Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene with
Speaker 1: David Gura. Daily we bring you insight from the best
Speaker 1: of economics, finance, investment, and international relations. Find Bloomberg Surveillance
Speaker 1: on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course
Speaker 1: on the Bloomberg Good Morning are you. When David Gurr
Speaker 1: and Tom came is to grow off off. We are
Speaker 1: honored to have near a change with us from London.
Speaker 1: We'll get to her, you know moment. Thrilled to have
Speaker 1: name a church with us, to uh distill some of
Speaker 1: the debates. Wonderful to have you and of course it
Speaker 1: was really something to see Prime Minister Mainnaire speaking on
Speaker 1: the Queen Elizabeth the second. I guess that's what you
Speaker 1: call that ginormous aircraft carrier. It's Portsmith. Am I pronouncing
Speaker 1: it right? Pronouncing you absolutely on pronouncing right, Tom. And
Speaker 1: over here in the UK, I mean, focus is turning
Speaker 1: to these position papers that the UK government is putting
Speaker 1: forward in terms of what it wants from Breggsit. Of course,
Speaker 1: what it wants and what it gets two very different things.
Speaker 1: I know that because I read my Patrick O'Brien long
Speaker 1: time ago he is my most important guest of the
Speaker 1: morning in the news. Slow has been extraordinary. Greg Valier
Speaker 1: joined us earlier, I should say from Europe. Mr Valier
Speaker 1: looks for resignations before Thanksgiving, including General Kelly greg Valier
Speaker 1: looking for the President to possibly pall undert Mike Allen
Speaker 1: and axios on Gary Cohnes standing behind the President in
Speaker 1: that marble Atrium yesterday quote we're told Cone was somewhere
Speaker 1: between appaulled in furious. He is not appalled in furious.
Speaker 1: When you grow up in Pattison, New Jersey, you've seen
Speaker 1: it all. Bill Pascal joins us. He is the ninth
Speaker 1: Congressional District congressman. But that's not accurate. There's been a
Speaker 1: redisc green in that it was at your grandparents that
Speaker 1: came through Ellis Island. That is correct. It's a spiritual place.
Speaker 1: My my, my grandparents eight generations back, came in handcuffs
Speaker 1: from a place called Scotland. This was a few years ago.
Speaker 1: The synthesis that you have is original here because let
Speaker 1: us explain to our global audience that Patterson, New Jersey
Speaker 1: is everything white supremacists and nationals are afraid of. Why
Speaker 1: should they not be afraid of the ethnic mix of
Speaker 1: the ninth Congressional District because I believe that this is
Speaker 1: the very soul of America. Each group has had a
Speaker 1: difficult time, as I've said before, to get into the
Speaker 1: dining room table. Uh, and difficulties are one thing, but
Speaker 1: they've always been able to reach it. I don't care
Speaker 1: what the group is. I think this is important. I'm
Speaker 1: When I was mayor of Patterson a few moons ago,
Speaker 1: I enjoyed getting up a morning and not only thinking
Speaker 1: about the agenda for the day, but I thought about
Speaker 1: how am I going to get people to work with
Speaker 1: each other with sixty two different ethnic groups and major problems.
Speaker 1: And city mayors will tell you this problems within those
Speaker 1: groups because there are diversity within each group. This is
Speaker 1: what makes a man. You can't stomp this. You can't
Speaker 1: put up a wall to stop it. You can't put
Speaker 1: a a weapon out in front of you to stomp it.
Speaker 1: This is America. I put out a photo of nineteen
Speaker 1: twenties Ku Klux Klan and thank you Joshua Rothman of
Speaker 1: University of Alabama for being with us on Monday. UH
Speaker 1: and true expert on this, someone with fact based knowledge
Speaker 1: of these these American hatreds intentions. And I put that
Speaker 1: photo out and it was about Italians. When did the
Speaker 1: Italians not become the hated ones? When we got someone
Speaker 1: else to hate? And that's the way it works, Tom,
Speaker 1: And that's the way it works. And now I get
Speaker 1: after my attack you because I'm very very deep involved
Speaker 1: in Italian history and the Italian immigrants that came to
Speaker 1: this country. And I tell the Italians, you know, you're
Speaker 1: turning your nose sometimes at certain people. Do you remember
Speaker 1: what happened when we first got here. Do you know
Speaker 1: what happened to your grandparents, your uncle's and your aunts,
Speaker 1: how they were turned away they weren't good enough. We
Speaker 1: can't accept that to anybody. Everybody's welcome. They come in
Speaker 1: here in an orderly, lawful fashion, we should greet them.
Speaker 1: This is what the basis, the nucleus of the nation is.
Speaker 1: If you're joining us now worldwide and across this nation.
Speaker 1: Bill Pastcrow with us. He is the ninth UH Congressional
Speaker 1: dist Congressman. And let me just cut it short. He
Speaker 1: is the congressman from Patterson, New Jersey. Let me bring
Speaker 1: a nera in London nearra Tom and Congressman Pascal, really
Speaker 1: honored to speak to you. I just to let you
Speaker 1: know where I'm coming from as we're talking about immigration here.
Speaker 1: I did come to the UK back in ninety two,
Speaker 1: not just as an immigrant, but a refugee from Sarajevo
Speaker 1: in Bosnia. So I'm very familiar with, um you know,
Speaker 1: that that side of things. But also I spent a
Speaker 1: year actually in Virginia after school and before starting university,
Speaker 1: at a university there, so I'm somewhat familiar with how
Speaker 1: things felt in that state. I do remember well in
Speaker 1: the canteen of the university at the time that even
Speaker 1: though there was never sort of any sense of threat
Speaker 1: in terms of um you know, the sort of racial integration,
Speaker 1: the African Americans would sit separately in the canteen. Now,
Speaker 1: obviously the district where you are very different to that.
Speaker 1: But we are talking here about Charlottesville in a state
Speaker 1: like Virginia, how easy is it going to be to
Speaker 1: actually reverse what we've seen over there? And it was
Speaker 1: so elegantly said by Narra. Let me cut to the
Speaker 1: American directness, how do we make parts of this nation
Speaker 1: like New Jersey or we can't back off. We can't
Speaker 1: we must insist that this is a land of opportunity
Speaker 1: for all, and we're not saying that we open up
Speaker 1: our borders. And you know, eups having problems with immigrants
Speaker 1: coming in the refugees. We understand that, but we're not
Speaker 1: going to stop being who we are. And because of
Speaker 1: non facts, and we blame immigrants for loss of jobs
Speaker 1: that is absolutely not proven by anybody. Uh, we blame
Speaker 1: anybody for any of our problems, crime problems. You know what,
Speaker 1: when people were dying in the streets of Patterson in
Speaker 1: nineteen fifties and sixties on heroin, you know, those people
Speaker 1: don't know what they're doing anyway. Now that suburban kids
Speaker 1: are dying on opiates, it's a whole different story. Now
Speaker 1: we got hope, We got programs to everybody. I support
Speaker 1: those programs. I want to run point on those programs.
Speaker 1: We are all equal, period. I want to talk about
Speaker 1: Elaine Chow standing behind the President yesterday. Full disclosure, folks,
Speaker 1: Secretary Chow and I know each other fairly. Well, she's
Speaker 1: been very kind. Who I was watching You were watching
Speaker 1: her like I was watching her and you were watching
Speaker 1: her for a reason. Well, no, but she come on,
Speaker 1: she came off the boat. Let's from Taiwan. She grew
Speaker 1: up outside l A very basic, very simple. What do
Speaker 1: you need to see from the Republicans the public servants
Speaker 1: like Secretary Chow As Greg Villiers says, when do they
Speaker 1: start resigning? Is that what moderates need to see. Yeah,
Speaker 1: and your torn between loyalty to your president, which you
Speaker 1: should have, but there's a point beyond which the president goes.
Speaker 1: You got to make decisions for yourself. You gotta stand up,
Speaker 1: resign or speak out privately to him. If he continued
Speaker 1: to do this, I'm out of here. You're gonna get
Speaker 1: somebody else to take my place. He's got to understand
Speaker 1: that this is not his business. His his his work
Speaker 1: is being president of the United States. He never made
Speaker 1: that transition from his job beforehand to the presidency of
Speaker 1: the United States. He is, you know, he's almost like
Speaker 1: Cornelius Vanderbilt. Cornelius Vanderbilt said, very specifically, Uh, you know
Speaker 1: the law, I'm I have the power. We could go
Speaker 1: for hours with you this morning, correct, So we're gonna
Speaker 1: run out of time here. I'm so sorry for that.
Speaker 1: Where's the Barbara be Connable Barbara be Connable of Western
Speaker 1: New York sat Richard Nixon down and said, enough, we're
Speaker 1: just not to that stage yet. We're not and that
Speaker 1: we're not to that stage yet, and most Republicans are
Speaker 1: still afraid. On Sunday if I go to mass hopefully
Speaker 1: try to do that every week. You here are the
Speaker 1: folks saying, be not afraid. What are they afraid of?
Speaker 1: This is America. If he can't do it here, go
Speaker 1: to Russia, go to China, then why wouldn't you do that? Well,
Speaker 1: because you know you have a limited amount of freedom here,
Speaker 1: or because we can express ourselves. This is what makes
Speaker 1: us the greatest country in the world. And yet we
Speaker 1: diminish ourselves when we try to categorize and say no,
Speaker 1: these people can't be allowed. And I was very angry,
Speaker 1: uh when the President said there'll be no uh refugees
Speaker 1: from X amount of countries, no Muslims allowed. Are we
Speaker 1: kidding ourselves? That's that's something from the eighteenth century. We're
Speaker 1: living in the twenty one century. Now. Do we have
Speaker 1: any problems? Of course, we have problems, and they'll always
Speaker 1: be problems. We need to stand up to it. We're
Speaker 1: never gonna have a seamless system. Thank you so much.
Speaker 1: Bill Pescrow with us an important conversation after emotion that
Speaker 1: we saw yesterday, a particular thank you, and she will
Speaker 1: continue with this neighbor change in London, talking there about
Speaker 1: her first days in UH, the United Kingdom, march in London.
Speaker 1: I'm tom Keene uh Ian. Where am i am in
Speaker 1: New York? My had is spinning folks. After the last
Speaker 1: six seven days, We're gonna try to digress for a moment.
Speaker 1: We will return to UH the emotion and the debate
Speaker 1: of what we're seeing in our political economics. But right now,
Speaker 1: someone that writes incredibly thoughtful notes synthesizing our macro view
Speaker 1: on investment, on finance and economic Sebastian Gali is at
Speaker 1: Deutsche Bank. Sebastian, you have an optimistic view on the
Speaker 1: American economy and you've just written a thoughtful piece on
Speaker 1: this overused, dreaded word innovation. What is innovation? Innovation is
Speaker 1: the ability to create new products. It's either because you're
Speaker 1: reacting to your competitors or simply because you are innovating yourself.
Speaker 1: And there are two types of innovations. One which is
Speaker 1: what we call breakthrough, which is very rare. Break them
Speaker 1: ald in a sense and the most of the innovation, though,
Speaker 1: is more incremental. So you change small stuff, you change
Speaker 1: the coffee cup, you change the way people behave a
Speaker 1: little bit, but you don't change them on the so
Speaker 1: near If I change my bow tie, that's incremental innovation.
Speaker 1: Sebastian Um this all as well, you arguing your piece
Speaker 1: depends on where we are in the cycle. Are American
Speaker 1: companies innovating enough given where we are in the business cycle?
Speaker 1: The answer is probably no. They It looks like the
Speaker 1: funding simply for people who actually take a lot of
Speaker 1: risk is not that available. So you have the Elon
Speaker 1: Musk of the world, which are a bit the exception
Speaker 1: in the system. It looks like the broad set of
Speaker 1: people who would take more risk and try to push
Speaker 1: new products which are completely new, are unfortunately not getting
Speaker 1: through and getting enough funding. At this point in time.
Speaker 1: The market is very risk of appetite fool it loves
Speaker 1: to take risk, but actually if you go down to
Speaker 1: private equities, it probably is actually far more risk averse
Speaker 1: than you show you at this point in time. Right,
Speaker 1: And how is this then feeding through to the productivity issue? Well,
Speaker 1: you have two things. You have to look at. The
Speaker 1: people who actually provide productivity through innovations are mature sectors.
Speaker 1: You can think of a company like heind sketch Up,
Speaker 1: for example, without knowing exactly what they do, um they
Speaker 1: would basically try to innovate, try to reduce their costs,
Speaker 1: and try to create demand for new products that they do,
Speaker 1: and that ends up basically feeding productivity. Then you have
Speaker 1: companies which are high added value products that they basically
Speaker 1: create a new Apple or a new iPhone, which is
Speaker 1: not necessarily a breakthrough in any way shape or form
Speaker 1: might be, but in terms of productivity, is not necessarily
Speaker 1: helping you a lot because they want to gain market share,
Speaker 1: gain more demand rather than use their costs. The President
Speaker 1: with his tweet this morning on the innovation and the
Speaker 1: Amazon makes the presidents sure it was wildly non economic,
Speaker 1: I would say in its In its you explain to
Speaker 1: people that agree with the President that Amazon has stolen
Speaker 1: jobs from towns cities. In the Borders bookstore at the
Speaker 1: corner of Park Avenue in fifty seven Street, it has
Speaker 1: it has to produce basically the amount of bookstores. And
Speaker 1: then Amazon has opened its own bookstore somewhere in New York,
Speaker 1: so it is also opening its own bookstores because it's
Speaker 1: that good. Jeff, I know, Jeff listens, they gotta make
Speaker 1: a better bookstore. Continue the I have in the view
Speaker 1: on it whatever, but they are it's it's creative destruction.
Speaker 1: If you if you live in New Jersey, you can
Speaker 1: see that you're living in X factories, whether it's lipped
Speaker 1: and tea, whether it's in the coffee producers of the time.
Speaker 1: And we change the adapt and they they're part of
Speaker 1: that process of adaptation. The question is whether it goes
Speaker 1: too slowly or too fast, and the should answer it
Speaker 1: doesn't go very fast whatsoever? Yeah, I would I would
Speaker 1: editorialize here that we've innovated the coffee some days at
Speaker 1: Bloomberg Surveillance down to a thin soup. Oh, I'm very
Speaker 1: innovative when it when it comes to coffee, certainly. But
Speaker 1: just a brief question to you, Sebastian. On FX, we've
Speaker 1: got the euro a little weaker on a report that
Speaker 1: Mario Draggy actually won't deliver a fresh policy message at
Speaker 1: Jackson Hole. Why is Draggy not pushing back on the
Speaker 1: stronger euro because we're not in a crisis situation than
Speaker 1: the euro Zone. Things are going pretty darn well, now,
Speaker 1: if you look at it from the Italian point of view,
Speaker 1: or it used to be in the Spanish point of view,
Speaker 1: of a Greek point of view, then that you might
Speaker 1: be a bit more concerned. But the demand internally in
Speaker 1: in the Arizone is is going pretty well. It's not
Speaker 1: a crisis situation. Therefore, they're not targeting the currency. They
Speaker 1: used to target the currency, they did it deliberately. It's
Speaker 1: no longer the case. Do you agree with your colleague
Speaker 1: dominic constom of a larger real growth in America? I
Speaker 1: think it's a structial thing. I mean in the sense
Speaker 1: that real interest rates are not relatively high, but inflation
Speaker 1: remains subduced potential growth, and the actual growth is decent enough.
Speaker 1: And one of the reasons is there are a structural
Speaker 1: reason why the CPI is going to stay sticky and
Speaker 1: on the low side for a significant amount of signed
Speaker 1: and one of it is because labor market is say,
Speaker 1: it's a global one. Sebastian Golly, thank you so much.
Speaker 1: Thank you for for being with us for a lengthy
Speaker 1: time today. Within all the news slow he is with
Speaker 1: that Deutsche Bank. This is joy. We're gonna speak in
Speaker 1: our next section about all that's going on with our president,
Speaker 1: the emotions of this nation. But now we celebrate his book,
Speaker 1: and it will always be his book. Michael Baron joins us,
Speaker 1: joining us on our phone line. Michael, I've already ordered
Speaker 1: the two thousand and eighty pages for myself and my
Speaker 1: colleague David Gura. I'm fascinated by the piecing together of
Speaker 1: your new almanac of American Politics. What was the Trump
Speaker 1: effect on writing this edition of your Street? Well, it
Speaker 1: obviously it means that you're writing something that you gotta thinks.
Speaker 1: You're writing something that's rather different from what you expected
Speaker 1: to be writing about, because I, like most of the people,
Speaker 1: did not think Donald Trump would be elected president. I
Speaker 1: mean I I think he had towards the end of
Speaker 1: the campaign that he had about one on a three
Speaker 1: chance of winning. That's similar to what needs silver strife.
Speaker 1: There a website calculated um and what the result teaches
Speaker 1: this is that one out of three actually happens one
Speaker 1: out of three times. This was the one out of
Speaker 1: the one out of three and and so forth. So
Speaker 1: it would be on something I think, you know, historical perspective,
Speaker 1: the number of votes that changed the percentage of the electorate,
Speaker 1: that change was actually not huge. Uh. If you take
Speaker 1: a look at comparing say the nineteen seventy two election
Speaker 1: was seventy six or in the nineteen seventy six with
Speaker 1: nine eight n nine, A lot more votes shifted between
Speaker 1: those two elections within those four years than between two thousands,
Speaker 1: thousand and sixteen. You know, your pieces together, the Richard Cohen,
Speaker 1: James Barne, and of course the legendary Charlie Cook. What
Speaker 1: is the vignette out of the two thousand eighty pages,
Speaker 1: what is the one essay or article that really stuck
Speaker 1: out to Michael Barrowne. Well, then the article and sort
Speaker 1: of struck out to me was when that I wrote
Speaker 1: and in which I, as I recall, I started off,
Speaker 1: UM with the fact that Donald Trump was a person
Speaker 1: that most people have told was not a political person
Speaker 1: before he stepped down that escalator in June fifteen, two
Speaker 1: years ago. UM. Donald Trump was present at the UM
Speaker 1: ceremony dedicating the various non Narrows Bridge in November nineteen
Speaker 1: sixty four. UM. And that's you know, a small crowd
Speaker 1: of dignitaries, UM people led by mar Wagner, by Governor Rockefeller,
Speaker 1: by the Robert Moses, the legendary builder of New York
Speaker 1: bridges and parks and so forth. Um, he was eighteen
Speaker 1: years old. He was a student for him. Um what
Speaker 1: was he doing in that crowd? And the answer, obviously
Speaker 1: is that his father, who had made many political connections,
Speaker 1: particularly the Brooklyn Democratic machine, had gotten him a ticket.
Speaker 1: And there he is watching the dedication of the largest
Speaker 1: bridge in the world and the greatest city in the world,
Speaker 1: in the greatest country in the world. You know you're
Speaker 1: getting the picture. He's part taking of this event in
Speaker 1: uh eat and he notes if he notices later that
Speaker 1: the name of the British designer wasn't mentioned, And he
Speaker 1: told interviewers when I built something, they're going to mention
Speaker 1: my name. Interesting that. Now let's do this, Michael. Let's
Speaker 1: come back and we want to talk to you near
Speaker 1: a change and I want to really dive into your
Speaker 1: thoughts as you're right for the Washington Examiner about what
Speaker 1: we've seen since Charlotte's Ville. We are thrilled to bring
Speaker 1: you this warning Michael Baron, folks, I can't say enough
Speaker 1: about the acquisition. It's expensive price. Warning. Barron's gotta you know,
Speaker 1: pay for the Trump Tower. Cocktails. It's eighty dollars. It's
Speaker 1: the best eighty dollars you will spend on the Almanac
Speaker 1: of American Politics two thousand eighteen near a church in London.
Speaker 1: I'm Tom Keaton, New York, and we are honored to
Speaker 1: have with us Michael Barone. In two he put out
Speaker 1: a small book that I guess most people ignored. You
Speaker 1: should see what it goes for on e Bay right now.
Speaker 1: It's like a treasured It's I got a Game of Thrones,
Speaker 1: one of those books in the Citadel. He's out with
Speaker 1: his American Almanac of American Politics. Look for that in
Speaker 1: the next few days. I've already bought my copy. Michael
Speaker 1: bronachros Riding in the Washington Examiner. Michael, Republicans now and
Speaker 1: modern Republicans have to figure out what to do with
Speaker 1: their president with all of your district by district experience.
Speaker 1: For example, how will the Bucks County, Pennsylvania Republican eighth district,
Speaker 1: How will that congressman respond? I mean, just to give
Speaker 1: an example of one Mr Phizpadrick down there, what a
Speaker 1: mainline Republicans do well? The uh the eighth Congressional district,
Speaker 1: which is roughly coincident with Bucks County, Pennsylvania, suburban county.
Speaker 1: What will the Republican in lower Box down by Bristol,
Speaker 1: the Delaware where were the industrial area? Uh, he will
Speaker 1: have some good things to say about Donald Trump, and
Speaker 1: he will emphasize that he positive things that he thinks
Speaker 1: Mr Trump has done. When he gets into upper Bucks County,
Speaker 1: the kind of leafier area with a much higher percentage
Speaker 1: of college graduates and hiring income people, he will lament
Speaker 1: Mr Trump's tendency to tweet off the top of his
Speaker 1: head and some of the mistakes that the President Trump
Speaker 1: has made or some of the things that may not
Speaker 1: be mistakes from his point of view, but they are
Speaker 1: unpopular among the college educated group. That's a classic district
Speaker 1: that's divided between um non college graduate whitees lower Bucks
Speaker 1: who moved towards Donald Trump is compared with two thousand
Speaker 1: twelve and other recent elections in between college grad voters
Speaker 1: who who moved away from Donald Trump. And that's a
Speaker 1: kind of Yeah, that's a kind of vignette, folks, you
Speaker 1: can get in Rowan's American Almanac of American Politics. Let
Speaker 1: me bringing my colleague in London with Michael Barron Nera.
Speaker 1: Thank you, Tom, Michael Burrone. Great to speak to you. So,
Speaker 1: while we've been talking through all the media about ceo
Speaker 1: is abandoning the president all morning, I've been thinking to myself,
Speaker 1: what does Gary Cone make of all this? And as
Speaker 1: if it read my mind, the New York Times headline
Speaker 1: Gary Cone is said to be deeply upset by the
Speaker 1: last few days. What will be more damaging to this
Speaker 1: administration in your view? More abandonment from CEOs of the
Speaker 1: businessman president or abandonment by his closest political aids. Uh well,
Speaker 1: I think the lad it would be more dangerous or
Speaker 1: problematic for him. You know, we've had a number of
Speaker 1: accounts from let's conservatives called mainstream media of people leaving
Speaker 1: with Trump administration. Some of those accounts have been accurate,
Speaker 1: is have not. So I'm old enough to remember lots
Speaker 1: of administrations where we were told somebody was leaving and
Speaker 1: they ended up not doing so. As for the CEOs
Speaker 1: of companies, um, I kind of sniff a certain amount
Speaker 1: of political correctness. They're similar to what we saw from
Speaker 1: the CEO of public Google when he fired and when
Speaker 1: after proclaiming that Google believes in free speech and open
Speaker 1: airing of discussion from its employees, then fired an employee
Speaker 1: who said something that the CEO and uh, certain people
Speaker 1: within the corporation. It said, you know, some of the
Speaker 1: upset some of the employees. He mischaracterized what they said.
Speaker 1: I don't think it's right. As American voters are concerned
Speaker 1: that most of them think that CEOs really provide the
Speaker 1: kind of guidance they necessarily want. You can get a
Speaker 1: certain number of voters to think a lot of ceo
Speaker 1: should be in jail. Um, they don't usually specify what
Speaker 1: offense they think they should be in jail from there. Rather, uh,
Speaker 1: you know, you hear politicians of both parties. No bankers
Speaker 1: went to jail as a result of the two thousand
Speaker 1: and eight so forth. So I don't think that's as
Speaker 1: damaging to Mr Trump as the as as major departures
Speaker 1: in his administration might be. Right, Well, you you talked
Speaker 1: about political correctness. I mean, everybody is asking why the
Speaker 1: President has responded the way he has to what happened
Speaker 1: in Charlottesville. We had a great piece on the Bloomberg
Speaker 1: by one of our columnists, Timothy L. O'Brien, who said,
Speaker 1: it's not about politics, it's his long history of race baiting.
Speaker 1: Should we in fact be surprised by any of this, well,
Speaker 1: you know, there's always seen to be surprised by what
Speaker 1: Donald Trump does. I think to characterize what he what
Speaker 1: he said is race baiting, UH is somewhat unfair. You know,
Speaker 1: as far as I'm concerned, Mr Trump, it was a
Speaker 1: couple of days late and saying many of the things
Speaker 1: about this pro Nazi group that was UH staging the
Speaker 1: initial UH meeting there He's gonna attacked in the press conference,
Speaker 1: but for the press statements in the press conference yesterday,
Speaker 1: for saying that there was violence on both sides, that
Speaker 1: is among the so called white supremacy groups or whatever
Speaker 1: you want to call them, and by the groups of
Speaker 1: h they call themselves anti fat that they're talking about
Speaker 1: anti fascism, and they and they proclaim that they have
Speaker 1: a right to use physical violence against people who make
Speaker 1: statements they disagree with. That's uh American, Michael, Like, I
Speaker 1: get the idea that there is an imbalance here or
Speaker 1: polarity and you're gonna get violence on both sides. No
Speaker 1: one just agree reason with that. But in the time
Speaker 1: that we've got left with you, what with all of
Speaker 1: your encyclopedic knowledge of the Republican Party. What does the
Speaker 1: Party of Lincoln do with this president? That's the money question.
Speaker 1: I mean as I speak, MSNBC showing a picture of
Speaker 1: a younger George Herbert Walker Bush when Michael Barone launched
Speaker 1: out your classic book, what does George Bush Senior's party
Speaker 1: do with Donald Trump? Uh? Well, one of the things
Speaker 1: that Jurch H. W. Bush did when he was president
Speaker 1: was after David Duke, the yeah so self appointed klu
Speaker 1: klux Klan leader in Louisiana emerged as the one Republican
Speaker 1: running in front run off into Louisiana schristopergotten Louisiana, Jared J. W.
Speaker 1: Bush came out against him, said the was your vote
Speaker 1: for the Democratic Do you need to see that just
Speaker 1: but within your heritage and the important place that you
Speaker 1: are in conservative American politics? Do you do you need
Speaker 1: to see statements by our former presidents to bring this
Speaker 1: president president to task or is that asking too much
Speaker 1: of them? Well? I think, uh, I don't, I don't know.
Speaker 1: I suppose former former President Bush is uh is over
Speaker 1: an eighty years old now, so I think asking him
Speaker 1: to make public statements maybe uh a little much for
Speaker 1: the more recent President Bush And has made a policy
Speaker 1: of saying very little UH condemned President Obama, I mean
Speaker 1: his eight years of presidency, even though the President Obama
Speaker 1: had some really harsh things from times time to say
Speaker 1: about him. Uh. And has employed the same thing for
Speaker 1: Mr Trump, although he obviously was not a Trump supporter.
Speaker 1: So you know, I think that a lot of Republicans
Speaker 1: have come in and said that they don't you know,
Speaker 1: they condemn uh this uh, you know, Nazi race, white nationalism,
Speaker 1: racism which so far as I can determine as a
Speaker 1: few shared by a microscopic percentage of the American public
Speaker 1: that you can always find some not somewhere to believe
Speaker 1: that it has made of green cheese. But um, it's
Speaker 1: a small group. But when it's pursuing violence, and when
Speaker 1: one of its members committed what looks to me to
Speaker 1: be like a murder, a horrible crime, UH, condemnation is
Speaker 1: an order and has been forthcoming from many people. And
Speaker 1: I regret that Mr Trump didn't start off with a southemnation,
Speaker 1: a specific condemnation of this group. And if you wanted
Speaker 1: to add that these left winging a typis are committing
Speaker 1: violent s across the nation in the ways that are
Speaker 1: also repugnant. Um, he might have made that, Michael, the
Speaker 1: first one. We gotta leave it there, Michael Brown, thank
Speaker 1: you so much. Congratulations on our two thousand eighteen edition,
Speaker 1: two thousand pages, folks, the Almanac of American Politics. This
Speaker 1: is Bloomberg. This is my interview of the day on NAFTA.
Speaker 1: Brad de Long has not only been a leader in
Speaker 1: our economics, someone that conservatives have to read is someone
Speaker 1: I hate the word Brad progressive, so I'll go with liberal,
Speaker 1: but also someone with an acute understanding of our economic history.
Speaker 1: He is, of course at Berkeley, Brad, wonderful to speak
Speaker 1: to you today. Is the NAFTA today that we're amending
Speaker 1: is it anything like the NAFTA of or um? The
Speaker 1: NaSTA today is little like NaSTA nineteen because of the
Speaker 1: twenty two years that have happened since I'm a huge
Speaker 1: amount of water has flowed under the bridge since then.
Speaker 1: NAFTA back in nineteen ninety four and nineteen ninety five
Speaker 1: was largely a bet for Mexico that if Mexico could
Speaker 1: get the United States to promise that it would not
Speaker 1: raise tariffs or quotas, on Mexico that Mexico could develop
Speaker 1: more rapidly, become richer, and so be a better neighbor
Speaker 1: for the United States. That promise kind of paid off
Speaker 1: about a third UM. Some good things happened, but Mexico
Speaker 1: got a huge hanking financial crisis out of it, and
Speaker 1: Mexican growth overall has been very disappointing over the past generation.
Speaker 1: What NAFTA has done is it's been a much bigger
Speaker 1: than expected boon for the United States UM lots more UM,
Speaker 1: cheap and relatively high quality goods coming in from Mexico
Speaker 1: and the ability of United States firms to significantly improve
Speaker 1: their competitive position with respect to competitors in Europe and
Speaker 1: Japan by creating an integrated, integrated North American value chains.
Speaker 1: Can we get a dialogue from President Trump from the
Speaker 1: Secretary of Commerce Wilbur Ross that dovetails their political pressures
Speaker 1: into a successful amendment of NAFTA because they don't agree
Speaker 1: with the statement you just made, do they? Well, it's
Speaker 1: hard to know what they agree with. UM that the
Speaker 1: story coming from I think Jared Kushner or Jared Kushner's
Speaker 1: people on their direct line to the New York Times
Speaker 1: is that Wilbert Ross ran at O'donald Trump's office with
Speaker 1: a map showing that trump Land was the part of
Speaker 1: the country that the most hurt by NaSTA aggregation, and
Speaker 1: that's what led Trump to back off his initial kind
Speaker 1: of campaign claimed that he was going to get rid
Speaker 1: of NaSTA very early, and instead shift to this, well,
Speaker 1: g we have to renegotiate it. Um. So it's very
Speaker 1: una what the Trump administration thinks about this eventually, since
Speaker 1: if you look, if you look at what they're asking
Speaker 1: for right now, um, one of the major things seems
Speaker 1: to be that they're asking that Mexico and Canada agree
Speaker 1: as part of the renegotiation of Naska agreed to the
Speaker 1: things that Mexico and Canada agreed for the Trans Pacific Partnerships,
Speaker 1: which Trump bitched on the very first day. I look
Speaker 1: bread at the agel and you're you're truly one of
Speaker 1: our authorities on economic history. One of the great things
Speaker 1: is to take whatever you defeated in the election, rename it,
Speaker 1: and put your brand on it. Are we going to
Speaker 1: do that with t p P. Everybody's shot down t
Speaker 1: p P. And now that whoever's won, Clinton or Trump,
Speaker 1: they both were against it. They're gonna essentially do TPP
Speaker 1: but not call it t p P. Is that where
Speaker 1: we're heading. Well, that's what seems to be the Trump
Speaker 1: administration's negotiating position, or at least the negotiating position of
Speaker 1: the Trump staff and the Trump Cabinet members who are
Speaker 1: running this thing. It's not at all clear that's what
Speaker 1: the President wants to do. Um. The President seems to
Speaker 1: have this idea that each country's trade should be balanced
Speaker 1: with every other country's trade every year, and that if
Speaker 1: your country ever has a trade deficit with another country,
Speaker 1: that means you're a lous. We have seen, we've seen
Speaker 1: so we've seen, Brad, going back to Chumpeter and Thomas
Speaker 1: mccraw's Outstanding Profit of Innovation, my book of the Year
Speaker 1: ages ago, Brad, we've seen creative destruction. The President today
Speaker 1: went after Amazon. Now that's in retail. I get it.
Speaker 1: But you are one of our authorities on the creative
Speaker 1: destruction of industry in America. Is there any grain of
Speaker 1: truth to what the President said that Jeff Bezos has
Speaker 1: failed cities, towns, and states across this nation. Um, will
Speaker 1: I say that the thing that's failed, the things that's failed,
Speaker 1: the downtowns of kind of small city America. UM is
Speaker 1: not Amazon nearly so much as Walmart. UM. Amazon has
Speaker 1: gotten a lot of people, a lot of very good
Speaker 1: stuff cheap um shipped through UM, you know, through information
Speaker 1: and then through shipping dissemination. Amazon is an update version
Speaker 1: of what Sears Roebuck on Montgomery Ward did a century
Speaker 1: a century and a half ago in terms of getting
Speaker 1: the goods of America's high productivity factory out to people
Speaker 1: who didn't live right next door to a huge store.
Speaker 1: And so he had fifty years during which Spears and
Speaker 1: Montgomery Ward were dominant. But then with the coming of
Speaker 1: the automobile, you no longer had to wait for the
Speaker 1: post office to bring your kind of large refrigerator from
Speaker 1: Montgomery Wards. You could go drive, and it shifted back
Speaker 1: to retail. Now it's shifting back again to distribution. This
Speaker 1: is very normal. UM. What's not normal is that Trump
Speaker 1: is met at Visos because Visos owns the Washington Post
Speaker 1: and he doesn't think the Washington Post is being nice
Speaker 1: enough there. Didn't view this as economic policy. This is
Speaker 1: you said, mediapol. Let's come back with Professor DeLine. Lots
Speaker 1: of talk about I really want to address a labor
Speaker 1: economy in his important work on labor share in UH
Speaker 1: NAFTA as well. We've got to get to that in
Speaker 1: our next UH section. I should point out that Professor
Speaker 1: DeLong and Professor Davidovitz seemed to agree about the Walmart
Speaker 1: effect versus the Amazon effect. That's something that UH we
Speaker 1: have as well. Folks. There are a certain number of
Speaker 1: essays a year which stopped the economic profession. They can
Speaker 1: sometimes be in fancy magazines that only academics read. They
Speaker 1: can be out on the internet. They can be something
Speaker 1: as simple as a Bloomberg View essay. One of them,
Speaker 1: on January this year, was written by Jay Bradford DeLong.
Speaker 1: Let me read the entire title off the vox website.
Speaker 1: NAFTA and other trade deals have not gutted American manufacturing period.
Speaker 1: It was hugely controversial at the time and led to
Speaker 1: what every good academic wants, which is massive follow up
Speaker 1: in positive and negative reviewing critique. Brad DeLong of the
Speaker 1: University of California at Berkeley is with us now, Brad,
Speaker 1: eight months on from your important essay, what has been
Speaker 1: the summed criticism are our our academics in agreement with
Speaker 1: you that NAFTA and other trade deals did not gut
Speaker 1: American manufacturing. UM. I think there's a distinction people like
Speaker 1: to draw between trade policy on the one hand, UM
Speaker 1: trade effects on the second, and globalization on the third. UM.
Speaker 1: Trade policy I think almost everyone agrees has had little
Speaker 1: effect UM in terms that if we hadn't done NAFTA,
Speaker 1: if we hadn't let China allowed China to join the
Speaker 1: World Trade Organization, that America today would look very much
Speaker 1: like it does. That whatever problems America has UM are
Speaker 1: not at all due to making quote bad trade deals,
Speaker 1: and on the flip side, whatever advantages America has are
Speaker 1: not at all due to quote bad trade deals. Then
Speaker 1: you get into the question of the effects of international
Speaker 1: trade on the US economy given the other policy mistakes
Speaker 1: we're making, And there there's a real debate about how,
Speaker 1: given our other policy mistakes, given large deficits at the
Speaker 1: wrong time under Reagan and George W. Bush, given insufficient
Speaker 1: deficits at the right time when the economy was deeply depressed,
Speaker 1: how much trade has been a net plus or net minus.
Speaker 1: And that debate is serious and ongoing very quickly. Here
Speaker 1: what's the and the third one is globalization as a whole.
Speaker 1: That because of globalization, we no longer have a lock
Speaker 1: on making the high value manufactured and a lot of
Speaker 1: America's prosperity for fifty years was based on the fact
Speaker 1: that we had the old about the only efficient factories
Speaker 1: in the world, and that meant we could buy lots
Speaker 1: of good stuff cheap from abroad. We no longer have
Speaker 1: that advantage. We have to completely no longer have a
Speaker 1: manu effect amount not playing high high value bread factory.
Speaker 1: And that's natural, that's that wasn't an advantage we could
Speaker 1: sustain forever what happened. And you have been good on this,
Speaker 1: Feel Burger and others have been very good on this,
Speaker 1: really across party politics. The people that lost their jobs
Speaker 1: low wage textile manufacturing is one example. They were supposed
Speaker 1: to get help, slash subsidy, slash a life forward given
Speaker 1: these effects. Am I right that the lackey and individualistic
Speaker 1: society of America failed those people? And can we learn
Speaker 1: from that in these new negotiations? Well, I think CATAF.
Speaker 1: Actually it wouldn't have failed. Those quotes those people unquote
Speaker 1: had Newt Gingrich not becomes speak of the House in January.
Speaker 1: You know that is all the labor market stuff that
Speaker 1: Bob Reich as Labor Secretary was quick, and it was
Speaker 1: supposed to be kind of round two of the Clinton administration,
Speaker 1: after the kind of Round one of get economic growth,
Speaker 1: going round two of making sure the growth was equitable.
Speaker 1: Um that second part collapsed when the Republican the Democratic
Speaker 1: Congressional majority built it a way in the election of
Speaker 1: and was never has never been revived. UM. So I'm
Speaker 1: not sure if it's a failure of America as a
Speaker 1: system or the result of one bad election that produced
Speaker 1: people not willing to follow through on the policy promises
Speaker 1: that Clinton had made and that George H. W. Bush
Speaker 1: had made before him. That said, virtually nobody was unhappy
Speaker 1: with NaSTA in the late nineteen nineties. You wander around
Speaker 1: America in the late nineteen nineties, and the last thing
Speaker 1: people are worried about, um, his NAPTA. People are excited
Speaker 1: about the Internet. People are seeing large real wage growth
Speaker 1: all over the economy for the first time ever. People
Speaker 1: are upset because California's housing prices are blooming and it's
Speaker 1: expensive to move to Silicon Valley. But you kind of
Speaker 1: NaSTA killing the American economy was simply not a thing
Speaker 1: um from a professor. We've got to leave it there
Speaker 1: because of time, but thank you so much and congratulations
Speaker 1: on the impact of your January essay on NAFTA bred
Speaker 1: that DeLong is at the University of Californi when you
Speaker 1: Berkeley really appreciate his time. UH today, thanks for listening
Speaker 1: to the Bloomberg Surveillance podcast. Subscribe and listen to interviews
Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.
Speaker 1: I'm on Twitter at Tom Keene. David Gura is at
Speaker 1: David Gura. Before the podcast, you can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio.