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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: This is a Bloomberg Business Flash and I'm Karin Moscow.

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Speaker 1: dot com slash, c m E Group US DOCK Index

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Speaker 1: futures are higher, indicating equities will extend their rally as

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Speaker 1: signs of a stronger economy spurred speculation a can we

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Speaker 1: stand higher interest rates? We checked the markets every fifteen

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Speaker 1: minutes throughout the trading day on the Bloomberg SNP EMNY

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Speaker 1: futures of seven points now, EMUNI futures of fifty six

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Speaker 1: and nas vacumni futures up sixteen decks. In Germany's up

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Speaker 1: one point two percent. Tenure Treasury is down one thirty second,

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Speaker 1: the yield one point eight six percent. Nimex screwed oil

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Speaker 1: up one point one percent, or fifty one cents to

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Speaker 1: a barrel. Comex goal down six ten percent or six

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Speaker 1: dollars ninety cents at thirty on ounced the Euro at

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Speaker 1: dollar eleven forty seven and the yen one ten point

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Speaker 1: three four and City Group will pay FO five million

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Speaker 1: dollars to resolve US Commodity Futurist Trading Commission claims that

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Speaker 1: the Bank attempted to manipulate the global benchmarks for interest

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Speaker 1: rate product multiple times from two thousand seven to twelve.

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Speaker 1: That's a Bloomberg business flash, Tom and Mike Karen, thanks

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Speaker 1: so much. This is a joy to scream. I heard

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Speaker 1: the other day over on Park Avenue up in the sixties,

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Speaker 1: like sixty seven and Park is only Richard Hats would

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Speaker 1: have in the same room someone that assisted Secretary Clinton

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Speaker 1: and the architecture of our economic diplomacy, and somebody from

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Speaker 1: Bush Juniors administration is well even better, they would scream

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Speaker 1: and yell. It's like the title of their relationship at

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Speaker 1: CFR wear by other means. Jennifer Harris and Robert Blackwell

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Speaker 1: join us right now. Do you two discuss our foreign

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Speaker 1: Paul l See Jennifer, do you discuss our foreign policy

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Speaker 1: on the first Wednesday of November this year like what

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Speaker 1: it could be in this book? Yes, we do. We

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Speaker 1: try to lay out, you know, if a full, very

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Speaker 1: specific twenty point plan for what it would mean to

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Speaker 1: rebuild US born policy, placing what we called you economics

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Speaker 1: at the center. What is the division, Mr Blackgow, with

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Speaker 1: your your distinguished career in diplomacy starting in the late

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Speaker 1: sixties and the many things you did, including being ambassador

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Speaker 1: India ambassador, what is a differential between Clinton state craft

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Speaker 1: and Trump state craft that you see right now is

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Speaker 1: the Secretary and Mr Trump try to read war by

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Speaker 1: other means. What's that great divide? Well, it's pretty hard,

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Speaker 1: uh so far in the campaign, although I hope it

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Speaker 1: gets clarified, uh to make a judgment about that. Uh.

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Speaker 1: Donald Trump has given only one speech on foreign policy,

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Speaker 1: prepared speech, I guess, perhaps to the one to APAC

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Speaker 1: the US Israel Group, and uh, Secretary Clinton has concentrated

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Speaker 1: on the domestic issues. But what jan and I argue

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Speaker 1: in the book is that, as she just said, is

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Speaker 1: that both parties have forgotten the use of economic instruments

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Speaker 1: for geo political purposes and in recent decades have reached

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Speaker 1: for the gun too often. Let me ask you this

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Speaker 1: question is a sharp distinction. Secretary Clinton, and we've had

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Speaker 1: ambassador Harmats in any number of times? Am I right

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Speaker 1: that she emphasized economic diplomacy with enter tenure a Secretary

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Speaker 1: State It was one of her important themes. Jen should

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Speaker 1: speak to this because she was in she lived. Yeah,

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Speaker 1: uh well, I think from Afar, and we say this

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Speaker 1: in the book. She was the first secretary in sometime

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Speaker 1: to actually address the issue of economic instruments for geopolitical purposes. However,

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Speaker 1: not much practically got done, perhaps partly because she left

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Speaker 1: after four years, partly because American foreign policy and the

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Speaker 1: Obama administration is run from the White House. But in

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Speaker 1: any case, you agree that statements theres I do think

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Speaker 1: you've seen a continuation of the centralization of power and

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Speaker 1: foreign policy in the White House. I think that you

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Speaker 1: know that that's trend started. It's here's here's what I

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Speaker 1: have to ask, the idea of using economic weapons. And

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Speaker 1: I'm glad we have you guys for a good long

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Speaker 1: period time because we want to get into exactly what

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Speaker 1: you're talking about. But I just have to start by asking,

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Speaker 1: when you say the use of geoeconomics and economic weapons

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Speaker 1: as part of diplomacy, how are you different from what

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Speaker 1: Donald Trump is saying? You know that for people are

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Speaker 1: gonna say, well, you look at the candidates, and Donald

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Speaker 1: Trump is saying, let's have trade wars, let's have you know, walls,

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Speaker 1: kick people out of the country, economics, sanctions. Basically sure,

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Speaker 1: So a lot of what Donald Trump is talking about

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Speaker 1: there is simply trade for trade sake. He is speaking

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Speaker 1: to a set of economic tools for economic ends whatever

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Speaker 1: you know when thinks right, right or wrong about using

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Speaker 1: those tools for those ends. But what we're really talking

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Speaker 1: about is the use of economic tools for geopolitical ends.

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Speaker 1: And you you do see hints of that and some

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Speaker 1: of what he said, But he's said a lot of things,

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Speaker 1: not all of them are easy to reconcile with one another.

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Speaker 1: Let me chime in and say this, which is uh again,

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Speaker 1: to make the distinction. As Jen said, he talks about

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Speaker 1: trade for trade sake. We ought to have better trade deals.

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Speaker 1: Our central argument is that trade can be an instrument

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Speaker 1: of our geopolitical strategic purposes. I would go further to say,

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Speaker 1: in fact, most of what he's said about trade would

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Speaker 1: weaken our geo political purposes, especially our alliances. What are

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Speaker 1: the distinction, then, what's the what's the difference between what

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Speaker 1: he's saying, and why would that hurt the US well,

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Speaker 1: because he essentially has UH has proposed a trade war

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Speaker 1: with the Japanese and if they don't respond, UH he

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Speaker 1: has said that he's willing to depart the US Japan Alliance,

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Speaker 1: which is the centerpiece of American power projection in Asia.

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Speaker 1: I want to get this in, Mike McKee if I can.

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Speaker 1: Jennifer Harris page two twenty nine past t PP the

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Speaker 1: Asian Pacific Round. It's one of your prescriptions here is

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Speaker 1: TPP dead? Based on what you've seen in the campaign

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Speaker 1: so far, I think it. It looks hard for President

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Speaker 1: Baba right now that there is some chance in the

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Speaker 1: lame duck. But there's an important distinction here with t

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Speaker 1: p P as a foreign policy instrument. The this administration,

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Speaker 1: like several before it, are quite comfortable marketing at TVP

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Speaker 1: and several trade deals as national security imperatives. When it

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Speaker 1: comes to selling a deal they've already negotiated, that's a

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Speaker 1: very different thing than negotiating our trade deals with geopolitical

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Speaker 1: objectives at the forefront. And to my mind, if you

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Speaker 1: were looking for a trade deal that solves for US

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Speaker 1: foreign policy challenges in Asia, you would have a different

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Speaker 1: deal than the one. We have an offering interesting. One

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Speaker 1: thing to talk about here, war by other means geoeconomics

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Speaker 1: and statecraft and important. But Robert Blackvill and Jennifer Harris

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Speaker 1: and we will continue on this in this very political season.

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Speaker 1: We need to get the markets open. Bloomberg Surveillance. We're

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Speaker 1: Explore scis next gen ideas at SCI c dot com

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Speaker 1: slash I m s good morning. I'm kerin Moscow along

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Speaker 1: with Tom Keene and Michael McKeon. Stocks are higher at

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Speaker 1: the open. The S and P five hundred up three

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Speaker 1: tenths per cent or five points to one down. Jones

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Speaker 1: Industrial average up three tenths per cent or fifty points

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Speaker 1: to seventeen thousand, seven hundred fifty five. Then as Dacs

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Speaker 1: up three tenths per cent or sixteen points to forty

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Speaker 1: eight seventy seven. Tenure Treasury up one thirty second the

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Speaker 1: yield one point five percent. That yell done. The two

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Speaker 1: year point nine two percent nim X screwed oil up

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Speaker 1: one percent or fifty eight cents to forty nine twenty

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Speaker 1: barrel COMACS gold is down eight tens per cent or

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Speaker 1: nine dollars forty cents to tw seventy announced. The Euro

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Speaker 1: at dollar eleven forty eight, the n one ten point

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Speaker 1: three eight. Tom and Mike, thank you so much. The

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Speaker 1: most talked about book and diplomacy for this season. Robert Blackwell,

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Speaker 1: Jennifer Harris, Lawrence Summers, and Dr Kissinger both rave about

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Speaker 1: the book, talk about a differential their war by other means,

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Speaker 1: geoeconomics and state craft with this Jennifer Harrison, Ambassador Robert

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Speaker 1: black with our former ambassador India um I love chapter ten,

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Speaker 1: page two fifty one with James Baker and the quote

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Speaker 1: never let the other fellows set the agenda, Jennifer, that's

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Speaker 1: the basis, whether Baker or Kissinger or Blackwell. Secretary Clinton

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Speaker 1: set the agenda on economics as part of our diplomacy.

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Speaker 1: I mean it was relatively original when she did that, right.

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Speaker 1: I am not a disinterested answer here. I yes, we

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Speaker 1: specialized in that it was really about restoring what was

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Speaker 1: a lost American art. We used to do this quite

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Speaker 1: well well, explain what we did and what we should

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Speaker 1: do well. Uh, for the first two hundred years of

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Speaker 1: American history. You look back and our leaders were quite

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Speaker 1: clear eyed, quite comfortable flexing power and economic terms. And

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Speaker 1: somewhere along the way things changed, Bob and I date

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Speaker 1: that to right around Vietnam. Whole host of reasons, but

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Speaker 1: instantly in the last couple of decades, it has been

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Speaker 1: the project of bringing China into the community of nations

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Speaker 1: and globalized markets. Began, perhaps as a strategic project, but

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Speaker 1: somewhere along the way it became more trade for trade

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Speaker 1: stake and uh, you fast forward to nine eleven, and

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Speaker 1: America has been too quick to reach for it's military

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Speaker 1: tools to sort of bombrow we out of every problem

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Speaker 1: for the last fixteen years. Why would we want to

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Speaker 1: do that? Mbuss or given the why would a president

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Speaker 1: want to do that? Even the awesome responsibility of having

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Speaker 1: to send young men to die in war, Well, you've

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Speaker 1: just described it. Because first of all, uh, the next

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Speaker 1: president will superintend the longest wars in American history. Despite

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Speaker 1: this president's commitment to get us out of them, he

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Speaker 1: found out it wasn't so easy and so uh uh.

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Speaker 1: And there are trouble spots all around the world, but

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Speaker 1: especially in the Middle East. And the question is how

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Speaker 1: does a president address those trouble spots. In the last

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Speaker 1: fifteen years, the answer has been send a hundred and

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Speaker 1: first airborne. But there are other ways to address them.

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Speaker 1: And uh, as Jen just said, for two centuries, we

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Speaker 1: knew how to do this. Louisiana purchase, we didn't uh.

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Speaker 1: In the in the eighteenth century, we didn't send troops

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Speaker 1: to occupy we bought it. The Martial Plan is the

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Speaker 1: best example. In the period right after the Second World War,

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Speaker 1: economic instruments to keep the Soviets from moving politically westward

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Speaker 1: in uh into Western Europe and so forth. And so

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Speaker 1: we hope the next president he or she will look

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Speaker 1: at these instruments carefully. One last point, if you look

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Speaker 1: at congressional hearings, try to find a congressional hearing in

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Speaker 1: which this subject is addressed, and then look at the

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Speaker 1: ten hearings which are about how effectively are we using

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Speaker 1: our military force? It dominates our strategic discussion. Well, Jennifer,

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Speaker 1: give me an idea of a problem that we can address.

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Speaker 1: I mean, we're not gonna buy Syria honoutly like we

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Speaker 1: bought Louisia the Lady territory. So what kind of problem

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Speaker 1: can we address in today's world geoeconomically? So uh, My

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Speaker 1: favorite kind of jeopardy of question of the last few

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Speaker 1: weeks is seven million dollars an he guesses to what

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Speaker 1: that might buy you? And the strategic menu for US

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Speaker 1: more policy, it's a it's Monday through Wednesday in Afghanistan,

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Speaker 1: and so when we began to think about, you know,

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Speaker 1: the the our envelope for civilian assistance, that's my starting point.

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Speaker 1: And looking at the Ukraine Russia crisis, I would argue

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Speaker 1: that if you are trying to make an example of Russia,

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Speaker 1: reminding the world that no country can invade another and

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Speaker 1: redraw territory boundaries by force, then what you do for

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Speaker 1: Ukraine matters at least as much as what you do

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Speaker 1: to Russia. Our entire assistants envelope for Ukraine last year

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Speaker 1: was about forty million dollars, so less than half of

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Speaker 1: the Monday through Wednesday in Afghanistan. If I can take

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Speaker 1: the Devil's advocate side on Ukraine, the argument is is, uh,

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Speaker 1: the government has historically been proven corrupt, and that's money

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Speaker 1: down a rattle. That's that's certainly true. But I think

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Speaker 1: there are there's you know, that still leaves some of

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Speaker 1: the room for the United States. I would look to

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Speaker 1: things like fuel subsidies. That's a lot of what's eating

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Speaker 1: up Ukraine's discal budget. And if you could begin deregulating

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Speaker 1: the sort of the energy industry there and rolling back

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Speaker 1: some of those fuel subsidies, you lessen Ukraine's dependence on Russia.

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Speaker 1: The decreining people have proven quite resilient, quite willing to

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Speaker 1: tolerate pain as long as they believe it's for some purpose.

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Speaker 1: And you could mount a real reform effort around those

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Speaker 1: subsidies probably open up twofold the amount of fiscal space there,

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Speaker 1: and for less than half of what we spent in

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Speaker 1: our entire assistant portfolio for Ukraine last year. And let

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Speaker 1: me just chime in and say and say that, Uh,

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Speaker 1: your good question has an certain which is the higher

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Speaker 1: or aid levels in various dimensions, the more influence we

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Speaker 1: have on the Ukrainian government. You're absolutely right that this

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Speaker 1: classically has been a corrupt insider government. But when we

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Speaker 1: go to them and say, well, here are the reforms

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Speaker 1: you need with such a small aid package, Uh, they're

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Speaker 1: not listening. Ambassador. You are from Kansas, I am in

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Speaker 1: uh state. Uh. MacArthur once called Eisenhower the best clerk

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Speaker 1: I ever had. Eisenhower threw back that MacArthur was like

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Speaker 1: being in drama dramatics class of General MacArthur. What would

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Speaker 1: General Eisenhower think of the discourse of your Republican politics today? Well,

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Speaker 1: I can't imagine that he would approve. Uh we had

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Speaker 1: I just recently. I think an example of that if

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Speaker 1: you try to say, who is the bad living embodiment

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Speaker 1: of Eisenhower Republicanism, I'd make an argument that it's Bob

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Speaker 1: Gates forty years UH. And I worked with Bob several

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Speaker 1: different times in various administrations. Uh. Just by the way,

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Speaker 1: another Kanson, UH, solid rock strategist, sensible and so forth.

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Speaker 1: And what do we see in the last week one

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Speaker 1: of our presidential candidates, Mr Trump attacking Bob Gates. This

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Speaker 1: is as I say, I think he'd be the closest

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Speaker 1: approximation to an Eisenhower. Republicans, I think, I think that's

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Speaker 1: an answer to one I UH, sensible like UH would

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Speaker 1: think about this debate. This is an important book. It

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Speaker 1: is squeezed into two d and sixty pages. Jennifer Harris

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Speaker 1: and Robert Blackwell from the Council on Foreign Relations and

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Speaker 1: all you need to know. When you can get Kissinger

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Speaker 1: and Summers on the same back cover of a book,

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Speaker 1: it gets your attention. This on our geo economics and statecraft.

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Speaker 1: The book is war by other means. I'll put that

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Speaker 1: out on social this morning. The market up nineties seven

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Speaker 1: points this morning. This hour surveillance brought you by Volvo Cars,

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Speaker 1: White Planes. Visit Volvo Cars White Planes dot com. Here's

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Speaker 1: Michael Barr with news headlines. My Tom, Thank you very much. Members,

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Speaker 1: of Congress want to get to the bottom of the

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Speaker 1: long lines at airport security that have caused people to

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Speaker 1: miss flights across the country. The House Homeland Security Committee

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Speaker 1: will be questioning the head of the Transportation Security Administration,

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Speaker 1: Peter Neffinger. Lawmakers likely will also ask Neffinger about Monday's

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Speaker 1: decision to remove the t S as top security official

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Speaker 1: from his post. How Speaker Paul Ryan has begun telling

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Speaker 1: confidence that he wants to end his standoff with Donald

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Speaker 1: Trump as according to two people close to Ryan, the

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Speaker 1: House Speaker is apparently worried the split has sharpened divisions

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Speaker 1: in the Republican Party. Trumpell campaign today in California, Vice

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Speaker 1: President Joe Biden says during all of his long service

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Speaker 1: and government, now is the worst time he's seen for

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Speaker 1: getting things done. This in the first time. It's the

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Speaker 1: worst time I think in modern history, short of the

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Speaker 1: Civil War, that this town is as dysfunctional as it

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Speaker 1: is right now. The suspect of the murders of nine

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Speaker 1: black people at a church in Charleston, South Carolina last

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Speaker 1: year's looking at the death penalty. Both the state and

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Speaker 1: federal prosecutors were seeking the death penalty against Dylan roof

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Speaker 1: Global News twenty four hours a day, powered by our

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Speaker 1: twenty four hundred journalists and more than a hundred fifty

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Speaker 1: news bureaus around the world at Michael Barr and Michael

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Speaker 1: bar thanks so much thousand, eight hundred two SMB five

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Speaker 1: two thousand and eighty six The VIX getting your thirteen

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Speaker 1: level fourteen point one eight Robert Blackwell with as Jennifer Harris.

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Speaker 1: We thank them war by other means. This is Bloomberg Surveillance.

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