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Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast.
Speaker 1: I'm Tom Keene with David Gura. Daily we bring you
Speaker 1: insight from the best of economics, finance, investment, and international relations.
Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com,
Speaker 1: and of course, on the Bloomberg. Carl Weinberg is the
Speaker 1: founder of in the chief economist at High Frequency Economics.
Speaker 1: He's here in our bloombergod leveming three studios. It's great
Speaker 1: to see you as always. Let's start with the data
Speaker 1: this week. What you're looking for especially, I mean industrial
Speaker 1: production tomorrow, Matt. And that's a big one you'll be
Speaker 1: paying attention to this week. Yeah, I mean, we think
Speaker 1: the industrial production number is probably going to turn out
Speaker 1: okay based on the surveys that we're seeing. You know,
Speaker 1: the economy is chugging along. You know, we're not going
Speaker 1: to see any great numbers out of industrial production though. Um.
Speaker 1: You know we're looking about maybe seven tenths of a
Speaker 1: percent for the month. At high frequency, that's a little
Speaker 1: bit more than the consensus. Uh. But overall, you know,
Speaker 1: the economic growth numbers are not going to knock anybody's
Speaker 1: socks off anytime soon, as we're only looking for about
Speaker 1: you know, two plus percent growth for the year, and
Speaker 1: that's not going to be a scary number for most people.
Speaker 1: We have the House of Representatives back in session in
Speaker 1: Washington at d C this week. They were off last week,
Speaker 1: the Senate was there. They were not what's your sense
Speaker 1: of what's happening in Washington right now? The degree which
Speaker 1: that's that's influencing the direction of this economy in the US. Wow, Well,
Speaker 1: you know, I don't really know exactly how to go
Speaker 1: at that answer, you know, without going getting into the
Speaker 1: politics of it. You know, the Commey affair has turned
Speaker 1: into a big distraction. And we had been skeptical at
Speaker 1: High Frequency Economics about the prospects for a lot of
Speaker 1: fiscal stimulus to begin with, for a really strong tax
Speaker 1: reform package to begin with, and now with all of
Speaker 1: these distractions, were even more skeptical. So work in the
Speaker 1: process of marking down you know, it only takes a
Speaker 1: tenth of a percent or two tenths off of GDP growth.
Speaker 1: But when you're only growing on two and a half percent,
Speaker 1: you can't really afford to lose a lot of it.
Speaker 1: And we think we might see a little bit of
Speaker 1: tax cuts coming up, but no major tax reform as
Speaker 1: anybody had hoped for, and not the big, not very
Speaker 1: little of the big infrastructure spending that people have been
Speaker 1: looking for just a few months ago. What's distracting the
Speaker 1: Fed Reserve right now is they push your head to
Speaker 1: their next meeting and they're looking at all of the
Speaker 1: data that we've gotten recently in the data will get
Speaker 1: here before they gather again in the equals building. What's
Speaker 1: what's preoccupying them, Well, their eyes are crossed right now.
Speaker 1: You know, they're looking at, you know, a lot of inconsistencies.
Speaker 1: They're looking at, you know, an unemployment rate that's at
Speaker 1: their level of nairo They're looking at inflation numbers that
Speaker 1: aren't delivering the inflation that you would expect to see.
Speaker 1: And they're looking at an economy that should be growing
Speaker 1: even though you know, interest rates are down at zero
Speaker 1: right now. So they are walking a lot of different things.
Speaker 1: I think that core belief is that at the end
Speaker 1: of the day, the laws of supply and demand haven't
Speaker 1: been repealed, that their job is to protect the country
Speaker 1: from the worst possible outcome, which, given their mandate, is
Speaker 1: not a recession as much as it is an overshoot
Speaker 1: of inflation. So with rising risks of inflation on the horizon,
Speaker 1: we think they're going to be responding to reducing this
Speaker 1: chance of the worst possible outcome given their mandate. Oh yeah,
Speaker 1: back in the nearest students, I remember where the red buttons.
Speaker 1: There's a guy to my right, Good morning, sir. Yeah.
Speaker 1: It is one of the great early successes of Boston Biotechnology,
Speaker 1: Thermo Fishers Scientific Certific. It's fifty five thou employees out
Speaker 1: of Scenic Waltham, Massachusetts, and they've got themselves a new transaction.
Speaker 1: It's a seven billion dollar deal to billion Dad. It's
Speaker 1: not that big, but it's just what Thermo Fisher has done,
Speaker 1: Thermo Scientific has done. David Gura for years. I remember that.
Speaker 1: I was like, who are these guys? Who are these guys?
Speaker 1: And they have just built and built and built this
Speaker 1: thing forever. Thermo Fisher takes up Pathion as well. Seven
Speaker 1: billion dollars um David, you know, it's good to be here.
Speaker 1: It's nice to have a global cyber attack. So we
Speaker 1: got something to talk about besides the administration. What did
Speaker 1: you come back? You came back Friday right after the show.
Speaker 1: British Airways did it right actually, and what what was
Speaker 1: sad was the pilots actually listened to us. I met
Speaker 1: the pilots and they did the one of those YouTube
Speaker 1: landings JFK. They came in a little bit sideways in
Speaker 1: the pouring rain, and then we thank them for landing
Speaker 1: the beast on the ground. Carl Weinberg knows about sheer.
Speaker 1: There's wind shear within the economy. Where's the risk now
Speaker 1: for the U. S. Economy? Is it a lack of investment?
Speaker 1: Is it this this colossal reality we may not get
Speaker 1: wage growth? What's the wind shear out there for this economy?
Speaker 1: You know, I am a pilot and I can explain
Speaker 1: that that crooked landing to you. We were doing it.
Speaker 1: We're we're looking at Connecticut when we landed in great detail.
Speaker 1: You know the risk of the U. S. Economy? I think,
Speaker 1: first of all, from I'm the international guidet high frequency economics,
Speaker 1: so I look overseas, you know, and we're looking at
Speaker 1: a world where the I m S forecast of accelerating
Speaker 1: growth just isn't happening. And most of their hopes at
Speaker 1: the i m F annual meetings for an acceleration of
Speaker 1: world growth over the next two years was that the
Speaker 1: emerging world was going to pick up the pace. And
Speaker 1: they're growing their bigger share of world GDP now, so
Speaker 1: they matter and they do. But now with commodity prices
Speaker 1: on the down swing, and I don't consider fifty fifty
Speaker 1: two dollars in oil barrels being an upswing, I considered
Speaker 1: to be a down swing, we're seeing their incomes being
Speaker 1: trimmed again. That's a hit to world trade, that's a
Speaker 1: hit to their ability to import, and that's a hit
Speaker 1: to our ability to x sport. So to me, the
Speaker 1: from the international guy at High Frequency Economics, to me,
Speaker 1: that's where the biggest threats are right now. Help us
Speaker 1: understand what's going on with with OLPEC. We saw I
Speaker 1: take up a little bit, could be the broader downturn
Speaker 1: you're talking about gently, but did see oil prices move
Speaker 1: on on reports that there was going to be an agreement,
Speaker 1: perhaps a longer agreement than was expected to extend the
Speaker 1: production cuts. What what's the influence that that OPEC plays
Speaker 1: right now in oil oil prices? Well, the influence that
Speaker 1: OLPEX plays right now is that they have don't have
Speaker 1: an influence, and that their ability to influence prices is
Speaker 1: increasingly decreasing with the rise of not just shell oil
Speaker 1: producers in the United States, but emerging market oil everywhere.
Speaker 1: You know, there are now a much smaller part of
Speaker 1: the world or oil market than they were in the
Speaker 1: nineteen seventies. And the adaptation or the consequence of that
Speaker 1: is that with everybody pumping the stuff up, there's more
Speaker 1: supply than demand. Uh. The OLPEC ministers talk about getting
Speaker 1: inventories back down to the levels of the last five years,
Speaker 1: but that's the wrong bar. Oil prices have tumbled over
Speaker 1: the last five years, hitting that bar. The real metric
Speaker 1: is that pair to the last twenty years average. Always
Speaker 1: see the inventories are over their normal range for twenty
Speaker 1: years by ten days of supply, that's half a billion
Speaker 1: barrels of oil for to come to market. And if
Speaker 1: they're a deal between Russia and Saudi Arabia manages to
Speaker 1: keep you know, a million barrels a day off of
Speaker 1: the market was still more than a year away from
Speaker 1: just getting inventories back down to normal, and their deal
Speaker 1: probably doesn't make even that much of a difference because
Speaker 1: everybody ramped the production beforehand to come back with Carl
Speaker 1: Weinberger US. Right now, we speak with Commander Weinberg on
Speaker 1: runway component thrust vector. Captain Weinberg, excuse me, Captain Weinberg,
Speaker 1: and they and they crab the crab the airplane. That's right.
Speaker 1: What does that mean? It means that they turn the
Speaker 1: airplane into the wind so that it tracts along the
Speaker 1: runway and then at the last minute they straighten it
Speaker 1: out so that it hits with the wheels pointing down
Speaker 1: the runway instead of towards the terminal too soon, so
Speaker 1: you go off the runway. Do they do They do
Speaker 1: it manually like a big plane, like a seven. I
Speaker 1: would say the odds of them flying it manually would
Speaker 1: be very low. It would depend on the currency of
Speaker 1: the captain who has to do certain number of medical landings.
Speaker 1: But for the most part they depend on the machines.
Speaker 1: The machines are so much better, and the machines do
Speaker 1: that tilting into the wind. The technology on these aircraft,
Speaker 1: these air busses and these bowing airplanes are just absolutely incredible.
Speaker 1: Auto land is what it's called. How many how many
Speaker 1: degrees do they go when they crab? It depends on
Speaker 1: it's well, if you were landing in a forty knot wind,
Speaker 1: it wouldn't be quite as much as that, but it
Speaker 1: might be substantial. But the planes coming in at a
Speaker 1: hundred and forty knots and if they have a ten
Speaker 1: or fifteen not cross wind component, they're probably not going
Speaker 1: to have to crab all that much. Why I mean,
Speaker 1: this is why we love to have these guests on
Speaker 1: driving planes. Driving planes. Yeah, that's the future. Now, I
Speaker 1: don't think so Tom could land one of these planes,
Speaker 1: that's what you're saying. No, my wife says that in
Speaker 1: our plane, that the way that I fly as I
Speaker 1: push buttons until it does what I wanted to do.
Speaker 1: And that's more or less what these guys on the
Speaker 1: big planes they do. I feel like I'm with hap
Speaker 1: Arnold or something. This is the founder of American aviation.
Speaker 1: Do you know David girl hap Arnold His first flight
Speaker 1: was with the Wright brothers. That is so cool. This
Speaker 1: is your surveillance aviation moment, Carl Heinberg. That was fabulous
Speaker 1: because all of us have confronted this bad weather and
Speaker 1: one of these big airplanes. We'll come back with Dr
Speaker 1: Weinberg and talk about international economics in the state of America. Carl.
Speaker 1: There was a jewel at the FED twenty years ago
Speaker 1: out of m my team named one Carl Whalen. Carl
Speaker 1: Whalen was fabulous. He's now at the Irish Central Bank
Speaker 1: and he wrote a paper which I remember called real
Speaker 1: Wage Dynamics in the Phillips Curve. That's where we are
Speaker 1: right now. If we get a better economy, does inflation
Speaker 1: go up faster than real wages go up? Where all
Speaker 1: of our listeners are gonna feel miserable because they inflation
Speaker 1: adjusted wages go flat or down. You know, someone else
Speaker 1: was talking about that on Bloomberg this morning and I
Speaker 1: nearly drove off the road I heard it, you know, John,
Speaker 1: it wasn't it was super early. I think it was
Speaker 1: one of those guys on the other side of the pond.
Speaker 1: You know, when you have inflation, inflation is a parallel
Speaker 1: increase in both prices, all prices and wages at the
Speaker 1: same time. So real incomes stay the same, Savers are poorer,
Speaker 1: spenders are richer, and there's an incentive to spend more
Speaker 1: when there's inflation, because you want to buy that refrigerator
Speaker 1: or that host today before the price goes up. And
Speaker 1: that's the traditional analysis of inflation. It's a windfall for some,
Speaker 1: but at the expense of savers? Is it a windfall
Speaker 1: for our listeners who are out there working in the
Speaker 1: real world. They're going to get a three percent pay raise.
Speaker 1: Is an inflation going to make that evaporate? It's going
Speaker 1: and if it's a true inflation, we're going to make
Speaker 1: it evaporate. But Tom, I'm just going to be critical here.
Speaker 1: You know, the world has gotten into this notion that
Speaker 1: CPI increases our inflation, and they're not all right, c
Speaker 1: p I. I'm not putting on my pointing headed economiside here.
Speaker 1: But every time every time the CPI goes up, all right,
Speaker 1: doesn't mean there's inflation. Every time there's inflation, the CPI
Speaker 1: goes up. But say the price of gasoline goes up,
Speaker 1: all right, that's a price change relative to everything else
Speaker 1: that makes people poor actually because their wages don't go up.
Speaker 1: David Blanche Flower would know about money illusion. Blanche Flower
Speaker 1: Oswald wage curve, which was done at the time of
Speaker 1: the Whaland paper, really suggests some pain within society. Are
Speaker 1: we going to see that? Well? If we if we
Speaker 1: get a true inflation, we will see that right right now.
Speaker 1: What we're all dissecting is an acceleration of the c
Speaker 1: p I and if we don't see a parallel and
Speaker 1: proportionate acceleration of wages to match it, then we'll either
Speaker 1: workers will either be better off or worse off, but
Speaker 1: always at the expense of someone else, like either capitalists,
Speaker 1: God forbid, or savers, which is more areous. With such
Speaker 1: a big baby boomer generation now approaching retirement, you start
Speaker 1: reducing the present purchasing value of their savings. Then you
Speaker 1: get into a situation where a big segment of society
Speaker 1: is worse off. Yesterday, the new president of France put
Speaker 1: on a snappy new suit and road around Paris in
Speaker 1: an open air jeep. Today I think he meets with
Speaker 1: his German counterpart. How much does the European economy change
Speaker 1: now with his election? We had a more state elections
Speaker 1: in Germany over the weekend. Does your outlook for the
Speaker 1: European economy change is a result of what we've seen
Speaker 1: in France and Germany over these last two weekends. Well,
Speaker 1: I think the betting has been on macall for some
Speaker 1: time now, so I think that there's no surprise to
Speaker 1: the markets this morning, right out of the box. So
Speaker 1: thinking longer term, one of the issues that Tom and
Speaker 1: I were discussing earlier today is this question of Ken
Speaker 1: Macon and Angela Merkel agree on what to do about England,
Speaker 1: and this I think is the most immediate question in
Speaker 1: front of everybody alright at stake. The biggest jewel out
Speaker 1: there is the city. Will they allow the city to
Speaker 1: continue to exist? Well, they want that business for Paris
Speaker 1: very high taxes of course, or Frankfurt much more of
Speaker 1: a friendly environment for these kinds of businesses. And the British,
Speaker 1: of course are concerned because uh percent of the UK
Speaker 1: economy comes from the city and two million jobs are
Speaker 1: associated with the financial sector. Those are more Carney's numbers.
Speaker 1: So I think that to me, the real question moving forward,
Speaker 1: what I want to see is what comes out of
Speaker 1: their meeting today and their subsequent communications on the Brexit question.
Speaker 1: That's the big elephant in the room. Very quickly. Here
Speaker 1: we have the snap election come up here in June.
Speaker 1: Are we're starting to see effects of Brexit playing out
Speaker 1: in the UK economy Now, Well, Tom was just over there, uh,
Speaker 1: and I think he's probably got a bigger sense of
Speaker 1: it than I do. But certainly, sitting over on this
Speaker 1: side of the pond, it looks to me like this
Speaker 1: election is a slam dunk. It just validates the national
Speaker 1: commitment to proceed with Brexit. I think there was a
Speaker 1: great cloud put over that by some of the stuff
Speaker 1: that came out that the court challenges and all that,
Speaker 1: And I think that Prime Minister May needs that unit
Speaker 1: unitiminity behind her in order to be able to confront
Speaker 1: the Europeans. I don't think it will help her any
Speaker 1: but it certainly puts her in a better position than
Speaker 1: she otherwise might have been. I don't know what was better.
Speaker 1: David Girl, Carl Weinberg on cross wind vectors at JFK
Speaker 1: or on the wage curve, cross winds and gray clouds
Speaker 1: with the Carl Weinberger. Michael Cannon joins US now. He's
Speaker 1: the director of Health Policy Studies at KATE the Cato Institute,
Speaker 1: and read from an op ed he wrote recently for
Speaker 1: The Hill. He said, the reality is that Republicans are
Speaker 1: not repealing Obamacare, They're making it worse and offering to
Speaker 1: take the blame for its failures, which will ultimately cement
Speaker 1: that law in place. A bleak assesspect of where things
Speaker 1: stand here on Capitol Hill at Michael Cannon. Great to
Speaker 1: see once again, Let's let's start with the state of play. Uh,
Speaker 1: this is out of the House, his hands now moves
Speaker 1: onto the Senate. Are you at all more optimistic that
Speaker 1: the law that you would like to see could be
Speaker 1: crafted by senators there? What do you think is that
Speaker 1: the stat of healthcare reform, of healthcare reform in Washington
Speaker 1: right now? Well, I think you have to start with
Speaker 1: what's happening in the marketplace right now, which is we're
Speaker 1: seeing insures flee the Obamacare exchanges to the point where
Speaker 1: you have some parts of the country where there are
Speaker 1: no carriers in the exchanges after December, and there are
Speaker 1: lots of lots more parts of the country where there's
Speaker 1: only one carrier in the exchanges, so there's just one
Speaker 1: insure exit away from having no exchange plans there, and
Speaker 1: the carriers that are remaining are asking for premium increases
Speaker 1: on the order that's uh that comes out of Maryland,
Speaker 1: where Blue Cross, Blue Shield has asked for that on
Speaker 1: top of all the past years increases like and and
Speaker 1: So this is obviously unsustainable. And the House didn't show
Speaker 1: much of an appetite for really repealing Obamacare. They want
Speaker 1: to leave in place the regulations that are causing all
Speaker 1: this instability, causing these premium increases, and it's unsure that
Speaker 1: the Senate has any more of an appetite for that.
Speaker 1: So it may have to get worse before it gets better.
Speaker 1: We may have to see more of these premium increases,
Speaker 1: more of these market collapses, more people going without health
Speaker 1: insurance to help them pay for the medical care they need,
Speaker 1: before Congress focuses on what the real problem is, which
Speaker 1: are these Obamacare regulations that are really destroying healthcare for something.
Speaker 1: Here's my question about those companies pulling out of these
Speaker 1: Obamacare exchanges. How much of that has to do with
Speaker 1: problems with the law and the marketplace itself versus just
Speaker 1: the uncertainty of the conversation about healthcare reform continuing. If
Speaker 1: if the CEO of ETNA Says Say cites the fact
Speaker 1: that there's uncertainty in the air. Uh, it seems like
Speaker 1: that's being contributed to or driven by the fact that
Speaker 1: there's still so much legislative uncertainty surrounding Obamacare, at least
Speaker 1: in part to agree with that. Well, yeah, that's certainly
Speaker 1: a part of it. But the the the centerpiece of
Speaker 1: Obamacare is a series of system of government price controls
Speaker 1: that the deeds stabilizes the market. Remember when the Obama
Speaker 1: administration went to the Supreme Court, they said, well, you
Speaker 1: can't block the individual mandate because Obamacare will destroy health
Speaker 1: insurance markets if you do that. So so the core
Speaker 1: of this law destabilizes insurance markets, and you need all
Speaker 1: sorts of subsidies in order to then stabilize the markets.
Speaker 1: And and and those subsidies were not authorized. There are
Speaker 1: a lot of them. Warrant as. If one federal judge
Speaker 1: told us, were you in that photo shoot at the
Speaker 1: White House? Did they invite you to the unless you
Speaker 1: have evidence, I'm just gonna what did you think of that?
Speaker 1: They took a victory lap before the thing even got
Speaker 1: to the Senate. Actually, it did seem it did seem bizarre. Yeah,
Speaker 1: it seemed like a mission accomplished. Moment because they're having
Speaker 1: this Rose garden Um press conference to sell lible grate
Speaker 1: House passage of a bill, which is you know, that's
Speaker 1: usually the sort of thing and you uh, you hold.
Speaker 1: After the bill passage, you have a signing ceremony, and
Speaker 1: that's when you invite everyone to I think that the
Speaker 1: Trump administration was desperate for a win. Okay, I'll go
Speaker 1: with that. In your essay, You've got a beautiful quote
Speaker 1: from President Clinton on the challenges of his Obamacare. I
Speaker 1: get that. Who's in support of Michael Cannon health economics
Speaker 1: who have those bodies on Capitol Hill? Want your vision
Speaker 1: of where we should go? Well, there are people who
Speaker 1: who have introduced the Health Saving Account expansion idea that
Speaker 1: I put forward a number of years ago, that would
Speaker 1: be a bigger tax cut than the reagular Bush tax
Speaker 1: cuts combined. Jeff Flake in the Senate, Dave Bratton the
Speaker 1: House of Interest gets the music, and and then and
Speaker 1: and there are others. There are other members of Congress
Speaker 1: who are working on legislation right now that would be
Speaker 1: that would actually appeal and replace Obamacare, and they're trying
Speaker 1: to get that into the debate. David gurn Time King
Speaker 1: Michael Cannon of Kato truly one of the nation's experts
Speaker 1: on healthcare. Michael CNN's got it. We thank singing and
Speaker 1: for this. And as the usual person who really needs
Speaker 1: healthcare coverage, she has cancer in Tennessee. Quote it's that
Speaker 1: or die? So what else would you do? Which I
Speaker 1: think is a question for a lot of us. You
Speaker 1: mentioned earlier. East Tennessee is an example of where this
Speaker 1: is not working out. Where are we going to be
Speaker 1: in one year? And her name is Melissa and Ants
Speaker 1: and she has an advanced form of leukemia. How did
Speaker 1: you know that? I know? All so uh so? And
Speaker 1: Melissa's one of those people who is having their access
Speaker 1: to care threatened by the instability created by Obamacare's regulations. Now,
Speaker 1: if Melissa has a pre existing condition in decent society,
Speaker 1: if she can't afford the medical care that she needs,
Speaker 1: we should do something to help her. We used to
Speaker 1: do that to be stable. Well, you know, there are
Speaker 1: a lot of people falling through the cracks of health
Speaker 1: care sector. But that has to be a stable system
Speaker 1: of assistance, and Obamacare is not that. Does Trump Care
Speaker 1: help that? No, actually makes it worse. She she and
Speaker 1: people like her would be I think even worse shape
Speaker 1: under Trump Care, because you have a race to the
Speaker 1: bottom even for those who have coverage. What's the motivation,
Speaker 1: as you see it, for structuring and completing and voting
Speaker 1: upon the law that Republicans in the House voted on.
Speaker 1: Are are you a a cynic who thinks this is
Speaker 1: all about politics? Or do you believe that there are
Speaker 1: Republicans that thought in good faith that they were doing
Speaker 1: something to change or two to better the Affordable Care Act? Well,
Speaker 1: you know, Republicans have their own sort of pre existing condition,
Speaker 1: which as they care about taxes and don't care about healthcare.
Speaker 1: Uh there. I like to call them the Christians scientists
Speaker 1: of public policy. They just don't do healthcare. And if
Speaker 1: you look at this bill, it really shows the motivation
Speaker 1: for this bill was to cut the taxes in Obamacare,
Speaker 1: set up tax reform, and who really cares about the
Speaker 1: healthcare part? And people who care about the healthcare part
Speaker 1: are people like Melissa and NaN's, people like me, people
Speaker 1: who actually want a stable system of subsidies to help
Speaker 1: those with expensive illnesses. So if if if I'm running
Speaker 1: a major health insurer, if this law were to pass,
Speaker 1: say the Senate were to adopt the bill as as written.
Speaker 1: Does that provide me with more certainty? And if so,
Speaker 1: for how long if you're an insurer? Yeah, I don't
Speaker 1: really think so, because there's there's still this question of
Speaker 1: um because the very part of Obamacare that is destabilizing
Speaker 1: the market is still on the books. And the only
Speaker 1: way to solve that is either to repeal that which
Speaker 1: we call community rating, it's a system of price controls,
Speaker 1: or you can try to just subsidze the heck out
Speaker 1: of insurance companies to keep the markets from collapse, to
Speaker 1: keep them from leaving. And uh and and so your
Speaker 1: choices are. It's really a binary choice. You can either
Speaker 1: repeal Obamacare's regulations or you can just go hole hog
Speaker 1: on Obamacare and and and and do what the Democrats
Speaker 1: wanted to do is just subsidize the heck out of
Speaker 1: the market. What do you see all of this going?
Speaker 1: It goes to the Senate. Now, as I mentioned, they
Speaker 1: rewrite it, right, holy right, like it's gonna be a
Speaker 1: whole new thing. Yeah, there are other their senators who've
Speaker 1: already written bills that they think would be a better approach.
Speaker 1: They're going to try to call together fifty Senators. But
Speaker 1: I don't know how. I don't know what can pass
Speaker 1: the Senate. But I think that I think the longer
Speaker 1: this drags out, the probably probably the better the product
Speaker 1: will be because you will see more of the dislocation,
Speaker 1: we'll get more of the stories from people like it
Speaker 1: will be more urgency, and it'll focus their attention on
Speaker 1: the actual problem, which is the regulation. But isn't this
Speaker 1: debate no different than when you were doing healthcare debates
Speaker 1: on that beautiful law at the University of Reginia. I mean,
Speaker 1: what's changed? We're arguing about do we want to be
Speaker 1: like Britain? Many people say yes, many people say no.
Speaker 1: I believe Cato says no. But what's the difference between
Speaker 1: this conversation and your first healthcare chat at U v
Speaker 1: A a million years ago? I wish there were more difference.
Speaker 1: For a while there we had Republicans who were we
Speaker 1: had Republicans opposed to this sort of Obamacare approach, that
Speaker 1: it would be a step in the direction of a
Speaker 1: single payer system. And now that they're sort of caving
Speaker 1: on this pledge that they made for seven years to
Speaker 1: repeal Obamacare, they're gonna bring us closer in two ways.
Speaker 1: The first way is by giving a republican UH imper
Speaker 1: mater to these ideas, and the second way is by
Speaker 1: UH taking such a drubbing at the polls. The Democrats
Speaker 1: are going to take over Congress and they're gonna want
Speaker 1: single But the fact of the matter is, I believe
Speaker 1: most polls show people have an affection for some elements
Speaker 1: of the Affordable Care Act. How can you ca to
Speaker 1: wise those constructive elements of Obamacare? Well, they're not constructive,
Speaker 1: the destructive, and polls say that not the whole thing
Speaker 1: people love it? Yes, the whole thing, people do not
Speaker 1: love it. We've done pulling on this at the Cato Institute.
Speaker 1: We've asked people, when you tie the costs to the
Speaker 1: benefits to the supposed benefits of Obamacare, do you still
Speaker 1: like it? And Democrats oppose it? Okay? So what Senator
Speaker 1: where I need a common ground between Uve Reinhardt, Michael Cannon,
Speaker 1: Senator Schumer and I'll pick on Jeff Flake? Okay? Where
Speaker 1: is the common ground to get our seventent of g
Speaker 1: d P in control? So there's some sense of coherence?
Speaker 1: I think that the only way that we're going you know,
Speaker 1: what are the necessary ingredients to getting a build through Congress.
Speaker 1: It's a step in the right direction. Is the president
Speaker 1: has to engage. He has to engage by saying that
Speaker 1: in his Obamacare's regulations that are reducing the quality of
Speaker 1: care for people in the exchanges, and that's the because
Speaker 1: that is what that's the cost of Obamacare. That actually
Speaker 1: motivates Democrats to oppose it. When you tell Democrats that
Speaker 1: these supposedly beneficial provisions actually reduced the quality of care
Speaker 1: that they and their family received, they flipped from support
Speaker 1: to opposition. Was there or is there a piece of
Speaker 1: legislation that mirrors what you think should happen to the
Speaker 1: affordable A character? It always surprised when I lived in
Speaker 1: Washington for a very long time there was so much
Speaker 1: conversation about the repeal of Obamacare. I guess you could
Speaker 1: say the same thing of tax to form as well.
Speaker 1: There there wasn't a piece of legislation ready to go.
Speaker 1: Is there or was there a piece of legislation that
Speaker 1: would would in in some reflect what you think should
Speaker 1: happen to this law? I think there is. You know,
Speaker 1: Ran Paul has a bill. Senator Ran Paul from Kentucky
Speaker 1: has a bill that would repeal Obamacare in full, provide
Speaker 1: some transition assistance for people with pre existing conditions, and
Speaker 1: vastly expand health savings account which would actually start to
Speaker 1: bring down healthcare prices, which is the most important form
Speaker 1: of assistance we can provide to people with pre existing
Speaker 1: conditions and low incomes. I have some quibbles on the
Speaker 1: margins with how he goes about that, but yeah, there's that,
Speaker 1: there's legislation out there. A lot of politicians talk about
Speaker 1: the hardness of healthcare. This is difficult stuff. Are there
Speaker 1: politicians who get it, who you admire their engagement with
Speaker 1: the issue, who are who are willing to hear you
Speaker 1: out and to to walk through these uh these thorny woods. Well,
Speaker 1: they're like I said, Republicans have this prexistant condition where
Speaker 1: they don't do healthcare. And unfortunately, there's a real, you know,
Speaker 1: sort of a wonk gap in Congress and outside of
Speaker 1: Congress where Democrats invest in this issue much more heavily
Speaker 1: than Republicans do and they out maneuver Republicans as a result.
Speaker 1: And so one of our jobs that the CAT and
Speaker 1: students have been trying to bridge or make up that
Speaker 1: that that walk gap and Uh, you know, Obamacare helped
Speaker 1: for for a time, but it didn't do enough to
Speaker 1: focus their attention on this. We're gonna talk about taxi
Speaker 1: form a little bit later, but let's let's devetail it
Speaker 1: quickly in the two minutes that that we have a
Speaker 1: lot of people said to get to tax before, we
Speaker 1: had to see some reform of the affordable character. You
Speaker 1: buy that argument. Do you think it's gonna gonna forestall
Speaker 1: movement on tax before not having this done? Well, what
Speaker 1: it'll do is it will make it harder to make
Speaker 1: the tax reduction permanent because of some weird Senate budget rules.
Speaker 1: And that is really what motivated the House to pass
Speaker 1: this awful healthcare bill, because it does cut taxes and
Speaker 1: so it facilitates tax reform. And Republicans are playing to
Speaker 1: the stereotype, which is all they care about is cutting
Speaker 1: taxes and they don't care about health care. Tommy didn't
Speaker 1: ask you what happens in twelve months? Questions what happens
Speaker 1: not to not to the Cadillac plans, but what is it?
Speaker 1: Is it? John Tucker? V W plan we have? Is
Speaker 1: it a Cadillac Plan? VW. Beetle Plan, the Bentley Plan,
Speaker 1: the Bentley Plan. Okay, but it's not a joke. I
Speaker 1: mean to the people of East Tennessee and name the
Speaker 1: eighteen other geographies, where are these people in twelve months?
Speaker 1: That's hard to say. I don't think it's Uh, it's
Speaker 1: hard to say. I see two possible outcomes. One Congress
Speaker 1: actually repeals the regulations that are causing this problem and
Speaker 1: in the same legislation provide some assistance for people like
Speaker 1: Melissa and ants. Or they just try to put band
Speaker 1: aids on this, and we have more and more stories
Speaker 1: like that and more and more people falling through the cracks.
Speaker 1: How cool was it to have Ellen Meltzer at CATO?
Speaker 1: Was it great? Just meeting after meeting time after time. Um,
Speaker 1: he's a He's an impressive person. Yeah. A great loss
Speaker 1: to all of economics and cluely to our policy in Washington.
Speaker 1: Michael Kennon's with the CATO Institute, Allen Meltzer was with
Speaker 1: Carnegie Mellon University. David Gura, and Tom King worldwide coast
Speaker 1: to coast in New York. Together, this is Bloomberg, brought
Speaker 1: you by Bank of America Mary Lynch, dedicated to bringing
Speaker 1: our clients insights and solutions to meet the challenges of
Speaker 1: a transforming world. That's the power of global connections. Mary Lynch,
Speaker 1: Pierce Federin, Smith Incorporated, Member at side PC. There's something
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Speaker 1: Bloomberg dot com slash Lens. David Grant, Tom Keene in
Speaker 1: New York. This is bloom e Surveillance on Bloomberg Graded.
Speaker 1: We had the pleasure of speaking with retired Admirald James
Speaker 1: to Rita's last week while he was in Washington preparing
Speaker 1: to head up to the DIRKS and building to testify
Speaker 1: before a Senate committee on cybersecurity. He did that, and
Speaker 1: a day later there was a huge malware attack, ransomware
Speaker 1: attack worldwide. We're still figuring out the source of that.
Speaker 1: They're still concerned about its spreading. Adamlald James to Vida's
Speaker 1: now deal in the Fletcher School of Law Diplomacy, A
Speaker 1: tough university, joins us Adams Derida's great to speak with
Speaker 1: you once again. Describe what we saw here on Friday,
Speaker 1: the degree to which you were worried about this beforehand,
Speaker 1: and how worried we should be that we could see
Speaker 1: something like this happen again and perhaps again and again
Speaker 1: and again. I was very worried when I testified, and
Speaker 1: I'm even more worried now. And let's face that David
Speaker 1: dis is going to be a rolling thunder of a
Speaker 1: series of attacks. This is This particular one was derived
Speaker 1: from tools that were if you released into the wild
Speaker 1: from the National Security Agency, They're very potent. They can
Speaker 1: be manipulated. We should expect more of this. Unfortunately. On
Speaker 1: that note, I read the blog post by the president
Speaker 1: of Microsoft, that being one Brad Smith, and he said
Speaker 1: the government should treat this attack as a as a
Speaker 1: wake up call, and he said, this attack provides yet
Speaker 1: another example of why the stockpiling of vulnerabilities by governments
Speaker 1: is such a problem. Here you have some particular expertise set.
Speaker 1: Why is the government stockpiling all of this? What would
Speaker 1: a company like Microsoft like to see the government do well.
Speaker 1: Let's think of two kind of similar looming towers. One
Speaker 1: was Pearl Harbor and another one was nine eleven. In
Speaker 1: both cases, the nation took a devastating blow, and afterwards
Speaker 1: we convened a blue ribbon commission and looked at what
Speaker 1: we need to do this time. You can see this
Speaker 1: looming tower. Let's get that group of smart people together
Speaker 1: and tell us what we need to do to protect ourselves.
Speaker 1: James trevide us with us with such your school Bloomberg surveillance.
Speaker 1: This morning worldwide brought you by Investco. Looking for investment views,
Speaker 1: Investco's high conviction portfolio managers are just a click away.
Speaker 1: Go to investco dot com slash us to subscribe to
Speaker 1: the investial blog and follow at investo us on Twitter. Okay, Admiral,
Speaker 1: So we had Pearl Harbor. No one saw it coming
Speaker 1: except maybe hauls that you'll put a third of the
Speaker 1: fleet out to see where's Admiral King, where's the Admiral
Speaker 1: King of cyber security? To give us the urgency to
Speaker 1: get up on the table and start screaming. I think
Speaker 1: it reposes in the business world. So it's people like
Speaker 1: Eric Schmidt, Uh, it is, people like Bill Gates, is
Speaker 1: people like Dan Shulman of PayPal. They see this looming
Speaker 1: tower and that's why you're hearing them as I am
Speaker 1: talking about the danger ahead. Well, on Windows, where's Microsoft?
Speaker 1: You know how it's going? My Walter Cronkite imitation today
Speaker 1: from Moscow to Maine. Okay, great, Microsoft, I got all
Speaker 1: the ms in there. Where is Microsoft? If this is
Speaker 1: a core Windows issue, they need to be prepared for
Speaker 1: more this. And what is different Tom is the release
Speaker 1: of these tools from the National Security Agency. They are
Speaker 1: lethal devices, and I assure you in Washington State today
Speaker 1: those engineers are all hands on deck to try and
Speaker 1: be prepared for the next wave that's coming. How fierce
Speaker 1: is the competition for talent here? You've unveiled a proposal
Speaker 1: here for new service Academy focused on un cyber security.
Speaker 1: Just in terms of how many people are trained and
Speaker 1: able to do this kind of work. How fierce is
Speaker 1: the competition. The short answer is not enough. The competition
Speaker 1: is beyond fierce. It's white hot, and we are going
Speaker 1: to have to ask our young men and women, as
Speaker 1: they do in the other branches of the military, to
Speaker 1: stand and deliver in a cyber force. Here's the good news.
Speaker 1: It doesn't have to be massive. We don't need hundreds
Speaker 1: of thousands of people, but we need five to ten
Speaker 1: thousand dedicated cyber warriors who can stand and respond to
Speaker 1: these kinds of attacks, whether they come in this case
Speaker 1: from cyber criminal or from nation states or from terror.
Speaker 1: Do you assume, Admiral, because these people are evil, they'll
Speaker 1: always be one step ahead of our good technology intentions.
Speaker 1: I think so in the case of cyber crime. Another
Speaker 1: way to put it, Tom is that almost inevitably, offense
Speaker 1: will overcome defense in this world. So you have to
Speaker 1: treat these cyber criminals the way we've treated pirates at sea.
Speaker 1: You need a global response to them. Okay, folks, I failed.
Speaker 1: I tried to get through this Trump fee with the
Speaker 1: adimalle And what makes a good FBI director a wise
Speaker 1: one up? First of all, he or she has to
Speaker 1: be unbiased Secondly, a law enforcement professional. I would argue
Speaker 1: someone who's been to law school, who served at the
Speaker 1: highest level of advising. In number three, the ability to
Speaker 1: speak truth to power. I think James Comey had those attributes,
Speaker 1: but he was burned by this president. Now we're gonna
Speaker 1: have to ask another American to step into a very
Speaker 1: fought situation. James Stevidis is it Fletcher School. His book
Speaker 1: is fantastic. I'll put it on Twitter here in a
Speaker 1: moment on leadership is just absolutely out short, you know,
Speaker 1: just typical Stevidis. Uh, David, it's just short, right to
Speaker 1: the point. And the syllabus for you, I know you've
Speaker 1: been reading in Disco'm like doing the voracious reading. That's
Speaker 1: what I'm doing to try to keep calm given this
Speaker 1: new slow from Kevin's Really, how did you observe this weekend?
Speaker 1: David in the Washington Zeitgeist. Yeah, I'm curious to see
Speaker 1: how fast all of this plays out. The White House
Speaker 1: very eager to get somebody helming the the FBI. I
Speaker 1: will see if they're able to do animals read. We've
Speaker 1: been talking about retail over these last couple of weeks.
Speaker 1: How Davidvitz joined us the last week Shelley Band columns
Speaker 1: from Bloombergadfly as well painting a picture for us of
Speaker 1: the UH bleak retail senior here in the US. Joining
Speaker 1: us now UH is Oliver Chin. He is with the
Speaker 1: counting Company. Great to have him. As always to Oliver,
Speaker 1: I look at the companies you cover, the three dozen
Speaker 1: or so that you're you're covering. How similar is the narrative?
Speaker 1: Is the story among those three dozen companies? Yeah? What
Speaker 1: we do have in terms of a similar narrative is
Speaker 1: really the decline of physical store traffic in terms of football. Um. However,
Speaker 1: it's it's not true everywhere, I would say department stores
Speaker 1: and mall based retailers are seeing the brunt of this.
Speaker 1: On the other hand, UM, I cover a wide swath
Speaker 1: of over thirty stocks luxury goods. In terms of the
Speaker 1: luxury spending environment that's been great and then deep value,
Speaker 1: so customers want to shop it out let's, they want
Speaker 1: to shop it off prices like t j X and
Speaker 1: Ross and so it's not all doom and gloom, but
Speaker 1: there is a lot of doom and gloom. We'll get
Speaker 1: to the luxury space in just a minute. Let's start
Speaker 1: with with Macy's, which is where the story began during
Speaker 1: earning season last last week. I look at your your
Speaker 1: note about Macy's and you say that it's a company
Speaker 1: on a journey. How much longer are investors prepared to
Speaker 1: give this company as it travels on? Um? It is
Speaker 1: on this journey. It's at the epicenter of a lot
Speaker 1: of problems and disruption in the industry. UM. I mean
Speaker 1: investors have really penalized the stock. So the multiples come
Speaker 1: in tremendously to to below ten times about seven times
Speaker 1: to e multiple the industries around fourteen to fifteen when
Speaker 1: things are normal, So investors have really penalized evaluation. How
Speaker 1: long will this take? This disruption occurring with store closures
Speaker 1: is quite painful and we'll take multiple years, So negative
Speaker 1: calmp store closures. UM it looks like it's a rough
Speaker 1: spot for for a while and Macy's is trying their best.
Speaker 1: Part of your your prescription here is from Macy's to
Speaker 1: reinvent product lead times. How difficult is that for for
Speaker 1: for a retailer to do? It is challenging because it's
Speaker 1: an organizational challenge in terms of restructuring the right people
Speaker 1: in the right place at the right time. But Macy's
Speaker 1: has about a one year lead time, and retailers such
Speaker 1: as t J Max work on one to two quarters,
Speaker 1: and retailers such as prim Mark and h and M
Speaker 1: and Endo texts can work as short as a month
Speaker 1: or a few weeks. So Macy's needs to shrink it
Speaker 1: um and that's the name of the game. Oliver Chin
Speaker 1: with us account and on retail, Oliver, one of your
Speaker 1: great strengths as the kids. You look at specialty retail
Speaker 1: and you look at what the kids want and they
Speaker 1: don't want. Is any of this discussion we're having a
Speaker 1: generational shift away from the Internet, away from Amazon. When
Speaker 1: you look at the kids today, is there just a
Speaker 1: different way they consume versus before there is. There's profound
Speaker 1: transformations happening, and one of the key things is authenticity
Speaker 1: and really being true to yourself when you do you.
Speaker 1: So a lot of the macy story has been the
Speaker 1: consolidation and the sameness factor, which just isn't as appealing.
Speaker 1: You want things that really, you know, show your personal style.
Speaker 1: So Macy's needs to radically reinvent products. Also, keep in
Speaker 1: mind experiences and experiential has really transformed. So the stores
Speaker 1: need to be entertaining and everybody wants to really display
Speaker 1: what they're doing on social media. And then casualization in
Speaker 1: terms of really the the yoga pan is here to stay,
Speaker 1: Tom and Turn I felt the same thing this weekend.
Speaker 1: What the hell is why you this guy's on never again?
Speaker 1: What is casualization? Um, it's kind of the opposite of
Speaker 1: your both ties. But basically, um, you know, at leisure
Speaker 1: is a new formal wear see heard of the prestige
Speaker 1: cf A institute word for that on level three c
Speaker 1: f A David Slab. We are printing new words here
Speaker 1: every day on Bloomberg Surveillance already mentioned luxury at the top.
Speaker 1: Let me go there into this two point four billion
Speaker 1: dollar deal coach buying Kate Spade. Does that deal make
Speaker 1: sense to you? I walked by the Madison Avenue coach house.
Speaker 1: See all the coaches investig in becoming a luxury brand.
Speaker 1: This is something we've talked about with Jelly Banjo, our
Speaker 1: colleague here at Bloomberg gadfly about as well. Does the
Speaker 1: deal make sense to you? Yeah, it does because we
Speaker 1: think there's a lot of synergy. Specifically, UM, Kate Spade
Speaker 1: can expand in China and Japan. Also, Coach has a
Speaker 1: leading leather supply chain capability and Coaches really building America's conglomerate.
Speaker 1: In terms of a modern luxury platform, we cover the
Speaker 1: European luxury retailers such as Richemont Cartier as well as
Speaker 1: Louis Vuitton, which we're recommending LVMH, but Coach coaches approach
Speaker 1: will be different. It will be inclusive in terms of
Speaker 1: a house of modern luxury brands. We like that thesis,
Speaker 1: and we also think Kate Spade excuse very attractively towards
Speaker 1: millennials and and everybody does want youth, and it's important
Speaker 1: for the long term health and growth of of a
Speaker 1: of a platform. Who's the competitor there when you look
Speaker 1: at American houses trying to get into that luxury space
Speaker 1: to compete with some of those European brands you mentioned,
Speaker 1: who stands a chance of rivaling them? Well, we have
Speaker 1: a really limited set of luxury within the United States,
Speaker 1: So Coach kind of stands alone because they have very
Speaker 1: good handback store product and marketing execution. The other players
Speaker 1: we have are Tiffany, Ralph, Lauren Southeby. Southby's is really
Speaker 1: on an awesome journey becoming much more modern and their
Speaker 1: approach and broadening appeal. But Coach is really unique in
Speaker 1: terms of being keming for multi brand. You've used the
Speaker 1: word journey twice, Oliver. The only thing I know about
Speaker 1: retailers of my wallets on a journey to Gucci. It
Speaker 1: comes back lighter, Oliver Chen, thank you this morning. Greatly
Speaker 1: appreciate seriously, folks. He does just terrific work across a
Speaker 1: really wide group of redown we should frame the Congressman
Speaker 1: Kevin Brady is being north of north of Houston and
Speaker 1: uh and the woodlands and and I love one of
Speaker 1: the articles on the woodlands again north of Houston, the
Speaker 1: eighth District couple. But above that is it's a safe
Speaker 1: place if you don't like snakes, because there's only three
Speaker 1: venomous ones. Which is it's it's it's a different part
Speaker 1: of the country. Kevin Brady joins us now of the
Speaker 1: Texas eighth Congressional District. Key's chairman of House Ways and
Speaker 1: Means Committee. Chairman, Are you distracted by all going on
Speaker 1: at the White House? Or can you actually commit legislation
Speaker 1: through the end of this year? Yes, I can, so
Speaker 1: thanks for having me this morning, and the answer is that, yeah,
Speaker 1: we're completely completely focused on tax reforms. So is the
Speaker 1: President's tax team as well. And so I think one
Speaker 1: of the important things here two weeks ago when the
Speaker 1: pres Since tax team talked about his principles, what they
Speaker 1: also laid out was the the timetable head, which is
Speaker 1: for the House, the White House, and Senate to work
Speaker 1: together and see if we can't unify behind a single
Speaker 1: tax plan. I think that is critically important if we
Speaker 1: can finish that out, and I think it uh better
Speaker 1: assures that we can finish this in which is our goal.
Speaker 1: Chairman Brady, how did you react when you saw that
Speaker 1: one pager as it's called, from the White House, those
Speaker 1: two hundred words, those principles that you just described. When
Speaker 1: I talked to guests here at Bloomberg, executive's accountants, people
Speaker 1: from the business world, they've been operating off of your blueprint,
Speaker 1: which is more fulsome than that document we got from
Speaker 1: the White House. What do you do with that one
Speaker 1: page piece of paper you got from the White House? Well, actually,
Speaker 1: as I was pretty encouraged, because you know, where there's
Speaker 1: about eight percent agreement on the key um issues, we
Speaker 1: still have some work to do. Obviously, there's some differences
Speaker 1: on the rights and someone that's on as well, the
Speaker 1: family um. A portion of this, which I think keeps
Speaker 1: getting lost in discussion, was very close. That the two
Speaker 1: were very close and so well. I think we start
Speaker 1: from a very solid foundation. So I was I was encouraged.
Speaker 1: You've got that left then one fit of this thing
Speaker 1: to sort out. I imagine part of that is this
Speaker 1: border adjusted tax, where you're disappointed to see the White
Speaker 1: House not embrace that. No, not necessarily. Our discussions with
Speaker 1: them and have been pretty positive. Look, I think the
Speaker 1: way Secretary Manuchin talked about at the morning earlier that
Speaker 1: morning on that day was accurate, which he said, in effect,
Speaker 1: he said, the way that that that provision was originally
Speaker 1: introduced won't work, but we'll work with the House going
Speaker 1: forward to see if we can't design it and make
Speaker 1: that work. I think that's exactly accurate. Here's what we're doing.
Speaker 1: We know what our competitors do in China, Europe, Mexico,
Speaker 1: and Canada. They beat us on lower rates, they beat
Speaker 1: America by no longer tax and worldwide, and they border
Speaker 1: or just we made in the House a conscious decision
Speaker 1: to go straight after our competitors. And the principle is
Speaker 1: this in border justability, which is, look, do we want
Speaker 1: to keep the status quote that encourages jobs to move
Speaker 1: overseas and actually favors foreign products and workers over US
Speaker 1: products and workers, or do we want to tax everyone
Speaker 1: equally in the United States so you have true competition
Speaker 1: for the first time, and it not only eliminates every
Speaker 1: tax incentive for companies to move their jobs and research
Speaker 1: overseas and actually creates strong incentives to to bring them
Speaker 1: back to the United States. We're gonna make the argument
Speaker 1: and bring the case in a new design by the
Speaker 1: way of border justability to our discussions with the White
Speaker 1: House and the Senate. Mr Brady, you have a wonderful
Speaker 1: experience in this nation from the spine of the Midwest,
Speaker 1: from South Dakota on down Texas. When when you when
Speaker 1: you look at the importance of the US Senate, how
Speaker 1: will they rewrite Trump Care? Do you look for them
Speaker 1: to do a complete redo? Then you will have to
Speaker 1: compromise on you know, I don't know. That's a great question.
Speaker 1: I don't know the answer yet. What I'm what I'm
Speaker 1: encouraged by is that I think they'll take the key
Speaker 1: provisions from the House and continue to improve upon it.
Speaker 1: For example, we know that in these two big steps
Speaker 1: were taking beyond repeal. Those two big steps being let's
Speaker 1: let's restore the free market of insurance so people have
Speaker 1: broader choices. Let's restore state control rather than Washington control,
Speaker 1: so more innovative, so the states can design healthcare better
Speaker 1: to meet their needs. In that is this individual tax
Speaker 1: credit that can travel with people from job to job,
Speaker 1: state to state home to start a business or raise
Speaker 1: a family, even into those early retirement years. What we
Speaker 1: noticed is that those in the fifties six four year
Speaker 1: old arrange frankly, need a more muscular tax credit at
Speaker 1: that point in their lives. The House sent over gotah
Speaker 1: almost ninety billion dollars to the Senate. You know, we
Speaker 1: we expect them to use those dollars, uh to muscle up,
Speaker 1: power up that part of the tax credit for Americans
Speaker 1: in that age. Right, That's one example, Chairman Brady, Thank
Speaker 1: you so much. David Gourd and I look forward to
Speaker 1: speaking to you. Mr Brady's from the eighth Congressional listart
Speaker 1: just north of Houston, Texas. Thanks for listening to the
Speaker 1: Bloomberg Surveillance Podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at
Speaker 1: Tom Keene David Gura. Is that David Gura? Before the
Speaker 1: pod cast, you could always catch us worldwide. I'm Bloomberg Radio,
Speaker 1: brought you by Bank of America Mary Lynch. Dedicated to
Speaker 1: bringing our clients insights and solutions to meet the challenges
Speaker 1: of a transforming world. That's the power of global connections.
Speaker 1: Mary Lynch, Pierce, Fenner and Smith Incorporated, Member s I
Speaker 1: p C.