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Speaker 2: In Washington, a lot of the focus here from the
Speaker 2: White House and from Capitol Hill is instead on activity
Speaker 2: we are seeing in many places across the country, from
Speaker 2: the West coast at UCLA to north of US in Manhattan, Joe.
Speaker 2: As we've seen these pro Palestinian protests roiling college campuses
Speaker 2: and ultimately last night police having to get involved in
Speaker 2: New York.
Speaker 3: That's for sure. Look, no one knew exactly how that
Speaker 3: was going to go. Students who had occupied the hall
Speaker 3: on Columbia's campus, who were many of which were chanting
Speaker 3: live as we were in the late edition of Balance
Speaker 3: of Power yesterday, were cleared out. They said they would
Speaker 3: not leave without being forced to, and they certainly were.
Speaker 3: It was just after nine pm. If you're with us
Speaker 3: on Bloomberg TV, you can see images of police at work.
Speaker 3: They entered the building on a second floor there and
Speaker 3: dozens were arrested, Kaylee led away by bus to their
Speaker 3: next destination. They're trying to clear out the campus for
Speaker 3: a May fifteenth graduation ceremony, and it's unclear they're going
Speaker 3: to have the cooperation of all students on them well, and.
Speaker 2: The university has asked the police to stay present on
Speaker 2: the campus until May seventeenth try to get through all
Speaker 2: of those And this just really underscore is a great
Speaker 2: political problem for this administration, as you have seen a
Speaker 2: Republican lawmakers, especially taking this opportunity to go to Columbia
Speaker 2: University to speak about this issue, taking action just today
Speaker 2: on anti semitism we expect in the House of Representatives.
Speaker 2: And at the same time you have representatives of this
Speaker 2: administration in the Secretary of State in the Middle East
Speaker 2: trying to work on a East fire deal, which may
Speaker 2: be the only thing that could help ease this tension
Speaker 2: abroad end at home.
Speaker 3: It's pretty remarkable and Jordan Fabian from our White House
Speaker 3: team is framing it perfectly in his piece today talking
Speaker 3: about the make or break moment for Joe Biden right now,
Speaker 3: and he joins us at the table. Jordan, it's always
Speaker 3: great to have you. Thanks for being here. This is
Speaker 3: a fine line that Joe Biden is walking here. Of course,
Speaker 3: Democrat needs young people to show up to be elected. Clearly,
Speaker 3: he's dealing with the strife overseas that Kayley mentioned and
Speaker 3: it's playing out on campuses. Now. How is the White
Speaker 3: House responding to questions of free speech versus security for
Speaker 3: Jewish students.
Speaker 4: So they've issued statements through spokespeople condemning things like the
Speaker 4: seizing of the building at Columbia, any kind of violence
Speaker 4: or anti Semitic rhetoric. Of course, there's been pressure for
Speaker 4: Joe Biden himself to come out and address this, both
Speaker 4: of Jewish groups and from Republicans in Congress. It's a
Speaker 4: tough line, as you mentioned, Joe for him to balance though,
Speaker 4: because on one hand, he has these young voters who,
Speaker 4: you know, it's not all young voters, but a very
Speaker 4: vocal segment who've been out there protesting his approach to
Speaker 4: the Israel Hamas conflict. On the other hand, you have,
Speaker 4: you know, Jewish Americans a lot of other people who
Speaker 4: are very concerned about this, and so threating the needle
Speaker 4: and sort of putting out some kind of nuanced message
Speaker 4: is something very difficult right now. So it seems like
Speaker 4: the White House is hoping that the conflict resolves itself
Speaker 4: during these as He's fire talks this week, and that
Speaker 4: really takes a pin out of the protest we're seeing
Speaker 4: across college campuses well.
Speaker 2: And it also is worth noting, Jordan that a lot
Speaker 2: of this, frankly, is not actually in the hands of
Speaker 2: the president. It is up to these universities whether or
Speaker 2: not they're going to meet demands of students in terms
Speaker 2: of divesting from Israel, for example, And it's up to
Speaker 2: other parties, namely Israel and AMAS as well as the
Speaker 2: Egyptians and cutteries as to whether or not ultimately a
Speaker 2: ceasefire agreement is reached. There's only so much that the
Speaker 2: president is able to do, that's right.
Speaker 4: And you make a good point, Kaylee, which is that
Speaker 4: these protests aren't about Joe Biden, and then not really
Speaker 4: even about the US government. It's about what the universities
Speaker 4: are doing. And so whatever he says might not call
Speaker 4: the concerns. And you know, the Biden campaign will tell
Speaker 4: you that while we're seeing a lot of a protest activity,
Speaker 4: a lot of intense feeling, this is only a you know,
Speaker 4: small sliver of not only the US electorate of young
Speaker 4: voters and young voters while they support a ceasefire, they
Speaker 4: support the end of the war, they don't rank this
Speaker 4: too highly. So there's other issues like the economy where
Speaker 4: that's going to speak more to how they're casting their
Speaker 4: ballot in November than what we're seeing on televisions with
Speaker 4: the protests right now.
Speaker 3: Is this his primary focus right now? When you look
Speaker 3: at Joe Biden's day, if you look at the length
Speaker 3: of time he can spend on an issue. We finally
Speaker 3: got through this whole funding process with Ukraine and Israel,
Speaker 3: we have fund at the government. Obviously he's got a
Speaker 3: campaign running, but when he's in the West wing, is
Speaker 3: this occupying his full attention at the moment?
Speaker 5: Absolutely?
Speaker 4: I mean he said in public speeches that oversees conflicts.
Speaker 4: I mean not just but Ukraine, the funny package you
Speaker 4: just mentioned, that's occupying the majority of his time. And
Speaker 4: it's interesting because we're in this election year. Usually you
Speaker 4: would see a president a presidential candidate out of the road,
Speaker 4: and you're seeing him out on the road. But a
Speaker 4: lot of is mental energy, a lot of the time
Speaker 4: spent behind closed doors is clearly spent on resolving this conflict.
Speaker 4: He's been on the phone with the leaders of Israel,
Speaker 4: of Arab nations who are helping broker the ceasefire talks,
Speaker 4: and it's clearly weighing heavily on his mind.
Speaker 2: All right, Jordan Fabian, who covers the White House for
Speaker 2: us here at Bloomberg, thank you so much. We want
Speaker 2: to turn this now to our political panel, our signature
Speaker 2: political panel, Rick Davis and Jeanie Shanzano Bloomberg Politics contributors
Speaker 2: are with us now. Genie, as Jordan is just describing
Speaker 2: here a president that has been on the road where
Speaker 2: he has not been to this point, is actually on
Speaker 2: any of these campuses that we're talking about. Does the
Speaker 2: president need to make a trip to one of these
Speaker 2: schools to talk to these students. Is he able to
Speaker 2: address this issue from Afar?
Speaker 6: You know, I think he can address it from Afar.
Speaker 6: You know, these are issues for the college campuses themselves.
Speaker 6: When the protests get out of hand and they turn violent,
Speaker 6: or they are anti Semitic, or they are bigoted, if
Speaker 6: they are, you know, in any way impeding somebody's ability
Speaker 6: to get an education, and police are called in. Absolutely
Speaker 6: the government comes in, but that is the police, the president,
Speaker 6: the speaker of the House. They do not have a
Speaker 6: role on this. College campuses have many things to address.
Speaker 6: They've done somethings right on this, They've done something's wrong.
Speaker 6: We all know that. But the reality is the president
Speaker 6: doesn't need to be on a college campus to say
Speaker 6: I denounce anti Semitism, I support peaceful protests, and that
Speaker 6: is something that he should be saying forcefully. But he
Speaker 6: should leave it to the officials at the college to
Speaker 6: do what we do, which is teaching students. And if
Speaker 6: the students need to have a lesson as it pertains
Speaker 6: to peaceful protest, if they need to have a lesson
Speaker 6: as it pertains to any sort of thing, that is
Speaker 6: up to the university, the board of chancellors, or whoever
Speaker 6: is in control. So I don't think the president needs
Speaker 6: to go there except to give a commencement dress when invited,
Speaker 6: as you will at Morehouse in a few weeks.
Speaker 3: Well, I wonder, Rick Davis, if we're in for many
Speaker 3: more larger protests. Knowing that it was congressional testimony that
Speaker 3: really got this started. We remember, of course Harvard and
Speaker 3: MIT more recently Columbia's leader, and now we understand that
Speaker 3: a House committee will be summoning three more university leaders Yale, UCLA,
Speaker 3: University of Michigan. That's May twenty three, assuming they all testify, Rick,
Speaker 3: what will this story look like by then?
Speaker 7: Yeah, I think that this is going to continue on
Speaker 7: through the red hot summer, right. I mean you would
Speaker 7: have thought, oh, everybody go home after school. You know,
Speaker 7: this is final week in many of these institutions. Maybe
Speaker 7: just take a breather from this. But look, I mean,
Speaker 7: this isn't really about whether or not the universities are
Speaker 7: investing in Israel. I mean, for heaven's sakes, it's just
Speaker 7: such a tiny issue in the grand scheme of things.
Speaker 7: It's what's happening on these campuses that have the President
Speaker 7: engaged and others around the country, including Congress, and that
Speaker 7: is rampant anti Zionism, rampant attacks on Jewish students in
Speaker 7: the you know, and the harassment that they have to
Speaker 7: go through. I mean, this is a cultural issue that
Speaker 7: needs to be addressed. It is unacceptable behavior in virtually
Speaker 7: every single instance of these protests. They are fueled by
Speaker 7: this kind of bigoted behavior. And it is the president
Speaker 7: of the United States. It sets the standard for our
Speaker 7: society to live together, and this is not the way
Speaker 7: to do it. And the universities have failed universally. If
Speaker 7: you have a protest where they've taken over your campus
Speaker 7: or your office buildings, you've by definition failed in your
Speaker 7: ability to create a positive environment for all students to
Speaker 7: learn and to get along. And so yeah, I think
Speaker 7: this is something the president should deal with. I think
Speaker 7: Congress legitimately should try as hard as they can to
Speaker 7: fight back the spread of anti Semitism that's been well
Speaker 7: reported in our country. And I think this is a
Speaker 7: legitimate topic to be discussed, especially in the summer of
Speaker 7: a presidential election year.
Speaker 2: Okay, So Rick, from your point of view, if this
Speaker 2: is really a cultural issue, this is not something that
Speaker 2: would would have a geopolitical solution in any sense a
Speaker 2: ceasefire agreement would it bring an end to the kind
Speaker 2: of behavior or language that you are talking about that
Speaker 2: has been on display here. This actually, in your mind,
Speaker 2: is more of a domestic issue in this country, even
Speaker 2: if it if it originated from something that happened abroad.
Speaker 7: Sure, Look, there's no question that any improvement in the
Speaker 7: condition on the ground in Gaza would would help calm
Speaker 7: things down within our country and other countries around the
Speaker 7: world are affected by this. But the reality is we
Speaker 7: also know that ceasefires haven't lasted, and this one is not,
Speaker 7: even if they get it, not planned to.
Speaker 3: Be last forever.
Speaker 7: Bibnt Yahoo, the Prime Minister of Israel's made it perfectly
Speaker 7: clear that regardless of ceasefires, he still plans to root
Speaker 7: out the balance of Hamas and that means ground troops
Speaker 7: from the Idea in Gaza killing Palestinian Hamas agents. And so, yeah,
Speaker 7: this isn't going away anytime soon. And yeah, we all
Speaker 7: hope and pray for a ceasefire, but I don't think
Speaker 7: anybody in this administration or in the region believes that
Speaker 7: solves all the problems.
Speaker 3: Rick and Jeannie Kayley is pointing me to a tweet
Speaker 3: right now from an official at the White House, the
Speaker 3: Deputy Communications Director, that the President will deliver remarks next
Speaker 3: week on anti Semitism, what they call a sacred duty
Speaker 3: to remember in more than the six million Jews who
Speaker 3: were systematically murdered by the Nazis and their collaborators. He
Speaker 3: will deliver a keynote address at a Holocaust memorial ceremony.
Speaker 3: Genie is this more what you had in mind.
Speaker 6: It's absolutely he is doing the right thing. He needs
Speaker 6: to denounce forcefully as he always has, anti Semitism in
Speaker 6: any form. There is no question. He needs to denounce violence, maltreatment,
Speaker 6: mistreatment of anyone. He also needs to support the right
Speaker 6: to peaceful protests. And I think he needs to remind
Speaker 6: people what the heart of what these young people who
Speaker 6: are out there aren't there about is a war that
Speaker 6: is going to last. As Rick just talked about. They
Speaker 6: fear for the large amount of their future and they
Speaker 6: don't feel like their government is doing enough about it.
Speaker 6: Should they do that peacefully, absolutely, but let's not forget
Speaker 6: this is a devastating and awful war that is going
Speaker 6: on down there out there, and they are asking for
Speaker 6: a cease fire now. Protests, as they are and have
Speaker 6: always been, have a lot of different voices in them,
Speaker 6: but that is at the heart of this, and that
Speaker 6: is also something that the president and the administration are
Speaker 6: pushing for. So, you know, I think we have to
Speaker 6: give credit to young people. Anybody who has sent a
Speaker 6: child to college in the last ten twenty years, as
Speaker 6: I have, and I teach it at college. The motto
Speaker 6: at almost every one of these American universities is changed
Speaker 6: the world. That is what we teach the students to do,
Speaker 6: to think, to act, and so when people go out
Speaker 6: to make a change in their world peacefully, we support that.
Speaker 6: When they get out of line, they have to accept
Speaker 6: those consequences, and absolutely they should. What happened in New
Speaker 6: York overnight had to happen. But this is the reality
Speaker 6: we're living in. And the President is right to speak
Speaker 6: on anti Semitism, just as I hope he speaks about
Speaker 6: the right to peace believe protests and does his job,
Speaker 6: which is pushing for a ceasefire in Gaza and helping
Speaker 6: the civilians over there who are suffering enormously on both
Speaker 6: sides of the of the aisle and including and most
Speaker 6: importantly the hostages.
Speaker 2: Ginny, we have less than a minute left. But as
Speaker 2: you talk about young people changing the world, the world
Speaker 2: also can change depending on the way people vote in November.
Speaker 2: From your vantage point, is it more likely that these
Speaker 2: young voters will just not vote at all, or that
Speaker 2: they actually would be willing to turn out and vote
Speaker 2: for Donald Trump rather than Joe Biden.
Speaker 6: On this issue? You know, they don't see, at least
Speaker 6: as far as we can tell so far Donald Trump
Speaker 6: as a viable option, because of course he's somebody who
Speaker 6: just you know, last weekend went out and talked about
Speaker 6: the context of Charlottesville and the Nazis that were out there.
Speaker 6: So they don't see him as a option, so they
Speaker 6: may just stay home. But you know, this is something
Speaker 6: that we have to wait and see. It's still not
Speaker 6: the most important issue on the minds of most people
Speaker 6: in this young age group. That remains the economy.
Speaker 3: Genie Shanzino and Rick Davis. This is why they are
Speaker 3: our signature panel. Thank you for the insights.
Speaker 1: You're listening to the Bloomberg Balance of Power podcast kens
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Speaker 3: Welcome you. Because we saw it coming. It was right
Speaker 3: at this time yesterday. Nathan Dean was sitting in this
Speaker 3: chair and we were talking about the possibility of rescheduling
Speaker 3: cannabis being announced maybe even that day, And it happened
Speaker 3: about five minutes after Nathan walked out of the room,
Speaker 3: and here we are this morning, on this first of
Speaker 3: May afternoon, forgive me watching. Chuck Schumer, the Senate majority leader,
Speaker 3: announced plans to reintroduce the Federal Cannabis Administration and Opportunity Act.
Speaker 3: This would be to full blown legalize marijuana in this country,
Speaker 3: removing cannabis from the Controlled Substances Act, which is something
Speaker 3: that polling shows a majority of Americans actually support, but
Speaker 3: no one sees happening quite yet. We're going to go
Speaker 3: one step at a time here because what happened yesterday
Speaker 3: is very important. You can read about it on the
Speaker 3: terminal the Justice Department recommending cannabis be reclassified as less risky,
Speaker 3: a very important step for cannabis businesses here who are
Speaker 3: also waiting for the Safe Banking Act they can't use
Speaker 3: banks either. To pass and this is of course a
Speaker 3: bunch of states now that have done this, that have
Speaker 3: legalized marijuana. One Congressman who was ahead of the curve
Speaker 3: on this issue, and it was way ahead, is Earl
Speaker 3: Blumenauer of Oregon. Of course, was also ahead on this issues,
Speaker 3: the founder and co chair now of the Congressional Cannabis Caucus,
Speaker 3: and he was out with a statement on rescheduling yesterday,
Speaker 3: marijuana was scheduled more than fifty years ago, he writes,
Speaker 3: based on stigma, not science, and Congressman joins us now
Speaker 3: live from Capitol hillster, I appreciate your being with us.
Speaker 3: I suspect this is a major development for you and
Speaker 3: the work that you've put into this. But I'd like
Speaker 3: to start at the beginning here. If it was based
Speaker 3: on stigma not science, where did that come from? As
Speaker 3: we hear tobacco companies, Was it racism or was it both?
Speaker 8: It is the aftermath of Richard Nixon's failed War on drugs.
Speaker 5: He weaponized cannabis in an.
Speaker 8: Effort to gain political advantage, jamonizing young black men, young
Speaker 8: people generally, and being able to beat the drum of cannabis.
Speaker 5: It launched this fifty year war on.
Speaker 8: Drugs that had drugs terrible consequences for a million young
Speaker 8: black men. It has stimied efforts to be able to
Speaker 8: move it forward, but the people insisted that they were
Speaker 8: going to take it in their own hands.
Speaker 5: We've now seen.
Speaker 8: Thirty eight states have legalized medical cannabis. We have twenty
Speaker 8: eight states that have fully legalized adult use. Many of
Speaker 8: these are by a vote of the people. We now
Speaker 8: have over seventy percent of the public that thinks that
Speaker 8: cannabis should be completely legalized.
Speaker 5: This decision by.
Speaker 8: The Biden administration to deal with reality and schedule it
Speaker 8: as Scheduled three rather than Schedule.
Speaker 5: One is really extraordinarily important.
Speaker 8: It's going to allow state legal cannabis businesses to deduct
Speaker 8: their business expenses for tax purposes. Right now they pay
Speaker 8: two three times more than typical. So this is going
Speaker 8: to be earth shattering. It's going to lead, i think,
Speaker 8: to the Safe Banking Act through the Senate in near future,
Speaker 8: and it's starting the revolution.
Speaker 3: All of those would be big developments here. Your colleague
Speaker 3: Steve Scalise, the Majority leader, sees things rather differently, as
Speaker 3: of course, you know, Congressman. He had this to say
Speaker 3: after the development on rescheduling, we need to be reducing
Speaker 3: the number of people that use drugs and not increasing
Speaker 3: that number. We should not be making matters worse. He said,
Speaker 3: where's the disagreement here? Because you're talking about the war
Speaker 3: on drugs and he is as well. Congressman, how would
Speaker 3: you respond to, Steve Scalise?
Speaker 8: The states that have the most draconian drug laws have
Speaker 8: not reduced the use. In fact, states that don't have
Speaker 8: a system like we have in Oregon actually.
Speaker 5: Puts more risk for youngsters.
Speaker 8: Somebody who's getting their marijuana from a corner drug dealer,
Speaker 8: Nobody checks ID, nobody deals with a license that they lose,
Speaker 8: and it's available in every state.
Speaker 5: Steve is just in the ozone.
Speaker 8: In fact, the majority of people in his own state
Speaker 8: support legalization, and having more draconian enforcement is not going
Speaker 8: to make a difference at all, other than it will
Speaker 8: disrupt some lives. This is an industry that now has
Speaker 8: almost a half million people. The industry is forty billion
Speaker 8: dollars and that's just the legal business. So people like
Speaker 8: Steve are just out in the ozone. They haven't been
Speaker 8: able to stop it. Sessions, I'm sorry, not at all.
Speaker 3: It's just funny that we know. I'm talking to a
Speaker 3: lawmaker about this. Usually you say it's the people smoking
Speaker 3: potter in the ozone. But you're on the Ways and
Speaker 3: Means Committee congres This is a cultural issue, it's a
Speaker 3: business issue, and I think you're making the point here.
Speaker 3: This is also a taxation issue. As Chuck Schumer floats
Speaker 3: this federal legalization effort here, I know that's not about
Speaker 3: to happen. I'm just curious what would it mean. Do
Speaker 3: you have a number? What would it mean for revenues
Speaker 3: into the federal government if you legalize pot.
Speaker 8: Well, first of all, having the reschedule to schedule three
Speaker 8: means that it changes the equation for people with these businesses.
Speaker 8: They're not going to pay two, three, four times the
Speaker 8: typical text. It means it's going to be easier to comply.
Speaker 8: It's going to take money losing propositions and make them money.
Speaker 5: Making propositions.
Speaker 8: This is going to mean hundreds of billions of dollars
Speaker 8: in the foreseeable future if we get this right. And
Speaker 8: of course, the health benefits are undeniable. That's why we
Speaker 8: have thirty eight states that have not waited for the
Speaker 8: federal government. They've taken medical marijuana in their own hands.
Speaker 8: So this is going to be revolutionary.
Speaker 3: Talk about the amount of support that this has around
Speaker 3: the country, Congressman, and apparently in your own chamber, is
Speaker 3: this something you talk about with your fellow lawmakers?
Speaker 8: Yes, I mean I've gone and beaten the drum. For example,
Speaker 8: in the Safe Banking Act, we had three hundred and
Speaker 8: twenty one representatives in both parties that voted for it twice.
Speaker 5: In fact, it's past the House seven times.
Speaker 8: What's going to happen with what Chuck Schumer, Ron Wyden,
Speaker 8: Corey Booker shared Brown Congressman Danes are Senator Danes from Montana.
Speaker 8: They're going to be putting this forward and you're going
Speaker 8: to see that it will get probably sixty sixty five votes.
Speaker 8: This is the most significant whip count that you're going
Speaker 8: to get. I think it's going to asher in a
Speaker 8: whole new era of rational drug policy.
Speaker 3: Earl bloominare Congressman from Oregon's third congressional district. We thank
Speaker 3: you for being with us, sir, and we'll have more
Speaker 3: details as this raps. It could take the rest of
Speaker 3: the year, based on what we understand as a comment
Speaker 3: period and a final approval that needs to take place. Here,
Speaker 3: let's assemble the panel for their take on this and
Speaker 3: some of the other stories popping today in Washington. Rick
Speaker 3: Davis is here along with Genie Shanzino, our signature panel,
Speaker 3: just like that Bloomberg Politics contributors. Rick, this is not
Speaker 3: a Republican issue typically, and I just referenced what Steve
Speaker 3: Scalise said in the wake of this news here Chuck Schumer,
Speaker 3: Corey Booker, and others. Right now, Ron Wyden Democrats in
Speaker 3: the Senator talking about their bill to legalize marijuana. But
Speaker 3: this seems to be something that might be a bridge
Speaker 3: too far for your party. What do you think about
Speaker 3: what's happening right now.
Speaker 7: Yeah, there's still quite a few Senators and congressmen Republicans
Speaker 7: who agree with Steven Sclave, which is, we should be
Speaker 7: not encouraging drug use in America. We should be encouraging
Speaker 7: less drug use in America. And I don't think anybody
Speaker 7: who lives in a state that has legalized marijuana, either
Speaker 7: for recreational purposes or for medicinal purposes, don't think that
Speaker 7: that hasn't increased the risk on the road. That's pernicious
Speaker 7: effect of walking down the street and getting a secondary
Speaker 7: high just to go on from meeting to meeting in
Speaker 7: New York City these days. And the reality of it
Speaker 7: is is no one has really done empirical studies around
Speaker 7: the long term health effects of marijuana. And so I
Speaker 7: just think for the purposes of the debate, sure, if
Speaker 7: it's going to be happening before it it's an age
Speaker 7: old Washington slogan, But the reality too, Is that just
Speaker 7: because a lot of wrong has been done through marijuana
Speaker 7: policy in the past doesn't mean that it expunges the
Speaker 7: record in the future.
Speaker 3: Well, we're talking about a couple of different things here, Genie.
Speaker 3: Rescheduling is one. Safe banking is an whether you know,
Speaker 3: in the case of rescheduling, you're allowing these existing companies
Speaker 3: that do have employees to actually take those tax deductions,
Speaker 3: allowing them through safe banking, which has not yet passed,
Speaker 3: to use the banking system. Both of those different than
Speaker 3: what Chuck Schumer is talking about now, and actually legalizing
Speaker 3: this on the federal level. This is something that Joe
Speaker 3: Biden promised though on the campaign trail. Is this good politics?
Speaker 3: Rich's painted the picture for us. You walk out the door,
Speaker 3: god knows you're in New York, and you get punched
Speaker 3: in the face by cannabis smoke wherever you go. This
Speaker 3: is I guess this is the new reality. Should this
Speaker 3: the government need to catch up with it?
Speaker 6: Yeah, you know, I think Joe Biden is one of
Speaker 6: the most moderate Democrats out there on this issue. He
Speaker 6: obviously has a personal tie to the issue of drug abuse,
Speaker 6: and it's something that helps explain, although not fully why
Speaker 6: he has long been against de Krimlin decriminalization or legalization,
Speaker 6: but he also wants to take steps, which is what
Speaker 6: the administration is doing now to reduce penalties.
Speaker 9: Right.
Speaker 6: So you know, these are the sort of small steps
Speaker 6: that he is taking and trying to thread this needle,
Speaker 6: and we have to see where it goes. But you know,
Speaker 6: the reality here is that there's only so much the
Speaker 6: President and the administration can do. If you want to
Speaker 6: get real traction on this, it's got to come from Congress.
Speaker 6: Just what you're showing in terms of Chuck Schumer, the
Speaker 6: Controlled Substance Act that's got to be changed by Congress.
Speaker 6: The criminal Code got to be changed by Congress. And
Speaker 6: so there is going to be a I think a
Speaker 6: really heated, interesting debate on this issues for some of
Speaker 6: the reasons you just laid out and Rick was talking about,
Speaker 6: because we've heard a lot from the pro legalization side
Speaker 6: so far and a little less from the anti so
Speaker 6: I think that's going to be happening. But again, Joe Biden,
Speaker 6: these are small, important steps, but they're still small and
Speaker 6: allow him to walk this more moderate line.
Speaker 1: Yeah.
Speaker 3: Well, and the word though, Rick, is that you know
Speaker 3: the data here are stubborn. Most research shows that legalizing
Speaker 3: marijuana has not actually increased usage. Joe Biden just doesn't
Speaker 3: like the ideas from a different generation, and this just
Speaker 3: doesn't seem to be something that he wants to speak
Speaker 3: about in the way that people expected during the campaign.
Speaker 3: Does he need to be consistent on this? Does he
Speaker 3: put Kamala Harris in front of the issue? What do
Speaker 3: you do in a re election campaign?
Speaker 7: Yeah, I think it's the difference between being the president
Speaker 7: United States and having a set of trend and a
Speaker 7: moral center for the country, versus being a candidate and
Speaker 7: frankly needing to shore up the base vote he's got,
Speaker 7: especially within the party of young people. And when you
Speaker 7: pull young people, this is a lopsided issue, right. They
Speaker 7: don't see the harm, they don't see the foul, they
Speaker 7: haven't been historically damaged by it, and so for them
Speaker 7: this is a no brainer. And anybody gets in a
Speaker 7: way of this is just thinking about the past, not
Speaker 7: the future. And so it's a real hard line that
Speaker 7: president has to pass through. And I'd say, you know,
Speaker 7: this is not a surprise to me that the administration
Speaker 7: would be changing the classification of this drug. You know,
Speaker 7: six months before presidential election. Not saying it's a quid
Speaker 7: pro quo, but it certainly does soften up that eighteen
Speaker 7: to twenty five year old base within his party who's
Speaker 7: been reluctant to be enthusiastic about his presidency.
Speaker 3: I do wonder about that genie and our remaining couple
Speaker 3: of moments here you're on campus, and the story on
Speaker 3: campus most recently has been a not good one for
Speaker 3: Joe Biden. As we watched police break up another encampment
Speaker 3: last night, three hundred people arrested at Columbia University. Are
Speaker 3: you hearing talk about this? Is this a front burner
Speaker 3: issue for college students right now or are they looking
Speaker 3: at the war in Gaza.
Speaker 6: You know, when you look at the polls, the younger
Speaker 6: people are, the more supportive they are about making marijuana
Speaker 6: or cannabis accessible decriminalizing it. There's no question there a
Speaker 6: lot of support, but it's not something we've seen where
Speaker 6: people go out and vote on. Certainly when it's on
Speaker 6: a state level ballot, we've seen people who don't traditionally
Speaker 6: go out vote on it. But it's not a federal
Speaker 6: level something that we've seen really make a change. So
Speaker 6: I am not convinced that this is something that will
Speaker 6: help an awful lot. Do they support it absolutely? Will
Speaker 6: it get them out to vote?
Speaker 9: No?
Speaker 6: The economy reigns stream when it comes to young people, jobs, inflation,
Speaker 6: the economy. There's a lot of interest in GAZA, but
Speaker 6: even that is lower when you look at the most
Speaker 6: important issue goals.
Speaker 3: I just think that's fascinating, after you know, so many
Speaker 3: years of people speculating on what the impact of something
Speaker 3: like this would be, it's still just young people want
Speaker 3: to be able to buy a house, right. It's pretty
Speaker 3: simple sometimes when it comes to politics.
Speaker 1: If you're listening to the Bloomberg Balance of Power podcast,
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Speaker 2: Here in Washington, just a little ways down the road
Speaker 2: from where Joe and I right now, we're getting ready
Speaker 2: to breed a statement from the Federal Reserve and ultimately
Speaker 2: have a press conference from Chairman Powell. Joe and there's
Speaker 2: a real possibility that despite what we heard just weeks
Speaker 2: ago after a hot CPI report from President Biden who
Speaker 2: said there will be rate cuts this year that the
Speaker 2: Chairman could indicate in fact there very well may not.
Speaker 3: Be, yeah, or could there be a hike this year
Speaker 3: still to come. I think they're thirty percent odds on
Speaker 3: that at the moment, as we wait to hear from
Speaker 3: what we're told will be a much more hawkish j.
Speaker 3: Powey's got a point to prove today, Kaylee, and it's
Speaker 3: based on the data. It's very hard to deny what's
Speaker 3: happening here in this economy, and it's something we wanted
Speaker 3: to spend some time with Lindsay Owens to talk about
Speaker 3: before we turn things over to our special FED coverage.
Speaker 3: Lindsay is an economist the Groundwork Collaborative where she's executive
Speaker 3: director and Lindsay, it's great to have you back. How
Speaker 3: concerned are you, knowing your background in economics here you
Speaker 3: have a slightly more progressive view and the idea of
Speaker 3: a more hawkish FED at this stage when you consider
Speaker 3: the impact that these rates have had higher for longer
Speaker 3: on the housing market, creating a higher barrier for entry
Speaker 3: for young people, more potential risk for the job market.
Speaker 3: What are we about to hear?
Speaker 9: Yeah?
Speaker 10: Absolutely, I mean, I think it's pretty clear that AL
Speaker 10: is unlikely to veer off his higher for longer strategy,
Speaker 10: you know, holding rate study for now, but potentially coming
Speaker 10: off some of the earlier projections for September rate hikes.
Speaker 10: But you know, the question I think we have to
Speaker 10: ask ourselves here is what are the benefits of a
Speaker 10: higher for longer strategy and what are the risks? And
Speaker 10: I do I think given the areas where we're seeing
Speaker 10: sticky inflation, it's really unclear that the higher for longer
Speaker 10: strategy has a lot of payoffs. You know, when it
Speaker 10: comes to the housing market, when it comes to energy costs,
Speaker 10: when it comes to auto insurance, which is another one
Speaker 10: of the areas where we're seeing more inflation than we'd like,
Speaker 10: none of those are really responsive to the Fed's interest
Speaker 10: rate policy. And in fact, when it comes to the
Speaker 10: housing market, you know, it may well be the case
Speaker 10: that the federal reserves policies are exacerbating some of the
Speaker 10: pricing that we're seeing in the housing market. So I
Speaker 10: think the evidence that the higher for longer strategy is
Speaker 10: going to sort of bring down the last mile of
Speaker 10: inflation is thin.
Speaker 9: And I think the evidence that the higher for longer.
Speaker 10: Strategy is starting to post some considerable costs, is getting
Speaker 10: stronger by the day.
Speaker 2: Okay, Lensy, your point is well taken that a lot
Speaker 2: of the stickiness is where you see most directly, interest
Speaker 2: rate polony policy transmitting as in higher rates, higher mortgage rates.
Speaker 2: That has ripple effects throughout the housing market for example.
Speaker 2: But isn't the risk of not keeping rates higher for
Speaker 2: longer that rates going down or the expectation that they
Speaker 2: will go down further fuels demand, gets people out there spending,
Speaker 2: and all of those different areas of the economy where
Speaker 2: we're not talking about inflation getting sticky. Suddenly do start
Speaker 2: to see prices spiking higher again, isn't isn't that really
Speaker 2: the concern?
Speaker 5: Yeah?
Speaker 9: Absolutely.
Speaker 10: The Fed is trying to you know, handle the upside
Speaker 10: risk of inflation sort of you know, picking back up
Speaker 10: considerably right then they're worried about that.
Speaker 5: You know.
Speaker 10: I think we've seen a lot of inflation come down
Speaker 10: because of transitory factors and also because.
Speaker 9: Of supply coming back online. I don't think.
Speaker 10: There's huge risk of you know, a big increase in
Speaker 10: consumption here that's going to have inflation sort of unmooring
Speaker 10: and sort of spiraling out of control. So I'm definitely
Speaker 10: in the camp of someone who actually thinks coming off
Speaker 10: interest rate hikes at this point, you know, is smart.
Speaker 10: You know, I would like to see cuts frankly, you know,
Speaker 10: given given where we are in the cycle here, but
Speaker 10: you know, we'll have to see sort of where Pal
Speaker 10: is at two o'clock. But you know at the end
Speaker 10: of the day, and he's signaling that he's going to
Speaker 10: stick with the higher for longer strategy.
Speaker 9: And I think.
Speaker 10: You know, we're all sort of watching this experiment play
Speaker 10: out in real time of the FED trying to chase
Speaker 10: inflation down to two percent, and you know, hoping that
Speaker 10: they'll be successful. But increasingly, you know, when we parse
Speaker 10: the individual data, it really doesn't look like this last
Speaker 10: mile is going to be responsive to interest rate hikes.
Speaker 9: And so I think we're in a real predicament here.
Speaker 3: Does that last mile last through November? Because we've talked
Speaker 3: a lot about the political implications of interest rate changes
Speaker 3: around the election, and Joe Biden's got his eyes on
Speaker 3: about six months from now, where are we? Where are
Speaker 3: we in the cycle?
Speaker 9: Then lindsay, yeah, I mean, you're absolutely right.
Speaker 10: The political consequences of this really punishing interest rate environment
Speaker 10: are considerable. American's top concerned about the economy right now
Speaker 10: is high prices, but they're also concerned about high borrowing costs.
Speaker 10: They're concerned about mortgage rates, which are incredibly high right now.
Speaker 9: I mean, look, you know, I think sometimes.
Speaker 10: We get you know, focused on sort of watching mortgage
Speaker 10: rates tick up and down. But you know, let's think
Speaker 10: about what this means in real terms for families. I mean,
Speaker 10: I myself would be paying twice as much per month
Speaker 10: in today's interest rate environment then in the interest rate
Speaker 10: environment in which I bought my home. That is a
Speaker 10: considerable difference, right, Twice twice the monthly mortgage payment. Right,
Speaker 10: So this is pushing folks, you know, out of home
Speaker 10: ownership for years, right, Folks not being able to jump
Speaker 10: in to the mortgage market. So the effects of this
Speaker 10: are considerable on the economy. Of course, the economy is
Speaker 10: top of mind as folks head to the ballot box
Speaker 10: in November, and we also have to look at some
Speaker 10: of the other things that are influenced by the high
Speaker 10: interest rate environment. I mean, you know, Americans are holding
Speaker 10: a huge amount of debt right now. Aprs on credit
Speaker 10: cards are sky high, and credit card companies are you know,
Speaker 10: really in some ways hiding behind high federal fund.
Speaker 9: Rates to keep aprs really higher than they need to be.
Speaker 10: So I think this is affecting consumers, you know, most consumers,
Speaker 10: many consumers in America every day the high cost of borrowing.
Speaker 10: And it's absolutely the case that getting some relief on borrowing,
Speaker 10: you know, I think would be really helpful for President
Speaker 10: Biden before November.
Speaker 2: Lindsay, we have just about a minute left before we
Speaker 2: hand things over to our special coverage, in about an
Speaker 2: hour until Chairman Pal walks up to that podium to
Speaker 2: deliver the press conference. If you had one question to
Speaker 2: ask him today, what would it be?
Speaker 10: I mean, look, the question I have is, you know,
Speaker 10: are we really getting payoff from higher for longer? What
Speaker 10: is your evidence that higher for longer is going to
Speaker 10: get that last mile of inflation down, that is going
Speaker 10: to get housing costs down, is going to get energy
Speaker 10: costs down, that is going to get auto insurance premiums down.
Speaker 10: I think you've really got to ask yourself, you know,
Speaker 10: sort of as the juice worth of squeeze here in
Speaker 10: the high interest rate environment.
Speaker 9: And then if I got a follow up question.
Speaker 10: You know, I would sort of be interested in hearing
Speaker 10: him articulate the consequences of higher for longer, because I would.
Speaker 10: I hope he's well aware of the consequences here for
Speaker 10: American families.
Speaker 2: All right, Lindsay Owen's Groundwork Collaborative executive director, former Senior
Speaker 2: economic policy advisor to Senator Elizabeth Warren. Thank you so
Speaker 2: much for joining us. It's an excellent question, Joe, about
Speaker 2: the way that monetary policy is transmitting in this economy,
Speaker 2: whether we can actually get down from three percent to
Speaker 2: two percent, or maybe the question Chairman Powell would like
Speaker 2: to answer least of all, is two percent still achievable.
Speaker 3: Thanks for listening to the Balance of Power podcast. Make
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