1 00:00:02,520 --> 00:00:10,520 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business Week, 2 00:00:10,800 --> 00:00:14,080 Speaker 1: Insight from the reporters and editors that bring you America's 3 00:00:14,080 --> 00:00:19,080 Speaker 1: most trusted business magazine, plus global business, finance and tech news. 4 00:00:19,440 --> 00:00:24,160 Speaker 1: The Bloomberg Business Week Podcast with Carol Masser and Tim Stenebeck. 5 00:00:24,520 --> 00:00:26,160 Speaker 1: On Bloomberg Radio. 6 00:00:27,000 --> 00:00:29,200 Speaker 2: We have Monica Guerra here in studio with US policy 7 00:00:29,200 --> 00:00:31,040 Speaker 2: analyst at Morgan Stanley, and so as we listen to 8 00:00:31,040 --> 00:00:32,920 Speaker 2: this music in the back, we'll keep it going just 9 00:00:32,960 --> 00:00:34,960 Speaker 2: for some flavor and feel as we go for Monica. 10 00:00:35,000 --> 00:00:36,600 Speaker 2: Great to have you with us. And I'm kind of 11 00:00:36,600 --> 00:00:40,360 Speaker 2: curious how you, as someone who is following this from 12 00:00:40,440 --> 00:00:43,200 Speaker 2: an investor perspectives or processed what we've seen so far 13 00:00:43,240 --> 00:00:45,960 Speaker 2: in the first speech, the formal inaugural address, in the 14 00:00:46,040 --> 00:00:48,519 Speaker 2: kind of second more loose inaugural address that we got 15 00:00:48,520 --> 00:00:51,479 Speaker 2: after that, what's it telling you about how the policies 16 00:00:51,520 --> 00:00:52,880 Speaker 2: of this president are going to be going to be 17 00:00:53,000 --> 00:00:53,400 Speaker 2: rolled out? 18 00:00:53,800 --> 00:00:55,720 Speaker 3: Yeah, I think at first, if you're looking at the 19 00:00:55,760 --> 00:00:59,280 Speaker 3: executive orders, right, he essentially went through his top line 20 00:00:59,320 --> 00:01:05,120 Speaker 3: items immigration, right, immigrate, some strict immigration reforms, and that 21 00:01:05,160 --> 00:01:08,400 Speaker 3: could have a longer term impact on the economy. So 22 00:01:08,840 --> 00:01:10,760 Speaker 3: day one we have to see exactly what that looks like, 23 00:01:10,800 --> 00:01:12,120 Speaker 3: how is it going to take shape, how are they 24 00:01:12,160 --> 00:01:14,360 Speaker 3: going to implement. So one of the things we spend 25 00:01:14,360 --> 00:01:16,399 Speaker 3: a lot of time thinking about and talking about is 26 00:01:16,800 --> 00:01:20,560 Speaker 3: not just the magnitude of the policies, but the pacing 27 00:01:20,560 --> 00:01:24,160 Speaker 3: and sequencing. So if you're just focusing day one on immigration, 28 00:01:24,600 --> 00:01:26,640 Speaker 3: you have to consider that that has the more of 29 00:01:26,640 --> 00:01:29,920 Speaker 3: a five year lag to truly having a pull on 30 00:01:29,959 --> 00:01:34,280 Speaker 3: the economy because you're looking at demographics, fertility rates going down, 31 00:01:34,319 --> 00:01:37,000 Speaker 3: et cetera over time, and so that is a more 32 00:01:37,040 --> 00:01:40,160 Speaker 3: gradual impact. Now, if you're looking at some of his 33 00:01:40,560 --> 00:01:44,880 Speaker 3: more economically stimulative policies that are deregulatory, et cetera, that 34 00:01:44,920 --> 00:01:48,840 Speaker 3: could have a more and a more immediate implication. 35 00:01:49,080 --> 00:01:51,560 Speaker 4: Well, would there be would it be possible to have 36 00:01:52,000 --> 00:01:55,800 Speaker 4: more of an economic shock from immigration policy, whereas the 37 00:01:55,800 --> 00:01:58,400 Speaker 4: effects would not be lagged If indeed he does follow 38 00:01:58,440 --> 00:02:02,800 Speaker 4: through with essentially deporting you know, up to eleven million 39 00:02:02,800 --> 00:02:03,360 Speaker 4: people from. 40 00:02:03,240 --> 00:02:07,400 Speaker 3: This country, That again is a very large number. So 41 00:02:07,760 --> 00:02:10,280 Speaker 3: are you saying magnitude in pacing if it is at 42 00:02:10,280 --> 00:02:11,840 Speaker 3: that magnitude, yes, of. 43 00:02:11,800 --> 00:02:14,000 Speaker 4: Course, is it realistic for us to think about it 44 00:02:14,040 --> 00:02:16,440 Speaker 4: at that magnitude just because of logistical reasons. 45 00:02:16,880 --> 00:02:21,240 Speaker 3: That's essentially where my position today stands. Obviously, if you're 46 00:02:21,280 --> 00:02:24,360 Speaker 3: going to engage the military and have other tactics that 47 00:02:24,400 --> 00:02:26,400 Speaker 3: could change the perception, and I think a lot of 48 00:02:26,520 --> 00:02:28,800 Speaker 3: us here are involved in the waiting game. But if 49 00:02:28,840 --> 00:02:31,600 Speaker 3: you're looking at the five hundred thousand folks who are 50 00:02:31,680 --> 00:02:35,720 Speaker 3: in the criminal justice system already that would be easily deported, 51 00:02:36,080 --> 00:02:38,800 Speaker 3: that's about net two hundred thousand more than the annual 52 00:02:38,800 --> 00:02:41,040 Speaker 3: three hundred thousand that are deported. So that has a 53 00:02:41,120 --> 00:02:44,040 Speaker 3: very different impact. Now, if you're going for that eleven million, 54 00:02:44,560 --> 00:02:47,840 Speaker 3: I find that, you know, it's be a quite you know, 55 00:02:47,880 --> 00:02:52,400 Speaker 3: a large number that would be difficult to quantify in 56 00:02:52,440 --> 00:02:55,680 Speaker 3: a very swift period of time. You could get a 57 00:02:55,720 --> 00:02:58,679 Speaker 3: significant shock. Obviously, the industries that are going to be 58 00:02:58,720 --> 00:03:00,640 Speaker 3: impacted the most. So if you get above that five 59 00:03:00,760 --> 00:03:03,440 Speaker 3: hundred thousand number and you're starting to deport folks who 60 00:03:03,440 --> 00:03:05,880 Speaker 3: are not in the criminal justice system and are already 61 00:03:05,960 --> 00:03:09,360 Speaker 3: not participating in the economy and in labor, it's going 62 00:03:09,400 --> 00:03:13,120 Speaker 3: to be agriculture, services, industry, etc. So we have to 63 00:03:13,400 --> 00:03:17,520 Speaker 3: focus on those areas, especially as investors, as the policies 64 00:03:17,560 --> 00:03:18,840 Speaker 3: actually roll out, all right. 65 00:03:18,880 --> 00:03:21,200 Speaker 5: We also want to bring into the conversation Jennifer Lawless. 66 00:03:21,200 --> 00:03:23,440 Speaker 5: She is Professor of Politics and Public Policy at the 67 00:03:23,520 --> 00:03:26,720 Speaker 5: University of Virginia, Professor at Lawas you've been listening to 68 00:03:26,760 --> 00:03:30,440 Speaker 5: our conversation, are you getting a better feeling of the 69 00:03:30,480 --> 00:03:36,080 Speaker 5: prioritization of policy within the Trump administration by the president 70 00:03:36,200 --> 00:03:38,320 Speaker 5: of the things that we need to kind of keep 71 00:03:38,560 --> 00:03:40,520 Speaker 5: a watch on that you think he initially is going 72 00:03:40,560 --> 00:03:42,320 Speaker 5: to tackle. Is it clear to you yet? 73 00:03:43,640 --> 00:03:46,600 Speaker 6: It seems like this speech today, both the formal speech 74 00:03:46,640 --> 00:03:49,000 Speaker 6: and the informal one, and everything that we've heard since 75 00:03:49,000 --> 00:03:52,920 Speaker 6: the election, is consistent with the campaign trial priorities. So 76 00:03:53,040 --> 00:03:55,760 Speaker 6: immigration will be one of the first things that are tackled, 77 00:03:56,240 --> 00:03:59,040 Speaker 6: Tariffs and how that's going to affect the economy will 78 00:03:59,040 --> 00:04:01,600 Speaker 6: be the second, and on the back burner will be 79 00:04:01,680 --> 00:04:05,400 Speaker 6: things like abortion, where he's ready to act should Congress 80 00:04:05,440 --> 00:04:08,040 Speaker 6: manage to pass that kind of ban. We also saw 81 00:04:08,240 --> 00:04:11,360 Speaker 6: during the speech today that there are symbolic things that 82 00:04:11,400 --> 00:04:14,320 Speaker 6: he's going to be doing to speak to his base 83 00:04:14,440 --> 00:04:16,880 Speaker 6: and to try and demonstrate that he's going to filfil 84 00:04:16,960 --> 00:04:20,640 Speaker 6: campaign promises. So it's very unheard of in an inauguration address, 85 00:04:20,680 --> 00:04:24,360 Speaker 6: for example, to state that gender is binary, and so 86 00:04:24,480 --> 00:04:26,160 Speaker 6: things like that are going to be the kinds of 87 00:04:26,200 --> 00:04:27,640 Speaker 6: things we're going to hear over the course of the 88 00:04:27,640 --> 00:04:28,240 Speaker 6: next few weeks. 89 00:04:28,279 --> 00:04:29,280 Speaker 7: I would assume. 90 00:04:29,040 --> 00:04:32,080 Speaker 2: Jennifer help us out here navigating all of that, because 91 00:04:32,120 --> 00:04:33,839 Speaker 2: I think that's going to be the thorniest part of 92 00:04:33,839 --> 00:04:35,800 Speaker 2: this and the challenge at least in these coming days, 93 00:04:36,839 --> 00:04:40,119 Speaker 2: how you decide what is symbolic and what has teeth, 94 00:04:40,360 --> 00:04:42,440 Speaker 2: what's going to be something that you would be tantamount 95 00:04:42,480 --> 00:04:44,440 Speaker 2: to to a major policy change. How are you going 96 00:04:44,480 --> 00:04:46,920 Speaker 2: to navigate that as we kind of look at the 97 00:04:46,960 --> 00:04:51,200 Speaker 2: rhetoric at these executive orders, at maybe more formal speeches 98 00:04:51,200 --> 00:04:53,760 Speaker 2: and addresses from the president, how do you process all 99 00:04:53,800 --> 00:04:54,080 Speaker 2: of that. 100 00:04:55,680 --> 00:04:59,200 Speaker 6: Well, it's symbolic if Congress ultimately has to act in 101 00:04:59,279 --> 00:05:02,839 Speaker 6: order to change policy and hasn't done that yet, And 102 00:05:02,920 --> 00:05:05,440 Speaker 6: so Donald Trump can say, for example, that we're going 103 00:05:05,480 --> 00:05:08,520 Speaker 6: to become a country again where there are only two genders, 104 00:05:08,800 --> 00:05:11,120 Speaker 6: but it's hard to know what that actually means except 105 00:05:11,160 --> 00:05:14,400 Speaker 6: alienating and isolating large portions of the population. We do 106 00:05:14,480 --> 00:05:16,799 Speaker 6: know that it means that, and there are real ramifications, 107 00:05:17,120 --> 00:05:20,239 Speaker 6: but in terms of policy at this point, his rhetoric 108 00:05:20,360 --> 00:05:23,479 Speaker 6: doesn't change the way that states conduct the business they've 109 00:05:23,480 --> 00:05:26,920 Speaker 6: been conducting when it comes to immigration, where the federal 110 00:05:26,960 --> 00:05:29,960 Speaker 6: government does play a clear and active role, and Donald 111 00:05:29,960 --> 00:05:33,479 Speaker 6: Trump or any president through executive order can shape policy 112 00:05:33,720 --> 00:05:35,520 Speaker 6: that's certainly going to be more than symbolic. 113 00:05:35,640 --> 00:05:37,200 Speaker 5: Can I just say, I'm thinking about all of the 114 00:05:37,360 --> 00:05:40,680 Speaker 5: HR teams in you know, global corporations or Corporate America 115 00:05:40,720 --> 00:05:42,480 Speaker 5: who are like saying, okay, and how do we address 116 00:05:42,520 --> 00:05:45,800 Speaker 5: this with our employee base in terms of you know, 117 00:05:45,920 --> 00:05:48,120 Speaker 5: just two genders and you know, I'm assuming they're going 118 00:05:48,160 --> 00:05:49,960 Speaker 5: to have to be addressing this. It's just something that 119 00:05:50,000 --> 00:05:50,560 Speaker 5: I'm curious. 120 00:05:50,720 --> 00:05:51,039 Speaker 8: I don't know. 121 00:05:51,160 --> 00:05:52,120 Speaker 7: We'll see how. 122 00:05:51,960 --> 00:05:53,960 Speaker 5: This will play out over the next over this week. 123 00:05:54,279 --> 00:05:57,320 Speaker 4: I don't know if that it matters for companies. This 124 00:05:57,440 --> 00:05:59,320 Speaker 4: might be something. My understanding is this is like the 125 00:05:59,360 --> 00:06:03,680 Speaker 4: federal government and it's passports. It you know, a company 126 00:06:03,720 --> 00:06:05,840 Speaker 4: can do whatever. I think a company can do whatever 127 00:06:05,920 --> 00:06:06,320 Speaker 4: it wants. 128 00:06:06,360 --> 00:06:06,719 Speaker 9: I don't know. 129 00:06:06,880 --> 00:06:08,599 Speaker 5: I guess so, I guess so, I don't know. Like 130 00:06:08,920 --> 00:06:11,559 Speaker 5: I'm curious, you know, Monica, like for your company, Morgan 131 00:06:11,640 --> 00:06:14,039 Speaker 5: Stanley and some of these issues that are coming down, 132 00:06:14,120 --> 00:06:16,839 Speaker 5: I don't mean to put you in the hot seat, 133 00:06:17,040 --> 00:06:19,919 Speaker 5: but I do think about these issues will have to 134 00:06:19,960 --> 00:06:22,320 Speaker 5: be addressed by companies. 135 00:06:22,200 --> 00:06:24,480 Speaker 3: And you know, it is something that Morgan Stanley has 136 00:06:24,480 --> 00:06:26,679 Speaker 3: to deal with on a daily basis. I can't speak 137 00:06:26,720 --> 00:06:28,600 Speaker 3: on behalf of them. I'm not on our legal team. 138 00:06:28,600 --> 00:06:30,080 Speaker 3: That's not an area, right that I. 139 00:06:30,120 --> 00:06:32,240 Speaker 5: Focus on policies in general, right. 140 00:06:32,080 --> 00:06:34,240 Speaker 3: Policies in general, right, I keep an eye on all 141 00:06:34,240 --> 00:06:36,360 Speaker 3: of that. I sometimes have conversations about what we think 142 00:06:36,440 --> 00:06:40,360 Speaker 3: the administration might do. That said, when I'm thinking about messaging, 143 00:06:40,400 --> 00:06:44,080 Speaker 3: I think another sort of pivoting away from the di discussion. 144 00:06:44,279 --> 00:06:47,040 Speaker 3: I want to focus on Tariff's brow just to move 145 00:06:47,120 --> 00:06:55,480 Speaker 3: move the conversation. Definitely done now happy, No with tariffs. 146 00:06:55,720 --> 00:06:58,159 Speaker 3: I think it's important to note that we got a 147 00:06:58,200 --> 00:07:00,200 Speaker 3: lot of really big messaging. And that's why I like 148 00:07:00,240 --> 00:07:02,880 Speaker 3: with the immigration comment, right with the eleven million number, 149 00:07:02,960 --> 00:07:05,599 Speaker 3: I really want to highlight that. With tariff, say came in, 150 00:07:05,720 --> 00:07:07,440 Speaker 3: they were saying they were going to do all of 151 00:07:07,480 --> 00:07:10,160 Speaker 3: this significant action on day one. Now now they're going 152 00:07:10,200 --> 00:07:12,200 Speaker 3: to do a study. So that's why we have to 153 00:07:12,600 --> 00:07:14,960 Speaker 3: see things as they come out, right, you have to 154 00:07:15,000 --> 00:07:17,040 Speaker 3: see the action's actions speak louder than words. 155 00:07:17,080 --> 00:07:18,520 Speaker 5: But when your kid comes to you, I want this toy. 156 00:07:18,560 --> 00:07:20,160 Speaker 5: I want this toy. Right, let me think about it, 157 00:07:20,200 --> 00:07:21,160 Speaker 5: and so we're going to study it. 158 00:07:21,400 --> 00:07:24,440 Speaker 3: So that's important right when we're when we're trying to 159 00:07:24,480 --> 00:07:27,360 Speaker 3: suss through what this means for markets and the economy. Now, 160 00:07:27,360 --> 00:07:29,480 Speaker 3: one of the things that we're really focused on and 161 00:07:29,520 --> 00:07:32,280 Speaker 3: trying to hedge for is, you know, is all that 162 00:07:32,400 --> 00:07:36,200 Speaker 3: enthusiasm around Trump priced in? Is this an opportunity right 163 00:07:36,240 --> 00:07:38,800 Speaker 3: for Trump to disappoint if he doesn't go big on 164 00:07:38,800 --> 00:07:42,239 Speaker 3: on I would say corporate tax cuts, for example, that's 165 00:07:42,560 --> 00:07:46,360 Speaker 3: a really era I would say important area where investors 166 00:07:46,360 --> 00:07:49,040 Speaker 3: are focusing on. They're expecting a cut as deep as 167 00:07:49,040 --> 00:07:53,240 Speaker 3: fifteen percent, But when you're thinking about the broader fiscal system, 168 00:07:53,640 --> 00:07:56,320 Speaker 3: it's important to take into account what they can and 169 00:07:56,360 --> 00:07:59,280 Speaker 3: cannot achieve and if they're trying to offset debt and deficits, 170 00:07:59,280 --> 00:08:01,880 Speaker 3: if they're trying to find and cost savings, cutting a 171 00:08:01,920 --> 00:08:04,440 Speaker 3: corporate tax may not be the first thing on the agenda. 172 00:08:04,560 --> 00:08:06,760 Speaker 4: So if that is not delivered on, do we see 173 00:08:06,800 --> 00:08:11,640 Speaker 4: equity markets and the stock of companies react in a way. 174 00:08:11,400 --> 00:08:13,040 Speaker 9: That is negative? 175 00:08:13,280 --> 00:08:17,200 Speaker 3: Yeah, I say you would see multiples right, have a correction. 176 00:08:17,760 --> 00:08:20,320 Speaker 3: I can't speak to you know how long that would last. 177 00:08:20,440 --> 00:08:22,240 Speaker 3: I don't know what the messaging around. 178 00:08:22,200 --> 00:08:23,480 Speaker 9: In your view is, it is what's. 179 00:08:23,320 --> 00:08:27,600 Speaker 3: Pricing is the fifteen percent. Is the enthusiasm right around 180 00:08:27,600 --> 00:08:31,920 Speaker 3: this pro growth, incredibly pro growth messaging. And so when 181 00:08:31,920 --> 00:08:35,320 Speaker 3: I'm thinking through where are the risks and opportunity sets, 182 00:08:35,640 --> 00:08:37,880 Speaker 3: one of the risks that I'm focused on is the 183 00:08:37,880 --> 00:08:38,839 Speaker 3: corporate tax cut. 184 00:08:39,400 --> 00:08:41,040 Speaker 2: Jennifer Lawless, I want to bring you back in here. 185 00:08:41,040 --> 00:08:42,880 Speaker 2: We were talking a little while ago just about how 186 00:08:42,880 --> 00:08:46,560 Speaker 2: this presence sees himself in the context of history, and 187 00:08:46,600 --> 00:08:48,480 Speaker 2: I'm curious what stood out to you about the remarks 188 00:08:48,480 --> 00:08:50,280 Speaker 2: he made. And I think that that second speech he 189 00:08:50,320 --> 00:08:52,920 Speaker 2: gave with so illuminating in that regard that there's still 190 00:08:52,920 --> 00:08:55,319 Speaker 2: a lot of things that he's clearly ticked off about 191 00:08:55,320 --> 00:08:58,760 Speaker 2: that happened last time around. You know, when we talk 192 00:08:58,800 --> 00:09:02,120 Speaker 2: about of his desires on Greenland and Panama and the like, 193 00:09:02,160 --> 00:09:05,000 Speaker 2: that there's a sense to kind of put a stamp 194 00:09:05,040 --> 00:09:10,040 Speaker 2: on this presidency in a very big and novel expansionary way. 195 00:09:10,679 --> 00:09:12,080 Speaker 2: Talk about that if you would just sort of what 196 00:09:12,160 --> 00:09:15,000 Speaker 2: you observed about the sort of way he sees himself 197 00:09:15,040 --> 00:09:17,240 Speaker 2: in the larger context of American history visa VI that 198 00:09:17,280 --> 00:09:19,240 Speaker 2: that speech that he gave this afternoon. 199 00:09:20,440 --> 00:09:23,360 Speaker 6: It seems to me that Donald Trump does not differentiate 200 00:09:23,640 --> 00:09:27,959 Speaker 6: between being president and the institution of the presidency. Typically, 201 00:09:28,040 --> 00:09:31,079 Speaker 6: what happens is that presidents feel like they're moving into 202 00:09:31,120 --> 00:09:34,240 Speaker 6: a role. They talk about the importance of democracy and 203 00:09:34,280 --> 00:09:36,840 Speaker 6: a smooth transition of power. They talk about the august 204 00:09:37,040 --> 00:09:40,360 Speaker 6: nature of the institution that they'll be occupying, and they 205 00:09:40,400 --> 00:09:44,720 Speaker 6: talk about the importance of bringing the country together and moving. 206 00:09:44,440 --> 00:09:45,920 Speaker 7: Forward to achieve greatness. 207 00:09:46,120 --> 00:09:48,640 Speaker 6: Donald Trump did not do that in twenty seventeen, and 208 00:09:48,720 --> 00:09:51,520 Speaker 6: he did not do that today. In fact, today's speech 209 00:09:51,559 --> 00:09:53,520 Speaker 6: in a lot of ways was even more negative and 210 00:09:53,559 --> 00:09:56,839 Speaker 6: even darker than his first inaugural because it was also 211 00:09:56,920 --> 00:10:00,840 Speaker 6: filled with attitude, an attitude that highlights the importance to 212 00:10:00,880 --> 00:10:03,959 Speaker 6: Donald Trump of retribution and of doing all the things 213 00:10:04,000 --> 00:10:05,319 Speaker 6: that people said that he couldn't do. 214 00:10:05,840 --> 00:10:06,920 Speaker 7: And I think that. 215 00:10:07,880 --> 00:10:12,240 Speaker 6: Nationally and globally, he sent a very clear signal that 216 00:10:12,679 --> 00:10:15,920 Speaker 6: he is basically going to go out there and give 217 00:10:15,920 --> 00:10:18,080 Speaker 6: it a shot to do whatever he wants, whether that's 218 00:10:18,160 --> 00:10:22,240 Speaker 6: renaming the Gulf of Mexico, whether it's taking back Panama Canal, 219 00:10:22,440 --> 00:10:26,640 Speaker 6: whether it's taking greenland, or whether it's just changing national 220 00:10:26,920 --> 00:10:30,280 Speaker 6: policies that the American people have become accustomed to, or 221 00:10:30,320 --> 00:10:35,680 Speaker 6: renaming mountains. And I think he's making this more about 222 00:10:35,760 --> 00:10:39,280 Speaker 6: himself than about moving forward. There was no attempt whatsoever 223 00:10:39,559 --> 00:10:41,680 Speaker 6: to try and unify the country, or even to pay 224 00:10:41,720 --> 00:10:43,720 Speaker 6: lip service to the idea that he would be a 225 00:10:43,720 --> 00:10:46,800 Speaker 6: president for all Americans. I don't think Democrats are surprised 226 00:10:46,800 --> 00:10:49,959 Speaker 6: by this, But this was his first opportunity to veer 227 00:10:49,960 --> 00:10:52,360 Speaker 6: away from the campaign messaging, and he opted not. 228 00:10:52,360 --> 00:10:53,000 Speaker 9: To do it. 229 00:10:53,040 --> 00:10:56,200 Speaker 4: Professor, does he need to do that? He's won, He's 230 00:10:56,240 --> 00:10:59,599 Speaker 4: not running again. Can't run again. Maybe he would like 231 00:10:59,640 --> 00:11:02,400 Speaker 4: to run it again, he can't run again. Does he 232 00:11:02,480 --> 00:11:04,319 Speaker 4: need to appeal to all Americans? 233 00:11:05,559 --> 00:11:08,640 Speaker 6: He doesn't need to appeal two years. 234 00:11:08,400 --> 00:11:10,000 Speaker 7: He doesn't need to appeal to them. 235 00:11:10,000 --> 00:11:13,200 Speaker 6: The question is does he want to actually move the 236 00:11:13,240 --> 00:11:16,440 Speaker 6: country in a direction that most Americans and I don't 237 00:11:16,440 --> 00:11:19,679 Speaker 6: mean just a tiny margin, you know, want him to 238 00:11:19,720 --> 00:11:22,560 Speaker 6: move the country in. And typically in their second terms, 239 00:11:22,880 --> 00:11:27,000 Speaker 6: presidents do have some flexibility to do that because they're 240 00:11:27,000 --> 00:11:30,080 Speaker 6: not seeking reelection, and the new nominee won't be seeking 241 00:11:30,120 --> 00:11:33,160 Speaker 6: election for two years. Donald Trump has definitely made this 242 00:11:33,200 --> 00:11:35,800 Speaker 6: more about retribution than unification. 243 00:11:36,080 --> 00:11:37,800 Speaker 5: You know, I think you bring up a good point, Monica, 244 00:11:37,840 --> 00:11:40,960 Speaker 5: come on back in, because I do think about you know, 245 00:11:41,040 --> 00:11:42,679 Speaker 5: I want to say the two Americas, but I think 246 00:11:42,679 --> 00:11:44,800 Speaker 5: there's more than just two. And we know that there 247 00:11:44,800 --> 00:11:46,360 Speaker 5: are folks who are in the market that we know 248 00:11:46,360 --> 00:11:48,199 Speaker 5: there are folks that are wealthy that have done very 249 00:11:48,280 --> 00:11:49,880 Speaker 5: very well over the last couple of years. There are 250 00:11:49,880 --> 00:11:52,040 Speaker 5: a lot of Americans that have not. And so how 251 00:11:52,040 --> 00:11:54,720 Speaker 5: do we really find you know, what do we need 252 00:11:54,760 --> 00:11:57,640 Speaker 5: in terms of a president that can really appeal to 253 00:11:57,720 --> 00:12:00,200 Speaker 5: the broader population that benefits more. 254 00:12:00,679 --> 00:12:03,240 Speaker 3: I think that Trump did that in this election cycle. 255 00:12:03,320 --> 00:12:04,480 Speaker 3: I think that it speaks for. 256 00:12:04,440 --> 00:12:07,360 Speaker 5: Itself appealed, but does he actually follow through with policy 257 00:12:07,400 --> 00:12:08,599 Speaker 5: that helps more Americans. 258 00:12:08,640 --> 00:12:11,640 Speaker 3: Well, that's the important thing about Congress, and people seem 259 00:12:11,679 --> 00:12:13,559 Speaker 3: to forget about the role of Congress. He can do 260 00:12:13,640 --> 00:12:16,280 Speaker 3: a lot with executive orders, one hundred percent, He's going 261 00:12:16,320 --> 00:12:18,720 Speaker 3: to go big on day one. But when we think 262 00:12:18,760 --> 00:12:22,079 Speaker 3: about what can Congress do, especially around the tax piece 263 00:12:22,559 --> 00:12:24,520 Speaker 3: that's really important. We do think that there's going to 264 00:12:24,520 --> 00:12:27,720 Speaker 3: be a full extension of the individual tax components, which 265 00:12:27,760 --> 00:12:31,160 Speaker 3: could be supportive of you know, multiple layers of wealth, 266 00:12:31,679 --> 00:12:33,960 Speaker 3: but you know you're also going to see a continuation 267 00:12:34,040 --> 00:12:38,400 Speaker 3: of support for things like the higher earners when you're 268 00:12:38,440 --> 00:12:42,160 Speaker 3: thinking about no changes to capital gains tax I think 269 00:12:42,240 --> 00:12:45,600 Speaker 3: is a really good example where the most wealthy will 270 00:12:45,640 --> 00:12:47,679 Speaker 3: be able to continue to accruve that wealth. They don't 271 00:12:47,720 --> 00:12:50,400 Speaker 3: think that's a secret. That's something that you know, we 272 00:12:50,440 --> 00:12:54,200 Speaker 3: are focused on and we do consider. But when we're 273 00:12:54,240 --> 00:12:58,120 Speaker 3: looking through the broader agenda and sort of what's top 274 00:12:58,160 --> 00:13:00,520 Speaker 3: of mind for folks, we want to see, you know, 275 00:13:00,720 --> 00:13:05,160 Speaker 3: where can you actually benefit across the board, and one 276 00:13:05,160 --> 00:13:08,880 Speaker 3: of those areas you could surprisingly be in the clean 277 00:13:09,000 --> 00:13:11,600 Speaker 3: energy sector as far as creating new jobs. And I 278 00:13:11,640 --> 00:13:14,720 Speaker 3: really want to emphasize that now the IRA the Inflation 279 00:13:14,800 --> 00:13:18,440 Speaker 3: Reduction Act, about eighty percent of the funding went to 280 00:13:18,640 --> 00:13:21,439 Speaker 3: red states, and in red states where maybe they haven't 281 00:13:21,440 --> 00:13:24,320 Speaker 3: had the same type of economy, the same sort of 282 00:13:24,360 --> 00:13:27,480 Speaker 3: agglomeration that we experience here in New York. Right with 283 00:13:27,520 --> 00:13:31,240 Speaker 3: all these jobs, these are opportunities for those that growth 284 00:13:31,280 --> 00:13:34,320 Speaker 3: sector to continue to employ people in those states. So 285 00:13:34,360 --> 00:13:36,400 Speaker 3: we think, for example, that clean energy might be a 286 00:13:36,440 --> 00:13:40,280 Speaker 3: sleeper agent. You have oil sort of at the when 287 00:13:40,280 --> 00:13:43,600 Speaker 3: you're thinking about messaging oil Drill, baby, drill. All of 288 00:13:43,600 --> 00:13:47,520 Speaker 3: that sounds really exciting because it's going to lower prices 289 00:13:47,559 --> 00:13:50,240 Speaker 3: at the gas pump. Again, that's also would be a 290 00:13:50,320 --> 00:13:53,600 Speaker 3: regressive tax and help lower income folks if they're able 291 00:13:53,640 --> 00:13:56,600 Speaker 3: to lower the price of gas. But what's important about 292 00:13:56,600 --> 00:13:58,600 Speaker 3: that is that if you're lowering the price of gas, 293 00:13:59,040 --> 00:14:02,200 Speaker 3: you're lowering the cost of oil in the markets. Right, 294 00:14:02,840 --> 00:14:04,600 Speaker 3: it will sell off. I think it has sold off 295 00:14:04,600 --> 00:14:09,520 Speaker 3: today if I was correct. And with that, comparatively, we 296 00:14:09,600 --> 00:14:12,360 Speaker 3: think that clean energy could have a nice opportunity to outperform, 297 00:14:12,440 --> 00:14:14,680 Speaker 3: not just on a relative basis, but also because it's 298 00:14:14,760 --> 00:14:17,240 Speaker 3: sensitive to rates, and if we do get some rate 299 00:14:17,280 --> 00:14:20,000 Speaker 3: cuts at the latter half of the year, we could 300 00:14:20,040 --> 00:14:22,560 Speaker 3: see clean energy make a surprise upturn. 301 00:14:22,800 --> 00:14:24,400 Speaker 5: All Right, we're going to leave it on that note. Manica, 302 00:14:24,400 --> 00:14:26,960 Speaker 5: thank you so much. Policy analyst at Morgan Stanley. Jennifer 303 00:14:26,960 --> 00:14:29,280 Speaker 5: Our thanks out to you as well, politics professor at 304 00:14:29,280 --> 00:14:32,680 Speaker 5: the University of Virginia for joining us at our roundtable. 305 00:14:34,160 --> 00:14:37,760 Speaker 10: You're listening to the Bloomberg Business Week podcast. Catch us 306 00:14:37,800 --> 00:14:41,280 Speaker 10: live weekday afternoons from two to five pm Eastern Listen 307 00:14:41,320 --> 00:14:44,520 Speaker 10: on Apple CarPlay and Android Auto with the Bloomberg Business 308 00:14:44,560 --> 00:14:47,600 Speaker 10: app or watch us live on YouTube. 309 00:14:47,880 --> 00:14:50,040 Speaker 5: All right, folks, we're going to continue to monitor the 310 00:14:50,040 --> 00:14:52,680 Speaker 5: comings and goings at the Capital Wan Arena and certainly 311 00:14:52,680 --> 00:14:57,080 Speaker 5: bring you those incidents and activities that are certainly important 312 00:14:57,120 --> 00:15:00,160 Speaker 5: to the Bloomberg audience in the meantime. Henrietta tre is 313 00:15:00,160 --> 00:15:03,760 Speaker 5: important because she certainly passes through some of the business 314 00:15:03,760 --> 00:15:06,840 Speaker 5: development's political developments and what it means for investors in 315 00:15:06,880 --> 00:15:09,720 Speaker 5: the Bloomberg community. She's co founder and director of economic 316 00:15:09,760 --> 00:15:13,800 Speaker 5: policy at the investment advisory and consultancy firm VEDA Partners. 317 00:15:14,160 --> 00:15:17,880 Speaker 5: Joining us on this inauguration day Monday, Henrietta, as we 318 00:15:17,960 --> 00:15:21,760 Speaker 5: continue to watch the festivities at the Capitol One Arena, 319 00:15:22,280 --> 00:15:24,880 Speaker 5: talk to us about this day and for you what 320 00:15:25,000 --> 00:15:28,400 Speaker 5: has been maybe most important as Donald Trump has now 321 00:15:29,320 --> 00:15:30,600 Speaker 5: begun his second term here. 322 00:15:31,480 --> 00:15:32,880 Speaker 7: Yeah, thanks you so much for having me. 323 00:15:33,040 --> 00:15:35,080 Speaker 8: The most exciting part for me is to watch all 324 00:15:35,080 --> 00:15:37,000 Speaker 8: the staff go into the White House, which of course 325 00:15:37,280 --> 00:15:40,000 Speaker 8: occurs behind the scenes, but starting to see the rollout 326 00:15:40,200 --> 00:15:44,240 Speaker 8: of executive orders of the memos that were released earlier 327 00:15:44,280 --> 00:15:47,080 Speaker 8: in the day, and now obviously President Trump, as expected, 328 00:15:47,200 --> 00:15:50,400 Speaker 8: is going to hold very ceremonial signings of a lot 329 00:15:50,400 --> 00:15:53,280 Speaker 8: of these executive orders that Congress is going to take 330 00:15:53,320 --> 00:15:56,480 Speaker 8: a really long time to pass any legislation after this 331 00:15:56,560 --> 00:15:59,080 Speaker 8: Lincoln Riley Bill, and so this is really going to 332 00:15:59,120 --> 00:16:01,440 Speaker 8: be some of the first one two punch stuff that 333 00:16:01,440 --> 00:16:04,160 Speaker 8: Trump can do during his second term in office. 334 00:16:04,640 --> 00:16:06,160 Speaker 2: Henry had to ask you a question. I've asked a 335 00:16:06,160 --> 00:16:07,760 Speaker 2: few other guests, and we're trying to see if anybody 336 00:16:07,800 --> 00:16:09,640 Speaker 2: knows the answer to it. As we watch the Butler 337 00:16:09,680 --> 00:16:12,960 Speaker 2: Fire Department parade in and of course President Trump was 338 00:16:13,200 --> 00:16:16,000 Speaker 2: shot in Butler County and a member of that fire 339 00:16:16,040 --> 00:16:19,440 Speaker 2: brigade was killed during that attack that took place over 340 00:16:19,440 --> 00:16:22,720 Speaker 2: the course of the summer. We're curious about tariffs and 341 00:16:22,760 --> 00:16:25,400 Speaker 2: trade policy timing. I know that's something you're monitoring very 342 00:16:25,440 --> 00:16:27,760 Speaker 2: closely as well. Jamison Greer, the presidents picked to be 343 00:16:27,800 --> 00:16:30,480 Speaker 2: the next US trade representative. We gather there won't be 344 00:16:30,480 --> 00:16:33,640 Speaker 2: an announcement about trade policy today. What's your sense of 345 00:16:33,680 --> 00:16:36,360 Speaker 2: how that's coming together. Sequencing is a word we've heard 346 00:16:36,360 --> 00:16:38,240 Speaker 2: a lot over the course of our broadcast today. What's 347 00:16:38,240 --> 00:16:39,880 Speaker 2: your sense of the sequencing and we might get some 348 00:16:39,920 --> 00:16:41,920 Speaker 2: more detail on that trade policy. 349 00:16:42,880 --> 00:16:45,680 Speaker 8: Yeah, interesting question, and some of it sort of answered 350 00:16:45,800 --> 00:16:48,720 Speaker 8: or at least implied by the profits circumstances of today. 351 00:16:49,080 --> 00:16:50,640 Speaker 7: Some of the least. 352 00:16:51,160 --> 00:16:56,280 Speaker 8: Well received commentary from President Trump during the earlier ceremonies 353 00:16:56,320 --> 00:17:00,160 Speaker 8: from Republicans in the Senate came around his announcements he 354 00:17:00,280 --> 00:17:02,640 Speaker 8: was about to impose tariffs. And the first thing that 355 00:17:02,680 --> 00:17:05,200 Speaker 8: really comes to my mind is that USCR Jamison Greer 356 00:17:05,280 --> 00:17:07,440 Speaker 8: has not been confirmed yet and the Senators get to 357 00:17:07,520 --> 00:17:09,960 Speaker 8: vote on that. So I think from a sequencing perspective, 358 00:17:10,000 --> 00:17:13,760 Speaker 8: it makes sense to hold his hearings and have his 359 00:17:13,840 --> 00:17:17,160 Speaker 8: vote in the United States Senate before he implements additional tariffs, 360 00:17:17,160 --> 00:17:18,960 Speaker 8: either under Phase one of. 361 00:17:18,840 --> 00:17:23,120 Speaker 7: The US China trade war or even against Canada with DAIPA. 362 00:17:23,240 --> 00:17:26,160 Speaker 8: Whatever happens on tariffs is going to land on Howard 363 00:17:26,240 --> 00:17:30,520 Speaker 8: Lutnick and Commerce and Jamison Greer at USTR, Scott Bessett 364 00:17:30,560 --> 00:17:34,280 Speaker 8: to an extent at Treasury, and those are Senate confirmed roles. 365 00:17:34,320 --> 00:17:36,080 Speaker 8: So some of those are going to start tonight with 366 00:17:36,160 --> 00:17:39,639 Speaker 8: Marco Rubio, we understand, and then throughout the rest of 367 00:17:39,680 --> 00:17:42,240 Speaker 8: his week. So I would expect some initial trade action 368 00:17:42,400 --> 00:17:46,440 Speaker 8: right after those folks get confirmed. Otherwise, those Republican senators 369 00:17:46,520 --> 00:17:48,560 Speaker 8: from farm states who are going to be hit the 370 00:17:48,600 --> 00:17:52,320 Speaker 8: hardest in any retaliatory measures are going to have problems 371 00:17:52,359 --> 00:17:54,000 Speaker 8: and maybe hold up some of his nominees. 372 00:17:54,000 --> 00:17:56,040 Speaker 7: So I think it makes sense to expect this to. 373 00:17:56,080 --> 00:17:58,600 Speaker 8: Date a couple of days before you see a major action, 374 00:17:58,680 --> 00:18:02,120 Speaker 8: aside from just you know, signing some executive orders to 375 00:18:02,160 --> 00:18:03,640 Speaker 8: study the issue of tariffs. 376 00:18:03,680 --> 00:18:05,920 Speaker 4: How do you read into the report that Bloomberg News 377 00:18:05,920 --> 00:18:09,160 Speaker 4: in the Wall Street Journal had earlier today about the 378 00:18:09,200 --> 00:18:12,560 Speaker 4: President not going through with tariffs on day one going 379 00:18:12,560 --> 00:18:16,160 Speaker 4: through with tariffs immediately. Is that instead forming this sort 380 00:18:16,200 --> 00:18:19,320 Speaker 4: of study, doing this sort of study of trade policy 381 00:18:19,320 --> 00:18:21,920 Speaker 4: in order to come up with something that may be 382 00:18:22,040 --> 00:18:24,359 Speaker 4: different than what he talked about on the campaign trail, 383 00:18:25,119 --> 00:18:28,520 Speaker 4: Is that a win for people in the administration such 384 00:18:28,560 --> 00:18:31,800 Speaker 4: as Scott Bessant or more traditional Wall Street folks. 385 00:18:32,240 --> 00:18:33,119 Speaker 9: How are you viewing that? 386 00:18:34,160 --> 00:18:37,119 Speaker 8: Yeah, I would separate Scott Besson from traditional Wall Street folks. 387 00:18:37,440 --> 00:18:41,360 Speaker 8: Scott Besson, of course supports a gradual escalation of tariff's. 388 00:18:41,520 --> 00:18:44,640 Speaker 8: I've heard him say directly five percent increases per month, 389 00:18:44,720 --> 00:18:46,640 Speaker 8: So I wouldn't expect him to be the voice of 390 00:18:46,640 --> 00:18:48,040 Speaker 8: opposing tarifs whole sale. 391 00:18:48,320 --> 00:18:49,520 Speaker 7: That's not in his agenda. 392 00:18:50,400 --> 00:18:54,680 Speaker 8: My expectation is that We have a lot of very 393 00:18:54,720 --> 00:18:58,040 Speaker 8: serious campaign promises that Trump promised to deliver on the 394 00:18:58,119 --> 00:19:01,000 Speaker 8: trail on day one, and most of the pertain to immigration, 395 00:19:01,359 --> 00:19:05,480 Speaker 8: which we're seeing, transgender rights, energy policies. So I think 396 00:19:05,520 --> 00:19:08,120 Speaker 8: there's going to be you know, one hundred different executive orders. 397 00:19:08,119 --> 00:19:09,480 Speaker 7: There's a lot there to chew on. 398 00:19:09,920 --> 00:19:12,480 Speaker 8: When it comes to the tariffs, one of the things 399 00:19:12,480 --> 00:19:15,280 Speaker 8: that I've really wondered about is whether Jamison Greer at 400 00:19:15,359 --> 00:19:18,720 Speaker 8: USTR would adhere to the enforcement mechanism of the Phase 401 00:19:18,720 --> 00:19:21,920 Speaker 8: one trade agreement, which if he does, by my mouth 402 00:19:22,080 --> 00:19:25,159 Speaker 8: map and calculations, if he suggested that he's going to 403 00:19:25,160 --> 00:19:27,560 Speaker 8: pull out of Phase one today, that doesn't necessarily lead 404 00:19:27,600 --> 00:19:28,439 Speaker 8: to tariffs today. 405 00:19:28,760 --> 00:19:30,720 Speaker 7: It leads to tariffs. 406 00:19:30,119 --> 00:19:34,040 Speaker 8: In May June period after you have a series of 407 00:19:34,440 --> 00:19:38,919 Speaker 8: pre set negotiating times and interactions with the Vice Premier 408 00:19:39,000 --> 00:19:42,880 Speaker 8: in China, with other trade officials, the deputy secretaries at USTR. 409 00:19:43,000 --> 00:19:44,720 Speaker 8: So a lot of that is going to depend on 410 00:19:44,880 --> 00:19:48,359 Speaker 8: depend on the specific enforcement mechanism in the trade Phase 411 00:19:48,359 --> 00:19:52,080 Speaker 8: one deal with China where Canada and Mexico are concerned. 412 00:19:52,240 --> 00:19:55,320 Speaker 8: What we've seen in the past is announcements of AIPA tariffs, 413 00:19:55,720 --> 00:19:58,320 Speaker 8: but then a ten day lag period, and then just 414 00:19:58,400 --> 00:20:02,240 Speaker 8: before the lag period in Canada or Mexico have announced 415 00:20:02,240 --> 00:20:05,320 Speaker 8: their retaliation, the tyroffs get pulled off. We saw that 416 00:20:05,400 --> 00:20:08,400 Speaker 8: both with AIPA and with Section two thirty two with Canadis. 417 00:20:08,480 --> 00:20:10,879 Speaker 8: So I think everything is very much on the same trajectory. 418 00:20:10,920 --> 00:20:13,960 Speaker 8: I would caution against being optimistic. You know, five hours 419 00:20:14,000 --> 00:20:16,479 Speaker 8: into Trump's term that we're not going to see tariffs. 420 00:20:16,520 --> 00:20:19,000 Speaker 7: That doesn't really stand a reason to me. 421 00:20:19,200 --> 00:20:21,080 Speaker 5: No, that's fair, that's fair. I will point on our 422 00:20:21,119 --> 00:20:25,159 Speaker 5: live blog Brad Bechtel, head of FX over Jeffries sharing 423 00:20:25,200 --> 00:20:27,560 Speaker 5: his views with our team and saying, well, there's some 424 00:20:27,600 --> 00:20:30,240 Speaker 5: relief in the markets. Again, markets are closed, but we 425 00:20:30,280 --> 00:20:32,879 Speaker 5: are watching futures trade and we did see them move 426 00:20:32,920 --> 00:20:35,000 Speaker 5: a little bit higher, maybe on some relief that maybe 427 00:20:35,040 --> 00:20:38,520 Speaker 5: the tariffs weren't forthcoming, at least not today, and we 428 00:20:38,520 --> 00:20:41,080 Speaker 5: did see the dollar slide. Many still feel tariffs will 429 00:20:41,080 --> 00:20:44,600 Speaker 5: eventually come, so Monday's dollar decline may only be temporary. 430 00:20:45,040 --> 00:20:47,800 Speaker 5: He weighing in on this, Henrietta, how do you your 431 00:20:47,840 --> 00:20:50,160 Speaker 5: clients if they reach out to you and say, okay, 432 00:20:50,200 --> 00:20:53,200 Speaker 5: but what are we supposed to take seriously? When Donald 433 00:20:53,280 --> 00:20:57,199 Speaker 5: Trump Trump talks about President Trump talks about Greenland, or 434 00:20:57,440 --> 00:21:00,439 Speaker 5: Gulf of Mexico becoming Gulf of America, talks about taking 435 00:21:00,440 --> 00:21:04,000 Speaker 5: back the Panama Canal. You know, what is the realistic 436 00:21:04,000 --> 00:21:06,800 Speaker 5: conversation that you have with clients around this. 437 00:21:08,160 --> 00:21:10,640 Speaker 11: Well, when it comes to Greenland, I think a lot 438 00:21:10,640 --> 00:21:14,520 Speaker 11: of the conversation when we talk about it revolves around 439 00:21:14,800 --> 00:21:16,719 Speaker 11: some of the other components that we see from nations 440 00:21:16,760 --> 00:21:18,320 Speaker 11: like Canada and Russia and China. 441 00:21:18,359 --> 00:21:20,399 Speaker 8: Where are we getting minerals from? What is the purpose 442 00:21:20,440 --> 00:21:24,280 Speaker 8: of this Greenland conversation? There's an expectation or view on 443 00:21:24,320 --> 00:21:27,320 Speaker 8: the street that this is more just for show. I'm 444 00:21:27,359 --> 00:21:30,439 Speaker 8: not sure exactly what market moving event would come from 445 00:21:30,480 --> 00:21:34,520 Speaker 8: designating the big the Gulf of Mexico and the Gulf 446 00:21:34,560 --> 00:21:35,040 Speaker 8: of America. 447 00:21:35,080 --> 00:21:35,800 Speaker 7: You know, I'm not sure that. 448 00:21:35,760 --> 00:21:39,320 Speaker 8: You necessarily invest that way, So I don't. 449 00:21:39,119 --> 00:21:41,040 Speaker 7: Spend a lot of time talking about it with clients. 450 00:21:41,320 --> 00:21:43,400 Speaker 7: But we do have some really poor. 451 00:21:43,160 --> 00:21:46,200 Speaker 8: Focus points on things like do you close the Fama Canal? 452 00:21:46,240 --> 00:21:48,720 Speaker 8: Are we really putting tires on Mexico to close the 453 00:21:48,720 --> 00:21:51,639 Speaker 8: immigration border? Things along those lines we focus on for sure. 454 00:21:51,840 --> 00:21:54,080 Speaker 2: Let me ask you lastly about taxes, and it's something 455 00:21:54,080 --> 00:21:56,320 Speaker 2: that we heard from Scott Besson when he was at 456 00:21:56,320 --> 00:21:59,040 Speaker 2: his confirmation hearing. He's saying this was the biggest priority 457 00:21:59,040 --> 00:22:02,000 Speaker 2: for him and for this administration. When don't we see 458 00:22:02,000 --> 00:22:05,600 Speaker 2: the conversation about that among lawmakers begin in earnest on 459 00:22:05,680 --> 00:22:07,280 Speaker 2: extending those Trump era tax. 460 00:22:07,119 --> 00:22:11,520 Speaker 7: Cuts, that is very much well underway. 461 00:22:11,720 --> 00:22:15,439 Speaker 8: You have seen now a number of different sort of 462 00:22:15,440 --> 00:22:20,040 Speaker 8: like working papers from small committee groups and then also 463 00:22:20,720 --> 00:22:22,440 Speaker 8: the broader budget. 464 00:22:22,080 --> 00:22:23,280 Speaker 7: And Ways and Means committees. 465 00:22:23,320 --> 00:22:26,040 Speaker 8: So that conversation is advancing on the House side, because 466 00:22:26,040 --> 00:22:28,240 Speaker 8: of course the House and Senate have two different ideas. 467 00:22:28,320 --> 00:22:30,560 Speaker 8: The Senate wants to move forward with a two track 468 00:22:30,640 --> 00:22:33,800 Speaker 8: reconciliation package that would get Trump a win in the 469 00:22:33,840 --> 00:22:37,320 Speaker 8: first six months of his administration, where the tax bill 470 00:22:37,480 --> 00:22:40,080 Speaker 8: is really more realistically not going to pass until December. 471 00:22:40,640 --> 00:22:42,760 Speaker 7: So I think those conversations are already well under way. 472 00:22:42,800 --> 00:22:44,920 Speaker 8: You can see it with the Salt Caucus going down 473 00:22:44,960 --> 00:22:47,840 Speaker 8: to mar A Lango. That's all about these deficit numbers 474 00:22:47,880 --> 00:22:49,800 Speaker 8: that are going to have to be incurred, how to 475 00:22:49,840 --> 00:22:53,680 Speaker 8: proceed with the budget reconciliation strategy and passing a budget resolution. 476 00:22:54,040 --> 00:22:56,359 Speaker 8: We're very much already seeing that in the works, and 477 00:22:56,440 --> 00:22:59,919 Speaker 8: I think it's really gonna come to a head starting 478 00:23:00,040 --> 00:23:02,680 Speaker 8: probably next week when they have to pick one or 479 00:23:02,720 --> 00:23:05,920 Speaker 8: two reconciliation bills. I'm biased towards the United States Senate 480 00:23:05,920 --> 00:23:08,080 Speaker 8: as a former Senate staffer, so I have eighty percent 481 00:23:08,119 --> 00:23:10,560 Speaker 8: on that we do the two reconciliation bill path. But 482 00:23:10,640 --> 00:23:12,520 Speaker 8: that's really already underway, and I think we're going to 483 00:23:12,600 --> 00:23:14,480 Speaker 8: have to see members move in that direction the next 484 00:23:14,480 --> 00:23:15,080 Speaker 8: couple of days. 485 00:23:15,119 --> 00:23:16,800 Speaker 5: All Right, We're going to leave it on that note, Henrietta, 486 00:23:16,840 --> 00:23:19,320 Speaker 5: thank you so much. Really appreciate you joining us and 487 00:23:19,359 --> 00:23:21,879 Speaker 5: weighing in today. Henrietta Trees, she's co founder and director 488 00:23:21,920 --> 00:23:25,680 Speaker 5: of Economic policy at Veda Partners. Joining us from New Orleans. 489 00:23:26,560 --> 00:23:29,920 Speaker 10: You are listening to the Bloomberg Business Week podcast. Catch 490 00:23:30,000 --> 00:23:33,240 Speaker 10: us live weekday afternoons from two to five pm Eastern. 491 00:23:33,359 --> 00:23:36,400 Speaker 10: Listen on Applecarplay and the Android Auto with the Bloomberg 492 00:23:36,480 --> 00:23:40,200 Speaker 10: Business app, or watch us live on YouTube. 493 00:23:40,520 --> 00:23:43,199 Speaker 5: In our studio is Stefan Seelig. He's back with us. 494 00:23:43,240 --> 00:23:47,320 Speaker 5: He's managing partner at Bridge Park Advisors, the financing advisory firm. 495 00:23:47,400 --> 00:23:49,720 Speaker 5: Joining us now. You might recall he's been a frequent 496 00:23:49,760 --> 00:23:53,560 Speaker 5: guest for US Undersecretary former Undersecretary of Commerce for International 497 00:23:53,640 --> 00:23:55,600 Speaker 5: Trade at the US Department of Commerce. That was during 498 00:23:55,640 --> 00:23:59,240 Speaker 5: the Obama administration. He also headed the International Trade Administration, 499 00:23:59,400 --> 00:24:02,000 Speaker 5: spending all nearly three decades on Wall Street. As we 500 00:24:02,080 --> 00:24:05,240 Speaker 5: like to say, Stephan, you're this great intersection of public 501 00:24:05,280 --> 00:24:10,040 Speaker 5: private policy. How are you feeling on this inauguration Monday? 502 00:24:10,600 --> 00:24:13,800 Speaker 12: Look, I think Carol, we all have to feel optimistic 503 00:24:14,280 --> 00:24:16,320 Speaker 12: because we're Americans and that's kind of our job, and 504 00:24:16,359 --> 00:24:18,640 Speaker 12: we're all rooting for the president and the new administration. 505 00:24:19,040 --> 00:24:22,040 Speaker 12: He's clearly entering the White House with a whole host 506 00:24:22,080 --> 00:24:26,040 Speaker 12: of challenges, both economic challenges and foreign policy challenges that 507 00:24:26,080 --> 00:24:29,359 Speaker 12: he didn't face in his first go around. And so 508 00:24:30,640 --> 00:24:32,520 Speaker 12: as we say, godspeed. 509 00:24:33,000 --> 00:24:35,520 Speaker 2: What did you learn during the first rodeo that you're 510 00:24:35,560 --> 00:24:37,800 Speaker 2: going to come and kind of refer to this time 511 00:24:37,800 --> 00:24:40,400 Speaker 2: around when it comes to what he's saying, what he's telegraphing, 512 00:24:41,400 --> 00:24:43,639 Speaker 2: How useful is it to you having lived through this before, 513 00:24:43,640 --> 00:24:46,080 Speaker 2: as you think through the implications of his policy proposals. 514 00:24:46,160 --> 00:24:48,000 Speaker 12: You know, Look, and I think that's the question. Are 515 00:24:48,000 --> 00:24:52,600 Speaker 12: they policy proposals? Are they bargaining chips? Is it bluster? 516 00:24:53,000 --> 00:24:56,159 Speaker 12: Is it things he says for self amusement or to 517 00:24:56,200 --> 00:24:58,600 Speaker 12: be vindictive to others, and so I think we have 518 00:24:58,720 --> 00:25:01,760 Speaker 12: to take a fair amount of what the president says 519 00:25:02,440 --> 00:25:03,919 Speaker 12: cum Grano salis. 520 00:25:03,840 --> 00:25:05,199 Speaker 9: As we used to stay in school. 521 00:25:06,760 --> 00:25:09,600 Speaker 12: That being said, you know, the fact is is the 522 00:25:09,640 --> 00:25:13,600 Speaker 12: country is facing a whole raft of challenges that I 523 00:25:13,640 --> 00:25:18,480 Speaker 12: think the American population has felt that political leadership on 524 00:25:18,560 --> 00:25:21,640 Speaker 12: both sides of the aisle has not been effective and addressing. 525 00:25:22,359 --> 00:25:25,720 Speaker 4: Does it look to you like business leaders are getting 526 00:25:25,720 --> 00:25:30,520 Speaker 4: too political? We had a Bloomberg analysis about one point 527 00:25:30,520 --> 00:25:33,679 Speaker 4: three trillion dollars in wealth on stage during that inauguration, 528 00:25:33,760 --> 00:25:35,840 Speaker 4: people like Mark Zuckerberg Elon Musk. 529 00:25:35,920 --> 00:25:38,600 Speaker 12: Well, the most amazing thing, Tim is probably in five companies. 530 00:25:39,040 --> 00:25:41,080 Speaker 9: Yeah exactly. I mean it's like three or four individuals. 531 00:25:41,400 --> 00:25:42,800 Speaker 9: It's like the stock market. 532 00:25:42,720 --> 00:25:45,600 Speaker 5: And it keeps like the mag simon We're happy inaugirl. 533 00:25:47,160 --> 00:25:49,960 Speaker 4: Is that is that a relationship that, in your view 534 00:25:50,359 --> 00:25:54,800 Speaker 4: as a leader, is risky at all to these companies? 535 00:25:55,560 --> 00:25:59,719 Speaker 12: You know, Look, I think companies have to do what 536 00:25:59,840 --> 00:26:03,760 Speaker 12: is best for their companies, their constituents, and their shareholders. 537 00:26:04,200 --> 00:26:08,800 Speaker 12: And I think basically what they are doing is, you know, 538 00:26:08,880 --> 00:26:12,960 Speaker 12: getting behind the president. I think there is a general perception, 539 00:26:13,080 --> 00:26:16,640 Speaker 12: not just in the technology sector that the last administration 540 00:26:16,840 --> 00:26:21,399 Speaker 12: was not particularly pro business, and that was particularly the 541 00:26:21,440 --> 00:26:25,359 Speaker 12: case in the healthcare and pharmaceutical industries, amongst others. And 542 00:26:25,400 --> 00:26:28,000 Speaker 12: I think they're all hopeful that in this administration there's 543 00:26:28,040 --> 00:26:32,040 Speaker 12: going to be a much more business friendly environment. And 544 00:26:32,080 --> 00:26:35,080 Speaker 12: I think, as I start off saying, they're Americans too, uh, 545 00:26:35,200 --> 00:26:37,920 Speaker 12: they're and they're getting behind the president and the administration 546 00:26:38,359 --> 00:26:41,480 Speaker 12: to put their particular companies in the best position that 547 00:26:41,520 --> 00:26:43,359 Speaker 12: they can be in. And that's kind of their jobs. 548 00:26:43,960 --> 00:26:46,600 Speaker 5: You know, Stephan, I keep thinking about, you know, notes 549 00:26:46,640 --> 00:26:48,119 Speaker 5: you shared and what you said when you kicked off 550 00:26:48,160 --> 00:26:50,840 Speaker 5: the conversation about the world that Donald Trump is coming 551 00:26:50,840 --> 00:26:53,960 Speaker 5: into in his second term. It is more complex, it seems, 552 00:26:55,000 --> 00:26:57,400 Speaker 5: there is more volatility. It's not just something we see 553 00:26:57,400 --> 00:26:59,800 Speaker 5: a play out actually in the financial markets to some extent. 554 00:27:00,200 --> 00:27:04,879 Speaker 5: So what's his first test? Is it Russia? Ukraine? Is 555 00:27:04,920 --> 00:27:09,280 Speaker 5: it continuation of the Middle East peace or cease fire? 556 00:27:09,400 --> 00:27:09,520 Speaker 9: Like? 557 00:27:09,720 --> 00:27:11,639 Speaker 5: What is his first test? Do you think on this front? 558 00:27:11,760 --> 00:27:12,480 Speaker 9: You know, I'm not sure. 559 00:27:12,480 --> 00:27:13,360 Speaker 5: You more domestic? 560 00:27:13,440 --> 00:27:16,479 Speaker 12: You know, you do it, Siriatum. I think they're going 561 00:27:16,560 --> 00:27:18,960 Speaker 12: to all come together and he's going to address them. 562 00:27:19,200 --> 00:27:21,399 Speaker 12: I think he's probably Carol going to focus on the 563 00:27:21,400 --> 00:27:22,919 Speaker 12: things where he's likely to be able to be the 564 00:27:22,960 --> 00:27:25,679 Speaker 12: most impactful. So, for example, he's probably learned from his 565 00:27:25,720 --> 00:27:28,560 Speaker 12: North Korea experience that there are certain fights that are, 566 00:27:28,920 --> 00:27:33,120 Speaker 12: you know, not necessarily worth getting into. But I think 567 00:27:33,160 --> 00:27:36,080 Speaker 12: he is going to sense that he has a real opportunity. 568 00:27:36,119 --> 00:27:39,240 Speaker 12: He's got a real opportunity in the Middle East. He's 569 00:27:39,280 --> 00:27:43,760 Speaker 12: got a real opportunity with Russia and the Ukraine. He's 570 00:27:43,760 --> 00:27:46,560 Speaker 12: got a real opportunity to reset our relationship with Europe. 571 00:27:46,560 --> 00:27:49,320 Speaker 12: So I think there's a whole host of both domestic, 572 00:27:49,440 --> 00:27:54,240 Speaker 12: economic and foreign policy opportunities that the President's going to 573 00:27:54,280 --> 00:27:54,639 Speaker 12: go after. 574 00:27:55,320 --> 00:27:57,560 Speaker 2: As a marching band from Middletown, Ohio, which I believe 575 00:27:57,600 --> 00:27:59,960 Speaker 2: is a JD. Van's hometown, makes its way through Capital 576 00:28:00,080 --> 00:28:03,000 Speaker 2: One Arena. Let me ask you about your former job 577 00:28:03,000 --> 00:28:05,200 Speaker 2: at the Commerce Department. We were talking with Henrietta Trades 578 00:28:05,240 --> 00:28:08,560 Speaker 2: a moment ago about waiting to announce trade policy until 579 00:28:08,560 --> 00:28:11,680 Speaker 2: the US Trade Representative is in place. I've been thinking 580 00:28:11,720 --> 00:28:15,560 Speaker 2: a lot about how this economic team works altogether. If 581 00:28:15,560 --> 00:28:17,679 Speaker 2: it's going to be fractious, who's going to call the shots? 582 00:28:17,680 --> 00:28:20,840 Speaker 2: Can you just talk about the relationship between Commerce and 583 00:28:20,880 --> 00:28:23,199 Speaker 2: the US Trade Representative and the White House when it 584 00:28:23,240 --> 00:28:27,080 Speaker 2: comes to hatching and imposing trade policy. How does it 585 00:28:27,119 --> 00:28:28,760 Speaker 2: all work together? How should it all work together? 586 00:28:29,320 --> 00:28:29,520 Speaker 11: Well? 587 00:28:29,520 --> 00:28:32,600 Speaker 12: It is, you know, the bifurcation historically has been that 588 00:28:32,640 --> 00:28:38,840 Speaker 12: the United States Trade Representative was primarily focused on trade 589 00:28:38,920 --> 00:28:42,720 Speaker 12: agreements and negotiating trade agreements, and with the exception maybe 590 00:28:42,720 --> 00:28:46,480 Speaker 12: of the renegotiation of the USMCA, I think everybody expects 591 00:28:46,480 --> 00:28:48,720 Speaker 12: that there'll be very few trade agreements that it's really 592 00:28:48,720 --> 00:28:51,760 Speaker 12: not going to be part of the presidents in this 593 00:28:51,840 --> 00:28:55,280 Speaker 12: administration's trade arsenal. So I think, frankly, the Commerce Department 594 00:28:55,400 --> 00:28:58,520 Speaker 12: will be much more central and central and driving two things, 595 00:28:58,520 --> 00:29:01,400 Speaker 12: which is to create a leveling field for US companies 596 00:29:01,440 --> 00:29:04,800 Speaker 12: to compete most effectively overseas, and to attract foreign direct 597 00:29:04,840 --> 00:29:06,320 Speaker 12: investment into the United States. 598 00:29:06,680 --> 00:29:08,520 Speaker 9: The tariff issue. 599 00:29:08,720 --> 00:29:12,240 Speaker 12: You know, frankly, is not just will not just come 600 00:29:12,280 --> 00:29:14,560 Speaker 12: from both of those departments, but will come from this 601 00:29:15,160 --> 00:29:20,320 Speaker 12: new external external revenue service these taking about. I'm not 602 00:29:20,320 --> 00:29:23,400 Speaker 12: sure how that I'm not sure how that will necessarily 603 00:29:23,440 --> 00:29:27,720 Speaker 12: be different than the you know, customs, customs arrangements that 604 00:29:27,720 --> 00:29:30,640 Speaker 12: already take place. But what I would say is that 605 00:29:30,960 --> 00:29:35,800 Speaker 12: the tariff conversation is not particularly well understood. So the 606 00:29:35,840 --> 00:29:41,680 Speaker 12: President today focused primarily on the revenue raising benefits of tariffs. 607 00:29:42,080 --> 00:29:45,280 Speaker 12: That for sure is true if in fact they're paid, 608 00:29:45,640 --> 00:29:48,360 Speaker 12: because if they're paid, the Treasury then gets the money. 609 00:29:48,600 --> 00:29:52,520 Speaker 12: But he also talked about creating opportunities to have the 610 00:29:52,640 --> 00:29:58,400 Speaker 12: restoring and resourcing of American manufacturing. If because of those tariffs, 611 00:29:58,880 --> 00:30:01,520 Speaker 12: foreign goods are not going to be coming into American 612 00:30:01,680 --> 00:30:04,720 Speaker 12: chores because they're more expensive, then there's not going to 613 00:30:04,760 --> 00:30:07,000 Speaker 12: be the revenue opportunity. It's not going to be collected. 614 00:30:07,200 --> 00:30:09,440 Speaker 12: So it's kind of you can't have it both ways. 615 00:30:09,480 --> 00:30:11,840 Speaker 5: We had an earlier guests who suggested, I can't remember 616 00:30:11,840 --> 00:30:13,960 Speaker 5: who it was that said, maybe he doesn't understand tariffs 617 00:30:14,000 --> 00:30:14,640 Speaker 5: and how they work. 618 00:30:15,040 --> 00:30:15,200 Speaker 8: Well. 619 00:30:15,240 --> 00:30:17,360 Speaker 12: I'm not sure people on both sides of the aisle 620 00:30:17,440 --> 00:30:21,680 Speaker 12: particularly understand it, because Carol, they're quite complex. The other complexity, 621 00:30:21,680 --> 00:30:25,720 Speaker 12: of course, is with tariffs usually come a higher dollar, 622 00:30:25,960 --> 00:30:28,120 Speaker 12: and the President's been very aggressive about not wanting a 623 00:30:28,160 --> 00:30:30,600 Speaker 12: higher dollar. The dollar is already overvalue because it's the 624 00:30:30,600 --> 00:30:35,280 Speaker 12: world's reserve currency, and that will make exports more expensive 625 00:30:35,920 --> 00:30:40,320 Speaker 12: for buyers, and that will further exacerbate the trade deficit 626 00:30:40,400 --> 00:30:45,240 Speaker 12: as US goods exports become more expensive for foreign foreign buyers. 627 00:30:45,600 --> 00:30:49,400 Speaker 12: So none of these things are actually simplistic. And most importantly, 628 00:30:49,880 --> 00:30:54,240 Speaker 12: the benefits of tariffs are many, full, but they're often conflicting. 629 00:30:54,560 --> 00:30:57,040 Speaker 4: I think maybe if President Trump were sitting here listening 630 00:30:57,040 --> 00:30:58,960 Speaker 4: to this, he would say, to you, the idea of 631 00:30:59,040 --> 00:31:01,840 Speaker 4: tariffs is to get more of these goods made here 632 00:31:01,880 --> 00:31:04,360 Speaker 4: in the United States so we don't have to import 633 00:31:04,440 --> 00:31:06,800 Speaker 4: these things. I think an economist would say, well, we 634 00:31:06,800 --> 00:31:09,880 Speaker 4: don't live in a world where that's necessarily efficient because 635 00:31:09,920 --> 00:31:12,600 Speaker 4: of what we do here in the US versus specialties 636 00:31:12,760 --> 00:31:15,640 Speaker 4: outside of the world. Is there, though, a world that 637 00:31:15,760 --> 00:31:18,040 Speaker 4: exists that's a happy medium between the two, where we 638 00:31:18,120 --> 00:31:22,800 Speaker 4: do start to see nearshoring and onshoring from American companies 639 00:31:22,840 --> 00:31:25,240 Speaker 4: that have outsourced manufacturing. 640 00:31:25,640 --> 00:31:28,040 Speaker 12: So I think tim that is exactly the point. So 641 00:31:28,040 --> 00:31:30,360 Speaker 12: if you go back to the economist and the seventeen hundreds, 642 00:31:30,400 --> 00:31:33,520 Speaker 12: David Ricardo, it was quite simplistic, which is, you know, 643 00:31:33,560 --> 00:31:37,120 Speaker 12: everybody should produce and have a comparative advantage. What I 644 00:31:37,200 --> 00:31:39,160 Speaker 12: think we're learning around the world, and where I think 645 00:31:39,200 --> 00:31:43,400 Speaker 12: this debate fundamentally comes down to, is the economic benefits 646 00:31:43,400 --> 00:31:45,720 Speaker 12: of trade may have to be subordinated to some of 647 00:31:45,720 --> 00:31:50,480 Speaker 12: the other important aspects of trade, and that includes primarily employment, 648 00:31:50,600 --> 00:31:53,600 Speaker 12: domestic employment, which has been eviscerated in the United States 649 00:31:53,880 --> 00:31:58,080 Speaker 12: in many rural areas, in manufacturing in particular, because of 650 00:31:58,120 --> 00:32:02,360 Speaker 12: the benefits of tradeational security where there are certain goods 651 00:32:02,360 --> 00:32:05,520 Speaker 12: we don't want to have to rely on end and 652 00:32:05,560 --> 00:32:09,920 Speaker 12: we saw that in the pandemic. So finding that perfect balance, 653 00:32:10,320 --> 00:32:12,160 Speaker 12: I think is exactly what it's going to be the 654 00:32:12,280 --> 00:32:16,440 Speaker 12: nuance of this argument. And the fact is trade has, 655 00:32:16,720 --> 00:32:19,000 Speaker 12: with all the benefits that we all understand for trade, 656 00:32:19,040 --> 00:32:21,800 Speaker 12: it's left a lot of Americans behind, and it has 657 00:32:21,880 --> 00:32:26,600 Speaker 12: left Americans behind in communities that did benefit from globalization, 658 00:32:27,080 --> 00:32:31,400 Speaker 12: and that's exacerbated inequality, and it's created political division that 659 00:32:31,440 --> 00:32:36,440 Speaker 12: I think everybody is recognizing as a real problem in 660 00:32:36,480 --> 00:32:37,880 Speaker 12: this country and around the world. 661 00:32:38,320 --> 00:32:41,920 Speaker 2: Should we be worried about how disorienting it can be 662 00:32:42,120 --> 00:32:45,520 Speaker 2: when major policy changes happen suddenly. So I think about 663 00:32:45,600 --> 00:32:48,160 Speaker 2: trade policy and the opposition of these huge tariffs, which 664 00:32:48,160 --> 00:32:50,880 Speaker 2: are not going to be as I gather, narrowly tailored 665 00:32:50,880 --> 00:32:55,680 Speaker 2: but blunter. I look at immigration and the administration's promised 666 00:32:55,720 --> 00:32:58,160 Speaker 2: to deport, not just hundreds of thousands of people, but 667 00:32:58,280 --> 00:33:00,320 Speaker 2: millions of people. That happening very suddenly, and how that 668 00:33:00,360 --> 00:33:02,720 Speaker 2: might unsettle the labor market. We're talking about something that's 669 00:33:02,760 --> 00:33:06,200 Speaker 2: not going to happen in certainly not a smooth way. 670 00:33:06,240 --> 00:33:07,800 Speaker 2: It's going to be sudden, and I wonder what the 671 00:33:07,800 --> 00:33:10,880 Speaker 2: consequences of making decisions like that are. Policy moves like 672 00:33:10,920 --> 00:33:13,920 Speaker 2: that are yes to the economy, but to markets as well. 673 00:33:13,920 --> 00:33:16,520 Speaker 2: It's going to be sudden and I imagine quite jarring. 674 00:33:17,400 --> 00:33:19,320 Speaker 9: You know, Look, it's one. 675 00:33:19,160 --> 00:33:23,840 Speaker 12: Of the costs of our political system, right, I mean 676 00:33:23,920 --> 00:33:27,680 Speaker 12: other countries around the world. China has the benefit of 677 00:33:27,920 --> 00:33:34,200 Speaker 12: the stability of an ongoing, long term, consistent leadership role, 678 00:33:34,280 --> 00:33:37,680 Speaker 12: but it also has costs. Right, You don't you don't 679 00:33:37,680 --> 00:33:41,560 Speaker 12: have the ability for their populations to elect new leaders 680 00:33:41,600 --> 00:33:44,360 Speaker 12: on a regular basis. So I think, of course there's 681 00:33:44,440 --> 00:33:48,040 Speaker 12: going to be some disruption. But with that disruption cause 682 00:33:48,480 --> 00:33:51,080 Speaker 12: creates the opportunity for change. And I think one of 683 00:33:51,120 --> 00:33:53,560 Speaker 12: the things we're seeing in this election is the American 684 00:33:53,600 --> 00:33:56,240 Speaker 12: people were quite clear is that we need a. 685 00:33:56,280 --> 00:33:57,240 Speaker 9: Change in Washington. 686 00:33:57,440 --> 00:34:00,240 Speaker 12: We need a change in direction, and hopefully that change 687 00:34:00,240 --> 00:34:05,240 Speaker 12: will lead to some of the results that benefit Americans. 688 00:34:06,960 --> 00:34:09,520 Speaker 5: Is the US no longer a superpower or is it 689 00:34:09,600 --> 00:34:10,560 Speaker 5: headed in that direction? 690 00:34:11,360 --> 00:34:15,360 Speaker 12: You know, we are the superpower, Carol at this moment, 691 00:34:15,360 --> 00:34:17,359 Speaker 12: and I think we will continue to be. We have 692 00:34:17,640 --> 00:34:22,160 Speaker 12: unrivaled benefits. So the President talked about our energy self sufficiency. 693 00:34:22,520 --> 00:34:24,640 Speaker 12: We have the most powerful military in the world. We 694 00:34:24,680 --> 00:34:26,799 Speaker 12: have the most innovative economy in the world. We have 695 00:34:26,840 --> 00:34:29,480 Speaker 12: the broadest and deepest capital markets in the world. There 696 00:34:29,520 --> 00:34:34,960 Speaker 12: are so many things that differentia ourselves from every other country. 697 00:34:35,040 --> 00:34:38,480 Speaker 12: That being said, I think the role of the superpower 698 00:34:38,640 --> 00:34:42,359 Speaker 12: is going to change, and so countries are not going 699 00:34:42,400 --> 00:34:44,720 Speaker 12: to be able to rely on us in a blank 700 00:34:44,840 --> 00:34:46,879 Speaker 12: check way. One of the things I think you've heard 701 00:34:46,920 --> 00:34:50,120 Speaker 12: from the President today there is going to be a 702 00:34:50,360 --> 00:34:53,760 Speaker 12: cost associated with the benefits of relying on the United 703 00:34:53,760 --> 00:34:56,000 Speaker 12: States as a superpower, and a lot of the people 704 00:34:56,040 --> 00:34:58,319 Speaker 12: that have benefited from that umbrella are going to have 705 00:34:58,360 --> 00:34:59,680 Speaker 12: to contribute in different ways. 706 00:35:00,680 --> 00:35:01,680 Speaker 5: Is that a good evolution. 707 00:35:03,800 --> 00:35:05,040 Speaker 9: I think it is a good evolution. 708 00:35:05,120 --> 00:35:08,040 Speaker 12: But most importantly, it's a realistic evolution because the world 709 00:35:08,080 --> 00:35:11,360 Speaker 12: has changed since the Cold War, since the end of 710 00:35:11,360 --> 00:35:14,240 Speaker 12: the World War II, and a lot of the world order, 711 00:35:15,080 --> 00:35:17,760 Speaker 12: the liberal world order, which is called which it's often 712 00:35:17,800 --> 00:35:20,080 Speaker 12: referred to, was put in place at the end of 713 00:35:20,080 --> 00:35:21,800 Speaker 12: the Second World War, and the end of the Second 714 00:35:21,800 --> 00:35:24,399 Speaker 12: World War is not the world of twenty twenty five. 715 00:35:25,120 --> 00:35:27,399 Speaker 12: We had the Cold War. After that, the Cold War ended, 716 00:35:27,440 --> 00:35:30,680 Speaker 12: and now we have a different world. We were competing 717 00:35:30,680 --> 00:35:34,440 Speaker 12: with China in a different way. We have various global 718 00:35:34,480 --> 00:35:39,160 Speaker 12: disruptions and competitors who were forming this axis of resistance 719 00:35:39,400 --> 00:35:41,880 Speaker 12: that didn't exist just a handful of years ago. And 720 00:35:41,920 --> 00:35:44,319 Speaker 12: as a result, our systems and our policies are going 721 00:35:44,360 --> 00:35:46,840 Speaker 12: to have to change and adopt to a changing world. 722 00:35:47,000 --> 00:35:49,560 Speaker 4: So you worked in a democratic administration, It was pretty 723 00:35:49,600 --> 00:35:53,280 Speaker 4: remarkable to look up there today and see President Clinton, 724 00:35:53,320 --> 00:35:57,640 Speaker 4: President Bush. You also have President Obama there as well 725 00:35:57,680 --> 00:35:59,239 Speaker 4: as a lot of folks up there who had run 726 00:35:59,280 --> 00:36:04,040 Speaker 4: for president unsuccessfully. What should Democrats be doing right now 727 00:36:04,239 --> 00:36:08,399 Speaker 4: to prepare to take back the White House or win 728 00:36:08,680 --> 00:36:12,040 Speaker 4: more seats in Congress in the next two and four years, 729 00:36:12,480 --> 00:36:15,760 Speaker 4: given that the world has undergone such a major shift, 730 00:36:15,760 --> 00:36:17,960 Speaker 4: and that this country has undergone such a major shift. 731 00:36:18,239 --> 00:36:21,960 Speaker 12: Look, I think the Democrats are rightly licking their wounds 732 00:36:22,480 --> 00:36:25,640 Speaker 12: at the moment, and I think the parts of the 733 00:36:25,640 --> 00:36:30,279 Speaker 12: Democratic Party clearly pulled the last administration too far to 734 00:36:30,320 --> 00:36:32,680 Speaker 12: the left, and there was a wholesale rejection of that, 735 00:36:32,760 --> 00:36:35,520 Speaker 12: and that came across in both social issues and economic 736 00:36:35,560 --> 00:36:39,160 Speaker 12: issues and certain foreign policy issues. And hopefully, and I 737 00:36:39,160 --> 00:36:43,000 Speaker 12: think built Clinton, you mentioned President Clinton on the stage, 738 00:36:43,480 --> 00:36:47,440 Speaker 12: really understood the importance of centrism because we are a 739 00:36:47,440 --> 00:36:51,600 Speaker 12: centrist country and the politics of this country has become, 740 00:36:52,000 --> 00:36:54,400 Speaker 12: as I've said, much more divided. And it would be 741 00:36:54,480 --> 00:36:57,520 Speaker 12: my personal preference for both parties, including the Democratic Party, 742 00:36:57,560 --> 00:36:59,759 Speaker 12: we moved much more towards the center and governed from 743 00:36:59,760 --> 00:37:01,040 Speaker 12: the sen You know. 744 00:37:01,200 --> 00:37:04,160 Speaker 2: I watched a number of these confirmation hearings last week, 745 00:37:04,200 --> 00:37:05,799 Speaker 2: and you know what stood out to me, in part 746 00:37:05,840 --> 00:37:08,279 Speaker 2: from Pete hegxsa's confirmation hearing, is how he'd met with 747 00:37:08,280 --> 00:37:11,640 Speaker 2: no Democratic members of the Senate of that committee. And 748 00:37:12,080 --> 00:37:13,959 Speaker 2: you know, stuff like that happens, It kind of rolls 749 00:37:14,000 --> 00:37:17,319 Speaker 2: by you. But that's like a pretty extraordinary, pretty extraordinary thing, 750 00:37:17,320 --> 00:37:19,960 Speaker 2: and that wasn't the case for every nominee. But what 751 00:37:20,000 --> 00:37:23,440 Speaker 2: does that tell you just about the stability of the 752 00:37:23,440 --> 00:37:25,800 Speaker 2: center that you're talking about the willingness of both of 753 00:37:25,880 --> 00:37:28,719 Speaker 2: these parties to find some common ground, some comedy among 754 00:37:28,760 --> 00:37:31,320 Speaker 2: the two of them and to you know, return to 755 00:37:31,440 --> 00:37:34,360 Speaker 2: a mode in which people get a fair hearing and 756 00:37:34,760 --> 00:37:37,120 Speaker 2: you you listen to the other side and you kind 757 00:37:37,160 --> 00:37:41,080 Speaker 2: of assess a person's biography and skills based on kind 758 00:37:41,080 --> 00:37:43,080 Speaker 2: of a neutral understanding. 759 00:37:43,400 --> 00:37:46,920 Speaker 12: David, it's it's it's very unfortunate that the that that 760 00:37:46,960 --> 00:37:50,840 Speaker 12: we have seen, we're seeing less civility in public discourse 761 00:37:50,960 --> 00:37:53,960 Speaker 12: generally and certainly amongst our political leaders. I know when 762 00:37:54,000 --> 00:37:58,400 Speaker 12: I was getting confirmed from my position by the Finance 763 00:37:58,440 --> 00:38:00,600 Speaker 12: Committee of the United States Senate, would at the time 764 00:38:01,560 --> 00:38:04,839 Speaker 12: was chaired by a Republican or an Hatch who's passed away, 765 00:38:04,880 --> 00:38:08,440 Speaker 12: the Senator from Utah. He went after me in all 766 00:38:08,480 --> 00:38:10,400 Speaker 12: sorts of ways, and at the end of my hearing 767 00:38:10,520 --> 00:38:15,080 Speaker 12: he said, mister Celik, you were more than qualified to 768 00:38:15,120 --> 00:38:17,359 Speaker 12: be the under Secretary of Commerce for the United States 769 00:38:17,440 --> 00:38:21,200 Speaker 12: of America. You will get this committee support and you 770 00:38:21,239 --> 00:38:23,640 Speaker 12: will get confirmed. And it was a very to me 771 00:38:24,840 --> 00:38:28,319 Speaker 12: poignant moment where there was an opportunity to fight for him, 772 00:38:28,320 --> 00:38:30,680 Speaker 12: to make his points in a very public setting, but 773 00:38:30,719 --> 00:38:32,800 Speaker 12: at the end of the day do what he believed 774 00:38:32,920 --> 00:38:34,719 Speaker 12: was the right thing to do and communicate it in 775 00:38:34,760 --> 00:38:37,920 Speaker 12: a highly professional and constructive way. To me, and I 776 00:38:37,960 --> 00:38:40,520 Speaker 12: just hope there are other senators and political leaders in 777 00:38:40,560 --> 00:38:42,400 Speaker 12: the country that would take that as an example. 778 00:38:42,600 --> 00:38:44,279 Speaker 5: Can I ask you, is there too much money in 779 00:38:44,320 --> 00:38:46,520 Speaker 5: politics at this point? And maybe that's why we're not 780 00:38:46,560 --> 00:38:53,080 Speaker 5: necessarily getting policy that benefits more or most of America. 781 00:38:53,960 --> 00:38:56,360 Speaker 9: No, Carol has ever not been money in politics. 782 00:38:56,800 --> 00:38:59,839 Speaker 4: I mean, were you doing this show? 783 00:39:00,200 --> 00:39:01,120 Speaker 9: Is before Rome. 784 00:39:02,080 --> 00:39:04,600 Speaker 4: Socided change something? I mean it allowed these people like 785 00:39:04,640 --> 00:39:07,200 Speaker 4: Elon Musk to go spend two hundred and fifty million dollars. 786 00:39:07,239 --> 00:39:08,360 Speaker 5: It's on a whole other level. 787 00:39:08,520 --> 00:39:11,359 Speaker 12: It's politics and time, right. I mean, you know that 788 00:39:11,400 --> 00:39:16,200 Speaker 12: these processes take too long, but you know you could 789 00:39:16,280 --> 00:39:18,000 Speaker 12: come up with a whole host of things. You can 790 00:39:18,040 --> 00:39:22,160 Speaker 12: add that to the list. The electoral college at the moment, 791 00:39:22,239 --> 00:39:24,400 Speaker 12: that jerry mandering, there's a whole host of things that 792 00:39:24,480 --> 00:39:28,120 Speaker 12: I think in an ideal world we would change for sure. 793 00:39:28,920 --> 00:39:31,359 Speaker 12: And if you look around most of the other major 794 00:39:31,400 --> 00:39:33,520 Speaker 12: democracies in the world, they are not doing it the 795 00:39:33,560 --> 00:39:35,799 Speaker 12: way we're doing it. And so if they're not doing 796 00:39:35,800 --> 00:39:37,280 Speaker 12: it the way we're doing it, you got to scratch 797 00:39:37,280 --> 00:39:38,520 Speaker 12: your head and say, we're really doing. 798 00:39:38,400 --> 00:39:39,040 Speaker 9: It the right way. 799 00:39:39,640 --> 00:39:41,160 Speaker 2: I guess this gets so what we've been talking about, 800 00:39:41,320 --> 00:39:44,040 Speaker 2: is this desire clearly for watching to be fixed or 801 00:39:44,040 --> 00:39:47,560 Speaker 2: made different, And I think that the frustrations are widely 802 00:39:47,840 --> 00:39:48,600 Speaker 2: are widely shared. 803 00:39:48,640 --> 00:39:49,440 Speaker 3: Well, I think it gets. 804 00:39:49,320 --> 00:39:51,680 Speaker 5: To the point too of just having you know, you've 805 00:39:51,719 --> 00:39:54,400 Speaker 5: come on too, and we've talked about, you know, people 806 00:39:54,440 --> 00:39:56,839 Speaker 5: doing really well and if you've been in the stock market, 807 00:39:56,880 --> 00:39:59,279 Speaker 5: if you've been an investor, you've done really well. But 808 00:39:59,360 --> 00:40:01,920 Speaker 5: there are you know, K shaped recovery, the K shaped economy. 809 00:40:01,960 --> 00:40:05,200 Speaker 5: There's so many people who haven't benefited benefited, and so 810 00:40:05,280 --> 00:40:07,360 Speaker 5: how do we get back there? I mean, is Donald 811 00:40:07,360 --> 00:40:09,120 Speaker 5: Trump a step in that right direction? 812 00:40:09,880 --> 00:40:10,040 Speaker 9: Well? 813 00:40:10,239 --> 00:40:13,239 Speaker 12: I think I think certainly he is recognizing it. This 814 00:40:13,360 --> 00:40:15,479 Speaker 12: goes back to your first question about you know, what's 815 00:40:15,520 --> 00:40:17,719 Speaker 12: going to what's going to be the actual policies and 816 00:40:17,719 --> 00:40:19,279 Speaker 12: what's going to be the outcome as opposed to the 817 00:40:19,400 --> 00:40:23,880 Speaker 12: campaign rhetoric, and that we will have to see. But 818 00:40:24,200 --> 00:40:26,480 Speaker 12: I think, you know, this gets back to the ten point, 819 00:40:26,600 --> 00:40:31,919 Speaker 12: which is pure economic theory works in the classroom. We're 820 00:40:31,960 --> 00:40:35,200 Speaker 12: not in a classroom. And for for example, China you know, 821 00:40:35,320 --> 00:40:39,040 Speaker 12: doesn't play really by the wto rules that everybody that 822 00:40:39,239 --> 00:40:42,120 Speaker 12: is that everybody is is was trying to abide by 823 00:40:42,360 --> 00:40:45,200 Speaker 12: which broke the system. And as a result of that, 824 00:40:45,920 --> 00:40:47,879 Speaker 12: you know, we really are going to have to be 825 00:40:48,520 --> 00:40:52,920 Speaker 12: much more realistic about and commercial about how we adopt 826 00:40:53,200 --> 00:40:57,840 Speaker 12: and implement policies and understand that whether it's tariff's trade 827 00:40:57,840 --> 00:41:02,399 Speaker 12: the dollar, that there are consequences for a whole host, 828 00:41:02,640 --> 00:41:05,239 Speaker 12: for a whole section of our population who've got to 829 00:41:05,239 --> 00:41:06,120 Speaker 12: be quite sensitive to. 830 00:41:06,480 --> 00:41:09,960 Speaker 4: We certainly saw that portion of the population, and we 831 00:41:10,040 --> 00:41:13,560 Speaker 4: also saw the message loud and clear during this last 832 00:41:13,600 --> 00:41:16,720 Speaker 4: election that what a lot of people thought was working 833 00:41:17,480 --> 00:41:22,399 Speaker 4: was not working and they wanted President Trump back. I'll 834 00:41:22,400 --> 00:41:24,400 Speaker 4: ask you the same question I asked ed Price earlier. 835 00:41:24,440 --> 00:41:27,440 Speaker 4: What happens if those people's lives do not improve over 836 00:41:27,480 --> 00:41:29,920 Speaker 4: the next four years. What's sort of the next evolution 837 00:41:30,040 --> 00:41:31,680 Speaker 4: of this boy. 838 00:41:32,960 --> 00:41:37,799 Speaker 12: I'm not a particular alarmist him, but what I would 839 00:41:37,880 --> 00:41:40,840 Speaker 12: say is, you know, you have no other choice but 840 00:41:40,880 --> 00:41:44,920 Speaker 12: to kind of go back to the drawing board, and 841 00:41:44,960 --> 00:41:46,040 Speaker 12: then you have another election. 842 00:41:47,160 --> 00:41:49,040 Speaker 9: I think it's as simple. It's as simple as that. 843 00:41:51,040 --> 00:41:52,920 Speaker 5: Well, and I do wonder about the kind of back 844 00:41:52,960 --> 00:41:55,560 Speaker 5: and forth that we've seen coming off of Barack Obama 845 00:41:55,760 --> 00:41:58,279 Speaker 5: and then going to Donald Trump and then going to 846 00:41:58,360 --> 00:42:02,560 Speaker 5: Joe Biden. Yeah, right, And it just speaks to you, right, 847 00:42:02,640 --> 00:42:06,080 Speaker 5: the American dissatisfaction, at least some Americans saying, listen, this 848 00:42:06,160 --> 00:42:06,560 Speaker 5: is not. 849 00:42:06,560 --> 00:42:08,839 Speaker 12: The way Foks carol that to me, and that, by 850 00:42:08,880 --> 00:42:10,799 Speaker 12: the way, is not an American point, right. You're seeing 851 00:42:10,880 --> 00:42:16,480 Speaker 12: that in the United Kingdom and elsewhere. And I think that, 852 00:42:16,520 --> 00:42:19,759 Speaker 12: to me is the point, which is political leaders globally 853 00:42:20,280 --> 00:42:24,879 Speaker 12: have failed their populations. And that is a global phenomenon. 854 00:42:24,960 --> 00:42:27,440 Speaker 12: And I think the single thing that I am most 855 00:42:27,880 --> 00:42:33,040 Speaker 12: excited about as President Trump takes office is the potential 856 00:42:33,120 --> 00:42:37,120 Speaker 12: benefits of a real disruptive force is going to do 857 00:42:37,239 --> 00:42:41,759 Speaker 12: something different than traditional Democrats or Republicans might have done. 858 00:42:41,960 --> 00:42:44,719 Speaker 12: And I think we really are ready for some disruption. 859 00:42:45,719 --> 00:42:50,880 Speaker 1: This is the Bloomberg Business Week podcast, available on Apple, Spotify, 860 00:42:51,040 --> 00:42:55,080 Speaker 1: and anywhere else you get your podcasts. Listen live weekday 861 00:42:55,120 --> 00:42:59,320 Speaker 1: afternoons from two to five pm Eastern on Bloomberg dot Com, 862 00:42:59,400 --> 00:43:03,240 Speaker 1: the iHeart Radio app, tune In, and the Bloomberg Business App. 863 00:43:03,440 --> 00:43:06,280 Speaker 1: You can also watch us live every weekday on YouTube 864 00:43:06,520 --> 00:43:08,720 Speaker 1: and always on the Bloomberg terminal