>> from our studios in new york city, this is charlie rose. >> good evening, i am anthony mason, filling in for charlie rose. donald trump's path to the white house was energized by a andlist campaign message, vowed to take action through a series of initiatives, lowering tax rates and connecting a major infrastructure spending plan. donald trump already pulled the united states back from international trade. joining me now is a columnist for bloomberg view.

and catherine rampal for the "washington post." welcome to you. >> joe, let me start with you. recently, it said have parroted a miss -- i inherited a mess economically. did he? >> no. his predecessor inherited a mess. there was a recession and unemployment that was at like 8%. he gave to mr. trump and unemployment rate below 5%. what he ise and implying is a lot of middle-class jobs have been hollowed out and there is a lot of pain in the country, which contributed to the election. i would say his solutions will will not help that, but will

exacerbate the problem. >> i think joe just nailed it. the wave of discontent that carried trump to the election, middle-class wages are down. the jobs we have do not pay well enough. what sort of policies would improve the pay for low-wage service jobs, for example? the most efficient way to do that is raising the minimum wage, which is not on the table. infrastructure spending would be great if we just had a trillion dollars to reinvest to talk about that. talk about that have gotten a lot of quieter has gotten a lot quieter since the election days. there is not enough money going to the people and that is wages. you have to actually work on the wages. >> and wages have not moved.

stagnation for the last couple of decades. it is not an obama phenomenon. i think wages, median household income ceased to grow around the late 90's. this has been an issue for a long time. greater wage gain going to the top 1%. there are debates about why this is happening. there is technological change, a lot of other things. i can emphatically say it is not because we have not had enough trade wars. it is not because we have too much regulation that prevents us from dumping pollution into our lakes. the kind of things, or immigrants for that matter, the things that have been scapegoated throughout the campaign. >> the president has talked

about the possibility of three or 4% growth. what he has put on the table is what you can achieve. we have not seen that growth in a decade. .> it is pretty implausible to go back to what i was saying before, catherine mentioned immigration and trade. wall street is actually pretty excited right now. the market has been going up because they are thinking about deregulation and lower taxes, maybe repatriating some of the cash that is overseas. if you really start kicking out millions of immigrants and , with mexico,wars you will wreck the economy. you will wreck it. it is too interconnected. forget about china, nafta has a supply chain that that runs through canada down to mexico.

basically, if you put a barrier up, you are increasing the price of a ford. >> at the same time, you look at the surveys since he has been elected and the general mood among small businesses is soaring. >> and from the stock market, obviously a lot of optimism. that does not turn into wage growth, demand will falter. if you have a trade war, that is going to hurt the economy. if you start deporting millions of people, that is really going to hurt the country. they are working, creating productivity. a lot of these policies do not make sense. spirits change. a positive step, the administration would argue.

>> you wrote a very nice column, saying, they are basing their productions on growth rates like three or 4% which are hard to fathom how you get there. >> when you look at projections from the nonpartisan offices, from private forecasters, they are much lower than the numbers that were forecasted by fiat for the white house. >> based on what he promised, what does the president have to deliver? >> he has to deliver jobs. that brings up another thing, how do you do this? his idea is to jawbone countries -- companies that are planning on closing a factory or laying off people to keep those people employed. 400, 500, 600. >> the argument is you have to do that one time. >> it is not going to stop the

problem of manufacturing. you can have a leading manufacturer and u.s. without that many workers because of technology. private equity firm takes over a company and they have cost-cutting measures and they fire a thousand people and i do not hear him say anything about that. he needs to find a way to create jobs that is broader and smarter then going to one company at a time via twitter. >> some of the policies that have been discussed, they do make sense. creating incentive for companies to bring back cash they have parked overseas. if you can also create incentives for them to invested in the united states. those do make sense. very hard to do when you are going one company at a time.

>> it is also a really strange conception of a free market. the president is supposed to be in support of a free market. how free is the market when you are ordering companies where to .ocate and what to sell this jawboning does not seem to be even consistent with conservative principles let alone these other types of goals we are talking about. why would they invest here in the first place if they might want to change their plans and go overseas or whatever or reallocate their resources. >> henry mentioned infrastructure spending, which the president -- which is what the president said during the campaign a lot. the democrats tried that, the

republicans resisted when obama was in the white house. do think there will be a will to get that done? >> the democrats have proposed a plan that is based on direct spending. the government spends money, they figure out then where to build bridges. the trump plan is based on tax credit, it would be tax credits for revenue-generating projects that private firms built. there are very few details at this point. what his team said was if you want to build a toll bridge, we will give you a big tax credit to do that. that does not incentivize repairs maintenance and crumbling airports or roads. it encourages a lot of investment that may not be in the public interest. that is what he seems interested in. it looks like his republican

allies are interested in. >> it is hard to tell at this point where his agenda is in the congress. >> it really has not advanced, for all the sound and theory, he has not proposed anything beyond kick out immigrants. all of these plans he talks obamacare, all, ,orts of things, taxes .eregulation until there is something concrete, congress cannot do anything. the trump administration has been too busy putting out daily fires. >> creating them. >> right. creating fires and putting the

hose on them. i would say they are nowhere. is that too harsh? >> no. but i do think congress is doing i think congress is working behind the scenes. they are discussing obamacare and realizing that people like it a fair bit more. there are discussions. >> obamacare is another thing to think about when it comes to the economy. it absolutely affects individuals and affects their ability to spend on other things. it affects a big portion of the economy, which is insurance companies have pharmaceutical -- insurance companies, pharmaceutical companies, health care companies. they are all nervous about how this is going to play out. >> the white house has shown indication that if the pr

feedback on something is negative, they are not necessarily going to stick with it. even if it comes from a republican congress. >> yes. trump likes to do things that are popular. at least to the audience to whom he is speaking to at the moment. he has said a lot of controversial things about the affordable care act. he said that no one will lose their insurance or something like that, if you like your insurance keep it. these were like some of the not so smart promises obama made. it is very hard for him to be able to keep all of these contradictory promises. especially if he does not want to upset many members of his base. there are a lot of white working-class voters who get -- who benefit from insurance on

the exchanges. the tax benefit they get from those. those people are looking to their standardbearer to protect them and bring down the cost of insurance. he is also talked about that. he said insurance and health care will get cheaper. that is an impossible thing to process. we have the lowest growth in health spending costs in 60 years. it is not growing as fast and people are still upset. you cannot reverse that trend. >> how long do think the business community will stay with trump? we had this interesting kind of mood swing where there was a panic on wall street with the uncertainty that would surround a trump administration. then when he took office, the mood changed completely. because of the promise of tax reform and deregulation. if there is a sustained period

of turmoil, what do you think the attitude of wall street will be? >> i think wall street will stay with him as long as the stock market is up. if is tweeting is not taken seriously, and wall street is starting to tune him out. long fine.will go a i do not think wall street will care, i think the business community will take about one year or two if we have that long. if we do not see any of these policy changes come through, than folks might start to say hey. ♪

>> i want to talk with his -- i want to talk about the general state of the middle class. i do not think either party has been honest with american workers about where things are. the amount of automation is cutting into jobs and job growth. do you think government has leveled with the american workers about where the state of the economy as in terms of jobs? >> i do think people have a better understanding of it than their government gives them credit for. obama tried a series of programs

designed to get people into jobs that were not old-fashioned manufacturing jobs. that did not really work. trump saying i am going to make america great. by bringing back manufacturing jobs. people know that is not true. the core dilemma for government is how do you re-create middle-class jobs? the people who lost their jobs in auto factories, or in other --eres of life, where people where people have lost their jobs, they do not know how to do it. they are waiting for someone to show them how to find a way in the 21st century. you have low-paying service jobs and high-end white-collar jobs

and this middle range is really what is missing. >> the key issue with the economy, last 40 years, our tax policy and business ethos has moved everything in the direction of shareholders and owners in the company's job is to create wealth for their owners. 50 years ago it was not that way. there is a better capitalism model. companies are designed to create value for all of their stakeholders, including people who work there. if you go back to why manufacturing jobs were good, folks decided to pay voluntarily workers more than they had to. unions provided this for a long time. we need to change the ease those os, andease -- etha that will accelerate the

economy. suddenly, you have more spending power. >> there are other tools that have bipartisan support. expanding the earned income tax credit. it supplements your wages. it is very popular on both left and right. exists but it could be made much more generous. made available to a lot more people, including single able-bodied people. there are tools that are available to put more money in the pockets of regular americans. eitherng to bring back certain kinds of industries that have fallen by the wayside or to improve the pay in those industries, coal mining is another great example where those jobs have disappeared largely because of technological

changes because fracking has made natural gas much cheaper. president trump has supported fracking but he has also told call minors that their jobs are coming back -- coal miners that their jobs are coming back. telling those workers their jobs are coming back is not up practical -- not a practical game plan for helping these kinds of workers. you need to be thinking about improving the quality of the jobs where they exist and improving investments in human capital for the kinds of people who may use to go into the jobs disappearing. other kinds of jobs that are not necessarily high skilled but require some post secondary training, not necessarily a four-year degree. in health care, there are a lot of jobs in health care that do

require post high school education but not necessarily a bachelors degree. >> are we really talking about rebuilding the middle class or blocking its decline? concept of making america great again is this idea of going back to the middle-class dream. which seems to be slipping away from people. so much of the dream was created in a post-world war ii environment when we ruled the world. that has clearly changed to a point that is almost irreparable. >> we were the only ones who could manufacture. >> are we being realistic with ourselves with what we are aiming for?

>> we are talking about sharing more of the incredible wealth this country creates with the people who helped to create it. not just the owners of the companies, but the folks who work for them and create the value. you can compel it in a bunch of different ways. .e could raise the minimum wage it would be nice if we persuaded folks that it would be good if they could share more of the wealth with the people who created it. >> well -- >> when you give somebody two dollars more per hour who was making $12 an hour, they will spend those two dollars. if they are working at walmart, they will probably spend them at walmart. the jobs argument does not make sense. you have to apply it equally. you cannot say, you can pay your workers three dollars an hour and you can see yours $20 an

hour. >> there are a lot of firms in silicon valley whose entire business model is designed around skirting those requirements by hiring independent contractors. there are a lot of other applications here. i do not think you can wage minimum wage indefinitely. there are ceilings to that. in any case, if you focus on providing more benefits for traditional employees, you still have the problems of the alternative work arrangements. there are a lot of complications in the 21st century economy for how do you improve the lives of

workers when their relationship with their boss and the legal , half of those have changed. >> americans like to buy things as cheaply as possible. that really does play a role here. you will find countries where they are willing to make the trade-off. i will pay more for something and in return, this company does -- have to lay anybody else lay anybody off. in the u.s., we do not think like that. if we can get something that is homemade and inexpensive from china at walmart, we will do it. even if there is an american product right there next to it for a buck more. the fact that that is the american mentality is another reason it is hard to say, let's

pay people $20 an hour. change theyou mentality? when you look at american psychology, bringing the price down is what their customer wants, that is taking money out of the pocket of an american worker. >> i do not think you will change that mentality. rather than think about how do we bring back jobs in the old-fashioned industries, we need to be thinking more about how do we create jobs that do not require a four-year college and how do you create an entirely new industry? the solar industry is growing like crazy and it has become a pretty decent source of jobs at the moment. that is one example of a new industry that can create jobs even as other industries are fading. >> i think it is starting to

change. starbucks has done that. there are companies to are -- that are saying, we are profitable enough. we will invest more in our employees. you are seeing training programs that are not being handled by external companies. think werting and i are starting to see companies rewarded reputation only -- reputationally. >> we are still pulling out of the postrecession mentality, a bunker mentality that we have to be prepared for the worst. >> it is not just about maximizing current profit. it is about earning enough that shareholders are getting their due, and then reinvesting the rest in the business. >> there is also some benefit do -- benefit for paying workers

more money. they are less likely to leave and you have to deal with less turnover costs. gotten a market has lot tighter. there are fewer workers to go around. to are you going to hold on workers, how will you attract workers? the stronger economy is one way to help workers. not all of the gains will go to the workers. economy in ander of itself is good for workers both in terms of getting jobs and getting higher pay. >> we are only a month into the trump administration. four years from now, where do you think we will be economically? [laughter] four years from now -- i am

more worried about two months from now. someso fearful, not only of his economic policies might be misguided, but you are worried he might do something that is erratic that will set -- earld on its year that could cause the stock market and the economy to tank. >> i have similar worries. it seems likely we will have a recession sometime in the next four years. not because recessions die of old age, but because we have had a longer stretch of job growth. it seems unlikely we will not have any shocks over the next four years and i'm concerned about what tools we have available to handle the potential downturn. not guaranteed, but seems like it will come. the fed has been handicapped by

dodd-frank in terms of how it can address another financial crisis. we may have a major stimulus in the form of tax cuts and infrastructure today. the keg if left in there is a recession. i am just saying i am concerned about -- even if you take the erratic trump element out of it, things can go awry just because it is the business cycle. i am worried about what tools will be available and what willingness there will be to use those tools. joe and catherine's worries. the discontent that has caused such a sweeping political change will only grow. there is a lot to worry about. nice to see the stock market

going up. nice to see we are a month in and there have not been too many shocks and surprises. hopefully, we will continue they by day. voicesness journalists, of doom. thanks for being with us. we will be right back with the band lake street dive. ♪

anthony: good evening. i'm anthony mason filling in for charlie rose. lake street dive is here. "rolling stone rights as lake up -- dive may serve their latest album finds the band reinventing themselves once again, this time with disco and rock 'n roll influences. here is them performing rent to love. ♪

when we were having a good time i got a little sentimental a rental of your love was all that you gave up but i wanted it all wanted it all when we were doing a slow climb

the peak was a foregone conclusion ou just broke my heart i only got one heart but i wanted it all wanted it all when we were given a new chance overzealous e jealous of your old girl i wanted to be your whole world i wanted it all ♪wanted it all

anthony: i am to welcome lake street five to the table for the first time. so great to see you. let's talk about how you all came together, you have been together for a wild. things took off -- what? about five years ago? your roots go back to the new england conservatory, when was at 2004? >> that sounds about right. it is going to be about 13 years that we are a band. we met at school. these two, the mike's they were already friends. it was love at first site i feel like. at least mike love him his first as he saw him. >> where you looking to form a

band? >> i was. i wanted to form a jazz band . we were all studying jazz at the time. it felt more natural. there was also this desire to and toongs with lyrics also be sort of inventive and experimental within the jazz structure. the somewhat unique plusumentation back then, the voice, it was much more akin to a different ensemble. there were these bass drums and horns. this is kind of our answer to melodic instrument.

it is very heady and wonderful. we went from esoteric sort of just trash to realizing we did not mind songs that sounded good. evolve? how did that >> there was a turning point. we were in a town & country minivan in the middle of the night. we driving through iowa, it was back in the day where we would be burning cds and making playlists.

we were trying to pass the time. we were passing our computers around and not knowing what people would be playing. then we would burn that cd and throw it in the cd player. so, we would listen to it and somebody had put the same song on the playlist. it was not jazz, we were not listening to jazz, it was paul simon, the beatles tracks maybe , even a santana tune. i don't remember what we were listening to. maybe we should do this stuff, it excites us so much. >> you have this very interesting turning point, you are out of massachusetts in 2000 12, this was kind of for funds that you recorded i want you back? >> we made this ep called fun machine that was all cover songs. we had a friend at videos of us performing and that was how we promoted it. we were just trying it, there

was no grand plan. we did not really choose to do that that afternoon, i think we did several takes of "rich girl" and maybe a couple of "clear space," and at the very end -- it's so as the story goes. we were going to do a version of i want you back. youtube.you put it on what happened? >> nothing remarkable happened at first and then maybe five months later, i don't know if there was a reddit thread or maybe even a kevin bacon sweet. who knows what started at? yeah, it went viral. i has you to myself

i didn't want you around those pretty faces always make you stand down in a crowd but someone takes you from the bunch one glance was all it took now it's much too late for me to take a second look oh, oh, baby ive me one more chance won't you please let me back in your heart blind to leti was you go ow that i see you in his arms, yeah trying to live without you, love is one long sleepless night let me show you, boy

that i know wrong from right and every street i walk on i leave tear stains on the ground boy wing the i didn't even want around oh, baby give me one more chance won't you please let me back in your heart, now oh, darling, i was blind to let you go you hat i see in his arms ♪ how you isn't it funny can work so hard for so long, and all of a sudden, it's one little thing like that that just

changes everything? and it kind of did change everything, didn't? >> yeah. something about the entertainment industry is there is no recipe for guaranteed success. you just have to keep making music you believe in and put it out there, and hopefully, if you just keep doing a good job, one thing well hit. that ended up being the thing for us. it is not something you can replicate. we just continue to do that same thing and try to make music with integrity and creativity. when people hear about it and sometimes they don't. just keep doing it. anthony: t byrne burnett approached you to appear at a concert in new york. he put you in that ensemble that he put together. what does that do?

>> kind of led to side pony in a roundabout way. >> it was a super fun night, so that was the first thing it did. i think what we did not realize when we were doing it and playing -- because we had so many distractions. there were all kinds of, you in theig leagues audience that will not aware of at the time. press and media folks and record label types and things like this. you know, thanks goodness we did not know. elvis costello was quite enough, thank you. but then to realize there were all these things that would come itm it later like writeups , would've gone from overwhelming to jump out of skin

kind of terror. anthony: what are you thinking when something like that happens and people start calling you and asking you to be on shows, what do you think at that point? i don't know. you take elocution lessons and hope for the best? them is what you do. you just start doing it. >> you know how hard it is to work to get an opportunity and sometimes the opportunity comes from the place you least expect it. when you get that moment, what is it you think? >> i think when we have talked about it, we would get nervous at first, but then we would realize -- we would look back over our history and, like you said, it was four or five years ago when this stuff really started to happen for us.

we said to ourselves we are scared, but we have been doing this for way longer and we know how we work together. we know our dynamic. we know how we make music. this is just going to be an extension of this. it's kind of like we were asked to do this, so obviously, something about what we have been doing is deserving of that, so we trust ourselves. that took quite a while to get butortable with that trust, that's how you i think have to start doing it. it's kind of a jump and a trust all with your best friends and then see what happens. ♪

anthony: the first time we talked a couple of years ago you said you were kind of glad that you waited a while before success. you thought you were not ready for it. >> absolutely. what mike was saying, we got to this point where everybody was asking us the same question to be a new band. we were breaking in with all the hype, we are not new, we have been doing this. we welcome you to it now. it's like we really took the tortoise approach, and that's very grounding because you can trust yourself. it's so easy when you start to get success to suddenly start to wonder what it is about what you are doing that they like so that you can turn that up, you can amplify that, but i think we

were able to hold off, and we were able to keep those insecurities at bay because we had spent so long honing in on what we did together as a band. anthony: right. it takes a wild for a band usually to figure out who it is, what it is, what it is all .bout, find a sound that is you did you feel confident in what that was when you were there finally? think we are constantly still searching for that. we know certain things that we do well together, and we try to, like, use those to their greatest advantage, but also, like, the beatles being our model for almost everything, like, you look at their records quickhey put out in very succession, and they are also

different from each other, and yet, they maintain this identity at the core that is the beatles. that is something we are always striving to do with each new record, continue to experiment and, like, reach out for places that we have not been before. anthony: things change, don't they? label andou have a bigger audiences and everything is on the line and there is the lady a of growth, both artistically and commercially, so there are a whole new set of pressures that come once that happens. >> i feel like we have a lot of confidence in each other. that is also a really important thing because nobody is the leader of the band. nobody has to pull anybody up to them or nobody has to pull any extra weight, and i think that is a very comfortable thing. for me being the front person, it is actually a really comfortable and great spot because i don't feel like -- i

mean, i don't really actually feel that way. i feel like i'm just one piece of the puzzle, and i know my three bandmates have a lot of confidence in what i do and i have a lot of confidence in what the three of them do. artistically, the way they write songs, the way they play, so i think that is helpful. anyone's individual insecurities doesn't overtake you. like we are in this together. like, if i fail, we all fail. if i succeed, we all succeed. no one is going anywhere. we will make this work. about once people start to find you, wondering what it is they like about you or see in you, and then there becomes the challenge of challenging yourself and not just pleasing the audience. you with your new album kind of changed your sound a little bit.

what were you pushing for with that? >> we were pushing for a change. we were pushing for experimentation. anthony: is that something you want to -- i think every artist wants to keep growing. .ou want to challenge yourself >> again, the beatles. anthony: that's a pretty high bar, though. >> i think we are always challenging ourselves and also following the muse.

whatever you're listening to, whatever is inspiring to you at the time. sometimes you go on a trip and hear a type of music you never heard before and maybe that will find its way into your music or whatever is going on in your personal life, whatever is going on in the world, those things. whatever is making you really feel something in your heart, like, that is going to be the best thing to put into your music. theony: favorite moment of last five years, of all of this craziness? >> wowzers. >> you couldn't have given us this question? moment: the tension me -- the "pinch me" moment. i know you have had them. >> we got to meet president obama and vice president biden in the oval office.

anthony: thank you. we leave you with another song dive.om "lake street ." e's "when you were mine ♪ mine hen you are gave you all of my money you done me wrong it was like a dream ou were so strange you didn't have the decency to change the sheets when you were mine i thought you were all mine

maybe that's the reason that it hurt me so i know that you're going with another girl don't care i love you, baby that's no lie i love you more than i did when you were mine ♪ ♪ mine you were on my bestnd of friend i didn't care the kind to make a fuss when he was there sleeping in between the two of

us i know that you're going with another girl i don't care i love you baby that's no lie i love you more than i did when you were mine ♪ ♪ ♪ when you were mine you were all i ever wanted to do time t my following you whenever he's with you i know that you're going with another

girl don't care i love you, baby hat's no lie i love you more than i did when you were mine when you were mine i love you, baby eah i love you, baby yeah, i love you more than i did hen you were mine i love you more than i did when you were mine

♪ >> fairly soon, the fed minutes show rate hikes are coming. warnings the bond market is underestimating a march move. >> south africa budget target the wealthy to plug a budget shortfall. we will hear from the prime minister. ceo alan joyce says he is optimistic about china. >> for iran, money talks loude