WEBVTT - Ex-FEMA Head Says Trump's Done Everything Right on Harvey So Far

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<v Speaker 1>Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with

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<v Speaker 1>David Gura. Daily we bring you insight from the best

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<v Speaker 1>of economics, finance, investment, and international relations. Find Bloomberg Surveillance

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<v Speaker 1>on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course,

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<v Speaker 1>on the Bloomberg. David Gurra in New York, Francy Lapwa

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<v Speaker 1>in London. The President saying he's going to travel to

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<v Speaker 1>Texas tomorrow to inspect what's continue to happen there, the

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<v Speaker 1>storm continuing to range over Houston many parts of the

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<v Speaker 1>state of Texas. He's gonna head to St. Louis a

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<v Speaker 1>little later this week as well to talk about taxi form.

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<v Speaker 1>A lot of politics and policy to talk about with

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<v Speaker 1>the conversation. Mark Walker who joins us here in a

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<v Speaker 1>Bloomberg eleven three studios in New York. He's a Republican

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<v Speaker 1>who represents the sixth district in North Carolina. He's the

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<v Speaker 1>head of the Republican Study Committee as well. Let's start

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<v Speaker 1>with with the budget, with all the obligations to Congress

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<v Speaker 1>faces when they get back here in September. I have

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<v Speaker 1>to pass a funding bill, have to do something with

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<v Speaker 1>with the death ceiling. Who are you listening to? Who

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<v Speaker 1>should we be listening to in leadership for guidance on

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<v Speaker 1>what's going to happen and when? Well, I believe, first

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<v Speaker 1>of all, I want to commend Chairwoman Dyeing Black and

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<v Speaker 1>her work on the Budget Committee. Uh, it's rare. I

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<v Speaker 1>believe that you have to go back ten years where

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<v Speaker 1>you had a unanimous Republican support on a budget and

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<v Speaker 1>there members across the board, including Freedom Caucus members in there.

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<v Speaker 1>So I know she worked weekends, stayed on the phone,

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<v Speaker 1>But to pass that out of Budget Committee, I believe

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<v Speaker 1>deserves a very quick vote and we're certainly encouraging leadership

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<v Speaker 1>to get it to the House floor. One of the

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<v Speaker 1>things that we feel very impressed about it is over

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<v Speaker 1>the next ten years, it does take an honest look

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<v Speaker 1>and reform close to two hundred billion dollars of some

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<v Speaker 1>specifically some of the Medicaid. Uh. We we've seen the

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<v Speaker 1>current healthcare budget. As we move forward, as another forty

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<v Speaker 1>million Americans to the Medicaid roles over that ten years,

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<v Speaker 1>it's certainly something that we can't afford. And and I

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<v Speaker 1>will tell you as a former pastor, I don't believe

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<v Speaker 1>it we're doing a service to people by continuing to

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<v Speaker 1>create a spirit of enablement as opposed to maybe an

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<v Speaker 1>incentive to be able to continue to pull yourselves different

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<v Speaker 1>levels out of out of poverty. So when it comes

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<v Speaker 1>to who we're listening to, we're listening to cheerwoman Black,

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<v Speaker 1>but we're also listening to the leadership as well. Do

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<v Speaker 1>people talk about regular order on Capitol Hill anymore? Have

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<v Speaker 1>we gotten used to this process of continuing resolution after

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<v Speaker 1>continuing resolutions? UH? Short term funding bill after short term

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<v Speaker 1>funding bill? And and do you think we're gonna get

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<v Speaker 1>back to a point where we see a regularity of

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<v Speaker 1>the budget process in Washington again? Well, being there in

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<v Speaker 1>my second term, there's a legend that a regular order

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<v Speaker 1>once existed. Yet, but we're I don't I don't know

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<v Speaker 1>how much of it. We We talked a lot about it,

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<v Speaker 1>but it's probably more rhetoric than anything else. And there

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<v Speaker 1>is some guys that are the purest traditionists. As far

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<v Speaker 1>as trying to get back to it, I believe there's

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<v Speaker 1>good measure and good reasoning why we should be focusing

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<v Speaker 1>on it. However, we live in such interesting days back

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<v Speaker 1>and forth with administration different caucuses. Uh, different leadership that

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<v Speaker 1>that's up even since I've been there. So it's all

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<v Speaker 1>over the map right now. On the issue of tax reform,

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<v Speaker 1>We've gotten a piece of paper from the White House.

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<v Speaker 1>A few months later, we got two pieces of paper

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<v Speaker 1>from the White House. We know that the border just

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<v Speaker 1>a tax is no longer on the table. What's your

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<v Speaker 1>sense of the timetable here for for tax reform? And

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<v Speaker 1>is it a belief of yours that we need to

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<v Speaker 1>get tax reforms? It's deficit neutral if I can get

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<v Speaker 1>away from my talking points, I believe there is legitimate,

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<v Speaker 1>legitimate hope that this is something we can get across

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<v Speaker 1>the board. Uh. We use the word hopeful and optimistic

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<v Speaker 1>and all the different things that we talked about. But

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<v Speaker 1>from what I'm seeing in the work with Kevin Brady

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<v Speaker 1>and ways and means um he and Speaker run obviously,

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<v Speaker 1>as you just mentioned, we're very keen and very hopeful

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<v Speaker 1>that they can get this thing through with a Board

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<v Speaker 1>of Adjustment to tax because of what it would do

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<v Speaker 1>to the growth immediately. Uh, that is something that we're

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<v Speaker 1>going to have to look as for as how we

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<v Speaker 1>do find that money somewhere else. But as far as

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<v Speaker 1>when it comes to legitimate tax reform the first time

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<v Speaker 1>in thirty woidant years, I believe there's some sign off

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<v Speaker 1>on from the White House, both with a Senate and

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<v Speaker 1>with a House. So that is something that we can

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<v Speaker 1>never get to on the same page with health care.

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<v Speaker 1>Every time this piece moved a little bit, then it

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<v Speaker 1>then it calls the equal and opposite reaction somewhere else.

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<v Speaker 1>But I believe when it comes to tax reform, without

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<v Speaker 1>putting a hard timeline, I would be very surprised if

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<v Speaker 1>we didn't have this pass before Thanksgiving. UM Congressman, what

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<v Speaker 1>does it mean being a Republican a two thousand and seventeen?

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<v Speaker 1>Is it more frustrating now than it was a year ago?

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<v Speaker 1>I believe it is. I'm one that's relatively new to

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<v Speaker 1>the political scene, and I was a pastor for nearly

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<v Speaker 1>eighteen years and work in business and finance right out

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<v Speaker 1>of school for about five or six years. But in

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<v Speaker 1>the two and a half years three years that I've

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<v Speaker 1>been here in in the political scene, uh, my job

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<v Speaker 1>is still continue to put a lot of attention, a

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<v Speaker 1>lot of energy into relationships. I'm very proud that I

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<v Speaker 1>represent UM all of our communities, I represent the largest

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<v Speaker 1>historical black college and university and in all of the

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<v Speaker 1>country in my district, and making sure that Republicans are

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<v Speaker 1>still talking about things that are important to us long

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<v Speaker 1>term when it comes to fiscal but also understand there's

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<v Speaker 1>there's a heart component of this. Uh. As far as

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<v Speaker 1>how we message, I've learned that Republicans are pretty notorious.

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<v Speaker 1>They have a good objective long term, I believe, but

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<v Speaker 1>sometimes fumble in and trying to express why that's important

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<v Speaker 1>to all of our communities and not just to select few.

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<v Speaker 1>How's our president doing? How's your president doing? President Trump? UM?

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<v Speaker 1>I believe that overall I would give marks UM that

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<v Speaker 1>are positive because of how much that we've been able

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<v Speaker 1>to get done in the regulatory component, obviously had it

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<v Speaker 1>has impacted the markets. Uh. Now that we were nine

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<v Speaker 1>months almost into this at ten if you want to

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<v Speaker 1>count since the inauguration, but moving into month and or

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<v Speaker 1>nine since um since January. Uh, there are things I

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<v Speaker 1>feel like that continue to be improved. I remember speaking

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<v Speaker 1>to him not too long ago and and and him remarking, hey, listen,

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<v Speaker 1>I'm still I'm still learning this. Uh. You know, I

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<v Speaker 1>thought I was not one that had a huge pedigree

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<v Speaker 1>of two and a half years. This is something that's

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<v Speaker 1>certainly he has, uh, certainly more room to grow, more

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<v Speaker 1>room to learn. UM, and I understand from a leadership component,

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<v Speaker 1>when you been someone that really hasn't been accountable to

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<v Speaker 1>anyone else is specifically in your line, there's there was

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<v Speaker 1>no board. He answered to uh in learning now that

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<v Speaker 1>there are three equal branches and trying to find the

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<v Speaker 1>balance and all that, as well as trying to motivate

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<v Speaker 1>people to pursue or to to complete what he feels

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<v Speaker 1>like is an agenda that American people elected him to accomplish.

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<v Speaker 1>All of that has been kind of a working order.

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<v Speaker 1>Have we arrived We have not. But if you look

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<v Speaker 1>at people like Taylorson and Madis and Gorst's there are

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<v Speaker 1>some winds here that I believe we can celebrate Gods

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<v Speaker 1>but thank you so much of the time, and they

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<v Speaker 1>appreciate that. Joining us here on Blombergradi and Blomberg Television

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<v Speaker 1>as well as Corns and Mark Walker, who represents the

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<v Speaker 1>sixth district in North Carolina, the chair of the Republican

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<v Speaker 1>Study Committee here on Bloomberg Surveillance on Bloombergradio, David Garray

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<v Speaker 1>in New York. Francy and Lapwa in London. This is

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<v Speaker 1>Bloomberg Warn. David Gray in New York, Francy Lackwoy in London.

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<v Speaker 1>Tom Keene is offten. This is Bloomberg Surveillance on Bloomberg Radio.

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<v Speaker 1>We continue, of course, to monitor the storm bearing down

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<v Speaker 1>on Texas, on Houston in particular. That's Tropical Storm Harvey,

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<v Speaker 1>downgraded from hurricane status. He's still pouring a ton of

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<v Speaker 1>rain on that city. Flooding a huge issue there, and

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<v Speaker 1>we'll have updates on the situation there throughout the morning.

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<v Speaker 1>Looking at today's agenda, the President schedule to deliver a

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<v Speaker 1>joint press conference with the President of Finland a little

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<v Speaker 1>bit later today, that's at four twenty. Wall Street Time

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<v Speaker 1>will have coverage of that for you here right here

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<v Speaker 1>on Bloomberg Radio. Well, there's a lot of news on

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<v Speaker 1>Friday afternoon, of course, as the hurricane approached the Gulf coast.

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<v Speaker 1>Also the President electing to part in the former sheriff

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<v Speaker 1>of Maricopa County in Arizona, controversial Sheriff Joe R. Peo,

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<v Speaker 1>and the President wrote in a statement on the heels

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<v Speaker 1>of that decision, he's now Joe or Peo now eighty

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<v Speaker 1>five years old and after more than fifty years of

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<v Speaker 1>admirable service to our nation, he is a worthy candidate

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<v Speaker 1>for a presidential parton. Somebody who thinks differently about this

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<v Speaker 1>is no filment. He's a professor of law at Harvard

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<v Speaker 1>Law School, a columnist for Bloomberg View as well. He's

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<v Speaker 1>written about this. He wrote about this in advance of

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<v Speaker 1>that and saying if the president were to do that,

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<v Speaker 1>it could be an impeachable offense. In his words, no

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<v Speaker 1>Felton joins us now on our phone lines, Noah Joe

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<v Speaker 1>Pio convicted of contempt of court by Judge Susan Bolton, explain,

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<v Speaker 1>you know what what what he's being pardoned from. I

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<v Speaker 1>think that's key here, It is absolutely key. The background

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<v Speaker 1>here is that UM a group of citizens sued our

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<v Speaker 1>Pio and the Maricopa County Sheriff's office for unconstitutionally detaining

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<v Speaker 1>I think people mostly Latinos, on suspicion that they were

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<v Speaker 1>undocumented and then holding them indefinitely in prison. And a

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<v Speaker 1>court held that was unconstitutional, that it violated the basic

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<v Speaker 1>rights of the people who were being detained, and the

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<v Speaker 1>court ordered our Pio and the office to stop doing it.

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<v Speaker 1>Our pile refused to stop doing it, and he told

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<v Speaker 1>his staff, We're going to keep on doing exactly what

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<v Speaker 1>we've been doing. First he was held in civil contempt

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<v Speaker 1>and then the Justice Department prosecuted him for criminal contempt um,

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<v Speaker 1>which is pretty unusual, and he was found guilty and

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<v Speaker 1>sentenced to a fairly symbolic sentence of about six months.

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<v Speaker 1>You write about the effect that this could have, this

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<v Speaker 1>pardon could have on the integrity of the legal system.

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<v Speaker 1>Just explain what you mean by that. The President, by

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<v Speaker 1>doing this calls into questions sort of the strictures of

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<v Speaker 1>our legal system in this country and your estimation. Yeah, well,

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<v Speaker 1>here's the thing. It's pretty rare for a sworn law

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<v Speaker 1>enforcement official to be ordered by a court to do

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<v Speaker 1>something and to flat out say no, I'm not going

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<v Speaker 1>to do it. It's even more rare when the thing

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<v Speaker 1>that the law enforcement official has done is to break

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<v Speaker 1>the constitution. And it's even rare for the person than

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<v Speaker 1>to be convicted by the courts, specifically at defying a

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<v Speaker 1>court order. When the President pardoned someone under these conditions,

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<v Speaker 1>what he's basically communicating is that it was fine for

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<v Speaker 1>law enforcements to ignore what the courts told him to do,

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<v Speaker 1>and that it was fine for him to violate the

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<v Speaker 1>Constitution itself. So that's a basic challenge to the rule

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<v Speaker 1>of law. It's saying that a law enforceani can ignore

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<v Speaker 1>the law, ignore the power of the courts to say

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<v Speaker 1>what the law is, and do whatever he wants, including

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<v Speaker 1>violence the constitutional rights of ordinary people. And that's pretty stunning. Frankly,

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<v Speaker 1>It's pretty different in a situation where someone is pardoned

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<v Speaker 1>for committing a crime, because in this instance, the problem

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<v Speaker 1>is not so much that what our pio did is

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<v Speaker 1>against the laws, that it was in direct violation of

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<v Speaker 1>what a judge told him the constitution required. But no,

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<v Speaker 1>he suggests this is an impeachable offense. But then I thought,

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<v Speaker 1>the president pardon who he wanted. Great question. The bottom

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<v Speaker 1>line is this. It's true that the presidents can pardon

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<v Speaker 1>whomever he chooses to parting, probably himself excluded in the

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<v Speaker 1>sense that once the pardon is issued, our Pio can't

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<v Speaker 1>go to jail. I mean the pardon worked in that sense.

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<v Speaker 1>It doesn't mean that the president is free of any

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<v Speaker 1>sanction for what he's done. If the president abuses his

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<v Speaker 1>power by partnering people, let's say, who were close to him,

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<v Speaker 1>or to serve his own interests, or in this instance,

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<v Speaker 1>to basically fundamentally contravene the idea the constitution binds law

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<v Speaker 1>enforcement officials. The thing that we can do about that

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<v Speaker 1>is to invoke the impeachment power. And it's not just

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<v Speaker 1>me who's saying that. Uh. In When they were ratifying

0:11:22.160 --> 0:11:25.480
<v Speaker 1>the Constitution of the United States at the Virginia Ratifying Convention,

0:11:25.559 --> 0:11:28.160
<v Speaker 1>James Madison, who was the lead draft into the Constitution,

0:11:28.640 --> 0:11:31.440
<v Speaker 1>he was asked specifically about the part in power. The

0:11:31.480 --> 0:11:33.160
<v Speaker 1>people were saying, well, we shouldn't have a part in

0:11:33.200 --> 0:11:35.400
<v Speaker 1>power in the constitution. Is a bad idea. What if

0:11:35.440 --> 0:11:38.839
<v Speaker 1>the president abuses the part in power? Madison said, essentially, well,

0:11:39.000 --> 0:11:41.240
<v Speaker 1>the president uses the part in power, you can impeach him.

0:11:41.240 --> 0:11:43.520
<v Speaker 1>That's the power you have available to you. So the

0:11:43.600 --> 0:11:46.000
<v Speaker 1>idea here is that the part in power, it's not

0:11:46.240 --> 0:11:48.000
<v Speaker 1>it's absolute in the sense the president can do it

0:11:48.040 --> 0:11:50.920
<v Speaker 1>if he wants to, but it's not outside the bounds

0:11:51.040 --> 0:11:54.880
<v Speaker 1>of sanction. And the sanction that's available is impeachment. Right,

0:11:54.920 --> 0:11:56.400
<v Speaker 1>you have to refresh my memory because it's been a

0:11:56.440 --> 0:11:58.720
<v Speaker 1>couple of years that I haven't done constitution a law.

0:11:58.800 --> 0:12:00.839
<v Speaker 1>This is not the abuse of power our article, right,

0:12:00.840 --> 0:12:04.680
<v Speaker 1>this is you're talking about something else. No, Well, in

0:12:04.720 --> 0:12:08.040
<v Speaker 1>the constitution um, a president can be impeached for what

0:12:08.080 --> 0:12:12.480
<v Speaker 1>are called high crimes and misdemeanors. But I tradition, this

0:12:12.520 --> 0:12:15.000
<v Speaker 1>was very clear of the founders. High crimes and misdemeanors

0:12:15.000 --> 0:12:17.559
<v Speaker 1>does not mean breaking a statute, doesn't mean breaking a

0:12:17.640 --> 0:12:20.559
<v Speaker 1>law only it would include that, But it also means

0:12:20.600 --> 0:12:26.000
<v Speaker 1>any abuse of the presidential power, and that is part

0:12:26.000 --> 0:12:28.240
<v Speaker 1>of the impeachment structure. And it's been the case when

0:12:28.360 --> 0:12:31.920
<v Speaker 1>previous presidents have been impeached that Congress has not restricted

0:12:31.920 --> 0:12:35.360
<v Speaker 1>itself to presidential violation of a written statute. They've also

0:12:35.400 --> 0:12:37.880
<v Speaker 1>gone after the president for what they considered abuses of power.

0:12:38.160 --> 0:12:40.240
<v Speaker 1>So abuse of power is a sort of general catch

0:12:40.280 --> 0:12:42.760
<v Speaker 1>all phrase that I'm using to capture the idea of

0:12:42.840 --> 0:12:46.000
<v Speaker 1>high crimes and misdemeanors, and that would cover impeachment. There's

0:12:46.000 --> 0:12:47.640
<v Speaker 1>plenty of things the president can do that would deserve

0:12:47.679 --> 0:12:51.120
<v Speaker 1>impeachment that don't violate a specific law that's on the books,

0:12:51.120 --> 0:12:54.040
<v Speaker 1>but that obviously subvert the structure of the Constitution and

0:12:54.120 --> 0:12:56.560
<v Speaker 1>subvert the rule of law, no fel What does this,

0:12:56.559 --> 0:12:59.320
<v Speaker 1>this story, this case tell us about the relationship between

0:12:59.360 --> 0:13:01.480
<v Speaker 1>the federal government in the States government. Just reading between

0:13:01.480 --> 0:13:03.360
<v Speaker 1>the lines here and the statement from the White House,

0:13:03.360 --> 0:13:06.640
<v Speaker 1>and from what I've read of the former sheriff, it

0:13:06.679 --> 0:13:08.640
<v Speaker 1>seems like there are a lot of people who think

0:13:08.640 --> 0:13:12.000
<v Speaker 1>that he was simply taking a taking the rule of

0:13:12.080 --> 0:13:14.319
<v Speaker 1>law into his own hand. Rightfully, that the federal government

0:13:14.360 --> 0:13:15.760
<v Speaker 1>wasn't doing what it needed to do when it comes

0:13:15.760 --> 0:13:18.800
<v Speaker 1>to protecting the federal the border with Mexico. He was

0:13:18.880 --> 0:13:21.040
<v Speaker 1>doing that. But what does this say about the state

0:13:21.080 --> 0:13:25.400
<v Speaker 1>of that relationship between states and the US federal government. Well,

0:13:25.400 --> 0:13:29.560
<v Speaker 1>it's pretty badly afraid. Um. In this instance, a state

0:13:29.720 --> 0:13:33.600
<v Speaker 1>of elected official was violating the Constitution. Now, he may

0:13:33.640 --> 0:13:36.560
<v Speaker 1>have been doing it because he thought that the federal

0:13:36.559 --> 0:13:39.440
<v Speaker 1>government needed to do more, but that the federal court

0:13:39.880 --> 0:13:42.840
<v Speaker 1>which convicted him and which ordered him not to do

0:13:42.880 --> 0:13:46.000
<v Speaker 1>what he was doing, believe that he had overstepped his bound.

0:13:46.360 --> 0:13:48.720
<v Speaker 1>If he was just enforcing federal law, he would not

0:13:48.840 --> 0:13:51.160
<v Speaker 1>have been convicted. Our pile would not have been convicted

0:13:51.160 --> 0:13:53.760
<v Speaker 1>of contempt of court. This is not about him acting

0:13:53.760 --> 0:13:56.199
<v Speaker 1>in a way that the federal court didn't want to

0:13:56.200 --> 0:13:58.400
<v Speaker 1>state official that this was about our pio acting in

0:13:58.400 --> 0:14:02.200
<v Speaker 1>a way that no official connect under the constitution. Um.

0:14:02.200 --> 0:14:05.520
<v Speaker 1>It's also true that in principle our Pio could still

0:14:05.600 --> 0:14:09.960
<v Speaker 1>be charged under state law or convective contempts under state law,

0:14:10.320 --> 0:14:12.400
<v Speaker 1>and if that happens, the President would not actually have

0:14:12.400 --> 0:14:14.280
<v Speaker 1>been able to pardon him at all. So this is

0:14:14.320 --> 0:14:17.360
<v Speaker 1>exact an instance of the president intervening as is his

0:14:17.400 --> 0:14:20.000
<v Speaker 1>power to do over the federal courts. And the federal

0:14:20.040 --> 0:14:22.080
<v Speaker 1>courts we're doing what they're empowered to do by the

0:14:22.120 --> 0:14:26.720
<v Speaker 1>fourteen Amendment of the Constitution, namely, supervised state officials and

0:14:26.760 --> 0:14:30.880
<v Speaker 1>make sure they're not violating the Constitution under color of law,

0:14:30.920 --> 0:14:33.360
<v Speaker 1>which is exactly what our pile was doing. No, fellmen,

0:14:33.440 --> 0:14:36.560
<v Speaker 1>what does this tell you about this president's attitude toward

0:14:36.600 --> 0:14:38.720
<v Speaker 1>presidential pardons. I can look back at all of the

0:14:38.760 --> 0:14:40.960
<v Speaker 1>pardons that President Obama made, a lot of them centered

0:14:40.960 --> 0:14:44.560
<v Speaker 1>on drug cases in particular. Um, there are a lot

0:14:44.600 --> 0:14:47.080
<v Speaker 1>of people here wondering a sort of what lessons we

0:14:47.120 --> 0:14:49.680
<v Speaker 1>can draw from this particular pardon, how it might be

0:14:49.760 --> 0:14:52.080
<v Speaker 1>used to say in the Russian investigation, how the president

0:14:52.160 --> 0:14:54.000
<v Speaker 1>might use his power of pardon, and going forward, what

0:14:54.080 --> 0:14:58.520
<v Speaker 1>lessons can you draw. Well, I'm warious of the interpretation

0:14:58.560 --> 0:15:00.760
<v Speaker 1>that says that this is some sort of a message

0:15:01.480 --> 0:15:05.280
<v Speaker 1>with specifically with respect to the Russian investigation. Um. What

0:15:05.320 --> 0:15:07.680
<v Speaker 1>I think is very clear here is that the president

0:15:07.880 --> 0:15:11.200
<v Speaker 1>ignored the usual process that other presidents have in the

0:15:11.240 --> 0:15:14.000
<v Speaker 1>past gone through before they chose to make a pardon.

0:15:14.480 --> 0:15:17.080
<v Speaker 1>There's a special part in office and the partner of justice.

0:15:17.280 --> 0:15:20.880
<v Speaker 1>It was ignored here. Ordinarily, appeals have to be exhausted.

0:15:21.080 --> 0:15:24.120
<v Speaker 1>That was not the case here. Ordinarily it just goes

0:15:24.160 --> 0:15:28.480
<v Speaker 1>to a complex and complete vetting process before any pardon

0:15:28.680 --> 0:15:31.560
<v Speaker 1>is issued. I'm not saying that every past part in

0:15:31.640 --> 0:15:34.000
<v Speaker 1>is one that I would agree with, but in this instance,

0:15:34.000 --> 0:15:37.600
<v Speaker 1>the president circumvented those usual processutes. It also happened early

0:15:37.640 --> 0:15:39.840
<v Speaker 1>in his term rather than late in his term, a

0:15:39.880 --> 0:15:42.560
<v Speaker 1>way of saying, essentially, I don't care what people think

0:15:42.560 --> 0:15:44.480
<v Speaker 1>about this. I'm going to do it on my own.

0:15:44.520 --> 0:15:47.320
<v Speaker 1>So if nothing else, this communicates the president thinks that

0:15:47.400 --> 0:15:50.480
<v Speaker 1>it's within his authority and that he conclearely get away

0:15:50.480 --> 0:15:54.040
<v Speaker 1>with partnering people whenever he wants, and probably however he

0:15:54.080 --> 0:15:56.840
<v Speaker 1>wants to suggests the willingness to be quick with the

0:15:56.920 --> 0:15:59.960
<v Speaker 1>partning power, but no, so he's advising the president actually

0:16:00.000 --> 0:16:03.160
<v Speaker 1>on all matters of law and constitutional powers. Are they

0:16:03.200 --> 0:16:06.840
<v Speaker 1>ill advising him or is the President just ignoring it? Well,

0:16:06.880 --> 0:16:10.120
<v Speaker 1>in this instance, Um, the usual process that would have

0:16:10.120 --> 0:16:12.680
<v Speaker 1>been created to the Department of Justice through the Partner Office,

0:16:13.040 --> 0:16:15.920
<v Speaker 1>we've been told was not followed at all. So the

0:16:16.000 --> 0:16:18.800
<v Speaker 1>strong suggestion is that the procedures that are ordinarily in

0:16:18.840 --> 0:16:22.280
<v Speaker 1>place to advise the president simply were ignored and we're

0:16:22.280 --> 0:16:25.680
<v Speaker 1>not followed. Often the White House Council's office would also

0:16:25.680 --> 0:16:28.440
<v Speaker 1>be involved in the pardon process, and we haven't been

0:16:28.480 --> 0:16:30.880
<v Speaker 1>told publicly whether in fact the White House Council was

0:16:30.880 --> 0:16:34.800
<v Speaker 1>involved in this process or not. Now again, constitutionally, the

0:16:34.800 --> 0:16:37.000
<v Speaker 1>president doesn't have to listen to anybody. He can pardon

0:16:37.120 --> 0:16:40.440
<v Speaker 1>whomever he chooses to pardon. Um. But those procedures have

0:16:40.480 --> 0:16:43.240
<v Speaker 1>been put in place by previous administrations with the goal

0:16:43.320 --> 0:16:47.000
<v Speaker 1>of rationalizing the process and not making a pardon look

0:16:47.080 --> 0:16:50.040
<v Speaker 1>like it violates the basic principle of legality, which I

0:16:50.080 --> 0:16:52.760
<v Speaker 1>think this pardon does look like. David Guray in New York,

0:16:52.760 --> 0:16:55.240
<v Speaker 1>Francy Laqua in London, Tom Keen is off to damn

0:16:55.320 --> 0:16:58.560
<v Speaker 1>looking at news out of Berkeley, California. Big protests yesterday

0:16:58.640 --> 0:17:01.480
<v Speaker 1>there in Martin Luther King Jr. Civic Center Park, a

0:17:01.520 --> 0:17:06.600
<v Speaker 1>big confrontation between antifa and anti fascist anarchist protesters and

0:17:06.840 --> 0:17:08.840
<v Speaker 1>others who were gathered there. Around two thousand people were

0:17:08.880 --> 0:17:11.320
<v Speaker 1>gathered in that park yesterday, and I just wanted to

0:17:11.520 --> 0:17:13.399
<v Speaker 1>bring in our our guests. No Felton, who's a law

0:17:13.440 --> 0:17:16.000
<v Speaker 1>professor at Harvard Law, of course, columns from Bloomberview to

0:17:16.000 --> 0:17:17.960
<v Speaker 1>talk a bit about a free speech and light of

0:17:17.960 --> 0:17:19.520
<v Speaker 1>the protests that we've seen here, in light of the

0:17:19.760 --> 0:17:21.680
<v Speaker 1>protests from both sides that we've seen here over these

0:17:21.720 --> 0:17:25.280
<v Speaker 1>last few weeks, of course, most paramount being in Charlessville.

0:17:25.280 --> 0:17:27.240
<v Speaker 1>When you look at history and how we deal with

0:17:27.320 --> 0:17:31.679
<v Speaker 1>free speech, no matter how how violent is what have

0:17:31.720 --> 0:17:35.120
<v Speaker 1>you been thinking about over these last few weeks now, Well,

0:17:35.160 --> 0:17:37.600
<v Speaker 1>I think there's a whole bunch of really fascinating and

0:17:37.600 --> 0:17:40.120
<v Speaker 1>subtle issues. The most important one is that we need

0:17:40.200 --> 0:17:43.280
<v Speaker 1>to keep on distinguishing two different things. We need to

0:17:43.280 --> 0:17:47.520
<v Speaker 1>distinguished peaceful protests, which is protected by the First Amendment

0:17:47.560 --> 0:17:49.880
<v Speaker 1>and should be protected by the First Amendment, no matter

0:17:49.920 --> 0:17:55.280
<v Speaker 1>how vile the content is, from violent incitement, which is

0:17:55.280 --> 0:17:58.240
<v Speaker 1>when you take an action that you know is likely

0:17:58.320 --> 0:18:02.640
<v Speaker 1>to cause an imminence incitement to violence, and is actually

0:18:02.720 --> 0:18:04.320
<v Speaker 1>causing that, not just that you know it's going to

0:18:04.400 --> 0:18:06.080
<v Speaker 1>cause that, but it isn't that going to cause that.

0:18:06.760 --> 0:18:09.679
<v Speaker 1>The police have every right to prevent the ladder from happening.

0:18:09.760 --> 0:18:11.920
<v Speaker 1>So if there are a group that are confronting each other,

0:18:12.160 --> 0:18:14.639
<v Speaker 1>and there are people trying to provoke violence, then the

0:18:14.680 --> 0:18:17.880
<v Speaker 1>police are wholly within their rights, and indeed, I would

0:18:17.880 --> 0:18:21.640
<v Speaker 1>say their responsibilities to stand in between and to separate

0:18:21.680 --> 0:18:23.840
<v Speaker 1>people and to make sure that violence doesn't break out.

0:18:24.359 --> 0:18:26.159
<v Speaker 1>We don't really think about it this way, but without

0:18:26.200 --> 0:18:30.040
<v Speaker 1>the police protecting us against the violence, the free speech

0:18:30.119 --> 0:18:33.159
<v Speaker 1>right that we have becomes pretty empty. And so we

0:18:33.200 --> 0:18:35.439
<v Speaker 1>actually need both components. We need the order on the

0:18:35.480 --> 0:18:38.200
<v Speaker 1>streets in ordering sure that our free speech rights are protected.

0:18:38.560 --> 0:18:40.479
<v Speaker 1>It strikes strikes me as we talk about this, as

0:18:40.520 --> 0:18:43.239
<v Speaker 1>we talk about the Ropio case as well, the the

0:18:43.280 --> 0:18:44.640
<v Speaker 1>a c l U is at the center of both

0:18:44.680 --> 0:18:46.480
<v Speaker 1>of these these stories. Of course, the a c l

0:18:46.520 --> 0:18:49.119
<v Speaker 1>U has said it's now going to represent hate groups

0:18:49.160 --> 0:18:51.920
<v Speaker 1>that march with with firearms. What do you make of

0:18:52.080 --> 0:18:54.240
<v Speaker 1>that decision? There? Obviously, the a c l U has

0:18:54.280 --> 0:18:56.440
<v Speaker 1>taken heat, as it often does from both sides here

0:18:56.480 --> 0:18:59.800
<v Speaker 1>for for a decision like that one, Yeah, I mean,

0:18:59.800 --> 0:19:02.560
<v Speaker 1>I think the needs to and I think it's trying,

0:19:03.440 --> 0:19:05.480
<v Speaker 1>for better or worse, to carve out a space that

0:19:05.600 --> 0:19:09.440
<v Speaker 1>protects peaceful speech. But that doesn't open the door to

0:19:10.520 --> 0:19:15.200
<v Speaker 1>armed groups marching in what looks like ordinary military formation,

0:19:15.240 --> 0:19:19.919
<v Speaker 1>because when that happens, those people aren't really potentially dominating

0:19:19.960 --> 0:19:24.720
<v Speaker 1>the streets, potentially either provoking violence or intimidating other people.

0:19:24.880 --> 0:19:27.320
<v Speaker 1>And there you have the confluence of two different rights.

0:19:27.400 --> 0:19:30.159
<v Speaker 1>You have a Second Amendment right to bear arms and

0:19:30.280 --> 0:19:33.639
<v Speaker 1>a First Amendment right to speak and to associate. So

0:19:33.840 --> 0:19:35.480
<v Speaker 1>in theurious sounds like what should be fine. If you

0:19:35.520 --> 0:19:38.240
<v Speaker 1>can march peacefully, that's fine. If you can carry weapons peacefully,

0:19:38.280 --> 0:19:40.280
<v Speaker 1>then that should be fine. But if you actually do

0:19:40.400 --> 0:19:43.320
<v Speaker 1>both together, then at some point you cease to be

0:19:44.480 --> 0:19:47.120
<v Speaker 1>a peaceful marcher and you actually become a militia that's

0:19:47.200 --> 0:19:50.120
<v Speaker 1>challenging the authority of the police, and that I think

0:19:50.119 --> 0:19:52.639
<v Speaker 1>the law does not protect. And the was trying to find,

0:19:52.680 --> 0:19:55.520
<v Speaker 1>I think a way to to weigh in there. It's

0:19:55.560 --> 0:19:58.040
<v Speaker 1>hard to the sell you because traditionally their position has

0:19:58.080 --> 0:20:01.560
<v Speaker 1>been absolutists. They have gone the most extreme free speech

0:20:01.680 --> 0:20:05.240
<v Speaker 1>positions possible. You know. You remember they actually supported what

0:20:05.359 --> 0:20:07.920
<v Speaker 1>became the Supreme Courts holding in the Citizens United case,

0:20:08.800 --> 0:20:12.959
<v Speaker 1>which maximize corporate free speech. So traditionally they've been absolutists.

0:20:12.960 --> 0:20:15.360
<v Speaker 1>Here they're pulling back from that a little bit, probably

0:20:15.400 --> 0:20:17.960
<v Speaker 1>in the wake of Charlotteville and other other recent events.

0:20:18.560 --> 0:20:20.920
<v Speaker 1>But don't know what you're arguing is that basically, to

0:20:21.600 --> 0:20:25.639
<v Speaker 1>almost avoid a situation where too many radicals, you know,

0:20:25.720 --> 0:20:29.000
<v Speaker 1>contribute to destabilization, you just need a much bigger so

0:20:29.160 --> 0:20:31.840
<v Speaker 1>you protect free speech, but you have a much bigger

0:20:31.840 --> 0:20:34.879
<v Speaker 1>police force. Is that right, Yeah, you need a bigger

0:20:34.880 --> 0:20:38.040
<v Speaker 1>police force. Sometimes you need to assign different groups different

0:20:38.040 --> 0:20:40.800
<v Speaker 1>locations to march. In theory, it's great to be able

0:20:40.840 --> 0:20:42.600
<v Speaker 1>to say, well, we can march wherever we want. But

0:20:42.640 --> 0:20:44.720
<v Speaker 1>if you have a large group of anti fascist protesters

0:20:44.720 --> 0:20:46.840
<v Speaker 1>in a large group of you know, not your white

0:20:46.840 --> 0:20:50.680
<v Speaker 1>supremacist protesters, it's constitutionally perrinsipal to the police to say

0:20:50.760 --> 0:20:52.720
<v Speaker 1>you're not marching right in front of each other. You

0:20:52.760 --> 0:20:55.080
<v Speaker 1>have to be separated by you know, thus in such

0:20:55.119 --> 0:20:56.879
<v Speaker 1>a distance, and we're gonna put this group of you here.

0:20:56.920 --> 0:20:58.639
<v Speaker 1>We're gonna put the scoop of you there. And of

0:20:58.640 --> 0:21:01.719
<v Speaker 1>course it's always controversial, and the police do that much

0:21:01.760 --> 0:21:03.960
<v Speaker 1>in the way. It was controversial when the police isolated

0:21:03.960 --> 0:21:07.800
<v Speaker 1>protesters at the Democratic and Republican national conventions in recent years,

0:21:07.840 --> 0:21:10.679
<v Speaker 1>moving them away from the convention location. But the police

0:21:10.680 --> 0:21:14.080
<v Speaker 1>are justified in specifying time, place, and manner of speech

0:21:14.520 --> 0:21:17.880
<v Speaker 1>when it's necessary for safety and security. So you also

0:21:17.880 --> 0:21:20.320
<v Speaker 1>need to keep people apart from each other. And last,

0:21:20.359 --> 0:21:22.680
<v Speaker 1>but not least, the police have to be very well

0:21:22.720 --> 0:21:26.760
<v Speaker 1>trained so that they know the difference between peaceful speaking

0:21:27.200 --> 0:21:32.040
<v Speaker 1>and potentially violence provocation. You can't just expect police intuitively

0:21:32.119 --> 0:21:33.280
<v Speaker 1>to be able to do that. They need to be

0:21:33.359 --> 0:21:35.560
<v Speaker 1>trained in order to make sure that free speech is

0:21:35.600 --> 0:21:38.920
<v Speaker 1>protected while class the order is preserved. No, always great

0:21:38.920 --> 0:21:40.080
<v Speaker 1>to speak with you, Thank you very much being so

0:21:40.119 --> 0:21:41.760
<v Speaker 1>generous with your time here on this Monday morning. Now

0:21:41.800 --> 0:21:43.560
<v Speaker 1>a film and ne Felix Frankford, the professor of law

0:21:43.600 --> 0:21:46.560
<v Speaker 1>at Harvard Law School, column is for Bloomberg View, writing

0:21:46.600 --> 0:21:50.240
<v Speaker 1>prolifically and importantly for Bloomberg View. Do check out his columns.

0:21:50.240 --> 0:21:52.320
<v Speaker 1>I'll tweet his latest on Joe or Pio. This is

0:21:52.320 --> 0:21:55.119
<v Speaker 1>Bloomberg surveillance on Bloombergradio, David Gura and Francine Lack with

0:21:55.280 --> 0:22:08.200
<v Speaker 1>Tom keene is off today m h now speaking in

0:22:08.240 --> 0:22:11.840
<v Speaker 1>an interview with Bloomberg and Kathyen Hayes and Jackson Hall.

0:22:12.160 --> 0:22:15.720
<v Speaker 1>Governor Krota said the BJS yield curving control program has

0:22:15.720 --> 0:22:18.280
<v Speaker 1>been working quite well. That he was talking about the

0:22:18.280 --> 0:22:21.680
<v Speaker 1>fact that he also needs to have more very accomgnative

0:22:21.680 --> 0:22:25.160
<v Speaker 1>monetary policy. He warned that his inflation target remains distant

0:22:25.359 --> 0:22:28.600
<v Speaker 1>and that the current pace of growth looks unsustainable. Here

0:22:28.680 --> 0:22:34.359
<v Speaker 1>is Governor Kruder. Four percent grows is excellent, but we

0:22:34.400 --> 0:22:38.119
<v Speaker 1>don't think four percent grows can be sustained. Around to

0:22:38.200 --> 0:22:42.040
<v Speaker 1>pocent grows is likely, and that this amount of growth

0:22:42.520 --> 0:22:47.479
<v Speaker 1>infringel rate to gradually crime up towards the two percent.

0:22:48.680 --> 0:22:51.840
<v Speaker 1>That was Governor Kroda speaking to our Kathy Hayes over

0:22:52.000 --> 0:22:55.000
<v Speaker 1>in Jackson Hole, Wyoming. Now, let's bring in Alice Rivlini

0:22:55.119 --> 0:22:58.920
<v Speaker 1>is former FED Vice chair from our DC studios. Mr Ryvelin,

0:22:58.960 --> 0:23:00.720
<v Speaker 1>thank you so much for joy in us today. What

0:23:00.760 --> 0:23:03.240
<v Speaker 1>did you make of Jackson Hole? It was rather uneventful

0:23:03.280 --> 0:23:08.840
<v Speaker 1>compared to previous you know, Jackson Hole, Wyoming forums, and

0:23:08.960 --> 0:23:11.760
<v Speaker 1>yet we learned a little bit more about how they

0:23:11.840 --> 0:23:16.240
<v Speaker 1>see risk, yes, and I thought we learned actually quite

0:23:16.280 --> 0:23:20.879
<v Speaker 1>a lot. I thought that Janet Yellen's speech focused on

0:23:21.040 --> 0:23:25.680
<v Speaker 1>exactly the right topic. She hardly mentioned meant monetary policy

0:23:25.720 --> 0:23:30.840
<v Speaker 1>at all, which I thought was appropriate. She mentioned and

0:23:31.000 --> 0:23:38.400
<v Speaker 1>discussed at considerable length the case for UH continued vigilance

0:23:38.640 --> 0:23:43.280
<v Speaker 1>about instability in the financial markets, and particularly the risks

0:23:43.440 --> 0:23:48.639
<v Speaker 1>of rolling back the Dodd Frank Act, which she quite

0:23:48.680 --> 0:23:54.160
<v Speaker 1>persuasively pointed out has made our financial system a lot

0:23:54.240 --> 0:23:59.320
<v Speaker 1>safer and less subject to the kind of turmoil that

0:23:59.400 --> 0:24:03.359
<v Speaker 1>we are instant two thousand eight, Alice Rivelin, what is

0:24:03.560 --> 0:24:06.280
<v Speaker 1>the one thing that actually Governor Croda has not said?

0:24:06.280 --> 0:24:08.720
<v Speaker 1>I guess yet reading between the lines, he's worried about

0:24:08.720 --> 0:24:12.920
<v Speaker 1>the FED, isn't he? Well, he may be worried about

0:24:13.000 --> 0:24:16.040
<v Speaker 1>the FED, but I think he's more worried about the

0:24:16.119 --> 0:24:22.119
<v Speaker 1>Japanese economy, which is UH persistently deflationary. That's been the

0:24:22.160 --> 0:24:27.800
<v Speaker 1>same story for UH for many, many years, and uh uh,

0:24:28.920 --> 0:24:32.560
<v Speaker 1>I think that has got to be his major concern. Alice,

0:24:32.720 --> 0:24:34.960
<v Speaker 1>great to speak with you here on this this Monday morning.

0:24:35.119 --> 0:24:36.880
<v Speaker 1>I wonder if we could shift our attention to Europe

0:24:36.880 --> 0:24:38.480
<v Speaker 1>a little bit is what we heard from Mario, drawing

0:24:38.480 --> 0:24:41.000
<v Speaker 1>you the president of the ECB. There was some speculation

0:24:41.040 --> 0:24:42.720
<v Speaker 1>that he might try to job own the euro a

0:24:42.720 --> 0:24:45.280
<v Speaker 1>little bit, talk it down. He didn't do that. What

0:24:45.280 --> 0:24:46.760
<v Speaker 1>did you make of what what he had to say

0:24:46.760 --> 0:24:49.080
<v Speaker 1>and what do you make of the situation he faces

0:24:49.400 --> 0:24:52.080
<v Speaker 1>on the European continent right now? Well, he faces a

0:24:52.119 --> 0:24:56.960
<v Speaker 1>more difficult situation, I think than than Janet Yellen does UH,

0:24:57.000 --> 0:25:00.840
<v Speaker 1>in part because he doesn't have a cohesive country. He's

0:25:00.840 --> 0:25:05.160
<v Speaker 1>got a whole group of economies that are UH not

0:25:05.960 --> 0:25:10.040
<v Speaker 1>entirely in sync, and that's always very, very difficult. But

0:25:10.320 --> 0:25:14.080
<v Speaker 1>I thought he, like Yellen, made the right speech for

0:25:14.200 --> 0:25:18.960
<v Speaker 1>Jackson Hall, pointing out that the big threat was not

0:25:19.160 --> 0:25:24.600
<v Speaker 1>from UH inflation, it was from the possibility of trade

0:25:24.600 --> 0:25:33.440
<v Speaker 1>war or deteriorating UH regulatory cooperation among the major countries

0:25:34.400 --> 0:25:36.119
<v Speaker 1>on the issue of of regulation. Will come back and

0:25:36.119 --> 0:25:38.800
<v Speaker 1>talk a little bit more more about this, but just

0:25:38.800 --> 0:25:41.439
<v Speaker 1>summarize stories, if you would, what what Yellen's thinking is

0:25:41.480 --> 0:25:43.800
<v Speaker 1>on on bank regulation at this point. She's making a

0:25:43.800 --> 0:25:46.280
<v Speaker 1>pretty forceful defense for some of the regulations have been implemented.

0:25:46.280 --> 0:25:48.080
<v Speaker 1>But she also spoke of it as sort of a

0:25:48.080 --> 0:25:50.480
<v Speaker 1>plastic thing, right that it's it's it's it's useful to

0:25:50.480 --> 0:25:54.560
<v Speaker 1>reevaluate her to constantly evaluate the efficacy of regulations. Yes,

0:25:54.600 --> 0:25:57.440
<v Speaker 1>and I think she's absolutely right about that. We put

0:25:57.520 --> 0:26:02.720
<v Speaker 1>some much stronger regular sations in place after two thousand

0:26:02.720 --> 0:26:06.560
<v Speaker 1>and eight. Uh, but uh, and they seem to be working,

0:26:06.640 --> 0:26:10.960
<v Speaker 1>but we haven't tested them yet. And uh. What she

0:26:11.160 --> 0:26:15.840
<v Speaker 1>was warning against was wholesale rolling back, although she did

0:26:15.920 --> 0:26:21.600
<v Speaker 1>stress and she's right that you have to keep reevaluating regulations.

0:26:21.600 --> 0:26:26.879
<v Speaker 1>There's no such thing as a permanent regulatory regime. You

0:26:27.000 --> 0:26:30.320
<v Speaker 1>have to adjust, and particularly you have to make sure

0:26:30.440 --> 0:26:34.800
<v Speaker 1>that the costs of the regulation to the financial sector

0:26:35.000 --> 0:26:39.680
<v Speaker 1>isn't excessive. But she made that point. All right, Alice,

0:26:39.800 --> 0:26:41.800
<v Speaker 1>thank you so much. Alice really in there. The former

0:26:41.880 --> 0:26:43.679
<v Speaker 1>FED Vice chair stays with us. We'll be talking to

0:26:43.720 --> 0:26:46.200
<v Speaker 1>her a little bit more about. I guess the possible

0:26:46.200 --> 0:26:49.160
<v Speaker 1>currency war is what we made Also of the rest

0:26:49.240 --> 0:26:51.760
<v Speaker 1>of the FMC members we talked to. We had two

0:26:51.800 --> 0:26:54.920
<v Speaker 1>Federal Reserve officials talking to her, Michael McKee also taking

0:26:55.000 --> 0:26:58.600
<v Speaker 1>opposite sides of I guess David, this central bank ongoing

0:26:58.640 --> 0:27:02.560
<v Speaker 1>debate right about how you were bond to disappointingly low inflation.

0:27:02.840 --> 0:27:06.320
<v Speaker 1>Of course, policy makers gathered in the at Jackson Hole

0:27:06.440 --> 0:27:09.239
<v Speaker 1>at the annual symposium. We're pretty tame. Three years ago

0:27:09.320 --> 0:27:11.639
<v Speaker 1>we had Mario Droggi saying, you know, he'll do whatever

0:27:11.680 --> 0:27:13.800
<v Speaker 1>it takes and to actually put a number on the

0:27:13.800 --> 0:27:16.359
<v Speaker 1>balance sheet. This time we're in a different move. We

0:27:16.440 --> 0:27:20.119
<v Speaker 1>did hear from Kansas City Fed President Estra George saying

0:27:20.200 --> 0:27:23.120
<v Speaker 1>that it will all depend on whether the economic data

0:27:23.160 --> 0:27:25.359
<v Speaker 1>in the US will hold up, on whether there is

0:27:25.400 --> 0:27:28.679
<v Speaker 1>another opportunity or not to raise interest rates again in

0:27:28.720 --> 0:27:31.159
<v Speaker 1>two thousand and seventeen. So we'll talk more about Jackson

0:27:31.200 --> 0:27:34.359
<v Speaker 1>Hole and we'll talk dollar dynamics. David Gurray in New

0:27:34.440 --> 0:27:36.879
<v Speaker 1>York Francy Lackway in London were joined by Alice Rivlin

0:27:36.960 --> 0:27:40.160
<v Speaker 1>or Bloomberg Studios in Washington, d C. She's former vice

0:27:40.240 --> 0:27:42.600
<v Speaker 1>chair of the Federal Reserve, now a senior fellow at

0:27:42.600 --> 0:27:44.720
<v Speaker 1>the Brookings Institution. And Alice, I hope I'm not telling

0:27:44.720 --> 0:27:46.400
<v Speaker 1>tales out of school when I said, the last time

0:27:46.440 --> 0:27:48.880
<v Speaker 1>I saw you in Washington, you said the media tends

0:27:48.920 --> 0:27:51.400
<v Speaker 1>to focus too much on monetary policy and not enough

0:27:51.480 --> 0:27:54.760
<v Speaker 1>on regulatory policies. So let's continue talking about it, if if,

0:27:54.840 --> 0:27:57.199
<v Speaker 1>if we could hear we're looking at a FED that

0:27:57.240 --> 0:27:59.800
<v Speaker 1>could be radically changed from a personnel perspective, and I

0:27:59.840 --> 0:28:03.680
<v Speaker 1>wonder what that could pretend for for its regulatory responsibilities.

0:28:03.680 --> 0:28:05.520
<v Speaker 1>Do you see them shifting here over these next a

0:28:05.520 --> 0:28:08.520
<v Speaker 1>few months, a few years. Well, I think there's a

0:28:08.680 --> 0:28:15.000
<v Speaker 1>risk that the administration and the Congress will roll back

0:28:16.359 --> 0:28:22.840
<v Speaker 1>regulatory financial regulation more than I and Janet Yellen think

0:28:23.720 --> 0:28:27.879
<v Speaker 1>is wise. That was the burden of her speech. Be

0:28:28.119 --> 0:28:32.679
<v Speaker 1>very careful. It's the big threat to the stability of

0:28:32.720 --> 0:28:36.119
<v Speaker 1>the US economy is that we have another two thousand

0:28:36.080 --> 0:28:38.840
<v Speaker 1>and eight. We don't want that to happen. Uh, So

0:28:39.000 --> 0:28:42.880
<v Speaker 1>be very careful about deregulation. Now. I'm not sure that

0:28:42.960 --> 0:28:47.880
<v Speaker 1>the President and many of the Republican majority in Congress

0:28:48.720 --> 0:28:51.160
<v Speaker 1>agree with that message, and they may try to roll

0:28:51.240 --> 0:28:58.560
<v Speaker 1>back regulation the including putting a much more deregulatory person

0:28:59.640 --> 0:29:03.120
<v Speaker 1>at at the FED. How much more regulatory person at

0:29:03.120 --> 0:29:05.920
<v Speaker 1>the FED? I wonder, as we have this conversation about

0:29:05.960 --> 0:29:08.200
<v Speaker 1>personnel who might lead the FED, who might be in

0:29:08.240 --> 0:29:11.640
<v Speaker 1>these jobs, how much an academic background matters you have? One?

0:29:11.680 --> 0:29:14.400
<v Speaker 1>Of course, Jennet Yellen has one. Ben Bernanki had one

0:29:14.880 --> 0:29:17.400
<v Speaker 1>as well. There's there's speculation that the next appointing might

0:29:17.440 --> 0:29:19.360
<v Speaker 1>not come from that background, might be somebody from the

0:29:19.360 --> 0:29:22.680
<v Speaker 1>world of business with oh, just a b a degree

0:29:22.880 --> 0:29:26.120
<v Speaker 1>from from Does that matter to you? Do you think

0:29:26.120 --> 0:29:27.720
<v Speaker 1>that makes the difference whether or not somebody has the

0:29:27.720 --> 0:29:31.720
<v Speaker 1>academic background. Uh? Not necessarily. It would depend who it was.

0:29:32.400 --> 0:29:37.200
<v Speaker 1>The tradition of having a PhD in economics is UH

0:29:37.520 --> 0:29:42.760
<v Speaker 1>is pretty strong at the FED. But market experience and

0:29:42.840 --> 0:29:49.000
<v Speaker 1>financial sector experience is extremely important. Uh. The real criterion

0:29:49.560 --> 0:29:54.200
<v Speaker 1>I would think is, UH, is this person really familiar

0:29:54.280 --> 0:29:57.720
<v Speaker 1>with how the economy works and how markets work and

0:29:57.920 --> 0:30:04.880
<v Speaker 1>committed both to a sensible monetary policy and UH to

0:30:05.640 --> 0:30:10.240
<v Speaker 1>UH keeping us safe from another financial crisis? All right, Alice,

0:30:10.240 --> 0:30:12.720
<v Speaker 1>we're beating around the bush here. It's Gary Cone the

0:30:12.840 --> 0:30:16.360
<v Speaker 1>right person for FED. Oh, I'm not gonna do I'm

0:30:16.400 --> 0:30:21.880
<v Speaker 1>not going to endorse very nice try Okay, But but

0:30:22.040 --> 0:30:25.200
<v Speaker 1>would a former banker be the kind of profile that

0:30:25.240 --> 0:30:27.680
<v Speaker 1>could be good for the FED? Well, it would depend

0:30:27.760 --> 0:30:29.959
<v Speaker 1>who it was, But I think you could find somebody

0:30:29.960 --> 0:30:34.120
<v Speaker 1>from the financial sector who would do a very good job.

0:30:34.640 --> 0:30:38.720
<v Speaker 1>It doesn't have to be an academic PhD. Economist. Although

0:30:38.960 --> 0:30:43.280
<v Speaker 1>I think we were extremely fortunate, uh in the crisis

0:30:43.280 --> 0:30:46.640
<v Speaker 1>of two thousand and eight to have Ben Bernankee at

0:30:46.640 --> 0:30:50.200
<v Speaker 1>the HELM, because not only was he a very highly

0:30:50.280 --> 0:30:53.640
<v Speaker 1>qualified academic, but he was an expert on what they

0:30:53.680 --> 0:30:56.760
<v Speaker 1>did wrong in the nineteen thirties and very determined not

0:30:56.840 --> 0:31:00.160
<v Speaker 1>to do that again. We got changed change position here

0:31:00.160 --> 0:31:01.719
<v Speaker 1>a little bit. Um. You know, I know that when

0:31:01.760 --> 0:31:03.320
<v Speaker 1>there's a big storm like the one that we're seeing

0:31:03.320 --> 0:31:05.800
<v Speaker 1>in Texas, the Federal Reserve is on alert. Of course,

0:31:05.800 --> 0:31:08.400
<v Speaker 1>the Federals bears some responsibility for the banking system here

0:31:08.400 --> 0:31:10.280
<v Speaker 1>in the US. Of course, what does the FED do

0:31:10.360 --> 0:31:12.480
<v Speaker 1>when there's something like this, when people may have difficulty

0:31:12.520 --> 0:31:15.320
<v Speaker 1>getting to banks or just banking normally? This is this

0:31:15.360 --> 0:31:19.000
<v Speaker 1>is part of the Fed's responsibility as well. Oh absolutely,

0:31:19.040 --> 0:31:24.920
<v Speaker 1>And the FED communicates with the banking and financial sector

0:31:25.360 --> 0:31:30.239
<v Speaker 1>that it stands ready uh to help and that they

0:31:30.280 --> 0:31:37.080
<v Speaker 1>shouldn't worry about liquidity. They should uh be as helpful

0:31:37.120 --> 0:31:41.480
<v Speaker 1>to their clients as they possibly can be. Of course,

0:31:41.480 --> 0:31:44.200
<v Speaker 1>we're the two time director of the Congressional Budget Office,

0:31:44.200 --> 0:31:45.840
<v Speaker 1>and let me ask you a bit about sort of

0:31:45.840 --> 0:31:48.680
<v Speaker 1>the challenges that lawmakers face when they get to Washington.

0:31:49.120 --> 0:31:51.520
<v Speaker 1>Uh in just over I guess maybe a littless than

0:31:51.520 --> 0:31:53.040
<v Speaker 1>the webs that just overweight, little less that a week

0:31:53.160 --> 0:31:56.200
<v Speaker 1>is we're on the press fas of reaching September. Uh

0:31:56.280 --> 0:31:58.880
<v Speaker 1>do do you do you foresee there being real difficulties

0:31:58.880 --> 0:32:01.480
<v Speaker 1>here passing some sort of ending bill in time to

0:32:01.480 --> 0:32:03.719
<v Speaker 1>avert a government shutdown. How worried are you about that?

0:32:03.800 --> 0:32:06.719
<v Speaker 1>And of course about the reaching the dead ceiling and

0:32:06.760 --> 0:32:10.560
<v Speaker 1>not seeing that raised in time to meet the government's obligations.

0:32:11.360 --> 0:32:16.720
<v Speaker 1>I'm medium worried. I think cooler heads may prevail and

0:32:17.240 --> 0:32:22.880
<v Speaker 1>we will probably get a short term continuing resolution as

0:32:22.880 --> 0:32:26.680
<v Speaker 1>they call it, to keep the government funded past the

0:32:26.840 --> 0:32:29.680
<v Speaker 1>end of the fiscal year so that they can then

0:32:30.440 --> 0:32:35.960
<v Speaker 1>uh make some more serious decisions in November, perhaps even

0:32:35.960 --> 0:32:39.960
<v Speaker 1>into December. That seems to me the most likely. I

0:32:40.000 --> 0:32:43.560
<v Speaker 1>don't expect that we will have a government shut down,

0:32:43.680 --> 0:32:47.160
<v Speaker 1>but we might. And the President is still threatening if

0:32:47.160 --> 0:32:51.080
<v Speaker 1>he doesn't get his border wall to close down the government.

0:32:51.120 --> 0:32:56.160
<v Speaker 1>I hope that doesn't happen on the death ceiling. I

0:32:56.240 --> 0:33:03.040
<v Speaker 1>really hope that Secretary Venution and others can convince the

0:33:03.120 --> 0:33:07.080
<v Speaker 1>Congress and the President that it would be just terribly

0:33:07.280 --> 0:33:12.320
<v Speaker 1>stupid for Uh, the United States to even flirt with

0:33:12.360 --> 0:33:15.560
<v Speaker 1>a debt crisis. We don't need to do that. We

0:33:15.600 --> 0:33:19.719
<v Speaker 1>should raise the debt ceiling as much as is necessary

0:33:19.800 --> 0:33:24.480
<v Speaker 1>to accommodate the spending and revenues that have already been voted.

0:33:25.160 --> 0:33:27.160
<v Speaker 1>How did the FED look at this risk? We heard

0:33:27.240 --> 0:33:30.760
<v Speaker 1>from billionaire head fund manager Rate Dalio that you know

0:33:30.760 --> 0:33:33.640
<v Speaker 1>it's time to off float risk and this is mainly

0:33:33.680 --> 0:33:40.160
<v Speaker 1>because of what's happening in Washington. Well, uh, yes, I

0:33:40.160 --> 0:33:44.520
<v Speaker 1>mean the FED looks at it nervously as as we

0:33:45.120 --> 0:33:49.400
<v Speaker 1>as we all do. But I don't think the FED

0:33:49.480 --> 0:33:53.240
<v Speaker 1>has a real role. These are of fiscal matters to

0:33:53.320 --> 0:33:59.320
<v Speaker 1>be decided between the President and the Congress as to uh,

0:33:59.480 --> 0:34:05.520
<v Speaker 1>when we fund the government adequately and when we raised

0:34:05.560 --> 0:34:08.720
<v Speaker 1>the dead ceiling. The FED can stand on the side

0:34:08.760 --> 0:34:12.239
<v Speaker 1>and look nervous. But that's about all I can do. Right.

0:34:12.280 --> 0:34:15.160
<v Speaker 1>But by looking nervous, would they be right for examply,

0:34:15.600 --> 0:34:18.640
<v Speaker 1>for example, in delaying a hike because of this new

0:34:19.000 --> 0:34:28.480
<v Speaker 1>politic uncertainty? Well they might, um, but the economy itself

0:34:28.840 --> 0:34:32.719
<v Speaker 1>looks pretty strong, and uh, inflation, while not up to

0:34:32.760 --> 0:34:38.960
<v Speaker 1>the two percent target, isn't doing isn't plummeting? Uh. So, Um,

0:34:39.000 --> 0:34:43.520
<v Speaker 1>I think that will be the main things on their mind. Uh.

0:34:43.560 --> 0:34:47.400
<v Speaker 1>They might be a little more cautious because of the

0:34:47.440 --> 0:34:51.480
<v Speaker 1>turmoil and the Congress, but I would expect that mostly

0:34:51.560 --> 0:34:55.359
<v Speaker 1>the conversation would be about is the economy strong enough

0:34:55.719 --> 0:34:59.000
<v Speaker 1>for us to keep on the track that we'd like

0:34:59.120 --> 0:35:02.360
<v Speaker 1>to be on, really get back to a more normal

0:35:02.400 --> 0:35:05.239
<v Speaker 1>interest rate. You know, the FT hasn't been shy about

0:35:05.239 --> 0:35:07.400
<v Speaker 1>saying it's not going to speculate what the federal government's

0:35:07.440 --> 0:35:09.560
<v Speaker 1>going to do when it comes to tax reformer, fiscal policy,

0:35:09.600 --> 0:35:11.840
<v Speaker 1>regulatory reform, all of that, but how much just to

0:35:11.920 --> 0:35:14.279
<v Speaker 1>complicate things, the FET has taken some criticism for how

0:35:14.440 --> 0:35:17.279
<v Speaker 1>it forecasts, how well it forecasts. Give us a sense

0:35:17.320 --> 0:35:20.680
<v Speaker 1>of just the the complexity infused into that process. By

0:35:20.719 --> 0:35:25.319
<v Speaker 1>having so much uncertainty in Washington right now, well they

0:35:25.320 --> 0:35:31.720
<v Speaker 1>starting to have to take it into account. Uh. But um,

0:35:32.160 --> 0:35:36.800
<v Speaker 1>that's a question without an answer really. Uh, the everybody

0:35:36.840 --> 0:35:42.560
<v Speaker 1>is a little nervous that turmoil in Washington, or hurricanes

0:35:42.640 --> 0:35:47.959
<v Speaker 1>on the Gulf Coast or other sources of uncertainty may

0:35:47.960 --> 0:35:52.719
<v Speaker 1>may be there. But you make your best forecasts and

0:35:53.600 --> 0:35:57.440
<v Speaker 1>stick and go with it. Just lastly, here does Washington

0:35:57.840 --> 0:35:59.960
<v Speaker 1>is there more uncertain than there has been? Which are

0:36:00.000 --> 0:36:01.319
<v Speaker 1>thinking about the death feeling again? You and I have

0:36:01.320 --> 0:36:02.960
<v Speaker 1>talked about it, you know eight out of the nine

0:36:03.040 --> 0:36:05.760
<v Speaker 1>last years, it feels like does this time feel different

0:36:05.800 --> 0:36:09.080
<v Speaker 1>to you in Washington? Yes, I think it does feel different,

0:36:09.200 --> 0:36:15.680
<v Speaker 1>and it's largely because we have a quite inexperienced and

0:36:15.920 --> 0:36:21.760
<v Speaker 1>unpredictable president. We don't know what Donald Trump thinks about

0:36:23.200 --> 0:36:27.520
<v Speaker 1>the debt ceiling or other things, and how much he

0:36:27.680 --> 0:36:32.279
<v Speaker 1>is willing to risk chaos to get some of the

0:36:32.360 --> 0:36:35.800
<v Speaker 1>things that he cares deeply about, like the border wall. Alice,

0:36:35.800 --> 0:36:37.279
<v Speaker 1>great to speak with you always. Thank you very much

0:36:37.280 --> 0:36:39.160
<v Speaker 1>being so generous with your time this morning. Alice Freeland,

0:36:39.200 --> 0:36:41.319
<v Speaker 1>Senior fellow at the Brookings Institution, former vice chair the

0:36:41.320 --> 0:36:43.560
<v Speaker 1>Fed Reserve. Because I said, two time Director of the

0:36:43.560 --> 0:36:47.279
<v Speaker 1>Congressional Budget Office, joining us from studios in Washington, d C.

0:36:47.440 --> 0:36:49.759
<v Speaker 1>This morning. This is Bloomberg Surveillance. David Garray in New York,

0:36:49.760 --> 0:37:06.520
<v Speaker 1>Francy Lapwa in London. Tom Keane is off today. Big

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<v Speaker 1>news that here in the U. S as well, we

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<v Speaker 1>continue to watch what's unfolding in Texas and pleasure now

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<v Speaker 1>to be joined by James Leewitt, who is a former

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<v Speaker 1>director of FEMA. He joins us on our phone lines.

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<v Speaker 1>Great to have you with us as all of this

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<v Speaker 1>contends to unfold. As I say this, this terrible storm

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<v Speaker 1>in Texas. What are you watching for when it comes

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<v Speaker 1>to government response? In other words, how should we be

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<v Speaker 1>assessing the degree which things are going apace? At Mr? Ware? Well,

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<v Speaker 1>I think the you know, the President appointed Brock Long

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<v Speaker 1>as administrator FEMA, who's a farmer state director of the

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<v Speaker 1>Merchants Management whose is very experienced, very capable, and I

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<v Speaker 1>think he'll be leading FEMA extremely well. And uh in

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<v Speaker 1>all the eight years I was at FEMA and female

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<v Speaker 1>employees are very dedicating about what they do, and so

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<v Speaker 1>I think that will go well as supporting the state

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<v Speaker 1>and local governments and that and I think the President

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<v Speaker 1>has done everything right so far. You know, he made

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<v Speaker 1>the Decorate disaster declaration Friday and um and that was

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<v Speaker 1>very important for the state and locals to know that

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<v Speaker 1>there's a lot of these costs go and reimbursable. And

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<v Speaker 1>I think the trip that he's making down to Texas

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<v Speaker 1>tomorrow is important just to show the people that the

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<v Speaker 1>federal government is there behind them and will be there

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<v Speaker 1>for the long haul. I think it would be important

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<v Speaker 1>that he meet with the governor and local officials as

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<v Speaker 1>much as he can without disrupting the response. But also

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<v Speaker 1>I think it's important that he if he can, reach

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<v Speaker 1>out into where shelter is and let those people know

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<v Speaker 1>and give them hope, because right now, you know, they're devastated,

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<v Speaker 1>They've lost everything they've worked for all their life, and

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<v Speaker 1>this could come down as the costliest catastrophic event we've

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<v Speaker 1>seen in the United States. Just understand what FEMA is

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<v Speaker 1>doing at this point. As I said that, the storm

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<v Speaker 1>is still raging, it's pouring rain across Houston the surrounding area.

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<v Speaker 1>There's a there's a tremendous amount of flooding here. What

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<v Speaker 1>what at this point is FEMA, UH and and all

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<v Speaker 1>the groups that's working with What are they doing at

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<v Speaker 1>this point. Well, primarily FEMA's role right now is to

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<v Speaker 1>be responsive to state local government and what resources they

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<v Speaker 1>request and the team you know as the full federal

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<v Speaker 1>government behind them that they coordinate all those resources. So

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<v Speaker 1>it's there right now and in the role of responding

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<v Speaker 1>with those resources, supporting the state and local governments and

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<v Speaker 1>what their needs are. And then after this that is

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<v Speaker 1>the response is finished in lives have saved and you

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<v Speaker 1>get into the recovery side of it, then FEMAL will

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<v Speaker 1>take the more prominent role, particularly in the public assistant

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<v Speaker 1>side as well as the individual assistant side and uh

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<v Speaker 1>and so then you know, after they get all the

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<v Speaker 1>assessments done, after this water goes down, and then what's

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<v Speaker 1>going to be important is is what the governor going

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<v Speaker 1>to ask for? You know, I would ask for reimbursable

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<v Speaker 1>costs and be response for how long that takes, and

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<v Speaker 1>then whatever the cost share will be to state and

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<v Speaker 1>local governments after that, which could be or it could

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<v Speaker 1>be SETI if I I would definitely ask for uh. Mr, Well,

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<v Speaker 1>thank you very much for the time. I hope we

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<v Speaker 1>can check in with you a little later this week.

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<v Speaker 1>Is so we continue to watch the response to the

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<v Speaker 1>tropical storm over Texas. Right now, it's Change le w

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<v Speaker 1>former director of FEMA, joining us on our phone lines.

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<v Speaker 1>Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and

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<v Speaker 1>listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast

0:40:33.480 --> 0:40:37.000
<v Speaker 1>platform you prefer. I'm on Twitter at Tom Keene. David

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<v Speaker 1>Gura is at David Gura before the podcast. You can

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<v Speaker 1>always catch us worldwide. I'm Bloomberg Radio.