1 00:00:02,920 --> 00:00:07,280 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,760 --> 00:00:12,719 Speaker 2: You're listening to the Bloomberg Balance of Power podcast. 3 00:00:13,039 --> 00:00:17,040 Speaker 3: Catch us live weekdays at noon Eastern on Applecarplay. 4 00:00:16,200 --> 00:00:18,960 Speaker 2: And then Roudoo with the Bloomberg Business App. Listen on 5 00:00:19,079 --> 00:00:22,280 Speaker 2: demand wherever you get your podcasts, or watch us live 6 00:00:22,400 --> 00:00:23,600 Speaker 2: on YouTube. 7 00:00:25,720 --> 00:00:28,520 Speaker 3: So Joe Biden's back from the border, and as he 8 00:00:28,600 --> 00:00:31,960 Speaker 3: puts the finishing touches on a State of the Union 9 00:00:32,000 --> 00:00:35,080 Speaker 3: address that, as I read on the terminal, is expected 10 00:00:35,120 --> 00:00:38,960 Speaker 3: to call for higher taxes on the wealthy, more relief 11 00:00:38,960 --> 00:00:42,160 Speaker 3: for the working class. It is unclear if he will 12 00:00:42,200 --> 00:00:45,519 Speaker 3: be able to tout a cease fire in Israel. Remember 13 00:00:45,520 --> 00:00:48,360 Speaker 3: that was the hope, as he said, hopefully by Monday, 14 00:00:48,400 --> 00:00:51,120 Speaker 3: we'll have this done, and that doesn't mean that it 15 00:00:51,159 --> 00:00:53,400 Speaker 3: can't happen by Thursday. But with what's happening on the 16 00:00:53,400 --> 00:00:54,960 Speaker 3: ground right now in Israel, there are a lot of 17 00:00:55,040 --> 00:00:57,520 Speaker 3: questions about that. And that's where we start in a 18 00:00:57,720 --> 00:00:59,720 Speaker 3: very busy day here on the north lawn of the 19 00:00:59,720 --> 00:01:03,320 Speaker 3: White House with Bloomberg's Michelle Jim Risco, who is covering 20 00:01:03,320 --> 00:01:06,160 Speaker 3: the White House for US today as the Italian Prime 21 00:01:06,240 --> 00:01:10,360 Speaker 3: Minister visits. Just for an added layer of complexity in 22 00:01:10,400 --> 00:01:13,920 Speaker 3: our geopolitical soup, Michelle. The President's got a lot to 23 00:01:13,920 --> 00:01:16,360 Speaker 3: think about as he sits down with the Italian PM, 24 00:01:16,360 --> 00:01:19,760 Speaker 3: and I suspect that Ukraine will be the top of 25 00:01:19,800 --> 00:01:20,479 Speaker 3: the conversation. 26 00:01:20,600 --> 00:01:22,600 Speaker 2: What can you tell us That's right. 27 00:01:22,560 --> 00:01:25,679 Speaker 1: Joe and tgif in a wild week, you know that 28 00:01:25,720 --> 00:01:29,440 Speaker 1: twenty four hour here sounded really good to us. 29 00:01:29,440 --> 00:01:32,800 Speaker 2: There, you've done that today alone, talk about that's right. 30 00:01:32,880 --> 00:01:35,760 Speaker 1: Let's talk about what the Italian Prime Minister might be 31 00:01:35,840 --> 00:01:39,759 Speaker 1: speaking with Biden about today. Yes, you mentioned Ukraine funding. 32 00:01:39,800 --> 00:01:41,640 Speaker 1: I'm sure you hear a lot about that from the 33 00:01:41,720 --> 00:01:44,440 Speaker 1: General later this hour. We're bound to hear more about 34 00:01:44,480 --> 00:01:47,480 Speaker 1: that today from the White House, from Craine Jean Pierre, 35 00:01:47,480 --> 00:01:50,720 Speaker 1: and from John Kirby, who will brief later today. But 36 00:01:50,800 --> 00:01:54,600 Speaker 1: it'll be the same message that Ukraine urgently needs more resources. 37 00:01:55,160 --> 00:01:58,280 Speaker 1: Italy and the US both probably talking about more ways 38 00:01:58,320 --> 00:02:02,320 Speaker 1: to find more funding, more resources to get to Ukraine 39 00:02:02,360 --> 00:02:05,560 Speaker 1: in their defense against Russia at a critical time, just 40 00:02:05,600 --> 00:02:08,360 Speaker 1: past the two year mark in that war. The other 41 00:02:08,639 --> 00:02:11,320 Speaker 1: big issue that we expect might come up today is 42 00:02:11,560 --> 00:02:14,480 Speaker 1: just counter China competing with China efforts. So you had 43 00:02:14,720 --> 00:02:17,160 Speaker 1: a number of announcements this week and this wild week 44 00:02:17,480 --> 00:02:21,760 Speaker 1: from the US side about policies including restrictions on Chinese 45 00:02:21,800 --> 00:02:24,959 Speaker 1: electric vehicles and data security. Those might come up and 46 00:02:25,040 --> 00:02:27,960 Speaker 1: see where the two sides might meet together and cooperate 47 00:02:28,000 --> 00:02:30,600 Speaker 1: in a G seven manner and talk about other ways 48 00:02:30,600 --> 00:02:33,600 Speaker 1: that these two allies can counter China in different respects. 49 00:02:35,000 --> 00:02:37,640 Speaker 3: Well, I suspect that the matter of Israel is another 50 00:02:37,680 --> 00:02:40,040 Speaker 3: one on the President's mind as they try to formulate 51 00:02:40,040 --> 00:02:42,480 Speaker 3: a speech here next week. Michelle, they were hoping to 52 00:02:42,520 --> 00:02:45,760 Speaker 3: be talking about a cease fire as early as Monday. 53 00:02:45,840 --> 00:02:47,760 Speaker 3: Is it still possible to happen before the State of 54 00:02:47,760 --> 00:02:48,200 Speaker 3: the Union. 55 00:02:48,919 --> 00:02:50,960 Speaker 1: Well, for sure, that's going to be on the agenda. 56 00:02:51,000 --> 00:02:53,880 Speaker 1: That's going to be the focus of the President, alongside 57 00:02:54,160 --> 00:02:56,200 Speaker 1: drafting that State of the Union speech this weekend when 58 00:02:56,200 --> 00:02:59,160 Speaker 1: he heads to Camp David. He'll head there this afternoon. 59 00:02:59,840 --> 00:03:01,760 Speaker 1: But you know what he said yesterday when he left 60 00:03:01,760 --> 00:03:05,400 Speaker 1: for that dueling border visit yesterday on the south lawn 61 00:03:05,400 --> 00:03:09,000 Speaker 1: of the White House, he told reporters yes Hope Springs Eternal, 62 00:03:09,040 --> 00:03:11,000 Speaker 1: that they would have a ceasefire by Monday. But then 63 00:03:11,040 --> 00:03:14,000 Speaker 1: he followed that up saying, probably not by Monday, but 64 00:03:14,200 --> 00:03:18,200 Speaker 1: you know, and the complications around talks with Israel on 65 00:03:18,280 --> 00:03:22,560 Speaker 1: a seasfire just got more complicated with the tragic shooting 66 00:03:22,560 --> 00:03:25,519 Speaker 1: incident yesterday in Gaza that they're still trying to find 67 00:03:25,520 --> 00:03:28,040 Speaker 1: answers for. On the US side, President Biden saying he 68 00:03:28,880 --> 00:03:31,840 Speaker 1: was hearing two conflicting reports at least of what had 69 00:03:31,880 --> 00:03:34,760 Speaker 1: happened there and who was responsible, and of course that 70 00:03:34,840 --> 00:03:37,080 Speaker 1: kind of gets in the way of these negotiations around 71 00:03:37,080 --> 00:03:40,440 Speaker 1: getting a hostage deal, ceasefire deal to get hostages out 72 00:03:40,600 --> 00:03:43,560 Speaker 1: more aid in so a lot at work here. He's 73 00:03:43,560 --> 00:03:45,720 Speaker 1: going to have a super busy weekend ahead of a 74 00:03:45,880 --> 00:03:47,120 Speaker 1: very busy week next week. 75 00:03:48,200 --> 00:03:50,320 Speaker 3: I guess it'll be time well spent at Camp David 76 00:03:50,360 --> 00:03:52,160 Speaker 3: with what he has ahead of him. And you can 77 00:03:52,200 --> 00:03:54,920 Speaker 3: read a lot more about what we expect in the 78 00:03:55,000 --> 00:03:58,560 Speaker 3: address here on the terminal, as I mentioned an increase 79 00:03:58,600 --> 00:04:02,360 Speaker 3: in taxes on the wealthy Michelle and plans to highlight 80 00:04:02,440 --> 00:04:05,680 Speaker 3: the Chips Act, which of course is now beginning to 81 00:04:05,720 --> 00:04:08,520 Speaker 3: dole out money here to chip makers in the process 82 00:04:08,560 --> 00:04:09,400 Speaker 3: of reshoring. 83 00:04:09,680 --> 00:04:10,680 Speaker 2: We'll see what else we get. 84 00:04:10,720 --> 00:04:12,800 Speaker 3: I suspect that there could be some news coming next 85 00:04:12,840 --> 00:04:13,840 Speaker 3: week on the border as well. 86 00:04:13,880 --> 00:04:14,720 Speaker 2: You mentioned his visit. 87 00:04:14,760 --> 00:04:17,640 Speaker 3: We didn't well hear any details, Michelle, Could we get 88 00:04:17,760 --> 00:04:19,720 Speaker 3: an executive order announced on Thursday night. 89 00:04:20,680 --> 00:04:22,640 Speaker 1: Oh, we'll see about that. I don't know if we'll 90 00:04:22,640 --> 00:04:24,359 Speaker 1: have news from the State of the Union on that, 91 00:04:24,920 --> 00:04:27,039 Speaker 1: but we do hear. You know, this is kind of 92 00:04:27,040 --> 00:04:30,080 Speaker 1: a messaging battle right now. You saw from the dueling 93 00:04:30,080 --> 00:04:33,240 Speaker 1: border visits yesterday, President Trump saying, you know, this is 94 00:04:33,320 --> 00:04:37,920 Speaker 1: Biden's border crisis, and Biden shooting back that he wants cooperation. 95 00:04:38,040 --> 00:04:41,000 Speaker 1: He extended a hand, he said to President Trump to 96 00:04:41,120 --> 00:04:44,039 Speaker 1: join him in this fight. But we'll see it's benefiting, 97 00:04:44,080 --> 00:04:47,680 Speaker 1: clearly from polling, it's benefiting Trump right now to paint 98 00:04:47,760 --> 00:04:51,400 Speaker 1: the President as not doing enough and to continue to 99 00:04:51,440 --> 00:04:54,400 Speaker 1: try to push House Republicans to block these things, which 100 00:04:54,680 --> 00:04:57,760 Speaker 1: Trump so far has been successful in doing well. 101 00:04:57,800 --> 00:04:59,680 Speaker 3: If you're watching us on YouTube right now, you see 102 00:04:59,680 --> 00:05:01,600 Speaker 3: the very split screen that Michelle is describing. 103 00:05:01,640 --> 00:05:03,360 Speaker 2: Michelle, it's great to see you. Michelle. 104 00:05:03,400 --> 00:05:05,520 Speaker 3: Jem Risco reporting for US at the White House today. 105 00:05:05,560 --> 00:05:07,560 Speaker 3: She will be in the Oval Office when the President 106 00:05:07,920 --> 00:05:11,640 Speaker 3: sits down with the Italian Prime Minister and again, Ukraine 107 00:05:11,680 --> 00:05:13,719 Speaker 3: is the purpose of this conversation as they try to 108 00:05:13,760 --> 00:05:15,640 Speaker 3: find a plan B or are we on to c 109 00:05:15,880 --> 00:05:18,880 Speaker 3: now I can't remember. There was a plan D at 110 00:05:18,880 --> 00:05:20,640 Speaker 3: one point in the House, and we want to get 111 00:05:20,640 --> 00:05:24,440 Speaker 3: started on this part of our conversation with a voice 112 00:05:24,440 --> 00:05:26,679 Speaker 3: of authority. It's not very often we have him in studio, 113 00:05:26,720 --> 00:05:30,200 Speaker 3: but retired General Ben Hodges is with us now a 114 00:05:30,240 --> 00:05:33,200 Speaker 3: senior advisor to Human Rights first of course, former Commanding 115 00:05:33,240 --> 00:05:35,680 Speaker 3: General US Army Europe. It's great to see you in person. General, 116 00:05:36,200 --> 00:05:38,960 Speaker 3: Thank you for being with us in Washington. Where to 117 00:05:39,000 --> 00:05:42,479 Speaker 3: begin with the matter of Ukraine. It's looking like if 118 00:05:42,520 --> 00:05:45,159 Speaker 3: there will be funding, there will be a longer wait, 119 00:05:45,240 --> 00:05:47,440 Speaker 3: and the administration was warning us at the end of 120 00:05:47,520 --> 00:05:50,719 Speaker 3: last year that time would run out by about now. 121 00:05:50,760 --> 00:05:52,480 Speaker 2: This is the first day of March. 122 00:05:52,960 --> 00:05:56,240 Speaker 3: Are we going to start seeing more of a deficit 123 00:05:56,320 --> 00:06:00,679 Speaker 3: on the battlefield because of this or is Ukraine pushing 124 00:06:00,720 --> 00:06:01,320 Speaker 3: the calendar? 125 00:06:02,279 --> 00:06:05,640 Speaker 4: Well, of course, this is a terrible situation for Ukraine 126 00:06:05,720 --> 00:06:10,560 Speaker 4: armedforces and it's also unavoidable. I mean it's avoidable. This 127 00:06:10,680 --> 00:06:14,560 Speaker 4: didn't have to have to happen like this. I think 128 00:06:14,600 --> 00:06:19,160 Speaker 4: that we're going to see ammunition arriving from European countries 129 00:06:19,200 --> 00:06:22,960 Speaker 4: here over the coming months, which they should. But the 130 00:06:23,040 --> 00:06:27,599 Speaker 4: fact that the United States is failing to deliver ammunition 131 00:06:28,160 --> 00:06:31,400 Speaker 4: is a terrible reflection not just on the Congress, but 132 00:06:31,440 --> 00:06:35,880 Speaker 4: also on the administration. You know, everything starts with the objective, 133 00:06:36,360 --> 00:06:41,039 Speaker 4: what's the purpose? And the administration has not explained why 134 00:06:41,080 --> 00:06:45,479 Speaker 4: this is so important to America that Ukraine is successful. 135 00:06:46,200 --> 00:06:49,400 Speaker 3: The assessment in Key right now is aiming for July 136 00:06:49,640 --> 00:06:54,640 Speaker 3: that Russia could in fact punch through frontlines by the 137 00:06:54,680 --> 00:06:57,159 Speaker 3: heart of the summer. What would that look like in 138 00:06:57,240 --> 00:06:59,440 Speaker 3: terms of the war effort? Would that be a war lost? 139 00:07:00,160 --> 00:07:04,600 Speaker 4: So I think actually Russia does not possess the capability 140 00:07:04,680 --> 00:07:10,400 Speaker 4: to knock out Ukraine or to punch through and exploit anyway. 141 00:07:10,520 --> 00:07:13,360 Speaker 4: I mean, they don't have the large numbers of mounted 142 00:07:13,400 --> 00:07:18,440 Speaker 4: formations and troops and logistics that could exploit like they lost. 143 00:07:18,760 --> 00:07:22,240 Speaker 4: Ukraine lost Avdifka about two two and a half weeks ago. 144 00:07:22,520 --> 00:07:25,960 Speaker 4: There's been no real exploitation of something like that. So 145 00:07:26,920 --> 00:07:29,880 Speaker 4: what I imagine is going to be happening this summer. There 146 00:07:29,880 --> 00:07:33,120 Speaker 4: will be local tactical successes along the line by the 147 00:07:33,200 --> 00:07:36,920 Speaker 4: Russian side, but General Seerski and the Ukrainian Armed Forces 148 00:07:36,920 --> 00:07:40,080 Speaker 4: are going to stabilize this line for this year to 149 00:07:40,160 --> 00:07:45,080 Speaker 4: buy time to build up ammunition. Build up new units, 150 00:07:45,240 --> 00:07:49,200 Speaker 4: they've got to fix their personnel system. So this year 151 00:07:49,240 --> 00:07:52,480 Speaker 4: I think is more of the year of industrial competition. 152 00:07:52,880 --> 00:07:55,080 Speaker 3: Well, and to that end, we're told that even if 153 00:07:55,120 --> 00:07:59,400 Speaker 3: Congress approves the money tonight, while you're still in Washington, General, 154 00:07:59,800 --> 00:08:01,720 Speaker 3: we don't have the means to make all of the 155 00:08:01,760 --> 00:08:04,480 Speaker 3: stuff that we need or that Ukraine needs. That this 156 00:08:04,560 --> 00:08:09,600 Speaker 3: has become a manufacturing chain problem, and we're not talking 157 00:08:09,640 --> 00:08:12,200 Speaker 3: about that in this legislation. Are we have sixty billion 158 00:08:12,240 --> 00:08:15,520 Speaker 3: dollars went out to our defense contractors here, what could 159 00:08:15,560 --> 00:08:16,000 Speaker 3: they do with it? 160 00:08:16,320 --> 00:08:20,320 Speaker 4: Well, of course there are a variety of assets that 161 00:08:20,440 --> 00:08:24,440 Speaker 4: are available that just need the funding to deliver it there. 162 00:08:24,800 --> 00:08:27,280 Speaker 4: But what you're really referring to, of course, is the 163 00:08:27,320 --> 00:08:32,120 Speaker 4: manufacturing of ALAS stuff, which is what they're what they're 164 00:08:32,160 --> 00:08:36,280 Speaker 4: asking for, as well as puit long range precision munitions. 165 00:08:37,520 --> 00:08:39,280 Speaker 4: You know, a little over a year ago I was 166 00:08:39,320 --> 00:08:41,360 Speaker 4: speaking to a gentleman in the Pentagon and he said, 167 00:08:41,400 --> 00:08:44,520 Speaker 4: we make about eight thousand rounds per month because that's 168 00:08:44,520 --> 00:08:46,960 Speaker 4: what we need for our own training. In less than 169 00:08:46,960 --> 00:08:51,120 Speaker 4: a year, they quadrupled that number just by making it 170 00:08:51,160 --> 00:08:53,080 Speaker 4: a priority and putting money on it. So the various 171 00:08:53,120 --> 00:08:57,840 Speaker 4: companies that make ammunition expanded their capacity, and you know, 172 00:08:57,960 --> 00:09:01,360 Speaker 4: I heard Senator Vancey of A said that America doesn't 173 00:09:01,440 --> 00:09:04,720 Speaker 4: have the capacity to make more. This is the United 174 00:09:04,720 --> 00:09:08,720 Speaker 4: States of America and he's from Ohio. That they, of 175 00:09:08,760 --> 00:09:12,560 Speaker 4: course there's industrial capacity. Is there enough political will to 176 00:09:12,640 --> 00:09:13,599 Speaker 4: do it? 177 00:09:13,600 --> 00:09:16,480 Speaker 3: Remains a big question around here, and the Europeans are 178 00:09:16,480 --> 00:09:19,400 Speaker 3: looking across the ocean wondering if we're going to. 179 00:09:19,400 --> 00:09:20,000 Speaker 2: Make good on this. 180 00:09:20,080 --> 00:09:22,400 Speaker 3: At the same time, they've been slow to deliver shells 181 00:09:22,480 --> 00:09:25,760 Speaker 3: to Ukraine. Can Ukraine count on its nearest neighbors. 182 00:09:25,960 --> 00:09:28,920 Speaker 4: It's an excellent point and it's a fair criticism of 183 00:09:28,920 --> 00:09:34,200 Speaker 4: our European allies. But even Chancellor Schultz, the German bundhist 184 00:09:34,240 --> 00:09:37,400 Speaker 4: councilor just a couple of weeks ago, was out there 185 00:09:37,400 --> 00:09:40,480 Speaker 4: at a groundbreaking ceremony for a new ammunition plant in Germany. 186 00:09:40,559 --> 00:09:42,719 Speaker 4: Now here's a guy that, nowhere in his past did 187 00:09:42,720 --> 00:09:45,640 Speaker 4: he ever imagine he would be celebrating the opening of 188 00:09:45,679 --> 00:09:50,040 Speaker 4: a new ammunition factory inside Germany. They're actually, I think 189 00:09:50,160 --> 00:09:54,040 Speaker 4: is a lot of ammunition in Europe, but it needs 190 00:09:54,040 --> 00:09:57,880 Speaker 4: to be reprioritized. You remember the European Union announced they 191 00:09:57,880 --> 00:10:01,559 Speaker 4: we're going to find a million rounds to to Ukraine. 192 00:10:01,760 --> 00:10:04,800 Speaker 4: They've delivered three hundred thousand so far. It turns out 193 00:10:04,960 --> 00:10:07,760 Speaker 4: about seventy percent of what is made in Europe goes 194 00:10:07,760 --> 00:10:10,880 Speaker 4: to customers outside of Europe. So now heads of government 195 00:10:10,920 --> 00:10:12,680 Speaker 4: need to reprioritize what they have. 196 00:10:13,040 --> 00:10:16,120 Speaker 3: They're still asking for long range missiles. I know that 197 00:10:16,160 --> 00:10:18,720 Speaker 3: the Germans have been kind of on again, off again 198 00:10:18,840 --> 00:10:21,439 Speaker 3: with this idea. Is there anything that we can do 199 00:10:21,760 --> 00:10:24,200 Speaker 3: when it comes to advanced weaponry to help them right now? 200 00:10:24,440 --> 00:10:29,720 Speaker 4: Yes, the long range precision strike capability such as the 201 00:10:29,760 --> 00:10:33,360 Speaker 4: American attack Ems or the German Taurus, the British storms 202 00:10:33,360 --> 00:10:36,920 Speaker 4: shadow that there is no one weapon that changes everything. 203 00:10:37,760 --> 00:10:43,280 Speaker 4: But every square inch of Russian occupied Ukraine is inside 204 00:10:43,559 --> 00:10:46,360 Speaker 4: the range of a USA tackles. So, in other words, 205 00:10:46,559 --> 00:10:51,120 Speaker 4: every Russian headquarters, every Russian artillery, every Russian logistics site 206 00:10:51,440 --> 00:10:55,280 Speaker 4: could be hit. There's nowhere to hide, could be hit 207 00:10:55,600 --> 00:10:59,360 Speaker 4: if Ukrainians had that capability. You know, for whatever reason, 208 00:10:59,400 --> 00:11:03,360 Speaker 4: the United States this administration has continued to refuse to 209 00:11:03,400 --> 00:11:07,720 Speaker 4: provide that three hundred kilometer range A tackms. The Germans 210 00:11:07,720 --> 00:11:09,560 Speaker 4: are hiding behind that a little bit. 211 00:11:09,720 --> 00:11:13,000 Speaker 3: Yeah, that would be more effective than something like an 212 00:11:13,040 --> 00:11:14,280 Speaker 3: F sixteen for Ukraine. 213 00:11:14,360 --> 00:11:14,640 Speaker 2: Right now? 214 00:11:14,640 --> 00:11:17,880 Speaker 4: What did I Well, certainly it would make a huge difference. 215 00:11:18,000 --> 00:11:21,640 Speaker 4: Right now, the F sixteens showing up. Probably I think 216 00:11:21,679 --> 00:11:25,640 Speaker 4: we'll see Midsommers is when the Ukrainians will be ready 217 00:11:25,679 --> 00:11:27,840 Speaker 4: to employ them. It's one thing to fly on, but 218 00:11:27,920 --> 00:11:31,240 Speaker 4: to employ them effectively like our great Air Force does. Yes, 219 00:11:31,520 --> 00:11:33,040 Speaker 4: you know that's an operation. 220 00:11:33,440 --> 00:11:35,679 Speaker 2: Abrams tanks are rolling. I saw a video of one 221 00:11:35,679 --> 00:11:37,079 Speaker 2: of them on the ground in Ukraine. 222 00:11:37,320 --> 00:11:39,800 Speaker 3: Remember the argument at one point was this will not help, 223 00:11:39,840 --> 00:11:41,600 Speaker 3: this will only slow them down. You've got a jet 224 00:11:41,640 --> 00:11:44,040 Speaker 3: engine in this thing. You can't afford the fuel. Has 225 00:11:44,080 --> 00:11:46,040 Speaker 3: it been a benefit or do we not know yet? 226 00:11:46,160 --> 00:11:49,200 Speaker 4: Well, of course it was a whopping thirty one that 227 00:11:49,280 --> 00:11:53,319 Speaker 4: were provided. So now thirty one Abrams tanks you get 228 00:11:53,320 --> 00:11:56,520 Speaker 4: thirty one of the best tank in the world. But 229 00:11:56,880 --> 00:12:00,800 Speaker 4: again this goes back to the is the objective? 230 00:12:00,880 --> 00:12:01,080 Speaker 2: You know? 231 00:12:01,280 --> 00:12:06,680 Speaker 4: The administration Deli dalaied for months and months and months 232 00:12:06,679 --> 00:12:11,120 Speaker 4: about whether or not to do it, and I heard 233 00:12:11,200 --> 00:12:14,040 Speaker 4: I heard so many criticisms of the Abrams tank. Oh, 234 00:12:14,080 --> 00:12:16,400 Speaker 4: it's so much fuel, it's so much maintenance, And I thought, well, 235 00:12:16,400 --> 00:12:19,160 Speaker 4: why the hell do we have four thousand of them 236 00:12:19,160 --> 00:12:23,440 Speaker 4: in the US Army. Sorry, it is a great tank, 237 00:12:23,720 --> 00:12:25,400 Speaker 4: but you don't just take it off the shelf and 238 00:12:25,480 --> 00:12:28,800 Speaker 4: use it. There is maintenance required in training to get 239 00:12:28,840 --> 00:12:33,480 Speaker 4: the full benefit of that of that great tank. What 240 00:12:33,679 --> 00:12:36,640 Speaker 4: really matters is how is it employed by the Ukrainians. 241 00:12:36,640 --> 00:12:38,640 Speaker 4: And I'm sure that they'll pick the best place where 242 00:12:38,640 --> 00:12:39,800 Speaker 4: you get the most effect. 243 00:12:39,520 --> 00:12:40,040 Speaker 1: Out of it. 244 00:12:40,520 --> 00:12:43,280 Speaker 3: Just got about a minute left, General, we saw news 245 00:12:43,320 --> 00:12:46,560 Speaker 3: of a hypersonic missile being employed by Russia in Ukraine. 246 00:12:47,440 --> 00:12:51,400 Speaker 3: We're told that our patriot defense missile systems cannot catch those. 247 00:12:52,000 --> 00:12:54,600 Speaker 3: Is that a game changer if we start seeing more 248 00:12:54,679 --> 00:12:55,880 Speaker 3: use of that technology. 249 00:12:56,880 --> 00:13:00,280 Speaker 4: Well, first of all, I would never underestimate the of 250 00:13:00,320 --> 00:13:03,480 Speaker 4: the Ukrainians to take what they have and make it better. 251 00:13:03,760 --> 00:13:07,840 Speaker 4: I mean, we've provided things and then I like counterfire radar, 252 00:13:08,559 --> 00:13:10,440 Speaker 4: and I found out that radar was even better than 253 00:13:10,480 --> 00:13:12,640 Speaker 4: I knew it was well because they were able to 254 00:13:13,559 --> 00:13:14,920 Speaker 4: You know, if you're getting if you're geting attacked by 255 00:13:14,920 --> 00:13:17,920 Speaker 4: the Russians all day long, you get very innovative, very creative. 256 00:13:18,080 --> 00:13:21,679 Speaker 4: And Ukrainians are among the most tech savvy people I've 257 00:13:21,720 --> 00:13:25,400 Speaker 4: ever met in my life, So I think they will 258 00:13:25,400 --> 00:13:27,719 Speaker 4: figure out how to use what we provide, what the 259 00:13:27,760 --> 00:13:33,720 Speaker 4: Brits provide, and they'll be able to It's not about quality, 260 00:13:33,760 --> 00:13:35,320 Speaker 4: it's about quantity. They don't have enough. 261 00:13:36,120 --> 00:13:39,760 Speaker 3: I know you're typically living and working overseas, but you're 262 00:13:39,760 --> 00:13:42,240 Speaker 3: always welcome here in Washington. We're always very curious to 263 00:13:42,240 --> 00:13:45,880 Speaker 3: hear what you have to say. Are thoughtful, General Ben Hodges, 264 00:13:45,920 --> 00:13:46,960 Speaker 3: It's great to meet you in person. 265 00:13:46,960 --> 00:13:48,800 Speaker 2: Thank you for coming in. Thanks for the opportunity, of course, 266 00:13:48,880 --> 00:13:52,120 Speaker 2: great pleasure. I'm Jill Matthew and Washington. This is Balance 267 00:13:52,160 --> 00:13:58,079 Speaker 2: of Power. You're listening to the Bloomberg Balance of Power 268 00:13:58,160 --> 00:14:02,080 Speaker 2: podcast kinds just Live days at noon Eastern on Applecarplay 269 00:14:02,080 --> 00:14:04,520 Speaker 2: and then rod Oro with the Bloomberg Business Ad. You 270 00:14:04,520 --> 00:14:07,800 Speaker 2: can also listen live on Amazon Alexa from our flagship 271 00:14:07,840 --> 00:14:12,960 Speaker 2: New York station, Jo Say Alexa play Bloomberg eleven thirty. 272 00:14:14,080 --> 00:14:16,760 Speaker 3: The President will propose higher taxes on the wealthy and 273 00:14:16,880 --> 00:14:19,440 Speaker 3: businesses in his State of the Union address next week. 274 00:14:19,600 --> 00:14:22,320 Speaker 3: Welcome to the fastest show in politics, as Joe Biden 275 00:14:22,360 --> 00:14:24,800 Speaker 3: prepares to go to Camp David for the weekend to 276 00:14:24,880 --> 00:14:27,400 Speaker 3: punch up his address to a joint session of Congress. 277 00:14:27,440 --> 00:14:30,280 Speaker 3: After another round of economic data that could be key 278 00:14:30,320 --> 00:14:32,800 Speaker 3: to the outcome of this election. I'm Joe Matthew in 279 00:14:32,880 --> 00:14:35,440 Speaker 3: Washington alongside Kaylee Lions. It's good to see you, Kaylee. 280 00:14:35,440 --> 00:14:36,320 Speaker 3: You made it to Friday. 281 00:14:36,400 --> 00:14:38,320 Speaker 2: Happy Friday, and Friday tou. 282 00:14:38,440 --> 00:14:41,840 Speaker 3: We saw data this week encouraging I guess we could 283 00:14:41,920 --> 00:14:44,960 Speaker 3: say on inflation at least it hit targets sure, but 284 00:14:45,040 --> 00:14:47,880 Speaker 3: also today the first dropping consumer sentiment in four months. 285 00:14:48,240 --> 00:14:51,040 Speaker 5: Yeah, actually the biggest intra month drop because this was 286 00:14:51,080 --> 00:14:53,640 Speaker 5: the final read we got today, which dropped from the 287 00:14:53,640 --> 00:14:57,119 Speaker 5: preliminary read by almost three points. That's the biggest intermonth 288 00:14:57,400 --> 00:15:00,120 Speaker 5: intra month drop we've seen since March of twenty twenty. 289 00:15:00,160 --> 00:15:02,680 Speaker 5: And we all know what happened in March of twenty twenty. 290 00:15:02,720 --> 00:15:05,240 Speaker 5: That was the onset of the pandemic. So how much 291 00:15:05,240 --> 00:15:08,320 Speaker 5: of a concerning sign is that, especially as we're seeing 292 00:15:08,360 --> 00:15:10,960 Speaker 5: gas prices moving up. Oil hit eighty dollars a barrel 293 00:15:11,240 --> 00:15:13,600 Speaker 5: again on WTI for the first time since November. 294 00:15:13,600 --> 00:15:13,920 Speaker 4: Today. 295 00:15:13,960 --> 00:15:16,280 Speaker 3: Well, I'm glad to say we have the voice of 296 00:15:16,320 --> 00:15:18,040 Speaker 3: an expert joining us with the view of the White 297 00:15:18,040 --> 00:15:18,600 Speaker 3: House today. 298 00:15:18,920 --> 00:15:21,040 Speaker 5: Indeed we do. Jared Bernstein, in the chair of the 299 00:15:21,080 --> 00:15:23,840 Speaker 5: White House Council of Economic Advisors, is joining us now 300 00:15:23,920 --> 00:15:26,040 Speaker 5: live from the White House, North Lawn. 301 00:15:26,320 --> 00:15:26,600 Speaker 2: Jared. 302 00:15:26,640 --> 00:15:28,280 Speaker 5: Always good to have you on the show. Thank you 303 00:15:28,400 --> 00:15:30,480 Speaker 5: very much for joining us, mister chairman. When we look 304 00:15:30,480 --> 00:15:33,080 Speaker 5: at data like this which suggests that after a lot 305 00:15:33,080 --> 00:15:36,920 Speaker 5: of conversation about consumer sentiment being on the upswing, maybe 306 00:15:36,920 --> 00:15:40,760 Speaker 5: it is not actually that steady, perhaps not that sustainable, 307 00:15:41,480 --> 00:15:45,160 Speaker 5: potentially still a little bit vulnerable. Does that make you nervous? 308 00:15:46,840 --> 00:15:51,720 Speaker 6: Well, the three month consumer sentiment index is up almost 309 00:15:51,760 --> 00:15:56,880 Speaker 6: twenty five percent, and that is a much more reliable 310 00:15:56,960 --> 00:16:01,480 Speaker 6: trend than this wiggle we got off the movement from 311 00:16:01,560 --> 00:16:05,640 Speaker 6: the preliminary which was positive to the final which was negative. Look, 312 00:16:05,680 --> 00:16:08,360 Speaker 6: your point about the gas price is a good one, 313 00:16:08,440 --> 00:16:11,640 Speaker 6: and we're gonna have to keep watching this very carefully. 314 00:16:12,080 --> 00:16:16,080 Speaker 6: But I don't think anyone should change their view that 315 00:16:16,240 --> 00:16:20,920 Speaker 6: consumer sentiment consumer confidence has been moving in a pretty 316 00:16:20,920 --> 00:16:25,960 Speaker 6: reliable way, in a direction suggesting that economic improvements have 317 00:16:26,080 --> 00:16:28,040 Speaker 6: been reaching people in a way that they weren't a 318 00:16:28,040 --> 00:16:31,280 Speaker 6: few months ago. And those improvements, of course reflect easing 319 00:16:31,280 --> 00:16:35,440 Speaker 6: inflationary pressures, a strong job market, rising real wage growth, 320 00:16:35,720 --> 00:16:39,960 Speaker 6: very strong consumer spending in GDP. So any one month 321 00:16:40,040 --> 00:16:43,120 Speaker 6: can wiggle and bounce one way or another, but the 322 00:16:43,280 --> 00:16:46,160 Speaker 6: trend remains a solid in that regard. 323 00:16:47,320 --> 00:16:49,600 Speaker 2: We're hearing talk mister chairman. It's good to see you. 324 00:16:49,960 --> 00:16:52,840 Speaker 3: Welcome back of a world in which there are no 325 00:16:53,000 --> 00:16:54,680 Speaker 3: rate cuts. 326 00:16:54,040 --> 00:16:56,000 Speaker 2: In this calendar year. 327 00:16:56,160 --> 00:16:58,520 Speaker 3: You know, I wouldn't ask you about FED policy, but 328 00:16:58,600 --> 00:17:01,440 Speaker 3: I just wonder what that says about the strength of 329 00:17:01,480 --> 00:17:03,560 Speaker 3: this economy and whether it's a runaway train. 330 00:17:05,800 --> 00:17:07,480 Speaker 6: Well, I guess you have a lot of things going 331 00:17:07,520 --> 00:17:11,520 Speaker 6: in different directions here. I mean, we had some inflation 332 00:17:11,640 --> 00:17:14,239 Speaker 6: reports that came in above expectations, and then we had 333 00:17:14,280 --> 00:17:17,600 Speaker 6: an inflation report that hit expectations dead on. We had 334 00:17:17,600 --> 00:17:21,680 Speaker 6: a retail sales report that, if anything went the other way, 335 00:17:21,720 --> 00:17:25,119 Speaker 6: more cool than hot. We have a job numbers that 336 00:17:25,200 --> 00:17:28,560 Speaker 6: have been exceptionally strong. I think you really have to again, 337 00:17:28,640 --> 00:17:30,920 Speaker 6: I think it's really important to look at the underlying trend. 338 00:17:31,520 --> 00:17:34,000 Speaker 6: One of the most important is the unemployment rate that's 339 00:17:34,000 --> 00:17:37,679 Speaker 6: been below four percent for two years running. That's a 340 00:17:37,680 --> 00:17:42,080 Speaker 6: great number. It's supporting as I mentioned earlier, nominal wage 341 00:17:42,160 --> 00:17:45,920 Speaker 6: games that are beating inflation, so real wages up about 342 00:17:45,920 --> 00:17:49,000 Speaker 6: ten months in a row. Again, a pretty reliable trend there. 343 00:17:49,640 --> 00:17:52,920 Speaker 6: So one of my jobs is to, of course look 344 00:17:52,960 --> 00:17:55,200 Speaker 6: at carefully and get all kinds of nervous about the 345 00:17:55,240 --> 00:17:57,920 Speaker 6: high frequency data flow, but to really keep an eye 346 00:17:58,000 --> 00:18:01,320 Speaker 6: on the underlying momentum, which remains strong. 347 00:18:03,240 --> 00:18:06,359 Speaker 5: Well, you say the underlying momentum remains strong, you point 348 00:18:06,359 --> 00:18:09,600 Speaker 5: to the strength and the labor market specifically. When you 349 00:18:09,640 --> 00:18:12,120 Speaker 5: look at this economy, mister chairman, do you see any 350 00:18:12,160 --> 00:18:14,120 Speaker 5: sign of easing being necessary? 351 00:18:16,720 --> 00:18:19,119 Speaker 6: Well, I'm not going to get into what the Federal 352 00:18:19,160 --> 00:18:22,200 Speaker 6: Reserve should do with monetary policy. What I will say 353 00:18:22,400 --> 00:18:25,399 Speaker 6: is I just was looking at some of the forecasts 354 00:18:25,400 --> 00:18:29,199 Speaker 6: for Q one GDP and I've seen numbers that are 355 00:18:29,200 --> 00:18:31,919 Speaker 6: in the two percent range. Let's call that something like 356 00:18:32,000 --> 00:18:36,200 Speaker 6: trend growth. Now, look, the way these hydraulics work, as 357 00:18:36,240 --> 00:18:38,399 Speaker 6: you too well know, is that if the economy is 358 00:18:38,440 --> 00:18:41,720 Speaker 6: growing a trend, the unemployment rate tends to stay around 359 00:18:41,720 --> 00:18:44,760 Speaker 6: where it is. And again, my very broad theory of 360 00:18:44,800 --> 00:18:47,359 Speaker 6: the case is that as labor market remains strong and 361 00:18:47,400 --> 00:18:52,359 Speaker 6: inflation continues to ease again, on trend continues to ease. 362 00:18:52,400 --> 00:18:55,679 Speaker 6: And that too, by the way, is a very reliable forecast. 363 00:18:56,840 --> 00:19:00,480 Speaker 6: Virtually every forecast I've seen has inflation continuing to east 364 00:19:00,480 --> 00:19:03,280 Speaker 6: throughout the year. That's a recipe for rising real wages. 365 00:19:03,320 --> 00:19:06,760 Speaker 6: Now on a comedy that's seventy percent consumer spending, that's 366 00:19:07,119 --> 00:19:10,960 Speaker 6: a good recipe for continued growth. I don't I'm not 367 00:19:11,000 --> 00:19:13,160 Speaker 6: going to say you know anything about what the Fed 368 00:19:13,200 --> 00:19:16,880 Speaker 6: should do there, but is that is and has been 369 00:19:17,560 --> 00:19:21,320 Speaker 6: a reliable recipe to keep things moving forward in a 370 00:19:21,320 --> 00:19:22,800 Speaker 6: good way for American households. 371 00:19:24,200 --> 00:19:26,480 Speaker 3: Jared, I'm sure you're looking forward to the State of 372 00:19:26,520 --> 00:19:28,399 Speaker 3: the Union addressed. This is a big week ahead for 373 00:19:28,400 --> 00:19:30,040 Speaker 3: the White House. I don't know to what extent you're 374 00:19:30,080 --> 00:19:35,840 Speaker 3: involved in contributing to the framing of the economic argument 375 00:19:35,920 --> 00:19:38,600 Speaker 3: that the President is going to make next week, but 376 00:19:38,640 --> 00:19:41,760 Speaker 3: we're reporting that he's going to call for some familiar ideas, 377 00:19:41,840 --> 00:19:45,040 Speaker 3: higher taxes on the wealthy and businesses. There are some 378 00:19:45,119 --> 00:19:48,640 Speaker 3: other things that we can talk about outside of the economy. 379 00:19:48,680 --> 00:19:51,280 Speaker 3: But I wonder what it is that you're looking forward 380 00:19:51,320 --> 00:19:53,320 Speaker 3: to message to the American people next week. 381 00:19:55,119 --> 00:19:56,640 Speaker 6: One of the reasons I get to come out here 382 00:19:56,640 --> 00:19:58,120 Speaker 6: and talk to you is because I don't get ahead 383 00:19:58,119 --> 00:20:02,280 Speaker 6: of the President, and certainly I'm certainly not going to 384 00:20:02,320 --> 00:20:04,119 Speaker 6: do that when it comes to the State of the Union. 385 00:20:04,760 --> 00:20:07,560 Speaker 6: But what I can tell you is the last part 386 00:20:07,560 --> 00:20:09,520 Speaker 6: of your question is very much on point, which is 387 00:20:09,960 --> 00:20:12,440 Speaker 6: the message to the American people, not referring anything to 388 00:20:13,359 --> 00:20:15,080 Speaker 6: so too as we called it around here State of 389 00:20:15,080 --> 00:20:20,520 Speaker 6: the Union, but just the ongoing economic recovery. And I 390 00:20:20,560 --> 00:20:24,080 Speaker 6: guess I do think that this narrative tends to get 391 00:20:24,600 --> 00:20:27,720 Speaker 6: lost in the hurly burly of the everyday news flow, 392 00:20:27,880 --> 00:20:31,080 Speaker 6: which I understand. I'm part of it, so are you sure? 393 00:20:31,080 --> 00:20:34,479 Speaker 6: And we get it. But let's pull back a second 394 00:20:34,480 --> 00:20:37,440 Speaker 6: and think about where we were and where we are. Okay, 395 00:20:37,640 --> 00:20:41,639 Speaker 6: were when we got here. The vaccination rate was about zero, 396 00:20:41,800 --> 00:20:44,800 Speaker 6: and we had a great vaccine, but it wasn't getting 397 00:20:44,840 --> 00:20:48,359 Speaker 6: out there. We had families and businesses looking really worried 398 00:20:48,359 --> 00:20:50,639 Speaker 6: about getting to the other side of the pandemic. The 399 00:20:50,680 --> 00:20:53,879 Speaker 6: President gets here, puts the rescue plan in place, gets 400 00:20:54,000 --> 00:20:57,520 Speaker 6: checks and pockets, shots and arms, massive improvement in the 401 00:20:57,600 --> 00:21:00,960 Speaker 6: vax rate, And here we are now, all these years later, 402 00:21:01,080 --> 00:21:04,119 Speaker 6: in the midst of a remarkable recovery, particularly in the 403 00:21:04,200 --> 00:21:07,119 Speaker 6: sense that people said we couldn't do it. I mean economists, 404 00:21:07,160 --> 00:21:10,320 Speaker 6: tony economists said we couldn't get the inflation rate down 405 00:21:10,359 --> 00:21:13,200 Speaker 6: by two thirds without giving up a bunch of points 406 00:21:13,200 --> 00:21:16,280 Speaker 6: on unemployment or on GDP. Well, I just told you 407 00:21:16,320 --> 00:21:19,000 Speaker 6: we had a GDP north of three percent in Q four, 408 00:21:19,280 --> 00:21:22,560 Speaker 6: tracking two percent in Q one. Unemployment we've talked about, 409 00:21:22,840 --> 00:21:25,320 Speaker 6: and all of this with inflation down two thirds off 410 00:21:25,359 --> 00:21:29,119 Speaker 6: of its peak. So I would consider this pretty remarkable recovery. Now, 411 00:21:29,160 --> 00:21:33,080 Speaker 6: for President Biden, it only matters if it's reaching families 412 00:21:33,119 --> 00:21:36,199 Speaker 6: at their kitchen tables, full stop. If I go in 413 00:21:36,240 --> 00:21:37,720 Speaker 6: and tell him, I go in the oval and tell 414 00:21:37,800 --> 00:21:40,400 Speaker 6: him about GDP in the stock market, he's gonna want 415 00:21:40,400 --> 00:21:42,840 Speaker 6: to know. For me, how is that helping families like 416 00:21:42,880 --> 00:21:45,360 Speaker 6: the one I grew up in, Jared, and I will 417 00:21:45,359 --> 00:21:47,960 Speaker 6: explain to him that we've got real wages growing for 418 00:21:48,040 --> 00:21:50,720 Speaker 6: middle wage workers, growing for low wage workers, and in 419 00:21:50,760 --> 00:21:52,639 Speaker 6: fact they're growing faster at the middle and the bottom 420 00:21:52,680 --> 00:21:55,760 Speaker 6: of the high end. So the economy is delivering the 421 00:21:55,800 --> 00:21:59,080 Speaker 6: goods to a lot of working families as prices ease. Now, 422 00:21:59,080 --> 00:22:01,800 Speaker 6: we've got more work to do, particularly on that price side, 423 00:22:02,080 --> 00:22:05,439 Speaker 6: but moving in the right direction, and sentiment indices starting 424 00:22:05,440 --> 00:22:07,560 Speaker 6: to reflect that well. 425 00:22:07,600 --> 00:22:10,080 Speaker 5: So on the price side, given everything that you just 426 00:22:10,160 --> 00:22:13,159 Speaker 5: told us about how wages have increased, the consumption engine 427 00:22:13,200 --> 00:22:17,960 Speaker 5: is still very much chugging along. GDP growth stronger than expected. 428 00:22:18,000 --> 00:22:21,520 Speaker 5: All of that indicates that the demand is not going 429 00:22:21,560 --> 00:22:25,280 Speaker 5: down in the way that perhaps was intended originally. And 430 00:22:25,320 --> 00:22:27,520 Speaker 5: I just wonder how great of a risk do you 431 00:22:27,720 --> 00:22:31,520 Speaker 5: think there is of a reacceleration in price pressures because 432 00:22:31,560 --> 00:22:35,320 Speaker 5: demand has been so strong, Can you rule out that 433 00:22:35,359 --> 00:22:37,120 Speaker 5: we will see another upswing in inflation? 434 00:22:38,440 --> 00:22:40,960 Speaker 6: Well, I think one of the things that we often do, 435 00:22:41,080 --> 00:22:45,639 Speaker 6: and again it's understandable, especially with the high frequency reporting 436 00:22:45,680 --> 00:22:50,600 Speaker 6: and scrutinizing every data report, is that we're looking at 437 00:22:50,600 --> 00:22:53,800 Speaker 6: all these bank shots. If a happens, what will be 438 00:22:53,840 --> 00:22:56,800 Speaker 6: in seeming for inflation. Sorry, we've got some noise in 439 00:22:56,840 --> 00:22:57,560 Speaker 6: the background. 440 00:23:00,000 --> 00:23:02,280 Speaker 5: Biness goes on at the White House. We understand sir. 441 00:23:03,320 --> 00:23:05,520 Speaker 6: We love to see working people at work around here. 442 00:23:06,720 --> 00:23:09,760 Speaker 6: One of THESA what I think we have to keep 443 00:23:09,760 --> 00:23:13,560 Speaker 6: in mind is that the best indicator of inflation is inflation. 444 00:23:13,880 --> 00:23:14,280 Speaker 4: All right. 445 00:23:14,400 --> 00:23:15,880 Speaker 6: There are a lot of bank shots and a lot 446 00:23:15,880 --> 00:23:20,440 Speaker 6: of ways demand can play through this. But our own 447 00:23:20,480 --> 00:23:23,280 Speaker 6: analysis at the CEA has been quite clear, and I 448 00:23:23,280 --> 00:23:26,320 Speaker 6: think this is largely confirmed by many other economists who 449 00:23:26,320 --> 00:23:29,160 Speaker 6: have looked carefully at this, is that the disinflation we've 450 00:23:29,200 --> 00:23:31,840 Speaker 6: achieved thus far has largely come from improvements on the 451 00:23:31,840 --> 00:23:35,680 Speaker 6: economy supply side. In fact, that's almost axiomatic. When you 452 00:23:35,720 --> 00:23:38,639 Speaker 6: think of inflation easing two thirds off of its peak 453 00:23:38,640 --> 00:23:40,879 Speaker 6: without giving much on the demand side, It kind of 454 00:23:40,880 --> 00:23:44,440 Speaker 6: almost has to be supply side contributions. And our own 455 00:23:44,480 --> 00:23:48,199 Speaker 6: work explains about eighty percent of the disinflation through supply 456 00:23:48,359 --> 00:23:51,480 Speaker 6: chain on snarling through improvements in the labor force. In 457 00:23:51,560 --> 00:23:54,480 Speaker 6: terms of labor supply, we think there's still more room 458 00:23:54,560 --> 00:23:56,760 Speaker 6: to run there. So it's not enough to just look 459 00:23:56,760 --> 00:23:58,560 Speaker 6: at the demand side of equation. You have to look 460 00:23:58,560 --> 00:24:00,600 Speaker 6: at the supply side as well, and you have to 461 00:24:00,600 --> 00:24:02,760 Speaker 6: look end of the day, beginning of the day, middle 462 00:24:02,800 --> 00:24:04,600 Speaker 6: of the day. Look at the inflation in the k 463 00:24:04,800 --> 00:24:09,800 Speaker 6: switch again, have been easing solidly with a bump here 464 00:24:09,880 --> 00:24:11,200 Speaker 6: or there in any given month. 465 00:24:13,160 --> 00:24:17,200 Speaker 3: I had an interesting encounter with Tom Swazi earlier this week, 466 00:24:18,320 --> 00:24:21,280 Speaker 3: mister Chairman, the newest Democrat in the House of Representatives. 467 00:24:21,280 --> 00:24:23,639 Speaker 2: He was sworn in Wednesday evening. 468 00:24:23,680 --> 00:24:26,000 Speaker 3: This of course is George Santos's former seat, and he 469 00:24:26,080 --> 00:24:28,199 Speaker 3: was asked by many of the folks who were there 470 00:24:28,240 --> 00:24:30,879 Speaker 3: about how did he win? And he was talking mainly 471 00:24:30,920 --> 00:24:33,320 Speaker 3: about the economy a little bit about the border as well, 472 00:24:33,359 --> 00:24:38,440 Speaker 3: but he seemed to have a sense of what drives 473 00:24:38,480 --> 00:24:42,919 Speaker 3: the angst, the frustration in many cases, the anger behind 474 00:24:42,960 --> 00:24:46,600 Speaker 3: the MAGA movement, donald Trump supporters and many Republican voters 475 00:24:46,640 --> 00:24:48,840 Speaker 3: around the country. And he pointed to wages as the 476 00:24:48,880 --> 00:24:52,359 Speaker 3: first thing. You make seven dollars ten dollars minimum wage, 477 00:24:52,400 --> 00:24:54,399 Speaker 3: even fifteen dollars an hour, that means you're not pulling 478 00:24:54,400 --> 00:24:56,720 Speaker 3: in more than twenty or thirty grand a year. You 479 00:24:56,760 --> 00:25:00,320 Speaker 3: could hardly afford to live. It's impossible to get creancy. 480 00:25:00,400 --> 00:25:03,520 Speaker 3: You can send your kids to college, secure your family. 481 00:25:03,840 --> 00:25:06,280 Speaker 3: And he said that is the root of all of this. 482 00:25:06,440 --> 00:25:09,520 Speaker 3: What's the message to those voters who are looking to 483 00:25:09,640 --> 00:25:10,920 Speaker 3: Donald Trump for relief? 484 00:25:13,480 --> 00:25:15,680 Speaker 6: I think he asked, you really have to ask yourself 485 00:25:15,800 --> 00:25:19,040 Speaker 6: who's fighting for whom. I think we saw this contrast 486 00:25:19,040 --> 00:25:23,800 Speaker 6: to the border yesterday. This president is consistently fighting to 487 00:25:23,960 --> 00:25:27,480 Speaker 6: solve the challenges that we face right now. I think 488 00:25:27,520 --> 00:25:31,600 Speaker 6: his track record in challenge solving on the economy is 489 00:25:31,680 --> 00:25:34,320 Speaker 6: extremely strong. That's what we've been talking about for the 490 00:25:34,400 --> 00:25:37,960 Speaker 6: last few minutes here. But I think the larger issue here, 491 00:25:37,960 --> 00:25:44,560 Speaker 6: and answer your question, is which person which administration is 492 00:25:44,600 --> 00:25:48,200 Speaker 6: going out there and trying to solve exactly the problem 493 00:25:48,280 --> 00:25:53,000 Speaker 6: that newly minted Congressman Swazi was identifying. This president wakes 494 00:25:53,080 --> 00:25:55,879 Speaker 6: up every day trying to figure out new ways to 495 00:25:56,040 --> 00:25:58,800 Speaker 6: help families like the one he grew up in. Most 496 00:25:58,840 --> 00:26:02,480 Speaker 6: recently that's been about lowering prices, going after junk fees, 497 00:26:02,840 --> 00:26:07,760 Speaker 6: actually legislating lower prices for prescription drugs for health coverage. 498 00:26:08,359 --> 00:26:11,800 Speaker 6: The opposition wants to take that legislation away. They want 499 00:26:11,840 --> 00:26:14,600 Speaker 6: to repeel it. Now, if you repeal something that's putting 500 00:26:14,640 --> 00:26:18,280 Speaker 6: downward pressure on costs, guess what those pressures reverse and 501 00:26:18,320 --> 00:26:20,879 Speaker 6: they go up. So I think it's a very clear 502 00:26:20,960 --> 00:26:25,000 Speaker 6: matter of who's fighting for whom and who is essentially 503 00:26:25,920 --> 00:26:33,040 Speaker 6: trying to create a sense of chaos and and dysfunction. 504 00:26:33,680 --> 00:26:37,400 Speaker 6: This president is all about good, solid governance on behalf 505 00:26:37,640 --> 00:26:40,040 Speaker 6: of working families, and he's got a track record to 506 00:26:40,080 --> 00:26:42,840 Speaker 6: prove it. And we've got some great unfinished business in 507 00:26:42,880 --> 00:26:45,000 Speaker 6: the areas of housing, in the area of childcare and 508 00:26:45,040 --> 00:26:47,840 Speaker 6: their lower costs that we'd like to keep working. 509 00:26:47,520 --> 00:26:51,600 Speaker 5: On well, and the ability to continue working on that 510 00:26:51,640 --> 00:26:55,120 Speaker 5: will obviously depend on the outcome of the election in November. 511 00:26:55,119 --> 00:26:57,879 Speaker 5: And on that note, Bloomberg together with Morning Consule, just 512 00:26:58,680 --> 00:27:01,520 Speaker 5: released a survey yesterday of the swing stage which shows 513 00:27:01,520 --> 00:27:04,280 Speaker 5: Biden is behind Trump and all seven of those that 514 00:27:04,359 --> 00:27:07,080 Speaker 5: we pulled, and on the issue of the economy, almost 515 00:27:07,119 --> 00:27:09,960 Speaker 5: consistently in every state within the data, the feeling of 516 00:27:10,040 --> 00:27:12,600 Speaker 5: the national economy is much worse than the feeling of 517 00:27:12,640 --> 00:27:15,520 Speaker 5: the state economy or the local economy. As you get 518 00:27:15,560 --> 00:27:18,000 Speaker 5: closer to home, people actually feel better. How do you 519 00:27:18,040 --> 00:27:22,640 Speaker 5: make the rest that resonate nationally? How does what can 520 00:27:22,680 --> 00:27:25,199 Speaker 5: the White House do to make the feeling about the 521 00:27:25,240 --> 00:27:28,080 Speaker 5: economy as a whole better if it's not so bad 522 00:27:28,320 --> 00:27:29,919 Speaker 5: when you're just looking at your neighborhood. 523 00:27:32,560 --> 00:27:34,960 Speaker 6: Well, first of all, let me just say that the 524 00:27:35,000 --> 00:27:38,480 Speaker 6: poll that matters the most is the one which happens 525 00:27:38,480 --> 00:27:42,840 Speaker 6: when folks pull the lever or fill in the voting forms, 526 00:27:43,200 --> 00:27:49,800 Speaker 6: and those polls have consistently favored Democrats. What I would 527 00:27:49,800 --> 00:27:54,040 Speaker 6: say is that we have to keep our heads down, 528 00:27:54,320 --> 00:27:58,440 Speaker 6: not pay, not get overly absorbed in the ups and 529 00:27:58,480 --> 00:28:02,120 Speaker 6: downs of the kind of polls you just mentioned, which 530 00:28:02,119 --> 00:28:04,480 Speaker 6: have proven to be pretty unreliable, I think when it 531 00:28:04,520 --> 00:28:08,040 Speaker 6: comes to actual voting behavior, and focus on very much 532 00:28:08,520 --> 00:28:11,600 Speaker 6: what we've accomplished and what we intend to continue to accomplish. 533 00:28:11,960 --> 00:28:14,000 Speaker 6: When we got here, we had an unemployment rate that 534 00:28:14,080 --> 00:28:17,600 Speaker 6: was unacceptably high. And the very first speech economic speech 535 00:28:17,640 --> 00:28:20,199 Speaker 6: with the President gab he talked about the importance of 536 00:28:20,200 --> 00:28:22,840 Speaker 6: getting back to full employment. Well he did that. He 537 00:28:22,880 --> 00:28:26,159 Speaker 6: got back to full employment very quickly, historically clicking, and 538 00:28:26,240 --> 00:28:29,560 Speaker 6: we've stayed there. While we've stayed there, we've managed to 539 00:28:29,600 --> 00:28:33,040 Speaker 6: work on improving the economy's supply side and unsnarl some 540 00:28:33,119 --> 00:28:36,679 Speaker 6: of those chains, helping to increase labor supply, helping to 541 00:28:36,720 --> 00:28:40,000 Speaker 6: increase the flow of goods into our retail sector, and 542 00:28:40,040 --> 00:28:44,600 Speaker 6: that's helped to ease inflation significantly. Meanwhile, he's legislated historic 543 00:28:44,680 --> 00:28:47,960 Speaker 6: investments in the future, in clean energy, in lower health 544 00:28:48,000 --> 00:28:52,640 Speaker 6: care costs, in domestic production of semiconductors, domestic production of 545 00:28:52,680 --> 00:28:56,959 Speaker 6: EV cars and batteries. So it's a fantastic track record 546 00:28:57,000 --> 00:28:59,040 Speaker 6: and it's one we will continue to talk about. 547 00:28:59,240 --> 00:28:59,440 Speaker 1: Now. 548 00:29:00,320 --> 00:29:03,440 Speaker 6: If you want to talk about some indices, you know, 549 00:29:03,480 --> 00:29:06,760 Speaker 6: I would argue that a good question three or four 550 00:29:06,800 --> 00:29:10,040 Speaker 6: months ago is why isn't everything you're telling me, Jared 551 00:29:10,120 --> 00:29:13,240 Speaker 6: reaching the consumer sentiment indexes? But you can't make that 552 00:29:13,600 --> 00:29:17,600 Speaker 6: argument so strongly anymore. We have the eumish sentiments up. 553 00:29:17,640 --> 00:29:20,560 Speaker 6: Even with today's slip, it's up twenty five percent over 554 00:29:20,560 --> 00:29:24,120 Speaker 6: the past three months. So it looks to me like 555 00:29:24,800 --> 00:29:27,040 Speaker 6: the progress that we're made is actually starting to be 556 00:29:27,080 --> 00:29:29,360 Speaker 6: felt by more and more consumers. We're going to keep 557 00:29:29,360 --> 00:29:31,760 Speaker 6: our head down and do all we can to continue 558 00:29:31,760 --> 00:29:32,720 Speaker 6: to move in that direction. 559 00:29:34,200 --> 00:29:36,680 Speaker 5: And Jared, final question for you. You've been very generous 560 00:29:36,760 --> 00:29:39,160 Speaker 5: with your time today, sir, and we appreciate it. But 561 00:29:39,240 --> 00:29:42,600 Speaker 5: other news today comes from commercial real estate lender New 562 00:29:42,640 --> 00:29:46,600 Speaker 5: York Community Bank Corp plunging again, saying it discovered material 563 00:29:46,680 --> 00:29:50,680 Speaker 5: weaknesses in how it tracks loan risks. Obviously, there are 564 00:29:50,680 --> 00:29:55,240 Speaker 5: some idiosyncratic factors at play here, specifically for NYCB, but 565 00:29:55,480 --> 00:29:57,800 Speaker 5: to what extent is the White House concern more generally 566 00:29:58,280 --> 00:30:01,120 Speaker 5: about commercial real estate right now broader knock on effects 567 00:30:01,120 --> 00:30:02,560 Speaker 5: that could have for the banking system. 568 00:30:03,200 --> 00:30:06,800 Speaker 6: CII has been on our watch list at CEA for 569 00:30:06,880 --> 00:30:09,400 Speaker 6: a long time now, so this is not a new 570 00:30:09,440 --> 00:30:13,640 Speaker 6: thing at all. What we try to do is get 571 00:30:14,480 --> 00:30:17,880 Speaker 6: away from any particular case, and especially commenting on any 572 00:30:17,920 --> 00:30:21,360 Speaker 6: particular case. We don't want to influence market moves at 573 00:30:21,400 --> 00:30:24,280 Speaker 6: all in this regard. What we're looking at is what 574 00:30:24,320 --> 00:30:28,320 Speaker 6: we're looking at is the impact on the economy, the dynamics, 575 00:30:28,800 --> 00:30:30,520 Speaker 6: the narrative that you and I have been discussing for 576 00:30:30,560 --> 00:30:33,320 Speaker 6: the last few minutes out here, and what we see 577 00:30:33,480 --> 00:30:38,040 Speaker 6: are bank, household and corporate balance sheets all looking pretty strong. 578 00:30:38,400 --> 00:30:45,160 Speaker 6: Now there's been some increases in debt accumulation, there's been 579 00:30:45,200 --> 00:30:48,520 Speaker 6: some increases in some default rates, but many of those, 580 00:30:48,560 --> 00:30:50,440 Speaker 6: if you look at them historically, they're kind of coming 581 00:30:50,480 --> 00:30:52,600 Speaker 6: off the mat. They're back to around where they were 582 00:30:52,640 --> 00:30:56,080 Speaker 6: pre pandemic. I think from our perspective, the most important 583 00:30:56,080 --> 00:30:59,040 Speaker 6: thing is are those balance sheets as such that we 584 00:30:59,120 --> 00:31:02,280 Speaker 6: think that the risk of systemic contagion is quite low, 585 00:31:02,520 --> 00:31:04,760 Speaker 6: and I would argue that they are. If you look 586 00:31:04,760 --> 00:31:06,560 Speaker 6: at the debt service that folks are paying as a 587 00:31:06,600 --> 00:31:09,800 Speaker 6: share of their income, it still looks quite low, and 588 00:31:10,120 --> 00:31:12,480 Speaker 6: that gives us some faith that we're in a good 589 00:31:12,480 --> 00:31:14,480 Speaker 6: place with the buffers to absorb what we're seeing. 590 00:31:15,760 --> 00:31:18,000 Speaker 3: Mister Chairman, I feel like you brought us outside for 591 00:31:18,080 --> 00:31:19,160 Speaker 3: outdoor class today. 592 00:31:19,160 --> 00:31:21,360 Speaker 2: I feel like I'm back on Boston Common. It looks 593 00:31:21,400 --> 00:31:23,840 Speaker 2: like a beautiful one on the north lawn. Thank you 594 00:31:23,960 --> 00:31:26,400 Speaker 2: for the seminar and for always being so generous. With 595 00:31:26,480 --> 00:31:26,840 Speaker 2: your time. 596 00:31:27,560 --> 00:31:29,800 Speaker 3: Jared Bernstein is Chair of the White House Counsel of 597 00:31:29,800 --> 00:31:30,840 Speaker 3: Economic Advisors. 598 00:31:30,880 --> 00:31:35,040 Speaker 2: Deep dive hear Thanks for listening to the Balance of 599 00:31:35,080 --> 00:31:36,040 Speaker 2: Power podcast. 600 00:31:36,640 --> 00:31:40,320 Speaker 3: Make sure to subscribe if you haven't already, at Apple, Spotify. 601 00:31:39,880 --> 00:31:41,920 Speaker 2: Or wherever you get your podcasts, and 602 00:31:42,000 --> 00:31:44,600 Speaker 3: You can find us live every weekday from Washington, DC 603 00:31:44,760 --> 00:31:47,440 Speaker 3: at noontime Eastern at Bloomberg dot com.