is it a vital safety net for low paid workers, boost for economy or recipe for uncompetitiveness?e been fierce on both sides. germany has a proved the national minimum wage. it will be phased in next year and benefit 5 million low paid german workers. let me show you workers here. germany's minimum wage will be reviewed every year. it's going to start 8.50 euros an hour. this is more generous than here in britain. currently 6.31 pounds an hour. that's euros 7.91 due to rise 6.50 in october. it's a full euro lower than france where minimum wage is 9.53. stephen great to have you on the program. let's talk about this. it has been a huge debate dividing politicians. many may ask why has it been so fierce to get this minimum wage passed in germany? >> because one side of the government chancellor merkel side fears if you pay people more money, german businesses will have costs raised and become uncompetitive against chinese businesses for example. the deal was with social democrats they would get the minimum wage they had been c campaigning for. there's the debate over the effects of

this position where they feel they have to move overseas because they have been put in such an uncompetitiveition. i define patriotism as having a great country and every day they make our country less great by maintaining the positions that they do and i see what happens overseas when countries allow themselves to become uncompetitive and if you want to push this notion that these companies aren't allowed to do what they do, then you can push for higher unemployment, push for these companies to be taken by overseas corporations that will have more money because their taxation structure is better and we'll lose more jobs. it's his position that's unpatriotic. >> here's the argument on the other side i suppose which is this. these companies have availed themselves of the fda regulating drugs, patent protection, our contract law. that they are gaining a benefit from being in this country and how dare they move because we help build them into what they are and now they are saying -- >> all of those things are what made the united states a competitive place to do business and day-by-day this adm

on top of that, china has to deal with bad credit, a real estate bubble, and uncompetitive, subsidized industries. many chinese companies cannot survive without government support. that's why experts are warning that surging economic growth figures may not last for long. >> let's find out how that news from china went down on the equities markets in germany with our correspondent in frank work -- in frankfurt. >> chinese growth -- better than expected. china, a very important company for germany, especially for the big ones listed in the dax. that sparked a recovery for the dax, something that people didn't really expect 24 hours ago. but now here it is because of the importance of china. people here on the trading floor also know that the state played a big role in that, with setting special conditions for the economy to grow, not necessarily being sustainable, not necessarily having the same result in the next month. but people at the moment are more than willing to forget the crises and overlook these problems in china and just enjoy the rising of the shares. >> let's look at those

>> so you've got an uncompetitive tax system.ve also got after a number of times the administration claimed they wanted to change this, it's become clear to everyone that's not going to happen. and that's why i think you're seeing this flood of companies. more than a dozen this year looking to relocate their headquarters overseas. >> i see. they're figuring this isn't going to change now until we get a new president, basically. >> right. >> okay. >> and the point is that what it allows them to do is invest more in the united states. and that's why this patriotism argument is exactly backwards. because what happens right now is there's basically a big tax on bringing money back into the united states to invest here. >> naturally they keep the money overseas. >> if they move the companies overseas they can invest in the u.s. without the penalty. they can invest more here if they change the headquarters location. >> what's interesting to me, mary, is these acquisitions are not taking place in the cayman islands or some tax haven roc

about this but i think frankly it's it's kind of a silly issue i mean china has already becoming uncompetitive because of high rising labor costs and that would happen anyway because it was shrinking population game china so you know if they were to devalue the currency by ten percent twenty percent it really doesn't have a big impact on it and of course also china's competition is not with the u.s. really with countries like mexico and nothing in tunisia so they on the margin have some impact on those countries but it's not really going to have any impact on us. that was victor she professor of economics at the university of california san diego time now for today's big deal. big deal time now with edward harrison and today we're discussing the brics new development bank china's rise and the role of geopolitics and development now i highlight of this topic over the past two days because it's clear the brics are trying to circumvent two institutions based here in washington d.c. the world bank and the i.m.f. so edward can you give us your geo political analysis on you know what the brics are t

turninghave xavier niel the french market upside down, which was uncompetitive.d that with the help a lot of very aggressive support from the regulators. and roaming deals. he comes here and vice t-mobile. he does not change the market dynamics at all. but he can shake things up, it is not clear quite how easy it is to do that without much rotter spectrum. >> deutsche -- broader spectrum. >> deutsche telekom is looking to dean iliad's noncompetitive. >> deutsche telekom is an important part of t-mobile, essentially they put the company together. it is going to be necessary for any deal to happen to acquire the company. they clearly favor the sprint offer. i go back to the notion iliad of where they're going to get the money to do a deal like this. it is not clear. .-mobile has a ton of debt it is not like they can leverage it more. than is a smaller company t-mobile. deutsche telekom saying they are not partnering with these guys. they have not engaged with them in any way. they prefer the sprint deal. >> fonts from you guys? -- thoughts from you guys? is a pirat

he arrived in the french market and turned it upside down, which was a quite uncompetitive market.me in and turned it upside down. he did that with the help of a lot of very aggressive supporters and regulators. he comes here, he buys t-mobile. he gets t-mobile. he does not change the spectrum landscape. yes, he could come in and shake things up. it's not clear how quite easy it is to do that. >> let's talk about that. i am getting some headlines. deutsche telekom, the current owner of t-mobile, is set to deem iliad's offer noncompetitive. cory, what does this mean? >> deutsche telekom is a pretty important part of t-mobile. they put this company together. deutsche telekom will be necessary for any deal to happen to acquire the company. they are saying they clearly favor the sprint offer. i go back to the -- iliad's notion of where they will get the money to do a deal like this. it is unclear. t-mobile already has a ton of debt. iliad is a smaller company than t-mobile. deutsche telekom saying they are not partnering with these guys, they are not engaging with them in any way, and

so the government, the role of the government in making us uncompetitive is pretty profound. that is one of the reasons i wrote the book. i think american manufactures can be competitive in a global economy if the government creates a level playing field vis-À-vis our competitors. so i have a whole laundry list of things i go through the book that talk about how we can do just that. >> host: the trade gap with china has resulted in cheaper consumer products for everybody and i guess that's a good thing but it certainly hasn't helped the american manufacturing. you almost never hear anybody complain about that. why? >> guest: well because most people have lost their jobs or are getting lower paying jobs. a small percentage, relatively small percentage of americans are participating in manufacturing. certainly substantially less than it was before so if you are a professional or someone who works in the service industry and you are looking at getting something for a substantially lower price because it's been manufactured overseas you are happy to go to walmart but as you know

to become economicallien uncompetitive? have more bridge collapses? i don't understand what their plan is. the states are doing their part including wyoming, virginia, even pennsylvania. governor corbett and i had a press conference with him. we raised the state gas tax. we cannot do it without federal help. >> infrastructure wasn't always a partisan issue. in 2005, president bush signed a major infrastructure law. 47 senate republicans voted for it. 217 house republicans voted efo it. they supported infrastructure spending when a republican was in the white house. this all politics? >> it seems to be ideology laced with police car. people who think all taxeses all the time, all revenue, all government spending is bad. this is a case where dwight eisenhower built every inch of the interstate highway system which runs through every state. every inch was paid for with gas tax money. i guess it's no longer any good. i wouldn't mind if somebody came up with a different idea. we could have that debate. whoever wins, wins. there is nothing on the table. the

kleinfeld is tackling both problems at the both time, and aluminum smelting by causing uncompetitive plants and locations where labor is too expensive. that's moved alcoa down the cost curve of the commodities and make the market more competitive even as kleinfeld takes down revenue numbers and listen revenue-obsessed investors and so what? it's nonsense as long as alcoa is doomed to be a second-rate company and alcoa has been a cause and lightweight multimaterial powerhouse. they have new kinds of aluminum that offers superior weight and strength characteristics that allows customers to create lighter aircraft, autos trucks and this is a huge displacement that involves kleinfeld dealing with the manufacturers at the highest level and it's all ceo to ceo and letting the procurements run the show. almost every single market that alcoa plays in has terrific growth and nonresidential construction or most important aerospace and it is the next one that is most exciting and that's the company that doubles alcoa's engine content and almost all of the commercial planes being manufactured ri

order and certainly isn't this inversion bill which ignores the root causes of these companies uncompetitivenessnd actually makes the problem worse. if the president bill -- >> in the meantime what do you do? >> hold on. it would force more american jobs overseas, not simply where they're located, where their official work is. >> congressman, i want to ask you a question on sanctions before we let you go. first, just how you respond as well, something mark cuban told our network this morning. he said basically the american public shouldn't back companies doing this. it's effectively going to end up raising tax rates for everybody. stan druckenmiller echoed that, saying the shareholders of these corporations that are paying more in taxes in some way, shape or form as this all moves forward? >> what i see is that american companies are struggling to create jobs here in america. they're finding they can't compete around the world with this broken tax code. they're doing what they need to do to try to grow themselves as a company. i think the best tax relief is not only fixing this broken code but d

i think one of the reasons we had a crisis where the banking markets were very uncompetitive to a world where mortgage finance became increasingly competitive. the problem is all of the competitive players whether the banks or gse's had guarantees. i'm a big fan of competition. i think competition binges consumer choice. we as a society needs to make a choice. we can either have extensive guarantees or you can have competition where there's wide choices for consumers. you can not have whole. if you have vigorous competition and guarantees, you will pay out at some point. also important to keep in mind that i will see a day where the housing market only goes up. we haven't fixed the housing business cycle. there will be a boom and bust again maybe sooner than later. they have to assume that we will see another bust again. part of the problem here to me is fundamentally what we've seen with all of these guarantees of creditors is we've had government regulation substitute for the market discipline you would see. the regulators who never lose their jobs are being responsible for overseeing

my campaign but you will like my administration and there is some evidence i think that it is uncompetitive but i think that there is some evidence after that campaign carter apologizes to his primary opponent in the campaign for the conduct during the campaign, but that it was not exactly a sterling moment in the life of jimmy carter and i think that he realizes that and regrets it. he takes the office as the governor of virginia recalled 1971 and famously says that racial determination is over this is in part what elevates him in terms of the national profile. "the new york times" picked up on that and the following day in the front page there is an article about the inauguration governor and what he said to the people of georgia. and within several weeks or actually a couple of months "time" magazine puts him on the cover as an example of a new south governor that is a post-racial governor and i have to mention that article but carter is the one who is on the cover of "time" magazine. carter almost immediately begins to think about running for president after being the governor of georgi

, and you're locking in that uncompetitiveness long-term.ifficult. i think what we really have to do, if we want to remain competitive as a country, is corporate tax reform. we have to have a -- we have to get out of this territorial system, go to global tax system. that's the biggest issue. you've got to look at rates second to that. look at the end of the day the united states is by far and away the best tremendous to be headquartered in. >> does the territorial system bring you more or less revenue long-term? >> it's got nothing to do with revenue. >> i'm saying about revenue to the u.s. government and taxpayer. >> well, it -- it's an argument of what ifs. so when the gao does a study of how much money they could make, if we don't bring it back is because the cbo will say if we give the tax holiday or we change the rules to a global tax system versus a territorial we lose x billion dollars of tax revenue but it's never going to happen. >> that's the point. we've got all this cash overseas, the cbo will score it as a tax loss, if you have

deal with the underlying fundamental driver of this problem, which is a tax code that makes it uncompetitive to be american. and so if the levin bill, which is the one i'm referring to, were to be adopted -- which i certainly hope it wouldn't be -- it continues to make it untenable for shareholders of a business to justify being headquartered in america. we will continue to see increasing number of start-ups and spinoffs and growth overseas where the governments choose not to punish their businesses the way we punish ours. so, mr. president, i think the answer is to deal with the underlying cause, not the reaction to that underlying cause. i don't want to see any more of these inversions. we're going to do that by lowering marginal corporate tax rates so there isn't a huge advantage in being anywhere else other than america, and to adopt a territorial system, a system where once a company pays the tax it owes to the country in which it's located, we don't punish them for bringing that money home and investing it in america. that's the answer. that's the solution to this. this is no great mys

medicare and medicaid eating us alive making our companies uncompetitive given how much we spend and how relatively little the japanese spend. so i asked, this is a big problem. a 800 pound gorilla in the room, what should we do and he said -- find out what works. and do more of that. that's all he said. find out what doesn't work and do less of o'that and he said, yup. for the folks who have been before us today, the department of defense, i said, i'll just keep saying it. we have an idea what worked because we've seen the department of homeland security go through this successfully. i asked him repeatedly, the department of homeland security. some answered and some didn't what can the department of defense take for aurks? and, say, and imtheir opportunity to get to refusal speed and carry on beyond that. you want to go first, please? >> senator, i'm somewhat familiar with the department of homeland security. one of the key elements is leadership. while the dod has leadership at the highest level, i think it's very important for the key tenants of accountability and audit readiness

they are able to get the planes cheaper, they can reduce their ticket prices, and that makes it uncompetitive. so what i want to do, as i mentioned to chairman, is find a way that perhaps we can come up with some language, as we move forward with this with the 90 days we have that can address that concern. it doesn't seem this is mutually exclusive. can you help me and give me guidance how we will be able to move this forward at the same time addressing the concerns of delta airlines? >> we don't subsidize. people pay a fee and pay for our guarantee to borrow money, borrow money through a bank. we are totally self-funding and self-sustaining. there is not a subsidy going from us to anybody else. i need to state that. two. in 2011, without congress asking us, we raised the fees multilaterally across the world and made it more expensive to buy aircraft, in particular. today foreign carriers all pay more than a comparable u.s. carrier would pay for the same airplane. they already paying a premium. delta think they should pay a bigger premium. they are paying more. they would like them to pay a l

repatriation or maintaining deferral for long periods of time is what i believe makes our tax system uncompetitive. so i do think that eliminating deferral so long as the rate, of course, was lowered sufficiently would be what i would be in favor of. the reason i say that is because the alternative approach, of course, is to implement some sort of territorial system, but i think those types of systems, to design them appropriately, would have to recognize instances where earnings were not subject to robust tax systems abroad and you have to introduce all sorts of exceptions and exclusions and base broadening provisions. by the time you introduce those, you're sort of right back where you started. so i am largely in favor of ending deferral and lowering the rate as a means of simplification. >> dr. merrill, unless you want to add anything, i'll recognize senator thune. was there anything you wanted to add? >> why don't you take mr. thune's question. >> very good. senator thune. >> thank you, mr. chairman. i want to thank you and senator hatch for holding this important hearing. thank you, all, for

repatriation or maintaining deferral for long periods of time is what i believe makes our tax system uncompetitive. so i do think that eliminating deferral so long as the rate, of course, was lowered sufficiently would be what i would be in favor of. the reason i say that is because the alternative approach, of course, is to implement some sort of territorial system, but i think those types of systems, to design them appropriately, would have to recognize instances where earnings were not subject to robust tax systems abroad and you have to introduce all sorts of exceptions and exclusions and base broadening provisions. by the time you introduce those, you're sort of right back where you started. so i am largely in favor of ending deferral and lowering the rate as a means of simplification. >> dr. merrill, unless you want to add anything, i'll recognize senator thune. was there anything you wanted to add? >> why don't you take mr. thune's question. >> very good. senator thune. >> thank you, mr. chairman. i want to thank you and senator hatch for holding this important hearing. thank you, all, for

the reasons we have a crisis as we went from a world in the 70s and 80s the banking markets work uncompetitive to the world of mortgage finance became increasingly competitive into the problem is that all of the competitive players whether it was the banks where the gse had a guarantee so when they went out of business the taxpayer was called upon. i'm a big fan of competition. i think competition brings consumer choice and efficiency but as a society we need to make a choice. we can either have the extensive guarantees that means you have monopolies and the stagnation that you have a sense of stability or you can have competition where this is the right choice for consumers. you can have the vigorous competition but you will pay out at some point guaranteed. important to keep in mind i will sesee the day people tell me the housing market only goes up. we haven't fixed the housing business cycle. there will be a boom and bust again sooner rather than later and any reform has to assume that we will see another bust again. part of the problem is fundamentally what we've done with all of the guar

we have a corporate tax code that is in many ways internationally uncompetitive. certainly don't really like to hear those kinds of rationales, especially with a company that makes so much money off of federal programs like medicare. but she's right. she's right, we have policy to take care of in that realm. >> i did ask her, by the way, whether these savings she cited for doing this deal would be pass ode on to consumers. she didn't specifically say, but harold ford, i'm curious whether you think this now motivates congress to do something about tax inversions, and if so, what? >> i hope so. and i share a lot of jared's eyre and concern about this, but on the other side of this, you have companies who are competing on a global stage with companies who are not having to pay the same tax rate as u.s. companies are. so, there's another side of the story. however, that doesn't excuse the fact that a lot of these companies are enjoying every other u.s. protection from our military to rule of law, et cetera. what congress should do in fr this and what the president and

airlines don't lose out, but at the same time doesn't uncompetitive relative to airbus.could put restrictions on the quantity of the financing, restricted the interest rates you are allowed to give on the financing, restrict who you are allowed to provide the financing to. be one of it will these messy congressional compromise is with a few hundred pages of text which tries to thread the needle. host: robin harding is the u.s. economics editor at the "financial times." thanks for being with us this morning. guest: thank you for having me. host: join us tomorrow morning at 7:00 a.m. eastern uphere's a we have coming later today. a look at mexico's efforts to boost gas production. will talk about the recent decision to allow private sector access to the state-controlled energy market. it that will be live at 1:30 p.m. eastern time. congress is back on capitol hill. the summit will eat -- meet later today. the house will be back this week. it will

we're becoming uncompetitive. it's a natural to fix. who would be against this? it's ridiculous!you know -- >> it's got to be fixed now and it's not going to be fixed. >> it's a major loophole. now if i'm in any other company competing, we talked about this with joe last week, you've got to do a deal, too. it's like you've got to call -- >> the problem -- jim, if you think everything's so deadlocked in washington, the question becomes, do you do a carl levin and block it, temporarily or not? >> yes. >> i mean -- >> i think that jack lew will go along with that. >> i'm sure. >> i've got tell you, sometimes you have the irs make a rule and sue the irs, good luck. >> i know. tell me about it. jim, thanks. see you in a couple of minutes. >> coming up on "squawk on the street" later today, reid hoffman, on squawk alley, preview of the major league all-star game. cal ripken jr., special guest. preview of the big delivering alpha events. "squawk box" live look-ins and interviews, guests including leon cooperman, bruce richards and former white house chief of staff, bill ldaily and more.

. >> i take -- >> first -- >> uncompetitive. >> senator?-saving new drugs, i don't mind that pharmaceutical companies make money. there are a number of ways to make owners pay for the corporate tax. llcs, a number of ways to do it, explore that to create incentives for businesses to manufacture close to customer here in america. >> all right. all right. senator ron johnson, appreciate it today. >> have a great day. >> i was thinking about it allot, everything that the government has built came from private sector jobs created and then you tax those jobs and then pay for the government employees and the infrastructure. >> i want to fix it, too. i am -- frustrated you used to sleep like a champ - then boom... what happened? life happened. stress. fun. bad habits. kids. kids. kids. now what? not milk. not sheep. not that. let's think smarter. let's get some science in here. let's build a bed. another bed? no, a smarter bed a entirely new sleep number bed that tracks your movement, your heartbeat, your breathing - sensors working directly with

. >> why you then don't start -- you know, it's not -- >> no, no, it's not uncompetitive in the last ten years. gentlemen, the president of the united states set a corporate tax bill to the congress four years ago to take it down 28% and what did they do? nothing. they did nothing with it. the president of the united states is on the record for the corporate rate being 28%. i happen to be of the school of thought that corporate america shouldn't be of one rate. on the individual side, you pay five rates why can't corporate america pay five rates. make it 10, 20, 30, i don't care what it is. >> jimmy, what the president is trying to do is -- he's trying to punish companies. if you're a company and you see an increasing amount of your revenue coming from overseas sources, it makes sense for you to try and maximize profits for your shareholders. it makes sense for you allowing the foreign entity to buy your operations and reincorporate so you don't get hit twice. we have the highest effective corporate tax rate in the world. even our three largest -- >> that's not true. >> it is true. >