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Speaker 2: Happy Friday, and thanks for being with us here at
Speaker 2: the threshold of the weekend on the fastest show in politics.
Speaker 2: We've got a lot to talk about today if you're
Speaker 2: just joining us. Donald Trump has left the bubble, stopping
Speaker 2: down in North Carolina just a short time ago, where
Speaker 2: he's surveying damage left by the hurricanes. Of course, asheville,
Speaker 2: we've talked so much about the reality changed by Hurricane Helene.
Speaker 2: And then it's on to California a little bit later
Speaker 2: on today. This will be in the evening hours East
Speaker 2: Coast time. Gavin Newsom will be greeting Donald Trump on
Speaker 2: the tarmac in LA and of course he's going to
Speaker 2: be surveying damage from wildfires, which just moments ago in
Speaker 2: North Carolina he again blamed on the valve as he
Speaker 2: calls it in northern California that he says is steering
Speaker 2: water into the Pacific, and he simply wants them to
Speaker 2: turn the water back on. As we've discussed on this program,
Speaker 2: it doesn't work that way. In efforts to save the
Speaker 2: two inch long delta smelt appear not to have much
Speaker 2: to do with what's happening with the response to these fires.
Speaker 2: The conversation around FEMA, though, is getting pretty interesting here.
Speaker 2: You remember everything said about FEMA in Asheville following the hurricanes,
Speaker 2: the miss and disinformation flames are being fanned here on
Speaker 2: this trip, and Donald Trump suggesting FEMA shouldn't have much
Speaker 2: of a role in the future, that it should go
Speaker 2: to the States. Here's what he said on the tarmac.
Speaker 3: Because WEBA just hasn't done the job, and we're looking
Speaker 3: at the whole concept of FEMA. I like, frankly, the
Speaker 3: concept when North Carolina gets hit, the governor takes care
Speaker 3: of it. When Florida gets hit, the governor takes care
Speaker 3: of it, meaning the state.
Speaker 4: Takes care of it.
Speaker 3: To have a group of people come in from an
Speaker 3: area that don't even know where they're going in order
Speaker 3: to solve immediately a problem is something that never worked
Speaker 3: for me.
Speaker 2: That's where we start our conversation now with Wendy Benjaminson
Speaker 2: in Washington. This is an interesting trip. Great to see it.
Speaker 2: By the way, I feel like it's been forever since
Speaker 2: you were on the broadcast. And boy, I think last
Speaker 2: time we spoke, Joe Biden was still the president. So
Speaker 2: consider that that long. That was like four days ago.
Speaker 2: Look the optics that surround a trip like this mean
Speaker 2: high stakes, right, potential risk, potential high reward for Donald Trump?
Speaker 2: How's he starting out today in North Carolina? What are
Speaker 2: we talking about with FEMA here? I didn't realize until
Speaker 2: recently this was even a very controversial agency, right.
Speaker 5: Well, I mean we've come a long way. I was
Speaker 5: just thinking about this since twenty years ago when George W.
Speaker 5: Bush put his arm around the FEMA administrator in New Orleans.
Speaker 5: It is that heck of a job, Brownie. The trouble is,
Speaker 5: Brownie didn't do a heck of a job in twenty
Speaker 5: years ago. And FEMA has always been underfunded, has always
Speaker 5: had problems getting on the ground and doing everything they're
Speaker 5: supposed to do. So to that point, okay, maybe you know,
Speaker 5: maybe they didn't do enough in Ashville, maybe they're not
Speaker 5: doing enough in California. However, this idea that it can
Speaker 5: just go to the states. I think is going to
Speaker 5: be met with a lot of resistance from both red
Speaker 5: state Republican and Democratic governors because it is one of those,
Speaker 5: if you remember the term unfunded mandates, where the federal
Speaker 5: government says, you, guys, take care of this, but we're
Speaker 5: not sending you any money to do it. A lot
Speaker 5: of Republican states have really, you know, lowered their taxes
Speaker 5: and they don't have the kind of revenue. So you know,
Speaker 5: in a state like California, which is rich maybe and
Speaker 5: what if a tornado hits Alabama, you know, are they
Speaker 5: really going to be able to fix restore themselves with
Speaker 5: only their budget. So that's the conundrum for Congress.
Speaker 2: Well, so there are a couple of things that play
Speaker 2: here today when you consider the remarks from Donald Trump
Speaker 2: questioning FEMA, blaming the Biden administration and for what he
Speaker 2: says was a no response, even though there was a
Speaker 2: robust response in North Carolina. We've been through that. But
Speaker 2: now also conditioning aid a couple of days ago, it
Speaker 2: was the debt limit. Put that together with maybe California
Speaker 2: wildfire relief. Now it's voter id. He says, this seemed
Speaker 2: to just jump out of the gates. This morning, California
Speaker 2: gets voter ID, then they get the money. Is that
Speaker 2: how it's going to go?
Speaker 5: Who knows, because, as you said, the goalpost keeps changing.
Speaker 5: What struck me in that moment there was interesting was
Speaker 5: a reporter in Ashville said to the President, are you
Speaker 5: going to condition the age in North Carolina? And he
Speaker 5: didn't answer, but he said, well, the people of North
Speaker 5: Carolina have been through so much, Yes they have, you know,
Speaker 5: they've been through ours, but so of the people of California.
Speaker 5: And apparently there is no talk of conditioning aid. He
Speaker 5: was even being told at this briefing how many people
Speaker 5: in affected counties in North Carolina voted for him. So,
Speaker 5: you know, is the question are you loyal to Donald Trump?
Speaker 5: Or is the question did your home? Yeah, burn to
Speaker 5: the ground or get destroyed by a waterfall?
Speaker 2: From our reporter on the ground by the way next
Speaker 2: stop about twenty minutes away, they're driving. He will speak
Speaker 2: and also meet with families. It'll be outside. They have
Speaker 2: a podium set up. It's likely that we'll hear from
Speaker 2: the President again in North Carolina during the broadcast. It's
Speaker 2: going to be in front of an RV. This is
Speaker 2: to consider the optics. As I mentioned the RV park
Speaker 2: next to a washed out house, it's going to look
Speaker 2: like North Carolina has had no help. Yeah, what are
Speaker 2: the optics that he's seeking here?
Speaker 5: Those are the optics that he's thinking that these are
Speaker 5: people who are suffering, that these are Trump voters who
Speaker 5: have been suffering. And I guess this is him being
Speaker 5: consoler in chief, because if he's saying the federal government's
Speaker 5: going to leave you on your own, then I don't
Speaker 5: know exactly what he's going to say. This house is
Speaker 5: going to be rebuilt, either what through private insurance or whatever.
Speaker 5: Of Course, he can't just wipe out a federal agency
Speaker 5: with the stroke of a pen, no matter how much
Speaker 5: Elon Musk might really want to do that, I believe.
Speaker 5: I'm not positive, but I believe it takes an Act
Speaker 5: of Congress. So that would mean.
Speaker 2: Much like creating one, much like creating I suppose.
Speaker 5: So you know, he's going to have to figure out
Speaker 5: some way to get Congress from states that are all
Speaker 5: being hit by natural disasters as the climate change is
Speaker 5: to agree to get rid of the one agency that
Speaker 5: can that at least tries to.
Speaker 2: Help you know, we talked about Joe Biden as consolar
Speaker 2: in chief all the time. That's what he was said
Speaker 2: to be good at. He would tend to show up
Speaker 2: with the first lady. By the way, Milania Trump is
Speaker 2: with him today. That's important, right, You can't meet with
Speaker 2: the families, I'm assuming without the first lady joining you,
Speaker 2: or at least that's probably the drive here. I've heard
Speaker 2: more references to paper towels today than I have since
Speaker 2: he went to Puerto Rico. He knows what people are
Speaker 2: talking about here. Does that affect his posture and dealing
Speaker 2: with people talking to reporters.
Speaker 5: I think it does, and I think we're seeing it today.
Speaker 5: He has not been overly glib. He has not been.
Speaker 5: I mean, he's he even you know Senator Adam Schiff,
Speaker 5: who was invited to go with him, but he was
Speaker 5: a leader of the resistance, you know, in the first term.
Speaker 5: He chose for scheduling.
Speaker 2: Conflex not to go.
Speaker 5: Yeah, he's got too many he's got to wash his air.
Speaker 5: He can't go to California with the president. I mean,
Speaker 5: and I think you know, Schiff is politically smart not
Speaker 5: to join him on that trip for his own political purposes.
Speaker 2: But yeah, I called him scum from the Oval office
Speaker 2: this week.
Speaker 5: Yeah, that's not the right, and so's he's decided.
Speaker 2: Gavin Newsom a different story, though. He will be on
Speaker 2: the tarmac, even though Donald Trump calls him scum and
Speaker 2: has blamed him for the fires. Right, but what's that
Speaker 2: work there? Though Gavin Newsom doesn't want to be seen
Speaker 2: as an obstructionist obviously, can they work together?
Speaker 5: I think they might try. I think when they all
Speaker 5: the cameras are off and you're talking about the second
Speaker 5: largest city in the United States being devastated by this,
Speaker 5: I think that two of them will probably work together.
Speaker 5: For a senator, it's less important he can say, you know,
Speaker 5: I'm not getting on the plane with you. Go just
Speaker 5: do it. But the governor has to make sure that
Speaker 5: money comes to the things and that the president sees
Speaker 5: this and all that. So he will probably put aside
Speaker 5: any personal animas, any irritation. I guess Trump will put
Speaker 5: aside his irritation perhaps, and we'll see what happens. We'll
Speaker 5: see what, you know, when he gets out there. It'll
Speaker 5: be interesting to see if Trump also moderates his tone
Speaker 5: about absolutely yeah, when he's in front of people and
Speaker 5: including his own supporters like Mel Gibson and actors like
Speaker 5: that who lost their homes.
Speaker 2: I forgot about the Hollywood ambassadors. How quick this so
Speaker 2: much that you alone?
Speaker 5: And yeah, John Royd, I think.
Speaker 2: Sure, John Voyd. You know this is the part of
Speaker 2: the conversation where I asked Wendy to pull up to
Speaker 2: about thirty thousand feet because this is one of those
Speaker 2: weeks that calls for it. As I just mentioned, Joe
Speaker 2: Biden was still the president on Monday morning. So much
Speaker 2: has happened. People talk about the fire hose, the news
Speaker 2: cycle flooding the zone. How would you describe this week
Speaker 2: and the ground that shifted under Washington's feet?
Speaker 5: It's insane. I actually yesterday said something to a reporter
Speaker 5: in the newsroom. I said, oh, thanks for helping me
Speaker 5: out on Sunday with some story, and he goes, Sunday,
Speaker 5: wasn't that like a year ago? I mean, the idea
Speaker 5: that it was five days ago just wasn't computing. I
Speaker 5: think we all are going to get used to this
Speaker 5: pace again. Trump will probably also begin to calm down
Speaker 5: and just get into governing after he does this. You know,
Speaker 5: he wants to run shock and awe this way right,
Speaker 5: shock and awe, But I think we are. We all
Speaker 5: have to get used to and why we all, I
Speaker 5: don't mean journalists, I mean America and the world has
Speaker 5: to get used to the fact that things are going
Speaker 5: to come out of left field at weird times. Biden
Speaker 5: ran a nine to five presidency and I think that
Speaker 5: and we might have gotten something similar with Kamala Harris.
Speaker 5: But Trump operates on his own schedule, on his own timeframe,
Speaker 5: often intradicting his press secretary while she's at the podium.
Speaker 5: Hard to see that again.
Speaker 2: Are we going to get briefings? By the way we are?
Speaker 2: What do we know about this? Will there be daily briefings?
Speaker 5: So that's that's tool about Jaily But I know Caroline
Speaker 5: love it. The new press secretary has done a couple
Speaker 5: I think, and you know she probably won't today because
Speaker 5: they're traveling, but I think she will do briefings. The
Speaker 5: trouble is that for her predecessor was that Trump would
Speaker 5: would in those days tweet right the opposite of what
Speaker 5: she was saying, and the.
Speaker 2: Reporters are reading that to the or he'll just wall
Speaker 2: to the room and take over the briefing, which I suppose.
Speaker 2: But that'll happen from time to time around here. I
Speaker 2: find it interesting editor's news organizations, people writing op eds
Speaker 2: to say it's going to be different, that we're not
Speaker 2: taking the bait every time, not every headline. We're not
Speaker 2: going to stop down. We're going to be discerning. And
Speaker 2: I'll tell you what none of them have actually done
Speaker 2: it yet, is this is going to take some getting
Speaker 2: used to. That's why we have Bloomberg though, because we
Speaker 2: don't do it quite the same way as the other networks.
Speaker 2: It's great to have you back. Wendy Benjaminson with US
Speaker 2: Live in Washington on the first week of Donald Trump's
Speaker 2: new presidency.
Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch
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Speaker 6: We just heard from President Donald Trump on his visit
Speaker 6: to North Carolina alongside families affected by Hurricane Helen, once
Speaker 6: again talking about FEMA federal emergency response, of course, suggesting
Speaker 6: that if it were up to him, it would be
Speaker 6: eliminated entirely. As we'd already heard him say earlier today,
Speaker 6: he thinks this should be up to the states. It
Speaker 6: is unclear, though, Joe, how exactly that would work, considering
Speaker 6: states don't kind of have the kind of emergency personnel
Speaker 6: readily available, which is a lot of what FEMA provides,
Speaker 6: let alone questions around resources for emergency response. And once again,
Speaker 6: of course, we heard him criticizing what FEMA did during
Speaker 6: the Biden administration in response to Hurricane Helene. Although he
Speaker 6: has repeated some misinformation about what was and was not
Speaker 6: available during that immediate aftermath.
Speaker 2: That's correct, including the fact that Joe Biden did visit
Speaker 2: North Carolina. Donald Trump said he did not, And we
Speaker 2: know that there were thousands of FEMA workers who were
Speaker 2: staying up all night working in extremely dangerous conditions following
Speaker 2: those storms in North Carolina. The Asheville area, western North
Speaker 2: Carolina into the hills is something we talked about for weeks, Kaylee.
Speaker 2: There was an enormous amount of misinformation online that actually
Speaker 2: led to some FEMA workers being attacked or being blocked
Speaker 2: from getting into areas where they were trying to help people.
Speaker 2: Donald Trump leaving this particular stop in North Carolina. They're
Speaker 2: going to continue on and we'll be following his travels
Speaker 2: throughout the day, not only in North Carolina, but also
Speaker 2: in California where Kayley. The matter of climate is something
Speaker 2: that's been talked about a lot with regard to these wildfires,
Speaker 2: as Donald Trump blames a valve that he says exists
Speaker 2: somewhere in northern California that he says Gavin Newsom used
Speaker 2: to turn the water off in La.
Speaker 6: And of course authorities in California deny the existence of
Speaker 6: such a valve. There is no factual evidence that that
Speaker 6: is what has happened to here. Buy and large authorities
Speaker 6: say this is an infrastructure problem in that the municipal
Speaker 6: infrastructure and around Los Angeles simply was not designed to
Speaker 6: have the kind of waterflow and pressure to fight fires
Speaker 6: with hurricane force winds the Santa Anto wins essentially blowing
Speaker 6: them around. It was just a hard thing to fight
Speaker 6: all of it.
Speaker 2: Though.
Speaker 6: To your point, though, whether it's the hurricanes in North
Speaker 6: Carolina and mountainous regions that usually aren't experiencing the impact
Speaker 6: to as great a degree, two wildfires like what we're
Speaker 6: seeing take place now on the West Coast. All of
Speaker 6: it does speak to climate oriented events that the US
Speaker 6: finds itself having to respond to. So on that note,
Speaker 6: we turned now to Gina McCarthy. She's former White House
Speaker 6: National Climate Advisor and also former administrator of the EPA. Gina,
Speaker 6: welcome back to Balance of Power here on Bloomberg TV
Speaker 6: and Radio. We appreciate your time as we consider these
Speaker 6: events on both the East and West coast. Is the
Speaker 6: common denominator here a changing climate with no sign that
Speaker 6: you should not anticipate events of this scale and potentially
Speaker 6: as damaging as we have seen in the future.
Speaker 7: Well, first of all, thanks for letting me be here
Speaker 7: and absolutely what you're seeing here, both in North Carolina
Speaker 7: and California our climate impacts. What you're seeing here is
Speaker 7: the threat to people everywhere. And I have to say
Speaker 7: that after listening to some of the remarks by the President,
Speaker 7: I'm not sure how to feel better and more confident
Speaker 7: about the federal government jumping in and making sure when
Speaker 7: we see climate disasters like this, we aren't running towards
Speaker 7: folks making sure that they can get the safety and
Speaker 7: security that they need. So my hope is that over
Speaker 7: time the President will learn that FEMA is a great agency.
Speaker 7: It stepped in in North Carolina. Everybody is on board
Speaker 7: to fight the fires in Los Angeles. So before we
Speaker 7: make any of these issues political, we ought to make
Speaker 7: sure that we're protecting peopleople in communities.
Speaker 2: First. Donald Trump's going to touch down in California a
Speaker 2: little bit later on. We understand the Gavin Newsom will
Speaker 2: meet him on the tarmac, having been blamed by Donald
Speaker 2: Trump for these fires. I just wondered if you could
Speaker 2: speak to the situation involving We've heard a lot about
Speaker 2: the valve and the delta smelt from Donald Trump. Tell
Speaker 2: us in your view, why Los Angeles is burning and
Speaker 2: why these fires have been so hard to fight.
Speaker 7: Well, we've seen, as you indicated earlier, we've seen some
Speaker 7: tremendous wind one hundred mile an hour winds. We're seeing
Speaker 7: a basically two months of literally no rain in southern California.
Speaker 7: We're seeing challenges that we've never seen before in terms
Speaker 7: of the drought that's hitting that area, which means it
Speaker 7: was a tinder box. It was ready to go, and
Speaker 7: with those fires it's been carrying, fueling it consistently and
Speaker 7: now refueling it again, so we have to recognize that
Speaker 7: this is not about pointing fingers. It's about recognizing that
Speaker 7: in the challenge of climate change, you're going to see
Speaker 7: these kind of disasters hitting because the weather's not the
Speaker 7: same anymore. We are talking about impacts that we need
Speaker 7: to face and respond to and be prepared for.
Speaker 2: Well.
Speaker 6: In that response, in part is mitigation and adaptation, right,
Speaker 6: trying to work with a changing environment so that you
Speaker 6: can best avoid things like this to the extent that
Speaker 6: we can brace against Mother Nature. Gina and I do
Speaker 6: wonder as California is creasing a lot of criticism, perhaps
Speaker 6: unwarranted in some instances.
Speaker 8: It comes to things like.
Speaker 6: Waterflow and supply and this valve and the delta smelt
Speaker 6: as Joe has referred to you. But are there things
Speaker 6: California should have been doing from a mitigation aspect that
Speaker 6: if we're talking about conditions on aid, maybe should be
Speaker 6: included in those conditions.
Speaker 8: How could it be handled better?
Speaker 7: Well, we have seedfires consistently in this area, and I
Speaker 7: think California does it's best to try to respond to this.
Speaker 7: But look, every community is at risk as a result
Speaker 7: of climate impacts, so we do have to work together
Speaker 7: not pointing at fingers, but figuring out how we can
Speaker 7: continue to move forward in the face of a president
Speaker 7: that doesn't acknowledge that climate change exists. So I think
Speaker 7: it's really important that we move together, that we maintain
Speaker 7: our relationship with the international community, even though that the
Speaker 7: Paris Agreement has now been avoided again by President Trump.
Speaker 7: We are working with Mike Bloomberg and others to make
Speaker 7: sure that we still maintain a vital role internationally. But
Speaker 7: we also have to recognize that governors and mayors and
Speaker 7: business leaders and institutions all have to step up now
Speaker 7: they know the challenges facing and we have to make
Speaker 7: sure that we continue to invest in our communities in
Speaker 7: a way that's moving forward with clean energy and not
Speaker 7: making the climate worse by continuing to advance oil and gas,
Speaker 7: which is ultimately the main reason why we are having
Speaker 7: the climate challenges we're seeing today.
Speaker 2: Gin, I want to ask you about some of the
Speaker 2: things that we've seen take place this week since Donald
Speaker 2: Trump took office. We saw a flurry of executive actions,
Speaker 2: starting of course, on day one, as he promised. I'm
Speaker 2: looking at one of them right now, called Unleashing American Energy.
Speaker 2: It's date of the twentieth of January. This executive order
Speaker 2: disbands the Interagency Working Group on the Social Cost of
Speaker 2: greenhouse Gases that Joe Biden helped to establish in twenty
Speaker 2: twenty one. It excludes the work of this group as well.
Speaker 2: To this point from government policy, what do you make
Speaker 2: of the reversals of some of the work that you
Speaker 2: were involved in in the Biden administryation and what will
Speaker 2: be the impact?
Speaker 7: Well, you know, I think one of the most important
Speaker 7: things to remember, and it's pretty clear that they're trying
Speaker 7: to reduce the impact of any of the efforts underway
Speaker 7: to address climate change and to move towards clean energy.
Speaker 7: But what's I think important for the American public to
Speaker 7: understand is that we have seven hundred and fifty plus
Speaker 7: clean energy projects moving forward in the United States. Now
Speaker 7: we have already moved forward with four hundred thousand new
Speaker 7: clean energy jobs. The American people want clean energy. It's
Speaker 7: saving their money, it's keeping their air cleaner, it's keeping
Speaker 7: them safe and more secure. And remember, half of those
Speaker 7: projects are in Republican districts. So now we have Republican
Speaker 7: congressmen standing up saying we don't want to dismantle all
Speaker 7: of the work that's been done before. So it's really
Speaker 7: important for us to remember, rather than continuing to fight
Speaker 7: about everything, let's look at what is already in our hands.
Speaker 7: The eighty four percent of money that's already gone to
Speaker 7: cities and states and Great America is all in colleagues,
Speaker 7: governors and mayors who are going to stand up and
Speaker 7: talk about the real things happening in the world and
Speaker 7: how we can continue to move forward on clean energy,
Speaker 7: because that's the challenge that Donald Trump faces. Fossil fuels
Speaker 7: are expensive, clean energy is cheap. That's what the American
Speaker 7: people need to know and understand, so we can begin
Speaker 7: to get over the hump and work together to move
Speaker 7: forward to make our country work the way it's supposed to.
Speaker 6: Well, Gina, as you talk about the resources that are
Speaker 6: needed here, we should not. As you mentioned earlier, some
Speaker 6: of those resources have in fact come from Michael R. Bloomberg,
Speaker 6: who is the founder and majority owner of Bloomberg LP,
Speaker 6: which is the owner of this network. Before we let
Speaker 6: you go, Gena, obviously we all have our eyes on
Speaker 6: the Senate as a number of Donald Trump's cabinet nominees
Speaker 6: are teed up for confirmation votes that includes Lee Zelden,
Speaker 6: who he is tapped for your old job running the EPA.
Speaker 6: What would your advice to mister Zelden, B.
Speaker 7: Well, I think my advice to him would be to
Speaker 7: take a deep breath when you get there. EPA is
Speaker 7: a terrific agency. Take a look at what they do
Speaker 7: from a science perspective. Get you an understanding of what's
Speaker 7: going on across the United States, where the environmental challenges are,
Speaker 7: and how he can work together, even within this administration,
Speaker 7: to make sure that these layers are focused on protecting
Speaker 7: the American public. After all, that is the EPA's role.
Speaker 7: We are there to protect our environment and our well
Speaker 7: being and bring safer communities to the table. And I
Speaker 7: hope that he'll have the wherewithal to give it a
Speaker 7: little bit of time, understand that agency and utilize them
Speaker 7: as some of the best, most professional scientists and policy
Speaker 7: people that any agency has in the United States.
Speaker 4: So beyond.
Speaker 2: With us from the Paradise of Jamaica plane, Gina McCarthy.
Speaker 2: It's great to see Gina. Thank you and come back
Speaker 2: and see us soon here on Bloomberg TV and Radio.
Speaker 2: Not just formerly EPA, former White House National Climate Advisor.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
Speaker 1: us live weekdays at noon and five pm Eastern on
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Speaker 1: us live on YouTube.
Speaker 6: Round out the trading week and round out what has
Speaker 6: been an incredibly long week here in Washington, and of
Speaker 6: course began on Monday with the inauguration of Donald Trump.
Speaker 8: Who is now ending his week on the move.
Speaker 6: Right now as we speak, he's heading back to the
Speaker 6: airport in Ashville, North Carolina, where he'll take off for
Speaker 6: Los Angeles to be the damage from wildfires. He'll be
Speaker 6: spending his weekend traveling. You know who won't be traveling
Speaker 6: this weekend, though, Joe. Members of the United States Senate
Speaker 6: he are going to be kept in town, we understand,
Speaker 6: to vote on Donald Trump's Countinet nominations beginning tonight, relatively
Speaker 6: late tonight, nine pm Eastern time, the expected confirmation vote
Speaker 6: for Defense Secretary nominee Pete Hegseth.
Speaker 2: Yeah. Lawmakers in the House left town, even though apparently
Speaker 2: the leadership wanted them to hang out for the March
Speaker 2: for Life, which is something else that's taking place today
Speaker 2: in Washington as we speak. This is an annual fifty
Speaker 2: second as a matter of fact. But senators have no choice.
Speaker 2: They could be voting for Pete Hegseth around nine or
Speaker 2: ten o'clock tonight, depending on how things go, and it looks
Speaker 2: like they could roll straight through the weekend. Remembering John
Speaker 2: Thune wants everybody in five days a week. Yep, no
Speaker 2: days off.
Speaker 8: He's playing hardball with the schedule.
Speaker 2: Five days of the Senate is nothing sacred. We reassembled
Speaker 2: our panel. Rick Davis and Jeanie Shanzino are with us
Speaker 2: on the Friday edition of Balance of Power. He is,
Speaker 2: of course Republican strategist partner Stone Court Capital. She's democratic
Speaker 2: analyst and political science professor at Iona University. Ricky spent
Speaker 2: enough time in the Senate to know how outrageous this
Speaker 2: whole idea must be seriousness, Pete hegg Zeth looks to
Speaker 2: have the votes. Will he be Defense Secretary by the end.
Speaker 9: Of the day, Yeah, very well, could be certainly by midnight.
Speaker 9: You know, there was a test vote yesterday that you know,
Speaker 9: called Clochar on this nomination to bring to the floor,
Speaker 9: and he lost two Republicans. He can lose to one
Speaker 9: war and still become secretary, but if he loses another
Speaker 9: fourth vote, that ends his nomination.
Speaker 2: And it is interesting.
Speaker 9: I mean, Donald Trump today has said repeatedly that he
Speaker 9: wasn't counting on Mitch McConnell to vote for Hegsittt, although
Speaker 9: McConnell supported the cloture vote, So.
Speaker 2: I don't know.
Speaker 9: I mean, it will be interesting to see if they
Speaker 9: have to use the vice president to break a tie,
Speaker 9: if Mitch McConnell joins Collins and Markowski in opposing heg Sath.
Speaker 2: You know that's what we're talking about here.
Speaker 6: Right jab in the motor kid yep, having to cast
Speaker 6: a tie breaking vote knowing that the others we were watching,
Speaker 6: Senators Young and Ernst, Joni ERNs of course, the female
Speaker 6: combat veteran who now res Iowa, and the Senate having.
Speaker 8: Said they're still standing by Pete Hegseth.
Speaker 6: Which makes the question, Genie, if all of this does
Speaker 6: feel inevitable, if Democrats do know heg Seth ultimately is
Speaker 6: likely to get confirmed, why we're still seeing the kind
Speaker 6: of slow walking of the procedure. Why not just let
Speaker 6: it be fast tracked and get it all done with
Speaker 6: instead of having to do these hours of debate and
Speaker 6: stay the weekend. What's really the point if they can't
Speaker 6: stop the confirmation.
Speaker 4: Yeah, you know, I don't think they want to make
Speaker 4: it easy for the Republicans to get this through, and
Speaker 4: they're certainly not going to do that. And I think
Speaker 4: they do have some legitimate frustrations about these FBI background checks.
Speaker 4: It looks now like Tillis may support and I'm saying
Speaker 4: may because we don't know heg Seth, and he has
Speaker 4: said had he gotten different information from those background checks,
Speaker 4: he may not be there for heg Seth. And so,
Speaker 4: you know, I think there is frustration on the part
Speaker 4: of Democrats and some Republicans like Collins and Murkowski, who
Speaker 4: feel that they simply didn't get the information they needed.
Speaker 4: The reality is, even if heg Seth is confirmed, and
Speaker 4: it looks like he will be tonight, it'll be the
Speaker 4: by the smallest margin, or one of the smallest margins
Speaker 4: in history for a defense secretary. These are normally bipartisan
Speaker 4: level votes, strong bipartisan support, something like we saw with
Speaker 4: Marco Rubio, and he's likely not going to get that,
Speaker 4: and that I think sets him up for a very
Speaker 4: very tough go of it as Defense Secretary, which again
Speaker 4: he likely will be by tonight nine or ten o'clock.
Speaker 2: Well, the national Security team is taking shape here John
Speaker 2: Ratcliffe now CIA director. That vote was seventy four twenty five,
Speaker 2: not too bad. In next week we've got a doozy
Speaker 2: all in one day, Cash Betel, FBI, Tulsea Gabbard right DNI,
Speaker 2: and then we've got RFK Junior obviously not part of
Speaker 2: the National Security team. When we think about Pattell and Gabbard, though, Rick,
Speaker 2: this is going to be a heck of a day
Speaker 2: following all of these UH, these hearings that are taking
Speaker 2: place at one at once. Tulsea Gabbert seems to be
Speaker 2: the one at most risk of not clearing committee or
Speaker 2: not being confirmed on the floor. How do you see it? Yeah,
Speaker 2: I think you're right.
Speaker 9: Both Tulci Gabert and and Cash Pateel have some headwinds.
Speaker 9: Republican centers have questioned their fitness for the for the
Speaker 9: posts and UH and Tulci Gabbert has not seemingly been
Speaker 9: able to clear some of the hurdles around things like
Speaker 9: visiting the head of Syria while she was a congressman
Speaker 9: and and and issues related to her background. So yes,
Speaker 9: there's going to be some debate around these during their hearing.
Speaker 9: I have no doubt Democrats will launch a full scale
Speaker 9: assault on both these individuals, uh and and And we'll
Speaker 9: see how that shakes out. I mean, one of the
Speaker 9: things that is just a parlor game in the United
Speaker 9: States Senate. But but assuming heg sith clears his way
Speaker 9: to the nomination tonight, with the floor vote scheduled later
Speaker 9: this evening, does that mean that they're looking for a
Speaker 9: scalp you around the nominations of Gabbert and Cash Pattel.
Speaker 2: So if he goes down and.
Speaker 9: For whatever reason doesn't make the cut tonight, does that
Speaker 9: make actually their ascension to their posts easier. It's a
Speaker 9: parlor game, has no real relevance in fact, but it
Speaker 9: is what happens in the halls of the Senate during periods.
Speaker 2: Of time like this.
Speaker 6: Well and Genie, what we've seen so far with a
Speaker 6: lot of these confirmation hearings is a pretty partisan split,
Speaker 6: if you will.
Speaker 8: In the line of questioning.
Speaker 6: Democrats are going really hard after these nominees, Republicans less.
Speaker 6: So that certainly was the case in the heg Seth hearing,
Speaker 6: but others too. I do wonder if you think it
Speaker 6: will be as partisan though, when it comes to these
Speaker 6: next individuals we're talking about RFK Junior, who conservatives have
Speaker 6: a problem with them things like abortion, Tulcy Gabbard, who
Speaker 6: national security hawks have concerns about. Is this actually going
Speaker 6: to look like everybody's singing from the same hymn book
Speaker 6: at least a little bit?
Speaker 4: It might be we might see some strange bedfellows. You know,
Speaker 4: just as an example the issue with RFK Junior, Do
Speaker 4: we see Republicans, for instance, who don't like his stance
Speaker 4: on abortion line up with some Democrats? Do we see
Speaker 4: Democrats who really do like some of what he has
Speaker 4: said about issues surrounding food safety and other things line
Speaker 4: up with Republicans? So we could in some of these
Speaker 4: see some really strange bedfellows. I'm really looking out for
Speaker 4: cash Ptel's hearing. I think that's going to be fascinating.
Speaker 4: I wouldn't be surprised if Democrats come in with big
Speaker 4: poster boards of his children's book, which has really a
Speaker 4: lot in it that people may be surprised to learn about.
Speaker 4: So some of this is going to be Democrats and
Speaker 4: any Republicans who opposed these folks, using this time to
Speaker 4: get the message out about who indeed is for a
Speaker 4: vote and letting the American people get more knowledge about
Speaker 4: who these people are. But I still think the most
Speaker 4: vulnerable here is going to be Tulsi Gabbert. She is
Speaker 4: vulnerable from both sides of the aisle at this point.
Speaker 2: Rick, You've prepared a number of elected officials, members of
Speaker 2: the military, and others for hearings like these, for very
Speaker 2: difficult conversations that could involve very sensitive information. I wonder
Speaker 2: how much the strategy will be trying to get to
Speaker 2: these issues in opening remarks to try to get them
Speaker 2: off the table. If you're RFK Junior, do you address
Speaker 2: the polio vaccine? Do you say I'm going to allow
Speaker 2: you to have GLP ones? If you're Tulsi Gabberd, do
Speaker 2: you have Fizis seven oats who in your opening remarks
Speaker 2: to try to disarm the questions that are coming.
Speaker 9: Yeah, I think that with Kennedy, especially related to some
Speaker 9: of these social issues and especially around abortion, he'll try
Speaker 9: to knock that down and the Republicans will will basically
Speaker 9: hold a colloquy with him, it won't be more like
Speaker 9: Q and A, but more like a conversation, and they'll say, well,
Speaker 9: of course you wouldn't be for you know, federal funds
Speaker 9: being spent on abortions, and he'll say, yes, of course
Speaker 9: that would be wrong, you know, uttering the policy of
Speaker 9: the Trump administration, and then you know, he'll just revert
Speaker 9: back to that conversation every time he gets hit by
Speaker 9: the Democrats. I would say, little trickier for Gabbert on
Speaker 9: the national security issues. So there are Republicans who have
Speaker 9: issues with the FISA system and could actually share some
Speaker 9: of her concerns with this, and and Democrats ironically would
Speaker 9: potentially be more bullish on some of these issues than
Speaker 9: even some of their Republican counterparts or certainly Tulci Gabbert.
Speaker 9: So I would watch that one as a much more
Speaker 9: of a mixed bag, because I think that the issues
Speaker 9: around surveys are much less partisan and much more open
Speaker 9: to how you view the appropriate role in the United
Speaker 9: States government spying on its own citizens. And that's always
Speaker 9: been a hot button issue in the Senate, and I
Speaker 9: think one that you'll see rise up in the conversations
Speaker 9: around her nomination.
Speaker 6: Finally, Genie as we consider those who have been nominated
Speaker 6: four roles in this cabinet. I was struck by the
Speaker 6: ethics disclosures today that were released for Howard Lutnik, who
Speaker 6: has been tapped to be the Commerce Secretary, revealing he
Speaker 6: has roles and at least eight hundred legal entities and
Speaker 6: net worth of north of two billion dollars. Obviously, he
Speaker 6: has pretty complicated financials that somehow need to be dealt
Speaker 6: with here if he is to take this role. Does
Speaker 6: any of it really matter, especially considering other folks who
Speaker 6: have had roles in the first Trump administration and potentially
Speaker 6: this one too.
Speaker 4: It absolutely matters. And this is something on both sides
Speaker 4: of the aisle that has long been problematic. I don't
Speaker 4: suspect we are going to see a resolution to this,
Speaker 4: but we do have to figure out a way in
Speaker 4: the US system to ensure that people that are serving
Speaker 4: the government are able to do so without being tied
Speaker 4: to businesses and other organizations that leave people wondering where
Speaker 4: their loyalties really lie. And of course it stretches just
Speaker 4: beyond the individual, which is one of the toughest things.
Speaker 4: It stretches to their spouses, It stresses to family members.
Speaker 4: We see this both to with people appointed to the
Speaker 4: cabinet others in the White House. And again it is
Speaker 4: not just on the Republican side, it's on the Democratic
Speaker 4: side as well, and it's in Congress. But Congress then
Speaker 4: would have to make take steps to do some ethics reform,
Speaker 4: and we haven't seen them likely to move in that direction.
Speaker 4: So very very troubling for those of us who want
Speaker 4: a ethical system in which fairness and transparency is number
Speaker 4: one our minds.
Speaker 6: All right, Jeanie Shanzeno and Rick Davis, our signature political panel.
Speaker 6: They'll be back for more in the late edition of
Speaker 6: Balance of Power coming up in the five o'clock eastern hour. Meantime,
Speaker 6: we still have more ahead in this early edition. Up next,
Speaker 6: we're going to take a closer look at Trump's executive
Speaker 6: orders yesterday around artificial intelligence. So stick with us right
Speaker 6: here on Bloomberg TV and radio.
Speaker 1: You're listening to the Bloomberg Balance of Power podcasts. Catch
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Speaker 2: I'm Joe Matthew alongside Kaylee Lines in Washington and earlier
Speaker 2: this week, Kayley to think that it was all one
Speaker 2: week kind of has us juggling the AI executive order. Yes,
Speaker 2: that was also this.
Speaker 8: Week, it was yesterday.
Speaker 2: That was yesterday. It was the day earlier. He appeared
Speaker 2: with Larry Ellison and Sam Alton. Right, I'm trying to
Speaker 2: keep the day straight in my head. Of course, artificial
Speaker 2: intelligence driving the market and driving the conversation here in
Speaker 2: Washington with a new president seems eager to not only
Speaker 2: own the space, but take the guardrails off of AI
Speaker 2: the way Joe Biden had wanted them.
Speaker 6: Yeah, we should remember it was at the beginning of
Speaker 6: this week, on Monday, Inauguration Day, when he signed a
Speaker 6: series of executive orders, one of them being the repeal
Speaker 6: of seventy eight executive actions under the Biden administration, inclusive
Speaker 6: of the sweeping AI executive order that Biden had signed
Speaker 6: talking about safety and transparency guidelines, creating a group basically
Speaker 6: within the Department of Commerce to think about voluntary guidelines
Speaker 6: that people could subject themselves to, and it wasn't clear
Speaker 6: what was going to replace what was repealed.
Speaker 8: Then we got the executive order.
Speaker 6: Yesterday, at least one of them, which calls for an
Speaker 6: interagency group to craft a new policy within six months,
Speaker 6: intended not for safeguarding and that kind of thing, but
Speaker 6: to ensure US dominance in AI.
Speaker 2: Back to animal spirits, I guess I suppose if you're
Speaker 2: hanging out with Larry us Though and Sam Altman. The
Speaker 2: investment from SoftBank was one hundred billion. They say it'll
Speaker 2: get up to five hundred billion by the time this
Speaker 2: project is done.
Speaker 6: So here we go, yes, Stargate, although Elon Musks has
Speaker 6: some doubts about whether or not that funding is there.
Speaker 6: It's a fight that's playing out in public, but we'll
Speaker 6: save that for another time. In the meantime, we really
Speaker 6: do want to talk about what this technology development is
Speaker 6: going to look like under this administration and turn to
Speaker 6: an expert in that arena. Matt Pearl is here with
Speaker 6: us in our Washington, d C.
Speaker 8: Studio.
Speaker 6: He's director of the CSIS Strategic Technologies Program, also former
Speaker 6: director for Emerging Technologies at the National Security Council. Thanks
Speaker 6: for being here on Bloomberg TV and Radio. I don't
Speaker 6: know if you've had a chance to look at these
Speaker 6: executive orders in greater detail. But essentially, how do you
Speaker 6: read the way this administration is going to be approaching AI?
Speaker 8: How regulated will it be?
Speaker 10: So I think that this administration is not going to
Speaker 10: be interested in examining models and looking at specific details
Speaker 10: that these companies are doing. I think they're looking to
Speaker 10: power them. I think it's going to be a combination
Speaker 10: of if there are ways that they can use tariffs
Speaker 10: that are helpful, if there are things that they can
Speaker 10: do in terms of further deregulation, and I think tax
Speaker 10: credits as well. And I think they're going to try
Speaker 10: to support it and bring it along and instead of
Speaker 10: trying to regulate it.
Speaker 2: It's not like there's a lack of money being invested
Speaker 2: in this space. When you look at the capex from
Speaker 2: the hyperscalers, it's like its own country here in Meda.
Speaker 2: Today's talking about a sixty billion dollar investment. It can
Speaker 2: go on down the line. What does this unlock when
Speaker 2: you talk about regulations or investment. Does this hasten the
Speaker 2: end game when it comes to AI.
Speaker 10: It remains to be seen. Because I think that Xijing
Speaker 10: Ping is all in on this and I think the
Speaker 10: scale of the investments, you know, when you look at
Speaker 10: what they've done in telecom, for instance, where they've spent
Speaker 10: hundreds of billions of dollars on an industry that's not
Speaker 10: particularly profitable and in some ways is not as important.
Speaker 10: I think the scale of the investment that we're going
Speaker 10: to see there needs to be matched in the US,
Speaker 10: and that's going.
Speaker 2: To really folding data centers on the scale that we are.
Speaker 10: I think they have the ambitions to and I think
Speaker 10: that Juawei among others, are really scaling up to do
Speaker 10: that at a frightening rate, but they're not yet competitive
Speaker 10: with Google and the other hyperscalers.
Speaker 6: When we consider Google and other players in this space
Speaker 6: who are operating learn language models. Something else that is
Speaker 6: in this executive order is preventing AI systems from being built.
Speaker 6: And this is a quote with ideological bias and engineered
Speaker 6: social agendas. Obviously, Google and others have come under some
Speaker 6: scrutiny for what is perceived to be anti white bias
Speaker 6: or something else. How does that actually work though, because
Speaker 6: people are the ones who are initially programming this, and
Speaker 6: some inherent bias i'm sure.
Speaker 8: Has to be in there. Can that be unlearned by
Speaker 8: this technology.
Speaker 10: Yeah, this is going to be very tricky for the
Speaker 10: AI companies to navigate because content it comes back to
Speaker 10: content moderation. Essentially, it's very similar issues. Right, you can't
Speaker 10: fail to curate what's going to come out of these
Speaker 10: models and what the public sees can create all kinds
Speaker 10: of problems. But as soon as companies do that, they're
Speaker 10: going to be confronted with some of these issues about
Speaker 10: whether their interventions, for instance, did have an effect in
Speaker 10: terms of how a gender was portrayed or that sort
Speaker 10: of thing. And so I think it's going to be
Speaker 10: very difficult for the companies to navigate. But I also
Speaker 10: think they're going to be working really hard with the
Speaker 10: Trump administration to make sure that they make the case
Speaker 10: that that is not something that holds them back from
Speaker 10: releasing a new model, so that I think that there's
Speaker 10: a good chance that the way that it's enforced will
Speaker 10: allow them to innovate. But we'll have to see.
Speaker 2: I want to try to get to this from a
Speaker 2: slightly different angle for a moment, how much of this
Speaker 2: through the eyes of the White House, and what's possible
Speaker 2: in say the first one hundred days or even the
Speaker 2: next four years for Donald Trump. How much of it
Speaker 2: has to do with AI technology or the models that
Speaker 2: you're discussing versus energy. This is the President's going to
Speaker 2: unlock energy and you can't get these data centers powered
Speaker 2: without energy that we apparently do not have when we
Speaker 2: talk about nuclear but more immediately natural gas. Is that
Speaker 2: actually the lasting mark that the Trump administration will have
Speaker 2: on AI?
Speaker 10: It very well could be, because that is the long
Speaker 10: pole in the tent, or looks to be one of
Speaker 10: the long poles in the tent. Just the sheer amount
Speaker 10: of energy that's going to be needed, and I think
Speaker 10: that they're going to have to take in all the
Speaker 10: above approach. I think obviously with something like nuclear, that's
Speaker 10: critical and you know, cutting through the red tape, you know,
Speaker 10: having a permitting process, getting states to approve it. I mean,
Speaker 10: I think that's going to be really critical. But there
Speaker 10: are some other technologies like geothermal that we're really seeing
Speaker 10: some breakthroughs, and so I think they're going to have
Speaker 10: to be open to all of those possibilities if they're
Speaker 10: going to be successful.
Speaker 6: Well, so, when we consider here the perhaps deregulating that
Speaker 6: needs to happen in order to accelerate it, whether it's
Speaker 6: energy creation or whether it is actually just development of
Speaker 6: this technology. What is going to be the role of
Speaker 6: those outside the White House for some of these other
Speaker 6: agencies who are usually typically charged with enforcing regulation. Just
Speaker 6: walk us through who the key players to watch here
Speaker 6: are going to be other than like Donald Trump and
Speaker 6: David Sex.
Speaker 10: I think it really strengthens the role of agencies like
Speaker 10: d OD and the agencies and the intelligence community. Obviously
Speaker 10: they're already very powerful, but they are huge customers and
Speaker 10: they're going to use this technology and drive requirements, and
Speaker 10: so I think agencies like that are really going to
Speaker 10: have a huge role in this administration. I think that
Speaker 10: it could have an effect on agencies like the Commerce
Speaker 10: Department and others that would take have taken a more
Speaker 10: regulatory role, looking at things like data centers and AI
Speaker 10: and so it remains to be seen. I think they'll
Speaker 10: have to focus on things like export controls the administration supports.
Speaker 10: But I think this expanded portfolio that you saw under
Speaker 10: Gina Romundo, I think is going to narrow up quite
Speaker 10: a bit for.
Speaker 2: Those What does that mean for the videos of the world? Then,
Speaker 2: where Joe Biden was cracking the whip. When it came
Speaker 2: to export controls, will some of those loosen for companies
Speaker 2: making sensitive equipment like GPUs.
Speaker 10: I think that's a really good question, and it's going
Speaker 10: to depend. I think that the National security team that
Speaker 10: I've seen so far, from National Security Advisor Walts all
Speaker 10: all the way down, are very serious about that issue,
Speaker 10: and our laser focused on it. And it's a question
Speaker 10: of whether the President and others in the West wing
Speaker 10: are going to have diplomatic overtures from Beijing and decide
Speaker 10: in certain cases to go in a different direction. So
Speaker 10: I think the defaults is going to be to impose
Speaker 10: more export controls or at least keep the ones we have,
Speaker 10: but we could see individual cases, particularly where suddenly it
Speaker 10: changes on a dime.
Speaker 6: I'd like to ask you as well about PSI security
Speaker 6: in addition to this, as we consider the holistic security
Speaker 6: picture here, knowing, for example, that the Treasury Department was
Speaker 6: subject to a hack perpetrated at least it's understood to
Speaker 6: be perpetrated by the Chinese, how do we safeguard against
Speaker 6: that kind of thing happening When we're talking about federal
Speaker 6: systems that are being hacked into what needs to be
Speaker 6: done to fortify them to a greater degree.
Speaker 10: So in the case of federal systems, and if you
Speaker 10: look at the Treasury hack, this was an example where
Speaker 10: you had a third party vendor that was mishandling its
Speaker 10: keys that they were providing a tool to the Treasury
Speaker 10: Department that allowed it staff, for instance, to remote into computers.
Speaker 10: And because they had mishandled their keys, the PRC actors
Speaker 10: were able to get into the unclassified network. And so
Speaker 10: that's an example of how we don't just need the
Speaker 10: federal government system secure, we also need those third party vendors.
Speaker 10: This is something that in the late late days of
Speaker 10: the Biden administration that they started to do with their
Speaker 10: procurement power. And one of the things that's interesting if
Speaker 10: we contrast is you talked about the AI order being revoked.
Speaker 10: They haven't revoked the cybersecurity yeos. And I think that
Speaker 10: that that doesn't mean they won't make changes, and we
Speaker 10: can talk about what changes I would predict they'll make.
Speaker 10: But I think that the framework that has been used
Speaker 10: by the Biden administration, I think there are significant parts
Speaker 10: of it that they're considering keeping in order to safeguard
Speaker 10: the country.
Speaker 2: Does Donald Trump understand these technologies. He talks about, you know,
Speaker 2: beautiful AI and being the world uh dominant market for AI,
Speaker 2: the biggest developer or is that irrelevant? Does he have
Speaker 2: the know how on his team?
Speaker 10: So I've never met him, so I don't I don't
Speaker 10: want to speculate too.
Speaker 2: Much fun of lawmakers for not knowing how to go
Speaker 2: on social media? Is there an equivalence a year?
Speaker 10: But but I think that in terms of getting him
Speaker 10: information and in terms of getting him really good options,
Speaker 10: I think that the National Security staff and the other
Speaker 10: components in the White House will continue that interagency process
Speaker 10: where what comes to his desk is you know, their
Speaker 10: best reflection of what the US should do in the
Speaker 10: context of you know, his approach generally and his.
Speaker 2: Ideologies have Elon Muskin is zero. I guess that helps
Speaker 2: well sure.
Speaker 6: And Elon Musk obviously is involved in a lot of
Speaker 6: this technology development to a certain degree. Obviously, now that
Speaker 6: he's president again, he's once again subject to the kind
Speaker 6: of intelligence that you don't necessarily get when you're outside
Speaker 6: of the White House. What kind of information do you
Speaker 6: anticipate he's getting around the technological threats facing the United States,
Speaker 6: Whether it's cyber or something else.
Speaker 8: How real is that right now as we speak?
Speaker 10: So he's getting very scary stuff. I mean, I can
Speaker 10: tell you from when I came to the NSE that
Speaker 10: it's very disturbing in terms of some of the intrusions
Speaker 10: that could impact public safety. And you know, because we
Speaker 10: have such wonderful government officials that are working every day
Speaker 10: as well as companies working to stop it. But I
Speaker 10: think it's going to be getting a lot of information
Speaker 10: on the threats. Obviously I don't know the details. I
Speaker 10: no longer have a security clearance, and so I think
Speaker 10: I think he'll be getting good information about that.
Speaker 2: Are these on the level of Salt Typhoon or greater?
Speaker 10: So I think Salt Typhoon is actually a great opportunity
Speaker 10: in some ways because it is a finally a public
Speaker 10: example of this advanced persistent threat that we're seeing. It's
Speaker 10: a different approach, right, This isn't just somebody breaking in.
Speaker 10: This is somebody squatting and in your walls and in
Speaker 10: your basement and in your ceiling right where they they
Speaker 10: gain access to the network, and then they stay there
Speaker 10: and they hoover up Intel financial data, you know, whatever
Speaker 10: they can and they prepare for the possibility that they
Speaker 10: could use it to disrupt financial markets, to disrupt telecom
Speaker 10: networks and so on, and then the other aspect of
Speaker 10: it that.
Speaker 8: Sorry, the clock is stopping us.
Speaker 1: OK.
Speaker 2: I want you to come back and have a conversation
Speaker 2: about the things that keep you up at night, because
Speaker 2: you're going into some very interesting areas. He agreed to that. Kaylie,
Speaker 2: We're going to take Matt Pearl, director of the CSIS
Speaker 2: Strategic Technologies Program, making his debut here on Balance of Power.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
Speaker 1: us live weekdays at noon and five pm Eastern on Apple,
Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. Listen
Speaker 1: on demand wherever you get your podcasts, or watch us
Speaker 1: live on YouTube.
Speaker 2: Onto Ashville today for Donald Trump. He has left the
Speaker 2: Bubble Air Force one to Ashville. This is on the
Speaker 2: way to California. It's disaster day for the President. He
Speaker 2: spoke a short time ago of briefing on the damage
Speaker 2: left behind from the hurricanes, realizing this is a couple
Speaker 2: months ago now, and made some pretty controversial remarks about
Speaker 2: FEMA and in terms of California, about the valve we
Speaker 2: talked about the Delta smelt. We'll hear a lot more
Speaker 2: about the poor smelt, I think a little bit later
Speaker 2: on today. He'll get to California in the second half
Speaker 2: of the day. He will likely be speaking soon. As
Speaker 2: we mentioned, they've got a staging area set up for
Speaker 2: the president. A couple of folks are standing by some
Speaker 2: families and RV what appears to be a damaged home,
Speaker 2: and they've got the podium and presidential seal setup for him.
Speaker 2: So we'll keep tabs throughout the day on his travel.
Speaker 2: By the way, this is what day four and a half.
Speaker 2: A lot of people woke up this morning to try
Speaker 2: and remind themselves that it's been only a week, and
Speaker 2: it's been exacerbated by this uncertainty that has followed alive.
Speaker 2: We talked about uncertainty in the markets, right you can't
Speaker 2: plan for stuff when you don't know what the tariffs
Speaker 2: are going to be, the tax cuts. How does the
Speaker 2: Fed plan anything with the idea of incremental tariffs. There's
Speaker 2: just as much uncertainty for hiring managers right now as
Speaker 2: Donald Trump moves to reshape the federal workforce, and there
Speaker 2: could be echo effects in the private workforce. Remembering a
Speaker 2: couple of nights ago, we told you five pm DEI
Speaker 2: offices were shut down. People who worked in them were
Speaker 2: put on paid leave. By the close of business today,
Speaker 2: those managers are expected to put forth paper on how
Speaker 2: they're going to reduce the workforce. They will likely lose
Speaker 2: their jobs. That could be thousands of people, and it
Speaker 2: could impact programs far beyond the sort of nature that
Speaker 2: you think of with DEI, race and gender. As we've
Speaker 2: told you, this impacts veterans and rural services. So we've
Speaker 2: got a lot of confusion here as the world shifts
Speaker 2: under our feet a bit, which is something that we
Speaker 2: wanted to talk about with an expert. Amyd Frain is
Speaker 2: the founder and CEO of a company called HR Standards
Speaker 2: Institute HRSI. This is a credentialing teaching organization that's geared
Speaker 2: toward the HR world. Is with us now in st Amy.
Speaker 2: Great to see you.
Speaker 11: Great to see you too, Joe.
Speaker 2: Your head spinning. I'm guessing what the rest of us
Speaker 2: is if the world is shifting under your feet and
Speaker 2: you've got this kind of confusion. Let's start with the
Speaker 2: federal workforce, because that's where the President is starting here
Speaker 2: talking about illegal diversity equity inclusion policies. This is something
Speaker 2: that's going to change the face potentially of the federal workforce.
Speaker 2: I don't know what the unions think about this, what
Speaker 2: do you think about it?
Speaker 11: So this is really gray area that we're entering into
Speaker 11: right now, not only for the federal government, but for
Speaker 11: the private sector as well. We're seeing in the federal
Speaker 11: government not just the anti DEI efforts, but the hiring
Speaker 11: freezes that are taking place right now. People are sort
Speaker 11: of struggling with what this means to them. We're seeing
Speaker 11: folks that are having their job offers resended and those
Speaker 11: seasonal employees that come in to help by IRS process paperwork.
Speaker 11: Are you know, they're not going to have those seasonal
Speaker 11: employees based on what we're seeing right now, And there
Speaker 11: absolutely are concerns about these offices being shut down and
Speaker 11: these people losing their jobs around how does this impact
Speaker 11: unions and what does that mean? Which is huge and
Speaker 11: there are contracts in place, agreements in place, so what
Speaker 11: does that mean for those organizations. It also, when you
Speaker 11: think about all this, you think about the component of
Speaker 11: the morale of the people that are left behind. What
Speaker 11: does that look like for them, you know, how are
Speaker 11: they going to navigate through this? And I think that
Speaker 11: when you think about you talked about the jobs those
Speaker 11: folks that are doing DEI, sixty percent of their roles
Speaker 11: was focused on DEI, but they had other parts of
Speaker 11: their jobs that were non DEI focused. So what is
Speaker 11: what happens to that Where do those functions of their
Speaker 11: responsibilities go. And when you talk about the private sector,
Speaker 11: you're looking at organizations that are shifting their DEI policy.
Speaker 11: This is not in the past four and a half days,
Speaker 11: as you pointed out, but you're looking back for you know,
Speaker 11: the past couple of months or past couple of years
Speaker 11: of what's been happening in the DEI space. Companies that
Speaker 11: have been pulling back on their DEI efforts like John Deere,
Speaker 11: companies that have been reimagining what DEI looks like like McDonald's,
Speaker 11: and companies that are really digging into deies. Companies like
Speaker 11: JP Morgan, who Jamie Dimond this week talked about refocusing
Speaker 11: and doubling down on their DEI efforts because there is
Speaker 11: profitability in the bottom line for the bank for those efforts.
Speaker 2: Wow, okay, so there's a lot here. You mentioned the unions.
Speaker 2: Why don't we start there. We haven't heard an outcry
Speaker 2: from federal labor unions. I suspect that they're trying to
Speaker 2: figure out the impact of this and what their next
Speaker 2: move is is. Will that be the next call in
Speaker 2: response here from the UNI.
Speaker 11: I think that's going to be one of them.
Speaker 2: They push back on the president.
Speaker 11: I think they certainly will. I think they're trying to
Speaker 11: figure out the impact of the executive order that was
Speaker 11: signed on the twenty first. They're really trying to understand
Speaker 11: what that looks like. I've been seeing and talking to
Speaker 11: attorneys in the employment space that are really also trying
Speaker 11: to understand how are we going to advise our clients
Speaker 11: on what this means from impacts on some of the
Speaker 11: federal laws that are out there.
Speaker 2: So for sure, remembering federal government's the biggest employer that's
Speaker 2: right in the country, and it's not just where you
Speaker 2: and I are sitting now in Washington, these are federal offices.
Speaker 2: Sometimes people need to be reminded all over the country,
Speaker 2: in every state. The echo effect, though, in corporate America
Speaker 2: is something that I find fascinating, and this hits close
Speaker 2: to home for you. You consider government contractors for instance. That's right,
Speaker 2: But even beyond that, you said McDonald's, some of the
Speaker 2: other companies home depot where DEI pages are going away
Speaker 2: different approach to business for fear of crossing the president.
Speaker 2: What's the motivation.
Speaker 8: Here, right?
Speaker 11: I think that they are. I think companies are really
Speaker 11: looking at what's important to them in their culture and
Speaker 11: their values. I think that's what JP Morgan Chase is doing,
Speaker 11: That's what Costco is doing, focusing on what are our
Speaker 11: values and what does that look like? And there will
Speaker 11: be some risks that these organizations may be facing by
Speaker 11: really doubling down on their efforts for DEI, but it's
Speaker 11: part of their bottom line. They're seeing results from that,
Speaker 11: and they want to reflect their customers. They are hearing
Speaker 11: from their customers that this is important, So all those
Speaker 11: things will continue to be focused. As for the private employer.
Speaker 2: The EO that I mentioned directs federal agencies as well.
Speaker 2: It's to create a list of companies. It's like kind
Speaker 2: of a black list of companies to be targeted for
Speaker 2: potential investigations for what again is being called illegal DEI practices.
Speaker 2: Is this a labor story or is this a legal story?
Speaker 2: Because these companies have the lawyer up.
Speaker 8: That's right.
Speaker 2: I think it's both.
Speaker 11: I think it is a story about labor, but I
Speaker 11: think it's also a legal story, and a lot of
Speaker 11: this is going to be litigated from both the private
Speaker 11: employers and for the federal government as they're focused on
Speaker 11: these long embedded laws and practices that companies have embedded
Speaker 11: in their cultures, federal contractors being one of them. I
Speaker 11: mean they have redesigned and are redesigning their uh the
Speaker 11: contracts that they're putting in to service the federal government,
Speaker 11: and they're having to reimagine that. So this is a
Speaker 11: really a challenging time to be an HR. Yes, HR
Speaker 11: is up for the challenge because HR has done a
Speaker 11: lot with the gray area out there from COVID to
Speaker 11: return to work to machine learning and AI and.
Speaker 2: This is so your phone's ringing. Obviously if it's time
Speaker 2: to consult an HR executive or department, we're going to
Speaker 2: go hire Amy and talk about this. Do you tell
Speaker 2: them to hold on because we don't know what's going on?
Speaker 2: Is it slow the role? Because I don't think anybody
Speaker 2: has this. So we just had one order, for instance,
Speaker 2: on birthright citizenship overturned yesterday in court. We could be
Speaker 2: in a complete different world two weeks from now, that's right.
Speaker 2: How do you make a plan for anything.
Speaker 11: That's right? Well, I think you know, I've been talking
Speaker 11: to folks who are losing their jobs right now because
Speaker 11: they were doing DEI work for the federal government. So
Speaker 11: that's obviously happening right now. I think in the in
Speaker 11: the private sector, I think those organizations need to continue
Speaker 11: to focus on what's important for values and their culture.
Speaker 11: And you know, there's risk in all business decisions, right,
Speaker 11: So how are you going to make sure that you
Speaker 11: are doing the best for your organization and you have
Speaker 11: your shareholders and or your board behind we do we end.
Speaker 2: Up with two classes of companies, those with DEI programs
Speaker 2: and those without.
Speaker 11: I think we're already there, yeah, and we have seen that.
Speaker 2: I mean, some will hold the line.
Speaker 8: Though, that's right, that's right.
Speaker 11: Well, I think it's just what's important to their culture, right,
Speaker 11: what's important to them as a business, and what they
Speaker 11: value and where you know, there's a lot of research
Speaker 11: out there that shows that organizations that invest and have
Speaker 11: a diverse workforce, their bottom line profits are better.
Speaker 8: The proof is in the data.
Speaker 2: Okay, So that that brings us back to Wall Street.
Speaker 2: Then you said the shareholders? Do shareholders consider this when
Speaker 2: they make investments? That's a long walk for side folks
Speaker 2: on Wall Street how to connect those thoughts that is?
Speaker 11: It's so there have been there have been pushes from
Speaker 11: the SEC on this. I think right now that's you know,
Speaker 11: sort of off the table with this new administration and
Speaker 11: looking at how do we value the human capital on
Speaker 11: a balance sheet? What does that look like? Because organizations
Speaker 11: have been saying on their publicly reported documents that they
Speaker 11: have a diverse workforce, but what does that mean? How
Speaker 11: is that defined? And I think some organizations have been
Speaker 11: really good at valuing that and others have just made
Speaker 11: like in statements about what that means and looks like.
Speaker 11: So I think this is the time for organizations to
Speaker 11: really dig deep and to look at their values and
Speaker 11: what's important to them.
Speaker 2: So what's your time frame when when you have your
Speaker 2: arms around this? Is it first one hundred days for you?
Speaker 2: Like everyone else?
Speaker 11: Yeah, I think this is you know a lot of
Speaker 11: this is going to get caught up in litigation, so
Speaker 11: it's going to be a lot longer than one hundred days.
Speaker 11: But I think organizations are going to have to be
Speaker 11: paying really close attention to what is what the president
Speaker 11: is saying, and what's coming out of this administration.
Speaker 2: Great, I'm really glad you could come by. Let's do
Speaker 2: this again when we learn morely, it's great to have
Speaker 2: the voice of experience in Amy Dufrain hrsi HR Standards
Speaker 2: Institute for you to remember. Many thanks. Thanks for listening
Speaker 2: to the Balance of Power podcast. Make sure to subscribe
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Speaker 2: from Washington, DC at noontime Eastern at Bloomberg dot com.