we'll hear from hassett in a moment, but first larry summers.rs was the 71st secretary of the treasury, serving under president clinton. he headed the national economic council under president obama and was president of harvard university. larry summers, pleasure to have you on. >> glad to be with you, fareed. >> so you have said in "the washington post" that as treasury secretary, undersecretary, deputy secretary, you have worked for seven chief economists for the white house, and you have never come across an analysis that you described as dishonest in the way that this is dishonest. explain what you mean by that. >> look, the jobs to do economic analysts and different economists will have different perspectives but each of the previous people in the job have taken positions that were well within what professional economists believed and argued regarding the effect of policies. and the claims here that you would see an increase of $4,000 to $9,000 in a typical family's income from a corporate tax cut are just outside the range of what the econ

larry summers, thank you. >> good to be with you. >> scott, back over to you larry summers, former treasury secretary, white house advisor and economist. >> all right, sara, thanks so much our thanks to the former secretary as well. >>> brian sullivan now has a look at what's coming up on "power." >>> coming up on "power lunch," larry versus larry you just heard from larry summers, skeptical any tax cut will help. on "power lunch" we're speaking with larry lindsay he wants to bet $30,000 it will create economic growth tech under fire, facebook on the hill talking to lawmakers about russia-linked ads during the election but big tech be getting for a big wave of new regulation. >>> and it's mink walls and an ice chamber. no, that is not pete najarian's vacation home. this is an $5 18million mega mansion in the swiss alps. "the halftime report" is back right after this "volatile markets." something we all think about as we head into retirement. it's why brighthouse financial is committed to help protect what you've earned and ensure it lasts. introducing shield annuities, a line of products th

with his they would themselves or not, nonetheless larry summers would be another example too. related to paul samuelson and other leading economists. the market is won by many respects. the issue isn't as it was in the 50s, 60s in 70s, should we have the market or socialism? market has won that argument. nobody in the world argues for command socialism. should be have no government or significant government role? the odds are on the side of we will have a significant government role for some time. >> host: we talked to another economist earlier at freedom fest who would jokingly cross herself every time she said the sainted adam smith. is he still a sainted person in the economic world? >> adam smith? i have done a fair amount of research on smith and some writing, he was more the classical liberal view for the time he wrote, he was in favor of progressive taxation, in favor of emerging welfare state practices, government, some of his students and others became leading supporters of the french revolution and advocates of early government activity in government, in england, gov

and i think larry summers would be another example. he's also close to paul samuelson, related to both paul samuelson and other leading economists. so i think that the market has won by many respects. the issue isn't as it was during the '50s, '60s and '70s. the issue was should we have the market or should we have command socialism. the market has won that argument. nobody in the world today virtually argues for command socialism. the question is should we have no government at all, or should we have a significant government role, and i think that the odds are definitely on the side of we're going to continue to have a significant government role for some time. >> host: we talked to another economist earlier while we were here at freedom fest, deirdre mccloskey. and she would kind of jokingly cross herself every time she said the sainted adam smith. is he still a sainted person in the economic world? >> guest: adam smith, you're saying? yeah. well, i've actually tone a fair amount of research -- done a fair amount of research on smith

that whole debacle with janet yellen and larry summers.ith regards to who conservatives are pushing for, i will be candid. more of the freedom caucus members, they have respect and admiration for john taylor particularly with his policy with the taylor rule. has backed off how willing he would be to implement that role. but they like that. the vice president, mike pence, is very close with the chairman, who is a big supporter of john taylor. they have the ear of the present , of those making the decision. they are pushing for taylor. again it is subtle and the names that have been listed with the exception of fed chair janet yellen, they would be ok with. might beohn taylor more inclined than others to raise interest rates. i'm glad kevin mentioned john taylor's remarks at the boston fed. kind of a sister-soldier moment. powell, what he gets you, he and you a freshfaced, policy continuity. he gets you a republican who is not contentious. he gets you someone who has a background in business. a longtime carlyle executive. he gets you goodwil

larry. summers. good. good. good. good. you're. with our little. girl. where. you met. long a. farmer long. tongue are on. the bog. bowl long. long. long long long. long long a barber. bird. song. the big boss. org song. sorry. cause you got. in your soul. it's not. bug. oh i. know it's something far more. trouble. really. trouble since the. one on the jarobi. told. me so much being. above. you. just heard. a. song by song above all. the trouble. when i'm with you all. so much for. much more. than. a. nothing was. born to serve for our love to meet. the terms of the law is not an option i was born here who are already. are left. with the burning of the result to me. sorry. ford. but you're not going to move. along with. regard to. all the boys. on the sideboard feeling. like we was on the shore on the next morning good. luck to the. norm with. the bring along a. horribly wrong with. having an. order. for the. source from. the back seat. with. your movies like. the borg with. what the doctor. could not. forbear but. good news. org but very. very. very. very. cold. with. a. one.

treasury secretary, larry summers, on how the jump in mr. she should take tax reform lessons of from the reagan years. we are two hours, about 20 minutes off of yesterday's minor dropped. future positive 25. and the dow moving about two points. this is bloomberg. ♪ taylor: this is "bloomberg daybreak." i'm taylor riggs with your business flash. pfizer beating estimates and raising the earnings forecast for the entire year. pfizer says it will decide what to do with the consumer business next year. the company is considering a spinoff or a sale.. the world's largest advertising coveting cutting its forecast. they said sales growth is expected to be flat this year. earlier the projected growth around 1%. wpp is having its worst year since the financial crisis. client like proctor and gamble have scaled back at a budget -- ad budgets. and proctor -- and dropping out of an agreement. the deal allows advisors to -- with competitors without being sued by former employers. morgan stanley says the government -- said the agreement is full of opportun

we have world bank president comi ungp on "squawk on the street," larry summers also coming up.uawk box" is next >>> good morning earnings alert jpmorgan set to report this hour we'll bring you numbers and reaction on wall street. >>> president trump issuing a warning to congress on tax reform saying in his words you better get it passed. we have the highlights from his speech >>> and crisis in california the death toll continues to rise as fast-moving wildfires sweep through the heart of wine country. it's thursday october 12, 2017, "squawk box" begins right now. ♪ >>> live from new york where business never sleeps, this is "squawk box. >>> good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at the u.s. equity futures. stocks closed higher yesterday after we got those minutes from the nafederal reserve suggesting they think everything will withstand another rate hike coming in december stocks closing up. s&p closing at a record close. the dow up about 40 p

some ahead, how it's from our interview with larry summers.thinks tax overhaul plan is an atrocity. this is bloomberg. >> taxes will lead to better economic growth, but who will pay for the tax cuts? he joins daybreak earlier and david westin asked if tax cuts will lead to growth. >> directionally when you cut , may invest more in there is positive impact on growth. the problem is it is not nearly large enough to make the tax cut pay for itself. distributionse and if you do it in a responsible way you create a specter that does more damage to growth in the corporate cut spurs growth during this also the fact that this is probably about a bad is moment as we can imagine. capital isnk cost of a constraint on corporate investment nor for that matter profit margins are at near record highs. this isn't the moment when the focus should be on corporate tax cuts. should we do something about cash abroad? yes. part of that is making it neutral whether you make the cash abroad or leave it home and an important part of doing that -- it is an extraordinar

jonathan: it was the first time since the inauguration larry summers agreed with the president. agree with the president, the debt needs to be wiped out. some reporting of bloomberg. a population the size of connecticut, the economy the size of the nebraska, with a bigger debt load for any state except for new york, california and massachusetts. how do you restructure the problems in puerto rico? luke? did with the you $73 billion in debt, have you deal with the $50 billion in pension deficit in the background. this will rumble on for a long time. 40% of these general obligation bonds are owned by you and me and people individually around the usa. i don't have any to be fair. the triple tax benefit is really attractive to people. who do you want to punish? it is not the big banks donald trump was talking about. it is the normal pensioners, the savers you will punish. i honestly don't know how you get out of it. it does not feel like the u.s. treasury can take this obligation on. jonathan: we will wrap things up and get to the rapidfire round where we put together the last 25 min

david: larry summers has helped with economic policies for several presidents now. ntly wrote in "the washington post," that the tax plan from trump is "an atrocity." good to have you here. larry: good to be with you. david: i once to focus on the economic question, do corporate tax cuts lead to corporate growth? you heard jamie dimon said, if we had tax cuts, he would hire more people. as an economist, is that true it will lead to growth? larry: directionally when you cut corporate taxes, corporations invest more and there are some positive impact on growth. the problem is it is not nearly large enough to mix the tax cut -- to make the tax cut paper itself. it has perverse distributional alncert -- distribution consequences and if you do it in a responsible way, you create debt that does more damage to growth in the corporate cut spurs growth. there is also the fact that this a probably about as bad moreland for counting on those effects as you can imagine. we already have the cost of capital at an extraordinarily low level because of low interest rates, superhigh p

number of people i have known well in academic life like ben bernanke, janet yellen, stan fischer, larry summersre all in policy positions. it was a natural ease of having a conversation about these questions. tim geithner, who do not have an academic background, but he had been in the treasury a long time. that was important in him being able to interact with people around the world because he knew them all. i think if he arrived in office only six months previously, it would have been very difficult. to have expense in the federal reserve bank of new york and then the u.s. treasury, the continuity there, knowing people, having had a long time in your career where you have had a chance to think through what you really believe about why banking systems are fragile, what causes disruptions, what is the right way to respond to it, these things are important. one of the problems the political side had is that deep down they did not really understand these issues. they thought it is a crisis, we have got to find a way of dealing with it, but they were not able to conceptualize the nature of the prob

under the obama administration, where larry summers worked, we had about the weakest wage growth you'rer going to see, and especially wage growth ridiculously small compared to the profit growth that we saw. i wonder what the theory is that says we could have an economy where the corporations are doing great, but wages aren't in a way that's unprecedented other than what we're talking about i'd love to see the alternative theory, but instead we're getting ad hominem attacks >> kevin, what's the proper role of tax policy and encouraging companies to invest in their employees' education as a way to boost wage growth over time? you haven't had a lot of conversation about that. corporate tax cut, yes, all the companies around here want that, but what about what's going to make the american worker more valuable >> that's a fantastic question, because really if you think about it, higher wages come from either more capital spending or more human capital so if we invest in our workers, make them more productive, either with education or on the job training, that should drive up wages we've cer

number of people i have known well in academic life like ben bernanke, janet yellen, stan fischer, larry summers were all in policy positions. and so there was a natural ease of having a conversation about these questions. you know, tim geithner, who did not have an academic background, but he had been in the treasury a long time. that was very important in tim being able to interact with people around the world because he knew them all. i think if he arrived in office only six months previously, it would have been very, very difficult. and he had experience in the federal reserve bank of new york and then in the u.s. treasury, so i think the continuity there, knowing people, having had a long time in your career where you have had a chance to think through what you really believe about why banking systems are fragile, what causes disruptions, what is the right way to respond to it, these things were very important. i think one of the problems that the political side had was that deep down, they did not really understand these issues. and they thought my god, it is a crisis. we have got to find

jonathan: in terms of wiping out the debt, it was the first time since the inauguration larry summers the president. he said i agree with the president of the united states. the debt needs to be wiped out. luke, i want to think about how you are thinking about the situation right now. some reporting of bloomberg. a population the size of connecticut, the economy the size of the nebraska, with a bigger debt load for any state except for new york, california, and massachusetts. it's a tough, tough situation. and how do you address it? how do you restructure the problems in puerto rico? luke: and even if you deal with the $73 billion in debt, how do you deal with the $50 billion in pension deficit in the background as well? this will rumble on for a long time. 40% of these general obligation bonds are owned by you and me and people individually around the usa. i haven't got any, to be fair. the triple tax benefit is really attractive to people. so who do you want to punish? it's not the big banks donald trump was talking about. it's your normal pensioners, the savers you will punish. so

right now larry summers one out be that. as you see it on the. little. bit i'll. tell you the other side of the mike on the. by then got a session on the nodding. by then is a shift the long. term nodded said it. was going on more. certainly not so it. can be no surprise was revealed to the pope multiple injuries among current enough to so for them to keep sophie hold the book but the show's real yammers on the phone to the book and the feeling of a complete sense of the say yes but in the book in a moral sense what my. own admitted nothing of. a philosophy. something that was. on long enough something not set in. the market alone to hospitals look my stuff know what i can now maybe i maybe i'm a bit bored after. six tries is presidential survival. when customers go buy your discipline. when else will reduce and lower. that's undercutting but what's good for market is not good for the global economy. but. the relationship between kids sure it was suggested. and a fairly strong one there were two thousand and seven balls in the study it's a very extensive study don

coming up, the former treasury secretary larry summers.knew that phones would start doing everything? entertaining us, getting us back on track, and finding us dates. phones really have changed. so why hasn't the way we pay for them? introducing xfinity mobile. you only pay for data and can easily switch between pay per gig and unlimited. no one else lets you do that. see how much you can save. choose by the gig or unlimited. xfinity mobile. a new kind of network designed to save you money. call, visit or go to xfinitymobile.com. ♪ nejra: i am nejra cehic in london with tom keene in new york. let's get to first word news. special counsel robert mueller appears to be building a trumphat the donald campaign was in close touch with russian officials. he revealed a former trump foreign-policy advisor has pleaded guilty to the line to the f -- line to the fbi about his contacts with operatives. george papadopoulos is cooperative with prosecutors. has been charged with tax crimes and money laundering. congressional tax writers are considering a

jonathan: it was the first time since the inauguration larry summers agreed with the president. agree with the president, the debt needs to be wiped out. some reporting of bloomberg. a population the size of connecticut, the economy the size of the nebraska, with a bigger debt load for any state except for new york, california and massachusetts. how do you restructure the problems in puerto rico? luke? luke: even if you did with the $73 billion in debt, have you deal with the $50 billion in pension deficit in the background. this will rumble on for a long time. 40% of these general obligation bonds are owned by you and me and people individually around the usa. i don't have any to be fair. the triple tax benefit is really attractive to people. who do you want to punish? it is not the big banks donald trump was talking about. it is the normal pensioners, the savers you will punish. i honestly don't know how you get out of it. it does not feel like the u.s. treasury can take this obligation on. jonathan: we will wrap things up and get to the rapidfire round where we put together t

had brought the bank in very early to get that to happen and it helped that there was not only larry summers had been the chief economist of the world bank and make them do things to promote u.s. interests. when it came time to plan reconstruction, the bush treasury was there and they were doing this kind of contact in the current treasury that we couldn't gbut wecouldn't go to k until after so we have to d hade invasion first and then reconstruction. this is the kind of relationship in the treasury and the world bank that enabled the united states to use the institutions for the tools of american foreign policy. it doesn't happen unless you know how to do it. in the book makes a point of the world bank has the two big businesses one is lending to countries that basically can borrow on their own. brazil, india and china. they make money on that which they used to finance their operations into the other is the loans to the very poor countries, the so-called programs, some of the loans never get feedback and some people think that they are declared grants in the first place, so it is a very de

i won't respond to larry summers. you say there's considerable academic consensus. , havehe last few weeks you learned anything about how we regard academic consensus in the world of economics? you looks at the facts and the evidence and look at the report today and count how many are peer-reviewed and there is a massive amount of evidence supporting what we are saying. we are not just making it up. david: thank you so much. let's check in on the bloomberg first word news with mark crumpton. the un's top human rights official is calling the syrian government siege of the capital suburbs and outrage and says food and medical supplies must be allowed to reach civilians inside. he says that residents are facing the humanitarian emergency despite a truce negotiated in april to facilitate relief. ofcalled images circulating severely malnourished children shocking. british foreign secretary boris johnson says it's on clickable that european union citizens living in the u.k. might be sent away or lose their rights after brex

. >> the believe that we are in a secular stagnation to use larry summers' term always comes from left-wing people. they think capitalism is limited in what it can do. i disagree with the thesis. if we were to have tax reform that blew out the deficit. charles: is 4% achievable? is 5% cheechable? it songtdsed like a pipe dream, step on the campaign trail. >> what i'm realistic about is aging. the challenge we face in terms of economic growth is the labor market, many of those people are moving into retirement. charles: that's reflected with the skills catch situation. guys -- the skills gap situation. thank you both have much. the obama-era scandals involving russia are leading many to wonder when another scandal on russia will surface. we'll discuss next. ... >> charles: well mounting questions swirling around the two russian bomb shells dropped earlier this week. the trump dossier and uranium one deal leaving many to wonder our editorial page writer for the wall street journal doug burns former justice prosecutor and the president of the trip scott law firm, edits a pleasure to have you i

earlier i had larry summers explain why he thinks the numbers do not add up. >> if somebody would like to present a calculation suggesting that if we give up a trillion dollars of tax revenue to corporations in corporate tax cutting that will produce a trillions additional payroll an say where those jobs are going to come from, that would be a very important and useful analysis there's a lot of economists who study these questions over a very long time and that's not been their conclusion. >> joining us exclusively on power hundred lunch is larry liy i don't think larry summers accept it. he said we'll study. i think it's a bet between you and the ether right now. why are you so confident that you would put up that kind of money that this could work >> this is a very, very powerful tax bill the first thing that it does is it allows businesses to write off the cost of their investment when they actually do the investing. right now they have to shell out the money and have to wait several years to get the tax deduction for it this lowers the user cost of capital. there's plenty of eviden

listen to trump adviser kevin hasset and larry summers. they clasp on fareed zakaria on gps. >> that the tax cut will pay for itself, raise incomes more than anything else that's happened in the country in many years, that the tax cut isn't skewed toward helping rich people, those are fake facts. >> the fact is if you think we did something wrong, accuse us of making an error. but accusing of us is being dishonest is beyond the pale. >> you heard that fierce battle on what this tax plan means. >> hassett said it will mean a $4,000 pay raise. all the industries fight to keep their goodies. >> hence the desire for speed. kick that debate. questions mounting in puerto rico where 70% of the island still without power. over $300 million contract from a small montana energy company the latest through san juan next. wonderful. ♪ ♪ i'm goin' up the country, baby don't you wanna go? ♪ ♪ i'm goin' up the country, baby don't you wanna go? ♪ geico motorcycle, great rates for great rides. for her compassion and care. he spent decades fighting to give f

that is a sharp contrast to the last go around, when progressives were divided around larry summers andellen. shery: there were reports that we could even see a twofold package, that it could be a package deal or a combination of john taylor and powell together. could that be a possibility? are stillre possibilities that the president has to name. there is still a timeline for other vacant seats. i can tell you there are a lot of conservatives pushing for john taylor. this is someone who has received praise from people like house financial services committee chairman -- mark calabria, mike pence's top economist. he has spoken in the past favorably about john taylor. i think if you look at the list of folks, mr. taylor in particular, he has walked back on whether or not he would implement the so-called taylor role in a public speech. that was interpreted by many people as a move to the middle, so to speak, to ease concerns of folks who thought the rules-based taylor rule is a bit too controversial. he's had interesting public comments. i think chairman yellen's comments on the volcker ru

larry summers is talked about the fear, the lack of fear itself. would you concur?you echo summers? do you feel any sense of reminiscing of 2006? alan: it was ok for a couple of years. 2006 was a little bit early to get out of markets. 2007 got a bit hairy. 09 was the real bear market. the stock about volatility. if you look at volatility and if you do some work on volatility, what should you do? the models will tell you should buy risk. you should buy equity. i know it sounds perverse. maths, he goes from 10 to 20. it's much more dangerous at 10. the last two years of a bull market, the returns are very strong. return is about 30% from the s&p 500. it's very dangerous getting out to early. that's a grass there. you want to get out of risk assets if you see a recession. what's the spread in the bond market for clues about me top out? manus: how far away would be a recession? a recessionsee within 12 months. you have a strong goal economy. is thek of recession murdering of the economy. the fed overdoing it. that's classic u.s. recession. anna: thank you very much. al

you could come would be four years ago when barack obama was choosing between janet yellen and larry summers that was about personalities, and it was not an up or down things every other day. he made his decision relatively quickly once it became clear ben bernanke wasn't coming back. his is more like a tv reality pointed out,person and the person making the choice has a history of that. vonnie: he has a law degree, has worked at the bipartisan policy center, at the carlyle group and has a close relationship with steven mnuchin. how closely would he listen to someone like steven mnuchin who is a treasury secretary, were he to be the fed chair? michael: it is itching to see how the fed reacts if you get tax cuts in place that speed up the economy. you would expect inflation to start rising and the fed to lean against that. "politico"ly, in a article whether said powell was the favorite at the time, they said steve mnuchin believes he can control powell. what does that mean? powell would probably push back hard against that characterization, but if the administration is making its decision bas

holtz-eakin: i do see larry summers, and argued that lowering corporate is the closest thing you define then arguing with kevin that you should or -- you should lower rates. that's just politics. it's important to make about the consequences for hiring in the u.s. and paid a matter in the u.s. our that's the route to real success for the middle class. it's way more important than anything in the tax brackets or standard deductions. what's not on the table is what really matters. and it is fair that to have that debate. that's the crucial issue in america right now. holtz-eakin,s interconnection form. the debate over local tax elections continues. governor chris christie from new jersey weighs in on the future tax reform. my interview with governor christie, coming up next. this is bloomberg. ♪ david: this is "bloomberg markets: balance of power." the euro reaching the weakest level on record after a bloomberg report that the german government is wielding its influence international to mehlman institutions to restrict finance. bank inpean investment the european bank for reconstruction a

>> you have to understand that -- look around, i always look at this great quote from larry summers andhe refuses the efficient market hypothesis by saying there are idiots, look around and i say, look, when we say had the wall street. [inaudible conversations] >> there is work to be done. look around and the question we have to ask ourselves is what is it about the economic system in the political system we have created that keeps us from doing the work of making a better society. we have to understand that all of these systems and we ultimately bake in these instructions and we don't quite understand what we are asking for. steve: just to finish that points before i bring in the panel, are you arguing that the point about in the way to make sure that these technological advances benefit everyone and not just the rich is actually not so much in the technology but the fundamentals of the way we organize capitalism and politics. i agree with that and i read something just today and chris, i want you to jump in on this because last time we were around this table and we have this passionat

larry summers saying there is a lack of fear.e end of the i met meeting he said there was a near he since of call -- there was in mary sense of calm. who is going to move first? is carney going to be bumped into a rate hike? the timeline to a rate hike. you got morgan stanley, the first rate hike in the region moving further away. --l mark carney speak to its will mark carney stick to his guns? ftse 100 relatively positive. market that a slight elevation is something that they say is very dangerous. there is very little value. these are gilt futures. pipsqueak. you early call that genetic just you hardly call that dramatic. -- you hardly call that dramatic. he do have an auction in the united states -- you do have an auction in the united states today. keep an eye on 2/10. guy? guy: manus, great stuff. let's take a look at some of the stock movers people we have seen a spike higher and copper that is being reflected into the stock market. they copper producer trading 2.5% higher. glencore, rio trading higher, 1.67 and 1.64 to the

lame it just larry summers says it will not.ate taxes and contribute to the economy? tom: thank you so much. with us jacob frenkel and howard davies. the single best chart goes to both of their worlds, the world of macro economics and we will start howard at rbs, the world of banking. this is the quiet, the vix index way below the average of 20, the moving average almost down for the shock and all we saw in the 90's. the actual pricing of volatility is in the equity markets. it is quiet out there, we saw that with jpmorgan, with bank of america. like i am not going to nose into rbs' thing, but how do you get out of the quiet? howard: i think there are things to worry about. the most i worry about is what happens when the bank of england starts to tighten? we have not had a rise in rates for about a decade in the u.k., and we just do not know how people will respond to that. in principle you can say, our book looks good, people can see this coming, but how will they behave? we do not know. tom: we just do not know. stanley fische

in this piece you've got larry summers quoted calling steve mnuchin the treasury secretary, the biggest sycophant cabinet member in history. these tricks might keep them from getting screamed at by the president but are they impactful in any way? >> well, a lot of aids will tell you, you have no idea the things that we've stopped. i don't know exactly what those are -- >> they tell me that all the time too. that one is so tiring. you don't know what goes on behind the scenes. i'm scared. >> you're right about it not working entirely. there are a lot of decisions that even his own -- the president's own cabinet feels like have been reckless, they've gone forward with, the paris climate accord. there was great disagreement internally about that and there was a fear that that would disrupt a lot of our alliances in the west and most recently as the iran deal where a number of the national security officials were urging the president not to take the step that he ended up taking. >> evan, take us inside. when you look at the president's surrogates, cabinets, his senior advisers, they refute

everyoneason why thought that larry summers was so hawkish in 2013 was he was very critical of quantitativet one of the is presented, he be hawkish, he has not spoken much about interest rates but he is been critical of balance sheet policy. it underscores the notion that we have all of these different candidates but we are not sure what they would do. said markets do not get to say who the fed chair is going to be. that would be the case in the olden days. do markets have a say in what kind of fed chair do we have? if we see a john taylor nominee and there's a market selloff? a good question, to your well. it remains to be seen how much of a market bump you would get from an announcement like that. all of this stuff, investors know this and they can look ahead and game out how is this going to go. even if you had an initial then, you would have people even before that saying, not a move i would see because he would realistically not be able to change the game that much. bozeman.tt thank you. chris will be staying with us. we will be joined by our guest and deutsche bank bundesbank. live fr

there certainly were democratic senators weighing in at the time, as there were concerns about larry summers, who was a candidate at that time. it seems whoever trump picks has to be confirmed by the senate, so it is not unreasonable to ask the senate to weigh in, but we do not usually see it in that manner. more broadly, what has been going on with jeff flake and bob corker speaking out so strongly against trump, that happening at the same time, that is a fairly huge development, given that we don't usually see even opposing senators saying such strong worth against a sitting president. francine: mike, what do you make of this? it's not unusual to ask for the opinion of others. are we reading too much into it it? >> i think we are all focused on the fed chair. we are getting down to the final few days. so, any news tends to be relatively market sensitive. points fo rus, the key are, we think the fed is trying to lay a relatively hawkish short-term path. to give themselves flexibility in the event we don't necessarily get this transition of philosophy at the fed. if the fed is already being

so, susan, you have larry summers, former treasury secretary, also obama economic adviser saying corporateax cuts benefit shareholders but it doesn't end up encouraging investment. it would mean increases in taxes or larger deficits. will conservatives back this? >> we, like bill mentioned, we haven't really seen the formal piece of legislation worked out yet. so, we don't know if, for example, as speaker ryan has mentioned, maybe there will be an uber wealthy category on the personal income tax side. but to your point on the corporate tax breaks, the question is really, how low does it need to go to really create investment in the united states? because right now there is no one paying that high corporate tax rate. they have accountants to take care of those things. a lot of carve outs. there's a lot of lobbyists working to ensure that things get in. so, until we see a final piece of legislation, we really don't, right now it's all speculation. but the message is going to be critical on this and the 401(k)s, i think, to do anything on that, to hurt people will be a deal breaker. actually,

larry summers strength the team. ♪ ♪ it is 6:30 a.m. in london. the dollar-yen is on the move.move lower. nejra cehic has the latest on the markets. we are about 30 minutes from the japanese equity market closing. the nikkei set to close above 21,000 for the first time since 1996 during -- since 1996. seeing some gains on the topics as well. the msci asia-pacific heading higher in this session. losing momentum is the dollar. this is the bloomberg dollar index. you can see a little bit of faltering at the end of the chart after the recent gains. it is set for a weekly loss. the first weekly loss since mid-september. we are looking at a bit of dollar weakness. some of this is around the dovish fed we got from the minutes earlier this week, also treasury yields set and the week lower. we are continuing to see flattening on that curve. looking at sterling, seeing a turnaround. yesterday we saw a dip in cable and concerns around -- in concerns around brexit. then, a recovery in yesterday's session and sterling holding those gains. the recovery coming after the report on comments fro

your cohorts, i wouldn't say colleagues, but people in your world, for example, larry summers, have said that this tax reform is all based on phoney economics and you have pawed crudman saying it is based on lies. have they taken you up on that? >> no. paul, larry, are political spokesmen. that's what they're doing. i think there's enough name calling. enough use of those kinds of words. i think this is a good challenge. let's put our money down. so far they have declined. i think i know why. i think they know they're going to lose the bet. >> dana: are you comfortable with 20% on the corporate tax cut? do you think it could go higher and still be effective? >> i think it will be very close to 20%. the president has been firm about that number. remember, the goal here is international competitiveness. the average world tax rate now among developed countries is 23%. we're at 35%. that's why companies are locating their plants overseas. it's why they do something called transfer pricing which is overinvoicing in order to move profits overseas. if we go to 23% or lower, that stops. if we go

we've seen larry summers have come out and said in an op-ed in "the washington post" that whatever the congressional budget office, whatever the director of economic policy is suggesti suggesting, the numbers just simply don't bear out. we're not going to see any kind of correlation between these cuts and working waging of real people. >> i'm happy, he's known to be a brilliant economist -- >> exactly, what we know, when this sort of tax policy has been implemented in a place like kansas, what did we see, what have we seen? we've seen everyday working people who are busting their behinds to make ends meet, right, not benefit. actually lose ground. and so if trump's election was about changing, emptying the swamp, changing the path, the course what we're seeing here is business as usual. >> and drop into the middle of this steve bannon. in the past couple of days who's gone after a number of republicans that the president will need if he's going to get tax reform through. let me just play a little bit of steve bannon. >> the united states senate in particular has done i think a terrible

. >> you've been getting into it a bit with larry summers who said kevin's conservative claim the cut will raise wages by $4,000, economy with 150 workers a claim workers will benefit by $600 billion or 300% of the tax cut. to my knowledge, unprecedented in tax incidents. i don't need to get why you and larry disagree, but there is something here about the fact that we used to think that a rising tide lifted all boats, and the argument could be made that corporations that make more are better for workers. we now think that a rising tide generally helps yachts. you're looking at a multiplying -- >> hasn't been helping in the u.s., right. >> are you sure the structural break between companies earning more and people earning more is solved just by lowering the corporate tax rate and applying it to more companies? >> i think that what we have to do then is rely on science and i think that -- even though larry had harsh things to say it's important to understand in public life people criticize you and you need to pay attention to them. they might say something to correct your future statem

he would fix it he's been criticized by several economists, including former treasury secretary larry summers, for his contention that the qe depresses business investment summers called it in 2015, quote, the single most confused analysis of monetary policy i've read this year the gloves are off a little bit. >> okay. >> on this particular man. >> war, goes to the president and said the fed waited too long rates should be much higher. >> he doesn't say that i'm with you, scott. >> kevin, have you seen the s&p 500, booby, look at the s&p. >> trump is a professional debtor he loves debt. he loves to take on debt and loves to restructure debt. >> that's why kevin is cagey on the implications his own policy. he sounds great as erudite as any person i read criticizing the fed which i would say with a lot to think about he never goes that next step and says, okay, therefore, ergo, here's what i would do. >> he'll never do it. >> do you agree because josh brought up excellent points yesterday. if you think about what he has said, the markets should be a little bit concerned about him coming in if h

brian: larry summers hates it kevin hasset defends it and the beat goes on. kevin, thanks so much. to you at home as well. the obama justice department has long been accused of steering settlement funds away from conservatives. now congress says they can prove it. the house judiciary committee claims they have a smoking gun email showing how eric holder and the doj intentionally diverted money away from conservative causes. >> the donations provisions were structured to aid the obama administration political friends and exclude conservative groups. >> attorney general jeff sessions has since put an end to the so-called slush fund tactics. ivanka trump opening up about how she deals with all the attacks on the first family. >> i would be disingenuous to say if ha that it didn't angeghts me any. i think though at the end of the day, the real people suffering in this country are not me and my family. we can take it. it's the millions of americans we saw across this country who are addicted to opioids. ainsley: the first daughter telling sean hannity if her family has to take a few blo

. >> larry lindsay is challenging paul krugman and larry summers to a 60,000 bet over the gop tax plan$10,000 a piece on three predictions he says growth will be higher under trump than obama, income inequality will decline under trump and ordinary wages will climb. take a listen. >> no, this is not a lay-up bet in the ordinary sense of the word, it's a lay-up bet because the tax bill is a powerful bill as is deregulation that's why we'll have faster growth >> i'll certainly be the first to recognize that i was wrong if we pass this tax cut, which i don't think will happen, and it is shown to have increased the economy substantially, i will have -- then i will have been wrong. i wouldn't wait up >> i don't blame larry for turning down the bet any economist who studies these matters knows this will be a good bill for economic growth. >> this is a clear cut bet for these three criteria should summers and krugman take it >> i say they should not take it while clear cut in terms of what will be measured, there's no way to judge causality from a tax bill that comes out. we could be in a goo

. >> and i would cite to larry summers, the new york times on sunday, jason fuhrman in the wall street journal, who are economists and i am not one. >> and who wrote the original paper that it's based off of. instead of getting into the academics of that, because i also wouldn't weigh into it, i think it brings up a more general point, a real problem in the tax reform discussion, which is, there's a big melding of the purposes of tax reform. if tax reform is to help grow the economy and make us more competitive. that's one thing. if tax reform to alleviate the tax burden on the middle class, that's another thing. it doesn't happen that middle class tax are the most pro growth reform and there's an objective we need to have tax reform that grows the economy and as steve said more of a corporate tax cut or internationally or expensing, but they like to use the talking points of middle class tax cuts and until the politicians are-- and i think this is my whole point overall, they're not willing to make hard choices, they're not willing to level the voters or recognize there are trade-offs