1 00:00:00,880 --> 00:00:04,360 Speaker 1: You're listening to the Bloomberg Sound on podcast Catch us 2 00:00:04,400 --> 00:00:07,520 Speaker 1: Live weekdays at one Eastern on Bloomberg dot com, the 3 00:00:07,640 --> 00:00:10,760 Speaker 1: iHeartRadio app and the Bloomberg Business app, or listening on 4 00:00:10,800 --> 00:00:12,800 Speaker 1: demand wherever you get your podcasts. 5 00:00:13,680 --> 00:00:15,800 Speaker 2: An interesting week here. First of all, if you weren't 6 00:00:15,840 --> 00:00:19,560 Speaker 2: watching Bloomberg TV yesterday on Balance of Power, you might 7 00:00:19,600 --> 00:00:21,280 Speaker 2: not know that Kaylee was in front of the Federal 8 00:00:21,280 --> 00:00:23,680 Speaker 2: courthouse when the indictment was dropped. And I suspect you're 9 00:00:23,680 --> 00:00:25,320 Speaker 2: going to be there again at four o'clock tomorrow when 10 00:00:25,320 --> 00:00:26,439 Speaker 2: the former president arrives. 11 00:00:26,640 --> 00:00:29,760 Speaker 3: Oh yes, probably the hours before and after as well, 12 00:00:29,800 --> 00:00:33,640 Speaker 3: for all of the security and people watching that will 13 00:00:33,680 --> 00:00:35,600 Speaker 3: likely take place, just as it did in Miami with 14 00:00:35,680 --> 00:00:39,440 Speaker 3: the first federal arraement the President Trump had to go through. 15 00:00:39,520 --> 00:00:42,080 Speaker 3: So tomorrow will be an interesting day. Of course. When 16 00:00:42,080 --> 00:00:44,159 Speaker 3: I was standing outside that courthouse, I was scrolling as 17 00:00:44,159 --> 00:00:46,520 Speaker 3: fast as my thumb could possibly scroll on my phone 18 00:00:46,560 --> 00:00:52,360 Speaker 3: through forty five page indictment with these four accounts including conspiracy, 19 00:00:53,400 --> 00:00:57,120 Speaker 3: fraud against the US, conspiracy against the right to vote 20 00:00:57,160 --> 00:01:00,920 Speaker 3: and the right to have one's vote counted. And once 21 00:01:00,960 --> 00:01:04,319 Speaker 3: again we're talking about the legal troubles stacking. 22 00:01:03,960 --> 00:01:07,520 Speaker 2: Up for the former president Special Council Jack Smith shortly 23 00:01:07,640 --> 00:01:09,280 Speaker 2: after the indictment was unsealed. 24 00:01:09,319 --> 00:01:12,720 Speaker 4: The attack on our nation's capital on January sixth, twenty 25 00:01:12,880 --> 00:01:16,480 Speaker 4: twenty one, was an unprecedented assault on the seat of 26 00:01:16,520 --> 00:01:20,600 Speaker 4: American democracy. It's described in the indictment. It was fueled 27 00:01:20,680 --> 00:01:25,080 Speaker 4: by lies, lies by the defendant targeted at obstructing a 28 00:01:25,120 --> 00:01:30,480 Speaker 4: bedrock function of the US government, the nation's process of collecting, counting, 29 00:01:30,640 --> 00:01:34,039 Speaker 4: and certifying the results of the presidential election. 30 00:01:34,200 --> 00:01:37,839 Speaker 2: Let's bringing Eric Larson, Bloomberg legal reporter, who's been helping 31 00:01:37,840 --> 00:01:40,920 Speaker 2: to lead our coverage on this for some time now, 32 00:01:40,959 --> 00:01:43,360 Speaker 2: and now at a third indictment. Eric, we welcome you 33 00:01:43,440 --> 00:01:45,880 Speaker 2: on what I'm sure is another busy day. What's going 34 00:01:45,920 --> 00:01:48,440 Speaker 2: to happen when Donald Trump comes to Washington tomorrow. 35 00:01:48,840 --> 00:01:51,480 Speaker 5: Well, it's going to be a surface at Back Court House, 36 00:01:51,520 --> 00:01:54,680 Speaker 5: as you can imagine. I think we're anticipating that the 37 00:01:54,760 --> 00:01:57,520 Speaker 5: hearing at four o'clock is going to be pretty short. 38 00:01:58,400 --> 00:02:03,640 Speaker 5: He's going to be arraigned person. He'll enter his initial plea, 39 00:02:03,800 --> 00:02:07,640 Speaker 5: of course, we expect that to be not guilty, and 40 00:02:08,760 --> 00:02:13,919 Speaker 5: then he'll leave. He's not going to be technically arrested 41 00:02:14,080 --> 00:02:18,320 Speaker 5: or told he'll be fingerprinted and then released on his 42 00:02:18,360 --> 00:02:19,400 Speaker 5: own recognisms. 43 00:02:20,680 --> 00:02:23,040 Speaker 3: And then do we have any indication of the timing 44 00:02:23,120 --> 00:02:25,239 Speaker 3: from that point on. I mean, we heard Jack Smith 45 00:02:25,440 --> 00:02:28,359 Speaker 3: yesterday saying he's seeking a speedy trial. But of course 46 00:02:28,360 --> 00:02:31,480 Speaker 3: there's other already set trial dates that the president is 47 00:02:31,520 --> 00:02:33,160 Speaker 3: facing in twenty twenty four. 48 00:02:33,520 --> 00:02:36,840 Speaker 5: Yeah, indeed, we don't know that yet. We probably will 49 00:02:36,880 --> 00:02:40,120 Speaker 5: get some guidance on that pretty quickly, because the judge 50 00:02:40,120 --> 00:02:42,720 Speaker 5: will want to know and maybe get an idea. We 51 00:02:42,760 --> 00:02:45,000 Speaker 5: can look at the last federal indictment. Of course, the 52 00:02:45,040 --> 00:02:50,800 Speaker 5: records case down in Florida, the government ultimately ended up 53 00:02:50,840 --> 00:02:54,840 Speaker 5: seeking requesting a trial date about six months out from 54 00:02:54,919 --> 00:02:57,880 Speaker 5: when that indictment first hit. Of course, the judge in 55 00:02:57,880 --> 00:03:01,160 Speaker 5: that case ended up scheduling it further out from May. 56 00:03:01,320 --> 00:03:04,880 Speaker 5: But it's possible that they could request a trial as 57 00:03:04,919 --> 00:03:08,760 Speaker 5: soon as six months out. But it's unclear how that 58 00:03:08,880 --> 00:03:12,520 Speaker 5: might balance with all of the other trials. You know, 59 00:03:12,880 --> 00:03:16,040 Speaker 5: Trump could theoretically end up here getting some of these 60 00:03:16,040 --> 00:03:20,760 Speaker 5: spread out farther in ways that perhaps the prosecutors don't want, 61 00:03:20,919 --> 00:03:24,600 Speaker 5: just as a result of the crowded calendar, and of 62 00:03:24,600 --> 00:03:27,160 Speaker 5: course his campaign schedule. But again this is it's too 63 00:03:27,200 --> 00:03:31,919 Speaker 5: soon to know right now, but potentially they could request 64 00:03:31,919 --> 00:03:34,040 Speaker 5: to have a speedy trial like they did in Florida. 65 00:03:34,840 --> 00:03:37,320 Speaker 2: I guess another way of asking this, Eric, is you know, 66 00:03:37,320 --> 00:03:40,000 Speaker 2: what are the odds that these cases, and specifically this 67 00:03:40,120 --> 00:03:44,400 Speaker 2: January sixth case, goes unresolved at the time of next 68 00:03:44,480 --> 00:03:45,040 Speaker 2: year's election. 69 00:03:45,880 --> 00:03:48,680 Speaker 5: I mean, I would say that that's definitely a risk 70 00:03:49,280 --> 00:03:52,280 Speaker 5: out there, especially if even if for the best case 71 00:03:52,280 --> 00:03:55,440 Speaker 5: scenario for the Special counsel here, if he were to 72 00:03:55,480 --> 00:03:58,160 Speaker 5: hold both of the trials before the election and even 73 00:03:58,400 --> 00:04:02,640 Speaker 5: win convictions, you would still have an appeal process that 74 00:04:02,680 --> 00:04:05,720 Speaker 5: could drag it out much further. Of course, there's so 75 00:04:05,840 --> 00:04:10,680 Speaker 5: much speculation from legal experts lately about what would happen 76 00:04:10,760 --> 00:04:13,920 Speaker 5: if Trump were to win the election and still have 77 00:04:14,440 --> 00:04:19,000 Speaker 5: convictions hanging out there over him, perhaps on appeal. I think, 78 00:04:19,040 --> 00:04:21,600 Speaker 5: you know, it's been said so many times, this is unprecedented, 79 00:04:21,640 --> 00:04:24,560 Speaker 5: and this really is uncharted territory. So I think a 80 00:04:24,600 --> 00:04:26,760 Speaker 5: lot of us are going to learn a lot in 81 00:04:26,800 --> 00:04:28,200 Speaker 5: the coming year. 82 00:04:28,720 --> 00:04:30,760 Speaker 2: All right, Eric, thank you, don't be a stranger, and 83 00:04:30,800 --> 00:04:33,680 Speaker 2: appreciate your reporting each day through this process. 84 00:04:33,720 --> 00:04:33,840 Speaker 1: Here. 85 00:04:33,920 --> 00:04:37,480 Speaker 2: Eric Larson, Bloomberg legal reporter. Pretty amazing to think it 86 00:04:37,560 --> 00:04:40,400 Speaker 2: was a week ago. A week ago tomorrow, I guess 87 00:04:40,400 --> 00:04:43,359 Speaker 2: I was sitting with Eric in New York talking about 88 00:04:43,560 --> 00:04:45,880 Speaker 2: when this indictment was going to drop. It's been a 89 00:04:45,880 --> 00:04:48,200 Speaker 2: little bit of a slow drip here. And we want 90 00:04:48,200 --> 00:04:50,240 Speaker 2: to add the voice of John Dean to the conversation, 91 00:04:50,320 --> 00:04:53,800 Speaker 2: the former White House Council for President Richard Nixon, of course, 92 00:04:54,240 --> 00:04:58,520 Speaker 2: famous for blowing the whistle in the Watergate scandal. John Dean, 93 00:04:58,560 --> 00:05:01,240 Speaker 2: Welcome back to Bloomberg Radio. I'm glad you're here, and 94 00:05:01,279 --> 00:05:04,200 Speaker 2: I wonder your thoughts on comparisons to Watergate, if they're 95 00:05:04,200 --> 00:05:07,120 Speaker 2: appropriate or is this truly uncharted territory. 96 00:05:08,400 --> 00:05:12,320 Speaker 6: I think it is uncharted territory. I heard a historian 97 00:05:13,000 --> 00:05:19,559 Speaker 6: do the analogy that Nixon's Watergate was like a lightning bug. 98 00:05:20,160 --> 00:05:24,400 Speaker 6: Trump's behavior is like a lightning storm in that it 99 00:05:24,560 --> 00:05:29,040 Speaker 6: threatens the entire structure of our democracy. I think it's 100 00:05:29,080 --> 00:05:32,400 Speaker 6: a pretty good analogy, Okay. 101 00:05:32,440 --> 00:05:35,880 Speaker 3: And when we're talking about this case in particular, because 102 00:05:35,920 --> 00:05:38,039 Speaker 3: of course this is just one of the indictments that 103 00:05:38,080 --> 00:05:41,200 Speaker 3: the former president has faced, and in the classified document case, 104 00:05:41,200 --> 00:05:43,120 Speaker 3: we heard a lot of people saying that there is 105 00:05:43,160 --> 00:05:45,800 Speaker 3: a comparison to be made with Watergate, because it is 106 00:05:46,160 --> 00:05:48,320 Speaker 3: not so much about the crime as it is about 107 00:05:48,640 --> 00:05:51,600 Speaker 3: the cover up. This case, though, does feel like it's 108 00:05:51,640 --> 00:05:54,160 Speaker 3: different in that fundamentally it is about the. 109 00:05:54,160 --> 00:05:59,000 Speaker 6: Crime, right, Yes, I think that is a good distinction. 110 00:05:59,160 --> 00:06:02,360 Speaker 6: That there is a parallel with what happened with the 111 00:06:02,760 --> 00:06:07,760 Speaker 6: effort to erase the tapes, But the underlying crime there 112 00:06:08,320 --> 00:06:13,680 Speaker 6: of retention of classified information and refusal to return it 113 00:06:13,720 --> 00:06:17,040 Speaker 6: to the government, is very different than Watergate. Of course. 114 00:06:17,480 --> 00:06:21,200 Speaker 6: In fact, all of Trump's behavior is so much different 115 00:06:21,240 --> 00:06:27,239 Speaker 6: than Nixon's that it almost makes Nixon look good. It's 116 00:06:27,400 --> 00:06:28,280 Speaker 6: quite incredible. 117 00:06:28,560 --> 00:06:30,960 Speaker 2: Well, it's interesting you say that because Donald Trump was 118 00:06:31,000 --> 00:06:33,080 Speaker 2: a real admirer of Richard Nixon. 119 00:06:32,839 --> 00:06:38,840 Speaker 6: Wasn't he? Absolutely? In fact, they corresponded Richard Nixon. When 120 00:06:39,040 --> 00:06:43,360 Speaker 6: Trump owned the New Jersey Generals used to send plays 121 00:06:43,400 --> 00:06:49,320 Speaker 6: for them to execute in their games. So it's an 122 00:06:49,360 --> 00:06:53,960 Speaker 6: odd relationship. Trump wanted Nixon to move into Trump Tower 123 00:06:54,520 --> 00:06:56,960 Speaker 6: and actually announced that that was going to happen when 124 00:06:57,040 --> 00:07:00,719 Speaker 6: it didn't. Not an unusual thing Fornald Trump to do. 125 00:07:01,560 --> 00:07:06,039 Speaker 6: But there is a bond between the two, and of 126 00:07:06,080 --> 00:07:09,320 Speaker 6: course they had the common friend of Roger Stone. 127 00:07:11,080 --> 00:07:13,720 Speaker 3: Yeah, it's a good point. And as we're talking about, 128 00:07:13,760 --> 00:07:16,280 Speaker 3: you know, the two men themselves, it's worth noting that 129 00:07:16,360 --> 00:07:19,680 Speaker 3: Richard Nixon did resign, and not only is former President 130 00:07:19,760 --> 00:07:23,120 Speaker 3: Trump in this particular pickle because he didn't want to 131 00:07:23,120 --> 00:07:25,760 Speaker 3: give up the oval office, he is also seeking that 132 00:07:25,840 --> 00:07:30,120 Speaker 3: office once again. So maybe that's another way in which 133 00:07:30,160 --> 00:07:33,280 Speaker 3: the historical comparison there really isn't one. This is someone 134 00:07:33,280 --> 00:07:36,440 Speaker 3: who is actively running for reelection in twenty twenty four, 135 00:07:36,480 --> 00:07:39,160 Speaker 3: and yet John it doesn't seem like any of these 136 00:07:39,200 --> 00:07:42,400 Speaker 3: cases would actually prohibit him from winning the presidency once again. 137 00:07:42,480 --> 00:07:44,600 Speaker 3: I just wonder if jail time makes any difference at 138 00:07:44,640 --> 00:07:46,200 Speaker 3: all in that equation. If you think that might be. 139 00:07:46,320 --> 00:07:51,080 Speaker 6: Likely, well, you know we've had We've had candidates run 140 00:07:51,120 --> 00:07:57,320 Speaker 6: from jail. Lyndon LaRouche died, and even historically there's some 141 00:07:58,200 --> 00:08:01,120 Speaker 6: but I don't think you could govern from jail. In fact, 142 00:08:01,800 --> 00:08:05,880 Speaker 6: I don't think that Trump has done anything other than 143 00:08:06,080 --> 00:08:10,080 Speaker 6: use his run as a defense. And it's pretty effective. 144 00:08:10,960 --> 00:08:14,920 Speaker 6: He's claiming that the prosecution is trying to disrupt his 145 00:08:15,000 --> 00:08:19,480 Speaker 6: effort to get re elected. He's using it to try 146 00:08:19,520 --> 00:08:24,280 Speaker 6: to get delay in the proceedings. I'm not sure it 147 00:08:24,320 --> 00:08:30,480 Speaker 6: will work. And I'm not sure how long the greater public, 148 00:08:30,760 --> 00:08:36,319 Speaker 6: notwithstanding his base, will really tolerate his use of the 149 00:08:36,360 --> 00:08:41,320 Speaker 6: process to try to defeat the criminal justice. I don't know. 150 00:08:42,080 --> 00:08:44,480 Speaker 6: These are the unchartered areas we're in. 151 00:08:45,200 --> 00:08:48,800 Speaker 2: John Dene, what do you make of the verbiage we're 152 00:08:48,840 --> 00:08:53,880 Speaker 2: hearing from Donald Trump's legal team. Just today we heard 153 00:08:53,920 --> 00:08:59,120 Speaker 2: from his lawyer who was making rounds on all of 154 00:08:59,160 --> 00:09:01,600 Speaker 2: the networks. John law for instance, on the Today Show 155 00:09:01,640 --> 00:09:04,240 Speaker 2: made the case that this is a First Amendment case. 156 00:09:04,280 --> 00:09:06,520 Speaker 2: That's going to be their strategy, not to go after 157 00:09:06,880 --> 00:09:09,439 Speaker 2: what Donald Trump did, but to protect the words that 158 00:09:09,520 --> 00:09:11,679 Speaker 2: he said. Does that make sense to you? 159 00:09:12,840 --> 00:09:15,920 Speaker 6: It doesn't, because I think they prepared that defense before 160 00:09:16,000 --> 00:09:21,679 Speaker 6: they saw the indictment, and the indictment is specifically designed 161 00:09:22,000 --> 00:09:25,679 Speaker 6: to avoid that defense. They thought that they were going 162 00:09:25,720 --> 00:09:29,040 Speaker 6: to spring out of his speech at the Ellipse on 163 00:09:29,200 --> 00:09:35,360 Speaker 6: January sixth and use that, and they didn't. They avoided it. 164 00:09:35,760 --> 00:09:41,600 Speaker 6: They wrote this indictment to really avoid the First Amendment 165 00:09:41,679 --> 00:09:44,400 Speaker 6: legal issues. Now, can you do it politically? Of course 166 00:09:44,440 --> 00:09:47,560 Speaker 6: you can, and what can you sell it politically? Probably? 167 00:09:49,080 --> 00:09:52,320 Speaker 6: But it won't work in court. There is no First 168 00:09:52,360 --> 00:09:57,600 Speaker 6: Amendment defense to this activity. The defenseive advice of counsel 169 00:09:57,760 --> 00:10:00,960 Speaker 6: is the other one they're throwing out there. It is possible, 170 00:10:01,280 --> 00:10:03,640 Speaker 6: but it's a very very difficult defense. 171 00:10:04,040 --> 00:10:06,280 Speaker 2: So can we take that one step further than and 172 00:10:06,640 --> 00:10:10,040 Speaker 2: assume that's why there's no insurrection charge, for instance, that 173 00:10:10,080 --> 00:10:12,640 Speaker 2: they didn't go after his actions on the actual day 174 00:10:12,679 --> 00:10:13,760 Speaker 2: of January. 175 00:10:13,320 --> 00:10:17,360 Speaker 6: Sixth, That is correct. I think that's clearly what they did. 176 00:10:17,640 --> 00:10:24,160 Speaker 6: They went for They embrace his exploiting the violence as 177 00:10:24,240 --> 00:10:28,680 Speaker 6: part of the greater scheme. They note that they state 178 00:10:29,200 --> 00:10:32,240 Speaker 6: that the reason there was the violence is because of 179 00:10:32,640 --> 00:10:37,320 Speaker 6: his lies, but they don't charge a crime based on that. 180 00:10:38,240 --> 00:10:41,000 Speaker 6: It will be it'll be a thread that goes through 181 00:10:41,040 --> 00:10:44,560 Speaker 6: the trial, but it is not a there's not an 182 00:10:44,559 --> 00:10:49,240 Speaker 6: insurrection charge. They're not a sedition charge. So they've avoided 183 00:10:49,440 --> 00:10:52,840 Speaker 6: I think the First Amendment issues when we're. 184 00:10:52,640 --> 00:10:55,040 Speaker 3: Talking about what charges were and were not there. It's 185 00:10:55,040 --> 00:10:58,520 Speaker 3: also worth noting that there were six co conspirators referred 186 00:10:58,520 --> 00:11:03,920 Speaker 3: to in this not named and not charged. What role 187 00:11:04,000 --> 00:11:06,760 Speaker 3: do they do they play here? Why is that significant? 188 00:11:07,800 --> 00:11:13,400 Speaker 6: Well, it's very significant from an evidentiary standpoint. The evidence 189 00:11:13,559 --> 00:11:18,600 Speaker 6: of the activities of co conspirators is not hearsay. What 190 00:11:18,679 --> 00:11:21,040 Speaker 6: they say is not hearsay, So you can get a 191 00:11:21,080 --> 00:11:25,680 Speaker 6: lot of evidence in through co conspirators. But I don't 192 00:11:25,679 --> 00:11:30,079 Speaker 6: think that they're home free either. I think that those 193 00:11:30,160 --> 00:11:35,720 Speaker 6: six might well be indicted in a separate set of charges. 194 00:11:35,760 --> 00:11:38,040 Speaker 6: I don't know if it'll be six charges. I don't 195 00:11:38,040 --> 00:11:42,560 Speaker 6: know if there'll be another conspiracy charge. But I don't 196 00:11:42,559 --> 00:11:47,480 Speaker 6: think that they have gotten through this or leap these 197 00:11:47,559 --> 00:11:50,840 Speaker 6: hurdles yet. And I think there's an effort probably to 198 00:11:50,880 --> 00:11:55,240 Speaker 6: get them to be cooperating witnesses. But we'll see how 199 00:11:55,280 --> 00:11:58,400 Speaker 6: that plays out. That's one of the unknowns we're still 200 00:11:58,440 --> 00:11:58,920 Speaker 6: dealing with. 201 00:11:59,520 --> 00:12:02,240 Speaker 2: We spoke late yesterday, it was actually just moments after 202 00:12:02,240 --> 00:12:05,400 Speaker 2: the indictment was unsealed, with the former Deputy Attorney General 203 00:12:05,440 --> 00:12:09,560 Speaker 2: Donald Ayre about the chances, the possibility of Donald Trump, 204 00:12:09,640 --> 00:12:12,720 Speaker 2: if convicted, going to jail, the idea of a former 205 00:12:12,760 --> 00:12:15,440 Speaker 2: president being locked up. John Dean, Here's what he says. 206 00:12:15,720 --> 00:12:18,680 Speaker 7: It seems to me it's critically important that if this 207 00:12:18,880 --> 00:12:22,199 Speaker 7: prosecution goes forward and as successful, that Donald Trump ends 208 00:12:22,280 --> 00:12:22,840 Speaker 7: up in jail. 209 00:12:22,960 --> 00:12:25,679 Speaker 2: Do you agree with that or is that just a 210 00:12:25,720 --> 00:12:26,440 Speaker 2: bridge too far? 211 00:12:27,559 --> 00:12:30,840 Speaker 6: Well, you know, Eric Holder, former Attorney General thought it 212 00:12:30,920 --> 00:12:33,360 Speaker 6: was possible. You could have made an arrangement with the 213 00:12:33,760 --> 00:12:38,200 Speaker 6: Bureau of Prisons where he could be incarcerated out of 214 00:12:38,240 --> 00:12:43,040 Speaker 6: the general population. He's got a secret service detail, it's 215 00:12:43,080 --> 00:12:47,679 Speaker 6: attached to him for life. You can't I incarcerate them, 216 00:12:48,080 --> 00:12:52,440 Speaker 6: but you could indeed work out something where a sort 217 00:12:52,480 --> 00:12:59,679 Speaker 6: of a less sophisticated mar a largo house arrests arrangement 218 00:12:59,679 --> 00:13:06,200 Speaker 6: where he is confined. So it's possible, but it's not easy, 219 00:13:06,800 --> 00:13:11,560 Speaker 6: and it's not a pleasant thought. But I think that 220 00:13:11,960 --> 00:13:16,320 Speaker 6: we're premature to address that. I'm not sure. I think 221 00:13:16,360 --> 00:13:19,600 Speaker 6: the stigma of conviction alone is going to be a 222 00:13:19,600 --> 00:13:20,480 Speaker 6: burden for the man. 223 00:13:22,440 --> 00:13:24,440 Speaker 3: All right, John, we only have about a minute left, 224 00:13:24,480 --> 00:13:26,560 Speaker 3: so kind of quickly, just a yes or no answer. 225 00:13:26,600 --> 00:13:29,400 Speaker 3: Do you think this former president might take a plea deal? 226 00:13:29,400 --> 00:13:30,200 Speaker 3: What would that look like? 227 00:13:31,360 --> 00:13:33,400 Speaker 6: No, it's not in his personality. 228 00:13:35,320 --> 00:13:37,800 Speaker 2: That was an efficient answer, John. We'd love to be 229 00:13:37,800 --> 00:13:39,360 Speaker 2: able to reach out to you from time to time, 230 00:13:39,520 --> 00:13:42,000 Speaker 2: as we didn't even get to the classified documents case, 231 00:13:42,000 --> 00:13:44,040 Speaker 2: which I would love to ask you about in this 232 00:13:44,080 --> 00:13:47,520 Speaker 2: prospect of attempting to erase tapes and so forth. Just 233 00:13:47,600 --> 00:13:50,000 Speaker 2: keep bringing us back to your own life experience. And 234 00:13:50,040 --> 00:13:51,680 Speaker 2: we thank you for sharing it with us today. 235 00:13:52,679 --> 00:13:55,079 Speaker 6: Pleasure. I enjoyed Bloomberg's work. 236 00:13:55,679 --> 00:13:57,720 Speaker 2: Thank you, Sir John Dene, the former White House counsel 237 00:13:58,559 --> 00:14:03,800 Speaker 2: in the Richard Nixon admitte, veteran of the Watergate trial. 238 00:14:04,160 --> 00:14:07,679 Speaker 2: I'm Joe Matthew and Washington alongside Kaylee Lines. These are 239 00:14:07,800 --> 00:14:11,080 Speaker 2: historic times where Kayley, it's just incredible as we go 240 00:14:11,160 --> 00:14:13,720 Speaker 2: from a third indictment to a former president to now 241 00:14:13,760 --> 00:14:16,520 Speaker 2: a credit downgrade for the US. We're going to tackle 242 00:14:16,520 --> 00:14:17,200 Speaker 2: that next. 243 00:14:17,040 --> 00:14:18,720 Speaker 3: Right, just another day in paradise. 244 00:14:18,880 --> 00:14:20,440 Speaker 2: You said it on Bloomberg. 245 00:14:23,120 --> 00:14:26,480 Speaker 1: You're listening to the Bloomberg Sound On podcast. Catch the 246 00:14:26,520 --> 00:14:30,400 Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the 247 00:14:30,480 --> 00:14:33,800 Speaker 1: tune in alf Bloomberg dot Com, and the Bloomberg Business App. 248 00:14:33,920 --> 00:14:36,800 Speaker 1: You can also listen live on Amazon Alexa from our 249 00:14:36,800 --> 00:14:41,280 Speaker 1: flagship New York station. Just say Alexa play Bloomberg eleven thirty. 250 00:14:42,440 --> 00:14:45,520 Speaker 2: We're having a serious conversation here today inside the Beltway 251 00:14:45,560 --> 00:14:50,960 Speaker 2: about the erosion of governance yes following the Fitch downgrade yesterday. 252 00:14:51,000 --> 00:14:53,840 Speaker 2: When you read this thing, my god, we're doing everything 253 00:14:53,880 --> 00:14:56,880 Speaker 2: wrong here in Washington. The debt ceiling deal, the way 254 00:14:56,880 --> 00:14:59,280 Speaker 2: it came together what was left and now the reltigation 255 00:14:59,440 --> 00:15:02,720 Speaker 2: is a major problem for Fitch Ratings. 256 00:15:03,200 --> 00:15:06,640 Speaker 3: Yes, which, by the way, even after that debt sealing deal, 257 00:15:06,720 --> 00:15:09,400 Speaker 3: had warned that they weren't taking the US off of 258 00:15:09,640 --> 00:15:13,680 Speaker 3: Watch negative. True, and then they acted on it. Timing 259 00:15:13,720 --> 00:15:16,960 Speaker 3: maybe a little bit surprising to almost all of us. 260 00:15:17,280 --> 00:15:19,320 Speaker 3: I think a lot of economists are actually puzzled by 261 00:15:19,360 --> 00:15:23,200 Speaker 3: the decision itself. But Fitch seems to see multiple reasons 262 00:15:23,200 --> 00:15:25,600 Speaker 3: why the US didn't deserve a triple A rating and 263 00:15:25,640 --> 00:15:28,040 Speaker 3: instead double A plus is what we get. They say 264 00:15:28,040 --> 00:15:31,680 Speaker 3: it reflects an expected fiscal deterioration over the next three years, 265 00:15:31,920 --> 00:15:34,800 Speaker 3: a high and growing general government debt burden, and as 266 00:15:34,840 --> 00:15:36,960 Speaker 3: you said, Joe, the erosion of governance. 267 00:15:37,040 --> 00:15:41,359 Speaker 2: Yeah, what a wait to choose words. The Treasury Secretary 268 00:15:41,400 --> 00:15:44,360 Speaker 2: is upset about it, Jenny Yellen writes, quote, I strongly 269 00:15:44,360 --> 00:15:46,680 Speaker 2: disagree with Fitch Rating's decision. The change by Fitch and 270 00:15:46,720 --> 00:15:52,680 Speaker 2: asked today is arbitrary and based on outdated data. Earlier, 271 00:15:52,720 --> 00:15:56,760 Speaker 2: Bloomberg spoke with Fitch Ratings Richard Francis Hinali talked to him. 272 00:15:56,760 --> 00:15:59,040 Speaker 2: As I'm sure you saw or heard on Bloomberg TV 273 00:15:59,160 --> 00:16:02,120 Speaker 2: or radio, came. He had a reaction to that statement 274 00:16:02,160 --> 00:16:03,360 Speaker 2: from the Treasury Secretary. 275 00:16:03,440 --> 00:16:05,680 Speaker 6: We have that data for every country in the world, 276 00:16:05,720 --> 00:16:08,000 Speaker 6: and it comes out once a year, and we're able 277 00:16:08,040 --> 00:16:11,000 Speaker 6: to use it for comparison's sake, and not to say it's. 278 00:16:10,920 --> 00:16:12,440 Speaker 1: Fitch coming up with us. 279 00:16:13,120 --> 00:16:17,240 Speaker 2: You know this underlying governance. So yes, it's a little 280 00:16:17,280 --> 00:16:21,040 Speaker 2: bit backward looking so much for outdated data. Yeah, Yellen 281 00:16:21,080 --> 00:16:24,040 Speaker 2: even says, you say the ratings model declined marketly between 282 00:16:24,040 --> 00:16:26,240 Speaker 2: twenty eighteen and twenty twenty. She didn't hold back. 283 00:16:26,720 --> 00:16:29,400 Speaker 3: Yeah. And something else the Treasury Secretary and the White 284 00:16:29,400 --> 00:16:31,160 Speaker 3: House and others have pointed to is the fact that 285 00:16:31,160 --> 00:16:33,560 Speaker 3: Fitch did this against the backdrop of what has been 286 00:16:33,960 --> 00:16:38,720 Speaker 3: to this point an incredibly resilient US economy. Fitch's response 287 00:16:38,800 --> 00:16:41,280 Speaker 3: to that was, even if the US avoids a recession, 288 00:16:41,440 --> 00:16:43,600 Speaker 3: it's not going to change the trajectory of the debt 289 00:16:43,840 --> 00:16:46,800 Speaker 3: or the jets to GDP. And that's really what they're 290 00:16:46,840 --> 00:16:50,840 Speaker 3: focused on here. Yeah, it is. It's a fiscal responsibility 291 00:16:50,920 --> 00:16:53,040 Speaker 3: question at the end of the day, right even, and 292 00:16:53,080 --> 00:16:55,560 Speaker 3: that's a longer term issue than perhaps the near term 293 00:16:55,640 --> 00:16:56,320 Speaker 3: economic health. 294 00:16:56,440 --> 00:16:57,760 Speaker 2: Just wait for the racket we're going to have when 295 00:16:57,760 --> 00:16:59,920 Speaker 2: all the lawmakers come back to town after August reset 296 00:17:00,120 --> 00:17:01,920 Speaker 2: and then we'll see how crazy Fitch sounds. 297 00:17:02,080 --> 00:17:05,239 Speaker 3: Right when we're talking government shutdown. Let's talk to an 298 00:17:05,240 --> 00:17:06,720 Speaker 3: economist about this, Joe, what do you say? 299 00:17:07,000 --> 00:17:08,879 Speaker 2: Actually, this is really important to us. You know, this 300 00:17:08,960 --> 00:17:10,439 Speaker 2: is a political show, but we wanted to get to 301 00:17:10,480 --> 00:17:12,439 Speaker 2: the economic side of this and actually talk data for 302 00:17:12,480 --> 00:17:13,640 Speaker 2: a moment, So I'm all for it. 303 00:17:13,680 --> 00:17:16,320 Speaker 3: All right. Lara Raim is standing by. She's chief US 304 00:17:16,359 --> 00:17:20,000 Speaker 3: economist at FS Investments. Lara, great to speak with you 305 00:17:20,080 --> 00:17:24,240 Speaker 3: again here on Bloomberg. Let's just start with Fitch's downgrade itself. 306 00:17:24,280 --> 00:17:26,440 Speaker 3: Do they have a point? Does the US deserve this? 307 00:17:27,720 --> 00:17:32,680 Speaker 8: Good afternoon? They This is something that is clearly not new, 308 00:17:33,000 --> 00:17:35,840 Speaker 8: but I think it was really hammered home today when 309 00:17:35,880 --> 00:17:39,520 Speaker 8: the Treasury issued its guidance for the coming auction this 310 00:17:39,640 --> 00:17:44,159 Speaker 8: coming week. We are just facing a much heavier dat burden, 311 00:17:44,960 --> 00:17:47,240 Speaker 8: just both in size and in interest rates. You know, 312 00:17:47,280 --> 00:17:50,879 Speaker 8: we've just grown a little complacent a lot some places 313 00:17:50,920 --> 00:17:53,520 Speaker 8: with interest rates so low for so long, and I 314 00:17:53,520 --> 00:17:55,640 Speaker 8: think that is really going to come home to roots, 315 00:17:55,640 --> 00:17:58,240 Speaker 8: and it's going to mean that going forward, that deficit 316 00:17:58,280 --> 00:17:59,600 Speaker 8: burden and interest rate burden is. 317 00:17:59,600 --> 00:18:02,080 Speaker 2: Only going to grow, so that fits do the right thing. 318 00:18:04,040 --> 00:18:08,200 Speaker 8: You know, I think this had been well broadcast, and 319 00:18:08,440 --> 00:18:12,440 Speaker 8: I certainly think that it is aligned with the statements 320 00:18:12,440 --> 00:18:15,280 Speaker 8: that we heard from Moodies and the warnings that were 321 00:18:15,280 --> 00:18:18,919 Speaker 8: given as early as twenty eleven. So right or wrong, 322 00:18:19,040 --> 00:18:22,000 Speaker 8: I think they're addressing concerns which a lot of us 323 00:18:22,040 --> 00:18:25,040 Speaker 8: are looking at from here, the interest rate burden could 324 00:18:25,080 --> 00:18:26,880 Speaker 8: really crowd out other economic activity. 325 00:18:28,000 --> 00:18:30,720 Speaker 3: Okay, so Laura, I guess another question is how much 326 00:18:30,760 --> 00:18:34,040 Speaker 3: does the rating really really matter? Could we see this 327 00:18:34,119 --> 00:18:37,200 Speaker 3: downgrade ultimately make a difference to credit conditions in the economy, 328 00:18:37,240 --> 00:18:39,879 Speaker 3: for example, what are the ripple effects or is it 329 00:18:40,000 --> 00:18:42,440 Speaker 3: just kind of a tree falls in the woods and 330 00:18:42,480 --> 00:18:44,439 Speaker 3: everybody ignores it and move on. 331 00:18:45,760 --> 00:18:50,080 Speaker 8: I think that today and this week the focus is 332 00:18:50,280 --> 00:18:55,240 Speaker 8: much more on data that is probably going to indicate 333 00:18:55,359 --> 00:18:58,480 Speaker 8: what the feed is going to do in September. Certainly 334 00:18:58,680 --> 00:19:02,199 Speaker 8: the downgrade is not good news. Interestingly, you know, the 335 00:19:02,240 --> 00:19:05,200 Speaker 8: prior downgrade over a decade ago from the essence from 336 00:19:05,359 --> 00:19:09,679 Speaker 8: Standard and Poors caused interest rates to fall. Today they're rising. 337 00:19:10,200 --> 00:19:12,880 Speaker 8: I really think the bigger driver is a strong economic 338 00:19:12,960 --> 00:19:15,560 Speaker 8: data and what it could possibly apply for another FED 339 00:19:15,640 --> 00:19:17,080 Speaker 8: rate hike in September. 340 00:19:17,359 --> 00:19:19,320 Speaker 3: Okay, so we'll get to the data in just a moment. 341 00:19:19,320 --> 00:19:20,960 Speaker 3: But is that another way of saying that you don't 342 00:19:20,960 --> 00:19:23,600 Speaker 3: anticipate that the downgrade effects in any way what the 343 00:19:23,600 --> 00:19:25,840 Speaker 3: Fed's decision may or may not be come next month. 344 00:19:27,040 --> 00:19:29,000 Speaker 8: I do not think that the Fed is going to 345 00:19:29,160 --> 00:19:33,080 Speaker 8: be paying close attention to this downgrade written news, especially 346 00:19:33,160 --> 00:19:35,600 Speaker 8: because it had been telegraphed. I think the timing was 347 00:19:35,800 --> 00:19:36,760 Speaker 8: a little surprising. 348 00:19:38,200 --> 00:19:39,520 Speaker 2: Are we going to be in a world where we're 349 00:19:39,520 --> 00:19:42,399 Speaker 2: talking about rate cuts at some point because of this? 350 00:19:43,040 --> 00:19:44,360 Speaker 2: Where is that wish for sinking? 351 00:19:45,080 --> 00:19:45,280 Speaker 9: You know? 352 00:19:45,440 --> 00:19:49,800 Speaker 8: I think that is very far on the time horizon 353 00:19:50,440 --> 00:19:51,040 Speaker 8: right now. 354 00:19:51,680 --> 00:19:53,399 Speaker 9: Yeah, you know. 355 00:19:53,520 --> 00:19:58,159 Speaker 8: And in truth, markets have been trying to price rate hikes, sorry, 356 00:19:58,600 --> 00:20:02,840 Speaker 8: rate cuts in to the forward curve, which is downward sloping, 357 00:20:02,840 --> 00:20:05,679 Speaker 8: and we've seen that for a long time. And to me, 358 00:20:06,119 --> 00:20:09,320 Speaker 8: so much of the FED hawkish rhetoric has been pushing 359 00:20:09,400 --> 00:20:13,680 Speaker 8: back against those rate cut expectations. The reality is, with 360 00:20:13,800 --> 00:20:17,359 Speaker 8: inflation where it is, we are very far away from 361 00:20:17,600 --> 00:20:22,000 Speaker 8: seeing the FED having the room to cut raids given 362 00:20:22,040 --> 00:20:23,200 Speaker 8: where growth and inflation are. 363 00:20:23,680 --> 00:20:25,959 Speaker 3: Okay, well, let's talk about where growth and inflation are. 364 00:20:26,000 --> 00:20:29,440 Speaker 3: Where the data is inflation obviously, if you're just looking 365 00:20:29,480 --> 00:20:31,480 Speaker 3: at headline CPI year of a year in June, was 366 00:20:31,520 --> 00:20:33,720 Speaker 3: it three percent? Yes, that's not two percent, but it 367 00:20:33,760 --> 00:20:36,399 Speaker 3: is on the right path. Then you get data like 368 00:20:36,480 --> 00:20:39,520 Speaker 3: we got this morning the ADP July employment print coming 369 00:20:39,520 --> 00:20:42,280 Speaker 3: in way hotter than expected at three hundred and twenty 370 00:20:42,280 --> 00:20:44,840 Speaker 3: four thousand. We had the GDP print last week of 371 00:20:44,840 --> 00:20:48,600 Speaker 3: two point four percent, also blue past estimates. Is this 372 00:20:48,640 --> 00:20:50,399 Speaker 3: an economy heading for a soft landing? 373 00:20:51,880 --> 00:20:54,879 Speaker 8: This is an economy that is really sailing along. It 374 00:20:54,920 --> 00:20:58,000 Speaker 8: has got a lot of tailwinds, and I think those 375 00:20:58,040 --> 00:21:02,439 Speaker 8: tailwinds are evaporating, but positive momentum is hard to deny. 376 00:21:03,119 --> 00:21:05,960 Speaker 8: I'm looking ahead at the second half of growth, where 377 00:21:06,320 --> 00:21:08,640 Speaker 8: the second half of the year where I think growth 378 00:21:08,760 --> 00:21:12,359 Speaker 8: will be slower, And unfortunately, I am still in the 379 00:21:12,400 --> 00:21:16,120 Speaker 8: camp that he's a pretty big probability of a recession 380 00:21:16,480 --> 00:21:20,359 Speaker 8: sometime next year. But it's going to take a while 381 00:21:20,520 --> 00:21:24,600 Speaker 8: to evolve. And you know, I go back to what 382 00:21:24,720 --> 00:21:28,560 Speaker 8: expectations for the said were before the banking crisis in March. 383 00:21:29,240 --> 00:21:30,840 Speaker 8: Back then, we thought the SED was going to be 384 00:21:30,920 --> 00:21:34,600 Speaker 8: raising rates to over five point fifty round five sixty five. 385 00:21:35,160 --> 00:21:38,400 Speaker 8: I think as the data stays strong, those expectations may 386 00:21:38,760 --> 00:21:40,040 Speaker 8: come right back into play. 387 00:21:40,680 --> 00:21:43,879 Speaker 2: And where do you see inflation at the start of 388 00:21:43,920 --> 00:21:45,520 Speaker 2: a recession, say the middle of the next year. 389 00:21:46,680 --> 00:21:49,560 Speaker 8: My inflation forecast to the end of this year is 390 00:21:49,640 --> 00:21:51,840 Speaker 8: four percent, and I think there's a risk it could 391 00:21:51,920 --> 00:21:54,800 Speaker 8: even be higher than that. And I think it would 392 00:21:54,920 --> 00:21:57,200 Speaker 8: could take as long as the middle of next year 393 00:21:57,480 --> 00:22:00,399 Speaker 8: to get inflation back down to two percent. It's going 394 00:22:00,440 --> 00:22:01,920 Speaker 8: to be this long process. 395 00:22:02,880 --> 00:22:05,560 Speaker 3: Yeah, that sounds like an incredibly long process because that 396 00:22:05,600 --> 00:22:07,520 Speaker 3: would be going back the other way. Laara, what do 397 00:22:07,560 --> 00:22:12,000 Speaker 3: you think causes the reinflationary spike changes the trajectory we're 398 00:22:12,040 --> 00:22:12,560 Speaker 3: currently on. 399 00:22:14,000 --> 00:22:16,560 Speaker 8: You're asking a good question, and I should clarify. I 400 00:22:16,600 --> 00:22:20,320 Speaker 8: was speaking of core inflation, which and the year force, 401 00:22:20,359 --> 00:22:22,919 Speaker 8: and right now we're about four point eight percent there, 402 00:22:23,240 --> 00:22:26,200 Speaker 8: so I think that takes time to ease. Energy prices 403 00:22:26,240 --> 00:22:31,359 Speaker 8: have really pulled the headline index down significantly. We've seen 404 00:22:31,400 --> 00:22:36,760 Speaker 8: those stabilize, so energy may not be the deflationary force 405 00:22:36,800 --> 00:22:39,760 Speaker 8: that it's been over the past several months. But when 406 00:22:39,800 --> 00:22:43,199 Speaker 8: we look at some of these you know, uh, you know, 407 00:22:43,320 --> 00:22:48,120 Speaker 8: rental price inflation, stickier measures of services inflation, I think 408 00:22:48,119 --> 00:22:51,199 Speaker 8: It's just a long process for the base effects to 409 00:22:51,200 --> 00:22:53,080 Speaker 8: work its way out of the data and for the 410 00:22:53,119 --> 00:22:55,440 Speaker 8: said to get that two percent handle that makes them 411 00:22:55,480 --> 00:22:57,600 Speaker 8: comfortable to cut rates. 412 00:22:58,160 --> 00:23:02,199 Speaker 2: Is Fitch going to be the only downgrade? You know? 413 00:23:02,600 --> 00:23:04,480 Speaker 8: I think that is something that we're going to be 414 00:23:04,560 --> 00:23:08,720 Speaker 8: watching very carefully because the reality is the the as 415 00:23:08,760 --> 00:23:11,520 Speaker 8: our deficit has risen significantly, we need to issue a 416 00:23:11,560 --> 00:23:14,639 Speaker 8: lot more debt. It is going to mean treasury auctions 417 00:23:15,000 --> 00:23:18,960 Speaker 8: that may be rockier, long term interest rates maybe more volatile. 418 00:23:19,359 --> 00:23:21,960 Speaker 8: You know, we've been thinking that the YO curve would deepen, 419 00:23:22,520 --> 00:23:25,440 Speaker 8: but a lot of analysts are calling for a bull steepening. 420 00:23:25,640 --> 00:23:28,200 Speaker 8: I've been in the bear steepening camp. I think long 421 00:23:28,280 --> 00:23:31,520 Speaker 8: term rates could stay longer for I could stay higher 422 00:23:31,560 --> 00:23:32,840 Speaker 8: for a lot longer than people think. 423 00:23:33,800 --> 00:23:36,360 Speaker 3: Okay, so it sounds like we all should stay on watch, 424 00:23:36,400 --> 00:23:38,879 Speaker 3: because I think we weren't really on watch for a downgrade. 425 00:23:38,920 --> 00:23:41,760 Speaker 3: We were all thinking about a Trump indictman yesterday Joe, 426 00:23:41,760 --> 00:23:43,880 Speaker 3: and then Fitch caught us by surprise. So I guess 427 00:23:43,880 --> 00:23:46,480 Speaker 3: stay on high alert and get your rating. What alerts 428 00:23:46,520 --> 00:23:47,879 Speaker 3: set up on the Bloomberg terminal? 429 00:23:47,960 --> 00:23:49,919 Speaker 2: Yeah, I mean we I guess we knew we were 430 00:23:49,920 --> 00:23:51,719 Speaker 2: still on watch, but nobody saw it coming. We kind 431 00:23:51,760 --> 00:23:54,400 Speaker 2: of thought they had moved on. Yeah, Laura, thanks for joining. 432 00:23:54,480 --> 00:23:56,760 Speaker 2: Great conversation. We'd love to talk to you again as 433 00:23:56,800 --> 00:24:01,000 Speaker 2: this all on Fold's Laura Ramley, economist FS Investments. Joe 434 00:24:01,040 --> 00:24:02,680 Speaker 2: Biden would not want to hear that conversation. 435 00:24:03,520 --> 00:24:06,120 Speaker 3: No, probably not, as we're talking about inflation that's still 436 00:24:06,119 --> 00:24:07,800 Speaker 3: going to be too high in a softening that may 437 00:24:07,840 --> 00:24:10,359 Speaker 3: come in an election year. But we have to keep 438 00:24:10,400 --> 00:24:12,560 Speaker 3: in mind that the data could still surprise us. We 439 00:24:12,600 --> 00:24:15,960 Speaker 3: have a jobs report coming up on Friday, could still 440 00:24:15,960 --> 00:24:18,280 Speaker 3: show the labor market incredibly resilient, or could show that 441 00:24:18,320 --> 00:24:20,199 Speaker 3: cracks are starting to appear. We're going to have to 442 00:24:20,200 --> 00:24:20,520 Speaker 3: wait and. 443 00:24:20,440 --> 00:24:23,520 Speaker 2: See two jobs and two cpis between now and the 444 00:24:23,560 --> 00:24:24,320 Speaker 2: next FED meeting. 445 00:24:24,440 --> 00:24:24,720 Speaker 7: Yeah. 446 00:24:24,760 --> 00:24:29,400 Speaker 1: Interesting. You're listening to the Bloomberg Sound on podcast. Catch 447 00:24:29,480 --> 00:24:32,720 Speaker 1: us live weekdays at one Eastern on Bloomberg dot Com, 448 00:24:32,760 --> 00:24:35,840 Speaker 1: the iHeartRadio app, and the Bloomberg Business App, or listen 449 00:24:35,920 --> 00:24:38,040 Speaker 1: on demand wherever you get your podcasts. 450 00:24:39,200 --> 00:24:41,960 Speaker 2: The Grand Jury is charging Donald Trump with obstruction of 451 00:24:42,000 --> 00:24:46,640 Speaker 2: an official proceeding, conspiracy to defraud the government, and conspiracy 452 00:24:46,680 --> 00:24:50,640 Speaker 2: against the right to vote and have one's vote counted. 453 00:24:51,960 --> 00:24:54,399 Speaker 2: But the Trump legal team says, it's not about what 454 00:24:54,440 --> 00:24:57,560 Speaker 2: the president did, it's about what he said, and this 455 00:24:57,640 --> 00:25:00,320 Speaker 2: is a First Amendment case. Here's Attorney John Loa made 456 00:25:00,320 --> 00:25:02,200 Speaker 2: the rounds this morning in this case on the Today Show. 457 00:25:02,200 --> 00:25:05,000 Speaker 10: It's criminalizing speech for this reason. What the president saw 458 00:25:05,040 --> 00:25:08,639 Speaker 10: in the twenty twenty election with all these irregularities going on, okay, 459 00:25:08,760 --> 00:25:13,320 Speaker 10: AffA Davis sworn testimony examples of instances where the rules 460 00:25:13,320 --> 00:25:15,360 Speaker 10: were changed in the middle of the game, he had 461 00:25:15,400 --> 00:25:18,359 Speaker 10: every right to comment on that and act politically. In 462 00:25:18,400 --> 00:25:20,399 Speaker 10: a criminal case, what they would have to show is 463 00:25:20,480 --> 00:25:23,159 Speaker 10: all of that speech was not entitled to First Amendment production. 464 00:25:23,359 --> 00:25:25,880 Speaker 2: Let's reassemble our panel for their take on this. Rick Davis, 465 00:25:25,920 --> 00:25:29,960 Speaker 2: Bloomberg Politics contributor, Matt Bennett's executive vice president at Third Way. 466 00:25:30,680 --> 00:25:33,560 Speaker 2: How's this hitting you, Rick? Does this hold up in court? 467 00:25:34,040 --> 00:25:34,240 Speaker 1: Yeah? 468 00:25:34,280 --> 00:25:36,800 Speaker 11: I first heard this argument last night from Rudy Giuliani. 469 00:25:36,840 --> 00:25:39,240 Speaker 11: He was like, you know, Donald Trump can say anything 470 00:25:39,240 --> 00:25:41,840 Speaker 11: he wants to say. In fact, Rudy said he could 471 00:25:41,840 --> 00:25:44,480 Speaker 11: even light to the American public and he's protected by 472 00:25:44,520 --> 00:25:47,840 Speaker 11: the First Amendment. And that may be the case, but 473 00:25:47,920 --> 00:25:50,240 Speaker 11: there's a lot more to this indictment than just what 474 00:25:50,280 --> 00:25:54,159 Speaker 11: Donald Trump said. Donald Trump doesn't have the option to 475 00:25:54,800 --> 00:25:58,199 Speaker 11: use his power to try and get people to abrogate 476 00:25:59,000 --> 00:26:02,919 Speaker 11: a preceding life the counting of electoral votes, like he 477 00:26:02,960 --> 00:26:07,960 Speaker 11: did with the vice president, or to create a sham 478 00:26:08,119 --> 00:26:11,479 Speaker 11: bunch of electors like he did in the six targeted states. 479 00:26:11,600 --> 00:26:14,000 Speaker 11: I mean, there's a lot going on in this indictment 480 00:26:14,200 --> 00:26:16,879 Speaker 11: that doesn't have anything to do with what Donald Trump 481 00:26:16,920 --> 00:26:19,919 Speaker 11: said publicly, but what he actually did to try and 482 00:26:19,960 --> 00:26:21,399 Speaker 11: thwart the outcome of this election. 483 00:26:22,080 --> 00:26:25,120 Speaker 2: You mentioned tim Rick Rudy Giuliani talking about it last 484 00:26:25,160 --> 00:26:26,159 Speaker 2: night on Newsmax. 485 00:26:26,320 --> 00:26:28,960 Speaker 7: I don't have any information that he viihlated any law. 486 00:26:30,080 --> 00:26:33,680 Speaker 7: What I do have is I would seriously consider indicting 487 00:26:33,760 --> 00:26:38,080 Speaker 7: them for eighteen USC. Section two forty one for indicting 488 00:26:38,080 --> 00:26:40,720 Speaker 7: a man for exercising his writer free speech. That's a 489 00:26:40,760 --> 00:26:42,320 Speaker 7: conspiracy against rights. 490 00:26:42,520 --> 00:26:46,040 Speaker 2: All of this commentary, Matt in the twelve hours that 491 00:26:46,160 --> 00:26:49,000 Speaker 2: followed this indictment being unsealed, is this real? 492 00:26:50,600 --> 00:26:54,000 Speaker 12: I mean, anything Rudy Juliana has said in the last 493 00:26:54,200 --> 00:26:56,760 Speaker 12: six years or so has to be chalked up to 494 00:26:57,160 --> 00:27:03,760 Speaker 12: fantasy or knowing lies. So what I would I would argue, 495 00:27:04,040 --> 00:27:07,600 Speaker 12: is the Trump defense that his lawyers are starting to 496 00:27:07,640 --> 00:27:11,040 Speaker 12: trot out doesn't hold up at all. I mean, as 497 00:27:11,119 --> 00:27:14,600 Speaker 12: Rick noted, there's plenty of speech that is not protected. 498 00:27:14,720 --> 00:27:17,040 Speaker 12: You can't go into a bank and say give me 499 00:27:17,080 --> 00:27:19,920 Speaker 12: all your money or I'll shoot you. That you're speaking, 500 00:27:20,280 --> 00:27:22,840 Speaker 12: but that is that is illegal speech, and it is 501 00:27:22,920 --> 00:27:25,320 Speaker 12: used in the conduct of a crime, and that is 502 00:27:25,640 --> 00:27:27,680 Speaker 12: what is charged essentially charged here. 503 00:27:28,520 --> 00:27:31,680 Speaker 2: Yeah, this is an interesting one. More from John Lauro 504 00:27:31,840 --> 00:27:32,920 Speaker 2: earlier today on NBC. 505 00:27:33,119 --> 00:27:35,920 Speaker 10: The government in a criminal case has to prove beyond 506 00:27:35,960 --> 00:27:39,199 Speaker 10: a reasonable doubt criminal intent and corrupt intent. They have 507 00:27:39,280 --> 00:27:42,680 Speaker 10: to demonstrate beyond a reasonable doubt that number one, President 508 00:27:42,720 --> 00:27:45,680 Speaker 10: Trump did not believe that all these irregularities are true, 509 00:27:45,880 --> 00:27:48,880 Speaker 10: and number two that he did something to correct corruptly 510 00:27:49,000 --> 00:27:52,719 Speaker 10: obstruct justice. And they can't prove that because everything he 511 00:27:52,760 --> 00:27:54,040 Speaker 10: did was to get at the truth. 512 00:27:54,200 --> 00:27:54,320 Speaker 1: Right. 513 00:27:55,119 --> 00:27:57,600 Speaker 2: This is interesting to me as well, Rick. Will the 514 00:27:57,600 --> 00:27:59,720 Speaker 2: government be able to prove based on what's in this 515 00:27:59,760 --> 00:28:02,440 Speaker 2: for five pages? We know a lot of people who 516 00:28:02,440 --> 00:28:06,760 Speaker 2: were being paid well to represent Donald Trump on legally 517 00:28:06,840 --> 00:28:10,879 Speaker 2: here told him that he lost the election. Does the 518 00:28:10,920 --> 00:28:13,920 Speaker 2: government need to prove further that he knew he was lying. 519 00:28:15,280 --> 00:28:17,640 Speaker 11: You know, look, I don't know what the legal standard 520 00:28:17,720 --> 00:28:20,359 Speaker 11: is going to be for the government's case. And we 521 00:28:20,520 --> 00:28:23,680 Speaker 11: go into this presuming that Donald Trump is innocent and 522 00:28:23,760 --> 00:28:26,720 Speaker 11: that the Prosecutor's office is going to have to convince 523 00:28:26,920 --> 00:28:31,240 Speaker 11: a jury of his peers on their case. And I 524 00:28:32,280 --> 00:28:36,080 Speaker 11: constantly go back to the January sixth Committee hearings that 525 00:28:36,200 --> 00:28:38,960 Speaker 11: I watched intently because it was such a historic moment, 526 00:28:39,560 --> 00:28:44,200 Speaker 11: and the voluminous number of Trump administration appointees, people who 527 00:28:44,440 --> 00:28:46,840 Speaker 11: work for him, who were in the job of telling 528 00:28:46,920 --> 00:28:50,440 Speaker 11: him what was going on in the legal system and 529 00:28:50,480 --> 00:28:54,200 Speaker 11: the electoral system related to whether or not this was 530 00:28:55,480 --> 00:28:59,680 Speaker 11: a legitimate election, and every one of them, to the person, 531 00:29:00,560 --> 00:29:03,440 Speaker 11: said that they had told the president absolutely the truth 532 00:29:04,000 --> 00:29:07,200 Speaker 11: about the outcome of the election. And so how he 533 00:29:07,240 --> 00:29:10,840 Speaker 11: can then say, well, I pick and chose three lawyers 534 00:29:11,040 --> 00:29:15,200 Speaker 11: who didn't work directly for me, but had these ideas, 535 00:29:15,760 --> 00:29:18,800 Speaker 11: you know that they couldn't prove in court sixty different times, 536 00:29:18,880 --> 00:29:21,760 Speaker 11: but that they disagreed with all the experts in government 537 00:29:21,760 --> 00:29:25,480 Speaker 11: whose job it is to oversee federal elections in our country. 538 00:29:25,880 --> 00:29:28,200 Speaker 11: And I chose that their truth was better than the 539 00:29:28,240 --> 00:29:32,040 Speaker 11: truth of my own appointees. I think he's going to 540 00:29:32,080 --> 00:29:36,280 Speaker 11: have a hard time not looking silly making that argument. 541 00:29:37,560 --> 00:29:40,960 Speaker 2: Well, I'll tell you what, And you read the indictment here, 542 00:29:41,000 --> 00:29:43,680 Speaker 2: Matt in this meeting that Donald Trump had with Mike 543 00:29:43,720 --> 00:29:47,160 Speaker 2: Pence on the first of January twenty twenty one, and 544 00:29:47,240 --> 00:29:51,160 Speaker 2: he said, you're too honest to his vice president. Don't 545 00:29:51,480 --> 00:29:56,160 Speaker 2: encounters like these based on notes from people like Mike 546 00:29:56,200 --> 00:29:59,040 Speaker 2: Pence make this actually fairly easy to prove. 547 00:30:01,000 --> 00:30:04,320 Speaker 12: Well, nothing is easy to prove in the court of law, 548 00:30:05,240 --> 00:30:08,560 Speaker 12: but I think it is as solid evidence as you 549 00:30:08,560 --> 00:30:12,880 Speaker 12: could possibly imagine for his state of mind, Trump's state 550 00:30:12,920 --> 00:30:16,560 Speaker 12: of mind and his intent, and it will be devastatingly effective. 551 00:30:16,600 --> 00:30:18,800 Speaker 12: I think in front of a jury, you know Trump's 552 00:30:18,840 --> 00:30:21,040 Speaker 12: lawyer saying over and over and over that he has 553 00:30:21,080 --> 00:30:23,720 Speaker 12: to prove these beyond reasonable doubt. Well, yeah, of course 554 00:30:23,800 --> 00:30:27,320 Speaker 12: that's true. That's the standard in every criminal case. But 555 00:30:27,400 --> 00:30:30,440 Speaker 12: that doesn't mean it's impossible. Plenty of criminals are convicted 556 00:30:30,480 --> 00:30:34,440 Speaker 12: beyond reasonable doubt. And what Jack Smith has put together 557 00:30:34,480 --> 00:30:39,720 Speaker 12: here in this forty five pays indictment is incredibly strong 558 00:30:39,840 --> 00:30:43,440 Speaker 12: evidence that Trump knew that what he was saying was false, 559 00:30:43,560 --> 00:30:46,160 Speaker 12: and he's got all kinds of it, he's got the 560 00:30:46,200 --> 00:30:49,560 Speaker 12: Vice president's contemporarious notes, and then, as we discussed earlier, 561 00:30:49,640 --> 00:30:53,360 Speaker 12: he's got these unindicted co conspirators who may well flip. 562 00:30:53,400 --> 00:30:55,640 Speaker 12: These are not people that provided a lot of or 563 00:30:55,680 --> 00:30:59,760 Speaker 12: any evidence to the January sixth Committee for Congress because 564 00:30:59,760 --> 00:31:03,960 Speaker 12: they STONEWALLD. But they can't stonewall Jack Smith. If they try, 565 00:31:04,000 --> 00:31:07,080 Speaker 12: they're going to jail. And so I think he's going 566 00:31:07,120 --> 00:31:09,360 Speaker 12: to have plenty of ammunition to bring when this goes 567 00:31:09,360 --> 00:31:09,720 Speaker 12: to trial. 568 00:31:09,840 --> 00:31:12,920 Speaker 2: Well, these names are something Rudy Giuliani, Johnny Easman, Sydney 569 00:31:12,960 --> 00:31:17,600 Speaker 2: Powell Rick. Are we going to hear or see indictments 570 00:31:17,840 --> 00:31:19,280 Speaker 2: for all of them who do not cooperate? 571 00:31:19,640 --> 00:31:23,440 Speaker 11: Well, I don't know much about how a special prosecutor operates, 572 00:31:23,520 --> 00:31:28,200 Speaker 11: but shot across the bow is a unindicted co conspirator 573 00:31:28,360 --> 00:31:30,680 Speaker 11: is not a term you want on your masthead. No, 574 00:31:30,760 --> 00:31:32,440 Speaker 11: this is a history one and the only thing that's 575 00:31:32,480 --> 00:31:35,760 Speaker 11: worse than that is an indicted co conspirator. And I 576 00:31:35,800 --> 00:31:38,240 Speaker 11: suspect that's a conversation you'll have with each one of 577 00:31:38,280 --> 00:31:41,920 Speaker 11: these characters, is that, Look, we can indict you, or 578 00:31:41,960 --> 00:31:43,000 Speaker 11: you can be a witness. 579 00:31:43,160 --> 00:31:47,360 Speaker 2: It's your choice. I'm Joe, Matthew and Washington. This is Bloomberg. 580 00:31:48,400 --> 00:31:51,760 Speaker 1: You're listening to the Bloomberg Sound on podcast. Catch the 581 00:31:51,800 --> 00:31:55,680 Speaker 1: program live weekdays at one Eastern on Bloomberg Radio, the 582 00:31:55,760 --> 00:31:59,080 Speaker 1: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 583 00:31:59,200 --> 00:32:01,920 Speaker 1: You can also listen and live on Amazon Alexa from 584 00:32:01,920 --> 00:32:05,800 Speaker 1: our flagship New York STATIONIA. Just say Alexa play Bloomberg 585 00:32:05,840 --> 00:32:06,560 Speaker 1: eleven thirty. 586 00:32:08,440 --> 00:32:11,520 Speaker 2: It was back in twenty nineteen September of twenty nineteen 587 00:32:11,560 --> 00:32:15,600 Speaker 2: that the Department of Energy took action finalizing a controversial 588 00:32:15,680 --> 00:32:20,200 Speaker 2: rule to ease efficiency standards for light bulbs that came 589 00:32:20,240 --> 00:32:24,440 Speaker 2: out of the Obama administration. So you know how your 590 00:32:24,520 --> 00:32:26,760 Speaker 2: light bulbs are like those twisty things now instead of 591 00:32:26,760 --> 00:32:30,280 Speaker 2: the old incandescent bulbs. I bring this up because it's 592 00:32:30,320 --> 00:32:35,080 Speaker 2: gone back again, and now the government is beginning enforcement 593 00:32:35,840 --> 00:32:39,560 Speaker 2: of its ban on most incandescent light bulbs. It starts 594 00:32:39,560 --> 00:32:42,680 Speaker 2: this week. This was a pet issue for Donald Trump, 595 00:32:42,880 --> 00:32:45,840 Speaker 2: Like you you know how the showers and the faucets right, 596 00:32:46,200 --> 00:32:47,280 Speaker 2: A big thing for light. 597 00:32:47,320 --> 00:32:50,600 Speaker 9: The light bulb, those new expensive light bulbs, I said, 598 00:32:50,600 --> 00:32:51,760 Speaker 9: what happened to the old ones? 599 00:32:51,800 --> 00:32:52,240 Speaker 1: They're better? 600 00:32:52,960 --> 00:32:55,800 Speaker 9: They said they were mandated out. I said why. Nobody 601 00:32:55,800 --> 00:32:58,680 Speaker 9: could explain why. I said, well, letting them back. The 602 00:32:58,760 --> 00:32:59,760 Speaker 9: light bulbs are back. 603 00:32:59,640 --> 00:33:02,080 Speaker 2: Now there's supposed to save money. They're supposed to save electricity, 604 00:33:02,600 --> 00:33:05,239 Speaker 2: cut a missions, cut a missions by many millions of 605 00:33:05,280 --> 00:33:08,560 Speaker 2: tons I guess of carbon in the next couple of decades. 606 00:33:08,600 --> 00:33:08,880 Speaker 9: But that. 607 00:33:10,320 --> 00:33:14,200 Speaker 2: Doesn't compare with the way they make you look. According 608 00:33:14,240 --> 00:33:15,480 Speaker 2: to the former president. 609 00:33:15,160 --> 00:33:17,680 Speaker 9: The light bulb people said, what's with the light bulb? 610 00:33:17,760 --> 00:33:20,480 Speaker 9: I said, he's the story and I looked at it, 611 00:33:21,440 --> 00:33:24,400 Speaker 9: the bulb that we're being forced to use. Number one 612 00:33:24,480 --> 00:33:28,200 Speaker 9: to me, most importantly, the light's no good. I always look. 613 00:33:28,040 --> 00:33:30,120 Speaker 2: Orange, that's what we're talking about. 614 00:33:31,720 --> 00:33:32,400 Speaker 9: And so do you. 615 00:33:33,320 --> 00:33:33,880 Speaker 1: Well, I don't know. 616 00:33:33,960 --> 00:33:37,720 Speaker 2: The light is the worst. So it's a warmer light 617 00:33:37,800 --> 00:33:41,280 Speaker 2: in the old bulbs. Does this bother you get filters 618 00:33:41,280 --> 00:33:42,200 Speaker 2: on the bulbs at home? 619 00:33:42,680 --> 00:33:45,600 Speaker 3: You know, I'm not sure I've ever never noticed. Time 620 00:33:45,680 --> 00:33:47,920 Speaker 3: to pay attention, he said. 621 00:33:47,760 --> 00:33:53,200 Speaker 2: It makes you orange too. The rule finalized last year. 622 00:33:53,920 --> 00:33:55,600 Speaker 2: By the way, you're not going to go to jail 623 00:33:55,680 --> 00:33:57,239 Speaker 2: if you're one of those people, and I know some 624 00:33:57,280 --> 00:33:59,360 Speaker 2: of them, but hoarding the old light bulbs they are 625 00:33:59,400 --> 00:34:02,880 Speaker 2: out there. This is actually for the makers and providers of. 626 00:34:02,960 --> 00:34:06,200 Speaker 3: Companies, Boomers not people. I will say though, that this 627 00:34:06,320 --> 00:34:08,600 Speaker 3: is not a bypart, is an issue Joe's we talk 628 00:34:08,640 --> 00:34:12,440 Speaker 3: about Washington Republicans think this might be part of the 629 00:34:12,480 --> 00:34:14,480 Speaker 3: assault on Americans home appliances. 630 00:34:14,520 --> 00:34:17,800 Speaker 2: Well, don't get me started on the gas doves, the dishwashers. 631 00:34:17,800 --> 00:34:20,520 Speaker 2: He's got a routine on that too. They press the 632 00:34:20,520 --> 00:34:24,320 Speaker 2: button over and over, bing bing. I better leave now 633 00:34:24,680 --> 00:34:29,239 Speaker 2: with Kaylee Lines, I'm Joe Matthew. Thanks for listening to 634 00:34:29,239 --> 00:34:31,600 Speaker 2: the Sound On podcast. Make sure to subscribe if you 635 00:34:31,640 --> 00:34:34,520 Speaker 2: haven't already, at Apple, Spotify, and anywhere else you get 636 00:34:34,560 --> 00:34:37,600 Speaker 2: your podcasts, and you can find us live every weekday 637 00:34:37,600 --> 00:34:41,000 Speaker 2: from Washington, DC at one pm Eastern Time at Bloomberg 638 00:34:41,080 --> 00:34:43,640 Speaker 2: dot com.