tv Velshi Ruhle MSNBC October 21, 2017 9:30am-10:00am PDT
the stock market continues on its tear, soaring to record highs. with stocks being the only game in town, the sky's the limit. the question is for how long? >> you know what else is soaring? prescription drug prices. president trump says drug companies, they're getting away with murder. but did he also suggest that the government set prices for drugs like they do in other countries? >> i'm ali velshi. >> and i'm stephanie ruhle. when it comes to health care in america, it is hard to pinpoint exactly what the president's
plan is. well, short of ending obamacare. >> he clearly rails against the costs. the co the costs of meds, the costs of insurance. but his actions this week only push us further away from solutions so let's start there. last week president trump delivered what many could be a mortal blow to obamacare by cutting off csrs, cost-sharing reduction payments to insurers which subsidize coverage for low income americans. this week a bipartisan agreement was reached by senators lamar alexander and patty murray who have been working with their committee, the health committee for months on this. if that is passed, it would fund those csr payments for two years. donald trump wasn't quite sure how to respond to that. >> obamacare is finished, it's dead, it's gone. it's no longer -- you shouldn't even mention it, it's gone. there is no such thing as obamacare anymore. >> it is a short-term solution so that we don't have this very
dangerous little period, including dangerous period for insurance companies, by the way, for a period of one year, two years. we will have a very good solution. >> we're going to see the bipartisan. lamar alexander is working on it very hard from our side. if something can happen, that's fine. but i won't do anything to enrich the insurance companies. >> that's a lie. obamacare is not gone. >> he said it's gone, then there is a good solution, then he said he might support it, then he said he's not going to enrich the insurance companies. that's actually key, because in addition to saving the cost-sharing reductions, the bipartisan compromise would fund obamacare enrollment outreach which has been slashed by the current administration. for republicans the deal gives the states the flexibility to apply for these waivers to alter their health care systems and it also expands eligibility for these catastrophic insurance plans, which are limited under obamacare. so whether you like it or you don't like it, it is actually bipartisan. it's the thing that we know has
been missing for so long in this health care discussion. >> bipartisanship, which is what america voted for. >> so this committee is 12 republicans and 12 democrats. >> it's true bipartisanship. remember all of the people who said they want to drain the swamp and break the washington gridlock. more americans care about having good health care than they care about what the name of the health care program is. so the fact that you got a team, 12 on each side working together, should be a beautiful, beautiful progress solution for the country, yet somehow those who are stuck on a name are stuck in the mud here. >> let's talk about what this is. president trump's move to cut these cost-sharing reductions forces the government to actually spend more money and it ends up raising premiums and insur insuring people. so if you believe that obamacare is broken or he needs to fulfill a promise to ending it, it doe
make sense to do something that makes it worse for everybody involved. >> but if you believe that csrs make insurance companies more money, then you'd be wrong. look at this. >> right now the insurance companies are being enriched. they have been enriched by obamacare like nothing anybody has ever seen before. i am not going to do anything to enrich the insurance companies. >> all right, let's talk about this for a little bit. let's take the major insurers out there. the major health care insurers. let's put it up. this is their profit in 2016 as compared to their profit in 2013 without obamacare. so united health in 2016 versus 2015, up 25%, cigna up 27, wellpoint no increase and hugh man -- humana is actually down. that's not the part where they make money.
the cost-sharing reductions are money that goes to subsidize low income people and their out of pocket costs. instead of being unwieldy and sending reimbursements to everybody, the money goes to the insurance companies. so it's a pass through to the insurance companies. >> getting rid of csrs hurts the poorest people. >> it has zero effect on insurance companies. so if you have a beef about insurance companies, which a lot of people do and how much money they make and we've talked about it a lot, that's fair and it's a separate issue. >> but when it comes to csrs, insurance companies, where's the beef? >> this is not the problem. moving on to president trump's tax plan, which still needs to be worked out in congress, still needs a lot more details. we know some broad strokes already. a simplified tax code, fewer tax brackets, and of course big, big tax cuts that benefit businesses. well, now there are some ideas in the president's plan that could also benefit the middle class, could. but this week something even boulder was peddled. >> my council of economic
advisers estimates that this change along with a lower business tax rate would likely give the typical american household around a $4,000 pay raise. that's money that will be spent in our economy. >> sweet. >> 4,000 bucks, that's a deal. but for facts sake, is it true? president trump's making a big promise to americans under his new tax plan. thousands of dollars extra in their paychecks every year by drastically slashing corporate tax rates. that comes from a new study published by the president's council of economic advisers. the council chair says cutting corporate tax rates from 35% to 20% will boost wages substantially, depending on where you are on the income ladder, he says the boost will add anywhere between $4,000 to $9,000 a year. but does his math actually add up? for supply side economists on the right, it's an article of
faith that lower taxes on businesses and the wealthy reap benefits that trickle down to the rest of us. they argue that the extra money that companies get to keep increases demand for workers and drives up wages. but history shows us that cutting corporate taxes does not guarantee higher wages. back in the '80s during another anti-tax drive under president reagan, the corporate tax rate was slashed from 46% to 34%, but instead of boosting wages, they actually fell for five straight years by as much as $3,000 in today's metrics. contrast that with tax increases in 1993 and 2013, neither of which got in the way of growth. the premise flies in the face of earlier conclusions made by the treasury department and the congressional budget office. a laundry list of economists call the cea report everything from ridiculous to fatally flawed. former treasury secretary lawrence summers goes one step further, calling the $4,000
figure, quote, absurd on the face of it. research suggests companies are more likely to pass their tax windfalls to shareholders, not workers. in the end, trump's plan is trickle-down economics, plain and simple, which an overwhelming majority of economists just doesn't think it works. >> they actually tried it in the uk. they cut rates over the last decade from 30% to 19%. do you know what happened? wages fell. wages fell while they were creeping up here. not enough, but the fact that we're going to have a cut this big, assuming you're going to see wages increase, it's reckless. >> right. you could just actually give the middle class tax cuts to make up for this. there's a whole concept of running the tax cuts through businesses in order to make it happen doesn't make sense. there are bipartisan agreed-upon methods that you can use to have middle class people get greater benefit. you can expand the child tax credit, you can expand the
earned income tax credit -- >> you could just cut the lower brackets even further. but this is a convoluted idea that may or may not help the middle and lower income level. >> but it for sure will help shareholders and companies. >> and guess what happens to shareholders right now. they are kicking it. >> they don't need any help from you. but thank you very much, mr. president. by the way to this point, the dow jones industrial average crossed 23,000 points for the first time ever. this is an incredible milestone. the dow has gained 26% since donald trump was elected almost a year ago, in case you didn't hear that from me, he tends to remind you of it a lot. an interesting historical side note, 30 years ago this week on black monday, you were too young to remember this, the dow gave up 23% in one trading session. so we've been up 28% -- 26% in almost a year. it lost 23% in one day.
back to today's market, the best reason for all the euphoria is the hope that the president can get something done on taxes to the extent that the treasury secretary, steve mnuchin, seems to think that tax prospects could swing the market for better or for worse. listen. >> there is no question that the rally in the stock market has based into it reasonably high expectations of us getting tax cuts and tax reform done. to the extent we get the tax deal done, the stock market will go up higher. but there's no question in my mind that if we don't get it done, you're going to see a reversal of a significant amount of these gains. >> can i point out that steve mnuchin's own firm where he came from, goldman sachs, said if tax reform doesn't get done, maybe things go down 3%. not significantly. and it is reckless, it is reckless for the treasury secretary to have this warning like that. you better get this done or you're going to see the stock market is going to have a significant downfall.
can we please point out only 52% of the american population even owns stocks. so the stock market is not a one-to-one reflection on the economy. >> right. so president trump tweeted about how well the market has done and he picked a very interesting graphic. this is it. showing you from election day, inauguration day where the market is. it shows the market was basically doing nothing until donald trump became president. so what we did is we recreated the graph in this tweet. there you go. from 2015 to 2017, it looks like the market didn't gain much and then look what happened on election day and inauguration day. but we do what we like to do around here, stephanie, we pulled that graph out to the length that you should see it from, starting from march 9th, 2009, a day i like to remind people of, and that is what the stock market actually looks like. >> it has been a steady climb, courtesy in large part of
central banks. our central banker, janet yellen, leaving interest rates at such low levels, it has not been good for savers, it has been great for companies. companies can borrow, companies who can operate with greater efficiency. so the fact that the president and the administration continue to point only to tax reform and deregulation as the reason for this stock market boom, that's wrong. >> there have been low interest rates around the world and global markets have been doing as well or better than u.s. markets. >> we're going to take a break. coming up, one thing that could help a tax overhaul, senators voting on a budget resolution, six months behind but never too late. more on that. and why are our prescription drugs so expensive when so many other countries manage to bring those costs down? what exactly can the president do about it? we'll talk about it, next.
drug by the same exact company, made in the same exact box and sold to someplace else, sometimes it's a fraction of what we pay in this country. >> welcome back. that of course was president trump this week, again complaining about what we all know to be true. americans pay a lot for their medication. >> trump promised to take action to bring prices down, but offered no specifics. while there are a lot of reasons why drug costs more in the united states than they do in other countries, there's really no easy fix to this problem. >> the prescription drug prices are out of control. >> president trump lashed out at the soaring cost of prescription drugs in the united states. according to a consumer reports survey, he's not wrong. 25% of americans who purchased prescription drugs in 2016, 28 million people, said they saw the price of their meds go up by $50 or more from just the year before. trump also compared our drug
prices to other countries. >> they're setting prices in other countries and we're not. the drug companies frankly are getting away with murder, and we want to bring our prices down to what other countries are paying. >> reporter: but the u.s. government doesn't set drug prices. the way our system is set up, it would be nearly impossible to bring prices in line with other countries. >> our system is far more fractured. it's every company for themselves. in our country, drug companies can set any price that they want and they can raise it by any amount for the most part. consumers are at the total mercy of drugstores, drug companies, wholesalers, pharmacy benefit managers, and there's no mechanism to stop it. >> the rest of the world operates differently. in countries with universal health systems, governments are often the only large buyers of prescription drugs, and that gives them vast powers to negotiate better pricing from drug companies. canada uses regulation to set a maximum price for new drugs, and britain, with just one main insurance provider, can deny
coverage for drugs it deems too expensive. >> other countries have a more uniform system. they have individual oversight boards. they set prices. they make determinations about what medications the country will cover and pay for. >> take a look at the prices charged for a month's supply of three top drugs prescribed in 2014. humira is often prescribed for arthritis and went for $2505 in the u.s. compared to $1164 in canada and $1,150 in britain. crestor was sold for $86 in the united states, compared to $32 in canada and $28 in great great britain. lantus went for $186 in the u.s., compared to $67 in canada and $64 in great britain. the higher price they charge americans help fund research and investment, making the u.s. a
leader in bringing new drugs to the global marketplace, but critics say the high costs just make drugs less accessible to people who need them most. when it comes to solving this issue, it may not be an easy fix. >> there's no single bullet to fix this problem. it will be a patch work of solutions to help people gain greater access, not spend so much money and still have the medications that they need. >> okay. so president trump looking to set prices. isn't his entire administration mantra -- >> the opposite. >> deregulation, deregulation, deregulation. free markets, open markets. setting prices is the exact opposite of deregulation. >> the one thing that's kind of interesting here is the degree to which the pharmaceutical industry lobbies. so by the way -- >> pull up the numbers, please. >> he'll be up against that. more than almost double the next closest industry, pharmaceutical and health products. >> $144 million. >> is that over ten years? >> that is an extraordinary
number. >> that's this year. >> the president is saying this in an offhanded way at the white house. wait until he steps back, sits down and realizes how many lobbyis lobbyists, how much money and how strong against it. >> if the president wants to take on drug prices, he'll have the entire country -- this will be the most popular thing he ever does, but this is going to be a hard one. >> not with lobbyists and big pharma. they have a vested interest. >> that number you saw, $144 million, that is this year, the first half of 2017. >> on lobbying. >> yeah. coming up are two things this week that you might have missed but could impact the taxes you pay and the interest rates you'll get chaurnlrged. and digital democracy. a candidate who says he'll vote with his constituents every time. how is he going to do that? we'll tell you on the other side. all money managers are pretty much the same. but while some push high commission investment products, fisher investments avoids them.
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welcome back. this is "velshi & ruhle." with all the news this week, you might have missed this. the senate basdpassed a bona fi budget resolution. they are supposed to adopt a u.s. budget no later than april 15th. here we are six months late and only now is the senate sending something to the house. frankly, this happens most years. but why is this so important? as we discussed earlier, all congressional republicans care about now is getting the tax bill through. and because of the senate rules, adopting a budget gives them the ability to get president trump's tax overhaul through with just 50 votes instead of the normal 60. easier hurdle. >> while we're talking about tax, we have to talk about something else that's being considered by the president. interest rates. the president is considering who the next fed chair is going to be. now, obviously the fed chair has an influence on your credit cards, the auto loans you take, basically the rates you pay on everything. according to reporting from
politico, the president is leaning toward the guy in the top left here, his name is jerome powell. he's a fed governor right now, to replace janet yellen as fed chair. her term ends in january. now, he is among the finalists you see here, including janet yellen, who could be reappointed. the importance of this, of course, is that janet yellen has been keeping rates low for a long time, which is probably as we've discussed the reason your stock market is doing as well as it is. president trump criticized that low rate policy. >> didn't like the low rates when he was running because they looked good for obama. but he loves them now. >> when he talks about that stock market. so he may be whispering into a potential fed chief's ear, hey, you keep rates low, helps my stock market and i'll give you the job. which, by the way, is not the way it's supposed to work. >> while he might look at janet yellen and say, wow, the market is doing so well, i love hanging my hat on that, that works for me. he won't like the fact that she worked in part of the last
administration. one thing the president loves to do is wipe out anything with obama tied to it and janet yellen has been there for the last two years. >> we'll keep an eye on that for you. finally here's a new name for you. camillo casses is running in denver, colorado. if he win, he claims he will only vote in line with what his constituents tell him they want. how's he going to do it? by using an app he developed called party.vote. if more than 50% say to vote one way on the app, that's how he's going to enter his vote. only in the case of a tie will he enter a vote of his own based on his own judgment. it's like "american idol" goes to local government. he wants to create a liquid democracy, one that uses technology to give the power to the people he represents. what does it do for my mom? she doesn't use a cell phone. >> it's kind of interesting.
on one hand we like to elect people who are fully baked and have their own ideas on things. the problem with politics these days -- >> are you trying to make a colorado joke? that's not funny. that's it for us. this is "velshi & ruhle." bye. we got a yes! what does that mean for purchasing? purchase. let's do this. got it. book the flights! hai! si! si! ya! ya! ya! what does that mean for us? we can get stuff. what's it mean for shipping? ship the goods. you're a go! you got the green light. that means go! oh, yeah. start saying yes to your company's best ideas. we're gonna hit our launch date! (scream) thank you! goodbye! let us help with money and know-how, so you can get business done. american express open.
let's get the lady of the house back on her feet. so you can get business done. and help her feel more strength and energy in just two weeks. yaaay! the complete balanced nutrition of ensure with 9 grams of protein and 26 vitamins and minerals. ensure. always be you. good day, everyone. i'm alex witt here in new york at msnbc world headquarters where it's 1:00 in the east, 10:00 a.m. out west and now here's what's happening. a farewell to the fallen. funeral services today for army sergeant la david johnson in the wake of controversy, questions and recriminkrirecriminations. >> we were stunned. >> i feel sorry for general kelly. he has my sympathy for the loss of his son. but he can't just go on tv and lie on me. >> if you want to get into a debate with a four-star marine general, i think that that's something highly inappropriate.