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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: This conversation is for every elected politician in Washington as

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Speaker 2: they listen on ninety ninety one FM this morning. Douglas

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Speaker 2: Erwin is an institution. Blanche Flower is not an institution.

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Speaker 2: He's just a macroeconomist. Doug Irwin is an institution at

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Speaker 2: Dartmouth at College. In his ute, the definitive book and

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Speaker 2: still fresh, Fresh Fresh is against the tide.

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Speaker 3: It was definitive at the time. More recently is clashing

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Speaker 3: over commerce.

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Speaker 2: For those of you on YouTube, it's over his right

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Speaker 2: shoulder at right now and book lined office, Professor Irwin.

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Speaker 2: We are honored that you would attend today. If you

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Speaker 2: were to meet with a congressional leadership today, how should

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Speaker 2: they respond to what the executive branch has wrought?

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Speaker 4: I would say that under the US Constitution, Article one,

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Speaker 4: section eight, you have power over tariffs, and the problem

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Speaker 4: has been is successive congresses have delegated so many powers

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Speaker 4: of tariff setting to the president on the assumption that

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Speaker 4: the president will basically act in the national interest and

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Speaker 4: tend to lower tariffs and trade agreements. That Congress has

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Speaker 4: given up its authority. So it's time for Congress to

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Speaker 4: stand up and assert itself a bit more on trade.

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Speaker 4: Their constituents will be hurt by many of these measures,

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Speaker 4: and yet the Republicans seem to be very quiet about it.

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Speaker 2: How will they affect that reassertion. Do they need the

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Speaker 2: judicial branch to support them or do they just sit

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Speaker 2: down with the beverage of their choice. What do they

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Speaker 2: drink at Dartmouth? It's like lebats.

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Speaker 3: Yes, they like Doug Irwin. Do they have a labet?

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Speaker 3: So the president say this is too much?

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Speaker 4: I think you have to look back to the first

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Speaker 4: Trump term when President Trump almost pulled out of NAFTA

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Speaker 4: and he was convinced by his Secretary of Agriculture and

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Speaker 4: a few congressional allies that that would not be a

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Speaker 4: right move, that he should renegotiate it because they were

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Speaker 4: pointing to the harm that would be done to his voters,

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Speaker 4: farmers in the Midwest, manufacturing firms in the Upper Midwest

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Speaker 4: that depend on exports, and so that sort of helped

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Speaker 4: convince him in terms of a longer run solution of

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Speaker 4: changing legislation to in power Congress more that sort of

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Speaker 4: a long run solution to what is now a short

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Speaker 4: term crisis.

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Speaker 5: Doug, how do we think about tariffs in a global

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Speaker 5: intertwined economy. It's not like the eighteen hundreds where we

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Speaker 5: imported a relatively small number of goods. We exported a

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Speaker 5: relatively small number goods and then global economy to tariffs.

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Speaker 6: How do they work?

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Speaker 4: Yeah, you're right, it's actually very different than it was

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Speaker 4: a century ago. A lot of trade a century ago

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Speaker 4: was sort of in final goods or in very basic

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Speaker 4: raw materials, and now what we have is integrated supply

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Speaker 4: chains and international production networks. So the web of commerce

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Speaker 4: and the greedy witch firms in all sectors are sort

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Speaker 4: of bound to the global economy in some way. Is

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Speaker 4: so much more extensive today than it was even fifty

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Speaker 4: years ago, let alone one hundred years ago. The terriffs

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Speaker 4: have much more ripple effects throughout the economy, and these

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Speaker 4: proposed tariffs will rip apart North American supply chains and

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Speaker 4: be quite extensive in terms of the reach that they

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Speaker 4: will have.

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Speaker 2: Deugr when you mentioned Frank Tausig the giant at Harvard

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Speaker 2: years ago.

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Speaker 3: This is folks one hundred years ago writing on terrffs.

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Speaker 2: To me, there's a whole mythology going on right now,

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Speaker 2: whether it's a president's affair with mister McKinley from another

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Speaker 2: time and place.

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Speaker 3: We trot back Lisa mentioned.

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Speaker 2: Smoot Holly this morning, or we go back to August

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Speaker 2: of nineteen seventy one when the world turned upside down

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Speaker 2: with Richard Nixon and gold myth Doug Irwin is most wrong.

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Speaker 4: Well, I'd say the myth that the US economy grew

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Speaker 4: in the late nineteenth century. We became an industrial power

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Speaker 4: because of the tariff. There's a classic case of correlation

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Speaker 4: not being causation. So there are a lot of reasons

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Speaker 4: why the US became an industrial power after the Civil War.

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Speaker 4: Up until World War One, we had massive immigration. Not

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Speaker 4: many people in the Comme administration and mentioned that we

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Speaker 4: were the recipient of major capital inflows from Britain and

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Speaker 4: other countries. We were adopting technology then the technological leader

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Speaker 4: of Britain. We are pretty much open to the world

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Speaker 4: except in trade, so we did have high tariffs, but

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Speaker 4: they did promote manufacturing a bit. But if you look

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Speaker 4: where the productivity growth was, it was in the service sector.

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Speaker 4: It was railroads and then later electrification and telecommunications. It

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Speaker 4: wasn't just manufacturing and becoming rich because of the tariff walls.

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Speaker 2: If you're just joining us this morning, Bloomberg Surveillance, and

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Speaker 2: thank you for joining Bloomberg. We continue with Douglas Erwin

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Speaker 2: of Dartmouth at College. Many good guests coming up, including

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Speaker 2: Damien Sasa are in Foreign Exchange down negative five ninety

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Speaker 2: one to Erwin of Dartmouth.

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Speaker 5: Paul Sweeney, Professor, talk to us about these tariffs in

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Speaker 5: the context of they seem to be enacted by President

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Speaker 5: Trump in response to non economic issues per se, maybe

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Speaker 5: whether it's the fentanyl coming into this country, whether it's

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Speaker 5: immigration policy from our neighbors. Is that kind of the

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Speaker 5: way tariffs should be used, typically are used. How do

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Speaker 5: you think about that?

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Speaker 4: Well, what's interesting about these is they haven't really been

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Speaker 4: vetted by the Trump economic team. His US Trade representative

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Speaker 4: is not in office yet. We've just had the confirmation

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Speaker 4: of the Treasury Secretary Commerce Secretary to come. So usually

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Speaker 4: when countries imposed tarrifs, and usually when the US has

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Speaker 4: done this in the past, there's an interagency process where

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Speaker 4: you deliberate and you figure out what is the best

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Speaker 4: case and how can we make these work? And I

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Speaker 4: think these are a little bit in advance of those

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Speaker 4: advanced discussions within the administration. So I think you get

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Speaker 4: this hodgepodge of reasons why we're doing this. It could

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Speaker 4: be the fentanyl phrase of the migrants. But we also

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Speaker 4: hear still about the trade dempsit. I mean, when President

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Speaker 4: Trump makes these statements, comes back to the imbalanced trade

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Speaker 4: and he's actually ordered a review on that. But it's

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Speaker 4: very hard for other countries negotiating, and there are ten

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Speaker 4: different things that are being flung at you at in

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Speaker 4: terms of what you're doing wrong.

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Speaker 2: Dougarwin honored to have you here for breaking news. This

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Speaker 2: is some Doug Ford. He is a Premier of Ontario.

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Speaker 2: He's basically I mean Ontario stretch is from just north

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Speaker 2: of Hanover, New Hampshire, all the way over to Carlton

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Speaker 2: College in Minnesota. But the Ontario government says they will

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Speaker 2: cancel all US contracts. And what's important is this is

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Speaker 2: quote we're going one step further we'll be ripping up

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Speaker 2: the province's contract with Starlink, and of course it has

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Speaker 2: to do with the Elon Musk and all that. Dug Ford.

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Speaker 2: Service sector hasn't been talked about much. Do you expect

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Speaker 2: service sector to be harmed as much as the goods sector?

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Speaker 4: Not as much because they're not directly hit by tariffs.

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Speaker 4: But there's a complementarity between trade and services and trade

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Speaker 4: and goods, and the two often go hand in hand.

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Speaker 4: So if you disrupt trade and goods, there's going to

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Speaker 4: be some spillower effects, negative ones for the service sector

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Speaker 4: as well.

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Speaker 5: Professor. Some of the concerns here as it relates to

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Speaker 5: tariffs just in general is that they are inflationary in

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Speaker 5: the US economy. How do you think about that?

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Speaker 4: But I don't think they don't cause inflation in the

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Speaker 4: sense of a sustained increase in the CPI. They are

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Speaker 4: sort of level effects, so they will increase the level

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Speaker 4: of consumer prices and industrial prices, so that will lead

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Speaker 4: to a bump and measured inflation. It's not clear that

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Speaker 4: FED has to respond to that, but what that means

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Speaker 4: is the declining real income and purchasing power of those

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Speaker 4: businesses and households. I mean, just to give you a

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Speaker 4: personal example which I shared on social media yesterday, I

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Speaker 4: had an email from Irving Oil, which provides US with propaine,

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Speaker 4: saying that any tax that's levied on them as they

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Speaker 4: ship propane from Canada to the US will be directly

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Speaker 4: added to the bill that we're facing here in New Hampshire.

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Speaker 4: So even before the terrorists took effect, are already being

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Speaker 4: warned prices are going to go off.

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Speaker 2: Lightheiser, and it's on my table at home. No trade

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Speaker 2: is free. Robert Leiitthheiser focused on China. Lightheiser pushed aside

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Speaker 2: in the second Trump administration, Douger went on a ten

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Speaker 2: percent tariff on China. How would you suggest Beijing will respond?

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Speaker 4: Actually, I'm a little bit less worried about China, and

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Speaker 4: I'm a little bit surprised we're going after our allies

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Speaker 4: and ripping up North American supply chains by going after

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Speaker 4: Canada and Mexico. I mean, the big rival to the

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Speaker 4: US and big problem in terms of trade has been China,

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Speaker 4: and yet President Trump has deemphasized that. So I'm not

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Speaker 4: going to agree with Robert Leittheizer on many things, but

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Speaker 4: to the extent that he's focused mainly on China. I

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Speaker 4: think that's where the administration has to look too.

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Speaker 5: So, Professor, how do you think the governments of Canada

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Speaker 5: and Mexico should respond? Will respond? I mean, how deep

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Speaker 5: is this going to go? Do you think how long

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Speaker 5: will does go?

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Speaker 4: Do you think, well, it's very interesting. There's a report

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Speaker 4: that the Prime Minister of Canada, Justin Trudeau, will be

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Speaker 4: speaking with the President today, So I'd say there's a

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Speaker 4: small chance things could get averted, even though I wouldn't

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Speaker 4: be too autimistic about that. But I think they're responding

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Speaker 4: in the way that actually they did at least Canada

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Speaker 4: did with the smooth hawlight here for nineteen thirty. That

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Speaker 4: is not to take it sitting down to retaliate, And

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Speaker 4: they're very strategic in terms of the goods that they

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Speaker 4: put pressure points on that are important in the US

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Speaker 4: when in putting those tariffs on. So they try to

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Speaker 4: post tariffs on things maximize the political harm in the US,

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Speaker 4: but the least economic harm from Canada because they'll be

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Speaker 4: subs to products that they can import.

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Speaker 2: Doug the World stopped for against the Tide and intellectual

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Speaker 2: history of free trade thirty.

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Speaker 3: Some years ago.

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Speaker 2: The final chapter thirty some years ago, Page two seventeen,

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Speaker 2: The Past and Future of Free Trade?

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Speaker 3: Okay, WTO.

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Speaker 2: I was in Jimmy Chang's office in Hong Kong the

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Speaker 2: day WTO collapsed. Doug Irwin, what is the future of

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Speaker 2: free trade? After GAT, after Uruguay, after WTO, and now Trump?

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Speaker 3: What is the future?

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Speaker 4: Well, it's going to be a bit of a mess,

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Speaker 4: and it could be basically redrawn lines of trade based

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Speaker 4: on geopolitics. But you know, most countries, speaking outside of

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Speaker 4: the US now, most countries have a tremendous stake in

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Speaker 4: the trading system and open trade. They're much smaller economies.

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Speaker 4: They've opened up over the past thirty forty fifty years

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Speaker 4: or so. They received economic benefits buy and large from that,

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Speaker 4: and to undo that is harmful for them. So I

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Speaker 4: think even if the US, because of our politics for

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Speaker 4: what have you, move in a different direction, the rest

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Speaker 4: of the world will still be open for business to

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Speaker 4: the intent they can.

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Speaker 2: I mean, Doug, I know hitters like Jamie Diamond and listening,

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Speaker 2: Brian moynan and others in banking. Maybe Christine Lergard, Good morning,

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Speaker 2: Madame Lecguard and your team in Frankfort, Doug Irwin on

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Speaker 2: the X axis, forget about J curve dynamics.

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Speaker 3: I don't buy it.

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Speaker 2: On the X axis, Professor Irwin, we shift from an

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Speaker 2: inflationary dynamic of tariffs over to the growth or less

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Speaker 2: growth dynamic on your time continuum.

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Speaker 3: What's the when of that?

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Speaker 2: When do we shift from a study of inflation higher

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Speaker 2: to growth slower?

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Speaker 4: Well, there have been a lot of independent forecasts of

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Speaker 4: these Trump tariffs, from the Tax Foundation, from the INSU

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Speaker 4: for International Economics, and from other entities, and none of

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Speaker 4: them have any positive effects. It's always negative. And the

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Speaker 4: question is, given the scenario, what how negative you go?

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Speaker 4: You shave point two point three point four percent off

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Speaker 4: of GDP. Those are sort of where the numbers are

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Speaker 4: coming in, and those will come in fairly quickly. If

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Speaker 4: we actually see the tariffs go into effect on Tuesday,

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Speaker 4: we'll probably see, certainly by the second or third quarter,

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Speaker 4: somewhat slower growth. Now, once again, that doesn't mean it's

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Speaker 4: pushing us into recession, but it just means that after

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Speaker 4: a year or two, our real GDP will be lower

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Speaker 4: than it otherwise would have been.

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Speaker 2: I got one final question, Doug, you're sort of up

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Speaker 2: in you know, the edge of Canada.

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Speaker 3: Yeah, Hanover's really mine.

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Speaker 2: I mean it's not a Connecticut river and it's really

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Speaker 2: it's like it's sort of like New York North.

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Speaker 6: I don't know.

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Speaker 5: Those are hardy people up there.

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Speaker 3: They're hardy. Yeah, it's a strift bubble.

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Speaker 2: Yes. What are you telling somebody over a cup of

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Speaker 2: coffee this morning? Doug Irwin in Victoriaville, Quebec. You're at

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Speaker 2: a diner in Victoria. What are you telling them to do?

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Speaker 2: What should Canada do?

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Speaker 4: You know? Canada was very savvy during the first Trump term.

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Speaker 4: They made a lot of We talked about Congress. We

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Speaker 4: opened our discussion with Congress. They realized that maybe the

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Speaker 4: administration is not going to be very sympathetic, but in

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Speaker 4: members of Congress are because they are much closer to

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Speaker 4: how their constituents will be affected by this, and so

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Speaker 4: they worked state legislatures, They worked on Capitol Hill and

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Speaker 4: tried to create an environment where it constrains the administration

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Speaker 4: in terms of how much they can push things and

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Speaker 4: what they can do. So there may not be much

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Speaker 4: support for Canada in the White House, but there are

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Speaker 4: other pressure points in the business community and the state

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Speaker 4: and legislatures and elsewhere that they can try to contain

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Speaker 4: the damage that will be done to them from these tariffs.

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Speaker 3: Douglas Irwin honored. You go to tend, go back to class,

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Speaker 3: get the chalk in your hand and teach.

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Speaker 4: Okay, I won't tell Blancheflower what you said.

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Speaker 3: Okay, don't tell them.

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Speaker 2: We're going to probably done in Florida right now, distant

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Speaker 2: from the tariffs.

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Speaker 3: Dougarwin, thank you so much.

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Speaker 2: Into David Blanchefhard, thank you so much for his support

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Speaker 2: of all of Dartmouth economic.

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Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on

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Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or

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Speaker 1: watch us live on YouTube.

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Speaker 2: Joining us. How Lori Calvissini here with the small stocks

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Speaker 2: down two percent is as well? I mean, Laurie to

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Speaker 2: cut to the chase. Can strollers move the term the

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Speaker 2: needle on export import dynamics? Don't?

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Speaker 7: I don't know about strollers, Tom, I don't think I

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Speaker 7: ever paid one thousand dollars one of mine.

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Speaker 3: There's one here, I kid you not, folks. The Junama

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Speaker 3: Pilot collection.

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Speaker 2: Baby Pram is two thousand nice good dollars and there's

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Speaker 2: a small cab out they're making that puppy right now.

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Speaker 2: Is this an opportunity, Lori Kelvicina, I mean, you're with

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Speaker 2: the Royal Bank of Canada.

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Speaker 3: Is this an opportunity to acquire stocks?

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Speaker 4: Look?

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Speaker 7: Look, it's always the good day to buy stocks, right Look,

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Speaker 7: I think the reality is that we're seeing a little

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Speaker 7: bit of a sell off today. It could have been worse.

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Speaker 7: I do think that we've had some valuation problems in

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Speaker 7: the market. I do think we've had some froth in

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Speaker 7: the market. If you look at the CFTC data on

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Speaker 7: US equity future positioning. I do still think it's going

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Speaker 7: to be a good year in the equity market if

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Speaker 7: we kind of get through this issue. And I've told people,

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Speaker 7: you know, a common talking point today has been, Look,

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Speaker 7: if you think about my S and P five hundred

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Speaker 7: forecast sixty six hundred at the end of the year,

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Speaker 7: not because of tariff specifically, but I have baked into

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Speaker 7: that number the idea of a five to ten percent

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Speaker 7: draw down. We do have a bare case ready to

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Speaker 7: go a fifty seven seventy five should certain conditions be met.

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Speaker 7: Those conditions have not been met. But there are things

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Speaker 7: we have to keep an eye on. Ten year yields,

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Speaker 7: how they react to the environment we're in right now.

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Speaker 7: What about these vibes We've been hearing about these vibes

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Speaker 7: that we're supposed to be so fantastic and explode post election,

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Speaker 7: and yet we've had two disappointing prints on the consumer

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Speaker 7: sentiment and confidence surveys. And now we've got businesses talking

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Speaker 7: a lot about uncertainty from the tariffs, denting some of

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Speaker 7: the post election optimism. So there are things we've got

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Speaker 7: to watch. We've got to be vigilant. I think we're

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Speaker 7: still on a good path. Are the odds that we

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Speaker 7: could get knocked off that path up? Yeah, they're up

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Speaker 7: a little bit, Laurie.

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Speaker 5: How important are earnings to the twenty twenty five performance

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Speaker 5: in this market? Because it just doesn't feel like I'm

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Speaker 5: going to get that much from the Federal Reserve in

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Speaker 5: terms of rate cuts, So it feels like I need

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Speaker 5: to rely upon earnings maybe a little bit more.

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Speaker 7: I think that's fair, Paul, And you know, we sort

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Speaker 7: of have said this for two reasons. Number One, if

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Speaker 7: we do are modeling on the valuation side and plug

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Speaker 7: in current assumptions, whether it's my guys at RBC or

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Speaker 7: the consensus numbers on things like inflation, the Fed ten

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Speaker 7: year yields, I can't come up with that real you

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Speaker 7: have a number for the market at the end of

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Speaker 7: the year. Valuations have moved a lot, and they've done

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Speaker 7: it on the backs of inflation ramping down, and now

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Speaker 7: it looks like inflation, you know, there may be some

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Speaker 7: upside pressures there. So I think it's tough from that perspective.

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Speaker 7: And if you just take a more kind of simplistic

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Speaker 7: analysis and look at a forward pe on the S

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Speaker 7: and P five hundred and you can all these different versions.

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Speaker 7: All my charts are showing me that we've kind of

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Speaker 7: hit a ceiling and we're moving down a little bit.

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Speaker 7: So I think valuation expansion is tough to come by.

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Speaker 7: Earnings matter, margin expectations have been coming down. I do

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Speaker 7: think that there are potential negative impacts to earnings, both

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Speaker 7: from demand margins of right at the dollar is something

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Speaker 7: else to watch from this tariff situation, and things like

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Speaker 7: the dollar are already starting to pinch.

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Speaker 3: Is there a small cap meg seven?

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Speaker 2: Oh?

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Speaker 7: You know, I think there are names that small cap

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Speaker 7: investors end up crowding into. They don't like the fact

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Speaker 7: that they do it, which is one of the things

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Speaker 7: I love about the small cap investment community. But you know,

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Speaker 7: I do think we've had a little bit of a

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Speaker 7: squeeze on quality. And what I mean by that is

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Speaker 7: you've seen just the quality characteristics of the Russell two

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Speaker 7: thousand degrade nearly half of its negative earners, a lot

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Speaker 7: of things that are kind of low liquidity, tiny market

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Speaker 7: calf that frankly, active managers just can't buy, and so

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Speaker 7: they do tend to gravitate to kind of the bigger

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Speaker 7: small calfs, more liquidity, higher quality stats. But it's more

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Speaker 7: expansive than a mag seven.

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Speaker 3: It's been wonderful too.

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Speaker 2: Short of visit Lori Kelvicin to thank you so much

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Speaker 2: with OURBC Capital Markets. She'll be publishing in the coming lawers.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Apple Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business app. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station,

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Speaker 1: Just say Alexa, Play Bloomberg eleven thirty This is important.

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Speaker 2: As we talked to Douglas Herwin of Dartmouth College here

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Speaker 2: and he really mentioned, like, where's the legislative branch? We

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Speaker 2: continue with that on a gentleman from Harvard and now

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Speaker 2: at Yale got a Makunda joins us scary and I

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Speaker 2: want to go back to your book indispensable when leaders

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Speaker 2: really matter? Where is the indispensable leadership of Republicans and

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Speaker 2: Democrats in Congress in the Senate?

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Speaker 3: Given this upset we.

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Speaker 6: Have, Democrats have no idea what they should do, and

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Speaker 6: Republicans have been broken to Trump's will. At this point,

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Speaker 6: we've so you seen just about everybody coming.

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Speaker 2: Is there a historical president to the way quote Republicans

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Speaker 2: have been broken unquote.

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Speaker 6: In the United States? It's hard to think of one.

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Speaker 6: Even Franklin Roosevelt faced more domestic yeah from his own

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Speaker 6: party than Trump does. Right now, just to put this

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Speaker 6: in context, Donald Trump has higher approval ratings from Republicans,

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Speaker 6: just from Republicans. He's inessentially a nothing any from anyone

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Speaker 6: else than Ronald Reagan or George W.

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Speaker 4: Bush.

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Speaker 6: Ever, did I think he might actually have higher numbers

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Speaker 6: than EISENHOWERD did?

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Speaker 4: Right?

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Speaker 6: He is the most popular Republican president among Republicans in

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Speaker 6: the history of bowling.

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Speaker 5: So what do you think he does with that type

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Speaker 5: of popularity here? I mean, it feels like tariffs are

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Speaker 5: kind of I don't know, they don't seem like that

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Speaker 5: big a deal to me. I mean, one could argue

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Speaker 5: if you had that type of support, one could do

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Speaker 5: some really big things. How do you think that he

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Speaker 5: and his administration think about their popularity and support?

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Speaker 6: So the question here, right is do they how much

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Speaker 6: are they care? Right? So, Donald Trump is particularly sensitive

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Speaker 6: to popularity issues. He always has been. And this might

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Speaker 6: just be an exercise in getting people to bend the

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Speaker 6: knee and sort of defer to Donald Trump, and Okay,

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Speaker 6: then there'll be some damage from that, but not kindstrophic.

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Speaker 6: But the biggest moves that Trump has made are putting

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Speaker 6: personnel's policy, putting loyalists in charge of the major organs

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Speaker 6: of the major internal and external security organs of the government,

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Speaker 6: and that gives him the ability to put pressure on

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Speaker 6: the opposition in ways that we've never seen in the

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Speaker 6: United States before.

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Speaker 2: If you talked to the Secretary of Treasury who darkened

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Speaker 2: the door in New Haven years.

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Speaker 6: Ago, I have not talked to talking to Wait, yeah,

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Speaker 6: I'm talking about.

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Speaker 2: Okay, I mean I find it's absolutely fascinating and that

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Speaker 2: you're sitting in You're sitting in the pit there doing

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Speaker 2: the Yale management dance with a piece.

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Speaker 3: Of chalk in your hand.

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Speaker 2: What is your mandate to executives to communicate to their

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Speaker 2: comfortable Republican candidate what this will mean for Carlos Gudier's,

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Speaker 2: Kellogg's or Tyson Food, which Lisa just mentioned were their

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Speaker 2: huge dark meat to China's strategy.

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Speaker 3: What do executives say so?

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Speaker 6: I think the first one is that if they don't

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Speaker 6: realize it now, they will soon. The United States government

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Speaker 6: has been uniquely stable for a couple of centuries, just

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Speaker 6: basically longer than any the country in the world, and

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Speaker 6: American business has been the extraordinary beneficiary of that. If

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Speaker 6: that goes away, it will have consequences in ways that

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Speaker 6: we cannot predict, but that are gargantuan. I'll just say,

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Speaker 6: as a general rule, it's when the things that you

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Speaker 6: so deeply believe about the world that you don't even

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Speaker 6: think about them turn out not to be true that

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Speaker 6: you have the biggest impact. And here is one where

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Speaker 6: the basic underlying principle of everything in global economics and

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Speaker 6: everything in global foreign policy has been the US government

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Speaker 6: kind of knows what it's doing. That assumption is breaking

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Speaker 6: while we speak, and that will change things for it.

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Speaker 6: I'll just give you a couple of quick examples. Pepfar

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Speaker 6: so PEPFAR is the program is created by George W.

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Speaker 6: Bush distribute anti retrovirals in Africa. There are statues to

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Speaker 6: George W. Bush in Africa. There are children named after him.

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00:22:49,240 --> 00:22:52,280
Speaker 6: Because of the scale of this achievement, when they put

442
00:22:52,280 --> 00:22:55,840
Speaker 6: out the spending freeze, people just stopped getting their drugs

443
00:22:55,880 --> 00:22:58,960
Speaker 6: in Africa the next day. If pep far goes away,

444
00:22:59,080 --> 00:23:03,040
Speaker 6: the estimate for it south Africa alone, just South Africa,

445
00:23:03,840 --> 00:23:05,800
Speaker 6: is that in the next ten years, six hundred thousand

446
00:23:05,800 --> 00:23:08,919
Speaker 6: people will die. That is the sort of achievement, right.

447
00:23:08,920 --> 00:23:10,439
Speaker 6: Only the United States can do things like that. It

448
00:23:10,520 --> 00:23:13,439
Speaker 6: is a gargantuan achievement. It costs the average American like

449
00:23:13,440 --> 00:23:15,040
Speaker 6: a dollar a year or something like that. It's just

450
00:23:15,320 --> 00:23:19,760
Speaker 6: any insignificant expense, and it buys us not just helping

451
00:23:19,800 --> 00:23:23,040
Speaker 6: to keep people alive, it buys us sort of acceptance

452
00:23:23,200 --> 00:23:25,520
Speaker 6: allies from you know, China.

453
00:23:25,600 --> 00:23:29,000
Speaker 2: President Trump has huge popularity numbers. I think there's going

454
00:23:29,080 --> 00:23:31,520
Speaker 2: to be a lot of polls that agree with his speed,

455
00:23:32,040 --> 00:23:34,520
Speaker 2: his thrust. But part of that is to say to

456
00:23:34,600 --> 00:23:37,919
Speaker 2: CDC in Atlanta, they can't talk to the World Health Organization.

457
00:23:38,720 --> 00:23:42,359
Speaker 2: Basically the global medical system shuts down. What do you

458
00:23:42,440 --> 00:23:46,240
Speaker 2: suggest the legislature, our Congress could do about it? If anything?

459
00:23:47,320 --> 00:23:50,440
Speaker 6: So Democrats have the ability to essentially bring the Senate

460
00:23:50,440 --> 00:23:54,000
Speaker 6: to a halt by manipulating rules, so deny unanimous consent

461
00:23:54,080 --> 00:23:57,440
Speaker 6: on everything, force everybody to be in there. They can

462
00:23:57,480 --> 00:23:59,840
Speaker 6: do a lot to be obstacle.

463
00:24:00,119 --> 00:24:00,960
Speaker 3: Do you see that yet?

464
00:24:01,160 --> 00:24:02,000
Speaker 6: No, not at all.

465
00:24:02,160 --> 00:24:04,240
Speaker 2: Did you see rarema Manuel? He was up morning Joe

466
00:24:04,280 --> 00:24:07,639
Speaker 2: this morning. We're efforting mister Emmanuel here on a blistering

467
00:24:07,800 --> 00:24:11,760
Speaker 2: essay in the Post this weekend on kids Democratic Party.

468
00:24:11,960 --> 00:24:14,639
Speaker 6: It's quite astonishing. So not just in the legislature. Greshen

469
00:24:14,680 --> 00:24:17,359
Speaker 6: Whitmer has said she wants to cooperate and is out

470
00:24:17,400 --> 00:24:21,040
Speaker 6: sort of selling her selling her the kids version of autobiography.

471
00:24:21,920 --> 00:24:24,159
Speaker 6: Gresham Whitmer has phenomenal political instincts, so I'm not going

472
00:24:24,240 --> 00:24:26,480
Speaker 6: to say, well, that's crazy, but it's a surprising tack

473
00:24:26,520 --> 00:24:30,040
Speaker 6: for her to take. I also wonder if to some extent,

474
00:24:30,080 --> 00:24:32,800
Speaker 6: Democrats are not just looking at the fire hose of

475
00:24:32,800 --> 00:24:35,719
Speaker 6: things coming out of the Trump administration and saying, you know,

476
00:24:36,359 --> 00:24:38,440
Speaker 6: any one of these individually is likely to be pretty

477
00:24:38,520 --> 00:24:41,720
Speaker 6: unpopular in the combination, not with Republicans, but with most Americans,

478
00:24:41,760 --> 00:24:44,879
Speaker 6: and the combination of them is likely to be extraordinarily unpopular. So,

479
00:24:45,440 --> 00:24:48,480
Speaker 6: as we've talked about before, American public opinion is thermostatic.

480
00:24:48,520 --> 00:24:51,000
Speaker 6: Whatever the president does, people move against it. If you

481
00:24:51,040 --> 00:24:53,160
Speaker 6: do things that are unpopular, they move against it even

482
00:24:53,160 --> 00:24:55,880
Speaker 6: more strongly if you interfere. This is the really striking

483
00:24:55,880 --> 00:24:59,600
Speaker 6: one with the Treasury's payment system, which literally touches the

484
00:24:59,600 --> 00:25:04,320
Speaker 6: life of every single American every day, every moment. People

485
00:25:04,400 --> 00:25:06,000
Speaker 6: are going to feel that right away, and he is

486
00:25:06,080 --> 00:25:10,439
Speaker 6: going to have pretty significant consequences the trade stuff. I

487
00:25:10,480 --> 00:25:13,359
Speaker 6: agree with you, Paul that I think at a macro level,

488
00:25:13,400 --> 00:25:16,280
Speaker 6: the economics on that are they're not going to be huge.

489
00:25:16,720 --> 00:25:19,399
Speaker 6: But the individual people who are hurt by this are

490
00:25:19,400 --> 00:25:20,920
Speaker 6: going to be hurt a lot, and they are going

491
00:25:20,960 --> 00:25:24,399
Speaker 6: to scream really, really loudly, and that has political consequences

492
00:25:24,480 --> 00:25:26,160
Speaker 6: that may be larger than the economic ones.

493
00:25:26,920 --> 00:25:30,160
Speaker 5: Are you surprised that maybe we haven't Thank you, Ken.

494
00:25:30,240 --> 00:25:34,000
Speaker 5: Are you surprised that maybe we haven't had a a

495
00:25:34,080 --> 00:25:37,400
Speaker 5: someone from the Democratic Party really established himself or herself

496
00:25:37,480 --> 00:25:42,200
Speaker 5: as a contravoice to President Trump and his policies. I mean,

497
00:25:42,720 --> 00:25:44,840
Speaker 5: the only person I kind of hear from Schumer. But

498
00:25:44,920 --> 00:25:47,480
Speaker 5: I mean, does the Democratic Party need a new voice,

499
00:25:47,680 --> 00:25:48,359
Speaker 5: a new vision?

500
00:25:48,520 --> 00:25:52,080
Speaker 6: It definitely does. The basic problem for the Democrats is

501
00:25:52,119 --> 00:25:54,119
Speaker 6: not that they lost the twenty twenty four election that

502
00:25:54,240 --> 00:25:56,480
Speaker 6: was baked into the inflation numbers. I don't see a

503
00:25:56,480 --> 00:25:58,960
Speaker 6: scenario where they win that election. The basic problem for

504
00:25:59,000 --> 00:26:01,640
Speaker 6: Democrats is they are not had it been twenty five states, right,

505
00:26:01,680 --> 00:26:03,920
Speaker 6: so it's almost impossible for them to take the Senate.

506
00:26:04,040 --> 00:26:06,840
Speaker 6: They started a huge handicap, and that is about larger

507
00:26:06,880 --> 00:26:10,119
Speaker 6: institutional structural shifts in the party that are pretty severe.

508
00:26:10,440 --> 00:26:12,119
Speaker 6: You can talk about any you know, like there are

509
00:26:12,160 --> 00:26:14,760
Speaker 6: a million different explanations. My favorite one would be and

510
00:26:15,240 --> 00:26:18,480
Speaker 6: an activist class that essentially is educated at Ivy League

511
00:26:18,480 --> 00:26:20,560
Speaker 6: schools like mine and talks only to themselves and does

512
00:26:20,560 --> 00:26:22,760
Speaker 6: not have a sense of that you can see Democrats

513
00:26:22,800 --> 00:26:25,720
Speaker 6: who are likely to break out of that mold. You know,

514
00:26:25,760 --> 00:26:28,400
Speaker 6: I mentioned Gresham Whitmer' is a popular one. I mean

515
00:26:28,440 --> 00:26:31,080
Speaker 6: two names that people don't talk enough about, Reuben Gallego

516
00:26:31,119 --> 00:26:34,280
Speaker 6: and Seth Moulton. And I mentioned both of them because yeah,

517
00:26:34,280 --> 00:26:36,840
Speaker 6: they're both you know, they both went to Harvard, but

518
00:26:36,880 --> 00:26:41,480
Speaker 6: they're both Marines. They are not part of the activist

519
00:26:41,680 --> 00:26:43,840
Speaker 6: community where we only talk to you, right. They know

520
00:26:43,880 --> 00:26:45,480
Speaker 6: how to talk to people who are out out of

521
00:26:45,480 --> 00:26:47,520
Speaker 6: that mold, and they're very good at we're out of time.

522
00:26:47,680 --> 00:26:50,520
Speaker 2: This has been really informative on an emotional day. The

523
00:26:50,560 --> 00:26:54,720
Speaker 2: Tariff's clicking in here at midnight tonight. Mister Ford of

524
00:26:54,800 --> 00:26:59,439
Speaker 2: Toronto and Ontario out with blistering statements today, including walking

525
00:26:59,480 --> 00:27:03,200
Speaker 2: away from Starlink, and mister Musk as well got to

526
00:27:03,280 --> 00:27:05,800
Speaker 2: Macondis with Yale University, and I'm sure we'll hear more

527
00:27:06,520 --> 00:27:12,119
Speaker 2: from them.

528
00:27:12,320 --> 00:27:16,240
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

529
00:27:16,280 --> 00:27:19,280
Speaker 1: starting at seven am Eastern on Apple Corplay and Android

530
00:27:19,320 --> 00:27:22,280
Speaker 1: Auto with the Bloomberg Business app. You can also watch

531
00:27:22,359 --> 00:27:25,320
Speaker 1: us live every weekday on YouTube and always on the

532
00:27:25,359 --> 00:27:26,440
Speaker 1: Bloomberg terminal.

533
00:27:26,520 --> 00:27:29,600
Speaker 3: On the front page is a Lisa Matteo. Our Lisa,

534
00:27:29,800 --> 00:27:30,440
Speaker 3: what do you got?

535
00:27:30,680 --> 00:27:32,560
Speaker 8: Okay, we've been talking about tariff, so I have to

536
00:27:32,600 --> 00:27:35,919
Speaker 8: start there. Canadian sports fans are actually letting the US

537
00:27:35,960 --> 00:27:39,320
Speaker 8: know how they feel about it. They're booing the national

538
00:27:39,320 --> 00:27:42,200
Speaker 8: anthem sporting events. We're talking from the NBA to the NHL.

539
00:27:42,520 --> 00:27:45,320
Speaker 8: So this happened yesterday. The Rafters were facing the Clippers

540
00:27:45,320 --> 00:27:47,680
Speaker 8: in Toronto and a fifteen year old performer, she got

541
00:27:47,680 --> 00:27:51,040
Speaker 8: out there and she was greeted with applause until she

542
00:27:51,119 --> 00:27:52,000
Speaker 8: began singing the.

543
00:27:51,960 --> 00:27:52,960
Speaker 6: Star Spangled banner.

544
00:27:59,359 --> 00:28:00,600
Speaker 3: Yeah, they weren't too.

545
00:28:00,560 --> 00:28:03,359
Speaker 8: Happy about it, started booing. This is from actually an

546
00:28:03,400 --> 00:28:06,080
Speaker 8: ABC affiliate. They pulled this down from a social media post.

547
00:28:06,119 --> 00:28:08,720
Speaker 8: But it's just this growing trend, Like it wasn't just

548
00:28:08,840 --> 00:28:11,600
Speaker 8: that game. It was Saturday during the anthem before NHL.

549
00:28:11,800 --> 00:28:14,919
Speaker 8: You had the games in Calgary, ottawatch you last night

550
00:28:14,960 --> 00:28:17,720
Speaker 8: Canucks fans in Vancouver they boo the anthem before their

551
00:28:17,720 --> 00:28:21,239
Speaker 8: team took on Detroit. So it's this ongoing battle kind

552
00:28:21,280 --> 00:28:25,119
Speaker 8: of showing the frustration. Some FANSO did say they felt bad,

553
00:28:25,480 --> 00:28:27,520
Speaker 8: but the majority of them are.

554
00:28:27,520 --> 00:28:30,040
Speaker 2: Really I defer to you too, because I grew up

555
00:28:30,080 --> 00:28:32,919
Speaker 2: in Toronto South a place called Rochester where you know,

556
00:28:33,359 --> 00:28:34,720
Speaker 2: I mean, I think I was the first one in

557
00:28:34,760 --> 00:28:39,160
Speaker 2: America to drink Mulston and Gold, sure, but often, but

558
00:28:39,640 --> 00:28:41,600
Speaker 2: I don't have a clear thinking on this. I'm just

559
00:28:41,600 --> 00:28:43,440
Speaker 2: too close to O Canada and all.

560
00:28:43,320 --> 00:28:49,240
Speaker 8: That I do. But so next, moving on, So Michael Barr,

561
00:28:49,240 --> 00:28:50,840
Speaker 8: you heard him give them the Grammy wrap ups, right, So

562
00:28:50,880 --> 00:28:52,240
Speaker 8: I just wanted to do a little bit more in

563
00:28:52,280 --> 00:28:55,040
Speaker 8: the two voices that were kind of unrecognized, you know.

564
00:28:55,040 --> 00:28:57,000
Speaker 8: I had a couple of snubs along the way. So yes,

565
00:28:57,120 --> 00:29:00,719
Speaker 8: Beyonce did win Alma the Year Cowboy Carter, right fifth

566
00:29:00,760 --> 00:29:03,280
Speaker 8: time she was nominated for it. She also won Best

567
00:29:03,280 --> 00:29:07,440
Speaker 8: Country Album. Her total trophy count now stands at thirty five.

568
00:29:07,480 --> 00:29:09,160
Speaker 8: But it was this whole thing like she kept getting

569
00:29:09,200 --> 00:29:11,840
Speaker 8: snubbed and kept getting snubbed, and finally she wins it

570
00:29:11,920 --> 00:29:13,960
Speaker 8: for her country album. And then on the flip you

571
00:29:14,040 --> 00:29:18,240
Speaker 8: also have Kendrick Lamar. He got Song Record of the

572
00:29:18,320 --> 00:29:20,720
Speaker 8: Year for Not Like Us, which actually regenated as a

573
00:29:20,800 --> 00:29:24,360
Speaker 8: Drake Disc song, but he was snubbed from that prize

574
00:29:24,480 --> 00:29:27,240
Speaker 8: four times. To all these people who are getting snubbed,

575
00:29:27,800 --> 00:29:29,760
Speaker 8: he actually what was interesting is that he beat out

576
00:29:29,760 --> 00:29:31,880
Speaker 8: Record of the Year over Now and Then, which was

577
00:29:31,920 --> 00:29:36,640
Speaker 8: this kind of resuscitated Beatles demo supported and supposedly made

578
00:29:36,640 --> 00:29:40,000
Speaker 8: with Ai but they're just saying it's a victory for

579
00:29:40,320 --> 00:29:43,360
Speaker 8: rap music because it's only one album of the year twice.

580
00:29:43,560 --> 00:29:45,480
Speaker 8: I mean I think it was Lauren Hill and then Outcast.

581
00:29:46,400 --> 00:29:47,960
Speaker 7: So that was a lot of the talk here.

582
00:29:48,480 --> 00:29:49,840
Speaker 3: You know what the buzzes this Weekend.

583
00:29:50,320 --> 00:29:56,840
Speaker 2: The Weekend has a new album now of Awesome, Awesome, Awesome,

584
00:29:57,480 --> 00:30:00,000
Speaker 2: you know awesome. Mike Dean is the one putting it together.

585
00:30:00,240 --> 00:30:02,360
Speaker 2: It's just hugely anticipated.

586
00:30:02,440 --> 00:30:03,600
Speaker 3: There you go next.

587
00:30:03,640 --> 00:30:06,480
Speaker 8: Oh and he's also at the Super Bowl to performing. Okay,

588
00:30:06,480 --> 00:30:08,200
Speaker 8: so Chick fil A they want to make their drives

589
00:30:08,240 --> 00:30:10,520
Speaker 8: through is faster. So this was an interesting look from

590
00:30:10,520 --> 00:30:13,640
Speaker 8: the journal into how they're using high tech. Like this

591
00:30:13,760 --> 00:30:16,520
Speaker 8: was a restaurant operator Rockford, Illinois. They had this new

592
00:30:16,680 --> 00:30:20,480
Speaker 8: drive through record. It served one car every thirteen seconds.

593
00:30:20,920 --> 00:30:23,280
Speaker 8: But they still want to improve it. So they're looking

594
00:30:23,280 --> 00:30:26,720
Speaker 8: at different things security footage right in the kitchen, but

595
00:30:26,800 --> 00:30:29,440
Speaker 8: also drones. They're using drones to kind of hover over

596
00:30:29,480 --> 00:30:32,000
Speaker 8: the parking lot and take footage so they can look

597
00:30:32,040 --> 00:30:34,440
Speaker 8: at it. And they actually found a few things where

598
00:30:34,480 --> 00:30:36,600
Speaker 8: they can work on, like veteran workers taking on too

599
00:30:36,640 --> 00:30:39,680
Speaker 8: many duties, the Wi Fi used by the parking lot

600
00:30:39,760 --> 00:30:41,320
Speaker 8: order takers, because you know, they have them mountain in

601
00:30:41,680 --> 00:30:44,800
Speaker 8: the parking lot. They didn't extend far enough, so they

602
00:30:44,840 --> 00:30:46,400
Speaker 8: were kind of getting kicked off the Wi Fi as

603
00:30:46,400 --> 00:30:48,920
Speaker 8: they were trying to take in all these orders. And

604
00:30:49,000 --> 00:30:52,320
Speaker 8: so the company's just using like a lot of these experts.

605
00:30:52,320 --> 00:30:55,560
Speaker 8: They're dispatching them to like three thousand of their different restaurants.

606
00:30:55,720 --> 00:30:59,120
Speaker 8: But the interesting thing is how it's forcing a lot

607
00:30:59,160 --> 00:31:01,920
Speaker 8: of other food chain who don't normally use drive throughs

608
00:31:01,960 --> 00:31:04,360
Speaker 8: to use them, like Chipotle is starting to use drive

609
00:31:04,400 --> 00:31:07,440
Speaker 8: through really yeah, because of the online orders are so huge,

610
00:31:07,440 --> 00:31:09,600
Speaker 8: and shake Shack is starting to use drive throughs.

611
00:31:09,600 --> 00:31:12,840
Speaker 2: Now, Isn't it just complexity of the menu, Like one

612
00:31:12,880 --> 00:31:15,920
Speaker 2: it all goes in and gets his triple four bulte.

613
00:31:15,520 --> 00:31:17,120
Speaker 3: Starbucks, they're reducing the complex.

614
00:31:17,120 --> 00:31:22,240
Speaker 5: They're reducing complex because apparently the amount of combinations you

615
00:31:22,240 --> 00:31:25,000
Speaker 5: can use on it Starbucks menu is mind boggling.

616
00:31:25,080 --> 00:31:27,200
Speaker 2: So you gonna try to listen to tell you thank

617
00:31:27,240 --> 00:31:29,600
Speaker 2: you so much for the news this morning.

618
00:31:29,320 --> 00:31:30,240
Speaker 3: The newspapers.

619
00:31:30,800 --> 00:31:35,640
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify

620
00:31:35,760 --> 00:31:39,560
Speaker 1: and anywhere else you get your podcasts. Listen live each

621
00:31:39,600 --> 00:31:43,400
Speaker 1: weekday seven to ten am. Easter and on bloomberg dot com,

622
00:31:43,560 --> 00:31:47,360
Speaker 1: the iHeartRadio app tune In, and the Bloomberg Business app.

623
00:31:47,680 --> 00:31:50,760
Speaker 1: You can also watch us live every weekday on YouTube

624
00:31:51,080 --> 00:31:53,080
Speaker 1: and always on the Bloomberg terminal