Speaker 1: Runt You by Bank of America Mary Lynch with virtual reality,
Speaker 1: virtually everything will change. Discover opportunities in a transforming world
Speaker 1: VI of a mL dot Com slash VR, Mary Lynch,
Speaker 1: Pierced Fenner and Smith Incorporated. Ye, Welcome to the Bloomberg
Speaker 1: Surveillance Podcast. I'm Tom Keene with David Gura. Daily we
Speaker 1: bring you insight from the best of economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Gabriela
Speaker 1: Santos with US with JP Morgan Asset Management. She would
Speaker 1: only appear on Bloomberg Surveillance with a Dow or higher.
Speaker 1: What do you tell people when you say they go
Speaker 1: twenty one? I never imagined it. How do you frame that?
Speaker 1: For sophisticates and those like me less sophisticated, We would
Speaker 1: say that less important than looking at the index level
Speaker 1: is actually looking at the underlying earnings for companies, which
Speaker 1: is exactly what's led us to these higher index levels
Speaker 1: is the fact that US companies are making again uh
Speaker 1: an incredible amount of profits every single quarter. That's really
Speaker 1: the most important piece here. Rather than a particular index level.
Speaker 1: When it comes to volatility, what do we learn last
Speaker 1: week and we had that spike or at least thing
Speaker 1: and nine point nine point nine for what do we
Speaker 1: learned last week from that? When I think about the
Speaker 1: VIX and I think about volatility in the market, um
Speaker 1: there as the volatility in terms of headlines, right and
Speaker 1: those certainly we have plenty of both in the US
Speaker 1: and around the world. But also if we think about
Speaker 1: economic volatility, that's really decreased over the past year or so.
Speaker 1: A lot of the risks that have been threatening the
Speaker 1: global economy have receded from plunging commodity prices to a
Speaker 1: Chinese hard landing too uncontrolled currencies, and that's what is
Speaker 1: keeping volatility low, I think, is the removal of a
Speaker 1: lot of those economic uncertainties. How do you look at
Speaker 1: at Europe playing off of that a little bit? We
Speaker 1: have the political story when following that for for many
Speaker 1: months now, and then there's the economic story. Do you
Speaker 1: cleave both of them? Do you look at them in
Speaker 1: concert with each other? How do you how do you
Speaker 1: look at the European market economy? Right now? We place
Speaker 1: much greater weight on the actual economic story, and that's
Speaker 1: been positive for quite a while now. In Europe, we
Speaker 1: saw some very good growth out of Europe in the
Speaker 1: first quarter, two per cent um growth that's being driven
Speaker 1: by a rebound in consumption as well as investment UH
Speaker 1: and growth that's very diversified by country, and that's very,
Speaker 1: very encouraging in terms of its sustainability. When you look
Speaker 1: at at opportunity overseas UH and emerging markets are at
Speaker 1: the AAR zone, where do you see the greatest opportunity
Speaker 1: at this point? So we see in exactly both of
Speaker 1: those regions you mentioned, so the Eurozone specifically speaking, and
Speaker 1: when we think about companies, we want companies that are
Speaker 1: able to access that domestic story in Europe, so companies
Speaker 1: that can tap into that rebound in the European consumer,
Speaker 1: for example. And we also look at emerging markets and say,
Speaker 1: with so many, so much stability in these external variables China, commodities, currencies,
Speaker 1: that's actually a good environment for growth to continue improving
Speaker 1: in e M with within this is the feeling that
Speaker 1: it's the greatest bowl market since time began, and people
Speaker 1: say it's unloved, is it really? I mean, you're out
Speaker 1: in the trenches what do you hear from institutional people
Speaker 1: desperate to make the benchmark? And what do you hear
Speaker 1: from high net high net worth people. You know they're
Speaker 1: in cash, their scirits off. What do I do with
Speaker 1: the next three million dollars? Now that we have that problem,
Speaker 1: But what's the mood out there? It has been incredibly
Speaker 1: unloved and I think it's still like Dan Saunders H
Speaker 1: David is adamant about this, it's still totally unlooked. And
Speaker 1: we feel that when we're on the road speaking to clients,
Speaker 1: both of the institutional and the individual variety. Our job
Speaker 1: for the past few years has been talking people off
Speaker 1: the brink thinking that the US is about to go
Speaker 1: into a recession, companies will never make enough money again.
Speaker 1: And that's what I think has made it very unloved.
Speaker 1: Is this distrust of economic and earnings data. Um perhaps
Speaker 1: that's starting to shift as we're starting to see some
Speaker 1: fading of those concerns, but we still see a lot
Speaker 1: of special especially individual investors, that are still very heavy
Speaker 1: on cash and fixing income. Is dividend grows still work?
Speaker 1: We got seconds the just the theme of our lifetime
Speaker 1: is dividend growth Still the religion. Well, you have to
Speaker 1: think about sustainable dividend growth and whether you also have
Speaker 1: earnings growth that's associated with that. So it's not just
Speaker 1: purely chasing dividends and utilities and Telecom's chasing companies that
Speaker 1: are able to grow their dividends and their earnings. We
Speaker 1: want to give us a name or to just you know,
Speaker 1: try to, you know, someday we can speak to in
Speaker 1: terms of sectors, I would think about financials. Is actually
Speaker 1: a great dividend and earnings play the reason you have
Speaker 1: Gabriela Santos back, we didn't cover financials. How about that?
Speaker 1: She is with JP Morgan with our question. Our interview
Speaker 1: of the day was on China on the misinformation, the
Speaker 1: miss and the reality as we can perceive it of
Speaker 1: their financial system. This was Donald Strassheim. We did this
Speaker 1: on Bloomberg Television earlier and we are thrilled to go
Speaker 1: further now on Bloomberg Radio. David Guraw was just great
Speaker 1: on that new fragility and mystery of what they're doing. Yeah,
Speaker 1: thanks for it for sticking a right. Let me ask you,
Speaker 1: first of all, what we know about China's death picture.
Speaker 1: We saw the news of the downgrade yesterday China out
Speaker 1: It's Moody's fifth highest investment great tick down a notch.
Speaker 1: What do we know about the debt picture? There's all
Speaker 1: of this shadow banking. How much of it is still
Speaker 1: a mystery? A lot of it's still a mystery. Um,
Speaker 1: there is uh a mystery in terms I think of
Speaker 1: actual levels. There is a mystery of whether there is
Speaker 1: a mismatch of maturities of all these various paper How much, um,
Speaker 1: how much of long term projects are being financed with
Speaker 1: short term money? This is inherently a problem to be
Speaker 1: to be avoided. Are we are we seeing defaults? Are
Speaker 1: we beginning to see more defaults in China? Not materially
Speaker 1: that's one of the problems, I think quite frankly, Um,
Speaker 1: you need to have HUM. I don't hesitate to use
Speaker 1: the term, but an honest system, and failures are part
Speaker 1: of the process. And what we see rather is um
Speaker 1: loans that are clearly non performing get evergreened and they
Speaker 1: rolled over, they get rolled over again and again. And
Speaker 1: bonds that are financing some four thousand seat opera house
Speaker 1: uh in some middle size city that there's just not
Speaker 1: four thousand people to go there every Friday, and Saturday
Speaker 1: night for the next decade, and these get rolled over
Speaker 1: and over and when when that kind of thing happens, Uh,
Speaker 1: it just creates uncertainty and doubt and it's a bad thing,
Speaker 1: not a good one. How do you dovetail this that
Speaker 1: the conversation about China's debt with what the Chinese president
Speaker 1: unveiled at that form a few weeks back we saw
Speaker 1: the meeting at the State Guesthouse with with Vladimir Putin
Speaker 1: all of that, How does that complicate the dead picture
Speaker 1: the ambitious plans of creating this new Silk Road. Actually,
Speaker 1: I don't think it really does complicate it. Uh. Anything
Speaker 1: that happens in this so called new Silk Row one belt,
Speaker 1: one road project is going to be agreement among um
Speaker 1: kind of consenting adults. And so China is going to
Speaker 1: have a deal with Country X and this or maybe
Speaker 1: a multilateral deal on some infrastructure project or whatever happens
Speaker 1: to be. UM. Unless all parties agree to this, it's
Speaker 1: not going to happen. So we don't really know the
Speaker 1: scope of this project yet and we won't uh, And
Speaker 1: it'll be a constantly moving target. Given how important debt
Speaker 1: has been to fueling the Chinese e comedy. What what
Speaker 1: will the Chinese prison do? What options are available to him? Uh?
Speaker 1: Would he scale back the reliance on debt? Is that
Speaker 1: even a possibility? But does he have to keep counting
Speaker 1: on it to maintain the level of growth we've all
Speaker 1: become accustomed to? There? He he has to continue. Uh,
Speaker 1: they are reliant on debt, they're addicted today. He has
Speaker 1: to continue that. He can't do He can't reduce it
Speaker 1: in any kind of uh precipitous way. But their growth
Speaker 1: rate is going to come down, and it's going to
Speaker 1: come down a long ways over the next decade. And
Speaker 1: it is a myth to think the new normal, just
Speaker 1: to use bill growth term from a few years ago.
Speaker 1: The new normal is not any number. Well, it's a
Speaker 1: lower number every year. I want to go back to.
Speaker 1: And I'm gonna mispronounce this, sir. The Guaso opera house
Speaker 1: is Guiso on the Pearl River, right, So they build
Speaker 1: an opera house. Maybe it's that one, maybe it's one
Speaker 1: of ten others, and they have debt for that. Who
Speaker 1: holds that debt? The banks, the state owned banks, the
Speaker 1: state owned the issue bonds to build an opera house.
Speaker 1: I assume the government issues the bonds. Who owns the banks?
Speaker 1: The banks not like a mutual fund that this is
Speaker 1: not usually owned by guys like you and me over
Speaker 1: there are there in solvent If they own Guangcho opera
Speaker 1: house bonds, they are. They are solving so long as
Speaker 1: the lender of last resort is prepared to make them solves.
Speaker 1: So this is my key question. I don't have time,
Speaker 1: but do they have the cash to be lender of
Speaker 1: last resort? The answers they do. The answer is they do?
Speaker 1: What do they they? Well, what's the hurry? Okay, well,
Speaker 1: the hurry maybe the international markets. The whole issue is
Speaker 1: they control both your kids side of the liabilities side
Speaker 1: of their own ballet, don we Gotta go, won't play
Speaker 1: Pocito dumno? Here to get us out down strass, I'm
Speaker 1: on Chinese opera houses. This is Bloomberg. We promised this
Speaker 1: a few minutes ago. Eager to have is he commnual
Speaker 1: joining us now? I could spend five minutes reading all
Speaker 1: of his various professional titles. I'm just gonna say here.
Speaker 1: He's a Vice Provost for Global Initiatives at the University
Speaker 1: of Pennsylvania, Senior fellow at the Center for American Progress
Speaker 1: will flag his new book as well forthcoming. Uh. Here
Speaker 1: I think in early June the book called Prescription for
Speaker 1: the Future, the twelve Transformational Practices of highly Effective Medical
Speaker 1: Organization zeke. Let's start with that CBO score highly anticipated.
Speaker 1: Another iteration of scoring on this on this bill, the
Speaker 1: American Healthcare Act. What did you take away from what
Speaker 1: the CBO had to say yesterday? Well, basically, it's the
Speaker 1: same as be born. It shows you that the MacArthur
Speaker 1: effort to quote unquote soften the houses affordable American Healthcare
Speaker 1: Act did almost nothing. Uh. It's spent a bunch of
Speaker 1: billions of dollars and had negligible impact even on the
Speaker 1: number of uninsured or on the total cost of healthcare
Speaker 1: for Americans who would buy insurance. Uh. You have twenty
Speaker 1: three million people going to be thrown off insurance. Uh.
Speaker 1: The uninsured rates going to go over fifty million Americans
Speaker 1: by twenty UM. I think you know I've u this
Speaker 1: word before to describe the American Healthcare Act. It's cruel.
Speaker 1: I don't. I find it's hard to analyze it any
Speaker 1: other way. It grows twenty three million people off of coverage. Uh,
Speaker 1: it raises insurance premiums, especially for people who have illnesses. UH.
Speaker 1: And it gives a big tax break to healthcare corporations
Speaker 1: and the rich. UM. This does not sound like the
Speaker 1: kind of plan most Americans want. UH. It seems very
Speaker 1: very cruel. We had Michael Cannon on your friend, Michael
Speaker 1: Cannon from the Cato Institute just a few minutes ago,
Speaker 1: and he was talking about, yes, this particular piece of legislation,
Speaker 1: but also what he thinks is wrong with with the
Speaker 1: Affordable Care Act, and he plays his blame squarely on
Speaker 1: the the regulations imposed by that law. I just want
Speaker 1: to get your response to that. When you when you
Speaker 1: look at these insurance companies pulling out of market places
Speaker 1: in places like Kansas City or Iowa, Virginia, how much
Speaker 1: of that is attributable early to to to what's called
Speaker 1: for by the Affordable Care Act. Well, a lot of
Speaker 1: it's attributable to UH. I would say, let's put it
Speaker 1: this way. You could easily stabilize all the insurance markets.
Speaker 1: And you should remember the Congressional Budget Office said they're
Speaker 1: here to stay, they're not going away. You could easily
Speaker 1: stabilize them by enforcing the mandate. UH. Strongly and telling
Speaker 1: reminding people to have to buy insurance. That will get
Speaker 1: some people to buy insurance. Second, of all, those cost
Speaker 1: sharing subsidies that the Republicans keep threatening or at least
Speaker 1: making uncertain, means that insurance companies don't know whether to
Speaker 1: bang on them or not, and so are raising rates
Speaker 1: and are or or withdrawing. And the third thing you
Speaker 1: could do is the reinsurance, which remember Marco Rubio pulled
Speaker 1: out at the Affordable Care Act, was solidly in the
Speaker 1: Affordable Care Act and he changed the rules halfway through
Speaker 1: the game. Do those three things and there are someone
Speaker 1: to better targeted advertising, and those marketplaces are stable and
Speaker 1: actually the rates come down. So I agree that we
Speaker 1: could do more with Cannon, but that's not to say
Speaker 1: you throw the whole thing out that talks about reform
Speaker 1: not repeal. He is scathing and we've got a huge
Speaker 1: response against Mr Cannon. Thank you all of you for
Speaker 1: emailing uh In, particularly Matt in London. Ze Commanuel, the
Speaker 1: first thing you said is a distinction of do a mandate,
Speaker 1: So everybody's covered. That seems to be the not Democrat,
Speaker 1: not Republican, but the libertarian complaint. What is your study
Speaker 1: and analysis of the outcome of mandating everybody to do this.
Speaker 1: What happens, Well, the public doesn't like I mean, and
Speaker 1: I'll be honest. The poems suggest that it is the
Speaker 1: single part of the Affordable Care Act which the public
Speaker 1: doesn't like. A mandate. You cannot but the public has
Speaker 1: to be educated. And again I would say that we
Speaker 1: democrats but not do a good job of educating them
Speaker 1: to say, Look, you want no pre existing condition exclusions.
Speaker 1: You want everyone to be able to get int at
Speaker 1: a reasonable rate. You have to have a mandate or
Speaker 1: you have to have Why can't we do that? Where's
Speaker 1: the courage, where's the will to say this is what
Speaker 1: we believe in. If you don't like it, this is
Speaker 1: the outcome. Yes, I think I think we have to
Speaker 1: do a better time to explain that. But I would
Speaker 1: say so for my standpoint, if we don't like the mandate,
Speaker 1: the only alternative to really getting a stable market with
Speaker 1: pre existing disease exclusions is we're going to auto enroll
Speaker 1: everyone into an insurance package. Everyone gets it by default
Speaker 1: of being an American. We do that with Medicare, party,
Speaker 1: we basically do that with Social Security. I think that's
Speaker 1: it Okay, the alternative. Here's what we're gonna do. We're
Speaker 1: gonna come back. David Gura just wrote down that smart
Speaker 1: response from Dr Emmanuel. This is a raging debate. What
Speaker 1: we're trying to do with surveillance, folks, is give you
Speaker 1: many conversations on this so you can decide. We hope
Speaker 1: you're accomplishing that with us. Right now, Doctor Emanuel, I've
Speaker 1: got a sore elbow. Maybe you can help me with
Speaker 1: it later, Zeke Manuel. The new book will be prescription
Speaker 1: for the future. David Gura is unleashed, Doctor Manuel. One
Speaker 1: of the most important photographs in the history and courage
Speaker 1: of American medicine. Eighteen forty seven the Massachusetts General Hospital
Speaker 1: Southwestern Haws early operation using ether for anesthesia. That is
Speaker 1: a spiritual place in America, that dome at mg H
Speaker 1: and the photograph. I'll put it out on Twitter, folks.
Speaker 1: The photographs extraordinary. I think it's eight six. John Warren
Speaker 1: did h and he was the nephew of one of
Speaker 1: the great American unknown American revolutionary heroes, Joseph Warren, who
Speaker 1: was a physician in Boston and the leader of the
Speaker 1: Boston Revolutionary Group. And I know this photo. I know
Speaker 1: this from Joseph Warren and Johnny Tremaine, which I read
Speaker 1: when I was ten years Oh, zeke Emanuel, here's the
Speaker 1: emotion that everybody faces. If we go to a socialized
Speaker 1: medicine further on than Obamacare, where everyone's covered, we will
Speaker 1: lose our technical and research excellence. Will we lose our
Speaker 1: worldwide excellence in medicine if we go to where everyone's covered? Oh?
Speaker 1: Absolutely not. Just quite the contrary what you see once
Speaker 1: you do cover everyone, as you see a focus on
Speaker 1: trying to dramatically improve equality and lower the costs of healthcare,
Speaker 1: and that yields a lot of innovation. One of the
Speaker 1: things I like to say to investors is in the
Speaker 1: seven years, in the five years immediately after passage of
Speaker 1: the Affordable Care Act, venture funding and healthcare increase compared
Speaker 1: to the five years before. UM, there are a lot
Speaker 1: of talented people coming into healthcare because they see a
Speaker 1: lot of ways to innovate in the delivery of care,
Speaker 1: making it much more efficient, uh, making it much better
Speaker 1: for patients. So I think, quite the contract, you're going
Speaker 1: to see a huge flood actually, uh with if we
Speaker 1: continue with the Affordable Care Act in universal coverage of innovation. UH,
Speaker 1: in lots of places we haven't seen innovation before UM,
Speaker 1: and that's very important. Do not think of innovation and
Speaker 1: healthcare is just a new pill or a new medicine.
Speaker 1: There are going to be innovative processes of care, innovative
Speaker 1: ways of trying to get patients to be more adherent
Speaker 1: to their treatments and to lifestyle changes. And those are
Speaker 1: all serious and very vital innovations for improving our health,
Speaker 1: which is the ultimate outcome measure. I definitely want to
Speaker 1: talk a bit about that in just a minute here,
Speaker 1: But let me put a question to you that I
Speaker 1: put to Michael Cannon a few moments ago. That is,
Speaker 1: if if you have a lot of these companies pulling
Speaker 1: out of marketplaces, do you think that that turns sentiment
Speaker 1: against those companies and makes makes Americans more willing to
Speaker 1: consider a single payer system where a government run healthcare plan.
Speaker 1: Michael Cannon, I don't mean to have you guys debate
Speaker 1: by proxy. His response to that was he thinks that
Speaker 1: there are those in in Republican circles in particular, who
Speaker 1: think that was the plan all along, that this was
Speaker 1: going to May We're handicapped the insurance industry so much
Speaker 1: that we were going to get that universal coverage. I'll
Speaker 1: let you respond to that if you'd like, But I
Speaker 1: just wonder what you what you think sentiment. First of all,
Speaker 1: I think that's a ludicrous analysis if you actually look
Speaker 1: what happened after the passage of the Affordable Care Act, UH.
Speaker 1: The insurance company UH number of members went up, their
Speaker 1: revenues went up, and their stock prices went up. Everyone
Speaker 1: thought this was a great bill for insurance companies. UH.
Speaker 1: Not the reverse that it was a covert method to
Speaker 1: blow up insurance companies. Remember, the problem here for the
Speaker 1: exchanges has not been the Affordable correct It's been the
Speaker 1: Republicans pulling away the reinsurance and saying, well, we're not
Speaker 1: going to fund the cost sharing subsidies. That's what's thrown
Speaker 1: the insurance market into his tail spin. So it was
Speaker 1: not a covert way to get UH single payer at all.
Speaker 1: And there are many people who worked on it, myself included,
Speaker 1: who were not did not think single player was something
Speaker 1: we're going to get in the United States, or maybe
Speaker 1: even the most a horrible way of delivering healthcare for
Speaker 1: a variety of reasons. So I think that's the absurd,
Speaker 1: uh conspiracy theory, UH fake news story. I look at
Speaker 1: your book here again out on June the six, so
Speaker 1: we have a preview you copy, but but one of
Speaker 1: them here, a chapter here is how to pick your doctor.
Speaker 1: And I think that's something a lot of people wrestle
Speaker 1: within this conversation about where medicine is going, how it's
Speaker 1: being transformed. That's the notion of how you pick a
Speaker 1: physician changed. Yes, I do think we have better ways
Speaker 1: of trying to pick a physician. The first thing you
Speaker 1: want is a physician who's focused in uh in arranging
Speaker 1: their office on patients, not on making their schedule better.
Speaker 1: So one of the things you want to ask is
Speaker 1: do they have something called open access scheduling, That is,
Speaker 1: they have open spots in the day, so if something
Speaker 1: comes up or you happen to have three times, you
Speaker 1: can actually see the doctor when you want, not when
Speaker 1: the doctor wants. The second thing that's really important is
Speaker 1: you want a doctor who's monitoring their quality. So you
Speaker 1: want someone who's evaluating on an ongoing asist their performance.
Speaker 1: I recommend in the book you want a doctor who's
Speaker 1: got a patient centered medical home UM That's not the
Speaker 1: only way they could evaluate it, but it is one
Speaker 1: way many doctors do. I think those are probably the
Speaker 1: two best criteria. UM. I would say, you know, I'm
Speaker 1: sort of as the chapter suggests, I'm against concierge medicine,
Speaker 1: and I'm against just relying on word of mouth. Those
Speaker 1: tend not to be or the your local magazines. You know,
Speaker 1: fifty best doctors in the Washington, D c. Area wherever
Speaker 1: it happened to be. Those tend not to be UM
Speaker 1: driven by any data. Let me ask you the same
Speaker 1: question I asked Michael Cannon. We had Missouri, Kansas City,
Speaker 1: Blue across whatever drop out of these programs yesterday. Michael
Speaker 1: Cannon of course mentions Tennessee. You know all these you
Speaker 1: know what zip codes are involved, et cetera. Where's the
Speaker 1: tip point? Where's the point where you know, not that
Speaker 1: they're going to protest in front of sixtund Pennsylvania Avenue,
Speaker 1: whoever is the White House, But where's the tip point?
Speaker 1: Is insurance companies just say this isn't working? Yeah? No,
Speaker 1: I think the tipping point is going to be the elections.
Speaker 1: If you want to know the truth, I think if
Speaker 1: I were Mr Uh MacArthur in New Jersey. I'd be nervous, uh,
Speaker 1: And I think a lot of moderate Republicans are nervous. Unfortunately,
Speaker 1: given the gerrymandering, the people who voted for it are
Speaker 1: are going to be you know, immune. But I think
Speaker 1: the Republicans are going to take uh, you know, this
Speaker 1: is an election issue and people have you know, taking
Speaker 1: away guaranteed insurance and guaranteed no pre existing conditions. People
Speaker 1: are very upset about that, and I think you are
Speaker 1: going to see people pay the price. And then we're
Speaker 1: gonna get back to all right, how do we stabilize
Speaker 1: the market. What are the reforms we need? And again
Speaker 1: I'm I'm honest. We've had you known seven years. We
Speaker 1: need reforms. It's not like the Affordable Care Actors working perfectly.
Speaker 1: But reform is not throw everything out through millions. Okay, okay,
Speaker 1: but but you you hit the heart, you built this thing.
Speaker 1: It's your fault. So seek if it's your fault, what
Speaker 1: does Chuck Schumer need to do because quote unquote it's
Speaker 1: not working perfectly. But well, I I've told you that
Speaker 1: there are many things to do. So first, stabilizing the
Speaker 1: insurance market. I gave you the three most important things
Speaker 1: to thank you. H. There's a lot of cost control
Speaker 1: things that we can do quickly. Change how we pay
Speaker 1: doctors in hospitals, so it's off fee for service and
Speaker 1: it's on what are called alternative payment models. Give them
Speaker 1: one bundle or give them a set amount of money
Speaker 1: to take care of a patient, what's called capitation. UH.
Speaker 1: Make all the insurance companies that are contracting with the government,
Speaker 1: whether through the exchanges of the Federal Employee Health Benefit
Speaker 1: Plan or try Care, make them also go to an
Speaker 1: alternative payment models. This is the best way of focusing
Speaker 1: them on keeping costs down, of keeping focusing doctors and
Speaker 1: hospitals and keeping costs down, And ultimately that's the best
Speaker 1: way of keeping insurance prices down. You need to handle
Speaker 1: the drug company, the drug costs. UH. President Trump has
Speaker 1: been very vocal about that. This bill. Ironically, zero zero
Speaker 1: planks in this bill about cost control. Nothing in this
Speaker 1: bill and out cost control. So if you really want
Speaker 1: to keep insurance costs down for the long term, you
Speaker 1: need cost control. And they have said the Bay the
Speaker 1: Republicans have had nothing to say about that. Those are
Speaker 1: the things I would those are the things I would do,
Speaker 1: and there's a lot of there's a lot of sentiment
Speaker 1: in the public I think for those kinds of changes,
Speaker 1: But that's not the direction. You know, when I went
Speaker 1: in and met with President Trump, that's the direction I
Speaker 1: advised him to go. That's not the direction of the
Speaker 1: Republicans have chosen to go. We gotta leave it there. Zekeimanuel,
Speaker 1: when your book comes out, Don't be a Stranger, Ezekie
Speaker 1: Omanuel M. D uh and one of the authors of
Speaker 1: Obama Care. The book is prescription for the future. As
Speaker 1: we said, he can come back on when he sells
Speaker 1: the movie rights. Brunt You by Bank of America. Mary Lynch.
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Speaker 1: see all the bios of the key people mentioned in
Speaker 1: the story. It's called lens, and it is just that,
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Speaker 1: app or search for the Bloomberg extension at the Chrome
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Speaker 1: com slash lens. Folks, what you don't see off cameras
Speaker 1: here is Tom Ricks is so fired up. We have
Speaker 1: gone from Douglas MacArthur to General Maddis and no time
Speaker 1: at all. David, why don't you bring in our steam guests. Yeah,
Speaker 1: he was for for a while a report at the
Speaker 1: Wall Street Journal in the Washington Post. We then saw
Speaker 1: him switch to military history, really in real time, as
Speaker 1: he chronicled the war in I Rock. Tom Ricks is
Speaker 1: the author of a new book, Churchill and Orwell, The
Speaker 1: Fight for Freedom, and joins us here in Bloomberg eleven
Speaker 1: three oh. Studios want to ask you this first of all,
Speaker 1: about how this book came to be. You write about
Speaker 1: how Simon Schama has noted the relationship that these two
Speaker 1: gentlemen had. They didn't know each other personally, but admired
Speaker 1: each other's at work. How did you decide to to
Speaker 1: look at their two careers in tandem? And in fact,
Speaker 1: not only do they not know each other, they're so different.
Speaker 1: Yet the hero of Orwell's great novel his name Winston. Uh.
Speaker 1: How I came to this is after I finished my
Speaker 1: last book, The General's for my own edification. I was
Speaker 1: going back and looking at out of twentieth century journalism,
Speaker 1: asking myself what last and what didn't. And I started
Speaker 1: with H. L. Mencken and I thought, interesting style, totally
Speaker 1: out of date. E B. White Good essays, good style,
Speaker 1: irrelevant to today. S. J. Perlman, not funny. Hemingway going
Speaker 1: to be forgotten in essentury. Wait minut. I was just
Speaker 1: at Hemingways in Paris and the martiniz are still good.
Speaker 1: Hemingway on alcohol will be your thank you, probably his
Speaker 1: greatest legacy. Um. And then I picked up George Warwell
Speaker 1: and it's like, Wow, this is a contemporary voice. It's fresh,
Speaker 1: it feels like today. You could take an essay of
Speaker 1: Orwell's printed in the newspaper today and it would look
Speaker 1: like it was written for today. In fact, I think
Speaker 1: he invented the modern op ed style. What have you
Speaker 1: ever been body slammed by somebody you've covered? Yes, I
Speaker 1: have that um in Afghanistan. After the show He Could Battle,
Speaker 1: I came back and I was interviewing the tenth Mountain
Speaker 1: Division Unit Battalion. They've been very involved and they were
Speaker 1: still so pumped up from combat. The sergeant major slugged
Speaker 1: me in the chest and knocked me down. There you go.
Speaker 1: I didn't expect that when I asked the question, But
Speaker 1: what do you make what? What What should we read into
Speaker 1: what happened to yesterday's Guardian reporter in Montana being body slammed,
Speaker 1: reportedly by the gentleman running for Congress the Republic and
Speaker 1: running for Christ. What does that say about the level
Speaker 1: of discourse, the role that that we had, the role
Speaker 1: of the way that journalism is regarded right now in
Speaker 1: this country. Hitting a reporter, knocking down a reporter cross
Speaker 1: as a bright line. Uh, it's not just any citizen.
Speaker 1: Violence against any citizen that's bad. Violence against a reporter
Speaker 1: actually violates the First Amendment freedom of the press. And
Speaker 1: I would say violence against a reporter is fundamentally un American.
Speaker 1: This is unamary connectivity, and we're seeing a lot of
Speaker 1: that I think a president who seems so comfortable with
Speaker 1: autocrats and uncomfortable with with with democratic leaders is an
Speaker 1: American church Churchill in Orwell. I was just in the
Speaker 1: Churchill War rooms in Britain. Churchill had a distance from
Speaker 1: the general's. We have a president right now who seems
Speaker 1: to have an immense affection for generals, the modern generals
Speaker 1: in Dexter Filkins writing in New Yorker now on Jim
Speaker 1: Madison and all that. What do you perceive of this
Speaker 1: relationship of the general's not your book the modern generals
Speaker 1: to the president of the United States. Well, Trump combines
Speaker 1: affection with ignorance, which is a dangerous combination. Churchill combined
Speaker 1: tough leadership with deep knowledge. Churchill fundamentally understood how the
Speaker 1: military worked. He had been overseeing the b Navy in
Speaker 1: World War One. He plunged deep into the facts of
Speaker 1: the matter. You know, I I was struck by a
Speaker 1: line or very early on in your book you say
Speaker 1: that the great man theory of history is much detigrated today,
Speaker 1: but sometimes individuals matter greatly. Uh, as you wrote this book,
Speaker 1: How did that kind of govern the way that you
Speaker 1: approached the subject here? I mean, were you elected to
Speaker 1: do it in light of that. No, there's a real
Speaker 1: place for biography of people and key events. And while
Speaker 1: I do believe that there are large trends in history
Speaker 1: that are important to pay attention to, demographic and economic.
Speaker 1: Had Churchill not been Prime Minister in nineteen forty, which
Speaker 1: was really an accident of British history, world War two
Speaker 1: would have ended very differently. Had Churchill not been prime minister.
Speaker 1: Chances are we know now that a British government would
Speaker 1: have negotiated a peace settlement with Nazi Germany under which
Speaker 1: the Nazis were given free reign in Europe in exchange
Speaker 1: for Britain being allowed to retain its overseas empire. Churchill
Speaker 1: said no. He becomes prime minister only on May tenth, nineteen.
Speaker 1: The Conservatives, his own party, don't like him. They don't applaud.
Speaker 1: The Labor Party applauds when he walks into the House
Speaker 1: of Commons for the first time as Prime minister. And
Speaker 1: what Churchill does in that year is so stunning. In
Speaker 1: the summer of nineteen forty, his great speeches are all
Speaker 1: in that year. The phrases we know, blood, sweat and tears,
Speaker 1: fight them on the beaches also he leads the military
Speaker 1: in a time when they think the Germans are gonna land.
Speaker 1: He leads the British military and it's very well organized,
Speaker 1: and he supervises it closely and they fight off. And
Speaker 1: then time works to dovetail Churchill and Orwell with your
Speaker 1: wonderful book The Generals, and to bring it to President Trump.
Speaker 1: Does President Trump have a military that can support him?
Speaker 1: Or are they just simply I say this with great
Speaker 1: respect for the courage out there, the exhaustion of a
Speaker 1: multidecade war into fronts Iraq and Afghanistan. Are they just
Speaker 1: exhausted right now? Yes, m We've asked a lot more
Speaker 1: of our current troops than, in fact, we even did
Speaker 1: of a lot of our troops in World War Two.
Speaker 1: In World War Two, I think the longest any division
Speaker 1: was in combat was twelve months. We have people who
Speaker 1: have now had several years in combat. Uh. But the
Speaker 1: military right now is kind of the adult in the room.
Speaker 1: I'm not comfortable with having so many generals running our government,
Speaker 1: but it's a lot better than the alternative, which is
Speaker 1: a bunch of bannonite yahoo's. What is your prescription for
Speaker 1: General Madds? He likes to be quiet, He is the
Speaker 1: quiet marine. He hates the phrase mad dog. To be
Speaker 1: clear about it. What is your prescription for the Secretary
Speaker 1: of Defense, Matt As I think of all the generals
Speaker 1: has done the best. Um He has been low key.
Speaker 1: He has basically run the Pentagon by himself, and he's
Speaker 1: fought off the crazies in the White House. General Kelly
Speaker 1: at Homeland Security has not been done so well. I
Speaker 1: think he has um let a very rested group of
Speaker 1: officers and customs Enforcement, immigration and so on board of
Speaker 1: Patrol up go out and do some things that reflect
Speaker 1: poor discipline. General Flynn was a disaster. He blew up
Speaker 1: on the launchpad. General McMaster i've known since he was
Speaker 1: a major. He's now a National security advisor. It's been
Speaker 1: sad for me to watch him on the last We're
Speaker 1: gonna come back. David Girl is gonna do a solo
Speaker 1: here with Tomers because I've monopolised way too much. How
Speaker 1: about this, folks, This is unbelievable. Animal Farm, which I
Speaker 1: would have guessed is ninety two, was published three days
Speaker 1: after the end of World War to David who was
Speaker 1: so successful their constraint on sales when they ran out
Speaker 1: of paper, they literally ran out of paper with World
Speaker 1: War two shortage. This is fabious Churchill in Orwell the
Speaker 1: Fight for Freedom. The pictures alone, particularly last set of
Speaker 1: pictures of the two of them smoking their saving their
Speaker 1: tobacco at their table. They use their Remington typewriter whatever
Speaker 1: it was, to type this is back this. Michael bar
Speaker 1: is the only one that understands. Is you you? You?
Speaker 1: You actually had a real typewriter, right, My first resume
Speaker 1: was on a remicking type. Very good. There we go?
Speaker 1: Where were Tom Ricks? Will continue? Church Hill and or Well,
Speaker 1: Simona let David grew up bringing her steam gust. David.
Speaker 1: I'm just gonna say, smarter than we are. You and
Speaker 1: I are grinding it out in New York. One morning
Speaker 1: in Maine, Sale woke up. She peeked over the top
Speaker 1: of the covers. The bright sunlight made her blank. Tom
Speaker 1: Ricks has got to be smarter than us. He lives
Speaker 1: up in Maine. That's very good, about one mile from
Speaker 1: the island that Sal lived on. Robert mccluski wrote, the
Speaker 1: sun and uh I still see Sal and Jane around town?
Speaker 1: Is that right? That is very cool? South and Blue
Speaker 1: Brissal One morning in May and all those great books, um,
Speaker 1: and they still have the same haircuts they had. David
Speaker 1: glad to have here with us in New York and
Speaker 1: I live in three oh studios. It strikes me, and
Speaker 1: we were talking about tim President Trump's approach to the job.
Speaker 1: He's not a reader. We know that we have Andael
Speaker 1: James to read us on the show from time to time,
Speaker 1: and I'm always impressed by the depth of his knowledge,
Speaker 1: his respect for reading and for history. I've heard the
Speaker 1: same thing about General James Secretary James Madis now as well.
Speaker 1: Do you get the sense that the president is learning
Speaker 1: anything from them and others? You can quibble with having
Speaker 1: so many generals in the cabinet. What are some positives
Speaker 1: that can come from that? Do you think almost none?
Speaker 1: Because I think it is simply too late in life
Speaker 1: for Trump to catch up with the knowledge space that
Speaker 1: you really need to do that job. Well. I think
Speaker 1: it must be so humiliating for him all day long
Speaker 1: to sit there and basically find out he's the stupidest
Speaker 1: person in the room. These are not only very bright people,
Speaker 1: very energetic people at the top of their profession, alpha
Speaker 1: males of the type of respects. They also are incredibly
Speaker 1: well read and I think it must be just horrible
Speaker 1: for Trump. All all his life, he's paid people to
Speaker 1: tell him how smart he is. All these people are basically,
Speaker 1: in one way or another saying, sir, you don't understand.
Speaker 1: So there's the frustration of the president as a result
Speaker 1: to that. What's the frustration like for someone like General
Speaker 1: hr McMaster. We watched as he came out of the
Speaker 1: White House a couple of weeks ago to say that
Speaker 1: something did not happen in the White House, which a
Speaker 1: few hours later the President confirmed did happen in the
Speaker 1: White House. How frustrating must it be for someone like
Speaker 1: that to work within within the administration? Operating in that way.
Speaker 1: I think Trump destroys the souls of those around him.
Speaker 1: I think Sean Spicer's soul has evaporated entirely. I think
Speaker 1: Killian Conway lost her soul. And I think McMaster has
Speaker 1: given up a little bit of his soul. Shakespearean watching McMaster.
Speaker 1: This is not just any general. It's not just any
Speaker 1: smart general. McMaster literally wrote the book on the Vietnam War,
Speaker 1: Dereliction of Duty, one of the ten best books on
Speaker 1: the Vietnam War, and its conclusion is Officers senior officers
Speaker 1: need to speak truth to the president, and instead McMaster
Speaker 1: has gone up there, I think, to retain his credibility
Speaker 1: with the president, and instead of protecting the country, which
Speaker 1: is the job of the National Scarity advisor, he's protecting
Speaker 1: the president. Why has he done this? Why has he
Speaker 1: given up a little bit of his soul? And he's
Speaker 1: a very soulful man. When you speak to him, his
Speaker 1: voice thickens with emotion. When he gets angry, he rolls
Speaker 1: his shoulders to loosen his back muscles. Uh. Why has
Speaker 1: he done this? I think because he thinks he's the
Speaker 1: only person standing between having a disastrous national security advisor again,
Speaker 1: like Flynn. What's the lesson to be learned here from
Speaker 1: your book about how these two men at Church in
Speaker 1: law Well approached that leadership. You look at Churchill his upbringing,
Speaker 1: talk about relationship he had a lack of relationship he
Speaker 1: had with with his father, What he learned and where
Speaker 1: he went from there? What can we in America in
Speaker 1: two thousand seventeen draw from from what molded them, what
Speaker 1: made them into the leaders they were? Oddly enough? This
Speaker 1: book about Church when Worlwell concludes with looking at Martin
Speaker 1: Luther King and his Letter from Birmingham Jail, because it's
Speaker 1: very much in the tradition of Orwell's writing and Churchill's approach,
Speaker 1: which is number one, have principles. Number two, don't develop
Speaker 1: opinions until you understand the facts and really work hard
Speaker 1: to get to those facts, as Churchill did delving down
Speaker 1: into the military details of World War Two, and then
Speaker 1: when you have the facts, apply your principles. And I
Speaker 1: think that's a good course to watch for. And I
Speaker 1: think in the current era what I'm particularly watching is
Speaker 1: people who like Churchill and Orwell, are willing to criticize
Speaker 1: their own side. Churchill breaks with his own Conservative party
Speaker 1: saying no, Nazi Germany is rearming, you cannot appease them.
Speaker 1: Orwell breaks with the Stalinists left and says, no, you
Speaker 1: can't suppress the truth because it disagrees with the party line.
Speaker 1: So what I'm looking for is people who have a
Speaker 1: willingness to break with their own side, to have principles
Speaker 1: and apply them. And fortunately, in this country we have
Speaker 1: a set of written, written principles for how to go
Speaker 1: for to operate. It's called the American Constitution, which I
Speaker 1: think is a great operating document and a great strategic document.
Speaker 1: Look for people who support the constitution and rule of law.
Speaker 1: Listen to them. I find myself especially now interested in
Speaker 1: what anti Trump conservatives are saying. I'm thinking of people
Speaker 1: like William Cristo, Elliott Cohen, Um, Charles Crockhammer, George will
Speaker 1: These are the people who I think half principles, have
Speaker 1: a loyalty to traditional conservatism. And I don't think Trump
Speaker 1: is a conservative, He's a revolutionary reactionary. Those are the
Speaker 1: people I'm paying attention to right now. I'm great to
Speaker 1: see you. Thank you very much again for coming in.
Speaker 1: He's the author of Churchill and or Well to Fight
Speaker 1: for Freedom. Tum ricks a joining us here in Bloomberg
Speaker 1: eleven three oh Studios. This is an important interview and
Speaker 1: not nearly enough time, and we will speak to him often.
Speaker 1: I'm sure. Mob Brooks is from the fifth District in Alabama,
Speaker 1: right across the north top of Alabama. He is running
Speaker 1: for Senate Cox. Good morning, Good morning. What have you
Speaker 1: learned about the Republican Party in the last two weeks.
Speaker 1: You're in the middle of a dining book of a
Speaker 1: campaign in Alabama for Jeff Sessions. See there's been this district,
Speaker 1: that district council Republican Party doing right now. Well, I
Speaker 1: think that the national media, quite frankly is hammering Republicans
Speaker 1: on a regular basis, and they're doing it in kind
Speaker 1: of an alice in Wonderland, um arena. They aren't paying
Speaker 1: attention to the major challenges that America faces. Instead, they
Speaker 1: focus on small things which are big to individual citizens
Speaker 1: around the United States. But by small, it's small in
Speaker 1: comparison to the debilitating insolvents in bankruptcy and the damage
Speaker 1: that we will be done if we don't do something
Speaker 1: to get our out of control spending under control. Uh
Speaker 1: And so I wish the mainstream news media would talk
Speaker 1: more about Venezuela, where sev of their population has had
Speaker 1: an average weight loss of nine teen pounds. I mean,
Speaker 1: that's huge because they can't get enough calories and enough
Speaker 1: food to sustain their body weight. That's what happens when
Speaker 1: a central government goes to an insolvency in bankruptcy, and
Speaker 1: that is quite clearly where the United States of America's headed.
Speaker 1: If we don't do something about are our spending our
Speaker 1: deficits this year, well this past year, about seven billion
Speaker 1: dollars and it looks like it's gonna be worse going
Speaker 1: forward over the next decade. Corfferson Brooks, I wonder if
Speaker 1: you could just tell us what the path forward here is.
Speaker 1: After the election, there was a lot of enthusiasmic expectation
Speaker 1: that a lot more would get done on Capitol Hill.
Speaker 1: We've seen the latest CBO score, We've got the White
Speaker 1: House budget, We've seen reaction from both parties. Uh, it's
Speaker 1: muted or dismissive of that president's budget. Where do we
Speaker 1: go from here? What do you say to constituency wonder
Speaker 1: where the action is going to be? Well, which issue
Speaker 1: do you want to talk about? Let's talk about Let's
Speaker 1: talk about the budget first. Let's talk about the budget. Well,
Speaker 1: the budget I think that has been put forth by
Speaker 1: Mick mulvaney as the um UM Director of Office and
Speaker 1: Management and budget is extraordinarily responsible in the overall sense
Speaker 1: that it is trying to prevent America from going into
Speaker 1: a debilitating and solvency and bankruptcy. Now, you can have
Speaker 1: disagreements over where the spending cuts ought to be, keeping
Speaker 1: in mind that overall it's still spending more money uh
Speaker 1: than last year, and and to me that's somewhat troubling,
Speaker 1: but I cannot over emphasize the danger associating with us
Speaker 1: continue to rack up these hundreds and hundreds of billions
Speaker 1: of dollars and deficits having to borrow the money because
Speaker 1: we don't have it, we can't afford to pay it back.
Speaker 1: And long term, if you have even the smallest amount
Speaker 1: of economic sense, you understand that it's a very dangerous
Speaker 1: thing that we're doing and it's going to be devastating
Speaker 1: to the country until large degree undermine what it took
Speaker 1: our ancestors more than two d years to build. Cogs
Speaker 1: are not enough time today. We look forward to speaking
Speaker 1: to you at a greater length in Washington. Here David
Speaker 1: gern Times. Thank you to Moe Brooks of the fifth
Speaker 1: district right at the top of Alabama. I mean interesting,
Speaker 1: it's not a Gerrymander district in that sense. It's just
Speaker 1: it's almost like a sane shape. It's almost David like,
Speaker 1: almost directane. They have the House podcast. Join us yere
Speaker 1: on our phone lives. Thanks for listening to the Bloomberg
Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
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Speaker 1: Tom Keene. David Gura is at David Gura. Before the podcast,
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