tv Charlie Rose PBS March 30, 2016 12:00am-1:01am PDT
>> rose: welcome to the program. tonight jack lew, secretary of the treasury. previews of speech on sanctions and talks about the global economy. >> the united states role in the world is far more than our military. we are the economic leader of the world. people look to us for moral leadership. people look to us for stability. i think if you look at the period from world war to until now the world has changed a lot. a lot of the power we have economically in the world is rooted in what happened after world war ii when we had most of the world's gnp and we had the only solid currency in the world. we're now in a world where there's more competitive forces at work. i think the united states remains the natural leader for the next generations. >> rose: jack lew for the hour next.
>> rose: funding for "charlie rose" has been provided by the following: >> and by bloomberg, a provider of multimedia news and information services worldwide. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: jack lew is here. he is the u.s. secretary of the treasury, a role he has served in since february 2013. he was previously president obama's chief of staff. and prior to that he was director of the office of management and budget, a role that he also played in president clinton's cabinet. on wednesday he will clever a speech on the impact of u.s. sanctions paul z he will deliver that speech at the endowment of international peace in
washington. they were integral to reaching an agreement with iran to suspend their nuclear program. sanctions policy also playing a role in the fight against terrorist organizations including the islamic state. for all those reasons and more i'm please to do have jack lew back at this table welcome. >> great to be with you charlie. >> rose: give us a sense of what sanctions have achieved and not achieved in our history. >> charlie, if you look a sanctions, they evolved dramatically, really in the last ten years from what they were before. they started out as kind of blunt instruments. and an example is an embargo on cuba, cut off a country. if you do it alone and you do it without the support of the world it doesn't work very well. it doesn't change policy. the purpose of sanctions is not just to inflict pain it's really to give the government a sovereign state to change its policy. look at what we've done in the last ten years, iran is obviously a central example. by working systematically to bring other countries along and
to work as a global community and to the pressure on iran, it actually changed iran's calculus. iran decided to come to the table and to negotiate to remove its work, to back away from it's work on a nuclear weapon. and in return, we have agreed to lift nuclear sanctions. now it's not an easy thing to do. it's not easy to say a country that supports terrorism, we're going to relieve the pressure we put on them. how did we put the pressure on them? by getting the whole world to agree it was a threat to the region and globe for iran to get new clears weapons. we got a diverse range of countries including china and india that are very dependent on iranian oil to cooperate with us. it was only because of the pressureworld standing togethere united states at the lead that iran felt the pressure in a way where they ultimately were willing to negotiate a way to
the nuclear weapons program. what we've learned from that is how important it is to work on an international basis. how the appreciate is greatest. we've also learned how important it is that when you have an agreement, that's predicated on change your policy and get relief from the sanctions, there has to be relief from the sanctions, otherwise no one will ever respond to a sanctions regime by changing their policy. >> rose: the argument is made it will be very very difficult if iran violates the policy that they've agreed to or their behavior they have agreed to, to put the sanctions back together. because it was so difficult to put them in place in the first place. >> actually i don't think that's correct. >> rose: that argument was made. >> the argument is made but one of the really important features of the iran agreement is that we have retained the ability to snap back sanctions, both u.s. sanctions and international
sanctions. >> rose: can you get them to agree. >> the way the international snap back was constructed, if iran violates, and if that stop the snap back.y effort so it is very much incumbent on iran to keep its agreement. now, i am very much of the view that we have to keep pressure on iran in areas like the support for terrorism. >> rose: to change their behavior. >> to change their behavior. these past few days, we've designated entities in iran and around the world that have supported iran's development of missiles which we believe are unacceptable which have supported iranian airlines for the irgc. >> rose: wes were not snap backs. >> these were new designations under non-nuclear sanctions. the nuclear sanctions are lifted the other sanctions stay in place. your question is could the nuclear sanctions come back if they violate, yes they could. >> rose: and the community would agree, community of nations together. >> it would have to be a real violation. what we can't do and what i've argued to congress is you can't in the name of wanting to
pressure iran on other issues just bring back the nuclear sanctions as if you didn't have an agreement. the agreement was iran backs away from the nuclear program and the nuclear sanctions are lifted. we've done that. we did it formally and we did it pie giving guidance to everyone who does business with iran. we've also made it clear the other sanctions stay in place. and you know iran is not the only country that's subject to sanctions right now. we have a very important set of sanctions in place with regard to north korea and russia. with regard to north korea here's another lesson on the
in the international community. >> rose: senator kerry just returned from moscow trying to work something out with vladimir putin about sierra at the same time we're imposing sanctions not only about russia but some of the leading friends of the president. >> look. the reality is we are working with russia, we worked with russia on the iran negotiation. >> rose: they were very helpful. >> they were helpful. we're working with them trying to change the conditions in syria. but we're also making it clear to them that their aggressive actions to take crimea and to move and eastern ukraine are unacceptable. the sanctions we put in really reflected a highly sophisticated way of putting pressure on the
look, whatever you think about the agreement we're getting, and there were lots of differing views in terms of the benefit to the united states and where they would truly inhibit iran. but they also said by eliminating these sanctions, you're giving them at least a hundred billion dollars of which they can use for an engagement in all these behavioral thing that we object to.>> well, first, the number s not as big as people think it is. it's not really a hundred billion because a lot of that money is locked up and can't go back to iran. there's maybe 50 billion that theoretically could go back but that's also the money to do international trade, they have to keep foreign reserves. iran's own estimate is maybe there's 30 billion they could bring it. they've had difficulty reengaging with the global
financial community. we actually made the case that the sanctions are lifted and been clear that that money is money that they do have access to. we've also made clear that if it goes into the wrong hands, if they support terror, if they support regional destabilization, we reserve the right to go against that separately. >> rose: what do you think. >> one of the things i made this case to congressxd and i truly believe, at the height of the sanctions program on nuclear sanctions, they were still supporting terrorism and regional destabilization. those sanctions didn't stop all of iran's bad activity. so the notion that you can take it to zero wasn't even true under the most severe sanctions program. what we know, what we know is that iran's domestic needs are enormous. hundreds of billions of of domestic investment that they need to get their oil industry able to produce at historic levels. to pay their own military that haven't been fully paid because
they don't have the money. to provide services to their citizens. everything we hear is that the domestic needs are enormous. i am going to do everything i can to keep track and to take action if we see money going to malign activities. but what we got out of the iran deal is a critical importance. we got iran to back away from all the pathways to developing a nuclear weapon. they have a much smaller and peaceful nuclear program. we will see if they cheat. we will take action if they violate the agreement. i think the world is a safer place. i think the region is a safer place with iran backed away from the nuclear program and the sanctions are put in place to accomplish that, did their job. one of the points i'll make in the1i5/o speech is if you want sanctions to work, if you want sun trees to change their be havior, when they do what you're telling them to do there has to be a response. there's no person or institution that will respond the way you want if that doesn't happen and
sanctions won't have any effect. >> rose: is this sanctions a policy you will announce in this speech and add to our understanding of sanctions also part of this argument that the united states has many arrows ear available to it in terms to response to practices that we don't approve of and we object to. it's not always necessary to make it a military response. >> one of the thing that i think is very important is we have developed these economic sanctions as a way to give the current president and future president tools to choose what tools to use when they need to confront situations that are just unacceptable. i believe that military force should be the last not the first resort, and having a variety of options i think is critically important especially when there's powerful and effective. one of the thing we have to be careful about is when we talk about the use of force we understand it has consequences
and it consequences when you put sanctions in place. it has consequences in terms of the direct impact and indirect impact in terms of how other countries in the world fare economically. we can't shy away fromt3 using sanctions because it willow down growth but we can't do it frivolously either. we have to do it in a way that's clear headed. we can't a treat it like it's a light treatment. it's a serious step and something that has to be guarded in order to have it in the future when you need it. >> rose: one of the criticisms of sanctions in the past has been you're not hurting people who make decisions in country, you are hurting the people who live in the country. >> i think the broad based sanctions has that problem and it also hurt our own country cutting us off from trade and commerce. look at the russia sanctions. they're very argued. they're argued at the centers of power or the decisions are being made and they're targeted at the
key industries particularly sectors that are highly dependent on technology and other collaboration with the west like finance. i think what we've done has caused a real impact. i'm not going to pretend the current economy in rush is due to sanctions. without lower energy prices, the sanctions have had a real impact. it's not low energy prices that are making it hard for russia to obtain financing internationally. i think that what we've done in the case of russia actually prove the point i'm making. there were some who at the time we were designing the ukraine russia sanctions, we're saying do everything all at once. if we had done everything all at once, europe would have been very very hard pressed to go along with us because it would have a much bigger impact on europe economy than the u.s. economy. by doing it in an imincrement way or targeted way we've kept a unity between united states and europe that i don't think russia
expected. in the case of the iran sanctions so that china could adjust over a period of time. it's easy to stand up and say use all your ammunition right at thexd start but you shouldn't do it at war or sanctions. >> rose: you tighten the pressure. >> you tighten the pressure and ratchet it up or down if there'e great change in south africa. >> i think economic pressure did lead to the change in south africa. and it took a very long time to put an international consensus together. i think that things like the jackson vatican amendment helped to change russia's policy on the human rights policy, particularly with regard to soviet jews. each, we learn from each of these that there are ways to change how countries think. what you can't do is you can't mandate what another country
does. you can't change the way they make their decisions. rpgge the i. you can change the structure. and i think that by doing it internationally, by doing it in a way that shows will go up and down depending on the response, we've made it clear that there's a rationale society decisions to be made. now, obviously in the case of russia, they've decided they could endure a lot of pain. >> rose: they have. >> i don't know how long that will last. but what we've also said if they continue the sanctions just by virtue of time get more severe over time just because time makes them out. they won't go away unless russia changes policy. >> rose: so far you've not seen a change in russia's response because6x of the sanctions imposed. >> we have seen a change. we haven't seen a complete correction. what russia needs to do is implement the mensa accord. >> rose: they say the same thing we need to implement the
accord. >> they're the ones that have to take actions to do it and obviously ukraine has to take some actions as well but ukraine has shown willingness to take action. >> rose: the government of ukraine. >> yes, the government of ukraine. it's hard to say what russia would have done absent sanctions but i think it's clear they're trying to explore a way not to get worse. >> rose: help us understand how it looks. if you're aountry that impose sanctions and you're cut off from international markets and you're cut off from international sources of financing. give us a sense from their point of view what it is that does to their economy that might change their policy. >> well, it affects the economy both in the financial and the real economies. >> rose: can't sell your products. >> if you can't acquire the technology you need for a country like russia for them to doñi the kind of deep arctic drilling for oil they need, they need international cooperation. it's a big deal to their economy.@mright now with oil pr,
you might think that that's a thing of the past but arctic drilling is aboutocáru theñi fut about the current. it's long term planning. if you need to issue bonds, you wanted to do it in dollars or euros, your ability to do so is limited. we've made it very much -- we made it much more cumbersome for them to do it legally and because of that there are some who won't, an effect, there are things banks are said told they can't do and then there are other thing they choose not to do because they don't want to get closed. >> rose: how much violations have there been of the sanctions against russia and the sanctions against iran before they signed the nuclear deal. in other words were people willing to risk penalties by, because there was money to be made and economic advantage by carrying on trade. >> one of the things about the russia sanctions was not creating spaces where we or
another country would step out and another country would step in, to moveodujáwouldn't have wl backfill where it's, without concerted unified action there's relief essentially because you deal with country y instead of country x. by working closely with our partners around the world we've limited that quite considerably. >> rose: how sanctions from china. in other words, how often does the chinese government support you in the imposition of sanctions. >> well china has a view that the multilateral sanctions are the right way to do it and i think working with us in the united nations on the north korea sanctions, it was a very important statement. enacting sanctions in the u.n. is step one. we've had our senior officials in china meeting with the chinese about implementation. i think that's very important. they work with us.
>> rose: sanctions against iran and sanctions against russia. >> they worked with us on iran and they were part of the p5 plus 1. there have been chinese entities that have been violating and we've taken action. but in general, they have been part of the international effort. >> rose: at the extent you would prefer they be part of the international effort. >> i think thati0 the fact that they cooperated with us< on te oil sanctions against iran was very important. i think the fact they're part of the international effort on north korea is critical. are there things that they could do to toughen up on how they look at what happens when their economies, of course. that's what we're working on now. >> rose: i add a chinese official once say to me look if you provide all the oil we get from iran we'll be prepared and
certainly enthusiastic about supporting you in a sanctions effort. but we need oil to run a burgeoning economy. >> over the last five or six years have been similar in china and countries like india where they share the conviction that iran has to be stopped from having a nuclear weapon. but they need to hear that we understand the impact on their economy of not buying oil from iran. >> rose: what do we do to help them find oil. >> well obviously developing their own resourcesw3 both natul resources and renewable technologies is important. making, we have actually done our part in increasing the global supply of oil because united states isn't buying as much oil on the world market. and that makes it easier. so our energy strategy, growing independence in energy has actually made it easier for countries like china and india
to have choices. what i was saying a few moments ago about incremental steps, understanding that you can't do it all at once, that you have to phase it in was critically important. because they couldn't just drop like a rock. there were some in the united states who thought it was somehow less tough to do it incrementally than to just shut oil immediately. i believe that if you had done it immediately, you couldn't have kept the global consensus. what put the pressure on iran that brought them to the negotiating table was that unity. so i actually think by doing it in a smart way and doing it in a way that brings the world together, we were# tougher. >> rose: donald trump and others have said in the first day in office they're going to unravel the deal. is that possible and can they do that if they are elected president. >> ixd think the iran deal reflects the most problem we've made in decades of stopping
something as dangerous as -- >> rose: can a new president unravel a deal a previous president made. >> it's very hard but elections matter and i think that it is very important that we continue to make the case for the importance of the iran deal. and sticking to it. i know i talked to members of congress all the way who are increasingly understanding that we've accomplished something very important. now they still don't like iran's behavior. there's a growing recognition that we have stopped1 iran from developing a nuclear weapon. i think anyone who tries to reverse that is taking on something that would be destabilizing and dangerous. >> rose: we have a congress controlled by republicans at this point and they have chosen not to eliminate the embargains against cuba.
there was questions at some point whether they might impose new sanctions against iran during the negotiations of the deal which i think the president said would do great damage to the negotiations. >> we've continued to have that conversation. we continuepnññ believe that we have to be quite focused on implementing the sanctions on terrorism and on regional destabilization. but trying to put in place a new sanctions regime that replaces the nuclear sanctions would basically be breaking our word. the united states has to have its credibility in order for things like sanctions to work. iran backed away from its nuclear program based on our commitment to phase down this nuclear sanctions which is exactly what we did. we neverñi told them the other sanctions were going away. they can be annoyed about it but they cannot say that they were misled about it. if there were legislation that put the nuclear sanctions back in place or lookedçó like we wee trying to do that, that's a different story. >> rose: why are you making this speech at this time to a
very prestiges forum in washington. >> i think this is a very important moment. we've been through seven years now in this administration, several years in the previous administration an important period of developing policy in this area, perfecting it and we've learned a lot. i think it's very importa we share that knowledge. we what i out a theory of how to make sure that these tools are powerful today and tomorrow and that they work four years and 40 years from now. i view it as a way of taking what we've learned and just putting it out there in a very clear way. >> rose: is it also the thing i said earlier, asking for recognitionstates has the most t global policy in the world has influence far beyond its military. >> i think that the united states role in the world is far more than our military. we are the economic leader of the world. people look to us for moral leadership, people look to us
for stability. i think that if you look at the period from world war ii until now, the world has changed a lot. a lot of the power we have economically in the world is rooted in what happened after world war ii when we had most on the world's gnp and we had the only solid currency in the world. and we're now in a world where there's more competitive forces at work. i think the united states remains the natural leader for the next generations. but we have to speak to that. one of the things i'm trying to do -- >> rose: we have to be willing to accept that leadership role. >> one of the things i'm trying to do in the remarks i make is to caution about overreach. and one of the things that i worry about is because sanctions have been successful, there's a temptation just like as i was saying a few minutes ago in the cases of the russia sanctions to go to the highest level too quickly. we have to be careful not to do thatn every occasion. it has a real impact around the world. we have to use this judiciously, we have to show we understand the impact.
we have to be willing to do hard things but we can't do it in a way that doesn't reflect that understanding and particularly if we do something like secondary sanctions where it means projecting our influence around the world in a way that is for some countries very challenging. >> rose: how can you say isil is having a direct impact what they do. >> let me take a minute. it's a complicated story because isil is a complicated creature. when isil started its seizing of territory in iraq, what did it do? it would capture a town. steal the money from the bank and it had some money. then it developed an economy on the ground. what have we done?jointernation. we've worked with the government of iraq so that iraq has closed 90 banks in isil-controlled territory. they've shut down much of the
money exchange business. and we worked with our military to identify what are the sources of income that come in to support isil and there's military action that is attacking both their financial centers blowing up banks of money. >> rose: we had one of their principal financial officials. >> yes. in the case of loyal we've had strikes that not go with the wells but at the truck that move the oil. if you look at what happened just recently where an isil leader had to cut the pay to isil fighters in half. that shows you it's having an impact. there is a strain. isil has a lot of weaknesses apart from being criminal and immoral. they need a lot of money. if we can shrink their access to money, we make it harder for them. we have more work to do. i don't want to suggest we're done. but we have to use all of the leverage we have.
sanctions are one but it's not just sanctions. >> rose: when we're looking at what they're doing are you alarmed they may extend their strategy around the globe looking what happened inur brussels and in paris and looking at the cells of money they have to do what they need to do. >> the truth about the horrible events in brussels and paris is it doesn't take that much money to do things like that. you've got to get at the heart of it and understand why they are reaching people in these places and find the people who are doing it and stop them. >> rose: it's a hard challenge though. >> it's been very hard. we worked with our counterparts in belgium and france to make sure we share information where we see money is moving before or after events occur, we have the most sophisticated capabilities in the world. one of the challenges, the rest of the world needs to pick up
its game and develop that kind of sophisticated set of tools. we can't watch everything in the world. we can share what we see. i think that the response to horrific acts like this have to be with determination, not to let the terrorists get us off of what we have to be about which is supporting our values, living our lives. we have to workday and night on the military front which we're doing in many places right now on the financial front to cut them off both the leaders and the resources. but we can't let them stop us from leading our lives. >> rose: back to cuba for a moment. congress passed those economic sanctions and congress will have to change that policy. do you see any receptivity. >> it's interesting. first i think we have worked i think very much within the law to do what we can do to
normalize and open up. but we've made clear without a change of law without changing the embargo, without changing the libertada we can't make it truly normal. i'm not going to sit here and predict when congress might do something but i think a willingness on the part of many, not everyone but many to recognize the policy the last 50 years hasn't worked. this is a chance to truly open up a way to change cuba. >> rose: those peoplemí who voted for sanctions, those people who insist on sanctions would say let the cuban government change their policy on human rights and political prisoners and a whole range of things and we would be proud, we would be pleased to consider taking off the sanctions. >> you look at the world under the policies in the last 50 years. where did it leave us. it left us in a place where our closest friends in europe and canada passed laws telling their businesses you cannot comply with these sanctions.
in latin america whether it's governments of the right or the left, we were getting isolated from them more and more. i think that we're in a place now where by increasing contact with cuba, cuban people are going to be exposed to the american people. they're going to be exposed to american values to american media. that is going to be a force for change. we weren't getting it done the old way. it just wasn't working. >> rose: what else do you have to do to make an effective policy changes in the future. what tools do you need or do you think you have everything you need to do because of the relationships that were developed and the strategies developed and executions developed against iran. i think we inñr the united stats have very sophisticated tools. that's not to say we won't discover things we need in the future but we have a lot of authority. i think as i look around the world i alluded to this a moment ago. most otherry finance ministers don't have tools as
sophisticated as our treasury department tools. there's a need not just in developed countries but in emerging economies where a lot of money can move around to help build those capabilities. and we do work with the imf and the u.n. >> rose: so those sanctions -- >> so they can watch what's going on in their economy and take the actions that are necessary to stop money from>ñi moving. so we're working in a concerted way to provide technical support to build these systems. it's not glamorous stuff or stuff on the front pages but if you want to take action against entities that are doing bad things you need those tools. >> rose: finally this, with respect to iran i clearly hear you say because of the in an back provision if in fact iran violated the provisions that they so far. >> so far. >> rose: have fulfilled. that does not include what they're doing on the ballistic
front. if they violated everybody who was participating in the sanctions program would sign up again. >> what i'm saying is the way it was set up as a technical matter gives us the ability to exercise a veto anyone wanted to block international sanctions coming bag. it was very well negotiated. >> rose: we have a veto so they cannot block. >> it has to be an affirmative action to stop it. >> rose: they still could stop i it though but it has to bean . >> if there were a vote at the u.n. we could stop that by vetoing the action is what i'm saying. it would require affirmative action which we have the ability to veto. it was a well negotiated part of the agreement. i hope we don't have to get to that and test these processes because the world is a safer place for iran complying. that was point of the joint comprehensive plan of action in the first place. and none of this even today is being done based on trust and faith. it's being based on monitoring
and verification, on being able to see what they're doing. >> rose: and sophisticated technology to measure. >> sophisticated technology. >> rose: there's a g20 meeting coming up in china. what should be the agenda of that meeting. >> i think there's many items on the agenda but from an economic perspective i think that dealing with the challenge of sluggish global demand and sluggish growth is something that we talk about. >> rose: what are the demands. >> as we emerge from the global economic crises that started with the financial crises here,d you know, we've seen many economies not getting to the kind of robust level of growth that you need. >> rose: that they had. >> or that they had. >> the united states as much as we want to do better, the united states actually has done very well compared to the rest of the world. >> rose: but as compare to the rest of the world, people who dream of growth rate here, a 3.5%.
>> the truth is for us to continue growing where we are against international head winds that are pulling us down means that the core of the u.s. economy is doing actually better. we're probably losing half percent of gdp a year due to international pressure. >> rose: that's because of the lack of global demand. >> that's right. >> rose: principally china because it's overcapacity. >> no. china's part of it. i think you have to separate, look at the world and kind go around the world. china's growth is slowing down. that shouldn't be a surprise to anyone. china was in the kind of rapid gloatñk -- growth period coming into its own as a major economy. it has to slow down. >> rose: you can't maintain double-digit. >> you can't maintainxd double-digit growth forever. their challenge is to manage the hardest transition the country's made economically going from a tightly controlled system. >> rose: going from an export -- >> to a consumer driven economy. the good news is i think they
understand intellectually what they have to do. the five year plan they put out reflects that. >> rose: what is your judgment and assessment of the five year plan. >> i think that there are many important steps that they've committed to that now have to be implemented. take something like excess capacity. it's terrible for china's economy to have millions of people working in steel and aluminum producing things that have no where to go. it's shrinking their economic potential even though it's employing people. they've committed to shutting down excess capacity but as we know -- >> rose: primarily what, steel, shipping. >> steel is probably the single biggest. >> rose: coal. >> coal, aluminum. the input into an industrial economy. it's hard. i mean if you just imagine the united states, if you were going to close down factories that employ a million and-a-half to two million people, that would be a big hard thing to do.
they have no choice. if they don't do that, they are going to just choykegãon -- choe on the overcapacity. >> rose: they say what the plan is. >> the plan is committed, you can do more but the plan is committed to very significant steps. they now have to execute against the plan. that will require having the political will to withstand the bumpiness that comes from doing hard things. i think china still has a lot of capacity both in terms of their economy and in their understanding of what they need to do. there was for a few months people were saying china's out of tools. i think that that is not the case. they have a lot of tools. they have a lot of foreign reserves. they have a small deficit in terms of the federal government budget . >> rose: are the tools more in fiscal policy than monetary policy. >> what we have stressed to them is they have to use all the tools. they have to use fiscal policy
and structural reforms. i think the five year plan reflects a much stronger commitment to fiscal policy. we think that the more they emphasize growing consumer demand, the more it accelerates the transition they have to make. but using their fiscal policy tools is critical. we also made it clear that they cannot resort to using exchange rate policies to gain unfair advantage. i think the good news on that front is coming out of the shanghai g20. we had the strongest commitment that we've ever gotten in one of those agreements by all the g20 to refrain from competitive devaluation and to coordinate so we won't surprise each other. >> rose: are they more receptive in terms of currency issues now. >> i think they understand what a sensitive issue it is. i think there also is an increasing concern that these kinds of policies could be made in many different capitals and if you get into kind of a war of competitive devaluation, what you're essentially doing is fighting over a shrinking pie. we need to grow the global pie.
one of the things coming out of that same g20 was a commitment to use all policy tools. monetary, fiscal and structural. around the world there's a bunch of countries that have this space to use fiscal policy more aggressively including in europe. >> rose: speaking of the united states and4' the tools tt we have, are you pleased by the actions of threats seeming to slow down the number of interest rate changes. >> as you know i don't comment on monetary policy. we have an independent fed. i think my job is to concentrate on the core of the u.s. economy, look at the core of the u.s. economy. the real economy has been moving ahead steadily. we've just seen the latest gdp numbers shown at a macro level. we're seek it in car sales and household formation and in housing activity. we're certainly seeing it in employment with 14.5 million
jobs. >> rose: after 2008 business was needed with confidence. they had money to spend but confidence do you see that on the part of business being willing to increase their inventory, to engage in expansion of facilities and that kind of thing. >> we're sitting here at the end of the first quarter of the year that's shown. >> rose: just announced the figures. >> a lot of nervous ness in the market. you look at the weak global demand. there's a lot of things you could worry about. when you look at the u.s. economy, i think we've shown that we've reached a level of strength that'sv; quite real and sustainable. the u.s. economy is 85% domestic and most of that is consumer driven. if you continue to have a strong consumer, you continue to have a strong u.s. economy. that's why i'm focusing on the
global situation because i think that having a stronger global economy right now is where that confidence needs to come from. >> rose: what do you see happening to inflation overlpñ s year and the next. >> inflation has depending on which measure you look at, been getting closer to the kind of 2% target that people have been looking at. it is not showing any signs of exploding. i think it's a good thing personally. if there were more pressure on wages right now because one of the problems we have in our country is the disparity of incomes and the way to solve that is for there to be some increase in wages at the middle and lower levels. >> rose: you mean raise the minimum wage. >> raising the minimum wage is something we should do as a government. >> rose: what's your number for raising the minimum wage. >> well we've been supportive of the proposals that are in 13.
>> rose: jf but not 15 as some cities have imposed. >> we are supportive of efforts to increase the minimum wage if we can't do it at the federal level we're supportive of actions being taken at the state and local level. i think that what we've seen from the states that have moved is it hasn't hurt them. they haven't lost competitiveness against other jurisdictions. is basic proposition that if you work full time in this country you should not be in poverty. it's something i don't know how you argue against. we have to raise the minimum wage to get there. but we also have seen a period of slow real wage growth which in the last few months has been shown some kinds of ticking up. so your answer is there's somew3 sign of it moving but i think it's been long overdue. >> rose: beyond wage policy, what is the second and third and fourth best way to deal with income inequality. >>óu i think if you look at what we could do to grow the economy,
to create more jobs and better jobs, it clearly starts with things that are pretty straightforward like infrastructure. we have a crumbling infrastructure in many areas. we have people who could go to work building the infrastructure. we could be more competitive in the future and we're talking about low interest rates which are the perfect time to make long term investment. so it's something we need to keep pressing for. we also know there are a lot of jobs open in this country but people don't have the skills they need to do the jobs. so when we talk about things like community college education being free for those who work it's a way of getting the skills you need for the economy of the future so you don't get stuck in the economy of the past. when we look at the tax code there are a lot of things in the tax code that still advantage wealth over earned income. >> rose: will we see tax reform before this administration is out of office. >> i think tax reform on the
business side is something that it's something critically important hat we do. as optimist ic sitting here. we have a business tax code which has the highest statutory rates in the world at a rate that's average and companies are leaving the united states to avoid these tax rates. >> rose: we have to reduce the corporate tax rates. >> we need to close loopholes and stop inversions. >> rose: let's talk about inversions for a second. in terms of those companies like apple and others who have huge amounts of cash overseas, and who say if we had a different tax policy, we'd be prepared to bring that money back home and perhaps employ to create jobs. >> look we have made a proposal which actually is not that different in structure from some of the proposals made by
republicans to deal with that through international business tax reform where we have a minimum tax on income wherever it's earned. and a company would be able to get credit for taxes they pay overseas and pay a reasonable rate to repatriate their money or leave it overseas it's up to them. we would use the money that you get from that one time revenue bringing money home to pay for infrastructure. so we actually bring together two things that would help our economy. i thought that there was a very promising discussion last year. i had discussions with paul ryan chairman of the ways and means committee. i think the political climate made it not just at the time there was a willingness to do it but it needs to be done. >> rose: finally there's trade. will we see tpp. >> we saw the trade promotion authority pass through congress. that was a very important thing. i think that we now have a tppwhich would open. goods and services that also
would take the standards that we hold dear in the united states and apply them in markets aroud the world. >> rose: i think it is opposed to what the president has proposed. >> i think if you look at tpp -- >> rose: in fact i could say both democratic candidates. >> tpp is profoundly in the interest of creating american jobs. >> rose: why aren't democrats in favor of it. >> i'm not going to comment on the politics. i'm going to stick to what we gain. we know that the growth in demand is in the markets like the markets that are covered by tpp. let me give you an example of something that shows how important it is. in country like vietnam is actually reforming its labor laws in order to comply with tpp. now countries around the world if they pick up their standards in labors and pick up their standards in environmental issues that makes our products more competitive and things we hold dear as values become more widely held around the world.
>> rose: but the point you just made, if you look at the countries that tpp covers that's where the economic growth of the future is coming from. is that what you said. >> population growth. united states is going to remain one of the powerful drivers of the global economy. but i've said over and over again over the last three years, the world cannot count on the united states to be the sole driver of the global economy. where there are burgeoning populations around the world, economies that are growing at a faster rate because of their place in the development cycle. we want to be part of that. we want to be selling goods and services there. we want them to be also abiding by the standards that we think make the world a better place. that has the advantage of making more competitive. >> rose: when i was in china over the weekend one thing you constantly heard is this idea of china's economic growth and the five year plan that it is not a zero sum game for the united states, that the united states
ought to be invested in5% chinas growth. as an economic powerhouse. >> we have set that publicly and privately that it's in china's interest for the united states to do well and it's in the united states interest for china to do well. one of the things about a country kind of taking its place as one of the largest economies of the world is responsibilities go along with that. so having china at the table, embracing standards like the ones we're discussing actually is an important thing. >> rose: when will china have the largest economy in the world. >> depending on how you measure there are different answers. to me the question is in some ways not really that material. we in china are the two largest economies in the world. together we have more to do with the direction of the global economy than any other country. so it is a profoundly important economic relationship and strategic relationship. and we have to be able to work together on things where we agree and challenge them and
confront them on things where we disagree. we have to have the personal relationships to do that and we have to stamped by our convictions. >> rose: will it happen in the next two years. >> i can't tell you charlie. you know, if you look at the size of china's economy. it's interesting. look at china's economy and what it means to the world. it is not at the moment integrated into the global financial markets the way say the u.s. economy is. the main transmission channel for china's economic growth to the rest>m of the world, when china slows down it stops buying raw materials. >> rose: commodity prices go down. >> correct. now, china has to stabilize at the sustainable level of growth which mean that china needs to stick to its reform agenda. i don't think china's destined to hard lining. i think china -- >> rose: it's an economic agenda not a political agenda. >> it is an economic agenda but economics and politics are in
any system closely connected. >> rose: before i leave that, two quick questions. one the commodity prices÷ demand. what has to happen? is it simply the chinese economy as a principal driver of demand around the world has to be stronger in order to see commodity prices come back up. >> look partially we've got to recognize there was a commodity super cycle which was reflecting unsustainable levels of growth. countries that managed to that knowing it wouldn't go on forever are stronger than countries that thought it was the new normal. we're going to enter a period where if we can successfully increase global demand and global growth it's not just china, it's china, japan, europe, there's lots of part of the tlobe where demand needs to be increased. you got to look commodity they by commodity. and oil obviously[y3, is a majr commodity and markets have been very sensitive to move there. but in that market, we've seen
two things happening at the same time. we've seen supply growing at a time when demand was softening. and that will work its way. >> rose: that's not a global economy. >> markets go through cycles and that will work its way through. >> rose: if britain leaves the european union, what impact on the global economy. >> i don't think it's good for the european or the british economy or the global economy. >> rose: what is the impact. >> the impact is partially economic in terms of the flow of trade and economic relationships. it's partially geo political and strategic in terms of holding on to unity and in a world where one of the things thatthe econoy of geo political risks. it was interesting at the g20 meeting, the risk was something people were talking about. >> rose: they were talking about in china when i was there. >> is that something you can measure with an economic index?
no. but is it clear that when you increase the level of unease, it has an economic consequence? yes. i've seen all kinds of estimates of what it means to the british economy and the europe pain economy. europe's had a hard time struggling to get to a sustainable rate of growth that's anywhere near strong enough. >> rose: and huge levels of outunemployment. >> huge levels of outunemployment. anything that would move that in the wrong direction is bad to the economy and politically destabilizing. >> rose: this comes from lee manuel maranda. the hamilton going to remain on the hundred dollar bill. >> we were going after a hundred years put a woman back on our money. i've been so moved by the amount of response. millions of americans have sat around tables like this talking about american history and what women have done to contribute to america. >> rose: there should be a woman on a major bill. >> what i made clear time and again is that first and foremost
we have to value security in our currency. so we're going to have to do this innovate order that bills need to bed modernized to besui safe from counterfitting. we can't wait. we've waited a hundred years. there's a representeddation the contribution women have made. >> rose: why don't you put it on the $20. >> it'sp>> rose: not as enthusc about -- >> let me make two other points. every been clear from the very beginning alexander hamilton is one of my heroes he's not leaving our money. we'll put a woman on the face of our currentity. it is not just about the $10 bill, this is a whole series of 5, 10 and 20. going around the country what's striking to me no one can tell you what's on the back of the $15 bill, $10 or $20 bill. this is not one square inch of
one bill. how to we take the buildings off on the back of the bill. >> rose: how much do you need to study this. >> we're getting lot of responses. it doesn't take a lot of imagination how does the lincoln memorial play a role in our history. when you ask a question of the treasury department not many people know one of the major demonstrations from women's right to vote was in front of the treasury dupe. a -- department. a lot of ideas. >> r?sé: next week. >> we're going to do it soon. we have to finish the design. >> rose: what's going to be on the other side. >> there's a lot of issues. >> rose: you shouldn't chosen the woman either have you. >> i haven't announced anything. >> rose: just give me something. are you expected to do this in the next six weeks. >> i'm not going to put a date out there. we're going to do it when it's done and it will be exciting. >> rose: thank you for coming. it's been a pleasure having you. >> thank you charlie. >> rose: we'll look forward
ncht this is "nightly business report" with tyler mathisen and sue herera. >> i consider it appropriate to the committee to proceed cautiously in adjusting policy. >> the chair has the floor. the federal reserve janet yellen in major speech tells investors and her feds colleagues to chill the hot talk about higher interest rates. controlling the pain. the white house out lines new initiatives and new money to fight the growing epidemic of prescription drug abuse. tax tips. whether you're a newlywed or just retired, your finances are changing and so will your annual return to uncle sam. all that and more tonight on "nig b