1 00:00:00,080 --> 00:00:13,040 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jai Ley. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:34,080 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. Joining 5 00:00:34,120 --> 00:00:36,080 Speaker 1: us in the studio, I'm really pleased to say here 6 00:00:36,120 --> 00:00:38,360 Speaker 1: in New York it is Conrad de Quadros, r Q 7 00:00:38,520 --> 00:00:41,880 Speaker 1: Economic Senior Economist and founding partner as well. Conrad, great 8 00:00:41,880 --> 00:00:43,040 Speaker 1: to have you with us around the table on this 9 00:00:43,080 --> 00:00:45,479 Speaker 1: play roads Friday. Let's go with the trade story. Just 10 00:00:45,520 --> 00:00:48,080 Speaker 1: to begin with, we've talked about markets with Mixer, Let's 11 00:00:48,080 --> 00:00:50,400 Speaker 1: talk about the economy in the United States. What's the 12 00:00:50,440 --> 00:00:53,520 Speaker 1: methodology for calculating what this trade story right now means 13 00:00:53,840 --> 00:00:56,200 Speaker 1: for the US economy. Well, I actually think the bigger 14 00:00:56,240 --> 00:01:00,000 Speaker 1: difficulty is is not the standard methodologies where we're looking 15 00:01:00,120 --> 00:01:02,680 Speaker 1: yet shares the economy and elasticities and all of that. 16 00:01:02,840 --> 00:01:05,479 Speaker 1: I think the bigger question is is the supply chain 17 00:01:05,640 --> 00:01:07,520 Speaker 1: and the impact on the supply chain and how that 18 00:01:07,600 --> 00:01:09,760 Speaker 1: sort of feeds its way through the economy, and that 19 00:01:09,800 --> 00:01:12,320 Speaker 1: could be a lot more problematic for me. The big 20 00:01:12,400 --> 00:01:16,360 Speaker 1: question is what is the president's objective here? Does he 21 00:01:16,400 --> 00:01:19,200 Speaker 1: want to address some of the intellectual property issues with 22 00:01:19,240 --> 00:01:21,600 Speaker 1: American companies in China or does he just want to 23 00:01:21,600 --> 00:01:24,760 Speaker 1: get the deficit get to a smaller deficit with China. 24 00:01:24,840 --> 00:01:26,440 Speaker 1: If that is the objective, then I think we have 25 00:01:26,480 --> 00:01:30,200 Speaker 1: a problem because, Um, if it's a smaller deficit with China, 26 00:01:30,240 --> 00:01:32,280 Speaker 1: then it's going to be larger deficits elsewhere. And then 27 00:01:32,280 --> 00:01:35,640 Speaker 1: do the targets then change other countries? Um, So the 28 00:01:36,120 --> 00:01:39,040 Speaker 1: presence objectives I think have to be clearer and then 29 00:01:39,080 --> 00:01:40,800 Speaker 1: we can have an idea where it's going. I would 30 00:01:40,840 --> 00:01:43,920 Speaker 1: be shocked if, having seen China respond to this first 31 00:01:44,000 --> 00:01:46,600 Speaker 1: round of tariffs, if we now don't see an upsizing 32 00:01:46,600 --> 00:01:48,560 Speaker 1: and U S tariffs two d billion, I think that 33 00:01:48,560 --> 00:01:51,880 Speaker 1: that's coming um and so then UM, that's just not 34 00:01:51,920 --> 00:01:54,320 Speaker 1: the way the president responds to back down. What is 35 00:01:54,360 --> 00:01:58,200 Speaker 1: the two billion number? Besides the amount of minutes nemars 36 00:01:58,320 --> 00:02:02,160 Speaker 1: laying on the field, what is two under billion the 37 00:02:02,200 --> 00:02:05,680 Speaker 1: amount of traders that the actual tariff No, No, that's that. 38 00:02:05,800 --> 00:02:09,320 Speaker 1: I think that's the amount of Chinese products that will 39 00:02:09,360 --> 00:02:12,040 Speaker 1: that the tariff will be will be placed on. UM. 40 00:02:12,080 --> 00:02:14,200 Speaker 1: And so once we get that second round, which I 41 00:02:14,560 --> 00:02:17,560 Speaker 1: think is coming. Since China did respond, um. You know, 42 00:02:17,600 --> 00:02:19,959 Speaker 1: we did have the dollar for dollar response in the 43 00:02:20,000 --> 00:02:23,000 Speaker 1: first round of tariffs. UM, then the response from China 44 00:02:23,080 --> 00:02:25,040 Speaker 1: to that is going to be interesting because we, as 45 00:02:25,040 --> 00:02:27,880 Speaker 1: your prior guests said, the China doesn't have the ability 46 00:02:27,919 --> 00:02:31,280 Speaker 1: to put tariffs on that amount of US imports because 47 00:02:31,400 --> 00:02:33,560 Speaker 1: China doesn't import that that much from the US. You're 48 00:02:33,560 --> 00:02:34,960 Speaker 1: gonna have to forgive me for this, but it's kind 49 00:02:34,960 --> 00:02:38,040 Speaker 1: of like a high level schoolyard fight where you go 50 00:02:38,120 --> 00:02:39,880 Speaker 1: to the teacher at the end and you say, he 51 00:02:40,040 --> 00:02:42,520 Speaker 1: hit me first. Because a lot of people will write 52 00:02:42,600 --> 00:02:44,840 Speaker 1: up this story today and they'll say that China retaliates it. 53 00:02:45,160 --> 00:02:48,400 Speaker 1: China retaliates it. But in the administration's mind and in 54 00:02:48,440 --> 00:02:51,440 Speaker 1: some people's minds, quite justifiably so, it is the United 55 00:02:51,480 --> 00:02:56,120 Speaker 1: States reciprocating. And until we sort this out who is 56 00:02:56,120 --> 00:02:58,360 Speaker 1: reciprocating and who is retaliating, this is going to go 57 00:02:58,400 --> 00:03:00,560 Speaker 1: on and on, isn't it. I think that's a very 58 00:03:00,560 --> 00:03:02,360 Speaker 1: good point, and I think you're absolutely correct. It is 59 00:03:02,440 --> 00:03:06,160 Speaker 1: it is the US that's responding, um to what it perceives. 60 00:03:06,160 --> 00:03:08,480 Speaker 1: And I think that there's some validity to that that 61 00:03:08,480 --> 00:03:13,000 Speaker 1: that the way the trade is, the US policies towards 62 00:03:13,120 --> 00:03:15,399 Speaker 1: US trade are are are unfair, and they're looking to 63 00:03:15,560 --> 00:03:19,240 Speaker 1: level the playing field. Um, now you know the the 64 00:03:19,560 --> 00:03:21,840 Speaker 1: I think that the differences if we look, for example, 65 00:03:21,840 --> 00:03:24,840 Speaker 1: that the W two does an estimate of trade weighted 66 00:03:25,240 --> 00:03:29,000 Speaker 1: aggregate tariffs, and the differences between the tariffs that the 67 00:03:29,440 --> 00:03:31,480 Speaker 1: US products face and the rest of the world is 68 00:03:31,520 --> 00:03:33,640 Speaker 1: not that great. And I think that that's probably the 69 00:03:33,680 --> 00:03:36,480 Speaker 1: reason why most economists don't think that this is going 70 00:03:36,560 --> 00:03:39,240 Speaker 1: to become a full blown trade war, because you don't 71 00:03:39,440 --> 00:03:43,040 Speaker 1: blow up the world economy because of small differences in 72 00:03:43,040 --> 00:03:46,040 Speaker 1: in aggregate tariffs. About four weeks ago, John Ferrell, justin 73 00:03:46,080 --> 00:03:50,720 Speaker 1: Wolfers in Michigan put this out and it's shocking how 74 00:03:50,880 --> 00:03:55,800 Speaker 1: tight and how set low the tariffs are after forty 75 00:03:55,920 --> 00:04:00,160 Speaker 1: years of negotiations. I mean, the President completely miss is 76 00:04:00,200 --> 00:04:03,160 Speaker 1: that within his discourse, we do have low single to 77 00:04:03,720 --> 00:04:06,800 Speaker 1: mid single digit tariffs in the United States and elsewhere 78 00:04:06,800 --> 00:04:10,240 Speaker 1: in Europe as well. But this goes beyond tariff barriers. 79 00:04:10,240 --> 00:04:12,960 Speaker 1: It's non tariff barriers to entry. And you strike a 80 00:04:12,960 --> 00:04:15,760 Speaker 1: really important point on the intellectual property rights. This is 81 00:04:15,800 --> 00:04:18,320 Speaker 1: something that comments Secretary Wilbur Ross has really been pushing 82 00:04:18,400 --> 00:04:21,520 Speaker 1: quite aggressively. Can anything be done that, Conrad? I think so, 83 00:04:21,600 --> 00:04:24,880 Speaker 1: because that's I mean that that's China just changing, changing 84 00:04:24,880 --> 00:04:26,920 Speaker 1: its policies. And actually I actually think that that's how 85 00:04:26,920 --> 00:04:29,320 Speaker 1: this plays out, and that that's where China has the 86 00:04:29,320 --> 00:04:31,520 Speaker 1: ability to give a bit and and where it's likely 87 00:04:31,560 --> 00:04:33,600 Speaker 1: to will see some give from China. Men, if China 88 00:04:33,680 --> 00:04:37,320 Speaker 1: wants to be this move from the developing economy into 89 00:04:37,400 --> 00:04:39,520 Speaker 1: a more developed economy, those are the kind of change 90 00:04:39,560 --> 00:04:42,680 Speaker 1: of structural changes that they have to make. Kntcros with 91 00:04:42,760 --> 00:04:47,120 Speaker 1: this with final thoughts on this jofter, he's already que economics. 92 00:04:47,560 --> 00:04:50,719 Speaker 1: One of the things we know, Kinrad, is when unemployment 93 00:04:51,320 --> 00:04:54,880 Speaker 1: improvement rate improves, we go from ten percent to five 94 00:04:54,920 --> 00:04:58,240 Speaker 1: percent to four percent whatever. It's usually linear, and it 95 00:04:58,320 --> 00:05:01,680 Speaker 1: happens a lot faster than things. It gets better faster 96 00:05:01,800 --> 00:05:04,760 Speaker 1: than we usually perceive. You told us an hour ago 97 00:05:04,880 --> 00:05:09,800 Speaker 1: we could drive under three percent. You're suggested to me 98 00:05:09,960 --> 00:05:15,240 Speaker 1: that seven or eight point two percent of America would 99 00:05:15,240 --> 00:05:19,640 Speaker 1: be employed. Yes, and that if we are not looking 100 00:05:19,680 --> 00:05:21,400 Speaker 1: at and I don't know whether it is the case, 101 00:05:21,440 --> 00:05:23,719 Speaker 1: but if we are not looking at a recession in 102 00:05:25,120 --> 00:05:28,040 Speaker 1: then I think we are are probably going to see 103 00:05:28,040 --> 00:05:30,919 Speaker 1: an unemployment rate that that moves below below three percent. 104 00:05:30,960 --> 00:05:32,880 Speaker 1: And the reason is so we're sitting here at three 105 00:05:33,120 --> 00:05:35,919 Speaker 1: three and a three percent right now. Um, if we 106 00:05:35,960 --> 00:05:38,120 Speaker 1: look at the pace of job growth, which has been 107 00:05:38,120 --> 00:05:40,039 Speaker 1: stronger than I thought it would be this year, and 108 00:05:40,040 --> 00:05:42,920 Speaker 1: it would been averaging close to two labor force growth 109 00:05:42,920 --> 00:05:45,240 Speaker 1: has also been stronger. But on the labor force side, 110 00:05:45,279 --> 00:05:49,280 Speaker 1: we have the influence of demographics and those are going 111 00:05:49,320 --> 00:05:54,039 Speaker 1: to continue to drive lower rates of labor force participation UM. 112 00:05:54,160 --> 00:05:56,400 Speaker 1: And with the kind of job creation that we're seeing, 113 00:05:56,880 --> 00:05:59,200 Speaker 1: I think that leads to an uneplumber rate that hits 114 00:05:59,200 --> 00:06:00,960 Speaker 1: three and a half percent by the end of this year, 115 00:06:01,560 --> 00:06:04,440 Speaker 1: three percent by the end of next year. And if 116 00:06:04,440 --> 00:06:07,640 Speaker 1: the economy continues to grow, UM, we're we'll probably see 117 00:06:07,640 --> 00:06:10,200 Speaker 1: a beat breach three once we get into mean, the 118 00:06:10,240 --> 00:06:12,400 Speaker 1: thing to watch on the unemployment rate is when it 119 00:06:12,440 --> 00:06:14,400 Speaker 1: moves in the other direction. And so you know if 120 00:06:14,440 --> 00:06:17,240 Speaker 1: I'm wrong in the unemployment rate does not continue to decline. 121 00:06:17,600 --> 00:06:19,839 Speaker 1: Once we see about a half a percentage point rise 122 00:06:19,839 --> 00:06:23,680 Speaker 1: in the unemployment rate, that has been a true and 123 00:06:23,800 --> 00:06:27,960 Speaker 1: tested signal that the economy has gone into recession. When 124 00:06:27,960 --> 00:06:30,360 Speaker 1: you when you hear me talk about vector change, That's 125 00:06:30,400 --> 00:06:33,920 Speaker 1: precisely what it means when Kind describes a vector flipping. 126 00:06:34,120 --> 00:06:36,680 Speaker 1: So let me ask you a big question for this administration, 127 00:06:36,680 --> 00:06:38,800 Speaker 1: who have been tremendous with the federal reserve. Then a 128 00:06:38,880 --> 00:06:41,840 Speaker 1: crack a pit last week when Larry Kind, of the 129 00:06:41,880 --> 00:06:45,400 Speaker 1: Economic Advisor to the President, suggested that the Federal Reserve 130 00:06:45,480 --> 00:06:48,960 Speaker 1: should be perhaps conscious that good payrolls growth and a 131 00:06:49,000 --> 00:06:52,279 Speaker 1: strong economy doesn't necessarily mean that inflation is going to 132 00:06:52,360 --> 00:06:54,920 Speaker 1: run away. What do you think that message was all about. Well, 133 00:06:54,960 --> 00:06:57,599 Speaker 1: I mean, I think on the on the comment, I 134 00:06:57,600 --> 00:07:00,200 Speaker 1: think we just need to remember that this administration just 135 00:07:00,240 --> 00:07:04,240 Speaker 1: does things differently. And um, you know, we when we 136 00:07:04,279 --> 00:07:06,640 Speaker 1: look at that, that's not a message that the FED 137 00:07:06,760 --> 00:07:08,640 Speaker 1: is not getting from elsewhere also, right, So, I mean 138 00:07:08,720 --> 00:07:10,640 Speaker 1: it's on both sides of the aisle. I think there 139 00:07:10,720 --> 00:07:13,560 Speaker 1: there's there is a level of concern that the Fed 140 00:07:14,160 --> 00:07:18,320 Speaker 1: um is is tightening or might eventually tighten too much. 141 00:07:18,480 --> 00:07:21,520 Speaker 1: I'm not concerned about that at all. And that, um, 142 00:07:21,560 --> 00:07:23,440 Speaker 1: if we look at and it was very interesting common 143 00:07:23,440 --> 00:07:25,800 Speaker 1: in the minutes yesterday that when they were talking about 144 00:07:25,840 --> 00:07:27,480 Speaker 1: the yield curve, that they need to look at broader 145 00:07:27,520 --> 00:07:30,320 Speaker 1: measures of financial conditions. And if we look at broader 146 00:07:30,320 --> 00:07:32,360 Speaker 1: measures of financial conditions, and the one that I focused 147 00:07:32,360 --> 00:07:34,520 Speaker 1: on is the one that the Chicago Fed puts together 148 00:07:34,680 --> 00:07:37,440 Speaker 1: because I think that's what the FED looks at most closely. Um, 149 00:07:37,640 --> 00:07:40,160 Speaker 1: that's not showing any tightening and financial conditions when we 150 00:07:40,200 --> 00:07:44,800 Speaker 1: include um, not just the yield curve, but um levels 151 00:07:44,800 --> 00:07:49,560 Speaker 1: of yield survey data on through the year. Yeah, that's 152 00:07:49,600 --> 00:07:51,520 Speaker 1: an example of that. I mean, I think that's a 153 00:07:51,600 --> 00:07:53,880 Speaker 1: that's a pretty strong signal that the Fed is is 154 00:07:53,960 --> 00:07:58,320 Speaker 1: not materially tightening monetary policy. I would I would imagine 155 00:07:58,320 --> 00:08:01,360 Speaker 1: that if monetary policy was getting tighter, financial conditions would 156 00:08:01,360 --> 00:08:03,400 Speaker 1: also get tighter. And that's not happening. So I'm not 157 00:08:03,440 --> 00:08:05,960 Speaker 1: concerned about the FED overdoing it here. The tightening we 158 00:08:06,040 --> 00:08:08,480 Speaker 1: asking though, is maybe not the United States, it's in 159 00:08:08,520 --> 00:08:11,360 Speaker 1: global financial conditions. Is that something they need to think 160 00:08:11,360 --> 00:08:13,480 Speaker 1: about a little bit more. And the potential feedback loop 161 00:08:13,520 --> 00:08:16,200 Speaker 1: that comes into the United States, well, and that's I 162 00:08:16,200 --> 00:08:19,239 Speaker 1: think a function of primarily of what's happening with the dollar. 163 00:08:19,440 --> 00:08:22,040 Speaker 1: And and you know, the FED is it kind of 164 00:08:22,080 --> 00:08:25,080 Speaker 1: has its hands tied here because there I think they 165 00:08:25,080 --> 00:08:27,960 Speaker 1: are going to be focused on feedback loops, feedback loops, 166 00:08:28,040 --> 00:08:30,560 Speaker 1: I think that the right now, the feeling is that 167 00:08:30,600 --> 00:08:33,959 Speaker 1: those feed feedback loops are not particularly large and are 168 00:08:34,000 --> 00:08:36,160 Speaker 1: not going to change the track that the economy is on. 169 00:08:36,600 --> 00:08:39,280 Speaker 1: But the FED needs to focus on its primary and 170 00:08:39,320 --> 00:08:42,000 Speaker 1: congressionally mandated goals, which is the labor market and inflation, 171 00:08:42,040 --> 00:08:44,320 Speaker 1: and those are arguing for continued moves higher in the 172 00:08:44,320 --> 00:08:47,200 Speaker 1: FED funds. Right, are you going to watch the World 173 00:08:47,240 --> 00:08:53,040 Speaker 1: Cup today? You ask him, absolutely, I'll watch. I'll watch 174 00:08:53,040 --> 00:08:55,960 Speaker 1: the rock up today? Is how many times will flop? 175 00:08:57,600 --> 00:09:00,000 Speaker 1: I mean, you know, it's a big source of study. 176 00:09:00,080 --> 00:09:02,480 Speaker 1: I mean John Andrew beating over at the Wall Street journals. 177 00:09:04,080 --> 00:09:08,240 Speaker 1: I mean Brazil winning, he flopped twenty four minutes, ten seconds, 178 00:09:08,679 --> 00:09:11,800 Speaker 1: Brazil tied. It goes out to thirty four minutes with 179 00:09:11,840 --> 00:09:14,319 Speaker 1: no falls, no falls. I mean, come on, this is 180 00:09:14,360 --> 00:09:17,440 Speaker 1: tied into what brazils. It's not that he's hurt. It 181 00:09:17,480 --> 00:09:21,880 Speaker 1: has to do with delaying or he has found a law. 182 00:09:22,400 --> 00:09:25,360 Speaker 1: He's found a law. A lot of people kick name 183 00:09:25,400 --> 00:09:27,240 Speaker 1: out all the time. I mean, I don't. I don't 184 00:09:27,240 --> 00:09:30,680 Speaker 1: think the rolling around is justified. Colin rapid, he's also 185 00:09:30,960 --> 00:09:32,959 Speaker 1: he's also a little guy. He's five foot, takes a 186 00:09:33,000 --> 00:09:34,800 Speaker 1: hundred and forty pounds, and you know you get hit 187 00:09:34,840 --> 00:09:36,480 Speaker 1: by a big mustard going to go down because I've 188 00:09:36,480 --> 00:09:39,120 Speaker 1: seen they go right after him, big time, big time. 189 00:09:39,200 --> 00:09:42,000 Speaker 1: They really do. Please, you're gonna watch it though it's France. 190 00:09:42,360 --> 00:09:46,160 Speaker 1: Have any predictions, Mr Quadras, I that's not my as 191 00:09:46,200 --> 00:09:48,920 Speaker 1: sophisticated as I know. I mean, if you look, if 192 00:09:48,920 --> 00:09:50,800 Speaker 1: you look at my pool on Bloomberg and you see 193 00:09:50,800 --> 00:09:54,400 Speaker 1: how badly I'm doing, that's why. Oh no, no, I 194 00:09:54,480 --> 00:09:57,360 Speaker 1: have the trophy. I've done. I've done really well. The 195 00:09:57,440 --> 00:10:14,360 Speaker 1: last two days they haven't played with us down. You know, 196 00:10:14,480 --> 00:10:17,360 Speaker 1: John's got a zillion questions for Alan Krueger about the 197 00:10:17,400 --> 00:10:20,920 Speaker 1: state of our labor labor economy. Professor Krueger is at 198 00:10:20,920 --> 00:10:24,480 Speaker 1: Princeton University of former chairman of the President's Council of 199 00:10:24,520 --> 00:10:28,640 Speaker 1: Economic Advisors, is public service to President Obama in the nation, 200 00:10:28,720 --> 00:10:31,839 Speaker 1: but far more than that, one of our most interesting 201 00:10:31,920 --> 00:10:37,120 Speaker 1: and acute labor economists. The number one feedback now I 202 00:10:37,200 --> 00:10:40,960 Speaker 1: get Alan Krueger is not on Brazil, Belgium, not in 203 00:10:41,000 --> 00:10:44,760 Speaker 1: the Red Sox. It's on guys are saying on this show, 204 00:10:44,760 --> 00:10:48,400 Speaker 1: men and women that were fully employed, and not one 205 00:10:48,840 --> 00:10:55,720 Speaker 1: single listener agrees. Are we fully employed by the traditional 206 00:10:55,800 --> 00:10:58,640 Speaker 1: measure that economists would use. I would say we're at 207 00:10:58,640 --> 00:11:01,760 Speaker 1: full employment, but as I've said on your show before, Tom, 208 00:11:01,880 --> 00:11:04,719 Speaker 1: full employment does not mean perfection, and we are far 209 00:11:04,760 --> 00:11:07,079 Speaker 1: away from perfection when it comes to the labor market. 210 00:11:07,440 --> 00:11:09,120 Speaker 1: John Farrell that I don't know what it's like in 211 00:11:09,120 --> 00:11:12,840 Speaker 1: the United Kingdom. It's visceral here. People get really upset 212 00:11:13,480 --> 00:11:16,280 Speaker 1: when the year suits and tice a full employment. Of 213 00:11:16,320 --> 00:11:18,360 Speaker 1: course they do, and that's the kind of campaign the 214 00:11:18,360 --> 00:11:21,120 Speaker 1: President brand a couple of years back. Alan. It's also 215 00:11:21,200 --> 00:11:24,079 Speaker 1: hard to reconcile with the payrolls growth that we're seeing. 216 00:11:24,160 --> 00:11:27,680 Speaker 1: We're looking for another rest similar a hundred ninety thousand today. 217 00:11:27,720 --> 00:11:31,560 Speaker 1: How is that possible if we're at full employment. Well, 218 00:11:31,800 --> 00:11:35,280 Speaker 1: the unemployment rate has been heading down. You know, we 219 00:11:35,360 --> 00:11:38,360 Speaker 1: haven't seen any recovery in labor force participation. In fact, 220 00:11:38,440 --> 00:11:41,680 Speaker 1: the labor force participation rate has continued to decline since 221 00:11:42,000 --> 00:11:45,200 Speaker 1: President Trump took office. He hasn't talked about that very much. 222 00:11:45,720 --> 00:11:49,000 Speaker 1: Um So, the growth has been coming in employment from 223 00:11:49,040 --> 00:11:51,640 Speaker 1: a decline and unemployment. People are staying in the labor 224 00:11:51,640 --> 00:11:54,040 Speaker 1: force longer but they haven't been coming back, and we 225 00:11:54,080 --> 00:11:56,679 Speaker 1: started to see that the labor market slank. The paper 226 00:11:56,720 --> 00:12:02,080 Speaker 1: once thought was structural, it's actually perhaps cyclical. Uh. You know, 227 00:12:02,160 --> 00:12:05,760 Speaker 1: I think we really are confronting structural problems now we 228 00:12:05,760 --> 00:12:09,240 Speaker 1: we have uh and and and the business cycle, the 229 00:12:09,280 --> 00:12:12,240 Speaker 1: deep recession made the structural problems worse that the laid 230 00:12:12,240 --> 00:12:15,439 Speaker 1: our response to them. So the tremendous rise and inequality 231 00:12:15,440 --> 00:12:19,320 Speaker 1: that we've seen since the nineteen eighties, the polarization that 232 00:12:19,400 --> 00:12:25,000 Speaker 1: we have in terms of employer demand, the very heterogeneous 233 00:12:25,120 --> 00:12:28,000 Speaker 1: quality of education of the skills of the workforce. I 234 00:12:28,000 --> 00:12:30,760 Speaker 1: think those are all structural problems, and the business cycle 235 00:12:30,760 --> 00:12:32,520 Speaker 1: has made them worse. So a lot of people will 236 00:12:32,520 --> 00:12:34,800 Speaker 1: be asking where is the white growth if we're a 237 00:12:34,840 --> 00:12:37,400 Speaker 1: full employment where is it allan Well, some of the 238 00:12:37,400 --> 00:12:40,200 Speaker 1: wage growth is in bonuses, and we're seeing bonuses now 239 00:12:40,280 --> 00:12:43,839 Speaker 1: that might not stick um after we we hit the 240 00:12:43,880 --> 00:12:46,880 Speaker 1: peak of this recovery. Uh. And the wage growth has 241 00:12:46,880 --> 00:12:49,320 Speaker 1: been more sluggish than one would predict from the historical 242 00:12:49,400 --> 00:12:52,520 Speaker 1: relationship between how tight the labor market is in wage growth. 243 00:12:53,000 --> 00:12:55,080 Speaker 1: And that's been a trend, to be honest. If you 244 00:12:55,200 --> 00:12:58,280 Speaker 1: look at the nineties and the first decade of the 245 00:12:58,320 --> 00:13:01,839 Speaker 1: two thousand's, the love all of unemployment that's consistent with 246 00:13:01,960 --> 00:13:04,920 Speaker 1: real weage growth has been moving down, meaning that it 247 00:13:04,960 --> 00:13:07,440 Speaker 1: takes an even tighter labor market to generate more real 248 00:13:07,480 --> 00:13:09,559 Speaker 1: wage growth. A lot of people have argued over the 249 00:13:09,640 --> 00:13:12,000 Speaker 1: last couple of years that the cost of employing someone 250 00:13:12,040 --> 00:13:14,199 Speaker 1: has gone up by quite a lot. You have to 251 00:13:14,240 --> 00:13:16,960 Speaker 1: pay for the healthcare and other adulans as well. Do 252 00:13:17,000 --> 00:13:18,800 Speaker 1: you think that some of the story is just not 253 00:13:18,920 --> 00:13:22,360 Speaker 1: being captured by base salary, that the cost to hire 254 00:13:22,480 --> 00:13:25,280 Speaker 1: is actually incrementally a lot more expensive than it was 255 00:13:25,559 --> 00:13:28,800 Speaker 1: ten years ago. Well, a couple of things that are first, 256 00:13:28,880 --> 00:13:31,960 Speaker 1: employment costs index picks up, the full cost of hiring 257 00:13:32,000 --> 00:13:34,440 Speaker 1: someone picks up, not only the health insurance costs but 258 00:13:34,520 --> 00:13:38,840 Speaker 1: also vacation time. And the employment cost index is up 259 00:13:38,840 --> 00:13:41,520 Speaker 1: but not three percent yet, still just below three percent. 260 00:13:41,720 --> 00:13:44,120 Speaker 1: So that's part of the story. But we're also seeing 261 00:13:44,120 --> 00:13:47,040 Speaker 1: a slowdown in the growth and healthcare costs has begun 262 00:13:47,080 --> 00:13:49,880 Speaker 1: to pick up over the last year. But part of 263 00:13:49,880 --> 00:13:52,040 Speaker 1: the story was we should have seen even stronger wage 264 00:13:52,080 --> 00:13:55,120 Speaker 1: growth because health insurance costs were growing more slowly. I 265 00:13:55,200 --> 00:13:59,679 Speaker 1: just put on Twitter with your Alan Krueger uh, monikers. Well, 266 00:14:01,040 --> 00:14:02,880 Speaker 1: maybe it's not the article of the year, but it's 267 00:14:02,920 --> 00:14:05,200 Speaker 1: the reporting of the year and the gig economy where 268 00:14:05,200 --> 00:14:08,800 Speaker 1: you've done a lot of work. Elena Samuel's Alona Samuel 269 00:14:08,880 --> 00:14:12,640 Speaker 1: Samuels rather at the Atlantic magazine and she actually went 270 00:14:12,640 --> 00:14:15,560 Speaker 1: out and got a job with Amazon Flex and the 271 00:14:15,800 --> 00:14:21,800 Speaker 1: article is devastating about the new American gig economy that 272 00:14:21,960 --> 00:14:26,960 Speaker 1: basically it's a fraud. It's people working at near minimum wage, 273 00:14:27,120 --> 00:14:31,720 Speaker 1: at minimum wage, net net net clean below minimum wage. 274 00:14:32,160 --> 00:14:35,200 Speaker 1: What is your research? Does it agree with the reporting 275 00:14:35,280 --> 00:14:39,000 Speaker 1: of of Alana Samuels. I think what we see in 276 00:14:39,040 --> 00:14:42,280 Speaker 1: the gig economy by and large is very elastic supply, 277 00:14:42,960 --> 00:14:45,720 Speaker 1: meaning this is a place where people can find work. 278 00:14:45,960 --> 00:14:50,840 Speaker 1: She describes that they float into that sector and initially 279 00:14:51,520 --> 00:14:54,440 Speaker 1: wages may have been higher than someone could earn as 280 00:14:54,440 --> 00:14:57,800 Speaker 1: a taxi driver or other parts of the economy. But 281 00:14:57,920 --> 00:15:00,760 Speaker 1: because of the elastic supply, I think we're seeing an 282 00:15:00,760 --> 00:15:04,400 Speaker 1: equilibrium where the wages pushed pretty low, the wages pushed 283 00:15:04,400 --> 00:15:07,000 Speaker 1: pretty low. Within the microeconomics, is an income in a 284 00:15:07,040 --> 00:15:11,680 Speaker 1: substitute effect? Or is it the new atomization of unions. 285 00:15:11,720 --> 00:15:14,560 Speaker 1: We started out with the guilds in Europe a million 286 00:15:14,640 --> 00:15:16,800 Speaker 1: years ago. John Fair, I don't know if you know this. 287 00:15:16,960 --> 00:15:19,760 Speaker 1: Alan Kruger does like a ten week trip every year 288 00:15:20,120 --> 00:15:24,200 Speaker 1: doing research on the guilds of cafes in Venice. Spent 289 00:15:24,280 --> 00:15:30,040 Speaker 1: a lot of time Italy. But whether it's your researching 290 00:15:30,120 --> 00:15:32,720 Speaker 1: the guilds of Italy or it's the death of unions 291 00:15:32,760 --> 00:15:36,200 Speaker 1: in America, my key question today is is the gig 292 00:15:36,240 --> 00:15:40,760 Speaker 1: economy the new death of unions? Well, I think unions 293 00:15:41,400 --> 00:15:44,520 Speaker 1: were already on their deathbed, and I think the recent 294 00:15:44,560 --> 00:15:46,760 Speaker 1: Supreme Court decision in the Jana's case is going to 295 00:15:46,840 --> 00:15:48,840 Speaker 1: make it even harder. For the one area where unions 296 00:15:48,880 --> 00:15:51,440 Speaker 1: had some strength. We're gonna see a lot more free 297 00:15:51,520 --> 00:15:54,080 Speaker 1: riding where workers get the benefits of what's left of 298 00:15:54,160 --> 00:15:58,280 Speaker 1: unions and they're not paying for those services. I've supported 299 00:15:58,280 --> 00:16:01,840 Speaker 1: for a long time new structures of unions which will 300 00:16:02,040 --> 00:16:05,040 Speaker 1: enable gig workers to organize, to negotiate, to try to 301 00:16:05,080 --> 00:16:07,800 Speaker 1: improve their terms and conditions. Forget about Detroit unions where 302 00:16:07,840 --> 00:16:09,640 Speaker 1: you made a hundred and twenty eight thousand. You never 303 00:16:09,680 --> 00:16:12,440 Speaker 1: thought you'd make that before. The fact is we've gone 304 00:16:12,480 --> 00:16:15,640 Speaker 1: from sixty thousand a year union. You know, I'm just 305 00:16:15,720 --> 00:16:19,880 Speaker 1: using old numbers down to twenty eight thousand non union, 306 00:16:20,320 --> 00:16:22,760 Speaker 1: and now we're going to gig economy, which is somewhere 307 00:16:22,760 --> 00:16:26,200 Speaker 1: below that twenty eight thousand. Is it is Mr Bezos 308 00:16:26,240 --> 00:16:31,120 Speaker 1: and others taking advantage of this new wave of atomization 309 00:16:31,240 --> 00:16:34,880 Speaker 1: of your American labor economy. Yeah. I think worker bargaining 310 00:16:34,920 --> 00:16:37,280 Speaker 1: power has been declining for lots of reasons. Part of 311 00:16:37,320 --> 00:16:39,680 Speaker 1: it's the decline in unions. Part of it is practices 312 00:16:39,760 --> 00:16:43,480 Speaker 1: companies use. Amazon has non compete classes where you can't 313 00:16:43,520 --> 00:16:47,080 Speaker 1: go work for another warehouse in some cases. UH fast 314 00:16:47,080 --> 00:16:49,800 Speaker 1: food restaurants have no poaching agreements where they won't hire 315 00:16:49,840 --> 00:16:52,720 Speaker 1: workers away from other restaurants in their chain. I think 316 00:16:52,760 --> 00:16:55,960 Speaker 1: all of these practices have weakened reduced competition for work. 317 00:16:56,280 --> 00:16:58,160 Speaker 1: I think it's a good too. I don't mean to interrupt, John, 318 00:16:58,160 --> 00:17:00,360 Speaker 1: but I know you're over there calculating how much Namer 319 00:17:00,400 --> 00:17:02,760 Speaker 1: has been on the field rolling around. No. I was 320 00:17:02,800 --> 00:17:05,520 Speaker 1: looking at Juventus over the last five days. What are 321 00:17:05,520 --> 00:17:10,040 Speaker 1: they doing with the stock? The stock is up. Is 322 00:17:10,040 --> 00:17:12,560 Speaker 1: there any news not not at the moment, but they've 323 00:17:12,560 --> 00:17:15,320 Speaker 1: added two and eighty something million euros to the market. 324 00:17:15,480 --> 00:17:17,800 Speaker 1: We had to medicate Pharaoh yesterday. I don't know if 325 00:17:17,800 --> 00:17:21,720 Speaker 1: you know this, Ellen, but he's a c Melanish act. 326 00:17:24,800 --> 00:17:27,000 Speaker 1: But that we had to medicate John about eleven am. 327 00:17:27,160 --> 00:17:29,160 Speaker 1: And it's got something to say about your tennis too. 328 00:17:29,920 --> 00:17:32,199 Speaker 1: I think Allen's going to give you some lessons. Come on, 329 00:17:32,400 --> 00:17:34,560 Speaker 1: I mean, you can't get a hotel room in London. 330 00:17:34,640 --> 00:17:36,840 Speaker 1: I think Wimbledon needs its fair share of time on 331 00:17:36,880 --> 00:17:40,119 Speaker 1: this show. Frances Teo follows into the third round, first 332 00:17:40,119 --> 00:17:43,560 Speaker 1: time in a major. There you go, keep going on, stop, 333 00:17:43,840 --> 00:17:48,199 Speaker 1: please keep going. Is Federer getting too old? It doesn't 334 00:17:48,240 --> 00:17:51,480 Speaker 1: look like it on the court. You seriously, there's such 335 00:17:51,520 --> 00:17:54,240 Speaker 1: a beautiful game. Okay. Now the new game at Wimbledon, 336 00:17:54,320 --> 00:17:56,280 Speaker 1: where it's grass in the old days, is the grass 337 00:17:56,280 --> 00:17:58,280 Speaker 1: today the same as you old grass where the ball 338 00:17:58,400 --> 00:18:02,200 Speaker 1: slid like eight ft uh it stays awfully low. I 339 00:18:02,240 --> 00:18:03,920 Speaker 1: don't know if it's the same, but it still stays. 340 00:18:04,200 --> 00:18:07,040 Speaker 1: Does Nadal do it Wimbledon? Nadal is a clay guy 341 00:18:07,080 --> 00:18:10,719 Speaker 1: who loves ruling garrows in France. Can he play at 342 00:18:10,720 --> 00:18:13,280 Speaker 1: Wimbledon and win? Or is it just such a different 343 00:18:13,280 --> 00:18:16,439 Speaker 1: game it's a harder game for him. I certainly wouldn't 344 00:18:16,520 --> 00:18:18,440 Speaker 1: rule it out. I'll tell you one thing that amazes 345 00:18:18,480 --> 00:18:20,600 Speaker 1: me about Nadal at the French Open and at the 346 00:18:20,680 --> 00:18:24,160 Speaker 1: US Open. His speed is extraordinary, Billy to get around 347 00:18:24,160 --> 00:18:27,760 Speaker 1: the court, that the way the birst he takes, it's unbelievable. 348 00:18:27,920 --> 00:18:30,240 Speaker 1: This is a created credit important. This goes like the 349 00:18:30,280 --> 00:18:34,760 Speaker 1: neighbor for amateurs and tennis. Read me, shade to our forehead? 350 00:18:35,880 --> 00:18:38,719 Speaker 1: Which side? Did those guys shade to? Their back hands 351 00:18:38,760 --> 00:18:41,760 Speaker 1: are so good they almost shade to go to the 352 00:18:41,800 --> 00:18:44,639 Speaker 1: back end, don't they. Well, Nadal's backhand is really a 353 00:18:44,680 --> 00:18:47,960 Speaker 1: two handed forehand, but you'll see you'll see them run 354 00:18:48,000 --> 00:18:50,119 Speaker 1: around their back end. You know, they'll hit it inside 355 00:18:50,119 --> 00:18:53,240 Speaker 1: out forehand by running around their back hand. And also 356 00:18:53,440 --> 00:18:55,359 Speaker 1: look how fast they are to run around their back end. 357 00:18:55,440 --> 00:18:58,760 Speaker 1: That's the best tennis player you ever saw. It has 358 00:18:58,800 --> 00:19:02,320 Speaker 1: to be Federer, right. So Rosie Cassal's warm up at 359 00:19:02,359 --> 00:19:04,960 Speaker 1: Forest Till she was a giant, like four ft ten inches. 360 00:19:05,720 --> 00:19:08,879 Speaker 1: She would practice her leap and she would get she 361 00:19:08,960 --> 00:19:11,679 Speaker 1: was like an NBA player. She would get literally a 362 00:19:11,680 --> 00:19:14,480 Speaker 1: foot half off the ground. That was amazing. But yeah, 363 00:19:14,520 --> 00:19:16,320 Speaker 1: that's one thing I like about tennis. You could be 364 00:19:16,359 --> 00:19:19,880 Speaker 1: any size there. There there are female players on tour 365 00:19:20,000 --> 00:19:22,960 Speaker 1: five ft two ft three. I mean, this is great, John. 366 00:19:23,000 --> 00:19:24,879 Speaker 1: I had no idea how it's waking up to redux 367 00:19:25,000 --> 00:19:27,359 Speaker 1: my tennis life. I didn't realize you have a played. 368 00:19:27,560 --> 00:19:30,600 Speaker 1: Oh I'd love to know how many I would love 369 00:19:30,640 --> 00:19:33,200 Speaker 1: to see. Do you know how many women's Davis records 370 00:19:33,280 --> 00:19:36,119 Speaker 1: I snapped? Can we give a charity tennis match if 371 00:19:36,320 --> 00:19:38,879 Speaker 1: you want to write in on Twitter at Pharaoh TV, 372 00:19:39,400 --> 00:19:43,680 Speaker 1: we can raise some money to get to play tennis. 373 00:19:55,800 --> 00:19:58,359 Speaker 1: It is now a great pleasure to bring two year 374 00:19:58,440 --> 00:20:01,960 Speaker 1: from the University of Michigan, Betsy Stevenson, who does some 375 00:20:02,119 --> 00:20:07,239 Speaker 1: exceptionally creative research on the American labor economy. Bessie, I'm 376 00:20:07,240 --> 00:20:09,919 Speaker 1: gonna ask you the question. It has been a theme today, 377 00:20:09,960 --> 00:20:12,679 Speaker 1: which is a lot of fancy people in fancy suits 378 00:20:12,680 --> 00:20:16,200 Speaker 1: and try ties and dresses tell us that America is 379 00:20:16,240 --> 00:20:22,680 Speaker 1: fully employed and aggressively our listening audience doesn't agree. Which 380 00:20:22,760 --> 00:20:27,800 Speaker 1: is it? Yeah, Um, well that's a great question, and 381 00:20:27,920 --> 00:20:30,600 Speaker 1: I think is that what happens is we take a 382 00:20:30,640 --> 00:20:33,120 Speaker 1: look at the data and we see that unemployment rates 383 00:20:33,160 --> 00:20:36,800 Speaker 1: are really low. So the issue about getting more Americans 384 00:20:36,920 --> 00:20:40,560 Speaker 1: employed really isn't about bringing the unemployment right down lower. 385 00:20:41,080 --> 00:20:43,800 Speaker 1: It's about bringing more people into the labor markets. But 386 00:20:43,920 --> 00:20:47,320 Speaker 1: I think the thing that you hear from your listeners, 387 00:20:47,359 --> 00:20:50,680 Speaker 1: that the average person hears or believes is that they 388 00:20:50,680 --> 00:20:53,720 Speaker 1: don't have the job they necessarily want, or they don't 389 00:20:53,720 --> 00:20:55,879 Speaker 1: have the hours they want, or they're not able to 390 00:20:55,960 --> 00:21:00,680 Speaker 1: use their skills appropriately. So economists or us looking at 391 00:21:00,760 --> 00:21:02,600 Speaker 1: how many people are out there looking for work that 392 00:21:02,720 --> 00:21:06,920 Speaker 1: don't have any But of course you're not unemployed if 393 00:21:06,960 --> 00:21:10,960 Speaker 1: you have uh, if you have a full time job. 394 00:21:11,200 --> 00:21:13,960 Speaker 1: But it's not that in the career you were hoping 395 00:21:14,000 --> 00:21:17,120 Speaker 1: to have the career you trained for, um, if there's 396 00:21:17,119 --> 00:21:21,119 Speaker 1: ability to move up, um, or even if you're part time. Right, 397 00:21:21,160 --> 00:21:23,320 Speaker 1: And we've we've paid a lot of attention to those 398 00:21:23,600 --> 00:21:25,920 Speaker 1: part time numbers. Now that's not going on. We've still 399 00:21:26,040 --> 00:21:28,719 Speaker 1: we've seen the number of people employed part time has 400 00:21:28,760 --> 00:21:31,199 Speaker 1: come way down as well. Um, we do have a 401 00:21:31,200 --> 00:21:34,880 Speaker 1: pretty tight labor market. The question is when our employer 402 00:21:34,920 --> 00:21:37,359 Speaker 1: is going to start reacting to that by providing people 403 00:21:37,359 --> 00:21:40,479 Speaker 1: more training, by giving them upward mobility, and by the 404 00:21:40,480 --> 00:21:43,160 Speaker 1: big thing everybody wants, which is higher wages. But see 405 00:21:43,160 --> 00:21:45,200 Speaker 1: I here for a couple of years now that we've 406 00:21:45,200 --> 00:21:47,280 Speaker 1: got a tight labor market, but then we carry on 407 00:21:47,359 --> 00:21:52,080 Speaker 1: printing scood jobs every single month in a payrolls report, 408 00:21:52,119 --> 00:21:55,320 Speaker 1: and the participation rates tick tire again today. And I'm 409 00:21:55,359 --> 00:21:57,399 Speaker 1: just wondering how much hit and unemployment there actually is 410 00:21:57,400 --> 00:21:59,320 Speaker 1: and how many people that are available to come back 411 00:21:59,359 --> 00:22:04,320 Speaker 1: into the work for um. You know that that's a 412 00:22:04,400 --> 00:22:07,639 Speaker 1: really hard question because the people who are you know, 413 00:22:07,840 --> 00:22:10,399 Speaker 1: a lot of people are choosing not to work whatever 414 00:22:10,440 --> 00:22:14,240 Speaker 1: they're outside option is. Maybe it's staying home with their kids. Um, 415 00:22:14,240 --> 00:22:18,439 Speaker 1: maybe it's you know, taking care of elderly relatives. Maybe 416 00:22:18,440 --> 00:22:21,240 Speaker 1: it's living off of their savings. Whatever their options are, 417 00:22:21,760 --> 00:22:24,160 Speaker 1: they've got to have something, a job that looks good 418 00:22:24,240 --> 00:22:27,240 Speaker 1: enough that they want to give that up. And that's 419 00:22:27,280 --> 00:22:29,880 Speaker 1: a really hard thing for us to measure. How many 420 00:22:29,960 --> 00:22:32,760 Speaker 1: people out there are right on the cusp of thinking, 421 00:22:32,880 --> 00:22:35,919 Speaker 1: if the right job comes along, I would change what 422 00:22:36,000 --> 00:22:38,639 Speaker 1: I'm doing. You know, if you look at at the 423 00:22:38,680 --> 00:22:40,719 Speaker 1: history of the United States labor market, I mean, our 424 00:22:40,800 --> 00:22:43,960 Speaker 1: labor force participation searched in the eighties and nineties, but 425 00:22:44,040 --> 00:22:47,719 Speaker 1: that's because women decided to give up staying home and 426 00:22:47,760 --> 00:22:50,560 Speaker 1: come into the labor market. We've had a lot of 427 00:22:50,600 --> 00:22:54,760 Speaker 1: men over the last fifty years decide that they have 428 00:22:54,880 --> 00:22:58,200 Speaker 1: better things to do besides working, and we've had a 429 00:22:58,280 --> 00:23:00,200 Speaker 1: lot of economists trying to figure out what going to 430 00:23:00,280 --> 00:23:03,159 Speaker 1: do to turn that around. And that is a fifty 431 00:23:03,200 --> 00:23:05,399 Speaker 1: year trends that we haven't seen turned around. I mean, 432 00:23:05,440 --> 00:23:07,480 Speaker 1: if you just joined us, Betsy Stevenson with us with 433 00:23:07,560 --> 00:23:11,320 Speaker 1: a Ford School, University of Michigan and exceptionally good at 434 00:23:11,440 --> 00:23:16,520 Speaker 1: core economics, but linking it into policy, what should be 435 00:23:16,600 --> 00:23:21,800 Speaker 1: the optimal policy? Professor Stevenson of the man's session? If 436 00:23:21,800 --> 00:23:24,880 Speaker 1: there is a man's session, and yeah, it's better than 437 00:23:24,920 --> 00:23:27,439 Speaker 1: it used to be, but a lot of people listening 438 00:23:27,480 --> 00:23:31,360 Speaker 1: this is you correctly state, would say they're under employed. 439 00:23:31,920 --> 00:23:36,480 Speaker 1: What's the policy to jump start this? Well, I would 440 00:23:36,480 --> 00:23:39,840 Speaker 1: not call it a man session because again, a lot 441 00:23:39,880 --> 00:23:45,000 Speaker 1: of this is um men who are who have other alternatives, 442 00:23:45,040 --> 00:23:49,120 Speaker 1: who have people who are supporting them, parents or girlfriends 443 00:23:49,200 --> 00:23:52,439 Speaker 1: or wives. And what we have to do, though, is 444 00:23:52,480 --> 00:23:56,520 Speaker 1: make work appealing to them. We have to find ways 445 00:23:56,560 --> 00:24:00,639 Speaker 1: in which they feel valued at work. And the problem 446 00:24:00,720 --> 00:24:03,840 Speaker 1: is we've shifted from an economy where we make stuff 447 00:24:04,320 --> 00:24:06,800 Speaker 1: to an economy where we do stuff for other people. 448 00:24:07,200 --> 00:24:10,120 Speaker 1: And you know, that's what we're seeing in policy right 449 00:24:10,160 --> 00:24:13,639 Speaker 1: now is trying to say, well, if we put up 450 00:24:13,680 --> 00:24:17,080 Speaker 1: trade barriers, if we um, you know, do a bunch 451 00:24:17,119 --> 00:24:19,639 Speaker 1: of things, we can start making stuff. But I feel 452 00:24:19,720 --> 00:24:23,720 Speaker 1: very strongly that getting people jobs that pay them very 453 00:24:23,760 --> 00:24:27,720 Speaker 1: little assembling things, um, you know, the kind of jobs 454 00:24:27,720 --> 00:24:29,919 Speaker 1: that are currently being done in China is not going 455 00:24:30,000 --> 00:24:32,800 Speaker 1: to bring these guys back into the labor market because 456 00:24:33,200 --> 00:24:35,840 Speaker 1: for for them to have dignity in their jobs, it's 457 00:24:35,880 --> 00:24:38,159 Speaker 1: not just about building something, it's about being paid a 458 00:24:38,200 --> 00:24:40,800 Speaker 1: respectable wage. So what we've got to do is find 459 00:24:40,840 --> 00:24:44,320 Speaker 1: a way is to make the new economy appealing to 460 00:24:45,200 --> 00:24:48,440 Speaker 1: men who have very traditional notions of masculinity. I mean, 461 00:24:48,440 --> 00:24:51,280 Speaker 1: Professor Stevenson. If I look at the Atlantic magazine article 462 00:24:51,359 --> 00:24:54,560 Speaker 1: by Alona Samuels, which maybe is my reporting article of 463 00:24:54,560 --> 00:24:58,480 Speaker 1: the year, I delivered packages for Amazon and it was 464 00:24:58,520 --> 00:25:04,560 Speaker 1: a nightmare. In a lot of goes into excruciating granularity 465 00:25:04,600 --> 00:25:08,760 Speaker 1: on the gig economy. Have we gone from the unions 466 00:25:08,800 --> 00:25:12,240 Speaker 1: of your Detroit urine arbor, you're dearborn. Have we gone 467 00:25:12,240 --> 00:25:15,879 Speaker 1: from the unions to the atomization of it down to 468 00:25:15,960 --> 00:25:18,520 Speaker 1: the non union meal you We've been in for twenty 469 00:25:18,640 --> 00:25:21,160 Speaker 1: years and now we're just something new with the gig 470 00:25:21,160 --> 00:25:24,720 Speaker 1: economy that seems even sub below what we were doing 471 00:25:25,080 --> 00:25:28,120 Speaker 1: years ago. Are we in a new round of atomizing 472 00:25:28,160 --> 00:25:32,240 Speaker 1: over the labor economy. Well, one thing we know is 473 00:25:32,480 --> 00:25:35,680 Speaker 1: it's taken us a long time to really firmly established 474 00:25:35,680 --> 00:25:40,040 Speaker 1: the research. But unions reduced inequality and unions boost wages. 475 00:25:40,680 --> 00:25:43,560 Speaker 1: And that's coming on the heels of the latest Supreme 476 00:25:43,600 --> 00:25:48,199 Speaker 1: Court decision that has undermined unions. That unions are in 477 00:25:49,440 --> 00:25:51,639 Speaker 1: massive decline in the United States. In fact, it's almost 478 00:25:51,640 --> 00:25:56,000 Speaker 1: impossible to find a private sector unionized job nowadays. And 479 00:25:56,920 --> 00:25:59,840 Speaker 1: you know, that means that we're removing a force that 480 00:26:00,080 --> 00:26:05,040 Speaker 1: has traditionally served to give workers access to better jobs. 481 00:26:05,040 --> 00:26:09,680 Speaker 1: So that's definitely happening the gig economy. It is not 482 00:26:09,800 --> 00:26:13,000 Speaker 1: most people's primary job. So the BLS just had a 483 00:26:13,080 --> 00:26:17,840 Speaker 1: data saw that. But what they did that that I 484 00:26:17,880 --> 00:26:23,160 Speaker 1: think missed what people are seeing is that they were 485 00:26:23,240 --> 00:26:27,119 Speaker 1: looking at primary jobs. What people are doing is scrambling 486 00:26:27,160 --> 00:26:29,040 Speaker 1: to make a buck on the side, and that's because 487 00:26:29,040 --> 00:26:32,320 Speaker 1: their primary job isn't delivering for them anymore, and so 488 00:26:32,400 --> 00:26:34,720 Speaker 1: they're picking up something on the side. Maybe it's driving 489 00:26:34,720 --> 00:26:38,680 Speaker 1: for Uber, maybe it's delivering packages. Um. You know, they're 490 00:26:39,240 --> 00:26:44,679 Speaker 1: they're finding some sort of side hustle that you have 491 00:26:44,720 --> 00:26:46,959 Speaker 1: to get a lot of fancy degrees, John Tucker, So 492 00:26:47,000 --> 00:26:52,960 Speaker 1: you can side hustle is PhD, you know, side hustle, Betsy. 493 00:26:53,080 --> 00:26:55,440 Speaker 1: This has been great, Thank you so much, greatly appreciated, 494 00:26:55,480 --> 00:26:57,800 Speaker 1: Bessie Stevenson, and I do want to get her on 495 00:26:58,440 --> 00:27:01,040 Speaker 1: more to to. I love that phrase. Side also exactly 496 00:27:01,119 --> 00:27:20,240 Speaker 1: characterizes what Alona Samuel's captures. Here is our John Ferrell 497 00:27:20,320 --> 00:27:24,119 Speaker 1: with Dr Hessett, the opportunity now for welcome our listeners 498 00:27:24,119 --> 00:27:26,440 Speaker 1: on Bloomberg Radio and for our viewers on Bloomberg TV. 499 00:27:26,480 --> 00:27:28,120 Speaker 1: I'm really placed to say that we can cross over 500 00:27:28,160 --> 00:27:30,680 Speaker 1: to the White House now for the Trump administration's views 501 00:27:31,160 --> 00:27:34,240 Speaker 1: on the payrolls report. We're joined by Kevin Hassett, the 502 00:27:34,320 --> 00:27:37,480 Speaker 1: Council of Economic Advisors Chairman. Hey, Kevin, it's always great 503 00:27:37,640 --> 00:27:41,240 Speaker 1: to catch up with you. Solid payrolls growth. Thanks for 504 00:27:41,240 --> 00:27:43,919 Speaker 1: giving your time to Bloomberg TV and Bloomberg Radio this morning. 505 00:27:43,960 --> 00:27:46,120 Speaker 1: I'm just wondering how you stop the President from tweeting 506 00:27:46,119 --> 00:27:49,960 Speaker 1: again this morning. Hey, Like always, I briefed the President 507 00:27:49,960 --> 00:27:52,359 Speaker 1: on the jobs report way ahead of time, and and 508 00:27:52,560 --> 00:27:55,359 Speaker 1: you know, like before he did not reveal the numbers 509 00:27:55,440 --> 00:27:57,880 Speaker 1: or anything. Hey, Kevin, let's not go there. Let's talk 510 00:27:57,920 --> 00:28:00,800 Speaker 1: about how solid the payrolls growth looks and how unemployment 511 00:28:00,840 --> 00:28:02,919 Speaker 1: starts to be taken a little bit higher. Do you 512 00:28:02,920 --> 00:28:05,240 Speaker 1: think it's some evidence here that this is a labor 513 00:28:05,280 --> 00:28:08,720 Speaker 1: market that needs to absorb some slacks still? Oh yeah, 514 00:28:08,880 --> 00:28:11,120 Speaker 1: there's definitely still a lot of room for the labor 515 00:28:11,160 --> 00:28:12,960 Speaker 1: market to absorb the slack. And again, this is a 516 00:28:13,040 --> 00:28:16,679 Speaker 1: great jobs report. We through the year averaging about two 517 00:28:16,720 --> 00:28:19,359 Speaker 1: hundred and fifteen thousand jobs per month, and we're pretty 518 00:28:19,440 --> 00:28:21,080 Speaker 1: much right on that. I think that you had mentioned 519 00:28:21,160 --> 00:28:23,240 Speaker 1: that the markets were moving a lot, and I think 520 00:28:23,240 --> 00:28:25,159 Speaker 1: it's because this is a jobs report that was pretty 521 00:28:25,200 --> 00:28:28,040 Speaker 1: much about what's been happening for the rest of the year. 522 00:28:28,240 --> 00:28:30,600 Speaker 1: The one thing that was different is that the unemployment 523 00:28:30,640 --> 00:28:33,439 Speaker 1: rate inched up. But the reason it did a is 524 00:28:33,480 --> 00:28:35,439 Speaker 1: because there was almost, I guess we could almost call 525 00:28:35,480 --> 00:28:37,639 Speaker 1: it a stampede of people back into the labor force. 526 00:28:37,880 --> 00:28:40,120 Speaker 1: And that's something that President Trump is emphasized as a 527 00:28:40,200 --> 00:28:42,040 Speaker 1: key objective of his policy is going all the way 528 00:28:42,040 --> 00:28:43,840 Speaker 1: back to the campaign, and so it was really hardening 529 00:28:43,880 --> 00:28:45,720 Speaker 1: to see it. I know, it looks like it's bad 530 00:28:45,720 --> 00:28:47,440 Speaker 1: news and the unemployment rate goes up. But if it 531 00:28:47,440 --> 00:28:50,560 Speaker 1: goes up because people are quitting their jobs more and 532 00:28:50,640 --> 00:28:52,520 Speaker 1: heading back into the labor force, which is really what 533 00:28:52,560 --> 00:28:54,320 Speaker 1: we saw on the data, then that means that it's 534 00:28:54,320 --> 00:28:56,360 Speaker 1: a really, really strong market. Kevin. We say it quite 535 00:28:56,360 --> 00:28:58,400 Speaker 1: cleaning that I see you sit in a participation. Right. 536 00:28:58,440 --> 00:29:02,000 Speaker 1: There is one worry that's taken play, Iu swhere this economy. 537 00:29:02,160 --> 00:29:06,280 Speaker 1: The headline numbers look rock solid. There is some nervousness 538 00:29:06,360 --> 00:29:08,600 Speaker 1: from some of the officials in the Republican Party as well, 539 00:29:08,760 --> 00:29:11,560 Speaker 1: and it's around the tarriffs story that could possibly negate 540 00:29:11,600 --> 00:29:14,280 Speaker 1: the positive effect of the fiscal stimulus that your administration 541 00:29:14,360 --> 00:29:18,000 Speaker 1: is introduced. You concerned about that, Kevin, Well, Look, make 542 00:29:18,040 --> 00:29:20,440 Speaker 1: no mistake about it. The President has the right objective 543 00:29:20,560 --> 00:29:22,520 Speaker 1: that he wants to make trade deals fair. He wants 544 00:29:22,560 --> 00:29:24,240 Speaker 1: to make them better than they are right now. There's 545 00:29:24,280 --> 00:29:26,480 Speaker 1: a heck of a lot of problems non teriff farriers. 546 00:29:26,560 --> 00:29:28,440 Speaker 1: You mentioned them in the previous story out China. Bight 547 00:29:28,520 --> 00:29:30,640 Speaker 1: raised non terif farriers in response to this, Well, they've 548 00:29:30,640 --> 00:29:33,200 Speaker 1: already got them left and right. They're doing forced technology 549 00:29:33,200 --> 00:29:35,360 Speaker 1: transfer and so on, and so the objective is to 550 00:29:35,400 --> 00:29:37,320 Speaker 1: make trade deals better and that should be good for 551 00:29:37,360 --> 00:29:39,280 Speaker 1: the economy. And I think, you know, the President wrote 552 00:29:39,280 --> 00:29:40,720 Speaker 1: the Art of the Deal. I think that we're going 553 00:29:40,800 --> 00:29:42,920 Speaker 1: to start to see those deals. And as an economist, 554 00:29:43,000 --> 00:29:44,880 Speaker 1: I also look at the data. I guess that's why 555 00:29:44,880 --> 00:29:46,719 Speaker 1: I'm here right And and one of the things that 556 00:29:46,760 --> 00:29:49,200 Speaker 1: we've been watching for is negative impact in the data 557 00:29:49,240 --> 00:29:52,720 Speaker 1: from the anxiety over over trade. And if you look 558 00:29:52,720 --> 00:29:54,960 Speaker 1: at this jobs report, then one of the key places 559 00:29:55,000 --> 00:29:56,800 Speaker 1: where you would see that would be in the metal 560 00:29:56,920 --> 00:29:59,760 Speaker 1: using industries because the steel and aluminum tariffs are in place. 561 00:30:00,040 --> 00:30:02,480 Speaker 1: And we actually saw an employment increase in the downstream 562 00:30:02,520 --> 00:30:05,760 Speaker 1: industries in this jobs reported. So there isn't clear evidence 563 00:30:05,760 --> 00:30:09,480 Speaker 1: in the data the anxiety over trade is being harmful 564 00:30:09,520 --> 00:30:12,840 Speaker 1: to the industries that we would most watch for harm 565 00:30:12,960 --> 00:30:15,560 Speaker 1: and and I think that that's probably because these people 566 00:30:15,600 --> 00:30:17,840 Speaker 1: all understand that the President's driving the world towards a 567 00:30:17,840 --> 00:30:20,440 Speaker 1: better equilibrium. Well, Kevin, I'm not sure businesses understand that, 568 00:30:20,480 --> 00:30:22,400 Speaker 1: because the Federal Reserve in their minutes were pretty clear 569 00:30:22,480 --> 00:30:25,880 Speaker 1: yesterday the following quote, contacts in some districts indicated the 570 00:30:26,000 --> 00:30:28,800 Speaker 1: plans for capital spending had been scaled back or postponed 571 00:30:28,840 --> 00:30:32,080 Speaker 1: as a result of uncertainty over trade policy. What do 572 00:30:32,080 --> 00:30:34,640 Speaker 1: you make of that, Kevin, Well, that was an anecdote, 573 00:30:34,680 --> 00:30:36,520 Speaker 1: And the question is what's of the data. And in 574 00:30:36,520 --> 00:30:39,480 Speaker 1: the latest capital spending data we have capital spending is booming. 575 00:30:39,680 --> 00:30:42,000 Speaker 1: And if we look at the industries that could be 576 00:30:42,040 --> 00:30:45,960 Speaker 1: most negatively affected in theory from the trade dispute, they're 577 00:30:46,000 --> 00:30:48,160 Speaker 1: actually booming as well and hiring more workers. And so 578 00:30:48,200 --> 00:30:49,840 Speaker 1: if they were really concerned about it, we would have 579 00:30:49,880 --> 00:30:52,920 Speaker 1: expected to see layoffs. Well, the administration is certainly hoping 580 00:30:52,960 --> 00:30:54,960 Speaker 1: there's going to be the stimulus that drives a supply 581 00:30:55,080 --> 00:30:59,920 Speaker 1: side response increased business investment. As you know, Kevin confident 582 00:31:00,480 --> 00:31:02,920 Speaker 1: leads CAFEX decisions, and when the President came into the 583 00:31:02,920 --> 00:31:05,720 Speaker 1: White House, confidence went through the roof. I haven't met 584 00:31:05,720 --> 00:31:08,480 Speaker 1: a CEO that's too confident about this trade story as 585 00:31:08,520 --> 00:31:11,400 Speaker 1: it evolves. Do you foresee any complications of it a 586 00:31:11,440 --> 00:31:14,280 Speaker 1: common months? Why? Yeah, I think that the confidence is 587 00:31:14,280 --> 00:31:17,400 Speaker 1: gonna skyrocket once the President starts to deliver deals, and 588 00:31:17,440 --> 00:31:18,960 Speaker 1: I think in the coming months you're gonna start to 589 00:31:18,960 --> 00:31:21,600 Speaker 1: see those deals. So in the coming months we're gonna 590 00:31:21,640 --> 00:31:23,880 Speaker 1: see some deals, and it raises the question what is 591 00:31:23,920 --> 00:31:26,360 Speaker 1: the minimum condition for success? Because I've spoke to many 592 00:31:26,400 --> 00:31:28,520 Speaker 1: people around this table over the last few months that 593 00:31:28,600 --> 00:31:30,720 Speaker 1: still quite can't can't get a handle on what the 594 00:31:30,760 --> 00:31:34,160 Speaker 1: minimum condition for success is with this ambition to get 595 00:31:34,240 --> 00:31:37,560 Speaker 1: better deals. What is the minimum condition for success? Kevin Well? 596 00:31:37,600 --> 00:31:39,240 Speaker 1: I think the President has been pretty clear that he 597 00:31:39,280 --> 00:31:41,880 Speaker 1: wants deals that are reciprocal. He wants other countries to 598 00:31:41,880 --> 00:31:44,239 Speaker 1: reduce their barriers to the level that we have. And 599 00:31:44,320 --> 00:31:46,440 Speaker 1: I think that, you know, minimum conditions, so the things 600 00:31:46,480 --> 00:31:48,680 Speaker 1: that the negotiators work out. And I'm just the you know, 601 00:31:48,720 --> 00:31:51,760 Speaker 1: the economic adviser. I'm not the negotiator, but I think 602 00:31:51,800 --> 00:31:54,640 Speaker 1: that we want to move pretty much towards reciprocal deals. 603 00:31:54,640 --> 00:31:56,920 Speaker 1: See the President at the G seven meetings said let's 604 00:31:56,920 --> 00:32:00,000 Speaker 1: take everybody take our tariffs to zero. And it seems 605 00:32:00,040 --> 00:32:02,280 Speaker 1: like some of our trading partners got pretty anxious about 606 00:32:02,320 --> 00:32:04,440 Speaker 1: that offer. But it shows that the president's serious that 607 00:32:04,480 --> 00:32:06,000 Speaker 1: he's going to make the deals better. It's to a 608 00:32:06,040 --> 00:32:08,240 Speaker 1: real chance that we could take Harris down to zero. 609 00:32:08,320 --> 00:32:10,320 Speaker 1: Let's talk about the autos. There's a report coming down 610 00:32:10,320 --> 00:32:13,320 Speaker 1: to Germany recently that we could get auto tarrifs down 611 00:32:13,320 --> 00:32:15,160 Speaker 1: to zero. Kevin do you actually see that being a 612 00:32:15,200 --> 00:32:17,760 Speaker 1: real chance, And away from the hysteria on the front 613 00:32:17,800 --> 00:32:20,520 Speaker 1: page of the newspaper, how much talks are happening behind 614 00:32:20,560 --> 00:32:25,440 Speaker 1: the scenes, high level talks between trade negotiators on either side. Well, 615 00:32:25,520 --> 00:32:27,680 Speaker 1: you'd have to interview the trade negotiators about what their 616 00:32:27,680 --> 00:32:30,800 Speaker 1: talks look like. But the briefing that I've been getting 617 00:32:30,920 --> 00:32:33,480 Speaker 1: is that things are moving forward, that there's a good 618 00:32:33,520 --> 00:32:35,520 Speaker 1: chance that we're going to start to make deals. And 619 00:32:35,560 --> 00:32:38,200 Speaker 1: it's very heartening to see that. As you mentioned that, say, 620 00:32:38,240 --> 00:32:40,760 Speaker 1: the European automakers are saying, yeah, let's take the President 621 00:32:40,800 --> 00:32:43,000 Speaker 1: at his word and let's move things towards zero. Now 622 00:32:43,160 --> 00:32:45,640 Speaker 1: they might have to you know, they might be offering 623 00:32:45,680 --> 00:32:48,040 Speaker 1: that while not wanting to reduce their non teriff barriers, 624 00:32:48,080 --> 00:32:49,880 Speaker 1: and so we have to see, right like, how it 625 00:32:49,920 --> 00:32:52,040 Speaker 1: all works out. But in the end, we have fully 626 00:32:52,040 --> 00:32:56,280 Speaker 1: reciprocal deals and the President's approach will have proven correct. Kevin, 627 00:32:56,280 --> 00:32:57,480 Speaker 1: I know it's not your turf, so I want to 628 00:32:57,480 --> 00:32:58,800 Speaker 1: get away from it just for a moment to talk 629 00:32:58,800 --> 00:33:00,720 Speaker 1: about the Federal Reserve, which, to be honest with you, 630 00:33:00,920 --> 00:33:03,160 Speaker 1: is in your grounds and it's something that you watch 631 00:33:03,200 --> 00:33:05,880 Speaker 1: and you carefully proceed with caution to talk about I'm 632 00:33:05,920 --> 00:33:08,600 Speaker 1: sure it was really interesting recently for many people. This 633 00:33:08,640 --> 00:33:11,880 Speaker 1: administration has been so careful about the federal reserve, nominated 634 00:33:11,920 --> 00:33:14,800 Speaker 1: some great candidates to the FED, really not interfered with 635 00:33:14,840 --> 00:33:18,000 Speaker 1: federal reserve policy. And then a crack emerged last week 636 00:33:18,320 --> 00:33:20,920 Speaker 1: when Larry Cudlow, I'm sure a friend of yours, the 637 00:33:20,920 --> 00:33:23,840 Speaker 1: economic advisor to the President, stepped in with a not 638 00:33:23,880 --> 00:33:26,760 Speaker 1: too subtle message for the FED not to go too quickly. 639 00:33:27,160 --> 00:33:29,640 Speaker 1: Is this administration concerned about the FED going too quickly? 640 00:33:31,160 --> 00:33:34,720 Speaker 1: You know, we absolutely, on Larry and I and the President, 641 00:33:34,760 --> 00:33:37,440 Speaker 1: we respect the independence of the FED. We've appointed great 642 00:33:37,480 --> 00:33:39,080 Speaker 1: people to the FED. Some of them still have to 643 00:33:39,120 --> 00:33:42,000 Speaker 1: be confirmed, and they they should hopefully be confirmed quickly. 644 00:33:42,200 --> 00:33:44,560 Speaker 1: But we d respect the indepense to the FED. Larry 645 00:33:44,640 --> 00:33:46,720 Speaker 1: always did, he did last week. I thought that story 646 00:33:46,840 --> 00:33:50,440 Speaker 1: was miscovered. He was speculating about something that that you know, 647 00:33:50,480 --> 00:33:52,360 Speaker 1: I guess I what's speculated about now. But the fact 648 00:33:52,440 --> 00:33:54,560 Speaker 1: is that Larry a hund percent respects the indefense of 649 00:33:54,560 --> 00:33:56,880 Speaker 1: the FED. We would never ever try to pressure them 650 00:33:56,880 --> 00:33:58,600 Speaker 1: to do anything other than what they think is right, 651 00:33:58,840 --> 00:34:00,320 Speaker 1: and we meet with them, you know, I have lunch 652 00:34:00,640 --> 00:34:03,280 Speaker 1: with the J. Powell and the other governors once a 653 00:34:03,320 --> 00:34:04,840 Speaker 1: month and we meet and we talked about how the 654 00:34:04,840 --> 00:34:07,280 Speaker 1: economy is doing. But even at those private lunches, I'd 655 00:34:07,280 --> 00:34:08,880 Speaker 1: never say, hey, come on and cut me some slack 656 00:34:08,880 --> 00:34:12,200 Speaker 1: on interest rates. It would be totally inappropriate. Maybe not privately, 657 00:34:12,239 --> 00:34:14,200 Speaker 1: but this took place quite publicly in an interview with 658 00:34:14,239 --> 00:34:17,280 Speaker 1: the following quote, faster economic growth does not cause inflation. 659 00:34:17,760 --> 00:34:19,400 Speaker 1: My hope is that they understand that they will have 660 00:34:19,440 --> 00:34:23,320 Speaker 1: to move very slowly. That's pretty clear, isn't it. Larry 661 00:34:23,520 --> 00:34:27,120 Speaker 1: was responding to a question, and without you know, giving 662 00:34:27,120 --> 00:34:29,560 Speaker 1: the fat advice. Let me just say that as an economist, 663 00:34:29,560 --> 00:34:32,000 Speaker 1: if you look at a cycle, let's even step outside 664 00:34:32,000 --> 00:34:34,000 Speaker 1: of this one. So we're talking theoretically, if you have 665 00:34:34,040 --> 00:34:36,600 Speaker 1: a capital spending boom, then that can put downward pressure 666 00:34:36,600 --> 00:34:40,040 Speaker 1: on prices and allow late in a cycle for GDP 667 00:34:40,160 --> 00:34:42,320 Speaker 1: growth to be high without creating a lot of inflation. 668 00:34:42,560 --> 00:34:44,560 Speaker 1: And so if we see a capital spending boom, then 669 00:34:44,560 --> 00:34:46,799 Speaker 1: economic theorists would tell you then that might be that 670 00:34:46,880 --> 00:34:49,600 Speaker 1: there's less risk in prices. But I would never advise 671 00:34:49,680 --> 00:34:52,600 Speaker 1: the FED about it, and they're more adept at looking 672 00:34:52,600 --> 00:34:55,280 Speaker 1: at inflation than I am. They've got hundreds of economists 673 00:34:55,280 --> 00:34:57,400 Speaker 1: and doing it for their whole careers, and we respect 674 00:34:57,400 --> 00:34:59,520 Speaker 1: their independence. I know you respect their independence, and the 675 00:34:59,520 --> 00:35:01,480 Speaker 1: econome with ay surely does make sense. But when you 676 00:35:01,520 --> 00:35:03,759 Speaker 1: say the following words, my hope is that they understand 677 00:35:04,040 --> 00:35:07,959 Speaker 1: that they will move very slowly. That's not subtle at all, Kevin, 678 00:35:08,040 --> 00:35:09,759 Speaker 1: I want to reiterate that point. Come on, he's not 679 00:35:09,920 --> 00:35:13,560 Speaker 1: lobbying them. But but but you can bring bring Larry 680 00:35:13,600 --> 00:35:15,520 Speaker 1: on and ask him. But that I can say that 681 00:35:15,560 --> 00:35:17,719 Speaker 1: what Larry is thinking in his head, which is what 682 00:35:17,760 --> 00:35:20,280 Speaker 1: I'm thinking, is that we've got a capital spending boom 683 00:35:20,320 --> 00:35:22,080 Speaker 1: going on and that that should hopefully make it in 684 00:35:22,120 --> 00:35:23,359 Speaker 1: But we're gonna in the end, it's going to be 685 00:35:23,480 --> 00:35:24,799 Speaker 1: the proof will be in the pudding. The proof will 686 00:35:24,840 --> 00:35:26,719 Speaker 1: be in the data, just like we talked about, like 687 00:35:26,760 --> 00:35:30,400 Speaker 1: do we see the trade the down the potential downside 688 00:35:30,480 --> 00:35:32,440 Speaker 1: risks showing up in the job stata and they didn't. 689 00:35:32,600 --> 00:35:34,000 Speaker 1: So ultimately it will be in the data. And I 690 00:35:34,000 --> 00:35:35,719 Speaker 1: think what Larry is saying is he's hoping the data 691 00:35:35,760 --> 00:35:38,279 Speaker 1: turn out to prove our theory is correct. Okay, Kevin 692 00:35:38,320 --> 00:35:40,120 Speaker 1: has said, always great to get your thoughts. Pay Rolls 693 00:35:40,160 --> 00:35:42,520 Speaker 1: looking solid, the economy looking good. Much more on the 694 00:35:42,520 --> 00:35:44,040 Speaker 1: trade story, I'm sure from the White House in the 695 00:35:44,120 --> 00:35:47,680 Speaker 1: coming months. Kevin Hassett there, the Economic Advisor to the President, 696 00:35:47,920 --> 00:35:50,880 Speaker 1: and joining us the Chairman of the National Economic Council 697 00:35:50,920 --> 00:35:53,759 Speaker 1: of Advisors, Muhammad Larry Joan Faro Joam ferroor with a 698 00:35:53,840 --> 00:36:03,000 Speaker 1: spirited conversation there. Thanks for listening to the Bloomberg Surveillance podcast. 699 00:36:03,360 --> 00:36:08,319 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 700 00:36:08,480 --> 00:36:12,800 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom 701 00:36:12,880 --> 00:36:16,759 Speaker 1: Keene before the podcast. You can always catch us worldwide. 702 00:36:17,200 --> 00:36:18,280 Speaker 1: I'm Bloomberg Radio.