WEBVTT - Surveillance: Unemployment Can Go Lower, Kudlow Says 0:00:00.080 --> 0:00:13.040 Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jay Ley. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:31.720 Bloomberg dot Com, and of course, on the Bloomberg Do 0:00:31.720 --> 0:00:33.160 you want to stay? Hevery in New York on Police 0:00:33.159 --> 0:00:36.360 to say is Howard Wards, c IO of Growth Equities 0:00:36.400 --> 0:00:39.440 at Gabelly Funds. Good morning to Howard, Good morning John. 0:00:39.520 --> 0:00:41.159 What are we looking for in about ninety minutes? What 0:00:41.200 --> 0:00:44.040 are you looking for? Well, I think we're gonna have 0:00:44.040 --> 0:00:45.600 a good number, and I know I can't tell you 0:00:45.600 --> 0:00:49.120 whether it's going to be or two fifty, but probably 0:00:49.200 --> 0:00:51.440 is going to be in there somewhere. And it just 0:00:51.479 --> 0:00:55.400 would point out that, you know, we have to hold 0:00:55.400 --> 0:00:58.440 back from putting too much weight on any one month's numbers. 0:00:58.440 --> 0:01:00.880 You need to look at the trend line, three month average, 0:01:00.880 --> 0:01:03.000 and not only that, but remember that these numbers tend 0:01:03.000 --> 0:01:06.319 to get revised once or twice and so the headline 0:01:06.360 --> 0:01:08.559 number we get today may not last well. The average 0:01:08.640 --> 0:01:10.680 number through the years I've found is north of two k. 0:01:11.080 --> 0:01:13.600 It's pretty stunning. How would we you set up. Did 0:01:13.680 --> 0:01:15.840 you think the economy would go out to this highest 0:01:15.880 --> 0:01:18.400 sort of high trajectory that it's reached over the last 0:01:18.680 --> 0:01:23.640 complementso suck UH, I would tell you yes, because we're 0:01:23.680 --> 0:01:25.720 having a terrific year. So we must have been doing 0:01:25.959 --> 0:01:29.640 something right UH in our in our growth fund, which 0:01:29.680 --> 0:01:34.280 is up about year to date and nine present plus 0:01:34.360 --> 0:01:36.520 over the last twelve months. But that's been with a 0:01:36.600 --> 0:01:40.800 focus on what I'm going to describe as defensive growth stocks, 0:01:41.200 --> 0:01:47.520 which means zero weights to underweights in energy, UH, industrials, 0:01:48.000 --> 0:01:50.760 producer durables. And we also don't happen to own any 0:01:50.840 --> 0:01:53.720 consumer staples which are not experiencing much of any growth. 0:01:54.360 --> 0:01:57.760 So we've been positioned properly for the market that we've had, 0:01:57.800 --> 0:02:00.400 and I think that's really the way to go, because 0:02:00.520 --> 0:02:03.480 the economy is starting to slow now, even though it's 0:02:03.520 --> 0:02:06.200 doing very well. It's gonna slow from the four point 0:02:06.240 --> 0:02:09.320 two percent pace in the second quarter to finish the 0:02:09.400 --> 0:02:13.079 year probably with around a three percent growth UH in 0:02:13.160 --> 0:02:15.120 the back half of the year between Q three and 0:02:15.200 --> 0:02:17.560 Q four, and then it's probably gonna slow a little 0:02:17.600 --> 0:02:19.800 bit below that for next year. So your argument at 0:02:19.800 --> 0:02:22.200 the moment, the argument that you're pushing is stay invested, 0:02:22.280 --> 0:02:25.040 but get a little bit more defensive. Yes, I think 0:02:25.360 --> 0:02:27.880 defensive growth is the place to be as long as 0:02:27.919 --> 0:02:32.160 the FEDS tightening rates are rising. When the Fed titans 0:02:32.280 --> 0:02:35.560 pas go down, it happens virtually every single time, and 0:02:35.639 --> 0:02:37.639 it's happened so far this year. We started the year 0:02:37.680 --> 0:02:40.440 with an eighteen pe on four earnings. Now we're down 0:02:40.480 --> 0:02:44.320 to sixteen. Uh. If the Fed were to stop tightening, 0:02:44.520 --> 0:02:49.240 I would be a little bit more aggressive in terms 0:02:49.320 --> 0:02:52.760 of unwinding my more defensive growth posture. And I think 0:02:52.800 --> 0:02:54.760 that's the argument right now. It's home that with high ye, 0:02:54.840 --> 0:02:56.639 it's in high rights. It's going to weigh on any 0:02:56.680 --> 0:03:01.160 potential multiple expansion. Can the earnings deliver? I mean to me, Howard, 0:03:01.360 --> 0:03:04.359 what's so important here within your linkage of the economy 0:03:04.400 --> 0:03:07.080 into equities and your huge double digit success and how 0:03:07.160 --> 0:03:09.760 performance of alpha. We could talk all day about the 0:03:09.840 --> 0:03:13.200 under performance of the smart people acid allocating and such. 0:03:13.760 --> 0:03:17.160 Our the bottom line is the linkage of animal spirit 0:03:17.200 --> 0:03:21.400 phenomenal GDP over the revenue growth and it's had it's 0:03:21.440 --> 0:03:25.040 at a tangible pop. What happens if the economy not 0:03:25.240 --> 0:03:28.519 you know, gloom and doom, but if the economy ebbs. 0:03:29.200 --> 0:03:33.440 Does the revenue growth EBB. Well, the revenue growth has 0:03:33.480 --> 0:03:38.280 been surprisingly stable for the overall SMP five DRED anyway, 0:03:38.720 --> 0:03:42.080 it tends to come in right around five and I 0:03:42.120 --> 0:03:44.240 think that's going to continue. One thing that's I think 0:03:44.320 --> 0:03:46.960 key for thinking about next year, because we do have 0:03:47.520 --> 0:03:51.960 some headwinds. You know. I mentioned that rising rates, rising 0:03:52.040 --> 0:03:54.080 dollar is there as well. That's the headwind, and rising 0:03:54.120 --> 0:03:56.120 oil is all headwinds. But what I don't think is 0:03:56.160 --> 0:03:59.640 fully appreciated is that there's another round of fiscal stimulus 0:03:59.720 --> 0:04:02.560 that will hit the economy next year, not so much 0:04:02.600 --> 0:04:04.080 in the form of the tax cut, but in the 0:04:04.160 --> 0:04:07.720 form of increased government spending and so and and even 0:04:07.840 --> 0:04:11.400 with some friction on the trade front, the fiscal boost 0:04:11.480 --> 0:04:13.840 that that we get next year is going to overwhelm that. 0:04:14.160 --> 0:04:17.720 So the economy is in pretty good shape. And I 0:04:17.839 --> 0:04:22.400 don't see on the horizon a situation where you'd say, 0:04:22.520 --> 0:04:24.320 let's worry about a receiption. John, I think this is 0:04:24.400 --> 0:04:27.640 critical from Howard wards. Optimism is huge odd performance over 0:04:27.760 --> 0:04:32.800 five even ten years. But the gloom that's out there 0:04:32.839 --> 0:04:35.640 and we're all steeled for Friday doom and gloom equity letters. 0:04:36.320 --> 0:04:39.000 Is not only that, but in the jobs report today 0:04:39.360 --> 0:04:42.000 it hasn't slowed down much. I mean, the gloom story 0:04:42.080 --> 0:04:43.800 is going to be sort of presented to straight off 0:04:43.800 --> 0:04:45.800 than the numbers drop when you get better wage growth 0:04:45.839 --> 0:04:47.760 at some point of the next several months. The one 0:04:48.120 --> 0:04:50.800 you see the cost Prussia, the cost inflation is that Howard, 0:04:50.800 --> 0:04:52.640 I want to get to this argument that actually we 0:04:52.680 --> 0:04:58.360 could get EPs acceleration through as well. That's not can happen. 0:04:58.760 --> 0:05:00.600 It's not gonna You don't think that can happen. No, 0:05:00.800 --> 0:05:03.720 because you had the big boost this year from the 0:05:04.000 --> 0:05:07.360 tax reform. Without the tax reform, we would have had 0:05:07.560 --> 0:05:09.920 maybe twelve percent growth and earnings this year, and with 0:05:10.120 --> 0:05:15.080 it it's over. And so the expectations for next year 0:05:15.240 --> 0:05:18.120 is that we'll have and I'm talking SMP well, have 0:05:18.320 --> 0:05:22.800 SMP five earnings growth of approximately ten next year, and 0:05:23.080 --> 0:05:25.800 maybe just a hair less than that in two thousand twenty, 0:05:25.839 --> 0:05:27.520 even though it's a little bit early to be focused 0:05:27.560 --> 0:05:32.000 on that. So we can't we can't do better, uh 0:05:32.040 --> 0:05:34.680 in two thousand and nineteen because we don't have the 0:05:34.760 --> 0:05:38.160 big tax cut to hit earnings the way it has 0:05:38.240 --> 0:05:40.760 this last year. And one thing that that tax cut 0:05:40.839 --> 0:05:44.919 has done. In addition to having the good, good economy, 0:05:45.360 --> 0:05:48.960 with the change in the repatriation of foreign cash, the 0:05:49.240 --> 0:05:51.680 US companies have been able to not only continue to 0:05:51.720 --> 0:05:55.159 buy back stock at a record rate about seven billion 0:05:55.200 --> 0:05:59.719 dollars this on a trailing twelve month basis, that's almost 0:06:00.040 --> 0:06:02.800 well what it was in the previous year. But they're 0:06:02.800 --> 0:06:05.840 also able to boost capital spending by about eight percent. 0:06:06.480 --> 0:06:10.320 Uh So we've got about about eight hundred billion dollars 0:06:10.480 --> 0:06:13.560 of capital spending. Now that's that's projected for the next 0:06:13.600 --> 0:06:16.360 twelve months. This is a big change, so you get 0:06:16.400 --> 0:06:18.680 the fiscal stimulus for next year. And I should have 0:06:18.760 --> 0:06:22.320 mentioned also a nice increase in capital spending that we've 0:06:22.320 --> 0:06:24.760 been waiting for for a long time, you know. I 0:06:24.880 --> 0:06:28.279 I look Howard at at what to buy, and we've 0:06:28.360 --> 0:06:32.200 hardly touched on the financials today. Every conversation John and 0:06:32.279 --> 0:06:35.720 I have is thumb up, thumb down on the financials. 0:06:35.760 --> 0:06:40.120 Do they have the cash generation that's required for Gabelli? Yes, 0:06:40.200 --> 0:06:43.880 they do. Tom. The financial sector, of course, has a 0:06:44.120 --> 0:06:46.800 variety of names in it depending on which indices you 0:06:46.880 --> 0:06:49.640 look at, because it can include the the visas and 0:06:49.760 --> 0:06:52.200 the master cards and the pay pals and a number 0:06:52.240 --> 0:06:55.360 of non bank financial service companies, but it also obviously 0:06:55.400 --> 0:06:57.560 includes the bank, but the banks, but I would say 0:06:57.600 --> 0:07:00.920 across the board. While of these companies are are in 0:07:01.040 --> 0:07:04.480 a position where they're generating handsome free cash flowers, and 0:07:04.600 --> 0:07:08.280 the banks, the banks are beneficiaries of higher rates. But 0:07:08.360 --> 0:07:10.960 of course if the yield curve continues to flatten, that's 0:07:11.000 --> 0:07:12.320 not going to help them so much. And of course 0:07:12.400 --> 0:07:15.000 loan demands a factor. But generally speaking, this should be 0:07:15.000 --> 0:07:17.720 a very good period for the bank's printing money, free 0:07:17.760 --> 0:07:21.520 cash flow, buying backstock and increasing dividends. Howard, Um, this 0:07:21.640 --> 0:07:24.280 is really important, and that that I've got to be 0:07:24.400 --> 0:07:27.840 inflicted upon me weekend English football here in the next 0:07:27.880 --> 0:07:31.040 coming three hours with John and his other pets. We 0:07:31.120 --> 0:07:35.560 were about John, did you see the twenty four page 0:07:35.760 --> 0:07:40.840 New York Post is sound the fold out Yankees? And 0:07:42.080 --> 0:07:44.240 this is the fold out for those of you worldwide 0:07:44.480 --> 0:07:50.320 and coast to coast Boston Monster. Yes, And Howard, would 0:07:50.360 --> 0:07:51.920 you as a as a die in the world New 0:07:52.000 --> 0:07:56.240 Yorker explain to Mr Farrell's specialists is to seven zip codes. 0:07:56.480 --> 0:07:59.000 Doesn't get any better than Yankees, Red Sox come to 0:07:59.080 --> 0:08:03.080 fall and it's layoffs. It is absolutely the the best 0:08:03.200 --> 0:08:06.080 drama that baseball can produce. So I'm looking forward to 0:08:06.160 --> 0:08:09.600 what's the equivalent in English football. I'm gonna send Manchester 0:08:09.680 --> 0:08:12.840 United Liverpool as a league game. That would probably be 0:08:12.920 --> 0:08:16.240 a big big league game traditionally speaking, but they don't 0:08:16.480 --> 0:08:20.080 tie in baseball. And I should say, Mario, if you're listening, uh, 0:08:20.480 --> 0:08:21.920 you can go ahead and invite me to come to 0:08:22.000 --> 0:08:25.840 one of these games. Does does Mary I have a box? 0:08:26.400 --> 0:08:27.840 What do you mean? Does Mary I'll have a box? 0:08:28.040 --> 0:08:30.240 Is the Pope Catholic? Because you got a box? That 0:08:32.240 --> 0:08:36.160 not one of those he has seat? You know, your 0:08:36.840 --> 0:08:42.120 nice seats. It's not how many seats around the table. 0:08:42.600 --> 0:08:44.319 Just that's why I'm asking hap. It's not one of those. 0:08:44.360 --> 0:08:48.319 It's not one of those expensive sas that Mario Gabelli 0:08:48.400 --> 0:08:50.839 just wants to be like the wonderful Michael Pricing the 0:08:50.920 --> 0:08:54.080 Yankees rock on his finger. You know, when Michael Price 0:08:54.120 --> 0:08:57.040 would show up, he'd always wear his Yankees ring just 0:08:57.240 --> 0:09:00.760 to aggravate me. It's like, yeah's sick, it's blended. I 0:09:00.800 --> 0:09:03.560 don't think it's too difficult to antrovate you. No, that's true. 0:09:03.920 --> 0:09:07.400 That's day morning, to be honest with you worldwide, This 0:09:07.720 --> 0:09:20.439 Yankees red sox, this is Bloomberg. We want to go 0:09:20.520 --> 0:09:22.840 over now to the policy of driving the American labor 0:09:22.880 --> 0:09:26.640 economy forward. We can do that with Betsy Stevenson at Michigan, 0:09:27.040 --> 0:09:30.280 former chief economists for Department of Labor, among other things, 0:09:30.320 --> 0:09:33.680 and one of our most thoughtful thinkers on the idea 0:09:33.760 --> 0:09:37.199 of policy, on the idea of the broad spectrum of 0:09:37.240 --> 0:09:41.640 the American labor economy, Betsy I mentioned earlier with Jim Blastman, 0:09:41.800 --> 0:09:46.040 it is a gilded age. There is an inequality. Is 0:09:46.080 --> 0:09:49.200 this better job economy is an Eisenhower like three point 0:09:49.320 --> 0:09:54.040 seven unemployment rate bringing our inequalities to a lesser point 0:09:56.120 --> 0:10:00.560 um So clear respect, it is because take a look 0:10:00.720 --> 0:10:05.080 at um the unemployment rate to see that unemployment has 0:10:05.200 --> 0:10:10.280 come down sharply for people with less education UM, and 0:10:10.400 --> 0:10:15.120 that's created a reduction in inequality. There is a reduction 0:10:15.200 --> 0:10:19.280 in inequality. But I'm getting so much mail arguing when 0:10:19.360 --> 0:10:22.959 market economists, people like Dr Glassman say that we're a 0:10:23.040 --> 0:10:25.640 fully employed America, there's a huge body of people that 0:10:25.720 --> 0:10:28.400 don't agree with that, including there would suggest a lot 0:10:28.440 --> 0:10:31.800 of people that support President Trump as well, we've got 0:10:31.880 --> 0:10:35.480 wage growth, and let's say it's three round, But is 0:10:35.760 --> 0:10:38.680 it a barbell wage growth where some are getting large 0:10:38.760 --> 0:10:43.000 grade growth and many others are getting less than large. Yeah, 0:10:43.040 --> 0:10:44.679 so that may be clear when I say that this 0:10:44.880 --> 0:10:48.440 is helping with inequality and helping him one dimension, which 0:10:48.559 --> 0:10:52.440 is that we're seeing people across the spectrum being able 0:10:52.520 --> 0:10:56.319 to find work. Now, the the quality of that work, 0:10:56.400 --> 0:10:58.760 the desirability of that work, and how much it pays 0:10:59.000 --> 0:11:02.959 it's still varying enormously. Um, we're seeing wage gates that 0:11:03.080 --> 0:11:05.439 continue to go primarily to the top end of the 0:11:05.520 --> 0:11:09.520 income distribution. We have seen nominal wage growth pick up slightly, 0:11:09.559 --> 0:11:12.280 but we've also seen inflation pick up slightly, and so 0:11:12.440 --> 0:11:16.000 we're not really seeing any pickups in real wage growth. 0:11:16.559 --> 0:11:19.960 And real wage growth is what matters for the bottom line. 0:11:20.040 --> 0:11:22.800 We can't care about not how many dollars in your pocket, 0:11:22.880 --> 0:11:25.320 but what you can fly with those dollars. Betsy Stevenson, 0:11:25.400 --> 0:11:28.680 we'd like a longer conversation here in the coming days 0:11:28.800 --> 0:11:41.480 and weeks at the University of Michigan. There are any 0:11:41.559 --> 0:11:44.000 number of things to speak of with Timothy O'Brien of 0:11:44.040 --> 0:11:47.959 Bloomberg Opinion, including his definitive work on the finances of 0:11:48.000 --> 0:11:51.240 the president. Maybe we'll touch on that here in a moment. 0:11:51.520 --> 0:11:54.120 What he is is a student of history, and Mr 0:11:54.200 --> 0:11:57.360 O'Brien and I would agree given the belt Way up 0:11:57.520 --> 0:12:00.520 or over Judge Kavana on all somehow of the number 0:12:00.559 --> 0:12:05.040 of people, Tim that don't know their history, it's just breathtaking. 0:12:05.160 --> 0:12:09.440 Noah Feldman with that fabulous Bloomberg opinion article today, going 0:12:09.520 --> 0:12:12.160 back to the scorpions and going back to the court 0:12:12.240 --> 0:12:16.320 of another time. In a resume, Tim, you always see 0:12:16.400 --> 0:12:20.719 this the first in his family to attend college. His 0:12:20.880 --> 0:12:24.760 father was a metal lather buried in the factories of Pittsburgh, 0:12:25.280 --> 0:12:29.040 and Orange Hatch made it through academics, growing up in 0:12:29.160 --> 0:12:31.959 poverty out to Utah and to be a force of 0:12:32.000 --> 0:12:35.120 a Senate. The son of a metal latherer is going 0:12:35.200 --> 0:12:38.480 after the guy living above Gucci on Fifth Avenue. What's 0:12:38.520 --> 0:12:42.320 Orange Hatch want from President Trump? Well, this is interesting, 0:12:42.440 --> 0:12:45.439 tom Or. This week, after New York Times dropped this 0:12:45.559 --> 0:12:50.240 huge story on the Trump families tax maneuvers over decades, 0:12:51.320 --> 0:12:53.959 Hatch said that he thought that the president should release 0:12:54.040 --> 0:12:57.720 his tax returns, which is is an interesting thing given 0:12:57.840 --> 0:13:00.720 that Hatch has largely been support sort of of most 0:13:00.760 --> 0:13:03.160 of the president's policies. And as we know, the president 0:13:03.200 --> 0:13:06.080 doesn't want to release his tax returns. So one wonders 0:13:06.160 --> 0:13:10.440 why now, And perhaps it's that, uh, there's damage being 0:13:10.600 --> 0:13:15.560 done by uh, this lack of disclosure around the president finances. 0:13:15.679 --> 0:13:18.080 I've asked you this before. Let's get an update. What's 0:13:18.080 --> 0:13:21.360 in the tax returns. The tax returns would show how 0:13:21.520 --> 0:13:25.840 robust his businesses really are. He doesn't run a fortune empire. 0:13:25.960 --> 0:13:30.440 It's a boutique family business that's largely about marketing. Um. 0:13:30.640 --> 0:13:33.079 It would show what kind of money he's getting overseas. 0:13:33.200 --> 0:13:35.960 That's obviously relevant in the context of the Muller investigation. 0:13:36.400 --> 0:13:38.640 It's relevant in the context of just good government. I 0:13:38.679 --> 0:13:42.120 think we should know what possible influences are coming to 0:13:42.200 --> 0:13:44.400 bear on the person in the Oval office. George Worst, 0:13:44.480 --> 0:13:47.000 Senor and maybe George Bush Jr. You know, they had 0:13:47.040 --> 0:13:49.959 oil interests. I mean, they were transactional and they and 0:13:50.040 --> 0:13:53.959 they release their taxes, and they created effective trusts to 0:13:54.720 --> 0:13:57.440 insulate them from any decisions around those holdings once they 0:13:57.440 --> 0:14:00.280 became president. President Trump has done neither of those, I 0:14:00.320 --> 0:14:02.400 mean within that is, and I think it's a big 0:14:02.480 --> 0:14:04.880 deal that four year old orange hatches saying, come on 0:14:05.080 --> 0:14:08.280 now is the time or any interest in that? I 0:14:08.360 --> 0:14:10.880 think there's gonna be ample interests after the midterms. Okay, 0:14:10.960 --> 0:14:13.679 what happens in the mid terms, Let's say to two things. 0:14:13.920 --> 0:14:17.160 Democrats take the House and just percolating now with Greg 0:14:17.320 --> 0:14:20.600 Vla and Mike Allen and Axials and others. Democrats take 0:14:20.640 --> 0:14:23.480 the Senate. Those are two different things, aren't there they are? 0:14:23.640 --> 0:14:28.120 And if um, on the tax front, if if Democrats 0:14:28.160 --> 0:14:30.000 don't have both houses, it would be hard for the 0:14:30.080 --> 0:14:33.120 Congress to compel the return. But if they do, they 0:14:33.160 --> 0:14:36.240 can literally, in conjunction with the I R S, force 0:14:36.280 --> 0:14:38.080 a release of the president. Could that be the I 0:14:38.200 --> 0:14:40.800 R S as an executive branch, isn't it? But the 0:14:41.200 --> 0:14:43.320 the I R S has to be beholden to certain 0:14:43.360 --> 0:14:46.040 mandates coming out of the Congress in certain situations, and 0:14:46.160 --> 0:14:48.080 this is one of them. Just because of time. Let's 0:14:48.680 --> 0:14:50.680 switch gears here the New York Times article and the 0:14:50.760 --> 0:14:55.080 president's finances. Um, everyone agreed, whatever their party it was, 0:14:55.400 --> 0:14:59.200 it was a profound investigative peace. What was the thing 0:14:59.280 --> 0:15:03.320 in there that made Tim O'Brien sit up and read um? 0:15:03.440 --> 0:15:06.240 I think the the the extensive detail they had on 0:15:06.360 --> 0:15:09.240 the use of tax shelters by the Trump family over 0:15:09.400 --> 0:15:14.680 decades to shelter everybody did it, but everybody did it, 0:15:14.760 --> 0:15:16.120 and I think a big portion of what they did 0:15:16.240 --> 0:15:19.240 was perfectly legal. There is a portion in there that smells, 0:15:19.480 --> 0:15:21.920 that looks dubious, but it's a long time ago and 0:15:22.000 --> 0:15:23.840 it's a debate. I I don't think there's gonna be 0:15:23.840 --> 0:15:25.960 any criminal charges coming out of this. There may be 0:15:26.080 --> 0:15:28.600 some civil fines. The one thing that really pops to 0:15:28.680 --> 0:15:31.200 me the whole piece was that Donald Trump, while his 0:15:31.280 --> 0:15:35.000 father slipped into Alzheimer's, attached to coddstle to his father's 0:15:35.040 --> 0:15:38.400 will in order to try to get executive authority and 0:15:38.440 --> 0:15:41.680 to become the executor over his father's entire business empire. 0:15:42.320 --> 0:15:45.000 And Fred noticed this even though he was getting cloudy, 0:15:45.320 --> 0:15:47.200 and he asked his daughter, the judge, to look at it. 0:15:47.320 --> 0:15:49.560 She also thought it smelled. So they took the whole 0:15:49.600 --> 0:15:52.360 process out of Donald's hands and hired a new state 0:15:52.440 --> 0:15:55.840 attorney for themselves so they could redraft Fred's will so 0:15:56.120 --> 0:15:58.680 his son couldn't get control of the empire. Is that 0:15:58.840 --> 0:16:04.200 a state attorney of elible for various investigations now, uhily, 0:16:04.280 --> 0:16:06.960 but again these are you know that there substantial limitations here. 0:16:07.000 --> 0:16:09.240 A lot of this stuff is ancient. Let us talk 0:16:09.360 --> 0:16:13.440 about uh Kavana again, Tim O'Brien with his Bloomberg opinion, 0:16:13.960 --> 0:16:17.240 and and it is very much that in opinion, uh, 0:16:17.400 --> 0:16:19.520 your team with David Shipley has written a number of 0:16:19.680 --> 0:16:23.400 editorials about the nuances of this moment. What will you 0:16:23.520 --> 0:16:28.120 watch today and then end the Saturday vote? Well, I 0:16:28.320 --> 0:16:32.160 think clearly how um you know the key Republican senators 0:16:32.240 --> 0:16:35.920 on this particular voter lining up Jeff Lake, Lisa Murkowski, 0:16:35.960 --> 0:16:38.000 and Susan Collins that you know, we've known that for 0:16:38.040 --> 0:16:40.760 a while, that that hasn't changed. I think what's interesting 0:16:40.920 --> 0:16:45.240 is the debate around Kavanaugh himself has moved um off 0:16:45.520 --> 0:16:50.560 of uh sexual harassment or sexual assaulted onto issues about 0:16:50.600 --> 0:16:54.040 his credibility and his rascity. Yeah, but even you know, 0:16:54.120 --> 0:16:56.240 the people making the argument about his temperament that that's 0:16:56.280 --> 0:16:58.760 not an issue. They haven't taken on this core thing 0:16:59.040 --> 0:17:03.680 about the fact that he lied demonstrably during his testimony. 0:17:03.720 --> 0:17:06.520 I was thunderstruck by his op ed in the Wall 0:17:06.560 --> 0:17:08.760 Street Journal today. I mean, I'm sure if he died one, 0:17:09.600 --> 0:17:11.560 Tim O'Brien, you would have said, sure, we'll run that 0:17:11.640 --> 0:17:15.399 op ed. I get that, but was that appropriate that 0:17:15.520 --> 0:17:18.760 a nominee would would what, you're smarter than me on 0:17:18.840 --> 0:17:22.600 a language? What's the right word? Advocate for himself. He's 0:17:22.600 --> 0:17:25.399 been for quite a while. He was lobbying on the boats, 0:17:25.480 --> 0:17:28.400 like in six hours. He's been doing that throughout. I'm saying, 0:17:28.440 --> 0:17:30.879 I don't, I don't, I think, I don't think he can. 0:17:31.040 --> 0:17:34.560 He's out of the box as a Supreme Court nominee. 0:17:34.640 --> 0:17:37.040 He's doing things no nominee has done before. In that 0:17:37.119 --> 0:17:39.960 op ed he said that he would hate to see 0:17:40.040 --> 0:17:45.760 the Supreme Court broken apart by partisanship. But that's that's 0:17:45.760 --> 0:17:48.040 said by the conductor of the train that has already 0:17:48.080 --> 0:17:50.560 left the station. He's part and parcel of that problem. 0:17:50.760 --> 0:17:53.920 Is he setting himself up with whatever events occur where 0:17:53.920 --> 0:17:55.600 he says, you know, I've been through the process for 0:17:55.640 --> 0:17:58.040 the good of the country, and Tim O'Brien, I'm gonna 0:17:58.080 --> 0:18:00.159 pull my nomination. Is that what we're gonna in the 0:18:00.240 --> 0:18:02.040 next eighteen I don't think he's going to do that 0:18:02.119 --> 0:18:05.760 unless you see the Republicans turn against like within where 0:18:05.880 --> 0:18:07.800 we go from here and you know, obviously we could 0:18:07.800 --> 0:18:10.240 talk to Professor Felman or others, and and folks, I 0:18:10.240 --> 0:18:13.600 should say, Bloomberg opinion and Bloomberg in general are legal 0:18:13.720 --> 0:18:18.160 coverage has been fabulously balanced, I think, with different opinions, 0:18:18.200 --> 0:18:21.280 whether it's John Coffee on Tesla or it's it's a 0:18:21.400 --> 0:18:25.359 Noah Felman of Harvard on the history of the Supreme Court, 0:18:25.480 --> 0:18:29.880 and some of these these emotional culture work resh preneurs 0:18:29.920 --> 0:18:33.480 as well. Leading a conservative and a uniquely conservative charge 0:18:33.920 --> 0:18:37.000 is well, let's go there. When this is done the 0:18:37.119 --> 0:18:41.919 first Wednesday of November, what will be the new conservative thought? 0:18:42.560 --> 0:18:45.480 Or is it still Trump? Is um even going into 0:18:46.680 --> 0:18:51.080 on the right after the midterm? I I think, Um, Look, 0:18:51.160 --> 0:18:53.600 I you know, I think all journalists have been chastened 0:18:53.600 --> 0:18:55.200 about trying to predict where votes are going to go. 0:18:55.320 --> 0:18:58.480 But if um, the polling is to be relied upon, 0:18:58.880 --> 0:19:01.320 it looks like the Democrats of a very decisive advantage 0:19:01.320 --> 0:19:03.399 in the House and the Senate is still up in 0:19:03.440 --> 0:19:06.120 the air. I think even if the Democrats get the House, 0:19:06.240 --> 0:19:07.720 a lot of what Trump has been able to do 0:19:07.840 --> 0:19:13.320 thus far is going to get complex because committees like Judiciary, Oversight, 0:19:13.440 --> 0:19:17.719 and Intelligence are going to start launching subpoena bombs at 0:19:17.760 --> 0:19:19.520 the White House, and it's going to really tie the 0:19:19.560 --> 0:19:23.600 White House up in knots. Let's talk journalism. Uh, you've 0:19:23.640 --> 0:19:25.800 been a student of this with your with your work 0:19:25.880 --> 0:19:29.880 with different vendors over the years. Mark benny Off wants 0:19:29.960 --> 0:19:34.200 to buy Time magazine. What would you do with it? Well, 0:19:34.320 --> 0:19:35.840 you know, I think we're in an era right now 0:19:35.880 --> 0:19:39.359 where there are wealthy people who see media properties as 0:19:40.000 --> 0:19:43.920 as entities that they can revive by simply flooding it 0:19:44.240 --> 0:19:47.520 with resources, and as you know, it's much more complex 0:19:47.600 --> 0:19:50.760 than that. I think Jeff Bezos taking over the Washington 0:19:50.840 --> 0:19:53.000 Post was a happy event for journalism, and I hope 0:19:53.040 --> 0:19:55.639 for him. Uh he's bringing some innovation to it, but 0:19:55.680 --> 0:19:58.200 he's also he also got his hands on a legacy 0:19:58.280 --> 0:20:01.040 newspaper that already had a loyal audience and brought in 0:20:01.119 --> 0:20:04.440 a horse from Boston. I should point out Baron, and 0:20:04.520 --> 0:20:07.359 he got the great Mighty Baron. But you know, he 0:20:08.119 --> 0:20:11.040 he was able to bring resources to something that was 0:20:11.200 --> 0:20:16.240 already a fairly enterprise. Time is time question, No, because 0:20:16.240 --> 0:20:19.600 I think there's a different Time is making a contrast. 0:20:19.720 --> 0:20:21.399 I don't think the Times probably, I don't think that. 0:20:21.400 --> 0:20:24.520 I don't think the Time Inc. Properties are at the 0:20:24.640 --> 0:20:27.160 top of their game in the same way the Washington Post. 0:20:27.720 --> 0:20:30.399 And that matters if you're gonna have a successful media enterprise. 0:20:30.480 --> 0:20:32.760 Timo Brian, thank you so much. Timothy O'Brien with Bloomberg 0:20:32.840 --> 0:20:34.399 Opinion writing and I'll be writing or what do you 0:20:34.480 --> 0:20:36.760 publish it today? I mean your's day starts at what 0:20:37.800 --> 0:20:44.639 st five m every day? Are on my way to 0:20:44.720 --> 0:20:47.160 the office. Very good, Timo Brian, thank you so much. 0:20:47.240 --> 0:20:50.040 And look for his work, particularly on the finances of 0:20:50.080 --> 0:20:52.760 the president. Of course, his important book of a few 0:20:53.480 --> 0:21:06.480 years ago for New York City for our audience worldwide, 0:21:06.480 --> 0:21:08.879 and please to welcome our listeners on Bloomberg Radio and 0:21:09.040 --> 0:21:12.159 on Bloomberg TV for the Trump administration's view on what 0:21:12.359 --> 0:21:15.800 is happening. Let's bring in Larry Carblo, National Economic Council Director, 0:21:15.880 --> 0:21:18.240 who joins us now. Larry, good morning to you, sir, 0:21:18.960 --> 0:21:21.440 Thank you, Jonathan, appreciate it very much. It's good to 0:21:21.480 --> 0:21:23.040 see and we won't get wrapped up in that one 0:21:23.160 --> 0:21:25.440 thirty four because the upward revision is pretty decent and 0:21:25.480 --> 0:21:29.320 the overall picture for the labor markets. So let's start 0:21:29.400 --> 0:21:32.040 just stick it in let's I just want to make 0:21:32.160 --> 0:21:34.520 that point. I don't mean to interrupt, but that's a 0:21:34.600 --> 0:21:37.239 really key point because you, of all people, know how 0:21:37.359 --> 0:21:40.280 these numbers bump around. So you got a one thirty 0:21:40.359 --> 0:21:44.000 something and you've got an eighty thousand plus revision, So 0:21:44.200 --> 0:21:46.800 this is actually you know, the increase in the level 0:21:46.880 --> 0:21:51.919 for September is uh what the two thousand? That's awful, 0:21:51.920 --> 0:21:53.840 good number. I just want to make that point. It's 0:21:53.840 --> 0:21:55.480 a point well made, Larry. So let's talk about the 0:21:55.560 --> 0:21:58.600 unemployment rate for the eight year old for the administration. 0:21:58.920 --> 0:22:01.400 What's your view on how low this can go? Because 0:22:01.440 --> 0:22:03.960 many economists the same work full employment, this is kind 0:22:04.000 --> 0:22:05.560 of it. We can't go much lower than this. You 0:22:05.600 --> 0:22:08.240 have a different opinion, Lowry, Well, I don't want to 0:22:08.280 --> 0:22:11.320 give a forecast, per se, but I do think it 0:22:11.440 --> 0:22:14.240 can go lower. And I think people are moving back 0:22:14.280 --> 0:22:20.200 into the labor force as wages and incentives increase, you know, 0:22:20.359 --> 0:22:23.560 lower taxes and so forth, you've got fatter paychecks going. 0:22:24.160 --> 0:22:26.840 I just did some calculations. I hope I get this right. 0:22:27.440 --> 0:22:31.840 The average hourly earnings up two point eight percent year 0:22:31.880 --> 0:22:34.480 on year in the report. But Jonathan, I like to 0:22:34.560 --> 0:22:37.520