help you follow all 12 cases we have a companion guide. landmark cases, volume two. the book costs eight dollars 90 five cents plus shipping and handling. rg/landmarkcases. >> the conversation on the effect the tax cuts have on the economic outlook. joining us on "washington journal." this is 30 minutes. " continues. host: mark zandi is back with us . he served at chief economist at moody's analytics and is helpful in answering our questions about the state of economy. credit the end of last year, you wrote a column for the philadelphia inquirer that begin by saying this --

guest: i think the correction in the stock market, at least so a typical garden-variety correction in the equity markets. we see that once or twice a year. longer thane bit normal. the last correction was over two years ago but this feels very typical to me. decline, the price prices are just back to where they were at the end of last year and beginning of this so no big deal, at least so far. host: what are your criteria for good economic times? guest: i think what matters most to most people's jobs. and recruiting lots of jobs, created a couple of million last year, about the same as the year before and the year before that. the american economy has been a job machine since the economic recovery began almost nine years

ago. when you are creating 2 million jobs per year, that is more of a growth of the number of people looking for work so unemployment and underemployment continue to decline for stub both are now pretty low by historical standards. the unemployment rate is just over 4%. it will go lower because we will get a lot of growth given the deficit finance, tax cuts and a temporary boost to growth and unemployment will go into the 3's. for most people it's about jobs and recruiting lots of jobs. host: is there such a thing as too much job creation? thet: as economists say, economy could overheat. unemployment and underemployment could fall to such low levels that we start to see inflationary pressures develop. that means higher interest rates. to a large extent, the recent correction in the stock market

is a result of concerns investors are now having about the economy that will overheat as they try to digest the higher interest rates. that means you could get temporarily strong growth and i would expect that this year but ultimately, the higher interest rates will do damage and you get a weaker economy, a more up-and-down economy. that's probably a reasonable scenario. for now, we are on the up at there is a downside as we make art and way into the next decade. host: -- as we make our way into the next decade. host: the phone lines are open. do you believe this is donald trump's economy? is this still benefiting from obama era policies? guest: it's a good question.

i think most of the last year was still the obama economy. it was not until the end of last we passed the tax cuts. other majort any economic policy put in place in 2017 so i consider 2017 to be mostly the result of obama's policies and economy but now this is definitely the trump economy. we've got tax legislation. he's making changes on trade and immigration and regulation. going forward, this is very much a trump economy. you make a good point. there is a lot of moving parts here, a lot of forces that affect our economy of economic hollis he and the president of the united states is only a part of that. presidents generally don't matter a whole a lot in terms of how the economy is performing except, arguably, in terms of crisis. crisis,the financial

president obama's policies were very important to get the economy out of that recession. normal times, economic policy matters but it's not the top of the list factor that driving with going on. host: in the past five days, we've got to budgetary documents out, the bipartisan deal that was signed last week and we've got the president's fiscal 2019 budget request that got to congress yesterday. to those documents peyton realistic economic visions of the coming years? documents paint realistic economic visions of the coming years? guest: one of the key assumptions is growth in gdp, gross to mystic product. -- grossed to mastic product. it's a broad measure of the economy. product.estic

every year for the next 10 years, we get 3% growth, that i don't think is realistic. we have been growing roughly 2% randomly. even given a tax cut in the other policies we discuss, i expect over the next 10 years, we will get roughly 2% per annum growth. think it's very, very unlikely we will get 3% growth. it doesn't seem likely at all. chat with a few colors, first is washington, a republican, good morning. you hear consistently that the economy is doing real well. your guest commented on what his analysis is on the growth rate. , i'm not an economist, i'm self-employed in i.t. in right now i happen to be between clients. so i am on different job boards looking for clients.

is let's say that back in 2007 before the economy fell out, on any given, large metropolitan area like los angeles and in my specific forum for software, there might be 100 per day. this is an average of new job posts. the same forms, if you get 15 per week, we are lucky. i understand my industry and the medical industry are the industries that are on top of jobs being offered. value, if our industries are not hiring that much, god help the rest of the people who are welders or something that are looking for jobs. i would like your guest to comment on that. host: thank you for the question. guest: it's interesting, i'm not aware of the job posting boards

you are looking at. i would say that other statistics would be counter to that. for example. six -- close to 6 million open job positions across the country from the bureau of labor statistics. that's as high a number as there has ever been. if you take the number of open job positions as a percentage of the labor force, that's as close to record high as it's been. it's across every industry and there are some exceptions. the energy sector has struggled a bit. oiluple of years ago, prices collapsed and that did damage to the energy sector so it's a little soft there. it's a little soft and retailing. brick and mortar retailers are getting hammered by the online retailers like amazon. other than that, every other industry sector including i.t.

and health care, there is a record number of open job positions. this is more anecdotal but if you listen to ceos, heads of human resource departments within large companies across the country, including in i.t., they are saying their biggest problem now is finding workers, finding qualified workers. whatot aware of precisely the caller is looking at with job postings and why that would be the case but that is not consistent at all with other economic data that we have about the labor market. adp which is a payroll processor, a human resource company that processes payrolls. we get data on 23 million workers across the country every month. and getook at that eta

lots of information about what's going on in the labor market including wages. wage growth has picked up substantially, consistent with the idea that business cannot find workers. it's particularly in i.t. the wage growth in the i.t. ,ector is stronger, i think than any other sector in the economy at this point of professional services. so, a a little bit less lot of different occupations and back sector. i.t. is quite strong so another piece of evidence is i.t. companies try to bring in skilled workers from overseas on different types of visas. when times are tough, they don't apply asthma because they can find american workers. the h-1b visa program is oversubscribed right now.

the job market is very tight particularly in i.t. i am very surprised and it's not at all consistent with the other that i'm aware of. host: chicago, a democrat, good morning. caller: i think this discussion about jobs is the determining factor of the health of the economy. sometimes, there is a reveal but i have not heard since president trump got in, what has happened with the infusion of money in financial institutions. we is to have several minority owned banks. now there are none. there is a big glut of access to capital. putting ahe tax bill lid on textus -- reductions on real estate in terms of taxes, i think we will have a major

problem for middle-class people who have these government safe jobs. i'd like your guest to talk about the kind of wage stagnation. to theseese people go institutions with the development of the driverless car, many people might be out of work in the next two to three years. host: you have your choice of questions there. guest: those are all great questions. paint an overly upbeat picture. the economy has its problems and issues it always does. one of the concerns that the caller brought up which i think is the one with

credit, the availability of credit particularly for smaller businesses. for big companies, no problem. companies like moody's analytics can go into the bond market and issue debt and banks are willing to extend credit. big companies have lots of cash so no problem there. for smaller businesses, this has been more of an issue since the crisis. it's gotten better in the immediate wake of the crisis, nine or 10 years ago, small businesses could not get a bank loan at all but that's not the case today. bank lending has been approved but it's very much an issue and goes to the need of support for our small committee banks and smaller banking institutions. really one of the big differences between our banking system and the rest of the world and its key to supporting small business which is very important initiatingneurship,

change and offering economic growth. i am very sympathetic to the point of view that was six rest because it's a very important and that goes to the banking that the banking system can extend credit. the other point the caller is an interesting question and debate and i don't know the answer for sure. it goes to driverless car's. s and technology more broadly and what that means for jobs, particularly in the future. or is a lot of concern about technology taking her jobs and our problem is not going to be unemployment, it will be lack of jobs because of driverless cars or drones or you name it, whatever technology. if history is any guide, don't

worry. technology is not going to take our jobs. in fact, i belong to a group of economists where the chief economist of google is a member emily asked hamm and he went back at looked at the new york times back to world war ii and found an article in each decade since world war ii with the title basically saying robots will take our jobs, prepare for that. this is an age-old, never-ending concern but it does not happen. i suspect things like driverless cars and drones and other technologies, same deal, it takes a long time for them to get out there in the economy. the other thing i would say is these newwe get technologies, it actually increases our standard of living, our wealth. wealthier. we have more money to spend. as a result, we always figure

out a way to spend that money on things we cannot imagine today. agoyou imagine 10 years that we would spend all this money on the phones in our hand? we will figure out how to spend that money and when we do, we will create more jobs. i am not worried about that. i don't think driverless cars or artificial intelligence, bring it on, we need this productivity. i would not worry about them leading to a world where people don't have work and machines are doing all the work. that will not happen, not my view. mark zandi is a chief economist at moody's and is with us to answer your questions about the economy. a view from outside the united states, craig is an independent in haiti, good morning. morning, i was

wondering how you factor in the $20 trillion debt and all the deficit. maybe the president and economists are not alarmed enough about this. there was a lot of concern about deficits and the debt but not so much anymore. i think there is not enough attention being paid to this even though there has been some talk over the last couple of weeks. it seems like we are living in such an artificial economy. the interest rates of been artificially grown over the last 20 years. how do you factor that in with how well the economy is doing. we will eventually have to deal with that issue? thank you. guest: i totally agree.

i am perplexed by lawmakers' willingness to run very large deficits and add to our debt load. the deficit financed tax cuts that were passed during the year , under a reasonable set of assumptions, will add one point $2 trillion -- $1.2 trillion to our deficit over the next decade. the budget deal that was just past will increase government spending again and deficits amassed by $300 billion over the next two years. this is at the same time that the federal reserve is no longer buying treasury bonds. they are allowing the bonds they have to mature. a source oflonger demand for treasury bonds and this adds up to supply and demand. they deficits means the government will have to borrow a lot of money and issue a lot of

bonds but the demand is not there to buy the bonds. interest rates are going higher and that's what's happening. it's having an impact. long-term interest rates are rising there's pressure on the federal reserve to raise rates aggressively because of the decision to run these large deficits. when the a time economy was doing pretty well with full employment and underemployment is about as low as it gets. i completely agree with you. this is really a bad policy at the wrong time. we should be doing the exact opposite. you pick up any macro economic textbook and it would say when you have in economy like this, we should be running a load deficit are working to reduce the deficit to prepare for the next financial crisis or the next war or next natural

disaster when we need the resources. instead we are doing the opposite so i totally agree, i think it's a mistake. host: yesterday we talked with viewers about the trump 2019 budget plan not including the traditional republican hallmark of balancing over the next 10 years. today notesl times that his new plan would balance see0 years, that it would budget deficits until fiscal 2039. i want to get your thoughts on trying to plan out the fiscal -- to plan out to fiscal 2039. guest: good luck with that. we were talking about the assumption of economic growth of more than 3% and that's not happening.

i fear we are not going to address these long-term fiscal problems we have. they are clear. we have long-term fiscal problems and will not do it them until there is another crisis s are up against the proverbial wall. it will be plainly obvious to everybody that we've got to make a change here. it's unfortunate we are not taking the opportunity at this point in time when things are going well for us to really address our fiscal situation. it's a shame that we don't have anyone in congress really championing that idea. republicans were the key to that perspective. it was very therapeutic and important but it's not there today. i think that's a problem. who is to say, we are talking about other things that we are not thinking about.

we should be investing in infrastructure but we're not talking about how to pay for it. more to say we will not do to our budget deficit with that? disappointing that we don't have champions in for fiscal discipline. we need it. veronica in washington, d.c., a democrat, good morning. caller: my complaint is that i am on retirement and i get a retirement check and the social security check and on my retirement check, they take out health insurance. takes 134l security dollars out of my money for health insurance. i don't think that's fair at all. host: any thoughts? it sounds like you are on medicare.

is a good program. i think most people like it. it's very costly to provide. if you think our -- about our fiscal problems in the long run, one of the key problems is the cost of health care, the medicare and medicaid program. this is an area where we need to focus on ways of delivering better quality health care at a lower cost and a lower price. if we can't figure that one out, we will have more folks like the caller who was upset about the cost and quality. it's an area when he to focus on long-term if we address the needs of our seniors and our long-term fiscal problems. pittsburgh, a republican, good morning. caller: thanks for taking my call.

mr. zandi, just like the other caller, i'm concerned about the national debt. who really finances our debt? americans have to balance their budgets. corporations have balance their budgets. andently, our government our great country does not have to balance their budget. i am concerned about the future of our country and i think there needs to be more emphasis on the consequences if we don't start managing our money better in this country. thank you. host: thanks for the call. guest: i'm with you. i hear you and i agree with you. i think this is a major issue.

if you look who is buying the the one thing you can take solace in, most of it us, americans. we are investors in the treasury bonds issued by the government to finance the government's fiscal operations. we do have a lot of foreign investors that are also buying. roughly maybe 18 billion day -- maybe $18 trillion traded in public debt and one trillion is owned by the japanese, one trillion is owned by the chinese. we do rely heavily on global investors buying our debt. i don't think that's an existential problem. i don't think that's an issue for today but that is something to keep in mind.

we do rely on overseas investors surey that debt to make interest rates don't rise to a high degree. pressingl issues are but this is why it's -- it's a difficult political problem. it's not existential to the economy like right now even next year or the year after that. this is a long-term problem that is corrosive on the economy and cuts into our growth over of time and it's hard to disentangle from the other things going on in the economy. it's a particularly pernicious problem politically to address because not in our face. it's not something we feel immediately and therefore, because we don't, we are not addressing it and the problem will get deeper. i completely concur with the caller. host: just a minute or two left with mark zandi.

from florida, a republican, go ahead. ander: thank you, c-span mr. zandi for your input. i have the same concerns that have been voiced by the other callers. any other household person would be concerned if they were cutting their income and at the same time, increase their borrowing. how imminent our credit rating downgrades? credit rating agencies were criticized for being behind the curve on some of the ratings and the problems that came up in the financial crisis so are we already behind the curve for the downgrade? it seems the policy is so reckless, it might be in order for future downgrades. guest: good question. i'm not in the rating agency. i'm in the moody's analytics which is separate so i don't have any direct input into the ratings process.

i don't know what the folks of the rating agencies are thinking about as far as ratings on the debt this year or overseas. look -- first, rating agencies have been downgrading other sovereign governments. you can see that in the case of many european economies during the european debt crisis. fiscal pressure across the globe. clearly, investors are concerned about that. i want to end on an optimistic note. the u.s. economy is still the strongest economy on the planet. it would take a whole lot of really had policy for a really long time to mess that up. we've got a lot of think -- good things going .

we still are theaaa credit on forplanet and the benchmark every other economy because we do a lot of things wrong but we do many more things right. it would be pretty tough to mess that up. host: mark zandi is chief economist at moody's analytics. >> coming up wednesday morning, rob goodall discusses the trump administration's 2019 budget. alson garamendi will weight in on the budget. and then catherine moon will discuss the olympics to highlight issues with north korea. watch c-span's "washington

journal," live at 7:00 a.m. eastern wednesday morning. join the discussion. sunday night on "q&a." the powerflashback," crash between the u.s. and the it is hardina. >> for westerners to get an idea of what that means. especially somebody is big and proud as china. so, they had this mindset of, we will build up our navy. on 8:00 p.m.ht eastern on c-span's "q&a." >> diseased and buses traveling

across the country on our 50 capital for vote up recently stopped in montgomery, alabama, asking folks, what is the most interesting issue in our state. >> the most important issues to me re: equality, freedom and equal justice for everyone. you cannot just talk about this every february black history month. we have to live it every day of the year. we have got to do more to build bridges. wrote t. washington once there are two ways to exert one's power. one is pushing down and one is pulling up. let's pull people up. >> the most important issue here is the lack of jobs in montgomery and alabama. people are looking for a job and

there are no jobs here. you need more than just a college degree to get a job. a lot of people do not have the financial help. money to not have the get the higher education and they cannot find the job. >> we have been fighting common core for seven or eight years now and we still have that here in alabama and we find that everything will year with the new bill and we want to get rid of it. >> the biggest issue in alabama is racial inequality and justice reform. here in the state, we still have rhetoric in our constitution that is representative of the time that has long passed. and i think that having discriminatory language in the document that governs a diverse group of people is very outdated. and it limits people's power,

disenfranchisement. the way the law enforcement interacts with the citizens states, i think that those things need to be addressed so bad. within the the gaps disparities and inequalities within the justice system here in alabama. those can close and eventually, not exist. the cost of college education. i want everyone to have equal opportunity for college. might be the first people in the family to go to college. the government needs to give us more money. that is the most important issue in alabama. state on from the c-span.

>> a headline from the "los porter'simes," rob background check was finished last year. the fbi director said the bureau completed the security check on president trump's secretary rob porter last summer, an account that casts more doubt on when officials learned of his history of domestic violence allegations. read more at latimes.com. here is fbi director christopher wray testifying today at the senate intelligence committee. national intelligence director dan coats also weighed in on the background check process. was the fbi aware of allegations related to rob porter and his domestic abuse? and if so, was the white house informed it could affect his a , when wereearance

they informed and who at the white house was informed? >> senator, there is a limit to what i could say about the content of any particular background investigation for a variety of reasons you could appreciate. i will say the background investigation process involves an elaborate set of standards, guidelines, protocols and agreements that have been replaced for -- that have been in place for 20 plus years. i am confident that in this particular instance, the fbi follow the established protocols. s thewyden: but wa white house informed of his security clearance? >> i cannot get into the content. submitted you the fbi a partial report on the investigation in question in march.

and then a completed background investigation in late july. soon thereafter we received requests for follow-up, inquiry. we did the follow-up and provided that information in november and then we administrated and close the file in january. and earlier this month we received additional information and we passed that on as well. news reports,o there are dozens of white house staff was only interim security clearances still, to include jared kushner, to include white house staff secretary rob porter, who i would assume would have regularly reviewed classified documents as part of his job. somebody ists, if flagged by the fbi with concerns

in relation to their investigations into white house staff, should those staff continue to have access to those materials? dir. coats: particularly with a new administration we are trying to fill a lot of new slots. and the security check process -- speaking with regards to folks who had issues raised, as opposed to being in the matter of going to the long process. dir. coats: i'm not in the position to discuss what are -- or situations specify individual. i might just say that. i think sometimes it is necessary to have some type of preliminary clearance to fill a

spot. but i have not publicly stated if that is the case. access has to be limited, in terms of the kind of information they can be in the position to receive, or not receive. that's something we have to do as part of our security clearance review. the process is broken and needs to be reformed. s a senator warren has said, it is not evolution, it is revolution. we have situations where we need people and places, but they do not yet have that. and as to your specific question, i think i would take that up in the testify session. >> chairman, i am over my time. >> national intelligence director dan coats and fbi director christopher wray testify today at the senate intelligence committee on global threats. watch that hearing in its entirety tonight at 10:00 eastern here on c-span.

transportation secretary elaine chao spoke at administration's infrastructure proposal at tuesday's white house briefing. this portion of the briefing is 15 minutes. >> good afternoon, everyone. the of you probably saw announcement is morning. it is a direct result of the trump tax cuts and alabama-based company is raising the minimum wage to $15 per hour and giving $1000 bonuses to over 2000 workers. for those of you keeping track, we have over 350 companies that have announced wage increases, bonuses, new hiring or have increased retirement benefits as a direcre