In Tuesday’s WarRoom conversation between Steve Bannon and Treasury economist Joe LaVorgna, the two laid out a clear picture of how President Trump’s latest economic package—referred to as the "One Big, Beautiful Bill”—is already reshaping the U.S. economy. At the heart of the policy is a significant shift toward encouraging domestic manufacturing and long-term investment in American industry.

Quick Clip:

JOE LAVORGNA: While Biden printed money, Trump fueled real growth with pro-business policy.

Capital investment surged in early 2025, the fastest pace since 1997.

That’s what drives productivity and rising wages.@Lavorgnanomics pic.twitter.com/6yXiyArT5C

— Bannon’s WarRoom (@Bannons_WarRoom) July 22, 2025

The key mechanism driving this revival is the expensing of capital equipment and factory construction, according to Lavorgna. Businesses can now immediately deduct 100% of their spending on machinery, office equipment, and even new manufacturing plants from their taxes, he explained to the WarRoom audience. That is a strong signal to investors: if you want access to the U.S. market, you need to build here.

According to LaVorgna, this strategy is already working. The policy was made retroactive to the time Trump first took office, meaning companies that anticipated the bill’s passage had already begun building and expanding. That early momentum, combined with the official rollout, has triggered what Bannon called a "CapEx comeback”—and the data supports it.

In the first half of the year, capital expenditures on business equipment rose at an annualized rate of nearly 17%, the fastest pace since 1997 (excluding the pandemic anomaly). In Q1 alone, business equipment production jumped over 23%. This surge in investment isn’t theoretical—it’s happening now, and it’s laying the groundwork for long-term productivity gains.

Why does this matter?

Capital investment—whether it’s a new factory floor or upgraded machinery—is a leading driver of economic growth. It raises productivity, which in turn leads to higher wages. LaVorgna emphasized that this trend is fueling what he and others are calling a "blue-collar boom.” Workers are seeing the benefits of expanded production and revitalized manufacturing sectors, and the U.S. is becoming a far more attractive destination for industrial capital, both domestic and foreign.

Bannon noted that Trump’s earlier tax cuts, passed in his first term, were a strong start. But this new legislation takes it even further by focusing specifically on production and manufacturing. It rewards companies not just for hiring but for building—a supply-side approach that directly strengthens the country’s industrial base.

Despite the significant shift underway, mainstream financial media have mostly missed the story. Axios covered it in detail, but even they buried the lead. LaVorgna criticized projections from government agencies, such as the Congressional Budget Office (CBO), which continue to predict sluggish sub-2% growth. Those forecasts, he argued, are stuck in a pre-2016 mindset and don’t reflect the changes already unfolding under Trump’s second term.

Looking ahead, LaVorgna pointed to several key indicators to watch: capital expenditures in GDP reports, growth in industrial production, a rising ISM manufacturing index, and increases in manufacturing job numbers. All of these will reflect how this new investment strategy is translating into real economic strength.

Trump’s economic strategy is already reshaping America’s industrial landscape. Through targeted tax incentives and a clear focus on domestic production, the administration is making the U.S. more competitive, more productive, and more self-reliant. Whether Washington’s traditional class wants to admit it or not, the numbers speak for themselves.

For more on this discussion, watch this full segment: