WEBVTT - Where's the Infrastructure Money, Goolsbee Asks 0:00:06.320 --> 0:00:12.960 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. 0:00:13.480 --> 0:00:17.560 Daily we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:33.680 Bloomberg dot Com, and of course, on the Bloomberg. We 0:00:33.800 --> 0:00:36.280 begin bloom Bag Surveillance with the President's State of the 0:00:36.360 --> 0:00:39.800 Union address, where Donald Trump sought to connect his presidency 0:00:40.080 --> 0:00:44.800 to the nation's prosperity. The state of our Union is 0:00:44.880 --> 0:00:49.760 strong because our people are strong. This, in fact, is 0:00:49.880 --> 0:00:54.200 our new American moment. There has never been a better 0:00:54.280 --> 0:00:58.760 time to start living the American dream. America has also 0:00:58.960 --> 0:01:03.360 finally turned the age on decades of unfair trade deals 0:01:03.400 --> 0:01:09.360 that sacrificed our prosperity and shipped away our companies, our jobs, 0:01:09.920 --> 0:01:16.040 and our wealth. Under the current broken system, a single 0:01:16.120 --> 0:01:22.160 immigrant can bring in virtually unlimited numbers of distant relatives. 0:01:22.880 --> 0:01:28.400 Under our plan, we focus on the immediate family by 0:01:28.480 --> 0:01:33.320 limiting sponsorships, two spouses and minor children. I am extending 0:01:33.319 --> 0:01:36.760 an open hand to work with members of both parties, 0:01:37.120 --> 0:01:44.440 Democrats and Republicans to protect our citizens of every background, color, religion, 0:01:44.600 --> 0:01:48.320 and creed. That was the President of the United States 0:01:48.320 --> 0:01:50.760 Donald Trump in its first State of the Unit address, 0:01:50.760 --> 0:01:52.360 and I get to say good morning to Tom Kane 0:01:52.400 --> 0:01:54.520 for what it's been like. What tomp over a week, 0:01:54.560 --> 0:01:56.760 two weeks since you and I've been together. Yeah, we 0:01:56.880 --> 0:01:59.280 missed an he throw by twenty minutes, we actually did. 0:01:59.320 --> 0:02:01.160 You were going to a work. That's right. That was 0:02:01.200 --> 0:02:03.800 an interesting um So I really like that string of 0:02:03.880 --> 0:02:07.080 highlights from the speech. We can talk later about the 0:02:07.160 --> 0:02:10.160 one one paragraph that alluded to maybe the Department of 0:02:10.240 --> 0:02:13.320 Justice in the uproar over Mr Mueller. But away from that, 0:02:13.400 --> 0:02:16.280 the clear consensus John I got from experts this morning 0:02:16.720 --> 0:02:19.680 was there was very little policy within the speech that 0:02:19.760 --> 0:02:22.880 they've I don't want to say they've run out of ideas, 0:02:23.560 --> 0:02:26.040 but usually in a modern State of the Union speech 0:02:26.120 --> 0:02:30.040 there's idea one, idea too, the idea three. I didn't 0:02:30.040 --> 0:02:33.079 hear that last night. There were themes without policy specifics. 0:02:33.120 --> 0:02:35.040 You can pick up on trade, he talked about the 0:02:35.040 --> 0:02:37.200 theft of intellectual property and now follow up on the 0:02:37.200 --> 0:02:40.000 policy specifics. A lot of talk about infrastructure. Over the 0:02:40.080 --> 0:02:42.240 last couple of weeks time we heard that again, this 0:02:42.320 --> 0:02:45.120 idea of we can do something in fact to lou Aller, 0:02:45.120 --> 0:02:48.360 an Apra of Blimberg, did this great highlight reel of 0:02:48.520 --> 0:02:50.760 of the amount of times they mentioned we, more than 0:02:50.800 --> 0:02:53.959 a hundred times. The President mentioned we just thirty times 0:02:53.960 --> 0:02:57.800 he mentioned I can we can that get things done? No, 0:02:57.919 --> 0:03:00.639 I think it's very stylistic and and all that has 0:03:00.720 --> 0:03:04.000 become a a moment for us. But but there it 0:03:04.120 --> 0:03:08.320 is joining us this morning. Martin Feldstine Baker, Professor Harvard, 0:03:08.400 --> 0:03:11.440 who has heard too many state unions. Were you in 0:03:11.480 --> 0:03:14.000 the room for any of the Reagan state of the unions? 0:03:14.040 --> 0:03:16.360 Were you one of the people down there? Yes? I was. 0:03:16.960 --> 0:03:21.160 You were not a designated survivor? No, I go although 0:03:21.200 --> 0:03:24.680 you are the designated survivor, and I have survived. I 0:03:24.720 --> 0:03:29.120 have survived. I don't think a laundry list of specific 0:03:29.240 --> 0:03:32.360 proposals is the right thing for the state. Then what 0:03:32.400 --> 0:03:35.600 do you want to hear? You've got a large, large audience. 0:03:36.080 --> 0:03:39.560 They don't want technical details. So I think, and I 0:03:39.600 --> 0:03:43.600 think it's wrong to say that there's no new policies 0:03:43.640 --> 0:03:47.400 in this. It's just that the President announced his new 0:03:47.480 --> 0:03:53.240 policies in Davos. So the will go back to to 0:03:53.720 --> 0:04:02.840 the We'll go back to the uh E p p UM. 0:04:02.920 --> 0:04:04.960 That's a big change, and that was that was a 0:04:05.000 --> 0:04:09.040 real item in Davos. It was we will open a 0:04:09.120 --> 0:04:16.360 path to citizenship for uh the Dreamers, for the kids 0:04:16.440 --> 0:04:19.600 born in the United brought into the United States as 0:04:19.960 --> 0:04:25.240 young children. That's a major change. So, UH, I don't 0:04:25.320 --> 0:04:28.560 understand why there's a sense that there's no specifics in 0:04:28.600 --> 0:04:31.279 this talk. So what were the specifics on tride in 0:04:31.279 --> 0:04:33.680 the stud of the Union was nine? There were no 0:04:33.760 --> 0:04:39.279 specifics on on trade. And but again the awkward problem 0:04:39.400 --> 0:04:43.920 is what do we do about uh so called voluntary 0:04:43.960 --> 0:04:48.280 transfers of technology where American companies are told that if 0:04:48.320 --> 0:04:50.719 they want to do business in China, they have to 0:04:50.880 --> 0:04:54.760 transfer their technology and they say, well, one point three 0:04:54.920 --> 0:04:58.520 billion people in China, I've got to be there. So 0:04:58.640 --> 0:05:01.039 if they want to know the seek it formula for 0:05:01.160 --> 0:05:05.120 how we make donuts, will give it to them. Well, professor, voluntary, 0:05:05.200 --> 0:05:07.960 of course, is an interesting word that we can debate 0:05:08.040 --> 0:05:10.640 because for some companies in the United States they were said, 0:05:10.640 --> 0:05:13.159 there's nothing voluntarily about it. They want to be in 0:05:13.200 --> 0:05:16.240 that market. And isn't this the President's ultimate problem with 0:05:16.320 --> 0:05:19.920 countries like China, that the entrance to get into this 0:05:20.000 --> 0:05:22.760 market is very very small, and before you go through 0:05:22.800 --> 0:05:25.160 that entrance, you have to give up some of what 0:05:25.160 --> 0:05:28.320 you've felt exactly right. So but again the public doesn't 0:05:28.400 --> 0:05:32.279 want to know that the strategy that the administration will 0:05:32.400 --> 0:05:36.280 use to try to get the Chinese to back off 0:05:36.640 --> 0:05:42.480 that so called voluntary transfer of technology. Uh. The President 0:05:42.520 --> 0:05:50.240 Obama met with President she to talk about the the 0:05:50.400 --> 0:05:55.479 use of cyberspace stealing of American technology, and that got 0:05:55.520 --> 0:05:58.840 the Chinese to cut back on that. So we're gonna 0:05:58.920 --> 0:06:01.560 have to have a similar thing to deal with this 0:06:02.040 --> 0:06:07.080 not really truly voluntary transfer, just joining us. Martin Feldsteine 0:06:07.120 --> 0:06:09.200 with us for a nice amount of time this morning, 0:06:09.200 --> 0:06:12.320 throw that he could be with us. Paul Krugman always 0:06:12.400 --> 0:06:15.919 up edding UH talks about trumpfrastructure, which I think is 0:06:15.920 --> 0:06:18.960 a very fair idea, and that every president has their 0:06:19.000 --> 0:06:24.160 own view of how you do infrastructure. You've seen infrastructure occur. 0:06:24.720 --> 0:06:27.760 You certainly have a vintage to remember Eisenhower in the 0:06:27.800 --> 0:06:33.039 Interstate highway system. How do we actually do infrastructure in 0:06:33.040 --> 0:06:36.479 America so we can have airports and roads like John 0:06:36.520 --> 0:06:40.520 Farrell has it Heathrow and in scene at Coventry, remember 0:06:40.600 --> 0:06:45.200 Hea throw the British airport is not a government private 0:06:45.400 --> 0:06:47.800 it's a private airport. So that's one part. Do we 0:06:47.839 --> 0:06:53.000 need to do more privately? Do more privatization of infrastructure? 0:06:53.360 --> 0:06:56.880 But I think that when President Obama said we have 0:06:57.000 --> 0:07:02.080 shovel ready projects to stimulate economy, there weren't any shovel 0:07:02.160 --> 0:07:07.719 ready projects. So what we need now is an inventory, 0:07:08.040 --> 0:07:15.360 a a a book of of designs, of specifications so 0:07:15.400 --> 0:07:19.000 that when the economy turns down, we can move I'll 0:07:19.040 --> 0:07:23.320 take your point, but are there's so many rusty bridges 0:07:23.840 --> 0:07:26.360 that we can't wait for the economy that's turn down. 0:07:26.560 --> 0:07:28.720 I don't think. Are we really going to supercharge the 0:07:28.760 --> 0:07:33.960 economy with bridge building it'll help when the economy turns down? 0:07:34.160 --> 0:07:37.560 Why not? Why not? Well, the economy is quite strong now. 0:07:37.600 --> 0:07:40.520 I think it's gonna be hard to persuade the Congress 0:07:40.560 --> 0:07:46.120 to to um add to the deficit in order to 0:07:46.520 --> 0:07:50.520 do a substantial infrastructure. How they do the economy is weak, 0:07:51.040 --> 0:07:53.760 there will be a willingness to move forward. How do 0:07:53.840 --> 0:07:56.560 they do this in England? Mary Old England, Well, it's 0:07:56.560 --> 0:08:00.800 tok of infrastructure bonds funding big project X like high 0:08:00.800 --> 0:08:03.360 spilled rail in the United Kingdom. But there's a big 0:08:03.360 --> 0:08:07.240 debate Thomas to whether actually these big, big spending items 0:08:07.520 --> 0:08:09.280 actually need doing at all in a place like the 0:08:09.360 --> 0:08:11.880 United Kingdom is a very different debate to the United States, 0:08:11.920 --> 0:08:16.560 where there's big bipartisan support for an infrastructure project. My question, Professor, 0:08:17.160 --> 0:08:18.960 it's just how it's going to get paid for. The 0:08:19.000 --> 0:08:21.360 Treasury is going to have a refunding announcement a little 0:08:21.360 --> 0:08:24.840 bit later today, typical every three months expected, but this 0:08:24.920 --> 0:08:27.000 one more interesting because we want to know how these 0:08:27.040 --> 0:08:28.800 tax cuts are gonna be spent for where they're gonna 0:08:28.800 --> 0:08:32.400 wishoot along the curve. Now, if you plug infrastructure into 0:08:32.480 --> 0:08:34.880 the treasury market as well, we're going to see a 0:08:34.920 --> 0:08:37.800 big boom in debt, aren't we. We're going to see 0:08:37.800 --> 0:08:39.760 a boom in debt, and my hope is it will 0:08:39.840 --> 0:08:44.680 come when it's needed for macroeconomic reasons, when the economy 0:08:44.760 --> 0:08:47.440 turns down and the Fed says, well, there's not much 0:08:47.480 --> 0:08:51.120 we can do because our interest rates are still two 0:08:51.240 --> 0:08:54.640 or three percent. I mean, I mean, John, I know 0:08:54.760 --> 0:08:58.319 you've had a hangover on platform three in Coventry before, 0:08:58.840 --> 0:09:02.199 but if you get Platform three in Coventry, you can 0:09:02.240 --> 0:09:05.120 go to Edinburgh in four hours fifty nine minutes. You 0:09:05.160 --> 0:09:09.120 can got a train in there like I'm time London 0:09:09.160 --> 0:09:12.160 Houston in about sixty minutes time, and that's a high 0:09:12.200 --> 0:09:15.800 speed rail line itself. I can't we do what he 0:09:15.880 --> 0:09:19.920 takes for granted in England, for we can do it. 0:09:19.960 --> 0:09:22.559 There's no question that we can do it, but I 0:09:22.600 --> 0:09:25.480 think there's going to be a reluctance to do it. 0:09:25.520 --> 0:09:27.959 Of course, again, a lot of the British rail has 0:09:28.000 --> 0:09:33.400 been privatized, so we're The solution for all these things 0:09:33.520 --> 0:09:37.560 is not more government activities, but I think we will 0:09:37.640 --> 0:09:40.439 need to get the government into this when the economy 0:09:40.559 --> 0:09:43.320 is weak. Martin Fell signed with Harvard University and John 0:09:43.360 --> 0:10:01.679 Ferrell from Platform three in Coventry this morning. Jared Cyberg 0:10:01.800 --> 0:10:05.319 is of Cowen. They do great, great research all sorts 0:10:05.360 --> 0:10:08.400 of areas kind of rumor of course, the legendary and airlines. 0:10:09.040 --> 0:10:11.199 Jared Cyberg looks at a lot of things we could 0:10:11.240 --> 0:10:12.880 do this day of the Union thing, but I think 0:10:12.880 --> 0:10:16.400 we've done it John like eight times this morning, So Jared, 0:10:16.480 --> 0:10:20.200 I want to go to Cyberg currencies. And what I 0:10:20.280 --> 0:10:25.040 learned in Davos is government people are waiting, waiting, waiting, waiting, 0:10:25.080 --> 0:10:30.040 with one exception, and that is I see os Jared Cyberg, 0:10:30.120 --> 0:10:33.440 what is an i c O and does Washington have 0:10:33.640 --> 0:10:37.640 their attention on I c O s? Yeah, sure, so 0:10:37.960 --> 0:10:41.680 great question. Um. I c O s are essentially a 0:10:41.920 --> 0:10:44.520 backdoor way to do an I p O, a way 0:10:44.559 --> 0:10:49.880 to raise money from investors, and uh, you know, Washington 0:10:50.280 --> 0:10:54.120 is not opposed to the plumbing of an i c 0:10:54.160 --> 0:10:58.640 O of of you know, creating a digital coin instead 0:10:58.679 --> 0:11:02.480 of a ship era of stock. What they don't like 0:11:03.040 --> 0:11:05.880 is doing i c O s that are not registered 0:11:05.920 --> 0:11:09.319 with the SEC, where you don't get all the protections. 0:11:09.600 --> 0:11:12.319 Are we going to get to a point where that's 0:11:12.400 --> 0:11:16.400 the toggle switch to whichever way we're going in crypto? 0:11:16.600 --> 0:11:20.600 This crypto that is that going to be the key thing? 0:11:21.600 --> 0:11:24.240 So I really think you need to separate, uh it 0:11:24.320 --> 0:11:27.400 out I c O s versus you know, bitcoin and 0:11:27.800 --> 0:11:31.439 digital currencies. And I think the I c O I 0:11:31.600 --> 0:11:34.800 c O approach is something that's going to survive and 0:11:34.920 --> 0:11:37.640 something that will be useful, but you're not going to 0:11:37.760 --> 0:11:39.600 be able to you know. One of the things we 0:11:39.720 --> 0:11:43.439 always argue is that if you build a better mousetrap, 0:11:43.840 --> 0:11:48.200 but it's all premised on getting around consumer protections and 0:11:48.320 --> 0:11:53.600 other anti money laundering rules. That's not viable. And you 0:11:53.640 --> 0:11:56.439 know I c O s that are designed to do that, 0:11:56.440 --> 0:12:01.640 that's not going to survive. Yeah. I I look at 0:12:02.400 --> 0:12:05.200 I c O s and what happened in Korea, what 0:12:05.280 --> 0:12:08.640 happened in China. That was certainly a huge issue, a 0:12:08.720 --> 0:12:11.600 point of discussion. I should say, in Davos, where is 0:12:11.640 --> 0:12:14.720 Secretary Minusia and this and where is Washington on this? 0:12:15.240 --> 0:12:17.440 Or is it just something removed in the in the 0:12:17.559 --> 0:12:20.680 in the distance. No, actually, I think this is moving 0:12:21.160 --> 0:12:25.800 very quickly from the back of the front. Yeah. And 0:12:25.840 --> 0:12:29.200 we saw a Minusian yesterday. Uh, you know his testimony 0:12:29.280 --> 0:12:32.560 before Senate Banking. He was asked about it, and he 0:12:32.679 --> 0:12:36.680 basically said, you know, our money laundering rules have to apply, 0:12:36.840 --> 0:12:40.160 Our Bank Secrecy Act rules have to apply, and we 0:12:40.200 --> 0:12:44.520 expect other countries to apply their money laundering rules to this. 0:12:44.679 --> 0:12:49.559 And that's a much heavier regulated product than what's existed 0:12:50.200 --> 0:12:52.920 before we even get onto cybercurrency. So I'm already confused 0:12:52.960 --> 0:12:56.400 about the Treasury secretaries current stance on the actual currency 0:12:56.679 --> 0:13:01.040 of the United States of America. I think you to last, 0:13:03.600 --> 0:13:10.240 what's your rate? I think that he is very carefully 0:13:10.280 --> 0:13:13.800 trying to walk back um you know, some of the 0:13:13.840 --> 0:13:17.280 comments that got so much attention and trying to go 0:13:17.360 --> 0:13:22.520 back to a more neutral stance. And uh, you know, 0:13:22.559 --> 0:13:25.400 I think he was asked this yesterday as well, and 0:13:26.000 --> 0:13:29.400 I thought he did a pretty effective tap dance, uh 0:13:29.480 --> 0:13:33.200 to say, oh, I was misunderstood, you know, was out 0:13:33.200 --> 0:13:35.680 of context. I mean all the stuff that you typically 0:13:35.760 --> 0:13:39.960 here when somebody's realized that they may have stepped a 0:13:40.000 --> 0:13:44.160 little too far out of bounce the reaction of the 0:13:44.200 --> 0:13:46.080 rest of the world. Do you think that's what pushed 0:13:46.120 --> 0:13:48.160 him to take a step back, Jared? Or did this 0:13:48.280 --> 0:13:54.760 come from within this administration? I'm not sure that's an 0:13:54.800 --> 0:13:58.440 either or answer. I think it's a both. I think 0:13:58.480 --> 0:14:03.400 that uh, he really he likely realized the gravity of 0:14:03.440 --> 0:14:06.439 the quotes that we were pulled out of that conversation, 0:14:06.640 --> 0:14:10.760 and I'm sure, uh there was pushback from you know, 0:14:10.840 --> 0:14:15.679 Gary Cohene and others within the administration, uh, saying you 0:14:15.720 --> 0:14:18.840 don't want to rattle these markets, and JAREDA maybe outside 0:14:18.840 --> 0:14:22.120 your preview, but we're gonna go to it anyways. Infrastructure, UM, 0:14:22.160 --> 0:14:25.480 I've had three conversations on infrastructure. In the summary of 0:14:25.520 --> 0:14:29.040 all them all different, but the summary simple, nothing's gonna happen. 0:14:29.200 --> 0:14:32.640 Can you explain to our audience why Washington cannot take 0:14:32.680 --> 0:14:36.640 a leadership position on infrastructure. I would just like them 0:14:36.680 --> 0:14:40.200 to fill the potholes on the road outside of my house. So, 0:14:40.680 --> 0:14:44.920 I mean, you know, you know, it's um, it's a 0:14:45.040 --> 0:14:48.200 question of money. You know, you know, the county claims 0:14:48.200 --> 0:14:51.000 they don't have the money, the state doesn't have the money. 0:14:51.040 --> 0:14:53.680 And now the FEDS are basically saying, where are we 0:14:53.720 --> 0:14:57.880 going to get this one point five trillion dollars from? 0:14:57.960 --> 0:15:01.320 And you know, to to kind of circle back to 0:15:01.360 --> 0:15:03.920 where we started, you know, with State of the Union 0:15:03.960 --> 0:15:07.440 a little bit. Uh, there was no talk of deficits, 0:15:07.600 --> 0:15:10.800 of cutting the debt, you know, any any of that. 0:15:11.400 --> 0:15:15.920 And so, you know, you have Republicans who are reluctant 0:15:16.000 --> 0:15:18.480 to spend another one point five trillion. You have a 0:15:18.600 --> 0:15:22.760 president who's not really looking at entitlement reforms are other 0:15:22.880 --> 0:15:28.920 things that maybe could offset that, And so we get stalemate. Jarisy, 0:15:29.000 --> 0:15:31.880 but Accoln Washington Research Group policy analysts joining us on 0:15:31.920 --> 0:15:35.440 the situation in the nation's capital. If stalemate also a 0:15:35.480 --> 0:15:40.080 consequence of the mid terms at the end of this year, Jarrett, Well, sure, 0:15:40.120 --> 0:15:43.440 I mean, although we're not quite at that point yet 0:15:43.560 --> 0:15:48.160 where Washington still can't get stuff done. UM. So, if 0:15:48.200 --> 0:15:54.760 if somebody had a more limited infrastructure plan that could 0:15:54.800 --> 0:15:58.320 be paid for, I still think you could get bipartisan 0:15:58.400 --> 0:16:01.320 support for it. Um. You know, the problem is that 0:16:01.400 --> 0:16:06.280 this White House does not put forward detailed plans, and 0:16:06.840 --> 0:16:09.840 so nothing happened. Jared, Thank you so much. Jared Seedburg 0:16:09.920 --> 0:16:11.400 with some of what we've heard from any number of 0:16:11.440 --> 0:16:25.640 guests today, nothing happens. He's a former chairman of the 0:16:25.640 --> 0:16:29.520 President's Council of Economic Advisor, that would be President Obama. 0:16:29.600 --> 0:16:34.400 Austin Goulsby joins us now from the Boost School Chicago. Austin, 0:16:34.520 --> 0:16:38.200 you've spent a few years looking at public policy, any 0:16:38.280 --> 0:16:42.280 number of smart papers on it. The consumer gains from 0:16:42.320 --> 0:16:45.280 direct broadcast satellites, that was a Barnburn I read every 0:16:45.320 --> 0:16:50.520 word of that evidence on learning and network externalities. Say 0:16:50.640 --> 0:16:55.080 what you on infrastructure? You're in Chicago, you know the 0:16:55.160 --> 0:16:59.240 value of the interstate highway system growing up in Wit. 0:16:59.280 --> 0:17:02.040 Are your caliph for in you? How do we jump 0:17:02.080 --> 0:17:09.280 start infrastructure after we heard Trump infrastructure last night, Well, Tom, 0:17:09.280 --> 0:17:13.119 thanks for having me back. By the way, I was 0:17:13.240 --> 0:17:17.400 a little disappointed by the I like the tone of 0:17:17.080 --> 0:17:20.560 a lot of what President Trump said in the State 0:17:20.560 --> 0:17:22.760 of Union last night. It just seemed like he was 0:17:22.840 --> 0:17:25.119 trying to take a bi part as a note. But 0:17:25.160 --> 0:17:29.480 I was kind of disappointed on the infrastructure part because 0:17:29.760 --> 0:17:32.600 he didn't seem to have much of a plan. A 0:17:32.760 --> 0:17:35.520 plan was I call on you Congress to come up 0:17:35.520 --> 0:17:40.000 with a plan. Um he said one point five trillion dollars. 0:17:40.680 --> 0:17:42.879 What we're gonna have to see now is where's the money? 0:17:42.920 --> 0:17:44.919 I mean, that's always the problem when it comes to 0:17:44.960 --> 0:17:49.239 the infrastructure, is we gotta we gotta wrap our heads around. Uh, 0:17:49.320 --> 0:17:52.320 it does cost money to build this stuff and this stuff, 0:17:53.040 --> 0:17:56.240 but it helps economic growth. Austin, we didn't have that 0:17:56.359 --> 0:18:00.600 problem when tax reforms slash text cuts. When you said 0:18:00.640 --> 0:18:04.480 where's the money? With tax cuts, everybody said, everybody voting 0:18:04.480 --> 0:18:07.199 for it said, you know, a trillionaire, A trillionaire, who's counting? 0:18:07.880 --> 0:18:10.480 I mean, why are we having the same discussion about 0:18:10.520 --> 0:18:14.560 infrastructure when, without question, other than roads to nowhere, it 0:18:14.640 --> 0:18:20.879 benefits all. Look, I agree, And and that's what I 0:18:20.920 --> 0:18:25.880 was saying during the tax reform slash tax bill debate, 0:18:26.160 --> 0:18:30.280 is this is a big number. You know, arguably one 0:18:30.320 --> 0:18:33.600 and a half trillion with a bunch of accounting gimmicks 0:18:33.600 --> 0:18:36.200 that if you don't count the accounting gimmicks, that might 0:18:36.200 --> 0:18:39.840 cost three trillion or more. Imagine how much infrastructure you 0:18:39.840 --> 0:18:44.320 can buy for three trillion dollars. Um Uh. I don't 0:18:44.400 --> 0:18:48.840 see how you know cutting the estate tax for for 0:18:48.880 --> 0:18:51.480 people making more than twenty million, who have a state 0:18:51.560 --> 0:18:55.280 that more than twenty million dollars, that that raises our 0:18:55.359 --> 0:18:59.920 productivity or our growth more than it would fixing our airport. 0:19:00.000 --> 0:19:03.000 It's building out our highways, fixing our ports. I mean, 0:19:03.640 --> 0:19:07.360 this is this should be more of a priority then 0:19:07.440 --> 0:19:09.760 it seems to be. And I don't quite understand why. 0:19:09.920 --> 0:19:13.359 Austin Professor Jonathan, Here's something I don't quite understand is 0:19:13.400 --> 0:19:15.760 what's happened to a massive group of individuals that I 0:19:15.840 --> 0:19:19.440 heard so much from over several years where interest rates 0:19:19.440 --> 0:19:21.680 were record lows, all time loads in the United States 0:19:21.720 --> 0:19:25.000 and across Europe, where these individuals would say, there's the 0:19:25.000 --> 0:19:28.280 opportunity go out there and borrow and do something with 0:19:28.359 --> 0:19:31.200 that cash. And now I don't hear that as much anymore. 0:19:31.240 --> 0:19:34.680 In fact, I hear people complaining. I hear people fearmongering 0:19:34.720 --> 0:19:36.919 about the budget deficit, about what will happen with the 0:19:36.920 --> 0:19:40.920 debt load? Those people were calling for this several years ago. 0:19:41.000 --> 0:19:45.000 So what happened, Well, you know, you've you've hit on 0:19:45.080 --> 0:19:49.960 the new reality of American politics, which is the hypocrisy 0:19:50.080 --> 0:19:52.560 doesn't make any difference anymore. It used to be if 0:19:52.560 --> 0:19:55.560 you said something today that was the exact opposite of 0:19:55.600 --> 0:19:58.399 what you said eighteen months ago, you at least, you know, 0:19:58.480 --> 0:20:00.480 Tim Russard would kind of put that in your faith. 0:20:00.520 --> 0:20:03.560 You at least had to squirm a little, if not 0:20:03.760 --> 0:20:06.000 come up with an explanation of why you thought it 0:20:06.080 --> 0:20:09.240 was different for you know now from them now, I 0:20:09.320 --> 0:20:12.320 will say the Republicans have done that, and now the 0:20:12.400 --> 0:20:17.080 Democrats also are piling on in that. I think the 0:20:17.119 --> 0:20:21.720 problem is the following. When it was President Obama saying 0:20:22.480 --> 0:20:26.000 let's borrow money to build out infrastructure because interest rates 0:20:26.000 --> 0:20:29.199 are historically epically low, now would be the time to 0:20:29.240 --> 0:20:32.360 do it. The Republicans were not going to allow him 0:20:32.800 --> 0:20:36.240 to borrow to do that. And now that it's the 0:20:36.280 --> 0:20:40.840 Republicans in control, the Democrats are not going to allow 0:20:41.760 --> 0:20:45.800 the reverse a half the Republican Party wouldn't before that, 0:20:46.320 --> 0:20:49.199 and so they would need support of the Democrats. And 0:20:49.200 --> 0:20:51.960 the Democrats say, wait a minute. You know you don't 0:20:51.960 --> 0:20:54.960 want to do it the way we that we've historically 0:20:55.040 --> 0:20:57.960 done it. You know, you you want to try to 0:20:57.960 --> 0:21:01.960 turn it over to the private sector. Um So, I 0:21:02.000 --> 0:21:03.879 think that's where they are. Austin. I don't know if 0:21:03.880 --> 0:21:06.399 you've done under. Steve Levitt of freak Adomics has done it. 0:21:06.480 --> 0:21:09.720 But the gas tax is always a third rail, particularly 0:21:09.760 --> 0:21:12.760 across all of rural America. Are we just really back to, 0:21:13.600 --> 0:21:15.760 you know where somebody says in the Oval Office, Mr 0:21:15.800 --> 0:21:18.760 Hassett or others, I'm sorry, Mr President, but you can't 0:21:18.800 --> 0:21:21.040 get a gas text through because it's a third rail 0:21:21.640 --> 0:21:25.840 in Kansas. Is that where we really are? I don't know. 0:21:25.960 --> 0:21:31.159 You know, you saw Senator Cornyn from Texas, which of 0:21:31.240 --> 0:21:35.240 all states you think Texas would be, you know, among 0:21:35.359 --> 0:21:40.320 the most anti gas tex uh talk about the gas tax, 0:21:41.200 --> 0:21:43.280 you know, not in a positive way, but not to 0:21:43.480 --> 0:21:48.280 completely rule it out. But my intuition is is what 0:21:48.359 --> 0:21:51.440 you say, the Kindress is not going to be able 0:21:51.600 --> 0:21:55.479 to agree cross party lines on that constant goes with us. 0:21:55.480 --> 0:21:58.520 A former chairman of the President's Council of Economic I 0:22:13.280 --> 0:22:15.600 know you're not a big fitness guy. But you know 0:22:15.640 --> 0:22:20.359 there is a fitness tracking app called Strava. He's not 0:22:20.440 --> 0:22:22.560 a big fitness guy, he says, I can't imagine I'm 0:22:22.600 --> 0:22:26.160 wearing a no, no, no, but there is a fitness 0:22:26.200 --> 0:22:30.119 tracking please, there's a this is this is connected to 0:22:30.160 --> 0:22:33.600 what we're gonna talk about. There's a fitness tracking app 0:22:33.640 --> 0:22:38.080 called Strava, and it has about a billion activities and 0:22:38.560 --> 0:22:41.639 three trillion points of latitude and so on. Anyway, a 0:22:41.720 --> 0:22:46.440 twenty year old year old Australian university student, Nathan Rousser, 0:22:46.960 --> 0:22:50.280 he noticed that the map showed locations and running routines 0:22:50.280 --> 0:22:54.760 of US military personnel all over the world. That kind 0:22:54.800 --> 0:22:58.679 of technology gets out there and it's very hard to 0:22:58.720 --> 0:23:01.320 put it back in the bottle. And our next guest 0:23:01.720 --> 0:23:07.120 beast car Charter. I'm sorry, chat, I hope I did okay, professor. 0:23:07.760 --> 0:23:11.840 Professor disabused me of my bad pronunciation. You are the 0:23:11.880 --> 0:23:15.800 senior associate in International Business and Finance at Tough University. 0:23:16.000 --> 0:23:19.080 I'm sure that you saw this news report and this 0:23:19.160 --> 0:23:22.400 plays into some research that you've recently done. You've heard 0:23:22.400 --> 0:23:25.840 about this, correct, Yeah, absolutely, yeah. We seem to be 0:23:25.880 --> 0:23:30.440 getting news reports almost on a daily basis of user 0:23:30.560 --> 0:23:34.320 data being compromised in one form of the other. So 0:23:35.400 --> 0:23:38.320 at some point it gets you practically need an app 0:23:38.400 --> 0:23:41.560 to keep track of all these apps that are kind 0:23:41.600 --> 0:23:44.480 of opening us up to all kinds of vulnerabilities. Tell 0:23:44.560 --> 0:23:49.359 us about digital trust and what you discovered? Well, I 0:23:49.400 --> 0:23:52.600 think as we sort of look at where we are 0:23:52.840 --> 0:23:58.040 in our state of relationships, the relationship with the digital economy, 0:23:58.320 --> 0:24:02.199 our dependence has grown, uh, you know, grown to addictive levels. 0:24:02.960 --> 0:24:07.760 Our sense of distrust has also grown and certainly seen 0:24:07.920 --> 0:24:12.119 was in many ways, uh turning point, and essentially that 0:24:12.280 --> 0:24:17.040 there are three things that I believe we are not uniformly, 0:24:17.080 --> 0:24:21.040 but around the world. We're concerned about were concerned about privacy, 0:24:21.080 --> 0:24:24.359 were concerned about security, and we're concerned about reliability. And 0:24:24.400 --> 0:24:26.560 the extent to which these concerns are high or low 0:24:26.920 --> 0:24:29.359 varies depending on where you are in the world. So 0:24:30.160 --> 0:24:33.359 largely speaking, we find that in the developed world we 0:24:33.440 --> 0:24:37.760 are much more concerned than in emerging markets where people 0:24:37.800 --> 0:24:40.520 are still new to this technology and they're excited about it. Okay, 0:24:40.840 --> 0:24:42.679 I want to ask a couple of basic questions, and 0:24:42.720 --> 0:24:46.640 these aren't fancy mckensey questions or anything like that. Are 0:24:46.640 --> 0:24:50.760 our computers at home, are iPads at home our cell phones? 0:24:50.840 --> 0:24:54.840 Where ever? Are they quote unquote safe because that's where 0:24:54.840 --> 0:25:01.000 the ultimate distrust comes uh well quote and it is 0:25:01.160 --> 0:25:05.200 the operative term here, So they're safe as an uh. 0:25:05.240 --> 0:25:08.800 You know, if somebody were to really put their mind 0:25:08.840 --> 0:25:12.879 against getting into your device and uh and peer into 0:25:12.920 --> 0:25:16.119 your day day to day lives, they could potentially do that. 0:25:16.600 --> 0:25:20.680 But you're one among uh you know, three billion people 0:25:21.000 --> 0:25:24.720 who are on the internet. So you know, if I'm 0:25:24.720 --> 0:25:27.199 going to waste my time trying to get into your system, 0:25:27.480 --> 0:25:30.320 I probably would go into you know somebody or not 0:25:30.359 --> 0:25:33.040 that you're not important, but you know there are many others. 0:25:33.320 --> 0:25:36.919 So I think in reality yeah, in reality not, you know, 0:25:37.600 --> 0:25:39.760 it's it's more or less sick. But if somebody could 0:25:39.920 --> 0:25:41.680 want want to get in, they could do it. I'm 0:25:41.680 --> 0:25:44.240 like everybody else. Pay You've got the fancy imach at home, 0:25:44.280 --> 0:25:45.879 and you bring it home and you're unwrap it and 0:25:45.960 --> 0:25:49.080