1 00:00:02,440 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,080 --> 00:00:09,440 Speaker 2: Thank you all for being here. It's a real pleasure. 3 00:00:10,200 --> 00:00:11,840 Speaker 3: If someone ha said to me, you're gonna interview the Treasury 4 00:00:11,840 --> 00:00:14,040 Speaker 3: Secretary and a church, but not have been on my 5 00:00:16,280 --> 00:00:20,760 Speaker 3: not have been on my bingo card. I also recognize 6 00:00:20,960 --> 00:00:23,960 Speaker 3: there's a major football game happening at this particular time. 7 00:00:26,000 --> 00:00:30,720 Speaker 3: Greatful we could be here as well. Secretary Yell needs 8 00:00:30,720 --> 00:00:33,760 Speaker 3: no introduction. I'll very quickly run through the pertinent biography. 9 00:00:34,760 --> 00:00:38,800 Speaker 3: She has the trifecta Treasury Secretary, former Federal Reserve Chair, 10 00:00:39,200 --> 00:00:43,360 Speaker 3: chief Economic advisor to President Clinton as well, and along 11 00:00:43,400 --> 00:00:46,519 Speaker 3: the way, president of the Federal Reserve Bank of San Francisco. 12 00:00:47,320 --> 00:00:49,800 Speaker 3: The accolades are many of the CV is long. We 13 00:00:49,800 --> 00:00:51,559 Speaker 3: can move past it quickly, and before we get to this, 14 00:00:51,680 --> 00:00:54,480 Speaker 3: there's a lot to talk about before we. 15 00:00:54,440 --> 00:00:55,760 Speaker 2: Get to that. Some light fare. 16 00:00:56,520 --> 00:00:59,680 Speaker 3: And I use the pun intentionally when I said to 17 00:00:59,760 --> 00:01:02,240 Speaker 3: friends I was interviewing you. Everyone is interested in where 18 00:01:02,280 --> 00:01:04,720 Speaker 3: you go to eat on these trips, and I noted 19 00:01:04,760 --> 00:01:10,080 Speaker 3: here in Austin, one in a million wa a Burger. 20 00:01:12,520 --> 00:01:13,680 Speaker 2: And I have to ask. 21 00:01:13,520 --> 00:01:15,440 Speaker 3: About that because there was such a frenzy when you 22 00:01:15,440 --> 00:01:18,640 Speaker 3: went to California, and stopped it in an out burger, 23 00:01:19,120 --> 00:01:20,240 Speaker 3: And let's create a little contrary. 24 00:01:20,319 --> 00:01:26,080 Speaker 2: Let's have a hard conversation. How was the burger? 25 00:01:26,400 --> 00:01:33,080 Speaker 4: They're both terrific in different ways, and loved that it 26 00:01:33,200 --> 00:01:33,800 Speaker 4: was excellent. 27 00:01:33,920 --> 00:01:36,240 Speaker 2: I promise my editor would make some headlines here today. 28 00:01:37,040 --> 00:01:39,800 Speaker 4: We're going to try to barbecue before we leave excellent. 29 00:01:41,040 --> 00:01:42,440 Speaker 1: I'm not gonna let that go by. 30 00:01:44,360 --> 00:01:46,480 Speaker 3: Let's start a bit by talking about the economy. I 31 00:01:46,480 --> 00:01:48,320 Speaker 3: had the pleasure of tagging along with you yesterday. You 32 00:01:48,400 --> 00:01:53,160 Speaker 3: visited an IRS processing facility here in Austin. We saw 33 00:01:53,160 --> 00:01:54,880 Speaker 3: a lot of sorting machines. You asked about your tax 34 00:01:54,920 --> 00:01:59,120 Speaker 3: returns from nineteen seventy one, if they still have them. 35 00:01:59,560 --> 00:02:01,320 Speaker 3: And after I had a chance to ask you about 36 00:02:01,360 --> 00:02:04,840 Speaker 3: the latest jobs data and about the economy one hundred 37 00:02:04,840 --> 00:02:08,200 Speaker 3: and forty two thousand jobs at it last month downward 38 00:02:08,240 --> 00:02:10,600 Speaker 3: revision of the jobs numbers that we've seen prior to that, 39 00:02:11,160 --> 00:02:14,040 Speaker 3: unemployment rate catching down slightly to four point two percent. 40 00:02:15,120 --> 00:02:19,120 Speaker 2: You told me afterward, the labor market looks healthy to you. 41 00:02:19,200 --> 00:02:21,840 Speaker 3: There will be a lot of people who wonder about that, 42 00:02:22,960 --> 00:02:25,720 Speaker 3: wonder about how the economy is doing, the jobs market 43 00:02:25,840 --> 00:02:28,960 Speaker 3: is doing, in particular, given this prolonged fight the FED 44 00:02:29,000 --> 00:02:31,519 Speaker 3: has been having against high inflation and worry about the consequences. 45 00:02:32,280 --> 00:02:34,640 Speaker 3: Explain why you feel like it is healthy yet. 46 00:02:35,440 --> 00:02:37,760 Speaker 4: So, what I see when I look at it the 47 00:02:37,840 --> 00:02:45,520 Speaker 4: economy broadly speaking, is very strong growth, deep into a recovery, 48 00:02:45,600 --> 00:02:49,799 Speaker 4: with the economy operating it basically at full employment. We're 49 00:02:49,880 --> 00:02:54,280 Speaker 4: still seeing three percent growth roughly over the last year, 50 00:02:54,280 --> 00:03:03,000 Speaker 4: and it continues. Consumers spending, investment, spending, solid, inflation coming 51 00:03:03,120 --> 00:03:08,400 Speaker 4: down substantially and I believe headed back to the feds 52 00:03:08,480 --> 00:03:12,120 Speaker 4: two percent goal. And what I describe is a strong, 53 00:03:12,280 --> 00:03:18,520 Speaker 4: solid labor market. Clearly, the pace of job creation has 54 00:03:18,600 --> 00:03:24,040 Speaker 4: gone down, and that's something we should expect. The unemployment 55 00:03:24,160 --> 00:03:28,560 Speaker 4: rate has moved up somewhat off it's very low level 56 00:03:28,600 --> 00:03:31,880 Speaker 4: of I think it got down to three point four percent, 57 00:03:32,680 --> 00:03:36,240 Speaker 4: but it's not common in the United States to have 58 00:03:36,320 --> 00:03:38,000 Speaker 4: unemployment rates in the foes. 59 00:03:38,680 --> 00:03:40,120 Speaker 1: And it's what. 60 00:03:40,040 --> 00:03:46,720 Speaker 4: I think of is a full employment economy. We're seeing 61 00:03:47,680 --> 00:03:53,400 Speaker 4: continued decent pace of hiring, fewer job openings, a lot fewer. 62 00:03:53,400 --> 00:03:57,160 Speaker 4: But there was an enormous amount of disruption in the 63 00:03:57,240 --> 00:03:58,320 Speaker 4: labor market we. 64 00:03:58,240 --> 00:03:59,640 Speaker 1: Saw during the pandemic. 65 00:04:01,160 --> 00:04:04,440 Speaker 4: So the labor market is less hot than it was 66 00:04:04,720 --> 00:04:08,520 Speaker 4: in the hiring frenzy that took place as the economy 67 00:04:09,000 --> 00:04:10,880 Speaker 4: opened up after the pandemic. 68 00:04:11,640 --> 00:04:15,119 Speaker 1: But one hundred and forty thousand jobs. 69 00:04:15,920 --> 00:04:20,440 Speaker 4: This is what you expect in an economy where you 70 00:04:20,480 --> 00:04:25,000 Speaker 4: don't have a lot of unemployment and jobs need to 71 00:04:25,040 --> 00:04:29,320 Speaker 4: be created for new entrance to the labor force. So 72 00:04:29,600 --> 00:04:33,359 Speaker 4: nobody knows exactly what that magic number is. What do 73 00:04:33,400 --> 00:04:36,920 Speaker 4: you need to see in terms of monthly job creation 74 00:04:38,480 --> 00:04:42,400 Speaker 4: to hold the unemployment rate steady? But my guess is 75 00:04:42,440 --> 00:04:46,919 Speaker 4: we're seeing something in that region, and I think this 76 00:04:47,080 --> 00:04:52,320 Speaker 4: is what most people would call a soft landing. Now, 77 00:04:52,560 --> 00:04:55,960 Speaker 4: I will say when you see the pace of job 78 00:04:56,040 --> 00:05:00,320 Speaker 4: creation diminishing over time, what I'd love to say see 79 00:05:00,360 --> 00:05:05,000 Speaker 4: is that it stabilizes roughly where it is now, and 80 00:05:05,040 --> 00:05:08,680 Speaker 4: we have to be careful to make sure that it's 81 00:05:08,760 --> 00:05:12,360 Speaker 4: not going to weaken further. But when you think about 82 00:05:12,400 --> 00:05:17,360 Speaker 4: what will drive at the pace of consumer spending, that's 83 00:05:17,440 --> 00:05:20,000 Speaker 4: important and that remains quite solid. 84 00:05:20,240 --> 00:05:22,920 Speaker 1: We're not seeing layoffs. We're seeing. 85 00:05:24,080 --> 00:05:28,800 Speaker 4: Less frenzy in terms of hiring and job openings, but 86 00:05:29,000 --> 00:05:35,800 Speaker 4: we're not seeing meaningful layoffs. Unemployment insurance claims remain at 87 00:05:35,920 --> 00:05:41,440 Speaker 4: very low levels, so I'm attentive to downside risk now on. 88 00:05:41,480 --> 00:05:42,880 Speaker 1: The employment side. 89 00:05:43,360 --> 00:05:48,400 Speaker 4: But what I think we're seeing and hope we will 90 00:05:48,440 --> 00:05:51,840 Speaker 4: continue to see, is a good, solid economy. 91 00:05:52,040 --> 00:05:53,919 Speaker 3: You say, many people would call that a soft landing. 92 00:05:53,960 --> 00:05:56,599 Speaker 3: So that is the FED being able to get high 93 00:05:56,600 --> 00:06:00,280 Speaker 3: inflation under control without triggering a deep downturn or recession. Right, 94 00:06:01,240 --> 00:06:03,080 Speaker 3: many people would say that. Do you say that as well? 95 00:06:03,080 --> 00:06:05,000 Speaker 3: Do you think that it's Are you fairly confident that 96 00:06:05,000 --> 00:06:05,960 Speaker 3: we're going to get done? 97 00:06:07,000 --> 00:06:09,920 Speaker 4: I think what we're seeing now is consistent with that, 98 00:06:10,520 --> 00:06:15,280 Speaker 4: And you know, while there are risks, it really has 99 00:06:15,320 --> 00:06:19,160 Speaker 4: been amazing to be able to get inflation down as 100 00:06:19,279 --> 00:06:24,200 Speaker 4: meaningfully as we have. And I'd say also, wages are 101 00:06:24,240 --> 00:06:29,760 Speaker 4: going up at a decent clip, and real wages adjusted 102 00:06:29,839 --> 00:06:34,359 Speaker 4: for inflation are rising, and they've well, a lot of 103 00:06:34,560 --> 00:06:37,880 Speaker 4: especially low income households, are under stress. 104 00:06:38,480 --> 00:06:40,320 Speaker 1: Aspects of the cost. 105 00:06:40,080 --> 00:06:44,920 Speaker 4: Of living for them are genuinely challenging, and it's our 106 00:06:44,920 --> 00:06:49,839 Speaker 4: administration's top priority to try to address that. It's still 107 00:06:49,920 --> 00:06:55,039 Speaker 4: true that wages have gone up since before the pandemic 108 00:06:55,320 --> 00:07:00,479 Speaker 4: in real or inflation adjusted terms, and continue youing to 109 00:07:00,600 --> 00:07:01,880 Speaker 4: rise at a decent base. 110 00:07:02,720 --> 00:07:06,000 Speaker 3: Economic policy makers just gathered in Jackson, holl Wyoming. You 111 00:07:06,040 --> 00:07:08,240 Speaker 3: didn't go this year, You've gone in the past many times, 112 00:07:08,279 --> 00:07:10,760 Speaker 3: and I was thinking as I watched. 113 00:07:10,480 --> 00:07:11,400 Speaker 2: All of that unfold. 114 00:07:11,720 --> 00:07:16,200 Speaker 3: You know, a big takeaway from that is, wow, policymakers 115 00:07:16,240 --> 00:07:18,080 Speaker 3: have managed to pull this off, or so it seems. 116 00:07:19,040 --> 00:07:20,240 Speaker 2: There hasn't been a recession. 117 00:07:20,640 --> 00:07:23,440 Speaker 3: Inflation has come down dramatically, And I want to draw 118 00:07:23,440 --> 00:07:28,480 Speaker 3: on your experience as an academic economist and a policy makers. 119 00:07:28,520 --> 00:07:31,000 Speaker 3: What's the message from that to future policymakers about what's 120 00:07:31,000 --> 00:07:33,240 Speaker 3: worked here? How much of this was I won't call 121 00:07:33,280 --> 00:07:36,560 Speaker 3: it dumb luck, but fortunate that it happened. Are we 122 00:07:36,600 --> 00:07:38,800 Speaker 3: any closer to understanding why it worked out the way 123 00:07:38,800 --> 00:07:39,240 Speaker 3: that it has? 124 00:07:40,960 --> 00:07:46,840 Speaker 4: So, you know, shocks occur to the economy, and sometimes 125 00:07:46,880 --> 00:07:51,320 Speaker 4: they have very unique features. And so when you ask 126 00:07:52,160 --> 00:07:54,960 Speaker 4: do we under what do we understand and what are 127 00:07:55,000 --> 00:07:59,400 Speaker 4: the lessons? You know, each shock in each situation needs 128 00:07:59,440 --> 00:08:04,320 Speaker 4: to be under stood in its own terms. And aside 129 00:08:04,560 --> 00:08:10,640 Speaker 4: from typically wars where goods are in short demand and 130 00:08:10,720 --> 00:08:14,960 Speaker 4: you see bursts of inflation. Fortunately there have been few, 131 00:08:15,120 --> 00:08:18,520 Speaker 4: but there have been some episodes In the United States. 132 00:08:19,040 --> 00:08:21,360 Speaker 4: This was a very unique episode. 133 00:08:22,120 --> 00:08:22,760 Speaker 1: Some of the. 134 00:08:22,720 --> 00:08:27,080 Speaker 4: Inflation came from supply side shocks. 135 00:08:27,040 --> 00:08:28,720 Speaker 1: That were related to COVID. 136 00:08:30,240 --> 00:08:36,000 Speaker 4: We found the automakers had just a shortage of semiconductors 137 00:08:36,040 --> 00:08:40,760 Speaker 4: they couldn't get. They couldn't get the semiconductors they needed 138 00:08:41,200 --> 00:08:47,240 Speaker 4: to produce cars, so things like cars were an absolute shortage. 139 00:08:47,880 --> 00:08:52,199 Speaker 4: There was a huge change in the character of demand 140 00:08:52,920 --> 00:08:58,000 Speaker 4: in the US economy associated with the pandemic. People no 141 00:08:58,040 --> 00:09:04,480 Speaker 4: longer going out to eat in restaurants, cooking at home, 142 00:09:05,240 --> 00:09:12,079 Speaker 4: working from home, wanting to expand and improve their work 143 00:09:12,280 --> 00:09:18,440 Speaker 4: spaces their homes, pushing up house prices and rents, and 144 00:09:19,720 --> 00:09:25,120 Speaker 4: demand for goods going through the ceiling to the point 145 00:09:25,200 --> 00:09:31,200 Speaker 4: where we saw ships lined up in the major ports 146 00:09:31,280 --> 00:09:35,440 Speaker 4: in California and other parts of the country couldn't unload 147 00:09:36,280 --> 00:09:39,800 Speaker 4: their cargoes. So there were a lot of supply shocks, 148 00:09:39,880 --> 00:09:43,679 Speaker 4: and that led to some steep price increases. Then we 149 00:09:43,720 --> 00:09:50,040 Speaker 4: had Russia's attack on Ukraine that led to for a 150 00:09:50,080 --> 00:09:53,920 Speaker 4: while spiking energy and commodity prices. 151 00:09:54,559 --> 00:09:55,480 Speaker 1: And part of. 152 00:09:55,440 --> 00:10:00,000 Speaker 4: What we've seen is inflation come down as the economy 153 00:10:00,120 --> 00:10:03,320 Speaker 4: is adjusted to those shocks, and I think that's part 154 00:10:03,360 --> 00:10:09,439 Speaker 4: of why we haven't needed to have a recession. You know, 155 00:10:10,280 --> 00:10:14,400 Speaker 4: when the fed Titans and causes it causes the recession. 156 00:10:15,400 --> 00:10:20,080 Speaker 4: It's often because the labor market itself has become overheated 157 00:10:20,800 --> 00:10:24,440 Speaker 4: and they feel they need to loosen up the labor 158 00:10:24,520 --> 00:10:28,320 Speaker 4: market in order to get inflation down. And we did 159 00:10:28,400 --> 00:10:31,600 Speaker 4: see a very tight labor market for a while, but 160 00:10:31,840 --> 00:10:39,320 Speaker 4: it's gradually cooled in a way that should not necessitate 161 00:10:40,000 --> 00:10:44,600 Speaker 4: a recession. Wages are rising a little bit under four 162 00:10:44,679 --> 00:10:50,640 Speaker 4: percent at a pace that is consistent with two percent 163 00:10:50,760 --> 00:10:56,880 Speaker 4: inflation and significant productivity growth. So all of that looks 164 00:10:57,520 --> 00:11:02,040 Speaker 4: all of that looks good. So this has been a 165 00:11:02,160 --> 00:11:07,160 Speaker 4: unique thing, you know, I think when I think about lessons, 166 00:11:07,520 --> 00:11:14,160 Speaker 4: one of the lessons that my colleagues and I had 167 00:11:14,679 --> 00:11:18,840 Speaker 4: in responding to the pandemic is we know, when you 168 00:11:18,960 --> 00:11:22,520 Speaker 4: have a deep downturn in the economy, if you don't 169 00:11:22,640 --> 00:11:27,040 Speaker 4: do something to address unemployment, it can leave. 170 00:11:27,280 --> 00:11:30,479 Speaker 1: People out of the labor market. 171 00:11:30,280 --> 00:11:34,360 Speaker 4: Out of jobs, scarred in ways that will have a. 172 00:11:34,400 --> 00:11:36,960 Speaker 1: Permanent impact on their lives. 173 00:11:37,440 --> 00:11:42,640 Speaker 4: And getting people back to work is important in order 174 00:11:42,800 --> 00:11:45,040 Speaker 4: to avoid. 175 00:11:44,720 --> 00:11:46,120 Speaker 1: This kind of scarring. 176 00:11:47,040 --> 00:11:51,000 Speaker 4: And so we were very focused on trying to create jobs, 177 00:11:51,320 --> 00:11:54,679 Speaker 4: and I really don't think that was a mistake at all. 178 00:11:55,120 --> 00:12:02,000 Speaker 4: We've enjoyed about the fastest and larger recovery of any 179 00:12:02,040 --> 00:12:07,040 Speaker 4: advanced country that's experienced this shock. And well, we did 180 00:12:07,080 --> 00:12:11,960 Speaker 4: see a spurt and inflation, and you know, we're concerned 181 00:12:12,000 --> 00:12:17,400 Speaker 4: about the cost of living. It's a high priority every country. 182 00:12:17,440 --> 00:12:19,880 Speaker 4: So or a burst of inflation, it's something that was 183 00:12:20,679 --> 00:12:22,720 Speaker 4: probably unavoidable. 184 00:12:22,040 --> 00:12:22,840 Speaker 1: Given this shock. 185 00:12:23,200 --> 00:12:26,040 Speaker 3: As I listened to you talk about catalysts for high inflation, 186 00:12:27,040 --> 00:12:28,880 Speaker 3: you didn't mention companies. And I'm sure you've heard the 187 00:12:28,880 --> 00:12:32,400 Speaker 3: conversation that's happening now about whether companies have been contributing 188 00:12:32,440 --> 00:12:35,680 Speaker 3: to this. Are there mechanisms that could be put in 189 00:12:35,679 --> 00:12:38,440 Speaker 3: place to deal with price gouging? Let me ask you, 190 00:12:38,480 --> 00:12:40,200 Speaker 3: as an economist, do you think that that is a 191 00:12:40,240 --> 00:12:42,559 Speaker 3: reasonable response and is it a necessary response at this 192 00:12:42,600 --> 00:12:43,240 Speaker 3: point in time? 193 00:12:43,920 --> 00:12:47,960 Speaker 4: So to me, inflation is largely ongoing a matter of 194 00:12:48,160 --> 00:12:54,080 Speaker 4: supply and demand, but it is important to have competition 195 00:12:54,720 --> 00:13:01,880 Speaker 4: in the economy and benefits to consumers very substantial from 196 00:13:02,960 --> 00:13:09,079 Speaker 4: having an active anti trust policy. From our earliest days, 197 00:13:09,760 --> 00:13:15,640 Speaker 4: the Biden Harris administration has been focused on enforcing existing 198 00:13:15,679 --> 00:13:21,600 Speaker 4: anti trust policy to maintain competition in our economy, which 199 00:13:21,640 --> 00:13:23,480 Speaker 4: benefits consumers. 200 00:13:24,040 --> 00:13:27,600 Speaker 1: And so with respect to price gouging. 201 00:13:27,720 --> 00:13:31,319 Speaker 4: It can be a lack of competition, or sometimes after 202 00:13:31,440 --> 00:13:36,000 Speaker 4: a shock, you have a snow snowstorm and the price 203 00:13:36,040 --> 00:13:38,520 Speaker 4: of shuffles can go up or slaves. 204 00:13:38,600 --> 00:13:41,199 Speaker 3: As I know from having kids, sled sled prices tend 205 00:13:41,240 --> 00:13:44,080 Speaker 3: to rise. You know, when the forecast calls for a snow. 206 00:13:44,760 --> 00:13:49,840 Speaker 4: Forty states have laws against that. And that's that seems 207 00:13:49,840 --> 00:13:50,640 Speaker 4: relevant to me. 208 00:13:51,840 --> 00:13:54,160 Speaker 3: I'd like to talk about the work that you've done 209 00:13:54,160 --> 00:13:56,839 Speaker 3: internationally and domestically kind of equal parts. And you know, 210 00:13:56,880 --> 00:13:59,880 Speaker 3: I look at what you've done as Treasury Secretary. You 211 00:14:00,080 --> 00:14:03,120 Speaker 3: approached it kind of like a diplomat. Treasury secretary is 212 00:14:03,120 --> 00:14:05,720 Speaker 3: a diplomat, And I want to start by asking you 213 00:14:05,760 --> 00:14:09,600 Speaker 3: about your experience on US China relations. So I didn't 214 00:14:09,600 --> 00:14:11,079 Speaker 3: go on the trip with you there that you took 215 00:14:11,120 --> 00:14:12,959 Speaker 3: to China, but I followed the coverage of it. And 216 00:14:13,840 --> 00:14:16,360 Speaker 3: aside from the five thousand articles about the magic mushrooms 217 00:14:16,360 --> 00:14:17,920 Speaker 3: that may have been on the meal that you that 218 00:14:17,960 --> 00:14:22,520 Speaker 3: you ate there, she don't have to address here, and 219 00:14:22,520 --> 00:14:33,280 Speaker 3: you've a dressed that money. There was this other thread 220 00:14:33,320 --> 00:14:35,880 Speaker 3: that came out, and that is you were able to 221 00:14:35,920 --> 00:14:39,840 Speaker 3: carry a tough message to your counterparts and they seem 222 00:14:39,920 --> 00:14:43,800 Speaker 3: to if not like you, hear you out, spend time 223 00:14:43,800 --> 00:14:45,520 Speaker 3: with you. These meetings, as they often do when you 224 00:14:45,560 --> 00:14:49,520 Speaker 3: meet with counterparts in China, last almost days, they last hours. 225 00:14:49,560 --> 00:14:52,320 Speaker 3: And I was thinking of something that I saw Alan 226 00:14:52,360 --> 00:14:54,280 Speaker 3: Blind or your former colleague at the FED say about you, 227 00:14:54,320 --> 00:14:57,000 Speaker 3: and that is Janet Yellen makes an argument on the merits, 228 00:14:57,000 --> 00:14:59,320 Speaker 3: and she sticks with it, and she's good at articulating 229 00:14:59,360 --> 00:15:01,280 Speaker 3: an argument in a way that doesn't leave people on 230 00:15:01,320 --> 00:15:05,040 Speaker 3: the other side hopping mad at her. What is your 231 00:15:05,600 --> 00:15:08,200 Speaker 3: secret as you think of embracing this role as a diplomat, 232 00:15:08,240 --> 00:15:11,720 Speaker 3: what has made you particularly i'll say particularly good or 233 00:15:12,080 --> 00:15:12,960 Speaker 3: have the facility for. 234 00:15:12,880 --> 00:15:17,320 Speaker 1: Well, well, thank you for the compliment. I've seen. 235 00:15:19,040 --> 00:15:22,520 Speaker 4: This sort of diplomatic initiative, both with China and with 236 00:15:22,640 --> 00:15:28,000 Speaker 4: other countries as really critical because we need to work 237 00:15:28,000 --> 00:15:33,280 Speaker 4: together collaboratively to solve every global problem that we face, 238 00:15:33,800 --> 00:15:39,920 Speaker 4: from climate change to Russia's aggression to issues that we 239 00:15:40,040 --> 00:15:45,080 Speaker 4: have with China. And during the previous administration, I'm sorry 240 00:15:45,120 --> 00:15:49,960 Speaker 4: to say, our alliance is fred and you know it 241 00:15:50,040 --> 00:15:56,480 Speaker 4: was America first, and that should really never be America alone, 242 00:15:56,840 --> 00:16:02,040 Speaker 4: and it was necessary to rebuild alliances, is to work 243 00:16:02,080 --> 00:16:05,920 Speaker 4: with allies around the world, and that's been a broad 244 00:16:06,200 --> 00:16:09,320 Speaker 4: that's been a broad effort, and I think we really 245 00:16:09,400 --> 00:16:14,400 Speaker 4: have succeeded. And perhaps we'll talk about this, but when 246 00:16:14,720 --> 00:16:20,360 Speaker 4: Russia attacked Ukraine, we had an alliance that came together 247 00:16:21,000 --> 00:16:25,520 Speaker 4: in a matter of a day or two to strongly 248 00:16:26,600 --> 00:16:32,080 Speaker 4: counter what Russia was doing. We've stayed together and we've 249 00:16:32,640 --> 00:16:38,280 Speaker 4: worked together to address and this is broad effort G 250 00:16:38,480 --> 00:16:45,880 Speaker 4: twenty or larger, to address climate change and problems afflicting 251 00:16:46,520 --> 00:16:52,160 Speaker 4: poor countries around the world, to address pandemics, created a 252 00:16:52,200 --> 00:16:57,920 Speaker 4: pandemic fund, knowing there'll probably be another pandemic unfortunately, and 253 00:16:58,280 --> 00:17:01,760 Speaker 4: we need to be better prepared we were for COVID. 254 00:17:02,160 --> 00:17:06,240 Speaker 4: So on many different fronts, we have tried to rebuild alliances, 255 00:17:07,000 --> 00:17:13,520 Speaker 4: and with respect to China, relations had really deteriorated during 256 00:17:13,520 --> 00:17:17,520 Speaker 4: the pandemic, and we went for a period of close 257 00:17:17,600 --> 00:17:24,440 Speaker 4: to two years without any meaningful senior level contact between 258 00:17:25,000 --> 00:17:31,240 Speaker 4: US and Chinese, and that was really a very dangerous 259 00:17:31,320 --> 00:17:38,280 Speaker 4: state of affairs. President Biden met with President she In Bali. 260 00:17:39,240 --> 00:17:42,639 Speaker 4: I was at that meeting, and they agreed that it 261 00:17:42,720 --> 00:17:50,480 Speaker 4: was important to re establish relationships, and that means having 262 00:17:50,520 --> 00:17:55,800 Speaker 4: honest conversations about the things that we're concerned about. It 263 00:17:55,960 --> 00:18:02,080 Speaker 4: could be, of course, for the defense. In foreign policy side, 264 00:18:02,640 --> 00:18:08,080 Speaker 4: it's things like Taiwan and the South China see. For us, 265 00:18:08,200 --> 00:18:12,680 Speaker 4: it's some of the tools that we think constitute unfair 266 00:18:13,200 --> 00:18:19,400 Speaker 4: competition or macroeconomic policies that China is following that we 267 00:18:19,480 --> 00:18:23,879 Speaker 4: see as having negative impacts on the United States and 268 00:18:23,920 --> 00:18:28,280 Speaker 4: other countries. These are things we need to discuss, honestly, 269 00:18:30,480 --> 00:18:35,360 Speaker 4: so we try to re establish relationships. Before I went 270 00:18:35,440 --> 00:18:42,280 Speaker 4: to China, I set out three basic tenets for our relationship. First, 271 00:18:42,560 --> 00:18:47,840 Speaker 4: that we have national security concerns, and we're really that's 272 00:18:47,880 --> 00:18:51,399 Speaker 4: not an area where we can compromise. We intend to 273 00:18:51,480 --> 00:18:55,840 Speaker 4: address those concerns. What we can do, though, and I've 274 00:18:55,880 --> 00:19:00,280 Speaker 4: found that this has been helpful, is to explain carefully 275 00:19:00,359 --> 00:19:04,000 Speaker 4: what those concerns are, to try to we dress them 276 00:19:04,160 --> 00:19:11,000 Speaker 4: in the narrowest possible way so that addressing these concerns 277 00:19:11,520 --> 00:19:18,000 Speaker 4: doesn't drift into taking actions intended to harm the entire 278 00:19:18,119 --> 00:19:23,480 Speaker 4: Chinese economy or the Chinese people, and explaining how we 279 00:19:23,600 --> 00:19:28,399 Speaker 4: have drawn those lines. Also giving the Chinese an opportunity 280 00:19:29,640 --> 00:19:33,720 Speaker 4: if they feel we've gone too far and really broadly 281 00:19:33,800 --> 00:19:37,560 Speaker 4: harming their economy, to explain what their concerns are and 282 00:19:37,640 --> 00:19:41,680 Speaker 4: to respond and to listen and if you know, occasionally 283 00:19:42,560 --> 00:19:46,520 Speaker 4: just something that we do because there's a legitimate concern there. 284 00:19:47,000 --> 00:19:48,200 Speaker 1: So that was one tenant. 285 00:19:48,880 --> 00:19:52,920 Speaker 4: The other is to say, look, we've got economic issues 286 00:19:52,960 --> 00:19:57,439 Speaker 4: where we disagree, but what we agree on is we 287 00:19:57,560 --> 00:20:02,479 Speaker 4: do have deep trade and investment relations with China, and 288 00:20:02,520 --> 00:20:09,640 Speaker 4: that's benefiting many Americans. Americans who are involved in export industries. 289 00:20:10,080 --> 00:20:15,840 Speaker 4: We're selling goods to China, people who have jobs with 290 00:20:16,040 --> 00:20:19,880 Speaker 4: firms that are investing in China and operating in China. 291 00:20:21,320 --> 00:20:24,840 Speaker 4: We benefit from much of the trade and investment that's 292 00:20:24,880 --> 00:20:28,400 Speaker 4: going on. And it is not a zero sum game. 293 00:20:28,560 --> 00:20:32,439 Speaker 4: It is a win win type of situation. But the 294 00:20:32,480 --> 00:20:35,080 Speaker 4: trade and investment has to be fair, and we have 295 00:20:35,960 --> 00:20:42,600 Speaker 4: grievances and one of the topics we're discussing intensively now, 296 00:20:43,560 --> 00:20:49,520 Speaker 4: I guess I call it over capacity. China has a 297 00:20:49,640 --> 00:20:55,639 Speaker 4: unique economy in which they are savings rate, so the 298 00:20:55,640 --> 00:21:00,320 Speaker 4: amount of their GDP that they save is over forty percent. 299 00:21:00,520 --> 00:21:03,679 Speaker 1: This is really rare. 300 00:21:05,080 --> 00:21:07,919 Speaker 4: Among countries around the world. 301 00:21:07,960 --> 00:21:09,000 Speaker 1: I don't know of any. 302 00:21:08,840 --> 00:21:15,240 Speaker 4: Developed country with anything like that. Consumer spending is very low, 303 00:21:15,280 --> 00:21:18,920 Speaker 4: as the share of the economy in comparison with any 304 00:21:18,960 --> 00:21:23,119 Speaker 4: other country. And for a country that's trying to develop, 305 00:21:23,160 --> 00:21:26,919 Speaker 4: having this huge pool of savings to invest, that's a 306 00:21:26,960 --> 00:21:31,679 Speaker 4: great thing. And they invested in infrastructure, and they invested 307 00:21:31,720 --> 00:21:35,719 Speaker 4: it in housing and property. But you know, there are 308 00:21:35,720 --> 00:21:38,560 Speaker 4: only so many bridges and roads that it makes sense 309 00:21:38,640 --> 00:21:42,399 Speaker 4: to build, and they did that, and they built a 310 00:21:42,400 --> 00:21:47,880 Speaker 4: lot of houses and live incule with many or not 311 00:21:48,880 --> 00:21:51,880 Speaker 4: many are unfinished, and there are a lot of problems there, 312 00:21:51,920 --> 00:21:55,080 Speaker 4: and so it doesn't you're lived with forty percent of 313 00:21:55,119 --> 00:22:00,080 Speaker 4: your economy. You're saving and what are you going to 314 00:22:00,240 --> 00:22:04,080 Speaker 4: do with all those savings? And they've basically made a 315 00:22:04,160 --> 00:22:05,840 Speaker 4: decision they want to channel. 316 00:22:05,640 --> 00:22:07,800 Speaker 1: That into advanced manufacturing. 317 00:22:08,600 --> 00:22:11,000 Speaker 4: And you know, there are a lot of countries, not 318 00:22:11,119 --> 00:22:15,080 Speaker 4: just the United States, but Europe and developing countries like 319 00:22:15,160 --> 00:22:20,719 Speaker 4: India or Brazil or Mexico that are producing and have 320 00:22:20,800 --> 00:22:25,040 Speaker 4: good jobs in these industries, and when you have massive subsidization, 321 00:22:26,080 --> 00:22:30,000 Speaker 4: it undercuts jobs in many places. So we need to 322 00:22:30,119 --> 00:22:35,240 Speaker 4: discuss this in a sensible way, and we have and 323 00:22:34,200 --> 00:22:39,160 Speaker 4: they're willing to listen. And you have set up working 324 00:22:39,240 --> 00:22:43,159 Speaker 4: groups and economic and a financial working group. But the 325 00:22:43,280 --> 00:22:47,280 Speaker 4: last piece of it is that we also need to collaborate. 326 00:22:48,160 --> 00:22:54,720 Speaker 4: The world needs that from the two largest countries, and 327 00:22:55,160 --> 00:22:59,119 Speaker 4: there are global challenges we face, like climate change or 328 00:23:00,200 --> 00:23:08,280 Speaker 4: debt burdens in poor countries that are really stopping development 329 00:23:08,400 --> 00:23:13,920 Speaker 4: dead in its tracks. We need our multilateral development banks 330 00:23:14,000 --> 00:23:19,240 Speaker 4: to operate in a better and more efficient way to 331 00:23:19,280 --> 00:23:24,080 Speaker 4: help poor countries round middle income countries around the world. 332 00:23:24,720 --> 00:23:27,240 Speaker 1: And we need to work together on these things. 333 00:23:27,880 --> 00:23:34,000 Speaker 4: Or if there is a financial crisis it spills across borders. 334 00:23:34,080 --> 00:23:38,000 Speaker 4: We need to if something happens, be able to work together. 335 00:23:38,720 --> 00:23:41,320 Speaker 4: And so we also agreed we're going to try to 336 00:23:41,320 --> 00:23:43,920 Speaker 4: do that, and we've been doing this very effectively. 337 00:23:44,800 --> 00:23:47,959 Speaker 3: Do you foresee going back there as Treasury secretary? Do 338 00:23:48,000 --> 00:23:49,000 Speaker 3: you need to go back there? 339 00:23:49,800 --> 00:23:54,880 Speaker 4: I certainly may go back there. I, you know, would 340 00:23:54,960 --> 00:23:59,960 Speaker 4: welcome a visit by my Chinese counterpart, and my guess 341 00:24:00,200 --> 00:24:04,960 Speaker 4: is that we will have, one way or another a visit. 342 00:24:08,200 --> 00:24:13,439 Speaker 4: His team will be traveling very soon to China to 343 00:24:13,600 --> 00:24:16,840 Speaker 4: discuss economic issues and carry this forward. 344 00:24:17,520 --> 00:24:19,680 Speaker 3: One last question before we move on to Russia and Ukraine. 345 00:24:21,480 --> 00:24:24,960 Speaker 3: You mentioned that relationship had deteriorated and frayed. You have 346 00:24:25,040 --> 00:24:26,840 Speaker 3: knitted it back together so much as you've been able 347 00:24:26,880 --> 00:24:29,520 Speaker 3: to how fragile is it is you look ahead to 348 00:24:30,000 --> 00:24:33,720 Speaker 3: a new administration, whichever one that may be. As you 349 00:24:33,800 --> 00:24:36,240 Speaker 3: listen to those who counsel for less engagement with China 350 00:24:36,320 --> 00:24:38,720 Speaker 3: as opposed to more, how worried are you about the 351 00:24:38,720 --> 00:24:40,560 Speaker 3: integrity of it and it kind of falling to the 352 00:24:40,600 --> 00:24:42,879 Speaker 3: wayside in the way in which it had before. 353 00:24:44,400 --> 00:24:47,199 Speaker 4: Well, I do think it's possible. I think this is 354 00:24:47,240 --> 00:24:50,800 Speaker 4: something that needs to be prioritized. 355 00:24:49,800 --> 00:24:51,640 Speaker 1: And nurtured, and. 356 00:24:52,920 --> 00:24:56,840 Speaker 4: We need to continue to talk to one another at 357 00:24:56,880 --> 00:25:03,199 Speaker 4: all levels, from the most senior down through staff of 358 00:25:05,040 --> 00:25:09,680 Speaker 4: places like treasury, where there are lots of issues. They 359 00:25:09,680 --> 00:25:12,560 Speaker 4: don't rise to the top level, but we need to 360 00:25:12,640 --> 00:25:16,120 Speaker 4: work together. And as we saw it during the pandemic, 361 00:25:16,560 --> 00:25:20,119 Speaker 4: and we have enough differences, and without a chance to 362 00:25:20,320 --> 00:25:25,720 Speaker 4: discuss them and put them in context, it's certainly possible 363 00:25:25,760 --> 00:25:26,920 Speaker 4: for tensions to rise. 364 00:25:27,000 --> 00:25:28,680 Speaker 1: So this is something that. 365 00:25:28,640 --> 00:25:32,240 Speaker 4: Really requires ongoing attention. 366 00:25:32,920 --> 00:25:34,680 Speaker 1: I hope that it would get it. 367 00:25:35,840 --> 00:25:39,359 Speaker 3: Pivoting to Russia and Ukraine, you mentioned how quickly and 368 00:25:39,440 --> 00:25:43,000 Speaker 3: allies came together to impose sanctions and economic restrictions on 369 00:25:43,080 --> 00:25:47,879 Speaker 3: Russia after its invasion of Ukraine. The US has imposed 370 00:25:48,200 --> 00:25:51,000 Speaker 3: more sanctions under this administration than anyone in the past 371 00:25:51,000 --> 00:25:54,320 Speaker 3: by a mile. And there are critics who say, maybe 372 00:25:54,320 --> 00:25:57,080 Speaker 3: we've gone a little far down that road, maybe they're 373 00:25:57,080 --> 00:25:59,280 Speaker 3: not as effective as you might hope. 374 00:26:00,040 --> 00:26:00,960 Speaker 2: What do you say to them. 375 00:26:01,520 --> 00:26:04,119 Speaker 3: It's a rare day when I go to my computer, 376 00:26:04,320 --> 00:26:07,720 Speaker 3: open the inbox and don't see something from Treasury about 377 00:26:08,080 --> 00:26:11,919 Speaker 3: sanctions on that particular conflict, maybe in South America. It 378 00:26:12,000 --> 00:26:14,000 Speaker 3: is a tool that the Treasury Department, yes, under you, 379 00:26:14,040 --> 00:26:17,000 Speaker 3: but under your recent predecessors as well, have been relying 380 00:26:17,080 --> 00:26:20,439 Speaker 3: upon more this kind of financial warfare, economic warfare. 381 00:26:21,560 --> 00:26:25,360 Speaker 4: Well, I think it can be a potent tool when 382 00:26:25,520 --> 00:26:29,560 Speaker 4: used in the right context. You know, clearly there are 383 00:26:29,640 --> 00:26:34,679 Speaker 4: cases where you use sanctions and you're not successful in 384 00:26:34,760 --> 00:26:39,200 Speaker 4: stopping activity that you'd like to punish. You know, perhaps 385 00:26:39,240 --> 00:26:45,119 Speaker 4: North Korea is a case in point. We have imposed 386 00:26:45,200 --> 00:26:49,280 Speaker 4: high costs on the country, but it hasn't been sufficient 387 00:26:49,400 --> 00:26:53,680 Speaker 4: to establish the goal. But in many cases I think 388 00:26:53,760 --> 00:27:00,000 Speaker 4: sanctions are effective. You know, the dollar is the world 389 00:27:00,000 --> 00:27:05,680 Speaker 4: world's currency. It's used for all around the world for transactions, 390 00:27:06,560 --> 00:27:09,639 Speaker 4: and for countries to be able to do that and 391 00:27:09,720 --> 00:27:13,439 Speaker 4: transact with the rest of the world, they need to 392 00:27:13,520 --> 00:27:22,480 Speaker 4: operate and through correspondent banks in the United States or elsewhere. 393 00:27:23,119 --> 00:27:26,160 Speaker 1: And the threat to cut off. 394 00:27:27,520 --> 00:27:34,480 Speaker 4: Institutions in other countries from the dollar based international financial 395 00:27:34,600 --> 00:27:41,280 Speaker 4: system is a very serious sanction. We we've used that intensively. 396 00:27:42,280 --> 00:27:46,400 Speaker 4: But you know, in the case of Russia and Ukraine 397 00:27:46,560 --> 00:27:50,800 Speaker 4: that you asked about that this is a situation where 398 00:27:50,800 --> 00:27:54,919 Speaker 4: we felt, you know, we certainly don't want to be 399 00:27:55,000 --> 00:27:57,680 Speaker 4: boots on the ground, and we do want to do 400 00:27:57,800 --> 00:28:02,160 Speaker 4: something that's going to be as effective as we can 401 00:28:02,200 --> 00:28:07,200 Speaker 4: make it. We're focused on two things. One is, we 402 00:28:07,240 --> 00:28:11,760 Speaker 4: want to the maximum extent possible to cut off Russia's 403 00:28:11,880 --> 00:28:17,560 Speaker 4: access to military goods, to goods to conduct the war 404 00:28:18,080 --> 00:28:23,280 Speaker 4: or to rebuild its own military complex. And second of all, 405 00:28:23,400 --> 00:28:28,000 Speaker 4: we want to constrain their revenue. So the very first 406 00:28:28,040 --> 00:28:30,960 Speaker 4: thing we did, and we agreed on this in record time, 407 00:28:31,600 --> 00:28:37,840 Speaker 4: is we immobilized the assets of the of the Russian 408 00:28:38,360 --> 00:28:46,040 Speaker 4: Central Bank that lift at least in Europe over you know, 409 00:28:46,240 --> 00:28:50,760 Speaker 4: maybe in total, in total over three hundred billion dollars 410 00:28:51,120 --> 00:28:52,080 Speaker 4: of Russian assets. 411 00:28:52,120 --> 00:28:54,920 Speaker 3: As a subject of robust debate whether or not to 412 00:28:54,960 --> 00:28:56,080 Speaker 3: do that, Am I right. 413 00:28:57,320 --> 00:29:00,560 Speaker 4: Well, we decided to do that. The g and agreed 414 00:29:00,600 --> 00:29:03,320 Speaker 4: to do that in the span of less than twenty 415 00:29:03,320 --> 00:29:06,800 Speaker 4: four hours, so there may have been some discussion within 416 00:29:06,880 --> 00:29:12,480 Speaker 4: those twenty four hours, but it was pretty pretty rapid 417 00:29:12,520 --> 00:29:13,920 Speaker 4: decision making. 418 00:29:15,400 --> 00:29:18,920 Speaker 1: On that, and we had strong. 419 00:29:18,640 --> 00:29:23,840 Speaker 4: Allies and we were all agreed that we needed to 420 00:29:23,960 --> 00:29:30,280 Speaker 4: respond in the strongest possible way to try to stop 421 00:29:30,720 --> 00:29:35,880 Speaker 4: this attack and impede Russia's attack. But we've had some 422 00:29:36,760 --> 00:29:40,440 Speaker 4: innovative things that we have done. What we wanted to 423 00:29:40,520 --> 00:29:44,600 Speaker 4: do was to go after Russia's revenues and to make 424 00:29:44,680 --> 00:29:48,600 Speaker 4: it more difficult for Russia to do the spending that's 425 00:29:48,640 --> 00:29:54,240 Speaker 4: necessary to conduct the war. And Russia's most important source 426 00:29:54,880 --> 00:30:01,240 Speaker 4: of revenue comes from its global oil sales. So everyone 427 00:30:01,320 --> 00:30:07,120 Speaker 4: focused right away on let's impede Russia's global oil sales. 428 00:30:07,840 --> 00:30:12,400 Speaker 4: The problem with that is that if we diminished Russia's 429 00:30:13,200 --> 00:30:16,560 Speaker 4: supply of oil onto the global markets, Russia is an 430 00:30:16,600 --> 00:30:23,520 Speaker 4: important enough oil producer that this could send prices skyrocketing, 431 00:30:24,080 --> 00:30:27,320 Speaker 4: not only in the United States but all around the world, 432 00:30:27,800 --> 00:30:34,040 Speaker 4: including in port countries that are really just can't afford 433 00:30:34,120 --> 00:30:38,240 Speaker 4: to have higher energy prices. So we knew that we 434 00:30:38,320 --> 00:30:43,120 Speaker 4: had to be very careful and it could At first, 435 00:30:43,120 --> 00:30:46,520 Speaker 4: it was how on earth can we possibly cut into 436 00:30:46,560 --> 00:30:53,479 Speaker 4: this revenue stream without harming everybody around the globe. And 437 00:30:53,680 --> 00:30:58,920 Speaker 4: eventually my team came up with the idea that we 438 00:30:58,960 --> 00:31:02,640 Speaker 4: would try to limit the price that Russia was getting 439 00:31:02,720 --> 00:31:05,719 Speaker 4: for the oil that it was selling, but we wanted 440 00:31:05,760 --> 00:31:10,840 Speaker 4: to maintain Russia's incentives to sell the oil. So we 441 00:31:11,000 --> 00:31:14,040 Speaker 4: devise something we called the price cap on Russian oil, 442 00:31:14,760 --> 00:31:24,440 Speaker 4: and we had sanctioned companies, whether it's financial institutions, insurance companies. 443 00:31:24,840 --> 00:31:29,080 Speaker 4: Much of the global oil trade. Tankers that carry oil 444 00:31:29,640 --> 00:31:37,200 Speaker 4: need insurance. Western companies, the United States, Britain, the European Union. 445 00:31:37,480 --> 00:31:42,440 Speaker 4: Their insurance companies provide most of the insurance they need. 446 00:31:42,480 --> 00:31:47,360 Speaker 4: Trade financing, much of it comes from Western banks, and 447 00:31:48,080 --> 00:31:54,080 Speaker 4: we realized that because these inputs, these financial inputs, were 448 00:31:54,120 --> 00:31:58,000 Speaker 4: critical to Russia in maintaining its. 449 00:31:57,840 --> 00:31:59,280 Speaker 1: Global oil sales. 450 00:32:00,000 --> 00:32:04,520 Speaker 4: But what we could do was say, Okay, you can 451 00:32:04,560 --> 00:32:09,040 Speaker 4: go on supplying these things to Russia so they can 452 00:32:09,160 --> 00:32:13,000 Speaker 4: sell oil, but you can only do it if you 453 00:32:13,240 --> 00:32:17,440 Speaker 4: charge if Russia is charging less than a price. We 454 00:32:17,480 --> 00:32:21,760 Speaker 4: would determine per barrel of oil, and we started off 455 00:32:21,800 --> 00:32:26,160 Speaker 4: with sixty dollars a barrel, and it was essentially outlawed 456 00:32:26,560 --> 00:32:30,800 Speaker 4: to assist with it. Insurance or anything else. Tankers couldn't 457 00:32:30,840 --> 00:32:34,600 Speaker 4: carry the oil, and we in the first year of 458 00:32:34,640 --> 00:32:38,680 Speaker 4: putting this in effect, Russia's or our revenues fell by 459 00:32:38,720 --> 00:32:42,840 Speaker 4: forty percent and they continued to supply oil. So it 460 00:32:42,880 --> 00:32:45,720 Speaker 4: was nobody had ever really tried anything like that, and 461 00:32:46,000 --> 00:32:49,160 Speaker 4: it took a long time to convince countries around the 462 00:32:49,200 --> 00:32:52,760 Speaker 4: world that this was a workable or good idea. I mean, 463 00:32:52,920 --> 00:32:55,440 Speaker 4: what happens with sanctions is. 464 00:32:55,360 --> 00:33:01,040 Speaker 1: That over time they work less well. 465 00:33:01,560 --> 00:33:06,000 Speaker 4: Countries look for ways around it, and Russia began to 466 00:33:06,120 --> 00:33:11,520 Speaker 4: invest in their own insurance, in having a fleet of tankers. 467 00:33:12,040 --> 00:33:13,480 Speaker 1: They started selling. 468 00:33:13,160 --> 00:33:17,520 Speaker 4: Oil, mainly to India and to China, and we've had 469 00:33:17,560 --> 00:33:22,719 Speaker 4: to come up with new ways to address that, but 470 00:33:23,440 --> 00:33:26,720 Speaker 4: we have worked together and I think we've had an impact. Well. 471 00:33:26,800 --> 00:33:28,520 Speaker 3: Last question on this point, I saw that the IMF 472 00:33:28,560 --> 00:33:30,440 Speaker 3: is sending a mission to Russia for the first time 473 00:33:30,600 --> 00:33:33,920 Speaker 3: since this conflict, and I wonder if that's something that 474 00:33:33,960 --> 00:33:36,720 Speaker 3: you back or agree with that at a time when 475 00:33:36,840 --> 00:33:39,320 Speaker 3: the US and its allies are imposing these sanctions and 476 00:33:39,320 --> 00:33:42,600 Speaker 3: fighting this economic fight against Russia, does it make sense 477 00:33:42,600 --> 00:33:45,800 Speaker 3: that that international body that the US does play such 478 00:33:45,840 --> 00:33:49,120 Speaker 3: a key role with is doing that at this point. 479 00:33:49,040 --> 00:33:53,680 Speaker 4: Well, Russia is not getting resources from the IMF, and 480 00:33:54,040 --> 00:33:57,400 Speaker 4: my guess is that I would object strongly to that. 481 00:33:58,120 --> 00:34:03,440 Speaker 4: But Russia is a member of the IMF and participates. 482 00:34:04,240 --> 00:34:07,200 Speaker 4: And I'm not sure what the purpose if the mission is, 483 00:34:07,760 --> 00:34:14,319 Speaker 4: but the IMF routinely, on an annual basis, evaluates the 484 00:34:14,360 --> 00:34:20,719 Speaker 4: economies that are members members of the organization, and I 485 00:34:20,760 --> 00:34:21,840 Speaker 4: wouldn't object to that. 486 00:34:23,080 --> 00:34:25,440 Speaker 3: We're going to move from international to domestic, and I'm 487 00:34:25,440 --> 00:34:27,640 Speaker 3: going to, in the hope of breaking some news, ask 488 00:34:27,680 --> 00:34:29,120 Speaker 3: you a question that I'm sure you're not going to answer, 489 00:34:29,160 --> 00:34:31,799 Speaker 3: but I'll ask it anyway, and feel free. Feel free 490 00:34:31,840 --> 00:34:33,960 Speaker 3: to have some water as I give this long preamble. 491 00:34:34,000 --> 00:34:36,640 Speaker 3: But a big story right now in this country is 492 00:34:36,680 --> 00:34:39,680 Speaker 3: whether a Japanese company should be allowed to buy US steel, 493 00:34:39,680 --> 00:34:44,200 Speaker 3: which is this iconic American steel manufacturer. And the President 494 00:34:44,280 --> 00:34:47,520 Speaker 3: has reportedly said that once a report by a committee 495 00:34:47,520 --> 00:34:51,040 Speaker 3: that you chair that assesses economic risk and security risk, 496 00:34:51,719 --> 00:34:54,840 Speaker 3: once that report has delivered his desk, he will go 497 00:34:54,960 --> 00:34:57,840 Speaker 3: against that deal. Vice President has said as much as well. 498 00:34:58,920 --> 00:35:03,000 Speaker 3: There's the preamble, Can you give us any update on 499 00:35:03,040 --> 00:35:05,120 Speaker 3: the status of that of that report or the timing 500 00:35:05,160 --> 00:35:05,560 Speaker 3: of it. 501 00:35:05,600 --> 00:35:08,279 Speaker 4: So no, I have to do my role, which is 502 00:35:08,400 --> 00:35:12,640 Speaker 4: to say that this group called SIPHIUS, the Committee on 503 00:35:12,719 --> 00:35:19,120 Speaker 4: Foreign Investment in the United States, operates operates in a 504 00:35:19,160 --> 00:35:24,879 Speaker 4: way that we cannot talk about any specific transaction at all. 505 00:35:25,280 --> 00:35:26,640 Speaker 1: I can't even tell. 506 00:35:26,440 --> 00:35:31,960 Speaker 4: You whether or not this this transaction is under review, 507 00:35:32,400 --> 00:35:35,040 Speaker 4: although it has been widely reported that it is. 508 00:35:35,960 --> 00:35:44,799 Speaker 2: That I'll tell you, I'll go ahead, go ahead, So 509 00:35:45,560 --> 00:35:45,920 Speaker 2: I'm not. 510 00:35:45,880 --> 00:35:48,479 Speaker 4: Going to comment on the specifics what what I will 511 00:35:48,719 --> 00:35:55,680 Speaker 4: what I will say is that foreign direct investment in 512 00:35:55,719 --> 00:35:59,600 Speaker 4: the United States is really important and by and large 513 00:35:59,640 --> 00:36:03,640 Speaker 4: has been a huge positive for US, and it is 514 00:36:03,680 --> 00:36:10,000 Speaker 4: a priority to maintain an open and healthy environment for 515 00:36:10,000 --> 00:36:13,960 Speaker 4: foreign countries to invest in the United States, just as 516 00:36:14,120 --> 00:36:18,560 Speaker 4: we're investing in many countries around the world. So that 517 00:36:18,719 --> 00:36:23,520 Speaker 4: is the positive value. On the other hand, foreign investment 518 00:36:23,560 --> 00:36:29,000 Speaker 4: in the United States can impose national security concerns, and 519 00:36:29,160 --> 00:36:35,600 Speaker 4: siphius's role is to use the expertise of multiple agencies 520 00:36:36,200 --> 00:36:41,839 Speaker 4: to try to identify any national security risks and to 521 00:36:41,920 --> 00:36:46,239 Speaker 4: provide the President with advice on whether or not there 522 00:36:46,320 --> 00:36:47,160 Speaker 4: is a way to. 523 00:36:47,400 --> 00:36:49,120 Speaker 1: Address these risks. 524 00:36:49,760 --> 00:36:53,560 Speaker 4: And it is an agency that takes that role very 525 00:36:53,680 --> 00:36:58,719 Speaker 4: very seriously, and we try to present the President with 526 00:36:59,400 --> 00:37:02,520 Speaker 4: the best of valuation they could have. But I say 527 00:37:02,560 --> 00:37:07,560 Speaker 4: that Ciphius's advisory to the president, and ultimately it's the 528 00:37:07,600 --> 00:37:08,760 Speaker 4: president's decision. 529 00:37:09,280 --> 00:37:11,840 Speaker 3: Let me, with trepidation, take one more bite at this apple, 530 00:37:12,040 --> 00:37:15,360 Speaker 3: and that is to say, can you share anything about 531 00:37:15,400 --> 00:37:17,839 Speaker 3: the calculus that that committee goes through. I saw that 532 00:37:18,239 --> 00:37:20,880 Speaker 3: Larry Summers, the former Treasury secretary and your former student 533 00:37:20,880 --> 00:37:25,520 Speaker 3: at Harvard, said yesterday it's important to take into consideration 534 00:37:25,960 --> 00:37:29,440 Speaker 3: how a company's products might be used in the American economy. 535 00:37:29,520 --> 00:37:32,040 Speaker 3: So here I'll say, if it's a steel manufacturer, how 536 00:37:32,080 --> 00:37:34,680 Speaker 3: that might affect the automotive industry in the States. Is 537 00:37:34,680 --> 00:37:36,759 Speaker 3: that part of what you consider the sort of knock 538 00:37:36,840 --> 00:37:39,879 Speaker 3: on effects or downstream effects of a deal? 539 00:37:41,040 --> 00:37:44,719 Speaker 4: Well, as I said, the focus is on national security. 540 00:37:45,160 --> 00:37:49,400 Speaker 4: Is there a national security concern? But it could be economic, 541 00:37:50,040 --> 00:37:53,560 Speaker 4: So we you know part of that is supply chains 542 00:37:53,680 --> 00:37:59,680 Speaker 4: or supply chains at risk. Sometimes you know one might 543 00:37:59,760 --> 00:38:05,840 Speaker 4: work or that an investment could somehow endanger supply chains 544 00:38:05,520 --> 00:38:08,680 Speaker 4: that could potentially be taken into a camp. 545 00:38:09,520 --> 00:38:13,759 Speaker 3: All right, we'll move on and let me I wanted 546 00:38:13,760 --> 00:38:16,000 Speaker 3: to ask you about deficits in preparation for this I 547 00:38:16,040 --> 00:38:18,520 Speaker 3: went back and watched your confirmation hearing, which happened at 548 00:38:18,560 --> 00:38:21,280 Speaker 3: such a critical and difficult moment in this country's history. 549 00:38:22,280 --> 00:38:25,160 Speaker 3: And what's fascinating is at that time your message was 550 00:38:25,200 --> 00:38:26,800 Speaker 3: we need to go big, We need a big fiscal 551 00:38:26,800 --> 00:38:28,960 Speaker 3: spending package to get us out of the doulgrums of 552 00:38:29,000 --> 00:38:29,800 Speaker 3: the pandemic. 553 00:38:29,840 --> 00:38:30,760 Speaker 2: And at the same time. 554 00:38:32,320 --> 00:38:33,880 Speaker 3: You said that the Treasury Sectory has to be a 555 00:38:33,960 --> 00:38:37,320 Speaker 3: voice for fiscal sanity and you pledge to do that. 556 00:38:37,360 --> 00:38:38,560 Speaker 3: A lot of people will think of you as a 557 00:38:38,600 --> 00:38:40,880 Speaker 3: deficit hawk. Do you still consider yourself to be a 558 00:38:40,920 --> 00:38:44,600 Speaker 3: deficit hawk? And I think of this moment when look, 559 00:38:44,640 --> 00:38:47,359 Speaker 3: the economy seems to have come around, inflation is lower, 560 00:38:47,400 --> 00:38:49,160 Speaker 3: the job's market looks good. Is it time for a 561 00:38:49,280 --> 00:38:52,520 Speaker 3: kind of fiscal reset in this country? 562 00:38:53,480 --> 00:38:56,640 Speaker 4: Well? I do think we have to be on a 563 00:38:56,800 --> 00:39:02,040 Speaker 4: sustainable fiscal course, and I feel my job is Treasury 564 00:39:02,239 --> 00:39:08,200 Speaker 4: Secretary is to monitor that and to make recommendations that 565 00:39:08,320 --> 00:39:15,439 Speaker 4: would be consistent with a responsible fiscal path. Look, when 566 00:39:15,480 --> 00:39:19,880 Speaker 4: the economy is suffering from a huge downturn, it can 567 00:39:20,000 --> 00:39:24,880 Speaker 4: even be ultimately deficit reducing. To spend a lot to 568 00:39:25,040 --> 00:39:31,080 Speaker 4: address it get the economy back on track. That aids 569 00:39:31,200 --> 00:39:35,279 Speaker 4: tax revenue over the long term, of course, it has 570 00:39:35,400 --> 00:39:39,320 Speaker 4: to be temporary spending, and of course, since the pandemic 571 00:39:39,440 --> 00:39:44,440 Speaker 4: has ended, spending has declined for all of those programs. 572 00:39:45,280 --> 00:39:48,719 Speaker 4: But a challenge we face in the United States is 573 00:39:48,920 --> 00:39:54,239 Speaker 4: that the level of tax revenue has declined in comparison 574 00:39:54,480 --> 00:39:59,800 Speaker 4: with historic norms. That's partly because of the twenty seven 575 00:40:00,040 --> 00:40:06,000 Speaker 4: Team tax cuts, the Jobs Cuts, the Job and Tax Act, 576 00:40:06,520 --> 00:40:10,839 Speaker 4: parts of which expire in twenty twenty five. 577 00:40:11,239 --> 00:40:12,920 Speaker 3: I'll call it the Trump tax cuts, even though I 578 00:40:13,000 --> 00:40:15,560 Speaker 3: know that you won't, but for everyone's familiarity with how 579 00:40:15,600 --> 00:40:19,000 Speaker 3: it's commonly called, these are expiring in the coming months, and. 580 00:40:19,239 --> 00:40:22,719 Speaker 4: You know that was something that reduced tax revenues. Then 581 00:40:23,400 --> 00:40:30,440 Speaker 4: we have an aging population and three huge programs, Social Security. 582 00:40:30,000 --> 00:40:31,759 Speaker 1: Medicare, and Medicaid. 583 00:40:32,400 --> 00:40:36,520 Speaker 4: As the population ages, just leaving the rules of all 584 00:40:36,600 --> 00:40:41,799 Speaker 4: of those programs in place, they the spending on those 585 00:40:41,920 --> 00:40:43,120 Speaker 4: programs goes up. 586 00:40:43,880 --> 00:40:45,440 Speaker 1: And as you start looking. 587 00:40:45,280 --> 00:40:51,200 Speaker 4: Out ten twenty years ahead, even if you think that 588 00:40:51,320 --> 00:40:56,640 Speaker 4: our fiscal situation is okay right now, that aging of 589 00:40:56,760 --> 00:41:01,719 Speaker 4: the population and expansion of those programs can put us 590 00:41:01,800 --> 00:41:06,279 Speaker 4: on a financial path, a fiscal path that's not sustainable. 591 00:41:07,080 --> 00:41:11,400 Speaker 4: So right now, although the numbers of how large the 592 00:41:11,520 --> 00:41:16,720 Speaker 4: federal deficit is, you name them, it can seem scary, Can. 593 00:41:16,600 --> 00:41:17,360 Speaker 2: I name one quickly? 594 00:41:17,600 --> 00:41:17,839 Speaker 1: Sure? 595 00:41:18,960 --> 00:41:22,040 Speaker 3: Congressional Budget off is saying US fiscal deficits projected to 596 00:41:22,080 --> 00:41:24,160 Speaker 3: equal or exceed five and a half percent of GDP 597 00:41:24,760 --> 00:41:28,360 Speaker 3: every year out to twenty thirty four, and the CBO 598 00:41:28,440 --> 00:41:31,040 Speaker 3: also noting deficits have not been that large or remain 599 00:41:31,120 --> 00:41:33,160 Speaker 3: that large for more than five years in a row 600 00:41:33,320 --> 00:41:34,640 Speaker 3: since at least nineteen thirty. 601 00:41:35,719 --> 00:41:38,360 Speaker 2: That is scary. I mean, it strikes me as scary. 602 00:41:38,719 --> 00:41:41,399 Speaker 4: Well, I think the deficits need to be brought down 603 00:41:42,200 --> 00:41:46,640 Speaker 4: to the point where the interest costs on the debt 604 00:41:46,840 --> 00:41:51,160 Speaker 4: remain manageable, and they remain manageable over the long run. 605 00:41:51,360 --> 00:41:56,480 Speaker 4: And I would say historically the United States has rarely 606 00:41:57,960 --> 00:42:02,640 Speaker 4: had interest costs and I mean in inflation adjusted terms 607 00:42:03,280 --> 00:42:08,800 Speaker 4: that exceed two percent of GDP. That's we're living within 608 00:42:08,960 --> 00:42:13,319 Speaker 4: that now. At the interest costs on the debt are 609 00:42:14,120 --> 00:42:20,240 Speaker 4: not you know, they're well under two percent. And President 610 00:42:20,360 --> 00:42:25,320 Speaker 4: Biden and Vice President Harris delivered a budget to Congress 611 00:42:26,080 --> 00:42:32,040 Speaker 4: that continues that over a ten year horizon. Now, President 612 00:42:32,480 --> 00:42:36,680 Speaker 4: Biden has signed into law a trillion dollars worth of 613 00:42:37,840 --> 00:42:43,640 Speaker 4: deficit reduction. He's raised. He's put in place a corporate 614 00:42:43,719 --> 00:42:51,880 Speaker 4: alternative minimum tax that Congress agreed to. He's enabled Medicare 615 00:42:52,200 --> 00:42:58,760 Speaker 4: to bargain with pharmaceutical companies to bring down drug costs, 616 00:42:58,880 --> 00:43:04,120 Speaker 4: which is some thing that's lowered pharmaceutical costs for Americans 617 00:43:04,600 --> 00:43:10,040 Speaker 4: and also lowered resulted in greater revenue lower expense for 618 00:43:10,200 --> 00:43:15,880 Speaker 4: the government. But he's proposed three trillion dollars in additional 619 00:43:16,040 --> 00:43:20,000 Speaker 4: deficit reduction over the next ten years in his most 620 00:43:20,080 --> 00:43:26,719 Speaker 4: recent budget. And important pieces of that are tax fairness 621 00:43:27,280 --> 00:43:33,360 Speaker 4: in two respects. One is looking to corporations and wealthy 622 00:43:33,840 --> 00:43:38,000 Speaker 4: and high income individuals to pay their fair share, and 623 00:43:38,120 --> 00:43:42,880 Speaker 4: they benefit from many things like a very low and 624 00:43:43,040 --> 00:43:52,760 Speaker 4: sometimes nonexistent capital gains taxation, restoring high higher income tax 625 00:43:52,920 --> 00:43:57,359 Speaker 4: rates on the richest Americans, not on people learning under 626 00:43:57,400 --> 00:44:01,560 Speaker 4: four hundred thousand dollars. But other important part of that 627 00:44:02,480 --> 00:44:07,680 Speaker 4: is making sure that our internal Revenue Service actually as 628 00:44:07,800 --> 00:44:12,279 Speaker 4: the resources to collect the taxes that people are obligated 629 00:44:12,400 --> 00:44:18,480 Speaker 4: to pay. And a shocking number is that current estimates 630 00:44:18,640 --> 00:44:24,400 Speaker 4: say that on the close to a trillion dollars a 631 00:44:24,560 --> 00:44:29,799 Speaker 4: year of taxes are simply not paid their due. That's 632 00:44:29,920 --> 00:44:33,800 Speaker 4: called the tax gap, the difference between what is owed 633 00:44:34,320 --> 00:44:38,480 Speaker 4: under our current laws and what is being collected, and 634 00:44:38,640 --> 00:44:41,520 Speaker 4: that comes close to a trillion dollars a year. 635 00:44:42,360 --> 00:44:46,000 Speaker 1: We fought really hard for the. 636 00:44:46,120 --> 00:44:51,200 Speaker 4: Internal Revenue Service to get the resources it needs to 637 00:44:51,360 --> 00:44:56,279 Speaker 4: collect those tax revenues, because what's happened over decades is 638 00:44:56,360 --> 00:45:00,600 Speaker 4: that the IRS has been so starved for res sources 639 00:45:01,160 --> 00:45:05,319 Speaker 4: that they could neither collect the taxes that are due. 640 00:45:06,320 --> 00:45:10,880 Speaker 4: They're so starved that the audit rates on high income individuals, 641 00:45:11,480 --> 00:45:20,960 Speaker 4: complex partnerships, corporations, big corporations they felt pitifully, I mean 642 00:45:21,280 --> 00:45:24,600 Speaker 4: so close to zero that you could be pretty sure 643 00:45:25,000 --> 00:45:27,839 Speaker 4: that if you cheated on your taxes, you wouldn't get caught. 644 00:45:28,320 --> 00:45:32,960 Speaker 4: And what happened is a disproportionate share of enforcement money 645 00:45:33,280 --> 00:45:37,800 Speaker 4: went into making sure that poor people who get the 646 00:45:37,920 --> 00:45:43,000 Speaker 4: earned income tax credit don't cheat. And that was really 647 00:45:43,320 --> 00:45:47,000 Speaker 4: a situation that had to be changed. In the Inflation 648 00:45:47,200 --> 00:45:52,920 Speaker 4: Reduction Act. We succeeded in getting a multi year eighty 649 00:45:53,239 --> 00:45:58,239 Speaker 4: billion dollars for the Internal Revenue Service. Of course, the 650 00:45:58,360 --> 00:46:04,640 Speaker 4: other aspect of IRA performance is that anybody who tried 651 00:46:04,719 --> 00:46:10,319 Speaker 4: to contact the IRS on the phone you know, by 652 00:46:10,360 --> 00:46:13,960 Speaker 4: the time people finally got through, it really wasn't fun 653 00:46:14,080 --> 00:46:20,520 Speaker 4: to be an IRS customer representative. The typical person when 654 00:46:20,560 --> 00:46:24,000 Speaker 4: they actually got a human on the phone, wo'd start 655 00:46:24,120 --> 00:46:29,040 Speaker 4: by screaming at that person about how frustrated they were 656 00:46:29,160 --> 00:46:32,800 Speaker 4: that they had spent the entire day on hold waiting 657 00:46:32,920 --> 00:46:35,160 Speaker 4: for the phone to be answered. 658 00:46:36,320 --> 00:46:38,040 Speaker 1: I don't know how many people here. 659 00:46:38,040 --> 00:46:41,919 Speaker 4: Over the last year or two have tried to call 660 00:46:42,040 --> 00:46:45,040 Speaker 4: the IRS, but what I can tell you is, as 661 00:46:45,120 --> 00:46:49,720 Speaker 4: a result of an eighty billion dollar infusion, customer's service 662 00:46:49,840 --> 00:46:55,520 Speaker 4: has been transformed. We went from a twenty percent rate 663 00:46:55,760 --> 00:47:00,160 Speaker 4: of answering telephone calls to this last tax sees in 664 00:47:00,760 --> 00:47:03,959 Speaker 4: eighty eight percent in three minutes or less. 665 00:47:04,719 --> 00:47:14,520 Speaker 3: And we have a few minutes left before I get 666 00:47:14,520 --> 00:47:16,600 Speaker 3: to my last questions. Do you do your own taxes? 667 00:47:16,640 --> 00:47:17,480 Speaker 3: I've always wondered, are you? 668 00:47:18,800 --> 00:47:20,560 Speaker 1: For most of my life? 669 00:47:20,640 --> 00:47:23,160 Speaker 2: I have, but it's gotten complicated. 670 00:47:23,400 --> 00:47:25,759 Speaker 4: It's got a little more complicated, But most of my 671 00:47:25,880 --> 00:47:28,000 Speaker 4: life I've been to do it yourself. 672 00:47:28,000 --> 00:47:30,279 Speaker 3: For the last of means, we have just some sort 673 00:47:30,280 --> 00:47:33,279 Speaker 3: of broader macro questions, And one that I've thought a 674 00:47:33,360 --> 00:47:35,399 Speaker 3: lot about is where you see risk when you look 675 00:47:35,400 --> 00:47:39,000 Speaker 3: at the global financial system. Now, what concerns you? What 676 00:47:39,080 --> 00:47:41,839 Speaker 3: are things that you're keeping an extra watch on, being 677 00:47:41,880 --> 00:47:46,040 Speaker 3: extra vigilant about, you know, is it private? Actually, are 678 00:47:46,080 --> 00:47:47,560 Speaker 3: there things that you're worried about or think that that 679 00:47:47,680 --> 00:47:48,480 Speaker 3: merit more attention. 680 00:47:49,920 --> 00:47:52,959 Speaker 4: Well, just so, for a year ago, year ago March, 681 00:47:54,760 --> 00:47:59,879 Speaker 4: really unexpectedly we saw in the United States what could 682 00:47:59,880 --> 00:48:04,560 Speaker 4: have turned itself into a systemic bank run type of 683 00:48:04,719 --> 00:48:11,880 Speaker 4: situation in which two banks, Silicon Valley Bank and Signature, 684 00:48:14,280 --> 00:48:20,680 Speaker 4: had large quantities of uninsured deposits and suffered losses in 685 00:48:20,760 --> 00:48:27,080 Speaker 4: their investment portfolio that gave rise to runs on the 686 00:48:27,320 --> 00:48:31,960 Speaker 4: deposits in those banks at a speed we had never 687 00:48:32,239 --> 00:48:34,400 Speaker 4: ever seen in the United States. 688 00:48:34,600 --> 00:48:36,480 Speaker 3: Another moment when you have a robust debate in a 689 00:48:36,600 --> 00:48:38,040 Speaker 3: very compressed period of time. 690 00:48:38,120 --> 00:48:43,080 Speaker 4: We worked very hard that weekend to make sure that 691 00:48:43,400 --> 00:48:48,080 Speaker 4: we didn't end up with contagion to the rest of 692 00:48:48,160 --> 00:48:52,560 Speaker 4: the banking system. And you know, this is something we 693 00:48:52,719 --> 00:48:55,680 Speaker 4: thought was no longer a problem. So you know, even 694 00:48:55,800 --> 00:48:59,560 Speaker 4: in the core part of our financial system, the banking system, 695 00:49:00,120 --> 00:49:02,640 Speaker 4: there are steps we need to take to make sure 696 00:49:03,239 --> 00:49:06,480 Speaker 4: that banks have adequate liquidity to be able to deal 697 00:49:06,560 --> 00:49:10,879 Speaker 4: with that, to mitigate that risk but there's much less 698 00:49:11,040 --> 00:49:16,759 Speaker 4: regulation of the financial system outside the banking system, and 699 00:49:17,320 --> 00:49:21,320 Speaker 4: there are risks there. And I had something called the 700 00:49:21,440 --> 00:49:23,960 Speaker 4: Financial Stability Oversight Committee. 701 00:49:25,080 --> 00:49:26,840 Speaker 2: You can talk more about that than the other committee. 702 00:49:28,960 --> 00:49:31,560 Speaker 1: Well, it was created in the aftermath of the. 703 00:49:33,080 --> 00:49:41,320 Speaker 4: Financial crisis to attempt to systematically survey the financial system, 704 00:49:41,480 --> 00:49:45,200 Speaker 4: to try to identify and address risks, and we do 705 00:49:45,360 --> 00:49:51,600 Speaker 4: that on a regular basis. Money market funds have created risks. 706 00:49:51,800 --> 00:49:56,920 Speaker 4: I think we've now hopefully successfully dealt with that, but 707 00:49:57,080 --> 00:50:01,640 Speaker 4: there are a few areas outside core bank that remain 708 00:50:01,719 --> 00:50:06,799 Speaker 4: of concern. And globally, of course, the system is connected. 709 00:50:08,120 --> 00:50:12,279 Speaker 4: Cybersecurity is a huge is a huge and growing risk. 710 00:50:12,719 --> 00:50:13,640 Speaker 1: We're working on that. 711 00:50:14,280 --> 00:50:18,960 Speaker 4: But overall, I would say for the US, the kinds 712 00:50:19,040 --> 00:50:23,640 Speaker 4: of metrics that we would monitor that would summarize risks, 713 00:50:24,200 --> 00:50:28,640 Speaker 4: whether it's asset valuations or the degree of leverage. 714 00:50:30,560 --> 00:50:33,680 Speaker 1: Things look good. There are not I don't see red 715 00:50:33,760 --> 00:50:34,680 Speaker 1: lights flashing. 716 00:50:35,719 --> 00:50:38,200 Speaker 3: I went through your biography at the top in broad strokes, 717 00:50:38,239 --> 00:50:40,279 Speaker 3: and I wonder, now, as we approach the end of 718 00:50:40,320 --> 00:50:43,680 Speaker 3: President Biden's tenure, your tenure in this job, I should ask, 719 00:50:43,960 --> 00:50:45,360 Speaker 3: is there any world in which you are in this 720 00:50:45,480 --> 00:50:47,719 Speaker 3: job after January twenty fifth, or are you done at 721 00:50:47,760 --> 00:50:49,040 Speaker 3: the end of this administration? 722 00:50:49,600 --> 00:50:52,440 Speaker 4: Probably done, But we'll say. 723 00:50:53,840 --> 00:50:54,920 Speaker 2: What surprised you about it? 724 00:50:55,000 --> 00:50:57,880 Speaker 3: Maybe perhaps beyond the difficulty of dealing with Congress, what 725 00:50:58,080 --> 00:51:01,759 Speaker 3: surprised you most about about doing this particular job. 726 00:51:02,440 --> 00:51:05,800 Speaker 4: Well, I don't know that this wasn't really a surprise, 727 00:51:06,239 --> 00:51:09,840 Speaker 4: but one of the things I noticed right away I 728 00:51:09,960 --> 00:51:12,680 Speaker 4: hadn't really spent any time at Treasury. I spent a 729 00:51:12,719 --> 00:51:16,320 Speaker 4: lot of time at the Federal Reserve. But the quality 730 00:51:16,680 --> 00:51:22,520 Speaker 4: of the workforce of the federal workforce is just excellent. 731 00:51:23,440 --> 00:51:28,800 Speaker 4: And you know, they've taken a fair amount of abuse, 732 00:51:29,440 --> 00:51:34,640 Speaker 4: people accusing federal employees of waste, fraud and abuse, not 733 00:51:34,840 --> 00:51:40,280 Speaker 4: being competent or good at their jobs, the Dark State 734 00:51:40,440 --> 00:51:44,600 Speaker 4: and all of that. You know, we have a federal 735 00:51:44,719 --> 00:51:50,000 Speaker 4: workforce people who are deeply dedicated to the mission of 736 00:51:50,160 --> 00:51:57,000 Speaker 4: public service, who are immensely knowledgeable, and who are really 737 00:51:57,200 --> 00:52:01,959 Speaker 4: dedicated and working hard to try try to improve life 738 00:52:02,000 --> 00:52:06,279 Speaker 4: for Americans. And this is like a huge resource, a 739 00:52:06,440 --> 00:52:13,640 Speaker 4: capital asset for the American people. And it is impressive 740 00:52:14,840 --> 00:52:18,719 Speaker 4: what people are willing to give. I mean, I just 741 00:52:18,800 --> 00:52:24,160 Speaker 4: give you recent example. Treasury has many different responsibilities, but 742 00:52:24,320 --> 00:52:30,120 Speaker 4: when Congress passed the Inflation Reduction Act, huge set of 743 00:52:31,040 --> 00:52:38,000 Speaker 4: new tax incentives created to promote clean energy, and the 744 00:52:38,160 --> 00:52:42,640 Speaker 4: burden that creates in terms of writing rules on everything 745 00:52:42,880 --> 00:52:49,160 Speaker 4: from electric uh, you know, tax credits for buying electric 746 00:52:49,360 --> 00:52:57,239 Speaker 4: cars to credits for developing hydrogen that's clean to use 747 00:52:57,280 --> 00:53:01,680 Speaker 4: in heavy industry in normer miss burden of tax writing 748 00:53:02,480 --> 00:53:07,279 Speaker 4: and the people, the people in this office, you know, 749 00:53:07,560 --> 00:53:12,080 Speaker 4: thanksgivings would go by, Christmas would go by, people not 750 00:53:12,239 --> 00:53:17,720 Speaker 4: getting vacations twenty four to seven. And complex technical work 751 00:53:18,280 --> 00:53:24,120 Speaker 4: to understand the science and the public policy Inteagency work 752 00:53:24,239 --> 00:53:29,239 Speaker 4: to figure out how do you design incentives that will 753 00:53:29,280 --> 00:53:34,880 Speaker 4: be effective, that are administrable. You know, the dedication that 754 00:53:35,080 --> 00:53:39,000 Speaker 4: you see of wanting to get this right and having 755 00:53:39,080 --> 00:53:42,479 Speaker 4: the ability to do it. I mean, this is really 756 00:53:42,800 --> 00:53:46,320 Speaker 4: it's impressive, and it's been one of the joys of 757 00:53:46,440 --> 00:53:51,160 Speaker 4: my job, the civil service, the appointed appointed people, and 758 00:53:51,719 --> 00:53:53,520 Speaker 4: really really an impressive. 759 00:53:54,520 --> 00:53:56,520 Speaker 3: Last question, Madam Secretary, is as you approach the end 760 00:53:56,560 --> 00:54:00,800 Speaker 3: of your tenure, probably what are one or two things 761 00:54:00,920 --> 00:54:03,360 Speaker 3: on your very long to do Listen, we've kind of 762 00:54:03,520 --> 00:54:05,320 Speaker 3: touched on all of these things within your remit and 763 00:54:05,360 --> 00:54:07,439 Speaker 3: that you're working on that you want to get done 764 00:54:07,719 --> 00:54:09,880 Speaker 3: or feel that you have to get done before there 765 00:54:10,000 --> 00:54:11,320 Speaker 3: is a change in leadership. 766 00:54:11,480 --> 00:54:14,920 Speaker 4: At Treasury, well, for example, we're working very hard to 767 00:54:15,080 --> 00:54:19,920 Speaker 4: complete the rule writing that we need to do. There 768 00:54:19,960 --> 00:54:25,320 Speaker 4: are huge programs that we're administering both the Treasury and 769 00:54:25,440 --> 00:54:31,399 Speaker 4: in other agencies. We have the Semiconductor and Chips Act 770 00:54:31,960 --> 00:54:36,239 Speaker 4: and been hearing a lot here in Austin about the 771 00:54:36,360 --> 00:54:40,239 Speaker 4: difference this is making in terms of the investments and 772 00:54:40,400 --> 00:54:47,440 Speaker 4: growth that you're seeing. Rebuilding America's infrastructure of bridges and 773 00:54:49,920 --> 00:54:54,799 Speaker 4: rail and roads, and the internet. Getting the internet make 774 00:54:54,840 --> 00:54:59,200 Speaker 4: sure that everybody has access. We need to continue implementing 775 00:54:59,360 --> 00:55:04,759 Speaker 4: this well. And you know, we continue to generate in 776 00:55:04,920 --> 00:55:07,160 Speaker 4: areas where we care a lot about. 777 00:55:07,239 --> 00:55:08,719 Speaker 1: The Congress hasn't. 778 00:55:10,239 --> 00:55:14,800 Speaker 4: Legislated the programs that the President and Vice President have 779 00:55:15,000 --> 00:55:20,160 Speaker 4: put forward. So housing is a huge issue. Affordable housing 780 00:55:20,600 --> 00:55:23,960 Speaker 4: in many parts of the country critical priority. 781 00:55:24,600 --> 00:55:26,239 Speaker 1: We need to use every tool we. 782 00:55:26,400 --> 00:55:31,640 Speaker 4: Have to promote that agenda, and we are it's important 783 00:55:31,680 --> 00:55:36,640 Speaker 4: for Congress to act to provide for additional construction of 784 00:55:36,719 --> 00:55:37,800 Speaker 4: affordable housing. 785 00:55:38,239 --> 00:55:39,880 Speaker 1: But we need to use. 786 00:55:39,760 --> 00:55:44,759 Speaker 4: Every tool we have, and we're doing that. Childcare, healthcare. 787 00:55:46,360 --> 00:55:48,719 Speaker 4: You know, there are things that the executive can do, 788 00:55:49,160 --> 00:55:51,320 Speaker 4: and their area is still left to address. 789 00:55:52,440 --> 00:55:54,440 Speaker 2: This has been a real treat to have an hour 790 00:55:54,520 --> 00:55:56,359 Speaker 2: with you. Thank you very much, and thanks to all 791 00:55:56,400 --> 00:55:56,680 Speaker 2: of your 792 00:55:56,719 --> 00:55:58,080 Speaker 1: Life for helming as well.