Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with
Speaker 1: David Gura. Daily we bring you insight from the best
Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance
Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course,
Speaker 1: on the Bloomberg. David Gurra in New York, Francy Lapwa
Speaker 1: in London. The President saying he's going to travel to
Speaker 1: Texas tomorrow to inspect what's continue to happen there, the
Speaker 1: storm continuing to range over Houston many parts of the
Speaker 1: state of Texas. He's gonna head to St. Louis a
Speaker 1: little later this week as well to talk about taxi form.
Speaker 1: A lot of politics and policy to talk about with
Speaker 1: the conversation. Mark Walker who joins us here in a
Speaker 1: Bloomberg eleven three studios in New York. He's a Republican
Speaker 1: who represents the sixth district in North Carolina. He's the
Speaker 1: head of the Republican Study Committee as well. Let's start
Speaker 1: with with the budget, with all the obligations to Congress
Speaker 1: faces when they get back here in September. I have
Speaker 1: to pass a funding bill, have to do something with
Speaker 1: with the death ceiling. Who are you listening to? Who
Speaker 1: should we be listening to in leadership for guidance on
Speaker 1: what's going to happen and when? Well, I believe, first
Speaker 1: of all, I want to commend Chairwoman Dyeing Black and
Speaker 1: her work on the Budget Committee. Uh, it's rare. I
Speaker 1: believe that you have to go back ten years where
Speaker 1: you had a unanimous Republican support on a budget and
Speaker 1: there members across the board, including Freedom Caucus members in there.
Speaker 1: So I know she worked weekends, stayed on the phone,
Speaker 1: But to pass that out of Budget Committee, I believe
Speaker 1: deserves a very quick vote and we're certainly encouraging leadership
Speaker 1: to get it to the House floor. One of the
Speaker 1: things that we feel very impressed about it is over
Speaker 1: the next ten years, it does take an honest look
Speaker 1: and reform close to two hundred billion dollars of some
Speaker 1: specifically some of the Medicaid. Uh. We we've seen the
Speaker 1: current healthcare budget. As we move forward, as another forty
Speaker 1: million Americans to the Medicaid roles over that ten years,
Speaker 1: it's certainly something that we can't afford. And and I
Speaker 1: will tell you as a former pastor, I don't believe
Speaker 1: it we're doing a service to people by continuing to
Speaker 1: create a spirit of enablement as opposed to maybe an
Speaker 1: incentive to be able to continue to pull yourselves different
Speaker 1: levels out of out of poverty. So when it comes
Speaker 1: to who we're listening to, we're listening to cheerwoman Black,
Speaker 1: but we're also listening to the leadership as well. Do
Speaker 1: people talk about regular order on Capitol Hill anymore? Have
Speaker 1: we gotten used to this process of continuing resolution after
Speaker 1: continuing resolutions? UH? Short term funding bill after short term
Speaker 1: funding bill? And and do you think we're gonna get
Speaker 1: back to a point where we see a regularity of
Speaker 1: the budget process in Washington again? Well, being there in
Speaker 1: my second term, there's a legend that a regular order
Speaker 1: once existed. Yet, but we're I don't I don't know
Speaker 1: how much of it. We We talked a lot about it,
Speaker 1: but it's probably more rhetoric than anything else. And there
Speaker 1: is some guys that are the purest traditionists. As far
Speaker 1: as trying to get back to it, I believe there's
Speaker 1: good measure and good reasoning why we should be focusing
Speaker 1: on it. However, we live in such interesting days back
Speaker 1: and forth with administration different caucuses. Uh, different leadership that
Speaker 1: that's up even since I've been there. So it's all
Speaker 1: over the map right now. On the issue of tax reform,
Speaker 1: We've gotten a piece of paper from the White House.
Speaker 1: A few months later, we got two pieces of paper
Speaker 1: from the White House. We know that the border just
Speaker 1: a tax is no longer on the table. What's your
Speaker 1: sense of the timetable here for for tax reform? And
Speaker 1: is it a belief of yours that we need to
Speaker 1: get tax reforms? It's deficit neutral if I can get
Speaker 1: away from my talking points, I believe there is legitimate,
Speaker 1: legitimate hope that this is something we can get across
Speaker 1: the board. Uh. We use the word hopeful and optimistic
Speaker 1: and all the different things that we talked about. But
Speaker 1: from what I'm seeing in the work with Kevin Brady
Speaker 1: and ways and means um he and Speaker run obviously,
Speaker 1: as you just mentioned, we're very keen and very hopeful
Speaker 1: that they can get this thing through with a Board
Speaker 1: of Adjustment to tax because of what it would do
Speaker 1: to the growth immediately. Uh, that is something that we're
Speaker 1: going to have to look as for as how we
Speaker 1: do find that money somewhere else. But as far as
Speaker 1: when it comes to legitimate tax reform the first time
Speaker 1: in thirty woidant years, I believe there's some sign off
Speaker 1: on from the White House, both with a Senate and
Speaker 1: with a House. So that is something that we can
Speaker 1: never get to on the same page with health care.
Speaker 1: Every time this piece moved a little bit, then it
Speaker 1: then it calls the equal and opposite reaction somewhere else.
Speaker 1: But I believe when it comes to tax reform, without
Speaker 1: putting a hard timeline, I would be very surprised if
Speaker 1: we didn't have this pass before Thanksgiving. UM Congressman, what
Speaker 1: does it mean being a Republican a two thousand and seventeen?
Speaker 1: Is it more frustrating now than it was a year ago?
Speaker 1: I believe it is. I'm one that's relatively new to
Speaker 1: the political scene, and I was a pastor for nearly
Speaker 1: eighteen years and work in business and finance right out
Speaker 1: of school for about five or six years. But in
Speaker 1: the two and a half years three years that I've
Speaker 1: been here in in the political scene, uh, my job
Speaker 1: is still continue to put a lot of attention, a
Speaker 1: lot of energy into relationships. I'm very proud that I
Speaker 1: represent UM all of our communities, I represent the largest
Speaker 1: historical black college and university and in all of the
Speaker 1: country in my district, and making sure that Republicans are
Speaker 1: still talking about things that are important to us long
Speaker 1: term when it comes to fiscal but also understand there's
Speaker 1: there's a heart component of this. Uh. As far as
Speaker 1: how we message, I've learned that Republicans are pretty notorious.
Speaker 1: They have a good objective long term, I believe, but
Speaker 1: sometimes fumble in and trying to express why that's important
Speaker 1: to all of our communities and not just to select few.
Speaker 1: How's our president doing? How's your president doing? President Trump? UM?
Speaker 1: I believe that overall I would give marks UM that
Speaker 1: are positive because of how much that we've been able
Speaker 1: to get done in the regulatory component, obviously had it
Speaker 1: has impacted the markets. Uh. Now that we were nine
Speaker 1: months almost into this at ten if you want to
Speaker 1: count since the inauguration, but moving into month and or
Speaker 1: nine since um since January. Uh, there are things I
Speaker 1: feel like that continue to be improved. I remember speaking
Speaker 1: to him not too long ago and and and him remarking, hey, listen,
Speaker 1: I'm still I'm still learning this. Uh. You know, I
Speaker 1: thought I was not one that had a huge pedigree
Speaker 1: of two and a half years. This is something that's
Speaker 1: certainly he has, uh, certainly more room to grow, more
Speaker 1: room to learn. UM, and I understand from a leadership component,
Speaker 1: when you been someone that really hasn't been accountable to
Speaker 1: anyone else is specifically in your line, there's there was
Speaker 1: no board. He answered to uh in learning now that
Speaker 1: there are three equal branches and trying to find the
Speaker 1: balance and all that, as well as trying to motivate
Speaker 1: people to pursue or to to complete what he feels
Speaker 1: like is an agenda that American people elected him to accomplish.
Speaker 1: All of that has been kind of a working order.
Speaker 1: Have we arrived We have not. But if you look
Speaker 1: at people like Taylorson and Madis and Gorst's there are
Speaker 1: some winds here that I believe we can celebrate Gods
Speaker 1: but thank you so much of the time, and they
Speaker 1: appreciate that. Joining us here on Blombergradi and Blomberg Television
Speaker 1: as well as Corns and Mark Walker, who represents the
Speaker 1: sixth district in North Carolina, the chair of the Republican
Speaker 1: Study Committee here on Bloomberg Surveillance on Bloombergradio, David Garray
Speaker 1: in New York. Francy and Lapwa in London. This is
Speaker 1: Bloomberg Warn. David Gray in New York, Francy Lackwoy in London.
Speaker 1: Tom Keene is offten. This is Bloomberg Surveillance on Bloomberg Radio.
Speaker 1: We continue, of course, to monitor the storm bearing down
Speaker 1: on Texas, on Houston in particular. That's Tropical Storm Harvey,
Speaker 1: downgraded from hurricane status. He's still pouring a ton of
Speaker 1: rain on that city. Flooding a huge issue there, and
Speaker 1: we'll have updates on the situation there throughout the morning.
Speaker 1: Looking at today's agenda, the President schedule to deliver a
Speaker 1: joint press conference with the President of Finland a little
Speaker 1: bit later today, that's at four twenty. Wall Street Time
Speaker 1: will have coverage of that for you here right here
Speaker 1: on Bloomberg Radio. Well, there's a lot of news on
Speaker 1: Friday afternoon, of course, as the hurricane approached the Gulf coast.
Speaker 1: Also the President electing to part in the former sheriff
Speaker 1: of Maricopa County in Arizona, controversial Sheriff Joe R. Peo,
Speaker 1: and the President wrote in a statement on the heels
Speaker 1: of that decision, he's now Joe or Peo now eighty
Speaker 1: five years old and after more than fifty years of
Speaker 1: admirable service to our nation, he is a worthy candidate
Speaker 1: for a presidential parton. Somebody who thinks differently about this
Speaker 1: is no filment. He's a professor of law at Harvard
Speaker 1: Law School, a columnist for Bloomberg View as well. He's
Speaker 1: written about this. He wrote about this in advance of
Speaker 1: that and saying if the president were to do that,
Speaker 1: it could be an impeachable offense. In his words, no
Speaker 1: Felton joins us now on our phone lines, Noah Joe
Speaker 1: Pio convicted of contempt of court by Judge Susan Bolton, explain,
Speaker 1: you know what what what he's being pardoned from. I
Speaker 1: think that's key here, It is absolutely key. The background
Speaker 1: here is that UM a group of citizens sued our
Speaker 1: Pio and the Maricopa County Sheriff's office for unconstitutionally detaining
Speaker 1: I think people mostly Latinos, on suspicion that they were
Speaker 1: undocumented and then holding them indefinitely in prison. And a
Speaker 1: court held that was unconstitutional, that it violated the basic
Speaker 1: rights of the people who were being detained, and the
Speaker 1: court ordered our Pio and the office to stop doing it.
Speaker 1: Our pile refused to stop doing it, and he told
Speaker 1: his staff, We're going to keep on doing exactly what
Speaker 1: we've been doing. First he was held in civil contempt
Speaker 1: and then the Justice Department prosecuted him for criminal contempt um,
Speaker 1: which is pretty unusual, and he was found guilty and
Speaker 1: sentenced to a fairly symbolic sentence of about six months.
Speaker 1: You write about the effect that this could have, this
Speaker 1: pardon could have on the integrity of the legal system.
Speaker 1: Just explain what you mean by that. The President, by
Speaker 1: doing this calls into questions sort of the strictures of
Speaker 1: our legal system in this country and your estimation. Yeah, well,
Speaker 1: here's the thing. It's pretty rare for a sworn law
Speaker 1: enforcement official to be ordered by a court to do
Speaker 1: something and to flat out say no, I'm not going
Speaker 1: to do it. It's even more rare when the thing
Speaker 1: that the law enforcement official has done is to break
Speaker 1: the constitution. And it's even rare for the person than
Speaker 1: to be convicted by the courts, specifically at defying a
Speaker 1: court order. When the President pardoned someone under these conditions,
Speaker 1: what he's basically communicating is that it was fine for
Speaker 1: law enforcements to ignore what the courts told him to do,
Speaker 1: and that it was fine for him to violate the
Speaker 1: Constitution itself. So that's a basic challenge to the rule
Speaker 1: of law. It's saying that a law enforceani can ignore
Speaker 1: the law, ignore the power of the courts to say
Speaker 1: what the law is, and do whatever he wants, including
Speaker 1: violence the constitutional rights of ordinary people. And that's pretty stunning. Frankly,
Speaker 1: It's pretty different in a situation where someone is pardoned
Speaker 1: for committing a crime, because in this instance, the problem
Speaker 1: is not so much that what our pio did is
Speaker 1: against the laws, that it was in direct violation of
Speaker 1: what a judge told him the constitution required. But no,
Speaker 1: he suggests this is an impeachable offense. But then I thought,
Speaker 1: the president pardon who he wanted. Great question. The bottom
Speaker 1: line is this. It's true that the presidents can pardon
Speaker 1: whomever he chooses to parting, probably himself excluded in the
Speaker 1: sense that once the pardon is issued, our Pio can't
Speaker 1: go to jail. I mean the pardon worked in that sense.
Speaker 1: It doesn't mean that the president is free of any
Speaker 1: sanction for what he's done. If the president abuses his
Speaker 1: power by partnering people, let's say, who were close to him,
Speaker 1: or to serve his own interests, or in this instance,
Speaker 1: to basically fundamentally contravene the idea the constitution binds law
Speaker 1: enforcement officials. The thing that we can do about that
Speaker 1: is to invoke the impeachment power. And it's not just
Speaker 1: me who's saying that. Uh. In When they were ratifying
Speaker 1: the Constitution of the United States at the Virginia Ratifying Convention,
Speaker 1: James Madison, who was the lead draft into the Constitution,
Speaker 1: he was asked specifically about the part in power. The
Speaker 1: people were saying, well, we shouldn't have a part in
Speaker 1: power in the constitution. Is a bad idea. What if
Speaker 1: the president abuses the part in power? Madison said, essentially, well,
Speaker 1: the president uses the part in power, you can impeach him.
Speaker 1: That's the power you have available to you. So the
Speaker 1: idea here is that the part in power, it's not
Speaker 1: it's absolute in the sense the president can do it
Speaker 1: if he wants to, but it's not outside the bounds
Speaker 1: of sanction. And the sanction that's available is impeachment. Right,
Speaker 1: you have to refresh my memory because it's been a
Speaker 1: couple of years that I haven't done constitution a law.
Speaker 1: This is not the abuse of power our article, right,
Speaker 1: this is you're talking about something else. No, Well, in
Speaker 1: the constitution um, a president can be impeached for what
Speaker 1: are called high crimes and misdemeanors. But I tradition, this
Speaker 1: was very clear of the founders. High crimes and misdemeanors
Speaker 1: does not mean breaking a statute, doesn't mean breaking a
Speaker 1: law only it would include that, But it also means
Speaker 1: any abuse of the presidential power, and that is part
Speaker 1: of the impeachment structure. And it's been the case when
Speaker 1: previous presidents have been impeached that Congress has not restricted
Speaker 1: itself to presidential violation of a written statute. They've also
Speaker 1: gone after the president for what they considered abuses of power.
Speaker 1: So abuse of power is a sort of general catch
Speaker 1: all phrase that I'm using to capture the idea of
Speaker 1: high crimes and misdemeanors, and that would cover impeachment. There's
Speaker 1: plenty of things the president can do that would deserve
Speaker 1: impeachment that don't violate a specific law that's on the books,
Speaker 1: but that obviously subvert the structure of the Constitution and
Speaker 1: subvert the rule of law, no fel What does this,
Speaker 1: this story, this case tell us about the relationship between
Speaker 1: the federal government in the States government. Just reading between
Speaker 1: the lines here and the statement from the White House,
Speaker 1: and from what I've read of the former sheriff, it
Speaker 1: seems like there are a lot of people who think
Speaker 1: that he was simply taking a taking the rule of
Speaker 1: law into his own hand. Rightfully, that the federal government
Speaker 1: wasn't doing what it needed to do when it comes
Speaker 1: to protecting the federal the border with Mexico. He was
Speaker 1: doing that. But what does this say about the state
Speaker 1: of that relationship between states and the US federal government. Well,
Speaker 1: it's pretty badly afraid. Um. In this instance, a state
Speaker 1: of elected official was violating the Constitution. Now, he may
Speaker 1: have been doing it because he thought that the federal
Speaker 1: government needed to do more, but that the federal court
Speaker 1: which convicted him and which ordered him not to do
Speaker 1: what he was doing, believe that he had overstepped his bound.
Speaker 1: If he was just enforcing federal law, he would not
Speaker 1: have been convicted. Our pile would not have been convicted
Speaker 1: of contempt of court. This is not about him acting
Speaker 1: in a way that the federal court didn't want to
Speaker 1: state official that this was about our pio acting in
Speaker 1: a way that no official connect under the constitution. Um.
Speaker 1: It's also true that in principle our Pio could still
Speaker 1: be charged under state law or convective contempts under state law,
Speaker 1: and if that happens, the President would not actually have
Speaker 1: been able to pardon him at all. So this is
Speaker 1: exact an instance of the president intervening as is his
Speaker 1: power to do over the federal courts. And the federal
Speaker 1: courts we're doing what they're empowered to do by the
Speaker 1: fourteen Amendment of the Constitution, namely, supervised state officials and
Speaker 1: make sure they're not violating the Constitution under color of law,
Speaker 1: which is exactly what our pile was doing. No, fellmen,
Speaker 1: what does this tell you about this president's attitude toward
Speaker 1: presidential pardons. I can look back at all of the
Speaker 1: pardons that President Obama made, a lot of them centered
Speaker 1: on drug cases in particular. Um, there are a lot
Speaker 1: of people here wondering a sort of what lessons we
Speaker 1: can draw from this particular pardon, how it might be
Speaker 1: used to say in the Russian investigation, how the president
Speaker 1: might use his power of pardon, and going forward, what
Speaker 1: lessons can you draw. Well, I'm warious of the interpretation
Speaker 1: that says that this is some sort of a message
Speaker 1: with specifically with respect to the Russian investigation. Um. What
Speaker 1: I think is very clear here is that the president
Speaker 1: ignored the usual process that other presidents have in the
Speaker 1: past gone through before they chose to make a pardon.
Speaker 1: There's a special part in office and the partner of justice.
Speaker 1: It was ignored here. Ordinarily, appeals have to be exhausted.
Speaker 1: That was not the case here. Ordinarily it just goes
Speaker 1: to a complex and complete vetting process before any pardon
Speaker 1: is issued. I'm not saying that every past part in
Speaker 1: is one that I would agree with, but in this instance,
Speaker 1: the president circumvented those usual processutes. It also happened early
Speaker 1: in his term rather than late in his term, a
Speaker 1: way of saying, essentially, I don't care what people think
Speaker 1: about this. I'm going to do it on my own.
Speaker 1: So if nothing else, this communicates the president thinks that
Speaker 1: it's within his authority and that he conclearely get away
Speaker 1: with partnering people whenever he wants, and probably however he
Speaker 1: wants to suggests the willingness to be quick with the
Speaker 1: partning power, but no, so he's advising the president actually
Speaker 1: on all matters of law and constitutional powers. Are they
Speaker 1: ill advising him or is the President just ignoring it? Well,
Speaker 1: in this instance, Um, the usual process that would have
Speaker 1: been created to the Department of Justice through the Partner Office,
Speaker 1: we've been told was not followed at all. So the
Speaker 1: strong suggestion is that the procedures that are ordinarily in
Speaker 1: place to advise the president simply were ignored and we're
Speaker 1: not followed. Often the White House Council's office would also
Speaker 1: be involved in the pardon process, and we haven't been
Speaker 1: told publicly whether in fact the White House Council was
Speaker 1: involved in this process or not. Now again, constitutionally, the
Speaker 1: president doesn't have to listen to anybody. He can pardon
Speaker 1: whomever he chooses to pardon. Um. But those procedures have
Speaker 1: been put in place by previous administrations with the goal
Speaker 1: of rationalizing the process and not making a pardon look
Speaker 1: like it violates the basic principle of legality, which I
Speaker 1: think this pardon does look like. David Guray in New York,
Speaker 1: Francy Laqua in London, Tom Keen is off to damn
Speaker 1: looking at news out of Berkeley, California. Big protests yesterday
Speaker 1: there in Martin Luther King Jr. Civic Center Park, a
Speaker 1: big confrontation between antifa and anti fascist anarchist protesters and
Speaker 1: others who were gathered there. Around two thousand people were
Speaker 1: gathered in that park yesterday, and I just wanted to
Speaker 1: bring in our our guests. No Felton, who's a law
Speaker 1: professor at Harvard Law, of course, columns from Bloomberview to
Speaker 1: talk a bit about a free speech and light of
Speaker 1: the protests that we've seen here, in light of the
Speaker 1: protests from both sides that we've seen here over these
Speaker 1: last few weeks, of course, most paramount being in Charlessville.
Speaker 1: When you look at history and how we deal with
Speaker 1: free speech, no matter how how violent is what have
Speaker 1: you been thinking about over these last few weeks now, Well,
Speaker 1: I think there's a whole bunch of really fascinating and
Speaker 1: subtle issues. The most important one is that we need
Speaker 1: to keep on distinguishing two different things. We need to
Speaker 1: distinguished peaceful protests, which is protected by the First Amendment
Speaker 1: and should be protected by the First Amendment, no matter
Speaker 1: how vile the content is, from violent incitement, which is
Speaker 1: when you take an action that you know is likely
Speaker 1: to cause an imminence incitement to violence, and is actually
Speaker 1: causing that, not just that you know it's going to
Speaker 1: cause that, but it isn't that going to cause that.
Speaker 1: The police have every right to prevent the ladder from happening.
Speaker 1: So if there are a group that are confronting each other,
Speaker 1: and there are people trying to provoke violence, then the
Speaker 1: police are wholly within their rights, and indeed, I would
Speaker 1: say their responsibilities to stand in between and to separate
Speaker 1: people and to make sure that violence doesn't break out.
Speaker 1: We don't really think about it this way, but without
Speaker 1: the police protecting us against the violence, the free speech
Speaker 1: right that we have becomes pretty empty. And so we
Speaker 1: actually need both components. We need the order on the
Speaker 1: streets in ordering sure that our free speech rights are protected.
Speaker 1: It strikes strikes me as we talk about this, as
Speaker 1: we talk about the Ropio case as well, the the
Speaker 1: a c l U is at the center of both
Speaker 1: of these these stories. Of course, the a c l
Speaker 1: U has said it's now going to represent hate groups
Speaker 1: that march with with firearms. What do you make of
Speaker 1: that decision? There? Obviously, the a c l U has
Speaker 1: taken heat, as it often does from both sides here
Speaker 1: for for a decision like that one, Yeah, I mean,
Speaker 1: I think the needs to and I think it's trying,
Speaker 1: for better or worse, to carve out a space that
Speaker 1: protects peaceful speech. But that doesn't open the door to
Speaker 1: armed groups marching in what looks like ordinary military formation,
Speaker 1: because when that happens, those people aren't really potentially dominating
Speaker 1: the streets, potentially either provoking violence or intimidating other people.
Speaker 1: And there you have the confluence of two different rights.
Speaker 1: You have a Second Amendment right to bear arms and
Speaker 1: a First Amendment right to speak and to associate. So
Speaker 1: in theurious sounds like what should be fine. If you
Speaker 1: can march peacefully, that's fine. If you can carry weapons peacefully,
Speaker 1: then that should be fine. But if you actually do
Speaker 1: both together, then at some point you cease to be
Speaker 1: a peaceful marcher and you actually become a militia that's
Speaker 1: challenging the authority of the police, and that I think
Speaker 1: the law does not protect. And the was trying to find,
Speaker 1: I think a way to to weigh in there. It's
Speaker 1: hard to the sell you because traditionally their position has
Speaker 1: been absolutists. They have gone the most extreme free speech
Speaker 1: positions possible. You know. You remember they actually supported what
Speaker 1: became the Supreme Courts holding in the Citizens United case,
Speaker 1: which maximize corporate free speech. So traditionally they've been absolutists.
Speaker 1: Here they're pulling back from that a little bit, probably
Speaker 1: in the wake of Charlotteville and other other recent events.
Speaker 1: But don't know what you're arguing is that basically, to
Speaker 1: almost avoid a situation where too many radicals, you know,
Speaker 1: contribute to destabilization, you just need a much bigger so
Speaker 1: you protect free speech, but you have a much bigger
Speaker 1: police force. Is that right, Yeah, you need a bigger
Speaker 1: police force. Sometimes you need to assign different groups different
Speaker 1: locations to march. In theory, it's great to be able
Speaker 1: to say, well, we can march wherever we want. But
Speaker 1: if you have a large group of anti fascist protesters
Speaker 1: in a large group of you know, not your white
Speaker 1: supremacist protesters, it's constitutionally perrinsipal to the police to say
Speaker 1: you're not marching right in front of each other. You
Speaker 1: have to be separated by you know, thus in such
Speaker 1: a distance, and we're gonna put this group of you here.
Speaker 1: We're gonna put the scoop of you there. And of
Speaker 1: course it's always controversial, and the police do that much
Speaker 1: in the way. It was controversial when the police isolated
Speaker 1: protesters at the Democratic and Republican national conventions in recent years,
Speaker 1: moving them away from the convention location. But the police
Speaker 1: are justified in specifying time, place, and manner of speech
Speaker 1: when it's necessary for safety and security. So you also
Speaker 1: need to keep people apart from each other. And last,
Speaker 1: but not least, the police have to be very well
Speaker 1: trained so that they know the difference between peaceful speaking
Speaker 1: and potentially violence provocation. You can't just expect police intuitively
Speaker 1: to be able to do that. They need to be
Speaker 1: trained in order to make sure that free speech is
Speaker 1: protected while class the order is preserved. No, always great
Speaker 1: to speak with you, Thank you very much being so
Speaker 1: generous with your time here on this Monday morning. Now
Speaker 1: a film and ne Felix Frankford, the professor of law
Speaker 1: at Harvard Law School, column is for Bloomberg View, writing
Speaker 1: prolifically and importantly for Bloomberg View. Do check out his columns.
Speaker 1: I'll tweet his latest on Joe or Pio. This is
Speaker 1: Bloomberg surveillance on Bloombergradio, David Gura and Francine Lack with
Speaker 1: Tom keene is off today m h now speaking in
Speaker 1: an interview with Bloomberg and Kathyen Hayes and Jackson Hall.
Speaker 1: Governor Krota said the BJS yield curving control program has
Speaker 1: been working quite well. That he was talking about the
Speaker 1: fact that he also needs to have more very accomgnative
Speaker 1: monetary policy. He warned that his inflation target remains distant
Speaker 1: and that the current pace of growth looks unsustainable. Here
Speaker 1: is Governor Kruder. Four percent grows is excellent, but we
Speaker 1: don't think four percent grows can be sustained. Around to
Speaker 1: pocent grows is likely, and that this amount of growth
Speaker 1: infringel rate to gradually crime up towards the two percent.
Speaker 1: That was Governor Kroda speaking to our Kathy Hayes over
Speaker 1: in Jackson Hole, Wyoming. Now, let's bring in Alice Rivlini
Speaker 1: is former FED Vice chair from our DC studios. Mr Ryvelin,
Speaker 1: thank you so much for joy in us today. What
Speaker 1: did you make of Jackson Hole? It was rather uneventful
Speaker 1: compared to previous you know, Jackson Hole, Wyoming forums, and
Speaker 1: yet we learned a little bit more about how they
Speaker 1: see risk, yes, and I thought we learned actually quite
Speaker 1: a lot. I thought that Janet Yellen's speech focused on
Speaker 1: exactly the right topic. She hardly mentioned meant monetary policy
Speaker 1: at all, which I thought was appropriate. She mentioned and
Speaker 1: discussed at considerable length the case for UH continued vigilance
Speaker 1: about instability in the financial markets, and particularly the risks
Speaker 1: of rolling back the Dodd Frank Act, which she quite
Speaker 1: persuasively pointed out has made our financial system a lot
Speaker 1: safer and less subject to the kind of turmoil that
Speaker 1: we are instant two thousand eight, Alice Rivelin, what is
Speaker 1: the one thing that actually Governor Croda has not said?
Speaker 1: I guess yet reading between the lines, he's worried about
Speaker 1: the FED, isn't he? Well, he may be worried about
Speaker 1: the FED, but I think he's more worried about the
Speaker 1: Japanese economy, which is UH persistently deflationary. That's been the
Speaker 1: same story for UH for many, many years, and uh uh,
Speaker 1: I think that has got to be his major concern. Alice,
Speaker 1: great to speak with you here on this this Monday morning.
Speaker 1: I wonder if we could shift our attention to Europe
Speaker 1: a little bit is what we heard from Mario, drawing
Speaker 1: you the president of the ECB. There was some speculation
Speaker 1: that he might try to job own the euro a
Speaker 1: little bit, talk it down. He didn't do that. What
Speaker 1: did you make of what what he had to say
Speaker 1: and what do you make of the situation he faces
Speaker 1: on the European continent right now? Well, he faces a
Speaker 1: more difficult situation, I think than than Janet Yellen does UH,
Speaker 1: in part because he doesn't have a cohesive country. He's
Speaker 1: got a whole group of economies that are UH not
Speaker 1: entirely in sync, and that's always very, very difficult. But
Speaker 1: I thought he, like Yellen, made the right speech for
Speaker 1: Jackson Hall, pointing out that the big threat was not
Speaker 1: from UH inflation, it was from the possibility of trade
Speaker 1: war or deteriorating UH regulatory cooperation among the major countries
Speaker 1: on the issue of of regulation. Will come back and
Speaker 1: talk a little bit more more about this, but just
Speaker 1: summarize stories, if you would, what what Yellen's thinking is
Speaker 1: on on bank regulation at this point. She's making a
Speaker 1: pretty forceful defense for some of the regulations have been implemented.
Speaker 1: But she also spoke of it as sort of a
Speaker 1: plastic thing, right that it's it's it's it's useful to
Speaker 1: reevaluate her to constantly evaluate the efficacy of regulations. Yes,
Speaker 1: and I think she's absolutely right about that. We put
Speaker 1: some much stronger regular sations in place after two thousand
Speaker 1: and eight. Uh, but uh, and they seem to be working,
Speaker 1: but we haven't tested them yet. And uh. What she
Speaker 1: was warning against was wholesale rolling back, although she did
Speaker 1: stress and she's right that you have to keep reevaluating regulations.
Speaker 1: There's no such thing as a permanent regulatory regime. You
Speaker 1: have to adjust, and particularly you have to make sure
Speaker 1: that the costs of the regulation to the financial sector
Speaker 1: isn't excessive. But she made that point. All right, Alice,
Speaker 1: thank you so much. Alice really in there. The former
Speaker 1: FED Vice chair stays with us. We'll be talking to
Speaker 1: her a little bit more about. I guess the possible
Speaker 1: currency war is what we made Also of the rest
Speaker 1: of the FMC members we talked to. We had two
Speaker 1: Federal Reserve officials talking to her, Michael McKee also taking
Speaker 1: opposite sides of I guess David, this central bank ongoing
Speaker 1: debate right about how you were bond to disappointingly low inflation.
Speaker 1: Of course, policy makers gathered in the at Jackson Hole
Speaker 1: at the annual symposium. We're pretty tame. Three years ago
Speaker 1: we had Mario Droggi saying, you know, he'll do whatever
Speaker 1: it takes and to actually put a number on the
Speaker 1: balance sheet. This time we're in a different move. We
Speaker 1: did hear from Kansas City Fed President Estra George saying
Speaker 1: that it will all depend on whether the economic data
Speaker 1: in the US will hold up, on whether there is
Speaker 1: another opportunity or not to raise interest rates again in
Speaker 1: two thousand and seventeen. So we'll talk more about Jackson
Speaker 1: Hole and we'll talk dollar dynamics. David Gurray in New
Speaker 1: York Francy Lackway in London were joined by Alice Rivlin
Speaker 1: or Bloomberg Studios in Washington, d C. She's former vice
Speaker 1: chair of the Federal Reserve, now a senior fellow at
Speaker 1: the Brookings Institution. And Alice, I hope I'm not telling
Speaker 1: tales out of school when I said, the last time
Speaker 1: I saw you in Washington, you said the media tends
Speaker 1: to focus too much on monetary policy and not enough
Speaker 1: on regulatory policies. So let's continue talking about it, if if,
Speaker 1: if we could hear we're looking at a FED that
Speaker 1: could be radically changed from a personnel perspective, and I
Speaker 1: wonder what that could pretend for for its regulatory responsibilities.
Speaker 1: Do you see them shifting here over these next a
Speaker 1: few months, a few years. Well, I think there's a
Speaker 1: risk that the administration and the Congress will roll back
Speaker 1: regulatory financial regulation more than I and Janet Yellen think
Speaker 1: is wise. That was the burden of her speech. Be
Speaker 1: very careful. It's the big threat to the stability of
Speaker 1: the US economy is that we have another two thousand
Speaker 1: and eight. We don't want that to happen. Uh, So
Speaker 1: be very careful about deregulation. Now. I'm not sure that
Speaker 1: the President and many of the Republican majority in Congress
Speaker 1: agree with that message, and they may try to roll
Speaker 1: back regulation the including putting a much more deregulatory person
Speaker 1: at at the FED. How much more regulatory person at
Speaker 1: the FED? I wonder, as we have this conversation about
Speaker 1: personnel who might lead the FED, who might be in
Speaker 1: these jobs, how much an academic background matters you have? One?
Speaker 1: Of course, Jennet Yellen has one. Ben Bernanki had one
Speaker 1: as well. There's there's speculation that the next appointing might
Speaker 1: not come from that background, might be somebody from the
Speaker 1: world of business with oh, just a b a degree
Speaker 1: from from Does that matter to you? Do you think
Speaker 1: that makes the difference whether or not somebody has the
Speaker 1: academic background. Uh? Not necessarily. It would depend who it was.
Speaker 1: The tradition of having a PhD in economics is UH
Speaker 1: is pretty strong at the FED. But market experience and
Speaker 1: financial sector experience is extremely important. Uh. The real criterion
Speaker 1: I would think is, UH, is this person really familiar
Speaker 1: with how the economy works and how markets work and
Speaker 1: committed both to a sensible monetary policy and UH to
Speaker 1: UH keeping us safe from another financial crisis? All right, Alice,
Speaker 1: we're beating around the bush here. It's Gary Cone the
Speaker 1: right person for FED. Oh, I'm not gonna do I'm
Speaker 1: not going to endorse very nice try Okay, But but
Speaker 1: would a former banker be the kind of profile that
Speaker 1: could be good for the FED? Well, it would depend
Speaker 1: who it was, But I think you could find somebody
Speaker 1: from the financial sector who would do a very good job.
Speaker 1: It doesn't have to be an academic PhD. Economist. Although
Speaker 1: I think we were extremely fortunate, uh in the crisis
Speaker 1: of two thousand and eight to have Ben Bernankee at
Speaker 1: the HELM, because not only was he a very highly
Speaker 1: qualified academic, but he was an expert on what they
Speaker 1: did wrong in the nineteen thirties and very determined not
Speaker 1: to do that again. We got changed change position here
Speaker 1: a little bit. Um. You know, I know that when
Speaker 1: there's a big storm like the one that we're seeing
Speaker 1: in Texas, the Federal Reserve is on alert. Of course,
Speaker 1: the Federals bears some responsibility for the banking system here
Speaker 1: in the US. Of course, what does the FED do
Speaker 1: when there's something like this, when people may have difficulty
Speaker 1: getting to banks or just banking normally? This is this
Speaker 1: is part of the Fed's responsibility as well. Oh absolutely,
Speaker 1: And the FED communicates with the banking and financial sector
Speaker 1: that it stands ready uh to help and that they
Speaker 1: shouldn't worry about liquidity. They should uh be as helpful
Speaker 1: to their clients as they possibly can be. Of course,
Speaker 1: we're the two time director of the Congressional Budget Office,
Speaker 1: and let me ask you a bit about sort of
Speaker 1: the challenges that lawmakers face when they get to Washington.
Speaker 1: Uh in just over I guess maybe a littless than
Speaker 1: the webs that just overweight, little less that a week
Speaker 1: is we're on the press fas of reaching September. Uh
Speaker 1: do do you do you foresee there being real difficulties
Speaker 1: here passing some sort of ending bill in time to
Speaker 1: avert a government shutdown. How worried are you about that?
Speaker 1: And of course about the reaching the dead ceiling and
Speaker 1: not seeing that raised in time to meet the government's obligations.
Speaker 1: I'm medium worried. I think cooler heads may prevail and
Speaker 1: we will probably get a short term continuing resolution as
Speaker 1: they call it, to keep the government funded past the
Speaker 1: end of the fiscal year so that they can then
Speaker 1: uh make some more serious decisions in November, perhaps even
Speaker 1: into December. That seems to me the most likely. I
Speaker 1: don't expect that we will have a government shut down,
Speaker 1: but we might. And the President is still threatening if
Speaker 1: he doesn't get his border wall to close down the government.
Speaker 1: I hope that doesn't happen on the death ceiling. I
Speaker 1: really hope that Secretary Venution and others can convince the
Speaker 1: Congress and the President that it would be just terribly
Speaker 1: stupid for Uh, the United States to even flirt with
Speaker 1: a debt crisis. We don't need to do that. We
Speaker 1: should raise the debt ceiling as much as is necessary
Speaker 1: to accommodate the spending and revenues that have already been voted.
Speaker 1: How did the FED look at this risk? We heard
Speaker 1: from billionaire head fund manager Rate Dalio that you know
Speaker 1: it's time to off float risk and this is mainly
Speaker 1: because of what's happening in Washington. Well, uh, yes, I
Speaker 1: mean the FED looks at it nervously as as we
Speaker 1: as we all do. But I don't think the FED
Speaker 1: has a real role. These are of fiscal matters to
Speaker 1: be decided between the President and the Congress as to uh,
Speaker 1: when we fund the government adequately and when we raised
Speaker 1: the dead ceiling. The FED can stand on the side
Speaker 1: and look nervous. But that's about all I can do. Right.
Speaker 1: But by looking nervous, would they be right for examply,
Speaker 1: for example, in delaying a hike because of this new
Speaker 1: politic uncertainty? Well they might, um, but the economy itself
Speaker 1: looks pretty strong, and uh, inflation, while not up to
Speaker 1: the two percent target, isn't doing isn't plummeting? Uh. So, Um,
Speaker 1: I think that will be the main things on their mind. Uh.
Speaker 1: They might be a little more cautious because of the
Speaker 1: turmoil and the Congress, but I would expect that mostly
Speaker 1: the conversation would be about is the economy strong enough
Speaker 1: for us to keep on the track that we'd like
Speaker 1: to be on, really get back to a more normal
Speaker 1: interest rate. You know, the FT hasn't been shy about
Speaker 1: saying it's not going to speculate what the federal government's
Speaker 1: going to do when it comes to tax reformer, fiscal policy,
Speaker 1: regulatory reform, all of that, but how much just to
Speaker 1: complicate things, the FET has taken some criticism for how
Speaker 1: it forecasts, how well it forecasts. Give us a sense
Speaker 1: of just the the complexity infused into that process. By
Speaker 1: having so much uncertainty in Washington right now, well they
Speaker 1: starting to have to take it into account. Uh. But um,
Speaker 1: that's a question without an answer really. Uh, the everybody
Speaker 1: is a little nervous that turmoil in Washington, or hurricanes
Speaker 1: on the Gulf Coast or other sources of uncertainty may
Speaker 1: may be there. But you make your best forecasts and
Speaker 1: stick and go with it. Just lastly, here does Washington
Speaker 1: is there more uncertain than there has been? Which are
Speaker 1: thinking about the death feeling again? You and I have
Speaker 1: talked about it, you know eight out of the nine
Speaker 1: last years, it feels like does this time feel different
Speaker 1: to you in Washington? Yes, I think it does feel different,
Speaker 1: and it's largely because we have a quite inexperienced and
Speaker 1: unpredictable president. We don't know what Donald Trump thinks about
Speaker 1: the debt ceiling or other things, and how much he
Speaker 1: is willing to risk chaos to get some of the
Speaker 1: things that he cares deeply about, like the border wall. Alice,
Speaker 1: great to speak with you always. Thank you very much
Speaker 1: being so generous with your time this morning. Alice Freeland,
Speaker 1: Senior fellow at the Brookings Institution, former vice chair the
Speaker 1: Fed Reserve. Because I said, two time Director of the
Speaker 1: Congressional Budget Office, joining us from studios in Washington, d C.
Speaker 1: This morning. This is Bloomberg Surveillance. David Garray in New York,
Speaker 1: Francy Lapwa in London. Tom Keane is off today. Big
Speaker 1: news that here in the U. S as well, we
Speaker 1: continue to watch what's unfolding in Texas and pleasure now
Speaker 1: to be joined by James Leewitt, who is a former
Speaker 1: director of FEMA. He joins us on our phone lines.
Speaker 1: Great to have you with us as all of this
Speaker 1: contends to unfold. As I say this, this terrible storm
Speaker 1: in Texas. What are you watching for when it comes
Speaker 1: to government response? In other words, how should we be
Speaker 1: assessing the degree which things are going apace? At Mr? Ware? Well,
Speaker 1: I think the you know, the President appointed Brock Long
Speaker 1: as administrator FEMA, who's a farmer state director of the
Speaker 1: Merchants Management whose is very experienced, very capable, and I
Speaker 1: think he'll be leading FEMA extremely well. And uh in
Speaker 1: all the eight years I was at FEMA and female
Speaker 1: employees are very dedicating about what they do, and so
Speaker 1: I think that will go well as supporting the state
Speaker 1: and local governments and that and I think the President
Speaker 1: has done everything right so far. You know, he made
Speaker 1: the Decorate disaster declaration Friday and um and that was
Speaker 1: very important for the state and locals to know that
Speaker 1: there's a lot of these costs go and reimbursable. And
Speaker 1: I think the trip that he's making down to Texas
Speaker 1: tomorrow is important just to show the people that the
Speaker 1: federal government is there behind them and will be there
Speaker 1: for the long haul. I think it would be important
Speaker 1: that he meet with the governor and local officials as
Speaker 1: much as he can without disrupting the response. But also
Speaker 1: I think it's important that he if he can, reach
Speaker 1: out into where shelter is and let those people know
Speaker 1: and give them hope, because right now, you know, they're devastated,
Speaker 1: They've lost everything they've worked for all their life, and
Speaker 1: this could come down as the costliest catastrophic event we've
Speaker 1: seen in the United States. Just understand what FEMA is
Speaker 1: doing at this point. As I said that, the storm
Speaker 1: is still raging, it's pouring rain across Houston the surrounding area.
Speaker 1: There's a there's a tremendous amount of flooding here. What
Speaker 1: what at this point is FEMA, UH and and all
Speaker 1: the groups that's working with What are they doing at
Speaker 1: this point. Well, primarily FEMA's role right now is to
Speaker 1: be responsive to state local government and what resources they
Speaker 1: request and the team you know as the full federal
Speaker 1: government behind them that they coordinate all those resources. So
Speaker 1: it's there right now and in the role of responding
Speaker 1: with those resources, supporting the state and local governments and
Speaker 1: what their needs are. And then after this that is
Speaker 1: the response is finished in lives have saved and you
Speaker 1: get into the recovery side of it, then FEMAL will
Speaker 1: take the more prominent role, particularly in the public assistant
Speaker 1: side as well as the individual assistant side and uh
Speaker 1: and so then you know, after they get all the
Speaker 1: assessments done, after this water goes down, and then what's
Speaker 1: going to be important is is what the governor going
Speaker 1: to ask for? You know, I would ask for reimbursable
Speaker 1: costs and be response for how long that takes, and
Speaker 1: then whatever the cost share will be to state and
Speaker 1: local governments after that, which could be or it could
Speaker 1: be SETI if I I would definitely ask for uh. Mr, Well,
Speaker 1: thank you very much for the time. I hope we
Speaker 1: can check in with you a little later this week.
Speaker 1: Is so we continue to watch the response to the
Speaker 1: tropical storm over Texas. Right now, it's Change le w
Speaker 1: former director of FEMA, joining us on our phone lines.
Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and
Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast
Speaker 1: platform you prefer. I'm on Twitter at Tom Keene. David
Speaker 1: Gura is at David Gura before the podcast. You can
Speaker 1: always catch us worldwide. I'm Bloomberg Radio.