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tv   MSNBC Live With Velshi and Ruhle  MSNBC  July 27, 2018 8:00am-9:00am PDT

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thoughts. i will see you tonight on nbc nightly news with lester holt. ali velshi. look at you doing double duty. >> so are you. there's a lot of news. this is the way we live. good morning everybody. i'm ali velshi. stephanie ruhle is off. let's get smarter. >> bombshell, president trump' long time lawyer ready to deliver the goods. >> michael cohen reportedly has a story to tell. >> source reveals to nbc news michael cohen is willing to tell the special counsel then candidate trump knew in advance about the 2016 trump tower meeting between donald trump jr. and a russian lawyer. >> cohen's claim would contradict repeated denials from president trump. >> i expected something like this from cohen. he's been lying all week or --
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lying for years. >> here's what the president is saying. no, i did not know of the meeting with my son, don jr., sounds to me like someone's trying to make up stories in order to get himself out of an unrelated gentleman many. >> -- jam. >> i think what is clear is michael cohen believes he has a lot to offer prosecutors. >> one of the most crucial players in the trump organization, a man so entrenched with the trump name that he started out working for donald trump's father. he suddenly on investigators radar. final gatekeeper of the trump business empire, reportedly has been ordered before a federal grand jury. >> prosecutors love to say follow the money. this is literally the man who followed the money for decades. >> it's clear he would be exponenti exponentially more important figure. >> brand new economic numbers just out. >> i'm thrilled to announce that in the second kwarlquarter of t
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year the united states economy grew at the amazing rate of 4.1, as the trade dealings come in one by one, we're going to go a lot higher. if economic growth continues at this pace, the united states economy will double in size, more than 10 years faster than it would have under either president bush or president oba obama. once zbe once -- >> all the economists, people a lot smarter than me think this isn't sustainable. this is a temporary bump. >> president trump is thrilled that the american economy grew by 4.1% in the second quarter. that is the fastest pace of growth since 2014. 4.1%. an impressive number, and it is the story trump wants all of us to stay focussed on today. we will talk about it at length during the show. i'm going to be talking to president trump's chief economist, kevin has seset.
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he wants us to stay focused on the economy instead of a different story he wishes we were not talking about. that is president trump's long time attorney michael cohen says mr. trump knew about the infamous meeting with the russians who have claimed to have dirt on hillary clinton. just hours ago, the president unleashed an attack on his former fixer, cohen, saying, quote, i did not know of the meeting with my son, don jr. sounds to me like someone is trying to make up stories in order to get himself out of an unrelated jam. this, of course was in response to that ex-employeplosive overn reporting. cohen willing to inform robert mueller that then candidate donald trump knew about the infamous june 2016 trump tower meeting. don jr. attorney called it false.
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continuing what seems to be a shifting story that never ends. all right. let's rewind to two years ago. june 7, 2016. donald trump jr. told british publicist, however 3:00 at our offices. thanks, rob, appreciate you helping set it up. that put into motion the infamous meeting in trump tower. he responded to an offer of quote dirt on hillary clinton by saying if it is what you say it is, i love it. >> just four hours before or later, then candidate donald trump promised to give a speech with incriminating information on the clintons during a campaign news conference. listen to this. >> i am going to give a major speech on probably monday of next week, and we're going to be discussing all of the things that have taken place with the clintons. i think you're going to find it very informative and have interesting. >> that was june 7, 2016.
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two days before this very, very important meeting. on june 9, 2016, donald trump jr., campaign chair paul manafort, son-in-law jared kushner, met with a former russian spy at trump tower. clouded meeting. revelations didn't come out until a year later. on july 8, 2017, don jr. down played the meeting that happened a year and a month earlier, saying in a statement they primarily discussed a program about the adoption of russian children. reports surfaced nearly a month later that president trump helped draft that statement himself, while aboard air force o one, calling the meeting, quote, not a campaign issue at the time. on july 9, just a day later, don jr. walked that back a bit acknowledging that he did meet with the russians, for campaign information, but the meeting turned out to be about
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adoptions. two days later, on july 11, don jr. appeared on "fox news" and said this. >> a lot of people are going to want to know this about your father. did you tell your father anything about this? >> no. it was such a nothing. there was nothing to tell. i mean i wouldn't even have remembered it until you start scouring through the stuff. it was just a waste of 20 minutes. >> then the next day in an exclusive interview with reuters, the president asked if he knew the son was meeting with a russian lawyer replying, quote, no that i didn't know until a couple of days ago when i heard about this. a week after that, july 19, 2017, president trump was pressed on whether he knew about that meeting prior, in an interview with the noew york times. >> i just heard there was an e-mail requesting a meeting or something. that they have information on hillary clinton. and i said, that's standard
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political stuff. >> did you know that -- >> no, i didn't know anything about it. >> so just keeps on saying he didn't know. then, in testimony before the senate judiciary committee in september of 2017, don jr., back to the son -- claimed that his father, quote, wouldn't have wasted his time with it. i in every spoke to my father about it. okay. so that's the history of the trumps continually denying they knew about the meeting. joining me now former assistant u.s. attorney for the southern district of new york. gentlemen, good to see you. lie begins about the concept that this was about adoptions. more detailed than a lot of people want to get into, but russia stopped the adoptions of russian babies to america to protest the magnitsky act, which punished oligarchs with assets in america which is personal to vladimir putin. concept that there was this meeting about adoptions that had
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nothing to do with anything else is not plausible. >> it turned out to be a lie as you just illustrated for us. a lot of people are saying we're in a he said-he said situation. and a as a prosecutor, when you get in that situation it's not just a throw up your hands and say who knows, you have to look at the corroborating evidence. what do the external facts tell us. the first one i would go to is the lies. why lie? why -- >> there's a lot of lying going on. >> you would ask a jury. why is everybody who was in that room lying about it, with this adoption cover? that's number 1. there's other corroboration that supports cohen too. phone records from don jr. to this blocked number. we know that the president had a blocked number. right after don jr. finds out there's going to be a meeting and after the meeting itself. and so i think, again, that's another important piece of corroboration that would weigh on the scale towards cohen's version of events. >> so, danny, this is interesting, because he said, he said, and presumably whoever's
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investigating this in the case of cohen, southern district of new york, russia meeting, the mueller investigation. they have one interesting piece of information. that is don jr. spoke to congress and said something. that would make it a crime to have lied. >> that's true. there are other potential crimes that cohen's information, if true, would bring everybody in the circle closer to criminal activity. i mean forget even for the moment, the stormy daniel es and other payoffs. there is any aid or assistance are conspiracy to aid a foreign government and interfering with an election, which is also a potential crime, so there are a number of potential crimes. but, when it goes to the michael cohen credibility issue, where rudy giuliani and trump are being a little disingenuous, giuliani's suggestion that a government would never use a
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witness with credibility prob m proble problems. that is the essence of cooperating witnesses. they are not boy scouts, you have to use a criminal to catch a criminal. that's been the law in the united states for a long time. i guarantee you, he could tell you right now about several criminals he has used that are probably likable fellows that have credibility problems that are star cooperating witnesses. >> if you're trying to get to the bottom of the act it's best to have one that was involved or has first hand knowledge. >> they're there for a reason. i've called them who have done murders and put them on the stand. >> there's a point that you're creating credibility around the fact that they know the topic and trump's lawyers will attack that on the basis of this guy desperately needs a deal or trying to get out of it as donald trump says, some other issue. >> we say all the time, you can't penetrate a close the secretive network. there are some comparisons.
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you cannot penetrate that from the outside. you need an insider. inherently, if you're going to get inside a dirty organization, you're going to have dirty players. one of the sort of stock lines we always used to use with a jury is we didn't choose michael cohen. you don't need to love the guy. we didn't choose him. donald trump chose him. >> i was on a bus yesterday and some said to me i can't believe i'm rooting for michael cohen, but when you speak of organized crime, and i just used this because there may have been a crime committed by an organization -- in the movies, they go for the lawyer, and the finance guy, the money guy. right? and now they've got michael cohen and they're now going after the accountant, the guy ha was the cfo of the company who may know donald trump longer than anybody because he worked for his father as well and the bottom line is if there were financial transactions, everybody's caught up on whether it's a check or cash. but the fact is if the company were involved in the final
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transactions, the accountant would know. >> lest you think you can assert any kind of privilege when it comes to your accountant, be warned, there is no independent accountant client privilege the way there is an attorney/client privilege. it may attach if the accountant is involved in conjunction in helping the attorney provide legal advice but there is no independent privilege for accountants. so, if the accountant gets subpoenaed, if they approach the accountant, if there's evidence against the accountant, if his eyes have even seen things they shouldn't have seen, then the government can probably extract that without any ability of -- >> interesting. say this accountant has done nothing wrong independently. in other words, he may have written checks or arranged things. does that make him part of something that's wrong? >> yeah. it might. it might. people have said what's going to happe happ happen. he's been subpoenaed. first thing you do is take the
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fifth. that's what it's there for. i would guess he's going to invoke the fifth amendment. then, the ping pong is sort of back on the prosecutor's side of the table. >> by the way, there's no ability to exzerlts executive privilege. >> right. >> not executive or attorney/client privilege unless he can prove those discussions all happened in the context of a meeting with michael cohen discussing -- danny's right on the attorney client. next s >> that's for national security. not for this kind of thing. but, if he invokes the fifth, the prosecutors then have to make a decision, do we want to immunize this guy. are we willing to give him a pass. he seems like an enabler more than a primary doer. second, do we want him as a witness. that guy worked for the organization for 40 years. we heard two minutes. >> he said our friend david, who we think is david pecker from american media, owner of
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"national inquirer." but he took allen's name, if you will name. do you think that's important? >> this is like that lanny -- laurel tape we were listening to. i keep opening the possibility they were talking about our friend david. but others seem to think it's david pecker. so. >> interesting. >> so if it is -- no matter who the david is, the one thing that jumps out is the way michael cohen inex pertly using these code words. that's another sobering reality they're going to have to face is that the government is very good as calling laypersons to testify as to what code words mean. more you use a code word, the more the government will seize on that and call their own witnesses to say, in my years of experience in law enforcement, this is what they were talking about. so it's a double enged sword. >> mine is bald eagle. i think the government calls me
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chubby bald eagle. thank you. very good to see you. the walls are closing in on the russian investigation. president trump. now the cfo of the trump organization we've just been talking about reportedly called to testify in michael cohen's case. we're going to tell you all about this man. we've just told you a little bit about. allen wieselberg, including his very long history with the trump family and weather not he might flip. and education betsy devos. first she's proposing major cuts to aid for students who are defrauded by for-profit colleges to the tune of $13 billion. and the no, times is reporting another twist. she wants to eliminate obama era rule that is require for-profit colleges to prove they provide gainful employment to skuns. she has personal interest. she staffed her department with many former for-profit
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executives. according to paperwork she submitted she's had millions invested in firms related to for-profit education. but maybe not for people with rheumatoid arthritis. because there are options. like an "unjection™". xeljanz xr. a once-daily pill for adults with moderate to severe ra for whom methotrexate did not work well enough. xeljanz xr can reduce pain, swelling and further joint damage, even without methotrexate. xeljanz xr can lower your ability to fight infections, including tuberculosis. serious, sometimes fatal infections, lymphoma and other cancers have happened. don't start xeljanz xr if you have an infection. tears in the stomach or intestines, low blood cell counts and higher liver tests and cholesterol levels have happened. your doctor should perform blood tests before you start and while taking xeljanz xr, and monitor certain liver tests. tell you doctor if you were in a region where fungal infections are common and if you have had tb, hepatitis b or c, or are prone to infections. needles. fine for some things. but for you, one pill a day
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i need to open up a company for the transfer of all the that info regarding our friend david so that i'm going to do that right away. i've -- >> i've spoken to allen
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wieselberg about how to set the whole thing up. >> just when you thought your hard drive was full and you couldn't handle another name in the whole thing. we have one. allen whistlebe allen whistlebe allen wieselberg. discussing setting up a company to allegedly facilitate payment to a tabloid to bury a story. sandwiched in all that stuff is this new name.wieselberg, new tf you, not new to donald trump. he is his long time money man. when i say long time, i mean it. wieselberg is the chief final sof -- prosecutors in new york southern district consider him a witness in the michael cohen investigation. wieselberg has been described as
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quote the most senior person in the organization that isn't trump himself. he's got a deep history with the president's businesses. wieselberg worked as an account apt for the president's father for years. in the 1980's he was the financial controller. wieselberg became more involved in the trump businesses when donald trump bought the miss universe pageant in 1996 tapping wieselberg to surf erve on that board. after an accounting scandal that brought scrutiny from the security's exchange commission, that business eventually declared bankruptcy in 2004. he served as treasurer for the trum foundation, the now defunct nonprofit is also the subject of investigation by the new york state attorney general over $25,000 donation to a political action committee, and in 2016, it was wieselberg who according to "the wall street journal"
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arranged to pay michael cohen. he then used the money to give stormy daniels a $1 30,000 check keeping news of an affair quiet as voters went to the polling stations. just as important, he prepared the president's elusive tax returns for years. his knowledge. trump organization and of the president's finances dwarves cohe cohen's making him a potential danger to the president. joining me is a tax expert, b l founder of d.c. report, o the author of the book the making of donald trump. and the one page we've all seen. is this guy. he's the guy who got it. david, good to see you again. you -- allen wieselberg's name is knew new to a lot of america >> he has been with the family clear back when fred frutrump ha
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business partner identified by law enforcement in public reports as an associate of the gambino crime family. this goes to how the trump organization has always been involved with organized crime in more recent times with russian mobsters. >> all right. so we know from the cohen tape that apparently, wieselberg knew about the plan to pay off the former playboy playmate who claimed she had an affair with donald trump. we don't know that that's true. we know that that's what michael cohen recorded donald trump as saying. what do you make of that? >> well, donald is not a detail guy. he is an overseer of things. and wieselberg is the guy who would be in the know. where money was september and pulled from.
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what obligations were deferred or not paid. all of that would flow across his desk. when you think follow the money. he is money central. >> the morning after that tape was released everybody was determined to figure out who said check and who said cash, but if you got wieselberg to talk it's not important because he would know. >> well, he certainly should, and as your earlier guest pointed out, there is no attorney/accountant privilege here. years ago, donald and i had an interview where i was trying to go over a business deal and he was getting flrustrated and he said -- you and your lawyers put it in the public record. i knew his deal better than he did. details, somebody has to be the detail man, and now, he's under subpoena. this is not good for donald trump. >> connect this to the thing that you have been very involved in. that is the search for donald trump's tax returns. last year you got your hands on
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part, one part of his 2005 return, which you revealed here on msnbc. obviously, miller knows this is the guy who would have them or have access or information about them. do you think that's connected? >> oh, sure. by the way, we had a first d.c. report. then went -- >> that's true. i believe the site went down because so many went to see it. >> 24 hours it was crashed. unfortunately. reality here is that what's in donald's tax returns and more importantly the books and records behind those tax returns are going to be with allen wieselberg. that's what matters here. and he is the one who's going to know how did they justify this or that deduction. let's remember, donald had two income tax fraud trials, lost both, and his own tax lawyer at the time testified under oath
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that's my signature on that tax return, but neither i nor my firm prepared it. which is a very good sign of fraud. i'm sure diligent prosecutors with subpoenas for documents and testimony are going to find lots of interesting things in the financial records of the trump organization. >> just to follow-up on that. is it possible they could bring wiesel beg in and say, we know you were involved in some of the stuff, or at least you had knowledge of the fact that something wasn't above board and hence we need you to tell us more? could they use that as leverage to testify or give information? >> yes. of course he can take the fifth amendment. that doesn't mean you've committed a crime. it's just a right every one of us has. prosecutor can then get immunity. once immunity is granted, then you testify or you can go to jail for refusing to testify. and i expect that we may well see that play out. >> all right.
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david. thanks very much for this. nobody knows about this more than you. investigative reporter. he's the founder of d.c. and author of the making of donald trump. brand new numbers out on the strength of the u.s. economy. coming up next, i'm going to talk next to the president's chief economist about that. it was here. i couldn't catch my breath. it was the last song of the night. it felt like my heart was skipping beats. they said i had afib. what's afib? i knew that meant i was at a greater risk of stroke. i needed answers. my doctor and i chose xarelto® to help keep me protected from a stroke. once-daily xarelto®, a latest-generation blood thinner significantly lowers the risk of stroke in people
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and i couldn't ask for a better partner. > all right a warm welcome back. second quarter gdp growth is impressive. 4.1%. now, there are several one-time fa factors. i want to take a look why quarterly figures alone have to be looked at in context. it's much more complicated than this. i know some of you are going to get angry i put such a short description. basically the total value of everything produced by everybody and every company in the country. it's a big scorecard of the country's economy. now we have seen high rates like this before, in fact we've seen higher quart ear higher quarterly growth rates. it reached 4 times did youri du
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oh -- the annual gdp growth rate never broke 3% under president obama. i tend to like to look at this one a little more. last time we saw that kind of growth was during the bush administration, 3.3%. back in 2005. right now, federal reserve officials forecast gdp to be up by 2.8% compared to last year, for all of 2018. then to tail off to 2.4% in 2019. and 2% in 2020. i have seen numbers that are higher estimates for this year than 2.8%. i'm going to call it 3 for argument's sake. that's probably a number you should be thinking about. boost was fed in part by spending from consumers and businesses and a rush from farmers getting their soy bean exports into the global market ahead of new tariffs. for those of you asking if the
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4.1% rate can sustain itself through the rest of the year, that is an open question. joining me is kevin hasset. he is the chairman and a good friend of mine and conservative. but i also know liberal economists. jared bernstein who is a friend of yours as well is standing by i'm going to talk to him afterward. danger is you have somebody smarter than me listening to the conversation. you can normally walk -- >> let me ask you this. back -- the reason jared is significant in the conversation is back during the obama administration they would trumpet reports on job creation or the effect of stimulus and i would to do them exactly what i'm doing to you. i 0 would question them and perhaps say they are rosier than they think. jared has invited me to the white house and make your case. in this particular case, 4.1% solid growth, but as i noted, some of it was fuelled by
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farmers getting rid of soy beans. so, do you look at 4.1% and think that is sustainable or should we talk about 2.83%? >> i think you're right to get a little bit anxious about focusing on only one number. and i got to also add that jared has over the years taken a lot of guff from conservatives about the first forecast he did about what the economy would be if we passed the stimulus and a think a lot of that criticism was unfair because they had to close, as i did, before they got a whole bunch of really bad data. for sure they would have chained t changed the numbers if they had the data. i think that's unfair. for me, though, thinking about what i'm doing now here at the white house, that when i took the job, the president basically said, kevin, don't spin the american people.
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pick the models you think are best and go out and believe what you're saying is true about what it's going to do to the economy. you no he that's what i've been doing. last fall i said on the show that if we passed the tax cut that our forecast would become true, growth this year of 3.1%. no the ridiculous, not above 4 but 3.1. if the average for the two numbers, 3.1. >> fair enough. i'm totally fine. >> good guess. >> i'm fine with the fed's forecast. maybe it will be 3 or 3.1. i guess the concern i have is how to make this make sense for the american people because when the president ran for office -- you weren't involved at the time. here's what he said. >> we're bringing it from 1% up to 4%, and i actually think we can go higher than 4%. i think you can go to 5% or 6%. >> right. >> that's my problem. because we're not actually talking about annual gdp growth
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of 4%, 5%, or 6%. you and i had this conversation. i think i once promised to wear a dress for a week if certain pro predictions came through. i said i would grow an afro. >> in a would be fun. >> it would be fun to have 4, 5 or 6%. that's not really a reasonable expeks tags. >> i think you could have a craft quarter like that. capital spending boom is continuing. but second, a reduction in inventories took about a percent off the gdp number. if we had normal inventories, then it would have been a 5% number like the president said. and as you know, if you like have firms running down their inventories in one quarter, that's pretty optimistic for the second half of the year. i think that having 3.1 over the first half of the year and having the second quarter be above 4 with a sort of minus 1% from inventories means the cea
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is still really comfortable that 3.1 is a conservative estimate. >> your group, the counsel -- >> yes. >> the president, interestingly, has chimed in in the last couple weeks about interest rates. apparently warning the fed to be careful about the increase. >> are you comfortable with the president chiming in? >> 100% respect the independence of the fed. president does do. i think that the independence absolutely 100% has to be respected he religion outly. -- religiously. i got criticized because i was on stage and i said something about i'm not sure there is a natural rate of unemployment. if you have a natural rate and it changes, how natural is that. after i said that on stage, bedroa story wz one that i'm attacking the fed.
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i think that kind of conversation should be permitted. but in the end they have to make the call and without political influence. >> i have often said that the president gets too much credit and too much blame in some cases. any president, for jobs and sometimes for economic growth. but, the president -- he deserves credit where due, but if this slowdown gets triggered by a trade war, does the president have to take responsibility for that? >> the president had said forever -- you and i have talked about it -- that he want the better trade deals. if p you look at all the positive move m with the eu this week you can see his strategy of being tough and having credible threats and inviting people to the table it working. i think as you mentioned, the tread deficit dropped in the second quarter. some was anticipatory, but also partly we're open for business. we've become an attractive tact climate.
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people are maybe worried about the policy in the future and moving their production home in haven't of something they might be anxious about. >> the one -- the one result that's problematic is wage earners are not earning more money. hourly wages are not improving, we do have a little bit of interest rates going up, oil praises going up. how do we fix that? >> that's something we're working really hard on. i'm going to pretty soon about to go off to tokyo for a week but when i come back i'll present new analysis to look at how the stampede of workers has increased the pool of low skilled workers and that has lowered the average wage. even though there is wage pick up. one of the way you can see, look at the gdp release today and look what happened to gross domestic income. income was really, really revised up loafover the last fe
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years so much so that the savings rate almost doubled. a lot are starting to to be fix. i think if you account for changes and also account for the new data we're finding that shows sky rocketing incomes that the story's going to be better. final thought. in the end, the wage growth from capital spending is a medium term for now. something you should see over 3 to 5 years as i've reater rated back to the fall. >> >> thank for all your stuff. all right. joining me now as promised jared burnstein. i should say that i first got to know jared because we had an argument about my characterization of things that you and the obama administration were saying and you invited me to sit in and discus that with you. just so viewers understand i'm
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an equal opportunity critic of administrations providing rosy narratives about the economy. help us understand what we're looking at. president argues that, as did kevin, that tax cutting and regulation cutting is delivering results. 0 do you agree? >> i don't agree with that last part. if you actually look into the guts of the report, you don't see much from the tax cuts in the sense that i think kevin was trying to stress. this idea of that it's really increasing the investment, or the economy's capital, that will it use to generate more growth. there there's a little bit of that but that's not the big story. i think where some of the spending is helping is we're in a stimulus sense. juicing gdp growth this quarter, probably this year, and next year as well. and then, unless congress puts morphous c more fiscal stimulus--even a 3%
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growth rate, is probably a much too optimistic. i think the underlying trend right now, that's really important to try to pull it out is about 2.5%. that's a good steady gdp growth rate. i don't think there's anything in the report to lead you to worry about getting overheating that the fed would have to react to. i do think the one problem and you talked about it -- i disagreed with this part of kevin's wrap was the wage part. i don't think you're going to make the real wage stagnation go away by kind of looking at the workers who are entering the work force and different qualities. >> yeah. this is fundamentally, all of this economic mem dough jumbo you and i enjoy, what it comes down to and what i'm going to get tweets about is i haven't had the raise. i'm working two jobs. it's a weird situation to be in where we have 4% unemployment, 4 in front of gdp growth, and yet we've got the entractable problem of workers who are not
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seeing what they look at in the stock market, what they look at in gdp growth. how do we fix that? >> well there's a word for that called economic inequality. it certainly predated kevin h hassett and the donald trump administration. that's exactly the right question. it has to do with the bargaining power of middle and low wage workers. that's a long-term erosion. it has to do with diminished union power, more recently with court decisions that really tilt against workers, and their ability to claim their fair share of the growth. it has to do with the increased power of finance. i think it does have to do with the fact we've run large trade deficits for many years. that's hurt our manufacturers. there's a lot of economic policy architecture that's eroded the connection between gdp growth and middle class paychecks. >> yes. which is also what you could say about the stock market. people used to think if it's up
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the way it's been -- >> one more comment here. and i think that what's so key about this is to understand gdp growth in context. we like that 4% number even if it's just a blip and not sustainable. we even like the 2.5% trend growth rate but let's not ov overinterpret gdp to be more than it is. it leaves out a lot, including who's getting the benefit of that growth. >> jared, great to talk to you, as always, thanks to both you and kevin. jar red former chief economist to vice president biden. coming up next, new evidence that russians tried hacking the office of the democratic senator. what's it going to take for president trump to act? first, our cartoon. day shows vladimir putin at a podium saying, quote, i grabbed him by the presidency. when you're a dictator, he lets you do it. you're watching "velshi & ruhle." on msnbc. ...commanded armies...
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and your senator, claire mch mchas -- mccaskill must do this for you. if she doesn't, you have to vote her out of office. >> now earlier in week the president finally acknowledged ongoing russian efforts to interfere in the 2018 midterms though he claimed it would be to help democrat the. it's good that the president is recognizing russian ef for forts. over the past few years russia has been attacking the united states in cyber space and laying the ground work for future strikes. one of the most recognizable is the social media influence they waged during the 2016 election spreading fake news and touching on the most sensitive of social issues across the spectrum all exposed in hearings last fall. but also the attempts by russian or russian-backed hackers to
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penetrate systems in 21 states. red states, 18 by the way publicly identified. red states, seven of them are what senior officials said haven some way. now, "the washington post" described how in 2014, russian hackers tried to break into the unclassified systems of the state department, congress, the white house, and the nsa. the deputy director described the episodes as hand to hand combat in cyberspace. and then there was this ominous warning just two weeks ago from the director of national intelligence, dan coats. >> it was in the months prior to september 2001 when according to then-cia director george tennent, the system was blinking red. and here we are nearly two decades later, and i'm here to say the warning lights are
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blinking red again. today the digital infrastructure that serves this country is literally under attack. >> all right. hacks are hard because they don't affect you, you don't know how serious they are. but russian hackers penetrated u.s. aviation controls, nuclear plants and energy grids along with the industrial sectors. the hackers didn't cause any harm. but it raises fears that the attacks were dry runs for a future assault or that malicious programs could have been left behind. and according to "the wall street journal," russian hackers penetrated power stations so deeply in one attack that they, quote, got to the point where they could have thrown switches, disrupting the power that was flowing to american cities and towns. joining me now is kevin paulson, the daily beast writer who broke the story about the hack on claire mccaskill, and evelyn farkas, deputy assistant
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secretary of defense for ukraine and asia. kevin, how did you figure this all out? >> last week, a microsoft executive speaking at the aspen security conference made a comment that microsoft had detected and thwarted attacks by the russians' gru hackers against three candidates in the midterm elections. microsoft wouldn't name who the targets of these attacks were. so i started with that point and then just went digging and then eventually uncovered senator mccaskill as one of the targets. >> and your article is very detailed and worth reading. you took spoofing, you talk about phishing, you talk about fake landing pages. in non-tech-speak, how did they try to do this and who else is vulnerable to it? >> everybody is vulnerable to this attack, which is why the russian gru keeps using it,
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because it always works, or almost always. the idea is they create a fake log-in page or a fake password change page, and then they send you forged e-mails telling you it's time to change your password or you have to log in to look at a document. when you click on the link in that e-mail, you look at this fake page. when you enter your password, it goes right off to moscow. >> evelyn, this goes beyond our elections. you and i have been around, people say it didn't change any votes, that's a simplistic way of looking at this. i think people can get their heads around russians trying to hack into our air control systems, our engine systems, our nuclear plants. this is serious, especially since we seem to have some evidence that they've already penetrated critical infrastructure, even though they didn't shut down the power. >> that's correct, ali. i think what's really important here is, we have two separate things but they're linked.
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election security, we heard already back in october 2016 from the dni back at the time and dhs under the obama administration that the russians had hacked in, they had compromised electoral systems. we now know they never stopped. there's no going away, going home, taking a rest. those russian military intelligence units keep going, right? but at the same time, as you said, we now have a lights blinking red on a separate but related issue which is critical infrastructure. and in march, i think that the dni was referring to this report, it was actually a threat assessment alert put out by the fbi and i believe dhs, essentially saying that the russians had penetrated, that they had placed malware on our energy infrastructure to include nuclear, water, the whole host of things that are critical, manufacturing. courtney kube reported on this two days ago, senator maria cantwell and senator lindsey graham have written a letter and they demanded in 90 days that
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the u.s. government report back on the details and what they're going to do to mitigate. why? because the link to the elections is, if you cut the critical energy grid or something on election day or you tamper with it in a way that affects, freezes voting or something like that, there can be a link. but it's bigger than that, because that's how the russians would fight us if they ever had to, with critical infrastructure. >> people should be very concerned about the interference in our political system, but actually you should be concerned about interference in our power and airports and airlines. great article, kevin poulsen. and thank you, evelyn farkas. your watching "velshi & ruhle." how do you win at business?
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here are some of the top stories we're watching right now. an out control wildfire in northern california tripled in size overnight, forcing entire towns to evacuate and spawning fire nadoes, they call them. we just learned a firefighter has become the second person to
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die. more than 2,000 firefighters are battling that blaze. it's expected to get worse over the hot, dry weekend. right now in indianapolis, a celebration of life event is honoring four of the fine family members tragically killed in the duck boat accident last week near branson, missouri. tia coleman's three children and husband all died when the boat sank, killing 17 people in total. federal officials are investigating why the duck boat operators went onto the lake during severe thunderstorm warnings. thanks for watching this hour of "velshi & ruhle." i'm ali velshi. stephanie will be back on monday. check us out on social media and connect with your show. i'm handing over to our friend andrea mitchell for "andrea mitchell reports." is he flipping? donald trump's former personal lawyer reportedly ready to tell prosecutors that candidate trump knew about that infamous trump tower campaign meeting with the russians before it happened, something he and his eldest son


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