WEBVTT - Single Best Idea with Tom Keene: Nancy Lazar & Doug Irwin 

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news.

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<v Speaker 2>Single best idea. It was a sterling day on the

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<v Speaker 2>show with all sorts of good conversations. I'll be quick

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<v Speaker 2>this morning. I said this earlier in setting up Nancy

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<v Speaker 2>Lazarre of Piper Sandler, and that it's a blur for

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<v Speaker 2>me and Paul. We don't know common are Gohan who

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<v Speaker 2>was with us forty five minutes ago, Who's going to

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<v Speaker 2>be with us forty five minutes from now. We have

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<v Speaker 2>this incredible team including Art Wellow telling us what to do,

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<v Speaker 2>and side Benson, and they're all just tick by tick

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<v Speaker 2>saying Nancy Lazar's next kind of thing. But I remember

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<v Speaker 2>crystal clear what Nancy Lazar told me ninety days ago

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<v Speaker 2>about the underinvestment in the private sector in America. She

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<v Speaker 2>has radically changed tone with this new legislation, which will

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<v Speaker 2>provide for Reagan like investment in America, but within it

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<v Speaker 2>already a government slow down.

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<v Speaker 1>We may already be in that environment right now. I actually,

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<v Speaker 1>when I look at the government spending data, I can

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<v Speaker 1>see some incremental restraint. I think I get booed when

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<v Speaker 1>I talk about that, but you can see it if

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<v Speaker 1>you look very closely at the monthly Treasury statement. The

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<v Speaker 1>federal outlaid data are starting to stall out. You're hearing

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<v Speaker 1>it from companies, software defense consultants. You are hearing companies

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<v Speaker 1>say the government's being a little bit more stringy. You're

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<v Speaker 1>seeing it in the job data. Federal employment has declined

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<v Speaker 1>for the past five months. It's going to given what

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<v Speaker 1>happened yesterday, it's likely to accelerate. Federal employment is likely

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<v Speaker 1>to continue to decline. So I'm seeing government spending being

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<v Speaker 1>chipped away. I might almost like a David Stockman moment,

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<v Speaker 1>which is like, you know, wake up and smell the coffee.

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<v Speaker 1>The the deficit is way too big. Government spending is

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<v Speaker 1>way too big. I think people, some people within the

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<v Speaker 1>administration understand that, and you are starting to see some

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<v Speaker 1>incremental restraint, and not this year, but maybe next year

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<v Speaker 1>the deficit can come in a little bit better than expected.

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<v Speaker 2>Nancy was a Piper Sandler. The Stockman moment there, folks,

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<v Speaker 2>was the back side of the Reagan administration when they

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<v Speaker 2>had to really confront budget challenges, perhaps like what we

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<v Speaker 2>have right now. A privilege always to have Douglas Irwin

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<v Speaker 2>with us of Dartmouth College, his book Against the Tide

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<v Speaker 2>is the iconic read on American trade. We talked to

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<v Speaker 2>him about William McKinley and Trump's affection for the president

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<v Speaker 2>of the late late nineteenth century. Here Douglas Irwin on

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<v Speaker 2>the moment at hand.

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<v Speaker 3>I think the standard responses you sort of have to

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<v Speaker 3>look through the price effects, but you can't look through

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<v Speaker 3>the GDP of fact.

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<v Speaker 2>Yes, thank you.

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<v Speaker 3>So this is really why the said will be in

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<v Speaker 3>a conunder if we see higher prices and lower growth.

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<v Speaker 3>You know, on one hand you want a titan to

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<v Speaker 3>take care of the price impact. On the other hand,

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<v Speaker 3>you want to loosen to take care of the GDP effect.

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<v Speaker 3>I think it really depends on what sort of configuration

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<v Speaker 3>of tariffs we see in August and coming months.

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<v Speaker 2>Doug Irwin with US of Dartmouth College. I'd love to

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<v Speaker 2>see a new effort out from him, but he's been

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<v Speaker 2>really prolific and very important in this time of tariffs

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<v Speaker 2>across the nation. On your morning commute, please pay attention

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