1 00:00:00,320 --> 00:00:04,160 Speaker 1: Who you put your trust in matters. Investors have put 2 00:00:04,200 --> 00:00:07,640 Speaker 1: their trust in independent registered investment advisors to the tune 3 00:00:07,640 --> 00:00:12,240 Speaker 1: of four trillion dollars. Why learn more and find your 4 00:00:12,240 --> 00:00:27,960 Speaker 1: independent advisor dot com. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:28,360 --> 00:00:32,040 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:32,120 --> 00:00:37,120 Speaker 1: insight from the best in economics, finance, investment, and international relations. 7 00:00:37,560 --> 00:00:42,120 Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot com, and 8 00:00:42,200 --> 00:00:49,680 Speaker 1: of course, on the Bloomberg. Our first guest this morning 9 00:00:49,680 --> 00:00:51,680 Speaker 1: Sheila Bear, former chair of the f D. I see 10 00:00:51,720 --> 00:00:54,800 Speaker 1: the fiddle deposit by Insurance Corporation, now the president of 11 00:00:54,880 --> 00:00:57,040 Speaker 1: Washington At College and Shell. It's great to have you 12 00:00:57,040 --> 00:00:59,480 Speaker 1: with us again. Thanks for having me. Let me start 13 00:00:59,560 --> 00:01:01,880 Speaker 1: with with personnel. We are so focused here on who 14 00:01:01,960 --> 00:01:04,600 Speaker 1: Donald Trump is going to appoint for for what are 15 00:01:04,640 --> 00:01:07,680 Speaker 1: we overplaying the role of these personnel picks at this 16 00:01:07,720 --> 00:01:11,120 Speaker 1: point in the transition. Well, no, I think the personnel 17 00:01:11,160 --> 00:01:14,920 Speaker 1: picks are very important, especially in the financial regulatory agencies. 18 00:01:15,000 --> 00:01:17,919 Speaker 1: You know, Dodd Frank. For all the rhetoric about Dodd Frank, 19 00:01:18,400 --> 00:01:20,840 Speaker 1: it really was just a big grant of authority to 20 00:01:21,400 --> 00:01:23,720 Speaker 1: the Secretary of Treasury and the head of the various 21 00:01:23,720 --> 00:01:27,280 Speaker 1: secondal regulators, so financial regulators. So I do think these 22 00:01:27,280 --> 00:01:29,440 Speaker 1: appointments are are very key in terms of what kinds 23 00:01:29,440 --> 00:01:32,880 Speaker 1: of policies will be pursuing going forward. She love, What 24 00:01:32,880 --> 00:01:36,120 Speaker 1: do we know about the way Donald Trump makes these appointments. 25 00:01:36,280 --> 00:01:40,800 Speaker 1: He's been favoring loyalists so far. Will that try? Yeah, well, 26 00:01:40,800 --> 00:01:43,800 Speaker 1: I don't know. I don't know. The gentleman and uh, 27 00:01:44,280 --> 00:01:46,399 Speaker 1: it strikes me that he's that kind of personality that's 28 00:01:46,440 --> 00:01:49,800 Speaker 1: going to be giving high priority to people who supported 29 00:01:49,880 --> 00:01:52,640 Speaker 1: him and were loyal to him during the campaign, and 30 00:01:52,720 --> 00:01:55,840 Speaker 1: so that's that's good. I think appointments can also some 31 00:01:55,920 --> 00:01:59,240 Speaker 1: should include unity appointments obviously all of them. You want 32 00:01:59,320 --> 00:02:03,560 Speaker 1: high quality, experienced people who will be able to be 33 00:02:03,640 --> 00:02:06,240 Speaker 1: effective in their jobs. But it does strike me that 34 00:02:06,320 --> 00:02:08,640 Speaker 1: he's a he's a person that puts a high premium 35 00:02:08,639 --> 00:02:11,720 Speaker 1: on loyalty. You've written this open letter to to Donald Trump. 36 00:02:11,760 --> 00:02:15,320 Speaker 1: Another president of Washington College and in that capacity interact 37 00:02:15,360 --> 00:02:18,120 Speaker 1: a lot with young people, and I wonderstand what prompted 38 00:02:18,160 --> 00:02:20,120 Speaker 1: you to do that and sort of what you're calling 39 00:02:20,160 --> 00:02:24,680 Speaker 1: upon him to do. Well, I do think that they 40 00:02:24,720 --> 00:02:27,160 Speaker 1: were actually two things in the letter. One was in 41 00:02:27,240 --> 00:02:30,799 Speaker 1: others have have suggested that I think students, particularly students 42 00:02:30,840 --> 00:02:32,880 Speaker 1: of color, are somewhat fearful. There was a lot of 43 00:02:32,880 --> 00:02:37,880 Speaker 1: heated rhetoric during the campaign. They're fearful that Mr. Trump 44 00:02:37,960 --> 00:02:41,640 Speaker 1: selection will could be interpreted by some as a as 45 00:02:41,760 --> 00:02:46,120 Speaker 1: a you know, of a ratification of biased sentiments. I 46 00:02:46,160 --> 00:02:48,320 Speaker 1: don't think that's what Mr Trump stands for, what his 47 00:02:48,360 --> 00:02:51,600 Speaker 1: presidency stands for, but that's certainly a perception, and and 48 00:02:51,639 --> 00:02:53,760 Speaker 1: some of our students are fearful, and I think could 49 00:02:53,800 --> 00:02:57,160 Speaker 1: to the extent he could make strong statements against bias, 50 00:02:57,200 --> 00:03:00,960 Speaker 1: against harassment, antonidation of any kind against students of color 51 00:03:01,280 --> 00:03:05,440 Speaker 1: or other groups that have been historically discriminated against. That 52 00:03:05,440 --> 00:03:08,200 Speaker 1: would be reassuring, you know, and everybody in the country 53 00:03:08,280 --> 00:03:10,160 Speaker 1: is rooting. I think that's one of the sad things 54 00:03:10,200 --> 00:03:13,480 Speaker 1: about the selection if it did so profoundly a breakout 55 00:03:13,520 --> 00:03:17,160 Speaker 1: on racial lines, because really working families, whether you're whether 56 00:03:17,160 --> 00:03:19,680 Speaker 1: you're white, or whether you're a person of color, people 57 00:03:19,720 --> 00:03:23,160 Speaker 1: have been struggling, and I think it was that constituency 58 00:03:23,280 --> 00:03:25,960 Speaker 1: who he's he's trying to reach. I hope sincerely so, 59 00:03:26,560 --> 00:03:28,720 Speaker 1: and we will help the working class where we've not 60 00:03:28,840 --> 00:03:33,680 Speaker 1: had to not very robust good job growth until lately, 61 00:03:34,200 --> 00:03:37,960 Speaker 1: virtually no improvement in real wages. So that middle class 62 00:03:37,960 --> 00:03:40,480 Speaker 1: segment is really who he's trying to reach, and I 63 00:03:40,480 --> 00:03:43,200 Speaker 1: think that should be unifying theme and hopefully he can 64 00:03:43,240 --> 00:03:45,560 Speaker 1: reinforce that through his public statements. But I do think 65 00:03:45,560 --> 00:03:49,600 Speaker 1: he needs to make very very strong statements against discrimination, intimidation, 66 00:03:49,680 --> 00:03:52,160 Speaker 1: harassment in any form. I think students across the country 67 00:03:52,200 --> 00:03:55,000 Speaker 1: would find that reassuring. And so do you see this coming? 68 00:03:55,240 --> 00:03:58,280 Speaker 1: It seems that with his latest tweets talking about serious 69 00:03:58,400 --> 00:04:01,440 Speaker 1: voter fraud in Virginia and I'm in California about the 70 00:04:01,440 --> 00:04:03,960 Speaker 1: popular vote, he's he doesn't seem like a president like 71 00:04:04,080 --> 00:04:06,560 Speaker 1: to really wants to unify the country. Am I wrong? Yeah? Well, 72 00:04:06,760 --> 00:04:08,400 Speaker 1: I hope I want to still give him the bedf 73 00:04:08,400 --> 00:04:10,960 Speaker 1: of the doubt. I think his victory speech was was 74 00:04:11,000 --> 00:04:14,920 Speaker 1: a very good one. It sounded sincere to me, it 75 00:04:15,000 --> 00:04:17,640 Speaker 1: sounded unifying. He said he wanted to be the president 76 00:04:17,640 --> 00:04:19,320 Speaker 1: of all Americans. He was going to be the president 77 00:04:19,360 --> 00:04:22,440 Speaker 1: of all Americans. So I hope that's the tunnel Trump 78 00:04:22,680 --> 00:04:26,080 Speaker 1: we see um And uh, you know, I I hope 79 00:04:26,120 --> 00:04:28,479 Speaker 1: he and his advisors will be very careful in terms 80 00:04:28,480 --> 00:04:31,040 Speaker 1: of thinking how his words could be interpreted by some 81 00:04:31,160 --> 00:04:33,839 Speaker 1: as a threatening or intimidating and that's absolutely the wrong 82 00:04:33,920 --> 00:04:36,840 Speaker 1: signal we want to send to people, especially young people 83 00:04:36,839 --> 00:04:39,640 Speaker 1: in our country. Let me ask you about your sense 84 00:04:39,680 --> 00:04:42,520 Speaker 1: of of what regulation is going to look like under 85 00:04:42,520 --> 00:04:44,720 Speaker 1: a Donald Trump presidency. Of course, Mary Joe White, the 86 00:04:44,760 --> 00:04:46,400 Speaker 1: head of the SEC, saying she's going to step down 87 00:04:46,400 --> 00:04:48,240 Speaker 1: at the end of President Obama's term, a number of 88 00:04:48,320 --> 00:04:50,600 Speaker 1: vacancies there, but we're really looking at sort of a 89 00:04:51,120 --> 00:04:55,400 Speaker 1: full scale personnel overhaul across the regulatory agencies. What's your 90 00:04:55,480 --> 00:04:57,919 Speaker 1: your sense of your understanding of what regulation is going 91 00:04:57,960 --> 00:05:01,400 Speaker 1: to look like. Well, I'm not sure. I'm hoping we'll 92 00:05:01,440 --> 00:05:04,400 Speaker 1: see smart regulation, not no regulation. I think we tried 93 00:05:04,440 --> 00:05:08,600 Speaker 1: the no regulation, very light touch, uh, you know, relying 94 00:05:08,600 --> 00:05:11,640 Speaker 1: on self correcting markets, which clearly didn't work prior to 95 00:05:11,680 --> 00:05:15,240 Speaker 1: the crisis. So you do need some strong, common sense regulation, 96 00:05:15,400 --> 00:05:18,159 Speaker 1: which I hope he preserves, you know, things like stronger 97 00:05:18,200 --> 00:05:24,159 Speaker 1: capital requirements. I think everybody conservative, liberal, progressive, uh, libertarian, 98 00:05:24,200 --> 00:05:29,040 Speaker 1: everybody understands that these large financial institutions were relying far 99 00:05:29,080 --> 00:05:31,200 Speaker 1: too much on broad money. They needed to have more 100 00:05:31,600 --> 00:05:33,840 Speaker 1: common equity, more skin in the game. That would give 101 00:05:33,880 --> 00:05:38,160 Speaker 1: them um grit, better incentives to to tamper temper risk 102 00:05:38,200 --> 00:05:42,880 Speaker 1: taking and also to aline economic incentives and have a 103 00:05:42,920 --> 00:05:46,000 Speaker 1: cushion to absorb losses if you get into a down term, 104 00:05:46,000 --> 00:05:48,160 Speaker 1: which they didn't have. So I'm hoping at least some 105 00:05:48,320 --> 00:05:51,640 Speaker 1: really basic things like capital he continues course and actually 106 00:05:51,680 --> 00:05:55,200 Speaker 1: strengthens them. Uh. And that's something jeb hinzer Ling, while 107 00:05:55,200 --> 00:05:57,600 Speaker 1: he would de regulate in other areas, has pushed for 108 00:05:57,680 --> 00:06:01,000 Speaker 1: much stronger capital requirements as a trade off for less 109 00:06:01,040 --> 00:06:03,320 Speaker 1: regulation in other areas. So I hope that that's what 110 00:06:03,480 --> 00:06:05,800 Speaker 1: helped pursue. You know where where the party is going 111 00:06:05,800 --> 00:06:07,440 Speaker 1: to be and whether his administration is going to be 112 00:06:07,480 --> 00:06:10,000 Speaker 1: on glass to equal that was in the party platform. 113 00:06:10,080 --> 00:06:12,880 Speaker 1: I don't know to what extent he feels um committed 114 00:06:12,920 --> 00:06:15,520 Speaker 1: to that, but that is again by partison. There's a 115 00:06:15,560 --> 00:06:18,440 Speaker 1: lot of bipartisan interest in restoring glass to eagle and 116 00:06:18,560 --> 00:06:22,040 Speaker 1: dividing and particularly investment banking and commercial banking once again, 117 00:06:22,760 --> 00:06:26,200 Speaker 1: so I do think in terms of financial regulation, you 118 00:06:26,279 --> 00:06:28,760 Speaker 1: need to make a distinction as to where he might 119 00:06:28,800 --> 00:06:32,880 Speaker 1: go in other other areas. But we can We tried 120 00:06:32,920 --> 00:06:35,600 Speaker 1: no regulation for out of the crisis. Ironically, I think 121 00:06:35,600 --> 00:06:39,440 Speaker 1: this very light touch regulatory environment they brought us the 122 00:06:39,480 --> 00:06:43,400 Speaker 1: crisis is in large part responsible for getting him elected. 123 00:06:43,440 --> 00:06:47,520 Speaker 1: I think there's a backlash continuing against the crisis, the 124 00:06:47,560 --> 00:06:49,600 Speaker 1: bailouts to follow the sense that there was one set 125 00:06:49,600 --> 00:06:51,520 Speaker 1: of rules for the big banks, another sent rules for 126 00:06:51,560 --> 00:06:54,720 Speaker 1: everybody else. So that helped propel him to the wide House. 127 00:06:54,720 --> 00:06:56,680 Speaker 1: And it would be really ironic if he created a 128 00:06:56,680 --> 00:07:00,160 Speaker 1: regulatory environment that gave us a successive risk to king 129 00:07:00,200 --> 00:07:02,159 Speaker 1: and brought us another crisis again. I hope that's not 130 00:07:02,200 --> 00:07:04,280 Speaker 1: what happened, right, and she this is you know, when 131 00:07:04,279 --> 00:07:06,400 Speaker 1: we talk about the regulation, we talk about Wall Street, 132 00:07:06,440 --> 00:07:08,480 Speaker 1: we talked about build you know, big banks, but actually 133 00:07:08,480 --> 00:07:11,040 Speaker 1: we talk about also the oil sector, a whole load 134 00:07:11,120 --> 00:07:13,400 Speaker 1: of sector. If you do you regulate too much, does 135 00:07:13,440 --> 00:07:18,760 Speaker 1: it not actually amplify inequality? Well it could, you know, 136 00:07:19,160 --> 00:07:22,320 Speaker 1: it very well could. And ironically, a lot of the 137 00:07:22,400 --> 00:07:24,840 Speaker 1: policies I think unintentionally, a lot of the policies that 138 00:07:24,960 --> 00:07:28,920 Speaker 1: pursued in the current administration did tremendously help the wealthy 139 00:07:29,040 --> 00:07:32,040 Speaker 1: and large corporations. You know, you implement if you use 140 00:07:32,080 --> 00:07:34,680 Speaker 1: monetary policies to chartists to imulate the economy, which is 141 00:07:34,720 --> 00:07:38,400 Speaker 1: basically what we've done for the past eight years. Which 142 00:07:38,400 --> 00:07:40,960 Speaker 1: we have is a situation where very wealthy people benefit 143 00:07:41,000 --> 00:07:44,720 Speaker 1: because financial assets their value was inflated. It's very easy 144 00:07:44,760 --> 00:07:47,880 Speaker 1: for large corporations to access the debt markets to raise funding, 145 00:07:48,400 --> 00:07:51,640 Speaker 1: much harder for smaller entities that rely on bank learning 146 00:07:51,640 --> 00:07:54,280 Speaker 1: with these very low interest rates to access the credit 147 00:07:54,360 --> 00:07:58,480 Speaker 1: that they need. So I do hope that all policies 148 00:07:58,520 --> 00:08:01,680 Speaker 1: that he pursues are I waited to the prism of 149 00:08:01,760 --> 00:08:04,080 Speaker 1: how this is going to impact the working class, and 150 00:08:04,120 --> 00:08:06,920 Speaker 1: that is who got him elected, and uh, you know 151 00:08:07,120 --> 00:08:09,400 Speaker 1: more the same where we just really whether it's it's 152 00:08:09,480 --> 00:08:13,080 Speaker 1: under different guys, but we just continue helping those who 153 00:08:13,120 --> 00:08:15,960 Speaker 1: have but they have already. I don't think that's going 154 00:08:16,000 --> 00:08:18,400 Speaker 1: to be good politically or good for the economy. You 155 00:08:18,440 --> 00:08:20,720 Speaker 1: need a growing middle class to have a healthy economy, 156 00:08:21,000 --> 00:08:22,800 Speaker 1: and we have not had that for several years now. 157 00:08:22,920 --> 00:08:25,840 Speaker 1: Shell you mentioned that the party platform and Glass Steagle 158 00:08:25,880 --> 00:08:28,680 Speaker 1: and all of that. You are registered Republican. Have you 159 00:08:28,720 --> 00:08:31,000 Speaker 1: emerged from from this campaign this election with a different 160 00:08:31,040 --> 00:08:33,440 Speaker 1: sense of your allegiance to that party or or or 161 00:08:33,480 --> 00:08:34,760 Speaker 1: does it stay the same in other words, if you 162 00:08:34,760 --> 00:08:37,720 Speaker 1: had to reckon with that at all, Yeah, well, you 163 00:08:37,720 --> 00:08:39,760 Speaker 1: know I did. I was very troubled by a lot 164 00:08:39,800 --> 00:08:42,920 Speaker 1: of the statements that were made during the campaign. I 165 00:08:43,160 --> 00:08:46,040 Speaker 1: actually vote it for the libertarian ticket. Um My my 166 00:08:46,080 --> 00:08:49,080 Speaker 1: son actually convinced me he's a libertarian and as a 167 00:08:49,120 --> 00:08:52,160 Speaker 1: bit of a vote, a wake up vote to the 168 00:08:52,200 --> 00:08:54,080 Speaker 1: Republican Party, I do think we need to be a 169 00:08:54,080 --> 00:08:57,199 Speaker 1: party of inclusion, a big tent not a small tent party. Again, 170 00:08:57,200 --> 00:09:01,360 Speaker 1: I'm hopeful given his acceptance speech to that direction, Mr 171 00:09:01,400 --> 00:09:04,000 Speaker 1: Trump is going to pursue. So I really think this 172 00:09:04,120 --> 00:09:06,880 Speaker 1: is making or break at time. Though we have you know, 173 00:09:06,960 --> 00:09:10,760 Speaker 1: we had a very strong electoral results. Both the presidency 174 00:09:10,760 --> 00:09:12,720 Speaker 1: as well as both Houses of Congress are now under 175 00:09:12,720 --> 00:09:17,240 Speaker 1: Republican control. We have an opportunity to to change policies 176 00:09:17,240 --> 00:09:18,840 Speaker 1: in a way that are going to help our economy 177 00:09:18,840 --> 00:09:21,559 Speaker 1: and help our middle class. And I think they're good 178 00:09:21,600 --> 00:09:24,720 Speaker 1: Republican ways. Through tax reform where you lower the top rates, 179 00:09:24,760 --> 00:09:27,360 Speaker 1: but you also broughten the base so you you you 180 00:09:27,480 --> 00:09:30,560 Speaker 1: don't lose a lot of revenue. I think you can 181 00:09:30,600 --> 00:09:35,439 Speaker 1: do smart infrastructure spending through uh uh policies that take 182 00:09:35,440 --> 00:09:37,600 Speaker 1: advantage of these low interest rates between have and done, 183 00:09:37,600 --> 00:09:40,520 Speaker 1: but also rely on user fees or there's been proposals 184 00:09:40,559 --> 00:09:44,200 Speaker 1: to you know, wind falls associated with green with repatriating 185 00:09:44,200 --> 00:09:47,040 Speaker 1: a lot of the overseas income that's been trapped because 186 00:09:47,040 --> 00:09:50,200 Speaker 1: of our our ill advised at tax policies, using some 187 00:09:50,240 --> 00:09:52,440 Speaker 1: of that to pay for instructure infrastructure. I think there's 188 00:09:52,480 --> 00:09:55,280 Speaker 1: ways you can provide similar about blowing a hole in 189 00:09:55,320 --> 00:09:57,280 Speaker 1: the budget. Sheila, thank you so much of libert there 190 00:09:57,320 --> 00:10:12,680 Speaker 1: washing and college president. This is Bloomberg. If del Castro 191 00:10:12,760 --> 00:10:15,439 Speaker 1: passed away over the weekend, long time leader of Cuba, 192 00:10:15,520 --> 00:10:17,840 Speaker 1: jan is not to talk more about him, his legacy 193 00:10:17,920 --> 00:10:20,360 Speaker 1: and what happens next to Cuba U S relations. Is 194 00:10:20,400 --> 00:10:22,599 Speaker 1: Julius Wig. She's senior research fellow at the Lyndon B. 195 00:10:22,679 --> 00:10:25,240 Speaker 1: Johnson School of Public Affairs at the University of Texas, Austin, 196 00:10:25,240 --> 00:10:29,079 Speaker 1: author of Cuba What everyone needs to know, Julie, great 197 00:10:29,120 --> 00:10:31,720 Speaker 1: to speak with you, Good morning, Thanks for having me, 198 00:10:31,840 --> 00:10:34,320 Speaker 1: Thanks for taking the time. Give us a sense of 199 00:10:34,320 --> 00:10:36,800 Speaker 1: the significance here. Of course, Fidel Castro had seated a 200 00:10:36,840 --> 00:10:40,480 Speaker 1: lot of administrative responsibility to his brother. What does this 201 00:10:40,559 --> 00:10:42,360 Speaker 1: mean going forward? In other words, how does the country 202 00:10:42,360 --> 00:10:46,560 Speaker 1: pick up from here. Well, you're you're correct. Really, for 203 00:10:46,559 --> 00:10:49,480 Speaker 1: the better part of the last ten years, Fidel Castro 204 00:10:49,600 --> 00:10:53,840 Speaker 1: has been not entirely off the political stage, but certainly 205 00:10:53,880 --> 00:10:58,760 Speaker 1: off the stage of governance and governments and policy guidance, 206 00:10:59,160 --> 00:11:01,920 Speaker 1: and really off the political stage for the last few years. 207 00:11:01,960 --> 00:11:05,880 Speaker 1: So this does not portend any kind of earthquake or 208 00:11:06,040 --> 00:11:08,840 Speaker 1: radical change in terms of how Cuba is rung in 209 00:11:08,960 --> 00:11:13,640 Speaker 1: terms of the economic reform process that Raoul Castro started 210 00:11:13,679 --> 00:11:17,520 Speaker 1: about five or six years ago. Um. So, I think 211 00:11:17,559 --> 00:11:20,760 Speaker 1: it's important to your your audience understand that his death 212 00:11:20,840 --> 00:11:25,880 Speaker 1: has very significant symbolic importance. But in terms of the 213 00:11:25,960 --> 00:11:29,160 Speaker 1: day to day and the tomorrow, I don't foresee any 214 00:11:29,240 --> 00:11:32,520 Speaker 1: major changes, not yet, Julie, What was it? What will 215 00:11:32,640 --> 00:11:35,960 Speaker 1: his legacy be? You see low levels of crime, you 216 00:11:36,000 --> 00:11:39,439 Speaker 1: see high rates of literacy. At the same time he um, 217 00:11:39,480 --> 00:11:41,680 Speaker 1: you know, were the squandered a lot of the country's 218 00:11:41,760 --> 00:11:47,360 Speaker 1: enormous economic potential. Yes, well, that legacy you summed up well, 219 00:11:47,400 --> 00:11:50,360 Speaker 1: and I would add something else, which is that he 220 00:11:50,520 --> 00:11:55,080 Speaker 1: spent a lot of resources on health and education for Cuban, 221 00:11:55,160 --> 00:12:01,560 Speaker 1: the Cuban people, on elevating Cuba's standing culturally internationally, and 222 00:12:01,679 --> 00:12:05,320 Speaker 1: on putting Cuba on the geopolitical map for many, many decades, 223 00:12:05,440 --> 00:12:09,439 Speaker 1: especially during the Cold War. But because of his extreme 224 00:12:09,520 --> 00:12:13,920 Speaker 1: allergy to the market, to capitalism, and to the way 225 00:12:13,960 --> 00:12:19,480 Speaker 1: he associated with capitalism with the United States it's imperial 226 00:12:19,960 --> 00:12:23,960 Speaker 1: dominance in Latin America, he delayed for a long time 227 00:12:24,040 --> 00:12:28,080 Speaker 1: Cuba's potential development, which is what Raoul Castro is now 228 00:12:28,120 --> 00:12:32,640 Speaker 1: trying to harness and pick up very rapidly before he himself, 229 00:12:32,920 --> 00:12:35,680 Speaker 1: or at least launched Cuba on a new economic path, 230 00:12:36,080 --> 00:12:39,679 Speaker 1: before he himself steps down into thousand and eighteen. Does 231 00:12:39,720 --> 00:12:42,960 Speaker 1: he has Cancer's legacy loom less large in Latin America 232 00:12:43,000 --> 00:12:45,000 Speaker 1: than than it once did? You look at who he 233 00:12:45,040 --> 00:12:49,080 Speaker 1: influences among other leaders in the continent. Well, that's a 234 00:12:49,080 --> 00:12:52,040 Speaker 1: good question. You know, we've had a shift in Latin 235 00:12:52,120 --> 00:12:54,720 Speaker 1: America just in the last year, going some kind of 236 00:12:54,760 --> 00:13:00,800 Speaker 1: center left left populism um to a more centrist center 237 00:13:00,920 --> 00:13:04,080 Speaker 1: right orientations. But you know, it's not so long ago 238 00:13:04,120 --> 00:13:08,920 Speaker 1: that Ugo Chavez was running Venezuela avon modalities is still 239 00:13:09,280 --> 00:13:12,480 Speaker 1: in Bolivia. His legacy in Latin America, I would argue, 240 00:13:12,520 --> 00:13:16,680 Speaker 1: is enormous. Even Cuba, for example, having hosted peace talks 241 00:13:17,120 --> 00:13:21,199 Speaker 1: around in Colombia for Colombian, the FARC rebels, the Colombian 242 00:13:21,240 --> 00:13:25,080 Speaker 1: government for the last several years, culminating quite recently in 243 00:13:25,280 --> 00:13:29,360 Speaker 1: the conclusion of the negotiated peace and the stand down 244 00:13:29,880 --> 00:13:35,920 Speaker 1: of the farc insurgency. That uh orientation, the impulse that 245 00:13:36,040 --> 00:13:40,280 Speaker 1: Fidel had to first bring revolution to Latin America, which 246 00:13:40,280 --> 00:13:45,120 Speaker 1: he did um and then to pull back and back 247 00:13:45,320 --> 00:13:50,200 Speaker 1: um peaceful transitions in those countries. That's very significant. And 248 00:13:50,240 --> 00:13:53,640 Speaker 1: the emphasis that he put in Latin America on pointing 249 00:13:53,640 --> 00:13:58,079 Speaker 1: out inequality, poverty, pointing out how US policy in the 250 00:13:58,120 --> 00:14:01,360 Speaker 1: region for many, many decades held back so so many 251 00:14:01,440 --> 00:14:04,280 Speaker 1: Latin Americans. He became a huge symbol, not only two 252 00:14:04,280 --> 00:14:06,679 Speaker 1: people that supported him, but to people that opposed him. 253 00:14:06,720 --> 00:14:09,800 Speaker 1: His influence was just huge. What do we know about 254 00:14:09,920 --> 00:14:12,880 Speaker 1: you know, his brother Raoul, so he's been the president 255 00:14:12,920 --> 00:14:15,640 Speaker 1: since two thousand and eight. He's not really a liberal 256 00:14:15,760 --> 00:14:19,920 Speaker 1: or is he? You know, no, you know, he's look 257 00:14:19,960 --> 00:14:23,200 Speaker 1: at in the Raoul Castro was a member of the 258 00:14:23,240 --> 00:14:27,760 Speaker 1: Communist Youth Party in Cuba. Before Fidel Castro even got 259 00:14:27,800 --> 00:14:30,440 Speaker 1: close to the Communists. He went to the Soviet Union 260 00:14:30,480 --> 00:14:33,960 Speaker 1: when he was in his twenties, but you know, once 261 00:14:34,000 --> 00:14:36,680 Speaker 1: he once they took power in in nineteen fifty nine 262 00:14:36,720 --> 00:14:40,440 Speaker 1: and he became head of the Armed Forces, Minister of Defense, 263 00:14:40,720 --> 00:14:43,760 Speaker 1: and especially beginning in the nineteen eighties as the Soviet 264 00:14:43,760 --> 00:14:46,680 Speaker 1: block collapse and after into the nineteen nineties, it was 265 00:14:46,760 --> 00:14:49,480 Speaker 1: Raoul Castro who looked around and said, you know, I'm 266 00:14:49,480 --> 00:14:51,520 Speaker 1: going to start training some of my guys in the 267 00:14:51,560 --> 00:14:55,680 Speaker 1: military to run capitalist enterprises. And he was the one 268 00:14:55,720 --> 00:15:01,840 Speaker 1: who had far less of a visceral rejection you market economies, 269 00:15:01,920 --> 00:15:04,720 Speaker 1: and he I think sees them today as head of state, 270 00:15:05,120 --> 00:15:08,000 Speaker 1: as essential to being able to take advantage and move 271 00:15:08,080 --> 00:15:11,600 Speaker 1: Cuba up the value out of Chene internationally. He's kind 272 00:15:11,600 --> 00:15:15,040 Speaker 1: of an eyes wide open guy, very pragmatic in terms 273 00:15:15,040 --> 00:15:19,080 Speaker 1: of the world that Cuba exists in and what Cuba 274 00:15:19,120 --> 00:15:22,800 Speaker 1: needs in order to preserve the legacy of health and 275 00:15:22,920 --> 00:15:27,280 Speaker 1: education and autonomous foreign policy that Fidel started. That doesn't 276 00:15:27,280 --> 00:15:30,640 Speaker 1: make him a liberal, it makes him, you know, I think, 277 00:15:30,680 --> 00:15:34,520 Speaker 1: grounded in a kind of national interest throughout politique approach 278 00:15:34,640 --> 00:15:37,920 Speaker 1: to uh Cuba's future. Julie, thank you very much for 279 00:15:38,120 --> 00:15:40,320 Speaker 1: taking the time. Really appreciate that's Julius why she's senior 280 00:15:40,320 --> 00:15:42,640 Speaker 1: research fellow at Lyndon B. Johnson School of Public Affairs 281 00:15:42,680 --> 00:15:45,400 Speaker 1: at the University of Texas, Austin, The author of Cuba 282 00:15:45,440 --> 00:15:47,200 Speaker 1: What Everyone needs to Know of for says, we mark 283 00:15:47,400 --> 00:15:49,880 Speaker 1: the death of Fidel cast a longtime leader of Cuba. 284 00:15:49,880 --> 00:15:53,280 Speaker 1: He passed away on frontway. Who you put your trust 285 00:15:53,320 --> 00:15:57,800 Speaker 1: in matters. Investors have put their trust in independent registered 286 00:15:57,840 --> 00:16:01,920 Speaker 1: investment advisors to the tune of four trillion dollars. Why 287 00:16:02,880 --> 00:16:06,520 Speaker 1: they see their role is to serve, not sell. That's 288 00:16:06,520 --> 00:16:08,920 Speaker 1: why Charles Schwab is committed to the success of over 289 00:16:09,000 --> 00:16:14,280 Speaker 1: seven thousand independent financial advisors who passionately dedicate themselves to 290 00:16:14,360 --> 00:16:18,480 Speaker 1: helping people achieve their financial goals. Learn more and find 291 00:16:18,520 --> 00:16:28,680 Speaker 1: your independent advisor dot com. I'm looking at the most 292 00:16:28,680 --> 00:16:31,920 Speaker 1: recent cover of Foreign Affairs here with apologies to Grant 293 00:16:31,920 --> 00:16:35,600 Speaker 1: would American Gothic re dux here farmer and his wife 294 00:16:36,280 --> 00:16:38,760 Speaker 1: he with the signature Pitchfork and a make America Great 295 00:16:39,000 --> 00:16:41,080 Speaker 1: had on as well. The editor of that magazine joins 296 00:16:41,120 --> 00:16:43,200 Speaker 1: us now Gideon Rose, the editor of Foreign Affairs magazine, 297 00:16:43,200 --> 00:16:45,680 Speaker 1: Peter G. Peterson, Chair of the Council on Foreign Relations, 298 00:16:45,680 --> 00:16:48,040 Speaker 1: here to talk a bit about populism at the time. 299 00:16:48,080 --> 00:16:50,560 Speaker 1: We're all wondering what it is exactly, and Michael Cayson 300 00:16:50,600 --> 00:16:52,920 Speaker 1: and his piece for the magazine at Gideon really getting 301 00:16:52,920 --> 00:16:54,480 Speaker 1: to the heart of this. This is sort of an 302 00:16:54,760 --> 00:16:56,880 Speaker 1: ineffable thing. A lot of people have laid claim to 303 00:16:56,920 --> 00:16:59,400 Speaker 1: the term populist. So, you know, I think that you 304 00:16:59,440 --> 00:17:01,480 Speaker 1: just talked about anger rooms coming to the States. I 305 00:17:01,520 --> 00:17:03,920 Speaker 1: think that that's actually a good analogy, right, the kind 306 00:17:04,280 --> 00:17:06,399 Speaker 1: the entire country becomes an anger room in which you 307 00:17:06,480 --> 00:17:10,000 Speaker 1: trash everything because you're not happy with the way things 308 00:17:10,000 --> 00:17:14,240 Speaker 1: are going. So populism has uh several historical strands, but 309 00:17:14,280 --> 00:17:18,280 Speaker 1: it's basically a feeling that the ordinary people are getting screwed, 310 00:17:18,680 --> 00:17:22,200 Speaker 1: and they're either getting screwed by elites primarily, but also 311 00:17:22,560 --> 00:17:25,080 Speaker 1: there's sometimes the feeling that they're getting screwed by the 312 00:17:25,160 --> 00:17:29,000 Speaker 1: people below them who look different and are there even 313 00:17:29,400 --> 00:17:32,840 Speaker 1: bottom rungs of the total poll. So, uh, the Trump 314 00:17:32,880 --> 00:17:35,480 Speaker 1: phenomenon seems to mix both of those things, Right. You 315 00:17:35,560 --> 00:17:39,760 Speaker 1: have UH anger at elites who are supposedly self dealing 316 00:17:39,760 --> 00:17:42,560 Speaker 1: and profit taking and keeping the goodies for themselves and 317 00:17:42,640 --> 00:17:44,879 Speaker 1: running the system the way they want to, but also 318 00:17:45,040 --> 00:17:52,920 Speaker 1: anger at the perceived uh others different, brown, darker, different religion, 319 00:17:53,320 --> 00:17:57,880 Speaker 1: foreign nationality, people who are coming in, taking jobs, taking benefits, etcetera. 320 00:17:57,960 --> 00:18:00,480 Speaker 1: And so there's a kind of fire trained both up 321 00:18:00,560 --> 00:18:02,239 Speaker 1: and down, at the elite and at the people at 322 00:18:02,240 --> 00:18:05,359 Speaker 1: the true bottom get into people know what they're angry about. 323 00:18:05,480 --> 00:18:07,240 Speaker 1: And I guess it's only by looking at the root 324 00:18:07,280 --> 00:18:10,320 Speaker 1: of the problem then that our politicians can actually fix it. 325 00:18:10,440 --> 00:18:13,600 Speaker 1: Is it immigration? Is it globalization? Is it being lost 326 00:18:13,640 --> 00:18:17,280 Speaker 1: with technology? You know, technological advances. So there's a classic 327 00:18:17,480 --> 00:18:19,560 Speaker 1: Marlon Branda movie back in the fifties and it goes 328 00:18:19,600 --> 00:18:22,200 Speaker 1: with The Wild One, and he's asked at one point 329 00:18:22,200 --> 00:18:24,040 Speaker 1: he plays this sort of motorcycle guy, what are you 330 00:18:24,080 --> 00:18:28,280 Speaker 1: rebelling against? And his responses, what do you got? Uh? 331 00:18:28,320 --> 00:18:32,840 Speaker 1: And so at this point there's a general incuit anger, room, 332 00:18:32,920 --> 00:18:36,760 Speaker 1: trash everything, uh. And it's not clear that that anybody 333 00:18:36,800 --> 00:18:39,680 Speaker 1: even knows what exactly clear. Look, there have been a 334 00:18:39,720 --> 00:18:43,160 Speaker 1: whole lot of failures. There's been all failure to distribute 335 00:18:43,160 --> 00:18:45,639 Speaker 1: the proceeds of growth. This is the whole economic inequality 336 00:18:45,640 --> 00:18:47,760 Speaker 1: stuff that we've been talking about, not just you know. 337 00:18:47,920 --> 00:18:50,760 Speaker 1: The odd thing is Donald Trump and Occupy Wall Street 338 00:18:50,760 --> 00:18:54,359 Speaker 1: have something in common, a belief that the proceeds of 339 00:18:54,359 --> 00:18:56,879 Speaker 1: of the gains of the last generation or two of 340 00:18:56,880 --> 00:18:59,000 Speaker 1: globalization have gone to a small lead at the top. 341 00:18:59,200 --> 00:19:03,520 Speaker 1: There's also cultural change, demographic change, a country in which 342 00:19:03,760 --> 00:19:06,600 Speaker 1: it seems like there are newly empowered groups. And there's 343 00:19:06,640 --> 00:19:11,000 Speaker 1: also just a feeling that jobs and trade and manufacturing 344 00:19:11,040 --> 00:19:13,640 Speaker 1: sector and that there really isn't much of a role 345 00:19:13,720 --> 00:19:18,600 Speaker 1: in the economy for uh, non skilled UH people working 346 00:19:18,720 --> 00:19:21,240 Speaker 1: in manufacturing. Where does this end? Because if everybody were 347 00:19:21,240 --> 00:19:24,120 Speaker 1: bells and we're left with a pretty scary world three 348 00:19:24,200 --> 00:19:26,320 Speaker 1: or four years from now. I remember the day after 349 00:19:26,359 --> 00:19:29,119 Speaker 1: Donald Trump got elected, listening to some of you know, 350 00:19:29,160 --> 00:19:31,840 Speaker 1: the foreign news, and a Saudia reporter actually saying, well, 351 00:19:31,840 --> 00:19:33,280 Speaker 1: people are fed up in the Middle East as well, 352 00:19:33,280 --> 00:19:35,040 Speaker 1: and they would probably vote for Islamic state at the 353 00:19:35,080 --> 00:19:38,440 Speaker 1: moment as a protest, would vote if they could. Well, 354 00:19:38,480 --> 00:19:40,760 Speaker 1: this is a great, big question. We really don't know, 355 00:19:40,840 --> 00:19:42,960 Speaker 1: and it's in fact the uncertainty that in many ways 356 00:19:43,040 --> 00:19:45,959 Speaker 1: is the scariest kind of thing. So I remember asking 357 00:19:46,440 --> 00:19:48,520 Speaker 1: a friend on Wall Street back about eight years ago 358 00:19:48,520 --> 00:19:51,000 Speaker 1: at this time, sort of why is everything so crazy? 359 00:19:51,000 --> 00:19:52,919 Speaker 1: Why are markets so freaking? He said, look, there's a 360 00:19:52,920 --> 00:19:56,800 Speaker 1: twenty chance of a depression maybe, uh, And we're all 361 00:19:56,840 --> 00:19:58,920 Speaker 1: freaked out about that. And I said, Okay, that's bad, 362 00:19:59,000 --> 00:20:01,800 Speaker 1: but that means as an eight percent chance of no depression, right, 363 00:20:01,800 --> 00:20:03,560 Speaker 1: So why isn't that good? He said, you don't understand. 364 00:20:04,080 --> 00:20:05,720 Speaker 1: A year ago, if you said what is the chance 365 00:20:05,720 --> 00:20:08,040 Speaker 1: of a depression, I would have said zero. The fact 366 00:20:08,040 --> 00:20:10,720 Speaker 1: that it's up to that's freaking us all out. So 367 00:20:10,760 --> 00:20:13,400 Speaker 1: in the same kind of way, Uh, what Trump had 368 00:20:13,480 --> 00:20:15,960 Speaker 1: and Trump voters and the Trump campaign has put forward, 369 00:20:16,000 --> 00:20:18,160 Speaker 1: like a lot of other populace is literally a sort 370 00:20:18,160 --> 00:20:21,119 Speaker 1: of tear the whole system down, get rid of the 371 00:20:21,119 --> 00:20:26,159 Speaker 1: post war order, stop trade agreements, stopped alliances, Uh, do 372 00:20:26,320 --> 00:20:29,280 Speaker 1: all sorts of things differently. And if they actually put 373 00:20:29,320 --> 00:20:32,159 Speaker 1: any of that into actual practice, it would cause a 374 00:20:32,240 --> 00:20:36,520 Speaker 1: national and geopolitical and international catastrophe. Um, But we don't 375 00:20:36,520 --> 00:20:38,360 Speaker 1: know if they're actually gonna do any of that. So 376 00:20:38,600 --> 00:20:41,399 Speaker 1: right now there's this chance that the world could be 377 00:20:41,440 --> 00:20:43,840 Speaker 1: burned down, but we don't actually know. So I think 378 00:20:43,840 --> 00:20:46,480 Speaker 1: it's still an unlikely possibility, but it will depend on 379 00:20:46,800 --> 00:20:49,760 Speaker 1: what they believed, actually, what they said they actually believed, 380 00:20:50,040 --> 00:20:52,359 Speaker 1: what they said that they believed they actually care about, 381 00:20:52,560 --> 00:20:55,640 Speaker 1: and what sort of pushback they get from domestic, international, 382 00:20:55,720 --> 00:20:58,280 Speaker 1: bureaucratic and other actors, and we just haven't seen any 383 00:20:58,280 --> 00:21:00,920 Speaker 1: of that yet. Last question here just to out the 384 00:21:00,960 --> 00:21:02,920 Speaker 1: brand of populism that we're seeing right now as you 385 00:21:02,960 --> 00:21:04,919 Speaker 1: assemble this magazine, not just looking at the U S, 386 00:21:04,960 --> 00:21:07,200 Speaker 1: but but the whole world is the same. Is it 387 00:21:07,320 --> 00:21:09,560 Speaker 1: the same what we've seen in the UK, in the US, 388 00:21:09,600 --> 00:21:11,600 Speaker 1: what we're seeing in other parts of Europe right now, 389 00:21:11,640 --> 00:21:14,200 Speaker 1: perhaps what we've seen in Colombia Two. Are we looking 390 00:21:14,200 --> 00:21:15,680 Speaker 1: at the same kind of populacet Well, this is a 391 00:21:15,720 --> 00:21:17,879 Speaker 1: fascinating question, and I think the answer is they share 392 00:21:17,960 --> 00:21:21,520 Speaker 1: some familial similarities, but they're not exactly the same. Uh. 393 00:21:21,800 --> 00:21:25,119 Speaker 1: It's interesting. There's a kind of ethno nationalism. Now. In 394 00:21:25,160 --> 00:21:27,399 Speaker 1: one sense, it's kind of weird because why would ethno 395 00:21:27,520 --> 00:21:31,040 Speaker 1: nationalists in one country agree with ethno nationalists in another 396 00:21:31,080 --> 00:21:34,359 Speaker 1: country from a different nationalist group, a different ethnos. But 397 00:21:34,440 --> 00:21:36,679 Speaker 1: the fact is they all seem to rebel against the 398 00:21:36,680 --> 00:21:40,720 Speaker 1: cosmopolitan elite. Um there's a pop and so what you 399 00:21:40,800 --> 00:21:42,880 Speaker 1: have is a kind of sense that immigration has gone 400 00:21:42,880 --> 00:21:47,600 Speaker 1: too far, economic globalization has gone too far, cultural homogenization 401 00:21:47,680 --> 00:21:51,400 Speaker 1: has gone too far, and everybody's screaming and and and 402 00:21:51,440 --> 00:21:54,639 Speaker 1: just and trashing the room. But it's not entirely clear 403 00:21:55,400 --> 00:21:58,600 Speaker 1: how correlated these movements are and how much the actually 404 00:21:58,680 --> 00:22:01,200 Speaker 1: is a broader ideology. Rose, thank you very much. Editor 405 00:22:01,200 --> 00:22:03,240 Speaker 1: of Foreign Affairs, Peter G. Peterson share at the Council 406 00:22:03,280 --> 00:22:05,240 Speaker 1: on Foreign Relations, the new Issue of Foreign Affairs, the 407 00:22:05,240 --> 00:22:08,280 Speaker 1: power of populism. This is Bloomberg surveillance. On Bloomberg Radio, 408 00:22:08,320 --> 00:22:21,760 Speaker 1: David Grew with Francine Lockwood Gay, Well, how many people 409 00:22:21,840 --> 00:22:24,960 Speaker 1: trying to define their finger on what trump anomics trump 410 00:22:25,000 --> 00:22:27,879 Speaker 1: economics is among them? Bill Ye, he's managing director and 411 00:22:27,920 --> 00:22:29,960 Speaker 1: head of North America Economics at City Group, has a 412 00:22:30,000 --> 00:22:32,440 Speaker 1: new note on that out and he joins us, Now, hey, Bill, 413 00:22:32,440 --> 00:22:34,920 Speaker 1: how you doing great? Thanks for having me. A line 414 00:22:34,920 --> 00:22:37,160 Speaker 1: stood out to me in your most recent note. You said, 415 00:22:37,160 --> 00:22:40,040 Speaker 1: a mercurial temperament is one feature of President elect Trump's 416 00:22:40,040 --> 00:22:44,200 Speaker 1: behavior that we can expect to raise policy uncertainty. It's 417 00:22:44,000 --> 00:22:46,439 Speaker 1: it makes me think it must be incredibly difficult at 418 00:22:46,440 --> 00:22:49,040 Speaker 1: this point to forecast out given given all of the uncertainty. 419 00:22:49,720 --> 00:22:51,560 Speaker 1: Very much so. And I think a lot of my 420 00:22:51,560 --> 00:22:53,880 Speaker 1: my colleagues in the marketplace have got it wrong. Um, 421 00:22:53,960 --> 00:22:56,439 Speaker 1: everyone is anticipating, Oh my god, we're gonna get all 422 00:22:56,480 --> 00:22:59,560 Speaker 1: this massive fiscal stimulus, and that means that races have 423 00:22:59,640 --> 00:23:01,320 Speaker 1: to go, but inflation is going to have to grow up, 424 00:23:01,480 --> 00:23:03,840 Speaker 1: and we think that will happen, but not until eighteen 425 00:23:03,920 --> 00:23:07,080 Speaker 1: or even later. So so one of the textbook examples 426 00:23:07,080 --> 00:23:09,640 Speaker 1: that we always give our clients now is that remember 427 00:23:09,680 --> 00:23:12,520 Speaker 1: when the teacher said, when we anticipate fiscal policy, markets 428 00:23:12,600 --> 00:23:15,600 Speaker 1: react immediately. That means rates go up, the dollar goes up, 429 00:23:15,640 --> 00:23:17,920 Speaker 1: and what does that produce? Drag And so what we've 430 00:23:17,920 --> 00:23:21,480 Speaker 1: done for the forecast of is actually market down because 431 00:23:21,560 --> 00:23:24,200 Speaker 1: of that market reaction. All right, but Bill, so what 432 00:23:24,280 --> 00:23:26,160 Speaker 1: do you think that he won't be able to spend 433 00:23:26,440 --> 00:23:29,200 Speaker 1: or reflight the economist fast as markets seem to think. 434 00:23:29,320 --> 00:23:31,560 Speaker 1: Is it because he doesn't have the houses with him 435 00:23:31,600 --> 00:23:33,400 Speaker 1: because their fiscal hawks or a lot of them are. 436 00:23:33,960 --> 00:23:36,720 Speaker 1: Is it the dollar strength or is it just the 437 00:23:36,760 --> 00:23:39,200 Speaker 1: fact that actually you need a lot more to reflight 438 00:23:39,240 --> 00:23:41,880 Speaker 1: the U s Well, he's been pretty tricky in sort 439 00:23:41,880 --> 00:23:44,080 Speaker 1: of what he's talked about so far, um all of 440 00:23:44,119 --> 00:23:46,880 Speaker 1: this talks, for example, of infrastructure spending, he said, well, 441 00:23:46,880 --> 00:23:48,399 Speaker 1: what we're gonna do is to try to get the 442 00:23:48,440 --> 00:23:51,280 Speaker 1: private sector to come in and we're going to give 443 00:23:51,320 --> 00:23:53,640 Speaker 1: them tax credits for eighty cents on every dollar they 444 00:23:53,880 --> 00:23:55,960 Speaker 1: put into the infrastructure. Well, that means a lot of 445 00:23:56,000 --> 00:23:58,440 Speaker 1: toll roads and bridges and new toll roads and bridges, 446 00:23:58,480 --> 00:24:01,480 Speaker 1: but that does not mean prepare the Guardia Airport or 447 00:24:01,520 --> 00:24:03,920 Speaker 1: a lot of the decame bridges that have no tolls 448 00:24:03,960 --> 00:24:06,920 Speaker 1: on it. So the needed infrastructure spending that we all 449 00:24:07,080 --> 00:24:10,159 Speaker 1: envision is not the kind of infrastructure spending that the 450 00:24:10,200 --> 00:24:13,200 Speaker 1: Trump program currently has in mind. When we talk about 451 00:24:13,240 --> 00:24:16,919 Speaker 1: tax cuts, we're talking likely about the lowering of corporate 452 00:24:16,920 --> 00:24:19,479 Speaker 1: tax rates and the lowering of personal tax rates. Well, 453 00:24:19,520 --> 00:24:22,840 Speaker 1: what's the one characteristic about tax cuts? Unless they're guaranteed 454 00:24:22,840 --> 00:24:24,920 Speaker 1: to be permanent, people are going to save a lot 455 00:24:24,960 --> 00:24:27,439 Speaker 1: of it. Because the uncertainty of whether or not the 456 00:24:27,480 --> 00:24:29,520 Speaker 1: tax policy gets reversed or not it caused people to 457 00:24:29,560 --> 00:24:32,680 Speaker 1: be more cautious. And we're seeing that in consumers households 458 00:24:32,720 --> 00:24:35,120 Speaker 1: today where the savings rates al higher. And we're seeing 459 00:24:35,160 --> 00:24:36,840 Speaker 1: it in the corporate behavior because what are they doing 460 00:24:36,880 --> 00:24:39,240 Speaker 1: with all the excess profits They're giving effect to shareholders 461 00:24:39,240 --> 00:24:41,200 Speaker 1: in divided and spot by backs. So these are the 462 00:24:41,280 --> 00:24:43,760 Speaker 1: kind of forces that are still there and still operating 463 00:24:43,800 --> 00:24:46,480 Speaker 1: even with the Trump policies in place, Bill, is it 464 00:24:46,560 --> 00:24:49,600 Speaker 1: your sense here that the debate is over as to 465 00:24:49,640 --> 00:24:51,600 Speaker 1: whether or not we'll have a stimulus package, is to 466 00:24:51,600 --> 00:24:53,679 Speaker 1: whether or not we'll get these these tax cuts. Is 467 00:24:53,680 --> 00:24:55,240 Speaker 1: the is the horse out of the bar and there 468 00:24:55,280 --> 00:24:56,960 Speaker 1: are we destined to have them, whether or not it 469 00:24:57,000 --> 00:24:59,880 Speaker 1: makes economic sense. I think one of the things that 470 00:25:00,119 --> 00:25:02,600 Speaker 1: the markets are optimisty about, and certainly I'm optimisty about, 471 00:25:02,680 --> 00:25:05,160 Speaker 1: is that we have what is might be the closest 472 00:25:05,160 --> 00:25:08,560 Speaker 1: we've come to a unified government in in ages and 473 00:25:08,560 --> 00:25:10,800 Speaker 1: and and so if they don't do it now, when 474 00:25:10,840 --> 00:25:13,560 Speaker 1: can they do it? And and and desict that what 475 00:25:13,640 --> 00:25:16,560 Speaker 1: distinguishes us from what's going on in Europe is that 476 00:25:16,760 --> 00:25:19,560 Speaker 1: the in Europe we still see the Baltanization of politics, 477 00:25:19,720 --> 00:25:22,439 Speaker 1: leading to Baltanization, to viget On policy, which leads to 478 00:25:22,760 --> 00:25:26,320 Speaker 1: fiscal policy going nowhere here we have some inkling that 479 00:25:26,680 --> 00:25:31,240 Speaker 1: maybe all of the popular unrest is now expressed itself, 480 00:25:31,440 --> 00:25:34,119 Speaker 1: and that means that the mandate is given to Congress 481 00:25:34,200 --> 00:25:37,280 Speaker 1: and to the president do something. And what we don't 482 00:25:37,280 --> 00:25:39,640 Speaker 1: know about is what that something is. And and so 483 00:25:39,760 --> 00:25:42,440 Speaker 1: we think the tax cuts are in play because as 484 00:25:42,440 --> 00:25:44,879 Speaker 1: we say the horses out of the barn. Now, how 485 00:25:44,960 --> 00:25:47,359 Speaker 1: bunch of a tax cut? And how long will it last? 486 00:25:47,520 --> 00:25:50,399 Speaker 1: That's what's unknown. But why is Europe any different? In 487 00:25:50,440 --> 00:25:52,760 Speaker 1: Europe we went to austerity and this was the one 488 00:25:52,800 --> 00:25:55,280 Speaker 1: thing that actually, you know, we heard over and over 489 00:25:55,320 --> 00:25:58,359 Speaker 1: and over, and we had Mario Draggy, you know, press 490 00:25:58,359 --> 00:26:01,560 Speaker 1: conference after press conference saying, guys need physical stimulus. Why 491 00:26:01,600 --> 00:26:03,720 Speaker 1: can you have not wake up look at Donald Trump 492 00:26:03,760 --> 00:26:05,159 Speaker 1: and say, actually, you know what, guys were going to 493 00:26:05,240 --> 00:26:08,880 Speaker 1: do the same because the political horizon for a lot 494 00:26:08,920 --> 00:26:12,359 Speaker 1: of the needed reforms in Europe, structure reforms, improving labor 495 00:26:12,359 --> 00:26:14,680 Speaker 1: market efficiency, getting rid of a lot of the railatory burden, 496 00:26:14,880 --> 00:26:18,040 Speaker 1: especially on small businesses, and say Italy, uh, those those 497 00:26:18,119 --> 00:26:21,200 Speaker 1: rules take about five to ten years to put in place, 498 00:26:21,240 --> 00:26:23,959 Speaker 1: another five to ten years before they take hold. Um. 499 00:26:24,080 --> 00:26:26,639 Speaker 1: Remember that other super Mario brother that no one seems 500 00:26:26,640 --> 00:26:30,160 Speaker 1: to be talking about anymore, Mario Monty. He actually put 501 00:26:30,200 --> 00:26:32,280 Speaker 1: in a lot of structure reforms, and what happened to 502 00:26:32,320 --> 00:26:34,760 Speaker 1: him after one year? He got blown out. Now, Renzy 503 00:26:34,880 --> 00:26:37,320 Speaker 1: is surely trying to implement a lot of those reforms, 504 00:26:37,359 --> 00:26:39,880 Speaker 1: but it's at a snail's pace, and because the mandate 505 00:26:39,920 --> 00:26:43,199 Speaker 1: isn't there here in the US? Uh? We we we 506 00:26:43,200 --> 00:26:46,400 Speaker 1: we have not had the opportunity, I think, to put 507 00:26:46,440 --> 00:26:49,200 Speaker 1: in the needed reforms. But now there seems to be 508 00:26:49,240 --> 00:26:51,480 Speaker 1: the likelihood that we could start that way, especially with 509 00:26:51,520 --> 00:26:54,720 Speaker 1: the regulation and if that proceeds, and especially if we 510 00:26:54,760 --> 00:26:57,160 Speaker 1: could cut back on a lot of the executive orders 511 00:26:57,160 --> 00:27:00,680 Speaker 1: that Obama put in place. Um because he's been he's 512 00:27:00,760 --> 00:27:04,040 Speaker 1: used most often the executive orders to put in place 513 00:27:04,040 --> 00:27:06,960 Speaker 1: bright and story policies. Reversing that might put in the 514 00:27:07,000 --> 00:27:09,639 Speaker 1: structure reforms more quickly than what we saw. Let's come back, 515 00:27:09,680 --> 00:27:11,800 Speaker 1: Billy Their, managing director, head of North American Economics at 516 00:27:11,840 --> 00:27:14,200 Speaker 1: City Group. This is Bloomberg Surveillance. Bill. We were talking 517 00:27:14,200 --> 00:27:16,320 Speaker 1: a little bit about populism. You were telling us that 518 00:27:16,359 --> 00:27:19,080 Speaker 1: actually you disagree with a lot of your counterparts that 519 00:27:19,400 --> 00:27:21,880 Speaker 1: Donald Trump will not be able to reflight the economy 520 00:27:21,880 --> 00:27:24,560 Speaker 1: as soon as the markets are expecting. The o c 521 00:27:24,680 --> 00:27:28,399 Speaker 1: D lifted its global growth forecast. Are you expecting something 522 00:27:28,480 --> 00:27:30,840 Speaker 1: ugly out there? Again? Is it because of dollar strength? 523 00:27:31,119 --> 00:27:32,920 Speaker 1: Will have fed be able to hike in December then 524 00:27:32,960 --> 00:27:35,760 Speaker 1: twice next year. Actually, I think that a lot of 525 00:27:35,760 --> 00:27:39,359 Speaker 1: the source of the global economy coming back online have 526 00:27:39,480 --> 00:27:40,960 Speaker 1: to do with a lot of the emerging market country, 527 00:27:41,040 --> 00:27:43,080 Speaker 1: especially some of the big ones coming out of recession. 528 00:27:43,359 --> 00:27:45,560 Speaker 1: So so I think that's a good sign, but it's 529 00:27:45,600 --> 00:27:47,840 Speaker 1: not the kind of growth that would be a driver 530 00:27:48,040 --> 00:27:50,800 Speaker 1: for the global economy. That the only drivers see out 531 00:27:50,840 --> 00:27:53,720 Speaker 1: there is still the US economy and and and there again, um, 532 00:27:53,800 --> 00:27:57,399 Speaker 1: the timing everything is really critical. The market reaction is 533 00:27:58,240 --> 00:28:00,360 Speaker 1: putting on drag on the US economy or right now 534 00:28:00,840 --> 00:28:04,240 Speaker 1: and for seen and certainly through the first half and 535 00:28:04,240 --> 00:28:07,080 Speaker 1: and it won't be until we see the the tax 536 00:28:07,160 --> 00:28:10,920 Speaker 1: cuts come into play, which probably will take the legislatures 537 00:28:11,320 --> 00:28:14,720 Speaker 1: UH into before we actually see it having an impact 538 00:28:14,760 --> 00:28:17,879 Speaker 1: on the on the US actually spending. So so so 539 00:28:17,920 --> 00:28:21,560 Speaker 1: really the question that that I'm I'm raising here is 540 00:28:21,640 --> 00:28:24,600 Speaker 1: what is whether or not the market can see through 541 00:28:25,280 --> 00:28:28,119 Speaker 1: the drag that we see in the immediate future for 542 00:28:28,320 --> 00:28:31,560 Speaker 1: the possibility of that higher growth UH coming online in 543 00:28:32,320 --> 00:28:34,600 Speaker 1: and beyond. So what our podcast has done is to 544 00:28:34,640 --> 00:28:37,760 Speaker 1: mark down seventeen to like one eight from what it 545 00:28:37,800 --> 00:28:39,400 Speaker 1: we used to be at a two point one before 546 00:28:39,400 --> 00:28:42,640 Speaker 1: the election, and and then we pushed up to about 547 00:28:43,880 --> 00:28:47,080 Speaker 1: um and and there again it is a mile kind 548 00:28:47,120 --> 00:28:49,680 Speaker 1: of a boost because we're just not sure how much 549 00:28:49,720 --> 00:28:51,720 Speaker 1: of a of a package can it really be put 550 00:28:51,760 --> 00:28:54,440 Speaker 1: through Congress? How much does you know I asked this 551 00:28:54,520 --> 00:28:56,600 Speaker 1: if Sheila Bear a few minutes ago, how much personnel 552 00:28:56,680 --> 00:28:59,360 Speaker 1: matter is We're paying wrapped attention here to all the 553 00:28:59,360 --> 00:29:02,360 Speaker 1: speculation about who Donald Trump might pick. But you know, 554 00:29:02,560 --> 00:29:04,560 Speaker 1: to be fair, if you pick Steve Nuchon to run 555 00:29:04,560 --> 00:29:06,360 Speaker 1: the Treasury Department, we really don't know much about how 556 00:29:06,360 --> 00:29:09,840 Speaker 1: Steve Nutchen will run the Treasury Department precisely. And that's 557 00:29:09,880 --> 00:29:12,720 Speaker 1: why I'm reluctant to put in play, uh, sort of 558 00:29:12,720 --> 00:29:15,520 Speaker 1: the numbers that are being bandied around about the fiscal 559 00:29:15,560 --> 00:29:18,640 Speaker 1: spending and tax cuts. I am putting in some of 560 00:29:18,640 --> 00:29:21,240 Speaker 1: that stuff. But but well, we will see, and I 561 00:29:21,280 --> 00:29:23,720 Speaker 1: think our forces will have to evolve as we learn 562 00:29:23,760 --> 00:29:26,760 Speaker 1: more about not just what what the broad outlines are, 563 00:29:26,840 --> 00:29:29,640 Speaker 1: but actually what the the actual policies that will be 564 00:29:29,720 --> 00:29:31,480 Speaker 1: put in play by the people who are going to 565 00:29:31,560 --> 00:29:33,240 Speaker 1: be put in spots that we have yet to find 566 00:29:33,280 --> 00:29:36,000 Speaker 1: out about. So I think that's the source of uncertainty, 567 00:29:36,360 --> 00:29:37,800 Speaker 1: and and and and the one thing that I am 568 00:29:37,800 --> 00:29:41,200 Speaker 1: certainty absolutely guarantees is that people will delay decisions. They 569 00:29:41,240 --> 00:29:45,800 Speaker 1: will delay spending decisions for infrastructure, investment and consumption, and 570 00:29:45,920 --> 00:29:48,280 Speaker 1: that means drang. So the one thing you know for 571 00:29:48,440 --> 00:29:50,680 Speaker 1: sure is that we're going to have a drag on 572 00:29:50,920 --> 00:29:55,320 Speaker 1: the immediate level of economic activity, which means what exactly, 573 00:29:55,320 --> 00:29:58,360 Speaker 1: Bill that actually consumers feel a little bit less confident 574 00:29:58,480 --> 00:30:01,040 Speaker 1: about the future, so that they spend a little bit less. 575 00:30:01,200 --> 00:30:03,400 Speaker 1: Is it CEOs that are actually look at what look 576 00:30:03,440 --> 00:30:06,080 Speaker 1: at what's exactly from seeing look at what happened with 577 00:30:06,120 --> 00:30:09,400 Speaker 1: our black are black Friday? Um? I mean that that 578 00:30:09,520 --> 00:30:11,480 Speaker 1: was supposed to be the best day of the year 579 00:30:11,720 --> 00:30:13,920 Speaker 1: and he came in under where it was last year. 580 00:30:14,200 --> 00:30:16,560 Speaker 1: That to me is absolutely no surprise in this environment 581 00:30:16,560 --> 00:30:20,080 Speaker 1: where yes, we have the prospect of something really good happening, 582 00:30:20,080 --> 00:30:22,480 Speaker 1: but we just don't know what shape that good stuff 583 00:30:22,560 --> 00:30:24,640 Speaker 1: might be. And so what do you do? You just 584 00:30:25,040 --> 00:30:28,000 Speaker 1: save a little bit more because just in case things 585 00:30:28,080 --> 00:30:30,800 Speaker 1: might not turn out the way they are supposed to. 586 00:30:31,320 --> 00:30:33,360 Speaker 1: You know, the thing we've heard the least about, I 587 00:30:33,400 --> 00:30:37,880 Speaker 1: think since the election results were in is about trade, 588 00:30:38,320 --> 00:30:40,360 Speaker 1: perhaps about immigration, but about trades well. And these are 589 00:30:40,400 --> 00:30:42,320 Speaker 1: the big, the big X factories. So at this point 590 00:30:42,320 --> 00:30:44,320 Speaker 1: do you do you take what the now president elect 591 00:30:44,360 --> 00:30:47,200 Speaker 1: said on the campaign trail at face or or how 592 00:30:47,200 --> 00:30:49,280 Speaker 1: do you begin to to process with what might happen 593 00:30:49,280 --> 00:30:51,400 Speaker 1: with regards and have the question that thank you for 594 00:30:51,480 --> 00:30:55,720 Speaker 1: that the silver lining I see that's being developed in 595 00:30:56,000 --> 00:30:58,560 Speaker 1: UH since the day of the election. The one thing 596 00:30:58,600 --> 00:31:01,160 Speaker 1: Donald Trump did that was increa of be smart was 597 00:31:01,200 --> 00:31:03,800 Speaker 1: to come out the minute he got elected and say, 598 00:31:03,960 --> 00:31:06,480 Speaker 1: you know, we may not have a trade war. I 599 00:31:06,560 --> 00:31:09,760 Speaker 1: really want to bring China to negotiate. You know, I'm 600 00:31:09,800 --> 00:31:12,080 Speaker 1: not going to throw out millions and millions of people. 601 00:31:12,360 --> 00:31:14,880 Speaker 1: I'm just gonna go after the people with criminal records. 602 00:31:15,320 --> 00:31:17,720 Speaker 1: That clarity, I think was the best thing he could 603 00:31:17,720 --> 00:31:20,280 Speaker 1: do to calm the markets, because now we know that 604 00:31:20,400 --> 00:31:22,080 Speaker 1: a lot of the policies he's talked about on the 605 00:31:22,160 --> 00:31:25,560 Speaker 1: campaign trail are targeted and and and the more targeted 606 00:31:25,680 --> 00:31:28,760 Speaker 1: they are, the better off we in general will be 607 00:31:28,760 --> 00:31:32,200 Speaker 1: because we now can plan around whatever he's targeting, and 608 00:31:32,200 --> 00:31:34,120 Speaker 1: and and and and you can build as much of 609 00:31:34,160 --> 00:31:35,800 Speaker 1: a wall as he wants, but as long as he 610 00:31:35,840 --> 00:31:38,480 Speaker 1: doesn't distruct the labor market with the new immigration policy 611 00:31:38,600 --> 00:31:41,280 Speaker 1: or new trade policy by declaring tariffs and wars and 612 00:31:41,280 --> 00:31:43,640 Speaker 1: things like that. That's the fear that I had been 613 00:31:43,640 --> 00:31:46,400 Speaker 1: warning people about before and from the day of his 614 00:31:46,680 --> 00:31:52,520 Speaker 1: um of his election result, he has been essentially giving 615 00:31:52,640 --> 00:31:57,080 Speaker 1: us more details about targeting his campaign claims. Right, and Bill, 616 00:31:57,080 --> 00:31:59,760 Speaker 1: you're sure that that this is the way it will 617 00:31:59,800 --> 00:32:01,680 Speaker 1: be because I'm looking at his teats. Right, he's talking 618 00:32:01,680 --> 00:32:04,240 Speaker 1: about serious voter of fraud. He's talking about the fact 619 00:32:04,240 --> 00:32:07,280 Speaker 1: that he would have earned the so called popular vote. Um. 620 00:32:07,640 --> 00:32:09,400 Speaker 1: To me, it seems like a president like that's very 621 00:32:09,440 --> 00:32:13,120 Speaker 1: uncertain or that's very hot headed and could actually reverse 622 00:32:13,200 --> 00:32:14,560 Speaker 1: some of the things that he said to the New 623 00:32:14,600 --> 00:32:18,040 Speaker 1: York Times just last week. You're absolutely right, And that's 624 00:32:18,040 --> 00:32:19,840 Speaker 1: why I said, the one thing I know for sure 625 00:32:19,960 --> 00:32:21,720 Speaker 1: is more uncertainty. And so what do you do in 626 00:32:21,720 --> 00:32:23,800 Speaker 1: the face of uncertainty? Do less and do it later. 627 00:32:24,200 --> 00:32:27,520 Speaker 1: So so I know the Twitter wars mean nothing fother 628 00:32:27,600 --> 00:32:30,680 Speaker 1: than high, you know, a higher degree of uncertainty and 629 00:32:30,680 --> 00:32:33,920 Speaker 1: transparency into the uncertainty than we've ever seen before. We 630 00:32:33,960 --> 00:32:37,080 Speaker 1: don't have the traditional policy wong filters that the staff 631 00:32:37,160 --> 00:32:39,880 Speaker 1: would do for the president. Um and and and so 632 00:32:40,040 --> 00:32:42,040 Speaker 1: I think that's the new regime that we're gonna have 633 00:32:42,040 --> 00:32:44,600 Speaker 1: to learn to live with. Well, how are our policymakers 634 00:32:44,840 --> 00:32:47,040 Speaker 1: processing all of this. We have the next FED meeting 635 00:32:47,120 --> 00:32:50,680 Speaker 1: here in what three weeks time? Uh? Is there game 636 00:32:50,720 --> 00:32:52,480 Speaker 1: here to wait this out to see what happens with 637 00:32:52,520 --> 00:32:54,440 Speaker 1: regardle to stimulus, with regard to tax cuts. Are they 638 00:32:54,480 --> 00:32:56,800 Speaker 1: going to sort of push ahead paying no attention to 639 00:32:56,800 --> 00:32:58,880 Speaker 1: what may or may not happen. Well? Being a former 640 00:32:59,280 --> 00:33:01,320 Speaker 1: FETCH staffer and and a guy who used to sit 641 00:33:01,320 --> 00:33:03,760 Speaker 1: at the table when we did the forecast meetings at 642 00:33:03,760 --> 00:33:06,480 Speaker 1: the board. Um, the one thing I know they're going 643 00:33:06,520 --> 00:33:08,360 Speaker 1: to do. Um, they can turn to the fiscal guy 644 00:33:08,360 --> 00:33:10,200 Speaker 1: and say, so, what do you think? And they're gonna 645 00:33:10,200 --> 00:33:12,080 Speaker 1: ask the exact the same question you just ask me 646 00:33:12,320 --> 00:33:14,560 Speaker 1: and is kind of responded for you. I just responded 647 00:33:14,600 --> 00:33:17,960 Speaker 1: with say, it's being your get as good as mine. 648 00:33:18,000 --> 00:33:19,840 Speaker 1: And because of that, I'm going to use as much 649 00:33:19,840 --> 00:33:21,560 Speaker 1: a current policy as I know is going to be 650 00:33:21,600 --> 00:33:25,200 Speaker 1: in play and probably give you the contigencies around it. Um. 651 00:33:25,280 --> 00:33:28,080 Speaker 1: And And looks like the contingencies for trade and immigration 652 00:33:28,400 --> 00:33:32,240 Speaker 1: are less, uh less bad than they were the day 653 00:33:32,240 --> 00:33:35,240 Speaker 1: before the election. UM. And I think the fiscal policy 654 00:33:35,640 --> 00:33:37,960 Speaker 1: that's spending will be less robust and what we think 655 00:33:38,000 --> 00:33:40,400 Speaker 1: because of the way the financing is being arranged and 656 00:33:40,680 --> 00:33:42,800 Speaker 1: the being unknown is whether the tax cuts can get 657 00:33:42,840 --> 00:33:46,120 Speaker 1: in play in a way that will be perceived as permanent. 658 00:33:46,600 --> 00:33:50,080 Speaker 1: Those are the discussions around the board table right before 659 00:33:50,160 --> 00:33:52,880 Speaker 1: the next meeting. But Bill, what do you mean, I 660 00:33:52,920 --> 00:33:55,320 Speaker 1: mean tax cuts tax cuts overall, or is the tax 661 00:33:55,360 --> 00:33:58,000 Speaker 1: cuts to repatriate some of some of the money is 662 00:33:58,040 --> 00:34:02,240 Speaker 1: currently overseas? Good point, friends, Um, the the the one 663 00:34:02,240 --> 00:34:04,560 Speaker 1: thing that I think there's a lot of consensus about 664 00:34:04,600 --> 00:34:06,800 Speaker 1: on both sides of the aisle is to bring back 665 00:34:06,800 --> 00:34:09,279 Speaker 1: those corporate profits because that that is one way of 666 00:34:09,680 --> 00:34:11,719 Speaker 1: financing a lot of the spending that that might be 667 00:34:11,719 --> 00:34:13,759 Speaker 1: put in play. Uh and then and some of the 668 00:34:13,800 --> 00:34:16,759 Speaker 1: other tax cuts. So we think that actually in we 669 00:34:16,840 --> 00:34:19,439 Speaker 1: will see that tax cut being put in place, because 670 00:34:19,480 --> 00:34:21,680 Speaker 1: that's the one thing that they want, which is a 671 00:34:21,719 --> 00:34:26,720 Speaker 1: way of bringing back corporate profits. Now that that I think, 672 00:34:26,880 --> 00:34:31,920 Speaker 1: because it is a temporary, one time benefit, will probably 673 00:34:32,000 --> 00:34:34,759 Speaker 1: not really affect spending all that much. A lot of 674 00:34:34,760 --> 00:34:37,320 Speaker 1: that money will come into the tax revenues for the government. 675 00:34:37,560 --> 00:34:40,240 Speaker 1: And by the way, the way the arcane accounting is done, 676 00:34:40,560 --> 00:34:43,319 Speaker 1: that is considered a revenue loss because the way they 677 00:34:43,400 --> 00:34:45,719 Speaker 1: score the tax billers to say, well, they would have 678 00:34:45,719 --> 00:34:47,319 Speaker 1: brought it back at a higher tax rate at some 679 00:34:47,360 --> 00:34:49,840 Speaker 1: point in the future. Now we have to build it 680 00:34:49,840 --> 00:34:52,200 Speaker 1: out a much lower tax rate. So so so the the 681 00:34:52,200 --> 00:34:56,080 Speaker 1: the the minutia of of how Congress perceives that tax 682 00:34:56,080 --> 00:34:59,759 Speaker 1: cut is not that tax and cut cut and the 683 00:35:00,040 --> 00:35:02,920 Speaker 1: fits that come back is not an extra source of revenue, 684 00:35:02,960 --> 00:35:05,000 Speaker 1: but in fact they scored as a tax lass. And 685 00:35:05,080 --> 00:35:07,600 Speaker 1: that's the minutia that has to be worked out. Feel 686 00:35:07,680 --> 00:35:10,160 Speaker 1: very quick here looking at the Bloomberg Dollar Spot index 687 00:35:10,160 --> 00:35:12,120 Speaker 1: at one one five up, a little bit, stronger, a 688 00:35:12,160 --> 00:35:14,759 Speaker 1: little bit. How long do you expect the stronger dollar 689 00:35:14,800 --> 00:35:18,439 Speaker 1: story to continue? Well, our our own in house view 690 00:35:18,560 --> 00:35:22,600 Speaker 1: is that there's an eight rise in the dollar from 691 00:35:22,880 --> 00:35:25,880 Speaker 1: the time of the election onward. A lot of that 692 00:35:25,880 --> 00:35:28,880 Speaker 1: has already put in play and so so so I 693 00:35:28,920 --> 00:35:31,520 Speaker 1: think that if it were to go up, that is 694 00:35:31,600 --> 00:35:34,480 Speaker 1: enough to generate easily about the quarter to a half 695 00:35:34,480 --> 00:35:37,319 Speaker 1: point a drag on the US economy. So so so 696 00:35:37,400 --> 00:35:39,960 Speaker 1: we'll see if if that carries out or not. That's 697 00:35:40,040 --> 00:35:42,279 Speaker 1: that's our based on POECAST. That's William Lee there, Bill 698 00:35:42,360 --> 00:35:44,640 Speaker 1: a managing director and head of North American Economics at 699 00:35:44,680 --> 00:35:54,200 Speaker 1: City Group. Thank you thanks for listening to the Bloomberg 700 00:35:54,239 --> 00:35:59,719 Speaker 1: surveillance podcast. Subscribe and listen to interviews on iTunes, SoundCloud, 701 00:36:00,160 --> 00:36:04,400 Speaker 1: or whichever podcast platform you prefer. I'm out on Twitter 702 00:36:04,480 --> 00:36:08,240 Speaker 1: at Tom Keene. David Gura is at David Gura. Before 703 00:36:08,280 --> 00:36:12,640 Speaker 1: the podcast, you can always catch us worldwide. I'm Bloomberg Radio. 704 00:36:24,320 --> 00:36:28,160 Speaker 1: Who you put your trust in matters. Investors have put 705 00:36:28,200 --> 00:36:31,640 Speaker 1: their trust in independent registered investment advisors to the tune 706 00:36:31,640 --> 00:36:36,239 Speaker 1: of four trillion dollars. Why learn more and find your 707 00:36:36,280 --> 00:36:40,239 Speaker 1: independent advisor dot com.