WEBVTT - Meta's Day in Court, Restoring US Credibility 0:00:02.520 --> 0:00:10.520 Bloomberg Audio Studios, Podcasts, Radio News. This is Bloomberg Business 0:00:10.520 --> 0:00:14.680 Weekdaily reporting from the magazine that helps global leaders stay 0:00:14.720 --> 0:00:18.799 ahead with insight on the people, companies, and trends shaping 0:00:18.800 --> 0:00:23.760 today's complex economy. Plus global business finance and tech news 0:00:23.800 --> 0:00:27.760 as it happens. The Bloomberg Business Week Daily Podcast with 0:00:27.920 --> 0:00:31.760 Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.080 --> 0:00:35.080 Mark Zuckerberg taking the stand in federal court today as 0:00:35.120 --> 0:00:39.000 the first witness in the us FTC's antitrustriuse seeking to 0:00:39.040 --> 0:00:42.440 break up Meta platforms. He's the company's founder and CEO. 0:00:42.479 --> 0:00:46.000 Of course, he set to face questions about Meta's acquisitions 0:00:46.040 --> 0:00:48.840 of Instagram and WhatsApp. The FTC is seeking to force 0:00:48.880 --> 0:00:52.240 Meta to divest those platforms, alleging the acquisitions gave Meta 0:00:52.240 --> 0:00:55.920 an illegal monopoly on portions of the social networking industry. 0:00:56.400 --> 0:01:00.360 To that, here's FTC Chair Andrew Ferguson earlier on Fox 0:01:00.360 --> 0:01:01.200 outlining the case. 0:01:01.680 --> 0:01:04.840 Here, we have actual evidence that the transactions turned out 0:01:04.840 --> 0:01:08.000 to be anti competitive and have given Facebook and Met 0:01:08.080 --> 0:01:11.360 a tremendous amount of power. We certainly think it's a monopoly, 0:01:11.400 --> 0:01:13.000 and we think that the evidence that we're going to 0:01:13.040 --> 0:01:14.959 put on a trial, is going to show that it's 0:01:14.959 --> 0:01:19.039 a monopoly. And look, we all saw full on in 0:01:19.120 --> 0:01:22.840 twenty twenty how much power these social media platforms have 0:01:22.920 --> 0:01:26.839 over every aspect of our daily life, of our politics, 0:01:26.880 --> 0:01:30.800 our elections, our social lives, our economic lives. And that's 0:01:30.800 --> 0:01:33.280 what this case is about, is about addressing that sort 0:01:33.280 --> 0:01:36.280 of power and making sure that twenty twenty can never 0:01:36.360 --> 0:01:37.000 happen again. 0:01:37.160 --> 0:01:39.759 That was FDC Chair Andrew Ferguson on Fox earlier today 0:01:39.760 --> 0:01:43.000 outlining the case from where we bring in Jenery Bloomberg Intelligence, 0:01:43.040 --> 0:01:46.080 senior analyst for Anti Trust. She joins us here in 0:01:46.120 --> 0:01:49.960 the Bloomberg Interactive Brokers studio. I wanted to play that 0:01:50.040 --> 0:01:53.880 clip for you because it sounds like the case is 0:01:53.920 --> 0:01:57.920 about a couple different things, at least to the FTC chair. 0:01:58.960 --> 0:02:01.720 What is the case actually about, because it sounded very political, 0:02:02.880 --> 0:02:04.559 and this is a case that has been a long 0:02:04.560 --> 0:02:07.800 time in the making, that has spanned administrations. 0:02:07.560 --> 0:02:11.440 Right, Well, it really is just about Facebook's acquisitions of 0:02:11.480 --> 0:02:14.040 Instagram and WhatsApp. Now long time ago. There were other 0:02:14.080 --> 0:02:16.960 allegations in the suit, they've all been thrown out. They're gone, 0:02:17.000 --> 0:02:19.600 having to do with not working with competitors. It's just 0:02:19.680 --> 0:02:23.000 these acquisitions. And the allegation is that for both of 0:02:23.000 --> 0:02:26.000 those companies, Facebook at the time called Facebook and not 0:02:26.120 --> 0:02:29.280 Meta was concerned that they would grow or be bought 0:02:29.320 --> 0:02:31.200 by a Google or somebody like some other big tech 0:02:31.240 --> 0:02:34.280 platform and become a real competitor to Facebook and give 0:02:34.320 --> 0:02:36.280 them a tough time in social networking, and so they 0:02:36.320 --> 0:02:38.480 bought them instead. It's sort of what they call a 0:02:38.560 --> 0:02:42.480 buy and bury, although they didn't bury strategy, and they're 0:02:42.520 --> 0:02:47.040 saying that just those acquisitions that itself was anti competitive contents. 0:02:46.720 --> 0:02:49.800 So hold on, is that is that not allowed? 0:02:50.080 --> 0:02:52.520 Like, you know, there's a business strategy to me, you know. 0:02:52.520 --> 0:02:54.000 If you think about it, Like, let's just think about 0:02:54.000 --> 0:02:58.600 it from the consumer package goods business. A large soda 0:02:58.680 --> 0:03:04.080 manufacturer going and buying a fast rising upstart that is 0:03:04.160 --> 0:03:07.360 making some sort of drink that a lot of people 0:03:07.360 --> 0:03:08.320 are seeming to enjoy. 0:03:08.639 --> 0:03:11.800 Is that anti competitive? So it is an anti competitive 0:03:11.840 --> 0:03:12.440 on its face. 0:03:12.600 --> 0:03:14.959 No, And first of all, it has I'm not a 0:03:15.000 --> 0:03:19.239 lawyer with a monopoly position. Do you have a monopoly 0:03:19.280 --> 0:03:21.600 and have you done this to maintain your monopoly? That's 0:03:21.639 --> 0:03:24.920 the allegation here. So a company that isn't considered a monopolist. 0:03:25.000 --> 0:03:27.280 They can do something like that. The other thing is 0:03:27.320 --> 0:03:30.320 we're talking about buying Barry, So sometimes these things look 0:03:30.360 --> 0:03:33.600 anti competitive where a dominant company buys up and upstart 0:03:33.600 --> 0:03:36.040 and then kills it it's gone, which didn't happen here. 0:03:36.080 --> 0:03:36.600 See that. 0:03:36.960 --> 0:03:39.560 Yes, I'm not going to say who, but when we've 0:03:39.560 --> 0:03:41.960 definitely seen that with various big. 0:03:41.800 --> 0:03:44.560 Tech companies, exactly happens, right, We've seen it. 0:03:44.560 --> 0:03:46.960 But that isn't the case here, which I think makes 0:03:46.960 --> 0:03:49.000 this case a little bit difficult for the Federal Trade 0:03:49.040 --> 0:03:52.400 Commission because they didn't. Facebook didn't just buy Instagram and 0:03:52.440 --> 0:03:55.360 WhatsApp and kill them off. They put resources in and 0:03:55.400 --> 0:03:58.040 they improved companies that were really very nascent at the 0:03:58.080 --> 0:03:59.280 time that they were acquired. 0:03:59.880 --> 0:04:02.120 The issue is in boy, this makes them even a 0:04:02.160 --> 0:04:04.680 bigger monopoly when it comes to the social world or 0:04:04.840 --> 0:04:06.120 is that part of it as well? 0:04:06.360 --> 0:04:06.520 Well? 0:04:06.560 --> 0:04:07.680 That is part of adding it. 0:04:07.680 --> 0:04:10.280 That is part of it that they basically just maintained 0:04:10.280 --> 0:04:13.440 this monopoly they had in personal social networking and what 0:04:13.480 --> 0:04:16.120 it's and by just buying up everybody, they own them all. 0:04:16.480 --> 0:04:18.719 They keep Facebook blue, they call it the original and 0:04:18.839 --> 0:04:21.760 Instagram separate they're two different products even though they're both 0:04:21.800 --> 0:04:25.120 owned by Meta, and that they maintain this monopoly over 0:04:25.160 --> 0:04:28.440 personal social networking. And what that results in is lack 0:04:28.480 --> 0:04:31.000 of choice for consumers, lack of quality. 0:04:31.240 --> 0:04:33.560 Maybe there's less privacy protections. 0:04:33.040 --> 0:04:35.159 There are more ads. Maybe if you had some competitor, 0:04:35.400 --> 0:04:38.800 you'd have better options as consumers. That's the allegation here. 0:04:39.880 --> 0:04:42.760 Is it TikTok calling good point? 0:04:43.040 --> 0:04:47.040 Very good point? So what's at stake? Because Mark Zuckerberg. 0:04:46.600 --> 0:04:49.120 Already taking the stand in federal court today, what did 0:04:49.160 --> 0:04:51.520 we learn from any of that? I know it's all 0:04:51.600 --> 0:04:52.719 kind of happening in real time. 0:04:52.760 --> 0:04:55.680 It is right, He's really important here because they're two 0:04:55.760 --> 0:04:58.160 sides to this case. That makes it very strange. There 0:04:58.200 --> 0:05:01.600 are a lot of documents, mostly Iszuckerberg authored by him 0:05:01.680 --> 0:05:04.760 or he contributed to in an email chain from twenty twelve. 0:05:04.800 --> 0:05:07.960 In twenty fourteen, when these companies were bought saying it's 0:05:08.000 --> 0:05:10.680 better to buy than compete. Right, this is bad. It 0:05:10.720 --> 0:05:13.320 looks like the intention is we don't want to compete. 0:05:13.400 --> 0:05:15.040 We just want to buy them up so that they 0:05:15.040 --> 0:05:18.080 won't be competing with us. But on the other hand, 0:05:18.480 --> 0:05:21.160 you have the situation where they put the money in 0:05:21.480 --> 0:05:24.719 they built these companies up. And also you have to 0:05:24.800 --> 0:05:28.159 prove as a plaintiff that it caused consumer harm. Maybe 0:05:28.200 --> 0:05:30.600 the intention was bad, and Mark Zuckerberg's going to have 0:05:30.640 --> 0:05:33.240 to explain away those documents and what he meant at 0:05:33.240 --> 0:05:35.960 the time. But even if they proved that the intention 0:05:36.160 --> 0:05:38.520 was bad at that time, they also have to approve 0:05:39.000 --> 0:05:41.400 they also have to prove that consumers were harmed. 0:05:41.680 --> 0:05:42.760 That is very difficult. 0:05:42.760 --> 0:05:46.000 Think about it. Many years ago. Technology advances and changes 0:05:46.080 --> 0:05:48.720 very quickly. We have TikTok. Now we didn't have TikTok. 0:05:48.760 --> 0:05:53.640 Then YouTube has expanded since then. So would we be 0:05:53.680 --> 0:05:55.960 in a better position had they right now, had they 0:05:55.960 --> 0:05:58.599 not bought the companies, those companies could be gone for 0:05:58.680 --> 0:06:01.120 all we know, or they could exist in some weakened 0:06:01.160 --> 0:06:04.240 form than they exist today. And how do you prove 0:06:04.360 --> 0:06:05.720 the consumers would be better off? 0:06:05.760 --> 0:06:07.520 And I think that's a big problem here, One last 0:06:07.600 --> 0:06:09.200 question real quickly, like twenty seconds. 0:06:09.360 --> 0:06:11.240 Might they potentially have to. 0:06:11.200 --> 0:06:14.360 Get rid of these That's what the FTC is seeking, 0:06:14.360 --> 0:06:16.760 And that's a big deal because about fifty percent of 0:06:16.800 --> 0:06:18.880 the ad revenue for Meta comes from Instagram. 0:06:19.240 --> 0:06:23.040 That changes the business dynamics. Jen Thank you so much, Jenniferree. 0:06:23.080 --> 0:06:26.040 She's senior anti trust litigation analyst here at Bloomberg Intelligence. 0:06:26.760 --> 0:06:30.480 You're listening to the Bloomberg Business Week podcast. Catch US 0:06:30.560 --> 0:06:33.080 Live weekday afternoons from two to five these During that 0:06:33.279 --> 0:06:37.159 listen on Applecarplay and Android Otto with the Bloomberg Business app, 0:06:37.320 --> 0:06:39.480 or watch US Live on YouTube. 0:06:39.920 --> 0:06:42.440 Focus on news out of Washington, DC and the President, 0:06:42.520 --> 0:06:46.360 especially when it comes to tariff's The explosion and changing 0:06:46.400 --> 0:06:48.480 of tariff terms have led to a lot of volatility 0:06:48.480 --> 0:06:51.720 and global financial markets and a lot of questions about 0:06:51.800 --> 0:06:54.560 what's ahead in terms of the global macro outlook. It 0:06:54.720 --> 0:06:57.200 also risks adding to the inflation concerns here in the 0:06:57.279 --> 0:06:59.919 United States. Bottom line, it's a tough environment. As we 0:07:00.080 --> 0:07:03.039 heard this morning from Goldman Sachs CEO David Solomon on 0:07:03.120 --> 0:07:04.800 his earnings call with analysts. 0:07:05.760 --> 0:07:08.400 This uncertainty around the past forward and fears over the 0:07:08.440 --> 0:07:12.200 potentially escalating effects of the trade war have created material 0:07:12.280 --> 0:07:15.920 risks to the US and global economy. We are encouraged 0:07:15.920 --> 0:07:18.880 by the administration's recent actions to pursue a more gradual 0:07:18.920 --> 0:07:23.600 policy process that allows for considered negotiations with many countries, 0:07:24.120 --> 0:07:26.400 but how policies will evolve is still unknown. 0:07:26.800 --> 0:07:30.320 Of course, that was Goldman's CEO David Solomon earlier this 0:07:30.400 --> 0:07:34.280 morning on that earnings call. Unknown's uncertainties not easy, any 0:07:34.280 --> 0:07:37.880 of it for the Fed to determine monetary policy going forward. 0:07:38.000 --> 0:07:40.600 And as Bloomberg's Christine Harper writes in a Bloomberg opinion 0:07:40.640 --> 0:07:43.920 piece looking back at former Fetchair, Paul Volker's career could 0:07:43.960 --> 0:07:48.280 provide lessons for President Trump and his in his administration. Christine, 0:07:48.320 --> 0:07:50.760 by the way, is Bloomberg News editorial board member co 0:07:50.880 --> 0:07:53.520 author with Paul Volker of the book about his life. 0:07:53.520 --> 0:07:56.160 It's entitled Keeping at It, The Quest for Sound Money 0:07:56.160 --> 0:07:59.160 and Good Government. Christine joins us here in studio, I said, 0:07:59.160 --> 0:08:01.119 when you walked in, we've been thinking about you a lot, 0:08:01.640 --> 0:08:05.480 because we've talked about Paul Volker before with you in 0:08:05.920 --> 0:08:09.080 kind of stressful times and certainly these higher inflationary times. 0:08:10.320 --> 0:08:13.400 Paul Volker, you write about two episodes during his life 0:08:13.400 --> 0:08:15.480 that are important. One takes us back to the administration 0:08:15.480 --> 0:08:17.720 of Richard Nixon in nineteen seventy one. 0:08:17.760 --> 0:08:18.560 Go there with us. 0:08:18.760 --> 0:08:21.679 Yeah, So he was part of he was a younger 0:08:21.760 --> 0:08:24.800 member of the Nixon administration. He was under Secretary of 0:08:24.920 --> 0:08:27.920 Monetary Affairs, which he actually remembers as being one of 0:08:27.920 --> 0:08:29.640 the greatest job in the world. 0:08:30.640 --> 0:08:31.280 He loved it. 0:08:32.760 --> 0:08:37.559 But at that time, the US had this unsustainable requirement 0:08:37.800 --> 0:08:41.640 that it honored this thirty five dollars per ounce price 0:08:41.720 --> 0:08:46.240 for gold. And at that point, after decades of overseas 0:08:46.320 --> 0:08:51.479 spending of dollars on the Marshall Plan and various investments overseas, 0:08:52.280 --> 0:08:56.160 countries abroad had so many dollars that everybody kind of 0:08:56.200 --> 0:08:58.760 knew there wasn't really enough gold to back at all. 0:08:59.280 --> 0:09:00.760 And so it was up. 0:09:00.760 --> 0:09:05.520 To the Nixon administration to sort of admit that and 0:09:05.640 --> 0:09:08.640 come out with an announcement and it was a unilateral 0:09:08.840 --> 0:09:12.280 declaration on a Sunday night in August in nineteen seventy one. 0:09:13.120 --> 0:09:15.559 Vulger was very involved in a whole weekend of talks 0:09:15.600 --> 0:09:19.960 about it at Camp David. In the lead up, everybody 0:09:20.000 --> 0:09:23.559 was surprised. It was known as the Nixon Shock, and 0:09:23.080 --> 0:09:27.040 they recognized that suddenly taking the value of gold off 0:09:27.040 --> 0:09:29.600 of any kind of anchor meant that there could be 0:09:29.679 --> 0:09:32.920 just chaos and the value of the dollar could plummet. 0:09:33.240 --> 0:09:35.840 So they put on all these wage and price controls 0:09:35.880 --> 0:09:39.280 at the same time they created tariffs. They tried to 0:09:39.280 --> 0:09:41.439 do all these things to manage the fallout, and also 0:09:41.679 --> 0:09:44.800 Vulker was immediately sent overseas to start talking to the 0:09:44.840 --> 0:09:48.559 financial leaders of every country major country, an extensive there 0:09:48.640 --> 0:09:50.920 was an extensive plan to be sure. 0:09:51.480 --> 0:09:52.319 They weren't perfect. 0:09:52.360 --> 0:09:55.160 They did some crazy things, and they had this Treasury 0:09:55.200 --> 0:09:57.480 secretary at the time, John Connolly, who only lasted for 0:09:57.480 --> 0:10:01.080 eighteen months under Nixon, who it's a sort of Texas, 0:10:01.559 --> 0:10:04.680 you know character, and he was a little nuts. But 0:10:04.920 --> 0:10:07.760 then George Schultz came along and they had a much 0:10:07.800 --> 0:10:11.200 more focused sort of way of dealing with it. So 0:10:11.240 --> 0:10:13.480 it wasn't perfect, but it was compared to what we're 0:10:13.480 --> 0:10:16.439 seeing with Trump and these tariffs. It was there was 0:10:16.480 --> 0:10:19.120 a rationale to it that everybody could understand. There was 0:10:19.200 --> 0:10:20.920 real economic thinking behind it. 0:10:21.120 --> 0:10:23.559 So that was nineteen seventy one. Fast forward to nineteen 0:10:23.600 --> 0:10:27.240 seventy nine when Vulker becomes Jimmy Carter's fed chair. 0:10:27.280 --> 0:10:27.719 Fed chair. 0:10:27.800 --> 0:10:30.280 Yeah, because the result of having no anchor to the 0:10:30.320 --> 0:10:33.000 dollar was that there was inflation. I mean, there were 0:10:33.160 --> 0:10:36.560 other reasons for the inflation, for the problems, but you know, 0:10:36.800 --> 0:10:40.640 the value of the dollar was thinking inflation was incredibly high. 0:10:40.720 --> 0:10:44.800 It was it was destroying the American economy, and so 0:10:46.160 --> 0:10:48.760 Jimmy Carter brought in Paul Vulker, even though Vulker told 0:10:48.840 --> 0:10:51.080 him before he when he sort of was talked to 0:10:51.559 --> 0:10:54.080 for the job, I'm going to do whatever it takes 0:10:54.120 --> 0:10:57.000 to kill inflation. That might mean to higher interest rates, 0:10:57.000 --> 0:10:59.200 it could be really bad for the economy, and Jimmy 0:10:59.240 --> 0:11:02.679 Carter chose him anyway. So it pretty much was one 0:11:02.760 --> 0:11:06.280 of the factors that sank Jimmy Carter's reelection because the 0:11:06.320 --> 0:11:09.480 economy got really it was really tough, but it was 0:11:09.520 --> 0:11:13.680 successful bringing down inflation, and the sort of vulgar commitment 0:11:13.720 --> 0:11:18.200 to price stability right was so powerful, and so you know, 0:11:19.200 --> 0:11:22.920 the integrity he had in pursuing that aim was so 0:11:23.120 --> 0:11:27.680 completely believable that from then on, instead of the gold standard, 0:11:27.720 --> 0:11:29.800 the dollar was known as being on the vulgar standard. 0:11:29.840 --> 0:11:30.680 It's pretty wild. 0:11:30.840 --> 0:11:32.600 I mean, are we in the process of kind of 0:11:32.720 --> 0:11:35.440 losing that concept and idea. 0:11:35.640 --> 0:11:37.319 So that was sort of the point I was making 0:11:37.320 --> 0:11:39.599 in my piece was that you know, really what the 0:11:39.640 --> 0:11:42.559 vulgar standard amounts to is this belief that there are 0:11:42.559 --> 0:11:45.880 public servants in America, whether they're you know, appointed or 0:11:45.880 --> 0:11:49.400 political or civil servants, but who are going to do 0:11:49.440 --> 0:11:52.240 what's right for America and make sure there's price stability 0:11:52.280 --> 0:11:54.880 and make sure there's sort of economic rationale behind things. 0:11:54.960 --> 0:11:56.280 Of course, it's not always been perfect. 0:11:56.280 --> 0:11:59.120 There have been mistakes, but when there are crises, you 0:11:59.200 --> 0:12:02.120 see over and over again these political figures will sort 0:12:02.160 --> 0:12:05.280 of retreat to the background and let experts like you know, 0:12:05.320 --> 0:12:07.880 when George Bush was dealing with the financial crisis, it 0:12:07.920 --> 0:12:12.920 was really Hank Paulson and BERNANKI who were handling it 0:12:12.920 --> 0:12:15.680 for America. But Butch wasn't kind of you know, back 0:12:15.720 --> 0:12:17.680 then there wasn't so much tweeting, but he wasn't like 0:12:17.679 --> 0:12:20.360 getting in the middle of it so much. And and 0:12:20.720 --> 0:12:24.240 you know, even when Bill Clinton was dealing with you know, 0:12:24.480 --> 0:12:28.800 the bond market turmoil at the beginning of his you know, 0:12:28.840 --> 0:12:32.160 he recognized that Bob Rubin had more expertise. And so 0:12:33.559 --> 0:12:36.880 we've had presidents that listened to economic experts. This feels 0:12:36.920 --> 0:12:40.199 different because really a lot of anybody who looks at 0:12:40.200 --> 0:12:45.440 what the administration put out has immediately mocked the you know. 0:12:47.280 --> 0:12:49.480 The confidence certainly in the United States, right. 0:12:49.360 --> 0:12:51.839 And the yeah, and I mean when they saw the 0:12:53.320 --> 0:12:55.680 the formula that was used to justify the tariffs. 0:12:55.720 --> 0:12:57.319 I mean, none of it makes sense. 0:12:57.760 --> 0:13:01.439 The various explanations coming out from thedministrations. 0:13:00.600 --> 0:13:01.520 Contradict each other. 0:13:02.200 --> 0:13:05.680 So even if you think that the general idea of 0:13:06.240 --> 0:13:11.000 being presenting a new trade order in the world makes sense, 0:13:11.360 --> 0:13:14.720 the way they're going about it is so haphazard that, 0:13:15.200 --> 0:13:17.360 you know, as David Solomon was saying, like nobody knows 0:13:17.360 --> 0:13:19.880 what's happening, and it's very hard to make any sort 0:13:19.880 --> 0:13:20.880 of forward planning. 0:13:21.679 --> 0:13:24.560 As Carol mentioned, we're seeing this hit consumer confidence. Yeah, 0:13:24.600 --> 0:13:27.280 you know, going into this term. A question that we 0:13:27.320 --> 0:13:30.280 asked a lot of our guests, Christine, was do we 0:13:30.320 --> 0:13:32.520 see maybe the markets, the bond market or the equity 0:13:32.520 --> 0:13:36.640 market or both become checks to what the president is doing, 0:13:36.720 --> 0:13:39.120 at least when it comes to his economic agenda. In 0:13:39.160 --> 0:13:41.120 your view, did we see that happen last week? 0:13:41.559 --> 0:13:44.640 Well, I'm not an expert on what's making the administration 0:13:44.720 --> 0:13:46.240 do anything, but I don't. 0:13:46.040 --> 0:13:47.680 Think anybody is except for the president. 0:13:48.240 --> 0:13:50.800 I've just seen the reporting saying that Trump said, you 0:13:50.840 --> 0:13:53.120 know that the bond market was getting a little queasy 0:13:53.240 --> 0:13:53.840 or whatever. 0:13:53.720 --> 0:13:56.120 Words he used about guardrails here. 0:13:56.280 --> 0:13:59.520 Yeah, I mean, the borrowing costs of the United States 0:13:59.600 --> 0:14:03.280 government is a huge guardrail. I mean, no, none of 0:14:03.280 --> 0:14:07.000 the administration's policies are going to succeed if suddenly we're 0:14:07.000 --> 0:14:10.320 paying a huge amount more in interest every year. So 0:14:11.080 --> 0:14:13.280 you know, you can cut as many federal jobs as 0:14:13.320 --> 0:14:15.400 you want, you can cut all the services from the 0:14:15.400 --> 0:14:16.160 federal government. 0:14:16.200 --> 0:14:18.400 But if we're if all that you. 0:14:18.360 --> 0:14:21.880 Know, savings is you know, overtaken by having to pay 0:14:21.920 --> 0:14:24.120 more on interest on our debt, I don't know where 0:14:24.240 --> 0:14:25.160 where that's getting us. 0:14:25.240 --> 0:14:27.040 What do you think the president could do in terms 0:14:27.080 --> 0:14:30.080 of you know, or he and his key economic advisors 0:14:30.120 --> 0:14:33.200 to maintain the confidence in the US by citizens of 0:14:33.240 --> 0:14:34.760 the US and also the global world. 0:14:34.880 --> 0:14:36.760 Well, based on what well I. 0:14:36.680 --> 0:14:39.200 Think, you know, it does seem that a more consistent 0:14:39.240 --> 0:14:42.240 approach would be helpful. That's what you hear from business leaders, 0:14:42.240 --> 0:14:46.040 That's what you hear from foreign leaders. They want to 0:14:46.120 --> 0:14:48.560 understand what the aims are here. They want to clear 0:14:48.880 --> 0:14:52.680 path forward and you know, not a daily change in 0:14:52.720 --> 0:14:56.520 the in the tariff regime and plans, and you know, 0:14:56.600 --> 0:14:58.120 not sort of terriffs by tweet. 0:14:58.360 --> 0:15:01.760 That doesn't whether I want to ask you what if 0:15:01.800 --> 0:15:04.840 you think what if that's his aim, is to just 0:15:04.920 --> 0:15:08.880 constantly upset people and keep them kind of on edge, 0:15:08.880 --> 0:15:12.000 whether it's global leaders, whether he definitely has shown a 0:15:12.040 --> 0:15:15.080 difference to the equity market, it's certainly the bond market 0:15:15.080 --> 0:15:15.800 that caught his attention. 0:15:15.840 --> 0:15:17.360 But what if that is his strategy? 0:15:17.920 --> 0:15:20.480 What could be as you think about you've covered so 0:15:20.680 --> 0:15:24.400 much in terms of crises and just made off crypto 0:15:24.440 --> 0:15:27.160 like just so many things of your purview. How do 0:15:27.200 --> 0:15:29.920 you like how how are we thinking about kind of 0:15:29.960 --> 0:15:32.560 the US as an economic and financial might. 0:15:32.640 --> 0:15:34.880 Yeah, I mean the US is sort of based on 0:15:34.960 --> 0:15:38.360 this idea that you can your money is safe lending 0:15:38.360 --> 0:15:41.400 to the US government. And if we have a policy 0:15:41.480 --> 0:15:45.680 that nobody understands or trusts and seems all to be 0:15:45.800 --> 0:15:49.000 designed to satisfy the whims of one person, it's going 0:15:49.040 --> 0:15:50.840 to be harder and harder for us to maintain that, 0:15:50.920 --> 0:15:54.680 and that would be really damaging for Americans. So ideally, 0:15:54.760 --> 0:15:56.280 what would be good to see you to say back 0:15:56.280 --> 0:15:59.000 to your question, is for you know, the president to 0:15:59.080 --> 0:16:01.080 start listening to some of his I mean it does 0:16:01.120 --> 0:16:03.960 sound like Treasury Secretary Scott Persens taking sort of the 0:16:04.040 --> 0:16:07.280 front the lead on this. The markets certainly trust him 0:16:07.320 --> 0:16:09.560 a bit more. He's talked a lot more about it, 0:16:09.640 --> 0:16:12.360 kind of a gradual approach, and so, you know, I 0:16:12.360 --> 0:16:14.400 think there's hope. That's why markets seem to be a 0:16:14.440 --> 0:16:18.600 little quieter today that you know, maybe some reason will prevail. 0:16:18.720 --> 0:16:21.920 It's but I mean, the president is very impulsive, and 0:16:21.960 --> 0:16:24.280 so it's it's very hard to know what. 0:16:24.200 --> 0:16:25.040 Will really happen. 0:16:25.120 --> 0:16:27.560 Yeah, what are potential long term risks in your view 0:16:28.040 --> 0:16:32.360 if during this administration the US moves away from this 0:16:32.520 --> 0:16:37.800 vulgar standard, right, does that have ramifications beyond selection? 0:16:38.280 --> 0:16:38.440 Well? 0:16:38.520 --> 0:16:39.960 Sure, I mean I think what you see is that 0:16:40.040 --> 0:16:42.520 the borrowing costs of the US go up because you know, 0:16:42.960 --> 0:16:46.400 people whether it's American citizens or people overseas, just start 0:16:46.440 --> 0:16:48.960 putting their money, the money that they want to make 0:16:48.960 --> 0:16:51.480 sure is there no matter what. They're not necessarily going 0:16:51.520 --> 0:16:53.520 to put it in treasuries or or all of it 0:16:53.560 --> 0:16:56.360 in treasuries. They might start finding other places. That's good 0:16:56.400 --> 0:17:00.680 for you know, other countries and their debt or other markets, 0:17:00.880 --> 0:17:01.320 but it's. 0:17:01.200 --> 0:17:02.480 Bad for the US borrowing. 0:17:03.440 --> 0:17:07.800 And you know, you just see inflation cause because you'll 0:17:07.840 --> 0:17:10.720 have higher costs for Americans having to try to buy 0:17:10.760 --> 0:17:15.040 things overseas. I think there's just all these privileges Americans 0:17:15.040 --> 0:17:17.480 have gotten used to knowing that the dollar was sort 0:17:17.480 --> 0:17:20.480 of needed by everybody in the world and sought sought after, 0:17:20.960 --> 0:17:24.120 and the same with you know, US treasuries is at risk, 0:17:24.240 --> 0:17:26.200 I think, I mean, it's not going to go away immediately, 0:17:26.240 --> 0:17:29.040 but we've taken it for granted for a long time. 0:17:29.160 --> 0:17:29.560 Philiy J. 0:17:29.680 --> 0:17:32.040 Powell could find himself in a really complicated right in 0:17:32.119 --> 0:17:35.040 terms of if Tavis make things more expensive and there's 0:17:35.080 --> 0:17:37.720 more inflation pressures in what could be potentially a slow 0:17:37.760 --> 0:17:38.480 in growth environment. 0:17:38.560 --> 0:17:39.280 Yeah, that's tricky. 0:17:39.359 --> 0:17:41.960 Yeah, I mean you saw that in the seventies after 0:17:42.040 --> 0:17:44.800 the Nixon chaka you so basically these bouts of stagflation, 0:17:44.880 --> 0:17:46.520 and it was really hard. I mean, the FED at 0:17:46.520 --> 0:17:48.959 the time wasn't able to deal with the inflation. They 0:17:49.000 --> 0:17:52.400 were too concerned about the h the slow growth and they, 0:17:52.640 --> 0:17:55.360 you know, basically Arthur Burns, that fed Cherman at the time, 0:17:55.480 --> 0:17:59.640 was a close political ally of Richard Dixon, and many 0:17:59.680 --> 0:18:04.320 people believe he just let inflation, you know, happen because 0:18:04.359 --> 0:18:06.560 he wanted to make sure Nixon could get re elected. 0:18:07.080 --> 0:18:10.000 And that turned out to be a really big problem 0:18:10.080 --> 0:18:13.200 for the US economy twenty five seconds. 0:18:13.359 --> 0:18:15.560 If Paul Volker was here, what would you want to 0:18:15.600 --> 0:18:17.000 ask him about this environment? 0:18:17.640 --> 0:18:19.040 Just quickly? Well, I know he would. 0:18:19.080 --> 0:18:20.879 I mean, at the big point he wanted to make 0:18:20.880 --> 0:18:24.359 in the book was the importance of competent government. 0:18:24.920 --> 0:18:27.800 You know, it's a true public servant, right, Yeah. 0:18:27.600 --> 0:18:30.520 And so he realized sort of like the big takeaway 0:18:30.520 --> 0:18:31.960 at the end of his life was we need to 0:18:32.000 --> 0:18:35.119 have good, well trained people staffing the US government. So 0:18:35.240 --> 0:18:37.280 I think he would be really upset at all the 0:18:38.000 --> 0:18:40.120 ways we're treating federal workers. 0:18:40.720 --> 0:18:43.600 All right, great stuff, Thank you so much, so appreciate it. 0:18:43.680 --> 0:18:46.879 Christine Harper, Bloomberg News editorial board member, co author with 0:18:47.000 --> 0:18:49.800 Paul Voker on the book Keeping at It, The Quest 0:18:49.840 --> 0:18:51.280 for Sound Money and Good Government. 0:18:53.200 --> 0:18:56.840 This is the Bloomberg Business Week podcast. Listen live each 0:18:56.880 --> 0:19:00.320 weekday starting at two pm. He'stern on Applecarplay and Droid 0:19:00.320 --> 0:19:03.359 Auto with the Bloomberg Business app. You can also listen 0:19:03.440 --> 0:19:06.720 live on Amazon Alexa from our flagship New York station. 0:19:07.240 --> 0:19:09.919 Just say Alexa play Bloomberg eleven thirty. 0:19:11.240 --> 0:19:12.400 We're talking Apple. Yeah. 0:19:12.400 --> 0:19:14.160 I mean, this, after all, is the company that's most 0:19:14.200 --> 0:19:17.000 exposed to a tariffs or a tit for chat chat 0:19:17.119 --> 0:19:19.760 with China when it comes to the mag seven shares rallying. 0:19:19.760 --> 0:19:20.040 Though. 0:19:20.320 --> 0:19:23.480 On that reprieve, we talk about the company's massive global 0:19:23.480 --> 0:19:25.520 supply chain a lot with our Mark Kerman, who's Bloomberg 0:19:25.520 --> 0:19:27.840 News Managing editor for Global Tech. He joins us here 0:19:28.200 --> 0:19:33.920 in the Bloomberg BusinessWeek studio. You had a busy weekend always, yes, 0:19:34.280 --> 0:19:36.080 I mean, but this is easier than usual. And I 0:19:36.119 --> 0:19:38.480