WEBVTT - Surveillance: Trump Could Boost Europe, Haass Says 0:00:00.040 --> 0:00:02.640 Who you put your trust in matters. Investors have put 0:00:02.680 --> 0:00:07.040 their trust and independent registered investment advisors to the two 0:00:07.040 --> 0:00:10.680 and four trillion dollars. Why learn more and find your 0:00:10.760 --> 0:00:26.360 independent advisor dot com. Welcome to the Bloomberg Surveillance Podcast. 0:00:26.760 --> 0:00:30.480 I'm Tom Keene with David Gura. Daily we bring you 0:00:30.520 --> 0:00:35.560 insight from the best in economics, finance, investment and international relations. 0:00:35.960 --> 0:00:40.559 Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot com, and 0:00:40.640 --> 0:00:48.160 of course on the Bloomberg. This is really a joy. 0:00:48.159 --> 0:00:50.440 We're gonna talk markets here in the correlations that we 0:00:50.479 --> 0:00:54.320 see right now. With two people totally unqualified to strategize 0:00:54.600 --> 0:00:56.800 on the markets, that's always a good thing. On surveillance. 0:00:56.840 --> 0:00:59.400 Michael Spence as a laureate from n y U. He 0:00:59.440 --> 0:01:03.360 has more than qualified to talk about information within our 0:01:03.360 --> 0:01:07.160 society and systems. And Richard Haas has a most interesting 0:01:07.560 --> 0:01:12.959 uh CV and bio on political economics and international relations. 0:01:13.120 --> 0:01:15.479 I want to begin with you, ambassador, if I could 0:01:15.480 --> 0:01:18.120 you have a fabulous moment in your new book on 0:01:18.360 --> 0:01:21.160 the World Order. You go from Henry Kissinger's World Order 0:01:21.200 --> 0:01:23.640 onto whatever the new world order is, and you have 0:01:23.760 --> 0:01:28.080 a phrase as if the tide goes out, we shift 0:01:28.160 --> 0:01:31.840 from World War Two, and we're how our markets adapting 0:01:32.200 --> 0:01:36.080 to this subtle chronic shift. You see as the tide 0:01:36.080 --> 0:01:39.000 goes out, well, the short answers they're having trouble. You 0:01:39.080 --> 0:01:41.479 used to have certain structures and rules in the world. 0:01:41.560 --> 0:01:43.480 We had, for example, all the discipline of the of 0:01:43.480 --> 0:01:46.160 the Cold War, and when that ended, we found ourselves 0:01:46.200 --> 0:01:49.160 somewhat lacking and the other institutions really weren't quite up 0:01:49.160 --> 0:01:50.720 to it. And I think we're at a moment in 0:01:50.840 --> 0:01:54.680 history where globalization and virtually every one of its manifestations 0:01:54.760 --> 0:01:58.120 or dimensions is moving at a faster, more robust pace 0:01:58.520 --> 0:02:01.200 than politics can catch shops. So we see gaps of 0:02:02.120 --> 0:02:05.280 for example, take one cyber that's probably the largest gap 0:02:05.280 --> 0:02:09.040 where the technologies are at one end really really rapidly 0:02:08.400 --> 0:02:11.840 and profound effects. And the rules it's like the wild West. 0:02:12.080 --> 0:02:14.440 The world hasn't begun to set rules. Plus there's no 0:02:14.560 --> 0:02:17.720 sheriff if in one various actors violate what rules there are. 0:02:17.760 --> 0:02:21.079 In Professor spent, you have prodigious mathematical abilities here. And 0:02:21.120 --> 0:02:24.079 when I hear Haws to talk about speed, I look 0:02:24.120 --> 0:02:26.840 at from an electrical engineering standpoint to slew rates, the 0:02:26.880 --> 0:02:31.000 abrupt changes within any system and circuitry. From where you sit, 0:02:31.200 --> 0:02:34.560 our our markets able to keep up with the modern 0:02:34.720 --> 0:02:38.680 slew rates of globalization. Yeah, the markets can keep up 0:02:38.720 --> 0:02:42.200 with it, but the the economy can't. Uh. And so 0:02:42.440 --> 0:02:44.800 I think what you're getting out of Trump is something 0:02:44.880 --> 0:02:48.680 quite interesting. Basically, we have lived in the world in 0:02:48.760 --> 0:02:51.800 which we in America were took the lead in creating 0:02:51.840 --> 0:02:54.320 this sort of global system, and then we said, we 0:02:54.360 --> 0:02:57.560 can't touch that system because it yields huge benefits. And 0:02:57.639 --> 0:03:01.960 it does, and so we did. So take the labor markets, 0:03:02.040 --> 0:03:04.600 you know, the demand side moves around because of technology 0:03:04.600 --> 0:03:08.480 and globalization, and we're supposed to adapt. And Trump is saying, no, 0:03:08.600 --> 0:03:11.880 I'm reversing those priorities. Right, We're gonna do what it 0:03:11.919 --> 0:03:14.519 takes to make our economy function in a way that 0:03:14.600 --> 0:03:19.280 satisfactory to the citizens. And then adults can negotiate mutually 0:03:19.320 --> 0:03:23.600 beneficial arrangements. So he's going to interfere, you know, with 0:03:23.639 --> 0:03:26.440 a whole lot of things that used to be untouchable before, 0:03:27.440 --> 0:03:31.000 so that Donald Trump satisfies Americans. For how long I 0:03:31.040 --> 0:03:33.040 was speaking to in the Rothschild and she was talking 0:03:33.040 --> 0:03:36.160 about inclusive capitalism. It was on Friday in Rome, and 0:03:36.200 --> 0:03:40.000 she reminded me there are three million truck drivers in America. 0:03:40.080 --> 0:03:42.880 When we start having driverless cars, it could be three years, 0:03:42.920 --> 0:03:46.280 four years, five years away. Then those people will lose 0:03:46.280 --> 0:03:48.880 their jobs at the end of the day. So if 0:03:48.960 --> 0:03:52.800 you refocus on manufacturing, how long can you how long 0:03:52.840 --> 0:03:57.240 can you basically reflight the economy for and keep people happy? Well, 0:03:58.200 --> 0:04:01.760 in fairness, I mean, I don't think um President elect 0:04:01.760 --> 0:04:06.200 Trump is relying on manufacturing only to reflate the economy. 0:04:06.280 --> 0:04:10.360 What he's concerned about is getting on with the process 0:04:10.440 --> 0:04:13.680 of of having the economy and our labor force and 0:04:13.760 --> 0:04:17.400 our human capital adapt to this new world. But what 0:04:17.440 --> 0:04:21.200 he is saying in part is if we can't adapt 0:04:21.240 --> 0:04:23.599 fast enough, we'll change the rate at which we have 0:04:23.720 --> 0:04:25.880 to adapt. But can I pick up on some sequence 0:04:25.960 --> 0:04:28.839 and said, there's a mismatch. The cause of most of 0:04:28.839 --> 0:04:32.560 the job dislocation is technological innovation, and the essence of 0:04:32.600 --> 0:04:35.120 the polar response is to pin the tail on the 0:04:35.200 --> 0:04:38.359 donkey of either trade or offshoring. And there's a mismatch. 0:04:38.520 --> 0:04:41.200 So even if the so called cures being put forward 0:04:41.520 --> 0:04:44.320 now by the political process go forward, it won't cure 0:04:44.360 --> 0:04:47.080 the problem, and millions of Americans will still face job 0:04:47.120 --> 0:04:49.599 dis place But we haven't begun a serious debate in 0:04:49.600 --> 0:04:52.800 this country about what to do about robotics and artificial 0:04:52.839 --> 0:04:55.760 intelligence and driverless vehicles and how we're going to cope 0:04:55.760 --> 0:04:58.720 With a spirited conversation with Michael Spence, the Lord from 0:04:58.720 --> 0:05:02.520 New York University and Ambassador House of the Consul and formulations, 0:05:02.520 --> 0:05:04.000 what an honor to have the two of you here 0:05:04.000 --> 0:05:06.880 with all that's going on in the distill And really, folks, 0:05:06.920 --> 0:05:09.240 we were talking about this on the break, about the 0:05:09.320 --> 0:05:12.520 old in the new ambassador has, how Reagan has. There's 0:05:12.560 --> 0:05:14.560 so many articles I want to be like Reagan. I'm 0:05:14.600 --> 0:05:17.599 like Reagan, Come on, you can't mean it's not the 0:05:17.640 --> 0:05:21.240 same world as President Reagan had. First of all, it's 0:05:21.279 --> 0:05:23.520 not the same person as Ronald Reagan. Ronald Reagan came 0:05:23.520 --> 0:05:25.880 into office with a really developed philosophy. He may have 0:05:25.880 --> 0:05:28.000 been underestimated by a lot of the pundits, but they 0:05:28.040 --> 0:05:31.119 missed it. He had written those letters and articles for years, 0:05:31.120 --> 0:05:34.440 given hundreds and hundreds of policy speeches. Plus politics were 0:05:34.440 --> 0:05:38.560 different when Reagan was there. Washington was a much more malleable, functional, 0:05:38.600 --> 0:05:41.960 place now because the funding reforms and other reforms about 0:05:41.960 --> 0:05:45.160 how politics are conducted, how the society has changed. It's 0:05:45.279 --> 0:05:49.520 much harder to to garner concentrated political power, so that 0:05:49.720 --> 0:05:52.240 the parallels to Reagan, I think are not going to 0:05:52.560 --> 0:05:55.279 But there is something, and Michael called it animal spirits, 0:05:55.560 --> 0:05:59.520 there is a sense of with with where we are economically, 0:05:59.560 --> 0:06:01.800 that this is a moment where we're gonna go from 0:06:01.839 --> 0:06:04.800 probably an under two percent pro long rate of growth 0:06:05.000 --> 0:06:07.960 to something much higher with some sort of combination of 0:06:08.000 --> 0:06:12.200 corporate tax reform, individual tax reform, and finally some fiscal spending. 0:06:12.400 --> 0:06:14.400 It's almost as if we're saying the era in which 0:06:14.440 --> 0:06:16.960 the only game in town was monetary power and what 0:06:17.000 --> 0:06:19.279 the central bankers can do is over and now we 0:06:19.400 --> 0:06:23.280 finally have something larger going on in Washington, right, Richard, 0:06:23.320 --> 0:06:26.600 two questions on that, So recon reconomics, you you know, right, 0:06:26.640 --> 0:06:29.240 we point out the differences, the differences, but actually he 0:06:29.279 --> 0:06:32.440 did produce large fiscal deficits and the ultra strong dollar 0:06:32.560 --> 0:06:35.440 if we do see the same thing from Donald Trump. 0:06:35.440 --> 0:06:37.839 But also may mean that actually Europe it becomes a 0:06:37.880 --> 0:06:40.680 lot more competitive because the euro goes down. So you 0:06:40.720 --> 0:06:42.839 could argue that Donald Trump. At the end of the day, 0:06:43.080 --> 0:06:48.520 we'll save the Eurozone. That you've now discovered the hidden 0:06:48.560 --> 0:06:51.599 agenda of the of the Trump of presidency is to 0:06:51.680 --> 0:06:54.920 save the ears. Well, I thought it was a secret 0:06:54.920 --> 0:06:57.279 that was only between us. I think it'll take a 0:06:57.279 --> 0:07:00.560 little bit more than that, but it could have some 0:07:00.600 --> 0:07:05.599 effects that, yes, are advantageous for for European uh, for Europeans. 0:07:05.600 --> 0:07:08.159 But let's not kid ourselves. What Europeans doing don't do 0:07:08.279 --> 0:07:10.560 is gonna have a fight far greater impact on their 0:07:10.560 --> 0:07:12.760 own future. No about Lauriate Michael Spence at the Stern 0:07:12.800 --> 0:07:14.880 School of Business at n y U and Ambassador Richard Hass, 0:07:14.880 --> 0:07:17.280 President of the Council and Form Relations, author of A 0:07:17.360 --> 0:07:20.720 World in Disarray, American Foreign Policy and the Crisis of 0:07:20.800 --> 0:07:23.120 the Old Order, out just in time for inauguration. Penguin 0:07:23.160 --> 0:07:26.000 Press schedule to publish that book on January the tenth, 0:07:26.400 --> 0:07:28.160 and Richard host let's start there. Let's start with the 0:07:28.160 --> 0:07:30.400 Old Order and what comes next. We've heard Donald Trump 0:07:30.440 --> 0:07:34.040 fulminating on his set his thank you tour across the 0:07:34.040 --> 0:07:36.600 country in Faietville, North Carolina, last night. Are we any 0:07:36.600 --> 0:07:38.720 closer here to getting a sense of what what his 0:07:38.800 --> 0:07:42.080 brand of foreign policy is the short answer is no, 0:07:42.760 --> 0:07:45.000 most of the team is not in place. We obviously 0:07:45.000 --> 0:07:48.120 still don't have a Secretary of State. And even after 0:07:48.160 --> 0:07:50.560 you staff up, usually the first few months of any 0:07:50.560 --> 0:07:55.480 administrations are consumed by interagency reviews of pretty much everything 0:07:55.520 --> 0:07:59.800 you've got, from crisis to standing UH situations. So my 0:07:59.800 --> 0:08:02.080 my senses, we're not going to have a developed view 0:08:02.160 --> 0:08:04.920 probably till late spring. But in the meantime we are 0:08:04.960 --> 0:08:08.360 getting some specifics, the fact that t PP, the Transpacific 0:08:08.440 --> 0:08:12.520 Trade Agreement is essentially no longer, the questioning of the 0:08:12.560 --> 0:08:18.080 One China policy after several UH decades. We had certain 0:08:18.120 --> 0:08:21.080 statements in the campaign made which again raise at least 0:08:21.120 --> 0:08:25.240 the some questions about the long term standing of some 0:08:25.520 --> 0:08:29.360 tradish traditional features of American foreign policy. So there will 0:08:29.400 --> 0:08:31.960 be elements of change or disruption. I think the the 0:08:31.960 --> 0:08:34.720 honest answer, though, is we don't quite know what the 0:08:34.760 --> 0:08:38.480 balances between UH, the old order and the new, and 0:08:38.520 --> 0:08:40.920 what exactly a new order or disorder might look like. 0:08:41.240 --> 0:08:43.600 Prefensi respub struck by how much of foreign policy right 0:08:43.640 --> 0:08:46.360 now is being driven by economics, and when when you 0:08:46.360 --> 0:08:48.880 look at recent history, how new a thing is that, 0:08:48.920 --> 0:08:50.760 How novel is that that we are seeing so much. 0:08:50.800 --> 0:08:53.240 Be it the relationship with China and Taiwan, be what 0:08:53.320 --> 0:08:55.920 we saw in Italy earlier this week. It's economics that's 0:08:55.920 --> 0:08:58.640 the driving force. Well, it is because you know, for 0:08:58.679 --> 0:09:02.880 a long time we had deteriorating uh, you know, distributional 0:09:02.920 --> 0:09:05.280 aspects of growth patterns. But they have now burst on 0:09:05.320 --> 0:09:09.520 the scene. So it's impossible to ignore it any longer politically, 0:09:09.520 --> 0:09:12.640 and that is spilling over into you know, the way 0:09:12.679 --> 0:09:15.440 we formulate how we deal with the rest of the world. Now, 0:09:15.440 --> 0:09:19.880 we may over emphasize globalization and under emphasized technology as 0:09:19.920 --> 0:09:23.080 part of the political process. But but the simple fact 0:09:23.200 --> 0:09:26.880 is that that the what has come to be called 0:09:26.960 --> 0:09:30.000 job and income polarization in the middle class element is 0:09:30.040 --> 0:09:33.800 just too large to be set aside politically anymore in 0:09:33.880 --> 0:09:36.479 any system. You and I last spoke before that referendum 0:09:36.640 --> 0:09:38.960 in Italy, and you spend a lot of time in 0:09:39.000 --> 0:09:41.920 that country. We talked about the referendum. Then looking at 0:09:41.960 --> 0:09:45.080 what happened on Sunday, what's the best prism through which 0:09:45.120 --> 0:09:48.040 to see what happened there? Can we draw a broader 0:09:48.080 --> 0:09:53.000 conclusion about populace sentiment in Europe largely globally or was 0:09:53.000 --> 0:09:56.920 this a domestic domestic vote. Yeah, it's a Sorry, it's 0:09:56.920 --> 0:09:59.440 a mixed case. So you what you would not want 0:09:59.440 --> 0:10:04.160 to mean. Popular sentiment is gaining ground in Europe uh 0:10:04.200 --> 0:10:07.360 as well as here. So that's a general trend. Uh, 0:10:07.400 --> 0:10:10.239 But that trend is not yet strong enough to have determined, 0:10:10.400 --> 0:10:14.160 you know, a sixty forty loss for the So there's 0:10:14.200 --> 0:10:20.200 idiosyncratic factors. Uh, there's a political system that people benefit 0:10:20.280 --> 0:10:23.200 from that somewhat corrupted much of the country that was 0:10:23.280 --> 0:10:26.440 going to be challenged if the referendum passed. So that 0:10:26.480 --> 0:10:29.640 you've you've got a whole set of other people voting 0:10:29.640 --> 0:10:33.280 no for different reasons, you know, not just the nationalist 0:10:33.320 --> 0:10:37.200 populist ones. That's your hots going into that referendum. Uh. 0:10:37.320 --> 0:10:39.080 Looking at the banks now, a lot of people said, 0:10:39.480 --> 0:10:42.600 look to Greece as an example, uh, an illustrative example 0:10:42.600 --> 0:10:44.520 of what might be happen in Italy. What countries are 0:10:44.520 --> 0:10:47.640 watching what's unfolding Italy now in light of that referendum. Well, 0:10:47.679 --> 0:10:49.599 the Germans are watching us. They're wondering how much of 0:10:49.640 --> 0:10:51.880 their wallet is going to get back to UH to 0:10:52.000 --> 0:10:54.880 pay for it. I think that's probably number one and 0:10:54.880 --> 0:10:56.600 the Greece there also going to look at to see 0:10:56.640 --> 0:10:59.040 what's the latest mood in Europe to to bail out 0:10:59.720 --> 0:11:03.000 the who are who are weak. And I assume people 0:11:03.040 --> 0:11:06.160 like Mr drag Or spending really fairly long hours at 0:11:06.160 --> 0:11:09.000 the office figuring out exactly what they're gonna have to do. 0:11:09.040 --> 0:11:13.840 And again it highlights the the precarious balance between national 0:11:13.880 --> 0:11:18.720 economic performance and what Brussels and It is meant to do. 0:11:18.800 --> 0:11:21.440 And the and the problem is you can't discipline national 0:11:21.440 --> 0:11:24.760 economic performance in some ways because people are scared to 0:11:24.760 --> 0:11:26.719 see that through its tent end because it might mean 0:11:26.760 --> 0:11:29.400 certain countries have to exit. So you're always there a 0:11:29.400 --> 0:11:32.880 little bit as the banker of last resort, which destroys 0:11:32.880 --> 0:11:35.079 a lot of the discipline. So you've got the EU 0:11:35.240 --> 0:11:38.320 on this. It's kind of addicted to a degree of 0:11:38.400 --> 0:11:41.720 external help and a failure to really discipline things as 0:11:41.800 --> 0:11:45.160 much as you might want to. Impurely economic Let's I 0:11:45.200 --> 0:11:47.400 want to go there the proverbial can. How do you 0:11:47.440 --> 0:11:49.640 say kick the can down the road in Italian? I 0:11:49.640 --> 0:11:54.920 don't know, we won't make it up. But wait, that's 0:11:54.920 --> 0:11:58.520 how I got through foreign language at school. Uh Richard 0:11:58.520 --> 0:12:01.400 asked with this Michael Spence this morning. Good morning, It 0:12:01.440 --> 0:12:06.400 has been an interesting morning of conversation here at Bloomberg Surveillance. 0:12:06.800 --> 0:12:12.080 It has been Professor spends one considered and continuous can 0:12:12.120 --> 0:12:15.439 down the road. How do you break that? And allahyak, 0:12:15.559 --> 0:12:19.240 how do you clear markets? It's crisis every time, isn't No. 0:12:19.400 --> 0:12:23.040 I actually think it's simple if you take the the 0:12:23.040 --> 0:12:27.600 Europe or the Eurozone's entire capacity, uh, to sort of 0:12:27.840 --> 0:12:30.720 do what Trump is saying he's going to do, admitting 0:12:30.760 --> 0:12:35.560 there's uncertainty, use fiscal measures to make it easier to 0:12:35.600 --> 0:12:38.000 do the structural reforms. They could change the growth pattern. 0:12:38.480 --> 0:12:41.079 Now cynics will say that's not very likely, but it's not. 0:12:41.320 --> 0:12:45.080 It's not very hard, uh to see what path. You know, 0:12:45.160 --> 0:12:47.480 if you started going down that path, Roggy could raise 0:12:47.520 --> 0:12:50.560 the interest rates. Then they'd start the restructuring that that 0:12:50.679 --> 0:12:53.920 Richard talked about. You know, Italy couldn't sit there with 0:12:53.960 --> 0:12:56.440 a sovereign debt, the GDP ratio of a D thirty 0:12:56.440 --> 0:12:58.840 five per cent and a whole lot of good things 0:12:59.040 --> 0:13:02.240 they're painful with start to happen. But right now it's 0:13:02.280 --> 0:13:06.280 sort of locked in its current configuration. Lockton's current configuration 0:13:06.559 --> 0:13:08.280 and Ambassador Hasse I wonder when you when you look 0:13:08.320 --> 0:13:13.319 at Europe today, at the economic underpinnings and the security underpinnings, 0:13:13.880 --> 0:13:16.280 which is stronger, What what's the most compelling case here 0:13:16.280 --> 0:13:19.360 for the European project at this point, the security case 0:13:19.480 --> 0:13:22.760 is the most compelling. People take for granted the extraordinary 0:13:22.800 --> 0:13:26.160 contribution again of what's happened in Europe over the last 0:13:26.240 --> 0:13:30.240 what seventy odd years the world. You had World War 0:13:30.280 --> 0:13:33.120 One on World War Two in Europe, and the whole 0:13:33.120 --> 0:13:35.560 idea of what began as the Coal and Steel community 0:13:36.040 --> 0:13:39.280 was to knit together and integrate Europe so much the 0:13:39.280 --> 0:13:44.319 war would become literally unthinkable and undoable, and it's succeeded. 0:13:44.480 --> 0:13:48.360 The fact that Western Europe has been as geopolitically stable 0:13:48.440 --> 0:13:50.720 as it's been now for three quarters of a century. 0:13:50.920 --> 0:13:53.560 It's a little bit like oxygen. You take it for granted, 0:13:53.760 --> 0:13:55.800 but when you look back and you compare the last 0:13:55.800 --> 0:13:58.160 seventy five years but the fifty years that preceded it, 0:13:58.280 --> 0:14:01.120 it is it is one of the world's great great accomplishments. 0:14:01.120 --> 0:14:03.559 And what worries me is so many of these votes 0:14:03.600 --> 0:14:05.760 and so many of these political decisions, from Gregxit to 0:14:05.840 --> 0:14:09.199 what have you are being made on really narrow calculus 0:14:09.280 --> 0:14:12.920 is of of the trading arrangement or the economics. How 0:14:13.000 --> 0:14:15.760 much money is going back and forth between Brussels, and 0:14:15.800 --> 0:14:20.120 no one seems to be considering this larger geopolitical historical thing. 0:14:20.920 --> 0:14:23.280 It's at stake, but no one seems to be taking 0:14:23.280 --> 0:14:26.600 it into account. It's the shortsightedness and narrowness of the 0:14:26.640 --> 0:14:31.480 European political votes right now that frightened me. Looking Inbastador, 0:14:31.560 --> 0:14:33.800 Springs have multi ladderism here, and I guess we could 0:14:33.800 --> 0:14:35.920 say we are multi ladderism light of what we saw 0:14:35.960 --> 0:14:38.880 here in the US and what we saw perhaps in 0:14:38.920 --> 0:14:42.040 the United Kingdom before that. Are we at a point 0:14:42.040 --> 0:14:46.640 where our trade policy investors Professor's fenses is, is going 0:14:46.680 --> 0:14:49.160 to be purely bilateral. We're gonna have a patchwork quilt 0:14:49.160 --> 0:14:51.720 here of trade deals. Well, it certainly sounds like we're 0:14:51.760 --> 0:14:53.520 going in that direction. I mean, it doesn't have to 0:14:53.560 --> 0:14:56.400 be all bilateral, but it's certainly not going to be 0:14:56.520 --> 0:14:59.960 multi multilateral. I think that's stalled. And one of the 0:15:00.040 --> 0:15:03.840 reason installed is that in in the in the framework 0:15:03.920 --> 0:15:07.200 where you negotiate with adults, you know and find where 0:15:07.200 --> 0:15:11.920 your mutual interests overlap. You can't do the multilateral thing 0:15:11.920 --> 0:15:15.360 because the multilateral thing survived because America was willing to 0:15:15.400 --> 0:15:18.520 absorb more of the burden of providing the public goods. 0:15:18.920 --> 0:15:22.760 And if we find it impossible or we are unwilling 0:15:22.800 --> 0:15:26.200 to do that anymore, I think that just kicks the 0:15:26.200 --> 0:15:29.880 foundations out from underneath the multilateral system. Because Richard Hass 0:15:30.040 --> 0:15:33.760 and Michael Spence h Professor Hass the Ambassador has a 0:15:33.800 --> 0:15:36.080 book coming out, The World in Disarray, which I think 0:15:36.080 --> 0:15:38.880 we can all agree with, and and part of that 0:15:39.440 --> 0:15:41.800 is this shifting foreign policy, and let's call it from 0:15:41.840 --> 0:15:45.600 a traditional world order maybe Dr Kissinger's world order of 0:15:45.600 --> 0:15:49.400 a Westphalian system, to maybe for Red Zakaria's post American 0:15:49.480 --> 0:15:54.000 world and maybe to a new isolationism. What you're so 0:15:54.040 --> 0:15:57.440 good at is not what we observe, but what is 0:15:57.520 --> 0:16:00.960 not there. What will be the that hume if we 0:16:01.040 --> 0:16:06.720 don't participate in the world economy and in international relations. Well, 0:16:06.800 --> 0:16:09.360 there's a whole set of what you might tom you 0:16:09.440 --> 0:16:12.600 might call public goods. I mean, you know that range 0:16:12.640 --> 0:16:16.080 from stability to providing the currency that supports the sort 0:16:16.080 --> 0:16:19.080 of global system. And the United States has had an 0:16:19.120 --> 0:16:23.120 absolutely central role in that in the entire post war period. 0:16:23.360 --> 0:16:27.200 So I think the vacuum is the public goods that 0:16:27.240 --> 0:16:31.480 support the international system, those public goods, Ambassador Hastening, And 0:16:31.560 --> 0:16:33.840 this goes to the certitude. I mean, just on the 0:16:33.880 --> 0:16:38.240 Boeing discussion yesterday from the President elect, how can the 0:16:38.320 --> 0:16:43.720 president frame his popular certitude and keep us in the 0:16:43.800 --> 0:16:48.400 consul and foreign relations game? Uh? Not going to be easy? 0:16:48.480 --> 0:16:51.720 And Professor Spencers exactly right. You know, we have provided 0:16:51.760 --> 0:16:54.200 a lot of public goods. Americans at times she more 0:16:54.280 --> 0:16:56.560 aware of the costs than they do of the benefits, 0:16:56.920 --> 0:17:01.280 partially extremined people of the benefits, the extraordinnary stability in 0:17:01.320 --> 0:17:05.560 the world, the extraordinary economic growth that we have benefited 0:17:05.760 --> 0:17:08.800 uh from it it, all things being equal, as as 0:17:08.840 --> 0:17:12.680 as decades and most of centuries go, the post World 0:17:12.720 --> 0:17:17.080 War two era has been extraordinarily generous and favorable, uh 0:17:17.200 --> 0:17:19.600 to to the United States. And I think when people 0:17:19.640 --> 0:17:21.720 look at it, they need to look at both sides 0:17:21.760 --> 0:17:24.240 of the ledger. And sure we've made mistakes, and sure 0:17:24.320 --> 0:17:27.480 some things have cost but actually the biggest mistakes were 0:17:27.520 --> 0:17:31.080 nothing were what what we're Vietnam and the Iraq War, 0:17:31.320 --> 0:17:34.400 those were bell Those were both self generated self inflicted. 0:17:34.600 --> 0:17:37.560 But most of what we were done, the alliance systems 0:17:37.560 --> 0:17:40.640 in Asia and Europe have kept stability the Great Trading 0:17:40.680 --> 0:17:44.600 and other economic institutional arrangements. Yes, we've we've made them possible, 0:17:44.640 --> 0:17:46.680 but we have in some ways been the greatest beneficiary. 0:17:47.760 --> 0:17:49.919 I want to ask you about some some tweets in particular. 0:17:50.000 --> 0:17:52.440 That's how we're talking about foreign policy these days. We 0:17:52.440 --> 0:17:54.879 we saw the tweets about China. We heard about the 0:17:54.880 --> 0:17:59.600 phone call with the president of Taiwan. You've recently returned 0:17:59.600 --> 0:18:01.720 from China. Know what do what do the people that 0:18:01.760 --> 0:18:03.679 you talk to their make of the the outcome of 0:18:03.680 --> 0:18:07.399 that election and the prospects for this presidency going forward. 0:18:07.720 --> 0:18:10.959 You see the adversarial nous in the nature of those tweets, 0:18:10.960 --> 0:18:13.240 in the nature of the rhetoric. What's their sense of 0:18:13.240 --> 0:18:15.359 what's to come? Well, when I was there, which was 0:18:15.440 --> 0:18:18.160 just before all this hit the fan, the general view 0:18:18.240 --> 0:18:20.720 was uncertainty of as to what to expect. Virtually all 0:18:20.720 --> 0:18:23.520 my meetings with high ranking Chinese officials was to ask 0:18:23.560 --> 0:18:26.720 me to basically translate Donald Trump into Mandarin. There was 0:18:26.760 --> 0:18:29.560 a clear desire for the job in that I think 0:18:29.600 --> 0:18:34.360 there was a clear desire for continued positive US Chinese relations, 0:18:34.359 --> 0:18:37.000 which have been quite good over over the years, and 0:18:37.080 --> 0:18:38.679 now this has come in. What I think this has 0:18:38.760 --> 0:18:42.399 done is put into play uncertainty about the One China 0:18:42.480 --> 0:18:44.840 policy and just more broadly, what will be the tenor 0:18:44.880 --> 0:18:48.000 of US China relations under this new presidency. And the 0:18:48.080 --> 0:18:51.280 Chinese haven't quite figured out how to react that. They 0:18:51.280 --> 0:18:53.680 don't want this to escalate. They do want to still 0:18:53.720 --> 0:18:56.720 have a stable relationship with stable regions, but they are 0:18:56.840 --> 0:18:59.720 genuinely concerned. If you read it, the tenor of their 0:18:59.720 --> 0:19:03.640 pub the comments has gotten successively tougher if you look 0:19:03.680 --> 0:19:05.359 at their initial kind of let's we're not going to 0:19:05.440 --> 0:19:08.119 overreact to the phone call, to what the People's Daily 0:19:08.160 --> 0:19:11.600 has said in subsequent editorials. They are generally concerned about 0:19:11.600 --> 0:19:15.720 the thrust of US policy. David notices Richard Hass Mr 0:19:15.720 --> 0:19:17.960 Trump will up here with NBC's Today's Show. Here in 0:19:18.000 --> 0:19:20.359 a bit, what is the question you would ask the 0:19:20.359 --> 0:19:22.919 President elect right now? Well, I would get him to 0:19:22.960 --> 0:19:26.440 specifically react to the One China policy and his view 0:19:26.920 --> 0:19:31.560 about the importance of China and US Chinese relations to 0:19:31.560 --> 0:19:33.600 to the world, to basically get him to take a 0:19:33.640 --> 0:19:36.560 step back from some of the smallness of fuel relative 0:19:36.600 --> 0:19:39.199 smallness of the Taiwan issue, to get a sense of 0:19:39.200 --> 0:19:43.840 whether he buys into this larger structure that has has 0:19:43.880 --> 0:19:46.480 been the status quo now for several decades. Professor Suspencer, 0:19:46.560 --> 0:19:50.400 your question to the President elect, I would ask him 0:19:50.400 --> 0:19:54.560 how he's going to negotiate with China. My view is that, um, 0:19:54.760 --> 0:19:58.159 the relationship so much the same as Richard has no 0:19:58.400 --> 0:20:01.080 I mean, I mean he's already asked quite why challenge 0:20:01.119 --> 0:20:03.400 them on the one thing that's a non negotiable I mean, 0:20:03.480 --> 0:20:06.760 it doesn't make any sense to me, uh, whereas all 0:20:06.800 --> 0:20:09.600 the other things are negotiable. So I'd ask them, you know, well, 0:20:09.600 --> 0:20:11.359 what about the rest of the agenda? How are we 0:20:11.359 --> 0:20:13.359 going to deal with trade? How are we going to 0:20:13.440 --> 0:20:16.440 deal with financial flows, etcetera. And the biggest issue could 0:20:16.480 --> 0:20:19.800 be likely North Korea. The biggest geopolitical issue facing this 0:20:19.880 --> 0:20:22.520 administration over the next four years is likely to be 0:20:22.560 --> 0:20:25.040 the advance of North Korean missile in nuclear capability. I 0:20:25.040 --> 0:20:27.640 was gonna say traffic on, but I guess that's why 0:20:27.920 --> 0:20:40.960 that's that's beyond that's impossible. Who you put your trust 0:20:41.000 --> 0:20:45.240 in matters. Investors have put their trust in independent registered 0:20:45.320 --> 0:20:49.160 investment advisors to the tune of four trillion dollars. Why 0:20:49.359 --> 0:20:52.480 they see their roles to serve, not sell. That's why 0:20:52.560 --> 0:20:56.360 Charles Schwab is committed to the success over seven thousand 0:20:56.760 --> 0:21:02.600 independent financial advisors who passionately dedicate themselves to helping people 0:21:02.720 --> 0:21:07.720 achieve their financial goals. Learn more at find your independent 0:21:07.800 --> 0:21:17.240 advisor dot com. It's another time of year, David Gura, 0:21:17.680 --> 0:21:20.840 he would show up with to go from the Portland 0:21:20.960 --> 0:21:25.600 lobster coming. Unfortunately it's the dead of December. They're not 0:21:25.640 --> 0:21:29.240 even open, Jurd Cassidy are they know? They're not shut down. 0:21:29.320 --> 0:21:32.120 They shut down because it's a strange thing called winter. 0:21:33.359 --> 0:21:37.280 Showed up. Lobster taste is better in cold water, like 0:21:37.359 --> 0:21:40.360 oysters do they Is lobster better now? I would say 0:21:41.480 --> 0:21:43.760 not so much better, but the heart shells are more plentiful, 0:21:43.800 --> 0:21:45.760 so they tend to be better than the soft shelves. 0:21:45.840 --> 0:21:48.159 There we go our lobsters science and it must mean 0:21:48.200 --> 0:21:51.640 Gerard Cassidy is dark in the door with OURBC Capital 0:21:51.680 --> 0:21:56.080 Markets decades of experience and looking at our banks. Let 0:21:56.080 --> 0:21:58.119 me start with a broader question before we kill you 0:21:58.119 --> 0:22:02.080 with the mergers and acquisition ants. What drives you nuts 0:22:02.320 --> 0:22:06.199 about the zeitgeist now on American banks? You're such an 0:22:06.240 --> 0:22:10.479 observer of the certitude of people on our financial system. 0:22:10.760 --> 0:22:13.399 What are we most getting wrong? I would say today, 0:22:13.560 --> 0:22:16.720 I think the bank stock says, you know, since the election, 0:22:16.800 --> 0:22:18.919 have been just a great place to be Tom, and 0:22:18.960 --> 0:22:22.080