Economist Stephen Moore debates New York Times columnist Paul Krugman on the economy, employment, spending and election politics.
Krugman said it is "ridiculous" how much better the economy is under the Obama era than the Bush era, however he did acknowledge productivity growth is disappointing.
"We knew economic recovery would be slow and we are near full employment," Krugman said of the Obama recovery.
Moore countered that the left is obsessed with raising the minimum wage because those are the only jobs available and being created.
Moore and Krugman agreed that spending was out of control during the Bush administration.
"You're right about Bush, we had record level of spending," Moore said. "But Hillary Clinton also wants more spending and more debt."
Full transcript, via CNN:
ZAKARIA: So who's got a better plan for the American economy? Let us have a debate. Stephen Moore is a senior economic adviser to the Donald Trump campaign and an economic consultant with Freedom Works. And Paul Krugman is a columnist for the "New York Times" and a Nobel Laureate in Economics.
So, Stephen, let me ask you to start off, which is, your argument is that the slow growth we are now watching is a consequence of Obama's economic policies, which Hillary Clinton will pursue and therefore we will be condemned to slow economic growth. What is Trump going to do to reverse that?
STEPHEN MOORE, SENIOR ECONOMIC ADVISER TO THE DONALD TRUMP CAMPAIGN: By the way, Fareed, you summarize your position. I think Donald Trump's position exactly right. That we've had -- by the way, that isn't just my opinion. What I have asked Donald Trump to do is take with him everywhere he goes, every speech he gives, the front page of the "Wall Street Journal" last Saturday which said, "worst economic recovery since the Great Depression." And that's exactly what this has been.
You know, we've actually downgraded our growth rate from a measly 2 percent when we should be growing it for, narrowed onto 1 percent, which is near recession levels, and I actually think the business sector in this country is in a recession right now. So these are abysmal numbers. And frankly I think the Barack Obama-Paul Krugman manual has failed.
What we are going to do to change that, I think we're going to focus on three things, and Mr. Trump is going to give a major economic speech on Monday, focusing on number one, reforming our tax system and cutting our business taxes to bring jobs back to the United States.
Number two, a pro-America energy policy to produce our oil and gas and coal, and we can be the energy dominant country in the world. And number three --
ZAKARIA: Well, Stephen, we are the dominant energy producer in the world.
MOORE: We're still importing oil. We can't within five years be actually exporting oil and gas and coal rather than importing which would be a huge plus for the economy. And then finally the -- I know Donald Trump talks a lot about the regulatory burden and how we can unshackle businesses so they can grow because there's an old saying, if you don't have healthy businesses, you don't have healthy jobs.
ZAKARIA: Paul, this is -- you know, I'm sure there's a critique you're familiar with. But briefly what's wrong with it?
PAUL KRUGMAN, COLUMNIST, THE NEW YORK TIMES: Well, first of all, it's worth just thinking for a moment about jobs. Right? If we look at job creation, particularly private sector job creation, look, Obama -- the Obama era has been a whole lot better than the Bush era. Right? Obama -- you do the comparison on the charts and it's not even funny. It's just -- it's ridiculous how much better. So if these are anti- growth policies, how come we have all this job creation?
ZAKARIA: And Bush put in place a big tax cut than Obama --
KRUGMAN: Bush began with a big tax cut. Obama had a substantial tax increase at the beginning of 2013, job -- followed by the best job growth since the 1990s. He had the implementation of Obamacare, which everybody said -- on the right said was going to be a job killer. Job growth just kept on plugging along at quite rapid rates. So this has been really good. Now productivity growth has been disappointing.
ZAKARIA: But even growth, I mean, the Fed's forecast, the administration forecast, all started out with 3 percent, 3.5 percent growth.
KRUGMAN: No, no. Nobody every forecast --
ZAKARIA: in '08 or '09?
KRUGMAN: '08 and '09, but that was --
ZAKARIA: But even that didn't come true.
KRUGMAN: But that was a known error. I mean, that was -- people like me were saying look, this is a post-mortem recession. This is the aftermath of a financial crisis. It's not going to be a recovery that is going to be all that fast. We know that this tends to be slow. And you know where we are now, we are pretty close to full employment at most measures.
MOORE: But, Paul, the problem isn't that we haven't created enough jobs, because you're right, job creation has been decent, not great but decent. The problem has been that they're McDonald's jobs, they're Wal-Mart jobs, they're minimum wage jobs, Fareed. That's why the left keeps obsessing about the minimum wage because all the jobs we're creating are so low.
Now the question is how do you create not just more jobs, but middle class jobs that pay you $50,000, $60,000, $80,000 a year, and there what you need is you need more business investment. And that's the thing that worries me more about this economy right now, Fareed. If you look over the last year, business spending and investment, and factories and -- and equipment and computers, that's fallen off a cliff because businesses feel like -- they're under assault from Washington.
And I think just, you know, lifting that veil of fear of businesses by putting someone like Donald Trump in the White House who is a businessman, who does want to cut their taxes and regulations, and I just disagree with Paul Krugman on this. I mean, you go back to the Kennedy era when we cut tax rates, when you look at the Reagan era, those were the biggest booms we ever had in this country, not just for rich people, for the middle class as well.
KRUGMAN: Let's just say, the Clinton era boom, following a tax increase, was bigger than the Reagan era boom. Right? Clinton greater than Reagan, which doesn't fit that story. Obama better than Bush. Bush cuts taxes, Obama raised them. It's kind of -- it's really kind of sad. I mean, it's actually kind of pathetic, Steve. You're going back to the Reagan tax cut 35 years ago.
MOORE: And the Kennedy --
KRUGMAN: And that's your -- and the Kennedy tax cuts which is a very -- totally different environment.
ZAKARIA: Which by the way, the marginal rates from 91 percent to 70 percent.
KRUGMAN: That's right. And here we are looking -- you know, we now have 25 years of evidence. We now have -- you know, we have Clinton, Bush, Obama, and of those three, the ranking in terms of success, in terms of job creation, in terms of economic growth, it's Clinton, Obama, Bush, and you're saying but we should believe in your recommendations because of something that happened 35 years ago where --
(CROSSTALK) KRUGMAN: You know, I can argue that started with you but it's a good story to tell.
MOORE: In fact I think a lot of Trump voters -- the reason Trump won those nomination, I think, is because voters don't like at all what Barack Obama has done with the economy, but you know what, you're right, Paul Krugman, they didn't like too much what happened under George W. Bush. We had record levels of spending, we had - you know, and we're going to turn that around.
But, look, you can't -- when you look at Bill Clinton, I actually think if Hillary Clinton were going to govern the way Bill Clinton did, I would vote for her. But she is -- she wants more spending, she wants more debt. You know this, Paul Krugman, government spending as a percentage of GDP fell more under Bill Clinton than any president in 30 or 40 years.
KRUGMAN: And the Cold War had a little bit to do with that.
MOORE: That (INAUDIBLE) of philosophy. Government spending went down and government -- and the growth of the economy went up.
ZAKARIA: Thank you, gentlemen, for a feisty debate.