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Speaker 1: It's day four in Israel, where the deathtoll is now
Speaker 1: approaching two thousand. Welcome to the fastest show in politics,
Speaker 1: as Israel prepares for the next phase of its retaliation
Speaker 1: against Tomas, which has already brought hundreds of deaths as
Speaker 1: well in Gaza. We'll talk about the strategies at hand
Speaker 1: now for the Israelis, as well as potential US involvement
Speaker 1: with the former Secretary of Defense Mark Esper. He'll be
Speaker 1: with us in just a moment, we're standing by to
Speaker 1: here from President Biden. He'll be addressing the situation in
Speaker 1: Israel from the White House. So welcome to the Tuesday
Speaker 1: edition of Sound On as we wait to hear from
Speaker 1: the President, as I mentioned, set to address the nation
Speaker 1: from the State Dining Room, and we do have a
Speaker 1: sense that he will be obviously condemning the attacks from Hamas,
Speaker 1: but it's unclear exactly what he's going to say about
Speaker 1: a potential supplemental request for funding to what extent the
Speaker 1: US will lean into this.
Speaker 3: We know we have, of.
Speaker 1: Course a carrier strike group that's on its way to
Speaker 1: Israel right now, and that's where we begin our conversation
Speaker 1: with Mark Esper, chairman national security partner at Red Cell Partners.
Speaker 1: As we've told you, he is also author of the
Speaker 1: New York Times best selling memoir A Sacred Oath, and
Speaker 1: mister Secretary, I welcome you back to Bloomberg. It's great
Speaker 1: to have you. We're reporting on the terminal now that
Speaker 1: the build up of forces is getting to be something
Speaker 1: of note here as Israel stands by for the next phase,
Speaker 1: and I wonder what you see in the days ahead
Speaker 1: as the next phase in this retaliation against Hamas.
Speaker 4: Yeah, Joe, good afternoon. First of all, good to be
Speaker 4: with you and your viewers and listeners. Look, at this
Speaker 4: point in time, I think the Israeli defense forces certainly
Speaker 4: need to make sure that all militants in Israel have
Speaker 4: been killed or captured. The reports are that that has
Speaker 4: been accomplished. Second, we see that they're massing forces now
Speaker 4: they've called the reserves three hundred and sixty thousand or so.
Speaker 4: You see heavy equipment coming in, tanks, armored personnel carriers,
Speaker 4: et cetera. It will take them a few days short
Speaker 4: days to again muster, mobilize, brief plans, and then be
Speaker 4: prepared to move into Gaza. In the meantime, what they
Speaker 4: really have to do is tamp down on this rocket
Speaker 4: fire coming out of Gaza. As we speak, Hamas is
Speaker 4: shooting rockets into Ashkalan, have been doing so for a
Speaker 4: couple hours or so, continue to pummel Iran. I'm sorry,
Speaker 4: Israeli towns and cities. So I think those are the
Speaker 4: next few steps. As we look at it politically, bbing
Speaker 4: Net and Yaho's already come out and talked about forming
Speaker 4: a unity government. That's a good move. Obviously lining up
Speaker 4: supporters globally. I think that's one of the things we'll
Speaker 4: here about from President Biden when he comes on. But
Speaker 4: there's this political international dynamic that needs to happen as well,
Speaker 4: particularly warning off would be opportunists. Opportunists such as Syria,
Speaker 4: Iran and other groups like Hezbalah.
Speaker 1: We see today Boeing speeding one thousand smart bombs to
Speaker 1: Israel following the attacks. Mister Secretary, to what extent can
Speaker 1: we transfer weapons now, either from our stockpiles here in
Speaker 1: the US or our stockpiles in Israel without going to Congress,
Speaker 1: without further delay.
Speaker 4: Well, we do have some stockpiles presently in Israel, so
Speaker 4: that's available, and we can move other munitions from throughout
Speaker 4: the region and of course from the United States. But
Speaker 4: you know, the munition's precision. Got munitions in particular will
Speaker 4: be a top request for the israelis Actually a top
Speaker 4: of that will be intelligence, both tactical with regard to
Speaker 4: what's happening on the ground in Gaza, around Gaza, but
Speaker 4: also strategic what's happening in the region, making sure that
Speaker 4: we had our eyes and ears out about what other
Speaker 4: moves countries might make. So I think intelligence munitions. Maybe
Speaker 4: air defense might be another request as well. And of course,
Speaker 4: as you mentioned up front, the presence of the Carrier
Speaker 4: Strike Group and the Eastern Mediterranean sends a very very
Speaker 4: powerful message of support for Israel, but also deterrens again
Speaker 4: from others who might want to act here in the
Speaker 4: coming days and weeks.
Speaker 1: Are there guardrails on transferring weapons from our stockpiles in
Speaker 1: Israel to the Israelis? Are there guardrails on using them
Speaker 1: in Gaza, of course, a heavily populated area that's full
Speaker 1: of civilians.
Speaker 4: Well, the transfer or sell weapons from the United States
Speaker 4: to Israel, it's something been happening for decades. We know
Speaker 4: it very well.
Speaker 5: Of course.
Speaker 4: I think the United States provides over three billion dollars
Speaker 4: a year in assistance to Israel. Good chunk of that military,
Speaker 4: so we know what they need, we know what's been
Speaker 4: improved in the past. We always expect those to whom
Speaker 4: we sell provide weapons will act in accordance with the
Speaker 4: laws of war and the Geneva Conventions. The Israelis the
Speaker 4: IDEA F is a very professional military force. We're confident
Speaker 4: they take great care to avoid civiling casualties and unnecessary harm.
Speaker 4: That's going to be difficult to do in Gaza, of course,
Speaker 4: because of the density of that area, but also the
Speaker 4: fact that Hamas uses humans to include not just the
Speaker 4: Israelis they've captured, but Palestinians as well, to hide within
Speaker 4: those densely populated as populated areas, putting weapons where they shouldn't,
Speaker 4: such as in schools and whatnot. So it's a challenge
Speaker 4: in that place when you're dealing with Hamas.
Speaker 1: It's been pretty remarkable seeing the Iron Dome in action
Speaker 1: over these past four days. Mister Secretary, you know all
Speaker 1: about it. I mean, they're obviously dealing with overwhelming numbers
Speaker 1: of rockets, but they've repelled an incredible number of them.
Speaker 1: I think most would suggest that it's a success, and
Speaker 1: at some point they're going to need many more missiles
Speaker 1: to make up for those that have already been used.
Speaker 1: This is something that came up with Kevin McCarthy, the
Speaker 1: former Speaker, yesterday, and I'll play you something that he
Speaker 1: said in a moment. But I wonder how quickly I
Speaker 1: believe Raytheon helps to make those missiles in partnership with
Speaker 1: an Israeli company, how speedy could those be? Replaced.
Speaker 4: Yeah, you know, I don't know the exact number, but
Speaker 4: it's not like you're making donuts. They don't go in
Speaker 4: at night and come out in the morning. I mean,
Speaker 4: these things take weeks, if not months. Has been my experience,
Speaker 4: many months to build missiles. So I'm I'm sure Israel
Speaker 4: has stockpiled a good deal. But as you said, what
Speaker 4: Hamas is shooting three thousand and four thousand rockets in
Speaker 4: a two to three day period, you have to have
Speaker 4: a lot of stockpile because not every interceptor hits. Although
Speaker 4: it's a great system, right, a ninety percent success rate,
Speaker 4: But if you figure if you're shooting at one thousand
Speaker 4: missiles and you hit ninety percent, that means one hundred
Speaker 4: are getting through and so not perfect very good. I
Speaker 4: think it's when you compliment that with Israeli warning systems
Speaker 4: and bunkers and whatnot, it goes a long way. But
Speaker 4: clearly you have to continue production. We have to accelerate that.
Speaker 4: Keep in mind that Hesbala has well over one hundred
Speaker 4: thousand rockets and missiles in southern Lebanon. Estimates have been
Speaker 4: as high as one hundred and forty or one hundred
Speaker 4: and fifty thousand that can easily overwhelm Iron Dome, particularly
Speaker 4: if you fire you know, hundreds and hundreds at once.
Speaker 4: So it's a big concern. And we're not even talking
Speaker 4: about Iran yet too. So it's something that we have
Speaker 4: to accelerate on our end, and I'm sure they are
Speaker 4: doing on theirs as well.
Speaker 2: Yeah.
Speaker 1: So when Kevin McCarthy was asked yesterday about potential supplemental
Speaker 1: funding for Ukraine, potential supplemental funding for Israel, and also
Speaker 1: replenishing our own munitions, I thought it was an interesting
Speaker 1: turn that he took here, and I'd love for you
Speaker 1: to listen to what he said and respond when it
Speaker 1: comes to and something that you know about, intimately the
Speaker 1: supply chain and the manufacturing chain on these weapons systems.
Speaker 2: Here's Kevin McCarthy right now.
Speaker 6: Ukraine still has another nine billion that they can draw
Speaker 6: down sitting there for arms. The question comes now in
Speaker 6: our stockpiles.
Speaker 4: We need a whole.
Speaker 6: New ability for the procurement and movement of the building
Speaker 6: of our weapons. It's too slow, it takes too long,
Speaker 6: and we've watched others try to take advantage of it.
Speaker 1: Secretary Esper, I wonder your thoughts on that what needs
Speaker 1: to be done now, knowing that the push and pull
Speaker 1: from Ukraine in Israel are not going to be going
Speaker 1: away anytime soon, and they will be continued. Major asks
Speaker 1: here of the US and requests for supplemental funding to
Speaker 1: create these weapons, but we don't have the infrastructure to
Speaker 1: make them.
Speaker 4: What needs to be done, well, you have to go
Speaker 4: back in time. I mean the speed by which we produce,
Speaker 4: deliver order weapons equipment is too slow, not just for
Speaker 4: what Israel is asking or Ukraine is asking for, but
Speaker 4: for what the United States military itself needs. And look,
Speaker 4: there are two guilty players here. One is the Pentagon
Speaker 4: with the slowness of contracting and determined requirements and building
Speaker 4: their budgets and sorting through this and that. But then
Speaker 4: it goes to Capitol Hill, and Capitol Hill is an
Speaker 4: eighteen month process, right, and then they put restrictions on
Speaker 4: how many can be built, and they don't allow multi
Speaker 4: year purchases. In many cases they could not just give
Speaker 4: predictability to industry but also lower the price per unit
Speaker 4: for the United States taxpayer. So all hands are dirty
Speaker 4: on this. We certainly need a new system, I think
Speaker 4: the defense industrial base. If we're willing to make the
Speaker 4: investments in it to have sufficient not just in time delivery,
Speaker 4: but just more than enough delivery as well, so we
Speaker 4: have ample room in case we get into a bigger
Speaker 4: fight with China. So I think there's a lot of needed.
Speaker 4: But if you look at the defense budget of the
Speaker 4: past few years, each budget submitted by President Biden has
Speaker 4: been below inflation, so it's been a cut in real terms.
Speaker 4: And then the budget cap is that was recently agreed
Speaker 4: to the last several months also imposed as a cap
Speaker 4: and next year will be even further smaller. So defense
Speaker 4: is not keeping up with the needs of what the
Speaker 4: world is presenting us. The threats are far greater than
Speaker 4: the supply. And I think it's not just more money.
Speaker 4: I've always argued for three to five percent annual real growth.
Speaker 4: We certainly need that, but we also need reforms to
Speaker 4: both how Congress works and how DoD works. I co
Speaker 4: chair commission at the Atlanta Council that has focused just
Speaker 4: on that. I work in the venture capital space. I
Speaker 4: see it from the innovator's perspective. We are way too
Speaker 4: slow to bureaucratic and it's not just a pentagon that's
Speaker 4: in the way, but it's the White House and it's
Speaker 4: Congress too.
Speaker 1: Well, in the meantime, sir, it's going to be door
Speaker 1: to door fighting. It appears in Gaza with a hostage
Speaker 1: rescue operation underway. God knows what is going to follow.
Speaker 1: When we consider the idea of a ground invasion, what
Speaker 1: is it that Israel actually needs? Obviously Hamas doesn't have
Speaker 1: an air force. What are the tools required for this job?
Speaker 4: Well, I think in terms of munition's request, it's going
Speaker 4: to be smart weapons, particularly you know, precision bombs, small
Speaker 4: bombs that don't create as much collateral damage, such as
Speaker 4: the small diameter bomb and so on. But look, the
Speaker 4: bigger question is what does Israel aim to do. Are
Speaker 4: they going to go in to punish Hamas by decapitate,
Speaker 4: decaptaining the leadership, knocking out command centers, destroying stockpiles. Are
Speaker 4: they going in there to create a more of a
Speaker 4: buffer within the Gaza strip itself, to push back the
Speaker 4: settlements even further? Are they going to go into occupy
Speaker 4: to make sure that Hamas doesn't rise up again? And
Speaker 4: each one of those has pros and cons. Clearly, I
Speaker 4: think the sentiment is nobody wants to do another because
Speaker 4: of you know, another occupation of Gaza, but I think
Speaker 4: that has to be defined first. And the big complicating
Speaker 4: factor here is that Hamas is holding somewhere between one
Speaker 4: hundred and thirty to one hundred and fifty Israelis hostage
Speaker 4: and they promise to start killing them on TV filming
Speaker 4: it if Israel continues to attack without warning severe sites,
Speaker 4: and of course that would include an incursion into Gaza.
Speaker 4: So it's very complicated for the Israelis. What do they do?
Speaker 4: How do they conduct this war in a manner consistent
Speaker 4: with the laws of war and whatnot when they're dealing
Speaker 4: with a barbaric enemy who doesn't follow any rules and
Speaker 4: is holding their people hostage. And some, by the way,
Speaker 4: we suspect of those hostages are foreign nationals, to include
Speaker 4: possibly Americans, So it's real complicated. This is not an
Speaker 4: easy situation for these Raelis at all, and for anybody.
Speaker 1: It sure isn't. So to what extent, then, does the
Speaker 1: gerald Ford Carrier group actually play a role in all
Speaker 1: of this? We're talking about precision maneuvering in a congested
Speaker 1: urban environment. Where does an aircraft carrier come into play?
Speaker 1: Or is that simply about projecting American strength?
Speaker 4: I think first and foremost that's about projecting Americans support
Speaker 4: and confidence in Israel. It's a very muscular, visible thing
Speaker 4: to do. Second, it's about deterring adversaries, particularly nation states
Speaker 4: like Syria like Iran, from doing anything trying to take
Speaker 4: advantage of the situation. A Third, it does give us,
Speaker 4: of course, capability between the carrier and then the cruiser
Speaker 4: and four destroyers that are accompanying the carrier to provide firepower,
Speaker 4: long range missiles strike aircraft if something were to go awry.
Speaker 4: But I think the other thing it more likely provides
Speaker 4: is a platform by which we can conduct non combatant
Speaker 4: evacuation operations for Americans, and if worse comes to worse,
Speaker 4: we actually have the capability to use those ships as
Speaker 4: platforms to go and conduct hostage rescue missions alongside with
Speaker 4: side by side with the Israeli So I think it
Speaker 4: provides a number of functions. But first and foremost it's
Speaker 4: about sending a power signal to Israel and to Israel's
Speaker 4: adversaries in the region.
Speaker 1: To what extent it is also potentially for a widening conflict.
Speaker 1: The long game worst case scenario, well, the.
Speaker 4: Long game is that the roots to this operation, not
Speaker 4: just the funding and the arming and the training, but
Speaker 4: actually the planning and the green lighting are positively, definitively
Speaker 4: determined to go back to Iran. Then I think it's
Speaker 4: a much bigger game. It's now could be a regional conflict,
Speaker 4: depending on how Israel responds or wants to respond. They
Speaker 4: can't take on too much at once. But in that case,
Speaker 4: you can suspect that we will be providing more support.
Speaker 4: The TEL here for me would be more American forces,
Speaker 4: particularly strike aircraft and air defense systems, moving into the region.
Speaker 4: That tells us that something bigger may be up. And
Speaker 4: I look, at the end of the day, all roads
Speaker 4: lead back to Iran. They're funding all this terrorism throughout
Speaker 4: the region, whether it's Amas has Belah and Yemen, she
Speaker 4: I militia groups in Iraq or you know Shea groups
Speaker 4: in other countries, it all goes back. Then, we've been
Speaker 4: dealing with this for forty years. You're never going to
Speaker 4: get rid of it until you deal with the I
Speaker 4: told all once.
Speaker 7: And for all.
Speaker 1: Well, there you have it from the former Secretary of Defense.
Speaker 1: Mark Esper is now a partner and board member at
Speaker 1: Red Cell Partners and of course author of the book
Speaker 1: A Sacred Oath.
Speaker 2: It's great to have you back.
Speaker 1: Mister Secretary, and appreciate your insights here at an important time.
Speaker 1: As we assemble our panel, Rick Davis, Bloomberg Politics contributor
Speaker 1: with us, as well as Genie Shanzano, Bloomberg Politics contributor
Speaker 1: in New York, we're going to get to hear from
Speaker 1: both of them. Genie, I'm going to start with you
Speaker 1: as we stand by for President Biden. What does he
Speaker 1: need to say today from the White House.
Speaker 3: He needs to express sympathy and empathy for all of
Speaker 3: the victims and their families. That is critical. He needs
Speaker 3: to express again rock solid support for Israel, our closest
Speaker 3: ally in the region. He needs to condemn what Hamas
Speaker 3: has done, and he needs to express full US support
Speaker 3: for whatever it takes to help Israel in this moment
Speaker 3: of distress. Beyond that, I think he needs to rally
Speaker 3: the American people. This is particularly important. I have just
Speaker 3: been talking to young people. You look at college campuses
Speaker 3: across the country. There are some very divergent opinions on
Speaker 3: this issue as it pertains to the treatment of the Palestinians.
Speaker 3: He needs to address that. It is something we are
Speaker 3: going to hear an awful lot about the fear of
Speaker 3: many supporters Israel is that you go forward in a
Speaker 3: few weeks, a few months, support that is now very
Speaker 3: robust will diminish as we see Israel do what it
Speaker 3: needs to do to take care of Hamas. So these
Speaker 3: are very real concerns for the President and the administration.
Speaker 1: Brick Davis with me here in Washington. How much of
Speaker 1: a hardline then, does Joe Biden need to take today?
Speaker 7: Look, I think that he's got to be pretty tough.
Speaker 7: You know, there's been a deafening silence from the administry
Speaker 7: so far on this. I mean, they've obviously said the
Speaker 7: minimum basic requirements for support for Israel. I think the
Speaker 7: President needs to put this in the context of where
Speaker 7: the United States is in the world and how dangerous
Speaker 7: it is.
Speaker 1: We're going to take the deep dive with our panel
Speaker 1: coming up, Rick Davis and Jeanie Shanzano. As we stand
Speaker 1: by for the president. We will bring you his remarks
Speaker 1: from the White House live as well here on the
Speaker 1: radio and on YouTube search Bloomberg Global News. The cameras
Speaker 1: are lit here on another important day in Washington. We
Speaker 1: haven't even mentioned the battle for speaker. Yet we'll get
Speaker 1: to all of it ahead. I'm Joe Matthew. This is Bloomberg.
Speaker 2: You're listening to The Bloomberg Sound on podcast. Catch the
Speaker 2: program live weekdays at one Eastern on Bloomberg Radio, the
Speaker 2: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
Speaker 2: You can also listen live on Amazon Alexa from our
Speaker 2: flagship New York station. Just say Alexa play Bloomberg eleven thirty.
Speaker 1: President Biden said to address the nation from the White
Speaker 1: House well twenty three minutes ago. Clearly things have been
Speaker 1: delayed because we've just learned that he's been on a
Speaker 1: phone call with Prime Minister Benjamin net and Yahoo both
Speaker 1: Joe Biden and Kamala Harris on this call, which might
Speaker 1: mean that we'll hear from him shortly. As we know
Speaker 1: the call has ended. I'm Joe Matthew in Washington with
Speaker 1: our panel, Rick Davis and Jeanie Shanzeno with a s
Speaker 1: Bloomberg Politics contributors, trying to understand the way forward here. Rick,
Speaker 1: you were making the point that the President needs to
Speaker 1: take a pretty hard line today, and I suspect that
Speaker 1: getting off the phone with Benjamin nett Yaho would go
Speaker 1: a long way to getting him to that point.
Speaker 7: That's right, And I think that you know, we're in
Speaker 7: a bipolar world situation. We're very much in competition with
Speaker 7: our adversaries China, Russia, Iran, and this is a hot
Speaker 7: war that Iran has either inspired or instigated. And so
Speaker 7: in that context, we see a lot of storm clouds gathering,
Speaker 7: whether it's in Lebanon with Hesbala, what's already happened with Hamas,
Speaker 7: and ultimately we're going to have to deal with Iran
Speaker 7: on all this. And so the President needs to start
Speaker 7: to set the stage that this is not just a
Speaker 7: Hamas incursion into Israel, but this is a competition you
Speaker 7: know that we have going on around the world. We
Speaker 7: have a hot war in Ukraine, now, a hot war
Speaker 7: in Israel. We have a lot of tensions around Taiwan.
Speaker 7: I mean, I don't want to take the attension away
Speaker 7: from Israel, but the President needs to understand, you know,
Speaker 7: like communicate to the American public that we live in
Speaker 7: dangerous times and these are our adversaries. They're not our competitors, right,
Speaker 7: there are adversaries, and we need to start thinking about
Speaker 7: what we need to be prepared to do. We have
Speaker 7: these lame debates in the House of Representatives out whether
Speaker 7: we give aid to Ukraine at a time when you know,
Speaker 7: we've got all these adversaries gathering around us. This is
Speaker 7: not a safe place for Americans in the world today. Well, Genie,
Speaker 7: we know that forces are amassing along the Gaza border
Speaker 7: here and that there will likely be a ground invasion.
Speaker 7: It's just a question of timing and scale. What do
Speaker 7: you expect to see.
Speaker 1: From Israel and so what extent will it color the
Speaker 1: way Americans are looking at this.
Speaker 3: Yeah, I mean it is a very moment. They are
Speaker 3: gathered at that border. We do expect a ground invasion.
Speaker 3: They have to respond, and they have to respond with force,
Speaker 3: and I'm sure we will hear the President support that.
Speaker 2: You know.
Speaker 3: The challenge for Israel, and the challenge for the president
Speaker 3: is that so much of this is going to be
Speaker 3: covered on social media and we are going to see
Speaker 3: live pictures. So the president is going to have to
Speaker 3: underscore the brutality of what happened, of what Hamas did
Speaker 3: to the Israelis and to the Palestinians, what they did
Speaker 3: to their own people over this weekend, and the terror
Speaker 3: that they wrought and explain why this tough response is necessary,
Speaker 3: why we need to support it not just today and
Speaker 3: tomorrow and for the next few days, but for weeks
Speaker 3: and months going on forward, because that's how long it
Speaker 3: is going to take. I think he has also got
Speaker 3: to address what is a looming public opinion challenge for
Speaker 3: him in the United States and for Israel, which is
Speaker 3: that you see an awful lot of dissension already in
Speaker 3: hours after this on college campuses and in cities across
Speaker 3: this country. He has got to bring people along to
Speaker 3: explain why this isn't our interest and what we can
Speaker 3: do as peace loving democratic people to support a proper
Speaker 3: way forward on this. So it is an enormous challenge
Speaker 3: for him, and he is doing so with the United States,
Speaker 3: you know, United States rather one hand behind our back,
Speaker 3: having no Speaker of the House, and our own domestic
Speaker 3: politics and something of disarray. So an enormous challenge. But
Speaker 3: the president has got to be up to it. It
Speaker 3: has been two days of silence, as you mentioned yesterday,
Speaker 3: at this time, Joe, they put a lid on the
Speaker 3: president at eleven yesterday. We haven't heard from him since.
Speaker 3: He's got to come out strongly here and he's got
Speaker 3: a promise to be president every day going forward to
Speaker 3: lead the world through this crisis.
Speaker 1: Update from Turkey, Rick Davis, I've been waiting to hear
Speaker 1: what kind of language that Erdawan would use, and it's
Speaker 1: not good. We heard from him at a news conference
Speaker 1: with the Austrian Chancellor a short time ago. This is
Speaker 1: just off the terminal, Rick. He says, what is a
Speaker 1: US aircraft carrier doing in Israel? This is a direct quote.
Speaker 1: It is going to shoot around Gaza and cause a
Speaker 1: very serious massacre. This is of course a NATO member speaking.
Speaker 1: How much does the US need to worry about President Erduwan?
Speaker 7: Look, I think we have to always be on alert
Speaker 7: that Erdwan is under enormous pressure within his own region.
Speaker 7: He is dependent upon Russia for oil and gas supplies.
Speaker 7: He treads lightly with Russia on security assistance because he
Speaker 7: is a member of NATO and we obviously have a
Speaker 7: shooting war are going on in Europe. So so he
Speaker 7: finds himself in a very particular position. And not to
Speaker 7: mention the fact that he has a lot going on
Speaker 7: with Russia, you know, vis a vis the fighting that's
Speaker 7: going on in Syria. So they are engaged in the
Speaker 7: backyard of Israel with Russia, you know, fighting you know,
Speaker 7: various groups of terrorists. So he is completely conflicted, and
Speaker 7: I am confident that that Vladimir Putin is using this
Speaker 7: opportunity to try and divide allies and nations in a
Speaker 7: way that can create as much disruption for Israel as possible.
Speaker 2: Uh.
Speaker 7: This is a This is a great day for the
Speaker 7: desk spots around the world because they see America now
Speaker 7: having to traffic cop another skirmish in the region that otherwise,
Speaker 7: you know, a week ago, seemed like a peaceful, relatively
Speaker 7: peaceful location. So I think Erdawan is making good use
Speaker 7: of his his his geography, uh and trying to preserve
Speaker 7: options for himself. But it doesn't do the United States
Speaker 7: any good whatsoever.
Speaker 1: GINI, what does Joe Biden need to say about hostages today?
Speaker 1: There are a lot of worries about Americans who might
Speaker 1: be held in Gaza as we speak.
Speaker 3: He's got to say, we are going to do everything
Speaker 3: we can to support Israel and to bring all of
Speaker 3: the hostages home safely.
Speaker 8: You know.
Speaker 3: One of the things that we haven't talked a lot about.
Speaker 3: It is a major precept of Judaism that you don't
Speaker 3: leave anyone behind. So this is not only an issue
Speaker 3: of national and political commitment, but also a religious commitment
Speaker 3: for anybody who is Jewish. And so the President has
Speaker 3: got to say, and we just heard from Mark Esper,
Speaker 3: there may be Americans held over there as well other
Speaker 3: foreign nationals, that we are going to do everything we
Speaker 3: can to support bringing those hostages all home safely. And
Speaker 3: you know, just to follow on what you were talking
Speaker 3: about about Turkey. This is why the tweet that came
Speaker 3: out of the State Department that they then deleted was
Speaker 3: so frustrating for so many people. This was that tweet
Speaker 3: which said Anthony Blinken saying and obviously not written by him,
Speaker 3: that they were talking to Turkey about a ceasefire, and
Speaker 3: then that was deleted. It was the second deleted State
Speaker 3: Department tweet since this crisis. They've got to be very
Speaker 3: very careful about statements like that. Obviously, again not something
Speaker 3: Tony Blinken himself, you know, sent out or was justified,
Speaker 3: and they did delete it. But it is very very
Speaker 3: concerning because of the situation in Turkey. Yes we should
Speaker 3: be talking to them, but they have to be very
Speaker 3: careful about the statements that come out, and that tweet
Speaker 3: was a mammoth mistake by the State Department.
Speaker 1: Well, you know, it reminds us how careful President Biden
Speaker 1: will need to be with his words. Albeit stern. I
Speaker 1: think to your point, Rick, this would be one of
Speaker 1: those days where the communications office is saying, no questions, right,
Speaker 1: We're going to go out there, We're going to stick
Speaker 1: to the script, a strong message, come back behind closed doors.
Speaker 7: Yeah, you would think that would be the case. It'll
Speaker 7: be interesting just moments from now from the president directly
Speaker 7: and see whether or not he undermines that potential request
Speaker 7: by the communications officer to let the speech speak for itself.
Speaker 1: That would be your advice.
Speaker 7: That would certainly be my advice, especially if the speech
Speaker 7: has any kind of importance to it visa VID, the
Speaker 7: American people and the Israeli people.
Speaker 1: I gotta believe it will, right.
Speaker 7: And the presumption is he's going to say something important
Speaker 7: because he's the president and this is an important time.
Speaker 7: But like the minute he starts taking questions, because he
Speaker 7: loves to take questions. I give him credit for that.
Speaker 7: He likes to talk to the American public through the press.
Speaker 7: You know, no, tell him what's going to come out
Speaker 7: of his mouth? And this is one where you just
Speaker 7: want to leave well enough alone and let the speech
Speaker 7: or the talk speak for itself.
Speaker 1: What do you think, Genie, no freelancing today or is
Speaker 1: this the moment where he digs down and speaks passionately
Speaker 1: from the heart.
Speaker 3: You know, I'm not sure he should freelance. That's never
Speaker 3: a good idea in times like this. But certainly all
Speaker 3: the reporters from Bloomberg and Elter will be trying to
Speaker 3: get a question in and he is a very trick's
Speaker 3: point tempted to answer them. We know that's his personality.
Speaker 3: So they're going to give it a try, and we'll
Speaker 3: see if he goes for it.
Speaker 1: He should not, however, Okay, you got the advice from
Speaker 1: two crack strategists here. I hope the President, of course,
Speaker 1: is listening.
Speaker 2: You're listening to the Bloomberg Sound on podcast. Catch us
Speaker 2: live weekdays at one Eastern on Bloomberg dot com, the
Speaker 2: iHeartRadio app and the Bloomberg Business app, or listen on
Speaker 2: demand wherever you get your podcasts.
Speaker 1: There have been many questions in our time here without
Speaker 1: a speaker of the House about what happens with funding
Speaker 1: for Israel, never mind Ukraine. With the White House already
Speaker 1: making that supplemental request, we do have a headline important
Speaker 1: on the terminal right now. Democrats introduce House bill to
Speaker 1: restock Israel's Iron Dome. Bipartisan bill to appropriate two billion
Speaker 1: dollars for Israel, introduced as we reassemble our panel, Rick
Speaker 1: Davis and Genie Shanzano, Bloomberg Politics contributors. Rick, We've talked
Speaker 1: a lot about life without a speaker here. It's not
Speaker 1: making things any easier. And incidentally, if you're following along
Speaker 1: on your home game, they're going to be behind closed
Speaker 1: doors five pm a few hours from now, Steve Scaliez,
Speaker 1: Jim Jordan making their case to the Republican Conference. But
Speaker 1: we don't expect an actual speaker's vote. Well, I guess
Speaker 1: it could happen as soon as tomorrow, Rick, But I
Speaker 1: don't think a lot of folks see an outcome in
Speaker 1: the immediate term here. To what extent will that hamper
Speaker 1: our ability to help Israel?
Speaker 7: Yeah, I think that we're a bit tied up. I mean,
Speaker 7: even people like Congressman McCall was asking for resolutions of
Speaker 7: support to Israel be done on the floor of the
Speaker 7: House of Representatives a relatively benign but important measure to
Speaker 7: show us support for our ally in the region, and
Speaker 7: we have no mechanism to get a resolution passed. I mean,
Speaker 7: that's how dysfunctional the House of Representatives are. I mean, tonight,
Speaker 7: the caucus will meet and hear from you know, Steve
Speaker 7: Scalize and Jim Jordan. They will ostensibly start trying to
Speaker 7: select a caucus candidate. Democrats will unanimously support tonight in
Speaker 7: their own version, Hakim Jeffreys for the job of Speaker,
Speaker 7: And so they'll be standing on the floor tomorrow morning saying.
Speaker 3: Let's vote.
Speaker 7: We got a candidate, and so Republican are like, oh,
Speaker 7: we'll get right back to you. So you're right. We
Speaker 7: don't know how long it's going to last. But there
Speaker 7: is more urgency today than there was a week ago
Speaker 7: when they broke because the reality is the business of
Speaker 7: the House is important and it does need to get going.
Speaker 7: And in addition to funding our government in just a
Speaker 7: few short weeks, we need to start showing our support
Speaker 7: for Israel, and that includes being able to allocate economic
Speaker 7: and military aid.
Speaker 1: Genie. When you see the headline like this, Democrats introduce
Speaker 1: House bill. This is the Republican majority right in the House.
Speaker 1: The Democrats introduce House bill to restock Israel's Iron Dome.
Speaker 1: Are democrats 's running the House right now?
Speaker 3: Yeah, they don't have the numbers too, but they're certainly
Speaker 3: trying to get their statements out there. And you know,
Speaker 3: the reality is, we hope that this what's happened in
Speaker 3: Israel introduces some urgency to the Republicans on all of this,
Speaker 3: but the fact is that the Speaker's vote is going
Speaker 3: to have very little to do with messaging to the
Speaker 3: outside world or even the rest of the United States.
Speaker 3: It's going to be about the rules of the speaker,
Speaker 3: how you overthrow and funding the government, all the things
Speaker 3: it was about before this happened. And it just shows
Speaker 3: us once again how this kind of dysfunction in our
Speaker 3: own domestic politics has in real world consequences on everybody
Speaker 3: around the world and ourselves included, and has to be addressed.
Speaker 3: But there's little mechanism to do that. So we suspect
Speaker 3: we will get votes, as nobody seems ready or nearly
Speaker 3: close to the two seventeen to eighteen necessary to become
Speaker 3: speaker on the Republican.
Speaker 1: Side, there's a debate within the Republican Conference, Rick Davis
Speaker 1: about whether to pass a rule that requires the votes
Speaker 1: to be counted before they bring this speaker's battle to
Speaker 1: the floor. So you get behind closed doors, you pick
Speaker 1: a Jordan, Escalise, whomever gets to two seventeen, and not
Speaker 1: until that moment do we go in front of the
Speaker 1: American people. Does that need to happen?
Speaker 7: That's what's happening. That's the plan to hopefully produce a
Speaker 7: caucus not just a majority of the caucus, but literally
Speaker 7: the entire weucus stands behind a winner. You can assume
Speaker 7: that there'll be a few members who choose to go
Speaker 7: the other way, a different way, but the reality is
Speaker 7: it would be an immense embarrassment to recreate the fifteen
Speaker 7: ballot slog that Kevin McCarthy had to go through to
Speaker 7: become speaker. And if neither one of these candidates actually
Speaker 7: can get there, the question then is who within the
Speaker 7: caucus can try and create a you know, sort of
Speaker 7: coalition to rule the Republicans. And and and we haven't
Speaker 7: gotten anywhere near there, right, We've got to test Scalise
Speaker 7: and Jordan to see whether or not they can actually
Speaker 7: move votes from one to the other. And if not, uh,
Speaker 7: then people are going to be starting to look at
Speaker 7: other people like hern or you know, others to to
Speaker 7: see if there's a third, fourth, or fifth candidate and
Speaker 7: ultimately potentially even Kevin McCarthy again uh, to serve as
Speaker 7: speaker and unite the caucus.
Speaker 1: We spent some time here in the bloomberg of Washington
Speaker 1: Bureau today with Larry Hogan, the former governor of Maryland,
Speaker 1: of course Republican who's on all the shortlists of potential
Speaker 1: third party candidate, no labels, what have you. But of
Speaker 1: course you know, he was one of the Republicans to
Speaker 1: come out early against Donald Trump and sort of buck
Speaker 1: the conventional wisdom in his party. And he's dismayed.
Speaker 2: At what's going on right now.
Speaker 1: Here's here's how he put it earlier today.
Speaker 9: It would have been a mistake anyway. And and then
Speaker 9: it's in the middle of an election year. We're trying
Speaker 9: to show that we can govern, and we're showing that
Speaker 9: we can't. We're proving what everybody hates about Washington. It's
Speaker 9: nothing but divisiveness and dysfunction that they can't get out
Speaker 9: of their own way. And to make matters worse, We're
Speaker 9: now in multiple crisises around the world, with the war
Speaker 9: in Ukraine and this war in the Middle East, and
Speaker 9: we're rudderless.
Speaker 1: We are rudderless, Genie. What are Democrats to do in
Speaker 1: the midst of all this? Just keep voting for Hakim
Speaker 1: Jeffries every rounder? Are they engaging with the Republican leadership
Speaker 1: as it stands now? Patrick McHenry, whoever else qualifies to
Speaker 1: try to create a relationship, to try to maybe strike
Speaker 1: a deal to move this forward.
Speaker 3: Yeah, at this point, all we know is that there
Speaker 3: are lock step behind takeem Jeffries, as they have been
Speaker 3: since this House began. Would that change? I'm not sure,
Speaker 3: but i will tell you we do hear from people
Speaker 3: in the last forty eight hours on the Democratic side,
Speaker 3: and I'm talking just people in passing constituents who say
Speaker 3: Democrats should do something, particularly given what's going on in Israel,
Speaker 3: to get even a temporary speaker in place. So they
Speaker 3: may be hearing some of that from their constituents who
Speaker 3: say enough is enough. And you know what's fascinating to
Speaker 3: Hogan's point, You go down to Matt Gates District while
Speaker 3: he is being you know, really you know look down
Speaker 3: at in Washington, d C. In his own district, they
Speaker 3: are cheering on what he did. And that is the
Speaker 3: problem for people like Larry Hogan and others. They are
Speaker 3: getting support the Matt's Gates of the world and the
Speaker 3: Marjorie Taylor Greens in their own districts, and so the
Speaker 3: idea that anything would be different this time around is
Speaker 3: probably not in the often.
Speaker 1: Rick, Larry Hogan was asked about Matt Gates at a
Speaker 1: different part of the conversation. You referred to him as
Speaker 1: a cancer on the party and the institution.
Speaker 7: So is it surgery or chemo?
Speaker 1: I don't know about that. You'll have to tell me.
Speaker 1: You're the insider. I'm Joe Matthew and Washington, Rick Davis
Speaker 1: and Genie Shanzeno.
Speaker 2: You're listening to the Bloomberg Sound On podcast. Catch the
Speaker 2: program live weekdays at one Eastern on Bloomberg Radio, the
Speaker 2: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
Speaker 2: You can also listen live on Amazon Alexa from our
Speaker 2: flagship New York station, Just Say Alexa Play Bloomberg eleven thirty.
Speaker 1: Welcome to our two of Bloomberg Sound On. I'm Joe
Speaker 1: Matthew in Washington alongside Kaylee Lines, who joins us for
Speaker 1: the conversation every day at this time, and Kaylee, we
Speaker 1: thought we would have heard from President Biden already, this
Speaker 1: would be our post speech analysis with you, and he
Speaker 1: hasn't started yet, and there's a good reason for that.
Speaker 1: He was actually on the phone with Benjamin at and Yahoo.
Speaker 1: As we understand, the Vice President was as well, kind
Speaker 1: of outlining the actions taking place here, and Bloomberg is
Speaker 1: reporting that he's going to take a pretty hard line
Speaker 1: in this address.
Speaker 10: We're expecting him to outline specifically what the US is
Speaker 10: doing to support Israel after these attacks from Hamas and
Speaker 10: amid the ongoing violence that we are still very much
Speaker 10: seeing in the region at the moment. But of course
Speaker 10: it becomes a question of what exactly the President is
Speaker 10: going to promise and whether or not he needs congressional
Speaker 10: buy and buy it in order to actually deliver, because
Speaker 10: if it's any aid that requires congressional approval, there is
Speaker 10: a giant question mark, Joe as to how quickly that
Speaker 10: approval can actually be granted, considering there is no Speaker
Speaker 10: of the House.
Speaker 1: We just finished a conversation with Rick Davis and Genie Shanze,
Speaker 1: and I don't think either of them see a speaker
Speaker 1: emerging by the end of the week, never mind something tomorrow.
Speaker 1: But that is actually what the Republican Conference is hoping.
Speaker 10: They're going to try.
Speaker 1: They'll try. Whether Jim Jordan Stevescals get to two seventeen
Speaker 1: is another thing, but it might take a small miracle
Speaker 1: for that to happen.
Speaker 10: Yeah, you need the majority number in order to actually
Speaker 10: get the speaker's gavel, and if you're kind of splitting
Speaker 10: votes in the different factions of the Republican Conference, it's
Speaker 10: hard to figure out how exactly the math is going
Speaker 10: to work, and frankly, whether they're going to be ready
Speaker 10: to bring something to the floor in the next, say,
Speaker 10: twenty four hours in r.
Speaker 1: Yeah, look, my question right now is you know, is
Speaker 1: Hakim Jeffrey's running the House? You see Democrats introduced a
Speaker 1: bill to restock Israel's Iron Dome, which is exactly what
Speaker 1: you're talking about here. You're not going to get anywhere
Speaker 1: without a speaker though, or the rest of the House,
Speaker 1: and so a lot of question marks. As we wait
Speaker 1: to hear from the President. Will bring you those remarks
Speaker 1: live once again and a great opportunity to bring in
Speaker 1: the general, Lieutenant General Ben Hodges, retired, former Commanding General
Speaker 1: US Army Europe. It's great to see you, General, Welcome
Speaker 1: back to Bloomberg. We have very specific questions about what's
Speaker 1: going to happen next here as this retaliation unfolds. We
Speaker 1: know that the first order of business, though, is what's
Speaker 1: been described essentially as a hostage rescue mission. To what
Speaker 1: extent can the Israelis, working with the US get these
Speaker 1: hostages out of Gaza before this ground invasion.
Speaker 5: Well, of course, what Hamas has done and the reports
Speaker 5: that came out today the infants that were murdered just
Speaker 5: really highlights who it is Israelis are dealing with and
Speaker 5: what kind of people Hamas has probably a major concern
Speaker 5: for the IDF Israeli Defense Forces. How do they carry
Speaker 5: out their mission and also try to get hostages out
Speaker 5: of there. That's going to be very difficult because Hamas
Speaker 5: of course, will be using these hostages exactly for the
Speaker 5: purpose of making it difficult for the IDF. At some
Speaker 5: point the mission is going to have to be not
Speaker 5: only is it hostage rescue, but also the response to
Speaker 5: Hamas they're not going to be able to wait a
Speaker 5: lot longer before they have to put troops in there,
Speaker 5: I believe.
Speaker 10: Okay, So if you think that moment is coming, it
Speaker 10: also is a question of how this fighting should be
Speaker 10: done general, how do you fight this kind of war?
Speaker 10: Obviously we have all seen the images videos in the
Speaker 10: past several days of the Iron Dome in action, you know,
Speaker 10: blocking missiles coming from Gaza, and yet this is also
Speaker 10: kind of door to door warfare in some sense, right,
Speaker 10: what does Israel need to be utilizing in this moment?
Speaker 5: Well, Kaylee, you've touched on a couple of important points here.
Speaker 5: There are different aspects to this fight. The missiles and
Speaker 5: rockets that are coming. Still, they're coming from somewhere. I
Speaker 5: mean Hamas has belied they are being resupplied by Iran.
Speaker 5: And so if you can step back from the door
Speaker 5: to door fighting for just a minute and think strategically,
Speaker 5: this is connected to Russia. I mean, Russia is who's
Speaker 5: benefiting from this to see the US and others distracted.
Speaker 5: Nobody's even mentioned Ukraine in the last seventy two hours,
Speaker 5: and I think that this is Russia and it's the
Speaker 5: most important ally Iran opening a second front to relieve
Speaker 5: pressure on Russia to distract support away from Ukraine. Iran,
Speaker 5: of course, which is the closest ally to Russia, has
Speaker 5: been wanting to prevent Israel and Saudi Arabia, Iran's number
Speaker 5: one rival, from coming closer together. So that's the strategic
Speaker 5: level of what's going on, and so keeping the pressure
Speaker 5: on Russia will help reduce I think Iran's ability to
Speaker 5: help Hamas and his Bolah. Now to the actual fighting
Speaker 5: that's going to happen once it begins. Interestingly, the Israelis
Speaker 5: have mobilizer called up three hundred thousand reservers. I mean
Speaker 5: that's everybody. So they are thinking long term massive combat power.
Speaker 5: But I think also they don't want to go rushing
Speaker 5: in there. They're going to I think they'll take their time,
Speaker 5: doing what they can to get as many hostages out
Speaker 5: of there as possible. They're going to be conscious that
Speaker 5: the world is watching to see how much damage is
Speaker 5: done to civilian infrastructure inside the gas's but they are
Speaker 5: not going to mess around. They're going to do what
Speaker 5: they have to I think, to punish Humas so much
Speaker 5: that it's a very long time before they try this again.
Speaker 1: We have eyes on the State dining Room and the
Speaker 1: podium that has been set up for President Biden, we
Speaker 1: will be hearing from the President. Will bring you his
Speaker 1: remarks live when he is set to speak, or about
Speaker 1: an hour and ten minutes late for his appointment right now. General.
Speaker 1: We spoke earlier in the broadcast with the former Secretary
Speaker 1: of Defense Mark Esper, who talked to us about the
Speaker 1: ability for the US to transfer American weapons that are
Speaker 1: being actually housed in Israel to Israel for their use.
Speaker 1: Is that something that should be happening now? Do we
Speaker 1: kind of unlock the doors and give them everything we've got,
Speaker 1: or do we need to hold some of these munitions
Speaker 1: for our own use?
Speaker 5: Well. I think the President has stated that rock solid
Speaker 5: support of the United States Israel has have other countries.
Speaker 5: So I imagine if the Israelis asked for specific things,
Speaker 5: to include weapons that might be stored inside Israel, that
Speaker 5: they will probably be handed over unless there is some
Speaker 5: overarching reason that we would not want to do that.
Speaker 5: But I imagine this kind of thing will go quickly
Speaker 5: once the decision is made. But one of the key
Speaker 5: factors is and if I was the Israeli ground commander,
Speaker 5: I would want to know what is my mission? What
Speaker 5: is the expectation? And they're not just going into Gaza
Speaker 5: to kill a bunch of people. Is it going to
Speaker 5: be a punishment mission, a punitive mission or is it
Speaker 5: going to be something Are they going to have to
Speaker 5: occupy Gaza for the long term? That calls for a
Speaker 5: different sort of approach to doing this, and that will
Speaker 5: also require a lot of people and there will be
Speaker 5: a lot of casualties. So what is the mission? And
Speaker 5: then if I know what the mission is, and that
Speaker 5: tells me what kind of the munitions and other weapons
Speaker 5: systems and support I'm going to need.
Speaker 10: Well to your point on the mission, does the mission
Speaker 10: change if other players get drawn into this in a
Speaker 10: more material way? General, you're just speaking about the notion
Speaker 10: of Iran supporting this effort, potentially Russia by extension. What
Speaker 10: if Iran were to get drawn into this in a
Speaker 10: more material race, should Israel hypothetically decide to retaliate for
Speaker 10: supporting Hamas for example, or the role of Hesbealah in this?
Speaker 10: How are you viewing the Iran wildcard right now?
Speaker 5: So this is an important consideration for the Israeli staff,
Speaker 5: the commander and staff. They don't they want They will
Speaker 5: not all go rushing into Gaza because they have to
Speaker 5: be concerned about in the West Bank, they have to
Speaker 5: be worried about Hasbellah in the north of Israel. So
Speaker 5: I think that they will be very alert to all
Speaker 5: the different possibilities. They'll maintain forces and capabilities that could
Speaker 5: flex to where other requirements might arise, and I think
Speaker 5: it would be I think Iran actually does not want
Speaker 5: to get drawn into this. I think they're quite happy
Speaker 5: to have Hamas and has be allowed to do all
Speaker 5: the fighting Iran being able to stay out of that
Speaker 5: to avoid strikes not only from Israel but from anywhere else.
Speaker 5: If that's being considered, So the Iranians will have I mean,
Speaker 5: they know what kind of a punch the Israelis have,
Speaker 5: and so I think that they are not right ready
Speaker 5: yet to see it expand in that way.
Speaker 1: Well, so what are we in for here when this
Speaker 1: retaliation really kicks into gear. Obviously Israeli troops are amassing
Speaker 1: on the Gaza border general, will Israel have any regard
Speaker 1: for Palestinian civilians who are living in Gaza?
Speaker 5: Yeah? Absolutely, Look the President Natya who has been telling
Speaker 5: Palestinians they need to leave. They need to move away
Speaker 5: from places where Israeli's forces are likely to strike. And
Speaker 5: I think the Israelis know that the whole world is
Speaker 5: watching to see. You know, will the Israelis be indiscriminate?
Speaker 5: Will they just launch weapons into the heavily, very densely
Speaker 5: populated area, or or will they be consideration given I
Speaker 5: think there will Hamas knows this. Of course they will
Speaker 5: use even their own the Gozins as shields. They will
Speaker 5: they will use mosques to store ammunition and to operate.
Speaker 5: So now this is this will be tough at the
Speaker 5: end of the day. It comes down to what is
Speaker 5: the mission? What is the desired end state that Israel has?
Speaker 5: Is this punitive or are they thinking they may have
Speaker 5: to occupy a portion of Gaza to try and eradicate
Speaker 5: it as a base or attacks against Israel.
Speaker 3: In general.
Speaker 10: There's been a lot of comparison here to Hamas and ISIS,
Speaker 10: and the idea that maybe Hamas needs to be targeted
Speaker 10: in the same way that Isis was health fair? Is
Speaker 10: that comparison and where are there difficulties in making that
Speaker 10: kind of comparison when viewing the terrorist organization itself as
Speaker 10: it's been designated.
Speaker 5: Well, that's an interesting comparison. I think the similarity, of course,
Speaker 5: or that these are terrorist organizations that absolutely do not
Speaker 5: care about whether or not they kill innocent people if
Speaker 5: it helps them accomplish their goal. Hamas does not care
Speaker 5: about Palestinian people. This is all about trying to kill
Speaker 5: as many Israelis as they possibly can. So when you
Speaker 5: talk about fighting against ISIS or fighting against Hamas, and
Speaker 5: the target is similar, but the context the environment is different.
Speaker 5: I mean ISIS of course was spread over much of
Speaker 5: the Middle East and Africa, whereas Hamas is a very
Speaker 5: specific organization in a specific place, which, by the way,
Speaker 5: has a rival organization as well, another Palestinian organization that
Speaker 5: is not as militant as is Hamas. So the Israelis
Speaker 5: will have to go after that in a way different
Speaker 5: from the way we have gone after ISIS.
Speaker 1: General, it's great to have you. We appreciate your insights today.
Speaker 1: Obviously something that we're going to continue talking about. We'd
Speaker 1: love to include you in our conversations going forward. General
Speaker 1: Ben Hodges a former Commanding General US Army Europe with
Speaker 1: US here live on Bloomberg. I'm Joe Matthew in Washington,
Speaker 1: along with Kaylie Lines as we bring you the show
Speaker 1: here on the radio, on the satellite, and on YouTube,
Speaker 1: where you can join us right now search Bloomberg Global News.
Speaker 1: Our cameras are up and our guests are smiling, although
Speaker 1: there's not a lot to smile about today, Kaylie, with
Speaker 1: the news that's coming from overseas and here in Washington.
Speaker 1: We have to keep getting back to the fact that
Speaker 1: this is actually a very important day in the capital
Speaker 1: as well as the Republican Conference meets behind closed doors
Speaker 1: to try to coalesce around a candidate for speaker, and
Speaker 1: as we began this hour, there's no clear direction in
Speaker 1: where that is going. All these stories overlap when it
Speaker 1: comes to the matter of funding.
Speaker 10: Absolutely, as we await remarks from President Biden, who is
Speaker 10: going to support express US support for Israel. Congress may
Speaker 10: have a very large role to play there, and as
Speaker 10: you said, the Joe Congress, while paying attention to this
Speaker 10: conflict obviously we've heard a number of members outspoken about
Speaker 10: it in recent days, also has the distraction of trying
Speaker 10: to elect new leadership, trying to get someone the speaker's gabble,
Speaker 10: and they're going to try further this evening. Theoretically five
Speaker 10: pm is when the Republican conference will meet to try
Speaker 10: to coalesce around one candidate. But right now it is
Speaker 10: so very fractured it's very hard to see how you
Speaker 10: get to a majority vote.
Speaker 1: Yeah, absolutely right. They're going to gather in the Ways
Speaker 1: and Means Committee room at five pm, just in time
Speaker 1: for balance of power. I figured they're all going to
Speaker 1: gather around the television. The candidate's forum at one time, though,
Speaker 1: was supposed to be on television. Just when you think
Speaker 1: about the stuff that has being gone over the last week,
Speaker 1: for about twelve hours, that was a Fox broadcast that
Speaker 1: it wasn't Is he still doing the thing behind closed doors?
Speaker 1: I don't even know where that stands right now, because
Speaker 1: they've got to make their case here and they're meeting
Speaker 1: as well with the delegations. You were outside that Texas
Speaker 1: delegation meeting a couple of days ago. Today, the Florida delegation,
Speaker 1: that's twenty members as they pick their way through the conference,
Speaker 1: trying to find enough people to make this work, and
Speaker 1: so far neither can make that claim.
Speaker 10: Yeah, and you mentioned the Florida delegation. Yeah, there's a
Speaker 10: Republican congressmen from Florida. Carlo Samenez said he'd only vote
Speaker 10: for Kevin McCarthy.
Speaker 3: Uh huh.
Speaker 1: The guy another representative from Florida got fired, right, So
Speaker 1: that's going to be an interesting meeting.
Speaker 2: You're listening to The Bloomberg Sound on podcast. Catch us
Speaker 2: Live weekdays at one Eastern on Bloomberg dot com, the
Speaker 2: iHeartRadio app, and the Bloomberg Business App, or listen on
Speaker 2: demand wherever you get your podcasts.
Speaker 1: I'm Joe, Matthew and Washington alongside Kaylee Lines. This is
Speaker 1: Bloomberg's Sound on the fastest show in politics, and just
Speaker 1: heard from President Biden. Kayley taken a pretty hard line
Speaker 1: on the situation in Israel. It's pretty difficult to tell
Speaker 1: what's going to happen though in the next twenty four
Speaker 1: to forty eight hours when it comes to Israel's own strategy.
Speaker 1: They've been amassing troops on the border of Gaza for
Speaker 1: some time, but we've got American hostages, as we've just
Speaker 1: learned you pointed out here along with many Israeli civilians
Speaker 1: who are being held captive, and that's certainly going to
Speaker 1: direct what comes next.
Speaker 10: Yeah, and President Biden saying the US is engaged with
Speaker 10: Israel in terms of how to best retrieve those hostages.
Speaker 10: But he did say in the speech, as he has
Speaker 10: said over the course of the last several days, that
Speaker 10: Israel has a right and indeed a duty to respond
Speaker 10: to these vicious attacks. The idea that the US is
Speaker 10: supporting Israel, and I wonder if that does extend, will extend,
Speaker 10: should they actually have to occupy it as part of
Speaker 10: this disputed area.
Speaker 1: We have a lot still to learn a broad end
Speaker 1: here in Washington, which is why we want to add
Speaker 1: the voice of Jennifer Welsh, one of the best titles
Speaker 1: I think at Bloomberg in Washington. Bloomberg Economics Chief geoeconomics analyst,
Speaker 1: Jenny Welcome. It's great to see you. Welcome to the table,
Speaker 1: and welcome to Bloomberg here in Washington. You're formerly of
Speaker 1: the Biden administration, you worked with the CIA, and you
Speaker 1: have a unique view on what's going on here when
Speaker 1: we consider the idea of geoeconomics. Though, how are you
Speaker 1: viewing what's happening here in Israel with a stock market
Speaker 1: that seems to think there's no immediate impact. What's got
Speaker 1: your attention?
Speaker 11: No, Thanks so much for having me first of all.
Speaker 11: So obviously very early stages at this conflict. There's a
Speaker 11: lot of different ways in which it can involve, including
Speaker 11: the amassing of troops suggests that there is a major
Speaker 11: military operation in the future, at least towards Gaza. There's
Speaker 11: also this open question of Iran's involvement and what that
Speaker 11: might lead to. And the larger the scale of the
Speaker 11: conflict obviously the larger the market impact. But if you
Speaker 11: look back at some of the past commerces we've seen
Speaker 11: between Israel and Gaza, there tends to be a pretty
Speaker 11: limited impact, in part because we're not affecting oil directly here.
Speaker 11: I think we'll just have to see how the conflict evolves,
Speaker 11: though it is better assess the market reaction.
Speaker 3: Well.
Speaker 10: Of course, you heard the former Speaker Kevin McCarthy in
Speaker 10: the Capitol yesterday speaking as no one else seemed like
Speaker 10: they were going to step up and fill that void
Speaker 10: at the time, Joe, as we discussed yesterday, but he
Speaker 10: talked about the idea of the US needing to more
Speaker 10: strictly impose sanctions on Iranian oil, and that kind of
Speaker 10: is one of the concerns, right, the flow of oil,
Speaker 10: not just from Iran, whether that supply could be restricted,
Speaker 10: but also what Iran may do in retaliation in the
Speaker 10: strait of hooor moves. Can you just kind of walk
Speaker 10: us through what that could look like hypothetically.
Speaker 11: No, I think that's a really good question. And again
Speaker 11: we know that Iran has been watching this closely. No
Speaker 11: direct evidence of Iranian involvement yet, including coming from senior
Speaker 11: officials in Israel from the White House. Biden just spoke
Speaker 11: to this, as did John Kirby earlier today. I think
Speaker 11: it remains to be seeing the reaction there, and I
Speaker 11: think that will enlarge part drive Israel's reaction towards Iran.
Speaker 11: I think another key variable here is what happens to
Speaker 11: the frozen then unfrozen funds, which billion dollars exactly which
Speaker 11: the White House has said earlier and made very clear
Speaker 11: that they could suspend that again if they felt the
Speaker 11: need to. There's clearly a deterrence effort here to try
Speaker 11: and prevent any other regional forces from trying to take
Speaker 11: advantage of the situation, which is why I think they
Speaker 11: made that threat clear and put it on the table.
Speaker 11: But still very much an evolving situation here.
Speaker 1: So when we consider economic impact. Your broad view then
Speaker 1: drives this through the oil market, right, are we missing
Speaker 1: the ball somewhere else when it comes to consumer behavior
Speaker 1: the impact on travel, for instance, So there are other
Speaker 1: areas of the economy that could be impacted by a
Speaker 1: conflict like this.
Speaker 11: I think there's definitely other areas that can be affected. Obviously,
Speaker 11: Israel is also a major tech cub There's a lot
Speaker 11: of industries that run through this region. So I don't
Speaker 11: mean to simplify it just in terms of oil, but
Speaker 11: I do think that oil tends to be kind of
Speaker 11: the big marker in the region in terms of what
Speaker 11: people are looking for and when they're reacting to events
Speaker 11: in the region. That being said, I also think it's
Speaker 11: early days to go too far in saying that the
Speaker 11: rest of the supply chains and the region are going
Speaker 11: to shut down at this point. I think a huge
Speaker 11: part of this might be how long Israel can sustain
Speaker 11: Iron Dome and its defenses and make sure that the
Speaker 11: rest of its economy can continue to run as normal.
Speaker 11: Right now, I don't see any indication that that's under challenge.
Speaker 11: The US is already sending resources towards air is Reel.
Speaker 11: There's a stockpile available in country that can help reinforce.
Speaker 11: But the duration of the conflict is going to be
Speaker 11: a key variable here. Obviously, Ukraine's been stretching global ammunition resources,
Speaker 11: the DIB, the US sorry defense industrial base is under
Speaker 11: strain as it is, So there's a question looming on
Speaker 11: the horizon of if this extends much further, will there
Speaker 11: be enough resources to sustain Tho's air defenses, allow their
Speaker 11: economy toction as normal.
Speaker 10: Well, and just the question of can additional resources go
Speaker 10: through the appropriate approval process in a timely manner given
Speaker 10: what we're seeing in the legislative branch at the moment.
Speaker 10: President Biden and part of the speech he just gave
Speaker 10: said we will make sure Israel has what it needs
Speaker 10: to take care of its citizens. So that speaks to
Speaker 10: kind of more of the economic element here and defend itself.
Speaker 10: But is that something that can be guaranteed at this moment?
Speaker 10: How does what is happening on Capitol Hill make what
Speaker 10: the White House is trying to promise more difficult.
Speaker 11: The current moment. The resources that are already on their
Speaker 11: way to Israel, so additional ammunition and other equipment to
Speaker 11: help sustain Iron Dome Duty has made clear that they
Speaker 11: can send that with the current resources and authorities don't
Speaker 11: need anything from Congress at the moment. At the same time,
Speaker 11: we're seeing the administrations clearly trying to keep Congress up
Speaker 11: to date, briefing members of Congress earlier today on the situation,
Speaker 11: and I think laying down a marker that that situation
Speaker 11: might evolve and that they want to have the ability
Speaker 11: to seek additional resources if needed. So, yeah, a real
Speaker 11: question looming on the horizon the House discussion leader tonight
Speaker 11: among Republicans on selecting a speaker candidate, the possible vote
Speaker 11: tomorrow where that will land the House, and then obviously
Speaker 11: pushing an aid package through. I do think there tends
Speaker 11: to be broader bipartisan support for Israel, then say for Ukraine,
Speaker 11: and then say for Ukraine exactly. And so the odds
Speaker 11: there if they can get us speaker so that they
Speaker 11: can actually start pushing business through the House, I think
Speaker 11: the odds there are pretty good. But the first question,
Speaker 11: the prerequisite is obviously they have to select a speaker.
Speaker 1: God knows when that's going to happen. As we spend
Speaker 1: some time with Bloomberg's Jenny Welch, having just heard from
Speaker 1: President Biden, if you're just joining us. We did hear
Speaker 1: at last from the Commander in Chief on the situation
Speaker 1: in Israel, following a conversation that he had with Benjamin Netanyahu.
Speaker 8: Here he is at this moment, we must be crystal clear.
Speaker 8: We stand with Israel. We stand with Israel. We will
Speaker 8: make sure who has what it needs to take care
Speaker 8: of its citizens, defend itself respond to this attack.
Speaker 1: Jenny Welch, you mentioned the dib I, like that, the
Speaker 1: Defense Industrial Base. This is something we talked about with
Speaker 1: Mark Esper last hour about the challenges in manufacturing a
Speaker 1: lot of weapons at once. If we are going to
Speaker 1: stand with Israel as long as it takes, according to
Speaker 1: President Biden, much like we are with Ukraine.
Speaker 2: According to President.
Speaker 1: Biden, will there need to be an executive order, an
Speaker 1: Act of Congress, or something to start accelerating supply chains
Speaker 1: and manufacturing chains.
Speaker 2: To this end.
Speaker 11: There are a lot of options at the administration disposal.
Speaker 11: There's things like the Defense Production Act, where the administration
Speaker 11: can kind of push defense companies to surge production of
Speaker 11: certain things, or even surge production of widgets that go
Speaker 11: into those things. It really depends on kind of the
Speaker 11: package of materials that they're looking to increase production of.
Speaker 11: There's also obviously additional orders that can be put in
Speaker 11: that help incentivize production. The challenge here is really the
Speaker 11: lead times that are often involved in weapons production. So
Speaker 11: a lot of times defense companies won't start a production
Speaker 11: line until they actually have a contract or order on hand,
Speaker 11: then they'll invest the resources. So you kind of have
Speaker 11: to walk backwards from that point to determining where you're
Speaker 11: going to end up in the future. And that's been
Speaker 11: part of the challenge with Ukraine is there has been
Speaker 11: such a relatively quick surge in terms of need and
Speaker 11: it's hard for supply to catch up to that.
Speaker 10: Of course, as Ukraine has engaged in this conflict with Russia,
Speaker 10: just as Israel as now engaged in conflict with Hamas,
Speaker 10: and we have heard Russia coming up in these conversations
Speaker 10: as well. We were just speaking at the top of
Speaker 10: this hour with of retired Lieutenant General Ben Hodges, who
Speaker 10: was talking about Russia's influence on Iran. We heard Kevin
Speaker 10: McCarthy again at the Capitol yesterday talking about a new
Speaker 10: access of evil being Iran, Russia and China. Jenny, how
Speaker 10: much is this really about the Middle East and how
Speaker 10: much of it is about these wider geopolitical dynamics.
Speaker 11: I think you can't isolate the region from the wider
Speaker 11: geopolitical I think that's a really good point, and China
Speaker 11: is walking headfirst into this with some of their recent
Speaker 11: comments and response to what's been happening over the weekend.
Speaker 11: I think from China's perspective, they are clearly trying to
Speaker 11: stay as neutral as possible, while also recognizing that they
Speaker 11: have interests in the region and want to be more
Speaker 11: of a player in global geopolitics more broadly. I at
Speaker 11: the same time, don't expect that they will play nearly
Speaker 11: as much of a direct role as the United States
Speaker 11: will be. Clearly, the US has already engaged in the region,
Speaker 11: sending the carrier strikeforce right up there to support Israel,
Speaker 11: engaging with diplomatic partners all around the world to try
Speaker 11: and kind of rally around Israel. I think China is
Speaker 11: still kind of watching and waiting to see how things develop,
Speaker 11: but we'll want to at least have a voice in
Speaker 11: the discussion.
Speaker 1: So much for being a peacemaker. Huh. That was the
Speaker 1: conversation about China and Ukraine.
Speaker 2: Six months ago.
Speaker 1: We'll see how that goes this time. Jenny, I'm so
Speaker 1: glad you could come to talk to us many thanks
Speaker 1: for sharing your expertise. Bloomberg Economics Chief geo economics analyst.
Speaker 1: She doesn't know it yet, but she's going to be
Speaker 1: a regular on Bloomberg sound On. I think Kaylee would agree.
Speaker 1: I'm sure Matthew, along with Kaylee lions in Washington. Thanks
Speaker 1: for listening to the sound On podcast. Make sure to
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