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Speaker 2: Bringing you all of the information you need today, not
Speaker 2: just Wall Street, which boy does not feel good right now,
Speaker 2: and that's why we stay in touch with Charlie throughout
Speaker 2: the fastest show in politics to see what's happening on
Speaker 2: this job's day.
Speaker 3: Of course, it has its own look.
Speaker 2: The news about Donald Trump breaking a short time ago,
Speaker 2: we'll get into this.
Speaker 3: He is not going to jail.
Speaker 2: If you listen to this broadcast or watch us on YouTube,
Speaker 2: you knew that already. But he will enter the White
Speaker 2: House with a criminal record sentencing a short time ago.
Speaker 2: This is the New York hush money case, the Stormy
Speaker 2: Daniels case, sentence to no jail time. We'll have more
Speaker 2: on that coming up with Wendy Benjamin s want to
Speaker 2: dig further into jobs though this is big stuff today
Speaker 2: obviously looking at the market reaction and trying to get
Speaker 2: a sense of exactly where this job market is as
Speaker 2: Joe Biden leaves the White House. That's the last one.
Speaker 2: That's the last report you're going to get. We spent
Speaker 2: some time earlier today knowing that this number blew the
Speaker 2: doors off here the most jobs since March, unemployment rate
Speaker 2: down unexpectedly. The Acting Labor Secretary, Julie Sue spoke with
Speaker 2: us earlier on Bloomberg with Katie Greifeld.
Speaker 4: Let's listen today's numbers, following on the heels of consistent, steady,
Speaker 4: stable growth, sixteen point seven million jobs sin since President
Speaker 4: came into office. He is the only president that has
Speaker 4: had positive job growth every single month of his presidency.
Speaker 4: And that is what we hand off because we knew
Speaker 4: that that's what the American people deserved, and we knew
Speaker 4: that if we focused on what was good for workers first,
Speaker 4: that we could have recovery like no other. And that's
Speaker 4: certainly what this month's numbers reflect.
Speaker 5: Yeah, I believe we're looking at forty eight months with
Speaker 5: consecutive payroll gains, and that of course is going in
Speaker 5: data going back to nineteen thirty nine. I do want
Speaker 5: to talk about the manufacturing sector because if you're looking
Speaker 5: for some pain. You're going to find it there in
Speaker 5: the manufacturing sector shedding jobs again in December. What do
Speaker 5: you think is going on specifically in that industry. Can
Speaker 5: we draw a line between those job losses to all
Speaker 5: of the different labor disputes that we've been seeing.
Speaker 4: No, I would draw the line to really decades of
Speaker 4: economic policies, trade policies that have not favored workers and
Speaker 4: of commitment to jobs, which is also why President Biden
Speaker 4: came in and said we're going to invest in manufacturing.
Speaker 4: As a result, the recovery that we've seen since twenty
Speaker 4: twenty one is the only economic recovery in this century
Speaker 4: in which the manufacturing sector actually bounced back from a
Speaker 4: crisis like the one we inherited, and so there's more
Speaker 4: work to do, there's no question about it. And we
Speaker 4: know that workers in states where manufacturing has been the
Speaker 4: foundation need continued investments, and there's some uncertainly about that
Speaker 4: because the incoming administration has raised questions about whether those
Speaker 4: investments would continue. But what we've seen is that doing that,
Speaker 4: having the Inflation Reduction Act right, having investments in bringing
Speaker 4: manufacturing back to the United States into our heartland is
Speaker 4: the right way to build the economy.
Speaker 2: Julie Sue's last job's day, the acting Labor Secretary with
Speaker 2: us earlier today on Bloomberg with the ambience of the
Speaker 2: fire alarm ringing at the labor department?
Speaker 3: Is there symbolism there?
Speaker 6: By?
Speaker 2: The way can we get an indoor studio for the
Speaker 2: next labor secretary? It was like three degrees when she
Speaker 2: was out there in the snow and the wind, and
Speaker 2: the whole thing is it's not like that at every
Speaker 2: agency they're always out on the porch. Right, there's beautiful
Speaker 2: shot on TV, but the poor secretary ends up freezing.
Speaker 2: Maybe there's symbolism there too. We better ask Anna Wong,
Speaker 2: who is our winner today on the Price is Right,
Speaker 2: Bloomberg's chief US economist at Bloomberg Economics.
Speaker 3: You came closest.
Speaker 2: You have the highest consensus, highest number in the consensus
Speaker 2: when it comes to this job before.
Speaker 3: What do you know that no one.
Speaker 2: Else does too?
Speaker 7: Job market is warming the winter around us, so that's
Speaker 7: the only hot things. So that we track high frequency
Speaker 7: data and that data. When I saw that data a
Speaker 7: couple of weeks ago, I was surprised by this broad based,
Speaker 7: unseasonablely strong hiring across sector. So this is why we
Speaker 7: made this forecast. Our forecast is always made based on
Speaker 7: actual data, and so I think there is genuine signs
Speaker 7: that the labor market is stabilizing. And Joe, you know me,
Speaker 7: I have been pretty down in the labor market for
Speaker 7: most of last year. I would still say that, you know,
Speaker 7: the non farm payroll is still overstating the degree of hiring.
Speaker 7: An in the next month report, we're going to see
Speaker 7: benchmark revisions which will be downward revising most of the
Speaker 7: data last year. Nonetheless, I will say that this report
Speaker 7: is genuinely good and it would be rational to be
Speaker 7: hopeful about the future.
Speaker 2: Well, yeah, the market's freaked out. The S and P
Speaker 2: five down two percent, same as the Nasdaq. The VIX
Speaker 2: is up ten percent. Are we given up on interest
Speaker 2: rate cuts?
Speaker 7: I think the I think the fix in the stock
Speaker 7: market is reacting to definitely the fixing come traders pricing
Speaker 7: out one whole seven exactly. So, so immediately after the
Speaker 7: payrolls report, the traders were prising out one rate cut
Speaker 7: out of twenty twenty five. And now the earliest for
Speaker 7: a rate cut is September now, so it would be
Speaker 7: a pretty long pause.
Speaker 2: What's inside this report that has your attention when it
Speaker 2: comes to ages, when it comes to participation.
Speaker 8: What should we know?
Speaker 7: Yeah, I think that, you know, the private sector employment
Speaker 7: jump in the household survey really caught my eyes because
Speaker 7: I thought that the household survey was going to show
Speaker 7: more weakness because it doesn't suffer from the overstatement problems
Speaker 7: measurement problems as the establishment survey. But we saw actually
Speaker 7: a very strong showing of private sector hiring, in particular
Speaker 7: the increase in hiring and retail trade sector. And I
Speaker 7: have to wonder whether some of that reflect that firms
Speaker 7: are front running the tariffs, and we have seen anecdotes
Speaker 7: of you know, firms stocking up before expectations of higher
Speaker 7: rate tariffs, and therefore that's basically boosting the logistics sector
Speaker 7: and retail sector.
Speaker 2: So front running like that though, can lead to weakness
Speaker 2: later in the years.
Speaker 9: Yes, exactly.
Speaker 7: So that if that that's the reason why there was
Speaker 7: such a strong showing in the trade and logistics sector,
Speaker 7: then one shouldn't expect this increase to be endurable.
Speaker 2: Fascinating. You close the border, you conduct a mass deportation,
Speaker 2: and what happens to the job market, then.
Speaker 7: Well, you know. So if everything stays constant, as an
Speaker 7: economist would say, then if you reduce the labor force,
Speaker 7: you would actually tend to reduce the unemployment rate. However,
Speaker 7: it really depends on the details, which is where do
Speaker 7: these numigrants tend to work? So I suppose that they
Speaker 7: tend to work in construction sector, which is undergoing a downturn,
Speaker 7: particularly in the South, then a reduction in the labor
Speaker 7: supply geared toward the construction sector actually would not really
Speaker 7: boost prices in the construction sector given the slack in
Speaker 7: the market there.
Speaker 2: There's been a greater conversation, and I don't know if
Speaker 2: this come to the form of legislation or not about
Speaker 2: work vices as a new element of the debate. Let's
Speaker 2: say lawmakers crack down on border security but also raise
Speaker 2: the cap on H one b's. Would it have a
Speaker 2: meaningful impact on the job market or would that be
Speaker 2: isolated to the tech sector and not show up in
Speaker 2: national numbers like these?
Speaker 7: Yeah, I mean from a pure economous perspective, so the
Speaker 7: economy needs more immigrants in sector that's experiencing shortages, and
Speaker 7: also it would be great for the economy to receive
Speaker 7: more immigrants in sectors that innovate. So in high tech
Speaker 7: sphere we have a lot of form born immigrants who
Speaker 7: are contributing significantly to TFP productivity increase.
Speaker 2: So I think that you ask Elon Musk right, right.
Speaker 7: Exactly, So raising the cap so allow more to come
Speaker 7: in actually would be great for the economy.
Speaker 2: And would actually show up in numbers. Though, would you
Speaker 2: see something in the household employment surveys where you'd actually
Speaker 2: make a dent in the data on a jobs day
Speaker 2: like this.
Speaker 7: Well, I think not yet. So what we have seen
Speaker 7: is a labor force decline in the last in November
Speaker 7: and October that's more driven by cyclical hiring weaknesses and construction,
Speaker 7: sexual leisure and hospitality, which seem to have reversed in December.
Speaker 7: But I would say that the first sign of contraction
Speaker 7: and labor supply would be more due to cyclical forces
Speaker 7: like slow down and hiring rather than deportations.
Speaker 2: Anna Wong always a pleasure. It's a clinic with Anna Wong,
Speaker 2: whose number in the consensus was the highest. We should
Speaker 2: have played plinko while we have the chance with Anna.
Speaker 2: Thank you so much.
Speaker 1: You're listening to the Bloomberg balance of power podcasts. Catch
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Speaker 9: It looks like a labor market that's in pretty good
Speaker 9: shape as a new administration gets ready to come in.
Speaker 9: Not just the two hundred and fifty six thousand on payrolls,
Speaker 9: but an unemployment rate that went down to four point
Speaker 9: one percent.
Speaker 2: Yeah, it's obviously this has been a difficult time for
Speaker 2: forecasting all the way around, and it's an opportunity to
Speaker 2: spend some time with Ben Harris, who is with us
Speaker 2: at the desk here in Washington, vice president director Economic
Speaker 2: Studies Program at Brooking's former Assistant Secretary of the Treasury
Speaker 2: for Economic Policy.
Speaker 3: Welcome back. It's great to see you. Happy jobs Day,
Speaker 3: Happy job say.
Speaker 2: At least we're not outside shivering with Julie suit exactly.
Speaker 2: People were so far off on this, I will say,
Speaker 2: Anna Wong at the highest number in the consensus at
Speaker 2: Bloomberg Economics, how come we can't get close to these
Speaker 2: It's not just this month where we're just far off
Speaker 2: the mark in the market.
Speaker 7: Yeah.
Speaker 10: So when we're talking about payrolls, I think one of
Speaker 10: the things that makes it so difficult is immigration. And
Speaker 10: research coming out of Brooking showed that when we're getting
Speaker 10: these really high payroll prints at the beginning part of
Speaker 10: the recovery, one of the reasons why you could see
Speaker 10: the high prints was because we had so many people
Speaker 10: coming into the country, both seeking asylum and through illegal means,
Speaker 10: and so I think it really complicates things. I mean,
Speaker 10: it could mean we'll see an extra one hundred thousand
Speaker 10: jobs in a month that we just didn't anticipate on
Speaker 10: the household side. So for the unemployment rate, that's just
Speaker 10: a story of non response. And you saw this coming
Speaker 10: out of Governor Bowman's comments from the other day where
Speaker 10: she said, look, we just can't rely on the U
Speaker 10: three like we used to. And this is true of
Speaker 10: surveys across the spectrum, whether we're talking about the survey
Speaker 10: of consumer finances coming out of the FED or we're
Speaker 10: talking about consumer confidence. People just don't answer surveys the
Speaker 10: way they used to, and I think that makes forecasting
Speaker 10: that much more difficult.
Speaker 9: Okay, So forecasting is tough, but then you get the
Speaker 9: data and it paints a story for those who have
Speaker 9: to make decisions around it, like the Federal Reserve. The
Speaker 9: market today is reading this data as a sign that
Speaker 9: this is not an economy that needs the FED to
Speaker 9: ease policy as they have been doing. Some on the
Speaker 9: street are suggesting no cuts this year. Perhaps a height
Speaker 9: could be back on the table. How do you see it?
Speaker 10: Bent, Yeah, So the way that markets seem to be
Speaker 10: looking at this is that we will be in a
Speaker 10: period of an elongated pause and the Fed will need
Speaker 10: some sort of drastic data print to push us off that.
Speaker 10: So you either need to see something happened on the
Speaker 10: inflation side to get us back into the hiking cycle,
Speaker 10: or potentially, you know, we'll need to see several prints
Speaker 10: of weakness in order to see cuts that might materialize.
Speaker 10: Right now, I think markets are expecting cuts either in
Speaker 10: the summer or potentially in the early fall in the
Speaker 10: September meeting, But for right now, it feels like we're
Speaker 10: an elongated pause.
Speaker 2: Well, of course, there are a lot of folks that
Speaker 2: will tell you there's a big tank of gasoline that
Speaker 2: Donald Trump's about to pour on that fire and that
Speaker 2: reinflation will be the buzzword next year after Trump tax
Speaker 2: cuts or extended tariffs are implemented, deficits explode.
Speaker 10: Were you on that, Yeah, I mean I would describe
Speaker 10: this economy as that don't mess it up economy. And
Speaker 10: it was similar to the last time, I mean Trump
Speaker 10: came into office. The unemployment rate had been falling. It
Speaker 10: was four point seven percent when he was inaugurated, but
Speaker 10: had been falling for years. The economy right now is
Speaker 10: even better than it was then. So you've got household
Speaker 10: balance seats are really strong, Debt relative to disposable income
Speaker 10: is really low. You know, there's some bad news as
Speaker 10: far as transitions into delinquencies on credit cards. We really
Speaker 10: have to squint in order to find any sort of
Speaker 10: story which suggests that the US consumer's going to slow
Speaker 10: down anytime soon.
Speaker 3: And then you're seeing similarly, you're seeing nearly.
Speaker 10: A perfect labor market. I mean, we're seeing real wage gains.
Speaker 10: You've got plenty of jobs. You didn't have that type
Speaker 10: of imbalance like you saw in twenty twenty when they're
Speaker 10: just you know, we're just so many openings per worker.
Speaker 10: So we have this really strong, healthy labor market, and
Speaker 10: that means, you know, my advice, not that Trump's asking
Speaker 10: for it, but it's like, just don't mess this up.
Speaker 10: And so there's real concerns around tariff policy, there's real
Speaker 10: concerns around overborrowing through a reconciliation pill, and I think
Speaker 10: there's real concerns that are about being too strict on
Speaker 10: immigration policy and possibly seeing net out migration, which is
Speaker 10: something we haven't seen in my lifetime.
Speaker 9: Well, so as we consider this notion that maybe everything
Speaker 9: is just right and we're kind of in this Goldiglocks
Speaker 9: phase right now, it doesn't seem though Trump necessarily agrees
Speaker 9: with that. He had a press conference in mar A
Speaker 9: Lago earlier this week in which he said interest rates
Speaker 9: are far too high. And we actually asked the former
Speaker 9: House Financial Services Committee Chairman Patrick McHenry about that on
Speaker 9: this program earlier this week. This is what he told us.
Speaker 11: Mean tweets that does not make monetary policy. And the
Speaker 11: board of governors at the Feederal Reserve have long terms,
Speaker 11: as Congress designed so they can have this longer term view.
Speaker 11: And I think Jay pal has done a fabulous job
Speaker 11: is share the FED. But this president will speak his
Speaker 11: mind publicly where other presidents privately complained and that is
Speaker 11: a big distinction between now and what was then.
Speaker 9: So when we consider that distinction in this question of
Speaker 9: the independent operation of monetary policy setting in the United
Speaker 9: States for the FED, what would it mean if the
Speaker 9: data is suggesting the FED can stand pat but the
Speaker 9: President of the United States is saying no interest rates
Speaker 9: need to go lower.
Speaker 10: Well, this has been in my mind in part because
Speaker 10: you saw President Carter's funeral yesterday and thinking about some
Speaker 10: of the lessons that came out of the administration, and yeah, Vulgal,
Speaker 10: So one of the lessons that came out with Look,
Speaker 10: if you want to fight inflation, the first, second, and
Speaker 10: third best thing to do is to appoint a credible
Speaker 10: FED share and let that share do their job.
Speaker 3: And so, you know, I think that a lot of
Speaker 3: people do.
Speaker 10: Worry about FED independence under this administration, but that's something
Speaker 10: we will probably not have to worry about until the
Speaker 10: middle part of twenty twenty six when Palace term is up.
Speaker 10: When you look at the names of possible people who'd
Speaker 10: be considered for FED share, they are all credible people,
Speaker 10: people like Kevin Hassett and Kevin Warsh and Mark Summerlin
Speaker 10: and people Larry lindsay, people, some of them have political backgrounds,
Speaker 10: but all credible people.
Speaker 3: And so.
Speaker 10: Obviously Tonald Trump doesn't want to repeat some of the
Speaker 10: sins of the nineteen seventies the early part of the
Speaker 10: decade before or does the Fed?
Speaker 3: Or does the Fed?
Speaker 10: And my senses is that you have to look at
Speaker 10: what Donald Trump does, not so much what he says,
Speaker 10: whether you're talking about a trade war, you're talking about
Speaker 10: a corporate tax cut.
Speaker 3: I mean, sometimes his bark is much.
Speaker 10: Worse than this.
Speaker 9: Seriously and literally, Oh yes.
Speaker 2: I've heard that people. Well you said speaking of if
Speaker 2: you said something important referred to immigration. And we're still
Speaker 2: trying to get a sense of how serious or literal
Speaker 2: Donald Trump is about mass deportation. Let's say we close
Speaker 2: the border. Let's say this mass deportation takes place. Caps
Speaker 2: are not lifted on H one b's whereas the job market.
Speaker 10: Yes, So one thing I realized coming out of research
Speaker 10: out of Brookings is that you don't have to have
Speaker 10: this oppressive deportation scheme in order to get net out migration.
Speaker 10: So you can do other things right, So you can
Speaker 10: put more agents of the border, you can transition people
Speaker 10: who are here legally into illegal status, they're going to leave.
Speaker 10: The rhetoric I think has a chilling effect, and you
Speaker 10: can have people who are here legally who decide they
Speaker 10: want to leave because it's no longer a spitable place
Speaker 10: to legal immigrants. And so pretty quickly, even without these
Speaker 10: mass deportation programs, you can get to net out migration,
Speaker 10: a shrinking of the labor force, which might precipitate something
Speaker 10: which we thought we might see in the last administration
Speaker 10: but didn't, which is a wage price spiral. And so
Speaker 10: if we get to the point where the labor market
Speaker 10: is so tight that you start to anticipate future tightness
Speaker 10: down the road, companies start giving raises prematurely, consumers start
Speaker 10: buying anticipation, you know, then that's that's something which we
Speaker 10: haven't dealt with in a long time, and that possibly
Speaker 10: cuddled coupled with a non credible FED, or a FED
Speaker 10: which is seen as being political, it could be terrible
Speaker 10: news for inflation.
Speaker 9: I want to talk about something else regarding the incoming
Speaker 9: administration and those affiliated with it that has been in
Speaker 9: the news this week. Elon Musk talking about the Department
Speaker 9: of Government efficiency maybe pulling back expectations a little bit.
Speaker 9: Maybe it's not going to be two trillion dollars in
Speaker 9: spending cuts, but if they aim for two, they could
Speaker 9: get one trillion dollars. Even if we assume that that
Speaker 9: level is achievable, one trillion dollars is not an inconsequential
Speaker 9: amount of money. When whether they're talking about pulling back
Speaker 9: the scope and scale of the federal government, what would
Speaker 9: that actually do economically if that drastic kind of cut
Speaker 9: is implemented, Well.
Speaker 3: It depends on the nature of the cuts.
Speaker 10: And my guess is that based on the type of
Speaker 10: cuts are considering, which is non defense discretionary spending, which
Speaker 10: is a pretty small share of the overall federal budget,
Speaker 10: these are the type of things that a tend to
Speaker 10: make us a richer country, So investments in education, R
Speaker 10: and D, science, spending cancer research that improves health.
Speaker 3: I think that that's more or less.
Speaker 10: Just a hit on our natural national prosperity down the road.
Speaker 10: If they're talking about cuts to medicare to social security,
Speaker 10: that has serious implications for the wellbeing of retired households,
Speaker 10: but less so for the future prosperity of our country.
Speaker 2: This was the final jobs report, while Joe Biden is
Speaker 2: in office. What should Donald Trump prepare for in the
Speaker 2: early phases of his administration. We'll get I guess what
Speaker 2: would technically be Joe Biden's last jobs reporter partial month
Speaker 2: while he's in office. How do you come off.
Speaker 10: Data like this, Well, I mean, you're handed a terrific economy,
Speaker 10: and I would just encourage those who are in policy
Speaker 10: making positions to move slowly when it comes to tariff policy.
Speaker 10: I looked the last administration, the last Trump administration, where
Speaker 10: the average tariff rate went up about one hundred fifty
Speaker 10: basis points. It was not a trade war, it was
Speaker 10: a trade war with China. So the average terrify on
Speaker 10: Chinese imports went from three percent up to eleven percent.
Speaker 10: So certainly consequential for China. But if you're talking about
Speaker 10: goods it came from anywhere but China, the tariff movements
Speaker 10: were almost zero. And so my hope is that he
Speaker 10: doesn't come in too strong with changes in our trade policy.
Speaker 10: My hope is that they are as worried about the
Speaker 10: deathsit as many economists are, and you don't see big
Speaker 10: increases in issuance coming out of a reconciliation package. I
Speaker 10: think right now, markets are expecting around five trillion dollars
Speaker 10: in new borrowing. If you came in with seven trillion dollars,
Speaker 10: I really I think theoud royal fancial markets so like,
Speaker 10: we have to step back, take a pause. We don't
Speaker 10: know what to do with all this new issuance. So
Speaker 10: I would say move slowly, honor the terrific stay of
Speaker 10: the economy and realize that all this rhetoric Nestley isn't
Speaker 10: a good thing for business conditions, isn't a good thing
Speaker 10: for American households, and maybe dall it back a bit.
Speaker 2: Donald Trump's always watching, so he'll get Yeah, he definitely
Speaker 2: cares what Ben Harris, thank you so much. It's great
Speaker 2: to see you. Let's compare notes in a couple of weeks.
Speaker 2: We do have headlines from the White House, Kaylee as
Speaker 2: Joe Biden is briefed on the wildfires in California, FEMA
Speaker 2: turning on its Critical Needs Assistant program, and they are
Speaker 2: making some progress on containment in the last twenty four hours.
Speaker 2: We'll have more ahead here on Balance of Power on Bloomberg.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
Speaker 1: us live weekdays at noon and five pm. Eastern on
Speaker 1: almal Coarckley and Android Auto with the Bloomberg Business App.
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Speaker 1: us live on YouTube.
Speaker 3: Thanks for being with us here.
Speaker 2: It's Friday on the fastest show in politics. This is
Speaker 2: Balance of Power and I'm Joe Matthew alongside Kaylee Lines
Speaker 2: in Washington. We have our signature panel with us. Kayley
Speaker 2: with a lot more to talk about here. It's all
Speaker 2: on to mar A Lago this week, and are you
Speaker 2: going to Florida?
Speaker 9: Did not get a little warm weather like half the
Speaker 9: House of Representatives.
Speaker 2: The Republican Conference is going along with one Democrat by
Speaker 2: the name of John Fetterman, who is reaching across the
Speaker 2: aisle here. He says he wants to be the next
Speaker 2: Pope of Greenland. We can save the comedy for our
Speaker 2: signature panel. They're with us here Rick Davis and Genie Shanzano.
Speaker 2: He is Republican strategist and partner at Stone Court Capital.
Speaker 2: Genie is our democratic analyst of course, political science professor
Speaker 2: at Iona University and Senior Democracy Fellow with the Center
Speaker 2: for the Study of the Presidency and Congress.
Speaker 3: I'm compelled by this.
Speaker 2: John Fetterman situation here, Genie, I mean it was actually
Speaker 2: news that the Republican Main Street Partnership would have a
Speaker 2: representative at Marra a Lago. They're coming from the center,
Speaker 2: they're coming from the right, and we've got a Democrat
Speaker 2: from Pennsylvania there.
Speaker 3: What's he doing?
Speaker 12: Yeah, I think it makes sense. He's gotten some criticism,
Speaker 12: as you can imagine, from the left for going, but
Speaker 12: he has said, look, it is this is the incoming
Speaker 12: president of the United States. I am from a fifty
Speaker 12: to fifty state. It is incumbent on me to open
Speaker 12: these conversations and continue them. And this is sort of
Speaker 12: a really interesting trajectory of Fetterman. You know, he was
Speaker 12: often seen initially as a real progressive lightning rod and attacked,
Speaker 12: but since I pay attention to conservative media over the
Speaker 12: last year or so, he's become really something of a
Speaker 12: darling of the conservative media. He was the first Senator
Speaker 12: the other day to support first Democrat, I should say
Speaker 12: senator to support the Lincoln Riley Act, which pertains to
Speaker 12: border security. So I think he is really making a
Speaker 12: name for himself and trying to lead the way to
Speaker 12: work with Donald Trump and the Republicans. When they can
Speaker 12: on issues they agree on, and certainly for John Fetterman,
Speaker 12: there's a lot from Israel and the border to the economy,
Speaker 12: so I'll think it makes sense.
Speaker 9: Well, it makes me wonder, Rick, if we're going to
Speaker 9: be having to watch the way John Fetterman votes and
Speaker 9: the confirmation votes for Trump's nominees. Is he going to
Speaker 9: be the one Democrat potentially that crosses the line on
Speaker 9: some of the more controversial ones.
Speaker 13: I don't know about the more controversial ones, but he
Speaker 13: has said publicly I will vote for Donald Trump confirma
Speaker 13: nominees to be confirmed. And you know the proviso to
Speaker 13: that is obviously, you know, pending background checks and things
Speaker 13: like that. But at the end of the day, I
Speaker 13: think he is opening up this session of the Senate
Speaker 13: basically saying I'm here to cooperate and get stuff done.
Speaker 13: Tired of the politics of the past, the division, the partisanship,
Speaker 13: and let's get something going on here that can change.
Speaker 8: Now.
Speaker 13: What I think is really interesting is here's a guy,
Speaker 13: John Fetterman, who's going down to Marlago basically preach bipartisanship,
Speaker 13: and there is not a clear leader of the Democratic
Speaker 13: Party who will be the loyal opposition at this point
Speaker 13: to Donald Trump. I mean, you've just had a presidential campaign,
Speaker 13: and the Democratic Party seems completely without a rudder to say,
Speaker 13: we're not for what he's trying to accomplish. And that
Speaker 13: is just from a purely political point of view, a
Speaker 13: real missing element to this Democratic Party.
Speaker 2: You know, we talk about bipartisanship a lot around here.
Speaker 2: Jeanie is John Fetterman the smartest politician in Washington. Look
Speaker 2: at this tweet he just put up here with his
Speaker 2: Republican counterpart in the Senate Pennsylvania, David McCormick. He's retweeting
Speaker 2: McCormick here, and he writes, two dudes, two better halves, bipartisanships,
Speaker 2: sixty seven counties, a stronger Pennsylvania. They went out to
Speaker 2: dinner together. I know they're had some diner of something here,
Speaker 2: which really shouldn't take the wives. Jeannie with the wives. Yes,
Speaker 2: look at this, Look at the smiles. Does he have
Speaker 2: something figured it out?
Speaker 6: They do?
Speaker 12: And I'm so glad you raised that tweet because again
Speaker 12: he got so much flack for going and eating and
Speaker 12: sitting with you know, Dave McCormick and his wife and
Speaker 12: Fetterman and his wife, But I think he is onto something.
Speaker 12: The reality is is Pennsylvania is a big, complicated state.
Speaker 12: It's a fifty to fifty state, and to Fetterman and
Speaker 12: McCormick's points, they represent the entire state, and so I
Speaker 12: think it's incumbent on him to work with Dave McCormick
Speaker 12: and you know, try to do what's best for Pennsylvania
Speaker 12: in the country. The other part of this is I
Speaker 12: agree with them on bringing civility back to Washington. We
Speaker 12: need people to bring civility back. And a few weeks
Speaker 12: ago Fetterman, I think he was talking on EBC. He said, look,
Speaker 12: I'm not rooting against Donald Trump. I want what's best
Speaker 12: for my state and for the country. And I think
Speaker 12: that's approach. We hope all Americans, and certainly are representatives
Speaker 12: in Congress take to Rick's point, and it's a good one.
Speaker 12: Democrats also have to pick and choose their battles, and
Speaker 12: they do need somebody to stand up when Donald Trump
Speaker 12: is doing something or the Republicans are that's against the
Speaker 12: interest of the lower middle class and to say so
Speaker 12: and to you know, represent the opposition. And they're going
Speaker 12: to have to find their way to do that because
Speaker 12: they don't have a lot of leadership there, although they
Speaker 12: do have Hockem. Jeffries and they have Chuck Schumer.
Speaker 9: Well Joe as Genie talks about civility in Washington. We
Speaker 9: arguably saw that on display yesterday when the state funeral
Speaker 9: services for former President Jimmy Carter were held to the
Speaker 9: National Cathedral and all five living presidents were an attendant
Speaker 9: sitting in pews together, talking, maybe even laughing together in
Speaker 9: the case of Donald Trump and Barack Obama. And Donald
Speaker 9: Trump actually spoke about that interaction last night.
Speaker 14: It did look very friendly. I must say, I didn't
Speaker 14: realize it. I didn't realize it how friendly it looks.
Speaker 14: I saw it on your wonderful network just a little
Speaker 14: while ago before I came in, and I said, boy,
Speaker 14: they looked like two people that like each other.
Speaker 6: And we probably do.
Speaker 14: We have little different philosophies, right.
Speaker 6: But we probably do.
Speaker 14: I don't know. We just got along, but I got
Speaker 14: along with just about everybody and that we you know,
Speaker 14: we met backstages, you know, before we went on, and
Speaker 14: I thought it was a beautiful service.
Speaker 6: But we all got along very well, which is good.
Speaker 9: They probably do like each other. Rick Davis, you buy
Speaker 9: that or was this a one day only thing.
Speaker 13: Oh, You're gonna need experts much more capable of than
Speaker 13: I to determine whether or not Barack Obama and Donald
Speaker 13: Trump like each other. That being said, I mean, you know,
Speaker 13: it is a celebration of our institutions when you can
Speaker 13: have these former presidents in a pew together and a
Speaker 13: fight doesn't break out right after an election. Kudos to
Speaker 13: Jimmy Carter for bringing these people all together, and maybe
Speaker 13: that does usher in an era of good feeling. I
Speaker 13: mean this point about Fetterman. I mean, up until this election,
Speaker 13: we only had five states with split delegations in the
Speaker 13: United States Senate where there was one Republican and run Democrat.
Speaker 13: We live in a hyperpartisan, divided country, and all of
Speaker 13: a sudden we start to see a little movement toward
Speaker 13: the center, even amongst Republicans, you know, which may be
Speaker 13: a good reason to have them all down to Florida
Speaker 13: for a cold weekend in Washington, that's right.
Speaker 2: I don't know Genie your take on this. By the way,
Speaker 2: I'm not sure if there's a stage in the National
Speaker 2: Cathedral that would justify a backstage. It wasn't a show.
Speaker 2: It was a funeral yesterday. But nonetheless, I'd love to know,
Speaker 2: by the way, what Donald Trump and Mike Pence said
Speaker 2: to each other when they shook hands.
Speaker 3: But what do you think, is.
Speaker 2: He getting soft in his age or is this the
Speaker 2: mainstreaming of Donald Trump or what's happening.
Speaker 12: Yeah, I wouldn't say he's getting soft, but you guys know,
Speaker 12: I love the New York Post. Cheers to the New
Speaker 12: York Post. And they had a lip reader there, and
Speaker 12: the lip reader had some very interesting things to say
Speaker 12: that Obama and Trump were talking about. Apparently, he said,
Speaker 12: we need to find a quiet place later in the
Speaker 12: day to discuss a matter of importance. So who knows
Speaker 12: what they were discussing. There was sort of speculation it
Speaker 12: was like an international agreement. So you know, remember like
Speaker 12: the liver readers, the body language folks that come on.
Speaker 12: I love that, So who knows what they were discussing.
Speaker 12: But you know, the reality is is that there was
Speaker 12: an interaction with Donald Trump to your point, and Mike Pence,
Speaker 12: but Karen Pence not so much, and who can blame her?
Speaker 12: After January sixth, so a lot of intrigue in the
Speaker 12: personal space there and I thought it was fascinating.
Speaker 9: Yeah, no handshake offered by the former second lady.
Speaker 2: Oh that's correct, she was a smile.
Speaker 9: Yeah, not down for that. Yesterday, Jeanie Schanzeno and Rick Davis,
Speaker 9: our signature political panel, thanks as always for joining us.
Speaker 9: Of course, they'll be back for more in the late
Speaker 9: edition of Ballads of Power coming up at five pm.
Speaker 9: But before we go, in this early edition, we got
Speaker 9: to talk about TikTok. It was arguments heard at the
Speaker 9: Supreme Court today. I'm seeing the courts necessarily anti ban
Speaker 9: at this point.
Speaker 2: Donald Trump may not like the way this works out.
Speaker 2: We may not be blocking the talk. We'll find out next.
Speaker 2: On Bloomberg.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch
Speaker 1: us live weekdays at noon and five pm. E's durn
Speaker 1: on Apple, Cockley and Android Auto with the Bloomberg Business app.
Speaker 1: You can also listen live on Amazon Alexa from our
Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 2: Today is the sentencing of no jail time for Donald Trump.
Speaker 2: This is the hush money case, Kayley, the Stormy Daniels
Speaker 2: case in New York. He had asked the Supreme Court
Speaker 2: to intervene, yep, and no such luck. Even Amy Comb
Speaker 2: Barrett took a pass on that. So he was in
Speaker 2: fact in a sentencing hearing virtually and we heard from
Speaker 2: the President elect at least an audio form.
Speaker 3: Listen.
Speaker 6: This has been a very terrible experience.
Speaker 14: I think it's been a tremendous setback for New York
Speaker 14: and the New York court system.
Speaker 6: This is a case that Alvin Bragg did not want
Speaker 6: to bring. He thought it was, from what I read
Speaker 6: and from what I hear, inappropriately handled before he got there.
Speaker 9: But of course the case was brought, it was tried,
Speaker 9: and a jury in New York did find Donald Trump
Speaker 9: guilty of these thirty four crimes. He was convicted, but,
Speaker 9: as Joe mentioned, won't really face punishment for that conviction.
Speaker 9: No jail time, no probation, and unconditional discharge is what
Speaker 9: he received. So for more, let's go to June Grosso,
Speaker 9: host of Bloomberg Law here with us on balance of power. June,
Speaker 9: given that this really is not consequence at all, necessarily
Speaker 9: no real punishment here for Donald Trump. What is the
Speaker 9: important thing about this? Is it just that he will
Speaker 9: now take the of office ten days from now as
Speaker 9: a convicted felap.
Speaker 15: Well, I mean that's the main thing on his side,
Speaker 15: On the judge's side, he said that all the protections
Speaker 15: that a president gets can't erase a jury verdict. So
Speaker 15: I think that was the important thing for the justice system,
Speaker 15: that the jury verdict stands and is honored. Donald Trump
Speaker 15: what he was trying to avoid. He knew that he
Speaker 15: wasn't going to get any prison time, but yet in
Speaker 15: the last few weeks there have been furious legal motions,
Speaker 15: even as you mentioned to the Supreme Court, because he
Speaker 15: wanted to avoid the stigma of being the only president,
Speaker 15: the only US president in office as a convicted felon,
Speaker 15: And so that was what he was trying to avoid,
Speaker 15: and now that's happened to him. There also is one
Speaker 15: thing is that he won't be able to vote as
Speaker 15: a felon in Florida, although people I've talked to have
Speaker 15: said that they think that the governor will make some
Speaker 15: exceptions for him.
Speaker 2: Well, so we're done here, right, No, we're not. You
Speaker 2: could see a special Council report that may or may
Speaker 2: not be released with regard to this case. Anybody come
Speaker 2: back around in four years. Donald Trump is now in
Speaker 2: the clear.
Speaker 15: Well see, and what the Supreme Court said was take
Speaker 15: up all your evidentiary issues at appeal, where normally the
Speaker 15: normal defendant would get sentenced and appeal and then might
Speaker 15: go to the Supreme Court if they had enough money
Speaker 15: to do that. But so now we're going to go
Speaker 15: through with the appeal. He has thirty days to appeal.
Speaker 15: You know he's going to appeal because he's appealed every
Speaker 15: single thing else. And he mentioned that he was going
Speaker 15: to appeal the night before last night. Things have been
Speaker 15: happening so fast, I'm trying to keep track. Last night
Speaker 15: at mar A Lago when he made some statements, he
Speaker 15: mentioned that he was going to appeal. And they do
Speaker 15: have some appellate issues based on presidential immunity, so that
Speaker 15: will might take years to get through the court systems,
Speaker 15: and I think we'll end up at the Supreme Court again.
Speaker 9: Still well, busy justices they are, and they certainly were
Speaker 9: today June where this morning they heard arguments in the
Speaker 9: TikTok case. It's really mentally a case about national security
Speaker 9: and how it stacks up against the right to free
Speaker 9: speech in the United States. Are reporting and analysis signals
Speaker 9: that the justices do seem open to keeping this band
Speaker 9: that is set to go into effect on January nineteenth,
Speaker 9: allowing it to go into effect. But how did you
Speaker 9: read arguments?
Speaker 15: So when you say national security, the courts seem to
Speaker 15: freeze national security. And when a president says something as
Speaker 15: national security a risk, then in Congress does then the
Speaker 15: courts think that that's the most important thing. It has
Speaker 15: precedence over anything else, including it seems like from these
Speaker 15: oral arguments today free speech concerns. And you have to
Speaker 15: remember something, you know, the Congress, no one has really
Speaker 15: sort of set out what are the national security concerns here?
Speaker 15: What has TikTok done that would give pause? You know,
Speaker 15: I mean it's sort of like the nip on steel
Speaker 15: US steel ban where Biden said it's national security concerns,
Speaker 15: but no one says what are those concerns? And apparently
Speaker 15: there is a you know, secret record that Congress has
Speaker 15: only seen, but the public hasn't seen it. And the
Speaker 15: public is going to be very very annoyed a lot
Speaker 15: of the public if that date comes and the ban
Speaker 15: goes into effect. And so from the Supreme Court, one
Speaker 15: thing that they did say, I mean, it was discussed
Speaker 15: could they possibly put this off, give it a stay
Speaker 15: of the law until Donald Trump takes office, because he
Speaker 15: filed a brief with the court, not mentioning any constitutional issues,
Speaker 15: but just mentioning his deal prowess and how he'd be
Speaker 15: the only one who'd be able to put this all
Speaker 15: together and solve it. So, you know, that is a possibility.
Speaker 15: Perhaps the court will put it off, but they certainly
Speaker 15: seem to think that the national security concerns overrode everything else,
Speaker 15: and they didn't you know, the lawyers for TikTok and
Speaker 15: the lawyers for the creators of the program on the
Speaker 15: app didn't seem to get much play for their arguments.
Speaker 2: Jude's good to see you. Thank you so much, June Grosso,
Speaker 2: Bloomberg Law, of course, as we want to add another
Speaker 2: voice of experience to this conversation, Sarah o'lam, Senior fellow
Speaker 2: at the Technology Policy Institute. Sarah, welcome to Bloomberg TV
Speaker 2: and Radio. What do you think here do national security
Speaker 2: concerns override the First Amendment in this case?
Speaker 8: Well, we have to go back and look at the
Speaker 8: law that was passed and signed by President Biden. It
Speaker 8: went through the House, and it passed three hundred and
Speaker 8: sixty votes to fifty eight in March. It passed the
Speaker 8: Senate seventy nine votes to eighteen in April, and then
Speaker 8: it was signed in April twenty fourth, twenty four. So
Speaker 8: you know in the record, Congress is concerned about the
Speaker 8: corporate ownership of TikTok by Bye Dance, and they have
Speaker 8: concerns about the data collection operations and label China as
Speaker 8: a foreign adversary. And so that is the posture that
Speaker 8: we're looking at with this deadline that's coming up January nineteenth.
Speaker 8: What's interesting, though, is that President Trump he started all
Speaker 8: of this with executive orders in twenty nineteen. So this
Speaker 8: conversation about TikTok has been ongoing for five years now. SIPHIUS,
Speaker 8: the Committee on Foreign Investment had a finding in twenty twenty.
Speaker 8: They've been trying to go through risk mitigation and plans
Speaker 8: for monitoring by Oracle, and so there's been a lot
Speaker 8: of back and forth. But really what happened was Congress
Speaker 8: passed the law, the President signed it, and so now
Speaker 8: the Supreme Court is in this position where they're being
Speaker 8: asked to maybe extend the deadline from January nineteenth, or
Speaker 8: as the DOJ asked them to let it go through
Speaker 8: to January nineteenth and see what happens if by Dance
Speaker 8: will divest.
Speaker 9: Yeah, and we'll have to wait for a ruling on that,
Speaker 9: which presumably could come any time in the next nine days,
Speaker 9: since that's the deadline we're up against here, Sarah. It
Speaker 9: does seem though, that this really does just come down
Speaker 9: to the question of ownership, specifically that it doesn't necessarily
Speaker 9: matter what is being propagated or posted on TikTok or
Speaker 9: by who. It only matters where ultimately the ownership lies.
Speaker 9: Is that a correct way of reading this, and that's
Speaker 9: the out that Congress gave TikTok right, just change the ownership,
Speaker 9: make sure that it doesn't lead back to China.
Speaker 8: Well, what was really interesting was I listened to the
Speaker 8: oral arguments this morning. They went on from ten am
Speaker 8: to twelve thirty, so right before this time, and it
Speaker 8: was very interesting to hear the nine justices talk with
Speaker 8: the solicitors about these questions. And so they kept trying
Speaker 8: to separate the content free speech concerns from the ownership concerns.
Speaker 8: But there is a chicken and egg ish you here,
Speaker 8: where you have a corporate parent that is related to
Speaker 8: a nation state that has control over the algorithms that
Speaker 8: implicate content. There was discussion though about how in the
Speaker 8: law it doesn't seem to end. Congress doesn't seem to
Speaker 8: be concerned about the dance videos, the cat videos, just
Speaker 8: so long as the ownership is by a different type
Speaker 8: of entity. So the justices, you know, they picked apart
Speaker 8: the different arguments, asking hypotheticals, what if this statute didn't
Speaker 8: have anything to do with speech, what if it was
Speaker 8: just ownership? And they did address questions of what level
Speaker 8: of scrutiny to apply it by looking at the first
Speaker 8: Amendment questions is it strict scrutiny, is it intermediate scrutiny.
Speaker 8: So what's going to be interesting is to see how
Speaker 8: they decide their place in the separation of powers. So
Speaker 8: they've been asked to come in and even be between
Speaker 8: the future president who will be installed in January twentieth.
Speaker 8: And like the reporter before me said, he did file
Speaker 8: an amicus brief in this case asking for a stay,
Speaker 8: saying that the deadline is a bit arbitrary and that
Speaker 8: it happens to be right before the change of administration,
Speaker 8: and so there could be some wiggle room there to say,
Speaker 8: and the statute includes a ninety day extension for certain circumstances,
Speaker 8: so there are some reasons that the court might say,
Speaker 8: you know, we don't want to make an emergency decision here.
Speaker 8: We'll let things sort out by giving an extension of time.
Speaker 2: So that answers my next question, which is be more
Speaker 2: what's more likely an extension on this deadline or an
Speaker 2: imminent ruling. The Court's going to need to take some
Speaker 2: more time, right, they have to question, DOJ officials where
Speaker 2: you going to be watching.
Speaker 6: In the day's head?
Speaker 5: Right?
Speaker 8: Well, they did ask questions about can the president not
Speaker 8: enforce the law? And so the president is the one
Speaker 8: who enforces the deadline. But if it is law, TikTok
Speaker 8: and its partners. So they were saying, all the cloud
Speaker 8: providers and contracted partners, if the law is in effect
Speaker 8: January nineteenth, they can't provide the services that they currently are.
Speaker 8: So you would see a blackout on the app. And
Speaker 8: there was discussion about analogs to broadcast TV and communications law.
Speaker 8: We've seen blackouts for you know, sports and different contracting,
Speaker 8: so it's not unprecedented that there could be a blackout.
Speaker 15: It would be.
Speaker 8: It would make one hundred and seventy million people, you know, confused.
Speaker 8: But this is where we are.
Speaker 9: And just quickly, Sarah, as we're having this conversation around
Speaker 9: free speech and First Amendment rights as it pertains to
Speaker 9: TikTok and obviously goes well beyond that, Meta we learned
Speaker 9: this week is pulling back on fact checking, saying that
Speaker 9: there's kind of a new political reality with this incoming administration.
Speaker 9: How do you think widely across technology, the approach to
Speaker 9: these free speech issues and questions of censorship is going
Speaker 9: to change in the next four years.
Speaker 8: Well, I think it's very interesting that we're in a
Speaker 8: time where user generated content is growing in volume. People
Speaker 8: are used to being able to express themselves. There are
Speaker 8: AI bots that are automated that are pushing out more content,
Speaker 8: and so really this case is a good kind of
Speaker 8: microcosm of where we are in technology. Meta is trying
Speaker 8: to promote more speech on its platform, and there is
Speaker 8: a competition with Chinese companies. So really in the next
Speaker 8: five years or so, you're going to see more competition
Speaker 8: between US companies and Chinese companies. But then there's also
Speaker 8: a lot of like cross commerce, so TikTok wants to
Speaker 8: operate in the US and our companies want to be
Speaker 8: in China, and so there there is that interplay and
Speaker 8: also competition.
Speaker 9: And therein lies the rub. Sarah o'lambs, Senior Fellow at
Speaker 9: the Technology Policy Institute, joining us on Balance of Power
Speaker 9: here in Bloomberg TV and Radio. Thank you so much.
Speaker 9: I would point out Joe as it's looking not that
Speaker 9: great for TikTok and the Supreme Court Meta is a
Speaker 9: beneficiary of that today on a down day for financial
Speaker 9: markets up three percent in this Friday trade.
Speaker 2: It's about as good as it's looked all session as well.
Speaker 2: This could be good news from Mark Zuckerberg. We'll find
Speaker 2: out that's part of the motivation. So you're write their friends.
Speaker 6: Now again, Yeah, problem.
Speaker 2: Trump, than they're warming up to each other probably. Thanks
Speaker 2: for listening to the Balance of Power podcasts. Make sure
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