Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with
Speaker 1: David Gura. Daily we bring you insight from the best
Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance
Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course,
Speaker 1: on the Bloomberg David Gurn Tom Keen on a difficult
Speaker 1: Monday morning, of course America. Of course, last night about
Speaker 1: ten pm, Las Vegas time, one am. I believe that
Speaker 1: is David wall Street time. Horrific shooting in Las Vegas
Speaker 1: with us now, uh for a generous uh in good
Speaker 1: half hours, Robert for fuseck of Jones Day and uh, Bob.
Speaker 1: The normal discussion with you would be M and A
Speaker 1: and finance, and I guess we can do that here
Speaker 1: in a bit or in our next section. Jones Day
Speaker 1: is well in excess of two thousand lawyers worldwide, truly
Speaker 1: worldwide and one of your jewels. As Peter Canfield of Atlanta.
Speaker 1: I should point out that Mr Canfield has represented Bloomberg
Speaker 1: guilp on various matters and he is a leader in
Speaker 1: thinking about guns safety. Um, it's not something Bob, I'm
Speaker 1: assuming you're up to speed. On the minutia of us.
Speaker 1: But where does the legal business fit into this only
Speaker 1: in America debate that we have about guns just framed
Speaker 1: for us. Where lawyers fit in to the debate that
Speaker 1: we're going to once again have over the next number
Speaker 1: of days. Well, I think they basically line up just
Speaker 1: where their politics line up. Um. I don't understand personally
Speaker 1: why this is a political issue, but it's been been
Speaker 1: that for gosh for decades, and you're gonna be expected
Speaker 1: to continue. There was a a an effort to uh
Speaker 1: get the gun control through litigation a few years ago.
Speaker 1: It actually kind of on the tobacco model of taking
Speaker 1: on the gun manufacturers in the ground they were producing
Speaker 1: an inherently dangerous product that didn't really go anywhere in
Speaker 1: the courts. Um. So it's not something that's gonna be
Speaker 1: gonna be dealt with in litigation. It will be the
Speaker 1: political issue. I hate to be negative about it, but
Speaker 1: obviously the the lobbying has has kept things from happening
Speaker 1: very much is particularly on a federal level. I mean,
Speaker 1: the cynic of it all is twenty six dead in Connecticut,
Speaker 1: which clearly has a local tinge to our New York audience.
Speaker 1: And maybe you know, we shouldn't focus on that versus Danville, California.
Speaker 1: But now this horrific event in Las Vegas. From where
Speaker 1: you sit, what is the power of those that want
Speaker 1: to protect firearms? Is the romance they talk about that
Speaker 1: those weren't firearms in that video this morning, that we
Speaker 1: saw people dying in Las Vegas, that was warfare. Well,
Speaker 1: sometimes you know, incidents like that can change people's perspectives.
Speaker 1: And when you listened to that continue the automatic weapon
Speaker 1: could continuing to discharge, you thought, is this a gun
Speaker 1: or is this a weapon? And maybe if there are
Speaker 1: people started drawing that distinction. Uh, there's a possibility of
Speaker 1: of taking a different perspective. I suspect this may be
Speaker 1: something more likely to be dealt with state by state
Speaker 1: than on a federal level. There's just too much paralysis
Speaker 1: in Washington over the most basic of issues. And you know,
Speaker 1: the pro the anti gun lobby didn't have much, didn't
Speaker 1: have much lobby, and r A and other people can lobby.
Speaker 1: And I would say, David, and I don't say this
Speaker 1: with any expertise or authority. The video and audio attached
Speaker 1: to it that we ran on Bloomberg Television, this morning.
Speaker 1: I was stunned because I had not seen it until
Speaker 1: we went to air, and I was just thunderstruck by
Speaker 1: the immediacy of the video that America wakes up to
Speaker 1: this morning. Yeah, I think Bomb's right. I think people
Speaker 1: are gonna be reckoning with that today and throughout the
Speaker 1: week and beyond. And certainly something that has changed is
Speaker 1: the availability of audio and video of incidents like these.
Speaker 1: It certainly changes. I think how one process is begins
Speaker 1: to process what happened here, probably pivot if I could,
Speaker 1: and and and go to something more mundane as as
Speaker 1: that Tom said at the top, that is, uh, what
Speaker 1: we we focus on here day in and day out
Speaker 1: in light of what we've been falling overnight. Just get
Speaker 1: us up to speed on sort of what the this
Speaker 1: environment looks like for deal making. There's a lot of
Speaker 1: conversation here about what the fete is going to look like,
Speaker 1: what's going to happen to interest rates? So we continue
Speaker 1: to follow that on Bloomberg surveillance, of course, how is that?
Speaker 1: How is the conversation about interest rates shaping a company's
Speaker 1: appetites for for deal making? Here in two thousand seventeen, well,
Speaker 1: equity capital is getting very expensive, but that debt capital
Speaker 1: is basically free. I mean for high high end credit,
Speaker 1: it's it's effectively free. When you think of the amount
Speaker 1: of debt that will be taken down for the Time
Speaker 1: Warner deal, for example, it's it's almost like going to
Speaker 1: the A T M for a T N T to
Speaker 1: do that deal. So it's pretty extraordinary. And that there
Speaker 1: is going to be some pressure when there is a
Speaker 1: perspective that those rates will actually change normalize. I'm not
Speaker 1: sure I know what normal means for the debt markets anymore,
Speaker 1: but get get higher up, that's gonna put some pressure.
Speaker 1: The biggest issue though, is we talked about it earlier
Speaker 1: on the on TV, is is getting rid of the
Speaker 1: uncertainty about taxation. It isn't that that there'll be repatriation,
Speaker 1: although that would be stimulative, or that there will be
Speaker 1: lower rates that would be stimulative as well. Is that
Speaker 1: some of the other stuff is off the table. That's
Speaker 1: important because you're trying to value something and you don't know.
Speaker 1: It's hard to do it with that text. I don't
Speaker 1: mean to interrupt, but I am it's Monday interruption day here, David.
Speaker 1: I'm sorry to interrupt. Do you have a number of
Speaker 1: yields where the game changes you have in your head.
Speaker 1: I mean, you're not a numbers yield guy, You're a
Speaker 1: legal guy. So I'm gonna ask you the question because
Speaker 1: probably you're the only one that knows. Do you have
Speaker 1: a number where the rules change for M and A?
Speaker 1: Is it a three percent yield? Is it? Do you
Speaker 1: have a number in your head? I think when the
Speaker 1: ten years starts, when people start getting convinced a tenure
Speaker 1: will actually start approaching three, you're gonna see a stampede
Speaker 1: or transaction. We would never get that answer, David from
Speaker 1: a financial guy, their general counsel, a lawyer like Robert Profuse,
Speaker 1: don't say that on air or Profuse, I can said,
Speaker 1: given what we're saying with that, why why have we
Speaker 1: seen some sluctions or slowness to to the deals that
Speaker 1: marketplace at this point? Do you think it's gonna we're
Speaker 1: gonna see an uptick here soon? Well? I do think
Speaker 1: that that. Well, there's a lot of things, of course,
Speaker 1: I mean, and there's never one answer at anything, but
Speaker 1: to me, the overwriting issue has been the uncertainty of
Speaker 1: the of everything going on in Washington, including and that
Speaker 1: and some of that will continue just the you know,
Speaker 1: oh my god, can you believe this reaction that we
Speaker 1: seem to have on whether it's the NFL or Puerto
Speaker 1: Rico or you name it. I mean that that has
Speaker 1: an effect. But the fundamentals, tax policy is an important issue.
Speaker 1: Um and you know, earlier in the year, and this
Speaker 1: was less Trump than and more Kevin Brady. Uh, they
Speaker 1: had a Houseways and Means Committee. It was like, We're
Speaker 1: going to do these grand things. We're gonna go to
Speaker 1: a territorial system, We're gonna do all of that sort
Speaker 1: of stuff. People are saying, well, how do I value something?
Speaker 1: How do you value even a retailer, which there's got
Speaker 1: to be a lot of M and A in that space,
Speaker 1: There's no question about it. But if you import both
Speaker 1: of your stuff and there'll be the B A T,
Speaker 1: what's it worth? I don't know. I mean, so it
Speaker 1: it inhibited things getting rid of that uncertainty, and it's
Speaker 1: self gonna open the floodgate, but it will be an
Speaker 1: important point of a very important part of it. I've
Speaker 1: talked with Stephano Pissina of Well Grade Boots Allions just
Speaker 1: a few weeks ago after his steal for right aid
Speaker 1: went through and I asked him what he thought about
Speaker 1: the environment and Shington, and he said, there is a
Speaker 1: lot of uncertainty and surprised by how long his particular
Speaker 1: process took. Our things taking longer. Imagine there's a lot
Speaker 1: of observation of how these regulators are working, some of
Speaker 1: which have fewer commissioners than than a full panoply of them.
Speaker 1: Of course, but is it taking longer than it did
Speaker 1: in the past. Well, it's it's kind of break into
Speaker 1: two pieces. Deals is started in the old administration. Those
Speaker 1: are taking even longer because of there's been a lot
Speaker 1: of departures. Um the thing, you know, the leadership changes,
Speaker 1: but the staff positions don't change. So their attitudes about
Speaker 1: very aggressive uh. Any trust enforcement If FCC you name
Speaker 1: a regulatory enforcement, that's that's uh. That's continuing and in
Speaker 1: fact even dragging things out. We have a deal that
Speaker 1: was announced fourth quarter last year that we thought would
Speaker 1: be long be closed. It looks like a team deal.
Speaker 1: Same people who would have reviewed this transaction under President
Speaker 1: Obama they've got it, so they have those attitudes. H
Speaker 1: Any trust will get easier. On the other hand, there's
Speaker 1: some aspects of the new administration where deals are tougher.
Speaker 1: I mean, the amount of Chinese M and A in
Speaker 1: in the United States is going to be not virtually nothing.
Speaker 1: I think Uma Chinese companies have switched almost like vcs
Speaker 1: venture capital investment rather than M and A. Boberfus is
Speaker 1: with us here in Bloombic even three studios. He's the
Speaker 1: global chair of M and A at jones Day Law
Speaker 1: from jones Day and before break, Bubb we were talking
Speaker 1: about the role of China in the deal's space, and uh,
Speaker 1: you know, I've I've noted the degree to which Chinese
Speaker 1: regulators Chinese that government officials are cracking down on capital outflows.
Speaker 1: When when you look at the diminished role of China
Speaker 1: in the deal space, is it is it because of
Speaker 1: a declining US appetite that you see Cyphius perhaps expressing
Speaker 1: some reluctance to approve these deals, or is it more
Speaker 1: attributable to what the Chinese government is doing that is
Speaker 1: letting less Chinese money out of the global marketplace. Well,
Speaker 1: it's really both. Um was an incredible here for Chinese
Speaker 1: investment in North America. Had forgotten the exact number. I
Speaker 1: think it was in the order of j billion dollars.
Speaker 1: That's a lot from way more than there have ever
Speaker 1: been before. Yes, the it's coming from both ends. The
Speaker 1: Chinese government is cracking down. But when you talk to
Speaker 1: Chinese clients we have we have over a hundred lawyers
Speaker 1: in China and UM we talked to these clients what
Speaker 1: they're really they're They're concerned less about currency issues and
Speaker 1: their regulatory UM regulatory matters, but the attitude of the
Speaker 1: current administration, which has perceived to be very antagonistic towards
Speaker 1: Chinese investment. UM. There was an important cifist decision to
Speaker 1: block a semiconductor deal on the basis of that impacted
Speaker 1: national security. I don't know, there's a lot of semiconductor companies,
Speaker 1: no offense to anybody in the industry, but it just
Speaker 1: you know, to the m and A community, people went
Speaker 1: g that that's pretty significant. There was a cifious decision
Speaker 1: earlier having to do with what was essentially a real
Speaker 1: estate transaction, but it was close to an army base
Speaker 1: up in the Pacific Northwest. So there's a sense that
Speaker 1: some of this America first, and America is going to
Speaker 1: be great again, all that stuff, it's going to really
Speaker 1: impact foreign investment. Maybe not for an investment generally, but
Speaker 1: certainly China within these wonderful observations is our collective memory,
Speaker 1: whether it's Pebble Beach Golf Club, remember the upward when
Speaker 1: we were kids over that. But I guess my right.
Speaker 1: UNICELL was sort of the seismic legal transaction review that
Speaker 1: police MR purchasing. Well, there's a the sort of a
Speaker 1: very large Chinese company named c which is that at
Speaker 1: that time of state owned enterprise tried to acquire Unical
Speaker 1: and it has that name Unical, and so the perception
Speaker 1: was it was an American company and it was blocked
Speaker 1: on Ciphius grounds, like Stiffius is a inter agency's committee
Speaker 1: in Washington that looks at things that impact national security.
Speaker 1: And it was a pretty extraordinary transaction. This is because,
Speaker 1: in all honesty, it was an oil company. Um. Well,
Speaker 1: of course oil in general impacts everything, at least at
Speaker 1: least today and back then. Um. But the irony was,
Speaker 1: even though it was named Unchale, about eight percent of
Speaker 1: assesss were in Asia. UM. So it really wasn't an
Speaker 1: American transaction except name only in a real sense. But
Speaker 1: that's sort of the point, is that politics can get
Speaker 1: in the way. UM. Most times the other regulatory agencies
Speaker 1: don't really look at that. UM. But you know, there
Speaker 1: was a lot of talk about you know, America, this,
Speaker 1: America that, and the and the election last last term,
Speaker 1: and we're probably going to see it, and there was
Speaker 1: some you know, biggest bad uh stuff. We haven't seen
Speaker 1: the answer yet. UM. I frankly think it'll go forward.
Speaker 1: But the Time Warner deal still pending, and of course,
Speaker 1: as a candidate, President Trump basically said he'd block it.
Speaker 1: So we'll see what if we learned about the leg
Speaker 1: to see if breakit. We talk with the legacy of
Speaker 1: Brexit before it's officially happened here, but the legacy of
Speaker 1: that vote at least, and our notions of of what's
Speaker 1: accessible when it comes to to competition and companies in Europe.
Speaker 1: I sat down with the Margaret ofst Or a few
Speaker 1: weeks back. She was in Washington, d C. And obviously
Speaker 1: she's focusing on a large part on on US tech companies.
Speaker 1: Is there a lessoned appetite for for deals in Europe
Speaker 1: or in the UK at this point as a result
Speaker 1: of Brexit? Well, actually, um, the deal of in the
Speaker 1: third quarter Europe was down more than any any other
Speaker 1: market if you look, if you think it's Asia and
Speaker 1: America's and Europe. It was down almost fifteent year on
Speaker 1: urine on a dollar basis. Um. Again, the number of
Speaker 1: transactions wasn't down quite so much. That stays pretty constant,
Speaker 1: and that the value is driven by these big deal
Speaker 1: of things over five billion and that sort of thing.
Speaker 1: I think there's a sense that it's probably not going
Speaker 1: to make that big of a difference. Yeah, there will
Speaker 1: be a thousand bankers moved from London to frank It
Speaker 1: or someplace like this by that, by a financial institution
Speaker 1: or two. But in terms of the overall activity, there's
Speaker 1: a sense and maybe we're kidding ourselves that maybe it
Speaker 1: was more sound and fury than reality. Um. And frankly,
Speaker 1: the EU was doing it in general pretty well economically,
Speaker 1: and there's in terms of growth rate and all the
Speaker 1: rest of it. So that you're seeing a lot of
Speaker 1: activity again, thinking about activity, and it comes through the
Speaker 1: railed UH announcement about a rail deal that was last week.
Speaker 1: That's an evidence there's plenty to do there. So um,
Speaker 1: I think people are pretty optimistic. I think the concern
Speaker 1: is is Asia. I really do Bob, thank you so
Speaker 1: much for being with a great in Your time is
Speaker 1: very valuable. Bob Bills by a syllable issue Ago David,
Speaker 1: his time is extremely generous of you to be with
Speaker 1: a sense surveillance on television and in a radio, and
Speaker 1: particularly your perspective there of your colleague in Atlanta. You're
Speaker 1: gonna dash out the door. Good to see. Take care
Speaker 1: you try to move to things uh more holiday and
Speaker 1: more timely on the calendar, which is finally degree in
Speaker 1: New York ended a few days ago, joining us. Uh.
Speaker 1: Stephen bar with p WC Steve let me ask with
Speaker 1: an open question October one, October two, how does the
Speaker 1: holiday season shape up? Yeah, it's really looking like it's
Speaker 1: going to be a great holiday both for retailers and consumers.
Speaker 1: We're about to release our holiday outlook which tells us,
Speaker 1: which tells us that the majority of consumers about are
Speaker 1: going to spend more or the same as they did
Speaker 1: last year. And that's a six in works. But being
Speaker 1: them to spend about six percent more than they did
Speaker 1: last year on average overall about eighty nine dollars sounds great.
Speaker 1: It's all going to go to Amazon or to some
Speaker 1: of it actually migrate to the brick and mortars store
Speaker 1: with two down, empty and vacant. Right now, which way
Speaker 1: is that going to till? Yeah, we're we're actually looking
Speaker 1: for it to be both. UM a great holiday for
Speaker 1: in store and online. No, no question that we're going
Speaker 1: to see the majority of the growth online. But the
Speaker 1: retailers have really come back with propositions that say they
Speaker 1: can keep the store relevant, especially in those areas with
Speaker 1: key demographics. And so for the first time in a
Speaker 1: long time, we're looking for stores to have a very
Speaker 1: productive holiday season. How did they go about keeping those
Speaker 1: stories relevant? You write about I love this phrase holiday
Speaker 1: felicity at stories? How does it? How does a traditional
Speaker 1: retailer get people to walk in You went to my house,
Speaker 1: We've got felicity. Yeah, it's yeah, it's Look, the malls
Speaker 1: UM of the past is long dead. And while we've
Speaker 1: seen as a massive shift to more entertainment and dining
Speaker 1: and so so the stores UM or the malls of
Speaker 1: the past that we're really a destination primarily for apparel.
Speaker 1: UM now are a destination for community, with dining and
Speaker 1: entertainment options making up nearly a quarter a quarter of
Speaker 1: the overall property and We've also seen the great mall
Speaker 1: operators adapt and they're doing things to draw Gen Z
Speaker 1: and and young millennials with things like uber lounges and
Speaker 1: really just making it convenient for UM that that next
Speaker 1: set of shoppers in the younger generations to care about
Speaker 1: the mall. Again. Interestingly enough, UM, we did a survey
Speaker 1: of of young Gen zs and they told us their
Speaker 1: favorite place to shop is actually you store versus online.
Speaker 1: You wrote about the move here for people to spend
Speaker 1: more this holiday season, I think gout by a six.
Speaker 1: That's your your prediction. Is that going to be across
Speaker 1: the board? In other words, do you have all strata
Speaker 1: of consumers indicating that they're going to be paying more
Speaker 1: this holiday season? Yeah, Well, the good news is that
Speaker 1: consumers over sixty that earn over sixty tho dollars a
Speaker 1: year are are going to spend more this year. But
Speaker 1: those consumers UM that that earned less than sixty thou dollars,
Speaker 1: they're they're still struggling. And so the median income for
Speaker 1: for UM all households in the US is around fifty
Speaker 1: nine thou dollars, but it takes about sixty six thousand
Speaker 1: dollars for a family afford to cover their basic needs.
Speaker 1: So it's just, you know, we just haven't seen the
Speaker 1: wage growth. While it's better than it's been um, you
Speaker 1: know in recent past, it just isn't enough to push
Speaker 1: those folks over. So we really do expect that the
Speaker 1: higher end consumer, and we also expect and older crowd
Speaker 1: to be the crowd that's driving the overall. Okay, I'm
Speaker 1: glad it doesn't identify me. Um. You know, when when
Speaker 1: I look at this, Steve, I think beg EON's and
Speaker 1: it was a Sears robot catalog that drove the dialogue.
Speaker 1: And then maybe with nostalgia and their bankruptcy, it was
Speaker 1: Toys r Us. Everybody wandered into Toys r Us for
Speaker 1: a frenzy of one hour shopping or two hour shopping.
Speaker 1: In case of the growth family, What's what's the emotion
Speaker 1: now behind all your economics, What's what's the emotion of
Speaker 1: the holiday moment? Yeah? Well, I think that emotion is
Speaker 1: driven by different things. I think that when we see,
Speaker 1: for for the younger generations, their emotion is influenced by
Speaker 1: social media, and that that social media is generally visual.
Speaker 1: So we see we see an interesting split in the
Speaker 1: analysis where um, for the older crowd, their social media
Speaker 1: is drive and by things like Facebook, and then for
Speaker 1: for for the younger generations, it's driven by things like
Speaker 1: Instagram and YouTube because they're they're far more visual. So
Speaker 1: and so that's the emotion that was that we're seeing
Speaker 1: Steve bar Thank you, Steve Barr, Thank you. P WC
Speaker 1: on retail David YouTube will never replace this, Sears, Roebuck
Speaker 1: Christmas candalog page four, silvertone guitars. This is Bloomberg, David Garrett,
Speaker 1: and Tom Keane here in New York Bloomberg surveillance on
Speaker 1: Bloomberg Radio. As a reporter in Washington, I relied often
Speaker 1: on the work the Urban Brookings Tax Policy Center, Howard Gleckman,
Speaker 1: Len Berman, Donald Marrin as well, who joins us on
Speaker 1: our phone lines. The Tax Policy Center worked quick after
Speaker 1: that framework came out last week, delivered an analysis just
Speaker 1: couple of days later. The headline here the Text Policy
Speaker 1: Center estimating that the proposal would reduce federal revenues by
Speaker 1: two point four trillion dollars over the first ten years
Speaker 1: and three point two trillion dollars over the subsequent decade.
Speaker 1: Donald mayn Great to speak with you. And before we
Speaker 1: dig into that headline number, let me just ask you
Speaker 1: about the difficulty of doing this. We look at these
Speaker 1: nine pages and the unanswered questions there, and how how
Speaker 1: difficult is it to forecast the ramifications of something like
Speaker 1: this with that little information. Well, you know, it is difficult.
Speaker 1: And you'll you'll see that our our report is headlined
Speaker 1: a preliminary analysis. Uh they're clearly important features that it
Speaker 1: doesn't include because the administration and Congress have inspelled them
Speaker 1: out in any detail. But we've we've seen some of
Speaker 1: the ideas they've had in previous proposals, and they certainly
Speaker 1: provided a lot more detail last week. And so this
Speaker 1: is this is the team's best cut at what we
Speaker 1: know about the plan so far. Something we've heard over
Speaker 1: the week, and they provided detail in that that framework,
Speaker 1: of course, and we've heard from many of the principles
Speaker 1: over the course of the week, and Stephen anution, the
Speaker 1: Treasury Secretary reiterating this is actually going to reduce the
Speaker 1: deaf Is it square square that with what you found
Speaker 1: in your preliminary analysis thus far? Uh So, it's exceedingly
Speaker 1: difficult to square that. The pieces that we've seen articulated
Speaker 1: thus far as as he said in the lead in,
Speaker 1: would reduce revenues by more than two trillion dollars over
Speaker 1: the next decade. Uh. That doesn't include our estimate of
Speaker 1: what the macroeconomic effect will be. That's in the works.
Speaker 1: That just takes longer, so you'll see that soon. But
Speaker 1: you know, none of the models that the scoring shops
Speaker 1: here in Washington, US would show you anywhere near you know,
Speaker 1: two trillion plus. Coming back from that, we should point
Speaker 1: out that all of our CBO directors, of various flavors
Speaker 1: and persuasions, are steamed academics. Mr Mayren no different with
Speaker 1: his mathematics at a school in Cambridge called Harvard, and
Speaker 1: then he went he went down the river, up the river.
Speaker 1: I guess it's down the river, downstream into the economics
Speaker 1: m I T. And what that tells me done is
Speaker 1: you know, the glide path. If we start at one
Speaker 1: point five trillion, I've seen numbers as high as two
Speaker 1: point four trillion. First of all, what's the certitude that
Speaker 1: the number is bigger than one point five trillion? What's
Speaker 1: the likelihood is always the case at the cost of
Speaker 1: this thing is a lot bigger than anybody thinks, well,
Speaker 1: you know, the likelihood is high of what we saw
Speaker 1: spelled out in detail. But you know, but they did
Speaker 1: include some language in there about things they could do
Speaker 1: that might bring in more revenue. Right, So they've talked
Speaker 1: about limiting interest deductibility for businesses. Uh, they talked about
Speaker 1: possibly while they focused on reducing the tax code individual
Speaker 1: tax code to three brackets, they talked about the possibility
Speaker 1: of a fourth one on high income folks. Obviously, depending
Speaker 1: on what numbers you choose for those, you could raise
Speaker 1: a significant amount of money doing those two things. Okay,
Speaker 1: well that's the optimistic tech. Let me be more realistic.
Speaker 1: Do you know of any proof in history that generating
Speaker 1: that there's a possibility of generating economic growth, sir? Substantial
Speaker 1: tax reduction? Oh you are after the car. Yes, is
Speaker 1: there a theory, but is there a tangible evidence? You know? So,
Speaker 1: there there's definitely some evidence that links taxes to economic growth,
Speaker 1: but the magnitudes are just not on the level that
Speaker 1: you know that the more extreme advocates suggest. You know,
Speaker 1: when the when the Congressional Budget Office or the Joint
Speaker 1: Committee on Taxation sit down and analyze, you know, look
Speaker 1: at all the evidence and then analyze tax proposals. For
Speaker 1: ones that are particularly pro growth, they find that sometimes
Speaker 1: the growth will offset ten fift of the lost revenue,
Speaker 1: which is helpful and material and something Congress ought to
Speaker 1: know about, but you know, nowhere near paying for the
Speaker 1: vast majority of it. Let me ask you what this
Speaker 1: means for for individuals. Something else that the Principle stressed
Speaker 1: over the weekend here is everyone's going to get a
Speaker 1: tax cut. Looking at your Prelimer analysis, again, that is
Speaker 1: the case. There are going to be tax cuts for
Speaker 1: most Americans. That seems it just varies based on what
Speaker 1: income strata you're in. Yes, it's certainly not everybody, because
Speaker 1: they're going to be some people who face tax cuts,
Speaker 1: which I mean taste face tax increases, which is almost
Speaker 1: inevitable as you make changes to something that's complicated. Uh.
Speaker 1: And it also depends when you look. So if you
Speaker 1: look in the first year all these changes, what hypothetically
Speaker 1: be in effect, about seventy eight percent of households would
Speaker 1: see their taxes go down and in about up. But
Speaker 1: then if you go to the end of the decade,
Speaker 1: that's down about with a tax cut and about with
Speaker 1: a tax increase. Because of various features that bite more
Speaker 1: as you go through time. Is there a belief among
Speaker 1: the proponents of this tax legislation that it's what, to
Speaker 1: use a sophisticated word, you learn in differential equations that
Speaker 1: it's squishy or is it like the rest of us
Speaker 1: mere mortals think that actually, bright guys like you and
Speaker 1: or Zag and hold Seken and in the Great Alice
Speaker 1: Riddle and the rest of you, you can actually model
Speaker 1: and count what's going to happen. Which is it is
Speaker 1: this tangible and pountable model building and analysis or is
Speaker 1: it squishy squishy squishy squishy? So it's both, Uh, yes,
Speaker 1: you know it's I mean the optimistic way we phrase
Speaker 1: that is that there's art and science. The the things
Speaker 1: that are spelled out in detail you can model pretty well. Right,
Speaker 1: So we have you know, a giant tax tax calculator, right,
Speaker 1: the policy wanks equivalent of turbo tax here um. And
Speaker 1: you can analyze that using recent data on what people's
Speaker 1: tax returns look like to get a good first kind
Speaker 1: of what things look like. If you make these changes,
Speaker 1: now it gets you know, now you have to start
Speaker 1: making assumptions and estimates and predictions about how will people
Speaker 1: respond and how will the world change in the future,
Speaker 1: and that becomes you know, less and less precise. Uh.
Speaker 1: But you know the modeling, I think, you know proprised
Speaker 1: incredibly useful data information about kind of what you should expect.
Speaker 1: The ballpark of effects debate, did you in your initial
Speaker 1: modeling increase GDP estimates? No? Not in the one that
Speaker 1: came out Friday. There wasn't time to run the matter model.
Speaker 1: So that's that's something the team is is working on.
Speaker 1: Will give you to Wednesday. Don Let me ask you
Speaker 1: what we've learned about the business side of things. We've
Speaker 1: focused on personal tax cuts and personal tax reform here
Speaker 1: when when you look at what's been proposed when it
Speaker 1: comes to the corporate taxes, what have you learned in
Speaker 1: terms of the ramifications of that. Well, so, obviously big
Speaker 1: cut in the corporate rate right from thirty five down
Speaker 1: to twenty. Uh. You know, some talk about rolling back
Speaker 1: tax breaks that the corporations benefit from. The net effect
Speaker 1: of that would be a significant tax reduction on corporations,
Speaker 1: with the wild card being what happens with interest deductibility,
Speaker 1: which is just in there as sort of a placeholder
Speaker 1: at the moment, But we don't know whether they intend
Speaker 1: to do that aggressively or not aggressively. What's the greatest
Speaker 1: unanswered question you have at this point? Again, the whole
Speaker 1: thing is in coit. We're going to see it move
Speaker 1: up to Capitol Hills. Some legislation is going to be
Speaker 1: built around this this framework, presumably. But as you were
Speaker 1: doing this analysis, what's the biggest unanswered question? How do
Speaker 1: the thing that made it most difficult to do the
Speaker 1: kind of full analysis you do with the Tax Policy Center. So,
Speaker 1: I mean the biggest would be, uh, what's going to
Speaker 1: happen with this hypothetical fourth bracket? Uh? Is there one?
Speaker 1: Is there? Not there one? Um? And then the issues
Speaker 1: about pass throughs, Right, so there's there are many businesses
Speaker 1: in America that don't pay taxes directly themselves, but instead
Speaker 1: past their income and tax liability through to their through
Speaker 1: to their owners. The tax proposal would reduce, would cap
Speaker 1: the tax rate those folks face at uh. And there's
Speaker 1: a big unknown about exactly how you draw the line
Speaker 1: about who qualifies, like do all pass throughs qualify or
Speaker 1: only a limited sent uh? And there's a big uncertainty
Speaker 1: about how well you can prevent people from gaming the system,
Speaker 1: because once you have a rate differential like twenty five
Speaker 1: for pass throughs and thirty five or more for high
Speaker 1: income people, a lot of people are going to have
Speaker 1: an incentive dl LC themselves, and you don't want that
Speaker 1: to happen. But we don't know how good a job
Speaker 1: they're going to be able to do with stopping that.
Speaker 1: Donald Maren, thank you so much, Former acting director CBO
Speaker 1: and Urban Institute fellow as well, Dr Marin. Today this
Speaker 1: was scheduled weeks ago. We must start with an opening
Speaker 1: comment on this tragedy from someone who knows the power
Speaker 1: of video. The video of the Jason Aldean concert is extraordinary,
Speaker 1: Ken Burns joins us. But before we speak of Vietnam,
Speaker 1: Ken video can change our social dialogue. With the video
Speaker 1: that we see of rapid firing into a large crowd,
Speaker 1: will it change the dialogue of gun legislation? Good morning, Tom,
Speaker 1: Thank you for having me. This is, of course a
Speaker 1: very very sad momentum. We'd like to say that a
Speaker 1: picture is worth a thousand words, and perhaps film and
Speaker 1: video amplify that. Unfortunately, I think today we've become kind
Speaker 1: of numb and annured to this, and I don't think
Speaker 1: we ever moved the dial either politically or socially, or
Speaker 1: legislatively or more importantly, you know, emotionally or spiritually on
Speaker 1: these things, and we've become kind of um numb. And
Speaker 1: I think that in some ways that the best line
Speaker 1: or a line of the of the of the inaugural
Speaker 1: speech in January, this American carnage must stop, was maybe
Speaker 1: used prematurely. Kenverns to your acclaimed new video. I think
Speaker 1: everyone knows the success of it. I go to the imagery,
Speaker 1: the silver haylide of tri X film that you captured brilliantly.
Speaker 1: Let me just start with what was it like to
Speaker 1: see the images that you saw in compiling this versus
Speaker 1: what Walter crn Kite told me as a kid. Yeah,
Speaker 1: you know, I grew up during that time, and Walter
Speaker 1: Concite I thought was speaking to me, not you, Tom,
Speaker 1: And so all of these things kind of entered into
Speaker 1: my consciousness and formed into my conventional I now realized
Speaker 1: wisdom of very superficial conventional wisdom, and working the last
Speaker 1: ten years putting it together and trying to connect the
Speaker 1: dots between these images, these pictures, this extraordinary photography that
Speaker 1: did at a time change things. Whether it's the assassination
Speaker 1: of the North Vietnamese spy Lamb on the streets of Saigon,
Speaker 1: whether it's Kimfluck, the little girl running naked uh you know,
Speaker 1: of her body on fire from napalm, whether it's the
Speaker 1: friend of the shot student at Kent State over his body.
Speaker 1: All of the images of that war kind of compounded
Speaker 1: into sort of a mass jumble of impressions, and we
Speaker 1: spent ten years trying to sort them out. What was true,
Speaker 1: what was accurate, what's the real story behind it? Is
Speaker 1: there a way to provide dimension it? Does contradiction have
Speaker 1: a role in it, because more often than not, and
Speaker 1: especially in war, the opposite is also true. And so
Speaker 1: by triangulating the witnesses Nor Vietnamese soldiers and civilians via
Speaker 1: con guerrillas, South Vietnamese soldiers and civilians, as well as
Speaker 1: the whole spectrum of American beliefs, we tried to paint
Speaker 1: a portrait that might take these images that form in
Speaker 1: our consciousness and enlarge them and put them into a
Speaker 1: better content. We're bringing my colleague David. David, you had
Speaker 1: an incredible quantity of footage here, and I wonder if
Speaker 1: you can begin to describe what that process was like,
Speaker 1: just just making it through all of that, and it
Speaker 1: certainly brings to front of mind how much of this
Speaker 1: was available contemporaneously. Yeah, so, David, that's a really good question.
Speaker 1: You know, one of the benefits of working in public
Speaker 1: broadcasting and having enlightened understanding underwriters like Bank of America
Speaker 1: who said, you know, when we said this is going
Speaker 1: to be controversial subject, they said, bring it on, bring
Speaker 1: it on. Better connected as their slogan, and and like
Speaker 1: the idea of a variety of perspectives. The ten years
Speaker 1: bought us a lot of time to dive deep into archives.
Speaker 1: Most people filmmakers are going to take what's on the
Speaker 1: top of the table. We could go and ask those archivists,
Speaker 1: could we get the out takes, could we get the
Speaker 1: original negative? Could we see this? We could also go
Speaker 1: to European outlets. We could go to Moscow, we could
Speaker 1: go to Beijing, we could go to Hanoi. We have
Speaker 1: some images in there that have never before been seen,
Speaker 1: and we've been able to to show them to a
Speaker 1: great effect. I think David Great and Tom Keene here
Speaker 1: in New York, Bloombergs surveillance on Bloomberg Radio Pleasure be
Speaker 1: joined by Ken Burns, the filmmaker Ken Burns, who with
Speaker 1: Lennovic has created Vietnam An eighteen hour long, a documentary
Speaker 1: in ten parts on PBS focused on that conflict and
Speaker 1: kind I want to ask you just how you you
Speaker 1: you distill all of this to find the principles on
Speaker 1: whom you focus. I was particularly moved by a via
Speaker 1: Mogi Crocker, Denton Crocker, Saratoga Springs, and you talk with
Speaker 1: his mother, Jean Marie, with with his sister as well,
Speaker 1: Carol Crocker. How do you find someone like that? How
Speaker 1: do you find a story that has so many layers
Speaker 1: and ends up being as moving? Is that one is? Well?
Speaker 1: You know the key word, David, thank you is is distilled.
Speaker 1: I think you hit it on the head. Most people
Speaker 1: assume that you build a film, and you do that,
Speaker 1: it's additive, but it's mostly subtractive. So we will collect
Speaker 1: thousands of hours of footage, tens of thousands of still photographs,
Speaker 1: hundreds of hours of testimony, transcripts of of interviews, etcetera, etcetera.
Speaker 1: So we just cast our net as far and wide
Speaker 1: as we can, and in the course of it you
Speaker 1: read an unpublished memoir of of a gold star mother.
Speaker 1: It's very moving, and wonder whether she would be willing
Speaker 1: to share on camera the worst experience of her life,
Speaker 1: and if her daughter might also be willing to do that.
Speaker 1: They they were, of course reluctantly, with great reticence and
Speaker 1: and and generosity, and gave a great gift to all
Speaker 1: of us, not just us as filmmakers, but us as
Speaker 1: a country, because the half life of grief is endless,
Speaker 1: and when you see somebody who has negotiated it, however
Speaker 1: income completely, it can be a big help. There's a
Speaker 1: moment at the end of our section on the Wall
Speaker 1: where John Musgrave, one of our interviews a marine has
Speaker 1: gone through unbelievable transformations in the course of the film,
Speaker 1: says when he got to the wall, that this is
Speaker 1: going to save lives. It would be very presumptuous to
Speaker 1: put our work of art on the same level as
Speaker 1: my a lens extraordinary thing. But I hope that in
Speaker 1: some ways people will begin to talk with each other
Speaker 1: to themselves about what took place. And I think Jean
Speaker 1: Murray Crocker and Carol Crocker have done us all an
Speaker 1: enormous service by sharing with you us the painful details
Speaker 1: of the loss of their son and brother. Mogi. What's
Speaker 1: the negotiation, like the conversation like with somebody who is
Speaker 1: a parent, who's lost a child or had someone who
Speaker 1: went right up to nearly committing a suicide. These are
Speaker 1: incredibly emotional moments you capture. How do how do you
Speaker 1: get people to to consent to to go down that
Speaker 1: path again, to to re engage with the well, you know,
Speaker 1: I'm not sure that they we we even know or
Speaker 1: they even know what kind of path we're going to
Speaker 1: go down. For us, we have to be honorable. There's
Speaker 1: no kind of gotcha journalism here, There's no aha. It's
Speaker 1: looking for telltale signs and and maybe listening that much
Speaker 1: harder and pursuing something that caused a twitch in the cheek,
Speaker 1: and and doing it, you know, gently, uh, in a
Speaker 1: way that's not going to upset their own fragile you
Speaker 1: know infrastructure. That's a really really important thing that we
Speaker 1: have to learn is is to listen and to be
Speaker 1: prepared to hear these things from them and and not
Speaker 1: just go after a list of questions. You can't to
Speaker 1: parallel this. Whether you're magnificent the Civil War, which some
Speaker 1: of us are embarrassed to say, we've seen five times.
Speaker 1: The Battle of Casson was to go back to Mr Cronkite,
Speaker 1: something daily that we heard about. And this is a
Speaker 1: six month battle, truly a battle almost in the John
Speaker 1: Keegan sense. What did you learn in piecing together Ducto
Speaker 1: and Casson? What was the thing that came away? It
Speaker 1: was totally removed. We didn't know about it except the
Speaker 1: nightly news. And yet here was something out of another time,
Speaker 1: a John Keegan kind of another war, Yes, exactly. And
Speaker 1: so I think that you know, and and it has
Speaker 1: it harkens back to the Alamo and harkens back other things.
Speaker 1: There's a moment when John Musgrave, the marine I was
Speaker 1: talking about in his experience up an I Corps where
Speaker 1: where Cassan is, he was in a different place called Kandian.
Speaker 1: He said, you know, war is a real estate business,
Speaker 1: but it wasn't here. You don't like to be wounded
Speaker 1: taking the same mountain again. And I think that in
Speaker 1: some ways with regard to Casson, we could grasp it
Speaker 1: because here we were in a place a fort. It
Speaker 1: was like the Indian Wars or the Alamo and we're
Speaker 1: being attacked. So Americans could sort of wrap themselves around
Speaker 1: the Kegan esque aspects of that, and ducto for most
Speaker 1: of the action of the Vietnam War, though it's something else.
Speaker 1: It's send man a patrol, sometimes as little as a
Speaker 1: patrol out to be ambushed, to draw fire, to be
Speaker 1: bait as they themselves, the army guys and the Marines
Speaker 1: set it. And so these are harder battles to understand.
Speaker 1: And when you take a mountain, a Hamburger hill and
Speaker 1: backwards uh in time uh at great cost, and then
Speaker 1: abandon it right away, you begin to see the effect
Speaker 1: that it has not just on an American public, but
Speaker 1: on the morale of the soldiers who are being asked
Speaker 1: to take or retake, or or take yet again a
Speaker 1: hill that has no strategic places, just where the enemy is.
Speaker 1: The enemy also understands this, and so they are willing.
Speaker 1: They've they've made a huge commitment of lives that we
Speaker 1: will not count the cost, their leader lays one said,
Speaker 1: which is a terrifying thing, meaning they will send you know,
Speaker 1: many thousands of men to their deaths in order to
Speaker 1: lure Americans into these kind of battles in which they
Speaker 1: then blend back into the into Cambodia or something like this.
Speaker 1: So John George Marshall said, uh at the end of
Speaker 1: World War Two that a democracy could be in a
Speaker 1: war for ten years and then the people would get
Speaker 1: really unhappy about it. So it may be speaking a
Speaker 1: kind of truth from the ancient voices of our past
Speaker 1: generals to what happened in Vietnam in the time we
Speaker 1: have left you. Let me ask you about how the
Speaker 1: way that you make these films has changed. My wife
Speaker 1: and I sat down and watched this contiguously, night after
Speaker 1: night after night, and we came to the realization just
Speaker 1: because of talking to friends that some had binge watched
Speaker 1: or watched it, you know, in large chunks. Others we're
Speaker 1: gonna wait and watch it later on. It's not a
Speaker 1: moment in the way that it was with the Civil War,
Speaker 1: tim reference, not just a moment ago. How does that
Speaker 1: change the way that you pursue making a film, the
Speaker 1: way that we watch movies, the way that we watched
Speaker 1: documentaries and television programs to do that's a great question. Again.
Speaker 1: I mean, we don't change the way we do it.
Speaker 1: We want to still keep it very process oriented. We
Speaker 1: wish we should were still shooting film where we could
Speaker 1: hold the damn things in our hand instead of all
Speaker 1: of us having a mouse and a keyboard and all
Speaker 1: of that sort of stuff. But we do have to understand.
Speaker 1: I always watch it every time as broadcast. I am
Speaker 1: there in my living room alone, uh, you know, or
Speaker 1: with loved ones watching the film that I've made and
Speaker 1: I've seen a hundred times, but I want to watch
Speaker 1: it when everyone else is. But you have to understand
Speaker 1: in this new agent, everybody got it are Underwriter's Bank
Speaker 1: of America, the Better Angels Society, which is a group
Speaker 1: of people across the political spectrum of people of means
Speaker 1: who have contributed to this film. Which was very heartening
Speaker 1: that we could have that kind of support. Uh, you know,
Speaker 1: the various foundations, the government branding agencies all understood we
Speaker 1: have a new paradigm. So you do have that broadcast,
Speaker 1: but it is available for streaming. The DVDs are released
Speaker 1: two days after the series starts broadcasting. I'm meeting friends
Speaker 1: who finished it last night. Tom, you know who s
Speaker 1: this is like the Ken we know and love, you know,
Speaker 1: but so people are and right now it's going to
Speaker 1: be launched Tomorrow Night as a weekly series on on PBS.
Speaker 1: It's gonna take us almost at Christmas time, and um,
Speaker 1: that's the new paradigm. You've got to have it on
Speaker 1: every single platform in every way. But it doesn't alter
Speaker 1: fundamentally how you make the film, Ken Burns, I downloaded
Speaker 1: off Amazon Video if that helps your data points as
Speaker 1: you can, Ken Burns, congratulations and thank you so much.
Speaker 1: It is simply the Vietnam War. Thanks for listening to
Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on
Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm
Speaker 1: on Twitter at Tom Keene, David Gura. Is that David Gura?
Speaker 1: Before the podcast? You can always catch us worldwide. I'm
Speaker 1: Bloomberg Radio