Both krystal and ari to washington. The one thing theyre concerned about is the Labor Force Participation rate which is the lowest its been since the 1970s. Overall the most positive jobs report the friday weve had in a long, long, long time. The markets arent the only ones reacting to the news. The grit and determination of the American People are moving us forward, but we have to keep a relentless focus on job creation and creating more opportunities for working families. Theres plenty more that congress should be doing, but i keep acting on my own wherever i must to make sure every american who works hard has the chance to get ahead. No surprise who else is reacting. Our jobs report duo Jared Bernstein and peter mauricy. Youre a Glass Half Full kind of guy, jared. This report is good. First of all, let me just say how cool it is to have krystal and ari in d. C. Thats already a good friday. Look, i i can hear siri in the background, though. The 288,000 on payrolls is definitely obviously a good, big number. Better than expected. Prior couple of months were revised up 36,000. But this Labor Force Participation thing cannot be ignored, and i think its one of the things that markets are dealing with today. This. 4 decline in the Unemployment Rate, the Labor Force Participation rate also came down. 4. That means the decline in the Unemployment Rate is fully explained by the decline in the labor force, and thats not a good sign. Its a tale of twol surveys, but i would more heavily weight the payroll survey. A good report, but want completely unblemished. Peter, there are two downers, though. The right being the gdp numbers set for the First Quarter were well below forecast. An annual rate of. 1 . There is the Labor Force Participation rate, which is now down to its lowest, as tory mentioned, since the 197 0z. Help put this in historical context. What would the rate look like today if all these were equal on that front. Well, if we had the Labor Force Participation rate today that we had, say, when mr. Obama took office, we would be having unemployment up around 9. 5 or so. Maybe even 10 . So weve made most of our progress because people have left the labor force. 288,000 is a good number compared to what weve had, but i think that jared would agree, we really would like to be seeing 400,000 or 500,000 a month in an economy our size. The other thing you havent mention and it bears mentioning, is that the wage rate was flat. That away educate that we continue to create a lot of low wage jobs. Peter, i definitely agree with your naltsz there, and i we know disagree somewhat about what to do about it, but youre putting your finger on a big part of this economic story. Let me read also from neil irwin who i think agrees partly with that naltsz in todays new york times. He says its great the job growth is showing more life after a gloomy winter, but it would be better if this market were coaxing more people into the labor force rather than leading them to leave. With higher pay for workers that havent seen significant raises in the better part of a decade. Jared, why dont you join in and tell us what your thoughts are at that point . Ive been writing about this, and, by the way, i think its important to look yearoveryear. If do you that the monthly numbers do bounce around. I dont disagree with anything either of you said. Yearoveryear, the average hourly wage is up 2 . Inflation about 1. 5 . Theres a little bit of real wage growth. One of the things ive tried to stress in my writings is that this is an important thing for the Federal Reserve to think of. The Federal Reserve worries about wablg infrayings and price inflation. Sometimes it will act preem preempttively to slow things down. I do think its important for the fed to continue to try to help as best they can. Yeah. Were getting to this weird place where the Unemployment Rate is pretty low. Its 6. 3 . Its not ideal. Its not where we want it to be, but its improved markedly, and people dont really feel like the economy is in that great of shape. You saw the evidence of this in this weeks nbc newswall street journal poll. You saw that only 26 think the economy is going to improve over the next year, and 42 say the economy has not really improved since obama has been in office, which, you know, just looking at the data and the sort of cliff that we had fallen off when the president came in to the office objectively that its not the case, but people are still feeling very much like theyre in a tough place economically. And thats because they are in a tough place economically unless theyre in the top. 1 of 1 . If you look at the Unemployment Rate, you shouldnt see 6. 3. You should actually see a somewhat higher number because it is depressed by the labor force story weve been telling, and then, of course, the wage piece plays into it as well. People are definitely doing better than they were when the economy was in such bad shape, but if you look at the Median Income in real terms, it hasnt done that well. You look at corporate earnings. Theyve been through the roof. I know you hate talking about china, so im sorry i have to bring this up, but earlier this week we woke up, as im sure you saw to find that the chinese are surpassing the United States. This was based on the world banks assessment and it comes much sooner than many people expected, and im sure a lot of americans hear this, and they immediately see it through a prism of fear. Help us understand what economic power really means here. Is this about the size of ones overall economy, or is it their per capita gdp. Beyond that what does china have and what does big question for a minute. Essentially this measures purchasing power parody. If the Chinese Exchange rate were where it was supposed to be, as opposed where it is now, then the chinese economy would be worth a lot more, and it would be bigger than the United States or at least the same size. You have to remember, there are five or six times as many chinese as there are americans. I have always said if my naim neighbor had six kids and i have one, theyre going to have a bigger grocery bill. The other thing is if they had that exchange, given the technology they have and dont have, they wouldnt have all those exports. That economy wouldnt be so large, and therein lies the problem of getting the wages up. And thats the exchange rate. The treasuries, thats their job. Then there would be a lot more manufacturing jobs in the United States and with it more construction jobs. There would be a lot hire pay to go around. We would all be a lot better off. You know, this is kind of a commentary on poor u. S. Economic policy, and i hasten to add its been a bipartisan problem. One ge kwe for both of you first, and then peter. One last question. A lot of talk about how americas economy was stronger and inequality was left on the marginal tax rate. The tax rate was higher now that the tax rate is lower, that is a driver of inequality and perhaps slowing our economy. The ultimate highest tax rate that would get the economy to an appropriately balanced and moving society. I want a number from both of you. Be specific. Okay. Okay. Some of the the people on wall street will pay a lower tax rate than a College Professor was or Warren Buffetts secretary. It does. I think that the real problem here isnt the level of the marginal tax rates. For example, i think we have a higher marginal tax rate than we have now, and be growing quite nicely if these other issues that we have spoken about over the months were addressed. Back in the day we had a marginal tax rate on the very wealthiest americans. You had to be making a lot of money in real terms to have it. We didnt have a currency problem. We didnt have a Health Care Cost problem. We didnt have monopolized banks that, you know, basically squeezed the Interest Rate that old folks can get on the cd and so on and so forth. Theres a lot of monopoly elements in the economy that need to be addressed. We need a good oldfashioned wisconsin pop list to come in here and address those kinds of issues. How about a massachusetts populist. Thats what i want. No, no, no. Were going to have a socialist. Lets go hands in the soil farmer socialist. Krystal, i am blown away that we have agreement from jared and peter. I know. On Capital Gains loopholes. I love it. Lets make it happen. We have have cake and balloons. Cake and ice cream. Im hearing a lot of talk about cake. The rose garden News Conference with german chancellor Angela Merkel, and there is much more where that came from. Well designate into the issue, with the u. S. 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But hurry sleep trains interest free for 3 event, ends sunday. Sleep train your ticket to a better nights sleep we are yin itd on our i unwavering article 5 commitment to the security of our nato allies. Were united in our support for ukraine. It is obvious to the world that these russianbacked groups are not peaceful protesters. They are heavily armed militants who are receiving significant support from russia. The russian leadership must know that if it continues to destabilize Eastern Ukraine and disrupt this months president ial election, we will move quickly on additional steps. That is president obama and german chancellor merkel trying to calm tensions in ukraine, which is now on full military alert. Fearing an imminent invasion from russia. Moscow has warned any use of ukraines military against its own people would be a game changer with catastrophic consequences. That is exactly what the interim Ukrainian Government did this morning. Ukraines new antiterror teams used force to take back the eastern town of sloviansk from who they call professional mercenaries. This is the same city where several american journalist from cbs news and buzz feed were detained and thankfully were released. Ukrainian military units now have half that city under their control and the acting president says his goal now is to prevent the unrest from spreading. Along the southern coast, nearly three dozen people are dead after the local trade Union Building was set on fire during violent clashes. As for that russian threat, there are 40,000 Russian Troops camped out at the border. The Russian Foreign minister says the kiev regime has now seriously violated their obligations of the geneva statement from april 17, which demanded a halt to any violence as the most urgent step. Lets check in with politico mano raju on how this is playing out in washington, and, manu, it seems like the ukraine crisis is strengthening washingtons ties here with germany. Whats your takeaway from todays meeting . Yeah. They really wanted to show a sense of unity with germany. Really the United States needs to be allied with europe over moving forward with a broader sanctions regime. You heard the president raised the specter of doing sectoral regime going against finance and against the defense industry, the arms industry there. The issue for europe is, of course, the concern about about the impact on energy supplies, Russian Energy supplies, whether or not any broader sanctions could hurt their ability to their use and import of all these russian oil and natural gas supplies. Thats going to be the question Going Forward for them. While they showed unity on the issue of ukraine, of course, germany and the United States are clearly not on the same page yet when it comes over to the National Security agency, the Domestic Surveillance Program and what came to light over the Edward Snowden revelations over spying on Angela Merkel themselves. The president used the line were not were not aligned yet on this issue about whether there would be no spy agreement on other government officials in germany. Thats going to be a point of contention Going Forward. Lets bring it back home a little bit. Theres a new Pew Research Poll out, and it shows bipartisan support for increasing our sanctions against russia. That being said, though, our friends at stratford make an interesting point. They say both congress and the state department can be told that something is being done in terms of sanctions, and both can pretend its being done, but, in fact, nothing can really be done. Are the newest sanctions that have been improved just this week, are they doing anything to appease washington . It doesnt seem that way. Particularly, if polls continue to show dissatisfaction with the president s handling of this issue, you know, thats what you are going to hear the president and the white house bake the drum further. If they do get unity with the europeans and go for a broader sanctions regime, right now, as you know, they have been going after against putins inner circle mainly. If these broader sectoral sanctions begin to have actually an impact on russia, that could change the dynamic in washington a little bit. For right now youre seeing pressure particularly from the republicans against the white house to do much more. Yeah. When you pull sanctions like that, you are asking people should we do something that might bother putin . I think a lot of americans would say yeah, but youre not also polling, well, what are the longterm economic and diplomatic costs of that . Whats the sustainable strategy there . You really only are weighing the benefit, i think, and not the cost. Yet abbys question connects to what some of the republicans are up to. Senator corker has a and talking up the idea of more military aid to ukraine and other countries in the region. Is it all just a political bluff here since its not going to go through the white house, or what do you make of this push from Senate Republicans . Its more symbolic than anything else. They want to show that put pressure on the administration to do more. Clearly the white house is not ready to go to the length that bob corker and the other republicans are pushing right now. Particularly dealing with potentially arming the proukrainian forces in that region. But its interesting, you know, that there are 20 or so republicans that are on that bill, but, remember, the 45 members of the republican conference, so republicans themselves are not united on this is the correct approach. Marco rubio, for instance, is on this bill, but who is not on this bill . Two of his potential 2016 rivals. Ted crews and r paul. It shows a difference in the Republican Party whether or not to take a hawkish position or whether this isolationist strain that is moving through the Republican Party is gaining more of a foot hold. Manu, the pew poll that abby referenced, shows the parties are pretty split on what they want obama to do in this situation. Has obama not been tough enough in dealing with the situation. They ask folks, more than half of the gop said yes. Less than onequarter of dems agreed with that statement. Look, no matter even if we say obama should do something given this obstructionist congress, its nearly impossible to do anything. It was pretty noncontroversial when it went through, mainly dealing with the expanding loan guarantees to the Ukrainian Government, and that took some time to get through. That was, you know, relatively noncontroversial bill. What would the president really do in this situation that would get broad bipart sfwlan support . Virtually nothin