Welcome to Market Makers. Mom and dad are away and the kids are here for the show. Fornything goes, we are in Erik Schatzker and stephanie ruhle. We just saw paul ryan come by. There is a big interview and we are excited. I will take full credit for bringing him here. You totally should. We will have great analysis from Phil Mattingly after the interview. Its time for the news feed. The argentina president has come up with a way to bypass the u. S. Court ruling on bond payments. The government wants to let overseas debtholders swap their byds for one governed argentine law. They will get Interest Payments through the Argentina Central Bank instead of in new york. A u. S. Judge barred american banks from processing debt payments i was argentina reaches a deal with creditors. Shares of apple are little changed after hitting an alltime high. Investors are optimistic about it the products and estimate that a larger screen iphone due out this fall will set sales records. There is a new owner for the bankrupt cupcakes chain crumbs. 6. 5ne has challenged the Million Dollar bid and the closed all 48 stores in 10 states and new owner plans to expand. Turnaround is still hurting with the company cut its forecast for the year as slumping sales in the moneylosing push into canada hurt profits. Its up to the new ceo to jumpstart the company. We have all the details. I think of that south park episode blame canada. In all seriousness, were there other issues . We know that target is still paying for the massive data breach but canada is a huge problem for them. Ever since it expanded apart last year, it opened about 130 stores, the company has lost more than 1 billion in canadian customers went from being excited about target after crossing the border to shop there in the u. S. But target opened in canada and we start hearing immediately that prices are too high and the Customer Service is terrible and the shelves are empty. Shellsgoogle empty target, you will see social media pictures from customers that spread like wildfire. Customers are turned off in canada and the company is losing big time up there. Is there a sense of what the company can do to try to fix this . They have laid out a plan and some analysts say the first up to recovery is admitting you have a problem. They admitted they have a problem and will try to work on and improve supply Chain Management and rollout a bunch of new merchandise and hopefully that will attract shoppers. Theyre introducing an aggressive Price Matching program. Can come intomers and show an app or something online that says amazon is charging this much for this product or walmart and target says it will match those prices. Whether thatext gets customers in the store is one question but can i make money if they are matching these low prices . The stock is actually up today. Our investors really taking this in stride . The management shakeup may be helping target after all. The data breach costs were not as high as people thought but those are unknown. People are looking at target if you read about the walmart expansion into canada, it took them a long time. They are doing well now but it took them years to win over canadian shoppers. I talked to a professor in canada yesterday, a marketing professor who said you americans will not like this but American Companies need to be patient when you come to canada to win over the canadian shoppers and prove your brand can survive here, prove its better than everything we already have. Scandalhad a hacking but customers were still shopping there for the most part. Thank you for the update. Investors are raising a pint to heineken, the worlds biggest proposed a profit in the first half that topped estimates. But the crisis in russia could mean major headwinds for heineken and his european rivals. I will bring in hans nichols. He is a guy who knows his beer may be better than anybody in the bloomberg universe. What is going on . Have here is a barometer, a bellwether, of how slow growth is in russia. Carlsberg is the biggest brewer in russia. They get about 1 3 of their profits there. They issued a profit warning earlier this year and they pulled back even further today. You look at the organic beer sales in russia, its down 13 . We have a tale of two brewers carlsberg overreliance on russia and heineken which is also the fourth biggest brewer globally, i think forth in russia as well, but they are also seeing some strength because they have been well diversified and have had a good summer here. The world cup was a big hit and it is certain, later this year. Outside. Ing if you are a beer brewer, you want a late easter and thats my take away from these two earnings reports. Easter as a drinking holiday, this is new. You mentioned carlsbergs emphasis on russia but the regulatory and tax environment there does not look like it will get any easier anytime soon. Why are they comfortable staying at their size in that country . Well, there are clear hints that the ceo gave that they will right size their production facilities inside russia. Mentioned the taxes and the regulatory aspects, the heineken ceo says yes, some of this is geopolitical headwinds but also its shifting consumer tastes and about these new taxes and regulations on beer inside russia. The other discouraging point for carlsberg is they also lost market share. This cannot entirely be explained by the fact that there are sanctions and the ruble has weakened. They also lost market share and that has to be a concern for them. Problem and still a we see consolidation the Beer Industry in the u. S. How much will that spread over two names like carlsberg . There is a big scandal in germany maybe two months ago that the margins are so tight on beer with big brewers, its hard to hit a profit. What you had in germany is a bit of a cartel. Basic ingredients of beer are pretty easy. Yeast do theet the work and ferment it but other than that, youre basically looking at a Pretty Simple process that can be scaled. Whenever you can scale, you have tight margins. Hans nichols, the only man to talk to you when it comes to fermentation. Thanks very much. Craft beer is very expensive. Coming up next, paul ryan is out with a new book and he is here to talk to us about it. Remember the barnes noble note . Samsung is building a special version of it which has many of us asking why . Congressman paul ryan is one of the most powerful members of the Republican Party, known for his run as Vice President in 2012 and his plan in congress to slash spending on social welfare programs. But he has also turned to fighting poverty into. One of his signature issues is one of the topics he addresses in his new book, the way forward. Oh congressman ryan is here for an interview with johnheilman and Mark Halperin thank you, joining us now is the republican chairman of the house budget committee, the former Vice President ial candidate in the pride of janesville, wisconsin, congressman paul ryan. Thank you for coming in. Thank you for having me. We think of you as a likable guy. We want you to be likable. I warned you during the break so tell us something about you that ordinary people would find super likable. I just walked in the door at soda and and i had a Security Guard knocked it out of my hands with the taser. You say the book is not a full memoir but there is a lot in there. I want you to talk about something in the book you write aboutfor the first time your father in his relationship to alcohol. Its something i have never really discussed before. I talked with my mom and siblings about and a lot of families go through this. The point of bringing this up is it was a significant part of my childhood. Many families have members of their families who are addicted to alcohol. I think people need to be cognizant of those things which is know your Family History and respond accordingly and families can bounce back from these things. Thats the good end of the story which as you can have these kind of problems in your life and family and you can get back on your feet again and you can respond well. If you have Family History, know about it. I want to kick off the policy talk with one topic Social Security. You are an economic sky and the book has prescriptions and it makes it clear youre not running for president and you dont really that would you want to put ideas on the table. What is Social Security . You say quite clearly in the book that something in your want to pare back the growth and future benefits to save the program. I want you to say that clearly, that part of what your plan is is to cut the guaranteed minimum benefit for some. For higher income individuals. Think the progressive price index is of smartest way to go. Bob posen was a democrat on the earlier commission to blend the wage and price increase. I think the retirement age should reflect long devotee overtime. According to Social Security longevity table, it goes up one month every two years. 2030. Ches 70 years in it means testing the benefit and reflecting longevity in the retirement age and that would take you very far in the way toward bringing solvency to Social Security. You are talking about the guaranteed minimum benefit not for current retirees but phased in over time. Thats right. What kind of income level . I dont know off the top of my head because i would have to look at that tables for 55 and below. You are a numbers guy. 3 of incomeer1 would have their benefits protected by Price Inflation but not wage inflation. Their purchasing power would not be affected. Its great to have you here. Despite the taser, we are glad to have you here. What about president ial aspirations . Book that a lot of people traditionally right before they decide to run to for president. If thats not the reason why you wrote the book, what is the reason you wrote the book . It really isnt. I dont know what im going to do on that. The reason i wrote the book is im very critical of the Current Administration and the path we are on as a country but thats not enough. If you are a conservative, you believe we are going in the wrong direction and i is an elected leader should show what i would do differently. The point of this book is to show a different way forward to reignite the american idea of the mobility and Economic Growth and how we should do things differently. I spell out what i call fullspectrum conservatism which is inclusive and aspirational and optimistic just like my mentor, jack kemp taught me. As house leaders, we should show the country different way forward and give voters and the people of this country a meaningful choice so they can choose what kind of country they want to have in the future. There are a lot of ideas in this book. You are supercritical of oh tom obamathe of president and the liberals. Talk about some ideas in this book that fly in the face of conservative orthodoxy . Having a problem with Immigration Reform. I talk at great length about what i think Immigration Reform should look like. Its important we reform the immigration laws for National Security and for our economy like would a be boomers retiring. I talk about upward mobility in a better strategy for fighting poverty. Exhaustive plans and how to rethink our approach to fighting poverty and producing upper mobility and the talk about our party needs to reform to be more inclusive be working at at it with nontraditional voters which i think is essential Going Forward. What you think the bulk of the parties not where you are . Toas leaders, i would like think we could bring the party to these areas. I would rather be a leader and leader says this is what we ought to be doing different than what we are doing now. If everything was great, we would have won the last president ial election. Everything is not great. Some problemsx and we need to be clear about the problems we have in our party so that we can fix these things and give people an honest idea of what we think we should do. I think what this spells out is a vision that a majority of americans no matter their background, no matter who they are were they come from can support. That is the kind of election we should have and that is the sort of thing i am pushing. Its an agenda of solutions to get us back on the right track. On immigration, there are two groups of people who are here illegally, children brought here and you have one set of ideas but what you lay out in the book and what should be done with the 12 million or so your running for self romney was deportation. He wanted them to leave but you dont want them to leave. You want to give them a path to legalization and maybe citizenship overtime. They can earn it but they have to get to the back of the line so you preference the legal immigrant. You have every caveat to you want the borders secure first. You are stepping it different from many people in your party and saying those 12 million people, if they do a series of things, can stay here legally forever, correct . Yes, they can always get a work permit that is reid nude that is renewed indefinitely. Would you like to see republicans run that in this election cycle . I put it in the book. I have been saying that for a number of years. You would urge the candidates in your party, everyone to be for a policy that says those 12 million people, if they do a series of things, can stay here . I would not have put it in my book, this is a way to put people on probation so they earn their ability to stay in this country legally so that they get right with the law and come out of the shadows and earn a good place to do this. I think it would get as good reforms like welfare reforms and it would also leverage the Border Security we need and the interior and forth between a. It is not trust but verify. Weve got greg problems in this country. Weve got big problems in this country so we will not solve them by doing this the same way. Here are solutions to some of the intractable problems in this politically paralyzed environment. Thats what leaders should do and yes, sometimes when you put no ideas out there that are controversial, you never get anything done if you cannot do that. That is the story of my life. You trade budget chair for ways and means chair . I want to be respectful. Lets talk about tax reform. You talk about lowering the marginal rates for everybody. You are a big economics guy. You need some offsets and you talk about loopholes. To the two happen big deductions Home Mortgage and charitable the doctrines . Wecharitable deductions should not have a cap on because that is what seeds Civil Society which is an important part of american life. Mortgage, dave camp put out a bold plan and he was smart how you did it because it should be a middleclass tax break, not something for higher income earners. The way dave camp did it was intelligent. You would be for scaling it back . Off upays you can write to a half 1 million of Home Mortgage. In wisconsin, you could have two homes. Half a Million Dollars in new mortgages, not existing mortgages or refinancing. I thought that made a lot of sense because it is middleclass people. Thats a half a Million Dollar mortgage, not a halfMillion Dollar home. There is a lot of stuff in this book that addresses the problem of disadvantage. I want to ask you about ferguson. Want to said you dont talk about imposing your policies in that context because it is disrespectful. Response on the republican side, there has been a lot of discussion in the last week or so about the militarization of police in america that they have gotten a lot of hammy heavy armor to local authorities. What you think about that issue . How would gone too far . We should look at it but there are also other issues within that that make sense. For instance, Lake Michigan powershares department had been able to get access coast guard equipment after the coast guard was done using it to do searchandrescue in Lake Michigan. Is that a problem . When you dig into an issue, there are other issues that come into it which i dont think fall into that categorys you dont want to overreact on an issue and have Collateral Damage to a policy that is not a problem. Guard surplus boats going to the Sheriff Department to help rescue people stuck in our great lakes. The notion of towns that are 30,000 people having heavy armor i think i dont know the answer to that question. I think i need to learn more instead of knee jerking. I dont think ill a seat makers should take kneejerk reactions. My answer to people earlier about my policy preferences with respect to ferguson is lets respect the brown family and the community and not at our policy preferences to this tragedy. That is not what policymakers should do. We should let Law Enforcement do their jobs and find the facts and get the truth and see justice served and not try to inject their own agendas into these issues. What informs your poverty agenda is the notion that you spend a lot of time traveling to innercity america. What have you learned in that process . I have learned that there are amazing people in this country overcoming their difficult circumstances and we should learn from them. The problem with the federal approach the war on poverty is it inadvertently has given the impression an america that this is the governments responsibility. Pay your taxes, we the government will fix this. Thats not true. We need people to get involved not necessarily with their money but their time or talent or love in their communities. I