tv Bloomberg Markets Balance of Power Bloomberg November 22, 2017 1:00pm-2:00pm EST
york and washington, d.c.. kevin: i am here and washington, d.c.. welcome to bloomberg markets, balance of power with a focus on the intersection of politics and the economy. shery: hero the top stories we are following right now. one hurdle down for republican lawmakers, several more to go. -- has agreed to get rid of the obamacare and -- health care mandate, boosting the other passing the bill. the fed in a battle over inflation and monetary policy, minutes away from the -- minutes from the fomc meeting will be released one hour from now. jpmorgan ceo and chairman jamie dimon will be taking the seat in moments. we will bring you that meeting, live. ♪ kevin: the odds of passing the
senate republican tax bill are improving. alaska senator lisa murkowski has agreed to kill obamacare's individual mandate. she has not yet endorsed the tax bill but said she preferred not to mix it with health care. that is welcome news to our next guest, grover norquist, the president of americans for tax reform. he joins us from washington. happy turkey day. grover: it is a big day for tax reform. kevin: let me ask you about whether or not individuals in the middle class are going to get a tax break, when they fill out their taxes in january. grover: they are going to be better off and i suggest you look at three different buckets. what is your income this year and next year after-tax? most people will see a tax reduction in their cash flow. the second bucket is what happens to your assets? if you have a 401(k), if you own stocks. when we take the corporate rate,
that increases the after-tax cash flow. kevin: we have already seen them going up. what is the third one? grover: the third is the people who don't have a job yet. they could get one with economic growth. those are three areas for people will be better off and if you look at all the groups that are better off, is there somebody in the middle because they invested oddly in tax-deductible things, maybe one or two, but all groups will see significant tax reduction. shery: those tax reductions would be temporary for individuals when it comes to the senate bill. is that the right way to go about doing tax reform? grover: interestingly, they are temporary if you believe that the democrats in the future would not extend the tax cuts for individuals, not extend the tax credit for taking care of independent -- taking care of an
independent. the things that lapse are the ones that even democrats would have to extend. this happened with president obama and the democrats agreeing to make permanent 85% of the bush tax cuts back in 2012. what we have done is laid out all the ones they are going to make permanent and said they can lapse. the ones that democrats don't understand, those are permanent now. kevin: an interesting point you are making because when i look i the calendar for next year, am looking at about the spring when president trump says he wants to take up welfare reform and i am hearing you on the point of the three different groups. my concern is that if folks in the middle class, and suburban philadelphia in wisconsin, in michigan, they fill out their taxes january and they are staring down a republican-controlled white house and congress and don't see tax relief, that is a pretty big
political wager. good news is, almost everyone else will see this. this april, you are paying last year taxes. these are not trump taxes in april. as you do a calculation and look through, if there is some group not we missed and there is just a person here or there, but some structural problem, that will be fixed in the april legislation, the budget reconciliation package that does welfare reform and some taxes because changes in spending give you room to do more tax cuts. that will be fixed before anybody ever writes a check for higher taxes. the chances that any significant number or group of people would be hit is close to zero. shery: the u.s. debt right now will come close to 110% of gdp. that ratio is really high, which reduces the trend of growth according to economist.
is it fair to assume such big economic boosts coming from these taxes? grover: the answer is yes. when you take marginal rates down, you increase the after-tax rate of return for every company by about 23%. when you go to full and immediate business expensing for plant equipment, cars, trucks and machineries, -- machinery, you reduce the cost of investment. we are going to reduce the cost of investment and increase the after-tax benefit. this is not just bringing investment into the united states. this brings investment from the entire world. the old model that said if you have $1 billion in debt from the federal deficit, somehow a billion dollars disappears and is no longer available, it makes sense that there was no such thing as france, england, china. shery: all those other countries. grover: where people have a lot of money and they invest in the
united states and they will invest more when investment becomes less expensive and the payout becomes more. kevin: this is an interesting point that you are making. i think shery's question is excellent. it is odd to hear republicans not have as much concern about growing the national deficit. is, whymy question now is this plan so unpopular? why is this tax relief plan so unpopular and yet it is still moving along? the level ofse unpopularity comes from disinformation that people are getting. kevin: i have to push back because you know in the spring when we do get to welfare reform , the elizabeth warren's are going to be out in full force and they are going to be pressing and saying that you are messing with benefits for folks who need it. grover: they can do that and
they lost that fight in 1996. we know that when you do welfare , some work requirements, some time limits, you make people who deserve some help better off and you get people who really ought to be working to get out into the workforce. we are also going to have the economy growing. it is tough to shove someone out of the workforce if there are not opportunities. there areave now is people saying there is this problem or this problem. when the bill passes, all of it -- all of a sudden, these assertions become mute and people can see exactly what is going to happen and what is going to happen is extremely good. we have seen this in other countries. i just got a briefing from the ambassador of hungary. they took their corporate rate
down dramatically and have seen strong economic growth. france is cutting the rates. -- there rates. shery: you -- their rates. shery: you are confident the deficit hawks will not make a comeback? grover: we are looking at a $1.5 trillion total reduction in taxes. that is because corker came up with that number. this is not some number that got dropped in front of him. bob corker, a great senator from that,see, a mayor before has been part of writing this bill since the beginning. the rest in the senate as well have played a role in this. the $1.5 trillion says on a static model it would reduce taxes by $1.5 trillion. if you can if you grow that 3% a year for a decade, the government nets $2.5 trillion.
you are assuming a little better than 1.5% and you have a revenue neutral bill. i think we will do better than that. kevin: can you guarantee that when folks in the middle class across the country, what are they are in the states that president trump won, that they will see their taxes go down if this bill passes? grover: if there is anything that got missed somewhere, there is another bite at the apple in april. kevin: that is going to decide the 2018 elections. grover: that is why i am excited. kevin: have a very happy thanksgiving. shery: i do have one more question. this is coming from a viewer. one of our viewers is sending us is anage asking why infrastructure spending a more effective way to stimulate the economy, given that a professor whereas is done here
tax cuts would incentivize investing in any other country. grover: infrastructure is a french word for government spending and not roads. if they wanted to build roads, they would say roads. when politicians talk about infrastructure, and talk about those speedy trains that are not speedy and don't go anywhere. california is wasting millions of dollars on that kind of a project. we have real problems with mr. alec -- with misallocation of resources in the name of infrastructure. when you pay your gasoline taxes, that should pay for all the roads we need, except the gets siphoned off into things that aren't roads. politicians don't build roads because they like to use roads to hold hostage. this is exactly the problem that japan had with the investment on all sorts of things that did not pan out. we will do infrastructure
improvements, but part of that is reforming how you do it. the process alone can double the cost of a road if you delay building it. we know how to build a bridge. caribou do not walk over bridges. this should be able to be done in years -- in months, not years. kevin: grover norquist does not like a structure bank. grover: it is a slush fund for politicians to be spent on everything but roads. kevin: thank you to grover norquist, president of americans for tax reform. shery: a little downside pressure for u.s. markets. julie hyman is here with the latest. julie: we are seeing a mixed picture. the nasdaq is trading at a record, but just barely after all three major averages soared to records, yesterday.
is that it however is interesting to note that if we have this discussion about tax reform, that small caps were the best performers. take a look at the bloomberg. this shows the major averages on a weekly basis. i want to draw your attention to this week, the russell is the big winner with about a 1.8% gain, followed by the nasdaq. the s&p and the dow are neck and neck as we close at those records. let's look at some of the movers on the small caps side. the likes of tivo on the move. that stock is up 3%. they won a patent fight against comcast that could give them a legal advantage in a prolonged royalty fight they have been having with comcast. was in -- s according to the analyst, the company is remaking their data
finally, irobot is trading lower. one analyst says if you look online for a promotion for its running $100it is off specials on four roomba models. there appears to be potentially a little concern about discounting. elsewhere today, we have been watching the progress of a number of different deals. those that are happening and those that may happen. -- had been in talks with akzonobel is now getting a counter bid from nippon paint. rockwell automation is burning the third takeover attempt from emerson electric. saying that it is still undervalued. rockwell automation trading lower and emerson electric is trading higher. shery: thank you.
kevin: this is bloomberg markets: balance of power. shery: let's check in on the bloomberg first word news. >> north korea today said president trump's decision to relist it as a state sponsor of terrorism amounts to serious provocation. the regime's official news -- news agency says the designation justifies the country's continued development of nuclear weapons in order to protect
itself from american hostility. -- assessas declared to be ethnic cleansing. secretary of state you -- secretary of state rex tillerson says they will work united nations in myanmar. vigilantes have been accused of attacking villages. more than six -- more than 600,000 have fled. a second federal judge has stopped president trump's proposed ban of trans-genders in the military. it supports the ruling that month that said the administration could not provide a solid reason for the proposal. as we sit down for thanks giving dinner, americans seem quiet on whether to serve a side dish of politics. research finds that 39% dread the thought of politics coming up while 35% are eager for the conversation. 23% don't feel strongly either way. they probably just want to be
turkey. 20 -- global news, 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: i think -- kevin: i think most family should avoid talking about politics. on the fcc's corporate filing database there seems to have -- -- allows companies to practice filing. now it seems the breach attempt came from eastern europe, so let's bring in then bayne -- and then bayne -- ben bayne. there is this report that uber had a hack and it seems like anytime there is a hack in the private sector, it is a different response than when the government gets hacked. why is that and what does the government need to do to better protect its information? a lote have already seen
of scrutiny on the sec and other agencies in the federal government on how they are protecting sensitive data. government has a big treasure trove that would form anything we could even imagine a private company have, to the government right now what agents -- and agencies like the sec are trying to find a way to make sure it is safe. they are looking for their practices, what kind of information they need, what kind they don't need and they will have to adjust their policies. worth noting the sec is the agency that turns run the corporations and says if you have a cyber attack, you have to let us know if it is important. kevin: pot calling the kettle black? ben: there is a lot of criticism right now. the former chair said he discovered this in august and said he has taken steps. this is the latest news in a ongoing problem they are going to have to deal with. shery: that irony has not been lost.
doing note there was any suspicious trading around the breach -- do we know if there was any suspicious trading around the breach? ben: it seems like when they said this, they believe there may have been illicit trading. we don't know if insider trading happened. the sec's enforcement division has an ongoing investigation. that is what everyone is waiting to see, what happens. worth noting, the piece of this edgar corporate filing system that had been breached is for dummy filing. a newer company might want to get comfortable with the system, so they put some forms to the sec and figure out how the hosting works. they are told not to put sensitive information, but we understand some people put things like names and social security numbers and when this
breach happened, whoever was behind it who likely came from eastern europe, they got their hands on it. kevin: from your perspective, how is the public-private partnership on private security working in this administration? ben: it is a little early. certainly not the first and administration that has dealt with this, but i remember seven or eight years ago, covering cybersecurity in washington and they were talking about what they were going to do with this problem. corporations one of the government to do certain things and the government wanted corporations to do certain things. there is this push and pull. not a whole lot in terms of a clear standard. congress kicking around the idea of passing some kind of bill. the more of these kinds of incidents happen. you mentioned uber. just more and more pressure to do something. kevin: i think everyone is on
the same team, especially when it is foreign hackers infiltrating u.s. businesses or the u.s. government. thank you for coming on, ben bain. shery: we are still waiting for jamie dimon of jpmorgan to take the stage at the economic club of chicago. we will bring you his comments live when they start. this is bloomberg. ♪
kevin: this is bloomberg markets: balance of power. shery: it is time to take a look at our stock of the hour. guessing,alking about the apparel retailer, guess and they are plunging on pace for the worst day since 2016. abigail doolittle is here to break this down. what is happening? abigail: earnings.
this company has a very strong international presence. more than 50% of their business is outside of the u.s.. we see asia up about 17%. europe up about 19%. take a look at the u.s., down 13%, really waiting overall -- weighing overall. the guidance is pretty negative. that asia strength was enough to cause jeffries to raise their price target. there is one analyst out there. over at evercore isi. he remains impressed by this company's efforts. they do have jennifer lopez as a new marketing asset. online relationships with amazon. a quick look at this chart, it is going to tell the story. a tough turnaround.
sellers very much in control. this is a bullish turnaround pattern. it could have taken the stock much higher. however on this count down, take a look at that, breaking down. if we blow it out longer-term, we see the stock had been up hard and now down and we could see shares continue to drop. shery: it looks ugly. thank you. next, embattled alabama republican senate candidate roy moore is thanking president trump for his support. we will analyze what that means for the gop. this is bloomberg. ♪
rescued from the crash of a u.s. navy airplane in the pacific ocean. it was caring 11 passengers and crew. it was on its way to the uss ronald reagan, which is operating the philippine sea. the navy is still looking for the three other people on board. the chances the senate republican tax bill will pass has gotten better. susan michalski of alaska says she agrees to kill the obamacare individual and eight. earlier, she said she did not want to next taxes with health care. dass was convicted today of genocide and war crimes or his actions during the balkan war of the 1990's. defined until the end, he was ejected from the courtroom at the hague after yelling at judges every thing they said was a lie. he was sentenced to life in prison. in lebanon, the prime minister has put his resignation on hold. he is back in lebanon and took
part in independence day celebrations. he resigned more than two weeks ago while visiting saudi arabia. lebanese officials accusing saudi officials of forcing him to resign. lebanon's president has asked him to delay his resignation. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. moore the scene of roy trumpeting president donald trump's support at a fundraiser on wednesday. we are thankful" for his words before leaving the white house to celebrate thanksgiving with a strong show of support for roy moore." from link has put the senate seat at risk for sliding and the democratic hands. joining us is bloomberg's campaign reporter with us from washington. you were just in alabama and you were talking with supporters on
the ground for roy moore. a lot of folks want to know what is he still have support? >> part of it is his background. roy moore has been in alabama -- in alabama politics. they know them from the 10 commandments battle and the scotus battle. where were these women when he was running for governor or the supreme court seat? there is that plus's history. he is seen as somebody that if he did something wrong, he would not lie about it. he is a god the man and would never do that in the first place. then you have people who say, even if it did happen isn't that bad? a lot of these girls were like 16, which is above the age of consent. in the case of the 14-year-old or the assault that took place at the restaurant, maybe it did not happen. we're seeing the moore campaign break down these women. did the yearbook signature match his signature?
where was the dumpster at the restaurant? trying to discredit these women. kevin: how are they disseminating the information? >> we have seen them have a series of press conferences. i use the word "press conference" loosely. kevin: which was not a press conference. >> they've had these events where they have come out and say they have a series of lawyers cannot break down the questions. sometimes moore will be there or his wife will be there or other women backing his character. emailsve these emails, to supporters and breitbart writing articles backing him as well. shery: take a listen to what president trump said about these allegations? president trump: he denies it. if you look at what is really going on, if you look at the things that have happened over the last 48 hours, he totally denies it. he says it did not happen. you have to listen to him also.
he said 40 years ago this did not happen. arit, we have to leave you because we are getting breaking news. jamie dimon speaking at a luncheon in chicago. wife wanted my to say height already. would probably like chicago better than new york in case you don't know that. i walk into the chase building and people are waving at me. >> what you like about chicago? jamie: my first week sco bank one, you have the senate committee. -- civic committee. there is hospitals and the mayor and it all comes together. they try to do serious work and get things done. bank one posted it and pay for the breakfast.
i said it is a great organization. people used always ask, what have you done for chicago lately? if you ask in new york or that question, they will say what you mean? what is new york done for me? it is a great town. i love walking from a brownstone tickets and's -- to gibson's and all that. >> we love having you. you made a big announcement about an investment you are making in our city. can you talk about it a little bit? --ie: you are mi mentioning some of the ills of society. i believe is this has been absent from the debate. we need to be involved. things are not going to work without collaboration between business, civic society. it has just become anger. a lot of us in business can bypass civic society.
on the other hand it is really bad. -- between the felons, the drug problem, the inner-city schools not graduating kids, we have a problem. with the whole two things in our mind. america is the best country on the planet. president trump says it. would have got serious problems and we need to fix them. we all have to take a little bit of responsibility. most companies do. i know a lot of people are philanthropic in this room. but we need jobs, education, infrastructure. the efforts we do in detroit and chicago, what can jpmorgan do to help chicago and people in chicago? we can do affordable housing. if you're in the medical business, you can do things we can't. we can do jobs and skills. entrepreneurs for people of color now.
things like that can help accelerate society. i met with 6010 graders -- 60 10th-graders. boys kindaders, black of in trouble. full-time mentors from jpmorgan to give them summer jobs. they start small. they almost all get into college. i went to a graduation in los angeles. all the parents came. people were crying. one of the kids said he has offers from harvard and princeton. who is going to give him the biggest scholarship? i think we need -- i think we need to be involved and get things done. it as part of your civic society. -- there is ank lot in that answer so i want to unpack it a little bit. i want to go to your last point. to your shareholders care about this view about the responsibility of a corporation
or just hear about profit and why should they care? jamie: i have never had this conflict. until the shareholders what until the board or the employees. the reason i took time to write the letter was to get thoughts out. i never had a conflict between shareholder value and financial success, customer-employee and community. to me they are all the same thing. links in the fence. dividing any badly, i will fail. -- if i do any of them badly, i will fail. my first job will be to make a healthy, vibrant company. i can only do that by doing a great job for customers and our employees. they all need to be happy and healthy and vibrant. every one of us has a role in society. even if you are a small store, a corner bakery store, you participate in society. you help the church, the synagogue, mosque. you help the homeless person. that is what society is.
being a big company that operates in 2000 cities is different than that. we can do things at a bigger scale and in different ways, but i've never had a problem or a shareholder tell me you are wasting money. >> is that uniquely american, the role of responsibility? around the world people don't necessarily feel the same way about businesses role in society. jamie: in certain countries they are forced to. if you go to saudi aramco, they are forced to do things for the government. they built things for them, schools. it is different around the world. i would say on average american business and american people are more philanthropic. it is much more of the subject here. people give away money here. in some countries that is how they do. they will grow and i think it will change, but they don't do as much of it. >> is this embedded in banking because of the community reinvestment act?
it is a part of your dna differently from an industrial company. jamie: i think it runs the gamut. eastman kodak, corning, they built the schools and the roads. i think most companies do it. some giveaway .5% of the profits, someone percent. -- some 1%. most folks in this room, we have responsibilities under the law, the community reinvestment act. some of those are quite good and some are completely misguided and quite the opposite of what you want. i don't mind having those laws. you should be careful when you impose upon companies with a have to do because they are a bank. people do really stupid stuff and it backfires. i'm not against it but is that the reason we do the other stuff. we do them completely separately. >> tell me about what you are doing in chicago specifically. what is the program?
jamie: this morning it was with 60 kids. >> you are making a $40 million investment. jamie: for affordable housing. i was with brenda yesterday. she is getting jobs for convicted felons and works under the chicago transit authority. to get out of prison, you paid your price, you can't get a job. you can't buy lots of good job at jpmorgan. your credit is not good. once you are put down as a felon, they will not let you move in. the have to get jobs and training. someone is around that. some is around training programs. entrepreneurship, small business lending. the stuff we can uniquely do and accelerate. >> how do you decide with that is? you talked about the responsibility of the company. you were talking about detroit and you said it is not about
just throwing a problem. you said go with your expertise and data. howy use your expertise -- do you user equities? >> would have learned one lesson. the local society -- think of the governor, the mayor, and the civic not-for-profit's and the schools you work with, if they are out of line, don't waste your time and money. we will do it where we think it will work and not where it doesn't. we may very well make a public. people are hurting the citizens. in detroit, they had a mayor. 80% black town. black community. vote.e guy did a write in when he got up and we saw him speaking, he said that she wasn't democrat or republican. drop all that. he said any jobs. i need business to move in.
i need a formal housing. -- affordable housing. i need business structures. a light rail line between the university and downtown. ideology reviewers of -- i need onto reviewers of color -- i need entrepreneurs of color. i need to knock down 70,000 abandoned homes, 10 times more than any other city in america. in detroit there are a lot of single-family homes so you can do economic planning. peter went up with a team of people. we were all in. that guys to be president of the united states. because of him and because of the governor, we went up and said what can we do to help? he said i don't know these problems are that we have to knocked down and refurbish. someone came up with the idea, a local tech company building for the ipad. any citizen can click on the homes.
we don't have mortgages for rehab homes. we got a local bank to do it. we are taking first loss. we find that the development of small rail line. pieceput in the riskiest so hundreds of millions of dollars can come on top of it. s of we did the entrepreneur color fund. some were trucking, summer food. one was fixing streetlights. you do business with the government or the city, you have to show a certain wherewithal and they do not have the money to buy the goods to fix the homes. they got a lot from us and now they are the ones fixing lightbulbs. right-eyed30 entrepreneurs of color. as a business matter, of reputation is going like this. we become the bank in detroit. we were before but it's amazing
you can help -- [laughter] it's amazing you can help the town was stuff like that. we sent kids from all around the world, they are elected by the bosses, to go advised not-for-profits. hr programs and stuff like that. these teams come from mumbai, new orleans, hong kong, vietnam. bonds are coming. they now talk to each other around the world. it has been a great thing for the company and we are getting better at how to use that money. we will not use it to write a check and throw it away. not going to do it. don't even bother to ask. people work were not do it. with people ink the room. peter, our experts around the world came up with a plan. >> for you looking for something
or this came to you and it was so can balance? -- and it was so compelling to say you were all in? jamie: after detroit we said we will do a better job to have a more organized and focused effort over an extended period of time. chicago is the third. we are thinking about new orleans. we will do d.c. ward the south bronx8. . we are putting jpmorgan's might behind it. >> talk about your job satisfaction that comes from doing your job in the future when you have the balance sheet, making sure the bank runs, 10 going to these big american cities and effecting meaningful change. is it easy to think about them separately? do they go together? the you become a conduit for one to do the other? you will have people say i do this so i can do that.
know. i don't i love my job. it is tiring and exhausting. i go around washington all the time and it is a real pain in the ass, but i love my job. i am so damn proud of our people. we lift up communities. in chicago, large corporations, philanthropy, i am really proud of it. i do a little of all of it. there are people they get more joy out of one than the other, but i have to do my job. if i don't make j.p. morgan chase a healthy, vibrant company, all the rest does not matter. if ceo's are out there and it's about do good by their company sucks, i would say refocus her efforts. do not do that. inside the company you want to have a great company. build a great company with great people. that you can accomplish all these other things. >> you talk about small minority
businesses. how important are they to the u.s. economy? jamie: they are critical. notbig networking is we are dealing with infrastructure properly. it takes 12 years to get a permit to build a bridge. i'm not embarrassed to be an american. i'm embarrassed about that. are inner-city schools to graduate kids. small business formation has been about half of what it was in a normal recovery. >> what are the implications of that? jamie: there are 28 million businesses in america. person -- 20e one million are one person. 1700 do half the r&d in the country. think of the big 1700 companies. the ecosystem all feeds each other. you see what happens when a big factory closes. i was in lonsdale, sears and roebuck closes and the rest of
the community fell apart because it supported the small businesses. people have to get that around her head. ecosystem feeds all of them. but you do the wrong thing. i am convinced that can't prove it but i can with wil big data over time, the reason business is low is regulations. it takes one year and three licenses to become a barber. how many people have a year to wait? i consider that corruption. is not ok. it is corruption. it is government jobs, people being paid, taking their sweet ass time to go about it. withaccess to capital direct lending to startups, not existing small businesses. a lot of people thought it there started with home equity loans and mortgage cash outs.
people stopped allowing some of those things. i think we made a mistake. small business formation is half of what it was in the normal recovery. one or 2robably million additional small businesses. our tax system has been driving companies overseas for 10 years. 5000 u.s. headquartered companies are now owned by foreign companies because of the tax system. 5000. >> you are in favor of the tax cut? jamie: i guide you to listen carefully to me. we need a competitive tax system in a competitive world. let me finish. the notion -- the notion we will tax systemompetitive is crazy. >> give a corporate tax rate is 35% and we are talking about 20% -- jamie: that is a cut.
you notice that we needed. -- need it. 5000 companies overseas it probably would've been here. that money would have been in the system. is not with some economists say. if we had the right to some seven years ago, trillions of dollars would've been retained. some what it paid off dividends and stock buybacks. you might buy a house, be charitable, reinvest it. companies would it make huge investments. we know one thing for sure, investment drives productivity, drives jobs and wages. >> is that really -- jamie: i'm the chair of the business roundtable. cut my taxes. no, i want the opposite. would you get rid of carried interest, get rid of deferrals for hedge funds, state tax that
actions, if you want to raise my right, so be it. do not have an uncompetitive taxes them in a very competitive world. that is a mistake for america. and you confuse the twi is a huge error -- two is a huge error. .> they are paying much less jamie: the state is raised to 35%. the u.s. rate is 25%. effective u.s. rate is 15%. that is true. a lot of that is overseas money. leave the money over there -- the rest of the world since clinton was president has gone from 39% to 25%. effective tax rate is now 20%. we stayed up here and they have come down here. there should be anti-base erosion. people take intellectual property worth a billion
dollars, they move that to ireland and they charge it back to the u.s. they are basically moving profits and paying 12.5%. it will get rid of some of that. they are called disincentives. i think american corporations should pay taxes and i'm happy doing it myself, but the state in usable -- and muni tax will hurt. there are five states they get most of those benefits. illinois, california, new york, connecticut and new jersey. by should arkansas and wisconsin be funding you? which is basically what it is. let's do the right thing. i don't think the private equity guys should argue for carried interest. i don't think i should argue for reducing my rate. i also argued that the blt
supporting the tax credit. downu said if rates went in your most recent letter, you thought it would affect compensation in this country and the problem we have had with my languishinglik wage growth. you get 18,000 people a raise. the minimum wage -- between $12 and $16.50. $32,000 are year plus medical, which is worth $11,000. that alone, my god, that is a started job. >> how does that work if you can get that labor cheaper somewhere else? is we don'tew really know. we will get better people with
lower attrition. i'm not doing analysis. >> we are at full employment. jamie: you will get better people. he will have lower attrition. we have a problem in society. one is middle-class incomes, which has not gone up. when he to do something about it. i think the democrats have a job agenda, a growth agenda, a pro-free enterprise agenda. free enterprise is a good thing. [applause] we have to have proper safety net. the low end, the government has have a negative income tax. you will not solve the problem with low skilled wage earners. >> that's not happening. jamie: both democrats and republicans want it. it across the country's $100
billion a year, i would do it. the minimum wage and set of seven dollars an hour, it would year.,000 a forcing every mcdonald's to go up close mcdonald's. having a negative income tax is just paying people to work. i think it will be positive for the gdp. will help people have a living wage. jobs created in a. big-name -- jobs create dignity, dignity reduces crime. it is time we do something like that. >> do you think that will happen? jamie: i'm going to fight for it. paul ryan once it. the republicans want it. the business community supported. >> you talk about republicans and democrats cracked. --ie: these of the both
these are the things they both want. i think it has a chance. read, our doctrine we support things, expanding the earned income tax credit. someone said you should write up the code. look at the fortune 200. the earned income tax credit code. come on, that should be done by politicians. i would support it if they put a surcharge on my income. >> let me shift gears. some of the nationalist rhetoric going around the world, including and our own country, has some real long-term implications. particularly if you look at the potential changes in trade policy. how do you feel about that? jamie: there is good nationalism and that nationalism. they get is a letter country and want to help it and lifted up. when it becomes me against you
nationalism, that is bad. it all gets mixing together. >> is there a lot of zero-sum game nationalism going on right now? jamie: it is dangerous, the talk. >> forbes did a story about the american brand. they said the american brand for the first time dropped globally from being number one to number seven. jamie: it happened after vietnam too. america is this hugely resilient country with the best businesses, food, energy, military, the widest capital market. you can't compare most countries to the innovation we have here. i love mexico. we should never be rude to a neighbor like mexico. we have the atlantic and the pacific. you have to put in perspective what i just said. no one has that. not japan, brazil, india, russia, mexico, no one. it is a huge gift and we should
be a leader in the world. not the ugly american, but try to set standards and things like that. i think some of the rhetoric is hurting us. there will be another president and 3.5 years or seven years. >> which will it be? [applause] [laughter] jamie: my guest is no better than yours but i would bet 3.5. the democrats have to come with a reasonable candidate. if they have a complete leftist candidate trump low w -- trump will win again, for the resiliency of the country will still be here. that will not disappear because you don't what the president. be --t his policies could jamie: the worst one in my opinion that can surprise us and hurt and cause more damage is the trade one. i think they will do a deal with mexico. i spoke to the administration. --y are tough to
>> and a couple of minutes the latest in the last fed meeting. >> we seem to be on track for a december rate increase. many officials saw steady data as a reason to increase rates in the near term at their last meeting. there is division of the federal open market committee over the path forward and giving tepid inflation. some people are looking for inflation expectations to end and inflation overall. there was confidence over the labor market expressed, but there is some division over wages. some officials said they are moving up, others saw them trending sideways. wage pressures were seen as modest. participants are worried about financial