1 00:00:03,040 --> 00:00:07,360 Speaker 1: Broadcasting live to New York, Gloomberg eleventh, Ryo to Washington, 2 00:00:07,440 --> 00:00:12,480 Speaker 1: d C, Bloomberg to Boston, Bloomberg twelve unders to San Francisco, 3 00:00:12,560 --> 00:00:16,320 Speaker 1: Bloomberg nine to the country. Serious at JAM General one 4 00:00:16,440 --> 00:00:19,920 Speaker 1: ninety and around the globe the Bloomberg Radio Plus Athen 5 00:00:20,000 --> 00:00:24,920 Speaker 1: Bloomberg dot com. This is Bloomberg Surveillance. Thank good morning. 6 00:00:24,920 --> 00:00:27,600 Speaker 1: I'm Karen Moscow along with Tom Keene and Michael McKee 7 00:00:27,600 --> 00:00:29,880 Speaker 1: and the opening deal brought to you by se I 8 00:00:29,880 --> 00:00:33,280 Speaker 1: Imagine when cognitive computing shapes the experience you create for 9 00:00:33,360 --> 00:00:37,159 Speaker 1: your investors. See how SEIS Global Operating Platform can be 10 00:00:37,200 --> 00:00:40,279 Speaker 1: your catalyst for business intelligence at se i C dot 11 00:00:40,360 --> 00:00:43,680 Speaker 1: com slash imagine. Stocks lower at the open. The S 12 00:00:43,720 --> 00:00:46,000 Speaker 1: and P five hunded down a quarter percent or about 13 00:00:46,080 --> 00:00:49,520 Speaker 1: five points, to nineteen seventy three down, Jones Industrial Average 14 00:00:49,520 --> 00:00:52,640 Speaker 1: down three tenths per cent or fifty points, to sixteen thousand, 15 00:00:52,680 --> 00:00:55,040 Speaker 1: eight hundred fourteen, and the Nasdaq is down two tenths 16 00:00:55,080 --> 00:00:57,400 Speaker 1: per cent or eight points to forty six eighty one. 17 00:00:57,800 --> 00:01:00,520 Speaker 1: The tenure Treasury down eleven thirty seconds. The yield one 18 00:01:00,520 --> 00:01:02,920 Speaker 1: point eight six percent yield on the two year point 19 00:01:02,920 --> 00:01:05,759 Speaker 1: eight five percent not imax screwed oil down one point 20 00:01:05,760 --> 00:01:09,640 Speaker 1: seven percent, or fifty eight cents to one of barrel comas, 21 00:01:09,680 --> 00:01:12,360 Speaker 1: gold up six tenths percent or seven dollars twenty cents 22 00:01:12,360 --> 00:01:14,800 Speaker 1: to twelve thirty eight an ounce. The euro a dollar 23 00:01:14,840 --> 00:01:17,120 Speaker 1: oh eight four one, the en one four teen point 24 00:01:17,200 --> 00:01:22,360 Speaker 1: one one. Tom and Mike Carabosco, thank you very much. 25 00:01:22,680 --> 00:01:26,040 Speaker 1: Joining us now is an old friend, Kevin Hassett, who 26 00:01:26,280 --> 00:01:29,920 Speaker 1: is Chair in American Politics and Culture at the American 27 00:01:30,040 --> 00:01:33,840 Speaker 1: Enterprise Institute, Director of Economic Policy Studies there. And this 28 00:01:33,840 --> 00:01:36,000 Speaker 1: is a man who has long and deep ties to 29 00:01:36,000 --> 00:01:40,240 Speaker 1: both economics and Republicans. He worked at the Federal Reserve, 30 00:01:40,480 --> 00:01:43,920 Speaker 1: He was a professor of economics and finance at Columbia University, 31 00:01:44,120 --> 00:01:47,360 Speaker 1: worked in the George H. W. Bush and Bill Clinton administrations, 32 00:01:47,600 --> 00:01:53,400 Speaker 1: and also has advice presidential candidates, including Senator John McCain. Kevin, 33 00:01:54,720 --> 00:01:58,720 Speaker 1: let me be broad here, given that we aren't quite 34 00:01:58,760 --> 00:02:01,120 Speaker 1: sure who's going to end up as the Republican nominee. 35 00:02:01,160 --> 00:02:04,600 Speaker 1: But since there is such a diversion, a divergence of 36 00:02:04,680 --> 00:02:09,280 Speaker 1: opinions about policy, what should the Republican economic policy be 37 00:02:09,880 --> 00:02:12,320 Speaker 1: if you were advising a candidate this time around, what 38 00:02:12,440 --> 00:02:16,799 Speaker 1: would you say the economic policy should be for the party. 39 00:02:17,760 --> 00:02:20,720 Speaker 1: You know, I'm just an economist and and and Hi, guys, 40 00:02:20,720 --> 00:02:22,880 Speaker 1: it's great to be back. I'm just an economist, and 41 00:02:23,000 --> 00:02:25,440 Speaker 1: so I can think about what he's going to help 42 00:02:25,520 --> 00:02:28,079 Speaker 1: the economy. Uh. And it's certainly not going to be 43 00:02:28,760 --> 00:02:34,919 Speaker 1: reduced uh legal immigration and restrictions on trade, the kind 44 00:02:34,919 --> 00:02:39,000 Speaker 1: of things that Mr Trump is proposing. But you know, 45 00:02:39,120 --> 00:02:42,120 Speaker 1: we have this typically examte that that you know, economist 46 00:02:42,160 --> 00:02:44,799 Speaker 1: may or may not know what disappealing to voters right now. 47 00:02:44,840 --> 00:02:49,119 Speaker 1: I think that what Trump has done is he's noticed, 48 00:02:49,520 --> 00:02:54,480 Speaker 1: I think accurately that we've had this sort of weird 49 00:02:55,240 --> 00:02:58,760 Speaker 1: constellation of negative effects of trade in over the last 50 00:02:58,760 --> 00:03:02,440 Speaker 1: decade in the U S. Where competition from developing countries 51 00:03:02,800 --> 00:03:05,400 Speaker 1: has led a lot of people who lose their jobs 52 00:03:05,440 --> 00:03:09,880 Speaker 1: and sort of the traditional blue collar areas like manufacturing. UH. 53 00:03:09,960 --> 00:03:12,880 Speaker 1: Normally in a well functioning economy, those people move into 54 00:03:12,919 --> 00:03:15,840 Speaker 1: the service sector. UH. And then in the service sector 55 00:03:16,400 --> 00:03:18,880 Speaker 1: they you know, they could even get the high salaries 56 00:03:18,960 --> 00:03:23,000 Speaker 1: if you knows are making money else you okay, But 57 00:03:23,000 --> 00:03:25,160 Speaker 1: but in the service sector there's been an enormous amount 58 00:03:25,200 --> 00:03:28,320 Speaker 1: of competition from illegal immigrants which is driven down the 59 00:03:28,360 --> 00:03:31,160 Speaker 1: wage there and so and so its subsetce. Uh. You know, 60 00:03:31,240 --> 00:03:34,400 Speaker 1: my friend Ed Connor talks a lot about this also 61 00:03:34,480 --> 00:03:38,080 Speaker 1: scholared Ai in subsetce. Then there's a double whammy for 62 00:03:38,200 --> 00:03:40,280 Speaker 1: people that they feel like they lost their job because 63 00:03:40,280 --> 00:03:41,920 Speaker 1: of trade and then when they were into the service 64 00:03:41,960 --> 00:03:44,720 Speaker 1: sector they're competing with illegal immigrants there and they get 65 00:03:44,840 --> 00:03:48,840 Speaker 1: very upset about it, naturally as anyone would, just you know, 66 00:03:48,920 --> 00:03:52,640 Speaker 1: their life is uh, you know, a separate from you know, 67 00:03:52,640 --> 00:03:56,280 Speaker 1: a prosperous society and and and Trump has totally tapped 68 00:03:56,280 --> 00:03:58,440 Speaker 1: into that, and I think an effective way. And so 69 00:03:58,560 --> 00:04:01,360 Speaker 1: so the question then becomes a channel for economists, So 70 00:04:01,440 --> 00:04:04,560 Speaker 1: how how do we how do we help those books? Well, 71 00:04:04,600 --> 00:04:07,120 Speaker 1: I think within this Kevin and and the reason liberals 72 00:04:07,160 --> 00:04:10,080 Speaker 1: listen to you is is you've got an inherently optimistic 73 00:04:10,120 --> 00:04:13,720 Speaker 1: streak about the American economy. Let's come up on the 74 00:04:13,800 --> 00:04:17,200 Speaker 1: show a couple of times. And one thing I would mention, 75 00:04:17,640 --> 00:04:21,320 Speaker 1: really going back to Vine Weinek and his viner rather 76 00:04:21,680 --> 00:04:26,039 Speaker 1: in his ninety paper, is it's a mercantile America and 77 00:04:26,080 --> 00:04:30,320 Speaker 1: we're back to a zero sum psychology of the global economy. 78 00:04:30,520 --> 00:04:37,159 Speaker 1: Can the Republican Party adapt to a mercantilest economic philosophy. Well, 79 00:04:37,240 --> 00:04:39,679 Speaker 1: they shouldn't because it's wrong. I mean, I mean Adam 80 00:04:39,760 --> 00:04:44,479 Speaker 1: Smith defeated them. Yeah, but they're guys when he's seven. Yeah, 81 00:04:44,480 --> 00:04:48,720 Speaker 1: but but Kevin, their guy, won seven states yesterday. I 82 00:04:48,760 --> 00:04:52,159 Speaker 1: believe there's some sense of a zero sum world to 83 00:04:52,279 --> 00:04:55,359 Speaker 1: the supporters of Mr Trump. Does your party need to 84 00:04:55,480 --> 00:04:59,760 Speaker 1: adapt to a zero sum world? I think that what 85 00:05:00,040 --> 00:05:02,719 Speaker 1: have to do is you have to get both parties. 86 00:05:03,080 --> 00:05:05,680 Speaker 1: I'm sure Mrs Clinton is worried about this too. That 87 00:05:05,760 --> 00:05:08,080 Speaker 1: you have to come up with solutions that can really 88 00:05:08,120 --> 00:05:10,400 Speaker 1: help people with this problem. And I think that that 89 00:05:10,480 --> 00:05:14,279 Speaker 1: those solutions would include things like this that that historically 90 00:05:14,880 --> 00:05:17,400 Speaker 1: uh in the US. UH. Then you if you take 91 00:05:17,440 --> 00:05:21,279 Speaker 1: a typical manufacturing firm in the Midwest, that there would 92 00:05:21,279 --> 00:05:24,120 Speaker 1: be people from all walks of life there. There. There 93 00:05:24,120 --> 00:05:26,360 Speaker 1: would be folks who grew up in the town and 94 00:05:26,440 --> 00:05:29,400 Speaker 1: who are you have great skills and operating machines. There 95 00:05:29,400 --> 00:05:31,680 Speaker 1: would be you know, some person who was a Harvard 96 00:05:31,760 --> 00:05:34,760 Speaker 1: NBA who knows how to run a business. And all 97 00:05:34,760 --> 00:05:37,920 Speaker 1: these people would work together towards the prosperous enterprise that 98 00:05:37,960 --> 00:05:41,840 Speaker 1: would then share the wealth of the enterprise. With all 99 00:05:41,880 --> 00:05:44,200 Speaker 1: of the workers today, it feels like you're taking the 100 00:05:44,320 --> 00:05:47,920 Speaker 1: smartest folks. You're lining them up one after the other 101 00:05:48,040 --> 00:05:51,040 Speaker 1: at Google and Facebook and you know, out working out 102 00:05:51,120 --> 00:05:53,679 Speaker 1: software where the only people around them or other people 103 00:05:53,800 --> 00:05:57,560 Speaker 1: with Zeno top degrees from top universities, and the folks 104 00:05:57,560 --> 00:06:00,000 Speaker 1: who used to be you know, in the same build 105 00:06:00,480 --> 00:06:02,440 Speaker 1: who these guys are are you know, out of work 106 00:06:02,440 --> 00:06:06,160 Speaker 1: because there's no more manufactory job and there they then 107 00:06:06,279 --> 00:06:09,320 Speaker 1: find with their low, lower skill level that they're competing 108 00:06:09,360 --> 00:06:11,600 Speaker 1: with lots and lots of illagal liberates. So I think 109 00:06:11,680 --> 00:06:14,200 Speaker 1: that that, you know, securing the border for sure as 110 00:06:14,279 --> 00:06:16,200 Speaker 1: part of it. But another thing is is to having 111 00:06:16,440 --> 00:06:19,240 Speaker 1: having a big increase in immigration to the kind of 112 00:06:19,240 --> 00:06:22,240 Speaker 1: people that could go back to helping the manufacturing firms succeed. 113 00:06:22,360 --> 00:06:27,719 Speaker 1: You know, we need a lot more engineer multi players. Kevin, 114 00:06:27,920 --> 00:06:30,719 Speaker 1: you sound like it's two thousand five. Might jump in here, 115 00:06:31,160 --> 00:06:33,839 Speaker 1: but I was that's the rhetoric I witnessed on TV 116 00:06:34,080 --> 00:06:39,600 Speaker 1: last night has nothing to do with Mr Hassett's philosophy. Well, 117 00:06:39,640 --> 00:06:43,560 Speaker 1: that's why I'm asking Kevin, if if you could design 118 00:06:43,560 --> 00:06:47,080 Speaker 1: a candidate and an economic plan, Now what would you 119 00:06:47,120 --> 00:06:51,800 Speaker 1: include in it? Uh, everything that has been done since 120 00:06:52,040 --> 00:06:56,800 Speaker 1: the Great Recession hasn't brought satisfaction to the people. Show 121 00:06:56,839 --> 00:06:59,000 Speaker 1: we put it that way. I mean, certainly maybe kept 122 00:06:59,040 --> 00:07:02,400 Speaker 1: us out of a depression. People are unhappy. So what 123 00:07:02,560 --> 00:07:07,359 Speaker 1: policies could you sell as effective? Well, I guess again 124 00:07:07,440 --> 00:07:09,840 Speaker 1: the selling is something that I'm not an expert at. 125 00:07:09,920 --> 00:07:12,760 Speaker 1: But but for sure, Uh. You know, if we want 126 00:07:12,800 --> 00:07:15,040 Speaker 1: people's wages to be higher in the US, then there 127 00:07:15,080 --> 00:07:17,520 Speaker 1: are two sustainable ways to do it. One of them 128 00:07:17,600 --> 00:07:21,040 Speaker 1: is to train them so that they have higher productivity. Uh. 129 00:07:21,040 --> 00:07:23,120 Speaker 1: And and you know, investing in better schools and so 130 00:07:23,200 --> 00:07:24,760 Speaker 1: on is a good call. And the second thing is 131 00:07:24,800 --> 00:07:26,400 Speaker 1: to give them more capital to work with. If you 132 00:07:26,400 --> 00:07:28,520 Speaker 1: have better machines to work with your marginal products, or 133 00:07:28,520 --> 00:07:30,480 Speaker 1: you have a higher wage. And right now, with the 134 00:07:30,520 --> 00:07:33,200 Speaker 1: highest corporate tax on earth, we're chasing all the capital offshore. 135 00:07:33,400 --> 00:07:35,520 Speaker 1: That might not be a great populous thing. I hear you, 136 00:07:35,600 --> 00:07:37,480 Speaker 1: Tom that you know if I'm up there saying, hey, 137 00:07:37,480 --> 00:07:40,000 Speaker 1: you know what, we're chasing all the capital away? Uh. 138 00:07:40,160 --> 00:07:41,840 Speaker 1: You know Trump did mention this, by the way, that 139 00:07:41,880 --> 00:07:43,800 Speaker 1: we need to take the trilliums back to the US, 140 00:07:43,880 --> 00:07:45,920 Speaker 1: And I would make the deal that would make that happen. 141 00:07:45,960 --> 00:07:49,120 Speaker 1: But the bottom line is that we need to give people, 142 00:07:49,560 --> 00:07:51,840 Speaker 1: you know, higher products, or create higher productivity if you 143 00:07:51,840 --> 00:07:54,120 Speaker 1: want higher wages sustainably. And the only way really to 144 00:07:54,200 --> 00:07:56,000 Speaker 1: do that in the short term for the typical thirty 145 00:07:56,000 --> 00:07:57,560 Speaker 1: five year old is to give a lot more capital 146 00:07:57,560 --> 00:07:59,840 Speaker 1: to work with. We need to become a tax haven. 147 00:08:00,040 --> 00:08:03,320 Speaker 1: The highest tres police letters. Who's your candidate? Who is 148 00:08:03,360 --> 00:08:07,120 Speaker 1: your I'm fascinated, but other than Jack Camp, late wonderful 149 00:08:07,200 --> 00:08:10,440 Speaker 1: Jack Camp, who's your candidate? Yeah, I don't. I don't 150 00:08:10,480 --> 00:08:12,520 Speaker 1: have a candidate this time. In fact, I've kind of 151 00:08:12,560 --> 00:08:17,120 Speaker 1: just stayed out of the presidential political game this time 152 00:08:17,240 --> 00:08:20,960 Speaker 1: by choice. But but not because I don't like any 153 00:08:21,000 --> 00:08:23,160 Speaker 1: of the guys, but just because I've spent five of 154 00:08:23,200 --> 00:08:25,400 Speaker 1: them and that it is time for me to continue 155 00:08:25,400 --> 00:08:28,240 Speaker 1: to work more on economic research, and so that that's 156 00:08:28,240 --> 00:08:30,240 Speaker 1: what I've been doing. Uh, you know, I think that 157 00:08:30,800 --> 00:08:33,800 Speaker 1: in the end, though, I think that there's a circle 158 00:08:33,800 --> 00:08:36,480 Speaker 1: of life in politics that everybody goes through. I can 159 00:08:36,520 --> 00:08:39,320 Speaker 1: remember a lot of my Republican friends when President Obama won, 160 00:08:39,720 --> 00:08:41,760 Speaker 1: They're thinking, I'm going to move to Canada, Right, That's 161 00:08:41,760 --> 00:08:43,600 Speaker 1: the first thing. Everybody says that. How many times have 162 00:08:43,600 --> 00:08:45,000 Speaker 1: you guys heard someone at the party say, you know, 163 00:08:45,040 --> 00:08:47,000 Speaker 1: if he wins, I'm gonna move to Canada. But then 164 00:08:47,040 --> 00:08:49,439 Speaker 1: what happens is people don't move to Canada. And then 165 00:08:49,520 --> 00:08:52,319 Speaker 1: a year or two in the person who wins proposes 166 00:08:52,360 --> 00:08:53,920 Speaker 1: something that you think is a good idea, and then 167 00:08:53,920 --> 00:08:56,000 Speaker 1: you help them accomplish that, and then you kind of 168 00:08:56,040 --> 00:08:58,440 Speaker 1: move on. Right, So the fullest of time, what you 169 00:08:58,440 --> 00:09:01,800 Speaker 1: care about it? What do they say? I got Kevin 170 00:09:01,880 --> 00:09:05,960 Speaker 1: five seconds? Hillary Clinton is elected. Where are you moving to? Yeah, 171 00:09:05,960 --> 00:09:09,000 Speaker 1: I'm staying right here in Washington, d C. Okay, Kevin 172 00:09:09,040 --> 00:09:13,200 Speaker 1: has to thank you so much with the American Enterprise Institute. Uh, 173 00:09:13,240 --> 00:09:19,439 Speaker 1: this is Bloomberg's surveillance. Let's check in with Michael barn 174 00:09:19,440 --> 00:09:22,040 Speaker 1: Now I'll get the latest world of national headlines. Michael, Mike, Tom, 175 00:09:22,040 --> 00:09:25,079 Speaker 1: thank you very much. Donald Trump says his presidential candidacy 176 00:09:25,200 --> 00:09:28,720 Speaker 1: is a movement. Trump won in seven states during Super Tuesday. 177 00:09:28,880 --> 00:09:31,200 Speaker 1: Ted Cruz one in three states, including his home state 178 00:09:31,200 --> 00:09:34,560 Speaker 1: of Texas, while Marco Rubio chalked up his first victory 179 00:09:34,559 --> 00:09:38,240 Speaker 1: of the campaign in Minnesota. Hillary Clinton also won seven 180 00:09:38,320 --> 00:09:41,680 Speaker 1: states from mount Senator Bernie Sanders won four states, including 181 00:09:41,720 --> 00:09:45,080 Speaker 1: his home state. Trump's overall delegate account is at two 182 00:09:45,160 --> 00:09:48,200 Speaker 1: hundred eighty five, Ted Cruz has a hundred forty nine, 183 00:09:48,559 --> 00:09:51,560 Speaker 1: and Marco Rubio has eighty two. It takes one thousand, 184 00:09:51,600 --> 00:09:54,360 Speaker 1: two hundred thirty seven delegates to win the Republican nomination. 185 00:09:54,720 --> 00:09:58,400 Speaker 1: Clinton has at least one thousand one delegates overall. Bernie 186 00:09:58,400 --> 00:10:01,520 Speaker 1: Sanders has three hundred seventy three eight. It takes two thousand, 187 00:10:01,600 --> 00:10:05,440 Speaker 1: three hundred eighty three Democratic delegates to win the party's nomination. 188 00:10:05,920 --> 00:10:09,120 Speaker 1: A powerful earthquake where a preliminary magnitude of seven point 189 00:10:09,200 --> 00:10:12,040 Speaker 1: nine has hit in the Indian Ocean off Indonesia, about 190 00:10:12,080 --> 00:10:15,480 Speaker 1: four hundred miles off the coast of Sumatra. Robert Sanders 191 00:10:15,520 --> 00:10:18,560 Speaker 1: with the U S Geological Survey says they're not expecting 192 00:10:18,559 --> 00:10:21,880 Speaker 1: it to trigger aus Eunamic. This is a very powerful earthquake. However, 193 00:10:22,240 --> 00:10:24,680 Speaker 1: a man seven point nine in this particular area of 194 00:10:24,679 --> 00:10:27,160 Speaker 1: the world is not uncommon. This is an area stricken 195 00:10:27,160 --> 00:10:29,160 Speaker 1: by a lot of large seven s low eights, and 196 00:10:29,160 --> 00:10:31,319 Speaker 1: this is the same area where the magnitude nine point 197 00:10:31,360 --> 00:10:34,679 Speaker 1: to happened back in two thousand and four. Cruise in 198 00:10:34,720 --> 00:10:37,199 Speaker 1: the southwestern New York State town of Ripley are working 199 00:10:37,240 --> 00:10:39,199 Speaker 1: to contain a leak on an ethanol tanker that was 200 00:10:39,240 --> 00:10:42,240 Speaker 1: among sixteen cars on a freight train that derailed. Last night. 201 00:10:42,520 --> 00:10:45,040 Speaker 1: Global News twenty four hours a day, powered by our 202 00:10:45,040 --> 00:10:49,640 Speaker 1: its four hundred journalists. I'm Michael Barr, Tom, Michael Barr, 203 00:10:49,640 --> 00:10:53,600 Speaker 1: thanks so much, Coast to coast worldwide. From Bloomberg FM 204 00:10:53,640 --> 00:11:03,200 Speaker 1: in Washington's This is Bloomberg Surveillance. Bloomberg Surveillance is brought 205 00:11:03,200 --> 00:11:04,920 Speaker 1: to you by the New York Chamber of Commerce. Mining 206 00:11:04,960 --> 00:11:08,760 Speaker 1: agricultural opportunities abound in Nigeria. Learned about protective investments in 207 00:11:08,760 --> 00:11:12,319 Speaker 1: Africa's most active markets. Thursday, March third, Breakfast at eight 208 00:11:12,320 --> 00:11:14,959 Speaker 1: am at twenty West forty fourth Street. Breakfast is for