WEBVTT - Ex-CIA Head Discusses Terrorism, Russia, & Intelligence Sharing 0:00:00.240 --> 0:00:04.040 Runt you by Bank of America Mary Lynch. With virtual reality, 0:00:04.320 --> 0:00:09.719 virtually everything will change. Discover opportunities in a transforming world. 0:00:10.119 --> 0:00:14.440 Be of a, mL dot Com, slash VR, Mary Lynch, 0:00:14.520 --> 0:00:28.120 Pierced Fenner and Smith Incorporated. Ye, Welcome to the Bloomberg 0:00:28.160 --> 0:00:32.360 Surveillance Podcast. I'm Tom Keene with David Gura. Daily we 0:00:32.440 --> 0:00:36.080 bring you insight from the best of economics, finance, investment, 0:00:36.120 --> 0:00:42.160 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:42.280 --> 0:00:49.199 Bloomberg dot Com, and of course on the Bloomberg. A 0:00:49.240 --> 0:00:50.880 pleasure to have with us here in our Bloomberg eleven 0:00:50.920 --> 0:00:53.480 three Ust to Stephen Roach. Stephen Roach, of course, said 0:00:53.479 --> 0:00:56.080 the former chairman of Morgan Stanley AGIA, former chief economist 0:00:56.120 --> 0:00:58.520 at Morgan Stanley, now senior lecturer at the Jackson Institute 0:00:58.560 --> 0:01:02.880 of Global Affairs at the Else School of Management. Uh, 0:01:03.000 --> 0:01:04.840 we get this budget today, they'll be talk again of 0:01:04.959 --> 0:01:07.560 growth expectations here in the US. You've been given some 0:01:07.600 --> 0:01:11.160 thought to the expectations for growth more globally. Can we 0:01:11.160 --> 0:01:13.759 start domestically and just to talk about what we've heard 0:01:13.760 --> 0:01:16.440 from mcmulvanny, the Office of Management Budget Director. He spoke 0:01:16.520 --> 0:01:20.000 yesterday saying the days of being content with one point 0:01:20.080 --> 0:01:23.080 nine percent growth have to be put behind us. All 0:01:23.120 --> 0:01:24.520 well and good that he says that, is there any 0:01:24.560 --> 0:01:26.240 likelihood of that happening here in the near term in 0:01:26.280 --> 0:01:29.679 the US, Well, David, there's there's always a likelihood of 0:01:29.720 --> 0:01:33.880 anything happening. But I think to push the button and 0:01:33.920 --> 0:01:40.280 go from two to three UH in a period where 0:01:40.440 --> 0:01:45.399 productivity growth is still under pressure, where um you're not 0:01:45.400 --> 0:01:49.840 going to get any uplift from growth in the labor force, 0:01:50.000 --> 0:01:53.200 is going to be very, very difficult to achieve. So 0:01:53.240 --> 0:01:58.400 I think any realistic assessment of the budget or the 0:01:58.440 --> 0:02:02.720 debt trajectory over the next ten years, which one has 0:02:02.760 --> 0:02:05.240 to go through to try to make some sense out 0:02:05.240 --> 0:02:09.440 of this or any other president's budget proposal, is quite problematic. 0:02:10.000 --> 0:02:12.280 We'll have a foreign policy expert on and ask him 0:02:12.360 --> 0:02:14.720 or her what we know about the Trump doctrine, the 0:02:14.800 --> 0:02:18.679 nascent Trump doctrine. I suppose in the realm of economics 0:02:18.720 --> 0:02:20.359 we have trump anomics, and I wonder if we're any 0:02:20.360 --> 0:02:23.280 closer to getting a clear definition of of what that is. Again, 0:02:23.360 --> 0:02:27.120 mcmilvanny spoke yesterday and he said his definition is principally 0:02:27.120 --> 0:02:29.560 that it's an effort to get sustained three percent economic 0:02:29.600 --> 0:02:35.280 growth in this country. Again a very aspirational, golden aspirational definition. 0:02:34.480 --> 0:02:38.680 Do you speaking debate all this um, but but you know, 0:02:38.840 --> 0:02:41.760 I think we we have to be analytical and assessing, 0:02:42.680 --> 0:02:47.320 UH where this budget deficit, how it fits into the 0:02:47.360 --> 0:02:49.919 mosaic of of the U S economy. And I think 0:02:49.919 --> 0:02:54.720 there's a real Achilles heel here, and that is that, UH, 0:02:54.800 --> 0:03:00.799 the US right now has an extraordinarily low national savings rate. 0:03:00.880 --> 0:03:05.480 That's the sum total of personal business and UH saving 0:03:05.520 --> 0:03:09.520 plus the government budget deficits. And when you run a 0:03:09.560 --> 0:03:11.800 low savings rate and you want to grow, you import 0:03:11.840 --> 0:03:15.480 surplus savings from abroad, you run massive current account and 0:03:15.520 --> 0:03:20.520 trade deficits to attract the capital. The Trump proposals, in 0:03:20.560 --> 0:03:24.000 my view of realistic assessment, is they're not gonna be balanced. 0:03:24.200 --> 0:03:27.000 You're gonna get budget deficits, so that will push the 0:03:27.080 --> 0:03:30.680 national savings rate lower and make the current account deficit 0:03:31.120 --> 0:03:35.000 wider and our trade deficits become more problematic in the 0:03:35.080 --> 0:03:38.160 years ahead. So here's the catch, David, is that with 0:03:38.160 --> 0:03:42.440 with budget deficits UH and trade deficits likely to expand, 0:03:42.480 --> 0:03:45.280 Tom will be running these charts on the twin deficits. 0:03:45.400 --> 0:03:48.880 Once again. Uh, You've got a president then, who wants 0:03:48.880 --> 0:03:53.000 to turn protectionist against many of our trading partners. How 0:03:53.040 --> 0:03:55.040 does that add up, Tom? How does it add up 0:03:55.400 --> 0:03:58.920 to U to go protectionists at a time when your 0:03:58.960 --> 0:04:02.600 trade defficences are getting bigger? This is vintage Stephen Roach. 0:04:03.400 --> 0:04:06.000 I'm serious, David, this is this goes to the heart 0:04:06.360 --> 0:04:09.760 of what I call balance sheet analysis. Let's stop the 0:04:09.840 --> 0:04:14.400 show and explain to us that some savings rate which 0:04:14.400 --> 0:04:18.320 includes the government deficit, what's it mean for the person 0:04:18.520 --> 0:04:23.880 listening to Bloomberg surveillance? It means that the United States 0:04:24.440 --> 0:04:29.120 is growing beyond its means. Tom. We we we teach 0:04:29.440 --> 0:04:33.240 um students when they take their very first economics course, 0:04:33.680 --> 0:04:37.360 and I'm sure you remember this, tom Um, that the 0:04:37.520 --> 0:04:42.719 savings must always equal investment. It's an accounting identity. So 0:04:42.760 --> 0:04:46.800 when we don't save at home, uh, we then borrow 0:04:46.920 --> 0:04:51.640 savings from abroad and we run these big current account 0:04:52.080 --> 0:04:56.120 balance of payments deficits and trade deficits to attract the capital. 0:04:56.560 --> 0:05:00.360 And so the idea that we can uh now single 0:05:00.400 --> 0:05:04.800 out our trading partners, whether they're in Germany, Japan. Of course, 0:05:04.960 --> 0:05:11.480 China or Korea and others as being villains in what 0:05:11.520 --> 0:05:16.279 they're doing to punish American middle class workers. This is 0:05:16.320 --> 0:05:18.719 the most important point, is that we need these trade 0:05:18.720 --> 0:05:24.960 deficits to square uh the saving investment identity United States 0:05:24.920 --> 0:05:27.919 and David, what's so important about this and Dr Roach's 0:05:27.920 --> 0:05:31.039 analysis is dead on is when I mentioned this in 0:05:31.120 --> 0:05:34.680 speeches or discussions, often citing Stephen Roach, people are just 0:05:34.760 --> 0:05:38.640 in disbelief. They're like, no, that's not true, disbelief because 0:05:38.720 --> 0:05:42.200 my name or because you know, but but but Stephen, 0:05:42.240 --> 0:05:47.039 this is important. Essentially every month by accounting identities, somebody's 0:05:47.040 --> 0:05:50.120 got a right to check there's a flow. There's a 0:05:50.200 --> 0:05:54.680 flow here every month. You know, I, I know, I'm 0:05:54.720 --> 0:05:58.159 a broken record on on this tim We've gotten away 0:05:58.240 --> 0:06:03.080 with it because where the world's reserve currency and um 0:06:03.120 --> 0:06:06.599 you know a lot of countries, including most recently China, 0:06:07.320 --> 0:06:10.360 have tied their currencies to the dollar, and so they 0:06:10.400 --> 0:06:13.200 have to buy a lot of dollar based assets to 0:06:13.279 --> 0:06:17.320 maintain that relationship. But you know, the day is coming 0:06:17.560 --> 0:06:21.320 um uh, and we we never know when when the 0:06:21.600 --> 0:06:26.440 world starts finding other places uh to um uh put 0:06:26.480 --> 0:06:31.280 its um uh savings rather than a low return uh 0:06:31.640 --> 0:06:35.680 US economy and then it becomes tougher for us to 0:06:35.920 --> 0:06:39.520 fund are the circus savings we borrow on terms that 0:06:39.520 --> 0:06:42.960 have been extremely attracted to us for a long long time. 0:06:55.200 --> 0:06:57.400 It would be good to speak to someone with experience 0:06:57.440 --> 0:06:59.960 on going with extended trips of leaders. That would be 0:07:00.080 --> 0:07:03.159 Michael McKee, wh or a few years ago used to 0:07:03.200 --> 0:07:07.720 be on the White House uh A circuit here as well. 0:07:08.120 --> 0:07:11.160 I I look, Michael McKee at the exhaustion of the trip. 0:07:11.280 --> 0:07:13.960 Is it real? Is that come with absolutely? I mean, 0:07:14.000 --> 0:07:16.720 the hours are very long, you fly all night, you 0:07:16.760 --> 0:07:19.360 get to where you're going, the Middle East in this case, 0:07:19.640 --> 0:07:22.280 and you've got to start functioning immediately. The president has 0:07:22.280 --> 0:07:24.760 a bed, but nobody else. Nobody else has a bed. 0:07:25.560 --> 0:07:28.160 Your your jet lagged, You're tired, and the days are long. 0:07:28.440 --> 0:07:31.040 David Girl, I believe we have a headline out crossing 0:07:31.040 --> 0:07:33.720 the Bloomberg are Islamic state claiming responsibility for the attack 0:07:33.720 --> 0:07:35.600 in Manchester last night that came at the end of 0:07:35.600 --> 0:07:37.640 a concert by Ariana Grande. We've been following this throughout 0:07:37.680 --> 0:07:39.240 the morning. We'll bring you updates throughout the morning here 0:07:39.280 --> 0:07:41.880 on Bloomberg surveillance. This is according to site, and that's 0:07:41.880 --> 0:07:45.040 a website of professionals who monitor social media chatter web 0:07:45.080 --> 0:07:48.240 chatter about terrorist groups. We welcome all of you worldwide. 0:07:48.280 --> 0:07:51.480 This is Bloomberg Surveillance on Bloomberg Radio coast to coast. 0:07:51.520 --> 0:07:55.920 So we say good morning to Bloomberg Boston FM in 0:07:56.000 --> 0:07:59.800 Washington early morning and San Francisco in the Bay Area 0:08:00.000 --> 0:08:03.760 over a special good morning to all of you, uh 0:08:03.800 --> 0:08:06.480 in Europe and in the United Kingdom as well. On 0:08:06.560 --> 0:08:10.440 London Radio, Michael McKee is here, uh, you know, to 0:08:10.480 --> 0:08:12.720 talk about the president's trip and offer go to Rome. 0:08:13.200 --> 0:08:16.600 But much more, Michael McKee about the budget. You've got 0:08:17.000 --> 0:08:20.120 detailed notes. What was the thing that stuck out for 0:08:20.200 --> 0:08:24.480 you in your note taking on this political document of 0:08:24.520 --> 0:08:28.880 the president? Well, from the perspective I bring to it 0:08:28.880 --> 0:08:33.360 of an economist, the Rosie scenario that the administration assumes 0:08:33.400 --> 0:08:38.840 three growth from with no credible way of getting there. 0:08:39.280 --> 0:08:42.360 Not only that they assume three percent growth and unemployment 0:08:42.360 --> 0:08:46.240 goes up, uh, so much for the Phillips curve. So 0:08:46.520 --> 0:08:49.560 at this point, uh, it's kind of hard to take seriously. 0:08:49.679 --> 0:08:54.240 Larry Summers out with an interesting moments ago, uh, noting 0:08:54.280 --> 0:09:00.480 that they double count the tax savings that the tax 0:09:00.559 --> 0:09:03.920 cuts they propose will create a lot of growth and 0:09:04.200 --> 0:09:08.040 at the same time will fill in the budget hole 0:09:08.600 --> 0:09:11.480 caused by the tax cuts. And he called that ludicrous. 0:09:11.640 --> 0:09:14.200 With within this in Stan Calendar writing in Forbes has 0:09:14.440 --> 0:09:17.200 been a good friend of the show. Was made very 0:09:17.200 --> 0:09:21.240 clear this is just simply undoable in your experience when 0:09:21.280 --> 0:09:26.160 you try to quote unquote make budget cuts and operational government, 0:09:26.200 --> 0:09:30.560 not entitlements. How much is a painful cut? How much? 0:09:30.720 --> 0:09:33.400 Somebody asked me this last night. What's to the bone 0:09:34.000 --> 0:09:37.440 in the fiscal world? Is it? Two? Is that the 0:09:38.400 --> 0:09:40.600 cuts we're talking about, you have to take it program 0:09:40.640 --> 0:09:44.600 by program. Uh. The way Washington works normally, what you 0:09:44.679 --> 0:09:46.320 talk about when you talk about a cut is a 0:09:46.320 --> 0:09:50.400 reduction in the rate of increase. Uh. The government continues 0:09:50.440 --> 0:09:53.240 to spend more money because the United States continues to 0:09:53.280 --> 0:09:56.200 get bigger, more and more people involved, and of course 0:09:56.280 --> 0:10:01.360 the bureaucratic comparative to continually raise their own budgets. Uh. 0:10:01.480 --> 0:10:05.440 So if you're talking about actual reductions that would probably 0:10:05.840 --> 0:10:07.520 be painful, then you have to get into the question 0:10:07.559 --> 0:10:09.800 of whether a program is worthwhile or working. And that's 0:10:10.400 --> 0:10:13.680 much of the argument from this Office of Management and 0:10:13.720 --> 0:10:16.559 budget that a lot of these programs don't work and 0:10:16.640 --> 0:10:19.320 aren't worth funding. We've talked about assumptions. Just a moment 0:10:19.400 --> 0:10:22.080 ago strikes me that the director of the OMBA mcmilvany, 0:10:22.160 --> 0:10:24.360 is making a huge one here when he expects the 0:10:24.400 --> 0:10:27.040 House version of the Republican healthcare bill to get through. 0:10:27.080 --> 0:10:29.840 He's really counting on that for this to work. Absolutely. 0:10:30.520 --> 0:10:33.400 The budget assumes eight hundred and sixty billion dollars in 0:10:33.520 --> 0:10:38.720 Medicaid cuts. The budget assumes that there will be the 0:10:38.840 --> 0:10:43.280 rollback of the Obama Care taxes that were imposed on 0:10:43.360 --> 0:10:47.720 the wealthy. So yes, he's he This all assumes both 0:10:48.400 --> 0:10:52.240 that they will pass the rollback of Obamacare, pass trump Care, 0:10:52.280 --> 0:10:55.079 if you want to call it that, and cut taxes 0:10:55.600 --> 0:11:00.480 h to the levels that the administration is has proposed 0:11:00.960 --> 0:11:03.880 to bring Congressman Jan Chikowski, she represents the ninth district 0:11:04.040 --> 0:11:07.000 in Illinois, Democratic congressman on the House budget me, you're 0:11:07.040 --> 0:11:11.640 not being accurate. The congresswoman represents my mother's heist there 0:11:12.200 --> 0:11:16.719 Trier High School, when that Illinois. That's the correct specificity 0:11:16.800 --> 0:11:19.320 is key here, odd surveillance. Jeensickowski joining us on our 0:11:19.320 --> 0:11:20.840 phone line is great to have you with us. You're 0:11:20.880 --> 0:11:22.920 out with this statement here in advance of the budget 0:11:22.920 --> 0:11:25.839 release this morning, I say you will resist this outrageous 0:11:25.840 --> 0:11:29.079 proposal every step of the way. I I assume you're 0:11:29.080 --> 0:11:32.440 regarding this budget is dead on arrival. Well, I hope 0:11:32.440 --> 0:11:34.720 it's dead on arrival. I certainly do. I mean, this 0:11:34.840 --> 0:11:39.359 is a budget of broken promises and then new promises 0:11:39.400 --> 0:11:42.160 that he can't keep. Like these massive tax cuts that 0:11:42.240 --> 0:11:45.960 go for the wealthiest are actually going to create economic growth. 0:11:46.280 --> 0:11:50.040 We've been there, done that hasn't hasn't worked. And meantime, 0:11:50.080 --> 0:11:52.480 it's going to be on the backs of people who 0:11:53.000 --> 0:11:56.839 need their Social Security and their Medicare and their Medicaid. 0:11:57.480 --> 0:12:00.520 It's it's really remarkable. It's going to uh, you know, 0:12:00.559 --> 0:12:03.800 the very people that he promised to UH to help 0:12:04.360 --> 0:12:07.120 um and to to make life better for and make 0:12:07.160 --> 0:12:10.720 America great for a great again are the ones that 0:12:10.760 --> 0:12:12.959 are actually going to be hurt the most. Something that 0:12:13.080 --> 0:12:15.760 Director mulvanny said yesterday and his briefing with reporters is 0:12:16.280 --> 0:12:18.360 a real problem here is the efficacy of a lot 0:12:18.360 --> 0:12:21.240 of these programs. Why should a taxpayer be paying money 0:12:21.240 --> 0:12:22.880 toward a program that's only I think he's had six 0:12:22.920 --> 0:12:26.480 percent effective. How does Congress, how do you and others 0:12:27.120 --> 0:12:29.640 look and improve the efficacy of of programs? I gather 0:12:29.679 --> 0:12:31.040 you probably don't have a lot of sympathy with the 0:12:31.120 --> 0:12:33.680 argument that he that he's making there, But how about 0:12:33.679 --> 0:12:35.800 the broader point here that there are programs that could 0:12:35.800 --> 0:12:38.800 be working better? Well? First of all, when he talked 0:12:38.880 --> 0:12:44.160 about about a month ago about meals on wheels that 0:12:44.240 --> 0:12:48.040 there's no proof that those programs work, you ask the 0:12:48.120 --> 0:12:51.560 people who are waiting in their homes every day I've 0:12:51.559 --> 0:12:55.959 delivered those meals on wheels two people. Um, those programs 0:12:56.120 --> 0:12:59.679 keep people out of nursing homes, which are more expensive. 0:13:00.160 --> 0:13:04.400 He said that nutrition programs for children at at school 0:13:04.679 --> 0:13:08.720 that there's no evidence that they really helped to increase learning. 0:13:08.760 --> 0:13:11.880 Are you kidding me? So? First of all, as a 0:13:11.960 --> 0:13:15.959 Democrat who believes that government programs work, yes, I want 0:13:16.000 --> 0:13:19.480 to make sure that they are effective, and I'm willing 0:13:19.520 --> 0:13:23.120 to look at that. But really, I mean that those 0:13:23.200 --> 0:13:27.240 kinds of cons and believe me, in newchur Township or 0:13:27.280 --> 0:13:30.120 New Tour High School is there are people who are 0:13:30.160 --> 0:13:34.199 waiting for those meals right now? I would suggest congresswoman 0:13:34.240 --> 0:13:37.880 out of Sullivan High School and with the Illinois blood 0:13:37.920 --> 0:13:41.440 that you have, that the redrawn ninth district has people 0:13:42.160 --> 0:13:46.120 that support a Republican ethos, a conservative ethos, even though 0:13:46.160 --> 0:13:51.280 it is a very liberal district. What permeates the Trump theology, 0:13:51.360 --> 0:13:53.719 if you will, is we've got to figure out how 0:13:53.720 --> 0:13:57.000 to get these people back on jobs, particularly with his 0:13:57.120 --> 0:14:01.400 food stamps. What is the reality you've seen about the 0:14:01.440 --> 0:14:05.640 snap program, the food stamp program, and the idea that 0:14:05.679 --> 0:14:08.000 we need to get people back on jobs. How do 0:14:08.040 --> 0:14:10.600 you dove tail that when you're on the opposite side 0:14:10.600 --> 0:14:13.959 of the debate. Well, first of all, the about half 0:14:14.040 --> 0:14:18.640 the people that that get nutrition assistance through the food 0:14:18.679 --> 0:14:22.960 stamp program, the stamp program are children, and so certainly 0:14:23.320 --> 0:14:26.960 if parents are going to be able to um, have 0:14:27.000 --> 0:14:29.440 a raise of family and have a little bit of 0:14:29.440 --> 0:14:31.960 help to put food on the table while they're looking 0:14:31.960 --> 0:14:34.440 for their job or trying to get job training, which 0:14:34.440 --> 0:14:37.520 by the way, is also caught in this budget, I 0:14:37.560 --> 0:14:41.240 think it's pretty hard to explain to them that, you know, 0:14:41.280 --> 0:14:44.240 a key element of this budget plan will be huge 0:14:44.360 --> 0:14:50.240 tax breaks, mostly that go to the wealthiest Americans. Um. 0:14:50.400 --> 0:14:53.120 You know, as they said this, this kind of idea 0:14:53.160 --> 0:14:56.800 of trickled down is something that has been tried over 0:14:56.880 --> 0:14:59.640 and over and over again. And when you cut the 0:15:00.040 --> 0:15:03.320 state tax, which goes to just a few people, really 0:15:03.840 --> 0:15:07.240 I think I think feeding helping to to make sure 0:15:07.280 --> 0:15:08.880 that there's food on the table. And by the way, 0:15:09.120 --> 0:15:12.600 those programs most people stay on them for a year 0:15:12.880 --> 0:15:16.840 or left. It's kind of a bridge over troubled waters. 0:15:17.120 --> 0:15:18.720 Let's do this. We are out of time today with 0:15:18.760 --> 0:15:21.400 the horrific news flow we see here, particularly with a 0:15:21.440 --> 0:15:26.320 tragedy in Manchester, United Kingdom. Cox Cocaswoman Chikowski, we look 0:15:26.360 --> 0:15:28.760 forward to speaking to you again on the shores of 0:15:28.840 --> 0:15:32.000 Lake Michigan, the Ninth District north of Chicago, and then 0:15:32.080 --> 0:15:46.920 off to the west as well. Just seeing the footage 0:15:46.920 --> 0:15:50.280 here at Eva Gerner Studios of the two Air Force ones, 0:15:51.040 --> 0:15:53.600 that's how many people are on the trip in I 0:15:53.680 --> 0:15:55.680 believe in tel Aviv. I may be wrong on that. 0:15:55.720 --> 0:15:57.720 I can't tell where it is Jerusalem or Tel Aviv, 0:15:57.800 --> 0:16:01.520 but they're both out waiting there to fly the President, David, 0:16:01.560 --> 0:16:04.440 why don't you bring in the ambassador who is a 0:16:04.640 --> 0:16:10.240 unique distinction of being ambassador to Israel in Egypt decade now, 0:16:10.280 --> 0:16:12.480 a lecturer and professor at the Woodrow Wilson School of 0:16:12.480 --> 0:16:15.360 Public International Fairs at Princeton Universe. That's Ambassador Daniel Kurtzer, 0:16:15.360 --> 0:16:17.040 who joins us on our phone line. Since ambassad Kurz 0:16:17.080 --> 0:16:18.960 to this was a quick trip, much has been made 0:16:18.960 --> 0:16:21.040 of that, the brevity of some of these visits the President. 0:16:21.080 --> 0:16:23.720 The President made in Israel today, What do we learn 0:16:23.800 --> 0:16:26.760 about his attitude towards the Middle East peace process from 0:16:26.760 --> 0:16:29.240 this visit to Israel, his meeting with the President of 0:16:29.240 --> 0:16:33.640 Boss Palton Authority as well well. He reaffirmed during his 0:16:33.680 --> 0:16:36.880 speech he just gave very strong commitment to try to 0:16:36.920 --> 0:16:40.680 reach peace, indicated that in his conversations with President of 0:16:40.720 --> 0:16:44.240 Boston Prime Minister Nataniello, both of them were ready to 0:16:44.280 --> 0:16:48.240 reach forward. But he provided a very few details of 0:16:48.800 --> 0:16:52.840 those discussions. That may be a good thing. The longer 0:16:52.920 --> 0:16:56.920 he can continue to the dialogue in in quiet, rather 0:16:56.960 --> 0:17:02.320 than try to publicly broadcast different issues, he may be 0:17:02.360 --> 0:17:05.040 able to make incremental progress. But we really don't know 0:17:05.880 --> 0:17:08.840 very much about either the President's view of how to 0:17:08.880 --> 0:17:11.880 make peace. Well, what's the two sides hold him? What's 0:17:11.920 --> 0:17:13.639 your sense of how the speech he made in Saudi 0:17:13.640 --> 0:17:17.000 Arabia over the weekend rang out through Israel. That speech 0:17:17.000 --> 0:17:19.680 in which he called for suiting nations largely to rally 0:17:19.760 --> 0:17:23.000 together to fight against Iran and to purge themselves of 0:17:23.480 --> 0:17:26.320 terrorist entities within within their populations. How do you think 0:17:26.359 --> 0:17:30.479 that played in Israel? Well, I think it was music 0:17:30.840 --> 0:17:34.919 to the Israeli ears because he associated himself and the 0:17:35.000 --> 0:17:39.480 United States with all of the same enemies that Israel 0:17:39.520 --> 0:17:45.360 has identified Iran terrorists, countries that support terrorists, and uh, 0:17:45.400 --> 0:17:48.840 there's really no distance between the United States and Israel 0:17:49.240 --> 0:17:51.800 on those issues. What made the speech interesting is that 0:17:51.880 --> 0:17:56.040 he did it in front of forty or fifty Arab 0:17:56.160 --> 0:18:00.240 and Muslim leaders and in a sense conveyed the idea 0:18:00.359 --> 0:18:03.080 that we now have a larger group of countries, not 0:18:03.240 --> 0:18:06.840 just the US and Israel, that are ready to act 0:18:06.840 --> 0:18:10.720 affirmatively against terrorism. And I think that was the key 0:18:10.760 --> 0:18:13.760 takeaway from that speech. Where do we go from from here? 0:18:13.760 --> 0:18:16.080 You mentioned that the speeches that he delivered were largely 0:18:16.119 --> 0:18:18.120 short on specific I know the Secretary of State Rex 0:18:18.200 --> 0:18:20.440 Tillerson was asked if there might be a trilateral meeting 0:18:20.440 --> 0:18:23.040 here with the President of palacting authority at the Israeli 0:18:23.040 --> 0:18:24.760 Prime Minister and the President of the United States, and 0:18:24.840 --> 0:18:27.560 in the future. He demurred. He didn't answer that question. 0:18:27.800 --> 0:18:30.120 How do you go from the rosie rhetoric we heard 0:18:30.160 --> 0:18:33.679 from the president to action here after what several years now, 0:18:33.720 --> 0:18:37.440 if they're being very little process on peace. Well, Frankly, 0:18:37.680 --> 0:18:41.680 I'm actually buoyed by the fact that the administration did 0:18:41.720 --> 0:18:44.360 not seek some kind of the media takeaway. I mean, 0:18:44.359 --> 0:18:48.359 there's always just tendency to look for a deliverable, you know, 0:18:48.400 --> 0:18:52.359 what can what we announce as some big outcome of visit. 0:18:52.920 --> 0:18:54.920 And I think there was a lot of speculation before 0:18:54.920 --> 0:18:58.000 the visit that the president would want to announce a 0:18:58.080 --> 0:19:01.480 trilateral meeting or some it of some sort involving the 0:19:01.480 --> 0:19:05.040 Arab States, and that didn't happen. Now, it's possible it 0:19:05.080 --> 0:19:08.280 didn't happen because she tried and failed, But it's also 0:19:08.320 --> 0:19:11.520 possible because he realized that this is a very complicated 0:19:11.760 --> 0:19:16.320 set of issues and you can't go for short term gains. 0:19:16.359 --> 0:19:18.600 You really have to be in it for the long haul. 0:19:19.240 --> 0:19:21.760 So we'll see over the next period of what the 0:19:21.760 --> 0:19:26.320 next steps are. He'll probably send out his envoy, Jason Greenblatt. 0:19:26.720 --> 0:19:29.000 We now have an ambassador in place in Israel who 0:19:29.000 --> 0:19:31.520 can move this issue on a day to day basis 0:19:32.160 --> 0:19:35.600 uh and if those next steps indicate a continuation of 0:19:35.640 --> 0:19:38.399 the dialogue, then I think because we have some reason 0:19:38.440 --> 0:19:40.480 to believe that this will go on for a while. 0:19:41.119 --> 0:19:43.439 Ambassador to thank you so much. Daniel Kurtzer with us 0:19:43.440 --> 0:19:46.800 from the Woodrow Wilson School as well the former Ambassador 0:19:46.840 --> 0:19:50.240 of the United States to Israel, David what a more. 0:19:50.840 --> 0:19:54.879 The news flow is just an extraordinary, incredible beginning with 0:19:54.920 --> 0:19:57.040 that a terrorist attack. We've been covering their threat, the 0:19:57.040 --> 0:19:58.840 point that took place that last evening, and of course 0:19:58.880 --> 0:20:00.840 the presence visit to Israel apping up. Now he's back 0:20:00.840 --> 0:20:02.760 at the King David Hotel. He will leave for Rome. 0:20:02.840 --> 0:20:05.600 I believe in about an hour's a time. He'll head there, 0:20:05.720 --> 0:20:07.240 have an audience with with the Pope, and then he 0:20:07.280 --> 0:20:10.280 presses onward to two major summit, the first being the 0:20:10.320 --> 0:20:14.000 NATO Summit in Brussels and then the seven Summit in Italy. 0:20:14.040 --> 0:20:15.600 Is still a long way for this present to go 0:20:15.640 --> 0:20:17.680 before he makes his way back to Washington or Kevin 0:20:17.720 --> 0:20:21.760 Cirelli in Jerusalem. Touching on the domestic challenges of Washington 0:20:22.440 --> 0:20:31.920 as well. Brunt You by Bank of America Mary Lynch 0:20:32.200 --> 0:20:37.679 with virtual reality virtually everything will change. Discover opportunities in 0:20:37.720 --> 0:20:42.320 a transforming world. VI of a mL dot Com slash vr, 0:20:43.200 --> 0:20:52.440 Mary Lynch, Pierced Fenner and Smith Incorporated. There's something new 0:20:52.480 --> 0:20:55.800 from Bloomberg. It's called Lens. Starting right now, you can 0:20:55.960 --> 0:20:59.760 use the Bloomberg iOS app off your iPhone or iPad, 0:21:00.359 --> 0:21:04.280 or our new Google Chrome extension to read any news 0:21:04.280 --> 0:21:08.640 story on any website, scan it, and then instantly see 0:21:08.680 --> 0:21:12.800 the news stories relevant market data from Bloomberg. In addition, 0:21:13.119 --> 0:21:16.200 see all the bios of the key people mentioned in 0:21:16.240 --> 0:21:19.480 the story. It's called lens, and it is just that, 0:21:19.600 --> 0:21:22.720 a lens into the people and the data of any 0:21:22.800 --> 0:21:26.679 story you may be reading. Again. Lens brings you the 0:21:26.720 --> 0:21:30.200 power of Bloomberg's news and data. Download or io s 0:21:30.240 --> 0:21:33.560 app or search for the Bloomberg extension at the Chrome 0:21:33.680 --> 0:21:37.120 store to try lens out. Learn more at Bloomberg dot 0:21:37.160 --> 0:21:45.440 Com slash Lens. I've been waiting for this interview David 0:21:45.480 --> 0:21:49.679 Gura sent the moment I heard that Mr Fields was out. 0:21:50.280 --> 0:21:52.960 My opinion doesn't matter on this, but we do have 0:21:53.000 --> 0:21:55.919 the considered opinion of the cars are. If you're going 0:21:55.960 --> 0:21:57.800 to Google and type up cars are you get the 0:21:57.840 --> 0:22:01.879 Wikipedia for one, s rat and Steve Rattner, of course, 0:22:01.880 --> 0:22:05.679 appears often with us. He has a wonderful journalist integrity 0:22:05.720 --> 0:22:09.400 along with his financial knowledge, and was selected at one 0:22:09.400 --> 0:22:13.920 point to save Detroit. You didn't have to save Ford 0:22:14.040 --> 0:22:17.520 when you were in the trenches of being a czar, 0:22:17.720 --> 0:22:21.360 which is a phrase you and I hate. How distinctive 0:22:21.680 --> 0:22:25.240 was dear Born? How different was Bill Ford, the family 0:22:25.359 --> 0:22:28.560 and the company. It's something that fascinated me because you 0:22:28.600 --> 0:22:31.440 had these companies that were essentially identical in every respect 0:22:31.480 --> 0:22:34.119 in terms of their customers, their footprint, all these things. 0:22:34.440 --> 0:22:36.520 But yet Ford did not need our help, and the 0:22:36.520 --> 0:22:39.760 others did, and it was simply a question of management. 0:22:39.800 --> 0:22:43.480 Ford had better management. They anticipated the crisis, they put 0:22:43.480 --> 0:22:46.960 money in the bank, and of course, famously for Bill, 0:22:47.040 --> 0:22:49.920 Ford reached out to Alan Mollallely, who, other than owning 0:22:49.920 --> 0:22:52.639 a car, probably knew nothing more about cars than that, 0:22:52.720 --> 0:22:54.840 and he turned out to be one of the great 0:22:54.880 --> 0:22:57.480 CEOs of our generation. We'll talk a bit more about that, 0:22:57.520 --> 0:22:59.879 the shadow into which Mark Fields stabbed aln Milelly of 0:23:00.000 --> 0:23:02.199 of Boeing Vintage. Coming to to Dearborn, what did he 0:23:02.240 --> 0:23:05.640 do well? For Ford? He changed the culture? What what 0:23:06.240 --> 0:23:09.360 Bill Ford always felt was that Detroit was way too insular, 0:23:09.480 --> 0:23:12.960 that it was industry people talking, industry people playing golf 0:23:12.960 --> 0:23:15.520 of the industry people, and he wanted to shake Ford up, 0:23:15.560 --> 0:23:17.600 and he wanted an outsider who would bring a fresh 0:23:17.600 --> 0:23:20.440 perspective and a whole different management approach. And I think 0:23:20.480 --> 0:23:24.480 you see that courage being demonstrated yet again here where 0:23:24.480 --> 0:23:28.120 he's reached out to another non traditional auto executive and said, 0:23:28.400 --> 0:23:30.399 this industry is in the bigger in the midst of 0:23:30.440 --> 0:23:33.040 actually a much bigger transformation than even what we dealt 0:23:33.080 --> 0:23:35.960 with in two thousand and nine, and he just wanted 0:23:35.960 --> 0:23:38.040 to have fresh leadership to do that. You mentioned that 0:23:38.080 --> 0:23:41.679 the perceptiveness anticipating the financial crisis to come. Are we 0:23:41.760 --> 0:23:43.960 seeing that here as well? Is is forward making a 0:23:44.000 --> 0:23:47.680 calculated smart step in your estimation looking to driverless cars 0:23:47.680 --> 0:23:50.280 to self driving vehicles, it's not. Yes, I think they are, 0:23:50.320 --> 0:23:53.000 but remember it's not just driverless cars. There are three 0:23:53.040 --> 0:23:56.240 things happening that are going to transform this industry. Driverless 0:23:56.240 --> 0:24:00.119 cars are one, Electrification is a second, but probably the 0:24:00.119 --> 0:24:02.920 biggest one is ride sharing. The average cars only used 0:24:02.960 --> 0:24:05.959