Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. We start with the
Speaker 1: US economy and some signs that the consumer may be
Speaker 1: pulling back. Has seen this weekend the retail sales numbers,
Speaker 1: and we welcome down our very special contributor, Larry Summers
Speaker 1: of Harvard. So we had the retail sales numbers which
Speaker 1: came in lower and expected by the housing starts were
Speaker 1: really down substantially. Are we seeing a slowing economy?
Speaker 2: We may be, and it's certainly not at the pace
Speaker 2: that it once was. I think it's a real question
Speaker 2: whether we're really seeing a profound slowing or month to
Speaker 2: month fluctuations. My guess is this is still in the
Speaker 2: world of month to month fluctuations with an underlying picture
Speaker 2: around continuing growth. But you can't be sure, and I'd
Speaker 2: certainly agree that the data has been more on the
Speaker 2: slow side for the last month or two than on
Speaker 2: the rapid.
Speaker 1: So last week we spoke. We talked about the possible
Speaker 1: economic policies of a Donald Trump if he were returned
Speaker 1: to the White House, because he had floated the idea
Speaker 1: of maybe having tariffs replaced some or all of income taxes.
Speaker 1: You were not very enthusiastic about that. Since then, he's
Speaker 1: responded to you very specifically on a podcast called all
Speaker 1: In where they asked him about well, how he responded
Speaker 1: to your thoughts on tariffs, and he said he respected you.
Speaker 1: He gave you nice plaut it said, he respects you. You
Speaker 1: speak your mind, is I think what he said. But
Speaker 1: at the same time, he really likes tariffs, he said,
Speaker 1: because it shows the power of a country, both economically
Speaker 1: and politically. What do you make of his endorsement of
Speaker 1: tariffs as a major tool of policy.
Speaker 2: I don't see the evidence for his belief. First of all,
Speaker 2: the tariffs he proposes are going to be levied against Canada,
Speaker 2: They're going to be levied against our traditional European allies.
Speaker 2: If they are a tool of power and timidation, it
Speaker 2: seems to me they should be used much more selectively
Speaker 2: than he has proposed. Second, when you launch attacks, then
Speaker 2: others respond and the whole thing can spiral. The classic
Speaker 2: example of a major tariff policy in American history was
Speaker 2: Smooth Hawley, and it contributed to making the depression great.
Speaker 2: As I look around the world at countries who have
Speaker 2: seen tariffs as the center of their economic strategy. To
Speaker 2: make a nationalist point vis a vis other countries. The
Speaker 2: examples look like places like Argentina and a number of
Speaker 2: places in Latin America where it has not been so successful.
Speaker 2: So I'd like to see what the case is. But
Speaker 2: this is a case swhere. It's about as universal among
Speaker 2: economists who studied these things that you shouldn't pursue systematic
Speaker 2: across the board tariffs for long periods of time.
Speaker 1: Let's talk about change, because there's an awful lot of
Speaker 1: things that are changing around us right now. Whether it's
Speaker 1: climate that you've talked about at fair amount, geopolitics, global economy,
Speaker 1: there are a lot of changes going at the same time.
Speaker 1: Are we going through a particularly tumultuous time of change
Speaker 1: right now? Do you think around us? Or has it
Speaker 1: always been?
Speaker 2: Thus, here's the sense I have, David, I was fortunate
Speaker 2: enough to welcome baby granddaughter, Francis Joanne into the world
Speaker 2: when my daughter had my first granddaughter, about ten days ago.
Speaker 2: So I've been thinking about her life and it made
Speaker 2: me think about my grandmother. My grandmother lived from nineteen
Speaker 2: hundred to nineteen seventy four. She saw indoor plumbing come,
Speaker 2: she saw electricity come, she saw a first telephone, then radio,
Speaker 2: then TV movies come. She saw air conditioning, She saw antibiotics,
Speaker 2: which made childhood death a rarity. She saw the ability
Speaker 2: to no longer ride in horses, but instead to be
Speaker 2: able to fly across the country in five hours. My
Speaker 2: life almost now as long as hers was yours. We've
Speaker 2: seen a lot of history. We've seen a lot of change. Yes,
Speaker 2: we've seen computers. We've seen the cell phone. We've seen yes,
Speaker 2: the Bloomberg terminal. We've seen more modern financial markets. But
Speaker 2: I think you'd have to agree that we've saw much
Speaker 2: much less change than my grandmother's generation did. I have
Speaker 2: a suspicion that my granddaughter is going to witness history
Speaker 2: like my grandmother did. And most importantly, I think we're
Speaker 2: going to see a step change with what happens in
Speaker 2: artificial intelligence. As I've said before, the wheel was awfully fundamental,
Speaker 2: but once you have the wheel, you don't automatically get
Speaker 2: more and better wheels. Same thing with electricity. But artificial
Speaker 2: intelligence has the capacity to make better artificial intelligence, and
Speaker 2: that puts in a kind of upward exponential ratchet that
Speaker 2: isn't a feature of any other technological change. So my
Speaker 2: daughter's gonna witness seismic change, and the granddaughter is gonna
Speaker 2: witness seismic change, and the issue is going to be
Speaker 2: can we manage it so we avoid the catastrophes that
Speaker 2: were also part of my grandmother's interval on this earth.
Speaker 1: I just want to pick up on the artificial intelligence point,
Speaker 1: because you brought artificial generative artificial to us here at
Speaker 1: Wall Street week right about the time I think chat
Speaker 1: Gepeat came out. Now, since then you've got on the
Speaker 1: board of Open AI, so I want to ask what
Speaker 1: secret things in open eye? But from what you understand
Speaker 1: now about generative AI, has your view changed about how
Speaker 1: big it could be and also about what the possible
Speaker 1: dangers are because we know now more than we did then.
Speaker 2: Look, I think, David, this can be transcendent in its
Speaker 2: importance for the reason and that that I just describe.
Speaker 2: It has this recursive aspect where it's able to improve itself,
Speaker 2: and that differentiates it from other technologies. When we'll get
Speaker 2: where very hard to know how much will there be
Speaker 2: last mile problems that will stop some uses. That's another
Speaker 2: very important question where I don't think anybody can give
Speaker 2: a completely confident answer. God knows as companies as a society.
Speaker 2: We cannot leave war to generals, and we cannot leave
Speaker 2: AI only to AI developers. That's why it's absolutely essential
Speaker 2: that public authorities take a strong role here to make
Speaker 2: sure this technology is used for good. But equally, any
Speaker 2: effort to stop this or to just slow it down
Speaker 2: for the sake of slowing it down without also thinking
Speaker 2: about its positive development, would be to see the field
Speaker 2: to the irresponsible, would be to seed the field to
Speaker 2: potential adversaries of the United States, would be to seed
Speaker 2: the field to those whose vision of AI might be
Speaker 2: as a tool of totalitarianism rather than as a tool
Speaker 2: of human emancipation. That's why there's a phrase that I
Speaker 2: like that the that open eyes I often uses responsible
Speaker 2: iterative deployment. That is, you don't you proceed in stages
Speaker 2: and you're very focused on doing it responsibly. Now, that's
Speaker 2: easier said than done and requires enormous thought, but I
Speaker 2: don't think we have any other viable alternative.
Speaker 1: Larry, thank you so very much for being with us
Speaker 1: again this week. That's our special contributor, Larry Summers of
Speaker 1: Harvard