1 00:00:00,120 --> 00:00:02,920 Speaker 1: Brought you by Bank of America, Mary Lynch. Investing in 2 00:00:03,000 --> 00:00:07,840 Speaker 1: local communities, economies and a sustainable future. That's the power 3 00:00:08,080 --> 00:00:12,360 Speaker 1: of global connections, Mary Lynch, Pierce Fenner and Smith Incorporated 4 00:00:12,760 --> 00:00:27,400 Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:27,840 --> 00:00:31,520 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:31,560 --> 00:00:36,600 Speaker 1: insight from the best in economics, finance, investment, and international relations. 7 00:00:37,000 --> 00:00:41,600 Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and 8 00:00:41,680 --> 00:00:49,000 Speaker 1: of course on the Bloomberg Kevin Roberts joins us now 9 00:00:49,040 --> 00:00:51,160 Speaker 1: he's former chairman of SACI and SACHI now chairman of BT. 10 00:00:51,400 --> 00:00:53,080 Speaker 1: He joins us here at the Pier in New York. 11 00:00:53,159 --> 00:00:55,080 Speaker 1: Right to see you. Great to have you with us. 12 00:00:55,080 --> 00:00:57,320 Speaker 1: And let's start with the Donald Trump and the messaging 13 00:00:57,360 --> 00:01:00,520 Speaker 1: of Donald Trump. There was a promise at made throughout 14 00:01:00,520 --> 00:01:03,320 Speaker 1: the campaign by the then candidate that he would be 15 00:01:03,360 --> 00:01:06,000 Speaker 1: different as president, that he would perhaps be less bellicos 16 00:01:06,040 --> 00:01:08,680 Speaker 1: and less bombastic. Are we seeing Are we seeing any 17 00:01:08,680 --> 00:01:10,640 Speaker 1: of that here in the first week of his presidency. 18 00:01:10,840 --> 00:01:13,839 Speaker 1: I don't think the word less is in the presidents 19 00:01:13,880 --> 00:01:18,160 Speaker 1: for Cabutlary. I mean revolution starts with language. And this 20 00:01:18,920 --> 00:01:21,920 Speaker 1: presidency is all about the language. Isn't it make America 21 00:01:22,000 --> 00:01:25,760 Speaker 1: great again? What could be? It's a call to arms, 22 00:01:25,800 --> 00:01:30,200 Speaker 1: it's nostalgic, it's hopeful, it's optimistic, it's about change. It 23 00:01:30,200 --> 00:01:33,480 Speaker 1: has a little bit of agro in it. It's very involving. 24 00:01:34,120 --> 00:01:37,000 Speaker 1: Who doesn't want to be part of that as supposed 25 00:01:37,040 --> 00:01:40,759 Speaker 1: to stronger together? I mean, please let me fall asleep 26 00:01:41,200 --> 00:01:44,679 Speaker 1: because that just isn't impactful. And you look at the 27 00:01:44,720 --> 00:01:48,000 Speaker 1: language he's using. I think he's doing something brilliantly. He's 28 00:01:48,040 --> 00:01:52,080 Speaker 1: talking to three or five year olds, you know, Crooked Hillary, 29 00:01:52,360 --> 00:01:57,080 Speaker 1: lion Ted, build the bridge. You know, it's a build 30 00:01:57,120 --> 00:02:01,200 Speaker 1: the wall, It's drained the swamp and now we've got 31 00:02:01,240 --> 00:02:05,400 Speaker 1: the latest TV show, American Carnage is coming your way. 32 00:02:05,440 --> 00:02:07,800 Speaker 1: I mean, this language is very important to the to 33 00:02:07,880 --> 00:02:10,120 Speaker 1: the people out there who have been forgotten. He is 34 00:02:10,200 --> 00:02:13,120 Speaker 1: talking and communicating to them. Your your background is in 35 00:02:13,360 --> 00:02:16,440 Speaker 1: advertising and messaging, are you Are you of the belief 36 00:02:16,440 --> 00:02:17,959 Speaker 1: that this is all him, that he's come up with this, 37 00:02:18,080 --> 00:02:19,919 Speaker 1: that there is some sort of purity to the messaging here, 38 00:02:19,919 --> 00:02:23,639 Speaker 1: that it's not fettered perhaps by having a big apparatus 39 00:02:23,680 --> 00:02:25,720 Speaker 1: designing the messaging for for this administration. I think the 40 00:02:25,760 --> 00:02:31,040 Speaker 1: apparatus would kill the messaging. I think this is pure, visceral, emotional, 41 00:02:31,680 --> 00:02:35,880 Speaker 1: slightly unhinged occasionally. It's the way he thinks, it's the 42 00:02:35,880 --> 00:02:37,720 Speaker 1: way he talks, it's the way he is, it's the 43 00:02:37,720 --> 00:02:41,240 Speaker 1: way he's been. And I think people are going, he's real, 44 00:02:41,480 --> 00:02:46,480 Speaker 1: he's honest, and he's authentic. But you know, not all 45 00:02:46,520 --> 00:02:49,280 Speaker 1: of this is for all of us. But he's real. 46 00:02:49,600 --> 00:02:53,560 Speaker 1: And all the other politicians I've seen this year, they're 47 00:02:53,560 --> 00:02:59,760 Speaker 1: saying are not to be trusting. They're speaking in riddles 48 00:02:59,800 --> 00:03:03,360 Speaker 1: and rhymes, and uh, I think it's making a hell 49 00:03:03,400 --> 00:03:05,640 Speaker 1: of an impact out there. How how risky is it 50 00:03:05,720 --> 00:03:08,440 Speaker 1: to be? Uh? I guess erratic might be an uncharitable 51 00:03:08,440 --> 00:03:10,600 Speaker 1: way of putting it here. But to pursue the same 52 00:03:10,600 --> 00:03:13,080 Speaker 1: course that he pursued as when he was campaigning. In 53 00:03:13,120 --> 00:03:15,480 Speaker 1: other words, you know he can, he can speak off 54 00:03:15,560 --> 00:03:18,600 Speaker 1: the cuff that could fall flat. Is it inherently risky 55 00:03:18,680 --> 00:03:22,799 Speaker 1: to leave so much to chance? Let's say I think 56 00:03:22,840 --> 00:03:26,000 Speaker 1: in the orderly world of Washington, none of this would 57 00:03:26,400 --> 00:03:29,480 Speaker 1: would take place, which is exactly why he's been voted 58 00:03:29,520 --> 00:03:33,040 Speaker 1: in as president because people are tired of that stuff. 59 00:03:33,440 --> 00:03:35,360 Speaker 1: You saw the same thing in Brexit in the UK. 60 00:03:35,520 --> 00:03:40,360 Speaker 1: They're just tired. They're not taking it any more. Trump, 61 00:03:40,560 --> 00:03:46,560 Speaker 1: for since he was a teenager, has been outspoken, provocative, uh, 62 00:03:46,600 --> 00:03:50,440 Speaker 1: and it's served him pretty well. I wonder if there 63 00:03:50,440 --> 00:03:51,920 Speaker 1: are lessons to be learned from the way that he 64 00:03:52,280 --> 00:03:55,160 Speaker 1: waged his campaign in other ways. Are they're politicians who 65 00:03:55,160 --> 00:03:57,520 Speaker 1: watched that who said this is how I need to 66 00:03:57,520 --> 00:03:59,360 Speaker 1: and this is what I need to emulate going forward here? 67 00:03:59,480 --> 00:04:01,840 Speaker 1: Or is there something signature about Donald Trump now President 68 00:04:02,000 --> 00:04:05,160 Speaker 1: Donald Trump that is too difficult to emulate. You've seen 69 00:04:05,200 --> 00:04:08,280 Speaker 1: politicians and media completely reject everything he's done, and they're 70 00:04:08,280 --> 00:04:11,280 Speaker 1: still continuing to do it, you know, and they're living 71 00:04:11,320 --> 00:04:13,760 Speaker 1: in this world of you know, men in suits and 72 00:04:14,320 --> 00:04:17,960 Speaker 1: all that kind of stuff. I mean, he is setting 73 00:04:18,040 --> 00:04:21,599 Speaker 1: himself up to speak for, you know, this sort of 74 00:04:21,640 --> 00:04:27,000 Speaker 1: blue collar, unforgotten um majority, and he's given the silent 75 00:04:27,080 --> 00:04:30,120 Speaker 1: majority of voice. Do they agree with everything he says? 76 00:04:30,160 --> 00:04:32,280 Speaker 1: I don't think that they do at all. But they 77 00:04:32,360 --> 00:04:36,760 Speaker 1: agree with the approach he's taken. And I think politicians 78 00:04:36,760 --> 00:04:40,120 Speaker 1: have got not much to learn from this. I think 79 00:04:40,200 --> 00:04:42,760 Speaker 1: what you've got to got to be learning about is 80 00:04:43,279 --> 00:04:47,400 Speaker 1: are we really in touch with the people of our 81 00:04:47,520 --> 00:04:50,479 Speaker 1: nation or are we in an echo chamber? And I 82 00:04:50,520 --> 00:04:54,400 Speaker 1: think the last four to five months of the the 83 00:04:54,480 --> 00:04:58,400 Speaker 1: Democratic campaign was an echo chamber. I mean, he diverted 84 00:04:58,440 --> 00:05:02,719 Speaker 1: all their attention on to him rather than the issue. 85 00:05:02,720 --> 00:05:06,719 Speaker 1: And President Bill Clinton was saying there as I understand it, Hillary, 86 00:05:06,880 --> 00:05:10,320 Speaker 1: it's about the economy, it's about jobs, and that advice 87 00:05:10,400 --> 00:05:13,960 Speaker 1: was rejected, and I think Clinton's instincts, the Bill Clinton's 88 00:05:14,000 --> 00:05:16,720 Speaker 1: instincts were spot on, and I think if they had 89 00:05:16,800 --> 00:05:20,520 Speaker 1: listened to him instead of focusing on No. Look, we 90 00:05:20,640 --> 00:05:24,720 Speaker 1: all know that that Trump's he's just off limits. I mean, 91 00:05:24,800 --> 00:05:28,400 Speaker 1: he's outrageous. The things he stands for a terrible You know, 92 00:05:28,440 --> 00:05:30,240 Speaker 1: we're going to focus on that, and we're gonna tell 93 00:05:30,279 --> 00:05:32,960 Speaker 1: everybody what he's saying. Everybody knew what he was saying, 94 00:05:33,400 --> 00:05:36,760 Speaker 1: but he was surprising with the obvious, the obvious saying. 95 00:05:37,000 --> 00:05:40,719 Speaker 1: Americans were worried about are being Hey, we're being disadvantaged 96 00:05:40,760 --> 00:05:44,120 Speaker 1: and we're being played, and we don't trust any of 97 00:05:44,120 --> 00:05:47,360 Speaker 1: these people in Washington, and he spoke to them like that. 98 00:05:47,560 --> 00:05:49,239 Speaker 1: We asked about the politics of the moment. You mentioned 99 00:05:49,240 --> 00:05:51,839 Speaker 1: American carnage, joking that that that's the next new reality 100 00:05:51,880 --> 00:05:56,640 Speaker 1: television show. Here, there's some darkness. Was joking, there's some 101 00:05:56,720 --> 00:05:59,400 Speaker 1: darkness to that as well, some some menace. And how 102 00:05:59,400 --> 00:06:03,240 Speaker 1: does he tell the line to to channeling, uh, the 103 00:06:03,320 --> 00:06:06,640 Speaker 1: rightful anger that many people in this country have towards government, 104 00:06:06,680 --> 00:06:09,800 Speaker 1: towards the status quo, towards the economic situation here as 105 00:06:09,880 --> 00:06:12,359 Speaker 1: it exists now, but not going too far. He's not 106 00:06:12,400 --> 00:06:14,280 Speaker 1: going to tow the line. He's not worried about going 107 00:06:14,320 --> 00:06:17,960 Speaker 1: too far. Nothing succeeds like excess in his world. I mean, 108 00:06:18,000 --> 00:06:20,440 Speaker 1: have you been in one of his places? Very guilty? 109 00:06:21,680 --> 00:06:23,920 Speaker 1: I mean it's not the Pierre is it? You know? 110 00:06:24,040 --> 00:06:27,880 Speaker 1: And he believes in that nothing succeeds like excess. And 111 00:06:27,960 --> 00:06:29,680 Speaker 1: that's how he's gonna keep going. He's not going to 112 00:06:29,680 --> 00:06:33,720 Speaker 1: tow any lines. He's just gonna absolutely keep driving this. Now. 113 00:06:33,760 --> 00:06:36,440 Speaker 1: What he has done, which I think is pretty smart, 114 00:06:36,880 --> 00:06:39,680 Speaker 1: is surrounded himself with some pretty top talent. I mean, 115 00:06:39,680 --> 00:06:42,040 Speaker 1: when you look at Tillerson, when you look at Calli, 116 00:06:42,360 --> 00:06:45,599 Speaker 1: when you look at Matchis, these guys are not gonna 117 00:06:45,920 --> 00:06:48,920 Speaker 1: take any stuff that they don't like lying down. These 118 00:06:48,920 --> 00:06:55,280 Speaker 1: are competitive, pugnacious, smart, proven successful leaders. And I think 119 00:06:55,360 --> 00:06:59,279 Speaker 1: Trump's happy to live with that. He's not a consensus manager. 120 00:07:00,000 --> 00:07:03,080 Speaker 1: He's quite into conflict. He's into negotiation, even with his 121 00:07:03,120 --> 00:07:06,200 Speaker 1: own people. He doesn't want one happy little family. He's 122 00:07:06,240 --> 00:07:08,320 Speaker 1: going there or not. You know, we want to get 123 00:07:08,480 --> 00:07:12,960 Speaker 1: things done, not good enough, We want to make things happen, right, 124 00:07:13,000 --> 00:07:14,640 Speaker 1: And I think that's what America is waiting for, will 125 00:07:14,680 --> 00:07:16,680 Speaker 1: make things happen. And look what he's doing. When I 126 00:07:16,680 --> 00:07:18,840 Speaker 1: talked to his advisories, when I talked to members of 127 00:07:18,880 --> 00:07:22,040 Speaker 1: Congress who have observed Donald Trump in this new political environment, 128 00:07:22,040 --> 00:07:25,240 Speaker 1: a lot say, this is a CEO governing? What does 129 00:07:25,280 --> 00:07:27,160 Speaker 1: that mean in terms of a leadership? How is How 130 00:07:27,240 --> 00:07:30,360 Speaker 1: is the governance of a CEO different? H? Well, I 131 00:07:30,720 --> 00:07:33,320 Speaker 1: think great leaders you know, I wrote a book, you know, 132 00:07:33,400 --> 00:07:35,760 Speaker 1: sixty four shots Leadership in a Crazy World, and we're 133 00:07:35,800 --> 00:07:38,800 Speaker 1: certainly living in a crazy world. And the first thing 134 00:07:38,880 --> 00:07:43,080 Speaker 1: that leaders do, irrespective whether a sports team, whether their 135 00:07:43,440 --> 00:07:47,240 Speaker 1: political party, whether they're in a company or a startup, 136 00:07:48,000 --> 00:07:50,440 Speaker 1: is that they have a dream and they inspire people 137 00:07:50,920 --> 00:07:53,480 Speaker 1: to follow that dream. And his dream of making America 138 00:07:53,520 --> 00:07:56,600 Speaker 1: great again, as we've talked about, that's right up there. 139 00:07:56,720 --> 00:07:59,960 Speaker 1: That's up there. It's hard to argue with and people 140 00:08:00,000 --> 00:08:02,640 Speaker 1: are going, yeah, yeah, I'm going to make America great again. 141 00:08:02,640 --> 00:08:03,840 Speaker 1: And we talked about that in the bar as we 142 00:08:03,840 --> 00:08:05,560 Speaker 1: talked about that the pubs and we do all everythings. 143 00:08:06,160 --> 00:08:08,760 Speaker 1: I think the second thing that leaders do in businesses 144 00:08:08,840 --> 00:08:12,080 Speaker 1: they make things happen. And a lot of political leadership 145 00:08:12,160 --> 00:08:16,080 Speaker 1: over the last mm hmm a few years hasn't been 146 00:08:16,120 --> 00:08:19,680 Speaker 1: making things happen for many Americans, and they've just got 147 00:08:19,720 --> 00:08:23,920 Speaker 1: tired of that. Third thing I think is the leaders 148 00:08:23,960 --> 00:08:28,000 Speaker 1: tend to surprise with the obvious, and there's nothing sort 149 00:08:28,040 --> 00:08:30,560 Speaker 1: of brilliant about what he's saying. I'm going to create 150 00:08:30,640 --> 00:08:32,640 Speaker 1: jobs and keep American jobs in America, and I'm going 151 00:08:32,640 --> 00:08:35,880 Speaker 1: to stop all these people taking all our wealth away 152 00:08:35,920 --> 00:08:40,000 Speaker 1: from us. It's pretty obvious, but he's saying it very clearly. 153 00:08:41,559 --> 00:08:43,880 Speaker 1: The studies we've done on a bunch of leaders and 154 00:08:44,360 --> 00:08:46,719 Speaker 1: the President didn't make my top sixty four. It is 155 00:08:46,800 --> 00:08:50,520 Speaker 1: just to be clear, right, is that they work on 156 00:08:50,559 --> 00:08:53,880 Speaker 1: the eye words and the words and the eye words 157 00:08:53,880 --> 00:09:00,600 Speaker 1: are inspiration, ideas, intuition, and impact. And he's reveling in 158 00:09:00,640 --> 00:09:02,520 Speaker 1: those eye words. I mean, is this is he an 159 00:09:02,559 --> 00:09:11,800 Speaker 1: impactful leader or you know, and look at the e words, enthusiasm, emotion, energy, edge. 160 00:09:12,120 --> 00:09:15,280 Speaker 1: Mrs Clinton wasn't showing a lot of those four things. 161 00:09:15,440 --> 00:09:21,160 Speaker 1: And the President really is enthusiastic, highly emotional, incredibly energized, 162 00:09:21,240 --> 00:09:24,120 Speaker 1: and very edgy. He's he's got a lot of traits 163 00:09:24,160 --> 00:09:27,280 Speaker 1: of successful CEOs. With Kevin Roberts. It's a tough choice, 164 00:09:27,400 --> 00:09:30,360 Speaker 1: Tom Brady or Prime Minister met Let's see if we 165 00:09:30,400 --> 00:09:31,640 Speaker 1: can get to Let's see if we can get to 166 00:09:31,679 --> 00:09:33,199 Speaker 1: both here. But let's start with three and A. Heading 167 00:09:33,240 --> 00:09:36,800 Speaker 1: to Philadelphia today for this meeting with GOP congressional leadership. 168 00:09:37,559 --> 00:09:39,120 Speaker 1: What do you what do you make of her approach here? 169 00:09:39,160 --> 00:09:40,480 Speaker 1: What do you think her approach is going to be 170 00:09:40,480 --> 00:09:43,880 Speaker 1: addressing them today speaking with the President tomorrow on Washington. 171 00:09:44,040 --> 00:09:47,319 Speaker 1: I think it's the single smartest initiative that she's made 172 00:09:46,920 --> 00:09:50,000 Speaker 1: since she took the job. Coming over here straight away, 173 00:09:50,040 --> 00:09:53,680 Speaker 1: she's going to demonstrate to President Trump that Britain are 174 00:09:53,800 --> 00:09:57,240 Speaker 1: the strongest allies he could imagine and in this voca 175 00:09:57,360 --> 00:10:01,200 Speaker 1: crazy world around him, Britain's the place to be. And 176 00:10:01,240 --> 00:10:03,400 Speaker 1: I think she's taken some lessons I grew up. One 177 00:10:03,440 --> 00:10:05,640 Speaker 1: of the leaders I write a lot about is Margaret Thatcher, 178 00:10:05,720 --> 00:10:08,360 Speaker 1: and I think the relationship that Thatcher had with President 179 00:10:08,360 --> 00:10:13,160 Speaker 1: Reagan was tremendously advantageous to the West right, but also 180 00:10:13,200 --> 00:10:16,400 Speaker 1: to Great Britain. And Theresa May, I think has taken 181 00:10:16,440 --> 00:10:20,280 Speaker 1: the advice a Sicilian friend gave me, which is swallow 182 00:10:20,400 --> 00:10:24,160 Speaker 1: the toad. Swallow the toad. So when you when you're 183 00:10:24,160 --> 00:10:27,240 Speaker 1: faced with something that's not that's only going to be 184 00:10:27,240 --> 00:10:30,960 Speaker 1: super pleasant, then just devour it and suspend your senses 185 00:10:31,000 --> 00:10:33,960 Speaker 1: for a few seconds. And there's every indication that she's 186 00:10:33,960 --> 00:10:36,240 Speaker 1: going to do that. She's going to come in prove 187 00:10:36,360 --> 00:10:39,200 Speaker 1: to the President that she's here, she wants to work, 188 00:10:39,280 --> 00:10:42,520 Speaker 1: she's gonna help him with a great trade agreement, she's 189 00:10:42,559 --> 00:10:45,480 Speaker 1: going to continue to serve up the best intelligence in 190 00:10:45,520 --> 00:10:49,040 Speaker 1: the world, and she's coming here as the junior partner. 191 00:10:49,080 --> 00:10:52,160 Speaker 1: I don't think she has any any any any kind 192 00:10:52,240 --> 00:10:55,640 Speaker 1: of sense of trying to dominate, and I don't think 193 00:10:55,640 --> 00:10:58,160 Speaker 1: she's going to underestimate him. He then, Yeah, at the time, 194 00:10:58,200 --> 00:10:59,840 Speaker 1: as a question getting in just a sec but it's 195 00:11:00,120 --> 00:11:02,079 Speaker 1: the primary purpose you think that is that the trade deal. 196 00:11:02,120 --> 00:11:03,679 Speaker 1: Is it getting that done as quickly as possible, or 197 00:11:03,800 --> 00:11:06,400 Speaker 1: is it, as you say, to quickly develop what could 198 00:11:06,400 --> 00:11:08,520 Speaker 1: be a very important relationship. I think it's the second, 199 00:11:08,600 --> 00:11:10,480 Speaker 1: you know, because the trade Deally isn't gonna get done 200 00:11:10,520 --> 00:11:13,000 Speaker 1: for eighteen months two years, right because of the whole 201 00:11:13,040 --> 00:11:15,320 Speaker 1: Brexit agreement with the EU and so on and so forth. 202 00:11:15,600 --> 00:11:17,720 Speaker 1: But she's got to I think she's looking around the 203 00:11:17,720 --> 00:11:20,040 Speaker 1: rest of the world and going, Wow, this looks like 204 00:11:20,080 --> 00:11:22,560 Speaker 1: a pretty lonely place. Now, you know, we're all here 205 00:11:22,760 --> 00:11:25,160 Speaker 1: where Britain. We're an island. We're gonna stand doll, but 206 00:11:25,200 --> 00:11:27,280 Speaker 1: it'd be so much better if we stood tall, helped 207 00:11:27,320 --> 00:11:30,400 Speaker 1: by our our big brother here, Kevin Roberts with us 208 00:11:30,400 --> 00:11:34,680 Speaker 1: with all sorts of experience, uh in in moving to 209 00:11:34,760 --> 00:11:37,800 Speaker 1: the next job. So, Kevin, you're a young Turk and 210 00:11:37,840 --> 00:11:40,280 Speaker 1: you're sitting at the Pierre Hotel. You've never been in 211 00:11:40,320 --> 00:11:43,600 Speaker 1: a place this fancy in your life. The eggs are perfect, 212 00:11:43,600 --> 00:11:47,120 Speaker 1: the sausages perfect, and it's a job interview. What does 213 00:11:47,120 --> 00:11:50,800 Speaker 1: the young Turk at a power breakfast say to the 214 00:11:50,960 --> 00:11:54,760 Speaker 1: senior officer across the table? How do you act as 215 00:11:54,800 --> 00:11:57,600 Speaker 1: a young Turk when you go to a power breakfast? 216 00:11:58,040 --> 00:12:02,760 Speaker 1: You asked the senior officer what his purposes and what 217 00:12:02,880 --> 00:12:05,000 Speaker 1: are the things that are important to him? And you riff. 218 00:12:05,080 --> 00:12:09,000 Speaker 1: From there, you ask a question. The most powerful technique 219 00:12:09,000 --> 00:12:14,480 Speaker 1: for young Turk is listening. So David Davis, the young Turkey, 220 00:12:15,960 --> 00:12:18,360 Speaker 1: I'm taking notes here to well, No, but I think 221 00:12:18,400 --> 00:12:21,560 Speaker 1: this is something people UH forget about. Is there's a 222 00:12:21,600 --> 00:12:26,080 Speaker 1: certain ballet to how you have a conversation. Let's move 223 00:12:26,120 --> 00:12:29,040 Speaker 1: on just because of time, Kevin, Uh to this super Bowl? 224 00:12:29,040 --> 00:12:32,800 Speaker 1: I think it's l it's l It's something like that. 225 00:12:33,440 --> 00:12:36,720 Speaker 1: And we've had a lot of guests. I don't even 226 00:12:36,720 --> 00:12:39,920 Speaker 1: know that, we've had a lot of guests that told us, Kevin, 227 00:12:40,280 --> 00:12:43,600 Speaker 1: people still watch TV. Is the formula for the Super 228 00:12:43,640 --> 00:12:45,960 Speaker 1: Bowl the same as it was years ago when you 229 00:12:46,000 --> 00:12:48,560 Speaker 1: were moving what you were Marks, you were Mark three, 230 00:12:48,559 --> 00:12:51,880 Speaker 1: you were Mark one, Turbal Razors. This is the best 231 00:12:51,920 --> 00:12:55,760 Speaker 1: marketing technique I've ever seen. You know, Fox are reveling 232 00:12:55,800 --> 00:12:59,360 Speaker 1: in this. They've gotta make three five million dollars this weekend, 233 00:13:00,040 --> 00:13:03,360 Speaker 1: five million dollars for thirty second spot and the whole 234 00:13:03,480 --> 00:13:05,040 Speaker 1: nation is going to be watching the ads. What does 235 00:13:05,080 --> 00:13:07,920 Speaker 1: it say about digital? Does? What does it say about digital? 236 00:13:08,160 --> 00:13:10,040 Speaker 1: If you're giving us the numbers, you just gave us 237 00:13:10,040 --> 00:13:12,640 Speaker 1: that you better be digital as well. So this is 238 00:13:12,679 --> 00:13:15,280 Speaker 1: not either or you better be using TV as your 239 00:13:15,280 --> 00:13:17,800 Speaker 1: main screen. But that TV has got to lead the 240 00:13:17,800 --> 00:13:20,200 Speaker 1: family of screens because everybody's going to have their mobile 241 00:13:20,280 --> 00:13:22,120 Speaker 1: with them, they're all going to be watching the TV. 242 00:13:22,240 --> 00:13:24,560 Speaker 1: They're all going to be texting, sending, they're gonna have 243 00:13:24,600 --> 00:13:27,320 Speaker 1: their tablets with me with them. So it's about getting 244 00:13:27,360 --> 00:13:29,480 Speaker 1: the family of screens to come to get a TV 245 00:13:29,559 --> 00:13:31,160 Speaker 1: AD different from an AD that's going to have a 246 00:13:31,160 --> 00:13:33,960 Speaker 1: digital life to it. Afterwards. I think it's you're going 247 00:13:34,000 --> 00:13:36,600 Speaker 1: to see the most powerful ideas, not the ads. Ads 248 00:13:36,640 --> 00:13:39,959 Speaker 1: don't matter. Having said that, if there's a Clydesdale, a 249 00:13:40,040 --> 00:13:42,559 Speaker 1: baby or a puppy and it, it's probably gonna rate 250 00:13:42,720 --> 00:13:46,160 Speaker 1: very well. Okay, but this is about the idea. You're 251 00:13:46,160 --> 00:13:50,880 Speaker 1: seeing lots of ideas and people are there watching, watching 252 00:13:50,960 --> 00:13:54,600 Speaker 1: the brands communicate, which we don't really do anymore, right, Kevin, 253 00:13:54,600 --> 00:13:56,680 Speaker 1: Thank you so much, Kevin Roberts. Of course, I can't 254 00:13:56,679 --> 00:14:01,600 Speaker 1: say enough about his book. I really don't like leadership books, folks, 255 00:14:01,720 --> 00:14:04,520 Speaker 1: and this is the only one I recommend. Sixty Shots. 256 00:14:04,920 --> 00:14:08,200 Speaker 1: Not only is it a beautiful book handcrafted in Brooklyn, 257 00:14:08,200 --> 00:14:11,200 Speaker 1: New York, but black beautiful black and white photos. But 258 00:14:11,240 --> 00:14:15,120 Speaker 1: it just says a lot. Kevin Roberts with us UH 259 00:14:15,360 --> 00:14:29,320 Speaker 1: this morning. I want to set this up to David 260 00:14:29,400 --> 00:14:32,680 Speaker 1: with Robert Sinch of Amer's Pierrepont and the last not 261 00:14:32,800 --> 00:14:35,600 Speaker 1: even twenty four hours, nineteen hours, we've had Barry, Ike 262 00:14:35,640 --> 00:14:39,320 Speaker 1: and Green in the Financial Times. The acclaimed academic from Berkeley, 263 00:14:39,640 --> 00:14:42,920 Speaker 1: Ambrose Evans Pritchhert in the Telegraph, writing a blistering note 264 00:14:43,440 --> 00:14:47,960 Speaker 1: on what President Trump doesn't know about the dollar. Bob Sinch, 265 00:14:48,320 --> 00:14:50,160 Speaker 1: if you were to speak to the President, if you 266 00:14:50,480 --> 00:14:54,680 Speaker 1: speak to his team today, what would you lecture them 267 00:14:54,800 --> 00:14:58,680 Speaker 1: or advise them on where the dollars heading? Well, I 268 00:14:58,720 --> 00:15:02,120 Speaker 1: think that that you know, each administration comes in with 269 00:15:02,200 --> 00:15:06,960 Speaker 1: plans and then there are unintended consequences and unexpected items 270 00:15:06,960 --> 00:15:10,000 Speaker 1: that developed. And I think the dollar could be a 271 00:15:10,080 --> 00:15:13,680 Speaker 1: difficult one for this UH, for this incoming administration. Certainly 272 00:15:13,680 --> 00:15:17,800 Speaker 1: when you think about a policy mix of of looser 273 00:15:17,840 --> 00:15:21,200 Speaker 1: fiscal policy and likelihood of tighter monetary policy, that's a 274 00:15:21,240 --> 00:15:26,400 Speaker 1: classic prescription for a stronger currency. And given the focus 275 00:15:26,440 --> 00:15:30,360 Speaker 1: of the administration on trade relationships UM and the fact 276 00:15:30,440 --> 00:15:32,800 Speaker 1: that the dollar is already a little bit above its 277 00:15:32,840 --> 00:15:36,000 Speaker 1: long term average UM, you know, I think it does 278 00:15:36,120 --> 00:15:40,560 Speaker 1: create um issues that they probably aren't thinking about. I 279 00:15:40,560 --> 00:15:43,800 Speaker 1: think there's a lot of of disagreement within the administration. 280 00:15:43,880 --> 00:15:45,640 Speaker 1: There's a lot of disagreement on a lot of topics. 281 00:15:46,080 --> 00:15:48,640 Speaker 1: We certainly see fiscal stimulus on one hand, and then 282 00:15:48,640 --> 00:15:53,040 Speaker 1: the incoming UH nominee for Budget Director talking about budget restraint. 283 00:15:53,680 --> 00:15:56,200 Speaker 1: But I think on the dollar, there are also mixed views, 284 00:15:56,200 --> 00:15:58,360 Speaker 1: some who think the dollars should be a lot weaker 285 00:15:58,400 --> 00:16:01,000 Speaker 1: and some who view the dollar strength as a sign 286 00:16:01,040 --> 00:16:04,280 Speaker 1: of vitality of the US economy. UM. So, I think 287 00:16:04,320 --> 00:16:06,520 Speaker 1: it's it's it's the jury is going to be out 288 00:16:06,520 --> 00:16:08,120 Speaker 1: as to how they come down on this, But I 289 00:16:08,120 --> 00:16:11,320 Speaker 1: do think that the likelihood is they will get a 290 00:16:11,320 --> 00:16:14,840 Speaker 1: stronger dollar in two thousand seventeen, and that may become 291 00:16:14,880 --> 00:16:17,120 Speaker 1: an issue for them for the economy in two thousand 292 00:16:17,120 --> 00:16:19,240 Speaker 1: and eighteen. Will continue the jury theme of the week 293 00:16:19,240 --> 00:16:21,760 Speaker 1: here on Bloomberg Surveillance, there seems like there's some there's 294 00:16:21,760 --> 00:16:23,360 Speaker 1: a split decision in the jury room. Right now. You 295 00:16:23,400 --> 00:16:26,320 Speaker 1: have seven A Nutan testific on Capitol Hill about the 296 00:16:26,160 --> 00:16:29,640 Speaker 1: the strong dollar policy, Donald Trump tweeting about having a 297 00:16:29,640 --> 00:16:31,840 Speaker 1: week dollar. Do you have a sense of where they're 298 00:16:31,880 --> 00:16:33,160 Speaker 1: going to come out on this. Do you have a 299 00:16:33,160 --> 00:16:35,200 Speaker 1: sense that they they they're they're wedded to the strong 300 00:16:35,360 --> 00:16:38,560 Speaker 1: dollar policy. We sub back with the Bob Reuben. You know, 301 00:16:38,640 --> 00:16:41,560 Speaker 1: there are certain things that get into the into the 302 00:16:41,640 --> 00:16:44,080 Speaker 1: sort of the lexicon and and really don't deserve to 303 00:16:44,120 --> 00:16:46,560 Speaker 1: be there anymore, and strong dollar policy is one of them. 304 00:16:46,560 --> 00:16:50,200 Speaker 1: Committed Yeah, well no, but I think that that there 305 00:16:50,240 --> 00:16:52,120 Speaker 1: was this mindset that you had to keep saying strong 306 00:16:52,160 --> 00:16:55,280 Speaker 1: dollar policy. And and my issue I haven't really understood 307 00:16:55,320 --> 00:16:57,440 Speaker 1: for the last decade what that really means. I've never 308 00:16:57,480 --> 00:17:02,040 Speaker 1: seen an administration take specific action to strengthen the dollar. 309 00:17:02,720 --> 00:17:06,399 Speaker 1: And so, you know, I think that that there comes 310 00:17:06,400 --> 00:17:09,720 Speaker 1: a time when when certain phrases have lost their usefulness. 311 00:17:09,800 --> 00:17:13,840 Speaker 1: I think strong dollar policy has reached its time. Uh, 312 00:17:13,960 --> 00:17:16,480 Speaker 1: and it's better for it to just disappear. And I 313 00:17:16,480 --> 00:17:18,359 Speaker 1: think they're gonna they're gonna do that early on in 314 00:17:18,359 --> 00:17:21,760 Speaker 1: this administration. David Worth, the Pier Hotels, power breakfast at 315 00:17:21,800 --> 00:17:27,040 Speaker 1: the Pier Hotel. It's not foots folks pool. You understand that, well, Bob, 316 00:17:27,080 --> 00:17:29,560 Speaker 1: he'll be here with currency manipulator? Are we heading towards 317 00:17:29,560 --> 00:17:33,720 Speaker 1: our President Trump? And America is the ultimate currency manipulator? 318 00:17:34,800 --> 00:17:37,960 Speaker 1: I think that they are going to struggle, UM with 319 00:17:38,040 --> 00:17:42,159 Speaker 1: the currency story and and and clearly where the administration 320 00:17:42,320 --> 00:17:46,240 Speaker 1: has has set its sites UM are on two areas. 321 00:17:46,320 --> 00:17:50,000 Speaker 1: One is is Mexico obviously, and the other is China. Uh. 322 00:17:50,040 --> 00:17:52,959 Speaker 1: What are two big trading partners whose currencies have weakened 323 00:17:53,000 --> 00:17:55,679 Speaker 1: up substantially, Well, those would be the Mexican peso and 324 00:17:55,760 --> 00:17:59,120 Speaker 1: the and the Chinese mon so. So I do think 325 00:17:59,119 --> 00:18:02,840 Speaker 1: that that that their broader objectives UM are going to 326 00:18:02,920 --> 00:18:07,840 Speaker 1: be challenged by these currency movements. And you know China, uh, 327 00:18:08,000 --> 00:18:11,879 Speaker 1: you know, talk about during the campaign naming China currency 328 00:18:11,880 --> 00:18:14,760 Speaker 1: manipulator on day one, we've done. Administration has done a 329 00:18:14,800 --> 00:18:16,960 Speaker 1: lot of things. That isn't one of them. If you 330 00:18:17,000 --> 00:18:21,880 Speaker 1: look at the Treasuries criteria really three criteria for currency 331 00:18:21,920 --> 00:18:25,320 Speaker 1: being our country being named a currency manipulator. China's gone 332 00:18:25,359 --> 00:18:28,120 Speaker 1: from meeting to to only one of those criteria. Their 333 00:18:28,160 --> 00:18:32,119 Speaker 1: reserves are now going down substantially, UM. China faces a 334 00:18:32,119 --> 00:18:35,960 Speaker 1: lot of challenges, and I think that UM that they're 335 00:18:35,960 --> 00:18:39,000 Speaker 1: going to you know, quietly let the currency move around 336 00:18:39,040 --> 00:18:43,240 Speaker 1: and potentially soften up a bit more UM. And I 337 00:18:43,280 --> 00:18:46,040 Speaker 1: think that that's just a natural function of the capital 338 00:18:46,040 --> 00:18:48,360 Speaker 1: outflow is taking place, and it's gonna be very difficult 339 00:18:48,400 --> 00:18:52,359 Speaker 1: for the administration to to battle at that natural force. 340 00:18:52,520 --> 00:18:55,000 Speaker 1: Help us with relative strength here, how is the How 341 00:18:55,000 --> 00:18:57,720 Speaker 1: strong is the dollar relative to how strong it's been historically? 342 00:18:58,359 --> 00:19:01,120 Speaker 1: You know, the way to look at the I think 343 00:19:01,240 --> 00:19:03,840 Speaker 1: is too in a broad long term perspective is to 344 00:19:03,920 --> 00:19:07,679 Speaker 1: look at the real trade weighted dollar UM adjusting for 345 00:19:07,800 --> 00:19:10,119 Speaker 1: relative inflation. And you know, you can look at some 346 00:19:10,200 --> 00:19:14,600 Speaker 1: of the nominal dollar indexes, the Fed's broadest index, and 347 00:19:14,640 --> 00:19:18,040 Speaker 1: it's approaching it's it's it's all time high. But that 348 00:19:18,119 --> 00:19:21,800 Speaker 1: really is because the dollar is up against emerging market currencies, 349 00:19:21,840 --> 00:19:24,800 Speaker 1: they have higher inflation. You need to adjust for that 350 00:19:24,960 --> 00:19:27,960 Speaker 1: over long periods of time. If you look at the 351 00:19:29,600 --> 00:19:33,120 Speaker 1: currency index is adjusted for relative costs and relative inflation. 352 00:19:33,920 --> 00:19:36,320 Speaker 1: Right now, the dollar looks like it's about four or 353 00:19:36,320 --> 00:19:43,040 Speaker 1: five again above its long term average against emerging market currencies, uh, 354 00:19:43,080 --> 00:19:48,399 Speaker 1: but much stronger um against developed currencies, about sevent above 355 00:19:48,440 --> 00:19:52,159 Speaker 1: its long term average against major currencies, which would include 356 00:19:52,160 --> 00:19:56,119 Speaker 1: the Euro, the end, the pound, et cetera. So, while 357 00:19:56,200 --> 00:20:00,000 Speaker 1: the focus of the administration is clearly on trade relation 358 00:20:00,040 --> 00:20:03,280 Speaker 1: and shifts with a lot of emerging market countries. If 359 00:20:03,320 --> 00:20:05,520 Speaker 1: you look at the dollar in a long term perspective, 360 00:20:05,600 --> 00:20:10,199 Speaker 1: it's actually stronger versus major currencies than it is against 361 00:20:10,200 --> 00:20:13,040 Speaker 1: emerging market currencies. And I think that's something that they're 362 00:20:13,080 --> 00:20:15,560 Speaker 1: also um going to have to deal with as we 363 00:20:15,600 --> 00:20:18,000 Speaker 1: go through to seven thousand seventeen. I think more two 364 00:20:18,000 --> 00:20:20,280 Speaker 1: thousand eighteen, if the dollar goes up further this year. 365 00:20:20,400 --> 00:20:22,639 Speaker 1: Robert C. Jamer's Pier Power with us, it is the 366 00:20:22,640 --> 00:20:25,480 Speaker 1: wheels of power breakfast, the wheels up power breakfast at 367 00:20:25,480 --> 00:20:27,200 Speaker 1: the Pier hotel. We're thrilled to be back. Or this 368 00:20:27,280 --> 00:20:30,320 Speaker 1: has become very quickly a wonderful tradition for us. At 369 00:20:30,840 --> 00:20:35,399 Speaker 1: UH Bloomberg Surveillance, I look at dollar dynamics and I 370 00:20:35,440 --> 00:20:39,080 Speaker 1: look at what CEOs need to do. I featured off 371 00:20:39,080 --> 00:20:42,040 Speaker 1: a photograph in the Ft the other day. The CEO 372 00:20:42,080 --> 00:20:46,240 Speaker 1: of Corning revenues abroad and the CEO of Johnson and 373 00:20:46,320 --> 00:20:51,680 Speaker 1: Johnson of revenues are abroad. What the chief executive officers 374 00:20:51,720 --> 00:20:55,600 Speaker 1: and US multinationals want. I'm confused. Do they want a 375 00:20:55,640 --> 00:20:58,919 Speaker 1: strong dollar or not? Well, I think that depends on 376 00:20:59,000 --> 00:21:02,880 Speaker 1: whether they are primarily an exporter or an imporder. UM, 377 00:21:02,920 --> 00:21:06,439 Speaker 1: you know, currency like like many other prices, creates, create 378 00:21:06,600 --> 00:21:10,360 Speaker 1: winners and losers um and in this case, a stronger 379 00:21:10,400 --> 00:21:13,359 Speaker 1: dollar clearly benefiting in borders. A lot of those are 380 00:21:13,440 --> 00:21:17,200 Speaker 1: or the retail sector, and it hurts exporters, and most 381 00:21:17,240 --> 00:21:19,479 Speaker 1: of those exporters or a lot of those exporters are 382 00:21:19,480 --> 00:21:22,560 Speaker 1: in the manufacturing sector, which, of course the administration has 383 00:21:22,600 --> 00:21:26,080 Speaker 1: made a key focus of their policy going forward is 384 00:21:26,119 --> 00:21:29,760 Speaker 1: to boost the manufacturing sector. So I think a lot 385 00:21:29,800 --> 00:21:32,240 Speaker 1: of what we see going forward will be a trade 386 00:21:32,240 --> 00:21:36,600 Speaker 1: off between potentially a somewhat stronger dollar and lower tax 387 00:21:36,720 --> 00:21:40,240 Speaker 1: rates for corporations in the US, which will increase after 388 00:21:40,320 --> 00:21:44,080 Speaker 1: tax returns, And I think that's that's a reasonable trade 389 00:21:44,080 --> 00:21:47,879 Speaker 1: off and probably will balance out. The one that I 390 00:21:47,920 --> 00:21:51,080 Speaker 1: think is the wild card would be this discussion of 391 00:21:51,160 --> 00:21:55,560 Speaker 1: a of a border tax um and border tax system, 392 00:21:55,560 --> 00:21:59,639 Speaker 1: which I think could lead to a much stronger dollar 393 00:22:00,160 --> 00:22:03,280 Speaker 1: in the short run, and that could be particularly problematic 394 00:22:03,280 --> 00:22:06,000 Speaker 1: for the manufacturing sector. So I think, given the complexity 395 00:22:06,080 --> 00:22:09,160 Speaker 1: of a of a border tax arrangement, given its potential 396 00:22:09,200 --> 00:22:12,000 Speaker 1: impact on the currency, I would expect over the next 397 00:22:12,000 --> 00:22:14,359 Speaker 1: few months we're going to hear less and less about 398 00:22:14,440 --> 00:22:17,159 Speaker 1: the border tax proposal that was being put together in 399 00:22:17,160 --> 00:22:19,520 Speaker 1: the House. You know, I mentioned that you haven't seen 400 00:22:19,520 --> 00:22:22,439 Speaker 1: administration do a whole lot to strengthen the dollar. When 401 00:22:22,480 --> 00:22:25,040 Speaker 1: you talk about the strong dollar policy, what power, what 402 00:22:25,119 --> 00:22:27,919 Speaker 1: determinism does the president have? What could Donald Trump do 403 00:22:28,000 --> 00:22:30,760 Speaker 1: to influence the strength of the dollar. Well, you know, 404 00:22:30,920 --> 00:22:34,240 Speaker 1: if you look at dollar over the last couple of weeks, 405 00:22:34,280 --> 00:22:37,959 Speaker 1: it actually has been underperforming interest rates. UM. So I 406 00:22:37,960 --> 00:22:41,240 Speaker 1: think that there has been a short term um sort 407 00:22:41,240 --> 00:22:43,760 Speaker 1: of announcement effect that they're moving away from the strong 408 00:22:43,800 --> 00:22:48,400 Speaker 1: dollar policy. I actually think there may be something broader 409 00:22:48,440 --> 00:22:52,720 Speaker 1: going on, and that is that um. You know, we've 410 00:22:52,760 --> 00:22:58,399 Speaker 1: seen a very large reduction of treasury holdings by foreign 411 00:22:58,440 --> 00:23:02,520 Speaker 1: central banks, and the biggest has been China. And you say, well, 412 00:23:02,600 --> 00:23:05,199 Speaker 1: China's reserves are going down, so therefore their holdings of 413 00:23:05,200 --> 00:23:09,400 Speaker 1: treasuries are going down. Since June, when you know, sort 414 00:23:09,400 --> 00:23:12,240 Speaker 1: of the Chinese reserve numbers have started accelerating to the 415 00:23:12,280 --> 00:23:17,400 Speaker 1: down side. UM. Chinese FX reserves June through November, we're 416 00:23:17,400 --> 00:23:21,719 Speaker 1: down a hundred and fifty three billion UM. China's holdings 417 00:23:21,720 --> 00:23:24,359 Speaker 1: of treasuries in the same five months with down a 418 00:23:24,400 --> 00:23:29,080 Speaker 1: hundred billion, So they've actually been active sellers of US 419 00:23:29,160 --> 00:23:32,560 Speaker 1: Treasury since June, Bob, since let's dive in here to 420 00:23:32,680 --> 00:23:36,920 Speaker 1: the dynamics of China and the surprises of what they 421 00:23:37,040 --> 00:23:42,080 Speaker 1: do with their peaky bank. They want to sell their 422 00:23:42,160 --> 00:23:46,000 Speaker 1: full faith and credit US paper into the market. Let's 423 00:23:46,040 --> 00:23:49,400 Speaker 1: start with why why do they want to do that? Well, 424 00:23:49,400 --> 00:23:53,760 Speaker 1: it's not clear exactly what China's doing, but certainly I 425 00:23:53,880 --> 00:23:57,240 Speaker 1: think their view is that that this is an opportunity 426 00:23:57,280 --> 00:24:00,359 Speaker 1: for them to step up, um, their president, in the 427 00:24:00,560 --> 00:24:05,480 Speaker 1: in the global environment. Uh, certainly. As I said, you know, 428 00:24:05,600 --> 00:24:07,240 Speaker 1: just at the end of the last segment, over the 429 00:24:07,280 --> 00:24:10,040 Speaker 1: last five months and in November, they sold a hundred 430 00:24:10,080 --> 00:24:14,080 Speaker 1: and nine billion of treasuries. The reserves were only down 431 00:24:14,080 --> 00:24:16,280 Speaker 1: by a hundred and fifty three billion. That was a 432 00:24:16,320 --> 00:24:20,520 Speaker 1: conscious decision to sell treasuries relative to other assets. And 433 00:24:20,560 --> 00:24:24,399 Speaker 1: the question is are they doing that, um, you know, 434 00:24:24,480 --> 00:24:27,240 Speaker 1: to try to remind the US administration that in fact 435 00:24:27,320 --> 00:24:29,679 Speaker 1: they are among the bigger holders of treasuries. Who was 436 00:24:29,720 --> 00:24:32,000 Speaker 1: on the receiving end of this, Just like a Brady 437 00:24:32,080 --> 00:24:34,960 Speaker 1: pass in the Super Bowl, someone has to catch it. 438 00:24:35,359 --> 00:24:39,320 Speaker 1: Who buys that paper? You know, it looks like increasingly 439 00:24:39,400 --> 00:24:42,399 Speaker 1: that's coming back into into the domestic environment. You know, 440 00:24:43,119 --> 00:24:46,679 Speaker 1: retail investors have been big, big, big sellers of treasuries 441 00:24:47,160 --> 00:24:50,720 Speaker 1: as global central banks and sovereign wealth funds were accumulating 442 00:24:50,720 --> 00:24:54,879 Speaker 1: treasuries um. It now looks like as interest rate yields 443 00:24:54,880 --> 00:24:57,760 Speaker 1: have been pushed back up a little bit, that maybe 444 00:24:57,760 --> 00:25:01,720 Speaker 1: the the individual investor, re tail investors will come back 445 00:25:01,760 --> 00:25:04,280 Speaker 1: into you know, finding these yield levels a bit more 446 00:25:04,320 --> 00:25:09,320 Speaker 1: attractive um. But in general, you know, you wonder, you know, 447 00:25:09,359 --> 00:25:12,520 Speaker 1: in this environment where US interest rates are backing up, 448 00:25:12,720 --> 00:25:14,560 Speaker 1: yet the dollar has been a bit weaker in the 449 00:25:14,640 --> 00:25:18,280 Speaker 1: last week or two whether this is another effort or 450 00:25:18,280 --> 00:25:22,439 Speaker 1: another action by China, because certainly seeing higher US rates 451 00:25:22,640 --> 00:25:26,960 Speaker 1: and a weaker dollar would suggest that that some entities 452 00:25:27,000 --> 00:25:32,439 Speaker 1: internationally are selling treasuries and selling dollars um and so 453 00:25:32,520 --> 00:25:36,040 Speaker 1: that looks like it's foreign flows. And obviously the higher 454 00:25:36,080 --> 00:25:38,280 Speaker 1: interest rates go in the US, the more that's going 455 00:25:38,359 --> 00:25:41,879 Speaker 1: to constrain the budget process going forward. So you know, 456 00:25:42,000 --> 00:25:45,080 Speaker 1: this is early days, but it looks like there's some 457 00:25:45,200 --> 00:25:50,680 Speaker 1: interesting and potentially unpleasant dynamics beginning to develop in the 458 00:25:50,960 --> 00:25:53,640 Speaker 1: in the global capital markets, and at some of these 459 00:25:53,640 --> 00:25:57,360 Speaker 1: tensions between what the administration would like to do and 460 00:25:57,640 --> 00:26:00,640 Speaker 1: what some of the holders of US debt are are 461 00:26:00,680 --> 00:26:04,000 Speaker 1: trying to push back with Mexico doesn't have that China does. 462 00:26:04,200 --> 00:26:05,720 Speaker 1: Let me step back a little bit and just ask 463 00:26:05,760 --> 00:26:09,199 Speaker 1: you about what we know about trade policy and multilateralism. 464 00:26:09,200 --> 00:26:12,000 Speaker 1: The New York Times running with a draft of an 465 00:26:12,000 --> 00:26:15,320 Speaker 1: executive action that would radically change the US role in 466 00:26:15,320 --> 00:26:18,120 Speaker 1: the United Nations, say that that would extend to other 467 00:26:18,400 --> 00:26:20,639 Speaker 1: multi letter institutions. I assume that might be the I 468 00:26:20,720 --> 00:26:23,320 Speaker 1: m F and the World Bank. Um, what are the 469 00:26:23,359 --> 00:26:25,920 Speaker 1: immediate or the near term consequences of of a more 470 00:26:26,000 --> 00:26:29,520 Speaker 1: inward US when it comes to relationships institutions like those 471 00:26:29,520 --> 00:26:32,640 Speaker 1: and to trade policy more broadly? You know, I think 472 00:26:32,640 --> 00:26:37,760 Speaker 1: in the short run, um, that's not necessarily a terribly 473 00:26:37,840 --> 00:26:41,399 Speaker 1: serious issue. I think that there are many, um, you know, 474 00:26:41,560 --> 00:26:44,360 Speaker 1: in in the conservative way of the Republican Party, who 475 00:26:44,480 --> 00:26:47,400 Speaker 1: feel like the U s's role in these institutions has 476 00:26:47,440 --> 00:26:50,800 Speaker 1: been one of supplying money and not really getting much 477 00:26:50,880 --> 00:26:54,760 Speaker 1: in return. Where it will matter is during the next crisis. 478 00:26:55,640 --> 00:26:58,520 Speaker 1: And you know, what we see is that the importance 479 00:26:58,640 --> 00:27:01,159 Speaker 1: of the United Nations ens or the I m F, 480 00:27:01,240 --> 00:27:06,440 Speaker 1: tends the wayne during times when times are are calm, 481 00:27:06,480 --> 00:27:08,720 Speaker 1: but when there's a crisis, that's when you want them 482 00:27:08,760 --> 00:27:10,840 Speaker 1: to be able to step up and take some action. 483 00:27:11,960 --> 00:27:15,399 Speaker 1: And uh, you know, I think there could be some 484 00:27:15,480 --> 00:27:19,359 Speaker 1: longer term ramifications of this as we get into uh, 485 00:27:19,400 --> 00:27:22,840 Speaker 1: you know, potentially into the next economic crisis environment globally. 486 00:27:23,280 --> 00:27:26,639 Speaker 1: Will these institutions have the same resources and the same 487 00:27:26,720 --> 00:27:30,720 Speaker 1: clout to step in, um and act. And I think 488 00:27:30,720 --> 00:27:32,639 Speaker 1: the jury again is out on that one. You know, 489 00:27:32,680 --> 00:27:35,760 Speaker 1: we make short term decisions, they have longer term ramifications. 490 00:27:36,080 --> 00:27:37,639 Speaker 1: Set the table for the speech that we're gonna hear 491 00:27:37,680 --> 00:27:40,560 Speaker 1: from Theresa may or later today. We were talking about that. 492 00:27:40,600 --> 00:27:43,800 Speaker 1: The UK's GDP numbers earlier there there has been some 493 00:27:43,880 --> 00:27:46,119 Speaker 1: resilience you could call it, or strength. Since that breaks it, 494 00:27:46,760 --> 00:27:47,879 Speaker 1: what do you make of it as you look at 495 00:27:47,920 --> 00:27:50,800 Speaker 1: the UK and you look at Europe right now? You know, Um, 496 00:27:50,880 --> 00:27:54,760 Speaker 1: the UK economy I think has performed surprisingly well in 497 00:27:54,800 --> 00:27:59,080 Speaker 1: the second half of last year relative to consensus, but 498 00:27:59,200 --> 00:28:02,040 Speaker 1: I don't think it's been surprising relative the economic theory. 499 00:28:02,080 --> 00:28:05,360 Speaker 1: Look after the Briggsit vote, there was a major decline 500 00:28:05,400 --> 00:28:07,520 Speaker 1: in the value of the pound, you know, more than 501 00:28:07,520 --> 00:28:10,159 Speaker 1: ten percent on a trade weighted basis. Closing it on 502 00:28:10,920 --> 00:28:14,240 Speaker 1: on a trade weighted basis, if you're a UK consumer 503 00:28:14,600 --> 00:28:18,040 Speaker 1: and you see the pound take an abrupt shot downward, 504 00:28:18,680 --> 00:28:22,680 Speaker 1: what do you do? You buy in anticipation that prices 505 00:28:22,720 --> 00:28:24,760 Speaker 1: are going to be higher in the future, and that's 506 00:28:24,760 --> 00:28:28,000 Speaker 1: what we're starting to see. So I think part of 507 00:28:28,000 --> 00:28:29,960 Speaker 1: what we've done, and part of the strength in the 508 00:28:30,000 --> 00:28:32,680 Speaker 1: UK economy in the second half of two thousand sixteen 509 00:28:33,400 --> 00:28:37,160 Speaker 1: was anticipatory buying by the consumer sector. Retail salesman very 510 00:28:37,200 --> 00:28:41,080 Speaker 1: strong in the UK in anticipation of higher prices two 511 00:28:41,120 --> 00:28:44,719 Speaker 1: thousand seventeen. We're going to get those higher prices, and 512 00:28:44,760 --> 00:28:48,200 Speaker 1: I think if we've brought forward some consumption, we could 513 00:28:48,200 --> 00:28:51,720 Speaker 1: be now entering into a period where the economy does 514 00:28:51,880 --> 00:28:54,840 Speaker 1: begin to soften up a little bit. I don't think 515 00:28:54,880 --> 00:28:58,320 Speaker 1: the production sector, the manufacturing sector in the UK, an 516 00:28:58,360 --> 00:29:01,480 Speaker 1: export sector is large enough to offset that. So I 517 00:29:01,520 --> 00:29:05,840 Speaker 1: think after surprising strength in two thousands sixteen and some complacency, 518 00:29:06,000 --> 00:29:08,600 Speaker 1: we could face a little bit more difficult environment during 519 00:29:08,600 --> 00:29:12,800 Speaker 1: the next six to nine experience and particularly multisector, cross 520 00:29:12,840 --> 00:29:17,520 Speaker 1: asset experience. How much fade or time function on the 521 00:29:17,720 --> 00:29:20,000 Speaker 1: x X is do you put whatever we're gonna see 522 00:29:20,000 --> 00:29:23,239 Speaker 1: out of Donald Trump in Washington? I mean, if they 523 00:29:23,280 --> 00:29:25,680 Speaker 1: do a fiscal game, if they do an infrastructure game, 524 00:29:25,680 --> 00:29:27,840 Speaker 1: if they do this, that and the other thing. Do 525 00:29:27,920 --> 00:29:30,120 Speaker 1: you look at it a two three quarter, four quarter 526 00:29:30,280 --> 00:29:33,800 Speaker 1: exercise or can you really get a chronic, persistent good 527 00:29:34,480 --> 00:29:37,320 Speaker 1: to where America is going? You know, I think in 528 00:29:37,360 --> 00:29:39,440 Speaker 1: the in the very short run, a lot of what's 529 00:29:39,480 --> 00:29:43,440 Speaker 1: been done has been done by executive action UM. And 530 00:29:43,480 --> 00:29:46,320 Speaker 1: in the UK a lot of what was done early 531 00:29:46,400 --> 00:29:49,960 Speaker 1: on UM was a bit of discretion on the part 532 00:29:50,000 --> 00:29:53,400 Speaker 1: of of the you know, the Prime Minister. What we're 533 00:29:53,400 --> 00:29:55,080 Speaker 1: seeing in the UK now and I think we're going 534 00:29:55,120 --> 00:29:57,720 Speaker 1: to see in the US as we get into into 535 00:29:57,760 --> 00:30:00,240 Speaker 1: the middle part of this year, is that at the 536 00:30:00,280 --> 00:30:02,680 Speaker 1: details of the weeds are are a lot more difficult 537 00:30:02,800 --> 00:30:06,520 Speaker 1: to uh to traverse. And I think that that after 538 00:30:06,560 --> 00:30:08,600 Speaker 1: a lot of these executive actions, now we're going to 539 00:30:08,680 --> 00:30:12,760 Speaker 1: get into the real policy making um, you know, agreements 540 00:30:12,840 --> 00:30:16,680 Speaker 1: on on on fiscal policy, what comes first tax cuts 541 00:30:17,240 --> 00:30:22,120 Speaker 1: or or infrastructure spending. I think Prime Minister May is 542 00:30:22,240 --> 00:30:25,320 Speaker 1: now experiencing in terms of the details of going through 543 00:30:25,360 --> 00:30:29,880 Speaker 1: parliament and and and and parliamentary agreements, et cetera. What 544 00:30:30,000 --> 00:30:33,200 Speaker 1: the administration might be facing come the spring. Right, Bob, 545 00:30:33,240 --> 00:30:36,160 Speaker 1: since thank you so much, appreciate it, well timed and 546 00:30:36,200 --> 00:30:38,040 Speaker 1: all that with the amorous Pierre point. And he put 547 00:30:38,040 --> 00:30:41,360 Speaker 1: out a research note this morning which delineates and provides 548 00:30:41,400 --> 00:30:45,000 Speaker 1: a massive distinction on Bloomberg surveillance between those of chow 549 00:30:45,120 --> 00:30:47,880 Speaker 1: down on the marginal piece of bacon at the Wheels 550 00:30:47,920 --> 00:30:50,680 Speaker 1: Up Power Breakfast of Pier Hotel and those of chow 551 00:30:50,800 --> 00:30:53,760 Speaker 1: down on the second or third kale smoothie at the 552 00:30:53,760 --> 00:30:56,120 Speaker 1: Wheels Up Power Breakfast the Pier Hotel. In this case, 553 00:30:56,120 --> 00:30:58,120 Speaker 1: we will we will make an exception and not respect 554 00:30:58,120 --> 00:31:00,760 Speaker 1: the copyright of our guests. We'll put that on so 555 00:31:00,000 --> 00:31:03,080 Speaker 1: to the media we do not protect the copyright of 556 00:31:03,080 --> 00:31:09,640 Speaker 1: our guests when they they notice the massive deflate. But 557 00:31:09,720 --> 00:31:11,640 Speaker 1: what a great data of Bob Sin. I mean really, 558 00:31:11,680 --> 00:31:13,680 Speaker 1: the Berry I can Green essay and the f T 559 00:31:14,000 --> 00:31:18,400 Speaker 1: was just extraordinary, David, A real dissertation, a clinic on 560 00:31:19,000 --> 00:31:22,360 Speaker 1: um the second and third order outcomes of a stronger 561 00:31:22,440 --> 00:31:24,480 Speaker 1: US dollar. Yeah, I hope to talk to him against you. 562 00:31:24,520 --> 00:31:26,200 Speaker 1: I think we last poo to him from Berlin. I 563 00:31:26,200 --> 00:31:28,000 Speaker 1: think he was spending some time at the American Academy 564 00:31:28,280 --> 00:31:30,160 Speaker 1: in Bertlin. But Berry I can Green of UC Berkeley, 565 00:31:30,320 --> 00:31:41,719 Speaker 1: great on trade and U macro economics generally brought you 566 00:31:41,800 --> 00:31:45,440 Speaker 1: by Bank of America. Mary Lynch. Dedicated to bringing our 567 00:31:45,480 --> 00:31:49,080 Speaker 1: clients insights and solutions to meet the challenges of a 568 00:31:49,120 --> 00:31:54,000 Speaker 1: transforming world. That's the power of global connections, Mary Lynch, Pierce, 569 00:31:54,080 --> 00:32:02,080 Speaker 1: Feder and Smith Incorporated Member s I p C is 570 00:32:02,160 --> 00:32:05,120 Speaker 1: David Gerin, Tom Keane at the Wheels Up Power Breakfast 571 00:32:05,760 --> 00:32:08,760 Speaker 1: here at the Pierre Hotel. Now joining us on the 572 00:32:08,800 --> 00:32:12,480 Speaker 1: Spectrum Maner Price phone line, spectrumner Prise nationwide fiber based 573 00:32:12,480 --> 00:32:15,920 Speaker 1: network and I T infrastructure solution is one of the 574 00:32:16,040 --> 00:32:21,120 Speaker 1: nation's jewels. The economic historian Brad DeLong of Berkeley he 575 00:32:21,200 --> 00:32:23,360 Speaker 1: is a liberal that liberals hate because he'll go right 576 00:32:23,440 --> 00:32:26,320 Speaker 1: after him if they're stupid, And of course he's mustered 577 00:32:26,400 --> 00:32:31,080 Speaker 1: for all conservatives trying to recalibrate and readjust. Professor DeLong 578 00:32:31,240 --> 00:32:36,360 Speaker 1: has written the definitive piece on trade and the Trump administration. 579 00:32:36,440 --> 00:32:38,440 Speaker 1: Look for that at Vox. I've sent it out the 580 00:32:38,520 --> 00:32:42,760 Speaker 1: last few days. Brad, so pleased you could join us today. 581 00:32:42,960 --> 00:32:46,040 Speaker 1: The heart of your essay is to have the courage 582 00:32:46,080 --> 00:32:50,400 Speaker 1: to compare the United States to Germany. I thought Germany 583 00:32:50,520 --> 00:32:54,080 Speaker 1: was getting everything right, isn't it Germany gets it right. 584 00:32:54,200 --> 00:32:58,880 Speaker 1: In America does not. So Germany has gotten it right 585 00:32:59,000 --> 00:33:03,840 Speaker 1: with respect to it's trade and its export producting over 586 00:33:03,880 --> 00:33:08,040 Speaker 1: the past that you use UM, It's done everything that 587 00:33:08,120 --> 00:33:11,960 Speaker 1: you should be in order to be a good, long 588 00:33:12,080 --> 00:33:18,080 Speaker 1: run export technologically progressive powerhouse. It's used government money in 589 00:33:18,200 --> 00:33:22,760 Speaker 1: order to carefully nurture its communities of engineering practice. It's 590 00:33:22,800 --> 00:33:26,480 Speaker 1: put a huge amount of effort into on the job 591 00:33:26,600 --> 00:33:30,840 Speaker 1: and formal training of workers for manufacturing jobs. It's kept 592 00:33:30,840 --> 00:33:34,320 Speaker 1: the value of its currency mode so the market doesn't 593 00:33:34,320 --> 00:33:37,920 Speaker 1: send false signals to companies that it should be UM 594 00:33:38,040 --> 00:33:42,600 Speaker 1: that they should shut down. And it's run budget surpluses 595 00:33:42,720 --> 00:33:47,000 Speaker 1: and thus trained surpluses UM, thus performing the function that 596 00:33:47,040 --> 00:33:50,480 Speaker 1: a rich country ought to perform of helping the rest 597 00:33:50,480 --> 00:33:54,960 Speaker 1: of the world industrialized by finance their investment. And of course, 598 00:33:54,960 --> 00:33:59,880 Speaker 1: if you finance their investment by lending money abroad, they 599 00:34:00,000 --> 00:34:03,920 Speaker 1: then use that money to buy your manufacturing. This has 600 00:34:04,000 --> 00:34:07,000 Speaker 1: been a big change from the policies the US has followed, 601 00:34:07,160 --> 00:34:10,680 Speaker 1: you know, the Reagan deficits, the Bush forty three deficits, 602 00:34:10,719 --> 00:34:15,520 Speaker 1: the strong dollar policy, rich country not minding money to 603 00:34:15,560 --> 00:34:19,719 Speaker 1: the world but becoming instead the world's banker. Um, and 604 00:34:19,920 --> 00:34:24,920 Speaker 1: those big policy mistakes. Out of them, the manufacturing share 605 00:34:24,920 --> 00:34:28,120 Speaker 1: of our workforce is now nine percent rather than about twelve. 606 00:34:28,560 --> 00:34:30,800 Speaker 1: But that has nothing to do with the trade deal. Brett, 607 00:34:30,920 --> 00:34:35,640 Speaker 1: help me here with the DeLong prescription for President Trump, 608 00:34:35,840 --> 00:34:39,960 Speaker 1: given his politics and given the voice of people that 609 00:34:40,120 --> 00:34:44,400 Speaker 1: voted him into office. What is the DeLong to do list? 610 00:34:45,160 --> 00:34:51,440 Speaker 1: Given Mr Trump's proclivities. UM, Well, you know, the hope, 611 00:34:53,000 --> 00:34:55,800 Speaker 1: I will really say it was a hope, the dream 612 00:34:55,880 --> 00:35:00,799 Speaker 1: to wish. The absolute fantasy, UM was is that he 613 00:35:01,000 --> 00:35:06,640 Speaker 1: meant what he said about making health care system in 614 00:35:06,719 --> 00:35:11,680 Speaker 1: which every American was covered by insurance, making a greater 615 00:35:11,840 --> 00:35:15,480 Speaker 1: health care system than Obamacare, and meant what he said 616 00:35:15,719 --> 00:35:20,840 Speaker 1: about getting American workers jobs and getting America is good jobs. 617 00:35:22,440 --> 00:35:27,640 Speaker 1: But as far as employments concerned, he's calling for higher 618 00:35:27,640 --> 00:35:32,279 Speaker 1: interest rates. UM says cheap money is bad even though 619 00:35:32,320 --> 00:35:36,720 Speaker 1: there are no signs of inflation. Um, he's calling for 620 00:35:36,880 --> 00:35:42,640 Speaker 1: a STRUM is calling for big deficits, big government deficits 621 00:35:42,760 --> 00:35:45,600 Speaker 1: that will push up demand for money, and those interest 622 00:35:45,680 --> 00:35:48,359 Speaker 1: rates and the deficits are going to raise rather than 623 00:35:48,440 --> 00:35:51,600 Speaker 1: lower the dollar and make it hard to export. As 624 00:35:51,719 --> 00:35:56,480 Speaker 1: Larry Summers was periodically granting about in the pages of 625 00:35:56,520 --> 00:35:59,400 Speaker 1: the New York Times. If Trump doesn't like a strong dollar, 626 00:35:59,520 --> 00:36:02,600 Speaker 1: why does his trade secretary like one of this policy 627 00:36:02,640 --> 00:36:08,880 Speaker 1: is guaranteed the preserved one, you know, And he was 628 00:36:08,920 --> 00:36:11,920 Speaker 1: supposed to be soronic in terms of his wanting to 629 00:36:12,000 --> 00:36:16,400 Speaker 1: build things in order to modernize America's infrastructure. You'd expect 630 00:36:16,440 --> 00:36:19,880 Speaker 1: the real estate developer would want to be a builder. Well, 631 00:36:19,960 --> 00:36:24,360 Speaker 1: let's see the bridges, high speed rails. Let's have David 632 00:36:24,360 --> 00:36:25,960 Speaker 1: g a jump in here, and we'll have you back 633 00:36:26,000 --> 00:36:28,520 Speaker 1: for our next bakers. David jump into a few questions. Yeah, 634 00:36:28,560 --> 00:36:30,600 Speaker 1: I was, you know, you're The essay that Tom mentioned, 635 00:36:30,600 --> 00:36:32,720 Speaker 1: the one that you wrote for Boxes is so thorough 636 00:36:32,760 --> 00:36:35,200 Speaker 1: and extraordinary, and part of the essay I like the 637 00:36:35,200 --> 00:36:38,400 Speaker 1: most was about manufacturing. There was this sense throughout the 638 00:36:38,440 --> 00:36:40,040 Speaker 1: campaign that what Donald Trump was going to do is 639 00:36:40,080 --> 00:36:42,759 Speaker 1: bring manufacturing jobs. Fact, you write in detail about what 640 00:36:42,800 --> 00:36:45,560 Speaker 1: happens when when a factory closes. That outline that for 641 00:36:45,719 --> 00:36:47,400 Speaker 1: us here. If if I'm working for a factory in 642 00:36:47,400 --> 00:36:49,239 Speaker 1: the factory shuts down, what's likely to happen to me 643 00:36:49,239 --> 00:36:53,239 Speaker 1: when it comes to to my next job. Well, it 644 00:36:53,360 --> 00:36:56,399 Speaker 1: very much depends how high the unemployment rateing quin your 645 00:36:56,400 --> 00:37:00,279 Speaker 1: factory ships, um, and they go to places people here 646 00:37:00,320 --> 00:37:05,000 Speaker 1: are kills On doctor and Stephen Davis who have traced 647 00:37:05,120 --> 00:37:11,360 Speaker 1: what happens to people in large layoffs. It's a bad thing. Um. 648 00:37:11,520 --> 00:37:15,200 Speaker 1: If your factory shots, your income over the next decade 649 00:37:15,280 --> 00:37:18,040 Speaker 1: is likely to be about ten percent lower. If the 650 00:37:18,120 --> 00:37:22,840 Speaker 1: unemployment rate is not hot, which means you'll have a 651 00:37:22,920 --> 00:37:27,160 Speaker 1: spell of unemployment, you might have to move, but you'll 652 00:37:27,239 --> 00:37:31,319 Speaker 1: get another job about where your job would have been 653 00:37:31,440 --> 00:37:34,600 Speaker 1: had you stayed on it. If you lose your job 654 00:37:34,680 --> 00:37:38,319 Speaker 1: when the unemployment rate is high, by contrast, if it 655 00:37:38,320 --> 00:37:42,879 Speaker 1: becomes simply awful, your income over the next twenty years 656 00:37:43,000 --> 00:37:46,600 Speaker 1: is going to be lower than it would have been otherwise. 657 00:37:47,680 --> 00:37:51,880 Speaker 1: To lose your job in a depression, Um, to lose 658 00:37:51,920 --> 00:37:53,920 Speaker 1: your job in late two thousand and eight and two 659 00:37:53,960 --> 00:37:58,960 Speaker 1: thousand and nine or in nine night three is a 660 00:37:59,160 --> 00:38:05,080 Speaker 1: life change jing um kind of destructive event. Which is 661 00:38:05,080 --> 00:38:07,760 Speaker 1: why it's so important. Which is why it's so important 662 00:38:07,800 --> 00:38:10,040 Speaker 1: if you have a depression, to make sure you have 663 00:38:10,120 --> 00:38:13,839 Speaker 1: a very rapid d shape recovery after route, not just 664 00:38:13,920 --> 00:38:16,160 Speaker 1: be happy when the clap stop. Something that the President 665 00:38:16,200 --> 00:38:19,080 Speaker 1: said that then candidate said on the campaign trail was 666 00:38:19,400 --> 00:38:20,880 Speaker 1: you know that he was going to bring these manufacturing 667 00:38:20,920 --> 00:38:22,840 Speaker 1: jobs back. How long is it going to take before 668 00:38:22,840 --> 00:38:24,560 Speaker 1: he realizes that he's going to have to make some 669 00:38:24,600 --> 00:38:27,880 Speaker 1: investment in training. He didn't talk a whole lot about training, 670 00:38:27,880 --> 00:38:30,200 Speaker 1: but I imagine that that's going to be a policy 671 00:38:30,200 --> 00:38:32,160 Speaker 1: priority that he doesn't maybe elect to make, but has 672 00:38:32,200 --> 00:38:41,000 Speaker 1: to happen. UM. I don't know. There doesn't seem debate 673 00:38:41,160 --> 00:38:44,960 Speaker 1: a great deal of logic here, right. The crowds on 674 00:38:45,040 --> 00:38:50,160 Speaker 1: an auguration Day were told were the largest in history. Um. 675 00:38:50,200 --> 00:38:55,080 Speaker 1: The electoral victory was the biggest landslide in fifty years. 676 00:38:56,360 --> 00:39:00,439 Speaker 1: That Donald Trump basically a pitch man, Brett, don't make 677 00:39:00,480 --> 00:39:03,600 Speaker 1: a pitch. I want to know what attached to that 678 00:39:03,960 --> 00:39:08,440 Speaker 1: very quickly here. I want to come back. But when 679 00:39:08,440 --> 00:39:11,640 Speaker 1: we look at China and the w t O, is 680 00:39:11,680 --> 00:39:15,239 Speaker 1: that salvageable after the collapse of TPP quickly? And I 681 00:39:15,239 --> 00:39:21,360 Speaker 1: want to come back on this salvageable for China, that 682 00:39:22,520 --> 00:39:27,120 Speaker 1: we're a huge market for China. The fact that we 683 00:39:27,239 --> 00:39:30,399 Speaker 1: have been a huge market for China has gotten us 684 00:39:30,440 --> 00:39:34,440 Speaker 1: an awful lot of very good stuff cheap over the 685 00:39:34,480 --> 00:39:40,759 Speaker 1: past fifteen years has been a major benefit, especially Americans 686 00:39:40,800 --> 00:39:43,520 Speaker 1: who voted for Trump and worked at Walmart. Whatever your 687 00:39:43,600 --> 00:39:48,680 Speaker 1: political proclivities, Brad DeLonge tour to force at Vox on trade. 688 00:39:48,840 --> 00:39:51,280 Speaker 1: That is our discussing point here a little more time 689 00:39:51,560 --> 00:39:55,560 Speaker 1: with Professor DeLong. Brad, you talked about a second Gilded Age, 690 00:39:56,120 --> 00:39:59,080 Speaker 1: a lot of America flat on their backs, entrusted a 691 00:39:59,120 --> 00:40:04,040 Speaker 1: gazillionaire of from New York to write this inequality that 692 00:40:04,080 --> 00:40:08,719 Speaker 1: we have. How does a Republican Congress, how does Mr 693 00:40:08,800 --> 00:40:15,840 Speaker 1: Trump begin to take the polish off our second Gilded Age? Um? 694 00:40:15,880 --> 00:40:18,520 Speaker 1: I don't know right that is, I have a quest. 695 00:40:18,520 --> 00:40:20,680 Speaker 1: I have a note here from Darry I can greet 696 00:40:20,719 --> 00:40:24,560 Speaker 1: in the office next door saying, hey, he's extremely pleased 697 00:40:24,600 --> 00:40:27,719 Speaker 1: to be on your show next week, and could I 698 00:40:27,760 --> 00:40:30,960 Speaker 1: make sure to stress the fact that all of Trump's 699 00:40:31,000 --> 00:40:35,240 Speaker 1: policies seemed to be calculated to reduce employment in manufacturing 700 00:40:35,719 --> 00:40:38,080 Speaker 1: by what they do to the value of the dollars 701 00:40:38,400 --> 00:40:42,280 Speaker 1: um and to the United States savings, investments, demands, supply balance, 702 00:40:42,680 --> 00:40:47,800 Speaker 1: and yet nothing to increase it. Back of the Reggae administration, 703 00:40:47,920 --> 00:40:50,120 Speaker 1: you have some that a president who has come in 704 00:40:50,239 --> 00:40:54,480 Speaker 1: and promised to do everything, and everyone in the administration 705 00:40:54,719 --> 00:40:57,640 Speaker 1: thought they had his baton, and they bought an e 706 00:40:57,760 --> 00:41:00,759 Speaker 1: rep red and eventually the po these we think of 707 00:41:00,800 --> 00:41:04,400 Speaker 1: as Reaganism emerged. No one could have predicted that what 708 00:41:04,560 --> 00:41:07,600 Speaker 1: they would have been beforehand, except for spending more money 709 00:41:07,680 --> 00:41:11,480 Speaker 1: on defense. This is very similar, Brad. Final question, if 710 00:41:11,480 --> 00:41:14,040 Speaker 1: we may, and thank you so much for me mentioning 711 00:41:14,040 --> 00:41:16,480 Speaker 1: Professor i Can Green, folks, this is what we try 712 00:41:16,520 --> 00:41:19,200 Speaker 1: to do with surveillance, with that Professor DeLong with his 713 00:41:19,280 --> 00:41:21,759 Speaker 1: tour to force and box on trade, and I Can 714 00:41:21,800 --> 00:41:24,160 Speaker 1: Green of Berkeley writing in the f T today an 715 00:41:24,160 --> 00:41:28,960 Speaker 1: absolute clinic on dollar dynamics, Brad DeLong. If we get 716 00:41:29,000 --> 00:41:32,160 Speaker 1: Iken Green's worry of a strong dollar, what does that 717 00:41:32,239 --> 00:41:38,719 Speaker 1: do to Mr Trump's optionality in trade? It means that 718 00:41:39,200 --> 00:41:43,719 Speaker 1: he can blame China and possibly blame Germany, although he 719 00:41:43,760 --> 00:41:48,080 Speaker 1: hasn't blamed Germany anymore. That something has gone wrong, that 720 00:41:48,200 --> 00:41:52,000 Speaker 1: the value will be again has somehow fallen um and 721 00:41:52,400 --> 00:41:55,319 Speaker 1: China must have done something to create that. Therefore we 722 00:41:55,440 --> 00:41:59,640 Speaker 1: blame China. But that Barry is almost sure to say 723 00:41:59,719 --> 00:42:04,520 Speaker 1: next week. The real that the markets to supply and 724 00:42:04,600 --> 00:42:09,040 Speaker 1: demand for currency is not something you can ignore. The 725 00:42:09,120 --> 00:42:12,280 Speaker 1: big Trump tax cuts are going to raise the demands 726 00:42:12,280 --> 00:42:16,000 Speaker 1: for dollars worldwide. Um plus fashion on the FED to 727 00:42:16,080 --> 00:42:18,960 Speaker 1: raise interest rates will raise demand for dollars even further 728 00:42:19,040 --> 00:42:22,879 Speaker 1: and even more, and given in factories a much harder time, 729 00:42:23,040 --> 00:42:26,920 Speaker 1: we run out of time. Congratulations on changing the global 730 00:42:26,920 --> 00:42:30,360 Speaker 1: and the national debate with your essay on Trede. Professor 731 00:42:30,400 --> 00:42:40,720 Speaker 1: DeLong Is at the University of California at Berkeley. Thanks 732 00:42:40,719 --> 00:42:45,160 Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen 733 00:42:45,239 --> 00:42:50,560 Speaker 1: to interviews on iTunes, SoundCloud, or whichever podcast platform you prefer. 734 00:42:51,320 --> 00:42:54,200 Speaker 1: I'm out on Twitter at Tom Keene, David gura Is 735 00:42:54,280 --> 00:42:58,040 Speaker 1: at David Gura. Before the podcast, you can always catch 736 00:42:58,160 --> 00:43:14,239 Speaker 1: us worldwide. I'm Bloomberg Radio, brought you by Bank of 737 00:43:14,239 --> 00:43:18,239 Speaker 1: America Mary Lynch. Dedicated to bringing our clients insights and 738 00:43:18,360 --> 00:43:22,520 Speaker 1: solutions to meet the challenges of a transforming world. That's 739 00:43:22,560 --> 00:43:26,160 Speaker 1: the power of global connections. Mary Lynch, Pierce, Fenner and 740 00:43:26,239 --> 00:43:29,600 Speaker 1: Smith Incorporated, Member s I p C.