1.5%.

BUCK: Not bad, Buckster. Okay.

MOORE: Pretty good. So think about that now. But think about that, really. 1.5% in January of 2021, and here we are, what, 14, 15 months later, we’re 8.5%? How do you screw things up that quickly? (laughing) I wouldn’t have thought it was possible. So, yeah, this is a result of the massive spending.

We spent $3 trillion above the normal budget. Remember they had the Build Back Better? Well, we… By the way, can you imagine if they had passed that $5 trillion Build Back Better bill? Thank God for Joe Manchin. My God. We’d have 18 percent inflation right now if we had passed that bill.

“It’s now definitely over 50%,” says former Fed Vice Chair Roger Ferguson on the chances of a recession. “It’s going to be a very, very tricky tightrope through 2023. I do fear a recession. I’m hoping it will be a mild one.” pic.twitter.com/p71Yo1rI6e

— Squawk Box (@SquawkCNBC) May 2, 2022

BUCK: How much worse do you think inflation is gonna get over let’s say the next six months or so, because even if it stays at the current level, it’s clearly a liability for Democrats in the midterms. But I’ve heard from people… Look, we just had the former Fed vice chair as a sound bite saying that a recession is almost inevitable. Between that and the possibility of inflation going even a little bit higher, feels like we’re heading into rough times here, Steve.

MOORE: Look, as I said earlier, I still think it’s not too late to turn around this Titanic (laughing) before it hits the iceberg but I’m not seeing any moves in Washington that are moving us that way. I mean, when you have Chuck Schumer say, “Oh, we’re gonna raise taxes on the oil companies,” how is that gonna help? Explain that one to me, Buck. So, we’re gonna increase the tax on the oil companies and that’s gonna reduce the oil prices?

BUCK: I actually was wondering, what even is the argument that Chuck Schumer thinks he is making? I often have to frame this for Democrats ’cause they say things and you ask, “How is that even supposed to work?”

MOORE: Well, I can’t explain it. It’s inexplicable. You know, and then you have this talk about $1.5 trillion of what they call student loan, quote, “forgiveness.” I have that in air quotes because, you know, when they say forgiveness, that means you and I are gonna have to pay that and the taxpayers will, we’re gonna add another trillion dollars to the debt. We’ve got to bring spending down. I want to be very clear on this for your listeners. When you have 8.5% inflation, remember we saw that report that came out last week that showed negative growth for the first quarter of the economy?

BUCK: Mmm-hmm.

MOORE: The nominal growth before inflation the growth was pretty good, it was a pretty good number perform it was like 6% but you’ve gotta get to 8.5% just to stay even, you know what I mean? When you’ve got eight and a half percent inflation rate so if you’ve got a 5% or 6% pay raise which a lot of workers are getting you’re falling behind, you’re falling behind the inflation rate.

When you’re seeing what’s happened with the stock market, April was the worst month for the stock market in many, many years, and that was just in nominal terms when you take into account inflation ’cause when you make an investment you want to make sure your investment returns are keeping pace with inflation. That’s not happening. So we’re in a very precarious position right now. Until we get that inflation rate down, we’re not gonna see much improvement.

BUCK: We’re speaking to Stephen Moore, former economic adviser to President Trump and senior economist at FreedomWorks. What does it mean if interest rates starlight to normalize more, if interest rates keep going up? How is that gonna affect this picture?

MOORE: Well, by the way, let me just use an analogy ’cause I think this is really such a critical point. When talking about this 8.55 inflation. You know, imagine when you get up in the morning, Buck, I know you go right to the fitness center and you get on that that rolls around you, jog on the machine. Well, let’s say you’re jogging at seven miles per hour which is a pretty good pace, but the machine is rolling at eight and a half miles per hour.

You’re gonna fall flat on your face, right? And that’s kind of what’s happening with this economy. We’ve got the rollers going so fast because of inflation that nobody can keep up with it. And, now, you are quite correct that the Fed is going to take some corrective action. In fact, they may act as soon as today. I don’t know exactly what they’re gonna make their move, but it will be very soon.

And that will be as many as 50 basis points, so they’ll raise interest rates by half a percentage point. It’s about time, you know? (laughs) I’ve been saying that. I think I said this on your show six months ago they should be raising rates and so they’ve been way behind the curve and inflation to use year analogy it’s like a cancer cell in your body.

As soon as you’re detected with cancer, God forbid, you gotta take that out, right? You gotta get rid of those cancer cells. You can’t let them metastasize, and that’s what we’re doing with inflation. We’re not doing anything about it and it’s getting worse and worse and worse, and it is gonna kill the economy if it continues.

BUCK: Is there anybody in this administration who you think — I’m talking about cabinet, all officials, talking about Yellen, Janet Yellen — who gets it and might try to steer things more in the right direction? ‘Cause if we’re relying on Joe Biden, Kamala Harris, and Jen Psaki to make macroeconomic decisions, it’s time to head for the bunker.

MOORE: I know. You’re exactly right. So, I’m a Republican. I’ll admit that — and I don’t always love the Republicans by any means. But I have to give people like Bill Clinton credit. You know, he had Bob Rubin — remember Bob Rubin. He was his Treasury secretary. And Bob Rubin was a very sound-minded guy. I didn’t always agree with him. But he understood you gotta keep your deficits under control and you gotta have a good economy.

There is no Bob Rubin in this administration. I am so disappointed with Janet Yellen, I mean, so disappointed. She’s gone completely woke on us. She seems to have forgotten all the good economics she learned when she was head of the American Economic Association and so on. And it’s all become political with her. So I hate to say this, Buck.

But I can’t point to a single person in this administration who understands the basics of running a business, running an economy. They’re just not there. I mean, Pete Buttigieg? Come on. Think about this. You’ve got a transportation secretary who knows nothing about transportation. You get a health secretary knows nothing about health. You’ve got a commerce secretary never run a business. (laughing)

You’ve got an energy secretary who, you know, is a former governor knows nothing. I mean, remember the Saturday Night Live “Not Ready for Prime Time Players”? Well, that’s what we have in the Biden administration. They’re not ready for prime time players.

And if I were advising Biden, I’d say bring some people into this administration who knows something about how to run a business, how to make a payroll and how to run an economy ’cause I don’t… I hate to say this. I don’t see any. Do you, Buck? I mean, who do you turn to?

BUCK: No. I was wondering. You’re the economist. I’m sitting here wondering if you got a friend named Bob or Tom or something who works at Treasury who’s up high and can actually make some good things happen because I know the players in this White House, and they’re not gonna get it done. I gotta say, Steven, you’re not making me feel any better about the economy future we’ve got for the six months.

MOORE: Well, you know, I’ll quote my buddy Larry Kudlow. You know Larry, of course, and Larry says it very well: The cavalry is coming. I mean, people are fed up with this. The question is whether —

BUCK: Yeah, but is it coming in three years, Steven?

MOORE: (laughing)

BUCK: That’s a ways off. A lot of economic pain can happen in the next three years. And to that end, the Republicans going into this midterm to make sure the cavalry can come — to continue with the analogy for a second — what should be their primary economic message? Obviously, things are bad. We know that. We talk about that on the show every day with inflation and a whole range of economic issues. What should Republicans say they would do differently?

MOORE: Well, get back to the Trump policies. I mean, look, I didn’t always agree with Trump’s behavior. I didn’t agree with some of the things he did on the election and that kind of stuff, but his policies, Buck, just his policies on deregulating the economy, getting tough with China, promoting American energy, reducing taxes to make America more efficient, getting tough on crime.

All of those policies were very common-sensical. I can’t tell you how many times people come up to me, even Democrats say, “You know, I didn’t like Trump very much, but I liked what he did. I liked his policies.” (laughing) So why can’t we have it? I really honestly believe that. This is why I’m so frustrated right now, Buck. If Trump were president today, the economy would be absolutely booming.

BUCK: I agree. (laughing)

MOORE: You know?

BUCK: (laughing) I hope we can set this — or start to set this — right coming up in the midterms. Stephen Moore, everybody. Go check out his stuff at FreedomWorks. Steven, always appreciate it. Thanks for calling in.

MOORE: Thanks, Buck. Anytime. Take care.