1
00:00:00,240 --> 00:00:04,040
Speaker 1: Runt you by Bank of America Mary Lynch with virtual reality,

2
00:00:04,320 --> 00:00:09,719
Speaker 1: virtually everything will change. Discover opportunities in a transforming world

3
00:00:10,160 --> 00:00:14,440
Speaker 1: VI of a, mL dot Com, slash VR, Mary Lynch,

4
00:00:14,520 --> 00:00:28,120
Speaker 1: Pierced Fenner and Smith Incorporated. Ye. Welcome to the Bloomberg

5
00:00:28,160 --> 00:00:32,360
Speaker 1: Surveillance Podcast. I'm Tom Keene with David Gura. Daily we

6
00:00:32,440 --> 00:00:36,080
Speaker 1: bring you insight from the best of economics, finance, investment,

7
00:00:36,120 --> 00:00:42,200
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

8
00:00:42,280 --> 00:00:49,839
Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg. We

9
00:00:49,920 --> 00:00:52,000
Speaker 1: begin this morning with John Sylvia. He's the chief economist

10
00:00:52,000 --> 00:00:53,880
Speaker 1: at Wells Fargo. Joins us here in our Bloomberg eleven

11
00:00:53,920 --> 00:00:56,160
Speaker 1: three of studios in New York. And I mentioned those

12
00:00:56,160 --> 00:00:58,200
Speaker 1: bank runnings just a moment ago. Let me read from

13
00:00:58,200 --> 00:01:00,760
Speaker 1: what Brian moynihan wrote in his statement of company Bank

14
00:01:00,800 --> 00:01:04,080
Speaker 1: of America's earnings just a few moments ago. Against modest

15
00:01:04,120 --> 00:01:06,160
Speaker 1: economic growth of two percent, we had one of the

16
00:01:06,200 --> 00:01:09,840
Speaker 1: strongest quarters in our history. Let's talk a bit about

17
00:01:09,840 --> 00:01:12,600
Speaker 1: growth here. For certainly the administration is talking about it's

18
00:01:12,600 --> 00:01:14,280
Speaker 1: still holding firm to the fact that we're gonna get

19
00:01:14,280 --> 00:01:16,480
Speaker 1: to three or four percent growth. In light of what

20
00:01:16,480 --> 00:01:18,520
Speaker 1: we've seen with healthcare last night, in light of what's

21
00:01:18,520 --> 00:01:21,319
Speaker 1: going on or not going on in Washington. What's your

22
00:01:21,400 --> 00:01:23,120
Speaker 1: sense of of where things are headed when it comes

23
00:01:23,120 --> 00:01:27,199
Speaker 1: to growth here in the US also trend growth independent

24
00:01:27,200 --> 00:01:30,559
Speaker 1: of policy in twenty seventeen of two and a quarter

25
00:01:30,600 --> 00:01:33,440
Speaker 1: percent growth, So next year we're looking at something like

26
00:01:33,520 --> 00:01:35,520
Speaker 1: two and a half. I think if you're going to

27
00:01:35,560 --> 00:01:37,679
Speaker 1: get the three percent, you really do need to tackle

28
00:01:37,720 --> 00:01:41,440
Speaker 1: the issues with respect to infrastructure spending and tax reform

29
00:01:41,600 --> 00:01:43,560
Speaker 1: or tax cuts. So we wun't want to call it

30
00:01:43,880 --> 00:01:46,720
Speaker 1: so you know, right now, the initiative seems to be

31
00:01:47,440 --> 00:01:49,840
Speaker 1: staying with the trend growth for US in the United States.

32
00:01:49,840 --> 00:01:53,880
Speaker 1: Good consumer but not not a leg up in terms

33
00:01:53,880 --> 00:01:56,320
Speaker 1: of getting that three to four percent. Dr Sylvia, How

34
00:01:56,400 --> 00:01:59,200
Speaker 1: much has the story changed here? We've seen monetary policy

35
00:01:59,240 --> 00:02:01,920
Speaker 1: being used here in the U S and globally, fiscal

36
00:02:01,960 --> 00:02:04,640
Speaker 1: policy has been on the back burner. I think that

37
00:02:04,680 --> 00:02:06,520
Speaker 1: we can say how much is that changing? How much

38
00:02:06,560 --> 00:02:08,440
Speaker 1: is that story changed here over these last few years. Well,

39
00:02:08,480 --> 00:02:11,559
Speaker 1: it's interesting, David, because there's a lot of background commentary

40
00:02:11,600 --> 00:02:14,440
Speaker 1: from people at the FED saying, you know, we we'd

41
00:02:14,480 --> 00:02:18,800
Speaker 1: like to get some fiscal stimulus, some fiscal change to

42
00:02:18,919 --> 00:02:23,080
Speaker 1: help us, you know, balance a little bit better economic policy,

43
00:02:23,120 --> 00:02:25,360
Speaker 1: but it doesn't seem to be happening. So once again

44
00:02:25,440 --> 00:02:28,200
Speaker 1: we're sort of dependent upon monetary policy. Now that's a

45
00:02:28,240 --> 00:02:31,200
Speaker 1: problem because right now, when you look at the monetary policy,

46
00:02:31,240 --> 00:02:33,880
Speaker 1: their intention is to raise rates and shrink the balance sheet.

47
00:02:34,280 --> 00:02:36,520
Speaker 1: It's going to be extremely difficult unless you get some

48
00:02:36,560 --> 00:02:39,240
Speaker 1: help on the fiscal side. Does the call for change

49
00:02:39,720 --> 00:02:42,440
Speaker 1: change when we see a personnel reconfiguration at the FED Reserve?

50
00:02:42,480 --> 00:02:44,240
Speaker 1: In other words, we've had this FED calling for more

51
00:02:44,280 --> 00:02:46,840
Speaker 1: fiscal policy, for the Congress to do more here in

52
00:02:46,880 --> 00:02:49,080
Speaker 1: the US. If we get new leadership at the at

53
00:02:49,120 --> 00:02:52,040
Speaker 1: the FED, as it seems likely we may, does that

54
00:02:52,120 --> 00:02:54,760
Speaker 1: change that relationship the effectiveness of the FEDS call for

55
00:02:54,840 --> 00:02:57,320
Speaker 1: more action on the fiscal side. No, I quite frankly,

56
00:02:57,360 --> 00:03:00,200
Speaker 1: don't feel it makes any difference whatsoever, David. I think

57
00:03:00,680 --> 00:03:04,560
Speaker 1: most private economists like myself see obviously there's an imbalance

58
00:03:04,600 --> 00:03:08,079
Speaker 1: in economic policy. There's a lot happening on monetary policy,

59
00:03:08,480 --> 00:03:11,959
Speaker 1: very little on fiscal policy. That imbalance is not good

60
00:03:12,000 --> 00:03:15,800
Speaker 1: for the economy. It creates some again distortions, as people

61
00:03:15,840 --> 00:03:18,200
Speaker 1: talk about when they're saying, well, interest rates are too

62
00:03:18,240 --> 00:03:23,000
Speaker 1: low and additional risk is being taken in the marketplace,

63
00:03:23,639 --> 00:03:26,200
Speaker 1: and okay, how do you correct that if you can't

64
00:03:26,240 --> 00:03:30,200
Speaker 1: get monetary policy um higher in terms of a more

65
00:03:30,280 --> 00:03:33,640
Speaker 1: neutral federal funds rate? As Chair Yelling has talked about,

66
00:03:33,840 --> 00:03:37,080
Speaker 1: how did the flavor of monetary policy change at that

67
00:03:37,160 --> 00:03:39,720
Speaker 1: meeting in Portugal? Portugal a few weeks bank wheres the

68
00:03:39,760 --> 00:03:42,280
Speaker 1: FED was not a participant in the ECB meeting, but

69
00:03:42,360 --> 00:03:44,280
Speaker 1: you had a number of central bankers coming together and

70
00:03:44,320 --> 00:03:48,440
Speaker 1: talking about a path forward. How aligned our central banks

71
00:03:48,440 --> 00:03:51,480
Speaker 1: in Europe, in England and than here in the US. Well,

72
00:03:51,480 --> 00:03:54,720
Speaker 1: I think they're very much aligned in terms of their framework. Um,

73
00:03:54,760 --> 00:03:58,040
Speaker 1: they're focused on the inflation, they're focused on economic growth.

74
00:03:58,400 --> 00:04:01,320
Speaker 1: And what we've seen, especially in the commentary this morning

75
00:04:01,840 --> 00:04:04,800
Speaker 1: with respected a Bank of England not getting the inflation

76
00:04:04,880 --> 00:04:07,720
Speaker 1: number as they expected, in the US not getting the

77
00:04:07,760 --> 00:04:11,840
Speaker 1: inflation number as we expected, and yet pretty solid economic

78
00:04:11,880 --> 00:04:16,120
Speaker 1: growth in Asia. So there's an interesting divergence. The framework

79
00:04:16,200 --> 00:04:18,200
Speaker 1: is the same, but the data that goes into that

80
00:04:18,240 --> 00:04:20,080
Speaker 1: framework is for it. I just came up with a chart.

81
00:04:20,120 --> 00:04:22,920
Speaker 1: You're so smart, John Sylvia making charts for me. By

82
00:04:23,000 --> 00:04:26,039
Speaker 1: the moment Good morning everyone, John Sylvia with us of course,

83
00:04:26,040 --> 00:04:30,160
Speaker 1: Good morning Boston, Bloomberg one or six one FM. Thrilled

84
00:04:30,200 --> 00:04:32,080
Speaker 1: to have you with us. You should know that Dr

85
00:04:32,160 --> 00:04:34,919
Speaker 1: Sylvia said he would not appear until Aaron Judge was

86
00:04:34,960 --> 00:04:38,359
Speaker 1: a slum. Can we get the guy to be traded

87
00:04:38,360 --> 00:04:40,520
Speaker 1: to the Red sax thinking you don't do a ruth

88
00:04:41,440 --> 00:04:44,440
Speaker 1: uh anti ruth or whatever you know? I think, Tom

89
00:04:44,440 --> 00:04:47,120
Speaker 1: it goes back to an old baseball saying about a

90
00:04:47,120 --> 00:04:52,440
Speaker 1: sophomore jinx. Yeah, first time through the league, he dominates.

91
00:04:52,920 --> 00:04:55,359
Speaker 1: Second time through. Now the learning how to pitch to

92
00:04:55,440 --> 00:04:58,120
Speaker 1: him and it makes a big difference in performance. Now

93
00:04:58,160 --> 00:05:00,440
Speaker 1: the challenge for him is to a us to the

94
00:05:00,480 --> 00:05:03,200
Speaker 1: new way they pitch. It's back and back and forth.

95
00:05:03,360 --> 00:05:05,760
Speaker 1: I want to see the security, David gurl So we

96
00:05:05,800 --> 00:05:09,840
Speaker 1: need to adjust to the new top one. Robert Caplan,

97
00:05:10,160 --> 00:05:13,800
Speaker 1: we were we were stopped in our tracks when Mr

98
00:05:13,920 --> 00:05:18,320
Speaker 1: Caplin of the Dallas Fed said, pricing power is not there.

99
00:05:18,800 --> 00:05:20,600
Speaker 1: Is that what we're gonna be talking about a year

100
00:05:20,640 --> 00:05:23,719
Speaker 1: from now. I think your nominal GDP chart says that.

101
00:05:23,880 --> 00:05:26,320
Speaker 1: I think with respect to what are you hearing on

102
00:05:26,400 --> 00:05:29,200
Speaker 1: your context when they let you off the stage, Coach

103
00:05:30,720 --> 00:05:32,920
Speaker 1: no there isn't a lot of pricing power. I think

104
00:05:33,000 --> 00:05:35,440
Speaker 1: it's far more pervasive. When you look at the consumer

105
00:05:35,440 --> 00:05:39,640
Speaker 1: price index, there are a number of sectors use car prices,

106
00:05:39,720 --> 00:05:44,919
Speaker 1: apparel prices, for scription prices, even owners equivalent rent is

107
00:05:44,960 --> 00:05:47,799
Speaker 1: now weaker. And I think what Cha Yellen was saying

108
00:05:47,880 --> 00:05:49,839
Speaker 1: is it's going to be more difficult for us to

109
00:05:49,880 --> 00:05:52,920
Speaker 1: get a two percent TAGA. We expect the PC to

110
00:05:53,000 --> 00:05:56,040
Speaker 1: flaida to maybe hit two percent for the second half

111
00:05:56,080 --> 00:05:59,000
Speaker 1: of but certainly not by the end of this year.

112
00:05:59,160 --> 00:06:01,120
Speaker 1: What do you see when you look at the consumer

113
00:06:01,200 --> 00:06:02,720
Speaker 1: right now in the US? When you look at the

114
00:06:02,800 --> 00:06:05,120
Speaker 1: retail sector, which Tom and I have talked about time

115
00:06:05,120 --> 00:06:06,920
Speaker 1: and time again. You look at the indication series, you

116
00:06:06,920 --> 00:06:09,000
Speaker 1: walk along the streets of Manhattan, shops are closing. It

117
00:06:09,000 --> 00:06:10,760
Speaker 1: seems like there's a lot of pressure on the retail set.

118
00:06:10,920 --> 00:06:13,640
Speaker 1: How's the consumer doing well? The consumer in general is

119
00:06:13,680 --> 00:06:16,400
Speaker 1: doing doing very well. What they're doing is shifting how

120
00:06:16,480 --> 00:06:20,360
Speaker 1: they purchase goods and services. And again that's the pricing problem.

121
00:06:20,440 --> 00:06:24,200
Speaker 1: The price discovery of going on the internet looking at

122
00:06:24,279 --> 00:06:27,640
Speaker 1: four different stores or one different site for five different

123
00:06:27,680 --> 00:06:31,000
Speaker 1: items all you know, shoes or whatever it is, and

124
00:06:31,040 --> 00:06:33,520
Speaker 1: you're saying that the pricing prower isn't there, but the

125
00:06:33,520 --> 00:06:36,279
Speaker 1: consumer is still spending, and they're spending very well. The

126
00:06:36,320 --> 00:06:39,600
Speaker 1: ability to look out hotel bills, um, they look at,

127
00:06:40,080 --> 00:06:44,200
Speaker 1: you know, rental cars tells me you don't have pricing power,

128
00:06:44,240 --> 00:06:46,320
Speaker 1: but the consumer is willing to spend. And when it

129
00:06:46,320 --> 00:06:48,120
Speaker 1: comes to sentiment, what are you you seeing? How much

130
00:06:48,160 --> 00:06:51,039
Speaker 1: do you prize those sort of soft indicators when it

131
00:06:51,040 --> 00:06:53,920
Speaker 1: comes to economic data, Well, I think you know right

132
00:06:53,960 --> 00:06:57,000
Speaker 1: now the consumer and small businesses are much happier than

133
00:06:57,040 --> 00:06:59,799
Speaker 1: they were six months or a year ago. But again,

134
00:07:00,000 --> 00:07:03,760
Speaker 1: putting something into action depends upon confidence that you're going

135
00:07:03,800 --> 00:07:06,760
Speaker 1: to have the job next year, and or for a business,

136
00:07:06,760 --> 00:07:09,720
Speaker 1: you're going to have better final sales next year. And

137
00:07:09,840 --> 00:07:12,120
Speaker 1: right now it doesn't seem to be any reason to

138
00:07:12,320 --> 00:07:15,400
Speaker 1: shift going forward. If I got another two percent GDP,

139
00:07:15,520 --> 00:07:20,440
Speaker 1: go ahead. Your labor work is definitive within market economics.

140
00:07:21,240 --> 00:07:24,400
Speaker 1: Our audience doesn't care about all the mumbo jumble. They're

141
00:07:24,400 --> 00:07:27,240
Speaker 1: just looking at no wage growth. They're looking at two

142
00:07:27,320 --> 00:07:30,280
Speaker 1: or even three Americans. Some of our audience is part

143
00:07:30,280 --> 00:07:34,880
Speaker 1: of that prosperous America that you mentioned in television earlier.

144
00:07:35,520 --> 00:07:39,560
Speaker 1: How do we get this economy back to a spirit

145
00:07:40,120 --> 00:07:45,160
Speaker 1: that includes more Americans. To include more Americans, you have

146
00:07:45,240 --> 00:07:48,400
Speaker 1: to broaden out the economic recovery. It was one of

147
00:07:48,440 --> 00:07:50,840
Speaker 1: the gifts of the of the Clinton era that as

148
00:07:50,920 --> 00:07:55,200
Speaker 1: economic growth improved, you did see a broadening out of

149
00:07:55,240 --> 00:07:58,040
Speaker 1: economic recovery. You brought a lot more people in. Now

150
00:07:58,080 --> 00:08:00,680
Speaker 1: it's a little bit more difficult to do that, and

151
00:08:00,720 --> 00:08:03,119
Speaker 1: we've not done that yet. You've got to get people

152
00:08:03,320 --> 00:08:05,280
Speaker 1: enough confidence, and you don't see it in the labor

153
00:08:05,320 --> 00:08:08,040
Speaker 1: force participation. Right. You're in the South. I mean, it's

154
00:08:08,120 --> 00:08:11,600
Speaker 1: it's impossible David Gored to understand John Sylvia's distance from

155
00:08:11,640 --> 00:08:14,600
Speaker 1: Fenway Park and the trauma it's done to his family.

156
00:08:14,920 --> 00:08:18,800
Speaker 1: You're in the deep South of North Deeping. I'm just

157
00:08:18,840 --> 00:08:22,120
Speaker 1: gona bustings chops here, folks. You're in the deep South.

158
00:08:22,480 --> 00:08:25,800
Speaker 1: How do we make big Switzerland in America? How do

159
00:08:25,880 --> 00:08:29,880
Speaker 1: we make a manufacturing combine where yourself is led to

160
00:08:29,920 --> 00:08:36,120
Speaker 1: be blunt? Better skills looking at corporations. I know skills.

161
00:08:36,160 --> 00:08:40,720
Speaker 1: But tax policy, well, tax policy will work in certain areas,

162
00:08:40,760 --> 00:08:43,000
Speaker 1: but it's more of the federal tax policy, not the

163
00:08:43,160 --> 00:08:45,840
Speaker 1: not the local tax policy that that you're just shifting

164
00:08:45,840 --> 00:08:49,559
Speaker 1: between one state and another the competition between South Carolina

165
00:08:49,600 --> 00:08:53,199
Speaker 1: and North Carolina. But it is at the national level.

166
00:08:53,559 --> 00:08:57,280
Speaker 1: How do you provide better returns? Are better incentives for investment?

167
00:08:58,960 --> 00:09:00,680
Speaker 1: Let's come back here. Just a bit with John Sylvia

168
00:09:00,800 --> 00:09:05,319
Speaker 1: was just a surveillance sneeze. Excuse me, folks, Well, I'm sorry,

169
00:09:05,880 --> 00:09:08,000
Speaker 1: I thought you were gonna make a pregnant point. Uh.

170
00:09:08,160 --> 00:09:10,520
Speaker 1: Welcome back here with John Sylvia, chief economist at Wells Fargo.

171
00:09:10,559 --> 00:09:13,440
Speaker 1: Talk a bit more about trade here, trade policy going forward.

172
00:09:13,440 --> 00:09:16,400
Speaker 1: Factor this into trade policy globally. Is the US prepares

173
00:09:16,480 --> 00:09:19,000
Speaker 1: to me with Chinese leadership in Washington, David, to me,

174
00:09:19,080 --> 00:09:22,440
Speaker 1: this is a huge, huge deal. We are back this

175
00:09:22,480 --> 00:09:28,040
Speaker 1: morning to a under three percent belief in American growth.

176
00:09:28,320 --> 00:09:31,160
Speaker 1: To a huge body of our listeners, I would suggest

177
00:09:31,200 --> 00:09:34,160
Speaker 1: that's just not acceptable. It's not acceptable for them, it's

178
00:09:34,160 --> 00:09:39,000
Speaker 1: not acceptable for the kids. John Sylvia, your Fall River, Massachusetts.

179
00:09:39,400 --> 00:09:42,280
Speaker 1: It's near the water, it's near a big, fancy city.

180
00:09:42,280 --> 00:09:45,320
Speaker 1: Good morning, one of six one FM, Boston. Everything should

181
00:09:45,360 --> 00:09:48,160
Speaker 1: be going right for Fall River. The population in n

182
00:09:49,280 --> 00:09:52,120
Speaker 1: was a hundred and twenty thousand, and it's now thirty

183
00:09:52,200 --> 00:09:55,839
Speaker 1: some forty some percent below that eighty nine thousand as

184
00:09:55,880 --> 00:10:00,000
Speaker 1: of two thousand sixteen. It's the d peopling of these times.

185
00:10:00,600 --> 00:10:05,640
Speaker 1: There's got to be a policy to jump start manufacturing.

186
00:10:06,040 --> 00:10:08,679
Speaker 1: Where you grew up in Fall River and the many

187
00:10:08,760 --> 00:10:12,080
Speaker 1: Fall rivers across America, Well, the policy has to be

188
00:10:12,280 --> 00:10:15,240
Speaker 1: to improve the capital or business expense in terms of

189
00:10:15,320 --> 00:10:19,920
Speaker 1: technology and or improving labor. Is that combination of capital

190
00:10:20,040 --> 00:10:24,559
Speaker 1: labor that makes these communities competitive, and that's not been

191
00:10:24,600 --> 00:10:27,560
Speaker 1: the focus. It was oftentimes the textiles of leaving, or

192
00:10:27,559 --> 00:10:31,000
Speaker 1: the shoe industry was leaving. And it's an inability or

193
00:10:31,040 --> 00:10:35,160
Speaker 1: unwillingness to reinvent themselves. How do you you know, you

194
00:10:35,200 --> 00:10:37,079
Speaker 1: look at where we're talking about North Carolina here during

195
00:10:37,080 --> 00:10:40,000
Speaker 1: the break and how Charlotte's doing well, research triangles doing well.

196
00:10:40,000 --> 00:10:43,920
Speaker 1: You've got academic institutions there. How our colleague Michael mckewey

197
00:10:43,920 --> 00:10:45,559
Speaker 1: was in Boston just a few weeks ago looking at

198
00:10:45,559 --> 00:10:48,439
Speaker 1: the economy. They're looking at m I T. Harvard, the

199
00:10:48,480 --> 00:10:51,080
Speaker 1: influence that they have on getting people trained, getting them

200
00:10:51,080 --> 00:10:53,120
Speaker 1: to stay in Boston. When you look at places that

201
00:10:53,160 --> 00:10:56,520
Speaker 1: don't have those institutions, how far behind are there? Well,

202
00:10:56,640 --> 00:11:00,680
Speaker 1: unfortunately they're behind, and they're falling further line. You've got

203
00:11:00,720 --> 00:11:03,160
Speaker 1: to be able to improve. For example, there was an

204
00:11:03,160 --> 00:11:09,079
Speaker 1: effort to improve biotech in many regional colleges. Again, that's

205
00:11:09,120 --> 00:11:13,640
Speaker 1: an effort to really to improve technology and again the

206
00:11:13,720 --> 00:11:18,520
Speaker 1: expertise of the people. But that's the challenges getting at cities. Again,

207
00:11:18,880 --> 00:11:24,160
Speaker 1: as Tom was kind to mention, forever no major college

208
00:11:24,160 --> 00:11:28,920
Speaker 1: institution is there. Uh, Southeastern Massachusetts is in Dartmouth, which

209
00:11:28,960 --> 00:11:32,680
Speaker 1: is ten twenty miles away. Um. Again without that major

210
00:11:32,920 --> 00:11:36,640
Speaker 1: educational institution as an anchor to bring in talent but

211
00:11:36,760 --> 00:11:39,960
Speaker 1: also to broaden the education of the groups in terms

212
00:11:40,040 --> 00:11:43,680
Speaker 1: of civic speeches, et cetera. It's extremely challenging. Talk a

213
00:11:43,720 --> 00:11:45,640
Speaker 1: bit about trade here. If we could lease last years,

214
00:11:45,880 --> 00:11:47,880
Speaker 1: Tomorrow with the leadership of the US is gonna beat

215
00:11:47,880 --> 00:11:49,760
Speaker 1: the leadership at China and Washington, d C. They're gonna

216
00:11:49,760 --> 00:11:52,280
Speaker 1: have a dialogue that was planned when President trumpan with

217
00:11:52,320 --> 00:11:55,120
Speaker 1: President she Mar lag on florty three months ago. What

218
00:11:55,240 --> 00:11:56,600
Speaker 1: do you expect to come out of that. We're waiting

219
00:11:56,640 --> 00:11:58,440
Speaker 1: for this report on steel. We're waiting to see some

220
00:11:58,480 --> 00:12:01,360
Speaker 1: details on what the administration plans to do or would

221
00:12:01,400 --> 00:12:03,160
Speaker 1: like to do with with NAPTA. Should they have the

222
00:12:03,200 --> 00:12:06,680
Speaker 1: opportunity to renegotiate that that trade deal. How big of

223
00:12:06,840 --> 00:12:08,280
Speaker 1: an X factory is this for you here as you

224
00:12:08,320 --> 00:12:10,839
Speaker 1: look at the economy, look at the U S economy, Well, David,

225
00:12:10,920 --> 00:12:13,760
Speaker 1: for me, it's a very big X factor. We are

226
00:12:13,800 --> 00:12:16,960
Speaker 1: in truly a global economy. It's very simple to say that.

227
00:12:17,600 --> 00:12:21,040
Speaker 1: But we have significant trading relationships and we're going to

228
00:12:21,320 --> 00:12:26,360
Speaker 1: deal with Mexico in Canada and the euro Community and

229
00:12:26,440 --> 00:12:28,920
Speaker 1: the UK and China for the next fifty to one

230
00:12:28,960 --> 00:12:33,280
Speaker 1: hundred years. Dealing with trade is absolutely essential. We import

231
00:12:33,280 --> 00:12:36,120
Speaker 1: a lot we export a lot um and we just

232
00:12:36,160 --> 00:12:40,560
Speaker 1: can't be just cutting down channels of trade going forward.

233
00:12:40,559 --> 00:12:43,760
Speaker 1: To maintain our competitiveness, we have to import some of

234
00:12:43,800 --> 00:12:45,600
Speaker 1: the best goods around the world. Do we have a

235
00:12:45,640 --> 00:12:48,199
Speaker 1: better sense now six months into this administration of what

236
00:12:48,240 --> 00:12:51,000
Speaker 1: the trade policy is to other countries? And no sort

237
00:12:51,040 --> 00:12:54,320
Speaker 1: of what Secretary Ross, Robert Lighthiser the Lotter are trying

238
00:12:54,360 --> 00:12:55,880
Speaker 1: to do here when it comes to trade. You know,

239
00:12:55,920 --> 00:13:00,719
Speaker 1: it's interesting, David. I do hear some positive plementary from

240
00:13:00,800 --> 00:13:04,160
Speaker 1: some of the elements of the Trump administration on trade,

241
00:13:04,960 --> 00:13:08,200
Speaker 1: but I think in the overall flow of things, um,

242
00:13:08,320 --> 00:13:10,640
Speaker 1: you don't have a sense that there's an overall direction

243
00:13:10,640 --> 00:13:13,640
Speaker 1: of where policy is going. I hear good things at

244
00:13:14,040 --> 00:13:18,000
Speaker 1: the company level, at the cabinet level, I would like

245
00:13:18,040 --> 00:13:20,080
Speaker 1: to hear more in terms of what's coming from the

246
00:13:20,080 --> 00:13:23,160
Speaker 1: White House. How about in Europe, We've seen it your

247
00:13:23,280 --> 00:13:25,760
Speaker 1: coalesced together after the U S presidential election, after the

248
00:13:25,760 --> 00:13:28,680
Speaker 1: Brexit vote in the UK and the subsequent snap election.

249
00:13:28,960 --> 00:13:31,920
Speaker 1: When it comes to trade, how's Europe doing well? The

250
00:13:31,920 --> 00:13:34,280
Speaker 1: Europe again continues to do very well. In fact, one

251
00:13:34,280 --> 00:13:37,960
Speaker 1: of the complaints, of course is the trade surplus for Germany,

252
00:13:38,040 --> 00:13:41,640
Speaker 1: but in terms of competitiveness, in terms again their willingness

253
00:13:41,760 --> 00:13:45,280
Speaker 1: to make a deal with the Chinese, to make a

254
00:13:45,320 --> 00:13:48,000
Speaker 1: deal with the Middle East. Um, they seem to be

255
00:13:48,040 --> 00:13:51,560
Speaker 1: a we're deal makers in Europe. That's what we're gonna do.

256
00:13:51,960 --> 00:13:54,920
Speaker 1: And we're not going to be great philosophical people about this.

257
00:13:55,040 --> 00:13:57,600
Speaker 1: The philosophy is behind us. We're going to do the deal.

258
00:13:57,880 --> 00:14:01,080
Speaker 1: John Sylvia, thank you so much. Was further great conversation

259
00:14:01,160 --> 00:14:03,960
Speaker 1: this morning. Here as we look at uh the amazing

260
00:14:03,960 --> 00:14:07,760
Speaker 1: shift David from CenTra in coordinated central banks to the

261
00:14:07,800 --> 00:14:11,679
Speaker 1: reality of a slower major economy and emerging economy is

262
00:14:11,720 --> 00:14:14,320
Speaker 1: doing better. You wonder if we'll get through July with

263
00:14:14,360 --> 00:14:17,160
Speaker 1: that belief. But that's where you are this morning. Then

264
00:14:17,160 --> 00:14:19,800
Speaker 1: on to Jackson Hole may learn more. I suppose well,

265
00:14:20,200 --> 00:14:23,080
Speaker 1: Jackson is always a surprise. We can talk about that.

266
00:14:35,080 --> 00:14:39,160
Speaker 1: Why don't you bring in our esteemed guests, particularly this

267
00:14:39,240 --> 00:14:43,440
Speaker 1: day was Senator Senate Majority Leader McConnell front and center

268
00:14:43,480 --> 00:14:45,560
Speaker 1: in the news. Yeah, Leader McConnell reading the writing on

269
00:14:45,600 --> 00:14:48,160
Speaker 1: the wall last night as Senators Mike Lee of Utah

270
00:14:48,160 --> 00:14:49,960
Speaker 1: and Jeremy ran Off Kansas said they would not be

271
00:14:50,000 --> 00:14:52,040
Speaker 1: able to vote for a revised piece of legislation that

272
00:14:52,040 --> 00:14:55,920
Speaker 1: would have fundamentally changed a Affordable Care Act. UH Leader

273
00:14:55,960 --> 00:14:58,160
Speaker 1: mcconnall gonna meet with his caucus today talk about a

274
00:14:58,200 --> 00:15:00,200
Speaker 1: path forward when it comes to healthcare from I'll out

275
00:15:00,200 --> 00:15:02,960
Speaker 1: here the President of the United States tweeting just a

276
00:15:03,000 --> 00:15:05,880
Speaker 1: minute ago here quote, as I have always said, let

277
00:15:05,920 --> 00:15:09,480
Speaker 1: Obamacare fail and then come together and do a great

278
00:15:09,480 --> 00:15:12,600
Speaker 1: healthcare plan. Stay tuned. We go out of John Lieber,

279
00:15:12,680 --> 00:15:14,760
Speaker 1: he's a U S practice director with the Eurasia Group,

280
00:15:14,880 --> 00:15:18,120
Speaker 1: importantly for US former Principal advisor on Economic Policy, to

281
00:15:18,120 --> 00:15:20,560
Speaker 1: Sendate Majority Leader Mitch McConnell. He joins us on our

282
00:15:20,600 --> 00:15:22,720
Speaker 1: phone lines. President Trump there a second moment ago. As

283
00:15:22,760 --> 00:15:25,600
Speaker 1: I have always said, let Obamacare failed. John, you're an

284
00:15:25,600 --> 00:15:27,880
Speaker 1: observer of this. You're in the trenches for so long.

285
00:15:28,040 --> 00:15:32,520
Speaker 1: Is this what President Trump has been saying all along? Uh?

286
00:15:32,680 --> 00:15:35,080
Speaker 1: Not exactly. He started off by saying he's going to

287
00:15:35,200 --> 00:15:38,480
Speaker 1: repeal Obamacare, and then he pivoted and said he wants

288
00:15:38,480 --> 00:15:42,440
Speaker 1: an immediate replacement to Obamacare. And now he's telling folks

289
00:15:42,440 --> 00:15:44,200
Speaker 1: of that now that that's obviously not going to happen,

290
00:15:44,400 --> 00:15:47,440
Speaker 1: that he wants to see Obamacare sale and then get

291
00:15:47,440 --> 00:15:49,520
Speaker 1: everyone together and try to replace it. I guess on

292
00:15:49,560 --> 00:15:51,800
Speaker 1: a bi parties and basis, and there is room for

293
00:15:51,840 --> 00:15:53,880
Speaker 1: bi parties in legislation here. I think there is a

294
00:15:53,920 --> 00:15:56,240
Speaker 1: fix that could pass the House and Senate. Um. It'll

295
00:15:56,280 --> 00:15:59,040
Speaker 1: take some time to get there, though. As as a staffer,

296
00:15:59,080 --> 00:16:01,440
Speaker 1: as a senator, what kind of engagement do you want

297
00:16:01,520 --> 00:16:04,480
Speaker 1: from the White House. We've seen the president way in here,

298
00:16:04,480 --> 00:16:07,400
Speaker 1: particularly as it comes close to a bill getting to

299
00:16:07,440 --> 00:16:11,240
Speaker 1: the floor, comes close to a vote. Uh. How would

300
00:16:11,280 --> 00:16:14,280
Speaker 1: you characterize the engagement of this president with legislative affairs

301
00:16:14,360 --> 00:16:18,160
Speaker 1: on Capitol Hill? Um? I think that legislatively he's been

302
00:16:18,280 --> 00:16:20,880
Speaker 1: very weak. I think that reflects the reality that you

303
00:16:20,920 --> 00:16:24,000
Speaker 1: know this is a controversial president. Uh, most Republicans in

304
00:16:24,080 --> 00:16:26,160
Speaker 1: the party probably didn't want him to be their nominee

305
00:16:26,200 --> 00:16:28,920
Speaker 1: in the first place, and right now he's not particularly

306
00:16:28,960 --> 00:16:32,480
Speaker 1: effective at driving votes towards his agenda or driving popular

307
00:16:32,480 --> 00:16:36,960
Speaker 1: opinion towards agenda. Provide clarity, John, as we get our

308
00:16:37,000 --> 00:16:39,360
Speaker 1: first tweets, we get John Liebert tweets which are of

309
00:16:39,360 --> 00:16:43,320
Speaker 1: a ment vailue. We're enjoying two presidential tweets in the

310
00:16:43,400 --> 00:16:46,680
Speaker 1: last ten minutes, one of them as I have always said,

311
00:16:46,960 --> 00:16:50,760
Speaker 1: let Obamacare fail and then come together and do a

312
00:16:50,840 --> 00:16:55,240
Speaker 1: great health care plan. Stay tuned. Am I right that

313
00:16:55,360 --> 00:16:59,840
Speaker 1: they're not letting Obamacare fail? In the Senate majority of

314
00:16:59,880 --> 00:17:04,960
Speaker 1: the you got their heart's desire, they would simply delay Obamacare.

315
00:17:05,200 --> 00:17:09,240
Speaker 1: Can we really say let it fail? Well, I think

316
00:17:09,280 --> 00:17:13,040
Speaker 1: where you're headed is a large amount of federal support

317
00:17:13,200 --> 00:17:15,840
Speaker 1: for the insurance companies so that they continue to sell

318
00:17:16,320 --> 00:17:20,080
Speaker 1: in the currently unprofitable exchanges. Um. That was where McConnell

319
00:17:20,119 --> 00:17:22,040
Speaker 1: was headed about a month ago when he was warning

320
00:17:22,040 --> 00:17:25,160
Speaker 1: his members, as they didn't pass this repeal and replace bill,

321
00:17:25,400 --> 00:17:27,760
Speaker 1: they were going to have to pivot to what's essentially

322
00:17:27,760 --> 00:17:30,800
Speaker 1: at a health insurance company bailout. And that's because the

323
00:17:30,800 --> 00:17:34,560
Speaker 1: Obamacare marketplaces, the individual exchanges, are failing and the federal

324
00:17:34,640 --> 00:17:37,200
Speaker 1: government's gonna have to step in. So Trump and McConnell

325
00:17:37,240 --> 00:17:39,879
Speaker 1: are are sort of diverging on the same or converging

326
00:17:40,160 --> 00:17:41,879
Speaker 1: on the same plan right now. They're just kind of

327
00:17:41,920 --> 00:17:44,320
Speaker 1: talking about it in different ways. How the challenge is

328
00:17:44,359 --> 00:17:46,119
Speaker 1: going to be getting Democrats on board right now. They

329
00:17:46,160 --> 00:17:48,200
Speaker 1: don't have a lot of goodwill on the other side

330
00:17:48,240 --> 00:17:49,800
Speaker 1: of the aisle, and it's going to take some work

331
00:17:49,840 --> 00:17:52,639
Speaker 1: to uh, to both get Democrats on board and to

332
00:17:52,640 --> 00:17:56,040
Speaker 1: convince conservative Republicans that the health insurance bail out is

333
00:17:56,119 --> 00:17:59,359
Speaker 1: something that's needed to keep you know, exchanges operating in

334
00:17:59,400 --> 00:18:01,960
Speaker 1: their states. How do you begin to do that, John Labor?

335
00:18:02,320 --> 00:18:04,919
Speaker 1: You look at the way that this process is unfolded. Uh,

336
00:18:05,000 --> 00:18:07,240
Speaker 1: the bill itself was crafted with a very small group

337
00:18:07,280 --> 00:18:09,840
Speaker 1: of Senators that was then brought to the wider caucus

338
00:18:09,840 --> 00:18:12,080
Speaker 1: Democrats from the get go, so they weren't interested in

339
00:18:12,240 --> 00:18:15,600
Speaker 1: really and engaging with this process. Visa this particular piece

340
00:18:15,640 --> 00:18:18,399
Speaker 1: of legislation is somebody who's worked on Capitol Hill, you know,

341
00:18:18,440 --> 00:18:20,560
Speaker 1: how to reach out across the aisle. How do you

342
00:18:20,600 --> 00:18:23,320
Speaker 1: begin to do that make this something that Democrats want

343
00:18:23,320 --> 00:18:26,200
Speaker 1: to engage with. Well, one thing we always used to

344
00:18:26,240 --> 00:18:28,280
Speaker 1: look for on Capitol Hill is what we call action

345
00:18:28,320 --> 00:18:31,760
Speaker 1: forcing events, and generally that's something like a really tough

346
00:18:31,800 --> 00:18:34,680
Speaker 1: deadline or a situation where you have a must pass

347
00:18:34,680 --> 00:18:37,280
Speaker 1: piece of legislation. And there are several of those on

348
00:18:37,280 --> 00:18:40,080
Speaker 1: the horizon. There's a dent limit, there's the government funding

349
00:18:40,080 --> 00:18:43,320
Speaker 1: bill on the September. There's also a re authorization of

350
00:18:43,359 --> 00:18:46,280
Speaker 1: a children's health insurance program. And any one of these

351
00:18:46,520 --> 00:18:50,439
Speaker 1: could be vehicles for forcing a conversation about um, you know,

352
00:18:50,480 --> 00:18:53,880
Speaker 1: helping insurance companies or helping the Obamacare exchanges stay viable.

353
00:18:54,160 --> 00:18:56,320
Speaker 1: But the politics here aren't great though. I mean think

354
00:18:56,320 --> 00:18:58,879
Speaker 1: the reality is that the obamacarey is not living up

355
00:18:58,920 --> 00:19:01,119
Speaker 1: to its promises. Uh, A lot of people are in

356
00:19:01,200 --> 00:19:05,040
Speaker 1: danger of losing their insurance, and the Democrats Republicans want

357
00:19:05,040 --> 00:19:08,480
Speaker 1: to go about based on that conversation. Take some time

358
00:19:08,600 --> 00:19:10,800
Speaker 1: exactly what you just said. I see no one centive

359
00:19:10,800 --> 00:19:14,000
Speaker 1: for the Democrats to do anything but enjoy the soap

360
00:19:14,040 --> 00:19:16,960
Speaker 1: opera or Senate Senate, Senate. I know, John Lieber, you

361
00:19:17,080 --> 00:19:20,639
Speaker 1: worked for Senator McConnell is Speaker Ryan going to do

362
00:19:20,680 --> 00:19:22,840
Speaker 1: a banger. I mean, is he in such a difficult

363
00:19:22,880 --> 00:19:26,680
Speaker 1: position that even if he did the kind of normal

364
00:19:26,880 --> 00:19:29,720
Speaker 1: politics that you speak of, that he would be enjoying

365
00:19:29,720 --> 00:19:36,240
Speaker 1: the porch in Janesville, Wisconsin. Um, Yeah, you know, I

366
00:19:36,280 --> 00:19:39,040
Speaker 1: think that Ryan is going to have some troubles. You know.

367
00:19:39,080 --> 00:19:40,879
Speaker 1: I think that you can do things on a bipartisan

368
00:19:40,920 --> 00:19:42,919
Speaker 1: basis when you need to in the House, but you

369
00:19:42,960 --> 00:19:44,840
Speaker 1: can only go back to that well so many times.

370
00:19:45,240 --> 00:19:47,119
Speaker 1: So Ryan really has to be careful and taking his

371
00:19:47,160 --> 00:19:50,600
Speaker 1: battles here. Does he want to spend the bipartisanship on

372
00:19:50,640 --> 00:19:52,439
Speaker 1: the dent limit because he want to spend it on

373
00:19:52,480 --> 00:19:54,399
Speaker 1: an insurer bailout? Because he want to spend it on

374
00:19:54,480 --> 00:19:56,720
Speaker 1: keeping the government funded? And I think the Ryan's got

375
00:19:56,800 --> 00:19:58,720
Speaker 1: to be a little strategic and how he goes about

376
00:19:58,720 --> 00:20:01,920
Speaker 1: deciding when he's in a with Democrats uh in the House,

377
00:20:02,280 --> 00:20:05,080
Speaker 1: and when he's gonna try to ram through a partisan agenda. John,

378
00:20:05,080 --> 00:20:06,800
Speaker 1: you know how this process works. And I just want

379
00:20:06,840 --> 00:20:08,919
Speaker 1: to ask you how this process played out versus how

380
00:20:08,960 --> 00:20:11,240
Speaker 1: it's played out with other pieces of legislation. I wonder

381
00:20:11,280 --> 00:20:13,719
Speaker 1: if this was a fool's errand to to begin with,

382
00:20:13,800 --> 00:20:16,159
Speaker 1: you had this piece of legislation advancing out of the

383
00:20:16,200 --> 00:20:19,520
Speaker 1: House of Representatives after a few starts and stumbles, moves

384
00:20:19,560 --> 00:20:21,040
Speaker 1: over to the Senate. The Senate says they want to

385
00:20:21,040 --> 00:20:23,920
Speaker 1: write a bill of their own. Um, this sort of

386
00:20:24,000 --> 00:20:27,280
Speaker 1: dual track process. How how out of the ordinary was

387
00:20:27,320 --> 00:20:30,320
Speaker 1: the way all of this unfolded? I mean, traditionally, the

388
00:20:30,320 --> 00:20:32,400
Speaker 1: way things have been done is the House passes the bill,

389
00:20:32,480 --> 00:20:34,480
Speaker 1: the Senate passes a bill, and the two chambers trying

390
00:20:34,480 --> 00:20:36,960
Speaker 1: to figure out how they're going to reconcile those two

391
00:20:36,960 --> 00:20:40,000
Speaker 1: bills together. And that's kind of business is normal. You've

392
00:20:40,040 --> 00:20:42,959
Speaker 1: got a partisan alignment right now. That's helping the Republicans

393
00:20:43,000 --> 00:20:45,480
Speaker 1: at least try to all roll and row in the

394
00:20:45,520 --> 00:20:48,359
Speaker 1: same direction. But that's obviously proving difficult because in the

395
00:20:48,400 --> 00:20:51,600
Speaker 1: Republican party throughout these massive divisions right now, Okay, are

396
00:20:51,640 --> 00:20:55,520
Speaker 1: we going to have a wise one, actually normal process

397
00:20:55,600 --> 00:20:58,919
Speaker 1: for tax reform. Has been some great media coverage of

398
00:20:58,960 --> 00:21:02,600
Speaker 1: the secrecy of the healthcare construction. Are we going to

399
00:21:02,720 --> 00:21:08,000
Speaker 1: have you know, tip O'Neil redux with t I doubt it.

400
00:21:08,000 --> 00:21:10,240
Speaker 1: I mean, I'd say the secrecy narrative is a little overblown.

401
00:21:10,359 --> 00:21:13,280
Speaker 1: Every bill is technical written behind closed doors. But on

402
00:21:13,320 --> 00:21:15,760
Speaker 1: tax reform, you've got a lot more partisan alignment, and

403
00:21:16,200 --> 00:21:18,600
Speaker 1: the House has been very explicit and saying they don't

404
00:21:18,600 --> 00:21:21,200
Speaker 1: want to move until there's a very clear path forward

405
00:21:21,240 --> 00:21:24,240
Speaker 1: in the Senate. So right now you've got Treasury Secretary

406
00:21:24,320 --> 00:21:28,040
Speaker 1: and Gary Cohen, the President's chief economic advisor, working very

407
00:21:28,040 --> 00:21:30,840
Speaker 1: closely with mcconow and Ryan to craft a tax bill

408
00:21:31,000 --> 00:21:33,359
Speaker 1: that everybody could rally around. So I think what they'll

409
00:21:33,359 --> 00:21:36,520
Speaker 1: eventually end up releasing, probably in you know, September October,

410
00:21:36,920 --> 00:21:39,600
Speaker 1: is a plan that's while the details so if you

411
00:21:39,720 --> 00:21:42,040
Speaker 1: worked out, is going to be mostly pre baked to

412
00:21:42,119 --> 00:21:43,960
Speaker 1: pass the Senate and the House and get to the

413
00:21:43,960 --> 00:21:47,080
Speaker 1: President's desk in as shorter in order as they can. John,

414
00:21:47,160 --> 00:21:49,480
Speaker 1: help us understand how your former boss, how the leader

415
00:21:49,840 --> 00:21:52,639
Speaker 1: accounts votes. We saw these two senators defect last night

416
00:21:52,720 --> 00:21:54,520
Speaker 1: so they couldn't vote for this piece of legislation that

417
00:21:54,640 --> 00:21:57,320
Speaker 1: was advanced in the U. S. Senate. How does he

418
00:21:57,400 --> 00:22:01,440
Speaker 1: go about convincing members of his cockies. I think that

419
00:22:01,600 --> 00:22:05,280
Speaker 1: in this case he just his message has been, look,

420
00:22:05,400 --> 00:22:07,960
Speaker 1: this is what we promised. We said we are going

421
00:22:08,000 --> 00:22:10,840
Speaker 1: to repeal and replace the Affordable Care Act. We've been

422
00:22:10,840 --> 00:22:12,879
Speaker 1: saying it for seven years, and if we do not

423
00:22:13,000 --> 00:22:15,719
Speaker 1: deliver on our promises, our voters are going to punish

424
00:22:15,760 --> 00:22:17,720
Speaker 1: us by not showing up in the fall. This is

425
00:22:17,760 --> 00:22:19,639
Speaker 1: something that you all said you wanted to do. And

426
00:22:19,680 --> 00:22:22,280
Speaker 1: you know he's not somebody who can force you. No,

427
00:22:22,280 --> 00:22:24,960
Speaker 1: no senator could force other senators to do something that's

428
00:22:24,960 --> 00:22:26,439
Speaker 1: against their will. It's going to hurt them in their

429
00:22:26,480 --> 00:22:29,000
Speaker 1: own states. But his job here is just to say

430
00:22:29,040 --> 00:22:31,040
Speaker 1: to folks, this is your choice. If you want to

431
00:22:31,040 --> 00:22:32,840
Speaker 1: pass this bill that you said you were going to pass,

432
00:22:33,000 --> 00:22:35,359
Speaker 1: here's your opportunity. Is never going to get better than this.

433
00:22:35,760 --> 00:22:37,959
Speaker 1: And in this case, you know, senators didn't listen. They

434
00:22:37,960 --> 00:22:39,840
Speaker 1: had different incentives and they didn't like the package that

435
00:22:39,920 --> 00:22:43,560
Speaker 1: was in front of him. Fascinating. I still, David have

436
00:22:43,680 --> 00:22:46,760
Speaker 1: trouble using the phrase repeal and replace. I am to

437
00:22:46,880 --> 00:22:49,320
Speaker 1: come up with something better. Maybe in our next section,

438
00:22:49,359 --> 00:22:52,399
Speaker 1: John Lieber can help us come up with phrases a

439
00:22:52,480 --> 00:22:55,680
Speaker 1: little more. I tried delay and replace, but I got

440
00:22:55,720 --> 00:22:58,880
Speaker 1: shot down that guys like liber like he's selling an amateur.

441
00:22:59,119 --> 00:23:01,080
Speaker 1: We're gonna come back with John Leeber working with the

442
00:23:01,080 --> 00:23:05,240
Speaker 1: in Premary Eraser group, really really thrilled if Mr Leeber

443
00:23:05,359 --> 00:23:07,080
Speaker 1: with us. Let me ask you a question, your John,

444
00:23:07,080 --> 00:23:10,520
Speaker 1: just about the path forward. How liberated are Republicans on

445
00:23:10,600 --> 00:23:13,000
Speaker 1: Capitol Hill Republicans in the Senate now to pursue a

446
00:23:13,119 --> 00:23:14,800
Speaker 1: tax reform In other words, we're gonna have this vote.

447
00:23:14,800 --> 00:23:17,160
Speaker 1: It seems likely that that vote on an all outright

448
00:23:17,200 --> 00:23:20,719
Speaker 1: repeal here isn't going to isn't going to pass our

449
00:23:20,720 --> 00:23:22,919
Speaker 1: repolose do they now have license here to pursue a

450
00:23:22,960 --> 00:23:27,480
Speaker 1: tax reform exclusively? Um? Yes, they have license. They're gonna

451
00:23:27,520 --> 00:23:30,160
Speaker 1: have a tax reform, but they have a huge challenge

452
00:23:30,280 --> 00:23:32,320
Speaker 1: in front of them because the health care issues not

453
00:23:32,400 --> 00:23:35,280
Speaker 1: going away. Um. They both. There's pressure on them to

454
00:23:35,520 --> 00:23:39,720
Speaker 1: help fix the individual exchanges, and there's gonna be pressure

455
00:23:39,720 --> 00:23:42,760
Speaker 1: on them from their base to continue to chip away

456
00:23:43,040 --> 00:23:45,880
Speaker 1: at the affordable correct wherever they can. So, for example,

457
00:23:45,920 --> 00:23:48,800
Speaker 1: I don't see how you do a tax reform bill

458
00:23:49,160 --> 00:23:52,840
Speaker 1: at this point without significantly chipping into the individual mandate,

459
00:23:52,880 --> 00:23:54,959
Speaker 1: for example. I think that this is going to continue

460
00:23:54,960 --> 00:23:57,320
Speaker 1: to dog them legislatively for the rest of the year,

461
00:23:57,640 --> 00:24:00,800
Speaker 1: and any piece of moving legislation is gonna have some

462
00:24:00,920 --> 00:24:05,040
Speaker 1: element of Obamacare repeal attached to it, and and it's

463
00:24:05,040 --> 00:24:07,959
Speaker 1: going to dog them legislatively. How about politically, I suppose

464
00:24:08,000 --> 00:24:11,800
Speaker 1: we are not too far off from the text campaign cycle.

465
00:24:11,800 --> 00:24:14,920
Speaker 1: How concern should Republicans be? How concerned our Republicans about

466
00:24:14,960 --> 00:24:18,080
Speaker 1: what's happened to you with healthcare? Well, there's obviously very

467
00:24:18,359 --> 00:24:20,439
Speaker 1: different levels of a concern. Inside the conference. There are

468
00:24:20,480 --> 00:24:23,880
Speaker 1: some members like Rob Portman of Ohio or Dean Heller

469
00:24:23,920 --> 00:24:27,240
Speaker 1: from Nevada who are very aware of the benefits of

470
00:24:27,240 --> 00:24:30,560
Speaker 1: the Medicaid expansion in their states and really got cold

471
00:24:30,560 --> 00:24:32,800
Speaker 1: feat on this bill because they did not want to

472
00:24:32,840 --> 00:24:36,320
Speaker 1: take Medicaid benefits away from any of their constituents. There

473
00:24:36,320 --> 00:24:39,679
Speaker 1: are other members like Majority Leader McConnell um, you know,

474
00:24:40,040 --> 00:24:43,520
Speaker 1: Senator Texta, Senator John Cornyn, who felt very strongly that

475
00:24:43,600 --> 00:24:46,240
Speaker 1: they really needed to deliver on these promises to repeal

476
00:24:46,240 --> 00:24:48,440
Speaker 1: the Affordable Care Act if they want their base to

477
00:24:48,480 --> 00:24:50,760
Speaker 1: show up. So, you know, this is a tough calculation.

478
00:24:50,800 --> 00:24:53,480
Speaker 1: It's really hard to know what what the how to

479
00:24:53,520 --> 00:24:55,680
Speaker 1: how to make the trade off between your own base

480
00:24:55,800 --> 00:24:59,160
Speaker 1: not showing up and firing up the liberals and independence

481
00:24:59,200 --> 00:25:00,720
Speaker 1: in your state who we're going to show up to

482
00:25:00,720 --> 00:25:02,720
Speaker 1: come and vote against you. And each member has a

483
00:25:02,720 --> 00:25:05,360
Speaker 1: different calculus for that. Inside their own head, and that's

484
00:25:05,359 --> 00:25:07,159
Speaker 1: why it's really hard to get folks on the same page.

485
00:25:07,240 --> 00:25:10,159
Speaker 1: And now we do Washington Calculus with John Lieber of

486
00:25:10,200 --> 00:25:12,280
Speaker 1: Your Raise your Group, John lest grip up the script.

487
00:25:12,760 --> 00:25:16,199
Speaker 1: How much time are these people spending raising money for

488
00:25:16,280 --> 00:25:18,240
Speaker 1: the next suar? I mean, in the news now is

489
00:25:18,640 --> 00:25:21,119
Speaker 1: President Trump and paying legal bills out of all the

490
00:25:21,800 --> 00:25:25,320
Speaker 1: money raised. But within your experience of being on the hill,

491
00:25:25,800 --> 00:25:30,080
Speaker 1: how much time is just now devoted to simply raising

492
00:25:30,200 --> 00:25:33,520
Speaker 1: cold cash? I would think during the day, you know,

493
00:25:33,560 --> 00:25:35,680
Speaker 1: members are pretty focused on the task at hands, serving

494
00:25:35,720 --> 00:25:38,680
Speaker 1: their constituents, meeting with each other, talking about policy, trying

495
00:25:38,680 --> 00:25:41,080
Speaker 1: to drive an agenda forward. But you know, fundraising is

496
00:25:41,119 --> 00:25:42,679
Speaker 1: a part of the job, and it's just the reality

497
00:25:42,720 --> 00:25:44,480
Speaker 1: of being a Senator and a member of the House

498
00:25:44,480 --> 00:25:48,200
Speaker 1: today that you probably are doing breakfast fundraisers and dinner

499
00:25:48,280 --> 00:25:51,159
Speaker 1: more cocktail fundraisers on a pretty regular basis. You know,

500
00:25:51,160 --> 00:25:53,720
Speaker 1: your weekends are spent traveling around the country trying to

501
00:25:53,760 --> 00:25:56,080
Speaker 1: raise money, and your recesses are as well. So it's

502
00:25:56,080 --> 00:25:58,440
Speaker 1: a it's a it's a pretty consuming part of the job.

503
00:25:58,480 --> 00:26:00,680
Speaker 1: But I think when they're in town and and during

504
00:26:00,720 --> 00:26:03,560
Speaker 1: the day, they're very focused on policy and serving their constituents.

505
00:26:04,240 --> 00:26:07,520
Speaker 1: How much is the leadership relationship change now that Harry

506
00:26:07,520 --> 00:26:09,960
Speaker 1: Read is out of the US Senate. You've got Senator McConnell,

507
00:26:10,000 --> 00:26:12,479
Speaker 1: You've got Senator Schumer. How did they get along? How

508
00:26:12,520 --> 00:26:15,840
Speaker 1: are they leading together the U S Senate? Well, there's

509
00:26:15,880 --> 00:26:18,520
Speaker 1: a lot of history between these two. Um Schumer and

510
00:26:18,600 --> 00:26:21,200
Speaker 1: McConnell have history going back to the two thousand and

511
00:26:21,240 --> 00:26:23,680
Speaker 1: eight Tart vote when they both agreed that they would

512
00:26:23,760 --> 00:26:28,439
Speaker 1: vote for the financial sector bailout without any political recriminations

513
00:26:28,440 --> 00:26:31,359
Speaker 1: against one another. And then Schumer turned around and and

514
00:26:31,359 --> 00:26:34,680
Speaker 1: and McConnell's view ran ads against him in a very

515
00:26:34,720 --> 00:26:37,800
Speaker 1: tough Kentucky reelection, which of course McConnell went anyway. So

516
00:26:37,840 --> 00:26:40,679
Speaker 1: there's some history there. I think. You know, one thing

517
00:26:40,720 --> 00:26:43,320
Speaker 1: that complicates their relationship is that Schumer is under a

518
00:26:43,320 --> 00:26:45,560
Speaker 1: lot of pressure from his liberal base to take an

519
00:26:45,560 --> 00:26:48,920
Speaker 1: extreme oppositional stance to everything that Donald Trump has done.

520
00:26:49,200 --> 00:26:50,800
Speaker 1: And so what you've seen as a result of that

521
00:26:50,920 --> 00:26:53,240
Speaker 1: is the Democrats have just totally gummed up the Senate

522
00:26:53,280 --> 00:26:56,760
Speaker 1: works and nothing's getting done because McConnell has to spend

523
00:26:57,000 --> 00:27:01,760
Speaker 1: two to three days just to confirm single Trump appointee

524
00:27:01,960 --> 00:27:05,040
Speaker 1: because Schumers decided to just to to block as many

525
00:27:05,080 --> 00:27:07,200
Speaker 1: as you can. Um So I think that's a bad

526
00:27:07,200 --> 00:27:08,960
Speaker 1: start their relationship. You know, there's not a lot of

527
00:27:08,960 --> 00:27:11,640
Speaker 1: opportunities to work together on a bipartisan basis right now,

528
00:27:11,960 --> 00:27:13,680
Speaker 1: and that's going to continue, and that kind of that

529
00:27:13,760 --> 00:27:17,040
Speaker 1: kind of negativity intention will define it for the foreseeable future.

530
00:27:17,240 --> 00:27:20,720
Speaker 1: John exceptionally valuable this morning, John Lever with perspective and

531
00:27:21,119 --> 00:27:25,960
Speaker 1: unique perspective and Senate Majority of Leader McConnell of Kentucky.

532
00:27:26,080 --> 00:27:28,720
Speaker 1: Mr Leever is with your Razor group, David, how do

533
00:27:28,760 --> 00:27:32,719
Speaker 1: you tackle this within your television show? I mean, I'm

534
00:27:32,880 --> 00:27:34,960
Speaker 1: I had. It took me an hour and a half

535
00:27:35,040 --> 00:27:39,560
Speaker 1: this morning to find the exact two sentences within the

536
00:27:39,640 --> 00:27:44,880
Speaker 1: January CBO report where they talked about thirty two million Americans. Yeah,

537
00:27:45,240 --> 00:27:47,439
Speaker 1: repeal and replace, it's difficult. I will say, we have

538
00:27:47,520 --> 00:27:50,480
Speaker 1: some great reporters on Capitol Hill, Stephen, Dennis Shikapoor, Kevin

539
00:27:50,520 --> 00:27:52,080
Speaker 1: SERELEI is going to join us a little bit later

540
00:27:52,119 --> 00:27:54,359
Speaker 1: on the program who make that a bit easier. But

541
00:27:54,400 --> 00:27:56,679
Speaker 1: this is such a moving target, so much is changing,

542
00:27:56,680 --> 00:28:00,160
Speaker 1: and as you say, buried in the legislative length. Which

543
00:28:00,200 --> 00:28:02,000
Speaker 1: are the nuggets that you need to know? Where are

544
00:28:02,080 --> 00:28:06,639
Speaker 1: you on assertitude the tax reform will be easier, says who.

545
00:28:07,000 --> 00:28:10,119
Speaker 1: I don't think that full tax reform will be easy

546
00:28:10,160 --> 00:28:12,200
Speaker 1: at all. I think we could see some changes to

547
00:28:12,359 --> 00:28:14,679
Speaker 1: the tax code, some smaller amount of tax reform. But

548
00:28:15,040 --> 00:28:17,360
Speaker 1: as John was just saying, the forcing mechanisms are there.

549
00:28:17,359 --> 00:28:20,520
Speaker 1: You've got the debt ceiling, You've got the budget looming ahead.

550
00:28:20,520 --> 00:28:23,159
Speaker 1: You've got to think there's gonna be some element of

551
00:28:23,200 --> 00:28:25,680
Speaker 1: compromise associated with those two things. At least. The most

552
00:28:25,800 --> 00:28:29,000
Speaker 1: interesting day. Stay with this coast to coast. This is

553
00:28:29,040 --> 00:28:39,360
Speaker 1: Bloomberg Brunt you by Bank of America Mary Lynch. With

554
00:28:39,480 --> 00:28:44,880
Speaker 1: virtual reality, virtually everything will change. Discover opportunities in a

555
00:28:44,960 --> 00:28:49,400
Speaker 1: transforming world VI of a mL dot Com, slash VR,

556
00:28:50,280 --> 00:28:59,240
Speaker 1: Mary Lynch, Pierced Fenner and Smith Incorporated. I guess I

557
00:28:59,240 --> 00:29:01,720
Speaker 1: mentioned John Miller is with us now on Bloomberg Surveillance.

558
00:29:01,720 --> 00:29:03,600
Speaker 1: He's the CEO of Miller Samuel. We always love talking

559
00:29:03,880 --> 00:29:05,920
Speaker 1: real estate with him. Good to see you, great, great

560
00:29:05,960 --> 00:29:07,600
Speaker 1: to be here once again. Let's get a little lay

561
00:29:07,600 --> 00:29:09,000
Speaker 1: of the land here. As we approach it, that data

562
00:29:09,040 --> 00:29:10,600
Speaker 1: coming out a little later this morning. When you look

563
00:29:10,640 --> 00:29:12,480
Speaker 1: at housing writ large, when you look at housing is

564
00:29:12,520 --> 00:29:15,480
Speaker 1: a component part of the US economy, how's that sector doing.

565
00:29:16,320 --> 00:29:18,800
Speaker 1: It's it's really a mixed bag because what we have

566
00:29:18,960 --> 00:29:24,560
Speaker 1: is uh, really compression in inventory nationally. We're seeing that

567
00:29:24,600 --> 00:29:27,480
Speaker 1: across the New York metro area, We're seeing that across

568
00:29:27,520 --> 00:29:32,320
Speaker 1: the US, and UM that is just raining in the

569
00:29:32,360 --> 00:29:36,480
Speaker 1: ability for future sales growth. UM. This has been a

570
00:29:36,560 --> 00:29:39,960
Speaker 1: recurring problem over the last couple of years. You're you're

571
00:29:40,000 --> 00:29:42,320
Speaker 1: you're a specialist here in New York City and uh,

572
00:29:42,480 --> 00:29:46,080
Speaker 1: the the online suburbs love you have what we're seeing here?

573
00:29:46,120 --> 00:29:48,200
Speaker 1: What it comes to inventory, when it comes to availability

574
00:29:48,840 --> 00:29:51,600
Speaker 1: of of gondo's and houses on the market in New

575
00:29:51,680 --> 00:29:53,680
Speaker 1: York City, what's that market look like? Well, you have

576
00:29:53,720 --> 00:29:57,160
Speaker 1: to look at the market, for example, in two different ways.

577
00:29:57,280 --> 00:30:00,440
Speaker 1: If you if you look at new development, UH, at

578
00:30:00,480 --> 00:30:03,600
Speaker 1: the high end, it's the same story, lots of lots

579
00:30:03,600 --> 00:30:06,920
Speaker 1: of supply. UM. You look at the lower end of

580
00:30:07,280 --> 00:30:12,320
Speaker 1: new development below the five million dollar threshold, UM, steady activity.

581
00:30:12,880 --> 00:30:15,520
Speaker 1: If you look at the resale market, UM, which is

582
00:30:15,560 --> 00:30:20,920
Speaker 1: about in Manhattan, for example, Uh, we had a shockingly

583
00:30:21,040 --> 00:30:26,360
Speaker 1: strong spring exactly. Yeah, where's the real estate slowdown. I

584
00:30:26,400 --> 00:30:29,520
Speaker 1: haven't observed it, and no one within two zip codes

585
00:30:29,520 --> 00:30:33,880
Speaker 1: of me has observed it, because because the world sees

586
00:30:34,400 --> 00:30:36,920
Speaker 1: markets like this through the eyes of a hundred million

587
00:30:36,920 --> 00:30:40,720
Speaker 1: dollar apartment, and that's the that's the segment that's soft.

588
00:30:41,560 --> 00:30:44,520
Speaker 1: The balance of the market is moving. In fact, we're

589
00:30:44,520 --> 00:30:49,959
Speaker 1: starting to see resale inventory fall again exactly. That's it's

590
00:30:50,160 --> 00:30:55,280
Speaker 1: it's where's the break point of mere mortal real estate price.

591
00:30:55,880 --> 00:30:58,720
Speaker 1: This is for sale, not rental. Where's the break point

592
00:30:59,320 --> 00:31:04,000
Speaker 1: versus this illy fixation with mega properties. Well, right now,

593
00:31:04,880 --> 00:31:08,480
Speaker 1: I'd say, in in at least in Manhattan, you're probably

594
00:31:08,520 --> 00:31:13,520
Speaker 1: talking in the just under two million dollar range. Is

595
00:31:13,520 --> 00:31:17,480
Speaker 1: is the breakpoint the the average sale price without all

596
00:31:17,520 --> 00:31:21,680
Speaker 1: the new development sort of skewing all the numbers, You're

597
00:31:21,720 --> 00:31:26,400
Speaker 1: really talking in the midmillions. The median is is midmillions.

598
00:31:26,400 --> 00:31:29,600
Speaker 1: That was a great as a Johnny Cash song. The

599
00:31:30,040 --> 00:31:33,320
Speaker 1: median in Manhattan, for example, is a little over one

600
00:31:33,360 --> 00:31:36,960
Speaker 1: point one. That's a record. Witness what we're seeing in California.

601
00:31:37,080 --> 00:31:41,640
Speaker 1: How much household income is necessary to migrate in the

602
00:31:41,840 --> 00:31:50,160
Speaker 1: quartile below Jonathan Miller's midmillions. Well, well, answer is a

603
00:31:50,200 --> 00:31:53,520
Speaker 1: big salary it's a big salary even even for example,

604
00:31:53,840 --> 00:31:55,800
Speaker 1: just look at the rental market here in New York.

605
00:31:56,280 --> 00:31:59,560
Speaker 1: You really need about a hundred fifty thousand a runt

606
00:31:59,560 --> 00:32:04,280
Speaker 1: a one bet germ in Manhattan. So that's so, that's

607
00:32:04,320 --> 00:32:07,520
Speaker 1: why for the last two years we've been seeing this

608
00:32:08,080 --> 00:32:13,160
Speaker 1: exodus um of sort of this I don't know, the

609
00:32:13,400 --> 00:32:16,240
Speaker 1: the release valve is hit the suburbs. So we're still

610
00:32:16,240 --> 00:32:20,120
Speaker 1: seeing heavy sales volume in the suburban markets around in

611
00:32:20,160 --> 00:32:26,800
Speaker 1: New York. There's a I'm okay grant. There's there's a

612
00:32:26,800 --> 00:32:28,800
Speaker 1: game that I observed in Brooklyn. It happens in Manhattan

613
00:32:28,840 --> 00:32:30,880
Speaker 1: as well. You're walked by one of these outfits at

614
00:32:30,960 --> 00:32:34,600
Speaker 1: Southebys or whatever it is, Douglas Eleman, and people stop

615
00:32:34,680 --> 00:32:37,880
Speaker 1: to look at the rental listings on the glass windows.

616
00:32:38,760 --> 00:32:40,640
Speaker 1: What's availably look like? When you when you talk about

617
00:32:40,680 --> 00:32:44,400
Speaker 1: rental product properties in particular, is there a sufficient what

618
00:32:44,520 --> 00:32:46,920
Speaker 1: the rental prices line? Do you want me to give

619
00:32:46,960 --> 00:32:52,920
Speaker 1: you the rental prices in your neighborhood? Specific eight windows

620
00:32:52,920 --> 00:32:54,560
Speaker 1: you could look at. So if you look, if you

621
00:32:54,600 --> 00:32:59,920
Speaker 1: look at the boroughs, Brooklyn, especially in the context of Manhattan,

622
00:33:00,080 --> 00:33:04,400
Speaker 1: is weaker. Even though rents are significant, very high. That's

623
00:33:04,400 --> 00:33:07,560
Speaker 1: sort of the paradox, right exactly. So what we're seeing,

624
00:33:07,600 --> 00:33:11,360
Speaker 1: we're seeing net effective rent meaning meaning the median rent

625
00:33:11,800 --> 00:33:16,960
Speaker 1: removing uh concessions uh sliding, but rents are still very high.

626
00:33:17,240 --> 00:33:19,680
Speaker 1: So so it's a it's a I think it's a

627
00:33:19,760 --> 00:33:23,360
Speaker 1: slow grind, um, simply because most of the new development

628
00:33:23,440 --> 00:33:28,480
Speaker 1: built in Brooklyn is is rental. But witnessed the California

629
00:33:28,600 --> 00:33:32,920
Speaker 1: articles about California has become totally unaffordable. Have you ever

630
00:33:32,960 --> 00:33:35,760
Speaker 1: seen it like this where mere mortals, you know, there's

631
00:33:35,800 --> 00:33:39,760
Speaker 1: no dream of housing anymore. That's what I hear anecdotally. Well,

632
00:33:40,280 --> 00:33:44,280
Speaker 1: it's you know, there's a reason why mortgage volume for

633
00:33:44,320 --> 00:33:47,840
Speaker 1: the last decade has been trending lower even with low

634
00:33:47,920 --> 00:33:54,040
Speaker 1: interest rates, is affordability continues to be challenged. Um. And

635
00:33:54,040 --> 00:34:00,120
Speaker 1: and that's that's the problem. There's no great solution for it.

636
00:34:00,280 --> 00:34:03,040
Speaker 1: But but clearly, you know, as we saw in New York,

637
00:34:03,440 --> 00:34:07,800
Speaker 1: we saw a heavy volume, heavy sales activity. Um, we're

638
00:34:07,800 --> 00:34:11,680
Speaker 1: not seeing runaway price growth. Prices are already elevated, way

639
00:34:11,719 --> 00:34:15,759
Speaker 1: more active than you expect. Absolutely, let's come back, John Miller.

640
00:34:15,760 --> 00:34:17,680
Speaker 1: We're gonna come back and talk about this and it

641
00:34:17,719 --> 00:34:22,360
Speaker 1: really goes nationwide, not only with our signals Boston, Washington,

642
00:34:22,400 --> 00:34:25,799
Speaker 1: New York, San Francisco, but really coast to coast. The

643
00:34:25,920 --> 00:34:29,640
Speaker 1: absolutely of the surprise that people are well. The first

644
00:34:29,640 --> 00:34:31,759
Speaker 1: thing to do it is they're moving. If they can't

645
00:34:31,760 --> 00:34:35,240
Speaker 1: afford it, they are getting you all out and migrating

646
00:34:35,239 --> 00:34:38,160
Speaker 1: worth John Miller, here's all you need to know. Folks

647
00:34:38,680 --> 00:34:43,800
Speaker 1: nestled on a picturesque corner of Clinton Street in first place,

648
00:34:44,280 --> 00:34:48,000
Speaker 1: originally the Norwegian Seamen's Church. I guess that means it

649
00:34:48,120 --> 00:34:51,720
Speaker 1: is character, of course. And the most important line building

650
00:34:51,719 --> 00:34:57,640
Speaker 1: amenities include a cal garden, real estate, real estate in Brooklyn,

651
00:34:57,760 --> 00:35:01,960
Speaker 1: take it away, David uh child. Let let me ask

652
00:35:02,040 --> 00:35:06,440
Speaker 1: quickly just about you know when when musing on that

653
00:35:06,560 --> 00:35:09,719
Speaker 1: kale garden, uh, what are the neighborhood you're looking at?

654
00:35:09,719 --> 00:35:12,040
Speaker 1: In pretty we talk about Brooklyn with the broad brusher,

655
00:35:12,040 --> 00:35:13,600
Speaker 1: Manhattan with the bron brush. Where do we see the

656
00:35:13,640 --> 00:35:15,920
Speaker 1: most action or the most the most changed to the

657
00:35:15,960 --> 00:35:18,640
Speaker 1: market recently here When it comes to real estate, well

658
00:35:19,120 --> 00:35:22,279
Speaker 1: about a year ago, the biggest change in pricing was

659
00:35:22,400 --> 00:35:25,520
Speaker 1: the sort of coming up the markets that were under

660
00:35:25,920 --> 00:35:29,560
Speaker 1: the process of being gentrified, as Brooklyn, for example, would

661
00:35:29,560 --> 00:35:32,160
Speaker 1: be a bed sty or East New York. UM. But

662
00:35:32,320 --> 00:35:37,680
Speaker 1: really the surge in activity in pricing now is really

663
00:35:37,880 --> 00:35:40,960
Speaker 1: spread out all over the place, and it's and it's

664
00:35:41,040 --> 00:35:45,440
Speaker 1: also across UM all like for example, Brooklyn, it's not

665
00:35:46,239 --> 00:35:49,200
Speaker 1: it's not any one particular price point. It's really across

666
00:35:49,280 --> 00:35:52,319
Speaker 1: the board. And that's UM. One of the things about

667
00:35:52,320 --> 00:35:56,000
Speaker 1: a market like Brooklyn is um it is nothing like

668
00:35:56,080 --> 00:35:58,600
Speaker 1: what it was four or five years ago. And so

669
00:35:58,719 --> 00:36:02,920
Speaker 1: we're seeing UM the last four quarters have been record

670
00:36:03,640 --> 00:36:08,000
Speaker 1: prices for median um. We're seeing heavy sales volume and

671
00:36:08,440 --> 00:36:12,960
Speaker 1: very little activity. But because Brooklyn is essentially redefined itself

672
00:36:13,360 --> 00:36:17,200
Speaker 1: as something other than a cheaper alternative to Manhattan, we're

673
00:36:17,239 --> 00:36:20,120
Speaker 1: not really sure how far it can go. It seems

674
00:36:20,160 --> 00:36:22,920
Speaker 1: like it has more gas in the tank, which I

675
00:36:23,000 --> 00:36:26,839
Speaker 1: know confounds Tom. And it does confound Tom. We still

676
00:36:26,880 --> 00:36:28,840
Speaker 1: have yet to get him to cross any of the

677
00:36:28,880 --> 00:36:33,160
Speaker 1: number of bridges to Brooklyn property bridge. But that breaks

678
00:36:33,200 --> 00:36:34,319
Speaker 1: up a point that I want I want to ask

679
00:36:34,360 --> 00:36:36,640
Speaker 1: you here, how why does that gap between Manhattan and

680
00:36:36,640 --> 00:36:38,440
Speaker 1: Brooklyn Now if you look at the high end, in particular,

681
00:36:38,440 --> 00:36:40,760
Speaker 1: if there's a townhouse going for ten million dollars in

682
00:36:40,920 --> 00:36:42,800
Speaker 1: Park Slope, I imagine that the person who's going to

683
00:36:42,840 --> 00:36:44,239
Speaker 1: buy that could have bought a place, maybe not have

684
00:36:44,280 --> 00:36:49,279
Speaker 1: commensurate science, but certainly something sizeable enough in Manhattan. What's

685
00:36:49,280 --> 00:36:51,279
Speaker 1: the calculus like when a buyer comes to New York

686
00:36:51,320 --> 00:36:54,520
Speaker 1: and is considering making a purchase of that amount of money. Well,

687
00:36:54,560 --> 00:36:58,080
Speaker 1: first of all, just the idea that you have townhouses selling,

688
00:36:58,560 --> 00:37:01,440
Speaker 1: you know a round the ten million dollar range in

689
00:37:01,440 --> 00:37:04,640
Speaker 1: Brooklyn is pretty amazing, but it's usually two to three

690
00:37:04,640 --> 00:37:07,600
Speaker 1: times more expensive in Manhattan, which is a big driver.

691
00:37:07,719 --> 00:37:11,359
Speaker 1: So ten million equates to and that's a big that's

692
00:37:11,360 --> 00:37:14,359
Speaker 1: a big driver of the market. But remember too that,

693
00:37:14,560 --> 00:37:17,719
Speaker 1: for example, in Manhattan, only one and a half to

694
00:37:17,719 --> 00:37:22,360
Speaker 1: two of the transactions in Manhattan are townhouses. It is

695
00:37:22,520 --> 00:37:26,520
Speaker 1: a luxury market subset, very tiny, just a couple hundred

696
00:37:26,520 --> 00:37:32,080
Speaker 1: transactions a year. Brooklyn is a lot beggar in that regard.

697
00:37:32,800 --> 00:37:35,400
Speaker 1: We're in the tenure anniversary of the financial crisis, and

698
00:37:35,560 --> 00:37:37,359
Speaker 1: you know, John Miller, you've lived through it, you know

699
00:37:37,920 --> 00:37:40,239
Speaker 1: every nook and cranny, particularly on four if I said

700
00:37:40,239 --> 00:37:43,480
Speaker 1: it's whether it's Boston or San Francisco or whatever, have

701
00:37:43,640 --> 00:37:49,080
Speaker 1: we become psychologically more of a rental America or have

702
00:37:49,200 --> 00:37:52,960
Speaker 1: we basically gone through all this in that we have

703
00:37:53,120 --> 00:37:56,520
Speaker 1: to have a house. Uh, it's it. I don't think

704
00:37:56,600 --> 00:38:00,200
Speaker 1: that we are steering towards rental. I think that as

705
00:38:00,880 --> 00:38:04,560
Speaker 1: the home ownership rate hads descended. Um, there's been a

706
00:38:04,560 --> 00:38:07,480
Speaker 1: lot of talk about that. I I think this is

707
00:38:07,520 --> 00:38:11,520
Speaker 1: just a long hangover. Really, what it comes down to,

708
00:38:12,040 --> 00:38:16,760
Speaker 1: credit has not normalized from mortgage lending, unlike bubble conditions

709
00:38:16,760 --> 00:38:21,000
Speaker 1: we're seeing in other forms of credit, and and that

710
00:38:21,239 --> 00:38:24,000
Speaker 1: is created one of the key reasons why we have

711
00:38:24,160 --> 00:38:27,120
Speaker 1: a shortage of supply, which is a key reason why

712
00:38:27,200 --> 00:38:31,840
Speaker 1: we have very little inventory. So I still believe the

713
00:38:31,880 --> 00:38:34,880
Speaker 1: conditions we're seeing now have nothing to do with a

714
00:38:34,960 --> 00:38:39,120
Speaker 1: normal market. And as a result, I don't see us

715
00:38:39,160 --> 00:38:42,600
Speaker 1: returning two rental in terms of a structural change. I

716
00:38:42,680 --> 00:38:45,640
Speaker 1: just think it's a long grind. You say normal market night,

717
00:38:45,719 --> 00:38:48,560
Speaker 1: I know that they were like normally wondering exactly what

718
00:38:48,600 --> 00:38:50,960
Speaker 1: it means and if if if we're I I don't

719
00:38:51,080 --> 00:38:52,840
Speaker 1: use the word bubble, but if there's going to be

720
00:38:53,840 --> 00:38:57,359
Speaker 1: some reevaluation of prices here going forward, well, uh, we've

721
00:38:57,360 --> 00:39:00,000
Speaker 1: already had that in the new development market. New development

722
00:39:00,120 --> 00:39:04,239
Speaker 1: prices peak new development was two thousand fourteen, and in

723
00:39:04,320 --> 00:39:08,360
Speaker 1: many projects you can see, uh, new development has corrected

724
00:39:08,440 --> 00:39:12,439
Speaker 1: somewhere between fifteen and thirty five depending on how high

725
00:39:12,480 --> 00:39:15,719
Speaker 1: the prices were in two thousand fourteen. Um, and they're

726
00:39:15,719 --> 00:39:19,520
Speaker 1: disconnect with the market. And we're already seeing evidence today. Uh,

727
00:39:19,560 --> 00:39:24,560
Speaker 1: just in projects like UM one fifty seven on in

728
00:39:24,640 --> 00:39:27,239
Speaker 1: Billionaires a Row, where we were having resales sell for

729
00:39:29,120 --> 00:39:32,040
Speaker 1: less than their last price a few years ago. So

730
00:39:32,280 --> 00:39:36,120
Speaker 1: clearly that market has changed. Okay, great on board is

731
00:39:36,200 --> 00:39:42,680
Speaker 1: Queen's reset? Is Westchester reset? That island Staten Island? Uh,

732
00:39:42,920 --> 00:39:46,000
Speaker 1: Chris Sendsy was here yesterday with his Staten Island accent.

733
00:39:46,200 --> 00:39:49,360
Speaker 1: Is the real world resetting? Come on? What fifty seven

734
00:39:49,360 --> 00:39:54,000
Speaker 1: on Martinis or something like that? And how did I

735
00:39:54,040 --> 00:39:57,000
Speaker 1: know that is the rest of the world reset? As

736
00:39:57,040 --> 00:39:59,640
Speaker 1: you put it, My head is still spinning back kale salad.

737
00:39:59,719 --> 00:40:04,880
Speaker 1: But um no, uh, we're still seeing So for example,

738
00:40:04,920 --> 00:40:10,200
Speaker 1: if you look at markets like Queens Queens record prices,

739
00:40:10,480 --> 00:40:15,720
Speaker 1: the Brooklyn spillover. If you look at Westchester, heavy sales volume,

740
00:40:16,000 --> 00:40:19,120
Speaker 1: but not at the high end. So uh, that's the

741
00:40:19,160 --> 00:40:23,920
Speaker 1: definition of high end in Westchester north of two two

742
00:40:23,960 --> 00:40:26,799
Speaker 1: and a half million, what percent of the public can

743
00:40:26,840 --> 00:40:31,160
Speaker 1: afford two million large in Westchester, let alone the taxes

744
00:40:31,400 --> 00:40:35,840
Speaker 1: to put Scarlet School. That's about ten percent of the market.

745
00:40:36,000 --> 00:40:42,799
Speaker 1: So the other um are seeing um just now, though

746
00:40:42,800 --> 00:40:45,600
Speaker 1: in the last year, are starting to see rising prices.

747
00:40:45,680 --> 00:40:49,840
Speaker 1: The the inaggregate prices in the suburbs have been relatively

748
00:40:49,920 --> 00:40:52,520
Speaker 1: flat because there was so much slack built up as

749
00:40:52,560 --> 00:40:55,720
Speaker 1: everybody after the financial crush, prices rushed to the city.

750
00:40:55,920 --> 00:40:59,400
Speaker 1: But now they're finally starting to rise. And I rent

751
00:40:59,520 --> 00:41:02,000
Speaker 1: in the suburbs, if I'm part of the ninety percent,

752
00:41:02,360 --> 00:41:05,520
Speaker 1: if I'm in the seventy percentile and aren't looking at

753
00:41:05,560 --> 00:41:10,080
Speaker 1: two million larger Westchester, should I rent or buy in Westchester? Well,

754
00:41:10,239 --> 00:41:14,839
Speaker 1: you know the difference between the suburbs and the city is,

755
00:41:15,080 --> 00:41:18,040
Speaker 1: you know, what is available to rent. The rental market

756
00:41:18,080 --> 00:41:22,120
Speaker 1: in the suburbs is not a big part of the

757
00:41:22,160 --> 00:41:24,200
Speaker 1: market in terms of the offerings that are out there.

758
00:41:25,280 --> 00:41:29,480
Speaker 1: I can't help you, Tom, I'm just fascinating. This is

759
00:41:29,480 --> 00:41:33,239
Speaker 1: so different, David, from ten and twenty three years. So

760
00:41:33,280 --> 00:41:37,120
Speaker 1: you know what's interesting is that it's a polar It's

761
00:41:37,120 --> 00:41:42,520
Speaker 1: a polar opposite. Where we had affordability challenged by fastening

762
00:41:42,560 --> 00:41:46,000
Speaker 1: liss credit in the bubble. Now we have affordability, uh

763
00:41:46,520 --> 00:41:51,959
Speaker 1: challenged by the polar opposite that that credit remains historically tight.

764
00:41:52,560 --> 00:41:55,120
Speaker 1: What's what's happening with construction? So you talk about how

765
00:41:55,120 --> 00:41:57,320
Speaker 1: there's been this different in new development, I imagine a

766
00:41:57,360 --> 00:42:00,200
Speaker 1: lot of those projects began a few years ago. US

767
00:42:00,440 --> 00:42:02,000
Speaker 1: is there a lot of construction happen now? Are we

768
00:42:02,040 --> 00:42:06,640
Speaker 1: seeing companies embark on new projects? Now? We are, But

769
00:42:06,800 --> 00:42:10,400
Speaker 1: those projects tend to be skewed to the lower So

770
00:42:10,480 --> 00:42:13,400
Speaker 1: the larger projects, the ones they're going for the super

771
00:42:13,480 --> 00:42:15,279
Speaker 1: luxury that a lot of that, most of that are

772
00:42:15,320 --> 00:42:18,480
Speaker 1: a lot of that has been scrapped or they've scrambled

773
00:42:18,480 --> 00:42:22,440
Speaker 1: to realign it with a lower you know, a smaller

774
00:42:22,480 --> 00:42:27,200
Speaker 1: mix of units um. But there's there's steady regular activity

775
00:42:27,360 --> 00:42:31,280
Speaker 1: sort of sub three million, even sub four million dollars

776
00:42:31,280 --> 00:42:35,560
Speaker 1: that units are selling at a normal pace. It's it's

777
00:42:35,680 --> 00:42:39,480
Speaker 1: the upper half of the new development space is where

778
00:42:39,600 --> 00:42:44,560
Speaker 1: the quiet conditions exist. There's lovely luxury high rises on

779
00:42:44,600 --> 00:42:47,320
Speaker 1: the Guanas Canal. Tom you could move in and easily

780
00:42:47,320 --> 00:42:49,799
Speaker 1: walk to the Whole foods on third and third if

781
00:42:49,800 --> 00:42:52,440
Speaker 1: you needed to. You can get beer and salad on

782
00:42:52,480 --> 00:42:56,560
Speaker 1: the roof overlooking said guanas canal this opportunity in Brooklyn.

783
00:42:58,360 --> 00:43:03,480
Speaker 1: I win listeners can see this. Yeah, we'd love to

784
00:43:03,520 --> 00:43:07,360
Speaker 1: have you. I mean do they were over there left? Whatever?

785
00:43:07,400 --> 00:43:14,040
Speaker 1: That third one is jun John Miller, seriously, can you

786
00:43:14,120 --> 00:43:17,760
Speaker 1: take what you This has been brilliant? Can you extrapolated

787
00:43:17,800 --> 00:43:21,799
Speaker 1: across this nation? Yes, you know the way to think

788
00:43:21,840 --> 00:43:25,160
Speaker 1: of housing in the US right now. Generally speaking, it's

789
00:43:25,200 --> 00:43:29,480
Speaker 1: soft at the top, tighter as you move lower in price. Um,

790
00:43:29,719 --> 00:43:33,160
Speaker 1: you have the product that was built across the country

791
00:43:33,239 --> 00:43:35,960
Speaker 1: generally skewed to the upper half of the market, So

792
00:43:36,040 --> 00:43:39,040
Speaker 1: conditions are tighter as you move lower. And that is

793
00:43:39,080 --> 00:43:42,760
Speaker 1: where the more heavily that segment is much more heavily

794
00:43:42,800 --> 00:43:47,040
Speaker 1: dependent on financing and credit, and credit conditions are still

795
00:43:47,480 --> 00:43:51,400
Speaker 1: still have not normalized words. Jim Crude, I want you

796
00:43:51,440 --> 00:43:54,840
Speaker 1: to find me a listing with a W B S. David,

797
00:43:54,880 --> 00:43:59,720
Speaker 1: that's a wood Burnings John Miller, thank you for Miller, Samuel, brilliant,

798
00:44:00,239 --> 00:44:14,120
Speaker 1: This is Bloomberg David. I want you to jump in

799
00:44:14,160 --> 00:44:17,120
Speaker 1: and really lead most of this. Jaxsua Green is one

800
00:44:17,160 --> 00:44:20,760
Speaker 1: of our best, best best people who writes hyper detail.

801
00:44:20,840 --> 00:44:22,359
Speaker 1: He's one of these guys that I don't know how

802
00:44:22,400 --> 00:44:24,720
Speaker 1: he does it, He walks around with a tape recorder

803
00:44:24,800 --> 00:44:27,440
Speaker 1: hidden inside his Irish run him. Now, I don't know

804
00:44:27,480 --> 00:44:30,319
Speaker 1: how he does it. In the end, he decided to

805
00:44:30,360 --> 00:44:33,000
Speaker 1: attend a Friday night party at Las Vegas honoring Win

806
00:44:33,120 --> 00:44:37,880
Speaker 1: and his fiance Andrea has some trump mingled pool side

807
00:44:38,480 --> 00:44:41,799
Speaker 1: was seized stallone and Hugh Jackman and on we go.

808
00:44:42,520 --> 00:44:46,400
Speaker 1: That is a kind of detailed pool side of Devil's bargain.

809
00:44:46,520 --> 00:44:49,160
Speaker 1: Joshua Green has been forced to make the circuit to

810
00:44:49,239 --> 00:44:52,920
Speaker 1: day to to shill his book on Steve Bannon Donald

811
00:44:52,960 --> 00:44:57,080
Speaker 1: Trump are the Storming of the Presidency. What's interesting about

812
00:44:57,120 --> 00:45:01,080
Speaker 1: this is just published David Gurrow moments ago Mr Stevens

813
00:45:01,080 --> 00:45:05,760
Speaker 1: over at the New York Times controversial columnists Better than Good,

814
00:45:06,000 --> 00:45:09,640
Speaker 1: And it really is the first portrait of Mr Bannon

815
00:45:09,840 --> 00:45:12,040
Speaker 1: with that David girl. Why don't you pick it up?

816
00:45:12,200 --> 00:45:14,960
Speaker 1: Josh Tom reads that anecdote from your book about that

817
00:45:15,000 --> 00:45:18,080
Speaker 1: wedding at the Wind Casino in Las Vegas. As you note,

818
00:45:18,080 --> 00:45:19,880
Speaker 1: the following day he heads to Washington, d C. For

819
00:45:19,920 --> 00:45:22,400
Speaker 1: the White House Corresponse Association dinner. And this this is

820
00:45:22,440 --> 00:45:24,920
Speaker 1: a pivotal moment in the political evolution of Donald Trump.

821
00:45:24,920 --> 00:45:27,759
Speaker 1: He was somebody who had previously dabbled with thought about

822
00:45:27,840 --> 00:45:31,280
Speaker 1: running for president. What changed that night in that Hilton

823
00:45:31,320 --> 00:45:33,400
Speaker 1: ball room. We've all been in there, among those statuts

824
00:45:33,440 --> 00:45:36,160
Speaker 1: of people for that annual dinner. What changed for Donald

825
00:45:36,200 --> 00:45:38,480
Speaker 1: Trump that evening? I think what changed that evening, and

826
00:45:38,560 --> 00:45:41,680
Speaker 1: what only became clear years later in hindsight, was when

827
00:45:41,719 --> 00:45:44,920
Speaker 1: Trump went to that dinner and got humiliated by Barack

828
00:45:44,960 --> 00:45:48,520
Speaker 1: Obama and Seth Myers. He was the butt of jokes

829
00:45:48,520 --> 00:45:52,759
Speaker 1: throughout the evening on national television. It uh fired his

830
00:45:53,000 --> 00:45:56,600
Speaker 1: resolve to be taken seriously into run for president, And

831
00:45:56,680 --> 00:46:00,360
Speaker 1: from that moment forward, even though nobody real as and

832
00:46:00,400 --> 00:46:01,880
Speaker 1: we all thought he was just trying to goose his

833
00:46:01,920 --> 00:46:05,840
Speaker 1: apprentice ratings, he was absolutely serious about running for president.

834
00:46:05,840 --> 00:46:08,200
Speaker 1: And this book is my attempt to kind of tell

835
00:46:08,280 --> 00:46:11,840
Speaker 1: the whole back story looking back now to explain the

836
00:46:11,920 --> 00:46:14,040
Speaker 1: question that so many people always ask me, is how

837
00:46:14,080 --> 00:46:16,760
Speaker 1: could this have happened? How could Trump have gotten elected?

838
00:46:16,760 --> 00:46:18,920
Speaker 1: And nobody really saw it coming. Steve Bannon's at the

839
00:46:18,960 --> 00:46:22,200
Speaker 1: center of this book advice to the Preston, former campaign

840
00:46:22,239 --> 00:46:24,760
Speaker 1: manager for Donald Trump when he was running for president.

841
00:46:24,760 --> 00:46:26,919
Speaker 1: What did he first see Donald Trump? As I think

842
00:46:26,920 --> 00:46:28,839
Speaker 1: you put it as a vessel somebody he thinks could

843
00:46:28,880 --> 00:46:31,560
Speaker 1: carry the ideals that he began to care more and

844
00:46:31,600 --> 00:46:35,279
Speaker 1: more about as he developed professionally as somebody more and

845
00:46:35,320 --> 00:46:38,000
Speaker 1: more interested in politics. You know, I met Bannon back

846
00:46:38,040 --> 00:46:40,720
Speaker 1: in eleven. He was just this kind of weird, crazy,

847
00:46:40,840 --> 00:46:43,839
Speaker 1: charismatic filmmaker who done a film about Sarah Palin, who

848
00:46:43,840 --> 00:46:45,279
Speaker 1: I had been writing about at the time because we

849
00:46:45,320 --> 00:46:48,600
Speaker 1: all thought she was gonna run for president in twelve

850
00:46:48,760 --> 00:46:52,680
Speaker 1: and Bannon back then had absolutely the same hard right, nationalist,

851
00:46:52,719 --> 00:46:55,880
Speaker 1: populist politics that he did today. He thought Bannon was

852
00:46:55,920 --> 00:46:57,680
Speaker 1: going to be his vessel at the White House. That

853
00:46:57,760 --> 00:47:00,760
Speaker 1: didn't work out. Next, he did a movie about Shell Bachman,

854
00:47:00,840 --> 00:47:02,880
Speaker 1: remember her. She was going to be the tea party vessel.

855
00:47:03,000 --> 00:47:05,880
Speaker 1: That didn't work out. He finally found his guy in Trump,

856
00:47:06,120 --> 00:47:08,600
Speaker 1: although it took him years to realize it. My older

857
00:47:08,680 --> 00:47:10,960
Speaker 1: kids can't read this, the younger this this. You have

858
00:47:11,080 --> 00:47:13,799
Speaker 1: bad words in you. My my seven year old has

859
00:47:13,840 --> 00:47:17,280
Speaker 1: gone around school saying, the first word in daddy's book

860
00:47:17,400 --> 00:47:20,760
Speaker 1: is the F word. But look these are Steve Bannon

861
00:47:20,800 --> 00:47:23,760
Speaker 1: and Donald Trump are probably the two most profane people

862
00:47:23,840 --> 00:47:25,920
Speaker 1: on the face of the earth. I didn't hold anything back. So,

863
00:47:26,320 --> 00:47:30,360
Speaker 1: but what irritated more was a sudden outpouring of support

864
00:47:30,400 --> 00:47:34,720
Speaker 1: for Megan Kelly. What's receiving from people like Joe, like Mika,

865
00:47:34,960 --> 00:47:39,680
Speaker 1: like CNN Secretary Clinton. The next day, Bannon and Marlowe

866
00:47:39,719 --> 00:47:44,040
Speaker 1: composed a point by point indictment what surprised you most?

867
00:47:44,120 --> 00:47:46,799
Speaker 1: I know all that stuff, You've made it clear, but

868
00:47:46,920 --> 00:47:50,480
Speaker 1: Josh was, seriously, give me the y I'm reading Devil's Bargain.

869
00:47:50,600 --> 00:47:53,000
Speaker 1: What you learn because it puts you in the room,

870
00:47:53,160 --> 00:47:55,279
Speaker 1: It gives you all. You know that that scene that

871
00:47:55,320 --> 00:47:58,040
Speaker 1: you mentioned is followed by a screaming match between Steve

872
00:47:58,080 --> 00:48:00,600
Speaker 1: Bannon and Roger Ales, with a lot of f bombs

873
00:48:00,600 --> 00:48:03,840
Speaker 1: flying back and forth about radio. I won't say on

874
00:48:03,880 --> 00:48:08,080
Speaker 1: the radio, are you know, is the Republican movement going

875
00:48:08,120 --> 00:48:10,440
Speaker 1: to support Donald Trump? Or are they going to support

876
00:48:11,200 --> 00:48:14,760
Speaker 1: Fox News? Ultimately, Bannon and Trump won that battle, broke

877
00:48:14,800 --> 00:48:17,080
Speaker 1: the back of Fox News. You see a much different

878
00:48:17,120 --> 00:48:19,360
Speaker 1: kind of coverage of Trump on the network today. But

879
00:48:19,520 --> 00:48:22,759
Speaker 1: all of these fights, all of the blood baths that

880
00:48:22,840 --> 00:48:25,399
Speaker 1: took place behind the scenes, I try and lay out

881
00:48:25,400 --> 00:48:28,040
Speaker 1: in as much detail as I can so that people

882
00:48:28,080 --> 00:48:30,520
Speaker 1: really get a sense of how this all unfolded. What's

883
00:48:30,520 --> 00:48:32,320
Speaker 1: going to be interesting to our audience in particularly, it

884
00:48:32,360 --> 00:48:35,800
Speaker 1: is just the degree to which UH evolutions in American

885
00:48:35,840 --> 00:48:37,879
Speaker 1: financial and economic history have played a role in Steve

886
00:48:37,880 --> 00:48:40,799
Speaker 1: Bannon's that Tom Keane a couple of days ago sat

887
00:48:40,800 --> 00:48:44,200
Speaker 1: down with the president of the Dallas Fed. An amazing anecdote.

888
00:48:44,400 --> 00:48:47,160
Speaker 1: Steve Bannon's a student at Harvard Business School. He's trying

889
00:48:47,200 --> 00:48:49,640
Speaker 1: to get a job at an investment bank in New York.

890
00:48:49,640 --> 00:48:51,720
Speaker 1: Wanders up to a tent with hundreds of others Harvard

891
00:48:51,719 --> 00:48:54,840
Speaker 1: Business School students, and there is the future president of

892
00:48:54,840 --> 00:48:57,000
Speaker 1: the Dallas Fed standing around, and he's the one who champions.

893
00:48:57,000 --> 00:48:59,120
Speaker 1: Steve Bannon is somebody who should come to Goldman Saxon,

894
00:48:59,120 --> 00:49:02,600
Speaker 1: New York. Absolutely and Bannon Basically what people don't get

895
00:49:02,600 --> 00:49:05,200
Speaker 1: from the public portrayal of Bannon as this kind of

896
00:49:05,280 --> 00:49:08,040
Speaker 1: dark Darth Vader force is that one on one he

897
00:49:08,080 --> 00:49:11,200
Speaker 1: has a ton of personal charisma, especially with business guys.

898
00:49:11,200 --> 00:49:14,080
Speaker 1: He's worked on Wall Street, he knows the lingo UH

899
00:49:14,120 --> 00:49:16,080
Speaker 1: and as the Goldman folks, and mean, he literally talked

900
00:49:16,120 --> 00:49:19,919
Speaker 1: himself into a job at Goldman. Goldman. Sachs was right

901
00:49:19,960 --> 00:49:22,440
Speaker 1: there in in the m and a burn Boom throughout

902
00:49:22,520 --> 00:49:26,960
Speaker 1: the eighties, Uh in the trenches secretly worshiped Michael Milken.

903
00:49:27,080 --> 00:49:28,520
Speaker 1: I think has a lot in common with him, and

904
00:49:28,520 --> 00:49:31,719
Speaker 1: that really was the foundation of his politics and his strategy.

905
00:49:31,880 --> 00:49:34,120
Speaker 1: In our next section, I want to move forward. Is

906
00:49:34,160 --> 00:49:37,279
Speaker 1: he going to talk himself out of his job at

907
00:49:37,320 --> 00:49:41,520
Speaker 1: the White House? Great question that that is. That is

908
00:49:41,600 --> 00:49:44,759
Speaker 1: always the problem with Bannon. I think that early on

909
00:49:45,000 --> 00:49:48,200
Speaker 1: he became so drunk with his own power. You saw

910
00:49:48,239 --> 00:49:51,040
Speaker 1: the portrayal on Saturday Night Live as President Bannon. The

911
00:49:51,120 --> 00:49:54,239
Speaker 1: one thing that Donald Trump will not abide is a

912
00:49:54,280 --> 00:49:57,080
Speaker 1: co star. And I think the danger for Bannon then

913
00:49:57,120 --> 00:49:59,560
Speaker 1: and maybe now after the book is that is that

914
00:49:59,600 --> 00:50:02,480
Speaker 1: he's he's back in the crosshairs because heat you know,

915
00:50:02,520 --> 00:50:05,640
Speaker 1: I really like how you gave special acknowledgements to David Grew,

916
00:50:05,719 --> 00:50:09,440
Speaker 1: but not what's really important. Joshua Green is red Oh,

917
00:50:09,560 --> 00:50:12,240
Speaker 1: keeper of the Amex got a shout out. I wonder

918
00:50:13,320 --> 00:50:18,200
Speaker 1: you got double Devil's bargain. This is in celebration, folks,

919
00:50:18,280 --> 00:50:20,560
Speaker 1: is as Joshua Green gets a rave up in the

920
00:50:20,560 --> 00:50:23,520
Speaker 1: New York Times today for Devil's Bargain. If you are

921
00:50:24,560 --> 00:50:27,600
Speaker 1: a political junkie at Washington everybody's gonna buy the hardcover

922
00:50:27,640 --> 00:50:29,319
Speaker 1: and walk around even if they don't read it. They're

923
00:50:29,360 --> 00:50:32,280
Speaker 1: just gonna walk around with it to be cool. Bonus

924
00:50:32,360 --> 00:50:34,520
Speaker 1: round for those of us are not addicted to the

925
00:50:34,600 --> 00:50:39,120
Speaker 1: Washington ballet. It is. It reads, it reads, David, I

926
00:50:39,200 --> 00:50:41,919
Speaker 1: just got it. It reads like King's Landing and Game

927
00:50:41,960 --> 00:50:45,239
Speaker 1: of Thrones. That's what it reads like. I'm glad that

928
00:50:45,280 --> 00:50:47,160
Speaker 1: the allegiance the Game of Thrones continue here to you know.

929
00:50:47,200 --> 00:50:49,759
Speaker 1: And it's not a bad analogy to Trump's Washington. There's

930
00:50:49,760 --> 00:50:52,600
Speaker 1: a lot of backstabbing and and jocking for power, and

931
00:50:52,920 --> 00:50:55,680
Speaker 1: thrived on the chaos he created and did everything he

932
00:50:55,719 --> 00:50:58,319
Speaker 1: could to make it spread. When he finally made his

933
00:50:58,360 --> 00:51:01,320
Speaker 1: way through the crowd to the back of the room,

934
00:51:01,400 --> 00:51:03,839
Speaker 1: he looked at Jamie and said, no, the Dragon Queen

935
00:51:03,840 --> 00:51:08,600
Speaker 1: will not be here. It's Audible. Thank you. We take

936
00:51:08,640 --> 00:51:11,799
Speaker 1: Audible for their support as well. Devil's Bargain Joshua Green

937
00:51:12,200 --> 00:51:16,760
Speaker 1: to look forward for the Trump administration. This is Bloomberg, David,

938
00:51:16,760 --> 00:51:18,960
Speaker 1: why don't you bring in her steam? Guest Joshua Green.

939
00:51:19,040 --> 00:51:21,960
Speaker 1: But I got one quick question. The presidential tweet two

940
00:51:22,000 --> 00:51:24,239
Speaker 1: minutes ago with only a very small majority of the

941
00:51:24,280 --> 00:51:27,040
Speaker 1: Republicans in the House and send it need more victories

942
00:51:27,080 --> 00:51:31,759
Speaker 1: next year since DEM's totally obstruct no votes exclamation point.

943
00:51:31,840 --> 00:51:33,839
Speaker 1: I have no idea what that means. What does Mr

944
00:51:33,920 --> 00:51:39,080
Speaker 1: Bannon think of the President's tweets? Bannon, actually, I think

945
00:51:39,360 --> 00:51:41,640
Speaker 1: likes it. Nobody else in the White House likes it.

946
00:51:41,680 --> 00:51:44,320
Speaker 1: But Bannon thinks he's connecting with his audience, he's connecting

947
00:51:44,320 --> 00:51:47,080
Speaker 1: with his bass that he's calling out the quote unquote

948
00:51:47,120 --> 00:51:49,480
Speaker 1: opposition party in the media. I don't agree. I think

949
00:51:49,520 --> 00:51:53,520
Speaker 1: it's a stupid thing that undermines any legislative momentum. But

950
00:51:53,840 --> 00:51:56,120
Speaker 1: you know, Bannon and Trump both think differently about media

951
00:51:56,120 --> 00:51:58,200
Speaker 1: and politics. Has gott him this far, hasn't got him

952
00:51:58,200 --> 00:52:01,799
Speaker 1: a healthcare bill, but maybe we'll have to readjust and

953
00:52:01,840 --> 00:52:04,400
Speaker 1: try and try a different strategy. Now, I want to

954
00:52:04,440 --> 00:52:09,040
Speaker 1: ask you about Russia. Overlaying all of this. Of course,

955
00:52:09,080 --> 00:52:10,719
Speaker 1: a lot of people are wondering what connections are there,

956
00:52:10,719 --> 00:52:12,839
Speaker 1: what connections have been As you looked into Mr Bannon,

957
00:52:12,880 --> 00:52:14,840
Speaker 1: as you talked to him, did he have any fascination

958
00:52:14,880 --> 00:52:19,319
Speaker 1: with or interaction with Russia at large? Bannon did have

959
00:52:19,400 --> 00:52:23,760
Speaker 1: a fascination with Russia, but it wasn't about Hillary's emails

960
00:52:23,760 --> 00:52:25,800
Speaker 1: and all the things that are causing such a scandal

961
00:52:25,880 --> 00:52:31,560
Speaker 1: right now. Bannon is, among other things, very deeply read

962
00:52:32,200 --> 00:52:37,320
Speaker 1: intellectual who helped develop his politics by uh exhuming the

963
00:52:37,400 --> 00:52:41,320
Speaker 1: fascist philosophers of the thirties and forties. UH. He believes

964
00:52:41,360 --> 00:52:45,920
Speaker 1: in something called traditionalism, which is a very right wing,

965
00:52:46,000 --> 00:52:50,320
Speaker 1: backward looking philosophy that has certain adherents. The most important

966
00:52:50,400 --> 00:52:53,920
Speaker 1: one in the world before Bannon came along as Alexander Dugan,

967
00:52:54,040 --> 00:52:57,920
Speaker 1: who is Vladimir Putin's chief ideologist. And I think one

968
00:52:57,960 --> 00:53:01,280
Speaker 1: of the reason that you see on a traction between

969
00:53:01,520 --> 00:53:05,120
Speaker 1: right wing American political types and Russia is that they

970
00:53:05,160 --> 00:53:07,480
Speaker 1: really do think similarly on some of these issues. But

971
00:53:07,560 --> 00:53:10,000
Speaker 1: Bannon's attraction, I think it was more intellectual. I'm gonna

972
00:53:10,000 --> 00:53:12,720
Speaker 1: interrupt her and be rude. I'm page two oh five.

973
00:53:13,239 --> 00:53:18,000
Speaker 1: You mentioned the Republican philosopher Mussolini. Is that what you're

974
00:53:18,000 --> 00:53:21,320
Speaker 1: talking about? Yes? Literally, this one time about Bannons. Bannon

975
00:53:21,440 --> 00:53:24,560
Speaker 1: had Bannon's guru. This is gonna sound absolutely nuts. It's

976
00:53:24,560 --> 00:53:28,440
Speaker 1: covered in the book. Bannon's guru is an early twentieth

977
00:53:28,560 --> 00:53:33,759
Speaker 1: century UH French occultist and freemason named Renee Gunion. Who

978
00:53:33,760 --> 00:53:37,960
Speaker 1: became the godfather for a whole group of thinkers, including

979
00:53:37,960 --> 00:53:42,640
Speaker 1: a guy named Julius Evla, who was Mussolini's fascist racial

980
00:53:42,760 --> 00:53:46,480
Speaker 1: theorist in the nineteen thirties, had a falling out later

981
00:53:47,000 --> 00:53:49,719
Speaker 1: had influence in Nazi Germany. But these are the kind

982
00:53:49,760 --> 00:53:54,640
Speaker 1: of people, uh, that are shaping the outlook that Bannon

983
00:53:54,719 --> 00:53:56,600
Speaker 1: is bringing to Trump in the White House. Is a

984
00:53:56,600 --> 00:53:59,920
Speaker 1: whole kind of hidden backstory here that that kind of

985
00:54:00,440 --> 00:54:03,120
Speaker 1: spilling out and helps to explain what it is these

986
00:54:03,160 --> 00:54:05,480
Speaker 1: guys think they're doing, and I think why they think

987
00:54:05,600 --> 00:54:08,960
Speaker 1: so differently about politics than anybody who's come before them.

988
00:54:09,200 --> 00:54:14,320
Speaker 1: You mentioned his his intellectual development. He's raised Roman Catholic

989
00:54:14,760 --> 00:54:19,279
Speaker 1: outside of in in southeastern Virginia. Uh. He then goes

990
00:54:19,360 --> 00:54:21,880
Speaker 1: on to Virginia Tech, goes onto Harvard Business School. So

991
00:54:21,880 --> 00:54:24,120
Speaker 1: we have his professional evolution as well. What about his

992
00:54:24,120 --> 00:54:26,560
Speaker 1: political evolution? How does that come about? How does he

993
00:54:26,600 --> 00:54:28,200
Speaker 1: become someone who is so interested in the ideas that

994
00:54:28,200 --> 00:54:30,640
Speaker 1: you would just frong you know the issue. He's raised, Uh,

995
00:54:31,080 --> 00:54:35,440
Speaker 1: working class, blue collar Irish family, Catholic family in Richmond,

996
00:54:35,520 --> 00:54:39,640
Speaker 1: Vikenedy worshiping Kennedy worshiping. This is a democratic family, goes

997
00:54:39,680 --> 00:54:43,239
Speaker 1: into the race. He goes into the navy, and what

998
00:54:43,560 --> 00:54:48,400
Speaker 1: flipped bannon uh to hard right populism was the Iran

999
00:54:48,440 --> 00:54:51,320
Speaker 1: hostage crisis. He was on a destroyer in the Golden involved,

1000
00:54:51,360 --> 00:54:53,920
Speaker 1: he was part of the failed he was he was

1001
00:54:54,040 --> 00:54:56,920
Speaker 1: up part of the failed mission to rescue the hostage

1002
00:54:56,920 --> 00:54:59,520
Speaker 1: is not in any direct way but served aboard the

1003
00:54:59,600 --> 00:55:03,040
Speaker 1: navy you and was so incensed is what he saw

1004
00:55:03,200 --> 00:55:06,320
Speaker 1: as the insult to American prestige that he turned on

1005
00:55:06,400 --> 00:55:11,480
Speaker 1: Jimmy Carter became this kind of Reagan venerating um, pro

1006
00:55:11,800 --> 00:55:15,200
Speaker 1: Wall Street banker type throughout the eighties and just gradually

1007
00:55:15,280 --> 00:55:17,719
Speaker 1: drifted further and further the right until they got to

1008
00:55:17,760 --> 00:55:20,360
Speaker 1: where he use today. There are people today talking about

1009
00:55:20,600 --> 00:55:23,600
Speaker 1: the I word, talking about impeachment. And there's a moment

1010
00:55:23,680 --> 00:55:27,160
Speaker 1: in the book where you're talking about the debate over

1011
00:55:27,160 --> 00:55:29,319
Speaker 1: impeachment to President Clinton and how people kind of getting

1012
00:55:29,320 --> 00:55:31,080
Speaker 1: ahead of themselves when it came to this is an

1013
00:55:31,080 --> 00:55:35,000
Speaker 1: impeachable offense. Can you draw parallel to today? Are are

1014
00:55:35,880 --> 00:55:38,200
Speaker 1: like in this case Democrats in the same place that

1015
00:55:38,239 --> 00:55:40,600
Speaker 1: Republicans wrots it back in the in the mid nineties.

1016
00:55:40,680 --> 00:55:44,120
Speaker 1: That's a great question, Bannon. Bannon in addition to being

1017
00:55:44,320 --> 00:55:46,280
Speaker 1: a kind of a weird guy and a brilliant strategist,

1018
00:55:47,080 --> 00:55:50,319
Speaker 1: has a very sharp analytical mind. And and to me,

1019
00:55:50,440 --> 00:55:52,320
Speaker 1: what drew me to him originally I wrote a big

1020
00:55:52,360 --> 00:55:55,520
Speaker 1: Business Week cover story I'm in was that I thought

1021
00:55:55,520 --> 00:55:59,440
Speaker 1: he correctly diagnosed what it was that stopped Republicans in

1022
00:55:59,440 --> 00:56:02,520
Speaker 1: the late night nineties when they tried to impeach Bill Clinton.

1023
00:56:02,560 --> 00:56:05,520
Speaker 1: When they did impeach Bill Clinton. Uh and and Bannon's

1024
00:56:05,880 --> 00:56:09,600
Speaker 1: contention was that Republicans became trapped in their own echo chamber.

1025
00:56:09,640 --> 00:56:12,040
Speaker 1: They were talking to each other, they weren't listening. I

1026
00:56:12,080 --> 00:56:15,480
Speaker 1: think the Democrats or run the risk of doing the

1027
00:56:15,520 --> 00:56:18,560
Speaker 1: same thing now with all the hystery overpeachment, it's not

1028
00:56:18,600 --> 00:56:21,520
Speaker 1: gonna happen. And if that's where they cast their lot,

1029
00:56:21,600 --> 00:56:23,440
Speaker 1: if they don't do anything to kind of appeal to

1030
00:56:23,480 --> 00:56:27,279
Speaker 1: the type of voters that Trump's won, who knows. I

1031
00:56:27,320 --> 00:56:29,360
Speaker 1: wanted to go right there, which is what's going to

1032
00:56:29,440 --> 00:56:31,759
Speaker 1: be the detri is a Washington watch or how do

1033
00:56:31,840 --> 00:56:35,279
Speaker 1: they coalesce after the secretary goes down in flames in

1034
00:56:35,320 --> 00:56:38,319
Speaker 1: the election? What's the New Democratic Party gonna look like?

1035
00:56:38,840 --> 00:56:41,480
Speaker 1: You know? The New Democratic Party is the party of

1036
00:56:41,520 --> 00:56:44,320
Speaker 1: the resistance and and and one of the things Bannon

1037
00:56:44,520 --> 00:56:48,480
Speaker 1: told me on election mourning was, do you understand what happened?

1038
00:56:48,480 --> 00:56:50,800
Speaker 1: Do you understand why she lost? I said, no, explain

1039
00:56:50,880 --> 00:56:53,520
Speaker 1: it to me. And he said, Democrats and Hillary and

1040
00:56:53,600 --> 00:56:55,759
Speaker 1: you guys meaning the media. He considered us part of

1041
00:56:55,760 --> 00:56:59,560
Speaker 1: the left. You guys fell prey to the same thing

1042
00:56:59,600 --> 00:57:02,399
Speaker 1: that publicans did in the nineteen nineties. You believed your

1043
00:57:02,400 --> 00:57:05,240
Speaker 1: own spin. You didn't see how the world really works.

1044
00:57:05,360 --> 00:57:08,560
Speaker 1: That's why Hillary lost. I expected after the election that

1045
00:57:08,640 --> 00:57:11,319
Speaker 1: there would be this great democratic awakening, that there would

1046
00:57:11,320 --> 00:57:14,359
Speaker 1: be a lot of internal angst and debate about how

1047
00:57:14,360 --> 00:57:17,000
Speaker 1: the party could brought in speel. That hasn't happened. The

1048
00:57:17,040 --> 00:57:19,920
Speaker 1: Democratic Party has been unified in opposition to Trump, but

1049
00:57:20,000 --> 00:57:21,760
Speaker 1: they haven't really done a lot of soul searching and

1050
00:57:21,840 --> 00:57:24,439
Speaker 1: given any indication that they're going to change. Joshua Green

1051
00:57:24,760 --> 00:57:27,439
Speaker 1: Devil's Bargain with a wonderful review in The New York

1052
00:57:27,480 --> 00:57:31,720
Speaker 1: Times Today of Bloomberg News, Joshua Green Devil's Bargain must

1053
00:57:31,720 --> 00:57:44,480
Speaker 1: read on your Washington. Thanks for listening to the Bloomberg

1054
00:57:44,480 --> 00:57:50,840
Speaker 1: Savannas Podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,

1055
00:57:51,200 --> 00:57:55,040
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at

1056
00:57:55,040 --> 00:57:59,720
Speaker 1: Tom Keene David Gura. Is that David Gura? Before the podcast?

1057
00:58:00,080 --> 00:58:14,560
Speaker 1: You could always catch us worldwide on Bloomberg Radio, brought

1058
00:58:14,600 --> 00:58:18,120
Speaker 1: you by Bank of America Mary Lynch. With virtual reality,

1059
00:58:18,400 --> 00:58:23,800
Speaker 1: virtually everything will change. Discover opportunities in a transforming world,

1060
00:58:24,200 --> 00:58:28,520
Speaker 1: be of a mL dot com, slash VR, Mary Lynch,

1061
00:58:28,600 --> 00:58:30,960
Speaker 1: Pierced Fenner and Smith Incorporated