1 00:00:00,880 --> 00:00:04,360 Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch us 2 00:00:04,400 --> 00:00:06,479 Speaker 1: live weekdays at one Eastern. 3 00:00:06,160 --> 00:00:09,360 Speaker 2: On Bloomberg dot com, the iHeartRadio app and the Bloomberg 4 00:00:09,400 --> 00:00:12,800 Speaker 2: Business App, or listening on demand wherever you get your podcasts. 5 00:00:13,840 --> 00:00:15,920 Speaker 3: As the pool of candidates for the twenty twenty four 6 00:00:16,000 --> 00:00:19,840 Speaker 3: election continues to grow, so does middle class here in 7 00:00:19,840 --> 00:00:23,040 Speaker 3: the United States. For President Biden, this group is at 8 00:00:23,079 --> 00:00:25,440 Speaker 3: the center of his core economic policy. 9 00:00:26,360 --> 00:00:29,280 Speaker 4: I'm here in Chicago today for the first quarter of 10 00:00:29,280 --> 00:00:32,440 Speaker 4: the twenty first century to talk about the economic vision 11 00:00:32,440 --> 00:00:35,599 Speaker 4: for this country, the economy that grows the economy from 12 00:00:35,640 --> 00:00:38,400 Speaker 4: the middle out the bottom up, instead of just the 13 00:00:38,440 --> 00:00:42,520 Speaker 4: top down. When that happens, everybody does well. 14 00:00:42,880 --> 00:00:45,839 Speaker 3: In sixteen months out from election day, Biden has a 15 00:00:45,880 --> 00:00:49,640 Speaker 3: middle class problem. The economic anxiety of America's middle class 16 00:00:49,800 --> 00:00:52,800 Speaker 3: could make or break his chances of re election, and 17 00:00:52,840 --> 00:00:55,840 Speaker 3: that is the key topic of today's Big Take. So 18 00:00:55,920 --> 00:00:58,120 Speaker 3: joining us to discuss is Sean Donnan, one of the 19 00:00:58,160 --> 00:01:01,680 Speaker 3: authors of the story, Bloomberg News senior writer for Economics, 20 00:01:01,680 --> 00:01:05,959 Speaker 3: and we've got Nancy Cook, Bloomberg's senior national political correspondent. 21 00:01:06,000 --> 00:01:08,920 Speaker 3: Thank you both for being here. Nancy, I'm going to 22 00:01:09,000 --> 00:01:11,760 Speaker 3: start it off with you, because the President has a 23 00:01:11,800 --> 00:01:14,440 Speaker 3: pretty strong argument to make on the economy. At least 24 00:01:14,520 --> 00:01:17,120 Speaker 3: right now, you could say, we've got some strong jobs data, 25 00:01:17,280 --> 00:01:20,399 Speaker 3: the Fed is likely to start cutting rates by the 26 00:01:20,440 --> 00:01:23,959 Speaker 3: time the election rolls around, Inflation expectations are starting to 27 00:01:24,000 --> 00:01:27,520 Speaker 3: cool off. Does all of that work as his core 28 00:01:27,800 --> 00:01:33,040 Speaker 3: messaging heading into the election. If Americans are still struggling 29 00:01:33,080 --> 00:01:34,320 Speaker 3: financially at home. 30 00:01:34,800 --> 00:01:37,440 Speaker 5: Well, that is really the great challenge for the twenty 31 00:01:37,480 --> 00:01:40,199 Speaker 5: twenty four election and for Democrats. There is a real 32 00:01:40,280 --> 00:01:44,319 Speaker 5: disconnect between a lot of positive economic data like the 33 00:01:44,440 --> 00:01:47,800 Speaker 5: very low unemployment rate, or the fact that inflation is 34 00:01:47,840 --> 00:01:50,560 Speaker 5: starting to come down, or the fact that we just 35 00:01:50,600 --> 00:01:52,960 Speaker 5: have been rising, and how people in the middle class 36 00:01:53,000 --> 00:01:56,000 Speaker 5: actually feel. People in the middle class, as Shawn's great 37 00:01:56,040 --> 00:02:00,720 Speaker 5: piece pointed out, really feel uncertain. There has been this 38 00:02:00,840 --> 00:02:03,320 Speaker 5: threat of a recession for the past year. People have 39 00:02:03,360 --> 00:02:06,800 Speaker 5: been talking about their nervous about that. Groceries have really 40 00:02:06,840 --> 00:02:10,639 Speaker 5: been high, gas prices have fluctuated. You know, people are 41 00:02:10,680 --> 00:02:15,440 Speaker 5: really feeling, you know, a little bit financial uncertainty, particularly 42 00:02:15,520 --> 00:02:17,760 Speaker 5: as a lot of that stimulus money that we saw 43 00:02:17,800 --> 00:02:20,920 Speaker 5: the government pump into the economy from COVID has started 44 00:02:20,919 --> 00:02:23,840 Speaker 5: to leave the economy and is no longer in people's 45 00:02:24,040 --> 00:02:26,800 Speaker 5: bank accounts, and so I just think people are feeling 46 00:02:26,840 --> 00:02:28,600 Speaker 5: a certain amount of anks. And so the trick for 47 00:02:28,600 --> 00:02:32,000 Speaker 5: the Biden White House is to actually sell their economic 48 00:02:32,040 --> 00:02:36,079 Speaker 5: agenda and to make people feel like their economic prospects 49 00:02:36,120 --> 00:02:38,519 Speaker 5: are good. And that's something that they haven't been able 50 00:02:38,560 --> 00:02:39,239 Speaker 5: to do so far. 51 00:02:39,919 --> 00:02:42,760 Speaker 3: And Sean, thanks for joining us. Great to speak with 52 00:02:42,800 --> 00:02:44,920 Speaker 3: you here because you're one of the three writers on 53 00:02:44,960 --> 00:02:47,400 Speaker 3: this piece. Talk me through some of the data that 54 00:02:47,440 --> 00:02:50,320 Speaker 3: you found in your reporting about kind of the angst 55 00:02:50,360 --> 00:02:51,480 Speaker 3: of the American middle. 56 00:02:51,280 --> 00:02:54,720 Speaker 6: Class Nancy hidden on ahead there where she talks about 57 00:02:54,720 --> 00:02:57,280 Speaker 6: the White House struggling to get its message across to 58 00:02:58,120 --> 00:03:00,240 Speaker 6: the middle class. But what we found is that when 59 00:03:00,280 --> 00:03:03,080 Speaker 6: you drill down, it's not just that they're not listening. 60 00:03:03,120 --> 00:03:05,520 Speaker 6: It's that they're also looking at what is happening to 61 00:03:05,560 --> 00:03:08,000 Speaker 6: their household budgets. They're looking at what is happening to 62 00:03:08,080 --> 00:03:12,600 Speaker 6: interest rates, and they're worried about what lies ahead. If 63 00:03:12,840 --> 00:03:15,760 Speaker 6: the Fed starts cutting rates between now and the election 64 00:03:15,960 --> 00:03:19,359 Speaker 6: is probably where it may well be because the US 65 00:03:19,480 --> 00:03:23,040 Speaker 6: is slipping into a recession and they're conscious of that. 66 00:03:23,440 --> 00:03:26,640 Speaker 6: So we looked at household expenditure data, and what we 67 00:03:26,720 --> 00:03:29,760 Speaker 6: found is that the average middle class household spent eight 68 00:03:29,840 --> 00:03:35,240 Speaker 6: thousand dollars more annually on household expenses than it did 69 00:03:35,320 --> 00:03:38,520 Speaker 6: before the pandemic in twenty twenty two, and since then 70 00:03:38,560 --> 00:03:41,720 Speaker 6: we know that prices have risen further. We also looked 71 00:03:41,760 --> 00:03:45,000 Speaker 6: at wealth data, and what the wealth data shows us 72 00:03:45,360 --> 00:03:48,600 Speaker 6: is that since the FED started raising interest rates in 73 00:03:48,720 --> 00:03:52,520 Speaker 6: March of twenty twenty two, the US middle class has 74 00:03:52,800 --> 00:03:55,920 Speaker 6: lost somewhere around two two and a half trillion dollars 75 00:03:56,280 --> 00:04:00,840 Speaker 6: in wealth. That's associated with housing prices, associated with what 76 00:04:00,840 --> 00:04:05,440 Speaker 6: we've seen swing in the markets, retirement savings, and so on. 77 00:04:05,520 --> 00:04:09,360 Speaker 6: We also ran a poll working with the folks at 78 00:04:09,400 --> 00:04:13,040 Speaker 6: the Harris Pole. We've been running a quarterly poll looking 79 00:04:13,080 --> 00:04:18,280 Speaker 6: at how middle class Americans feel about their personal economic 80 00:04:18,360 --> 00:04:22,760 Speaker 6: situation and the economy more broadly. The emotions that come 81 00:04:22,880 --> 00:04:26,160 Speaker 6: up when they are asked about the economy more broadly, 82 00:04:26,200 --> 00:04:28,840 Speaker 6: the top emotions that they list are anxiety and stress. 83 00:04:29,120 --> 00:04:32,520 Speaker 6: When they think about their personal situation and they're asked, 84 00:04:32,760 --> 00:04:35,239 Speaker 6: do you expect things to get better in the next year, 85 00:04:35,839 --> 00:04:39,840 Speaker 6: only thirty nine percent of middle class Americans said they 86 00:04:39,880 --> 00:04:42,520 Speaker 6: expected things to improve from now. So I mean not 87 00:04:42,560 --> 00:04:46,320 Speaker 6: feeling very optimistic. They're feeling anxious, they're stressed, and they're 88 00:04:46,360 --> 00:04:50,960 Speaker 6: looking at some very real impact on their household balance sheet. 89 00:04:51,360 --> 00:04:53,640 Speaker 3: Yeah, and that real impact came up during a lot 90 00:04:53,680 --> 00:04:56,920 Speaker 3: of your conversations. Again, you and your colleagues interviewing two 91 00:04:57,040 --> 00:04:59,720 Speaker 3: dozen members of the middle class. Let's listen in to 92 00:05:00,360 --> 00:05:01,559 Speaker 3: of what they had to say. 93 00:05:02,120 --> 00:05:03,799 Speaker 7: The middle class is getting squeezed. 94 00:05:04,160 --> 00:05:08,840 Speaker 6: There's programs for people with less means, there's a lot 95 00:05:08,880 --> 00:05:12,120 Speaker 6: of tax cuts for high earners. 96 00:05:12,480 --> 00:05:15,360 Speaker 4: I was caught in a layoff back in February. 97 00:05:15,560 --> 00:05:18,040 Speaker 2: There hasn't been the opportunities out there that there were 98 00:05:18,080 --> 00:05:18,680 Speaker 2: the first time. 99 00:05:18,520 --> 00:05:19,120 Speaker 6: I went through this. 100 00:05:19,360 --> 00:05:21,280 Speaker 8: Most people don't fall into. 101 00:05:21,120 --> 00:05:24,640 Speaker 1: Middle class anymore. They'd fall more into lower middle class 102 00:05:24,720 --> 00:05:26,719 Speaker 1: or upper lower class. 103 00:05:28,839 --> 00:05:32,479 Speaker 3: All right. So, Sean, when you're listening into some of 104 00:05:32,520 --> 00:05:35,640 Speaker 3: those statements from the folks that you interviewed, I'm curious 105 00:05:35,760 --> 00:05:38,599 Speaker 3: if there's anything that we missed from that sound that 106 00:05:38,600 --> 00:05:40,960 Speaker 3: you could tell our listeners about. Are there any personal 107 00:05:41,000 --> 00:05:43,760 Speaker 3: stories that have really stuck with you stood out to you. 108 00:05:45,600 --> 00:05:48,600 Speaker 6: Yeah, Look, I think what you're you heard they're from 109 00:05:48,640 --> 00:05:52,120 Speaker 6: Tamy Pearson, Ron Davis and Laurie Blumstein. And those are 110 00:05:52,160 --> 00:05:56,839 Speaker 6: three people who are in their fifties and sixties right now. 111 00:05:57,720 --> 00:06:03,680 Speaker 6: Tammy and Laurie are both retired, and Ron who's the 112 00:06:03,720 --> 00:06:06,200 Speaker 6: gentleman in the middle there, who was laid off as 113 00:06:06,200 --> 00:06:12,600 Speaker 6: a business executive in Minnesota. All three of them will 114 00:06:12,640 --> 00:06:15,280 Speaker 6: tell you that they have a relative level of economic 115 00:06:15,320 --> 00:06:18,479 Speaker 6: security right now. That is what it means to be 116 00:06:18,600 --> 00:06:20,320 Speaker 6: the middle class in America. It means you can write 117 00:06:20,320 --> 00:06:24,919 Speaker 6: out a certain amount of stress, of financial stress. But 118 00:06:25,040 --> 00:06:28,799 Speaker 6: they're all anxious and they're also all confronting things that 119 00:06:29,960 --> 00:06:32,279 Speaker 6: are kind of beyond their power. Tammy will tell you 120 00:06:32,360 --> 00:06:36,119 Speaker 6: that her retirement portfolio is down twenty percent. Ron Will 121 00:06:36,200 --> 00:06:39,760 Speaker 6: has been laid off twice actually in the last two years. 122 00:06:40,520 --> 00:06:43,680 Speaker 6: And Laurie is used to work in the mortgage industry 123 00:06:43,680 --> 00:06:46,799 Speaker 6: and she wishes she was still working in the mortgage industry, 124 00:06:46,880 --> 00:06:48,960 Speaker 6: but she was laid off last August and that kind 125 00:06:49,000 --> 00:06:52,760 Speaker 6: of forced her into retirement. And it's that vulnerability to 126 00:06:52,880 --> 00:06:55,440 Speaker 6: what's the broader things that are happening in the economy 127 00:06:55,839 --> 00:06:58,680 Speaker 6: that kind of creates that anxiety that we see show 128 00:06:58,760 --> 00:06:59,760 Speaker 6: up in the broader poles. 129 00:07:00,200 --> 00:07:03,200 Speaker 3: Yeah, and this stat from your story really stuck with me. 130 00:07:03,720 --> 00:07:05,640 Speaker 3: You write that by the middle of twenty twenty two, 131 00:07:06,120 --> 00:07:09,159 Speaker 3: middle class households were spending eight thousand dollars more each 132 00:07:09,240 --> 00:07:12,200 Speaker 3: year than in twenty nineteen before the pandemic, a lot 133 00:07:12,240 --> 00:07:15,040 Speaker 3: of it on essentials like housing, transportation, and food. And 134 00:07:15,080 --> 00:07:17,120 Speaker 3: I know you talked about that a little bit earlier 135 00:07:17,160 --> 00:07:20,600 Speaker 3: to Sean, But Nancy, I'm curious as we talked about 136 00:07:20,600 --> 00:07:23,760 Speaker 3: Biden's doing all of this work on the economy, but 137 00:07:24,520 --> 00:07:26,840 Speaker 3: is any of that work going to have a tangible 138 00:07:26,960 --> 00:07:30,800 Speaker 3: impact on consumers at home who are having to spend 139 00:07:30,800 --> 00:07:35,080 Speaker 3: on these essentials by November fifth of twenty twenty four. 140 00:07:36,720 --> 00:07:39,200 Speaker 5: Well, I think the Biden team would argue that they 141 00:07:39,240 --> 00:07:41,480 Speaker 5: are doing the best that they can. You know, they're 142 00:07:41,480 --> 00:07:45,440 Speaker 5: trying to tackle everything from inflation. They argue that the 143 00:07:45,520 --> 00:07:48,680 Speaker 5: unemployment rate is low. They're also trying to tackle a 144 00:07:48,720 --> 00:07:52,960 Speaker 5: bunch of like hidden fees through regulations that consumers face, 145 00:07:53,040 --> 00:07:56,120 Speaker 5: like airline fees or sort of overdraft fees from banks, 146 00:07:56,160 --> 00:07:59,200 Speaker 5: and they argue that those things really add up. I 147 00:07:59,280 --> 00:08:02,360 Speaker 5: would say that and tell inflation really gets under control 148 00:08:02,440 --> 00:08:05,600 Speaker 5: and people go to the grocery store and don't see 149 00:08:05,600 --> 00:08:08,040 Speaker 5: the price of eggs as high or meat as high, 150 00:08:08,600 --> 00:08:11,400 Speaker 5: or you know, travel isn't as high like airline tickets. 151 00:08:11,440 --> 00:08:13,680 Speaker 5: I think Americans are still going to feel like this 152 00:08:13,720 --> 00:08:17,520 Speaker 5: little bit of uncertainty about the economy and concern that 153 00:08:17,600 --> 00:08:19,880 Speaker 5: so much of their dollars are just going to like 154 00:08:20,360 --> 00:08:25,920 Speaker 5: these basic things like groceries, gas, you know, they're housing 155 00:08:26,120 --> 00:08:28,640 Speaker 5: rents have gone up, and I think until the Biden 156 00:08:28,680 --> 00:08:32,040 Speaker 5: team really gets those things under control and makes Americans 157 00:08:32,040 --> 00:08:35,679 Speaker 5: feel better about them and better about their economic prospects, 158 00:08:36,000 --> 00:08:37,920 Speaker 5: I think that this will continue to be a theme 159 00:08:37,960 --> 00:08:40,840 Speaker 5: for them in twenty twenty four, and it's certainly something 160 00:08:40,880 --> 00:08:43,760 Speaker 5: that we will expect the Republicans to hit Biden on 161 00:08:44,040 --> 00:08:47,000 Speaker 5: in the next seventeen months before the twenty twenty four election. 162 00:08:47,480 --> 00:08:51,120 Speaker 3: Yeah, we're already hearing Republicans do that on the campaign trail. 163 00:08:51,160 --> 00:08:53,520 Speaker 3: Here's what former President Trump had to say at a 164 00:08:53,640 --> 00:08:56,480 Speaker 3: rally in South Carolina about Biden and inflation. 165 00:08:57,160 --> 00:09:00,920 Speaker 9: We will stop Biden's inflation nightmare, and I will reverse 166 00:09:01,000 --> 00:09:06,080 Speaker 9: every one of Biden's globalist economic portrayals, and once again 167 00:09:06,480 --> 00:09:08,800 Speaker 9: we will put America first, and we'll put it first 168 00:09:08,840 --> 00:09:09,760 Speaker 9: like never before. 169 00:09:12,400 --> 00:09:15,520 Speaker 3: So Nancy, in hearing that sound, I'm curious if you 170 00:09:15,520 --> 00:09:17,920 Speaker 3: can talk to me about whether part of this is 171 00:09:17,920 --> 00:09:23,199 Speaker 3: that Republican candidates and former President Trump in particular, are 172 00:09:23,240 --> 00:09:25,480 Speaker 3: going to be able to go out on the campaign 173 00:09:25,520 --> 00:09:29,280 Speaker 3: trail and talk to voters and kind of recognize and 174 00:09:29,360 --> 00:09:32,839 Speaker 3: validate their economic concerns versus what we're hearing from the 175 00:09:32,880 --> 00:09:35,160 Speaker 3: White House, which is, hey, we're doing a lot for 176 00:09:35,200 --> 00:09:38,839 Speaker 3: you guys. Things are tough, but we're really trying for you. 177 00:09:39,760 --> 00:09:43,400 Speaker 3: Can you talk me through which of those two kind 178 00:09:43,440 --> 00:09:46,880 Speaker 3: of strategies might be more effective on the campaign trail. 179 00:09:48,360 --> 00:09:50,640 Speaker 5: Well, what we have is we have going back to 180 00:09:50,679 --> 00:09:54,680 Speaker 5: the midterms in twenty twenty two, and the economy was 181 00:09:54,800 --> 00:09:57,920 Speaker 5: in a rougher spot than than it is now, arguably, 182 00:09:58,520 --> 00:10:02,520 Speaker 5: and the Democrats still suffered losses, but definitely not as 183 00:10:03,480 --> 00:10:08,000 Speaker 5: great a loss as many people anticipated, including people in 184 00:10:08,000 --> 00:10:11,040 Speaker 5: the White House. And so I think the Democrats would say, 185 00:10:11,200 --> 00:10:14,079 Speaker 5: you know, look, the economy, you know, inflation was a 186 00:10:14,120 --> 00:10:17,240 Speaker 5: bad then, and we still you know, people still weren't 187 00:10:17,240 --> 00:10:19,600 Speaker 5: totally buying the Republican's message, and there were a lot 188 00:10:19,600 --> 00:10:21,720 Speaker 5: of reasons for that. A lot of voters are mad 189 00:10:21,800 --> 00:10:25,120 Speaker 5: about abortion policies from the Supreme Court. They feel like 190 00:10:25,280 --> 00:10:27,880 Speaker 5: the Republican Party poses a threat to democracy. 191 00:10:27,960 --> 00:10:28,640 Speaker 7: So people we. 192 00:10:28,640 --> 00:10:31,560 Speaker 5: Saw in the midterms, we're voting on a much wider 193 00:10:31,600 --> 00:10:34,880 Speaker 5: spectrum of issues than just the economy. I think the 194 00:10:35,000 --> 00:10:39,040 Speaker 5: question for twenty twenty four is can Democrats sort of 195 00:10:39,040 --> 00:10:42,880 Speaker 5: continue to focus on these other issues like abortion or 196 00:10:43,920 --> 00:10:46,599 Speaker 5: you know, social security and Medicare and their efforts to 197 00:10:46,679 --> 00:10:50,240 Speaker 5: protect that, or does it become an election mostly about 198 00:10:50,280 --> 00:10:53,280 Speaker 5: the economy. And I will say that I've spent a 199 00:10:53,320 --> 00:10:55,360 Speaker 5: lot of time on the road the last six months, 200 00:10:55,679 --> 00:10:58,360 Speaker 5: and I've seen a lot of the Republican candidates in person, 201 00:10:58,760 --> 00:11:02,160 Speaker 5: and while they do realize knock Biden for inflation and 202 00:11:02,240 --> 00:11:04,760 Speaker 5: his economic record, I would say that most of the 203 00:11:05,480 --> 00:11:07,560 Speaker 5: or all of the Republican candidates so far, are not 204 00:11:07,720 --> 00:11:11,440 Speaker 5: putting forward their own economic proposals of what they would 205 00:11:11,480 --> 00:11:14,160 Speaker 5: actually do detain inflation or what they would do in 206 00:11:14,240 --> 00:11:17,000 Speaker 5: terms of fiscal policy. And so while it's like an 207 00:11:17,040 --> 00:11:19,959 Speaker 5: easy line for them to criticize Biden, we haven't heard 208 00:11:20,000 --> 00:11:22,960 Speaker 5: a lot of forward looking discussion from them on how 209 00:11:23,000 --> 00:11:25,760 Speaker 5: they would actually handle the economy to make it work 210 00:11:25,760 --> 00:11:26,520 Speaker 5: for the middle. 211 00:11:26,240 --> 00:11:29,000 Speaker 3: Class right, which is something that is going to be 212 00:11:29,040 --> 00:11:32,480 Speaker 3: important for voters to hear as the campaign goes on. 213 00:11:32,640 --> 00:11:36,680 Speaker 3: Sean I know that you spoke with folks about their 214 00:11:36,800 --> 00:11:41,559 Speaker 3: varied views on Republicans versus Democrats and specifically where they 215 00:11:42,160 --> 00:11:45,960 Speaker 3: lie across those party lines, and it looks to me 216 00:11:46,280 --> 00:11:49,439 Speaker 3: like you're seeing even more of that bifurcation. Can you 217 00:11:49,480 --> 00:11:53,080 Speaker 3: talk to me about what the data told you about 218 00:11:53,200 --> 00:11:56,359 Speaker 3: sort of how the economic struggles that folks are experiencing 219 00:11:56,440 --> 00:11:59,800 Speaker 3: right now are are kind of leading to even more partisanship. 220 00:12:01,440 --> 00:12:04,760 Speaker 6: Sure, I mean there are definitely there is a partisanship 221 00:12:04,760 --> 00:12:07,720 Speaker 6: in America, and that applies to how you view the economy. 222 00:12:08,120 --> 00:12:11,040 Speaker 6: Republicans are much more sour on the state of the 223 00:12:11,080 --> 00:12:14,079 Speaker 6: economy than Democrats right now. But look, one of the 224 00:12:14,120 --> 00:12:16,880 Speaker 6: things that we're I think we need to track over 225 00:12:16,920 --> 00:12:21,560 Speaker 6: the next sixteen months is independence. Gallup has this tracking 226 00:12:21,640 --> 00:12:26,080 Speaker 6: pull of self identification of party identification, and for the 227 00:12:26,080 --> 00:12:30,839 Speaker 6: first time ever, almost half of Americans classify themselves as 228 00:12:30,960 --> 00:12:33,880 Speaker 6: independence in America. And that's something we really ran into 229 00:12:33,920 --> 00:12:35,920 Speaker 6: when we were out there talking to folks. There are 230 00:12:35,960 --> 00:12:38,960 Speaker 6: a lot of middle class independents who are kind of 231 00:12:39,000 --> 00:12:43,320 Speaker 6: reserving judgment right now, and a lot of what they're 232 00:12:43,360 --> 00:12:45,920 Speaker 6: telling us or what they were killing us in recent 233 00:12:45,960 --> 00:12:49,480 Speaker 6: weeks was that's going to depend on who the Republican 234 00:12:49,559 --> 00:12:55,679 Speaker 6: candidate is or third party candidates pop up in the 235 00:12:55,720 --> 00:12:57,920 Speaker 6: mix as well, So I think that's something to watch 236 00:12:58,240 --> 00:13:00,720 Speaker 6: politically as well. And then, of course all this is 237 00:13:00,760 --> 00:13:03,280 Speaker 6: going to be affected by where the economy goes. But 238 00:13:03,559 --> 00:13:06,800 Speaker 6: between now and November twenty twenty four, and this recession 239 00:13:06,880 --> 00:13:12,320 Speaker 6: that economists met, many economists still think is lying on 240 00:13:12,360 --> 00:13:18,400 Speaker 6: the horizon between or between now and then, right right, 241 00:13:18,440 --> 00:13:18,760 Speaker 6: I mean. 242 00:13:18,679 --> 00:13:21,760 Speaker 3: Our own Bloomberg Economics team puts chances of a recession 243 00:13:21,760 --> 00:13:25,000 Speaker 3: at eighty percent. That's better news than the one hundred 244 00:13:25,040 --> 00:13:28,120 Speaker 3: percent prediction that we previously had, but still still not 245 00:13:28,240 --> 00:13:31,280 Speaker 3: great odds. If you're running for president, Nancy, talk to 246 00:13:31,280 --> 00:13:34,160 Speaker 3: me about what President Biden has said recently about the 247 00:13:34,200 --> 00:13:36,960 Speaker 3: potential of the US avoiding that recession. 248 00:13:38,440 --> 00:13:41,640 Speaker 5: So Biden has a very sunny take on the fact 249 00:13:41,679 --> 00:13:44,120 Speaker 5: that there will not be a recession. I traveled with 250 00:13:44,200 --> 00:13:48,520 Speaker 5: him to Maryland to two fundraisers last week, and he 251 00:13:48,679 --> 00:13:52,280 Speaker 5: told donors at one of the fundraisers that you know, 252 00:13:52,320 --> 00:13:55,040 Speaker 5: economists have been saying for the past eleven months that 253 00:13:55,120 --> 00:13:57,199 Speaker 5: there's going to be a recession right around the corner. 254 00:13:58,120 --> 00:14:01,199 Speaker 5: His argument to the donors was it hasn't happened yet, 255 00:14:01,280 --> 00:14:03,520 Speaker 5: and that he and his White House do not think 256 00:14:03,559 --> 00:14:06,520 Speaker 5: it's going to happen. I you know, a lot of 257 00:14:06,559 --> 00:14:09,000 Speaker 5: economists I talked to seem to think that there is 258 00:14:09,040 --> 00:14:11,360 Speaker 5: still the possibility of a recession. It may not be 259 00:14:11,400 --> 00:14:13,840 Speaker 5: a very deep one, it might be a more mild one. 260 00:14:14,040 --> 00:14:16,560 Speaker 5: I think politically, the question is if there is a 261 00:14:16,600 --> 00:14:20,520 Speaker 5: recession in twenty twenty four, in which quarter does that come. 262 00:14:20,840 --> 00:14:22,800 Speaker 5: If it comes earlier in the year and there's a 263 00:14:22,880 --> 00:14:26,680 Speaker 5: quick recovery, that could be potentially politically much better for 264 00:14:26,760 --> 00:14:30,600 Speaker 5: Democrats than having a recession hit next summer or early 265 00:14:30,720 --> 00:14:33,720 Speaker 5: next fall, right when voters are really starting to clue 266 00:14:33,720 --> 00:14:36,360 Speaker 5: into the election and making decisions about who they're going. 267 00:14:36,320 --> 00:14:36,760 Speaker 8: To vote for. 268 00:14:37,040 --> 00:14:39,160 Speaker 3: All Right, Nancy, thank you so much. That was Nancy 269 00:14:39,200 --> 00:14:42,360 Speaker 3: Cook and Sean Donnan with Bloomberg News. Stick around for more. 270 00:14:42,520 --> 00:14:45,200 Speaker 3: This is sound On and this is Bloomberg. 271 00:14:46,640 --> 00:14:50,000 Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch the 272 00:14:50,040 --> 00:14:53,920 Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the 273 00:14:53,960 --> 00:14:57,320 Speaker 1: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 274 00:14:57,440 --> 00:15:00,320 Speaker 1: You can also listen live on Amazon Alexa from our 275 00:15:00,360 --> 00:15:04,400 Speaker 1: flagship New York Station. Just say Alexa play Bloomberg eleven. 276 00:15:07,040 --> 00:15:09,760 Speaker 3: H'm Madison Mills in for Joe Matthew here in DC 277 00:15:09,920 --> 00:15:12,560 Speaker 3: with Kelley lines a very very special occasion, both of 278 00:15:12,640 --> 00:15:16,040 Speaker 3: us being here in DC. Also lots of travel news 279 00:15:16,200 --> 00:15:18,800 Speaker 3: heading out of the weekend, including for Secretary of State 280 00:15:18,880 --> 00:15:22,000 Speaker 3: Jenna Yellen leaving for China today. The hope here is 281 00:15:22,040 --> 00:15:24,320 Speaker 3: that she's able to find some common ground when it 282 00:15:24,320 --> 00:15:27,440 Speaker 3: comes to opening up communication between the two and Kelley 283 00:15:27,520 --> 00:15:31,520 Speaker 3: of course figuring out hopefully some mutually beneficial economic policy 284 00:15:31,520 --> 00:15:32,440 Speaker 3: positions as well. 285 00:15:32,840 --> 00:15:35,680 Speaker 10: Yeah, we'll see if they really figure out anything tangible though, 286 00:15:35,720 --> 00:15:39,000 Speaker 10: because it seems like they've intentionally tried to set the 287 00:15:39,000 --> 00:15:42,000 Speaker 10: bar pretty low here, just like when we saw last 288 00:15:42,040 --> 00:15:44,360 Speaker 10: month when Secretary of State Anthony Blinkin made his own 289 00:15:44,360 --> 00:15:47,320 Speaker 10: trip to Beijing. Just the fact that they are talking, 290 00:15:47,760 --> 00:15:49,440 Speaker 10: they are trying to chalk up as a win here, 291 00:15:49,800 --> 00:15:53,240 Speaker 10: Just the idea that these meetings are happening in person, 292 00:15:53,520 --> 00:15:56,760 Speaker 10: that people are meeting face to face. That seems like 293 00:15:56,840 --> 00:15:59,600 Speaker 10: really all the administration is trying to accomplish. And yes, 294 00:15:59,640 --> 00:16:03,480 Speaker 10: issues will be raised, Yeah, issues like trade or like 295 00:16:03,640 --> 00:16:06,720 Speaker 10: debt forgiveness on the part of China being a large 296 00:16:06,720 --> 00:16:09,960 Speaker 10: creditor to some struggling countries that are in distress. I'm 297 00:16:10,000 --> 00:16:12,480 Speaker 10: sure the Treasury Secretary will raise those Does that mean 298 00:16:12,480 --> 00:16:13,880 Speaker 10: that we're gonna get any real news? 299 00:16:14,320 --> 00:16:14,480 Speaker 7: Right? 300 00:16:14,640 --> 00:16:17,080 Speaker 3: I don't know, right, I mean, that's the question. It 301 00:16:17,080 --> 00:16:20,280 Speaker 3: feels like they're setting the expectations low in hopes of 302 00:16:20,320 --> 00:16:22,360 Speaker 3: coming in a little bit higher. So we're going to 303 00:16:22,400 --> 00:16:24,680 Speaker 3: discuss some of the news we might be getting out 304 00:16:24,680 --> 00:16:27,160 Speaker 3: of this trip with our next guest. We've got Hans 305 00:16:27,200 --> 00:16:30,920 Speaker 3: Dow here. He's CEO of the Mitchell Madison Group. Great 306 00:16:30,960 --> 00:16:33,160 Speaker 3: to speak with you, Hans, and thanks for coming on 307 00:16:33,280 --> 00:16:36,560 Speaker 3: to talk about this trip. Previously, As Kaylee was saying, 308 00:16:36,640 --> 00:16:38,840 Speaker 3: Yellen has kind of kept the bar really low for 309 00:16:38,920 --> 00:16:41,240 Speaker 3: this trip. It's saying it's, you know, just a meeting 310 00:16:41,280 --> 00:16:44,880 Speaker 3: and opening communication. Can we expect any bigger news to 311 00:16:44,920 --> 00:16:45,440 Speaker 3: come out of this? 312 00:16:46,720 --> 00:16:48,600 Speaker 7: Well, thank you for having me. I don't think so. 313 00:16:48,920 --> 00:16:52,320 Speaker 7: I would be quite pessimistic around that meeting. It's obviously 314 00:16:52,320 --> 00:16:55,320 Speaker 7: a good thing that politicians are meeting, and that's good 315 00:16:55,320 --> 00:16:58,040 Speaker 7: to keep lines and comunication open. But I think the 316 00:16:58,200 --> 00:17:01,760 Speaker 7: underlying background with China is that China has a massive 317 00:17:01,800 --> 00:17:05,040 Speaker 7: pr problem in the US. You have everything from you know, 318 00:17:05,119 --> 00:17:11,240 Speaker 7: Taiwan tensions, Ai Chip sanctions, balloons, spy stations, scandals. You're 319 00:17:11,240 --> 00:17:13,639 Speaker 7: now in a situation where if you look at the 320 00:17:13,640 --> 00:17:16,960 Speaker 7: Pew research that eighty two percent of the use population 321 00:17:17,000 --> 00:17:20,840 Speaker 7: has the negative view of China. That's actually ten points 322 00:17:20,880 --> 00:17:24,080 Speaker 7: worse than the depth of COVID and versus you know, 323 00:17:24,200 --> 00:17:26,880 Speaker 7: neutral before COVID. I think it's a very very difficult 324 00:17:26,880 --> 00:17:31,560 Speaker 7: situation and policy makers listen to voters, and voters view 325 00:17:31,680 --> 00:17:33,520 Speaker 7: China as very negative. 326 00:17:34,119 --> 00:17:36,960 Speaker 10: Well as we talk about the policy. We of course 327 00:17:37,000 --> 00:17:40,679 Speaker 10: had Treasury Secretary Yellen earlier this spring outlining you know, 328 00:17:40,800 --> 00:17:43,439 Speaker 10: kind of her broad overview of what her policy are 329 00:17:43,520 --> 00:17:45,920 Speaker 10: thinking is when it comes to the relationship with China. 330 00:17:45,960 --> 00:17:48,960 Speaker 10: Back in April, she was speaking at the Johns Hopkins 331 00:17:48,960 --> 00:17:52,000 Speaker 10: School of Advanced International Studies here in Washington, d C. 332 00:17:52,200 --> 00:17:55,640 Speaker 10: Saying she's seeking a constructive relationship. Just take a listen 333 00:17:55,640 --> 00:17:56,399 Speaker 10: to the Secretary. 334 00:17:56,680 --> 00:18:02,000 Speaker 8: We seek a constructive and fair economic relationship with China. 335 00:18:02,240 --> 00:18:06,360 Speaker 8: Both countries need to be able to frankly discuss difficult issues, 336 00:18:07,080 --> 00:18:10,960 Speaker 8: and we should work together when possible for the benefit 337 00:18:11,160 --> 00:18:12,959 Speaker 8: of art countries and the world. 338 00:18:13,880 --> 00:18:17,239 Speaker 10: So she wants it to be constructive and fair. She 339 00:18:17,320 --> 00:18:20,400 Speaker 10: also has pushed back on the idea of a decoupling 340 00:18:20,840 --> 00:18:24,080 Speaker 10: between the US and China, basically saying that she wants 341 00:18:24,119 --> 00:18:27,040 Speaker 10: to protect US national security and economic interests while not 342 00:18:27,080 --> 00:18:32,880 Speaker 10: necessarily putting China back economically either. Is there de risking 343 00:18:33,200 --> 00:18:38,000 Speaker 10: when it comes to China without decoupling, Well. 344 00:18:37,840 --> 00:18:40,960 Speaker 7: I think from a policy perspective, that's certainly trying that right. 345 00:18:41,000 --> 00:18:44,080 Speaker 7: I mean, China today just hit back in terms of 346 00:18:44,160 --> 00:18:49,120 Speaker 7: sanctions with some rare earth minerals. So you probably saw 347 00:18:49,119 --> 00:18:52,679 Speaker 7: that for chip manufacturing, gallium, domanium trade restrictions, and I 348 00:18:52,720 --> 00:18:57,000 Speaker 7: did mention decoupling specifically. I think a lot of this 349 00:18:57,040 --> 00:18:59,720 Speaker 7: stuff you have to look at the private sector maybe 350 00:19:00,240 --> 00:19:03,440 Speaker 7: more carefully than what's going on with the big headlines. Right. 351 00:19:03,800 --> 00:19:05,879 Speaker 7: So on the private sector side, which is you know 352 00:19:05,880 --> 00:19:08,640 Speaker 7: what my business is to advise people in supply chain issues, 353 00:19:08,880 --> 00:19:14,800 Speaker 7: private sector companies, what's been happening is that people are decoupling, right, 354 00:19:14,840 --> 00:19:18,879 Speaker 7: They're diversifying. So a couple of interesting statistics. Mexican imports 355 00:19:18,880 --> 00:19:21,760 Speaker 7: to the US set of record in the last reporting period. 356 00:19:22,119 --> 00:19:25,439 Speaker 7: At the same time, non China, low cost Asian countries 357 00:19:25,480 --> 00:19:27,920 Speaker 7: are projected to be more than fifty percent of US 358 00:19:28,000 --> 00:19:31,879 Speaker 7: imports very soon, right you had Moti visiting in DC. 359 00:19:32,280 --> 00:19:34,000 Speaker 7: So there's a lot of things going on that have 360 00:19:34,080 --> 00:19:39,200 Speaker 7: to do with, you know, planning for a de facto decoupling. 361 00:19:39,880 --> 00:19:42,000 Speaker 7: Talk at the top level, of course, but I think 362 00:19:42,000 --> 00:19:44,080 Speaker 7: the private sector is already acting. 363 00:19:45,200 --> 00:19:48,800 Speaker 3: I want to stick with you on this because we've 364 00:19:48,840 --> 00:19:50,919 Speaker 3: had guests before that have described it as you know, 365 00:19:51,000 --> 00:19:53,400 Speaker 3: the US gives you a slap on the wrist when 366 00:19:53,400 --> 00:19:55,359 Speaker 3: you go to them, whereas if you go to China, 367 00:19:55,480 --> 00:19:58,040 Speaker 3: you get the red carpet rolled out for you. To 368 00:19:58,080 --> 00:20:00,840 Speaker 3: what extent are you thinking that country some of those 369 00:20:00,840 --> 00:20:04,720 Speaker 3: emerging markets that you mentioned, like in India are still 370 00:20:05,080 --> 00:20:09,840 Speaker 3: sort of swayed by China trying to make themselves more accessible, 371 00:20:09,880 --> 00:20:15,120 Speaker 3: paint themselves as a more accessible alternative to the US. 372 00:20:15,400 --> 00:20:19,000 Speaker 7: I think I think that is Look, China will be competitive, 373 00:20:19,119 --> 00:20:22,320 Speaker 7: it's an It's obviously a very large country, emerging power. 374 00:20:22,640 --> 00:20:25,240 Speaker 7: They want to be you know what we are currently 375 00:20:25,880 --> 00:20:28,879 Speaker 7: and that that could all happen right there, certainly going 376 00:20:28,920 --> 00:20:31,399 Speaker 7: to make progress. I think the the other I'm a 377 00:20:31,440 --> 00:20:34,639 Speaker 7: little bit septical just because the demographics of China are 378 00:20:34,680 --> 00:20:37,560 Speaker 7: also going the wrong direction. You look at China in 379 00:20:37,640 --> 00:20:40,520 Speaker 7: terms of the economic economy, it's quite weak. Now we're 380 00:20:40,560 --> 00:20:45,040 Speaker 7: talking about you know, COVID baseline adjusted three percent growth, 381 00:20:45,040 --> 00:20:47,359 Speaker 7: which is a much more normal country. That's not China. 382 00:20:47,840 --> 00:20:48,040 Speaker 1: Right. 383 00:20:48,080 --> 00:20:51,480 Speaker 7: They're going to get hit with weakening industrial output due 384 00:20:51,480 --> 00:20:56,000 Speaker 7: to Western recessionary demand slow down. There's a bunch of 385 00:20:56,080 --> 00:21:00,280 Speaker 7: issues around youth, unemployment, their property are down. It's not 386 00:21:00,320 --> 00:21:02,679 Speaker 7: looking good for them. And at the same time, the 387 00:21:02,720 --> 00:21:08,760 Speaker 7: big underlying trend is collapsing demographics. Right, China is twenty 388 00:21:08,760 --> 00:21:11,760 Speaker 7: three percent of the global workforce today, but they're projected 389 00:21:11,800 --> 00:21:14,639 Speaker 7: to be only eighteen percent by twenty fifty. That is 390 00:21:14,680 --> 00:21:18,280 Speaker 7: an enormous change. So I think it's the more I 391 00:21:18,320 --> 00:21:20,960 Speaker 7: think about, is it still of rings a little bit? 392 00:21:21,200 --> 00:21:23,640 Speaker 7: It reminds you of Japan, you know, in the nineties. 393 00:21:23,680 --> 00:21:26,120 Speaker 7: I mean, maybe it won't be as bad, but there's 394 00:21:26,160 --> 00:21:29,760 Speaker 7: a lot of similarities. I'm not particularly bullish on China, 395 00:21:29,800 --> 00:21:31,280 Speaker 7: and I would, you know, I would if I was 396 00:21:31,280 --> 00:21:34,960 Speaker 7: the developing nation, I would not necessarily align with China 397 00:21:35,040 --> 00:21:36,200 Speaker 7: over the West. 398 00:21:36,520 --> 00:21:39,560 Speaker 10: So as you're talking about how the economy is a 399 00:21:39,560 --> 00:21:43,040 Speaker 10: little bit softer than anticipated, they're dealing with some demographic 400 00:21:43,119 --> 00:21:45,880 Speaker 10: headwinds as well. Is this another way of saying that 401 00:21:45,920 --> 00:21:48,080 Speaker 10: when it comes to not just the talks with Jenny Yellen, 402 00:21:48,119 --> 00:21:51,479 Speaker 10: but frankly just any dialogue between the US and China 403 00:21:51,520 --> 00:21:54,320 Speaker 10: in terms of positioning, that China is coming to it 404 00:21:54,720 --> 00:21:58,639 Speaker 10: more from a position of weakness than of strength, I 405 00:21:58,640 --> 00:21:59,480 Speaker 10: think increasingly. 406 00:21:59,600 --> 00:22:01,800 Speaker 7: So I would think that they also have, you know, 407 00:22:02,040 --> 00:22:05,520 Speaker 7: many more domestic problems. You know, if if they don't 408 00:22:05,560 --> 00:22:07,879 Speaker 7: deliver on growth targets, their population is going to be 409 00:22:07,960 --> 00:22:11,480 Speaker 7: very unhappy with very you know, potentially very bad outcomes 410 00:22:11,480 --> 00:22:15,600 Speaker 7: for leadership. So I think that's that's what I really 411 00:22:15,600 --> 00:22:20,159 Speaker 7: feel that that China has is overplaying their cards a 412 00:22:20,160 --> 00:22:23,960 Speaker 7: little bit right now. They're they're hitting back on those sanctions, 413 00:22:24,000 --> 00:22:26,479 Speaker 7: and there's just a lot of things that the US 414 00:22:26,480 --> 00:22:29,600 Speaker 7: and the West has in terms of intellectual property, especially 415 00:22:29,640 --> 00:22:32,840 Speaker 7: on the AI side. Uh, you know the chips you 416 00:22:32,880 --> 00:22:36,679 Speaker 7: saw today the administration hit back on restricting access to 417 00:22:37,000 --> 00:22:40,000 Speaker 7: cloud services that use these in video chips. So I 418 00:22:40,040 --> 00:22:43,440 Speaker 7: think they're quite vulnerable on some of these high end technologies. 419 00:22:43,880 --> 00:22:46,280 Speaker 10: So could the US be capitalizing more on that than 420 00:22:46,320 --> 00:22:46,800 Speaker 10: it is on. 421 00:22:48,600 --> 00:22:50,639 Speaker 7: I mean, they could the questions should you, right, I mean, 422 00:22:50,640 --> 00:22:53,199 Speaker 7: you always have to take into account that is a 423 00:22:53,240 --> 00:22:56,160 Speaker 7: tremendous military power, so that those those types of things 424 00:22:56,520 --> 00:22:59,640 Speaker 7: have to you know, play into into into the equation. 425 00:23:00,119 --> 00:23:02,080 Speaker 7: And I think the administration is playing it right that 426 00:23:02,119 --> 00:23:04,639 Speaker 7: they have to they have to be cautious, they have 427 00:23:04,680 --> 00:23:07,960 Speaker 7: to keep blends of communications open, uh and and but 428 00:23:08,119 --> 00:23:10,920 Speaker 7: at the same time protect the American and Western interests. 429 00:23:11,600 --> 00:23:13,720 Speaker 3: So in our final minute with you, Hans, what is 430 00:23:14,000 --> 00:23:17,320 Speaker 3: one thing that you think is reasonable for us to 431 00:23:17,359 --> 00:23:19,080 Speaker 3: anticipate coming out of this trip. 432 00:23:21,440 --> 00:23:24,920 Speaker 7: I I think what you said before is probably true. 433 00:23:25,000 --> 00:23:27,320 Speaker 7: Expectations will be low. I think there will be not 434 00:23:27,520 --> 00:23:30,680 Speaker 7: a whole lot of concrete stuff. Yellen has also on 435 00:23:30,680 --> 00:23:35,000 Speaker 7: on on record for saying that she that the administration 436 00:23:35,080 --> 00:23:39,119 Speaker 7: is ready to accept economic costs in exchange for national security. 437 00:23:39,200 --> 00:23:39,360 Speaker 2: Right. 438 00:23:39,560 --> 00:23:41,880 Speaker 7: She said that too, So I think there's a lot 439 00:23:41,920 --> 00:23:45,800 Speaker 7: of I would have low expectations that will keep talking. 440 00:23:46,240 --> 00:23:50,960 Speaker 7: I think some of these you know, trade spats right 441 00:23:50,960 --> 00:23:53,520 Speaker 7: now could be eased. There might be some agreement around, 442 00:23:53,960 --> 00:23:56,280 Speaker 7: you know, easing some restrictions. But I think the long 443 00:23:56,359 --> 00:24:01,200 Speaker 7: term trend is really towards a private sector driven and devisking, 444 00:24:01,400 --> 00:24:05,720 Speaker 7: not total decoupling, but devisking of China and isolating them 445 00:24:05,760 --> 00:24:09,439 Speaker 7: and limiting the ability to access Western technology at the 446 00:24:09,520 --> 00:24:10,120 Speaker 7: very high end. 447 00:24:10,320 --> 00:24:12,919 Speaker 3: Yeah, all right, Hans, thank you so much for joining us. 448 00:24:12,960 --> 00:24:15,760 Speaker 3: That was Hans Dow, CEO of the Mitchell Madison Group. 449 00:24:15,800 --> 00:24:18,960 Speaker 3: Really appreciate you joining us here on sound On. 450 00:24:20,080 --> 00:24:23,560 Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch us 451 00:24:23,600 --> 00:24:25,680 Speaker 1: live weekdays at one Eastern. 452 00:24:25,359 --> 00:24:28,520 Speaker 2: On Bloomberg dot com, the iHeartRadio app and the Bloomberg 453 00:24:28,560 --> 00:24:32,119 Speaker 2: Business app, or listening on demand wherever you get your podcasts. 454 00:24:33,840 --> 00:24:36,159 Speaker 3: Him Addison Mills in for Joe Matthew today here with 455 00:24:36,280 --> 00:24:40,679 Speaker 3: Kaylee lines, the Biden administration has to limit contact with 456 00:24:41,000 --> 00:24:44,280 Speaker 3: social media companies. That is an order from a federal 457 00:24:44,359 --> 00:24:46,879 Speaker 3: judge in Louisiana and Kayley, the focus here is on 458 00:24:46,920 --> 00:24:51,080 Speaker 3: officials not reaching out two platforms, specifically with the goal 459 00:24:51,119 --> 00:24:54,639 Speaker 3: of suppressing speakers and viewpoints that they disagree with. 460 00:24:54,720 --> 00:24:57,480 Speaker 10: Here, Yeah, of course, this is something that you often 461 00:24:57,560 --> 00:25:00,919 Speaker 10: hear on a certain side of American politics, that conservative 462 00:25:01,000 --> 00:25:05,840 Speaker 10: voices are silenced on social media. So essentially, what this judge, 463 00:25:05,840 --> 00:25:09,439 Speaker 10: who is a Trump appointee, we should point out, ruled 464 00:25:09,520 --> 00:25:12,760 Speaker 10: is that certain parts of the government, so think the 465 00:25:12,760 --> 00:25:16,159 Speaker 10: Department of Health and Human Services, the FBI, cannot be 466 00:25:16,280 --> 00:25:19,600 Speaker 10: in communication with these social media companies for the purpose 467 00:25:19,680 --> 00:25:25,240 Speaker 10: of urging or encouraging them to contain protected free speech. 468 00:25:25,320 --> 00:25:27,600 Speaker 10: So ultimately this kind of comes down to a First 469 00:25:27,600 --> 00:25:28,560 Speaker 10: Amendment issue. 470 00:25:29,359 --> 00:25:31,440 Speaker 3: It absolutely does. It's one of those stories that has 471 00:25:31,480 --> 00:25:34,960 Speaker 3: it all right, free speech, First Amendment, misinformation, so much 472 00:25:34,960 --> 00:25:38,000 Speaker 3: of it that's become so important in our social media 473 00:25:38,880 --> 00:25:41,000 Speaker 3: world that we're all living in here, So let's get 474 00:25:41,080 --> 00:25:42,840 Speaker 3: right to it. We've got Sarah Fordern on the line, 475 00:25:42,880 --> 00:25:46,760 Speaker 3: Bloomberg News team leader. Sarah, Thanks so much for hopping 476 00:25:46,800 --> 00:25:50,320 Speaker 3: on here with us. Talk to me about the legalities 477 00:25:50,359 --> 00:25:53,320 Speaker 3: of this case because you're leading our legal team here 478 00:25:53,359 --> 00:25:56,159 Speaker 3: at Bloomberg. Where does the case stand right now and 479 00:25:56,200 --> 00:25:57,200 Speaker 3: what are the next steps? 480 00:25:58,000 --> 00:26:00,879 Speaker 11: Yes, Hi, thanks for having me. Absolutely we summed it 481 00:26:00,960 --> 00:26:05,159 Speaker 11: up perfectly. This is a case which is remarkable in 482 00:26:05,200 --> 00:26:07,440 Speaker 11: the sense that it is the first time we've seen 483 00:26:07,680 --> 00:26:11,919 Speaker 11: a judge actually order the government not to speak to 484 00:26:12,000 --> 00:26:16,000 Speaker 11: social media companies about certain kinds of content or have 485 00:26:16,119 --> 00:26:19,159 Speaker 11: meetings with them. At the same time, it's bringing the 486 00:26:19,200 --> 00:26:22,040 Speaker 11: whole debate which has been building for several years now 487 00:26:22,080 --> 00:26:25,919 Speaker 11: over how to moderate social media content. It's bringing it 488 00:26:26,000 --> 00:26:28,280 Speaker 11: right to the First Amendment issues, so you're adding a 489 00:26:28,320 --> 00:26:31,480 Speaker 11: whole sort of stream of issues around you know, what 490 00:26:31,600 --> 00:26:34,719 Speaker 11: is free speech, and of course, you know the law 491 00:26:34,760 --> 00:26:37,520 Speaker 11: of Ireland is that the government cannot impinge in anyway 492 00:26:37,960 --> 00:26:42,240 Speaker 11: on free speech. So we have been ruling from Judge 493 00:26:42,240 --> 00:26:46,640 Speaker 11: Doty in Louisiana that is standing in the fact there 494 00:26:46,720 --> 00:26:50,720 Speaker 11: was no delay in it going into effect, and it 495 00:26:50,760 --> 00:26:54,639 Speaker 11: would prevent the Biden administration from contacting social media companies 496 00:26:55,440 --> 00:26:59,720 Speaker 11: about the issues which they perceive as you First Amendment issues, 497 00:27:00,000 --> 00:27:02,359 Speaker 11: But at the same time, it doesn't prevent them from 498 00:27:02,680 --> 00:27:05,280 Speaker 11: talking to companies about any content that has to do 499 00:27:05,320 --> 00:27:11,159 Speaker 11: with criminality, with national security issues, or public safety issues. 500 00:27:11,240 --> 00:27:15,760 Speaker 11: So there are a few exceptions to this ruling. We 501 00:27:15,880 --> 00:27:20,119 Speaker 11: are expecting the Justice Department to appeal this ruling. So 502 00:27:20,240 --> 00:27:23,119 Speaker 11: far they have just told us they're parsing the decision 503 00:27:23,359 --> 00:27:27,120 Speaker 11: and evaluating their options, so we think that could come 504 00:27:27,200 --> 00:27:30,960 Speaker 11: in the coming days, and we're also watching This could 505 00:27:31,080 --> 00:27:33,640 Speaker 11: actually put the case on a very fast track right 506 00:27:33,720 --> 00:27:37,600 Speaker 11: back to the Supreme Court, which earlier this year punted 507 00:27:37,720 --> 00:27:40,679 Speaker 11: on two social media cases and kind of kick the 508 00:27:40,720 --> 00:27:43,680 Speaker 11: can down the road and really kind of decline to 509 00:27:43,760 --> 00:27:46,840 Speaker 11: weigh in in a major way on these issues of 510 00:27:46,920 --> 00:27:48,600 Speaker 11: free speech and content moderation. 511 00:27:49,359 --> 00:27:52,119 Speaker 10: So if it could Sarah ultimately make its way all 512 00:27:52,160 --> 00:27:55,160 Speaker 10: the way up to the highest court in the United States, 513 00:27:55,240 --> 00:27:58,400 Speaker 10: what about that timeline, Because when we're having these conversations 514 00:27:58,440 --> 00:28:01,359 Speaker 10: around misinformation and the ability of the US government to 515 00:28:01,400 --> 00:28:04,560 Speaker 10: have a hand in controlling or containing it, I mean, 516 00:28:04,560 --> 00:28:06,840 Speaker 10: we're heading into an election year. Is this something we're 517 00:28:06,920 --> 00:28:10,720 Speaker 10: likely to see resolved before we actually have people heading 518 00:28:10,720 --> 00:28:11,560 Speaker 10: into voting booths. 519 00:28:12,720 --> 00:28:16,000 Speaker 11: Well, there's several tracks here, and the Supreme Court has 520 00:28:16,040 --> 00:28:19,600 Speaker 11: already said it will take up a different social media 521 00:28:19,680 --> 00:28:24,560 Speaker 11: case in the fall term starts in October. But there's 522 00:28:24,600 --> 00:28:27,639 Speaker 11: something that's known as the shadow docket. So let me 523 00:28:27,720 --> 00:28:30,680 Speaker 11: play spill it out for you. If the Biden administration 524 00:28:31,320 --> 00:28:35,320 Speaker 11: ask for an appeal and then ask for court to 525 00:28:35,520 --> 00:28:39,240 Speaker 11: stay this ruling, which would prevent them from talking to 526 00:28:39,280 --> 00:28:42,640 Speaker 11: social media companies, that could quickly ump shoot onto the 527 00:28:42,680 --> 00:28:45,480 Speaker 11: Supreme Court shadow doct where they would be called into 528 00:28:45,480 --> 00:28:50,160 Speaker 11: our way in immediately on this, well before the October 529 00:28:50,240 --> 00:28:50,960 Speaker 11: term starts. 530 00:28:52,080 --> 00:28:54,840 Speaker 3: So I'm curious when it comes to the Scotis decision 531 00:28:55,400 --> 00:28:59,400 Speaker 3: and implications here, what the definition of free speech might 532 00:28:59,480 --> 00:29:02,360 Speaker 3: start to look like, particularly coming off of the Supreme 533 00:29:02,360 --> 00:29:06,040 Speaker 3: Court decision on that Christian graphic artist, the Supreme Court 534 00:29:06,120 --> 00:29:08,920 Speaker 3: saying that artists can refuse to make wedding websites for 535 00:29:09,080 --> 00:29:12,720 Speaker 3: gay couples. Pointing to free speech came up a lot 536 00:29:12,760 --> 00:29:15,400 Speaker 3: of course during that. Can you talk to me about 537 00:29:15,480 --> 00:29:18,720 Speaker 3: the similarities or more likely the differences between a case 538 00:29:18,800 --> 00:29:20,000 Speaker 3: like that and this one? 539 00:29:20,640 --> 00:29:23,600 Speaker 11: Yeah? Sure, I mean the you know, the law of 540 00:29:23,640 --> 00:29:27,640 Speaker 11: the Lens has really stood for being allowing free speech 541 00:29:27,720 --> 00:29:32,800 Speaker 11: even when it's divisive or potential problematic. Of course, that 542 00:29:33,000 --> 00:29:36,200 Speaker 11: runs right into the issue of you know, what is 543 00:29:36,400 --> 00:29:40,400 Speaker 11: what do you consider a public forum? Are these platforms 544 00:29:40,440 --> 00:29:44,320 Speaker 11: like Twitter and Facebook and Google consider public forums? And 545 00:29:44,880 --> 00:29:47,719 Speaker 11: where does the whole sort of public safety issue come in, 546 00:29:47,800 --> 00:29:51,440 Speaker 11: where you know, it's not legal to yell fire in 547 00:29:51,480 --> 00:29:55,160 Speaker 11: a crowded movie theater. So these are the kinds of 548 00:29:55,440 --> 00:29:58,840 Speaker 11: issues that that, you know, our court system is being 549 00:29:58,880 --> 00:30:01,640 Speaker 11: called on to part. And where do the lines fall there? 550 00:30:02,360 --> 00:30:02,640 Speaker 9: Yeah? 551 00:30:02,640 --> 00:30:05,120 Speaker 3: Well, and the safety issue you bring up is something 552 00:30:05,120 --> 00:30:08,120 Speaker 3: that President Biden talked about recently. When it comes to this, 553 00:30:08,200 --> 00:30:09,440 Speaker 3: take a listen to what he had to say. 554 00:30:10,080 --> 00:30:11,080 Speaker 7: We're killing people. 555 00:30:12,440 --> 00:30:14,640 Speaker 1: I mean it really they don't look the. 556 00:30:14,680 --> 00:30:17,960 Speaker 4: Only pandemic we have is among the un vaccine area 557 00:30:18,280 --> 00:30:20,000 Speaker 4: and they're killing people. 558 00:30:20,960 --> 00:30:23,280 Speaker 3: Okay, So to give some context on that, that's President 559 00:30:23,280 --> 00:30:27,520 Speaker 3: Biden talking specifically about the impact that social media platforms 560 00:30:27,520 --> 00:30:31,520 Speaker 3: have when it comes to misinformation impacting vaccine uptake. And 561 00:30:31,560 --> 00:30:34,680 Speaker 3: our final minute here with you, Sarah, does that argument 562 00:30:34,800 --> 00:30:39,600 Speaker 3: stand when it comes to safety and free speech and 563 00:30:40,120 --> 00:30:43,680 Speaker 3: White House officials reaching out to social platforms to suppress 564 00:30:43,720 --> 00:30:45,640 Speaker 3: speech in an effort of that safety. 565 00:30:46,440 --> 00:30:49,160 Speaker 11: Well, again, this is exactly where the lines are being drawn, 566 00:30:49,280 --> 00:30:51,920 Speaker 11: and the Biden administration has said it was doing nothing 567 00:30:51,960 --> 00:30:55,760 Speaker 11: more than trying to protect people. Take you know, ask 568 00:30:55,800 --> 00:30:58,360 Speaker 11: the social media companies to take down information that was 569 00:30:58,440 --> 00:31:02,680 Speaker 11: hurting people on the other side, the conservative viewpoints field. 570 00:31:02,720 --> 00:31:05,479 Speaker 11: This is the kind of information that is you know, 571 00:31:05,560 --> 00:31:07,720 Speaker 11: if this kind of information is being taken down and 572 00:31:07,800 --> 00:31:12,800 Speaker 11: that sensor is effectively conservative views. So it's there's a 573 00:31:12,840 --> 00:31:15,760 Speaker 11: real standoff for this issue in this country right now. 574 00:31:17,280 --> 00:31:20,080 Speaker 10: And Sarah, finally, just as we talk about the standoff 575 00:31:20,120 --> 00:31:24,720 Speaker 10: over this issue, it seems like it's ultimately social media 576 00:31:24,920 --> 00:31:28,040 Speaker 10: moderation is going to come down to the courts, to 577 00:31:28,120 --> 00:31:30,120 Speaker 10: the justice system. That that's how all of this is 578 00:31:30,160 --> 00:31:33,720 Speaker 10: going to be decided. Our judicial system is perhaps a 579 00:31:33,760 --> 00:31:35,840 Speaker 10: better Until now. 580 00:31:35,960 --> 00:31:39,280 Speaker 11: We've been looking at a measure called Section two thirty 581 00:31:39,320 --> 00:31:42,960 Speaker 11: of the Communications Decency Act, which protects social media companies 582 00:31:43,040 --> 00:31:45,959 Speaker 11: for both content that they leave up and content that 583 00:31:46,000 --> 00:31:48,440 Speaker 11: they take down. And the debate up until now has 584 00:31:48,480 --> 00:31:51,920 Speaker 11: been do we reform Section two thirty and the absence 585 00:31:51,960 --> 00:31:56,880 Speaker 11: of any congressional action or momentum on these questions, the 586 00:31:57,440 --> 00:32:00,719 Speaker 11: issues are spilling right into our court system. 587 00:32:00,760 --> 00:32:02,440 Speaker 3: All right, Sarah, Well, we're going to have to leave 588 00:32:02,480 --> 00:32:04,240 Speaker 3: it there, but thank you so much for making time 589 00:32:04,240 --> 00:32:07,600 Speaker 3: with us. That was Sarah Forden, Bloomberg News legal team leader, 590 00:32:07,640 --> 00:32:10,440 Speaker 3: talking with us about this news. The Biden administration ordered 591 00:32:10,440 --> 00:32:14,520 Speaker 3: to limit contact with social media platforms, specifically in an 592 00:32:14,520 --> 00:32:18,760 Speaker 3: effort to suppress the content that comes up on those platforms. 593 00:32:18,760 --> 00:32:20,840 Speaker 3: This is going to be a really important issue, Kayley, 594 00:32:20,880 --> 00:32:23,320 Speaker 3: for us to cover as we are officially sixteen months 595 00:32:23,320 --> 00:32:24,960 Speaker 3: out from election day. 596 00:32:25,160 --> 00:32:28,080 Speaker 10: Who's counting though I feel like you're counting, because I'm 597 00:32:28,120 --> 00:32:28,760 Speaker 10: definitely counting. 598 00:32:28,800 --> 00:32:30,920 Speaker 3: Your life gets to start again getting a little sweaty 599 00:32:30,960 --> 00:32:33,720 Speaker 3: thinking about sixteen months from now. This is sound On 600 00:32:33,880 --> 00:32:34,800 Speaker 3: and this is Bloomberg. 601 00:32:37,520 --> 00:32:39,400 Speaker 1: Thanks for listening to the Sound On podcast. 602 00:32:39,520 --> 00:32:42,600 Speaker 7: Make sure to subscribe if you haven't already, at Apple, Spotify, 603 00:32:42,680 --> 00:32:45,120 Speaker 7: and anywhere else you get your podcasts, and you can 604 00:32:45,120 --> 00:32:48,160 Speaker 7: find us live every weekday from Washington, DC at one 605 00:32:48,200 --> 00:32:52,720 Speaker 2: Pm Eastern Time at Bloomberg dot com