1 00:00:00,080 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple Coarclay and Android 4 00:00:17,160 --> 00:00:20,520 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:24,480 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,239 --> 00:00:27,240 Speaker 2: Thank you for joining us on the Monday edition of 7 00:00:27,320 --> 00:00:30,160 Speaker 2: Balance of Power here on Bloomberg Radio Satellite radio channel 8 00:00:30,200 --> 00:00:33,000 Speaker 2: one twenty one. You can watch us on Bloomberg Originals 9 00:00:33,080 --> 00:00:34,920 Speaker 2: right now, and of course on YouTube. You can always 10 00:00:34,920 --> 00:00:37,879 Speaker 2: see us by searching Bloomberg Business News Live. And you'll 11 00:00:37,920 --> 00:00:39,640 Speaker 2: want to get on YouTube for this one because we 12 00:00:39,680 --> 00:00:42,040 Speaker 2: have an important conversation coming up for you here live 13 00:00:42,080 --> 00:00:45,480 Speaker 2: from Washington, where public safety is on the menu today. 14 00:00:45,479 --> 00:00:47,480 Speaker 2: We talked about it on Friday in the President late 15 00:00:47,479 --> 00:00:50,440 Speaker 2: on Friday evening announcing his plans to have a news 16 00:00:50,440 --> 00:00:54,200 Speaker 2: conference and it's already happened here in the nation's capital 17 00:00:54,760 --> 00:00:58,040 Speaker 2: with crime and safety in mind. The President is taking 18 00:00:58,080 --> 00:01:01,200 Speaker 2: control of the Washington metropolity to police Department. This is 19 00:01:01,240 --> 00:01:04,760 Speaker 2: a pretty big deal, and also deploying hundreds of National 20 00:01:04,760 --> 00:01:07,280 Speaker 2: Guard troops to cut down on crime and homelessness. In 21 00:01:07,319 --> 00:01:10,520 Speaker 2: the nation's capital. He talked about this in the briefing room, 22 00:01:10,560 --> 00:01:14,160 Speaker 2: in fact, and answered questions for quite some time, knowing 23 00:01:14,200 --> 00:01:16,479 Speaker 2: that this was coming. We just didn't have the details 24 00:01:16,640 --> 00:01:19,679 Speaker 2: exactly on how he was going to frame this. And 25 00:01:19,720 --> 00:01:22,479 Speaker 2: we'll be talking about it through the day. If you're 26 00:01:22,520 --> 00:01:25,600 Speaker 2: with us on ninety nine point one in Washington, DC, 27 00:01:26,280 --> 00:01:28,360 Speaker 2: we see you, and we'll be talking a lot more 28 00:01:29,000 --> 00:01:31,200 Speaker 2: about the president's plans here. In fact, we're going to 29 00:01:31,200 --> 00:01:34,120 Speaker 2: spend most of this hour talking about what's going on 30 00:01:34,240 --> 00:01:38,760 Speaker 2: right here in our nation's capital, specific in this conversation 31 00:01:38,840 --> 00:01:42,840 Speaker 2: to what's happening with the federal workforce. Scott Cooper started 32 00:01:42,880 --> 00:01:45,520 Speaker 2: just weeks ago as the director of the Office of 33 00:01:45,560 --> 00:01:49,040 Speaker 2: Personnel Management oh PM, as the walks call it here 34 00:01:49,080 --> 00:01:52,240 Speaker 2: in the nation's Capital, and remembering the way this administration 35 00:01:52,360 --> 00:01:55,880 Speaker 2: began and the reductions we saw in the federal workforce, 36 00:01:56,520 --> 00:01:59,160 Speaker 2: some of the debates that we've had around this, it 37 00:01:59,240 --> 00:02:03,240 Speaker 2: is of course Director Cooper who needs to implement, manage 38 00:02:03,520 --> 00:02:06,440 Speaker 2: and protect this workforce starting now. He's with us in 39 00:02:06,520 --> 00:02:09,280 Speaker 2: studio and it's great to see you in our Bloomberg offices. Welcome. 40 00:02:09,320 --> 00:02:10,720 Speaker 2: It's a pleasure to meet you. 41 00:02:10,760 --> 00:02:11,839 Speaker 3: Oh thank you. It's great to be here. 42 00:02:12,040 --> 00:02:14,040 Speaker 2: I have a lot of questions for you, but I 43 00:02:14,080 --> 00:02:15,600 Speaker 2: want to start with the news of the day. Here 44 00:02:15,880 --> 00:02:19,080 Speaker 2: President declaring a public safety emergency. Will you be involved, 45 00:02:19,360 --> 00:02:24,360 Speaker 2: as director of OPM in coordinating movement or deployment of 46 00:02:24,480 --> 00:02:27,840 Speaker 2: federal law enforcement that's not in your. 47 00:02:27,760 --> 00:02:30,480 Speaker 3: Umbrellas, not in my umbrella. If the President wants, good, 48 00:02:30,520 --> 00:02:32,080 Speaker 3: I'm happy to Bill do it for it's not. 49 00:02:32,560 --> 00:02:34,480 Speaker 2: They're all federal employees, though, which is why I. 50 00:02:34,440 --> 00:02:36,720 Speaker 3: Asked, Yeah, yeah, other I don't. I don't think so, 51 00:02:36,800 --> 00:02:39,760 Speaker 3: but you know, you know you've seen the news. 52 00:02:39,880 --> 00:02:43,840 Speaker 2: More sure, well listen absolutely, Will you make enhancements in 53 00:02:43,919 --> 00:02:47,120 Speaker 2: buildings to protect federal workers? Are you moving security around 54 00:02:47,120 --> 00:02:49,119 Speaker 2: to coincide with with this movement? Yeah? 55 00:02:49,280 --> 00:02:51,680 Speaker 3: As I said, right now, the answers, I don't know, 56 00:02:51,840 --> 00:02:54,799 Speaker 3: so we've done anything. GSA would probably be another organization 57 00:02:54,840 --> 00:02:56,799 Speaker 3: that might be involved. He said, something like that happens, 58 00:02:56,800 --> 00:02:59,400 Speaker 3: but for now, obviously don't have any other striped of 59 00:02:59,400 --> 00:03:00,440 Speaker 3: other than what the present announces. 60 00:03:00,480 --> 00:03:02,520 Speaker 2: More understood, I mean, the answer might be that we're 61 00:03:02,560 --> 00:03:04,960 Speaker 2: actually quite secure in our federal buildings here in Washington 62 00:03:04,960 --> 00:03:06,560 Speaker 2: and certainly acceptable. 63 00:03:06,639 --> 00:03:06,799 Speaker 3: Yeah. 64 00:03:06,840 --> 00:03:09,640 Speaker 2: Absolutely for those of us who live around here. You know, 65 00:03:09,720 --> 00:03:11,760 Speaker 2: We're not running through the streets like it's like we 66 00:03:11,800 --> 00:03:14,520 Speaker 2: live in bagdads. People should know, as I mentioned you 67 00:03:14,520 --> 00:03:17,560 Speaker 2: were sworn in less than a month ago. I would 68 00:03:17,639 --> 00:03:20,280 Speaker 2: love to know the experience that you're having here coming 69 00:03:20,280 --> 00:03:23,040 Speaker 2: to Washington and going through this culturally. But let's talk 70 00:03:23,040 --> 00:03:25,799 Speaker 2: about actual policy at first and what you've inherited here 71 00:03:25,800 --> 00:03:28,200 Speaker 2: because OPM is losing I think about a third of 72 00:03:28,240 --> 00:03:32,360 Speaker 2: its workforce. As you get into the building here, do 73 00:03:32,440 --> 00:03:34,600 Speaker 2: you have what you need? Are there enhancements that you 74 00:03:34,639 --> 00:03:36,680 Speaker 2: need to make to enact your vision? 75 00:03:37,480 --> 00:03:39,600 Speaker 3: Yeah? Certainly. As I've been here for a couple of 76 00:03:39,600 --> 00:03:41,240 Speaker 3: weeks now, people have come to me and said, hey, 77 00:03:41,280 --> 00:03:42,600 Speaker 3: you know, we may have cut too far in this 78 00:03:42,680 --> 00:03:45,280 Speaker 3: area or that area. So the short answers, I don't know. 79 00:03:45,360 --> 00:03:47,120 Speaker 3: But we're going through a process to go figure that out. 80 00:03:47,160 --> 00:03:48,920 Speaker 3: So what I've asked everybody to do is come back 81 00:03:48,920 --> 00:03:50,600 Speaker 3: to me and tell me, Okay, like what do you 82 00:03:50,640 --> 00:03:53,160 Speaker 3: think is missing? But importantly, what are you doing in 83 00:03:53,240 --> 00:03:55,120 Speaker 3: terms of privization. So one of the things I've observed 84 00:03:55,200 --> 00:03:57,320 Speaker 3: here in DC is we're very good about adding things 85 00:03:57,360 --> 00:03:58,960 Speaker 3: to the plate, and we're not very good about taking 86 00:03:58,960 --> 00:04:01,160 Speaker 3: things off the plate interest, and so what I've kind 87 00:04:01,160 --> 00:04:02,920 Speaker 3: of told my team is, look, I'm open to the 88 00:04:03,000 --> 00:04:05,240 Speaker 3: idea that maybe there are areas where we've cut too far, 89 00:04:05,640 --> 00:04:07,200 Speaker 3: but I also want to make sure I understand how 90 00:04:07,240 --> 00:04:09,440 Speaker 3: are we prioritizing And the answer maybe that there are 91 00:04:09,440 --> 00:04:11,280 Speaker 3: things that we're just doing because we've been doing them 92 00:04:11,320 --> 00:04:12,800 Speaker 3: for a long time interest and we don't need to 93 00:04:12,800 --> 00:04:13,960 Speaker 3: do it, so we won't understand that. 94 00:04:14,000 --> 00:04:16,360 Speaker 2: So you're taking inventory, you're taking stock right now? When 95 00:04:16,360 --> 00:04:18,560 Speaker 2: do you expect these reports still come back? 96 00:04:18,720 --> 00:04:21,800 Speaker 3: So we've got a near term deadline, which is kind 97 00:04:21,800 --> 00:04:24,239 Speaker 3: of in September. We have to put forward our first 98 00:04:24,279 --> 00:04:26,400 Speaker 3: version of the twenty seven budget, believe it or not 99 00:04:27,120 --> 00:04:29,440 Speaker 3: for government, So we have a deadline that we need 100 00:04:29,480 --> 00:04:32,040 Speaker 3: to turn that into I believe omb so literally in 101 00:04:32,080 --> 00:04:33,200 Speaker 3: a matter of a couple of weeks. Here, I think 102 00:04:33,200 --> 00:04:35,320 Speaker 3: we're going to have an assessment of how well are 103 00:04:35,320 --> 00:04:37,480 Speaker 3: we staffed, what are we focused on, and are there 104 00:04:37,520 --> 00:04:39,479 Speaker 3: areas where we need to add back headcount or are 105 00:04:39,480 --> 00:04:41,120 Speaker 3: their areas that we think we can prioritize. 106 00:04:41,240 --> 00:04:44,080 Speaker 2: You expect to lose another two thousand or so positions 107 00:04:44,120 --> 00:04:45,039 Speaker 2: this year? Is that accurate? 108 00:04:45,200 --> 00:04:45,279 Speaker 4: No? 109 00:04:45,400 --> 00:04:48,560 Speaker 3: So we started roughly about thirty one hundred. We expect, 110 00:04:49,200 --> 00:04:53,159 Speaker 3: through mostly the DRP, the deferred resignation program, to be 111 00:04:53,279 --> 00:04:55,719 Speaker 3: probably closer to twenty twenty one hundred by. 112 00:04:55,520 --> 00:04:59,719 Speaker 2: The still a year. So that's specifically through that specifically, Yeah, 113 00:05:00,240 --> 00:05:01,560 Speaker 2: is that program still active? 114 00:05:02,600 --> 00:05:04,320 Speaker 3: We still have people who are on the books right 115 00:05:04,360 --> 00:05:05,720 Speaker 3: now who are coming off. 116 00:05:05,800 --> 00:05:07,320 Speaker 2: But you can't raise your hand now and say that 117 00:05:07,400 --> 00:05:07,800 Speaker 2: i'd like. 118 00:05:07,800 --> 00:05:09,919 Speaker 3: In general know, but I think that's something that is 119 00:05:10,000 --> 00:05:11,680 Speaker 3: under discussion. Is you know, ought we to have a 120 00:05:11,720 --> 00:05:12,520 Speaker 3: program like that. 121 00:05:12,520 --> 00:05:14,919 Speaker 2: That just keep it in place all the time, a 122 00:05:15,000 --> 00:05:17,040 Speaker 2: permanent deferred resignation potentially. 123 00:05:17,120 --> 00:05:18,960 Speaker 3: Yeah, So we've done two rounds of it so far, 124 00:05:19,440 --> 00:05:21,240 Speaker 3: but there is an ongoing discussion as to would it 125 00:05:21,240 --> 00:05:22,520 Speaker 3: make sense to have something. I don't know if it'll 126 00:05:22,560 --> 00:05:24,560 Speaker 3: be exactly the same things we've done with DRP, but 127 00:05:24,960 --> 00:05:25,880 Speaker 3: some program. 128 00:05:25,600 --> 00:05:28,039 Speaker 2: Like that and a lot of private companies do this too, 129 00:05:28,200 --> 00:05:30,719 Speaker 2: exactly right, you're no stranger to that. So you got 130 00:05:30,760 --> 00:05:34,120 Speaker 2: here after Elon Musk left town. Did the DOGE make 131 00:05:34,200 --> 00:05:36,599 Speaker 2: your work easier or more difficult? 132 00:05:36,760 --> 00:05:36,960 Speaker 4: Yeah? 133 00:05:36,960 --> 00:05:39,320 Speaker 3: Look, I think what DOESE did was they really provided 134 00:05:39,320 --> 00:05:42,039 Speaker 3: a catalyst for the change that we're trying to now institutionalize. 135 00:05:42,080 --> 00:05:44,440 Speaker 3: So look, you you know this, well, we're talking about 136 00:05:44,440 --> 00:05:47,040 Speaker 3: a seven trillion dollar behemoth here, We're talking about two 137 00:05:47,080 --> 00:05:48,880 Speaker 3: and a half million people in the workforce, and it's 138 00:05:48,960 --> 00:05:50,960 Speaker 3: very hard to kind of change culture and change the 139 00:05:51,000 --> 00:05:53,160 Speaker 3: momentum there. So in my mind, a lot of what 140 00:05:53,160 --> 00:05:56,279 Speaker 3: DOESE did was really kind of catalyze some of the activity. 141 00:05:56,320 --> 00:05:58,320 Speaker 3: And now our job at OPM and across the other 142 00:05:58,360 --> 00:06:01,039 Speaker 3: agencies to figure out how do you institutionalize this so 143 00:06:01,080 --> 00:06:03,560 Speaker 3: that operational efficiency is not just a one time thing, 144 00:06:03,600 --> 00:06:05,480 Speaker 3: but it's actually part and parcel of whatever it does 145 00:06:05,520 --> 00:06:05,920 Speaker 3: day to day. 146 00:06:05,920 --> 00:06:07,279 Speaker 2: A lot of people know you as the guy who 147 00:06:07,400 --> 00:06:12,640 Speaker 2: ended the five things memos. Controversial is that? I mean, well, 148 00:06:12,760 --> 00:06:14,480 Speaker 2: you will be I'm sure known for a bit more 149 00:06:14,520 --> 00:06:16,800 Speaker 2: than that. Why did you make that decision? And why 150 00:06:16,800 --> 00:06:20,440 Speaker 2: would that be considered a controversial move? Folks are continuing 151 00:06:20,480 --> 00:06:20,920 Speaker 2: to use that. 152 00:06:21,800 --> 00:06:23,520 Speaker 3: I don't think should be controversial. It is the mandate 153 00:06:23,560 --> 00:06:26,200 Speaker 3: that we dropped. Look what I said I would do 154 00:06:26,400 --> 00:06:28,240 Speaker 3: is when I come in, just like anything else, we 155 00:06:28,240 --> 00:06:30,240 Speaker 3: should look at why we're doing things. And sometimes things 156 00:06:30,279 --> 00:06:32,279 Speaker 3: have a good reason for when you do them, and 157 00:06:32,360 --> 00:06:35,159 Speaker 3: other times maybe they run their course. And in my mind, 158 00:06:35,200 --> 00:06:37,039 Speaker 3: when I looked at kind of the opportunity here. I 159 00:06:37,120 --> 00:06:39,120 Speaker 3: just said, look, if it's a useful tool to you 160 00:06:39,160 --> 00:06:41,720 Speaker 3: as a manager, great, knock yourself out keep using it, okay, 161 00:06:41,800 --> 00:06:44,200 Speaker 3: but we don't need to consume resources. Kind of across 162 00:06:44,200 --> 00:06:46,040 Speaker 3: the government it was this consuming people. 163 00:06:46,480 --> 00:06:48,160 Speaker 2: They're tearing their hair out each week to come up 164 00:06:48,160 --> 00:06:48,760 Speaker 2: with five things. 165 00:06:49,160 --> 00:06:50,800 Speaker 3: It was the honest answer that I think it was 166 00:06:51,200 --> 00:06:53,279 Speaker 3: well used in some areas, not well used to others. 167 00:06:53,320 --> 00:06:54,760 Speaker 3: But it was just a matter of saying, hey, look 168 00:06:54,800 --> 00:06:56,560 Speaker 3: we're going to look at things for a fresh perspective, 169 00:06:56,600 --> 00:06:58,920 Speaker 3: and if we find that perhaps there's other tools that 170 00:06:58,960 --> 00:07:00,880 Speaker 3: are available to do the same job, than we don't 171 00:07:00,920 --> 00:07:01,880 Speaker 3: need duplicate resources. 172 00:07:01,920 --> 00:07:05,800 Speaker 2: Well as you consider taking stock here and maybe even 173 00:07:05,839 --> 00:07:09,680 Speaker 2: looking to hire. You scored a legal victory in being 174 00:07:09,760 --> 00:07:15,480 Speaker 2: able to test applicants measure applicant skills. What are these 175 00:07:15,600 --> 00:07:17,960 Speaker 2: tests and are they already in place? 176 00:07:19,640 --> 00:07:21,560 Speaker 3: Some of them exist, but there's a lot more to 177 00:07:21,560 --> 00:07:23,720 Speaker 3: be done. So the history, just for your listeners to know, 178 00:07:24,040 --> 00:07:26,640 Speaker 3: is we've been under a court order for about forty 179 00:07:26,640 --> 00:07:30,280 Speaker 3: three years now which effectively prohibited the use of essentially 180 00:07:30,320 --> 00:07:32,880 Speaker 3: merit based tests in termine our people qualified for the 181 00:07:32,960 --> 00:07:35,400 Speaker 3: jobs for which they're trying to be hired. In the 182 00:07:35,400 --> 00:07:37,480 Speaker 3: absence of those tests, what was happening was people would 183 00:07:37,480 --> 00:07:41,520 Speaker 3: basically self evaluate themselves on their hiring criteria, which I 184 00:07:41,560 --> 00:07:44,240 Speaker 3: see you chuckling, because it's a real issue, right like 185 00:07:44,600 --> 00:07:47,200 Speaker 3: people say lots of things. Yes, in general, my view 186 00:07:47,240 --> 00:07:50,720 Speaker 3: as we should trust, but verify. And so now that 187 00:07:50,720 --> 00:07:53,440 Speaker 3: that court order has been rescinded, we now have the 188 00:07:53,440 --> 00:07:55,760 Speaker 3: ability to go forward with a much more robust plan 189 00:07:55,800 --> 00:07:58,600 Speaker 3: where we can use actual merit based assessments so that 190 00:07:58,640 --> 00:08:00,240 Speaker 3: if you tell me, you know you're applying for a 191 00:08:00,280 --> 00:08:03,679 Speaker 3: software developer job, great, like, let me you know, actually 192 00:08:03,680 --> 00:08:05,559 Speaker 3: try to assess those skills by giving you a coding 193 00:08:05,600 --> 00:08:07,960 Speaker 3: test or something like that, which obviously the private sector 194 00:08:07,960 --> 00:08:09,160 Speaker 3: has been done for a long time. 195 00:08:09,240 --> 00:08:10,000 Speaker 2: That's fascinating. 196 00:08:10,040 --> 00:08:11,040 Speaker 3: So yeah, it's always the best. 197 00:08:11,200 --> 00:08:12,840 Speaker 2: You have a selfie val in an interview. 198 00:08:12,920 --> 00:08:16,280 Speaker 3: Is that basically have a federal resume that sometimes goes 199 00:08:16,280 --> 00:08:19,080 Speaker 3: five to ten pages long, oka you have a selfie 200 00:08:19,160 --> 00:08:21,600 Speaker 3: val and then yes, sometimes you have an interview. Right now, 201 00:08:21,640 --> 00:08:23,080 Speaker 3: what we want to do is to say, okay, the 202 00:08:23,120 --> 00:08:25,160 Speaker 3: first step really should be number one is we've taken 203 00:08:25,200 --> 00:08:27,680 Speaker 3: the federal resume down to two pages. My personal view 204 00:08:27,680 --> 00:08:30,080 Speaker 3: is two is still long, but it's better than five. 205 00:08:30,280 --> 00:08:30,880 Speaker 2: Yeah. 206 00:08:30,960 --> 00:08:32,760 Speaker 3: And then yes, like, if you have a job for 207 00:08:32,800 --> 00:08:34,920 Speaker 3: which we have a test that we can evaluate, whether 208 00:08:35,200 --> 00:08:37,760 Speaker 3: it's your judgment or technical skills, we should have you 209 00:08:37,800 --> 00:08:40,120 Speaker 3: do that first so that we understand are you even 210 00:08:40,160 --> 00:08:42,320 Speaker 3: in the running for the potential job we're hiring for? Wait? 211 00:08:42,360 --> 00:08:43,920 Speaker 2: Yeah, you wouldn't think that that's revolution. 212 00:08:44,080 --> 00:08:46,040 Speaker 3: Yeah, I know none of this is. None of this 213 00:08:46,080 --> 00:08:48,199 Speaker 3: is rocket science. I agree. We are not inventing new 214 00:08:48,240 --> 00:08:51,000 Speaker 3: things here, but we were because of the court order. 215 00:08:51,120 --> 00:08:52,959 Speaker 3: A lot of the agencies were very worried that if 216 00:08:52,960 --> 00:08:55,600 Speaker 3: they use these tests where they find themselves in constant litigation. 217 00:08:55,679 --> 00:08:58,400 Speaker 3: And so now that that quarter is gone and clears. 218 00:08:58,160 --> 00:08:59,720 Speaker 2: The path for us to dud I have just about 219 00:08:59,720 --> 00:09:02,160 Speaker 2: a minute left. I'm just fascinated by what this must 220 00:09:02,240 --> 00:09:04,840 Speaker 2: be like for you. And I'm wondering what culturally it 221 00:09:04,840 --> 00:09:07,000 Speaker 2: has been like. I know where your headquarters is over 222 00:09:07,040 --> 00:09:09,280 Speaker 2: on East Street. I know what that building looks like, 223 00:09:09,720 --> 00:09:11,000 Speaker 2: at least from the outside. 224 00:09:11,040 --> 00:09:11,960 Speaker 3: You should try. 225 00:09:12,840 --> 00:09:15,760 Speaker 2: What's it like going from the world of venture capital, 226 00:09:15,800 --> 00:09:18,440 Speaker 2: of from like endresen to sitting on EA Street trying 227 00:09:18,440 --> 00:09:19,520 Speaker 2: to figure these problems out. 228 00:09:19,760 --> 00:09:21,840 Speaker 3: It's been a. Look, it's been a fascinating experience and 229 00:09:21,880 --> 00:09:24,400 Speaker 3: all very positive. Actually, it's exactly what I was hoping 230 00:09:24,400 --> 00:09:24,800 Speaker 3: it would be. 231 00:09:24,840 --> 00:09:25,640 Speaker 2: Which is that right? 232 00:09:25,920 --> 00:09:28,800 Speaker 3: Well, look, I view this as like the managerial challenge 233 00:09:28,800 --> 00:09:31,040 Speaker 3: of managerial challenges, which is in my old job. At 234 00:09:31,080 --> 00:09:32,720 Speaker 3: the end of the day, you know, you have a CEO. 235 00:09:33,120 --> 00:09:35,240 Speaker 3: The CEO tells you what to do, and at some point, 236 00:09:35,280 --> 00:09:37,080 Speaker 3: you know, people actually do what the CEO says or 237 00:09:37,160 --> 00:09:39,839 Speaker 3: they quite frankly find themselves another job. Fine, And this 238 00:09:39,880 --> 00:09:41,320 Speaker 3: is a much more of what I would call a 239 00:09:41,360 --> 00:09:44,079 Speaker 3: power persuasion job. You know, can you get people aligned 240 00:09:44,120 --> 00:09:46,600 Speaker 3: around a mission and convince them why the things we 241 00:09:46,640 --> 00:09:48,839 Speaker 3: want to do from efficiency perspective are not only good 242 00:09:48,840 --> 00:09:50,520 Speaker 3: for their career, but also good for the government. 243 00:09:50,559 --> 00:09:53,000 Speaker 2: Yeah, well that's called public service, I think. Exactly. Really 244 00:09:53,000 --> 00:09:54,760 Speaker 2: great to meet you, Thank you for coming. Let's keep 245 00:09:54,800 --> 00:09:58,640 Speaker 2: the conversation going. Scott Cooper, op M. This is the 246 00:09:58,679 --> 00:10:01,240 Speaker 2: man in charge of managing the federal workforce that President 247 00:10:01,280 --> 00:10:04,920 Speaker 2: Trump was just talking about protecting here in Washington. We're 248 00:10:04,920 --> 00:10:07,840 Speaker 2: going to talk more about his public safety emergency and 249 00:10:07,880 --> 00:10:10,240 Speaker 2: what's going to mean for the streets of Washington. It's 250 00:10:10,240 --> 00:10:11,680 Speaker 2: all ahead right here on Bloomberg. 251 00:10:13,880 --> 00:10:17,360 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 252 00:10:17,440 --> 00:10:20,480 Speaker 1: us live weekdays at noon and five pm Eastern on 253 00:10:20,600 --> 00:10:23,840 Speaker 1: Apple Cockley and Android Auto with the Bloomberg Business App. 254 00:10:23,880 --> 00:10:26,920 Speaker 1: You can also listen live on Amazon Alexa from our 255 00:10:26,920 --> 00:10:30,760 Speaker 1: flagship New York station. Just say Alexa Play Bloomberg. 256 00:10:30,760 --> 00:10:34,200 Speaker 2: Eleven thirty one of those days where we have a 257 00:10:34,200 --> 00:10:37,560 Speaker 2: bit of a three ring circus, multiple lead stories that 258 00:10:37,600 --> 00:10:40,959 Speaker 2: we're juggling here on Balance of Power. It's just another 259 00:10:41,040 --> 00:10:43,720 Speaker 2: Monday in August the eleventh, in fact, and thank you 260 00:10:43,760 --> 00:10:45,960 Speaker 2: for joining us on the Monday edition here on Bloomberg 261 00:10:46,000 --> 00:10:49,280 Speaker 2: TV and radio. As you heard a short time ago, 262 00:10:49,640 --> 00:10:53,640 Speaker 2: Nvidia and AMD talked about it with Jennifer Welch paying 263 00:10:53,679 --> 00:10:57,480 Speaker 2: fifteen percent of China AI chip sales. A massive story 264 00:10:57,520 --> 00:11:00,240 Speaker 2: coming out of Washington today that has our I on 265 00:11:00,320 --> 00:11:03,840 Speaker 2: shares of both of those companies. We've got the Trump 266 00:11:03,880 --> 00:11:06,800 Speaker 2: and Putin meeting on Friday, as we just talked about 267 00:11:06,840 --> 00:11:09,720 Speaker 2: with Bret Bruin, and now we've got what's happening here 268 00:11:09,760 --> 00:11:13,000 Speaker 2: in our capital city. This locally is the biggest story 269 00:11:13,040 --> 00:11:15,520 Speaker 2: of the day, I would suggest, and if you're with 270 00:11:15,600 --> 00:11:18,000 Speaker 2: us on ninety nine point one. We see you. We 271 00:11:18,120 --> 00:11:22,080 Speaker 2: live here too, the president, of course, referring to crime 272 00:11:22,120 --> 00:11:25,880 Speaker 2: and homelessness in Washington, d C. Promising a news conference 273 00:11:25,920 --> 00:11:29,840 Speaker 2: this morning, and he did hold that news conference quite remarkable. 274 00:11:30,360 --> 00:11:32,760 Speaker 2: As we saw in Los Angeles. The President is going 275 00:11:32,800 --> 00:11:35,480 Speaker 2: to be deploying National Guard troops to the streets of DC, 276 00:11:35,640 --> 00:11:40,800 Speaker 2: invoking a public safety emergency, about eight hundred troops based 277 00:11:40,840 --> 00:11:45,240 Speaker 2: on what we're hearing so far, but also deploying federal 278 00:11:45,280 --> 00:11:50,320 Speaker 2: law enforcement from about a dozen agencies across town. The 279 00:11:50,360 --> 00:11:52,840 Speaker 2: President spoke to reporters about it a short time ago. 280 00:11:52,880 --> 00:11:56,960 Speaker 4: Listen, tell them whatever happens. You know, they love to 281 00:11:57,000 --> 00:11:59,640 Speaker 4: spit in the face of the police. As the police 282 00:11:59,720 --> 00:12:03,960 Speaker 4: estid ending up there in uniform. They're standing and they're 283 00:12:04,000 --> 00:12:07,480 Speaker 4: screaming at him an inch away from their face, and 284 00:12:07,520 --> 00:12:10,920 Speaker 4: then they start spitting in their face. And I said, 285 00:12:11,440 --> 00:12:15,320 Speaker 4: you tell them, you spit and we hit, and they 286 00:12:15,320 --> 00:12:16,679 Speaker 4: can hit real hard. 287 00:12:17,920 --> 00:12:20,920 Speaker 2: You spit, we hit, the President saying, as he was 288 00:12:20,960 --> 00:12:25,160 Speaker 2: flanked by his Attorney General and Secretary of Defense. It's 289 00:12:25,160 --> 00:12:28,200 Speaker 2: not just the National Guard troops. The President of the 290 00:12:28,280 --> 00:12:31,560 Speaker 2: United States is also federalizing the local police department, the 291 00:12:31,679 --> 00:12:35,120 Speaker 2: DC Metro Police, and under our Home Rule Act that 292 00:12:35,360 --> 00:12:40,120 Speaker 2: is in fact allowed, although only for increments of forty 293 00:12:40,160 --> 00:12:43,160 Speaker 2: eight hours, so it's unclear exactly how that would run. 294 00:12:43,160 --> 00:12:45,840 Speaker 2: And one of our biggest questions right now is what 295 00:12:45,880 --> 00:12:48,480 Speaker 2: does the mayor think of this. We sat down just 296 00:12:48,520 --> 00:12:51,080 Speaker 2: a few weeks ago this summer with Muriel Bowser to 297 00:12:51,120 --> 00:12:55,120 Speaker 2: talk about her relationship with this administration, working with Donald Trump. 298 00:12:55,160 --> 00:12:56,400 Speaker 2: Here's a bit of what she said. 299 00:12:57,360 --> 00:13:01,800 Speaker 5: President Trump left d C during COVID, which cities were 300 00:13:01,920 --> 00:13:07,000 Speaker 5: ravaged by COVID homelessness, to increases in crime with lack 301 00:13:07,080 --> 00:13:11,640 Speaker 5: of services because government agencies were shuttered, And we've worked 302 00:13:11,760 --> 00:13:14,040 Speaker 5: very hard to get that image out of his mind 303 00:13:14,080 --> 00:13:17,720 Speaker 5: because that's not the DC of today. In fact, we've 304 00:13:17,800 --> 00:13:21,640 Speaker 5: driven down crime to a thirty year low. Our tourism 305 00:13:22,040 --> 00:13:26,840 Speaker 5: recovered in twenty twenty four, Our kids were the fastest 306 00:13:26,880 --> 00:13:30,840 Speaker 5: back to school, and our school population has rebounded an 307 00:13:30,880 --> 00:13:34,120 Speaker 5: investment in DC. People are looking hard at us because 308 00:13:34,160 --> 00:13:38,640 Speaker 5: of some of the changes we're making in our business environment. 309 00:13:39,160 --> 00:13:43,400 Speaker 5: We are lowering taxes, we are cutting red tape, and 310 00:13:43,440 --> 00:13:47,200 Speaker 5: we are incentivizing good businesses to start here, grow here, 311 00:13:47,280 --> 00:13:48,520 Speaker 5: and hire DC residence. 312 00:13:48,559 --> 00:13:50,120 Speaker 2: Do you feel like you have a partner in the 313 00:13:50,160 --> 00:13:52,000 Speaker 2: White House or an obstacle. 314 00:13:51,960 --> 00:13:54,880 Speaker 5: Well as a partnership we work on every day. Certainly, 315 00:13:55,559 --> 00:13:59,840 Speaker 5: the president has an outsized influence over the city of Washington. 316 00:14:00,200 --> 00:14:02,960 Speaker 5: Is this the nation's capital, So we like him to 317 00:14:03,040 --> 00:14:07,280 Speaker 5: make some bigger investments like Union Station and continuing to 318 00:14:07,320 --> 00:14:11,960 Speaker 5: be at a partner and developing RFK, helping us retool 319 00:14:12,080 --> 00:14:16,440 Speaker 5: and reskill our workers, and asking him to pause on 320 00:14:16,520 --> 00:14:19,000 Speaker 5: these separations and rehire qualified people. 321 00:14:20,600 --> 00:14:24,520 Speaker 2: That partnership that Mayor Bowser talked about is being tested 322 00:14:24,680 --> 00:14:28,479 Speaker 2: severely right now as we assemble our political panel. Bloomberg 323 00:14:28,480 --> 00:14:31,960 Speaker 2: Politics contributors Genie Shanzano and Rick Davis are with us 324 00:14:32,000 --> 00:14:34,840 Speaker 2: right now. Genie is senior Democracy Fellow with the Center 325 00:14:35,000 --> 00:14:37,200 Speaker 2: for the Study of the Presidency in Congress. Rick is 326 00:14:37,240 --> 00:14:40,640 Speaker 2: a Republican strategist and partner at Stone Court Capital. Rick, 327 00:14:40,640 --> 00:14:42,840 Speaker 2: I'm going to start with you because, with some exceptions, 328 00:14:42,840 --> 00:14:45,360 Speaker 2: you spent the bulk of your life living here in 329 00:14:45,400 --> 00:14:47,920 Speaker 2: the Mid Atlantic area, in the Washington, d C. Region. 330 00:14:48,000 --> 00:14:50,720 Speaker 2: You know this city about as well as anybody that 331 00:14:50,840 --> 00:14:54,480 Speaker 2: I know. Is this required? Is this necessary now? And 332 00:14:54,600 --> 00:14:55,160 Speaker 2: is it legal? 333 00:14:56,440 --> 00:14:58,680 Speaker 6: You know? So much of what Donald Trump does is 334 00:15:00,120 --> 00:15:02,760 Speaker 6: not just for impact but for symbolism, and I got 335 00:15:02,800 --> 00:15:06,320 Speaker 6: to believe, based on what we've heard today that this 336 00:15:06,400 --> 00:15:09,440 Speaker 6: is a very symbolic gesture. It's a gesture to try 337 00:15:09,600 --> 00:15:18,280 Speaker 6: and really you know, refederalized and store the influence of 338 00:15:18,280 --> 00:15:20,720 Speaker 6: the federal government in Washington, d C. You know, we 339 00:15:20,800 --> 00:15:23,680 Speaker 6: used to have things many people don't remember, but the 340 00:15:23,680 --> 00:15:26,560 Speaker 6: streets of Washington have been cleaned up a lot over 341 00:15:26,600 --> 00:15:28,920 Speaker 6: the last few decades, and a lot of that came 342 00:15:28,960 --> 00:15:33,400 Speaker 6: through federal money, through federal participation, Pennsylvania Avenue Development Commission, 343 00:15:33,480 --> 00:15:36,200 Speaker 6: things like that. I mean, there were places that are 344 00:15:36,400 --> 00:15:40,360 Speaker 6: thriving today that were war zones when I was growing up, 345 00:15:40,760 --> 00:15:45,080 Speaker 6: and that process, that progress, a lot of times was 346 00:15:45,360 --> 00:15:49,000 Speaker 6: done through symbolic gestures. We don't know where this will last. 347 00:15:49,080 --> 00:15:52,120 Speaker 6: As you pointed out right now, the federalization of the 348 00:15:52,120 --> 00:15:56,320 Speaker 6: police is a short term thing. When Donald Trump deployed 349 00:15:56,400 --> 00:15:59,400 Speaker 6: National Guard troops in LA, like what he's now doing 350 00:15:59,520 --> 00:16:00,920 Speaker 6: in Washington. 351 00:16:00,560 --> 00:16:00,800 Speaker 4: D C. 352 00:16:01,920 --> 00:16:04,360 Speaker 6: It was for a minimum amount of time. They are 353 00:16:04,400 --> 00:16:08,480 Speaker 6: now back at home with their families in LA. So 354 00:16:10,120 --> 00:16:11,960 Speaker 6: it's a kind of wait and see thing. I mean, 355 00:16:12,000 --> 00:16:14,720 Speaker 6: the one thing Donald Trump does, he makes these grand gestures, 356 00:16:14,920 --> 00:16:16,960 Speaker 6: but he doesn't fill you in on sort of what 357 00:16:17,000 --> 00:16:19,680 Speaker 6: he hopes to accomplish in the process of doing that. 358 00:16:21,400 --> 00:16:24,680 Speaker 2: It's really something Genie. I came to Washington as a resident. 359 00:16:24,720 --> 00:16:27,800 Speaker 2: At least in the nineteen nineties, there was still evidence 360 00:16:27,920 --> 00:16:30,600 Speaker 2: on the U Street corridor of burned out buildings that 361 00:16:30,640 --> 00:16:34,400 Speaker 2: had been left there since the Martin Luther King riots 362 00:16:34,400 --> 00:16:37,680 Speaker 2: in nineteen sixty eight. Chinatown or what we now call 363 00:16:37,800 --> 00:16:41,200 Speaker 2: Gallery Place or whatever that is, was much the same. 364 00:16:41,520 --> 00:16:46,200 Speaker 2: Huge investments were made here in Washington, post Marion Barry, 365 00:16:46,240 --> 00:16:49,000 Speaker 2: to the point where it's unrecognizable, as Rich just said, 366 00:16:49,040 --> 00:16:50,960 Speaker 2: in some areas, if you go to the neighborhood known 367 00:16:50,960 --> 00:16:54,360 Speaker 2: as Noma and you were somewhere else the last ten years, 368 00:16:54,400 --> 00:16:56,200 Speaker 2: you wouldn't even know what city you were in. So 369 00:16:56,240 --> 00:16:59,480 Speaker 2: I think we have to acknowledge the progress that's been 370 00:16:59,520 --> 00:17:02,120 Speaker 2: made here over the course of decades. But most recently, 371 00:17:02,840 --> 00:17:04,840 Speaker 2: we know that a lot of cities were in pretty 372 00:17:04,840 --> 00:17:07,440 Speaker 2: bad shape coming out of COVID, And most of the 373 00:17:07,520 --> 00:17:10,320 Speaker 2: data I heard today from President Trump was two years old. 374 00:17:10,400 --> 00:17:13,639 Speaker 2: Back to twenty twenty three, as the city emerged from COVID, 375 00:17:13,680 --> 00:17:17,360 Speaker 2: there was a rash of violence in Washington. We lived through, 376 00:17:17,440 --> 00:17:21,000 Speaker 2: and we talked about it at the time carjackings specifically 377 00:17:21,080 --> 00:17:24,320 Speaker 2: were through the roof, but we've also seen some pretty 378 00:17:24,359 --> 00:17:27,840 Speaker 2: steep declines since then. And Genie, I'm looking at a 379 00:17:27,840 --> 00:17:31,600 Speaker 2: memo right now that came from the Justice Department. It 380 00:17:31,640 --> 00:17:34,359 Speaker 2: was Joe Biden's Justice Department, but it's dated the third 381 00:17:34,400 --> 00:17:40,159 Speaker 2: of January Friday, twenty twenty five. The headline is violent 382 00:17:40,240 --> 00:17:45,160 Speaker 2: crime in DC hits thirty year low three zero down 383 00:17:45,280 --> 00:17:48,919 Speaker 2: thirty five percent from twenty twenty three, lowest in thirty years. 384 00:17:49,840 --> 00:17:53,000 Speaker 2: How come the President didn't mention these statistics. 385 00:17:54,840 --> 00:17:57,720 Speaker 7: Yeah, and it's not just coming out of the Biden administration. 386 00:17:57,880 --> 00:18:01,560 Speaker 7: One of the most bizarre aspects of of this press conference, 387 00:18:01,560 --> 00:18:04,600 Speaker 7: he just did what has his own FBI director Cash 388 00:18:04,600 --> 00:18:08,199 Speaker 7: Ptel stood up. Apparently nobody looked at his talking points, 389 00:18:08,240 --> 00:18:11,120 Speaker 7: because what did he say? The murder rate is plummeting. 390 00:18:11,200 --> 00:18:15,040 Speaker 7: It's it's the lowest in history, and yet we have 391 00:18:15,080 --> 00:18:20,480 Speaker 7: an emergency requiring the president to federalize DC and those 392 00:18:20,520 --> 00:18:23,359 Speaker 7: two things just don't comport. And of course the data 393 00:18:23,359 --> 00:18:26,160 Speaker 7: that you're talking about, all the data we've looked at, 394 00:18:26,600 --> 00:18:30,359 Speaker 7: don't comport. And so this is another example in a 395 00:18:30,400 --> 00:18:33,080 Speaker 7: long line of what Donald Trump has been doing since 396 00:18:33,080 --> 00:18:37,320 Speaker 7: he came back to office, which has been declaring emergencies 397 00:18:37,400 --> 00:18:40,800 Speaker 7: that the data doesn't support in order to expand his 398 00:18:40,880 --> 00:18:43,639 Speaker 7: executive power. We talk about it all the time in 399 00:18:43,680 --> 00:18:47,920 Speaker 7: the context of tariffs. He is doing that tariff regime 400 00:18:48,119 --> 00:18:51,920 Speaker 7: under this declaration of an emergency that the courts are 401 00:18:52,000 --> 00:18:55,240 Speaker 7: looking to see if actually exists. And this will certainly 402 00:18:55,760 --> 00:18:58,639 Speaker 7: go to the courts and people will be able to 403 00:18:58,720 --> 00:19:03,399 Speaker 7: vet whether these add up. But what is most concerning 404 00:19:03,480 --> 00:19:07,840 Speaker 7: here is not just about DC, but about President Trump 405 00:19:08,359 --> 00:19:11,960 Speaker 7: talking about the fact that this may spread to other cities. 406 00:19:12,080 --> 00:19:15,679 Speaker 7: This may spread to Illinois, to Chicago, This may spread 407 00:19:15,720 --> 00:19:18,800 Speaker 7: to New York City. In New York mentioned it's already 408 00:19:18,800 --> 00:19:22,080 Speaker 7: been in LA. So that is most concerning. And I 409 00:19:22,160 --> 00:19:25,320 Speaker 7: think the question that comes to my mind is why 410 00:19:26,280 --> 00:19:29,840 Speaker 7: is this at the top of the President's agenda today 411 00:19:29,920 --> 00:19:32,919 Speaker 7: on August eleventh, with as much going on in our 412 00:19:33,000 --> 00:19:35,600 Speaker 7: country in the world as is going on. Is he 413 00:19:35,760 --> 00:19:39,800 Speaker 7: creating an emergency where the data suggests that none exists. 414 00:19:39,800 --> 00:19:42,719 Speaker 7: And I think we can think about answers to that question, 415 00:19:42,840 --> 00:19:45,480 Speaker 7: But one comes to mind. When a reporter asked about 416 00:19:45,480 --> 00:19:48,639 Speaker 7: the Epstein files, the press conference edited abruptly and that 417 00:19:48,840 --> 00:19:49,040 Speaker 7: was that. 418 00:19:50,680 --> 00:19:54,000 Speaker 2: You know, you're not the first person to use that 419 00:19:54,119 --> 00:19:57,960 Speaker 2: name today, genius. People say, why now and why not 420 00:19:58,080 --> 00:20:01,640 Speaker 2: in the first term, for instance, when crime in fact 421 00:20:02,000 --> 00:20:04,240 Speaker 2: was higher based on the stats that we're seeing. 422 00:20:04,600 --> 00:20:04,800 Speaker 3: Rick. 423 00:20:04,840 --> 00:20:09,200 Speaker 2: From a political standpoint, when you consider the electorate watching 424 00:20:09,240 --> 00:20:12,240 Speaker 2: this locally here in Washington and all over the country, 425 00:20:12,720 --> 00:20:15,560 Speaker 2: based on what we saw in California following the tariff 426 00:20:16,400 --> 00:20:21,600 Speaker 2: stuff that Genie mentioned, does the voter begin to fatigue 427 00:20:22,280 --> 00:20:25,920 Speaker 2: when it comes to emergencies? How many emergencies can America take? 428 00:20:27,359 --> 00:20:27,560 Speaker 3: Yeah? 429 00:20:27,560 --> 00:20:30,440 Speaker 6: I wonder if anybody really even focuses on that. I mean, 430 00:20:30,440 --> 00:20:33,240 Speaker 6: we obviously are you know, policy nerds. We get in 431 00:20:33,280 --> 00:20:36,040 Speaker 6: the weeds on the authorities that the President and the 432 00:20:36,119 --> 00:20:41,919 Speaker 6: Congress has to exercise their various powers. And yet what 433 00:20:41,960 --> 00:20:45,240 Speaker 6: the public sees is today Donald Trump deployed federal troops 434 00:20:45,240 --> 00:20:49,880 Speaker 6: into d C. And I don't think people really are 435 00:20:49,920 --> 00:20:53,440 Speaker 6: going to second guess him on what powers he has 436 00:20:53,560 --> 00:20:59,359 Speaker 6: to do that. He's very good at trying to blow 437 00:20:59,400 --> 00:21:05,080 Speaker 6: through those kinds of questions. He never actually addresses his authorities. 438 00:21:06,440 --> 00:21:12,159 Speaker 6: He assumes those authorizations and and and focuses instead on 439 00:21:12,800 --> 00:21:16,480 Speaker 6: the the real act that's that's going on and I 440 00:21:16,560 --> 00:21:19,560 Speaker 6: do think this has actually less to do with the 441 00:21:20,080 --> 00:21:25,320 Speaker 6: the the Jeffreys controversy, uh, and and a lot more 442 00:21:25,359 --> 00:21:27,720 Speaker 6: to do with just the politics of Donald Trump. Like 443 00:21:27,880 --> 00:21:31,440 Speaker 6: Donald Trump's been talking about city blight, you know for 444 00:21:31,680 --> 00:21:34,960 Speaker 6: four decades. He used to rail about it in New York. 445 00:21:35,200 --> 00:21:37,360 Speaker 6: He's railed about it here and everywhere else he's been 446 00:21:37,880 --> 00:21:40,919 Speaker 6: And and the reality is part of that is to 447 00:21:40,960 --> 00:21:43,600 Speaker 6: put himself politically on the side of the cops versus 448 00:21:43,680 --> 00:21:47,480 Speaker 6: the politicians. And I think the Democrats have to look 449 00:21:47,480 --> 00:21:49,119 Speaker 6: at this from a point of view that says, you 450 00:21:49,160 --> 00:21:52,040 Speaker 6: know what, this is a vulnerability for us. We have 451 00:21:52,119 --> 00:21:56,399 Speaker 6: to be careful because if Donald Trump is successful, uh, 452 00:21:56,960 --> 00:22:01,359 Speaker 6: these kind of safety issues, especially in biggerban environments, and 453 00:22:01,400 --> 00:22:04,239 Speaker 6: you see Donald Trump throwing la in Chicago and New 454 00:22:04,320 --> 00:22:07,679 Speaker 6: York all under the Boston. He's going to use this politically, 455 00:22:07,920 --> 00:22:11,880 Speaker 6: And I think less worry about controversies and more worry 456 00:22:11,920 --> 00:22:13,120 Speaker 6: about politics. 457 00:22:14,200 --> 00:22:16,639 Speaker 2: Rick Davis and Genie Shanzo, many thanks to both of 458 00:22:16,680 --> 00:22:20,560 Speaker 2: you for the insights. Are Bloomberg Politics contributors with great analysis. 459 00:22:23,440 --> 00:22:26,880 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 460 00:22:26,960 --> 00:22:29,960 Speaker 1: us live weekdays at noon and five pm. Eastern on 461 00:22:30,119 --> 00:22:33,359 Speaker 1: Apple Coarclay, and Android Auto with the Bloomberg Business app. 462 00:22:33,520 --> 00:22:36,800 Speaker 1: Listen on demand wherever you get your podcasts, or watch 463 00:22:36,840 --> 00:22:38,399 Speaker 1: us live on YouTube. 464 00:22:39,520 --> 00:22:41,960 Speaker 2: We keep our eyes on Nvidia and AMD. As soon 465 00:22:41,960 --> 00:22:44,000 Speaker 2: as I saw this headline this morning, I started wondering 466 00:22:44,040 --> 00:22:47,000 Speaker 2: what the stock reaction would be, and remarkably, there hasn't 467 00:22:47,040 --> 00:22:50,560 Speaker 2: been much reaction because this is unprecedented what's coming from 468 00:22:50,600 --> 00:22:52,600 Speaker 2: the White House today. The President a short time ago 469 00:22:52,640 --> 00:22:55,240 Speaker 2: confirming this news that in Vidia and AMD have agreed 470 00:22:55,240 --> 00:22:59,960 Speaker 2: to pay fifteen percent of their revenues from Chinese AI 471 00:23:00,160 --> 00:23:04,040 Speaker 2: chip sales to the US government. The US government is 472 00:23:04,080 --> 00:23:07,439 Speaker 2: getting in the chip business, apparently. And these are the 473 00:23:07,440 --> 00:23:10,800 Speaker 2: AI chips that at one time were being held from 474 00:23:11,200 --> 00:23:14,720 Speaker 2: China not allowed in the market, the H twenty, for instance, 475 00:23:15,400 --> 00:23:18,720 Speaker 2: as export controls were turned up in the name of 476 00:23:18,840 --> 00:23:21,960 Speaker 2: national security. We've come a long way from that moment. 477 00:23:22,320 --> 00:23:25,240 Speaker 2: President Trump, in an unrelated news conference, was asked about 478 00:23:25,240 --> 00:23:26,040 Speaker 2: it earlier today. 479 00:23:26,080 --> 00:23:31,200 Speaker 4: Listen, I deal with Jensen, who's a great guy in Navidia. 480 00:23:32,440 --> 00:23:36,680 Speaker 4: The chip that we're talking about, the H twenty, it's 481 00:23:36,720 --> 00:23:40,560 Speaker 4: an old chip. China already has it in a different form, 482 00:23:40,680 --> 00:23:44,840 Speaker 4: different name, but they have it, or they have a 483 00:23:44,880 --> 00:23:47,359 Speaker 4: combination of two will make up for it. And even 484 00:23:47,440 --> 00:23:52,280 Speaker 4: then the Blackwell is super duper advanced. I wouldn't make 485 00:23:52,320 --> 00:23:55,040 Speaker 4: a deal with that, although it's possible. 486 00:23:55,080 --> 00:23:56,000 Speaker 2: I'd make a deal. 487 00:23:57,359 --> 00:24:04,840 Speaker 4: A somewhat enhanced in a negative way. Blackwell, in other words, 488 00:24:04,920 --> 00:24:08,000 Speaker 4: take thirty percent to fifty percent off of it, But 489 00:24:08,080 --> 00:24:10,879 Speaker 4: that's the latest and the greatest in the world. Nobody 490 00:24:10,880 --> 00:24:13,040 Speaker 4: has it. They won't have it for five years, but 491 00:24:13,119 --> 00:24:15,280 Speaker 4: the Age twenty is absolute. You know. It's one of 492 00:24:15,280 --> 00:24:16,920 Speaker 4: those things, but it still has a market. 493 00:24:18,440 --> 00:24:21,120 Speaker 2: The comments about Blackwell remarkable in their own right. As 494 00:24:21,160 --> 00:24:26,399 Speaker 2: we bring in Jennifer Welch, Bloomberg Economics chief geo economist, Jenny, 495 00:24:26,400 --> 00:24:28,119 Speaker 2: it's great to see you. Thank you so much. I 496 00:24:28,160 --> 00:24:31,040 Speaker 2: can't imagine what you're thinking about this. We'll get to Blackwell. 497 00:24:31,119 --> 00:24:34,359 Speaker 2: Let's start with the H twenty. In what we know, 498 00:24:34,960 --> 00:24:39,159 Speaker 2: I'm hearing things like quid pro quo, unprecedented. Both of 499 00:24:39,200 --> 00:24:41,960 Speaker 2: those are true, right, These are companies that are essentially 500 00:24:42,760 --> 00:24:46,640 Speaker 2: paying for access. Pay to play is the new rule. 501 00:24:46,800 --> 00:24:48,040 Speaker 3: Yeah, in two ways. 502 00:24:48,080 --> 00:24:50,720 Speaker 8: Pay to play in the sense of, you know, getting 503 00:24:50,720 --> 00:24:52,800 Speaker 8: the White House to agree to essentially allow themsell theirs 504 00:24:53,080 --> 00:24:55,680 Speaker 8: chips at China, and in the sense of getting them 505 00:24:55,760 --> 00:24:58,359 Speaker 8: access to the Chinese market. As you noted, it was 506 00:24:58,400 --> 00:25:00,479 Speaker 8: only actually a few months ago that we just to 507 00:25:00,480 --> 00:25:02,760 Speaker 8: not allow the H twenty chips to be sold to China. 508 00:25:03,240 --> 00:25:06,439 Speaker 8: As President Trump noted, they are not as powerful as 509 00:25:06,440 --> 00:25:09,080 Speaker 8: the cutting edge chips, but they're still pretty powerful, and 510 00:25:09,160 --> 00:25:12,480 Speaker 8: that was the reason behind initially banning the. 511 00:25:12,440 --> 00:25:14,480 Speaker 2: Export of that just weeks ago, by the way, yes, 512 00:25:14,640 --> 00:25:15,560 Speaker 2: not that. 513 00:25:15,600 --> 00:25:16,840 Speaker 3: Long ago exactly. 514 00:25:17,480 --> 00:25:20,600 Speaker 8: Now, this scheme seems enable to allow the US government 515 00:25:20,680 --> 00:25:23,000 Speaker 8: to reap a lot of revenue, allow Nvidia and am 516 00:25:23,080 --> 00:25:25,600 Speaker 8: D to also reap revenue from selling to the Chinese market, 517 00:25:26,080 --> 00:25:28,920 Speaker 8: and China to gain from having access to these still 518 00:25:28,960 --> 00:25:30,040 Speaker 8: pretty powerful chips. 519 00:25:30,440 --> 00:25:35,119 Speaker 2: The idea of is talking about Blackwell, which is the 520 00:25:35,760 --> 00:25:38,159 Speaker 2: newest and best that Nvidia has, and there's quite a 521 00:25:38,160 --> 00:25:41,520 Speaker 2: backlog to get them. It just gives you the sense 522 00:25:41,520 --> 00:25:44,840 Speaker 2: that he's willing to make a deal on just about anything. Yeah, first, 523 00:25:45,640 --> 00:25:48,199 Speaker 2: the price tag, Well, that's right, So is that the 524 00:25:48,240 --> 00:25:51,439 Speaker 2: case here? And Jenny, to the extent that this is legal, 525 00:25:51,520 --> 00:25:53,040 Speaker 2: do we know is this constitutional? 526 00:25:53,400 --> 00:25:55,960 Speaker 8: So on the first question, it does seem like it's 527 00:25:56,000 --> 00:26:01,280 Speaker 8: sort of a commoditizing export controls or national security policies. 528 00:26:01,320 --> 00:26:03,440 Speaker 8: And we saw that earlier this year, in fact, where 529 00:26:03,480 --> 00:26:06,479 Speaker 8: the Trump administration put in place some export controls that 530 00:26:06,520 --> 00:26:09,679 Speaker 8: were explicitly about building leverage in talks with China, and 531 00:26:09,680 --> 00:26:11,879 Speaker 8: then they immediately rolled them off once they got to 532 00:26:12,440 --> 00:26:15,320 Speaker 8: an agreement in London with the Chinese on a true 533 00:26:15,359 --> 00:26:17,520 Speaker 8: trade truth and in order to get the rare earth 534 00:26:17,680 --> 00:26:19,879 Speaker 8: to flow back in right. So we have seen this 535 00:26:19,960 --> 00:26:22,840 Speaker 8: before from this team. On the second question of legality, 536 00:26:23,640 --> 00:26:26,480 Speaker 8: that's an interesting one because this very much looks like 537 00:26:26,520 --> 00:26:31,600 Speaker 8: an export tax, which isn't constitutional, but it's also technically 538 00:26:31,640 --> 00:26:35,320 Speaker 8: it seems a voluntary agreement by these companies, So maybe 539 00:26:35,359 --> 00:26:38,159 Speaker 8: that's the legality on which it stands. I think the 540 00:26:38,560 --> 00:26:41,159 Speaker 8: question that I would be asking if I was an 541 00:26:41,200 --> 00:26:45,040 Speaker 8: executive for a firm that produces things that are export controlled, 542 00:26:45,119 --> 00:26:46,520 Speaker 8: is will I be next? 543 00:26:46,760 --> 00:26:49,119 Speaker 2: Right? Absolutely? Do we know where the money goes, by 544 00:26:49,200 --> 00:26:51,320 Speaker 2: the way, and what it would be used for? No, 545 00:26:51,880 --> 00:26:53,840 Speaker 2: specially in Nvidia accounts somewhere in the White. 546 00:26:53,680 --> 00:26:56,000 Speaker 3: House unclear, Yes, okay, unclear. 547 00:26:56,240 --> 00:26:58,520 Speaker 2: Unclear where the money goes, unclear where the line is. 548 00:26:58,520 --> 00:27:01,200 Speaker 2: I'm guessing then, because it seems to me, if fifteen 549 00:27:01,240 --> 00:27:04,760 Speaker 2: percent gets you to sell H twenties in China, would 550 00:27:04,800 --> 00:27:07,639 Speaker 2: fifty percent be enough to sell Blackwells in Beijing? 551 00:27:07,920 --> 00:27:08,120 Speaker 7: Right? 552 00:27:08,160 --> 00:27:10,240 Speaker 8: And it wasn't clear when President Trump was talking about 553 00:27:10,240 --> 00:27:12,359 Speaker 8: press conference. Some of it might have been about the 554 00:27:12,400 --> 00:27:16,040 Speaker 8: capacity of the chip itself, how powerful it is. But yeah, 555 00:27:16,119 --> 00:27:18,240 Speaker 8: is there going to be a fee for power sort 556 00:27:18,240 --> 00:27:19,560 Speaker 8: of ratio applied there? 557 00:27:19,880 --> 00:27:21,920 Speaker 2: He said they turn it down thirty percent or something 558 00:27:22,000 --> 00:27:24,240 Speaker 2: like that. I don't know. Tomorrow's supposed to be a 559 00:27:24,240 --> 00:27:27,119 Speaker 2: big deadline with China. This was the trade truce that 560 00:27:27,359 --> 00:27:30,720 Speaker 2: was to be expiring tomorrow, but there's talk of it 561 00:27:30,760 --> 00:27:32,600 Speaker 2: being extended. What's your expectation. 562 00:27:32,960 --> 00:27:35,160 Speaker 8: I think it looks very likely it's going to be extended. 563 00:27:35,200 --> 00:27:39,959 Speaker 8: Certainly the chief negotiators for that deal, Secretary Lutnix, Secretary Bassett, 564 00:27:40,240 --> 00:27:43,600 Speaker 8: have indicated they expect that President Trump will approve an extension. 565 00:27:44,040 --> 00:27:46,080 Speaker 8: Maybe he's just trying to make the Chinese sweat a 566 00:27:46,119 --> 00:27:48,679 Speaker 8: little bit by holding out to the last moment, but 567 00:27:48,840 --> 00:27:50,720 Speaker 8: all signs seemed to point to you he doesn't want 568 00:27:50,720 --> 00:27:52,400 Speaker 8: an escalation of that trade war. 569 00:27:52,680 --> 00:27:53,800 Speaker 3: He wants some sort of deal. 570 00:27:53,840 --> 00:27:56,760 Speaker 8: You know, he was talking about soybeans earlier we've seen 571 00:27:56,800 --> 00:28:00,560 Speaker 8: that there's been probably some ongoing conversations about US experts, 572 00:28:00,760 --> 00:28:03,680 Speaker 8: So I think all signs are pointing positive. But as 573 00:28:03,720 --> 00:28:06,879 Speaker 8: with everything President Trump, you never know until he says 574 00:28:06,920 --> 00:28:07,840 Speaker 8: the last word on it. 575 00:28:07,920 --> 00:28:10,240 Speaker 2: Well, that's for sure. What should we be looking for though, 576 00:28:10,280 --> 00:28:12,040 Speaker 2: in the next couple of days when it comes to 577 00:28:12,119 --> 00:28:15,280 Speaker 2: China specifically, because we were said this was the big one, 578 00:28:15,320 --> 00:28:17,800 Speaker 2: it would take months, if not years to actually get 579 00:28:17,840 --> 00:28:20,479 Speaker 2: to a real trade deal with China, but we've been 580 00:28:20,520 --> 00:28:25,280 Speaker 2: seeing these framework arrangements that maybe something emerges in the 581 00:28:25,320 --> 00:28:28,320 Speaker 2: next week or so. What stage are we at in 582 00:28:28,320 --> 00:28:28,760 Speaker 2: this game? 583 00:28:28,840 --> 00:28:31,080 Speaker 8: My expectation is a little bit more calibrated that I 584 00:28:31,080 --> 00:28:33,160 Speaker 8: think they're probably going to extend the truth to give 585 00:28:33,200 --> 00:28:36,640 Speaker 8: themselves more time to negotiate and work towards some sort 586 00:28:36,640 --> 00:28:38,600 Speaker 8: of deal that perhaps the leaders, if they do meet 587 00:28:38,680 --> 00:28:41,320 Speaker 8: leader this fall, can announce that might involve something like 588 00:28:41,360 --> 00:28:45,720 Speaker 8: purchase agreements, expert control rules, maybe something from China and 589 00:28:45,760 --> 00:28:49,200 Speaker 8: fetanyl as well, but I think more along those lines, 590 00:28:49,320 --> 00:28:51,520 Speaker 8: probably still kind of takes some time to get there. 591 00:28:51,720 --> 00:28:54,280 Speaker 2: Really interesting, Jenny, Thank you so much. Jennifer Weltz, Bloomberg 592 00:28:54,320 --> 00:28:59,520 Speaker 2: Economics Chief geo Economists. This is why we have Jenny 593 00:28:59,560 --> 00:29:02,640 Speaker 2: Handy trying to figure out exactly what's going on. It's 594 00:29:02,680 --> 00:29:04,680 Speaker 2: not always that easy when it comes to the confusion 595 00:29:05,160 --> 00:29:08,360 Speaker 2: around tariffs, in this case a potential export tax. We're 596 00:29:08,400 --> 00:29:12,080 Speaker 2: watching shares of both in Vidia and AMD and they're 597 00:29:12,080 --> 00:29:14,800 Speaker 2: moving higher. We thought this might weigh on the shares 598 00:29:14,840 --> 00:29:17,640 Speaker 2: this morning when the headline first broke in Vidio right 599 00:29:17,640 --> 00:29:20,240 Speaker 2: now up about three tenths of a percent, almost a dollar. 600 00:29:20,360 --> 00:29:22,840 Speaker 2: AMD is doing pretty well. It's up one and a 601 00:29:22,880 --> 00:29:26,680 Speaker 2: half percent, up more than two dollars a share. You 602 00:29:26,680 --> 00:29:28,680 Speaker 2: can read a lot more about this on the terminal. 603 00:29:28,720 --> 00:29:30,240 Speaker 2: It is one of the biggest stories of the day. 604 00:29:30,240 --> 00:29:32,920 Speaker 2: In Vidia AMD to pay fifteen percent of China AI 605 00:29:33,040 --> 00:29:36,200 Speaker 2: chip sales. The other big one, of course, brings us 606 00:29:36,320 --> 00:29:38,520 Speaker 2: to the end of the week, and that would be Friday. 607 00:29:38,880 --> 00:29:41,800 Speaker 2: We now know that the meeting will take place in Alaska. 608 00:29:42,000 --> 00:29:44,000 Speaker 2: We don't have a lot of other details at this point. 609 00:29:44,320 --> 00:29:46,760 Speaker 2: President will be wheels up to Alaska Friday, and at 610 00:29:46,800 --> 00:29:49,160 Speaker 2: some point during the day we don't have a time either, 611 00:29:49,640 --> 00:29:52,880 Speaker 2: he will be in a room with Vladimir Putin talking 612 00:29:52,920 --> 00:29:57,040 Speaker 2: about presumably the end of the war in Ukraine. President 613 00:29:57,040 --> 00:29:59,240 Speaker 2: did get into this earlier at his news conference in 614 00:29:59,240 --> 00:30:02,360 Speaker 2: the briefing room. Listen, you know I'm going to see Putin. 615 00:30:02,440 --> 00:30:06,000 Speaker 4: I'm going to Russia on Friday. I don't like being 616 00:30:06,080 --> 00:30:08,959 Speaker 4: up here talking about how unsafe and how dirty and 617 00:30:08,960 --> 00:30:14,880 Speaker 4: disgusting this once beautiful capital was with graffiti all over 618 00:30:14,920 --> 00:30:16,920 Speaker 4: the walls. It's another part of it, by the way, 619 00:30:17,680 --> 00:30:20,880 Speaker 4: because we're talking about safety, we're also talking about beautification. 620 00:30:23,280 --> 00:30:28,640 Speaker 2: Beautification. Indeed, he has been talking about today. Brett Bruin 621 00:30:29,360 --> 00:30:31,640 Speaker 2: has spent a career as a diplomat and now a 622 00:30:31,680 --> 00:30:34,600 Speaker 2: consultant in this field, the president of the Global Situation Room, 623 00:30:34,880 --> 00:30:38,200 Speaker 2: former White House Global Engagement Director with US in studio 624 00:30:38,320 --> 00:30:41,240 Speaker 2: here and the mean streets of Washington. Brett, great to 625 00:30:41,240 --> 00:30:41,600 Speaker 2: see you. 626 00:30:41,720 --> 00:30:43,680 Speaker 3: Yeah, survived the trip over We've got out. 627 00:30:43,600 --> 00:30:45,640 Speaker 2: Of from the mean streets of Old Town to the 628 00:30:45,680 --> 00:30:49,600 Speaker 2: dystopian center of Washington here. Congratulations. I've got a lot 629 00:30:49,600 --> 00:30:51,440 Speaker 2: of questions for you, and I suspect you've got some 630 00:30:51,560 --> 00:30:53,840 Speaker 2: questions that need to be answered as well. This was 631 00:30:53,880 --> 00:30:55,880 Speaker 2: initially framed as a win for Putin just to get 632 00:30:55,920 --> 00:30:58,440 Speaker 2: in a room with Donald Trump. Now we're the host nation. 633 00:30:59,160 --> 00:31:01,360 Speaker 2: How is this going to unfold on Friday? And Alaska. 634 00:31:01,440 --> 00:31:04,920 Speaker 9: Well, let's start with that, because normally in diplomacy you 635 00:31:04,960 --> 00:31:07,720 Speaker 9: would hold that back a trip to the United States. 636 00:31:07,760 --> 00:31:10,920 Speaker 9: We all remember when Trump raised the prospect in his 637 00:31:11,000 --> 00:31:14,680 Speaker 9: first term of the Taliban coming to Camp David, and 638 00:31:14,720 --> 00:31:16,800 Speaker 9: there were a lot of us sitting around. Maybe the 639 00:31:16,840 --> 00:31:20,880 Speaker 9: reason they didn't come was that's just so strategically stupid. 640 00:31:21,400 --> 00:31:24,400 Speaker 9: And now we're inviting the leader of a country that's 641 00:31:24,480 --> 00:31:29,000 Speaker 9: invaded an ally not to sign an agreement, not because 642 00:31:29,040 --> 00:31:33,600 Speaker 9: he's made major, major concessions, just to feel each other out. 643 00:31:33,640 --> 00:31:37,000 Speaker 9: According to the President earlier today, that's not the sort 644 00:31:37,080 --> 00:31:40,920 Speaker 9: of thing that you do in sequential order. You start 645 00:31:40,960 --> 00:31:43,800 Speaker 9: with the substance and then you get to the superficial stuff. 646 00:31:43,920 --> 00:31:47,320 Speaker 2: Right, they should, I guess, in the traditional sense, be 647 00:31:47,360 --> 00:31:49,400 Speaker 2: showing up with an agreement already in hand. Right, we're 648 00:31:49,440 --> 00:31:52,600 Speaker 2: coming here to codify this agreement. Will there be other 649 00:31:52,640 --> 00:31:55,160 Speaker 2: people in the room? Will this go on for hours? 650 00:31:55,160 --> 00:31:55,920 Speaker 2: What do you expect? 651 00:31:56,120 --> 00:31:59,880 Speaker 9: Well, we know from past meetings, even past telephone calls, 652 00:32:00,120 --> 00:32:05,040 Speaker 9: Trump likes to go mano almano, with putin maybe a 653 00:32:05,440 --> 00:32:09,120 Speaker 9: Russian translator in there, which means there are no American 654 00:32:09,240 --> 00:32:13,360 Speaker 9: eyes or ears on that conversation. Concerning Yes, who will 655 00:32:13,360 --> 00:32:16,520 Speaker 9: be in the room, probably Marco Rubio, not least of 656 00:32:16,560 --> 00:32:20,680 Speaker 9: which because he holds like eleven different cabinet positions at 657 00:32:20,680 --> 00:32:23,480 Speaker 9: the moment. Yes, But also on top of that, look 658 00:32:23,520 --> 00:32:27,840 Speaker 9: the question of Voladimir Zolenski. We are talking about Ukraine, 659 00:32:28,280 --> 00:32:31,240 Speaker 9: and yet Ukraine still is a question mark, you know, 660 00:32:31,280 --> 00:32:34,920 Speaker 9: And it's interesting JD Van's yesterday saying well, we'll kind 661 00:32:34,920 --> 00:32:37,520 Speaker 9: of see and work that out. No, that's something you 662 00:32:37,640 --> 00:32:41,680 Speaker 9: work out before you extend the invitation to Putin, And 663 00:32:42,000 --> 00:32:45,000 Speaker 9: the price of Putin getting to come to the US 664 00:32:45,520 --> 00:32:48,880 Speaker 9: is sitting at a table with Volodimir Zelenski, and the 665 00:32:48,920 --> 00:32:51,200 Speaker 9: notion that they haven't worked these things out ahead of 666 00:32:51,200 --> 00:32:52,640 Speaker 9: time is just really perplexing. 667 00:32:53,280 --> 00:32:57,280 Speaker 2: He just said this morning that the next meeting would 668 00:32:57,320 --> 00:33:00,920 Speaker 2: likely be between Putin and Zelensky, as he said, or 669 00:33:01,000 --> 00:33:03,040 Speaker 2: all three of them, because he'd be glad to show 670 00:33:03,120 --> 00:33:06,360 Speaker 2: up and help to mediate this. He's approaching this as 671 00:33:06,400 --> 00:33:08,920 Speaker 2: the man who wants the Nobel Peace Prize. Does that 672 00:33:08,920 --> 00:33:10,120 Speaker 2: bring its own liability? 673 00:33:10,240 --> 00:33:13,840 Speaker 9: Well, let me disabuse those around this town who are 674 00:33:13,880 --> 00:33:17,640 Speaker 9: floating the idea that the Nobel Committee a committee of 675 00:33:18,040 --> 00:33:23,920 Speaker 9: Swedes Norwegians who believe firmly in things like anti colonialism. 676 00:33:24,240 --> 00:33:27,360 Speaker 9: Are going to give a guy who's threatening to colonize 677 00:33:27,440 --> 00:33:31,600 Speaker 9: not one, not two, but multiple countries the Peace Prize 678 00:33:31,600 --> 00:33:33,880 Speaker 9: Because when we talk about peace, we're not just talking 679 00:33:33,960 --> 00:33:37,720 Speaker 9: about you know, this kind of superficial social post that 680 00:33:37,840 --> 00:33:40,400 Speaker 9: Trump puts out there and claims that it's a peace deal. 681 00:33:40,600 --> 00:33:44,160 Speaker 9: We're talking about real, substantive peace deals. And Joe, you 682 00:33:44,240 --> 00:33:46,440 Speaker 9: and I have had conversations about this. But you know, 683 00:33:46,480 --> 00:33:50,320 Speaker 9: when we're involved in peace deals, there are chapters. There 684 00:33:50,320 --> 00:33:53,160 Speaker 9: are whole volumes that are involved with you know, borders 685 00:33:53,200 --> 00:33:56,520 Speaker 9: as well as how exchanges of troops and the whole 686 00:33:56,600 --> 00:33:59,840 Speaker 9: confidence building measure. None of that is here with any of. 687 00:33:59,800 --> 00:34:02,720 Speaker 2: These Well, in the meantime, Voladimir Zelensky is sitting in 688 00:34:02,760 --> 00:34:07,000 Speaker 2: his office reading stories about freezing lines in place that 689 00:34:07,040 --> 00:34:10,480 Speaker 2: we're going to hand over the Donbass and Crimea, and 690 00:34:10,520 --> 00:34:13,719 Speaker 2: the President referred to these so called land swaps. He's 691 00:34:13,760 --> 00:34:16,239 Speaker 2: asked about this earlier today, Brett, let's listen to what 692 00:34:16,280 --> 00:34:16,640 Speaker 2: he said. 693 00:34:17,360 --> 00:34:21,279 Speaker 4: The next meeting will be with Zelenski and Putin, or 694 00:34:21,440 --> 00:34:24,000 Speaker 4: Zelenskin putting to me, I'll be there if they need, 695 00:34:24,080 --> 00:34:26,280 Speaker 4: but I want to have a meeting set up between 696 00:34:26,320 --> 00:34:27,160 Speaker 4: the two leaders. 697 00:34:27,520 --> 00:34:28,640 Speaker 2: I was a little. 698 00:34:28,719 --> 00:34:30,960 Speaker 4: Bothered by the fact that Zelenski was saying, well, I 699 00:34:30,960 --> 00:34:34,360 Speaker 4: have to get constitutional approved. I mean, he's got approval 700 00:34:34,400 --> 00:34:37,120 Speaker 4: to go into war and kill everybody, but he needs 701 00:34:37,360 --> 00:34:40,520 Speaker 4: approval to do a land swap because there'll be some 702 00:34:40,920 --> 00:34:44,440 Speaker 4: land swapping going on. I know that through Russia and 703 00:34:44,480 --> 00:34:48,520 Speaker 4: through conversations with everybody to the good for the good 704 00:34:48,600 --> 00:34:52,120 Speaker 4: of Ukraine, good stuff, not bad stuff, also some bad 705 00:34:52,120 --> 00:34:52,920 Speaker 4: stuff for. 706 00:34:52,960 --> 00:34:58,160 Speaker 2: Both some bad stuff land swapping. Are we talking about 707 00:34:58,280 --> 00:35:01,480 Speaker 2: don Bass and Crimea and ex change for Japarisia or 708 00:35:01,520 --> 00:35:04,360 Speaker 2: something very lopside? Or what does he mean by swapping? 709 00:35:04,680 --> 00:35:08,680 Speaker 9: Just to be clear, it is two thousand and twenty five, 710 00:35:09,000 --> 00:35:13,160 Speaker 9: it is not eighteen twenty five. The president of the 711 00:35:13,239 --> 00:35:18,120 Speaker 9: United States does not get to swap territories of other countries. 712 00:35:18,400 --> 00:35:21,160 Speaker 9: That is why we had the Peace of Westphalure of 713 00:35:21,239 --> 00:35:27,279 Speaker 9: sixteen thirty eight. It is critically important that Trump understand 714 00:35:27,360 --> 00:35:31,000 Speaker 9: what he can and what he cannot negotiate away. And 715 00:35:31,120 --> 00:35:33,360 Speaker 9: at the end of the day, not only Ukraine, but 716 00:35:33,400 --> 00:35:36,800 Speaker 9: our European allies are not going to accept that Trump 717 00:35:37,040 --> 00:35:40,920 Speaker 9: is rewarding somebody who invaded another country, that he is 718 00:35:41,000 --> 00:35:44,680 Speaker 9: deciding what the borders of Ukraine will be. Ultimately, yes, 719 00:35:44,920 --> 00:35:47,239 Speaker 9: it is up to the Ukrainian constitution. More importantly, it's 720 00:35:47,280 --> 00:35:50,000 Speaker 9: up to the Ukrainian people to make that determination. 721 00:35:50,120 --> 00:35:53,760 Speaker 2: Well, so from the idea of rewarding Russia for its behavior, 722 00:35:53,760 --> 00:35:55,640 Speaker 2: and that does seem to be the essence of the 723 00:35:55,680 --> 00:35:59,000 Speaker 2: agreement that we have been talking about, at least in 724 00:35:59,040 --> 00:36:00,480 Speaker 2: the past couple of days. By the way, there is 725 00:36:00,480 --> 00:36:03,520 Speaker 2: an alternate European plan that we can get into as well, 726 00:36:03,520 --> 00:36:05,400 Speaker 2: that I'm not sure the President has a lot of 727 00:36:05,440 --> 00:36:08,960 Speaker 2: interest in. But look, I'm going to ask you this 728 00:36:09,000 --> 00:36:10,920 Speaker 2: and you might not want to answer it. A lot 729 00:36:10,920 --> 00:36:14,920 Speaker 2: of the analysis recently has referred to Munich that the 730 00:36:14,920 --> 00:36:18,560 Speaker 2: president is walking into the next Munich. Is that where 731 00:36:18,640 --> 00:36:20,440 Speaker 2: your head is? I think it's worse. 732 00:36:20,560 --> 00:36:22,520 Speaker 3: In some sense, it's worse, yes. 733 00:36:22,400 --> 00:36:26,440 Speaker 9: Because in the sense that we face back in the 734 00:36:26,520 --> 00:36:29,840 Speaker 9: run up to World War Two with Adolf Hitler, with 735 00:36:31,400 --> 00:36:34,280 Speaker 9: the threat that he posed a clear and present danger. 736 00:36:34,880 --> 00:36:35,600 Speaker 2: But what. 737 00:36:37,040 --> 00:36:40,560 Speaker 9: Putin does is actually in many ways more nefarious because 738 00:36:40,600 --> 00:36:43,840 Speaker 9: he is, yes, in some cases, like in Ukraine, directly 739 00:36:43,920 --> 00:36:48,520 Speaker 9: attacking a sovereign country, but in others he's undermining from 740 00:36:48,960 --> 00:36:51,200 Speaker 9: inside and that includes in the United Kingdom and other 741 00:36:51,239 --> 00:36:53,480 Speaker 9: parts of Europe and here in the United States. That 742 00:36:53,560 --> 00:36:56,000 Speaker 9: again is why it is so strange that you would 743 00:36:56,080 --> 00:37:01,720 Speaker 9: invite Vladimir Putin to American territory while he is still 744 00:37:01,840 --> 00:37:06,640 Speaker 9: actively working to undermine our institutions, our ideals, the borders 745 00:37:06,640 --> 00:37:09,480 Speaker 9: of the United States. I mean, I think it was 746 00:37:09,560 --> 00:37:12,400 Speaker 9: somewhat of a Freudian slip today when Trump suggested he 747 00:37:12,480 --> 00:37:16,080 Speaker 9: was going to Russia. I certainly hope that Alaskan territory, 748 00:37:16,280 --> 00:37:20,160 Speaker 9: American territory is not in the cards with these land swaps. 749 00:37:20,400 --> 00:37:22,440 Speaker 2: But you know, there was a time, I do have. 750 00:37:22,440 --> 00:37:25,920 Speaker 9: To say, at least in the Munich Agreement, there was 751 00:37:27,040 --> 00:37:31,600 Speaker 9: a European and American consensus about the rights of certain 752 00:37:31,680 --> 00:37:35,480 Speaker 9: countries about international law. There is not currently, and that's 753 00:37:35,480 --> 00:37:38,080 Speaker 9: what makes this moment Joe so dangerous. 754 00:37:38,360 --> 00:37:42,440 Speaker 2: European plan rejecting this Russian proposal here to keep the 755 00:37:42,480 --> 00:37:46,160 Speaker 2: Eastern dun Buss. There was a big meeting over the 756 00:37:46,160 --> 00:37:50,880 Speaker 2: weekend calling for a diplomatic end here and protect Ukraine's interests. 757 00:37:51,520 --> 00:37:55,480 Speaker 2: Does Donald Trump care what our European allies think. He 758 00:37:55,600 --> 00:37:57,320 Speaker 2: suggested he'd give them a call and let him know 759 00:37:57,360 --> 00:37:58,400 Speaker 2: what happened at for this meeting. 760 00:37:58,440 --> 00:38:02,120 Speaker 9: So here's the funny thing. Trump, now a good two 761 00:38:02,160 --> 00:38:05,399 Speaker 9: hundred days into his term, is starting to realize, yes, 762 00:38:05,440 --> 00:38:09,239 Speaker 9: you can bluster, you can bulldoze over our allies, but 763 00:38:09,360 --> 00:38:11,719 Speaker 9: then it comes back to biting you in the rear 764 00:38:11,880 --> 00:38:15,040 Speaker 9: end because they are not going to cooperate in other ways. 765 00:38:15,120 --> 00:38:18,080 Speaker 9: And yes he can, certainly with Ursula vonder Lane and 766 00:38:18,120 --> 00:38:22,880 Speaker 9: the European Union try to impose his fifteen percent tariffs 767 00:38:23,239 --> 00:38:26,440 Speaker 9: one way tariffs on the EU, but they, in this 768 00:38:26,600 --> 00:38:30,200 Speaker 9: notion of reciprocity and international relations, are able to find 769 00:38:30,239 --> 00:38:32,879 Speaker 9: ways to be less cooperative on fronts that we need them. 770 00:38:32,920 --> 00:38:35,360 Speaker 2: Fascinating. I'd love to talk to you once this meeting 771 00:38:35,400 --> 00:38:37,400 Speaker 2: takes place. This is why we bring in Brett Ruin 772 00:38:37,760 --> 00:38:40,440 Speaker 2: fascinating conversation. We always learn something from Brett at the 773 00:38:40,480 --> 00:38:46,160 Speaker 2: Global Situation Room. Thanks for listening to the Balance of 774 00:38:46,200 --> 00:38:49,720 Speaker 2: Power podcast. Make sure to subscribe if you haven't already, 775 00:38:49,719 --> 00:38:53,040 Speaker 2: at Apple, Spotify, or wherever you get your podcasts, and 776 00:38:53,120 --> 00:38:55,719 Speaker 2: you can find us live every weekday from Washington, DC 777 00:38:55,880 --> 00:38:58,560 Speaker 2: at noontime Eastern at Bloomberg dot com.