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JOURNAL REPORT

BETSY DEVOS MIKE PENCE ‘We still ‘By eliminating fundamentally the mandate, we operate on a will enact tax relief for model that was working families.’ brought to us 150 years ago by the Prussians.’

THE BUSINESS At the annual gathering of The Wall Street Journal’s CEO Council, top executives heard from the AGENDA, administration about what it has accomplished—and the prospects ONE YEAR IN for more change in the near future

GARY COHN AMY ‘We need to KLOBUCHAR make our ‘My issue with this businesses reform bill is the debt more piece, the $1.5 competitive.’ trillion.’

STEVEN MNUCHIN WILBUR ROSS ‘This is about ‘J ob creation is middle- the real purpose income tax of reducing the cuts and trade deficit.’ making our business taxes competitive.’

MITCH KEVIN McCONNELL HASSETT ‘This is not ‘We’re going your father’s into next Democratic Party. year with a There are very significant few moderate amount of

Democrats left.’ momentum.’ JOURNAL REET ST LL WA THE R FO MORSE UL PA INSIDE

MikePence on taxreform, trade Mitch McConnell on taxes, Anne Case and Angus Deaton LawrenceSummers seesdangers JayWalkerimaginesalie-detect- and the president’s leadership bipartisanship and divisions in the discussthe direstate of white, in the Tr ump administration’s ing app at the intersection of qualities, R2 Republican Party, R6 working-classAmericans, R12 approach to trade, R14 biology and business, R9

Steven Mnuchin says with reform AmyKlobuchar and Mark Kevin Hassett tells howthe U.S. PLUS JerryKaplan on the effects of the corporatetax rate isn’tgoing Warner layout the Democrats’ canget to sustained 3% GDP John Ford on howwho is benefit- artificial intelligenceonsociety above 20%, R4 vision of taxreform, R8 growth, R12 ting mostfrominnovation, R6 and labor, R11

Wilbur Ross explains whythe GaryCohn on the GOP taxplan’s Betsy DeVos says the education John Ferriola on the Tr ump Chris Liddell says the White administration prefersbilateral impactonproductivityand the systemneeds to turn around and administration’sengagement with House will listentobusinesses trade deals, R4 housing market, R11 look forward, R13 manufacturers, R8 of all kinds, R13 P2JW324000-0-R00200-1------XA

R2 | Monday, November 20, 2017 THE WALL STREET JOURNAL. JOURNAL REPORT | CEO COUNCIL The Vice President on Ta xesand Trade Mike Pence says the administration thinks they have the votes for tax reform—and offers a defense of the president’s leadership qualities

The Trump administration U.S. But let me pose the prob- is one of the most pro-business lem that some people see with JOURNAL

in recent memory. What do its that approach, which is that REET agendas mean for companies? by leaving the multilateral ST LL

Vice President Mike Pence arena, you’re creating avac- WA spoke on the state of the na- uum, in Asia in particular, that THE

tion, and then discussed a China will step in and fill. Is R range of issues with The Wall that a concern to you? FO Street Journal’s executive MR. PENCE: President Trump Washington editor, Gerald F. believes in free and fair trade, MORSE UL

Seib. Here are edited excerpts. but that multilateral deals re- PA sult in the United Stateslosing MIKE PENCE | ‘We believe that we’ve isolated North Korea economically and diplomatically in ways that have never occurred.’ Where we are leverage. He believes we’ll be MR. PENCE: Thepresident is able to advancethe interests gotaway to go to make the candidate like your response, winginghis way back from a of our countryand the coun- sale about acombination of a BiggestWorries but he wanted to inviteyou to journey across the Asia Pa- tries we’re trading with more corporate tax cut and an indi- Percentage of CEOs in the U.S. who saytheyare extremely concerned spend Fourth of July weekend cific.Hehas been about the effectively with arm’s-length vidual cut. Can you do that? about these threats to their organization's growth prospects with him, and bring your business of restoring Ameri- relationships. MR. PENCE: Ithink we can. I whole family.And his family’s canleadership on the world traveled around the country, Overregulation 56% going to be there.” We arrived stage. He joined President Xi MR. SEIB: When the other 11 meeting with businesses large on aFridaynight. We went to in China to announceagree- countries in the Trans-Pacific and small, and people getit. Cyberthreats 50% the clubhouse.Mywifeand mentsthat will benefit the Partnership say, “We’re mov- They understand what a bar- my daughter were with me. Increasing tax burden 41% American economy. ing on,” is that atrain leaving rier our tax code has been to Dave’s been running Bed- President Trump earlier with us left behind? growth and to jobs.But we Uncertain economic growth 38% minster sincethe president this year made the decision to MR. PENCE: We don’t think so. need businessleadersinthis bought it anumber of years withdraw from the Trans-Pa- This is the most powerful country to tell that story too. Geopolitical uncertainty 34% Source:PricewaterhouseCoopers ago. He walked over to the ta- cific Partnership.Americawill economy in the history of the survey of 114CEOsinthe U.S. as ble and he said to me, “I just Speed of technological change part of the 2017 Global CEO pursue bilateral trade agree- world. We’reinthe midst of MR. SEIB: Are you going to 32% Survey,conducted from wanted to check and make ments. We expect that markets renegotiating the North Amer- have 52 Senate votesgoing September to November 2016. sureeverything’sOK, and you Protectionism 27% will be open to an equal de- ican Free Trade Agreement. forward, or is this problem in THE WALL STREETJOURNAL. guys have what youneed.” I gree on both sides. Thepresident is very passion- Alabama going to cost you one said, “Oh, it’s wonderful.” America’seconomy, and ateabout this,that the United of those? cally and diplomatically in do you put up with all the Dave said, “You knowhow confidenceinAmerica, is re- Stateshas not pressed our in- MR. PENCE: We believewe’ll waysthat have never occurred chaos and periodic silliness?” he is.He’scalled acouple of bounding.Businesses from the terestsenough in recent years. have the votes. We believe before. China’staken action MR. PENCE: Icouldn’t be more timesfromthe cartomake outset of this administration I have heard it many times that we’remaking steady that they’venever takenbe- proud to be vicepresident for sure everything is squared have created 1.5million new in private, but the president progress in the United States fore. We believe they need to Donald Trump. The American away.” jobs. The stock market is set- has said it very much in public Senateand in the House of do more. Other countries in people electedthe right man Thereweretwo thingsin ting newrecords.The econ- this week,“Well, Idon’t blame Representatives and that we’ll the region need to do more. at the right time. that moment that I’veseen ev- omyhas grownbyatleast 3 China forabad trade deal.” He have the votes. But we’re tak- President Trump is abso- When we gotthe call about ery single day with President percentagepointsfor the past blamed the policymakersin ing nothing for granted. lutely committedtoachieve being considered for this job, Donald Trump.Number one is, two quarters. Beforethe end the United Stateswho have al- what is theconsensus objec- I’donly met the president he has high standards.Things of this year,we’regoing to cut lowed that kind of a relation- Dealing with Korea tive of the world community, twice. We said we were hon- have to be right. I’vespoken taxesfor working families and ship to evolve. MR. SEIB: Is there an opening andthat is that North Korea ored, but never expected we to the president everyday businesses. So Ithink the honesty of for diplomacy to solve the would abandon itsnuclear and would be asked. during this trip, with few ex- Letmealso saythat the that kind of dialogue,the North Korea nuclear problem? ballisticmissiles program. And Isaid, “There’stwo things ceptions,and everyday he’s president and Iwelcome word strength of the American MR. PENCE: President Trump that we would have anuclear- I’dwant to know. Number one, talked to me about taxcuts. that the Senate Finance Com- economy, putsusinaposition made very clear what our pol- free Korean Peninsula. I’dliketoknowthe job de- He’s totally focused. mittee will include the repeal to movetoward what the pres- icy is. First and foremost, the scription.” Because there’s Theother thing Isaw was of theindividual mandateof ident envisions,bilateral win- eraofstrategic patienceis MR. SEIB: We earlier today only one person that writes it. another quality of leadership, Obamacare. By eliminating the win trade relationships. over.We’reabsolutely com- canvassedthis group and Thesecond thing Isaid is, because when Dave said to me, mandate, we will enact taxre- mittedtoresolving this issue. asked them for questions that “We’dneed to knowthem as a “He’sgoing to want to make lief for working families. MR. SEIB: Let me turn to your All options areonthe table, I might pose to you. One per- family.” Isaid, “Now, Iknow surethingsare right,” he said sales pitch on the tax bill. We but we continue to hope and sonsaid, “I voted for Trump none of that’s possible.” This it with asmile.There’stwo The trade issue did anational poll in which we continue to work to resolve 12 months ago. Iwould vote waslateJune.Isaid we great qualities of leaders. Vi- MR. SEIB: In his work in Asia, only 16%said they favored this issue peaceably,bybring- forhim today. Ibelieve our wouldn’t be able to spend the sion and standards.Number the president enunciated a cutting corporate taxes. And ing economic and diplomatic system needs to be shaken up, kind of time together that we two,you’vegot to inspirepeo- paradigm shift in trade. We’re 37% said businesses are pay- pressure to bear. but it’s painful to watch at could get to know each other. ple to want to work foryou. going to focus on bilateral ing less than their fair share, We believethat we’veiso- times. Beingasensible Mid- Twodays later Igot acall That’sthe kind of leader Presi- dealsthat are better for the whichwould suggest you’ve lated NorthKorea economi- westerner,” that’s you, “how that said,“Not only did the dent Trump is.

CEOCOUNCIL MEMBERS

(Chief executive officers Michael Dowling, Northwell David Hunt, PGIM Shunichi Miyanaga, Mitsub- Ginni Rometty, IBM PARTICIPATING GUESTS except as noted) Health Basheer Janjua, Integnology ishi Heavy Industries Ltd. John Rosanvallon, Dassault Anne Case, Professor of Gina Drosos, Signet Barbara Jenkins, Matthew Moynahan, Falcon Jet Economics and Public Dennis Abboud, Readerlink Jewelers Superintendent, Orange Forcepoint Panu Routila, Konecranes Affairs, Emeritus, Nicholas Akins, American Francisco D’Souza, County Public Schools Deanna Mulligan, Guardian Mitchell Rudin, Vice Princeton University Electric Power Cognizant Jo Ann Jenkins, AARP Life Insurance Chairman, Mack-Cali Gary Cohn, Director, Na- Keith Allman, Masco Corp. Joachim Eberhardt, Alan Joyce, Qantas Airways Oscar Munoz, United Gisbert Ruehl, Kloeckner tional Economic Council Mukesh Ambani, Chairman President, Jaguar Land Rana Kapoor, Yes Bank Airlines Tim Ryan, U.S. Chairman, Angus Deaton, Nobel and Managing Director, Rover North America LLC Alex Karp, Palantir Rupert Murdoch, Executive PwC Laureate in Economics; Reliance Industries Ltd. Richard Edelman, Edelman Michael Kasbar, World Fuel Chairman, News Corp Amy Schabacker Dufrane, Senior Scholar and Carl Armato, Novant Health Bilal Eksi, Turkish Airlines Services Corp. Clarke Murphy, Russell HR Certification Institute Professor of Economics Johan Aurik, Global Hikmet Ersek, Western Brad Katsuyama, IEX Group Reynolds Associates George Schindler, CGI and International Affairs, Managing Partner and Union Margaret Keane, Synchrony Eileen Murray, Co-CEO, David Seaton, Fluor Corp. Emeritus, Princeton Chairman, A.T. Kearney Sharb Farjami, Global CEO, Declan Kelly, Teneo Bridgewater Associates Jahja Setiaatmadja, Betsy Devos, U.S. Secretary Ziv Aviram, OrCam Storyful Brian Kesseler, Tenneco Inc. Albert Nahmad, Watsco President Director, PT of Education Mitch Barns, Nielsen Michael Farrell, ResMed Christopher Klein, Fortune Pierre Nanterme, Accenture Bank Central Asia Tbk John Ferriola, Chairman, John Barrett, Western & Thomas Farrell, Dominion Brands Home & Security Ronald Nersesian, Keysight Charles Shaver, Axalta President and CEO, Nucor Southern Financial Group Energy Daniel Knotts, RRD C.L. Max Nikias, President, Ta kumi Shibata, Nikko Martin Ford, Author, “Rise Dominic Barton, Global Bradley Feldmann, Cubic Henry Kravis, Co-Chairman University of Southern Asset Management of the Robots: Technol- Managing Director, John Ferriola, Nucor Corp. and Co-CEO, KKR & Co. California Michael Silvestro, Flexjet ogy and the Threat of a McKinsey & Co. Dan Florness, Fastenal Co. Sarah Krevans, Sutter Ray Nolte, Managing Keith Skeoch, Standard Life Jobless Future” Patrick Bass, Thyssenkrupp John Forsyth, Wellmark Inc. Health Partner, Chief Investment Frederick Smith, FedEx Michael Froman, North America Inc. Eric Foss, Aramark Vinod Kumar, Group CEO, Officer, SkyBridge Capital Gerry Smith, Office Depot Distinguished Fellow, Inga Beale, Lloyd’s Simon Freakley, Tata Communications Indra Nooyi, PepsiCo Inc. Martin Sorrell, Group CEO, Council on Foreign Brendan Bechtel, Bechtel AlixPartners Donald Layton, Freddie Mac Gary Norcross, FIS WPP PLC Relations; former U.S. To dd Becker, Green Plains Adena Friedman, Nasdaq Claude LeBlanc, Ambac John Noseworthy, Mayo K.R. Sridhar, Bloom Energy Trade Representative Swan Gin Beh, Chairman, Jack Fusco, Cheniere Energy William Lewis, Dow Jones Clinic Arthur Steinmetz, Kevin Hassett, Chairman, Singapore Economic Ignacio Galan, Iberdrola SA Jim Lico, Fortive Patrick Pacious, Choice OppenheimerFunds Inc. White House Council of Development Board Mark Ganz, Cambia Health Robert Livingston, Dover Hotels International Inc. To dd Stevens, California Economic Advisers Marc Benioff, Salesforce Robert Garrett, Co-CEO, James Loree, Stanley Black Paul Perreault, CSL Behring Resources Corp. Jerry Kaplan, Adjunct Pro- Aneel Bhusri, Workday Inc. Hackensack Meridian & Decker Stefano Pessina, Walgreens Motokuni Ta kaoka, fessor, Stanford; Author, Richard Bielen, Protective Health Peter Lowy, Co-CEO, Boots Alliance Airweave “Humans Need Not Life Corp. Thomas Gayner, Co-CEO, Westfield Corp. Yitzhak Peterburg, Anthony Te rsigni, Apply: A Guide to Wealth Benjamin Breier, Kindred Markel Rob Lynch, VSP Global Teva Pharmaceutical Ascension and Work in the Age of Healthcare Inc. Eli Gelman, Amdocs Elie Maalouf, CEO, the Douglas Peterson, S&P Robert Thomson, Artificial Intelligence” Heather Bresch, Mylan Patrick Gelsinger, VMware Americas, IHG Global News Corp Sen. Amy Klobuchar Vincent Brun, President, Mike George, QVC Alex Mahon, Channel 4 Charles Phillips, Infor Alan Trefler, Pegasystems (D., Minn.) Vacheron Constantin Kristalina Georgieva, World Kevin Mandia, FireEye Inc. Nicholas Pinchuk, Snap-on Paul Tu fano, AmeriHealth Chris Liddell, Assistant to North America Bank William Mansfield, MUFG Richard Plepler, Home Box Caritas the President, Director of Michael Burke, Aecom Eric Gernath, SUEZ North Securities Americas Inc. Office Inc. N.V. Tyagarajan, Genpact Strategic Initiatives, The Gregory Cappelli, Executive America Kathryn Marinello, Hertz Anne Pramaggiore, ComEd Tien Tz uo, Zuora White House Chairman, Apollo Global Seifi Ghasemi, Air Products Global Holdings Anthony Pratt, Executive Jing Ulrich, Managing Di- Steve Mnuchin, U.S. William Carstanjen, & Chemicals Inc. Masahiro Maruyama, Chairman, Visy Industries rector, Vice Chairman of Secretary of the Treasury Churchill Downs Inc. Susan Gilchrist, Group CEO, Mainichi Newspapers Lawrence Prior, CSRA Inc. Asia Pacific, J.P. Morgan Theresa Payton, President Anil Chakravarthy, Brunswick Group Timothy Mayopoulos, Serge Pun, Chairman, SPA C. Vijayakumar, HCL and CEO, Fortalice Informatica Daniel Glaser, Marsh & Fannie Mae Myanmar Jay Walker, Upside Solutions; former CIO, Jim Chirico, Avaya McLennan Cos. John McAvoy, Con Edison Joel Quadracci, Jeffrey Walker, CIMC The White House Michael Choe, Charlesbank Alex Gorsky, Johnson & Bill McDermott, SAP SE Quad/Graphics Capital Mike Pence, Vice President Andrew Collins, Sentient Jet Johnson Services Inc. Karl McDonnell, Strayer Thomas Quinlan, LSC Timothy Wallace, Trinity of the United States Steven Collis, Amerisource- C.P. Gurnani, Tech Education Inc. Communications Inc. Industries Inc. Wilbur L. Ross Jr., U.S. Bergen Corp. Mahindra Ltd. To m McGee, ICSC Karan Rai, Asgard Partners Mark Weinberger, EY Secretary of Commerce Steven Corwin, NewYork- Mauricio Gutierrez, NRG Thomas McInerney, Krishnan Rajagopalan, Dion Weisler, HP Inc. Matthew J. Slaughter, Presbyterian Hospital Jim Hagedorn, Scotts Genworth Financial Inc. Heidrick & Struggles Elliot Weissbluth, Dean, Tuck School of Roger Crandall, Massachu- Miracle-Gro Co. Michael McKelvy, Gilbane D. Rajkumar, Chairman and HighTower Business, Dartmouth setts Mutual Life John Haley, Willis Towers Building Co. Managing Director, Jim Whitehurst, Red Hat Lawrence H. Summers, Bal Das, Chairman, BGD Watson Richard McKenney, Unum Bharat Petroleum Corp. Michael Wolf, Activate President Emeritus, J. Roberto Delgado, Gregory Hayes, United William McMullen, Kroger Nitin Rakesh, Mphasis Ltd. Mark Wrighton, Washington Harvard; former U.S. Sec- Founder and Group Technologies Corp. Manoj Menda, Corporate Punit Renjen, Global CEO, University in St. Louis retary of the Treasury Chairman, Transnational To m Hayes, Tyson Foods Chairman, RMZ Corp. Deloitte JefferyYabuki, Fiserv Inc. Jay Walker, Founder and Diversified Group Inc. Edward Heffernan, Alliance Fernando Mercé, Nestlé Gina Rinehart, Executive Yuanqing Ya ng, Lenovo CEO, Upside; Founder, Douglas DeVos, President, Data Systems Inc. Waters North America Chairman, Hancock Harold Yo h, Day & Priceline.com; Founder, Amway Corp. David Holmberg, Highmark Larry Merlo, CVS Health Prospecting Group Zimmermann Library of the History of Craig Donohue, Options Health Chris Michalak, Alight Girish Rishi, JDA Software Wei Zhao, Executive Human Imagination Clearing Corp. Lisa Hook, Neustar Inc. Solutions Chuck Robbins, Cisco Director, President, ZTE Sen. Mark Warner (D., Va.) P2JW324000-0-R00300-1------XA

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R4 | Monday, November 20, 2017 THE WALL STREET JOURNAL. JOURNAL REPORT | CEO COUNCIL The Bottom Line on the Ta xCuts are, I’m comfortable that we nesstaxes.Asthe president dent believes in free and fair Treasury Secretary Steven Mnuchin, optimistic will get them together. said, this is not about cutting trade. We are one of the larg- taxesfor rich people.This is est trading partnersinthe about completing tax reform before year-end, MR. BAKER: Is that 20% rate about middle-income tax cuts world. We have one of the low enough in terms of the in- and making our businesstaxes most, if not the most, open in- says the corporate rate isn’t going above 20% ternational environment to get competitive. vestment market in the world. the kind of boost to investment The president wants to make in the U.S., investment in jobs MR. BAKER: Almost the very surethat other marketsare as that you want? How important first thing the president did as open to us as we are to them. is it that it stays as close to he took office was to take the Twoofthe conversations 20% as possible? Because U.S. outofthe Trans-Pacific the president had with Presi- there is some suggestion that Partnership. The other 11 TPP dent Xi were on trade and as part of the compromise signatories or planned signa- North Korea. Thepresident process it might drift up. tories have agreed to go ahead wantstomakesurethese MR. MNUCHIN: No, it’s not go- and push on with their own other marketsare open and ing up.Ican tell youthis is trade pact. The worry is that that we have fair trade forthe one of the thingsthat the the U.S. is missing out here on U.S. president feels very strongly an opportunity for leadership about. Twenty percent. So this that other countries in the re- MR. BAKER: What about Nafta?

(2) will be asignificant taxcut for gion are seizing. Isn’t it a risk The president keeps threaten- corporations. that you’re not going to be ingtowithdraw the U.S. from part of critical discussions as Nafta if it doesn’t get the kind JOURNAL MR. BAKER: Turning to some of this critical region continues to of concessions it wants. The

REET theprovisions on the personal- grow and seek opportunities Wall Street Journal polls econ- ST tax side, one that’s causing a for growth? omists, and 89% of the econo- LL

WA lot of neuralgia for alot of MR. MNUCHIN: We fundamen- mists polled said for the U.S. members of Congress, particu- tally disagree with that inter- to pull out of Nafta would hurt THE

R larly Republican members of pretation. When I showed up the U.S. economy. Are they FO Congress in high state- and lo- at my firstG-20meeting,it wrong? cal-tax states, is the provision wasright afterthe president MR. MNUCHIN: If the end result MORSE to eliminate or to significantly had been elected. People were is we have abetterdeal, which UL

PA reduce the deductibility of concerned. People were con- is what the president wants, STEVEN MNUCHIN | ‘Fundamentally we believe that the federal government should get out of state and local taxes. cerned about our policies on that will be betterfor the U.S. the business of subsidizing the states.’ Youknowverywell there trade. People were concerned economyand forU.S.business. areanumber of Republicans about protectionism. I’m optimistic that we will re- It’s atime of tremendous last eight yearsofverylow MR. MNUCHIN: It doesn’t. Our who have already come out in Let me be clear. The presi- negotiate this deal. confidence in the U.S. economy growth. The president funda- preferenceistostart this the House and said they can’t and stock market. But there mentally believes we canget sooner.But let me just put this support it. TheSenatedoes are large question marks back to 3% or higher sustained in perspective. When youlook away with it completely in its Deficit Outlook Before TaxReform about the immediate and long- GDP. at fundamentally wherewe proposal. Is that something The Congressional Budget Office's comparison of its baseline term prospects—from pro- We have ahigh degree of are, the president’sobjectives, that you’ll be willing to be estimate of federal budget deficits and its estimate of deficits under posed tax changes to the fate confidenceingetting taxre- theHouse’sobjectives and the flexible about? PresidentTrump's proposed budget, in billions of dollars of trade deals. form done between nowand Senate’sobjectives areall MR. MNUCHIN: The issue here To put those matters in per- the end of the year.It’scritical aligned. is fundamentally we believe $1,500 spective, Wall Street Journal to the economy. We want to createacom- that thefederal government Baseline Budget Editor in Chief Gerard Baker petitivebusiness-tax system. should getout of the business 1,250 spoke with Treasury Secretary MR. BAKER: Taxes are very We have one of the highest tax of subsidizingthe states.Hav- Steven Mnuchin. Here are ed- much amoving target right rates in the world. We have a ing said that, if you’re in New 1,000 ited excerpts of the discussion. now because we have the crazy concept of,“If youleave York, you’re in New Jersey or House proposal for tax reform the money offshore, youdon’t you’re in California, for a me- 750 MR. BAKER: Does it worry you and the Senate proposal, and paytaxes.” So it’snot asur- dian income of $75,000,afam- that expectations in the mar- obviously those two have to be prisetrillions of dollarsare ily of four,you’regoing to get 500 ketand in business and con- reconciled in some way. sitting offshore. atax cut that’sover$1,000. 250 sumer confidence are maybe Twenty percent corporate rate Thepresident also wantsus Forsomeone who makes too high? of tax. The House proposal is to have middle-income tax $300,000, you’re going to get 0 MR. MNUCHIN: No,itdoesn’t to have it begin immediately in cuts. That’swhat the House atax cut, even in the high-tax worryme. People areveryex- the next fiscal year. The Sen- plan is about. That’swhat the states,ofseveral thousand 2018 ’19 ’20 ’21 ’22 ’23 ’24 ’25 ’26 ’27

cited about what the Trump atedefers it for ayear. Does Senateplan is about. When dollars. Note: The amounts shown do not include estimated macroeconomic feedback effects on administration’seconomic pol- that worry you? Given that we youlook at them, thereare Forsomeone who makes $1 the federal budget. Taking intoaccount the smaller deficits under the president’sbudget, icies are. Thepresident has have these high expectations some minor differences.But million in the high-tax states, the CBO estimates that the effects of that economic feedback would further reducethe cumulativedeficit between 2018 and 2027 by roughly $160 billion. The resulting cumulative been very clear this is all for alower-tax environment, the good news is,the objec- youare going to getanin- deficit would be 2.8% of estimated grossdomestic product, compared with 2.9% of GDP about creating growth. That does it concernyou that the tives areexactly the same. crease.But those people will excluding such feedback. we’vebeen in aperiod forthe Senate defers that tax cut? Whatever differencesthere get the benefit of lower busi- Source:Congressional Budget Office THE WALL STREETJOURNAL.

Talking About Trade Wilbur Ross explains why the administration prefers bilateral deals to multilateral ones

President Donald Trump, who has called for new trade deals since he hit the campaign trail, made it clear on his recent trip to Asia that the U.S. will drop out of the Trans-Pacific Partnership. The North American Free Trade Agreement, meanwhile, is being renegotiated. Secretary of Commerce Wilbur Ross discussed what revamped trade policies couldmean for the U.S. and its trading partners with Paul Gigot, editorial page editor of The Wall Street Jour- nal. Edited excerpts follow. Out of TPP? MR. GIGOT: You don’t think WILBUR ROSS | ‘The problem we see with multilateral is, first Timeless Italian there’s achance the U.S. might of all, it takes too long to do.’ enter the TPP, even to be able craftsmanship to renegotiate some of the MR. GIGOT: But you’re talking rather than starting with a terms? abouthaving what the presi- blank book everytime youne- The rope chain is once again MR. ROSS: Firstofall, whydo dent announced on this trip. gotiate, will also save a lot of we favorbilateral versus multi- He’s willingtodobilaterals time. in the trend spotlight. Our lateral? Theproblem we see with all comers. That means 11 with multilateral is,first of all, different bilaterals. Those are Tax bill distinctive necklace is crafted in it takestoo long to do.TPP it- not easy either. MR. GIGOT: Would you agree self took something like10 MR. ROSS: Let’s take a look at that one of the goals of the tax Italy with abit of spiraling and years, then never even came Nafta. Naftaisonaveryshort bill, particularly the corporate twisting for afresh new look. intobeing.Now,during that time fuse.It’saverylarge reform, is to make the U.S. a kind of aperiod you’vegot a agreement, averycomplicated real Mecca for investment? sort of negotiation exhaustion. agreement, needs atremen- MR. ROSS: Absolutely. Can youimagine if at the end dous amount of revision. If in of 10 yearsyou go back to your fact that’saccomplished by MR. GIGOT: Let’s say it passes spouse and yousay,“You more or lessMarch of next in aform close to what the know, dear,Ijust blew10years year,which is what the cur- House and the Senate have of my life. We couldn’t makea rent hope and plan is, mostly now submitted. Have you told deal.” That’satough, tough duetothe political calendar, the president that, if that hap- thing.Sobythe end of it, you that would be an enormously pens, the dollar is likely to go gettowherepeople want a complex thing done in a year. up, because investment’s going deal even if it isn’t the deal. to flow here, and you’re likely $ Second problem is,let’ssay MR. GIGOT: You’ll line up any to see abig increase in the 99 you’reChina and let’spretend number of bilateral deals dollar? Plus Free Shipping youweregoing to be part of those TPP countries are inter- MR. ROSS: Thedollar going up TPP,and Isay,“Iwant these ested in? You’ll knock ’em off? would be afunction of awhole Twisted Rope Necklace from Italy reforms from you,” intellec- MR. ROSS: I think so. And one lot of things. Monetarypolicy tual-property rights, so on. of the thingswehope will comes intoeffect. Theamount 3 18kt gold over sterling silver. 18" length. Graduates to ⁄8"wide. You’ll say, “Sure, but here’s come out of Nafta, even of the federal budget deficit is Lobster clasp. Shown slightly larger for detail. what I want in return.” So we though it’s a trilateral rather going to have an impact. get a little nick for that. than abilateral, is some lan- There’s a lot other than taxes Then maybe he’sJapan and guagethat we canroll out in that would have an impact on Isay,“Well, we need from you other agreements. Forexam- where the dollar trades. moreagricultural reforms.” ple,intellectual-property And he says,“Fine,but Ineed rights is not aparticularly MR. GIGOT: If you get that big Ross-Simons Item #877715 this from you.” hugeissue between us and capital inflow, you’re going to What does that mean? You Canada and Mexico. So we get an increase in the trade To receive this special offer, use offer code: ROPE69 both benefit from the nicks should be able to getadecent deficit, almost by definition. each other took out of us,even set of wording forintellectual- And that’s not something the 1.800.556.7376 or visit www.ross-simons.com/ROPE the ones youdidn’t ask for. property rights. Same thing president says he wants. Reproducethat 12 times and with some of the other sec- MR. ROSS: It is true,obviously, youhaveaprettywell nicked- tions.Wethink that having that both sides must balance up body. some standardized language, Please see ROSS page R9 P2JW324000-0-R00500-1------XA

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R6 | Monday, November 20, 2017 THE WALL STREET JOURNAL. JOURNAL REPORT | CEO COUNCIL McConnell on Ta xes And Bipartisanship

The Senate majority leader also weighs in on (2) the Alabama race and the divisions within the JOURNAL

Republican party REET ST LL

As the GOP tax bill heads us politically. thingsthat areimportant. I WA toward completion,are con- We’ll pick it up in the Sen- think it gives us ashot at THE

gressional Republicans in sync atethe week afterThanksgiv- making the corporatetax rate R with the president? ing. The markup, the drafting permanent, and it provides FO Gerald F. Seib, The Wall of the bill in the finance com- some additional funding to Street Journal’sexecutive mittee, is going on as we middle-class tax relief. So it’s MORSE UL

Washington editor, spoke with speak this week.It’ll be on the pretty appealing to us. PA MitchMcConnell,the U.S. Sen- floor the week afterThanks- SEN. MITCH McCONNELL | ‘I think the administration’s doing an outstanding job to begin to ate majority leader. Here are giving. MR. SEIB: What do you want to roll back regulations.’ edited excerpts. happen in Alabama? You said MR. SEIB: The president’s made you hope Roy Moore with- race, Roy Moore should with- Forexample,are youaresi- to see it on this issue. MR. SEIB: We’ve had alot of it clear via Twitter that he draws from the race. Do you draw.The women who’ve dent?Are you30yearsold? conversations about tax cuts, hopes you will include in the think that’s going to happen? come forward are completely Continued service is a differ- MR. SEIB: It’s not your father’s tax bills, tax reform. You’re tax bill an elimination of the If that doesn’t happen, what credible. ent matter. It’ssafetosay that Republican party, either, and theguy who has to make it individual mandate under recourse do you have? His campaign is collapsing, if he were sworn in, he would Steve Bannon is busy proving happen. Will this happen, and Obamacare. That complicates SEN. MCCONNELL: First, it will and from aRepublican point immediately be in aprocess that. He says you should be will it happen by the end of the picture because you’re notimpact taxes. No matter of viewitproduces adilemma before the Senateethics com- outofyour job by the end of this year? [The House passed commingling taxes and health. who’s elected they won’t be because the ballotshavebeen mitteeunder which the theyear, or the end of next atax bill after this interview Are you going to do that? certified till Dec.23, and so printed. I’vespoken with the women would be sworn in. He year at least. There’sadeep took place.] SEN. MCCONNELL: TheSenate we’reprettyconfident that the president. He called me from would be asked to testify un- rift in your party, and is that SEN. MCCONNELL: Yes, it will financecommitteehas decided taxissue will be dealt with by Vietnam. Italked to Gen. Kelly der oath as well. It would be a going to stop you from having happen.Everybody believes to include that. It helps in sev- the current membersofthe and the vice president. rather unusual beginning. cohesion on important legisla- it’simportant forthe country, eral ways. Theadditional reve- Senate. We’reindiscussion about tion? and obviously it’simportant to nue helps do acouple of With regard to the Alabama howtosalvagethis seat if MR. SEIB: Does it bother you SEN. MCCONNELL: We’ve dealt possible.Itappearsasifthe that we are continuing to try with this elementfor several only option would be a write- to enactbig domestic, social years. Iremind people that in, and that’sveryseldom suc- and economic changes along those who win elections make cessful, although we had an partisan lines? policy, and losers go into an- VOICES FROM THE CONFERENCE example of it in 2010.Lisa SEN. MCCONNELL: It’s a pretty other line of work. Murkowski from Alaska ran a partisan period. This is not This is an element that “Once machines were clearly tools. They were write-in campaign in the gen- your father’s Democratic emergedin2010 and 2012, something that workers used that made those eral election and actually won. Party.Thereare very few succeeded in nominating can- workers more valuable. Now, increasingly, at least Thename being most often moderate Democrats left. didates who lost in November relative to many workers, the machines are be- discussed maynot be avail- We look at the last eight and kept us from taking the able,but the Alabamian who yearsand find not achieving Senate back. coming autonomous. This means that rather than would fitthat standardwould one year of 3% growth a Isaid, “This is not working. complementing workers and making workers be the attorney general. That pretty underperforming econ- We need to start being asser- more valuable, the machines are, in many cases, obviously would be abig move omy. Ithink the administra- tive in primaries, start nomi- substituting for workers. forhim and forthe president, tion’s doing an outstanding natingpeople who canactu- but as the president is wind- job to begin to roll back regu- ally win.” We did that in 2014, “In fact, making those workers less valuable. ing his way back to the United lations.Ifwecan put on topof took the majority.Did it again And I think that that is one of the things that’s States, I’m confident this is an that pro-growth taxreform, in 2016, kept the majority. driving this significant gap between compensa- issue they’re discussing. we think there’salegitimate tion and productivity. In essence, what’s happening here is that the fruits of shot at getting the growth of MR. SEIB: Did not do it, argu- MR. SEIB: If he wins, would you our country up. ably, in Alabama in 2017. innovation and of progress are now accruing almost entirely to people at seat him or would you seek to They don’tlook at it the SEN. MCCONNELL: Very unusual the top of the income-distribution scale. It’s business owners, managers, have him expelled? same way.They think the situation in Alabama. Aspecial investors. And average people are really getting very little of that.” SEN. MCCONNELL: TheSupreme economy’sstagnant, and no election. It’sanodd time.And Court in acase in 1969 said matterhow youarrangetaxes, we’reoptimistic that we’renot John Ford, Author, “Rise of the Robots: Te chnology and the the act of seating someone, behavior doesn’t change. If going to allowpeople likeRoy Threat of a Jobless Future” swearing them in, is limited to you’re looking for bipartisan- Mooretobenominated in any constitutional qualifications. ship,Idon’t think you’regoing other state.

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R8 | Monday, November 20, 2017 THE WALL STREET JOURNAL. JOURNAL REPORT | CEO COUNCIL

MR. BECKETT: Do you, yes or ternational companies from no, approve of a20% corpo- continuing to use taxhavens HowDemocratsSee It rate tax rate? in away that Ithink will even SEN. KLOBUCHAR: Idon’t ap- see further abuse than we’ve proveofthe bill right now gotright now. So whether the with that rate in it, foralot of rate is 20% or 25%, if you’ve the reasons Mark just out- got large multinationals pay- lined. But Idowant to bring ing effectiverates of 2% or 3%, down the corporatetax rate.I that is notfair to our domestic want to simplify the taxes. core who aregoing to be pay- My issue with this reform ing a much, much higher rate bill is the debt piece, the $1.5 in the current plan. trillion. Iwish, when the president had gotten elected, that Recent gains he had worked with Sen. MR. BECKETT: Democrats had Chuck Schumer—who wanted very good elections in Virginia to do something about the and in New Jersey and Wash- overseas money—and tied it in ington state last week. One with infrastructure, which had lesson from each of you, suc- always been our plan, and cinctly please, on what we then combined that with should take away from that. thingsthat could truly help SEN. WARNER: If the Republi-

(2) the middle class, which would canparty continues down this include aminimum-wagein- civil war, and an agenda that crease that we haven’t seen is anti-immigrant, divisive in JOURNAL foryears, doing something an Americathat is increas-

REET aboutthe student-loan refi- ingly diverse,they’regoing to ST nancing. getwiped out in not just tradi- LL

WA Thereare anumber of tional areas but in the sub- things that we could’ve done. urbs.And increasingly,we THE

R But right now, this waited till even sawinpartsofrural Vir- FO afterall this divisiveness, and ginia, ashiftaround. So I we are where we are. think those of us who arepro- Amy Klobuchar and Mark Warner MORSE business, who arepro-compet- UL

PA MR. BECKETT: Should Itake itive, maybe therecould be that as a long no? some strange new alliances. SEN. KLOBUCHAR: OK. Sens. Amy Klobuchar and Mark Warner say they are for tax SEN. WARNER: At $20 trillion MR. BECKETT: Your one take- in debt,a100-basis-point in- away, Sen. Klobuchar? reform. But not the way the Republicans are going about it. crease in interest ratesadds SEN. KLOBUCHAR: People want about $150 billion, $160 billion apositivemessage. They With Republicans in control national-security issues with does not keep us competitive. term as a full-time employee. ayear,inadditional debt pay- didn’t likehow Ed Gillespie of all three branches of the finding out that Russia actu- But the real disadvantage Those jobs,again, aredisap- ments. That’smorethan we [the losing Republican candi- federal government, Paul Beck- ally used rubles to buy ads on spot right nowisfor low- and pearing. Think about atax- spend federally at the Educa- date for governor in Virginia] ett, Washington bureau chief Facebook.But it is biggerthan moderate-income people not code reform that’sgoing to be tion Department andHome- ranthe campaign. And all this of TheWall Street Journal, that: $1.4billion wasspent on having the training they need forward-leaning.And unfortu- land Security together. negativity is going to boomer- askedtwo Democratic sena- these online ads by political to continue to upgrade their nately,Idon’t think that’s There’s nothing in this tax ang back at the people that tors—Amy Klobucharof Min- campaigns,byissue groups, skills. what’staking placeright now. code that will discouragein- run campaigns like that. nesota and Mark Warner of just in the last election. So If we’regoing to do repatri- Virginia—whattheir party’s this isn’t about regulating the ation, which I agree, and give message will be heading into internet. You’regoing to have folks an enormously advanta- the 2018 elections. Edited ex- another set of eyes looking at geous rate,why not saypart cerpts follow. these ads,tohelp ferret out of the priceofthat repatria- VOICES FROM THE CONFERENCE where they came from. tion would be ameaningful Social-media ads worker-training program for “This administration and particularly this president MR. BECKETT: You are both GOP tax plan anybody that makes less than has been very engaging with manufacturing com- sponsors [along with Sen. MR. BECKETT: Republicans $80,000 ayear so that thereis panies, businesses in general. I think that’s some- John McCain]ofabill that sound very optimistic about some assurancethat the bene- what expected, given his background. But I have wouldrequire disclosure of getting tax cuts through. That fits that are going to go, writ sponsorshipfor political ad- will give them some momen- large, to corporateAmerica, found the president and the administration to be vertising on social media, as is tum going into 2018, and an will at least flow through to more open and willing to engage and have serious required in other media, like economic stimulus and some of the workforce? discussions about the issues that face manufac- television. What’s behind that achievement they can tout. Whynot think about apor- turing, more so than in the past.” bill and does it have any What is the Democratic mes- table-benefit system so that chance of passage? sage to counter that? people canmovefromjob to John Ferriola, Chairman, President and Chief SEN. KLOBUCHAR: Ithink it SEN. WARNER: We need sub- job? We have asocial-benefits Executive Officer, Nucor Corp. does have achanceofpassage. stantial taxreform; having the system whereyou only getso- Firstofall, there’sthe obvious highest nominal corporaterate cial benefitsifyou work long-

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morerisk than afive-year sun- would be devastating to the set. Mexican economybecause it’s Ross such abig part. We are80- VOICES FROM THE CONFERENCE ContinuedfrompageR4 MR. GIGOT: You referred to the some-odd percent of all their because that’sjust the way the politics of the timetable of exportsand Ithink the “Biology and business are about to intersect math works. Nafta, and you have the Mexi- amount of their exports to us more and more.…Imagine, for a second, a can election that’s coming up. is something like30% of their group of app writers create a new app to- MR. GIGOT: Correct. Obviously that will affect their economy. So you’retalking

morrow to come up with a way to detect JOURNAL MR. ROSS: But it is not inevita- willingness, their ability to about abig,big-time problem

ble what that does to the cur- compromise. If you can’t work forMexico. And it’salso abig- whether or not you’re lying. It checks your REET rencybecause of other factors. something out by March, is the time problem forCanada. It respiration, your pupil dilation, your tone of ST LL

presidentprepared to unilater- would be far moredamaging voice. A bunch of things that are completely WA MR. GIGOT: But let’s just deal ally withdraw from Nafta? to them than to us. unconscious.…Everybody would download THE with atrade deficit then. Ev- MR. ROSS: Ithink the president R erything works, you get the tax has spoken for himself on in- MR. GIGOT: Ican’t assume that the app. If it were free, everybody would FO bill through, growth pops up numerable occasions.His gen- you, as U.S. Commerce Secre- have it in a matter of days. And suppos- like your White House Council eral point of viewisthat no tary, would enjoy economic MORSE ing…you could use it the first 20 times free, UL of Economic Advisers says, deal is betterthan aterrible damage in two of our biggest and after you were sure it worked, it was a PA youget an influx of capital, deal. trading partners and neigh- andwages are going up, you bors. That certainly wouldn’t dollar every time. How big a business would you have with that app? get 3% growth—uh-oh, the MR. GIGOT: What do you think help us. “How many industries would be changed if lying were not possible?” trade deficit’s also going up. the economic impact would be MR. ROSS: No.Iwould cer- Jay Walker, Founder, Library of the History of Human Imagination; Can you live with that if you’re of unilateral American with- tainly prefer them to come to this administration? drawal from Nafta? their senses and makeasensi- Founder and CEO, Upside; Founder, Priceline.com MR. ROSS: We’reusing trade MR. ROSS: Forone thing,it ble deal. deficit as a shorthand way of saying jobcreation.Job creation is thereal purpose of reducing the trade deficit, and it’swhy the way we mainly wish to reducethe deficit is by increasing our exports as op- posed to constricting imports. That way youhavemoretotal trade,and youhaveareduc- tion in the deficit.

MR. GIGOT: Nafta negotiations resume again, Ithink, later this week. Businesspeople are concernedabout some of the U.S. negotiating positions, particularly the five-year sunset clause. How as abusinessper- son can you make an investment decision about where to invest multibillion dollars, per- haps, if the whole thing you’re basing it on goes away in five years? MR. ROSS: Right nowinNafta, businesses areexposed to a six-month termination. Anyof the three countries cantermi- nate it on six months’ notice.

MR. GIGOT: But there’s never been an assumption anybody would do that until— MR. ROSS: It maynot have been an assumption, but it’sa fact. So there’sright nowa shorter-term trigger than the five years, plus the five years just says in effect that the presidentmust makeacon- scious decision to continue it. Assuming it’sanagreement that’sworking well, and that’s the general assumption that people aremaking,why would anyone terminate it? We think the discipline of saying, “OK, we’ll do the best trade agreement we can. Chances arewe’ll getsome- thing wrong in it that’ll need fixing.” Having this formal period of five yearsisagood way to deal with that.

MR. GIGOT: But your message to CEOs who are thinking, “Do Ibuild that plant in Mexico or do IgotoMalaysia”—that sunset provision shouldn’t worry them? MR. ROSS: Thereare lotsof partsofthe world that are very low-cost that have alot

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R10 | Monday, November 20, 2017 THE WALL STREET JOURNAL.

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THE WALL STREET JOURNAL. Monday, November 20, 2017|R11 JOURNAL REPORT | CEO COUNCIL In Defense of the Current Ta xBills Gary Cohn on removing the health-insurance mandate, as well as why the plans will improve (2)

productivity, and the impact on housing JOURNAL REET Taxes are front and center ductivity’s declined. How is a lot of damage. ST LL

in the minds of businesspeople that going to change? Iknow that people think WA and citizens as the House and MR. COHN: The regulatory en- that only affects the wealthy. THE

Senate try to hash out abill. vironment has had ahugeim- But actually, there’s ahuge R There are potentially sweeping pact on productivity. Nonpro- number of people who have FO changes in the works, includ- ductive regulation is chewing loans in that range. There’s ing removing the deduction for up enormous amountsofcom- concernthat could do really MORSE UL

state and local taxes. pany earnings that they can’t quitesignificant damage to PA Wall Street Journal Editor reinvest intowhat is really thehousing sector. Do you GARY COHN | ‘The regulatory environment has had a huge impact on productivity.’ in Chief Gerard Baker spoke productivity.Weneed to roll worry about that? with Gary Cohn,aformer back that regulation. We need MR. COHN: Iworryabout ev- don’tbuy houses because of they think they’regoing to be going down. Potentially, their Goldman Sachs executive and to make our businesses more erything.Soofcourse Iworry deductibility of interest. Peo- employedfor along time,they spouse is getting a job and is currently assistant to the pres- competitive. I’m not looking to about it. But Ithink when you ple buy houses because they’re think the businessthey’re in the same fundamental char- ident for economic policy and deregulateour businesses.But look at the data and you look bullish on the economy, working forissolvent, they acteristics.That’swhen people director of theNational Eco- we’relooking to allowthem to at the reality,people really they’regainfully employed, think their payisgoing up,not tend to buy houses. nomic Council. Here are edited competeand be moreproduc- excerpts of the conversation. tivethan businesses around the world. Why now? MR. BAKER: Why is now agood MR. BAKER: Is it really impor- time to be cutting taxes, to be tant to have the tax bill done increasing the deficit signifi- by Dec. 31? cantly? MR. COHN: We’vegot to get MR. COHN: When youlook at taxesdone this year.The legis- what’shappened to the U.S. lativecalendar is going to get workforce sincethe recession, very crowded come the first, yes, we’vecreated jobs.But second week of December. wages have been growing ba- Thereare abunch of issues sically in line with lowinfla- that gotpunted forafew tion. One of the big driversof months intothe firstand sec- our tax-reform policyistoget ond week of December.

MR. BAKER: One item Iwant to Focused on Taxes ask you about is a plan to re- FINTECH Percentage of CEOs who chose introducethe removal of the each of these actions as the best mandate requiring people to waytoaccelerateU.S. economic sign up for health insurance. ESG growth in the following 12 There are concerns that once months you start pulling on that string, all kinds of difficult BLACKSWANS Regulatory things arise. Would you wel- come that? Corporate reforms MR. COHN: We’resupportiveof tax reform it. Taxreform is really impor- BLOCKCHAIN 71% 13% tant to us in the administration. I think it’s important to 12% the House and Senate. We have to getthat done.Ifwe Infrastructure canget the individual mandate Other | 5% spending repealed as well, that to us is Source:BusinessRoundtable survey of 119 a real windfall, and we’d love CEOs in the U.S., conducted in April to see that happen. But we’re THE WALL STREETJOURNAL. still plodding ahead on taxreform whether it happens or real wage growth back into whether it doesn’t happen. the United States. When we talk about lowering taxeson Local matters businesses, one of the results MR. BAKER: The state- and lo- of that is that the businesses cal-tax deduction elimination. aregoing to be able to pay Do you think there should be their workersmore. We know at least some support for some that individuals know how to people who are going to be hit spend their money much more who pay a lot in state and lo- efficiently than the govern- cal taxes? ment does. The multiplier ef- MR. COHN: I don’t think that’s fect of individuals spending is aproper characterization. The substantially higher than the question should be,dothe multiplier effect of govern- bills deliver middle-income tax ment spending. relief? And the answer is yes. Howthey getthereisdiffer- MR. BAKER: U.S. economic ent. Theonly way to grade growth has been about 2% for whether it’s successful or not the last 10 years. Alarge part is to literally look at the ta- of the reason why the trend bles, look at the distribution, seemstohave dropped from and say, “Does this do what 3% 20 years ago seems to be we want it to do? And does demographics. The other phe- this deliver tax relief to hard- nomenon is productivity, working American families?” which has been weak. What’s And the answertoboth bills is going to go on with this tax yes, it does.Soyes,they’veat- cut to raise productivity? tacked it different ways, but MR. COHN: One of the big com- ultimately they gettothe ponentsofthe taxbill is im- same answer. Tracktopicsofhighimportance mediate expensing for capital expenditures.There’sanenor- MR. BAKER: The doubling of mous amount of capital expen- the standard deduction will before they become high-risk ditures that canbespent in for a lot of people mean that the system that enhance pro- there’s no point anymore in ductivity. deductingtheir mortgage interest because they have some- Introducing DowJones CuratedInsights—bespokebusinessbriefings MR. BAKER: But we’ve seen this thing that’s below the stan- enormous investment in tech- dard deduction. There’s a lot designed to helpyou avoiddisruptiveforces, identify peripheral risks nology in the last 25 years, yet of concern in the housing sec- and seizeopportunities.Followupto18different topics,fromdronesto there has been no increase in tor, lots of lobbying’s going productivity in that time. Pro- on, that this could really cause blockchain, as well as ourweeklyDisruption InsightRadar.Exclusively available and curatedfor Factivamembers. VOICES FROM THE CONFERENCE DowJones CuratedInsights “Artificial intelligence isn’t magic. In fact, it’s not really about Join nowatdowjones.com/curation intelligence at all. It’s better understood as simply the latest ad- vance in automation. Its effects on society in general and labor markets in particular are likely to be very much like previous waves of automation, such as the invention of the electric lightbulb or air travel or the automobile or television or the digital computers. Now, each of those innovations put plenty of people out of work. But more importantly, they increased our wealth and created a raft of new jobs and pro- fessions.” Jerry Kaplan, Adjunct Professor, Stanford University; Author, “Humans Need Not Apply” ©2017 DowJones &Company,Inc. All rights reserved. 4DJ6057 P2JW324000-0-R01200-1------XA

R12 | Monday, November 20, 2017 THE WALL STREET JOURNAL. JOURNAL REPORT | CEO COUNCIL

DR. CASE: In everystate, MS. ADAMY: You found that deaths from suicide have in- thoseinmiddle age now are creased between 1999 and likely to be worseoff in old 2015.Inevery statebut two, agethan the current popula- alcoholic liver disease and cir- tion. Can anything be done rhosis increases.Inevery about that? state, drug overdoses. DR. DEATON: Several people have used the term lost gener- MS. ADAMY: Interestingly, ation forthose people.It’s

(3) among blacks and Hispanics, very unclear what to do with mortality rates have fallen re- them.Their economic status gardless of education level. will improvealittle bit as they JOURNAL Why is that? move into old age, simply be-

REET DR. CASE: That wasone of the cause initial Social Security ST firstsurprises to hit us.When paymentsare indexedonaver- LL

WA we think about bad things, we age wages. usually think that the first Butwedon’t think financial THE

R population to be hit are Afri- security is the essence of this FO can-Americans. But the death matter. We think their lives ratesfromalcohol and drugs will come apart in the way MORSE fell through the ‘90s and the that Anne has been talking UL

PA early 2000s until about 2010 about. You’rea55-year-old ANNE CASE | ‘It isn’t just about the financial crisis.’ ANGUS DEATON | ‘Something is very wrong.’ forAfrican-Americans,while guy. Youhavenever been mar- they rose for whites. ried, but you’ve been in three So then, if you’redigging consecutiverelationships.You intowhat the underlying have three setsofkids,none causes are, we arebeginning of whom youknowanymore to speculateabout working- because the younger ones are ‘Two Americas,’Updated classwhites possibly having living with other guys.The the pillarsthat held up their community that youused to Angus Deaton and Anne Case discuss what’s behind the rising lives beginning to crumble. have has disintegrated. Manypeople have mixed mortality rates among white Americans without college degrees Lost generation views about unions,but MS. ADAMY: And what were unions used to givepeople those pillars? some measureofcontrol at Nobel Prize-winning econo- correct. Bad things are really overdose,for alcoholism are tries? DR. CASE: Having a job with a work.They gavethem asocial mist Angus Deaton and his fel- happening, and they’recon- rising forpeople without a DR. DEATON: One of the imme- ladder up,with on-the-job lifeand political representa- low Princeton University pro- tinuing to happen. college degree. Those are the diatethingsisopioids.Euro- training,with benefits. Having tion in Washington, which fessor and wife, Anne Case, We dug down alot more bigincreases that we’resee- pean countries have much ajob whereyou could actually doesn’t really exist anymore. made headlines two years ago into the educational differ- ing,and it isn’t just about the tighter controls on the way ask awoman to marryyou and when they reported that mor- ences and found that it is very financial crisis.This started opioidsare distributed. There she would marryyou. Now, MS. ADAMY: Can employers do tality rates among white, much atwo-Americas situa- back as faraswecan break has been none of this mass marriagerates amongwork- anything to help improve the working-class Americans are tion, wherepeople with bache- out education in death certifi- prescribing of opioids that has ing-classpeople areway fortunes of this working-class going up in contrast to other lor’s degrees are doing pretty cates, which is 1990.Ithas happened in the U.S. We have down. She doesn’t want to population? demographic groups in the well and those without them been aslow, steady trend up to getthat genie back in the marryhim if he doesn’t have a DR. CASE: We don’t think the U.S. aren’t doing very well at all. in all three of those forpeople bottle. That’s very important, good job. answer is getting everyone to Since then, the two have without a B.A. but it isn’t all of it. Of the Cohabitation is way up.But go to college. That doesn’t continued to dig into what is MS. ADAMY: And you discov- In addition to that, we’ve three [types of] deaths we’ve unlikeinEurope,wherethose seem realistic.The problem, behind the increase in “deaths ered that the mortality rates stoppedmaking progresson looked at, suicides,opioids, cohabitations arequitestable, we think, is that these people of despair” among white, mid- among this population of heart disease in the U.S., and alcoholic liver disease,the in the U.S.,they arefragile. don’t have anystanding in the dle-aged Americans with low white Americans have wors- which is stunning.Every other biggest single one is opioids. Neither of them has agood labor market anymore. levels of education. They sat ened in away that has no his- countrycontinues to watch But the other two together are job.They aren’t married, so The minimum wage hasn’t down with Wall Street Journal torical precedent? mortality fall. Antihyperten- bigger than opioids. they don’t have that stability. increasedsince, what, 1997? News Editor Janet Adamy to DR. DEATON: That’s right. You sives and people stopping DR. CASE: Ithink opioids made And they’vemoved away from Noncompeteclauses in labor discuss their latest findings. can find episodes like the flu smoking had hugeeffectson it a perfect storm. But it was what we call legacy churches, contracts, even forworking- Edited excerpts follow. epidemic or wartimes when deaths from heart disease.But the case that people were kill- the Catholic and Protestant class people, mean they can’t mortality ratesgoup, but sus- our mortality ratesfromheart ing themselves slowly with al- churches,toward evangelical take ajob forhigher wages Two Americas tained increases in mortality disease have flatlined and cohol or quickly with guns churches, which focus on the elsewhere. I think the lack of MS. ADAMY: You were here two forany major group in anyso- that’sareally big killer.Sowe even before the opioid crisis individual. It’smypersonal re- enforcement of antitrust laws years ago. Since then, Donald ciety are really quite rare. It’s have to betterunderstand why started. OxyContin wasn’t lationship with my savior, means that some very large Trump has been elected presi- an indication that something that has happened in the U.S. even on themarket until 1996. rather than it being about us employers have [too much] dent. The opioid crisis has is very wrong. We also want people to under- as a community. poweroverthe workforce. worsened. What has your re- MS. ADAMY: There is astark stand that this [is affecting] So those pillarsoflife— And so I think that one of the search found since then? MS. ADAMY: Anne, why exactly difference in terms of what is women, as well as men. church, family, job—have dis- thingsthat could happen is DR. DEATON: We’vedug alot is this happening? happening in the U.S. versus appeared for the white work- trying to rebuild the social deeper intothe details.We’ve DR. CASE: Ithink thereare sev- our peer countries. Why is MS. ADAMY: What do you see ing classinaway that it contract between labor and discovered that it wasnoflash eral answers to that. Mortality white mortality going up in the in terms of geography? Where hasn’t really been the case for capital. We areall at risk if we in the pan. Thenumberswere ratesfor suicide,for drug U.S., but not in other coun- is this happening? blacks. don’t do that.

The Basis for3%Growth Economist Kevin Hassett says it’s doable, provided tax reform is passed

The Trump administration has an ambitious economic plan: It says the U.S. can achieve gross-domestic-product growth of 3% or more an- nually, fueled in part by the Republican tax-cutproposal currently working its way through Congress. Whether 3% growth is likely or even possible, however, re- mains amatter of debate among analysts and economists. Kevin Hassett,the chairman of the White House Council of Economic Advisers, sat down with Jon Hilsenrath, the global economics editor of The Wall Street Journal, to discuss the 3% growth target and the KEVIN HASSETT | ‘Capital spending is heading back up.’ forces and trends that could help or hinder it.Edited ex- MR. HASSETT: In the near that thereare going to be alot cerpts follow. term, we’vegot businesstax of newfactories going in the reform planned, and it looks U.S.,driving up the demand ’Magic moment’ highly likely to pass. Every- forworkersand driving up MR. HILSENRATH: So the ad- body who is counting votes wages. ministration is looking for 3% seems optimistic. And it’s go- That should lead to more growth. Why do you think the ing to repair abadly broken labor-force participation, U.S. cansustain that level of corporatetax system. The which has been heading in the growth in the months ahead? OECD,probably about ade- wrong direction lately.But if it MR. HASSETT: We’vehad a cade ago, told us that we need turns around, youcould get couple of quartersinarow of to have corporatereform in north of 1.8%. 3% growth. Thefirst one of the U.S. because we’rechasing those wassomething of a capital off shore. And if we fix MR. HILSENRATH: Unemploy- weather-related phenomenon, that, we’ll getasurge in capi- ment is at 4.1%. This is alevel but the fourth quarter is look- talspending in the U.S.,which that economists sometimes de- ing likeit’sgoing to be in would driveupGDP growth in scribe as “at or even below full aboutthe same range, so the short term. employment,” the idea being we’regoing intonextyear Idon’t knowwhat the Fed’s that if it goes much lower, the with asignificant amount of assumptions areabout economy risks potentially momentum.And if youlook whether the taxreform passes. overheating. Would you say down into the nutsand bolts But I would guess that if you that is where we are now? of the numbers, the thing that reducethe user cost of capital MR. HASSETT: If youlook at jumps out at me is that capital by about 15%, which is our es- the historyofbusinesscycles, formation is really starting to timateofwhat it does,then it is precisely now, when labor pick up this year. that should increase capital marketsare pretty tight in Business capital spending spending andGDP growth in places,that youstart to see wasreally,really bad over the the short run, for sure. income inequality decline and last few years. Now, business wage growth increase. And if pessimism seems to have MR. HILSENRATH: So are you we were to take that sort of waned and capital spending is saying that 3% growth is pos- magic moment, where things heading back up,and Ithink sible for the short run, but not are teed up to reconnect peo- that has something to do with so much for the longer run? ple to the labor forceand give optimism about taxreform MR. HASSETT: It depends how them awagehike, and then we and something to do with the far yougoout. Thereare alot reform our taxcode so that president’sregulatoryagenda. of things that can be stimula- factories want to locateinthe tivefor growth morethan just U.S.,itcould be really trans- MR. HILSENRATH: The Federal ayear out, likeattemptstoin- formative for our economy. Reserve projects long-term crease labor-force participa- growth around 1.8%. What do tion. Theidea that being close MR. HILSENRATH: We’ve had you see that the Fed isn’t see- to full employment, becoming periods in the past where un- ingright now in terms of the an attractive place for capital employment was at or near economy’s long-run prospects? to locateagain, should mean PleaseturntopageR13 P2JW324000-0-R01300-11FFFB5178F

THE WALL STREET JOURNAL. Monday, November 20, 2017|R13 JOURNAL REPORT | CEO COUNCIL Preparing Yo uth ForFutureJobs Betsy DeVos says the education system has tended to look backward rather than forward (2)

Education is consistently a third or fourth grade. passed in 2015,which is just JOURNAL

topconcern of executives at When youlook beyond 12th nowstarting to getenacted, REET The Wall Street Journal’s an- grade, for several decades we returns a lot of the flexibility ST LL

nual CEO Council gatherings. have given the messagethat andcontrol to the states for WA Preparing youth for the jobs of the only successfulpath to K-12 education. THE

today, as well as the ever- adult lifeisthrough afour- Nowwe’rereceiving the R evolving workplace of tomor- year collegeoruniversity.And plans and reviewing them. It’s FO row, is a challenge that many that has been at the expense my goal to approveevery sin- business leaders think we of lots of great opportunities. gle plan that follows the law MORSE UL

aren’t meeting. that Congresspassed. We PA Secretary of Education MR. MURRAY: When you think hope that states will take the BETSY DEVOS | ‘We have not had a state where every single parent has the power to make Betsy DeVos spoke with Matt about how many of our stu- opportunity to be creative in that choice for their child.’ Murray, the Journal’s executive dentsare prepared for this howthey’readdressing the editor, about how American worldinthe way that you needs of students. everysingle parent has the education can better rise to think they need to be, are half powertomakethat choicefor Held Back that challenge and the role of of them ready for this today? MR. MURRAY: You like to high- their child. But in Florida, Percentage of U.S. middle-market executives in each industry who the federal government in mak- Is it lower than that? How light programs that you think where there are districts that sayashortage of talentconstrains their company's abilitytogrow ing it happen. Here are edited badly are we failing here? are unique, programs that you have a fairly high percentage excerpts of their conversation. MRS. DEVOS: Children starting think are great. But what of students opting to go to a Health care 49% kindergarten this year facea should be the minimal accept- school other than their as- Stoking curiosity prospect of having 65% of the able education attainment? signed school, all the perfor- Services 46% MR. MURRAY: We’ve heard a jobs they will ultimately fill Because there is areal in- manceinthat district has im- Construction 46% lot during this conference notyet having been created. equality problem in our educa- proved. So it says to me that about things like artificial in- Youhavetothink differently tion system, isn’t there? How with even more of those op- Manufacturing 44% telligence,the digitization of about what the role of educa- do we raise that floor? tions, we’re going to see even Financial services 33% the workplace, changes that tion and preparation is. MRS. DEVOS: Probably most if better results ultimately. are already happening and In talking with alot of busi- not all of us in this room have Retail trade 29% that we all think are going to nesspeople and otherswho had the ability to choose our After high school Wholesale trade 20% accelerate. You’ve been in the have to ultimately employ in- children’seducational settings. MR. MURRAY: Now, on post- job almost ayear. What’s your dividuals,the skills that we Thereality also is that many K-12 education, it sounds like Total middle market 37% overall assessment of the pre- have to be preparing kids with parentsdon’t have that power. you’d like aworld that has Source:National Center for theMiddleMarket paredness of U.S. workers to- are, simply put, in four areas: That hasstunted creativity in many more optionsfor stu- survey of 1,000C-suite executives at midsize day for this world and the critical-thinking skills; the the education world forde- dentsthan just the four-year companiesinthe U.S., completed December 2016. THE WALL STREETJOURNAL. world that’s coming? ability to collaborateand work cades.Westill fundamentally degree. How can we develop MRS. DEVOS: We have alot of well with others, as we do in operateonamodel that was vocational schools and other being exposed to learning colleges,for example,orother opportunityfor improvement. all of the rest of life, but not brought to us 150 yearsago by kinds of options, other path- about those options and op- local institutions. If you have Therecertainly arestudents so much in school; the ability thePrussians.Wehavenot de- ways to careers and success? portunitiesatamuch earlier needs in your community that who leave high school and col- to communicatewell both viated fundamentally from that MRS. DEVOS: Firstofall, we stage. It would help kids to aregoing unfilled or in your legewell prepared forthe orally and in written commu- approach, yeteverything has need to honor and respect learn early on whether they business that aregoing un- world that awaitsthem, but nications; and then creativity. changedinthe world. thosevarious avenues and liketowork with their hands, filled, I’veseen several great much of the systems we’vere- And my observation of alot of Ifundamentally believethat pathways. To alarge extent we or whether they want to do examples of community col- lied on in education fordecades studentstodayisthey’renot if and when we empowerall have stigmatized them forthe something that requires them leges that have partnered with tend to be backward-looking having their needs met to be parentstomakethat right last couple of decades or to sit and think all day. industryintheir region and versus forward-looking. prepared in those areas. choicefor their child, we will more, yettodayweknowthat have planned out curriculum It’smygoal to bring afo- see the kind of creativity enter- only about 30% of students MR. MURRAY: What can the and certifications to specifi- cus,inthe K-12 area, to em- MR. MURRAY: What’s your phi- ing education that we need to will ultimately ever graduate government do to seed and cally meet those needs. powering parentsand students losophy of what the Education see that will ultimately prepare from afour-year collegeor fund those pathways? Is it all Some studentsenter those in a new way to find the edu- Department can do and what studentstobeactivepartici- university. up to private enterprise? Is it programs and take nine cation environment that is it shouldn’t do? pantsinthe workforce,and to We currently have 6.1mil- all up to the states? Is it all up months to ayear of amicro right forthem, that is going to MRS. DEVOS: Ithink there’sa be job creatorsthemselves. lion jobs that requiresome to the institution? degree forsomething,and then stoke the curiosity that is in- much larger role for states to School-choiceprograms are level of education beyond high MRS. DEVOS: It’sreally impor- they will go and work forafew nate in every child and not to play. TheEvery Student Suc- still at relatively small scale. school that areunfilled. Alot tant for businesses to engage years, and then come back for kill it by the time they’rein ceeds Act that Congress We have not had astate where of studentswould benefit from with their local community another level of education.

VOICES FROM THE CONFERENCE “We will deal with any businesses that are knowl- edgeable and can contribute in a way that we think’s constructive on the agenda that we have. The message I would give to people is we’re not there to necessarily deal with every individual company’s every individual issue. That’s not us. We have multiple stakeholders that we need to address. “But businesses know that this is an administration that is receptive to feedback from business. This is an administration that will listen to businesses of all natures, large and small, of any industry in thinking about policy frameworks. I think from a business point of view, that’s the most you can expect.” Chris Liddell, Assistant to the President and Director of Strategic Initiatives, the White House

MR. HASSETT: Themarket is But if arecession were to likeanexpectation mechanism happen, fiscal policywould Hassett for the future, right? It looks probably be part of themix. Continuedfromthepriorpage at all the thingsthat might That is somethingthat even 4%, or even lower, and we had happen and putsprobabilities nowwe’restudying and start- financial bubbles. Is there a on them. And if youthink ing to think about at CEA be- risk of that if unemployment about whyprices arewhere cause youdon’t wait forthe keeps falling? they areright now, it must be rainy day to buy an umbrella. MR. HASSETT: Thereisdefi- because the market has fac- nitely alwaysthat risk.But I toredinsome probability that Insurance policy think about it this way: If un- this taxreform will pass. If all MR. HILSENRATH: So what are employment is 7% and you’re of asudden we learn that it the fiscal options that this ad- a firm that wants to increase won’t, then that’s going to be ministration would look at if output, youcan getacheap very bad news for markets. we hit another downturn? worker off the unemployment MR. HASSETT: Something line.But if the unemployment MR. HILSENRATH: The current we’vestudied alot sincethe rate is what it is now, and expansionismore than eight summer is that the “shovel you’reacompanythat’sgot years old. We’ve never had an ready” project idea isn’t nec- listings but nobody is apply- expansion go longer than 10 essarily agood one.Infra- ing,then youhavetoinvest in years. What is in this adminis- structureinvestment is are- increasing the productivity of tration’s tool kit and in the ally great investment for our the people youhave. And that Fed’s tool kit for when we go economyand it’ssomething productivity increase likely into the next recession? the president has talked about will transfer into wage in- MR. HASSETT: First, Idon’t a lot since the campaign, but creases. think that the evidence is too youaren’t necessarily going to If that happens,ifweget convincing that recoveries die getinfrastructurespending the productivity-enhancing of old age. Very often, there’s out in the next six months to capital formation, we can ex- aprecipitating event. So while stimulate the economy. Other pect this to be asustainable recessions are going to come things, such as taxvariables, higher level of growth that intoour futurefor sure, I seem to have aquicker re- would affirm the expectations don’t think that the odds of sponse time. of markets. Idon’t think the recession in the next year are sort of productivity enhance- unusually high just because MR. HILSENRATH: You’re pull- ment that we need to stay at we’re eight years in. ingthat lever now, with this 3% growth is something that That said,ifthe recovery major tax overhaul? anyone who is reasonable continues and the Fednormal- MR. HASSETT: Right. Again, if would project if we don’t pass izes monetarypolicyeven we become the most attractive taxreform. Therefore, the more, it will have an ample placeonEarth to locate, which market might even already be tool kit to draw on. Ithink the Ithink we might be if you ahead of itself if the taxre- macroeconomics literaturehas weigh all of the factors, then form doesn’t pass. suggested that the Fedismore thereisgoing to be abig in- nimble in recessions and that crease in capital formation in MR. HILSENRATH: When you attemptstouse Keynesian- the U.S. That should be some say, “might even be ahead of style stimulus have oftenbeen timely insurancethis deep into itself,” what do you mean? too late. the recovery. P2JW324000-0-R01400-1------XA

R14 | Monday, November 20, 2017 THE WALL STREET JOURNAL. JOURNAL REPORT | CEO COUNCIL The Wrong WaytoThink About Trade pay for itself. Is he right? Lawrence Summers on the MR. SUMMERS: Could it turn out that growth accelerated? dangers of current policies Yes. If youwereabout [toroll] adie and Ipredicted that it Lawrence Summers was Of course trade agreements wasgoing to come up 12, I secretary of the Treasury un- should be made in our na- could turn out to be right, but der Bill Clinton and director of tional interest. That is the it would be acrazy prediction. the National Economic Council rightfocus.They should not Idon’t think thereisany under Barack Obama.Thus, be endeavors at altruism.DoI rational basis forthe judg- many of the policies he helped think the trade agreements ment that the taxcut will pay enact are now being reversed we’ve had are perfect? No, of for itself. There is nothing in or assailed by President Don- course not. But therehave the experienceofpast tax ald Trump.Mr. Summers fundamentally been much cuts, nor in the experienceofa shared his views on current greater changes by the other JOURNAL large number of modeling ex-

economic policies with Greg Ip, countries than ours, and if we REET ercises that suggest that this The Wall Street Journal’s chief repeal them, other countries’ ST tax cut would pay for itself. LL

economics commentator. Ed- trade barriers are going to go WA Iread carefully what the ited excerpts follow. up much morethan anykind secretary said here last night THE

of protection we’regoing to be R and he said the Treasury had MR. IP: You played apart in in aposition to impose,and so FO published astudy that demon- Nafta, the World Trade Organ- it’s going to hurt our economy. strated this.Wehavesought ization, the Korea-U.S. trade MORSE to receivethat publication, UL

agreement and the Trans-Pa- MR. IP: Trump officials say PA and there is no publication. cific Partnership. We now have that after each of those agree- LAWRENCE SUMMERS | ‘Bilateral trade deficits as a concept don’t make any sense.’ And Iwould makethis apresident and an adminis- ments our trade deficits, with judgment: Iamstill familiar trationwho believe that all Mexico, with China and Korea, it would otherwise be.But I with the kind of models and those things were terrible mis- got bigger. They believe those Feeling Strong think our broad national inter- analysis that the career pro- takes, that the U.S. has been a deficits are evidence that we’re Americans' response to the question, "Today, which one of the est is hugely affected. fessionals at the Treasury do, loser as a result of free trade. losing. In the Nafta negotia- following do youthink is the world's leading economic power?" There’sarisk that Mexico’s and their career professional Are they wrong? tion there’s been talk about regoing to elect aHugoChávez- analysis,Iam99% certain, will MR. SUMMERS: They’rewrong quiring the Mexicans and the Japan Countries of the EU Don't know/Refused likefigure. And the best way not support the judgment that because each of those were Canadians to adhere to targets to make that maximally likely this taxcut will raise revenue. good deals.Ifyou looked at for the bilateral trade deficit. 2014 2017 would be forustoabrogate Look,reasonable people can howmuch trade barriersin What’s wrong with that logic? Naftainaway that proved differ [on howtax cutswill af- the U.S. were reduced, and at MR. SUMMERS: Bilateral trade that all those in Mexicowho fect the deficit and inequality] howmuch trade barriersin deficitsasaconcept don’t resent the U.S. are right. And and there’s argument on both the other countries were re- make any sense. I run a huge that would be catastrophic for sides,and that’ssomething duced, in everycase they were bilateral trade surplus with our broad security interest. that will be worked out. reduced two, three, four, five Harvard[whereheispresi- China U.S. China U.S. Thebiggest strategic gift But there’saprofound re- times as much in the other dent emeritus and aprofes- 41% 40% 35% 51% the U.S. has given to China in sponsibility forpeople in posi- countries as in the U.S. sor]. Irun ahugebilateral thelast 15 yearswas leading tions of responsibility who are Themain thing these trade trade deficit with my golf club. the whole Asian region down making factual claims about agreementshavedone is to It makes sense to think about 5% the path of TPP and then with- the economytohaveabasis open other marketstoour whether I’m selling moreto 8% 7% 5% drawing,dumping them, and forthose factual claims,when businesses and to our exports. the rest of the economy than leaving them disappointed. they indicatethat they’re You don’t have to get into ab- I’m buying from the rest of the 4% 2% If the U.S. were to just stop based on publications,tobe stractions of free trade.Ifyou economy. It makes no sense to moving forwardontrade, prepared to come forwardwith Source:Pew Research Center surveysof1,002 just look at it as mercantilism, think about that entity by en- American adults in 2014 and1,505 American adults in abandon treaties that it had those publications.And I’m we’re tearing down their bar- tity. And so I can see no logic 2017 as part of theSpringGlobalAttitudes Survey THE WALL STREETJOURNAL. already agreed to,you won’t afraid Ihaven’t seen that from riers lots more than we’re re- to the use of the bilateral see it in a huge impact on the the TreasuryDepartment. ducing anyofour barriers, trade deficit as a concept for with or without the trade MR. IP: What happens to our GDPright away,but I’vegot [In response to aquery mostly because we didn’t have judging what’s happening. agreement. growth and our trade balances very little doubt that it would from The Wall Street Journal any barriers to start with. Look, we sign trade agree- Theclearest example is if we exit these agreements? have asubstantial impact on about Mr.Mnuchin’sassertion What’shappened as acon- mentswith countries that China. In the agreement that MR. SUMMERS: Probably our both our security,and over the that Treasuryhad published sequenceofAmerica’shan- have rapidly emerging and let China intothe WTO, we did trade deficitsgoupalittle bit longer term, on our economy. an analysis showing that the dling of the TPP—and there’s successfuleconomies.That’s not reduceasingle tariff in because of the reduced capac- taxcut will payfor itself,a plenty of blame in my party whywesign trade agreements theU.S.Wekept them at the ity to export to those coun- MR. IP: Treasury Secretary Ste- Treasuryofficial said the sec- forthat as well—is we’regoing with them. So it can’t be a same level that they had been tries.Ithink our growth, ven Mnuchin said the tax cut retary was“referencing inter- to giveJapanese producers surprise that those are coun- forthe previous 10 years. The which is determined by many, being planned in the House nal work” done in support of substantially privileged access triesthat areexporting sub- reason therewas atrade surge manythings—and exportsto and the Senate will pay for it- Council of Economic Advisers relativetoAmerican producers stantially moreand enjoying was changes that were taking Mexico are just not that large self. He said even if we only publications and did not mean in awhole variety of important rapid growth to the U.S. placeinChina, not changes in relativetothe totaleconomy— get 30 or 40 basis points more to suggest that Treasury had and rapidly growing markets. That would be happening our trade policies. probably is alittle softerthan of economic growth, this will published its own report.]

Balancingthe needsofindustry, society, andthe environment, bringing people andideas together to develop practical,sustainablesolutions for thefuture— on land andatsea,inthe skyand in space,wemovethe worldforward.