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Speaker 2: Welcome to the Wednesday edition of Balance of Power here
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Speaker 2: the studio. Big News on CPI Day. That's where we start.
Speaker 2: And boy, the overlap with politics seems to be getting
Speaker 2: heavier by the minute. Keep in mind today Donald Trump's
Speaker 2: going to roll out his economic plan least as billed
Speaker 2: by the campaign on Friday. Kamala Harris is going to
Speaker 2: do the same thing on the eve of the Democratic
Speaker 2: National Convention. Where are we on taxes? Where are we
Speaker 2: on so many questions, including an approach to the Federal Reserve,
Speaker 2: and of course the almighty cost of goods. Is there
Speaker 2: any sunlight between Kamala Harris and Joe Biden. We'll find out,
Speaker 2: I guess Friday. And the fact is, maybe it doesn't
Speaker 2: matter because the news keeps looking pretty good, at least
Speaker 2: if you're looking for the opportunity, maybe between now and November,
Speaker 2: to declare victory in the fight over inflation. Stuart Paul
Speaker 2: must be getting excited listening to this. He's with us
Speaker 2: right now on the CPI Day Live from New York,
Speaker 2: Bloomberg Economics US economists. Great to see, is Stuart. The
Speaker 2: headline pretty encouraging if your name is Kamala Harris. Core
Speaker 2: inflation ease is a fourth month sealing a FED rate cut?
Speaker 2: What else do we need to know?
Speaker 3: It was a pretty good report for the Fed. Headline
Speaker 3: inflation came in just a touch lower than folks expected.
Speaker 3: That allowed annual inflation to cool to two point nine
Speaker 3: percent from three percent. As you said, that's definitely good
Speaker 3: news for Kamala Harris, who is being painted largely with
Speaker 3: the same brush in terms of attribution of economic outcomes
Speaker 3: as President Biden has been painted with. Within the CPI
Speaker 3: report and One of the reasons why this is good
Speaker 3: news for the FED. A lot of the things that
Speaker 3: people finance and the things that have prices that are
Speaker 3: very much so directly affected by FED policy, things like cars,
Speaker 3: things like appliances and televisions, all of those are seeing
Speaker 3: price declines. Where there still are inflationary pressures are in
Speaker 3: a lot of the categories that the FED can't entirely control,
Speaker 3: or at least not very directly. So still seeing a
Speaker 3: lot of inflation. Pressures in rents and home prices do
Speaker 3: in large parts to a decade of underbuilding. The Biden
Speaker 3: administration is trying to combat that, issuing an one hundred
Speaker 3: million dollar grant to support new home construction. That is
Speaker 3: just a drop in the bucket when we think about
Speaker 3: forty six trillion dollars in residential real estate wealth in
Speaker 3: the country. But again, it's home price pressures and pressures
Speaker 3: in rent that's supporting inflation. Also seeing a lot of
Speaker 3: inflation in auto insurance, and you could end up seeing
Speaker 3: that attributed to corporate greed out on the campaign trail.
Speaker 3: That's a common refrain that we've heard from Kamala Harris.
Speaker 3: But this is really a large, largely a story of
Speaker 3: catch up inflation. We saw the run up in auto
Speaker 3: prices when cars were in short supply during the pandemic.
Speaker 3: When the replacement cost of autos gets higher, so to
Speaker 3: will insurance premiums. That's a lot of what's booing inflation
Speaker 3: right now auto insurance.
Speaker 2: This is really interesting, and I'm glad that you pointed out, Stewart,
Speaker 2: the matter of shelter costs, because even if this economy
Speaker 2: is going into a slowdown, that doesn't seem to be
Speaker 2: impacting what we're paying to live. And it's interesting the
Speaker 2: jump in shelter, the largest category within services, didn't matter
Speaker 2: if you were talking about ownership or rent. Am I
Speaker 2: reading that right. Both are up four tenths after going
Speaker 2: up in June. Here, this is going to be very
Speaker 2: difficult for anybody running for office to get to that's right.
Speaker 3: The thing that folks need to keep in mind is
Speaker 3: that mortgage rates were brought down below three percent when
Speaker 3: the Fed cut rates down to the bone following the
Speaker 3: onset of the COVID nineteen pandemic. When everybody refinanced their mortgage,
Speaker 3: it now makes it basically prohibitively expensive for them to
Speaker 3: list their homes in moves. So again, right, homes are
Speaker 3: at supply exactly, so homes are still in short supply,
Speaker 3: and so we're still seeing those pressures on both home
Speaker 3: ownership costs and on rents. And again, politicians can try
Speaker 3: to combat that as best as they can, but it's
Speaker 3: going to be difficult after a decade of underbuilding.
Speaker 2: We got a statement from the White House today and
Speaker 2: you can almost just I mean, don't even look down.
Speaker 2: Just tell me what you think it says, because that
Speaker 2: second paragraph starts the same way every month. It doesn't
Speaker 2: seem to matter how good the news is. Prices are
Speaker 2: still too high. Period. This is a White House that
Speaker 2: is desperate to not be caught in the act of celebrating.
Speaker 2: Could that change between now and the election? I mean,
Speaker 2: we're noting in the statement inflation has fallen below three
Speaker 2: percent core inflation, lowest level since April twenty one. When
Speaker 2: can this White House, or god forbid, Kamala Harris say
Speaker 2: we made it.
Speaker 3: It's gonna be really tough. It's going to be a
Speaker 3: really tough to declare victory while at the same time
Speaker 3: recognizing that over the past four years, overall prices have
Speaker 3: increased over twenty percent, so the purchasing power of the
Speaker 3: cash that folks have had in their savings account is
Speaker 3: now reduced by a fifth relative to where they were
Speaker 3: when the Biden administration took office. It's not the administration's
Speaker 3: fault solely, of course. Again, rates were cut to the bone.
Speaker 3: We had stimulus and multiple rounds of direct checks distributed
Speaker 3: under both Trump and and we had tax reform under Trump.
Speaker 3: This isn't a Biden this isn't a consequence solely of
Speaker 3: Biden era policies. But it did take place on his watch.
Speaker 3: And if you were to just simply use, say the
Speaker 3: ray Fair model of predicting election outcomes, Kamala Harris would
Speaker 3: end up with just about a forty eight forty nine
Speaker 3: percent share of the two party poll. I'm interested to
Speaker 3: hear what we're gonna hear in the next segment about
Speaker 3: her polling in Florida, but and just how much she's
Speaker 3: going to bear that burden of responsibility for economic outcomes.
Speaker 3: But it would be a little bit tone deaf to
Speaker 3: say that that victory has been achieved in the fight
Speaker 3: against inflation.
Speaker 2: I think I've succeeded in turning Stuart Paul into a
Speaker 2: political analyst. What do you think, Bloomberg Economics US economist
Speaker 2: Stuart Great to see you and thank you on a
Speaker 2: CPI day. This is important stuff and we're gonna, yes,
Speaker 2: we're gonna move right into retail sales later this week.
Speaker 2: They're gonna be more data points, certainly before we get
Speaker 2: to Jackson Hole in a FED meeting in September. But
Speaker 2: the trajectory appears to be in place here, underscoring the
Speaker 2: argument for a cut in September just more a question
Speaker 2: of how big it's going to be. Keeping tabs on
Speaker 2: the trail here, we've been talking about this through the
Speaker 2: eyes of the campaign. Donald Trump will be fleshing out
Speaker 2: his economic plans four PM Ashville, North Carolina, and we'll
Speaker 2: of course let you know on the late edition of
Speaker 2: Balance of Power what he's talking about here, essentially preempting
Speaker 2: we're trying to Kamala Harris's big speech on Friday. They're
Speaker 2: both doing it North Carolina. She's going to be in
Speaker 2: Raleigh with her economic proposals today though she's often running
Speaker 2: with Joe Biden, and you know they're going to be
Speaker 2: talking about the cost of goods inflation. This keeps coming up.
Speaker 2: It's the number one issue what are your plans for
Speaker 2: the economy as we face a slow down here in
Speaker 2: a world of interest rate cuts instead of hikes. Bringing
Speaker 2: us to the swing state of Florida with a smirk,
Speaker 2: is David Paleologos. It's been some time since we've had
Speaker 2: a chance to talk with the man behind the Suffolk
Speaker 2: University Political Research Center, and everybody's talking about you, David
Speaker 2: this week because of this Florida poll that you guys
Speaker 2: put up, making us all wonder what the heck is
Speaker 2: this map actually going to look like once the race
Speaker 2: settles here coming out of Chicago, Welcome back to Bloomberg, David.
Speaker 2: It's good to have you. I don't want to just
Speaker 2: dwell completely on Florida, but that is why you're in
Speaker 2: the news this week, and I just wonder as you
Speaker 2: hear the conversation we're coming out of here on the economy.
Speaker 2: Trump speaks today Kamala Harris on Friday. How important are
Speaker 2: these economic plans going to be for getting to folks
Speaker 2: who haven't made up their mind yet.
Speaker 4: Well, the timing is really interesting, you know. In the poll,
Speaker 4: we looked at people who said the economy or inflation
Speaker 4: was the number one issue, and in Florida. Trump was
Speaker 4: beating Harris just among those voters by thirty points, sixty
Speaker 4: to thirty in Florida, and I'm in immigration voters who
Speaker 4: say immigration is the most important issue.
Speaker 5: Trump was winning eighty six to six.
Speaker 4: So Kamala Harris has drawn a lot of criticism for
Speaker 4: not doing Q and A and press availability. But I
Speaker 4: think what's going on is, since you got the nomination,
Speaker 4: she's she's doing research to figure out what her plan
Speaker 4: is going to be separate from Joe Biden and how
Speaker 4: she can sort of couch that difference and thread the needle.
Speaker 2: Interesting. I had a conversation with Democratic polsters Selinda Lake.
Speaker 2: I always picture you guys in your own special club here.
Speaker 2: You must have a secret handshake or something, And she
Speaker 2: was talking about this idea of Kamala Harris making Florida viable,
Speaker 2: making it competitive. David, Here's what she said.
Speaker 6: Sara's campaign is very disciplined. We stay focused on the
Speaker 6: battleground state. Trying to go into Florida, it's like trying
Speaker 6: to go into Western Europe. It's so many media markets,
Speaker 6: it's so expensive. This is a team that will keep
Speaker 6: their eye on the prize. We have our seven battleground states.
Speaker 6: We're going to win those states and we're going to concentrate.
Speaker 2: On So, David, tell us what you are learning in
Speaker 2: the Sunshine State here and how much attention we should
Speaker 2: be paying to states like Florida that aren't part of
Speaker 2: the swing states that most polls are focused on.
Speaker 5: Yeah, so what we've picked up.
Speaker 4: And this poll was on in August seventh to the eleventh,
Speaker 4: so it's pretty the ink is still pretty dry on
Speaker 4: this one. Is you know it's closer, Like going into
Speaker 4: this poll, like you have to separate yourself from being
Speaker 4: a poster and just a voter. I was looking at
Speaker 4: this not thinking it was going to be a close
Speaker 4: race for a bunch of different reasons. Florida has purged
Speaker 4: a million Democratic voters since twenty twenty off the rolls,
Speaker 4: such that the active vote account is plus one million
Speaker 4: for Republicans. So I didn't really expect it to be close.
Speaker 5: But it is.
Speaker 4: And the reason it is is because Kamala Harris has
Speaker 4: opened up a twelve point lead among women and to
Speaker 4: kind of offset the twenty four point lead among men
Speaker 4: that Trump has and she's winning independent, so she still
Speaker 4: has a long way to go. There's only three percent undecided,
Speaker 4: So a five point lead for Trump in Florida looks
Speaker 4: pretty solid.
Speaker 5: And then it opens up the whole.
Speaker 4: Question of RFK, who's got the biggest block of votes
Speaker 4: after you know, Trump and Harris at five percent, and
Speaker 4: I don't think he's going to end up with five percent.
Speaker 4: So the question is where those voters are going to
Speaker 4: roll to.
Speaker 2: Well, you just said a lot, and I want to
Speaker 2: unpack some of this five point difference here in Florida.
Speaker 2: That in itself is news. I think we can argue,
Speaker 2: and you do have a four point four percent margin
Speaker 2: of error, just to give you a sense of what
Speaker 2: that actually looks like. Here, David, where was Joe Biden
Speaker 2: against Trump and Florida?
Speaker 5: Oh far, I mean it was like night and day.
Speaker 4: You know what we've seen with Joe Biden is he
Speaker 4: had just low enthusiasm. Even in our most recent national poll,
Speaker 4: it was a difference of people being excited for Joe
Speaker 4: Biden Russ very excited for Donald Trump. It was a
Speaker 4: twenty point difference. Now in Florida, it's pretty much wiped out.
Speaker 4: The amount of people who say they're voting for Kamala
Speaker 4: Harris are excited almost equally as they are for Donald Trump.
Speaker 5: So that's off the table. The excitement advantage that Trump
Speaker 5: had with Biden.
Speaker 2: Fascinating. So you mentioned the third parties RFK. You combine
Speaker 2: third party voters with so called double haters, and this
Speaker 2: is the mushy mital here, right, This is the area
Speaker 2: that these candidates can actually maybe pick off some votes. David,
Speaker 2: how large is that pool when you put him together?
Speaker 5: It's really large.
Speaker 4: You know, when you're talking about percentage points, and now
Speaker 4: we're talking about a five point lead, not a fifteen
Speaker 4: point lead. So it's a it's an amazing dynamic to dissect.
Speaker 4: I mean, RFK was winning ten percent of no Party
Speaker 4: of affiliations or independence ten percent. He was winning twelve
Speaker 4: percent of black voters in Florida. He's winning seventeen percent
Speaker 4: of independent women that Kamala Harris really needs to win over.
Speaker 4: She already has a fairly big lead among independent women.
Speaker 4: But RFK was winning seventeen percent of them. So when
Speaker 4: you look at RK dropping and you're seeing some of
Speaker 4: these percentages potentially rotating to Kamala Harris that potentially could
Speaker 4: see even a closer race. That doesn't mean that she's
Speaker 4: going to win. It just means that the way the
Speaker 4: dynamics are, it's a closer race than you would think.
Speaker 2: Spending time with David Paleologos at Suffolk University Political Research Center,
Speaker 2: David will Kamala Harris get a traditional convention bump out
Speaker 2: of Chicago next week.
Speaker 5: I think you have to expect it.
Speaker 4: I mean, we have to look at history and you know,
Speaker 4: and if that's the case, then her in the national
Speaker 4: polls will probably jump a couple of points to maybe
Speaker 4: plus seven or plus eight, and then some of the
Speaker 4: swing states maybe.
Speaker 5: Plus five six.
Speaker 4: And I think that's why the Florida polls make sense
Speaker 4: to me. You know, you've got that dynamic going on
Speaker 4: nationally and in the swing states, and you know, in Florida,
Speaker 4: a lot of people don't realize this, but Florida has
Speaker 4: a ballot question on legalized marijuana, recreational marijuana that's going
Speaker 4: to drive out young people. They have an abortion rights question,
Speaker 4: state wide abortion rights question, which is going to drive
Speaker 4: out women drive up women, which will then by default,
Speaker 4: will help Kamala Harris's campaign. So when you're polling, you
Speaker 4: kind of have to take each cycle and eat the
Speaker 4: dynamics that are going on in each state into account,
Speaker 4: and we're picking that.
Speaker 5: Up in the polling.
Speaker 2: David, I had to chuckle this morning. I was reading
Speaker 2: the Politico out of the State House in Boston, and
Speaker 2: apparently the governor and Lieutenant Governor Mara Heally and Lieutenant
Speaker 2: govern will be in Chicago attending the festivities next week,
Speaker 2: and your state auditor is going to be in control
Speaker 2: of the government while they're gone.
Speaker 5: Yeah, hold on to your wallet. I guess with the
Speaker 5: state unit are being in control.
Speaker 4: Uh, you know, I wouldn't want to be managing any
Speaker 4: of the state agencies at this at this time, but
Speaker 4: you know, to be king for a day, Yeah, I
Speaker 4: mean I expected Heally. I mean it makes sense to
Speaker 4: me what Heally offers to the National Democratic ticket. Lieutenant
Speaker 4: are surprised a bit, but you know, everybody, I don't
Speaker 4: know it personally, but everybody that you know I talk
Speaker 4: to speak very highly of the governor as well.
Speaker 2: So it's just one of the progressive celebrities in Chicago. Hey, David,
Speaker 2: it's great to have you back. David Paley logos Suffolk
Speaker 2: University Research Center with the latest on the trail. Even
Speaker 2: in Florida, the numbers are moving This is Bloomberg.
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Speaker 2: in our first hour, about to talk about not only
Speaker 2: the campaign, which we've been invested in, and this CPI
Speaker 2: day with the intersection of politics and the economy. Donald
Speaker 2: Trump today rolling out his economic plan ahead of Kamala
Speaker 2: Harris doing the same on Friday. But one of the
Speaker 2: most important stories that's developing before our eyes here is
Speaker 2: one that is not getting enough coverage, and a couple
Speaker 2: of months ago would have been our lead story here
Speaker 2: for days on end, I'm sure, and that is Ukraine's
Speaker 2: incursion into Russia going on the offensive in the Curse region,
Speaker 2: as we've discussed here, and they are not turning back
Speaker 2: story on the terminal says it all. Russia says its
Speaker 2: air defenses had quite a night, shooting down one hundred
Speaker 2: and seventeen drones and four tactical missiles in one of
Speaker 2: the largest overnight attacks of this war since it began.
Speaker 2: The Defense Ministry in Moscow says its forces destroyed unmanned
Speaker 2: aerial vehicles over almost all regions bordering Ukraine. This is
Speaker 2: a remarkable moment we're in here. By the way, a
Speaker 2: Russian SU thirty four fighter bomber was apparently also shot
Speaker 2: down in the Kursk region. If you're with us on YouTube,
Speaker 2: showing you a map now of that region in yellow.
Speaker 2: Here if you're listening on the radio, this is northeastern
Speaker 2: Ukraine into Russia. And a pleasure to introduce doctor Rebecca
Speaker 2: Grant as we seek insights on what's happening and what
Speaker 2: might happen next, national security analyst and senior fellow at
Speaker 2: the Lexington Institute, Doctor Grant, it's great to see you
Speaker 2: on Bloomberg. Thank you for giving us some of your
Speaker 2: time today. Broadly speaking, here Ukraine has been pretty quiet
Speaker 2: about this. It was only in the last twenty four
Speaker 2: hours President Zelenski confirmed what was going on. How important
Speaker 2: is this foothold across the border going to be for Ukraine?
Speaker 7: This is very very important, and the Kursk pocket proves
Speaker 7: first of all that Ukraine is still very much in
Speaker 7: this fight. As you said, a couple of weeks ago,
Speaker 7: a couple of months ago, it looked like the war
Speaker 7: was locked in a stalemate. Of course, that is still
Speaker 7: true along the eastern and the southern front, but Ukraine,
Speaker 7: with this surprise flank attack, has really opened up a
Speaker 7: new chapter and very interesting to me that the White
Speaker 7: House is absolutely fine with this. So this Ukrainian offensive
Speaker 7: in to Russia is going on with more than tacit
Speaker 7: approval from the United States and also from other NATO allies.
Speaker 2: So how does Ukraine turn this into a foothold? How
Speaker 2: long can they hold this area? Can they expand it?
Speaker 7: Well, that is the perfect question of what happens now.
Speaker 7: And because of the operational security around Ukraine's operation, you
Speaker 7: know we are going to just be guessing and watching
Speaker 7: YouTube and watching the.
Speaker 8: Map to see what happens.
Speaker 7: What we know so far is this incursion is about
Speaker 7: forty five miles deep and about twenty miles wide, they've
Speaker 7: been able to do it using vehicles like the US
Speaker 7: made Striker and others to move very very quickly. Got
Speaker 7: to mention it shows that Ukraine's forces have been very
Speaker 7: well trained by several NATO partners, and they're really very
Speaker 7: very capable. They're also rotating forces up to the battle
Speaker 7: edge and then back out very professional. But the question
Speaker 7: now is are they going for a particular objective, Will
Speaker 7: they then consolidate or at some.
Speaker 8: Point will they pull back.
Speaker 7: What we know is that Zelensky has said he doesn't
Speaker 7: intend to take and hold territory inside Russia. But what
Speaker 7: we don't know is how close Ukraine is to reaching
Speaker 7: their operational objectives with this invasion.
Speaker 8: We're really moving into the second week now.
Speaker 7: They may be going further north, perhaps towards a nuclear
Speaker 7: power plant, or maybe they've already made their point.
Speaker 8: We'll see.
Speaker 2: We've seen Russian civilians tens of thousands evacuate that area,
Speaker 2: and it made many of us ask the question what
Speaker 2: Vladimir Putin might be preparing as he gets Russian Russian
Speaker 2: citizens out of the way and a potential retaliatory strike
Speaker 2: against the Ukrainian military. But I know your specialty is
Speaker 2: in air power air defense. Ukraine has F sixteens. Now,
Speaker 2: I don't know how well trained these pilots are, but
Speaker 2: we're told they have US munitions. Will those F sixteen's
Speaker 2: help to protect Ukrainians on the ground in Russia?
Speaker 8: Good question.
Speaker 7: The F sixteens are certainly helping to protect Ukraine. Are
Speaker 7: they doing a combined arms operation with the Ukrainian forces
Speaker 7: in Russia?
Speaker 8: You know, we simply don't know.
Speaker 7: We have seen a couple video clips of Ukraine Air
Speaker 7: Force weapons detonation in that Kursk pocket, but we.
Speaker 8: Don't know what the platform is.
Speaker 7: As to the F sixteen pilots in Ukraine, you know,
Speaker 7: how well trained are they?
Speaker 8: Hey, these are really really good pilots. First of all, they.
Speaker 7: Came in as experienced aviators with combat experience, and they've
Speaker 7: been through the F sixteen schoolhouse, so they know not
Speaker 7: only how to fly the F sixteen, but how to
Speaker 7: employ it as a weapon system.
Speaker 8: And the F sixteen, of course.
Speaker 7: Has incredible area capabilities, but mostly we're talking about air
Speaker 7: to ground attack and the ability of the S sixteen
Speaker 7: to target Russian air defenses, including the air defenses that
Speaker 7: have been converted into ground to ground strike missiles for
Speaker 7: the Russians. So the F sixteens definitely are opening a new chapter,
Speaker 7: and we're seeing some combined arms work between air power
Speaker 7: and ground formations in the Kerk Pocket.
Speaker 2: Spending time with doctor Rebecca Grant at the Lexington Institute,
Speaker 2: I want to turn your attention, Rebecca to the Middle East.
Speaker 1: Now.
Speaker 2: I know you're doing a lot of work for US today,
Speaker 2: but we're waiting for retaliatory strike, possibly maybe not by
Speaker 2: Iran against Israel. To the point where the US has
Speaker 2: been surging a lot extra hardware into the region, not
Speaker 2: just the guided missile subs or the aircraft carrier Strike
Speaker 2: Group that have been making headlines, but more F twenty
Speaker 2: two's to stand by for whatever might happen. And remembering
Speaker 2: the April attack by Iran, the drone attack, the missile
Speaker 2: attack into Israel, we saw American pilots shooting down missiles
Speaker 2: and drones from US fighter jets. Are we going to
Speaker 2: see that again with these F twenty twos if Iran
Speaker 2: decides to strike, oh.
Speaker 7: One hundred percent, if Iran tries another big attack with
Speaker 7: you know, three hundred objects like they did back in April.
Speaker 7: You know, so the tactical problem is this. It's about
Speaker 7: one thousand miles from Tehran to Tel Aviv. That's a
Speaker 7: big swath of airspace, and so US Central Command is
Speaker 7: guarding that by using land based fighters like the F
Speaker 7: twenty twos that have been surged into theatre. And let
Speaker 7: me tell you that I think is the biggest combat
Speaker 7: deployment of F twenty two's that we've ever seen. Already,
Speaker 7: there was the USS Theodore Roosevelt aircraft carrier with her
Speaker 7: air wing, which as far as I can tell, is
Speaker 7: doing twenty four to seven operations, so they monitor this.
Speaker 7: I believe Jordan is probably helping out because Jordan, of
Speaker 7: course borders over in that other.
Speaker 8: Side of the airspace.
Speaker 7: So we have to be able to watch the airspace
Speaker 7: using missile defense systems and then using the fighter aircraft
Speaker 7: to be able to chase down an intercept. Particularly in
Speaker 7: this case the Irans rather slow flying drones. They are
Speaker 7: incredibly vulnerable. So you're an F twenty two pilot and
Speaker 7: your cockpit display has showing you a whole lot of
Speaker 7: Iranian targets in the air. If Iran tries a similar
Speaker 7: type of strike.
Speaker 2: What an incredible image that you're painting here, Rebecca This
Speaker 2: is direct engagement we're talking about with Americans. It's the
Speaker 2: equivalent of boots on the ground in the sky in
Speaker 2: this case, what would that mean if one of our
Speaker 2: aircrews was knocked out of the sky, if this became
Speaker 2: more complex in our effort to protect Israel.
Speaker 8: Well, you're right, it is boots in the sky.
Speaker 3: Believe me.
Speaker 7: The fighter pilots have their own boots, so they fly
Speaker 7: in boots, and it is boots in the sky.
Speaker 9: You know.
Speaker 7: First of all, there's always a search and rescue plan
Speaker 7: in place. But more importantly, we've deployed our top of
Speaker 7: the line systems F twenty two's F thirty five seats.
Speaker 7: Actually it's a marine squadron heading into the region and
Speaker 7: other fifteen's and other fighters in place. So the idea
Speaker 7: is to have enough superiority and enough visibility in the
Speaker 7: battle space, and by that I mean F twenty two
Speaker 7: and others are looking to see where it rans.
Speaker 8: Air defenses pop up.
Speaker 7: They can see when something goes hot on their screen
Speaker 7: and give warning to others in the strike package, and
Speaker 7: of course than attack and neutralize it if necessary. So
Speaker 7: using that great stealth and situation awareness should make this
Speaker 7: a rarely an airspace where the US and allies can
Speaker 7: be absolutely dominant. That's the point of bringing in all
Speaker 7: our first line weapons.
Speaker 2: So you're clearly not worried about the potential for an
Speaker 2: escalatory standoff here by putting American service members in this
Speaker 2: case airmen and sailors marines in a direct confrontation with
Speaker 2: unmanned weapons from Irun.
Speaker 8: Well, make no mistake.
Speaker 7: The US has deployed enough so that they actually have
Speaker 7: some good strike options.
Speaker 8: Available, and by that I mean the ability.
Speaker 7: To attack hooty targets in Yemen, the ability to attack
Speaker 7: targets in Iran if that becomes necessary, and then to
Speaker 7: strike back against any other I ran back militia. So
Speaker 7: deploying enough to have offensive strike options is part of
Speaker 7: the deterrence equation, and this mass of high level US
Speaker 7: forces is meant to be squashing down Iran's tactical options.
Speaker 7: Hopefully that deters an attack. If not, it makes it
Speaker 7: much easier to defend against that. Might there be some
Speaker 7: retaliatory strikes by the US depending on the circumstances. Well, yeah,
Speaker 7: they've got the firepower in theater to do it. But
Speaker 7: the goal is not to start a war to maintain
Speaker 7: or reestablish deterrence.
Speaker 2: Pretty remarkable, just in our remaining moment, Doctor, The more
Speaker 2: time goes by, does that make it less likely that
Speaker 2: iron strikes?
Speaker 7: You know, only Iran knows, and we're here. Remember their
Speaker 7: president has only been in power for a few weeks.
Speaker 7: We're hearing about divisions. I'd like to think the crisis diminishes,
Speaker 7: but really only Iran knows about that decisions. But boy,
Speaker 7: they are staring at a lot of us and Allied
Speaker 7: firepower right now.
Speaker 2: Fascinating conversation, doctor, and I really appreciate your joining us.
Speaker 2: Those of us who've been watching on YouTube have been
Speaker 2: admiring what has to be the coolest Mantle photograph I've
Speaker 2: ever seen. Behind you ten ten on the room rater, doctor,
Speaker 2: many thanks, and don't be a stranger, Doctor Rebecca Grant,
Speaker 2: national Security Analyst, senior fellow at the Lexington Institute. With
Speaker 2: our eyes on two theaters here and a lot of
Speaker 2: questions about what might happen in the coming days, just
Speaker 2: consider we're going to be in Chicago on Monday for
Speaker 2: the DNC. Could this be the backdrop of Day one
Speaker 2: when Joe Biden addresses the delegates with Iran dealing with
Speaker 2: Israel and the US in the mix. We're going to
Speaker 2: have a lot more ahead. We'll assemble our political panel
Speaker 2: next as you would expect on the fastest show in politics.
Speaker 2: Thanks for being with us. I'm Joe Matthew in Washington.
Speaker 2: This is Bloomberg. You're listening to the Bloomberg Balance of
Speaker 2: Power podcast. Catch us live weekdays at noon Eastern on
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Speaker 2: Search Bloomberg Business News Live, blam Oh, there's our live feed.
Speaker 2: We'll meet you there on CPI Day, which seems to
Speaker 2: have more political connotation than ever as we move closer
Speaker 2: to the convention, closer to the closer to the debate
Speaker 2: when the economy, when prices for goods and services will
Speaker 2: be in the air. The smartest political analysis I read
Speaker 2: this morning after eight thirty came from end to current.
Speaker 2: It was just one post on our top live blog,
Speaker 2: and it says it all the fact of the matter
Speaker 2: is fourth month of cooling inflation. Great news for Kamala Harris.
Speaker 2: But both campaigns can find a lot to talk about
Speaker 2: in here. As I read on the blog from end
Speaker 2: to if you're on the Harris campaign team, you're probably
Speaker 2: breathing easier. The headline takeaway inflation continues to ease. That's
Speaker 2: the easy part, right fed cut next month. But if
Speaker 2: you're the Trump campaign, you will not lose time highlighting
Speaker 2: the ongoing sting from housing costs. Remember we talked about
Speaker 2: shelter costs with Stuart Paul car insurance. He also highlighted
Speaker 2: it and other staples the fodder for each side of
Speaker 2: the aisle. So everybody is happy today in the world
Speaker 2: of politics, and I'm glad to say end to Current
Speaker 2: is with us right now. Bloomberg Global Economics reporter, good
Speaker 2: to see you. You've got a real political mind. As
Speaker 2: you look at this data, I sort of think of
Speaker 2: you that way. And that's the way we have to
Speaker 2: be reading this stuff now, isn't it.
Speaker 10: I think we have to be at this stage of
Speaker 10: election cycle, as you know so well, Joe. You know
Speaker 10: all the polls have told us that the economy has
Speaker 10: been top of mind for people. The cost of living
Speaker 10: has been top of mind for people. Now we have
Speaker 10: this inflation data for July. Like you say, headline number
Speaker 10: is pretty good, suggesting the the Fed and the policy
Speaker 10: makers are turning in corner with inflation prices coming down
Speaker 10: for apparel, for airfares, prices coming down for new news cars.
Speaker 10: There's good news there, inflation coming off the ball. But
Speaker 10: to your point, I mean within that big sting in
Speaker 10: the tail with rents still going up. Rents weren't meant
Speaker 10: to be going up at this pace by now. The
Speaker 10: hope was that they'll be turning off. And in other
Speaker 10: daily stables that car insurance. You know, you buy a
Speaker 10: cheap car, but you're going to pay fortune on car insurance.
Speaker 10: Plenty of stinging the tail there. So yes, the point
Speaker 10: is good news on a headline basis, of course, administration
Speaker 10: and welcome mad But if you're in the opposition, you're
Speaker 10: in the trum campaign. Plenty for you two ride home
Speaker 10: on too.
Speaker 2: You remember there was a presidential campaign wrapped around this
Speaker 2: whole thing at one point. Why because the rent is
Speaker 2: too damn high does Donald Trump start talking about this
Speaker 2: shelter costs a real thing and a lot of young
Speaker 2: people can relate with it, of course, he are.
Speaker 10: And housing costs very real. I mean it varies around
Speaker 10: the country, of course, but certainly the housing market has
Speaker 10: been in something of a funk canire for the past
Speaker 10: two years. You know, investors aren't willing to invest develop property,
Speaker 10: people are willing to sell their homes. Is it sort
Speaker 10: of an inventory problem? There's a high rent story. There's
Speaker 10: a lot going on there. So yes, you would say
Speaker 10: it's good political, fertile political ground for anyone to harvest.
Speaker 10: But you would imagine maybe Vice President Harris too might
Speaker 10: come out with some ideas of her own. As you know,
Speaker 10: she has her speech coming up this year, so she
Speaker 10: may also use that as an opportunity to let her Oh.
Speaker 2: I'm glad you brought that up, because we're going to
Speaker 2: talk to our panel about this next. Donald Trump talks today,
Speaker 2: and we've heard his plan is largely to get at
Speaker 2: it through energy. Drill, baby drill. He says, you bring
Speaker 2: energy prices lower, and everything else follows. Some voters want
Speaker 2: to hear a little more than that. I know investors do,
Speaker 2: and you wonder to what extent will Kamala Harris be
Speaker 2: able to show any sunlight between herself and Joe Biden issue.
Speaker 10: Well, politically it means she has to make that calculation
Speaker 10: how far can't you push them out? But on the ground,
Speaker 10: to your point, people would probably love to hear some
Speaker 10: solutions in terms of how do you bring or how
Speaker 10: do you slow to increase in rent, how do you
Speaker 10: increase supply in housing. I mean, ninety percent of the
Speaker 10: inflation increase today was because of the whole shelter story,
Speaker 10: So there's a I think people on the ground of
Speaker 10: any stripe are open to solutions in terms of easing
Speaker 10: up the housing story and in other aspects of costs
Speaker 10: of living too. How do you tackle what's going on
Speaker 10: in curR insurance, for example, how can you keep an
Speaker 10: eye on companies who are price gouging. There's lots of
Speaker 10: charity there for both candidates. It's a question of just
Speaker 10: how do you want to sell that to the public.
Speaker 2: So that's right, helping us get our arms around the
Speaker 2: most important issue on the trail and the current Thank
Speaker 2: you Wender, Great to see you as always, Bloomberg Global
Speaker 2: Economy reporter, connecting the dots for us here as we
Speaker 2: assemble our political panel. Genie Shanzino is whether Bloomberg Politics
Speaker 2: contributor of course, democratic strategist and political science professor at
Speaker 2: Iona University. And Brittany Martinez, Republican strategist, founder of A
Speaker 2: Spina and Company. Great to see you both and thanks
Speaker 2: for joining the conversation. Brittany, I'll start with you because
Speaker 2: Donald Trump is up first here. We're going to hear
Speaker 2: from both candidates on their economic plans this week. Does
Speaker 2: he need to say more today than drill, Baby, Drill.
Speaker 9: I do think he needs to say more than that,
Speaker 9: and also just stay on message. I think he needs
Speaker 9: to stop talking about crowd sizes, you know, wondering what
Speaker 9: race or nationality. You know, the vice president is a
Speaker 9: race I should say, and really focus on, you know,
Speaker 9: what he did when he was president. A lot of people,
Speaker 9: whether you like Trump or not, a lot of people
Speaker 9: aren't happy with the economy under Biden, and they feel
Speaker 9: that they were in a better spot under Trump, and
Speaker 9: so he really needs to be able to hammer that
Speaker 9: point home and be able to connect with people on
Speaker 9: that level and not be just so erratic in his
Speaker 9: messaging all the time.
Speaker 2: Genie, there was a poll that I think so far
Speaker 2: as an outlier from the Financial Times earlier this week,
Speaker 2: and we talked about it when it was released, suggesting
Speaker 2: that more people actually trust Kamala Harris when it comes
Speaker 2: to handling the economy than Donald Trump. But every other poll,
Speaker 2: including our own Swing State Pole, shows a wide lead
Speaker 2: for Trump on who do you trust to handle the economy?
Speaker 2: Interest rates, the cost of goods, the cost of services.
Speaker 2: She's going to have to remove herself from Joe Biden
Speaker 2: on this issue to make a difference, won't she.
Speaker 11: She will?
Speaker 12: And you know, you were just talking about the Suffolk poll.
Speaker 12: You look at that obviously Florida, but Donald Trump winning
Speaker 12: amongst people who say the economy is the most important
Speaker 12: issue by something like thirty points. And you know, we
Speaker 12: see that across the nation. As much as the Financial
Speaker 12: Times poll really got Democrats happy and excited, and they
Speaker 12: seem to be moving in the right direction on the
Speaker 12: economy and on immigration, Donald Trump is still winning by
Speaker 12: large numbers. And so to Berney's point, if he can
Speaker 12: stay on message, that would be very helpful to the campaign.
Speaker 12: The problem has been he has been way off message.
Speaker 12: I mean I listened to the Musk interview. He had
Speaker 12: forty minutes on the assassination attempt, and much less on
Speaker 12: how his economic policy and plans and record, because he
Speaker 12: has one is different than Kamala Harris's and so that
Speaker 12: is what he needs to do. And to your point,
Speaker 12: she needs to define herself. As much as she has
Speaker 12: been our vice president, most people still don't know a
Speaker 12: lot about Kamala Harris and what her plans are and
Speaker 12: who she is. So she's got, unlike Joe Biden, this
Speaker 12: window to define herself on the economy, and it's going
Speaker 12: to be critically important. I think what she says in
Speaker 12: Maryland with the President and then in North Carolina this
Speaker 12: week critically important to the rest of the campaign because
Speaker 12: the economy is it for most voters as they run
Speaker 12: to the polls in November.
Speaker 2: And that's its tall order, Genie, I'm sure you would agree.
Speaker 2: I mean, this has been in the White House with
Speaker 2: Joe Biden since we came out of COVID, since inflation
Speaker 2: has been a story here. So to try to slice
Speaker 2: this thing into something different is going to be a
Speaker 2: real task. Brittany. The fact of the matter is Republicans
Speaker 2: have the goods here. You can talk about a fourth
Speaker 2: month of ongoing inflation, but there's a reason why the
Speaker 2: White House, in its statement on the CPI today said
Speaker 2: prices are still too high. Republicans, Donald Trump, anybody JD.
Speaker 2: Vance can point to very specifically shelter costs. You've done
Speaker 2: nothing to help young people get a foothold in the
Speaker 2: housing market, car insurance, the cost of vehicles themselves, even
Speaker 2: getting at the EV issue here, Brittany, isn't this a
Speaker 2: grab bag for the Trump campaign?
Speaker 9: It absolutely should be. I think that when Republicans are
Speaker 9: able to stay on a message when it comes to
Speaker 9: these sorts of things, they're able to be successful. But again,
Speaker 9: the question is is whether he's able to stay on
Speaker 9: message or not. He hasn't really been able to. And
Speaker 9: then when you look at his candidate, Senator Vance, he
Speaker 9: has also kind of been in these first few weeks
Speaker 9: as the choice, a chaotic choice, a chaotic candidate, right,
Speaker 9: I mean, he's he, I think was the lowest ranking
Speaker 9: VP pick in the polls of all time, and that
Speaker 9: you're right, there are so many things to point to
Speaker 9: and if you happen to catch Yesterday, Nikki Haley, she
Speaker 9: did an interview where she was saying Republicans needs to
Speaker 9: stop whining and they need to start paying attention to
Speaker 9: these issues and talking about these issues because this is
Speaker 9: what people care about. I think that when it comes
Speaker 9: to the debate in a few weeks here, we'll maybe
Speaker 9: see them on both sides really stick to those talking points.
Speaker 9: But we're a few weeks out and people are starting
Speaker 9: to pay attention, especially with the DNC convention coming up
Speaker 9: next week. So yes, I think there's more than enough
Speaker 9: here for Republicans, especially at the top of the ticket,
Speaker 9: to be talking about. But that's not the case unfortunately
Speaker 9: for them.
Speaker 2: Talk about the convention for a moment here. Of course,
Speaker 2: we're going to be there Monday, one week from tonight, Jeanie.
Speaker 2: We've added another here to the list, Transportation Secretary Pete
Speaker 2: buddhajeedge lands a prime time slot on Wednesday Night. This
Speaker 2: is Jim Wall's Knight and Harris and Walls. Also, we
Speaker 2: have learned next week are going to plan a rally
Speaker 2: not in Chicago, but in Milwaukee. They're going to use
Speaker 2: it looks like the very same convention hall that Donald
Speaker 2: Trump used in Milwaukee. What do you make of these
Speaker 2: updates to the agenda and what does it tell us
Speaker 2: specifically about Pete Boodha Judge landing a slot like that.
Speaker 12: Yeah, I think it's smart for them to go to Milwaukee, right,
Speaker 12: you know, it's not far right across the border. Wisconsin,
Speaker 12: as we know, a must state, So it does make sense.
Speaker 12: And heck, if you can take Donald Trump's tax policies
Speaker 12: on say tips for waiters and waitresses, why not go
Speaker 12: to his convention house. So there you go. You know,
Speaker 12: I do think the Buddha Judge move makes good sense
Speaker 12: as well. Incredibly popular with the base. He is an
Speaker 12: up and coming star in the Democratic side, and so
Speaker 12: you know that's the kind of person you want. And Joe,
Speaker 12: I have to say, I think earlier you gave me
Speaker 12: an idea for somebody else. Jimmy McMillan, The rent is
Speaker 12: too damn high.
Speaker 2: Guys, Yes, thank you.
Speaker 12: Yeah, as a New Yorker, we know him. He's you know,
Speaker 12: the rent is too damn high for everybody. So get
Speaker 12: him out there at the along with Judge.
Speaker 2: God, you just pulled that in, Jimmy McMillan. You think
Speaker 2: I'll have the gloves on the leather gloves and the
Speaker 2: whole thing. The rent is too damn high, party, Brittany,
Speaker 2: is there something there for Republicans to seize on.
Speaker 9: Yeah, I mean always, especially Trump. Look, we all know
Speaker 9: that Trump likes giving people nicknames. I think that would
Speaker 9: be a smart nickname to use as opposed to, you know,
Speaker 9: all of the crazy ones that he's saying. But yeah,
Speaker 9: I mean there's, like I said, there's just so much
Speaker 9: here to pull from, and it's a matter of whether
Speaker 9: he can remain on messaging or not. And I think
Speaker 9: next week it's going to be really interesting to see
Speaker 9: what comes out of the Democrats convention.
Speaker 8: I agree with you.
Speaker 9: Seeing that buddhaj Edge is sort of at a prime
Speaker 9: time spot shows that they care, that's what they want
Speaker 9: to be leaning into, not just now, but in the future,
Speaker 9: and they see him as a rising star in the party.
Speaker 9: I mean obviously he is. He's been you know, from
Speaker 9: Mayor Pete to Department of Transportation, right. And I think
Speaker 9: though Republicans, if they're paying attention and tuning in, especially
Speaker 9: Trump campaign, they should be. I'm sure they will be
Speaker 9: Trump Love's TV be able to use some of those
Speaker 9: things to help them with what they should be saying.
Speaker 2: American People producer Matt says it all. Jimmy McMillan best
Speaker 2: facial hair in politics, not counting Ty Cobb. If that
Speaker 2: means something to you, you are truly a wonk. Would
Speaker 2: you try to counter program the convention, Brittany? Or should
Speaker 2: Donald Trump laylow reset the clock next week?
Speaker 9: I think resetting the clock would be helpful. Is it
Speaker 9: possible or probable? Probably not. But we did see though,
Speaker 9: between the debate and the assassination and attempt, there were
Speaker 9: a few weeks he was pretty under the radar. I
Speaker 9: think right now what I've seen is Trump who continues
Speaker 9: to spiral when all these polls are coming out that
Speaker 9: now has the vice president ahead of him, especially out
Speaker 9: of the swing states.
Speaker 8: I think he needs.
Speaker 9: To take a breath, take a be and just sort
Speaker 9: of reassess and just give his team an opportunity to
Speaker 9: sort of reframe what it is that they want to
Speaker 9: be saying, focusing on moving forward. I think that would
Speaker 9: be to his benefit. Can he help himself? Who knows?
Speaker 9: Probably not, but we've seen him do it in the past.
Speaker 9: He can be more subdued and stay on message in
Speaker 9: those capacities.
Speaker 2: Great panel today with Brittany Martinez and Genie Shanzano.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast can
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Speaker 1: Just say Alexa play Bloomberg eleven thirty of courses.
Speaker 13: We watched the inflation picture unfolding before our eyes. Think
Speaker 13: about how we are talking a lot about shelter, maybe
Speaker 13: less so about other volatile components like energy. Now it
Speaker 13: does speak to the relative not stasis, but the relative
Speaker 13: more calm that seems to be in energy markets now
Speaker 13: for now though, as we still are on watch to
Speaker 13: see whether or not there is actually an escalation in
Speaker 13: conflict in the Middle East, as we are still waiting
Speaker 13: to see if and when Iran and Hesbelo will actually
Speaker 13: retaliate against it was crude.
Speaker 2: Oil WTI is still just sitting there at seventy seven
Speaker 2: dollars a barrel like none of this is happening.
Speaker 13: Well, because right now, frankly, nothing really is happening. The
Speaker 13: question is is that by design or it does that
Speaker 13: signal that actually maybe nothing will come for all of
Speaker 13: the talk and warrning of it. So it's on this
Speaker 13: note now that we turn to Ambassador Thomas Pickering. He
Speaker 13: is former US Ambassador to the UN, former Ambassador to
Speaker 13: Russia as well US Ambassador to Russia. That is, sir,
Speaker 13: it's always great to have you here. We would like
Speaker 13: to get your thoughts on Russia in Ukraine as well.
Speaker 13: But if we could just begin with what's happening in
Speaker 13: the Middle East, given that we have seen nothing yet
Speaker 13: from Iran or its proxies, does that just signal that
Speaker 13: they're delaying for what could be a larger attack than
Speaker 13: we saw in April, or that maybe they're considering not
Speaker 13: doing anything at all.
Speaker 11: Quite possible, and we've seen some statements on their part
Speaker 11: that they may, for reasons that are not yet clear,
Speaker 11: beholding off for any particular reason. It is certainly clear
Speaker 11: that the US has sent a very stern and very
Speaker 11: tough message and wishes to avoid the outbreak of a
Speaker 11: conflict that begins to escalate in cascade in the region,
Speaker 11: for very very good reasons, having to do with obviously
Speaker 11: the safety and security of Israel on the one hand,
Speaker 11: to which the US has committed, but also to the
Speaker 11: galloping death toll of Palestinians in Gaza, about which Vice
Speaker 11: President Harris has spoken out quite firmly recently.
Speaker 2: Ambassador, we've seen the biggest mobilization of F twenty two
Speaker 2: fighter jets into an area of combat that we have
Speaker 2: ever seen here, and I wonder if you're concerned or
Speaker 2: it gives you comfort to know that American airmen, sailors
Speaker 2: and marines will likely be directly involved in knocking down
Speaker 2: whatever Iran throws at Israel.
Speaker 11: Joe, it has to be both. Obviously, anything that can
Speaker 11: deter damp down any enthusiasm on the part of either
Speaker 11: party to launch a series of military actions which have
Speaker 11: the potential of cascading into a much broader conflict is
Speaker 11: very much in our interest. At the same time, obviously,
Speaker 11: any actions taken which precipitate that particular kind of activity
Speaker 11: are going to be clearly steps not in our interest,
Speaker 11: not in the region's interest, and not in the workout
Speaker 11: of the problems in the region, in the interest of
Speaker 11: those people who believe is I do that a cease
Speaker 11: fire and hostage exchange are very much important questions, and
Speaker 11: that will come up tomorrow in the resumed talks. I
Speaker 11: wish I could tell you I would greet that with
Speaker 11: more confidence, but it remains a very very conflictive, very
Speaker 11: contentious set of problems that does not appear at this
Speaker 11: stage from the outside to be on the edge of
Speaker 11: settlement as much as the US culture, Egypt and others
Speaker 11: are engaged in seeking to push it in that direction.
Speaker 13: Well, on that note, Ambassador, if from US is not
Speaker 13: at the table tomorrow, do you believe that they will
Speaker 13: get there or is this kind of the last chance
Speaker 13: to really get this done. If it doesn't happen this week,
Speaker 13: why would we have any face that it will happen?
Speaker 11: Ever, Kayleie, the process of seeking peace in a place
Speaker 11: like the Middle East is not based on auguries of
Speaker 11: hope driving us on, but alternatives that are worse that
Speaker 11: manifacture what I would call the impulsion to move ahead.
Speaker 11: And it's been arguable that in the Middle East conflict,
Speaker 11: despite the very high casualty rates and the massive range
Speaker 11: of destruction and the problems on both sides, we have
Speaker 11: not reached the point where the parties feel there is
Speaker 11: enough disadvantage to continuing the conflict to precipitate the beginning
Speaker 11: of a serious look to see whether they can gain
Speaker 11: more from negotiations than they can gain from further shooting.
Speaker 2: Ambassador. Of course, you were also ambassador to a number
Speaker 2: of other nations here that give you expertise on what's
Speaker 2: happening in the world, including Russia. And we're looking at
Speaker 2: Ukraine continue its incursion into Russian territory and offensive that
Speaker 2: appears to be taking hold now about two weeks old.
Speaker 2: Russia last night had to knock down one hundred and
Speaker 2: seventeen drones from Ukraine. Is this something that could become
Speaker 2: a foothold for a wider offensive.
Speaker 11: I think that we're in a situation in which many
Speaker 11: of us remain skeptical that there is a battlefield victory
Speaker 11: in sight, but intrigued by the notion that the Ukrainians
Speaker 11: have launched a set of military activities into Russian territory
Speaker 11: which the Russians, with all of their undoubted strength and superiority,
Speaker 11: have not been able to dislodge. And that is the
Speaker 11: kind of set up one would expect to see if
Speaker 11: it continues, become a potential basis for convincing one side
Speaker 11: or another that they have more to gain in negotiations
Speaker 11: than they have to gain in continued conflict. We'll wait
Speaker 11: and see. I think both President Putin and Prime Minister Netanyahu,
Speaker 11: and perhaps politicians in this country as well, are very
Speaker 11: much engaged in the idea that in these conflicts they
Speaker 11: have more to gain from avoiding things like prosecution and
Speaker 11: so on, either for international criminal courts or for domestic courts,
Speaker 11: by continuing the conflict then by moving it into the
Speaker 11: negotiating process, And we have to be careful of that
Speaker 11: and watch that as one of the determining factors.
Speaker 13: Well, so, Ambassador, do you see, is this Ukrainian incursion
Speaker 13: into Russian territory ask something ultimately that does bring the
Speaker 13: war closer to its end than it was before, because
Speaker 13: either it makes Ukraine more likely to have a victory
Speaker 13: outright or at least at the very least negotiations negotiators
Speaker 13: to the table.
Speaker 11: Kayley, that interpretation is not totally excluded, if I can
Speaker 11: be very cautious in saying it, but it is not
Speaker 11: something that I think is inevitable. But we have been
Speaker 11: looking in the Russia Ukraine war for the idea that
Speaker 11: there does not seem to be at hand a military
Speaker 11: victory on the part of either side, despite both Russian
Speaker 11: larger capacity as a power on the one hand, and
Speaker 11: world continued support for Ukraine in the main on the
Speaker 11: other hand, to tip the balance, But a Ukrainian success
Speaker 11: which can be sustained may begin to open the door
Speaker 11: to thinking on the other side, do I have more
Speaker 11: to lose by continuing the conflict or more to gain
Speaker 11: by negotiating a solution? And it is that set of capacities,
Speaker 11: if I could put it that way, of changes that
Speaker 11: often precede a negotiated outcome. But it is not certain
Speaker 11: and it is not based on any estimation of how
Speaker 11: the parties and their leaders have acted up until now
Speaker 11: to expect that a negotiated solution is around the corner.
Speaker 11: It is potentially a slighter greater possibility than a few
Speaker 11: weeks ago, but far from a certain pay.
Speaker 2: He was Ambassador to Russia and US Ambassador to Israel,
Speaker 2: Thomas Pickering. We thank you so much for the insights today.
Speaker 2: This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast cat
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Speaker 2: Thanks you for being with us on the Wednesday edition
Speaker 2: of Balance of power here on Bloomberg's TV and Radio
Speaker 2: Kaylee CPI Day, which has more to do with politics
Speaker 2: than ever as we get closer to Chicago, and of
Speaker 2: course November with a couple of important speeches happening this
Speaker 2: week on the campaign trail. We got a lot of speeches, Kaylee,
Speaker 2: but these are ones we actually listen to for details.
Speaker 2: Today it's Donald Trump Friday, it's Kamala Harris actual economic
Speaker 2: plans that both o voters, so we can tell how
Speaker 2: much difference there is here and whether there is a
Speaker 2: plan to lower prices.
Speaker 13: Yeah, and both of these speeches will be given from
Speaker 13: the swing state of North Carolina, which is interesting. They're
Speaker 13: just two days apart, of course, But the question really
Speaker 13: is going to be how specific do they get on
Speaker 13: the policy that they want to pursue, and frankly, how
Speaker 13: much overlap might there be? Is we know on at
Speaker 13: least two issues, the child tax credit, which Jade Vance
Speaker 13: is now out saying he is in favor of expanding
Speaker 13: and taxing or not taxing rather tipped income. Yes, right,
Speaker 13: they agree, so where exactly? Knowing that this administration Harris
Speaker 13: has been part of also has kept intact many of
Speaker 13: the tariffs from the Trump administert where are the differences here?
Speaker 2: You might get a little squinty eyed, as Kaylee likes
Speaker 2: to say, trying to tell the difference here. Look, it's
Speaker 2: not just the difference between these campaigns, Kaye. It's going
Speaker 2: to be the difference between Kamala Harris and Joe Biden.
Speaker 2: Surely when she speaks on Friday, and now we're really
Speaker 2: splitting hairs, potentially we have a lot to hear from them.
Speaker 13: And of course before we hear from Harris on Friday,
Speaker 13: she will be sharing this stage which President Biden in
Speaker 13: Maryland tomorrow. World, they will be talking about their administration's
Speaker 13: efforts to lower costs for the American people in the
Speaker 13: aftermath of today's inflation data. So it's a lot that
Speaker 13: we're looking forward to, and I'm pleased to say joining
Speaker 13: us to talk about it as we look ahead is
Speaker 13: barat Rama Murti. He is Senior Advisor for Economic Strategy
Speaker 13: at the American Economic Liberties Project, also formerly Deputy Director
Speaker 13: of the National Economic Council at the White House. Barrot,
Speaker 13: always great to have you here on Bloomberg TV and Radio.
Speaker 13: If we could first begin with the data today, obviously,
Speaker 13: We heard some similar words from Joe Biden about it,
Speaker 13: that it does show progress, that prices are still too
Speaker 13: high when you see looking at the data, still stickiness
Speaker 13: in shelter costs, for example. Are you confident that prices
Speaker 13: can get materially lower between now and November.
Speaker 5: Yeah.
Speaker 14: Look, I think that CPI is on a really good trajectory.
Speaker 14: If you look at over the last three months, headline
Speaker 14: CPI is up only zero point four percent. That's obviously
Speaker 14: actually below the Fed's target for annual inflation. The housing
Speaker 14: number is obviously driving the vast majority of the inflation
Speaker 14: that we still have. Some of that is lagged data,
Speaker 14: some of that does not reflect disinflation that's in the pipeline.
Speaker 14: So I actually think that it's a sign of should
Speaker 14: be a sign of optimism that housing is the overwhelming
Speaker 14: force here. But I think it's incumbent upon both candidates
Speaker 14: to explain what they plan to do on housing. I
Speaker 14: think on that front, the Biden administration and the Harris
Speaker 14: campaign has talked a lot about putting significant federal dollars
Speaker 14: into building new affordable housing supply, which is ultimately the
Speaker 14: medium term and long term solution to the house and
Speaker 14: cost problems that we have.
Speaker 2: Of course, what Kamala Harris could really use at this
Speaker 2: point as lower interest rates, helping young people maybe get
Speaker 2: a foothold in this housing market as policies move forward
Speaker 2: to build more homes. Barat, I wonder what you think
Speaker 2: about this idea. You've actually worked in the White House
Speaker 2: with both of the people we're talking about here, Joe
Speaker 2: Biden and Kamala Harris, the extent to which she needs
Speaker 2: to find her own message when she speaks to the
Speaker 2: Economy on Friday, and maybe even find some sunlight between
Speaker 2: herself and Joe Biden to show a new approach at
Speaker 2: lowering prices. What could we hear on Friday.
Speaker 14: I think ultimately what you're going to see is to
Speaker 14: go to the point that you were making as we
Speaker 14: came into this segment, is to drive a contrast between
Speaker 14: the Harris economic agenda and the Trump economic agenda. Just
Speaker 14: equivval with one thing you said on a child tax credit.
Speaker 14: It's great that jad Events has nominally expressed some support
Speaker 14: for that, but if you look at when the bill
Speaker 14: that actually expanded the child tax credit was before the
Speaker 14: United States Senate, every single Republican senator voted against it
Speaker 14: and denied us the ability to provide a little bit
Speaker 14: of tax relief to parents with children.
Speaker 2: So do we actually know if Donald Trump supports that.
Speaker 2: He's never said that.
Speaker 14: I would suspect that he doesn't, to be totally honest,
Speaker 14: and that might be a bit of daylight between himself
Speaker 14: and his vice president vice presidential nominee. And so, but
Speaker 14: I think what the Harris campaign is going to do,
Speaker 14: I suspect is identify a few areas of emphasis where
Speaker 14: there's a really sharp contrast with the Trump economic Agenda.
Speaker 14: Number one, on taxes, it's not just the child tax
Speaker 14: credit that we talked about. When it comes to fiscal
Speaker 14: responsibility and raising taxes on the very wealthy and large corporations.
Speaker 14: The Trump plan is clear. It's a four point six
Speaker 14: trillion dollar tax cut that goes largely primarily to how
Speaker 14: soulds making well over four hundred thousand dollars a year.
Speaker 14: The Harris economic Agenda, which comes out of the Biden
Speaker 14: Harris budget, is to raise some taxes on the very
Speaker 14: wealthy and large corporations, help bring down the deficit by
Speaker 14: two trillion dollars over the next ten years, and at
Speaker 14: the same time provides a middle class tax relief, something
Speaker 14: that's absent from the Trump economic plan. And so whether
Speaker 14: it's on taxes, whether it's on willingness to actually stand
Speaker 14: up to corporate actors who are squeezing American families, where
Speaker 14: the vice president has a track record of that as
Speaker 14: Attorney general of California, Trump as president bent over backwards
Speaker 14: to do the bidding of corporations. And so I think
Speaker 14: you'll see a few areas of sharp contrast, and I
Speaker 14: think ultimately a case made by the Harris campaign that
Speaker 14: they are being more responsive to the actual concerns of
Speaker 14: American voters.
Speaker 13: So while you may see sharp contrast in some areas brought,
Speaker 13: there are at least similarities in others, including this idea
Speaker 13: on the subject of taxes and the deficit about not
Speaker 13: taxing tipped income. The Committee for a Responsible Federal Budget
Speaker 13: estimates that not doing that would increase the deficit by
Speaker 13: one hundred to two hundred billion dollars over ten years.
Speaker 13: Is this actually good economic policy?
Speaker 14: I think again, you have to put all of this
Speaker 14: into the context of a broader fiscal plan, a broader budget,
Speaker 14: you know. I think when you put that plan alongside
Speaker 14: a policy to raise substantially more tax revenue from the
Speaker 14: very wealthy and large corporations, and to ultimately drive down
Speaker 14: the budget deficit, which is what the Harris Plan, the
Speaker 14: Harris Biden budget it does versus the Trump agenda, where
Speaker 14: this additional one hundred or two hundred billion dollars in
Speaker 14: tax cuts comes on top of a four point six
Speaker 14: trillion dollar tax cut that primarily goes to the wealthy.
Speaker 14: You can see how one is a reasonable set of
Speaker 14: policies that puts America on a better fiscal track, and
Speaker 14: one would massively blow out the deficit on top of
Speaker 14: I should note the eight trillion dollars of deficit increase
Speaker 14: that you saw in the first Trump term.
Speaker 2: So on Friday, Kamala Harris gets on stage and says,
Speaker 2: look at the last three years of progress we've made.
Speaker 2: The Biden Harris economic proposal moves forward if you elect
Speaker 2: me as president. Because if you look at the CPI today,
Speaker 2: four months straight of easing inflation, everybody expects Rake cuts
Speaker 2: to start in September. This coincides pretty nicely with a
Speaker 2: November election, doesn't it.
Speaker 5: Yeah.
Speaker 14: I've said before that I think you're you're hitting a
Speaker 14: patch of real economic momentum here with inflation clearly easing,
Speaker 14: where at this point I think the question for the
Speaker 14: Fed in September is not whether they will cut, but
Speaker 14: whether they cut by twenty five basis points or fifty
Speaker 14: basis points. That's going to be an important moment where
Speaker 14: I think it will send a signal to the American
Speaker 14: public we've officially turned the page on inflation. And so
Speaker 14: there's a lot of momentum to say that.
Speaker 2: Though, can she I mean, because everyone's asking about drawing
Speaker 2: contrast with Joe Biden. What if she just gets up
Speaker 2: there and says we won the war against inflation? Is
Speaker 2: that mission accomplished twenty twenty four.
Speaker 14: I'm not sure if she's going to use that exact language,
Speaker 14: but I do think that she's going to be able
Speaker 14: to ride a lot of positive economic data into the
Speaker 14: fall and into November. If everything stays on the current trajectory,
Speaker 14: that's going to be another boost to a campaign that's
Speaker 14: already done very very well over the last couple of
Speaker 14: weeks in building the case for it. And so I
Speaker 14: think what she has an opportunity to do is to
Speaker 14: try to explain to the American public how her economic
Speaker 14: agenda is going to be responsive to the concerns that
Speaker 14: they are feeling in their in their lives today. Obviously,
Speaker 14: the cost of living is a big one, the cost
Speaker 14: of housing, the cost of childcare, the cost of higher education.
Speaker 14: But I also think part of it is who can
Speaker 14: create a calm, predictable atmosphere for businesses to thrive it
Speaker 14: And what we saw during the first Trump term was
Speaker 14: was chaos and uncertainty that I think really put a
Speaker 14: toll on the ability of businesses to conduct to do
Speaker 14: their work a aaily basis. And with the Harris administration,
Speaker 14: I think you'll see a lot of regulatory predictability, a
Speaker 14: lot of working with the business community, especially the small
Speaker 14: business community, to make sure that they have the tools
Speaker 14: that they need to grow.
Speaker 13: As we consider her economic policy, it is also pointing
Speaker 13: out she's been hit two on the border, specifically, an
Speaker 13: issue with which Republicans are charging that as borders are
Speaker 13: she essentially to summarize, really messed things up. Can we
Speaker 13: separate migration immigration policy from economic policy now? Though, as
Speaker 13: Donald Trump is accusing her of taking a turn toward
Speaker 13: his kind of policy, hardening some of her language when
Speaker 13: it comes to migration, Knowing the impact that it has
Speaker 13: had on growth on the labor market. Could that kind
Speaker 13: of more right wood shift or at least harsher shift
Speaker 13: when it comes to the border in migration, actually be
Speaker 13: something that takes an economic toll.
Speaker 14: Look, I think the President and the Vice President from
Speaker 14: the very beginning of the administration have been talking about
Speaker 14: the need for comprehensive immigration reform that involves more border security,
Speaker 14: more funding for border patrol agents and so on, but
Speaker 14: also changes on legal immigration and a way of addressing
Speaker 14: all the folks, the dreamers that have been here in
Speaker 14: the United States and providing them with a pathway to citizenship.
Speaker 14: I think that's the right balance of steps to address
Speaker 14: some of the labor issues that you talked about, while
Speaker 14: at the same time making sure that we have a
Speaker 14: strong border and can enforce the rules that we have
Speaker 14: about crossing the border. I think that the Vice President,
Speaker 14: if you look at the actual data, the administration has
Speaker 14: done a good job of addressing migration across the border.
Speaker 14: We saw that the steps that the President took a
Speaker 14: couple of months ago by executive order have led to
Speaker 14: a significant decrease in illegal crossings. But at the end
Speaker 14: of the day, this is an area where Congress needs
Speaker 14: to act. And we remember the Senate had a bipartisan
Speaker 14: proposal that the President and Vice President supported, and that
Speaker 14: Donald Trump came in at the last second to urge
Speaker 14: Republicans to vote against it, in my view, because you
Speaker 14: would rather campaign on the issue than try to solve
Speaker 14: the problem.
Speaker 13: Brot Finally, before we let you go, and I do
Speaker 13: ask you this question knowing that you spent years working
Speaker 13: for Senator Elizabeth Warren, who certainly has thoughts about this industry.
Speaker 13: But Politico is reporting there is a Crypto for Harris
Speaker 13: event happening tonight in which a number of lawmakers are
Speaker 13: going to attend, virtually including Senate Majority Leader Chuck Schumer.
Speaker 13: I'm not sure you expect to hear the Vice president
Speaker 13: talk about crypto policy specifically on Friday when she's outlining
Speaker 13: economic policy. But do you expect she'll be very different
Speaker 13: than Joe Biden on that front?
Speaker 14: I honestly don't know the answer to that. It's not
Speaker 14: something that I've talked to her or her team. Would
Speaker 14: you encourage her to be I think generally speaking, we
Speaker 14: should have innovation in the United States and that we
Speaker 14: should have regulatory policies that encourage responsible innovation. At the
Speaker 14: same time, my view on crypto has been that we
Speaker 14: need to address us some of the scams that have
Speaker 14: been taking advantage of consumers and causing real financial harm.
Speaker 14: We also need to look at steps we can take
Speaker 14: to insulate the broader financial system from any issues they
Speaker 14: may arise in the crypto space, and we need to
Speaker 14: do something to address money laundering and other ways of
Speaker 14: using crypto to evade the rules that we have for
Speaker 14: the rest of the financial system. I think that there
Speaker 14: are ways of doing that while at the same time
Speaker 14: creating an atmosphere that allows innovation to proceed. Obviously, the
Speaker 14: devil's and the details on how you strike that balance,
Speaker 14: but I think ultimately that should be the goal.
Speaker 2: Brod's great to have you back. Brought Rama Murdy now
Speaker 2: with the senior advisor, i should say, for economic strategy
Speaker 2: at the American Economic Liberties Project, formally advising the Biden
Speaker 2: White House on the economy. Barrot, Rama Murdy, thank you.
Speaker 2: Thanks for listening to the Balance of Power podcast. Make
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