Were seeing wage growth. And some of these things that youre just labeling regulation are also why were able to be in a place to meet our commitments to rereduce emissions and meet standards to make this a safer world by having our climate problems not engulf our future. Theres a lot of things going on inside the package that you call just more regulation. This economy is a stronger economy because of the policies weve pursued. It is not as strong an economy as wed like to see. A lot of what i see as having held back the u. S. Economy is the headwinds internationally. Weve seen probably half a percentage point of gdp shaved off the u. S. Economy because demand globally has been weak. Thats one of the reasons we put so much time into trying help move the global debate towards using policy tool tools to grow the demand and economy. Weve made progress. Youre seeing a number of places around the world put policy in place using fiscal tools and monetary tools. The United States is looked to in the world as being a resilient economy thats bounced back. What i tell my colleagues around the world, we cant be the only engine in the world economy. There need to be multiple engines. I want to get to the overall economy. One of the things you talked about is this need to invest in infrastructure. The republican nominee has come up with Something Like 500 billion for spending on infrastructure. Is that a good number . I have not dissected any of the campaign proposals. Im not doing politics in my life. Im happy to talk about our policies. Whats the right number for Infrastructure Investment . Assume were talking over a tenyear period. The right number is a very, very big one. We have trillions of dollars that need to be invested. Its not all public money. What we did a little over a year ago, we extended our surface transportation funding for five years basically at level funding, a little bit of an increase, enough to maintain what were doing now. Not enough to build the new facilities that we need to compete in the 21st century. I think putting several hundred billion dollars of federal money into a commitment on a multiyear basis to build infrastructure would have an effect on state and local planning that would bring more state and local resources to bear. And just as importantly would be a foundation for Public Private partnerships, which is what gives you the ability to leverage the amount of resource youre putting in. This is not all a question of federal funding. Federal funning has been the foundation. One of the things we do is we create a certainty out there that theres steady flow to get projects off the drawing boards. Without that, the whole system slows down. I think we have taken some time off from driving that process forward, not to the point that its irreparable but we cant take another decade off. At the same time, when we look at Overall Economic growth, were doing just around 1 the last three quarters. How much concern has this caused you that we cant even get to the new lower new normal of 2 . I think when you go quarter to quarter, sometimes you can overexplain an individual quarter. Weve seen growth in the low 2 for a number of years now. Were continuing to see strong labor markets. Were continuing to see improvements in wage growth. Consumers in the u. S. Are very strong. Housing is doing better. Autos have been doing very well. The weak spot on the economic picture is investment. And i think that if we could figure out what it is thats going on in investment and productivity to drive the investment numbers forward, that would be very important. I mean, i think that there is a lingering lack of confidence in the Global Economy coming out of the economic crisis. It was a deep, deep economic crisis. It left a concern. How do you know were not snapping back . I think in the United States weve demonstrated pretty decisively that were not slipping back. There are other parts of the world where every three to six months you wonder is it going one way or the other . Theres a lot of geoPolitical Risks. We have to stabilize those risks. One of the things we do when when meet in the g20 is focus on that. We met in china at the g20 leaders meeting. You heard a few things at that meeting that were important and different. One is, what i just talked about in terms of inclusive growth, in terms of everyone sharing in it. We used to be a chorus of maybe one talking about inclusive growth. All the leaders were talking about inclusive growth. I think theres a clear understanding that we have to show that the benefits of growth get to working people. Globally right now. Secondly, there was a commitment to using all policy tools. That is much stronger than its been in the past where heads of state are talking about using the fiscal space they have more vigorously. I think on the Exchange Rate issues that have been so vexing for a long time, we have a clear agreement to refrain from competitive devaluation and to coordinate together so that in moments of volatility we dont see unilateral actions that destabilize the Global Economy. I want to come back to one of the things you talked about using the fiscal side. Is the fiscal side getting a message from the monetary side that theres only so far theyre willing to go. Mario draghi said theresmade a. The fed is suggesting. I dont comment on Monetary Policy, particularly not fed policy. Its a question about fiscal policy. I dont think fiscal authorities needed messages from anyone that fiscal tools are important. Weve been delivering that message consistently since 2009. Ive been doing it as treasury secretary for the last 3 1 2 years. What weve seen over the last three years is a shift in the debate. When i became treasury secretary, there was a global debate about posterity versus growth. We went to g7 and g20 meetings. Thered be debates about austerity versus growth. Those debates are over. There is focus on making sure there are sustainable fiscal plans. In terms of shortterm programs, the Global Community embraced idea that we need to use all policy tools. If you look around the world, even in the last six months youve seen from china to canada, south korea to japan, more use of fiscal tools in a responsible way. It doesnt mean build up debt thats unsustainable. It does mean dont try to hit deficit targets and debt targets in the short term when you need to get your economic engine moving. I think fiscal authorities during this recession put more pressure on monetary authorities than we should have. Ive said that all along. Here in the United States, we went too fast in terms of some of the fiscal consolidation. There was a big debate in the United States in 2011 and 2012 about this. Weve done okay. Weve done we could have done better. We could have had a little more growth if we put some of the savings a few years out and less of the savings in the front end. Other countries didnt have the recovery act. They didnt do the payroll tax cut. They didnt come back repeatedly and put more fiscal power to deal with economies that needed it. It wasnt always pretty in the United States but we used all of our policy tools, our fed was aggressive. Our Fiscal Program was big. And our reform in the Financial System was a structural reform we needed here in the United States. There are still challenges in the future but our call internationally is for all the tools to be used. I want to talk about challenges in the future. Can you give us an idea, im betting you thought about this. What goes in the letter that you leave for your successor . This may surprise you, steve. Thats something you think about when you get to the last day in my experience. You dont write it four months in advance. I think that were still focused on the work we have to finish in these next four months. I think that the economy that we are working through now and that we will leave behind is much, much stronger in almost every dimension that the economy we inherited. Im proud of that. Thats something the American People are well served by. That doesnt mean that all the challenges of the future are addressed. These questions of income inequality are deep economic and social issues. And we have put proposals forward that we believe deal with that in a sensible way. To pay for things like education, starting with preschool education, Community College education, to pay for infrastructure and to have an equitable distribution of tax burden to pay for it. Those debates arent over. I think if we take a long break from dealing with all those issues, you pay a price. It starts to stress both the economy and the social fabric. I think weve done enormously important work. I dont think any administration finishes the job. You pass the baton. You give some advice and then you try from the sidelines to help move things in the right direction. I wonder if four months in advance you think about what you do personally. Have you thought about going back to wall street or back to academ academia . Ive made one key decision to live in the same city as my wife for the next four years. After that. Mr. Secretary, i personally look forward to lew the musical. Thanks for joining us. Thanks, steve. That is the treasury secretary with our own Steve Liesman at delivering alpha, talking about everything from wells fargo to the Corporate Tax rate to tpp to governments ability to sell the benefits of globalization, infrastructure, the nagging problem of investment and productivity in this country. Good morning, welcome to squawk on the street. Im Carl Quintanilla. A long day ahead with some big players, big show on mad money tonight. Jim, your thoughts . Look i think its business as usual. I think jack lew talks similar about what hes said a few times at delivery alpha. The overhang in the market, iea says theres a big glut of oil. Yesterday the market went up. As nutty as this is, what jack lew says, what companies say, it doesnt matter. We are tick by tick to oil. We are just on oil. Did you get your trading card for the different fed players . I mean, did you get the stick of gum from topps . Now theyre done. Theyre finally done talking for a few days. I was going to trade you a brainard for for what, a rosen were stick. Youre right about crude which is down on this for example from the iea saying that the glut is expected to last longer than expected. Well get api tonight. As you said we enter this blackout period before the meeting next week. Well, carl, how can it be that whoever speaks last controls the market . Honestly, weve gotten to a point where the market is so thin, the market has become too stupid to believe. If it really is every tick by oil and whoever speaks from the fed and none of the fundamentals, i think were stuck in a volatile world that makes it very difficult for someone at home to do anything other than stay the course. If you try to trade this thing, youre going to get whip sawed. I will give you one positive here. Its not going to happen anytime soon, perhaps next year when we have a new president. Secretary lew talking about Corporate Tax reform. Both candidates for president are talking about Corporate Tax reform. That would certainly be positive. I dont know if 25 to 28 is something that will excite corporations. Overall, when you think about that, that is seen as a positive, the ability to get 2 trillion, some portion of it back here has to be seen as a positive. Not short term, not today but longer term something important and something that is desperately needed as the saekt made clear. Weve seen a big inkrooess in buy backs. Okay . The Dividend Growth has slowed down. And if treasuries arent going to have a big if were not going to see a big rise in Interest Rates we need more dividends to keep this market where it is. I find the market i dont want to say its precarious but i do have to say the markets volatility, the newfound volatility after a nice, calm period is scaring people in either direction its scaring people. Your point being that money that might one day be brought back could help support dividends although a lot of people would rather see it support job growth. Capital investment. Yes. I think there wont be a deal. There wont be a deal. I think that money comes back and they do whatever they want with it. Boy is that money sizable. I think its usually bullish. Its interesting you say that. Thats the first thing thats come out of the election that both candidates give you other than big defense spending. 600 billion is not enough. We need more ships. And guns. And ships. Carl, look, i find were at one of these moments where it is really like that today the apple data point is more important than anything else other than oil. If oil were up, apple would be up 3. Yes. We are going to talk a lot about apple later on this morning. The iphone 7 reviews are out en masse as of 6 00 a. M. This morning. Largely positive. Were beginning to talk about how buyers may or may not be influenced by various innovations like these new air pods. Finally, wells fargo announcing it will eliminate all Product Sales goals for retail bankers effecti ivive at the beginning the year. The move comes after that 185 million settlement with regulators for allegedly allowing employees opening up to 2 million customer accounts they never wanted. Jim will talk to stump tonight on mad money. You heard secretary lew say that compensation and culture make a difference. Jim, you want to take a listen to that . Sure. Heres secretary lew. What ive seen from what theyve done is bad behavior, they were correct to take action against. How that flows through in terms of next consequences is beginning to depend on the facts of case. What i can tell you is, theres a lot of talk in washington these days about rolling back dodd frank, about rolling back the law, changing the law that created the agency that uncovered and task action against this. This ought to be a moment where people stop and remember when you dont have proper items in place. Andrew ross sorkin with a good column in the times today. Basically calling it a sham. A breathtaking sham. Yes. I think john stumpf will argue that a lot of this is untrue, that the bank founded itself, that the bank has fired a lot of people, including managers who were involved. I bet, john, when we ask him about whos going to have to pay in management, will defend upper Level Management and, therefore, you get the situation where the secretary said they. And i think that the key issue for me to try to evaluate tonight is who is they. Is they the Bank Managers and it stops there or is they the board . Is they john stumpf. Theres such a level of outrage for it to stop at who has so far been caught, so to speak, will be unacceptable to washington. I dont know what to make of a fact that it was 1. 5 million over five years. Such a small amount of money. This is something that andrew pointed out in his column and yet the numbers, the other numbers, the 5,300 employees, the hundreds of thousands of fake accounts. Okay. The number is tiny. Maybe that number is wrong. Okay. Maybe thats wrong. Maybe its unsubstantiated but not fake. I think that is what i have to find out. I agree when i read andrews column, it seems to be that would amount to say 38 cents. Right. Theres something wrong with the calculations. Ive got to find out what is wrong with these calculations. They dont make sense. Will i find out . Yes. I dont think its going to be a friendly interview like the last time i sat down with john. This is the first opportunity to try to get some questions answered. Thats largely what there are here. No free passes. No. Its true ive had john look, john stumpf, the bank has been incredibly profitable. How much was cross selling . Crossselling is not a bad word. Or a bad hyphenate word. How much was reckless, how much was incentivized and how many people did they catch . Who have they turned in . I want to know. We cant wait for mad money. I cant either. Lets just do it. When we come back this morning, as we said, apple getting good news. The reviews regarding the iphone 7 are pretty good. Well fill you in. A lot more coming up from delivering alpha, including a Panel Discussion with former treasury secretary time geithner and ray dalio of bridgewater with 115 billion under management. Take another look at the premarket. Jim and david will talk to chanos, bill miller. Oil is down triple digits. Well be back in just a minute. [text message alert rings] [texting keystrokes] apples up in the premarket, tmobile announcing preors of the im phone 7 and 7 plus shattered all previous iphone records of the wireless carrier. Both tmobile and sprint say preorders friday through monday were up almost four times compared to the next most popular iphone. Question, jim, is whether or not this is really worth two points or not. It is if you look at sprint which just put out an announcement. I think well discover that verizon and at t have very similar, very similar increases. Fourfold at sprint as well. Theyre talking about. The question i have is we know tmobile has been successful at getting a lot of new subscribers. Percentagewise, what are we talking about aprils ples to ap when you look at sprint out, preorders of the iphone 7, iphone 7 plus, increasing nearly four times. Youre getting a sense there was a good amount of demand on weekend one. Indeed. Walt mossberg, a longtime apple watcher calls it an outstanding phone. But adds not as compelling an upgrade as many of its predecessors. Those expectations arguably built in as the narrative has been writing that the big changes are coming in the 8 next year. I think one of the things that happened is there is a gap between the snap judgment. The snap judgment was that it was a bore, ridiculous, who cares, versus what were seeing. Tmobile, we dont know how many people tmobile sign up in the interim. Were trying to direct message, tweet john. This is the first time john ledger has never been on twitter. Just respond. This is important. I know you were on a few minutes ago. If you put together sprint, at t and verizon and they all say this, you have to