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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene, along

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jaily. We bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com,

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Speaker 1: and of course on the Bloomberg terminal. Right now, as

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Speaker 1: we consider the distance from Cornwall the Brussels, Robert Horbats

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Speaker 1: joins us. He's a Tideman Advisor's Ambassador Hormats of course

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Speaker 1: his public service to the nation for Republicans and four

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Speaker 1: Democrats as well. Ambassador, Thank you so much for your perspective.

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Speaker 1: Uh this morning, I want to go back to one

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Speaker 1: of the chapters of your wonderful book, The Price of Liberty,

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Speaker 1: The First Great Test? What is the first great test

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Speaker 1: for President Biden when he meets with Mr Putin? Well,

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Speaker 1: he has to demonstrate that the United States is going

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Speaker 1: to be much more resolute in resisting various cyber attacks

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Speaker 1: that come from Russia or are perhaps sponsored by the

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Speaker 1: Russian government. We're trying to sort out which is which,

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Speaker 1: but certainly we have been plagued by lots of cyber

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Speaker 1: problems coming from that country, either directly through the government

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Speaker 1: or indirectly by people on that territory. And these not

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Speaker 1: only are disruptive in themselves, but pretend the prospect of

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Speaker 1: things getting even worse or escalating, and that can be

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Speaker 1: very disruptive to American companies and to the overall American economy.

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Speaker 1: We're very cyber vulnerable because we're so connected. Can we

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Speaker 1: be cyber offensive? I'm sure we have been. I'm also

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Speaker 1: sure that when we do it, we don't say anything.

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Speaker 1: And the reason is that we don't want other countries,

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Speaker 1: not just Russia and any other country understand how we

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Speaker 1: do it, what we're doing, and what our technology is.

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Speaker 1: That we certainly have the technology to be more offensive,

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Speaker 1: and they know that. And I think that there is

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Speaker 1: at least some sense that if they go too far,

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Speaker 1: the United States can take action against them, and it

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Speaker 1: could be very destructive because they have a weaker economy.

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Speaker 1: That the problem is that we're a very connected economy,

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Speaker 1: and therefore a lot of things can happen here in

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Speaker 1: one area, say electricity, which could shut water supplies down,

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Speaker 1: or transit systems down, or energy systems down. So the

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Speaker 1: world's in a very precarious place. If we start getting

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Speaker 1: into cyber attacks on one another, Ambassador, how much unity

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Speaker 1: is there among the G seven, among the G thirty

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Speaker 1: in combating cyber attacks together, in working together to make

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Speaker 1: sure that networks are up to see speed and protected

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Speaker 1: and the information is shared. Well, I would put it

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Speaker 1: this way, we have a long way to go. Um.

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Speaker 1: There are different countries who were vulnerable into a ways

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Speaker 1: as you've seen, some Central and European countries have already

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Speaker 1: born the brunt of this, and there is really not,

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Speaker 1: I think a collective doctrine of collaboration or of what

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Speaker 1: constitutes UH an attack that requires retaliation. The other problem

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Speaker 1: is sourcing and energy at what they call attribution in

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Speaker 1: this world, and you sometimes don't know where the cyber

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Speaker 1: attack actually is coming from or who the perpetrator is,

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Speaker 1: so that makes it more difficult as well. But I

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Speaker 1: think the vulnerabilities are becoming increasingly apparent and there is

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Speaker 1: going to be and there's a NATO is probably the

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Speaker 1: vehicle for doing it, um and for getting this together,

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Speaker 1: but we don't know as much about how these are done,

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Speaker 1: where they're coming from, and we certainly don't have a

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Speaker 1: doctrine of specific retaliation for specific kinds of attacks, but

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Speaker 1: we know things are getting worse and if want to

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Speaker 1: stop them, a we have to improve our defenses, which,

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Speaker 1: as you've seen in certain instances, have not been all

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Speaker 1: that good. In fact, they have been inadequate. And we

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Speaker 1: also need them to know that if they don't deal

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Speaker 1: with things that come from their government or from on

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Speaker 1: their territory, we will have an opportunity and a will

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Speaker 1: to take more action that can be very disruptive to them. Bob,

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Speaker 1: there's a question the reason why I asked that this

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Speaker 1: is not just about cyber but there's a broader point here.

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Speaker 1: Leaving the G seven heading to the NATO summit, there

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Speaker 1: was a lot of disagreement about how hard of a

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Speaker 1: line to take with China, how hard of a line

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Speaker 1: to take with Russia. But my eyes really are on China.

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Speaker 1: Given the predominance in the global economy, where are the

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Speaker 1: biggest question marks there in terms of getting some sort

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Speaker 1: of unified strategy and how to interact with China. It's

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Speaker 1: a great question and there is not a clear answer

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Speaker 1: because the Europeans are concerned with certain things, certainly Chinese

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Speaker 1: trade policy and electoral property protection uh UN level playing

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Speaker 1: field that favors China. These of the American companies, but

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Speaker 1: the European companies. But the problem is that companies in

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Speaker 1: Europe and countries in Europe are very vulnerable. They have

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Speaker 1: become very dependent on the Chinese market. That's been cut

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Speaker 1: back somewhat, but if they take very tough action against China.

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Speaker 1: For instance, German cars, which do very well in China,

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Speaker 1: are vulnerable and other German products. UH. The United States

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Speaker 1: is in a somewhat different position. The Europeans are not

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Speaker 1: so concerned about the strategic strength of China. UH these

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Speaker 1: China see the South China see and many of the

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Speaker 1: geo political and geo strategic issues in the Pacific that

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Speaker 1: we're concerned about don't so much trouble the Europeans. They're

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Speaker 1: more concerned about the human rights issues. They're more concerned

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Speaker 1: about trade issues. They don't want to all out trade

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Speaker 1: war or all out confrontation with China. The United States

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Speaker 1: has a lot of geostrategic and geopolitical issues. We have

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Speaker 1: a navy there. The Europeans don't, so we have a

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Speaker 1: wholly different set of issues. On the strategic side. Were

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Speaker 1: similar to them, and we have similar concerns on the

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Speaker 1: economic side and the human rights side. So my guess

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Speaker 1: is if there's to be some measure of unity, it's

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Speaker 1: really in those areas, not in the geopolitical ones. Um

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Speaker 1: do We're trying to get them to take a tougher

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Speaker 1: line on China, but they are also concerned about their

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Speaker 1: economic vulnerability, and they're much more reticent to do back.

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Speaker 1: Do we risk, by the way, pushing China and Russia

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Speaker 1: closer together? Bob? How strong is that relationship? Well, we've

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Speaker 1: already in part done that because it is I mean,

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Speaker 1: the Europeans, the Russians, and the and the Chinese have

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Speaker 1: had their issues over time. In fact, the first opening

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Speaker 1: between the United States and China came because the Chinese

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Speaker 1: and we perceived a Russian wreck to China along the

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Speaker 1: Assouri River, and there were there were numerous Russian divisions

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Speaker 1: on the Chinese border. So it hasn't been a particularly

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Speaker 1: comfortable relationship from time to time. But now they're beginning

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Speaker 1: to realize that if they want to deal with the

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Speaker 1: United States and resist some American pressures, they're going to

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Speaker 1: probably have to work together. And that's what they're doing.

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Speaker 1: And I do think there is that that has happened

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Speaker 1: already and the risk is that it will happen even

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Speaker 1: even further. The other thing is that other other countries

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Speaker 1: in the middle our field, they don't want to be

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Speaker 1: caught like a lot of the Asians. Between the United States,

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Speaker 1: I wanted to ask about I wanted to ask about that, Bob.

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Speaker 1: The last time I sat on set with Tom Keane

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Speaker 1: in person um there was an attempted coup de eta

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Speaker 1: on air to one which he uh fought back and

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Speaker 1: brushed off pretty quickly. How does Turkey fit into NATO

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Speaker 1: right now? I mean, they do have the second largest

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Speaker 1: army in the alliance, but they don't really see eye

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Speaker 1: to eye with the US. Well, they don't on numerous issues,

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Speaker 1: Syria being one of them, Northern Iraq being another, of

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Speaker 1: the Kurds being another im that's part of the Syria

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Speaker 1: Northern Iraq issue. On the other hand, the Turks are

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Speaker 1: extremely valuable. Their bases are very important to the United

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Speaker 1: States in in resisting Russian pressure. M the Turks have

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Speaker 1: made are Towan and proven have both made efforts to

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Speaker 1: try to improve relations, which they have done, but they

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Speaker 1: still want and the assurance that the United States is

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Speaker 1: going to be there if relations with the Russians deteriorate.

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Speaker 1: I think that that question that you've asked is an

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Speaker 1: important one. Are we going to be and is Natio

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Speaker 1: going to be resolute with Putin moving more and more

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Speaker 1: troops up into Central Europe? Not across the border um

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Speaker 1: necessarily although, but the troops have gone many troops have

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Speaker 1: gone up close to the border. So there's a feeling

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Speaker 1: among unease among the NATO countries. I think one of

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Speaker 1: the tests in the NATO summit today is going to

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Speaker 1: be are we all committed to Article five? And what

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Speaker 1: would we do if there were incursions in Article five countries,

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Speaker 1: that is to say, NATO countries, and what will we

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Speaker 1: do if their incursions into other countries that are not

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Speaker 1: in NATO but whose interests are important in the United States.

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Speaker 1: So the question of how do you convinced Putin to

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Speaker 1: be restrained um is is going to be a critical one.

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Speaker 1: And other ways of improving relations with Russia over the

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Speaker 1: next several years. The Europeans would like that to see

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Speaker 1: that you see that happen. Also, we're out of time,

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Speaker 1: we'll do it again, Robert Hormace, thank you so much,

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Speaker 1: Ambassador Harmats of the time and advisors and I shoul't

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Speaker 1: say enough about his books on the United States and

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Speaker 1: our diplomacy. Let's dive into this right now on a

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Speaker 1: Monday reset as you reset to get the fourth of July,

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Speaker 1: we're watching the affairs of NATO to bring it up

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Speaker 1: to speed there. Excuse me, I'm gasping over the length

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Speaker 1: of the carpet, uh, to talk of NATO. We had

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Speaker 1: the photo shoot, we had the great meet and greet

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Speaker 1: that looks sort of Hollywood is to say the least.

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Speaker 1: And maybe now we go into individual discussions UH to

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Speaker 1: be had in NATO bilaterals as they call him. The

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Speaker 1: President meets with Mr Putin Mr Putin out on NBC

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Speaker 1: UH in the last number of hours, making for some

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Speaker 1: very tough language there on how he sets up his

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Speaker 1: meeting with the President of the United States. Tough language

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Speaker 1: down from Brian Nick of now Vine as we try

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Speaker 1: to get out of our way in the market. Brian,

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Speaker 1: how do you frame and I mean New Vine is

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Speaker 1: known as a buy house, but you do a lot

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Speaker 1: of equity as well, how do you frame the mystery

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Speaker 1: of Q three in Q four earnings? Yeah, we're actually

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Speaker 1: just starting to write about this for a major outlook

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Speaker 1: and we want to get out here is how how

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Speaker 1: are things going versus how is the market expecting them

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Speaker 1: to go? So the first half was all about exceeding expectations,

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Speaker 1: earnings beating expectations, economic data beating expectations, vaccinations and the

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Speaker 1: vaccines themselves being more effective and more widespread and distributed

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Speaker 1: than expected. I think now we're getting to this point

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Speaker 1: where the markets and the economy overall are starting to

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Speaker 1: just merely meet expectations. And that's why you've seen a bit,

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Speaker 1: I think of a of a tapering back in the tenure.

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Speaker 1: I think you've seen a bit of a flattening out

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Speaker 1: in terms of the pace of increases in the equity markets,

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Speaker 1: and about the pace of sort of the narrowing and

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Speaker 1: spreads and the credit markets. Everything has sort of come

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Speaker 1: to a not quite a crawl, but maybe something you know,

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Speaker 1: asymptotically approaching some equilibrium level until we get new news.

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Speaker 1: How is the second half of the year going to go.

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Speaker 1: I think obviously what we're expecting is fewer surprises then

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Speaker 1: we've gotten in the last couple of quarters from earning season,

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Speaker 1: and that probably has you know, some some relation to

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Speaker 1: what's going on in the bond markets as well. With

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Speaker 1: the tenure having come often with the fat I think

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Speaker 1: it's expected to remain quite dubbish on June. I think

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Speaker 1: in the June meeting, I think if they say anything hawkeys,

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Speaker 1: it will be a mistake. So, Brian, give us the

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Speaker 1: distinction between successful and beating expectations and disappointing expectations. Is

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Speaker 1: it companies that have pricing power that can raise prices

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Speaker 1: on consumers to meet some of the supply chain disruptions

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Speaker 1: and the higher commodity prices, or is it simply being

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Speaker 1: big tech and everyone eating an iPhone. Yeah, that's certainly

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Speaker 1: the pattern we're used to. Right when they were the

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Speaker 1: world is sort of decelerating that sort of text moment

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Speaker 1: to shine, and every time you've seen interest rates come

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Speaker 1: back at the same time as earnings have started to

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Speaker 1: decelerate back or maybe not beat as reliably, that's been

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Speaker 1: a really good time to be in tech. And so

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Speaker 1: we've been pretty neutral between the the ultracyclical deep value

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Speaker 1: and then the sort of the higher growth defensives. We're

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Speaker 1: kind of spread out across the board there because again

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Speaker 1: we're obviously, you know, leaning into the uncertainty of bit

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Speaker 1: but also looking for a pretty um, you know, sharp

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Speaker 1: and and noticeable deceleration in economic out in the US. Overseas, though,

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Speaker 1: I think we're still waiting for peak economic growth. We're

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Speaker 1: waiting for peak growth in Europe, the UK, later in

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Speaker 1: the eur Asia and emerging markets as they get themselves vaccinated.

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Speaker 1: So there could be a bit of a rotation here

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Speaker 1: as investors look for where are we still seeing the

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Speaker 1: news being expectations? They could be looking outside the United States? Brian,

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Speaker 1: are you concerned it all here? I guess about the

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Speaker 1: inability to I guess properly forecast some of the economic

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Speaker 1: trends out there, We're starting to see a lot more

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Speaker 1: sort of uh, I guess surprises, if you will, at

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Speaker 1: least as far as what a certain economists and certain

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Speaker 1: strategies on the street are expecting with regards something to

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Speaker 1: the economic data points, not only here in the US,

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Speaker 1: but really overseas as well. Do you think that that

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Speaker 1: could end up creating a little bit more volatility as

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Speaker 1: we go forward. I think certainly outside the US we're

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Speaker 1: still seeing most of the data coming in better than expected.

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Speaker 1: I think if you've got an economic model that's worked

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Speaker 1: for the last seven recessions. It probably didn't work very

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Speaker 1: well for this one because more like a light switch

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Speaker 1: getting turned off and turned back on. So most of

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Speaker 1: the data, especially with all the stimulus, with the back

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Speaker 1: and nations being is completely you know, unique variable to

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Speaker 1: this recession. I think that has caused a lot of

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Speaker 1: the economy economic forecasting to be you know, too low.

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Speaker 1: And I think we're starting to see that overseas more

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Speaker 1: as well. In the US, we've actually seen the surprise

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Speaker 1: indexes that we track UM coming back down to close

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Speaker 1: to neutral UM. So it's this is the housing market is,

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Speaker 1: you know, showing signs of maybe just cooling off just

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Speaker 1: a bit. Consumer is not gonna be as hot without

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Speaker 1: the stimulus moving forward, it should be easier to forecast

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Speaker 1: these things once we get all these kind of strange

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Speaker 1: and unique variables out of the way. Brian, the calculus

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Speaker 1: off of pre pandemic is standard and pours five undered

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Speaker 1: up thirty sort of a blended bond event up three percent.

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Speaker 1: You made the coupon and a tenC weens bit of

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Speaker 1: total return as well. Are people worn out with fixed income?

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Speaker 1: And I say this with immense respect with what Nouvine

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Speaker 1: invented across America in the packaging of unit trust. Are

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Speaker 1: we worn out from bond returns? Well, I think what

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Speaker 1: we're telling clients is that, you know, you should be

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Speaker 1: diversifying into higher yielding or just non correlated parts of

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Speaker 1: the fixed income market, because whether or not interest rates

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Speaker 1: move up from here, it's gonna be tough to make

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Speaker 1: that three and a half percent again over the next

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Speaker 1: year with a traditional bond portfolio, given how low fields

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Speaker 1: have gotten and if they move, if they're moving higher,

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Speaker 1: it's gonna be even tougher to do that, as we

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Speaker 1: expect they will over the next year, two years, three years, UM.

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Speaker 1: So what we're looking to, you know, set people up

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Speaker 1: with instead is, you know, things like the high yield

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Speaker 1: part of municipal bond market, emerging market credit where we

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Speaker 1: don't think there's value, and anything that's sort of less

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Speaker 1: correlated to rising rates or less susceptible to rising rates.

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Speaker 1: So anything like in the loan area, senior loans, floating

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Speaker 1: rate securities where you could be building in a little

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Speaker 1: bit more protection against that that rises and rates that

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Speaker 1: ends up knocking a lot of things off the board.

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Speaker 1: Brian Nick, thank you so much with Levine this morning,

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Speaker 1: their chief investor strategist. Right now on American politics X

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Speaker 1: we go granular with Gregory Vellier. He has a tough

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Speaker 1: life to the south of Switzerland, up in the Alps,

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Speaker 1: lost with some Saint Bernard somewhere on his way to Milan.

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Speaker 1: He is leading the way to American tourism in Europe. Greg,

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Speaker 1: very quickly, here should Americans travel to Europe? You're leading

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Speaker 1: the way. If you had if you've had your shots,

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Speaker 1: if you have been tested recently, yes, Okay, we'll leave

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Speaker 1: it there, Greg, Let's go. There's too much going on.

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Speaker 1: I want to go to a great NPR thing I

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Speaker 1: heard on Tennessee, which is a distance between Memphis and Nashville,

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Speaker 1: where the Democrats of Memphis, the Democrats of Nashville, and

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Speaker 1: the fifth and ninth districts get jerrymandered out in this

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Speaker 1: cost the Democrats the House. How many of those battles

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Speaker 1: are there out there now? To give a speaker Pelosi

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Speaker 1: some serious angst. If forced to make a wager today, Tom,

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Speaker 1: I think the House falls to the Republicans. In history

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Speaker 1: would indicate it. Three district thing would indicate it. Some

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Speaker 1: important Democrats have announced their resignation. I think the Republicans

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Speaker 1: are favored. The Republicans are favored. What kind of Republican

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Speaker 1: House would it be? Would it be fragile and of gridlock?

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Speaker 1: It wouldn't be fragile. I think that McCarthy is going

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Speaker 1: to have his hands full with people who are not

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Speaker 1: don't owe him anything, but I think you'd get gridlock

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Speaker 1: to Tom in the last two years of Biden's first term. Yeah, Lisa,

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Speaker 1: this is really important. The first real conversation we've had

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Speaker 1: about a majority GOP in the House. Yeah. The idea

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Speaker 1: here of what happens if the Democrats can't go it

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Speaker 1: alone and how much urgency is it behind is there

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Speaker 1: behind them to get something done before mid terms? Greg,

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Speaker 1: what is your sense of how likely it is that

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Speaker 1: we see some sort of deal, whether bipartisan or partisan,

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Speaker 1: by next year. Given all of the hurdles and the

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Speaker 1: divisions within the Democratic Party, I think only one of

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Speaker 1: the three, Lisa, you'll get something on infrastructure, It's sure

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Speaker 1: as heck isn't going to be two point to five trillion.

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Speaker 1: It will be much much less. The other two are

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Speaker 1: in trouble. The two trillion for social programs is on

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Speaker 1: life support. And then finally the third one, a big

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Speaker 1: tax hyde I think is also on life support. There

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Speaker 1: might be a little on the very wealthy and big corporations,

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Speaker 1: but grandiose tax hype that Biden wants, I think is

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Speaker 1: in real trouble. And meantime, there does seem to see

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Speaker 1: some unity when it comes to Republicans and Democrats on

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Speaker 1: the international strategy, particularly with respect to China. And I'm

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Speaker 1: wondering whether the President Biden's tour internationally this past couple

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Speaker 1: of weeks really gives lights how far apart the US

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Speaker 1: has gotten from European allies when it comes to what

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Speaker 1: exactly they should do with respect to China. I think

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Speaker 1: Biden sort of got what he wanted from our allies

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Speaker 1: on China. I think we are demanding more transparency on

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Speaker 1: the virus, we are demanding that they treat their dissonance better.

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Speaker 1: We're demanding that they stopped hacking into our companies. So

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Speaker 1: I think on a lot of these key issues, there's

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Speaker 1: not a lot of space between US and European allies

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Speaker 1: were all united in opposition to China. Right now, do

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Speaker 1: you think those greg that some of those allies have

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Speaker 1: the same cushion, the same wiggle room. I guess to

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Speaker 1: push back against China in the way that maybe the

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Speaker 1: US has good point. I think the US is more

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Speaker 1: adamant the Western Europeans have other issues, including Putin, of course,

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Speaker 1: but I do think that again, Biden got into communicate

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Speaker 1: what he wanted. He didn't get everything. We still can't

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Speaker 1: decide what we're gonna do with Cole. He and Trudeau

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Speaker 1: did not agree on opening up the border with Canada.

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Speaker 1: But I'd say the first part of this trip has

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Speaker 1: been a great public relations success. I think Biden's numbers,

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Speaker 1: his job approval numbers are headed higher. Do you oh so,

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Speaker 1: do you think, though I guess some of the international

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Speaker 1: gains that he maybe making the international stage, that that

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Speaker 1: actually translates to the real people on the ground here

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Speaker 1: in the US with regards to his popularity and the

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Speaker 1: likelihood that they may vote for him or Leasa's party. Again,

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Speaker 1: Oh fearless forecast. I think within a week or two,

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Speaker 1: Biden's numbers will be a little over six positive. That

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Speaker 1: gives him political capital. He's gonna need it to get

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Speaker 1: much done on infrastructure. I think we're several weeks away

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Speaker 1: from ironing out any kind of deal on infrastructure, so

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Speaker 1: he needs that high approval number to help his cause. Greg.

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Speaker 1: One final question here, we've got to get back to

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Speaker 1: the markets and what we're seeing at NATO is well.

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Speaker 1: In this political Maelstrom, we seem to be back to normalcy.

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Speaker 1: Can you say that that Mr Biden has dragged us

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Speaker 1: back to a diplomatic and domestic normalcy or is the

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Speaker 1: jury still out? It's a huge point, Tom, and I

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Speaker 1: think the answer is yes. You know, whether it was

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Speaker 1: Macrone or Merkel, they all pretty much agree the US

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Speaker 1: is back. There was a good will, good spirit between

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Speaker 1: all the leaders. Obviously the Putent meeting isn't going to

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Speaker 1: go great, but I think with our allies that a

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Speaker 1: sense that after these four horrible years, things are are

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Speaker 1: returning to normal. Very good, Gregg, thank you so much, greatly,

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Speaker 1: greatly appreciated. This morning. Mr val joining us from the

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Speaker 1: Alps of Switzerland on his way to Italy, which is

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Speaker 1: maybe the best news we've said in eighteen months. Uh,

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Speaker 1: let's get right to Michael Darta, MKM partners here to

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Speaker 1: set up the economic week and he joins us from

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Speaker 1: an island somewhere vicinity south of Cape Cod. Michael Darta,

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Speaker 1: Martha's vineyard. You're living it out there. Wages, lack of labor,

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Speaker 1: lack of housing. It's a real time microcosm of what

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Speaker 1: we've got worldwide. Are we gonna see wages rise and

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Speaker 1: stay elevated? Well, Tom, we are seeing them rise, and

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Speaker 1: certainly out here on the vineyard you can see these

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Speaker 1: supply side disturbances that have been holding back job growth

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Speaker 1: over the last few months. We're way out in the

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Speaker 1: westerly sort of a remote part of the island. They're

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Speaker 1: only a couple options in terms of restaurants where we are,

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Speaker 1: and none of them are open for indoor dining. And

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Speaker 1: it's not because of COVID, it's because they cannot find

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Speaker 1: employees staff, and so it's essentially a takeout situation where

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Speaker 1: you can sit down there with no staffy. Michael, get

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Speaker 1: out the grill, play the Gorilla album from James Taylor

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Speaker 1: and move forward. Okay, let's look at the national situation now,

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Speaker 1: Michael Darda, do you believe in a sustain g d P?

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Speaker 1: I mean, looking at the top level and linking a

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Speaker 1: nominal GDP to where we are. Do we misjudge the

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Speaker 1: sustainability of this economy to Boom? I think that's exactly

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Speaker 1: what's happening. Tom We are in a boom. There are

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Speaker 1: some supply side dislocations that are a bit confusing, but

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Speaker 1: I think grow this going to be quite strong, well

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Speaker 1: above potential next year. And that gets us to this

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Speaker 1: question about inflation and whether it's temporary or potentially more permanent.

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Speaker 1: Some of these price price spikes are going to be temporary.

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Speaker 1: You're not going to see used car prices going up

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Speaker 1: seven or eight percent every single month. But there are

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Speaker 1: other prices that are stickier, that are slower moving, that

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Speaker 1: haven't even gotten going yet, that we could see start

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Speaker 1: to move next year if we stay in this really

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Speaker 1: robust nominal GDP environment. Milton Friedman posited the relationship that

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Speaker 1: you know, monetary policy eases first, so money gets going

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Speaker 1: within a few quarters, you see output move, and then

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Speaker 1: in terms of the lag on inflation, inflation is backward

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Speaker 1: looking and slow moving most of the time, and that

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Speaker 1: could be a few years. And we're already seeing inflation

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Speaker 1: from these supply side shocks. But the demand side element,

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Speaker 1: I think is going to be a bit more persistent

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Speaker 1: than widely expected. Lisa, that is the first time and

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Speaker 1: the three of the people's Republic of Martha's Vineyard. That

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Speaker 1: you've heard the name Milton Friedman mentioned on the Grand

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Speaker 1: Island never happened before. All right, thank you for the

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Speaker 1: Bloomberg exclusive, Mike Darna. We appreciate the the mention of

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Speaker 1: Milton Friedman on Martha's Vineyard. Going forward, how do we

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Speaker 1: know though, this idea of sticky inflation? When will we know?

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Speaker 1: Given the fact that people have pointed to wages and

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Speaker 1: we see wages going up, but people even dismiss that

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Speaker 1: as transitory. Yeah, no doubt about it. Well, you know,

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Speaker 1: we know these flexible prices are rocketing and those are

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Speaker 1: going to be the first to respond, but they will

431
00:24:38,560 --> 00:24:41,840
Speaker 1: respond both to supply side and demand side shocks. The

432
00:24:42,000 --> 00:24:46,040
Speaker 1: stickier prices um within the core tend to be more

433
00:24:46,080 --> 00:24:48,880
Speaker 1: slower moving. And you have a lot of monetary policy

434
00:24:48,920 --> 00:24:52,200
Speaker 1: officials now that are in the temporary and transitory camp

435
00:24:52,600 --> 00:24:58,320
Speaker 1: looking at median trimmed mean prices for these different indexes,

436
00:24:58,320 --> 00:25:01,080
Speaker 1: whether it's a median prices for the CPI or the

437
00:25:01,080 --> 00:25:04,199
Speaker 1: trimmed mean for the PC deflator. So we're getting a

438
00:25:04,200 --> 00:25:07,800
Speaker 1: bit into the weeds. But these are slower moving up

439
00:25:08,240 --> 00:25:11,720
Speaker 1: price indices that you know, we'll tend to respond over time,

440
00:25:11,800 --> 00:25:15,280
Speaker 1: and so those areas I think next year, if they

441
00:25:15,320 --> 00:25:19,200
Speaker 1: start to get moving along with higher inflation expectations, then

442
00:25:19,280 --> 00:25:22,520
Speaker 1: that that's that's going to probably get the Feds attention

443
00:25:22,560 --> 00:25:25,080
Speaker 1: in a way that some of these price increases this

444
00:25:25,160 --> 00:25:28,400
Speaker 1: year have not. Well, let's just zoom out a little bit.

445
00:25:28,680 --> 00:25:30,639
Speaker 1: The balance of risks right now, is it too much

446
00:25:30,720 --> 00:25:34,480
Speaker 1: higher yields or frankly to lower yields and poorer performance

447
00:25:34,480 --> 00:25:37,880
Speaker 1: and equity markets. Should the reality of slower growth actually

448
00:25:37,920 --> 00:25:42,080
Speaker 1: set in after this inflationary pump, Yeah, I think the

449
00:25:42,280 --> 00:25:46,080
Speaker 1: risk is to higher yields From where we are right now.

450
00:25:46,240 --> 00:25:48,560
Speaker 1: Our forecast for year end is two percent and the

451
00:25:48,840 --> 00:25:52,080
Speaker 1: tenure treasury so recently, you know, we ran up to

452
00:25:52,200 --> 00:25:55,320
Speaker 1: the one seventies in late March and we've pulled back.

453
00:25:55,720 --> 00:26:01,040
Speaker 1: That pullback corresponded perfectly to a few months disappointing job

454
00:26:01,119 --> 00:26:04,320
Speaker 1: gains that we were seeing pressure on wages, pressure on

455
00:26:04,359 --> 00:26:08,400
Speaker 1: ours work. So these supply side disturbances holding back job growth.

456
00:26:08,920 --> 00:26:13,160
Speaker 1: So if we see job growth accelerating towards those seven

457
00:26:13,160 --> 00:26:16,080
Speaker 1: figure thresholds, and then I think you're gonna see bond

458
00:26:16,119 --> 00:26:19,720
Speaker 1: yields moving moving back up towards you know, towards the

459
00:26:19,800 --> 00:26:22,480
Speaker 1: highs of the year, and then potentially even higher. That's

460
00:26:22,560 --> 00:26:25,320
Speaker 1: our view. You know, obviously the market will decide, and

461
00:26:25,320 --> 00:26:28,280
Speaker 1: the market has spent going the other way on yields

462
00:26:28,320 --> 00:26:31,360
Speaker 1: for the last couple of months here. But I think, um,

463
00:26:31,400 --> 00:26:33,560
Speaker 1: you know, that's really what turned the tide. I think

464
00:26:33,560 --> 00:26:35,639
Speaker 1: you had a lot of barish sentiment in the bond

465
00:26:35,720 --> 00:26:38,800
Speaker 1: market and it just took a couple of weeker than

466
00:26:38,840 --> 00:26:42,840
Speaker 1: expected readings on jobs to to trigger a rally. And

467
00:26:42,880 --> 00:26:45,680
Speaker 1: I do think that will reverse over time if job

468
00:26:45,720 --> 00:26:50,199
Speaker 1: growth accelerates, as some of these supply side pressures ease up,

469
00:26:50,760 --> 00:26:52,800
Speaker 1: and we can go through what those are. But that's

470
00:26:52,840 --> 00:26:55,240
Speaker 1: our view. Yeah, there's certainly a lack of consensus right

471
00:26:55,280 --> 00:26:56,960
Speaker 1: now with the way things are being priced. Maybe you

472
00:26:56,960 --> 00:26:59,800
Speaker 1: can go through some of those additional pressures here. Particularly,

473
00:27:00,000 --> 00:27:03,199
Speaker 1: it's the backdrop of whether there is I guess distortions

474
00:27:03,240 --> 00:27:07,119
Speaker 1: in this market by FED policy and whether the data

475
00:27:07,240 --> 00:27:11,679
Speaker 1: themselves maybe leads to further distortion, no doubt about it.

476
00:27:12,040 --> 00:27:16,480
Speaker 1: So on the job growth angle, we have some issues

477
00:27:17,000 --> 00:27:20,760
Speaker 1: from extended unemployment benefits and so you know that's increased

478
00:27:20,760 --> 00:27:23,960
Speaker 1: the reservation wage, the so called wage that would call

479
00:27:24,040 --> 00:27:27,719
Speaker 1: someone um, you know, off the couch or you know,

480
00:27:28,080 --> 00:27:31,600
Speaker 1: waiting at home for a better opportunity to get back

481
00:27:31,640 --> 00:27:34,439
Speaker 1: involved in the labor market. There's also been some hesitation

482
00:27:34,520 --> 00:27:37,800
Speaker 1: on the part of the public in terms of risks

483
00:27:37,880 --> 00:27:41,000
Speaker 1: to you know, interfacing with the public. I think those

484
00:27:41,040 --> 00:27:44,000
Speaker 1: will be easing back now as a bigger percentage of

485
00:27:44,000 --> 00:27:48,040
Speaker 1: the population is vaccinated month over month over month, and

486
00:27:48,119 --> 00:27:51,080
Speaker 1: we've had a problem with schools being closed, in parents

487
00:27:51,160 --> 00:27:55,960
Speaker 1: dealing with issues with respect to childcare. So all of

488
00:27:56,000 --> 00:28:00,280
Speaker 1: those things should be improving over the course of the months. Head.

489
00:28:00,280 --> 00:28:03,320
Speaker 1: I mean that we already have half the governor scaling

490
00:28:03,359 --> 00:28:06,600
Speaker 1: back the jobless benefits and then um, you know, these

491
00:28:06,600 --> 00:28:10,160
Speaker 1: will start to roll off completely in the fall. Schools

492
00:28:10,160 --> 00:28:13,280
Speaker 1: are reopening, and we're doing pretty well on the vaccinations,

493
00:28:13,320 --> 00:28:15,240
Speaker 1: and so I think a lot of these issues are

494
00:28:15,240 --> 00:28:17,800
Speaker 1: going to receive that you know, that have been holding

495
00:28:17,800 --> 00:28:21,080
Speaker 1: back job growth, and we are accelerating now on job gains,

496
00:28:21,119 --> 00:28:24,199
Speaker 1: and so we're getting closer to the FED starting to

497
00:28:24,240 --> 00:28:27,040
Speaker 1: talk about think about talking about and then start talking

498
00:28:27,080 --> 00:28:30,399
Speaker 1: about talking about the taper. Yeah, that's definitely gonna be

499
00:28:30,400 --> 00:28:34,400
Speaker 1: a lot of talking. But so all right, then that's

500
00:28:34,400 --> 00:28:36,919
Speaker 1: the circle back then, Mike two. I guess then the

501
00:28:36,920 --> 00:28:40,800
Speaker 1: wage issue here and the idea here that some of

502
00:28:40,840 --> 00:28:42,880
Speaker 1: the issues that we're having right now in the labor

503
00:28:42,960 --> 00:28:45,560
Speaker 1: market are causing an increase in wages. I guess that's

504
00:28:45,600 --> 00:28:47,680
Speaker 1: a good thing, depending on what side of the fence

505
00:28:47,720 --> 00:28:50,160
Speaker 1: you sit, But there's some concern here that that is

506
00:28:50,200 --> 00:28:53,600
Speaker 1: definitely I guess the sticky part of the inflation debate

507
00:28:53,680 --> 00:28:55,800
Speaker 1: right now, and that even if we do get some

508
00:28:55,880 --> 00:28:58,280
Speaker 1: sort of right sizing in the labor market, those wage

509
00:28:58,280 --> 00:29:01,000
Speaker 1: gains are still going to be there. Yeah. I think

510
00:29:01,040 --> 00:29:03,360
Speaker 1: they're still going to be there, just because this is

511
00:29:03,400 --> 00:29:08,200
Speaker 1: a booming nominal demand backdrop, and so we had a

512
00:29:08,360 --> 00:29:13,120
Speaker 1: huge and sudden collapse in the economy last spring. Nominal

513
00:29:13,200 --> 00:29:15,960
Speaker 1: GDP since then has been growing at an eighteen point

514
00:29:16,000 --> 00:29:21,280
Speaker 1: five percent annualized rate. So all nominal magnitudes should be,

515
00:29:21,520 --> 00:29:25,080
Speaker 1: you know, should be moving up pretty rapidly, and wages

516
00:29:25,120 --> 00:29:27,240
Speaker 1: are certainly a part of that. There a sticky part

517
00:29:27,280 --> 00:29:30,280
Speaker 1: of it, um But yeah, I think these wage increases

518
00:29:30,320 --> 00:29:32,520
Speaker 1: are going to stick because the labor market is going

519
00:29:32,600 --> 00:29:36,200
Speaker 1: to be tightening month after month, and you've got record

520
00:29:36,320 --> 00:29:39,520
Speaker 1: job openings, of record quit quits rate, a lot of

521
00:29:39,560 --> 00:29:44,120
Speaker 1: these leading indicators like first time jobless claims collapsing, you know,

522
00:29:44,400 --> 00:29:48,239
Speaker 1: very bullish for a tightening labor market and suggesting the

523
00:29:48,240 --> 00:29:51,400
Speaker 1: face probably a bit behind the curve here, Michael. The

524
00:29:51,440 --> 00:29:53,360
Speaker 1: money question here, and all the time that you and

525
00:29:53,400 --> 00:29:56,160
Speaker 1: I have gone back and forth on this is does

526
00:29:56,200 --> 00:29:59,280
Speaker 1: the geometry we learned still worked? And if we go

527
00:29:59,360 --> 00:30:01,840
Speaker 1: to you know, Edwinninski and others studying the I S

528
00:30:02,000 --> 00:30:05,280
Speaker 1: L M function of Hicks from years ago, does that

529
00:30:05,320 --> 00:30:09,760
Speaker 1: traditional geometry work now? Or do you just anticipate at

530
00:30:09,760 --> 00:30:12,200
Speaker 1: some point out there we'll get back to what's in

531
00:30:12,280 --> 00:30:16,600
Speaker 1: Michael Spencer's textbooks. Now. I think that, you know, I

532
00:30:16,640 --> 00:30:20,920
Speaker 1: think the basic models can can help us think about shocks.

533
00:30:21,040 --> 00:30:24,120
Speaker 1: You know, we wrote about that last year. But the

534
00:30:24,280 --> 00:30:27,960
Speaker 1: essence of where we started with this Milton Friedman idea

535
00:30:28,120 --> 00:30:31,840
Speaker 1: that you know, monetary policy operates with lags, and then

536
00:30:31,960 --> 00:30:35,000
Speaker 1: you first see an easy show up and output, and

537
00:30:35,040 --> 00:30:39,160
Speaker 1: then you know inflation follows because it's stickier, intends to

538
00:30:39,160 --> 00:30:41,840
Speaker 1: be a lagging indicator. I think we already see that

539
00:30:41,920 --> 00:30:45,280
Speaker 1: playing out, and that would suggest more permanence to some

540
00:30:45,360 --> 00:30:50,640
Speaker 1: of what we're seeing, rather than this very temporary transitory,

541
00:30:50,720 --> 00:30:53,200
Speaker 1: you know, base effect type nature, which is what the

542
00:30:53,240 --> 00:30:56,040
Speaker 1: official company line, if you will, is right now. And

543
00:30:56,120 --> 00:30:59,000
Speaker 1: of course, Michael, what is so important is that Martha's vinyard.

544
00:30:59,040 --> 00:31:03,480
Speaker 1: There is only one one metric for summer pricing, and

545
00:31:03,560 --> 00:31:06,280
Speaker 1: that's a price of pro pro pane for the grill.

546
00:31:06,960 --> 00:31:09,840
Speaker 1: Folks have no idea what it costs out on these

547
00:31:09,920 --> 00:31:12,240
Speaker 1: islands to get pro pane. For those of you on

548
00:31:12,400 --> 00:31:16,800
Speaker 1: radio and action photograph of Michael Darta, this grill Lisa

549
00:31:16,880 --> 00:31:20,560
Speaker 1: went to the moon. Is that that's not what I'm

550
00:31:22,680 --> 00:31:25,760
Speaker 1: really socks and flip pops? Is that a thing, Michael

551
00:31:25,920 --> 00:31:32,800
Speaker 1: I liked? You guys get that photo. That is Uh,

552
00:31:33,240 --> 00:31:35,800
Speaker 1: it's coming from inside the house. Michael Darta will be

553
00:31:35,840 --> 00:31:38,560
Speaker 1: out for dinner tonight. Thank you so much. Mr Darta

554
00:31:39,040 --> 00:31:42,080
Speaker 1: from m Camp Partners holding court out on Martha's vineyard

555
00:31:48,000 --> 00:31:50,000
Speaker 1: right now. And we have been looking at the Mayor's

556
00:31:50,120 --> 00:31:53,080
Speaker 1: race in New York. For those of you worldwide, Uh

557
00:31:53,120 --> 00:31:56,160
Speaker 1: it is there's like three Republicans on the island of Manhattan.

558
00:31:56,160 --> 00:31:59,200
Speaker 1: Scott Stringer knows all of those Republicans. But this is

559
00:31:59,240 --> 00:32:02,280
Speaker 1: a Democratic primary, and it is a primary that has

560
00:32:02,320 --> 00:32:05,280
Speaker 1: been contentious. Scott Stringer, Thank you so how much for

561
00:32:05,400 --> 00:32:09,960
Speaker 1: joining us obviously obviously his leadership in Manhattan politics and

562
00:32:10,000 --> 00:32:14,320
Speaker 1: of course his Public Services controller as well. Scott, I

563
00:32:14,360 --> 00:32:17,080
Speaker 1: want to get the obligatory questions out of the way.

564
00:32:17,200 --> 00:32:20,920
Speaker 1: You have been accused of sexual harassment. It has turned

565
00:32:21,080 --> 00:32:26,760
Speaker 1: turned your candidacy upside down. What do you do now

566
00:32:26,880 --> 00:32:30,800
Speaker 1: to move forward? Should you be dropping out and giving

567
00:32:30,840 --> 00:32:35,000
Speaker 1: a powerful endorsement to a progressive a liberal or do

568
00:32:35,040 --> 00:32:39,200
Speaker 1: you do you move on to the primary? Well, look,

569
00:32:39,240 --> 00:32:42,880
Speaker 1: these allegations literally as far back as thirty years ago,

570
00:32:43,160 --> 00:32:46,240
Speaker 1: and uh, it is unfortunate. It has had a big

571
00:32:46,240 --> 00:32:50,040
Speaker 1: impact on the campaign. But look, you know this is

572
00:32:50,080 --> 00:32:52,240
Speaker 1: not an easy venture when you run from there of

573
00:32:52,240 --> 00:32:54,680
Speaker 1: New York City and you know people are gonna come

574
00:32:54,680 --> 00:32:56,680
Speaker 1: at you. But I have full faith in the voters

575
00:32:56,680 --> 00:32:58,560
Speaker 1: of this city who know my thirty year record, they

576
00:32:58,600 --> 00:33:01,160
Speaker 1: know the kind of person I am. Just the other day,

577
00:33:01,200 --> 00:33:04,560
Speaker 1: three women progressive signed a letter and support of my candidacy.

578
00:33:04,920 --> 00:33:07,600
Speaker 1: So look, it's a challenge. But when people look at

579
00:33:07,600 --> 00:33:10,960
Speaker 1: the inconsistencies, when they file the facts, uh, they have

580
00:33:11,040 --> 00:33:13,360
Speaker 1: been the same person. They've always knew me. In terms

581
00:33:13,360 --> 00:33:16,440
Speaker 1: of endorsing another candidate, I'm in the race. And while

582
00:33:16,480 --> 00:33:18,920
Speaker 1: my supporters can rank me first, they have an opportunity

583
00:33:18,960 --> 00:33:22,080
Speaker 1: under rank troyes voting to rank another candidate second. But

584
00:33:22,520 --> 00:33:25,120
Speaker 1: I have no plans to make an endorsement. But you

585
00:33:25,120 --> 00:33:27,920
Speaker 1: know that could change in the coming days. Who I

586
00:33:27,920 --> 00:33:30,760
Speaker 1: would like to see as second choices candidate. It's something

587
00:33:30,800 --> 00:33:33,240
Speaker 1: I was thinking about over the weekend, and uh, we'll

588
00:33:33,280 --> 00:33:35,480
Speaker 1: see how the next few days play. But right now

589
00:33:35,520 --> 00:33:38,520
Speaker 1: I'm running to win. The support has been really strong,

590
00:33:38,880 --> 00:33:40,480
Speaker 1: and I just want to say to you, I don't

591
00:33:40,560 --> 00:33:43,840
Speaker 1: think there are three Republicans in Manhattan. I think there

592
00:33:43,840 --> 00:33:46,360
Speaker 1: are two. Okay, well there's two, and we'll we'll do

593
00:33:46,840 --> 00:33:49,480
Speaker 1: Ken Prue. It was the third run until he until

594
00:33:49,520 --> 00:33:53,560
Speaker 1: he passed away. Scott Stringer, look at the moment, and

595
00:33:53,960 --> 00:33:57,200
Speaker 1: my I just still down this campaign and folks, for

596
00:33:57,240 --> 00:34:00,120
Speaker 1: those of you nationwide, it has been a vigorous It

597
00:34:00,200 --> 00:34:02,720
Speaker 1: is about democracy in New York City, even if it's

598
00:34:03,000 --> 00:34:05,840
Speaker 1: one party. In Scott Stringer, it's devolved down to public

599
00:34:05,880 --> 00:34:08,399
Speaker 1: safety and to the police. I want you to stay

600
00:34:08,560 --> 00:34:13,040
Speaker 1: your approach to this divisive nature of the police in

601
00:34:13,080 --> 00:34:18,200
Speaker 1: this nation and particularly the NYPD. Well, look, there's no

602
00:34:18,280 --> 00:34:20,839
Speaker 1: question that people are concerned about public safety, and they

603
00:34:20,880 --> 00:34:22,800
Speaker 1: should be. I'm a kid who grew up in this

604
00:34:22,880 --> 00:34:25,480
Speaker 1: city in the seventies when they were two thousand murders

605
00:34:25,520 --> 00:34:27,719
Speaker 1: a year. My mother used to tell my brother and I,

606
00:34:27,760 --> 00:34:29,960
Speaker 1: when you get on the A train in Washington Heights,

607
00:34:30,040 --> 00:34:32,480
Speaker 1: sit in the conductor car because that was the only

608
00:34:32,560 --> 00:34:36,160
Speaker 1: safe car. So I have lived my life through that lens. Obviously,

609
00:34:36,239 --> 00:34:38,600
Speaker 1: we've come a long way in terms of safety, and

610
00:34:38,640 --> 00:34:41,239
Speaker 1: I think the next mayor has to make sure the

611
00:34:41,320 --> 00:34:44,440
Speaker 1: police are finding the people who are doing the shootings

612
00:34:44,480 --> 00:34:47,000
Speaker 1: and tackle the violence in the streets. There's no question

613
00:34:47,040 --> 00:34:49,360
Speaker 1: about that. But also we have to think about a

614
00:34:49,400 --> 00:34:52,839
Speaker 1: police force that is less about over policing in black

615
00:34:52,880 --> 00:34:55,839
Speaker 1: and brown communities, more investment in kids to keep them

616
00:34:55,840 --> 00:34:58,680
Speaker 1: away from the criminal justice system. We're seeing around the

617
00:34:58,719 --> 00:35:02,080
Speaker 1: country that when you were spawn with mental health professionals

618
00:35:02,080 --> 00:35:05,040
Speaker 1: to mental health challenges on the street, the results are better.

619
00:35:05,239 --> 00:35:06,759
Speaker 1: So the next mayor is going to have to be

620
00:35:06,800 --> 00:35:09,239
Speaker 1: able to keep the street safe and also make sure

621
00:35:09,320 --> 00:35:11,680
Speaker 1: that we have a policing system that is fair and just.

622
00:35:12,160 --> 00:35:14,520
Speaker 1: I think I'm qualified to do both given my thirty

623
00:35:14,600 --> 00:35:17,359
Speaker 1: years of experience and government, and I'm looking forward to

624
00:35:17,360 --> 00:35:20,719
Speaker 1: that challenge alright, so certainly a divisive issue Scott, but

625
00:35:20,800 --> 00:35:24,560
Speaker 1: probably more divisive and at least more disparity with regards

626
00:35:24,560 --> 00:35:27,880
Speaker 1: to the policy positions that I've seen amongst the Democratic candidates.

627
00:35:27,920 --> 00:35:31,439
Speaker 1: Here is their position here on education and specifically how

628
00:35:31,520 --> 00:35:34,120
Speaker 1: you make these investments, if you make investments at all

629
00:35:34,600 --> 00:35:37,360
Speaker 1: in our public school systems, in our charter school systems

630
00:35:37,360 --> 00:35:40,239
Speaker 1: for some, but more importantly overall, and making sure that

631
00:35:40,280 --> 00:35:42,239
Speaker 1: a lot of the kids out there are getting a

632
00:35:42,280 --> 00:35:45,160
Speaker 1: fair education. That is going to be one of the

633
00:35:45,200 --> 00:35:47,840
Speaker 1: number one issues facing the city. And become a public

634
00:35:47,840 --> 00:35:49,719
Speaker 1: school parent. I got married late in life. I have

635
00:35:49,760 --> 00:35:52,759
Speaker 1: a nine year old and a girl. They're in public school. Look,

636
00:35:52,800 --> 00:35:55,600
Speaker 1: I I'm a failed remote learning teacher. They really struggled.

637
00:35:55,640 --> 00:35:59,319
Speaker 1: It was no joke. Our wonderful children really got hit hard.

638
00:35:59,680 --> 00:36:04,200
Speaker 1: This to Blasia. Administration really didn't prepare for the endemic,

639
00:36:04,400 --> 00:36:07,239
Speaker 1: and I worry that they haven't prepared post pandemic. But look,

640
00:36:07,560 --> 00:36:09,680
Speaker 1: I believe that we need a mayor who's going to

641
00:36:09,840 --> 00:36:13,760
Speaker 1: direct the issues facing kids, mental health challenges, more tutoring,

642
00:36:14,440 --> 00:36:17,640
Speaker 1: direct aid for the kids. And my proposal quite simply

643
00:36:17,760 --> 00:36:20,239
Speaker 1: is to put two teachers in every classroom. K to five,

644
00:36:20,360 --> 00:36:22,800
Speaker 1: because that's what the charter schools do in the private schools.

645
00:36:22,840 --> 00:36:26,320
Speaker 1: It's time to give public kids, public public school students

646
00:36:26,520 --> 00:36:29,640
Speaker 1: the opportunities to get a first rate education. I'm proud

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00:36:29,920 --> 00:36:33,400
Speaker 1: apported by the teachers and the principles and secunity professors,

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00:36:33,400 --> 00:36:36,399
Speaker 1: and I'm the education candidate from theyor Okay, but where

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00:36:36,400 --> 00:36:39,080
Speaker 1: do you get the resources to do that? The monetary resources?

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00:36:39,080 --> 00:36:41,839
Speaker 1: And then it almost dovetails with Tom's question before here

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00:36:41,880 --> 00:36:44,279
Speaker 1: about the approach to the NYPD. There are a lot

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00:36:44,280 --> 00:36:46,600
Speaker 1: of people that want to see resources may be taken

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00:36:46,600 --> 00:36:49,400
Speaker 1: out of that column and put potentially in the education

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00:36:49,480 --> 00:36:52,799
Speaker 1: column here. How do you balance those competing interests. Well,

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00:36:52,800 --> 00:36:55,279
Speaker 1: the nice thing about electing the city controller mayor is

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00:36:55,320 --> 00:36:57,239
Speaker 1: actually know the finances of the city. I know where

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00:36:57,280 --> 00:37:00,000
Speaker 1: the money has been wasted over the last eight years.

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00:37:00,040 --> 00:37:02,400
Speaker 1: There's no proposal I've put forth that I can't pay for.

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00:37:02,840 --> 00:37:05,040
Speaker 1: We can put two teachers in every class, some three

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00:37:05,400 --> 00:37:08,319
Speaker 1: million dollars a year because we're getting record foundation need

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00:37:08,360 --> 00:37:12,000
Speaker 1: for Albany. We can equalize after school programs for all kids,

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00:37:12,000 --> 00:37:14,759
Speaker 1: regardless of zip code. That's two hundred million dollars. We

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00:37:14,960 --> 00:37:18,680
Speaker 1: can actually begin to think about all of these programs

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00:37:18,719 --> 00:37:22,240
Speaker 1: because budgets are about priorities. So if you don't waste

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00:37:22,239 --> 00:37:25,720
Speaker 1: money and then money we're receiving from Albany stimulus money,

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00:37:25,960 --> 00:37:29,880
Speaker 1: we could create real programs that can realize systemic change

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00:37:29,880 --> 00:37:32,279
Speaker 1: in the system. But I put forth, but I agree

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00:37:32,320 --> 00:37:34,239
Speaker 1: with you. You've got to know where the money is.

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00:37:34,440 --> 00:37:37,360
Speaker 1: And no can running from mayor has any understanding about

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00:37:37,360 --> 00:37:40,160
Speaker 1: the money because they had the opportunity audit and investigate

671
00:37:40,440 --> 00:37:42,920
Speaker 1: the de Blasio City agencies. Is I have, Scott, not

672
00:37:43,040 --> 00:37:44,560
Speaker 1: enough time here, but I've got to get this in.

673
00:37:44,680 --> 00:37:48,640
Speaker 1: Its too important. Your heritage of this island, of Manhattan,

674
00:37:48,680 --> 00:37:51,520
Speaker 1: of New York City goes back to Abraham Beam, your

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00:37:51,560 --> 00:37:54,960
Speaker 1: support of Murio Koma long ago and far away, and

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00:37:55,120 --> 00:38:00,360
Speaker 1: particularly your family affiliation to the wonderful Bella Absuck. Folks,

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00:38:00,360 --> 00:38:03,759
Speaker 1: whether you agreed or disagreed with her, everybody loved and

678
00:38:03,840 --> 00:38:07,960
Speaker 1: admired Bella abb Sug for her energy. What would Bella

679
00:38:08,040 --> 00:38:11,359
Speaker 1: abb Sug say about the mess you're in right now?

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00:38:13,320 --> 00:38:18,120
Speaker 1: I'll keep fighting, you know, listen, you don't you don't

681
00:38:18,360 --> 00:38:21,759
Speaker 1: begrudge the challenges you face. To be mayor of New

682
00:38:21,840 --> 00:38:24,200
Speaker 1: York City is not a straight line. Look I beat

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00:38:24,200 --> 00:38:26,440
Speaker 1: Elliott's bit. So when everyone said I couldn't, I'd beat

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00:38:26,440 --> 00:38:29,200
Speaker 1: Evil Mossquit Faber present when everyone said I couldn't. I've

685
00:38:29,239 --> 00:38:31,759
Speaker 1: never been in a race where I was ahead or

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00:38:31,800 --> 00:38:34,680
Speaker 1: I didn't have turbulence. I'm a city kid. I get

687
00:38:34,800 --> 00:38:37,880
Speaker 1: knocked down, I get backed up. That was what Absug

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00:38:37,960 --> 00:38:40,160
Speaker 1: did in her career, and that's what so many people

689
00:38:40,200 --> 00:38:42,480
Speaker 1: before me did. My own mom was a single parent

690
00:38:42,560 --> 00:38:44,640
Speaker 1: running for the city council when I was a little boy,

691
00:38:44,920 --> 00:38:47,080
Speaker 1: and I watched her get knocked around too, and she

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00:38:47,239 --> 00:38:50,200
Speaker 1: kept fighting right back and alive. Today they'd be like,

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00:38:50,360 --> 00:38:52,560
Speaker 1: keep your head down, keep moving, and get to the polls.

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00:38:52,560 --> 00:38:54,560
Speaker 1: That's what they would be telling me. Disgusting or thank

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Speaker 1: you so so much for joining us. This is the

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00:38:57,239 --> 00:39:01,920
Speaker 1: Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays

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00:39:01,960 --> 00:39:05,400
Speaker 1: from seven to ten am Eastern on Bloomberg Radio and

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00:39:05,520 --> 00:39:09,800
Speaker 1: on Bloomberg Television each day from six to nine am

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00:39:09,840 --> 00:39:13,600
Speaker 1: for insight from the best in economics, finance, investment, and

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00:39:13,719 --> 00:39:20,239
Speaker 1: international relations. And subscribe to the Surveillance podcast on Apple podcast, SoundCloud,

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00:39:20,400 --> 00:39:24,000
Speaker 1: Bloomberg dot com, and of course on the terminal. I'm

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00:39:24,040 --> 00:39:26,759
Speaker 1: Tom Keene and this is Bloomberg,