Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Single best idea. It was a sterling day on the
Speaker 2: show with all sorts of good conversations. I'll be quick
Speaker 2: this morning. I said this earlier in setting up Nancy
Speaker 2: Lazarre of Piper Sandler, and that it's a blur for
Speaker 2: me and Paul. We don't know common are Gohan who
Speaker 2: was with us forty five minutes ago, Who's going to
Speaker 2: be with us forty five minutes from now. We have
Speaker 2: this incredible team including Art Wellow telling us what to do,
Speaker 2: and side Benson, and they're all just tick by tick
Speaker 2: saying Nancy Lazar's next kind of thing. But I remember
Speaker 2: crystal clear what Nancy Lazar told me ninety days ago
Speaker 2: about the underinvestment in the private sector in America. She
Speaker 2: has radically changed tone with this new legislation, which will
Speaker 2: provide for Reagan like investment in America, but within it
Speaker 2: already a government slow down.
Speaker 1: We may already be in that environment right now. I actually,
Speaker 1: when I look at the government spending data, I can
Speaker 1: see some incremental restraint. I think I get booed when
Speaker 1: I talk about that, but you can see it if
Speaker 1: you look very closely at the monthly Treasury statement. The
Speaker 1: federal outlaid data are starting to stall out. You're hearing
Speaker 1: it from companies, software defense consultants. You are hearing companies
Speaker 1: say the government's being a little bit more stringy. You're
Speaker 1: seeing it in the job data. Federal employment has declined
Speaker 1: for the past five months. It's going to given what
Speaker 1: happened yesterday, it's likely to accelerate. Federal employment is likely
Speaker 1: to continue to decline. So I'm seeing government spending being
Speaker 1: chipped away. I might almost like a David Stockman moment,
Speaker 1: which is like, you know, wake up and smell the coffee.
Speaker 1: The the deficit is way too big. Government spending is
Speaker 1: way too big. I think people, some people within the
Speaker 1: administration understand that, and you are starting to see some
Speaker 1: incremental restraint, and not this year, but maybe next year
Speaker 1: the deficit can come in a little bit better than expected.
Speaker 2: Nancy was a Piper Sandler. The Stockman moment there, folks,
Speaker 2: was the back side of the Reagan administration when they
Speaker 2: had to really confront budget challenges, perhaps like what we
Speaker 2: have right now. A privilege always to have Douglas Irwin
Speaker 2: with us of Dartmouth College, his book Against the Tide
Speaker 2: is the iconic read on American trade. We talked to
Speaker 2: him about William McKinley and Trump's affection for the president
Speaker 2: of the late late nineteenth century. Here Douglas Irwin on
Speaker 2: the moment at hand.
Speaker 3: I think the standard responses you sort of have to
Speaker 3: look through the price effects, but you can't look through
Speaker 3: the GDP of fact.
Speaker 2: Yes, thank you.
Speaker 3: So this is really why the said will be in
Speaker 3: a conunder if we see higher prices and lower growth.
Speaker 3: You know, on one hand you want a titan to
Speaker 3: take care of the price impact. On the other hand,
Speaker 3: you want to loosen to take care of the GDP effect.
Speaker 3: I think it really depends on what sort of configuration
Speaker 3: of tariffs we see in August and coming months.
Speaker 2: Doug Irwin with US of Dartmouth College. I'd love to
Speaker 2: see a new effort out from him, but he's been
Speaker 2: really prolific and very important in this time of tariffs
Speaker 2: across the nation. On your morning commute, please pay attention
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