1 00:00:05,760 --> 00:00:13,000 Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,520 --> 00:00:17,599 Speaker 1: Jay Ley. We bring you inside from the best in economics, finance, investment, 3 00:00:18,040 --> 00:00:23,560 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,640 --> 00:00:32,600 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Dropping 5 00:00:32,640 --> 00:00:34,559 Speaker 1: by the Bloomberg Studio here in New York City. Has 6 00:00:34,560 --> 00:00:37,760 Speaker 1: harm Band holds any Credit Bank chief US economist, and 7 00:00:37,840 --> 00:00:40,080 Speaker 1: he joins us, Now, good morning to your harm Good morning. 8 00:00:40,240 --> 00:00:42,479 Speaker 1: We could paint a very gloomy picture. The I m 9 00:00:42,520 --> 00:00:45,080 Speaker 1: F cutting gets global outlook for growth, the I e 10 00:00:45,240 --> 00:00:48,240 Speaker 1: A saying that oil prices are in the red zone. 11 00:00:48,240 --> 00:00:50,760 Speaker 1: And then I look at the Atlanta Fed GDP track 12 00:00:50,800 --> 00:00:55,080 Speaker 1: of forecasting four percent. Things that bad. No, things are 13 00:00:55,080 --> 00:00:56,640 Speaker 1: not that bad. There are a lot of risk on 14 00:00:56,680 --> 00:00:58,760 Speaker 1: the horizon. And the I m F also reminded us 15 00:00:58,800 --> 00:01:01,640 Speaker 1: that the that the the balance of risk has shifted 16 00:01:01,640 --> 00:01:04,000 Speaker 1: to the downside. But I mean even three point seven 17 00:01:04,000 --> 00:01:08,000 Speaker 1: percent growth the new forecast is not is not that bad? Right? Um? 18 00:01:08,120 --> 00:01:10,360 Speaker 1: And and certainly in the US things look and look 19 00:01:10,440 --> 00:01:13,679 Speaker 1: look an awful lot better. Um. But I would like 20 00:01:13,760 --> 00:01:17,320 Speaker 1: to add, mostly thanks to a stimulus which supports an 21 00:01:17,319 --> 00:01:20,560 Speaker 1: economy that is running it or or beyond full employment. 22 00:01:20,600 --> 00:01:23,840 Speaker 1: So it is a very short term measure, but at 23 00:01:23,880 --> 00:01:25,960 Speaker 1: this point it helps the optics. If we just go 24 00:01:26,040 --> 00:01:28,800 Speaker 1: through the IMF forecast, they're basically trimming their outlook and 25 00:01:28,840 --> 00:01:31,080 Speaker 1: putting it in line to track growth that we got 26 00:01:31,160 --> 00:01:33,240 Speaker 1: last year. I mean, the growth last year was pretty decent. 27 00:01:33,280 --> 00:01:36,240 Speaker 1: If we plateau around these levels, that's not a negative story, 28 00:01:36,319 --> 00:01:37,679 Speaker 1: is it harm No, not at all. And I think 29 00:01:37,680 --> 00:01:40,440 Speaker 1: it's too optimistic because I mean that's what these official bodies, 30 00:01:40,800 --> 00:01:43,280 Speaker 1: I guess, have to do. They usually do not forecast 31 00:01:43,319 --> 00:01:45,640 Speaker 1: recessions because that would send it signals. So that's true 32 00:01:45,640 --> 00:01:47,319 Speaker 1: for central banks, that's true for the m F and 33 00:01:47,319 --> 00:01:49,280 Speaker 1: for the World Bank. They at some points in just 34 00:01:49,600 --> 00:01:53,800 Speaker 1: forecast potential UM and I think it would be great 35 00:01:54,080 --> 00:01:55,920 Speaker 1: if we end up with such an outcome. It's like 36 00:01:55,960 --> 00:01:58,120 Speaker 1: the feder Reserve. They're not in the business of forecasting 37 00:01:58,360 --> 00:02:00,480 Speaker 1: recession because they're meant to do something at it before 38 00:02:00,480 --> 00:02:04,320 Speaker 1: we get there. How are you forecasting the recession? Um? 39 00:02:04,360 --> 00:02:05,840 Speaker 1: I think there's a good chance that we have it down, 40 00:02:05,880 --> 00:02:07,600 Speaker 1: that we see a downturn, a mile downturn in two 41 00:02:07,600 --> 00:02:10,240 Speaker 1: thousand twenties, so we we do forecasts in our official 42 00:02:10,280 --> 00:02:13,200 Speaker 1: forecast is significant grows low down and second half of 43 00:02:13,280 --> 00:02:16,520 Speaker 1: nineteen to one and a half percent in the US 44 00:02:16,680 --> 00:02:19,640 Speaker 1: and probably further slowing in two thousand twenty. Some people 45 00:02:19,720 --> 00:02:21,920 Speaker 1: struggle to believe in that when you see the GDP 46 00:02:22,040 --> 00:02:25,200 Speaker 1: trackers around four percent. How do we get from four 47 00:02:25,480 --> 00:02:28,280 Speaker 1: down towards negative growth? What takes us there? Well, first 48 00:02:28,280 --> 00:02:30,520 Speaker 1: of all the four percent or whatever, so we have 49 00:02:30,560 --> 00:02:32,600 Speaker 1: three points three percent for the third quarter. But anyway, 50 00:02:32,639 --> 00:02:35,240 Speaker 1: decent gross number. That's for this quarter, right, So I 51 00:02:35,240 --> 00:02:39,079 Speaker 1: mean for the third quarter. Um doesn't sell us anything 52 00:02:39,080 --> 00:02:41,359 Speaker 1: about the future. I mean they just look at GDP components. 53 00:02:41,400 --> 00:02:44,360 Speaker 1: They look at what the short term indicators are indicating, 54 00:02:44,360 --> 00:02:47,520 Speaker 1: and that is decent growth for the third quarter after 55 00:02:47,800 --> 00:02:50,160 Speaker 1: even better grows in the in the second quarter. What's 56 00:02:50,200 --> 00:02:54,440 Speaker 1: it mean for a society to chronically run at two 57 00:02:54,480 --> 00:03:00,799 Speaker 1: point eight or three GDP versus somewhat same society running 58 00:03:00,800 --> 00:03:04,240 Speaker 1: at one point eight GDP. You look at the duck 59 00:03:04,360 --> 00:03:07,240 Speaker 1: with the World Economic Outlook page John, and it's just 60 00:03:07,360 --> 00:03:10,320 Speaker 1: amazing when you see the numbers laid out for the 61 00:03:10,360 --> 00:03:14,960 Speaker 1: United States versus a set of selected European countries. Yeah, 62 00:03:15,000 --> 00:03:19,720 Speaker 1: I mean GDP numbers, but themselves do not say a 63 00:03:19,760 --> 00:03:21,600 Speaker 1: lot about what it means for society. I think we 64 00:03:21,600 --> 00:03:24,000 Speaker 1: should rather look at GDP per capita numbers, right, so 65 00:03:24,040 --> 00:03:26,760 Speaker 1: what it protivitate is doing. So the US has been 66 00:03:26,919 --> 00:03:30,280 Speaker 1: better demographics than most European countries, but that does not 67 00:03:30,400 --> 00:03:34,800 Speaker 1: explain everything in the in the gross differential. But but again, 68 00:03:34,840 --> 00:03:37,160 Speaker 1: in terms of GDP per capita numbers, the outlook or 69 00:03:37,240 --> 00:03:39,400 Speaker 1: also the history for the US and the history for 70 00:03:39,880 --> 00:03:43,120 Speaker 1: eurosone as a whole is not that different. And it's 71 00:03:43,120 --> 00:03:45,560 Speaker 1: certainly not as different as you would think if you 72 00:03:45,640 --> 00:03:48,120 Speaker 1: just look at headline GDP numbers. But overall, to your 73 00:03:48,120 --> 00:03:50,080 Speaker 1: point of course, if you grow faster on a per 74 00:03:50,120 --> 00:03:54,440 Speaker 1: capita basis, well that by itself should mean more wealths 75 00:03:54,480 --> 00:03:57,480 Speaker 1: accumulated by by their population. But then let me add 76 00:03:57,480 --> 00:04:00,400 Speaker 1: another caveat. It's about distribution as well, right, So I 77 00:04:00,400 --> 00:04:02,080 Speaker 1: mean it's great if you if your country as a 78 00:04:02,080 --> 00:04:06,680 Speaker 1: whole amount of GDP grows, but only if it's small 79 00:04:06,760 --> 00:04:09,840 Speaker 1: share benefits from it. What's your study of American wages? 80 00:04:09,960 --> 00:04:12,560 Speaker 1: This came up the other day in a conversation. Is 81 00:04:12,560 --> 00:04:15,760 Speaker 1: wage growth barbelled with people? You know, one group of 82 00:04:15,800 --> 00:04:19,839 Speaker 1: people making five wage growth and everybody else flat in 83 00:04:19,839 --> 00:04:24,359 Speaker 1: their backs. Um, well, I think they have there are 84 00:04:25,120 --> 00:04:30,680 Speaker 1: different distribution, so I mean there was also a period 85 00:04:30,760 --> 00:04:32,920 Speaker 1: where you had the high income earners benefiting a lot 86 00:04:32,960 --> 00:04:35,240 Speaker 1: and the low income earners finally seeing some wage gains 87 00:04:35,600 --> 00:04:38,680 Speaker 1: and the middle didn't get in anything. Um. I think it. Um, 88 00:04:40,120 --> 00:04:42,000 Speaker 1: But that is probably also a bit of a function 89 00:04:42,000 --> 00:04:44,120 Speaker 1: where we are on the cycle. I think the long term, 90 00:04:44,200 --> 00:04:46,920 Speaker 1: the long term developments are very clear that there are 91 00:04:46,960 --> 00:04:51,520 Speaker 1: people with better skills, better adapted to globalization, technological progress, 92 00:04:51,720 --> 00:04:55,680 Speaker 1: and having more wealths to start with, benefiting quite a 93 00:04:55,720 --> 00:04:57,720 Speaker 1: bit more than anybody everybody else. Can we get if 94 00:04:57,760 --> 00:04:59,960 Speaker 1: you want what oil means and higher roll price made 95 00:05:00,040 --> 00:05:01,640 Speaker 1: for the U. S economy At the moment we had 96 00:05:01,680 --> 00:05:04,080 Speaker 1: the I. E. A. Chief come out and say we 97 00:05:04,120 --> 00:05:06,960 Speaker 1: should all see the risky situation. The oil markets are 98 00:05:07,080 --> 00:05:10,400 Speaker 1: entering the red zone. I've not heard of that one, Tom, 99 00:05:10,520 --> 00:05:14,640 Speaker 1: the red zone national football. Come on, funding is watching 100 00:05:14,680 --> 00:05:17,480 Speaker 1: American football. You come down the field and you get 101 00:05:17,520 --> 00:05:20,400 Speaker 1: inside the if you heard of this before, harm the 102 00:05:20,440 --> 00:05:23,160 Speaker 1: red zone for crude. He goes on to say we 103 00:05:23,160 --> 00:05:25,240 Speaker 1: should talk to Michael Burrow, but we should try to 104 00:05:25,279 --> 00:05:27,720 Speaker 1: comfort the markets altogether, because it may be bad news 105 00:05:27,720 --> 00:05:30,159 Speaker 1: for the consumers import US today, but I believe it 106 00:05:30,200 --> 00:05:33,400 Speaker 1: maybe well be bad news for the producers tomorrow. He 107 00:05:33,440 --> 00:05:36,960 Speaker 1: thinks the crude around eighty five on brands seventy five 108 00:05:36,960 --> 00:05:40,680 Speaker 1: on w t I is harming the economy already. Do 109 00:05:40,839 --> 00:05:43,279 Speaker 1: you see that the global economy harm? Oh, for the 110 00:05:43,279 --> 00:05:45,920 Speaker 1: global economy, it's it is. It is a bit harder, 111 00:05:45,920 --> 00:05:49,240 Speaker 1: But I mean overall, you have obviously by definition as 112 00:05:49,760 --> 00:05:54,080 Speaker 1: as much all being exported as imported. So it's somebody's 113 00:05:54,080 --> 00:05:58,719 Speaker 1: gaining somebody's pain. For the US, I think following the 114 00:05:58,760 --> 00:06:03,960 Speaker 1: two thousand, fifteen sixteen decline in oil prices um the 115 00:06:04,040 --> 00:06:06,680 Speaker 1: views have shifted because when oil prices went down back 116 00:06:06,720 --> 00:06:09,800 Speaker 1: then dramatically, people thought it will be great, right because 117 00:06:09,960 --> 00:06:13,359 Speaker 1: it increases purchasing power of households, and it did. But 118 00:06:13,440 --> 00:06:16,159 Speaker 1: at the same time people have underestimated a structural change 119 00:06:16,200 --> 00:06:18,120 Speaker 1: the U S economy went through with Shell, GUS and 120 00:06:18,120 --> 00:06:21,359 Speaker 1: all that, because they took a huge hit. So what 121 00:06:21,480 --> 00:06:23,719 Speaker 1: you have for for GDP rows as a whole in 122 00:06:23,760 --> 00:06:27,120 Speaker 1: the US from oil price changes, I think the impact 123 00:06:27,120 --> 00:06:30,520 Speaker 1: may be close to negligible, close to zero, But you 124 00:06:30,560 --> 00:06:33,000 Speaker 1: have dramatic shifts within the sectors. I e. When oil 125 00:06:33,040 --> 00:06:35,480 Speaker 1: prices go up, it's good for producers, for investment, bed 126 00:06:35,560 --> 00:06:38,400 Speaker 1: for households, and vice versa. I mean, I look at 127 00:06:38,400 --> 00:06:41,520 Speaker 1: the red zone, and first of all, you gotta have 128 00:06:41,760 --> 00:06:43,839 Speaker 1: an end line, and I don't know where Frey Borows 129 00:06:43,880 --> 00:06:47,080 Speaker 1: headline is. I mean, first of all, the average price 130 00:06:47,200 --> 00:06:49,479 Speaker 1: when we were above hundred dollars a barrel wasn't a 131 00:06:49,520 --> 00:06:53,080 Speaker 1: hundred dollars. It was pushing a hundred and ten. But 132 00:06:53,200 --> 00:06:56,320 Speaker 1: the answer to me is we're a lot closer to 133 00:06:56,320 --> 00:06:59,240 Speaker 1: that than anyone. Imagine we would be Bank of America 134 00:06:59,440 --> 00:07:02,640 Speaker 1: seven months with an outlet by Ethan Harris um saying 135 00:07:02,640 --> 00:07:05,560 Speaker 1: the following some higher all prices inevitable in our view, 136 00:07:05,560 --> 00:07:08,599 Speaker 1: a hundred dollars of barrel easily within reach. We should 137 00:07:08,600 --> 00:07:10,440 Speaker 1: put an old shock in the top three of our 138 00:07:10,480 --> 00:07:13,760 Speaker 1: concerns over the next year. What do you think about 139 00:07:13,760 --> 00:07:18,440 Speaker 1: that harm when you hear stuff like that from your peers, Well, um, 140 00:07:18,480 --> 00:07:20,720 Speaker 1: I mean we are we are paid to have views 141 00:07:20,760 --> 00:07:24,560 Speaker 1: and sometimes to have more um, more out of out 142 00:07:24,560 --> 00:07:27,040 Speaker 1: of the box views. So so I'm it's it's not chocking, 143 00:07:27,040 --> 00:07:30,239 Speaker 1: particularly if you have seen oil price moves or moves 144 00:07:30,800 --> 00:07:32,440 Speaker 1: in the market in general. So I mean we we 145 00:07:32,840 --> 00:07:37,040 Speaker 1: sometimes and we we were extrapolated. We cannot totally dismiss it. 146 00:07:37,080 --> 00:07:38,840 Speaker 1: And and and again the dynamic have been in that direction. 147 00:07:38,880 --> 00:07:40,840 Speaker 1: But also I would I mean, I think we have 148 00:07:41,000 --> 00:07:44,440 Speaker 1: this one big additional producer, which is us shell GIRs 149 00:07:44,520 --> 00:07:48,160 Speaker 1: and and during the what they these producers used the crisis, 150 00:07:48,720 --> 00:07:52,320 Speaker 1: the drop in oil prices in fifteen sixteen to dramatically 151 00:07:52,360 --> 00:07:54,760 Speaker 1: lower their break even costs. Right, so they don't need 152 00:07:54,800 --> 00:07:56,920 Speaker 1: the eighty bucks anymore. They are good with I don't know, 153 00:07:57,040 --> 00:07:59,480 Speaker 1: fifty or something. So I think they are an important 154 00:07:59,480 --> 00:08:02,720 Speaker 1: marginal do so that in all of you prevents a 155 00:08:03,000 --> 00:08:06,120 Speaker 1: shop up rising bottle. Thank you so much with unit credit. 156 00:08:06,640 --> 00:08:19,560 Speaker 1: This morning, John Farrell and Tom Keane in New York 157 00:08:20,120 --> 00:08:23,960 Speaker 1: with your kitchen table Interview of the day, John, did 158 00:08:24,000 --> 00:08:25,600 Speaker 1: you have a kitchen table when you were a kid? 159 00:08:25,680 --> 00:08:28,760 Speaker 1: Of course, parents decided things at the kitchen table. Italian 160 00:08:28,800 --> 00:08:30,600 Speaker 1: father and meant we all sat around the table for 161 00:08:30,640 --> 00:08:34,480 Speaker 1: dinner and every night things were decided exactly, and then 162 00:08:34,760 --> 00:08:38,280 Speaker 1: we decided in the end. Kathy Fisher of Burnstein, ahead 163 00:08:38,280 --> 00:08:41,120 Speaker 1: of their wealth and investment strategies, had kitchen tables too 164 00:08:41,840 --> 00:08:45,920 Speaker 1: as a kid. Things get decided at a kitchen table. 165 00:08:46,200 --> 00:08:50,520 Speaker 1: And right now in investment, it's we're behind so few people. 166 00:08:50,559 --> 00:08:55,160 Speaker 1: What percentage of people have actually captured the lemon lobal market. 167 00:08:58,320 --> 00:09:00,280 Speaker 1: I don't know the answer to that question. I would 168 00:09:00,320 --> 00:09:02,560 Speaker 1: be guessing. I would tell you this is I would 169 00:09:02,600 --> 00:09:05,160 Speaker 1: argue this is where active management, though, comes into play, 170 00:09:05,240 --> 00:09:08,800 Speaker 1: because clients who work with an advisor, I think, got 171 00:09:08,920 --> 00:09:11,960 Speaker 1: very good advice to the courage to move into equities 172 00:09:11,960 --> 00:09:14,720 Speaker 1: and stay in equity. Agree with that, and that's really 173 00:09:14,760 --> 00:09:16,720 Speaker 1: where you get a lot of value. And we forget 174 00:09:16,760 --> 00:09:20,400 Speaker 1: that in the first few years eleven, even as bonds 175 00:09:20,400 --> 00:09:22,960 Speaker 1: were doing don't it was very hard. It was very 176 00:09:23,080 --> 00:09:25,640 Speaker 1: hard to have a full allocation of equities. But those 177 00:09:25,640 --> 00:09:29,520 Speaker 1: who did clearly benefited everyone aged. But you, um, what 178 00:09:29,640 --> 00:09:32,360 Speaker 1: I want to know, Kithy Fisher, is you look at 179 00:09:32,360 --> 00:09:35,120 Speaker 1: the kitchen table right now. The decision is how do 180 00:09:35,200 --> 00:09:38,840 Speaker 1: we catch up? I don't understand it. How does somebody 181 00:09:38,880 --> 00:09:42,680 Speaker 1: catch up? Who's four and five basis points behind? Well, 182 00:09:42,679 --> 00:09:44,680 Speaker 1: the question is behind what right? I mean if you 183 00:09:44,720 --> 00:09:46,880 Speaker 1: think about if you had looked ahead, you know, let's 184 00:09:46,880 --> 00:09:48,720 Speaker 1: just say five years ago, if you looked ahead to 185 00:09:48,760 --> 00:09:51,320 Speaker 1: the market, you'd say, you know, we think stocks are 186 00:09:51,320 --> 00:09:53,320 Speaker 1: going to do sort of six seven percent in the 187 00:09:53,360 --> 00:09:56,320 Speaker 1: decade to come, bonds far less. And if you looked 188 00:09:56,360 --> 00:09:58,520 Speaker 1: at that projection, is where you are today. You're kind 189 00:09:58,520 --> 00:10:01,040 Speaker 1: of on track with that. So I think you've got 190 00:10:01,040 --> 00:10:03,080 Speaker 1: to you know, the whole point here is long term. 191 00:10:03,120 --> 00:10:05,439 Speaker 1: So I would say we're going through a jittery period now, 192 00:10:05,480 --> 00:10:07,800 Speaker 1: as we should be, as we have this transition to 193 00:10:07,840 --> 00:10:12,040 Speaker 1: higher rates. As I've said before, we don't expect a 194 00:10:12,160 --> 00:10:15,080 Speaker 1: terrible recession whenever it comes. We think there's a you know, 195 00:10:15,080 --> 00:10:17,520 Speaker 1: we'll have a sort of garden variety recession as opposed 196 00:10:17,559 --> 00:10:20,679 Speaker 1: to something more dramatic than that. So trying to time 197 00:10:20,720 --> 00:10:24,400 Speaker 1: these things is really not wise. And therefore, um, you know, 198 00:10:24,480 --> 00:10:28,199 Speaker 1: staying with an equity allocation uh and and some diversifiers 199 00:10:28,200 --> 00:10:30,520 Speaker 1: and some bonds, I would still argue makes enormous sense 200 00:10:30,559 --> 00:10:33,680 Speaker 1: because you know, you want your bonds protection against stocks 201 00:10:33,679 --> 00:10:36,199 Speaker 1: when the downturn comes, even though you're getting very little 202 00:10:36,200 --> 00:10:40,280 Speaker 1: return in the near term. But you know there are 203 00:10:40,360 --> 00:10:43,280 Speaker 1: pockets of opportunity in stocks around the globe and it's 204 00:10:43,280 --> 00:10:45,520 Speaker 1: silly to get out of them. Do you think that 205 00:10:45,640 --> 00:10:48,920 Speaker 1: bonds still have that risk mitigation characteristic that they used 206 00:10:48,920 --> 00:10:50,840 Speaker 1: to have, because right now bonds and stocks are moving 207 00:10:50,880 --> 00:10:54,240 Speaker 1: in lockstep. Yeah. So clearly everybody looks at the correlation 208 00:10:54,280 --> 00:10:56,640 Speaker 1: of stocks and bonds, and we have seen you know, 209 00:10:56,679 --> 00:10:59,400 Speaker 1: a higher moving in the same direction I just said recently, 210 00:10:59,640 --> 00:11:02,040 Speaker 1: but that short term, right, you know, and when as 211 00:11:02,160 --> 00:11:04,920 Speaker 1: rates move up, it gives more room for rates to 212 00:11:05,080 --> 00:11:08,920 Speaker 1: come down when stock did or start to surface. Um, 213 00:11:09,000 --> 00:11:12,200 Speaker 1: I mean astiple bonds in particular have held up better 214 00:11:12,240 --> 00:11:15,120 Speaker 1: than taxable bonds in the past several quarters, as they 215 00:11:15,160 --> 00:11:18,800 Speaker 1: always do. And therefore, you know, having bonds, as I 216 00:11:18,800 --> 00:11:22,199 Speaker 1: always say, the cheapest invest against defense against the volatility 217 00:11:22,240 --> 00:11:25,160 Speaker 1: stock still makes sense. Okay, But then I just looked 218 00:11:25,200 --> 00:11:28,839 Speaker 1: at a large consumer discretion eary or you know, maybe 219 00:11:28,840 --> 00:11:32,120 Speaker 1: it's a staple. There's just flatlined. There's a lot of 220 00:11:32,120 --> 00:11:34,840 Speaker 1: stocks that are flatlushed over the last couple of years. 221 00:11:35,120 --> 00:11:37,360 Speaker 1: Do you buy the flatline or do you buy the 222 00:11:37,400 --> 00:11:39,520 Speaker 1: revenue growth of the text and the rest. That's a 223 00:11:39,559 --> 00:11:43,200 Speaker 1: really good point when you think of how much change 224 00:11:43,400 --> 00:11:45,079 Speaker 1: there is. I don't want to use the word disruption 225 00:11:45,120 --> 00:11:47,560 Speaker 1: because it's so overused, but it is true. There are 226 00:11:47,600 --> 00:11:51,760 Speaker 1: many companies who have flatline because investors are appropriately questioning 227 00:11:51,800 --> 00:11:54,600 Speaker 1: whether they can figure out how to move forward and 228 00:11:54,640 --> 00:11:56,400 Speaker 1: how to move forward on revenue, how to move forward 229 00:11:56,440 --> 00:11:59,240 Speaker 1: on revenue growth. So look at you mentioned Staples. Think 230 00:11:59,280 --> 00:12:02,720 Speaker 1: about old line food companies. We all know that millennials 231 00:12:02,720 --> 00:12:05,720 Speaker 1: are not buying packaged foods off the shelf in the grocery. 232 00:12:06,400 --> 00:12:08,600 Speaker 1: You see. I mean, it's worse than David grow John. 233 00:12:08,960 --> 00:12:10,840 Speaker 1: The amount of kill you have in your kitchen. I 234 00:12:10,920 --> 00:12:13,199 Speaker 1: was in your kitchen the other day. It's just sick. 235 00:12:13,440 --> 00:12:16,319 Speaker 1: He's got like you know in the old days, you 236 00:12:16,559 --> 00:12:22,439 Speaker 1: have like twelve Jenny Creamhill in your refrigerator. Kale and 237 00:12:23,240 --> 00:12:27,480 Speaker 1: we got it right. There's a couple of ponies. They 238 00:12:27,559 --> 00:12:29,440 Speaker 1: used to be. They used to be more peronnies in 239 00:12:29,440 --> 00:12:33,080 Speaker 1: that fridge than they were after you came in. That's 240 00:12:33,080 --> 00:12:37,079 Speaker 1: true cat fishing that I do. I just say clearly, 241 00:12:37,120 --> 00:12:38,840 Speaker 1: if you're in the package goods business or any of 242 00:12:38,840 --> 00:12:42,240 Speaker 1: these others, it's a real problem. Okay, you're in the 243 00:12:42,240 --> 00:12:44,920 Speaker 1: package good business. But the bottom line is, and this 244 00:12:45,000 --> 00:12:47,319 Speaker 1: goes back to the Nobel Prize winners and Paul Romer 245 00:12:47,360 --> 00:12:52,000 Speaker 1: with a great article two years ago on scale, everybody 246 00:12:52,080 --> 00:12:55,920 Speaker 1: wants scale now and is the real opportunity this this 247 00:12:56,200 --> 00:13:00,400 Speaker 1: agglomeration we're gonna have of low revenue growth companies in 248 00:13:00,440 --> 00:13:05,280 Speaker 1: the next five years. No, because remember there's changing business 249 00:13:05,320 --> 00:13:08,160 Speaker 1: models across the board, and I don't think we should 250 00:13:08,160 --> 00:13:11,440 Speaker 1: assume just one thing at all. There's lots of change 251 00:13:11,480 --> 00:13:14,480 Speaker 1: across many industries, and those who are figuring it out 252 00:13:14,520 --> 00:13:17,680 Speaker 1: are indeed getting some advantage. You know, people will pay 253 00:13:17,760 --> 00:13:20,360 Speaker 1: for perceived value, and we have to keep remembering that 254 00:13:20,400 --> 00:13:22,440 Speaker 1: it's not always a race to the bottom, but rather 255 00:13:22,480 --> 00:13:23,800 Speaker 1: what do you what do you think you're getting for 256 00:13:23,880 --> 00:13:26,040 Speaker 1: your dollar? Timely as we go to the end of 257 00:13:26,040 --> 00:13:29,600 Speaker 1: the years, people look at double digit returns. I love 258 00:13:29,720 --> 00:13:32,360 Speaker 1: I love saying that, John, because everything was such a 259 00:13:32,400 --> 00:13:36,439 Speaker 1: single digit the world coming to an incertitude in on 260 00:13:36,679 --> 00:13:38,560 Speaker 1: nine and ten as well. It's that kind of gloomed 261 00:13:38,559 --> 00:13:43,480 Speaker 1: this morning though to Tom the IMF report, the report's 262 00:13:43,960 --> 00:13:47,240 Speaker 1: Indian Indonesia to new weakness as well Kethy Fisher with 263 00:13:47,280 --> 00:13:50,200 Speaker 1: Bernstein on what really matters, which is like how are 264 00:13:50,200 --> 00:14:02,839 Speaker 1: you doing around the kitchen table as well with the 265 00:14:02,880 --> 00:14:06,840 Speaker 1: sanest fairy focus former finance Minister of Greece and I 266 00:14:06,880 --> 00:14:08,760 Speaker 1: guess you're honest. You could go back to October of 267 00:14:08,840 --> 00:14:11,839 Speaker 1: nineteen forties, sort of a prelude to World War to 268 00:14:12,000 --> 00:14:15,480 Speaker 1: the Greco Hoelian War where you know everybody was upset 269 00:14:15,559 --> 00:14:19,800 Speaker 1: in the Balkans and the campaign of early World War Two. 270 00:14:20,160 --> 00:14:24,200 Speaker 1: What can Italy in two thousand eighteen learn from Greece? 271 00:14:24,520 --> 00:14:28,440 Speaker 1: What's the best and worst practice you lived that Italy 272 00:14:28,480 --> 00:14:34,520 Speaker 1: needs to know now? Is they battle Germany? The lesson 273 00:14:34,600 --> 00:14:39,880 Speaker 1: number one is that Italy is simply not sustainable within 274 00:14:39,920 --> 00:14:43,480 Speaker 1: the current set of rules of the Eurozone, and any 275 00:14:43,520 --> 00:14:47,400 Speaker 1: attempts to try to just bend those rules without changing 276 00:14:47,480 --> 00:14:52,400 Speaker 1: them as a result of a structure process of negotiation 277 00:14:52,600 --> 00:14:56,840 Speaker 1: involving Avcumbus as well, it's going to pay a succession 278 00:14:56,840 --> 00:14:59,760 Speaker 1: of Italian government, not just this one. The previous one 279 00:15:00,880 --> 00:15:04,240 Speaker 1: was going to Berlin, going to Brussels demanding their rights 280 00:15:04,360 --> 00:15:06,600 Speaker 1: to bend the rules. That is never going to work. 281 00:15:07,200 --> 00:15:10,880 Speaker 1: But what Italy can do and must do for the 282 00:15:10,880 --> 00:15:13,480 Speaker 1: benefit not only of the Italian economy but also of 283 00:15:13,560 --> 00:15:16,920 Speaker 1: Europe as a whole, is for this It's Prime Minister 284 00:15:17,200 --> 00:15:21,120 Speaker 1: to demand of Brussels a European the convening of a 285 00:15:21,160 --> 00:15:25,280 Speaker 1: European Union Council meeting to discuss rules that make no sense, 286 00:15:25,480 --> 00:15:28,160 Speaker 1: and which are being violated left a rate in center anyway, 287 00:15:28,200 --> 00:15:30,520 Speaker 1: because they don't make any sense that there are things 288 00:15:30,600 --> 00:15:34,440 Speaker 1: that the number one priority of any sensible rational government 289 00:15:34,440 --> 00:15:39,040 Speaker 1: in Italy and indeed anywhere else in Europe, Professor of 290 00:15:39,040 --> 00:15:46,240 Speaker 1: our focus, Will Greece ever recover, Oh yes, we will recover, 291 00:15:46,440 --> 00:15:49,040 Speaker 1: no doubt about that. We have had, you know, thousands 292 00:15:49,040 --> 00:15:52,800 Speaker 1: of years of trials and tribulations were very good at 293 00:15:52,880 --> 00:15:58,160 Speaker 1: squeezing hope out of music and overcoming crisis. We've overcome 294 00:15:58,400 --> 00:16:02,080 Speaker 1: the years of the automan orcupation, We've overcome the not 295 00:16:02,240 --> 00:16:06,240 Speaker 1: you occupation, We've overcome civil wars. We will overcome. But 296 00:16:07,360 --> 00:16:11,000 Speaker 1: the tragedy is that this is an unnecessary crisis. This 297 00:16:11,160 --> 00:16:16,200 Speaker 1: crisis presently is causing the desertification of the country. We 298 00:16:16,360 --> 00:16:21,360 Speaker 1: have something around tend to fifteen thousand young, well educated 299 00:16:21,760 --> 00:16:26,080 Speaker 1: UH men and women leaving the country emigrating and this 300 00:16:26,200 --> 00:16:28,120 Speaker 1: is as you can understand, this is the loss of 301 00:16:28,400 --> 00:16:32,000 Speaker 1: crucial human capital for a small country like Greece, and 302 00:16:32,400 --> 00:16:35,160 Speaker 1: were affecting in to lose two generations and we're going 303 00:16:35,200 --> 00:16:39,200 Speaker 1: to fall behind historically, and it is completely unnecessary. But 304 00:16:39,200 --> 00:16:40,760 Speaker 1: to answer your question, what needs to be done. It's 305 00:16:40,760 --> 00:16:44,240 Speaker 1: really very simple. We have an insolvency which we keep 306 00:16:44,320 --> 00:16:48,680 Speaker 1: looking at as an liquidity problem. Unless we restructure our 307 00:16:48,720 --> 00:16:51,280 Speaker 1: private and public debt, there is great to be no 308 00:16:51,400 --> 00:16:54,920 Speaker 1: solution in the foreseeable future. I want to interject here 309 00:16:55,000 --> 00:16:57,640 Speaker 1: with dry focus, that that is a court thesis of 310 00:16:57,680 --> 00:17:01,440 Speaker 1: two lightweights in economics US why Plants of Geneva and 311 00:17:01,480 --> 00:17:04,959 Speaker 1: again named the Pauldiguerre at the London School of Economics 312 00:17:05,119 --> 00:17:08,879 Speaker 1: in feed Well. Just to continue on this theme, and 313 00:17:08,920 --> 00:17:13,320 Speaker 1: I'm wondering if you can provide some maybe even anecdotal descriptions. 314 00:17:14,119 --> 00:17:17,880 Speaker 1: Is dealing with the European Union different in private than 315 00:17:18,000 --> 00:17:24,480 Speaker 1: we see in public? Absolutely? Yes, you know, some people 316 00:17:24,520 --> 00:17:27,520 Speaker 1: ask me, many people ask me, how do I seem 317 00:17:27,560 --> 00:17:31,520 Speaker 1: so certain that I was following the right past when 318 00:17:31,560 --> 00:17:35,239 Speaker 1: I was negotiating on the on Greece. How did I 319 00:17:35,640 --> 00:17:39,000 Speaker 1: there even go with James the powers that be against 320 00:17:39,359 --> 00:17:42,679 Speaker 1: La God, the International Monterey Fund while you're dragging the 321 00:17:42,680 --> 00:17:46,520 Speaker 1: European Central Bank, the European Commission, the German I'll tell 322 00:17:46,520 --> 00:17:50,960 Speaker 1: you why, because in our private discussions behind closed doors, 323 00:17:51,320 --> 00:17:53,520 Speaker 1: none of them, none of them, ever looked at me 324 00:17:53,560 --> 00:17:56,040 Speaker 1: in the eye and say that that was wrong, not one. 325 00:17:56,760 --> 00:18:00,119 Speaker 1: They all agreed with the basic tenet, the one that's 326 00:18:00,160 --> 00:18:02,639 Speaker 1: presented to you a moment ago, that unless we started 327 00:18:02,680 --> 00:18:05,320 Speaker 1: to Greece's death, there is no solution, even the I 328 00:18:05,440 --> 00:18:08,840 Speaker 1: m F a Gri in public. But they would say 329 00:18:08,880 --> 00:18:12,760 Speaker 1: this to mean in private and in public they suddenly 330 00:18:12,840 --> 00:18:18,600 Speaker 1: there was a complete alternative universe. I mean exactly the opposite. Yeah, 331 00:18:18,680 --> 00:18:22,520 Speaker 1: you're honestly. I want you to speak of a moment 332 00:18:22,560 --> 00:18:26,639 Speaker 1: where even America was frozen within Greek culture. Which is 333 00:18:26,640 --> 00:18:30,320 Speaker 1: the movie Z, the Costas Gravis movie of the late sixties, 334 00:18:30,359 --> 00:18:33,520 Speaker 1: the movie Z, which folks was a rare movie, and 335 00:18:33,520 --> 00:18:36,600 Speaker 1: that it was nominated Best Foreign Film and also Best 336 00:18:36,600 --> 00:18:39,879 Speaker 1: Picture by the Academy Award. All that's great. And as 337 00:18:39,920 --> 00:18:42,480 Speaker 1: a kid, I sat in the movie theater honest and 338 00:18:42,560 --> 00:18:46,399 Speaker 1: watched it as a pampered American kid. You lived it 339 00:18:46,880 --> 00:18:50,760 Speaker 1: and your parents lived it. Why isn't that anger there 340 00:18:50,800 --> 00:18:53,320 Speaker 1: now in Greece? Why don't we have more of a 341 00:18:53,480 --> 00:18:59,760 Speaker 1: Z attitude within the periphery of Europe? Well, the rea isn't. 342 00:18:59,760 --> 00:19:02,720 Speaker 1: It's that we did have this spate of anger. We 343 00:19:02,840 --> 00:19:08,400 Speaker 1: had ninety nights nights in two thousand and eleven when 344 00:19:08,440 --> 00:19:11,719 Speaker 1: we had something like between a hundred thousand, hundred twenty 345 00:19:11,720 --> 00:19:15,880 Speaker 1: thousand people occupying the main square of Artens every night 346 00:19:16,040 --> 00:19:20,040 Speaker 1: for ninety consecutive nights. We've been through this, uh, and 347 00:19:20,080 --> 00:19:23,840 Speaker 1: you do thousand and that movement led to our government 348 00:19:23,880 --> 00:19:27,840 Speaker 1: being elected with a very clear mandate to just to 349 00:19:28,640 --> 00:19:30,879 Speaker 1: do the rational thing, to go to our creators and 350 00:19:30,920 --> 00:19:33,119 Speaker 1: say no more, We're not going to borrow more money 351 00:19:33,119 --> 00:19:37,000 Speaker 1: from you, pretending that we are repaying. And unfortunately, our 352 00:19:37,040 --> 00:19:40,280 Speaker 1: own government went back on its word and we This 353 00:19:40,440 --> 00:19:43,560 Speaker 1: was the first first occasion I know of where a 354 00:19:43,680 --> 00:19:47,080 Speaker 1: government overthrew its people in the summer of the thousand. 355 00:19:47,520 --> 00:19:51,360 Speaker 1: So people are now licking their wounds in their own homes, 356 00:19:51,440 --> 00:19:54,439 Speaker 1: trying to make ends meet. The anger is there and 357 00:19:54,480 --> 00:19:56,520 Speaker 1: it is palpable, but you don't You won't see it 358 00:19:56,560 --> 00:19:58,560 Speaker 1: in the fall of denstations. But allow me to make 359 00:19:58,600 --> 00:20:02,160 Speaker 1: one final comment, because this is something that I feel 360 00:20:02,200 --> 00:20:06,359 Speaker 1: bass out and very improved by. You mentioned Costa gos 361 00:20:06,440 --> 00:20:09,840 Speaker 1: movie that which was crucial to people like me growing 362 00:20:09,920 --> 00:20:13,919 Speaker 1: up in the nineties and seventies. Costa Govers is alive 363 00:20:14,040 --> 00:20:17,480 Speaker 1: well and he is in the process of filming my 364 00:20:17,720 --> 00:20:20,800 Speaker 1: latest book, Out of the Room, which is my account 365 00:20:20,800 --> 00:20:23,479 Speaker 1: of what happened when I went up. That is wonderful here, 366 00:20:23,520 --> 00:20:26,560 Speaker 1: jannest Fairy Focus, thank you so much, greatly appreciate it 367 00:20:26,600 --> 00:20:30,359 Speaker 1: this morning, the former finance Minister of his Greece, and 368 00:20:30,400 --> 00:20:47,560 Speaker 1: of course also UH professor right now lost in translation. 369 00:20:48,280 --> 00:20:52,800 Speaker 1: We consider the diplomacy the dialogue of America and China. 370 00:20:52,960 --> 00:20:56,800 Speaker 1: We do this with James Trevidus of Tough University, of 371 00:20:56,840 --> 00:21:00,119 Speaker 1: the Fletcher School, Deans Trevinus, of course, UH work a 372 00:21:00,200 --> 00:21:02,240 Speaker 1: tour of duty, a set of tours of duty for 373 00:21:02,320 --> 00:21:05,120 Speaker 1: the Navy is well appals to be. This is wonderful 374 00:21:05,119 --> 00:21:08,399 Speaker 1: to speak to you again. I was stunned by not 375 00:21:09,000 --> 00:21:13,119 Speaker 1: the moment of harsh language between America and particularly China 376 00:21:13,600 --> 00:21:16,639 Speaker 1: speaking to America in the last forty eight hours, but 377 00:21:16,760 --> 00:21:21,119 Speaker 1: the set of harsh languages admiral to the set of 378 00:21:21,920 --> 00:21:25,359 Speaker 1: harsh words that we had from China. Is it unprecedented? 379 00:21:25,400 --> 00:21:29,320 Speaker 1: Put it in perspective, It is not unprecedented. And we've 380 00:21:29,320 --> 00:21:34,200 Speaker 1: seen similar cratering of relationships across history. We've seen them 381 00:21:34,240 --> 00:21:38,480 Speaker 1: with Russia, We've seen them with former allies at the 382 00:21:38,560 --> 00:21:41,520 Speaker 1: end of the Second World War. Not unprecedented. But we 383 00:21:41,560 --> 00:21:45,320 Speaker 1: are sailing into dangerous waters with China. Tom, It's not 384 00:21:45,400 --> 00:21:48,200 Speaker 1: just trade, it's also the dispute over the South China Sea. 385 00:21:49,119 --> 00:21:51,800 Speaker 1: I'm wondering, Admiral, if we could just shift your attention 386 00:21:51,880 --> 00:21:55,800 Speaker 1: to another part of the geopolitical world, and that is Syria, Iran, 387 00:21:56,119 --> 00:21:59,640 Speaker 1: Russia and the Middle East. I know that you're probably 388 00:21:59,680 --> 00:22:03,320 Speaker 1: away air that Moscow has already announced that it will 389 00:22:03,359 --> 00:22:07,760 Speaker 1: supply what are called S three A defense missiles to Syria, 390 00:22:08,240 --> 00:22:11,720 Speaker 1: but the news is that they will be manned by 391 00:22:11,880 --> 00:22:17,679 Speaker 1: Iranian soldiers that are trained by Russia. If true, what 392 00:22:17,840 --> 00:22:20,760 Speaker 1: does this indicate to you and what does the future 393 00:22:21,240 --> 00:22:25,840 Speaker 1: hold for that region? I think I see continuing conflict 394 00:22:26,280 --> 00:22:31,119 Speaker 1: between Iran, which is Shia, of course, and has aspirations 395 00:22:31,160 --> 00:22:36,120 Speaker 1: of reconstituting a Persian empire in Saudi Arabia led by 396 00:22:36,160 --> 00:22:40,720 Speaker 1: a dynamic young crown Prince Sunni, which is going to 397 00:22:40,800 --> 00:22:44,280 Speaker 1: push back enormously. Parked in the middle of it. Your point, 398 00:22:44,320 --> 00:22:48,800 Speaker 1: tim is Russia and Vladimir Putin is playing a weekend 399 00:22:48,880 --> 00:22:52,199 Speaker 1: of cards very well. He will continue to align with 400 00:22:52,240 --> 00:22:56,800 Speaker 1: Iran with the remnants of Syria, and that will be 401 00:22:57,240 --> 00:23:01,040 Speaker 1: a flashpoint for the conflict going forward. Did dynamic young 402 00:23:01,200 --> 00:23:04,720 Speaker 1: Prince have his world changed in the last seventy two 403 00:23:04,720 --> 00:23:09,200 Speaker 1: hours with the murder of the reporter in Istanbul. We 404 00:23:09,240 --> 00:23:12,800 Speaker 1: will find out more and if true, that is an 405 00:23:12,880 --> 00:23:17,280 Speaker 1: unconscionable and an unbelievably reckless act. What's the history of 406 00:23:17,280 --> 00:23:19,640 Speaker 1: the United States? Were reacting in the tone and language 407 00:23:19,640 --> 00:23:23,680 Speaker 1: of James de Vitas, it is not strong. However, within 408 00:23:23,720 --> 00:23:26,800 Speaker 1: the last hour we've seen Secretary Pompeio come out with 409 00:23:26,840 --> 00:23:30,200 Speaker 1: some very strong words. We're seeing Great Britain coming out 410 00:23:30,240 --> 00:23:34,560 Speaker 1: with very strong words demanding an investigation. Be Tom, you 411 00:23:34,640 --> 00:23:38,280 Speaker 1: know you're in trouble when your advocate is urdu Wan. 412 00:23:38,560 --> 00:23:41,720 Speaker 1: It's urd one who was pushing Uh to find out 413 00:23:41,760 --> 00:23:46,679 Speaker 1: what happened. I think we're gonna see a thorough investigation. 414 00:23:47,119 --> 00:23:49,600 Speaker 1: The Saudis are going to have to answer for this. Well, 415 00:23:49,640 --> 00:23:52,680 Speaker 1: just to give the details that Mr Vitas, Turkish President 416 00:23:52,880 --> 00:23:57,480 Speaker 1: Urdawan said that Saudi Arabia should prove that the missing 417 00:23:57,480 --> 00:24:02,480 Speaker 1: Saudi journalist Jamal Kashagi has in fact left the Saudi 418 00:24:02,520 --> 00:24:08,679 Speaker 1: consulate in Istanbul. What sorry go ahead? Indeed, this is 419 00:24:08,720 --> 00:24:12,800 Speaker 1: what staggers the imagination any intelligence service in the world. 420 00:24:12,960 --> 00:24:16,000 Speaker 1: And if the Saudis killed this journalist it would have 421 00:24:16,040 --> 00:24:19,320 Speaker 1: been their intelligence service. Any one of them would know 422 00:24:19,560 --> 00:24:22,399 Speaker 1: that to do it in a place like an embassy, 423 00:24:22,440 --> 00:24:26,560 Speaker 1: a consulate which is surrounded by twenty four seven security 424 00:24:26,640 --> 00:24:31,800 Speaker 1: would be unbelievably foolish as well as being unconscionable and reckless. 425 00:24:31,840 --> 00:24:34,160 Speaker 1: To what we've talked about ed on the last four 426 00:24:34,200 --> 00:24:38,679 Speaker 1: minutes is the cacophony of the moment. How do we 427 00:24:38,840 --> 00:24:44,919 Speaker 1: find stability within these disparent stories. We have to put 428 00:24:44,960 --> 00:24:48,479 Speaker 1: our faith in our values, Tom, and it's fashionable at 429 00:24:48,480 --> 00:24:52,840 Speaker 1: the moment to see all of this as the insurmountable 430 00:24:52,960 --> 00:25:00,480 Speaker 1: rise of a new kind of fascism, return of style, authority, arianism. 431 00:25:00,600 --> 00:25:03,399 Speaker 1: We need to push back from that collectively. Okay, this 432 00:25:03,440 --> 00:25:05,359 Speaker 1: is important because you're not aware of this, Almal, but 433 00:25:05,400 --> 00:25:08,760 Speaker 1: we just were honored with the attendance of Jana's Vera Facus, 434 00:25:08,800 --> 00:25:12,399 Speaker 1: who wrote a blistering article on fascism which frankly his 435 00:25:12,760 --> 00:25:16,640 Speaker 1: parents lived in the sixties in The Guardian, oh eight 436 00:25:16,640 --> 00:25:20,280 Speaker 1: weeks ago or so let us frame right now how 437 00:25:20,320 --> 00:25:25,600 Speaker 1: you're teaching fascism at the Fletchers School. How immediate is it? 438 00:25:25,640 --> 00:25:28,640 Speaker 1: Is it a neo fascism, is it a fascism light 439 00:25:28,960 --> 00:25:31,720 Speaker 1: or is that not even the appropriate word. I think 440 00:25:31,720 --> 00:25:34,120 Speaker 1: it is the appropriate word. And here the book i'd 441 00:25:34,160 --> 00:25:37,760 Speaker 1: recommend Tom, you and I often do book recommendations. Madeline 442 00:25:37,760 --> 00:25:42,400 Speaker 1: Albright's new book Fascism A Warning, And that's how it's 443 00:25:42,400 --> 00:25:44,960 Speaker 1: being taught at the Fletcher School. You have to look 444 00:25:44,960 --> 00:25:47,719 Speaker 1: at the lessons of history in the thirties and not 445 00:25:47,840 --> 00:25:50,879 Speaker 1: allow that kind of rise of fascism which created the 446 00:25:50,920 --> 00:25:53,800 Speaker 1: Second World War. And I editorialize your Pim that both 447 00:25:54,040 --> 00:25:57,800 Speaker 1: Secretary Albright and Mr very Facus had the advantage of 448 00:25:57,800 --> 00:26:01,400 Speaker 1: growing up in the crucible exactly of twentieth century Europe 449 00:26:01,440 --> 00:26:04,040 Speaker 1: that was distant for Stevinus and me. I don't know 450 00:26:04,080 --> 00:26:05,679 Speaker 1: about you, Pim. I mean, you grew up in the 451 00:26:05,680 --> 00:26:10,480 Speaker 1: trauma of midtown Manhattan, so that's probably well, we won't 452 00:26:10,520 --> 00:26:16,119 Speaker 1: go into that. And Admiral Stevitas the speak of you 453 00:26:16,160 --> 00:26:19,959 Speaker 1: can about the disposition of US military forces at the 454 00:26:20,440 --> 00:26:25,120 Speaker 1: at the current time and whether they are really situated 455 00:26:25,160 --> 00:26:29,160 Speaker 1: to deal with all of these variety of threats. They 456 00:26:29,160 --> 00:26:35,160 Speaker 1: are well positioned globally, Tim. What I worry about is capacity. 457 00:26:35,800 --> 00:26:39,359 Speaker 1: We can certainly handle one significant crisis, say a war 458 00:26:39,440 --> 00:26:43,800 Speaker 1: on the Korean Peninsula or a war against Iran. Let's 459 00:26:43,800 --> 00:26:47,440 Speaker 1: hope we have neither of those. But I am concerned 460 00:26:47,440 --> 00:26:52,199 Speaker 1: about capacity in handling more than one gets us to 461 00:26:52,320 --> 00:26:56,160 Speaker 1: the need for allies, partners, friends, add wrong with great 462 00:26:56,200 --> 00:26:59,000 Speaker 1: respect for your public service, and you've I talked before 463 00:26:59,040 --> 00:27:01,080 Speaker 1: about you know, we're sort of the same age where 464 00:27:01,080 --> 00:27:04,080 Speaker 1: you jumped into this when it was most unpopular to 465 00:27:04,160 --> 00:27:11,040 Speaker 1: join the Navy Afghanistan. Nathan Chapman ninth. You know, first 466 00:27:11,080 --> 00:27:16,040 Speaker 1: person killed in Afghanistan and it's been seventeen years from 467 00:27:16,119 --> 00:27:20,000 Speaker 1: Nathan Chapman, just as a general statement across all the 468 00:27:20,000 --> 00:27:22,760 Speaker 1: politics of this nation, what are we doing in the 469 00:27:22,920 --> 00:27:27,760 Speaker 1: seventeen year war? Is this like Germany in the seventeenth century. 470 00:27:28,640 --> 00:27:32,359 Speaker 1: I would say it's time to unwind what we're doing 471 00:27:32,400 --> 00:27:35,440 Speaker 1: in Afghanistan. And it's worth noting to him that when 472 00:27:35,480 --> 00:27:38,400 Speaker 1: I was Supreme Alley Commander, you know, I had one 473 00:27:38,480 --> 00:27:42,400 Speaker 1: hundred and fifty thousand troops in Afghanistan. Today we're down 474 00:27:42,440 --> 00:27:47,200 Speaker 1: to fifteen thousand drop but we're still pushing the Taliban. 475 00:27:47,600 --> 00:27:50,919 Speaker 1: The key is Pakistan. That's why Secretary POMPEII was spending 476 00:27:50,960 --> 00:27:54,120 Speaker 1: a lot of time and thinking about how we get 477 00:27:54,119 --> 00:27:57,360 Speaker 1: the pakistanis to work with US. I think we're at 478 00:27:57,359 --> 00:27:59,760 Speaker 1: a stage where we tend to go right into this 479 00:28:00,160 --> 00:28:03,480 Speaker 1: with the Paliban. That's the way out, with great respect 480 00:28:03,760 --> 00:28:07,720 Speaker 1: for the public service of those in harms. Way, what's 481 00:28:07,800 --> 00:28:11,000 Speaker 1: the difference in our projection if we go from fifteen 482 00:28:11,080 --> 00:28:17,520 Speaker 1: thousand to fourteen thousand Americans in Afghanistan? The difference is 483 00:28:17,680 --> 00:28:23,600 Speaker 1: every decrement is a significant reduction in resources and cost. 484 00:28:24,200 --> 00:28:29,120 Speaker 1: And secondly it is indicative Tom of turning the fight 485 00:28:29,280 --> 00:28:33,480 Speaker 1: over to the Afghanist themselves. Um, they're doing a reasonable 486 00:28:33,560 --> 00:28:38,280 Speaker 1: job pushing back on the Taliban. Almost every insurgency ends 487 00:28:38,360 --> 00:28:41,960 Speaker 1: in a negotiation. This one will to thank you, James 488 00:28:42,040 --> 00:28:50,200 Speaker 1: to vidas with us today. Fletcher of School, thanks for 489 00:28:50,320 --> 00:28:54,720 Speaker 1: listening to the Bloomberg Surveillance podcast. Subscribe and listen to 490 00:28:54,840 --> 00:29:00,600 Speaker 1: interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. 491 00:29:01,160 --> 00:29:04,480 Speaker 1: I'm on Twitter at Tom Keane before the podcast. You 492 00:29:04,520 --> 00:29:07,920 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio.