All In   |  May 09, 2013

Obama makes his case for jobs while Republicans push the Texas model        

Chris Hayes talks with Heather McGhee of Demos and Josh Barro of Bloomberg View about President Obama's trip to Texas and what the Texas economic model would mean for America.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> good evening from new york . i'm chris hayes . thank you for joining us. i'll be joined tonight by senator elizabeth warren who introduced her first piece of legislation, a pretty brilliant one, to help level the playing field for people buried in debt. and a report from the " huffington post ," a company set to make a fortune on the back of college students.

>>> another senator takes a stand on science, reason and the divine all in the name of our species. and then click 3. we begin with president obama in texas today for the second time in as many weeks. how and where the president spends his time is probably the single most important tool the white house has at its disposal. the decision to send the president to texas again is a fascinating choice for a number of reasons. for starters, texas is not exactly the home of the obama political base. he lost big there in 2008 to john mccain and even bigger to mitt romney in 2012 . even so, texas is being seen more and more and potentially winnable by democrats, where they could leverage it in the state and turn it to blue has been simmering for months. and seen not considerable economic success at a time when the nation as a whole is floundering and the president is trying once again, to his credit, to drag the nation's attention back to the arena to jobs and economy despite the best effort of our collective attention to wander on grandstanding of the benghazi attacks and salacious murder trials.

>> i have talked about what we can do to reignite the true engine of america's economic growth . a thriving rising middle class and a dynamic cutting edge economy. that's our priority. that should be washington 's top priority , when you're talking to your members of congress or talking to elected officials. you've got to remind them we don't want government to do everything for us but it's got a role to play on infrastructure, basic research , making sure that we've got a tax system that's fair. making sure that we've got some basic stability in our budget so people aren't always guessing what's going to happen around the corner.

>> the president was met at the airport today by texas governor rick perry . the two former mitt romney opponents, one vanquished, one victorious, seemed to have an affable enough greeting especially that time when he met jan brewer visiting arizona last year. both rick perry and the new "it boy, ted cruz , took the opportunity to say texas is in better shape by and large than the nation and the president should run the economy like the republicans are running the texas economy or better yet let texas republicans take over for him. rick perry wrote an op led, to highlight job creation , no more natural place than texas while the nation lost 2.5 million jobs, texas created half a million yet new jobs. if president obama is serious about getting america back to work he has certainly come to the right place to get it done.

>> ted cruise released a statement texas is lead iing growth and economics with flatter taxes and limited government and restrained spending. texas has shown how it's done and we hope the president will take some lessons back to washington to bring true economic recovery to our nation.

>> what would that model really look like if we applied it to the entire country. joining me tonight, heather mcgee and josh barrow, lead writer and columnist for bloomberg view. thanks for being here.

>> thank you for having us.

>> this is my jiu-jitsu on the texas issue. the thing about texas , i've been there recently, a woman named erica greeter wrote this book very good persuasive defense of the texas model as a liberal i don't like in many ways but there are things happening there. to me, it's a reminder how important growth is. that's the take away from texas , when you're at a place growing and i was recent lin austin and it's growing, a lot of things come good and a lot of things challenges presents. that's what we need and precisely enough what washington doesn't seem that interested in bizarrely.

>> right. in the short term, there has been a lot of growth. if you look at what we need to do on the federal budget picture, in the long term what is missing is this basic idea we can have not just government investment but actually the kind of immigration that brings people in and allows people to spend money in their community.

>> that's part of the story in texas , too. big population growth and immigration and this psych wrinkle people are moving there, economy is booming and more people move there. part of the question is why is it texas growing? if someone is immigrating to the u.s., they can go anywhere. i think one of the key parts of the story because it doesn't fit the rights or left narrative has to do with housing policy texas has done a couple smart things. it's possible to build homes. the most productive areas of california and new york where the highest paying jobs are it's hard to add housing units and expensive to live there and discouraged job creation . in texas people can afford to move there.

>> housing is cheap.

>> and they had less mortgage regulation the rest of the country did not have. they did not get the worst of it in the housing explosion bubble. you can afford and build a home but discouraged from the speculation that happened in the rest of the country and that served texas well. while the president is there, he's talking about trying to get growth back. he is kind of constrained right now. the story, he's constrained by congress the fact they don't seem that interested in growth to me. it's bizarre --

>> not on the president's watch.

>> it's republicans who are supposed to be all about pro growth. how many times have you heard the term pro growth. i'm the liberal saying, let's do it and get the 3%, 4% growth a year and republicans in congress don't see that issue. the other side is this fact the recovery has been a low wage recovery in many ways and texas is part of that story, right? you look at texas in terms of national average, workers earning minimum wage or less, 7.4 percent, in texas , 7.5%. -- 4.7% and in texas , 7.5% and you have in st. louis part of this fast food worker strike. and we talked about others in new york , folks making low wages trying to get higher wages. in some ways, texas does look like the future. at least it's growing but the jobs it's producing, and this is a problem the president is facing talking about building the middle class , that's the conundrum on the table?

>> you cannot build a middle class from low-paid workers. the problem the president, we released a report today, recognizing nearly 2 million workers, that's a really low estimate, are being underwritten, 2 million jobs are being underwritten by the federal government from contracts, from leases, from service contracts, that pay low wage, that pay less than $24,000 a year. so when you look at that, you see that the federal government has actually walked into the economy that's been made by walmart and mcdonald's and that kind of low wage economy and actually really moved in and become a massive low wage employer, you and i --

>> are there things the government -- we're talking the president was touting a few different initiatives, are these manufacturing hubs, seems like good policy to the extent $200 million which ain't nothing but is very small in the context --

>> very small amount of money, quite indirect. great to do research and developedment. the president could do an executive order like president johnson did on affirmative action on this kind of issue and basically make a living wage law for contractors and josh's head is about to explode. it would create jobs because it would put more money in the hands of people who actually spend money in this economy.

>> i think these sorts of ideas really undermine efforts to provide high quality government services and serve the needs of taxpayers. we're mostly talking about state and local governments . the federal government is supporting these activities but many of them are like home health aides through medicaid and stuff are run by state and local government and spend about half their money on employment compensation.

>> you're saying a janitor in union station making $8.75 an hour after working there for 19 years with no benefits, if she makes a little bit more money it's going to bankrupt any kind of government?

>> not that it will bankrupt the government, the amount of money state and local governments can spend is fixed. they checked between a specific amount for many years.

>> there's some extent there are state payers here but a lot of this employment is happening still with federal payers. the most important thing is when you raise wages, create more stability, the government actually can save money in terms of lower employee turnover and higher productivity and we all benefit from the multiplier effect of a stronger middle class .

>> the question faced by government, should we employ more people or pay people more and we had the reverse with the budget cuts have been unable to control per employee expenditure and cutting head counts. the city of los angeles has 10% fewer employees than 10 years ago. to the extent we put more upward pressure on the government government -- here's the issue. right now, we have the worst of both worlds. this is what i think the texas thing highlights. an economy create as lot of low jobs but has cheap housing and is growing gives you something you can hold on to, right? an economy not really growing and creating a lot of low wage jobs and has pretty expensive housing as it does in many metro areas is not give iing any a foothold and that's what the president is facing when he goes on these job tours. i read the "new york times" there's a concern this looks like he's doing something symbolically. like, what the heck do you want him to do symbolically, like that is the issue right now. you can have a growing economy that fits a conservative model much more. you can have a growing economy that looks much more liberal but you need a tight labor market and people back to work and the economy growing. right now, there is no appetite for that in washington and remains amazing to me that is the case.

>> you have to remember corporate profits are at a record high. we keep pretending the economy is doing poorly for everyone and it's not.

>> josh had a smart piece why wall street should actually care about the fact unemployment is high. i want to talk a little bit more about unemployment and talk about the big background context in texas and the immigration there and what that means for the obama coalition and what happened on the hill today which is actually quite fascinating after this break. i was spotting, but i had already gone through menopause. these symptoms may be nothing... but they could be early warning signs of a gynecologic cancer , such as cervical, ovarian, or uterine cancer . feeling bloated for no reason. that's what i remember. seeing my doctor probably saved my life. warning signs are not the same for everyone. if you think something's wrong... see your doctor. ask about gynecologic cancer .