Taxes, Trade,Tariffs and Trump with Robert Reich and Stephen Moore — Point/Counterpoint

Taxes, Trade,Tariffs and Trump with Robert Reich and Stephen Moore — Point/Counterpoint

October 12, 2019 98 By Stanley Isaacs


(drum music) – We want to have a
conversation here today. We want to talk about substantive issues. I think it’s really important
to hear both sides of issues because it often makes you
reexamine your own positions and get deeper insights
into your own positions. We’ll try to focus on the
facts as much as possible. And everyone gets extra
points for citing true facts and not false facts, no
trivia, no personalities, just hard hitting issue analysis. With that, let me start
with the first question, which is a yes/no
question, president Trump, who just appointed Larry Kudlow as his new economic advisor–
– No. (audience laughs) – In seeing, no, no, no,
that’s not the question. In seeing Larry Kudlow on TV, he said, you’re looking handsome, Larry. Is Larry Kudlow handsome? (audience laughs) – Well, he used to do
Cadillac commercials, so yeah, the guy is handsome. – So he’s handsome, Bob? – No. – No. (audience laughs) Okay. Well, I think we’ve run
that one to the ground. That was a good debate. – Yes, thank you, thank you for that. – Good opinion. – Can I just add a word of… Of welcome to Stephen Moore
because for the last 15 years. – More than that.
– More than that. – Maybe 20 years, 30, 40? Stephen and I have debated on television with Larry Kudlow very
often and I have enjoyed debating you, Steve, I think
you’re wrong most of the time, but no seriously, I’ve
enjoyed debating Steve and I consider you a real friend. When you are debating on
television, one thing that you, you don’t have a chance to see
the person you’re debating, so it’s a kind of surreal
experience, Steve, to have you, a hologram of
you sitting right next to me. – Yeah, I used to say,
with, because we did this almost 20 years on CNN
every week, they called us the dynamic duo, and
every once in a while, like, every once in a blue
moon, Bob Reich got it right, you know, and so I used to say, you know, even a blind squirrel finds
an acorn every once in a while and that’s true.
– Thank you for that. – Okay, gentlemen. (men laugh) So now that we’ve settled that
and the Larry Kudlow issue to some extent, knowing there’s two sides to that one as well, I want to talk about the following topics in order. I’m gonna start with money in politics. I want to go to crony capitalism. I want to talk about
free trade and tarries, the 2017 tax bill and income inequality, so we’re gonna discuss those issues. We’ll be here three or four hours, but let’s see if we can get
through this fairly quickly. So let’s start with money in politics, is money in politics a
problem in America, Bob? – Yes. – Steve? – Yeah, because our government
is way, way, way too big. – Well, let me elaborate. (audience laughs) What we have here is, the
term crony capitalism, Steve, is one that I keep on hearing,
many people call themselves conservative Republicans use, and I agree. I have seen really over the last 50 years, my first job was in Robert
F. Kennedy’s Senate office. I was an intern in 1967. And I’ve seen just this
tide of money coming into Washington, now the interesting
question and I think here is where we may disagree
is cause and effect. And I have seen the
tide of money coming in mostly from big corporations
and from Wall Street and from wealthy individuals
in order to influence government, and Steve, I
don’t know whether you see it that way, or whether you
see government being large and as it gets large,
there’s more money coming in to influence it, but there’s
no question that money has taken over much of our policy making and I hope you agree with me
and that’s a real problem. – So look, I mean, by
the way, let me just say, right from the start that
I want to thank my friends at Young America’s
Foundation for sponsoring me to come here, so thank you, yeah for that. I think the causality
goes both directions. I mean, I think there’s a
lot of naivete on the left. People say, oh my God, there’s
so much money in politics, they’re spending so
much money on lobbying, they’re spending so
much money on campaigns, but folks, we have a four
trillion dollar budget. Four trillion dollars. Is it a surprise that
companies and special interests and whether it’s the gun lobby
or this lobby or that lobby is going to spend a lot of money, in fact, I’m surprised that the
lobbyists aren’t spending even more money trying to elect candidates and trying to influence
Congress because when I first came to Washington, you
mentioned that you worked for Robert F Kennedy, when
I came to Washington, I’m a little younger than you are in 1983, the federal budget was at that time, I’ll never forget
this ’cause I was working in the Reagan administration at that time and I was working for Jim Miller, who was the budget director, ’84, ’85 and we introduced the first
one trillion dollar budget in American history, we
were very proud of that as Reaganites and I’ll just
tell you one really interesting quick story about that. So Jim Miller was supposed
to go on the Today Show which was the show with Katie
Couric and he couldn’t do it that morning because he
got sick and he called me and he said, Steve, can you
go on Katie Couric’s show and defend the president’s budget? And I spent literally the next two nights just completely cramming
every statistic I knew in the budget, I knew what the budget was for the army, you know, the
Department of Agriculture, World Series, whatever
it was, so I was ready for any question Katie
Couric might ask me. And Katie, the lights
come on, cameras rolling, Katie Couric kind of
growls at me, she says, Mr. Moore, I see that
Ronald Reagan is introducing the first one trillion dollar
budget in American history. Says, my first question
for you this morning is how many zeroes are there in a trillion? (men laugh) You know, I just melted down. It was the worst interview of my life, but my point is, it was a
trillion dollar budget back then. By the way, there are
12 zeroes in a trillion, I know that now by heart. But now we’re at four
trillion and even adjusting for inflation, we’ve doubled it. We’re spending way too much money. We have so much crap in the tax code. One of the things we tried
to do in this tax bill. We didn’t, we succeeded a
little bit but not much, is get rid of all the
junk in the tax system. One of the things that I
think Bob and I might agree on is the idea of let’s get rid
of all the special interest loopholes in the tax system
for all of the special lobbies and get the rates down and that would be an efficient tax system, so less spending and a simpler tax system
I think would reduce the influence of the lobbyists. Now why would you be against that? – I’m not, I’m not, again,
it’s cause and effect. What I’ve witnessed, and
this is certainly the case at least since the mid ’80s,
is that the lobbyists come in and they want exemptions,
they want loopholes, they want everything
because they want to justify to their industry and to
their trade association and to others that they’ve,
basically they’re worth all of the money that they’re charging and that set of loopholes
and that set of exemptions makes everything more complicated. It makes the tax code more complicated, it makes the enforcement more complicated and also it results in less
revenue for the government so it drives up deficits. There is almost no way to
stop all of this, short of– – A flat tax, oh, sorry. (laughs) – No. (audience laughs) Short of major campaign finance reform and full disclosure of who’s
actually contributing what to every campaign or
against every campaign. And public financing and a
lot of things that can be done even with Citizens United
and Steve, I think you and I would agree on much of that. – So let me just give one
example of something I worked this past, you know, six
to nine months trying to get rid of, a special interest
provision in the tax code, something probably a
lot of you in this room, I’m just guessing probably
favor, which is, you know, we have these massive
giveaways in the tax code. To the wind and solar industry. We pay them money to
produce energy because they’re so inefficient relative
to coal and natural gas and the industry even admitted,
the wind industry said there would be no wind
industry in America today were it not for these tax
subsidies and guess what, we couldn’t get rid of
’em because a lot of your Democratic friends, you know,
said they couldn’t possibly support that and some Republicans as well. My point is, too oftentimes
liberals say, well, we’re against the special interests, we’re against this or that,
but when it’s their special interest, they’re in favor of it. – Well what about, but oil
and gas, Steve, get so much subsidies.
– Get rid of those subsidies too.
– Let’s get rid of all of those subsidies,
but I don’t understand how the carried interest
subsidy interest loophole. – I wanted to get rid of that too. – Well, wait a minute, how did
it survive, because everybody – Because there were a lot– – Everybody, including the President– – There were about eight
private equity billionaires, I mean, it sort of makes your point. Who give a lot of money
to the Republican party who said we can’t support this
bill if you get rid of it. I fought it, you know,
and in the end of the day, that private interest loophole
is still in the tax system. I’m embarrassed by that, but
I’m gonna make a second run at that, I promise you guys.
– I’m embarrassed by it too and I’m embarrassed by a lot of things, but we can’t get rid of it
and all of these loopholes and all of this corporate
welfare until we get some control on campaign finance and
you would, it sounds like you’re agreeing with me on this. – You know, I… What I’m for is people
disclosing what they’re giving. I think we should have open,
if you’re gonna give money it should all be disclosed
and let people out there see. – Full disclosure. (men laugh) – By the way, I just
have to make this point, that you were saying that
Robert Reich won this very prestigious Time
magazine award for being one of the 10 most successful
cabinet secretaries. Aren’t there only 12? (men laugh) – [Robert] No, there are eight, actually. – Just teasing, couldn’t resist. – But, look, I think quite
seriously, this is something that we have a lot of agreement
on, and I’ve talked to some extremely conservative
members of Congress who agree on this too,
it’s very difficult to do and the only way we’re
gonna do it is if we get big corporations and
the left and the right, Democrats and Republicans
to form a coalition and force full disclosure–
– I am for it, I am for it. – Stop the revolving door, at
least slow the revolving door. – I’m for that.
– Do all of these things. – But you know what, I
mean, look, I worked on the campaign, I was a
senior economic advisor for Donald Trump, what, you know what, and I went with him to all
these areas of the country. I mean, I heard his speeches
over and over again. His most powerful applause
line other than build the wall was drain the swamp and Americans, look, Americans are much more even
upset about this than you are, Bob, I mean, I’ll give you
a statistic that I think summarizes everything that’s
wrong with our government today in Washington, I live in
the belly of the beast. I live in the swamp. Three of the five wealthiest
counties in America are in and around Washington DC. Now how did that happen? Because you know what folks? We don’t produce anything. All we produce is lawyers,
lobbyists, special interests, politicians, rules and
regulations, and we’re getting rich off it, and you know
what, the American people are getting pretty upset about it, so. – Well, let me just, I
don’t want to go too long on this, because we have agreement here. In 1976, 3% of retiring
members of Congress became lobbyists, 3%. Today, 49%.
– Pathetic. – Of retiring members of
Congress, from both parties, become lobbyists, and I think that’s– – I’m surprised it’s that low. – And I think it’s a testament
to the amount of money that is circulating in Washington and that’s got to stop, so
we have an agreement, good. – Let’s move on to tariffs,
so Bob, you were an early opponent of the Transpacific Partnership, and I think Steve has
got some criticisms of it but was basically a
proponent of free trade and of the Transpacific
Partnership, although you can speak for
yourself, but tell me why you were opposed to the
Transpacific Partnership and does that mean you’re
in league with Donald Trump? (audience laughs) – Well, last question
first, no, but I didn’t like the dispute mechanisms, in
fact, there was a similar dispute mechanism in a
much smaller form in NAFTA, the North American Free
Trade Act, but actually under TPP, you have a much larger version and that dispute mechanism
is between any corporation, for example, that feels
that for some reason a member state, a member
country, to the TPP has discriminated against
them or there’s a non tariff barrier, health, safety,
environmental regulation, labor regulation, whatever,
and that dispute can be under the TPP, could be
dealt with by arbitrators and the arbitrators are not
necessarily selected by any member country but
the net result is that anybody who has a grievance
and could be rewarded damages from those health, safety or
environmental regulations. If you follow my argument,
that means that the TPP could discourage any member
country from generating any protections for the
health, safety or environment or labor and that to
me is not only an issue of sovereignty but it also
is an issue of just politics. It means it would be harder,
that much harder actually to protect members of that society. – In general, though,
are you for free trade? Do you think that’s a good idea? As a principle?
– In general, I, in general as a principle,
of course, I think free trade is a good idea, but see, this
is the interesting issue, Henry, we have debated free
trade for years and I’ve been on the side of well, stronger
environmental and labor protections, Steve, you’ve
been on the side of free trade. We’ve debated deficits,
I’ve been on the side of well, deficits may not
always be a problem. You and other conservatives
have been on the side of we really do need to control deficits. We’ve debated states’ rights
and I’ve been on the side of federal government does
really need to preempt states and you and other conservatives
have been on the side of states’ rights, we debated Russia and I’ve been saying, you
know, we really shouldn’t be so hard on Russia, and you
have been on the side of we have to be more aggressive on Russia. Every one of these issues, we
have completely flipped around under Donald Trump, every one
of them is now the opposite. – So I mean, look. I always say about Donald
Trump, you know, ’cause I’ve gotten to know him very
well and I admire a lot about Donald Trump, but look,
there is a good and a bad and an ugly, when it comes to Donald Trump and every morning… – [Robert] Do you want
to assign percentages to each of those? (audience laughs) – Every morning, this is
not being taped, right? But no, every morning
when I say my prayers, I say please God, let the
angel on his shoulder, not the devil on his
other shoulder, prevail. So when it comes to issues
like Russia, you know, I don’t understand this
dalliance with even what he said today, congratulating
Putin on the election. Why would you congratulate
a guy who rakes elections on winning an election? So you’re right about
that, now on this issue. – I do have a theory to explain that. (audience laughs) – I’m not so sure I want to hear it. On this trade thing, I
mean, this is getting to be a very complicated issue,
we’re gonna see in the next week or so a major call for
a major tariff against China. I have to confess, I’m
not an expert on the TPP so I’m not gonna really get into that. I will say this, that
I learned my economics from Milt and Friedman,
who I think are two great economists, and
they always talk about the four pillars of
prosperity, and those pillars, and I think they’re just
important to write down. Sound money, I think we all agree on that, a sound currency that retains its value. Second of all you need free trade. Third of all, you need a
light hand of regulation and fourth a good tax
system, and I still believe that to this day, that if you
get those four things right, you’re gonna have a prosperous economy. Trump challenges the conventional
wisdom of conservatives on a lot of these things,
there’s no question about it. On trade, we can get into
this into a bigger way. I think trade, I mean, I think Trump, there’s new, what I call
a Trump trade doctrine and what that doctrine is… Using, look, the United States is the hub of the global economy, right,
and every other country is a spoke and what
Trump is basically saying and I’ve talked to him about this is whether it’s China, whether it’s Japan or whether it’s Korea
or whether it’s Mexico, they need us more than we need them so let’s say we had, God
forbid, a trade war with China. What would it mean for the United States? Well, it’d mean when you go
to Wal-mart, you might have to pay 10 cents more for
toothpaste or you might have to pay $29 more for a
cellphone ’cause a lot of these phones are made in China,
if China can’t sell to us they go into a recession,
right, and I think what Trump is basically
trying to do here is use that leverage and that’s
why, remember the other day when he said, we can win a trade
war or something like that, I mean, with Trump you have
to kind of read through what he’s saying, what he meant to say is, we have a strategic advantage
over them because if it gets to that point, they have
more to lose than we do and they’re gonna blink
first, I think that’s what, and by the way, you
can disagree with Trump on the policy, right, I mean,
you can say this is stupid, like, I thought the steel
tariffs were stupid. – The steel? – The steel tariffs I
thought were a bad idea because all you’re doing is
raising the price of steel. I told the president,
I said, you’re not even gonna create factory jobs
here because for every one steel worker, we have 50
workers in manufacturing that use steel, now our steel’s
gonna be 20% more expensive than the steel, so it doesn’t
even work in that respect, but I will say this, you
know, and you know this because you’ve done
this too, I mean, I went with Donald Trump to
Pennsylvania, Ohio, Michigan, West Virginia, Iowa, those
blue states that went red and I would say that if Trump
had taken a conventional Republican position on trade,
Hillary Clinton would be president today, so this is
a challenge for those of us who believe in free trade, right? We haven’t convinced the
American people that free trade is good. – But don’t you think
a lot of that has to do with the failure of both
parties to deal with the consequences of technology? – That’s true too. – Which is actually having
a much bigger effect. – I totally agree with you.
– On jobs. – By the way, let me just, on steel, the reason we’re losing steel jobs is not because of trade, it’s
because if you go, when I was 12 years old, I grew up in
Chicago, my parents took me to a steel mill in Michigan,
I mean, that was like a 19th century sweatshop
with thousands of workers carrying around heavy
beams, I mean, truly, drudgery work, you go into–
– And a lot of injuries. A lot of injuries. – Yeah, today steel mills
are people walking around, it’s all being done robotics,
Trump is wrong on this. We’re not losing steel
jobs because of trade. It’s because of, and by the
way, that’s gonna continue. 10 years from now there
won’t be any steel jobs, probably, right, because of technology. – Right, but back, if it’s
true that both parties have failed to deal with
the quote unquote losers, the people who are losing
their, what had been middle class jobs because
of first technology, secondly globalization, then
isn’t the debate over tariffs sort of beside the point,
I mean, shouldn’t we say, let’s not, let’s not try to
protect industries with tariffs. Let’s try to make it easier
for people to move from job to job and get better
and better and better jobs with better education,
better job training, more of a re-employment assistance? – Yeah, yes. – Put that down, that’s another issue. – (laughs) No, I mean,
you’re absolutely right. I mean, now look, the problem
is, like Hillary would go to these towns in West
Virginia, we went to these coal towns, and you know,
these places have been just decimated, in no small
part, in my opinion, because of Obama
regulations that just killed the coal industry, now,
there’s an example though, Bob, where Trump has gotten rid of
a lot of those regulations, and guess what, the coal industry is back. We’re, and my point is,
though, Hillary went and said exactly what you said, oh,
you can do something else. We’ll retrain you for this or that. – No, no, politically, that’s– – It’s her thing to
tell a guy who’s worked in a coal mine for 25 years, oh, you know, you’re not gonna be
able to do that anymore. You’re gonna do something else, but I’ll give you another statistic. One out of 11 males in
America today is hired, what they do for a living
is drive a vehicle. Now how many of those jobs
do you think will still exist 12 years from now? – Four and a half million
are gonna be eliminated. – Yeah, exactly, so this
adjustment is happening, it’s the issue of our time,
frankly, I mean, folks, this technological boom that’s coming, whether it’s artificial intelligence, whether it’s robotics, whether
it’s the driverless cars, they are gonna change life in
this country and on the planet in ways that nobody is looking
at and make these other issues small. – But so what does government
do in these situations? You want the government
smaller, but it seems to me that if we’re going to help
people who lose their jobs in these instances and
there are no other jobs, what do we say to these people? – Don’t we have to have
stronger safety nets? Don’t we have to have a
universal basic income? Don’t we have to have a larger
earned income tax credit? Don’t we have to have
a re-employment system that provides education and job retraining that is really useful to these people? In other words, politically,
both of us agree it’s not possible to say to these people, we’re gonna get you another job or you’re going to get another job, but don’t we have to be serious
about making it possible for these people? – Well, look, I’m not one who believes that this is the end of
work and end of jobs. I mean, there will be jobs
in the year 2025 and 2030 and 2035, there’ll probably be more jobs than there are today, but
they’ll be different kinds of jobs, and we’re not, I
mean, my point is, look, the kinds of things you’re
talking about small potatoes in the grand scheme of things. What we have to do is get the
next generation of workers ready for the, you know, look, you’ve got to have a skill. Right now today if you have
any useful skill out there whatsoever, you can find a job in 24 hours and there’s five million
more jobs out there than there are people to fill them,
so what are we talking about? There’s not a shortage of… Jobs right now, there’s
a shortage of people who are trained to do the jobs. If you’re a mechanic,
if you’re a carpenter, if you’re an engineer,
if you know anything about computers, you can
find those jobs out there. The problem is and I’ll say
this about this university but every university, I mean,
we’re graduating with kids with psychology degrees and
political science degrees and frankly, there’s not
a big demand for those. – Well, just for the record,
there’s a great demand for UC Berkeley graduates,
they do very well. (audience applauds) They really, really do.
– That’s why you’re here. – And this university
is extremely successful at educating people to go on
to make very, very good money. I’d be happy to show you the data. Sorry. (audience laughs) (audience applauds) – But I think, Henry, that
Steve is absolutely right that the issue–
– You write that down. – The issue in the future
is not the number of jobs. The number of jobs really does
reflect macroeconomic factors stimulating demand adequately,
it’s the quality of the jobs. It’s what the jobs pay and
that’s what I worry about. – Well, the higher paying
jobs, not lower paying jobs. – Well, we’re not seeing that trend. In fact, for the last 40
years, Steve, you and I have been talking about this,
median wages have been stuck. There’s been wage stagnation. – Not the last, no, no,
that’s where you and I part company, for the last 15
years they have been stuck, but we saw, now, it depends
on what kind of compensation, but if you look at just
compensation to workers when you include benefits
and things like that, in the 80s, we had a big boom
in middle class, you know, compensation and Laura
Tyson is here, what you guys did in the 90s, that was a great
period for the middle class I would argue the 80s and
90s were great periods of economic mobility for people. Now it stalled in the last
15 years ’cause I think we’ve done a lot of stupid
things that haven’t been good policy, but this
idea that, I mean, look, I reject this idea which
you say all the time. Workers are not as well
off today as they were 40 years ago, I mean, does
anybody really believe that? I mean, come on.
(audience says “yes”) No, 40 years, we didn’t
have all these things, we didn’t have the
computers, we didn’t have the technology, we didn’t
have the big screen TVs, we didn’t have the medicines
that we have today, the world is so much,
would anybody really rather have been alive 40 or
50 years ago than today? Come on. – Here’s the thing, you
know, 50 years ago, even 40 years ago, we had something
called labor unions, which gave workers a lot
of bargaining leverage and right now today, we have fewer than 7% in the private sector are unionized and that shows, there’s
an absolute correlation between the median wage, the
decline of the bottom 60%, particularly men, and the
decline of unionization and Steve, you and I can
really bore everybody with a data fight over
whether or not adjusted for inflation today’s wages
for the bottom 60%, 70 or 80% of males are better than they
were, 40 or 50 years ago. I don’t think they are,
but we can debate that. I think the point is that
quality jobs are really critically important
and a lot of the anger that I saw in 2015 and 2016,
going into the election, one of the reasons I
think that Bernie Sanders and Donald Trump did as
well as they both did, surprising everybody, was
both of them responded in very different ways to
the anger that so many people had about a system, a
political economic system, that was not responding.
– I agree with that. I think that’s true. People are, but I would
only make the point that I think it was political,
economic and cultural. I mean, people, you know,
look, what Hillary said the other day, you know,
was the way I think a lot of us conservatives
think that liberals think about them, you know,
there was a view of these, ’cause I talked to a lot
of these Trump voters, these middle class voters, and
they were basically feeling like number one, they
were afraid to speak out because of political correctness. One thing that Trump did
I thought masterfully was just, you know, put aside the rules of political correctness and violate them and people would say,
finally, somebody’s saying the kinds of things that we
wanted to say for 15 years but we get shouted down every
time we want to see them. These kinds of speech
codes on college campus. I hope you don’t have speech
codes here in Berkeley. I mean, universities should
be places where you have open expression, that’s
why I so much appreciate the opportunity to come here and talk, but too often, conservatives feel like we’re just being
smothered by liberal rules and that kind of thing, and so I think it was cultural as well. – Well, let me just say for the record, I know you don’t mean this, but I think that Donald Trump has legitimized hate. (audience applauds) – I think he’s legitimized
a sense of hopelessness of people and a sense that
their voices aren’t being heard. – Well, the other thing that
you said about Donald Trump saying that he was going to
take on the swamp in Washington, he did say that, but the
swamp is deeper and bigger and broader and fatter and
there are more swamp creatures than I ever saw in Washington ever before. (audience applauds) I want to, I don’t want,
this is not fair to Steve. This is Berkeley and if you
applaud what I’m saying. This, I mean, I really
appreciate you being here. I asked you to get a visa
to come into Berkeley. – No, but look, on this
trade issue, I really want your kind of reaction, I want to throw out a kind of hypothesis on this
and I want your reaction. I asked Laura about this earlier. Trump is basically gonna
say, we’re gonna put a 30% tariff on Chinese goods
and that’s coming I think in the next week or two, and
that’s gonna be a big boom. I mean, the world is
gonna react in a big way. That’s gonna get Beijing’s
attention in a big way and, you know, I am a free trader
and I want you to react to this, but look, China,
the report just came out a few weeks ago, the Chinese
are stealing $500 billion of our technologies every year. A lot of that technology
and that knowhow and patents and the copyrights and
the computer software, that’s made right here, right, in Berkeley and the Bay Area and Silicon
Valley, they’re stealing it. We also know that they’re
building up their military in China, we also know that
the reason this lunatic in North Korea has a nuclear
bomb is because China enabled that to happen and you know what? I’m with Trump on this,
I think it is time we get really tough with China and
basically say, you’re not gonna have access to American
markets until you behave like civilized people,
and you’re not doing that. You’re cheating and you
can’t have free trade with a country that’s
cheating and stealing. – Well, I want to say first
of all that China is a rogue in terms of trade, I
agree with that entirely, and if you’re incorporating
in terms of your definition of trade, intellectual property
theft, I agree with that as well.
– What do we do about it? – That’s the question,
what do we do about it, because I’m afraid that a 30%
tariff or any major tariff on Chinese goods coming
to this country is going to shoot us in the foot
more than it hurts China. – Wow, how could that be? – Well, it could be
because China is a large and growing economy and
it is very self sufficient in many ways. – But they need access to our markets. – And also its sphere
of influence is growing. The United States right
now doesn’t play the role of world leadership that
we played in the past and I think that when
we are in that position, China is going to continue
to trade with the rest of the world, with Europe,
with Canada, with every major nation, we are going to be left out. – I don’t believe that, I
just don’t believe that. The rebuilding of our
economy that’s happening, in no small part because of
Trump policies on regulation– – What do you expect
China will be able to do, because for example, one
of the things you want them to do is to open up to us,
but that might be even more frightening than a recession
to them because that might lead to Americans being
much more in the economy, maybe a Facebook run by Facebook
in China that really isn’t censored and so on and so forth, that’s really scary to the Chinese. Do you think that’s really
feasible, that something like that’s gonna happen? – I’m not sure I’m following,
I’m not sure I understand. – Well, I’m saying that
if we started to have more opening to China, that
means we have, for example, perhaps a Facebook we’re running in China that’s uncensored because I
think that’s the kind of thing you’re asking for, real
free trade, but if you have an uncensored Facebook in
China, the regime is not gonna be happy with what’s
gonna be on that Facebook. – Of course, I mean, look,
this is an oppressive regime. They’re tyrants, they are not, they… Look, the leader there just made himself the president for life, they’re
not gonna have elections. – So what do you expect him to do, are there things they can do
that will satisfy Mr. Trump and us and that allow us
to not impose a 30% tariff? – So he can basically say a couple things. Help with disarming North
Korea, right, how many of you are for that, don’t you want
to have North Korea not have a nuclear bomb, I mean,
we have the leverage to force them to do it,
maybe we do, maybe we don’t, but we should try, number
two, they have to start, I mean, this is a point
that Laura Tyson was making earlier and I think it
makes a lot of sense. We should… Get them to buy more of our
stuff, whether it’s our weed or our cotton or whether it’s
our copper or our computers and actually pay us for
it and that’s the kind of trade deal that needs
to be made with China. – That is precisely the
question, how do we get them? – Because if they don’t, then
they’re gonna be severely penalized, and this is
where I disagree with you. They can’t function as an economy in 2018 if they can’t sell to
America’s four trillion dollar consumer economy. – Well, but there are
two parts to your thesis. One is that they’re gonna
be hurt more than we are gonna be hurt and secondly
that by doing that, the outcome is going to
be we get more leverage and that down the road
they’re going to change their policies.
– They’re gonna blink. – And they’re gonna blink.
– You don’t think they will. – I think it’s a dangerous,
dangerous game to play and we could end up easily worse off. Now a lot of–
– So what’s the alternative? – A lot of our exports,
you know, there may be an alternative in terms of
using the rest of the world. The rest of the world has
an interest in an open trading system.
– Sure, absolutely. – The rest of the world also
has an interest in rules that everybody plays by
that are neutral rules and why can’t we, I mean,
we were already making some progress, I mean, the
WTO, I think was a very good idea, the World Trade
Organization, and Chinese ascension to the WTO, I thought
opened the way, if it were correctly used.
– They don’t, they violate every WTO rule. – I’m gonna end this because
I think what we need to do is get a panel of Chinese
experts in here to say what’s the likelihood they
will blink or won’t blink. Because, you folks know
a lot about economics but I don’t think China is
your greatest expertise. So let’s go to another area
where I think you will have expertise, and that’s the 2017 tax bill. You’ve already said, Steve,
that you think that it did good things and simplifying
the tax code in some ways and also providing tax breaks
that will help the economy. Bob, do you think that 2017
tax bill was a good tax bill and that it will really
actually be equitable for people and second of all that it
will stimulate the economy? – No. – Explain. (laughs) – You know, number one,
I think it’s exacerbating already inequality, number
two, most of the profits, that extra profits that
corporations have got, corporations are using to buy
back their shares of stock. They are not using them to
invest or to increase wages of average workers, number
three, I think that it’s going to exacerbate our deficit and
our national debt problems. Now I’m not a huge worrier
about the deficit or the debt but generally speaking they aren’t going in the right direction and number four, politically, it sets up the Republicans and the
Trump administration for beginning to say, well,
we can’t afford you name it. Medicare, Medicaid, Social
Security, it’s kind of the starve the beast that we saw beginning under the Reagan administration,
so for those four reasons I think this was a terrible
idea and to add insult to injury I hear Larry Kudlow and his new boss are talking about a second
tax cut, is that right? – There’s some talk about
that, so let me kind of explain very briefly what we did and why we did it because I think it’s kind
of important for people to understand the thinking behind the plan and so Larry and I sat down
with Trump two years ago, walked him through this, he
got it pretty straightforwardly and I think, you know, you all will too. First of all, the heart
of the plan, the gemstone of the plan was to get our
business tax rates down. What we’ve been talking
about for the last 20 minutes is we’re living in a
global economy, the genie is out of the bottle, it’s
not being stuffed back in. You all aren’t gonna just be
competing here in California against people in Tennessee
and Texas and Florida. You’re gonna be competing
against people in Beijing and Germany and France
and Spain and Australia. We’ve got to get competitive
and we had a tax system, frankly, Bob, when it came
to the way we were taxing our businesses, you couldn’t
have come up with anything stupider, you know, we had
the highest statutory rate in the world, so we were
at 40% when you count state and local taxes and the rest
of the world, which by the way, 25 years ago was at 40%,
kept cutting and cutting and cutting and cutting and cutting. So much so that the rest of the
world was down to about 20%. We’re at 40, ladies and
gentlemen, if you care about America, you care about
American workers and American companies, and you want
us to be number one, that doesn’t work, it doesn’t
work for us to be at 40, and them to be at 20, I called
this a headstart program for every country that
we’re competing with. Why would we want to do that? So we basically said to Trump,
let’s get that corporate rate down, you know, he wanted
15%, this is an area where he’s a master negotiator. He stuck with 15% throughout
and that’s how we got 21. If he had said 20, we would
have ended up with 25. We’re right back in the game right now. All of a sudden, the reason
I think you’re so wrong about the impact of this in
just the first three months and we’re just sucking
capital now back into the United States in a huge way, I mean, the biggest economic news
story, ladies and gentlemen of the last three years,
was the Apple story. I mean, this is gigantic,
Apple is bringing 300 billion, not 300 million, $300 billion
back to the United States and they’re gonna invest
it here, they’re building a new plant with 25,000 workers, I mean, this is a big deal, and those
are gonna be good paying jobs. Now look, some of that money
will probably be paid off in dividends or buying up
shares of their own shares, by the way, why does a
company buy its own shares? Because it wants to increase
the value of the share, right? And we have 100 million
shareholders in this country, they’re all gonna benefit from this too. So that’s been a huge
benefit, we’ve already had five million American workers,
the vast majority of them in the middle class, who’ve
gotten bonuses, pay raises and increases in benefits,
I mean, the other day I’m walking down the
street, I was in Dallas, this Guatemalan woman
comes up to me, she says, are you the guy on CNN
who talks about economics? She said thank you for the tax cut. I just got a $1500 bonus from my employer. Now to Nancy Pelosi, $1500 may be crumbs, but you know what if you’re
making $40,000 a year, a $1500 bonus is pretty significant. So this is going to help in
my opinion, Robert Reich, middle class workers as
we get more jobs here, we get more productive,
businesses invest here, that was the whole philosophy behind it. It was not and I’ll repeat this 100 times. It was not because we wanted
rich people to make more money but here’s a statistic for
you all to think about. When you talk about the top
1%, you know, the people who you say have all the
money, but what do those people do for a living? 2/3 of them own, operate and
invest in small businesses and you can’t have jobs without employers and that’s what the whole thing was about, is getting money to the businesses so they can invest it in America. – Bob, I’m gonna give you a
second, I just want to say there’s cards on your chairs
and if you want to write out a question please do so, and
then there will be people coming by to pick them up, and Bob Reich. – Well, for example. You can’t have and businesses
are not going to invest without customers and one of
the biggest problems we have and businesses face as well
is a shrinking middle class. I mean, with so much of
the income and wealth in this country going
to the top, you know, wealthy people spend a
very small percentage of their income and certainly their wealth– – [Steve] They’re investing
it in the business. – But they’re not
investing, that’s the point. – They’re saving, what
are they doing with it? – Steve, you’re saying
that they’re buying back their shares of stock and
when you say that’s great for everybody, that’s not the case. I mean, the top 1% of
Americans owns 40% of the total stock market, the top 10% own
80% of the total stock market. – Well, where do you think
the California teachers pension fund is invested, all
of this money is invested– – But that is the reality,
that the top 10% own 80%– – Well, that’s a terrible
thing, we should let people put their Social Security
money in the stock market so everybody owns stock. – But Steve, Steve, the
reality is, the reality is that taking all of this tax
money, these major tax cuts and giving it to corporations
in terms of increasing profits and then turning
around and buying back their shares and making
the wealthy even wealthier, that does not do anything
about the underlying problem of stagnant wages and widening inequality. Besides that, besides that,
there is kind of an underlying philosophical difference, and
you and I have been around this, you know, we’ve debated
this for 15 or 20 years about whether trickle down
economics actually works. And whether there is any
empirical data to support. – Which there is.
– Trickle down economics. Which there isn’t. – (laughs) I mean, we
look at the same body. I mean, the three most
prosperous periods, you know, for the last 100 years, were
the 20s, when Calvin Coolidge cut taxes and the 60s, when
John F. Kennedy cut taxes. Now we actually had a very
prosperous 80s and 90s period as well when Reagan cut
taxes, you could say, I know that you all,
’cause you work, you say, well, Clinton raised taxes but
we did all these other things We did welfare reform,
we did free trade deals, we did the capital gains tax cut, I mean, look, when you lower your
tax rates, you make America more competitive, you’ve
got to admit that point. I mean, countries do
compete, why do you think all these countries all
over the world have been cutting their corporate
tax rate for the last… – Well, that’s actually,
you’re proving my point because when we’ve cut
the corporate tax rate, what, do you think other countries are not gonna cut their tax rates?
– They probably will. – They’re gonna do exactly what we do. That’s exactly what this,
there’s a race to the bottom. – But we didn’t do it for 25 years, and the rest of the world so we had this massive gap,
the other thing we did, by the way, which I think
was wildly successful was we recognized that there was
something like three trillion dollars that was sitting
offshore in Bermuda, in China and Ireland and all
these countries that have lower tax rates than us, and
these companies like Boeing and General Electric and
Apple and Microsoft wanted to bring the money back but they couldn’t ’cause they faced a stiff penalty. So Trump, I don’t know
why Obama didn’t do this. The money was just lying
there, waiting to be picked up. We basically said, we’ll charge
you 10%, you bring it back to the United States,
we think we’re gonna get about two trillion dollars
back, that’s $200 billion for the United States
government and it’s two trillion dollars that’s invested here, I mean, what’s wrong with that? – In 2004, we did exactly the same thing, wait a minute, under the same promise, that it was all going to
lead to big, big investment and it was going to generate more jobs and higher wages and it didn’t. We did the same experiment.
– We just had Apple bring $300 billion dollars back. I think this tax cut would
have been worth doing just to get Apple to bring all this money back. – Let me ask you a question
that comes from something one of the audience persons asked and that’s this, suppose
you’re right that in fact this is stimulating the
economy and that’s great and jobs are coming back and so forth. If it is also, however,
going to make the rich richer and the fact is the tax
bill took the top tax rate, 39.6 and made it 37% and
therefore that’s one indication– – It’s much more than
that for the wealthy. It did much more than
that for the wealthy. – Well, I’m just taking
one thing that it did that actually palpably
decreased tax rates on the rich. Is this the time, given what
Mr. Trump’s political coalition is about, for us to be
going out and making the rich even richer, is
there a danger to democracy? Maybe we’ll have a great
economy but a lousy democracy ’cause we’ll have a lot of
people out there who are really ready for revolution because
they feel like they’ve been so badly harmed and that
this is the new Gilded Age with lots of rich people
who are treating them badly? – And by the way, a lot of
those people are right here in Silicon Valley, I mean,
yeah, we do have Bill Gates who has $50 billion and we
have the people running Apple who have billions and we’ve
got Zuckerberg, who has $50 billion, so what do you want to do? Would we be a better
country if we just deported all those people, I mean, I
just don’t get this, look. I think you all obsess–
– No, no, I guess I’m saying, why did we decrease the tax rate from 39– – Because we wanted–
– To 37%. I know there’s a technical
reason, but tell me, was that good politics? – Yes, I wanted the rate
down to, look, in 1986, to give you a sense of
how things have changed in this country, in 1986,
Ronald Reagan had a bill with Bill Bradley and
Dick Gebphard, Sam Nunn, many Democrats and we
basically lowered the tax rates and broadened, you know,
lowered the rates, broadened the base and that bill that
lowered the highest income tax rate, none of you are gonna
believe this, but you’ll have to look it up, we got the
lowest tax rate down to 28% and that bill passed 97
to three in the Senate. Now we couldn’t even get a single– – Wait a minute. – We couldn’t get one
Democrat in the entire Senate to vote for a 37% tax rate. – Bob. – I thought that that ’86
bill was a very good bill. – Me too. – And it also leveled
the playing field between capital gains and ordinary
income and that was one of the most important aspects of that bill. But you know, I’m reminded
here, Steve, of something else that we have debated almost
steadily for the past 30 years and that is the issue of
economic growth and what really stimulates economic growth,
I mean, in the 1950s, the highest marginal income tax was 91% and the effective rate
was 52% on individuals and we were growing faster
at an annual rate than we’ve ever grown before or since. You refer to the golden age of the 1920s. I don’t want to live in
the 1920s even if I could. The 1920s was a period of extraordinary– – Wealth creation. – Wealth creation, inequality. – Yeah, the country got
rich, why do they think they call it the Roaring 20s? I mean–
– But it was also extraordinary inequality and corruption and it was kind of a period
of time that led ultimately to the great crash and
the Great Depression. Do you see any… Consequence between, in
1928 and 2007, the top 1% in both those years, 1928 and
2007, had the highest share of total national income
and we know what happened in the year after 2007 and 1928. Do you think there was any– – I mean, it is true, who are
these people in the top .001%? They’re people, look, you could
take Bill Gates, Zuckerberg, who’s the Amazon CEO, you
know, those five have… More money than most of
the countries in the world for goodness’s sake so
what do you want to do, confiscate, take their
wealth away from them? Look, here’s my problem with
the way you see the world versus the way I see it, I
want everybody to get rich, right, I don’t care, I
want more millionaires and billionaires in this country. I want everybody to get rich. We truly want to create
a rising tide that lifts all boats, I keep hearing you saying, there’s too many rich people,
no, there’s not enough rich people in this country,
we need more and more and more people to get rich.
– I’d never say there’s too many rich people.
– But the point is– – I’m not rich enough and
you’re not rich enough. – What Lapper would say to you is look, a good economic system tries
to make poor people rich. It doesn’t try to make rich people poor, and that’s where you and I disagree. You keep focusing on
these people at the top. All these people in
the middle, number one, these people are people
who created incredible technologies, I mean, what
Bill Gates and Steve Jobs and Amazon have done have
been amazing, I mean, they hire, I’m friends
with Fred Smith of FedEx. He’s a billionaire, he
puts 100,000 people in jobs and those are good paying jobs. – But Steve, I think what you are… Maybe not hearing what I’ve
said for the last 30 years that we’ve been debating. (audience laughs) – It just hasn’t come in. – Is that you need a demand
side, that is you need a middle class.
– We do, we are in complete agreement.
– A large, buoyant, and growing middle class.
– Yes. – And so I’m not saying
that it’s all about redistributing from the
wealthy to the poor. I’m saying that what you
need is a set of rules that actually makes your middle
class larger and steadily larger and more prosperous and that
includes public investment. – But I’m not hearing from
people like you, how to do that. – Well, I was just about to tell you. That includes public investment
in really good schools and job training and
infrastructure and public health and individual health as
well, healthcare is part of a productive system, you
want to make sure people are healthy because if
they’re not healthy, they can’t be productive,
so for all of those reasons, public investment is really critical. You can’t have adequate
public investment in all those areas unless you have sources
of revenue and where is the big source of revenue,
well, the big source of revenue is gonna be
either corporations. Now you just said you don’t
want to go after them. Or it’s gonna be very
wealthy people who now have a huge portion of the total
income and the total wealth. – So I think you’re missing
here, look, we both agree we want a burgeoning and
upward moving middle class. You talk about investment in this country. The word that I disagree
with is public investment. What our goal is with this tax
cut and we’re already seeing very positive results in
this regard is what we call cap ex, the capital
investment that’s happening by businesses in this
country, and guess what? In just four, you know, the
four months since the tax bill has passed, we have more than
doubled the capital investment rate than we have under Obama. One of the reasons the
Obama, you know, recovery was so flimsy and flat
and anemic was businesses weren’t investing and
now they are investing and there’s a very direct
relationship between the amount of money
that businesses invest, when businesses invest more in capital, whether it’s equipment or
machinery or computers, then workers are more
productive on the job, when workers are more
productive, right, Bob, they can be paid more,
that’s the reason why an American worker’s paid
more than a Mexican worker. They’re more productive,
so our whole thing, I mean, if Larry Kudlow were
here right now, what he’d say to you is cutting the
corporate tax is a middle class tax cut ’cause those are
the people who will benefit. The studies show about 60%
of the benefit from cutting the corporate tax rate,
the benefits go not to the shareholders but to the
workers who have more capital to work with. – Well, you better tell
that to some workers because they haven’t seen any benefit yet. – Well, it’s only been four months. – But every time Republicans are in, there is a big corporate tax cut. There was a big corporate tax cut in 2004 and there was a big corporate
tax cut under Reagan. – And workers did well in the 80s and 90s. I mean, why do you think, I mean, boy, it must not have worked
very well because gee, we cut the taxes in 1981 and
Reagan just squeaked through with reelection, winning
49 of 50 states, you know. I mean, I think the middle
class was doing pretty well back then. – Steve, I’ve got a question for you. When we sit down with Donald
Trump, and you’ve referred to that several times,
you sit down with him and you brief him, how does he respond to facts, logic and argument? (audience laughs) No, I’m serious, I mean, I
have not had the experience of sitting down and briefing him. Now that Larry Kudlow is
there, I expect I will have many more opportunities. – Donald Trump is an
extremely intelligent person. I mean, he really is, he is
an extremely intelligent, you couldn’t pull off what he
did, I mean, he pulled off, whether you love him or
hate him, what happened in November of 2016 was
the biggest political upset in American history, bar
none, no other is even close to that, and when he started
running for president in, you know, June of
2015, he was laughed at and this guy, television
talk show guy, I mean, he can’t possibly win and
so on, and he went out and built this campaign,
he has a sixth sense about what the American people
want, and you can call that demagoguery, but he sure
tapped into something out there that nobody else saw, I think
he’s got the right vision and his vision is very simple. It is to put America first
and that’s something frankly Obama didn’t do, we had these
crazy climate change deals and all these, the Iran
deal, all these things. No, everything Trump is going
to do is gonna make sure that it’s America’s national
and economic interests, not in the interest of
these other countries. – But isn’t that a view of the
world that is a zero sum game – No, no it isn’t.
– In which either we as Americans win or they win.
– No, no, no, no. – When in fact, the entire
post war prosperity worldwide has been a positive sum game,
we look for opportunities for everybody to win. – That is a great point,
I want to address that. No, the Reagan doctrine is very simple. The United States of America,
and my friend Steve Hayward is here, he’s written
three great biographies on Ronald Reagan, the Reagan
doctrine was very simple. When you are strong at
home, you’re strong abroad. When you’re weak at
home, you’re weak abroad. Why is it, you know, look at what happened in the Carter years
when we had Soviet tanks in Afghanistan and Nicaragua,
we had the hostage crisis, we were weak at home,
and we were weak abroad. Trump is gonna rebuild
the American economy, at least that’s what we’re trying to do, so we’re the alpha male
in the global economy and when we get it right
in the United States, the rest of the world will get it right, I really believe that. – But being the alpha
male in the global economy may be a dangerous thing to do. That is, the alpha males
of the world may not actually be the model for
the future of leadership in the world. – That’s the point, we’re gonna
show countries how to do it. You cut your tax rates, you
have stable money, you know, you have a light touch with
regulation, these kinds of things are what, I
mean, look, economic growth is not complicated and Trump
is focused like a laser beam on the stock market and
economic growth and I think that’s what he should be focused on. – But at the same time, it’s
conceivable that because of the tax cut, he’s going
to have to cut Medicaid, Medicare, maybe even Social Security. Do you think that’s a good idea in a time when we have lots of
people who are worried about income inequality and
who feel like they’re not moving forward and we’re
going to take those kinds of benefits away from
them, is this the time to be doing that? – Trump was very clearly, I
mean, drove liberals crazy. I was on the campaign,
Trump said, day one, we’re not cutting Social
Security, we’re not cutting Medicare, now it’s the
conservatives who don’t like– – [Henry] He said
Medicaid too, by the way. – He said Medicaid, okay, well. – I’m not sure he knew the
difference, but the point is, he did say Medicaid. – Okay, well, maybe not,
but when it comes to Social Security and Medicare,
which are extremely popular, look, I would reform those
programs if I were president but I’m not the president,
he’s made it very clear. We’re not cutting Social
Security and Medicare and look, the fact is, you
know, everybody in this room knows we’re gonna have to make
reforms on those programs, right, I mean, we’re all
adults, we know if you look at the demographic situation,
there’s 10,000 Baby Boomers retiring every year, we’ve
got these massive unfunded liabilities, we got to
do something about it. I mean, I’m in favor of
things like gradually raising the retirement age, I
don’t know if you are. You know, some changes
in the benefit structures that might lower the benefits
for the highest income people, that kind of
thing, does Warren Buffet really need Medicare, I
mean, those are the kinds of questions we need to
ask, but for the time being, Trump has said, no, I’m not
gonna cut those programs. So I don’t think it’s gonna happen. But he did say– – He did say Medicaid. – But Obamacare and Medicaid
are intertwined now, they’re one and the same
program essentially. – No, no, they’re really quite distinct. One is run through the
states, one is run directly through Washington.
– No, what Obamacare really was was just a
vast expansion of Medicaid and we’re now paying 90% of the– – That’s true too, yeah, but
he also said he would retain Medicaid, but again, he may not have– – Okay, so he missed–
– And it’s hard to get those differences. Bob, how would a universal basic wage be economically feasible? – Universal basic income would be feasible if it’s a subsistence wage. And in fact, some of the
places that have experimented with it have used a lot
of the public assistance that is out there and
basically said, this is going to be a substitute
for a lot of individual programmatic public assistance. We’re just going to make
sure that everybody has a subsistence level, you can
design it in a variety of ways, Henry, and Switzerland just had a, well, about 38%, I think,
of the Swiss voted in favor of this, which surprised
people because there was very little preparation for it. I don’t think there’s any way of avoiding a universal basic income and
by the way, this is something that Richard Nixon was in
favor of, as you remember. – Initially, yes.
– As you remember. – Yes. – So I think that it’s
something that we will see a lot of agreement on in the future. – Is a universal basic income a good idea, or should we strive
instead to try to find ways to make sure there are
jobs for everybody, perhaps even a government guaranteed job? – I think we need to do both. I think we can do a lot with
government guaranteed jobs, but as we were just talking
about, it’s not so much the number of jobs that
we need to worry about, it’s the quality of those jobs,
and I am very very concerned that as automation,
artificial intelligence, continue to make progress, quote unquote, we’re going to see a lot
of people thrown into what might be called the
personal service economy in which they’re doing
retail, restaurant, hotel, hospital, surface transportation,
childcare, elder care, there’ll be a lot of jobs,
but these jobs don’t pay much. And now Steve is right, there
could be some additional jobs in technician or technical
areas but Steve, you’re not talking about a large
number of people here. Sufficient to sop up all of
the people who will be… Facing lower wages, that’s really it. – To Steve, suppose and maybe
you don’t want to get into this kind of conjecture, but
I think it’s worth asking it, suppose it turns out that
there are a lot of jobs that get lost because
of automation, robotics and so forth, what are we
going to do in this society? Are you for a universal basic income, how ’bout a government guaranteed job, I mean, shouldn’t we be thinking at least about some of these things? – So it really is the issue
of our time, it really is. This is the big one, when so
many of the millions of jobs that exist today aren’t
gonna exist 10, 15 years ago, and you know, this is the digital age and it’s an incredibly
exciting thing, by the way, we shouldn’t be nervous about this. I mean, my God, for those
of you in your 20s, I mean, I’d give anything to be in my 20s today. You are gonna see the most
amazing transformations. This is where I think
Bob is so wrong saying middle class is worse off
today than 40, 50 years ago. I mean, how can you possibly say that? Look at all the things that
middle class people have today versus what people had, you
know, go to a middle class home, 40 or 50 years ago, and
see what they have today. I mean, the affluence of America
is really an amazing thing and they will be better
off 20, 30 years from now than they are today. – There’s one thing that
you’ve said that I completely agree with, when you said
that you would like to be 20 years old again, I
would too, I would too. I would like that as well.
– Let me ask you a question. – So when it comes to
this issue of universal basic income, you know,
I’m open minded to it. I mean, it would depend,
because people are gonna be so much richer 20, 30 years
ago than they are today so we will probably be
able to afford to have that so that everybody has
healthcare, everybody has a good education, everybody
has a minimal income that they can get by on, but
here is my worry about it, Bob, here’s, because we will
have enough money for that. The most important thing that
happiness is tied to work. There’s just no question
about it, and this idea of just giving people stuff,
I do worry that it has a negative work incentive
effect and people are not gonna work and the best thing,
work is where you get dignity and purpose in your life
and I worry that we’re gonna incentivize people not to
work rather than to have a fulfilling life. – But then who’s gonna provide
the jobs, is the question? – Well, that’s a good question. – If it were government, would
you feel distressed by that? – Nobody knows, I mean, if
I had told you 10 years ago, just to give you a sense of
how these technological changes are changing society, if I had
told everybody in this room 10, 12 years ago, the
United States was gonna have the biggest oil and gas boom
in the history of our country, there’s nobody who would
have believed that, even people in the energy
industry didn’t think it would happen and arguably
the most important invention of the last 10, 12 years in
terms of the American economy has been fracking and horizontal drilling. It’s completely, we went
from a country where people were worried about whether
we’re not gonna have enough oil and gas, now we’ve got it, in five years we’ll be
producing more of this stuff than any other country, my
point is, that technology came along, nobody predicted
it, nobody predicted the internet except Al Gore. (laughs) I mean, all these things, so we don’t know what the future holds, we
don’t, we just have to trust that we’ll get this right. – Steve, you raise an issue
that I want to get your very explicit read on
and that is, do you think climate change is a problem? – I think that if it is a problem, it’s not going to be solved
by these government edicts like cap and, you know,
this idiotic Paris Accord where China and India keep
polluting, polluting, polluting. It’s gonna be solved by technology, right? Technological change and that’s
why we have to get richer because if we get richer, we’ll be able to solve this problem. – Would a carbon tax be
helpful in terms of stimulating technological change?
– So that’s an interesting question, so maybe you
and I could sit down and maybe we could get Laura
Tyson and some of the other good economists in this
room and we might be able to come up with a deal
here, I’ve always thought there was a deal to be made. – But George Schulz and other
– No, I don’t like his– – You don’t like his plan. – No, you know, let’s
say we have a carbon tax and we eliminate the corporate
tax or something like that so we’re putting a smaller
tax on capital, right, and a higher tax on energy. I could live with that, I
mean, look, there’s a deal to be made here, for those
of you who really believe that climate change is the
greatest catastrophe ever to hit the earth, then
let’s make a deal, you know, let’s make a deal, but the
deals that are being put out by liberals, they say, we
want this big carbon tax, and by the way, we want
to spend all the money on wind energy and talk
about corporate welfare. We’re gonna give it to all
our friends who make wind and solar and things like
that, no, the deal has to be, we give you a carbon tax
and we get lower taxes on capital so we have more investment and when you all are ready
to sit down at the table, I do think there’s a deal
to be struck on that. You wanna shake on that one? – Yeah, I’m ready to shake
any time and you tell… The president that I’m ready. – I mean, I think the
president would be open to a deal, but not, I mean,
what Schulz wanted to do is basically combine
two bad ideas into one, which is just give people
a check, right, everybody would just have a check,
and you have a carbon tax and those are two bad ideas. – But Alaska has a deal
something like that, doesn’t it? – Yeah, they do, they have
what they call the dividend from all their energy
production and so they pass out, you know, if anybody wants to
get rich, you move to Alaska and you get, like, every
year, you get a $5000 check from the government from the royalties, but that’s a different– – But that’s a similar
principle, isn’t it? – No, well. I’m not so sure it is because
they’re actually getting a check for producing more things. You’re talking about– – No, no, no, but here’s a
check coming from the government that is related– – Well, I’m not necessarily
in favor of the dividend. I’m just saying it does,
that’s the way the people of Alaska have decided to
do, but they don’t have an income tax in Alaska, so they can’t cut their income tax, they
have so much money from oil that that’s what they’ve
decided to do with the money. – Okay, so I’m gonna ask each
of you very briefly to answer this question, which is,
so you’ve debated for many, many years, so can you name– – [Steve] Do we like each other, no. – Okay, I’m gonna ask
you two questions, first. What have you learned from the other and what do you admire about the other? Starting with Bob. – Okay, I have learned from you, Steve, that it is possible to stick to your guns in the face of evidence to the contrary. (audience laughs) – Ouch, ooh, ow. – No, no, I think there’s
something admirable about that consistency, I’ve also
learned from you that it is possible to be
loyal to somebody who… Is now president, who
shows absolutely no sign of intelligence, but,
but, but you, I think there’s some admirable
quality to actually giving him the benefit of the doubt
up to a limited point. I think you’ve gone beyond that limit, but more seriously, let me
just say more seriously. I have enjoyed debating
Steve for many years and even though we don’t
see eye to eye on anything, I like you. I don’t respect you, but I like you. (audience laughs) So… – Steve–
– On Donald Trump, I mean, I’ll just say one
thing about Donald Trump. You know, I think, I read this
in the Wall Street Journal today, I think it summarizes everything. Donald Trump is the worst president ever except if you look at his results and the results so far have been amazing. I mean, what’s happening
in this country right now, the economic revival is
beyond even what I thought and so the guy is producing results. The truth is, we don’t
have to have this debate week after week about whether
the tax cuts are gonna work, right, because the tax cuts are in effect. We’ll just have to see
what happens now, you know? I’m kind of tired of debating about it. Let’s see what happens, this
is an experiment, right, and you’re gonna buy me the
most expensive dinner here in Berkeley if we
continue to have 3% growth for the next three years,
which I think we are, and I’ll buy you– – I thought the prediction was 4%. – Well, I think we can
get, 3.5, 4% possibly, you know, I really do,
if we can continue to do the right things when it
comes to these tax policies. Now look, Robert Reich
is an honest liberal. – 3.5%, I will treat you to dinner. – Okay, well, but we’re
gonna get it this year. – But if we get under 3%,
you treat me to dinner. – Okay, you got it, and so look. I think Robert Reich is an honest liberal and I don’t think there
are enough of them. I think you genuinely, my
view of liberals in Washington is what they care about
is power, you know, that’s truly, now you can
say that’s cynical, I think they like power and that’s why they want the government controlling things. I think you have a genuine
regard for middle class Americans and I do too and we just see
the world in a different way but I do admire that about you. – Let me ask one final
question that I’d like you to give a comment on because
I think it’s a question that comes from the heart
of people here in Berkeley, which is that we’re concerned
about the future of democracy. We think that, many of us, that
Donald Trump has done things that really have reduced our… Our belief that the rule of
law is what’s going to prevail and so there’s a concern about that. There’s a concern that
in his race baiting, and I really don’t know
how else to describe it, I think that’s really
a factual description of what he’s done, that
he’s going to lead to a lot of people feeling hurt
and maybe engage in unrest and in fact, reasonably be
really upset about what’s going on in this country and
so that he’s really caused a lot of underrepresented
minorities and other certain groups to feel like he’s
really not their president. Now it is true that maybe white Americans in the states you talked about
think he is their president but is division a good idea
right now, is that something that conservatives, especially
Burkean conservatives, you’re a libertarian
conservative, but a Burkean conservative, would a
Burkean conservative think that’s a good idea at this time? Wouldn’t a Burkean
conservative worry about the integrity of government? – I don’t defend a lot of the
things that Donald Trump says and a lot of times I just roll
my eyes and I can’t believe he says some of the things
he says, but I will say this, that when liberals call
conservatives racist, homophobes, Islamophobes, you know, terms like that, every time that was
said about Donald Trump, his vote margin went up
because people are tired of it. I mean, let’s have a
debate about gay marriage. Let’s have the debate
about climate change. Let’s have the debate about
our policy with respect to Muslims, but to just basically
name call people and say, oh, you must be a racist if
you support, well, I mean, the other day I was on a
show and I said I support welfare reform and this
person said I’m a racist. Really, what is this? I’m a racist because I
support welfare reform. I think you all as left of
center people have to think about whether that’s
productive in the debate. – Well, let me just say,
I think it is unproductive to use labels, whatever
the labels are, including– – [Steve] But you already did
tonight, you said you thought Trump was a racist. – I said that. – No, no, Henry can be
blamed, but I can’t be blamed. – (laughs) Okay. – No, I try, seriously, I
don’t think it’s helpful to use labels, whether
it’s phrases, but even left and right and
liberal and conservative because it means less
and less and as I started to talk about before, I
think that’s Donald Trump. – Sorry about that, I’m a technophobe. – Actually, I’ll talk to him. – I’m almost done, all right, sorry. (audience laughs) – But I do think it is
important to investigate, keep our ears absolutely
open to different views. One thing I tell my students
all the time is that the only way really to learn is to talk with people who disagree with you.
– I would totally agree with that. – Because that is a way to test your views and test the facts and test your analyses and I worry very much, Steve, and this really I think goes
to the fundamental issue here. I worry that in this country
we’re not really talking to people who disagree with us, I mean. Berkeley is a cocoon and
Washington, conservative Washington is a cocoon. – Well, so are university
campuses cocoons too often. – Too often they are, absolutely,
and you know, years ago I lived in a cocoon called
Cambridge, Massachusetts and I decided to go 3000 miles to Berkeley and I didn’t realize at the
time that it was the same place. (audience laughs) Except the weather is much better here. But I am open to your ideas for how… People of different points of view. – Well, that’s why I
debate you for 20 years because I figure at the end of the day, you’re gonna come around
to my way of thinking. (audience laughs) – So I want to thank you both. I personally feel like I’ve
learned more about tariffs and about, I’m serious about tariffs, that I’ve learned more about the thinking that’s going on with respect
to the Trump administration and tariffs, I now have
questions about what China’s reaction is gonna be to a 30% tariff and I think those are
questions that should be looked at very, very carefully. I’ve learned about what the
rationale is for the tax cut and some of the issues
that surround that and then the future of jobs, I
thought we had a really good discussion about the concerns
that many people have that jobs might not be as
prevalent in the future and what do we do about that and some very interesting ideas about how to think about that. I really want to thank
Stephen Moore for coming this distance and being with
us and I think it was an incredibly productive conversation. – Thank you all for being
so kind and generous with your time, thank you. (audience applauds) (gentle music)