Speaker 1: Now from our nation's capital. This is Bloomberg Sound On.
Speaker 1: I'm using every level available to me to bring down
Speaker 1: prices for the very to diminish the consequences of that
Speaker 1: are dangerous for our country. Everyone can agree that dis
Speaker 1: inflation is very painful. Bloomberg Sound On, Politics, Policy and
Speaker 1: perspective from DC's top names. Are we about to enter
Speaker 1: a new period based on the legislation we're seeing of
Speaker 1: government cracking down on big tax I could worry about
Speaker 1: that a lot, a lot, a lot. Bloomberg Sound On
Speaker 1: with Joe Matthew on Bloomberg Radio. Welcome to the threshold
Speaker 1: of the weekend and the fastest hour in politics, as
Speaker 1: we tackle some of the most pressing issues with a
Speaker 1: special guest. Steve Balmer is with us, the founder of
Speaker 1: us A Fact, the owner of the l A Clippers,
Speaker 1: former CEO of Microsoft, and more on his initiative to
Speaker 1: make government more trans parent and facts easier to find.
Speaker 1: We'll also talk about the impact of inflation, the tech
Speaker 1: route lately, and what might be next for anti trust
Speaker 1: here in Washington. Later, to lawmakers reach across the aisle
Speaker 1: and get something done, We'll have both Congressmen Dusty Johnson
Speaker 1: Republican from South Dakota, and John Gara Mendi, a Democrat
Speaker 1: from California, on their new legislation to lower shipping costs
Speaker 1: and inflation. You know, we talk every day here on
Speaker 1: Bloomberg Radio about government policies, the impact they have on
Speaker 1: the economy, on people's lives, and in the political sphere.
Speaker 1: The truth is often tested by the debate. Facts are
Speaker 1: used and abused, if not overlooked. Not everyone has a
Speaker 1: Bloomberg in front of him. That's why Steve Balmer launched
Speaker 1: a nonprofit called USA Facts, which gathers massive amounts of
Speaker 1: government data and puts it together, makes it accessible in
Speaker 1: a way that people can understand the impact of policies
Speaker 1: and specifically what we're spending on them. It now boasts
Speaker 1: an audience about twenty millions, equal to the size of
Speaker 1: a lot of media companies. And I'm glad to say
Speaker 1: that we're joined by Steve Balmer, of course, the former
Speaker 1: CEO of Microsoft current owner of the l A Clippers,
Speaker 1: along with his work at USA Facts. Steve, welcome back
Speaker 1: to Bloomberg. It's my pleasure to be here. Thanks for
Speaker 1: having me. I wanted to start with a fun basketball question,
Speaker 1: but well, as you know now, I'm from Boston and
Speaker 1: I'm just running on empty today. You understand this, I do,
Speaker 1: I do. I can be sympathetic, thank you. You know,
Speaker 1: we're always hungry for data here at Bloomberg. I'm guessing
Speaker 1: you know how to work this terminal a lot better
Speaker 1: than I do, actually, But that's why we were drawn
Speaker 1: to the work that you're doing at USA Facts, and
Speaker 1: I appreciate your being here to talk to us about it.
Speaker 1: The data tell a story and bring context through facts
Speaker 1: that at time in our history or the idea of
Speaker 1: facts is being challenged. Sometimes. Part of the problem that
Speaker 1: we experience, Steve here, in the news media is the
Speaker 1: splintering of audiences, right, people seeking information to reinforce what
Speaker 1: they already believe. You're out with your annual report here.
Speaker 1: How do you get this in front of people? Well,
Speaker 1: a lot of work, actually, and we do a combination
Speaker 1: of trying to help people find via search, our newsletter,
Speaker 1: come to us directly, and we also buy a lot
Speaker 1: of advertising. Even though we're not for profit, we really
Speaker 1: want people to get the facts, and we're out there
Speaker 1: social media primarily encouraging people too. And when we say
Speaker 1: the facts, we're saying two things. We're saying numbers, and
Speaker 1: we're saying history, no forecasts, no forecasts adjectives. Adjectives can
Speaker 1: get pretty partisan. Ironically, yes they can't. Numbers don't get
Speaker 1: very partisan. So we try to we try to stick
Speaker 1: to those two principles. And of course we're only using
Speaker 1: government numbers. Um. I know even those are suspect to
Speaker 1: some people. I have a lot of faith though in
Speaker 1: our our government and our statistical agencies. Is the aim
Speaker 1: to get this in front of people directly though this
Speaker 1: is a you know, a directed consumer product if you
Speaker 1: will or do you want to see news organizations using
Speaker 1: this in the context of their story? Is is is it
Speaker 1: all of the above? All the above? Okay, I would
Speaker 1: say all the above policymakers, media, but primarily consumers. At
Speaker 1: the end of the day, we we produce a lot
Speaker 1: of things. We produce uh and your report. Your audience
Speaker 1: will understand the notion of producing a ten K Securities
Speaker 1: and Exchange Commission report more detail, very dry, just the numbers.
Speaker 1: We essentially have a reference library that's searchable on our
Speaker 1: site to find important numbers and graphics that people might
Speaker 1: have that are not in our annual documents. And then
Speaker 1: we try to keep up with current affairs. Um, I'll
Speaker 1: find a bullet USA facts dot Org. There you go.
Speaker 1: We're not for profits. I think a little announcements. Okay,
Speaker 1: I don't have to tell you that people have lost
Speaker 1: trust in government institutions. This has been a big lesson
Speaker 1: over the past couple of years. Are we at a
Speaker 1: point based don't you just said about words versus numbers?
Speaker 1: Are numbers more valuable than words right now? Numbers in
Speaker 1: graphic Some people don't like numbers. I mean, they just
Speaker 1: don't resonate. It's just not in people's mind. Charts do
Speaker 1: do more good for some people. But that's a way
Speaker 1: of delivering numbers. So it is a way of delivering numbers.
Speaker 1: But it's an important distinction. I don't want to scare
Speaker 1: anybody off and just to say, look, if you don't
Speaker 1: want to look at tables and numbers, that's fine. Now
Speaker 1: there are people who I would say just aren't interested,
Speaker 1: uh in the news, or they're not interested in that
Speaker 1: middle ground where you really want to see what's going on,
Speaker 1: What really is the quality of our bridges and roads,
Speaker 1: what really has happened with inflation? If I said to
Speaker 1: you a fuel prices today, inflation adjusted, are exactly what
Speaker 1: they were pretty much in two thousand seven. Most people go, WHOA,
Speaker 1: that's but it's true. It might not make people feel
Speaker 1: any better because people get adjusted to those lower prices.
Speaker 1: And you know, this is not a USA facts point
Speaker 1: of view, but it is my exception. The citizens in
Speaker 1: the United States are our population. Our population likes consistency,
Speaker 1: and when things go up and down, whether it's prices
Speaker 1: or employment or the stock market, that's unsettling to people
Speaker 1: because they get used to a certain a certain way
Speaker 1: of doing things. And uh, you can see a lot
Speaker 1: of that in the numbers that are available. Some things
Speaker 1: just keep getting better, which is awesome. So it's numbers
Speaker 1: against the backdrop of history. It is you have to
Speaker 1: have that context for them to matter without context versus history.
Speaker 1: Firsts population, some numbers grow just because our population grows. Uh,
Speaker 1: in the context of other numbers that surround. Foreign aid
Speaker 1: is the easiest example. Foreign aid is roughly one percent
Speaker 1: of all government spending. And yet I think many Americans
Speaker 1: will say no foreign aid if we just cut it.
Speaker 1: And I think most people think foreign aid goes to
Speaker 1: poor cunt trees. It doesn't. It actually goes mostly to
Speaker 1: countries with whom we have some kind of military interaction.
Speaker 1: Our country is trying to emerge from one of the
Speaker 1: most challenging periods in our history. I think you would
Speaker 1: agree a pandemic, an insurrection, if I can use that
Speaker 1: word now, historic inflation, and a war in Ukraine. I
Speaker 1: was shocked to read that nearly one out of every
Speaker 1: seven hundred fifteen people died last year from COVID. What
Speaker 1: a statistic. That's only in the US, which helped to
Speaker 1: lower the average life expectancy based on your report by
Speaker 1: almost two years. Where are we in this recovery culturally, economically, Well,
Speaker 1: it strikes me, you know, a million people roughly have died,
Speaker 1: and if you look at the number of people who
Speaker 1: died in versus the difference is almost exactly the number
Speaker 1: of people who died from COVID. So life has been
Speaker 1: consistent except for this COVID overlaid, which has been serious
Speaker 1: and real. The third largest killer if you will, in
Speaker 1: what's COVID behind only heart disease and cancer, which are
Speaker 1: generally the big two. So it is a It is
Speaker 1: a big deal for sure, and everybody knows that. How
Speaker 1: are we coming out now we can take a look
Speaker 1: at the numbers hospitalization, which we have on USA Facts
Speaker 1: hospitalization cases, deaths. The death rate is down quite dramatically,
Speaker 1: and that's an adjective, but if you look at it today,
Speaker 1: I think it's roughly three odd people plus or minus
Speaker 1: that are dying every day. And I'm not saying that's
Speaker 1: a trivial number, but I will say in my own case,
Speaker 1: I've gone from being super super careful about COVID to
Speaker 1: just being careful. And the numbers do influence the way
Speaker 1: I think about this. That's the thing. Though this has
Speaker 1: impacted people's worldview. It's hard to to measure that with numbers.
Speaker 1: It is in the short run, and it's not in
Speaker 1: the long run. So well, in the long run, we're
Speaker 1: gonna see are we driving the same number of miles
Speaker 1: that we did pre COVID. We're gonna see what's going
Speaker 1: on with commercial office space. Is it the same. We're
Speaker 1: gonna see whether we're producing the same level of of
Speaker 1: c O two or will things because of the change
Speaker 1: in the structure of the economy. Will that influence emissions?
Speaker 1: We will say, see what happens with wages. We will
Speaker 1: see which sectors of the economy generate more jobs. I mean,
Speaker 1: there actually been an interesting transformation if you take a
Speaker 1: look at jobs and job openings, you know, out of
Speaker 1: some sectors and into warehousing and transportation logistics, it's been
Speaker 1: a huge grower. And if you stop and say, okay,
Speaker 1: that matches my mental model, we're in the Amazon uber
Speaker 1: eats generation because of the pandemic. It makes sense. You're
Speaker 1: talking about measuring our behavior though, right, kind of getting
Speaker 1: a sense of what we're doing with our day. It's
Speaker 1: hard to it's hard to measure someone's own perception of
Speaker 1: their more mentality. Yes I can't. I can't dispute that,
Speaker 1: But let me even take that one on just a
Speaker 1: little bit, just a little bit. Life expectancy. We don't
Speaker 1: like forecasts. We don't do forecast understood at USA facts.
Speaker 1: Life expectancy is actually a forecast and kind of a
Speaker 1: wild forecast. We had a pandemic last year. The life
Speaker 1: expectancy comes down below almost two years. But that's where
Speaker 1: somebody born today. Are we going to have another pandemic
Speaker 1: in the next seventy two years. I don't know how
Speaker 1: the numbers are done. I think they're done professionally. The
Speaker 1: thing we can look at is the average age at
Speaker 1: which people die. And if you're thinking, I'm sixty six
Speaker 1: years old, average person in America pre pandemic, I don't know.
Speaker 1: The number off the top of my head would be
Speaker 1: seventy two points something or seventy three approximately. I'm sixty
Speaker 1: six years old. Now I have to remember that I'm
Speaker 1: not necessarily going to die at the average age of death.
Speaker 1: With with that said, that probably represents my here and now.
Speaker 1: The thing that's going to get into my psyche is
Speaker 1: how long do I have? At least it gets into
Speaker 1: my say, which allows you to plan around uh. I
Speaker 1: would like to ask you a little bit more about
Speaker 1: what's happening in the economy right now. The issue of
Speaker 1: inflation is overwhelming just about everything else on people's minds,
Speaker 1: and it's become a big political football here in Washington.
Speaker 1: If people lost sight of reality when it comes to this,
Speaker 1: the ability that politicians in Washington have to influence the
Speaker 1: economy and prices specifically, are people asking for the impossible? Well,
Speaker 1: there's plenty of data that will give you perspective on this.
Speaker 1: The thing I encourage people to look at is chart
Speaker 1: what's going on with GDP. Chart what's going on with
Speaker 1: interest rates? We have it all all USA facts dot org.
Speaker 1: Look at what's happened for long term investment in our
Speaker 1: economy through capital expenditures and R and D not just
Speaker 1: by government but by private industry, and then ask yourself
Speaker 1: which things are consistent no matter what government does? Is
Speaker 1: R and D expenditure pretty consistent? The answer, by the
Speaker 1: way to that one is yes, are some things wild swingers? Yeah,
Speaker 1: there's some things that are wild swingers, whether it's employment
Speaker 1: or income. Many of them do correlate with a government action.
Speaker 1: I mean, you could see them on a chart, and
Speaker 1: they're not all positive correlation. You know. I think many
Speaker 1: people are very thankful for government response to the pandemic,
Speaker 1: and yet somebody can look at that and say, huh,
Speaker 1: I wonder if government response to the pandemic had anything
Speaker 1: to do with the current situation that we're in. It's
Speaker 1: it's a hotly debated topic. You're not going to try
Speaker 1: to give causality. But when people wake up every morning
Speaker 1: and say, well, damn it, Joe Biden, how come you
Speaker 1: haven't fixed this since yesterday? Or the Federal Reserve, when
Speaker 1: is this going to be done? There's only so much
Speaker 1: perfect Washington can do. Perhaps it's because you know, I'm
Speaker 1: very have been fortunate and very well off. My read
Speaker 1: is the government responds often triggers a positive and a
Speaker 1: negative reaction. And if you go back and take a
Speaker 1: look at what happened before two USA facts, go look
Speaker 1: at it. I think you'll find some interesting things that happened.
Speaker 1: And then we went way up and then we came
Speaker 1: way down. Same thing before two thousand, the dot com bubble,
Speaker 1: and early two thousands same thing. You know, we had
Speaker 1: the pandemic, and obviously we needed to come out, but man,
Speaker 1: did we come out too strong? Well, you know, as
Speaker 1: you should. Should Washington do more? Or are we better off?
Speaker 1: In some cases letting um, I'll just say the markets
Speaker 1: and are currently take care of things. And I'm not
Speaker 1: saying government shouldn't do anything. I think of government in
Speaker 1: some senses that the insurance company of last resort. It
Speaker 1: sounds like you see an impact, it just might not
Speaker 1: always be a good one. Correct, correct, And there are
Speaker 1: times it makes perfect sense in the pandemic, at least
Speaker 1: at some level, for the government to step in made sense.
Speaker 1: The levels of the question, yeah, the levels the question
Speaker 1: infrastructure bill, Yeah, if you actually look at the numbers
Speaker 1: as as presented by the Department of Transportation, guess what.
Speaker 1: Our roads and bridges have been improving slowly but steadily
Speaker 1: with the level of expenditure that existed pre the Infrastructure Bill.
Speaker 1: In fact, most of the money gets spent anyway by
Speaker 1: state and local government. Did we need an additional dose
Speaker 1: of money? I just posed it as a question. You
Speaker 1: mentioned two thousand one dot com. There's been a lot
Speaker 1: of comparisons in this market downturn recently. Do you see parallels?
Speaker 1: Are we in just a different world right now? We
Speaker 1: are in a well, if you just look at the context,
Speaker 1: we're in a different world. We're in a different interest
Speaker 1: rate environment, which I think is is very important, different
Speaker 1: profitability environment, a different profitability different uh are in terms
Speaker 1: of deficit spending, which has its own characteristics in terms
Speaker 1: of driving markets, driving inflation. So you don't feel that
Speaker 1: despair that you may have back then. Ironically, as CEO
Speaker 1: of Microsoft at the time, I did not feel despair.
Speaker 1: I felt opportunity because while everybody else was running for
Speaker 1: the hills in the tech industry saying the world's a disaster,
Speaker 1: I saw that as a time for us to double
Speaker 1: down and invest uh and build talent. Now we had
Speaker 1: people who were panicky, but we could take care of
Speaker 1: that in terms of what we did for people with compensation,
Speaker 1: so that one it wasn't a broader it was a
Speaker 1: less broad economic hit. I want to ask you about
Speaker 1: Washington's relationship with high tech, because loving to hate big
Speaker 1: tech has become a hobby for both Democrats and Republicans,
Speaker 1: but for different reasons. It's it's actually fascinated to me.
Speaker 1: Progressives think big tech is too big, what, too big
Speaker 1: to fail? Whatever, it might be too influential. Conservatives say
Speaker 1: their voices are being censored. As someone with firsthand experience
Speaker 1: though dealing with antitrust at Microsoft, are we about to
Speaker 1: enter a new period based on the legislation we're seeing
Speaker 1: of government cracking down on big tech. I could worry
Speaker 1: about that a lot, a lot, a lot, and now
Speaker 1: we're sort of past USA facts. I'll just give you
Speaker 1: my opinion. The great productivity improvement in our economy not
Speaker 1: growth in people, not inflation, but the key driver of
Speaker 1: GDP is productivity growth. My opinion, my reading would say
Speaker 1: the great driver if that has been technology, and nobody
Speaker 1: should want to slow down the innovation that comes from technology.
Speaker 1: There's a role in the technical technology business for startups.
Speaker 1: They change things. But there are also things that you
Speaker 1: can only do if you have large R and D
Speaker 1: budgets like Microsoft, Google, Apple, etcetera. So those are important things.
Speaker 1: Now are there things where it's appropriate for government to
Speaker 1: take a look and say, hey, something should change? I
Speaker 1: believe that. I think part of the problem the way
Speaker 1: that happens oftentimes those government wants to vilify the tech
Speaker 1: I felt vilified when we got hit with an anti
Speaker 1: trust loss it. The truth is, we ran our business,
Speaker 1: we ran it well, and then somebody did decide we
Speaker 1: should change our practice. Not that it was evil, but
Speaker 1: that wasn't the communication in the big tech world of today,
Speaker 1: I think people are getting vilified as opposed to appropriately regulated.
Speaker 1: And oh, by the way, I think regulations should come
Speaker 1: from um the agencies as opposed to the Congress, because
Speaker 1: there's a lot of nuance. If you say, hey, what
Speaker 1: can you express or not express on Twitter or Facebook?
Speaker 1: The truth of the matter is deciding those issues as
Speaker 1: a matter of policy. There's complicated questions and you want
Speaker 1: real experts on the government side in a issue to
Speaker 1: the tech side. To figure those things out. So do
Speaker 1: I worry about where things are going? Yeah? I worry
Speaker 1: about R and D spending. I know we could slow
Speaker 1: these tech companies down in ways we don't intend. It's
Speaker 1: okay if there are ways in which we really intend
Speaker 1: through regulation, but I have a lot of concern about it.
Speaker 1: As a majority shareholder of of Microsoft, I'm assuming you
Speaker 1: still are. Do you worry then about the government stepping
Speaker 1: in on this Activision acquisition? Is that still a good
Speaker 1: idea in your view? I think the Activision and I've
Speaker 1: said this to management team, I'm I'm excited about the
Speaker 1: Activision acquisition. They want to do. They do need to
Speaker 1: get through the heart Scot Rodino process. And you see
Speaker 1: Elizabeth Warren sending out tweets about it, and you start
Speaker 1: to wonder. But yes, and no, there's a reason why
Speaker 1: we have independent review and a Justice Department an FTC
Speaker 1: that reviewed these kinds of transactions. They are not political decisions.
Speaker 1: And you could say, hey, and some administrations things go
Speaker 1: a little more this way, a little bit more that way,
Speaker 1: which is true, but these are generally very high integrity
Speaker 1: people who are trying to make the right decision for
Speaker 1: for consumers. And businesses. Do you see it going through that?
Speaker 1: I can't predict. I'm not close enough to the situation.
Speaker 1: I'll just keep my fingers crossed. What do you do
Speaker 1: for fun? Do you play an Xbox? No, my kids
Speaker 1: are all gamers. I am not. I am not a gamer.
Speaker 1: I will confession. People have very simple questions about someone
Speaker 1: with your level of success. What do you do for fun?
Speaker 1: And by the way, what are you doing here? You
Speaker 1: could be on an island right now for fun. For me, um,
Speaker 1: the most fun thing I did for most of my life,
Speaker 1: for much of my life was go to my kids
Speaker 1: sporting events. My kids are all grown now, they go
Speaker 1: to your sporting exactly. Going to Clipper games is the
Speaker 1: most fun thing I do. I mean, I play golf
Speaker 1: and I exercise a variety of other things. But it
Speaker 1: is just such a rush. Not not quite as good
Speaker 1: as your kids games. There's nothing quite like about the
Speaker 1: emotion and tied to that. But but being chairman of
Speaker 1: the Clippers, you know, that's as they said, that's the
Speaker 1: best thing to being there. Steve Balmber, thank you for
Speaker 1: bringing us the data USA facts and for your insights
Speaker 1: today on Bloomberg. Thanks a lot appreciate it. Fascinating conversation
Speaker 1: you will only here on Bloomberg. Of course, speaking of inflation,
Speaker 1: which we spent a little bit of time on, Charlie
Speaker 1: Pellett mentioned this earlier, a new plan to fight inflation
Speaker 1: being prepared by the White House and Congressional Democrats. This
Speaker 1: just broke a short time ago, as I read on
Speaker 1: the terminal advanced talks underway on a package that would
Speaker 1: likely include capping the price of insulin. You've heard of these,
Speaker 1: at least individually proposed already in investments in both clean
Speaker 1: energy and fossil fuels that, according to our White House
Speaker 1: team talking with sources and agreement they say, could emerge
Speaker 1: as soon as next week. So next week could be
Speaker 1: another doozy. The January six Committee, of course, resumes hearings
Speaker 1: next week as well. And coming up, we're gonna take
Speaker 1: a look at how this is playing before audiences, of course,
Speaker 1: in our splintered media universe aforementioned, we're gonna get into
Speaker 1: it with Bloomberg media reporter Jerry Smith check traffic and
Speaker 1: markets on the way. Thanks for spending some time with
Speaker 1: us on a Friday. It's sound on and this is
Speaker 1: Bloomberg two more hearings are set for next week for
Speaker 1: the Select Committee investigating the attack on the Capitol of
Speaker 1: January six. As it went from prime time last week
Speaker 1: to daytime this week, and we've been taking a look
Speaker 1: at the ratings and getting a sense of how much
Speaker 1: of an impact this might be having. People have been
Speaker 1: trying to compare it to Watergate. Of course, uh, you know,
Speaker 1: I ran contra think of the hearings that you know
Speaker 1: have images burned in your brain that actually drew people
Speaker 1: to their TV sets. Now there's a lot more than TV.
Speaker 1: This is playing across Twitter and Facebook, social media and
Speaker 1: everywhere else, chopped up in bits, and it's consumed in
Speaker 1: different ways, which is why we wanted to talk about
Speaker 1: this with Bloomberg Media reporter Jerry Smith. Jerry, thanks for
Speaker 1: being with us. Let's start with what we know in
Speaker 1: terms of TV ratings. I remember twenty million was the
Speaker 1: number for the primetime debut. Where did it go from there?
Speaker 1: So the second hearing earlier this week got about eleven
Speaker 1: million viewers, so it was a decline from the first hearing.
Speaker 1: But you know, it's important to note that it was
Speaker 1: the first hearing was in prime time and the second
Speaker 1: hearing started at at ten am in the morning. A
Speaker 1: lot of people are at work, so I mean that
Speaker 1: that has to have factored into the ratings being lower.
Speaker 1: And of course a lot of people are watching at work,
Speaker 1: and that's I guess that's the interesting part now of
Speaker 1: capturing ratings and that this is the deal for all
Speaker 1: traditional media because you're cannibalized to some extent or maybe
Speaker 1: to a great extent by internet viewing people. There's streaming
Speaker 1: it on Twitter on platforms that I don't know or
Speaker 1: how how do these all get recognized? Right? The way
Speaker 1: that we measure TV audiences, uh, is much more complicated
Speaker 1: than it was for the Watergate hearings, where it was
Speaker 1: just a few channels. I mean, people are streaming this
Speaker 1: and there's not really a good way to count all
Speaker 1: those eyeballs across TV and streaming. UM. So it's it's
Speaker 1: an imperfect number that we're getting, but it is directionally
Speaker 1: shows you how it's going to be a challenge for
Speaker 1: this here, this committee to to continue after the first
Speaker 1: hearing where they got twenty million viewers, which is a
Speaker 1: pretty good number, you know, continue to draw that that
Speaker 1: that audience for a congressional hearing it's a really good number.
Speaker 1: Of course, to your point, I mean I said there
Speaker 1: was an unsuspecting audience there. My gosh. You put it
Speaker 1: on every network since Fox at eight o'clock and a
Speaker 1: lot of people are gonna end up watching it. I'm
Speaker 1: sure many intentional, but putting the context for us, uh,
Speaker 1: if you can, Jerry, I mean, I guess against big
Speaker 1: speeches State of the Union, maybe political conventions, what does
Speaker 1: twenty million mean for politics? Well, I mean it's going
Speaker 1: to be less than your state of the State of
Speaker 1: Union addraft and it's going to be less than you know,
Speaker 1: speeches where presidential candidates have accepted the nomination during the conventions.
Speaker 1: But you know, it's right up there, pretty close to um,
Speaker 1: you know the Bob Muller hearings that that got a
Speaker 1: lot of attention. UM. So you know, eleven million, twenty million,
Speaker 1: it's it's much larger than you're going to get for
Speaker 1: most you know, entertainment television shows on TV these days. Yeah, right, absolutely.
Speaker 1: The State of the Union this time around in two
Speaker 1: had thirty two million, which was a drop of two
Speaker 1: million from UH when Joe Biden was first talking to Congress.
Speaker 1: It's interesting to look at the just the comparison here,
Speaker 1: you know, whether this was the Oscars of politics or not.
Speaker 1: Did you think they can duplicate that debut audience on
Speaker 1: the last night because it goes back to prime time
Speaker 1: for the last full smash hear ring. I think it's
Speaker 1: gonna be challenging. I think there was a lot of
Speaker 1: excitement and build up to the first hearing UM and
Speaker 1: you know, now we've had several hearings and and it's
Speaker 1: possible that people have felt like they're getting a little
Speaker 1: fatigued by it. UM. So that's a real challenge for
Speaker 1: the hearing, the committee, and they're doing their best. I
Speaker 1: mean they um, they're trying to really slickly produce these hearings.
Speaker 1: UM there. It's not like the typical hearing where people
Speaker 1: are you know, you're getting the raw footage and people
Speaker 1: are going on and on when they're answering questions. I mean,
Speaker 1: a lot of these UM sound bites have been edited down.
Speaker 1: These are video testimony in a lot of cases that
Speaker 1: have been edited to really the most um, you know,
Speaker 1: important sound bites. And they're even trying to tease what
Speaker 1: they're going to have in the next hearing at the
Speaker 1: end of the hearing to kind of almost as if
Speaker 1: a TV show saying, you know, next yeah, stay tuned
Speaker 1: for the next episode, that that sort of thing. So
Speaker 1: they're doing the best they can to keep Americans engaged. Yeah,
Speaker 1: they literally have been. Uh it's been interesting to to
Speaker 1: consider the impact that that's this former president of ABC News,
Speaker 1: that's they've they've hired Republicans have tried to make a
Speaker 1: thing out of this, the impact that he's had on
Speaker 1: the production values here. Um, you're a media reporter, you
Speaker 1: do this for a living. What do you make of
Speaker 1: the optics of it so far? Is that actually having
Speaker 1: an impact? We've also had some, you know, pretty dry
Speaker 1: opening statements. We've had some very cautious testimony in some cases.
Speaker 1: How does this play to someone who's used to watch
Speaker 1: in Law and Order at eight o'clock? You know, I mean,
Speaker 1: it's it's a good question, and I think that it's um,
Speaker 1: you know, it's it's just it's very different than your
Speaker 1: typical hearing, and it is more engaging than your typical hearing.
Speaker 1: And that is something that the House Committee has really
Speaker 1: tried to do. I mean, they really spent a lot
Speaker 1: of time with their investigation, and they want They don't
Speaker 1: want it to fall on deaf ears. They want to
Speaker 1: keep people entertained and engaged to UM. So, you know,
Speaker 1: it remains to be seen whether all the networks are
Speaker 1: going to carry all the hearings. I was going to
Speaker 1: ask you that we don't know that about the final
Speaker 1: night either, do we. We don't know. I mean Fox
Speaker 1: News got a lot of criticism for not carrying the
Speaker 1: first hearing in prime time and instead they chose to
Speaker 1: stick with their typical lineup of you know, Sean Hannity
Speaker 1: and Tucker Carlson. They did air the second hearing, but
Speaker 1: we don't know whether they're going to continue, and their
Speaker 1: audience UM is certainly UM. You know, they're catering to
Speaker 1: a Republican audience that UM maybe doesn't want to hear
Speaker 1: some of the findings. So it's UM. You know, all
Speaker 1: the most of the other networks are carrying it, but
Speaker 1: UM and and people are watching online. I just think
Speaker 1: when you have so many hearings, it's difficult to keep
Speaker 1: people engaged. You find yourself watching it in sort of
Speaker 1: long form on TV. Are you are you consuming it
Speaker 1: in chunks on social media? Well, I mean that's that's
Speaker 1: an excellent point. I just think this whole media landscape
Speaker 1: is so different, and it's not just hearings, but but everything.
Speaker 1: I mean, even sports, um, and certainly cable news. Is
Speaker 1: a lot of people are just going through Facebook and
Speaker 1: Twitter and getting a little video clips um that people
Speaker 1: have edited, um oftentimes edited in such a way that
Speaker 1: that confirmed their political beliefs. So that's the media landscape
Speaker 1: that we live in. It's a far cry from around
Speaker 1: Contra hearings or the Watergate hearings. It's just a very
Speaker 1: different world we live in now where people can kind
Speaker 1: of create their own media world when there were three channels.
Speaker 1: It certainly brings us back to our conversation earlier this
Speaker 1: hour with Steve Palmer. Jerry, it's great to have you
Speaker 1: with us. I appreciate your insights. Jerry Smith, Bloomberg media
Speaker 1: reporter with us on Bloomberg Sound On. I'm Joe, Matthew
Speaker 1: and Washington. You made it to Friday and glad you're
Speaker 1: here on the fastest hour in politics. As we turned
Speaker 1: to something that actually got done, you could consider on
Speaker 1: Capitol Hill, a D and an R. Two lawmakers in
Speaker 1: an interesting approach towards solving the problem of inflation. And
Speaker 1: it starts with the shipping going into our ports. It's
Speaker 1: coming up next. We'll check traffic and the markets for
Speaker 1: you too, if you dare. Charlie Pellett will have an
Speaker 1: update next. This is Bloomberg. This is Bloomberg. Sound on
Speaker 1: on Bloomberg Radio. The White House and Democrats in Congress
Speaker 1: are making progress on a new plan to fight inflation.
Speaker 1: As we're reading on the terminal. We told you earlier
Speaker 1: this hour a breaker here, a bill they say could
Speaker 1: emerge next week. This would follow what the President signed
Speaker 1: in the law this week, an actual bipartisan piece of
Speaker 1: legislation aimed at lowering inflation by way of our ports.
Speaker 1: You heard the President call out the five big shipping
Speaker 1: companies last week in a speech at the Port of
Speaker 1: l A. The new ocean shipping law cracks down on price, increases,
Speaker 1: increases transparency, they say. And we're joined by a Democrat
Speaker 1: and a Republican who helped to make the legislation happen,
Speaker 1: Representative John Garamendi, Democrat from California, and Congressman Dusty Johnson,
Speaker 1: Republican South Dakota. Welcome to Bloomberg. Thanks for avais could
Speaker 1: be with you. I want to start with some numbers.
Speaker 1: Three sixty nine to forty two, a rare bipartisan win
Speaker 1: these days. In Washington. Congressman Johnson, I thought Democrats and
Speaker 1: Republicans were not allowed to work together. How did it happen? Well,
Speaker 1: there are a few people in Washington who are interested
Speaker 1: in solving problems rather than just complaining about them. And uh,
Speaker 1: John Garamendy and I are both people actually care about
Speaker 1: getting stuff done. And when you have a problem as
Speaker 1: big as the supply chain crunch and you get hard
Speaker 1: working people and hard working staff, yes, actually you can't
Speaker 1: get some things done in Washington. Still, Congressman Garamendy, how
Speaker 1: did it get done? It took several swings at the
Speaker 1: ball before you got that nice bipartisan win. Well, first
Speaker 1: of all, there was a serious problem, a very very
Speaker 1: serious problem facing agriculture in my district and Dusty and
Speaker 1: own district, and so that gave us the impetus were
Speaker 1: representatives were supposed to be dealing with the problems that
Speaker 1: our constituents has, And so we started working on it.
Speaker 1: And as we began putting together the legislation, well, first
Speaker 1: understanding what the problem was, where it was coming from,
Speaker 1: and then figuring out what to do about it. We
Speaker 1: discovered that it wasn't just agriculture. This is a problem
Speaker 1: that was facing the entire American economy, at least that
Speaker 1: portion of it that exports goods all around the world.
Speaker 1: And so we wound up with Amazon and Walmart and
Speaker 1: home Depot and the retail industry and agriculture and on
Speaker 1: and on saying, hey, we put part of this, we
Speaker 1: want to be part of this because we're looking for
Speaker 1: a solution to our problem. And that's where where it grew.
Speaker 1: And ultimately that led to the bipartisan uh. And I
Speaker 1: would say the entire American economy except uh, the ocean shippers.
Speaker 1: They didn't think much of this piece of legislation, but
Speaker 1: they were. I'll be curious to hear a little more
Speaker 1: about that, because we spent the last year here at
Speaker 1: Bloomberg talking about supply chain and inflation, probably more than
Speaker 1: any two single issues, and of course they cross over here.
Speaker 1: They certainly do in your bill, Congressman Johnson. It was
Speaker 1: written out of a need, as you've both expressed here,
Speaker 1: and a big shift in shipping following the pandemic. When
Speaker 1: do we see implementation and maybe a better question alleviation
Speaker 1: on the supply chain. Is this a long term fix
Speaker 1: or can we see something soon? Well, this is something
Speaker 1: we've needed for a long time. You know, pandemic really
Speaker 1: laid there the problem. But the problem has been there
Speaker 1: for a while. The reality is that all of the
Speaker 1: large ocean carriers that take American goods to Asia are
Speaker 1: foreign flag and the five biggest of these carriers control
Speaker 1: seventy year sev the market. And I believe in the
Speaker 1: free market, but the free book market is many buyers
Speaker 1: and many sellers, and in that way, people can keep
Speaker 1: each other on us. That is not what you have
Speaker 1: in this ocean carrier industry. And as a result, they
Speaker 1: were in a position where they could discriminate against American goods,
Speaker 1: and that's exactly what they were doing. Last year, six
Speaker 1: of the containers that went back to Asia went back empty.
Speaker 1: At a time that we're in American agricultural goods were
Speaker 1: literally rotting on the ports. So your question about how
Speaker 1: quickly will this get fixed? I talked to the chairman
Speaker 1: of the Federal Maritime Commission. These are the cops on
Speaker 1: the beat that we've given the new authority to. They've
Speaker 1: said that things have already gotten better. That just the
Speaker 1: fact that Congress spoke with one voice, with strong bipartisan support,
Speaker 1: put these folks on notice that if they step out
Speaker 1: of line, if they don't play by some basic rules
Speaker 1: of the road, there are going to be they're going
Speaker 1: to be held accountable. And so things have already gotten better.
Speaker 1: But I think over the course of the next year,
Speaker 1: as the Federal Maritime Commission completes their rulemaking, you're going
Speaker 1: to see things progress even further. Congressman Garamendi, this legislation
Speaker 1: bars these ocean carriers were talking about from from declining
Speaker 1: opportunities for U S exports to to Congressman Johnson's point,
Speaker 1: going back to port empty. That's something that can take
Speaker 1: effect now. But can it also increase congestion at our ports.
Speaker 1: Probably not. Uh. The problem of port congestion had to
Speaker 1: do with the really the shutdown of the of the
Speaker 1: world economy and then the rapid reopening of it, and
Speaker 1: then the surge of imports into the United States from
Speaker 1: the Asian countries because of the tent up demand and
Speaker 1: the u and also the the amount of goods that
Speaker 1: were available to be shipped. That was the initial cause
Speaker 1: of the congestion. But that congestion also is one of
Speaker 1: the factors in the current inflation problem, the cost of
Speaker 1: because there is such a demand in the Pacific countries
Speaker 1: to import into the United States that allowed the ocean
Speaker 1: shippers to take advantage of that demand and the concentration
Speaker 1: that Dusty just mentioned where there wasn't no other competition,
Speaker 1: So the cost went up tenfold at at minimum at
Speaker 1: least tenfold for the importation for the cost of importing,
Speaker 1: and that cost was directly passed on to American consumers
Speaker 1: in what we now call inflation. So I think I
Speaker 1: understand how you're both going to answer this with With
Speaker 1: that said, but I wonder if you agree with what
Speaker 1: President Biden has been saying and just just as recently
Speaker 1: in your state, Congressman Garamandi at the Port of l
Speaker 1: A about a week ago, that the marketplace manipulation is
Speaker 1: partly the blame and and monopolization for the backlog, that
Speaker 1: there is in fact some gouging going on here. Do
Speaker 1: you both see it that way? First off, I would
Speaker 1: know that we know that this is not a silver bullet.
Speaker 1: I mean, some of this inflation is natural, uh, you know,
Speaker 1: particularly as it relates to products coming into this country.
Speaker 1: There's a tremendous amount of demand for consumer electronics from Asia,
Speaker 1: and so if you don't have enough slots on a ship,
Speaker 1: how do you figure out how do your ration that access?
Speaker 1: And so you do understand white prices would go up
Speaker 1: as you go from Asia to America. It made a
Speaker 1: lot less sense as as it was related to how
Speaker 1: do you get products from America over over to Asia
Speaker 1: where people have purchased them. That did not seem to
Speaker 1: make as much economic sense. And frankly, our bill, you
Speaker 1: asked John if it was going to make the congestion worse,
Speaker 1: it's not because right now we've got all these American
Speaker 1: egg products. They're on the port there in the way,
Speaker 1: they're making it harder to get products in and out.
Speaker 1: Getting those American egg products back out to the customers
Speaker 1: that want to buy them, he is actually going to
Speaker 1: make the whole to run a lot better. The foreign
Speaker 1: flagged ocean carriers, it's not their job to do to
Speaker 1: make their decisions on the basis of what is right
Speaker 1: for America. Sure, that's Congress's job. And so these guys
Speaker 1: are going to increase rates. When they can increase rates,
Speaker 1: they're gonna treat American companies poorly, and when we see
Speaker 1: these abuses, it's our job, It's Dusty Johnson's jobs, John
Speaker 1: Garamendi's job to step up and say, wait a second,
Speaker 1: what's the appropriate regulatory regime here to make sure that
Speaker 1: if you're going to show up and use American ports,
Speaker 1: that you have to play by some basic rules of
Speaker 1: the road. That's why this was such a big bipartisan success. Sure,
Speaker 1: I asked about congestion, just out of curiosity. Does it
Speaker 1: cause ships to wait to refill instead of you know,
Speaker 1: getting out of the port and heading back empty, if
Speaker 1: that creates a wait time? And I also wonder about
Speaker 1: the ground aspect of this. Some of the reaction that
Speaker 1: we heard from the carriers UH suggested that we needed
Speaker 1: to do more for for our are landborn shipping process
Speaker 1: here as well, because we've seen obviously trucks lining up
Speaker 1: even after the President brought the ports on the West coast.
Speaker 1: Congressman Garamendi, how tight is that situation now trying to
Speaker 1: find drivers trying to move goods once they get to
Speaker 1: the port. Well, Dusty hit part of this, and that
Speaker 1: is if you're if you have agricultural exports that are
Speaker 1: waiting to be shipped. You now have congestion at the dock.
Speaker 1: The more of those containers that get on the ship
Speaker 1: and go back to Asia, the less congestion there will
Speaker 1: be on the dock. Uh. The other piece of this
Speaker 1: issue is that there's a very powerful economic incentive for
Speaker 1: the ocean shippers to get that container, that empty container
Speaker 1: back to the Western Pacific, back to China, Japan, wherever,
Speaker 1: because they are able to get perhaps ten times more
Speaker 1: payment from the China exporter and they would get from
Speaker 1: the American exporter. That empty container can be turned around
Speaker 1: very very quickly in China, but if it's full of
Speaker 1: American exports, it would probably take two or three weeks
Speaker 1: and maybe even a month before the empty containers ready
Speaker 1: to be put back on the ship. That's very helpful information. Lastly,
Speaker 1: Congressman Johnson, your thought on that as we heard the
Speaker 1: reaction from the World Shipping Council that America needs to
Speaker 1: make the same commitment to invest in its landside logistics infrastructure.
Speaker 1: What do we need to do on our end? Well, yeah,
Speaker 1: the ports are not the only problem. We're eighty thousand
Speaker 1: truck drivers short in this country. There's a lot we
Speaker 1: can do there you know, and just recently we've it's
Speaker 1: gotten harder to get a cd L, and I think
Speaker 1: we probably want to make sure we're right sizing that
Speaker 1: safety and regulatory regime. And and we also have a
Speaker 1: lot of young drivers, I mean people who have driven
Speaker 1: tanks for Uncle Sam. They can drive up and down
Speaker 1: the coast to California all week long, but they can't
Speaker 1: go from Kelly Forny, Arizona until their twenty one. There's
Speaker 1: a pilot project that is going to make it easier
Speaker 1: for some younger drivers, younger drivers. Would you guys both
Speaker 1: collaborate on a trucker's bill, a driver's bill? Well, listen,
Speaker 1: if it's going to move the ball forward. Yeah, I
Speaker 1: mean that's the kind of thing that I think you're
Speaker 1: gonna be Team garam Eddy and team Johnson worked together on.
Speaker 1: Because this is not a one off. We want to
Speaker 1: continue to work to make things better. I'mus for Garamendi
Speaker 1: and Johnson. We thank you for being here together. I'm Joe,
Speaker 1: Matthew and Washington. See you next week. This is Bloomberg