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Speaker 2: Fascinating to hear just everyone evolve with the data. Certainly
Speaker 2: the markets are today, and to hear the former Saint
Speaker 2: Louis FED president say the soft landing for the US
Speaker 2: economy is in view is something that we are obviously
Speaker 2: going to hear. That's the kind of news that the
Speaker 2: White House wants to listen to. And following this job's
Speaker 2: data this morning, we may be in a different world.
Speaker 2: It certainly feels like it then we were twenty four
Speaker 2: hours ago, certainly coming off of the Fed meeting and
Speaker 2: some of the more recent data that we've seen on
Speaker 2: GDP and jobs. Mark Hamrick joins us. Now I'm glad
Speaker 2: to say from our Washington Bureau, the bank Rate Washington
Speaker 2: Bureau chief, you's senior economic analysts at bank Rate and
Speaker 2: has been researching this job's data forest market. It's great
Speaker 2: to have you on Bloomberg. Welcome the stuff that we
Speaker 2: were hearing just now from Jim Bullard reinforces this view
Speaker 2: that the FED may actually stick the soft landing. How
Speaker 2: are you looking at this report today?
Speaker 3: Good to be with you, Joan, Thanks for having me.
Speaker 3: I think what he's saying is very parallel to what
Speaker 3: the FED chairman said just a few days ago, and
Speaker 3: that is there are a number of possible paths ahead,
Speaker 3: and some of those pasts may well be constructive, meaning
Speaker 3: we avoid a hard landing, we avoid a contraction in
Speaker 3: the economy in the next let's say, six to twelve months,
Speaker 3: and that the hope is indeed aligned with the prayer
Speaker 3: that inflation will continue to come down. There are other paths, though,
Speaker 3: that could involve events that we can even predict. And
Speaker 3: so what I think I would prefer to associate myself
Speaker 3: with in this discussion is the high degree of uncertainty,
Speaker 3: to acknowledge that there are multiple paths and that we
Speaker 3: don't have a high degree of certainty about a particular path.
Speaker 2: Okay, so we're data dependent as we have been. We're
Speaker 2: awfully used to that. But you can feel the shift
Speaker 2: in sentiment here, can't you?
Speaker 4: Mark?
Speaker 5: Does that change your view?
Speaker 3: Well, it's one day's worth of data, but obviously an
Speaker 3: important set of data, you know, and you can concoct
Speaker 3: a variety of paths just from today, For example, the
Speaker 3: payrolls number coming in with a gain of one hundred
Speaker 3: and seventy five thousand jobs. That's a decline of forty
Speaker 3: percent from the previous month's revised number. So you can
Speaker 3: come up with a scenario where that trajectory goes lower
Speaker 3: that we get a much more pronounced slowing in the economy.
Speaker 4: I don't think that's the base.
Speaker 3: Case, but I would say broadly, this is a very
Speaker 3: well balanced report which does take sort of the hot
Speaker 3: plate of porridge out of the choice of three too hot,
Speaker 3: too cold, just right today today alone, and we'll see
Speaker 3: what the next rounds of data bring.
Speaker 2: What are the next rounds that matter to you? Are
Speaker 2: we back to obsessing over CPI or is it the
Speaker 2: jobs report that's kind of leading your view?
Speaker 3: I think we're mostly obsessing about the consumer price index
Speaker 3: over the job's report.
Speaker 4: And that's painful for.
Speaker 3: Me to say, because I've always loved following the employment data.
Speaker 3: But you know, when you're talking about the FED prioritizing
Speaker 3: the part of the mandate with stable prices. Although it's
Speaker 3: interesting to hear Chairman Powell this past week say well,
Speaker 3: perhaps we need to be paying just a bit more
Speaker 3: attention now to maximum employment than we were before. I
Speaker 3: still think the CPI is the star of the show,
Speaker 3: because there was nothing in the statement that led us
Speaker 3: to believe that we're going to be prioritizing the employment side.
Speaker 3: It is that we need greater confidence about coming down
Speaker 3: to that. Heavily talked about two percent target.
Speaker 2: You're looking at average hourly earnings in this report. We've
Speaker 2: been with the n I on inflation watching that number
Speaker 2: carefully of three point nine percent over the past year,
Speaker 2: pay is exceeding inflation, which is a really good thing
Speaker 2: for Joe Biden to say. But how concerning could that
Speaker 2: be if this trend continues, when we consider the possibility
Speaker 2: of a wage spiral, of this starting to become a
Speaker 2: vicious cycle where the Fed needs to worry again.
Speaker 3: Well, I think, first of all, Chairman pal has been
Speaker 3: pretty consistent, and I think the data supports the view
Speaker 3: that the job market has not been the primary cause
Speaker 3: of inflation in the sense of wage growth, leading that
Speaker 3: we know the imbalance between supply and demand broadly, and
Speaker 3: the supply chains really fed that. The war against Ukraine
Speaker 3: as another straw to sort of break that camel's back,
Speaker 3: and we had to decline in the sort of month
Speaker 3: over month annualized look at average hourly earnings. So we're
Speaker 3: not above four percent as were before. We're at thirty nine.
Speaker 3: So I think it's reasonable to expect that with this
Speaker 3: moderation or normalization we have in the job market, that
Speaker 3: we will not have a wage price spiral. We had
Speaker 3: a number of things seasonally occurring at the beginning of
Speaker 3: the year, with twenty two states, dozens of localities raising
Speaker 3: their minimum wages that had to have been affecting the data,
Speaker 3: and we know there were a number of negotiated settlements
Speaker 3: involving unions that also probably lifted some of that.
Speaker 4: So I would look at some of that.
Speaker 3: As being seasonal or temporary, and that would probably be
Speaker 3: consistent with numbers that are not as high going forward.
Speaker 1: Got it.
Speaker 2: We're spending time with Mark Hamrick from Bankrate here on
Speaker 2: Balance of Power, on Bloomberg Radio and on YouTube. If
Speaker 2: you want to find us now, go to YouTube search
Speaker 2: Bloomberg Global News. You'll see Mark Hamrick's palatial office. While
Speaker 2: you're at it mark. What's the most stubborn problem here
Speaker 2: in the inflation conversation. I know you're watching oil it's
Speaker 2: a little bit of a wildcard, but shelter has been
Speaker 2: a real problem here moving forward.
Speaker 5: It just doesn't want to budget well.
Speaker 3: It seems to be services excluding shelter because, as the
Speaker 3: chairman said this week, the rents data has its measure
Speaker 3: doesn't seem to be matching what's happening in the marketplace,
Speaker 3: and so it is expected that as we get essentially
Speaker 3: the shelter part of all this sort of better reflected
Speaker 3: in the data, that the CPI in the shelter component
Speaker 3: as well, services more broadly may behave better. But we know,
Speaker 3: for example, there are all kinds of almost extraordinary things
Speaker 3: going on in the economy that may not relent, and
Speaker 3: I would point to things like the extraordinary increases in
Speaker 3: the cost of car insurance that are caused by a
Speaker 3: number of different factors. With climate change is part of that.
Speaker 3: Some of them are sort of post pandemic impacts of
Speaker 3: people not seeming be able to drive very well anymore,
Speaker 3: but also the sharp rise in car prices and the
Speaker 3: extraordinary costs associated with repairing a car. So obviously still
Speaker 3: on the services side, but we do need to see
Speaker 3: more disinflation resume on the good side, and if we
Speaker 3: can get alignment, you know, for the most part on
Speaker 3: both of those, we might be in a better shape.
Speaker 3: And I think that's sort of the consensus expectation right now.
Speaker 2: I'm glad we could get some time with you today, Mark,
Speaker 2: don't be a stranger. Thanks for joining us on Bloomberg.
Speaker 2: That's Mark Hamrick from bank Rate on this job's Day.
Speaker 2: I'm Joe Matthew at World Headquarters in New York as
Speaker 2: we balance a couple of stories today because in this city,
Speaker 2: Donald Trump.
Speaker 5: Is back in court, and so is Hope Hicks.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast Ken
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Speaker 2: This is a fascinating development here in the criminal trial,
Speaker 2: the former president hush money trial, of course, that's now
Speaker 2: under way. Hope Hicks, one of his closest associates over
Speaker 2: the years, a personal assistant, who was always there to
Speaker 2: take care of Donald Trump, is now testifying against him.
Speaker 2: Speaking as we speak about the day she learned of
Speaker 2: the access Hollywood tapes. Quite remarkable, she said. After getting
Speaker 2: the email about the tape, she went to the twenty
Speaker 2: fifth floor of Trump Tower to talk about it. Donald
Speaker 2: Trump was doing debate prep at that moment in a
Speaker 2: conference room with Jason Miller, Kelly and Conway, Steve Bann
Speaker 2: and Jared Kushner and his no longer friend Chris Christi.
Speaker 2: She verbally explained the email, She said to Trump, and
Speaker 2: the group sought to quote absorb the shock of it unquote.
Speaker 2: We're joined in studio here in New York right now
Speaker 2: in the throes of this conversation by Dave Ehrenberg. Yes,
Speaker 2: the Palm Beach County State Attorney is here and with
Speaker 2: us in studio.
Speaker 5: It's great to see you, sir, what a treatment.
Speaker 6: Great to be back with you.
Speaker 7: Joe.
Speaker 5: Absolutely.
Speaker 2: I don't know what's got you in Manhattan, but we're
Speaker 2: watching this trial unfold here, and I believe you made
Speaker 2: clear already at one point that Hope Hicks could be
Speaker 2: the slam dunk testimony for the prosecution.
Speaker 5: What are we learning so far well.
Speaker 6: At first, she started by saying she doesn't remember being
Speaker 6: in the room where they had that discussion between Pecker,
Speaker 6: Cohen and anyone else in the room at the time.
Speaker 6: I think it was in Trump himself back in August
Speaker 6: twenty fifteen where everything hit the fan. They were trying
Speaker 6: to plan a strategy to suppress these bad stories. Now
Speaker 6: that's trouble that she doesn't remember that. How do you
Speaker 6: not remember being in that meeting? You think you'd remember that.
Speaker 6: She does remember, though, being on a conference call on
Speaker 6: calls with these players. So she's going to help the prosecution,
Speaker 6: but perhaps not as much as a state thought.
Speaker 2: What do they want to hear from her today? When
Speaker 2: is the job done?
Speaker 6: They want to hear corroboration that Trump was part of
Speaker 6: the scheme, and that this scheme was in response to
Speaker 6: the Access Hollywood tape, because after they came out, people
Speaker 6: thought the campaign was doomed and they couldn't afford another
Speaker 6: Stormy Daniels to come out where there was more trash
Speaker 6: about Trump, and so that's why they entered into the
Speaker 6: scheme to influence the election. Because prosecutors have to prove
Speaker 6: that not just there was a falsification of business records,
Speaker 6: but it concealed a campaign finance crime, and that would
Speaker 6: be the felony.
Speaker 2: Is Hope Hicks testimony then more credible than Michael Cohen
Speaker 2: or Stormy Daniels because of her prior relationship with Donald Trump.
Speaker 2: That's been the conventional wisdom.
Speaker 6: Here, prior and current relationship.
Speaker 5: You can are they still close?
Speaker 6: Well, they're not enemies. She has no axigrind. I don't
Speaker 6: know how close they are, but she has no axagrind.
Speaker 6: That's why she's powerful for the state. You see, the
Speaker 6: defense is going to try to discredit Michael Cohen, the
Speaker 6: key witness, by saying, you guys hate each other, Michael
Speaker 6: Cohen has prior felonies, all that stuff. They're going to
Speaker 6: try to discredit David Pecker by saying you're under a
Speaker 6: non prosecution agreement. It's in your incentive to deal with
Speaker 6: the prosecuers and makeup stuff. And they've already tried to
Speaker 6: discredit Davidson, Keith Davidson by saying you're a sleezebag, You
Speaker 6: have sleez bag clients, You travel in this sleazy world
Speaker 6: of paparazzi. Of course Trump travel in that world too,
Speaker 6: but with Hope picks. What do they have? They have
Speaker 6: a loyalist who's trying to do the right thing apparently
Speaker 6: and tell the truth, although sometimes her memory seems to
Speaker 6: be faltering, got it?
Speaker 2: So what does cross examination look like for her?
Speaker 6: Then they're going to try to poke holes in her testimony.
Speaker 6: They're probably going to treat with kid gloves, Yeah, okay,
Speaker 6: And they're going to try to say, you don't remember this,
Speaker 6: you don't remember that, do you?
Speaker 8: Yes?
Speaker 6: And that's where they'll try to say, like, you know,
Speaker 6: you can't rely on her to corroborate Michael Cohen when
Speaker 6: she doesn't remember a lot of these specifics.
Speaker 2: How about that there's a gag order ruling that we're
Speaker 2: waiting for a second gag order ruling as well. Four
Speaker 2: more violations alleged the hearing yesterday. Does that mean another
Speaker 2: four thousand dollars which Donald Trump would probably write at
Speaker 2: dinner anyway.
Speaker 6: Yeah, it's pocket change for him, you know, as long
Speaker 6: as they're going to find him, and they're pretty limited
Speaker 6: to how much they can find him. They've got the
Speaker 6: statute for one thousand dollars per violation, and Dug Mashawan
Speaker 6: is stuck. If he really wants to ratchet it up.
Speaker 6: He could put him in time out. They have like
Speaker 6: a little holding cell inside that courtroom inside the Yeah,
Speaker 6: I don't think they'll go to that. I mean, but
Speaker 6: maybe there's no way he's going to be incarcerated pre trial.
Speaker 6: But could he be put in a room to sit
Speaker 6: there for a few hourly?
Speaker 4: Do that?
Speaker 2: Though he's got the authority to do it. The Secret
Speaker 2: Service would have to have some kind of a sidebar, right,
Speaker 2: how would that work?
Speaker 6: And they could just put him in a room by.
Speaker 5: Himself, give him an office and shut the door. Yeah, right,
Speaker 5: time out.
Speaker 6: That'll teach you. Yeah, yeah, So you know, he should
Speaker 6: be treated like everyone else. In my mind, I mean,
Speaker 6: if you violate a court's gag order, you should be sanctioned.
Speaker 6: Defendants in my courthouse, if they criticize the judge or
Speaker 6: witnesses yours, yeah you're done?
Speaker 5: What done? You go to jail?
Speaker 9: Or?
Speaker 2: I mean what if Joe Matthew was standing in there
Speaker 2: and I said that, you know, this guy's a sleezbag
Speaker 2: and did all of that stuff?
Speaker 5: Is there a first warning? I get it. Do I
Speaker 5: start with a fine? Or would you actually lock me up?
Speaker 10: Now?
Speaker 6: They would start with a fine, and they'd a strong warning.
Speaker 6: If you continue to do it, you would be wearing.
Speaker 2: Ten to what now, fifteen violations that would be in jail.
Speaker 6: Yeah, they'd fit you with some steel bracelets.
Speaker 2: Okay, great, I mean, you know, we do need to
Speaker 2: ask these questions, particularly as he talks about the weaponization
Speaker 2: of the justice system, when he is in fact being
Speaker 2: treated better than anyone else would be.
Speaker 6: His supporters say that there's a two tier system of justice.
Speaker 6: I would agree, but not in the way they're thinking.
Speaker 6: I think he's being treated better. And the other defendant
Speaker 6: who did this continually and intentionally violated the courts gag
Speaker 6: order and went after the judge and his daughter, Oh yeah,
Speaker 6: I mean they'd be picking up trash on the side
Speaker 6: of the highway.
Speaker 2: There seems to be a feeling, based on smarter minds
Speaker 2: than mine who come on this program, that this trial
Speaker 2: is not going to need six to eight weeks. We're
Speaker 2: moving along here. What do you think of the timeline
Speaker 2: at this point.
Speaker 6: Judge Marshan is a no nonsense judge. She's moving things along.
Speaker 6: It is pretty telling when Trump was complaining that he
Speaker 6: can't be on the campaign trail because of this. This
Speaker 6: is this is not right. But on the same time
Speaker 6: he's also complaining how quickly the trial is going. So
Speaker 6: you know, whatever it is, it's grievance on both sides.
Speaker 6: Too fast, too slow, it's too cold in the court room.
Speaker 6: Whatever it is, he's being treated unfairly. Bottom line is
Speaker 6: judge's matter, and Judge Murshan wants this thing to get
Speaker 6: finished sooner than later, and it will.
Speaker 2: You know, he made clear yesterday on truth Social that
Speaker 2: he's not been sleeping. Did you see that in the courtroom?
Speaker 5: He said he was like.
Speaker 2: He's closing his beautiful blue eyes.
Speaker 5: Yes, it's taking it all in very poetic.
Speaker 6: You know, he's got to keep up with images, right,
Speaker 6: he's the alpha male, and alpha males don't fall asleep
Speaker 6: during testimony, especially when he's calling the current president's sleepy Joe.
Speaker 6: You can't use that, Moniker if you're falling asleep while
Speaker 6: you're at your own trial.
Speaker 2: I think I heard sleepy done at the White House
Speaker 2: course Bonds dinner, right, that's already out there now.
Speaker 6: Yes, I didn't know he had blew lies by the way.
Speaker 5: He didn't.
Speaker 6: No, I didn't pay that close attention.
Speaker 5: Well, I think he said they're beautiful.
Speaker 6: He did say they're beautiful blue eyes.
Speaker 2: Yeah, so maybe he'll be out of this thing sooner
Speaker 2: than he thinks. At what point when this trial, when
Speaker 2: the testimony resumes, how long will we wait for this
Speaker 2: to go to the jury.
Speaker 5: What's that process going to be like?
Speaker 6: After the testimony is over, you'll have closing arguments and
Speaker 6: then it goes to the jury right after the judge
Speaker 6: reads the jury instructions, and then we'll see if you
Speaker 6: can get a unanimous twelve member jury to agree on
Speaker 6: a verdict. It could be a hung jury, and I
Speaker 6: do think though it's very unlikely to be an acquittal.
Speaker 6: The evidence that I've seen, the witnesses i've seen him
Speaker 6: been pretty powerful. So if I had a guess, I
Speaker 6: would say this is headed towards a conviction. Now. I
Speaker 6: don't think he's going to serve any prison time for this.
Speaker 6: I think he gets probation or maybe house arrests at most,
Speaker 6: but he'll appeal whatever the final vertical will be.
Speaker 2: Anyways, if he's found guilty, though, and he's brought in,
Speaker 2: he's brought into the courthouse for all of that stuff
Speaker 2: there he is, he's going to end up in a
Speaker 2: room at some point that day, right, I mean, what
Speaker 2: happens if he's found guilty and he's not given jail time.
Speaker 2: Does he just walk out of there and get in
Speaker 2: the suv or there's still going to be a long
Speaker 2: day for him to do whatever is done with the
Speaker 2: paperwork at the rest of it.
Speaker 6: Yeah, he'll get processed, but he'll leave, He'll go home.
Speaker 6: He's not going to be remanded to back into a
Speaker 6: jail cell. And then he'll come back for sentencing, which
Speaker 6: could take place a month later. And then the sentencing
Speaker 6: I think will will not force him into jail. And
Speaker 6: even if they did say your sentence includes incarceration, he
Speaker 6: will appeal and then the appeals will last well beyond
Speaker 6: the election.
Speaker 5: I got it.
Speaker 9: You're going to the courthouse now I'm flying home, okay. Yeah, man,
Speaker 9: going back party in Palm Beach this week, and you
Speaker 9: heard about that, right. Did you get invited, Marla, A
Speaker 9: big Deep Steaks party.
Speaker 6: Yeah, But somehow my invitation I think was.
Speaker 2: Awso the man, I think it's is it in Hollywood floor, No,
Speaker 2: it's in Palm Beach.
Speaker 5: I didn't get mine either.
Speaker 4: Yeah.
Speaker 6: Also, I'm not eligible to be VP because if you
Speaker 6: come from the same state. Your electoral votes in Florida
Speaker 6: will be tossed.
Speaker 5: Marco Rubio is going to move to another state, is
Speaker 5: what I heard?
Speaker 6: Yeah, Yes, Marco Rubio is the VP nominee. I will
Speaker 6: eat my ID badge that they gave me today at Bloomberg.
Speaker 2: If you're with us on YouTube, you see still he's
Speaker 2: got the coolest pin in the room. Someday I want
Speaker 2: one of those with the badge. Dave Ehrenberg, Palm Beach
Speaker 2: County State Attorney, a great help to us getting through
Speaker 2: this legal saga. And it's great to see you in person.
Speaker 2: Dave here in New York at home safe. I'm Joe
Speaker 2: Matthew at World Headquarters. This is balance of power. As
Speaker 2: we add the voice of Tim O'Brien, What a perfect
Speaker 2: day to have the senior executive editor of Bloomberg Opinion,
Speaker 2: who of course wrote the book on Donald Trump. And Tim,
Speaker 2: it's great to see you, welcome back. What is it
Speaker 2: like for Donald Trump to see loyalists like Hope Hicks
Speaker 2: sit on the stand today.
Speaker 11: Well, I think he has to weigh whether people who
Speaker 11: have traditionally been loyalists Joe are willing to sacrifice themselves
Speaker 11: to someone who's always ed loyalty as a one way street,
Speaker 11: and there are a lot of people around whom are
Speaker 11: loyal to him, but they haven't been tested in a
Speaker 11: court room. And I think one of the complications for
Speaker 11: Hope Picks is she doesn't want to perjure herself in
Speaker 11: this trial.
Speaker 4: She really has nothing at stake.
Speaker 11: Because she was a message bearer for Donald Trump. But
Speaker 11: if she lied about things she knew about his relationship
Speaker 11: with either of the women, and there's there's material evidence
Speaker 11: that maybe what she said publicly was at odds with
Speaker 11: what was an email or other people witnessed, I think
Speaker 11: that she'll probably not want a toy with that reality
Speaker 11: and run into deeper trouble simply in the interests of
Speaker 11: being loyal to Donald Trump. So I assume she's speaking
Speaker 11: her mind up there. I've been following it. I was
Speaker 11: in the courtroom yesterday. I wasn't there today, and I'm
Speaker 11: following her testimony right now at a distance, and she
Speaker 11: seems to be preceding apace, and I have to believe
Speaker 11: that that absolutely ranked as Donald Trump.
Speaker 2: Did you say you there yesterday, Tim, Yeah, I've gone on.
Speaker 11: I've been I've been at the courthouse several times. Now, yeah,
Speaker 11: and I was there yesterday.
Speaker 2: Well, take me into the courtroom, especially with your view,
Speaker 2: what are you seeing that.
Speaker 11: The first thing to recognize, Joe is this is you know,
Speaker 11: this is the criminal court of the New York State
Speaker 11: Supreme Court, and both the civil and criminal branches of
Speaker 11: the court are very bonfire of the vanities, venues populated
Speaker 11: by judges with lots of different personalities, and lots of
Speaker 11: cases have historically moved through those courtrooms that involve powerful
Speaker 11: names in New York and scandalous comings and goings, and
Speaker 11: this is probably one of the most epic cases in
Speaker 11: that context to ever roll through there. And there's a
Speaker 11: huge media gaggle every day. There are no Trump supporters
Speaker 11: at all. He's been saying people are outside protesting with
Speaker 11: It's speak, and virtually like the only guy out there
Speaker 11: is a troubled man with a large bell and a
Speaker 11: cross and some verbies about Trump on his T shirt,
Speaker 11: walking around the park every morning, rigging his bell, starting
Speaker 11: at about seven am, which is typically when I get there. Yeah,
Speaker 11: reporters are shepherded in. There's a main courtroom where some
Speaker 11: of our Bloomberg reporters are, and then there's a joint
Speaker 11: overflow room, and I've been in the overflow room.
Speaker 2: So you haven't made eye contact with him yet.
Speaker 11: No, I have not made eye contact with Donald Trump.
Speaker 11: I'm trying to, you know, I don't know the last time.
Speaker 11: The last time he and I ran into each other
Speaker 11: was at a White House correspondence dinner, the famous one
Speaker 11: where Obama.
Speaker 5: That was a fateful night for our nation.
Speaker 11: If yeah, yeah, if we're to believe that that's when
Speaker 11: Donald Trump decided to make a comeback.
Speaker 4: But I think these other things were at work.
Speaker 2: Yeah, if he gets elected, is the White House correspondents
Speaker 2: dinner back on ice?
Speaker 11: You know, I imagine it is. He has always hated
Speaker 11: black tie events. He famously reporters. He loves reporters. He
Speaker 11: hates bad coverage. He's a media addict. But he authentically
Speaker 11: hates charitable events and black tie events. And you know,
Speaker 11: Manhattan real estate it's lifeblood. Are these fundraisers that the
Speaker 11: elite of the real estate community go to. And I
Speaker 11: used to talk to him. I asked him a number
Speaker 11: of times, why don't.
Speaker 4: You go to these? And I hate those things.
Speaker 11: You wouldn't find me dead in a black eye and
Speaker 11: then in very blue language. He described me what he'd
Speaker 11: rather be doing on a Saturday night that I can't
Speaker 11: share on your radio show.
Speaker 4: Okay, but I think he'd want.
Speaker 11: Nothing to do with the White House Correspondence Center generally.
Speaker 2: Is this wearing on him or is he emboldened by
Speaker 2: being in court four days a week.
Speaker 11: I think the answer is yes to both of those questions,
Speaker 11: but for different reasons. It is absolutely wearing a Donald
Speaker 11: Trump is aged so significantly even since I think twenty
Speaker 11: twenty two, but certainly since twenty twenty, and definitely since
Speaker 11: twenty sixteen. He's a little more hunched over. His hair
Speaker 11: is getting harder to paste in an effective peekaboo way
Speaker 11: on the top of his head. His eyes are pouchy
Speaker 11: and red. He is tired, as we know. He's nodding
Speaker 11: off or at least going into some fugue state of
Speaker 11: meditation during the court proceedings, and he hates being there.
Speaker 4: He's not in control of the script.
Speaker 11: This is the worst reality TV show a reality TV
Speaker 11: star could ever participate in, and he can't control the proceedings.
Speaker 11: So yeah, and he doesn't want to go to jail
Speaker 11: for whatever bravado he puts out there. People close sum
Speaker 11: have said he does not want to go to jail.
Speaker 11: The testimony in this case. He had a porn star
Speaker 11: into the front office of the Trump organization, which is
Speaker 11: on the twenty sixth floor of Trump Tower, and his
Speaker 11: residence where his wife was nursing their four month old child,
Speaker 11: barn is about thirty floors above that. I don't know
Speaker 11: that he wants any of that out in the public,
Speaker 11: and it's there now. Oh no, he doesn't like this.
Speaker 11: On the other hand, I think he also is happy
Speaker 11: to use it as a venue to make his case
Speaker 11: that he's a victim and he's being unfairly prosecuted.
Speaker 2: I'm really glad you could join us today. I didn't
Speaker 2: realize it was your day off of court. Tim, thank
Speaker 2: you for being there for us as you bring your
Speaker 2: thoughts to Bloomberg Opinion. Find him on the terminal OPI
Speaker 2: and go or at Bloomberg dot com. Tim O'Brien, Bloomberg
Speaker 2: Opinion Senior executive editor, who, as I mentioned, wrote the
Speaker 2: book on Donald Trump, and it's great to get his
Speaker 2: view here on social media. The former president quote, contrary
Speaker 2: to the fake news media, I don't fall asleep during
Speaker 2: the crooked DA's witch hunt, especially not today. I simply
Speaker 2: close my beautiful blue eyes, sometimes listen intensely and take
Speaker 2: it all in kind of like here.
Speaker 5: On Bloomberg Radio.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast Ketch
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Speaker 2: Following the release of this job's report, the headline says,
Speaker 2: at all US jobs post smallest gain in six months
Speaker 2: as unemployment rises. We got reaction earlier today on Bloomberg
Speaker 2: TV and Radio from the Acting Labor Secretary Julie Sue.
Speaker 12: Here, she is wage gains continue to outpace inflation. That
Speaker 12: means that there's more money in workers' pockets. This is obviously,
Speaker 12: as you say, this is a sign of how good
Speaker 12: people feel, and a good job changes lives, and a
Speaker 12: good jobs with wages that are enough to sustain a
Speaker 12: family are really important, and we continue to combat inflation
Speaker 12: and high prices.
Speaker 13: Reaction from the Labor Department today. Now, let's get reaction
Speaker 13: from the White House. Joining us now from the North
Speaker 13: Lawn on Bloomberg TV. And radio is Heather Bousche, member
Speaker 13: of the Council of Economic Advisors. Heather, thank you so
Speaker 13: much for being here on Bloomberg. Obviously, while we did
Speaker 13: see some softening, perhaps it is not all too unexpected.
Speaker 13: The fact of the matter remains, though, that employment is
Speaker 13: something of a lagging indicator. If we're starting to see
Speaker 13: the softness show up in a more material way, now,
Speaker 13: where do you expect that we will be by November?
Speaker 8: Well, today's report is really good news. You know, the
Speaker 8: Secretary talk the Acting Secretary talked about it. You know,
Speaker 8: we have seen this unemployment rate below four percent for
Speaker 8: whopping twenty seven months. That's the longest stretch going back
Speaker 8: over half a century. And we don't see a lot
Speaker 8: of signs of softening. When you dig under the hood
Speaker 8: you look at the report. For example, we've seen that
Speaker 8: for women who are between the ages of twenty five
Speaker 8: and fifty four, so the working age population, their labor
Speaker 8: force participation and their employment rates have hit serious high
Speaker 8: going back to nineteen forty eight when Rosie the Riveter
Speaker 8: went home. And of course we also saw the block
Speaker 8: unemployment rate fall last month. So when you dig in,
Speaker 8: you actually see signs of people coming back into the
Speaker 8: labor force. You see, you know, a strong labor market
Speaker 8: overall at that steady pace that we need to see
Speaker 8: at this point in the economic recovery.
Speaker 2: So slow and steady have been the magic words from
Speaker 2: you from the get go, Heather, As we've been talking
Speaker 2: about this since the very start of this administration, as
Speaker 2: we consider the idea of a soft landing, is this
Speaker 2: actually more the definition of stable growth?
Speaker 8: This is what you want to see at this point
Speaker 8: in recovery. You know, our analysis at the Council of
Speaker 8: Economic Advisors is that you need about one hundred thousand
Speaker 8: jobs per month just to keep pace with population growth.
Speaker 8: And at one hundred and seventy five thousand, you know,
Speaker 8: in two hundred and forty some one thousand over the
Speaker 8: past three months, we are certainly above that basic pace.
Speaker 8: And you know, we continue to see healthy gains in wages.
Speaker 8: They've been abating in recent months, but certainly you see
Speaker 8: those steady gains and particularly those stronger gains for the
Speaker 8: bottom eighty percent of the labor market that are production
Speaker 8: and non supervisory employees. These are the kinds of gains
Speaker 8: that we want to see month after month, people being
Speaker 8: able to go out there and get a job. That
Speaker 8: low unemployment rate, those jobs that are being available but
Speaker 8: yet not so hot that it's overheating the economy.
Speaker 13: Well, how they're speaking of what we've seen month over month,
Speaker 13: as you alluded to the statistic twenty seven months in
Speaker 13: a row with an unemployment rate below four percent. When
Speaker 13: you're modeling out what's going to happen to unemployment as
Speaker 13: we move forward, when are we going to be breaking
Speaker 13: above that four percent level.
Speaker 8: Well, I'd like to see us break the next record
Speaker 8: in that streak going so it's not just going back
Speaker 8: for more than fifty years, but going back more than that.
Speaker 8: You know, certainly, you know the president's goal from day
Speaker 8: one was to get people back to work, keep that
Speaker 8: unemployment rate low. That is what helps boost wages across
Speaker 8: the country, makes it easy for folks who are out
Speaker 8: there who want a job to get into the labor market,
Speaker 8: to find that work, to switch jobs, and so we
Speaker 8: certainly want to see that unemployment rate kept in that
Speaker 8: low space. It's one of the goals of what we
Speaker 8: mean by a strong, stable jobs recovery. And I just
Speaker 8: want to emphasize that one of the things that we've
Speaker 8: seen that I think has been really impressive in this recovery,
Speaker 8: of course, has been that we've hit these historic lows
Speaker 8: for black unemployment rate in the gap in the unemployment
Speaker 8: rate across states. We aren't at those lows right this month,
Speaker 8: but we have seen those, you know, over the past year,
Speaker 8: and being able to see this kind of recovery that's
Speaker 8: giving so much opportunity to people all across the country
Speaker 8: in a way that is equitable and is reaching into
Speaker 8: pockets of the economy that this is exactly what the
Speaker 8: President wants to see. It's good for the American people.
Speaker 13: Well, Heather, I fully understand that the President would like
Speaker 13: to see unemployment remaining below four percent. Is just a
Speaker 13: question of whether or not that's going to continue to
Speaker 13: be realistic if we're talking about policy that is still
Speaker 13: tight and the lagged effects of the tightening that we've
Speaker 13: seen starting to kick in more substantially. I just wonder
Speaker 13: if realistically you think unemployment can stay this low, still
Speaker 13: remain this high for much longer.
Speaker 8: Well, you know, I cannot comment on FED policy, which
Speaker 8: I think is implicit in this question. I think you know,
Speaker 8: what we are looking to see is the President has
Speaker 8: made all of these investments all across the United States,
Speaker 8: investments in infrastructure, investments in new technology and manufacturing and
Speaker 8: good jobs, and we are still seeing those play out.
Speaker 8: We have had these very high numbers for investment, investment
Speaker 8: in the construction of new manufacturing facilities.
Speaker 4: We are seeing.
Speaker 8: Shovels in the ground for all these infrastructure projects, and
Speaker 8: so I remain optimistic that as we see this recovery progress,
Speaker 8: we'll be able to keep this kind of steady job gains.
Speaker 8: We've been able to deliver this for years now, and
Speaker 8: this is the economy. It's been a little engine that could.
Speaker 8: But we have a lot of you know, investment that
Speaker 8: still has yet to come, and hopefully that will give
Speaker 8: some strength to the labor market. And we're starting from
Speaker 8: very solid foundation here.
Speaker 2: Spending time with Heather Bouchet, who's talking with us live
Speaker 2: from the White House on Bloomberg TV and Radio. Heather,
Speaker 2: we started the program with a special con with the
Speaker 2: former Saint Louis FED President Jim Bullard. By the way,
Speaker 2: this is not a question about FED policy, don't worry,
Speaker 2: but he did say that a soft landing for the
Speaker 2: US economy is in view. Do you agree at this point?
Speaker 2: Is it already happening. Is this the type of report
Speaker 2: that confirms that.
Speaker 8: Well, you know, as we have seen month after month,
Speaker 8: and I've talked to you and you know, folks around
Speaker 8: the country about this, this is that kind of stable growth,
Speaker 8: you know, a soft landing implies, you know that we
Speaker 8: already know exactly what's happened, that it's in the rear
Speaker 8: view mirror, but we're living this in real time. So
Speaker 8: I think that you know, as we watch the data
Speaker 8: as we always do, this is the kind of the
Speaker 8: recovery we want to see. And you know, of course,
Speaker 8: on top of it, you know, we have seen that
Speaker 8: you know, prices have come down sixty percent from their peak.
Speaker 8: We've actually seen over the past year the prices for
Speaker 8: some goods facing consumers like milk and eggs and used
Speaker 8: cars and airline fares, you know, those are lower than
Speaker 8: they were a year ago. So we have seen some
Speaker 8: relief for families over time. And I think combined, this
Speaker 8: is the kind of you know, trying to find that
Speaker 8: sweet spot where you can keep growing and you keep
Speaker 8: adding jobs and you keep making sure that workers receive
Speaker 8: their fair pay.
Speaker 13: Heather, we were speaking earlier this week with someone from
Speaker 13: the groundwork collaborative. It used to work alongside Elizabeth Warren
Speaker 13: when we were talking about the way that FED policy,
Speaker 13: which I won't ask you to comment on directly what
Speaker 13: the Fed should do with this policy, but the way
Speaker 13: that it is transmitting in the economy. Now that we
Speaker 13: have seen something of a stagnation in progress in getting
Speaker 13: inflation down, it bears questioning whether or not actually just
Speaker 13: pure interest rate policy is going to be able to
Speaker 13: get us that last mile down to two percent or
Speaker 13: is it going to take something else, like more action
Speaker 13: from this administration.
Speaker 8: Well, you know, this president has remained committed to lowering
Speaker 8: you know, pain points for families in terms of prices
Speaker 8: across the economy, is taking a series of steps, you know,
Speaker 8: a series of steps for example on junk fees, you know,
Speaker 8: making it possible for you know, consumers to not face
Speaker 8: those fees that just add up those hidden fate those
Speaker 8: hidden fees. You know. I often think of, you know,
Speaker 8: what the Consumer Financial Protection Bureau is done with credit
Speaker 8: card fees for consumers. But that's just one example of
Speaker 8: the variety of the ways that the President is focused
Speaker 8: on lowering prices. Name about what he's done to lower
Speaker 8: prescription drug prices, lower the price of insulin, lower the
Speaker 8: price of health care for families. You know, all of
Speaker 8: this adds up and gives relief to families pocketbooks. The
Speaker 8: President has been focused on creating these jobs and you
Speaker 8: addressing real problems facing families all across the country.
Speaker 2: Heather, it's hard to underscore the impact that immigration is
Speaker 2: having on our job market right now. It's born out
Speaker 2: in the numbers, and I wonder to what extent the
Speaker 2: White House will make the case in the coming months,
Speaker 2: in the coming days that immigration is an important driver
Speaker 2: of our job market and is in fact having an
Speaker 2: impact potentially for the better on inflation.
Speaker 8: How would you answer that, Well, you know, the President
Speaker 8: came into office, he had an immigration plan that he
Speaker 8: released on day one. You know, he has worked to
Speaker 8: find sensible solutions here. You know, certainly, what we want
Speaker 8: to see in the labor market is you want to
Speaker 8: see those folks who are on the sidelines, who want
Speaker 8: to get into the labor force, you know, get access
Speaker 8: to those jobs. It's why I point into the fact
Speaker 8: that you have this historic high and labor force participation
Speaker 8: among women between the ages of twenty five to fifty four,
Speaker 8: and you've seen good numbers on labor force participation. More generally,
Speaker 8: that's people coming into the labor market seeing those those
Speaker 8: economic opportunities.
Speaker 2: Heather Bouchet of the White House Council of Economic Advisors
Speaker 2: with us live from the North Lawn at the White House. Heather,
Speaker 2: it's great to see you. Thanks for coming back to
Speaker 2: talk to us today on balance of power. I'm Joe
Speaker 2: Matthew in New York. Kayley Lines is in Washington, and Kayley,
Speaker 2: it's just a remarkable reminder on what a difference a
Speaker 2: single day's data could make on sentiment, if not infestrates themselves.
Speaker 13: Yeah, I mean, think about the round trip we have
Speaker 13: made in terms of expectations for FED cuts, which Heather
Speaker 13: Bouche would not talk to us about. We started the
Speaker 13: year thinking the Fed might cut up to six times,
Speaker 13: then we were down to one cut. It seems that
Speaker 13: we're pricing more of them back in on what many
Speaker 13: are saying is of Goldilock's jobs report. And we know,
Speaker 13: Joe that President Biden is standing by his prediction last
Speaker 13: we heard that there will be rate cuts this year.
Speaker 2: Well, he may seem pressient at this point, and we
Speaker 2: all know this has a direct impact to what is
Speaker 2: happening on the campaign trail, and where we're going to be, say,
Speaker 2: post Labor Day, when people really start paying attention, Kaylee.
Speaker 2: Young people who are actually watching interest rates with hopes
Speaker 2: to buy their first home, people who are of course
Speaker 2: looking at the gas pump every time they need to
Speaker 2: fill up their car. All of that's going to really
Speaker 2: start combining and colliding into people making opinions that are
Speaker 2: going to last until November. So they are hoping, no
Speaker 2: matter what they can say or not say about the FED,
Speaker 2: they're hoping that cuts are coming.
Speaker 14: Yeah.
Speaker 13: Absolutely, it's going to make a difference the timing of
Speaker 13: those cuts. And of course we heard from Chairman Powell
Speaker 13: in the press conference earlier this week saying they don't
Speaker 13: think about the political context at all. So all the
Speaker 13: market expectation that be hard to cut in September just
Speaker 13: ahead of the election or November just after it, maybe
Speaker 13: that is a not so much the case if you're
Speaker 13: actually sitting on the FMC.
Speaker 5: That's right.
Speaker 2: Let's assemble the panel to get their take on another
Speaker 2: important news day. Genie Schanzano was with us, of course,
Speaker 2: Bloomberg Politics contributor Democratic Analysts joined today by Republican strategist
Speaker 2: Lisa Camuso Milner, the former RNC communications director at host
Speaker 2: of the Friday Reporter podcast, What's to take here? Genie,
Speaker 2: Goldilocks is a word we keep throwing around. The fact
Speaker 2: of the matter is a slowing job market, not exactly.
Speaker 2: The greatest story for the White House to be telling
Speaker 2: is exactly what they want, isn't it.
Speaker 10: It absolutely is, And I think you could hear it
Speaker 10: in both your great interview with Heather Bouche and the
Speaker 10: and you know Julie Sue's comments. You can hear they
Speaker 10: are elated by this report. It is all good news.
Speaker 10: I mean it was only you know, just a few
Speaker 10: days ago people were saying we wouldn't see a cut
Speaker 10: until after the election. Now the possibility it may come
Speaker 10: earlier has opened up. So that is all good news
Speaker 10: for the White House. From a campaign perspective, I think
Speaker 10: the Biden campaign, and I know they will, has to
Speaker 10: keep their eye on the ball. You cannot tell people
Speaker 10: about good numbers. That is not going to work. So yes,
Speaker 10: you know, all of his supporters and everything else they
Speaker 10: know these numbers are good. But for the people on
Speaker 10: the ground in these key seven states, this is more
Speaker 10: about talking about what Donald Trump has said CNBC. He
Speaker 10: says he's going to cut Social Security. That has to
Speaker 10: go out. They have to be focusing on the threat
Speaker 10: Donald Trump is to the economy, not trying to sell
Speaker 10: Joe Biden's accomplishments. Let the data speak for itself and
Speaker 10: talk about the threat that is looming if people vote
Speaker 10: for Donald Trump. Rather, that's the campaign strategy.
Speaker 13: Well, certainly, when the data was looking better than it
Speaker 13: is now, when we were talking of payrolls growth north
Speaker 13: of three hundred thousand plus, he still wasn't getting credit
Speaker 13: for the economy. So I understand that sentiment. Genie, does
Speaker 13: that mean, Lisa? For Republicans, the economy is going to
Speaker 13: be the best issue. If Biden can't talk about it,
Speaker 13: or talk about it well enough, frame it well enough
Speaker 13: for voters to actually give him credit for it, then
Speaker 13: that's all opportunity to the other side.
Speaker 15: Absolutely, Kelly. I mean, I think more than anything, Genie
Speaker 15: took the words right out of my mouth. I mean,
Speaker 15: regardless of how good the numbers are, you can't tell
Speaker 15: people how the economy is performing if they don't feel
Speaker 15: that way. And so that's why we talk about consumer sentiment.
Speaker 15: And we talk about a variety of other things, because.
Speaker 16: That's really the way that people approach election day, right,
Speaker 16: So Republicans will be doing everything they can to define
Speaker 16: and continue to define this White House is not being
Speaker 16: good on the economy, even though the data says otherwise.
Speaker 6: And so this is the word.
Speaker 16: This is the word verse word.
Speaker 15: Game that's going to happen between now and November in
Speaker 15: a way that's going to get harder and more difficult
Speaker 15: to navigate. So sure, in the playbook for Republicans, it's
Speaker 15: to talk about how Joe Biden's not great for the economy.
Speaker 15: And in the playbook for the Democrats, they're going to
Speaker 15: do the same and talk about how Donald Trump is
Speaker 15: not doing what they need to excuse me, would not
Speaker 15: do what he needs to do in order to continue
Speaker 15: to grow it.
Speaker 2: Let's distill this conversation into a simple question. Jennie Shan say, noh,
Speaker 2: does Joe Biden need interest rate cuts to win reelection?
Speaker 10: You know, they would be amazing, Joe Matthew, that would
Speaker 10: be great. He's hoping for them. You know, he would
Speaker 10: probably tell you he doesn't need them, he can't control them.
Speaker 10: The economy, of course, is gonna matter. But again, there
Speaker 10: is no majority out there just so excited to vote
Speaker 10: for Joe Biden. So the way they have to frame
Speaker 10: this electorally is Donald Trump the threat to everything Joe
Speaker 10: Biden has achieved. And you know, it's hard for us
Speaker 10: not to talk about our own individual accomplishments, which is
Speaker 10: what this campaign wants to do. And Joe Biden, look,
Speaker 10: I did this, this, and this, stop it. Don't talk
Speaker 10: about what you've done, talk about what the other guy
Speaker 10: will do. You're the incumbent. This is a referendum on you.
Speaker 10: He is a threat to what you've achieved. But you've
Speaker 10: got to stop talking about achievements and focus on threat.
Speaker 10: There's no plainer way to say it. And they have
Speaker 10: the benefit of it, you know, having an opponent who
Speaker 10: should keep his mouth shut and let the attention be
Speaker 10: on Joe Biden, but always wants to talk about himself.
Speaker 10: So let him.
Speaker 13: And of course he's in court again today. We'll probably
Speaker 13: hear from him as he's walking out at the end
Speaker 13: of the proceedings today. As usual, Genie Shanzo and Lisa
Speaker 13: Caamusa Miller will be sticking with us. We have much
Speaker 13: more to discuss with them, including Joe another big problem
Speaker 13: for President Biden. The economy is not the only issue
Speaker 13: on the list for this incumbent president. Increasingly it is
Speaker 13: his policy toward Israel and the ramifications of that, including
Speaker 13: what we have seen playing out on college campuses across
Speaker 13: the country.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens
Speaker 1: just Live weekdays at noon Eastern on Apple car Play
Speaker 1: and then roud Oro with the Bloomberg Business app. You
Speaker 1: can also listen live on Amazon Alexa from our flagship
Speaker 1: New York station, Just Say Alexa Play Bloomberg eleven thirty.
Speaker 2: I'm Jill Matthew in New York. Kaylee Lines is in Washington.
Speaker 2: Coming up, We're going to spend some time with Jessica
Speaker 2: Kavanaugh of the Carnegie Endowment for International Peace with the
Speaker 2: latest and a potential cease fire between Israel and Hamas
Speaker 2: right now. It's a pleasure, though, to bring in my
Speaker 2: colleague here in New York, Anne Marie hor Durn, with
Speaker 2: an important conversation we've been looking forward to. A Member
Speaker 2: of Parliament is with us here at World Headquarters. Alex
Speaker 2: Berghardt and Anne Marie will hand things over to you.
Speaker 14: Thank you so much. Joe, that's right. I'm joined by
Speaker 14: Alex Burghart, UK Cabinet Office Minister leading on AI in
Speaker 14: the public sector. I want to start out with your
Speaker 14: role in artificial intelligence. This role wouldn't exist even as
Speaker 14: two or three years ago, and need to live in
Speaker 14: the United Kingdom. We've seen this government, led by the
Speaker 14: Prime Minister Rishi Sunac really want to invest and hone
Speaker 14: AI even within the government. I know you're in the
Speaker 14: beta mode of this red box. Tell us a little
Speaker 14: bit about what you're doing, what you're focused on, and
Speaker 14: how the government could potentially harness this.
Speaker 17: Thanks Am Marie, thank you for having me on and
Speaker 17: it's great to be in New York to talk about
Speaker 17: the work we're doing in the UK government at the moment.
Speaker 17: As you said, the Prime Minister is really passionate about AI.
Speaker 17: We held the first AI safety summit that the world
Speaker 17: has seen last year, very very productive. But the work
Speaker 17: that I'm doing is on how we can deploy AI
Speaker 17: for the public good and that means how we can
Speaker 17: You know, it's about eighteen months ago we sat down
Speaker 17: and said this new technology is emerging potentially one of
Speaker 17: the great leaps forward. How are we going to harness
Speaker 17: it to improve the quality of public services and drive
Speaker 17: down costs for the taxpayer. And there's a number of
Speaker 17: ways in which that's emerging. And the first is that
Speaker 17: you can now automate tasks like never before. And I
Speaker 17: have you mentioned Red Box, which is named after the
Speaker 17: you know, the red ministerial box that British ministers carry around.
Speaker 14: I still hope they'll do that for show and the Yeah.
Speaker 5: Absolutely.
Speaker 17: But what we now have we've been building as a
Speaker 17: tool that can summarize huge documents very very quickly, that
Speaker 17: can relate them to what's been going on in Parliament,
Speaker 17: what's been going on in the press, and can pull
Speaker 17: out kind of key points that ministers need to focus on.
Speaker 17: And that's saving my private office hundreds of hours. But
Speaker 17: it's also starting to build a tool that is going
Speaker 17: to create institutional memory, recreate institutional memory in our government department.
Speaker 17: So you know, when we're starting out on a project,
Speaker 17: we'll be able to ask, have we tried something like
Speaker 17: this before? Why didn't we carry on with it? You
Speaker 17: know what was good about it? So that huge resource
Speaker 17: of documentation that's currently lying unused in government is going
Speaker 17: to come back into play.
Speaker 14: So two questions immediately come to mind. One talent and
Speaker 14: the other security. Let's start with talent first. If you
Speaker 14: work in AI, you can get paid handsomely going to
Speaker 14: say open AI. How do you attract that talent to say,
Speaker 14: come work as a civil servant.
Speaker 17: It's a great question. We were really worried about this
Speaker 17: at the start because we can't pay that money. And
Speaker 17: you know, I've got a really great head of the program,
Speaker 17: Laura Gilbert, who's out in New York with me at
Speaker 17: the moment, and she said, as long as we can
Speaker 17: pay something bit more than we pay our normal civil servants.
Speaker 17: What we have is data. We have really good data,
Speaker 17: lots of centralized data. And if you are an AI addict,
Speaker 17: if you're one of these super smart, crazy clever people
Speaker 17: who wants to get involved, the thing you want to
Speaker 17: play with is data. And so we've we've been looking
Speaker 17: at huge quantities of data and things like public prescriptions
Speaker 17: health service, looking how we can improve the quality of prescriptions,
Speaker 17: drive down cost. We've been looking at how we can
Speaker 17: eliminate fraud and error in the benefit system. We have
Speaker 17: two hundred and eighty billion pound benefit and pension system
Speaker 17: and we currently employ thousands and thousands of people to
Speaker 17: check for fraud. We think we're going to be able
Speaker 17: to vastly reduce that and improve.
Speaker 14: So attracted that talent hasn't been an issue.
Speaker 17: No, No, we've We've been really pleasantly surprised that loads
Speaker 17: of people have applied and they've passed our very very
Speaker 17: stringent tests to get in.
Speaker 14: The one concern as well as security. You put all
Speaker 14: of this now, documents that live in a cloud, you're
Speaker 14: working more with AI. How do you safeguard that to
Speaker 14: say adversaries?
Speaker 17: Yeah, it's a central question and we have a very
Speaker 17: effective security service in the UK and we're constantly learning
Speaker 17: from partners. I was out in talent in Estonia right
Speaker 17: on the fringes of NATO a few weeks ago, learning
Speaker 17: from them because they were party to some enormous cyber
Speaker 17: attacks a few years ago and have become very very resilient.
Speaker 17: So it's uppermost in our mind when we're vetting people,
Speaker 17: but also when we're building systems to make sure that
Speaker 17: they're not that they can't be attacked by enemy operator.
Speaker 14: If you use AI in the defense sector in the
Speaker 14: UK government, how important is it that all that technology
Speaker 14: comes in house out of House well because of these concerns.
Speaker 17: No, no, I think it's not just defense. Right when
Speaker 17: we were starting out, we could easily have gone and
Speaker 17: picked a number of big companies, Big UK companies have
Speaker 17: fantastic a sector in London. But we wanted to understand
Speaker 17: this technology ourselves. So we've hired this cracked team of
Speaker 17: thirty people going up to seventy who are going to
Speaker 17: be able to build bespoke systems for us.
Speaker 4: Now.
Speaker 17: In the future, I think there'll be a case of
Speaker 17: some stuff we will build ourselves and use many times,
Speaker 17: some stuff we will build bespoke for particular apartments perhaps
Speaker 17: like defense, and some things we will buy in. But
Speaker 17: having people who actually know how it works and know
Speaker 17: what government's needs are I think is central to getting
Speaker 17: this revolution right.
Speaker 14: I know you're in New York, so you're missing all
Speaker 14: the morning press in the UK after a critical election
Speaker 14: last night, and you know you saw the Bellwether parliamentary
Speaker 14: seat that the Conservatives lost. Do you honestly think the
Speaker 14: Conservative Party if the elections are going to be held
Speaker 14: this year at some point I know the Prime Minister
Speaker 14: said at the second half of the year, do you
Speaker 14: think the current Conservives will be able to hold onto power.
Speaker 17: I do think they will be able to and I'll
Speaker 17: tell you what. Look, we've had a tough night. The
Speaker 17: truth is that in twenty twenty one, when this cycle
Speaker 17: of elections was last on, we had a vaccine bounce
Speaker 17: that was a very good year for us. We always
Speaker 17: suspected we might come down. But there is a silver
Speaker 17: lining to this cloud, and it's the fact that Ben
Speaker 17: Houchin are mayor in Teesside, in the northeast, traditionally quite
Speaker 17: a deprived part of the country, which under the Conservatives
Speaker 17: is now flourishing. He's won, he's held on, He's done
Speaker 17: a very good job there, and I think when it
Speaker 17: comes to the election and people actually have to make
Speaker 17: a choice about who they want to see in power
Speaker 17: for the next five years, is it going to be
Speaker 17: the Prime Minister and the Conservatives that has got us
Speaker 17: through COVID, that has seen off inflation and the energy
Speaker 17: crisis and has a plan for the future, or is
Speaker 17: it to be a Labor party that really has no
Speaker 17: plan and no agenda. I think they're going to come
Speaker 17: with us.
Speaker 14: Do now regret though potentially removing Boris Johnson, just from
Speaker 14: an electability point of view.
Speaker 17: No, I don't because Boris certainly had his strengths, but
Speaker 17: things weren't working out and he made some mistakes and
Speaker 17: we couldn't have pretended that those mistakes haven't harmed.
Speaker 14: Besides Ai, which I know the Prime Minister is really
Speaker 14: focused on, but a lot of that has feels a
Speaker 14: little bit like it's not tangible yet to voters and
Speaker 14: the electorate. What does Rischie Sunac need to do. Number
Speaker 14: one thing he needs to do going into this election.
Speaker 17: So I think there are some really good stories to tell.
Speaker 17: I mentioned t side up in the Northeast when I
Speaker 17: was the Minister for Skills. I was lucky enough to
Speaker 17: be part of this great piece of work where Ben Houchin,
Speaker 17: the mayor, persuaded the energy companies to come and build
Speaker 17: hydrogen plants on the condition that they offered training courses
Speaker 17: for young boys and girls in the local colleges. So
Speaker 17: you have, you know, the government setting up a free
Speaker 17: pot and teaside, the mayor bringing in the business, and
Speaker 17: then the business securing the training places so that young
Speaker 17: people get those new jobs in their community. And that
Speaker 17: that is what we call leveling up in the UK.
Speaker 17: And we're starting to see the fruits of it, you know,
Speaker 17: new business in towns which have been left behind, and
Speaker 17: local people getting those jobs and adding to the prosperity
Speaker 17: of the places where they live. That's something that didn't
Speaker 17: happen under thirteen years of labor. It's happening under the
Speaker 17: Conservatives and I've been proud to be part of it.
Speaker 14: Do you want to break some news. Do you know
Speaker 14: when the election will be?
Speaker 17: Well, I'd love to tell you, but the primary don't
Speaker 17: know yet. I don't know yet.
Speaker 14: Okay, all right, we'll leave it there. Thank you so
Speaker 14: much for your time. That was Alex Burghart, UK Cabinet Officer,
Speaker 14: Minister leaning on AI in the public sector, Joe.
Speaker 2: Kayley, Ane Marie Hordurin live in New York. Thank you
Speaker 2: so much for the great conversation. Anne Marie.
Speaker 1: If you're listening to the Bloomberg Balance of Power podcast,
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Speaker 13: This is something that perhaps the administration is trying to
Speaker 13: hang their hats on, Joe. The continued strength it seems
Speaker 13: of the US economy, but of course they're facing a
Speaker 13: number of other headwinds as well, as we continue to
Speaker 13: see campus protests, pro Palestinian protests across the country and abroad,
Speaker 13: still efforting a cease fire deal between Israel and Hamasta
Speaker 13: that to this point has not yet come to fruition.
Speaker 5: Well that's true, Kayley.
Speaker 2: You and I started this week on Monday with talk
Speaker 2: of an imminent announcement like that day or night, and
Speaker 2: it's been five days and we're still waiting. So now
Speaker 2: a new clock is ticking. An important headline this morning
Speaker 2: in the Wall Street Journal Israel gives Hamas a week
Speaker 2: to strike a deal on a RAFA, or rather a
Speaker 2: RAFA offensive will begin. And it gets us back to
Speaker 2: the site idea question at least whether RAFA is a
Speaker 2: bargaining ship or indeed something that Israel is telegraphing will happen. Kaylee,
Speaker 2: We're lucky to be joined by Jennifer Kavanaugh right now,
Speaker 2: senior fellow in the American state Craft Program at the
Speaker 2: Carnegie Endowment for International Peace, and it's.
Speaker 5: Great to have you with us. Jennifer.
Speaker 2: We have a lot of questions about what's happening right now,
Speaker 2: including the status of talks now that HAMAS delegation is
Speaker 2: joining the situation in Cairo, what do you expect to
Speaker 2: happen this weekend.
Speaker 18: Well, I heard the same report that you did that
Speaker 18: Hamas has indicated that they are willing to continue negotiations,
Speaker 18: so there's still a chance for a deal, But there
Speaker 18: are a number of stumbling box one of which you
Speaker 18: just mentioned, which is the fact that Netanyahu has made
Speaker 18: it clear that the IDF the Israeli defense for US
Speaker 18: and tends to move on Rafa whether or not there
Speaker 18: is a deal, which really reduces Hamas's incentive to strike
Speaker 18: any sort of a cord, given that it doesn't seem
Speaker 18: to buy them anything in the long term. Of course,
Speaker 18: the other stumbling block is the lack of a real
Speaker 18: plan for the future of Gaza. What happens if this
Speaker 18: is not a long term seas fare or if it
Speaker 18: is to Gaza in the long term, And those are
Speaker 18: things I think that are likely weighing on the minds
Speaker 18: of Hama's leaders as they're going into these negotiations.
Speaker 13: Well, so, Jennifer, it's interesting that you raise the incentives
Speaker 13: or perhaps lack thereof, for Hamas, knowing that perhaps Israel
Speaker 13: will be moving into Rafa. Either way, that if they
Speaker 13: release hostages, they are losing some of the leverage that
Speaker 13: they have remaining. Why would Hamas agree to a temporary
Speaker 13: ceasefire at this point, Well.
Speaker 18: It's possible if they would see an advantage to having
Speaker 18: some time to rebuild their forces or to solidify their
Speaker 18: grounds before Israel moved in, So it's possible that that
Speaker 18: is one way they're thinking.
Speaker 4: Another is that.
Speaker 18: This idea that even a temporary seasfire could become permanent.
Speaker 18: There have been some who have indicated that even on
Speaker 18: the Israeli side, there's a recognition that a temporary cease
Speaker 18: fire would likely be a permanent one. So there's the
Speaker 18: potential that this uh that Yahoo's threat to move on
Speaker 18: Ralpha to regardless of a deal, is just that it's
Speaker 18: a bluff and that what what is what starts as
Speaker 18: a temporary spire would become permanent. But that raises a
Speaker 18: whole host of other questions about what that means for
Speaker 18: the long term, and there's a lot of uncertainty for Hamas.
Speaker 8: You know.
Speaker 18: Another big news item this week was this idea of
Speaker 18: a Israeli Saudi normalization deal and it's hard to see
Speaker 18: how that moves forward without a plan for a permanent
Speaker 18: Palestinian state, But Israel has indicated that it's not interested
Speaker 18: in moving in that direction either, So from Amas's perspective,
Speaker 18: there's definitely an incentive to keep the talks going in
Speaker 18: hopes that they can delay any sort of further military operation,
Speaker 18: but it's hard to see what the incentives are for
Speaker 18: actually striking that deal without a lot more information and
Speaker 18: give on the Israeli side.
Speaker 2: Jennifer does the arrival potentially this weekend is what we're
Speaker 2: hearing of a temporary peer to deliver humanitarian aid to Gaza.
Speaker 2: The US military of course building that.
Speaker 5: As we speak.
Speaker 2: Does it change the dynamic at all in these talks.
Speaker 2: Does it increase the chance for a ceasefire once it's
Speaker 2: up and running.
Speaker 18: I'm not sure that really factors in all that much.
Speaker 18: I mean, the most efficient way to get aid into
Speaker 18: Gaza is with trucks over land borders, so the peer
Speaker 18: will offer some temporary relief possibly, But even if that
Speaker 18: aid starts arriving this weekend, it's going to face delays
Speaker 18: and actually getting into the hands of population because it's
Speaker 18: still not really clear how that AID is going to
Speaker 18: get from the peer to the population, and the big
Speaker 18: bottlenecks are the security checks of that AID as it
Speaker 18: moves from the peer onto land, and it's not there's
Speaker 18: no protocol yet or procedures that have been outlined for
Speaker 18: how that process is going to occur. That's going to
Speaker 18: be faster than what's already been put in place. So
Speaker 18: I'm not sure that that factors in, although it certainly
Speaker 18: would be beneficial for the god of population long term
Speaker 18: to be able to get access to more AID.
Speaker 13: Well, you raise the question of perhaps bottlenecks that could
Speaker 13: arise once things are off the peer. There's also just
Speaker 13: the question of the security of the peer itself. This
Speaker 13: is something that the Defense Secretary, Lloyd Austin, was asked
Speaker 13: about earlier in Honolulu, and this was his response.
Speaker 7: The first question was regarding any incredible information that we
Speaker 7: have that AMAS is going to attack our troops. Of course,
Speaker 7: I don't discuss intelligence information at the podiums, but I
Speaker 7: don't see any indications currently that there is an active intent.
Speaker 5: To do that.
Speaker 7: Having excited that this is this is a combat zone
Speaker 7: and a number of things can happen. A number of
Speaker 7: things will happen.
Speaker 13: A number of things, Jennifer, he said, can and will happen.
Speaker 13: Could this peer be something of an impetus for actual
Speaker 13: US troops getting involved in a more material way if
Speaker 13: indeed there were to be an attack, Well, there's certainly.
Speaker 18: The risk that that could happen. That's one of the
Speaker 18: uh one of the criticisms that has arisen of the
Speaker 18: plan for this per since the start is that it's
Speaker 18: not clear how US troops are going to be protected
Speaker 18: and how they're going to keep them from being on
Speaker 18: the land, which then could signal a larger US role
Speaker 18: in this conflict. Then then the Defense Department has indicated
Speaker 18: it intends to have or that it wants to have.
Speaker 18: You know, one of Hamas's goals has been throughout this
Speaker 18: conflict to separate Israel from its Western support. So attacking
Speaker 18: US forces and sort of forcing this decision of how
Speaker 18: in Israel's camp is the United States willing to be
Speaker 18: certainly could be a tactic, and so attacks on the
Speaker 18: pier are certainly not out of the question in terms
Speaker 18: of trying to force the US hand in that way.
Speaker 18: At the same time, I don't think any player involved
Speaker 18: in this conflict whether it's the United States. Hamas Aaron
Speaker 18: Israel wants to see an escalation to any sort of
Speaker 18: regional regional conflict. Hamas certainly would like to have de escalation,
Speaker 18: not escalation, and so that could weigh on the other
Speaker 18: side of keeping them from from putting any pressure on
Speaker 18: US forces.
Speaker 2: Jennifer, what happens if, as some are predicting, Israel opens
Speaker 2: a new front to the north, What happens to talks
Speaker 2: with Hamas if Israel attacks has Belah?
Speaker 18: Well, I mean, that's a that's a tough question, but
Speaker 18: I think the better question is whether or not Israel
Speaker 18: can really resource a second front without additional US support,
Speaker 18: And I would my estimate is is probably not. If
Speaker 18: Israel decides to open a second front, that opens a
Speaker 18: number of hard questions for the United States about how
Speaker 18: far it's willing to lean in terms of providing offensive
Speaker 18: military to the United States to excuse me, to Israel.
Speaker 18: And that's already been a contentious issue in the United States,
Speaker 18: with some senators calling for conditions on AID and uh
Speaker 18: and and putting pressure on President Biden to come out
Speaker 18: more strongly in terms of leaning on the leverage that
Speaker 18: the United States gains from providing military aid in terms
Speaker 18: of reigning Natanyaku in to limit this conflict, to prevent
Speaker 18: it from becoming a regional one, which is a real
Speaker 18: risk if Israel war to move into Lebanon.
Speaker 13: Well, Jennifer, as you talk about the idea of limiting aid,
Speaker 13: certainly there is a chunk of people in the US
Speaker 13: right now, including some members of Congress, who would not
Speaker 13: like to see the US continuing to provide unconditional aid
Speaker 13: to Israel because of concern around Palestinian life and what's
Speaker 13: happening in Gaza, And certainly that has shown up on
Speaker 13: college campuses across the country as we have seen what
Speaker 13: was a pro Palestinian movement perhaps morphing into something that
Speaker 13: could have more anti Semitism involved. What effect do you
Speaker 13: think the visuals and the rhetoric around these protests is
Speaker 13: actually having with the situation or on the situation on
Speaker 13: the ground in the Middle East. Is that something that
Speaker 13: emboldened to Moss Does it embolden Israel, you know, make
Speaker 13: them more secure in the notion that they have to
Speaker 13: fight vigorously for their right to exist. How do you
Speaker 13: view that?
Speaker 18: I could see it as possibly emboldening the Moss in
Speaker 18: the sense that it is eroding the golob credibility and
Speaker 18: reputation of both the United States and Israel, which is
Speaker 18: one of the long term goals of these groups.
Speaker 8: Uh.
Speaker 18: For Israel, you know, seeing global protests against the way
Speaker 18: the war has been conducted certainly helped shift public opinion
Speaker 18: against them and limit their flexibility to continue the war.
Speaker 18: And for the United States, it raises questions about a
Speaker 18: double standard. You know, some countries across the Global South
Speaker 18: especially have been very critical of what they see as
Speaker 18: a double standard between the way the United States has
Speaker 18: responded to Israel's conduct of its war in Gaza and
Speaker 18: Russia's conduct of its war in Ukraine, which which the
Speaker 18: United States has come up very strongly against. Now, there
Speaker 18: are obviously very significant differences between those two conflicts, but
Speaker 18: that connection has been made, and that narrative, which has
Speaker 18: been fueled by disinformation and by Russian sources and by
Speaker 18: anti Israel sources, has has taken and that can have
Speaker 18: an impact on US influence across places in Africa and
Speaker 18: other parts of the Middle East as well.
Speaker 13: All Right, Jennifer Kavanaugh, great to have you on Balance
Speaker 13: of Power today. Thank you so much for joining us she,
Speaker 13: of course, is a Senior Fellow in the American state
Speaker 13: Craft Program at the Carnegie Endowment for International Peace.
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