tv MSNBC Live With Ali Velshi MSNBC April 6, 2018 12:00pm-1:00pm PDT
on another wild day on wall street. it is all a reaction to the president's surprise announcement of additional tariffs on $100 billion worth of chinese imports but the closest advisers insist we're not in a trade war. the markets don't seem to agree with this. as the day has progressed as i was just showing you, the markets have gotten lower and lower and this is the part that concerns me, when we have a downturn toward the end of the trading day. we have an hour left. we'll see what happens. if this goes down lower then we are in for motrouble and we hav had some bounce backs because the stock is cheap and it goes the other way but i don't like to see a seven in front of the numbers and that is what i'm looking for. we are at 3.05% and it is coming back and investors are fighting this. moments ago sarah huckabee-sanders was grilled on it. >> what was it that prompted the escalation? he already announced $60 billion worth of goods for tariffs and
then he upped it to another $100 billion on top of that last night. >> the sprez -- the president is going to do something and be tough when no one else is bullying to do this. china is creating this problem and the president putting pressure on them -- >> and now trump and administration officials have been out on all fronts but they are sending different messages. listen to this one from the past eight hours. >> i'm not saying there won't be a little pain. but the markets gone up 40% -- 42% so we might lose a little bit of it. but we'll have a much stronger country when we're finished. >> i don't want to talk pain. i want to talk progress. we're not running a trade war. if you read this thing, you'll see. this is just a proposed idea which will be vetted by usdr and open for public comment. so nothing has happened or executed. >> there is the potential of a trade war and let me be clear,
it is not a trade war. the president wants reciprocal trade. on the one hand we're willing to continue negotiations on the other hand the president is absolutely prepared to defend our interests. >> and the president made the announcement about the additional tariffs about an hour after he said on camera on air force one that he didn't know about his lawyer's payments to stormy daniels. joining me now is bill griffin co-anchor of the nightly business report. good to see you. thank you for joining me once again. what do you make of this market? we've had a lot of things going on today. we've had a jobless report this morning, we've got the trade concerns, what do you make of this? >> ali, as you well know, wall street doesn't like uncertainty and those different quotes that seem to be giving different messages only sew the seeds of uncertainty and as we go into a weekend, traders don't want to be in this market if there is going to be some sort of a escalation even beyond what we're seeing right now. so i think that is partly why we're seeing this big selloff today, is the -- even though
they keep saying this is only negotiating tactics right now, we don't intend to have a trade war, wall street is getting out just in case. and our reporters in china speaking to finance officials over there, the chinese government is taking this very seriously. they don't see this as just a negotiating tactic. they are ready to retaliate in a big way if the united states does intend to impose some of the tariffs. i think that is why we're seeing the selling right now. >> and you bring up one interesting point and that is when there are uncertain times, friday afternoons are always a time when investors who don't want to face up to uncentury ov -- uncertainty over a weekend, people sell out on friday afternoon. >> absolutely. they don't want to be long the market going into the weekend. so at this point, i think -- the stock market is taking the tactic that, okay, if these are
negotiating tactics, that is fine. but something could go wrong. even larry kudlow pointed that out earlier today and said these are only negotiating tactics but some foreign policies decisions could go awry and be misinterpreted and that could cause the pain the president is talking about for the stock market right now. >> bill, thanks, at cnbc. and nbc news geoff bennett is at the white house where we had a white house press briefing where sarah huckabee-sanders was asked about is this a trade war or isn't it a trade war and what is supposed to happen, geoff? >> reporter: white house officials make the point that china has gotten away with unfair trade pract hices for years. that is not a point of contention but what is is how to respond. even as the president is talking tough, ordering his administration to consider $100 billion of new tariffs against chinese goods, you have larry kudlow, the chief economic adviser out here this morning as
the market opened on the north lawn doing interviews suggesting that a deal with beijing could still be possible, even saying that these tariffs might not ever happen. so i think it is interesting to hear bill griffith say even though some of the administration are sort of referring to this as negotiating, that is not how it is being vuz -- viewed in china. >> and let's talk about comments shocking the president made yesterday again talking about the border and immigrants over the border and rapists. >> reporter: right. and he said that some of the people -- some of the migrants in this caravan coming from central america making their way through mexico, that the hopes of getting to the u.s. to see asylum, he said they're -- the rapes are being committed at rates no one has ever seen before. sarah huckabee-sanders was asked about that statement where it came from and the validity of it and during today's press briefing. take a look at how that unfolded. >> the president said yesterday it came out with this journey
coming out and women are raped at levels no one has seen before. what was he talking about? >> it was a story, i believe it was the l.a. times that documented that but there is also -- this is a well documented fact that a lot of the people, i believe, up to 80% in recent years of women that are making that journey have been raped in that process. the president saying that is simply unacceptable and this is something that should be looked at. >> reporter: so sanders there and her explanation referenced an l.a. times article. we look up what might be the believe source material and i'll read the line in question. robberies and rapes and assaults per traited by smugglers and mexican immigration agents are chon and in one occasion 72 kidnapped migrants were killed by a cartel in northern mexico. so there is nothing to claim that rapes are happening at a rate no one has seen before. and the question as to why the president is mentioning this
now, i spoke to someone familiar with his thinking and they say this, there is no other real thing on the president's agenda happening this year. the immigration push likely won't happen and there is no foreign policy push apart from the expected meeting with kim jong-un so this is an issue of the president returning to the feature of his campaign and the animating theme of his base. >> thank you very much, geoff. i want to take a look at the tariffs. and this started on february 23rd when the president abruptly announced plans for a global tariff on steel and aluminum. then he narrowed that list of countries that would be targeted to largely target chinese exports. those tariffs went into effect a month later. now on monday, the past monday, china announced tariffs of its own on -- on $3 billion worth of nuts and fruit and sparkling wine over the course of the last few days. the next day the administration announced tariffs on $50 billion worth of chinese exports like
computers, dishwashers and medical devices and later that night china tacted tariffs on u.s. goods targeting soybeans and cars and beef and whiskey and that is when larry kudlow insisted this is a negotiation and said the president is a free trader. but if negotiation is the goal, we're not there yet, just yesterday the administration announced it was considering new tariffs on $100 billion worth of chinese imports. no word on what products would be targeted. and china was very quick to respond saying it would fight at any cost. no word on what they'll slap tariffs on. but we do know this, this is nowhere near finished so to talk more about the tariffs is kevin hassett, the chair of the white house council of economic advisers. good to see you. >> and it is great to be here without a winter coat on. >> no kidding. larry kudlow said that donald trump has been a free trader. i don't know that that is true. i know you kind of have been for a long time.
and you were -- you were an important guy with sort of the nation's pre-eminent conservative think tank so what do you think of the situation we're in right now. >> first the president is a free trader. but this tariff thing is not a bluff. not at all. and it is something that you've paid attention to over the years and the fact is 87% of counterfeit goods come into the u.s. through china. that a chinese national stole the plans to the f-35 and 400 complaints against intellectual property theft at the wto and japan and europe are joining us in the complaint right now. so the fact is that china -- if they are the biggest economy in the global economy, then they need to start to act like it and what they are doing now is unacceptable to really the community of nations. they need it join the community of nations. >> so arguably -- >> the president is serious -- >> so china is acting like one of the fastest growing economies because they are doing this with impunity and doing so for some time. >> right. you remember president obama did
the photo op where they showed the chinese government actual evidence that the military was hacking u.s. companies and the chinese promised to stop doing that. it doesn't look like they've really decided to play with the rules. so there are a number of things that can be done. but i think the 301 action is something that everybody in the white house team supports. i know there have been other times where have read in the newspapers about the globalists and the not globalists and the china case is so cut and dry. if we can't stand up to china -- and honestly, think about the end game. the end game is china joins the community of nations, trading with china is just like trading with germany or france and when that happens, that is good for global growth and chinese growth and for u.s. growth -- >> and what is going to happen when we -- invited china into the world trade organization a long time. do you think that was ill advised or our hopes were greater than the reality about
the role china would play? >> i think that we had the expectation that when chinese import entered the wto, that that was a commitment by them to play by the rules. but instead what happened is they joined the wto and then they noticed that the wto takes so long to discipline them they could go around and counterfeit things and steal things with impunity and by the time the wto gets around to disciplining them, that is five or six years later and they have the profit in their pocket. and it is a problem and the global community notices it is a problem and our partners are quietly quite happy that the u.s. is stepping up and trying to do something about this -- >> is this the best way to do it? because we know with duty and tariffs, people get hurt on both sides. there is no -- there is no way of getting out without collateral damage. >> right. as an economist i could say that imagine a world where every country on earth had the same trade policies as the united states. and in that world global gdp would be a lot higher and global
growth would be higher and welfare of poor citizens in every country would improve. and so i think that president trump is -- trying to move us toward a better world. and he didn't start this fight. china starts the fight. imagine if there were pirates raiding our ports and how the u.s. would respond. and so the ip theft that the u.s. t.r. put out is a damming document. the ip theft is serious and they need to stop and president trump is standing up to them. and i think in the end, the equilibrium is good where they are in the community and people can invest without intellectual property without worrying the chinese would -- >> why not stay in the trans-pacific partnership where we would put more pressure on china without a trade war type of scenario. >> i think that the president
has had the view from the beginning that the way to get good deals is to have bilateral negotiations. he's a free trader. he's looked at the system that he inherited fills with things like what we were talking about that are unacceptable and his view is that this is the way to get things done because you are not deciding everything by committee and game theorists would support and trade theory, that you get -- so negotiating something with 100 people at once it will be a multi-thousand page document with a lot of holes in it. so bilateral negotiations is something that i think is defensible with modern game theory. >> kevin good to see you. thanks very much. kevin hassett, the chairman of the white house council of economic advisers. nbc news learned that scott pruitt met with the president at the white house and the purpose was not to discuss the many scandals and the future of his job as the head of the agency but to talk about the epa new proposal to roll back fuel economy standards for cars and trucks. we'll talk more about this in later in the hour with the former head of the epa gina
mccarthy. and also this afternoon the white house is touting tougher new sanctions against russia despite the questions about the president's behavior toward vladimir putin. >> today sanctions in the totality of the administration's actions which are in keeping with congress's wishes approve the president as absolutely correct when he said no one has been tougher on russia. >> the new sanctions target members of putin's inner circle. the treasury department said it is against the russian oligarchs an elites who prosper and they are could not longer benefit from the destabling activities and that includes crimea and financially backing bashar al assad. and 12 companies they own or control and 17 senior government officials were on the list along with a state-owned weapons trading company and the bank. of all of those sanctioned,
oleig dara paska is an industry tycoon who made money through aluminum but also linked to paul manafort. reported by the washington post last year that manafort offered to give him updated on the 2016 campaign while manafort working as donald trump's campaign paul manafort is facing a number of charges. many of them financial from the special counsel russia probe. also on the sanction list, carol shemma lov married to putin's daughter. and for the impact on putin and his regime. bill brow implements the magnitsky act and named after sergei nag nits can i kyled -- nag nits can i and killed in a russian jail. and you've been critical of what the administration has done with
respect to russia. i would imagine today you are pleased with what they've done. >> they've hut putin right behind the eyes. putin is a rich man. he holds his money through russian oligarchs and cares about money more than human life and we have gone after his money by going after these oligarchs an this is an extremely strong action by the u.s. government, something that i applause loudly and i think it is finally what needed to be done to get putin to pay attention, that there is a consequence to his bad actions. >> you can't get by a day in the news without talking about russian oligarchs but you wrote about the role they play and how they developed -- there were no oligarchs and how they developed in russia and the role in this russian regime. who are they and why does targeting them matter. >> so the oligarchs are a group of people -- it is a changing
group. it is not a fixed group. people who have basically become rich through either theft of state property, or theft of money from other people in partnership with the russian government and partnership with high level officials. there is no black line between government and business. it is all one big blurred merger. so when russia invaded ukraine, the united states and other countries went after government officials. but what they didn't understand is that those officials weren't nothing in comparison with the oligarchs who are effectively the treasury -- or the personal treasury of vladimir putin and other close associates around him. >> you have always pointed out that that is actually a better way to deal with russia than to impose broad sanctions an things that negatively affect the russian people. that in this case, this gets to putin because as you've written, his personal wealth is tied to the money these oligarchs make.
>> exactly. so i've never been for wide-ranging sanctions. i believe that russia is an occupied country and there is 145 million russians who are suffering under this occupation. and you have a very small number of people stealing resources for their own benefit and vladimir putin is at the top of the small pyramid of people stealing and there is no point in punishing the russian people who are being punished enough and who should be punished is vladimir putin and the people around him holding his money. and so this is the perfect policy tool. >> thank you for joining me. bill bow ard, let's take a look at the market. off just 644 points now. can you imagine i'm saying just 644 points. coming up, a reality check on the plan to militarize the border and what can the national guard troops expect as they head south to the border that the president said is teaming with
illegals. i'm joined by the man tasked with coordinatingmill in the wake of hurricane katrina. the guy knows a thing about the challenges of a ground deployment. and look at the market. a measly 655 points lower on the dow and 2.66%. we'll be right back. sfx: muffled whistle text alert. i'm your phone, stuck down here between your seat and your console, playing a little hide-n-seek. cold... warmer... warmer... ah boiling. jackpot. and if you've got cut-rate car insurance, you could be picking up these charges yourself. so get allstate, where agents help keep you protected from mayhem... ...like me. mayhem is everywhere. are you in good hands?
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as soon as possible, that is when the white house is hoping the national guard troops will be able to head to the mexican border. the president said he will send between 2,004,000 troops to stay there until the ball is built. as homeland security said more than 37,000 people were apprehended along the border last month. just over 12,000 people were picked up at the border in march of 2017. overall, though, illegal border crossings are down. take a look at. this last year they were at the lowest level in 46 years. now trump is not the first president to do this. not the first to send national guard troops to the border. even though he said he was. in 2006 george w. bush sent 6,000 troops to assist the border patrol and in 2010 barack obama send 1200 troops to help with surveillance. joining us now to talk about this is someone who knows a thing or two about leading an important mission.
retired lieutenant russell honoray who was a commander of joints task force katrina and my old friend. general, good to see you. >> good afternoon, ali. good to be here with you in washington, d.c. >> talk to me about this force. everybody is wondering what they'll do and what the national guard people will do. they are not supposed to interact with immigrants and not involved in law enforcement so what sort of role can they play and what do you think of the deployment. >> as a follow to put in context your statement there, that is being worked in what will be an operations order with instructions through the chief of the national guard bureau who is a member of the joint chiefs to the generals inside of the state, with recommendations on rules of engagement as well as operational capacity that those guardsmen and based on the type of missions that homeland
security say they need to help the border patrol. so those details are still being worked out, ali, in all due respect and that will go out in terms of operational order or operational directive from the pentagon. but with the exception that that will go through the state general because the general and the governor will be in command of the troops while they are in operational support, if that is the term they decide to use, of the border patrol. >> let's talk about what operation support would look like. dana white talked yesterday about what it might be. let's listen together. >> national guards efforts will include aviation, engineering, surveillance, communications, vehicle maintenance and logistical sucht. these national guard members will act in support of border patrol agents who are performing law enforcement duties. >> general, is that a good use for the national guard, the
support roles that they play and again i take you back to the katrina days where the national guard is not supposed to be involved in law enforcement but at that point the law enforcement that was there on the ground couldn't complete the job that needed to be done. is that a similar situation here? >> that's up to the governor. the governor can use his national guard to detain people as well as to stop anything that someone may be doing that is dangerous to other people. that is why you use the national guard and not federal troops. national guard under control of the governor can be used to assist law enforcement. that is not the primary task. many of them, the type of skills you are talking about are possible surveillance calvary and surveillance out of military intelligence. as well as aviation units. so their strength will be to do recognizance and surveillance and to think in the border in
places they could go in with optics and replacing -- hard to see and rough terrain and provide that information to the border patrol with the intent just like in jump start to assist the border patrol in assist them in doing their duty in freeing more border patrol agents to be on the front line right at the border to catch anyone coming through. >> so is it your sense that this will be -- bear fruit and be useful? >> i do believe any time we put that many troops, the number they are talking about, reinforcing the border patrol, if there is any spike in peoplin tilt rati-- people infiltrating across the border, they will, based on jump start, to assist in stopping anything that is being illegally brought or people illegally crossing the border and that increase the capacity of the border patrol to be able to stop them. will it be 100%, i don't think
it is ever 100%. nor will we want to ever see it 100%. because that would make a very tense, contested border and we don't want a contested border with our friends and allies to the south, the country of mexico. we want this to protect people from coming illegally as well as smugglers that may bring contraband through that border. the numbers would show that and in march that is an up number but overall the number of people coming has been reduced. i don't know what the president knows. he has intelligence and capacity to talk with people in mexico and the government level, he may have information that we don't know in the public sector. but it is -- that is why we elect the president. he made that decision. just like president bush and obama did and that is what they are doing and they're doing it in a methodical way by creating
an order that will go and the governors will have to determine what they want to do. >> general, always a pleasure talking to you. thank you for being with us. general russen honoray coordinating military efforts for hurricane katrina areas. >> good luck to our guardsmen. >> agree. thank you. and a quick look -- up next, reaction of the news that broke a few minutes ago that the president met with epa chief scott pruitt under fire for some of his spending choices and security demands while at the helm of the agency. pruitt said he's under a -- under attack because of how successfully he's running the epa. is he though? and the dow is around the 660 point mark and it was down more but i'll keep a tight eye on this. when we come back, you're watching msnbc.
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to be fired. the "wall street journal" reported the chief of staff john kelly wanted pruitt out last week but trump tweeted today, epa chief scott pruitt was doing a great job but is totally under siege. the president is likely referring to the long list of negative headlines he's facing over behavior that could be labelled as swamp like. his ethics issues range from renting a condo for $50 a night to giving two long time staffers a raise despite being told by the white house not to. he also reassigned staffers who raised question about the spending and management and spent $100,000 on first class travel and wanted to use a siren because he was late for dinner. but despite the stories which the white house knows about and some of which is investigating, the president still thinks that pruitt is doing a great job. >> i think that scott is doing a fantastic job. i think he's a fantastic person.
i just left coal and energy country and they love scott pruit pruitt. >> and the comments might be why scott pruitt will keep his job. he's rolling back regulations at the epa. i'm joined by the woman would ran the epa before pruitt, gina mccarthy the administrator from 2013 until last year. gina, thanks for being with us. >> it is great to be here, thanks. >> look, this is the -- the epa is one of the places that comes up with regulations that if they didn't exist companies would do what they needed to do to be more profitable. a simple fact. we know if there aren't regulations about companies they throw their stuff into the river and pollute the air. that is not how scott pruitt sees his mission. it is not how president trump sees the epa. they argue they should be deregulating and fewer regulations at the epa. and that is why scott pruitt said people are attacking him. >> well, all i would say is that
he took hold of a really great agency whose sole purpose is to protect public health and the environment. and i think many of us are disturbed by the fact he seems to be solely motivated by reduction of cost to industry. now we always considered how best we could allow the economy to grow. but first and foremost we have to look at cost to public health. we have to understand that industry pollution can actually cause an impact on public health and that cause could far exceed the cost associated with controlling that pollution. so i would really love to hear scott pruitt not just talk about what he wants to do that is best for industry, but best for the environmental protection agency. and how to do it in a way that is transparent. let people see who you are talking to. what is your intent. to do it in a way that i know you indicated that he's focuses on rollbacks and he is, but i'll tell you, he is rolled back very
little. and the big things that are left on the table were done right and they were done according to the science instead of attacking the science. they were done according to the laws that are skirting the law and i felt pretty confident that we did the job we needed to do in the obama administration and that we're a very long way from rolling back any of those rules. >> let's talk about the science -- >> so if this president thinks he's doing a good job, that is great. but i think in the end you'll see the job was done right in the prior administration because we listened to the warning signs and the public. >> let's talk about the signs. scott pruitt was on cnbc talking about carbon dioxide and human activity. he said measuring with precision human activity on the climate is challenging and tremendous disagreement about the degree of impact. so no, i would not agree it is a primary contributor to the global warming that we see. i guess the issue here is that there is a fundamental belief that many americans have that
the epa stands between americans and polluters. and scott pruitt doesn't necessarily agree. >> yeah, well i mean i don't think we should be all that surprised by his position because he has been clear for a while having sued the agency 14 times to try to protect industry. and we need to understand that he needs to follow the science and the law in climate changes and it is is he secure and tested at the supreme court several times. they are required to regulate carbon pollution because emissions are causing an acceleration of climate and it is a threat to all of us. it is a threat to the health of our cells today and the well being of our children in the future. and so i shouldn't be surprised -- i'm not surprised, frankly, that he disagrees with it. but what he's going to find out is that the law is what he needs
to follow. not his own inclinations. and he needs to stop sitting in his office, work with the career staff instead of fighting science as a way to stop having to do things he doesn't like. let's learn your job. let's talk about the agency and talk to the scientists, talk about how we do it right. we did regulate carbon pollution but also did it in a way to allow the car industry to succeed and have record sales and we did it in a way that protected energy reliability, that actually reduced overall cost to consumers because we know that renewable energy and energy efficiency are winners in the market place. sow could ha -- so you could have it all but talk about public health. that is the mission of the agency and doing it in a way that grows the economy is not hard to do if you talk to people and you do it right. but sitting in a -- a sound proof booth and not talking to the lawyers, not talking to the scientists is not going to prove
to be a winning strategy when these rules get to court. >> gina mccarthy. great to hear from you. thanks for joining us. the epa administrator from 2013 to 2017. politico just broke this story and that is that -- scott pruitt was forced out of the condominium in d.c. that he was paying $50 a night for because he overstayed his welcome. it was a supposed to be a temporary fix. and in the last few hours mark zuckerberg announced new precaution to make the site more secure amed of mid-term elections. anyone who wants to run political ads must verify identity and location first. users who manage pages with large numbers of followers will also have to prove who they are. this is something -- a big development. facebook plans to hire thousands of more workers to help with the verification process for all of the pages. this comes as coo sheryl
sandberg warns more data breaches could be discovered after audit underway at the company and she tried to explain why it took so long to crack down on security despite knowing years ago that cambridge analytica miss handled facebook user data. >> we thought that the data had been deleted and we should have checked. we're right about that. >> why didn't you check? >> we thought it had been deleted because they gave us assurances and then other people told us it wasn't true. >> but why go on -- after somebody already violated in spirit if not in the letter facebook's principles. >> we had legal assurances that they deleted and we didn't do the next step of an audit. >> haerz mark zuckerberg is set testify next week. and tune in to see the town hall that started the war of words between cook and discuss
immigration and technology in the classroom. watch "revolution, apple, changing the world" tonight at 8:00 p.m. eastern. learn more at msnbc.com/revolution. coming up, violence along the border with the gaza strip turned deadly with israeli troops firing the protests killing six and injuring hundreds. after the break, why palestinian groups plan to demonstrate for four more weeks and what it means for the future of the region. only invisalign® clear aligners are made with smarttrack® material
more violence in the middle east as palestinians continue to push for the right to return to the land they were forced to leave when israel was founded nearly 70 years ago. officials say six people were killed when forces opened fire on protesters along the border between the g-- the gaza strip and israel. 20 people have died since the demonstrations began a week ago. and they are protesting the blockade of the gaza strip. it began in 2007 after hamas seized the small seaside strip home to more than 2 million people. the protests are expected to continue until may 15th which palestinians call the catastrophe. joining us now via skype to talk about it is diana booto and former adviser to the
palestinian organization and president abbas. thank you for joining with us. tell us about what is going on in the gaza strip. >> well, palestinians have taken to -- to the street and they are protesting the 70 years of denial of freedom and the ethnic cleansing of palestine and the seize imposed on the gaza strip now for more than two decades. so we see pli-- palestinians go to the eastern part of the gaza strip in the tens of thousands, and what the israelis have been doing is firing with snipers and erecting dirt mounds to deliberately fire at palestinian protesters and we've seen that already, 28 palestinians have been kill and close to 2,000 injured. me -- many of them very gravely. and so israel is attempting to, they've already imprisoned everybody in the gaza strip and
now they are shooting at people as well. >> what is the residents of -- what does success look like for them. >> it looks like freedom and the ability to return to their homes. we've been waiting now for 70 years for a diplomatic solution. we've been hear being negotiations and i poor took in negotiations and those have gotten nowhere. we now have a u.s. president who made it clear he doesn't want to see palestinians live if freedom and they are taking matters into their own hands and demonstrating peacefully. sadly of course, the israelis are meeting any peaceful property with violent and repressive means, including firing at them and including shooting teargas at them and other forms of gases as well. all that we really want is the ability to go home. the ability to finally live in freedom and israel is denying us that. >> israel does argue back that hamas in i-- charter does not recognize the israel right to
exist or nor the right to defend itself. is hamas part of the problem in this case? >> it is israel that is the problem. i think it is important to keep in mind that there isn't a single israeli political party that recognizes palestine's right to exist including the current government and the government that is in -- that is leading this coalition. so this isn't just a question of right to exist, it is that what israel is making it so that we cannot exist. israel does exist and the problem is that israel doesn't want us to exist. and so they point to things such as the chartser, which by the way has been amended to demonstrate they don't want -- palestinians don't want to live in peace but israel is denying us our ability of freedom and have yet to recognize our right to live in peace and equality and freedom. >> deanna thank you for joining us. a former advise to president of the palestinian authority
mahmoud abbas. the dow is reacting to the president's latest conversation about tariffs against china. the dow is still hanging around 620 points lower and things have gotten best over the course of the last 2 1/2 minutes. the dow is 3.1% lower now 2.5% lower, i should correct myself. the president may be counting on these tariffs to notch a political victory. the question is the economic cost of doing so. my next guest talks about the prickly relationship between economics and politics in his very timely new book, advice and dissent, why america suffers when economics and politics collide. joining me now is alan blinder, economics and public affairs pro percent at princeton university. he served on bill clinton's economic advisors and went on to serve as vice chair of the federal reserve. alan, good to see you. >> nice to be here, thank you. >> i talked with kevin hassup earlier today. he said, look, china started this. china does things that don't make it a very good or fair trading partner.
i think there is some broad agreement there are a lot of things to fix with china. >> yeah. >> but the president has alarmed people by saying trade wars are good, we can win this one, it's easy. that doesn't seem to sit well with investors and with the public. >> no, i think investors are quite right and the public is quite right. donald trump may be the only one that thinks it's easy to win a trade war. what he may mean by that, charitable interpretation, is we can inflict more pain on china than they can inflict on us. that could be true, but that's a pretty strange definition of winning. >> let's talk a bit about what might be a fundamental misinterpretation of global and free trade. for years people have told the american public or the british public, everywhere in the western world, that trade is good because it increases corporate profitability, it increases gdp growth, and it does do those things. but the people who have been most purt by it are high-wage earners or people who were high-wage earners 10 years, 20
years ago. we haven't done a great job of figuring out how to get those people better employment. >> that is exactly right. and we need to and many people have been saying this idea goes back to john f. kennedy in the 1960s, trade adjustment assistance. we've had it since the '70s. it's a puny program helping a relatively small number of people and not that major away. we can do better with that. we can do better with job retraining. we could do better with mobility assistance for people that want to move. not everybody does. some things need to move to improve -- >> you've been unemployed for a decade hoping your job is coming back, moving is a big deal if you're 50, 55 years old. >> absolutely right. one of the things i mention in the book, when we economists and some of us do, dismiss this as transition costs -- >> right. >> it will all be fine in the end. for the kind of person you're talking about who worked in a steel mill 30 years, he's 50,
55, this transition may be the rest of his life. >> so, we have an interesting deal that we've made with the devil. we have had relatively low inflation for years. there are many goods that you can buy of much better quality today in electronics or manufacture things better than they would have been 20 or 25 years ago for the same amount of money or less. we decided we like cheap goods until in doing so our neighbors might be unemployed, possibly for the rest of their careers. >> yeah. >> in order to not have that happen, we may have to pay more for stuff. >> we would. and that's what a trade war will do. you start cutting off trade, you mention the benefits of trade five minutes ago. a key benefit of trade is what you just said, cheaper and better goods. that makes consumers better off. some people will lose jobs when trade changes. some people will gain jobs when trade changes a lot. most economists unlike most politicians think it's a fallacy to make a tight association between trade and jobs. look where we are right now.
4% unemployment labor shortages, but a big trade deficit. >> we're at 4% unemployment and we've got wages increasing. why are so many people in america as disaffected as they are in by the way, i look at great britain with brexit. clearly there are enough people who are really fed up and don't think the system has worked for them. numerically it's not large, but they're enough. >> yeah, i think it has two main roots, and maybe also, i must say, some of them that are mysterious to me. i can't figure out how we ever elected donald trump president of the united states. but that said, wages have been stagnant. they're going up now, not soaring up, but finally going up. but there's been a lot of wage stagnation for decades so people that -- and that's most people that earn their bread by working for wages have not been doing that well. secondly, and related, the spread of inequality. the people way up at the top, people that live in this neighborhood of manhattan, are doing fine, very fine. most of them but other people
are not. >> it's interesting when donald trump or bernie sanders tell everybody that this last administration or three administrations ago, the fact is in the world this has happened. the spread of inequality has grown bigger everywhere. >> yes, but here's the difference. most of the other rich countries which are mostly european countries -- not all -- have done more to combat the inequality than we have. >> like health care, like subsidized education. >> exactly. like unemployment insurance that might last two years in germany, instead of 26 weeks in america. and a whole list of other things to help the people that need help. and we do a little of that. we do some of that in the united states, but not nearly as much as western europe, and therefore they suffer more. >> so, your thesis in the book is that when economics and politics collide, it's not great for the economy. how do they ever not collide? >> they do collide. there are a few things i suggest near the end of the book that would make things better. there's no cure to this. politics and economics are
different realms. but there are a few things, like if we can get more politicians focused on a four-year time horizon, that's not a crazy thought. those are the big elections that really, really matter. instead of the next tweet, lengthen the time horizon that much, that would help a lot. by the way, i think economists need to shorten their time horizon and don't tell people, well, everything will be fine five years from now. that's not a good answer in the political realm. secondly, i think something economist s have been against for decades, earmarking certain taxes for certain purposes i think is a good political idea. we do that with the gas tax. we do that with the payroll tax. i think we could do more on that because otherwise it's kind of this a morphous glob of spending. people want to know what am i get fogger my tax dollar. >> you think we can do better. alan, good to see you. thank you for being here.
alan blinder why america suffers when america and politics collide. it would be worth reading this one. before we go let's get one last check of the markets before the trading closes for the day and the week. cnbc's jackie dee angelles joins us. the market is in much better shape than an hour ago. the dow is off 560 points and i'm saying it's in better shape. >> good afternoon, ali. that's right. we're recouping some losses. we saw a confluence of circumstances. you saw president trump firing back at china for more levys here. the market nervous the situation would escalate is saying, okay, it looks like the situation is escalating. you have companies like boeing and caterpillar, the industrials really falling today, taking the dow jones industrials down 667 points. at one point intraday we were down in correction territory, 10% from two week high. the market is getting used to
this volatility but it doesn't like uncertainty. going into the weekend people are going to take positions off the table. they want to wait and see how this plays out before they make any big moves. >> jackie, the president continues to say -- well, the president's advisors continue to say this isn't a trade war. he's not interested in a trade war. the president has still said he can have a trade war, we can win a trade war and winning a trade war is going to be easy. this market seems to not think we should have a trade war. >> that is kparktly right. secretary of the treasury mnuchin said there is potential for a trade war. this is not one at this point. he wanted to make that very clear. but i will tell you from the market participants that i have been speaking to, they do not want to see a trade war. they do not want this to escalate. again, it goes back to the theme of uncertainty. they don't like it and that tends to send the stock market lower. >> all right, jackie, we will continue to use your expertise to follow the activities on the market as we head into next week. cnbc's jackie dee angelles.
for the year on the dow, your return will be a loss of about 3%. i tend to like to talk about the s&p 500, it's a little bit broader, it has 500 stocks as opposed to the 30 in the dow. that is still a 2.5% loss for the year. if you started up at the beginning of the year, you are now 2.5% lower on the s&p 500. these markets have been gyrating. they have been going up and down, and hasn't been a straight path downward, but these markets are concerned. investors are concerned about the path that the president is taking in his discussions about tariffs on china. that does it for me this hour. i'll see you back here monday at 11:00 a.m. with stephanie ruhle and 3:00 p.m. you can find me on facebook, snapchat. let me know what you want to talk about and we'll bring it to you. have a great weekend. "deadline white house" with nicolle wallace starts right now. >> hi, everyone. it's 4:00 in new york. the two biggest legal threats facing the president, robert
mueller's russia probe and an alleged hush money payment to porn star stormy daniels are today converging on one man. michael cohen, trump's personal attorney and as vanity fair styles him a real life ray donovan. last night trump through cohen under the bus blaming him for hush money payment to porn star stormy daniels. the stormy saga may be the least of cohen's legal worries. it now appears bob mueller's russia probe may be zeroing in on him. mcclatchy reporting mueller's investigators are particularly interested in interactions involving michael d. cohen, trump's long-time personal attorney and trump former organization employee. among other things, cohen was involved in business deals secured or sought by the trump organization in georgia, kazakhstan and, wait for it, russia. unpacking the trump/cohen relationship and their shared legal woes brings a village and we brought one to the tle