Comparing the presidential candidates’ approaches to the economy

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JUDY WOODRUFF: Today’s U.S. jobs report was largely seen as a solid one, and in many respects better than economists had predicted.

For the year so far, the economy is gaining about 185,000 jobs a month. But for many Americans who have seen slow wage growth for years, the recovery doesn’t yet feel like one, and both presidential nominees are speaking to that.

Donald Trump has proposed tax cuts across the board, including for the wealthy, as well as new tariffs and escalating battles over trade. Trump will be laying out more about his proposals on Monday, but he told voters in Ashburn, Virginia, this week that his ideas would boost the economy.

DONALD TRUMP (R), Presidential Nominee: This is the third straight quarter that the economy has grown under 2 percent and is the single weakest, weakest of any economic expansion in more than 70 years.

Household incomes are more than $4,000 lower than their levels in the year 2000. Think of it, household incomes — you’re now making $4,000 less now than you did 16, 17 years ago. Another one that’s very common and out there, people, many people in this room, but people are making, in terms of real wages, less money today than they made 18 years ago. And they’re working two jobs in many cases.

JUDY WOODRUFF: For her part, Hillary Clinton has also tried to address economic anxiety and persistent concerns over stagnation. Her plan is quite different. She’s been making the case at her rallies for an agenda that includes tax hikes on the wealthiest, a higher minimum wage nationwide, and new tuition aid in higher education.

In Las Vegas yesterday, she joined Senator Harry Reid and called for a big boost in spending on infrastructure.

HILLARY CLINTON (D), Presidential Nominee: We are going to create more good jobs with rising incomes. We’re going to have the biggest investment in new jobs that we have had since World War II.

Now, how are we going to do that? Well, number one, we are going to do exactly what Harry said. We are going to have an investment in infrastructure, our roads, our bridges, our tunnels, our ports, our airports.

(CHEERING AND APPLAUSE)

HILLARY CLINTON: For every billion dollars, we get 47,500 jobs. And they are mostly good union jobs with a good middle-class income.

(CHEERING AND APPLAUSE)

JUDY WOODRUFF: Well, now let’s look deeper into what the candidates are proposing, as part of our coverage looking more closely at the issues.

Jared Bernstein is an informal adviser to the Clinton campaign. He was a former economic adviser to Vice President Biden. He’s now at the Center on Budget and Policy Priorities. Stephen Moore is a senior economic adviser to the Trump campaign, and a fellow at the Heritage Foundation. He’s a former member of the editorial board of The Wall Street Journal.

And we welcome both of you back to the program.

Stephen Moore, let me start with you.

I want to get from both of you your quick take on today’s jobs report. On the surface, most of the reaction, Stephen Moore, has been, this is positive, 255,000 jobs in the month of July, but Donald Trump painting a dark picture here. What’s your take?

STEPHEN MOORE, Senior Economic Advisor, Trump Campaign: No, I think he’s painting a realistic picture.

If you look at what has happened to incomes, the Census Bureau just came out with a report recently shows that the median family in America, the part of the middle class, has actually lost income during this recovery.

We haven’t ever seen a recovery, at least since the Great Depression, when, during a recovery, people lost income. By the way, if you’re losing income, you are in a personal recession, so a lot of people don’t think there has been much of a recovery at all.

The other statistic that came out in recent days was this 1 percent growth rate for the last six months. That’s a dreadful number. And, look, the other thing is just ask the American people how they feel about the economy. Are you confident about it? How are your own personal finances?

And all of those statistics show people are extremely concerned and they’re financially stressed out.

JUDY WOODRUFF: Well, let me get your take on the jobs report, and if you want to respond to what he just said, Jared Bernstein.

JARED BERNSTEIN, Economic Advisor, Clinton Campaign: It was a positive jobs report, another in a series of those reports.

The unemployment rate, at 4.9 percent, is low. And while Stephen was talking about numbers that go up to 2014 — that’s the most recent Census Bureau number — if you actually look more recently, you do find wages growing, and not just growing at the middle — and I’m talking about in real terms, adjusted for inflation — but actually growing even more quickly at the bottom.

By the way, one of the reasons is because a lot of states have increased their minimum wages. So, Steve’s data is a little bit out of date there.

However, if you do take the long-term picture — and I think Donald Trump went back to the year 2000 — you will definitely find structural problems in the economy that persisted. And I put them under the rubric of inequality. That is, GDP has grown, but not enough of that growth has reached the middle class. That’s a message, by the way, that you will hear from both candidates.

STEPHEN MOORE: And, by the way, there has been — the biggest increase in inequality has actually been in the last seven years, which is ironic, because Donald Trump has made income inequality a big issue.

JARED BERNSTEIN: That’s factually incorrect.

STEPHEN MOORE: Yes, if you look at what the Gini coefficient, which I don’t want to get into, but it looks at what happens with inequality, the top 1 percent and everybody else. That has actually gone up.

(CROSSTALK)

JARED BERNSTEIN: Inequality’s actually been stable…

(CROSSTALK)

JARED BERNSTEIN: … since 2007.

(CROSSTALK)

JUDY WOODRUFF: OK.

(CROSSTALK)

STEPHEN MOORE: The top 10 percent have done very well, the 90 percent not much.

JARED BERNSTEIN: That, we agree on.

JUDY WOODRUFF: OK. You do agree.

STEPHEN MOORE: Even Bernie Sanders says that.

(CROSSTALK)

JARED BERNSTEIN: If you want to talk about the job market, the job market has actually generated real wage gains in recent months, really over the past few quarters. Now, that’s not enough to make up for…

(CROSSTALK)

JUDY WOODRUFF: Let me ask you both. I want to get to the proposals by these two candidates.

And, Stephen Moore, to you first on jobs. Hillary Clinton is talking about a major jobs program, creating jobs, mainly, we heard her say, through infrastructure, 10.4 million jobs, she says, we’re going to see. What’s wrong with that plan?

STEPHEN MOORE: You mean Hillary’s plan?

JUDY WOODRUFF: Yes.

STEPHEN MOORE: OK.

So, look, I think it’s very easy. It sounds very familiar. She’s talking about raising the minimum wage, more shovel-ready projects for infrastructure and more taxes increased on the rich.

Gee, where have we heard that before? It’s exactly what Obama came in with seven-and-a-half years ago. And we have seen the results. It hasn’t worked. Jared was there. He was part of the stimulus plan, one of the biggest wastes of money we have ever had in this country. And all we have got is $8 trillion of debt to show for it.

JUDY WOODRUFF: A waste of money?

JARED BERNSTEIN: No, I mean, we could definitely re-debate the stimulus plan. I think it’s widely agreed upon by economists of all stripes that really…

STEPHEN MOORE: Not any conservative economists.

JUDY WOODRUFF: Well, let’s let him…

JARED BERNSTEIN: Yes, that that was instrumental in getting us to recovery.

But I think that when it comes to the kind of agenda that Hillary Clinton is talking about, it’s actually structured to do precisely what needs to be done in the context of our conversation, which is help the middle class reconnect to the growing economy.

We have GDP growth. I agree that it’s too slow, but we’re doing actually better than most other advanced economies. And in order to make that growth reach the middle class, we’re going to have to make the kinds of investments she’s talking about, whether it’s college, or preschool, raising the minimum wage, green investment infrastructure.

These are the connective tissue kinds of ideas that will help. What won’t help — and here I want to engage Steve on this — is a tax cut that’s heavily tilted towards the wealthy.

What that will do is further exacerbate the inequality problem and take away the revenues we need to make the investments that have to be forthcoming.

JUDY WOODRUFF: And let’s get to that.

What is Donald Trump’s answer for jobs, for making sure more people have good-paying jobs?

STEPHEN MOORE: Well, I think the heart of the plan is this business tax cut.

And this will be taking America from having the highest business tax rate in the world to one of the lowest. And I think almost everyone agrees we should do this, except maybe Barack Obama and Hillary Clinton.

You bring those businesses taxes — and, by the way, not just big businesses, but also small businesses from the career corner grocer to the start-up in Silicon Valley.

(CROSSTALK)

JUDY WOODRUFF: But all the way up the income scale, just to be…

(CROSSTALK)

STEPHEN MOORE: No, we’re talking businesses.

JUDY WOODRUFF: OK.

STEPHEN MOORE: For businesses, they’re going to pay — look, where do jobs come from? They come from healthy businesses.

Without healthy businesses, you’re not going to get jobs. And the evidence is very clear that when businesses invest more — and if you look, Judy, in the last year, this is maybe the killer statistic for the economy — businesses are not investing. It’s negative for the last year. When they invest more, wages go up. That’s the key.

(CROSSTALK)

JUDY WOODRUFF: Do you want to answer that specific point?

JARED BERNSTEIN: When I look at the plan that Steve just described, to me, it solves the following problem.

America — American corporations, American multinationals aren’t rich enough. The corporate sector isn’t doing well enough. That’s the problem these guys seem to be trying to solve. And, by the way, the team that was announced today is all guys.

In fact…

JUDY WOODRUFF: You mean the Trump economic team.

JARED BERNSTEIN: The Trump economic team.

In fact, none of that helps the middle class. You can go cut corporate taxes all day, but what we have seen over the past 10 years is corporate profitability has been one sector of the economy that has done extremely well, while, as I said earlier, that growth isn’t reaching the middle class.

So, how you would then conclude that what we need to do is actually be even kinder to our corporations and cut their taxes further, it seems to me to be completely upside-down.

(CROSSTALK)

JUDY WOODRUFF: How do you answer that?

STEPHEN MOORE: So, this is a central distinction between those on the left and the right.

It is true corporations are profitable. They have become lean and efficient. It’s amazing corporations can make money in this environment, but they do. The problem has been — and I think most economists agree — they’re sitting on their balance sheets with like $2 trillion.

What’s not happening to grow the economy is they’re not re-injecting that money into investment. They’re not investing in plant, in equipment, in computers. Those are the kinds of things you need if you want jobs.

And you ask them why they aren’t investing. And they say two things. The taxes are too high and the regulations are strangling themselves. We have seen businesses move out of the United States. You have reported on this, Burger King, Medtronic, Johnson Controls, Walgreens, major companies, and they say they’re leaving because taxes are too high.

JUDY WOODRUFF: Would you like to come back on that?

JARED BERNSTEIN: I agree with some of that. I very much agree with this point that we’re not seeing the kind of business investment record that we should.

But it has nothing to do with taxes and regulations. And, in fact, the cost of borrowing is the lowest it’s been. It’s extremely low.

STEPHEN MOORE: But try getting a loan.

JARED BERNSTEIN: I’m talking about the after-tax costs.

So, it can’t possibly be that somehow goosing this process by lowering taxes even further — so what we need to do, if the private sector is failing to invest the way we need them to, the public sector must pick up the slack.

And that’s why this infrastructure idea that you hear Hillary Clinton talking about, it’s part of her 100-day plan, hit the ground running with a deep dive into infrastructure investment. That will solve a lot of what’s ailing us, in my view.

JUDY WOODRUFF: All right, there’s much more to talk about. We’re going to be coming back to this time and again over the course of this election. But you have gotten us started tonight. And we thank you very much.

STEPHEN MOORE: Thank you.

JUDY WOODRUFF: Stephen Moore, Jared Bernstein, thank you.

JARED BERNSTEIN: Thank you.

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