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Speaker 1: We are happy to bring in Lale brainer, Director of

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Speaker 1: the National Economic Council. The AI Executive Order, Doctor Brainard

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Speaker 1: is broad in sprawling the EU. In China, they've already

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Speaker 1: surpassed the United States and developing regulation. Give us a

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Speaker 1: sense of how the administration plans to implement effectively this

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Speaker 1: AI Executive Order in a timely manner.

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Speaker 2: You know, I think this is actually the most significant

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Speaker 2: effort to capture the benefits and manage the risks of

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Speaker 2: AI in any country. It is, as you said, an

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Speaker 2: executive order that is comprehensive in nature. It builds on

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Speaker 2: the voluntary commitments of the leading producers of AI who

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Speaker 2: are American, and it puts in place safeguards to make

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Speaker 2: sure that artificial intelligence is safe, secure and trustworthy so

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Speaker 2: that we can take advantage of all those great benefits

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Speaker 2: in terms of growth and productivity and better targeted solutions

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Speaker 2: while managing the potential perils.

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Speaker 3: Well, you're clearly paving the road on this, and you

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Speaker 3: just said a couple of important things, including voluntary partners

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Speaker 3: and I wonder a director just so we understand, can

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Speaker 3: any of this be enforced without Congress taking action?

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Speaker 2: Absolutely? I think what we are asking for in this

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Speaker 2: Executive Order is that companies make sure that they report

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Speaker 2: to the government on the results of their safety tests,

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Speaker 2: that they disclose that just for the most powerful models.

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Speaker 2: And we do have authorities that we're bringing to bear

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Speaker 2: there as well as cybersecurity authorities. So we do have

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Speaker 2: existing authorities. But of course it will also important be

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Speaker 2: important for Congress to build on these efforts as we

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Speaker 2: learn more and as the technology advances.

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Speaker 1: Add the technology advances, Goldman Sachs says AI could raise

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Speaker 1: global GDP by seven percent, but at the same time

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Speaker 1: could also mean that three hundred million jobs go away.

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Speaker 1: So how does the administration view this when it comes

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Speaker 1: to the labor force participation? How can the US do

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Speaker 1: both ensure both growth and AI and that Americans keep

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Speaker 1: their jobs.

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Speaker 2: That's part of the reason that the Executive Order has

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Speaker 2: really important safeguards in it for making sure that artificial

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Speaker 2: intelligence that is introduced into the workplace, that workers have

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Speaker 2: voice in how it's deployed, so that artificial intelligence increases

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Speaker 2: their capacities, that they refair rewards from the deployment of

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Speaker 2: artificial intelligence, that they not be subject to surveillance and

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Speaker 2: discriminatory treatment. And we believe that there's a lot that

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Speaker 2: the government can do to make sure that the benefits

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Speaker 2: reach the workplace and it augments jobs, does not displace,

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Speaker 2: but rather augments the capacity of workers in so many fields.

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Speaker 3: Director Renner, We've been having a big conversation today in Washington,

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Speaker 3: not only about AI because of the event at the

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Speaker 3: White House, but also the job market and organized labor,

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Speaker 3: specifically now that the United Auto Workers apparently have reached

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Speaker 3: a settlement with all three of the Big Three. This,

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Speaker 3: of course, was a picket line that President Biden was

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Speaker 3: walking on himself just a couple of weeks ago. We

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Speaker 3: heard from the uaw's president Sean Fain today talking about

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Speaker 3: the deal with Ford last night. I'd love for you

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Speaker 3: to listen to what he said and have you respond.

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Speaker 3: Here's Sean Fame.

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Speaker 4: This contract demonstrates the incredible power that workers have when

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Speaker 4: they are not afraid to use it. We went to

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Speaker 4: Ford with a of not leaving a diem on the table,

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Speaker 4: and we accomplish that the UAW is saving the American

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Speaker 4: dream and we are doing it together.

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Speaker 3: I know Director that President Biden sees this as a

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Speaker 3: big plus for the economy and took a bit of

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Speaker 3: a victory lap today at the White House. He talked

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Speaker 3: about this during your event on AI. I just wonder, though,

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Speaker 3: from your perch as the director here looking at the

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Speaker 3: future of our labor market, if you see the genie

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Speaker 3: kind of out of the bottle.

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Speaker 2: Here.

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Speaker 3: We're hearing a lot about organized labor around the country.

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Speaker 3: The actors strike has yet to be a resolved. We

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Speaker 3: understand the culinary workers in Las Vegas might be next.

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Speaker 3: How concerned are you about this becoming a growing issue

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Speaker 3: and more strikes popping up around the country.

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Speaker 2: Well, I think we see the UAW contract tentative agreement

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Speaker 2: with gm Ford and Stillantis as being a very positive

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Speaker 2: outcome of what can happen when the parties really work

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Speaker 2: in good faith and stay at the collective bargaining table.

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Speaker 2: This is really what the President means when he talks

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Speaker 2: about growing the economy from the middle out and the

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Speaker 2: bottom up. Union jobs have always been an important path

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Speaker 2: to the middle class, and in the UAW tentative agreements

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Speaker 2: as well as in previous agreements that we saw with

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Speaker 2: healthcare workers, with court workers, with rail workers, with writers,

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Speaker 2: in all cases, what we are seeing is good faith

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Speaker 2: negotiations leading to workers getting a fair share of the

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Speaker 2: gains in these industries at a time when American companies

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Speaker 2: are really doing so well.

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Speaker 3: Hard to have a functioning job market, though, particularly in

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Speaker 3: an economic slowdown, when thousands of workers are on the

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Speaker 3: pa get line. Is that going to be our reality

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Speaker 3: next year?

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Speaker 2: Quite the reverse. What you see is that our labor

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Speaker 2: force has grown tremendously over the course of this year,

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Speaker 2: and we believe that that is in part because workers

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Speaker 2: are coming back off the sidelines, attracted by good pay

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Speaker 2: into what is an incredibly strong economy four point nine

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Speaker 2: percent growth we learned just last week in the third quarter,

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Speaker 2: with payrolls continuing to increase. So we see labor force

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Speaker 2: participation as being one of the real bright points of

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Speaker 2: this good economy.

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Speaker 1: The real story though, in the market director of brain ours,

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Speaker 1: of course, the surge and longer term bond yields, and

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Speaker 1: I loved you to weigh on a bit of a

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Speaker 1: debate that's happening in the marketplace. BET chair J. Powell

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Speaker 1: said that one of the contributors to higher yields is

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Speaker 1: this talk and the fact that we are seeing physcal deficits.

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Speaker 1: He's saying that's a contributor. While the Treasury Secretary says

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Speaker 1: it has nothing to do with the physical deficit, but

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Speaker 1: has to do with actually the US economic growth. From

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Speaker 1: your standpoint, which is it?

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Speaker 2: So, Look, I think that all of these factors are contributors.

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Speaker 2: When I talk to market participants, they talk about both

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Speaker 2: technical factors supply and demand changes, but they also talk

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Speaker 2: about potential fundamentals. I think it's hard to say yet

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Speaker 2: how much of that is contributed by, for instance, higher

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Speaker 2: Productivity's stronger growth. That higher productivity attributable to investments in

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Speaker 2: the supply side of our economy that are associated with

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Speaker 2: the Chips and Science Act, the Infrastructure Act, the Clean

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Speaker 2: Energy provisions of the Inflation Reduction Act, and also we've

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Speaker 2: been talking about AI and the potential that it may

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Speaker 2: also be contributing. But we need to be working on

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Speaker 2: fiscal responsibility. We had an important agreement just in June

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Speaker 2: that brings the deficit down by one trillion dollars. We

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Speaker 2: need to work together, Republicans and Democrats to be fisc

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Speaker 2: fully responsible into the future.

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Speaker 3: With that said, we'd love to hear from you, lastly,

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Speaker 3: Director on deficits, something that President Biden took talked quite

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Speaker 3: a bit about over the past two years and took

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Speaker 3: quite a bit of credit for lowering the deficit. We

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Speaker 3: of course heard quite recently that the government's deficit increased

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Speaker 3: twenty three percent in twenty twenty three as lower income

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Speaker 3: tax receipts dragged down revenue and interest rates kept rising.

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Speaker 3: Is that going to be our new reality now? And

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Speaker 3: how worried should investors be about that?

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Speaker 2: Well, look, the deficit has come down by one trillion

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Speaker 2: dollars under President Biden. He signed the Fiscal Responsibility Act

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Speaker 2: to bring spending down by an additional one trillion over

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Speaker 2: the next ten years.

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Speaker 4: Right.

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Speaker 2: That reduced revenues that were associated with the business side

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Speaker 2: of the Trump tax cuts, the tax cuts for the

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Speaker 2: wealthy under the previous president. Those have really brought revenues

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Speaker 2: down as a percent of the economy relative to where

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Speaker 2: they've been historically. So we need to get that back up.

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Speaker 2: Most Americans support that they'd like to see a fair

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Speaker 2: tax system, and there's plenty of opportunity just to bring

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Speaker 2: those taxes back slightly more in line with historical levels.

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Speaker 3: We appreciate your spending some time with us and say

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Speaker 3: hi to the trigger treaders out there in the White

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Speaker 3: House driveway. National Economic Council director Lalel Brainerd with us

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Speaker 3: on Bloomberg's HEV thank You