1 00:00:02,520 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple, Cockley and Android 4 00:00:17,160 --> 00:00:20,520 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:25,040 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,239 --> 00:00:27,840 Speaker 2: Joe Matthew in Washington, thanks for being here on Bloomberg 7 00:00:27,920 --> 00:00:31,000 Speaker 2: TV and radio with news coming from the White House 8 00:00:31,000 --> 00:00:33,400 Speaker 2: today on Russia. If you were with us a short 9 00:00:33,400 --> 00:00:37,440 Speaker 2: time ago, you heard the President on Truth Social talking 10 00:00:37,440 --> 00:00:39,720 Speaker 2: about the meeting that took place a short time ago 11 00:00:40,479 --> 00:00:44,760 Speaker 2: with Vladimir Putin. President Trump sent his Special ENVOYE. Steve 12 00:00:44,800 --> 00:00:49,240 Speaker 2: Whitkoff to Moscow. There was a three hour long conversation, 13 00:00:49,400 --> 00:00:52,239 Speaker 2: the President framing it as productive, but it's very difficult 14 00:00:52,240 --> 00:00:55,440 Speaker 2: to tell if anything significant will come from this session, 15 00:00:55,520 --> 00:00:57,360 Speaker 2: knowing that only two days from now will be the 16 00:00:57,400 --> 00:01:03,200 Speaker 2: deadline for secondary sanctions on RUSSI over its war against Ukraine. 17 00:01:03,360 --> 00:01:05,880 Speaker 2: We're going to have more with our political panel on this. 18 00:01:05,920 --> 00:01:09,920 Speaker 2: Bloomberg Politics contributors Rick Davis and Genie Shanzano are with us. 19 00:01:09,920 --> 00:01:12,600 Speaker 2: But let's start live at the White House, Bloomberg, Washington, 20 00:01:12,600 --> 00:01:15,720 Speaker 2: correspondent Tyler Kendall has the latest on this. Tyler, what 21 00:01:15,760 --> 00:01:17,840 Speaker 2: else are we learning and when could we hear an 22 00:01:17,880 --> 00:01:19,840 Speaker 2: announcement if there is one? 23 00:01:20,160 --> 00:01:22,520 Speaker 3: Yeah, hey, Joe, Well, as you mentioned, we've really just 24 00:01:22,560 --> 00:01:25,880 Speaker 3: heard from President Trump moments ago saying that this meeting 25 00:01:26,160 --> 00:01:29,399 Speaker 3: did make progress, but we haven't really seen many tangible 26 00:01:29,480 --> 00:01:32,240 Speaker 3: deliverables beyond that, and that President Trump said that he 27 00:01:32,319 --> 00:01:35,920 Speaker 3: briefed our European allies on these discussions. As Steve Witkoff 28 00:01:36,080 --> 00:01:39,200 Speaker 3: wraps up, really what's his fifth round of negotiations with 29 00:01:39,319 --> 00:01:42,880 Speaker 3: Vladimir Putin in Moscow ahead of this Friday, August eighth 30 00:01:42,920 --> 00:01:45,640 Speaker 3: deadline for Russia to come to the negotiating table in 31 00:01:45,640 --> 00:01:49,960 Speaker 3: perhaps a more meaningful way or face further economic penalties. 32 00:01:50,000 --> 00:01:51,840 Speaker 3: And we did see the White House take at least 33 00:01:51,840 --> 00:01:54,720 Speaker 3: the first step in making good on that threat earlier 34 00:01:54,800 --> 00:01:59,000 Speaker 3: when President Trump imposed that twenty five percent additional tariff 35 00:01:59,000 --> 00:02:01,840 Speaker 3: on India over it It's imports of Russian energy supplies. 36 00:02:01,840 --> 00:02:05,000 Speaker 3: About thirty seven percent of Russian oil ends up getting 37 00:02:05,080 --> 00:02:08,839 Speaker 3: exported to India, so they are one of those top consumers. 38 00:02:08,880 --> 00:02:11,240 Speaker 3: And this was something that we had long heard from 39 00:02:11,280 --> 00:02:14,079 Speaker 3: President Trump, and it appears that he has taken this step, 40 00:02:14,160 --> 00:02:16,880 Speaker 3: though that additional tariff will not go into effect for 41 00:02:16,919 --> 00:02:19,640 Speaker 3: another twenty one days, and it appears that could really 42 00:02:19,680 --> 00:02:22,440 Speaker 3: just be the first blow in this pressure campaign, Joe, 43 00:02:22,440 --> 00:02:24,720 Speaker 3: because we have a headline crossing on the terminal earlier 44 00:02:25,080 --> 00:02:27,600 Speaker 3: this hour, people familiar are telling us that the White 45 00:02:27,600 --> 00:02:31,040 Speaker 3: House is considering new sanctions on Russia's covert fleet of 46 00:02:31,120 --> 00:02:34,240 Speaker 3: oil tankers. That appears to be the next target in 47 00:02:34,280 --> 00:02:37,000 Speaker 3: what has become this pressure campaign. Try to get some 48 00:02:37,040 --> 00:02:40,720 Speaker 3: more meaningful concessions from Vladimir Putin, and Joe. As you know, 49 00:02:40,760 --> 00:02:43,480 Speaker 3: we had some pretty incredible reporting this morning that Russia 50 00:02:43,600 --> 00:02:48,760 Speaker 3: might be willing to potentially suggest there be an air truce. 51 00:02:48,880 --> 00:02:52,520 Speaker 3: To be sure, Vladimir Putin, the understanding is he's not 52 00:02:52,560 --> 00:02:54,840 Speaker 3: going to go for a full cease fire, but perhaps 53 00:02:54,880 --> 00:02:57,240 Speaker 3: they would put on the table an air truce. So 54 00:02:57,360 --> 00:03:01,560 Speaker 3: think stopping missile strikes or drones strikes that happen in 55 00:03:01,600 --> 00:03:03,760 Speaker 3: the air to try to stave off some of these 56 00:03:03,800 --> 00:03:04,800 Speaker 3: economic penalties. 57 00:03:05,720 --> 00:03:08,359 Speaker 2: Tell us about the Swiss tyler. The Swiss president got 58 00:03:08,400 --> 00:03:10,720 Speaker 2: on an airplane without a formal invitation to come to 59 00:03:10,840 --> 00:03:14,200 Speaker 2: Washington to renegotiate what the president deemed to be a 60 00:03:14,320 --> 00:03:18,680 Speaker 2: thirty nine percent tariff. The President did sit down with 61 00:03:18,720 --> 00:03:21,680 Speaker 2: the Secretary of State Marco Rubio, who put on social 62 00:03:21,720 --> 00:03:24,560 Speaker 2: media a picture that two of them discussing the importance 63 00:03:24,560 --> 00:03:27,520 Speaker 2: he says of a fair and balanced trade relationship between 64 00:03:27,560 --> 00:03:31,200 Speaker 2: the US and Switzerland, reaffirming our commitment to stronger bilateral 65 00:03:31,240 --> 00:03:35,000 Speaker 2: defense cooperation. But no lower tariff. It seems the Swiss 66 00:03:35,040 --> 00:03:37,680 Speaker 2: will go home empty handed, right and. 67 00:03:37,680 --> 00:03:39,640 Speaker 3: Mark Rubio, the Secretary of State, has a lot of 68 00:03:39,680 --> 00:03:42,520 Speaker 3: roles in this administration, but he doesn't lead the bilateral 69 00:03:42,600 --> 00:03:45,960 Speaker 3: trade talks, right. So, I mean, our reporting indicates that 70 00:03:46,000 --> 00:03:49,080 Speaker 3: the Swiss president did come to Washington without a formal 71 00:03:49,200 --> 00:03:51,560 Speaker 3: invite from this White House. But that just really shows 72 00:03:51,600 --> 00:03:53,840 Speaker 3: the pressure that the government is under to try to 73 00:03:53,840 --> 00:03:57,200 Speaker 3: get a lower tariff right ahead of tomorrow's deadline of 74 00:03:57,240 --> 00:04:01,320 Speaker 3: this thirty nine percent rate ultimately going into effect. And 75 00:04:01,320 --> 00:04:03,840 Speaker 3: it's been really interesting to see how these talks really 76 00:04:03,920 --> 00:04:06,840 Speaker 3: did seem to go off the rails here, considering our 77 00:04:06,880 --> 00:04:09,880 Speaker 3: reporting had indicated that there had been positive momentum. Now 78 00:04:09,960 --> 00:04:12,400 Speaker 3: person familiar does tell Bloomberg News it appears the Swiss 79 00:04:12,400 --> 00:04:15,280 Speaker 3: president is leaving Washington without a deal, despite putting on 80 00:04:15,360 --> 00:04:18,839 Speaker 3: the table a new proposal for the US, but apparently 81 00:04:19,240 --> 00:04:21,240 Speaker 3: was not enough. There was a few different threads that 82 00:04:21,279 --> 00:04:24,320 Speaker 3: we were watching here a Joe but important context that 83 00:04:25,200 --> 00:04:27,920 Speaker 3: the Swiss really don't have tariffs on their imports, only 84 00:04:27,920 --> 00:04:30,920 Speaker 3: about five percent of their imports or tariffs, and that's 85 00:04:30,960 --> 00:04:34,279 Speaker 3: really around agricultural products, which does appear to be a 86 00:04:34,320 --> 00:04:36,919 Speaker 3: red line in those negotiations. We know the US would 87 00:04:36,920 --> 00:04:39,920 Speaker 3: like to, of course see greater market access for US 88 00:04:39,960 --> 00:04:42,760 Speaker 3: agricultural goods, but there were other places where we thought 89 00:04:42,800 --> 00:04:46,000 Speaker 3: perhaps there could be some agreements, such as boosting US 90 00:04:46,120 --> 00:04:49,919 Speaker 3: L and G purchases, boosting pharmaceutical purchases, something that we 91 00:04:49,960 --> 00:04:52,040 Speaker 3: know as top of mind for this administration. And then 92 00:04:52,080 --> 00:04:53,680 Speaker 3: one that I'll leave you with that we didn't hear 93 00:04:53,760 --> 00:04:55,240 Speaker 3: much of an update about. But we know that the 94 00:04:55,279 --> 00:04:59,520 Speaker 3: government is negotiating some purchases of some Lockey Martin fighter jets, 95 00:04:59,520 --> 00:05:01,560 Speaker 3: and some of the reporting indicated that perhaps there could 96 00:05:01,560 --> 00:05:04,640 Speaker 3: be a higher purchase price for that. But at this moment, 97 00:05:04,640 --> 00:05:07,720 Speaker 3: it doesn't appear that any of the efforts were enough 98 00:05:07,800 --> 00:05:09,920 Speaker 3: ultimately to get this White House to Budge. 99 00:05:10,760 --> 00:05:13,520 Speaker 2: Tyler Kendall full of news today. Thank you so much, Tyler, 100 00:05:13,520 --> 00:05:15,240 Speaker 2: with the update live from the White House. As we 101 00:05:15,320 --> 00:05:19,279 Speaker 2: mentioned President Trump on Truth Social earlier talking about Steve 102 00:05:19,320 --> 00:05:22,279 Speaker 2: whitcoff meeting today with Vladimir Putin. He didn't have a 103 00:05:22,279 --> 00:05:24,800 Speaker 2: lot to say, but he did call it a highly 104 00:05:24,880 --> 00:05:29,760 Speaker 2: productive meeting. Great progress was made, says the President. Afterwards, 105 00:05:29,800 --> 00:05:32,160 Speaker 2: I updated some of our European allies. We want to 106 00:05:32,200 --> 00:05:35,039 Speaker 2: play it to our political panel. Rick Davis and Genie 107 00:05:35,040 --> 00:05:38,680 Speaker 2: Shanzano Bloomberg Politics contributors are with us Genius Senior Democracy 108 00:05:38,720 --> 00:05:41,520 Speaker 2: fellow with the Center for the Presidency, the Study of 109 00:05:41,520 --> 00:05:44,279 Speaker 2: the Presidency in Congress, Rick's partner at Stone Court Capital 110 00:05:44,360 --> 00:05:47,919 Speaker 2: or Republican Strategist. How does this feel to you this time, Genie, 111 00:05:47,960 --> 00:05:50,320 Speaker 2: There's been a lot of meetings and a lot of 112 00:05:50,320 --> 00:05:53,599 Speaker 2: hours spent with Steve Whitcoff and Vladimir Putin that have 113 00:05:53,640 --> 00:05:57,800 Speaker 2: resulted in absolutely nothing. With two days to go here, Well, 114 00:05:57,839 --> 00:06:00,080 Speaker 2: we hear about a deal, Marco Rubio telling Sea and 115 00:06:00,320 --> 00:06:02,760 Speaker 2: we could hear an announcement within days. 116 00:06:03,440 --> 00:06:06,560 Speaker 4: Yeah, the White House is certainly heightening expectations, as you 117 00:06:06,600 --> 00:06:09,960 Speaker 4: and Tyler were just talking about, but you know, it's 118 00:06:10,000 --> 00:06:12,680 Speaker 4: hard to imagine. Hopefully there is a deal, but what 119 00:06:12,839 --> 00:06:15,839 Speaker 4: would this look like, I mean, Russia is winning on 120 00:06:15,920 --> 00:06:19,560 Speaker 4: the battlefield. They have the advantage in terms of population, 121 00:06:20,080 --> 00:06:23,280 Speaker 4: they have the advantage in terms of arms. You know, 122 00:06:23,480 --> 00:06:27,600 Speaker 4: the President is talking about these secondary, sanctioned secondary tariffs 123 00:06:27,600 --> 00:06:30,880 Speaker 4: and indeed putting them on India despite the fact that 124 00:06:30,960 --> 00:06:34,160 Speaker 4: the EU buys a substantial amount of energy from Russia 125 00:06:34,200 --> 00:06:37,280 Speaker 4: as well. So I'm not sure exactly what this will 126 00:06:37,320 --> 00:06:40,839 Speaker 4: look like. But it's hard to imagine that Vladimir Putin 127 00:06:41,320 --> 00:06:44,520 Speaker 4: changes what he has been asking for so far, because 128 00:06:44,600 --> 00:06:48,159 Speaker 4: one thing he has been is very, very consistent on 129 00:06:48,440 --> 00:06:49,360 Speaker 4: his demands. 130 00:06:50,920 --> 00:06:55,360 Speaker 2: Rick, the language coming from the Kremlin is really something 131 00:06:56,120 --> 00:07:00,560 Speaker 2: on our part in particular, said a foreign policy aid 132 00:07:00,560 --> 00:07:04,960 Speaker 2: of Vladimir Putin. Some signals were conveyed on the Ukrainian issue. 133 00:07:05,440 --> 00:07:10,120 Speaker 2: Corresponding signals were also received from President Trump. How do 134 00:07:10,160 --> 00:07:10,920 Speaker 2: we read into this? 135 00:07:11,360 --> 00:07:15,200 Speaker 5: Not a great meeting if you're looking for a ceasefire. Look, 136 00:07:15,280 --> 00:07:18,920 Speaker 5: I mean, Vladimir Putin sure has done exactly what Genie said. 137 00:07:18,920 --> 00:07:21,200 Speaker 5: He hasn't changed his tune since day one on this thing. 138 00:07:22,000 --> 00:07:25,480 Speaker 5: But the reality is it has thrust Donald Trump into 139 00:07:25,520 --> 00:07:28,280 Speaker 5: the waiting arms of President Zelensky. 140 00:07:28,320 --> 00:07:30,360 Speaker 2: I mean, the difference now. 141 00:07:31,640 --> 00:07:36,040 Speaker 5: Is that the UNUS and Zelensky are unified. The US 142 00:07:36,080 --> 00:07:39,360 Speaker 5: and Europe are unified. There are efforts now to re 143 00:07:39,560 --> 00:07:46,040 Speaker 5: arm Zelenski. There are efforts now to spend more of 144 00:07:46,240 --> 00:07:50,600 Speaker 5: US taxpayer dollars on Ukraine. Coming from the Hill. It's 145 00:07:50,640 --> 00:07:54,360 Speaker 5: a complete change of positions than when Donald Trump took 146 00:07:54,360 --> 00:07:57,840 Speaker 5: office in the first sixty days of his administration. And 147 00:07:57,920 --> 00:08:02,320 Speaker 5: so good job, Vlad. You've actually done something that nobody 148 00:08:02,320 --> 00:08:05,560 Speaker 5: thought could happen, and that is that Donald Trump is 149 00:08:05,560 --> 00:08:08,440 Speaker 5: now the biggest supporter of the Ukraine and with that 150 00:08:08,720 --> 00:08:13,120 Speaker 5: a unified Western approach, and he can't resist that. 151 00:08:13,280 --> 00:08:15,120 Speaker 2: Ultimately, he will. 152 00:08:14,840 --> 00:08:18,880 Speaker 5: Fail if the US, Europe and Ukraine are aligned. 153 00:08:20,040 --> 00:08:24,080 Speaker 2: Well, it is something genie, the evolution that we've seen here. 154 00:08:24,640 --> 00:08:28,360 Speaker 2: Donald Trump now referring to the Russian war machine in 155 00:08:28,480 --> 00:08:32,720 Speaker 2: multiple social media posts, including his idea to add a 156 00:08:32,760 --> 00:08:36,880 Speaker 2: twenty five percent tariff on India. How long can we 157 00:08:36,920 --> 00:08:38,960 Speaker 2: assume Donald Trump will see the world this way? 158 00:08:40,559 --> 00:08:43,200 Speaker 4: You know, it's hard to assume. I try not do 159 00:08:43,240 --> 00:08:46,520 Speaker 4: with Donald Trump, anything can happen. But you know, let's 160 00:08:46,600 --> 00:08:51,040 Speaker 4: just think this through. So he imposes this tariff on 161 00:08:51,160 --> 00:08:55,000 Speaker 4: India to fifty percent for buying Russian oil, which the 162 00:08:55,120 --> 00:08:58,520 Speaker 4: United States countenance not that long ago because it's capped, 163 00:08:59,000 --> 00:09:02,600 Speaker 4: and India sent a pretty fervent and strong message saying 164 00:09:02,640 --> 00:09:06,120 Speaker 4: the US and the Europeans are being hypocritical because the 165 00:09:06,240 --> 00:09:10,680 Speaker 4: Europeans are the second largest importer of LNG from Russia, 166 00:09:11,400 --> 00:09:14,920 Speaker 4: and they also are talking about looking to different partners, 167 00:09:15,280 --> 00:09:17,480 Speaker 4: and so what that does in terms of the bricks 168 00:09:17,520 --> 00:09:20,760 Speaker 4: and everything else is one question. The other thing is 169 00:09:20,880 --> 00:09:23,400 Speaker 4: what are we going to do getting a frozen conflict 170 00:09:23,480 --> 00:09:26,600 Speaker 4: with Russia at this point, because there's two ways to 171 00:09:26,720 --> 00:09:30,120 Speaker 4: end a war, you negotiated out or you arm. And 172 00:09:30,280 --> 00:09:32,440 Speaker 4: listening to Rick, I think he's right. We may see 173 00:09:32,480 --> 00:09:35,959 Speaker 4: the United States arming Ukraine, but the Ukraine has a big, 174 00:09:36,040 --> 00:09:40,000 Speaker 4: big problem, which is population. It simply doesn't have the 175 00:09:40,120 --> 00:09:43,120 Speaker 4: numbers to win. Now is Europe and the United States 176 00:09:43,200 --> 00:09:45,520 Speaker 4: going to go in with them? So I'm not sure 177 00:09:45,559 --> 00:09:48,600 Speaker 4: how this gets us anywhere further than a frozen conflict 178 00:09:48,640 --> 00:09:51,840 Speaker 4: with Russia while we need to be competing with China, 179 00:09:52,240 --> 00:09:54,400 Speaker 4: not to mention everything going on in the Middle East. 180 00:09:54,480 --> 00:09:57,880 Speaker 4: I think Donald Trump's was right instinctually when he came 181 00:09:57,920 --> 00:10:00,800 Speaker 4: to office, and now he is looking very much like 182 00:10:00,920 --> 00:10:04,520 Speaker 4: Joe Biden when it pertains to this conflict with the Ukraine. 183 00:10:05,320 --> 00:10:08,600 Speaker 2: He spoke to Voladimir Zelensky today and the President of 184 00:10:09,280 --> 00:10:14,520 Speaker 2: Ukraine is speaking about that phone call. Apparently European leaders 185 00:10:14,559 --> 00:10:19,240 Speaker 2: were on the call with President Trump. Pretty remarkable. Right 186 00:10:19,280 --> 00:10:23,400 Speaker 2: on my way from our brigades here, I spoke with 187 00:10:23,480 --> 00:10:27,120 Speaker 2: President Trump' Zelenski rights on social media. This conversation happened 188 00:10:27,160 --> 00:10:31,880 Speaker 2: after President Trump's representative, Steve Witkoff visited Moscow. There's reporting 189 00:10:32,000 --> 00:10:35,040 Speaker 2: rick on the Bloomberg today that the US is now 190 00:10:35,080 --> 00:10:40,600 Speaker 2: also considering sanctions on Moscow's covert fleet of oil tankers, 191 00:10:40,640 --> 00:10:44,440 Speaker 2: this shadow fleet, as it's called, entities that enable them 192 00:10:44,520 --> 00:10:48,160 Speaker 2: to operate. How come none of this has happened until now. 193 00:10:48,200 --> 00:10:52,560 Speaker 2: We spent years in the Biden administration asking if we 194 00:10:52,600 --> 00:10:55,640 Speaker 2: had done everything possible, if there were more sanctions to find, 195 00:10:55,679 --> 00:10:57,160 Speaker 2: and it appears there were a lot more. 196 00:10:57,600 --> 00:11:00,320 Speaker 5: Well, we talked about that at the time, and we 197 00:11:00,400 --> 00:11:03,840 Speaker 5: used to make a very clear statement that Joe Biden 198 00:11:04,360 --> 00:11:06,720 Speaker 5: was trying to eke out a win, and you don't 199 00:11:06,840 --> 00:11:10,800 Speaker 5: eke out a win when you're challenging Vladimir Putin. The 200 00:11:10,960 --> 00:11:14,840 Speaker 5: entire approach that Joe Biden's administration took was do as 201 00:11:14,920 --> 00:11:17,000 Speaker 5: little as you can for as long as you can, 202 00:11:17,120 --> 00:11:19,760 Speaker 5: and hope this all just goes away. And that includes 203 00:11:19,920 --> 00:11:25,600 Speaker 5: the readiness for that administration to give arms to Ukraine. 204 00:11:25,720 --> 00:11:29,760 Speaker 5: And also why you would not have hit Russia on 205 00:11:29,880 --> 00:11:34,960 Speaker 5: day one with massive tariffs and basically roadblock their ability 206 00:11:35,000 --> 00:11:37,080 Speaker 5: to sell hydrocarbons to the world. I mean, it's just 207 00:11:37,920 --> 00:11:39,800 Speaker 5: none of it made any sense. At the time. We 208 00:11:39,920 --> 00:11:43,520 Speaker 5: criticized the Biden administration for that, and honestly, I mean 209 00:11:44,080 --> 00:11:49,600 Speaker 5: Donald Trump is looking at others who are using Russian oil. 210 00:11:49,720 --> 00:11:54,320 Speaker 5: He's commanded the Secretary's of State, Commerce and Treasury to 211 00:11:54,520 --> 00:11:58,960 Speaker 5: give him a secondary sanctions list of people who are 212 00:11:59,080 --> 00:12:01,920 Speaker 5: currently aiding of betting the Russian war machine, as he 213 00:12:02,040 --> 00:12:04,600 Speaker 5: likes to put it now, and I think that will 214 00:12:04,600 --> 00:12:07,440 Speaker 5: include China, but that will include other users in Europe 215 00:12:07,480 --> 00:12:09,199 Speaker 5: and they're going to have to face those penalties. 216 00:12:10,320 --> 00:12:13,240 Speaker 2: The deadline is Friday. As we walk our way towards 217 00:12:13,880 --> 00:12:17,320 Speaker 2: deadline day, Rick Davis and Jeanie Shanzano, great analysis, and 218 00:12:17,320 --> 00:12:20,000 Speaker 2: thank you both for the insights. Bloomberg Politics contributors. 219 00:12:22,160 --> 00:12:25,640 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 220 00:12:25,720 --> 00:12:28,800 Speaker 1: us live weekdays at noon and five pm. Eastern on 221 00:12:28,920 --> 00:12:32,120 Speaker 1: Apple Cocklay and Android Auto with the Bloomberg Business app. 222 00:12:32,200 --> 00:12:35,199 Speaker 1: You can also listen live on Amazon Alexa from our 223 00:12:35,240 --> 00:12:39,720 Speaker 1: flagship New York station. Just say Alexa Play Bloomberg eleven thirty. 224 00:12:41,240 --> 00:12:43,760 Speaker 2: We keep our eyes on shares of Apple today. It's 225 00:12:43,760 --> 00:12:45,520 Speaker 2: going to be the big story in the second half 226 00:12:45,840 --> 00:12:48,439 Speaker 2: of the day. With an announcement schedule for this afternoon 227 00:12:48,480 --> 00:12:52,080 Speaker 2: at the White House. Tim Cook is expected to appear 228 00:12:52,120 --> 00:12:56,199 Speaker 2: alongside President Trump to make this massive investment announcement. We're 229 00:12:56,200 --> 00:13:00,240 Speaker 2: talking about one hundred billion dollars in domestic mania. You're 230 00:13:00,280 --> 00:13:02,440 Speaker 2: factoring when we talk Apple, we have to talk to 231 00:13:02,600 --> 00:13:05,880 Speaker 2: Ed Ludlow the coast of Bloomberg Tech with his eyes 232 00:13:05,920 --> 00:13:08,439 Speaker 2: on Washington. Once again, this is getting to be a habit. Ed, 233 00:13:09,240 --> 00:13:11,679 Speaker 2: is this new money that we're learning from Apple? 234 00:13:12,440 --> 00:13:14,920 Speaker 6: Well, the one hundred billion dollars is new. It's in 235 00:13:14,960 --> 00:13:17,880 Speaker 6: addition to and on top of the five hundred billion 236 00:13:17,880 --> 00:13:23,640 Speaker 6: dollars that Apple had already announced or disclosed. They plan 237 00:13:23,760 --> 00:13:26,960 Speaker 6: to invest in the United States in the context of manufacturing, 238 00:13:27,160 --> 00:13:31,760 Speaker 6: but also direct investments into suppliers and training. But there's 239 00:13:31,800 --> 00:13:35,400 Speaker 6: a heavier emphasis show on already disclosed. So in aggregate 240 00:13:35,480 --> 00:13:39,080 Speaker 6: it's a bigger number, but you have to ask questions 241 00:13:39,120 --> 00:13:41,320 Speaker 6: of the what next, particularly around the president and the 242 00:13:41,320 --> 00:13:44,360 Speaker 6: administration's you know, motivation. This is a great win for them, 243 00:13:44,920 --> 00:13:48,240 Speaker 6: But Apple is not sort of saying, let's start building 244 00:13:48,280 --> 00:13:51,560 Speaker 6: the iPhone in America. They're absolutely not saying that. What 245 00:13:51,600 --> 00:13:54,520 Speaker 6: they're saying is, here's our existing supply base in America. 246 00:13:54,800 --> 00:13:57,040 Speaker 6: We're going to support those suppliers to do more, and 247 00:13:57,040 --> 00:13:59,640 Speaker 6: we're going to invest in training and ramp up on 248 00:13:59,679 --> 00:14:02,520 Speaker 6: some already announce projects. 249 00:14:03,559 --> 00:14:05,760 Speaker 2: Okay, what does Apple make in America? 250 00:14:06,640 --> 00:14:10,840 Speaker 6: Yeah, it's a really good question, because it's the only question. 251 00:14:11,960 --> 00:14:14,559 Speaker 6: The five hundred billion that came before this new one 252 00:14:14,600 --> 00:14:19,760 Speaker 6: hundred billion was targeted quite specifically at a facility, for example, 253 00:14:19,880 --> 00:14:23,400 Speaker 6: that made servers. You know, Apple, like most technology companies, 254 00:14:23,440 --> 00:14:26,680 Speaker 6: has its own big computer footprint. When when I say computer, 255 00:14:26,680 --> 00:14:29,520 Speaker 6: I mean data center on premises, and they make their 256 00:14:29,560 --> 00:14:32,000 Speaker 6: own servers, and that was part of it. They have 257 00:14:32,160 --> 00:14:36,360 Speaker 6: key supplies here, Glass is one of them. Some electronics 258 00:14:36,480 --> 00:14:38,880 Speaker 6: as well. They reinvest those and then they have a 259 00:14:38,960 --> 00:14:41,280 Speaker 6: workforce and so like a lot of that investment was 260 00:14:41,360 --> 00:14:44,840 Speaker 6: skilled workforce. They make Mac components here, but at Bloomberg's 261 00:14:44,840 --> 00:14:46,960 Speaker 6: reported like before all of this happened at the turn 262 00:14:47,000 --> 00:14:49,400 Speaker 6: of the year, with the new administration, Apple was also 263 00:14:49,440 --> 00:14:51,720 Speaker 6: looking at some of what it manufactures in America and 264 00:14:51,760 --> 00:14:57,120 Speaker 6: thinking can I do that in Asia? Ironically, paradoxically, this 265 00:14:57,280 --> 00:15:00,960 Speaker 6: is the thing. Will Apple manufact actually the iPhone in 266 00:15:01,000 --> 00:15:04,880 Speaker 6: the United States? There is absolutely no suggestion that the 267 00:15:04,920 --> 00:15:06,480 Speaker 6: news today indicates that at all. 268 00:15:07,720 --> 00:15:10,640 Speaker 2: Really interesting, what do we know about Donald Trump's relationship 269 00:15:10,680 --> 00:15:13,560 Speaker 2: with Tim Cook these days? Are they getting along? Yeah? 270 00:15:13,640 --> 00:15:15,560 Speaker 6: Don't laugh at me when I repeat this line, because 271 00:15:15,560 --> 00:15:17,600 Speaker 6: I know I've used it a bit on this program recently. 272 00:15:18,320 --> 00:15:22,880 Speaker 6: But President Trump's best buddy right now is in Nvidia 273 00:15:23,000 --> 00:15:26,600 Speaker 6: CEO Jensen Wang. He's kind of been the public post 274 00:15:26,640 --> 00:15:29,280 Speaker 6: the child of what's happening with technology in America and 275 00:15:29,480 --> 00:15:33,360 Speaker 6: the real on shoring of industry and videos there. With 276 00:15:33,440 --> 00:15:35,920 Speaker 6: Apple right around the same level five hundred million dollars, 277 00:15:37,000 --> 00:15:40,200 Speaker 6: the President has much more directly cooled out Tim Cook 278 00:15:40,280 --> 00:15:43,840 Speaker 6: in a negative with negative connotations. You know, the threat 279 00:15:43,840 --> 00:15:47,920 Speaker 6: has been if Apple does not shift specifically iPhone production, 280 00:15:48,000 --> 00:15:51,280 Speaker 6: but more manufacturing and assembling to this country, they will 281 00:15:51,280 --> 00:15:54,800 Speaker 6: face a specific, ad hoc heavier tariff. Now, I would 282 00:15:54,840 --> 00:15:57,520 Speaker 6: note there were other media outlets that after the White 283 00:15:57,560 --> 00:16:02,200 Speaker 6: House disclosed the Apple investment this morning reported that Apple 284 00:16:02,240 --> 00:16:06,080 Speaker 6: would be spared from this additional India tariff because remember 285 00:16:06,120 --> 00:16:08,960 Speaker 6: there is some final assembled component that comes out of 286 00:16:09,000 --> 00:16:12,080 Speaker 6: India for Apple, the iPhone in smaller volume than they 287 00:16:12,120 --> 00:16:16,520 Speaker 6: do in China. But yeah, the President has spoken in 288 00:16:16,560 --> 00:16:19,720 Speaker 6: the public domain about Tim Cook a lot more in 289 00:16:19,840 --> 00:16:24,280 Speaker 6: negative tones than any other CEO I would say this year. 290 00:16:25,000 --> 00:16:29,280 Speaker 2: Well, elon, maybe really interesting. What does this mean for investors? 291 00:16:29,480 --> 00:16:32,880 Speaker 2: Is this an event that shareholders should be paying attention to? 292 00:16:33,000 --> 00:16:35,400 Speaker 2: Is it a stock mover or this is a Washington story. 293 00:16:35,280 --> 00:16:38,440 Speaker 6: End, Absolutely a stock mover. You know, Apple shares are 294 00:16:38,520 --> 00:16:42,040 Speaker 6: up five point six percent, biggest jump since early May. 295 00:16:42,800 --> 00:16:45,960 Speaker 6: The stock in the first half of this year traded 296 00:16:46,200 --> 00:16:51,280 Speaker 6: very specifically with the psychology around tariff impact and also 297 00:16:51,360 --> 00:16:55,680 Speaker 6: the administration's friction. You know, we know that January through 298 00:16:55,760 --> 00:16:58,800 Speaker 6: at least June July. Actually, the stock narrative changed for 299 00:16:58,840 --> 00:17:00,800 Speaker 6: Apple after that and became much more like why aren't 300 00:17:00,840 --> 00:17:03,680 Speaker 6: you doing more in AI? But a move of almost 301 00:17:03,760 --> 00:17:06,119 Speaker 6: six percent in the session is very notable. This is 302 00:17:06,160 --> 00:17:10,960 Speaker 6: not a move that Apple stock makes regularly on a 303 00:17:11,000 --> 00:17:14,680 Speaker 6: news item like this, And you know, one standard deviation 304 00:17:14,800 --> 00:17:17,919 Speaker 6: is a two percent move. So yeah, it's notable, and 305 00:17:17,960 --> 00:17:19,840 Speaker 6: that's sorry to get technical with you, but I want 306 00:17:19,840 --> 00:17:20,400 Speaker 6: to fully answer. 307 00:17:20,440 --> 00:17:22,919 Speaker 2: No, I love it. That's why we called you, Ed. 308 00:17:22,960 --> 00:17:25,280 Speaker 2: It's great to see you. This announcement set for just 309 00:17:25,320 --> 00:17:27,280 Speaker 2: what three or four hours from now. It'll coincide with 310 00:17:27,280 --> 00:17:29,720 Speaker 2: the late edition of Balance of Power here on Bloomberg 311 00:17:29,760 --> 00:17:32,280 Speaker 2: TV and radio. Watch for Ed Ludlow. Not only here 312 00:17:32,320 --> 00:17:34,800 Speaker 2: from time to time one Balance of Power when we're lucky, 313 00:17:34,800 --> 00:17:38,160 Speaker 2: but the host of Bloomberg Tech Here on Bloomberg Television. 314 00:17:38,200 --> 00:17:40,320 Speaker 2: I'm Jill, Matthew and Washington. Thanks for joining. We just 315 00:17:40,320 --> 00:17:42,879 Speaker 2: got an update from the Boss, President Trump on truth 316 00:17:42,960 --> 00:17:46,080 Speaker 2: social with his eyes of course, on the deadline for 317 00:17:46,240 --> 00:17:48,399 Speaker 2: Russia at the end of this week. The deadline for 318 00:17:48,480 --> 00:17:52,800 Speaker 2: secondary sanctions is Friday, President Trump writing, my Special ENVOYE. 319 00:17:52,800 --> 00:17:55,639 Speaker 2: Steve Whitcoff just had a highly productive meeting with Russian 320 00:17:55,680 --> 00:17:59,560 Speaker 2: President Vladimir Putin. Great progress was made, he says. Afterwards, 321 00:17:59,600 --> 00:18:02,760 Speaker 2: I have to some of our European allies. Everyone agrees, 322 00:18:02,840 --> 00:18:05,280 Speaker 2: he says, this war must come to a close and 323 00:18:05,359 --> 00:18:08,320 Speaker 2: we will work towards that in the days and weeks 324 00:18:08,440 --> 00:18:11,600 Speaker 2: to come. Thank you. For your attention to this matter. 325 00:18:12,040 --> 00:18:14,760 Speaker 2: Exclamation point. This follows a three hour meeting, as we 326 00:18:14,840 --> 00:18:17,800 Speaker 2: told you between Steve Witkoff and Vladimir Putin earlier today. 327 00:18:18,400 --> 00:18:21,119 Speaker 2: No real readout coming from either side in terms of 328 00:18:21,160 --> 00:18:24,840 Speaker 2: progress besides what I just read to you from Donald Trump, 329 00:18:25,359 --> 00:18:28,040 Speaker 2: but Marco Rubio, the Secretary of State, telling CNN a 330 00:18:28,080 --> 00:18:31,159 Speaker 2: short time ago that we should expect some announcements in 331 00:18:31,200 --> 00:18:33,760 Speaker 2: the days ahead. So the gears are turning on this story. 332 00:18:34,359 --> 00:18:37,080 Speaker 2: As we also understand the President is adding an additional 333 00:18:37,119 --> 00:18:41,480 Speaker 2: twenty five percent tariff on goods from India, which also 334 00:18:41,600 --> 00:18:46,520 Speaker 2: will have repercussions for Russia. Will have much more on 335 00:18:46,520 --> 00:18:48,840 Speaker 2: this as we work our way through the hour, and 336 00:18:48,880 --> 00:18:51,720 Speaker 2: it's a real pleasure as we anticipate the announcement from 337 00:18:51,760 --> 00:18:54,920 Speaker 2: Apple to bring Joela Warna into the conversation, of course, 338 00:18:54,920 --> 00:18:58,720 Speaker 2: economist and counselor to Treasury Secretary Scott Besson, Thanks for 339 00:18:58,720 --> 00:19:00,720 Speaker 2: coming over from the White House. Joe's good to see you, 340 00:19:01,160 --> 00:19:05,440 Speaker 2: my pleasure. One hundred billion dollars in domestic manufacturing is 341 00:19:05,480 --> 00:19:08,359 Speaker 2: a pretty big deal, and I'd like to just get 342 00:19:08,359 --> 00:19:10,640 Speaker 2: inside the process for a little bit with you, because 343 00:19:10,680 --> 00:19:13,960 Speaker 2: we've heard a lot of announcements from corporate officials coming 344 00:19:14,000 --> 00:19:16,359 Speaker 2: to the White House to tell stories like this. How 345 00:19:16,400 --> 00:19:18,520 Speaker 2: does it begin? Does the White House reach out to 346 00:19:18,520 --> 00:19:22,400 Speaker 2: a Tim Cook to talk about investments that could be made. 347 00:19:22,480 --> 00:19:24,520 Speaker 2: Does Apple call the White House and say, hey, we've 348 00:19:24,560 --> 00:19:25,040 Speaker 2: got a plan. 349 00:19:26,160 --> 00:19:28,080 Speaker 7: What we first start with is that we have to 350 00:19:28,119 --> 00:19:31,800 Speaker 7: extend the Tax Cuts and Jobs Act of twenty seventeen, 351 00:19:31,840 --> 00:19:35,200 Speaker 7: and that was a priority of President Trump's and Secretary 352 00:19:35,240 --> 00:19:38,919 Speaker 7: Best and spearhead of that operation. And then I think 353 00:19:39,000 --> 00:19:41,320 Speaker 7: from there it's like, Okay, what can we do to 354 00:19:41,359 --> 00:19:45,040 Speaker 7: build upon the success of the first administration where President 355 00:19:45,040 --> 00:19:48,080 Speaker 7: Trump had very strong non inflationary growth. Growth was nearly 356 00:19:48,119 --> 00:19:50,800 Speaker 7: three percent for the first three years, almost three and 357 00:19:50,840 --> 00:19:54,080 Speaker 7: a half percent in the third year, right before the pandemic. 358 00:19:54,640 --> 00:19:56,320 Speaker 7: And then you sort of figure out, Okay, how do 359 00:19:56,359 --> 00:20:00,320 Speaker 7: you build the best economy possible with pro growth of 360 00:20:00,680 --> 00:20:04,000 Speaker 7: tax structures, cheap and abundant energy, and friendly business regulation. 361 00:20:04,400 --> 00:20:05,600 Speaker 8: And you just see what happens. 362 00:20:05,640 --> 00:20:08,240 Speaker 2: So the White House make the outreach company as well. 363 00:20:09,119 --> 00:20:10,639 Speaker 7: That's not my innesting, No, I think it's one of 364 00:20:10,680 --> 00:20:13,880 Speaker 7: the things where let me see this from my own 365 00:20:14,280 --> 00:20:16,600 Speaker 7: advantage point. I know that I was when I'm lucky 366 00:20:16,680 --> 00:20:19,560 Speaker 7: enough to be in this position. People say can I help? 367 00:20:19,600 --> 00:20:21,679 Speaker 7: What can I do to help? And it could be 368 00:20:21,840 --> 00:20:24,400 Speaker 7: both sides of the aisle. People really they appreciate public 369 00:20:24,480 --> 00:20:27,000 Speaker 7: service and want to help out. That's probably what happens 370 00:20:27,000 --> 00:20:29,200 Speaker 7: at the corporate level is that Okay, how can we 371 00:20:29,359 --> 00:20:32,240 Speaker 7: make things better? And of course the incentive structure is 372 00:20:32,280 --> 00:20:34,639 Speaker 7: in place for companies to want to invest here. This 373 00:20:34,720 --> 00:20:37,200 Speaker 7: is like with all these trade deals that the Secretary 374 00:20:37,240 --> 00:20:40,680 Speaker 7: has helped broker. People want to bring foreign capital into 375 00:20:40,720 --> 00:20:43,359 Speaker 7: the US and they're incentivized to do it. When the 376 00:20:43,400 --> 00:20:47,520 Speaker 7: tax structure is friendly, the energy and business environment are friendly, 377 00:20:47,600 --> 00:20:49,800 Speaker 7: like it all, it all becomes very additive. So I 378 00:20:49,880 --> 00:20:52,720 Speaker 7: think it's it's probably a two way street. But the 379 00:20:52,760 --> 00:20:54,919 Speaker 7: point is that people are making the commitment Joe, and 380 00:20:54,960 --> 00:20:56,359 Speaker 7: that that's unprecedented. 381 00:20:56,440 --> 00:20:59,480 Speaker 2: Well, we talk about reshoring. That could mean a lot 382 00:20:59,520 --> 00:21:03,159 Speaker 2: of different things. There was a point at which the 383 00:21:03,160 --> 00:21:06,480 Speaker 2: Commerce Secretary, Howard Lutnix, suggested that we start making iPhones 384 00:21:06,520 --> 00:21:08,560 Speaker 2: here in the United States, that that should in fact 385 00:21:08,600 --> 00:21:11,080 Speaker 2: be possible. We just talked to Ed Ludlow before you 386 00:21:11,119 --> 00:21:12,600 Speaker 2: sat down with us, and he said, that's not what 387 00:21:12,640 --> 00:21:14,720 Speaker 2: this is about. There's there're going to be different incentives. 388 00:21:14,720 --> 00:21:17,720 Speaker 2: When it comes to domestic manufacturing. How important is it 389 00:21:17,760 --> 00:21:20,000 Speaker 2: for the White House to have Tim Cook make iPhones 390 00:21:20,000 --> 00:21:21,800 Speaker 2: here in the US or is that never going to happen. 391 00:21:21,840 --> 00:21:25,959 Speaker 7: What matters is high value added manufacturing jobs, whatever that 392 00:21:26,040 --> 00:21:30,680 Speaker 7: might be, evil technology phones, These technologies, Joe, are changing 393 00:21:30,720 --> 00:21:34,480 Speaker 7: so rapidly. But you know, the administration really wants to 394 00:21:34,520 --> 00:21:40,159 Speaker 7: have the best high growth, low inflation, high cost, a 395 00:21:40,240 --> 00:21:43,159 Speaker 7: high standard of living, low cost of high standard of living, 396 00:21:43,480 --> 00:21:46,280 Speaker 7: low cost of living society possible. 397 00:21:46,440 --> 00:21:47,600 Speaker 8: And those jobs take. 398 00:21:47,760 --> 00:21:51,320 Speaker 7: The automobile industry, very important industry, a lot of high tech, 399 00:21:51,720 --> 00:21:53,760 Speaker 7: high value added type of employment. 400 00:21:54,520 --> 00:21:55,440 Speaker 8: Things related to that. 401 00:21:55,440 --> 00:21:58,360 Speaker 7: That's what matters most, and that's what the administration cares about. 402 00:21:58,440 --> 00:22:01,080 Speaker 7: We talk about a blue collar wage boom. You want 403 00:22:01,080 --> 00:22:03,200 Speaker 7: those kind of good you want good paying jobs, whatever 404 00:22:03,200 --> 00:22:03,600 Speaker 7: they might be. 405 00:22:03,760 --> 00:22:05,800 Speaker 8: As it comes to low end manifesturers, it's the low 406 00:22:05,880 --> 00:22:06,560 Speaker 8: end manue it's. 407 00:22:06,440 --> 00:22:10,200 Speaker 2: Right making socks here in the US. Again, really interesting 408 00:22:10,800 --> 00:22:15,000 Speaker 2: the spend on AI that we're seeing a fascinating piece 409 00:22:15,000 --> 00:22:18,679 Speaker 2: of information that I saw research earlier that the capex 410 00:22:18,720 --> 00:22:21,159 Speaker 2: from AI is actually adding more to the economy than 411 00:22:21,200 --> 00:22:24,080 Speaker 2: consumer spending. Right at the moment, A lot of this 412 00:22:24,119 --> 00:22:28,359 Speaker 2: has been announced inside the White House, of course, Jensen Wong. 413 00:22:28,480 --> 00:22:33,159 Speaker 2: We think of the the Larry Ellison Open AI announcement. 414 00:22:33,200 --> 00:22:36,040 Speaker 2: I could just keep ongoing here the money from soft Bank. 415 00:22:36,280 --> 00:22:41,199 Speaker 2: Do you worry that CAPEX from AI is essentially single 416 00:22:41,240 --> 00:22:44,960 Speaker 2: handedly propping up the economy here that it's more narrow 417 00:22:45,040 --> 00:22:45,880 Speaker 2: investment than we. 418 00:22:45,960 --> 00:22:48,879 Speaker 7: Know, because first of all, the AI has been very strong. 419 00:22:48,960 --> 00:22:52,080 Speaker 7: That shows up in information processing and related equipment within 420 00:22:52,119 --> 00:22:56,639 Speaker 7: the GDP accounts, But industrial equipment's been strong, Transportation equipment 421 00:22:56,680 --> 00:22:59,800 Speaker 7: has been strong. We're talking about a cop capex comeback 422 00:23:00,119 --> 00:23:03,720 Speaker 7: that's not just limited to AI. Having said that, when 423 00:23:03,760 --> 00:23:06,280 Speaker 7: you have an industry that's growing as rapidly and as 424 00:23:06,280 --> 00:23:09,800 Speaker 7: exponentially as it is, the math is going to be 425 00:23:09,840 --> 00:23:11,920 Speaker 7: more additive than say the consumer side. 426 00:23:11,960 --> 00:23:14,160 Speaker 8: In other words, we're looking at second derivatives. 427 00:23:14,200 --> 00:23:16,880 Speaker 7: If something is a small but growing, largely growing part 428 00:23:16,920 --> 00:23:19,960 Speaker 7: of the economy, it's incremental growth for a quarter or 429 00:23:19,960 --> 00:23:22,080 Speaker 7: two is going to be faster. But the point is, 430 00:23:22,119 --> 00:23:24,720 Speaker 7: if you get this cap X comeback tight end with 431 00:23:24,720 --> 00:23:27,760 Speaker 7: the blue collar boom we're seeing in wages, real wages expanding, 432 00:23:28,000 --> 00:23:29,120 Speaker 7: consumer spending. 433 00:23:28,880 --> 00:23:30,439 Speaker 8: Is going to be strong. That's going to power the 434 00:23:30,480 --> 00:23:31,320 Speaker 8: economy upward. 435 00:23:31,720 --> 00:23:33,880 Speaker 2: I want to ask you about the FED in fact 436 00:23:33,880 --> 00:23:36,480 Speaker 2: that the President was just talking about this last evening, James. 437 00:23:36,520 --> 00:23:38,320 Speaker 2: I don't know if we can spin that back right now, 438 00:23:38,359 --> 00:23:40,160 Speaker 2: but I want to ask you about the search because 439 00:23:40,160 --> 00:23:42,879 Speaker 2: it apparently it's a very short list based on what 440 00:23:42,880 --> 00:23:45,760 Speaker 2: the President was saying yesterday in his conversation with reporters. 441 00:23:45,800 --> 00:23:48,160 Speaker 2: Let's listen to President Trump from yesterday. 442 00:23:48,520 --> 00:23:52,800 Speaker 9: Bed Governor, I'll be making that decision before the end 443 00:23:52,800 --> 00:23:54,919 Speaker 9: of the week and will either decide on one for 444 00:23:55,080 --> 00:23:59,320 Speaker 9: permanence or the four month period the term you know, 445 00:23:59,359 --> 00:24:03,159 Speaker 9: there's a term of about a number of months. We 446 00:24:03,240 --> 00:24:06,120 Speaker 9: have a couple of candidates. Everybody wants it. Okay, it's 447 00:24:06,160 --> 00:24:08,520 Speaker 9: not a couple, but we've narrowed it to a couple 448 00:24:08,520 --> 00:24:11,720 Speaker 9: of candidates. And we've also were looking at the FED 449 00:24:11,840 --> 00:24:16,280 Speaker 9: chair and that's down to four people right now. 450 00:24:18,480 --> 00:24:21,560 Speaker 2: Down to four interesting as we spend time with Joela 451 00:24:21,600 --> 00:24:23,919 Speaker 2: warn you here on balance of power. It's a story 452 00:24:23,960 --> 00:24:27,280 Speaker 2: today on the Bloomberg about the idea of a temporary 453 00:24:27,800 --> 00:24:31,639 Speaker 2: FED governor filling the seat vacated by Governor Kugler. What 454 00:24:31,680 --> 00:24:33,199 Speaker 2: would be the benefit of doing that? Is that an 455 00:24:33,240 --> 00:24:35,320 Speaker 2: idea that you support instead of just going. 456 00:24:35,080 --> 00:24:37,680 Speaker 7: For it right now, it would my understanding, Joe, would 457 00:24:37,680 --> 00:24:41,080 Speaker 7: be have to be Senate confirmed. So you have to 458 00:24:41,119 --> 00:24:43,560 Speaker 7: see what happens on that. And there's only so many months, 459 00:24:43,560 --> 00:24:45,400 Speaker 7: so we'll see what happens. But I don't I don't 460 00:24:45,600 --> 00:24:48,119 Speaker 7: you know the president. The President wants to do it, 461 00:24:48,240 --> 00:24:50,399 Speaker 7: that's great, but we'll have to see then if you 462 00:24:50,400 --> 00:24:52,800 Speaker 7: have to get the Senate on board. But in terms 463 00:24:52,840 --> 00:24:54,720 Speaker 7: of just general people, so you want to know, you 464 00:24:54,720 --> 00:24:56,800 Speaker 7: want to ask you that there's you know, a really 465 00:24:56,800 --> 00:24:59,280 Speaker 7: good crop of folks that could. 466 00:24:59,160 --> 00:25:01,760 Speaker 2: Do the job, the Kevin's it sounds like. And the 467 00:25:01,880 --> 00:25:03,920 Speaker 2: nice thing, the boss is not on the list anymore. 468 00:25:04,080 --> 00:25:05,920 Speaker 7: The nice thing Joe about where I sit right now, 469 00:25:06,040 --> 00:25:07,920 Speaker 7: unlike my prior role, is I have to I don't 470 00:25:07,920 --> 00:25:09,919 Speaker 7: have to say who who I think is good's going 471 00:25:10,000 --> 00:25:10,159 Speaker 7: to be. 472 00:25:10,240 --> 00:25:11,919 Speaker 8: I just know whoever it will be. It'll be somebody 473 00:25:11,960 --> 00:25:12,919 Speaker 8: that will be you're. 474 00:25:12,800 --> 00:25:14,439 Speaker 2: Telling me people, Trump's not going to ask you who 475 00:25:14,520 --> 00:25:15,320 Speaker 2: you think it will be. 476 00:25:15,960 --> 00:25:17,879 Speaker 7: It will be somebody good, Joe, who will have a 477 00:25:17,960 --> 00:25:19,480 Speaker 7: very good relationship with the President. 478 00:25:19,800 --> 00:25:21,040 Speaker 8: Yeah, and that's all. 479 00:25:20,920 --> 00:25:23,240 Speaker 2: The name game aside. Why not just name the next 480 00:25:23,320 --> 00:25:25,080 Speaker 2: chair now and have them still. 481 00:25:25,359 --> 00:25:27,840 Speaker 7: I guess, well, I guess the issue would be that 482 00:25:28,040 --> 00:25:31,720 Speaker 7: and Secretary Besston mentioned this before, and that is if 483 00:25:31,760 --> 00:25:34,240 Speaker 7: you have like a shadow person, yes, maybe that's not 484 00:25:34,280 --> 00:25:37,040 Speaker 7: the best way to go. Uh And by the way, 485 00:25:37,040 --> 00:25:39,440 Speaker 7: the person may not want to have that shadow role 486 00:25:39,520 --> 00:25:42,639 Speaker 7: because then you're sort of in competition with with who 487 00:25:42,760 --> 00:25:44,600 Speaker 7: the you know, with with Jay Powell at the moment. 488 00:25:44,640 --> 00:25:45,760 Speaker 8: So we'll see how that plays out. 489 00:25:45,760 --> 00:25:48,080 Speaker 7: But I think the key point is that you know, 490 00:25:48,119 --> 00:25:50,080 Speaker 7: you're seeing the Fed now talk about the need for 491 00:25:50,119 --> 00:25:52,959 Speaker 7: lower rates. You saw two governors descent that was kind 492 00:25:53,000 --> 00:25:56,159 Speaker 7: of an historic event hadn't happened over thirty years. You've 493 00:25:56,200 --> 00:25:58,080 Speaker 7: seen some of the bank presidents now come out and 494 00:25:58,119 --> 00:25:59,560 Speaker 7: think that rates need to be lowered. 495 00:26:00,080 --> 00:26:01,720 Speaker 8: So I think pretty soon every would be on the 496 00:26:01,760 --> 00:26:02,280 Speaker 8: same page. 497 00:26:02,359 --> 00:26:04,399 Speaker 2: Why lower rates now? If we still haven't gotten to 498 00:26:04,440 --> 00:26:06,480 Speaker 2: two percent that's the benchmark we talked about for the 499 00:26:06,640 --> 00:26:09,720 Speaker 2: entire Biden administration. Does it need to change? Should it 500 00:26:09,720 --> 00:26:11,679 Speaker 2: be three percent? If you start cutting them? 501 00:26:11,800 --> 00:26:14,800 Speaker 7: So the reason, Joe a couplefold. Number one is that 502 00:26:14,960 --> 00:26:17,479 Speaker 7: inflation is a lagging indicator. So if you're waiting for 503 00:26:17,520 --> 00:26:19,840 Speaker 7: inflation to move lower, if you think the trajectories down 504 00:26:19,880 --> 00:26:21,760 Speaker 7: as we think it is, you're waiting too long. 505 00:26:21,840 --> 00:26:22,280 Speaker 8: Number one. 506 00:26:22,359 --> 00:26:25,280 Speaker 7: Number two, the tax bill is written to increase the 507 00:26:25,320 --> 00:26:28,560 Speaker 7: economy's supply potential, so that means you could have fast growth, 508 00:26:28,760 --> 00:26:31,879 Speaker 7: and actually as you increase productive capacity, inflation can drop. 509 00:26:32,280 --> 00:26:33,560 Speaker 7: And then the third piece is if you look at 510 00:26:33,600 --> 00:26:37,720 Speaker 7: interest sensitive areas of the economy, autos, housing, some pockets 511 00:26:37,720 --> 00:26:42,120 Speaker 7: within manufacturing, those areas are soft and would benefit from 512 00:26:42,280 --> 00:26:46,400 Speaker 7: lower rates. And besides, the Fed itself has rates well 513 00:26:46,440 --> 00:26:49,439 Speaker 7: above where the Committee believes that the neutral rate is. 514 00:26:49,800 --> 00:26:51,840 Speaker 7: So I don't think inflation is the fear. In fact, 515 00:26:51,840 --> 00:26:55,960 Speaker 7: if anything, as President Trump highlighted, the inflation was not 516 00:26:56,000 --> 00:26:58,720 Speaker 7: going to be present with the tariffs. That's not shown 517 00:26:58,800 --> 00:27:00,920 Speaker 7: up in the aggregate data, if any of the numbers 518 00:27:00,960 --> 00:27:04,400 Speaker 7: have been weaker, And therefore the Federal ought to take 519 00:27:04,400 --> 00:27:05,680 Speaker 7: that into consideration. 520 00:27:05,240 --> 00:27:07,760 Speaker 2: When you're telling a growth story. Though, since you've been here, 521 00:27:07,800 --> 00:27:10,120 Speaker 2: you've talked about the way the economy is going to grow, 522 00:27:10,119 --> 00:27:12,359 Speaker 2: on the way wages are going to go up. So 523 00:27:12,400 --> 00:27:14,320 Speaker 2: why would it be a sin to keep interest rates 524 00:27:14,359 --> 00:27:16,119 Speaker 2: where they are for a minute to make sure that 525 00:27:16,200 --> 00:27:18,000 Speaker 2: inflation doesn't start moving highering. 526 00:27:17,840 --> 00:27:22,480 Speaker 7: Because the fundamental issue is growth, growth does not cause inflation, Joe. 527 00:27:22,520 --> 00:27:25,600 Speaker 7: And there are too many people within the economics profession 528 00:27:25,640 --> 00:27:27,240 Speaker 7: that believe growth causes inflation. 529 00:27:27,640 --> 00:27:30,280 Speaker 2: This is what every mainstream economists tells us. 530 00:27:30,280 --> 00:27:32,600 Speaker 7: And they're completely wrong. That's why they've been wrong on 531 00:27:32,640 --> 00:27:36,080 Speaker 7: many things, including the tariffs. Is My old boss Larry 532 00:27:36,119 --> 00:27:38,719 Speaker 7: Kudlow would say that, you know, too many people working 533 00:27:39,720 --> 00:27:43,800 Speaker 7: does not cause inflation. Inflation is always in everywhere a 534 00:27:43,920 --> 00:27:45,199 Speaker 7: monetary phenomenon. 535 00:27:46,160 --> 00:27:48,560 Speaker 8: No, not way, no, just no money and credit. 536 00:27:48,600 --> 00:27:51,560 Speaker 7: Money and credit creation are what drive the inflation process, 537 00:27:52,000 --> 00:27:55,679 Speaker 7: not wages, especially wages that are tied to the economy's 538 00:27:55,720 --> 00:27:59,200 Speaker 7: productive capacity growing. In other words, you're starting a business, 539 00:27:59,320 --> 00:28:01,880 Speaker 7: you're building a plan, You're paying those workers to build 540 00:28:01,880 --> 00:28:04,040 Speaker 7: that plant, to create more of the goods and services 541 00:28:04,359 --> 00:28:07,760 Speaker 7: to be delivered to the populace. That's disinflationary. Just as 542 00:28:07,760 --> 00:28:11,320 Speaker 7: you saw again with President Trump's first term, very supply focused. 543 00:28:12,040 --> 00:28:15,400 Speaker 7: President Trump had very strong growth and low and falling inflation. 544 00:28:15,480 --> 00:28:18,000 Speaker 7: So this notion somehow you're gonna have very good growth, 545 00:28:18,000 --> 00:28:20,680 Speaker 7: you're gonna have a boom, and his boom somehow is inflationary, 546 00:28:20,920 --> 00:28:22,800 Speaker 7: is not at all consistent with the data. 547 00:28:22,840 --> 00:28:23,920 Speaker 8: And amazing. 548 00:28:25,320 --> 00:28:26,720 Speaker 2: It's not still Biden data. 549 00:28:27,080 --> 00:28:29,159 Speaker 7: No, I don't know what you meant by that. Yeah, No, 550 00:28:29,280 --> 00:28:32,160 Speaker 7: I mean, look, here's the thing that the one big, 551 00:28:32,160 --> 00:28:35,280 Speaker 7: beautiful bill was passed July fourth. Nobody thought that that 552 00:28:35,320 --> 00:28:37,240 Speaker 7: could be done. The presidents that needed to get done. 553 00:28:37,560 --> 00:28:40,400 Speaker 7: Secretary Best worked hard with the people on the hill 554 00:28:40,440 --> 00:28:42,840 Speaker 7: to get that done, which is a great accomplishment. You've 555 00:28:42,840 --> 00:28:45,840 Speaker 7: got a numerous trade deals that are really making some 556 00:28:45,880 --> 00:28:48,880 Speaker 7: great progress that people didn't think was going to happen. 557 00:28:49,680 --> 00:28:54,040 Speaker 7: Equity markets are strong. The outlook is very, very positive. 558 00:28:54,080 --> 00:28:55,640 Speaker 7: So I think we're going to see a pretty strong 559 00:28:55,640 --> 00:28:58,000 Speaker 7: economy and people know, yeah, look at the cost of living, 560 00:28:58,040 --> 00:29:00,560 Speaker 7: how much it's come down already. Yes, it's president, it's 561 00:29:00,600 --> 00:29:01,520 Speaker 7: the president's economy. 562 00:29:01,520 --> 00:29:02,960 Speaker 2: It's great to spend some time with you. Don't be 563 00:29:03,000 --> 00:29:03,480 Speaker 2: a stranger. 564 00:29:03,520 --> 00:29:03,840 Speaker 8: Thank you. 565 00:29:03,960 --> 00:29:05,760 Speaker 2: I can see as soon. That's Joela. Warney of course, 566 00:29:05,800 --> 00:29:08,360 Speaker 2: made his way over from the White House Counselor to 567 00:29:08,440 --> 00:29:10,240 Speaker 2: Treasury Secretary Scott Bessett. 568 00:29:12,280 --> 00:29:15,760 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 569 00:29:15,840 --> 00:29:19,320 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 570 00:29:19,360 --> 00:29:22,400 Speaker 1: Cocklay and Android Auto with the Bloomberg Business app. You 571 00:29:22,400 --> 00:29:25,880 Speaker 1: can also listen live on Amazon Alexa from our flagship 572 00:29:25,960 --> 00:29:31,560 Speaker 1: New York station, Just say Alexa, play Bloomberg eleven thirty. 573 00:29:31,440 --> 00:29:35,400 Speaker 2: Watching Texas once again as always here, this has become 574 00:29:36,000 --> 00:29:38,280 Speaker 2: quite the story over the past couple of weeks. You've 575 00:29:38,280 --> 00:29:41,480 Speaker 2: heard it emerge right here on Balance of Power. The 576 00:29:41,720 --> 00:29:48,080 Speaker 2: redistricting effort endorsed by President Trump, pursued by Republicans in Texas, 577 00:29:48,600 --> 00:29:52,200 Speaker 2: now stalled by Democrats in the Lone Star state. Of course, 578 00:29:52,240 --> 00:29:55,560 Speaker 2: they have fled, and if you're familiar with this program, 579 00:29:55,640 --> 00:29:59,760 Speaker 2: you've probably heard from several of them, including James Tallerico 580 00:29:59,760 --> 00:30:02,280 Speaker 2: who joined us before this even began to give us 581 00:30:02,280 --> 00:30:04,080 Speaker 2: a sense of what we might be in for here. 582 00:30:04,080 --> 00:30:07,400 Speaker 2: Democrats decided to go for it, went to Chicago, went 583 00:30:07,440 --> 00:30:10,920 Speaker 2: to Albany, went to Boston, and this thing is held 584 00:30:11,000 --> 00:30:14,320 Speaker 2: up in the meantime because they have broken quorum. Right, 585 00:30:14,360 --> 00:30:17,720 Speaker 2: That's how this works. That's why the governor of Texas 586 00:30:18,520 --> 00:30:23,200 Speaker 2: has called for their arrest. And now the Feds here 587 00:30:23,240 --> 00:30:27,920 Speaker 2: by way of Senator Cornyan of Texas Republican senator, are 588 00:30:27,960 --> 00:30:32,360 Speaker 2: calling for the FBI to act and claw these Democrats 589 00:30:32,400 --> 00:30:36,600 Speaker 2: back to Texas. Probably unlikely, but President Trump did address 590 00:30:36,640 --> 00:30:39,120 Speaker 2: this possibility when he spoke to reporters last evening. 591 00:30:39,200 --> 00:30:42,640 Speaker 9: Listen, well, I think they've abandoned the state. Nobody's seen 592 00:30:42,640 --> 00:30:44,880 Speaker 9: anything like it, even though they've done it twice before, 593 00:30:45,760 --> 00:30:48,680 Speaker 9: and in a certain way, it almost looks like they've 594 00:30:48,680 --> 00:30:49,440 Speaker 9: abandoned the state. 595 00:30:49,520 --> 00:30:51,920 Speaker 2: Looks very bad. Yeah, go ahead, please get involved. 596 00:30:51,920 --> 00:30:53,520 Speaker 8: Should the FBI get involved. 597 00:30:53,160 --> 00:30:53,920 Speaker 9: Well, they may have to. 598 00:30:54,200 --> 00:30:54,920 Speaker 10: They may have to. 599 00:30:56,280 --> 00:30:58,360 Speaker 2: They may have to. That's where we start our conversation 600 00:30:58,880 --> 00:31:02,800 Speaker 2: with Ashley Davis, Republican strategist back with US partner at 601 00:31:02,880 --> 00:31:05,160 Speaker 2: S three Group. Ashley, it's great to see you. This 602 00:31:05,200 --> 00:31:07,480 Speaker 2: has become a national story, and we can pick away 603 00:31:07,480 --> 00:31:09,480 Speaker 2: at this from a couple of different angles, because I 604 00:31:09,520 --> 00:31:12,520 Speaker 2: want to ask you about what's happening in other states potentially, 605 00:31:12,560 --> 00:31:16,160 Speaker 2: like Indiana, even Missouri. But to begin with Texas. You 606 00:31:16,160 --> 00:31:19,360 Speaker 2: don't see the FBI going after democrats in other states, 607 00:31:19,400 --> 00:31:20,840 Speaker 2: do you? 608 00:31:20,840 --> 00:31:21,000 Speaker 10: No? 609 00:31:21,160 --> 00:31:23,080 Speaker 11: I do think though, that this is just a lot 610 00:31:23,120 --> 00:31:25,600 Speaker 11: of drama. And even though there is. 611 00:31:25,520 --> 00:31:27,680 Speaker 10: A lot going on in August, August. 612 00:31:27,400 --> 00:31:30,160 Speaker 11: Is usually a slow time, so this is even a 613 00:31:30,200 --> 00:31:33,840 Speaker 11: bigger story. But listen, I think the broader point to this, Joe, 614 00:31:34,280 --> 00:31:40,760 Speaker 11: is that there has been a political politicalization. Excuse me 615 00:31:40,800 --> 00:31:44,360 Speaker 11: on that word for the last over last decade in 616 00:31:44,400 --> 00:31:50,240 Speaker 11: regards to redistricting. It started out in let's just take 617 00:31:50,440 --> 00:31:54,720 Speaker 11: recent history twenty eighteen. In Pennsylvania, Republicans were blaming Democrats 618 00:31:54,760 --> 00:31:59,560 Speaker 11: of being too political. North Carolina twenty twenty, Democrats were 619 00:31:59,560 --> 00:32:02,840 Speaker 11: blaming publicans. Remember Eric Holder spent a decade of his 620 00:32:02,960 --> 00:32:06,720 Speaker 11: life and raised over a billion dollars on redistricting after 621 00:32:06,760 --> 00:32:09,480 Speaker 11: he left Barack Obama. So this is just something as 622 00:32:09,520 --> 00:32:13,120 Speaker 11: a broader point, has just been too political in regards 623 00:32:13,240 --> 00:32:18,360 Speaker 11: to in my opinion, in regards to Texas, obviously this 624 00:32:18,400 --> 00:32:22,200 Speaker 11: has happened before. I think that they left in twenty 625 00:32:22,240 --> 00:32:25,000 Speaker 11: twenty one was the most recent when Democrats did this. Listen, 626 00:32:25,000 --> 00:32:28,120 Speaker 11: when there's a super majority like there isn't in Texas 627 00:32:28,160 --> 00:32:30,640 Speaker 11: and a Republican governor that has a lot of power, 628 00:32:31,240 --> 00:32:34,120 Speaker 11: this is really their only way that they can fight back, 629 00:32:34,200 --> 00:32:37,920 Speaker 11: and it's by using this mechanism. But what it was, Joe, 630 00:32:37,960 --> 00:32:41,280 Speaker 11: I think this ends because of one major reason. It's 631 00:32:41,320 --> 00:32:44,800 Speaker 11: not just redistricting that they're not voting on. They're not 632 00:32:44,920 --> 00:32:48,360 Speaker 11: voting on the flood relief for the horrible situation that 633 00:32:48,480 --> 00:32:51,440 Speaker 11: happened there just a few weeks ago. And I think 634 00:32:51,440 --> 00:32:55,680 Speaker 11: at some point, after maybe a couple more days, a 635 00:32:55,680 --> 00:32:57,800 Speaker 11: couple more days of drama, a couple more days of 636 00:32:57,920 --> 00:33:00,640 Speaker 11: new news headlines, that they're going to have to come 637 00:33:00,680 --> 00:33:04,040 Speaker 11: back and vote on that alone, just because I think politically, 638 00:33:04,080 --> 00:33:05,760 Speaker 11: and you can see it kind of popping up in 639 00:33:05,800 --> 00:33:09,600 Speaker 11: the social media world right now. They're starting to get 640 00:33:09,640 --> 00:33:11,959 Speaker 11: a little bit of blowback because of the flood relief. 641 00:33:13,120 --> 00:33:17,480 Speaker 2: Although I suppose Governor Abbott could isolate this special session 642 00:33:17,560 --> 00:33:20,440 Speaker 2: to flood relief and get to redistricting at another time, 643 00:33:20,440 --> 00:33:22,520 Speaker 2: but of course Democrats will probably just leave that anyway. 644 00:33:22,560 --> 00:33:24,040 Speaker 2: At some point they're going to have to get to this, 645 00:33:24,160 --> 00:33:26,760 Speaker 2: and we've seen this happen before. But I want to 646 00:33:26,760 --> 00:33:28,760 Speaker 2: ask you about other states. You know, everyone jumps to 647 00:33:28,800 --> 00:33:31,320 Speaker 2: California and what the Democrats might do here, what Gavin 648 00:33:31,360 --> 00:33:34,640 Speaker 2: Newsom might have up his sleeve, But Republicans aren't stopping 649 00:33:34,800 --> 00:33:35,560 Speaker 2: in Texas. 650 00:33:35,640 --> 00:33:35,800 Speaker 7: Here. 651 00:33:35,800 --> 00:33:38,480 Speaker 2: It seems the White House is pushing this idea on 652 00:33:38,520 --> 00:33:42,360 Speaker 2: other states, including Indiana, to the extent that jd Vance 653 00:33:42,440 --> 00:33:45,680 Speaker 2: is heading to Indianapolis to sit down with Governor Mike 654 00:33:45,760 --> 00:33:48,120 Speaker 2: Braun to talk about this idea. And granted he is 655 00:33:48,160 --> 00:33:51,720 Speaker 2: there for a fundraiser for the Republican National Committee. But 656 00:33:52,400 --> 00:33:57,760 Speaker 2: to what extent will Republican governors embrace this around the country, Well. 657 00:33:57,640 --> 00:34:00,480 Speaker 11: It depends not just what the regovernors do, but also 658 00:34:00,760 --> 00:34:04,360 Speaker 11: just how much control the state legislatures or Special Commission 659 00:34:04,680 --> 00:34:08,000 Speaker 11: on Redistricting would have an in every state. So it 660 00:34:08,040 --> 00:34:12,200 Speaker 11: really does depend on state by state how it can happen. 661 00:34:12,280 --> 00:34:14,600 Speaker 11: Texas is just a little bit different because of the 662 00:34:14,640 --> 00:34:17,480 Speaker 11: power that the governor in the legislature has on the topic. 663 00:34:17,840 --> 00:34:23,160 Speaker 11: But yes, Indiana, Missouri, two states Republicans are looking at Democrats. Obviously, 664 00:34:23,200 --> 00:34:26,640 Speaker 11: I've heard it newsom New York and also in California 665 00:34:26,640 --> 00:34:31,480 Speaker 11: and New York, Illinois, Minnesota, I think is another one 666 00:34:31,480 --> 00:34:35,000 Speaker 11: that I'm hearing. So listen, all gloves are off. But 667 00:34:36,520 --> 00:34:38,399 Speaker 11: it's not going to be as easy in these other 668 00:34:38,440 --> 00:34:42,160 Speaker 11: states as it is. Yeah, in Texas, and you saw 669 00:34:42,239 --> 00:34:46,360 Speaker 11: what happened even today with Governor Brown saying, or maybe 670 00:34:46,400 --> 00:34:49,239 Speaker 11: it was actually yesterday where he said, listen, I'm going 671 00:34:49,280 --> 00:34:51,200 Speaker 11: to have a conversation. I don't know what can happen 672 00:34:52,120 --> 00:34:54,560 Speaker 11: because he doesn't have a super majority, So it's a 673 00:34:54,600 --> 00:34:55,240 Speaker 11: little bit different. 674 00:34:56,280 --> 00:34:59,960 Speaker 2: Yeah, absolutely, each state has its own kind of fingerprint 675 00:35:00,040 --> 00:35:02,360 Speaker 2: when it comes to this story, Ashley, I want to 676 00:35:02,360 --> 00:35:04,279 Speaker 2: ask you while you're with us about what's happening on 677 00:35:04,360 --> 00:35:07,560 Speaker 2: Capitol Hill or what's about to happen, maybe what's not 678 00:35:07,680 --> 00:35:12,000 Speaker 2: about to happen, because you're so connected to lawmakers and 679 00:35:12,040 --> 00:35:14,279 Speaker 2: their staff on the Hill. We had a bit of 680 00:35:14,320 --> 00:35:20,520 Speaker 2: a breakdown between Democrats and Republicans over nominations last weekend. 681 00:35:20,560 --> 00:35:23,480 Speaker 2: Everybody left town angry. There was no deal between Schumer 682 00:35:23,520 --> 00:35:26,080 Speaker 2: and Thune on this, and it's leading many to believe 683 00:35:26,120 --> 00:35:28,480 Speaker 2: that a government shutdown will be even more likely when 684 00:35:28,520 --> 00:35:31,000 Speaker 2: lawmakers return after the August recess. Is that how you 685 00:35:31,040 --> 00:35:31,959 Speaker 2: see it? 686 00:35:33,760 --> 00:35:36,239 Speaker 11: I feel that every year I hear there's going to 687 00:35:36,280 --> 00:35:39,640 Speaker 11: be a shutdown, and usually ninety five percent of the 688 00:35:39,640 --> 00:35:40,840 Speaker 11: time it doesn't happen. 689 00:35:41,080 --> 00:35:43,840 Speaker 10: So, but there is I'm not ready. 690 00:35:43,560 --> 00:35:45,520 Speaker 11: To say that for sure that we're going to have 691 00:35:45,520 --> 00:35:47,920 Speaker 11: a shutdown, and I'm definitely not. I think we're like 692 00:35:48,680 --> 00:35:52,680 Speaker 11: fifty percent maybe. And what I'm seeing though, is just 693 00:35:52,760 --> 00:35:56,839 Speaker 11: really really bad blood in regards to Democrats and Republicans 694 00:35:57,280 --> 00:36:01,160 Speaker 11: right now because of the Recision Package of Reconciliation. 695 00:36:01,719 --> 00:36:03,279 Speaker 10: And by the way, this happens. 696 00:36:02,960 --> 00:36:06,280 Speaker 11: Every time we were the Republicans and Democrats were fighting 697 00:36:06,360 --> 00:36:10,759 Speaker 11: when Biden did his big two reconciliation bills when he 698 00:36:10,880 --> 00:36:13,239 Speaker 11: was in when the Democrats had control, So this is 699 00:36:13,360 --> 00:36:15,839 Speaker 11: very normal. I'm not real worked up about it right now, 700 00:36:16,080 --> 00:36:18,440 Speaker 11: but I do think there's a broader issue. And the 701 00:36:18,480 --> 00:36:22,000 Speaker 11: broader issue is what Senator Rounds has actually been talking 702 00:36:22,000 --> 00:36:24,040 Speaker 11: about yesterday and today. 703 00:36:24,440 --> 00:36:27,320 Speaker 10: And we have way too many. 704 00:36:27,160 --> 00:36:30,319 Speaker 11: People that have to get Senate confirmed. I believe in 705 00:36:30,480 --> 00:36:33,000 Speaker 11: the institution of the Senate one hundred percent. I think 706 00:36:33,040 --> 00:36:38,000 Speaker 11: it's fantastic tradition. However, no matter what party it is, 707 00:36:38,040 --> 00:36:40,560 Speaker 11: you spend so much time trying to get some of 708 00:36:40,600 --> 00:36:44,000 Speaker 11: these positions through the House, excuse me, through the Senate floor, 709 00:36:44,480 --> 00:36:47,040 Speaker 11: and because of the rules of the Senate, as you know, Joe, 710 00:36:47,040 --> 00:36:50,000 Speaker 11: it just takes a long time. And when you have 711 00:36:50,280 --> 00:36:55,520 Speaker 11: eleven hundred positions that need confirmed, it probably is not necessary. 712 00:36:55,560 --> 00:36:57,719 Speaker 10: So let's walk through this just very quick. 713 00:36:57,760 --> 00:37:01,000 Speaker 11: We have the Supreme Court justices, we have majores, we 714 00:37:01,080 --> 00:37:05,399 Speaker 11: have Cabinet secretaries, maybe even the deputy secretary, and. 715 00:37:06,200 --> 00:37:08,040 Speaker 10: Even I would go and give it to. 716 00:37:09,640 --> 00:37:13,040 Speaker 11: The general counsel of each agency, but I'm not sure 717 00:37:13,040 --> 00:37:18,880 Speaker 11: if the assistant secretary of needs to be Senate confirmed, 718 00:37:19,760 --> 00:37:25,040 Speaker 11: or here's a perfect example, Joe. Last to last Trump administration, 719 00:37:25,120 --> 00:37:28,359 Speaker 11: I was put up for the board appointment for the 720 00:37:28,480 --> 00:37:29,840 Speaker 11: National and Downard of the Arts. 721 00:37:30,000 --> 00:37:33,839 Speaker 10: It was a Senate confirmed position. There is no reason that. 722 00:37:33,920 --> 00:37:37,000 Speaker 11: Composition needs to be confirmed and take up Senate four time. 723 00:37:37,280 --> 00:37:38,880 Speaker 10: So that's what I'm saying. I think we could do 724 00:37:39,080 --> 00:37:39,920 Speaker 10: some selves. 725 00:37:39,680 --> 00:37:42,360 Speaker 2: Like some procedures or maybe rules are going to be 726 00:37:42,440 --> 00:37:45,040 Speaker 2: changing here and maybe the way that they're even pasted 727 00:37:45,040 --> 00:37:47,200 Speaker 2: in the Senate. Actually, it's great to have you as always, 728 00:37:47,239 --> 00:37:50,960 Speaker 2: Ashley Davis s three group Republican strategists that we learn 729 00:37:51,080 --> 00:37:56,080 Speaker 2: a lot from on and off the air. Thanks for 730 00:37:56,120 --> 00:37:59,239 Speaker 2: listening to the Balance of Power podcast. Make sure to 731 00:37:59,239 --> 00:38:02,520 Speaker 2: subscribe you haven't already an Apple, Spotify, or wherever you 732 00:38:02,560 --> 00:38:05,319 Speaker 2: get your podcasts, and you can find us live every 733 00:38:05,360 --> 00:38:09,600 Speaker 2: weekday from Washington, DC at noontime Eastern at Bloomberg dot com.