1 00:00:06,320 --> 00:00:12,960 Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Daily we bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:34,239 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. One 5 00:00:34,240 --> 00:00:36,639 Speaker 1: of the great stories of Davos is away from all 6 00:00:36,680 --> 00:00:40,440 Speaker 1: the fancy guests, the CEOs, the gazillionaires, and that this 7 00:00:40,640 --> 00:00:45,680 Speaker 1: place as a wonderful set of policy makers, thinkers about 8 00:00:45,840 --> 00:00:49,800 Speaker 1: what we actually do. Tony Fratto I saw last night, 9 00:00:49,840 --> 00:00:54,560 Speaker 1: of course, his representation of President Bush, Eric Cantor Republican 10 00:00:54,600 --> 00:00:57,640 Speaker 1: congressman for years, and it was good to see as well. 11 00:00:58,040 --> 00:01:00,920 Speaker 1: Jane Spurling, he has a tennis play here from Minnesota, 12 00:01:01,360 --> 00:01:03,600 Speaker 1: and of course to not one but two tours of 13 00:01:03,680 --> 00:01:07,880 Speaker 1: duty with a National Economic Council for Democrat at presidents Jean, 14 00:01:07,959 --> 00:01:11,440 Speaker 1: wonderful to catch up with you. How does this president 15 00:01:11,600 --> 00:01:15,040 Speaker 1: avoid a double fault you're on the other side of 16 00:01:15,080 --> 00:01:19,000 Speaker 1: the aisle. How does this president get through this widely 17 00:01:19,040 --> 00:01:25,759 Speaker 1: anticipated speech? Well, I think it's difficult for him because 18 00:01:26,160 --> 00:01:29,080 Speaker 1: you know, on one hand, he's coming to Davos at 19 00:01:29,080 --> 00:01:31,400 Speaker 1: a time where it's you know, Tom, It's not like 20 00:01:31,959 --> 00:01:35,320 Speaker 1: two thousand and nine, you know, where you know, or 21 00:01:35,440 --> 00:01:38,480 Speaker 1: other times where that the economy is really you know, 22 00:01:38,520 --> 00:01:40,880 Speaker 1: in danger. This is the time where the U. S. 23 00:01:40,959 --> 00:01:46,120 Speaker 1: Economy has been growing for eight years, the global economy 24 00:01:46,200 --> 00:01:49,000 Speaker 1: is looking a little bit solid, so there's not a 25 00:01:49,040 --> 00:01:53,160 Speaker 1: sense of panic. He's obviously trying to in every way. 26 00:01:53,160 --> 00:01:55,480 Speaker 1: He can take a little credit for it, But I 27 00:01:55,520 --> 00:01:58,080 Speaker 1: think the hard thing is is that he has proven 28 00:01:58,760 --> 00:02:01,960 Speaker 1: to be, both at home and abroad, a very divisive figure. 29 00:02:02,000 --> 00:02:04,280 Speaker 1: And you know, Tom, I talked to some people in 30 00:02:04,320 --> 00:02:08,760 Speaker 1: the travel and tourism industry who say that the travel 31 00:02:08,800 --> 00:02:11,959 Speaker 1: and tourism industry and United States is not sharing as 32 00:02:12,080 --> 00:02:17,680 Speaker 1: much in the recent growth because comments and attitudes uh 33 00:02:18,040 --> 00:02:21,960 Speaker 1: devisiveness by you know, Trump has discouraged a lot of 34 00:02:21,960 --> 00:02:25,240 Speaker 1: people from vacationing in the United States, So, you know, 35 00:02:25,600 --> 00:02:28,040 Speaker 1: it's it's I think there seems to be so far 36 00:02:28,320 --> 00:02:32,720 Speaker 1: some effort to try to be a tiny bit more conciliatory, 37 00:02:32,720 --> 00:02:34,680 Speaker 1: but you know, I think it's going to take a 38 00:02:34,720 --> 00:02:37,720 Speaker 1: lot both at home and abroad at the same time. 39 00:02:37,760 --> 00:02:40,040 Speaker 1: He might do that at home right now, he has 40 00:02:40,080 --> 00:02:45,280 Speaker 1: a very divisive immigration stance that that that offends people 41 00:02:45,320 --> 00:02:47,520 Speaker 1: both in the countries people come from as well as 42 00:02:47,520 --> 00:02:50,480 Speaker 1: the one United States. Let me bring in my colleague. Well, 43 00:02:50,520 --> 00:02:53,680 Speaker 1: you know, Jeane Sproling wanted if you could just offer 44 00:02:53,760 --> 00:02:57,320 Speaker 1: what specifically or who specifically do you want to meet 45 00:02:57,440 --> 00:03:00,320 Speaker 1: or accomplish at Davos. Is there a person that you 46 00:03:00,480 --> 00:03:03,240 Speaker 1: want to speak to that you don't know? Seriously, because 47 00:03:03,240 --> 00:03:04,960 Speaker 1: I'm trying to understand. You know, a lot of people 48 00:03:05,000 --> 00:03:08,280 Speaker 1: spend a lot of time and money going and there's 49 00:03:08,280 --> 00:03:10,200 Speaker 1: got to be in the back of their mind this 50 00:03:10,280 --> 00:03:13,200 Speaker 1: concept of Okay, it was a win. What would be 51 00:03:13,240 --> 00:03:18,000 Speaker 1: a win for Gene Spurling other than meeting Tom King? Well, 52 00:03:18,040 --> 00:03:22,079 Speaker 1: of course reuniting. Reuniting with Tom is a win. But 53 00:03:22,200 --> 00:03:24,400 Speaker 1: you know, first of all, I'm fortunate because i'm what's 54 00:03:24,480 --> 00:03:28,440 Speaker 1: called on the Stewardship Board for Economic Conclusion, so I'm 55 00:03:28,520 --> 00:03:32,480 Speaker 1: invited to participate without having to pay the big fees um. 56 00:03:32,520 --> 00:03:35,280 Speaker 1: But I find, you know, I find there's two things. One, 57 00:03:35,600 --> 00:03:37,840 Speaker 1: you re you reunite with people. You know, I had 58 00:03:37,920 --> 00:03:40,560 Speaker 1: a chance to talk at length with both Al Gore 59 00:03:40,760 --> 00:03:43,000 Speaker 1: and John Kerre, you know, two people I've worked for 60 00:03:43,080 --> 00:03:46,680 Speaker 1: in the past. You don't see all the time. Secondly, uh, 61 00:03:46,720 --> 00:03:49,520 Speaker 1: there's issues where you can throw yourself into. So I 62 00:03:49,520 --> 00:03:51,920 Speaker 1: think one of the big issues that was focused on 63 00:03:52,000 --> 00:03:54,760 Speaker 1: here unfortunately not being focused on but in the United 64 00:03:54,800 --> 00:03:59,680 Speaker 1: States policy wise, is the whole issue of automation. UH. 65 00:03:59,760 --> 00:04:02,200 Speaker 1: You know, will this be on a continuum? Will there 66 00:04:02,240 --> 00:04:05,400 Speaker 1: be less jobs? You know, who's got the best uh 67 00:04:05,520 --> 00:04:09,480 Speaker 1: social safety network for dealing with this? So I got 68 00:04:09,480 --> 00:04:11,960 Speaker 1: to be in a board in a meeting where I 69 00:04:12,000 --> 00:04:15,000 Speaker 1: was with the Minister of Finance from Canada, with the 70 00:04:15,000 --> 00:04:20,240 Speaker 1: Minister of Finance from Sweden, UH, with top officials from Norway. 71 00:04:20,560 --> 00:04:24,200 Speaker 1: That ability to talk about something about what's the effect 72 00:04:24,240 --> 00:04:28,159 Speaker 1: of robots of automation and compare what different countries are doing. 73 00:04:28,520 --> 00:04:31,360 Speaker 1: That's something that you can do uniquely in Davos that 74 00:04:31,600 --> 00:04:33,320 Speaker 1: it's very hard to do when you're just you know, 75 00:04:33,360 --> 00:04:37,320 Speaker 1: sitting in the office in California and Washington v Shape Spurling. 76 00:04:37,720 --> 00:04:40,000 Speaker 1: This is a way few more remit but it matters. 77 00:04:40,080 --> 00:04:42,720 Speaker 1: We have Greg Valier coming up, of course, with the 78 00:04:43,120 --> 00:04:47,560 Speaker 1: how Washington is fixated on the Russia's set of Russia investigations. 79 00:04:47,800 --> 00:04:51,320 Speaker 1: I had breakfast this morning with Jane Harmon, the most 80 00:04:51,440 --> 00:04:56,000 Speaker 1: interesting congresswoman. We were reminiscing about Watergate and our thoughts 81 00:04:56,080 --> 00:04:59,800 Speaker 1: about it. How consumed is the Washington that Jane spur 82 00:05:00,160 --> 00:05:07,360 Speaker 1: knows with the Mueller investigation, Well, I think that Genes 83 00:05:07,440 --> 00:05:13,720 Speaker 1: s burrowing. This citizen is very concerned that this particular 84 00:05:13,760 --> 00:05:18,919 Speaker 1: president is really taking down certain basic core values that 85 00:05:18,960 --> 00:05:22,560 Speaker 1: would have all United US aren't. Basic respect for freedom 86 00:05:22,600 --> 00:05:25,560 Speaker 1: of the press, basic respect for the truth, and basic 87 00:05:25,640 --> 00:05:29,560 Speaker 1: respect for the rule of law. So for me, Tom, 88 00:05:29,600 --> 00:05:33,600 Speaker 1: what I'm most concerned about is, you know, let the 89 00:05:33,680 --> 00:05:36,480 Speaker 1: rule of law play out. When I see people who 90 00:05:36,480 --> 00:05:40,520 Speaker 1: are unimpeachable by Bob Muller, you know, the Republican War 91 00:05:40,640 --> 00:05:44,160 Speaker 1: hero FBI. When I see people attacks, when I see 92 00:05:44,400 --> 00:05:48,080 Speaker 1: people in implication that some people could be above the law, 93 00:05:48,480 --> 00:05:52,400 Speaker 1: those things bother me. I'm you know, I'm somebody who's 94 00:05:53,400 --> 00:05:56,560 Speaker 1: you know, doesn't want to declare guilt or innocence. I 95 00:05:56,600 --> 00:05:59,720 Speaker 1: want a fair investigation, but I want a commitment to 96 00:05:59,880 --> 00:06:03,560 Speaker 1: the rule of law. And when I see that, deeply 97 00:06:03,600 --> 00:06:07,479 Speaker 1: worried as un Jean, thank you so much for the 98 00:06:07,480 --> 00:06:09,840 Speaker 1: effort to catch up with us here. And uh, I'll 99 00:06:09,839 --> 00:06:12,160 Speaker 1: tell you, folks, Dalbos has never been turned on its 100 00:06:12,160 --> 00:06:15,000 Speaker 1: head like this moment. Honor to speak with Jean Spurling. 101 00:06:29,440 --> 00:06:32,719 Speaker 1: We are enthused that we bring to you today for 102 00:06:32,800 --> 00:06:37,719 Speaker 1: an extended period. Mr Gregory Vllier, Hoverizon Investments. He writes 103 00:06:37,839 --> 00:06:42,760 Speaker 1: a piercing note each morning has read across all of 104 00:06:42,880 --> 00:06:46,800 Speaker 1: Washington and our political economics, and I might also point 105 00:06:46,839 --> 00:06:51,240 Speaker 1: out on our economic politics as well. Greg, I want 106 00:06:51,279 --> 00:06:54,359 Speaker 1: to get to the president's speech, but first we have 107 00:06:54,480 --> 00:06:59,120 Speaker 1: to talk about your title today. The Mueller bombshell described 108 00:06:59,200 --> 00:07:03,160 Speaker 1: for us why this time is different is Mr Mueller 109 00:07:03,560 --> 00:07:08,159 Speaker 1: speaks of the president and the investigation. Well, Tom quite simply, 110 00:07:08,520 --> 00:07:11,840 Speaker 1: Trump wanted Muller fired. I believe the account in the 111 00:07:11,840 --> 00:07:14,560 Speaker 1: New York Times and other papers. No one really is 112 00:07:14,800 --> 00:07:17,520 Speaker 1: uh denying it other than the President, of course, calls 113 00:07:17,520 --> 00:07:21,440 Speaker 1: it fake news. Here's the big thing. He wanted him fired, 114 00:07:21,760 --> 00:07:25,680 Speaker 1: and Underling, his attorney, said no, I think he still 115 00:07:25,680 --> 00:07:28,800 Speaker 1: wants him fired. And we get more indictments in the 116 00:07:28,840 --> 00:07:32,280 Speaker 1: next few weeks. The nuance in your report, and of 117 00:07:32,320 --> 00:07:35,760 Speaker 1: course this is a huge distraction folks to the president 118 00:07:35,840 --> 00:07:39,640 Speaker 1: in a speech urin Davos, and you go into this, Greg, 119 00:07:39,680 --> 00:07:45,000 Speaker 1: it's not so much firing but pardoning. Should we anticipate 120 00:07:45,160 --> 00:07:49,720 Speaker 1: that if this smooths forward, the president pardons or critically, 121 00:07:50,400 --> 00:07:55,360 Speaker 1: if he pardons before the investigation's end. I think it's 122 00:07:55,400 --> 00:07:58,840 Speaker 1: on the table, just as firing uh Mueller was on 123 00:07:58,880 --> 00:08:01,280 Speaker 1: the table last summer. I don't think they've ever left 124 00:08:01,280 --> 00:08:03,880 Speaker 1: the table. So yes, pardons, I think are still in 125 00:08:03,920 --> 00:08:07,000 Speaker 1: the mix. Pim Fox, you've know the zeitgeist in America 126 00:08:07,040 --> 00:08:10,080 Speaker 1: a lot better than I do here in a happy valley. Well, 127 00:08:10,160 --> 00:08:13,000 Speaker 1: I just want to ask Greg Val, what do you 128 00:08:13,040 --> 00:08:15,200 Speaker 1: think this is going to do for the mid term elections. 129 00:08:15,240 --> 00:08:18,680 Speaker 1: What's the arithmetic for a House and Senate seats? I 130 00:08:18,720 --> 00:08:21,480 Speaker 1: think I think opinions are pretty much dug in. If 131 00:08:21,520 --> 00:08:23,920 Speaker 1: you like Trump, you're going to vote Republican. If you don't, 132 00:08:23,960 --> 00:08:26,480 Speaker 1: you're not. I don't know if this changes that many votes, 133 00:08:26,520 --> 00:08:30,840 Speaker 1: but it is a distraction from the immigration bill, from infrastructure, 134 00:08:30,920 --> 00:08:32,960 Speaker 1: from the budget. All these things that have to be 135 00:08:33,000 --> 00:08:36,880 Speaker 1: dealt with I think now get obscured by this explosive 136 00:08:36,920 --> 00:08:39,680 Speaker 1: new story. So how many seats do you believe the 137 00:08:39,679 --> 00:08:42,360 Speaker 1: Republicans might lose in the House. I'd say at least 138 00:08:42,360 --> 00:08:45,000 Speaker 1: twenty twenty four is the magic number where the Democrats 139 00:08:45,000 --> 00:08:47,280 Speaker 1: would take over. It's a very very close call. But 140 00:08:47,360 --> 00:08:50,640 Speaker 1: let's say the House is basically tied. I think then 141 00:08:50,679 --> 00:08:53,400 Speaker 1: there will be a vote to indict or impeach. Then 142 00:08:53,440 --> 00:08:55,800 Speaker 1: it goes to the Senate. And here's the bottom line, guys, 143 00:08:55,960 --> 00:08:59,280 Speaker 1: are there really sixty seven votes in the Senate to convict? 144 00:08:59,520 --> 00:09:01,559 Speaker 1: I'm not right sure we're there, you know, I want 145 00:09:01,559 --> 00:09:03,840 Speaker 1: to rip up the script here, pim and we're going 146 00:09:03,920 --> 00:09:06,920 Speaker 1: here from Washington discussion folks. Of course, what the president 147 00:09:07,120 --> 00:09:09,120 Speaker 1: will say in a few minutes here will shift over 148 00:09:09,360 --> 00:09:12,400 Speaker 1: to Mr Villiers view on the speech. But but Greg, 149 00:09:12,480 --> 00:09:15,400 Speaker 1: if this is something this is like civics one oh one. 150 00:09:15,760 --> 00:09:21,000 Speaker 1: If the Democrats quote unquote take over, can they reverse 151 00:09:21,400 --> 00:09:26,120 Speaker 1: what they oppose? Is a lot of this stuff unreversable, 152 00:09:27,400 --> 00:09:30,160 Speaker 1: a lot of watch stuff time, the things the president 153 00:09:30,160 --> 00:09:33,040 Speaker 1: has done that upset the Demoican No, I get it. Oh, 154 00:09:33,480 --> 00:09:37,680 Speaker 1: here's here's another really crucial point. Trump's veto is still good. 155 00:09:38,400 --> 00:09:41,640 Speaker 1: Let's say the Republicans do poorly in both houses. There 156 00:09:41,720 --> 00:09:44,240 Speaker 1: still are not enough votes to override a veto. So 157 00:09:44,320 --> 00:09:46,880 Speaker 1: there's not going to be some activist left wing Congress 158 00:09:47,040 --> 00:09:49,400 Speaker 1: that can shut things down his throat in the next 159 00:09:49,440 --> 00:09:53,680 Speaker 1: two years. The votes aren't there, Greg, is there a 160 00:09:53,720 --> 00:09:57,560 Speaker 1: possibility that the president will be able to escape any 161 00:09:57,760 --> 00:10:01,720 Speaker 1: particular personal blame. Sure. I mean, he's got more teflon 162 00:10:02,080 --> 00:10:04,520 Speaker 1: than any president I've ever seen, you know, Trump and 163 00:10:04,559 --> 00:10:08,400 Speaker 1: porn star. Nobody cares. Maybe Milannia cares, But I don't 164 00:10:08,440 --> 00:10:11,880 Speaker 1: see anything really that sticks with this guy. So yeah, 165 00:10:11,720 --> 00:10:14,280 Speaker 1: I'm not sure how badly it will hurt him. But again, 166 00:10:14,360 --> 00:10:17,720 Speaker 1: in this city that's preparing for indictments, it's a really 167 00:10:17,760 --> 00:10:23,600 Speaker 1: big deal. Well in the city, it's not the country. 168 00:10:23,800 --> 00:10:27,120 Speaker 1: So is it possible that this will bring even more 169 00:10:27,360 --> 00:10:31,800 Speaker 1: scorn and resignation to the legislators and to the actual 170 00:10:31,880 --> 00:10:35,080 Speaker 1: political class that seems to think that this is the 171 00:10:35,200 --> 00:10:37,640 Speaker 1: most important thing, whereas most people are just getting up 172 00:10:37,640 --> 00:10:40,040 Speaker 1: and going to work. Yeah, that's a very good point, 173 00:10:40,160 --> 00:10:42,719 Speaker 1: and people are going to have extra money in their paychecks. 174 00:10:42,760 --> 00:10:45,079 Speaker 1: I think this economy is going to heat up, unemployment 175 00:10:45,080 --> 00:10:48,040 Speaker 1: goes below four percent, maybe we get the three seven 176 00:10:48,320 --> 00:10:51,600 Speaker 1: by the summer. So for for many Americans, this is 177 00:10:51,679 --> 00:10:55,640 Speaker 1: just a witch hunt, background noise. But again, in this town, 178 00:10:55,960 --> 00:10:59,160 Speaker 1: I can't overstate, guys, how big an impact the story 179 00:10:59,200 --> 00:11:01,679 Speaker 1: has had this morning. If you're just joining us worldwide, 180 00:11:01,679 --> 00:11:04,440 Speaker 1: thrilled to bring in for an extended amount of time, 181 00:11:04,440 --> 00:11:08,679 Speaker 1: that's warning Gregory Vale Horizon investments his thoughts not only 182 00:11:08,720 --> 00:11:11,320 Speaker 1: on his economic politics in Washington, but of course the 183 00:11:11,360 --> 00:11:15,080 Speaker 1: moment in Davos, Switzerland, Pim Fox in New York, I'm 184 00:11:15,160 --> 00:11:18,719 Speaker 1: Tom Keane in uh Davos, That's where I am right 185 00:11:18,760 --> 00:11:21,960 Speaker 1: still there in Switzerland. I'm getting the point Pim, where 186 00:11:21,960 --> 00:11:24,680 Speaker 1: I'm waking up going where am I? Well, Davos, Switzerland. 187 00:11:24,840 --> 00:11:26,480 Speaker 1: Let me let me ask greg one of one other 188 00:11:26,800 --> 00:11:30,240 Speaker 1: question here, which is that, um, all right, So let's 189 00:11:30,240 --> 00:11:34,360 Speaker 1: say that this investigation, uh, it proceeds and so on. 190 00:11:35,679 --> 00:11:39,200 Speaker 1: Is there a way for the president to just move 191 00:11:39,280 --> 00:11:42,360 Speaker 1: beyond this by saying, Okay, they made some mistakes. The 192 00:11:42,440 --> 00:11:45,079 Speaker 1: people who are going to be indicted are indicted. Let 193 00:11:45,120 --> 00:11:49,240 Speaker 1: the justice system work and get back to business. I 194 00:11:49,320 --> 00:11:51,640 Speaker 1: think that one of the very key factors is that 195 00:11:51,760 --> 00:11:56,080 Speaker 1: it goes to Trump's family, Donald Trump Junior, Jared Kistner. 196 00:11:56,480 --> 00:11:59,040 Speaker 1: It's really easy to get an indictment on perjury in 197 00:11:59,120 --> 00:12:01,959 Speaker 1: a town is rule as DC, a grand jury will 198 00:12:01,960 --> 00:12:04,920 Speaker 1: have died on perjury. Maybe there's something on money laundering. 199 00:12:05,080 --> 00:12:07,520 Speaker 1: If it goes to his family, he's going to say 200 00:12:07,600 --> 00:12:10,120 Speaker 1: enough is enough. This guy has gone too far. And 201 00:12:10,480 --> 00:12:14,040 Speaker 1: within that actually this came up at breakfast this morning. Pim. 202 00:12:14,040 --> 00:12:18,920 Speaker 1: We're with the idea that the president has different protections 203 00:12:19,040 --> 00:12:22,560 Speaker 1: versus each and every other person. Greg, that's true that 204 00:12:22,920 --> 00:12:26,000 Speaker 1: within all of this world that the president flies back to, 205 00:12:26,800 --> 00:12:30,640 Speaker 1: he's playing by a different rule book because he's the president. 206 00:12:30,760 --> 00:12:33,720 Speaker 1: Is that true? Absolutely? And I don't think he's used 207 00:12:33,760 --> 00:12:37,360 Speaker 1: to being treated by people in quite this way, having 208 00:12:37,400 --> 00:12:40,320 Speaker 1: his own family members come under scrutiny like this, so 209 00:12:40,640 --> 00:12:43,320 Speaker 1: he could react in a in a very host hostile way. 210 00:12:43,480 --> 00:12:45,920 Speaker 1: And you know, there's one other angle, guys. He still 211 00:12:45,960 --> 00:12:50,079 Speaker 1: has tremendous support in the Republican Party, and I think 212 00:12:50,120 --> 00:12:52,839 Speaker 1: a lot of Republicans and congress are scared to take 213 00:12:52,920 --> 00:12:56,920 Speaker 1: him on because they lose their primaries. Let's switch to uh, 214 00:12:56,960 --> 00:12:59,000 Speaker 1: the moment in hand, which is of course in Davis. 215 00:12:59,000 --> 00:13:02,760 Speaker 1: We welcome all of you on Lomberg Radio worldwide, Good 216 00:13:02,760 --> 00:13:06,920 Speaker 1: Morning Radio London and those listening digitally in this Europe 217 00:13:06,920 --> 00:13:09,120 Speaker 1: PIM Fox in New York. I'm Tom Keane at these 218 00:13:09,160 --> 00:13:12,760 Speaker 1: meetings of the World Economic Forum, and without question, I 219 00:13:13,040 --> 00:13:17,960 Speaker 1: can say this, folks, without hesitation, the most extraordinary Friday 220 00:13:18,000 --> 00:13:21,600 Speaker 1: in forty eight years of meetings in Davos, I've been 221 00:13:21,640 --> 00:13:25,199 Speaker 1: here for fourteen years, and there's flat out no comparison. 222 00:13:25,280 --> 00:13:28,800 Speaker 1: I can't measure the number of people that came to 223 00:13:28,840 --> 00:13:33,120 Speaker 1: the Congress Center today by foot, by fancy Mercedes Benz 224 00:13:33,600 --> 00:13:37,560 Speaker 1: or on just the little shuttle or bus who uh 225 00:13:37,720 --> 00:13:40,280 Speaker 1: came with their suitcases. Where you just gotta believe they're 226 00:13:40,280 --> 00:13:45,080 Speaker 1: gonna listen to this hugely anticipated speech and then get 227 00:13:45,080 --> 00:13:47,400 Speaker 1: out of dodge, which is what you do on Friday, 228 00:13:47,440 --> 00:13:52,120 Speaker 1: and a few people on Saturday. Uh Here in uh Davos, 229 00:13:52,160 --> 00:13:56,760 Speaker 1: the President will speak, Greg Valier, uh with us. Greg. 230 00:13:56,800 --> 00:14:00,800 Speaker 1: If if I look here at uh the speech and 231 00:14:00,840 --> 00:14:04,200 Speaker 1: the way it's anticipated, I think it's changed. You wrote 232 00:14:04,200 --> 00:14:06,560 Speaker 1: a few days ago that you thought this would really 233 00:14:06,559 --> 00:14:10,200 Speaker 1: be something you were right. But what's changed the last 234 00:14:10,200 --> 00:14:13,400 Speaker 1: few days is we listened to this speech. Well here's 235 00:14:13,440 --> 00:14:16,040 Speaker 1: my suspicion, guys. I think there was a lot of 236 00:14:16,080 --> 00:14:19,480 Speaker 1: pushback from Wall Street types who contacted Trump and his 237 00:14:19,600 --> 00:14:22,280 Speaker 1: advisors and said, look, you don't want to bash your 238 00:14:22,320 --> 00:14:26,239 Speaker 1: own currency in America. First is one thing, but to 239 00:14:26,240 --> 00:14:29,360 Speaker 1: to talk down the dollar and to talk about trade 240 00:14:29,400 --> 00:14:33,080 Speaker 1: disputes is not real constructive for the markets. So I 241 00:14:33,080 --> 00:14:35,640 Speaker 1: think he's listened to that so maybe he'll tone it 242 00:14:35,680 --> 00:14:38,520 Speaker 1: down a bit today. But I think there's a new 243 00:14:38,600 --> 00:14:41,480 Speaker 1: mind frame on the dollar, and I think that the 244 00:14:41,560 --> 00:14:44,600 Speaker 1: dollar with all of the mother stuff would trade reputes. 245 00:14:44,800 --> 00:14:47,360 Speaker 1: I think the dollar may stay under pressure, Greg Value, 246 00:14:47,480 --> 00:15:01,800 Speaker 1: thank you so much. With the Horizon investments. The Imberbari 247 00:15:02,480 --> 00:15:05,000 Speaker 1: joining us now a head of global macro economics at 248 00:15:05,040 --> 00:15:07,240 Speaker 1: City Group. That must have been wonderful news it for 249 00:15:07,360 --> 00:15:13,359 Speaker 1: him to hear that Katherine Man would join your shop. Yeah, absolutely, Toma. 250 00:15:13,400 --> 00:15:16,400 Speaker 1: We were absolutely delighted that Katherine will join us very 251 00:15:16,400 --> 00:15:18,720 Speaker 1: shortly in a few weeks, and even more delighted that 252 00:15:18,760 --> 00:15:20,920 Speaker 1: our current if economy is built about it's gonna stay 253 00:15:20,960 --> 00:15:23,240 Speaker 1: with us. Yes, I think it's it's a great luck 254 00:15:23,600 --> 00:15:26,720 Speaker 1: for our organization. I should point out to Professor Bowder 255 00:15:26,760 --> 00:15:29,520 Speaker 1: will continue as a senior advisor to all of the 256 00:15:29,520 --> 00:15:32,160 Speaker 1: City Group platform. Abram. What I noticed in there, and 257 00:15:32,160 --> 00:15:34,560 Speaker 1: it made me think of Kathy Mann, was where the 258 00:15:34,600 --> 00:15:40,280 Speaker 1: President twice mentioned free trade, fair trade. But then within 259 00:15:40,320 --> 00:15:46,840 Speaker 1: our international economics this odd word reciprocity. What is reciprocity 260 00:15:46,920 --> 00:15:53,840 Speaker 1: to a frontline economists like yourself, it is in uh, 261 00:15:53,960 --> 00:15:56,800 Speaker 1: the term of cute interest, because of course this is 262 00:15:56,920 --> 00:16:00,800 Speaker 1: I think very much aimed at the ongoing the dialogue 263 00:16:00,800 --> 00:16:05,040 Speaker 1: with China, and I think the concern that China is 264 00:16:05,040 --> 00:16:08,320 Speaker 1: not quite sticking to the same rules as many other 265 00:16:08,800 --> 00:16:10,760 Speaker 1: countries in the world economy, including the YES, but not 266 00:16:10,800 --> 00:16:13,640 Speaker 1: only the US, may have seen a number of other countries, 267 00:16:13,640 --> 00:16:17,680 Speaker 1: the EU and Japan also have expressed concerns about elements 268 00:16:17,720 --> 00:16:21,440 Speaker 1: of trade with China, and I think in this specific case, 269 00:16:21,720 --> 00:16:24,760 Speaker 1: it means that we are likely to see further measures 270 00:16:24,800 --> 00:16:27,000 Speaker 1: similar to some that we've seen over the last few weeks. 271 00:16:27,000 --> 00:16:29,880 Speaker 1: You saw measures on solar panels, on the washing machines. 272 00:16:30,120 --> 00:16:33,760 Speaker 1: I think this is a pre announcement that more is 273 00:16:33,800 --> 00:16:37,760 Speaker 1: to follow in the next few months. Mr Rakbary, the 274 00:16:37,800 --> 00:16:41,920 Speaker 1: Treasury Secretary Stephen Manuchin says, or at least a Bloomberg 275 00:16:41,960 --> 00:16:44,840 Speaker 1: headline has him saying that he was not trying to 276 00:16:44,960 --> 00:16:49,200 Speaker 1: move the dollar by his comments. What you have is 277 00:16:49,800 --> 00:16:54,320 Speaker 1: any reaction or any thoughts about that. I have to say, 278 00:16:54,360 --> 00:16:56,960 Speaker 1: I'm i'm I was a little bit surprised about the commons. 279 00:16:57,800 --> 00:17:00,600 Speaker 1: We have in the past, together with Bill and Bower, 280 00:17:00,640 --> 00:17:04,040 Speaker 1: we've written about the Treasury strong dollar policy. We always 281 00:17:04,080 --> 00:17:06,720 Speaker 1: thought it's a little bit of a misnomer for two reasons. 282 00:17:06,720 --> 00:17:09,680 Speaker 1: One because over the last few decades the dollar has 283 00:17:09,680 --> 00:17:14,600 Speaker 1: actually depreciated fairly, fairly consistently over a longer horizons. And 284 00:17:14,640 --> 00:17:18,560 Speaker 1: the second is that the Treasury is primarily concerned with, 285 00:17:18,920 --> 00:17:22,199 Speaker 1: of course, funding the government and low borrowing costs. So 286 00:17:22,240 --> 00:17:26,520 Speaker 1: for me, strong dollar really meant it's a stable asset, 287 00:17:26,640 --> 00:17:29,440 Speaker 1: so you should extract the high price I eat low 288 00:17:29,640 --> 00:17:32,199 Speaker 1: treasury yields. So it didn't make a great deal of 289 00:17:32,240 --> 00:17:37,320 Speaker 1: things for me to to express these sort of uh, 290 00:17:37,720 --> 00:17:40,320 Speaker 1: mixed sentiments about whether you would prefer strong or a 291 00:17:40,400 --> 00:17:43,200 Speaker 1: weak dollar. But it fits with the I would say, 292 00:17:43,280 --> 00:17:47,480 Speaker 1: a slightly more recantilist tone of the policy debate in 293 00:17:47,520 --> 00:17:50,199 Speaker 1: Washington when it comes to trade. Okay, and is it 294 00:17:50,359 --> 00:17:53,960 Speaker 1: possible that not only the Treasury secretaries comments, but more 295 00:17:54,000 --> 00:17:57,159 Speaker 1: specifically the comments and the speech by President Donald Trump 296 00:17:57,600 --> 00:18:02,520 Speaker 1: is part of an overall tactic for negotiations, particularly when 297 00:18:02,520 --> 00:18:09,840 Speaker 1: it comes to trade, be powerful and beuh if you want, 298 00:18:09,880 --> 00:18:14,280 Speaker 1: if you will, sort of strident, so that you have 299 00:18:14,400 --> 00:18:19,680 Speaker 1: a negotiating position that then really puts you at an 300 00:18:19,680 --> 00:18:22,600 Speaker 1: advantage when you have to sit down with Mexico and Canada, 301 00:18:22,640 --> 00:18:27,480 Speaker 1: for example, U to renegotiate NAFTA, as the US Commerce 302 00:18:27,520 --> 00:18:33,960 Speaker 1: Secretary Wilbur Ross saying that it is fixable. Yes, I 303 00:18:34,000 --> 00:18:35,960 Speaker 1: do think that a lot of these statements obviously have 304 00:18:36,040 --> 00:18:39,359 Speaker 1: a negotiations element to them, But at the same time 305 00:18:39,600 --> 00:18:43,879 Speaker 1: we we shouldn't think that they are purely negotiation tactic 306 00:18:43,880 --> 00:18:46,159 Speaker 1: in the sense that we we should expect them to 307 00:18:46,200 --> 00:18:50,160 Speaker 1: take action to pursue more trade remedies, to improve more 308 00:18:50,200 --> 00:18:54,600 Speaker 1: restrictions on important also on probably foreign investment in the 309 00:18:54,680 --> 00:18:57,200 Speaker 1: United States. Of course there's going to be an element 310 00:18:57,200 --> 00:19:00,520 Speaker 1: of compromise, but that rhetoric will be followed with action, 311 00:19:01,200 --> 00:19:06,680 Speaker 1: Abraham with within all of this is a definition of multilateral, bilateral, 312 00:19:07,320 --> 00:19:10,480 Speaker 1: and maybe a unilateral president. Now, the President made nice 313 00:19:10,520 --> 00:19:13,720 Speaker 1: in the speech. Everyone can agree with that. But was 314 00:19:13,760 --> 00:19:17,680 Speaker 1: it a true bilateral speech or is it a bilateral 315 00:19:17,720 --> 00:19:21,040 Speaker 1: speech that says, if you play our way, then it 316 00:19:21,080 --> 00:19:26,000 Speaker 1: will be bilateral. Yes, I still think I mean the 317 00:19:26,320 --> 00:19:29,520 Speaker 1: I think the keyword of the administration's new approach to 318 00:19:29,600 --> 00:19:33,760 Speaker 1: trade is still sovereignty. And I think sovereignty is still 319 00:19:33,920 --> 00:19:38,760 Speaker 1: much easier to to make consistent with bilateral arrangements then 320 00:19:38,840 --> 00:19:42,879 Speaker 1: with multilateral arrangements, in particular with bodies like the w 321 00:19:43,040 --> 00:19:47,240 Speaker 1: t O, who seem to be compromising sovereignty to some degree. 322 00:19:47,600 --> 00:19:49,760 Speaker 1: I don't think we learned much in this speech about 323 00:19:50,160 --> 00:19:52,800 Speaker 1: about these issues, but I think it's we should expect 324 00:19:52,920 --> 00:19:57,199 Speaker 1: the focus to remain on bilateral Is there a possibility 325 00:19:57,240 --> 00:19:59,720 Speaker 1: that we're going to see an increase in acceleration in 326 00:20:00,000 --> 00:20:03,600 Speaker 1: inflation this year? And I point to the g D 327 00:20:03,800 --> 00:20:06,600 Speaker 1: the first print for gross domestic product in the United 328 00:20:06,640 --> 00:20:10,159 Speaker 1: States at two point six percent. We're speaking earlier with 329 00:20:10,400 --> 00:20:14,480 Speaker 1: Greg Valier uh he was talking about how the possibility 330 00:20:14,520 --> 00:20:19,920 Speaker 1: that the U. S economy could overheat. It's it's certainly 331 00:20:20,000 --> 00:20:22,840 Speaker 1: one of the major risks. I mean, from from our perspective, 332 00:20:22,920 --> 00:20:24,879 Speaker 1: we don't think we'll see much of a pickup in 333 00:20:24,880 --> 00:20:28,919 Speaker 1: invasion other than for sort of statistical reasons. We have 334 00:20:28,920 --> 00:20:30,879 Speaker 1: a number of statistical pas effects over the course of 335 00:20:30,920 --> 00:20:34,000 Speaker 1: this year in the US, but we think inflation underlying 336 00:20:34,040 --> 00:20:37,000 Speaker 1: inflation will be fatly close to two and it's not 337 00:20:37,080 --> 00:20:40,000 Speaker 1: that far even now. But at the same time, I 338 00:20:40,040 --> 00:20:42,880 Speaker 1: think inflation is a major risk. We have seen growing 339 00:20:42,920 --> 00:20:45,520 Speaker 1: signs that we have labor shortages and that companies find 340 00:20:45,520 --> 00:20:48,520 Speaker 1: it increasingly hard to find workers, which usually you should 341 00:20:48,560 --> 00:20:51,399 Speaker 1: expect to push away to somewhat, but we've also observed 342 00:20:51,440 --> 00:20:53,720 Speaker 1: over the last few years that that link is by 343 00:20:53,720 --> 00:20:56,000 Speaker 1: no means as as close as it as it used 344 00:20:56,000 --> 00:20:59,080 Speaker 1: to be. When it came to the GDP number today, 345 00:20:59,400 --> 00:21:01,959 Speaker 1: of course it was a little bit below expectations, but 346 00:21:02,000 --> 00:21:04,919 Speaker 1: it's still, you know, meaningfully about what we think is 347 00:21:05,040 --> 00:21:08,680 Speaker 1: probably the sustainable growth rate in the US. So at 348 00:21:08,680 --> 00:21:13,840 Speaker 1: the margin, I think probably does put inflation pressure up, 349 00:21:13,880 --> 00:21:17,000 Speaker 1: but as I said, really probably only very weakly. So 350 00:21:17,040 --> 00:21:19,480 Speaker 1: I'm not holding my breath for inflation to pick up 351 00:21:19,680 --> 00:21:23,520 Speaker 1: too aggressively this year. Does the President's speech at all 352 00:21:23,680 --> 00:21:27,119 Speaker 1: challenge the particular leaders of Europe when it comes to 353 00:21:27,200 --> 00:21:33,160 Speaker 1: things such as tax overhaul and regulation overhaul, I don't 354 00:21:33,160 --> 00:21:35,760 Speaker 1: think necessarily the speech did, even though of course that 355 00:21:35,880 --> 00:21:38,959 Speaker 1: the President did a good job. You certainly try very 356 00:21:38,960 --> 00:21:41,679 Speaker 1: hard to sell the achievement of this administration. But I 357 00:21:41,720 --> 00:21:44,200 Speaker 1: think the tax reform as such does. I mean both 358 00:21:44,640 --> 00:21:47,800 Speaker 1: both that the corporate tax rate is being brought down 359 00:21:48,119 --> 00:21:52,119 Speaker 1: significantly in the US, but also the number of other measures, 360 00:21:52,160 --> 00:21:55,800 Speaker 1: the base erosion measures, FDI related measures that I think 361 00:21:55,960 --> 00:22:00,600 Speaker 1: do have a meaningful competitive impact. We should say a bit. 362 00:22:01,600 --> 00:22:04,000 Speaker 1: For example, looking at the corporate tax rates. The US 363 00:22:04,080 --> 00:22:06,080 Speaker 1: is really just moving to the middle of the pack. 364 00:22:06,119 --> 00:22:08,280 Speaker 1: It was the lag of many other countries have been 365 00:22:08,480 --> 00:22:12,160 Speaker 1: reducing corporate tax rates over the last two decades. Every 366 00:22:12,280 --> 00:22:14,560 Speaker 1: one more question if we could, and we can make 367 00:22:14,560 --> 00:22:17,080 Speaker 1: it quick. I know you've got to get to your travels, 368 00:22:17,080 --> 00:22:20,080 Speaker 1: as everyone in Davos is doing. What does the City 369 00:22:20,080 --> 00:22:24,280 Speaker 1: Group call on euro is a single point estimate? Deutsche 370 00:22:24,280 --> 00:22:27,760 Speaker 1: Bank and George Sarah Ellis see the drama of one thirty. 371 00:22:28,040 --> 00:22:30,920 Speaker 1: Can you give us a drama single point estimate like that? 372 00:22:32,160 --> 00:22:35,800 Speaker 1: I believe it's nine at the end of this year. 373 00:22:35,800 --> 00:22:38,240 Speaker 1: It's very close. It's certainly the idea that it will 374 00:22:38,320 --> 00:22:41,959 Speaker 1: it will continue to be strong. That is remarkable. Inari, 375 00:22:42,080 --> 00:22:44,960 Speaker 1: thank you so much, just on short notice, his head 376 00:22:44,960 --> 00:22:49,879 Speaker 1: of Global econom macroeconomics. I should say for UH City Group, 377 00:22:50,320 --> 00:23:07,880 Speaker 1: working of course with a little Bouder and Catherinine here 378 00:23:07,920 --> 00:23:11,520 Speaker 1: in Davos, we finished strong with someone who I've spoken 379 00:23:11,520 --> 00:23:14,560 Speaker 1: to somewhere between six and twelve times UH, and I 380 00:23:14,600 --> 00:23:17,359 Speaker 1: believe I've spoken to her on every continent of the Earth, 381 00:23:17,440 --> 00:23:21,480 Speaker 1: including Antarctica. And I am finally meeting with Davos kujin 382 00:23:22,000 --> 00:23:24,560 Speaker 1: Is at the London School of Economics and his shingles 383 00:23:24,600 --> 00:23:29,960 Speaker 1: from Harvard University. You studied under Kenneth Rogoff. What level 384 00:23:30,000 --> 00:23:34,000 Speaker 1: of torture is that the best kind of torture, the 385 00:23:34,040 --> 00:23:36,560 Speaker 1: best mentor? I have to say, what do you do 386 00:23:36,640 --> 00:23:39,320 Speaker 1: with Ken Rogoff when you don't get the math and 387 00:23:39,480 --> 00:23:43,080 Speaker 1: he does well? I would, uh, I would? I would 388 00:23:43,080 --> 00:23:46,000 Speaker 1: say I'm gonna work harder. You could work harder and 389 00:23:47,800 --> 00:23:50,640 Speaker 1: there were no tears involved. I'm sure, Jen, you become 390 00:23:50,640 --> 00:23:55,440 Speaker 1: an immediate and important voice on analysis of the Chinese economy. 391 00:23:55,480 --> 00:23:57,159 Speaker 1: And it is perfect to have you to close out 392 00:23:57,200 --> 00:24:00,600 Speaker 1: our coverage here because in every dabos the US two days, 393 00:24:00,600 --> 00:24:03,399 Speaker 1: there's a backstory. And I know, Mr Trump, you're listening 394 00:24:03,440 --> 00:24:05,680 Speaker 1: to this in the car to Marine one and then 395 00:24:05,720 --> 00:24:09,240 Speaker 1: on ZERI on Zurich. I'm sorry, but the President of 396 00:24:09,359 --> 00:24:12,439 Speaker 1: United States wasn't the backstory. What was the backstory was 397 00:24:12,600 --> 00:24:17,240 Speaker 1: China and the rekindling of t p P. How badly 398 00:24:17,480 --> 00:24:22,639 Speaker 1: does America need this multilateral trade agreement that I believe 399 00:24:22,760 --> 00:24:26,000 Speaker 1: does not include China. Look, you know, China is making 400 00:24:26,000 --> 00:24:29,080 Speaker 1: its own efforts to create its own you know, regional 401 00:24:29,280 --> 00:24:32,600 Speaker 1: trade arrangement, part of the Belt Road initiative is actually 402 00:24:32,600 --> 00:24:36,520 Speaker 1: to enhance trade and these kind of relationships with each other. Um, 403 00:24:37,000 --> 00:24:39,840 Speaker 1: the question is, you know, other countries such as Vietnam, 404 00:24:40,119 --> 00:24:43,440 Speaker 1: the TPP is going forward even without the USS participation. 405 00:24:44,080 --> 00:24:47,199 Speaker 1: So I think that on all aspects, you know, the 406 00:24:47,240 --> 00:24:51,800 Speaker 1: regional trade is happening anyways. The regional trade is happening anyways. 407 00:24:51,800 --> 00:24:55,200 Speaker 1: Take a given country you mentioned, Vietnam, do I understand 408 00:24:55,240 --> 00:24:57,159 Speaker 1: they can play it both ways. They can do t 409 00:24:57,400 --> 00:24:59,960 Speaker 1: p P and they can also go down the trade 410 00:25:00,160 --> 00:25:04,719 Speaker 1: road with China. Oh. Absolutely, It's not just Vietnam. In fact, 411 00:25:05,240 --> 00:25:09,119 Speaker 1: a lot of these countries, especially in Asia, are playing, 412 00:25:09,680 --> 00:25:12,720 Speaker 1: in my in my view, a dangerous game, a political game, 413 00:25:12,960 --> 00:25:16,240 Speaker 1: either siding with let's say India and the US or 414 00:25:16,320 --> 00:25:19,919 Speaker 1: in China. So for example, in Sri Lanka, Sri Lanka 415 00:25:19,960 --> 00:25:24,120 Speaker 1: was looking for infrastructure investment from China. However, some political 416 00:25:24,160 --> 00:25:26,080 Speaker 1: party came and said, you know, let's not side with 417 00:25:26,160 --> 00:25:28,359 Speaker 1: China's side with the US and India, and they were 418 00:25:28,359 --> 00:25:31,399 Speaker 1: were waiting for the loans which never came, and they 419 00:25:31,400 --> 00:25:33,280 Speaker 1: wanted to go back to China, and China was like 420 00:25:33,320 --> 00:25:35,760 Speaker 1: wait a second, that's you know. So we're seeing a 421 00:25:35,760 --> 00:25:38,960 Speaker 1: lot of these countries possibly playing both sides depending on 422 00:25:39,000 --> 00:25:41,760 Speaker 1: what political party, what kind of political mission they have 423 00:25:42,000 --> 00:25:45,600 Speaker 1: the financial question. One of the great themes here from 424 00:25:45,640 --> 00:25:50,399 Speaker 1: many on Asia and particularly Chinese government representatives is China 425 00:25:50,480 --> 00:25:55,760 Speaker 1: has a better handle on monitoring, an understanding and simply 426 00:25:55,920 --> 00:25:59,879 Speaker 1: counting their challenge and enormous debt. Do you buy it? 427 00:26:00,840 --> 00:26:03,760 Speaker 1: I actually do buy it in the sense that the 428 00:26:03,840 --> 00:26:07,120 Speaker 1: numbers look worrisome to say the least, and there are 429 00:26:07,160 --> 00:26:11,199 Speaker 1: other problems like xx capacity and slowing growth. However, the 430 00:26:11,280 --> 00:26:13,880 Speaker 1: difference is that the government has a huge array of 431 00:26:13,880 --> 00:26:17,679 Speaker 1: tools and instruments and they can coordinate lenders and borrows 432 00:26:17,760 --> 00:26:20,359 Speaker 1: at any given single time. So the point is that 433 00:26:20,640 --> 00:26:24,160 Speaker 1: it does look the numbers look worrisome, but um at 434 00:26:24,160 --> 00:26:26,800 Speaker 1: a moment of need, there will be no financial panic 435 00:26:26,840 --> 00:26:28,840 Speaker 1: because the government will step in, and that I think 436 00:26:29,320 --> 00:26:32,399 Speaker 1: is different from the West. If you're just joining his 437 00:26:32,520 --> 00:26:34,760 Speaker 1: k Gen of the London School of Economics. As we 438 00:26:35,240 --> 00:26:38,520 Speaker 1: close out our Davos covered here and wiout question, the 439 00:26:38,520 --> 00:26:41,639 Speaker 1: theme of last forty hours away from the distraction the 440 00:26:41,800 --> 00:26:47,520 Speaker 1: President visiting, and that of course is on uh on China. 441 00:26:47,600 --> 00:26:53,560 Speaker 1: The President mentioned fair free and trade reciprocity, a huge 442 00:26:53,720 --> 00:26:57,960 Speaker 1: body of Americans would suggest, we're not doing free or 443 00:26:58,280 --> 00:27:03,400 Speaker 1: fair trade with China. How do you take free, fair 444 00:27:03,480 --> 00:27:07,880 Speaker 1: and reciprocity and bring it over to this strategic relationship. 445 00:27:08,560 --> 00:27:11,639 Speaker 1: I think that what we are not giving enough credit 446 00:27:11,680 --> 00:27:13,600 Speaker 1: to China is right now, or at least we're not 447 00:27:13,680 --> 00:27:17,720 Speaker 1: aware of, is that they need to turn from systemic 448 00:27:17,800 --> 00:27:21,720 Speaker 1: taker to give her and they are actually making strides 449 00:27:22,040 --> 00:27:25,360 Speaker 1: even though that might take some time too towards that 450 00:27:25,520 --> 00:27:28,080 Speaker 1: to be able to give back to the global system. 451 00:27:28,200 --> 00:27:32,320 Speaker 1: So when the President Trump came to China, China made 452 00:27:32,320 --> 00:27:36,080 Speaker 1: some concessions in terms of liberalizing certain financial services. That 453 00:27:36,240 --> 00:27:39,760 Speaker 1: is actually a signal that China from now on will 454 00:27:39,800 --> 00:27:43,960 Speaker 1: start to give back to the global system. But this 455 00:27:44,440 --> 00:27:48,200 Speaker 1: the result resolution of these problems by having trade wars 456 00:27:47,560 --> 00:27:50,760 Speaker 1: and slapping terrorists, you know, onto each other, is not 457 00:27:50,880 --> 00:27:53,600 Speaker 1: really the best solution. Paul Kirkman wrote about it this 458 00:27:53,680 --> 00:27:55,639 Speaker 1: morning in Folks. For those of you that are critics 459 00:27:55,640 --> 00:27:59,000 Speaker 1: of the professor, this maybe happens to be his wheelhouse 460 00:27:59,040 --> 00:28:02,639 Speaker 1: and talking about war machines and solar panels. Am I right? 461 00:28:02,680 --> 00:28:05,159 Speaker 1: When you teach at LC and you throw a chalk 462 00:28:05,200 --> 00:28:09,040 Speaker 1: at the young undergraduates, uh, you would suggest there's lose 463 00:28:09,160 --> 00:28:13,520 Speaker 1: lose in these kind of decisions that the President made. Well, 464 00:28:13,920 --> 00:28:17,280 Speaker 1: you know the trade models. That's what the trade models 465 00:28:17,320 --> 00:28:19,919 Speaker 1: tell you. That's what you know in theory, that's what 466 00:28:19,960 --> 00:28:23,720 Speaker 1: the research tells you. It doesn't talk about employment, it 467 00:28:23,760 --> 00:28:27,680 Speaker 1: doesn't talk about inequality issues, which are obviously very important. 468 00:28:28,000 --> 00:28:31,520 Speaker 1: But we're ascribing a lot more of these current problems 469 00:28:31,520 --> 00:28:34,199 Speaker 1: to trade than to technology, because trade is a me 470 00:28:34,440 --> 00:28:38,560 Speaker 1: versus US versus then, but technology would be US versus robots. 471 00:28:38,600 --> 00:28:42,000 Speaker 1: So obviously, under political pressure, trade is a great way 472 00:28:42,080 --> 00:28:45,440 Speaker 1: to blame others. And Dr Krugman talks about the findings 473 00:28:45,440 --> 00:28:48,480 Speaker 1: of the United States International Trade Commission, and this is 474 00:28:48,640 --> 00:28:53,480 Speaker 1: very sophisticated stuff, folks. The idea that a given thing, 475 00:28:53,600 --> 00:28:58,000 Speaker 1: in this case washing machines, uh didn't take away any 476 00:28:58,200 --> 00:29:02,720 Speaker 1: US jobs, but they would have been US jobs created 477 00:29:03,200 --> 00:29:08,440 Speaker 1: if they weren't competing with us. That's pretty original, isn't 478 00:29:08,440 --> 00:29:12,800 Speaker 1: it That we're almost extrapolating out a trade to be well, 479 00:29:12,840 --> 00:29:15,880 Speaker 1: I think you know, first of all, solar panels, washing machines. 480 00:29:15,960 --> 00:29:18,160 Speaker 1: Let me just say that China's trying to get rid 481 00:29:18,200 --> 00:29:20,800 Speaker 1: of a lot of that excess capacity. Anyways, it's trying 482 00:29:20,800 --> 00:29:23,520 Speaker 1: to move out of lower end manufacturing. So it's so, 483 00:29:24,560 --> 00:29:26,800 Speaker 1: but this is critical. It's not about washing machines coming 484 00:29:26,800 --> 00:29:28,840 Speaker 1: back to the United States. The washing machines are built 485 00:29:28,840 --> 00:29:31,600 Speaker 1: in Vietnam exactly. Well, a lot of these will not 486 00:29:31,720 --> 00:29:33,800 Speaker 1: move back to the US. It will be moved to 487 00:29:33,840 --> 00:29:37,080 Speaker 1: other countries. However, what we ignore is that through the 488 00:29:37,120 --> 00:29:40,120 Speaker 1: exports of China into the US, it's created a lot 489 00:29:40,160 --> 00:29:43,680 Speaker 1: of jobs on services, business services, and the most recent 490 00:29:43,720 --> 00:29:46,600 Speaker 1: academic study says that when you properly account for the 491 00:29:46,680 --> 00:29:49,160 Speaker 1: jobs at Chinese exports or Chinese imports from the U 492 00:29:49,240 --> 00:29:53,040 Speaker 1: S perspective create on net trade, you know jobs were 493 00:29:53,040 --> 00:29:58,920 Speaker 1: not displaced in great numbers. I look at um just unfortunately, 494 00:29:58,920 --> 00:30:00,880 Speaker 1: time for one more question. Look forward to seeing you 495 00:30:00,920 --> 00:30:03,800 Speaker 1: in London and in her Professor Chin. When I look 496 00:30:03,800 --> 00:30:08,240 Speaker 1: at uh all of the President's speech, it seems to 497 00:30:08,240 --> 00:30:11,800 Speaker 1: be an original bilateralism. This is what America is going 498 00:30:11,880 --> 00:30:15,000 Speaker 1: to do and if you want to participate, great. How 499 00:30:15,000 --> 00:30:19,600 Speaker 1: will China respond to the Trump message versus more traditional 500 00:30:20,120 --> 00:30:24,320 Speaker 1: international relations that we've seen for decades. To be completely candid, 501 00:30:24,600 --> 00:30:28,760 Speaker 1: China understands the importance of a country first. However, China 502 00:30:28,800 --> 00:30:31,080 Speaker 1: is going to take the other role of creating global 503 00:30:31,160 --> 00:30:35,840 Speaker 1: platforms cooperation. I think that is the difference. Kin, thank 504 00:30:35,880 --> 00:30:38,000 Speaker 1: you so much for joining us today and short notice. 505 00:30:38,040 --> 00:30:40,880 Speaker 1: She was here, of course, observing the President like any 506 00:30:41,000 --> 00:30:46,040 Speaker 1: and all. She's professor of economics in London School of Economics. 507 00:30:52,480 --> 00:30:56,680 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 508 00:30:56,720 --> 00:31:02,040 Speaker 1: listen to interviews on Apple Podcasts, Soundclout, or whichever podcast 509 00:31:02,080 --> 00:31:06,320 Speaker 1: platform you prefer. I'm on Twitter at Tom Keane before 510 00:31:06,360 --> 00:31:10,200 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg 511 00:31:10,280 --> 00:31:10,560 Speaker 1: Radio