WEBVTT - Trump Government Muddies Economics With Politics: Alan Blinder 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg P and L Podcast. I'm Pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Abramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg P and L 0:00:20.840 --> 0:00:32.720 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. He 0:00:32.760 --> 0:00:36.440 has been at Princeton since the early nineteen seventies. Alan 0:00:36.520 --> 0:00:39.519 Blinder is an economist. He's a former vice chair of 0:00:39.560 --> 0:00:43.240 the Federal Reserve. He is currently the Gordon Renschler Memorial 0:00:43.280 --> 0:00:46.720 Professor of Economics at Princeton University, and he is the 0:00:46.760 --> 0:00:49.159 author of a new book is that It is entitled 0:00:49.200 --> 0:00:55.640 Advice and Dissent Why America's Suffers When Economics and Politics Collide. 0:00:55.920 --> 0:00:58.840 Alan Blinder, thank you very much for being with us. 0:00:58.880 --> 0:01:01.680 I want to jump right into which you describe. You 0:01:01.720 --> 0:01:04.840 have an interesting phrase in the book. I believe it's 0:01:05.200 --> 0:01:07.760 it's a new world have you And I'm wondering if 0:01:07.760 --> 0:01:10.360 you could sort of describe where you came up with that, 0:01:10.520 --> 0:01:13.200 and maybe just also tell us how do you define 0:01:13.280 --> 0:01:18.000 political logic? All right, let me try to do those uh, 0:01:18.120 --> 0:01:21.120 The phrase was at the end of an anecdote that 0:01:21.160 --> 0:01:24.720 I was relating from when I, way back in the 0:01:24.800 --> 0:01:31.679 nineties migrated temporarily from the academic world to the political 0:01:31.760 --> 0:01:36.880 world and experienced at the table with Bill Clinton, who 0:01:37.000 --> 0:01:41.959 was then President elect, my first photo op. If you're 0:01:41.959 --> 0:01:44.000 an academic, you don't do a lot of photo ops. 0:01:44.040 --> 0:01:47.520 In fact, you don't do any But if you're a politician, 0:01:48.000 --> 0:01:51.120 you do. And Bill Clinton, as the photographers rushed in, 0:01:51.880 --> 0:01:54.680 said to me, um Alan, You're now supposed to say 0:01:54.720 --> 0:02:00.000 nothing and look profound. And I retorted, as funny, because 0:02:00.040 --> 0:02:02.360 of my previous jobs, I was supposed to say profound 0:02:02.400 --> 0:02:06.600 things that look like nothing. Uh So it was indeed 0:02:06.600 --> 0:02:10.880 a new world for me. Um Your question about political 0:02:11.960 --> 0:02:16.080 logic goes to a number of things that informal logic, 0:02:16.200 --> 0:02:19.880 or what I call in the book Aristotelian logic, kind 0:02:19.919 --> 0:02:25.280 of things we teach in universities are very different. I'll 0:02:25.280 --> 0:02:27.880 give you an example that's really arithmetic, which is a 0:02:27.880 --> 0:02:31.680 form of logic. If you take a policy, and by 0:02:31.720 --> 0:02:35.440 the way, many details of trade policies and tax policies 0:02:35.440 --> 0:02:40.560 are like this. That gives a very large um gift 0:02:41.240 --> 0:02:46.880 to a relatively small number of people and uh and 0:02:46.960 --> 0:02:53.880 also disadvantages, but by small amounts, many, many millions of people. 0:02:54.960 --> 0:02:59.320 Economic logic would likely say that's a bad idea. You 0:02:59.400 --> 0:03:01.600 added up over the millions of people, and that's a 0:03:01.639 --> 0:03:05.200 bad idea. Political logic says, this is a great idea 0:03:05.960 --> 0:03:08.040 because the millions of people that lose, you know, I 0:03:08.080 --> 0:03:11.240 make up a number two dollars a year are not 0:03:11.280 --> 0:03:13.440 going to notice it that I won't understand that even 0:03:13.440 --> 0:03:16.280 if they do, two dollars does not move them to 0:03:16.360 --> 0:03:20.840 political action. But if other people are gaining millions, that will. 0:03:21.520 --> 0:03:25.160 Professor Blinder, I'm struck by an implicit assumption in this 0:03:25.280 --> 0:03:29.840 idea that you shouldn't mix economics and politics. Um, are 0:03:29.880 --> 0:03:32.480 we really worse than we ever have been before? Because 0:03:32.520 --> 0:03:35.160 this has always been the issue, from the foundation of 0:03:35.200 --> 0:03:38.000 the Federal Reserve, in the U. S. Treasury Department, it 0:03:38.080 --> 0:03:40.200 has always been the issue. I think we're worse than 0:03:40.200 --> 0:03:44.800 ever before, and presumably this is a temporary condition because 0:03:44.840 --> 0:03:49.840 of Donald Trump's general rejection of expertise in every domain. 0:03:50.040 --> 0:03:53.000 This is not just the economics that he does this 0:03:53.760 --> 0:03:56.880 and I can't remember another I don't think we ever 0:03:56.960 --> 0:04:02.040 had another president that had that kind of atitude towards expertise, 0:04:02.040 --> 0:04:05.520 which is not to say, and this is your point, really, 0:04:06.000 --> 0:04:09.760 that they've always followed the advice of expert technicians. No, 0:04:09.920 --> 0:04:13.840 they haven't. In fact, more often than not they rejected it. 0:04:14.520 --> 0:04:18.120 And that's okay, because, um, we live in a democracy 0:04:18.160 --> 0:04:22.520 and we elect politicians, not technocrats to make decisions. Yeah, 0:04:22.560 --> 0:04:26.400 Professor Blinder. One area of the government that typically has 0:04:26.440 --> 0:04:28.880 tried to remain at least the veneer of being somewhat 0:04:28.920 --> 0:04:33.200 independent from the sort of political regime is the Federal Reserve. 0:04:33.440 --> 0:04:35.760 There are a lot of vacancies on the Federal Reserve. 0:04:35.839 --> 0:04:39.400 One that has got garnered some attention is the rumor 0:04:39.440 --> 0:04:42.640 that John Williams will be the next New York Fed 0:04:42.839 --> 0:04:47.080 president selection. I'm wondering what is your feeling about that, 0:04:47.279 --> 0:04:49.919 and just generally about sort of the composition of the 0:04:49.920 --> 0:04:53.960 Fed right now. Yeah. So, uh, you know, there there 0:04:54.000 --> 0:04:57.240 has been a clamor for some time for diversity, and 0:04:57.320 --> 0:05:00.160 I'm very sympathetic to that. I think other things that well, 0:05:00.160 --> 0:05:05.160 it's better to have diversity. Um, we had a woman 0:05:05.279 --> 0:05:08.240 chairman of the Faith, which was great, and she was 0:05:08.279 --> 0:05:10.960 a great chair of the Fed, Janet Ellen. I think 0:05:11.040 --> 0:05:16.039 John Williams is an excellent selection for the presidency of 0:05:16.080 --> 0:05:18.839 the New York Fed. That's not, by the way, a 0:05:18.839 --> 0:05:22.479 political appointment, unlike the governor. Know you mentioned the vacancies. 0:05:23.160 --> 0:05:26.160 There lots of vacancies exists on the Board of Governors, 0:05:26.160 --> 0:05:29.920 and for that we need nominees from President Trump that 0:05:30.040 --> 0:05:33.120 get confirmed by the Senate. John Williams at the New 0:05:33.160 --> 0:05:36.320 York Fed or any of the bank presidents of the 0:05:36.360 --> 0:05:42.000 twelve federal reserve banks are not political appointees. Why do 0:05:42.040 --> 0:05:43.760 you what do you want people to take away from 0:05:43.760 --> 0:05:47.840 the book Advice and dissent. Yeah, it's a good question. 0:05:47.960 --> 0:05:53.480 I'd like people to take away the stark contrast between 0:05:54.400 --> 0:05:57.720 the advice that's given by a lot of economists, and 0:05:57.760 --> 0:06:00.400 of course it's not all the same, although I do 0:06:00.720 --> 0:06:02.800 emphasize in the book there's a lot more agreement among 0:06:02.839 --> 0:06:08.560 economists and people commonly think, and the way that it 0:06:08.480 --> 0:06:16.240 is ignored or distorted or so on by politicians. I 0:06:16.320 --> 0:06:19.520 don't want people thinking that I believe that technocrats should 0:06:19.560 --> 0:06:22.960 be making all these decisions. I don't. But what I 0:06:23.000 --> 0:06:25.279 think we could do a better job of is, like 0:06:25.360 --> 0:06:28.160 I used the phrase in the book, moving the needle 0:06:29.200 --> 0:06:32.080 a little bit away from where it is now, where 0:06:32.120 --> 0:06:37.000 decisions are just so so political with very little technocratic 0:06:37.120 --> 0:06:40.440 input that actually matters, and just move it a bit 0:06:40.880 --> 0:06:44.160 away from that. I think we could get better economic 0:06:44.240 --> 0:06:47.640 policies if we did that. Do you get the sense 0:06:47.960 --> 0:06:52.359 that sort of career government workers are still head down 0:06:52.560 --> 0:06:55.400 doing their job making the country run, or do you 0:06:55.440 --> 0:06:59.960 think that the current administration has changed that aspect of government. 0:07:00.480 --> 0:07:03.040 I think they are there with their heads found. Who 0:07:03.080 --> 0:07:05.120 have there john some of them hiding under their dead 0:07:06.080 --> 0:07:11.640 waiting for the storm to pass. But here's the thing. Uh, 0:07:11.760 --> 0:07:15.080 let's druk sharp contrast between our system and say, the 0:07:15.120 --> 0:07:19.040 British system. In the British system, a new government comes in, 0:07:19.400 --> 0:07:22.960 the minister gets replaced, everybody else stays on the job. 0:07:23.760 --> 0:07:27.280 In our system, the political appointees come in and they 0:07:27.320 --> 0:07:30.960 take about the five top levels of the bureaucracy over 0:07:31.760 --> 0:07:35.800 and then the technocrats start below that. The these uh 0:07:35.960 --> 0:07:39.920 people that Steve Mannon called the deep state. Uh, except 0:07:40.000 --> 0:07:42.840 that the State Department, which has been almost denuded, it 0:07:42.920 --> 0:07:47.360 seems a lot of the deep state people are still 0:07:47.400 --> 0:07:50.320 there and they're trying to ride out this storm. The 0:07:50.360 --> 0:07:52.160 e p A is another place where they're having a 0:07:52.280 --> 0:07:56.880 very very hard uh, very very hard time. But so 0:07:56.920 --> 0:08:01.480 it's not just the cabinet member that changes. It's quite 0:08:01.560 --> 0:08:06.760 a few people, uh, in any in any cabinet department. 0:08:07.080 --> 0:08:09.360 Alan Blinder, thank you so much for being with us. 0:08:09.480 --> 0:08:12.760 He is the Gordon Renchler Memorial Professor of Economics at 0:08:12.760 --> 0:08:17.160 Princeton University, also former FED Vice chair uh and he 0:08:17.240 --> 0:08:20.800 has a new book, Advice and Dissent, Why America Suffers 0:08:20.800 --> 0:08:39.920 when Economics and Politics collide. Sinclair Broadcast Group is the 0:08:39.960 --> 0:08:44.040 biggest US broadcaster. It is trying to tie up loose 0:08:44.200 --> 0:08:48.920 ends as the FEC decides whether it can buy Tribune Media, 0:08:49.080 --> 0:08:52.079 and now it's generating a new controversy. Here to tell 0:08:52.160 --> 0:08:54.319 us more about that, I'm so happy to bring in 0:08:54.360 --> 0:09:01.040 Jordan's Holman, who covers all things related to wages, salaries, compensation, 0:09:01.640 --> 0:09:05.280 personnel issues. Jordan's just, first of all, can you set 0:09:05.280 --> 0:09:07.800 the stage. What is the controversy here with Sinclair? So 0:09:07.880 --> 0:09:11.680 over the weekend, uh, the Sinclair anchors across the country 0:09:11.960 --> 0:09:15.760 they were giving, you know, a blanket speech. I was saying, 0:09:16.080 --> 0:09:19.520 we decry false news and dead spend put together a 0:09:19.600 --> 0:09:22.400 video of all these anchors saying the same words, and 0:09:22.880 --> 0:09:25.520 some people in the media and people watching felt like 0:09:25.520 --> 0:09:29.319 it was a shot at the integrity of the news media. Okay, 0:09:29.440 --> 0:09:34.400 so why is this now causing some angst among the 0:09:34.880 --> 0:09:39.160 nearly two hundred stations that Sinclair runs. So a lot 0:09:39.240 --> 0:09:41.360 of the journalists I spoke to who work at Sinclair, 0:09:41.400 --> 0:09:43.840 they didn't like that their company was in the spotlight 0:09:43.840 --> 0:09:46.000 in that negative way, that it looked like they were 0:09:46.120 --> 0:09:50.400 talking negatively about other media companies. And so the question 0:09:50.440 --> 0:09:52.400 started to come up, well, why don't you just quit? 0:09:52.400 --> 0:09:55.040 Why don't you leave and go somewhere else? And people 0:09:55.240 --> 0:09:57.679 said that in their contract they would have to pay 0:09:57.760 --> 0:10:01.319 up to their annual compensate shin if they wanted to 0:10:01.400 --> 0:10:03.880 leave before their contract was over, which is a steep 0:10:03.880 --> 0:10:07.280 price if they broke their contracts. Yeah, so that's that's 0:10:07.320 --> 0:10:09.280 my question. I mean, is this normal to have, say, 0:10:09.320 --> 0:10:12.920 a two year contract, especially in broadcast, uh, that has 0:10:12.960 --> 0:10:16.000 a penalty should you choose to quit. So on broadcast, 0:10:16.080 --> 0:10:18.160 is normal to have a contract that you ask someone 0:10:18.200 --> 0:10:20.800 to stay two or three years. But what's not normal 0:10:21.000 --> 0:10:23.480 that some lawyers said who I spoke to, is that 0:10:23.520 --> 0:10:25.480 you have the steep penalty that you have to give 0:10:26.240 --> 0:10:30.040 your compensation if you leave beforehand, and that if it 0:10:30.120 --> 0:10:32.840 usually applies to orang air talent, but at Sinclair, some 0:10:32.880 --> 0:10:35.320 people who never appeared on TV had to sign that 0:10:35.440 --> 0:10:40.480 clause and maybe just also offer up what the response 0:10:40.640 --> 0:10:45.560 was from Sinclair and the various UH maybe TV stations 0:10:45.679 --> 0:10:48.920 or broadcast networks that you were able to contact in 0:10:48.960 --> 0:10:52.600 regards to the story. So Sinclair's vice president of news 0:10:52.679 --> 0:10:55.320 he sent out a memo to all the employees UH 0:10:55.440 --> 0:10:59.760 yesterday on Monday, saying that critics were ubsite at their 0:10:59.800 --> 0:11:01.840 just is and to have the anchors read this false 0:11:01.880 --> 0:11:05.040 news statement but that context was missing and perspective was 0:11:05.160 --> 0:11:07.680 missing missing, and that employees would be proud of where 0:11:07.679 --> 0:11:11.560 they work. Sinclair hasn't directly um spoken to Bloomberg about it, 0:11:11.760 --> 0:11:15.160 but some employees still didn't feel like that was enough. Okay, 0:11:15.160 --> 0:11:17.920 to be very clear, the lines that we're talking about 0:11:17.960 --> 0:11:20.760 here are the sharing of biased and false news has 0:11:20.800 --> 0:11:24.240 become all too common on social media. Some members of 0:11:24.280 --> 0:11:28.319 the media use their platforms to push their own personal bias. 0:11:28.400 --> 0:11:30.120 I have to say, you know, there are a lot 0:11:30.160 --> 0:11:33.000 of people who probably believe this, and you know, you 0:11:33.080 --> 0:11:37.000 might even have some journalists who do feel like this 0:11:37.160 --> 0:11:41.600 is the case who work for Sinclair. Why is this different, right, 0:11:41.640 --> 0:11:44.080 Why is this different from just a number of people 0:11:44.280 --> 0:11:49.200 saying something sort of decrying and ambiguous, uh sort of concept. Well, 0:11:49.280 --> 0:11:50.960 when you go back to the idea of what's the 0:11:51.000 --> 0:11:55.000 context around Sinclair, they are the largest broadcaster in the US. 0:11:55.040 --> 0:11:57.840 They reached about thirty eight percent of households in the US. 0:11:58.080 --> 0:12:01.440 So when they're you know, broadcasting this to all markets 0:12:01.480 --> 0:12:04.920 across the country, some people don't agree with that, you know, 0:12:05.040 --> 0:12:08.079 they it seems like you're taking shots within the industry. Well, 0:12:08.400 --> 0:12:10.080 but this is this is the key question. Is it 0:12:10.160 --> 0:12:12.720 the content of what that said? Or is it the 0:12:12.760 --> 0:12:15.880 fact that journalists who are supposed to be coming at 0:12:15.960 --> 0:12:19.040 something from a sort of impartial perspective or given a 0:12:19.160 --> 0:12:22.480 script to read. I mean, how unusual is that aspect 0:12:22.520 --> 0:12:24.880 of this, Right, It's definitely something you don't see every day. 0:12:24.880 --> 0:12:27.120 That's why I think that video really resonated when it 0:12:27.160 --> 0:12:29.520 was like all these journalists from all these differ cities 0:12:29.520 --> 0:12:31.880 are saying the exact same thing. So it kind of 0:12:32.000 --> 0:12:35.640 seems like, well, we're Sinclair saying we're being impartial and 0:12:35.679 --> 0:12:38.600 we're the real journalists. But they're still providing a script 0:12:38.760 --> 0:12:41.319 which doesn't always add up. And so you know, the 0:12:41.440 --> 0:12:44.319 journalist I spoke to at Sinclair said that that rubbed 0:12:44.360 --> 0:12:47.239 them wrong. They did not like that, and that they 0:12:47.280 --> 0:12:51.559 even if they wanted away out, it just seemed too expensive. Um, 0:12:51.600 --> 0:12:54.880 there's a case right now, former employee who works in 0:12:54.960 --> 0:12:57.760 Florida who suit the or who got sued by the 0:12:57.800 --> 0:13:00.840 company for leaving early, for breaking his contract act. And 0:13:01.040 --> 0:13:03.360 now he's facing that in court and he has a 0:13:03.400 --> 0:13:05.880 lawyer and assistant. Expensive process to want to leave if 0:13:05.880 --> 0:13:09.400 you want to. And and also just to add to this, uh, 0:13:09.600 --> 0:13:14.200 Sinclair is described as the country's largest broadcaster right it 0:13:14.280 --> 0:13:18.719 has about it has a hundred and ninety three television stations, 0:13:18.800 --> 0:13:22.880 and it is seeking to purchase Tribune Media for three 0:13:22.920 --> 0:13:27.120 point nine billion dollars and regulators are looking over that 0:13:27.200 --> 0:13:30.880 potential acquisition because of any trust concerns. Right, Yeah, it 0:13:30.880 --> 0:13:35.160 would make it even huger broadcaster, reaching even more Americans. 0:13:35.720 --> 0:13:39.000 But President Trump supports that. Yes, So yesterday, um, he 0:13:39.040 --> 0:13:44.080 tweeted that Sinclair was a far superior network compared to 0:13:44.280 --> 0:13:47.280 NBC or CNN, and so he did definitely you know, 0:13:47.360 --> 0:13:52.840 throw his hat behind like them as a broadcast institution. Well, 0:13:52.880 --> 0:13:54.520 I guess this is a story that's going to keep 0:13:54.559 --> 0:13:58.000 on developing, and we thank you very much for sharing 0:13:58.000 --> 0:14:01.040 it with us and giving us this detail. Jordan's Holman 0:14:01.200 --> 0:14:05.240 of Bloomberg News about Sinclair employees uh AS, saying that 0:14:05.360 --> 0:14:23.680 contracts make it too expensive for them to quit the company. 0:14:24.800 --> 0:14:28.280 One area that we really need to address is in Britain. 0:14:28.400 --> 0:14:31.280 We are dealing with less than a year now before 0:14:31.560 --> 0:14:36.480 Brexit day countdown has begun. There are some crucial issues 0:14:36.520 --> 0:14:39.520 to be decided. It's unclear whether there is much progress 0:14:39.880 --> 0:14:42.640 being made on them. Here to join us is Baroness 0:14:42.640 --> 0:14:46.600 Helena Kennedy, a Labor Party member of the House of Lords, 0:14:46.640 --> 0:14:49.280 coming to us here in our eleven three studios in 0:14:49.280 --> 0:14:52.120 New York, even though she's normally based in London. Thank 0:14:52.160 --> 0:14:55.560 you so much for being here. I want to want 0:14:55.600 --> 0:14:58.720 I want to ask about momentum, because I think in 0:14:58.760 --> 0:15:01.320 the US, for example, a lot of times when you 0:15:01.320 --> 0:15:03.760 mentioned Brexit, people's eyes glaze over. Oh, that's still going 0:15:03.760 --> 0:15:05.240 on again. Aren't they just going to come to some 0:15:05.320 --> 0:15:07.680 kind of resolution and everything's going to move on the 0:15:07.720 --> 0:15:09.920 way it was. Do you think that people are not 0:15:10.000 --> 0:15:13.560 paying enough attention to the potential ramifications of what's going 0:15:13.600 --> 0:15:15.920 to have to happen in the next year. It's taken 0:15:15.920 --> 0:15:17.760 a long time to get to this point. I mean, 0:15:17.800 --> 0:15:21.920 we've wasted such a lot of time, um really dealing 0:15:21.960 --> 0:15:25.760 with the complexity which people hadn't fully understood. And so 0:15:25.800 --> 0:15:30.000 I think that slowly there is a realization actually economically 0:15:30.440 --> 0:15:33.400 in terms of peace and Ireland, in terms of the 0:15:33.560 --> 0:15:36.560 immigration issues, that actually this is not going to be 0:15:36.640 --> 0:15:39.360 the solution to many of the problems that people felt 0:15:39.440 --> 0:15:42.080 very strongly about. And so I think that that's slowly 0:15:42.120 --> 0:15:44.960 filtering through, but it's getting late in the day further 0:15:45.080 --> 0:15:48.800 to be any kind of real comeback on that. I mean, 0:15:48.800 --> 0:15:52.400 we've the deadline now is October. We've been told by 0:15:52.960 --> 0:15:56.280 our the negotiators in Europe. Um I met with Barnier, 0:15:56.360 --> 0:16:00.880 who is leading the European Union negotiations. Um I met 0:16:00.920 --> 0:16:03.040 with him a month ago and he said October is 0:16:03.080 --> 0:16:05.320 the deadline because it has to go in front of 0:16:05.360 --> 0:16:08.840 all the European and the European Parliament has to go 0:16:08.840 --> 0:16:11.280 in front of our parliament. To October is a deadline 0:16:11.520 --> 0:16:14.280 for exactly what this Brexit deal would look like. What 0:16:14.280 --> 0:16:16.200 the deal would look like and so and so we've 0:16:16.240 --> 0:16:19.000 really got a very small window of time in which 0:16:19.000 --> 0:16:22.120 to nail this down. And that's the real anxiety, because 0:16:22.600 --> 0:16:24.760 already there's been an agreement which is causing a lot 0:16:24.760 --> 0:16:28.960 of unhappiness, which is the transition deal, a recognition that 0:16:29.560 --> 0:16:32.239 by March of next year, a year from now exactly, 0:16:32.640 --> 0:16:34.840 we will not be in a place to actually say 0:16:34.920 --> 0:16:37.440 it's done and dusted. There has to be we will not. 0:16:37.800 --> 0:16:40.480 There's going to be a period of transition which will 0:16:40.480 --> 0:16:43.920 not end until December two thousand and twenty. And during 0:16:43.920 --> 0:16:46.160 that period things will carry on much the same as 0:16:46.200 --> 0:16:48.160 they are as a lot of people who are saying, 0:16:48.200 --> 0:16:50.200 but we voted to leave, we thought it was going 0:16:50.200 --> 0:16:53.560 to be a pretty swift deal and we'd get out 0:16:53.560 --> 0:16:56.120 and start treading with the rest of the world on 0:16:56.160 --> 0:16:59.040 our own, not with the rest of Europe and uh, 0:16:59.240 --> 0:17:01.720 and that's not going to be happening. And it's become 0:17:01.720 --> 0:17:04.680 clear because for example, business does not want to drop 0:17:04.720 --> 0:17:07.840 off a cliff cliff age, and so they want to transition. 0:17:07.840 --> 0:17:09.960 And there was a lot of pressure being put on government, 0:17:10.000 --> 0:17:13.160 by by business and by the city to say, look, 0:17:13.320 --> 0:17:18.480 we need to have serious transition, slow, slowly, safely surely, 0:17:18.960 --> 0:17:22.200 rather than somehow dropping off the edge and not knowing 0:17:22.240 --> 0:17:24.720 where we're going. Uncertainty, of course is bad for business, 0:17:24.920 --> 0:17:27.679 but it's bad for everybody and bad for individuals inside 0:17:27.680 --> 0:17:33.680 our society too. Baroness Kennedy, if if Brexit and the 0:17:34.080 --> 0:17:40.240 referendum process, uh, we're to have appeared before blind justice. 0:17:40.480 --> 0:17:42.480 And you know why I'm mentioning this because maybe you 0:17:42.520 --> 0:17:44.919 can offer people a little bit of your personal background. 0:17:46.280 --> 0:17:49.200 What do you think would be revealed about the actual 0:17:49.320 --> 0:17:54.479 referendum process and what people knew at the time of 0:17:54.520 --> 0:17:58.080 the referendum and what we are learning now about potential 0:17:58.240 --> 0:18:04.399 foreign interference uh in the referendum to leave or stay 0:18:04.560 --> 0:18:08.359 inside the European Union. Well, it is interesting. I mean, 0:18:08.400 --> 0:18:11.440 the problem with with a referendum is always that the 0:18:11.520 --> 0:18:13.720 question is simple, do you want to stay in Europe? 0:18:13.720 --> 0:18:15.680 What do you want to get out? And for many 0:18:15.720 --> 0:18:18.480 people the answer to that is actually more complicated. I'd 0:18:18.520 --> 0:18:20.640 like to leave these aspects of it and I don't 0:18:20.680 --> 0:18:23.000 want to leave those aspects of it or um. And 0:18:23.040 --> 0:18:25.800 so for many people it was the answer was much 0:18:25.880 --> 0:18:29.119 more nuanced than just saying out or in um. And 0:18:29.160 --> 0:18:32.399 so that's the problem always with our referendum um the 0:18:32.440 --> 0:18:35.359 fact that we now know that there's a real likelihood, 0:18:35.440 --> 0:18:39.080 a real possibility that there was interference, and that Cambridge 0:18:39.080 --> 0:18:42.199 Analytica that possibly the Russian Russian money, that there was 0:18:42.240 --> 0:18:46.120 interference in different ways in the outcomes and the ways 0:18:46.160 --> 0:18:49.600 in which people were influenced to making that decision. I'm 0:18:49.600 --> 0:18:51.199 not sure that if you said to many of the 0:18:51.240 --> 0:18:53.760 people now, would you have changed your vote, that they 0:18:53.760 --> 0:18:55.800 would say that they would have done. The people like 0:18:55.880 --> 0:18:59.119 to imagine that they made it on their own beliefs 0:18:59.160 --> 0:19:01.679 and they were not deeply influenced by the opinions of 0:19:01.720 --> 0:19:04.840 others or the ways in which they were receiving information. 0:19:05.320 --> 0:19:07.640 So I don't know whether that would make the difference. 0:19:07.640 --> 0:19:10.639 But what people are realizing is that economically it's not 0:19:10.680 --> 0:19:12.200 going to be it's not going to be the day 0:19:12.240 --> 0:19:15.679 in the country that they were given to understand the story, 0:19:15.720 --> 0:19:18.040 the lie in fact, and it was a lie was 0:19:18.080 --> 0:19:21.359 told where where buses traveled through our cities with the 0:19:21.440 --> 0:19:25.439 message on the side saying in every week, fifty million 0:19:25.480 --> 0:19:28.040 pounds more will be spent on the national health service 0:19:28.400 --> 0:19:31.000 if we're out of Europe, because instead of paying money 0:19:31.000 --> 0:19:34.439 into the contributory schemes of Europe. We will have this 0:19:34.520 --> 0:19:37.760 money available to spend on the national health service. In fact, 0:19:37.800 --> 0:19:39.960 when it was hammered down, it wasn't true that that 0:19:40.160 --> 0:19:42.600 that piece of information was a completely phony and if 0:19:42.600 --> 0:19:45.959 we're talking about fake news, where that was seriously fake news. 0:19:45.960 --> 0:19:49.320 So and people are realizing that the economic story is 0:19:49.359 --> 0:19:51.320 not going to be so good. And already people are 0:19:51.359 --> 0:19:53.680 feeling the pinch. They're feeling that the pound in their 0:19:53.680 --> 0:19:56.439 pocket is not worth as much. There's been a devaluation. 0:19:56.800 --> 0:19:59.359 There's a sense in which they're they're realizing that food 0:19:59.440 --> 0:20:02.440 is going to become much more expensive. Um. There's also 0:20:02.600 --> 0:20:05.560 there's a worry that a certainly food coming from Europe 0:20:05.840 --> 0:20:08.679 because of we won't have the benefits of the of 0:20:08.760 --> 0:20:11.359 the Single market or of the Customs Union where we 0:20:11.400 --> 0:20:14.800 don't pay customs duties. There's also the an issue I 0:20:14.840 --> 0:20:16.720 have to see it about the United States is that 0:20:16.760 --> 0:20:18.720 we had imagined that there would be great deals to 0:20:18.760 --> 0:20:21.000 be done with the United States for us alone, because 0:20:21.040 --> 0:20:23.320 we are special, we have a special relationship with you guys, 0:20:23.359 --> 0:20:26.280 you're our cousins and so and people are now suddenly 0:20:26.280 --> 0:20:29.160 getting a bit worried because they're hearing your president talking 0:20:29.200 --> 0:20:32.520 about in much more protectionist terms and about the possibility 0:20:32.520 --> 0:20:35.600 of tarrifsms on. So they're much more worried about what 0:20:35.680 --> 0:20:37.760 will that look like and will we get the deals 0:20:37.800 --> 0:20:40.800 with you or China or India that we imagined, and 0:20:40.800 --> 0:20:43.240 will they follow fast on our leaving Europe or will 0:20:43.240 --> 0:20:44.560 it take a hell of a long time before it 0:20:44.600 --> 0:20:49.720 happens with Within Parliament, when you have private conversations with, say, 0:20:49.840 --> 0:20:52.480 Brexit hardliners, do you get the sense that any of 0:20:52.480 --> 0:20:55.440 them are softening their position at all? Not at all. 0:20:55.600 --> 0:20:58.560 The hardliners are not shifting one jot, but a lot 0:20:58.600 --> 0:21:02.000 of the people that the room mainers are very on 0:21:02.080 --> 0:21:06.080 the Conservative ventures. The remainders have the problem that they 0:21:06.119 --> 0:21:08.720 there's a loyalty they feel settling in the House of Lords. 0:21:08.800 --> 0:21:10.840 Many of the people who were appointed huge numbers are 0:21:10.880 --> 0:21:14.400 appointed by David Cameron, many of them remainers like David 0:21:14.440 --> 0:21:17.560 Cameron himself. UM, But they do feel a loyalty to 0:21:17.680 --> 0:21:20.639 party and I think that the it would only be 0:21:20.760 --> 0:21:23.480 if they really feel that the deal, the ultimate deal 0:21:23.600 --> 0:21:27.240 is is catastrophic UM, that they will they will vote 0:21:27.280 --> 0:21:29.639 against because there will be a debate in Parliament in 0:21:29.720 --> 0:21:33.359 October when the crunge comes, and then there's the issue 0:21:33.400 --> 0:21:36.080 of Labor and what will Labor's position be, which has 0:21:36.119 --> 0:21:39.760 also been constructive. Ambiguity was how it was being described, 0:21:40.600 --> 0:21:42.320 you know, saying that they're not happy with the way 0:21:42.320 --> 0:21:44.600 that the negotiations are going, that they would want to 0:21:44.640 --> 0:21:47.600 have much greater and closer connection to Europe in the 0:21:47.800 --> 0:21:50.560 in the you know, as we go forward. Um but 0:21:50.560 --> 0:21:53.560 but Corbin has been very clear in saying that he's 0:21:53.600 --> 0:21:55.879 not in favor of staying in the Single Market. So 0:21:56.400 --> 0:21:59.000 may and of course that the vast majority of politicians 0:21:59.040 --> 0:22:02.119 in Labor do to stay. So it's all rather macy 0:22:02.160 --> 0:22:05.200 at the moment. So where we're going, I still don't know. 0:22:05.400 --> 0:22:07.399 All right, Well, we look to you to help us 0:22:07.480 --> 0:22:11.000 understand what's come back and give you the inside skinny. 0:22:11.280 --> 0:22:14.160 We appreciate it and we look forward to it. Baroness 0:22:14.480 --> 0:22:18.520 Helena Kennedy, Labor Party member of the House of Lords, 0:22:18.520 --> 0:22:20.840 are joining us here in our eleven three oh studios. 0:22:21.119 --> 0:22:23.439 You're listening to Bloomberg Markets. I'm pim Fox my co 0:22:23.560 --> 0:22:30.800 host Lisa abram Witz. This is Bloomberg. In other news, 0:22:30.880 --> 0:22:35.240 Astronomers using the Hubble space telescope found the farthest star 0:22:35.480 --> 0:22:39.560 ever observed, a bright dot nine billion light years away. 0:22:39.600 --> 0:22:41.199 I can't wait to go home and talk about this 0:22:41.240 --> 0:22:59.280 with Anyone who owns a home in Manhattan should be 0:22:59.560 --> 0:23:03.960 watching this figure. The number of sales plunged the most 0:23:04.200 --> 0:23:07.880 since the recession. What does this mean for the road forward? 0:23:07.920 --> 0:23:11.040 Joining us now? Jonathan Miller, President and chief executive officer 0:23:11.160 --> 0:23:15.200 of Miller Samuel in New York. Jonathan explained, how concern 0:23:15.200 --> 0:23:18.560 should people be about this? Well, I think it's less 0:23:18.600 --> 0:23:21.480 about concern and more just about awareness. The reason why 0:23:21.520 --> 0:23:26.920 we saw the sales volume drop, there's really twofold one 0:23:27.119 --> 0:23:31.680 is we've seen a real drop in UM the closings 0:23:31.720 --> 0:23:35.440 of what I call legacy contracts UH New Development. That's 0:23:35.560 --> 0:23:39.720 all those super luxury buildings that contracts are signed several 0:23:39.880 --> 0:23:43.399 years ago that UH had could close until the buildings 0:23:43.400 --> 0:23:47.280